Flashbags: Sewing Much Better …
Founded in 2005, Flashbags is a growing 5-person company located in Burlington, Vermont. Their creative product line consists of artistic handbags and unique accessories.
After receiving local press and national exposure during the summer of 2007, Flashbags began to experience a jump in sales, without an ability to produce at the required capacity. Their original business model was that of a web- based retail business. But in the summer of 2007, the company began receiving orders from high-end wholesale customers interested in much larger quantities.
The resulting challenge was a need to quickly create a manufacturing facility that would allow a ten-fold (10 X) increase in production. The company was also attempting to tackle other growth-related issues, including waste and the physical layout of their facility – all of which contributed to low profit margins and excessively high variable costs throughout the busy holiday season of 2007.
In the words of the owners, “While production was lively, the process, use of space, and the people were highly inefficient. We were working with large and unpredictable batch sizes. Due to lack of training time and general chaos, many mistakes were being made. We wasted materials, didn’t order supplies in the right quantities or timeframe, our temporary employees lacked confidence, and we had no systems for accountability. We had very few systems in place on the production floor or administratively. We made it through our busiest season riding on the originality and quality of our product and “bend over backward” customer service. We were exhausted and disappointed at our small profit margin, considering the fact that we were heading into the lean retail months.”
The company finally decided to seek assistance from the Vermont Manufacturing Extension Center (VMEC). VMEC recommended basic “Lean” training for Flashbags’ staff and the implementation of proven Lean Manufacturing principles. Once deployed, the Lean approach worked; and the results were very telling.
Results Achieved: “We have seen our gross profit margin double in less than one year. We have much room for improvement, but it now feel like we are operating a real business, not just managing chaos and making pretty bags. We are making ten times as many bags in a much smaller space with the same number of people. Our employees are happy to come to work, are able to find the sources for their own errors and suggest methods for improvements. We are able to predict turnaround time and volume requirements from our suppliers based on our own order volume. We have built an organized space with clear visual cues and indicators for when an action is necessary. Three years ago, we knew we had our hands on a very clever and potentially powerful idea. What we didn’t know was whether Flashbags would ever be a viable business. It would often take several hours to finish one bag. We are now moving one unit through the line from start to finish in an average of 26 minutes. The physical changes in our workspace and addition of visual indicators have reduced chaos, improved employee morale, and drastically increased our productivity. Now that our production floor is operating smoothly, there is more time in the day to manage financial and administrative responsibilities and to formulate and implement a strategic sales and marketing plan. We are proactive rather than reactive. We are producing a high quality product faster and with minimal waste. Our employees feel confident, comfortable, and accountable. The marked improvements in flow of materials and people has led to a vibrant, creative, and efficient workplace. Our financials are in good order and show that we are now running a viable manufacturing business right here in Burlington, Vermont.”