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California: News and Insight on Business in the Golden
State | LEARNING CURVE

Production Plan Sews Up Savings

Swimwear Maker Adopts New System to Trim Costs

September 30, 1998

Loy S. Tam and his wife, Po, emigrated from Hong Kong to Los Angeles with their two sons in 1976. They purchased a small garment factory from a friend in 1978 and for the last five years they have been making swimwear for Portland, Ore.-based Jantzen. As overseas competition increases and prices fall, Tam has felt the pinch. He recently implemented a modular production system with the help of the California Manufacturing Technology Center, a government-funded resource center for small and medium-sized manufacturers. Tam was interviewed by freelance writer Karen E. Klein.

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Every month we produce about 40,000 garments for Jantzen. A lot of the other garment factories have moved to Mexico but I want to keep my business in Los Angeles. I have a lot of employees here and they are relying on me to have a job for them.

Right now, business is really tough. Every manufacturer has a lot of competition, prices are going down for finished products and you have to know how to save money and manage a better factory. When fashion designers give me their business they are very satisfied with our quality and delivery time, but they say our price is higher than what they could get if they took their business to the Third World.

I knew I had to cut costs, otherwise I could not continue this business.

A friend introduced me to the California Manufacturing Technology Center. He said they have a good production system and I should try it. CMTC came out and looked at my factory, where we were using the traditional bundle production system. They said if we started using their modular production program we could save 25% on direct labor costs.

The modular system uses teamwork and is specially designed for small garment lots, which is what we work with. The traditional bundle system has each worker just doing one small part of the job on a whole bundle of garments and then the bundle is moved down to the next worker, who does her small part and so on.

Under this new system, we give about 100 garments to five girls who work at a U-shaped station. We have already figured out how many hours they will need to finish the lot. If they complete it faster than that time, the whole team earns more money. So it is a real team effort. We also save time and money because the garments don't have to be bundled and moved from one station to the next anymore.

But the best thing about the system is that it improves quality and on-time delivery for our customers. Each step in the team process requires that the previous step be done correctly, so if there are mistakes they get fixed on the spot. Each girl, instead of knowing only her own machine and her own job, knows what all the others in her team are doing and what kinds of machines the others are working on. Each worker does several sections of the job and if there is not enough work at that moment, she can jump to the next machine and start on a new part of the job.

Because of that, this process takes more training. Each member of the team must learn all 15 or more steps needed to complete the garment. Before, she only learned one step. CMTC came into the factory for two weeks in May while we slowed production and they set up the program and trained our employees on it. It worked out well because our busy season is October through April.

We had a challenge because our employees are multicultural and multilingual. They speak mostly Cantonese, Spanish and English. Eduardo Freiwald from CMTC instructed the Spanish speakers and my wife trained the Chinese speakers. Now they all work together really well.

We implemented the system and we believe we will experience a 25% increase in our productivity when our busy season starts up again this fall. It's going to be very helpful.

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Karen E. Klein will be featured at The Times' Small Business Strategies Conference Oct. 17-18 at the Los Angeles Convention Center. If your business can provide a lesson to other entrepreneurs, contact Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia 91016 or send e-mail to kklein6349@aol.com. Include your name, address and telephone number.

MORE SMALL-BUSINESS NEWS: D6-8

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