Strengthening the Chain
Part investigator, part matchmaker, Enterprise Minnesota’s Amanda Baumgart is seeking better ways to link OEMs and suppliers.
Amanda Baumgart, research analyst, Enterprise Minnesota
The Auditor’s View
An experienced professional discusses how organizations might view — and improve — their ISO audit experience.
A Surge in Tech Ed
Recent investments at two central Minnesota technical colleges open doors to a more robust manufacturing workforce.
Beyond ComparISOn
How Enterprise Minnesota uses its ISO certification to deploy a superior management system.
Moving Things Around
Bloomington’s QualiMac finds that even small efficiencies on the plant floor can yield big gains in profitability.
STRENGTHENING THE CHAIN
Part investigator, part matchmaker, Enterprise Minnesota’s Amanda Baumgart is seeking better ways to link OEMs and suppliers.
Blooming Prairie native Kurt Schrom returns to run Metal Services, bringing extensive big-company manufacturing experience.
The Power of Strategic Planning Strategy expert Steve Haarstad encourages every manufacturer to maximize the value of a written plan.
In Search of ‘Aha’ Moments Consultant Amy Hubler helps clients think about market segments.
A Bedrock of Support
Minnesota’s Initiative
Foundations play a critical role for manufacturers in Greater Minnesota. Visit
Home Grown
Beyond ComparISOn
How Enterprise Minnesota uses its ISO certification to deploy a superior management system.
For as long as we’ve been helping manufacturers grow profitably, Enterprise Minnesota has encouraged clients to pursue ISO certification; 10 years ago, we decided to go through the process ourselves. Like a baseball coach who’s played the game himself, we thought going through ISO would give us insights that we could only develop as a “player.”
We started the certification process just as ISO was evolving from ISO 9001:2008 to the 2015 standard, shifting from
Like a baseball coach who’s played the game himself, we thought going through ISO would give us insights that we could only develop as a “player.”
a product-based quality control system to a management system. The changes have made the stamp of approval more relevant, both to us as a service organization and to our manufacturing clients.
Thomas Paserba, our ISO auditor for the last 10 years, recently sat down with me to discuss ISO and Enterprise Minnesota’s journey through certification. He emphasized the crucial changes in the updated standards, noting that the quality control emphasis of the previous standard focused on the product, while ISO 9001:2015 embraces quality assurance, a top-down holistic system for the whole business.
That shift makes ISO a natural fit for our organization because it allows us to include
every employee in the management system. Involving everyone means those closest to the areas where we need improvement can identify and drive changes.
The added flexibility in the 2015 standard lets us select and drive the documentation aspects of the process rather than requiring us to follow a predetermined set of standards. Many companies let concerns about ISO’s documentation requirements deter them; Paserba encourages them to avoid overthinking that aspect of the process. We’ve been able to prevent unnecessary documentation by focusing on just four categories of key stakeholders, and that’s worked well for us.
We’ve also learned that internal auditing across our organization maximizes effectiveness by boosting the knowledge, understanding, and support of the ISO system among our team. Having employees from one area audit those in another gives fresh perspective and opens eyes about how interconnected we all are.
It’s still relatively rare to find a service company with ISO certification, but it’s been a great fit for us. With its updated focus on the entire organization, the level of engagement it encourages from employees, and the flexibility it offers us to determine our own areas of focus, it is an outstanding management system.
I encourage you to read the full Q&A with Paserba on page 20 and consider if this might be the right time for your company to consider ISO certification.
Bob Kill is president and CEO of Enterprise Minnesota.
Lynn K. Shelton
Editorial Director
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Sue Bruns
Gretchen DeSutter
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Tom Mason
Kate Peterson
Mary Lahr Schier
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Amy Jeanchaiyaphum
Robert Lodge
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SUCCESSES
A Mid-Career Entrepreneur
An eye for innovation and strong customer service has helped Jason Smith grow AIT from a one-machine, one-employee company to a three-shift operation.
Owning and manufacturing sophisticated, intricate, precise assembly cells — some the size of a human hair — wasn’t AIT president Jason Smith’s original plan. And yet today, he knows starting, developing, and growing AIT to create precision components is the best plan, especially at home in central Minnesota where his family lives, and where he feels there is the best talent in the state.
Smith grew up in the St. Cloud area. Driven to understand how things work, he earned a degree in engineering from St.
Cloud State University and jumped into a 25-year manufacturing career that would include research and development, engineering, and manufacturing experience.
A leadership change at the company he thought he might retire from prompted his course change. At the back of his mind was a long-held ambition of running his own business that he could shape with a vision of service excellence. And then he realized, that time had arrived.
So, he secured funding and bought his first machine. His last day as an employee
was just two weeks before the official COVID shutdown. “After working for and with world-class companies including primes [big government contractors] like Lockheed Martin and BAE, I knew I wanted to start something amazing.”
Then just as he was dipping his toe in the manufacturing ownership pool, he faced the temptation to step onto a secure, predictable path with a company he admired. After touring their facilities and speaking with the team, they gave him a nice job offer, which perhaps a few months earlier might have
carried his signature and start date.
“In a way that offer was a doubleedged sword, or maybe it was a blessing, because when things got tough there was this feeling that if this doesn’t work out, I can find something,” Smith says. “But that’s not me. When I’m in, I’m all in, and that offer helped me realize this is what I want to do.”
With that Midwest mindset and the work ethic he admires in his employees, he set out to create a client-focused company where he would want to work and where employees would want to stay. AIT quickly achieved its ISO 9001 certification in three months with core competencies in machining, turning, EDM, automated assembly, high-speed metal stamping, and high-speed cable assembly. The company is focused on manufacturing intricate yet complex connectors and cables for the aerospace and defense industries.
Parts of the business development process were a shock to him. The Greater St. Cloud Development Corporation (GSDC) helped by providing essential connections, including to SCORE, a Minnesota group of volunteers who are expert business mentors. One consultant in particular, Jerry Hirschfeld, really stepped up for Smith and is now a life-long friend.
“I don’t think I could have made it without Jerry,” Smith says. “When I had a confidence gap, he filled it.” Hirschfeld’s years of running a business, including tech companies, provided Smith with ideas that drove inspiration and shared insights that helped him avoid problems. They still talk regularly, calls that Smith looks forward to.
With this support, Smith ran his single machine 24/7 and continued to grow the business. He was customer support, accountant, technology developer, and the guy who answered the monitoring systems on his machines at the facility at 2 a.m.
When you work with hair-fine pieces that serve as electronic contacts and physical connectors, precision is key. This is where his technology investments have really served to help support business growth. Robotic arms serve an integral role at AIT. These arms load raw materials, tend machines, assemble cells, and pick up these small components that are hard for the human eye to see.
The Nakamura MX-100, a more recent investment, also provides key capabilities by milling and turning complex geome-
tries for parts. The team feels this amazing machine can make almost anything AIT needs in a single setup and operation, with precision milling and turning for intricate shapes and complex components. This addition to the AIT tech roster sets them on a road for additional growth and opportunities in new industries.
Over just a handful of years, AIT grew from a single, turn-key machine with one employee to a 25-person, three-shift team that has expanded into the energy and medical industries. “We have had a strong base and mature systems from Day 1,” Smith says. What sets AIT apart, he adds, is high-quality employees and a strong focus on customers. “We can compete worldwide.”
“After working for and with world-class companies including primes [big government contractors] like Lockheed Martin and BAE, I knew I wanted to start something amazing.”
–Jason Smith, founder and president, AIT
In 2024, Smith hired operations manager Scott Zadow to help the company evolve to the next level. Zadow recognizes how growth affects culture. “AIT is a young company, and we know as the SKU numbers increase, so does the amount of employee stress,” he says. Among his priorities are getting what he
considers the company’s tribal knowledge out of the heads of a few, and “ensuring we have documentation, control plans, and processes to maintain our high standards and reinforce strong work/life balance.”
One near-term goal is moving the team to a four-day work week.
Next generation knowledge sharing
Smith also understands that AIT’s future success hinges on the company’s ability to attract and retain young talent. The company offers marketing and engineering internships, and this year hired recent University of Minnesota mechanical engineering graduate Sam Peterson.
“I am really impressed with him,” Smith says. “He is killing it.”
Peterson was looking for an opportunity to do more than mechanical engineering at his first job. “I knew many design engineers never see their designs implemented because the manufacturing is outsourced,” Peterson says. AIT offered design work, automation, robotics, and assembly. “I have
been able to work on some pretty big projects. I worked on the design of complex interconnect components that leverage the advanced capabilities of the Nakamura MX-100, and I helped justify that purchase.” And now that the Nakamura is in place, he designs components that enter the MX-100 to be cut.
Peterson says he was hands on at every stage of the design process from early rendering and modeling to taking it to the floor and working with the experienced machinists and operators directly.
Growth through technology
Investing in key technology, like the Nakamura, is capital intensive and yet critical investment for manufacturing growth. “I started AIT with one machine, and if I left it at that life would be simple but pretty boring,” Smith says. “Growth comes through key technology investments.” In 2024 alone AIT invested $2.5 million in equipment including the Nakamura and the Citizen machine, which is a 12-axis, or small diameter, machining center.
Smith acknowledges several local partners for their help, including the GSDC (Greater St. Cloud Development Corporation) and DEED (Minnesota Department of Employment and Economic Development), the St. Cloud Community, and the State of Minnesota Investment Fund (MIF), which helped support their equipment investments.
And now, nearing the 5th anniversary of AIT next year, Smith takes little time to look back except to reflect on two things. First, would he do it again? “In the roughest times, you just have to put your head down and go,” he says with a chuckle. “And yes, on most days, I’d do it again.”
Second, did he build the customerfocused company that holds a unique position for how they respond to client needs, especially if something isn’t perfect? “We are definitely that company and that team. I knew we could find the talent and the right people here at home in central Minnesota — and truly our people are why AIT is successful and will continue to grow.”
—Gretchen DeSutter
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PRODUCTIVITY
Moving Things Around
Bloomington’s QualiMac finds that even small efficiencies on the plant floor can yield big
Leaders at a suburban metal fabricator business estimate that centralizing part of their shop floor is saving hours of work each week and producing considerably more revenue each month.
QualiMac is a 33-person job shop in Bloomington that produces custom metal component parts that stamp names and numbers onto new credit cards, for instance, or parts for machines that print passports. Helped by Enterprise Minnesota consultants, QualiMac administrators reorganized and centralized a portion of the shop floor to reduce the number of figurative and literal steps workers there need to take in a given day.
That meant positioning a computer in the center of the shop floor so staff don’t have to walk to a far end of the building to get the necessary schematics for a fresh job; standardizing each workstation so they don’t have to head to another area to find necessary tools; putting production schedules in a more convenient place, and more. Relatively small changes can be crucial.
gains in profitability.
Shaving a few minutes at a time from each employee’s routine has reportedly added up.
There are enough manufacturers in the Twin Cities and the Midwest that, if one isn’t running as efficiently as possible, it can be bested by a competitor, according to Brady Bjorgaard, QualiMac’s president.
“You’re going to get outbid,” he says. “Somebody’s going to be doing it better and quicker.”
“We moved everything closer to where it needs to be produced,” says Brady Bjorgaard, QualiMac’s president.
Shaving a few minutes at a time from each employee’s routine has reportedly added up.
In the aggregate, the five workers in that section of the shop are spending about 100 fewer minutes walking to and fro each day, according to Greg Hunsaker, a business growth consultant at Enterprise
Minnesota. Company staff estimate that and other efficiencies could produce an additional $1.5 million in total sales over the coming three years.
More broadly, QualiMac staff are working less overtime and the company itself reported greater monthly revenue with 90% on-time deliveries, according to Bjorgaard.
“Profits are up,” Bjorgaard says. “Everything’s up. We’re running really well right now.”
The company is one of four Twin Citiesarea manufacturers with the same owner. QualiMac and Enterprise Minnesota staff revamped a specific part of the shop floor at one of those companies because they wanted to start small and get workers themselves on board.
“We took a smaller area with good employees where we knew we’d get buy-in, and then we basically perfected that area,” Bjorgaard says. “And now we’re spreading it to the other areas of the building.”
At QualiMac, company staff and Enterprise Minnesota consultants stood on a figurative “X” for 30-plus minutes and noted where there might be waste while they watched staff fashion parts with verti-
Brady Bjorgaard, president of QualiMac
cal mills. They saw that workers frequently had to leave their station to retrieve tools, load new digital schematics, and so on.
“Why is all this walking happening?” Hunsaker asks rhetorically. “Why did they have to go and get information? Why is it not right there? Why do they have to go to tools? Why are the tools not right there for them? Why do they have to walk into this other room 50 feet away to go get drawings to do their job?”
Tools in that section of the shop now fall into three tranches: those used multiple times each day, those used more sparingly, and those used, perhaps, only a few times each year, according to Bjorgaard.
Staff in the revamped vertical mill area are excited about the new layout, Bjorgaard reports.
“Everything’s right there at their finger-
effort while the men who’d typically held those jobs were deployed overseas, Hunsaker explains.
In a nutshell, consultants evaluate a given process at a company, try to improve it, then standardize it so new hires can more easily learn the ropes.
After Enterprise Minnesota consultants
and think about it,” Rusing explains. “We don’t want to judge the people, judge the movement, or judge how they’re doing things, but, rather, we want to create the most efficient process that’s going to give us the best quality product at the end of the day.”
Once QualiMac has standardized each task, Rusing says, the next step might be
Left to right: Dao Yang, inspection; Lam Thai, Class A machinist; Rob Stone, senior supervisor; Zach Martell, Class A machinist; Brady Bjorgaard, president
A Quarter-Inch Advantage
‘Long throw’ commercial printers can mean new markets for Squid Ink.
The distance between the first and third words in this sentence is about as wide as the gap between a new line of “long throw” commercial printers made by Brooklyn Park-based Squid Ink and the products upon which they print. It’s small — about half an inch in total — but it’s approximately twice as large as
earlier lines, which needed to be at most a quarter-inch away as they spit ink onto cardboard boxes, propane tanks, bags of concrete, or other products zooming past the stationary printer on a conveyor belt. The company designs and builds printers that ultimately go to work for companies like Kraft Foods or 3M.
“If you go to a Lowe’s or Home Depot, every item in that building has some kind of inkjet code on it,” says Chad Carney, the vice president of marketing for Engage Technologies, which owns Squid Ink. “We make the printers that print those codes.”
A longer distance between print-er and print-ee may not seem like much, but it means the company can sell its printers to a broader range of customers in different markets, according to Carney.
The longer distance is due to a newer and more powerful “print engine” manufactured by Konica Minolta. The print engine is the brains behind the operation, Carney says, and Squid Ink is using this newer engine to build printers that eject ink farther than older predecessors and in smaller droplets.
“It’s like Boeing using a Pratt & Whitney engine,” Carney says. “We’re using the engine, and we’re designing the printer around it.”
The print engine is the brains behind the operation.
The more robust print engine can help minimize or eliminate the “bowtie effect” on curved surfaces, in which a printed barcode or logo is legible in the middle but spread out or faded — or outright illegible — on either side, Carney explains. Using a printer with a longer throw and more powerful jets of ink can prevent a hard-to-read or fuzzy code.
The stronger engine can also cover up problems with, say, the conveyor belt that sends packages past the printer because products are less likely to smack into the printer, possibly damaging it. Repairs could cost $5,000 to $10,000. It also leaves more room for materials that aren’t handled as tightly — a line of boxes that aren’t aligned perfectly or that are bowed outward slightly.
Walmart, for instance, will give suppliers a figurative slap on the wrist if barcodes won’t scan properly, then a fine, then stop doing business with that supplier entirely, Carney says.
“If you have illegible codes, then why are you printing the code to begin with?” he asks rhetorically. “Companies like [Walmart], they don’t mess around.”
Joe Bowen
PHOTOGRAPH BY AMY JEANCHAIYAPHUM
Jake Zender, vice president of sales and Chad Carney, vice president of marketing
Planning Ahead
Platinum sponsors of the State of Manufacturing® prepare for the next edition of the iconic survey.
The platinum sponsors of Enterprise Minnesota’s State of Manufacturing (SOM) survey recently convened to kick off the 2024 edition of the project.
The SOM has evolved into one of Minnesota’s most popular — and consequential — sources of business data.
Observers agree the source of SOM’s
popularity and influence is its sole purpose of producing rigorously objective data.
The SOM starts with survey research conducted by pollster Rob Autry, founder of Meeting Street Insights (named America’s top pollster in 2023), who has conducted the survey since its inception. He and his team annually recruit a statistically valid representative crosssection of at least 400 Minnesota manufacturers. Focus groups enable executives to complement this data with their experiences and personal anecdotes.
Over time, the SOM has produced a coalition of advocates for manufacturing throughout Minnesota. These supporters of the industry appreciate the value of manufacturing to our state’s economy. They also acknowledge their diverse roles (business, economic development entities, public policy makers, grant-makers, and other non-profits) in helping to keep manufacturing thriving.
Bob Kill, president and CEO of Enterprise
Minnesota, says that enduring relationships with platinum sponsors are key to SOM’s long-term relevance. “Bringing in one of the nation’s top pollsters year after year is an expense we couldn’t afford without their financial investment,” he says. But their influence goes beyond money, he adds. Each sponsor represents an exclusive market segment in the coalition of manufacturers. “They circulate our results to their networks each year, which increases our breadth and credibility.”
He adds that sponsors also benefit from the long-term relationship they enjoy through this partnership.
BUILDING TOMORROW, TOGETHER
PROFILE
An Adapting Framework
Pine River’s Trussworthy uses agility to survive — and thrive — in the fluctuating housing market.
The housing market had been booming for more than a decade when Craig Anderson decided to start a truss manufacturing business in Pine River. Unfortunately, the timing was less than ideal. By the time the company’s first truss came off the line in April 2006, the housing bubble was already threatening to burst.
Anderson entered the truss business after several years’ experience in the building trade and a brief stint teaching math and science in Brainerd. He had worked in a truss plant in Pillager, doing everything
from sales to design to quality control and shop work — and loved it.
When an opportunity came along to manage a truss plant in Becker, Anderson passed it up. He didn’t want to relocate and he was not interested in management; but when people he’d worked with suggested he start a truss company of his own, he decided to explore the options.
He connected with Cass County Economic Development, put a business plan together, formed a corporation in 2005, and started looking for a building site. His
advisor suggested checking out the town’s industrial park.
Anderson’s reaction: “Pine River has an industrial park?” He’d lived in Pine River his whole life.
“It was basically a cornfield and some woods,” he recalls. The City obtained a grant for the infrastructure — roads, water, electrical, gas. They cleared the area and Anderson and his wife Brenda bought a lot and some equipment with a revolving loan from the City and two loans from Pine River State Bank. The company had two other loans, too.
“It was very creative,” Anderson recalls. “Then a bunch of us got together — some of them investors.” They built the shop themselves and set up the equipment for the first business in Pine River’s industrial park.
Anderson’s son Eric came up with the name “Trussworthy,” and the company started producing trusses in 2006 with a crew of 12.
On paper, the gross sales numbers didn’t appear too bad for a new company almost doubling in sales between 2006 and 2007. Then things leveled off and dropped somewhat by 2009, with the full effect of the housing industry’s implosion.
The company failed to make a profit in the first four years, Anderson says. “We never had the benefit of any really good years leading up to the bubble bursting. We were pinching pennies every way we could. The lenders were getting very nervous — and rightfully so.”
This led to what Anderson describes as “some pretty interesting meetings at our local bank,” followed by a connection with the Small Business Development Center in Brainerd and a mentorship program.
They set a break-even point, formed a plan, and presented it to the bank. The bank accepted their proposal.
Four of the owners who worked in the company held off on getting paid or took smaller paychecks. “My wife and I took the biggest, longest hit,” Anderson says. “We went for three months without a paycheck and then made it up over the next year and a half or so.”
They followed their plan closely, and by the end of 2009 it was starting to pay off. In 2010, Trussworthy made a decent profit; gross sales numbers from 2006 had more than doubled. They doubled again by 2015. Continuous growth hit a peak in 2021. The following year, inflated lumber prices made costs rise, but, Anderson says, “We were so busy it was almost unmanageable.” Lead
Left to right: Dan Golden, sales manager; Earle Daniels, plant manager; Craig Anderson, president and general manager
time on orders jumped from 6-8 weeks to 16 weeks.
In the past three years, Trussworthy has worked with Enterprise Minnesota’s business development consultant Bill Martinson and business growth consultants Abbey Hellickson, Ally Johnston, and Eric Blaha for continuous improvement in leadership and production flow.
Today Trussworthy has 48 employees — some of them seasonal, as the busiest time is from May to October. The plant has grown from 15,000 square feet to 28,000 with another 7,000 square feet for cold storage. Recently, Anderson and his wife purchased another lot in Pine River’s industrial park for future growth.
Equipment has advanced from manual saws to fully automated CNC saws and jigging equipment, laser guides, and
“We never had the benefit of any really good years leading up to the bubble bursting. We were pinching pennies every way we could.”
a top-of-the-line press table. The time needed to set up a truss has dropped from 30 minutes to about 30 seconds.
Anderson often hires new employees without prior experience who have had to learn on the job, but today, he says, “We have experienced crews, and we’re putting out more product.”
Some employees, like plant manager Earle Daniels, have been with Trussworthy for almost 20 years. Sales manager Dan Golden is transitioning into the chief managerial role as Anderson maintains the title of president.
The man who loves building trusses but hadn’t wanted to be a manager found strong business partners, advisors, mentors, and lenders. Now he’s phasing into fewer on-site hours and is happy to hand off the managerial reins.
Anderson says the 2024 season is manageable and strong. Going forward, the company is focusing on production and efficiency.
“We have a really good core operation,” he says, “and it’s paying off. We’re seeing things this summer that are a spin off from a year or two ago, and they’re finally coming together.”
Sue Bruns
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INTERNAL LEADERSHIP
Next Level Engagement
Pequot Manufacturing trains all employees — not just those in production — in a process that combines enhanced leadership with continuous improvement.
equot Manufacturing is so committed to employee development that it includes 12 hours of annual training for each employee as one of its key performance indicators (KPIs). Company executives train every one of its 248 employees — regardless of job function or department — in the process of Leading Daily for Results.
In May, the Pequot Lakes-based manufacturing, machining, and fabrication
company completed training 26 leaders encompassing all departments. “The thought process is to train up our leadership teams on how to utilize this information, and then take that to their teams to improve communication, visibility, and execution of the daily plan,” says Ryan Koslofsky, Pequot’s director of manufacturing.
Experts at Enterprise Minnesota developed Leading Daily for Results to help
companies enhance leadership skills while boosting continuous improvement. At its core is a visual representation of progress toward daily objectives. Often called the “huddle board,” it serves as the scorecard for the team, with each group customizing its board with goals and measurements.
The boards frame the agenda for regular meetings that launch each team into their work. At Pequot, they also serve as the focal point for “directors’ walks” during which company leaders visit each department for status updates on progress toward goals and discussions about issues surrounding their work.
Dozens of companies have implemented Leading Daily for Results, but typically with production employees. What sets Pequot’s approach apart is that it rolled the process out to the entire company, from scheduling and applications to engineering and logistics. The goal is to enhance communication among departments and
A customized “huddle board” provides a visual representation of progress toward daily objectives.
drive the whole organization toward its objectives.
The process also boosts employee engagement at Pequot, particularly when teams enjoy the flexibility to set and change their own goals. “We gave them carte blanche on what they track on their boards,” says Glen Young, Pequot’s direc tor of support operations.
While Koslofsky says it’s too soon for measurable, topline results, leaders already have seen improved communi cation and increased sensitivity to what other departments are doing and what they need from their coworkers. “They have the tools they need to take a step back and look at a bigger picture, at how they operate, and what issues they’re coming across. And that leads to cross-functional communication,” he says. “We’re building a link between individual departments so they can understand what their internal customers need on a daily basis.”
The directors’ walks have been par ticularly helpful in helping teams track activities on their boards, Young says. “They are more aware that the next person who touches their work is their internal customer, and we’re going to measure their performance on that customer satisfaction.”
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The boost in communication goes both ways. Young says when company leaders can see what the teams are working on, they can envision the potential consequences of changing a team’s priorities. “Most of them have their priorities right on the board. Now you can see how reshuffling the deck can create collateral damage, and it might change your decision making a bit,” Young says.
Michele Neale, an Enterprise Minnesota business growth consultant for talent and leadership development, has worked with Pequot for several years and says Pequot’s process helps the company focus on problem-solving “with intent, engagement, and accountability.”
She’s impressed with how leaders embraced the process. “Many initially thought this wasn’t necessary — their departments already had daily meetings. But they quickly realized the value of tying their goals to the company’s KPIs and taking that connection out to all employees,” she says.
Neale’s colleague Ryan Steinert, a continuous improvement expert, says, “Tying each area’s metrics to the company’s KPIs allows Pequot to have better conversations about how to do the right thing for
“Many initially thought this wasn’t necessary — their departments already had daily meetings. But they quickly realized the value of tying their goals to the company’s KPIs and taking that connection out to all employees.”
–Michele Neale, business growth consultant, Enterprise Minnesota
a lead is gone, it’s clear how well they’ve trained their teams. “Multiple times we’ve had team members come up and take that lead’s place and walk us through the board, and they do just as good of a job as the lead does,” he says. “They know exactly what’s going on. That is definitely a win.”
Look for a detailed update on Pequot’s progress with Leading Daily for Results in an upcoming issue of this magazine.
—Kate Peterson
Laser Focused
Precision approach gives Ace Laser the inside track on defense, aerospace work.
For 15 years, Justin Oestreich raced open-wheel dirt cars under the name “A-Strike,” which sounds like his last name. He built or modified his cars to make them faster and more responsive and, along the way, he won many races on the midwestern circuit. His knowledge of cars and driving helped him build better lasercutting systems for his company, Nowthenbased Ace Laser Technologies, Inc.
“When I look at a laser machine, I look at it the same way that I looked at a car,” he says. Issues like how to change direction, handle corners, or distribute weight are top of mind. “It’s just mechanics and physics and the way that weight moves around. Even when we are setting up jobs, we have to keep that in mind.”
That kind of attention to detail differentiates Ace Laser from its competition, he says. “We will dissect the program down to each little line and arc and adjust where it needs to be instead of adjusting the whole part.”
This precision approach has made Ace Laser a go-to shop for electric motor laminations, precisely cut thin metal sheets that are stacked to form the core of an electric motor’s stator and rotor to increase efficiency. After 25 years in business, Ace Laser fills a niche in the market with many of its clients serving the defense and aerospace industries where precision is paramount.
The company recently earned its ISO 9001 certification through Enterprise Minnesota, a step that sets it up for future growth. “They knocked it out of the park,” says James Thomas, a business growth consultant for Enterprise Minnesota, who assisted Ace Laser in the certification process.
Oestreich started Ace Laser in a pole barn on his home property in 1999. He’d worked as a laser operator and engineer for several years, and in that time, had learned every aspect of laser cutting technology, from system structure and maintenance to programming
and AutoCAD. “I thought, ‘Why don’t I just do this for myself?’” he says.
Using a $110,000 Small Business Administration loan, Oestreich bought a used laser system and other equipment to set up shop. He continued to buy and sell laser equipment to allow him to build and repair the systems of his design, once buy-
While founder Justin Oestreich was apprehensive about the ISO audit and the amount of work required for the certification, the process was beneficial. It reinforced the way the company already operates.
ing three laser systems off a truck to use for repairs. Currently, the company has three laser systems employing 11 lasers, with a fourth system due to come online later this year. Oestreich still keeps plenty of spare parts in the shop — he’s moved out of the pole barn to rented industrial space — in case a system breaks down or he needs to build a spare during busy times. While Oestreich’s original business plan
PHOTOGRAPHS
Justin Oestreich, owner
Tate Kostreba, laser operator
was to work mostly on plastics and nonmetals, a chance to make metal motor laminations for St. Paul-based LCS Company changed the direction of Ace Laser. “At first it was very difficult to produce them because the accuracy is really tight, the tolerances are really tight,” he says. “It’s a very detailed part, but we dialed in our process and we got good at it. And, they just buried us with work over the years.”
Ace Laser can produce laminations with tolerances of .001 inch now. “It is a more stressful type of work because everything has to be perfect,” Oestreich says, “but it sure beats having to lift heavy sheets of metal onto the lasers.”
Laser fabrication of laminations is now 90% of the business. Order size has also grown recently, Oestreich says. “A large order used to be 5,000 parts; now it’s 100,000.” The company has sales around $1.5 million a year and six employees. Ace Laser’s warranty program is “one of the best I’ve seen,” Thomas says. “They really go out of their way to make sure the customer is satisfied with the products.”
Getting the ISO 9001 certification
was an important step for the company, Oestreich says. More clients expect the certification and the process provides a good checks-and-balances system for employees. While he was apprehensive about
the ISO audit and the amount of work required for the certification, the process was beneficial. It reinforced the way the company already operates.
“I think our processes were already solid, as far as not having any loopholes and documenting what we do,” he says. “If there is something missing from your process, it’s a good way to find it.” The
most significant change the company made through the certification was improving its training procedures and how they are documented.
“At some point I’m going to retire,” Oestreich says. “An ISO certification in place makes that transition smoother when the time comes because it’s not all in my head. It’s documented so that anyone can follow the procedures.”
With the ISO in place, the company is now pursuing an International Traffic in Arms Regulations (ITAR) registration, which will assist with the defense work that it is doing. The company is replacing its first CO2 laser with more updated and less bulky technology.
“Once I get to that point, I’d like to step back from shop work and focus more on sales,” he says.
Does that mean he’ll be spending more time at the racetrack? No. Oestreich sold his car and left racing three years ago. “When you’re racing, it’s what you do every weekend,” he says. “Now I can go fishing or out on the boat once in a while.”
—Mary Lahr Schier
Bob Kill, president and CEO at Enterprise Minnesota, admires Hubler’s varied experiences. “Her tremendous diversity of background helps her connect in different ways to our small- and medium-sized clients. She talks about processes and techniques you might not see except at a large company.”
Inside Enterprise Minnesota
An ongoing series.
STAFF
In Search of ‘Aha’ Moments
Consultant Amy Hubler uses her extensive experience to help clients think creatively when thinking about individual market segments.
When Enterprise Minnesota business growth consultant Amy Hubler helps manufacturers improve their bottom line through strategic marketing, she draws on 20 years of deep and diverse experiences in agribusiness, the airline industry, a digital marketing agency, and even the business side of public television.
“I’ve seen a lot,” she says. “Everywhere I’ve worked, I’ve learned something new and different. I think it makes me more effective in terms of my ability to help out our clients.”
“And the nice thing about being at Enterprise Minnesota is my ability to aggregate all that and share different stories from my background relevant to the situation at hand.” Hubler uses that experience to help manufacturers craft and implement datadriven strategies targeted to the company’s individual needs.
Bob Kill, president and CEO at Enterprise Minnesota, admires Hubler’s varied experiences. “Her tremendous diversity of background helps her connect in differ-
ent ways to our small- and medium-sized clients. She talks about processes and techniques you might not see except at a large company.”
A new client recently reported to Kill that he found value in Hubler’s experience. “He was very impressed with some of the things she’s done in the past. He saw it as a level of credibility.” Hubler grew up in Eau Claire, Wisc., but followed her family roots back to the Twin Cities for college and never looked back. She studied business and Spanish at the University of St. Thomas. While working at Cargill, she received an MBA from the Carlson School of Management at the University of Minnesota. She joined Northwest Airlines and spent the next 10 years working in various marketing and communications roles, including international pricing, strategic alliances, and B2B sales.
Hubler says it was at the Carlson School of Management where she learned that “marketing is not a magic wand that can solve a company’s problems. It typically needs to be coupled with a sales strategy as well,” she says. “And those programs can take some time to develop. If you come to us when you’re in crisis mode, that’s not as ideal as
coming to us before you’ve hit a crisis.”
Hubler’s data-driven consulting model views marketing through the lens of revenue growth.
“She’s very passionate about how marketing and revenue growth should drive new business, not just as continuous improvement,” Kill says. “She is thinking about it more broadly.”
Toward that end, she helps manufacturers develop strategies that address awareness, consideration, purchase, advocacy, or loyalty, emphasizing what is most urgent at the moment.
But the secret sauce to her success, she says, is helping clients analyze their customers through segments. This approach helps them realize the inadequacies of thinking that a one-size-fits-all approach will address the purchasing decisions of all customer groups. “It’s an ‘aha’ moment,” she says. “They often don’t think of their customers as being different from each other.”
And that’s a key part of company strategy: How do you interact with different types of customers differently?
The next step in Hubler’s segmenting anal-
“I’ve seen a lot,” Hubler says. “Everywhere I’ve worked, I’ve learned something new and different. I think it makes me more effective in terms of my ability to help out our clients.”
ysis — and the next potential “aha” moment — encourages manufacturers to analyze the value of each segment. Which customer segments do you like, and which ones do you not like? Which ones do you want to keep doing business with? Which ones, perhaps, do you want to back away from?
Manufacturers are frequently surprised, she says, when the customer analysis reveals that a perceived prime customer doesn’t deliver optimal margins. “They can find that they spend way too much staff time and effort to care for customers who are not worth what that customer segment
generates for them.” Marketing experts frequently call those customers “noise,” Hubler says. “It’s kind of noise in the background that distracts you from focusing on a different customer segment that will help you grow.”
Manufacturers also benefit when they view marketing strategy as data-driven work. Is there sales growth? Is there increased website traffic? Is that being converted to sales?
Hubler says manufacturers should consider applying the concepts of continuous improvement. Typically, that is applied to the production floor, but it also applies to marketing. “You try some things out, and if they don’t work, you make some adjustments, measure them, and move forward.”
It always works. “Anytime you work with someone from the outside who can pull from their experience to help you develop a strategy and a plan and then help you execute that plan by reviewing results and seeing what’s working, it’s going to work. And if it doesn’t work, we can make some adjustments.”
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Four Questions
Tim Penny,
president/CEO, the
Southern Minnesota Initiative Foundation
The Southern Minnesota Initiative Foundation is a key advocate for manufacturing. What drives that support, and which activities most directly impact manufacturers in the region?
Our motto is “Collaborating for Regional Vitality,” and manufacturing is a huge part of that. If there is a longstanding manufacturing facility, one that’s healthy and has a good number of employees, it can keep a small town vibrant. For us, manufacturing means jobs, and we support it through three areas of work: early childhood, entrepreneurship, and small towns.
For 15-plus years, manufacturers have talked about childcare concerns. They hear from their workers that it’s a huge challenge. We make 20-some grants every year to organizations that are trying to improve their childcare offerings. We give away roughly 25,000 early reader books to 60 or 70 organizations each year. We offer dozens of early childhood provider trainings each year at no cost. We also have an expert on staff who works with communities to assess their childcare needs and develop solutions that are tailored to their situations.
We also do a lot of work with entrepreneurship. Some of that is lending — we have about 120 loans in our portfolio right now — in cooperation with area bankers. We have a pretty good success rate with the businesses we’ve assisted, many of which are manufacturers.
And we do some work with smaller towns in our region, including annual grants and an annual paint program. We help small towns create and maintain community funds. A thriving small town helps all employers, including manufacturers, attract and retain employees.
What gives you hope about the future of Greater Minnesota?
We don’t get directly involved in workforce issues, but we are at the table when these issues are addressed. In the
last decade, there’s been valuable work done to address the workforce situation in our region, including a resurgence of interest in technical training programs. South Central College, Riverland Community College, and Southeastern Technical College have been more deliberate about identifying the skills needed and providing training programs around those skills. Many high schools in our area have also returned to vocational technical coursework.
We also have local leadership that wants to accommodate growth. In Albert Lea, for example, the City, the
INNOVATIONS
Albert Lea Economic Development Agency, and the Chamber of Commerce recently came together to help two different companies come into the area — converting a former plant and finding space in an industrial park to accommodate their needs. That’s just one example of how communities are supporting existing industry while being receptive to new firms coming to town.
And, some of our young people are coming back to rural areas after leaving for a few years. That’s driven by a variety of factors — a return to roots,
Tim Penny joined the Southern Minnesota Initiative Foundation as president/ CEO in April 2007. Born and raised in southeastern Minnesota, Penny represented the area for six years in the Minnesota State Senate and 12 years in the U.S. House of Representatives. His dedication to the region dovetails with the Southern Minnesota Initiative Foundation’s mission to keep its 20-county region economically vibrant.
quality of life, and cost of living. For young people who have an inclination toward technical trades, we’re doing a much better job of raising awareness of the good paying jobs in our region that require those skills and offering training in those areas.
How does the Southern Minnesota Initiative Foundation work with Enterprise Minnesota to support manufacturers?
We have an Enterprise Minnesota manufacturing peer group that has met regularly in our office for close to 20 years. Between our loan clients, our donors, and our manufacturing peer group, we have a database of manufacturers that we invite to participate in the State of Manufacturing® focus groups and survey roll out. We always work hand in glove with Enterprise Minnesota in promoting those events in our region.
I also participate in manufacturing tours with legislators when I can. These are huge. Legislators tend to be
generalists; they know a little bit about everything. The more we can inform them about the importance of manu-
For young people who have an inclination toward technical trades, we’re doing a much better job of raising awareness of the good paying jobs in our region.
facturing to the vitality of the community, the importance of manufacturing to good paying jobs for area workers, and the challenges faced by the manufacturing sector, the better.
You’ve had some terrific jobs — including representing this region in Congress. Heading into your 18th year
as the leader of the Southern Minnesota Initiative Foundation, what keeps you going?
Southern Minnesota keeps me going. My family goes back five generations, and I had the honor of serving this area in the Minnesota Legislature and then Congress for a dozen years. I know it’s a tired old phrase, but I always say it’s an affair of the heart. The Southern Minnesota Initiative Foundation and its five sister foundations came into existence when I was in Congress and we were going through the farm crisis. The foundations were created to invest in the future vitality of their respective rural regions. We have resources we can bring to the table that will move the needle, whether in early childhood or business lending or small-town grant making. We try to be a good partner with others who are working in this same space. In everything we do, we’re trying to figure out how to be a helpful complement and a helpful supplement to what others are doing to make a difference.
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Fraud and forensic accounting
Auditor’s View THE
An experienced professional discusses how organizations might view — and improve — their ISO audit experience.
To better serve ISO clients, Enterprise Minnesota 10 years ago initiated the process of getting certified itself, a relative rarity for a service organization. After recently passing its 10th annual audit, Enterprise Minnesota’s president and CEO sat for a conversation with Thomas Paserba, the ISO auditor who has conducted each audit. Paserba, a vice president at the Pennsylvania-based International Quality Consultants, began his career as a high school instructor, teaching U.S. history in Colorado and at an international school in Venezuela. Since joining the company, he has audited organizations on every inhabited continent in the world.
Bob Kill: I imagine many companies begin their ISO journeys because customers have asked them to. But do you see that many of them ultimately understand it as a powerful tool for managing their business?
Thomas Paserba: We hope they do. Some companies will always look at ISO as a piece of paper that will help them get business. But we hope they gather enough information over time to see the value that this system can bring them. Quality is a management system. It’s never going to be the thing that grows their company into a Fortune 500, but they can use it as the framework to make their company better. If you put in the time and effort, those tools are going to make any company better. It’s not a guarantee, but it is a peace of mind.
make the whole process more relaxing for the auditee. They trust that you’re not there to belittle or berate them but to help. But it is also important to remember that clients are not friends; it’s a professional relationship. I reject friend requests on social media because that’s not a bridge we want to cross. We have to avoid anything that can influence our perspective on what they’re doing.
What is the optimal perspective a company can take to an ISO audit?
Look at it as a chance to learn. You go into a certification audit knowing there will probably be findings. It’s not personal, it’s not punitive, it’s just a teaching tool. We’ll walk you through the findings and make sure you understand what’s required to address it. We point things out that allow the company to continue to grow within its system.
Is there sometimes a disconnect between management and the rest of the company over how the audit is being utilized?
A lot of problems with quality management systems are because ISO relied on the quality department to be the focal point of the quality system before the
Thomas Paserba, a vice president at the Pennsylvania-based International Quality Consultants, has conducted each follow-up audit since Enterprise Minnesota achieved its ISO certification 10 years ago.
You’ve just finished your 10th audit with Enterprise Minnesota. Do you like to build relationships with clients over the years? Or does your employer want you to move from one to the other?
There are benefits, and there are drawbacks. Strong connections with clients help the audit go easier and
2015 standard. ISO 2015 wanted everyone to have a role. I still see companies that have the old mindset that the quality departments should take responsibility for a finding or a customer complaint instead of getting everyone involved. That’s a mistake because you’re taking away the people who are most capable of facilitating improvement. There’s a difference between
quality assurance and quality control. Quality control focuses on the product, whereas ISO 9001:2015 is quality assurance, a top-down holistic system for the whole business.
What’s the value of internal auditing?
They know that they have a list of things to do, and they do it. Employees often put their purchase orders out, but they don’t always understand the standard or the requirements or why they’re there. So, the evolution of quality, especially with ISO 9001 from ’94, was focused purely on product. As you got to 2008, it was management and product, and now it’s more about how management drives product improvement.
Internal auditing helps everyone see their impact on quality. And the hope now is that the people involved can look at the data points and say, “How does that play into purchasing?” For example, a lot of companies look at on-time delivery as product going out the door. But on-time delivery can be impacted by purchasing because if they need the proper lead times to quote, then they’re promising your customer something too early; material is delayed coming in, which delays the product going out the door. Sales can also impact on-time delivery. If sales personnel over-promise what you can realistically do to get the numbers on the books, you can be late on the product. And that becomes a problem with the customer.
I always encourage organizations — especially smaller ones — to use auditors from different departments to audit. Having a purchasing person audit manufacturing or a salesperson audit purchasing will help them see how everything is connected. It will also help them grow their knowledge and broaden their perspective on the overall company rather than being isolated in their specific areas.
“I still see companies that have the old mindset that quality departments should take responsibility for a finding or a customer complaint instead of getting everyone involved.”
upgrading break areas. This demonstrates that the organization wants to continue to grow with them, as opposed to ignoring the employee as someone who can be replaced.
We have many very small companies with one or two key customers who have encouraged them to get certified. They’re sometimes nervous because they believe ISO’s documentation involves paperwork that will restrict their flexibility, etc. What do you tell them?
A quality manager once asked whether I wanted to see his unabridged manual or his abridged manual. I asked, “Why do you have two?” The unabridged version was about two feet high. Over time, auditors told them they needed things, and he kept on adding and adding and adding. I said, “OK, get me the abridged.” And so, the answer to your question from small companies is that the ISO standard requires you to document only what you want to document — what you need — not what the ISO standard says. Certain areas, like management review, prescribe specific requirements about what you should talk about when you have a meeting or do an internal audit, but it does not tell you what to document. Too many companies overthink this and document everything. Or they panic and write a quality management system because they think that’s what the auditor wants. The last thing a company should ever do is write a quality system for what the auditor wants; they should always write it for what’s best for their company. If they do that, they will be great 90% of the time. They might have findings, but that’s not the end of the world. Findings are there to help them fix and grow, not to punish.
We avoid unnecessary documentation by focusing on four categories of key stakeholders. And one key stakeholder is employees.
More and more companies are evaluating employees as interested parties. They look to drive improvement that shows employees that they matter, such as
If your HR department’s not keeping up with your employees, your quality will suffer and in turn, your customers will suffer. Rotating out a large employee turnover will impact your quality because you need to spend more time and money on training. A revolving door of new people will cause your product to have problems; you’ll have higher scrap rates or rework rates. Plus, you don’t know the new people coming in, their personalities, etc. It shakes everything up every time. So again, HR plays a role in quality.
How often do you go into a first-time certification, shake your head, and say, “They weren’t ready. They haven’t really been serious about this”?
I think everyone is serious about it, but some people are in over their heads. We’ve not certified some companies that just didn’t know what they were doing or built a system that was overcomplicated for the number of people that they had to execute it.
Are there things you recommend as a last-second check-and-balance before an audit?
A good quality system for any organization, large or small, is something they’re living and breathing every day. I should be able to walk in off the street, knock on the door and say, “I’m here for an audit,” and it shouldn’t matter. We’re there to audit the system and not the individuals. So, it shouldn’t matter who is there. That said, it is always good to double-check housekeeping. Get rid of the clutter. The more paperwork that’s out there — or gauges lying around — the more likely I will find something. We’re like the police. I’m allowed to look at anything in plain sight. I’m not going to open drawers or invade anyone’s personal space, but if you leave it out there for me to see, I’m going to audit it.
How often are you confronted by acrimonious attitudes from certain people at a company?
In the philosophy of quality, two things are certain: People hate change, and change is inevitable. I’ve had people swear at me on audits, and again, I don’t get upset because I get to walk away. And if it’s really bad, you just say, “Let some-
one else deal with them for a year and see what happens.” The beauty of being an auditor is that you’re like a grandparent. You can send the kid home at the end of the day, no matter what. My responsibility ends with what I can flag and what I can write up. I can’t factor in a person’s acrimony and or confrontations about my decisions. I once wrote a finding at a union shop because an employee was not following the requirements of the system. At some point, the union lead confronted me about why I’d written the finding. Again, I’m here to audit the system, not the employee. I said, “I’m writing the finding no matter what. This is a finding on the system, not on the worker. It’s not personal.”
You have said that from a long-term strategic perspective ISO can contribute to the legacy of an organization.
A quality system is about consistency. It’s about continuity. It’s about mitigating the departure of someone who’s been there for 20 or 30 or 40 years. I was auditing an environmental
“In the philosophy of quality, two things are certain: people hate change, and change is inevitable.”
group at the Pennsylvania Department of Transportation. The young woman I audited was leaving the department. She walked me through all the requirements — all the rules and regulations — that went into road construction and projects, which were insane. For example, they were working on a project on a bridge, and they found two bats underneath it. The project was delayed by two years because they had to figure out what to do with the bats because they’re endangered. I asked her, “How do you pass that knowledge on?” And she showed me a document that she had been working on to help the next employee. When I asked her why she did it, she said, “When I started, there was no one here to teach me. I didn’t want the next person to go through what I went through.”
That’s legacy. Because now that next person has a guideline. Legacy is how you preserve your knowledge and best practices when you leave so that the next person doesn’t have to start over.
KEEPING MINNESOTA A MANUFACTURING LEADER
Leaders
G Home Grown
Blooming Prairie native Kurt Schrom returns to run Metal Services, bringing extensive big-company manufacturing experience.
rowing up on an 80-head dairy farm in southern Minnesota, Kurt Schrom focused on continuous improvement long before he knew there was a name for it. He constantly worked to complete his chores as efficiently as possible so that he and his siblings had more time for fun.
Schrom’s efforts to maintain lean farm operations evolved into a four-decade
career that took him from a small welding shop to running factories for Blount and Caterpillar. Today, Schrom serves as CEO of Metal Services of Blooming Prairie, returning home to lead the company where he once was the first employee hired. He still focuses on continuous improvement, bringing to bear his deep experience and insight gleaned from working at large and complex companies.
Along with company founder and owner Dennis Heimerman, Schrom is implementing strategic plans for growth, automation, and continuous improvement at Metal Services. The manufacturer runs a smaller operation than the plants where Schrom previously worked, yet he sees advantages
By Suzy Frisch
in being able to execute nimbly and more quickly capture positive results.
At Metal Services, “I wanted to implement some of the things I’ve learned and done over the years and so far, it’s been a good niche,” Schrom says. Plus, having the opportunity to be at the helm is a good fit for him. “I love the responsibility and I love winning. I like being a leader and leading people, but I do it where we’re all in the trenches together.”
Schrom puts himself in the trenches in other ways, too. He serves on an Enterprise Minnesota Peer Council to share advice and learn from other manufacturing leaders in southern Minnesota. And he recently joined the board of directors for Enterprise Minnesota.
“Kurt has an interesting blend of being a driver and really understanding and communicating with people,” Kill says. “He has brought a very strategic conversation to Metal Services, and he has that small community upbringing and large company experience mixed together.”
Kill predicts that Schrom will be an excellent board member based on his strong communication skills and willingness to learn. “He really fits the culture of what we want on the board — someone thoughtful who asks good questions. His career experiences make Kurt a really good listener and a good communicator. I always say good board members do two things: They ask good questions and hold organizations accountable to the measures they set out. Kurt is already doing that.”
The same is true at Metal Services, where Schrom became COO in 2020 and CEO in 2023. Not one to rush into massive change without detailed knowledge and a plan, Schrom first spent eight months evaluating operations and analyzing the numbers from the company’s three business lines. Then it was time to set goals and strive to attain them.
Heimerman knew that Schrom would bring insight and rigor to Metal Services, and he’s been delighted to see the significant difference Schrom has made so far. “We keep stepping up our game. Every time I walk through the shop, I see the parts, and these are the nicest parts we’ve ever done when it comes to quality and on-time delivery,” Heimerman says. “We were heading in that direction, but with Kurt there it’s been happening faster. It’s pretty amazing to see the wealth of
knowledge and experience he’s bringing to Metal Services.”
You can go home again
Heimerman and Schrom go way back. After Heimerman scraped together the equipment and necessary capital to open his shop in 1984, the first person he hired was Schrom. Metal Services initially focused on doing repair work for the area’s large population of farmers. The company also produced some parts, giving Schrom an opportunity to put his welding skills to work.
But when Schrom got married, the need for health insurance prompted him to move on to Blount Forestry in 1985. He
at the time was already practicing lean in the mid-’80s, and Schrom caught the single-piece flow bug. He saw the benefits of vertical integration and building to order.
“I liked the activity around build-toorder. We would build this model one day and another model the next day, and you could see the order board filling up. It was strategic — we focused on having the right inventory, the forecasting, and worked hard with vendors so they’d want to be our partner,” Schrom says. “It was fun to learn.”
He saw, too, the impact of continuous improvement work. When Schrom started at Blount in 1985, the team completed four units a week on a good week. By the
joined the night shift on the line, taking on as much welding work as he could. The Owatonna site manufactured timber harvest equipment, including large four-wheeldrive attachments and heads for cutting down trees. Schrom liked the work and his co-workers. “It was a good time dealing with big diesel engines, and there were a lot of us young farm kids there,” Schrom says. “There was a lot of energy and hard work. People didn’t need to get motivated because they grew up being motivated.” Schrom shifted to days in hopes of gaining management experience. Eventually he returned to the night shift in a leadership capacity, working his way up to be the night-shift supervisor. In addition to developing leadership skills, Schrom also had his eyes opened to the possibilities of lean operations in manufacturing. His boss
early 1990s, Blount was building more than 10 a week with not many additional people. “There was a lot of focus on, ‘How do we do more and how do we simplify?’” he says.
Champion of lean
In 1996, Schrom moved to Blount’s Wisconsin cylinder plant to take on the production manager position, where lean was in full swing. From single-piece flow to small-batch manufacturing, the plant operated efficiently using lean principles. But it had some struggles with warranties, and Schrom was tasked with fixing the root of the problem during his 18 months there.
Mission accomplished, Schrom returned to Owatonna and became even more immersed in lean and leadership. From 1999-2007, he served as general operations
manager of Blount’s forestry division. He led the organization through lean transformations and engaged suppliers in Kaizen events, which united operations, supply chain, purchasing, engineering, and finance. Schrom’s overall strategic direction, leadership, and lean initiatives resulted in improvements in quality, safety, cost, and just-in-time delivery.
Then Caterpillar bought the division. After working through the integration, Schrom was named facility manager at its LaGrange, Ga., plant. Impressed by his lean work at Blount, the Caterpillar team wanted him to onboard some of those principles in Georgia. It wasn’t as much of a slam dunk because the plant was structured differently, Schrom says. But he and his team were able to make strides in quality, efficiency, and productivity by focusing on lean.
Schrom bolstered his continuous improvement credentials in 2014 when he became the Master Black Belt for Caterpillar’s forest products division. He led Kaizen events and Six Sigma organizational change, and did one-to-one mentoring with employees, consultants, suppliers, and Caterpillar dealer teams.
That’s not to say that the lean efforts always went seamlessly. Schrom navigated around naysayers, thorny problems, and difficult goals by focusing on people. “My saying always was, ‘There isn’t a person in this factory who wants to come to work to fail or make a mistake,’” he recalls. “We have to have the right processes in place to drive that.’”
Schrom would lead teams to dissect the problem, tapping into employees’ expertise to help them develop solutions. Then the team would put the ideas to the test. Schrom learned over time that patience is key, as well as being realistic about what can be achieved during one continuous improvement effort. He compared it to football: “We might not have scored a touchdown in that Kaizen event, but we went from the 50-yard line down to the 20. Then we did another Kaizen event to get the touchdown.”
Schrom’s time at Caterpillar ended in 2019 when the company sold his division. He called Heimerman to see if he knew of any openings. Heimerman had started thinking about bringing in an outside leader and was impressed with Schrom’s
experience on larger stages. He knew Schrom could make a significant difference at Metal Services.
Schrom rejoined the company in March 2020, just as the pandemic shut the world down. But Metal Services was deemed essential, so the plant stayed open. Schrom spent the first eight months with his Master Black Belt on, focused on the data to evaluate how the company was performing.
Metal Services has three divisions: a metal fabrication production shop with capabilities in laser cutting, pipe bending, and component manufacturing; a repair unit; and a millwright team that primarily serves agriculture processing plants. Under Schrom, each division became its own profit center, with separate strategic reviews and objectives for performance, sales, quality, and safety.
Prompting growth became another part of his agenda. Schrom focused the team on a three-year plan that involved adding services like assembly, onboarding new technology, expanding marketing, and deepening relationships with existing customers. Metal Services automated its quoting software and brought on a welding robot.
The company’s fresh digital marketing efforts and outreach to new customers quickly expanded sales in its 250-mile region. Now Metal Services is broadening this work to encompass North America. Combined, these efforts are helping the company meet its goals to grow from $8 million to $15 million in revenue in three years, Schrom says.
Action plans show results
Kurt Bear, a business development consultant at Enterprise Minnesota, has watched Metal Services thrive with Schrom in the driver’s seat. “He’s filling a really vital role,” Bear says. “They’ve been doing well, and they are very, very focused on lean and being organized.”
Bear notes that Schrom “does a particularly nice job of using metrics in the business to drive continuous improvement,” pointing to an effort to analyze and improve the capacity of existing equipment before purchasing more.
Abbey Hellickson, a business growth consultant for Enterprise Minnesota, has been working with Metal Services on leadership development since early 2023. She points to Schrom as a key factor in the company’s recent success.
“Kurt came into Metal Services with a strategic vision for growth for the organi-
zation, and he’s doing it in a way that’s sustainable,” Hellickson says. “He has a plan, creates a strategy, and thinks of the holistic components of the organization. It’s a process, it’s people, and there’s a technology element he’s bringing in. He’s deliberately moving forward — it’s not chaotic or rushed. From my perspective, that’s the difference Kurt brings.”
The leadership development work with Enterprise Minnesota has helped employees buy into Schrom’s vision for Metal Services’ future, Hellickson says. It’s also building a pipeline of people who can step into bigger leadership roles going forward.
in a positive way to completely maximize their talent.”
Metal Services’ customer Brant Pfantz, director of supply chain at an Iowa manufacturer, identifies transparency and honesty as key strengths of Metal Services. In 2022 when supply chains were out of whack, the company was looking for vendors with manufacturing capacity. A cold call from Metal Services led to a site visit, where a Schrom-led group discussed forging a potential business relationship. It’s been off to the races ever since, with Metal Services doing fabrication of key components for the manufacturer.
Pfantz has dealt with all manner and styles of companies over the years. He has been impressed with Schrom and Metal Services for their integrity. “They are straightforward, and I don’t feel like they are playing games with us,” he says. “It’s nice to interact with Kurt because he’s so logical. He’s just solid. If they are going to be late on something, he notifies us, and if there are quality issues he jumps on it and gets a plan in place to fix it.”
Schrom first spent eight months evaluating operations and analyzing the numbers from the company’s three business lines. Then it was time to set goals and strive to attain them.
Key components include the development Hellickson conducts with the team, and follow-ups that Schrom provides to supplement that learning, she says. Each person has an action plan that is posted in the conference room. The team meets weekly about progress toward their goals and action plans, along with a monthly meeting with Hellickson. “That has helped push and elevate this group at the right pace,” she says. “Kurt has done a good job fostering their development and thought processes and elevating Metal Services while he’s doing that.”
After seeing Schrom on the job, Hellickson observes that “he wants the best for both the business and the people. He will see talent and truly push people
The two companies have developed a partnership with a long-term view. Metal Services has performed well and did what it took to become a strategic vendor to the Iowa manufacturer. “It’s been refreshing. I keep going back to trustworthiness but it’s true,” Pfantz says. “I feel like it’s a real partnership where they want us to succeed and we want them to succeed, and we’re both pulling in the same direction.”
This relationship reflects the guideposts of Schrom’s career, to problemsolve while staying focused on quality and the customer. “When I mentor and coach young leaders, my first question is always, ‘Would you give that to the customer?’ That’s something we asked ourselves a lot and still do today,” Schrom says. “For me, it goes back to these basics: We’re on time, we’re competitive, quality matters, and we take care of customers and their business.”
Left to right: Dustin Miller, manufacturing engineer; Nick Pohlman, production supervisor; Kurt Schrom, CEO
Strengthening the Chain
Part investigator, part matchmaker, Enterprise Minnesota’s Amanda Baumgart is seeking better ways to link OEMs and suppliers.
By Mary Lahr Schier
Amanda Baumgart, research analyst, Enterprise Minnesota
Supply chain disruptions during the COVID pandemic were the stuff of business nightmares. Ships backed up at ports and manufacturers shut down for want of a tiny part — oh, to forget it all. And, you might be able to forget it, if COVID was the sole supply chain disruption business has endured in the past half decade. Supply chain disruptions take many forms and can strike companies large and small. Think hurricanes, blizzards, wildfires, cyber threats, the Russians invading Ukraine, a cargo vessel stuck in the Suez Canal, another container ship knocking down a bridge in Baltimore.
It’s one reason more companies are looking for ways to bring their supply chains closer to home. “Products that were low volume but highly complex were never good candidates for overseas manufacturing,” says Bob Kill, president and CEO of Enterprise Minnesota. Correcting that imbalance is behind a federal program to bring more manufacturing back to the United States and a new Enterprise Minnesota effort to discover how to make
“That OEMs don’t always know what their options for suppliers are is a long-standing problem.”
–John Connelly, vice president of consulting, Enterprise Minnesota
regional supply chains stronger, and deeper.
“We want to make supply chains more resilient,” says Amanda Baumgart, Enterprise Minnesota’s research and supply chain analyst. “Hopefully something like COVID doesn’t disrupt everything again. But it probably will.”
Understanding supply chains from the perspective of both OEMs and suppliers is the focus of Baumgart’s work for Enterprise Minnesota. She’s part matchmaker for OEMs seeking suppliers, part investigator into supply-chain struggles on both sides of the transaction, and always a student of better ways to do business. It’s a job to which she brings the enthusiasm of youth — she’s just 23 — and the intellectual underpinnings of an entrepreneurial education.
“When we work with companies, supply-
chain issues tend to sit in the background,” says John Connelly, vice president of consulting for Enterprise Minnesota. “That OEMs don’t always know what their options for suppliers are is a long-standing problem. We have things to learn about how to help them, and we’re learning through Amanda’s research.”
A national effort
Baumgart joined Enterprise Minnesota a year ago through a grant to locally implement a federal initiative called the Supply Chain Optimization and Intelligence Network (SCOIN). It’s part of the Biden administration’s Build America Buy America effort. The program asks the state-based Manufacturing Extension Partnership (MEP), such as Enterprise Minnesota, to respond to national supplier scouting requests. To do that, Baumgart is researching and analyzing the capabilities of state suppliers and the needs of OEMs. She is also developing a database of Minnesota companies and their capabilities and capacity to expedite connections between suppliers and OEMs.
In the past few months, about a dozen Minnesota manufacturers have been referred for jobs through Baumgart and the national scouting network, providing everything from 50-foot-long steel tanks to coconut coir mats for environmental remediation to injectionmolded parts. Requests come from OEMs all over the United States, Baumgart says, many of which are developing a new product or considering switching suppliers. Requests may be for a part, a product, resources, or simply information.
“There’s usually something a little bit quirky about them,” she says of the requests. Part of her job is digging out the details of the requests, making it easier to identify appropriate suppliers among Enterprise Minnesota clients. Since 70% of Enterprise Minnesota’s clients are suppliers to OEMs, it’s a natural fit.
Baumgart is also adding more specific information to Enterprise Minnesota’s existing database of companies, everything from certifications to shipping methods. And, she’s in the midst of interviewing about 100 Minnesota companies — both suppliers and OEMs — to strengthen Enterprise Minnesota’s understanding of each and build better relationships between suppliers and OEMs. “This is a building block toward the services we’re going to offer in the future,” she says. “Part of my job is to highlight the resources we have with Minne-
sota manufacturers. Even if there’s not a sale made today, there’s still that opportunity that something may come of it later.”
Minnesota has a lot of OEMs, Connelly says. “When most people hear the term OEM, they think of car manufacturers — something really large. The fact of the matter is that any manufacturer who produces a product of their own design is an OEM. We have a lot of those.”
No matter the OEM’s size, finding suppliers closer to home can help them form deeper, long-term partnerships, he says. It can lower transportation costs, which is especially important with heavier or bulkier
components. Having closer suppliers can also improve communication, reduce lead times, reduce risk, and increase flexibility.
“Sometimes OEMs are looking for a supplier who can build something for them and also help them engineer it,” Connelly says. “They know they need something but they don’t know what features they will need or the specific material elements. Their supplier can help them figure that out, and that increased communication helps both companies.”
The changing supply chain
“There’s been this buzzword of ‘reshoring,’” Kill says, “and I think it was just a buzzword until the last year and a half or two years.” But now, more OEMs are rethinking the types of work that are being sent overseas and are looking for suppliers within a time zone or two of their head-
quarters. “You really cannot beat the quality of Midwest manufacturers,” Kill says.
John Melbye, president of the Twin Cities chapter of the Association for Supply Chain Management, agrees that there has been a shift in thinking about supply chains. For example, the idea of reducing inventory as much as possible is being questioned, he says. “Inventory is a leverage point,” Melbye says. “If you have inventory, you can do whatever you want to do. If you don’t have inventory, you can’t.”
Successful companies now see their supply chain not as a cost but as a strategic advantage. The federal effort to enhance U.S. supply chains is a wise move, but will be a slow process, he says.
“Companies are trying to ‘near-source’ or ‘reshore,’ but we didn’t move everything overseas in two days,” Melbye says. “That took a decade or more, and to suggest we will move everything back by snapping our fingers is insane. It’s a longer-term game, and you’ve got to lay the groundwork.”
Digital tools make it easier to find new suppliers, but OEMs need to put due diligence into the process. The tools Enterprise Minnesota is bringing to build that bridge of awareness between those who have certain capabilities and those searching for those capabilities is a huge undertaking, he says.
“It’s not just about near-shoring. These are competitive advantages if we set up the framework to find suppliers or for OEMs to find us,” Melbye says. “That’s going to be a benefit that long outweighs the postpandemic reaction.”
Baumgart’s conversations with OEMs have revealed several areas they are concerned about.
Quality. OEMs typically are looking for suppliers with a quality program in place. ISO certification may not be necessary, but evidence of a quality process that ensures OEMs the supplier will produce parts to specification and meet delivery dates is mandatory. “Delivery dates have jumped out in a lot of our conversations,” Connelly says, “but often they are defined differently.”
Capacity. Many OEMs saw significant growth during and after the pandemic and are hoping to continue that trend. Having suppliers with the capacity to grow along with them is a key concern, Kill says.
Automation. A 2023 survey from consulting firm Ernst & Young found that about half of the supply chain executives surveyed expected that by 2035 most of their supply chain would be automated,
including the use of warehouse robots, driverless forklifts, and delivery by drone. “You want to be automated. You want to be lights-out,” Baumgart says, but that presents challenges for high-mix/low-volume suppliers. Still, she thinks more processes could be automated to make suppliers more competitive. “This is an unharvested opportunity for suppliers,” she says.
Partnerships. Baumgart’s supply chain certification emphasized the value of partnerships, within an organization and within the supply chain. For manufacturers, understanding how their partnerships work — are they merely transactions or are the companies invested in each other — is important, she says.
What’s next?
Baumgart expects to finish her interviews with leaders and her data analysis later this year. Her position was funded by a twoyear grant, and she’s hoping to develop new ways to assist suppliers and OEMs.
“We’re still in the early stages,” Kill says of Baumgart’s interviews, “but the findings we’re seeing are validating things we thought we knew.”
More OEMs
are
rethinking the types of work that are being sent overseas and are looking for suppliers within a time zone or two of
their
headquarters. “You really cannot beat the quality of Midwest manufacturers.”
–Bob Kill, president and CEO, Enterprise Minnesota
“There’s a lot of methodology behind managing supply chains,” Connelly says. “Continuous improvement is something we are really good at. To be able to take those skills and add to them what can happen in sourcing is the ultimate goal for us.”
Says Baumgart, “We’re looking to find that one problem where we can provide a solution that will help manufacturers. We understand disruption will be more frequent, and we want to be prepared for it.”
John Melbye is president of the Twin Cities Chapter of the Association for Supply Chain Management.
PHOTOGRAPHS
Mastering the Craft
Amanda Baumgart brings an international background and a curious outlook to the supply chain job. Born in Minnesota, she spent part of her teen years in Peru, her mother’s home country. She was homeschooled prior to moving to Lima, and at 13 was already more than two years ahead of her peers in school. Given the option of attending a regular high school in Lima or a university-level academy, the precocious Baumgart chose the academy, where some of her fellow students were nearly twice her age.
Taking college-level coursework in Spanish — one of four languages she speaks — as a young teen was challenging. “It taught me to study,” she says, and that may have made college and then graduate school easier. At 16, she started in the business administration program at the University of St. Thomas in St. Paul. She graduated at 19, just as the COVID pandemic shut down the world. Sensing that her young age might be an impediment to launching her career, Baumgart decided to enroll in Boston-based Babson College’s master’s program in entrepreneurship, which she finished in 2021.
“I felt it was a good extension of my undergraduate studies and helped me adjust before getting into the work world,” she says. The program emphasized project-based learning and problem-solving, which Baumgart says has increased her empathy for the entrepreneurs she interviews.
Returning to Minnesota, she worked in sales for a company that manufactures plant protein but decided that she missed the intellectual challenge of research and analytics. When Enterprise Minnesota contacted her about the supply chain position, she was intrigued by the combination of research, database, and people skills.
“I love my numbers. I love my spreadsheets,” Baumgart says. “But I also like relating to people. This job had the combination of working with people as well as research and analytics. That was very appealing to me.”
Whether at work or pursuing hobbies, Baumgart is a perfectionist. “If I want to do something, I want to do it well,” she says.
“For me, the enjoyment is the mastery of the craft.”
Her drive to master the craft around supply chains led Baumgart to pursue the Certified Supply Chain Professional designation from the Association for Supply Chain Management this year. “The curious thing is that supply chain is a lot bigger than most people think,” she says. “Forecasting, ERP systems, database, procurement and sourcing, supplier and customer relationship management — they all fall under supply chain.
“The certification really helped me see how all those pieces fit together. Understanding all of that is where we’re going to be able to help manufacturers. Supply chain touches everything,” she says.
The rigorous certification process took four months to complete and involved absorbing about 1,000 pages of hefty material, she says. While challenging, the certification deepened Baumgart’s thinking around concepts like partnerships, suboptimization, and the challenges entrepreneurs face. “The certification puts together this body of knowledge. It helps add context to the interviews I’m having with manufacturers,” she says. “I think we will really see the benefit when we start to come up with ways to assist suppliers based on what they have shared with us.”
The certification also gives Baumgart additional credibility when she’s approached OEM leaders for interviews, which has resulted in more and better interviews, says Kill. “Amanda is a very dynamic person. She’s a great learner and she loves a challenge,” he says.
John Melbye, president of the ASCM Twin Cities chapter, agrees. “Amanda is an innovative thinker and a very capable young woman,” says Melbye. “It’s very refreshing to find someone who is so receptive to new thoughts and at the same time, capable of providing relevant input.
“We had a conversation last week and she gave input on my project,” he says. “I have been very impressed with her work ethic and with her capabilities.”
Amanda Baumgart, research analyst, Enterprise Minnesota
St. Cloud Technical & Community College’s
The NextGen Workforce
A Surge in Tech Ed
Recent investments at two central Minnesota technical colleges open doors to a more robust manufacturing workforce.
As interest in trade and technical education surges among young people, two central Minnesota communities will be ready to meet the moment. The advanced manufacturing facilities at St. Cloud Technical & Community College and Pine Technical and Community College are flush — or will be soon — with cutting-edge equipment and bright and airy spaces. Combined, they will help prepare the next generation of workers to meet the growing needs of area companies.
Demand has been high at both colleges for enrollment, especially in welding and other advanced manufacturing disciplines. Pine Tech in Pine City, for example, has experienced a 17% increase in its technical programs’ enrollment during the past eight years. Fall 2024 enrollment in manufacturing programs at St. Cloud Technical & Community College is up 18% over last year.
Despite this boost in interest, the schools knew they could be putting out a better welcome mat for potential students. Pine
By Suzy Frisch
Left to right: Ken Matthews, vice president of academic affairs & institutional effectiveness, St. Cloud Technical & Community College (SCTCC); Steve Hoemberg, dean of skilled trades and industry, SCTCC; Jennifer Erickson, dean of business, IT, education & customized training, SCTCC; Lori Kloos, president, SCTCC; Steve Nusbaum, area manufacturing project manager, SCTCC; and Cathy Mehelich, economic development director, St. Cloud
nized a pressing need for expanded workforce training, Mulford says. Lawmakers regularly heard from manufacturers and other employers how vital it is to their growth to have a well-trained workforce in the state.
Tech students have been learning welding in a semitrailer. Not only were the conditions far from ideal, but it hampered the school’s ability to teach fabrication skills, too, says Pine Tech president Joe Mulford. At St. Cloud Tech, some equipment was outdated, and the five manufacturing disciplines were isolated, making it difficult for them to collaborate, says president Lori Kloos.
The new spaces will certainly help the schools capture some of the interest from potential students. “Looks matter,” Mulford says. “If they walk into the building and see exciting lab spaces and interesting equipment that mirrors what’s going on in the industry, it will show students how exciting these careers can be — especially if they are not sure about their career path.”
Pine Tech: Bigger and much better
In 2020, the Minnesota Legislature awarded Pine Tech $635,000 in funds to develop plans for an expansion. Lawmakers followed up with $21.4 million in the 2023 bonding bill, paving the way for new spaces to be built and open in fall 2025. The expansion will feature a 25,000-square-foot addition and a 15,025-square-foot renovation. First up, Pine Tech will open new space for its technical and trades labs, including welding, automotive, gunsmithing, and nursing. A modern entry now will welcome potential and current students. Other work to follow later in 2025 and 2026 will include a new gunsmithing lab, an automated systems technology lab, and a health care simulation suite.
“People can go into the maker space and look at real world issues that manufacturing might be encountering and work together to solve them.”
–Lori Kloos, president, St. Cloud Technical & Community College
To accommodate more students, the welding lab will be 10 times larger than the current space. The state’s only gunsmithing program will house 72 student stations and a test range. In the new manufacturing space, the layout will mimic how companies typically set up their production floors, giving students highly transferrable skill development, Mulford says.
It was a hard sell for the welding program when college staff had to show potential enrollees, and often their parents, the semitrailer space where students learn. “We want people to understand that a lot of these manufacturing jobs aren’t dirty, dark, and dangerous careers,” Mulford says. “A lot of these manufacturing jobs are really high tech, they are clean and bright, and our labs will be very aligned to that.”
The Minnesota State Colleges and Universities system succeeded with its bonding request for Pine Tech because legislators recog-
Plus, Pine Tech couldn’t accommodate its growing demand in the existing space. “There were classes that we wanted to expand and students who wanted to get into programs and employers who wanted to hire graduates. But we were limited by the capital investment needed,” Mulford says. “They appreciated that we had worked hard with what we had and did the best we could. But being able to take only 10 students at a time wasn’t going to move the needle for employers in the area.”
The new space will enable Pine Tech to expand its curriculum to more closely meet industry needs. Its precision machining technology program, for example, didn’t have room to add robotic machining cells to complement education in manual mills and lathes. Now students will be able to learn more advanced skills, Mulford says.
Another improvement coming online in fall 2024 will be a new student housing development for Pine Tech students. The privately owned dormitory-style space in a refurbished building on Cross Lake accommodates about 150 students, perhaps attracting prospects from across the state.
Combined, the new lab spaces and housing help Pine Tech put a twist on its programming, Mulford says. Companies’ employees can earn a certificate in advanced welding in a more concentrated timeframe by living in student housing over the summer.
“This should be a point of optimism for the state and manufacturing that people are being heard,” Mulford says. “The Minnesota Legislature made a historical investment. It might not solve everyone’s challenges, but it is a step in the right direction.”
St. Cloud: A loss leads to a gain
The recent renovation and expansion at St. Cloud Technical & Community College was prompted in 2018 when Electrolux announced that it would shutter the St. Cloud plant where it had operated for 75 years. The community’s largest private employer,
Left to right: Jennifer Erickson, dean of business, IT, education & customized training, St. Cloud Technical & Community College (SCTCC); Lori Kloos, president, SCTCC; and Cathy Mehelich, economic development director, St. Cloud
Electrolux had 700-plus employees at its freezer manufacturing plant. The City of St. Cloud Economic Development Department got to work helping the community pivot to supporting and growing other industries.
A federal economic recovery grant from the U.S. Economic Development Administration (EDA) provided funds for a targeted industries, workforce, and innovation analysis in 2019. The city’s economic development team interviewed stakeholders across the region, including people in business, workforce, education, and government, to determine what industries would be most likely to succeed in St. Cloud, says Cathy Mehelich, St. Cloud’s economic development director.
During the pandemic, the team shifted slightly to identify industries that would have the most resilience and the greatest prospects for sustainable expansion in a post-pandemic economy, Mehelich says. They highlighted automation, precision manufacturing, food manufacturing, and business software applications.
“We were looking at what skill sets are in the region and what are transferrable skills and industries that have the most opportunities for growth post-COVID,”
The new spaces will certainly help Pine Tech capture some of the interest from potential students. “Looks matter,” says Joe Mulford, school president.
Mehelich says. Colleges and universities will need to continue evolving their infrastructure and programming to meet the moment. Then they will be training staff for existing industry needs and the jobs and technologies of the future.
For example, in food manufacturing, St. Cloud has a hub of companies that make equipment for food processing and logistics, including cold storage and stainless-steel tanks. Those working in economic development would like to attract similar businesses to create a thriving ecosystem. “We are looking to better target the industries we already have, continue to support them, and bring in complementary companies,” Mehelich adds, noting that essential to that effort is developing a pipeline of workers to meet companies’ needs.
Joe Mulford, president, Pine
Technical and Community College
To help achieve these goals, a team came together on behalf of St. Cloud Tech to apply for the EDA grant, including St. Cloud State University, St. Cloud Chamber of Commerce, City of St. Cloud Economic Development Department, Greater St. Cloud Development Corporation, Minnesota Department of Employment and Economic Development, and Career Solutions.
In 2020, the group secured the $2.5 million EDA grant for St. Cloud Tech to create training programs and spaces to help people join or transition to the four target industries. The funding — matched by $2 million from the college — paved the way for constructing its new Advanced Manufacturing Center and filling it with state-ofthe-art equipment. The grant is expected to create or retain 1,290 jobs and generate nearly $38 million in private investment in the area, according to the EDA.
Maker space to the max
Some of the new equipment in St. Cloud Tech’s Advanced Manufacturing Center includes a metal 3D printer — believed to be the only one in the Minnesota State system. It also introduced seven FANUC robot cells for teaching tool operation and programming, and a water jet cutter that can slice through glass, granite, titanium, and steel plate.
In addition, the center features eight instrumentation and process control trainers and two industrial-standard FMS-200 flexible manufacturing system training cells. Both are effective tools to help students prepare for careers in industrial automation and assembly, according to Steve Nusbaum, area manufacturing project manager for St. Cloud Tech.
Nusbaum regularly gives tours to employers and educators to reveal possibilities for learning and training at the college. “We hope that anyone who comes through here
leaves with their mind blown about what we can do with the Advanced Manufacturing Center’s space or equipment,” he says. “Now that they see everything in place with the best technology that’s out there, they will have confidence in the expertise, equipment, and programs we put together for our students or customized training.”
St. Cloud Tech’s programs that will most often utilize the new center include CNC and advanced machining, computer-aided design manufacturing, computer-aided mechanical design, energy and electronics, and welding/fabrication. In addition, the college has a customized training wing that matches instructors with industry partners for non-credit learning that helps their employees up-skill, Kloos says.
The grant funding will help St. Cloud Tech double the capacity of its energy and electronics department. It also enhances instruction in mechatronics to train more electro-mechanical technicians. These in-demand workers install, maintain, and repair electronic equipment and automated systems in industries like aerospace, medical device, and power generation.
Kloos highlights the center’s new maker space for hands-on learning and collaboration as one of the jewels of the expansion. Situated in a central location in the Northway Building, its large picture windows allow students and visitors to watch learning in action. The space showcases the curriculum and equipment available to students of all ages and companies seeking workforce development.
“This center brings our manufacturing programs together,” Kloos says. “People can go into the maker space and look at real world issues that manufacturing might be encountering and work together to solve them. Automation, mechanical design, and welding and fabrication all have core components where you can see the issues and
then design and build a solution by putting it all together.”
The new center also supports St. Cloud Tech in achieving its broader objectives. “We know that manufacturing jobs provide sustainable wages, great careers, and a lot of mobility for our students,” Kloos says. “We want to work with industry partners to introduce opportunities for careers in these fields and get students interested in these fields.”
Educators hope the center will help youth envision careers in manufacturing technology from an earlier age. Elementary school students attending robotics camps or high school students participating in
“We hope that anyone who comes through here leaves with their mind blown about what we can do with the Advanced Manufacturing Center’s space or equipment.”
–Steve Nusbaum,
area manufacturing project manager, St. Cloud Technical & Community College
summer programs on campus can see the center’s robotics and other high-tech equipment where they, too, could learn in the future.
Kloos says she no longer hears young people describe manufacturing as dark and dirty. “That’s not the case at all. It’s high-tech, really exciting space,” she adds. “With our maker space, people can see the equipment and that it’s bright and modern and clean with students working on things.”
Key partnershipspublic-private
During both expansions, business and industry partners from scores of local companies helped ensure that Pine Tech and St. Cloud Tech create education and training that supports their operations now and well into the future.
Mulford finds the advice indispensable. “We work very closely with advisory boards for all of our technical programs to make sure our curriculum is aligned to what their needs are and their future needs,” he says. “We’re trying to stay ahead and bring in the technology they
haven’t implemented yet but know they will need.”
Park Industries CEO Joan Schatz calls St. Cloud Tech a vital partner for its operations and the overall manufacturing sector in central Minnesota. The St. Cloud–based company manufactures stone fabrication machinery for the countertop and architectural industries. It employs 340 people, with about 150 working in manufacturing.
“The new Advanced Manufacturing Center is a testament to the college’s vision and commitment to innovation and excellence,” Schatz says. “It offers state-of-the-art facilities and equipment, as well as opportunities for collaboration and problem-solving with the students and faculty.”
Park Industries envisions potential training partnerships with St. Cloud Tech in advanced robotic welding or introductory machining training to help non-degreed machinists upskill, says Steve Van Heel, director of manufacturing. “As the industry grows and develops,” he says, “having a partner for advanced manufacturing training will help our business grow and develop to meet future demands.”
Van Heel anticipates a strong need for robotic programmers and operators, as well as specialists in autonomous machining and operations. Employees who can start work already skilled in both welding and robotics would serve as a valuable resource from their first day on the job, he says.
Enterprise Minnesota president and CEO Bob Kill sees recent investments in technical education from public-private partners as a positive step that will enhance job training for the 21st-century workforce Minnesota needs.
“It’s going to make a difference in these communities to keep young people there and be attractive to them, or for people who want to change careers and wouldn’t have thought of this in the past,” Kill says. “Tech school is becoming more attractive as we talk about the cost of college, and people are becoming more conscious of the fact that there are really great careers that can start at these schools.”
More is on the way, Mulford and Kloos say, thanks to these recent investments. “We’re only limited by our imagination of what we can do,” Kloos adds. “Central Minnesota is such a great place to be. I think it takes all of us coming together to keep it really vibrant. It’s exciting to be a part of that.”
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Why Not
The Power of
Strategy expert Steve Haarstad encourages every manufacturer to consider formal strategic planning and offers insider tips to maximize the value of a written plan.
By Kate Peterson
Business growth consultant Steve Haarstad has some advice for business leaders who avoid formal strategic planning because they don’t have time, think it is unnecessarily complicated, or see their company doing just fine without a plan.
First, he urges leaders to take a little time — maybe just the few minutes it takes to read this article, or the length of one of his manufacturing workshops on strategy — to understand what strategic planning involves and its typical benefits. More information will reveal that its value easily outstrips costs.
Haarstad emphasizes that strategic planning can be scaled down. Many business owners and leaders think formal strategy only makes sense for large companies, but it’s equally valuable for smaller manufacturers, and it can be much simpler and less time-consuming. “You can get away with a more streamlined version of planning that takes less time and covers less topics yet still clearly defines where you are going and how you plan to get there,” he says.
He also notes that even successful companies find value in strategic planning. It gives leaders a clear direction for the company and provides more criteria to evaluate the short-term decisions that fuel long-term objectives.
The advantages of strategic planning ultimately flow to all employees, Haarstad says. “When employees know that a plan exists, even if they don’t know all the details, it gives a sense of security,” he says. “It also provides rationale to understand the decisions that are being made by company leaders.”
ally reflect the understood purpose. Company leaders can avoid miscommunications and rogue decisions when they work together to define and clarify purpose in the context of a strategic plan
Position describes what sets the manufacturers apart from others. A company’s market advantage doesn’t necessarily come from doing a better job at something, it comes from doing something dif-
Businesses and their leaders diminish their effectiveness when they step away from core competencies.
Haarstad says strategic planning is a sure recipe for engaging leaders and employees. “The most common, concrete outcome is a stronger, more unified team that’s in better alignment with the company’s direction,” he says.
Establishing a framework
For companies just starting strategic planning, those trying to boost their efforts, or those in the middle of executing a formal plan, it’s useful to consider Haarstad’s four pillars — the four Ps — of good strategy. Purpose, position, process, and people form the foundation of a solid strategy, and clarifying them can help guide manufacturers at any stage of planning.
Defining purpose requires the company to clarify and communicate its mission: why it exists, what it’s trying to accomplish, and its vision of the future. “Have you ever been frustrated when a leader above you made some kind of decision and you had no idea why they made it?” Haarstad asks.
That disconnect, he says, means either that person was being purposeful, and you didn’t understand, or their actions didn’t actu-
“We do not rise to the level of our goals,” Harstaad says. “We fall to the level of our systems.”
ferent than everyone else. When considering strategy, it’s critical to recognize that unique position and build goals around it.
Process outlines how things are done internally and ensures the systems and operations are in place to support the company’s goals. Without good processes even a company with an outstanding mission and a unique market position fails to thrive. Citing Atomic Habits author James Clear, Haarstad says, “We do not rise to the level of our goals. We fall to the level of our systems.”
The people aspect of strategic planning forces a company to define who you are as an organization through your core values and to consider and communicate the specifics of the entire team. “You’re putting words on paper that describe and define the culture of your organization,” Haarstad says. It’s also about having the right people doing the right jobs and taking time to plan for succession in your organization.
Often the first time a company goes through formal strategic planning can be time intensive. “We’ll cover all these areas, have discussion and debate, and give definition to the purpose and position. We’ll look at the long-range vision and short-range objectives and figure out the process and the people,” he says. “Those conversations take place over many hours and sometimes over several days.”
Combining a solid foundation based on these four “Ps” with four tips — detailed below — that Haarstad has developed through years of working with manufacturers gives leaders the tools they need
to maximize the impact of strategic planning.
Tip #1: Keep the endgame in mind
Companies without a plan are easily distracted by urgent daily tasks or unforeseen diversions. Haarstad recommends leaders look far into the future and determine where they want the company to go.
Identifying Core Competencies
Ask Yourself
• Reflective, open discussions
How far? The endgame can be defined by a “big hairy audacious goal,” a term coined by strategy expert Jim Collins years ago that involves setting a target of 10-plus years. It can also be a three-to-five-year plan. Or it can be an exit strategy, maybe positioning the company to sell by a certain date or preparing for a transition to the next generation of leaders.
Companies that manage actions within a rhythm that is aligned to endgame goals are in a great position to build momentum and multiply their results.
“Defining an endgame means painting the picture of the future with clarity,” Haarstad says. “That picture becomes a decision filter and a stabilizing anchor for our actions.”
It’s a decision filter because every situation can be considered in the context of the larger objective. Will taking an action move the company closer to or further away from that vision of the future?
To clarify this point, Haarstad asks leaders to imagine a compass. If the right direction for the business aligns to a 90-degree segment of the compass, then 270 degrees represents a wrong path. Just randomly picking something means you’re three times more likely to go in the wrong direction than the right way, he says.
Visualizing the endgame keeps leaders focused. Haarstad retells a key scene from the movie Castaway to illustrate the idea. When Tom Hanks’s stranded character decided to leave the island on a handmade raft, hoping he could find a boat or plane to rescue him, he took his most prized possession, his volleyball, Wilson. When the ball began floating away, Hanks grabbed
Ask Others
• Customer surveys
• Peer exchanges
• Trade associations
Analyze
• SWOT
• Financial benchmarking
• Competitive analysis
a rope he’d attached to his raft, jumped in the water and paddled after Wilson. He got within feet of the ball but reached the end of the rope.
“That was his decision point: Let go of the rope or not? He would’ve made it to Wilson but might have lost the raft,” Haarstad says. “He stayed connected to his endgame, and that was a stabilizing anchor. It kept him from drifting off.”
Business leaders can face similar distractions. “We get our strategies and processes in place when some golden opportunity shows up,” Haarstad says. “But it’s going to take us over there and our endgame is over here. Having the decision filter keeps us moving in the right direction.”
Tip #2: Stay in your core
Haarstad says businesses and their leaders diminish their effectiveness when they step away from core competencies. When developing, executing or adjusting a strategic plan, manufacturers must stay in their core, he says.
A core competency is defined by three things: it is difficult to imitate; it can be widely applied; and it adds value to your customers and to the things you offer to the market. To identify and get insight into your core competencies, Haarstad suggests asking yourself questions, asking others questions, and engaging in objective analysis.
super efficiently, or your outstanding customer service,” Haarstad says.
Internal discussions can kickstart the process, but those conversations alone may not identify your competencies. They can give you some initial insight, but you should test those ideas with additional input, Haarstad says.
Next, ask customers about your strengths, either through a formal survey or an informal conversation. “Customers are a rich source of information. Ask them why they choose to buy from you. Why do they like your product? What makes you different from competitors?” Haarstad says.
He also suggests looking into what your competitors are doing: poke around on their websites and see what they’re promoting and what their marketing messages are. Compare what they’re providing to what you’re providing. “It is a really great resource to learn a little bit more about what makes your company special,” Haarstad says.
Further evaluation, such as a SWOT (strengths, weaknesses, opportunities, and threats) analysis can provide deep insight into core competencies. Every item on the strengths list is a potential core competency. Haarstad also recommends reviewing
Start by convening an internal brainstorming session, Haarstad says. What do our people think we do well? What do we pride ourselves in? What are we exceptionally good at? What makes us stand out?
These discussions will generate a wide range of responses, all of which could be valid. “It could be your market experience, your ability to provide support to your customer from a design perspective, your capacity to run large volumes of things
financial statements and identifying areas that outperform others to uncover core competencies.
Clearly defined core competencies enable companies to align with their strengths and help create a menu of goals and actions. “Knowing your core strengths, you can leverage those and do better things for customers and the organization,” Haarstad says.
Tip #3: Stick to a rhythm
Rhythm is a foundational, critically important element of successful strategy, Haarstad says. He identifies two aspects of rhythm: deliberate daily routine and a consistent convening of leaders that gives them the tools to go back into the company and execute effectively. Companies that manage actions within a rhythm that is aligned to endgame goals are in a great position to build momentum and multiply their results, he says.
Haarstad urges leaders to develop a consistent routine. He recommends gathering the core team to report results, discuss and debate, align with goals, reset when necessary, and then send those leaders back out and execute. A consistent rhythm is a force multiplier, he says, suggesting a 90-day interval for those sessions.
He also encourages leaders to institute more frequent update meetings, ideally each week. For these he suggests using a fixed agenda, revisiting the same series of conversations at each meeting, and sticking to a consistent length of time and a set day and time each week. One person should facilitate the conversation, and one person should record key decisions.
A consistent rhythm includes having a predictable routine connecting frontline production employees to company objectives. This could be a five- or 10-minute standup meeting: here’s the update from yesterday; here’s the focus for today; here’s a safety thing to watch out for.
If you’re starting from scratch, and you don’t really have any kind of consistent rhythm at any level, you want to start with your leadership team, Haarstad says. “This is where you learn the lessons and figure some things out and take ownership of these things. Once you’ve nailed that, you can start rolling things out to other parts of the organization.”
Haarstad emphasizes that starting this process can be a challenge. “Give yourself some grace. You’re putting something new in place. You’re not going to get it right the first time,” he says. “If you’re doing it consistently over the course of two 90-day periods, you’ll have it pretty well locked in and you’ll be feeling really good, and the rhythm will be working for you.”
Tip #4: Simplify
A good way to keep strategic planning on track, Haarstad says, is to simplify the process. Complexities often breed ambiguity and uncertainty, which lead to slowdown and decline.
“Think about when you are driving
somewhere for the first time. When you’re not quite sure where to go next, you slow down. We don’t want our people to be confused and uncertain, which will lead them to slow down,” Haarstad says.
The fix, Haarstad says, is to break down objectives into specific tasks and clearly define milestones.
When tasks that take several weeks to complete are reported on in weekly meetings, it can kill momentum. “When they report out the next week, and then the week after that it’s not complete, it disrupts the rhythm because it feels like this thing is getting stuck. And it acts as a demotivator to the owner and the team,” Haarstad says.
How Can We Simplify and Clarify?
3 Simple Recommendations:
• Break it down
• Define milestones
• Speak, listen, repeat
He suggests breaking tasks into steps. For an action that will take two or three weeks to complete, break it down into weekly or even daily objectives. For a six-month or one-year goal, break it down to 90 days.
By defining specific milestones, leaders create a clearer picture of what needs to get done. It also prevents procrastination. “It’s clear that if we don’t get started right away on the 30-day milestone, we’ll never reach the 90-day target,” Haarstad says.
Simplifying boosts outcomes when implementing a strategic plan, and it helps everyone become more comfortable with the planning process when starting out, Haarstad says. At the beginning, if leaders can lay out a short list of steps to complete over a period and specify which series of conversations they’ll have, it all becomes much more digestible.
From young companies to wellestablished manufacturers, Haarstad has seen formal strategic planning pay huge dividends. “I’ve seen formal plans give more definition and create more pathways of growth. I’ve seen them give clarity in terms of what markets to pursue and why,” he says. “And I’ve seen how companies execute against their plans and become accountable to the outcomes that they were trying to achieve.”
A Bedrock of Support
Minnesota’s Initiative Foundations play a critical role for manufacturers in Greater Minnesota.
ur business growth consultants often encourage manufacturers to embrace processes they describe as “force multipliers,” actions or relationships that magnify positive outcomes beyond the expected. In our mission to support the state’s manufacturing sector, our ties with Minnesota’s Initiative Foundations are a real force multiplier.
Enterprise Minnesota performs two primary functions as the key advocate for manufacturing in the state. Our highly qualified consultants work directly with companies to help them grow profitably, and we serve as the “voice” of Minnesota manufacturing, driving a diverse coalition of interests that support manufacturing across the state.
Minnesota’s Initiative Foundations constitute a key partner in that coalition. The six independent entities were established with support from the McKnight Foundation in the mid-1980s to invest in regions outside of Minneapolis/St. Paul. Greater Minnesota was particularly hard hit by the farm crisis, and since their founding, the independent foundations in each area have worked to serve their regions with grants, business loans, programs, and donor services that boost economic strength.
We are grateful for our growing relationship with the foundations and celebrate their commitment to the areas they serve. Maintaining a healthy climate for manufacturing in small towns and population centers across Greater Minnesota is critical to their missions. They recognize that manufacturers bring outsized value to their communities, with high-paying, highpotential jobs that can sustain the vibrancy of small cities and towns.
As Southern Minnesota Initiative Foundation president/CEO Tim Penny says in this issue’s “Four Questions” feature, “If there is a longstanding manufacturing facility, one that’s healthy and has a good
number of employees, it can keep a small town vibrant.”
That understanding drives all the Initiative Foundations to work closely with Enterprise Minnesota on some of our most valuable programs. Each of the foundations supports our annual State of Manufacturing® survey, helping identify participants and sponsoring our regional focus groups, which add unmatched insight to the results of our annual report.
Every year, Enterprise Minnesota releases the survey results in each of the Initiative Foundation regions, bringing together manufacturers, economic developers, legislators, and industry stakeholders. Supported by the foundations, these events provide a high-profile platform for sharing the survey results and give manufacturers an opportunity to connect with each other and highlight their value in the local economy.
Many foundation leaders also participate in the manufacturing tours we coordinate with elected officials. They are well-known and respected in their areas, and they can share their insight on the value of vibrant manufacturers to the health of their regions. The tours are among our most important outreach efforts as we build relationships with lawmakers whose decisions directly impact manufacturers and their communities.
The Initiative Foundations have also hosted our manufacturing Peer Councils over the years. Held monthly across the state for executives from small- and medium-sized companies, the forums give participants an opportunity to speak candidly and confidentially with their peers about their challenges and opportunities. For many small companies, they serve as an informal board of directors.
In addition to partnering with Enterprise Minnesota’s work, the Initiative Foundations perform a critical role in supporting the underlying health of the economies across Greater Minnesota. They are acutely aware of the workforce issues facing many of their employers, and have taken bold measures to address one particularly challenging aspect of that problem: childcare.
Spurred by concerns voiced by employers, including manufacturers, the foundations have developed programs for communities and childcare providers themselves. By offering training, consulting, funding, and other resources, they are increasing the number and quality of childcare slots available to families. Their work in this area is crucial to stabilizing the workforce in Greater Minnesota.
As we gear up for this year’s State of Manufacturing survey and continue our mission as advocates for Minnesota’s manufacturers, we couldn’t be more pleased with our “force multiplying” relationship with the Initiative Foundations.
Lynn Shelton is vice president of marketing and organizational development.
GROWING COMPANIES ENHANCING COMMUNITIES
Granite Partners is a private investment and holding company founded in 2002 in St. Cloud, Minnesota, with a mission to grow companies and create value for all stakeholders. We advance a culture of trust, innovation, and excellence as essential to 100-year sustainability, and we aspire to world-class wellbeing for everyone in the Granite community.
