A Sustainable Earth Day

1970 was a time of great change and challenges.  On April 22, 1970 the first Earth Day was established that put environmental concerns on the minds of legislators and public alike.  It was a day that led to the creation of the US Environmental Protection Agency.  Forty one years later we still face great challenges for the environment.  Earth Day 2011 is just days away.  What changes has your organization made in the last year to make a positive environmental impact?

Sustainability is no longer a peripheral issue.  It is highly relevant through all levels of business and supply chains.  Reasons to pursue sustainability are driven by climate change, shifting regulations or market expectations.  The impacts are great for companies that embrace sustainability.  Companies of all sizes build profit, brand and competitive advantage, while reducing waste, reducing environmental and social impact, and guarding against liability.

The top three reasons to pursue sustainability practices:

1.  Sustainability is simply good business- this subset of your overall strategy addresses areas of your business which both improve your overall positioning and also include operational efficiency and profitability.
2. Improve profitability – by identifying wastes, working smarter and  increasing efficiency
3. Manage risks and liabilities- eliminate or reduce stakeholder liabilities including governmental, environmental, supply chain, bank and public interests in your business

The best performing organizations understand the relationship that sustainability has on the “triple bottom line” summed up as people, planet and profits.  Using this framework as a strategic lens through which a company can look at their business ultimately leads to better market positioning and profitability for a business.

Three sustainable areas to review to increase your profitability:

1. Lighting- this is often a low hanging fruit for energy reduction
2. Waste- understand what you are throwing away and identify areas to reduce or recycle
3. Water- review how you are using water to reduce the amount used

MANTEC’s Sustainability Program utilizes a comprehensive 360° approach to identify and understand your organizations opportunities and create a strategic plan to address the opportunities.  MANTEC will then work with you to implement your plan and realize the benefits.  For more information visit www.mantec.org/Sustainability.cfm

Why Supervisory Development Matters

Typically the most experienced and technically skilled employees are advanced into leadership roles.  On paper it makes sense to promote the most skilled person within a department to a Supervisor.  After all it is their technical skills, ability to troubleshoot equipment, maintain his/her machine, and constantly produce quality pieces on time that justified the promotion.  In reality, there may be additional skills needed for your newly appointed supervisor to succeed.  Great manufacturing supervisors are made, not born.    Managing people is entirely different and requires specific training.

Three reasons to invest in supervisory training:

1.       Decrease liability- Supervisors with little or no training expose the organization to liability for illegal (or discriminatory) employment practices.  It is important that each employee understand working relationships and expectations of the organization.

2.       Improve behavioral discussions- It is common for untrained supervisors to avoid discussion with their employees about performance or behavior improvement.  Training supervisors ‘what to say’ and ‘how to say’ it is key to positive employee/supervisor interactions.

3.       Develop effective leaders- Supervisors are challenged by a dynamic workforce that is diverse.  Too much emphasis can be placed on technical skills and not enough on the care, trust and respect qualities that are equally important to becoming a great Supervisor and successfully managing people.

Successful organizations recognize the importance effective leaders play and help develop better supervisors to drive future performance and profits.

There are plenty of organizations out there that offer supervisory development.  The MANTEC Supervisory Development program is different from others because of our experience!  The program is taught by seasoned manufacturing professionals.  They know the industry, the manufacturing environment and what the supervisors need to succeed.  Additionally, the MANTEC program is not just about people skills.  It touches on LEAN principles and financial aspects of decision making driving towards a well rounded supervisor.

Join us April 19 for a no cost or obligation overview of MANTEC’s Supervisory Development Program.

PA Economy Led by Manufacturing

A landmark study “Pennsylvania’s True Commonwealth: State of Manufacturing – Challenges and Opportunities” shows that although manufacturing has faced challenges in recent years, it’s still Pennsylvania’s number one economic engine in terms of gross state product (GSP).  It’s also the fourth largest provider of jobs – with a family-sustaining average yearly salary of $52,204.

The study was led by one of the nation’s foremost thought leaders on manufacturing, Dr. Edward W. Hill. Dr. Hill and his research team.  The study examined the past three years of the manufacturing industry, data collected by the Industrial Resource Centers, state offices and as well as results from focus groups with 70 manufacturing CEOs.

Other key “State of Manufacturing” key findings outlined include:

• Manufacturing has an impact on the entire state, but has more of an effect on economies in rural counties: accounting for 23 percent of GSP and 16 percent of all employment in 2008.
• Productivity (gross state product per employee) in 2008 was $27,000 higher for Pennsylvania manufacturers than for non-manufacturers. The gap may be explained by improved capital and management practices among manufacturing companies.
• More than 60 percent of the patents issued from 2001 through 2010 to Pennsylvania companies and universities went to manufacturing companies.

We want to share this in-depth research and looking forward to continuing dialogue about advancing manufacturing in Pennsylvania.  All data is available at www.pamade.org.

Report Highlights in 4 pages including graphs
Executive Summary

US Manufacturing #1!

The United States is the number one manufacturing nation in the world!  According to the United Nations report, U.S. manufacturers produced $1.7 trillion in goods in 2009, 40% more than China.  A lot has changed in manufacturing since employment peaked at 19.6 million in 1979.  Market shifts mean that manufacturers, particularly small and mid-sized firms, are facing new, significant challenges.

The Next Generation Manufacturing Strategies (NGMS) address the market shifts for profitable manufacturing growth.  To be competitively positioned to capitalize on the opportunities available in the dynamic markets of today and tomorrow- to not just survive, but to grow and thrive- U.S. manufacturers must address six key critical areas in concert:  Continuous Improvement, International Trade, Supplier Development, Sustainability, Technology Acceleration and Workforce.

Sure, it is not a completely rosy picture; however there are many bright spots.  Last year 136,000 manufacturing jobs were added- the first net increase since 1997.  See the blog from LEAN Accountants for more information on this increase. U.S. manufacturers are focusing on complex and expensive goods where China excels at products with low profit margins.

Many manufacturers have utilized the six NGMS.  Continuous Improvement (aka- LEAN) is probably the most widely known method to remain competitive.  Continuous Improvement enhances productivity and frees up the capacity that will provide manufacturers a stable foundation to pursue innovation and growth.  All employers know they need a strong, engaged and skilled workforce in all levels of the organization.  Workforce development will be a key element in a manufacturer’s growth.

Many more opportunities exist with the additional NGMS.  International Trade should not be ignored in a strategic, market and sales development plan.  It is a world market and capitalizing on opportunities is important.  Supplier Development focuses on the competitive position using an efficient supply base and identifying innovative process and products.  Sustainability is a key driver as global demands for diminishing resource increase and renewable technology needs expand.  Technology Acceleration leverages opportunities and solutions required to grow in the global marketplace.

For more information on the Next Generation Manufacturing Strategies visit www.mantec.org/ngm.cfm

With proper strategy, the United States can remain the number one manufacturing nation in the world.

IT Strategies- Be Proactive

What is the single most important aspect to keep your business operating?  Arguments could be made for a dedicated workforce, the machinery, or a checkbook in the black.  Now think of a time when your computer didn’t work as it should.  What did you do?  Waited for IT assistance (if you have an IT person!), maybe you leafed through the stack of magazines piling up, chatted with a co-worker or cleaned some files.  If your business is in the 21^st century (and we hope it is!) then your information systems are keeping your business moving forward.

Information Systems keep the dedicated staff connected to each other, track and schedule orders so the machinery can make products and ensures the expected funds are in your account.  It is clear this is an important part of your business and yet, this is often a neglected aspect of a business.  It is easy to do quick fixes, get a new computer or install a new software program.  Just like everything else in your business you need an Information Technology strategy.

Developing a strategy is the first step to being proactive.  IT strategies need to fit with a business strategy to allow the organization to grow.  Just like cars, information systems require some maintenance to operate properly.  Failure to perform the preventive measures can be detrimental to the system.  A well-written Information Technology Strategic Plan will pave the way for your company to facilitate its computer changes and implementation.

So what are the key parts of an IT strategy?
A good Information Technology Strategy often contains the following components:

• Opportunities and Drivers - This is the critical section that will link the overall business with IT and it will outline the critical internal IT objectives.   It will outline the strategic ways that IT can enable the business including both cost reduction and revenue generation.  The Information Technology Strategy will also outline the fundamental internal IT objectives such as cost reduction, talent retention, skill retaining and more.
• Project Portfolio - The project portfolio will describe the current and future IT projects and their dependency on each other.  The major projects should be tied to the corporate planning process.
• Enterprise Architecture - The enterprise architecture will provide an overall road map and direction that includes an application architecture, infrastructure architecture and process architecture.  It should clearly give direction on both the technology in place today and the technology that will be put in place over the next 2 to 5 years.
• Management and Governance - This covers both the organization and the process for managing IT in the enterprise.  It should result in an ongoing, disciplined way for managing investments from idea generation through realization of business results.

Read more tips on a successful IT strategy on our IT page.

Technology has become much more complex to manage making it more essential than ever before that you have the right mix of people, process, software, and hardware in place to maximize your technology investment.  The correct mix can give you the peace-of-mind that you are getting a return on investment with your technology expenditures while allowing you the freedom to focus on running your business.

How healthy is your IT?  Be proactive to find out- attend the Health Care for IT event on February 24.  Click here for details.

LEAN Manufacturing Certification Program

LEAN Certification is for any type of business – manufacturing, services, schools, health care and more. The MANTEC LEAN Certification program is for any company that is ready to begin the LEAN journey. To become familiar with LEAN, the top-level people in the organization cannot be the only ones driving the program, they need a champion to do the day-to-day implementation.

The program starts off by dealing with cultural aspects of a LEAN journey. This involves:
Communications
Conflict Management
Team building

If the company doesn’t make the cultural change they will backslide. That is why the first two courses focus on cultural aspects and changes. Then, other tools are used to overcome waste. This would include how to identify waste and then using the tools to eliminate waste. From there other classes provide training and tools to keep transforming the company and stay on the LEAN path. 

As an example the Change Agent class provides insights and tools to transform your company or operation by stimulating action, building velocity, and sustaining momentum. You will learn how to plan effective change processes, use influence and persuasion to overcome barriers and learn the proven tips and techniques for sustaining change.

MANTEC is not the only organization that believes LEAN is important.  Check out the blog from McKonly & Asbury!

Several other classes are part of the LEAN Certification program. Examples include:

5s Training:
Reduce waste through a systematic application of the 5S System- Sort, Set in Order, Shine, Standardize, and Sustain. This workshop teaches the basics and techniques presented as a simulation that resembles an actual shop floor, using a production line with assembly areas, tools, inventory, and workers.

Quick changeover:
This course teaches the fundamental principles of set-up reduction and reducing waste. It is based on the works of Dr. Shigeo Shingo and his Single Minute Exchange of Die System of Setup Reduction. Participants will receive hands-on opportunities to practice new techniques and improve setup time.

The overall goal of LEAN is to be able to impact the bottom line of your company. You can’t cost reduce yourself into profitability.
A transformation of an organization that continues on indefinitely is the path to sustainability. Many companies that have tried to implement LEAN on their own, only to watch the program fall apart. The certification program keeps them on track.

The program creates “points of light” that makes the cultural changes with a mindset of… “that’s the way we used to do it, but we don’t do that anymore.” All of this is driven from the teams on the production floor through the elimination of waste. LEAN is a War on Waste and a life long journey.

Join us! The LEAN Certification program takes place on January 27th from 8:00am to 12:00pm    Register Here

Mark Robertson
LEAN Development Manager

Cultural Assessments

Culture is a “touchy-feely” subject, often not described in a meaningful manner. MANTEC defines it as the combination of values, beliefs, assumptions and processes found in your day-to-day operations. We look at human activity in the organization everyday and how it conducts business. Once you define the culture you can improve it. MANTEC uses a tool to help define the company’s strengths and weaknesses.  

How does it work? MANTEC administers a survey given to your employees (via the web or paper printout), The results give us a snap shot of the cultural health in the company and we use the results to identify areas of improvement based on strengths or deficiencies. The organizational and leadership effectiveness tool is built upon years of academic research and business/industry application. This allows us to compare like industries for contrast. Most organizations will compare against themselves after the first year baseline measurement.

Companies can perform a Cultural Assessment in about two months. MANTEC coordinates the project from survey customization phase through to Improvement Workshops. There are three phases to the culture study:

1.  Communication and Design: Developing an eighty-plus questionnaire with some customization; setting the deliverables, timelines, and data collection logistics.

2.  Data collection: Use of web or paper based surveys to capture employee perceptions.

3.  Reporting: Present the results and facilitate an on-site workshop to implement cultural improvement strategies.

This process is designed for any successful use in any size organization that wants to understand their cultural strengths and weaknesses and work toward improvement while creating greater customer and employee satisfaction.  This will lead to higher financial performance.

 Organizational  results vary but issues that that are typically addressed by the process include:

• Employee turnover
• Improved on-time delivery to customers through process improvements.
• Higher Customer satisfaction ratings
• Improved employee communications which are more frequent and transparent
• Better employee relations
• Improved goal setting, and key performance indicator defining
• Refined performance review process
• Building trust within management

To learn more please join MANTEC for free webinar on January 12, 2011 from 11:00am to 12:00pm. Click here to register for the event.

Kent Keller
Human Resources Management Specialist

OSHA changes in effect

New leadership in OSHA has brought about changes in overall strategies and the way they inspect businesses. The costs and fine structures have not changed in two decades, but now that too is about to change.

On the positive side, an employer who has been inspected by OSHA within the previous five years and has no serious, willful, repeat, or failure-to-abate violations will receive a 10 percent reduction for history. Previously this was based on a three year period.

Conversely, employers that have been cited by OSHA for any high gravity serious, willful, repeat or failure-to-abate violations within the previous five years will receive a 10 percent increase in their penalty, up to the statutory maximum. Repeat violations will be subjected to historical look back increase from three to five years.

High gravity serious violations related to standards identified in SVEP will be citable as separate violations. A gravity-based penalty determination will be adopted, providing for penalties between $3,000 and $7,000.

Another important change is that employer size reductions have been lessened:

• Employers with fewer than 25 employees will be eligible only for a 40 percent penalty reduction, down from 60 percent.
• Employers with 26-100 employees will be eligible for a 30 percent reduction, down from 40 percent.
• Employers with 101 -250 employees will be eligible for a 10 percent reduction, down from 20 percent.

Final penalties will be calculated serially. Unlike the present practice in which all of the penalty reductions are added and then the total percentage is multiplied by the gravity based on penalty to arrive at proposed penalty. Current good faith procedures remain unchanged.

To help clarify the new changes MANTEC is conducting a workshop that will educate attendees on the various OSHA resources available and will guide them step-by-step on understanding code of regulations, OSHA inspection process, OSHA resources, updates, and cooperative programs.

Who should attend:

• If you do not have a well defined safety program, or do not understand the OSHA procedures.
• If you need help to understand the OSHA inspection process
• To gain awareness of the many OSHA resources,
• To become compliant and develop a health / safety program that may help you to reduce workplace injuries

The OSHA Code of Federal Regulations hands-on workshop will be held on December 14^th from 8:00am – 12:00pm. Register for the seminar here.

Kent Keller
kent@mantec.org

Business Transformation

In today’s business climate the need for change and taking control has become a large factor in a company’s overall success. Business Transformation is a program that is available to business owners to start them on the path to a better, more focused and accountable business structure. The term “Business Transformation” is defined as “The application of an individualized and continual system of strategy based business initiatives driving a culture of improvement and profitable growth.”

Basically, there is a review of where the company is today then a long term strategic plan is developed to hit the vision and mission of the company. Once this is in place, the strategic goals are put together into an action plan. A dashboard of metrics is developed to allow you to check your progress toward the goals.

The Goal is to develop a business transformation process that will provide a company with:
• Assessments that are required to develop a strategic plan.
• Assistance in plan development.
• Professional Business Advisor (PBA) services to facilitate plan implementation

Taking an online assessment tool is the first step in any transformation process. Then there is a guided tour of the facility to gain general knowledge of the business and an overview of the operations. A Q&A session is setup to gather information about the business. A review of the information is developed and lastly a discussion of opportunities for transformation takes place.

The Deliverables: A documented long term action plan that provides:
• An orchestrated set of initiatives.
• The long term strategic direction.
• A “big picture” guide to planning and decision-making.
• The leadership and cultural changes that are essential for achieving enterprise-wide transformation.
• A Tactical Action Plan for Business Transformation.
• A “Dashboard” of company metrics.

How to get started? Talk to MANTEC professional business advisor. The process has the capability to involve any company and the cost depends upon the wants & needs of the business principles.

Dave Fitzgerald
fitz@mantec.org

R&D Tax Credits

Tax incentives for Research & Development projects have become a hot topic among manufacturers in recent years. However, the most recent changes have dramatically expanded the number and types of businesses that are eligible to receive incentives.

On Monday, September 27th, President Obama signed the small business bill into law. Through various tax relief provisions, the bill will allow small businesses to reinvest in themselves and create new jobs. Notably, taxpayers that pay the alternative minimum tax (AMT) will be able to claim the R&D tax credit, along with other general business credits.

Even though these incentives have expanded, businesses still need help to take advantage of the opportunities and comply with the rules of eligibility. This is where the alliantgroup helps companies of all sizes with a free analysis and evaluation. If the benefit is large enough, the company can contract with the Alliantgroup to capture the incentive.

R&D is not confined to designing new products anymore. There is a much broader definition to the process. In brief, the definition encompasses any product or process development or improvement. Also, the industries that qualify for tax incentives include manufacturers, agricultural businesses, job shops, foundries, software designers, wine makers and many more. We discuss what activities the company partakes in and conduct our due diligence to find out if it’s worth pursuing the incentive. Most of the time it is. I’ve seen small companies end up with over $100,000 back in their pockets.

The payoff can be substantial. If your company is in the manufacturing or job shop industry there is a strong chance that you could benefit from an R&D Tax Credit Study. All manufacturers have R&D based on the tax definition, it’s just a matter of determining what the benefit may be.

MANTEC is conducting a class on “Tax Topics for Manufacturers” to provide guidance and begin the process of researching possibilities for capturing R&D tax incentives. To learn more go to www.mantec.org or register here.

Brad Mols
Alliantgroup
818-596-1500