Domestic Suppliers Gain Quality and Margin
June 23, 2008-- Home Textiles Today,
Last December, 1888 Mills added three looms to its U.S. towel factory in Griffin, Ga. A few months earlier, Creative Bath doubled the capacity of its plastic molding plant on Long Island. Earlier this year, American Textiles expanded its bed pillow plant in Pittsburgh.
Although each still taps the global market for production, they are among a host of American manufacturers still producing goods in the United States. And as the home textiles industry grapples with a host of pressures — higher shipping and transportation costs, raw material costs, and off-shore wages along with less favorable currency exchange rates — U.S. production seems to be gaining traction.
For 1888 — which has ownership stakes in mills in Pakistan, Sri Lanka and Bangladesh as well as partnerships in China and India — the U.S. operation caters to lower-volume orders but also helps fill the gap when a customer experiences spikes in sales. In addition, the U.S. operation is used for research and development that can then be moved out to 1888's network of "member mills."
"Most of our competitors only operate in a single country," said Doug Tingle, vice chairman. "This model was invented in other industries — and we looked at a lot of models."
Soft-Tex president Arthur Perry pointed out, "Our customers do not always need full containers of goods. Most require store breakdown of shipments — this is hard to control with direct imports. We can mix products on demand." Another upside to domestic production of basic bedding is quality control. "We can inspect and control the quality of our products on site. We do not have to depend on a third party to inspect finished goods offshore."
Embellished towel manufacturer Avanti buys its blanks in Canada from Cambridge Towel Mills, handling embroidery and appliqué work at its plant in New Jersey.
"The advantage is the ability to turn the goods quickly," said Jeff Kauffman, president and coo. "Everybody focuses on that first cost, but the real bottom line is what's your margin. With currency issues and what's going on with oil and freight issues, a lot of those cost advantages diminish."
Manual Woodworkers & Weavers operates jacquard looms to produce tapestry throws and wall hangings, fills imported pillows and comforter shells, and quilts comforters domestically as well."Fresh new constructions and designs paired with quick reaction times is the equation that domestic production owns," said Vicky Grant, creative director. "The fact that U.S. manufacturers adhere to strict environmental standards is an important factor and a growing concern among more and more Americans," she added.
There are other concerns that U.S. manufacturing addressees, according to Michael Guidry, vp of product development for American Textile, which operates three plants in the United States and one in Central America. He pointed to "the negative side of the supply chain" — challenges in speed to market, labor retention, freight costs and production blackouts during national holidays such as Chinese New Year.
While America Textile also sources offshore, Guidry said U.S. production "provides a hedge against natural disaster, a hedge against political unrest and a hedge against currency fluctuations. Unfortunately, all three of those particular evils happen to be affecting the market today."
The list of concerns is growing, said Fritz Kruger, svp of marketing at Pacific Coast Feather, which operates seven U.S. plants and one in Canada. Offshore mills are feeling the pressure "to get up to speed on their environmental costs," he said, noting that social costs such as health care and long-term security benefits too "are starting to creep into the labor pool's consciousness."
Most U.S.-based utility bedding makers maintain a good deal of domestic production — primarily filling and finishing imported shells. Reducing freight costs is the primary factor that has kept much of that production from moving offshore.
"A large percentage of our product is air, so it's very expensive to import a product that's bulky," said David Kennedy, president and ceo of Perfect Fit, with four U.S. plants.
Perfect Fit's goal is to keep its labor cost lower than the prevailing freight cost — a job Kennedy acknowledged has gotten easier as freight costs have soared. Business recently has "surged," he said, although he couldn't link it directly to freight costs. "Buyers usually don't tell you why they're giving you the business — or even why they're taking it away," he noted.
CDS Ensembles, which has the capacity to fill 60,000 comforters per week, has also seen business from existing customers grow recently and believes higher freight costs may be a factor. The key strength of the company's domestic set-up — originally designed to handle overflow business from U.S. bedding mills — is that it retains its "plug-and-play infrastructure," said David Krieger, ceo. "It's much efficient. Most of our cost is poly, and we create our own fiber fill."
Louisville Bedding product development manager Mandy Talbert thinks the higher freight and other off-shore costs will prove a selling point moving forward. "Actually, we're starting to see a shift back," she said. Higher shipping costs are "one of the things we're planning to hang our hat on" as the company looks to boost production at its four U.S. plants.
That said, it was difficult to find a supplier who expects a major expansion of domestic textiles production, let alone a return of the manufacturing that migrated offshore.
"Unfortunately, we have put ourselves in a situation in this country where we've made it difficult to find needle trades operators. When we stemmed immigration 22 years ago, the flow slowed down," said Jeff Hollander, ceo of Hollander Home Fashions, which operates seven plants in the United States, one in Canada and has an equity stake in a facility in China. "You have to be smart about what can be done well abroad vs. what can be done in the U.S. You can't have one size fits all."
In the rug industry, which still has a broad domestic manufacturing base, there's a challenge in finding the next generation of gifted technicians.
"One of the real technical skills here is the head weaver, and understanding the mechanics of these giant weaving machines takes years," said Paul Sullivan, svp of sales and marketing for Orian, which is a 100% made-in-the-USA company.
Orian responded to that dilemma a year ago by instituting a program to recruit and train young people as head weavers. There are now seven people in the program, Sullivan said. "We always have a 'help wanted' sign out for people like that."
But the era of lifelong mill hand is passing. "The lint-heads are gone," said Michael Harris, chairman, president and ceo of Faribault Woolen Mills. "The average tenure in our mill was over 20 years. Now with turnover we're down in mid-teens. It's an issue; we have to constantly work on cross-training."
Despite that, however, Faribault has found a strong export market for its goods and has been aggressively pursuing it.
The same holds true for Creative Bath, which produces plastic bath accessories, storage, tabletop, flatware, serveware and household items such as trash cans in the United States. At the annual Housewares Show this past spring, Creative festooned its booth with American flags.
"You wouldn't believe the amount of international accounts that came in," said Bob Weiss, director of sales and marketing. The company's international business is growing and now includes Western Europe, Eastern Europe, the Middle East, Mexico and Australia.
Hudson Industries has worked the export market for several years selling foam utility products targeting sleep issues and medical needs. "If I had a dollar for every time someone walked into our booth and said 'Virginia?' It's like 'what part of Vietnam is that in?'" said Lonnie Scheps, vp sales and marketing. As an American manufacturer, he said, "We just try to stay away from the mainstream. We innovate. We try to patent whenever we can. And as soon as we see our stuff start to get knocked off, we're out of it."
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