April, 2010

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New & Renewing Members
Thank you to all the new and renewing members for helping the Manufacturers Alliance accomplish its mission of sharing education and resources peer-to-peer.

C.A Moore & Associates
CIM Software
Control Assemblies Co.
Delta Fabricating Company
Donatelle Plastics Inc.
Dynamic Group
General Label Inc.
General Mills
Heraeus Medical Components
KEB America Inc.
Lakeland Engineering Equipment
Loftware Inc
Nahan Printing Inc.
Ostbye & Anderson
Perceive Medical
Precision Associates Inc.
Quazar Capital
Railway Equipment Co.
State of MN Dept of Admin
Tennant Company
Waterous Company
Waymar Industries Inc.

Manufacturer of the Year Platinum Sponsors
Thank you to the Manufacturer of the year Platinum Sponsors. This years event was one of the best we have ever had!

PAR Systems
PaR Systems provides specialized material handling and automation equipment to many industries, including aerospace, defense, environmental, food and beverage, heavy material handling, industrial manufacturing, and life sciences. From remote manipulators for the nuclear industry to robotic drilling, milling, routing, waterjet cutting, and material handling applications, PaR focuses on large scale as well as small high-precision equipment and systems for critical customer applications.

Pentair Technical Products
Pentair Technical Products, a Pentair global business unit, is the leading provider of worldwide product and service solutions for enclosing, protecting and cooling electrical and electronic systems. Its industry-leading brands—Hoffman®, Schroff®, McLean® Cooling Technology, Calmark™, Birtcher™, Aspen Motion Technologies™ and Taunus™—provide a broad variety of standard, modified and custom solutions to the commercial, communications, energy, general electronics, industrial, infrastructure, medical, and security and defense markets.

Manufacturing Success
Manufacturing Success (MS) is the largest regional manufacturing information community resource for small and medium size manufacturing companies. Supporting the growth and success of non-profit associations is one of MS’s primary goals along with directly supporting the success of manufacturing companies and educational institutions. MS is fully funded by vendor partners allowing shops, educational institutions and non-profit trade association free access to great resources and marketing.

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U.S. Rep Erik Paulsen visited Diversified Plastics
(Minneapolis, MN – April 12, 2010) U.S. Rep. Erik Paulsen, of Minnesotaʼs Third Congressional District, visited Diversified Plastics, Inc. in Brooklyn Park, Minnesota on Friday, April 9. The purpose of his visit was to learn about the challenges affecting small businesses and discuss business issues directly with senior management and shop floor employees.<br> <br><img src="http://www.mfrall.com/attachments/0000/2905/US_REP.jpg"><br> <br> Paulsen participated in an informative round table discussion with the management team followed by a plant tour and an informal question and answer session with company employees covering topics ranging from the medical device tax to health care legislation and the economy. First-term Congressman Paulsen is the co-chair of the House Med Tech Caucus and as co- chair, he learns about advances in medical technologies and meets with industry leaders on a regular basis. “We were excited for the opportunity to share our views with Congressman Paulsen on topics important to small manufacturers. He was very interested in our needs and it was very apparent he was familiar with manufacturing and understands our concerns,”  said Annette Lund, vice president, Diversified Plastics. “He encouraged us to stay involved with our legislators so our opinions will be heard.”

MnTAP's Eight interns gear up for summer projects
This year, interns will be investigating energy efficiency and waste reduction measures for eight Minnesota companies. The interns will be responsible for developing effective solutions to help their facilities save costs, reduce regulatory compliance burden, and decrease environmental impacts.<br> <br> The MnTAP intern program has been successfully completing projects for businesses for 25 years. Over the past four years, MnTAP interns have helped participating businesses realize savings of over $1.2 million from implemented solutions. These companies have cumulatively improved their environmental impact by reducing over 60,000 pounds of waste, 23 million gallons of water, 13.4 million kWh, and 167,000 therms.<a href="http://www.mntap.umn.edu/source/2010-1/Interns.html"Learn More</a>

Article Index

2010 Manufacturer of the Year Winners
Article by: Justin Dorsey

Large Company: Toro - “There’s no doubt that ‘Lean’ was and is a journey, and involves adjustments to an existing culture.  Luckily, Toro’s culture of strong people and performance values was already a good foundation to build a Lean Enterprise upon. 

Technical Plating Reduces Water Use, Avoids SAC
Article by: MnTAP

Technical Plating, a small metal finisher in Brooklyn Park, specializes in the application of tin, tin-lead, and electroless nickel coatings on parts, a process that requires a significant amount of water. Between 1998 and 2001, the facility’s water consumption went from 40,500 to 54,000 gallons per day.

Employee Assessment Tools – What you need to know!
Article by: Patricia Darke

Could employee assessment tools really help a company with their bottom line?  The answer is simple –ABSOLUTELY!  It’s no secret that employees are the key to every successful organization, but they are also the biggest expense.

MN Economic Outlook
Article by: Dr. Ernest Goss

For the month of March 2010, reported April 1, 2010. Minnesota's leading economic indicator, based on a survey of supply managers, was higher for March.

2010 Manufacturer of the Year Winners

Large Company: Toro - “There’s no doubt that ‘Lean’ was and is a journey, and involves adjustments to an existing culture.  Luckily, Toro’s culture of strong people and performance values was already a good foundation to build a Lean Enterprise upon. 

We in the CI group easily found traction across the diverse operations and businesses in a short period of time. This was a key factor in speeding our transformational improvements.”  That’s Kirt Williams, Toro’s Continuous Improvement Manager. 

Kirt went on to make an interesting observation about the difference between a ‘Lean Manufacturing’ and a ‘Lean Enterprise’ implementation.  "Many companies just focus on Lean in their plants and miss out on the huge opportunities for improvement that exist beyond the 4 walls of their plant.  We launched Lean in the office concurrently with the launch in our plants.  We got our business leaders to begin looking at their extended value streams at a very early stage in our implementation.  It has taken repeated exposures, extensive training and learning from our mistakes, but today Lean permeates the culture at Toro as well as the cultures of many of our Distribution and Supply Chain partners.   It’s not just an initiative – it is part of who we are.  As an example, if you read our publicly available 2009 Annual Report, you’ll see over 50 references to Lean, DFMA and/or Continuous Improvement compared to ‘zero’ references back in our 2003 report.  We’re in the enviable position of having support from the very top and across our organization.”

One example of Toro’s Lean Enterprise approach has been their work on Lean product development.  Today, one of Toro’s goals is to have 35% of its sales revenue come from new products.  As Kirt says, “How are you going to do that if you’re not Lean all the way back into the design and development process?  The answer is, you can’t.  Lean makes it possible.  Think of it.  Common libraries of parts, quicker testing, quicker turnarounds.  All of that is the lexicon of Lean.  Our niche is high-quality commercial and residential turf care products and precision irrigation systems.  And, our brands have strong customer loyalty.  Lean has enhanced the loyalty equation by adding speed to market, delivery performance and overall value to our existing reputation for innovative products.”

Asked why he thought Toro won the award, Kirt said “I think it’s because we try to be a good ‘corporate citizen’ by sharing the good and the bad from our Lean implementation experience and by sharing the skills of our Lean resources.   This too is a part of the Toro culture – sharing is part of who we are.  We’ve come a long way on this journey and we know it’s an unending one.  Still, it’s nice to be recognized along the way.”

Mid-size Company: Johnson Screens - “The bane of manufacturing is the bottleneck – and it’s true for Lean too.”  says Joe Ziskovsky, Director of Operational Excellence at Johnson Screens.  “Complacency just doesn’t work in manufacturing.  But that’s a good thing.  It keeps you on your toes.  We’ve done a good job of creating a Lean environment  and we’ve gotten good support from our executive staff.  We took advantage of last year’s slow-down to involve ‘engineering’ in the Lean process too.  We asked them to begin the process of cross-referencing parts and to see whether different finished goods could be assembled from standardized components.  We didn’t expect wholesale compatibility – but the results were still better than expected.  At least for now, it was kind of the last unexplored frontier of our Lean journey.”

Why did Johnson Screens win the award?  Joe says, “There is a deeply embedded culture here of peer-to-peer learning and sharing.  We belong to a number of professional associations – and are active in all of them.  But the Manufacturers Alliance is by far the most organized when it comes to tours.  We’ve benefited greatly from them – and we’ve tried very hard to reciprocate.  At times, I’m even kidded about it.  Internally, our executive staff has done a wonderful job of supporting our Lean journey.  We even have a formal Lean-Support-Office, or LSO, which oversees three Lean tiers: individual ‘Opportunities-For-Improvement’, A3 undertakings which are formally presented by a team, and Kaizen events which can involve more than one team and have formal 30/60/90 day follow-ups. We’ve also taken Lean into the front office.   Now as I look out, I see lots of places where tweaks can be made.  I’m happy to report that Lean is truly deeply engrained in the manufacturing culture at Johnson Screens.”   

Small Company: Western Graphics - “Joining the Manufacturers’ Alliance helped us see what we don’t know – and it’s usually what you don’t know that hurts you.”  That’s Tim Keran, President of Western Graphics.  That frankness and humility is at the core of their success.  “We’re committed to being an ‘open-book’ organization.  We’ve just found that for us we get more back, much more, than whatever we might possibly give up by sharing.  Here’s how we see it: no one needs ‘more’ stress in their job.  So, let’s be open and sharing – and try to have some fun while doing good work.  At least for us it has worked.” 

At Western, each year has a new theme.   This year, it’s Treasure Island.  Last year, it was Survivor and the year before it was Mission to the Moon.  Staff is divided into teams that are asked to submit continuous improvement challenges, and then compete for overcoming them.  The warehouse is dressed up in the theme and there’s even a wheel of fortune with an assortment of prizes.  More substantively, cash profit-sharing distributions are made at the end of each quarter. 

Western’s “Lean” journey began three years ago.  Like other successful examples, it has buy-in from the executive staff.  As Tim explains, “We expect a lot from our people.  Today, the printing world is all about speed and quality control.  That’s a tough combination.  We need people – everyone from the top down – to be engaged.  Our five core values are, speed, excellence, attitude, trust and teamwork.  They probably add up to some sort of Lean definition.  The point is, to fulfill our core values, people who work here have to affirmatively want to make continuous improvement.  And, our people genuinely do.  What we’ve come to discover is that continuous improvement makes for a more stimulating work experience.  Our attempt to add a culture of fun just adds to that experience.  The result is that we have very little turnover.”

Does the ‘culture’ result in any sort of measurable bottom-line success?  “Absolutely,” Tim says.  “By any metric, we’ve experienced improvement since initiating Lean.  Take last year, for example.  Everyone could see it was going to be a tough year.  We decided to take advantage of the slow down to try and reduce our quality defects.  We set a goal of reducing them by 30% - concededly a high hurdle.  But, we did it.”

If the internal results have been dramatic, is that enough to win the award?  Tim says, “When we started our Lean journey, we had nothing to share.  Early on, we felt like we were taking, taking, taking. As our processes became leaner and more successful, we began to believe that we too had something to share.  And, that’s a good feeling.  Today we host as many tours as we go on.  That leveling really makes us feel like we’re part of a camaraderie.   And, to give a plug for the MA – that’s the value of its peer-to-peer sharing: what you get is a direct reflection of what you give.”

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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Technical Plating Reduces Water Use, Avoids SAC

Technical Plating, a small metal finisher in Brooklyn Park, specializes in the application of tin, tin-lead, and electroless nickel coatings on parts, a process that requires a significant amount of water. Between 1998 and 2001, the facility’s water consumption went from 40,500 to 54,000 gallons per day.

This increase prompted the Metropolitan Council Environmental Services (MCES) to charge the company a one-time sewer access charge (SAC) of $56,000. Therefore, the company became interested in reducing water use to avoid those fees and save money.

The company believed that water reuse and increased rinsing efficiency could help reduce water use. An intern from the Minnesota Technical Assistance Program (MnTAP) was brought in to investigate the feasibility of and the water and cost savings associated with those options.

Water Reuse

One area where water could be reused was from the rinse stages. Wastewater from this operation was already being treated to remove metals and adjust pH in order to meet MCES specifications. Therefore, the intern investigated if the treated effluent could function effectively as rinse water. After testing the effluent used as rinse water, the company learned that the parts rinsed with the treated wastewater did meet adhesion and solderability specifications. However, due to the murky color of the effluent, some appeared cloudy after being rinsed; this effect was nullified by mixing effluent water with an equal volume of fresh water.

Once the wastewater was approved for reuse, Technical Plating needed to install a sand filter and two holding tanks to facilitate the reuse. One tank re-circulates the water through the sand filter for one or two hours, and the second tank holds the filtered water until it is needed for rinsing. Cumulatively, the system cost Technical Plating $5,200 to install and $800 to operate annually. However, by reusing the wastewater, the company reduced water use by 5,500 gallons per day, and saved $3,800 annually and $23,100 in one-time SAC fees.

Rinsing Efficiency

Technical Plating also wanted to improve the efficiency of parts rinsing. The MnTAP intern measured the flow rates of the rinses and noticed that the flow varied significantly between plating lines and between days on the same line. The discrepancy was partially due to the use of ball valves to control the flow, which were not effective. Water was entering rinse tanks at the bottom, which prohibits operators from seeing the flow, plus there was no incentive for operators to eliminate unnecessary water use. To remedy the situation, Technical Plating installed three flow meters on one line at a total cost of $450. After limiting the flows, the company reduced its water use by 5,000 gallons per day and saved $4,100 in water costs and $21,000 in one-time SAC charges.

Overall Results

Overall, the MnTAP intern made recommendations that helped Technical Plating reduce annual water use by 2,625,000 gallons and save $7,100. Additionally, the company avoided paying $44,100 in one-time SAC fees.

MnTAP has a variety of technical assistance services available to help Minnesota businesses implement industry-tailored solutions that maximize resource efficiency, prevent pollution, increase energy efficiency, and reduce costs. Contact MnTAP at 612.624.1300 or mntap@umn.edu for more information.

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Employee Assessment Tools – What you need to know!

Could employee assessment tools really help a company with their bottom line?  The answer is simple –ABSOLUTELY!  It’s no secret that employees are the key to every successful organization, but they are also the biggest expense.

On average, corporations spend 36 percent of their revenue on human capital.[i]  Maneuvering blindly through the hiring process can be very costly if the wrong person is chosen for the job.  Finding the right fit is not always easy, and this is where the right set of assessment tools can help an organization shine. 

Did you know that 63% of all hiring decisions are made during the first 4.3 minutes of an interview?[ii]  To help prevent this potentially costly error, an assessment tool gives the hiring manager consistent, in-depth, and objective information about the person, allowing them to make the best possible decision and navigate through roadblocks in the hiring process.

A person’s behavior is similar to an iceberg—about ninety percent of behaviors are explained by factors that, on the surface, cannot be easily observed or understood in a meaningful context. Additionally, candidates have a tendency to embellish their qualifications.  Statistics on this are staggering, 30% of job applications contain false information.  Another startling fact – employee theft and fraud averages $9.00 a day per employee! That’s about $2,000 per employee subtracted from your bottom line every year. Without advanced training in psychology, many of these behaviors are difficult (if not impossible) to detect.  Valid assessments can uncover truthful information about the employee in a very cost- and time-effective manner.

With more than 2,500 assessment tools available today, how do you select the right one(s) for your organization’s needs?  There are tools to help a manager understand their own management and communication style, tools to identify star employees, tools that help identify employees to be removed or retrained to match company goals, tools that can help with performance metrics, and much more.  One particular survey provides valid insight into an applicant’s work ethic, reliability, integrity, propensity for substance abuse, and attitudes toward theft —including property, data and time.

That being said, it is important to stress that there is not a one-size-fits-all tool. The world has changed and so has the world of assessments.  They are customized to job-fit and benchmarked around it. At the very least, consider a full range survey tool with job matching.  A job-match benchmark measures your best performers in certain positions to get a statistically significant range for each position, delivering ROI almost immediately if you get the benchmark right.

In a case study of a manufacturing division with $1 million in annual sales, a benchmark was created within the sales team using top sales performers.  Based on the findings from the benchmark study, some employees were reselected and others were coached, but there were no additions made to the sales team.  Within one year, annual sales increased 12-fold to $1 million per month.

Over 40% of companies today use some variation of assessments.  The most reliable surveys (called “normative”) reflect the whole person, based on a large population base; as opposed to DISC-based tools that are behavior-based only and one-dimensional.

Regardless of the assessment tool utilized, it should be EEOC-compliant with a reliability index of .70 or higher for all businesses.  The tool should be easy to understand, affordable, culturally significant, user-friendly, virtual (it is an e-based world), and deliver data that translates clearly into the information necessary to make well-informed candidate decisions.

Let's illustrate successful utilization of assessment tools using a company in the mortgage banking industry. As a result of the recession, mortgage banking was among the hardest hit industries.  In 2007, one company had a 90% turnover rate. With a tool that selected top employees to create a benchmark, they used that information in hiring and development of current employees.  Turnover went down to 71% by the end of 2008 and to 41% by 2009.   During this same time period, the company saw a 65% growth increase from 2.45 billion in 2008 to 5.45 billion in 2009.

Gathering the right mix of people is a challenge for any company – it is like planning the perfect party, you know it when it happens.  Assessment tools increase employee performance, improve employee motivation, productivity and communication, provide leadership training and development, and reduce turnover.     

Finally, choosing the right Consultant is critical.  Since there is no one tool that will solve all the needs of an organization, the right Consultant will quickly understand business objectives and human capital issues, assist with both in a timely fashion and apply the solutions correctly.  The Consultant should have a well-rounded business background, with excellent communication and training abilities to be able to help the CEO, the Leadership Team and Human Resources achieve their goals.

 Expect the best out of the tools and the Consultant that delivers them!

[i] Mercer/CFO Magazine

[ii] SHRM Study in USA Today

Patricia Darke, of Darke & Associates has over 30 years of business experience and is trained in over 140 business and assessment tools. www.darkeassociates.com is her website and she can be contacted at pdarke@darkeassociates.com. Office: 612-866-0692, Mobile: 612-743-7998

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MN Economic Outlook

For the month of March 2010, reported April 1, 2010. Minnesota's leading economic indicator, based on a survey of supply managers, was higher for March.

The Business Conditions Index climbed to 62.5 from a “revised” 62.3 for February and 51.4 for January.  This was the eighth straight month that Minnesota's index has risen above growth neutral, pointing to expanding economic conditions for the first half of 2010.  Components of the overall index for March were new orders at 75.5, production, or sales, at 73.8, delivery lead time at 63.4, inventories at 43.9, and employment at 55.8.  “Based on our survey of supply managers in Minnesota over the past several months, I expect job gains for the first and second quarters of 2010.  However, the increases will be somewhat modest with unemployment rates remaining above 7 percent for the rest of 2010 as discouraged workers re-enter the work force,” 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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