Manufacturers are underway with processes to help them better compete globally, which includes looking beyond manufacturing practices to transitioning the entire operation. Imagine your manufacturing workforce working under a continuous improvement culture (think lean), where employees all are held accountable for what happens, as opposed to a command and control operation where the top dog tells everyone else what to do. And imagine that shift in the manufacturing culture, where the workforce is operating the equipment and taking on more responsibility, increasing throughput by 40 percent during a seven-year period of time, such as was the case for one Indiana manufacturer of hydraulic valve manifolds.

This scenario is unfolding in manufacturing plants across the country. In the Dakotas, the Dakota Manufacturing Extension Partnership (MEP), part of the national MEP system, is not too much different than the national program, assisting manufacturers with continuous improvements, lean enterprise activities and sustaining those commitments. “We have taken a slightly different slant where we are working on helping manufacturers build their internal capacity so they do not have to rely on external or third-party resources,” says Randy Schwartz, CEO, Dakota MEP, which serves manufacturers in both North Dakota and South Dakota.

The Dakota MEP, working with partners, has developed a lean enterprise certification program. The partners developed the program with the manufacturing community; therefore, the training is spread out across three months so the training accommodates manufacturers' schedules, as they can't afford to send people away for two to three weeks for training. The pilot program began in June 2006, and has instructed more than 40 of the “more progressive companies in the Dakotas,” Schwartz says.

The training is focused on areas where companies have determined they have a need, based on value-stream maps to identify which lean tools they should work with. The training has attracted people from throughout a manufacturing enterprise, from company presidents to floor supervisors. “By doing this throughout the enterprises we are helping them with continuous improvement, about how to apply lean principles to their operations,” Schwartz says. “By the time we get done, hopefully, the companies are better positioned then they would otherwise be to support some of their improvement activity.”

For the Indiana hydraulic valve manifold manufacturer, Daman Products Co., Inc. in Mishawaka, Ind., the focus of looking beyond the manufacturing process, and involving the entire company and all the processes within, has created a continuously improving organization.

The people building the parts assume more overhead responsibilities and are actually more productive, says Larry Davis, president, Daman Products. “It goes to point out how much waste there is in traditional companies in their processes. And unfortunately, things like forecasting and MRP drive that waste. We no longer forecast and our on time percentage is around 98 percent to 99 percent.”

Davis likes to use the term continuous improvement culture as opposed to lean because lean can turn off people because they have decided it isn't for them. “It is difficult to run away from the concept of being a continuously improving organization,” Davis says. When Daman Products followed a command and control process, no one took responsibility for anything — it was always someone else's fault. For example, if material was late, that was the purchasing department's fault or the vendor's fault.

By giving the employees responsibility, along with the tools and training to function in this environment, they have learned to be responsible for everything that happens in their “cell,” Davis notes.

By operating in four self-sufficient cells, Daman Products has created mini-businesses within the company. A cell's employees schedule their own products, they buy their own material, they receive it, they conduct the preventative maintenance on their machines, and they inspect and calibrate the machines. The company features 112 employees, and has operated in three shifts since 1989.

“What we look like today is a much flatter organization,” Davis says. “We have a president and vice president, but we no longer have an operations manager, a manufacturing vice president and so forth.” Davis says the firm is unique in the fact that it wants a company full of leaders. He would be happy to have 112 leaders. “In a traditional command and control, you don't have too many people leading,” Davis notes.

“In this environment, the employees are totally accountable, responsible and take initiative and that makes us an incredibly difficult force to compete against,” Davis says. “If we buy a big piece of equipment, which we did two years ago to enter a larger manifold market, its gives us a competitive advantage until someone else buys one.”

Davis says the concept of continuous improvement has to have business reasons for doing it, and for Daman Products it is to “wow” the customers, understanding what they need and doing more than what they expect or need. “It makes our ability to deliver product more seamless and more helpful.”

The Only Constant Is Change

The transition didn't happen overnight. The shift to the continuous improvement culture at Daman Products happened slowly, and took a lot of persistence, because naturally, people are resistant to change. Davis says the leadership of a company, whether they are stockholders or private owners, has to be on board and believe in the change to the soles of their feet. The leadership also has to be supportive and truly understand the process they are about to undertake.

“I think CEOs will tell you about the quality of the workforce, but in practice we have a lot of people in middle management that are the challenge,” Schwartz notes when discussing companies' reactions to implementing continuously improving cultures. “We find, and this is not just in the Dakotas, that the very people that we need to provide the leadership are oftentimes the obstacles. It is not so much the people on the frontline that don't accept change, as long as they understand it is for the good of the organization.” He notes the resistance comes from those that might find themselves threatened because they are part of an organizational structure that might be eroding.

These challenges can and will be overcome; however, for companies who are willing to make the changes in order to better compete. This also includes looking outside of traditional markets in order to diversify product offerings. In Wisconsin, paper-making equipment technologies can be applied to the wind energy industry. In northeastern Wisconsin, 23 percent of the workforce is involved in manufacturing, with the manufacturing prowess in process or engineered designed products, such as transportation and equipment and paper converting industries. “They all evolved with first and second tier suppliers that were distant machine builders, building either process controlled equipment for the paper industry or engineered products and components that served OEMs,” says Jerry Murphy, executive director, New North, Inc., which markets 18 counties in northeast Wisconsin as ideal business destinations.

Murphy says this cluster of support services is used to manufacturing highly engineered, large in terms of dimension, products. Economic development officials found that a few of these companies were involved in manufacturing products for the wind energy industry. Activities include building the housing that surrounds the mechanical workings of the turbine; manufacturing rings that support some of the tower's structure; and companies conducting engineering around testing the components or in terms of the machine design itself.

At this early stage in the repositioning of some of this manufacturing to the wind energy industry an advisory group has been formed from roughly 20 companies, which is advising the New North officials on how to develop the selling proposition based on the supply chain. “We want to double this list, and in the course of doing that, the range of offerings around components and capacities consumed by the wind industry will grow,” Murphy says.

Moving north of the border, to Windsor and Essex County, Ontario, the manufacturing workforce is historically based in the auto industry, given the fact that the area's immediate neighbor is southeast Michigan. The region is home to production facilities for the Ford Motor Co., General Motors and Chrysler, and a number of Tier I and II auto suppliers. Officials realize that the latest downturn the OEMs are experiencing, which is cascading down to the suppliers, isn't cyclical as in the past, but is more structural.

“We have moved up the value chain, putting more emphasis on auto research, development and design and systems process engineering, and systems design,” says Matt Fischer, CEO, Windsor-Essex Development Commission.

An example of moving up the value chain is Valiant Machine and Tool, which designs robotic assembly lines for Chrysler. The firm sets up the assembly lines, tests them, runs them, dismantles them and then reinstalls them in Chrysler's facilities.

Chrysler and the University of Windsor are collaborating and conducting auto R&D at a 250,000-square-foot facility. They are conducting a variety of research at the center, which will be proprietary to Chrysler. The university has also announced a new $110 million engineering and innovation center. Fischer says the government of Ontario has committed $40 million to the project. “The center will have an emphasis on auto engineering, and in fact, we are one of the few programs that actually offer a Ph.D. in auto engineering,” Fischer says. The area is also home to a Ford Centre for Excellence in Manufacturing at St. Clair College, where rapid prototyping occurs.

Fischer points out that on the engineering and design side, much of the activity is done on the shop floor. “A unique facet here is that we are home to half of all of Canada's mold makers in our backyard, which spun out of the auto industry,” Fischer says. “Ninety-three percent of these firms' business is in auto.”

The area's economic development officials and mold makers' associations are helping these 260 companies, most small or mid-sized companies, to diversify into the aerospace, medical devices, nuclear and energy sectors.” A study has been developed to help these firms identify market opportunities. The second phase of the activities will be direct support to individual companies to order to develop marketing plans.

“We are also underway with a study to inventory in a database our R&D assets and unique capacities in Windsor and Essex County,” Fischer says. “One mold maker, for example, has high degrees of precision because they do the lenses for auto lighting, so the angles have to be precise, and the polishing has to be immaculate.”

Back in the United States, the Pocatello, Idaho, region features a metal fabrication cluster, which includes SME Steel, Eaton Metal and Virginia Transformer, writes Gynii Gilliam, executive director, Bannock Development Corp., in an e-mail correspondence. This cluster base is attractive to like-minded companies. For example, Petersen Inc., which will be manufacturing wind towers for the wind energy industry from the region, is also an advanced metal/steel manufacturing firm.

The company is a part of regional economic development officials plans to develop clusters in alternative energy and medical devices. Hoku Materials, a division of Hoku Scientific, Inc., selected Pocatello for its new polysilicon manufacturing facility, which will produce products for the solar industry. IsoRay Medical, Inc. will produce Cesium-131, a radioisotope used in the treatment of cancer. Gilliam says both Hoku Materials and IsoRay Medical will be operational by the fourth quarter of this year.

Gilliam notes that the partnership between her organization and Idaho State University, and its College of Technology, provides access to strong educational opportunities for manufacturing firms. “Pocatello has a highly trained workforce that supports both new companies moving into the area and local business expansion,” Gilliam notes.

For complete details on the organizations featured in this article, visit:

Bannock (Idaho) Development Corp., www.bannockdevelopment.org

Dakota Manufacturing Extension Partnership, www.dakotamep.com

Daman Products Co., Inc., www.daman.com

New North, Inc., www.thenewnorth.com

Windsor-Essex (Ontario) Development Commission, www.choosewindsoressex.com

Wisconsin Switches Gears

When the New North, Inc. began conducting an evaluation of the manufacturing capacity in northeast Wisconsin, these economic development officials discovered that 23 percent of the workforce was involved in manufacturing activities; whereas the national average is somewhere near the mid-teens, says Jerry Murphy, executive director, New North. “It was a significant discovery in terms of having this labor pool highlighted,” he says.

The organization also discovered that the primary manufacturing activities conducted in the area were centered on engineered designed products and/or process controlled equipment to support paper-making OEMs in the region. “This discovery, in terms of casting our manufacturing profile, is that it was easy to identify capacity rather than products,” Murphy notes.

Economic development officials believe that capacity will allow manufacturers to participate in the manufacturing of components that would be used in the wind energy industry. In fact, some firms were already doing so. There are also companies, such as foundries, machine shops, electronic components and control panel companies that are evaluating their potential to serve the wind energy industry.

“These companies wouldn't have to really change anything in regard to their capacities, just absorb an appreciation for a new growth industry,” Murphy notes. “It is basically repositioning the advanced manufacturing of the area to serve multi-markets beyond the paper industry.”

To learn more about the emerging supply chain cluster for wind energy components in northeast Wisconsin, visit www.thenewnorth.com.

Manufacturing

Based on number of establishments

Startups

1.      California

2.      Texas

3.      Florida

4.      New York

5.      Michigan

6.      Illinois

7.      Ohio

8.      Washington

9.      New Jersey

10.  Pennsylvania

New Branches

1.      California

2.      Texas

3.      Illinois

4.      Florida

5.      Michigan

6.      New York

7.      Georgia

8.      Pennsylvania

9.      Ohio

10.  North Carolina

Data includes the following SICs:

43-000 Food products 

43-100 Tobacco products       

43-200 Textile mill products     

43-300 Apparel           

43-400 Lumber and wood products     

43-500 Furniture and fixtures   

43-600 Paper products

43-700 Printing and publishing  

43-800 Chemicals and allied products  

43-900 Petroleum refining and related  

44-000 Rubber and plastic products     

44-100 Leather and leather products    

44-200 Stone, clay, glass and concrete products          

44-300 Primary metal industries           

44-400 Fabricated metal products        

44-500 Industrial and commercial machinery and computer equipment  

44-600 Electronics (except computer equipment)                                             

44-700 Transportation equipment                                             

44-800 Instruments                                          

44-900 Miscellaneous manufacturing    

Source: Since 1990, BizMiner has built its reputation on quality research in the fields of economic and business development. The company tracks more than 12 million U.S. businesses annually, developing vitality benchmarks and reports on more than 16,000 lines of business in every U.S. county, MSA and state. Measures include sales, business retention, entrepreneurial activity, new branch attraction, business relocation trends and concentrations of high-growth firms.

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