SPECIAL REPORT: Discover what a new crafting facility means for Pandora’s future

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Pandora is one of the most talked about jewellery brands within the industry and amongst consumers around the world, so when the brand asked Professional Jeweller to travel to Thailand and participate in the official opening of its new crafting facility, editor Stacey Hailes jumped at the chance to join the ceremony and receive exclusive behind the scenes access.

No doubt when you hear the word ‘Thailand’ and ‘crafting facility’ many questions enter your mind. How is the jewellery made? How much are the workers paid? What’s the workplace environment like? Does the quality of the jewellery suffer?

Hopefully by the time you’ve finished this article most those questions and more will be answered as we provide you with insights from our first-hand experience at Pandora’s brand new state-of-the-art production facility in Lamphun.

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The Grand Opening

One year after turning the first sod, Pandora gathered global press and influential figures from the brand to join together and open its new crafting facility, which is located close to Chiang Mai in Northern Thailand.

Attendees included the founder of Pandora, Per Enevoldsen, chief executive officer, Anders Colding Friis, and the board of directors among others.

There’s no doubt that the opening of the new factory marked a significant milestone for the brand.

As part of Pandora’s long term growth-strategy, the highly modernised and green facility is the first in a line of strategic initiatives driven by the jewellery giant’s goal to meet increasing demand.

“This factory, together with our facilities in Bangkok, plays an important role in Pandora’s future,” said Pandora chief executive officer Anders Colding Friss at the opening ceremony. “With this new factory we can continue to meet consumer demand and craft accessible jewellery. We need to be agile and flexible and this new factory will provide this service. We are one of the most loved brands and it’s a true statement to our future”

Pandora board of directors chairman, Peder Tuborgh, added: “It is no secret that Pandora has over the years grown tremendously. Today, Pandora is the largest producer of jewellery and we are committed to make sure we remain the largest producers in the world.”

The timescale of the factory being built in just over a year shows the dedication and determination of Pandora as a company. It also reflects the brand’s inspirational can-do attitude and the power of the team behind it.

Vice president and general manager, Lars Nielsen, was hired to oversee the project from the first brick laid to the first piece of jewellery produced.

He said at the opening ceremony: “It’s a fantastic feeling standing here today to celebrate with all of you what has been done on this piece of land. We are gathered here today at one of the most modern crafting facilities in the world thanks to the many people who participated in this project.”

Nielsen paid tribute to the brand’s founder, who made a rare appearance, saying it was him who laid the foundations needed to create one of the world’s most lean and effective jewellery productions without compromising on quality or craftsmanship.

“I can admit today that I have had my fair count of sleepless nights, but we did it,” Nielsen continued. “We did it because we believed in it and because we wanted it, and also because it is so typical of Pandora to just do what seems impossible. If you look around, you will see one of the most modern and green facilities in the world, where every small detail has been thought of.”

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Founder of Pandora and chief execs tour the new crafting facility.

Factory Facts

The factory, which has been designed to look like the brand’s iconic charm bracelets, has two distinct goals. Firstly, to improve the brand’s production line, and secondly, to advance Pandora’s efforts to produce sustainable jewellery.

In terms of production, the facility is the cornerstone of the company’s plans to double its shipment capacity and become, in the brand’s words, “the world’s most loved jewellery brand”.

The project also includes building a new crafting facility in Gemopolis near Bangkok, and optimising Pandora’s existing factories in the same area.

Pandora’s senior vice president, Thomas Touborg, said this project could lead to the brand shipping more than 200 million pieces from Thailand by the end of 2019.

He declared: “We want to double the capacity of the shipped products from Thailand by 2019. So by then we should be able to ship 200 million pieces a year. The programme itself is based on the very fact of Pandora being handcrafted jewellery that is affordable across the number of products that we produce. We want to make sure we stick to our ethos and mature and strengthen it, and combine it with modern technology, to deliver faster delivery times. So at these facilities we’ve been able to combine traditional craftsmanship with modern techniques and it’s a really strong set-up and gives us a competitive advantage.”

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New technology and a stream-lined approach should reduce lead times by 50%.

By the end of next year Pandora plans to cut its delivery time from six weeks to three. This will help the brand respond to trends and consumer demand faster than ever before.

In order to speed up the production, Pandora has not merely opened a new factory, which currently hosts 1,500 employees who moved from the brand’s production facility in Bangkok (with plans to hire 500 people from the local area in the next quarter and host 5,000 by the time it is fully utilised at the end of 2018), but it has also sets new standards in the jewellery industry in terms of scale and speed.

Due to its innovative design, the new facility is prepared to facilitate an even more complex production set-up, enabling Pandora to pursue its strategy to expand its product range and at the same time improve lead times.

The facility introduces new ways of crafting jewellery, and combines highly-effective LEAN-oriented production principles with highly qualified craftsman from Thailand.

With a single crafting line from start to finish spread across one 20,000 m2 production floor, the facility uses flow principles and semi-automation to reduce lead times by up to 50%.

This makes it ideal for the brand’s more time consuming products and enables Pandora to keep producing high quality items at affordable prices.

Simply put, the factory has been built on one floor, with four walls and two entrants. To give you an idea of layout, the factory seamlessly takes you through the whole production process in order to eliminate time and travel. The first part of the building hosts the first part of production, which is casting. This area is almost like a factory within a factory as the brand produces its own rubber moulds, which are sent for testing before going to the next stage. Once the moulds have been produced and approved they go through to the next section of the facility where they receive a SKU and become available for staff to work on.

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The facility has been designed to speed up production.

In the next room and stage of the production process, Nielsen explained that the work benches have been laid out to have groups sitting together doing different jobs. For example, one person will do the wax injection, then the person on the next seat will do the inspections, and then the next person along will create the jewellery tree. This is another way of Pandora planning to reduce lead times.

Other changes to the brand’s production process includes the introduction of a casting machine which photographs the SKU of a piece and automatically re-programmes to meet the product’s specific requirements. Nielsen explained: “You improve productivity if you reduce the number of people and time involved, but this has first and foremost been done to improve quality. We did this job manually before and it was not always stable, but by doing it in the machines the robot keeps the product there until it has exactly the right temperature. By introducing the robot it will always be the same. Here is where the right layout and the right tasks and time and transportation increases productivity.”

Other initiatives in the factory  are currently in the experimental stage. These include flow lines which resemble sushi bars. Picture a goldsmith’s table with a conveyer belt and you will be on the right track.

When the new facility is at full capacity the company expects to make 50 million pieces a year in Lamphun, which is approximately 25-30% of the brand’s volume. All of Pandora’s gold jewellery will be made in the new facility as the security and dusting systems are stronger.

 

Building a Greener Future

Aside from increasing the brand’s production capacity, the new factory has also been designed to meet the highest standards in sustainable production.

Due to the architecture and design of the site, the production set-up is offering some of the best working conditions and most modern production facilities of its kind in Asia.

Having achieved the respectable LEED certificate (Leadership in Energy and Environmental Design), the new facility meets the highest demands regarding CSR and sustainability.

While the greater complexity and intricacy of the brand’s designs has made it challenging to simultaneously reduce energy and water consumption, the new crafting facility enables Pandora to significantly improve its environmental performance in the years to come.

“At Pandora, we constantly strive to minimise our impacts on the planet, and we have taken great strides to ensure we can be environmentally friendly in various ways, everyday,” shared the brand’s CEO. “Our new green building meets the highest demands regarding CSR and sustainability, placing Pandora in a league of its own in the jewellery industry.”

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PJ takes a tour with general manager Lars Nielsen.

Lars Nielsen added: “Sustainability is an increasingly important consideration for today’s consumers — and it has been at the heart of our company since the very beginning.”

The construction process itself aimed for high sustainable standards. In order to minimise transport emissions, most of the building materials originated from an area within 800km from the construction site, 30% of construction materials were made of recycled content, and 75% of the construction waste was diverted to recycling facilities.

The new facility provides a healthy working environment for its colleagues too. Due to many impressive sustainable features, water and energy use is lower than ever before for the brand, in fact the facility consumes 18% less energy and 45% less water than conventional jewellery crafting facilities.

Inside the factory the air-conditioning system has been designed to provide thermal comfort to promote the well-being of employees. The building is further equipped with an innovative ventilation system that helps to decrease harmful air contaminants.

On the outside, a lot of effort has been made into making the communal areas cooler. This has been achieved by the shape of the building and a shaded walk space which connects all the buildings. In addition, the solar radiation is reflected by the roof and pavements have been painted with light colours, which helps to lower the temperature and indirectly minimises energy consumption for the air condition system.

To further help the planet Pandora provides a shuttle bus service for employees who reside close to the factory, and a bicycle park to minimise the impact of greenhouse gas emissions from transportation. “The whole exercise is to take the values we built this company with, holding on to our values considering the size of our company, then taking on the considerations of the expectations of our partners, and our reputation, and finding a new way to operate,” shared vice president of group ethics, Claus Teilmann Petersen. “Now with the new facility we can take our commitment to minimising our impact on the planet, and take it to a large scale.”

 

Beyond Being Green

For Pandora, it’s not just about being green though, it’s about looking after the people who work for them as well.

Alongside working in an environment that puts their wellbeing first, Pandora’s staff work European working hours (in Thailand it is normal to work a six day week), and they are paid substantially more than the average wage. Employees who moved from Bangkok to join the Chiang Mai team enjoy the same wage, despite living costs being almost half in Northern Thailand.

“On salary, it is important to see it in context of the Thai society and the buying power here in Lamphun,” shared, Petersen. “What we can say is our employees are often able to live, as a small family, with one person working as a craftsman at Pandora, and the turnover rate being so small shows how attractive it is. Its not just the salary though, it’s the training we do and how we take care of the environment.”

Employees at Pandora also receive pensions, healthcare and insurance, and other benefits such as subsidies and nutritious lunches every day, access to an onsite education facility which boasts free internet and free training courses on non-related work matters including finance, parenting and language to name but a few.

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Employee turnover at Pandora in Thailand is 3.3% as the brand strives to look after staff.

“When it comes to benefits at Pandora one thing that is important to us is that staff have their say so that everything is relevant to our staff and where they are at in life,” continued Petersen, adding: “We have an employee welfare committee which consists of employees elected by the staff and they work with management on how we can improve the working life of all our employees.”

During the official factory opening there was a huge emphasis and gratitude for the 1,500 employees who moved from Bangkok to Chiang Mai. The team admitted that this was actually one of the biggest challenges — persuading people to move from city life to country life.

“In the beginning of course the challenge was to find the right person to do the layout and the right equipment, but it turned out the biggest challenge was actually to move the number of skilled people we have done to be able to start so successfully, without that we wouldn’t be here today,” shared Nielsen. “So all credit to those who moved on the basis of nothing else but our promise that this will be a good place to work.”

Pandora helped moved their employees by offering them a moving allowance and researching the best places to live in the area. Petersen explained: “During the time of the transfer, Pandora sent out a team to help with the preparations, such as finding the best places to live. The communications team here put together videos showing what it would be like to live and work in Chiang Mai, including interviews with locals and information of different parts of the city. They helped share the advantages and the disadvantages of moving to the area.”

In Q2 Pandora plans to hire its first group from the local area. These new employees will learn from the team who moved from Bangkok.

Training at Pandora is always ongoing and over time the brand wants to be more flexible and agile by increasing the amount of people who can move from one process to another.

To give you a glimpse of the desirability to work with Pandora in Thailand, last year when the company announced it wanted to hire 1,000 people in Bangkok they merely put up an A4 note saying ‘if you know anyone who wants to work with us, please tell them to come by on Sunday’. On the day, 12,000 people turned up. And, to give you an idea of how the brand treats the people, they made sure they saw everybody!

In addition, Pandora invited people from Chiang Mai to a taster day in a local department store to drum up interest for working for the business. Nielsen said they expected only 200 people to turn up, but after two hours they had maxed out the whole department store and left with 3,500 names. He commented: “That’s the power of Pandora here.”

The employee turnover at Pandora’s Thailand factories is 3.3%.

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The factory has been designed with production and staff at the centre of its mission.

The DO Campaign

The next step for Pandora is to let the world know what it stands for, so in conjunction with the official opening of the new factory, the brand has launched a new marketing campaign titled ‘DO’.

The DO campaign shares with consumers the heart of Pandora and what it is all about. It’s about sharing its message of sustainability and the other values it believes in such as female empowerment, and encouraging consumers to use its jewellery to express who they are and what they stand for.

“Pandora is a brand rooted in transparency for more than 30 years, offering authenticity and dedication in our actions for bettering ourselves and others,” explained Minna Philipson, senior vice president and chief marketing officer at Pandora. “The DO campaign and our new collections celebrate and bring this ethos to the forefront, ensuring that together, we are doing what is true to us.”

When asked why Pandora has decided to share these messages now, Philipson, who joined Pandora last year, responded: “That was my question as well and that is why we are pushing this now.”

She continued: “It is an important message. When I joined Pandora and learnt about what the brand stood for, I couldn’t believe they hadn’t told anyone. So I said we need to tell people this message. We need to tell people who we are and what we believe in.” Being among the Pandora team it was very clear that everyone is extremely passionate about Thailand. They love the city, its culture, and furthermore, they love the people.

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The DO campaign promotes Pandora’s ethics.

When the founder started the business, he never wanted to destroy the city, he wanted to benefit it and the company has strived to follow suit ever since.

Now, with the DO campaign, Pandora is bringing the story of where and who makes the jewellery alive and celebrating it. The brand is not shying away from where it is manufactured, but rather shining a light on it for all to see.

As such, the new campaign encourages women to do the same — to be true to themselves, and the imagery is bright, vibrant and full of life.

“It’s about encouraging women to be proud of being a woman and showing the world what we can do,” shared vice president of marketing in the UK, Jo Glynn-Smith. “The stores will look a lot more colourful than they ever have before. We are also asking stores to find their own ‘do’. For example, do more, do good, do sell, do love, do enchant.”

Discussing the brand’s ethos to be more about role, than model, Glynn-Smith concluded: “We are a global leader in ethically produced jewellery as well as one of the largest jewellery companies in the world. Our philosophy has always been to lead by example and this message is true from everything including how we produce our jewellery to how we convey our branding messages. We want the ads to inspire women.  We are really proud that we make hand-finished jewellery at affordable prices.”

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