Made in the USA: A Case Study, Part 2 of 2

Revisiting the cap manufacturing and embroidery operations of Texas-based American Made Cap Co.

By Deborah Jones, Contributing Writer

Through affiliation with the Go Texan program, sponsored by the Texas Department of Agriculture, the company’s name is associated not only with American-made products, but also Texas-made products.

October 3, 2013

Editor’s Note: In the final installment of this two-part series, contributing writer Deborah Jones shares her findings as she revisits an embroidery company that has retooled aspects of its embroidery operation to make it more functional and efficient.

In the March 2013 issue of Impressions (“Made in the USA: A Case Study, Part 1 of 2”), I wrote about a pair of friends, Greg Bednarik and Rickey Eavenson, who decided to support their local west Texas economy by purchasing American Made Cap Co., a struggling cap manufacturer that had undergone several changes in ownership during the past three decades, with several employees persevering through the company’s turbulent times.

With the new owners came new hope for the company, which I had done business with during the “gimmee-cap” boom of the 1970s. During my initial visit earlier this year, I identified several areas for improvement, but the biggest challenge remained finding enough
customers willing to pay a little more for a high-quality, American-made cap. Identifying a complementary product the company could manufacture or embellish to generate additional revenue was a secondary challenge.

Bednarik disclosed that some key personnel changes literally have altered the complexion of their business. At the time of my previous visit to American Made Cap Co., new Production Manager David Stutts had just begun working with the company. Stutts was experienced with production in a different industry, and was familiarizing himself with the process of manufacturing and embellishing headwear.

I could tell from his questions that Stutts is a very quick study and, as of press time, has gained a firm grasp of all phases of production. One of the discoveries he made is that during a previous owner’s tenure, the embroidery machine thread trimmers had been turned off to improve stitch output. This benefitted machine operators, who were on an incentive program. Unfamiliar with the embroidery process and machine capabilities, this issue was only uncovered after the company paid hundreds of hours of overtime to employees performing trimming duties.

Additionally, a couple of other new employees are really making an impact. One has graphic arts skills and screen printing experience, and is being trained to provide back up to digitizer Wanda Eavenson. Another new employee is making contributions in the area of information technology and also is being cross-trained for other duties. Both new team members also follow up on new business leads.

Progress at the top of the personnel chain also helped to make changes that improved the staffing in other ways. One of the lessons learned by the ownership is that certain employees are not necessarily indispensable. It’s a common fear among business owners and management that everything will stop if one or more key employees leave the company. In my experience, however, this is rarely the case. American Made Cap Co. found that despite losing a couple of team members — including a supervisor — that production was sustained without skipping a beat.

By simply observing and making adjustments to business practices, Eavenson and Bednarik have reduced their daily operation costs by $500-$600 per day. This has significantly improved cash flow and can be attributed to several key changes.

A big change is streamlined paperwork, which was achieved by taking a close look at paper flow within the company and making changes that helped improve efficiency. Management also placed emphasis on credit card payments for customers, which reduced the administration costs associated with invoicing and collection.

In the new business arena, four interesting and substantial cap manufacturing opportunities have been introduced to American Made Cap Co. from companies in Colorado, New York, California and Texas. At press time, some new accounts were still in the process of being fleshed out, but the new business is providing the cash flow needed to create a healthy business profile. One of the new accounts sends its own patterns and materials to American Made Cap Co., which provides cut-and-sew plus embroidery services. Keeping the embroidery machines humming contributes to paying the overall overhead costs for the plant.

Another contribution to the company’s success is its association with the Go Texan program, from which it has reaped major benefits. Through affiliation with this program, sponsored by the Texas Department of Agriculture, a company’s name is associated not only with American-made products, but also Texas-made products. It was a red-letter day in July when Texas Department of Agriculture Commissioner Todd Staples visited the company. He recognized American Made Cap Co. for its use of fabric made from American
Cotton Growers (based in nearby Littlefield, Texas) in the company’s caps, aprons and tote bags.

The biggest and most promising development the company has experienced during the past few months is the addition of a complementary product line. The product — lightweight, flame-resistant apparel — is used extensively by companies with personnel in oil and gas fields. These companies also use lots of headwear, making sales calls twice as productive.

“It’s a bonus that the United State government requires workers in certain industries, including seismic workers, to wear flame-resistant apparel,” Bednarik says.

As part of the apparel program, the company includes up to 10,000 stitches of embroidery in its pricing. The firm even makes headwear from the special fabric. Stutts found that the staff can embroider it using normal production methods, providing more orders to keep the embroidery machines running consistently. The company even started a new website, americanfrc.com, that features the product.

Reinvigorated by the tremendous progress the company has made in recent months, Bednarik and Eavenson look forward to implementing plans for further growth. First, they want to improve its online presence and perhaps initiate a line of themed caps. American Made Cap Co. still participates in a grant program that can help provide funds to increase its
Internet presence and marketing in general. They also would like to create a program with a major account to produce caps for inventory during slow times.

Bednarik wants to fill the plant’s production capacity and begin a new, improved incentive program for employees. “I’d rather pass more money to the employees if I can jam this place with volume,” he says.

Deborah Jones is a commercial and home embroiderer with more than 30 years of experience in the computerized embroidery field. She runs myembroiderymentor.com and regularly speaks at the Imprinted Sportswear Shows (ISS). For more information or to comment on this article, email her at djones@myembroiderymentor.com. Hear Deborah speak on embroidery topics at the 2013 Imprinted Sportswear Shows (ISS). Individual seminars are just $25 if you pre-register: issshows.com