Make Our Union Great Again Hat
Make America Great Again Hat Brought To You lot By Lean Manufacturing
This podcast can be heard on Lean Blog
TRANSCRIPT: Mark Graban: Hello, this is Mark Graban. Welcome to Episode 234 of the podcast on November 16, 2015. Today'south guest is Mitch Cahn; he is president of Unionwear, a manufacturer of hats, bags and apparel in Newark, New Bailiwick of jersey. I first learned nearly Mitch and his company at the Northeast LEAN Conference recently, and I blogged about that. You can discover a link to it at leanblog.org/234. Now, what caught my eye was the political hats they produce, including the famous ruby "Make America Great Once more" hat that Donald Trump wears, among hats produced for other candidates. Beyond the surface of those hats is a fascinating story nigh competing instead of making excuses. Every bit Mitch explains here in the podcast, Unionwear has been very successful, fifty-fifty though it'southward 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.a., and LEAN has been a major office of their strategy for improving productivity, reducing cost and being fast to marketplace. Now, whether y'all piece of work in healthcare or manufacturing, you'll really beloved the story, the principles and the ideas backside Mitch, his company and his employees.
So, can you outset 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 organisation in 1992, and we're based in Newark, New Jersey. Nosotros manufacture baseball game caps and all sorts of headwear, and sewn numberless, similar backpacks, laptop bags, tote bags, garment bags, and messenger bags. Everything is 100% made in U.s.a., and everything is made with union labor.
Marker Graban: What prompted yous to kickoff the business?
Mitch Cahn: I started the business in 1992. I bought a bankrupt baseball game cap factory. Before that, I was working in investment banking, and I actually didn't like it. I wanted to be the customer—I wanted to make stuff. So I spent almost a year trying to come up with an thought to offset a business, and so I came across this small baseball hat mill that had been foreclosed on in Jersey City, New Jersey, and I came upward with enough coin to buy the equipment at an auctions sale. I was going to practice something different with that business—I was going to start selling baseball game caps to the fashion industry, which was not a matter in 1992. You couldn't go into The Gap or Macy's and purchase baseball caps dorsum then, and I was actually successful very quickly. The idea caught on, and we picked upwardly customers like Ralph Lauren, Nordstrom's, and Izod, and we were helped by the growth of outlet stores at that time. However, by 1994, our entire business model collapsed because all of those clients started manufacturing in China. Information technology happened really quickly; I didn't run into it coming. Information technology was just a couple of years after Tiananmen Square; China became this giant in the market economy, and one of the first items they went after was baseball game hats, considering it's almost all labor.
And then we needed to come up up with a new business model quickly, and around that time we came up with the thought of selling products specifically because they were made in the Us—going after the Fabricated in Usa market. We started with labor unions. We actually named the company Unionwear considering unions were at that time one of our natural markets. We were the only union shop that made baseball hats. They were natural market for us, and then, by the year 2000, we expanded into political campaigns when the Cyberspace made it possible for Al Gore's campaign to raise money by giving a baseball game chapeau away to every donor. Nosotros had that contract, and that's been a big role of our business organization ever since.
We slowly looked into other markets that we found were buying American. Afterward 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 war machine business concern—now that's huge part of our business as well. In 2007, we bought a bag mill, and we did a LEAN transformation of that factory. At present that'south almost half of our business. Nosotros've continued to expand our markets as the prices of imports continue to surge year after twelvemonth, while our domestic pricing really remains flat. We've been able to pause into more markets, particularly B2B markets that are looking at co-brands with the Fabricated in Us label, which is really the most valuable brand in the world.
When someone gives a baseball lid or bag away, they don't desire that product to say "Made 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 union label shows that the products were definitely not made in a sweatshop, and the Fabricated in USA label shows that the products were not shipped halfway effectually the globe. Nosotros've besides been able to return to the fashion business over the last five years for the first time since the early on 90s; nosotros've been more than competitive, and fashion businesses have been going for smaller batch manufacturing.
Mark Graban: It sounds similar there'south a sense of purpose here, whereas a lot of industries and companies go with the menstruum. When business organization started going to China, all the lemmings said, "Hullo, we have to become to China!" Even before you discovered LEAN, why was it of import to yous to stay in New Jersey?
Mitch Cahn: Well, I always reminded myself (and that'due south the first ten years I was in concern) that if I wanted to brand 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 brand products. I find the manufacturing process extremely rewarding—I come into work, and someone meets me with an thought and leaves a sample. Then I take to figure out how to manufacture that sample, what machines to buy and what people to staff. To effigy all that out and so get out in New York City and come across people wearing and using the products is very rewarding. So, that was 1 part of it—I enjoy the maker experience. Second, from the kickoff I wanted to make sure that all of our employees were well compensated and had the same benefits as white-collar workers. Our spousal relationship was the Ladies Material Workers Matrimony, and they said we were the first visitor (and we're still probably the merely visitor) that went to them before we started the business organization. We wanted to showtime a union shop because I knew we were going to give our employees the benefits that union workers would earn anyhow. We might every bit well take advantage of the relationship that the unions had and use that for marketing purposes.
Mark Graban: I'm curious to hear more than about LEAN. How did yous starting time become introduced to the idea of LEAN?
Mitch Cahn: Around 2004, we faced with a lot of increasing expenses that were not really affecting the residual of the country. New Jersey was raising its minimum wage significantly ahead of the federal minimum wage. Nosotros were going to see our wages go up by most 30-40% pretty quickly. We likewise had big increases in health care at that time, and almost of our contest was non-union shops in the South, and in correct-to-work states. In most non-union shops, until ObamaCare, at that place was no health insurance offered, and we started to see the toll rise over a four-year period. We used to pay $fifty a worker for wellness insurance, and by 2004, it was virtually $180. Then our existent estate prices correct outside the New York area started going up pretty quickly. So we couldn't compete with the Due south, even for the Fabricated 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 Program (MEP). I took it, and it really blew my listen. For anyone who isn't familiar with this programme, it's a national program, a one-day form that trains everyone from executives to manufacturing plant workers on the whole LEAN process.
Information technology puts people in a simulated factory making clocks. At the beginning of the solar day, everyone is using their own traditional methods to ready upward a product line and manufacture very elementary clocks with the other executives—these are people who believe they know everything about manufacturing. At the beginning of the day, all these executives working together, with all their brainpower, might produce about 15 clocks an hour. Throughout the course of the mean solar day, LEAN principles are introduced one past one. So they do another false flow, where the manufacturers take the principle they only learned and utilise it to this mini-production line, and their volume increases. From the starting time to the stop of the 24-hour interval, this group of executives will increase their production from 15 clocks to 300-400 clocks an hour! It really opened upward my mind to the possibilities in my manufacturing plant. I still remember when I came back, and all I could see was the contrary of LEAN. I was so angry! I was angry at anybody who worked for me for not seeing that they were doing non-value-added work all 24-hour interval, completely forgetting that I had just gone ten years without seeing any of that myself.
Marking Graban: Yeah, it becomes difficult when you suddenly run across waste and problems that you would have looked past earlier.
Mitch Cahn: I simply wanted to exercise everything at in one case, and of form you can't do that, just I did get back to MEP. I hired them for a small projection while they submitted a grant proposal to the New Jersey Department of Labor to practice a LEAN transformation for the states. I brought in the consultant from NJ MEP, and he met with our plant managing director at the time and me. The plant manager was very old-schoolhouse, a traditional manufacturing production line person with nigh 30 years' experience, and he was very skeptical of the consultant. All he wanted to know was how he was going to brand our machine operators sew faster, and the consultant said, "I can't do that. I don't know annihilation about sewing, to be totally honest with you lot." The plant manager asked, "How are you mayhap going to improve our production hither?" and the consultant said "Well, I'g only going to focus on what they're doing when they're not sewing. I worked in food companies, pigment companies and automobile 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 manufacturing plant differently and training people differently." The found director was not convinced, just I brought the consultant in anyway, and we started with a really simple project. He went for the low-hanging fruit, and he took a look at our embroidery performance. Nosotros run about 12 embroidery machines hither in the middle of our production procedure where we embroider our own hats and numberless.
He spent a day observing that process and asked me, "How long practice you think your machines are downward betwixt orders?" I remembered this from the spreadsheet that I looked at when I bought the machines, and I said about xx minutes. He'd made a videotape, and he said, "Well, how about an average of almost 2 1/2 hours?" I didn't believe him. I watched the videotape, though, and I saw that the machines were indeed downward as he'd said. In the past, I'd walked around and saw everyone working difficult and running effectually, so I couldn't understand why the machines were downwards for so long, and this was something that was going on 15 to 20 times a day—that was the average number of orders that nosotros are pushing through the embroidery department a solar day. It turned out to a very simple problem with a very simple 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 manager gave the educational activity to get pick out threads of certain colors for an club. From the time she gave the instruction to the fourth dimension they brought back the proper cones was nearly two and a half hours. Why? Based upon the instructions from the customer, she told the staff to look for, say, dark gray and night green. The employees would go out to the shelves of closed white boxes with the thread colour names on them, and the names were things like cement, and soup and canary and and so on. They had to open box after box to find the right colour thread. If they were lucky, information technology was the thread the embroidery managing director had envisioned in her mind. If they weren't lucky, they had to get back and return with another armful of threads. So they would accept to count out the threads—threads were shipped to u.s.a. in boxes of 12, and our machines had 20 heads on them. Then they'd count them out, they'd have to find the first of each cone and they'd accept to bring them to the machine, put them on the automobile and thread them, and then go back to get the next color. So the consultant'south beginning project was to get 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 section similar a rainbow, and we referred to everything by color number. Nosotros took all the threads and inventoried them in units of 20 to correspond to the machines' 20 heads. Numberless would come out to the table; the embroidery machines would exist loaded. When it was over, cones would go back into the numberless and be put back on the shelf. The whole process went from about two and half hours to fifteen to 20 minutes pretty quickly, and nosotros were easily able to see the power of LEAN in that department. Nosotros were sold.
So we went ahead, we got the grant, and we spent well-nigh two years putting in every facet of LEAN into the factory. We put in 5S, we put in all sorts of Kanban, we did single cell flow, and every one of these steps was really a phenomenal success for us. The 5S is something that nosotros practise every yr, and information technology'due south something the possessor really needs to be involved in. For example, no one who works for me is going to throw a motorcar away. I'll say, "Hey, we're never going to employ that machine! No ane is going to pay for information technology, I merely looked on eBay; we're merely going to sell it for scrap." No one else will say that. So I need to actively show upwards, ready to get dirty for a couple of days.
Mark Graban: You mentioned the MEP programs, and for people who aren't familiar with that, information technology's a federally sponsored and funded program, only 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. Y'all talked almost your healthcare costs going up. If yous went into a hospital, I know you would see the parallels of why it takes so long between cases in the operating room. You talked nigh sewing—nosotros're not asking the surgeons to work faster, we're just trying to maximize the corporeality of time during the day they tin can actually be surgeons, and that makes a huge difference in healthcare. Hopefully it'due south going to help become costs under command. There are big parallels in that location.
Mitch Cahn: Yeah, there are a lot of parallels between healthcare and manufacturing, and coincidentally, while we were going through the first LEAN transformation my first son was born. The consultant, Dave Hollander, who shepherded us through this whole procedure, always 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 however use a lot of those processes, like colour-coded folders. There are then many LEAN improvements that we made, but 1 of the first principles that they taught united states of america was to get rid of tables. Tables are evil! Unless you are using the table for a particular job, it'due south going to exist filled with garbage, on top and underneath, because that's human nature. I noticed that in hospitals, if everyone needs a table, they get a rolling cart, so nosotros gave everybody their ain rolling cart. We designated places on the cart for everything that they need, and we gave them a minor personal space on the bottom for their ain stuff. We nonetheless use that, and apart from the productivity gain, the amount of space we gained was great.
Marking Graban: In that location is a good general LEAN principle: put everything on wheels! Be flexible then you tin can rearrange cells, rearrange the layout, brand changes every bit customer demand changes to create dissimilar chapters—that's definitely a great lesson. At that place was a letter that you lot had posted at the Northeast LEAN Conference. Could you talk a picayune fleck more near the idea? I think a lot of manufacturers notwithstanding don't get the idea that they tin't create value past cutting labor costs. You have to redeploy labor in creating more than value. Can yous talk about what that'southward meant for yous and the company?
Mitch Cahn: Okay, we have a single-minded focus on creating value. Once the people who work here understand what that means, then information technology becomes a mindset, and information technology becomes very easy to implement any 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 customer, and that customer will only pay for the value that we added to that product. So, if we're making products, and we're putting them in boxes, information technology's inventory. We're non creating value at that fourth dimension; we're merely creating inventory. If we are creating piece of work in process because people are working faster, that's not finished production that nosotros can sell. Nosotros're non creating value. Now, if we are able to ameliorate our productivity so that we're creating a lot of value, and considering of that I lay people off, I'm not actually creating value by doing that, either. Creating value means if I have a 100 people, and they used to brand 1,000 hats a day, and now they tin make 2,000 hats a twenty-four hour period, and then 50 people can make 2,000 a day, I'm creating value by taking those other l people and creating some other product with them. That to me is creating value. 1 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. We exercise a lot of custom products—baseball caps are a very cookie-cutter procedure, that's just about one-half of our business. The other half is bags, and every bag that we brand is different. Ane mean solar day we'll be making tote bags, the next solar day we'll exist making messenger numberless. They've got totally different value street maps, and they've got totally different establish layouts.
So the commencement process for us is to effigy out by doing a traditional time study, what is the bicycle time of this product? What is the corporeality of time that the worker is actually adding value to the product, just picking two pieces of fabric and sewing them together? Or cut that fabric—that's really all we do that adds value. Everything else nosotros exercise, such as looking for thread, waiting for instructions from a manager, redoing piece of work or edifice up work in procedure, that's not adding value. So if we accept an attaché, and we know that attaché has xx minutes of time that's spent just adding value to that product, nosotros can then mensurate our output in terms of minutes of work created against the amount of time that our workers worked. So nosotros say, based on our fourth dimension studies, our workers created 10,000 minutes of work today, but based on our time clock, they worked 20,000 minutes. That ways they spent 50% of their time creating value. Nosotros measure this all the time. It enables united states to get our pricing in check, enables usa to know if we're meeting our margins just by walking on the floor and seeing if there is work in process or if at that place are people moving around. Information technology's created goals for everybody to know whether the store is LEAN and creating value or not.
Now, when we started this process, before we did any LEAN stuff, nosotros were adding value but twenty% to 25% of the fourth dimension. The residuum of it was all spent on non-value-added work. Past the end of the process, we were calculation value about 65% of the time, so our productivity almost tripled. It was difficult for almost of our line workers to grasp the concept of what nosotros were trying to sell to them, and then we changed our measurement from pct of time working efficiently (or calculation value) to hours per mean solar day, and so people finally started to get it. We said, hey, you know, believe it or non, you're only spending about two hours a day sewing, but you're getting paid for eight. Nosotros're asking you lot to spend virtually five and one-half to vi hours sewing and become paid for 8, and they got it. That actually seemed like a dandy bargain to them. We were able to retrain everybody on LEAN principles; we fabricated our own videos highlighting about l different non-value-added tasks that were regularly performed in the factories, then we could assist people identify them.
Mark Graban: There are many things that are interesting and impressive nearly your story, but I think i of them is your involvement as an owner. LEAN is non just an operations strategy; it actually is a key slice of your business organization strategy—it's how you're running the business and trying to exist successful in the long term.
Mitch Cahn: Yes, I think if I were to describe my job, I'm in charge of LEAN here. Everything else kind of takes care of itself, but LEAN is a boxing against human nature, and it constantly needs improvement. If y'all're doing LEAN properly, you demand to continually improve, considering if you are able to clear up ane bottleneck, at that place's going to be another bottleneck created somewhere else. You clear upwardly that bottleneck in sales, and in that location'due south going to be a bottleneck in production. You clear up that bottleneck, then yous find a bottleneck in club processing. So I leave the top line growth upward to the salespeople, and I take intendance of the growth and capacity past implementing LEAN principles throughout our entire organization.
Marker Graban: At the briefing you displayed hats you lot'd produced for Jeb Bush and for Hillary Clinton, and there was the bright blood-red, very familiar Donald Trump "Make America Great Again" lid. I was wondering if in that location were whatsoever stories, particularly behind the Trump chapeau. I'yard curious about getting that business and trying to deliver a big number of hats relatively rapidly. Are at that place whatever stories that you tin can share almost that?
Mitch Cahn: Every bit for Hillary Clinton'south entrada, we have been doing work for a company called Financial Innovations for decades. They've been managing the Democratic candidates for President for quite some time, ever since Bill Clinton. Nosotros have a very stiff relationship with them. One of the reasons our company is regularly chosen to produce products for candidates is that nosotros tin can produce appurtenances quickly. Candidates don't buy for the long-term—a lot of the chief candidates right now don't know if they're going to be around in two or three weeks, so they're ordering every calendar week. Instead of ordering 25,000 hats at a time, they're ordering 2,000 or iii,000 hats a week. They demand people who can plough things quickly, and considering of our LEAN principles nosotros can practise that. We don't have a lot of work in process on the floor, so nosotros're able to blitz orders for people who need them. Another reason is that we're a union shop, and the union label assures political campaigns that nosotros've already been vetted for any sort of social compliance bug. That'due south a smaller effect for the Republican side, though we accept done a ton of Republican work. We did all of the work for the John McCain campaign, and we're doing about four candidates right at present. They merely inquire that we don't put a spousal relationship label within the hat, for whatsoever reasons.
The second reason that we're chosen is that we have a reputation. The candidates don't want to go bitten by going to unknown manufacturer and finding out the products were actually fabricated overseas. Our reputation as a military contractor says to them that we have been vetted by the military, and armed forces goods demand to exist made domestically—not just all the labor just fifty-fifty all of the components for those products demand to be sourced domestically. So I retrieve that'southward why they come up to us. We never work with the campaigns directly; we ever get through advertising agencies. The item bureau that we worked with on the Trump hat came to us from the Made in USA Foundation. They were concerned after they'd seen these hats beingness made overseas and contacted that bureau, who told them that they don't need to put "Make America Great Again" on a hat that says Fabricated in Communist china.
Marking Graban: Correct. It's interesting that of the three hats that were on display, the Trump hat was the but ane that did not have Made in the USA embroidered on the skirt. I call back some people misunderstand LEAN as being almost cost, when the primary thing is about improving flow, as you've described and then well here—reducing setup times, improving productivity every bit a fashion of existence more responsive to customers. Those are really powerful things, and they can lead to being price-competitive, every bit it seems you've done at Unionwear.
Mitch Cahn: Yes, information technology has, and in many ways that yous wouldn't anticipate. LEAN has developed our dedication to measuring time and doing value stream maps for near every product that we manufacture. Our production procedure is data-driven. Over the last five years, much of our business organization has been re-shoring, where companies, usually in the fashion or promotional manufacture, have been getting products made overseas but are starting to reconsider. In the past, our hats might have been ten times as much every bit the hat made in China, simply now they're only 25% or 30% more. Companies are much more than probable to switch now, so we're constantly getting products that have been manufactured overseas, and nosotros're asked to quote on them for domestically made product. We await at the way these products are fabricated overseas, perhaps in Mainland china, and it doesn't brand any sense to us. Have a tote pocketbook for example—they throw labor at it to save on materials. It'south a expressionless giveaway when I come across a tote bag that has a seam running along the bottom. If you lot cut that tote bag in two pieces, you're going to go a lot more bags out of the whorl of fabric than if you cut one large piece, but information technology adds a lot of labor and makes it a weaker bag. It makes no sense unless you're trying to salvage on materials.
So we take these products and nosotros reengineer them in a way that is LEAN and uses the least amount of labor possible. Betwixt our productivity increases and our power to reduce the amount of labor that goes into the product, we're able to compete on many items, particularly 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 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 lot want to talk about the company'southward website, or ways people can learn more nigh your business, or if you lot have whatever concluding thoughts for the listeners.
Mitch Cahn: Sure, our website is unionwear.com. Nosotros take over 40,000 Made in USA products that you tin can search for and order direct on the website. You lot can contact me through the website if you take any questions virtually LEAN. I beloved helping other manufacturers who are but getting started in the LEAN procedure. I just want to warn yous—it's never a good fourth dimension to get-go, but once y'all starting time, y'all will be rewarded. You'll never finish, but y'all will exist continuously improving.
Mark Graban: Well said, and thank yous, 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 Web log podcast for LEAN news and commentary updated daily is at world wide web.leanblog.org. If y'all have whatsoever questions or comments almost 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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