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Lectra: Establishing its presence in Vietnam

by Apparel Resources

31-December-2016  |  9 mins read

Yves Delhaye (top left), Director – ASEAN (Australia, South Korea, India) and Mathieu Do (top right), General Manager, Lectra with their team
Yves Delhaye (top left), Director – ASEAN (Australia, South Korea, India) and Mathieu Do (top right), General Manager, Lectra with their team

“Lectra’s DNA has been to directly manage the business, but south-east Asia was an exception, owing to the size of the countries and the fact that it was not financially viable to have a subsidiary in each country,” says Yves Delhaye, Director – ASEAN (Australia, South Korea, India) at Lectra. But over time things have changed, after starting operations in India in 2007-08 and in Korea two years ago which had been a success, coming to Vietnam was a logic extension, as 80 per cent of Lectra customers in Vietnam are  foreign direct investment companies. However, this in no ways implies that the journey is going to be easy even for this global giant that provides end-to-end software (CAD and CAM systems) solutions for the soft material industries and operates 34 subsidiaries around the world.

Just three months into the country, having set-up its office in July, Lectra has appointed Mathieu Do as General Manager of the Vietnamese operations and the company is very upbeat of the opportunities, considering the expected growth in the apparel business, post the finalizing of the TPP agreement. “I understand that there is a growing shortage of labour, as workers are not that attracted anymore to the garment companies; they prefer to go to electronics and more ‘posh’ industries like that. So one of the best ways for apparel companies to grow is to invest in automation, not low-cost automation, but value adding automation. We have positioned ourselves as the only value proposition supplier in the business as we do not provide only machines, but complete solutions, advanced software, equipment and also professional services – which are very important. So, that is the reason why it was the right time to enter the country now,” reasons Yves Delhaye.

However, Lectra is not unaware of the challenges, as the market is not yet mature enough to appreciate the technologies being offered. “Our strategy is to explain to the customer that moving from manual cutting room to automated cutting room is not an easy journey.

And we as a company provide the resources to help customers modify their process and perfectly adapt to industry’s best practices and technology,” says Yves Delhaye.

Lectra’s core strategies are offering products that have value, quality and performance – via both services and technology. While the main thrust of Vietnam currently is on production rather than design which according to Yves Delhaye is, “not a priority for the customer as product development is still cheap”, transparency in production, which is only possible through automation, is considered as a main tool for sustainability of the business.

Yves Delhaye
Yves Delhaye

While companies with foreign investments are already interested in doing business with Lectra, the company understands the importance to also engage with local companies for long-term sustainability. Lectra’s strategy is to connect with the top 20 local companies for future growth on account of its belief that performance is valued as priority by large companies, while “medium and small companies aren’t fully ready yet for the change”. Another challenge that the company foresees is work culture adjustment. “Although the training process is well-defined, but to transform workers in conventional-small-business-environments to English-speaking-international ones where they have to meet quarterly targets and value that everybody looks up to them, is likely to give supervisors some sleepless nights,” reasons Yves Delhaye.

Accepting these challenges, Lectra seems to be in no hurry. The company has realized that contemporary managers and CEO’s have their own key performance indicators and won’t accept things beforehand, so the Lectra experts are going to factories analyzing production processes and detecting the gap, accordingly providing the configuration to fill those gaps. “We sell configuration at a higher price than our competitors but we prove to them that the cost per cut piece is lowest in the market. So that’s one approach. The other approach is, if you are looking for performance and quality, choose Lectra, but if you just want a piece of technology, buy any other machine. And it works,” says Yves Delhaye.

Lectra specializes in CAD and CAM systems for soft material industries.

Like in every other country, in Vietnam too the emphasis will be given on educating the customer about the Lectra technologies and their value proposition. Keeping core principles of ‘value’ and its ‘performance’, the industry would be following a set of different strategies in Vietnam, suitable to the needs of the market. Unlike in some other countries, where producers worry about adding capacity only, companies in Vietnam care about reducing the cost and get a better ROI, which is where Lectra performs best. In fact, Lectra focuses not only on providing quality services but also on the maintenance that follows with it. The maintenance of a Lectra cutter is monitored by sensors and checked up physically on a daily basis. This predictive maintenance is an automatic feature of Lectra technologies. “In order to ensure that customers fully benefit from the maintenance expertise and support offered by Lectra, it is only logical that we started operations in Vietnam,” reasons Yves Delhaye.

The company operates 32 subsidiaries around the world with over 23,000 clients in over a 100 countries.

Besides apparel, another product category that brings Lectra to Vietnam is footwear, as the country is one of the largest sports shoes producers in the world with many Adidas and Nike suppliers. “For many years, the footwear companies were very lean and organized, with cut-to-box production, cutting manually. This is changing very quickly because they have realized that with this kind of production, they are wasting fabric and while they might have perfectly optimized the organization for years, the end result is that they are still losing fabric. So now they want to come back to something, which is more balanced, and they want to save fabric which is where we come in,” says Yves Delhaye.

In 1980, Lectra established its first foreign subsidiary in Germany followed by the UK, Italy, Spain and USA.

With a young team of experts that reflect the spirit of Lectra and a determination to work deeply with the industry for change, the company is all geared up to support its new office in Vietnam to reap success of its years of philosophy of ‘value and performance’!