King Steel powers the global shoe industry’s green transformation with Dynamics 365

King Steel Machinery was founded in Taichung, Taiwan, in the 1970s. For decades, success had come from designing and building precision shoe-making machinery for big-name footwear brands popular with consumers around the world.

When Jim Chen took over his family’s shoe equipment manufacturing company four years ago, customers at King Steel, the shoe manufacturing equipment manufacturer that Jim Chen took over as CEO, were demanding cleaner, recyclable shoe products. These weren’t just any customers. They were global brands like Nike and Adidas. With hundreds of millions of sneaker wearers embracing sustainability, Chen’s team had to deliver, or risk losing to competitors. With the implementation of Microsoft Dynamics 365, the path towards a “transparent supply chain” model emerged — a model that's good for the planet and good for business.

Global shoe manufacturing is responsible for 1.4% of GHG emissions in the world. Making a pair of sneakers generates 30 pounds of CO2 emissions, the equivalent of charging a smartphone daily for over two years.  Plus, shoes are made of synthetic materials that take years to biodegrade. Chen had to change this. But if green transformation was to happen at King Steel, Chen would need to change the company from its very roots. 

For the company to maintain its standing, Jim and his team had to rethink how production data is collected, processed and used. Then they had to first collect the data and then leverage it to deliver on the promise of a “transparent supply chain”. With Dynamics 365 and Microsoft Cloud for Sustainability applications, King Steel had the tools to bring upon a transformation for sustainability.  

Creating a culture of innovation, backed by data

Jim and his team had a clear goal but getting there was a taunting task. The company was set on the old way of doing things. Communication across teams was difficult. and innovation stalled. Chen saw the need to create a place that rewards outside-the-box thinking and creativity. And for this to work, it had to start from the bottom up, rather than top down.

Chen’s defining move was fully digitizing company operations and connecting all departments and functions with Dynamics 365 Business Central. This digital transition to the cloud puts business operations, cross-department collaboration, and customer relations in one place. 

Employees could access the cloud to find the right information and data to support their ideas and claims, which helped the company make informed decisions. These changes improved internal communication, encouraged creativity, and dissolved the hierarchical structure of the company. Most of the company’s operations even moved to the digital space where teams could discuss ways to make the company work in a more sustainable way.

After seeing a visible shift in company culture, Chen introduced Power Platform to the mix. Power Platform made innovation across departments even easier. Employees from manufacturing, research and development, sales, accounting, finance, and IT could build applications or process automation to streamline business processes across different teams easily on one single platform, regardless of their expertise or experience. This encouraged the exchange of ideas from every department, leading to more innovation driven by accurate data and information. With all these changes in place, Chen and his team were on a path towards a greener transformation.

Greener products via cloud-based data

Next, Chen made collecting production data both easy and routine. He needed a reliable solution to track production materials, recyclability, energy consumption, and carbon dioxide emissions. Traditional methods of manually recording information were time-consuming and prone to human error. Just letting a customer know how long their machinery would take to arrive at their factory took over a day. 

Chen’s team started using Microsoft Cloud for Sustainability services, including the Sustainability Manager to streamline data collection, easily calculate emissions, and generate visualized reports to look out for areas in need of improvement. By integrating data from Dynamics 365, Chen could also track and analyze sustainability data alongside operational data. This improved King Steel’s sustainability performance while also driving business growth and operational efficiencies in the supply chain — a major requirement from global shoe brands and end users who wear their shoes. The team was now on a path towards achieving its sustainability goals.

Customers like Nike and Adidas have asked Chen to provide data directly from the machines to the cloud for a transparent supply chain so they could better understand the company’s manufacturing process. Because of Dynamics 365, Chen was able to give accurate information to its customers, showing them what kind of material was used for each shoe model. The data ensured King Steel’s production process aligned with its customers' sustainability goals. 

On top of this, with a view of the whole production process, Chen reduces waste in two ways. First, by reducing the amount of excess packaging used for products, and second -by reducing waste in the supply chain, Producing excess or disposing of waste requires energy, reducing waste can lead to more efficient use of resources. 

Revolutionizing an industry 

The digital transformation of King Steel has reverberated through the entire company. As of 2022, 80 percent of King Steel’s operations were using Microsoft Cloud services such as Dynamics Business Central, Microsoft Cloud for Sustainability, and the Power Platform. Microsoft tools helped streamline King Steel's operational management, production process, and communication, resulting in both cleaner production and more innovative product development.

It also supercharged their product development. King Steel jumped from delivering an average of one new product per year, to six in 2021, meaning it could meet a higher number of customized solutions than ever before.

In 2022 King Steel introduced NexCell®, shoe production machinery that produces fully recyclable midsoles by replacing chemical agents with breathable air during the foaming process. This innovative machine has revolutionized the way midsoles, traditionally difficult to recycle, are produced. By replacing EVA, a commonly used but highly non-decomposable material in midsole production, with recyclable materials, King Steel has eliminated waste by enabling defective products to be reused and minimizing spillages. 

The carbon footprint of shoes produced with NexCell is only 0.2kg, which is considerably low compared to the average of 4.2kg of CO₂ emissions from a traditional sneaker midsole. If every footwear brand used this eco-friendly technology, more than one billion midsoles per year would be made recyclable. With an average weight of 80 grams per midsole, nearly 90,000 tons of material could be saved and recycled each year – a new way of manufacturing that’s good for the planet, good for business and our future generation.