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Repositioning For Efficiency

Integration of facilities poises Coats American's Sevier Plant for growth.

The repositioning of the U.S textile industry is well underway. Companies are streamlining, downsizing or eliminating some operations, while strategically expanding others. The name of the game, these days, is to produce a specialized product of superior quality and get it in the customers hands faster than the competition. A master of this game is Coats American, the U.S. sewing-threads subsidiary of Coats North America. 

TI visited the companys Sevier Plant in Marion, N.C., in early spring, ostensibly to update an ATI story published a few years ago about modernization projects underway at the dyeing facility (See Commitment To Values, ATI, June 1998). Instead, it was discovered, not only has the plant added new capacity, but Coats American has also restructured its threads business considerably to accommodate the amalgamation of Barbour Threads, which the company purchased slightly more than a year ago, into its operations and marketing strategies. As a result, the mission of the Sevier plant is substantially different than it was just a few years ago.The sewing-thread plant in the North Carolina mountains has long been a dyeing operation for spun threads for the apparel market, but, with the recent acquisition of Barbour, it now does continuous filament dyeing and packaging of products earmarked for industrial applications.We purchased that group (Barbour) a little more than year ago, said Tom Borland, vice president of manufacturing for the apparel division and Sevier plant manager. Barbour was the largest supplier in the world of specialty thread. The company made thread for non-apparel manufacturing, such as mattresses, furniture and automotive applications, as well as for such unusual applications as thread for the sewing of baseballs, footballs and that sort of thing. We have significantly enhanced our presence in these market segments. Restructuring The BusinessAs a consequence of the acquisition of Barbour, Coats American has restructured its business into three separate business units: apparel thread; specialty thread; and crafts.Crafts have always been very big at Coats. You walk into Wal-Mart and you see spools of predominantly CoatsandClark thread, Borland said. The craft side of the business was already separate from industrial, but now weve taken the industrial segment and divided it into two distinct units one being specialty and the other being apparel. The Sevier plant is a plant within a plant concept. We have both the specialty and the apparel lines, which coexist within this facility.Borland said each of the businesses now has separate executive, sales and marketing leadership in order to increase focus and efficiency in each of the business units. Ultimately, this will enable us to better serve our customers. In most of our plants, the total plant is assigned to one or the other of these businesses. Sevier is almost unique in terms of how it is capturing both businesses under one roof.As well as restructuring to take advantage of the supply chain for each respective market segment, Coats is also expanding its manufacturing presence throughout the Western Hemisphere. We are integrating facilities south of the border with our facilities in North America, Borland continued. We opened last year a plant in Honduras and have in our plans this year to open one in the Dominican Republic. In addition to those new facilities, we have an existing one in Mexico City and have bought land to develop an additional one within Mexico. The integration of the U.S. facilities with these is based on a strategy of providing superior service wherever we are located. For example, we will continue to supply the common, big-volume requirements from the United States, such as white thread. But we can be very nimble, very agile in the small, specialty orders that customers require and need very quickly.Coats Mexican, Central American and Caribbean plants have the same three-day turnaround as their U.S. counterparts, he said, but they realize substantial cost and transportation savings when shipping to cut-and-sew operations in Mexico and CBI countries. Of course, the specialty customers in the United States will continue to be serviced by the plants we have here. That is, ultimately, the reasoning behind the integration. If we want to provide maximum three-day service, no matter where the customer may be, then we need to have facilities within that three-day cycle a day or two days to manufacture and a day to ship.With plants in the United States, Canada and Mexico, Borland said Coats has greatly benefited from NAFTA. The CBI parity legislation will give us, we think, similar advantages in Central America, South America and the Caribbean. At some time in the future, one has to assume that NAFTA and CBI will come together, but that is some time in the future, not now. Software InvestmentsIn addition to offshore expansion and internal restructuring, Coats American is also investing in i2 software programs that, eventually, will segue into a complete Enterprise Resource Planning system. This is a new tool, a software package, that can provide much superior forecasting and planning. In addition, it will be multinational, so we will be able to integrate all of the demand into our strategic planning with regard to customer service. We have two distinct groupings within the company: Bulk Production Units (BPU) and Customer Service Units (CSU). The BPUs manufacture products that have, historically, large demand. The CSUs serve more specialized, fast-response demands. i2 will help us integrate this whole system, so that we have capability and service in those areas in which there is demand. White thread, for example, is a product that we know we are going to sell a certain amount. We may not know exactly who we are going to sell it to, but we know we will sell it. But other products, the smaller, specialty orders, you dont want to build inventory in advance, so you want small, agile, highly flexible plants close to the customer and you want a system (i2) to ensure effective forecasting and management. i2 is projected to be operational at Coats American by the end of this year. 
Borland says Coats has thousands of different SKUs. There is a popular notion that among sewing threads, you have only a few products. But thats not at all true.From purely a production point, the Sevier plant recently doubled the number of Rieter/ICBT twisters in the plant to accommodate the added capacity generated by the Barbour acquisition. The plant operates both the DT360 and PW360 models. As well, the company uses SSMs Digicone Combiwinder. In the dyehouse, package dyeing is performed in 40 Gaston County variable-load machines, all of which are controlled by Gaston Countys SuperTex+SQL computerized control system. The SuperTex+SQL provides supervision of virtually every dyeing area, including formula management, drug room supervision, boiler-surge control, automated chemical delivery, process analysis, machine control, dye/chemical inventory and floor scheduling. An automated system by Color Service provides precise accuracy in weighing, mixing and dispensing dyes and chemicals.As a company, Coats American, based in Charlotte, N.C., produces more than 30,000 combinations of superior thread products and colors to meet the broadest range of sewing requirements. These products reflect the latest in thread technology and color science and are distributed throughout the North American continent. As well, the company provides a broad range of customized purchasing, shipping, and technical support services to suit each customers business needs.The Sevier Plant, as well as a Coats plant in Bristol, R.I., were the first U.S.-based thread manufacturers to qualify for the QS-9000 quality certifications awarded by the Quality Management Institute.

May 2001