November, 2012

A publication brought to you by the Manufacturers Alliance

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Manufacturer of the Year
The Manufacturers Alliance annual Manufacturer of the Year awards ceremony brings local manufacturers together to celebrate and recognize companies that share information and experiences to strengthen the Minnesota manufacturing community.

Each year, an Award will be presented in one of three categories: Companies with less than 100 employees; companies with 100 – 400 employees; and companies with 400-plus employees. You may nominate your own company or another manufacturer. Previous winners have benefited significantly from the positive image and its impact on sales and workforce recruiting.


Wage Survey
Plan to participate in the 2013 Compensation and Benefits Survey. This survey was designed with input from local manufacturing companies to provide comprehensive total cash compensation data for making important pay decisions in this ever changing economy.

The survey participation window opens December 17th, 2012.


Educational Programs
Each month local manufacturing practitioners provide an overview on what has worked and what has not worked as well for them, so that you may leverage their experience as your own. Member companies may send up to four employees at no cost to each Educational Program.

Leaders Alliance
Whether you have worked at the same company for 15+ years or just want to look beyond your four walls for manufacturing best practices, consider joining the Leaders Alliance to tour, critique and discuss critical issues in confidence. Now including our 17th Leaders Alliance peer group - EHS Management!

Member Recognition
Thank you to all of our new and renewing members over the last 30 days.

Baker Tilly Virchow Krause
Banner Engineering Corp
Baxter-Synovis Surgical Innovations
Central Container Corp
Ceramic Industrial Coatings
Continental Machines
D S Manufacturing Inc
Donald Pask
DRI-STEEM Corporation
E & O Tool & Plastics Inc
Eaton Corporation
FMS Corporation
Froehling Anderson
Gemstar Manufacturing
General Mills
Great River Energy
Hartfiel Automation
Haus Specialty Manufacturing
HID Global
Independent Packing Services
Intek Plastics Inc
Ironwood Electronics
Japs-Olson Company
Juno Inc
King Solutions
Lexington Brainerd
Loram Maintence of Way
Luke Bonawitz
Marken Mfg.
Mate Precision Tooling
McQuay International
Midwest Rubber Service &Supply Co
Milestone AV Technologies
MTS Systems Corporation
NEXEN Group Inc
Nortech Systems
North Anoka Control Systems
Olsen Thielen Company LTD
OMG Electronic Chemicals
Orange Tree Employment Screening
Platinum Group
Plymouth Industries
Rimage Corporation
Skyline Displays Inc
SPX Corporation
Starkey Laboratories Inc
Tennant Company
Tennessen & Associates
Tjernlund Products Inc
TSI Incorporated
Uponor
Vatne & Associates
Wagner Spray Tech Corp
Whirltronics Inc


Upcoming Events

February 7th 2023 09:00 am
- The Role of the Leader Online

February 8th 2023 08:00 am
- Creating Process Maps

February 9th 2023 08:00 am
- Sustaining Lean Culture Through Leadership Changes

February 14th 2023 09:00 am
- Learning to Solve Problems Supervision Fundamentals Certification

February 15th 2023 09:00 am
- The Role of the Leader

February 16th 2023 08:00 am
- Conflict, Communication and Collaboration

February 21st 2023 08:00 am
- Learning to Solve Problems 6 Sigma Green Belt Certification

February 21st 2023 09:00 am
- Leadership Style & Versatility Online

February 22nd 2023 08:00 am
- Root Cause Analysis

February 22nd 2023 09:00 am
- Learning to Solve Problems Supervision Fundamentals Certification

Article Index

Lean Leader of the Month: Rich Lessard
Article by: Rich Lessard

Richard Lessard is the Manager of Engineering Excellence at TSI, Inc.  Located in Shoreview MN. TSI is the Industry leader in the design and production of precision measurement instruments.


May you live in interesting times
Article by: Chuck Lindberg

The election is over, and with it the non-stop political commercials. Each of us must now deal with what the next four years will bring for our business in continued complexity, volatility and uncertainty.


Employee Wage Complaints & DOL Audits Continue to Rise
Article by: Gregory Peters

As the high unemployment rate and challenging labor market continues through 2012, Fair Labor Standards Act (“FLSA”) lawsuits recently hit a twenty (20) year high in the federal courts.  Since 2000, FLSA lawsuits have risen by more than seventy percent (70%) from 1,854 in 2000, to 7,064 in 2012.


MN Manufacturing Economic Outlook
Article by: Dr. Ernest Goss

For a fourth straight month, the Minnesota Business Conditions Index slumped below growth neutral. The index, based on a survey of supply managers in the state, dipped to 47.1 from 47.2 in September. This is the first time since the recession that the overall index has been below 50.0 for four straight months.


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Lean Leader of the Month: Rich Lessard

Richard Lessard is the Manager of Engineering Excellence at TSI, Inc.  Located in Shoreview MN. TSI is the Industry leader in the design and production of precision measurement instruments.

Where did you receive your Lean training/experience?
My Lean training stemmed from General Electric and their Lean Six Sigma program in 2003-2004.   While training as a black belt and mentoring green belts, my knowledge of Lean grew with collaboration between lean consultants and colleagues at General Electric Power, Oil, Locomotion, & Lighting.  After leading over 25 kaizen events from 2006-2007, my work in Lean expanded further with a new role at Ecolab as a Corporate Black Belt.  During my two years at Ecolab, I mentored several Black Belts in Lean practices and methodologies, from kanban and poka yoke to just-in-time production and kaizen improvements.  Today, TSI is my home where I collaborate with engineers, Lean leaders, managers and others to continue Lean growth within our business to enhance our profits.

How, when, and why did you get introduced to lean and what fuels the passion?
Interesting enough, doing any activity more efficiently has been my passion since I was very young.  My first job was in construction (shoveling dirt) and at every project I worked, I questioned, “Could this project be done with less work and better quality?”  The passion continued into college, finding inventive ways to gain efficiency through collaborative solutions, and these ideas paid off both in outcome and personal experience.  On my first day of Lean Six Sigma training, the instructor caught my attention so much that I aspired to be a black belt (I found my calling).  Only 18 months later, I had an opportunity to join the ranks of the LSS BBs and go forth, save money, and share the knowledge of Lean.  My favorite quote about Lean comes from my wife, “It (Lean methods) is just common sense, who wouldn’t want to be organized, efficient, and do more with less (effort)…”

What are your current Lean oriented activities?
As the manager of engineering excellence at TSI, I have been tasked with the Lean transformation of the product development process.  Daily activities include interacting with engineers about the new product development phase gate process, stimulating changes in managers’ daily activities (standard work), and keeping to our Lean transformation roadmap.  Some of my time is spent benchmarking and sharing with many other companies, which I find best spent during gemba walks with other Lean leaders.

What were the lessons learned from leading or training your team on a Lean project?
The lessons learned come from different challenges encountered while working on any project. I have found the best challenges during this journey have been in creating an incentive for the team to learn, and in stimulating new ideas.  The diverse personality profiles create a challenging and fun environment.  They will generate different outcomes for every Lean project while always producing positive results.  The path of discovering the potential size of an opportunity becomes the biggest challenge.  Of all the lessons learned during any project, the discovery of human potential is my favorite part of Lean.

What are the next steps in the Lean journey for your company?
TSI, Inc. has been on their Lean journey for eight years, initially focused on operations, some office functions, and now engineering.  Having been part of the operations journey for a couple of years, I now get a rare opportunity to join a very brilliant engineering team on a Lean journey in our product development process.  The journey has been slow to date, but with recent budgeting activities, additional resources, and clear direction, we are picking up speed and momentum.

How would you describe peer-to-peer education & training to your colleague?
Peer-to-peer education & training is the essence of Lean.  Collaboration between peers challenges the methods in which Lean is applied to your work environment. In encouraging and allowing for other perspectives of the condition or project at hand, the training experience improves not only your knowledge, but also other peers included in the discussion.  The levels of peer-to-peer experiences may vary throughout the journey, but there always seems to be one that will always stick out as the turning point in your lean journey. Keep the collaboration going and your turning point will happen today.

Richard Lessard is the Manager of Engineering Excellence at TSI, Inc. Located in Shoreview MN. TSI is the Industry leader in the design and production of precision measurement instruments. Rich may be reached at rich.lessard@tsi.com

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May you live in interesting times

The election is over, and with it the non-stop political commercials. Each of us must now deal with what the next four years will bring for our business in continued complexity, volatility and uncertainty.

Every business is different, and with the dynamics of the economy, some may expand operations, some may contract and others will stay the course. In any scenario, we need to choose appropriate strategies and programs to effectively confront workforce challenges we face in recruiting, retaining and rewarding essential employees.

Pay and benefits promise to have their own unique challenges. Here are five to consider:

  1. Despite persistent unemployment, certain jobs and local labor markets face significant shortages. According to Robert Half, a supply and demand imbalance exists for specialized talent within many occupations, including information technology and accounting. The unemployment rate is now under one percent in western North Dakota, where all levels and skills of employees are in ‘short supply’. Software developers and skilled manufacturing technicians are also high demand positions. Wages and salaries for these job classifications are likely to rise faster than for employees overall.

  2. Employees will receive pay raises in 2013, with an average increase of 2.5% to 3.0%, according to a recent survey supported by Manufacturers Alliance. A continuing trend is to spend the salary increase pool carefully, with top performers getting 5 to 10 times (4% to 5%) the increase given to low performers, who might receive increases of .5% to 1.0%. Administering such a reward distribution calls for companies to have well-honed performance measurement and management methods.

  3. It is likely that legislation called ‘Right to Know’ will be passed to amend the Fair Labor Standards Act. If passed, employers will be required to explain to employees whether their job is ‘non-exempt’ (generally, must be paid overtime), or ‘exempt’ (no overtime pay required). Employers would also have to provide information to employees regarding how their pay is calculated.  So, be prepared to back up and more fully communicate your pay decisions.

  4. Tax law is almost certain to change. As specifics are yet to be determined, the best advice is to stay on top of developments. If the country ‘falls over’ the fiscal cliff, it is not your fault, but you will still have to explain why employees’ wages are being taxed at higher rates than they were in 2011 and 2012. More communication will be required.

  5. Benefits will also change, especially healthcare and retirement programs. Very soon, as called for under the Affordable Care Act (“Obama Care”), each state must declare whether it will establish a Health Care Exchange, a sort of electronic marketplace where people can shop for health insurance. Minnesota will implement an exchange, whereas states like Wisconsin and Texas have declared that they will not. This might impact smaller companies which currently provide no or limited healthcare benefits. (Beginning in 2014, mid-sized and larger firms will pay a penalty if they do not provide healthcare benefits.) In the retirement area, more companies are automatically enrolling employees into the firm’s retirement/401(k) plan. Of companies with at least 1,500 employees, half already have adopted this plan feature.

The Chinese proverb “May you live in interesting times.” is truer with each passing day. Whatever you decide as next steps, there are resources and strategies to help you execute. Keep abreast of local pay trends and adjust pay practices as needed to remain competitive. An excellent resource is the 2013 Manufacturing Compensation & Benefits Survey, sponsored by Manufacturers Alliance and MPMA. Surveys are a good source for going pay rates and information on benefit program features. This survey also includes a section on business challenges specific to MN manufacturers and what companies are doing to address them. The 2013 survey is currently being developed – look for your invitation in mid-December and plan on being a survey participant!

Chuck Lindberg is President of Denarius Human Resources Inc. and may be reached at (651)482-8606. Learn more about Denarius Human Resources at - www.denariusinc.com

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Employee Wage Complaints & DOL Audits Continue to Rise

As the high unemployment rate and challenging labor market continues through 2012, Fair Labor Standards Act (“FLSA”) lawsuits recently hit a twenty (20) year high in the federal courts.  Since 2000, FLSA lawsuits have risen by more than seventy percent (70%) from 1,854 in 2000, to 7,064 in 2012.

  In addition, employers have also seen a substantial increase in the number of audits by the U.S. Department of Labor’s Wage and Hour Division (“WHD”).  In Fiscal Year 2011, the WHD collected $224,844,870 in back wages—the largest amount collected in a single fiscal year in the Divisions’ history.  One of the challenges employers face is due to the fact that the FLSA was enacted in 1938 and needs an overhaul to comport with the current economy.  The law and accompanying regulations can be confusing and, without some assistance, compliance can be challenging. 

 Some of the more common wage and hour violations include the following:

  • Failing to pay employees for “all hours worked” including break times, meal periods (if the employee is not relieved of all duties during the meal period), overtime, travel and training time;
  • Allowing employees to “bank” hours from week-to-week in lieu if overtime;
  • Misclassification of employees as independent contractors;
  • Misclassification of workers as exempt and ineligible for overtime;
  • Failure to pay employees proper overtime (including failing to add non-discretionary bonuses into the calculation of overtime for non-exempt employees); and,
  • Violations of child labor laws, including permitting minors to operate hazardous equipment.

To help avoid a wage and hour claim, employers should periodically review and revise all policies relating to pay, classifications, overtime and related wage issues.  In particular, employers should make sure employees are paid for all hours worked (and record all hours worked).  Employers should also audit their workforce (especially frontline and mid-management) to make sure employees are not improperly classified as salaried “exempt” from overtime.  Employers should review their independent contractor relationships to determine whether it is truly a business-to-business relationship.  At a minimum, employers should have a well drafted independent contractor agreement in place.  Employers should also review their bonus plans and use of child labor.  Lastly, employers are required to keep accurate and up-to-date timecards for employees as well as payroll records for at least three years.  These simple steps may make all the difference in preventing (and successfully defending) a wage and hour claim or audit without incurring back wages, fines or penalties, or at least limiting damages.

Gregory L. Peters, is an attorney with Seaton, Peters & Revnew, P.A. whose practice is limited to representing employers in labor and employment matters. Mr. Peters has worked with companies in all areas of employment counseling, employment litigation, labor arbitration, union organizing and labor negotiations. Mr. Peters can be reached at (952) 921-4607.

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MN Manufacturing Economic Outlook

For a fourth straight month, the Minnesota Business Conditions Index slumped below growth neutral. The index, based on a survey of supply managers in the state, dipped to 47.1 from 47.2 in September. This is the first time since the recession that the overall index has been below 50.0 for four straight months.

Components of the index from the October survey were new orders at 36.3, production or sales at 39.3, delivery lead time at 61.9, inventories at 50.1, and employment at 47.9. “U.S. Bureau of Labor Statistics data show that the state lost manufacturing jobs in September even as the unemployment rate declined. Our surveys indicate that Minnesota’s manufacturing sector continued to lose jobs in October. I expect these jobs losses to persist, though at a slight pace, in the months ahead.  Nondurable goods producers, especially food processors are reporting weakness.  Furthermore, I expect the BLS to revise September unemployment rates upward in the months ahead,” said Goss.

Dr. Ernest Goss of Creighton University, used the same methodology as The National Association of Purchasing Management to compile this information. An index number greater than 50 percent indicates an expansionary economy, and an index under 50 percent forecast a sluggish economy, for the next three to six months.

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