Enterprise Minnesota Magazine - Spring 2023

A Hibbing company hopes to help manufacturers launch and safeguard their advances in automation. Helping

Learning toAdapt

Two leaders from Hennepin Technical College explore the enduring effects of the pandemic and the challenges of filling a growing market for manufacturing employees.

Left to right: Alison Leintz, academic dean; Joy Bodin, president

Helping Manufacturing Enterprises

What our clients say:

“The great thing with Enterprise Minnesota was they gave us the ability to question some of the standard practices we did, and actually to see another level of growth for our company.”

Five solutions for profitable growth

Keith Gadacz Bmath, Six Sigma, ISO

Eric Blaha B.A.E.

James Thomas B.S.M.E, Six Sigma, ISO

Steve Haarstad B.S.M.E., M.B.A., CEPA

Greg Hunsaker Six Sigma Black Belt

Ally Johnston B.S.I.E., Six Sigma, ISO

Amy Hubler M.B.A.

Nicole Lian M.H.R.M.

Michele Neale M.A.C.

Abbey Hellickson M.Ed.

Michael Tuohy, Chief Operating Officer Tuohy Furniture, Chatfield

LEARNING TO ADAPT

Two leaders from Hennepin Technical College explore the enduring effects of the pandemic and the challenges of filling a growing market for manufacturing employees.

Robotic Integration

A Hibbing company hopes to help manufacturers launch and safeguard their advances in automation.

Six Ways to Retain Key Employees

Manufacturers who understand key workplace trends can attract and retain top performers in today’s low unemployment economy.

SOM in Context

A panel of experts gives context to the results of the 2022 State of Manufacturing® survey.

Winning Game Plan

How Minnesota manufacturers are using a three-step process to beat the worker shortage.

Leaving Her Mark

Aura’s Jasmine Sonmor continues to post impressive numbers and community involvement.

Chip Shot

The vast majority of semiconductors are made overseas, but the CHIPS and Science Act aims to change that. Here’s why.

Bridging the GAP

Manufacturers find expert guidance through the Growth Acceleration Program.

Winning Game Plan

How Minnesota manufacturers are using a three-step process to beat the worker shortage.

As I travel around the state to share and discuss the results of the latest State of Manufacturing® survey, I’m encouraged that so many manufacturers have really started to win the battle against the worker shortage. I’ve noticed that the companies attracting and retaining workers in this low unemployment rate era have three things in common.

First, they don’t moan about the problem; they acknowledge it and look for solutions. Second, they are aggressive and creative in their recruiting and development strategies. And third — and I really think this is the key — they make sure their employees truly understand how important their role is in the success of the company.

It’s striking how leaders focus on solutions. I believe that’s why we had record registration and turnout for Enterprise Minnesota’s recent manufacturing workshop: “Insights and Strategies for Employee Retention.” Nicole Lian, one of our business development consultants who specializes in HR, talent and leadership development, led the workshop. You can find her suggestions for addressing challenges on p. 28 of this issue.

Manufacturers are also doing a much better job of recruiting creatively and developing employees once they are on board. They offer internships for local high school students, they provide tuition assistance for students willing to work and pursue degrees at technical colleges, and they offer incredible flexibility with scheduling — sometimes creating 2- to 3-hour shifts if necessary — to attract employees.

When new employees are hired, successful companies carefully lay out

career paths, providing specific training, and articulating key milestones for advancement. They meet regularly with all employees — not just new hires — to gauge progress and update goals for next steps in their careers. Employees can literally see their future with the company. There’s an energy at manufacturers that are doing this well. Employees know they are doing a good job. In many cases, they have interned or been mentored, or both, and they know that whatever their occupation is, they are well-qualified. They’re proud of what they’re doing, and frankly, they are happy.

Finally, and most importantly, employees remain loyal because they recognize the value of their work. The goals cascade down from leadership to the manufacturing floor, and employees know that what they’re doing matters to the success and growth of the company.

Sometimes conveying that value is difficult. A lot of companies are not making a finished product; they’re making parts for another company. Are those parts going into a Dreamliner? A John Deere tractor? A Caterpillar dozer? Is it going into instruments used in open heart surgery? When people understand they’re making a part that’s very important, they want to stay at that company — they really feel a part of it.

We’ll continue to have low unemployment rates, but I’m excited to see so many manufacturing companies successfully tackling the problem.

Publisher

Lynn K. Shelton

Editorial Director

Tom Mason

Creative Director

Scott Buchschacher

Managing Editor

Chip Tangen

Copy Editor

Catrin Wigfall Writers

Sue Bruns

Grace Bureau

R.C. Drews

Amanda Dyslin

Suzy Frisch

Nicole Lian

Tom Mason

Peter Passi

Kate Peterson Photographers

R.C. Drews

Matt Kowalski

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Bob Kill is president and CEO of Enterprise Minnesota.

A Truly ‘Niche’ Business

Eickhof Columbaria brings innovation and precision to the world of cremation burials.

Eickhof Columbaria can be found in almost every U.S. state and in Puerto Rico, Canada, South America, and Australia.

When Jack Eickhof designed his first columbarium about 40 years ago, he had no thought of making a business out of his innovative design. His reason for building one was personal.

At that time, Eickhof’s construction business was completing major projects in Minnesota and the Dakotas, from college and university buildings to missile silos. Jack had experimented with a number of construction-related inventions, but after attending a funeral and witnessing the placement of cremains into a monument, he

decided to build a memorial structure that could be installed in the First Presbyterian Church in Crookston to hold the ashes of his daughter Gretchen, who had died in a plane crash in 1978.

That columbarium is still the only church-housed memorial for cremains in the city, but today Eickhof Columbaria can be found in almost every U.S. state and in Puerto Rico, Canada, South America, and Australia.

While columbaria were not a new idea, cremation was not as common a choice in the 1980s as it has become today. Jack’s

design had stone-covered niches with hidden hardware that could be opened with a special wrench to provide access to the niches for interment. Engraved plaques could be installed with the names, birth, and death dates. On today’s niches the information is usually engraved directly into the granite or other stone.

After Eickhof’s columbarium was installed at the church, his daughter’s ashes were the first to be placed inside. When Jack died in 2020, his ashes were placed next to hers.

Jack’s unique hardware system led to

an early patent, but his entrepreneurial nephew Paul wondered if there might be a market for columbaria like the one Jack had built. Paul Eickhof attended a cemetery convention in Nashville where Jack’s design aroused curiosity and interest.

While some of Eickhof’s early columbaria were installed in cemeteries, churches, and other institutions in the 1980s, the business grew faster as cremation became more popular. Today about 60% of the American population choose cremation, and the number continues to grow. While some request that their ashes be scattered, many prefer a permanent resting place and a memorial. It makes ecological sense to inter over 100 cremains in a space that would accommodate only two caskets.

In the 1990s, Eickhof constructed the first free-standing round columbarium and placed it in Crookston’s Oakdale Cemetery. The monument has 64 niches with room for two urns in each — up to 128 cremains — in the space of two regular burial plots. That first monument is now filled to

projects has also increased.

Today more than 1,800 Eickhof Columbaria have been installed across the U.S. and beyond. The company employs 28 people: 23 at the 30,000-square-foot plant in Crookston and five who work remotely.

Charles Eickhof, Paul’s son, describes a relatively new option designed by the company — an ossuarium, which combines the concept of a columbarium with a space for communal interment.

“Inside the unit, there’s a center cavity,” Charles Eickhof explains. “To make use of that center space, we created an ossuary, a vault for the co-mingling of cremated remains [in soft urns]. The unit we fabricated is sort of a hybrid, since it has both the conventional columbarium niches and the inner ossuary portion — hence the term ossuarium, [another option] for providing a dignified memorialization.”

On display in the Eickhof showroom is the Eclipse, or semicircle design. Usually sold in pairs, two Eclipse Columbaria/ Ossuaria offer 312 niches (for up to 624 urns) and 540 ossuary spaces, providing a total of 1,164 spaces for cremains in an area that could accommodate four or five coffins.

Quebec City, Canada; extruded aluminum from Yankton, S.D.; cement board from Finland; and other materials from other sources, leaving Eickhof’s warehouse in a constant state of flux.

capacity, and last summer a second, larger columbarium was installed at Oakdale.

In the meantime, the business has expanded well beyond Crookston, offering a variety of sizes, shapes, and configurations. About 70% of Eickhof’s projects are customized to meet specific needs. Each project may take several months to complete.

The other 30% use Eickhof PreAssembled Modular Columbaria, which can be ordered with a variety of stone options in several colors and finishes.

The business has evolved alongside increased demand. Between 1990 and 1997, the company’s revenues quintupled. In 2012, the company employed 15 people and averaged 40-50 major projects per year. Growth has continued steadily over the past decade, with 75-90 projects per year. Sales increased by 22% between 2021 and 2022. The average size of

Guiding a growing company through continuous improvement

Paul Eickhof joined an Enterprise Minnesota Peer Council just before he became the CEO and owner in 2006. “I really never had any peers in business, so when I went to the meetings in Grand Forks it was helpful to hear from other business people about the problems they were experiencing running their businesses and how they solved them,” he says. When Paul stepped off the council a few years ago, Eickhof COO Peter Tollefson took his place.

Amidst the company’s growth, new challenges arise. With the increase in demand, stone and hardware elements are purchased and parts are assembled as project designs come together. Granite comes from Barre, Vt., Cold Spring, Minn.,

The company recently worked with Ally Johnston, a business growth consultant at Enterprise Minnesota, to involve employees more actively in assessing and solving problems. Johnston says Tollefson wanted to engage the employees actively in continuous improvement.

Johnston led the Eickhof team through a Principles of Lean Manufacturing workshop “to spur ideas and get people thinking and speaking the same language.” She helped participants from the production floor suggest small improvements they could implement on their own, and then generate ideas for larger organizational projects.

The group came up with about 20 ideas, Johnston says. She then ranked them for high customer impact and low effort and cost. Warehouse concerns surfaced as something to be tackled — issues of storing and moving materials safely and efficiently.

Johnston then transitioned to Kaizen and 5S projects. “The group made improvements not only as to how they pick projects and the amount of time it takes to

To accommodate growth, the company is using continuous improvement to involve employees more actively in assessing and solving problems.

We look at banking from a different perspective: yours.

While some request that their ashes be scattered, many prefer a permanent resting place and a memorial. It makes ecological sense to inter over 100 cremains in a space that would accommodate only two caskets.

do things, but they also worked through what to do with excess stock (stone/ granite) to find the safest, most efficient ways of moving and storing stone,” Johnston says.

Johnston says the Eickhof crew “was very active. Between meetings they were very engaged in doing things outside the actual class, not just going through the motions. They addressed areas that weren’t even part of the scope of the project.”

Tollefson and the Eickhofs will carry on with continuous improvement. Charles says the company has always tried to improve what they do, particularly through refining the hardware and providing design flexibility in their products, which has made them successful. With projected continuous growth and additional focus on small improvements in process, the company will continue to see even more efficient productivity.

Sue Bruns

Knowledge. Experience. Resources.

At USI, we’ve become a leader by doing things differently. We bring decades of employee benefits and risk management experience, a proprietary risk analysis process and a local team supported by the expertise of more than 8,000 professionals nationwide.

For decades, we have provided the solutions and services that companies count on to protect their businesses and employees. We’d like to do the same for you.

ACHIEVERS

Leaving Her Mark

Aura’s Jasmine Sonmor continues to post impressive numbers and community involvement despite COVID-related tumult.

asmine Sonmor caught the eye of manufacturers statewide in 2018 as the then 26-year-old owner and CEO of Aura Fabricators capped three years of explosive growth by opening a new $3.8 million Fergus Falls facility that doubled her company’s footprint.

Now, four years later, the metal fabricator has partnered with state and international governments on highprofile projects, like the Baudette/Rainy River International Bridge along the Canadian border and St. Paul’s new Dale Street Bridge near the historic Rondo neighborhood. Aura’s network of clients spans Minnesota and the surrounding four states plus Hawaii, typically including state DOTs such as MnDOT.

This year could be one of the company’s biggest.

Growing pains

Sonmor learned metal fabrication from an early age, starting with getting her

hands dirty at her father’s company White Oak Metals. After receiving a degree in engineering in 2015, she founded Aura Fabricators, absorbing the staff, equipment, and workload of her father’s company, as he struggled with his health. Perhaps surprisingly, however, she says it was never about following in his footsteps.

“It was more that my father’s footsteps happened to be an accumulation of everything that I enjoy and find fulfillment in,” she says. “I tried not to follow in his footsteps. I looked at other industries, but all my interests brought me back to the steel industry.”

Within three months of the acquisition, business volume doubled. The Dalton facility was pushed beyond capacity as Aura salvaged a series of contracts from a collapsing Wisconsin-based competitor. Sonmor tinkered with scheduling, adding night shifts and anything she could to absorb the growth, but a second location was unavoidable. She moved to Fergus

Falls, 10 miles west, to expand the company’s hiring pool; the new building and youthful owner attracted young and optimistic workers.

“We were really big and shiny right away,” Sonmor says, but eventually the excitement wore off. The same younger workers who insulated her company from a rampant workforce shortage later played their own part in the pandemic’s “Great Resignation.” To make matters worse, in 2022, the pandemic downturn finally reached Aura Fabricators. Government projects were thin on the ground, and Sonmor knew her teams would need to brace for a leaner year.

“While most industries felt [the impact of the pandemic] right during COVID, I was the opposite,” she says. “It was very delayed.”

Stronger than ever

The steel industry suits Jasmine Sonmor’s interests: mathematics, art, and work that produces tangible results. Her business began to support her livelihood, but even in the beginning, there was a sense that her pursuits could help support others — that she could have an impact.

During those first months, young Sonmor faced pushback from those who doubted her ability. Today, she says the difficult conversations and endless reassurances to clients taught her a great deal about working in partnership. It also taught her perseverance.

Jasmine Sonmor learned metal fabrication from an early age, starting with getting her hands dirty at her father’s company White Oak Metals.

When hardships hit last year, Sonmor buckled down and waited it out. Now, she says the tide is changing. Government contracts are flowing once more, and she anticipates the first year in her firm’s history where she can plan ahead rather than operate on a reactionary basis.

“We’re finally poised to handle some growth,” she says, and she’s eager to move forward. “I know how much we’re capable of, how talented my team is.”

She’s also used the last several years to build her connections outside the steel industry to become a regional leader and role model. She’s involved in a STEMbased advisory committee for the local schools, at times donating steel and materials to a school’s programs. She sits on the board of directors for the local hospital foundation. And she’s a member of Greater Fergus Falls, an economic development entity.

NeTia Bauman, CEO of Greater Fergus Falls, calls Sonmor integral to the area’s development work. “To have a local entrepreneur like Jasmine willing to share

her successes and failures — to be risktolerant, adaptable, and persistent — is key to our success,” Bauman says. “By sharing her journey with others, she alleviates fear and cultivates motivation in prospective entrepreneurs.”

Having an impact

Why invest time and money into the

success of other people and other (even competing) businesses?

“I don’t look at it as a ‘me vs. you’ situation; it’s truly a community,” Sonmor says. “I think every business should support every other business. The more businesses are thriving within our community, it’s just going to generate more revenue” through new jobs, development and expansion projects, tax dollars, and even tourism.

On a personal level, she tries to serve as a role model and to encourage big dreams. She’s inspired, she says, by conversations with students about careers in manufacturing and the skilled trades, especially young girls interested in welding or programming or who hope to someday run their own companies.

“I want to make an impact on the people around me,” Sonmor says. “I want to make an impact on the community, and I want to make an impact on my family. I want my kids to grow up seeing a hard-working mom who isn’t afraid of a challenge.”

R.C. Drews

“We’re finally poised to handle some growth,” Sonmor says, and she’s eager to move forward. “I know how much we’re capable of, how talented my team is.”

50TH ANNIVERSARY

Making Waves

of the quality of labor lately, that’s going to have to be one of our big pushes to stay competitive,” Winter says.

ShoreMaster, a Fergus Falls-based manufacturer of aluminum dock and lift products, has quietly emerged as America’s largest core brand in a huge, nationwide portfolio of interconnected waterfront equipment companies.

Last year alone the company celebrated its 50th year in business by completing another in a long line of acquisitions — this time a North Carolina fabricator of saltwater docks, lifts, and accessories — and welcomed a new CEO following the retirement of longtime president Don Hurley.

“Not a lot of dock and lift companies have reached 50,” says Chris Winter, ShoreMaster’s VP of operations. ShoreMaster even prospered through the pandemic. “The last years have been record year followed by record year,” he says. “I don’t remember the last time we didn’t beat the year before.”

The secret to continual growth, according to Winter, has been to complement a top-notch product and great people with continuous improvement.

Always bigger, always better

On the factory floor, a flash of blue and orange light ignites from a pair of robotic

welding arms working in harmony to join an aluminum frame as long as a pickup truck. Elsewhere, another robot uses wire touch-offs to inspect aluminum fixtures as part of ShoreMaster’s rigorous quality control process. Winter says these automated procedures have elevated the company’s always-high quality control standards beyond what was possible 50 years ago.

“We don’t like anything leaving here that you wouldn’t want in front of your own house,” he says. Any product that doesn’t make the cut is scrapped.

ShoreMaster benefited from the pandemic in a way that many manufacturers didn’t. As more people stayed home, some took to the water for a little relief, and all those aquatic toys needed a place to park. The increasing demand was great until it became a problem, and the robots have helped keep production moving during a time when eager applicants were sparse. Today the company deploys five robotic arms for welding, loading, and handling a portion of quality control, with a sixth on the way. And there will be even more by year’s end.

“With all the labor shortages and some

ShoreMaster maintains three facilities (one each for its aluminum, steel, and plastic products) in Fergus Falls, with more than 135,000 square feet of working space. A team of over 130 staff makes it the largest company in the Waterfront Brands (ShoreMaster’s parent company following a 2021 rebranding) portfolio. Staying competitive in a dense market means always seeking new and more efficient processes, and a steady investment in automation is only one example of the ways the company has constantly adapted.

Continuous improvement has always been a company priority, Winter says. “We don’t sit stagnant. The way we do something today might not be the way we’re doing it tomorrow if there’s a better way.”

It’s not so different from the company’s start five decades ago.

Small town, big ideas

In 1972, founder Dennis Tuel, Sr. defied industry norms by designing an aluminum dock and lift system at a time when most competitors were working with steel. Lighter, more resistant to rust and corrosion, and surprisingly robust, the innovative products helped his business grow for over a decade in the small town of Carlos. In the late 1980s, he relocated to Fergus Falls, lured by tax incentives and a larger workforce. He would eventually sell the company, which for more than a

How ShoreMaster built one of the country’s largest, most-enduring waterfront equipment empires.

Chris Winter, VP of operations

decade now has been owned by private equity groups.

ShoreMaster has replaced Tuel’s original designs but has continued reinventing waterfront infrastructure, expanding facilities, branching out into new product lines and processes — like plastics and textiles — and developing a nationwide network of retailers to deliver and support its products.

The business was manufacturing six different brands by 2019, though the ShoreMaster label remained the largest, and what followed was a string of headline-making changes. It began with the merger of Oklahoma-based HydroHoist, a household name in the south whose hydraulic lifts can support enormous 60,000-pound watercraft. HydroHoist’s international sales network made ShoreMaster the world’s largest combined marine equipment manufacturer.

Then-president Hurley knew the opportunities wouldn’t stop there.

The next year, ShoreMaster/HydroHoist acquired Neptune Boat Lifts of Fort Lauderdale. Neptune’s saltwater boat lifts reached new customers in coastal markets. The combined companies rebranded as Waterfront Brands in January 2021.

When Hurley announced his retirement in 2022, the Waterfront Brands board sought someone with similar values to take the reins. They found it in Corey Duke, who was hired earlier that year as executive vice president and chief communication officer. Hurley remains a board member and consultant, and Duke was promoted to CEO in the fall of last year.

Duke spent 14 years with the Brunswick Boat Group, working as general manager for a product line that included the Bayliner and Heyday boat brands. He says he’s excited to lead the company forward, giving a nod to the growth under Hurley’s leadership.

“Corey’s experience and personal style equip him extremely well for this role and positions Waterfront for the next phase of growth,” Hurley says. “It has been a privilege to lead this organization and team. We have faced challenges and diversity, yet through it all, we continued to grow and prosper. I could not be more excited about what’s next for this remarkable organization.”

R.C. Drews

Let’s take a look.

ƒ Facility Assessments

ƒ Master Planning

ƒ Mechanical and Electrical Upgrades

ƒ Structural Enhancements

ƒ Environmental Assessments

ƒ Site Improvements

ƒ Design for Renovation, Additions, and New Construction

ALEXANDRIA

Greg Bohl AIA, LEED AP, CID 320.335.5009

Greg.Bohl@Widseth.com

EAST GRAND FORKS

Brent Dammann AIA 701.765.8005

Brent.Dammann@Widseth.com

BRAINERD

Mike Angland AIA

218.316.3608

Mike.Angland@Widseth.com

ROCHESTER

Dana Hlebichuk AIA 507.206.2135

Dana.Hlebichuk@Widseth.com

Widseth.com / Portfolio / Industrial

STAFF PROFILE

Experience Beyond His Years

As one of Enterprise Minnesota’s newest members, business growth consultant Eric Blaha brings a wealth of industry experience amassed in a surprisingly short time. Though he just graduated from North Dakota State University (NDSU) in 2018, he’s already

spent more than six years working with a diverse array of manufacturers.

“It’s a tremendous amount of experience for a young person,” says Bob Kill, president and CEO of Enterprise Minnesota. “In a very short period of time, he has attained very sensible ways

to apply measures in quality, continuous improvement, and machine uptime.”

Blaha entered the world of manufacturing while he was an undergraduate student pursuing a degree in agricultural engineering. He spent nearly two years interning with CNH Industrial, a global company that provides equipment and services for agriculture and construction, before joining CNH full-time after graduation.

That gave Blaha a rare opportunity to observe manufacturing operations around the world, touring facilities in Austria, Germany, and throughout the U.S.

“It was very interesting. Europe has a different focus than the U.S. when it comes to manufacturing. They’re much more advanced in the environmental and safety aspects of operations because their regulations are so different. So, I got to see a lot of best practices, as well as some

phenomenal lean techniques,” he says.

Blaha later joined Revolv Manufacturing in Brainerd (formerly Stern Assembly) first as a quality assurance manager and then as a plant manager. As a supplier of manufacturers, Revolv gave him the chance to experience a different side of manufacturing; he spent time working directly with OEM (original equipment manufacturer) customers and learning from a variety of processes and facilities.

Business growth consultant Ally Johnston says his background is a great asset to his clients. “The places he’s worked and the roles he’s been in lend very well to our clients. He’s been in a lot of the same shoes as them, so he’s had to solve their same problems.”

Now Blaha brings his experience and passion for continuous improvement and lean processes to manufacturers across the state. He enjoys working on process flow and facility layout, and he’s especially fascinated by opportunities for automation.

“Most people think of automation as industrial robots,” he says. “But that’s not always an accurate picture. I look at things like machine monitoring and simple

Although young, Eric Blaha boasts a wealth of manufacturing experience.

Eric Blaha brings his experience and passion for continuous improvement and lean processes to manufacturers across the state.

Introducing automation can be as simple as monitoring the processes, including machinery, a company already uses.

automation to make operators’ lives easier, and to improve the quality and throughput efficiency of the production space.”

Introducing automation can be as simple as monitoring the processes, including machinery, a company already uses. With machine monitoring software (MMS), manufacturers can study trends in their machinery usage and diagnose problems more easily. Blaha’s helping to pilot a service that brings MMS directly to Enterprise Minnesota’s clients.

“We loan the [MMS] hardware to our clients,” Johnston explains. “We help them see how having this type of data can improve their operations. Then if they want, they can go out and buy their own equipment, now that we’ve guided them through it and it doesn’t feel like such a daunting task. Eric completely brought that to us.”

According to Blaha, improvements like these are only possible with the continuous collaboration and cultivation of employees. The ultimate goal is to make operators’ lives easier, which in turn creates a process that’s more repeatable,

stable, and profitable.

“Many people think continuous improvement is all about the process itself,” Kill says. “Eric understands the value and the necessity of also developing people while you’re improving and developing better processes.”

have hours — not days or weeks — to get a really thorough understanding of a company, their people, and their process.”

When he’s not on-site with a client or developing new content for manufacturers, Blaha spends time on his farm in Verndale. He’s been raising beef cattle with his dad since he was 12 years old, but now carries 37 head on his own land. He even makes sure to implement lean processes around the farm.

“That keeps me busy on the nights and weekends,” he says. “I enjoy learning about agriculture, and I raise and sell direct finished beef. I’m hoping to scale up, too, and get to the point where I can carry 100 head at any time.”

So far, Blaha’s already worked with upwards of 30 manufacturers around Minnesota. The biggest learning curve? Getting to know a company in a compressed time frame.

“You have a different mindset when you’re not entrenched in a company,” he says. “You have to look at things differently since you’re not there every day — you’re just getting a snapshot. You essentially

“Younger people come with new ideas, they come with fresh concepts,” Kill says. “We’re not looking for people who are looking to ride into the sunset; we’re looking for people who see this as an opportunity. They see this as a chance to grow in their career and as a person. And Eric really fits that culture we want to have.”

Grace Bureau

“Most people think of automation as industrial robots,” Blaha says. “But that’s not always an accurate picture.”

Energized by Energy

Within the massive electrical power industry, Faribault-based manufacturing company Trystar has positioned itself in a growing area of the market, ensuring critical facilities and events stay powered.

Whether it is supplying power to a large industrial construction project, providing critical backup power to hospitals and data centers, or supporting 12.5 million watts of electricity used at the Super Bowl, Trystar makes power accessible and reliable.

Take the Super Bowl in Minneapolis in 2018, for example. Electricity needs ranged from the PA system to the concessions stands to the surrounding blocks of events and business activities, which created a situation where the existing electrical grid couldn’t handle the demand. Trystar pro-

vided the equipment and support to bridge that gap.

“We’re a custom-solutions provider for the electrical power industry, which is billions of dollars big,” says Andrew J. (AJ) Smith, Trystar CEO. “Most within the industry have made it their business model to create thousands of the same thing over and over again, and they’re not willing to customize product.”

When the standard electrical grid needs to be backed up, augmented, supported, or — in the case of a natural disaster — replaced, each situation requires a different solution.

The demand for such services is growing exponentially as the under-funded and unreliable power grid becomes more taxed,

Smith says. That demand has resulted in incredible growth for the company in a short period of time, with the majority of equipment going to clients nationally and even 10-15% of sales internationally.

“We will end 2022 at about 2.5 times the size we were just a few years ago,” Smith says. “That’s a pretty rapid clip.”

Smith came aboard in 2019 when the family-founded company was solely based in Faribault. Trystar has since expanded to include a Burnsville office and facilities in Troy, Mich., and Houston, Texas, which became part of Trystar via acquisition. During the pandemic, the Faribault operation moved into an upgraded 100,000-squarefoot manufacturing facility with an additional 20,000-square-foot addition for new offices. Recently Trystar had to add an additional 75,000 square feet of manufacturing space to the facility to support the rapid growth and new product line development.

“People might assume that during COVID when all the events were being canceled that there would be less of a demand for power, but as a matter of fact, we were using the equipment for supporting things like the stand-up testing and vaccination sites that the National Guard was being deployed to,” Smith says. “We are the industry leader in these types of solutions.”

Rapid growth creates challenges, including talent recruitment and creating and training new positions within the company, says Vanel Sanchez, human resources director. There are about 200 employees in Faribault and over 100 others at the other locations, and the need for new hires has increased 20-30% per year, Sanchez says.

“The growth has really been dramatic,” he adds.

That rapid growth is part of the reason Smith and Sanchez began working with Enterprise Minnesota on employee leadership training sessions.

“We realized we had to start standardizing our process to create leaders internally and to create the Trystar leadership flavor,” Sanchez says.

Abbey Hellickson, an Enterprise Minnesota business growth consultant, began working with a mix of current and emerging Trystar leaders in spring 2022 to help support career pathways. Sessions have included communication styles and employee engagement techniques, among other things.

“We wanted to give them a common language in leadership roles,” Hellickson says.

Left to right: Vanel Sanchez, human resources director; AJ Smith, CEO

“We will end 2022 at about 2.5 times the size we were just a few years ago,” says CEO AJ Smith. “That’s a pretty rapid clip.”

Smith says the sessions have been valuable, and the employee feedback has been stellar.

“Because we have such great employees, the best thing we can do is train them to advance within the company, and we want our team members coming up with innovative ways for us to scale our business,” Smith says. “We also want a consistent set of tools and management philosophies.”

Sanchez says company culture works in Trystar’s favor in an industry that’s challenged by a big need for talent. Founded in 1991 as a family company, those initial customer-centric values trickled down through the decades of employees.

“It is a family-like culture where employees are going out of their way for each other, and all of them are rallied around this single mission of serving the customer no matter what,” Smith says. “That’s what I’m really focused on maintaining as we grow.”

That culture results in word-of-mouth referrals from current employees, Smith continues.

“Most of the time, your best recruitment and staffing comes from networks of your employees, and the environment we’ve created has allowed us to do better than most,” he says.

Looking forward, Smith says he doesn’t see an end to the demand and growth. Data centers are popping up all over the country, large-scale special events are rebounding after the worst of the pandemic, and natural disasters will continue to occur.

—Amanda Dyslin

Chip Shot

The vast majority of semiconductors are made overseas, but the CHIPS and Science Act aims to change that. Here’s why.

Brad Ferguson has a stark warning for those who think the supply chain crisis is over. Ferguson is the chief government affairs officer for Bloomington-based SkyWater Technology, a semiconductor co-developer and producer. He knows his industry, which lies at the heart of supplying any item with an on/off switch, remains vulnerable.

“If China were to attempt reunification, the result may intentionally or unintentionally reduce the semiconductor output from Taiwan that the world has come to rely on, potentially making the COVID-related disruption look minor by comparison,” Ferguson says.

It would be easy to become complacent about supply chains. Once nearly-empty auto dealership lots are full, appliances are available in all shapes, sizes and colors, and electronics are promised with next-day delivery. But because China and Taiwan supply such a huge percentage of chips globally, tension in that region means manufacturers everywhere could see a repeat of the COVID-era supply chain chaos.

For manufacturers that require semiconductors for their final products, or in the equipment needed to make those

products, help is on the way. Eager to avoid a future semiconductor-related supply chain crisis, Congress last August passed and President Biden signed into law the CHIPS and Science Act, which aims to boost domestic production of semiconductors.

The law provides more than $52.7 billion for American semiconductor research, development, manufacturing and workforce development. Specifically, CHIPS authorizes $39 billion in manufacturing incentives, including $2 billion for legacy chips used in automobiles and defense systems; $13.2 billion in research and development and workforce development; and $500 million for international information communications technology security and semiconductor supply chain activities.

A complex and booming market

While COVID-19 helped expose the precarious nature of international supply chains, it also boosted demand for hightech products. “The pandemic underscored the importance of semiconductors for remote work, telehealth, and rapid vaccine development, among many other areas,” says Ferguson.

SkyWater is one of several technology

companies that grew out of Control Data, a pioneer in the mainframe computer industry that operated in Minnesota from 1957-1992. Ferguson says the semiconductor industry is poised for enormous growth in the coming years. “For the first 75 years since the invention of the transistor, the demand has grown to $500 billion annually. Experts estimate demand will more than double in the next seven years,” he says.

U.S.-based semiconductor firms operate in a complex market, where the U.S. still dominates the design, intellectual property and equipment aspects of the industry but actually produces a small percentage of chips. Instead, manufacturing has been outsourced to overseas production facilities to a great extent.

Taiwan has developed a truly dominant chip manufacturing sector — experts estimate more than half the world’s semiconductors are assembled there. Another 20-25% of semiconductors are produced in China.

Closing the gap between international and domestic production will take time and significant investment, but doing so is critical for supply stability and national and economic security.

Creating a level playing field

Across all industries, growing reliance on overseas manufacturers since the early 2000s has been driven by cost. Sourcing part or all of a product from lower-cost countries has boosted profits for companies and kept prices down for consumers. Shifting some portion of production back to the U.S., where costs are higher, will be a challenge.

The pandemic underscored the importance of semiconductors for remote work, telehealth, and rapid vaccine development, among many other areas.

The CHIPS and Science Act hopes to address that concern, creating financial incentives that would erase some of those cost differences. Companies like SkyWater, which already produces all of its semiconductors in the U.S., are well-positioned to take advantage of the legislation.

“We are excited about the potential to increase scale, output, and employment from the manufacturing incentives in the program,” Ferguson says.

In addition, the legislation provides funding for companies that are in a position to develop avenues to bridge the so-called “valley of death” from technology concept to production. Because of SkyWater’s work on creating a seamless process from idea to final product, Ferguson believes his company is competitive for this aspect of funding. “There are many elements of this program that are well-aligned with what SkyWater has been building over the past five years,” he says.

Ferguson also applauds the 25% tax credit for semiconductor investments to partially offset the large incentives already offered overseas for semiconductors as the impetus to move manufacturing back home. “Hopefully that will start to level the global playing field,” he says.

Averting another supply chain crisis

While the CHIPS Act will directly and immediately impact semiconductor manufacturing firms, the legislation ultimately aims to benefit all manufacturers that use chips. Ferguson notes that while end-product manufacturers should have multiple sourcing options for semiconductors, it is also important to have a U.S. source for semiconductors, for national and economic security reasons.

“What COVID taught us all is the importance and fragility of the semiconductor supply chain for nearly all industries,” Ferguson says, citing idled assembly lines, lost jobs and billions of dollars in lost productivity as manufacturers waited for the delivery of semiconductors from overseas.

“Investing in U.S. manufacturing will help to buffer our economy against such disruptions.”

— Kate Peterson

we found them.”

How Both Sides Win

When new owners purchased Integrated Manufacturing Solutions (IMS) of Shakopee in 2014, it was a typical early-stage company focused on getting its business off the ground and fostering consistent growth. Developing a culture of employee support and advancement just hadn’t been a top priority.

Full-time and contract employees worked on sheet metal manufacturing, powder coating, laser cutting, and welding, but they didn’t really have insight into how their efforts helped customers. Opportunities to learn and grow at IMS were limited, as were employee benefits. It was more of a punch-the-clock operation, says Kevin May, president and CEO of St. Paul-based CT Holdings, which owns IMS.

CT Holdings provides its portfolio of small businesses with shared services, including finance, operations, and human

resources. Its leaders sought to transform IMS into the well-oiled manufacturing company they envisioned by changing how it approaches its most important asset: its people.

“We’re really in the people business,”

May says. “Our goal is to build sustainable businesses around people who happen to do industrial wireless communication, software development, or fabrication, and build a foundation of perpetuating growth and stability. It’s about leaving things better than

Kevin May, president and CEO

May and team found that the best way to improve IMS was to change the way it provides opportunities for advancement while bolstering its benefits. The company started in 2019 with offering health care insurance to employees and their families, later adding a 401(k) and short-term disability while aligning pay to the market.

“IMS didn’t create stability or opportunity for growth for its people,” May says. “When we came on board, we really wanted to improve conditions for employees. It’s about ensuring that you have a safe place to work and that you are delivering value — and you should get something for that.”

Transformed training

Another key change involved the way IMS handles training. Leaders developed a progression plan for employees who are interested in learning new skills. Generally, new hires come in as contract workers, giving both sides time to get to know each other. When IMS hires people full-time, they can begin training in departments like press brake operations, laser cutting, and powder coating, says Charlie Pehrson, vice president of operations.

Participation is voluntary. Those who sign up follow a four-level progression under the direction of a lead employee in the department. They work at their own

Integrated Manufacturing Solutions fosters growth by transforming its approach to people and culture.

IMS’s combined efforts to enhance the employee experience are paying off.

PHOTOGRAPHS BY MATT KOWALSKI

pace to master a range of skills at each level, Pehrson says. If they want to reach level one or two and stop, no problem. And if they want to continue until they complete all four levels, even better. As employees finish each level, IMS adjusts their wages to reflect their new capabilities.

“It’s very unique and it’s been a success,” Pehrson adds. “Employees look at it as a value-add or a hidden perk. They are able to expand their knowledge, and they are grateful to be given the opportunity. Everyone needs an opportunity to move into a new role.”

The training program also helps IMS build resilience in its operations. If one area of the business is slow and another slammed with work, employees with cross training can shift gears to work in another department instead of being sent home, May says.

These changes — and many more — have put IMS on a strong growth path. When CT Holdings purchased IMS, it had $2 million in sales. In 2022, IMS brought in $10 million and is on track to hit $11.3 million in 2023. IMS now has 70 total

employees, including 46 full-timers.

Another key contributor involved leaders’ efforts to build a worker-friendly culture.

To increase staff members’ connection to their work, IMS started holding employee appreciation events and inviting customers. While celebrating with food trucks and games, employees also see the final result of their manufacturing work. At one recent gathering, employees were excited to watch a part that they painted or welded in action on a customer’s security product.

“They saw what it’s doing and the value it’s bringing to the world,” May says. “It’s a big deal for me personally to show employees why they matter to each other, why they matter to their customers, and why their work has value beyond IMS.”

Change management

Instituting all of this change wasn’t easy, especially as IMS had to fight through the upheaval of the pandemic, too. It took time to build trust and get buy-in with staff, prompting the company to call on Enterprise Minnesota consultants for help with leadership development. Together,

they built a cohort of employees in key departments who champion the changes across IMS.

The company’s improved training and benefits has bettered its ability to retain employees in a tough hiring market. It also helped fuel a shift from being more of a job shop with significant churn in work and pricing to one that builds deeper relationships with customers and provides more stability to all.

IMS’s combined efforts to enhance the employee experience are paying off. At their core, the changes send the message to staff that they are an important part of IMS, with pathways to continue building skills and opportunities, May says.

This transformation has confirmed May’s view of how to grow profitably and sustain that growth at any company. “Employees are the most important asset in your business,” he adds. “If you can’t connect the value you’re bringing to them with the value they’re bringing to you and that both sides are wining, then both sides lose.”

Suzy Frisch

MANUFACTURING AT YOUR FINANCING BUSINESS

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Second Acts

Paydac

Shortly after Jim Nelson retired from the local Fleet Farm retail store a halfdozen years ago, he called longtime friend Phil Johnson, owner of Paydac Plastics, to check out possible part-time gigs. Nelson’s retirement had flourished during the many summer activities that Fergus Falls had to offer, but the winters were another story. “I don’t snowmobile anymore, and I just wondered what I was going to do with myself,” he says.

Johnson saw an opportunity. He hired Nelson to fill in for an employee experiencing a long-term medical issue, and another was enjoying an extended visit with family in California.

“It worked out pretty well,” says Nelson, who continues a happy employment with Paydac.

It worked for Johnson, too. What started as a favor to help a buddy relieve the housebound tedium of a Fergus Falls winter has evolved into a surprisingly effective low-tech complement to Johnson’s plan to automate his operation in the face of the ongoing diminution of available workers.

About a third of Johnson’s 20-person operation already consists of part-time retirees; he expects that percentage to rise to 50%.

Johnson says his “retiree” strategy serves mainly as a precaution against possible

future worker shortages, not because he faces any current challenges of recruiting and retraining workers. “It’s not a concern for us,” he says. “A few people have quit over the years, but almost never because they were disgusted with the job. It’s usually that they found something with better pay.”

He attributes Paydac’s high HR stability to a company spirit that treats employees as extended family. “We never call them employees,” he says. “It’s a very familyoriented company, and we want their work to be rewarding for them.”

The influx of older employees, Johnson says, has only enriched that culture. “You can’t beat their work ethic,” he says. In fact, he occasionally needs to persuade some of his repurposed retirees to take time off. “They’re retired,” he continues. “We understand if their grandkids have a school play at noon, we want them to go, whatever it is. Just let us know.

“Most of them are used to working a 40hour work week,” he adds. “They think, ‘If I’m dependable, I better be there.’”

Phil and his wife Teresa founded Paydac in 2001 on the site of a nearby abandoned creamery that they had purchased as a prospective real estate investment. After selling off his family’s dairy operation in

Plastics hires retirees as a surprisingly effective low-tech complement to its preparation plans for a future through automation.

Left to right: Co-founders

Teresa and Phil Johnson

PHOTOGRAPHS BY R.C. DREWS

1996 — “Farming is a great way to live but not a very good way to make a living,” he says — Johnson had been working for a local plastics company but was ready for another challenge. One emerged when a company near the Twin Cities offered him a contract to regrind scrap plastic into a reusable commodity. He accepted the offer, even before he and Teresa had closed on the creamery property. He bought some equipment and spent several grueling months working eight-hour days for his employer and then eight more hours for his new project.

The original project that called for regrinding 20,000 pounds of material quickly became 60,000 pounds; the profits paid for the machinery he bought to do the job and inspired him to establish Paydac Plastics. “It just made sense to move forward,” he says.

Paydac specializes in custom plastic injection molding. Johnson can trace much of his company’s steady growth toward today’s $2.4 million in revenue to a relationship forged in 2003 with StoneL,

a local valve manufacturer today owned by Valmet, a Scandinavian conglomerate. Johnson estimates that Valmet constitutes up to 90% of Paydac’s revenue.

Paydac molds 100% of the parts for Valmet’s Fergus facility, which has always kept his plant humming. “There were years when it was all we could do to keep up to their growth,” Johnson says. With just a 10-minute drive between facilities, Paydac maintains a seamless supplier relationship that would make Toyota proud.

“It works unbelievably well,” he says. “For the most part, we’re in tune to what they need and when they need it.”

Johnson plans to keep pace with his customer’s demand through the efficiencies of automation. “We don’t want to add it just to add it,” he says, “but there are real benefits. We want people to be able to do more work without having to work harder.”

Despite the supply-chain challenges in 2022, Johnson added two machines with robotic components and plans to make other purchases. “My biggest challenge is to navigate that process.”

One new machine enables Paydac to efficiently process a project solely in the Fergus plant, where it previously involved boxing and shipping crates to and from the still-operating facility in Elizabeth. The robotic equipment eliminated travel time, cut production time in half, and provided greater per-piece accuracy.

“We eliminated one operator for that job, which means we’ve got that operator doing something else,” he says. “That one job will pay for the machine.”

Finding automated equipment can still be a challenge, and Johnson himself takes on the programming work after receiving significant schooling from salespeople.

“They’re making programming much simpler nowadays,” he says. “There’s no way I’d have been able to program some of the original robotics.”

—Tom Mason

When Good Values Mean Good Business

How

Brothers Tim and Pat Herold grew up in the precision sheet metal and assembly industry, watching and then working for the company their father started. When they kicked off Herold Precision Metals in 1997, establishing a culture of respect for individuals and ensuring transparent communication were top priorities.

Like most manufacturers, White Bear Township-based HPM has endured one challenge after another over the last three years. Each time HPM cleared one hurdle, the company faced another. During those trials, HPM’s core values – strive to be better, respect, passion and integrity – guided every action.

When business slowed in the early stages of COVID-19, the company launched a plan to reduce hours but keep pay whole. “We literally laid out a plan for how long our funds would last us to be able to take care of our families,” says Tim Herold, HPM’s president and CEO. “I have always

said we have two customers: those who pay the bills and those who make the parts.”

HPM went to a company-wide 32 hour, full-pay work week for its 122 employees in the early stages of the pandemic, before Congress authorized PPP payments for employers. Business picked up again after about 12 weeks, and the company resumed its normal work schedule. Since then, the only attrition the company has had is from retirements.

As the pandemic wore on, Herold knew other companies were facing troubles, so HPM sent out mass emails every couple of weeks to get updates from vendors in the company’s critical supply base. “We wanted to make sure we had a good pulse on who might be struggling and how that might ultimately affect our workload and our customer service,” Herold says. Of HPM’s vendors, 90% have been working with the company since its beginning.

HPM survived that first summer, but start-

ing in September 2020 it faced what would quickly become a heart-stopping 200-300% increase in raw material costs. The company forwarded copies of invoices and purchaseorder confirmations from its vendor network to critical customers to try to validate price increases. “Our goal was to be as transparent as possible,” Herold says. “Most customers were very understanding.”

Process improvement

In the midst of these external crises, HPM was implementing major process changes. Greg Schreier, HPM’s general manager, says the manufacturer ran on the intuition of its founders for its first 20 years.

To build on this base and formalize it, HPM contracted with a third party to implement a strategic planning process. Every action taken within the annual strategic plans reflects the company’s culture of transparent communication and emphasizes relationships.

At a series of offsite meetings each fall, the leadership team agrees on revenue and income goals, as well as projects to support these goals. “Normally everybody has eight to 10 projects they want to get done,” Schreier says. “With seven leaders that could be 70 projects. There’s no way all that’s going to get done.”

He uses the planning sessions to pare down the ideas to those that can actually be accomplished. Schreier tracks the implementation of the ideas through software and monthly follow-up meetings.

One of the strategic plan projects called for HPM to bring in Enterprise Minnesota

Tim Herold, president and CEO PHOTOGRAPHS BY MATT KOWALSKI

to improve outcomes on the shop floor. An outgrowth of these sessions was to set up 4’x6’ Gemba boards in each department to keep teams on the same page with respect to key objectives. Schreier says all department leads have been trained in how to manage and communicate about the Gemba boards.

“Safety, quality, delivery, and productivity — in that order — are our goals,” Schreier says.

The process enables leads to run their departments as their own business, according to Schreier. “As part of that, every Monday morning the entire leadership team, before our staff meeting, goes around to these Gemba boards and each of the leads reviews the previous week.”

Schreier calls the results “one of the bigger cultural transformations in a workforce that I’ve been involved with. It gives everybody in the building real visibility about the performance of each department, and it also connects leadership very closely to the shop floor, which is one of our closely held

cultural virtues here.”

Strategic planning has yielded other wins for the company as well. Last year, HPM added a director of IT to help the company fully utilize its enterprise management software. They hired an experienced programmer who has used that software to revamp the entire operation, from inventories to scheduling, to ensure HPS is as accurate and efficient as possible with its informa-

tion. “She’s been on board now for about six months, and we’re already starting to see gains from that,” says Schreier.

HPM also continues to prioritize automation, adding tools that “help humans, not eliminate them” Herold says. HPM employees understand the need for automation to make up for a lack of personnel. They also see the value for improved quality and employee wellness.

If employees are working with big parts, near the end of a full shift when they are tired, there’s likely to be what Herold describes as a misgauge; they don’t hold the part the exact same way each time and the cut is different.

Automated systems with AI and selfcorrection features eliminate that possibility. At the same time, Herold says, “the new automated forming system took a ton of physical labor off the backs of our guys, and we love that.”

Kate Peterson

Four Questions

Holly Minne

Enterprise Minnesota’s newest board member.

How has the manufacturing culture evolved on the Range over your two decades as an executive?

The biggest factor I’ve seen within L&M Radiator is how important it is to break down silos within the company and get everybody working together and on the same page. We have analytical tools to get the information quickly on all aspects of our customer and supplier needs. I try to ensure that all teams — all departments — are working well together. We need to understand that we all impact each other. I enjoy the opportunity of working together with people and trying to conquer these challenges together. I do enjoy coming to work every day. It’s always fun, and everyone’s ready to try something different to make us better. That is what makes it rewarding.

A manufacturer’s ability to attract and retain a viable workforce challenges everybody. What lessons have you learned that might help others adapt to this new enduring reality?

Our big push this year is automation. We’ve been talking about it for a long time. We can’t hire people so we need this to fill the gap in other ways. So, what can we do to get more product out the door that doesn’t need to be done by humans 100% of the time? It’s not just robots; it’s also in the office. We are looking at pre-production and how we can serve our internal customer, which is our shop floor.

Another challenge, less discussed, is cybersecurity. L&M has very publicly acknowledged its battles on that front. What’s the lesson?

Situations like that get you to the point where you just don’t trust anything or anyone. You’re getting information, and you’re not sure immediately whether it is coming from the correct person or if it wasn’t compromised as it was coming to you. The unfortunate

thing is that you can give the tools and training to all the employees, and you can hire third-party businesses to protect you, but at the end of the day, you can still be vulnerable. If someone’s not paying attention, they click a button, and it’s game over. We’re all so busy doing two or three jobs, trying to get through the day, and accidents like that happen. Unfortunately, they are very costly.

What intrigued you about joining the board at Enterprise Minnesota?

I was looking for an opportunity to learn and grow. I seem to always be head down in my job that I don’t take the time to get involved in different groups. L&M has worked with Enterprise Minnesota for a number of years and has really helped us move forward in many areas of our business. I wanted to learn more about what they do and how I could help.

Holly Minne, chief financial officer at L&M Radiator, Inc., in Hibbing, is the most recent addition to Enterprise Minnesota’s board of directors. L&M is a global supplier of precision-engineered OEM cooling and heat transfer solutions. Its MESABI® Radiator has achieved worldwide popularity in the mining industry as an OEM and aftermarket product for mobile and heavy-duty stationary equipment. A graduate of accounting from the College of St. Scholastica, Minne has 20 years of manufacturing experience with public and privately held international companies. She has in-depth experience in financial reporting and forecasting, project leadership, cash management, financial projections, internal audit and controls, risk management, and standardized processes and procedures.

Startups

Robotic Integration

A Hibbing company hopes to help manufacturers launch and safeguard their advances in automation.

By Peter Passi

Jason Wobbema, president

As today’s tight labor market has intensified the drive for manufacturers to automate their operations, a Hibbing startup views that fast-evolving manufacturing landscape as a big market opportunity.

Jason Wobbema grew up in Eveleth but moved away to pursue a career in robotics and automation, working 23 years in the field for the likes of Andersen Windows, 3M, and Foxconn. He also helped a German company sell systems designed to keep production workers out of harm’s way.

In 2017, Wobbema returned home to the Iron Range and flew back and forth to work for years. But then, the pandemic struck, and Wobbema’s travels ceased. He rediscovered the pleasures of putting down roots and decided to launch his own local business: Advanced Machine Guarding Solutions (AMGS).

As the pandemic wore on, Wobbema set to work.

“I couldn’t travel anymore,” he recalls. “So, my nights and my weekends turned into product development. And then, I started designing all the equipment to build the product.”

Wobbema was convinced he could deliver a better product than the market offered that assembled easily without loose fasteners, could be custom-fit to the needs of his customers, wired with all the necessary safety features, and that would beat out foreign suppliers by offering a superior domestic option.

AMGS specializes in safety enclosures and other protective equipment, such as light curtains that automatically shut down machines when a worker breaks an established safety plane.

“We modify our product to be almost like a kit. We supply not only the hardguarding but also all the electronic safeties to go along with it,” Wobbema says.

Wobbema had helped another European startup in the same arena quickly grow its sales from near-zero to $3.5 million and was eager to beat that former employer at its own game.

Having worked as a robotics integrator for years, Wobbema also was well aware of the shortcomings of products already on the market.

“I continued to buy and use our competitors’ products and never was very satisfied. So, I just thought I could do better,” he says.

Wobbema adds that when it came to installing interlock systems, light curtains or customizing a system with other automatic safety shutoffs to meet a client’s needs, these manufacturers offered virtually no support. “It was always on the customer.”

“What we do differently than our competitors is we make it easy for them to put whatever electronic safeties they want on our system. So, we do the up-front design work,” he says. “We’ll do full turnkey solutions when it comes to safety.”

Historically, that’s been the hard part,” Schottmuller says.

While the pandemic gave Wobbema the breathing room he needed to launch his business, he says it also hindered it in other ways.

“There was a huge buying spree, and we couldn’t get parts, couldn’t get materials, couldn’t get anything. There was so much pent-up demand,” he recalls.

Despite delays, by August 2021, AMGS was ready to begin production. But the complications continued.

“Customers wouldn’t let us in the door to sell because of COVID. It really took another six months for that to even start to open up,” Wobbema says.

For all practical purposes, Wobbema considers 2022 his first real year of business, and AMGS rang up about $500,000 in sales.

In 2023, Wobbema hopes to push sales to around $2 million.

Longer term, Wobbema expects more dramatic growth as he gains client confidence and share in a growing market.

“This company, within five to seven years, can absolutely be a $7 million to $10 million operation, employing anywhere from 25 to 50 people,” he says.

With some help from Iron Range Resources & Rehabilitation and the Entrepreneur Fund, Wobbema says he launched his pilot manufacturing plant in a 10,000-square-foot space owned by the city of Hibbing.

Wobbema says he kept his expenses to a minimum by building his production equipment from scratch at a fraction of the normal cost. Wobbema figures he sunk about $450,000 into constructing equipment, including a robotic welder and a spot-welding machine, that would have cost more than $2 million to buy off the shelf.

That conservative approach can serve a startup well, according to Jim Schottmuller, a business development consultant with Enterprise Minnesota.

“Every dollar counts. Every single dollar you save is a dollar you can spend on something else,” he says.

“The old adage is that about 50% of new businesses fail within five years, and the number one reason is undercapitalization.

Many of AMGS’s clients fully recognize the need for safety precautions to protect workers from the dangers of automation, but others are less informed.

“We have two different types of customers. We have the guys who integrate the robots, and for the most part they get the safety. They do this stuff every day. They know what they have to do to try to make it all safe. And then, we sell to the end user, who’s the manufacturing company that might be building its own automation or might have some older equipment. We help them figure out how to make that safe and understand what the regulations require you to do,” he says.

“There’s a misconception in the world of safety that there’s some sort of grandfatherclause exception,” Wobbema says. “Some manufacturers think: ‘This machine is 50 or 70 years old, and it is what it is.’ But it doesn’t matter. You have to keep up with the latest technology and safety. It doesn’t matter if you have a one-year-old or a 100-year-old machine.”

Having worked as a robotics integrator for years, Wobbema also was well aware of the shortcomings of products already on the market.

AMGS offers manufacturers valuable expertise in the safety field, says Betsy Olivanti, community development director for the city of Hibbing.

“Automation is the wave of the future for manufacturing,” she says. “And that’s truly being driven by our workforce issues. So, in my opinion, AMGS is really on the cusp of being able to integrate automation into their facilities, along with that service and essential support around guarding those operations,” Olivanti says.

“If Jason can get his capacity to where it needs to be to service that mid-cap market, I think he’s just going to be off and running,” she says.

“The shortage of employees is forcing companies to implement automation where they can, and that will only drive demand for his product,” Schottmuller says. “I think this is not a solution for a short-term problem. This is a solution for a long-term problem.”

Schottmuller stresses businesses would be well served to heed Wobbema’s advice in regard to improving safety.

“One way or another, they’re going to learn how important safety is around their machines. And it’s better to learn that from somebody telling you it’s important than it is to learn it because someone gets injured,” Schottmuller warns.

Wobbema says, “There are three reasons a business owner invests in safety: Number one is if your insurance is going to drop you because the insurance adjuster walked through the plant and saw many problems; second is because OSHA paid a spot visit and decided to fine you $50,000 because you haven’t been keeping up with safety; or third it’s an injury or a death.”

That final scenario is likely to be the most expensive.

“Loss of life or loss of limb will usually cost a company more than $1 million,” Wobbema says, and he takes his own advice

to heart.

“Like I tell my folks, that robot is absolutely replaceable, $50,000, no problem. Your life is not. That thing could melt in its place, do not go around it. Make sure you safely lock out the machine before we even go in there,” he says.

“Machines are replaceable.”

AMGS is competing in an arena currently dominated by foreign producers of guarding systems. Wobbema estimates 80% of the market is controlled by Europe, India, and China.

He somewhat sheepishly admits to

being part of the problem, having helped a German company gain market share before striking out on his own to become a direct competitor.

Wobbema says many foreign suppliers enjoy the benefits of greater automation in their production and lower steel prices, as they can buy directly from a mill instead of buying through a distributor, as he must.

“We’re at a disadvantage using U.S. steel, but we feel it’s the right thing to do because we’re on the back door of the Iron Range. We want to support their business and continue to grow our business,” he says.

Wobbema says some manufacturers are drawn to the idea of buying an American product, too.

“Sometimes, we seem to lose track of where our dollars go. And I tell our customers: Your dollars coming to us won’t really leave the region. And our region

needs those dollars for more economic development.”

He acknowledges cost often remains the key determinant, however.

“But in today’s market, with their shipping costs, we can compete,” Wobbema says, pointing to the continued high cost of moving shipping containers overseas.

Schottmuller says AMGS should enjoy another advantage serving the North American market as a domestic producer, because it likely will offer shorter lead times.

With the start of 2023, AMGS plans to open a webstore, and Wobbema says the company’s user-friendly online presence is likely to play a key role in its future growth, with many potential customers cruising the Internet in search of safety solutions.

Wobbema says his company is quickly distinguishing itself as a provider of tailored solutions.

“Every one of these projects has something unique about it, whether that’s cutting a hole for a conveyor or whatever. It’s our ability to customize it for our customers, to withstand North American safety rules, and really provide a product that meets those standards. That’s what most foreign companies don’t do. They simply sell panels and posts. They don’t do anything else,” he says.

“We are much more of a designed solution. So, I’m designing projects for customers. We’re modifying our standard stuff to fit what they need. The other advantage is that we’ll incorporate all of the electronic safety technology,” Wobbema says. “When you buy a steel guard from us, there’s a whole other level of safety equipment that needs to get mounted to it. And we’ll help or do that for you.”

While AMGS stands ready to help customers with risk assessments and design, it does not directly install its systems, although it can connect clients with

“You have to keep up with the latest technology and safety. It doesn’t matter if you have a one-year-old or a 100-year-old machine.”

Left to right: Jason Wobbema, president; Joe Rozinka, production manager; Ryker Strong, fabrication team leader; Anna Gillane, finishing and quality team leader

contractors who will offer that service.

However, Wobbema says most manufacturers find it simple enough to handle their own installation in-house.

“This product is easy to deploy. You don’t need an engineering degree,” he says. “It’s really kind of a turn-key system.”

AMGS employs four people at present, and Wobbema says none of his hires has a college degree. He has personally trained staff up.

“We look for people who want to work and want to learn. We actually pay on the high end compared to other local businesses, because we want a $20-an-hour person to know how to run this equipment, and that skill is really something we can teach internally, which is something that’s hard for other manufacturers because they don’t have a ‘me’ working there.”

Wobbema says AMGS offers staff an opportunity to learn new skills and grow professionally.

“The old way of manufacturing 20 years ago was you hired people to stand in front of a machine, and you went from left to right. You were making widgets, and you were the robot. Nobody wants that job anymore,” he says. “So, now we need people to run two or three machines and let the robots do the work. And their job is really to maintain the equipment and the process.”

Schottmuller praises Wobbema’s efforts to train from within.

“I think the approach to pull young, unskilled folks out of high school and get them involved in manufacturing is the only successful road forward,” Schottmuller says. “If you wait for someone to get through high school and into or through college, I think their paths are probably

determined. Many living in places like the Iron Range have already decided that their ability to succeed means leaving town.”

“If you don’t get them engaged before they make that determination, I think it’s tough to change the trajectory,” Schottmuller adds.

Wobbema acknowledges his struggle to scale up production already has cost him precious opportunities to take larger orders.

“We’ve had the demand. We just didn’t have the equipment to meet that demand. And we’re passing on orders,” he says.

Another challenge, according to Wobbema, is that large companies and big system integrators ask: Are they going to survive? “When somebody inquires: ‘Who are your investors?’ And I say it’s just me, they’re not impressed,” he says.

“They’re expecting to see more venture capital to be involved. They’re expecting we’d be getting $10 million in seed money here and $15 million over there. That’s just not how it is,” Wobbema says.

“That’s always the challenge of the startup, is to kind of gauge your resources and scale your capacity to the demand,” Olivanti says.

“The Range doesn’t have the pool of equity that you’d find in Red Wing, St. Cloud or Albert Lea or some of those types of places,” she says. “They all say we’d love to invest, but we’d need you to move down here.”

“The IRRR provides grants around real estate but doesn’t put an equity injection into equipment or the other kinds of things for an entrepreneur to get started. We just don’t have that as part of our capital stack up here for entrepreneurial ventures,” Olivanti says.

Schottmuller says AMGS may be able to leverage the help of a large customer, as investors will look more favorably on a company with a demonstrably strong order book, necessitating imminent growth.

“When you stop selling, that’s when people stop buying,” he says. “Trying to get that momentum back is no fun. I hate it when people have to stop selling or say no to an order,” Schottmuller says.

At the same time, he continues, “If you say ‘yes,’ and you can’t deliver, you will never get another opportunity. It’s a risk either way.”

Wobbema agrees: “We can’t keep turning down these bigger orders and bigger contracts, because they’re not going to come back to us. We’re still working on that.”

Olivanti says she’s not done trying to help.

“I don’t care if it’s angel investors or venture capital investors or whatever, we just need to have some models to provide equity injections for manufacturing entrepreneurs up here,” she says.

For all Wobbema’s savvy, Schottmuller says he’s also smart enough to recognize what he doesn’t know.

“He has a lot of years of experience under his belt. He also is smart enough to know that it’s still important to get opinions from other folks and to rely on them to help where you’re not the expert or where you could use some additional ideas,” Schottmuller says. “He really is open to that.”

“Jason’s participation in Enterprise Minnesota’s Northeast Minnesota Peer Council has exposed him to other business leaders in the area who can help ensure he doesn’t make some of the mistakes he might otherwise make on his own,” he says.

For his part, Wobbema acknowledges coming around to accepting guidance.

“I was a little bit hesitant at first, because I wasn’t sure I understood the value proposition of Enterprise Minnesota. But it helped us connect with local manufacturers and understand their struggles, too.”

And hearing from others has been useful, he says.

“Let’s admit it. My background is in robotics and automation. There’s probably a lot I have to learn about running a business. If someone could bring some of that talent to the table, we would absolutely love it.”

Wobbema says his company is quickly distinguishing itself as a provider of tailored solutions.

Six Ways to Retain Key Employees

Manufacturers who understand key workplace trends can attract and retain top performers in today’s low unemployment economy.

By Nicole Lian

Year after year participants in Enterprise Minnesota’s State of Manufacturing® (SOM) survey rank attracting and retaining quality workers among their top concerns. The same respondents also say hiring new employees is the top driver of new growth for their companies.

Combine these two dynamics — companies need great talent to drive growth, and there is a limited pool of workers — and it makes sense that attracting and retaining high performers is ranked among the survey’s top concerns.

It also makes sense that respondents want their companies to be known for a great work environment. That’s a good sign; it means employers recognize the problems of the worker shortage, and they are focused on what to do about it.

There’s more positive news: This is a perfect moment to review workplace trends, hiring approaches and employment practices. It turns out the best strategies for attracting and retaining great employees are also great for business overall.

The first step in making the most of this moment is understanding three key human resources trends for 2023. These shifts provide the foundation for implementing six drivers of retention that are critical to keeping employees satisfied and committed to their jobs.

Reshaping workplace learning

Disengaged employees are at the highest risk for leaving, but for those who are engaged, it is precisely the opposite. It takes more than a 20% pay increase to lure employees away from a manager who is actively engaging them.

That means it is critical to help managers develop the leadership skills to engage their team members. In the wake of the “Great Resignation” — the exit of record numbers of employees after the COVID-19 pandemic — the leadership pipeline for many employers is likely to be weak.

Manufacturers might have fewer employees ready to step in as leaders, or if they are ready, those leaders might have very little manufacturing experience. Or there might be high-performing employees with excellent manufacturing skills but little leadership experience or training.

This is the time to assess those gaps: Good leaders engage employees, and engaged employees don’t leave.

Workplace learning must also include technical and essential skill development. Employees who see a clear path for skill development and career advancement are more likely to remain with an employer. On the technical side this means training to maximize the benefits of new technologies and tools. Essential skills include methods for effective communication.

Changing expectations between employees and employers

Persistent low unemployment has helped change the relationship between employees and employers. In this new landscape, employers elevate their employees and strive to serve them. In turn, these individuals feel so valued that they provide excellent service to clients and customers, which results in the achievement of organizational goals.

Employee well-being — mental, physical, and financial — lies at the heart of an employee-focused workplace. Financial health is a newer and important part of this package. Helping employees relieve stress, possibly through financial coaching or improved benefits education, allows them to bring their whole self to the organization.

The changing relationship between employees and employers has also affected employee expectations about flexibility and scheduling. A recent survey by LinkedIn showed that 14% of all job openings posted were for remote positions. But 52% of all applicants applied for those remote jobs. While few manufacturers can offer remote work, they can offer the next best thing: employee-approved shift flexibility. This might include four/tens, part-time work, or job sharing, all with full benefits. Whatever the arrangement, employees need a voice.

Creating a culture of belonging

Polling indicates that two-thirds of workers admit the pandemic dramatically shifted their priorities in life and work. In addition, research published in 2022 by management consulting firm McKinsey & Company shows 82% of employees say it

is important for the organization where they work to have a clear purpose.

A meaningful organization is one where team members feel valued for their contributions at work, are supported in their daily efforts, and encouraged in their career development. Importantly, they are proud of their employer’s mission and culture.

Employers can assess progress toward

About the Writer

Nicole Lian recently joined Enterprise Minnesota’s team of business growth consultants as a talent and leadership expert. She has more than two decades of experience in human resources, specifically in industrial and process automation, technology, and consulting. Her January manufacturing workshop, “Insights and Strategies for Employee Retention,” drew a record number of participants.

creating a culture of belonging by asking how employees feel about their work. Are their needs being met? What do they get out of their job? What does management give to their team, their career, and their life? What do they give to the organization? Do they feel like they belong?

A culture of belonging rewards teamwork, and its leaders prioritize the growth of the team. Creating this type of culture attracts employees across generations, from millennials and Gen Z workers who prioritize values and purpose to retirement-aged employees who might

decide to work longer if they feel their contributions matter.

Drivers of retention

With an understanding of these workplace trends, we can dig into the six key drivers of retention.

Recruitment and hiring

Companies aiming to improve recruiting and hiring practices should first determine their retention and turnover rates. The retention rate shows the stability of the workforce, but it does not track the departures of employees who joined and subsequently left during the period being tracked.

Finally, manufacturers must be intentional about onboarding and helping employees through the hiring process. No company can afford to show up on social media because they aren’t getting back to candidates or have a really long interview process. It’s critical to focus on the right people at the right time and move quickly.

Pay and benefits

we reviewed our benefits, specifically selfdevelopment opportunities. In this case, we looked at who was participating in a tuition payment program.

Because participants paid in advance and received reimbursement, the higher-paid employees took advantage of the benefit, but lower-wage workers didn’t. Those workers wanted to participate, but the upfront payment was a barrier for them.

Turnover measures the number of separations during that period, and if leaders dig down into reasons for those departures, they can better address underlying causes. Considering these two figures together helps companies determine future hiring needs, and also reveals weaknesses in HR practices that might lead to turnover.

To expand candidate pools, I encourage employers to target historically underrepresented groups and re-qualify what “skilled workforce” means.

Consider an underrepresented group of potential employees, such as those with disabilities. Data shows 11% of Minnesotans have a disability, and the unemployment rate for that population is much higher than the general population. This might be an excellent and productive area for targeted recruiting.

Employers can also attract additional candidates by implementing skillsbased hiring that only requires the educational credentials needed for the job. A company I am currently working with made a conscious decision to train welders. There’s no experience needed other than technical aptitude and some essential skills. When companies redefine what a skilled workforce is, and have training systems in place, they can access a greater pool of talent.

The employee benefits package is essential to attract and retain talent. The goal is to build a total reward system of pay and benefits that is clear, logical, transparent, and factored around performance. Consider employee input when constructing pay and benefits packages. Use survey data and information from benefit brokers about industry standards to find out what employees need and want. And lastly, educate, educate, educate. Let employees know what benefits are available, and walk them through how to use them. Companies and their HR departments work hard to build great benefits packages, and they should give employees the information they need to take full advantage of them.

Belonging and empowerment

Make equitable opportunity a core value. At a company I worked with in the past,

Trends for 2023

We started paying for tuition in advance, and participants agreed to stay with the company for a certain amount of time after they had received the benefit. The result? More employees who wanted to enhance their qualifications were able to access the benefit. Plus, they felt a sense of belonging and empowerment.

Companies can also enhance the feeling of belonging by adopting systems that give everyone a voice, without fear of retaliation. Enable workers to contribute to decisions about the workplace, such as how work is performed and assessed. More broadly, seek their input on the direction of the company.

Organizational culture

Studies show that a toxic culture is 10 times more likely to drive away employees than compensation. If team members feel uncomfortable within the organization, chances are good they will not stay long.

On the other hand, a healthy workplace culture can play a major role in staff development and retention. Leaders can create a positive culture by demonstrating that all workers are respected and valued. They also need to communicate how workers are contributing meaningfully to the organization.

Surveys that assess how employees feel about the culture are especially useful.

Enterprise Minnesota uses Gallup’s Engagement Hierarchy to determine how employees and managers are feeling about workplace culture and their role in it.

Job security and working conditions

Employers need to provide a safe, healthy, and accessible workplace that balances work/personal life and offers job security. They should ensure adequate staffing levels and remain vigilant about health and safety.

One area of concern is use of a contingent workforce. Temporary and contract workers should be used only to accommodate short-term needs.

With adequate staffing and predictable but flexible scheduling, companies can boost that last-but-not-least factor: safety.

Reshape Workplace Learning

to a minimum, not just for financial reasons, but also for workforce planning. There were a number of parents working there, and if we asked them to work overtime, childcare became a problem. With adequate staffing and predictable but flexible scheduling, companies can boost that last-but-not-least factor: safety. Ensuring safe work environments for employees must be a top priority.

Learning and development

A workplace with a lot of long-term temporary employees undermines the sense of job security companies need for retention.

It is also important to assess and create flexible schedules that are adequate to cover needs but also predictable. I applaud a client I worked with who kept overtime

As noted, one of the key trends of 2023 is reshaping workplace learning. Investing in employee development sends a strong message about the value of education and employee growth. A good learning and development strategy will help employees at all levels master the skills they need to do their jobs well and position them for advancement in the company.

This means creating formal policies for managers that ensure employees have development opportunities. Managers often do such a good job attending to “daily fires” that they don’t have time to acquire the skills and experience to

continue growing.

Regardless of their role in the company, it is important to use an individual approach to unlock the knowledge and talent of each employee. Also, be sure to document each of their strengths so there is a starting place and a benchmark for progress.

Even if employers aren’t having conversations about advancement, employees are considering those issues on their own, and they are likely to look outside of the organization for their next job. Without those conversations about what they want in terms of education, and work aspirations, companies will continue to experience that talent shortage because potential workers will look for an employer who nurtures their talents and lays out a path for professional growth.

The bottom line for manufacturers is that they can tackle the worker shortage. Knowing key trends in workplace dynamics and implementing initiatives surrounding the six drivers of retention can transform an employer’s efforts to attract and retain the best employees.

that provide high-quality development are

1.5x likely to have high leader engagement

2x likely to be voted best place to work

Learning toAdapt

Two leaders from Hennepin Technical College explore the enduring effects of the pandemic and the challenges of filling a growing market for manufacturing employees.

Left to right: Joy Bodin, president; Alison Leintz, academic dean

Hennepin Technical College (Hennepin Tech) was founded in 1972 when 13 public school districts formed an independent post-secondary school. Named Suburban Hennepin County Area Vocational Technical Centers-District 287, it was the first suburban college in Minnesota.

During the past five decades, Hennepin Tech has been innovative in adapting its academic programs and services as the needs of students and Minnesota’s workforce have changed. Today the college is nationally recognized for providing an affordable, high-quality education for students entering the skilled trades and high-demand careers.

Joy Bodin is the president of Hennepin Tech.

She most recently served as vice president of academic and student affairs at Central Lakes College in Brainerd and Staples. She had been serving in this capacity since 2017. Her responsibilities include providing leadership in academic affairs, student affairs, information technology, and institutional effectiveness. Her accomplishments include leading efforts to develop new technical programs and transfer pathways, leading initiatives around student success to break down barriers for all students, and promoting a culture of caring by building relationships throughout campus.

Joy previously served Hennepin Tech from 1992 to 2017 in other capacities, including director of marketing and admissions, dean of industry, interim dean of students, and most recently, academic dean.

She holds a bachelor’s degree from Metropolitan State University and a master’s degree from Capella University.

Alison Leintz has served as an academic dean for Hennepin Tech since 2017. Her responsibilities include providing leadership to 19 technical programs in the manufacturing, building/construction, and transportation industries. She supports faculty in the development of rich learning experiences that motivate students to persist and enter the workforce with the skills, knowledge, confidence, and credentials needed for a

successful and rewarding career.

Hennepin Tech welcomed Alison in 2000, and she has since served the college in both academic and student affairs. She recently led the college in writing a successful accreditation assurance argument with the Higher Learning Commission. Her work in student affairs focused on student admissions and outreach, with specialization in PSEO, dual enrollment, and international students.

different. They really connect to what we’re doing, resulting in securing great jobs.

Alison: Right out of high school I initially went to college for social work. I worked in that industry for a short time and realized it wasn’t going to give me a decent wage and health insurance benefits — I either got one or the other. I then came to Hennepin Tech and worked with students who had jobs in their industries and were making more money than me even before they graduated from Hennepin Tech. It was exciting to see that world of opportunities. At this college I found a powerful way to help people better their lives, which is why I first pursued social work. Like Joy, I’m excited to watch students who were told they weren’t college material succeed.

How did the pandemic affect your ability to deliver education?

Alison holds a master’s degree in organizational leadership from Bethel University and a bachelor’s degree in community and human services from Empire State College.

What attracted you to a career in career and technical education?

Joy: I myself struggled through high school. While I was in college, I got a job at Hennepin Technical College. And when I walked around the labs and saw people learning by doing, I thought this was where I was supposed to go to college. It was so awesome. It made me fall in love with Hennepin Tech.

Did that experience enable you to relate better to your students?

Joy: Many of our students don’t believe they can succeed in school. Whether at a different college or high school, they didn’t have a great experience. While they’re here, they realize that the learning style is

Alison: We struggled for a little while because we couldn’t have people on campus. How do you teach machining without being in front of a machine? But our faculty really stepped up, finding creative ways to convert materials for remote delivery. They used simulation software to help students visualize concepts. We were also blessed that all of our program areas were considered essential jobs, and we could reopen after only a couple of months.

But when we were able to have people back on campus, we still had to shift and restructure for social distancing and mask wearing. Having a student wear a fabric or paper mask when they’re welding is a danger. I give our faculty credit for doing everything they could to meet industry needs as well as the learning needs of our students. They found creative ways to help students still get some hands-on concepts. We had faculty members with GoPro cameras on their heads demonstrating concepts on the machine for our online learning platform. We made things as seamless as we could for students. As hard

PHOTOGRAPH BY MATT KOWALSKI

“People are very aware of the cost of an education, and that technical colleges are a really good value.”

as it was, we still delivered a high-quality education. And our students continued to want to come to campus, although some people couldn’t come back for health reasons.

How did the students react to this disruption?

Joy: Our students form close connections with the classmates they see on campus every day. They were used to working in teams, and it became harder when they couldn’t converse in person with other members of their team. I think they missed the hands-on experience. Simulation is great, but it takes away from getting your hands dirty, taking things apart, and putting them back together.

Did employers come in and cannibalize some of your students who were not in class?

Alison: 100%. Many industries flourished even when the rest of the world shut down. The demand for people went up. As a college, we are still trying to recover from that.

Joy: Some students are choosing to go to work instead of going to college. We know that they can invest in their futures by doing both. We have day programs, night programs, and late afternoon programs so students can work and go to college at the same time. The education will give them an opportunity to get promoted or find a new job. They don’t have to come back later to get the skills they need.

Alison: Industry scoops our students, giving them high wages and overtime before they complete their education. So, it becomes the job versus the career. The good job today often outweighs their longterm career goals and the opportunities they could find if they complete their education. It’s hard for students to envision the benefit of investing time and money into their education when they have this high-paying job. We’ve worked with industry partners to ensure they’re conveying that message. Many of our industry partners will reimburse tuition and have flex hours so that students can both work and complete their education.

Do higher-paying jobs in industry tempt members of your faculty?

Joy: Many of our tech faculty take a pay cut to come here. They come here because they are passionate about teaching the next generation of students. Many still work in the field during the summer or at night.

Some of our postings are up for a long time before we get a pool of applicants. The good news is that many of our graduates come back to teach after gaining industry experience. That’s one way that we attract instructors.

When recruiting students, is it still a challenge to get past the student counselors who preach that the only path to success in life is through a four-year education?

Alison: It was a problem early in our careers and continues to be a problem now. Counselors have the best intentions, they’re very busy, and they tend to speak to the world they knew, directing people to a fouryear college. We’ve worked to bring these important influencers to our campus to view the programs we teach and to do hands-on activities in those programs to get a feel for what students would be learning. The problem hasn’t gone away, but they seem open to learning about it. It just takes time.

Joy: It’s interesting when a high school student shows off what they’re working on in a technical program class. What we produce in our classrooms and labs is our best sales tool.

Plus, the economics must be compelling. Tech schools cost less, and their graduates will immediately make more money than other graduates, right?

Joy: People are very aware of the cost of an education, and that technical colleges are a really good value. Parents still want their children to have as many opportunities as they can, so we help them understand that a technical education can lead to a bachelor’s degree if that is what they choose. We’re also building partnerships with high schools that see the value of building more industry or tech classes. We’re also very thankful that our business and industry partners donate equipment. We work hard to obtain grants or alternative ways to fund new programs, get new equipment, and increase professional development opportunities for our faculty.

Do you reach out to the industry, or do they typically come to you?

Alison: We have an advisory board for every college program, which allows us to hear from industry partners. Most of our industry donations come from the

manufacturing sector. There have been many instances where industry partners have been very generous. Our automation robotics engineering program has received different types of robotic equipment so that a real-world industry environment can be replicated in our lab facilities. Several partners have donated robotic welders to help us expand our curriculum into those areas. They’ve been very generous, allowing us to expand our training in many different areas.

And it doesn’t hurt their recruiting when a piece of donated equipment has their company logo on it. It allows them to do some self-advertising at the same time, and they get a tax benefit for the donation. They also know that our system has this leveraged equipment program in place for which we get a dollar-for-dollar funding match from our system office. If we bring in an in-kind donation of $500,000, we will receive a matching $500,000 from the Minnesota State Colleges and Universities system to spend on equipment the following year. It’s a big incentive for manufacturers because they know their donation will help at that moment and will duplicate and grow in the future.

We can also set up customized training for companies that need employees to be trained on a piece of equipment we have on our site. If they’ve got a niche need, we can go to them and deliver exactly what they’re looking for.

Do you envision a time when financial constraints will mean that various Minnesota State campuses will have to specialize? Students will go to one campus for mechatronics and another for cybersecurity?

Joy: There are two answers to that. When community and technical colleges were first built, the system wanted to ensure a campus within a 50-mile radius of every student. They didn’t want students to have to travel.

“A technical school will always change. Industries are changing; equipment is changing.”

But since then, campuses have started to specialize. Central Lakes, for example, has a heavy equipment program and here we have plastics engineering, just to name a couple. Other schools offer other things. When students are interested in those specialized programs, they will be willing to travel. Our student surveys show that students look for the program first and then at how close it is to home.

Alison: There are niche specializations, but I think about us as an urban college. Many of our students need transportation. I do think working as a system is important to ensure some of the niche market workforce needs are met. We have to work together to determine where it makes sense to offer them. It’s a work in progress that will be interesting to watch.

And given all that, what do you think Hennepin Tech is going to look like in 10 years? Is it possible to predict how your campus, curriculum, and students might change?

Joy: A technical school will always change. Industries are changing; equipment is changing. There are always emerging technologies and new programs. The labs will always look different. There will be a lot more advanced training out in business and industry. Right now, we have a noncredit program in which we’ll go to a business and train current employees right at their location to meet their current needs. That will continue to grow, especially in our manufacturing areas.

Alison: One thing we can bank on is that automation will continue to increase in every area of manufacturing. We’ve got to stay on top of how that looks. We’ll continue to see automation, robots, and cobots integrated across manufacturing.

How does Hennepin Tech differentiate itself from other tech schools in smaller towns? Does that change your mission

and your ability to adapt to a different marketplace?

Joy: I don’t think it changes our mission. We are proud that we are the largest stand-alone technical college in the system.

I’m excited that our diversity on campus continues to grow. As we see new students, word of mouth gets around that any job in a high-wage, high-impact industry is really going to support their families.

Alison: Being in an urban environment definitely means our student body looks different from many other institutions and has needs that are different from many other institutions. We have greater diversity as far as race and ethnicity are concerned, and we work hard to look at our college practices and policies with an equity lens. We have support systems for people pursuing careers that are considered non-traditional by gender. For example, we try to ensure that women in manufacturing get the support they need. Our average student age is 27 right now, which is much older than most institutions.

Is it getting older?

Alison: It has actually come down. At one point, we were as old as 32. We had less focus on high school recruitment. We’ve tried to hone in on providing college in the schools, which helps students get college course completion done while they’re still in high school. This gives them exposure and pathways into the college. We’re unique in some of the ways that we talk with our faculty about culturallyrelevant pedagogy and provide things like crisis grants for students who run into issues. We have a large student body who are food insecure or who struggle with homelessness. We have about 9,000 students, so we see some of those things on a larger scale compared to other institutions. Having free food distributions and basic needs available on campus are important to us. We provide safety nets for students who run into problems balancing life and school. We make sure that we have support networks across the college to help them stay on track and continue to move forward. If they need to pause and focus on life, we have the supports in place to help them pick up where they left off when they’re ready. That’s something all colleges have a focus on, but because of our setting and our population, it’s probably a bigger focus for us than others.

Analysis SOM in Context

A panel of experts gives context to the results of the 2022 State of Manufacturing survey.

BOB KILL: We can’t start this conversation without talking about workforce and talent. There are many aspects to this, but let’s talk about retention. Abbey, that’s your specialty. How do these poll numbers match up with your experience?

ABBEY HELLICKSON: It is really important to pay attention to employees. I visited a company recently that had been

worried about the declining morale of a key employee and that he might be looking for another job. I asked, “Have you been checking in with him?” They said, “We’ve just been so busy.” So we checked in. I think that’s important. We get busy, and we keep piling work on to our “go-to’s.” We give them the new hires, ask them to work overtime, and they do it. And that’s what this person was. When they checked

in they discovered that this person had been impacted by something outside of work and needed more flexibility. They talked through things and restructured some priorities. And they’re going to retain him. I truly believe that employee retention comes from knowing where your people are at.

JANE MEYER: Attracting and retaining employees is more difficult than ever. We’ve been lucky enough to retain all

Left to right: Bob Kill, president and CEO, Enterprise Minnesota; Steve Haarstad, business growth consultant, Enterprise Minnesota; Matt Hanson, president, Hanson Silo Company; Abbey Hellickson, business growth consultant, Enterprise Minnesota; Jane Meyer, training coordinator, Windings, Inc.

but one or two of the 13 employees we’ve hired since 2021. It takes quite a while to get new employees to feel comfortable, so we put a lot of effort into a welcoming culture. New employees tell us they’ve learned more about Windings in the first couple of weeks than they knew about their previous employer over several years. They really appreciate that feeling of inclusiveness.

Kill: Roughly half of the respondents to the survey say they are involved in strategic planning and succession planning. Is that how you see it?

STEVE HAARSTAD: Part of me thinks that the survey overstates the data when 50% of respondents say they have a strategic plan. Sometimes there might be a semblance of a strategic plan in the mind of the business leader, but it’s not necessarily vetted or communicated to the rest of the organization.

Kill: What’s our message to those companies getting into planning processes?

Haarstad: I’m a firm believer that any business has to evolve through different stages. The number of employees and technical specialties that got it to this point

we look to set goals for three years. What does our organization look like today? What job functions do we have? How are people organized? How many more people will we need? And then forecast that forward. Where do we want to be in three years? How much more capacity will we need to achieve our revenue? And how many more customers? We may need an additional product line. We start to have a deliberate conversation about what we need to do organizationally and operationally to make all this a reality. You can literally map it out.

Kill: Matt, tell us how your company’s culture has changed since you took over for your dad and how you’ve worked with both Abbey and Steve.

MATT HANSON: Sometimes necessity is the actual reason behind whatever strategy you come up with. In 1981, our company had 450 employees in three plants. We were a leader in the Midwest, building a thousand silos a year. Then suddenly, high interest rates came, and the silo business went down. We had this huge overhead and had to come up with a new plan. We’re good at finding where we’re headed in each market, but putting it all together — succession planning down to the shop level — is where I’ve been challenged in the last couple of years.

Kill: So, with all the conversation about workforce challenges, how do you approach automation?

Hanson: We’ve added automation wherever it makes sense. I envy that some of the newer companies don’t have the baggage of still manufacturing on great grandpa’s home farm. We have a lot of old equipment. I sit on a peer council in Montevideo with guys who are adding a lot of automation, and I wonder how they can pay for it.

More than 400 people attended the November 2022 rollout of Enterprise Minnesota’s annual State of Manufacturing® survey at the Minneapolis Marriott Northwest in Brooklyn Park. Following the presentation of data by pollster Rob Autry, a panel of experts interpreted what some of the results mean from their perspectives. Participants included:

• Bob Kill (moderator), president and CEO, Enterprise Minnesota

• Steve Haarstad, business growth consultant, Enterprise Minnesota

• Matt Hanson, president, Hanson Silo Company in Lake Lillian

• Abbey Hellickson, business growth consultant, Enterprise Minnesota

• Jane Meyer, training coordinator, Windings, Inc., an ESOP company in New Ulm Their comments, presented here, have been edited for length and clarity. You can find complete polling results at EnterpriseMinnesota.org.

is a different mix of processes, systems, equipment, and people who will bring it to the next level. And if we want to grow to the next level, we have to figure out how to be a different company — to overcome challenges, even if it’s only about how you’re managing your people.

The first word that comes to mind is “deliberate.” When we think about the forward direction of our company, changes or investments can’t be made by accident. From a strategic planning standpoint, we want to have deliberate conversations as

Kill: Jane, I’ve toured your plant. You have a different perspective on automation.

Meyer: People are surprised that our production floor is different from your typical factory. There’s not a lot of equipment, as it’s mostly a very manual process. So ergonomics is more of a challenge than automation. We want to make sure that our production people don’t do too much of the same thing. We want to get tools that fit people’s hands and make sure they do everything correctly. The fact that we’re an ESOP company keeps our

employees very engaged. We all own a piece of the company, so the pressure’s on a small team to perform and make a profit.

Kill: While you have the podium, Jane, why don’t you talk about how Windings is trying to deal with the economic uncertainty around inflation. It was one of poll respondents’ top concerns.

Meyer: We want to view inflation as a strategic opportunity rather than a

“We’ve learned that it takes quite a while to get new employees to feel comfortable, so we put a lot of effort into a welcoming culture.”

–Jane Meyer, training coordinator, Windings, Inc.

tactical challenge. A third of our business comes from commercial aerospace. So when the pandemic was wreaking havoc around the globe, including commercial aerospace, Windings was prepared to pivot, innovate, and look at other industries for our next big opportunity. That change in focus and priority we took in 2020 allowed us to bring to market our first-ever product offering in the history of Windings. DuraCORE is a nearly indestructible electric motor that provides down hole drilling solutions for the oil and gas industry. It was pretty exciting.

Kill: Abbey, you and Steve both facilitate peer councils. How would you describe their conversations on inflation?

Hellickson: The prospect of inflation and the possibility of a recession is a good opportunity for businesses to evaluate their strategies and think about how they manage their finances. They need to be

inside of that, we have commercial and agricultural, and then we also do a lot of municipal stuff. We switched our entire pricing system so we could react faster. We eliminated paper price sheets. Everything is on Google Docs now. We’re trying to coach our customers to buy now because it will cost more later. Before, they would never believe you. They thought it was just a ploy to get more work. But the reality is we were more actively watching our financials.

Kill: I’m struck that when we talk about automation, we talk about machines and things. But we just heard about Google Docs. That’s automation.

Some of them have never dealt with bad economies.

aware of their financial position and able to read and understand all of their statements, especially their cash position going forward. They also talk about the value of knowing their customers and accounts receivable — knowing who pays and who pays on time. It’s a great opportunity to re-evaluate your business. Who are your customers? What are they thinking? Where are they? Matt, I know that you have been paying attention to this.

Hanson: We have a few different business units. We have a farm equipment distribution business, contract manufacturing, steel fabrication, and two powder coat painting lines. And then we have our precast concrete business, and

Haarstad: Everybody in the room would agree that automation helps us do more with less. And yet the survey shows that automation was way down at the bottom of the list of priorities among manufacturers. I think that’s because we generalize automation as robots, cobots, and big production machines. In reality, automation can be a lot of things, such as buying a new tool that helps ergonomics for a production worker, buying a second printer so somebody doesn’t have to walk 10 steps to get their printout, or adding a Google document that we can all access dynamically. Automation can be pervasive in helping us overcome some productivity and cost challenges.

Meyer: I can add a smaller example of automation. We recently installed a visitor kiosk in our entryway to help eliminate the paper, which will also be convenient for the visitor. The kiosk will print out a special badge related to citizenship. It will alert the host when the visitor has arrived and give the visitor a short training session on Windings’ policies that might pertain to them.

Kill: Back to inflation. Steve, you work with peer councils that consist of younger executives. How do they view inflation?

Haarstad: We’ve had conversations around inflation over the last three to four months, but the stories are a little different almost every month. One group might see that customers are starting to push their orders back, and others talk about rising costs. And then the next week, a different council will say that orders keep flooding in, and customers want products sooner and faster. And so it’s been really interesting. I will echo what Abbey was saying: Pay attention to the financials, especially the cash flow. In inflationary times we’re spending more and bulking up our inventory to manage our supply chain issues. Customers are taking longer to pay. Cash can evaporate over a few months and put us in trouble really fast.

Kill: Another topic in the poll related to companies wanting to be known for attracting new employees. Does it surprise you, Abbey, that “great work environment” came out on top?

Hellickson: The challenge for me is to define what a great work environment is so that you can strive for it and measure it. When I think about a great work environment, I notice organizations that work hard to create strong development programs, from onboarding all the way to thinking about how people can grow and continue to add value to their organization. Jane and her company have put a lot of time and effort into creating a great work environment.

Meyer: At Windings, we have a skill block program for production employees. A skill block program is pay based on skill and skill-progression and then competency in the form of an evaluation. We’ve had skill blocks for many years. Employees benefit from that because you can show them where they are, where they need

“We’ve added automation wherever it makes sense. I envy that some of the newer companies don’t have the baggage of still manufacturing on great grandpa’s home farm.”

–Matt Hanson, president, Hanson Silo Company

to be, and what they need to do to get there. Much of our work with Abbey has been figuring out how to organize all that great information and use it in a different approach to training. Abbey helped us recognize the need for tribal knowledge. We have a lot of long-term employees who don’t realize what they know until you start asking questions. Our wonderful production staff worked with the training department, and operations created standard operating procedures (SOPs) for many of our processes. And those SOPs have been utilized in the training department but not nearly as much as they should have been.

Hellickson: The reason this was easy at Windings is because of the company’s values. They value the expertise of the employees who work on the floor.

Kill: So Steve, how does strategic planning fit into all that?

Haarstad: There’s both a strategic and a tactical portion of having a great work environment. It starts with having a clear definition of who we are. Our core values define how we behave, what it’s like to work, and what it feels like to be part of the

organization.

Hellickson: When we think about this great work environment, Matt, you have started to think about how succession is bigger than just your senior leaders.

Hanson: That’s a great point. As Norwegians, we don’t want to talk about succession, and we don’t want to talk about profit and those kinds of things. But the reality is that those conversations are necessary. So when we finally got dad to sell the rest of the operating company, it

was much easier to focus on succession. We had yet to spend time looking at those folks who are really making it happen. We needed to have conversations like, “How’s it going? When do you think you’re going to maybe fish more and work less?”

Before, our strategy was, “I hope that guy doesn’t quit.” But hope is not a strategy, right? However, that’s the way we ran the company. We’re more deliberate now. We look at the role and who else can work into it. We’ve implemented skills matrices in the departments.

The last thing I’ll say is that it’s so hard to get there. I’ve been on my peer council since 2006. It’s turned over three times since then, and it’s been great every time. It’s just unbelievable what a lot of these guys have done with their business. They’ve sold businesses, started new ones, and bought other companies. I’m always asking, “How did they get there?” And it all has to do with that whole strategy, super simple concepts they wanted to stay with. And I would get frustrated that we couldn’t get there fast enough. I’ve learned not to get too frustrated because progress takes longer for an old company. Do it little by little.

“The prospect of inflation and the possibility of a recession is a good opportunity for businesses to evaluate their strategies and think about how they manage their finances.”

–Abbey Hellickson, business growth consultant, Enterprise Minnesota

Bridging the GAP

In tiny rural towns, in the heart of the Twin Cities, and sprinkled throughout the suburbs and the small cities across the state, you can almost hear the hum as Minnesota’s manufacturers produce everything from luxury saunas and high-performance cycling products to industrial springs and roasted coffee. Since the legislature established Enterprise Minnesota as a non-profit consultancy in 1987, our mission has been to help small- and medium-sized manufacturers grow profitably and provide great careers for every Minnesotan. There are plenty of manufacturing jobs out there for hire!

We pursue those goals using many tools, none more critical than the one-onone assistance provided by our business developers and consulting experts. Since 2008, the Growth Acceleration Program (GAP) has made this expertise more accessible to the manufacturers who need it most through a dollar-for-dollar matching program available to those with fewer than 250 employees.

Our consultants provide services in many areas, but the current demand is high in employee retention, continuous improvement/lean, ISO certification, and strategy/succession planning. Smaller companies benefit greatly when our experts help navigate them through these particular challenges.

Low unemployment and steady growth in manufacturing jobs mean that attracting and retaining employees challenges all manufacturers. Our advisers work with companies to assess their needs and develop strategies to help them recruit, train, and retain the best employees.

Aagard, an Alexandria engineering company that builds custom packaging and automation systems, worked with Enterprise Minnesota business growth consultant Michele Neale on employee development and retention programs. First she helped the company develop a curriculum for employees, and later she helped build the company’s successful

mentoring program, creating presentations to give new hires a sense of Aagard’s culture while improving employee engagement and retention in the process. Many companies respond to the persistent worker shortage by implementing continuous improvement or lean initiatives. Homecrest Outdoor Living in Wadena faced a COVID-related demand surge as consumers spent more time outside. Homecrest staffed up, but also knew it needed to do more with the employees already on its team. Enterprise Minnesota business developer Bill Martinson suggested they work with us to implement lean manufacturing techniques and refine welder training and operations, helping the company produce more with its existing team.

H&S Specialties, Inc is a custom plastic injection and mold building company in Glenwood. Company leaders understood that achieving ISO certification could improve their process documentation, secure their client base, and ensure the viability of the company with a proven business management system. Enterprise Minnesota ISO expert Keith Gadacz conducted a quality assessment, helped address process and documentation gaps, and communicated the process to all 12 of H&S’s employees. With Gadacz’s assistance, H&S created a business management system that was simple and easy to use, and the company passed the certification, helping it retain those 12 jobs and $1.4 million in sales. Through the process, H&S invested $85,000 and generated $30,000 in cost savings.

GAP can be a real game changer for these kinds of companies. It’s also an outstanding investment for taxpayers. Since its creation, GAP has documented returns of at least 25:1. GAP has helped more than 418 manufacturers invest $583 million in plant, equipment, technology and employee skill development, while increasing or retaining sales by $1.46 billion.

Minnesota’s manufacturers employ 325,000 workers, with employees earning an average of $76,181 annually. That’s 16% higher than the state’s average salary. And the economy-wide ripple effect is tremendous: Experts estimate that for every $1 spent in manufacturing, there is a total impact of $2.60 to the overall economy.

Maintaining manufacturing’s strength is essential to Minnesota’s future. As the legislature considers funding for GAP again this session, we hope policymakers will recognize the important role this program plays in keeping manufacturing strong, particularly in small cities where manufacturing may employ most residents, and in underserved communities throughout the state. These companies provide outstanding career opportunities for Minnesotans of ALL backgrounds.

Lynn Shelton is vice president of marketing and organizational development.

More than ever, small- and medium-sized manufacturers need access to affordable, expert guidance through the Growth Acceleration Program.

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