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January 2020

Fashion Forward in Florence

Expert sewers are the center around which OnPoint’s technology turns. Here, Amber Grandinetti works on a dress from Aniqa Chohan.

Before NAFTA, the northwest Alabama town of Florence was the T-shirt Capital of the World. Thousands of workers were employed in sewing and producing cotton t-shirts at factories such as Tee Jays Manufacturing Co., which had an annual payroll of $50 million in the early 1990s. When NAFTA became law, U.S. T-shirt production and other textile jobs moved offshore, manufacturers like Tee Jays closed their doors, and rows of once-bustling factories sat empty.

In recent years, the textile industry has gradually returned to Florence with world-renowned fashion designers Natalie Chanin and Billy Reid basing their operations there. But when OnPoint Manufacturing located its factory in Florence in 2014, the move signaled a return to clothing manufacturing for the area — in a new, high-tech, more sustainable way.

OnPoint Manufacturing has become a leader in the emerging industry of on-demand apparel manufacturing. With a headquarters office in Nashville, OnPoint’s Florence factory is “the most modern cut-and-sew operation in the world,” says Kirby Best, chairman of OnPoint Manufacturing.

Florence may no longer be the T-shirt Capital of the World, but it’s attracting the attention of fashion brands from around the globe. Best has welcomed guests from Japan, China, Argentina, Austria and representatives from brands like Kate Spade and Vera Wang to tour his plant. “Everyone who visits is absolutely amazed by the operation and what we’re doing in Alabama,” he says. “It’s the future of sustainable and profitable clothing manufacturing.”

And Best himself was the only North American manufacturer invited to speak at the recent Seoul International Fashion Manufacturing Forum, as South Korea examined the future of its own textile and fashion manufacturing industries.

Apparel on Demand Makes Sense

Most clothing companies haggle with offshore cut-and-sew shops that demand a minimum order for a low price per piece. But much of the clothing produced will later be sold at a deep discount or simply thrown away. At least 35 percent of new clothing goes to landfills, Best says.

With increasing attention on sustainability and avoiding waste, apparel companies need another option. And for many, on-demand production is the option that makes sense.

“It’s the cost per unit sold that counts, not the cost per unit produced,” Best explains to potential customers. “If we only sell 50 percent of what we make, that $3 garment made in China goes to $6. And on-demand manufacturing can compete at that rate.”

By ordering clothing in smaller batches, in many cases already sold, brands can avoid waste. They can eliminate waste and markdowns by producing and selling only what the customer wants — and only as many as the customer wants — and drastically improve their profit margins.

The art of single needle stitching

How It Works

Individual customers or brands start by setting up each garment in the OnPoint system. If the tech pack and pattern are well organized, the setup only takes three days, Best says. Once the garment setup is complete, brands can order garments as soon as customers place orders. Today, garments are shipped within three to five days of an order, but OnPoint is continually working to shorten that time frame. Best’s goal is to ship a garment within 12 hours of order.

When a customer places an order online, the manufacturing process springs into action. A combination of high-tech equipment and worker assembly lines collaborate to produce custom-made clothing at a dizzying pace.

The order flows into the factory’s high-tech system without any human touch, and instructions are sent to each sewer. When one sewer’s work is complete, the garment and instructions for the next step go automatically to the next person. “We keep the sewers busy, and automate everything else,” Best says. “It’s all algorithms that make this happen. We’re basically an IT company disguised as a clothing manufacturer.”

For instance, in September 2019, OnPoint began using a GERBERcutter Z1 — a next generation, data-driven, automated cutting solution for single-ply materials. This tool for smart manufacturing is the next step in OnPoint’s goal to speed the time from concept to production and establish a total inline system that allows it to go from direct-to-print to direct-to-manufacturing, Best says.

Not only is the on-demand apparel process quicker and less wasteful than traditional apparel manufacturing, it’s also more precise. OnPoint has a patent for producing 4 million patterns per garment, so the company is able to make each garment to fit any size or proportions.

Getting Here

A former Olympic athlete from Canada, Best first gained experience in the apparel industry by testing sportswear for functionality in the late 1970s and 1980s. Years later, when his wife’s chemotherapy medications caused hot flashes that kept her up at night, he remembered moisture-wicking fabric he had tested years earlier. Best started producing moisture-wicking sleepwear for his wife and friends who also took chemotherapy drugs.

While the sleepwear business quietly grew, Best was recruited to Nashville to build and run an on-demand book manufacturing company for Ingram Industries. Starting with traditional manufacturing equipment, Best and his team worked to make it profitable to produce just one copy of a book. Today, Ingram is the largest provider of online book publishing and has had a “huge environmental impact,” Best says.

With the large amount of waste in the apparel industry, Best saw a need for similar on-demand manufacturing in the clothing business. His goal was to create a model for producing clothing that would be similar to the one he’d created for book publishing. He started outsourcing to manufacturing plants in Alabama, and in 2011, built a small test plant in Cullman.

Cullman Regional Hospital asked OnPoint to produce scrubs for its staff. “Nobody wanted the same thing; they all wanted pockets in different places, different fits, different colors, and that pushed us into mass customization,” Best says.

He soon realized that customization was the future of apparel manufacturing, and OnPoint began growing. In 2014, the company relocated to Florence to capitalize on the long history of apparel manufacturing and the remaining seamstresses in the area. After starting with small, independent brands, the word has gotten out about OnPoint. The company is now fielding calls from huge brands like Target and Ralph Lauren, as well as a number of international fashion brands.

Currently, OnPoint’s 25,000-square-foot factory in Florence employs about 40 people as sewers, cutters, packers and technical designers. It has room to add 20 or 30 more employees there, and has plans to add five more U.S. plants soon.

Locating and hiring workers is challenging for OnPoint because so few people have experience in sewing. “We work in a beautiful, clean, highly technical environment, but it’s still sewing,” Best says. “And sewing is a dying art.”

Nancy Mann Jackson is a freelance contributor to Business Alabama. She is based in Madison.

Bridging a Gap in Aerospace Workflow

“Metal doesn’t mind if it’s on an airplane, a rocket or a car; it still needs to be fabricated,” says Crumbly, as he works to develop a community college program to educate technicians prepared to handle the work. Photos by Dennis Keim

Huntsville’s Von Braun Center for Science & Innovation has been around for more than a decade, but it’s revving up for one of its biggest projects yet, a groundbreaking collaboration with the Alabama Community College System.

“This state is really working on opening up pathways to the aerospace industry,” says Chris Crumbly, executive director of the VCSI and senior director for space and defense programs at the University of Tennessee Space Institute. “We can create a lot more jobs with what we have planned.”

When Crumbly came to the VCSI in January 2018, he took the helm of an organization that he says had been “dormant” for a few years. Established in 2006, the VCSI brought together universities and industry in a consortium to develop technology for the aerospace industry. That was successful at first, but around 2011, the VCSI board “put things on hold,” he says. In 2017, talk began about a new consortium, and Crumbly — a Teledyne Brown Engineering executive with 25 years experience working for NASA — was hired.

Crumbly estimates that $140 billion to $150 billion comes through Huntsville each year from the federal government. “That’s a lot of opportunity,” he says.

So he got to work, expanding VCSI’s group of members to include not only Alabama’s larger universities — Auburn University, the University of Alabama, Alabama A&M University, the University of South Alabama, the University of Alabama at Birmingham, the University of Alabama in Huntsville and Tuskegee University — but other institutions inside and out of Alabama. In addition, the VCSI Center for Minority Collaboration was developed to reach out to Historically Black Colleges and Universities.

Along the way, the VCSI landed several projects, but Crumbly believes he’s on the cusp of its biggest project yet.

“I became acquainted with some of the advanced manufacturing work at the community colleges of Alabama and some in Tennessee,” he says. “I started looking at the Alabama pathways training and realized we had been underserving our pipeline in creating folks who can do advanced manufacturing.”

In other words, there was some technical training that could be given through community colleges that would bolster the technology workforce needed in Alabama.

“This is not a research investment,” Crumbly says. “It’s a workforce development investment.”

Chris Crumbly, executive director of the Von Braun Center for Science & Innovation in Huntsville

Crumbly took his idea to Jeff Lynn, vice chancellor of workforce and economic development for the Alabama Community College System, and Jimmy Baker, chancellor of the system, and they bought into it in a bigger way than Crumbly expected.

“I had intended to do a pathfinder with Drake State Community and Technical College, with Calhoun Community College, with Wallace State Community College, some schools I had a little understanding of what they were doing and how they could play in the advanced manufacturing workforce,” Crumbly says. “Jimmy said, ‘Why don’t we take all 24 of our schools at once?’”

So every school in Alabama’s community college system is now a part of the VCSI consortium.

“What we’re doing is we’re really looking at the dramatically changing technology in aerospace,” Lynn says. “The beauty of it is that Alabama, particularly Huntsville and Mobile, is in the center of it.”

VCSI and the Alabama Community College System are looking toward creating a new associate’s degree in what they’re calling systems engineering technology. Students would learn to operate some of the advanced manufacturing equipment that’s becoming so prevalent in industry.

“What we’re hearing from our industries is that we need a two-year degree for technicians,” Lynn says. “That’s the wave of the future.”

Crumbly likens the need to the 1980s, when computer-assisted design (CAD) was becoming prominent.

“We did not have enough engineers trained in CAD to go and do it,” he says. “So the community colleges said, ‘We’re going to create computer-aided draftsmen.’ That’s the model I was following with systems engineering. How can we create something like what we did with the CAD technicians, but do it with these digital engineering concepts? This job doesn’t exist, yet.”

A curriculum is in the works, “based on things that are already taught in the community colleges,” Crumbly says. “A lot of the same coursework would be taken, and then you’d move on to some advanced courses.”

A person with a systems engineering technology degree would be able to do work that would free up engineers for other work, Lynn says. “It would really speed up the technology from the vision of an engineer or a research unit to fruition and getting out there and using it,” he says. “We think there’s a space, a gap, where that is needed. We think this model will catch on and quickly run across the United States and the world, even, when they see the possibilities. We’re somewhat of a pioneer in it right now.”

Being a pioneer isn’t easy, and, in this case, it’s going to take some money, whether that’s from the aerospace industry, the Department of Defense, NASA or other sources.

“I think there are some things we can do in-house without grants, but to really get this going we need money,” Lynn says. “I think it’s very doable. We have some lofty goals, but the model is going to take a significant amount of money from our investors.”

Whatever the mission, engineers can spend more time creating and refining the solution if highly skilled technicians are prepared to meet the fabrication challenges. The Apollo 16 command module, hanging in Huntsville’s Air and Space Museum, is a tribute to design and craftsmanship.

And there is already some interest in this new venture, including U.S. Rep. Robert Aderholt’s office helping to identify some appropriate grants for the venture, Crumbly says.

“We’re starting to see some interest from the industry that they would hire these people,” Crumbly says. “We’re trying to create interest in a way that maybe even the industry would put some seed money into it so we could create a pathfinder program at one of the colleges, perhaps one of them near Huntsville in North Alabama.”

Aerospace could be just the beginning, Crumbly says. “Metal doesn’t mind if it’s on an airplane, a rocket or a car,” he says. “It still needs to be fabricated.”

And VCSI wants Alabama and its community colleges to be at the forefront, as they were in the ’80s.

“Had we not created CAD technicians, we’d be way far behind where we are now in computer-aided design and manufacturing,” Crumbly says. “Community colleges can really expand our workforce and help engineers do what engineers do. We’re just starting to get the word out. If we can just get one school and one company to buy into this concept, I think it will be widespread. … Industry hasn’t completely bought into this as a way to do business. It’s coming, but it hasn’t grabbed hold, yet.”

Alec Harvey and Dennis Keim are freelance contributors to Business Alabama. Harvey is based in Auburn and Keim in Huntsville.

Alabama’s Medicaid Limbo

Despite philosophical challenges to Medicaid expansion, “I think that it is something we can accomplish,” says Danne Howard, executive vice president of the Alabama Hospital Association.

If Ronald Reagan was still president and he proposed Medicaid expansion, the Alabama Legislature would be a lot more likely to entertain the idea, says Sen. Jim McClendon, R-Springville, chairman of the Senate Healthcare Committee.

But Reagan left the White House in 1989 and left this earth in 2004, and while some people say they see a slight shift in attitude in Montgomery toward Medicaid expansion, it appears there are a lot of hurdles to clear before it becomes reality.

To date, 36 states and Washington, D.C. have adopted Medicaid expansion and 14 states have not. Of the 14, half are in the Southeast.

Medicaid is a wide-ranging health insurance program for low-income individuals of all ages. Jointly funded by the state and federal government, it provides health coverage for diverse groups of Alabama residents, including pregnant women, parents and caretaker relatives, adults with no dependent children, disabled individuals and seniors.

A provision in the Affordable Care Act (ACA), or Obamacare, called for expanding Medicaid eligibility so it would cover more low-income Americans — people up to 64 years old and with incomes up to 138 percent of the federal poverty level.

But the Supreme Court ruled that states could not be forced to expand their Medicaid programs, so it was left to each state to determine whether to participate or not.

Jim Carnes is policy director for Alabama Arise and has been at the forefront of the effort to expand Medicaid, which he says is an evolving story. He has a one-word answer for the state’s reluctance to expand Medicaid.

“Obama,” he says. “For a number of years, the reason Alabama did not expand Medicaid was strictly political. That has changed over the years. The Medicaid expansion has moved forward now in 36 states and those states’ Medicaid programs are doing very well with it. No state is trying to pull out. Everybody has shown improvements, new research is coming in all the time about health improvements resulting from Medicaid expansion and the positive economic impact of expansion. Rural hospitals in those states are significantly more stable than the ones in the non-expanded states. As that has happened and we have had distance from the Obama administration, that original objection has kind of subsided, and the conversation at the Alabama Statehouse has changed significantly as well.”

There are “roughly 300,000 people who would qualify for expanded Medicaid coverage, and most of those currently do not have any health insurance,” says Jim Carnes, policy director for Alabama Arise.

According to Carnes, Alabama has “roughly 300,000 people who would qualify for expanded Medicaid coverage, and most of those currently do not have any health insurance. Therefore, when they get sick, they often decide they can’t afford to go anywhere for medical care, so they just get worse. They try to ride it out and then they get worse and go to the emergency room, and we all pay for the services provided there. Those costs get spread across the whole health care system. It is not an efficient use of resources, and it is definitely not an effective use of health care, because we are letting people get worse before they get into care.

“Medicaid expansion is not the original door slammer that it was in the beginning,” Carnes says. “It has turned to ‘Well, it sounds good but how would we pay for it?’”

Sen. McClendon says he has not talked to any of his committee members about the cost of Medicaid expansion but offers the following:

“Fact number 1, and I have been over this with the hospital association and others: It is estimated year one is probably going to cost $150 million. Now the fact is, year two, the proponents say by that time we will be generating money by income tax, new jobs and new equipment, hospitals will be buying a new CAT scan or something to accommodate the increased volume.

“Here is the current issue with that theory. All of that revenue goes to the education trust fund. Not one penny of it, unless major changes are made, will go to the general fund and the general fund has the responsibility of paying the bills.” And that translates to a squabble over funding.

Citing a University of Alabama at Birmingham School of Public Health report, Carnes estimates the first-year cost at about $168 million, which he believes would be more than offset by a combination of increased federal spending and lowered costs of providing state-funded healthcare for the very same people.

Danne Howard, executive vice president of the Alabama Hospital Association, agrees with Carnes about a subtle shift in attitude in Montgomery but says there are issues.

“I think a lot of the conversation over the last couple of years has changed, and it has changed from an awful lot of ‘No, we just can’t do this, because we think the Affordable Care Act will be repealed.’ There was a lot of philosophical pushback that is not necessarily there today. Today it is more about the financing, how are we going to come up with the money for it,” she says.

“I think there are still a lot of philosophical challenges — what would an expansion plan look like, work requirements, work referral, but I think that a lot of our elected officials think that it is something that we can accomplish with an Alabama plan if we could figure out how to pay for it.”

Howard points out hospitals are required to treat people in an emergency situation regardless of ability to pay. “Physician offices, urgent care clinics and other places, they have the ability to turn people away or not treat or not do what they need to do if they don’t have insurance. A hospital may not do that. It is federally required,” she says, adding that uncompensated care has grown to the point that 75 percent of Alabama hospitals are operating in the red.

“If you narrow it down to just the rural hospitals, 88 percent of Alabama’s hospitals have negative operating margins, double digit operating margins,” she says.

According to Howard, rural hospitals have “a totally different dynamic. A lot of folks in rural areas are unhealthier — that has been proven in studies. There is a disproportionate number of un- and under-insured patients in rural areas.”

Last October, Alabama Medicaid Agency Commissioner Stephanie Azar announced that the agency was implementing a new statewide program, called the Alabama Coordinated Health Networks, or ACHN, to provide comprehensive care coordination for the state’s 750,000 Medicaid recipients.

ACHN doesn’t change Medicaid benefits, but coordinates them so recipients get better organized care, and Alabama Arise has supported the effort, Carnes says.

“But,” he adds, “it is not the savior of the rural hospitals. The thing that would most help rural hospitals would be to provide coverage to the uninsured, to the people who cannot afford private coverage and make too much money to receive Alabama Medicaid at its current eligibility limit.”

According to Carnes, Alabama Arise has a revenue plan that would bring about $800 million into the state coffers.

Like McClendon, Carnes anticipates a funding squabble between the education and general fund budgets. But he also anticipates a solution — an extra $800 million in revenue from ending the state deduction for federal income tax. With that, he says, “We could do two major things. We could end the state sales tax on groceries and we would have sufficient new revenue that by some transfers and some other mechanisms between the two budgets, we could pay for Medicaid expansion.”

Carnes says expanding Alabama’s Medicaid program may also help in the state’s efforts to avoid a U.S. Department of Justice lawsuit over prison conditions.

The Department of Justice earlier this year condemned Alabama prisons for unconstitutional levels of violence and inmate deaths, and threatened to file a lawsuit unless conditions are approved.

The Governor’s Study Group on Criminal Justice is looking for solutions to those prison problems, and gathering data on sentencing laws, recidivism and policies. Carnes believes  Medicaid expansion could help, saying untreated mental illnesses and substance use disorders are major contributors to Alabama’s prison problems. And Medicaid expansion would help tackle those problems, he says, by strengthening services that help people stay out of prison and help former inmates become productive members of the workforce.

Beyond financial issues, “The problem with Medicaid expansion and Medicaid in Alabama is attracting providers in rural areas, and it’s hard to do,” says Sen. Jim McClendon. AP Images

“All these are great ideas,” says McClendon, “but there’s folks that have problems with them. Medicaid expansion only makes sense to me. We would have more poor people covered by insurance. One of the arguments for expansion is that it could save rural hospitals. The problem there is the rural hospital model is probably totally out of date with modern health care. Let’s say you have chance to go into a rural hospital in Demopolis or you can be in Birmingham in a hospital in an hour and a half — what’s your choice?

“The problem with Medicaid expansion and Medicaid in Alabama is attracting providers in rural areas, and it’s hard to do.”

McClendon says he favors Medicaid expansion, and “I have thought about it and I have talked to a lot of folks.”

One possibility that always comes up is a state lottery. “We are talking about a lottery,” McClendon says. “I have done a lottery bill about the last three years, but always strike out. That could be one way of paying for it but the single biggest obstacle to a lottery in Alabama is the Poarch Creek Indians. They killed it the last time and they’ll kill it again.”

Bill Gerdes and Robert Fouts are freelance contributors to Business Alabama. Gerdes is based in Hoover and Fouts in Montgomery.

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