Make America Great Again Hat Manufacturere

Make America Dandy Again Hat Brought To You Past Lean Manufacturing

Nov 11, 2015

This podcast can be heard on Lean Blog

TRANSCRIPT: Mark Graban:  Hi, this is Marking Graban. Welcome to Episode 234 of the podcast on November xvi, 2015. Today's guest is Mitch Cahn; he is president of Unionwear, a manufacturer of hats, bags and apparel in Newark, New Bailiwick of jersey. I commencement learned nigh Mitch and his company at the Northeast LEAN Conference recently, and I blogged nigh that. You can find a link to it at leanblog.org/234. Now, what defenseless my eye was the political hats they produce, including the famous red "Brand America Great Again" lid that Donald Trump wears, among hats produced for other candidates. Beyond the surface of those hats is a fascinating story about competing instead of making excuses. Every bit Mitch explains here in the podcast, Unionwear has been very successful, even though it'southward producing in one of the highest-cost parts of the world. Unionwear has had to compete against imports from Red china and lower-wage southern states hither in the United states, and LEAN has been a major part of their strategy for improving productivity, reducing toll and beingness fast to market. Now, whether y'all work in healthcare or manufacturing, y'all'll really beloved the story, the principles and the ideas behind Mitch, his company and his employees.

So, can you start off past introducing yourself and your company, Unionwear?

Mitch Cahn: Sure. My name is Mitch Cahn; I am the President of Unionwear. I started the business in 1992, and we're based in Newark, New Bailiwick of jersey. We manufacture baseball caps and all sorts of headwear, and sewn bags, like backpacks, laptop bags, tote bags, garment bags, and messenger bags. Everything is 100% made in The states, and everything is made with wedlock labor.

Mark Graban: What prompted y'all to start the business?

Mitch Cahn: I started the business in 1992. I bought a broke baseball game cap factory. Before that, I was working in investment banking, and I actually didn't like it. I wanted to be the client—I wanted to brand stuff. And so I spent nigh a twelvemonth trying to come up with an thought to first a business, and and then I came across this small-scale baseball hat manufacturing plant that had been foreclosed on in Jersey City, New Jersey, and I came upwards with enough money to purchase the equipment at an auctions sale. I was going to exercise something different with that business concern—I was going to start selling baseball caps to the manner manufacture, which was not a matter in 1992. You couldn't go into The Gap or Macy's and purchase baseball caps back then, and I was actually successful very quickly. The thought defenseless on, and we picked upward customers like Ralph Lauren, Nordstrom'southward, and Izod, and we were helped past the growth of outlet stores at that time. However, by 1994, our entire business model collapsed because all of those clients started manufacturing in Red china. It happened really quickly; I didn't meet information technology coming. It was only a couple of years after Tiananmen Square; People's republic of china became this giant in the market economy, and one of the first items they went afterward was baseball game hats, considering information technology's almost all labor.

So we needed to come up with a new business model quickly, and around that time nosotros came upward with the idea of selling products specifically because they were fabricated in the Usa—going afterward the Made in USA market. We started with labor unions. Nosotros really named the company Unionwear because unions were at that fourth dimension i of our natural markets. Nosotros were the only union shop that fabricated baseball game hats. They were natural market for u.s., and then, by the year 2000, we expanded into political campaigns when the Cyberspace made it possible for Al Gore'due south entrada to raise money by giving a baseball lid away to every donor. We had that contract, and that'southward been a big part of our business ever since.

We slowly looked into other markets that nosotros found were buying American. After our LEAN transformation in 2007, we were competitive with non-union shops in the deep south. We could even compete with shops in Puerto Rico for armed forces business—now that's huge role of our business besides. In 2007, we bought a bag factory, and nosotros did a LEAN transformation of that mill. Now that's well-nigh half of our business. Nosotros've connected to expand our markets as the prices of imports continue to surge year afterwards yr, while our domestic pricing really remains flat. We've been able to break into more markets, particularly B2B markets that are looking at co-brands with the Fabricated in USA label, which is really the most valuable brand in the world.

When someone gives a baseball chapeau or bag away, they don't want that product to say "Made in China". A lot of socially responsible companies give numberless and hats away—Whole Foods, Google, and a lot of other companies—and they purchase our products because the union label shows that the products were definitely non fabricated in a sweatshop, and the Made in USA label shows that the products were non shipped halfway effectually the earth. We've also been able to return to the way business over the last 5 years for the beginning time since the early 90s; we've been more competitive, and manner businesses have been going for smaller batch manufacturing.

Mark Graban: It sounds like there'south a sense of purpose hither, whereas a lot of industries and companies go with the flow. When business started going to China, all the lemmings said, "Hello, nosotros accept to go to Communist china!" Even before you lot discovered LEAN, why was it important to you to stay in New Jersey?

Mitch Cahn: Well, I always reminded myself (and that'due south the first ten years I was in business) that if I wanted to make money, it would take been a lot easier for me to stay on Wall Street. I didn't desire to make money; I wanted to make products. I find the manufacturing process extremely rewarding—I come into piece of work, and someone meets me with an idea and leaves a sample. Then I accept to effigy out how to manufacture that sample, what machines to buy and what people to staff. To figure all that out then get out in New York Metropolis and see people wearing and using the products is very rewarding. And then, that was i part of it—I savor the maker experience. Second, from the get-go I wanted to make certain that all of our employees were well compensated and had the aforementioned benefits equally white-collar workers. Our union was the Ladies Material Workers Marriage, and they said nosotros were the first visitor (and nosotros're however probably the simply company) that went to them before we started the business. We wanted to outset a matrimony shop considering I knew we were going to give our employees the benefits that spousal relationship workers would earn anyway. We might too take advantage of the relationship that the unions had and use that for marketing purposes.

Mark Graban: I'g curious to hear more about LEAN. How did you starting time get introduced to the thought of LEAN?

Mitch Cahn: Effectually 2004, we faced with a lot of increasing expenses that were not really affecting the rest of the state. New Jersey was raising its minimum wage significantly ahead of the federal minimum wage. We were going to see our wages go up past about 30-40% pretty speedily. We as well had big increases in health care at that fourth dimension, and most of our competition was not-spousal relationship shops in the S, and in right-to-work states. In most non-union shops, until ObamaCare, in that location was no health insurance offered, and we started to see the toll rise over a 4-twelvemonth period. Nosotros used to pay $50 a worker for health insurance, and by 2004, information technology was about $180. Then our real estate prices right outside the New York surface area started going up pretty quickly. And then we couldn't compete with the South, even for the Fabricated in the USA work, and I was very concerned with our ability to remain a viable visitor. I started looking for a magic bullet, and I stumbled upon a LEAN 101 seminar that was being run by a New Jersey Manufacturers' Extension Program (MEP). I took it, and it really blew my listen. For anyone who isn't familiar with this program, it's a national plan, a i-twenty-four hour period class that trains everyone from executives to factory workers on the whole LEAN process.

It puts people in a fake manufactory making clocks. At the beginning of the day, everyone is using their own traditional methods to set a production line and manufacture very simple clocks with the other executives—these are people who believe they know everything virtually manufacturing. At the showtime of the twenty-four hours, all these executives working together, with all their brainpower, might produce about 15 clocks an 60 minutes. Throughout the grade of the day, LEAN principles are introduced one by one. Then they exercise another simulated menstruation, where the manufacturers take the principle they just learned and apply it to this mini-product line, and their volume increases. From the beginning to the end of the day, this group of executives volition increase their production from 15 clocks to 300-400 clocks an hour! It really opened up my listen to the possibilities in my factory. I even so remember when I came dorsum, and all I could run into was the opposite of LEAN. I was so angry! I was angry at everyone who worked for me for not seeing that they were doing non-value-added work all day, completely forgetting that I had just gone ten years without seeing any of that myself.

Marker Graban: Yeah, it becomes hard when you of a sudden see waste matter and problems that y'all would take looked past earlier.

Mitch Cahn: I just wanted to practise everything at one time, and of class you lot can't practice that, merely I did get back to MEP.  I hired them for a small-scale project while they submitted a grant proposal to the New Jersey Department of Labor to do a LEAN transformation for us. I brought in the consultant from NJ MEP, and he met with our plant manager at the time and me. The plant manager was very onetime-school, a traditional manufacturing production line person with about 30 years' experience, and he was very skeptical of the consultant. All he wanted to know was how he was going to make our car operators run up faster, and the consultant said, "I can't do that. I don't know anything about sewing, to exist totally honest with you." The establish manager asked, "How are you mayhap going to improve our product here?" and the consultant said "Well, I'm only going to focus on what they're doing when they're not sewing. I worked in food companies, pigment companies and machine companies, and it's ever the same things. All I do is look for those things, and I train your workers and your management to eliminate those things through designing the mill differently and training people differently." The plant manager was not convinced, but I brought the consultant in anyhow, and we started with a really simple project. He went for the depression-hanging fruit, and he took a wait at our embroidery operation. We run about 12 embroidery machines here in the middle of our production procedure where we embroider our own hats and bags.

He spent a twenty-four hours observing that procedure and asked me, "How long exercise y'all think your machines are downwardly between orders?"  I remembered this from the spreadsheet that I looked at when I bought the machines, and I said well-nigh xx minutes. He'd fabricated a videotape, and he said, "Well, how most an average of nigh 2 i/ii hours?"  I didn't believe him. I watched the videotape, though, and I saw that the machines were indeed downwards equally he'd said. In the past, I'd walked effectually and saw everyone working difficult and running effectually, and so I couldn't understand why the machines were down for and so long, and this was something that was going on xv to 20 times a 24-hour interval—that was the average number of orders that we are pushing through the embroidery section a twenty-four hours. It turned out to a very simple problem with a very simple solution.

Our embroidery manager was a Chinese National who spoke English language, and our embroidery operators were mostly from Spanish-speaking countries; they spoke a little English language. The manager gave the instruction to go pick out threads of certain colors for an social club. From the time she gave the instruction to the time they brought dorsum the proper cones was about ii and a one-half hours. Why? Based upon the instructions from the customer, she told the staff to look for, say, dark grayness and night dark-green. The employees would go out to the shelves of closed white boxes with the thread color names on them, and the names were things similar cement, and soup and canary and so on. They had to open up box later box to notice the right color thread. If they were lucky, information technology was the thread the embroidery manager had envisioned in her mind. If they weren't lucky, they had to become back and return with another armful of threads. And then they would have to count out the threads—threads were shipped to us in boxes of 12, and our machines had twenty heads on them. And so they'd count them out, they'd have to observe the get-go of each cone and they'd accept to bring them to the machine, put them on the automobile and thread them, and and then go dorsum to go the next color. And so the consultant's first project was to get rid of all the colour names and get rid of the boxes. We put everything in giant zip-lock bags. Nosotros color-coded our manufactory thread department similar a rainbow, and we referred to everything by colour number. We took all the threads and inventoried them in units of 20 to correspond to the machines' 20 heads. Bags would come out to the tabular array; the embroidery machines would exist loaded. When information technology was over, cones would get dorsum into the bags and be put dorsum on the shelf. The whole procedure went from about two and one-half hours to fifteen to xx minutes pretty quickly, and we were easily able to see the power of LEAN in that department. We were sold.

So we went ahead, nosotros got the grant, and we spent near two years putting in every facet of LEAN into the manufactory. We put in 5S, we put in all sorts of Kanban, nosotros did single prison cell menses, and every one of these steps was actually a phenomenal success for us. The 5S is something that we practice every year, and it'southward something the owner really needs to be involved in. For example, no i who works for me is going to throw a machine away. I'll say, "Hey, nosotros're never going to use that car! No one is going to pay for information technology, I simply looked on eBay; we're but going to sell it for scrap." No i else will say that. So I need to actively show upwards, set to get dirty for a couple of days.

Marker Graban: You mentioned the MEP programs, and for people who aren't familiar with that, it'due south a federally sponsored and funded program, simply the MEPs operate at the state level. Some of the MEPs are doing work with healthcare organizations—the Ohio MEP, which works under the proper name TechSolve, is working with both manufacturers and healthcare providers. Yous talked about your healthcare costs going up. If y'all went into a infirmary, I know yous would run into the parallels of why information technology takes so long between cases in the operating room. You talked about sewing—we're not asking the surgeons to work faster, we're just trying to maximize the amount of time during the mean solar day they can really be surgeons, and that makes a huge difference in healthcare. Hopefully it's going to help get costs under control. There are big parallels there.

Mitch Cahn: Yes, at that place are a lot of parallels between healthcare and manufacturing, and coincidentally, while we were going through the outset LEAN transformation my first son was built-in. The consultant, Dave Hollander, who shepherded us through this whole process, ever tells how I came back from the hospital with all these ideas—it was Mt. Sinai in New York, which was already implementing LEAN—that I wanted to put in our factory. We still use a lot of those processes, like color-coded folders. There are so many LEAN improvements that we made, but 1 of the start principles that they taught us was to get rid of tables. Tables are evil! Unless yous are using the table for a item job, it'south going to be filled with garbage, on top and underneath, because that's human nature. I noticed that in hospitals, if anybody needs a tabular array, they go a rolling cart, and so nosotros gave everybody their own rolling cart. We designated places on the cart for everything that they need, and we gave them a small-scale personal space on the bottom for their ain stuff. We nonetheless utilise that, and apart from the productivity gain, the amount of space we gained was great.

Mark Graban: There is a adept full general LEAN principle: put everything on wheels! Be flexible and then you can rearrange cells, rearrange the layout, make changes as customer demand changes to create different chapters—that's definitely a great lesson. There was a letter of the alphabet that you had posted at the Northeast LEAN Briefing. Could yous talk a little bit more than about the idea?  I recall a lot of manufacturers withal don't get the idea that they tin't create value by cutting labor costs. You have to redeploy labor in creating more value. Can you talk nearly what that's meant for you and the company?

Mitch Cahn: Okay, we take a single-minded focus on creating value. In one case the people who work hither empathize what that means, then information technology becomes a mindset, and it becomes very easy to implement whatever of the features of LEAN. We are here to create a finished product that needs to go right into a box and get shipped to a client, and that customer will only pay for the value that nosotros added to that product. So, if nosotros're making products, and nosotros're putting them in boxes, it'south inventory. Nosotros're not creating value at that time; nosotros're only creating inventory. If we are creating work in procedure because people are working faster, that'south not finished product that nosotros can sell. We're not creating value. Now, if nosotros are able to improve our productivity so that nosotros're creating a lot of value, and because of that I lay people off, I'1000 not actually creating value by doing that, either. Creating value ways if I take a 100 people, and they used to make ane,000 hats a solar day, and now they tin can make 2,000 hats a mean solar day, and then 50 people can make ii,000 a day, I'm creating value by taking those other 50 people and creating another product with them. That to me is creating value. One of the keys to our success is our ability to measure the amount of value that we create. We have a process that we use. Nosotros do a lot of custom products—baseball caps are a very cookie-cutter process, that's simply about half of our business organization. The other one-half is bags, and every bag that we make is different. 1 mean solar day we'll be making tote numberless, the adjacent day nosotros'll be making messenger bags. They've got totally dissimilar value street maps, and they've got totally different plant layouts.

So the outset process for us is to effigy out by doing a traditional time study, what is the cycle time of this production? What is the amount of fourth dimension that the worker is actually calculation value to the product, just picking 2 pieces of fabric and sewing them together? Or cut that fabric—that'southward really all we do that adds value. Everything else we exercise, such every bit looking for thread, waiting for instructions from a director, redoing work or building up work in process, that'due south not adding value. So if we take an attaché, and nosotros know that attaché has 20 minutes of time that's spent simply adding value to that production, nosotros can then measure our output in terms of minutes of work created against the amount of time that our workers worked. So nosotros say, based on our time studies, our workers created 10,000 minutes of piece of work today, but based on our time clock, they worked 20,000 minutes. That means they spent l% of their time creating value. We mensurate this all the time. It enables us to get our pricing in check, enables us to know if we're meeting our margins just by walking on the floor and seeing if there is work in process or if there are people moving around.  It's created goals for everybody to know whether the shop is LEAN and creating value or non.

Now, when we started this process, before we did any LEAN stuff, we were adding value only 20% to 25% of the time. The balance of it was all spent on non-value-added piece of work. By the end of the process, we were adding value about 65% of the fourth dimension, and so our productivity almost tripled. It was hard for most of our line workers to grasp the concept of what we were trying to sell to them, and so we changed our measurement from percentage of fourth dimension working efficiently (or adding value) to hours per day, and so people finally started to become it. We said, hey, you know, believe information technology or not, yous're only spending well-nigh two hours a mean solar day sewing, merely you're getting paid for eight. We're asking yous to spend about five and half to six hours sewing and become paid for eight, and they got information technology. That actually seemed similar a great bargain to them. We were able to retrain everybody on LEAN principles; we fabricated our own videos highlighting about 50 different non-value-added tasks that were regularly performed in the factories, and so nosotros could help people identify them.

Mark Graban: In that location are many things that are interesting and impressive about your story, but I recollect one of them is your involvement equally an owner. LEAN is not just an operations strategy; it really is a key slice of your concern strategy—it'south how you're running the business and trying to exist successful in the long term.

Mitch Cahn: Yeah, I think if I were to draw my job, I'm in charge of LEAN here. Everything else kind of takes care of itself, only LEAN is a battle against human nature, and it constantly needs improvement. If you lot're doing LEAN properly, you need to continually improve, because if you lot are able to articulate upwardly one clogging, there's going to be another bottleneck created somewhere else. Yous clear up that bottleneck in sales, and there's going to be a bottleneck in production. You clear upwards that bottleneck, so you notice a bottleneck in order processing. And then I go out the top line growth up to the salespeople, and I take care of the growth and capacity by implementing LEAN principles throughout our entire organisation.

Mark Graban: At the briefing you displayed hats you lot'd produced for Jeb Bush and for Hillary Clinton, and in that location was the bright red, very familiar Donald Trump "Brand America Great Again" hat. I was wondering if at that place were whatever stories, particularly behind the Trump hat. I'm curious about getting that business and trying to deliver a large number of hats relatively quickly. Are there any stories that you can share about that?

Mitch Cahn: As for Hillary Clinton's campaign, nosotros have been doing piece of work for a company called Financial Innovations for decades. They've been managing the Democratic candidates for President for quite some time, ever since Pecker Clinton. We have a very strong human relationship with them. One of the reasons our company is regularly called to produce products for candidates is that nosotros can produce appurtenances quickly. Candidates don't buy for the long-term—a lot of the primary candidates right now don't know if they're going to be around in two or 3 weeks, so they're ordering every calendar week. Instead of ordering 25,000 hats at a fourth dimension, they're ordering ii,000 or iii,000 hats a week. They need people who tin can turn things quickly, and because of our LEAN principles we can exercise that. We don't have a lot of piece of work in process on the flooring, then we're able to rush orders for people who need them. Some other reason is that nosotros're a matrimony shop, and the union label assures political campaigns that we've already been vetted for whatsoever sort of social compliance problems. That'due south a smaller issue for the Republican side, though we accept washed a ton of Republican work. We did all of the work for the John McCain campaign, and we're doing nigh four candidates right now. They only ask that nosotros don't put a union characterization within the chapeau, for whatever reasons.

The 2d reason that we're chosen is that we accept a reputation. The candidates don't want to get bitten by going to unknown manufacturer and finding out the products were actually made overseas. Our reputation equally a military machine contractor says to them that we have been vetted by the military, and military machine goods demand to be made domestically—not just all the labor but even all of the components for those products need to be sourced domestically. So I call back that'south why they come to united states. Nosotros never work with the campaigns directly; we always go through advert agencies. The particular agency that we worked with on the Trump hat came to the states from the Made in United states of america Foundation. They were concerned afterward they'd seen these hats being made overseas and contacted that agency, who told them that they don't need to put "Make America Great Once again" on a hat that says Made in China.

Mark Graban: Right. It's interesting that of the three hats that were on display, the Trump hat was the but one that did not accept Fabricated in the USA embroidered on the brim. I think some people misunderstand LEAN every bit beingness most price, when the master matter is nigh improving flow, as you've described and so well hither—reducing setup times, improving productivity as a way of existence more responsive to customers. Those are really powerful things, and they tin can lead to being cost-competitive, equally it seems you lot've done at Unionwear.

Mitch Cahn: Yeah, it has, and in many means that you wouldn't conceptualize. LEAN has developed our dedication to measuring time and doing value stream maps for nearly every product that we industry. Our production procedure is information-driven. Over the final five years, much of our business has been re-shoring, where companies, unremarkably in the style or promotional manufacture, have been getting products made overseas but are starting to reconsider. In the by, our hats might have been 10 times as much as the hat made in China, just now they're only 25% or xxx% more. Companies are much more likely to switch now, so we're constantly getting products that have been manufactured overseas, and we're asked to quote on them for domestically made product. We look at the way these products are made overseas, perhaps in China, and information technology doesn't make any sense to us. Take a tote bag for example—they throw labor at it to save on materials. Information technology'south a expressionless giveaway when I see a tote purse that has a seam running forth the bottom. If you cut that tote handbag in two pieces, you're going to get a lot more bags out of the ringlet of fabric than if you lot cutting one large slice, only information technology adds a lot of labor and makes it a weaker bag. It makes no sense unless you're trying to save on materials.

So we take these products and we reengineer them in a style that is LEAN and uses the to the lowest degree corporeality of labor possible. Between our productivity increases and our ability to reduce the amount of labor that goes into the product, we're able to compete on many items, particularly in the fashion business organization.

Mark Graban: I really appreciate you being able to share your story both at the Northeast LEAN Conference and for taking time to talk with me here today, Mitch. Once again, my guest has been Mitch Cahn, President of the company, Unionwear. Mitch, I was wondering if you desire to talk virtually the company's website, or ways people tin larn more about your business, or if you lot take whatever final thoughts for the listeners.

Mitch Cahn: Sure, our website is unionwear.com. We have over 40,000 Made in Usa products that you can search for and order directly on the website. You lot tin can contact me through the website if you have any questions nearly LEAN. I love helping other manufacturers who are just getting started in the LEAN process. I just want to warn yous—information technology'south never a good fourth dimension to offset, but once y'all start, you will exist rewarded. You'll never finish, merely you will be continuously improving.

Mark Graban: Well said, and thank you, Mitch, for that final thought and for being a guest here today on the podcast, I really appreciate it.

Mitch Cahn: You're welcome. Thanks.

Introducer: Thanks for listening. This has been the LEAN Blog podcast for LEAN news and commentary updated daily is at www.leanblog.org. If you have whatsoever questions or comments about this podcast, electronic mail Mark, at leanpodcast@gmail.com.

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Source: https://unionwear.com/news-and-press/make-america-great-again-hat-brought-to-you-by-lean-manufacturing/

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