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Sewing machines to machine learning: Philip Tsang and Lawrence Tsang

Philip Tsang & Lawrence Tsang Co-founders Dakota Industrial

When starting your own business, there are a lot of things you need to take into consideration. “It’s about multitasking in every different aspect of the business,” Dakota Industrial Co-Founder Philip Tsang says. “You have to know about each department and every part of the business if you want to be successful.”

Philip highlights that, as a business leader, your employees are critical. “People are always the most essential and valuable part of the business,” he continues, “You need to adopt a good leadership style and a heart for the company. You have to care for everyone and stick together. Other than that, it’s important to understand the business, the market and the industry at large.”

Philip Tsang & Lawrence Tsang Co-founders Dakota Industrial
Philip Tsang & Lawrence Tsang, Co-founders of Dakota Industrial

Most importantly, Philip says that when you start a business, you need a clear picture of what you’re doing and take opportunities as they arise. “You have to be brave enough to take a chance,” he continues. “Once the chance comes, there might be quite a lot of points you need to consider, but you also have to be confident and grab it.” These insights from Philip come after owning and operating a business for more than 40 years.

The first stitch

Philip, together with his brother Lawrence, established the first Dakota Industrial garment factory in 1979, beginning with just 20 sewing machines in a tiny industrial building. After nearly a decade of growing and refining the family business, the brothers founded their next garment factory in China. “It was quite hard to find an operator in Hong Kong,” Philip recalls. “One of the problems was that manufacturing wasn’t really focused on. At the time,China was going through some economic changes and we thought it was a good chance for business expansion.”

From there, the business continued to grow, establishing more factories in Cambodia and Myanmar. Dakota Industrial manufactures clothing for women and men, including swimwear and sportswear, and clothing for children and infants. From its humble beginnings, it now employs more than 10,000 people and has produced a phenomenal 500 million pieces of clothing.

Over the past few years, the company has achieved significant milestones, particularly when it comes to technology. “We have invested in automation and digitalisation technologies such as radio-frequency identification chips and automatic cutters in our factory,” Lawrence explains. “We use this technology to digitalise and improve our records so they are easier to access. We also do a lot of technology upgrades in our headquarters and use our 3D design software to speed up the process of producing fashion designs for our clients.”

Lawrence adds that artificial intelligence has been another key milestone for the company. “Although AI and other Industry 4.0 elements are more common in the car manufacturing industry, we wanted to be involved in it to give us a cutting edge, as well as improve ourselves and get better performance.”

Philip Tsang & Lawrence Tsang Co-founders Dakota Industrial

A project is currently underway with the Hong Kong University of Science and Technology that uses AI to predict and monitor Dakota Industrial’s products. “This cooperation is actually our first project in the garment manufacturing industry that uses AI,” he says. “It helps us gain a better understanding of the production data. Once we understand relationships inside the data, we can predict the efficiencies we need for our future products.”

Another significant achievement for the company has been improving its corporate social responsibility. “The world is changing and we cannot just provide the best quality and short lead times,” Lawrence says. “We also have to focus on sustainability, whether it’s environmental or social.”

Lawrence highlights the company’s focus on ‘closing the loop’ by developing sustainable clothing. “We know that there are a lot of environmental problems around the world and customers may be quite keen on buying clothes that are environmentally friendly,” Lawrence says. “We participate in the Global Change Award, and after the most recent ceremony, we managed to communicate with two of the winners and share a lot of ideas around developing sustainable technologies.”

Socially, Lawrence mentions how Dakota Industrial addresses wage equality. “We participate with an organisation called the Fair Wage Network,” he says. “One of its schemes aims to better monitor the wage management system and raise workers’ satisfaction about wages.”

Lawrence further mentions the company’s efforts to provide wage security for its female workers. “There has always been some concern about the security of payments to our workers as cash may be taken by their family and there is not much protection for them,” he says. “Hence, we proposed ATM machines in our factory in Cambodia to ensure secure payment of wages and to facilitate better financial management for those employees.”

Philip Tsang & Lawrence Tsang Co-founders Dakota Industrial

Another significant milestone for the company was landing a partnership with major Swedish retailer, H&M. The companies have been working together now for more than 25 years. “We have had the honour of having meetings and conferences with H&M CEO Karl-Johan Persson several times,” Philip says. “We have had the opportunity to share our innovative ideas with him and insights for the future of the garment industry within fast fashion trends. We think all these idea exchanges make our relationship even more solid.”


Sustainably recycling fabrics

Dakota Industrial takes part in the Global Change Award, an H&M Foundation initiative which
supports innovations that create a sustainable
circular fashion industry.

This economic model aims to eradicate waste and recover useful resources, shifting material flows from a straight line to one that recirculates the old to create new products.

Founded in 2015, the Global Change Award identifies disruptive technologies that change the way clothing
is designed, created, transported, used and recycled.
It has even been dubbed the ‘Nobel Prize of Fashion’.

Past winners have included Resortec’s ‘Smart Stitch’, a dissolvable thread that simplifies recycling and Vegea’s vegetal leather made from winemaking leftovers.

Fast fashion

When it comes to keeping up with the latest fashion trends, the company has design at its core. “There are some changes in the fashion market,” Lawrence says. “We can see that people buy clothes and wear them once or twice, so we know that we have to enhance our efficiency, quality and capability in producing different products and designs at the same time, and of course, we have to expand our capacity.

“We have our own design studio where the in-house fashion team is partnered with different independent designers to select the best fashion designs for our customers. The design team is able to create both fast fashion and high-end fashion for our market. We use 3D design software and special fitting software which allow us to deliver the fashion forward designs in a very timely manner.”

Philip Tsang & Lawrence Tsang Co-founders Dakota Industrial

Dakota Industrial decided to invest in its own fabric mill to adapt to consumer needs for more clothing. “The perfect mill provides a service which enables the garment factory to have a very short lead time to produce a garment,” Philip says. “Fabric is so important to us, because it’s the main material of the garment. The best way we can have control over the delivery time of the fabric we need is to make the fabric ourselves.”

Lawrence adds that the fabric mill has been the “backbone” to the company’s success in vertical manufacturing. “We have managed to provide a lead time of two to three weeks, whereas making the fabric used to take six to seven weeks at our factory,” he says. “Now we are able to produce six million pounds of fabric annually. We aim to achieve over 10 million pounds annually by next year.”

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