July, 2007

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Article Index

E. J. Ajax: A Fridley Company That Ships Worldwide
Article by: Justin Dorsey
The best way to understand the success of E. J. Ajax is to hear how the manufacturer competes with, and even sells to, economies with low-cost, high-skill workforces such as China and India.
When Fun Turns Into Work! - Implementing an Innovation Plan
Article by: Rod Greder
Why does fun seem to degenerate into work? Whether it's starting an exciting new consulting project, or tending tomatoes in my garden, I soon end up doing it begrudgingly as I force the activity into an already hectic schedule and into my overly cluttered mind.
COMPLIANCE NEWS NOTES: ON THE INSPECTION FRONT
Article by: Vija Kelly
We would like to share with you some recent citations pursuant to an OSHA inspection and the required abatement, so you may avoid similar citations in your workplace.
MN Economic Condition
Article by: Dr. Ernest Goss
For the first time since April, Minnesota's leading economic indicator declined. The index, from a monthly survey of supply managers and business leaders in the state, slumped to 55.5 from June's 59.5 and May's 58.9.
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E. J. Ajax: A Fridley Company That Ships Worldwide
The best way to understand the success of E. J. Ajax is to hear how the manufacturer competes with, and even sells to, economies with low-cost, high-skill workforces such as China and India.

The starting point is that Ajax pays its own workers more than the industry average. There's more. Ajax also commits 5.5 percent of its payroll to paying for its own employees' "formal" continuing education. A condition of employment at Ajax is that one must take at least 100 hours of continuing education each year, every employee, with no exceptions. The payback is incredible.

Whereas "change" is now a constant metric with almost every manufacturer today, Ajax is unique in that change there is driven by the field-force itself and not top management. There is an acute appreciation that "efficiency" translates into profitability. Whereas cross-training is routine at most manufacturers, at Ajax the operators aren't just proficient in more than one machine, they routinely oversee the simultaneous running of multiple machines. Add to this their own active commitment with eliminating or avoiding unnecessary steps such as replacing welded edges with mechanical locks and you get whopping cost-savings - initiated at the grass-roots.

If employee-entrepreneurs are the sizzle of Ajax, the steak is that it takes a healthy workforce to execute these initiatives. And staying healthy at Ajax is a top priority. No employee at Ajax has lost a day of work due to injury for more than seventeen years. Part of this is that Ajax pays special attention to safety equipment. For instance, all new-hires are given safety boots valued at 200 dollars.

Equipment alone, however, doesn't prevent injury. At Ajax, any employee for any reason can arbitrarily shut down a line for safety reasons. More assertively, employees who violate safety procedures are, successively, warned, sent home, and finally terminated. Still, all those procedures cannot guarantee safety. In the end, it is up to the individual to attend to the safekeeping. Ajax credits its great safety record in part due to its insistence on continuing education. Ajax considers that one of the immeasurable side-benefits of its employees involved in ongoing education is their heightened awareness of safety and doing what needs to be done to make things safe.

Education and safety are nebulous - the real question is do they pay off? Or to continue the metaphor, is there proof in the pudding? Yes, is the answer to both questions. Ajax is a sixty-five year-old third-generation family business - so there is lots of historical data to compare. When Vice President/Owner, Erick Ajax, began working in the family business, the cost of labor to finished goods was 75 percent to 80 percent. Today, it's 20 percent. And, that's how Ajax is able to "export" 5 percent of its entire finished goods!

It's interesting to hear Erick describe his own approach to "lean" manufacturing: "We look for 'minutes' of savings. If we can cut five minutes out of a given task - and then multiply that times-savings for every employee - the result can be a huge return on investment."

When he speaks of Manufacturers Alliance, he shares beliefs that permeate the most successful manufacturers: "I am extremely committed to the idea that manufacturing is the very best way of perpetuating a meaningful standard of living for the U.S. middle-class. In today's dollars, I'm talking about earned-income of $50,000 - or more. 'Retail sales' just won't support that kind of income. And, I'm excited about some of the creative initiatives being explored to direct kids in high school into manufacturing. Locally, Dunwoody is an excellent example. I also think that our own model of 'requiring' continuing education is the only way to ensure competitive preparedness. So, I see in the MA a kindred spirit. They 'get it.' We must all stick together or we will all surely hang together."
Justin Dorsey, Director of Sales & Marketing, Advanced Capital Group located at 50 South Sixth Street, #975 Minneapolis, MN 55402. call (612) 230-3009, email jdorsey@acgbiz.com, or visit www.acgbiz.com.

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When Fun Turns Into Work! - Implementing an Innovation Plan
Why does fun seem to degenerate into work? Whether it's starting an exciting new consulting project, or tending tomatoes in my garden, I soon end up doing it begrudgingly as I force the activity into an already hectic schedule and into my overly cluttered mind.

The feeling I get when I disappear in the "flow" of a task I love is replaced with the mindlessness of thinking of the next thing on the list as I mechanically complete the 'chore.'

It can feel the same way when implementing an exciting new innovation strategy in your company. At first it's all shiny and seductive and exhilarating. Then it's time to execute. It's at this point that most companies fail. They crash into hurdles and they lose momentum. They stumble when they don't:
  • communicate the strategy fully to the rank and file

  • accurately estimate the tangible and intangible resources to implement the strategy

  • delegate leadership responsibility appropriately

  • use a formal process and detailed project plan

  • continue to question and refine the vision and plan
Author Larry Bossidy, in Execution, The Discipline of Getting Things Done, says the unglamorous "grunt work" of linking together people, strategy, and operations is what distinguishes winners from losers. This is the real job of running a business.

Compaq Computer had an ambitious technology and retail strategy. The strategy stalled and the execution failed. Compaq eventually was absorbed into HP. Michael Dell understood how to innovate successfully. His direct-sales and build-to-order approach was not just a marketing tactic to bypass retailers; it was the core of his business strategy. The system worked only because Dell executed meticulously at every stage.

A local company spent months and many person-hours developing a new product development strategy to be more competitive. When it came time to train people, rewire processes, and document the new system, most of the team had defected to the next new thing. The system still isn't fully operational after several years.

Is your organization ready to execute? In setting strategy, the best leaders are already thinking ahead to the question of implementation:
  • Is your new strategy aligned with your culture? Is the reporting and operational structure of your company aligned with your new innovation strategy? How will you track progress?

  • Have you built rewards and consequences into your human performance system to encourage strategic behaviors at all levels?

  • Do you have the strength and depth to implement this strategy?
Implementing ("doing") a new successful innovation plan can be vastly rewarding at many levels, externally and internally. Real satisfaction in life comes from "doing" with your mind and body focused together in the same moment. Right now it's time for me to go weed and water my tomato plants. The promise of a juicy fresh tomato has me thinking of weeding as fun again and the warmth of the sun on my back and the bead of sweat on temple remind me of the goodness of work.
Rod Greder, Ph.D. founded Breakthrough Forum, an innovation dialogue and accountability group, for product developers and marketers to tap the collective intelligence of their peers who have been there and done that. rgreder@improveproducts.com, (763)443-1531.

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COMPLIANCE NEWS NOTES: ON THE INSPECTION FRONT
We would like to share with you some recent citations pursuant to an OSHA inspection and the required abatement, so you may avoid similar citations in your workplace.

CITATION:

29 cfr 1910.0151(c) Where employees were exposed to injurious corrosive materials, suitable facilities for quick drenching or flushing of the eyes and body were not provided.

TYPE OF CITATION: SERIOUS FINE: $600

ABATEMENT:
  1. Facilities must be provided so that their sole purpose is to serve as an eyewash or a safety shower.

  2. All eyewash and safety shower facilities must be located so that they are accessible within 10 seconds of the hazard.

  3. The eyewash and shower locations shall be well lit and clearly indicated by signs and directional markings. The paths to the facilities shall be on the same level as the hazard and must be kept clear.

  4. Facilities shall be operable at all times. If shut off valves are installed in plumbed systems, provision shall be made to prevent unauthorized shut off.

  5. The shower must provide a minimum of 20 gallons per minute of flushing fluid at a velocity low enough to be non-injurious to the user.

  6. Eyewashes and showers shall be tested weekly to ensure proper operation.

  7. Squeeze bottles of sterile water or eye flush solution can only be used in conjunction with a properly located eyewash.

CITATION:

29 cfr 1910.303(g)(1)(i): Workspace was less than 30 inches wide in front of electric equipment operating at 600 volts, or less; and

29 cfr 1910.303(g)(1)(ii): Working space about electric equipment rated 600 volts, or less was used for storage.

TYPE OF VIOLATION: SERIOUS FINE: $600.00

CITATION:

29 cfr 1910.3334(a)(2)(i): Portable cord and plug-connected electric equipment and flexible cord sets (extension cords) were not visually inspected before use; and

29 cfr 1910.334(a)(2)(ii): When there was a defect or evidence of damage that could expose an employee to injury, the defective or damaged item was not removed from service until the repairs had been made; and

29 cfr 1910.304(f)(4): The path to ground from circuits, equipment, and enclosures was not permanent and continuous; and

29 cfr 1910.305(g)(2)(iii): Flexible cords were not connected to devices and fittings so that tension would not be transmitted to joints or terminal screws.

TYPE OF VIOLATION: SERIOUS FINE: $900.00

Paying attention to the most minor of details can be important in compliance and ensuring the safety of your workers and workplace.
<img src="http://www.mfrall.com/newsletter/authorpics/vijakelly.jpg"align="left">Hazard Management is a consulting and training firm specializing in occupational safety and hazardous waste management. Call Vija Kelly at 651-697-0422 for more information.

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MN Economic Condition
For the first time since April, Minnesota's leading economic indicator declined. The index, from a monthly survey of supply managers and business leaders in the state, slumped to 55.5 from June's 59.5 and May's 58.9.

Components of the overall index for July were new orders at 54.5, production at 58.0, delivery lead time at 53.4, inventories at 59.1, and employment at 53.4. "Growth in Minnesota for the third quarter will be much like it has been for the first half of this year, healthy but not exceptional. I expect the unemployment rate to remain at it current level of 4.5 percent through this quarter. Food processors are reporting upturns in business activity as computer and electronic-component manufacturers detail pullbacks in activity for July," said Goss. Minnesota currently accounts for 21 percent of regional employment, but will experience approximately 24 percent of regional job growth for the third quarter of 2007.

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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