Enterprise Minnesota Magazine - Spring 2020 by Enterprise Minnesota

IRON UNIVERSITY

Alliant Castingsâ&#x20AC;&#x2122; innovative training program reinvests in its employees

Helping Manufacturing Enterprises Grow Profitably SPRING 2020

Where Art Meets Manufacturing Tim Quady, founder

Enterprise Minnesota 2100 Summer St. NE, Suite 150 Minneapolis, MN 55413

Blue Rhino is a design fabricator that combines creativity with innovation

9001:2015

Enterprise Minnesota

FY 2019 Manufacturing Workshops Enterprise Minnesota and Business Events

Enterprise Minnesota’s events offer outstanding professional expertise and practical business solutions to improve competitiveness opportunities forexpertise Minnesota’s Enterprise Minnesota’s and eventsgrowth offer outstanding professional and practical business solutions to improve competitiveness and growth manufacturers and related industries. opportunities for Minnesota’s manufacturers and related industries.

2020 Manufacturing Workshops TOPIC CITY 7/10/2018 Peter andStrategy Business Events St. 7/26/2018 Continuous Improvement St. Cloud DATE

DATE8/7/2018

Continuous Improvement TOPIC

Plymouth

June 25 9/6/2018

Leadership Strategy

Willmar White Bear Lake

8/23/2018

CITY

Leadership/Talent

Inver Grove Heights

9/27/2018

Leadership/Talent

Brooklyn Park

10/9/2018

Continuous Improvement

Wyoming

10/25/2018

Continuous Improvement

Shoreview ® State of Manufacturing Events 11/8/2018 Continuous Improvement Eagan

DATE11/13/2018

Strategy LOCATION

Anoka

Nov. 51/8/2019

Earle Continuous Brown Heritage Center Improvement

Brooklyn St. Cloud Center

12/6/2018 1/24/2019

Nov. 10 2/7/2019

2/19/2019 Nov. 11 3/7/2019

Nov. 19 3/27/2019 4/9/2019

CITY

Leadership/Talent

Burnsville

Leadership/Talent

Winona

Sanford Center Continuous Improvement

The Value of Peer Councils Owatonna Country Club Continuous Improvement

Minnesota State Strategy Community & Technical College Leadership/Talent

Bemidji

Willmar

Shoreview Owatonna Mankato

Detroit Lakes

North Branch Apple Valley

Dec. 34/25/2019

Continuous Improvement Blandin Foundation

Eden Prairie Grand Rapids

Dec. 86/27/2019

Monticello Community Center Leadership/Talent

Monticello Anoka

TBD

Lake Superior College

5/22/2019

Continuous Improvement

STATEWIDE ENTERPRISE MINNESOTA EVENTS

5/14/2019 TBD

2019 State of Brooklyn Center Prairie’s Edge Convention Center Manufacturing® Statewide Release

Bemidji

Duluth Earle Brown Granite FallsHeritage Center

For more information and registration, go to www.enterpriseminnesota.org, or email us at events@enterpriseminnesota.org. Sponsorship opportunities are available. Please call Chip Tangen at 651-226-6842 or email chip.tangen@enterpriseminnesota.org.

9001:2015

SPRING 2020

WHERE ART MEETS MANUFACTURING

Blue Rhino is a design fabricator that combines creativity with innovation

Blending Old Processes with Advanced Technology Herold Precision Metals thrived by embracing technological change while never forgetting that hard work and human ingenuity are its bread and butter

Steely Resolve

Iron University Alliant Castings’ Tom Renk is using an innovative training program and other concepts to reinvest in his people and lift up his company

2 Holistic Strategy Manufacturers have learned they can no longer react their way to success

Charting the Paper(less) Trail Jones Metal proudly purges paper from its manufacturing processes

Once ‘a lumber yard only with metal,’ Bemidji Steel has added precision capabilities that should attract a nationwide base of customers

Taking the Elevator to the Top For Minneapolis entrepreneur Jashan Eison, his business is personal

6 Learn and Adapt

Below the Surface

Lowell, Inc. has evolved from providing parts for hard drives to making high-precision parts for implantable medical devices

The results of our annual State of Manufacturing® survey invariably surprise us by revealing insights from beneath the obvious

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

Subscribe to The Weekly Report and Enterprise Minnesota® magazine today! Get updates on the people, companies, and trends that drive Minnesota’s manufacturing community. To subscribe, please visit enterpriseminnesota.org/subscribe. SPRING 2020 ENTERPRISE MINNESOTA /

Helping Manufacturing Enterprises Grow Profitably

Holistic Strategy

Publisher Lynn K. Shelton 9001:2015

Manufacturers have learned they can no longer react their way to success

s I write this, the effects of the Coronavirus are roiling the American economy in ways we have never experienced and taking us in directions no one can predict. I heard a financial pundit on TV rely on the old adage, “The only certainty is that nothing is certain.” I’m guessing that there are a lot of manufacturers who, like me, disagree with that statement. For years, Minnesota manufacturers have grown adept at confronting and overcoming the wave of demographic and political challenges, sometimes even transforming them into opportunities. They’re identifying, recruiting and retaining a qualified and motivated workforce, even as the number of potential employees falls into sharp decline. They’re dealing with unpredictable volatility in international markets and worldwide supply chains. They’re using technological advances to bring unprecedented levels of efficiency to their operations, but not before understanding how that equipment can benefit every aspect of their companies. In short, they know they have to plan their way to success. They’ve learned the importance of controlling factors that are within their control. They’re taking a holistic company-wide approach to managing their companies. Manufacturers want to do more to figure out where the business is going and how best to get there. We attribute this self-awareness to one of the reasons for 2

/ ENTERPRISE MINNESOTA SPRING 2020

the explosive growth in attendance at our manufacturing workshops. A sharp increase in event registrations recently forced us to relocate an event to a larger venue all the way across town. And even that new facility was barely adequate. Our consultants are contributing to this growing demand by showing manufacturers how to integrate HR policies, leadership development, lean practices, and ISO activities underneath one comprehensive strategic umbrella. Their presentation has become popular with any manufacturer who wants to learn the building blocks of business strategy or how to retool their business strategies to manage current challenges and take advantage of future growth opportunities. Another trend we’re seeing is that manufacturers realize this kind of instruction brings value to more people than just company executives or top managers. Our workshops bring value to anyone who knows basic lean concepts or has experience implementing early steps in Value Stream Mapping, 5S, and Kaizen events. The bottom line is that many manufacturers have expanded their strategic planning options to help prepare for any challenge that will come their way. And that preparation is an ongoing process. Bob Kill is president and CEO of Enterprise Minnesota.

Custom Publishing By

Creative Director Scott Buchschacher Copy Editor Catrin Wigfall Writers Sue Bruns R.C. Drews Dan Heilman Maria Surma Manka Robb Murray Photographers Pat Christman Paula Primeau Contacts To subscribe subscribe@enterpriseminnesota.org To change an address or renew ldapra@enterpriseminnesota.org For back issues ldapra@enterpriseminnesota.org For permission to copy lynn.shelton@enterpriseminnesota.org 612-455-4215 To make event reservations events@enterpriseminnesota.org 612-455-4239 For additional magazines and reprints ldapra@enterpriseminnesota.org 612-455-4202 To advertise or sponsor an event chip.tangen@enterpriseminnesota.org 612-455-4225

Enterprise Minnesota, Inc. 2100 Summer St. NE, Suite 150 Minneapolis, MN 55413 612-373-2900 ©2020 Enterprise Minnesota ISSN#1060-8281. All rights reserved. Reproduction encouraged after obtaining permission from Enterprise Minnesota magazine. Enterprise Minnesota magazine is published by Enterprise Minnesota 2100 Summer St. NE, Suite 150, Minneapolis, MN 55413 POSTMASTER: Send address changes to Enterprise Minnesota 2100 Summer St. NE, Suite 150 Minneapolis, MN 55413

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LEAD STORY

Charting the Paper(less) Trail Jones Metal proudly purges paper from its manufacturing processes

o fully understand how profoundly the paperless transformation has impacted Jones Metal, maybe it’s best to envision how things functioned in the plant before that transformation took place. Imagine this: Engineers custom design a client’s work order to exact specifications. Instructions for that design churn out of a printer and get distributed to dozens of machine operators around the shop. Each operator’s workstation, then, has a spot for a stack of papers that represents the day’s work.

But wait. The customer’s plans contained an error, and changes are needed. What do we do now? The work order has already been distributed to the plant operators. How can we pull that back and correct the work order? And what if work has already been done on it? “Two people on the inside sales team would basically launch into firefighting mode,” Jones Metal COO Toby Begnaud says of the old system. They’d spend up to an hour chas-

PHOTOGRAPHS BY PAT CHRISTMAN

Jones Metal CEO Sarah Richards, architect of her company’s new paperless culture, passes a wall display of professionally made, poster-sized exhibits that document the company’s history of innovation. The company was founded in 1942 by Mildred M. Jones as Jones Sheet Metal and Roofing, a company that provided roofing services and also supported Kato Engineering, a company owned by her husband, Cecil. By the late 1950s, Jones Metal phased out its roofing operation and focused on metal fabrication. Today, the company serves the energy industry, agriculture, heavy construction equipment manufacturers and is a second-tier supplier to the U.S. military.

ing around the plant gathering up all the copies of the work orders from brake press operators, welders, laser operators, etc.—sometimes up to 50 different work orders. They’d either pull them from the stacks entirely or, if the change was simple enough, make hand-written notations on the physical documents. “You can imagine the amount of time that it would take to dig up those orders, stop the process on the floor, bring it back in, make all the changes—again, in paper form—print it, and now it becomes history

SPRING 2020 ENTERPRISE MINNESOTA /

again,” Jones Metal President and CEO Sarah Richards says. “It’s out of date the minute it’s printed. We were essentially handcuffed with old information.” Now let’s take a look at how that problem would be handled today, in the post enterprise resource planning software (paperless) era. The customer orders a change. An employee enters the change into the computerbased work order management system. In milliseconds it is visible to operators on the shop floor, who instead of having stacks of paper now have computer screens, where they see work orders prioritized, progress tracked and changes updated … in real time. No scrambling around the plant with a Bic pen. No wasting an employee’s valuable time. No worrying about unnecessary delays. A problem that once would have eaten hours was solved in a matter of seconds, and hardly anyone needed to know or be bothered by it.

“We were essentially handcuffed with old information.” “We’re able to make changes on the fly, make changes on what we’d planned to produce—even that day,” Richards says. Someone can come in at 4 a.m. before the first shift starts and manually change the schedule in the system, and nobody’s the wiser on the floor. “It doesn’t create any chaos,” she says. “People often don’t even realize the changes are being made, so it doesn’t throw them into a chaotic mode.” Jones Metal’s transition to paperless work orders began several years ago when Richards started poking around the shop floor, asking employees along the production line one simple question: “How do you know what to do next?” “A lot of people said, ‘I don’t know until somebody tells me.’ I thought at the time that was just crazy. People should at least know what they’re going to do for a day or be able to see what they’re going to do for a day.” She discovered that workers would complete a task and then hunt around for their supervisors to get further instructions. “There was a lot of wasted time,” she says. “In a system like this, everybody seems to know what to do next.” Richards says the increased efficiencies 4

/ ENTERPRISE MINNESOTA SPRING 2020

Jones Metal engineer Eric Raddatz talks with Chief Operating Officer Toby Begnaud in front of the company’s new history wall on their way into the plant.

and cost savings on work orders easily justify the expense of transitioning Jones Metal to a paperless operation. Employees have mostly taken the transition in stride, she says, even though some old hands were initially reluctant to abandon the comfort of old habits. “They used to like to get the big stacks (of paperwork orders), so they could pick their way through and arrange their day the way they’d like,” she says. This kind of independence would confound overall processes. “We’d have stoppages because somebody chose to do something first, something that really should have been done last,” Richards says. “Now, they just move down the list.” COO Begnaud agrees: “It’s really training operators on the importance of the schedule, as your coworkers are all planning their day around that same execution.”

MORE THAN PAPER

Begnaud strolls onto the shop floor, past a wall of sheet metal neatly emblazoned with barcoding (which is part of the paperless system that makes everything highly efficient).

Stopping at an operator’s station, he demonstrates the paperless work order system. After gesturing to his right to show where the stacks of paper would have been, he mouse-clicks through a series of windows before getting to the screen that illustrates just how simple, cost-effective and efficient this system can be. “This shows the work orders that they’re doing now,” he says. He points to fields that indicate parts, origin, work-order status and other things. When changes are needed, he notes, the problem is quickly resolved. “It would just pop off the screen,” he says. These computer terminals do more than merely relay work orders. Whereas the old paperwork orders limited the images available to operators to two-dimensional and black and white, this system can show images in full color. Begnaud pulls up a 3D image of a part Jones Metal is fabricating. He manipulates the image on-screen, twists it left and right, zooms in and out. He pulls up another, this time a color version of the black-and-white image the old paperwork orders offered.

transparency. If we’re going to make a change to your world, we want to let you know. And then we usually have a time for them to train and also to voice their opinion or talk about it. Often, they’re part of an exploratory group that looks at new technology or new opportunities for us to smooth our flow. That’s what we’re always trying to do.” Richards says the cost to going paperless was substantial, but they’ve more than made up for it with greater efficiency. She says they’re able to get more done with 95 employees than they were a few years ago when they had 120. They’ve had attrition and retirements, she says, and in some cases, they’ve eliminated those positions because of the gains they’ve made in efficiency. From a strictly paper perspective—

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Again, he zooms in, magnifying the small print of specs and measurements so they can be easily read. With this tool, operators get a full, more complete picture of what the parts should look like.

ALL IN ON TRAINING

Jones Metal’s paperless transition owes at least part of its success to the time it took to train everyone in the building on how to use it. Richards says they included everyone in the process because they valued the input of the people actually doing the work. “We like to include them in the teasing phase of ‘this change might be coming,’” she says. “It’s about honesty and

actual physical paper—the transition has brought substantial savings. Jones Metal had been spending $30,000 to $50,000 annually just on paper for work orders. But the savings overall has been far greater. “If we spent a quarter-million dollars making the change to the new system, we probably got that back in two years or less in savings,” Richards says. Added Begnaud, “We pretty much have two forklift operators who can manage the entire floor on first shift. We used to use four on day shift and maybe one or two on nights. That’s a $50,000 savings for each one of those people.” —Robb Murray

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Since early 2018, Lowell has devoted all its efforts to contract manufacturing of medical device components, employing 85 people in its 51,000-square-foot facility.

‘WE’VE TRANSFORMED’

Learn and Adapt By watching market trends, Lowell, Inc. has evolved from providing parts for hard drives to making highprecision parts for implantable medical devices

t was the mid-’90s, and Lowell, Inc., a manufacturer based in Brooklyn Park, had earned a solid reputation providing parts for computer hard drive manufacturers. But it lost a major client in an uncertain market and, as a result, Lowell watched its workforce shrink from 120 to 45 employees in six months. Rick Cullen, today the company’s president, was shop supervisor at the time. He remembers layoffs every Friday. “I still look at it as the darkest days of my career at Lowell,” he recalls. “Five million dollars of business one year, gone the next.” Ron Spah, Lowell’s vice president of operations, says the loss of business forced the company to lay off some talented, valuable people. “More than the riff-raff was let go at that point.”

/ ENTERPRISE MINNESOTA SPRING 2020

“We’ve been forced to grow,” Spah continues. “We were forced to be better at programming, tool selection, processing and bringing up our expertise.”

TRANSFORMATION

Lowell was founded in 1964 by partners Dave Lilja and Lowell Thorud (the company’s namesake), but Lilja quickly bought out the business. Dave’s son, Pat Lilja, is the current owner. He describes the company’s 55-year survival as the result of its ability to learn and adapt to changing business environments. “Quality and service is what we survive upon,” he says. “Our existence is based upon change. Either you’re the best at it or you don’t make it.” When Cullen joined the company in 1984, the focus was on computer compo-

nentry, but when that business dried up, Lowell moved into serving the aerospace and defense industries, scoring major players such as General Electric, General Dynamics and Lockheed Martin and working on notable projects such as the Patriot missile system and smart bullets, capable of striking enemy combatants hidden around corners and behind cover. In 1995, the company pivoted again when defense contracts proved difficult to maintain as work shifted overseas. Lowell created its first stainless steel bone screw. Medical devices and high-precision parts for implantable tech have been its bread and butter ever since. “We’ve transformed,” Cullen says. Since early 2018, Lowell has devoted all its efforts to contract manufacturing of medical device components, employing 85 people in its 51,000-square-foot facility. Despite the evolving business landscape, Lowell is a company of innovators who embrace automation.

AUTOMATION

“With our automation format, you can do so much more per machine, and the machines are a smaller footprint,” Cullen explains during a tour of the Lowell facility. Where eight machines toiled before, now one carries the same load.

“We’ve been able to increase business and create more space,” Cullen says. Space efficiency has been useful, but automated processes have also enabled Lowell to combat a shortage of machinists and engineers. Across the factory’s manufacturing and quality control branches, robots have taken over tedious manual labor. In the quality control lab, technician Brad has worked beside his robot for over five years. After so much time together, he says the autonomous arm is just part of the scenery, but the work it does eliminates a repetitive job, reduces user error and makes life easier for the company’s machinists. And the facility is almost entirely paperless. “There’s a PDF report that gets generated, and machinists can see it right there at their machine,” Cullen says. At their machine or anywhere in the world, in fact. The robotic arm tends to a team of three coordinate-measuring machines (CMMs),

“At one time machining was about 80 percent of Lowell’s cost, now it’s probably 40 percent. One machine can generate over $300,000 a year in revenue on weekends.” capable of tolerances equal to 1/800 of a human hair. The devices ensure each of Lowell’s components—used in heart pumps and spinal braces—are up to their necessarily high standards. It’s work that Cullen says would be impossible for human hands. But transitioning to automated machines capable of swapping their own tools, adjusting processes on the fly, and performing quality control during production was a costly investment; the results took time to develop. It was the vision and trust of management that gave the go-ahead, but at Lowell there’s one man in particular credited with the robot revolution.

REVOLUTION

Jim Stertz, Lowell’s vice president of automation and technology, points to a cluster of cutting machines surrounding a robotic arm nearby. “These two machines and this robot have replaced five machines and three

people because they run 24 hours a day, seven days a week,” Stertz explains. “This is what robots are good at: waiting. People are not good at waiting. When the machine is ready, the robot’s there.” But the machines still need a human touch at times, so Stertz developed a homebrew solution to remote monitoring. Nest-brand security cameras are placed around the equipment and are remotely accessible from any part of the world with Wi-Fi, which Stertz tested from Japan last April. If a machine runs out of tolerance, technicians receive a push notification on their phones. The cameras allow internal and external views, and a smartphone app (off-the-shelf, like the cameras) gives machinists remote control of the device’s computer terminal. “No one can buy this. You’ll have to make it yourself,” he says. Lowell’s attention to detail has paid dividends. Yet, the numbers paint a clear picture. “At one time machining was about 80 percent of our cost, now it’s probably 40 percent. One machine can generate over $300,000 a year in revenue on weekends,” Stertz says. The robots also cost a pittance to operate—about 60 cents per day by his calculations, Stertz says, making any argument for human labor in a monotonous role moot. “Why should I sit there and do this all day long when a robot can do it very well? I can do something more valuable— and probably get paid more.”

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WHAT’S NEXT?

Pat Lilja’s team has perpetuated its founder’s legacy by rolling with the punches— and surviving at least one knockout blow. Lilja envisions even greater reliance on automation ahead with machines making the parts, and people providing support. But people are the key ingredient. “As an employee, you give up a lot of yourself to come to work,” Lilja observes. “I try to be as positive as possible about having a work experience that is better than your home life so people would rather be here than elsewhere, assuming you have to work.” And as for change? Lilja doesn’t fear change; he embraces it. “It’s exciting to have things change. It’s exciting to go from this level up to the next. It’s exciting to see people come up with things that you didn’t have yesterday.” —R.C. Drews

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SPRING 2020 ENTERPRISE MINNESOTA /

ISO

The Differentiator Liberty Clark finds tremendous value in its ISO certification

hile many manufacturers think of ISO 9001 certification as a means of getting new customers and differentiating themselves (which is true), the value of the certification process can impact every corner of a company. Liberty Clark, a provider of highly decorative pad and screen print sub-process services for manufacturers, OEMs and OEM suppliers, chose to get ISO 9001 certified in part because its customers were certified. By achieving this international standard, the company could demonstrate process efficiency and continuous improvement along with the ability to consistently meet customer and regula-

tory requirements. “Becoming ISO 9001 certified differentiates us from competitors,” says Brian Clark, president of Liberty Clark. “It also provides confidence to our customers that we essentially follow the same procedures and documentation.”

“EVERYTHING HAS IMPROVED” Clark chose Enterprise Minnesota to lead the certification process. The culture of Enterprise Minnesota fit well with Liberty Clark’s, and a state grant defrayed some of the cost. The ISO 9001 certification process took about a year. An Enterprise Minnesota

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consultant visited Liberty Clark biweekly to discuss requirements and help move the company through the process step by step. “It was very involved and we discovered a lot about ourselves,” Clark says. Even if the ISO 9001 never gained them a new customer (which it has), the comprehensive improvements that came about as a result of the process have been invaluable. For example, like many organizations with longtime employees, Liberty Clark’s institutional knowledge was locked away in the minds of just a few people.

Brian Clark, president of Liberty Clark, recently commemorated his company’s ISO certification with an event attended by Congressman Tom Emmer and Enterprise Minnesota President & CEO Bob Kill.

“The benefit of doing the ISO certification was that we had to document every procedure, so it put employee knowledge down on paper,” Clark says. “Now these skill sets aren’t limited to one person and it’s helped with cross training. We quickly discovered that this was going to greatly improve our processes.” ISO 9001 also gave Liberty Clark a roadmap for documenting improvement ideas, which has shifted approaches to problem-solving. For instance, documentation attached to each work order measures time and productivity, as well as problems encountered. In the past, the documentation was merely a list of problems and reasons why production wasn’t met. ISO 9001 taught Liberty Clark how to turn that documentation into a learning tool. “When employees encounter issues during the production run, they have to document what they did to solve the problem,” Clark says. “Then we can take that information and update work instructions for future runs. It’s a way to think differently because it focuses on problem-solving.”

IT’S THE JOURNEY, NOT THE DESTINATION

While earning ISO 9001 is important for attracting new customers, the journey of it also prepared Liberty Clark for new opportunities. When a new customer of an OEM supplier wanted to know more about Liberty Clark’s operations, he or she sent an auditor to assess the company and its capabilities. “That internal audit was very similar to the ISO certification audit—maybe even more in-depth!” Clark says. “If we hadn’t gone through the ISO process, we wouldn’t have had any idea what this auditor was talking about or the documentation he or she requested. But because we had the certification, we were prepared for it, and that ultimately led to us getting the work. I’m very confident that if we didn’t have the certification, which included the internal audit, that wouldn’t have happened.” —Maria Surma Manka

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VESSA

Garbage In, Garbage Out The importance of optimization before automation

sk any company officials or managers if they want to automate their processes and most would answer with a resounding “Yes!” The thought of automation conjures up ideas of efficiency, value and speed that boost the production of a manufacturer and the value it delivers to customers. But automating something doesn’t magically make it better. If the process itself is broken or isn’t optimized, automating it will not deliver the benefits a company would expect. Manufacturing companies are best positioned to take

/ ENTERPRISE MINNESOTA SPRING 2020

advantage of automation when their processes are already highly optimized. Seitz Stainless, an Avon-based manufacturing company that specializes in sanitary stainless steel fabrication, is working to examine and optimize critical processes before its new ERP (enterprise resource planning) system investment goes live. The company chose to implement an ERP to standardize the quoting, designing and fabricating of its products, as well as support its workforce and growth goals. “To automate the flow of information throughout the plant, we first

needed to evaluate our current processes and improve them before applying automation,” says Jeff Haviland, president of Seitz. Enterprise Minnesota is using VESSA to help Seitz position itself to take full advantage of automation’s efficiencies and grow profitably.

MEET VESSA

VESSA is a process that guides companies through closely examining their operations and determining what needs to be improved, eliminated, simplified or standardized before automation is applied. Companies that follow this process see more efficient operations in the short term and are better positioned to reap the benefits of automation in the long term. Only with the right preparation can an investment in automation grow employees’ skills and improve productivity. Working through a complete and ob-

The VESSA System Value Streams – Look to the future and compare it to the current

processes. What steps in the processes do not contribute value to the desired outcome? How can the company better ensure that the customers will get exactly what they want and that it will be delivered when they want it?

Eliminating Waste – How can those non-value added steps that have been identified be eliminated? Examining the different types of waste is a starting point. VESSA lists “8 Deadly Wastes”: 1) defect, 2) overproduction, 3) waiting, 4) non-utilizing people, 5) transportation, 6) inventory, 7) motion, and 8) excess processing. When guided through these steps by a consultant, companies can identify what kinds of wastes are creating the most significant problems or lags in constructive production. A close examination of processes is essential. Mapping out the processes can help a team recognize where the greatest needs are. Information from employees who work directly with areas of unproductive or imperfect results can often lead to ways to improve a process or method or to standardize procedures so that everyone involved is familiar with the ways things should operate.

Simplify – By identifying and listing all of the steps within a

process, the team can discover where there is duplication of effort, where unnecessary steps or details have become a normal part of the process, and what can be done to simplify the process to make things run more smoothly. Oftentimes, as businesses expand and shops are reconfigured, little thought is given to the most efficient use of space. How many steps are required for a worker to move from his workstation to where a tool or part is housed? Can the layout be redesigned to eliminate wasted time spent moving about to complete one part of a process? What other means can be applied to make each part of a process as efficient as possible?

VESSA can help a company recognize where time, space, energy and materials are being wasted and where processes can be simplified, improved and standardized. jective self-examination with an outside consultant—someone not intimately connected to the organization—can help an organization discover what it is doing that is working well and not so well. What are the methods and processes used every day that are efficient and effective enough to optimize production? Where are time, materials and energy being used

Standardize – Observations and studies of the most effective and efficient procedures have led to compilations of “best practices” from which all organizations can learn and which they can then adopt as part of their own best practice standards. Consistency is key. If different workers have different methods of completing a step or task, a self-examination can compare the methods and determine how to standardize the procedure for consistently high-quality results. The goal of standardizing is to continually assess the most effective and successful methods to perform tasks and to strive to meet the standards consistently. Automate – Many people-driven processes can be done more effectively, efficiently

and consistently by machines; however, machines can only do what they are programmed to do. If there is waste in a people-driven process and the process goes unexamined and is not corrected or improved, the investment in automation may not solve the problem. With a close examination of processes, with the establishment of best practice standards, with ongoing self-assessment and a commitment to continuous improvement, an organization can strive toward optimal performance and productivity. At that point, automation can maintain the high standards set and can consistently produce high-quality products. Ongoing self-assessment is essential for a dynamic company. Once the best practices become the gold standard for an organization, the next step is to find even better practices. Small changes and improvements can continue to be implemented, and the bar that has been set continues to rise.

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efficiently, and where is there waste? What steps can be eliminated, simplified, or streamlined? What procedures can be put in place for better recordkeeping and data collecting? In every manufacturing situation, there are best practices that have proven to be effective and that a company can apply to its own particular needs and processes to make production flow more smoothly. But unless a company takes the time to examine its “business as usual” and looks hard to find the areas that fall short, it will never reach optimum production. VESSA can assist the process and help a company recognize where time, space, energy and materials are being wasted and where processes can be simplified, improved and standardized.

ROADMAP POSITIONS SEITZ FOR STATE GRANT

“As part of the VESSA process, we worked with Enterprise Minnesota on a value-stream office mapping project to get the non-value added processes out of the system prior to collecting and loading the data into the ERP system,” Haviland says. This ensured Seitz avoided putting poor-quality data into the ERP system, which would only result in bad outputs—the commonly

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“Seitz is really thinking about its long-term strategy, and that starts with understanding the processes and what can be improved.” called “garbage in/garbage out” trap. “Seitz is really thinking about its long-term strategy, and that starts with understanding the processes and what can be improved,” says Minnesota Business Development Consultant Dawn Loberg. “The value-stream mapping drives out the non-value add so that you only automate efficient processes, not outdated ones.” The value-stream mapping encompassed both the front office and order flow. Employees evaluated the steps of each critical process and created an improvement plan to reduce cost,

improve lead-times and quality, and increase capacity. Although results vary by company, typical outcomes of the value-stream mapping process include a lead-time reduction of 50 percent, a capacity increase of 15-25 percent because of reduced staff time, and improvements in employee knowledge of project management. Improving key processes may also create opportunities for higher sales margins and volumes due to the ability to respond faster and more effectively to customer requirements. The improvements made as a result of the VESSA process and value-stream

Typical outcomes of the value-stream mapping process include a lead-time reduction of 50 percent. mapping positioned Seitz to apply for an Automation Training Incentive Pilot Program grant from the Minnesota Department of Employment and Economic Development (DEED). The grant helped cover the cost of working with Enterprise Minnesota. “The VESSA process enabled Seitz to get the DEED automation grant because it demonstrated a clear roadmap of how the company was going to prepare for and maximize its automation investment, as well as how the investment supported company growth and the local workforce,” Loberg says. Seitz also partnered with Enterprise Minnesota on continuous improvement training for process flows. Once the ERP is implemented and live, Enterprise Minnesota will conduct a Kaizen event to ensure flow efficiencies are maximized as planned. “We expect to see good results from the VESSA process and ERP implementation,” Haviland says. “Office productivity will improve, as will purchasing efficiency and inventory management. We also anticipate that faster setups, faster changeovers, and minimal wait time will make the work more productive for our employees and deliver better service to our customers.” —Maria Surma Manka & Sue Bruns

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Darryl Michaelson is satisfied with his growth from basement builder to business survivor, but he’s looking to take things a step further this year.

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arryl Michaelson builds cat furniture, and in his 29 years in business, he’s gotten pretty good at it. Michaelson, president of St. Paul-based Purrniture Cat Furniture, Inc., is living proof that a little bit of gumption can be the difference between success and failure. Thirty years ago, Michaelson went out to purchase some furniture for his cats. What he found was disappointing. He wanted an ergonomic jungle gym for cats to “expel energy onto,” something sturdily made. But what he got was cheap and ill-conceived. So he decided to make his own. With scavenged wood, he built a crude prototype climbing tower. The cats seemed happy, but Michaelson wanted to take the design a step further. That’s when he ran across a 20-foot-tall pile of electrical wire spools to serve as platforms and perches. He crammed as

many as would fit into the back of his Honda Civic and drove off. “All I saw was gold,” he recalls. Michaelson—who managed a Domino’s Pizza at the time—created flyers and stuck them up in every veterinary clinic that would allow them. Then he found premium ad space. In July of ’91, the State Fair authorities told him there was space for him on the fairgrounds—if he had a proper business. In a handful of weeks, Michaelson officially established Purrniture (the name suggested by his sister). His State Fair booth won over customers, but his in-home manufacturing space limited potential sales. “To go look at cat furniture at a guy’s house, it’s not going to happen,” he says. With a little patience and hard work, Purrniture worked up to its location on University Avenue in the Midway district of St. Paul.

PHOTOGRAPHS BY PAULA PRIMEAU

RECESSION AND REBIRTH

Things were looking well, and Michaelson envisioned major growth. In 2009, however, a national recession caught him unprepared. After that year’s State Fair, sales tanked almost completely. “Who’s buying cat furniture when your car’s getting repossessed?” he says. Not many people, it seems. He fell $28,000 behind on rent and arranged with his sole employee to work on a “pay-as-I-can” basis. Michaelson grabbed a full-time job driving courier truck—putting 75,000 miles a year on his leased 22-foot truck and sometimes working 36-hour shifts to get by. He admits he should have been evicted, but his landlord stuck with him. It took four years to rebuild, but Purrniture has grown ever since. Michaelson says the whole experience taught him to prepare for rainy days, the value of budgeting, and that he could work twice as hard as he thought he could. Piles of raw materials turned into finished product, with the showroom stacked floor-to-ceiling. His sales soared, and customers were thrilled with the increased selection. Michaelson is satisfied with his growth from basement builder to business survivor, but he’s looking to take things a step further this year. He doesn’t plan on slowing down anytime soon. —R.C. Drews

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Mark Haveman’s presentation was part of a morninglong program sponsored by Enterprise Minnesota. In another presentation titled, “Five Solutions for Growing Profitably,” Business Growth Consultants Abbey Hellickson, Steve Haarstad and Greg Langfield described how Enterprise Minnesota is taking a holistic approach to integrating a company’s strategic planning process.

THE EXECUTIVE MANUFACTURING FORUM

Off the Radar Prominent economist tells manufacturers that reforming the state’s pension and civil service systems is critical to future prosperity

innesota’s manufacturers are well aware of how taxes, regulations, the worker shortage, and the costs of health care can impair their ability to create jobs and help sustain their local communities. Economist Mark Haveman, executive director of the Minnesota Center for Fiscal Excellence, thinks they will soon add two more issues to that list: the state’s massive unfunded pension liability and the urgent need for civil service reform. Haveman delivered the speech, “Heaven or Hell: Will the Real Minnesota Business Climate Please Stand Up” at Enterprise Minnesota’s Executive Manufacturing Forum on Feb. 11 at the Minneapolis Marriott West. He explained why some concerns about the business climate might be overstated. But others aren’t even discussed. The looming pension crisis is inadequately reported, Haveman stated. The

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state’s current unfunded pension obligation today is $15.2 billion, which is $3 billion more than all of the other state’s liabilities combined. And that’s after the market’s remarkable climb over the past decade. “Which tells you, once you get into a hole, it is difficult to invest your way out. We have to take on more substantive reform than what is talked about right now.” Haveman called the state’s system of human capital design “anachronistic.” “We are reliant on designs and systems that made sense in industrial unionism of the 1930s and ’40s,” he said, which “creates all sorts of challenges and difficulties to retain and attract the talent that we need in the state. We try to put Band-Aids on it without addressing the root causes of these sorts of things.” He said letting this system continue has extraordinary implications for the accountability of government. “I can’t

prove it, but I guarantee you that these issues have woven their way into the MNLARS debacle, the DHS debacle, all those sorts of things. Civil service reform is a critical issue for the state going forward, and we hear nothing about it. We need to tackle this. It requires leadership; it requires someone willing to take on and invest his or her political capital in changing these sorts of things. But its time is now.”

Haveman’s presentation was part of a morning-long program. In another presentation titled, “Five Solutions for Growing Profitably,” Business Growth Consultants Abbey Hellickson, Steve Haarstad and Greg Langfield described how Enterprise Minnesota is taking a holistic approach to integrating a company’s strategic planning process. The event proved so popular it had to be scheduled for a larger venue. Lynn Shelton, vice president at Enterprise Minnesota, attributes this to two factors. First, she says, successful manufacturers realize like never before that past performance is no guarantee of future success. “Politics, demographics, and technological advances are forcing the manufacturing marketplace to evolve in new and different ways— at a rapid rate. Manufacturers can no longer merely react. They have to plan their moves with strategic planning that thoughtfully integrates every aspect of their operations from product development to sales to the efficiencies of their plant floors.” Second, she adds, programs such as this Executive Manufacturing Forum represent an excellent introduction to the roadmap they might need to get there. “And this really was an excellent program to hear about future business trends, potential pathways to grow your company, and possible solutions to navigate workforce challenges.”

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Four Questions

INNOVATIONS

Mike Seymour, president, Alexandria Technical and Community College

hat attracted you to Alexandria Technical and Community College? I wasn’t looking for a presidency, I was looking for the right fit. This college, with its legacy in technical education and its comprehensive mission, was just a really good fit. Plus, I’m a communityminded person, and having a standalone comprehensive college allows a president to invest heavily in the community. Some of the presidents today have multiple campuses in multiple communities, and they can get spread really thin; they can’t always give any one community as much of their time as they would like to. All of that made Alexandria attractive to me. How did you describe your vision as a college president during your interviews? Applying for these presidential positions is somewhat like running a political campaign. You come in with a platform based on your personal history and how the college has described its needs. My platform pretty much resembles how I grew up and where I’m from. I grew up in a trades family in the Upper Peninsula of Michigan. My dad and my dad’s brothers were carpenters, tinsmiths, and millwrights. We’re straight shooters up there. And I’m also an insider in Minnesota higher ed. I started my career at a technical college. I worked my way up through the ranks: from faculty to manager to a dean, and then to a vice president and now to a president. I guess I’ve touched all the bases. But my platform was also that I’m not a status quo person. Higher ed has gotten very competitive; we need to keep our institutions viable by innovating and by being more entrepreneurial. Manufacturers all across Minnesota express concerns about the shortage of potential employees. How important is your role as an educator and a community leader to help manufacturers address their concerns about

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the shortage? One of our roles is to help ensure the vitality of the community in terms of its workforce. We’re part of an ecosystem that starts with changing perceptions about manufacturingtype work in high schools, or even as low as middle school. We need to con-

vince parents and students that a two-year college education is a good bet economically, and that going to your local twoyear college and learning a skill will pay dividends in the long haul. We also need to work with local employers to help create opportunities that will hold those students in our community once they graduate. All

Mike Seymour

In April 2019, Mike Seymour was named president of Alexandria Technical and Community College, a school with more than 4,000 students. Prior to Alexandria, he served as vice president of academic and student affairs at Lake Superior College in Duluth, where he led the college’s academic, enrollment, athletics, student service and workforce initiatives. His resume includes senior-level experience at the University of MinnesotaDuluth and Anoka-Ramsey Community College. He has teaching experiences at St. Cloud State and Ferris State universities and as a faculty member at Riverland Community and Technical College. He serves as a peer reviewer for the Higher Learning Commission. Seymour earned an undergraduate degree in television production and a master’s degree in career and technical education- human resources. He has a graduate certificate in management information systems and completed an educational doctoral program at the University of South Dakota.

of this is to create a very positive image of the town, the college, and the community’s educational system to attract new families and new businesses. It’s all integrated, and no entity can work in isolation. Community support is deep on multiple fronts in Alexandria, but it seems like the local manufacturers are really supportive of the college and the manufacturing programs. They look to capture our graduates at every turn. I think community leaders are seeing the sincerity about the way we’re trying to come up with innovative ways of attracting more people to our manufacturing programs. For example, we’re leveraging the workforce scholarships that were provided by the Legislature. Our local manufacturers have matched those scholarships, and we have bundled them with summer paid internships. It gives local businesses the opportunity to get some of this talent in their door early, which provides a higher potential of retaining those students after they graduate. We try to figure out how to implement any new strategy that has potential, and then measure whether or not it’s a successful endeavor. And if it is, we build on it. If it isn’t, we redirect. Higher ed is changing. College presidents have to deal with more and more pressures that are outside of their control. What’s your level of optimism about the prospects for success in higher ed? I don’t think there is a one-size-fits-all answer. The fortunes of each school are based on a number of varying factors, community support being one of them. Some colleges have to deal with some legacy programming—it’s a little harder to be competitive if the industries are changing and you’re not able to reallocate from existing programs to create new ones. And then location is part of that mix. It’s much easier to draw to Alexandria than maybe some other parts of the state. And I think the challenge isn’t just at each college, but it’s at the system level, too. The idea is for the system to keep access points for all Minnesotans, based on the priorities of the Legislature and the governor. In the end, I really like our chances. I’m optimistic about our future.

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Cover Story

WHERE ART MEETS MANUFACTURING Blue Rhino is a design fabricator that combines creativity with innovation

lue Rhino Studio holds a unique niche in Minnesota manufacturing, and it all started in the garage of co-founder and sole owner Tim Quady. The studio does interpretive design and artistic fabrication for museums, visitor centers, and zoological environments all over the world. Since its founding in 1999, the company has earned a reputation for artistic quality and value in the business of creating realistic, interactive exhibits that represent the natural and animal kingdoms. Quady’s first project at Blue Rhino was to manufacture a replica of the Split Rock Lighthouse for a bar at the Minneapolis/St. Paul Airport. Quady built it in his garage. Not long after, Quady and co-founder Dave Leak leased an inexpensive 6,200-square-foot space in Bloomington. From there, they worked on projects for mini-golf courses, water parks, restaurants, movie theaters, and the old Camp Snoopy amusement park in the Mall of America. The company experienced early success, partly due to Quady’s work in the fabrication business since college. He worked for Newton, Iowa-based Deaton Museum Services during and for several years after earning his bachelor’s degree in fine arts from Gustavus Adolphus College. “I loved everything about that job—I loved the company and the guy who owned it,” he says. At the time, Deaton was owned by trade show company Display Masters, which was starting into the museum services business. They moved the company to New Hope, and Quady moved with them. “I started at Deaton by unloading trucks and

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cleaning out the warehouse, just being a 19-yearold moron doing anything they asked,” he says. Quady then began doing artwork and fabrication. But when Display Masters got purchased by Exhibitgroup/ Working from a Giltspur, an international trade 16,750-square-foot show company, the operation shifted to Chicago, and the orgafacility in Eagan, a nization lost the small-company full-time corps of elite intimacy that Quady had loved. artists and craftspeople Quady put his skills to work elsewhere by picking up numerous manufacture two- and freelance painting jobs, which included three-dimensional the then-popular distressed interior look. “Everyone wanted their living room exhibits that include walls to look like cracked plaster,” he says. dioramas, sculpture, “Or they wanted their restaurant to look like old Italy.” mural, carpentry, After painting fulltime for about a year, Quady and metalwork. began exploring starting his own company. “I was 28, I was starting a family, and I realized the kind of work I did at Deaton was what I wanted to do for the rest of my life,” he says. “Just not necessarily for a gigantic international company.” Alongside Quady was Jim Burt, a University of

By Dan Heilman

“Their ability to capture the essence of our vision for the Eocene diorama’s prehistoric creatures, plants and atmosphere was uncanny,” says Jim Melli, the museum’s exhibits designer. “The quality of their work is second to none. The sculptures of animals are the best there are.”

Tim Quady, founder

PHOTOGRAPHS BY PAULA PRIMEAU

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The projects are complicated and time-consuming and range in budget from about $10,000 to $2 million. The company is about the size Tim Quady wants it to be, so growth beyond the Eagan studio is unlikely.

Wisconsin-River Falls art student who came on board as an assistant for Blue Rhino and remains the company’s lead sculptor to this day. He began at Blue Rhino by creating the company’s first big-time museum dioramas for the Science Museum of Minnesota, depicting the Wannagan Creek paleontological site. Working from a 16,750-square-foot facility in Eagan, a full-time corps of elite artists and craftspeople manufacture twoand three-dimensional exhibits that include dioramas, sculpture, mural, carpentry, and metalwork. From a 10-foot grizzly to a woolly mammoth and an aviary environment, the small staff of sculptors and craftspeople, both on-site and freelance, can do it all. Blue Rhino rarely repeats work, and it will never create a knock-off of a previous project for less money. Their creations not only need to be authentic, but they also must be easily disassembled, packed up, and shipped. Blue Rhino’s client list includes casinos, hospitals, and the Mall of America on up to the San Diego Zoo and the American Museum of Natural History in New York City. Blue Rhino employs no sales staff; all their work comes via word of mouth. “You can tell that it’s a very entrepreneurial, very artistic company,” says Enterprise Minnesota President and CEO Bob Kill. “They’re focused on handmade, high-end products. When you compare a machinemade animal replica to a handmade one, Blue Rhino is much more on the artistic side of that business. Why is handmade jewelry expensive? Because it’s handmade.” Quady has remained immersed in this business his entire adult life, giving him a keen understanding of the work and clien22

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tele, and who has the chops to do that work. “When I started, I said, ‘I’ll do it myself. How hard can it be?’” he says. “When you start a company, the two things you need are an absolutely unfounded sense of optimism and a completely naïve mindset.” “But through the companies I’d worked with and for,” he continues, “I had a good group of people to surround myself with.” That prestigious list of clients comes with a lot of repeat business and a lot of accolades. The San Diego Natural History Museum was impressed when Blue Rhino created a full-size pterosaur, a baby mastodon, and an American lion. “Their ability to capture the essence of our vision for the Eocene diorama’s prehistoric creatures, plants and atmosphere was uncanny,” says Jim Melli, the museum’s exhibits designer. “The quality of their work is second to none. The sculptures of animals are the best there are.” A fearsome, eight-foot grizzly is typical of the studio’s attention to detail. The bear’s fur is brown and a bit matted; his yellowed teeth are in full snarl; his right paw is set to dispatch razor-sharp claws. There’s even a dribble of drool hanging from his mouth. One has to look twice before resisting the urge to flee. That level of quality probably requires the latest CAD software, custom-made machinery and all manner of sophisticated equipment, right? Hardly. “Let’s see,” Quady says, as he ponders his operation. “We have a scissor lift, a forklift, and a table saw. Everything else is hand tools. Ninety-five percent of what gets fabricated here is made from steel, plywood, foam, fiber, epoxy, and latex paint. “Most of the work goes toward planning,

designing and fabricating, and we have the people with the vision and skills to do that. The equipment is next to nothing. If this place blew away in a tornado, we could pretty much go to Home Depot the next day and get everything we need. It’s all the artistry of the people.” The number of projects Blue Rhino takes on in a year depends on the scale and complexity of what it is handed. To underscore the exclusivity of the studio’s work, it used to take on about 30 projects a year; now it’s closer to six. The projects are complicated and timeconsuming and range in budget from about $10,000 to $2 million. The company is about the size Quady wants it to be, so growth beyond the Eagan studio is unlikely. “We used to do mini-golf courses and water parks,” Quady says. “Now we can be a little choosier. What we do is artwork for education’s sake. That narrows it down to natural history museums, science museums, nature centers. The focus continues to tighten. That’s the passion that drives everybody here.” Enterprise Minnesota’s Kill says Blue Rhino is a significant example of a manufacturing company whose focus is innovation and artistry. “They’re manufacturing what I would call very high-end, high-quality objects for studios, museums, and nature centers all over the world,” he says. While the Blue Rhino team is invaluable, the company depends on client sources to make sure that what they produce is as authentic as possible. The company works with paleontologists and museum experts who interpret specific anthropological elements for the company’s sculptors. That’s a huge factor in the company’s work. After all, if the

Blue Rhino’s client list includes casinos, hospitals, and the Mall of America on up to the San Diego Zoo and the American Museum of Natural History in New York City. Blue Rhino employs no sales staff; all their work comes via word of mouth. environment of a diorama isn’t correct, the entire project could fail. At a recent holiday party, Quady and Burt took a moment to gaze at Blue Rhino’s massive studio and think about how time had passed. As the boss, Quady doesn’t spend much time in the studio these days, so pausing to look around was a revelation. “We were talking about what we’d done and what we have coming up,” Quady says. “I said to Jim, ‘Did you think we would ever grow up to do this? We thought we had peaked 10 years ago.’” As for the future, Quady wouldn’t mind staying on the same path and keeping up the same rate of momentum. In fact, it would be fine with him if in 2030 Blue Rhino was doing the same type of work for the same kinds of clients. But at the same time, he continues, it wouldn’t be bad to be able to say, “Did you think we would be here back in 2020?” “We’re always on the lookout for the next, different, challenging thing. The scope and scale change dramatically. But there’s still a lot of similarity—it all relies on specific, talented people.”

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A â&#x20AC;&#x2DC;Resounding Successâ&#x20AC;&#x2122;

Tim Herold, president and CEO

Blending Old Processes with Advanced Technology Herold Precision Metals thrived by embracing technological change while never forgetting that hard work and human ingenuity are its bread and butter

By Robb Murray 24

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ike any young boys, the Herold brothers Tim and Pat looked up to their dad. He owned a sheet metal business, and as soon as they were old enough to pull the starter cord, you could find them pushing a lawn mower around the grounds of Hansman Industries. When they grew a little older, you could find them working in the company’s shipping department. And eventually, the brothers earned college degrees and put those degrees to work at their father’s company. “The plan was to purchase the company from dad,” Tim Herold says. “But, he received an offer he couldn’t pass up.” Before his sons could take over the company, the company was bought by someone else. The brothers stayed on, though, and tried to make the best of it. They tried to hold firm to the ideals of customer service and quality workmanship instilled in them by their father. But there came a point, they say, when they knew a change was coming. Customers they’d worked with for years wondered why the traditions and practices established by the senior Herold were, in their minds, falling by the wayside. And some suggested that the brothers should

HPM designs and manufactures precision metal parts and assemblies. break off and start up their own business. So, sitting around a card table in a garage, the brothers started working on doing just that. That meeting led to more meetings, which led to research, which led to strategic planning. And eventually, they found themselves sitting in a bank trying to convince a lender to take a chance on them. During that bank presentation, though, a funny thing happened. The banker stopped the conversation midway and said, “We’ve heard enough. How much do you need?” Designs were drafted. Ground was broken. And not long after that garage card PHOTOGRAPHS BY PAULA PRIMEAU

One of Minnesota’s leading sheet metal fabrication companies has survived and thrived by embracing technological changes while never forgetting that hard work and human ingenuity are its true bread and butter.

table meeting, a dream came true: Herold Precision Metals was born in 1997. Today, after a handful of expansions and after having weathered the recession of 20082009, HPM is a shining example of a sheet metal manufacturing company that nurtures employees, values innovation and keeps adapting to meet the needs of an everevolving customer base.

Outgrowing the space

When the brothers went to that meeting at the bank, they did so with the kind of potential support most start-ups could only dream of. Because of the tradition of quality and customer service established by their father, two dozen companies submitted letters of support for the new venture. When the company ramped up production in 1998, Herold Precision Metals was a beehive of activity. It had been renting space with another company but was getting very busy very quickly. When that other building tenant announced it was

leaving, HPM took over the entire space. But it didn’t take long for that space to be inadequate as well. So, the brothers opted to build a new facility. “I helped design it,” Pat Herold says. “It was my baby.” The new building, which opened in 1999, included 40,000 square feet of manufacturing space and 5,600 square feet of office space. In 2004, the brothers added another 30,000 square feet of manufacturing space, and another 16,000 in 2007. Today the campus’s buildings total roughly 110,000 square feet of space. The company employs about 100 workers. HPM designs and manufactures precision metal parts and assemblies. It serves original equipment manufacturers, telecommunications companies, the gaming and entertainment industries, and more. If you’ve hit the gym recently, there’s a good chance the weight machine you did your sets and reps on has a “skin” that was designed and manufactured by HPM. (The SPRING 2020 ENTERPRISE MINNESOTA /

“skin” is that protective casing that keeps your fingers from getting crushed by the machine’s moving parts.) The company has designed parts for self-service machines, including ATMs and lottery ticket and vending machines. It has also done design and manufacturing for security and surveillance equipment, heating ventilation and air conditioning, printing equipment and myriad other applications. “Under the hood,” so to speak, the facility is outfitted with a litany of top-end sheet metal manufacturing equipment. The equipment Herold Precision Metals has on its 110,000-square-foot site includes:

● Six laser cutting machines—three small

platform models for prototypes and short run, and three FMS systems that operate 24 hours a day, seven days a week, all year. Two of those FMS systems are state-of-the-art 8000KW fiber laser cutting systems.

● Seven turret punch presses that do

mechanical and hydraulic forming and tapping. While lasers have become extremely popular in the manufacturing industry, a turret punch press allows one to add third-dimension manufacturing features such as embossing, lancing, card guide work and forming within the process as well. The more that can be done within one machine, the better the quality and consistency. And it costs less.

● Twenty-four press brakes used for bend-

ing the forms produced by lasering and punching. Lengths vary from 14-foot beds to 4-foot beds. Two of HPM’s press brakes are so-called auto tool changers. Like a laser or a turret, programs

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are downloaded into the machine. Each machine has its own dedicated tooling inventory and the machines set themselves up. In a world where skilled labor is hard to find, Tim Herold says these machines are game changers. “Our auto tool changers are producing four times the production seen in a conventional machine on average every day. We have the data to prove it.”

● Twelve hardware installation systems,

including three portable machines on rolling cabinets that increase efficiency by their ability to be used in any department. “If we have a part that has four bends and two pieces of hardware, we may roll a portable hardware machine over to the brake press and do both operations with just one set of hands. Fewer touches equals increased efficiency,” Tim says.

● A 25,000-square-foot dedicated me-

chanical and light electrical assembly environment.

But the best piece of equipment has nothing to do with lasers or brake presses.

Gentlemen, start your engines

When you ask Tim Herold what the secret of HPM’s success is, it doesn’t take him long to get to his brother Pat. “I am technically the VP of engineering, but I’m more of a project manager and troubleshooter,” Pat says. “I do everything here except wash windows and fill out purchase orders.” Official titles do little to capture the essence of Pat Herold. To illustrate that, let’s peel away the veil of HPM and take a look

at his hobby. Well, former hobby, really. Pat used to be a drag racer. Like, an actual drag racer. In fact, he’s raced cars in Minnesota, Texas, Virginia, North Carolina, Nevada, Illinois and Indiana. He retired as a driver in 2008, then worked as a crew chief for a few more years. Before he retired, though, he won a lot of races. He also had a lot of close calls. In September of 2006, on a race day in Virginia, his car was one of the first of two

HPM’s story, like the stories of most companies, isn’t without some drama. cars to roar down the 1,000-foot track, and tragedy nearly struck. After reaching the finish line, he pulled the drag chute release cable, but the parachute lanyard hooked onto the wheelie bar and tipped the vehicle upside down. He was traveling 205 mph at the time. The vehicle skidded 800 feet on its roof. He says he knew he’d be involved in a crash at some point. “Driving a car like that,” he mused, “it’s a matter of when, not if.” But Pat also says the experience wasn’t as terrifying as you’d imagine. Not for him, at least. He says that, when he’s in that car, he’s prepared for all potential mishaps, including a parachute that hooks on a wheelie bar and flips the car. He’s safe. He plans for all contingencies. And he brings that kind of analytical mind to his manufacturing engineering career. That love of machines and tinkering was cultivated a long time ago. “When I was a kid I played with Legos and erector sets,” he says, “and those things

became real. I have a miniature version of HPM at home. I have a water jet for cutting steel. I have a press brake, a mill, a lathe. Basically, a total encompassing fab shop. I wanted to be an engineer when I was a kid. Once in a while I’d go with my dad to work and see the equipment run. And that fascinated me.” He took a metals class in junior high school and fell in love with it. After high school he enrolled at the University of Wisconsin-Stout where he studied manufacturing engineering. After graduating with honors, he went to work for his dad. He helped usher Hansman Industries into the computer-aided drafting era, a move he says was risky at the time but paid off. Tim Herold attended the University of St. Thomas, and eventually the brothers were both at Hansman Industries, happy to be working for their dad. And then that sale happened. And they weren’t happy anymore.

tional tool.” Employees have responded well. “They absolutely love it,” Tim says. “Everything is outlined in the training manual. Retention at the skill levels is very good. Turnover is very low. That’s because of the culture we have in our facility.”

A little help from their friends

HPM sought consulting services from Enterprise Minnesota. Greg Hunsaker, a business growth consultant, helped HPM identify lean practices to increase efficiency, minimize waste and maybe even boost morale.

Challenges

The company grew quickly, as evidenced by all that expansion. But HPM’s story, like the stories of most companies, isn’t without some drama. When the housing- and banking-related recession hit in 2008, HPM wasn’t spared. “The year 2009 is a year I’d rather not revisit,” Tim says. “You could see the wall clouds coming in 2008. There was a lot of trouble in the air. We stayed profitable all 12 months, but it wasn’t without pain.” Tim says the recession prompted them to switch from having two shifts to one, and they learned the value of communication. “No matter what is happening, you have to keep everyone informed.” Recently he’s been revisiting notes he kept from those days. The recent COVID-19 crisis has prompted similar worries. So, if nothing else, the recession gave them a foundation of how to respond to a crisis. HPM also identified room for improvement in its training and upward mobility record. Company managers reevaluated the system in place for employees to progress and be promoted and realized the system made it difficult for employees to succeed. So they revamped it. They changed the progression employees must follow for advancement, and they made the new plan available for all employees to see. They expanded training as well. And instead of waiting for an order that required a particular machine set suitable for training, they simply went ahead and set the machine up anyway and produced parts … for no one. “The parts are an investment in the company,” Tim says. “They’re an educa-

directly related to the welder’s job. “By the second day, one of the guys— the biggest naysayer—said, ‘You know what? I needed this. I’ve needed to do this for 20 years.’ They were happy having their work area organized, and not having to crawl over or under things to get to the things they need to do their job. One person said, ‘I haven’t seen that guy smile in years.’ The guys were energized.” Tim Herold got involved with Enterprise Minnesota about a year and a half ago. He came to an Enterprise Minnesota event, met with Enterprise Minnesota President and CEO Bob Kill and wound up being nominated to join a Manufacturing Peer Council. “I’m in another business group and it’s great. And I think Enterprise Minnesota is right there with them,” he says. “It’s very interesting to be able to collaborate with people in our peer group. They introduced us to the lean program. It’s been absolutely wonderful.”

Future’s so bright

When you ask Tim Herold what the secret of HPM’s success is, it doesn’t take him long to get to his brother Pat. Hunsaker says some of the workers knew about lean, while “some of the people were clueless. But now they understand. They even put up an idea board after our training.” HPM, Hunsaker says, was typical of most companies in that some people have heard of, and embraced, lean principles. Others need a little enticing. In the welding area, for example, Hunsaker says they were able to help HPM get rid of anything in the work area that wasn’t

One of the things HPM is proud of is the way its designers and engineers interact with customers. “The best compliments we get are about our willingness to engage in the design and engineering, and our willingness to ask questions,” Tim says. “Our job here is to do the best engineering job we can.” Tim likes to repeat a mantra when talking about HPM and the way they treat customers and business: “Maximize form, fit and function and minimize cost.” It’s not just a catchy phrase. It’s the foundation of everything they do. “I think our future is bright,” he says. “One of the things we did that makes it that way is that we made a commitment to go down the road of a strategic plan. We started another one this fall. We’re setting goals for the company, and goals for people within the company.” Remember that story about the bank meeting? The one where the brothers came armed with two dozen letters of support from potential customers? Here’s another angle to that story that illustrates the support HPM engenders. One of those supporters initially pledged $750,000 worth of work for the company. When that company’s owner realized they hadn’t met their commitment, he called Pat and asked him to do some quick design work. He wanted to keep his promise and honor his commitment to HPM. And when Pat completed the work, that supporter wrote a check for the remaining $30,000. SPRING 2020 ENTERPRISE MINNESOTA /

Growth

STEELY

RESOLVE

Once ‘a lumber yard only with metal,’ Bemidji Steel has added precision capabilities that should attract a nationwide base of customers By SUE BRUNS 28

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ust a few years ago, Bemidji Steel owners Dale and Jane Grasdalen were pondering the future of their company. The steel business was changing; the location in northern Minnesota seemed geographically limiting. Would relocating to North Dakota open up new markets? Where were the new customers, and what would they want? At about the same time, the Grasdalens’ son Alex was feeling the stresses of his job in Minneapolis and needed a change. In May 2018, he moved back to Bemidji to attend Bemidji State University and find a new direction while working at the familyowned business. But with Alex’s marketing experience and ideas, and some bold investments by Bemidji Steel, both he and the company are finding a new direction. Dale Grasdalen founded the company after graduating in industrial technology from Bemidji State University in the middle of the 1980s recession. His father had been a steel salesman, working out of Minneapolis, and Dale decided to open a steel company in northern Minnesota. “There were no jobs in the midst of the recession,” he recalls. “I thought maybe I should try this because there were loans to be paid in 10 months. There was nothing to lose.” The company opened in 1983 in Bemidji’s Industrial Park. “It was just steel selling, like a lumber yard with metal,” Dale says. After Dale and Jane were married in 1994, Jane became the company’s bookkeeper and co-owner. A few years later, they started a family, but Jane returned to work and took on more responsibilities. The economy had improved and business was in full swing. They built additions on the two buildings, reconfigured space and purchased new equipment. “We started adding some fabrication equipment maybe 20 years ago, and that’s continued,” Dale says. “Customers no longer buy steel. They want cut pieces. They want partially fabricated.” The company’s automated long-cut saw and drill press could do some things, but newer, more sophisticated CNC equipment enabled the company to move in other directions. They provided bending and forming in addition to custom welding for prototypes and series production with new material from Bemidji Steel. The Industrial Park location and its two buildings with about 14,000 square feet of workspace was stretched to its limit. What else could the

company offer? When Alex returned to Bemidji Steel, he thought his role would be temporary. When he was younger, he had worked at the shop, cleaning, mowing, doing whatever needed doing. Jane recalls, “He was always our IT helper. It came naturally for him. QuickBooks would crash or we’d have to install a new program, and he knew how to do that—from about age 12 or 13 on.” In addition to being tech-savvy, Alex returned with marketing experience. He started taking the pulse of existing and potential customers. What did they want? How could Bemidji Steel meet their needs? HEADING IN NEW DIRECTIONS One evolutionary step came two years ago with the addition of a CNC plasma table to cut plate. The machine can cut carbon

to the next level. In 2019, Bemidji Steel added a Durma CNC press brake that can bend half-inch flat sheets of metal up to 10 feet wide. With smart new versatile machines, Bemidji Steel was evolving. Last summer, Jane says, “Alex was feeling the potential for growth.” He had more ideas for things to change and add. One customer, whose business had dwindled significantly, said his company now buys all its parts custom cut. If Bemidji Steel could laser-cut pieces for them, business could grow dramatically. “The lightbulb came on,” Dale says. Manufacturers are eliminating initial processes. They don’t want to purchase or upgrade expensive equipment that will sit unused when they’re not cutting or bending pieces in-house; nor do they want to hire skilled workers to run those machines part

Customers want quality, partially fabricated pieces that are consistently produced by a reliable, highly qualified vendor.

steel up to 6-feet by 12-feet and 2-inches thick. Requests from current customers and area manufacturers started coming in and opened up new avenues. In fall 2018, the organizers of Hockey Day Minnesota 2019 contacted the company about donating time and custom-made fire rings to promote an event in Bemidji that January. Bemidji Steel donated about $8,000 worth of time and materials. Afterward, Bemidji Youth Hockey auctioned the items for a significant benefit to the association. Hockey Day Minnesota was so impressed by the community spirit and quality work from Bemidji Steel that it purchased the same amount for the 2020 event. The plasma cutter moved the company

of the time. They want quality, partially fabricated pieces that are consistently produced by a reliable, highly qualified vendor. The plasma cutter and press brake added value to Bemidji Steel’s services. But imagine what a laser cutter could do. Imagine how all of these smart machines could work together. Imagine all of the applications that hadn’t been explored yet. CUTTING EDGE CHANGES IN THE WORKS In January, they remodeled one of their two buildings to accommodate a top-of-theline laser cutter that arrived in February. “It’s high-precision, high-quantity and cost-effective,” Dale says. “The laser can do so much more and does it faster, so SPRING 2020 ENTERPRISE MINNESOTA /

costs go down.” It is also energy efficient, requires less maintenance and cuts much faster than the plasma cutter. “It opens up doors for our customers and for us,” says Jane, the company’s CFO and major owner. “Maybe we can offer something they thought they could never do before. Maybe we can help them grow their business because we can cut something for them that can allow them to acquire new customers.” The new laser cutter communicates with other machines, such as the 250-ton Durma press brake. “The goal,” Alex says, “is to have a smart factory with integrated technology that all works in a networked environment.” As production increases, automation machines can be added and integrated.

“(ISO) makes you very aware of everything you’re doing. We’re trying to implement what we’re learning along the way so it becomes habit.” “This will be a large improvement for our internal processes and customers,” Alex says. “It will allow us to cut parts on demand in large quantities, as well as be more environmentally friendly and create a cleaner, safer work environment.” CASTING A BIGGER NET Prior to the expansion, Bemidji Steel’s customer base was within a 100-mile radius of Bemidji, with accounts ranging from hundreds of dollars to hundreds of thousands. With capabilities to provide partially fabricated pieces, the company is branching out in new directions. “We’re going to start with the customer base we’ve got,” Dale says, “and add an entirely new one, to bring new revenue, to add jobs in Bemidji. We need to cast a bigger net.” He envisions a multi-state area, eventually nationwide. “We’re not going to walk away from any [of our current customers],” Dale says. “But this is going to change and add value to the whole company and help our local customers.” 30

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While Dale had once seen the company’s location as a limitation, he today says the company’s productivity has helped remove geographic constraints. “There’s not a lot of growth that happens here in Bemidji on the industrial side of things, [but] we can make things happen by finding [new customers], and shipping to them outside the area.” NEGATING LIMITATIONS OF LOCATION Shipping is another factor that has improved dramatically. “Overnight FedEx and UPS make all of that shipping easy now.” It negates much of the geographic limitation. In addition, Bemidji Steel has two trucks of its own, which are on the road daily, delivering products in Greater Minnesota. “There are no barriers for doing something for someone in California or Arizona, Florida or New York,” Alex says. Building partnerships is another part of the plan. Dale points to one example: a machine shop that used to purchase more steel than it currently does. Now it buys partially finished pieces it can machine and ship out. If Bemidji Steel can produce those pieces, the two shops can work together to provide parts and pieces for manufacturers, eliminating all or part of the initial manufacturing process. HEADING TOWARD ISO CERTIFICATION Taking the company in new directions involves more than investing in expensive machinery, building partnerships and expanding the customer base. It also means analyzing the way the company has done business

in the past to fine-tune and standardize processes and procedures for maximum quality and efficiency. For the past several months, Bemidji Steel has been working with Enterprise Minnesota’s Keith Gadacz, a business growth consultant, to become ISO certified. Through the certification process, Gadacz helps companies examine how they are operating, what systems, methods or procedures they have in place. If those methods aren’t working as effectively and efficiently as possible, he coaches employees to problem solve and develop processes that will work best for the company. “I push them to think about what a better day feels like—to look out 90 days,” he says. “What two or three things can we do to make a better day a reality?” Gadacz meets on site weekly with a team from Bemidji Steel. They work through the standards spelled out in the ISO certification manual and determine what best practice steps can be implemented to

Jane, Dale and Alex Grasdalen have guided Bemidji Steel in a new profitable direction.

add value. They discuss ways to eliminate waste of time and materials and to simplify practices to avoid duplication of effort. They work toward standardizing processes for maximum efficiency and look to the future to see where automation can improve productivity. “It’s like dissecting what you’re doing,” Jane says, “and documenting everything— finding mistakes, analyzing why they happen and figuring out how to address them.”

Overnight FedEx and UPS negate much of the geographic limitation. It’s an expensive undertaking, she continues, but it will open doors for Bemidji Steel. “It makes you very aware of everything you’re doing. We’re trying to implement what we’re learning along the way so it becomes habit.” “[We’re] working with Keith on the ISO 9001:2015 certification for quality management,” Alex says. “Keith has put us on track. We started this at the end of October; we’ll finish in July of this year. This is going to grow the company, taking us from the sales numbers we have today to a much broader market in 10 to 15 years.” BUILDING A HIGHLY QUALIFIED TEAM During meetings with Gadacz, key employees are directly involved in the process and others are called upon for input. Phil Underdahl, who had worked for Bemidji Steel in the late 1990s to 2001, returned to the company in April 2016. “It was the perfect time to come back,” Underdahl says. His enthusiasm for the business’ growth and expansion is evident, as is his respect for Dale. “Dale is always ready to do things better and never afraid to invest in the guys in the shop.” Underdahl, the company’s general manager, is heavily involved in the certification process.

Attentive to detail, knowledgeable and committed to growing the company, he is a significant contributor during meetings with Gadacz. Meanwhile, employees are training with the new laser cutter and continuing in a variety of educational and experiential programs to add to the skills they have brought to or learned at Bemidji Steel. Underdahl already had several hours of training for the laser cutter before it arrived and is excited about the machine’s ability to integrate with peripheral machines and robots. “The plasma cutter does a nice job of re-creating parts,” he says, “but the laser is so precise. Its only limitation is how smart the operator is.” Alex Grasdalen and Sam Nelson also have received training for the laser printer. Nelson has worked for Bemidji Steel for about two years. His background and skills in construction technology and welding translated well into machinery operation. For the past three months, Nelson has been involved in the Minnesota Innovation Initiative (MI2), a state-funded program that gives participants an extensive mechatronics overview. MI2 includes e-learning, skill labs, and credit for prior learning for selected courses at higher education institutions. Working at Bemidji Steel gives Nelson and others immediate application for what they learn through MI2. Completion of the two-year program results in a production technician certification through the Manufacturing Skill Standards Council (MSSC). The Grasdalens have invested in workers such as Nelson, picking up the training costs not covered by grants. Personnel are critical, Dale says. “We’ve lost some good people who have retired or moved, but we’ve probably got as good a crew now as we have ever had.” Newer members to Bemidji Steel’s team include Bemidji State University senior in business management, Alex Stenberg, who is involved with the certification process and marketing. High school senior Jake

Slough is interning through Bemidji High School’s Career Academy program. Also new to the crew is Dan Murray, a 2019 BHS graduate with mechatronics and CNC machining training. While they work at Bemidji Steel, all three are continuing coursework and training that will apply to what they do or will do at the company. Slough says he hasn’t fully grasped the opportunities the experience of working at Bemidji Steel has given him. After he graduates from BHS, he hopes to pursue a degree in project management at Bemidji State University and get in on the ground floor of what Alex Grasdalen refers to as “Bemidji Steel 2.0.” BEMIDJI STEEL’S FUTURE With the addition of state-of-the-art equipment and technology, expansion of markets, new procedures for efficiency and other improvements put in place through ISO certification, and the support and training of a healthy workforce, Bemidji Steel’s future looks bright. “There’s nothing unique in what we’re doing,” Dale says. “It’s done all over the place. It’s just unique to say we can do this in Bemidji and find things to make here. Some of [our customers] have similar equipment, but it’s aging and they can’t justify buying another one. Maybe that’s where we come in—to make those components to keep them going as they were. We take that equipment out of service, keep the people who were running them, and put them to work in the final assembly or other places. This way, we don’t tie up that product labor.” His son Alex knows the company must invest in order to grow and acknowledges the growing pains of the physical plant. He says that 30,000 square feet would be ideal in one building. But the company has goals beyond the physical growth and increased profit. Alex hopes to see more manufacturing in northern Minnesota and Bemidji Steel as a pillar of that growth. While much of the physical labor will eventually be done through automation, new jobs will open in sales, marketing, truck driving, delivery, production, technology and highly skilled labor. “[We want] to become better stewards of the community, to be a company that does the right thing and provides good-paying jobs.” Alex says. “Our employees can get an education, have a family, and stay in the area. They want to continue working with us because we treat them right.” SPRING 2020 ENTERPRISE MINNESOTA /

Profile

IRON UNIVERSITY

Alliant Castingsâ&#x20AC;&#x2122; Tom Renk is using an innovative training program and other concepts to reinvest in his people and lift up his company By Robb Murray

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om Renk was just looking to create a few smiles that day. He figured he’d put on a super hero costume, show up at the Special Olympics and hopefully bring an added element of fun to an already profound and impactful event. But when an autistic boy spotted Renk from across the field and walked straight toward him, it was clear Renk’s gesture was creating more than just smiles. He was creating memories. “We were on the track and he was walking toward me,” Renk recalls recently from his Winona foundry, Alliant Castings. “And he comes up to me and he gives me a big hug. And he puts his hands on my head, and I didn’t know what he was going to do. But, you know … I just stood there. And he was staring at me. And it was really, really powerful.” Renk is a fan of Marvel comics. He loves Iron Man and the Iron Man films. After spotting a few Iron Man costumes online, Renk scooped them up, including the red, white and blue one worn by the Iron Patriot in the Marvel films. That’s the one he wore to the Special Olympics, a cause that is dear to his heart. What does any of this have to do with manufacturing and the success and growth of Alliant Castings? Nothing. And everything. For Renk, being connected to the community is just as important as being financially successful in the community. Winona is his home; it’s where he’s raised his children, and where he’s built a company into one of the most innovative in its industry. He believes he’s successful because of the community—and because of the hard-working people that work there. The story of Alliant Castings is one of innovation, reinvesting in people and making

sure every day is spent propelling the company’s mission forward. It’s also a story of a guy at the top who’s doing things the right way.

The 411 on Alliant

Alliant Castings’ roots go all the way back to 1885. As the company’s bio states, the company launched at a time when Dakota Indians occupied the Mississippi River Valley. Back then, the company was called Diamond Huller and specialized in feed grinding equipment (which is why today’s iteration has strong ties to agriculture). But Diamond Huller had a few chinks in its armor. “They went bankrupt and fell on hard times,” Renk says. “The story is that they just weren’t good at planning or forecasting, and they just weren’t adapting.” During the 1960s, Renk’s father and uncle purchased the business and renamed it United Machine and Foundry. They transitioned the company into a contract casting manufacturer but still supported the Diamond Huller product line in an aftermarket capacity. In 2011, Renk purchased United Machine and Foundry from his father and rebranded the company, changing its name to Alliant Castings. And that wasn’t all he was about to change. In 2015, Alliant Castings purchased a Milwaukeebased company called Northstar Products, which manufactures replacement parts, blast wheels and blast equipment. Three years later, they launched another company called Odin, which specializes in low-volume metal casting projects

including legacy castings. Across the three companies, Alliant’s reach hits many sectors: construction and asphalt (including concrete for roads and bridges and concrete pumps), surface preparation, aggregate processing, mining, valves and pipes, and recycling equipment.

Who is Tom Renk?

Renk, proud of his Winona upbringing, obtained a Bachelor of Science degree from Iowa State University. He has 31 years of professional metalcasting experience, beginning his casting career at the American Foundry Society as a software development engineer. During his tenure

The story of Alliant Castings is one of innovation, reinvesting in people and making sure every day is spent propelling the company’s mission forward. at AFS, he improved existing casting software, taught software-related classes and did contract solidification modeling. After four years at AFS, Renk worked as a foundry engineer for Maynard Steel in Milwaukee. In 1995, he went to work for American Metalcasting Consortium as an applications engineer. While at AMC, he worked with the U.S. Department of Defense and private defense contractors to optimize casting costs and processes of military castings. He rejoined the family business in 1996 as a foundry engineer. During his 23-year career with Alliant, Renk has held various positions, including foundry engineer, technical manager, operations manager

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and sales manager. While he jokes that his role now is “head custodian,” he’s actually the president and owner. Though, it would probably surprise no one at Alliant Castings if Renk was seen pushing a broom around the shop floor.

Iron University

One of the most exciting things happening at Alliant Castings is something called Iron University, an educational and enrichment program aimed at, in Renk’s words, producing not just better employees, but better people as well. Alliant Castings has been working with Enterprise Minnesota to enhance efficiency, continue lean initiatives and train its workforce; the latter is where Iron University comes in. Enterprise Minnesota consultants assessed Alliant’s company leaders, managers and lead workers, taking into account competencies needed by each to ensure the company’s success. They also assessed each employee’s tasks and duties. With that information, they created training content aimed at producing the best work performance, whether it’s from an entry-level worker or a seasoned veteran. They’ve created visible career pathways across the organization and built content so employees, if they choose, can train on-site and advance within the company. Abbey Hellickson, a business growth consultant for Enterprise Minnesota, says this enrichment and education effort at Alliant Castings is innovative. “For the foundry industry and for the size of their organization, it’s extremely unique,” she says. “Tom values growth, and he really values elevating his employees to be their best here and at home. So, there’s a foundation to this Iron U that’s really all about just being better people. I would say his approach and passion is something I don’t see every place. And when I look at the foundry industry especially, he is really trying to create those pathways and development opportunities for not only the employees to be successful but to also increase retention.” It might seem a tad incongruous, this idea of using the company’s training budget to do anything but support the bottom line. But Hellickson says more business owners are seeing parallels between contented home life and productive work life. And if training at work can make an employee happier at home, he or she will

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One of the most exciting things happening at Alliant Castings is something called Iron University, an educational and enrichment program aimed at, in Tom Renk’s words, producing not just better employees, but better people as well. come back to work in a better mindset. “As we do leadership development and we work with people to think about becoming better leaders in their organization, sometimes those same concepts help them become better people in their communities,” she says. “It helps them increase their communication skills, and sometimes it gives them an opportunity to better understand their interactions within their family. When we talk about conflict resolution and things like that,

it can help them on both sides (work and home). Anytime we can elevate people in their work environment, we typically are able to elevate them in their home environment. It creates a better overall thought process for them, and that’s part of the reason that we’re doing it.” Renk is all in. “I think it’s an opportunity to help better the people that we have here with a focus on the shop floor,” he says. “There’s a certain yearning, I think, with some of the guys to latch onto this. We’re in the final stages of developing our curriculum with Enterprise Minnesota’s help, and I think we’ll get some really cool results from it.” Enterprise Minnesota and Alliant have been working on the Iron U concept for about a year. The framework is done, and they are preparing to roll it out soon.

Growing leaders

Like any industry, a foundry operation is comprised of various employees carrying out a variety of tasks. And some of those tasks require more skill than others, which, in turn, commands a higher hourly wage. Entry-level workers, in most cases, start at the lower end of the wage scale. But part of the new approach at Alliant, and part of what Enterprise Minnesota has helped the company with, is an intentional system that maps out a plan to climb the company ladder, whether that means cross training and learning a different skill or taking advantage of education opportunities to learn leadership skills. One of the values Renk is instilling in the culture at Alliant is that

everyone has value, and everyone can contribute. That mindset extends beyond an employee’s work on the shop floor. Alliant employees are encouraged to volunteer, including at events like the Special Olympics (a nonprofit supporting athletes with special needs), which they’ve been a part of for many years. “For Tom, it’s just part of who he is and who Alliant is,” Hellickson says. “We’ve talked about really helping those leaders connect the community component to help their growth. But also, in return, it increases their visibility in the community.” And visibility can be important, no matter where it comes from. Hellickson tells a story about a guy who was new in town and eating at a local restaurant. He told his server he was looking for a place to work. The server, having just toured Alliant Castings with one of her high school classes—and leaving impressed with what she saw— recommended he apply there. That was more than a year ago. He’s still employed by Alliant today.

3D and other innovations

Renk gives tours of the Alliant Castings shop floor the way most guys might give a tour of their man cave. Even on a day when he was feeling under the weather, Renk’s enthusiasm for the work they’re doing, and the pride with which he speaks about his employees, is infectious. And it’s hard to not be enamored with a place that names its 3D printers after Marvel characters: One is named Groot, a tree-like extraterrestrial creature you may have seen in Guardians of the Galaxy, and another is Captain America. The big one over there, that’s Hulk. Renk was so struck by the magic and potential of 3D printing after seeing one in action at an industry convention that he bought his first printer a short time later. Today they use five of them to create casting molds. 3D printing isn’t the only innovation happening at Alliant. Renk says they’ve just installed a robotic machine that will dramatically reduce injuries for employees tasked with grinding imperfections off of finished parts. Adding a robotic grinder solves two problems. “It’s hard to find people who want to do that work,” he says. “This machine

And if training at work can make an employee happier at home, he or she will come back to work in a better mindset. was just installed last week. This will process a higher volume of parts for us and reduce the repetitive motion for the people in the grinding room.” Renk picks up a circular metal piece that, in the past, would need to go to an employee for manual grinding. With a twisting motion, Renk demonstrates how manual grinding is done. “We’re trying to make it more safe and increase efficiency, productivity and consistency of the part,” he says. “This won’t replace the workers; it will supplement what they do. That repetitive motion was hard on people’s wrists and this will take that away.” Enterprise Minnesota is also working on a 2015 ISO upgrade, as well as re-examining and updating lean initiatives. White boards pepper the shop walls reminding workers about measuring and monitoring performance, attainment goals, and safety and quality best

practices. “It’s really about giving them these visuals that define what a good day is,” says Greg Langfield, a business growth consultant for Enterprise Minnesota. “We talk about safety: Did everyone go home today? We talk about quality: Did everyone show up today? We talk about, ‘What are three to five things that can show a quality day?’ We’ll talk about a green day versus a red day. If it’s red, what can we change to make things go better?” Langfield said Renk’s leadership is perfect for the kind of consulting help Enterprise Minnesota offers. Renk comes at problems with an open mind and takes constructive criticism well. “He doesn’t want to be the typical smokestack foundry,” Langfield says. “He wants to educate people. He has a foundry in a box that he takes to schools and shows kids what it’s like to make a foundry. He also—because he’s in a local neighborhood—has thrown a community block party.” Langfield says he’s also helped Alliant take a look at its business management practices. “They had challenges with some turnover,” Langfield says. “Some of it was not having the right people in the right positions, and we helped them see who would be the best fit.”

Give back

Giving back to his community is important to Renk. One of the principal ways he’s done that is through his commitment to the Special Olympics. And his involvement with the group began way before he put on that Iron Patriot costume. “It actually originates back with my dad who started it in the ’70s. He was actively involved in the Special Olympics,” Renk says. They began their involvement with Special Olympics by casting the medals awarded to the competitors. Today it’s blossomed into something a little bigger. “We’ve become more involved over the last six or seven years,” Renk says. “We’re volunteering, and we will suit up with Iron Man and some other costumes that we have and just go and entertain the kids at the event. They absolutely light up with that stuff. I tell everybody, ‘Here is a great way to go and look at how good you actually have it.’ It’s kind of a grounding thing, I think. Appreciate what you have.”

SPRING 2020 ENTERPRISE MINNESOTA /

Entrepreneurs

Taking

the

Elevator

Top

to the

For Minneapolis entrepreneur Jashan Eison, his business is personal

By R.C. Drews 36

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SPRING 2020

ashan Eison was 13 years old when his father was murdered. With Eison and his two brothers to care for, his mother played the role of both parents. “I always think about the sacrifices she made,” says Eison, CEO of H&B Elevators in Minneapolis. “My mother had little to nothing. But [with] that little to nothing, she gave everything.” Growing up in Milwaukee, money was tight. Nothing came easily. Even meals couldn’t be taken for granted. When there wasn’t enough, the kids ate first. By high school graduation, Eison knew he wanted to study construction. He chose the University of Wisconsin-Stout, and once again his mother offered all she could. “She gave me the keys to her only car so I could get to college—and she took the bus,” Eison says. “Thinking about it fuels me every day.” He pauses once more. “I still don’t know how she did it. She can have anything she ever wants; that’s how I’ll put that.” Life picked a fight with the wrong family, and while it may not have been fair, the loss and sacrifices made Eison stronger. His experiences prepared him to adapt, and his journey led him to become one of North Minneapolis’s noteworthy entrepreneurs. The Minneapolis-St. Paul Business Journal named Eison in its prestigious 40 Under 40 list in 2017 and awarded him with the Diversity in Business Award in 2014. In 2016, the Metropolitan Economic Development Association (MEDA) named him Entrepreneur of the Year. His company’s clients have included Facebook, Google and The Walt Disney Company. Projects by H&B Elevators are featured at U.S. Bank Stadium, Yankee Stadium and the 163-story skyscraper Burj Khalifa in Dubai, United Arab Emirates, to name a few. “You learn how to tactfully use those survival skills—and sales skills, and people skills and hustle skills—to do what you can in a positive way,” Eison says. “Here I am, a kid from Milwaukee, sitting at the head of a multi-million-dollar organization—you just don’t see it.” It all began with a gamble.

Creating an opportunity

A business called Hauenstein & Burmeister was founded during the 1920s as

a south Minneapolis weather stripping company. By the Great Depression, the company focused on supporting public facilities, becoming one of the first distributors and installers of noise-dampening acoustic ceiling products. By World War II, H&B was crafting wooden ammunition boxes and airplane hangar doors to support the war effort. Hangar doors led, in time, to elevators, and the company changed hands regularly. New ownerships expanded into construction, bleachers, and low-voltage equipment. When Jashan Eison returned to the midwest in 2005, H&B (under the ownership of the billion-dollar construction firm, Kraus-Anderson) was known for elevator cabs, entrances, and doors. Eison came on in 2007 as a project

“They bought a company, moved it into an area that has needed the kinds of jobs and wages they provide, and cleaned up a building that looked like it should have been torn down.” manager and dabbled in sales. He went back to school, graduating with a master’s degree in marketing from Marylhurst University—and what he labels as a “false sense of understanding.” Kraus-Anderson had acquired the business believing it would pair well with its primary interest, but the elevator division didn’t fit a company without an elevator or manufacturing background. With H&B Elevators well regarded but bleeding money, Kraus-Anderson decided it was time for a change. “There were days that we just didn’t know whether or not the doors would be locked,” Eison remembers. The then-31-year-old project manager wondered what would happen to his customers, company and coworkers. He was searching for purpose; he wanted to make a difference, change his family’s trajectory, and honor the generations that had come before while securing a future for his own children. When Kraus-Anderson decided to sell the H&B Elevator division, Eison wasn’t on the list of prospects, but he was

expected, as a key employee, to educate potential buyers touring the facility. “They’re going to sell this to somebody,” he recalls thinking. “Then you’re going to work for somebody else who will likely need all of your knowledge.” Then he thought, “Why not us? Why shouldn’t I take this [opportunity]?” That opportunity came much sooner than he thought it would, Eison says, as the pull was impossible to resist. “For my kids and my kids’ kids, this could be something legacy-like,” he told himself. “I created this opportunity to do something that you could only think about, dream about or talk about. And then here it is.”

Partnership

Eison was in his early 30s when he began wrestling with thoughts of purchasing H&B Elevators. He knew there was risk, but he felt good about his experience in the business, while also recognizing he couldn’t go it alone. He needed a strategic partner—someone with a background in finance—and he found it in Fred Poferl, H&B’s current chief financial officer. Poferl had been with the company since 2003, and he had a knack for numbers and patience. For Poferl, the kind of partnership offered by Eison was similar to one he’d received years earlier by another friend. He’d turned that one down at the time because his family was too young for such a financial risk. Now, he welcomed the chance to make a dream a reality. His temperance balanced Eison’s young, competitive personality, and the pair scrambled to come up with a plan. Kraus-Anderson rejected Eison and Poferl’s first offer, but the duo refused to give up. It was around that time Eison was encouraged to step away from the purchase. “You cannot do this,” he was told. “That was enough for me to keep my fire going to this day,” Eison says. He wasn’t about to settle for “no.” Poferl and Eison came up with a new pitch to Kraus-Anderson, and negotiations lasted more than a year. Help came from MEDA, which connected the two entrepreneurs with lawyers, advisors and financing. Eventually, Kraus-Anderson saw an offer it couldn’t refuse. Eison today repays the help he received by serving on the boards of MEDA, Turning Point and the Minneapolis Workforce SPRING 2020 ENTERPRISE MINNESOTA /

Jashan Eison, along with CFO Fred Poferl, have rebuilt and revitalized H&B Elevators. Today, the company employs 50 team members on projects across the country, all from their riverside North Minneapolis headquarters.

Development Council. In hindsight, Eison sees that H&B’s former owners oversaw the transaction with the future—his company’s future— in mind. “They guided the purchase and the sale in the best possible way that would leave me an opportunity to succeed,” Eison says. Though the purchase was nearly seven

With an ISO certification in hand, H&B’s customers gained a greater respect for the company, seeing the investment in improvement as a commitment to their own businesses as well. years ago, he sometimes wonders what, if anything, he would do differently today. In any case, Eison is confident that, given a chance, he’d do it all again. “Sometimes it’s just that knee-jerk reaction,” he says. “Jump. Figure it out. Just make sure you’re not jumping too far, too fast.”

Rebuilding and refining

Poferl and Eison had spent 18 months working alongside their coworkers without letting the big secret slip. When word came from top brass that the pair would be purchasing the company, the news shocked the workforce. But there was no time to celebrate or answer questions. The terms of their arrangement with KrausAnderson meant the new owners had to find a new home within a week. 38

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SPRING 2020

“Good thing I had a truck at the time,” Poferl quips with a smile. At just over 50,000 square feet, that home—a former clothing warehouse on Washington Avenue in North Minneapolis—had the space but lacked the infrastructure. Metal manufacturing was a different sort of business, and the structure needed power distribution and proper airflow to accommodate H&B. They were working against the clock. New and existing staff operated across the new and old spaces as contractors installed critical systems. Poferl, meanwhile, traveled the city in his pickup truck, looking for auto shops that could handle custom paint jobs for their products. The new company had inherited a backlog of work, but the quotes given to clients didn’t factor in outsourcing most of the process. “It wasn’t like we were going to call up our customers and say, ‘We’re going to shut down for a while because we’ve got to make a big move,’” Eison recalls. The team had to adapt. Some of H&B’s heavier equipment weighed multiple tons, and it was more than a month before everything was in place. Today, after working through that early rocky period, H&B Elevators is sustainable and growing. Eison is practical in his account, saying success “depends on who’s willing to sacrifice the most for what they want.” Life taught him plenty about sacrifice, and the shuffle and stress of those early months weren’t enough to break him. “He’s a wonderful leader,” says Bob Kill, president and CEO of Enterprise Minnesota. “They bought a company, moved it into an area that has needed the kinds of jobs and wages they provide, and cleaned up a building that looked like it

should have been torn down.” With their feet back on the ground and margins stabilizing, Eison and Poferl still had a lot of work to do. The story wasn’t over. They set their eyes on ISO certification and tapped the experience of Enterprise Minnesota to make it happen. “We always thought it was too expensive, that it was going to get in the way of the business,” Eison says. “But it’s been good for us. We owe them big time because they helped us get here.” With an ISO certification in hand, H&B’s customers gained a greater respect for the company, seeing the investment in improvement as a commitment to their own businesses as well. Today, H&B Elevators still faces challenges, but Eison says the stress and obstacles of their first years are behind them.

“It’s hard to find people, and it’s hard to keep people,” Jashan Eison says. “But we pride ourselves on giving folks a chance who wouldn’t otherwise have a chance.” “That’s just business, right? If you can’t figure that out, well, hang up your cleats and move on,” Eison says, laughing. But Kill is quick to give credit where credit is due. “When we think of elevators, we think of pushing a button and they go up and down,” he says. “H&B Elevators brings innovation to a product that we don’t think of as being innovative. And they’re known all over.”

Empowering a team

Under Eison and Poferl’s ownership, business is as much about people and relationships as it is about building world-class elevator doors and cabs. Eison says he hasn’t forgotten the lessons his mother taught him. He runs his business like he raises his family, by treating people fairly and doing what’s right. It’s part of the reason H&B actively recruits new employees who haven’t traditionally entered or succeeded in the workforce. “There’s just so much out there, and we could turn a blind eye to it and pretend it doesn’t exist, or we could be a part of the solution,” Eison says. He believes that by treating people well, you’ll get the best out of them. And although turnover is still a reality, Eison’s investment in his workforce has helped breed loyalty. Most employees have worked for the company for years, some even for decades. H&B’s region of North Minneapolis faces a shortage of skilled labor, and new hires may never have read a tape measure or worked with metal or elevators, but these disadvantages can be overcome. “It’s hard to find people, and it’s hard to keep people,” Eison says. “But we pride ourselves on giving folks a chance who wouldn’t otherwise have a chance.” It’s not only getting employees in the door but training them to work at a high level that’s necessary for a custom business such as H&B Elevators. With a team of 50 employees, Eison partners with veteran staff to shape new team members into future leaders. One of those veterans is H&B’s former cab lead, Wayne Rierson. Rierson came to H&B in June 1969 straight out of high school. He lived two blocks away and learned everything he needed to know to apply for a job by checking out the company’s parking lot.

“They sure drive nice cars around there,” he thought to himself. “They must make pretty good [money].” Rierson already knew how to read drafts and was willing to learn whatever he needed to be successful. He says he grew by sharing knowledge, and that’s how he shapes new recruits today. As Rierson speaks, the sounds of industry fill the H&B Elevators warehouse—air hoses gushing, welders sparking and forklifts hauling heavy loads. He remembers when Eison and Poferl purchased the company in 2013. Of the roughly 30 union employees at the time, he was one of 12 who stayed. The others were intimidated by the loss of union status. Over his 51 years in the shop, he’s watched processes change drastically. Today, H&B works with fiber cell laser cutting systems and automated

“They bring innovation to a product that we don’t think of as being innovative. And they’re known all over,” says Bob Kill, president and CEO of Enterprise Minnesota. shears—tools which, combined with better processes, yield faster, more consistent products. But there’s a lot still done by hand. “There’s still a skill set here,” Rierson says. “A lot of people try it, and some of them, they just don’t catch on.” Rierson actually retired three years ago, but the company tapped him to come back part-time. And he isn’t the only veteranturned-mentor guiding the next generation of welders, machinists and engineers. “We came to help, and we’ve been helping ever since,” he says. Like Eison, Rierson believes in investing in good people and sound processes. Right now he’s in the process, Rierson says, of “capturing his brain on paper”: writing training manuals that will enable new staff to benefit from his experience. And maybe the people-centered approach at H&B Elevators makes sense— products inform processes, and elevators are about reaching higher. For Eison, elevating others is more than a metaphor or a mission statement, it’s his life’s story and business model. He weathered a complicated upbringing amidst loss to become an industry innovator.

Join us for Enterprise Minnesota’s State of Manufacturing 2020 survey release event.

3-7 pm Thursday, November 5 EARLE BROWN HERITAGE CENTER Carriage Hall 6155 Earle Brown Drive Brooklyn Center

SPRING 2020 ENTERPRISE MINNESOTA /

Final Word

Below the Surface The results of our annual State of Manufacturing® survey invariably surprise us by revealing insights from beneath the obvious

s I write this, our pollster is in the field with the questionnaire for the 2020 edition of our annual State of Manufacturing®(SOM) survey research project. We launched the SOM some 12 years ago. Despite the considerable costs, we wanted to engage a nationally known pollster who would employ statistically valid data-gathering techniques to help show how Minnesota’s manufacturers would assess the challenges and opportunities they faced in the previous year and to tell us what they expect in the coming one. As far as we can tell, it was (and is) the only survey of its kind in America. We always augment the objective information of the telephone survey with at least 12 to 15 focus groups that provide more subjective background opinions and explanations. We believed policymakers, community leaders, educators, media—not to mention manufacturers—would all benefit from hard data that transcends mere stereotypes. Our instincts were good. Every edition of the SOM always seems to exceed expectations. It proved its worth in the very first version, and in some ways helped us shape how we view manufacturing executives. The inaugural SOM hit the field just as the economy had unexpectedly launched a Thelma-and-Louise nosedive into a fearprovoking economic abyss. We were more than a little surprised at the calm resolve with which manufacturers took the news, particularly in the focus groups. We thought they would grouse about their bad luck or point fingers of blame. Instead, they talked about how they could plan around it, perhaps ultimately using the downturn to gain a market advantage. We’ve realized over the years that the SOM’s significance is how it unveils what’s brewing behind the predictable results. I can tell you right now that (notwithstanding the coronavirus effect) the anxieties of most manufacturers revolve around workforce issues. They’ll also want to talk about the 40

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Lynn Shelton is vice president of marketing at Enterprise Minnesota.

burden of the always-increasing cost of providing health insurance to employees. They’ll wonder about the uncertain effects of global trade constraints. And they’ll speculate about costs related to overzealous government regulations. Among the considerable talents pollster Rob Autry brings to the SOM is his ability to probe what’s underneath those concerns. How will manufacturers retain the employees they have? How will they attract new ones? What innovations will enable them to bring expertise to their shop floors? What’s the role of automation or even information security? How will they work together with each other, and their communities, to address these issues collaboratively? This is about the most fun we have every year! We recently hosted the kickoff planning meeting for the survey—always a worthwhile and entertaining session—in which SOM sponsors kicked around broad themes for the survey as well as ways that might help our pollster maintain his reputation for probing beneath the surface. We are fortunate to have added three companies to this year’s roster of “premier” sponsors: • Fafinski Mark & Johnson has offices

in Eden Prairie and New Ulm. FMJ’s experienced manufacturing practice team, led by a former general counsel of several iconic Minnesota manufacturers, can solve clients’ legal issues in every phase of manufacturing. • Grey Search + Strategy is in the Twin Cities. Grey is an executive search firm with deep experience in manufacturing. The firm is a match maker, not a job filler. It also offers customized consulting services to help manufacturers on-board and retain employees. • PROduction Workforce Professionals is headquartered in Detroit Lakes, with offices in Minneapolis, Fargo and Grand Forks. PRO allows manufacturers to focus more on their own business, while the firm’s specialists help with HR management, benefits administration, workers’ comp, safety compliance and workplace wellness. I also want to recognize and thank the others who have helped us so generously over the years. • Bremer Bank has branches throughout Minnesota. • DEED has offices throughout Minnesota. • Granite Equity Partners is based in St. Cloud with a satellite office in St. Louis Park. • King Solutions is headquartered in Dayton. • Olsen Thielen CPAs and Advisors has offices in Roseville and Eden Prairie. • Widseth has offices in Alexandria, Bemidji, Brainerd/Baxter, Crookston, East Grand Forks, Forest Lake, Grand Forks and Rochester, and it just opened an office in Mankato. Input into our topics for focus groups is not just limited to our financial sponsors. If you have thoughts about what we should cover, we’re only an email away. Let us know what you think (events@enterpriseminnesota.org).

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Fifty-three percent of manufacturers say they have a formal strategic plan to achieve profitable growth. Is your company one of them? Call us today at 612-373-2900 or reach us at enterpriseminnesota.org for a free 90 minute consultation with one of our strategy experts.

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