Supply Chain Leadership Series VII: Matthew Wallace, CEO, Project DXM
Changing the way people buy apparel
Matthew Wallace has worked in a number of apparel management roles over his career, including as a Senior Director of Sourcing for Merchandising at Walmart, a senior VP at apparel manufacturer PVH (which owns Tommy Hilfiger and Calvin Klein), and currently the CEO of Project DXM (Digital Xpress Model).
Matthew shared with me his career path, how he ended up working in a start-up, and his advice to supply chain students as they go into the workforce.
What led me from my transition from the corporate world into the start-up world is a problem I have been trying to solve for decades in the apparel sector: How to get closer to the consumer, how to become more sustainable, and how to reduce waste. Most companies in industries like automotive, aerospace, or pharmaceuticals spend 20–30 percent on research and development (R&D), but in apparel, most companies spend less than 1 percent on R&D. Our industry has lagged behind on how to do things differently. And so, we produce a lot of waste. About 25% of all apparel produced goes into the landfill. We are the second or third most polluting industry in the world.
I was challenged at PVH with how to get closer to the consumer, become sustainable, and produce less product that goes to waste. Despite my best efforts, I failed three or four times doing this. I then spent about a year traveling around the world—and when I visited Lear Seating, I was fascinated by how they were doing things. I also was able to learn how Volkswagen, Mercedes, and Porsche were operating with their tier one suppliers. It seemed this model was one that could be used in apparel, so I discussed this with a colleague of mine, and we agreed we should try to mimic this in apparel—and that’s how DXM was started. To be clear, there was a lot of pre-work done by many people for years around this new model along with consultants that helped inform us. Seeing the auto industry operate was a tipping point.
The discovery on a year long journey on who to partner with was quite interesting and in the end, we landed on six companies that would partner to form DXM inc. Together we built the technology platform and a new way to do business, where brands and manufacturers would do something together, (despite being competitors in some cases) in a more sustainable way from the start.
The six companies who agreed invested in the company and in March 2020 equipment showed up at what was to be our Michigan HQ and testing grounds. A few days later COVID hit, so we put everything on pause. About a year later, we refined the technology we created with our newly minted CTO. This resulted in us filing for a utility patent as our technology was able to digitize the end-to-end processes enabling the manufacturing of apparel and footwear on demand and quickly. Consumers would order the product from the brands or retailers, which were then sent to the manufacturer at the machine level when desired in less than a minute. We have had to revise our model three times in the last year and a half, but the learnings have moved us forward significantly.
Today we have emerged as a SaaS (software as a service) and MaaS “manufacturing as a service” company. To emphasize—we are not a brand. We are a software that enables production whether small batch, on-demand unit of one or even for bulk orders. We created this in about 12 months, but the journey has been years.
Once an order is dropped from a brand or perhaps a retail store, it goes into one of their ERP systems. We have the ability to pull that order and immediately digitize this and pass all the required assets to manufacture that product to the factory in 60 seconds or less. The consumer, brand or retailer will receive the product in 5 to 14 days depending on what type of order it is. A unit of 1 order will be delivered in 5-7 days directly to the consumer on behalf of the brand or retailer. DXM is all about having a digital ecosystem. We work with about 20 companies, and we don’t own or control any of them—they are just part of our platform, and we ensure the relationships are mutually beneficial,
We are having discussions with some of the biggest retailers in the world. What we are finding, though, is that if you have the wrong person in the room or discussion, you won’t be able to get them to understand how to behave differently than they have in the past and just try new ways of doing things.
We do think our model is scalable. We firmly believe we can grow in the next 3-5 years more than $50–60 million. The apparel industry is a $1.7-trillion-dollar industry, growing at 3 percent annually. The addressable market of mainstream brands is about $360 billion. If we only tap into 1 to 2 percent of this addressable market and can provide the DXM platform that could shift the industry to a new way of thinking and create less markdowns, inventory and the waste produced.
We recently launched with a direct-to-consumer brand in India that sells exclusively in India. All the raw materials and manufacturing occur in India and the finished product is shipped to Indian consumers within the country. This is a very circular process to the country as there is no waste of materials and products moving across the globe to be produced or shipped.
What does it take to be a start-up? Experience in big companies has helped me bring a different type of savvy to a world that is opposite from a corporate culture. You must have a lot of resilience— a lot of “no’s” happen in this world. You must have an even keel because every day is up or down. Yesterday we launched a new customer and a made-in-the-USA product. But tomorrow something wrong is going to happen, so I have to stay on an even keel.
My advice to students: Don’t think about working for companies. You work for people. Follow your passion and try to do something that does not feel like work, and you don’t dread doing every day. Try to find good people to work with and follow those people. Every 2 years, ask yourself—where am I headed next? And what is the next path for me in the next 5 years?
