The fashion industry is a complicated business. Large apparel companies release hundreds if not thousands of new products each season and that means constantly sourcing new materials and working with new suppliers. It takes a global supply chain to roll out the year’s latest styles, whether they’re on the runway or on the rack.
“You have to reshuffle the entire supply chain on a continuous basis,” said Henning von Einsiedel, COO at Holy Fashion Group, during an interview at Celosphere 2022.
Fashion companies, like HFG, are increasingly focused on ensuring that their supply chains and the products that flow from them are sustainable.
“Consumers, customers, employees, laws, society in general will demand sustainability as a normal context of business,” von Einsiedel said.
The international fashion and lifestyle company is headquartered in Kreuzlingen, Switzerland and operates in 50 countries worldwide. Holy Fashion Group started its Celonis journey with Purchase-to-Pay, but has since expanded its use of process mining through the company, specifically for its digital transformation, supply chain optimization and sustainability efforts.
During the two-day event in Munich, von Einsiedel sat down with Acceleration Economy Network analyst Tom Smith to discuss how Holy Fashion Group is using Celonis to drive positive results for the top line, bottom line and green line.
One Celosphere announcement that von Einsiedel was particularly interested in was Process Sphere, a new capability of Celonis EMS built on a new type of process mining technology called object-centric process mining (OCPM). If Holy Fashion can use Process Sphere for end-to-end visibility across its manufacturing production network, it "would be a game changer," he said.
The following is a transcript of the interview, edited for readability.
Tom Smith: For those who are not familiar with your company, why don't we start out just with a little introduction. Who is Holy Fashion? Where are you located? What are some clothing lines or brands that you're associated with?
Henning von Einsiedel: Holy Fashion Group is a fashion group, as the name says, it has Strellson, windsor. and JOOP!. These are three well-known European fashion brands, total outfit [for] man and woman. We are headquartered in Switzerland, but we basically source on a global scale and sell on a global scale.
Tom Smith: And you have been for a while now a Celonis customer. Can you talk about your use of the technology to this point? And I know there's quite a few new developments that we're going to talk about, but if we could set the stage for those with some insight into how you've used it to this point and some of the either applications or use cases.
Henning von Einsiedel: Absolutely. We started using Celonis five, six years ago. I know Basti [Celonis co-founder and co-CEO] from Munich a little bit, and then we started exchanging how we could work together, and we basically started the process mining on the purchase-to-pay process.
And since then, this has proven to be a very successful project for us, very fast return on invest. Sort of process mining wise, automation wise, we have several RPAs in usage, and this is for us a very, very good project. We are a small customer of Celonis, but we are very loyal and I'm also a little bit of, almost a brand ambassador within the fashion business for Celonis.
Tom Smith: And a long time customer.
Henning von Einsiedel: Long time. I mean, of course Celonis since then developed really like the sky is the limit, really great what they're doing and the current step and that this is also what I spoke about yesterday in the panel, was that we basically use this process mining approach, which we do internally, that we try to do it in the entire supply chain with our partners.
Tom Smith: Send it out to partners.
Henning von Einsiedel: Exactly. So basically to reduce emissions there or to optimize of course in the first phase to create transparency, traceability, which is extremely difficult because the fashion business, it's surprisingly global on one hand, and we do several thousand new products on a seasonal basis, new materials, new fabrics, new partners. so you have to reshuffle the entire supply chain on a continuous basis basically. This of course makes it data wise, process and mining wise more difficult, more challenging, and this complexity also of course brings quite some opportunity with it to optimize.
Tom Smith: As I understand it, you've stated publicly now that you're planning to use the new sustainability app, which is including Climatiq partner technology. Can you speak to that? Where exactly do you see the possible payoff? How does that fit into the overall strategy?
Henning von Einsiedel: Absolutely. Yeah. We, or my team, to be honest, we did a hackathon in March this year and basically developed this idea and now we did a project based on that and Celonis, Climatiq and us, we basically try to make transparency in the supply chain to do this, to optimize it together.
To be honest, we are very much at the beginning, and I think in a way within such a project or be it in sustainability, it's a journey. So you are always, in a way, at the beginning, it's a step by step project. You have a clear vision, you should never lose sight of this vision, but you have to go step by step.
And of course all the current plagues, be it pandemic, war, supply chain problems, inflation, recession, they put limits to sustainability, they make it more difficult. So maybe short term you have to take one step back, but then accelerate long term to really reach your objective to optimize the supply chain to get better in sustainability. And for us, in fashion business, for us as a company, this is a huge focus anyway, apart from carbon emissions, but also for example, doing a responsible sustainable collection, the fabrics, the materials, the way we use it, the way we transport it, the way we sell it.
Tom Smith: Okay, so your team participated in a hackathon, so you've got some of your own intellectual property in this as well, is that correct?
Henning von Einsiedel: Yeah, only we've been part of the development. I wouldn't say we have intellectual property, but we've been part of it and we are happy about it because it helps us, helps the Celonis, it helps the world. So we've been part of it. Yes, and we are part of it.
Tom Smith: You mentioned before we got on camera here that Alex Rinke's message around the bottom line, the top line, the green line representing sustainability of course really resonates with you. Can you talk a little bit more about that?
Henning von Einsiedel: Yeah, this was really a very inspiring keynote yesterday, and it put it in a very nice visual context. You remember this aspect of we were at the X-Ray, 2D dimension, and we added a perspective. We did not change the perspective, but we added a perspective, putting it 3D. And if you look at top and bottom line, there are also already many conflicts to your top line or bottom line and you could say, "Oh my God, you have to sacrifice something to do green line as well."
But in the long term you don't have to. It's adding a perspective and it will pay off altogether. You have to work on optimizing the top line, the bottom line, and the green line. In my eyes, this only goes together and naturally it holistically, logically, basically belongs together. And I think consumers, customers, employees, laws, society in general will demand sustainability as a normal context of business. And if we work on that, if we optimize on that, the long-term gain will be successful business because other companies partially, logically, will be squeezed out of the markets because consumers buying our products, they in the end will expect this, I think.
Tom Smith: You mentioned the progression that Celonis is going through, migrating from 2D to 3D. That's one of the big themes of this conference here. So I'm curious, what's your thinking about Process Sphere™? Do you see opportunities in your business with that technology as well?
Henning von Einsiedel: Definitely, definitely. I mean, there was a very nice subway visualization yesterday, which made it very, very clear and linking different systems, different processes in a 3D.
Tom Smith: To think of that in a supply chain context, right?
Henning von Einsiedel: Imagine this is also internally within one company. If we were to able to do this in our manufacturing production network on a global scale, this would be a game changer. This would really add the next perspective. But I know how complex and challenging it will be because it's many different systems, many different companies, some barely have email, some are very advanced, so it's unstructured data. It's not one coherent SAP system, everything running smoothly, but it's really all different stakeholders.
But if we were to be able to do this, this would be a huge opportunity to have real impact and also to give us, as a company, employees, consumers, real purpose in improving things. Because in our eyes, innovation and technology can solve today's and the future problems and process mining will have a vital role in optimizing these things. And so maybe step by step improving things, make the world a little bit better.
Editor’s note: This video was originally published on Acceleration Economy, How Holy Fashion Group Utilizes Celonis Tools to Reach Long-Term Sustainability Goals.