Working smarter: Unionwear gets lean to maximize efficiency

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Mitch Cahn, founder of Newark-based manufacturer Unionwear, believes in lean manufacturing because it saves money while still providing a superior product.

Cahn founded Unionwear, a manufacturer of hats, bags, backpacks, military garments and other apparel in 1992. Employing 175 people, Cahn touts New Jersey as an ideal place for manufacturing companies.

Lean manufacturing uses applied processes and tools that eliminate waste from production, resulting in improved efficiency, effectiveness and profitability. While the concept may sound easy, Cahn made a distinction between knowing the concept versus implementing it.

“We had been struggling to implement lean manufacturing constantly for the last 12 years and it’s a struggle because lean flies in the face of human nature,” said Cahn, also the company’s president and CEO. “The key principles to wrap your head around are reducing waste. Before we started lean manufacturing [employees] were spending 30 minutes working for every hat produced. They are now spending five minutes to produce a hat.”

Lean manufacturing is an example of working more intelligently to be more productive. One major aspect involves saving time by eliminating the search for materials that are not clearly visible. Cahn made those changes after realizing his employees were spending too much time looking for fabrics.

As a result, his workers are spending more time sewing them.

“How are we able to do this right outside of New York City when China is too expensive for the textile business? One of the answers is lean manufacturing,” he said.

Cahn is also focused on co-branding the “Made in USA” logo on his merchandise, a major selling point for American companies.

“Anyone who manufactures in the United States and promotes their product heavily does not want to be giving away promotional items that say ‘Made in China,’ but they do,” said Cahn, a 1989 graduate of the Wharton School of Business at the University of Pennsylvania.

“There was a long period of time when it was so much more expensive to make goods domestically than it was to make goods overseas that even domestic manufacturers were getting products made overseas,” he added. “Prices of imported goods started to go up from 2008 to now while domestic prices have stayed steady.”

As a consequence, the cost of attaching a “Made in USA” labels drops, Cahn said.

“We do not have to be as inexpensive as goods made in China,” Cahn said. “We just need to be in the ballpark and assume there is a premium people will pay to have the ‘Made in USA’ in their products.”

Unionwear competes with foreign manufacturers through supply chain management and computer automation of textile equipment. Cahn explained the supply chain manager’s job description states he or she cannot run out of inventory nor have it build up.

“We want stuff coming right off the truck and going into a product and then we want that product coming right off the production line and being shipped to a customer,” Cahn said. “That reduces our expenses of keeping inventory and storing inventory.

Cahn is chairman of the Newark Workforce Development Board, a director of the Newark Regional Business Partnership and director of the New Jersey Manufacturing Extension Program. He spends much of his personal time convincing companies that New Jersey affords a great environment for manufacturing through an experienced workforce, access to ports and New York City and its manufacturing infrastructure.

“Compared to New York City, Newark is a much less expensive and much more business-friendly place to operate,” Cahn said. “Newark has a tight concentration of labor and a great transportation access and infrastructure.”

Even so the challenges of manufacturing in New Jersey revolve around the high costs of labor, energy, health care, workers’ compensation and real estate.

“We have to work so much smarter to even compete with so many domestic manufacturers, let alone manufacturers in countries that have hardly any regulations and where workers make pennies per hour,” Cahn said. “Even though our business is focused on companies who want ‘Made in the USA’ products, we still have to work very hard to compete with factories in other states.”