『CHANEL』――From Gabrielle Chanel to 2026: The Management, Creation, Craft, Clients, and Capital that Built the World's Greatest Luxury Maison (Part 8) (Part IV: Value — Where Does CHANEL's Value Come From? Chapter 7: Craft and Supply Chain)

In other words, Manufacturing Data becomes a foundation of trust for the product throughout its lifetime, not just for production management.

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Genuine Product and Traceability

Luxury brands also have the problem of counterfeit goods.

If you can confirm product manufacturing information and authenticity for a long period, it has value for:

Customers.

Repair departments.

Second-hand markets.

In other words, Manufacturing Data becomes a foundation of trust for the product throughout its lifetime, not just for production management.

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Technology inheritance and corporate culture

However, the most important thing is not just systems.

A company where young artisans learn "we should prioritize quantity even if quality drops" and a company where they learn "remake it if it does not meet standards" have different manufacturing cultures 10 years later.

Technology inheritance is not just conveying techniques.

It is also conveying value judgments about what is considered good work.

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Quality Culture

If this culture exists, they protect quality even if a boss is not watching.

They do not hide problems.

They propose improvements.

They teach young people.

The entire company can maintain quality.

Conversely, if quality is only the job of the inspection department, the field easily chases only quantity.

What is needed for a top-tier brand is deeper than Quality Control:

Quality Culture.

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Manufacturing that makes people shine

CHANEL products are ultimately used by humans.

If it is clothing, it is placed on the body.

If it is a bag, it moves with life.

If it is a watch, it stays on the wrist.

If it is jewelry, it sometimes remembers life's milestones.

Therefore, the purpose of manufacturing is not just to ship a perfect object from the factory.

Creating a state where the user can think:

"Beautiful."

"Comfortable."

"I want to hold it for a long time."

Manufacturing is completed only when it is passed to human life.

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From Product Quality to Relationship Quality

From this perspective, high quality is not just the finish when new.

How is it after 5 years of use?

Can it be repaired after 10 years?

Can you have attachment to it?

Can you pass it to the next owner?

If you think up to there, Manufacturing Quality expands to:

The quality of the long-term relationship with the customer.

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The final goal of technology inheritance

Then, why does CHANEL pass skills to the next generation?

It is not to permanently create the same products as the past.

It is not to replicate current artisans as is.

It is so that the next generation can create:

Things better than the past.

Things that do not exist in the present.

Things that can still be recognized as CHANEL.

Therefore, technology inheritance is not preservation, but:

Leaving future creative capability.

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To the conclusion of Chapter 7

In Chapter 7, we have traced CHANEL products backwards.

Finished products.

Artisans.

Métiers d'art.

Atelier.

le19M.

Materials.

Procurement.

And manufacturing and technology inheritance.

One product is not born from just one designer.

Numerous humans.

Numerous companies.

Numerous materials.

Numerous regions.

Long learning time.

Long investment time.

They are aggregated into one object.

When you come this far, you cannot call craft just "handwork."

It is a huge corporate capability that CHANEL has formed over 100 years.

And what should be asked last is:

What kind of asset should the company hold that capability as?

In the next section, we integrate Chapter 7.

Section 7: Making Craft a Corporate Asset

How can a company not lose, not fix, and continue to use craft—which is established by human skills, relationships, and time rather than buildings and machines—for the next creation?

Section 7: Making Craft a Corporate Asset

For CHANEL, craft is not an added value to make products beautiful.

Without it, you cannot create CHANEL products at the current level in the first place.

Artisans.

Atelier.

Métiers d'art.

le19M.

Materials.

Producers.

Manufacturing technology.

Repair technology.

And education that passes them to the next generation.

If you integrate what we have seen in Chapter 7, you understand that craft is not one technique, but a corporate capability consisting of humans, knowledge, materials, equipment, organization, relationships, and time.

However, there is a difficulty here different from normal corporate assets.

You can own buildings.

You can purchase machines.

You can hold patents as rights.

Artisan skills are not so.

They reside in the human body.

They are lost if people leave.

They decline if not used.

They disappear if not passed on.

In other words, CHANEL making craft a corporate asset is not making artisan skills the company's property.

It is holding as a company the conditions where skills move from person to person, continue to live within the organization, and continue to be used for new creation.

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Assets not on the balance sheet

There are assets in companies that are easy to see in numbers.

Cash.

Real estate.

Equipment.

Inventory.

Accounts receivable.

Intellectual property.

However, if you think about CHANEL's competitiveness, that is clearly insufficient.

One skilled embroidery artisan.

A person who understands material differences just by touching.

A person who can judge manufacturing methods by looking at old bags.

A person who can repair watches from decades ago.

A person who can teach skills to young artisans.

Such capabilities are difficult to evaluate as accounting assets as is.

But the moment they are lost, an impact on corporate value appears.

In other words:

Financial Visibility and Economic Importance do not match.

Just because it is hard to see does not mean the value is small.

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Human Capital alone is not enough

You can call this human capital.

However, CHANEL's craft cannot be fully explained even by that.

Because you do not get the same capability just by hiring one excellent artisan.

The atelier where that artisan works.

Seniors and juniors.

Material suppliers.

Past samples.

Tools.

Quality standards.

Relationships with designers.

Experience accumulated by the company.

These are needed together.

Therefore, craft assets are better viewed as:

Capability System centered on humans, rather than a collection of talent.

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From one genius to organizational capability

In start-up companies, important capabilities tend to concentrate on individuals.

Gabrielle Chanel herself is typical.

She looks.

She judges.

She designs.

She understands customers.

However, for a company to last 100 years, you cannot depend on this capability on just one human.

The founder will be gone.

Artisans will retire.

Management will also change.

Even so, ensure the company does not lose capability.

In other words, what long-lived companies should do is:

Turn Individual Skill into Organizational Capability.

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Do not erase humanity even if organized

However, turning it into organizational capability does not mean making artisans replaceable parts.

Manualize everything.

Make it so anyone can do the same work.

Then, there is a possibility that craft's high-level judgment capability will be lost.

What is needed is:

Leave individual specialization.

At the same time, do not let that specialization be isolated.

Teach.

Record.

Collaborate.

Pass to the next generation.

In other words, balance:

Individual Excellence × Organizational Continuity.

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Lower the Bus Factor

From the perspective of corporate risk, a state where important skills are concentrated on only one person is dangerous.

That person quits.

Gets sick.

Retires.

Just by that, the company loses technology.

In top-tier craft, this risk is especially large.

Therefore, at least multiple people understand the technique,

the next generation is growing,

and knowledge is recorded.

Protect the scarcity of skills while lowering the risk of skill disappearance.

These two do not contradict.

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Preserving alone does not make it an asset

As a method to preserve technology, there are archives.

Old samples.

Drawings.

Photos.

Videos.

Work processes.

Leave these.

However, just being preserved is hard to call corporate capability.

You need people who can use it.

Look at old embroidery,

apply to current materials.

Change to new designs.

Combine with other techniques.

Only when you can do that, preserved knowledge becomes current corporate assets.

Archive becomes Capability only when used.

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Craft evolves as it is used

Normal physical assets wear out when used.

Use machines.

They get old.

However, knowledge has the opposite property.

Use.

Apply to new problems.

Fail.

Improve.

Then capability can increase.

Craft is the same.

Rather than preserving without using technology,

use with new designers,

handle new materials,

challenge difficult issues,

and skills are updated.

In other words, craft is:

An asset that can increase value through use.

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Lagerfeld uses technology

In this sense, Karl Lagerfeld's approximately 36 years were also important for the artisan side.

Issue bold requests.

Workshops respond.

Try new techniques.

Realize.

Different requests come in the next season.

Through such repetition, not only designers but also production capabilities are trained.

Creators use Craft Capability,

and that use further increases Craft Capability.

Mutual reinforcement happens here.

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Blazy's value cannot be measured by finished products alone

The same can be said for Matthieu Blazy.

If you measure the success of a new artistic director only by:

How many were sold.

How much it was talked about on SNS.

it is insufficient.

Workshop capabilities expand due to new requests.

New material research starts.

New collaboration methods with artisans are born.

Then, creative directors have the potential to update:

The company's Creative Capability itself.

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Craft Capital

If you translate this into corporate management language, "Craft Capital" exists at CHANEL.

It is not a single asset.

Skills.

Talent.

Atelier.

Workshops.

Equipment.

Material knowledge.

Archives.

Education systems.

Repair capability.

Relationships with suppliers.

Relationships with designers.

It is established by the combination of these.

And the characteristic of this capital is that it cannot be acquired in a short period with money alone.

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Time that money cannot buy

You have 10 billion yen in funds.

You can build a workshop.

You can also purchase the latest equipment.

However, you cannot purchase 30 years of skill the next day.

You cannot buy trust between artisans.

You cannot replicate relationships with material producers you have dealt with for years with a single contract.

In other words, craft capital contains:

Accumulated Time.

Time itself becomes a barrier to entry.

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Time becomes competitive advantage

In corporate competition, companies with more funds can sometimes catch up later.

Buy equipment.

Pull talent.

Acquire companies.

However, there is a limit to capabilities formed by time.

Even if you hire people, there is no organizational culture to support them.

Even if you buy a workshop, the skill is lost.

Even if you acquire a material company, you cannot understand the relationship.

Therefore, CHANEL's 100+ years is not just the age of the brand.

It is also part of capability accumulation over 100+ years.

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Relationships also become assets

This is important.

When you say corporate assets, you imagine things you own.

However, relationships with things you do not own are also important for CHANEL's craft.

Independent suppliers.

Farmers.

Material companies.

Other specialized workshops.

Educational institutions.

Regional society.

You do not need to acquire all of them.

If there is a relationship you can trust for a long period, that itself becomes competitiveness.

In other words, corporate value is formed not only by:

Ownership

but also by

Relationship Capital.

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What to own, what to relate to

Here, management judgment is needed.

Acquire because it is an important workshop.

Do not own because a long-term contract is enough.

The workshop becomes stronger if it is open to multiple companies.

Involve more deeply because this material has high strategic importance.

It is not a binary choice of "own or outsource."

Long-term contracts.

Joint investment.

Technical support.

Certification.

Direct ownership.

Multiple relationship forms exist.

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le19M is the contact point of tangible and intangible assets

If you look at le19M again, its meaning becomes clearer.

Buildings are tangible assets.

However, its true purpose is to strengthen intangible assets.

Contact between artisans.

Skill inheritance.

Education.

Creative collaboration.

Relationship with society.

In other words, invest in physical architecture to:

Improve Knowledge Flow.

This is an investment that amplifies intangible assets with tangible assets.

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Craft as R&D

You do not need to explain the reason for investing in craft only from tradition preservation.

Prototype.

Research new materials.

Use old techniques for other purposes.

Combine different workshops.

Fail.

Correct.

This is very close to research and development.

Therefore, CHANEL's ateliers and Métiers d'art can also be viewed as:

Physical R&D Infrastructure.

The difference is that research results appear as clothes, bags, and material expressions, not papers or patents.

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Innovation Portfolio

If a company manages R&D, it does not think all research will succeed.

Some fail.

However, it is fine if new capabilities are born as a whole.

Craft is the same.

You do not need to commercialize all prototypes.

As a result of trying:

Only new processing methods remain.

Material knowledge that can be used in other products remains.

Young artisans grow.

That is also investment results.

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Can you make failure an asset?

The difference in corporate capability is born not only by accumulating success, but also by whether you can learn from failure.

This embroidery was too heavy.

This material deformed after time passed.

This part was hard to repair.

Do you throw away that information?

Record it?

Return it to the next product?

If you can convert failure into organizational knowledge, Failure also changes to Future Capability.

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Repair Data as an asset

Repair has even more special information.

Products that customers actually used for several years return.

This is very valuable for manufacturing companies.

You can do durability tests in a laboratory.

However, real life cannot be predicted.

Which part wears out?

How do customers use it?

What remains for 20 years?

Repair Network generates long-term data about CHANEL products.

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The longer the product lifespan, the longer the learning period

There is a characteristic different from short-term products here.

Smartphones change generations in a few years.

On the other hand, CHANEL bags and watches can remain for decades.

Then, you need a long time to fully evaluate product quality.

There are parts where you only know if products created now are truly long-lived when it becomes 2040 or 2050.

Long-term companies need memory capability to receive long-term feedback.

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Can you make technology inheritance a management indicator?

Sales can be measured.

Profit can also be measured.

However, technology inheritance is hard to measure.

Even so, you must manage it.

For example:

Number of skilled workers for each important skill.

Number of successors.

Education period.

Turnover.

Is skill concentrated on one person?

Range of past models that can be repaired.

Financial soundness of important workshops.

If you have such indicators, you can grasp the state of craft assets more concretely.

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You cannot protect with KPI alone

However, it is not enough if you convert to numbers.

10 artisans.

5 successors.

You do not know the skill level with numbers alone.

You do not know human relationships.

You do not know creativity.

Therefore, in the management of craft assets, both Quantitative Measurement and Qualitative Judgment are needed.

Here too, CHANEL is a company that cannot be managed by numbers alone.

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Enclosing humans is not assetization

If a company tries to protect scarce talent, it wants to enclose them so they do not go outside.

However, that alone does not become long-term capability formation.

Artisans:

Can learn.

Can contact other experts.

Can deepen their own technology.

Are respected.

Can teach the young generation.

The environment where that exists is more important.

Do not restrain people, but create an organization where people want to continue demonstrating their capability.

This becomes the condition to maintain human craft assets.

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Scenes where artisans are ahead of the brand

In finished products, the CHANEL name comes to the front.

However, in the manufacturing field, there are scenes where specialized knowledge is stronger than the brand name.

Embroidery artisans know most about embroidery.

Jewelry artisans about jewelry.

Watchmakers about watches.

Whether the management side can respect this specialization is important.

If Brand Power crushes Expert Knowledge, craft capability weakens.

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Decentralized intelligence

Knowledge is not concentrated in one place in CHANEL's craft network.

Designers do not know everything.

Not just the head office.

Workshops.

Atelier.

Material companies.

Stores.

Repair.

Each place has different knowledge.

Therefore, to become strong as a company, being able to connect knowledge when necessary is more important than absorbing them to the center.

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AI can support this connection

Here is a very realistic role for AI.

Search information dispersed within the company.

Search past production cases.

Connect repair information and manufacturing information.

Reference material information.

Support artisan education.

Through this, you can strengthen the Knowledge Network.

However, you do not need to let AI take away artisan authority.

Rather, it is more consistent with CHANEL's craft to use AI as an auxiliary infrastructure to connect dispersed human knowledge.

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Craft × AI

Then, future manufacturing will no longer be "Craft or AI."

Humans look at materials.

AI searches past information.

Digital technology supports prototyping.

Machines perform high-precision processes.

Finally, humans judge.

The optimal combination differs depending on the product.

What is important here too is not technology introduction itself, but understanding where to create value and placing it.

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From Asset Preservation to Asset Renewal

When you say protect corporate assets, you think about not reducing value.

However, in craft, that is insufficient.

Preserve technology.

At the same time, increase new technology.

Inherit talent.

At the same time, bring in new talent.

Leave past material knowledge.

At the same time, research circular materials.

In other words, craft assets must not only Preserve but also Renew.

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Tradition is not a fixed asset

This is also an important organization about tradition.

Not changing tradition is not inheritance.

If you do not change, you will be cut off from changes in society and technology.

On the other hand, if you change everything, tradition itself disappears.

What is needed is:

While holding core skills and quality standards, update methods and expressions.

Tradition is not a fixed past, but a practice that has been continuously updated.

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Impairment of Craft Asset

There is a concept of impairment of assets in accounting.

Something similar happens in craft.

Artisans decrease.

No successors.

Workshops close.

Material suppliers disappear.

Repair technology is lost.

Dialogue between designers and artisans disappears.

If this state happens, manufacturing capability is quietly weakening even if the brand name is strong.

Impairment of craft assets can start before sales decrease.

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Therefore, invest in advance

It is too late after it appears in numbers.

Start nurturing after artisans are gone.

Search for alternatives after material supply is cut off.

Investigate past technology after you cannot repair.

It will not be in time.

The true place to use long-term capital seen in Chapter 5 is here.

Prevent future capability disappearance from the present.

That is long-term investment.

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CHANEL is buying future options

Invest in workshops.

Build le19M.

Nurture young artisans.

Deepen relationships with material companies.

At first glance, it looks like protecting current manufacturing capability.

However, if you look deeper, it is different.

When a new designer comes 10 years later,

they can say "I want to create something like this."

And,

there are people who can realize it.

The greatest value of investment is there.

In other words, craft assets are leaving Future Creative Options to the company.

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Potential in old civilization corporate language

In corporate language of old civilization, it is "potential production capability," "future creative leeway," and "unused technical possibility."

Even if you look only at current products, you cannot see all of it.

Rather than what a workshop made this season,

what that workshop can make next season

can become more important.
Therefore, you need to evaluate corporate assets not only by past performance, but by:

What it makes possible to realize in the future.

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Craft and corporate value

If you organize how investment in craft connects to corporate value:

High skills.

↓

High-quality products.

↓

High customer evaluation.

↓

Strong brand.

↓

Pricing power.

↓

Profit.

↓

Reinvestment in craft.

is the cycle.

However, the true importance is further ahead.

If there is no craft, the next creation itself is constrained.

In other words, Craft does not just support sales, but determines the range in which the company can create future products.

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Look at capability rather than price

If you look at luxury companies from the outside:
How much is the bag?
How much is the revenue?

How much is the profit margin?

are easy to focus on.

However, if you want to understand long-term competitiveness:

What kind of people can create?

What kind of materials can be secured?

What kind of repairs can be done?

What kind of new requests can be answered?

You need to look at.

Price is a result.

Capability is below that.

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Conclusion of Chapter 7

In Chapter 7, we have traced CHANEL's brand value backwards from products.

Craftsmanship.

Métiers d'art.

Artisans and atelier.

le19M.

Materials and procurement.

And manufacturing and technology inheritance.

What appeared last is that these are not separate activities.

Everything forms one corporate capability.

It is not the capability to create high-quality things once, but the capability to create high-quality things in the next generation and update them further.

This is the true meaning of CHANEL holding craft as a corporate asset.

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Assets are passed to customers

However, no matter how excellent craft assets a company has, value is not completed if products are left in the warehouse.

One product arrives at the boutique.

Customer looks.

Touches.

Matches to the body.

Judges the price.

Purchases.

Uses.

Repairs.

In some cases, passes to the next owner.

From here, value formed inside the company moves to the customer's time.

In other words, what we handled in Chapter 7 was value formation until the product reaches the customer.

In the next Chapter 8, we look further ahead.

How does value created by the company change through customer ownership?

How is price formed?

What is scarcity?

Why repair?

What is evaluated in the second-hand market?

And does product value really only decrease as time passes?

Chapter 8: Customers, Price, and Long-Term Value

CHANEL products do not end value formation the moment they are sold. From there, another long time of humans and products begins.