Interview: Innovation backs Burlington’s 90 years in business
Jeff Peck, president of Burlington Industries
Founded in 1923, North Carolina-based Burlington Industries has spent the last 90 years transforming itself into the world's largest textile manufacturer. Here, president Jeff Peck talks to Michelle Russell about the secrets to the company's success, the ongoing challenges facing the textile industry, and what the future is likely to hold.
Performance fabric maker Burlington Industries is a burgeoning business. Operating as part of the International Textile Group (ITG), it employs around 2,200 staff globally and has operations in the US, Mexico, China and offices in Hong Kong.
Its products range from fabrics for performance and speciality apparel and activewear, to advanced materials for uniform, automotive and technical end-uses.
Burlington's near-century achievement, however, sits slightly in the shade of its sister company Cone Mills - which has been in business for 117 years. "Being 90 years also and sitting next to your sister you feel like the spring chicken here," Peck jokes.
Burlington Industries and Cone Mills are two of three fabric firms that have been placed together under the ITG banner; the other being Safety Components, with which ITG merged in 2006.
"What we do have is a great deal of consistency in our companies over a long period of time," he adds.
Some achievement indeed given the waves of change the textile industry has been through over the 90 years Burlington has been in business. The most dramatic, of course, being the globalisation of garment manufacturing and the ever-changing global supply chain.
"Originally, we used to deal with customers who manufactured garments. Today, we deal with brands who, in most cases, have their garments made by garment manufacturers. That is the single biggest change: the supply chain and where it's moved to," Peck explains.
"You also have ever-changing trade laws and trade agreements like NAFTA and others that clearly affect the manufacturing of garments on a world basis. There are also currency changes and global competition. We grew up in a primarily 'US-made' environment, and now that has changed to an international global business."
It is these changes, however, that Pleck says have made Burlington a more competitive business.
"Our business is full cycle and I'm sure you'll see a change again. There is a demand for more local products. Will [the US] ever make the same amount of garments we made in the 70s and 80s? That's not possible. But you are seeing customers who are looking to bring manufacturing back to this hemisphere."
Investment in the US textile and cotton yarn industry is one area that has ramped-up, especially in recent months, spurred by the country's low-cost and reliable power supplies, easy access to ports, and close proximity to high-quality raw cotton - the US is the world's third-largest supplier after China and India, and its largest exporter.
"It is clearly a trend and there are clearly so many positive reasons to do it. Whether it be to enhance the US economy or reduce your carbon footprint, there is a local movement happening."
Peck, however, points to pricing as a barrier to many manufacturers making that jump.
"Pricing is very sensitive. This hemisphere is more expensive than the Asian hemisphere, but you do have customers that want to invest more in this hemisphere...like Wal-Mart. You also have companies that want to develop more of an individual type of outlook.
"How do we make our garments more special than someone elses? It's difficult to do that in gigantic factories buying base fabrics from one supplier, so you do see this true desire to be different and this is where Burlington can best service the customer."
Operating in the US isn't without its natural challenges either. The Arctic cold that has been sweeping across the country has caused rare winter power interruptions for some spinning mills in North and South Carolina, including Burlington.
"The last three weeks have been very very difficult because of cold weather and reduced supply of both electricity and natural gas," Peck says. "We had quite a bit of curtailment in the New Year. We have lost as much as eight to ten days of manufacturing in the New Year alone."
But he is confident the group will "catch up" with its manufacturing issues by the end of its March quarter. "Hopefully we did a good job in trying to control costs in that period," he adds.
ITG currently operates seven facilities in the US, making it the group's largest base. Outside its domestic market, two facilities are located in China, and three in Mexico.
Whether the group will expand its geographic reach further, the Burlington chief remains coy.
"We are continually maximising the output in our current facilities. I see us maintaining our capability on a capacity level with our customers. If our customers need more, we will grow accordingly. Of course we will always look for investments that make our company more valuable as opportunities arise."
Any additional investment in capacity, however, may depend on the health of the company's bottom line, which Peck suggests is moving in the right direction.
"2013 was a very strong year for us. We reported improved earnings in all of our business units. 2014 is maintaining this pace. We have our business balance. We are fortunate to have a lot of innovative products that are tracking well in the marketplace and we anticipate 2014 to continue to be a good year for us," Peck says.
And innovation, of course, is key for Burlington - a company that prides itself on producing a unique offering for its customers.
In December, Burlington and Cone Denim joined the Nanomanufacturing Innovation Consortium (NIC), giving the firms access to what they describe as some of the most innovative testing equipment available.
Burlington and Cone have also developed "forward looking arms", named Burlington Labs and Cone 3D. Both are charged with looking for "out-of-the-box" technologies and developments that will separate them from the rest of the marketplace.
"These are not your evolutionary products, these are more revolutionary types. We are always looking for new ideas, new technologies and people to collaborate with, to take those ideas and make them commercial."
"In all our categories we're looking for products that will make garments smarter, safer, longer lasting or easier to clean. We're also looking at ways to streamline products, to make them more efficient as well as to create individuality.
"How can we make products in smaller dye lots to give them more surface texture? The list is pretty long. With technology you certainly build a wish list. We probably have 30 projects going at any one time."
Peck says innovation has been the secret to Burlington's success for the past 90 years, in addition to its core customer base.
"Customers continue to push the bar upward. There is a never-ending drive to improve the product and maintain or lower the cost. It doesn't stop. It's a very competitive market globally and our customers push us to be better."
Getting the right balance between cost and quality, however, can be a challenge.
"I wouldn't say it's easy, but customers understand what value we are capable of bringing them. Value is not determined solely by the price of the fabric. We may not be the least expensive, but our quality might be better and our reliability the best. That takes time to prove and, after 90 years, that's what you end up with, very loyal customers."
The road ahead
So, what will be the secret to another successful 90 years in business?
"We can never stop innovating. We have to continue to strive to have a leadership position. You have to expect to see newness and diversity out of our product mix...to make sure we stay out of the cookie cutter environment.
"We are a manufacturing company so our capability and our skill level is what keeps us in business. That's a pretty winding storyline but it is innovation, it's product, it's leadership and it's the people that provide that."
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