EUROPE
The leading European textile service companies gathered in Paris with their most important suppliers and national associations to network and to further develop their European strategies and policies. Though the general business mode was quite positive, challenges come up with new market conditions, disruptive developments, and digitalization.
The bi-annual conference of the European Textile Services Association (ETSA) was organized 2017 in Paris. More than 110 high calibered persons of the European textile service community joined, representing 24 member companies and 5 national associations.
Charlie Betteridge, Vice President Global Corporate accounts at Christeyns, who served also as moderator of the conference said: “The Champions League of the textile services community is meeting here.” And so was the setting, directly at the foot of the Eiffel Tower, the banks of the Seine in walking distance.
Juha Laurio, President of ETSA, said in his welcome address: “The technological development is changing the way of communication and production, it is changing our society. Innovation and disruption are accelerating also our business. Innovation offers new chances, and disruption bears new risks. ETSA and its members, will guide and facilitate the way of our industry to the next level.”
Lobbying and industry standards
Robert Long, Secretary General of ETSA, together with Deborah Santus Rosen presented the ETSA work program along three lines: (1) lobbying, (2) networking and (3) other activities like studies, seminars and workshops.
One of ETSA’s key roles is to monitor and lobby on EU regulatory affairs. “ETSA is yours ears, eyes and voice in Brussels”, said Robert Long, “and we add legitimacy to bringing industry view to European policy-makers.” To be stronger, ETSA has alliances with other European associations, like Euratex, or the European Safety Alliance. Among others ETSA is also active in the standardization work and contribute to texts in technical standards. Recent examples include standards for high-visibility and knee protectors. Elaborating industry standards and norms is also a very useful field for the work of national associations, which play an important role.
Additionally ETSA and national associations contribute tremendously in communicating industry standards to the industry, sometimes also in terms of “translating” and interpreting ISO and EN-standards to more practical terms. Credit needs to be given here for example to ETSA`s Work Group 2 “Technical standards on PPE”, which issued facilitating papers about protective clothing against heat and flame (ISO 11612) and against liquid chemicals (ISO 13034).
From committees to networking
Networking is an important part of ETSA. It allows industry members to exchange experiences and to collaborate in different forms inside and outside ETSA. Inside ETSA the work has been done for a long time within committees. This will be developed to a more network oriented form, because networks can be more flexible than committees in terms of topics and collaboration of members and external contributors. Accordingly, Robert Long presented a scheme of ETSA activities including (a) the laundry technology and environment network, (b) the workwear and protective clothing network, (c) other activities and (d) the national associations network. One of the highlights of ETSA`s networking initiatives was the World Textile Service Congress 2016 in Bruges, which was strongly supported and implemented by the Belgian Association FBT.
ETSA studies and workshops
ETSA`s other activities include market studies and workshops, to improve business intelligence and background information for marketing. For example safety in laundries is an increasingly important topic of companies and associations, and ETSA will have a safety roundtable in September at Berendsen. Similarly a Clean room seminar had been organized in April 2017 to clarify market potential in that niche.
Change of ETSA Presidents
With this conference in Paris, the term of ETSA-President Juha Laurio ended. Robert Long expressed in a short address his thanks for the productive collaboration, which is not ending, because Juha will remain a board member. Coming President will be Thomas Krautschneider, CEO and owner of Salesianer Miettex from Austria.
Risks of home laundering determined
One of the most urgent topics for textile services is to clarify the risks of home laundering, because these risks might involve health or safety issues for users, which can be avoided with professional textile services. Additionally home laundering is a substantial market potential for the growth of textile services, and an important competition. The ETSA Laundry Technology and Environment Network has guided several studies to explore home laundering, and Katie Laird from the Monfort University in Leicester presented results of the study “Hygiene of domestic laundering”. Her team examined for a health care environment the survival of Escherichia coli and Staphylococcus aureus, organic burden, which is typically found in hospitals and senior homes.
When uniforms are laundered at home, persistence is high, if the washing temperature is 40 degrees Celsius, and it is higher with cotton uniforms than with polyester uniforms. Home laundering at 60 degrees Celsius would be safe, and removes all bacteria examined.
Looking at the actual washing behavior of 265 hospital nurses in four English counties showed, that more than 40 percent of respondents are washing uniforms used in infectious clinical areas with less than 60 degree Celsius. If uniforms are from non – infectious areas, more than 50 percent of uniforms are laundered below 60 degree Celsius. Thus a very substantial risk of contamination and cross-contamination is not removed in home laundering.
There is a guidance on uniform and workwear policies for employees of the National Healthcare System, which wants 60 degree Celsius for 10 minutes in laundering. However there is no control, and the laundering guidelines of hospitals show differences.
Customer expectations examined
Another important study commissioned by ETSA was the “Customer Expectations Analysis” carried out by the consulting firm Ducker Worldwide in 2016.The analysis yielded among other results, that overall 19 percent of customers would like to change their workwear supplier, when current contract expires.
Though a certain turnover of customers is not only feasible, but necessary, almost 20 percent is quite high. The analysis was presented by Paul Mooney, Principal Consultant at Ducker worldwide. It covered with 380 interviews the countries United Kingdom, Germany, France and Poland and concentrated equally on the three industry segments Engineering and Manufacturing, Chemicals and Petrochemicals, and Commercial services.
Looking at differentiation by country, it turns out, that results are quite uneven. While in France 34 % of companies are thinking of changing supplier after expiration of the contract, this is in Germany only 6 percent (see graph “Likelihood to change workwear supplier”). Among the industries covered, the chemical and petrochemical companies had been most critical, whereas commercial services had been less critical.
As main cause for the probable switch the study mentioned more competitive prices from competing suppliers. Somewhat alarming is, that approximately 50 % of supplying textile service companies in these cases have not been aware of the possible switch to other suppliers.
Asked, in which area workwear suppliers should improve most urgently, the top five relate to the performance of rental suppliers: (1) lead times, (2) quality of repair, (3) time required for problem solution, (4) value for money, and (5) quality of cleaning (see graph : “Improvement areas priorities”). Factors, which are more in the field of workwear producers like design/cut/style of workwear, or range are less critical to improve workwear services.
Platforms as disruptive threat
Paul Mooney reported that disruptive elements are gaining grounds in daily life as can be seen with Uber, the platform for taxi services, or Airbnb, the platform solution for hosts and travelers. He mentioned, that also for textile care and textile services incubators, private equity companies, or facility services companies are looking into the potential of platform driven service solutions. Companies like Laundrapp are here quite advanced in the B2C textile care.
Based on 60 additional interviews in France and UK, Ducker found that 20 percent of rental services customers expressed an openness to testing an Uber-like solution. Major reasons for that openness included
(1) ability to negotiate fairer prices
(2) ability to increase power as customer
(3) enter into contract durations which encouraged suppliers to keep their promises and keep them satisfied
(4) ability to select suppliers based on information sharing with other customers.
Though a 20 percent openness to platform solutions is currently not too dangerous, it indicates, said Mooney, that the long-term forces in these disruptive tendencies need adaptions in the current contract model of textile services. “Invest now, defend and grow. Get back to fulfilling basic expectations”, he concluded.
Basic innovations and ethics
Main reason for disruption of business models are basic innovations, which allow to do things differently. The internet of things is not yet fully developed and explored, challenges of current processes are only partially clear. Machines will be intelligent, materials can communicate. The internet of things has self-regulatory abilities.
The vision is to most of us still unclear, but the movement can be described. That’s why Alexandra Deschamps-Sonsino titled her speech “Better the devil you know”. She described how little computers can be put everywhere, even under the skin, to make things and bodies communicative, sending signals as calls for action. With technologies like Arduino or Raspberry Pi it is not expensive to connect things to a network and integrate them to complex communicating environments as part of the internet of things.
Vision: Business among machines
Dominik Bösl, who talked about Robotic Governance pointed out, that disruption will come with full swing, when things do business decisions and act as entities with men or other machines. We are on the edge of extending customers from people to things, and at some point in time smart machines, robots, may do business with each other. Business between smart machines becomes autonomous.
Robots are meanwhile mobile, sensitive, data loaded and provide safe automatic solutions. The next step are robots with cognitive abilities, and this future has started already. Bösl and Deschamps-Sonsino pointed out, that human society is starting to face new ethical challenges. What are robots allowed to do? How smart do we want materials and communication between things? Where do we want to make things intelligent, and is that controlled by human individuals, are these individual decisions, governmental or para-governmental like from social insurances? Bösl pledges to establish a robotic governance. Although this seems to be far away for now…the future has started and will change the business, work places and options of work.
Vision: circular economy
Though society and economy is triggered by innovations like robots, digitalization of things and processes, machine learning, chain blocks, autonomous vehicles, virtual assistants, augmented reality etc., there is another vision, which is based on the reality of scarcity. All digital hype needs to bear in mind that even so called free resources like air and water are not at all endless. Growth and material welfare is bound to the availability of resources. Unfortunately common economic growth theory does not know the concept of restricted resources.
But the “limits of growth” are meanwhile obvious and can be felt. Karl Falkenberg, past Director-General of DG Environment of the EU Commission, said in his speech, that we need to come to a circular business model, where waste is material for new production or can be integrated safely into the natural cycle of raw materials.
“The EU commission is aware that production and economic models need to change”, he said. “European competitiveness has already incorporated more and more “green” elements, which was a very positive factor also in a commercial perspective. Digging into waste gives more value than digging in a gold mine”, Falkenberg reported.
However, change to a circular economy needs to be accelerated. Price structures need to reflect, where the economy should protect resources, fossil resources and fuel should no longer be subsidized. Markets need more regulation to protect environment like regulation was also required to protect the poor and underprivileged people, when the market economy developed to the social market economy. However, that would restrict market forces, and the liberal market model is still prevailing in the developed countries.
Panel discussion about innovation, disruption and textile services
After all these visions and thinking about society and world, moderator Charlie Betteridge discussed with a high calibered panel of the textile service community, what Innovation and disruption mean for textile services. The dice was composed with panelists Juha Laurio, President ETSA and CEO of Lindstrom, Alfonso Marra, CEO Klopman and Andreas Holzer, CEO Bardusch.
Juha Laurio pointed out that innovations are driving not only mature textile services markets, but also new ones. Developing markets have even higher expectations towards innovation, because knowledge is global, and investments can be done from scratch. Asked, if textile services are innovative enough, Andreas Holzer differentiated by production type and said, that workwear services are on a higher innovation level than flat linen services. Innovations in processes are expected to come from suppliers, who have contributed heavily since years, especially to increase productivity and to reduce costs.
Asked about innovation in textiles, Alfonso Marra pointed out, that there is tremendous development for example in smart textiles, which can be equipped with sensors of different kinds. That will be useful for ppe or healthcare. Textile care might need totally new processes for these smart textiles. However, up to now the focus of textile service companies is more on their stable processes than on smart functionalities, which attract customers.
Juha Laurio said that textile services need to integrate better with users and customers. Their expectations are formed among others by the way they buy and communicate for example when booking a hotel. Textile services need to take that into account and support the hotel managers.
Relative to the circular economy Alfonso Marra said that according to him circularity is a huge opportunity, and that he foresees a quality of material, which allows 6 to 7 times recycling as garments. To Marra circularity will happen, question is only when the full swing starts.
Andreas Holzer pointed out that realizing visions, innovation and disruption needs leadership and education in the companies, also in the textile service companies.
Positive outlook for 2020
The economic environment to invest and to realize innovations, is currently very favorable. Bernd Ziesemer, former editor in chief of the highly reputed German newspaper Handelsblatt, presented trends for Europe 2020. European economies are back to pre-crisis levels of 2006/2007, with the exception of Greece. Unemployment rates are coming down, and interest rates plus currency position will foster a moderate, but steady growth path.
Creativity by managed ignorance
The conference presentations ended with a positive note on creativity. Luc de Brabandere, corporate philosopher, pointed out, that key to creativity is not complete knowledge, but model building based on assumptions. To simplify the world or parts of the world to a model requires ignorance and forgetting of big data, compiled and deducted by computers and robots. Not deduction is creativity, but induction, and that requires being incomplete, being only partially knowledgeable and managing ignorance to focus on the development of new ideas and concepts.
Next ETSA conference will be in 2019.
