In an era marked by innovative disruptions, the textile industry has not remained untouched. Amidst the traditional landscape, emerges a remarkable paradigm shift embodied by Kloud Knit Mill Limited’s business model. Departing from conventional norms, the Tirupur – based company’s approach unveils a trailblazing narrative that redefines the very fabric of textile operations. At its core lies a fusion of technology, collaboration, and transparency, propelling a harmonious ecosystem that breathes fresh life into the age-old supply chain. This narrative unravels the intricacies of Kloud’s visionary approach, where innovation meets tradition and elevates the industry to unprecedented heights.
Elaborating on the intricacies of the business model, Baskaran, Managing Director of the company, said: “Our business model stands out for its innovative nature, setting it apart from conventional approaches. Central to our distinct approach is the absence of factory ownership. Instead, we are leveraging the untapped potential within units situated in Tirupur. Our strategy revolves around aggregating various components of the textile value chain – encompassing spinners, knitting, dyeing, stitching, and packing units – all united through the seamless integration of technology.”
“Rather than traditional factory ownership, we harness the latent capacity of existing units in Tirupur. This unique method of aggregation facilitates a collaborative ecosystem across the textile value chain. By leveraging technology, we harmonize spinners, knitters, dyers, stitchers, packers, and more, streamlining operations and enhancing efficiency,“ he added.
Benefits of Kloud Knit Mill include:-
- One stop source for any knitted product
- Best in industry order lead time
- Live tracking of orders
- Enhanced sustainability credentials for our customers
Transparency
According to Baskaran, Kloud does not function as conventional merchant buyers. “Let’s delve into their operations: they place orders and carry them through a value chain that involves obtaining yarn, performing knitting, dyeing, and various other steps, all executed without the aid of modern technology and lacking transparency,” he said.
“Contrastingly, our approach adopts a markedly transparent model. Our buyers are well-informed about key aspects. They are privy to information regarding yarn procurement – the sourcing location and associated costs. With the integration of GPS tracking, the precise whereabouts of the yarn in transit can be ascertained. Post knitting, we offer a real-time account of fabric conversion rates. Further transparency is achieved by providing insights into the dyeing process – specifying the dye types and methods employed,” he explained.
“In essence, our innovative system ensures a level of transparency unparalleled in the traditional merchant-buyer dynamic. Through live tracking, buyers gain an in-depth understanding of each stage, from yarn acquisition to fabric conversion and dyeing, fostering a sense of confidence and clarity.”
Daily payment
Delving into another advantage offered by the business model, Baskaran remarked: “The other advantage is that we pay our vendors on a daily basis. We get the goods every day and pay them instantly. In our country, the usual credit period is 30 days or 60 days. Even after those 60 days, you don’t know if the amount will come or not. In this case, there is no concept of debt. You may ask how we are managing. The answer is that we have insurance.”
“In every invoice, there will be a small percentage that will cover any failures. Because we are committing to payment, the vendors will focus on quality and process. To improve the process, we are installing IoT devices in their facilities. Through the IoT device, they can see how efficiently they are running and how they can improve. We know when the machine is not in use. To identify unutilized capacity, we want to install IoT. For example, if you want 600 pieces to be stitched today, then stitch them. There is an SOP. The workers are already trained. They produce the end product with a set procedure. The quality will be the same and uniform for all our vendors,” he shared.
According to him, the unique payment structure where Kloud pays upon daily delivery ensures that sub-players won’t face working capital challenges, alleviating any concerns about quality-related issues. “But how do you maintain quality assurance?” someone inquired. Baskaran promptly responded, detailing their ingenious approach: “Quality control will be managed through a rating system. Just like a credit score, if anyone fails to meet delivery deadlines, their rating will decrease. This system promotes integrity. In the past, external agencies were required to recover outstanding debts, but now people prioritize their credibility due to its impact on their credit score.”
He emphasized the essence of focusing solely on the process. Baskaran promised: “We’ll equip you with comprehensive information — tracing the origins of raw materials, guiding when to halt stitching, monitoring machine operations, and more. Such inputs ensure superior quality. Excelling in production earns you a higher rating, allowing you to command premium prices from buyers. Your costs are directly communicated to the buyer.”
Generates value
His conviction lies in the belief that embracing the Kloud business model generates substantial value. He outlined, “This value represents around 10-15% of the entire supply chain cost. Currently, India’s production expenses exceed those of countries like Vietnam by 10%-15%. However, upon embracing our business model, our costs will align with textile hubs like Vietnam. Notably, regions like Tirupur witness many vendors burdened with high-interest loans from lenders, which subsequently inflate costs for buyers. Our model eradicates such practices.”
In a nutshell, Baskaran’s elucidation highlighted the symbiotic relationship between streamlined payments and elevated quality, underpinned by a revolutionary business model poised to reshape the industry’s dynamics.
For further details on the Kloud business model visit: www.kloudknitmill.com