June, 2014

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New and Renewing Companies

Advance Corporation
AgilityFirst
Agropur Inc
American Custom Roto
Amesbury Group Inc
Artistic Finishes Inc
Atlas Manufacturing Co
AVEKA, Inc.
Banner Engineering Corp
Baxter-Synovis
Bilfinger Water Tech
Bose Corporation ESG
Boyum & Barenscheer
Brookdale Plastics Inc
Cannon Equipment
CDI - Crystal Distribution
Code Welding & Mfg Inc
Computype, Inc
Cretex Companies Inc
DRI-STEEM Corporation
Eaton Corporation
Ecolab Inc
Flexmation Inc
Foldcraft Company
Graco Inc
Heraeus Medical 
Huot Manufacturing Company
Hutchinson Technology Inc
Intek Plastics Inc
JEM Technical
Johnstech Inc
JunoPacific Inc
Kelby Ergo Design
Lean Culture Inc
Len Busch Roses
Lifeworks Services Inc.
Loram Maintenance of Way
Lou-Rich Inc.
MGS Machine Corporation
Micra Manufacturing
Miller Manufacturing Co
Minnetronix Inc
MnTAP
Nordson Micromedics Inc
North Anoka Control Systems
Orange Tree Employment 
PaR Systems Inc
Phillips & Temro
Plymouth Industries
Precision Inc
Qumu Corp/ Rimage
Red Devil Equipment Co
Rice Lake Weighing Systems 
Robinson Rubber Products 
Savillex Corporation
Smiths Medical ASD Inc
Solar Plastics Inc
Staging Concepts
Star Exhibits & Environments
Susan Edwards
Technical Serv for Elect
Tioga Air Heaters
Travel Products Inc
Turck Inc
Uponor
Upsher-Smith Labs Inc
Virtus Law, Pllc
Wair Products
Water Works Manufacturing
Whirltronics Inc



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Article Index

Lean Leader of the Month-Mary Kay McVey-CES Group
Article by: Mary Kay McVey

Mary Kay McVey is currently the Operations Project Manager with CES Group in Eden Prairie, MN. She has been with the company for the past seven months. 


Money Money Money Makes the World Go Round: Accessing Capital - Part 2
Article by: Don Keysser

In Part 1, we discussed why you may need capital and what some possible sources are. As discussed, the financial markets are edgy (especially the regulated banks) and nervous, but still awash in cash.


Packnet Ltd.: Solving Customer’s Packaging Challenges
Article by: John Hehre

It’s unlikely you will find a packaging challenge the people at Packnet Ltd haven’t encountered yet. Twenty-six years ago, the founders saw a need for quick response packaging and Packnet Ltd was born.


Book Review - "The Invisible Gorilla – How Our Intuitions Deceive Us"
Article by: David Haynes

“I am so clever that sometimes I don't understand a single word of what I am saying." – Oscar Wilde. Simons and Chabris, besides being psychology professors, are perhaps best known for their "Gorillas in Our Midst" study. If you somehow have never heard about it, you should find a quiet place to concentrate and watch their YouTube video about the study.


MN Economic Outlook
Article by: Dr. Ernest Goss

Minnesota: For 18 straight months, Minnesota’s Business Conditions Index has remained above growth neutral. The index expanded to a robust 67.3 from 64.9 in April. Components of the index from the May survey of supply managers were new orders at 76.7, production or sales at 78.3, delivery lead time at 57.0, inventories at 69.8, and employment at 54.8.


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Lean Leader of the Month-Mary Kay McVey-CES Group

Mary Kay McVey is currently the Operations Project Manager with CES Group in Eden Prairie, MN. She has been with the company for the past seven months. 

Brief description of companies product and service offering:
CES Group offers the innovation and expertise of the largest group of custom heating, ventilation, and air conditioning (HVAC) brands in North America for commercial, industrial, or institutional indoor environment. The brands include Mammoth, Venmar, Huntair, Ventrol, Temtrol, Governair, and Eaton-Williams. 

Where did you receive your Lean training/experience?
I received my lean and Six Sigma training from Milwaukee School of Engineering and Northwest Wisconsin Manufacturing Outreach Center.

How, when, and why did you get introduced to lean and what fuels the passion for Continuous Improvement?
My first experience implementing lean manufacturing was at Hutchinson Technology, Inc. in Eau Claire, WI in 2005. Our product groups were quickly expanding and there was not enough time to add an addition to the building or train the personnel needed to run the required units. We had to figure out how to double the number of units utilizing the same number of personnel all while staying within the current footprint of the building. We were able to accomplish this obstacle by first creating a value stream map. From the VSM, we were able to determine that we could eliminate unnecessary quality checks, link equipment together into a continuous flow, add point of use tooling, cross train personnel, reduce setup time, and decrease the change over time from one product to the next. It was very exciting to see how much people were enjoying their jobs because they were part of the change to improve their jobs.

My second experience implementing lean manufacturing was at Uponor North America in Apple Valley, MN from 2009-2013. There were a very limited number of people at Uponor who knew what lean manufacturing was when it was first introduced. Utilizing the Minnesota Partnership Grant that Uponor received, we worked with Dakota County Technical College and Minnesota State University, Mankato to teach leadership skills and lean manufacturing concepts. We started with a value stream map to determine the areas that needed improvement. From 2010 to 2012 we reduced the process time of our product from 14 days to 6½ days, improved overall equipment effectiveness (OEE) by 7.8%; decreased non-value add activities by 19%, reduced variable production cost by 6.3%, and decreased scrap by 9%. Uponor was named Manufacturer of the Year in 2013 by the Manufacturers Alliance. 

What are your current Lean oriented activities?
I am currently an Operations Project Manager who is helping to develop common project management standard practices, templates, and training. I focus on managing operations projects across CES Group with an emphasis on business improvement, process efficiency through automation and related initiatives. I lead cross functional teams with members from multiple business units to move products from one facility to another to better align our resources and build standard products.

What were the lessons learned in leading or training your team on a Lean project?
I have found that first you need to train individuals on the proposed change. The primary focus is first on the executive level. Buy-in from the executive level shows the rest of the organization that the executives believe in the change effort. Next, the training focus should be on managers and supervisors. They need to understand the change and the tools used to implement the change. They are the leaders to the employees on the floor. Change will not be implemented if the leaders do not believe the change will have a positive impact on the organization. In order to be an effective leader or trainer, you need to make sure that the people you are asking to make changes are involved in the process. You have to remember that change takes time and it is OK to make mistakes as long as you learn from them.

What are the next steps in the Lean journey for your company?
CES Group recently opened a facility in Mexico that incorporated lean methodology from the start. They make daily improvements to their lines by incorporating line operators’ ideas. Other facilities have started to implement lean methodologies and have seen an improvement in the quality of product and reduced throughput times. The front offices have started to implement 5S in the common areas and at some work stations.  From a high level view, the parent company will start to standardize products across all companies for ease of manufacturing. New product development engineers will be working closer with manufacturing engineers to ensure the new products can be easily manufactured.

How would you describe peer-to-peer education & training to your colleagues?
In order for transformational change to be successful, the level of employee engagement needs to be correctly ascertained and modified. It is no secret that the level of employee engagement has a significant impact upon the success of any change effort.   Therefore, the employees need to become the leaders and owners of the change initiative. However, the leaders need to have proper training to be successful. This can be done by attending educational seminars led by peers who have had success in implementing changes within their company. This gives leaders the opportunity to see what has or has not worked in other companies. For example, learning from peers who have already implemented a 5S program will help you understand the best method to implement your own program. There are one day training sessions led by peers that teach Lean methods and techniques using different tools that can help other leaders implement change within their own facilities. Learning from a community of peers is one of the best methods of education and training for leaders who desire to implement change.

Mary Kay McVey is currently the Operations Project Manager with CES Group in Eden Prairie, MN. To learn more, please contact her at mmcvey@mammoth-inc.com.

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Money Money Money Makes the World Go Round: Accessing Capital - Part 2

In Part 1, we discussed why you may need capital and what some possible sources are. As discussed, the financial markets are edgy (especially the regulated banks) and nervous, but still awash in cash.

How To Access Capital
I likened the quest for capital to seeing a rain shower a short distance away, while you are standing in the middle of a desert your challenge is presenting your story in such a way that you increase your odds of getting some of that rain.  To accomplish this, here are some of the tools you need to obtain capital.

(a)    Business Plan - A well-structured and clearly articulated BP is an essential tool for convincing lenders or investors that you are a worthy candidate for their money.  This is your platform for informing the financial community of your vision and goal, your strategic objectives and tactical measures, your awareness of competitive forces, your marketing and pricing strategies, the mix of customers and vendors, your technology and product pipeline, the key personnel, and your business infrastructure.  Without this clear statement of who and what you are, you have a relatively poor chance of getting capital; with it, you can now be taken seriously as a reasonable candidate for funding.

(b)    Cash flow Proformas - Part of the BP should be a detailed multi-year cash flow proforma.  It needs to walk a balance between being positive (why fund a company that isn't projecting strong revenues?) yet realistic (no hockey-sticks).  Show detail, by product line, and clearly lay out your underlying assumptions as to costs, prices, product development, and staffing.  More important, show the financial impact of your requested funding: a comparative analysis of sales and net operating income with and without the requested funding, to prove your assertion that the requested funding will take you to new levels of success.  Help the funder understand what you can do with their money.

(c)    Financial Statements - You may be using QuickBooks or PeachTree, but it would be wise to spend the money for an outside CPA firm to, at the least, give you reviewed statements, and preferably (very preferably) audited statements.  You want your funding source to believe your numbers, and internally-generated statements are not usually taken as very reliable.  If you are doing well, prove it.

(d)    Financial Management System - If you want someone to write you a check, show the funder that you have the sophisticated financial management system to track, monitor and report on the use of those funds.  Lenders and investors want to know where their money is going.  Consider upgrading to an Enterprise Resource Management system; the benefits are usually very considerable, beyond just financial management.

(e)    Strong Internal Business Infrastructure - You may be very good at the technology of your company, but it is equally important that you are good at the business of your company.  You need to show lenders and investors that you have a well-structured and competent infrastructure within your company: an effective HR function and policies, up-to-date operations and supply-chain systems, a robust IT system capable of tying together the various components of your company, an imaginative sales and marketing group, and access to legal counsel.  Some of this infrastructure can be out-sourced, but it needs to be an integral part of your regular operations. Disciplined well-oiled machines are successful and get funded; machines in chaos with parts falling off aren't, and therefore don't get funded.

Summary - There is a lot of cash out there, available for debt lending or equity investing.  But these sources are looking for clean 'vanilla' deals, and for companies that are successful, well-organized, and well-focused on their mission.  Approach your funding goals like a military campaign - tighten all the loose bolts, plan carefully, prepare yourself, and you will stand an excellent chance of getting funding.

Good Luck!!

Don Keysser is the Managing Principal of Hannover Ltd., a firm that provides business financing consulting services, M&A services, and capital raising. He works primarily with small-medium size manufacturing and technology companies, and can be reached at don@hannoverconsulting.com, and 612-710-0995.

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Packnet Ltd.: Solving Customer’s Packaging Challenges

It’s unlikely you will find a packaging challenge the people at Packnet Ltd haven’t encountered yet. Twenty-six years ago, the founders saw a need for quick response packaging and Packnet Ltd was born.

Since then the company has provided a wide variety of custom packaging solutions from simple wood boxes and skids to highly customized containers designed for a specific application. The demand for reusable packaging has sparked the company to add this to their repertoire. As the needs have arisen in the marketplace, the company has expanded its capabilities to include CNC routing, die cutting, water jet cutting, and other manufacturing methods.

Packnet’s success is evident in their key principles. Strong design and innovative engineering capabilities are at the forefront of every project. The company understands how experience and long tenure on the design team proves invaluable when faced with difficult packaging challenges. They understand the value of being able to execute on short lead times and reliable delivery is critical in an industry where the product must follow a customer’s timeline; Packnet has been known to respond in less than a day in some cases. Meeting and exceeding cost expectations is another success factor the company values highly. Combined, these attributes have allowed the company to compete effectively in the industry and have resulted in years of systematic growth.

As manufacturing standards go, Packnet’s has some unconventional methodologies. The shop is smaller than you might expect and has much less inventory than expected; their stock of raw material, mostly lumber, sits at one end of the shop. Packnet relies on supplier stock and places orders frequently—usually every two days—to avoid having to keep material on hand. As a result, inventory turns 23 times a year! Work in process moves quickly. A typical order only takes a few hours to complete and the finished product usually moves out as soon as the job is done. Production areas are separated between the nature of the work and the volume of product produced. Scheduling is divided up by cell and each area has its own list of work orders. The systems used to drive the schedule, along with much of the front office work, were developed in house. Scheduling is simple enough that it can be done manually. In short, the company runs very tightly and maintains virtually no excess equipment, space or processes.

A visual representation of the company’s success in light of their organizational efficiencies is displayed along a long wall outside the offices. The VTO (Vision Traction Organizer) display board is one component of EOS methodology the company has adopted and implemented to improve results.

The results are evident in two critical measures: Quality at 98.8%; On-time delivery at >99%. They also boast an excellent safety record.

The work force can be described as very nimble. A cross-training program provides employees the ability to shift between jobs and departments as the need arises. Weekly “scrum” style meetings keep everyone abreast of the workload and priorities of the company. Quarterly recognition for outstanding performance highlights employees and teams for their contribution and features project successes. Whenever possible, the company promotes from within, which creates company loyalty and an increased sense of ownership. The Entrepreneurial Operating System®, or EOS, is attributed with increased accountability, visibility and understanding throughout the firm. The Manufacturers Alliance has played a role in the success of the company as well. Many Packnet employees participate in peer groups and take advantage of Educational Seminars to learn from and network with other companies.

Like many companies, Packnet spends most of its time looking forward and making careful and deliberate plans for the future. While they clearly appreciate the progress they’ve made, they recognize that continuous improvement is a journey and there are always ways to expand and improve.

John Hehre is a senior operations executive and provides interim management and project based consulting to mid-sized private companies in need of transformative change. He can be reached at jhehre@cprocess.com.

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Book Review - "The Invisible Gorilla – How Our Intuitions Deceive Us"

“I am so clever that sometimes I don't understand a single word of what I am saying." – Oscar Wilde. Simons and Chabris, besides being psychology professors, are perhaps best known for their "Gorillas in Our Midst" study. If you somehow have never heard about it, you should find a quiet place to concentrate and watch their YouTube video about the study.

The professors introduce their book with a rather dull quote from Benjamin Franklin about the difficulty of knowing one's self. But since their work is mostly about illusions we don't see in others and don't believe in ourselves, Wilde's view seemed more appropriate.

You have had moments, I'll assume, when you were quite certain you were right and someone else (perhaps everyone else) was wrong. The stories, experiments, and observations in "The Invisible Gorilla" inject some doubt into your self-certainty and, hopefully, give you some different footstools to stand on as you survey whatever your purview – from shop floor to boardroom.

Simons and Chabris's book is built around six "every day illusions." The influence of these illusions is at once profound and largely unrecognized. In their words, "…virtually no realm of human behavior is untouched by everyday illusions."  It is a story of the Wizard of Oz, the man behind the curtain, writ large.

Just for fun I'll list their six illusions. You may think you recognize some but their research shows that you're not very likely to see the illusions at work in your own behavior.

1.    The illusion of attention
2.    The illusion of memory
3.    The illusion of confidence
4.    The illusion of knowledge
5.    The illusion of cause
6.    The illusion of potential

The stories and experiments in this book are just too fascinating and, on occasion, too unbelievable for me to try to recap them for you. I couldn't do justice to them in any case. That being said, I can't resist sharing at least one tidbit with you.

This story is about something called "verbal overshadowing."  In one experiment subjects watched a 30-second video of a bank robbery that included a view of the robber's face. Part of the group of subjects then spent five minutes writing a description of the face "in as much detail as possible." The control group spent five minutes doing something unrelated. Afterward the subjects were asked to pick the robber out of a set of eight photographs of similar-looking people and then indicate how confident they were in their choices.

In the experiment, those subjects who did an unrelated task successfully identified the suspect 64 percent of the time. Those that wrote a detailed description? Only 38 percent of the time. The verbal information in the written notes overshadowed the nonverbal information captured by the initial observation. And the verbal information turned out to be less accurate.

Simon and Chabris assert that deliberation will outperform intuition when you have conscious access to all the necessary data. This relationship between intuition and deliberation is another theme of their book. They provide a more nuanced insight into a lot of the current chatter about "fast" and "slow" thought processes.

The last chapter of their book starts with a profile of a high-profile business leader. Start there, if you wish. But stop after reading the profile and go back to read the book from the beginning – you'll enjoy it more if you don't ruin the story.

In the end, their counsel is to be wary of your intuitions, especially your intuitions about how your own mind works. But they also have a more affirmative message: you can learn to get better at seeing the gorillas in our midst. Make better decisions, maybe even lead better lives.

"The Invisible Gorilla – How Our Intuitions Deceive Us" ©2009 Christopher Chabris and Daniel Simons. Published by Crown Publishing Group. Christopher Chabris is a psychology professor at Union College. Dan Simons is a psychology professor at the University of Illinois.

David Haynes- Owner of Lean4All LLC providing consulting services in influencing change: aligning strategy, IT, process improvement, and organizational communication. David may be reached at david@lean4all.com

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MN Economic Outlook

Minnesota: For 18 straight months, Minnesota’s Business Conditions Index has remained above growth neutral. The index expanded to a robust 67.3 from 64.9 in April. Components of the index from the May survey of supply managers were new orders at 76.7, production or sales at 78.3, delivery lead time at 57.0, inventories at 69.8, and employment at 54.8.

“Despite impressive gains for manufacturers in the state over the past year, Minnesota’s manufacturing sector has approximately 6.6 percent fewer workers today than before the national recession began. Additionally, the manufacturing wage rate has expanded by a weak 1.5 percent from one year ago. Our surveys over the past several months point to solid improvements for manufacturing and the overall state economy for the next three to six months with upturns in wage gains,” 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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