April, 2015

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Article Index

2015 Manufacturer of the Year
Article by: John Hehre

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.


Competition for Talent has returned: Are your Compensation and Benefit practices providing your organization an advantage?
Article by: Debra Englund

Strong talent can move from one job to another even in the toughest economic times and currently the competition for talent is increasing. 


Spring Scholarship Winner!
Article by: Nick Mason

Congratulations to the Manufacturers Alliance Spring Scholarship winner, Nick Mason of Intek Plastics!


MN Economic Outlook
Article by: Dr. Ernest Goss

After 27 months of above growth neutral readings for the Minnesota Business Conditions Index, the reading moved to the neutral threshold for March.


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2015 Manufacturer of the 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 rms Companies, ProMed Molded Products, and JEM Technical.

rms Company: The opportunities are endless!

rms MOY 2015

You might think that a contract manufacturer founded in 1967 and held to both stringent industry quality standards and Food and Drug Administration (FDA) regulations would have, in 2015, reached the point of diminishing returns on Continuous Improvement (CI) efforts. But at least for one Minneapolis-based company, nothing could be further from the truth. At rms Company, CI gets more than lip service, and when asked about the future of these efforts, the CI Director enthusiastically commented “the opportunities are endless!”

So just how is rms still finding sustainability in CI efforts? Read on.

rms specializes in the contract manufacturing of complex, tight tolerance medical device implants serving the Cardio Rhythm Management, Neuromodulation, Interventional and Orthopedic markets.  Another Division of the company is dedicated to the manufacturing of high performance, circular connectors used in the aerospace industry. Both markets are demanding, competitive and constantly evolving. rms has found that for them, the most accurate measure of success lies in the success of their customers. As simple as it sounds, their “customer first” philosophy and focus on understanding how best to support the needs of their customer is what has guided them down the path to success.

Customer involvement begins early on in the product development process. rms has a well-developed design for manufacturing (DFM) capability and works closely with the customer to identify improvements and modifications early on that will make the manufacturing process as efficient as possible. Lead time for prototypes can be as short as a few weeks which decreases total project time. Medical devices often go through long, expensive and rigorous testing before being approved by the FDA. Once approved, design changes are difficult as devices can again be subjected to a lengthy and expensive approval process.

Manufacturing requirements in this industry are becoming increasingly more challenging  as devices become smaller and tolerances become tighter and more stringent. For example, one of the implants manufactured by rms  is 0.014” long by 0.009” in diameter with a 0.002” diameter hole in the middle, thus barely visible to the human eye. Many of rms’ parts must be inspected with strong microscopes, and often to a tolerance of 0.0005”. Production volumes can range from  less than ten to hundreds of thousands of  parts per year, which further magnifies the effect of all improvements.

Investment in capital equipment is equally as impressive. With hundreds of sophisticated machine tools, laser welders, metrology, tumbling and cleaning stations carefully arranged throughout an immaculate and well-organized facility, the entire operation runs in-sync functionally and operationally. Additionally the company enjoys a strong relationship with its parent, Cretex Companies, which provides capital resources and organizational security.

Given the challenges posed by the industry, the need for a strong CI culture becomes clear. CI is part of rms’ DNA, and they understand success is due in large part to good ideas from its employees. New employees are introduced to the CI culture almost by default, because it is so ingrained in day-to-day processes  and practices of their peers. In fact, the need for 5S training has declined significantly over the years as it has become more integrated in the base culture.

To ensure continuity of standard work such as maintenance, set-up and clean-up, many machines have laminated cards detailing these activities for employees to reference. Shadow boards contain only the necessary tools required for a given area. A variety of training classes are also available, including some taught in-house by rms personnel and some presented onsite by the Manufacturer’s Alliance. These classes cover everything from basic onboarding to Lean and Six Sigma tools. Standard tools, including Kaizen events, Plan-Do-Check-Act (PDCA), the Five Why’s, Operational Studies and fishbone diagrams are in use at rms.

No CI program would be complete without metrics, and rms employs a tiered set of measures, each tailored to the audience involved. Measures are reviewed daily, weekly and monthly by all levels of management and cover Safety, Quality, Delivery and Cost – in that order. In 2014, 90% of rms employees participated in almost 1,000 CI projects. Results ranged from small changes with barely quantifiable but none-the-less beneficial improvements, to ideas resulting in significant savings.

Top management receives periodic updates on improvement projects and uses this information to engage with and coach employees around the work they’re doing. This frequent, specific and positive feedback reinforces the importance of improvement projects. Additionally, the President, Lee Zachman, maintains high-visibility within the company and spends significant time out on the shop floor discussing projects with employees. The hallmark of this effective CI culture is the Quick Win program. Every two months, a recognition lunch or dinner is held for employees involved in successful CI projects. This time is used to reinforce the importance of process improvements.

The relationship with the Manufacturers Alliance is viewed as a valuable asset. Employees participate in Leaders Alliance groups, networking and benchmarking and have taken many opportunities to give back by teaching, giving tours and hosting events.

rms makes products for many of the major Medical Device and Aerospace companies. Although the market for products is growing, the competition is fierce and the pressure for price reductions is constant. Overhead, labor and material costs continue to rise. Without a very strong and robust CI program, the company would quickly fall behind. Fortunately for rms, the opportunities are endless.

ProMed Molded Products: Start With Us, Stay With Us

Promed MOY

Every Leader wants to manage a company that’s easy to do business with, increases in value year over year, and is fun to work for. As simple as these goals sound, achieving them takes time and a consistent, concerted effort. ProMed makes it look easy, but that’s only because they’ve been at it long enough to figure out what works.

ProMed started in the late 1980’s when a large medical device company approached a local industrial rubber company and asked them to mold medical silicone. ProMed began life as a single small clean room that was part of this industrial rubber company until 2003 when the industrial rubber company was spun with ProMed’s focus 100% medical from that point on. ProMed’s primary market is long term implantable medical components and devices, an industry which maintains very stringent quality standards affecting everything from clean room certification to product conformance. Their go-to-market strategy focuses on innovations in the technology, speed and world class manufacturing processes.

By excelling in both quality assurance and innovation, ProMed’s customers can focus on the products’ function and end use. But how does ProMed accomplish the three goals mentioned above? Easy: they employ the principles of basic economics. The value of a company increases with increased sales, lower inventory and lower costs. Being easy to do business with is one way to increase sales. ProMed asked their customers how they could accomplish this, and their customer’s suggested things like faster turnaround on quotes, schedule flexibility and clear points of contact within the company. All completely actionable suggestions. Additionally, ProMed developed a strong rapid prototype process that allows them to quickly provide samples using the same material specified by the customer. Early prototyping allows the company and the customer to work out design and manufacturing issues earlier in the development process, resulting in more effective and less costly designs. The company also has the manufacturing capacity to scale-up production to meet the demands of large OEMs. These benefits of working with ProMed has resulted in their “start with us, stay with us”, philosophy, a direct result of efforts to be easy to work with.

If lower inventory and lower costs sounds like Lean Manufacturing, that’s exactly what ProMed has adopted – and they have done well to develop a Lean culture. One of the hallmarks of this Lean culture is team development and full employee participation. They have adopted The Continuous Improvement Game from another Manufacturer’s Alliance member, (an excellent example of peer-to-peer networking), whereby teams “play” by working through ideas which when executed are used as currency to continue playing the game. ProMed has also adopted many of the traditional Lean and Six Sigma Manufacturing methods including set-up time reduction, process capability studies, cross training, work cells, and small batch sizes. They have a strong set of metrics that they keep highly visible to  employees and are used to manage performance. They have also developed training around quality, design for manufacture, and technology and have a cadre of Six Sigma Black Belts and ISO Auditors on staff. In fact, the classes are so well developed they offer them to the community as well.

But achievement in all these activities doesn’t happen in a vacuum; it has required the teamwork of a motivated and dedicated workforce to realize this success. Culture is imperative to ensuring effective teamwork, and ProMed measures its culture by asking their employees the following three questions: “Do I know where the company is going?” “Do I know what I need to do to support those goals?” and “Am I appreciated for the work that I do?” When the answers to these questions are positive, the company can be confident in its ability to perform as an effective team. Team and culture development begins with careful recruiting and strategic on-boarding and training processes, and continues with constant communication and positive, constructive feedback. Incentives such as a profit sharing plan are also essential to the mix. This formula for culture-building has taken years to perfect, but it has been well-worth the efforts; whereas in its early years the company estimated it took almost a year for an employee to contribute significantly, the structure is now so well developed that new employees can have meaningful contributions in a matter of days.

ProMed has a strong culture of continuous improvement, and credits some of this success to the Manufacturer’s Alliance for their support along the way. ProMed sees their membership in the Manufacturers Alliance as a two-way street. They take full advantage of networking and benchmarking opportunities such as employees training programs, and in turn open their doors to Manufacturer’s Alliance members, providing training opportunities, tours and networking resources.

ProMed has certainly figured out an effective formula to increase value, be easy to work with and provide a great working environment for their employees, and their “start with us, stay with us philosophy” seems to apply to their people as well as their customers. Like any prudent company, however, they know that sustainable success will come only in continuing to refine the process.

JEM Technical: Just Enough (for now)

Jem MOY 2015

Everything about JEM Technical seems well thought out. Their main location has a wonderful sense of openness. There are lots of wide open spaces and the huge glass windows that flood the shop floor with light on a sunny day help as well. We all know that “stuff” (everything from inventory to work areas) tends to expand and fill any available space. JEM Technical has done an impressive job of resisting that temptation and it is indicative of a well-developed culture of continuous improvement. In keeping with that philosophy, and to support anticipated growth, they are renovating a building next door so they can consolidate two overcrowded machine shops into one location. Given the care that has clearly gone into their main plant, the expansion is sure to be a showcase as well.

John and Sheryl Menge began the company in 1984 as a manufacturer’s representative, marketing fluid power products in the Upper Midwest, with an emphasis on hydraulic valves. In 1986 they became a distributor and in 1989 they began an expansion into the design and manufacture of custom valves and valve packages. Over time, they’ve developed strong design, technical support and manufacturing capabilities that have earned them a solid reputation in the fluid power industry. Over thirty years later, John and Sheryl’s daughter Andrea Tysdal, herself a sixteen year veteran in the company, is comfortably in charge as president.

The culture of continuous improvement is clearly the result of many years of work; their Lean Journey began over 15 years ago. The first impression a visitor is likely to get, aside from the light open feeling in the shop, is how clean and well organized every area of the company is, from the shop floor through the offices. Some things are obvious. There are just enough tools in each work area to perform the tasks at hand. Work stations are well designed with just enough space. There is just enough paper to identify the job as it moves through the shop; the dispatch lists, shop orders work instructions and drawings are controlled through computer screens at each work station. There is just enough inventory and it is well organized and put away. There are a few pallets on the floor, but only when they’re being processed from one place to the next. The only work on the floor is current work in process. 6S metrics are a key part of the performance feedback and are obviously taken seriously. There are also some less visible but creative ideas at work that illustrate the depth of the continuous improvement culture. For example, inventory items that look the same are located apart from each other. Many products have the same outward appearance and differ only by internal settings, visible only by markings on the body of the part. To minimize the possibility of picking the wrong part, they are stored in different locations. The continuous improvement culture begins with employee orientation where new employees are encouraged to embrace change which is reinforced through measures, empowerment, coaching and support.

The company credits its success to many factors. The company is ISO certified and also has a well-established tracking and performance measurement system. Many of their customers demand very high quality levels. The company provides innovative solutions to their customers’ problems. For example, when Bobcat wanted to give their operators the ability to change hydraulically powered attachments without leaving the cab they turned to JEM Technical for their design expertise. The “Bobtach” system is now a popular option for Bobcat. It is difficult to compete these days with long lead times and JEM Technical keeps both prototype and production lead times to about four weeks. With shorter lead times and smaller batch sizes, a hallmark of successful Lean initiatives, they are able to respond quickly to customer demand without excessive amounts of inventory. They will also work to satisfy their customers’ urgent needs in considerably less time when needed.

The company is dealing with a few issues as well. Like many sophisticated manufacturing companies, finding and hiring qualified machinists is a struggle. JEM Technical is involved with the local technical colleges, developing an apprenticeship program, and works hard to retain their highly skilled workforce.   Decisions around expansion and growth are carefully considered as are the choice of markets to pursue. JEM Technical is also an active participant in the Manufacturer’s Alliance. Their employees benefit by and contribute to almost all areas: peer groups, training classes, seminars and benchmarking activities to name a few. JEM Technical has a bright future. Given the company’s solid and considered strategy for growth, that “extra” space is likely to be filled up, not with stuff, but with well thought out “just enough” manufacturing areas for new and expanded products.

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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Competition for Talent has returned: Are your Compensation and Benefit practices providing your organization an advantage?

Strong talent can move from one job to another even in the toughest economic times and currently the competition for talent is increasing. 

With the accelerated exit of workers from the labor force over the next three to five years the competition for talent at all levels, particularly amongst leadership roles, will continue to increase.  Those employees who decided to stay employed in their current roles due to the downturn in the economy starting in 2008 are now ready to move on to new challenges and many are retiring.

While compensation is not a top motivator for most employees, your pay levels (compared to the market) should not create dissatisfaction that overshadows other efforts to promote a healthy environment where engaged employees feel successful and rewarded.  As we are all aware, engaged employees mean a higher quality product or service, better efficiency, more money to the bottom line and engaged employees stay with their companies longer.  The engaged employees in your organization are the talent pool for leadership roles that will exist due to the exodus of leadership talent from the labor market over the next decade.

Accurate market data ensures that your pay practices help your organization attract and retain the “best and the brightest”.  Good market information is current and specific to position, industry and geographic area.  Market data is best acquired through Salary Surveys conducted by independent organizations who gather actual pay rates and practices from real companies. 

Wage and benefit surveys provide needed market data to determine competitive pay levels and help in the design or evaluation of your compensation and benefit programs.  Participating in independently conducted wage and benefit surveys ensures that there will be quality data for all of us…the more companies (of all sizes) that participate in providing information to the independent survey the better the results.

Informal data collection practices such as conversations with colleagues in the same industry or conducting a survey by calling “friends” and “counterparts” in the industry could mean you both are in violation of confidentiality policies and sometimes federal anti-trust laws. 

Independently conducted wage and benefits surveys are essential to a successful total rewards program in any organization and the return on your investment in surveys along with the use of design experts in Total Rewards can be substantial. 

Debra Englund, CEO of HRExpertiseBP, a Minneapolis based Organizational Effectiveness consulting firm specializing in Process Design and Human Resources. Contact Debra at Debra@hrexpertisebp.com or visit www.hrexpertisebp.com

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Spring Scholarship Winner!

Congratulations to the Manufacturers Alliance Spring Scholarship winner, Nick Mason of Intek Plastics!

The 2015 spring scholarship was sponsored and supported by Uponor.

This twice yearly scholarship, worth up to $2400 in training, was awarded to Nick based on his previous training and education and the recommendation of Intek management:

Nick Mason, our production scheduler, regularly raises his hand to fill the next operations and improvement leadership slot.

Intek would like to present Nick as one who regularly communicates his desire to grow personally and professionally, and one who demonstrates his willingness to prepare for the next opportunity.

We at Intek all feel Nick would benefit from a scholarship, to afford him the opportunity to enter a Manufacturers Alliance certification program and take that next step towards being prepared.

The Fall 2015 Scholarship application deadline is October 9, with the winner to be announced on October 16.

Details here: https://www.mfrall.com/manufacturers-alliance-scholarship-program

If you are interested in sponsoring an upcoming scholarship, please contact Kim Morales at kimm@mfrall.com or call (763)533-8239

2015 Manufacturers Alliance Spring Scholarship Winner! Production Scheduler at Intek Plastics, Hastings, MN.

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MN Economic Outlook

After 27 months of above growth neutral readings for the Minnesota Business Conditions Index, the reading moved to the neutral threshold for March.

The overall index slumped to 50.0 from February’s much healthier 64.7. Components of the index from the March survey of supply managers were new orders at 58.6, production or sales at 40.7, delivery lead time at 50.0, inventories at 47.1, and employment at 51.1. “Forty-one states experienced faster export growth over the past nine years than Minnesota. Furthermore, Minnesota is less dependent on the sale of products abroad than the rest of the nation. Thus, the rising value of the U.S. dollar, making U.S. goods less competitively priced abroad, represents a moderate economic challenge for the Minnesota economy going forward. The state’s chief trading partner is Canada and its number one exported product is computers and electronic equipment,” 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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