Make America Great Again Structured Hat
Make America Swell Again Lid Brought To You By Lean Manufacturing
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TRANSCRIPT: Marking Graban: Howdy, this is Mark Graban. Welcome to Episode 234 of the podcast on November 16, 2015. Today's guest is Mitch Cahn; he is president of Unionwear, a manufacturer of hats, bags and wearing apparel in Newark, New Jersey. I first learned about Mitch and his visitor at the Northeast LEAN Conference recently, and I blogged about that. You can find a link to information technology at leanblog.org/234. Now, what caught my center was the political hats they produce, including the famous red "Make America Dandy Once again" hat that Donald Trump wears, among hats produced for other candidates. Across the surface of those hats is a fascinating story about competing instead of making excuses. Equally Mitch explains here in the podcast, Unionwear has been very successful, even though it's producing in one of the highest-cost parts of the world. Unionwear has had to compete against imports from China and lower-wage southern states here in the U.s., and LEAN has been a major role of their strategy for improving productivity, reducing cost and being fast to market place. Now, whether you work in healthcare or manufacturing, y'all'll actually love the story, the principles and the ideas behind Mitch, his company and his employees.
And so, can you lot start off by introducing yourself and your company, Unionwear?
Mitch Cahn: Sure. My name is Mitch Cahn; I am the President of Unionwear. I started the business organization in 1992, and nosotros'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 numberless, and messenger bags. Everything is 100% made in U.s., and everything is made with union labor.
Marking Graban: What prompted y'all to kickoff the business?
Mitch Cahn: I started the business concern in 1992. I bought a broke baseball cap manufactory. Before that, I was working in investment cyberbanking, and I really didn't similar it. I wanted to be the client—I wanted to brand stuff. So I spent about a year trying to come up up with an thought to start a business, and then I came across this minor baseball hat factory that had been foreclosed on in Jersey City, New Jersey, and I came up with plenty money to buy the equipment at an auctions sale. I was going to exercise something different with that concern—I was going to start selling baseball game caps to the way industry, which was not a thing in 1992. You lot couldn't go into The Gap or Macy'south and purchase baseball caps back then, and I was really successful very quickly. The idea caught on, and we picked upwards customers like Ralph Lauren, Nordstrom's, and Izod, and we were helped by the growth of outlet stores at that fourth dimension. However, past 1994, our entire business model collapsed because all of those clients started manufacturing in China. It happened actually chop-chop; I didn't see it coming. It was only a couple of years after Tiananmen Square; Communist china became this giant in the market place economy, and one of the first items they went after was baseball hats, because it's nigh all labor.
So nosotros needed to come up with a new concern model rapidly, and around that time we came upwards with the idea of selling products specifically because they were made in the USA—going later the Fabricated in USA market place. Nosotros started with labor unions. We really named the visitor Unionwear because unions were at that time ane of our natural markets. We were the only union store that made baseball hats. They were natural market for us, and then, past the year 2000, nosotros expanded into political campaigns when the Net fabricated it possible for Al Gore's campaign to raise coin by giving a baseball hat abroad to every donor. We had that contract, and that'southward been a large part of our business ever since.
We slowly looked into other markets that we found were buying American. After our LEAN transformation in 2007, nosotros were competitive with not-union shops in the deep south. We could fifty-fifty compete with shops in Puerto Rico for military business—at present that's huge part of our concern likewise. In 2007, we bought a purse factory, and nosotros did a LEAN transformation of that factory. At present that's about half of our business. We've continued to expand our markets as the prices of imports continue to surge yr later year, while our domestic pricing really remains flat. Nosotros've been able to break into more than markets, particularly B2B markets that are looking at co-brands with the Made in USA label, which is really the most valuable brand in the globe.
When someone gives a baseball game hat or bag away, they don't desire that production to say "Fabricated in China". A lot of socially responsible companies give bags and hats away—Whole Foods, Google, and a lot of other companies—and they buy our products considering the matrimony label shows that the products were definitely not fabricated in a sweatshop, and the Fabricated in USA label shows that the products were not shipped halfway around the world. We've too been able to render to the fashion business over the terminal five years for the beginning time since the early on 90s; we've been more than competitive, and manner businesses have been going for smaller batch manufacturing.
Mark Graban: It sounds similar there's a sense of purpose here, whereas a lot of industries and companies go with the flow. When business started going to China, all the lemmings said, "Howdy, we accept to go to China!" Even before you discovered LEAN, why was it of import to you to stay in New Jersey?
Mitch Cahn: Well, I always reminded myself (and that's the first ten years I was in business) that if I wanted to brand coin, it would have been a lot easier for me to stay on Wall Street. I didn't want to make money; I wanted to brand products. I find the manufacturing process extremely rewarding—I come into work, and someone meets me with an idea and leaves a sample. Then I accept to figure out how to manufacture that sample, what machines to purchase and what people to staff. To figure all that out and and then go out in New York Urban center and run across people wearing and using the products is very rewarding. So, that was 1 part of it—I enjoy the maker feel. Second, from the beginning I wanted to brand sure that all of our employees were well compensated and had the same benefits equally white-collar workers. Our union was the Ladies Textile Workers Spousal relationship, and they said nosotros were the commencement company (and nosotros're still probably the simply visitor) that went to them before we started the business organization. Nosotros wanted to start a union shop because I knew we were going to give our employees the benefits that marriage workers would earn anyhow. We might also take advantage of the human relationship that the unions had and use that for marketing purposes.
Marking Graban: I'yard curious to hear more about LEAN. How did you outset get introduced to the thought of LEAN?
Mitch Cahn: Around 2004, we faced with a lot of increasing expenses that were not really affecting the residue of the country. New Bailiwick of jersey was raising its minimum wage significantly alee of the federal minimum wage. We were going to see our wages go upward past well-nigh xxx-40% pretty apace. We also had big increases in wellness intendance at that time, and well-nigh of our competition was non-union shops in the South, and in right-to-work states. In near not-union shops, until ObamaCare, there was no health insurance offered, and we started to see the toll rise over a four-yr period. We used to pay $50 a worker for health insurance, and by 2004, it was near $180. And then our real estate prices right outside the New York area started going upward pretty quickly. So we couldn't compete with the South, even for the Made in the The states work, and I was very concerned with our ability to remain a viable company. 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 Programme (MEP). I took it, and information technology really blew my mind. For anyone who isn't familiar with this program, it'southward a national program, a one-day form that trains everyone from executives to factory workers on the whole LEAN process.
It puts people in a faux manufacturing plant making clocks. At the first of the twenty-four hours, anybody is using their own traditional methods to set a production line and industry very simple clocks with the other executives—these are people who believe they know everything about manufacturing. At the beginning of the mean solar day, all these executives working together, with all their brainpower, might produce about 15 clocks an 60 minutes. Throughout the class of the day, LEAN principles are introduced one past i. So they do another simulated flow, where the manufacturers take the principle they just learned and apply it to this mini-production line, and their volume increases. From the showtime to the stop of the day, this grouping of executives will increase their product from fifteen clocks to 300-400 clocks an 60 minutes! It really opened up my mind to the possibilities in my mill. I withal call up when I came back, and all I could see was the opposite of LEAN. I was so angry! I was angry at everyone who worked for me for non seeing that they were doing not-value-added piece of work all day, completely forgetting that I had just gone ten years without seeing whatever of that myself.
Mark Graban: Yeah, it becomes hard when you suddenly see waste and bug that you would have looked by before.
Mitch Cahn: I just wanted to do everything at once, and of course you can't practice that, only I did go back to MEP. I hired them for a small project while they submitted a grant proposal to the New Jersey Department of Labor to practise a LEAN transformation for the states. I brought in the consultant from NJ MEP, and he met with our institute manager at the fourth dimension and me. The plant managing director was very quondam-school, a traditional manufacturing product 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 machine operators sew faster, and the consultant said, "I tin can't do that. I don't know anything about sewing, to be totally honest with y'all." The plant manager asked, "How are you perhaps going to improve our product here?" and the consultant said "Well, I'1000 simply going to focus on what they're doing when they're not sewing. I worked in food companies, pigment companies and car companies, and information technology'southward always 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 manufacturing plant differently and training people differently." The plant manager was not convinced, but I brought the consultant in anyhow, and nosotros started with a really simple projection. He went for the depression-hanging fruit, and he took a await at our embroidery operation. Nosotros run about 12 embroidery machines here in the middle of our production procedure where we embroider our own hats and bags.
He spent a day observing that procedure and asked me, "How long exercise you retrieve 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 twenty minutes. He'd fabricated a videotape, and he said, "Well, how about an average of about ii 1/2 hours?" I didn't believe him. I watched the videotape, though, and I saw that the machines were indeed down as he'd said. In the past, I'd walked around and saw everyone working hard and running around, and then I couldn't sympathise why the machines were down for so long, and this was something that was going on xv to 20 times a solar day—that was the boilerplate number of orders that nosotros are pushing through the embroidery section a day. It turned out to a very simple problem with a very uncomplicated solution.
Our embroidery manager was a Chinese National who spoke English, and our embroidery operators were mostly from Spanish-speaking countries; they spoke a trivial English. The managing director gave the instruction to go pick out threads of certain colors for an order. From the time she gave the didactics to the time they brought back the proper cones was about two and a half hours. Why? Based upon the instructions from the customer, she told the staff to look for, say, dark greyness and nighttime 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 like cement, and soup and canary and and so on. They had to open box afterwards box to find the correct color thread. If they were lucky, it was the thread the embroidery manager had envisioned in her mind. If they weren't lucky, they had to get back and render with some other armful of threads. Then they would take to count out the threads—threads were shipped to us in boxes of 12, and our machines had twenty heads on them. Then they'd count them out, they'd have to detect the showtime of each cone and they'd accept to bring them to the car, put them on the machine and thread them, and and then go back to become the next color. And so the consultant's get-go projection was to become rid of all the color names and get rid of the boxes. We put everything in giant zip-lock bags. Nosotros color-coded our manufacturing plant thread department like 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 up out to the tabular array; the embroidery machines would exist loaded. When it was over, cones would go back into the bags and be put back on the shelf. The whole procedure went from nigh two and one-half hours to 15 to 20 minutes pretty quickly, and nosotros were easily able to see the power of LEAN in that department. We were sold.
So nosotros went ahead, we got the grant, and we spent near 2 years putting in every facet of LEAN into the factory. We put in 5S, nosotros put in all sorts of Kanban, we did single cell flow, and every one of these steps was actually a phenomenal success for us. The 5S is something that we practice every year, and it'south something the owner really needs to be involved in. For example, no ane who works for me is going to throw a machine abroad. I'll say, "Hey, nosotros're never going to use that machine! No 1 is going to pay for it, I just looked on eBay; we're just going to sell it for scrap." No one else will say that. And so I need to actively show upwards, ready to get muddied for a couple of days.
Mark Graban: You mentioned the MEP programs, and for people who aren't familiar with that, it'due south a federally sponsored and funded programme, just the MEPs operate at the land level. Some of the MEPs are doing piece of work with healthcare organizations—the Ohio MEP, which works under the name TechSolve, is working with both manufacturers and healthcare providers. You talked nearly your healthcare costs going up. If y'all went into a hospital, I know you lot would see the parallels of why it takes so long betwixt cases in the operating room. Y'all talked about sewing—nosotros're not request the surgeons to piece of work faster, we're only trying to maximize the corporeality of time during the solar day they can actually be surgeons, and that makes a huge deviation in healthcare. Hopefully it'due south going to assist get costs nether control. There are large parallels there.
Mitch Cahn: Yeah, at that place are a lot of parallels betwixt healthcare and manufacturing, and coincidentally, while we were going through the starting time LEAN transformation my get-go son was born. The consultant, Dave Hollander, who shepherded united states of america through this whole procedure, e'er 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 yet apply a lot of those processes, like color-coded folders. There are so many LEAN improvements that we made, simply one of the first principles that they taught u.s. was to go rid of tables. Tables are evil! Unless yous are using the table for a particular job, information technology'due south going to exist filled with garbage, on top and underneath, because that'southward human nature. I noticed that in hospitals, if anybody needs a table, they become a rolling cart, so nosotros gave everybody their ain rolling cart. We designated places on the cart for everything that they demand, and nosotros gave them a small-scale personal space on the bottom for their own stuff. We still apply that, and apart from the productivity gain, the amount of space nosotros gained was smashing.
Marking Graban: At that place is a good general LEAN principle: put everything on wheels! Be flexible so you can rearrange cells, rearrange the layout, make changes as customer need changes to create different capacity—that's definitely a nifty lesson. At that place was a letter of the alphabet that you had posted at the Northeast LEAN Conference. Could you lot talk a petty bit more about the thought? I think a lot of manufacturers nevertheless don't get the idea that they can't create value by cutting labor costs. Yous have to redeploy labor in creating more than value. Tin can y'all talk about what that's meant for y'all and the visitor?
Mitch Cahn: Okay, we take a single-minded focus on creating value. One time the people who work hither understand what that ways, and so it becomes a mindset, and information technology becomes very piece of cake to implement any of the features of LEAN. Nosotros are here to create a finished product that needs to go correct into a box and get shipped to a customer, and that customer volition only pay for the value that we added to that product. So, if nosotros're making products, and we're putting them in boxes, it's inventory. We're not creating value at that time; we're just creating inventory. If we are creating work in process considering people are working faster, that'southward not finished product that nosotros can sell. We're not creating value. Now, if nosotros are able to improve our productivity so that we're creating a lot of value, and because of that I lay people off, I'1000 non really creating value by doing that, either. Creating value means if I take a 100 people, and they used to brand 1,000 hats a day, and now they tin make 2,000 hats a day, and so 50 people can make 2,000 a day, I'1000 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 power to measure the corporeality of value that we create. We have a process that nosotros use. Nosotros practice a lot of custom products—baseball game caps are a very cookie-cutter process, that's only about one-half of our business concern. The other half is numberless, and every bag that we make is different. I twenty-four hours we'll be making tote numberless, the next twenty-four hour period we'll exist making messenger bags. They've got totally unlike value street maps, and they've got totally different establish layouts.
So the starting time process for usa is to figure out by doing a traditional time report, what is the wheel time of this product? What is the amount of time that the worker is actually calculation value to the product, just picking two pieces of fabric and sewing them together? Or cutting that material—that's really all nosotros exercise that adds value. Everything else we do, such every bit looking for thread, waiting for instructions from a manager, redoing work or edifice upwardly work in process, that'due south not calculation value. And so if we take an attaché, and we know that attaché has 20 minutes of time that'south spent just calculation value to that production, nosotros tin then measure our output in terms of minutes of piece of work created against the amount of fourth dimension that our workers worked. And so we say, based on our fourth dimension studies, our workers created x,000 minutes of work today, but based on our time clock, they worked 20,000 minutes. That means they spent fifty% of their time creating value. We measure this all the fourth dimension. It enables us to get our pricing in bank check, enables us to know if we're meeting our margins just by walking on the flooring and seeing if there is work in process or if there are people moving effectually. It'southward created goals for everybody to know whether the shop is LEAN and creating value or not.
At present, when we started this process, before we did any LEAN stuff, we were calculation value but 20% to 25% of the time. The rest of information technology was all spent on non-value-added work. By the terminate of the process, we were calculation value about 65% of the time, so our productivity nearly tripled. Information technology was difficult for most of our line workers to grasp the concept of what nosotros were trying to sell to them, so we changed our measurement from pct of time working efficiently (or adding value) to hours per day, and then people finally started to get information technology. We said, hey, yous know, believe information technology or non, you're only spending almost two hours a twenty-four hour period sewing, just you're getting paid for viii. We're request you to spend well-nigh five and half to vi hours sewing and get paid for eight, and they got it. That really seemed like a great bargain to them. We were able to retrain everybody on LEAN principles; we made our own videos highlighting about 50 different non-value-added tasks that were regularly performed in the factories, so we could help people place them.
Marking Graban: At that place are many things that are interesting and impressive about your story, but I think i of them is your interest equally an possessor. LEAN is not but an operations strategy; it really is a key piece of your business strategy—information technology'southward how y'all're running the business and trying to exist successful in the long term.
Mitch Cahn: Yes, I think if I were to describe my chore, I'g in accuse of LEAN here. Everything else kind of takes care of itself, but LEAN is a battle against human nature, and it constantly needs improvement. If you lot're doing LEAN properly, you demand to continually amend, considering if you are able to clear upwards one clogging, in that location'southward going to be another bottleneck created somewhere else. You clear up that bottleneck in sales, and there's going to be a clogging in product. Yous articulate up that clogging, then you detect a bottleneck in lodge processing. So I leave the top line growth up to the salespeople, and I accept care of the growth and capacity past implementing LEAN principles throughout our entire organization.
Marker Graban: At the briefing you lot displayed hats y'all'd produced for Jeb Bush and for Hillary Clinton, and at that place was the brilliant ruby-red, very familiar Donald Trump "Make America Bully Once more" hat. I was wondering if there were whatever stories, peculiarly behind the Trump chapeau. I'm curious most getting that concern and trying to deliver a large number of hats relatively quickly. Are in that location any stories that you can share about that?
Mitch Cahn: As for Hillary Clinton'southward campaign, we accept 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, e'er since Beak Clinton. We have a very potent relationship with them. Ane of the reasons our company is regularly chosen to produce products for candidates is that we can produce goods 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 2 or 3 weeks, so they're ordering every week. Instead of ordering 25,000 hats at a time, they're ordering 2,000 or three,000 hats a calendar week. They need people who can plough things quickly, and because of our LEAN principles we tin can exercise that. We don't have a lot of work in process on the floor, and so we're able to rush orders for people who demand them. Some other reason is that nosotros're a union shop, and the spousal relationship label assures political campaigns that nosotros've already been vetted for any sort of social compliance issues. That'due south a smaller issue for the Republican side, though we have done a ton of Republican work. We did all of the work for the John McCain campaign, and nosotros're doing most four candidates right now. They just inquire that we don't put a wedlock label inside the hat, for whatever reasons.
The second reason that we're chosen is that we have 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 every bit a military machine contractor says to them that we have been vetted by the military, and military goods need to be made domestically—not just all the labor but even all of the components for those products need to be sourced domestically. And then I think that's why they come to us. We never work with the campaigns directly; nosotros ever go through ad agencies. The particular bureau that nosotros worked with on the Trump lid came to united states from the Made in USA Foundation. They were concerned after 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 lid that says Fabricated in China.
Marker Graban: Correct. Information technology'south interesting that of the 3 hats that were on display, the Trump lid was the simply one that did not have Fabricated in the USA embroidered on the skirt. I think some people misunderstand LEAN as being almost cost, when the principal affair is about improving period, every bit y'all've described and so well hither—reducing setup times, improving productivity as a style of existence more responsive to customers. Those are actually powerful things, and they can atomic number 82 to being cost-competitive, every bit information technology seems you lot've done at Unionwear.
Mitch Cahn: Yeah, information technology has, and in many ways that you wouldn't anticipate. LEAN has developed our dedication to measuring fourth dimension and doing value stream maps for about every product that we manufacture. Our production procedure is information-driven. Over the last v years, much of our business has been re-shoring, where companies, ordinarily in the style or promotional industry, take been getting products made overseas just are starting to reconsider. In the past, our hats might have been ten times every bit much every bit the hat made in China, but now they're only 25% or 30% more. Companies are much more than likely to switch now, and then we're constantly getting products that have been manufactured overseas, and nosotros're asked to quote on them for domestically made product. Nosotros look at the manner these products are fabricated overseas, perhaps in Mainland 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's a expressionless giveaway when I see a tote purse that has a seam running along the bottom. If you cutting that tote bag in 2 pieces, yous're going to get a lot more numberless out of the whorl of material than if you cut one big piece, just it adds a lot of labor and makes it a weaker bag. It makes no sense unless you're trying to salve on materials.
And then nosotros take these products and we reengineer them in a way that is LEAN and uses the least amount of labor possible. Between our productivity increases and our ability to reduce the corporeality of labor that goes into the product, we're able to compete on many items, specially in the fashion business.
Mark Graban: I really appreciate you being able to share your story both at the Northeast LEAN Conference and for taking fourth dimension to talk with me hither today, Mitch. Over again, my guest has been Mitch Cahn, President of the visitor, Unionwear. Mitch, I was wondering if you want to talk about the company's website, or means people can learn more about your business, or if you lot have any final thoughts for the listeners.
Mitch Cahn: Certain, our website is unionwear.com. Nosotros have over 40,000 Made in USA products that you can search for and order straight on the website. Y'all tin contact me through the website if y'all have whatever questions nigh LEAN. I dear helping other manufacturers who are only getting started in the LEAN process. I merely want to warn you—it's never a good time to beginning, but once you starting time, you will be rewarded. You'll never cease, but you will be continuously improving.
Mark Graban: Well said, and cheers, Mitch, for that terminal thought and for being a guest here today on the podcast, I really capeesh 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 world wide web.leanblog.org. If you take any questions or comments nearly this podcast, email Mark, at leanpodcast@gmail.com.
Source: https://unionwear.com/news-and-press/make-america-great-again-hat-brought-to-you-by-lean-manufacturing/
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