Tuesday, December 11, 2018

New small business poll highlights crucial need for new investment

The NFIB has recently released the November 2018 Small Business Economic Trends Report. The nation-wide survey reveals some important trends in business potential. There has been some recently reported record-high positive business data, and these indicators are beginning to take shape as long-term trends rather than isolated data quirks.

Though the overall optimism rating dipped slightly, it still remains at near-record levels. Here is a telling quote from the report:
Spending ... has eliminated excess capacity and now growth depends on increasing labor force  participation and productivity gains through training and investment in new capital.  Reports of unfilled job openings and few qualified job applicants are at record levels.  Owners report raising compensation at record rates to attract new workers.  While all of this helps, it will not be sufficient to restore potential growth quickly to higher paths that were eliminated by slow growth in 2008 - 2016... (read the full report from National Federation of Independent Business here)

And the greatest reported problem:
... Twenty-five percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 2 points), matching the record high reached in August...
It's no secret that finding qualified workers is getting harder and more expensive, and the mattress industry is no exception. We've pointed that out here, here, and here...

This NFIB report is more evidence that solidifies the fact these manufacturing concerns are not going away soon. It's time to invest in new equipment that can grow productivity and shrink your dependency on expensive labor operating old, inefficient systems.

It looks a lot like this quilt panel de-stacker shown in this video, and it can make your factory wildly more productive.

By the way, this NFIB study points out that 61% reported they were making capital investments, another increase over October's report.

So, are you one of those cashing-in on growth optimism, or cashing-out on your future?

Visit www.gsgcompanies.com to see new equipment that can grow your productivity AND your optimism.

Wednesday, October 31, 2018

Conquer your biggest manufacturing fears this Halloween

Current elections drama around the globe, trade policy uncertainties, and tightening labor conditions can be frightening for mattress manufacturers during this Halloween season. A paralyzing fear may overcome business decision-makers feeling unsettled about the future.
But do you know what's really scary?
An ominous giant of destruction is already at work devouring your profits and crippling your operations. It's waste from inefficiencies in your manufacturing operations, and while you worry about what the future might hold, it's already taken hold in your business, and continuously eats away at your profits day-by-day.

Fortunately, you can control this beast, and GSG has the weapons to defeat it.

Reduce non-value-add touches in the factory with a Waste-exit system
Mattress production accumulates a lot of scrap and debris in nearly every operation on the plant. It's a bulky by-product of the process, and it can be a injury hazard as well. Manually handling this waste drains profits from your product every time it's touched!

The new Waste-exit vacuum-powered system can be directly fitted to machines to automatically suck scrap materials into a network of ducts that carry the waste away.

Click here for more Waste-exit info

Save on adhesive materials and labor with efficient distribution of glue and labor.
Sensor-guided Quarrata roll-coat glue line automatically dispenses just the required amount of adhesive on your foam layers. This machine/conveyor system reduces human error (and expense) commonly associated with hand-sprayed systems that result in too much, or too little, glue coverage.

An infrared heater and mattress press speeds up the process and ensures a solid bond between layers.

Click here for more Quarrata info

Overcome your greatest FOMO with a TK-381 roll-pack machine
Speaking of fearful concerns, FOMO (Fear Of Missing Out) is running rampant among mattress retailers without a successful online direct-sales channel. You may not be able to predict how tomorrow's geo-political events will impact your business, but it's a safe bet that online mattress sales is going to continue to increase and you can't afford to waste any more time missing out on that!
Click here for more TK-381 info
Even if you don't immediately need to direct-ship roll-packed beds, studies have shown they are far more efficient to ship on your conventional shipping trucks too.

It's been said "the greatest of fears is the fear of the unknown," but the waste caused by manufacturing inefficiencies is found right in front of you every day. GSG has the weapons for you to attack this threat to your business before it drains you dry like a starving Halloween vampire!

Visit www.GSGcompanies.com for all the help you need.

Friday, October 5, 2018

UPDATED (10/05/2018): Unit Labor Costs suck profits from mattress manufacturers - and it may be getting worse!

(The main body of this post originally posted on June 1, 2018, but it has been updated in light of new relevant information.)

Here are some highlights from today's US Bureau of Labor press release regarding the American employment situation...

"... Total nonfarm payroll employment increased by 223,000 in May, and the unemployment rate edged down to 3.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in several industries...
  • Manufacturing employment has risen by 259,000 over the year, with about three-fourths of the growth in durable goods industries. 

UPDATE 10/05/2018
The September 2018 US Jobs Report show another drop in unemployment rate to 3.7%, the lowest since 1969! Likewise, as suggested in this June 1 post, annual wage growth rate rose to 2.8% over the past 12 months.

Let's repeat, fewer workers are in your area, and higher labor costs are in your future. Read the remainder of the post below for help from GSG.....

Good news for the American worker; wake-up call for the American manufacturer.
More Americans are enjoying better incomes, and hopefully the American manufacturer can benefit when the population spends that extra money on manufactured products - like new mattresses!

But as we've pointed out many times in this blog, as the pool of available workers shrink, labor costs will increase. Employers are forced to increase wages to attract ideal applicants, and keep existing employees from jumping ship for a higher paying job at a different business.

This impacts two key areas of your profitability: Unit Labor Costs (the labor cost to produce one unit of your manufactured product) go up, and Productivity (the amount of value produced per employee) goes down. That's not a good scenario for manufacturers like you.

As explained in a another recent BLS report regarding 2017 Manufacturing Productivity Costs, "... Employers experience increased unit labor costs when hourly compensation growth outpaces productivity growth. Unit labor costs increased in 19 of the 21 manufacturing industries, as hourly compensation growth outpaced that of productivity..."

Based on this most recent May report, Productivity Costs may be worse for American manufacturers in 2018 if employment trends continue this trajectory. 

Efficiency trumps Unit Labor Costs
To combat rising labor costs, you need to cut out waste, and produce more value per employee. Handling and disposing of material scraps from cut and sew operations in the mattress factory is a total drain on profitability! It adds no value to your product, and sucks money right out of your operations. GSG now offers a vacuum-powered automatic waste disposal system from Waste-exit. It literally sucks waste out of your mattress production.

Check out this video see this amazing system at work
learn more at our website.

Eliminating the waste is the low hanging fruit for improved efficiency, but there are many other areas to improve upon and GSG has solutions for every area of your mattress plant. Click here to see more new hyper-productive equipment from GSG.

Monday, October 1, 2018

Chinese tariffs and anti-dumping duties offer relief for US mattress manufacturers

Efforts to oppose China's mattress dumping practices in the US mattress market are under way.

WASHINGTON, September 18, 2018 – Corsicana Mattress Company, Elite Comfort Solutions, Future Foam Inc., FXI, Inc., Innocor, Inc., Kolcraft Enterprises Inc., Leggett & Platt, Incorporated, Serta Simmons Bedding, LLC, and Tempur Sealy International, Inc. (collectively, the “Mattress Petitioners”) today filed an antidumping duty petition demonstrating how unfairly traded imports of foam and innerspring mattresses from China are causing material injury and threat of material injury to the US mattress industry. The petition was filed with the US Department of Commerce and the US International Trade Commission. The Mattress Petitioners allege dumping margins ranging from 267 percent to over 1,777 percent. The dumping margin is the difference between the Chinese producers’ US prices and a normal value calculated under US trade law... (read the entire press release at BedTimes Magazine)

The related press release issued by the Mattress Petitioners goes on to say that some adult mattresses from Chinese exports cost a mere $18! Obviously this leads to a damaging cut in the market share for domestic manufacturers.

The International Sleep Products Association (ISPA) encourages all US mattress producers impacted by this to immediately download and complete a questionnaire provided by the US International Trade Commission (USITC). 

80% of the $3.67B in imported bedding in 2017 came from China.
Source credit: ustradenumbers.com
91% of the tonnage of imported bedding in 2017 came from China.
That's a lot of volume of cheap beds!
Source credit: ustradenumbers.com
The graphics above show that the value/ton of China imports is very undervalued compared to other listed importers.

Facing the threat of possibly retroactive duties and a new 10% tariff announced last month, Chinese imports may slow down rapidly. A quick look at the USITC questionnaire focuses on the impact this has had on your capacity and your market share

The mattress import growth from China has been expanding for over a decade, and if you're still using the same machinery of that era, you may struggle to meet capacity demand should your market share rebound. Now is the time to assess your capabilities and your insufficiency too.

If a loss of market share in recent years has forced you to downsize staffing, you probably can't rely on new hiring to meet new production increases. Due to the current record-low unemployment rate, the manufacturing labor force is just not available. You'll need new machines that can produce more volume with less manual labor.

GSG suggests these three key machines for top productivity with minimal labor requirements:
Gribetz V16 1600 RPM quilt machine.
Fastest Tack & Jump quilter in the world!

Porter EST-501 semi-automatic flanger.
Automated turning belts and panel guides make for fast easy work!

Gateway Systems Mattress Master Optima semi-automatic tape edge.
Turning arm and flipping device make this tough task easy and efficient.

Act now to inform the USITC about the impact of mattress dumping, then act fast to assess your changing manufacturing needs with the help of your GSG representative.

Friday, September 21, 2018

Football and Economics; it's all about the stats!

Well the fourth quarter is upon us. Is your game plan a winner or a.. errr... a Browns?

The Cleveland Browns have finally got the win they've been struggling for since 2016! How does your team (and by "team", I mean your business) compare to the Dow Index? The Dow is a bellwether for the economy as a whole. So, is your mattress business on a winning streak or does it perform like the hapless Browns?

Touchdown dance or sitting on the sidelines?
It's great to see the economy doing so well - unless you're stuck on the sidelines. One reason mattress manufacturers are struggling is because they haven't changed their playbook to keep pace with today's market. If your mattress operations still look like it did when the Browns last had a winning season (2007!), it is time to huddle up and make a new game plan.

The customer has really moved the goalposts on us in recent years. Take a look at this...

Need a little razzle dazzle to start that winning streak?

Visit the Gribetz Spectrum quilter web page and see how much mattress quilting has changed since 2007!

Tuesday, August 28, 2018

Economic indicators look good, but is it time for mattress producers to react?

These are exciting times we live in!

The economic climate for US manufacturers in the summer of 2018 has been very lively. Let's summarize recent developments that are favorable for these producers:

  • unprecedented business confidence
  • strong GDP growth
  • record-breaking stock market performance
  • new tax incentives
  • manufacturer-favorable deregulations
  • strong efforts to balance import/export trade
  • a new post-NAFTA manufacturing trade agreement with Mexico
  • an uptick in retail sales
  • record low unemployment, coupled with rising consumer confidence

Of course many of these conditions impact some sectors far more than others, but, as a whole, it's becoming a very good manufacturing environment - and a very good selling market on the cusp of a boom! The key is finding out how to capitalize on factors you can benefit from the most.

So far, mattress industry sales have remained fairly sluggish as these economic changes have developed. This may be due in part because these economic changes have occurred so rapidly the consumer, and the mattress producer have not had time to react. If your business is still operating in the same fashion it did prior to today's business conditions, it may be TIME FOR YOU TO REACT.

When the mattress shopper catches up with the market, be ready to deliver. There is still time to upgrade your equipment for more productive highly-efficient equipment before the calendar year runs out. Thanks to recent manufacturer-favorable tax code changes, you can now deduct up to $1,000,000 worth of equipment with the Section 179 deduction. So you can basically get $1,000,000 worth of equipment for only $650,000 this year!*

Click on this Calculator to plug in your own numbers and see how you can benefit:

 Section 179 Calculator
(Courtesy of section179.org)

It's time for you to capitalize on these favorable business conditions, and prepare yourself for when the mattress shoppers catch up.

* This tax information, though based on a realistic scenario, may vary from your actual experiences. It is provided for illustrative purposes only. Consult a qualified tax professional for specific information before making purchase decisions.

Thursday, July 26, 2018

'Industrial Artificial Intelligence' for the mattress industry - Google it!

It's easy to get sucked into the news stories about robots and the imminent "robotcalypse" that will replace all our factory workers. That storyline has been prevalent since the mid-20th century, and it's an easy-to-grasp concept for most people. It's been in the making for 75 years, but it still hasn't really materialized.

Here's a new storyline that's not quite so easy to comprehend for some: industrial artificial intelligence . It's not about placing a micro-chip in your brain like some science fiction writers like to imagine, but it does place a micro-chip in your factory machines to learn processes and become more efficient.

Google has just announced the availability of Artificial Intelligence (AI) chips compatible with a Google development kit so manufacturers like you can more easily develop an AI program in-house. The link from The Verge below describes the Google program in greater detail....

This is similar to cloud-based retail IoT systems offered for residential HVAC systems, home security, and turning the lights off when you leave your house - but specific to machine efficiencies. Google already offers some Cloud-based AI packages, but this is a little different. This new chip program can be installed directly at the machine level for more greater cyber-security control, and better satisfy industrial needs locally.

Google doesn't do everything right, but they do know a few things about algorithms and user-friendly systems, and those details are key to AI success in the mattress factory.

It may still require some high-tech mojo on your part to install these Google chips, and produce a useful program to interpret the collected data. In order to effectively take advantage of AI down the road, you're first going to need to identify your manufacturing efficiencies and waste areas ahead of time.

Greenlight XT OEE system in use on a Porter mattress border machine.

The easiest way to start is with a "bolt-on" Overall Equipment Effectiveness application like our Greenlight XT system from GSG. You can automatically track machine operations, identify downtime and service issues, piece counts, and other critical production operations in real-time. Greenlight assimilates this info for you in customize-able charts and reports, and you can put it to use immediately!

This highly-affordable Greenlight system does not require any chip integration or special programming, and it can be retro-fitted to most existing factory machines. You can choose to follow the interpreted metrics on your in-house server or access it remotely via the internet.

If you're a naturally intelligent business person, you'll take your first step towards Industrial Artificial Intelligence with a visit to the Greenlight webpage at the GSG website.