Enterprise Minnesota Magazine September/October 2015 by Enterprise Minnesota

ENTERPRISE MINNESOTA ACHIEVES ISO CERTIFICATION

Helping Manufacturing Enterprises Grow Profitably SEPTEMBER 2015

The

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Local high schools show a renewed commitment to a manufacturing curriculum

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THE STUDENTS ARE COMING!

Local high schools show a renewed commitment to a manufacturing curriculum

Fergus Falls tech teacher Dennis Wutzke instructs students in the high school’s ambitiously revamped manufacturing center.

ROBOTS ON THE JOB

TOTAL WORKER HEALTH

GOOD AS GOULD

Automation in manufacturing is here to stay, and two Minnesota firms are using robotics with great success.

A growing strategy to improve health and hold down costs.

2 The Next Generation Manufacturers step up to address the skills gap on their own terms.

Enterprise Minnesota consultant Samuel Gould gives manufacturers a master class in lean improvement.

Google-Like Creativity

Getting Ready to Grow

Missing the GAP

Miller Ingenuity’s Creation Station encourages out-ofthe-box resourcefulness.

Cross-Tech expects rapid growth from new proprietary product.

Manufacturers (temporarily) lost a valuable asset in Minnesota’s Growth Acceleration Program.

Visit the Enterprise Minnesota website for more details on what’s covered in the magazine at www.enterpriseminnesota.org.

Subscribe to The Weekly Report and Enterprise Minnesota® magazine today! Get updates on the people, companies, and trends that drive Minnesota’s manufacturing community. To subscribe, please visit http://www.enterpriseminnesota.org/subscribe. SEPTEMBER 2015 ENTERPRISE MINNESOTA /

bob kill

The Next Generation

Helping Manufacturing Enterprises Grow Profitably Publisher Lynn K. Shelton

Manufacturers step up to address the skills gap on their own terms Custom Publishing By

he Center of the American Experiment, a Minneapolis-based policy think tank, this fall will launch some research into Minnesota’s skills gap by visiting Alexandria, Minnesota – not to illustrate the problem, but to draw attention to the solutions created by this remarkable community of manufacturers. They could not have found a better example. As this issue of Enterprise Minnesota magazine uses its cover story to highlight how local educators

are revitalizing their efforts to expose manufacturing careers to a new generation of students, we can never forget about Alexandria. Alexandria will show the American Experiment researchers what happens when a community appreciates the job-creating power of its manufacturers and then rolls up its collective sleeves to collaborate to help solve their employment needs. This magazine has devoted a lot of column 2

/ ENTERPRISE MINNESOTA SEPTEMBER 2015

inches over the years to describe the sense of common purpose that drives Alexandria’s manufacturers, elected officials, community leaders, and educators. We see the results of their dedication throughout the city. We can start with the state-of-the-art manufacturing lab that was constructed in the heart of Alexandria’s newly opened high school. And then there’s the cutting edge faculty and curriculum at Alexandria Technical and Community College. And we can’t forget the myriad educational programs offered by local manufacturers. Their accomplishments have earned national reputations. The spirit of their success is reflected in this month’s three-part profile, Here Come the Students. You’re going to read about how Fergus Falls High School organized a vast local coalition that raised $317,000 – in private funds – to transform the old, dingy shop facility into an overhauled manufacturing lab with state-of-the-art equipment. You are going to see how a visionary school administrator in White Bear Lake enabled one of his tech teachers to create lines of communication with local manufacturers that, in part, led to a significant $250,000 United Way grant to outfit their tech lab with all new equipment. And you’ll see how Anoka Technical College and Anoka-Ramsey Community College have teamed to offer a STEM-oriented series of summer camps designed to show middle-schoolers the awesome opportunities in manufacturing. We can’t help but admire this trend, from many perspectives. But a personal favorite is that it is happening when local manufacturers decide to take individual control of their own fates. Nothing works more efficiently than the marketplace correcting itself. Bob Kill is president and CEO of Enterprise Minnesota.

Contributing Writers Lynn Shelton Suzy Frisch Sarah Asp Olson Photographers Lowell Anderson, Alexandria Echo Lisa Hine Chris Morse Nels Norquist Jeremy Petrick Contacts To subscribe subscribe@enterpriseminnesota.org To change an address or renew ldapra@enterpriseminnesota.org For back issues ldapra@enterpriseminnesota.org For permission to copy lynn.shelton@enterpriseminnesota.org 612-455-4215 To make event reservations events@enterpriseminnesota.org 612-455-4239 For additional magazines and reprints contact Lynet DaPra at lynet.dapra@enterpriseminnesota.org 612-455-4202 To advertise or sponsor an event chip.tangen@enterpriseminnesota.org, 612-455-4225

Enterprise Minnesota, Inc. 310 Fourth Ave. S., #7050 Minneapolis, MN 55415 612-373-2900 ©2015 Enterprise Minnesota ISSN#1060-8281. All rights reserved. Reproduction encouraged after obtaining permission from Enterprise Minnesota magazine. Additional magazines and reprints available for purchase. Contact Lynet DaPra at 612-455-4202 or lynet.dapra@enterpriseminnesota.org. Enterprise Minnesota magazine is published by Enterprise Minnesota 310 Fourth Ave. S., #7050, Minneapolis, MN 55415 POSTMASTER: Send address changes to Enterprise Minnesota 310 Fourth Ave. S., #7050 Minneapolis, MN 55415

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PEOPLE TO WATCH

Google-Like Creativity Miller Ingenuity’s Creation Station encourages out-of-the-box resourcefulness

ith a tip of the hat to the creativity-enhancing atmosphere made famous by Google, Winona-based Miller Ingenuity has created its own non-traditional space for employees to innovate. The global supplier of “mission-critical solutions” for the transportation industry, the company built a state-of-the-art 1,200 square foot “collaboration space” in the back of its manufacturing facility. It serves

Miller Ingenuity’s CEO Steve Blue talks to an employee in the company’s new Creation Station.

as an incubator for innovation where all members of the company are invited to come and think differently about ways to service the customer and the community. Company officials believe its Google-like campus within a factory is a first of its kind in Minnesota and a first among U.S. manufacturers.

/ ENTERPRISE MINNESOTA SEPTEMBER 2015

The facility includes: • Flexible workspace designed for both large and small presentations, training sessions and meetings. • Electrochromic floor to ceiling windows to bring the outside in to the modern-styled interior. • A Caboose Café that provides all-day dining choices. • High-tech audio/visual smart boards. The force behind this effort is Steve Blue, Miller Ingenuity’s president & CEO. “There’s nothing magic in that space,” he says. “The magic is in the people who come together and create things. “The Creation Station’s got all kinds of Internet hook-ups and smart boards. It’s a very serene kind of environment that is conducive to thinking and planning and coming together. But you have to lay the foundation before you create this kind of space. This is the last thing you do.” Creativity, he says, is a process and it can be learned, structured and nurtured. Every employee at Miller, Blue says, received training on the principles of brainstorming and the principles of creativity. On top of this, Blue says the space is for all employees, not just managers or office workers. Blue positioned the Creation Station at

the end of the factory because he wanted all employees to appreciate its value. One of its outcomes, he says, was encouraging what he calls “blue collar geniuses.” In many companies, the blue collar people are just an afterthought,” he says. They’re the hands of the organization, not the minds. He has been impressed, he says, by the positive outcomes “when you unleash their minds and expect them to be creative and to engage in the process as full partners.” Miller Ingenuity’s employees are encouraged to spend 20% percent of their time in the Creation Station. So what’s the ROI of the Creation Station? Blue said he told his board: “Don’t expect a big bang to come out of this because you’ll never know. When a big bang comes, it’ll be difficult to trace it back to the Creation Station. You’ll be able to trace the fact that we’re innovative and we’re creative and, more importantly, we have a process and a methodology in place to make that happen. “You’re going to find a million little decisions and a million little ideas and a couple of big ones over time,” he added. He considers the cost of the Creation Station a “productive asset,” not unlike a CNC machine. “The Creation Station is a productive asset that is giving me a piece of the development of new products.” He tells other CEOs, “You have to switch your mindset. You don’t mind building an asset or buying an asset, but your people are your most important asset. Invest everything you’ve got in them and then just let them do everything else.”

Steve Blue is a prolific writer and speaker, with a national audience. He is a monthly contributor to American City Business Journal’s popular “The League of Extraordinary CEOs” article, reaching three million executives in 43 cities. He interviews fellow CEOs responsible for generating rates of growth from 200 to 2,000 percent in less than three years. His books include Burnarounds: Unlocking the Double-Digit Profit Code and The Ten Million Dollar Employee. His upcoming book, American Manufacturing 2.0: What Went Wrong and How to Make It Right, will be published in 2016.

College Credit at Work AME delivers innovative at-work education for manufacturers

lmost 1,400 manufacturing employees in Minnesota’s geographic midsection have taken online classes at work from an innovative offering from a consortium of Minnesota colleges. And sponsors predict it will only grow from here. The organization is the Advanced Manufacturing Education Alliance (AME), which is made up of Pine Technical and Community College (Pine City), Central Lakes College (Brainerd), St. Cloud Technical & Community College, and 360° Manufacturing and Applied Engineering. Heidi Braun, an educator in the Customized Training/Continuing Education department at Pine Tech describes the

The program was funded by a $13.1 million grant from the Department of Labor. program as a “hybrid delivery of training, live interaction, and a new niche of students who may never have attended college.” The program, now in its third year, was funded by a $13.1 million grant from a branch of the U.S. Department of Labor. The program uses web-based technology. Students enter the course through an Internet browser, as they would through a typical online course, but the AME courses are live and interactive, similar to Skype with much higher audio-visual quality. Instructors see all the various sites. Minnesota Council for Continuing Education and Customized Training. That’s a state-wide organization for customized training. We received the exemplary program award for the state. So far, 1,533 participants, representing 108 employers have availed more than 90 classes through the AME program. In addition to individual classes, AME offers an array of certifications, diplomas and two-year degree programs

to help employees/students acquire the skills, credentials and education they need to succeed. They also work with manufacturers to tailor academic programs to meet their needs. One corporate participant has been Atscott Manufacturing Co., a custom manufacturer that employs 75 people over two shifts located in Pine City, just a mile from the college. John Norris, its owner, has a 20-year history of working on educational opportunities for employers, originally with the East Central Minnesota Workforce Partnership. He says the AME program has been

“awesome.” Atscott employees are allowed to take classes during the work day, but some employees have volunteered to take classes after work. “(Students) find this is a convenience and comfort, because they have that support from their colleagues, the company, and they have that interaction with the instructor where they’re not a hundred percent alone,” Braun said. “We’re seeing more students engage in education again.” She said AME planners are currently working on a self-supporting sustainability plan that will not utilize grant funding.

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Amy Valek is the learning and development specialist at J&B Group. She recently discussed Developing Employee Leadership Skills/Culture at an Enterprise Minnesota business event in Chaska.

ood distributor J & B group is learning its way into $1 billion in

sales. Today, the 35-year-old company employs approximately 675 associates in five locations across Minnesota, occupying more than 400,000 feet of space. Its main headquarters is in Saint Michael. Its early claim to fame was the highly popular No-Name Steak brand, which was created when owner Bob Hageman,

/ ENTERPRISE MINNESOTA SEPTEMBER 2015

J&B Group founder, purchased a St. Paulbased butcher shop. Today the company has expanded its No-Name line to include frozen and refrigerated meats and seafood. It also has created the Midwest Pride line which sells 300 other kinds of food products. Each week the company says it delivers several million pounds of product to customers in a 10-state region. But essential to their soon-to-be

accomplished goal of reaching $1 billion in sales is the way the company prepares its associates to enable that growth period, according to Amy Valek, the learning and development specialist at the company. “But we realize we can’t do that through sales alone,” she told attendees at an Enterprise Minnesota seminar entitled Developing Employee Leadership Skills/

“We want our associates to own their learning and be engaged in the process.” Culture at the GrandStay Hotel and Suites in Chaska. “If we don’t grow our associates we won’t grow our company,” she said. “But even if we do, we won’t sustain that growth for very long.” Valek said founder Hageman has always emphasized growth and development for the people who worked for him. But in

the last year, under Valek’s guidance, the company has taken training to another level when it ambitiously launched J&B University, a wide-ranging offering of programs and learning opportunities as well as an intensive leadership development program. “We’ve always had a culture where learning is important, but we never really put parameters around it,” Valek said. “J&B University is the platform for all of our learning and development initiatives.” “We really want our associates to own their learning and be engaged in the process,” she said. And it is not just about helping them acquire specific skills in manufacturing, she adds. “It isn’t work and life. It is all just life.” The company recently concluded an associate learning week that included a diverse variety of educational programs. Associates are encouraged to participate in at least one class with topics ranging from cooking to change readiness, or improving computer skills. The classes run all day for an entire work week. Associates can use

work time to participate. The process is composed of three elements: learning and development for all associates; job specific training to ensure that associates have the tools and skills they need to be successful; and leadership development, “where you drive long term success.” she says. She added that good leadership improves retention, engagement, and customer satisfaction. Leadership development programs set a clear vision and take the time to connect the dots for individual associates. “We need to know that we have the people in the pipeline to help us grow.” To accomplish all this with her oneperson department Valek has recruited partners like Enterprise Minnesota, Dale Carnegie, and the Minnesota School of Business and Globe University. Valek describes J&B University of being “pretty organic at this point.” But she adds that “ultimately the sky is the limit. Our CEO and president are completely with us. They are on board and supportive.”

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Niche Discipline CDI rides desiccant dehumidification to record profits

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nderstanding the value of maintaining a disciplined market niche has enabled Owatonna-based CDI-HVAC to go on a recent sales tear, one that looks to drive revenues to as much as $20 million. CDI started 25 years ago by manufacturing gas-fired industrial heating equipment and custom air handlers, a marketplace that was in continual flux until it finally exploded underneath CDI in 2006, taking about a third of the company’s equity. At that time, company CEO Tom Peterson, who cofounded the company with his wife in their basement, decided to focus on just one segment Tom and Sue Peterson founded CDI 25 years ago. of the industry: desiccant dehumidification and air conditioning. According to entrepreneurial grip on the company may Peterson, it was an easy choice. Desiccant have inhibited growth. “If I look at that dehumidification was growing technology, previous ten years, we’d bounce up and with strong margins and even stronger we’d bounce down. It really had to do with emerging markets. Plus, he saw that CDI (me) as the entrepreneur. I was strangling could become a strong No. 2 in the market, the company, basically.” relatively quickly. Today, he’s relinquished much direct Desiccant dehumidification represents control. Today the company has a president an efficient way to remove moisture more who oversees operations and sales; a thoroughly than merely cooling air. Ice product manager oversees output, and two arenas are strong customers, as are food sales executives administer their operations. processing, archival storage, libraries, “Three years ago, I tried to do all those jobs and hospitals. A growing recent market myself,” Peterson says. has been using this product to remediate In the end, it could be that Peterson’s water damage. Flood damaged buildings attitude drives CDI’s success as much as were dried out using air movers and heat, strategy. a process that could take about 30 days. “I have faith in myself and my Desiccants actually remove the moisture, capabilities. I have faith in the people who Peterson says, not just move it – and cut the are around me. I have faith in this market, dry-time to about three days. this nation that we’re put in, that there is Desiccants enabled CDI to finally break going to be opportunity, and continue to be through a $10-$12 million “glass ceiling” opportunity. I have faith that we are going of revenue. “We tried three different times to meet that. Ultimately I have faith in God to break through that and every time that what we can’t do, He is going to help would fall back to that ten, twelve million us with.” I can look several times at our life dollar range.” as a company and say, ‘It was nothing but Also, he admits that his strong Divine Intervention.’ ”

‘Esteemed Colleague’ Voyles recognized for prestigious award at Enterprise Minnesota

Your Answer to Retaining a Powerful Workplace strategic

nterprise Minnesota recently bestowed Patricia (Pat) Voyles with this year’s “Esteemed Colleague” award at its annual rewards and recognition celebration. The award is given out annually to the outstanding employee who peers say best embodies Enterprise Minnesota’s cultural

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values and advances the organization’s mission to help Minnesota manufacturing enterprises grow profitably. Voyles’ wealth of experience and passion for talent development has proven to be a valuable resource for manufacturers looking to develop leaders at all levels within a company including leadership teams, supervisors, and direct staff and also aligns strategy to support business goals and objectives, according to Bob Kill, president & CEO of Enterprise Minnesota. “Pat possesses a phenomenal

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Pat Voyles is a business growth consultant at Enterprise Minnesota.

combination of leadership expertise and practical experience, which is a tremendous asset to manufacturers,” said Bob Kill. “Enterprise Minnesota is fortunate to have her as a member of our consulting team.” Part of Voyles’ consulting work at Enterprise Minnesota includes: • Training Within Industry (TWI) is a proven program that teaches correct methods for performing tasks, creating effective leaders, and improving manufacturing productivity while also reducing rework and eliminating waste. • Practical Problem Solving (PPS) helps manufacturers develop a formal culture of problem solving and continuous improvement that identifies root causes of problems and fixes issues that impede growth. She also manages two CEO peer councils (Owatonna and Eagan) plus a strategic HR peer council in Alexandria. Voyles says she takes great pleasure in being able to help manufacturers. “Companies need a lot of help developing successful leaders,” she says. “It makes me excited to be able to help them do it.” Prior to joining Enterprise Minnesota in 2013 as a business growth consultant, Pat served as a talent acquisition manager and HR program manager for some of Minnesota’s largest employers. She served as talent acquisition manager for MTS Systems, senior program and project manager for Seagate Technology, program director for CHIMES/UnitedHealth, a recruiter for GE Capital Fleet Services, and senior recruiter and business unit manager for Kforce. She holds a Bachelor of Arts in Business Administration from Lewis University, Romeoville, IL and a Master of Arts in Organizational Leadership from St. Catherine University, St. Paul, MN. In addition to her academic degrees, Pat has also earned a Brown Belt in Six-Sigma Training and is a certified Human Capital Strategist through the Human Capital Institute.

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Walking the Talk Enterprise Minnesota achieves ISO 9001:2008 certification. Governing and Growing Companies in Greater Minnesota.

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long-time provider of services already demonstrates a “tangible, visible that help manufacturers achieve difference in the way the company ISO 9001:2008 Certification, Enterprise is being managed. ISO is a quality Minnesota decided to demonstrate its management system. We said we wanted own commitment to the standards of to do it because we wanted to be a excellence that the company applies to better-managed company. And I think I its manufacturing customers, according can provide evidence that we are, in fact, to Bob Kill, president and CEO. better managed because of it.” “ISO showcases that Enterprise He added that some employees don’t Minnesota is a well-managed business see it as much – yet. “But some of the and it improves our competitive things we’re working on in order to be advantage in the marketplace,” Kill a better managed company will have a said. “It also shows Minnesota’s rather large impact on them.” manufacturers that we are walking Manufacturers behave the same way, our walk and talking our talk. This according to Myhrman. “Production is truly a great achievement for our organization.” The process started about 18 months ago, according to Kent Myhrman, a business growth consultant at Enterprise Minnesota who specializes in ISO quality management. Myhrman guided the company’s process. He said there are differences between As part of celebrating its new ISO 9001: 2008 Certiworking with fication, Enterprise Minnesota has updated its logo a service company like to reflect this organizational achievement. Enterprise Minnesota and the manufacturers he typically counsels, although the standards were constructed to people are used to having instructions accommodate both. “The next standards that are relatively clear. They’ve worked will make it fit even better for a service out issues they’ve had with processes company,” he says. that don’t work well. They don’t spot the The biggest challenge, he joked, changes right away in an ISO system. was that his colleagues at Enterprise The people who do spot them right away Minnesota “don’t think I’m as much of are the managers who work in an office an expert as my customers do.” environment and are now seeing that Did he win them over? “I persuaded there are things we have to do now to them enough,” he says. support the business that are different Myhrman said Enterprise Minnesota and helpful.”

Another ISO Milestone Fraisa’s certification gets an international flavor.

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homas Naegelin, chairman of Fraisa, flew in from Switzerland to commemorate the fact that New Brighton-based Fraisa USA achieved its ISO certification. Fraisa USA is the domestic manufacturer and distributor of highend precision cutting tools. Its international headquarters are in Switzerland, and it maintains large manufacturing facilities in both Germany and Hungary. Attending the event Thomas Naegelin, chairman, Fraisa; Mathieu Tapp, CEO, Fraisa were Minnesota State USA, and Lynn Shelton, director communications and marketing Senator Barb Goodwin, at Enterprise Minnesota. Representative Carolyn Laine, and staff representatives from the offices of U.S. Senators Amy Klobuchar have also achieved their ISO certifications. and Al Franken. Franke began the process of getting Fraisa USA was founded 12 years ago ready for ISO almost from the moment as a distribution hub for tools that were he started with Fraisa USA two years ago, manufactured in Switzerland. Two years he says. Through 15 years of engineering later, the facility added a “resharpening” experience in three other companies, capability for its tools. And then, four years Franke was always part of the ISO auditing ago the Swiss operation opted to transfer its team. “inch” tool production lines to the U.S. The To help the process, he brought on New Brighton facility employs 20 people. Enterprise Minnesota’s Tim Bjorgum to It was actually pressure from the Swiss help guide him through the process. headquarters that prompted Fraisa USA to “I had never done a certification before,” get started with the ISO process, according Franke says. “Even now that I’ve done one, to Doug Franke, the company’s local it sure does help to have the second set of production manager, who managed the eyes, and have somebody who has seen process. what other companies do.” He said the Swiss operation, which was The process with Enterprise Minnesota founded in 1934, has been ISO certified for took about 10 months. “It went really well, 10 years. “They had a lot of people who having Enterprise Minnesota around to had worked in the same jobs for a lot of guide us,” Franke says. “They prepared years.” ISO helped structure the company. us for what we needed. There weren’t Fraisa’s German and Hungarian facilities surprises.”

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PROFILE

Getting Ready to Grow Cross-Tech expects rapid growth from new proprietary product

uoyed by what looks to be a propriproper alignment. etary technological breakthrough, Their prototype machine, Freiberg says, the owners at Cross-Tech are preparing has already performed flawlessly through to replace years of steady, incremental about 1,800 hours of daily use – every day, growth with the possibility of explosive save Christmas and Thanksgiving. revenues — that could double the size of He expects it to be a hit. “We have a the company within three years. product that no one else manufactures,” Cross-Tech manufactures a line of Brush Freiberg says. He expects to produce two Wolf hydraulic rotary brush cutters from more to take to industry shows. “We knew its factory in Crosslake, about a half-hour this would be good from the get-go,” due north of Brainerd. Their equipment is Freiberg said. We saw that there was a designed to fit skid steers, miniutility loaders, backhoe loaders, and excavators. Last year, the 25-employee company was approached by a customer in Mississippi that couldn’t keep up with the overgrowth for a million acres of pine trees owned by Weyerhauser. According to CrossCut’s co-owner Scott Freiberg, the company was no longer able to trim trees and cut brush with simple manual labor. “The trees were all overgrown,” he said. “There were trees that were Cross-Tech owners Scott Freiberg and Roger Roy. four or five inches in diameter, and they had no way of clearing it out. They thought they would lose the market out there.” trees.” The new product breakthrough will They approached Cross-Tech with the mean a different kind of growth for need for a brush cutter that could get the Cross-Tech. Over the years, Freiberg and job done, something 16-feet across, bigger co-owner (and uncle) Roger Roy have than anything on the existing market. methodically achieved steady profitability Cross-Tech had earlier built a 12-foot for their 25-person company through years cutter for a customer in Louisiana, but of well-managed growth that never outhad issues with the gearbox that caused a stripped their ability to meet demands. bearing to burn out. They fixed it, accordBefore buying the company in 1999, ing to Freiberg, but the customer had gone Freiberg was a career welder, and Roy was elsewhere. a masonry contractor and a homebuilder By pairing the correct hydraulic motor working in and around the Twin Cities. and right angle gearbox Cross-Tech’s They stumbled across Cross-Tech almost Brush Wolf machines achieve maximum on a lark, when the previous owner casutorque while maintaining a proven tip ally told Roy about his company and that speed ideal for brush cutting applications, he was ready to sell. When the two traveled according to its sales pitch. The motor and to Crosslake to check it out, they found the gearbox are pre-assembled on a one-half opportunity to be a bit less than advertised, inch steel plate then welded to the deck for just a pole building in which the previous

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owner manufactured a rotary brush cutter for local customers. “After that, there was nothing,” Freiberg recalls. At the same time, the two partners were intrigued by the opportunity. “Being in the manufacturing business my whole life I would sit there and do a lot of thinking. This opportunity came up to actually take a risk and do something for myself instead of working for somebody else.” They bought it and essentially started from scratch as a two-man operation with Freiberg working the manufacturing and Roy handling sales. “It was a struggle for the first two years,” Freiberg recalls. “We used our personal credit cards.” But he never doubted their prospects. “After I bought a motorhome and moved up north, I figured there was no way I was going to not make this succeed.” After a couple years of growth, Freiberg and Roy took pay cuts and hired a salesman and an office manager. They then engaged a national distributor, invested in marketing, and business slowly increased. “Not growing too fast helped us get to where we are today,” Freiberg says. Today the company sells products in all 50 states. Freiberg says Cross-Tech will be able to accommodate growth from the new product, if it proceeds as planned. “It’s not rocket science,” he says. It is very much in line with what we do right now. We’ll just need more people and space. In addition he says, the original orders would come in with ample lead time to accommodate growth. ”We have the property to expand the production needs,” he says, adding that “manpower is kind of tough to find out here.” Adds co-owner Roy, “If a welder is off right now, he’s probably a welder you don’t really need.” PHOTO BY THE NELS NORQUIST

Four Questions Pine Tech’s Joe Mulford

nterprise Minnesota magazine once called you MnSCU’s “grand connector” in your role as the person who built wide coalitions of manufacturers on behalf of your member schools. How will those skills help you at Pine? I’m able to bring a comprehensive experience with, or knowledge of that area, to the east central region. I think I bring a very wide network of connections and experiences that have given me a unique opportunity to see our system throughout the state. There are things that I’ve seen and learned that maybe work well in the metro area or in northwestern Minnesota that might benefit us at Pine. My main job right away is to be tour guide, to get people into the building, and show them what the capacities are. People who haven’t been to the college will see that it’s a jewel. It’s really a nice little campus — it’s not the largest college in our system, but we’ve got really nice equipment that they’ve been able to acquire through Federal grants — from plastics to machine-tooling to 3D printers, it’s all state-of-the-art equipment. People need to see that those kinds of resources are not that far from them in that region. Even I didn’t know how much stuff they’ve added to their portfolio in the last three, four, or five years until I was in that facility.

How much does it help that you come from Pine’s region of the state? Being from the region I do understand its cultural nuances. I have lived there have for some time, so I really understand those pieces and on a professional level. I’ve had the opportunity to work with the legislature and the statewide organizations, I’ve worked in different colleges and in between cities. I do think that made me a unique candidate in this process. I have a passion for the region and the people.

INNOVATIONS

I have been a business owner, and I’ve had a chance to work up through the ranks in the MnSCU System. I understand it at the operations level. But all colleges are different, and you do need to understand the technical and operational requirements of a campus. Faculty are still the heart of the college … Our faculty are really the heartbeat of what we do. When students walk through their graduation, they always have their pictures taken with their families and their favorite faculty members, not school administrators. We can never lose that perspective. The people who matter most and who have the most influence on our students are always the faculty. They’re incredibly connected to those students. The job of the faculty member hasn’t gotten easier over the years. There’s a more broadlybased group of students that come in with all kinds of backgrounds — the average age of our students is nearly 30 years old. And we have all kinds of academic preparation. Some are just learning English. There’s an art to being able to do that. We need to be in the business of awesome. You can’t just be good anymore, you have to be awesome. You have to focus on having those kinds of experiences for students and parents. That’s what people are looking for. They want to feel that they are part of an awesome place. So the pressure is greater for campuses to be competitive in that environment. The expectations of businesses are also higher than they’ve probably ever been. Where does manufacturing fall on your radar? We always need to make sure that we make students and our communities aware of manufacturing. We need to have an up-to-date curriculum, stateof-the-art equipment, and course

Joe Mulford this summer was named president of Pine Technical and Community College, located in Pine City. Mulford has served Minnesota State Colleges and Universities as system director for education industry partnerships since 2013. Previously, he worked at Hennepin Technical College, Anoka Technical College. He holds an associate degree from Moorhead State University (now Minnesota State University Moorhead), a bachelor’s degree from St. Cloud State University, and a master’s degree from Metropolitan State University. He is completing a doctorate from the University of Nebraska. He was interviewed by Lynn Shelton, director of communications and marketing at Enterprise Minnesota.

offerings that enable students to pursue their dreams. That could be supporting apprenticeship programs, providing them with on-the-job training, or it could be just more traditional offerings. It will be a little bit of a lot of different things, but the biggest piece for me I think that we need to focus on is getting people to decide that manufacturing is really a solid career choice. SEPTEMBER 2015 ENTERPRISE MINNESOTA /

Jerry Bienias, VP of operations, standing next to a Baxter robot.

ROBOTS ON THE JOB By Sarah Asp Olson

Automation in manufacturing is here to stay, and two Minnesota firms are using robotics with great success. 16

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alk onto the production floor at Donnelly Custom Manufacturing and you’re likely to see plenty of friendly faces. The Alexandria-based manufacturer has about 220 employees and recently welcomed two new faces to the team in the form of Baxter robots. Baxter is a three-foot tall (5’10” - 6’3” with pedestal), two-armed robot used for simple industrial jobs such as loading, unloading, sorting, and handling of materials. But he (and his same-named twin) has also got a bit of a personality. “He has a face and eyes that emote,” says Donnelly president Ron Kirscht. “He recognizes you [and registers] understanding, surprise or confusion with what you want or what just happened. I actually think when you walk on the floor when you first see Baxter operating it kind of stops you.” PHOTOS BY LOWELL ANDERSON, ALEXANDRIA ECHO

What Baxter doesn’t stop is production. In fact, the two robots together have been a boon for the company that operates 24 hours a day, seven days a week. While Baxter takes over more repetitive, but necessary, tasks, employees are free to grow and perform more highly skilled tasks. “One of the beauties of Baxter is he doesn’t have a brain,” says Jerry Bienias, vice president of operations. “You want to use humans for things that require cognitive thinking or to be able to use the brain, where Baxter can do things that are redundant very well.” Donnelly and neighboring firm, Alexandria Industries, exemplify how Minnesota manufacturers are using robotics to combat worker shortage, increase productivity and even spur innovation. Read on for a look at just how these two companies have put robots to work for them. TRADITIONAL ROBOTS MAKE GOOD Even before Baxter came on board, Donnelly was no stranger to automation on the floor. Starting in the early 2000s, the company began adding robots to its 35 injection

running compared to what you actually incurred. Over the last five years as we’ve been incorporating more and more on press robots, we’ve seen about a 10 percent improvement in our P-to-S ratio. A lot of that is due to being able to use those robots.” CUSTOMIZATION AND PRODUCTIVITY Less than three miles away, Alexandria Industries has its own robotics history—and its own history of innovation around technology. “We’ve always been a company with innovative people doing innovative things, hence our tagline, Demand Innovation,” says Alexandria Industries CEO, Tom Schabel. The aluminum extrusion company purchased its first robot— Rosie—in 2001. About six years later, it began adding additional automation to its fleet, and also opted to customize the automation cell with the FANUC pick and place machines. They started by working closely with a machine tool distributor.

Donnelly’s early adoption of robotics technology noticeably increased speed, precision, and accuracy. molding machines. Now, all but three machines have some automation attached, though, as a short-run manufacturer, cost almost became a barrier to entry into automation. “We have 2,000 discrete parts we make off of 1,800 different active molds,” says Kirscht. “If you’re spending $1,000 on each one [for unique end of arm tooling] you’re talking about between $1.5 million and $2 million in end of arm tooling that you build and develop to integrate with your industrial robots.” Donnelly was able to get past the cost barrier by getting creative. Donnelly’s Brian Castagneri operating the robot. engineers developed three different styles for universal end of arm tooling that can be integrated with each machine’s robots and be used to pick the majority of parts. “We looked at what they had, and it was close to what we were “That was one of the concepts that was instrumental in us being looking for, but didn’t have all the bells and whistles,” says Todd able to move towards getting industrial robots on our injection Carlson, Alexandria Industries’ senior manufacturing engineer. “It molding machines,” says Kirscht. “All of a sudden you create a was designed for a small number of parts, about five to 10 different scenario where you take something that was a cost inhibitor in part numbers. We were looking to put on 70 to 100 part numbers.” short-term manufacturing [and] you say economically this makes In the end, at Alexandria Industries’ request, the distributor sense.” replaced fixed tooling with vision and conveyance systems, The innovation paid off. Donnelly’s early adoption of robotics allowing for the flexibility and volume the company needed. Now, technology noticeably increased speed, precision, and accuracy. the majority of the firm’s robots use cameras and conveyors to “We have a measurement we use called People-to-Standard determine where it can grip a part or how it can hold it in a specific ratio,” says Bienias. “It’s the hours you earn for what you’re location along the fixture. SEPTEMBER 2015 ENTERPRISE MINNESOTA /

Alexandria Industries currently employs 11 robots that have typically paid back within one year. Carlson notes they continue to boost overall productivity and estimates the company is getting more than 23 hours on an automated machine, versus 18 to 20 hours with a human operator. The firm has also been able to add new machines to the floor while making up for understaffing on second and third shifts. Prior to adding robots, five operators could run only five machines. Today, Alexandria Industries can run seven or eight more machines using those same five operators, giving those understaffed shifts a boost in production. “Robotics has allowed us to grow our production volumes and capabilities where we otherwise could not have,” says Schabel. “Robotics allows us to keep machines running lights-out, when operators are at lunch or need to step away for a short period. They also generate a constant rhythm in our manufacturing processes as they foster continuous operation regardless of what’s going on around them.” FROM FIXED TO FLEXIBLE In recent years, both Donnelly and Alexandria Industries have added collaborative robots—or cobots—to their automation teams. Donnelly acquired both Baxter machines from Boston-based Rethink Robotics. Rethink’s chief product and marketing officer, Jim Lawton, notes that a lot of their deployments have been to small and medium-sized manufacturers, like Donnelly. “Traditional automation is very expensive, and it requires a lot of expertise because you’re doing so much coding and design of a new work cell,” he says. “Not a lot of small companies can afford to have automation engineers or roboticists [on staff] to be able to do this kind of work. By making robots much more accessible to manufacturing engineers, process engineers and process supervisors, it means people who understand the product and understand the manufacturing process can use the automation.” Rethink’s cobots’ flexibility and userfriendly interface make it possible for staff to teach—not program—the robots by manually moving their arms and hands to different positions. In addition, while some cobots on the market are position 18

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controlled, Rethink’s are not. “That means the first position needs to be precisely fixed to the sub-millimeter and the second needs to be fixed,” says Lawton. “If you go into most manufacturing environments…things may be more or less the same but more or less isn’t good enough. Our cobots are much more accommodating, and can feel their way into a fixture the same way a human can.” Donnelly has used their Baxter machines for a variety of tasks, making use of Baxter’s wheels that allow him to travel

Universal Robotics cobots in late 2013, also attracted by their mobility and flexibility. Unlike Baxter, who looks almost human, UR’s cobots are lightweight, six-axis arms designed to mimic a human’s range of motion and control. They can attach to machines but do not require the use of fencing, and can work independently or in collaboration with human workers. Like Baxter, they’re much easier to program than traditional fixed automation. “The user-friendly interface decreases the time required to teach operational

Press operator Amy Oberg, waiting for a Baxter robot to put the last piece into a box before she hauls it away. The robot counts as it places the pieces in the box.

around the shop. “Baxter sees the world,” jokes Kirscht. Even though he’s a freer-wheeling sort, Baxter does play nicely with Donnelly’s existing robots, working alongside them and his human coworkers on the line. “Where I’ve seen one of our Baxter robots deployed on a press, it’s in conjunction with a traditional robot activated and working on a machine to remove a part from a mold and place it on a conveyor and separate the sprue and runner that can be recycled from the part, then it comes down, and Baxter can do something else with that part,” says Kirscht. Alexandria Industries began adding

sequences to the robot and greatly simplifies the programming,” says Schabel. “Because of our high product mix manufacturing environment, their adaptability offers us huge flexibility when changing programs and which machinists can use it.” ROBOTS AND INNOVATION Just as with fixed automation, Baxter has spurred innovation among Donnelly’s human crew. “I was just talking to a person who was on the team and he had an operator stop him and say ‘I think if we did this or that we might be able to use Baxter on this

MEET BAXTER

(AND HIS BROTHER, SAWYER) Rethink Robotics’ Baxter is, quite literally, the face of collaborative robots. The company— founded in 2008 by MIT roboticist, Rodney Brooks—aims to fill a gap in robotics used in manufacturing. “Traditional pieces of automation were doing a very good job at solving a very small part of the problem,” says Jim Lawton, Rethink’s chief product and marketing officer. “They’re used to do things like weld and paint and move big chunks of metal. … But 90 percent of the applications in manufacturing don’t look like that. People need and want efficiency and labor productivity but not at the cost of eliminating flexibility and agility. Rethink Robotics has gone after that specific area.” Rethink rolled out its first collaborative robot, Baxter, in 2103. Today, about twodozen Baxter robots are deployed in Minnesota and Wisconsin, most shipped within the last year. Read on to meet Baxter, and his new brother Sawyer, who will begin shipping in September.

BAXTER

Base price: $25,000 Height (without pedestal): 3’ 1” Weight (without pedestal): 165 pounds Maximum reach: 47.6 inches Maximum payload: 5 pounds Baxter excels at a wide variety of tasks, including packing boxes, transferring parts from the line into a box, and loading and unloading parts. He has seven springloaded joints on each of his two arms, allowing him ultimate flexibility and agility and multiple ways of completing his learned tasks. He also has sensors that can detect the level of force applied to each joint making him well suited for even delicate tasks. Because he is trained, not programmed, Baxter can be deployed and re-deployed across lines. Baxter’s operating system, Intera 3, is designed to be intuitive and user friendly for non-technical personnel.

SAWYER

Base price: $29,000 Weight (without pedestal): 42 pounds Maximum reach: 49.6 inches Maximum payload: 8.8 pounds Sawyer is a lighter, smaller robot who can more easily maneuver into tight spaces designed for humans. He has one arm with seven degrees of freedom, and excels at delicate or intricate projects, like circuit or parts testing, where parts need to be inserted precisely with force control. His longer arm, higher payload, increased precision and faster speed make him well suited for high performance applications. In addition, his embedded vision system enables easier re-deployment and allows the robot to handle many tasks that other robots require add-on cameras to accomplish.

job,’” says Bienias. “A lot of people are looking for ways we can use him to make our jobs better.” Donnelly’s Baxter is now tricked out and customized to meet company-specific needs. “We’ve developed what we call a serving platter that we hung off the front of him where all the fixturing that we’re building

for different jobs will just key right into that so it’s an easy set up, it pops right into his serving platter and it’s all set,” says Bienias. Baxter’s customization doesn’t surprise Rethink Robotics’ Lawton. He’s seen time and again how the flexible little robot has become one of the crew and inspired innovation among staff.

“I go into a lot of factories that have deployed our robots and it’s not uncommon to see the hat of the local sports team or t-shirt, people hugging the robot,” he says. “Part of what’s required in enabling innovation is for people to be comfortable around the robots and get attracted toward them rather than propelled from them.” Employees tend to be dazzled by cobots, like Baxter, but even fixed automation can spark enthusiasm in forward-thinking companies. “Our employees always want to incorporate new technology into our manufacturing processes and there was excitement and curiosity about how robotics could enhance our production environment,” says Schabel. “They have no fear of robots replacing employees because we’ve always been able to grow our production volume and mix from using new technology. Carlson also notes that introducing robotics has increased employee marketability within Alexandria Industries, allowing staff to grow as machinists and engineers. Recently the company partnered with Alexandria Technical and Community College to train interested staff as robotics operators. They sent another group to FANUC’s Detroit headquarters to learn the ins and outs of engineering robots. “We’re able to take those people and grow them into those positions, increase their value as employees, and increase job satisfaction,” says Carlson. BUT, WHAT ABOUT JOBS? Neither Donnelly nor Alexandria Industries have lost employees due to automation—in fact, quite the opposite. Still, with the increasing capabilities of robots in manufacturing firms around the state, some still may ask: will robots negatively impact job opportunities for human workers? For Kirscht, the answer is a resounding, no. “One of the fatal errors that leaders make is to look at change as losing something as opposed to how you can gain through change,” he says. “If the goal of change is a better pathway … in the process of changing, you’re creating opportunities for people to gain. If that’s your approach and philosophy on it, people understand it, they accept that and believe in that and you get voluntary cooperation to move to a better place.” SEPTEMBER 2015 ENTERPRISE MINNESOTA /

Students ARE COMING! THE

Fergus Falls and White Bear Lake high schools show a renewed commitment to a manufacturing curriculum

PHOTO BY JEREMY PETRICK

anufacturers who worry The lab has already proven about where they are to be the envy of teachers and going to find the next school board members for a generation of skilled employees, variety of reasons, but perhaps might well look to Fergus Falls mostly because the whole and White Bear Lake for an project was funded privately. idea. The two school districts The idea of the Lab was this Fall unveiled ambitious high conceived about 18 months school programs designed to help ago when local manufacturers students think about careers in Evan Westra and Mike manufacturing. Westergard formed a working Twenty-five high school group designed to find sophomores who arrived for solutions to the worsening the first day of classes in Fergus skills gap that threatened their Fergus Falls superintendent Jerry Ness and Evan Westra, West Tool had signed up for the first year ability to compete. Westra and Design. of a STEM curriculum (science, owns West Tool and Design technology, engineering, and and Westerberg is director of mathematics). They are taught, in “We’re trying to meet the same standards manufacturing at StoneL. part, around a dramatically renovated in language and math and then tweak them “It’s tough to find people,” Westra says. Manufacturing Learning Lab – the old to the technical side of the world,” says “My motivation is to get young people to “shop” -- that includes $317,000 worth of Jerry Ness, the school superintendent. “Our be able to go into the trades.” new welding equipment, 3D printers, and target audience here is anywhere from They knew that the state of the shop at lathes. Their classes include fabrications, engineers to fabricators – anyone who Fergus Falls High School at the time gave physical science, principles of engineering, would want do welding for a living, or students exactly the wrong impression of math and a language arts class, which is be someone who might want to design what modern manufacturing. The large dimly lit tailored to technical reading and writing. the person is welding.” shop contained equipment that had been

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PHOTO BY JEREMY PETRICK

Fergus Falls technology teachers Jim Donahue and Dennis Wutzke

accumulating dirt and grime since it was first acquired in the 1960s. Westra’s first inclination was to get his group to volunteer to help re-paint and clean up the facility. “The plan was to see if we can get some people together, raise a couple of bucks, and basically do a 5S project at the school.” He and Westerberg pitched their idea at their local Rotary and “their answer was basically ‘no.’” We don’t want to paint, they said, but what do we really want to do? At this point fellow Rotarian Kim Embretson got involved. Embretson is a development specialist at the Fergus Falls-based West Central Initiative, a regional arm of the McKnight Foundation. A specialist in fundraising more than

manufacturing technology, he concluded the shop needed more than a paint job. “Let’s not just spruce it up,” he said. “Let’s do something that would ‘wow’ the kids. More than just providing some technical guidance, he thought the facility should inspire students to consider careers in modern manufacturing. He envisioned a facility that would “wow” students. If they walked into this room they would say, “Whoa, this is really interesting. I want to be involved in this.” Westergard knew that new equipment would show students that modern manufacturing “isn’t working in grease and dirt, and dingy conditions. It is pretty modern and cutting edge, and a lot it is computer based.” “We may generate a lot of interest in kids

who are willing to go to a tech school, or perhaps even just start working directly out of high school in manufacturing,” he said. The working group, which now included community leaders as well, wanted to think big. They approached Jim Donahue and Dennis Wutzke, two veteran technology teachers at the high school and asked them for a wish list of what they might need to get it done. They came back with a plan to spend $10,000 for upgrades. “They laughed us out of the room,” Wutzke remembers. They said, really, what do you need? Westra concluded the two teachers had likely had other proposals thwarted in the past by ever-tightening school budgets. They came back with $80,000. Again, SEPTEMBER 2015 ENTERPRISE MINNESOTA /

industry leaders that helped spearhead this project have directed us toward these Haas milling machines because they’re using them in their facilities. We’re going to have excellent resources to have people come in, I think, and show us some ways the students can get on these pieces of equipment,” Donahue said. While early acceptance has been positive, Westra says, “It remains to be seen how well it works.” The original task force evolved into an ongoing advisory board that is partly responsible for sustaining the program. The teachers are still playing with the curriculum, like how to get first-year

PHOTO BY LISA HINE

Wutzke remembers, “they laughed us our of the room.” They came back with $180,000. The response: “If you can’t do this, who will?” “They gave us one last chance,” Wutzke says, adding that they repeatedly used the term “pie in the sky.” They said, “if you could have anything you wanted, what would it be?” The two teachers came back with a list of equipment that cost something close to $350,000. Their wish list included an array of CNC welding equipment in addition to plans to clean and repaint the facility, and install epoxy flooring, a new exhaust

White Bear Lake technology teacher Delroy Nyren.

system, and new lighting. With Embretson at the helm of the fundraising, the money rolled in with impressive speed. Although the group had mapped out a three-year plan, by six months the group had commitments for $240,000, according to Embretson. Two local foundations contributed matching grants of nearly $120,000. The final tab for the project came in at $317,000. As of this writing, Embretson said, the fundraising is only about $6,500 short of the goal. He added that money wasn’t the only contribution. Local manufacturers volunteered to loan their tech people to set up the machines, and help show the students how they work. “We’re lucky the manufacturing 22

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students familiar with CNC equipment in just 50-minute increments. But the bigger accomplishment, the teachers agree, is that they can now show students and parents the possibilities in manufacturing. “It’s exciting and new every day. I think it’s our job to make sure students know that and understand that it’s not what it was even 10 years ago,” Wutzke says. A contingent of the working group traveled last spring to tell the story of their success to a standing-room-only group at a convention of school board members in the Twin Cities. “There are a lot of school board members who wanted to see how this got done and what we did to accomplish it,” Westra says.

Part of their success, he adds, was through developing a sense of collaboration throughout the community. “The manufacturing community is what drove this in this area. There’s a big gap between the education system and the private sector. Schools don’t have any money. I guess the main idea was to try and get students an accurate depiction of what manufacturing is like.” For their part, Wutzke and Donahue last spring hosted a networking session of a dozen local tech teachers in which they offered a tour of the lab. Said Donahue: “They couldn’t believe that was a high school program.” WHITE BEAR LAKE White Bear Lake’s two senior high school campuses this fall featured tech classes with $250,000 in manufacturing-related equipment thanks to a grant from the Greater Twin Cities United Way. The grant also includes funds for an outside career counselor for students who will specialize in manufacturing-related advice and help students reach out to local manufacturers. Students will use the equipment in a twosemester course called Manufacturing and Applied Engineering. A later offering will be Precision Manufacturing. Both will be taught by long-time tech instructor Delroy Nyren, a tireless advocate for expanding tech education who is largely credited with building a coalition of local business partners who made the grant possible. Nyren modestly deflects credit for the grant, but its seeds were likely sown several years ago when he approached the district’s then-assistant superintendent David Law (now superintendent at Anoka-Hennepin) for a new tech course, with a startup cost of “something like $30,000,” he remembers. The district’s already tight budget could not absorb the costs, Law told him. But he wanted to hear more about Nyren’s vision for broadening White Bear’s tech curriculum in ways that would have more relevance to the post high school work market. “Let’s investigate this deeper,” he told Nyren. He convened a meeting with a department liaison and curriculum leader and “just let me kind of spill my guts on what I was thinking.” In the end he gave me some latitude. Law gave Nyren broad latitude to reach out to local manufacturers and other educators, even encouraging offcampus meetings during the school day. Nyren used social media to connect

MANUFACTURING SUMMER CAMP

AN ANOKA-BASED SUMMER CAMP TEACHES MIDDLE SCHOOLERS ABOUT ADVANCED MANUFACTURING AND BIOMEDICAL TECHNOLOGY. Introducing the potential of a career in manufacturing is now beginning as early as middle school for some Minnesota students. Anoka Technical College and Anoka-Ramsey Community College this year hosted their third year of summer camps designed to inspire interest in manufacturing and technology for girls and boys age 13-15. The camps were two among several held across Minnesota this summer. They were cosponsored by the Fabricators and Manufacturers Association, 360° Manufacturing and Applied Engineering ATE Regional Center of Excellence (Bemidji State University) and the Minnesota Center for Engineering and Manufacturing Excellence (Minnesota State University). The week-long Anoka camps included Advanced Manufacturing and Biomedical Technology. Limited to 20 campers each, both sold out quickly, according to Jon Olson, a professional workforce training specialist at Anoka-Ramsey, who oversees the camps. Local manufacturers absorbed the $50 per student fee through scholarships, he said. Olson, who has specialized in customized training with manufacturers for six different two-year colleges in Minnesota for the past 25 years says, “The whole future worker pipeline is on everybody’s agenda.” Students were recruited through Project Lead the Way, which is affiliated with the Manufacturing Center of Excellence in Manufacturing and Engineering (Minnesota State), which circulates program information to all the K-12 STEM educators in Minnesota. The Advanced Manufacturing Camp gives campers hands-on experience with SolidWorks/CAD, 3-D printing, machine tools, welding, metal fabrication. Students also tour manufacturing plants to see first-hand how products proceed from concept to final product. The Biomedical Technology Camp was designed to help campers experience the medical device industry in Minnesota. Students built a heart-rate monitor and conducted a heart dissection to learn how products treat cardiovascular problems. Olson said some three-year campers are now requesting camp experiences for high school students as well. “We’d like to keep going on this,” he says. “The young kids are starting to see that there’s just a huge range of jobs and things to do in manufacturing careers. We’ve tried to show (them) how many different things that you can do that fit their interests. You can be on design and engineering. You can be on the manufacturing floor running sophisticated machines. You can be in salesand-marketing or research-and-development. We try to show them ‘manufacturing’ doesn’t mean that you’re going to work in a dark, dirty, and dingy environment.”

with educators nationwide. He found one working model through email conversations with an educator in Wheeling, Illinois. He then pulled together a 12-person advisory board that included local manufacturers such as Heraeus Medical Components, Wilson Tool, Mold Craft, and Herold Precision Metals, among others. One participant was Jim Stephan of DuFresne Manufacturing, a 25-year old

operation with about 100 employees. He says part of his early discussions with Nyren included the need for new employees with skills, but also who had the right behavioral competencies. “We can train most people on anything, but you can’t train the BCs, adds Bob DuFresne. “That’s got to come from schools and home. That’s the first thing that we interview for, is do they have the right

BCs, behavioral competencies.” Stephan said he knew Nyren and his partners were hitting the right public chords when they organized a manufacturing symposium on White Bear Lake’s south campus last December. “We didn’t know how many people were going to show up,” he says. “There could have been twenty – but there were several hundred. There were several hundred people who showed up. Students were standing up asking questions about manufacturing as a career, and parents were there asking about manufacturing as a career for their kids. Sara Paul, the district’s current assistant superintendent, says the educational context for the grant is “not about a class, it’s about a pathway. How do we find that sweet spot of helping kids throw the door open to all the opportunities out there for them? How do we begin designing our system to make sure that students are prepared for livable wage jobs that are out there?” The curriculum is being designed, she says, to give students exposure to manufacturing, to deepen their understanding of possibilities within the industry, and then to help find an internship that shows them a fit to their skills and interests. “Bridging the gap to employment is a new way of capitalizing on the gift we have,” she says. “Industry partners that really want to provide lots of opportunities for students all the way from the very beginning of that exposure through the deeper experiences.” Beyond just the actual skills of using equipment, there are a lot of things that we are learning from our industry partners about what essential skills are needed for the different types of jobs available in manufacturing, so that we really are setting our students up for success.” A key liaison in those relationships is Rich Wessels, the career navigator also underwritten by the grant who began working with district students in February. Wessels is provided by HIRED, an outside workforce development company. One of his responsibilities, according to Nyren, is to help arrange job shadowing and internships for students with local manufacturers. So what’s next for White Bear Lake? Are there more grants in its future? “I haven’t asked that question, Nyren says. “I’m kind of just basking in the moment. This is something that doesn’t happen every day.” SEPTEMBER 2015 ENTERPRISE MINNESOTA /

TotalWorker

HEALTH A growing strategy to improve health and hold down costs

he issue of wellness is not new to manufacturers, many of whom put a lot of time, money and effort into making sure their workers are safe and healthy. But the results from such initiatives can be mixed. There are challenges with motivation and long-term commitment to changing behaviors. There are issues with an aging workforce, where individuals face changes to their bodies, including less flexibility,

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stamina, and strength. And increasingly, wellness experts agree that other issues linked to wellnessâ&#x20AC;&#x201D;sleep, stress, family concerns, financial problemsâ&#x20AC;&#x201D; can at best distract workers and at worst can make them unable to do their jobs. A new concept, called Total Worker Health, is bringing together the various strands of employee well-being and helping companies

treat an employee as a whole person, whose health is affected by a myriad of factors. Creating a strategy for dealing with TWH in a manageable way is not always simple, but it has great potential for creating a healthy workplace and holding down costs. WHAT IS TOTAL WORKER HEALTH? TWH integrates occupational safety and health protection with health promotion, such as traditional wellness programs, to prevent worker injury and illness to advance health and well-being. In recent years, the wellness angle of the strategy has included mental health and other related issues.

Top employers are creating cultures of health and safety using an integrated approach called Total Worker Health. The concept was first promoted by the National Institute for Occupational Safety and Health (NIOSH) in 2004. The Centers for Disease Control and Prevention, which oversees NIOSH, describes TWH as a new pathway toward a safer and healthier workforce. “Workplace health promotion efforts and occupational safety and health programs have traditionally been separated,” the agency said. “Today’s best companies are recognizing that there is a connection between organizational safety and health, worker health and well-being, and overall costs and productivity. Top employers are moving toward creating new cultures of health and safety using an integrated approach called Total Worker Health.”

Prepared by Marsh & McLennan

Case study: Lincoln Industries In Lincoln, Nebraska, a metalfinishing business called Lincoln Industries has taken a TWH approach and targeted a range of issues, including wellness programs; stretching on the job; and financial and emotional support programs. Lincoln Industries’ leadership committed to TWH strategies, and with employee buy-in, the company wellness programs have demonstrated a return on investment of 4 to1, which includes savings in health care costs, workers compensation, absenteeism, and employee turnover. The company also reports it has been able to hold its health care costs flat since 2007. BREAKING DOWN SILOS HR professionals who have studied TWH say that the first step in the strategy is breaking down the traditional silos of HR, safety, and wellness—areas or departments that too often don’t work closely together. By having the leadership in these areas work together, a company can craft a much more comprehensive and successful approach to creating a healthy workplace. Case Study: USAA USAA is a financial services company with more than 10 million members and is the leading provider of advice about financial planning, insurance, banking, investments, and financial security to members of the U.S. military and their families. The San Antonio–based company won the C. Everett Koop National Health Award in 2006. To improve its total wellness efforts, the company’s management formed a wellness council that reported to the head of human resources, who oversaw TWH efforts and reported to the chief executive officer. All the initiative’s individual components— which were as diverse as workers’ compensation, disability, safety, corporate communications, corporate real estate, and corporate services worked as a unified group under the wellness council umbrella. As part of its Health Points program, USAA used a health risk appraisal as a personal dashboard for employees. That dashboard comprises

an online questionnaire and biometrics (body mass index [BMI], blood pressure, fasting glucose, and lipids measures). Officials reported that the number of employees completing these appraisals and participating in other wellness programs steadily increased. Over time, health risk assessments showed a 28 percent reduction in the number of employees’ total risk factors between 2009 and 2013, as well as in BMI for those in the highest weight groups. And, since 2002, USAA has seen about an 80 percent decrease in long-term disability costs, as well as a decrease in short-term disability. WHY IS TWH RIGHT FOR MY BUSINESS? In the manufacturing field, the changing demographics of the American workforce is keenly felt. Older workers are more susceptible to injury or illness, and chronic health conditions are more likely to impact productivity. By minimizing stress, providing preventive care, and making the worksite a place where workers feel engaged and appreciated, the TWH

Manufacturing feels the changing demographics of the American workforce. approach can significantly cut back on the costs that many companies with older workers are seeing. A focus on TWH looks at both possible injuries on the job and the unhealthy effects of lifestyle choices off the clock. And it also recognizes that many jobs encourage

SEPTEMBER 2015 ENTERPRISE MINNESOTA /

sitting or restricted movement for most of the day, contributing to problems such as obesity or musculoskeletal problems. Low activity is not the only unhealthy behavior, of course, and each company will have to craft a strategy that best fits its workforce. For example, protecting the hearing of workers may be a priority for some, as the next case shows. Case Study: 3M, Hutchinson, Minn. At a 3M manufacturing plant in Hutchinson, Minn., hearing protection is a top priority. The plant’s Hearing Conservation Team promotes “24Hour Protection” by sharing information and encouraging employees to take ear plugs home to protect their hearing for activities that might involve noisy surroundings. In this case, hunting is a popular pastime, and a number of workers are hunters. The 3M Hutchinson plant’s health and safety personnel recognized the risk to hearing for employees who are recreational shooters and implemented a policy whereby “Combat Arms” earplugs are stocked in the employee store and made available at minimal cost to workers and their family members. The Hutchinson plant employees also receive supplemental information on the unique auditory risks of firearm noise and the performance of hearing protectors specially designed for the shooting sports in their annual Occupational Health and Safety Administration (OSHA) hearing conservation training programs. In addition, awareness campaigns and reminders to workers to protect their own ears and those of their children during shooting activities are distributed each fall and spring when hunting seasons open. As a result of these efforts, the 3M plant won 2012 “Safe-in-Sound Excellence in Hearing Loss Prevention Award™”, presented annually by the National Hearing Conservation Association. Bringing together wellness, safety, and HR departments to address issues like 26

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these is crucial for manufacturing firms. The approach goes beyond things like workstation design, health plan incentives, and wellness programs—these all have an important role, but working together, companies can identify health issues outside of traditional efforts and improve and protect health in new and innovative ways.

Worker feedback and action committees can identify problems that lead to employee disengagement or even turnover. DATA: THE KEY TO EFFECTIVENESS IN TWH Data has always been a key component of any safety and wellness effort. Good data analytics can show a company where claims have risen, helping them pinpoint what needs to be addressed. Data also helps measure the effectiveness of changes in the workplace, and of wellness efforts over time. A data analysis most often starts with looking at past claims. The past doesn’t always predict the future, but it provides a guide to trends and experience that is essential to establishing the direction a workforce is moving. And ongoing

data collection gives a company a firm understanding of which measures and initiatives are working, and which are ineffective. One of the key characteristics of a TWH approach is a careful analysis of data—data that can be shared between departments for a better understanding of health risks and costs. Claims data can be examined for clues to work-related injury, performance data can help in setting work and safety policies. Worker feedback and action committees can identify problems that lead to employee disengagement or even turnover. Focus groups and surveys are other important data-collection tools. And health screening can give important information on specific problems, thereby helping to pinpoint effective solutions. For example, a Functional Movement Systems (FMS) screening provides measurements of employees as they perform seven different movements on each side of the body to identify the kind of functional limitations and asymmetries that have been shown to lead to increased risk of injury. Employees with poor movement patterns are more susceptible to injury. Once limitations are measured, providing employees with corrective exercises to do throughout the day can reduce this risk. Case Study: using FMS screening A refuse/recycling collection company was experiencing a disproportionate number of workers’ compensation claims among its workforce. To help reduce those claims, Marsh & McLennan Agency implemented FMS screening to identify movements the employees were required to do as part of their jobs. FMS screening identified several key movement patterns where employees’ bodies weren’t able to perform as necessary, so they would compensate by stressing other areas of their bodies. This realization prompted the company to implement stretching exercises to help employees improve their ability to perform job functions while limiting stress to their bodies. As a result, the company’s annualized loss trend lowered from $607,794 to $150,443 in a matter of a few months. Lower amounts

of losses will result in lower cost multipliers applied to their insurance premiums.

Health Risk Appraisal (HRA) participation, patient satisfaction, the culture of health, and nursing quality. In some cases a work unit would meet the program’s criteria for an intervention, in which case a Safety Wellness Action Team (SWAT) would be formed to conduct an open-ended safety and socio-environmental assessment of the unit. These teams looked a wide range of issues, including physical hazards, indoor air quality, ergonomics, whole worker health, a nutritional environment, and opportunities for physical activity at work.

A CHANGE FROM BOTTOM TO TOP People familiar with TWH often talk about cultural change at the companies that are most successful in implementing this wellness strategy. Breaking down silos requires a cultural change, with ongoing support from top management. But it can’t be just a top-down effort. There are high stakes for workers, and the better educated they are about TWH, the more buy-in a company is likely to have. Consider that workers are already likely to support ergonomics or safety measures. Over time, they are also likely to be more supportive of wellness programs, especially if they see sustained commitment and realize this is not just the flavor of the month. An example from DartmouthHitchcock, an academic medical center in New Hampshire with over 8,000 employees shows what can happen with top leadership decide to address an issue head-on, using the best practices and datadriven analytics. Case study: Dartmouth-Hitchcock As a large health system, covering over 8,000 employees and family members in its health plans, health care costs were almost 10 percent of the medical center’s budget and rising faster than health care inflation rates each year. While collaborative, the employee health and safety departments were in different silos and officials recognized there were opportunities to work together more closely. Another challenge was that the medical center had different locations and clinic sites. The leadership of DartmouthHitchcock decided that it could do better and would aim to have the healthiest workforce possible—a goal that the medical center adopted as the corporate vision, to ensure sustainability and engagement at every level. The center created the Live Well/ Work Well (LWWW) program, and one core principle was that the health

Employees are increasingly looking to employers to provide benefits such as universal life, home and auto insurance. of employees would be facilitated by integration of health protection with health promotion. LWWW developed electronic reporting of injuries (EROI), which assured timely medical care by providing immediate notification to employer stakeholders such as occupational medicine, safety, human resources, and workability programs. LWWW also identified high-risk work units using aggregate EROI data and assessed their need for health promotion and protection interventions. The work units were evaluated by wellness and performance indicators, including

BRINGING IT TOGETHER TWH is one tool that can help companies build a culture of wellbeing that creates a competitive advantage: healthy and happy workers are more productive, less likely to leave their jobs, and more likely to identify with the company. Although good health benefits and wellness efforts play a large role in employee satisfaction, it’s become clear that employees want more from their workplace. Financial services are an area where companies have found enthusiastic response to expanding their offerings. Going beyond the standard 401(k) match, employers can offer programs to assist employees and their families in understanding medical bills, budgeting or financial planning classes, or a stock purchase plan. Employees are also increasingly looking to employers to provide benefits such as universal life, home and auto insurance. A group policy can be cost effective for employers, and benefit employees in both cost and ease of use through payroll deductions. Likewise, the social element of employment can also bring job satisfaction. Employees, especially younger employees, highly value options to socialize together, participate in charity events or fundraisers, or volunteer in the community. TWH is a concept that can help employers get a handle on wellness and safety issues, and do it in a way that uses measurable data, improves morale, and at the same time encourages more teamwork and collaboration. The benefits can help your bottom line, but more importantly, TWH can make workers happier, as well as healthier SEPTEMBER 2015 ENTERPRISE MINNESOTA /

GOOD AS Enterprise Minnesota consultant Samuel Gould gives manufacturers a master class in lean improvement

By Suzy Frisch

hen manufacturers hire business consultant Samuel Gould, they don’t usually get what they are expecting. His resume is chock full of advanced degrees and engineering experience. So when he launches lean initiatives, the staff gear up for an academic lecture complete with professorial theories and statistics. Then Gould opens his mouth. In a folksy way that reflects more than 20 years of living in Missouri and Tennessee, Gould regales clients with stories. They cover his stints as an engineer at Oak Ridge National Laboratory, where he helped developed lean business practices, and as director of manufacturing, engineering, and general plant manager for many companies. He also goes against the grain by

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being the epitome of direct, even if his bluntness ruffles some feathers. And he’s not shy about speaking truth to power, says Mary Connor, a fellow business growth consultant who has worked with Gould for 10 years. Gould quickly wins over clients at all levels with his hands-on knowledge from decades in the field. Before long, he has once-skeptical team members eager to hear his advice. “I describe him as being like Barbra Streisand,” Connor says. “You either like him, or you’ll eventually grow to like him. That’s Sam.” Gould clearly has a method to his madness, because he’s one of the most sought-after consultants at Enterprise Minnesota. His reputation precedes him. He’s known for taking a company with

thorny issues—whether on the factory floor or among personnel—and delving deep until he finds process improvement solutions. Minnesota businesses that saw excellent results with Gould have paid for him to visit other locations in the United States and Mexico to bring his lean prowess. DCI, Inc., a St. Cloud manufacturer and servicer of stainless steel storage and processing tanks, retained Gould in 2011 as it was emerging from the recession. He’s been involved with the company ever since. Plant superintendent Tom Evens says Gould has played an integral role in improving company culture. “Sam has the knack of being able to communicate with operators and frontline supervisors all the way up to directors

and vice presidents,” says Evens. “For an engineer, he really does have pretty good soft skills. But he addresses it upfront and says, ‘I don’t have soft skills.’ Quite honestly it’s that openness that brings employees in. He might be rough around the edges once in a while, but it’s his way of getting us on board.” With a strong belief in the effectiveness of continuous improvement—and the knowledge and experience to back it up— Gould is a wizard at uniting often-reluctant teams to tackle the systemic problems holding them back. When he finishes, he’s got a cadre of Sam Gould fans that use his stories and sayings to work more effectively and efficiently together. AN ENGINEER AT HEART When Gould joined Enterprise Minnesota in 2003 as a business growth consultant, he came with three decades of experience in engineering and manufacturing. Right after college, Gould spent 15 years at the Oak Ridge National Laboratory in Tennessee, the U.S. Department of Energy’s largest science and energy lab. Gould helped modernize its nuclear weapons complex. Ultimately he led a team of 28 scientists

He’s right in there getting dirty with the employees, and he doesn’t ask them to do anything that he wouldn’t do himself.

PHOTO BY LISA HINE

Samuel Gould

and engineers in Six Sigma and lean improvements before that term really existed. Yet Gould’s experience with lean actually goes back much farther to his childhood in Bemidji. His father went blind in his mid-30s, and he did all the cooking for the family. Their pantry needed to be perfectly organized so that his dad knew he was opening a can of tomatoes, not peaches. “There were 14 kids, so lean principles had to be instituted for him to function in a family atmosphere of that nature,” says Gould, who now lives near his hometown. That experience generated one of his favorite rules and sayings: “There has to be a place for everything and everything should be in its place. From a blind man’s SEPTEMBER 2015 ENTERPRISE MINNESOTA /

SAM GOULD’S GOLDEN RULES 1) IF YOU CAN’T BE ON TIME, BE EARLY. Sam tells people, “You disappoint others if you’re not there on time. You can’t bring forth your best effort if you don’t arrive early. Some people laugh at it, but it really works.”

2) WHEN IN DOUBT, MOVE IT OUT. “The more standard line of thinking is when in doubt, keep it about. But that means making the decision all over again. What you actually do is retard your ability to perform today because you’ve placed just-in-case equipment and other things in your way. It’s like having a rock in your shoe.”

3) WHEN THERE IS AN ANOMALY, GET DOWN TO THE ROOT CAUSE. “If something is out of place, don’t just put it back. That doesn’t fix the problem. Instead, find out the reasons it’s in the wrong place so that you can fix the process. That way everyone can get it right.”

4) THINK OF THREE WAYS TO FIX A PROBLEM. “If you can’t think of three ways, you don’t know enough about the problem to fix it.”

5) WHEN DOING RAPID IMPROVEMENTS OR OTHER LEAN MEASURES, DON’T LEAVE THE ROOM BEFORE YOU HAVE A TEAM. If you leave before you have a team, it’s a long, hard slog to get any improvement. “I’m looking for passionate engagement and that employees’ awareness of the problem is deep enough that they are beginning to take responsibility for it. Then when we’re on the floor, they will hold themselves accountable for making improvements.”

perspective if it’s not in its place, how will he ever find it?” His childhood generated one of Gould’s core teachings. If manufacturing operators put something in the wrong spot, it does no good just to return it to its proper place. The problem is fixed only temporarily. It’s more important to investigate the root cause and figure out a process that fixes the problem. Otherwise, the same mistake will endure, wasting time and money for the duration. “There is a propensity for people to blame others for failures. It’s my experience that 95 percent of the time, it’s the process not the people,” Gould says. “When somebody is trying to fix something, they are frustrated and want to be frustrated at someone. They don’t go to the next level and say, ‘Why does that person do that?’ They believe they just don’t care. When you do discovery, you find out that they care very much. Most often the process is not clear.” Gould’s diverse experiences, including serving as a general plant manager, supply him with the stories and metaphors he uses when working with other manufacturers. It also makes him accessible, and it shows 30

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clients’ employees that he talks the talk with knowledge and first-hand familiarity with any challenge they face, says Glenn Pence, an Enterprise Minnesota business development consultant who has worked with Gould for a decade. Pence has great respect for Gould’s work, especially the way he interacts with clients in pursuit of continuous improvement. “He’s very hands on. Some consultants are more academic. He’s right in there getting dirty with the employees, and he doesn’t ask them to do anything that he wouldn’t do himself,” says Pence. “He has the ability to speak and share real life experiences that the clients’ employees relate to. Over a short period of time, they see that Sam is a real guy who knows what he’s talking about.” SECRETS TO HIS SUCCESS When Gould works with clients, one of the most effective things he does is read the room and sort out the various personalities, Connor says. Often the strongest and most contentious personality is what Gould calls the caveman, who comprises about 10 percent of the population. Cavemen

are skeptical of lean, leaders of other grumblers, and often are beaten down because they don’t feel heard. Instead of going to battle with cavemen, Gould puts his efforts into winning them over. “A lot of lean leaders won’t allow a caveman to be on a team. But I love them because they ask the hard questions, and they are looking for tangible answers,” Gould says. “I have found in my 40 years of experience that if you can get a caveman converted, they can do 10 times what an early adopter can do.” Being self-deprecating in front of the group also works well for Gould, Pence notes. “Part of it is that Sam will communicate to the group that he’s a

SAM GOULD

AT A GLANCE • Born and raised on a farm near Bemidji, Minnesota • Earned a master’s degree in electrical engineering from the University of Tennessee Space Institute, 1978 • Received a master’s degree in management of technology from the University of Minnesota Carlson School of Management, 2002 • Worked for 15 years at Oak Ridge National Laboratory, where he led of team of 28 scientists and engineers in the automation system development section • Served as director of engineering at Nellcor Puritan Bennett, a medical device company, which became Mallinckrodt. Gould became director of engineering and manufacturing • Was named general manager of Tyco Healthcare (now Covidien) • Joined Minnesota Technology, which became Enterprise Minnesota, in 2003 as a process engineer and now serves as a business growth consultant • Helped establish the engineering program at Bemidji State University, where he has served as an adjunct professor

caveman, and he understands that thinking, and then they start to relate to him,” he says. “He works with the team, and he’s direct. He throws humor into it, and over time he converts them.” Connor says that Gould’s many memorable phrases are effective with clients. When he advocates that companies set a schedule for various jobs, he often says, “‘I see your folks over there rifling through those work orders like a dog through the tulips. They are picking their favorite job and screwing up the schedule.’ That really sticks with people and leaves an impression,” Connor says. She also appreciates Gould’s ability to quickly size up a company’s issues and have the courage to inform management without mincing words. He challenges clients to make changes while encouraging employees to challenge each other, ask questions, and raise the bar for their operations. The bottom line for Gould—and why he invests so much time and effort into continuous improvement—is grounded in his

diehard belief in safety and a commitment to relieving frustration for employees. “When you do continuous improvement at a company, employees have more energy at the end of the day to come home to their families because they have fewer frustrating moments. And when they aren’t as stressed, they are empowered to fix those issues,” Gould adds. “Stress is a good thing if it has an outlet, but if it has no outlet, it actually destroys from within.” That message really resonated at DCI. After going through downsizing and other cutbacks during the recession, the company still had lingering conflict and miscommunication between management and union employees, Evens says. For four years, Gould has worked with DCI on improving its culture through seven lean principles courses and 21 rapid improvement events. Gould typically spends as much time as it takes letting small, cross-functional groups vent about nagging issues, eventually forging a sense of teamwork to tackle a

shared problem. Weaving in his stories, Gould puts the group at ease and helps them open up. “Sam is a good listener, and it’s a cathartic experience,” Evens says. Thanks to Gould, DCI has seen walls broken down between management and union employees. Plus, all staff are more willing to share their feedback because they understand they will be heard, Evens says. In turn, lean projects have eliminated waste and made DCI’s operations more efficient. “Culturally we needed to improve, and I believe we have improved dramatically. We were at a fairly low point in our organization’s history,” Evens says. “It’s been about building ownership with all employees. With all the dollars we saved with efficiencies and better procedures, we’ve developed a better culture with people enjoying work more.” And that’s what Sam Gould is all about. “I’m trying to work myself out of a job,” he says. “You want clients to be capable and see that lean tools have the power to transform a company and its culture.”

2015

BUSINESSEVENTS Enterprise Minnesota’s Business Events offer outstanding professional expertise and practical business solutions to improve competitiveness and growth opportunities for Minnesota’s manufacturers and related industries. DATE 9/16/15 11/11/15 12/9/15

TOPIC

CITY

How to Generate Quick Wins to Reignite Your Lean Journey

Bloomington

What You Need to Know to Increase the Value of Your Business

SE Minnesota

How ISO Will Transform Your Business

Vadnais Heights

STATEWIDE ENTERPRISE MINNESOTA EVENTS 10/26/15

Statewide CEO Council Meeting

Brooklyn Park

Exclusive to Enterprise Minnesota CEO Peer Council Members

5/3/16

2015 State of Manufacturing® Statewide Release

Minneapolis

For more information and registration, go to http://enterpriseminnesota. org, or email/call us at events@enterpriseminnesota.org or 612-455-4239.

SEPTEMBER 2015 ENTERPRISE MINNESOTA /

Final Word

Missing the GAP Manufacturers (temporarily) lost a valuable asset in Minnesota’s Growth Acceleration Program

ost amid the highly charged acrimony that surrounds the conclusion of virtually any legislative session these days, are the unfortunate casualties of some very good programs. Among those this year was Minnesota’s Growth Acceleration Program (GAP). Before I continue, I should say that I have great respect for the legislative process and for what our citizen legislators actually are able to accomplish each year. I spent a good decade in the early part of my career working in the U.S. Senate and in Minnesota’s legislature. The complicated political cross pressures that are constantly fighting with each other make for a great

GAP has been a remarkable program that leads to job creation, job retention, and future business growth for small and medium-size manufacturers. government and sometimes an ugly process. It’s never as easy as the pundits would have you believe. Having said that, GAP has been, for seven years, a remarkable program that leads to job creation, job retention, and future business growth for small and medium-sized manufacturers. It is a state matching investment that enables these manufacturers to get access to business improvement services through Enterprise Minnesota and its partners that they would not otherwise get. It works like this: to be eligible for GAP, companies must be located in Minnesota, be a manufacturer or be in a related industry, operate as an independent profit center, and employ 32

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Lynn Shelton is director of marketing and communications at Enterprise Minnesota.

250 or fewer full-time employees. They must also have a business plan for improvements and demonstrate an economic need. Significantly, all companies that receive GAP resources must match one dollar for every dollar of GAP funds they receive. The results of this program have been nothing short of remarkable. Since its inception, GAP has helped 245 Minnesota manufacturers invest in their plants. This is a program that truly is an investment, not merely a government outlay. Consider this: • • •

GAP has created and retained 2,146 Minnesota based jobs. It has boosted company sales by $148 million. These companies have saved $29.9 million in business costs.

But most significant of all, recipients have generated a $30-$1 return on investment; some have achieved as high as a $40-$1 return. A great example of GAP’s success can be seen at Mactech, a Red Wing-based provider of on-site machining services. Its president is Joel Wittenbraker, who is also a board member at Enterprise Minnesota. Joel estimates that Mactech has engaged in nine GAP services over the years. His first project was how to conceive a process control layout in a new facility. Since then, he’s done marketing, international marketing, value stream mapping, and Internet production, among several others. “It was a huge enhancement,” he remembers. “It allowed us to run a business where we tripled our revenue in a threeyear time period. I eventually might have gotten there, but GAP was the catalyst.” The real misfortune of the Legislature’s failure to reauthorize GAP is that the program was at an all-time high in popularity. Company demand for it was outstripping current available funding at the time. There are many losers in this equation. First and foremost are the job creating manufacturers who will lose access to programs that will help them grow and create high quality manufacturing jobs—programs that in almost every case they would not have the financial capability to afford on their own. But also think about the communities that rely on manufacturing to create jobs. Think also about the larger OEMs whose suppliers will be less able to match the increasing sophistication of their market requirements. The bottom line is that GAP was not left on the cutting room floor because legislators didn’t like it. In fact, legislators have shown a great bipartisan appreciation for GAP because it is a program that works. It was the victim of a larger issue. Hopefully, GAP will return next year.

A whopping 95 percent of manufacturers who have a formal planning process expect increases in gross revenues and profitability in the coming year. — 2015 State of Manufacturing® Enterprise Minnesota’s expert strategy consultants help manufacturing companies achieve operational excellence and profitable growth.

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