Solutions in practice
By David Brandt
The quality on your back
Bayard Winthrop remembers the first time he wore a pair of jeans.
"I remember it like it was yesterday, when I got my first pair of Levi’s. And I remember feeling like, ‘OK, this is totally different than what I have worn. This is about me.’ And that feeling, that sense of, ‘I wear jeans. I don’t wear corduroys. I don’t wear khakis. I wear jeans.’ That was a moment for me that I will never forget."
This was the beginning of a love story. And like many love stories, the road to happiness was sometimes rocky.
While the U.S. automobile industry is arguably the most featured player in the recent resurgence of American manufacturing, other industries have been inspired to pick themselves up from the remnants of the recession. Old business models have lost their spark, and companies with long histories are scrambling to figure out how to climb to the top again while fending off innovative newcomers.
One such newcomer is San Francisco-based hooded sweatshirt maker American Giant, founded by Winthrop in February 2012. The company’s CEO believes that manufacturing, like many industries, has gone through cycle after cycle of success, failure and reinvention over decades. In that time, Winthrop said, American consumers seemed to lose their love for products made at home, particularly when it came to apparel – a $2 billion U.S. industry.
"We were living in a time 40 years ago [when] North Carolina could produce a sweatshirt for me that my mom could afford at a reasonable price, but we can no longer do that," he said. "And it would last forever, so there too was an element there for us to say, ‘To hell with this.’ We’re going to bring the same level of fresh thinking, innovation [and] clean slate to American manufacturing and apparel as all of us are doing in every industry that is undergoing fundamental change."
Winthrop observed that brands were taking on new meaning for customers. And those same customers were beginning to shun retail chains that sold high-priced clothing produced in overseas factories.
"And there were two things – moving toward an awareness around American manufacturing and customers leading the charge at leapfrogging traditional distribution – happening when all the great American brands I grew up around like Levi’s and Woolrich had given up on the ‘American-made’ story. And more importantly, they were stuck in an outdated business model, which meant they could never, in a fundamental way, take advantage of changing customer patterns and going direct to brands."
Thus, his simple, straightforward and manageable plan to make durable hoodies and sweatshirts produced entirely in America and sell them exclusively through the company’s website.
And then the Internet discovered American Giant.
In December 2012 American Giant, in operation for just a few months, had bought just enough materials and made enough hoodies to meet Winthrop’s expectations for the holiday sales season. The CEO and supply chain manager even talked about how the forecast may have gone over the top, resulting in far more supply than demand.
"My supply chain manager came into my office and said, ‘We are way too deep in inventory for Christmas. I’ve overbought. We’ve got too much stuff on the shelves,’" Winthrop recalled. "Four days later, we were sold out of everything we’d ever made."
Four days after that conversation, the online publication Slate posted an article about Winthrop’s young new venture. The publication’s tech writer wrote that Winthrop had made a bold claim about the quality of an American Giant hoodie. Soon, the claim was found online in a headline as bold as the statement itself: "This is the greatest hoodie ever made." (Click here to read the December 2012 Slate article.)
The Slate article spread like wildfire on the Internet. Almost overnight, Winthrop said the entire inventory had been sold. It was the happiest of holidays for American Giant, which still hasn’t been able to keep up with unexpected demand, even running full-tilt in 2013.
"I would view that as an operational stumble, a manufacturing stumble," Winthrop said. "I give myself a little bit of a hall pass there because trying to predict that kind of demand, I would challenge anyone to do that."
And customer loyalty developed almost as quickly. For every two or three customers upset about the wait, which is understandable, 200 are saying they’ll wait six months if necessary for a quality, American-made product, Winthrop said.
Since the shot of adrenalin from press, word-of-mouth marketing and the Internet, American Giant has expanded its nationwide supply chain. Demand for its hoodies, sweatshirts and T-shirts continues to rise. But Winthrop insists that none of the company’s success could be achieved without devotion to continuous improvement in its quality manufacturing design.
"There’s a laundry list of things both in terms of how you continuously improve the products you are currently selling and how you’re improving the products in the pipeline," he said. "We made a zipper change eight months ago because we weren’t happy with the action and the pull of the zipper. The way that the zipper is getting set into the garment itself was creating a little bit of wobble on the zipper, and we were looking at new ways to get that flattened out. We talk about little things like that."
His team constantly chatters about the Toyota Production System, the model that not only makes dependable automobiles but is an industry standard for quality and continuous improvement. Winthrop hired a former industrial engineer from Apple to direct American Giant’s product development.
"I’m enamored with manufacturing and industrial design," he said. "And I think when you spend your career – more than 20-something years [in my case] – in manufacturing businesses, you can’t help but appreciate even more the businesses that do those things well."
Success created new challenges. When demand suddenly spiked, it so overwhelmed one factory that it had to pause production, even as orders flooded in. Feverishly restocking supply and hiring a wave of new sewers risked compromising the company’s rigorous control standards, particularly since sewing expertise is not as common as it was 40 years ago.
At the end of the day, Winthrop said he wants American Giant customers to have a product that resonates and achieves longevity, just like his first pair of jeans, and he’s willing to risk his company’s brand on the promise of quality. The company offers an unconditional warranty, binding the producer-consumer relationship into a seemingly personal promise.
"Ten years from today, if you come back to us and say, ‘I’m no longer enamored with this sweatshirt,’ throw it in the box and send it back to us, and we’ll either replace it or refund your money. … We’ve done something special with a product that doesn’t have a lot of specialness in it."
David Brandt is the Web managing editor for the Institute of Industrial Engineers. If you have been involved in implementing a project and can share details, we’d like to interview you for a case study. Contact Web Editor David Brandt at (770) 449-0461, ext. 120, or email@example.com.