It all started with a free pen.
John Phyllis received the logoed writing instrument when he was 18 and thought, "What a neat business." Over the next quarter-century or so, the Ontario man has been in and out of the promotional game, finding himself continually drawn back to the industry that first sparked his interest. The pen, its logo faded and barely legible, still sits on Phyllis' desk at Impact Promotions, the custom apparel and uniform company he started seven years ago.

The Thunder Bay, Ontario-based decoration shop consists of three one-head embroidery machines, a direct-to-garment printer and 12 employees, all crammed into a 3,000-square-foot space. "It's working for now, but it can't last much longer," Phyllis says. "It looks like a bunch of ants running around."

Plus, the $800,000 company has been operating on very tight margins. Though Impact Promotions turned a small profit last year, cash flow is an issue, and Phyllis (center in photo) knows his production is not as streamlined and efficient as it could be. Part of the problem has been turnaround times – often pushing three weeks – and high shipping costs, he says. Impact Promotions outsources all of its screen-printing needs and racked up close to $150,000 in shipping expenses, thanks in part to double deliveries.

To alleviate these problems, Phyllis says he decided to expand, securing a nearby 7,200-square-foot former gym that's "an open canvas" for the six-color, six-station manual screen-printing press and six-head embroidery machine he's adding. He expects to retain the smaller building as well to house his company's thriving uniform arm.
Phyllis knew he needed expert help to maximize productivity and profitability in his new location. "It's a lot of money to expand, and I want to do it right the first time," Phyllis says. "I'm not one of those guys that think I know everything. I'll take every piece of advice I can get to make our company better."

As part of our ongoing Shop Shakeup series, Wearables paired Phyllis with Roy Marques, owner of the MCN group, a consulting company that helps decoration businesses run more efficiently. Marques has more than 36 years of industry experience and was the principal owner of a contract screen-printing company for 15 years. Marques helped Phyllis tweak his new shop's floor plan, preparing him for a planned spring move-in.

Go With the Flow

After examining a hand-drawn layout of the new shop, Marques recommends implementing a looping workflow for production, with jobs going from shipping and receiving around the shop floor, circling back to the beginning as finished product. "The one thing you want to think about is, 'How many touches do I have?' " Marques says. "Every time you touch that product, it's adding costs." That means, for example, positioning the end of the belt dryer near the manual press, reducing the dryer operator's steps to load the belt.

A long table should be set up adjacent to the dryer, forming a T, for folding finished shirts. Marques recommends finding a sturdy table, with an adjustable height so taller workers won't strain their backs from constant bending. The other key is finding a table with a smooth surface that's easily wiped down. "The smoother the table, the less it's going to grab the fabric," Marques says.

Another concern Marques has about Phyllis' floor plan is the distance between the art department and screen room, with the two areas at opposite ends of the building. "You don't want to have to go across the shop for the films," he says. He also recommends keeping the cleaner parts of production as far away as possible from the "loud, noisy and humid" washout booth. "Embroidery and DTG do not like to be near that environment," Marques says.

Phyllis' initial plan placed the showroom next to production, with almost equal square footage to each. "We'll have $30,000 worth of stuff in there," he says of the showroom.

Marques, however, recommends shrinking the large showroom to give Impact Promotions room to grow capacity. When it comes to production, he says, bigger is better.  "I'd rather have people start with more space," he adds. "If you're going to be successful, I guarantee you're going to be adding more equipment. … You'll be surprised by how fast you'll fill up the new building. It goes quick."

Phyllis concedes the point. "I could move the showroom wall closer to the parking lot and make the production area wider," he says.

The six-color manual press Phyllis has chosen for the shop is a good start, Marques says, though the 26" dryer is on the small side. Phyllis attributes his choices to conservative budgeting. "It's costing us so much money in efficiency not doing screen printing," he says, "but I don't want to get over my head with equipment purchases."

The smaller dryer will work for now, Marques says, but will become a problem down the line if Phyllis decides to purchase an automatic press. "A lot of people are not informed correctly and buy a smaller dryer and try to feed an automatic on it, and the guy ends up waiting to put shirts on the belt. It's not efficient," he adds. Marques usually advises clients to buy the largest equipment they can afford, even if it's beyond their current needs: at least eight colors to start for an automatic press and a 48" belt dryer with at least 10 feet of infeed to prevent bottlenecks.

Keep It Clean

Once the new Impact Promotions launches, Marques says, it's important to keep the production area clean and well-maintained. "Housekeeping is very important, especially with more than one process all in one space," he says. When Marques ran a shop, he was a stickler for spotless floors, even while running five automatic presses: "It took a lot of effort."

One trick Marques learned is to avoid spray tack adhesive. The aerosol sprays become a magnet for lint, he adds. "It settles in the air overnight and goes into the equipment," he says. "Stay away from those cans." Instead, Marques is an advocate for water-soluble adhesive, which can be purchased by the gallon and is cheaper than buying cases of spray cans. Fill a ketchup bottle with the adhesive and drip as needed. A damp sponge will reactivate the dried glue if necessary, he says.

Something else to consider when setting up the shop is having a proper vent for the belt dryer, Marques says. Navy blue, black and other dark garments release fumes when heated, he adds. The exhaust needs to be directed out of the building so it doesn't permeate the shop floor; avoid creating a venting system with sharp 90-degree elbows, which could cause backdrafts, he adds.

Know Your Costs

Phyllis has worked up a preliminary screen-printing price list, but is unsure of his methods. "I based my pricing off of what I was being charged by my screen printer," he says. "I don't want to lose money. That's not what I'm in business for."

Marques recommends keeping daily logs to get a sense of Impact Promotions' true costs. Once Phyllis has those numbers on hand, it will be easier to compare his price list against his former subcontractor's prices. This is a step neglected by many of the shops Marques consults with, no matter their size. "So many places do not know their true costs," he says. But, "The better control you have over your costs, the more profitable you can be."

Marques advises Phyllis to keep track of how many screens are reclaimed, how many prints are made and how long each order takes from start to finish. Create a grid to break down how many jobs, from one to six colors, the shop handles. Weigh the time spent against fixed overhead to get a sense of average labor costs. "Everything adds up," Marques says. "It's amazing when you start breaking it down."

A shop's costs begin accumulating before a garment is even touched; just processing a new order could cost anywhere from $4 to $12, Marques says. "That's where minimum charges come into play."

Another benefit of logging your processes: identifying and correcting inefficiencies. For example, if you only need to reclaim a handful of screens a day, let the used screens pile up and allocate one block of time a week for reclamation. "The more systematic the process, the more money you'll save," Marques says.

A Promising Start

Phyllis was gung-ho about Marques' recommendations, redrawing his floor plan shortly after their phone conversation. He decreased the showroom to give more square footage to Impact Promotion's production area. He also changed the setup of shipping/receiving and production to match Marques' suggestion of a looping workflow. "He had lots of good ideas for the layout," Phyllis says. "I think I got a million dollars of advice."

Phyllis is in the process of moving his production into the new building now, and he's enthusiastic about the prospects for the new year. His two salespeople, both recent hires, are "starting to roll," and he expects each to rack up monthly sales of at least $45,000 by June. The goal, he adds, is to reach $1.2 million in revenue for 2015.
Marques, for one, believes it's attainable, especially if Phyllis focuses on ramping-up productivity. "I think you have a good plan," he tells Phyllis. "It sounds like you've thought it through."

Theresa Hegel is a senior staff writer for Wearables. Contact her at thegel@asicentral.com and follow her on Twitter at @TheresaHegel.

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