Ep. 110: World Emblem on 2025 trends

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Ep. 110: World Emblem on 2025 trends

The Textile Innovation Podcast speaks to Randy Carr, president and CEO of World Emblem, one of the world’s largest emblem and patch manufacturer.

WTiN: Hi, Randy. Thank you for joining me on the WTiN innovate podcast, please. Could you tell our listeners a bit about yourself and world emblem?

Carr: Yeah. My name is Randy Carr, CEO of world emblem. I've been the CEO for about 24 years, ever since my father passed away in 2000 world emblem is family business. We started in 1990 I should fast forward and even little further back, my father, I saw us growing up, had in a home company that went out of business in 1989 and my brother, my father and I restarted the business in medley Florida manufacturer name tags for a commercial laundry In Miami. The business has since grown to about 1300 employees in five countries, over a million square feet of manufacturing space, and we manufacture up to a million emblems a day, from raw materials to finished product.

WTiN: And as the largest emblem and patch manufacturer globally, how have you seen the textile industry change in, say, the past five to 10 years? And from that, what have been the biggest challenges you have observed and the largest drivers of change?

Carr: So I think, like just, I'll fast forward, I mean, I'll reverse, I'll go back to when we moved into Mexico. That was probably, that was probably the biggest change. Maybe China joining the WTO in 2001 was huge change, a lot. I mean, clearly a lot of companies moved to China, and then Matt just passed, I think even before that. So there's, there's China, the WTO, a lot factories closing, going to China. Then you have, then you have people that didn't want to go that far, so they near short, and they did the McCune Aurora route, which is Mexico. And then there's the Central American trade, trade that was passed. So I guess the answer to that would be a lot of free trade, and then you have a Trump coming into office and starting to you have Trump and really COVID, and those two things really put a stigma on, I would say, global trade moving it back to either near shoring or on shoring. So predominantly, that would be the biggest change I've seen from a trade and labor perspective. And then add to that, probably the second piece of that, and I would say this a little more recent, would be generative AI, and the use of generative AI in areas from design to scheduling to, uh, aggregate data, there's just a whole host of things, but I think that's recently, maybe the last two years.

WTiN: Thank you. And kind of going on from that, in your opinion, why is World emblem well placed to comment on and observe the textile industry?

Carr: So I mean, again, as I stated in the beginning, world level is a global company. So we have a half million square foot a kilo Dora in in Alaska Natives Mexico, that employs over 800 people. We have three locations in states that manufacture badging labels and envelopes, in Atlanta, California and in Houston, Texas, and a location in Canada. We have multiple partner factories in Vietnam, Bangladesh and China, and we also have factory in the UK. So we're well versed on speaking to global trade, and as far as the capital is concerned, I mean our badges, labels and emphas go on everything from AD special team to commercial garments to fashion industry to fashion to work wear. So our our products are using a every textile that you could possibly think of.

WTiN: And leading on from this, as we now move into 2025 you have observed three key trends that will come into play throughout the year. You've touched upon a few of them already. But firstly, could you go into more. How you predict Donald Trump winning presidency in the US will affect the textile industry, as there has been a lot of talk surrounding change to tariffs and the impact this will have on global ports, for example.

Carr: So I mean, again, I think that first of all, I don't, I didn't we. We, you know, going into the election, we weren't sure what was gonna happen, so we planned on both scenarios. Clearly after he won, the talk of trade has increased tremendously. So we continued here at almost every day in the view cycle, you know, depending on how impactful the tariffs are and how fast they come, whether he uses emergency orders or renegotiates trade, you're going to see things from shipping companies, their revenue declining, or that's from air and sea cargo, because clearly, if things aren't coming from completely and they're being made near or on shorter that's a big change there. You're also going to see things like inflation, if you're you know, if you're used to paying $2 per shirt, and all of a sudden you have to pay six, that money has to come from somewhere. So I think those are going to be the biggest impacts. I mean, from our standpoint, in our business itself, we're looking at everything from price increases to closing our factories and moving things right back on shore into the states. So we're kind of taking this from an end to end approach. You know, I think what I would say is hopefully, we're hoping that it's low impact. But we've heard everything from no tariff to 200% tariff, so we're kind of looking at it in between that now we are positioned, we have a mesh, so we're positioned to be able to to manufacture on onshore, meaning in the States, so we can move stuff from Mexico to states, or we could, you know, we continue in our usmca business model, which is Mexico, the States and Canada. And like I said earlier, we have many partner companies in Vietnam, Bangladesh and China, depending upon what happens there. Then we have to deal with that. So I think at this point, no one's really sure what they're going to do. And from our standpoint, it's a lot of the same. It's just coming up with plans and hoping that we the least intrusive one is the will we pull out of the bag.

WTiN: That's super interesting. Thank you. And you obviously mentioned about near shoring and onshoring. Does this all play into that trend of near shoring, and it's something I know you've spoken about previously, and obviously you've just touched upon them. In your opinion, does America need to think more seriously about near shoring and how this could affect countries and regions around the world, such as trade in Europe and Asia?

Carr: So I'm reading Robert Lighthizer book right now, no trade is free, so my opinion is going to be weighted in what he thinks today. But, you know, I don't know it changes every day. I you know, from his perspective, the US has been decimated with free trade, I kind of, you know, we put so much into the field, Nora, into our global trade model, that I kind of want to hope that that we don't have to change that. So, you know, I'm in the selfish camp of we have so much invested in global trade. For that to ship would really be disruptive for us. We're prepared to kind of do anything, you know, from, you know, opinion wise, and I travel around the country quite a bit, you know, I think we could benefit from bringing some manufacturing back to the country. I you know, it's a lot more complicated. This is moving jobs back to this country, though, because you then have to have the infrastructure built up, the education system needs to support that. You have to have the workers that are willing to do those jobs. So there's a lot more to it than just saying we're going to move our job back to the states and hope it works. You know, again, then I take it back to our business. I look at us and I say like, you know, if we end up moving jobs back to the states, we'll increase our investment exponentially in robotics and generative AI in order to not just do a one to one for every job that leaves a global facility, we don't just create a one job in the States. So are the impact would be that are the investment and our technical investment will be increased in order to allow us to not free. A huge pressure on our gross market, because our prices will not be able to keep up with what it would cost us to manufacture in states for a similar product manufacturing in a different country. And I have to imagine that everybody that's in our situation is thinking the same thing for. So it's a, I would say it's a complicated it's a complicated thing, and it's really easy for politicians to just make broad statement, we're going to reshore everything, and everything's going to be great, and tariffs are awesome, and kind of all that. But the reality is that the consumers are the ones that are paying the tariffs, not the exporters. So and even if the exporters were, that's going to create gross market depression, in which case, something's going to give somewhere, you know, in case anybody like China, you have, you know, you have the government, that's, that's, that's propping up, that's propping it up. But that is also short, that's a short lived strategy that's not sustainable.

WTiN: That's really interesting. Thank you. And you mentioned it then about AI and technology, and how will AI be used by World emblem in 2025

Carr: Um, okay, so we have quite a few investments in generative AI now. So I should say we have three sort of overarched huge investments. The first one is to revolutionize our design experience. So you know, our typical business model is to get client artwork or hand drawings, and then we take that from like a hand drawing, and we turn it into a production ready file for embroidery or footprinting or injection molding or laser engraving and on and on we go for all the products we make. We probably have 130 or 140 people involved in that process. And that process can take anywhere from 12 hours to two weeks from the time the customer submits these artwork to the time they get back to finish logo. So we're working on a project that can do that instantaneously using generative AI, and doing it on our economic platform, so the buyer or the client can upload their artwork and see a production ready file within seconds. So that's the first one. That's probably the biggest best, but we've been working on that for about a year now, and we think we'll have a an alpha launch ready before the end of this year, which is rather soon. So that's going to be really disruptive for our customers and our own business. So I think the second one is we just have a ton of data that's in between all of our the time of customer submits a logo to the time of shipping order out. We have a lot of production data in between of all our production machines matched from downtime to production output and things of that nature, and we're not doing anything with that information. So we think there's a way to, once again, going back to that output and gross margin strategy. We think there's a way to increase our output or reduce waste by putting that data to better use by analyzing it. And we think that that's a perfect job for generative AI. And the third one is just a simple one, but complex, because we ship so much, is to look at our shipping, how we're shipping the routes, we're shipping, the times of date we're shipping, the types of packages we're using, and analyze that. So one is the design, and two of it's really around analyzing data. So those are our three big projects for 2025 but then we have a bunch of little so our CTO also has a charge for me to do 24 little generative AI related projects throughout the business. So even things as simple as like getting the service team to use copilot, or getting the finance team to use chatgpt, or the tech coders to use quad, just to familiarize theirself with the tools. Because clearly this is not going away, and those that lead into it are going to be much better poised than the ones that don't.

WTiN: And what are the trends you have observed for 2025. Can you predict what will be the next big wave for manufacturers, trends from the manufacturing sector, for example? Or do you think it will just be this continued adoption and development of these industry 4.0 tools?

Carr: So I'm going to give you my answer. You know, I'm not, I don't get around as much of the apparel industry. There's probably other people that you speak to, but like looking at it from my business and the people like nypo or the other people I speak to, I think the big Lean is what I said earlier, which is, you know, generative AI huge push to that, unless you have, like, an inherent fear of doing it, and if you're a CEO, you're not poised to push, and you're not. Is to push these tools, or you're not, you're not comfortable. You should resign, I think, and get somebody in there. That is because I'm seeing firsthand what they're doing, and it's pretty scary. So like, you know, I'm sure you've heard a lot of pundits saying, but the ones that the businesses that are leaning into this stuff or adopting these things are going to dwarf the ones that don't. So, you know, there's people that are saying, in five years, the ones that aren't involved here, or ones that aren't taking advantage of these things, they won't be around. I kind of, I kind of believe that too. So, you know, I think next year, at least from our standpoint, it's going to be a huge question in your AI, every ounce of free dollar that I have is going into research and development for this, yeah, then I would say, really dependent on what happens when Trump gets in office. You know, for us, it's, you know, like I said, we have plans to completely resort the entire company or handle the tariffs and sort of deal with it as it comes. So we have a couple different playbooks. So I think, like, that's going to be the big talk for at least 2025 I think you're going to know by like, April. Hey, well, clear idea what's going to happen. You know, you know, I have my fingers and hoping it's just the countries that don't really impact me, but I don't think, I don't think I'm that lucky.

WTiN: And you mentioned it then about what you think CEOs should be doing in terms of investing in AI and obviously looking at near showing, could you speculate what you think the biggest barriers towards CEOs and businesses implementing those changes could be?

Carr: Yeah, yeah. I'll give you a couple, you know, again, like, let me do this. Obviously, I think that there's sort of the lack of transparency from certain type of CEO so that the organization may not have trust in the purpose of why the CEO is doing what they're doing. I think we're a level you know, again, I've been a CEO of 25 years. There's, I think there's an amount of trust in what we're saying here, that generative AI is going to disrupt better, that we disrupt our own business than somebody come along and disrupt it for us. So we've been under that kind of principle for a long time. I think that's the first thing. So I think there's just that general fear of disrupting people's jobs and that fear of change. And I think, you know, unless the CEO is being honest with staff all the time, that trust is not there. So the minute you start introducing these things, the first thing people go to is, oh, my God, I'm not gonna have a job. And the reality is it's gonna it's gonna disrupt businesses, and that probably is gonna happen in some way, shape or form. So the idea is to get your people trained to use these tools so they become more efficient, more effective, and remove some waste in their process. You know, naturally, the business has attrition, and you kind of hope that that you will, you won't, you won't lose people because, because they're, they're, they're, they're leaving for other reasons, but the idea of of not embracing these tools, and not taking advantage of every possible tool that's out there for a business is inconceivable to us. So the first thing I would say is that lack of trust.

The second I would say is technical debt. So if you're if you're in a business like mine that has a sophisticated ERP software, sophisticated econ platform, but then a bunch of manufacturing tools, and you haven't kept those things up to date, you're either dealing with the technical debt that's involved in keeping those systems running at current or current minus one versions, and you're just keeping them running, or you're building on a solid infrastructure. Now we've gone through our technical debt phase when we've gone to our probably the last half a decade, but so now we have such a good infrastructure that we're able to spend time building on that. So our teams have the time to invest in learning these tools that are out there, and not just generative AI, but all the tools that our ERP providers have, and our CRM providers, and even the tools from Turner and burger equipment, all that stuff, and you have a lot of software that your teams have to stay involved in. So the second thing would be either chasing technical debt or investing or layering on top of a solid foundation. It's so, you know, I think probably that when I look at our competitors, or again, I look at people that are in my YPO chapters, or businesses that I go visit, that's probably the biggest one that I've seen, that for reasons people can't get this stuff done or can't put the amount of energy that belongs in it.

Clearly, the third one would be, but. Constraints. This is expensive,and there's a finite amount of resources that are dedicated, private firms that are dedicated to doing. I mean, people say they're, they're digital transformation companies, but to find them right, team of people that are just focused on generative AI and are willing to take on some of the unique projects that a mid sized business like mine has invaluable so but it's expensive. You know, we've dedicated, I think 2% of our budget next year is just going into this.

WTiN: And finally, we cannot talk about 2025 without mentioning sustainability. How is this buzzword going to become a core business requirement?

Carr: Again, different philosophies, right? So it depends on the day you catch me. Question. Yeah, it's interesting. So, like, you know, again, we have a we have one in both. It's 100% sustainable. Uh, we're working on another totally sustainable product that will be onshore. And I can't get too much into the details of it yet, but we've been working on this initiative for a couple of years. But it always comes down to, are people willing to pay the price for recycled or sustainable product that are clearly more expensive than than what people would normally use to pay for. And while it is a buzzword, you know, I think, you know, capitalism pushes people to drive towards the lowest possible price regardless of whether it's sustainable or not. And you know, again, in my experience, I've yet to find a client that's willing to pay 30% more for something that we're selling that's sustainable unless their client demands it. So it's still a very low percentage of our sales. We do. We do expect it to increase, but by how much no one really knows. It really depends on when you know when it becomes mandatory.

WTiN: Thank you, Andy. And finally, on the whole, are you feeling positive or nervous for 2025?

Carr: I want to say selfishly positive. My reasons, apart from, like, the Trump bump, which is like, you know, I think that that's really good. I think, you know, I'm a capitalist, regardless of what parties in office. You know, we've done well in both parties, so I don't want to even get into that too much, but our business is positioned well, so for sort of whatever happens. So I think, again, it's selfish. But as I alluded to earlier, we have factory Mexico. We have factories in the States. We have factory in China, factory Vietnam. So regardless of what happens with tariffs, we're in a place to move volume around. And the other thing is, we've just made tremendous investments in technology, so the more and we've been doing it for years. So it's not like this is new. Over the last, I would say, 20 years, we've been aggressively pushing for technology. We've got past that technically, the SCM, which in private business, is brutal, to go from small platforms to mid market platforms, very expensive. It's hard to do, and it crushes a lot of companies. But we're, in a place now where we have foundation that we could we think 4x or 5x the business and not really have to do much. So most of our budget, as I said, is going into generative, AI, r, d, robotics and things like that. So that gets me really, really excited. And you know, again, we're busy right now. So you know, we're going into New Year, and I think you know nothing. Jobs reports still look good. I think interest rates are going to come down, maybe not as much as everyone thought, but like, just stuff generally looks good.

WTiN: Thank you for speaking with us today on the WTiN innovation podcast that was really insightful, and it's going to be interesting to see what the new year brings.

Carr: I think so too. Thank you for having me.