Enterprise Minnesota Magazine - Summer 2022 by Enterprise Minnesota

FOUR QUESTIONS

Kingshuk Sinha – Professor and Chair of the Supply Chain and Operations Department, Carlson School of Management

Helping Manufacturing Enterprises Grow Profitably SUMMER 2022

Micah Eveland CEO, Scamp Trailers

Thriving in Chaos Scamp campers are as American as mom and apple pie.

So is their story of success.

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

GROWING COMPANIES ENHANCING COMMUNITIES

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SUMMER 2022

THRIVING IN CHAOS

Scamp campers are as American as mom and apple pie. So is their story of success.

Deep Roots, New Growth

Heating Up

Next generation leaders propel two thriving manufacturers based in tiny Stephen, Minn., into their next 50 years.

Sauna360, the nation’s leader in saunas, stays true to culture while offering luxury products and weathering tough challenges.

Your Space Should Make Money, Not Take Money

Greater Than the Sum of Its Parts

As supply chain uncertainties force companies to accumulate necessary parts and material, manufacturers are looking to grow.

Leading Daily for Results integrates the principles of continuous improvement with leadership skills to help companies win each day.

2 Bring It On For manufacturers, challenges are merely opportunities for success.

Heart Workers Advocates for Health and central MN manufacturers bring life-saving outdoor AEDs to rural communities.

6 HED Cycling Products Adapts to Demand

Filling a GAP

For Anne Hed, running a successful company means every employee invests in its mission.

Continued GAP funding would demonstrate the legislature’s understanding of the critical nature of manufacturing.

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. SUMMER 2022 ENTERPRISE MINNESOTA /

Helping Manufacturing Enterprises Grow Profitably

Bring It On

9001:2015

For manufacturers, challenges are merely opportunities for success.

or more than 30 years, Enterprise Minnesota has worked closely with manufacturers to help them improve operations, boost sales, and grow profitably. Over these decades, we’ve witnessed major economic and political shifts, a financial crisis for the ages, a chronic (and worsening) labor shortage, and an on-again off-again shutdown of our economy in the face of a global pandemic. Manufacturing leaders and their employees have worked through each new test to grow stronger in the next year, decade, generation. As we enter the post-COVID economy, and manufacturers face a new menu of obstacles — supply chain uncertainty, the highest inflation levels in two generations and, still, the worker shortage — past performance is an indicator of future results. Over the years, we’ve marveled how their fierce determination to prosper grows stronger with each new hurdle. Manufacturers have the strength of welltrained and veteran athletes to endure and the experience to tackle new challenges. No company exemplifies this resolve better than Scamp, a company you can read about on page 36 of this magazine. A third-generation manufacturer based in the 300-person town of Backus in northwest Minnesota, Scamp has thrived through all the swings and hardships of the last three decades — on top of a major facility fire that shut down production for almost a full year. In fact, Scamp more than thrives. Demand for its lightweight pull-behind campers is so strong that buyers face a 2

/ ENTERPRISE MINNESOTA SUMMER 2022

nearly two-year wait for the campers after placing an order. Scamp’s story reflects that of countless Minnesota manufacturers. Business is booming, and there are struggles to keep up with demand. Manufacturing leaders are working hard to attract and retain a quality workforce by offering excellent pay and benefits as well as an opportunity for advancement. Those leaders are also cultivating relationships with suppliers to ensure operations can continue despite shortages and bottle necks. Inflation and potential sales interruptions loom, but they are aware and are taking steps to minimize the downsides. The latest State of Manufacturing® survey shows that manufacturers widely share this healthy combination of optimism and realism. They remain confident of future success, with 87% saying they were optimistic that their companies would continue to do well. At the same time, well over half reported concerns about supply chains, worker shortages, and rising costs. It never hurts to occasionally step back and appreciate the people you work with. We’re delighted to work alongside the manufacturing companies that drive our state’s economy. Just as manufacturers do, our business advisors become stronger with each new hurdle they overcome. We’re eager to enter the next round of challenges together. Bob Kill is president and CEO of Enterprise Minnesota.

Publisher Lynn K. Shelton

Editorial Director Tom Mason Creative Director Scott Buchschacher Managing Editor Chip Tangen Copy Editor Catrin Wigfall Writers Sue Bruns Grace Bureau Amanda Dyslin Suzy Frisch Allison Jensen Anne Kopas Robb Murray Peter Passi Kate Peterson 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

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ADVOCATES FOR HEALTH

Heart Workers Advocates for Health involves central Minnesota manufacturers to bring life-saving outdoor AEDs to rural communities.

oel Vogel, then 46, was at home in St. Joseph when he started feeling heart attack symptoms. In the ambulance, he was given nitroglycerin three times to keep him alive. Vogel has since recovered, thanks to emergency surgery that cleared his fully blocked “widow-maker” artery and implanted six stents. It was a wake-up call for Vogel and his friend, Rich Feneis. Feneis lives on the Mississippi River in a secluded part of Sartell. Vogel’s health scare in 2004 made him realize that if he or a neighbor faced a similar situation, they might not live long enough for paramedics to help. When Feneis retired, he joined Vogel’s efforts to increase awareness about sudden cardiac arrest and raise funds for automated external defibrillators (AEDs) in the St. Cloud region. Thanks to their nonprofit Advocates for Health — and the partnership of several central Minnesota manufacturers and organizations — the area now has 119 new smart AED cabinets. “Our vision is to save lives and make AEDs as affordable as possible so we can install as many as possible,” Vogel says. That vision includes installing AEDs in rural areas, where ambulance response times are longer. Time is of the essence during sudden cardiac arrest. Every minute that someone does not receive rapid defibrillation, his or her chance of survival drops by 7% to 10%. Nearly 90% of the 356,000 out-of-hospital cardiac arrests in the United States are fatal, according to the American Heart Association. But when people have their hearts shocked back to life by an AED, they have a 70% to 80% chance of survival. That makes it critical to have AEDs nearby and accessible, Feneis says. Yet the

Rich Feneis (left) and Joel Vogel (right) launched Advocates for Health to bring AEDs to the St. Cloud region.

devices often are located inside of locked buildings or are hidden from plain view. And 35% of the time, they don’t work due to bad batteries or expired pads, according to national research.

Powering up efforts

While Vogel initially raised money for AEDs through Mended Hearts, he and Feneis decided to do more. They applied for funding from the CentraCare Health Foun-

SUMMER 2022 ENTERPRISE MINNESOTA /

dation, but Feneis’ plan to put an AED in his garage and leave it unlocked for neighbors to use was rejected. “I’m the worst guy to say no to,” Feneis says. “I will figure out a way to do it.” Feneis found an Ohio parks department that recently installed climate-controlled cabinets for AEDs that keep them working even in extreme weather. He added the technology to the grant proposal. CentraCare agreed to a pilot program in which the partners would raise matching funds to install a similar cabinet in Feneis’ neighborhood. In a week, friends and neighbors raised the money. Ready to do more, Vogel and Feneis returned to see if CentraCare’s foundation would back a bigger campaign. They launched Advocates for Health in 2019 to support this work. Then they started lobbying any government entity, community organization, and business they could find to persuade them to install outdoor AEDs. The AED Smart Monitored Cabinet System costs $7,195 and contains many features that makes it an easy sell. Housed

Every minute that someone does not receive rapid defibrillation, his or her chance of survival drops by 7% to 10%. in a stainless-steel structure, the cabinets are powered by a 24-volt DC converter with a rechargeable backup battery that maintains essential functions during power outages. LED lights provide visibility at all hours, and sensors alert emergency responders if the door is opened or the AED is taken. In addition, the sensors send alerts if the cellular connection isn’t working, the backup battery gets activated, or the temperature is too high or too low inside the cabinet. While promoting the AED program to the Holdingford Lions Club, Vogel generated interest in the AED smart cabinets — and more. Bob Warzecha, president of Two Rivers Enterprises, a stainless-steel manufacturer in Holdingford, wanted to get involved

with making the cabinets locally. Feneis was ready to explore new manufacturing options. He was having issues with the manufacturer. Feneis invested his own money to form the company Cardiac ReStart. It serves as the developer and supplier of the AED system — work that is difficult for nonprofits to do — while Advocates for Health builds awareness and advocates for installations, Feneis says.

Eliminating obstacles

In late 2020, engineers at Two Rivers designed a free-standing AED cabinet that also could be mounted on a building, says Jessica Wells, general manager. Manufacturing and assembly plans were progressing nicely until the effort hit an obstacle. The cabinets needed an electrical certification required to continue manufacturing and installing the units, to the tune of $12,000-$14,000. Wells connected Feneis with Dawn Loberg, an Enterprise Minnesota business development consultant who works in the area, to see how the team could overcome the costly certification roadblock. Loberg

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then connected Feneis with the Initiative Foundation, a Little Falls–based economic development organization that serves 14 central Minnesota counties. It provided $5,000 in technical assistance funding to help pay for an Electrical Testing Laboratories (ETL) certification. “We’re structured in a way that focuses on economic development, community development, and generosity — and this request really hit all three of those buckets,” says Bob McClintick, marketing and communications director at the Initiative Foundation. “Providing the funding helped to knock down obstacles and increased the speed of getting these stations installed. We see that as an important investment in the health and vibrancy of the communities we serve in central Minnesota.” Feneis also tapped into his business connections to ask Nova Flex LED in St. Cloud to solve challenges with the cabinets’ lighting. Nova Flex makes all custom lighting, so its staff could easily fine-tune the LEDs’ length and color to suit the cabinets, says company president Jordan Onnen. Nova Flex usually works on large-scale commercial and residential projects, but employees were excited to get involved with the AED project, Onnen says. “Everyone takes a lot of pride and satisfaction in being able to help others, especially the local community. The team thought this project was really cool and local, and it’s neat to be able to get involved in something that makes a difference.” Along with bringing business to central Minnesota, the initiative to manufacture locally allows Cardiac ReStart to build the AED cabinets more affordably, Feneis says. Cardiac ReStart also made improvements, such as swapping in multicarrier SIM cards instead of traditional cellular service to ensure consistent communication with emergency responders. The American Heart Association recommends a three-to-five-minute response time to have a chance of surviving sudden cardiac arrest. “We started drawing threeto-five-minute circles around different areas, and there are thousands of them needed,” Feneis says. “Sporting events, trail heads, walking trails, neighborhoods, parks — any place people congregate there is a chance for a sudden cardiac arrest. That response time is a very big issue.” —Suzy Frisch

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Left to right: Anne Hed, CEO, Paul Harry, COO, and Catherine Stewart, director of operations.

GEARING UP FOR MORE SUCCESS

HED Cycling Products Adapts to Demand For Anne Hed, running a successful company means every single employee is invested in its mission.

t HED Cycling Products, this is evident when turning the facility’s TV to a professional bike race and seeing employees’ joy at watching the fruits of their labors in motion — quite literally. Founded in 1984, the self-named bicycle wheel maker sprang from a match between former triathlete Anne Hed and her late husband Steve Hed, a bike shop owner. Together the pair grew from humble garage beginnings to a global name in performance bike wheels, equipping the likes of Lance Armstrong. After Steve’s passing in 2014, Anne took over as CEO, guiding the company through a move to its current Roseville facility. Now, she’s leading through a new phase. As COVID-19 pushed many people toward outdoor hobbies, the cycling business boomed. HED still strains to meet demand, reporting 50% growth over the past year.

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In this, Anne saw opportunity: newly unemployed or underemployed workers, many of whom were comfortable with hands-on jobs, eager to learn more skills. By prioritizing culture fit over lengthy resumes, Anne plans to invest in an adaptable, sustainable workforce. Each new employee orientation includes a walkthrough of the business plan to further strengthen the team’s understanding of HED’s business operations and core values. Quarterly business status meetings include everyone, too, to promote transparency. “We’re proud of these hires,” Anne says, noting HED can teach skills they did not learn at college or trade schools.

Reaching the finish line

Anne has long understood the business value of outside perspectives. In January 2019, she brought on consultant Paul

Harry, who now serves as COO, to guide a relatively new leadership team, and last July HED turned to Enterprise Minnesota, with whom it has worked in the past. The partnership’s current focus, says Enterprise Minnesota business growth consultant Greg Langfield, is improving organizational efficiency. The key to HED’s success, according to Langfield, is an entrepreneurial mindset. But this creativity needed project management processes to ensure consistency. With the help of time tracking exercises, the team developed a system to prioritize every single project within the company. The end goal: to prioritize the projects most worth HED’s time and money — and to ensure they reach the finish line. “Part of being an entrepreneurial organization means that they have multiple things they’re juggling, and there’s so much energy and creativity flowing through the organization,” Langfield says.

New machines, new opportunities

HED also implemented changes to its manufacturing floor as a result of the Enterprise Minnesota partnership. By improving the product assembly flow and training employees to spot product issues sooner, the company has reduced scrap. And it’s just in time, given increased demand from U.S.-based bike manufacturers facing supply chain backlogs on imported wheels.

To meet demand, HED is embracing a doit-yourself mentality. In April, the company installed a new tooling machine to increase production capacity — which brings another opportunity for employees to gain new skills. And by cross-training employees, HED can better cover staffing gaps when they arise. New automation processes and upgraded equipment will further enable teams to prioritize key projects.

The mantra: Continuous improvement

HED’s recent changes have yielded positive results, Anne says. Revenue has almost doubled, but the work is never finished. Rather than rest on their laurels, the team knows it’s vital to look forward. Next steps include leadership development to capitalize on a young, eager workforce. With a new-to-HED leadership team with plenty of talent but lacking experience, growing pains are inevitable. “It’s a focus on continuous improvement. We live that mantra here,” Harry says. “We’ve got a lot of young leaders, and so

HED forged a relationship with Cervélo to design and build the P5X for triathletes.

to lean on Enterprise Minnesota to help us add value to our investment, that fits right in with our culture.” The company’s mission isn’t just about going fast on bike wheels, Hed says. Long term, she hopes to bring awareness to Minnesota companies by joining forces with others in the bike industry to keep more of the industry’s biking manufacturing in-state. “We know we can make all the bikes here and use people who are here in Minnesota and then sell our product all over the world,” Hed says. She also emphasizes helping athletes of all kinds and sponsors a diverse range of

bicyclers and supporting nonprofits that provide free bikes for kids. HED’s willingness to innovate and undergo the hard work of change is what makes the company successful, Langfield says. “It’s just a cool company,” he continues. “They’re not that big, but they have a worldwide presence. They’re a gamechanger in the bicycle industry. They can be innovative and still get things done.” Going fast is, however, still a key goal — as is natural for a former triathlete. “When you’re making this wheel, it goes across the world to this athlete, and they depend on your expertise to win races,” Hed says. “It feels like we’re getting a little bit back to normalcy.” —Anne Kopas

SUMMER 2022 ENTERPRISE MINNESOTA /

Holy Redeemer Catholic Church in Marshall, Minn.

FAMILY EFFORT

Charting a Rise to New Heights An eye for a customized product, Marcstone’s founder embraced lean principles to grow its operations.

he Corinthian column capitals that line the exterior of Holy Redeemer Catholic Church in Marshall, Minn., make it one of the city’s most beautiful buildings. The church was constructed in 1915, and when an addition was planned to this historic structure a century later, Marcstone, a Wanamingo, Minn.-based cast stone producer, replicated these exquisitely sculpted pieces down to the finest detail using modern casting methods. This is one of many projects the Doffing family, owners of Marcstone, look back on with pride. Marcstone’s cast stone portfolio spans nationwide, with large-scale apartment buildings in Chicago, Regions Hospital in St. Paul, and numerous projects for schools, businesses and other organizations.

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Building a deep and varied portfolio in just about 15 years is especially impressive considering Marcstone’s roots, which began in 2003 when company president and founder Drew Doffing was only 17. Drew and his sister Elyce’s father, Tom Doffing Sr., was a general contractor and noticed an opening in the local and regional market for custom, high-end cast stone at a competitive price point. The complex craft involves molding concrete to simulate different kinds of natural stone, and it can be found on building accents, windowsills, monuments, column caps and panels at the bases of buildings. Tom and Drew started creating mix designs and building forms in their basement and garage at their home in Hampton, Minn.

“When I saw how unique and ornate cast stone masonry was and started looking at the grandiose and historical structures made of stone, I was drawn in,” Drew says. “Creating stone like this was a complex skill to develop, and it was challenging. It wasn’t easy to make the first statue.” “Even today, as our business grows,” Drew adds, “it’s always developing and evolving across the board. In business, every day is a new challenge.” The family used Tom Sr.’s construction contacts to land the first jobs, but demand grew quickly and the family built the plant in Wanamingo in 2006. Co-owner Elyce Doffing joined in 2007 to spearhead new sales efforts. Drew’s brother, Tommy, came on board in production, building complex

Drew and Tom Doffing

molds, and maintaining equipment. “When I saw Drew’s passion for producing stone, I believed in it, and I wanted to be a part of Marcstone’s success,” Elyce says. Other Doffings have worked at the company throughout the years, including Paul Doffing, a cousin, who came aboard in 2017 to head up marketing. He modernized the company’s online presence and developed communication strategies that help explain what sets Marcstone apart. “It’s a company highly capable of

“When I saw how unique and ornate cast stone masonry was and started looking at the grandiose and historical structures made of stone, I was drawn in,” Drew says. producing cast stone on a large scale but that has family values and business ethics at its core,” Paul says. “I think we’ve seen that the more we communicate our goals and our values online and facilitate people’s understanding of what we stand for, it earns us business.” Overall, the workforce has grown to 18 employees at the Wanamingo plant, where they recently built an office addition and added 10,000 square feet to the production facility. As the business grew, Drew became interested in lean business practices by way of Paul Akers’ book 2 Second Lean. Lean practices focus on adding value by eliminating waste, and Drew reached out to Enterprise Minnesota to help identify areas

of improvement. Drew says the “secret sauce” to lean involves various key tenets, including taking an hour every day out of production time for the whole company to meet and share improvement ideas, create a smooth process flow, and ensure everything can be easily visually understood through color coordination, labeling and tool shadows, among other things. “The management/owners/CEOs must drive this home; it’s not a task to pass off like, ‘Here, person X, make us lean,’” Drew says. “Don’t even bother starting if the owners/ CEOs/etc. aren’t going to participate.” Enterprise Minnesota business growth consultant Greg Langfield worked with Drew and the team to develop a list of recommendations that included everything from gathering employee feedback on company culture to labor utilization and streamlining parts of the manufacturing process. “He really appreciated the thoughts about improving throughput,” Langfield says. “For example, when a mold is being filled with cement, nothing else was happening. So, he took the idea to work with a designer to come up with a new method to fill up different molds during that time.” Langfield and Drew agree the benefits of lean practices are numerous. “It creates a fun culture where every human has input and isn’t afraid to bring ideas to the table,” Drew says. “We have nearly doubled gross revenue, and our labor force has only increased 20%.” All the internal improvements will greatly help as Marcstone’s business continues to expand, although the work the company has already completed in its less than 20-year tenure is probably more than Drew or Tom Sr. could have imagined. They have gone

Marcstone’s portfolio includes projects in Bellingham, Wash., Chicago, Ill., and St. Paul, Minn.

from experimenting with mixes in a wheelbarrow to creating top-quality cast stone for dozens of Walmart stores, naval bases, universities, and Raising Cane’s restaurants, among numerous other highprofile projects. “What we’re doing is fun and exciting. I don’t work a day in my life. I’m never watching the clock. Seeing things come together, overcoming challenges, taking out national competition, those types of things are fun,” Drew says. “We’re still on the journey, and actually, the journey has just begun, and we’re continuing to evolve and make improvements throughout our operations every day. I’m looking forward to the next 20 years.” —Amanda Dyslin SUMMER 2022 ENTERPRISE MINNESOTA /

Left to right: Jane Lebert, CDI personnel director, and teen workers Josh Meija, Hemi Reno, and JoAnna Quade

WORKFORCE PIPELINE

Breaking Down Barriers, Opening Doors Owatonna students learn the value of careers in manufacturaing through paid gigs at the companies.

hanks to Minnesota’s Youth Skills Training (YST) program, qualified high school students in Owatonna can now get exposed to high-growth, highdemand career opportunities with local manufacturers — and get paid doing it. “It’s really given our students an opportunity to get out and get that reallife experience,” says Brian Coleman, Owatonna school district’s career pathways navigator. Owatonna Public Schools’ first partner, HVAC manufacturer Climate by Design International (CDI), received its first students in March. “We’ve had so much fun,” says Jane Lebert, personnel director at CDI, “and these young professionals have just knocked it out of the park and brought new energy to our existing workforce.” Right away, students understand that it’s more than a side job. Lebert told her first batch of student workers that they would be treated the same as other CDI professionals, including

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getting business cards. “Their eyes lit up when they filled out their personalized business card form!” Rich Wessels, YST project manager for the Minnesota Department of Labor and Industry, says that the program was long overdue. “It’s truly a pipeline for future talent in these industries, and it really meets the need that we’re seeing out there from employers,” he says. Like many manufacturers, CDI has struggled to find qualified professionals. Since partnering with Owatonna Public Schools, it has hired 12 high school workers in the span of a month. “It’s really quite amazing,” Lebert says, “given the competitive recruiting world we’re in right now.” Right after starting, she recalls, some students requested to come in early or stay late to finish projects they’ve started. Back at school, the program continues to gain steam. Coleman gets at least one student inquiry about YST a day. Some

days, it’s two or three students. He says that the buzz around the program is mostly due to word-of-mouth. “It’s an easy sell,” he says. “It’s pretty much just students talking to other students [about the program]. I’m not selling it, I’m not marketing it, I’m just telling them about the opportunity. And I think we have such a great group of students who are under that 18+ [requirement] and looking for different opportunities than working at the grocery store or in fast food. So, this is such a good deal.” Many students take advanced technical classes while still in school. However, labor laws make it nearly impossible for students under 18 years old to find jobs using those skills. The YST program was created to help address that frustration safely and effectively. “Safety is a big piece,” Coleman says. “Every student has ongoing safety training, and all of the students are doing the OSHA online certification.” Students must meet several other requirements before applying, too, like being at least 16 years old and completing industry-related classes.

Jane Lebert and Patrick Johnson

Employers go through an extensive application process as well. They provide detailed lists of what students will be doing, which tools they will use, and what equipment they will interact with, often with photos. “We have to,” Lebert says. “We’re putting young people into environments they have never been in before with added exposure for risks.… But Rich Wessels made the process so easy; he was just really, really helpful and encouraging.” The relationship with the school doesn’t end once student workers are placed. Lebert and Coleman are in constant communication and meet weekly to see how things are working. The transparency and constant feedback from each party — students, team leaders, project manager, employer — is crucial, Lebert says. To help with associated costs of the program, schools can apply for state grants. If given, those funds can be used to cover student transportation, marketing and promotion materials, and even the students’ certifications, among other things.

They just can’t be used to pay the students’ wages. A big draw for the students, Coleman says, is the chance to explore specific interests. While students at CDI start in assembly, they can later move into more specialized areas, like electrical, welding, or fabrication. “We’re using our assembly positions as the entry level, so they get a good grasp and understanding of the product,” Lebert says. “And then once we’re comfortable, and they’re confident and comfortable in that environment, we’ll start transitioning them into those areas…where we can start helping them hone those skills or develop that background.” Ideally, students will leave with industryrecognized certifications. Wessels says YST programs talk with employers to find out which credentials they recognize and need. “We want it to be meaningful to the employer,” he says. Everyone agrees, though: One of the biggest benefits is opening doors for students who don’t fit the four-year

degree mold. “I think we were pushing students into that four-year degree track for far too long. This program came along at the right time to show there are really great career options that don’t necessarily involve a bachelor’s degree,” Wessels says. Kurt Bear, business developer at Enterprise Minnesota, agrees. Many students don’t realize that there are highgrowth, high-demand careers available now that don’t involve graduating with “gobs and gobs of debt.” The Owatonna YST program is already getting rave reviews. “They’ve knocked it out of the park,” according to Wessels. Always looking to expand the opportunities available to students, Coleman sees a long and steady future for the program in Owatonna. Wegner Corporation will be the second employer to bring on student workers, and Coleman hopes to eventually offer paid work experience in other industries like health care, agriculture and IT. —Grace Bureau

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Nathan Zierden (left) and Chad Butke (right) partner with one another in Aagard’s mentorship program.

MENTORSHIPS

Work Buddies Aagard hopes its upgraded mentorship program will create long-time employees — and perhaps lifelong friendships.

n 2020, Nathan Zierden was hired at Aagard as an intern and assigned a buddy — a more senior employee — to help him gain his footing and orient him to the company and new position. At the time, Aagard, an Alexandria-based engineering company that builds custom packaging automation systems, paired new hires with current employees for only a couple of weeks. Drawing on that earlier program, and mindful of worker retention and quicker proficiency challenges, Sharlo Meyer, director of human resources and organizational development, says the company decided to upgrade to a more comprehensive and enduring mentorship program. Zierden appreciated having a “goto colleague” for any questions that came up as he learned his role in the assembly department. That’s why, when the company launched a more formal mentorship program early this year, Zierden volunteered. The mentee was to become the mentor. “I liked having a friend at work, some-

/ ENTERPRISE MINNESOTA SUMMER 2022

one I was comfortable going to,” Zierden says. “I wanted to be that for someone else as well.” The idea that took shape was to have current employees in all departments volunteer to mentor new hires for six months. A critical element to the success of the program was for mentors to receive periodic leadership training. The program was piloted in late 2021

Aagard builds custom packaging automation systems.

and formally rolled out in January. About 40 of the company’s 280 employees are mentors who are assigned up to two new hires for six months. Meyer hopes to one day have enough mentors to make this a one-to-one program. Mentors are empowered to assist with training their mentees and orienting them to the company and its policies. “We know how overwhelming it can be to start a new job, and we want a welcoming environment for them,” Meyer says. “New hires now have a mentor waiting for them,” says David Lamb, Aagard’s training and recruitment administrator. “The mentor’s primary responsibility is to make the new hire feel at home and build a relationship early on.” Enter Chad Buttke, who joined Aagard’s assembly team as a new hire in February 2022. Working in the same department as Zierden, they were a natural fit for a mentee-mentor relationship. Buttke says the proximity with his mentor has made it convenient to ask questions, including a lot that pertain to the software used in the department. Indeed, Lamb says Aagard intentionally tries to pair new hires with mentors on the same work team to improve production efficiency. The mentors also help with onboarding tips and reminders, everything from how to get reimbursed for safety boots and where to go if you break a wrench to reminders about attending afternoon company meetings. It’s not just the new hires who benefit

from the pairing. Zierden says the mentoring experience has affirmed his own understanding of the importance of processes and procedures. Aagard reached out to Enterprise Minnesota to assist with Zierden’s and other mentors’ training. Business growth consultant Michele Neale put together a slate of sessions to accommodate Aagard’s vision for the mentorship program, including building on a curriculum she built for the company two years earlier. Neale’s sessions focused on social styles and versatility, which includes verbal and nonverbal communication, self-awareness and adaptability to others. Additional sessions focused on job relations and how to approach problems, job instruction and productivity, and time management. “The mentors and prospective mentors are so eager to learn,” Neale says. “They are very insightful, very engaging. I’m just so impressed with this group.”

“New hires now have a mentor waiting for them,” says David Lamb, Aagard’s training and recruitment administrator. Neale praised Aagard for creating a company culture that focuses on employee engagement and satisfaction. Lamb says fostering that culture was a big impetus for the mentorship program. “We work hard to recruit and bring people to the company, and for the most part we do a good job of keeping them, but we wanted to improve.” Lamb says the company wants people to stay for the long haul, to set down roots and develop lasting relationships at work. It’s too soon to know officially how the mentorship program has affected retention, Lamb says, but anecdotally all signs point to positive. “The universal comment I’ve heard so far is, ‘Everybody’s so helpful,’” Lamb says. “Some of these mentorships could develop into lifetime friendships.” Buttke says the experience has been great so far and that he’s also likely to volunteer to be a mentor one day. “I got enough benefit out of it to want to give back,” he says. —Amanda Dyslin

GREATER Living Community Education Business Health Care Employers

MINNESOTA

2020

Top STEM City Minnesota Insurify.com

1 Hour North of Minneapolis/St. Paul 114,000+ people in St. Cloud MSA labor force Fastest Growing Labor Force in MN - MN DEED Shovel-Ready Certified Sites ranging from 2.5 to 79-acres Named one of the “Fastest Growing US Cities” - Nerdwallet Home to the unique Integrated Science and Engineering Laboratory Facility at St. Cloud State University used by global market leaders such as 3M Access to over 30 programs to help your business with funding training initiative, product development, and capital expenditures More than 2x the national average of CNC machining jobs, over 400 resident industrial engineers, and over 300 regional manufacturers

Cathy Mehelich

Economic Development Director cathy.mehelich@ci.stcloud.mn.us (320) 650-3111

www.ci.stcloud.mn.us

SUMMER 2022 ENTERPRISE MINNESOTA /

John Ihrke knows implementation of automation is never a one-size-fits-all endeavor.

Inside Enterprise Minnesota

An ongoing series.

WORKFORCE MULTIPLIER

Leaning Into Automation John Ihrke wants manufacturers to multiply their workforces without adding to their payrolls.

inkering — that’s how John Ihrke got started in his career. While still a youngster, he was a go-to person for help on farms near his small hometown in southern Minnesota and among his family and friends. Ultimately, he became an engineer. But it was that time he spent learning how things work —

/ ENTERPRISE MINNESOTA SUMMER 2022

by taking them apart — and engaging with the mechanics of organizations and leadership — by becoming a Boy Scout and then an Eagle Scout — that were so valuable to his path as he matured. Now Ihrke brings years of expertise in lean manufacturing to his current position as an Enterprise Minnesota

business growth consultant. In addition to his extensive experience in a variety of manufacturing companies, his colleagues say Ihrke brings trustworthiness and honesty to the work environment. Through listening, planning, and reenvisioning enterprises — one by one — Ihrke strives to make things better for the state’s manufacturers. For instance, he says he’s constantly on the prowl for ways to help manufacturers make automation a workforce multiplier. Harnessing the power of automation offers manufacturers of different types and sizes a variety of solutions, adapted on a company-by-company basis. With automation, Ihrke says, “The three Ds is what we want to focus on: [tasks that are] dull, dirty, and dangerous. Those are three things that people do not want to do. And we don’t want people doing those tasks either because then it’s hard to retain them.” Automation may also free up employees to work in safer, cleaner environments, and help them feel satisfied that they have contributed to the good of the company while earning their paychecks. John Connelly, vice president of consulting for Enterprise Minnesota, says Ihrke combines keen listening skills and strong analytic strengths to help him create customized solutions for manufacturers. “We are always working in the gap between where you are and where you want to be,” he says. Similarly, establishing the relationship of deep understanding and mutual trust between consultants and manufacturers also requires a commitment of time and effort from both sides. The relationship must begin on a firm foundation in a manufacturing company, however. “The only place automation belongs is in an [established] robust process,” Connelly says.

VESSA is more than a town in Greece

Ihrke thinks about helping clients forge forward through VESSA, an acronym for key steps in continuous improvement that lead to automation.

• Value stream • Eliminate waste • Simplify • Standardize — i.e., do it the right way, over and over until you get it right • Automate

Never a one-size-fits-all solution, automation results from analysis of an individual company, its context, and circumstances, Ihrke says. Moreover, if you automate chaos, you’ll only create more chaos. By instituting lean practices, reducing waste, and simplifying the work on the line first, the manufacturer should become robust enough to consider possible automation actions. Recognizing that your current workers know your company’s processes firsthand provides a powerful reason for involving them in the process. Whether examining a company for possible areas of improvement; launching a new assembly line that takes advantage of

CELEBRATING

OF CLIENTS & COMMUNITY

With automation, Ihrke says, “The three Ds is what we want to focus on: [tasks that are] dull, dirty, and dangerous. Those are three things that people do not want to do. And we don’t want people doing those tasks either because then it’s hard to retain them.” standardized, streamlined processes; or perhaps a transformation that takes advantage of artificial intelligence (AI), managers should see that some form of automation holds great promise for boosting the bottom line. Close to home, manufacturing supports more secondary jobs than any other sector that Ihrke knows about — and improving the quality aspect of these operations is key not just for a company but also for its community. Ihrke finds fulfillment in helping manufacturers, who are integral to the economies of small town and rural areas. “It is so important to me to revitalize rural America,” he says. —Allison Jensen

Ready to go from thinking it to doing it? We’re ready to help. In banking and business, relationships matter more than ever. Talk to a Bremer banker today. Understanding is everything. bremer.com

SUMMER 2022 ENTERPRISE MINNESOTA /

Sue Loomis (left) and James Thomas (right) recently joined Enterprise Minnesota.

NEW HIRES

From Medical Devices to Floral Displays New employees bring a diversity of experience to Enterprise Minnesota.

ames Thomas and Sue Loomis, two professionals whose experience spans medical devices to floral displays, have joined the staff at Enterprise Minnesota. With 20 years of industry experience, Thomas is a business growth consultant who specializes in quality management systems (QMS). “QMS is not just a quality system, it’s a business management system that helps you develop and grow your company moving forward,” Thomas says. “It really

/ ENTERPRISE MINNESOTA SUMMER 2022

ties into Enterprise Minnesota’s mantra of helping businesses grow profitably.” Enterprise Minnesota uses the ISO business management system, both internally and with clients. Thomas worked most recently as an independent business consultant. Often driving cross-country to connect with clients onsite, he helped companies of all sizes analyze market shifts, refine supply chains, and meet industry standards. His interest in quality management has led him around the world. He’s

implemented ISO systems in China to Denmark to Ireland, revitalizing all types of operations. He’s worked with Mueller Industries, Benteler Automotive, Siemens Wind Power, and most recently Nilfisk. Since returning to the U.S., Thomas has taken on some interesting projects. A few years ago, he provided support for three successful space launches on key components of NASA, Boeing, SpaceX, and Lockheed Martin, working directly with the subcontractors and suppliers. However, he says that his biggest achievement was helping a startup achieve 3,000% growth in just two years, becoming a $450 million business nearly overnight. Most of all, Thomas enjoys working oneon-one with clients — preferably while on the manufacturing floor. His interest and enthusiasm make Thomas uniquely suited to working with clients, according to John Connelly, Enterprise Minnesota’s vice president of consulting. “For a number of people, the quality management system is an obligation; it’s something they have to get through,” he

says. “For Thomas, it really is a key point for having a business get stronger and positioning a business to grow. His passion about that is obvious, and I think it helps clients see that he’s committed to their best interest in deploying the ISO.” “I try to be reserved,” Thomas laughs. “But when we start getting to the information about quality management, I’m very bubbly. It’s like, ‘Hold on. If I’m speaking too quickly, let me know!’” Loomis joined Enterprise Minnesota last December, resolving a long search for a senior accountant. Having spent 26 years with her family’s floral display business, Loomis brings fresh eyes and big-picture thinking to the tight-knit financial team. “She asks good questions,” says Pat Vasatka, vice president of finance. “She takes the initiative on getting things done. She’s willing to step up and say, ‘Could we do it this way?’ It’s really refreshing.” Loomis says she’s “worn a lot of hats” throughout her career. She started out as an accountant in her family’s floral display business but stepped in when needed to manage more than the finances. When something had to get done, she told Vasatka, she went out and did it, whether it was fulfilling an order or handling customer service. Her get-it-done attitude and small business experience give Loomis a unique perspective on the challenges facing Enterprise Minnesota’s clients. While Loomis wasn’t looking for a new role, a friend reached out to her about the opening while she was transitioning away from her position at Floral Merchandising Systems. It was a combination of luck (and a bizarre string of mutual connections) that brought Loomis onto Enterprise Minnesota’s radar. Vasatka had mentioned her search for a senior accountant to a fellow church member; that church member passed it onto his friend, who happened to know Loomis. More than anything, Loomis is happy to be combining two joys: supporting Minnesota businesses and accounting. So far, she says, she loves the variety of both work and people. “My day goes by really, really fast,” she says. “Sometimes I’ll look up and it’s like, ‘Oh my goodness, it’s already the end of the day!’” —Grace Bureau SUMMER 2022 ENTERPRISE MINNESOTA /

Four Questions

INNOVATIONS

Kingshuk Sinha – Professor and Chair of the Supply Chain and Operations Department, Carlson School of Management

issing products from Target’s shelves often lead people to think of supply chains. When you think of supply chains, it’s much more complex. I see a product as a bundle of goods, services, and experiences. You don’t create a car; you create a community around a car. There’s design and development, and then manufacturing. You want to make sure you can produce in high volume, reliable, and replicable quantities. In this day and age, you’re not doing it alone. Whoever does whatever best wherever does that specific task. I’m deriving competencies from my suppliers. We are in this together. When I pivot my design, I need to make sure everyone knows. Keeping it close to my chest is from a world in the past. Production should be integrative, inclusive, and mindful of who does what, where. Then there is outbound logistics. How do I now deliver that product to the consumer? The last thing I need to understand is how to return the product should something go wrong. I have to worry about distribution centers, multi-modal transportation — trucks, rail, ships, air. That’s why we have the C.H. Robinsons of the world. There is an enormous number of bottlenecks and inefficiencies, and I’m thinking about all of this simultaneously. How can things like COVID or the current Ukraine situation disrupt the global supply chain? Great question. I think about this holistically and see four “Cs” currently in play: COVID-19, climate change, conflict and cyberattacks. All four of them are currently converging. I would venture to say the mean time between any of these episodes is getting shorter and shorter. If you think in terms of COVID-19, we are not out of the woods yet — it’s raging

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in other parts of the world. In fact, COVID-19 and the conflict in Ukraine are very intertwined because only 30% of the people in Ukraine were vaccinated. COVID-19 took capacity out. So long as climate change is in the spotlight, we pay attention, but those of us in supply chain, we live it. And now the Ukraine crisis has come along. The region is the breadbasket, and one of the challenges we are beginning to experience is food shortages. The other thing that is

happening, which sometimes we forget, is the large human migration. This is all supply chain. Humanitarian logistics is a major part of what we do. This is adding inflationary pressures on items fundamental to Maslow’s hierarchy. We need certain basic stuff. It’s not just the car not coming out of General Motors. We have never encountered anything like COVID. These were deemed as Black Swan events, right? But this is becoming a new normal Black Swan. Climate change is not going away. War is not going away.

Dr. Kingshuk (“KK”) Sinha is chair of the Supply Chain and Operations Department and the Elmer L. Andersen chair in Sustainable Supply Chain at the University of Minnesota’s Carlson School of Management. With more than 5,000 students in 13 degree programs and 58,000 alumni in 100+ countries, the Carlson School has educated future business leaders since 1919.

And, although this is talked about less, cyberattacks are happening in ways that you cannot even imagine. We are staying a bit ahead, so it’s still not knocking off our infrastructure, but you cannot take the guard off. What are the challenges and opportunities for supply chain leaders in our state? We can make Minnesota a magnet for supply chain talent development. We have at least four major sectors here: med device and health, food and agribusiness, retail, and global manufacturing. These are not boomand-bust industries. The numbers of talent needed for running supply chain operations is pretty large. We need to develop the capability — and the thinking. You cannot just be in your silo. You have to think of your suppliers’ suppliers and your customers’ customers. Even small manufacturers are fulfilling demand from all kinds of places. We hear the phrase, “We are all

in this together.” That’s literally what we do. One thing that is wonderful about the Twin Cities is a lot of our leaders were also very mindful of the community. We have to straddle between the forest and the trees. That’s what is

I think about this holistically and see four “Cs” currently in play: COVID-19, climate change, conflict and cyberattacks. All four of them are currently converging. unique about supply chain thinking and training. One moment you’re sitting in the supreme command, thinking geo-politics, and the next moment you’re in the trenches. Strategizing and executing go hand in hand. In our program, we want to make sure

HELPING SMALL BUSINESSES

Make A Big Difference

students have global orientation, embrace strategic thinking, consider social responsibility, and have some understanding of data analytics to ensure they pick and choose what is relevant. And we do this with students who are not data science students. Is there a message that we didn’t touch on that you’d like to pass on to our readers? There’s much in our community to be grateful for, and the onus is on us to take what we have inherited and give back more to make our community stronger and better. It starts with looking at supply and demand of our own basic needs and make sure they are fulfilled and remain fulfilled. These are extraordinary times, and we should turn a lot of the challenges we have into opportunities. I feel blessed to be in a profession and discipline that, by definition, allows us to think both expansively and inclusively at the same time.

MBFC was honored to be featured on a recent Congressional visit from Rep. Pete Stauber and Brian McDonald of the MN SBA District Office at Lindar Corporation in Baxter, one of the many manufacturing clients we serve! This statewide celebration tour highlighted the local successes of the SBA 504 loan program—which has seen an enormous increase over the last year. Cheers to continued Small Business Success! Learn more at MBFC.org.

Serving Minnesota, North Dakota and western Wisconsin. We’ll come to you! MBFC.org | Offices in St. Cloud ● Minneapolis ● Detroit Lakes ● West Fargo | 320-258-5000

SUMMER 2022 ENTERPRISE MINNESOTA /

H&S leaders are “jacks of all trades,” too busy running the company and Halfmann Farms to worry about titles. Pictured in front of H&S headquarters on the Halfmann farm just north of Stephen, Minn. Left to right: LeRoy Hougard, Brian Halfmann, Craig Halfmann, Brent Halfmann, and Darin Adolphson.

Terog’s leadership team boasts 182 combined years of dedication and service. BACK Left to right: Jim Rogus – president (22 years), Butch Kraska – sales (30 years), Shawn LaQue – operations manager (2 years), and Joe Rogus – engineer (20 years). FRONT Left to right: Jean Hendricks – logistics (33 years) and Becki Sczepanski – office manager (36 years). Not pictured: Lee Bukowski – sales (39 years).

Small Town Success

Deep Roots,

NEW GROWTH Next generation leaders propel two thriving manufacturers based in tiny Stephen, Minn., into their next 50 years.

ive decades ago, two agriculture-related businesses took root in the rich farmland of northwestern Minnesota, founded by farmers who invented products that solved common problems. Today, both H&S Manufacturing and Terog Manufacturing are thriving multi-generational corporations in Stephen, Minn. (population 645). H&S manufactures a variety of agricultural implements, with beet carts, sprayers, and cultivators as top sellers. Terog manufactures rollers, sprockets, and hitches that are used in a variety of machinery, including H&S beet carts. These two small-town, family-owned operations have followed similar paths from the early inventions of their founders to the companies’ expansions and the second and third generations that now

lead the two companies. Both Terog and H&S are anchored by a pair of brothers: the Rogus brothers and the Halfmann brothers, both of whom worked in their families’ businesses while growing up in Stephen. The brothers attended the same school, and all four played football for Stephen-Argyle’s legacy football program — a program that won seven state championships between 1999 and 2009, including five consecutive state championships (2003-2007). Stephen-Argyle still holds the state record for consecutive wins at 76. After high school, both Rogus brothers studied engineering — Jim at the University of Minnesota Crookston and Joe at Alexandria Technical and Community College. Brent and Brian Halfmann both earned

By Sue Bruns

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SUMMER 2022

degrees in business from the University of North Dakota. The sets of brothers returned to Stephen to apply their experience and knowledge in their current leadership roles at Terog and H&S. Their days of playing football have been replaced with friendly rivalries on the Stephen Riverside Golf Course or at the Stephen Curling Club, but they’ve built on their fathers’ and grandfathers’ beginnings. Terog Manufacturing has long been a parts supplier for its Stephen, Minn., neighbor H&S Manufacturing. Whether through a genetic predisposition to create things, the work ethic instilled by growing up on a farm, or could harvest more potatoes more efficiently? They would. the discipline and winning attitude practiced on the Stephen-Argyle The rollers caught on, Jim Rogus says. “So [Tom] moved football field, these new generations of executives at H&S and into sprockets and just kept growing.” Terog (named for Tom Terog are leading their companies as they continue to expand, thrive Edward Rogus’s initials and the first three letters of his surname) and find opportunities to work together. was incorporated in 1971. Rollers, now in many sizes and configurations, still account for about a fourth of Terog’s business. THE ROOTS – EARLY DAYS In 1974, Tom Rogus moved back to Stephen, bought an old OF H&S AND TEROG blacksmith shop in town, and set it up with In the late 1960s, Paul Halfmann was growing used equipment, expanding and upgrading as Both Terog and H&S potatoes and beets on a farm just north of he could. Stephen. He and his top farm hand, John Jim Rogus remembers the early years, when are anchored by a Szklarski, built an electric skid-steer loader to his mother, Venita, in addition to raising five pair of brothers: the move potatoes into the storage shed without children, also made deliveries. “When we the noxious fumes of a gas-engine loader. Rogus brothers and the were young, my mom would take all of us to They manufactured and sold the loaders to Minneapolis in the back of a one-ton van to pick Halfmann brothers, neighboring farmers and incorporated in 1971 up steel. She’d put it in between us” and haul it as H&S (H for Halfmann, S for Szklarski). all the way back to Stephen (365+ miles). both of whom worked Halfmann’s farm is still the site of the in their families’ operation today. SECOND AND THIRD The loaders had a limited sales run, but GENERATION TEAMS BRING businesses while Halfmann continued to farm and started AND EXPERTISE growing up in Stephen. EXPERIENCE building other agricultural equipment. In the After studying engineering, Jim and his brother 1970s and 1980s, H&S’s row-crop cultivators Joe, Terog’s second generation, returned to and band sprayers were the company’s Stephen where Jim manages the business and primary products. Next came pull-type broadcast sprayers. In the Joe is head of engineering. 1990s, beet carts debuted and became top sellers. Since 2015, Less than 10 miles north of the Terog plant, Paul Halfmann’s son H&S’s ridging and de-ridging tillers have been popular. And Craig worked on the farm and in the shop when he was young. As today, the company’s sprayer with a 132-foot boom is another top H&S grew, Craig ran Halfmann Farms, Inc., part of the American seller. Crystal Sugar Company’s farmer-owned co-op. But at age 30, he As Paul Halfmann was starting H&S, Tom Rogus was studying was thrust into the role of owner/manager of both the farm and machine tooling at Dunwoody Institute of Technology in H&S when his father died of a heart attack in 1984. Over the years, Minneapolis after serving in Vietnam. Craig has expanded H&S’s business tenfold. His wife Marlys While interning in Minneapolis, Tom saw a part that looked handles the books. similar to one he saw as a kid on a potato harvester. Tom recalled Today, their sons, Brent and Brian, represent the third generation “pounding and cussing on a roller [after getting] off the tractor [to] of Halfmanns and work with Craig to run both Halfmann Farms yell at the part.” He realized the imperfect design hadn’t changed and H&S. Darin Adolphson, Craig’s son-in-law, joined H&S in much since then and wondered if a roller with bearings might 2017 as general manager when he and his family moved back to the have a market. area. With degrees in civil and structural engineering and several Rogus worked out of his garage in Minneapolis, designing parts years of experience working with steel construction in Minneapolis and making prototypes. Eventually he tested the marketability of and Grand Forks, Darin’s background brings another element to his rollers at a potato show in Grand Forks. Would customers pay H&S. (Darin also played on the 1999 championship football team three to four times more than the competition for a product that with Joe Rogus.) SUMMER 2022 ENTERPRISE MINNESOTA /

CONTINUED GROWTH

Terog’s campus in Stephen today covers about a city block with plans to expand. The oldest part of the blacksmith shop is still used; other property designated for future expansion was previously owned by Halfmann Ford, run by Craig Halfmann’s brother. At first, Terog marketed mostly to local OEMs and area dealers in the Red River Valley but then expanded west to Idaho, Washington, and Oregon as the company’s reputation grew. Jim says the nose cone roller, which differentiated and improved on what had been used for years, kicked off the business. From there, “we just mushroomed out to California, then more on the east coast and the southern states.” Terog also ships parts to Canada, Europe, and Australia. Today, Terog manufactures its products under the brand name Black Ace. About 80% of Terog parts are used in agriculture, H&S Manufacturing attaches Terog hitches to the farm including idler wheel rollers, machinery it manufacturers in northwestern Minnesota. sprockets, friction drive rollers, shakers, torque limiter clutches,

Over the years, Craig Halfmann says, H&S has tapped into Terog’s expertise and machining ability. “We’ve looked to them to help us be more efficient, finding niches where they can help.” bearing protectors, and articulating hitches. Black Ace parts have earned a reputation for performing better and lasting longer than those of their competitors. Terog’s customers include John Deer, Amity Technologies in Fargo, and Spudnik in Idaho. In addition to agriculture, Black Ace parts are used in automation, construction, mining, timber, and more. The company produces some 60,000 sprockets per year. 22

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SUMMER 2022

“There aren’t many sprocket manufacturers in the U.S.,” Jim says.

WORKING TOGETHER

Craig Halfmann says that although the two companies incorporated the same year, his company didn’t use Terog parts regularly until H&S started producing sugar beet carts in the early 1990s. “Then we ramped up from there.” Over the years, Craig says, H&S has tapped into Terog’s expertise and machining ability. “We’ve looked to them to help us be more efficient, finding niches where they can help. For keyed drive shafts, for example, Terog has CNC machines that can do things more efficiently. It also helps H&S out with labor shortages.” “H&S is approximately 1% of Terog’s total business,” Jim Rogus says, “but they’re our largest customer in a 50-mile radius. As long as I can remember, we’ve supplied parts to H&S, and any time we’ve needed something fabricated they’ve always been there to help us out. They’ve been great to work with.” There are also times when the two companies work together to design

products. Jim says, “Darin and Joe — old classmates from high school — work together. Darin will present Joe a drawing of what H&S needs, and together they’ll modify things to make it feasible to machine or manufacture.”

H&S: MADE TO ORDER

H&S equipment is varied and customized. The lot outside the company’s production buildings isn’t stocked with inventory. Rather, orders for customized beet carts, sprayers and other equipment are filled as needed and then shipped across the U.S. and Canada. Because cleaner beets mean more profit, demand for H&S’s beet-related products has increased. And the company has responded by expanding its product lines. The rich black soil of the Red River Valley is ideal for growing beets but can be problematic during a rainy harvest. H&S offers a choice of wheels or tracks on the harvesting carts that work even in muddy fields. The company’s water kit options allow for quicker, better cleaning of the carts between loads. H&S also manufactures customizable roll-off, rear-load, and front-load dumpsters. Recently, the company has ramped up waste industry items and has even partnered with a Seattle business to branch into composting containers that are custom designed for larger operations (like school cafeterias with lots of food waste).

OPERATING IN A SMALL COMMUNITY

Both Terog and H&S face the same issues as manufacturers in any rural area: getting materials on time from vendors and workforce shortages. Recent world issues and COVID-19 have created challenges for both companies. “It’s a struggle to get things from vendors in a timely manner,” Adolphson says. “Uncharacteristic at this time of year, we’ve begun some purchasing for next year’s production. Rubber, hydraulic, and electronic items are on the list of long-lead items.” Fortunately, H&S hasn’t had problems getting Black Ace parts. “Terog is our best vendor,” he says. “We buy quite a bit from them — Terog shafts, sprockets, rollers.” Hiring new workers can also be a challenge. Craig Halfmann says, “We both

About 80% of Terog’s Black Ace parts are used by agriculture equipment makers such as H&S Manufacturing. Other industries served include automation, construction, mining, and timber.

face similar challenges being in a small community. We try to help each other out wherever we can, whether it is sourcing raw materials, finding ways to recruit new employees, or finding different and more efficient ways to manufacture. One of the big advantages of being in a small community is knowing and trusting each other well enough to lean on one another. Facing similar challenges together helps foster ideas that you may not have thought of alone.” Both companies value the many employees who have worked for them for 20 to 40+ years. Of Terog’s 35 employees, about 15 have worked there for over 25 years; five or six, over 35 years; and one sales force member for 40 years. Most live within 30 miles of Stephen. Three different four-day/10-hour shifts are available to reduce the commute. Jim Rogus believes his workers stay at Terog because they feel valued and enjoy the small company atmosphere. “We have a great core and have been steadily growing,” he says, “but it’s always difficult trying to find those extra one or two workers.” Likewise, several of H&S’s 15 employees have been there for decades. LeRoy Hougard, office manager, has over 30 years of service, managing duties in sales, purchasing, parts and service. Everyone at H&S, including the managers, performs more than one

“As long as I can remember, we’ve supplied parts to H&S,” Terog’s Jim Rogus says, “and any time we’ve needed something fabricated they’ve always been there to help us out. They’ve been great to work with.” specific job. Nine of H&S’s employees are shop workers. But it isn’t assembly line production. Rather, certain bays in the shop can be switched out for different productions or for custom jobs. The fulltime assembly person, painter/material handler, and seven other fabricators adjust to perform various tasks as needed, from sheering sheet metal to punching holes, cutting structural shapes, operating the press break, building assemblies, and welding. Adolphson says almost every product H&S makes involves customization. “We’re a build-to-order type of manufacturer.” The H&S team can manufacture a broadcast sprayer or beet cart in about three weeks. Adolphson

credits “a core group” of H&S employees for much of the company’s success. “They’re not scared to work, oftentimes working overtime in the summer and fall. Everyone here enjoys being a part of new product development and having a voice in the process of our small operation.”

CAREER FOCUSED EDUCATION

A trend back to vocational education and counseling is helpful for rural manufacturers. Today’s high school students are being introduced to more careers that can be learned on the job and skills that lead to certifications and good-paying jobs through technical colleges. Both companies have a high school student working in their plants right now. H&S employs a high school junior who attends North Valley Vocational Center in Grafton and works as a welder. Another student works at Terog through a high school youth training program. The H&S assembly team also includes a female welder, as women are becoming more aware of good-paying opportunities in manufacturing too. “Being able to provide career opportunities for people in our community is the most rewarding,” says Craig Halfmann. “If there are no opportunities, there are no people. It’s great to see families move back to the Stephen area to raise their kids. Some realize the freedoms of a rural lifestyle cannot be duplicated in the city.” SUMMER 2022 ENTERPRISE MINNESOTA /

Supply Chains

Heating Up Sauna360, the nation’s leader in saunas, stays true to culture while offering luxury BY products and ROBB weathering tough MURRAY challenges.

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hen the folks at Sauna360 bring in dealers to tour their Cokato facility, they have a secret weapon — one that touches on history, nostalgia, small-town values and, frankly, oddity. The manufacturing building is a few miles north of town, and if you blink, you’ll miss it (as this writer did). From the road it looks like just a tiny shack on a rugged patch of land near the intersection of two rural highways, or what the locals call Temperance Corner. Built in 1868, this shack — the company’s secret weapon — is the oldest sauna in North America. “It’s part of our heritage for sure,” says Mark Raisanen, the company’s director of sales and marketing. “We’ll bring 40 to 50 dealers in here for training. And we always say, ‘Today you’re going to see North America’s oldest and newest saunas.’ When they’re on the loading dock, we say, ‘That’s the newest one going out the door.’ And then we go north of town, stop the bus and say, ‘And now here’s the oldest.’” It’s no accident that North America’s oldest sauna is in Cokato. The concept of the sauna was invented in Finland, and Cokato is one of the Midwest’s hotbeds of Finnish DNA. With a population around 2,700, Cokato is one of the top — if not the top — manufacturers of saunas in the world. Saunas are becoming increasingly popular. A handful of studies out of Finland show frequent sauna use can go a long way in improving health. They’re also a great way to pamper yourself and just plain fun. Sauna360 manufactures an array of saunas ranging in price from around $6,000 to $30,000 or more. The company offers free-standing units in a multitude of sizes as well as custom-designed units to fit almost any space. While such a product may seem like a luxury item, Sauna360 actually has seen sales increase over the past few years and has a waiting list for units. The company also has supply chain issues — the kind that aren’t going away anytime soon. With most of the units built in China, Sauna360 is at the mercy of a shipping container shortage that is inflating lead times and driving up prices.

But with a company literally built on the back of its Finnish heritage and a workplace culture built on competitive wages and employee buy-in, Sauna360 looks to be well positioned to weather shipping issues.

WE NEED A FINN

In 1984, the Finns came calling. It was important to the company that someone with Finnish heritage sell a product that has been made in Finland for literally thousands of years. After a bit of looking, Keith Raisanen of Cokato (Mark’s older brother, who retired a few years ago) was

“Our plan is to become the county’s most attractive employer by offering development opportunities for current employees and new staff bringing in other experiences and competencies.”

—Pekka Lettijeff, Sauna360 CEO

brought on board. The Tylö company, as it was called in 1984, dates to 1919, but the concept of a heated room — or cave or hole in the ground — goes way, way back to northern Europe. No one knows exactly where the first sauna was built, but several countries claim to be the concept’s originators, including Estonia, Latvia, and Russia. But it’s hard to argue with Finland, though, which has almost as many saunas as it has people — 2.5 to 3 million saunas and about 5 million people. In the U.S., by comparison, there are an estimated 1 million saunas, with a population of 329 million. To this day, the word “sauna” is the only Finnish word in English-language dictionaries. The Finns pronounce it “SOW-nah,” the first syllable rhyming with “wow.” When the Tylö company tapped Keith Raisanen, the Cokato location sold both SUMMER 2022 ENTERPRISE MINNESOTA /

It’s no accident that North America’s oldest sauna is in Cokato. The concept of the sauna was invented in Finland, and Cokato is one of the Midwest’s hotbeds of Finnish DNA. With a population around 2,700, Cokato is one of the top — if not the top — manufacturers of saunas in the world.

sauna heaters and full sauna kits, though the majority of its sales came from the heaters. Over the years, the company transitioned into selling mostly sauna units, but they also still sell heaters. Sauna360, which is headquartered in Finland with a division in Sweden and a North America division in Cokato, has become one of the largest — if not the largest — sellers of saunas in the world. The free-standing, pre-sized units manufactured in China comprise the bulk of the company’s sales. These kits, which are shipped directly to consumers for inhome assembly, come in a variety of wood and accessory options. (For example, they have a full line of salts that change the aroma inside the unit.) The Cokato plant manufactures all the custom-built units, and this is where the manufacturing of saunas gets interesting. A sauna can be built to fit just about anywhere in your home. Are you and your spouse empty nesters and now you want to turn that extra room into a sauna? Just send the company the measurements. Got a 26

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nifty space in the cupboard under the stairs? Just send the measurements. Once Sauna360 has them, and is certain the space is suitable for its product, the company gets to work cutting a custombuilt unit that fits within an eighth of an inch of any stud. Saunas need the right kind of breathable wood that can expand a bit when heated up, such as British red cedar, Canadian hemlock and Nordic white spruce, which is sourced in Finland. For the benches, Sauna360 uses a wood called abaci (African whitewood), which doesn’t get hot to the touch. And it’s never treated, at least on the inside. “You need and want the wood in the sauna to breathe,” says Raisanen, who once did a DNA test that came back 98% Finnish. “So, you don’t treat it. If it’s in an outdoor setting like a patio, then you have to paint it or stain it right away. But on the inside, you leave it natural. That’s one of the reasons why we select the woods we do.” Sauna360 also installs large-scale saunas in commercial settings, such as fitness centers, and luxury in-home settings. In its literature, the company highlights the bathroom-turned-spa they transformed for Osmo Vänskä, conductor of the Minnesota Orchestra and one of Minnesota’s most famous Finns. Sauna360 offers both dry heat and infrared heat saunas as well as steam rooms, and each one is customizable — from wood trim and interior lighting to bench arrangement and door styles. You can also pair your unit with the company’s wide array of body scrubs, seat covers, bath robes, and more. Sounds luxurious. And it is. But recent

studies of this ancient form of therapy confirm it is a great addition to anyone’s wellness routine.

GOOD HEAT

A 25-year study of more than 2,300 participants at the University of Eastern Finland showed regular sauna use improved cardiovascular health among study participants. According to the popular health website Healthline, “When you enter a sauna, your skin temperature rises, your pulse rate soars, and your blood vessels become more dilated. This happens as your heart begins to pump more blood. Of course, you also begin to sweat.” As heart rates go up and blood vessels dilate, blood flow to the skin increases, improving blood circulation. Then the sympathetic nervous system ramps up as it works to maintain your body’s temperature balance. Endocrine glands get involved. And the body’s reaction to the heat desensitizes the user to pain and makes him more alert. A feeling of joy may set in. The heat relaxes muscles, including those in the face and neck, and ushers in a feeling of euphoria — one of the biggest benefits of sauna use. Sauna use may also help in recovery after exercise. When blood vessels dilate, blood circulation speeds up the body’s natural healing process. At the same time, the deep sweating taking place pushes out harmful toxins such as lead, copper, zinc, nickel and mercury. One study conducted in 2016 found regular sauna use may reduce the risk of Alzheimer’s and other forms of dementia. Additionally, sauna use can help relieve stress, improve

sleep, beef up the immune system, burn calories and cleanse skin.

Feeling the pinch in its profits, the company has had no choice but to respond, beginning with a surcharge to each order. Sauna360 has also raised prices across the board between 20 and 40%. Sauna360 CEO Pekka Lettijeff, who oversees operations in Finland, Sweden and Cokato from his office in Wyborg, Finland, says the shipping container problem is unique to North America, adding that the leadership team here has done an admirable job navigating it, the pandemic, and other supply chain issues. “The Cokato team knows the sauna business. The team has tens of years of individual experience,” Lettijeff says. “During the pandemic, our goal was to keep our people healthy and to not stop manufacturing and shipping to our

because of how busy it is. The wellness industry has been taking off like crazy for the last couple of years. So, it can be THE CHINA PROBLEM overwhelming. It can be stressful. But at Sauna360 has a problem, and it has nothing the same time, I can’t even tell you the to do with heat or health. The company is last time I called in sick,” Coles says. “If I paying four times what it used to pay to didn’t love working here, I wouldn’t come ship saunas from its manufacturing facility here every day.” in China to Cokato. It can all be traced back She says it’s about the people, and about to a tangled web of factors, most notably working for a company that feels like it’s the unavailability of shipping containers. on an upward momentum swing. There are The saunas manufactured in China make more people on staff, more saunas going up most of Sauna360’s revenue, and up out the door, more money coming in. until a year and a half ago, the company was “We went out and handed out candy accustomed to paying between $4,500 and hearts for Valentine’s Day for no other $5,000 per 40-foot container. Then it went reason than to put a face with a name and to $7,000. Then $10,000. Today, it’s not to just have people smile for a day,” Coles uncommon to pay $25,000 per container. says. “Did it work? Yes, it did. They had to “What used to cost $5,000 to bring a smile before we gave them the hearts. So, container in is now $25,000 it’s just fun stuff like that. to $30,000. It’s crazy,” says Getting people involved, Mark Raisanen. “We’ve seen feeling like they’re a part of a surge in (custom-built) the team.” sauna sales because of that. Coles is a great example of People are asking, ‘Why a company perk: Sauna360 buy a portable one from employees get a discount on China when I can get one a sauna. that’s made in Minnesota for “I love it, actually. I have almost the same price?’” that one,” she says, pointing The company has seen to a mural-sized image on periodic increases before, the wall of the Sauna360 including during the Chinese conference room. “Mine’s Mark Raisanen, director Diane Coles, New Year. Everything a little fancier. It has a twoof sales and marketing controller shuts down in China for toned interior, but it has the celebration, so shipping all those windows. It’s the prices get bumped up. Serenity. I have it inside But these recent price hikes have been customers. I think this went very well. A my basement. If it was outside, I probably staggering. great job by the Cokato team.” wouldn’t use it year-round. … I like being The pandemic heightened the demand As far as workforce issues go, Sauna360 able to sit and just kind of ‘be’ for a few for shipping containers. With Amazon and is in the same boat as nearly every other minutes. It’s nice. It’s calming.” other online retailers getting uber busy with manufacturer in the state. Workers are hard people stuck at home ordering everything to come by, so they’ve tried to raise wages FUTURE GROWTH? from gadgets to home improvement to not only entice people to apply but to While many companies have growth and supplies, the shipping industry also got also retain current workers. expansion goals, Sauna360 has a realistic extremely busy. Just a few years ago, starting salaries outlook. Its footprint in Cokato could There’s even an issue within the issue: were in the $14 per hour range. Today, expand, but some real factors are putting With so many products being shipped from that number has increased substantially the brakes on that. China — the world’s largest manufacturer to a figure between $20 and $25 an hour. “We can’t grow as fast as we want. of retail goods — there hasn’t been enough Sauna360 employs nearly 100 workers in Multiple factors are contributing to this,” vessels to ship the empties back to China. an environment with stiff competition for Lettijeff says. “We have had times of How can they solve the issue? More the labor pool. scarce resources and business pressure, empties in China would help. More vessels Competitive pay and good benefits help and we have had issues with logistics, available to haul the empties back from the Sauna360 get people in the door, but one as we are quite a distance from greater U.S. would also help. Fewer people relying of the things that keeps them there, Mark Minneapolis. There is a lack of skilled on goods shipped from China would help Raisanen says, is company culture. workers, and we’ve had problems attracting too, but that’s highly unlikely. Until one of new competencies. Our plan is to become those things happens, there’s going to be a COMPANY CULTURE the county’s most attractive employer by glut of shipping containers — a glut that is Diane Coles, Sauna360’s controller, says offering development opportunities for currently extending lead times to 25 weeks working at this company is just plain fun. current employees and new staff bringing for Sauna360’s China-made products. “There are days where it’s overwhelming in other experiences and competencies.” SUMMER 2022 ENTERPRISE MINNESOTA /

Facility Expansions

MAKE SURE YOUR SPACE IS MAKING MONEY,

NOT TAKING MONEY

As supply chain uncertainties force companies to accumulate necessary parts and material, manufacturers are looking to grow. By Peter Passi

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After building a 50,000-square-foot addition in 2020, Chris Haugen, vice president of supply chain and services, says Douglas Machine is looking to move into more than 145,000 square feet of additional space next year.

he pandemic hasn’t put much of a dent in the lawn mower blade business. Grass still grew. People spent more time outdoors. And stimulus checks made it easier to consider a new mower. Whirltronics Inc. has maintained an average annual growth rate of 22% for the past three years, but the manufacturer and its 120-some employees have sometimes strained to keep pace with demand, especially lately, says Jennifer Lindquist, the Buffalo-based company’s vice president of engineering and new product development. As it works to boost production, Whirltronics has expanded, with a 2020 addition taking its plant from 60,000 square feet to 80,000 square feet. A number of manufacturers are considering expansions these days. Enterprise Minnesota business growth consultant Greg Hunsaker says that as of early spring, he was working with five different manufacturing clients on facility layout plans. He says it was the biggest flurry of such activity he has seen since joining Enterprise Minnesota four years ago. Ally Johnston, another Enterprise Minnesota business growth consultant, says that nearly half of the members of a manufacturers’ peer council she leads in Hibbing are talking about expansions. “For whatever reason, people are expanding their facilities,” Hunsaker says. “And they seem to have the money to do it.” Lindquist says while she and her team remain committed to growing their business, they strive not to enlarge their footprint until necessary. “We wanted to make the best use of the space we had, and that’s where Enterprise Minnesota came in and helped us develop a plan,” she says, describing Whirltronics’ work with consultant Johnston. Johnston says she encourages clients to take a hard look at their existing operations before considering expansion. She maps out entire facilities, color-coding revenue-generating areas green and storage or wasted space red to help company leaders think about how they might boost productivity. She then asks clients to consider how they could turn more of the map green. It can be a valuable exercise, even if a

company is about to gain additional space, she says. “Don’t just expand and bring all your crap with you. Let’s get rid of it, and then really expand with production in mind and effective storage, not clutter,” Johnston says. Lindquist’s key takeaway from working with Johnston? “Make sure your space is making money instead of taking money,” she says. “That really stuck with our team and helped us think through how we used each square foot in the shop.” Recent supply chain issues have also pushed manufacturers to consider expanding. Jack Daggett, president of Pride Solutions LLC, says the company plans to double the size of its 20,000-square-foot Hutchinson production plant this summer at an anticipated cost of $1.8 million. Pride Solutions’ sales from 2020 through 2021 have grown about 40% across its four business units, serving different industries with plastic fabrication and assembly. On top of the need to increase production, Daggett says supply chain issues have cramped the company’s operations. “We’re having to buy sooner, buy more, bring it in earlier, all of the above. So, we’re really looking forward to having additional space, because we don’t have it right now,” he says. The just-in-time approach to ordering materials widely embraced as a best practice by manufacturers in the past has “gone out the window,” Daggett says. Subsequently, many manufacturers have been forced to keep more materials on hand, tying up capital in addition to space. Hunsaker explained why one of his clients was sitting on about $750,000 worth of copper in March. “They said: ‘If we didn’t buy that, we can’t guarantee that the next time we order it, we won’t be shutting down our line.’” “Prior to the supply chain disruptions,” Hunsaker says, “most manufacturers wouldn’t choose to tolerate ‘modest’ excess inventory of raw materials. Today, they’re willing to accept stunning levels of inventory. It must be driving them nuts.” For many, however, the alternative is to push lead times out to something that will be unacceptable to customers, Hunsaker says. “So, they’re making space for additional SUMMER 2022 ENTERPRISE MINNESOTA /

storage. And if they do that, they figure they can grow their business and client base because they’re able to meet their needs now. If the supply chain issue ever gets back to what they would consider normal, pre-COVID, they will be able to react to their clients the way they are now and still get them that same level of service, or better than their competitors,” he says. Joe Shallbetter — president and CEO of States Manufacturing Corp., a company that sells electrical power distribution equipment and solar panels — says he knows only too well the challenges of recent supply chain disruptions. While those problems didn’t hit States Manufacturing too hard early in the pandemic, Shallbetter says that since the latter half of 2021 the business has struggled to obtain reliable supplies of certain plastics, electronic chips and other materials.

“Expand with production in mind and effective storage, not clutter.” —Ally Johnston, Enterprise Minnesota “It’s really impacted our ability to finish a job once it’s started, because lead times are just changing and evolving it seems like every week, to be quite honest,” he says. “The problem now is that people won’t even tell you when you’re going to get your stuff. Initially they might have told you that you should have had it three months ago. Now they tell you: ‘We don’t know when you’re going to get it, even though you should have had it three months ago,’” Shallbetter says. Manufacturers likely have had an unwitting hand in their own current predicament, according to Greg Langfield, a business growth consultant for Enterprise Minnesota. “Basically, they opened the floodgates of inventory and said: ‘Whatever we can get, as much as we can get, we’re going to get it.’ And they’re still in that mode because demand is so high for their products. They’re willing to continue to eat that cost right now because they’ve had a real struggle to maintain inventory and get raw materials,” Langfield says. States Manufacturing, with a workforce of more than 60, currently operates out of two 30

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Enterprise Minnesota business growth consultants Greg Langfield, Greg Hunsaker, and Ally Johnston are helping manufacturers optimize their space.

Golden Valley facilities separated by about four miles. It’s planning to relocate to a new 93,000-square-foot plant in Champlin, come fall. The move will enable the company to consolidate its operations and will boost its available space by nearly one-third. Shallbetter predicts the new configuration will improve both productivity and innovation. “There’s a lack of collaboration when you have your team split up in two facilities, and that’s really hard to measure,” he says. “So, getting everybody back under one roof is going to be a major milestone for us to improve the front-end and backend processes.” Greg Bohl — an architect with Widseth, a design and consulting firm — has worked with a number of manufacturers looking to up their game with new facility plans. He says striving for a self-contained operation with continuous flow throughout it has clear merit. “It’s like your building is pretty much a machine. You have materials coming in one area, being processed, being sort of created or whatnot and being sent out on the backside. But if those paths cross, it can result in inefficiencies and slow everything down. That’s what all businesses are trying to do — maximize efficiency so they can produce more quality product.” One of Bohl’s steadiest clients in recent years has been Douglas Machine Inc., which built a 50,000-square-foot addition on to one of its Alexandria plants in 2020. And the company now is looking to move into more than 145,000 square feet of additional leased space in a nearby soon-tobe-expanded building by spring 2023. The new space should allow Douglas Machine to consolidate operations now lodged in four separate leased buildings

within about a mile of its main production facility, while simultaneously providing the company with an additional 15,000 square feet of space for an overall count of 450,000 square feet. Chris Haugen, Douglas Machine’s vice president of supply chain and services, acknowledges the current configuration of operations is far from ideal and predicts the new setup should yield improved efficiency. Describing the drawbacks of the present situation, he says: “We’ve got trucks running all over, and people going back and forth between buildings.” The primary customers for the specialized packaging machines Douglas Machine manufactures are large producers of food and beverage products. “That segment has been booming through the pandemic,” Haugen says. “People are buying more groceries. So, many of our customers need more automation, especially given the difficulty that everyone has had in finding people.” Haugen says Douglas Machine’s efforts to recruit more employees is frustrated by a tight labor market, with a local unemployment rate hovering around 2%. Staffing has proven a challenge for many manufacturers. States Manufacturing, Pride Solutions and Whirltronics all were looking for more staff to meet demand, as well. At a time when employees are in short supply, Langfield says it’s even more important for manufacturers to optimize the physical resources they do control. “Labor shortages and space utilization can go hand in hand,” he says. “That’s what I see when I visit some plants now. They don’t have good flow in them, so materials are piling up, which takes up more space,

which takes up more touches.” “Then, more employees are searching for materials or supplies,” Langfield adds. “So, some of those inefficiencies they had before COVID because of the supply chain issues, finding space for material and the high demand, have been magnified.” Lindquist agrees that paying close attention to improved efficiency can pay dividends in multiple ways, based on her own experience at Whirltronics. “Every time we put in a new line, we’d make it more innovative and improve on the automation that we’d installed previously,” she says. “Continuous improvement for us is part of our culture. We don’t stop improving our processes. We do it every single day,” Lindquist says. The improvements, including more point-of-use storage, have made the jobs of people working on Whirltronics’ shop floor easier, which Lindquist says “was the plan all along, because you don’t want them to be running all around the facility to get what they need.” Despite the current crush manufacturers

The just-in-time approach to ordering materials widely embraced as a best practice by manufacturers in the past has “gone out the window,” says Jack Daggett, president of Pride Solutions. face and the need to focus on day-to-day operations, Johnston recommends clients still make time to step back and take a look ahead at their anticipated long-term facility needs at least every three to five years. “Some of our clients might not be ready to move. But they’re ready to start planning and to have a road map,” Johnston says, noting that thoughtful facility layout is a key component to successful growth. “You might not have the manpower or the resources or the pieces of equipment today, but we should be planning and thinking about the future now,” she says.

Greg Bohl, an Alexandria-based architect for Widseth, has worked with Douglas Machine and a number of other manufacturers on new facility plans.

“I think a lot of our clients could benefit from thinking about their layout because they’re just focused on production, getting things in and out, and having a home for all this extra stuff. But they don’t think about having a plan,” Johnston says. Douglas Machine worked with Widseth to develop a comprehensive facilities plan in 2016, laying out five future phases of growth. Haugen says: “That’s served us well, because a lot of the things we had in our vision have come true. And had we not done that, it would have been a more arduous path to get to where we’re at.” Haugen credits thoughtful planning and layout for helping Douglas Machine wring the most value it could out of its current facilities, postponing the need for expansion until it was truly necessary. “We got a lot more out of the space we have than we ever thought we would. So, that probably kicked the can out for us a little bit,” he says. Despite current strong demand for many products, Langfield says uncertainties continue to plague the manufacturing world. “A lot of manufacturers are asking, ‘Is

(The online version of this story was edited slightly from the print version.)

the demand real?’ With problem supply chains, they’re out there trying to buy as much as they can. They’re responding to that shortage, even though sometimes maybe it’s a perceived shortage. And their customers, because they’re part of the supply chain, too, they’re doing the same thing. So, there’s this fear about how much of this is really real right now,” he says. The pandemic has driven up construction costs and pushed out lead times for building materials, as well, Johnston notes. “So, what a lot of manufacturers are really looking at is: What can we do now within our current facility?” Langfield says. “That’s where Enterprise Minnesota can help. We can look at flow. We can look at how many touches they have. We can look at where they locate items, based on ABC analysis. Within every facility, there are spaces that make money, that’s where they’re actually producing something that the customer values, or there are spaces that are taking money, because they have their dollars tied up in inventory or a work in progress. And we can do some analysis of that,” he says. SUMMER 2022 ENTERPRISE MINNESOTA /

Lean Leadership

Greater Than the Sum of Its Parts

By Kate Peterson

Leading Daily for Results integrates the principles of continuous improvement with leadership skills to help companies win each day.

n tiny Chatfield, Minn., population 2,900, a furniture manufacturer hums with activity as its 117 employees design and produce mid- to high-end contract office furniture. The company, which also has a 46-employee veneer plant in Wis., has a reputation for high quality products and on-time delivery. But two years ago, the management team saw a potential to improve even more through better communication, better development of employees, and a better process to achieve measurable daily results. The company is Tuohy Furniture, and when Enterprise Minnesota reached out to see if its leaders wanted to participate in a pilot program for a business consulting service called Leading Daily for Results, the manufacturer jumped at the opportunity. “We saw the benefits,” says Michael Tuohy, the company’s chief

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operating officer. “We knew there were opportunities there — for personal growth, for creating a better communication process — but we didn’t know exactly how to access them. Leading Daily for Results showed Tuohy and his team the way. In development for the past two years, the series combines lean thinking with leadership skills. The result is a communication process that aligns and connects a company’s strategic direction with daily improvements by employees to yield sustained results. Through six half-day sessions, participants develop and implement a communication process specific to their company’s needs. By the end of the series, leaders will have developed, implemented, and tested a communication board and daily meeting routine that fuels this process. The pilot series was delivered by Enterprise Minnesota

“The entire executive team, literally, meets every Monday morning with each area or department on the production floor.” —Michael Tuohy, COO, Tuohy Furniture

business growth consultants Abbey Hellickson and Greg Langfield, who have worked with manufacturing companies for years. Hellickson, with a background in leadership and talent development, advises leaders at all levels. With expertise in process improvement, Langfield helps companies do more with less through continuous improvement training and ISO certification consulting. Over years of conversations about their services and clients, Hellickson and Langfield identified an opportunity to offer their expertise jointly — a combination that yields benefits well beyond the value of independent consulting in their specific areas. In the first step of the series, leaders identify the big “why” — their mission, vision, and values. Next, they learn to communicate that why to their employees. Then they develop measures to communicate “what is important” and to assess daily progress. The series also helps companies incorporate lean principles and helps participants learn how to coach employees to take small actions to improve their work areas. “Skill development of leaders within manufacturing organizations requires the integration of process thinking along with the development of ‘essential’ skills to drive improved business performance,” says Langfield. Hellickson adds, “The goal is for leaders to coach their employees to take small actions every day, through daily management of their work areas. These skills in leading through daily actions involve building processes around planning, communication and problem solving.”

LEADERSHIP COMMUNICATION

Hellickson typically begins the skill development sessions by asking leaders if they get the results they expect from their employees. Often, Hellickson says, companies find that the communication process they have in place fails to connect leaders and employees. The goal is to make sure communication is aligned from top to bottom. This can be accomplished by defining “what is

important” in both words and actions — and recognizing that every action a leader takes communicates this as well. Twin City EDM & Manufacturing Inc. is another company that gained from this emphasis on communication in the Leading Daily for Results pilot. Based in Fridley, Minn., the thriving manufacturer of complex precision medical and industrial components and devices has 90 employees. It recently doubled its facility size from 20,000 square feet to 40,000 square feet, runs two shifts Monday through Thursday, and another three-day, 36-hour shift on weekends to keep up with demand. Like many Minnesota manufacturers, in recent years, Twin City EDM & Mfg. has faced challenges in the labor market just as demand for its products has exploded. With a diverse workforce, including immigrants with various backgrounds, the company’s vice president and chief executive officer Steve Lindell says it is important to convey the company’s core values and commitment to quality on a consistent basis. Lindell and his management team used Leading Daily for Results to improve communication with area leaders and employees. “Continuous training and continuing to evolve our culture are huge parts of our success,” Lindell says. Lindell and Twin City EDM & Mfg. launched daily meetings between area leaders and employees based on huddle boards that outline measurable goals and progress toward those goals (see sidebar, p. 35). In addition to keeping the teams on track with respect to goals, Leading Daily for Results has brought the leadership team together with production floor employees consistently. For Twin City EDM & Mfg. that means a weekly executive team walk-through with all area leaders. These walk-throughs, which take five to 10 minutes for each area, allow an ongoing opportunity for communication about the company’s core values and mission. “It forces your hand to be consistent about the goals you have established because there you are in front of the group. We’re in a tough environment right now, so that’s needed — in a nice way,” SUMMER 2022 ENTERPRISE MINNESOTA /

says Lindell of the communication process created by daily and weekly management meetings.

SKILL DEVELOPMENT

“Within any business, the role of leadership is to ensure needs are equally met in three areas: customer, business, and employees,” Langfield says. To keep that balance, the leadership team needs to communicate “what is important” every day, and then apply coaching skills to have employees take actions for improvement, he explains. “This is accomplished with daily conversations with employees based on a structured agenda.” Hellickson, with expertise in growing leaders, adds that through Leading Daily for Results, her coaching has been enhanced by bringing in the data and measurement aspects Langfield shares with his clients. Manufacturers, she says, benefit more from a practical application of the skills she teaches. “In terms of leadership skills, we now have a venue. By blending

“When employees are involved in daily problem solving, organizations grow and improve every day,” Hellickson says. these two together, the structure is easier to comprehend and digest and execute,” Hellickson says. For Michael Tuohy and Tuohy Furniture, Leading Daily for Results has improved leadership skills across the company. “The entire executive team, literally, meets every Monday morning with each area or department on the production floor,” he says. “For five to 10 minutes, the lead in that production area will present his or her week, discuss critical points, what got done, and what didn’t get done. Then they have an opportunity to ask questions of us and tell us if there are things that we need to engage in to help.” This type of scheduled, weekly checkup is new for the company, Tuohy says, and because of it, leadership skills across the company have grown. “Specific to the executive team, we have a deeper awareness of the processes and issues on the production floor,” he says. 34

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The process has created a clear path of communication and defined the framework of the conversation. That, Tuohy says, has led to tremendous skill growth for the employees on the production floor. “Some of the lead people there — they know on a Monday morning they have to give a presentation. When you manage an area, you have to casually know things. But when you have to present, and you have to go over certain documents, and chart out progress, it formalizes it,” Tuohy says. “It also grows that individual as well.” Langfield and Hellickson reiterate that skill development is dependent on employees understanding the “why” of the company. But area leaders and employees also need to understand measures, including how to define a good day, how to review a daily status, and how to transform that information into a call to action. Through Leading Daily for Results, participants learn about these steps and have an opportunity to practice actual situations from their companies. “When employees are involved in daily problem solving, organizations grow and improve every day,” Hellickson says. “Employee engagement occurs when leaders embrace the use of measurements, communicate the story that the measurements tell, and coach employees to implement actions.”

DAILY DIALOGUE

Leading Daily for Results helps companies align their communication so employees understand the why — what drives the company. The skills developed

through the series give leaders across the organization the tools they need to guide employees toward the company’s goals. Daily dialogue is the application of these tools and skills on a consistent basis to help employees win each day. It is the convergence of all the critical aspects of Leading Daily for Results. Langfield explains that the foundation of the daily meeting involves telling a story, and that in that story, there are data and facts. The data are the measures that communicate the status of the goals. The facts are the stories behind the data. “The area leader needs to understand the facts behind the data to have an effective meeting. We have to find out what’s going on,” he says. “At the daily meeting we can talk about issues, about getting better, with a focus on the process, not the person.” Hellickson adds that dialogue was critical during the pilot series. “Once they started to have things happen, and the leadership team supported them and took action as well, that was really the key,” she says. “Employees show up to be productive. If we tell them what’s important, they will respond.” Daily huddle meetings — the core of Leading Daily for Results — reinforce what is important to the company, provide tools to assess progress toward those goals, and help employees engage in problem solving to address any areas where goals are not met. In the training sessions, area leaders are coached on how to conduct daily huddles; they also have the opportunity to practice leading them before guiding employees through them.

The Huddle Board Defined Tuohy Furniture

“Before [implementing Leading Daily for Results], you’d sit down with a manager for a review and you’d spell out expectations. Then in six months, you’d check on the review and find out you’re right where you started.” —Steve Lindell, vice president and CEO, Twin City EDM & Mfg.

At Twin City EDM & Mfg., Lindell says the Leading Daily for Results training for area leaders was extensive. “They worked with them on how to do a meeting with people and how to present to management,” he explains. Weekly meetings with management around the huddle board are essential. They provide both accountability and help to the teams working on improving their performance. The final session in Leading Daily for Results helps management develop the skills needed to guide these weekly meetings effectively. It also coaches managers on how to support area leaders working to improve their own leadership skills. For both Lindell and Tuohy, the daily dialogue and weekly meetings have proven extremely beneficial. The area leaders at Tuohy Furniture manage the process. “They have, literally, on a board on the wall, performance areas they are tracking,” Tuohy says. “We review the previous week’s performance for each target and see if it’s green — accomplished — or red — an opportunity for action. If it’s red, there is an action plan.” At Twin City EDM & Mfg., the management team has been doing the weekly walk-throughs for at least six months. “We’ve been involved since we started and haven’t missed one,” Lindell says of the huddle board sessions. “Each week, five or six executives take part in the meetings,” Lindell continues. For each area, the sessions take 10 to 15 minutes; they cover what they are doing as a department that week and how they

Twin City EDM & Mfg.

“Think about a sports team that’s trying to win a game,” says Enterprise Minnesota business growth consultant Greg Langfield. “If there’s no scoreboard, how do you know if you are winning?” The Leading Daily for Results skill development series integrates key areas around leadership communication involving measurement, goals, obstacles, and action to help companies win each day. A visual representation of the measures and progress toward winning the day, the huddle board serves as the scoreboard for the team. While each team customizes its huddle board with goals and measurements, each one includes the same key categories, which are listed horizontally and start and end with employee-based measures: Safety, Quality, Delivery, Cost, and Employee Development. For each category, daily progress toward the goals is marked in green or red. Green represents success in a category; red represents an opportunity for action. The measurements are placed in the center of the board, with the company’s vision, mission and values along the top, and a visual representation of the eight wastes of DOWNTIME along the bottom. The board, along with daily dialogue, provides the framework for employees to take small actions that will impact the measures to “win the day.”

are progressing on what was suggested the previous week, he explains. Lindell contrasts the daily and weekly sessions with how his company managed employee progress prior to Leading Daily for Results. “Before, you’d sit down with a manager for a review and you’d spell out expectations and then in six months you’d check on the review and find out you’re right where you started,” he says. Lindell says his company has tried to get all employees cross-trained over the last several years, but progress has been stalled because it seems everyone runs out of time. One result of the daily and weekly sessions has been accountability toward the goal. “We have a plan in place, and we’re working through it,” he says. Tuohy says the daily dialogue and weekly walk-through process allow managers to interact with all employees, not just the area leaders. “It also increases

the engagement of the employees. They may be a little shy, but if they have the right place to offer a suggestion, they can do that, and they get all the accolades and support and the encouragement to try something for the company,” he explains. “It’s great company-wise and good for business, but for that person, who might have been historically a little shy, it’s a big deal to mention something, have everyone talk about it and think through how to do it, and try it out,” Tuohy adds. Overall, Tuohy says, the daily huddle meeting has really given Tuohy Furniture a boost. “It wasn’t that we had quality issues or growth issues. We had a good workforce and made changes to help make each day better with production scheduling improvements, for example,” he says. “But the daily huddle was new, and it has helped take a good company with good fundamentals and make it even better.” SUMMER 2022 ENTERPRISE MINNESOTA /

Profile

Scamp (n):

A person, especially a child, who is mischievous in a likable or amusing way.

Micah Eveland CEO, Scamp Trailers

THRIVING IN CHAOS

Scamp campers are as American as mom and apple pie.

So is their story of success.

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By Robb Murray

rian Frink and his wife Wilbur had their eyes on a Scamp trailer for 20 years. Each year, they’d stop by the Scamp display at the Minnesota State Fair and dream of Northwoods camping trips, long drives across the U.S., making memories around campfires with a bottle of wine and each other’s company. Some day, they thought. Some day. Some day came. Frink retired as a college art professor. He and Wilbur made plans, wrote a $500 down payment check for their Scamp camper and then waited. And waited. And waited. They wrote that check in 2020. They picked up the trailer last January. But they knew they’d have to wait and didn’t mind. “We thought it was worth the wait,” Frink says. “We knew it was going to be this way going in.” You’ve definitely seen a Scamp. As you’re gassing up your car on a summer Friday, you’ve no doubt gazed across the array of pumps to see a smiling gentleman gassing up his truck — behind which is hitched a curious, egg-shaped

Scamp produces on average about 12 trailers each week. The company would like to grow that number and perhaps reduce the wait time to six months. camper with a funny name printed on its fiberglass side. The Backus, Minn.-based company that makes them can’t come close to keeping up with demand. If you were to order a Scamp trailer right now, you and your family wouldn’t be heading to the Northwoods with it anytime soon. Certainly not this summer. Probably not next summer, either. Like the Frinks, it’ll be more like a twoyear wait. But chances are, if you’re ordering a Scamp, you already know that. And you don’t mind. These nifty, affordable, campers have a cult following like

few others. Scamp campers engender community, camaraderie, and loyalty. Owners and fans use websites, meet-up groups, and newsletters to discuss their Scamps and the adventures they get into with them. Scamp Trailers’ story is one of resilience. The company has not only been producing homegrown campers for 50 years but has also weathered a few “storms” — surviving a fire that put camper production

GOOD PROBLEM TO HAVE

The backlog is a challenge. No company wants to tell its customers it’s going to take two years to complete their order. But Eveland says the backlog is the best indicator that they’re making a quality product that people want. “It says a lot,” Eveland says. “It actually makes everybody here very proud to work here because it’s a sought-after product. Market studies show that we beat every

Because of the lightweight fiberglass frame, owners do not need a truck to tow a Scamp trailer.

on hold for nearly a year and navigating a pandemic, supply chain issues, inflation, and labor shortages. And in the last three years, the company has been under new management, as Micah Eveland, the son of former CEO and president Kent Eveland, took control of the company. Micah Eveland wasn’t merely handed the reins of a successful company without knowing anything about it. He started out in customer service, answering questions over the phone. Then he became the warranty manager. Then he worked in purchasing. Then he became the plant manager. Eventually he took over when his father became ill. Kent Eveland, seeing the ship was in good hands, decided to retire. While many companies are struggling to find workers and rustle up business, Scamp has the unique fortune of a young CEO with a personal stake in the company’s success, and a product with an uncommon demand.

competitor in every avenue of the business — price points, options, customer service.” Eveland says one of Scamp’s biggest advantages is its lightweight fiberglass frame. A Scamp trailer, even the larger ones, can be easily hauled by a Honda CR-V or Toyota RAV4. Scamp produces on average about 12 trailers each week. The company would like to grow that number and perhaps reduce the wait time to six months. Jim Nagy, Scamp’s marketing coordinator, says the company is planning to add plant capacity to close the delivery wait-times. “Hopefully by this summer they’ll start pouring concrete,” he says. One thing does concern Nagy. During the last two years, many people who felt isolated by the realities of the pandemic put in orders for Scamp trailers hoping it would solve their problems. He worries what will happen when some of them realize they actually don’t like camping. SUMMER 2022 ENTERPRISE MINNESOTA /

This will cause the used trailer inventory to swell, which could impact future sales.

YOUNG GUN

This isn’t where Eveland thought he’d end up. He didn’t grow up with a dream of one day running a trailer manufacturing company. His dreams were taking him down a different path. A gifted rodeo competitor in high school, Eveland was the state team roping and steer wrestling champion in 2006, 2007, and 2008. (He also continues to compete on the pro circuit.) Instead of running the family business, Eveland’s head was in the rodeo ring. He pursued training at the Minnesota School of Horseshoeing in Anoka. But while he may not have wanted to pursue the family business, the family business pursued him. His dad called one day and told him someone had just quit in customer service, and he needed help. “I said, ‘Oh, no,’” Eveland recalls. But then he thought about what it might be like to work in the family business, and

“[T]hese trailers have always been built here, going back 50 years. It’s kind of nice to know that you can still buy something that’s built, and has always been built, here in America.” how he could make his mark on the already stellar brand. He and his father discussed it, and Eveland pondered it some more. Then, when he went back to Backus in the fall to go deer hunting, he decided to take the job. Eveland made his way from customer service to the warranty department, and then to purchasing, plant manager and sales. But even as he worked through the Scamp operation, he still assumed that this gig wasn’t permanent. He was helping his dad out, he told himself, until he finally figured out what he really wanted to do. That changed five years after he started in his first role when his grandfather gifted him some company shares. Owning shares instantly changed Eveland’s outlook on what he was doing at Scamp. It wasn’t just a job anymore. He wasn’t just showing up to put in his eight hours and head home. “Anytime you have 38

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The refrigerators installed in Scamp trailers have increased in cost by 8%. The cost of fiberglass, the single most important component of the Scamp product, has increased by nearly 20%.

some sort of ownership, it’s different. Just like your house. You’re probably going to take a little bit better care of it than somebody else’s house, right?” Then, three years ago, his father fell ill while on vacation. And Eveland, who had spent several years learning every aspect of the company — and doing it now with a sense of ownership — stepped up. In his father’s absence, he assumed a level of responsibility he’d never had before. And he was successful. So successful, in fact, that his dad decided Scamp was in capable hands without him. Kent Eveland retired, and the Micah Eveland as CEO era began.

Dispatch in the days following the blaze. “You watch fires sometimes, and sometimes they’re fun to watch, like bonfires. But when it’s your business, there’s nothing good about it. It’s just a bad deal.” The company was insured, but the loss of production stung. Perhaps the only salve was this: The fire resulted in Scamp building a new 37,000-square-foot manufacturing and office facility on the same spot. Molds and equipment were upgraded, and in the end the facility and company were more modern and better suited to keep up with rising demand.

THE FIRE

PRODUCTION

In January 2006, the unthinkable happened to the Scamp plant. After most of the workers had left for the evening, fire broke out in the main production building. An office worker noticed flames and called 911, which prompted Backus, Walker, Hackensack, Pine River, Longville, Crosslake, Nisswa, Pequot Lakes and Ideal Township fire departments to respond. After trying for seven hours to douse the flames, the building was declared a total loss. The fire destroyed all the fiberglass production molds, tools, equipment, inventory, and the main office that held most of the company’s records. Kent Eveland, the CEO at the time, said he’d hoped it wouldn’t take more than six months to be back up and running. But it wouldn’t be until the following December that Scamp resumed production. “It’s one of the most horrible feelings in the world,” Eveland told the Brainerd

The road from parts to ready-to-camp Scamp is a fairly typical assembly-line process. The shell components are fabricated from fiberglass that comes to the factory in 50-gallon drums. The liquid resin is poured into molds that make up the distinctive egg-like shape of the Scamp camper. At the same time, the frame shop is busy manufacturing the chassis frame and assembling the axles and hitches. The fiberglass and frame components then meet at the beginning of the production line, and that’s where the assembly process starts. The line has 12 workstations, including areas such as subfloor and electronics installation. Once the shell makes its way through all 12, it’s time for things like cabinetry and appliances. Finally, it’s time for quality assurance testing. And the person in charge of that is, shall we say, not the most popular worker on the line. “That’s kind of an inside joke,” Eveland

Get in line to hitch your vehicle to a Scamp trailer. The wait time on orders is about two years.

says. “I think they cringe when they see her walking toward them. Because they know something’s wrong.” Most of the trailers that come off the line have something that isn’t “perfect.” Might be a scratch on the door that the buffer missed. Might be a slight imperfection in the stitch of a cushion. Whatever it is, the quality assurance expert finds it. If it’s a big enough deal to send back to the line for repairs, that’s what is done. If it’s invisible to anyone except the person who gets paid to notice this kind of stuff, it might be documented just so the company has historical data on recurring tiny flaws; a change in the process could be implemented down the line if necessary to eliminate even the slightest defects.

SUPPLIES, INFLATION

Like most manufacturers, Scamp is dealing with the dreaded supply chain issues. But it’s not quite as urgent as it might be for others. Scamp’s purchasing team has ensured the company has enough supplies on hand to keep making trailers at its current pace. Eveland says that, if they approach low inventory, they scramble and hunt for parts to make sure the customers’ wait time isn’t extended. “We build long standing relationships with our vendors. We can have those conversations (about supply chain issues),” Eveland says. “Scamp Trailers is nothing without our staff, we’re nothing without our vendors. So, if we don’t have good relationships with everybody, it’s not going to work.” Nagy adds that the production line hasn’t had a down day throughout the

pandemic, a testament to the loyalty of the company’s employees. On the workforce front, Scamp is in a unique position. In a town of 322 people, it’s one of the major employers in town. Eveland retains employees through incentives and a culture of rewarding excellence. “We strive to be the premier employer in this area, offering the best health benefits package and the highest pay for that line of work,” he says. “We’re very team oriented, and we try to stay relaxed as far as corporate rules go. We are still a small family business, but we try to be somewhat relaxed.” And, small towns being small towns, word of decent wages and great benefits travels fast. “I want every employee here to make as much money as they possibly can,” he says. Scamp starts general laborers at $15 per hour. Once they are on the job, Scamp moves quickly to help employees find their best fit in the company’s production process. “We try and see what you’re capable of,” Eveland says, “and quickly move that person to around $20 an hour.” As for inflation, Scamp hasn’t been immune to the ebbs and flows of the national economy. With inflation at rates not seen since the 1980s, and with the Consumer Price Index up over 8% through March, it’s nearly impossible to be immune. The refrigerators installed in Scamp trailers have increased in cost by 8%. The cost of fiberglass, the single most important

component of the Scamp product, has increased by nearly 20%. One 55-gallon drum of fiberglass can complete, on average, one Scamp trailer.

CUSTOMER CULTURE

Scamp trailers have a loyal following. There are Facebook groups where people share stories, websites that track meetups, and newsletters for people who want the latest updates about Scamp availability or trailer upgrades. The clientele runs the gamut, Nagy says. “A lot of them I would say are exhippies, people who like to travel around,” Nagy adds. “But then on the other side of the customer base are people who just appreciate something that’s built here. And these trailers have always been built here, going back 50 years. It’s kind of nice to know that you can still buy something that’s built, and has always been built, here in America.” Frink falls somewhere in between. He certainly wouldn’t mind being referred to as a hippie. And he loves the idea of buying a trailer built in America. That notion, actually, is sort of in his blood. Growing up in Wisconsin, he watched his grandfather run his own trailer company, Tow-Low. He says the Scamp trailers, and the way they’re built in the Backus facility, remind him a lot of his grandfather’s work. He and Wilbur already have a half-dozen trips planned for this summer. “It’s a cool little trailer. And there is a lot of loyalty around these things,” Frink says. “We just have really enjoyed it. It’s a well-built trailer, and we’re happy we bought it.” SUMMER 2022 ENTERPRISE MINNESOTA /

Final Word

Filling a GAP Continued funding for the Growth Acceleration Program would demonstrate the legislature’s understanding of the critical nature of manufacturing in Minnesota.

he Minnesota Legislature’s decision to consider including — again — funding for the Growth Acceleration Program (GAP) in this year’s budget is a helpful sign for small manufacturing companies across the state. In addition to providing essential funds for businesses seeking to improve their operations and boost market positions, the measure is a clear indication that many of Minnesota’s elected officials recognize the vital role manufacturing plays in our state’s economy. Created in 2008 to give small manufacturers affordable access to critical business support, GAP is as crucial as ever for companies facing a challenging

Since its inception, GAP has helped countless Minnesota manufacturing firms stay in business, keep employees, and continue growing. post-COVID landscape. With the funds allocated through GAP, manufacturers with 250 or fewer full-time employees can access business services for assistance in critical areas of operation including quality, cyber, and sales. The program gives a dollar-for-dollar match to eligible companies for services provided directly through Enterprise Minnesota and has proven over time how effective it is. Since its inception, GAP has helped countless Minnesota manufacturing firms stay in business, keep employees, and continue growing. With the help of GAP, manufacturers have created 12,556 additional jobs, generated $1.4 billion in additional sales, saved $206 million in costs, and invested $583 million in plant, equipment, technology and skills development. 40

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Lynn Shelton is vice president of marketing and organizational development.

One in seven jobs in our state is directly manufacturing related, and each of these jobs creates two additional jobs. That means fully one-third of Minnesota jobs are dependent on the manufacturing sector. With the continued funding of GAP, legislators from districts across the state are signaling their understanding of how essential manufacturing is to our economy. We were pleased that several client companies joined Enterprise Minnesota president Bob Kill and me as we testified before the legislature to advocate for continued GAP funding. Paul Ebnet, president and CEO of Straub Design in New Hope and chair of the Enterprise Minnesota board, testified that he has worked for two different Minnesota manufacturing firms in the last 10 years, and both have benefited from GAP. “In both companies, the GAP resources were critical for us to move forward and leverage our own investment funds, which

is important for small manufacturing organizations,” Ebnet told the members of the legislature, explaining GAP helped the companies implement quality programs and improve sales, and in both situations resulted in significant job growth. Likewise, Joe Plunger, owner of Midwest Metal Products in Winona, testified about the many Enterprise Minnesota programs his company has benefited from and explained that “GAP funding provides a bridge that gets many small businesses to commit to the help they need. I know it did that for me — it swayed my decision to proceed, and as a result we have done a lot of good for our employees and community.” I’m delighted whenever business leaders join us to testify in support of manufacturing before the legislature, or when they work with Enterprise Minnesota to host lawmakers on tours of their manufacturing facilities. Those who run Minnesota’s manufacturing companies are a busy and humble group, not inclined to draw attention to themselves. Across the state, countless vibrant companies hum along without fanfare, producing remarkable products inside ordinary-looking buildings, often without signage, unknown to the legislators who represent them. That’s why, even though Enterprise Minnesota exists to serve manufacturers through consulting services that help businesses achieve sustainable growth, we also are delighted to point out the tremendous role the manufacturing sector plays in our economy and advocate on behalf of these great companies to ensure a climate where they can continue to thrive. That the Minnesota Legislature consistently recognizes manufacturing’s tremendous economic contribution — and may continue funding this important boost to the manufacturing sector — is a helpful sign. The legislature concludes its business this year on May 23. We hope the outcome is a win for GAP, which would be a win for manufacturers.

Enterprise Minnesota consultants help manufacturers grow profitably. Our continuous improvement experts can help your team improve flow, reduce down-time, and eliminate waste.

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Business Growth Consultant

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Business Growth Consultant

For over 30 years, our consultants have been helping Minnesota’s small and mid-size manufacturing companies achieve sustainable profits and growth. Contact us today to get started.

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