A little over three years ago, preparations for the International Formalwear Association’s annual trade show were underway in Las Vegas. Management and sales representatives from Elite Formal Designs Inc. arrived a day early to prepare displays of their latest designs in cummerbunds, ties, vests and other tuxedo accessories manufactured at their Davie, Fla., factory.
The date was Sept. 11, 2001.
The ripple effects following the terrorist attacks in New York and Washington were felt in Nevada, where the suspension of air travel forced cancellation of the trade show. Also grounded were the hopes for a banner sales year at Elite, putting the company’s very survival in jeopardy.
“The IFA show is where we present our new line for the coming year to our customers and where most of our orders for the coming year are generated,” explains company treasurer, Jo Knorr.
Elite Formal Accessories is a family-operated business founded in 1985 by Jerry Parness, who serves as president. The company specializes in the design, manufacturing, marketing and distribution of tuxedo accessories under the Bill Blass, Jean Yves and Bracci labels. Elite’s accessories are sold to retail outlets, primarily men’s merchandisers and formalwear rental shops.
Without the trade show mainstay in 2001, sales fell by more than 40 percent. On top of that, “we had just expanded our plant because our sales had been growing so much,” Knorr adds. “We had to adjust.”
Fallout from the 9/11 attacks also made the company more vulnerable to pressure from the recession and “the effects of imports that have been devastating the apparel industry,” says Parness.
Once back in Florida, Brian Parness, the founder’s son and Elite’s chief financial officer at the time, began hunting on the Internet for programs that could help them weather the impending difficulties.
His search turned up the Southeastern Trade Adjustment Assistance Center (SETAAC), a non-profit organization based at Georgia Tech’s Enterprise Innovation Institute.
SETAAC provides technical and management assistance in manufacturing, sales, marketing, and information systems to help companies improve their productivity and competitiveness. Drawing upon funds available through the U.S. Department of Commerce, SETAAC can provide 50 percent of the cost of implementing improvements.
Once Elite’s eligibility for assistance was certified, SETAAC staff prepared a comprehensive company profile that identified Elite’s competitive strengths and weaknesses, and included information about the company’s sales and marketing, financial posture and productivity.
More to the point, the diagnostic report outlined several projects to boost the company’s bottom line. Elite’s management selected four of the ideas for implementation.
“For each project, we provided the names of three or so qualified consultants who could perform the actual implementation work,” says Mark Hannah, SETAAC project manager. “Elite would interview each of the prospects and pick the one they’d be most comfortable working with.”
Given the imperative of introducing new designs to the marketplace, the first order of business was a new-product photograph shoot for Elite’s catalog. SETAAC funding was the most important aid in producing this bread-and-butter sales tool because “it meant that we didn’t have to pull money from somewhere else in the company to do it,” Knorr says.
The next project involved an upgrade of Elite’s materials resource planning (MRP) software to reflect the availability at any given moment of inventory items for sale, as opposed to items still technically on site but already sold and packed for shipment.
The adoption of lean manufacturing methods was another SETAAC recommendation embraced and implemented by Elite’s management. The factory floor layout was changed so products move more efficiently through the manufacturing process, leading to a 2.7 percent reduction in labor costs.
“We’ve also eliminated a lot of bottlenecks,” Knorr says, “but when they do occur, we’re able to easily identify and remove them.”
In the past, during periods of peak demand, Elite outsourced work it could not handle alone. The SETAAC report concluded that outsourcing is more expensive than in-house production. The efficiencies and increased capability gained from lean manufacturing techniques have allowed Elite to virtually eliminate its outsourcing.
Better customer service is another benefit, according to Knorr. Thanks to both the MRP software upgrade and streamlined production methods, the company can ship a larger number of complete orders and in less time than before, she notes.
The most recent and final project involved implementation of an electronic data interface (EDI), which allows customers to automatically order and track merchandise online, a common and often preferred practice in the retail business. The system opens up new business opportunities for Elite.
“This is a whole different area we’re going into,” says Knorr, “and it’s part of the reason sales have jumped about 20 percent higher this year than last.”
This past season Elite posted its first profit in three years, and the coming year looks promising, Parness notes. “There’s still room for improvement, and we’re looking forward to improving our areas of production, EDI, advertising and marketing.”
Jon Goldman, director of marketing, attributes the company’s rebound to the ways in which Georgia Tech’s technical assistance have complemented the company’s commitment to personalized service.
“The members of our sales team travel the country visiting our customers individually,” he notes. “So while we’ve adjusted some of our processes technologically, we’ve also kept the character, honesty and one-on-one rapport that characterizes our sales approach. It has blended well with the help Georgia Tech provided.”
Knorr adds: “We’ve put in a lot of hard work and a lot of sacrifice to get us where we are, but SETAAC and Georgia Tech deserve a lot of the credit too. Quite simply, we could not have done it without them.”
For more information about Georgia Tech assistance in trade adjustment, contact Mark Hannah at 404-894-4407 or (mark.hannah@innovate.gatech.edu).
Research News & Publications Office
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 100
Atlanta, Georgia 30308 USA
Media Relations Contact: John Toon (404-894-6986); E-mail: (john.toon@innovate.gatech.edu).
Technical Contact: Mark Hannah (404-894-4407); E-mail: (mark.hannah@innovate.gatech.edu).
