In the late 1960s, he borrowed $8,000 and financed his way into acquiring the fledgling Winnipeg-based ladies’ apparel manufacturing firm, re-naming it “Tan Jay”. From this point on, his entrepreneurial spirit took flight. Today, tall and trim and sporting his signature lion mane of blond hair, Finnish-born Peter J. Nygård heads the privately owned Nygård International, Canada’s largest manufacturer and distributor of women's apparel.

Operating a $300 million fashion empire with factories and distribution centres in Canada, the US, Mexico, and the Orient, as well as research and design facilities in New York, Montreal, Europe and Hong Kong, the privately-owned firm produces approximately 15 million garments annually. Most of the apparel, under the brand names  of Peter Nygård Signature, Bianca Nygård, Nygård Collection, Tan Jay, åliå, and åliå Sport, are sold in stores such as Eaton’s, The Bay, and various retail U.S. stores including Dillard’s, Sears, and Saks Fifth Avenue, as well as Nygard’s own numerous retail outlets.

A longtime champion of free trade and an influential figure in the apparel industry, Nygård spends much of the year jetting around his global enterprise, keeping in touch with his executives by cell phone or e-mail. Still he finds time to enjoy his $12.5 million retreat in the Bahamas. There he entertains guests – the wealthy, powerful, and famous  — his rich-and-famous lifestyle chronicled in Peter C. Newman’s new book, Titans. Despite his love of pleasure, Nygård is a keenly practical man, aware that his business success is sustained by the information that must flow rapidly throughout his organization, driving the  clockwork of Nygård’s vast enterprise: garment design, production, distribution, and sales.

Nygård’s need to keep performance facts and figures within easy reach has led him to declare that, in his company, paper is no longer in vogue! His aversion to paper is merely a side effect of a personal obsession to create a new model for manufacturing. To this end, he has invested a total of $50 million towards building a streamlined computerized operation. The result of this modernization is impressive. Thus far, Nygård International has achieved annual exports into the US totaling $120 million. Last year in New York City, his firm picked up the prestigious AIM All Star Award For International Excellence in Manufacturing.

What has placed Nygård in this coveted circle is his strategic use of information technology since the early 1980s. When Nygård started his company, the apparel industry was a nightmare of paperwork. Critical data was buried within stacks of receipts, sales slips, invoices, orders, journals, and ledgers, not to mention mountains of mail which flowed among vendors, suppliers, merchants, and factories. Everything from inventories to account entries to design sketches was paper-based, making key information hard to locate, transmit, share, and analyse.

Now Nygård is fond of saying that his company is as “good as our information”. He has applied critical data to every step of his clothesmaking, all the way from fabric design to receiving orders to packing and shipping finished garments from factory to store. He  realized that computer processes provide advantages over those performed by human workers. “You can’t just use technology to repeat the traditional process. You have to rethink how you can use technology to do things in a completely different way.” One would have to conceive of a new process and then design it from the ground up. The result was a new kind of manufacturing system.

The culmination of Nygård’s comprehensive vision is in his Automatic Reorder To Sale system called ARTS 2, a system that links all Nygård stores and major retail accounts. Whenever staple items like pants, tops, or blouses are sold, the cash register transactions at the retail outlets trigger reorder forms filed instantly on computer. Once or twice a week the reorders from all over are flashed electronically to the ARTS2 plant in Winnipeg. In this highly automated environment, the reorder information is coordinated to speed every step of production.

For example, before dawn Nygård’s Resources Planning system, that runs on an IBM AS/400, assigns each order a specific number and gives instructions to pull the fabrics needed to make the order. Instantly the Continuous Replenishment or “CR” module, searches all the orders and uses the inventory sizes and shapes to derive the outline markers for the most efficient use of material for production that morning. Giant bolts of fabric are positioned by machine in sequence, as computerized spreaders roll the cloth back and forth like layered pastry over long tables. Then a Gerber cutter “cookie-cuts” the layers into neat stacks of pant legs, collars, sleeves, and dress panels. The new shapes are bundled over to modular sewing stations for assembly. Each finished garment is inspected, barcoded, tagged, and prepared for packing and shipment. Orders which used to take three weeks now go out within a few hours of first notification. Garments are made only when needed, eliminating the high cost of warehousing.

Nygard’s system also links to his major suppliers, who are notified as orders are placed, coordinating the flow of all component parts, including zippers, trims, buttons, and hangers. Via EDI, Nygård’s customers and suppliers can communicate with the company. At present, Nygård estimates his firm is linked electronically to about 85% of his suppliers.  He plans to restrict his supplier base to those who are similarly automated.  “Suppliers who are not smart about using computers are probably not very smart in other areas. They are probably wasteful, and not the sort of supplier we need.” Further, each year, Nygård holds Internet Commerce for Suppliers (ICS) conferences four times a year to educate his suppliers in line with his firm’s development.

To encourage the transition to digital information, Nygård aggressively discourages the use of paper throughout the company. For example, photocopiers require user codes, email messages are mandated to fit single screens, and only network printing is supported. Laptops are used in meetings to record minutes. To stop the hordes of paper faxes, e-mail addresses replace fax numbers on all Nygård business cards. To reduce the risk of disruption of the network from viruses off foreign diskettes, most desktop computers do not have floppy drives.

The marriage of Computer-Aided Design and Computer-Aided Manufacturing (CAD/CAM) is perhaps Nygård’s greatest innovation. Designers create clothing designs on computer screen, including cloth patterns. From there, it’s easy to calculate how much material is needed to make a full run of sizes, to compare this amount with available inventory stock, and to estimate the price of manufacturing to the penny.

A favorite topic at recent conferences within the apparel industry, the major hurdles to rapid and responsive production are communications and coordination, or how long things take to happen. “Almost any garment can be produced quickly,” Nygård observes, “but what takes up the time is all the planning and scheduling.” Nygård estimates that 85% of lead times come from administrative delays at both the retail end and in the factory, which can add three months to the cycle of supply and demand. To buy or reorder fabric, plan production, compute rates, balance factory work flow, count garments and send invoices, prepare and plan transportation, involved huge labour costs and masses of paper work. Almost miraculously, IT has reduced this monumental process to seconds. This saving of time and labour has, according to Nygård, prevented clothing prices from rising for the past decade, and in many instances, caused them to fall.

Nygård sees employee feedback as essential in evolving new processes which will transform the garment industry. “The only way to get people to evolve new systems is to have them use the technology.” Nygård notes. To this end, Nygård invests heavily in training. All employees are properly oriented to all new technologies. Nygård requires that all non-manufacturing employees spend approximately one-third of their time on computer training. Special classrooms, equipped with computers and other related tools are available for employee orientation sessions, ongoing training, and even refresher courses as needed. Employees may attend seminars in using Microsoft Outlook, a program which integrates e-mail, tasks, scheduling, and provides many automatic features for organizing meetings. The use of Outlook throughout Nygård specifically works to eliminate paper-based communications. In addition, a half-hour is set aside weekly for each Department to provide updated information on issues pertaining to training, new employees, and Company news.

As always, Nygard looks ahead. Presently engaged in joint-venture production facilities in Toluca, near Monterrey and at Puebla, one of Mexico’s giant garment centres, Nygard is planning ARTS 3, a state-of-the-art computerized factory.  Further, Nygard is lending his name (via licensee agreement) to brand coats, watches, handbags, eyewear, underwear, hosiery, and sleepwear, and perhaps even perfume. Most significant is his deeper move into e-commerce. Nygard isn’t just a name, he’s a dynasty, and has given his daughter Bianca the task of strategic expansion of the company’s web site (www.Nygard.com). The web site will soon allow direct purchases of Nygard clothing. More important, it will permit retailers and suppliers to deal with the company interactively.

According to Nygard, we have just begun to understand the potential of the Internet.  “When people talk about “e-commerce”, they often mean little more than Web-based retail, selling sweaters and pants. But the biggest gains to be made in e-commerce are in the “back-office”. Probably 70% of administrative work can be done via the Web. This is where one can make fantastic savings, slashing the cost of communications, production, and delivery.” The revolution continues.

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