Although the Great Recession has come and gone, much of Indiana’s industrial landscape continues to be something of a shell of its former self, with the number of manufacturers statewide shrinking steadily since 2004, according to the Manufacturing Extension Partnership Center at Purdue University. But this is nothing new or unseen for the statewide nonprofit organization, which was founded during another destructive recession in the 1980s and is again advocating for many of the Hoosier State’s manufacturing leaders during these still turbulent times by providing high value and affordable solutions for their many challenges. Leo Rommel tells why it’ll be more than enough to keep Indiana among the nation’s elite manufacturing states.
David Snow, the Director of the Manufacturing Extension Partnership Center at Purdue University, knows of quite a few instances where his organization made all the difference to an Indiana-based manufacturer.
But one time springs to mind.
The client, he begins, was Clabber Girl. You know them well. Snow does too. The famous baking powder manufacturer located in Terre Haute, Ind., boasts more than 280 products, ranging from cornstarch and cookie and dessert mixes to coffee, gelatins, and freezer pops. The firm, in conjunction with its Rumford products line, is selling No. 1 and No. 2 in the baking market today, Snow says.
But when executives at the family-owned, 140 employee firm recently began a five-year strategic plan that included incorporating a variety of Lean manufacturing principles to identify and eliminate waste, they turned to Snow’s organization for guidance and direction. The results, according to Snow, have been substantial.
Clabber Girl, according to organization officials, has realized a significant 0.6 percent reduction in waste, which will save them $317,000 by year’s end. Self-directed teams now work to optimize production flow as well as increase efficiencies and decrease waste. And changeover times were cut an average of 20 minutes per line, including a whole-grain cookies line that saw a 40-minute reduction in changeover time.
“Why is $317,000 a big deal?” Snow says. “It’s a big deal because it’s going straight to their bottom line. They’re in a narrow profit margin industry. When you’re performing at or near a world-class level, getting those small increments of improvement is a big deal, and that’s the case with collateral.”
What’s more, Clabber Girl management no longer needs to persuade its personnel on the various benefits of value-stream mapping and other Lean manufacturing techniques, Snow says, citing company officials. Employees have already bought in and overall teamwork is astonishingly up.
“We helped their self-directed teams work and optimize their production flow,” Snow says. “You’re in the food industry, which, again, is an extremely narrow profit margin business. Every time you are able to squeeze another one-tenth or two-tenths of a percent out of your cost of goods, that’s a big deal. For companies that get in with my team and work with us regularly on a very detailed process optimization, we often call this value-stream mapping, and it is one of the techniques we have used repeatedly with companies to shrink their cycle time and help them get product out the door faster, better, and cheaper.”
In essence, this is what the Manufacturing Extension Partnership Center at Purdue is all about. This is what it does, Snow explains, what it has done for nearly three decades. It rallies around state-based manufacturers – large, medium, and small, across various industries – when they’re in need of a helping hand. And it makes the industrial giants, like Clabber Girl, not only more efficient, but profitable too.
Its primary mission, according to its website, is to advance economic prosperity, health, and quality of life in Indiana and beyond. It provides a broad range of technology adoption, technical assistance, performance improvement, and education programs that engage nearly 200 faculty members, students, and full time staff with over 800 organizations each year. As advocates for Indiana’s thousands of manufacturers, MEP staff leverages resources in both the public and private sectors to help identify areas of improvement, streamline processes, and ultimately increase competitiveness.
The organization serves manufacturers, businesses, hospitals, health departments, physician practices, governmental units, schools, universities, not-for-profits, and new business start-ups, according to its website. It also serves businesses throughout the state with offices in Anderson, Evansville, Fort Wayne, Indianapolis, Jasper, New Albany, South Bend, West Lafayette, and Westville.
“There’s a lot of appreciation and respect for how we go about doing our business,” Snow explains. “We have a very stable core of staff with very low turnover, and we have a lot of perennial clients. A lot of companies who come to us year after year after year actually end up using our staff as their staff because they sort of embed our staff. What people outside of our organization notice is that we work with companies long-term once we start working with them. They don’t turn over. They become perennial clients.”
The organization has since been recognized as a top-performing NIST MEP Center, consistently ranking in the top 10 percent among 60 centers nationwide. It’s also particularly skillful in helping clients with its organizational sustainability, utilization of faculty, and implementation of what the organization calls Green Enterprise Development, which, according to Snow, is a unique and proprietary process improvement and workforce solution specifically designed for manufacturers.
“We are a land grant university, and there is some objectivity that comes along with that knowing that you’re not for profit and that you really don’t represent any other type of business, any other customer, or people in their supply chains,” Snow says. “So from that standpoint we’re a very neutral broker. One of the things that we’re known for is being able to facilitate problem-solving, something companies get hung up on all the time. They’ve got their normal business going on, and they need someone to come in and work with their teams to get problems solved. That’s where we come in.”
That, of course, makes sense. After all, problem solving is the foundation the organization was built on, during the fallout of another unforgettable economic slump.
Long before this latest recession – at long last on its way out, albeit at a snail’s pace, economists say – whacked America’s economy and employment figures all around, a previous economic downturn left detrimental, long-term damage throughout Indiana.
You remember it well. It was the one from the early 1980s, when it sent the Hoosier State’s largest economic sector at the time, manufacturing, into a freefalling nosedive that took years to climb out of.
According to Snow, statewide strategic plans at the time suggested many new initiatives, including state funding for Purdue University to provide greater business assistance. The Technical Assistance Program (TAP) was subsequently established in January 1986 with a primary focus on supporting technology adoption and performance improvement in the manufacturing sector. Purdue’s College of Engineering, Snow says, established and managed the program.
“Under the directorship of a senior engineering faculty member, a team of faculty and graduate students were engaged to perform short-term, no-cost assistance projects to address a broad range of technology and performance issues and opportunities in manufacturing,” Snow says. “The impact and outcomes of these various short engagements were measured and found to be very positive.”
In the late 1980s, Snow says, TAP added a fee-based information service that made available access to thousands of technical documents each year. The combination of direct assistance and information services was well received through the late 1990s when the internet began to replace the need for fee-based information services, he adds.
By the time Purdue implemented a strategic plan that substantially expanded engagement and service efforts throughout the university in 2001, TAP was involving faculty and graduate students from several colleges and was moved to the newly-formed Office of Engagement in 2002. In 2005, under the leadership of a new state administration, Purdue was asked to integrate Indiana’s Manufacturing Extension Partnership (MEP) center – previously managed by a state agency – with the Technical Assistance program. MEP, according to Snow, is a federal manufacturing competitiveness initiative established in 1990 by the National Institute for Standards and Technology, and each center carries out its mission with federal, state, and fee-based funding.
“The integration of Indiana’s center with TAP has enabled the manufacturing sector to engage a broad range of Purdue expertise,” Snow says, adding that the organization has 11 offices in Indiana, most within a 45-minute commute of most major manufacturers.
Also, in 2005, the Indiana Hospital Association requested access to teams of engineering and clinical faculty that could address performance improvement projects. The association provided startup funds that TAP used to establish a healthcare initiative that now serves hundreds of providers.
In subsequent years several additional TAP expansions occurred, some at the initiative of Purdue but most at the initiative of those served. “TAP’s current mission, scope of services, funding, involvement of Purdue personnel, number of partnerships, organizations served, and impacts have grown to approximately seven times that in 2000,” Snow says.
The resulting impacts, Snow says, have been “substantial.” Since program establishment in 1986, TAP initiatives, he says, have:
- Served over 12,000 organizations;
- Trained over 26,000 employees;
- Boosted or retained sales by $872 million;
- Increased investments by $217 million;
- Contributed to cost savings of $107 million;
- Created or retained over 11,000 jobs in the state.
Funding awards in the fiscal year ending June 30, 2012, according to Snow, totaled $11.3 million from 227 sources including federal agencies (56 percent of total), fees for service from the manufacturing and healthcare sectors (22 percent), state funding for business assistance (18 percent) and foundation, university partner, local economic development organizations and others (4 percent).
“Typically the companies that are coming to us are the small, medium-sized manufacturers, which are where our core mission audience is. They’re coming to increase their productivity and their output,” Snow says, adding that any manufacturer can receive up to 40 hours of Purdue faculty assistance to solve technical problems on a one-time per year basis. “We not only help them with expansion and growth, but 50 percent to 60 percent of the time, what we’re doing has something to do with getting product moved through their processes faster with fewer defects, fewer disruptions, in a safer manner.”
Each client, he adds, is administered a survey, via telephone or web, by an independent third party following the completion of a project. The purpose, of course, is to carefully evaluate how beneficial the organization was to the client. Thumbs-up reviews are the norm.
“In the last eight years, the companies that we have served have reported a combined economic impact of about $125 million a year,” Snow says, adding that the organization is expected to surpass the $1 billion threshold by year’s end.
“This is why clients and peers from other states want to see our process flow charts. They want to understand how we engage a client and how we sell our services,” he says. “They want to know the inner workings of our operation and how we manage our service delivery and things of that nature. There is a lot of benchmarking that goes on, and you can clearly see why.”
Manufacturing in Indiana has a lot going for itself nowadays. Snow says there is no inventory tax or gross receipts, and personal income taxes are among the lowest in the U.S. The state is also within a day’s drive for 80 percent of the U.S. population. Fabricated metals – used by countless industries –and food processing, he adds, remains its bread-and-butter sectors.
“We have such a diverse group of companies that I can’t say that any one sector is really leading the pack,” Snow says. “There’s innovation that goes on in all sectors, and I think the companies that are constantly seeking to make new products and get them onto the market as quickly as they can and grow their customer base are the ones that have the brightest future.”
Recently released figures from the National Association of Manufacturers (NAM) show this is happening in Indiana. The state, the organization says, has experienced the third-highest growth in manufacturing jobs since the start of the decades, with more than 53,000 jobs created. Furthermore, more than 16 percent of jobs in Indiana are manufacturing-related, the highest share in the country, according to NAM.
“Indiana is a manufacturing economy. We’re the most manufacturing-intensive state economy in the U.S. We’re here, right in the heart of the country, so there’s a big reach,” Snow says. “We can get to a lot of suppliers. We aren’t a big OEM headquarter state. We’re more of a supplier state, so we can serve a lot of industries here. I think the geographical location, the diversity of the types of companies we have, and our ability to be nimble and react to new customer requirements makes us very unique.”
But Snow is quick to point out that however impressive, the aforementioned statistics could be far more appealing. Manufacturing, he says, has approximately 425,000 employees in Indiana, a cut from the roughly 564,000 reported in 2004. And the 12,000 or so manufacturers that resided in the state in 2004 have dwindled to about 8,700 as of last year. These, obviously, are lasting effects from the more recent recession that, while now in the past, remains close by in the rearview mirror.
Other challenges, outside regulation changes and the nation’s extreme lack of skilled manufacturing workers, remain for Indiana-based industrialists, he says, including maintaining strong supply chain relationships, accurately evaluating their competition, continuing to make well-informed decisions about offshoring incentives, and exercising more creativity and innovation when problem solving, developing new products, and finding new customers.
“Every manufacturer should have an idea of where they stand in the products and services they make versus a world-class competitor,” Snow explains. “There are ways of doing that, of course, so my biggest fear for most manufacturers is that they aren’t strategically measuring themselves against their competition. Some may not even think they have competition.”
This latest recession, he adds, has served as something of a learning lesson to the loads of manufacturers who buckled down and pulled through the economic turmoil in the black.
“I think these companies are survivors and doing well. I really think the bloodletting is over with,” Snow says. “It seems to me like a lot of the off-shoring has slowed down. Companies are operating much more efficiently than they’ve ever operated before. To me, manufacturing in Indiana has a bright and promising future. We’re doing a lot of good things here, and our organization will work hard to make sure that continues.”