April, 2016

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Article Index

2016 Manufacturer of Year
Article by: Lynn Moline

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.

Ask The IP Attorney
Article by: Patterson Thuente IP

If you have a burning intellectual property question, you can ask it by visiting the Q&A web page or emailing Tye Biasco at biasco@ptslaw.com.

Michelle’s Temp-To-Hire In Manufacturing Experience
Article by: Brad Janowski

Is your manufacturing company growing? Consequently, are you looking for additional talent to help meet varying production demands?

MN Economic Outlook
Article by: Dr. Ernest Goss

The March Minnesota Business Conditions Index declined to 50.7 from February’s 52.1.

2016 Manufacturer of 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.

Our winners this year are Graco Inc., Sign-Zone, Inc., and MGS Machine Corporation.

Graco Inc.: Established culture embracing change

Anyone who believes all big companies are collections of departmental silos needs to visit Graco in Minneapolis. Ditto for anyone who thinks it’s not possible for an established culture to embrace change.

Celebrating 90 years in business this year, Graco is a billion dollar company with 3,600 employees worldwide. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and spray fluid and powder materials. Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries.

Graco’s rise is a classic story of humble beginnings. On a cold winter day in 1926, a Minneapolis parking lot attendant named Russell Gray got frustrated trying to squeeze thick, cold lubricant from a grease gun. Searching for a better way, he invented an air-powered grease gun that caught on quickly with service stations just as the auto industry bloomed. The Gray Company was born.

Searching for a better way turned out to be an enduring hallmark of the company known today as Graco. Sitting on its laurels is not what made Graco grow. In fact, change and improvement are wired into the culture. According to Manufacturing Operations Director Angie Wordell, the company consistently explores new ideas and technologies to improve productivity and quality of life in the workplace. “We give continuous improvement (CI) awards to employees every quarter. We also invest extensively in new product development, dedicating 4.5 percent of our revenue to research and development.”

That emphasis on improvement spurred Graco to switch to cellular manufacturing and focused factories in the early 1990s. “We operate from a cellular perspective,” said Manufacturing Cell Manager Eric Galush. “Our cell leaders are like managers of their own companies, focusing on cost reductions, quality improvements, and understanding and meeting customer needs. Everything is ROI driven, so when we have an innovative idea and can make a case for it, Graco is supportive.”

One of the good ideas that became reality is a machinist training and internship program to recruit and train highly-skilled employees. Graco partners with local technical schools, forging relationships with instructors and students and sometimes donating equipment so students can learn on state-of-the art machines used in the industry. Interns and new employees receive on-the-job training, rotating through various machines and operations in the dedicated Machine Advancement Cell (MAC). “This program is a significant investment,” Wordell said, “But it has proven to be an ideal solution because it enabled us to develop a solid pipeline of skilled machinists.”

The combination of a CI mindset, ROI-driven cellular manufacturing, and a hunger for new ideas drives the Graco way. “R&D works directly with manufacturing on new ideas. We also have strong relationships with our Design and Marketing teams,” explained Galush. “We don’t like to just hand things over the fence--we work together.”

Two critical forces behind this culture of collaboration, improvement and innovation are a focus on “A-plus customer service” and metrics. “We try to stay in tune with customers, and everyone has an impact,” Wordell said. “We have a measure for everything,” Galush added, easily completing his boss’s thought. “It’s about quality, cost and delivery, and every employee knows his or her measures,” he said. “And those metrics flow into a target goal at the end that’s shared across the company,” Wordell concluded.

To further ensure the focus on quality, cost and delivery, Graco engages, challenges, involves, and rewards employees, and keeps them well informed. Cells hold monthly employee meetings, and President and CEO Pat McHale meets quarterly with all employees. McHale, who started at Graco as a third shift supervisor, makes a point to meet employees during their shifts, even when it means being at a plant at 2:00 a.m. “We work hard to ensure an inclusive culture,” Wordell said.

Meeting CI goals is becoming more challenging, however. “When we started CI in the 90s, improvement came easier, most of it through equipment changes,” Wordell explained. “Now it’s much harder to move the ball.” That’s where participation in the Manufacturers Alliance enters the picture.

Not surprisingly, Graco is generous in sharing ideas and resources with Manufacturers Alliance members and others. Over the past few years, the company has hosted numerous tours, sent dozens of employees to Alliance educational programs, made numerous presentations, and shared knowledge about their world-class processes. They have also participated in Leaders Alliance programs, invited others to use their training facilities, and even provided quiet financial support to Alliance programs.

But while sharing with others, Wordell and Galush insist they receive as much as they share, quite an admission coming from a world-class manufacturer. As an example, Galush said one of his employees heard a surprisingly good idea from a small company. The employee implemented the idea and won an award for it. Wordell added, “We still have a ton of improvement to do, so even just networking helps. And when people tour here, I see our plant through their eyes. It’s like taking my blinders off, and I take their input seriously. It helps us move forward."

Sign-Zone, Inc.: Values that drive the culture

The Manufacturer of the Year Award is just the latest of a long list of honors Sign-Zone, Inc., has earned in recent years. But it could be argued that the very things that earned Sign-Zone this award also helped to fuel the company’s success.

Founded in 1999, Sign-Zone, Inc. is in the visual communication business, manufacturing products for the promotional product, exhibit display, and sign and printing industries. Based in Brooklyn Center, MN, the 360-employee company also has an environmentally responsible manufacturing facility in Ramsey, MN. Sign-Zone distributes its products to resellers under the brand names Showdown Displays and Creative Banner Displays. It also owns Victory Corps, maker of a line of party and parade float decorating supplies which are also offered as officially licensed collegiate products.

Sign-Zone’s array of products is unimaginably wide and ingenious, the result of relentless innovation. (Try an inflatable loveseat imprinted with your logo to entice customers to relax at your trade show booth. Or how about an insulated growler cover emblazoned with your alma mater’s mascot?) Last year alone, the company introduced 80 new products. New product ideas come from employees at all levels who participate in structured three-day innovation events.

Innovation, however, is just one feature that sets Sign-Zone apart from competitors. Another is service, and the company is so committed to it that providing “legendary customer service” is part of the mission. “We aren’t the least expensive, but our products work and we stand behind them with our guarantee—customers are satisfied or we pay,” said President and CEO John Bruellman.

The guarantee flows naturally from the company’s core values: passion for excellence, accountability, respect, innovation, teamwork, and integrity. Many companies talk about their values, but Sign-Zone is driven by them. The values in turn drive the company’s culture and its commitment to industry-leading quality as well as service.

That commitment is paying off. According to Bruellman, who joined the privately held company in 2006, Sign-Zone’s revenue today is “over $50 million and on the way to $100 million,” In fact, every year since 2007, Sign-Zone has earned a spot on the Inc. 5000 "Fastest Growing Private Companies in America" list.

This leads us to those other honors mentioned earlier. In addition to the Inc. 5000 recognition, Sign-Zone has been named one of the “Best Places to Work in Minnesota” for the last three years running. In 2013 and 2014 it was a Minnesota Business Magazine “Manufacturer of the Year,” and it has earned Counselor Magazine Distributor Choice Awards every year since 2012. Furthermore, Bruellman himself was named in 2014 as Executive of the Year by Minnesota Business Magazine.

So what did winning the Manufacturers Alliance “Manufacturer of the Year Award” have to do with Sign-Zone’s success? As Vice President of Operations Brian Rome explained, “We wanted to grow and be scalable, so we focused on improving throughput, capacity, and quality.” Rome previously had been involved with the Manufacturers Alliance and knew its programs. So he and colleagues Janet Bearmon, Vice President of Human Resources, and Steve Durand, Director of Operations, led the charge to get the company on the lean and continuous improvement journey.

They began the journey by promoting employee participation in Manufacturers Alliance learning opportunities. To date:

  • Sixty-five employees--18 percent of the work force--have attended various courses and seminars.
  • Seven employees enrolled in Supervisor Training and Lean Certification.
  • Four Sign-Zone employees participate in Leaders Alliance groups, and Sign-Zone has hosted four Leaders Alliance meetings.
  • Rome serves as an instructor for several lean classes sponsored by the Manufacturers Alliance.
  • Bearmon has been a guest speaker for educational seminars.
  • The company has hosted many benchmarking tours; guests have included Starkey, Tennant, and Target.

“Some of our core values, such as passion for excellence and innovation, lead us to get involved in the Manufacturers Alliance and lean.  We needed knowledge to grow and succeed, and we realized that people all across the company had to be learning constantly,” Rome said. “We also learned that if we share ideas [with other manufacturers] we get good ideas back.”  Durand added, “When we open our doors to others, we establish relationships and do mutual sharing. It’s truly collaborative.”

Sign-Zone is proud to have won the award and pleased with the payback from the collaborative, company-wide learning. “We’re hard on ourselves and we don’t often take a step back to see what we’ve done, but we’ve done a lot. This award snaps that into focus,” noted Durand.

For his part, Bruellman has another reason to be excited about the award: “What I like the most is that I didn’t have to do a blessed thing to win it. Our employees did this on their own; our core values and leadership system allow people to do these things.”

MGS Machine Corporation: A common vision

An equipment manufacturing company with fewer than 100 employees isn’t necessarily expected to have 15,000 installations in 27 countries. But that’s what MGS Machine has. It also has an outsized, positive impact on industry improvement and on people in need.

This remarkable small company, headquartered in Maple Grove, MN, manufactures state-of-the-art packaging automation equipment. Customers use MGS’s custom-built equipment to automatically package a wide variety of products from personal care, household, and hardware items to pharmaceutical and health care products.

Much of MGS’s business is concentrated in the broad life sciences sector. In fact, the company’s customers include 17 of the 20 largest pharmaceutical manufacturers. “I’d like to say we strategized and innovated our way into the pharmaceuticals industry, but that’s not quite how it happened,” chuckled President and CEO Richard Bahr. He explained that in the late 1990s, just after succeeding his father as president of the company, some of his company’s niche markets collapsed. Needing to find a new niche quickly, he stumbled upon pharma.

While finding the new market niche may have been serendipity, Bahr and his staff are decidedly intentional about how they manage the company. “We are very values-based,” explained Bahr. “One of our values is about being passionate experts. We seek and hire people who get fired up about technology and problem solving and collaboration. We thrive on that, so we not only hire for those traits but we also review performance based on alignment with our values.”  It’s not surprising, then, that MGS’s average staff tenure is an enviable 13 years.

The company has also been deliberate about growing and improving the business. For example, Bahr said he first heard of EOS (the Entrepreneurial Operating System) five or six years ago and gave the EOS book Traction to Vice President Mike Verdon. Verdon said he read the book and thought, “There’s nothing new here.” Then Bahr added, “But we realized there’s a gap between what we know and what we do—we’d start things and not see them through.”  So two years ago he and Verdon began leading a gradual, deliberate rollout of the EOS principles.

Another example of the company’s deliberate nature is their approach to growth. “We want to double our business by 2022, but we want to do in a controlled way,” Verdon said. “We’ve weathered some exponential growth and feel blessed, but controlled growth is best. For instance, we like it when our customers ask more from us. That helps us develop new products and learn to apply new technologies that expand our capability and offerings.”

But perhaps the most impressive characteristics of MGS are the way it regards its people and its propensity for giving. Once MGS finds employees whose outlook and performance align with the company’s values, the company works hard to keep them. Along with giving staff members interesting work and challenging problems to solve, MGS prides itself on helping employees maintain a healthy work-life balance. “Years ago we instituted a four-and-a-half day work week year-round,” Bahr explained, “and we have a generous personal time off policy even for new employees.”  Employees value that and say so on the company’s web site. One employee commented, “This culture has been extremely accommodating about the work and home environment.” Another said, “I’ve seen a lot of caring for employees here.”

Another special employee perk is a series of online personal finance management classes intended to give employees a smart perspective on saving, spending, and giving. To encourage participation in the program, MGS gives a $100 gift card to those who complete the course. “I hope we give a card to every employee,” Bahr said. “When you’re generous to people, they give back.”

And give back they do, and not only via hard work. Recently, employee contributions to a charity exceeded the goal by three-fold. Under company sponsorship, employees participate generously in blood drives, food drives, and the adopt-a-highway campaign, among other community-related activities.

Importantly, that giving spirit extends to the manufacturing community as well. MGS and its employees:

  • Author articles for industry publications.
  • Collaborate with OEMs and customers to integrate equipment and technologies in innovative ways.
  • Host regional training events for the packaging industry.
  • Sponsor and host technology fairs.
  • Serve as subject matter experts for local college manufacturing programs.
  • Host and participate in Leaders Alliance groups and share best practices.
  • Provide tours of their operation for many groups.

In addition, a Bahr family endowment funds scholarships to Hennepin Technical College (HTC) students enrolled in technical programs, and Bahr himself lectures at industry events and shares his knowledge with a CEO networking group. Verdon chairs the Leaders Alliance Executive Peer Group and serves as a curriculum advisor for HTC. Furthermore, many employees have participated in Manufacturers Alliance seminars and programs.

All these factors make MGS a truly worthy award winner. As an employee says on MGS’s website, “The leadership here has integrity and a common vision. We feel like the train is going in the right direction.”

Lynn Moline is a consultant, trainer, coach, and speaker who helps companies achieve through effective leadership, planning, and decision making. Contact her at Lynn@molineassociates.com.

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Ask The IP Attorney

If you have a burning intellectual property question, you can ask it by visiting the Q&A web page or emailing Tye Biasco at biasco@ptslaw.com.

Answers to your questions will be posted here in the MA Insider each month. Here is the answer to our April IP law question: 

Q:  A competitor is copying our product and the patent covering it has expired.  Is there anything we can do to protect our product?

A:  Potentially. Trade dress is an often overlooked intellectual property right that can prevent others from cashing in on your company’s innovation by claiming the goodwill developed over the life of the product.

In general, in the absence of a patent or copyright, one manufacturer can copy the designs of another. However, if a product design is either inherently distinctive or has acquired secondary meaning in the marketplace, that design may have enforceable trade dress rights. In addition, colors, sounds, scents, and flavors may also be protectable trade dress if consumers identify a product source by one of those characteristics (think pink for Owens Corning fiberglass).

A product’s design can never be inherently distinctive and must acquire secondary meaning.  In order to establish secondary meaning (distinctiveness) a manufacturer must show that consumers associate its trade dress as the producer of the product rather than the product itself. Having exclusivity to a design via a previous design patent is good evidence of distinctiveness. And trade dress is registerable as a trademark, which provides additional rights and remedies not available under common law trademark rights.

To be enforceable, the trade dress must be non-functional. So aspects of a product that are claimed in an expired utility patent are likely not protectable as trade dress due to functionality. Design patents, however, claim the ornamental features of a product. Therefore, they are strong evidence of non-functionality and allow for continued exclusion of competitors.

To enforce trade dress rights, the owner must show that the similarity of the competitor’s trade dress creates a likelihood of confusion on the part of consumers. The likelihood of confusion is determined not by how many points of similarity exist between the two products but rather whether the two trade dresses create the same general overall impression.

Trade dress enforcement is generally ignored as means of protecting products from copying by competitors after a patent has expired. But under the right conditions, a product’s trade dress can be a valuable weapon against copying.

Patterson Thuente IP is a full-service intellectual property law firm, with offices in Minneapolis and Brookings, SD. Contact them at 612.349.5740.

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Michelle’s Temp-To-Hire In Manufacturing Experience

Is your manufacturing company growing? Consequently, are you looking for additional talent to help meet varying production demands?

Consider partnering with AccessAbility to leverage their temp-to-hire Manufacturing Career and Educational Pathway Program. This program provides career options for talented individuals making the transition from prison back into the community.  Individuals in this program are known for being loyal, hard-working, and extremely motivated to perform.

As an example, meet Michelle…

Michelle was released from prison on a conspiracy for a drug sales charge. She spent her first two weeks struggling to assimilate back into daily life and find a job. Due to her criminal record, companies were very quick to turn her away. After expressing an interest in finding an apprenticeship, Michelle was advised to look into AccessAbility and the Career and Educational Pathways program. Through the program, Michelle was able to find immediate work while she completed trades training, and she received forklift, OSHA-10, and first-aid certifications.

In December 2015, Michelle entered a three-year energy electrician apprenticeship where she is now making $14.63/hour and is unionized. AccessAbility was able to provide Michelle with the training, resources, and confidence she needed to find an apprenticeship that aligned with her interests and future goals.

For more information on how you might find a dedicated employee like Michelle, please contact Brad Janowski at (612) 852-1805 or bjanowski@accessability.org.

Brad Janowski is the Director of Career and Educational Pathways at AccessAbility. He can be reached at 612-852-1805 or bjanowski@accessability.org

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MN Economic Outlook

The March Minnesota Business Conditions Index declined to 50.7 from February’s 52.1.

Components of the index from the monthly survey of supply managers were new orders at 53.5, production or sales at 50.6, delivery lead time at 50.9, inventories at 52.1, and employment at 46.2. “Since the beginning of the recovery in 2009, Minnesota’s manufacturing sector has added almost 17,000 jobs while output per worker has expanded by approximately 10.4 percent, fourth highest among the nine states. Thus, the state would have added even more jobs had output per worker remained at its 2009 level. Creighton’s surveys over the past several months point to an expansion in manufacturing output, but with the number of manufacturing jobs remaining flat for the next three to six months,” 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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