Composability: How Luxury Goods Manufacturers Can Remain Resilient

Today’s luxury goods manufacturers are facing a variety of challenges — from rapidly evolving consumer behaviors; to supply chain disruptions; to increasing raw material costs; to finding, training, and retaining a qualified workforce. In order to thrive in this dynamic environment, adaptability is not just an option, but a necessity.

By adopting an agile approach to manufacturing, luxury goods organizations can unlock new levels of efficiency, quality, and profitability — ultimately allowing them to remain resilient while preserving craftsmanship at scale.

Given the following conditions, it’s never been more important for luxury goods manufacturers to find ways to turn pressure into change:

A Growing Market and Evolving Buying Habits

According to Statista, the global luxury goods market is expected to increase from US$349.1 billion in 2022 to US$419 billion in 2027, at a CAGR of 3.7%. However, with success comes new challenges. As the market expands, the client mix changes — introducing new demands and expectations.

For instance, Bain & Company reports that “millennials will represent 40% of the global personal luxury goods market by 2025.” This demographic group has distinct behaviors, including a tendency to make quicker purchasing decisions — and specific needs, such as a desire for the brands they support to align with their personal values. One such value that is of particular importance to this generation is sustainability. Consequently, luxury goods manufacturers face growing pressure to establish sustainable manufacturing operations that minimize raw material waste, prevent defects, and accurately track products and processes in real-time.

Ongoing Supply Chain and Raw Material Concerns

Unfortunately, supply chain and raw material concerns are here to stay. In the National Association of Manufacturers’ (NAM) Manufacturers’ Outlook Survey for Q4 2022, 65.7% of respondents claimed that supply chain challenges were a primary current business challenge — while 60.7% of respondents claimed that raw material costs were a primary current business challenge. Considering these conditions, the need to prevent escapes has never been more urgent.

Challenges in Finding, Training, and Retaining a Qualified Workforce

A large generation of experienced workers is retiring — leaving behind both knowledge gaps and labor shortages. Given the industry’s reputation for requiring a high level of craftsmanship, preserving this knowledge and experience is essential to maintaining a brand’s success.

Meanwhile, the younger generation is entering the workforce with new expectations when it comes to tools and techniques. This digitally savvy group is accustomed to leveraging technology for streamlining processes in every aspect of their lives — and work is no exception. This increased reliance on technology calls for manufacturers to move beyond paper-based approaches and embrace digitization.

To address these challenges and cater to a multi-generational workforce, luxury goods manufacturers need to explore a human-centric approach that leverages technology to augment workers, allowing them to focus their time and energy on critical, high-value tasks. By doing so, manufacturers can balance the need to preserve craftsmanship with the desire to keep pace with evolving market dynamics.

Given the previously outlined conditions, it’s clear that adaptability is no longer an option — but a requirement. By adopting an agile, composable approach to manufacturing systems, luxury goods organizations can remain resilient during these uncertain times.

According to the “Gartner Predicts 2023: The ‘Triple Squeeze’ Will Require Manufacturing CIOs to Gain Visibility by 2026” report, at least 25% of manufacturing operations applications will use a composable technology architecture by 2025 — up from less than 2% in 2022.

In the manufacturing industry, composability ultimately comes down to a way of thinking that allows for flexibility that is uncharacteristic of operations that leverage traditional systems, like MES.

Consider the current state of your production and assembly processes and ask yourself the following questions:

• Are the various devices, tools, and protocols involved well-connected?

• Are there any data silos that create inefficiencies between systems?

• Do your frontline engineers have the necessary context to make data-driven decisions?

• Do they have access to an easy-to-use, streamlined interface?

A composable platform allows you to gradually augment existing systems, versus having to implement a time-consuming, top-down deployment. Through developing and editing no-code apps, your team can easily make updates to the various solutions and processes that support your current operations — and configure new solutions that address your unique, evolving needs. Ultimately, a shift to composability empowers you to go beyond a monolithic approach customized by vendors to a human-centric tech stack that can easily adapt to change.

This type of composable architecture gives you the ability to connect people, information, and machines through custom-built applications — ultimately empowering you to capture more data throughout the manufacturing process, especially from human workflows. This connected environment helps to ensure that the systems that collect this data are always up-to-date.

With this increased production visibility and improved data tracking, you can more easily mitigate any of the information or process gaps you may have identified when answering the above questions.

Think about it this way: If you get down to the basics, data is required, captured, and created in all the places where your workers connect to machines and applications. That information can’t go anywhere — and can’t be added to or changed — if it’s not accessible using applications built on a connected, composable platform.

A truly connected, composable platform gives you the ability to add sensors and other machines to production processes exactly where your team needs them. Frontline operators can then add context to the corresponding data so that it’s even more valuable.

By leveraging a platform that prioritizes edge connectivity, composability, and easy integration with your legacy software, you can connect humans, machines, and information. Ultimately, this augments your frontline operators to collect the data needed to enhance traceability and complete their work correctly so that they can improve product quality while preventing escapes. This type of architecture helps your organization drive continuous improvement as the market changes, allowing you to prioritize addressing critical pain points to remain resilient.