Fast Company named American Giant one of its most innovative companies of 2015 (American Giant Guns For Gap By Doubling Down On The USA, March 2015). American Giant is purveyor of T-shirts, sweatshirts, and (most famously) hoodies. We have posted about them several times before. Part of American Giant’s pitch is that they make everything in, well, America. They cut and sew all of their items in facilities in California and North Carolina. This TechCrunch video offers a tour of their Brisbane, CA, facility.
Now one of the challenges of producing sweatshirts in the US instead of overseas is the increased labor cost. Check out this graphic from the New York Times (U.S. Textile Plants Return, With Floors Largely Empty of People, Sep 19, 2013)
Assembling garments in the US roughly triples the labor costs. These are partially offset by lower duties and logistic costs, but they remain the primary reason why a US-made costs about 20% more than an Asian one.
But what can be done to make an American sewer more productive to reduce the labor cost gap?
That gets to the interesting part of the Fast Company article. It describes what Eagle Sportswear, one of American Giants supply chain partners, is doing to increase output at one of its North Carolina facilities.
Traditional garment manufacturing works like this: A worker sits at a sewing machine all day long, making the same seam over and over. When she fills up a bin, someone comes along and moves the batch to the next seamstress, who adds on her piece, a process that continues until the garments are complete. Because some operations take more time than others—and people work at different paces—garments naturally tend to pile up. Seamstresses spend roughly 80% of their time performing tasks other than stitching.
In the Team Sew approach, adapted from Toyota’s manufacturing process, the seamstresses work on their feet, performing multiple operations and collaborating on the fly. “This is like an elegant dance,” Winthrop says. Actually, a more apt Tarheel metaphor came to my mind: If the old system looked like basketball’s four-corners offense, plodding and methodical, Team Sew resembles Phil Jackson’s fluid triangle system. The seamstresses, wearing beige American Giant branded aprons, move along a horseshoe-shaped bank of workstations, seemingly in constant motion. When one falls behind on an operation, a teammate comes over to help her catch up. Above the team, a scoreboard displays how many items they complete and how that compares to efficiency targets.
Team Sew is still in the implementation phase; most of the workers in the factory when Winthrop and I visit are still using the old approach. But Morrell says that the results have been encouraging: Each worker produced roughly 60% more than before, and some of the factory’s savings have gone back into performance bonuses.
So in terms of lean operations, this is replacing a batch operations (in which inventory move in fits and starts) with a cell (in which inventory moves in a nice smooth flow). If workers are cross-trained, they can keep work moving forward and minimize wasting time from hunting around for the next item to work on. A significant boost in productivity is the result.
A couple of things are worth noting here. First, applying lean operations to apparel manufacturing isn’t terribly new. I once had the COO of O’Neill in an executive MBA class 15 or so years ago and he claimed that even then there were consulting firms pitching these schemes for apparel production.
Second, the same guy also claimed that in a human-based system such as apparel assembly there was no substitute for output based compensation of some sort. That gets to the last paragraph in the quote above. In may ways, this Team Sew format means working a lot harder. Workers are on their feet all day and are (likely) under greater scrutiny. In the old system, they got to sit down and if they throttled back for a half hour, no one could likely tell. Now they are on their feet and are supposed to be constantly moving. That means there is really no way to high and they have to maintain a high level of output all day. That’s great for the firm but a raw deal for the workers if they don’t get some reward for their higher output.