CONNSTEP advantage magazine, Vol 3 Issue 1 by CONNSTEP

RESHORING MOMENTUM CONTINUES TO BUILD Harry Moser P 18

[RE] FOCUSED ON GROWTH

WHAT I’VE LEARNED...

Metallon re-focuses resources, secures long-term business.

Martin Seifert on what’s really important.

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VOLUME 3 | ISSUE 1

RIDING THE LEAN GROWTH WAVE

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Operational Excellence Business Growth

Manufacturers that move ahead and stay ahead choose CONNSTEP to guide their continuous improvement and growth strategies. Through close collaboration with our industry experts, CONNSTEP accelerates top line growth, operational efficiencies and long-term sustainability. Ready to experience a new level of success with your company? Bring us your business goals and weâ&#x20AC;&#x2122;ll work together to make them happen. CONNSTEP. Your total business improvement resource.

1.800.266.6672

www.connstep.org

table of contents

Riding the Lean Wave

Reshoring Momentum Continues to Build

Using A3 to Move CI Forward

A recent inductee into the Industry Week Magazine’s Manufacturing Hall of Fame, and with over 30 years of Lean leadership under his belt, Art Byrne’s recent book, The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company, illustrates how leadership teams, in all industries, need to think and act to become true Lean companies.

The benefits of reshoring are clear - economic stability, strong industrial base, motivation for the next generation workforce, and job growth. So why aren’t more companies bringing work back to the US?

You have questions, Laurel Suchecki finds the answers.

10 9 [Re] Focused on Growth With CONNSTEP conducting the company’s internal quality auditing, Metallon was able to re-focus internal resources on business development and market opportunities - capturing new customers and securing longterm business.

What I’ve Learned... Martin Seifert, Nufern East Granby, CT

22 Five Critical Strategies for Proﬁtable Growth The world has changed for the sales professional.

connstep.org

Letter from the publisher Once again, I was proud and excited to be a judge in the Connecticut Regional FIRST robotics competition at the end of March. The FIRST program is committed to the advancement in science, technology, engineering and math education. Hooray for that our manufacturers would say! We need all the assistance we can get to attract students into the fields that will fill the gap in our disappearing workforce. But as equally important, the foundation of this program focuses heavily on mentorship, the driving force, helping to shape students and develop solid foundations that will take them into their professional career. Dean Kamen, FIRST founder, outlined four areas of mentorship which his late brother helped to inspire. In reading his tribute, I could not help but see the similarities in guidance for students that are the same core principles that need to be followed in our adult life, both in our personal aspects of living and leading a successful business. As we, at CONNSTEP, have been focused on not only operational excellence but outlining strategies to grow a top notch organization, the challenge remains the same when growing the business as it does with keeping it Lean. Constant work which is needed by the leader and the management team in practicing on core values which will lead to sound direction in the business world.

that time and place and bit of luck come into play, but I don’t believe anyone will argue that any of these four elements which a true mentor provides are exactly what we continue to practice as adult leaders in today’s business world. 1.

3. 4.

The encouragement needed to bring out your strengths: never forget that even the world’s greatest athletes have a coach to train and inspire them… The tenacity to hold you accountable: good mentors will hold you accountable for your time line, your actions, and your resolutions to conflict... The insight that comes from experience: walking through a minefield is much easier when you have a map… The honesty to make sure you are successful: good mentors will always tell you the hard truth because their goal is your ultimate success…

Let’s never forget that leaders, as with great mentors, are people who truly motivate, and inspire. It is not mysterious or mystical. It is continuous, with a vision and a plan to bring out the best in the team, thus moving the entire organization to a much higher position, being able to focus on outcomes and growth. This year, our CONNSTEP Conference on June 5th will showcase many sessions on moving from operational excellence to strategies for growing the top line. There will be great opportunities for leaders and their teams to take advantage and learn. We hope to see you there as we continue to be the trusted mentor and advisor for developing strong businesses in Connecticut. May your reading be satisfying...

When CONNSTEP engages with a company to set strategic direction, it is more than just the tools, the numbers, and the time line. Yes, all important, but underlying all of this is the coaching, the mentoring, and the building of the culture which causes great leaders, and thus great organizations to flourish above the others. One may argue

Bonnie

For more information on The FIRST Competition, please contact Sue Glasspiegel at sglasspiegel@usﬁrst.com.

CONNSTEP advantage Magazine is a publication of CONNSTEP, Inc., all rights reserved. Reproduction encouraged after obtaining permission from CONNSTEP. CONNSTEP advantage Magazine is printed three times a year by CONNSTEP, Inc., 1090 Elm Street, Suite 202, Rocky Hill, CT 06067. 800.266.6672

Publisher

Editor

Contacts

Postmaster

Bonnie Del Conte President & CEO CONNSTEP

Rebecca Mead Manager, Marketing & Communications CONNSTEP

To subscribe: info@connstep.org To change your address: info@connstep.org For reprints, PDF’s: rmead@connstep.org For permission to copy: rmead@connstep.org To pitch a story: rmead@connstep.org

Send address changes to: CONNSTEP, inc. 1090 Elm Street, Suite 202 Rocky Hill, CT 06067

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Vol. 2, No. 3

contributors

Art Byrne is an Operating Partner with J.W. Childs Associates where he leads the implementation of Lean management at Childs’ portfolio companies.

While serving as CEO or an equivalent position, Byrne implemented Lean principles in more than 30 companies (including subsidiaries) and 14 countries during the past 30 years, giving him a matchless knowledge of how to turn around companies using a Lean strategy. Byrne began his Lean journey as general manager at the General Electric Company. Later, as group executive, he helped introduce Lean to the Danaher Corporation. As CEO of The Wiremold Company he quadrupled the company size and increased its enterprise value by 2,500% in less than 10 years. Byrne is the author of the recently released The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company.

Duane Cashin is a New Business Development Expert with a focus on helping manufacturing and service organizations build upon their current sales process resulting in increased revenues. The growth process consists of securing incremental new business from existing customers and identifying and onboarding new customers as well.

Duane is recognized as an expert in the areas of prospecting, sales process and sales management and has a broad range of business experience that has earned him membership in both Presidents Club and Circle of Excellence. In his business career he has held multiple positions ranging from Executive Leadership positions in several Fortune 500 companies to President & CEO of his own multi-million-dollar event graphics company.

Ken Cook is the Founder and Managing Director of Peer to Peer Advisors.

His background includes over twenty years consulting with high growth and middle market companies, focusing on marketing, sales and growth strategies. Ken’s consulting includes five years as a Senior Contract Consultant for Inc. Magazine. He’s written three books, and his fourth book, How To WHO: Selling Personified is due out June 2013. Ken also writes monthly columns for The Hartford Business Journal, The Worcester Business Journal, and Providence Business News.

John McCarroll is a Business Growth Advisor with CONNSTEP where he assists owners and executives of small and mid-sized Connecticut manufacturers plan and deploy game changing continuous improvement strategies.

John has over 40 years of manufacturing expertise. His professional experience includes several general management roles, primarily in the aerospace industry. John’s vast experience also includes R&D, total supply-chain management, global purchasing initiatives, marketing, and Lean Manufacturing. A graduate of the University of Michigan, John earned a Bachelor of Science degree and a Master of Science degree in Mechanical Engineering.

While President and CEO of his event graphics company, his organization served several NFL Super Bowls and the Salt Lake City Winter Olympics.

Harry Moser has more than 45 years of manufacturing experience [most recently as chairman emeritus of Charmilles Technologies Corporation (now GF AgieCharmilles)]. Moser is a leading industry spokesman for reshoring and for developing the skilled manufacturing workforce required by reshoring.

Michael Perrelli is the Marketing Specialist at CONNSTEP where he is responsible for developing the content, markets and promotions for CONNSTEP training, networking and outreach programs. Additionally, Michael works on organizational market development, website maintenance and trade show efforts.

Largely due to the success of the Reshoring Initiative, Moser was inducted into the 2010 Industry Week Manufacturing Hall of Fame and named Quality Magazine’s 2012 Quality Professional of the Year. He participated in President Obama’s 2012 Insourcing Forum, testified at a Congressional hearing on reshoring and manufacturing, and has been featured in numerous publications including The Wall Street Journal, USA Today and Bloomberg Businessweek.

Before joining CONNSTEP at the end of 2010, Michael worked for the Alcone Marketing Group, a promotional agency based in Darien and for SourceMedical in Wallingford, where he controlled multiple direct marketing and trade show efforts for the leader in ambulatory surgery center management software.

Laurel Suchecki is a Business Growth Consultant with CONNSTEP where she provides consulting services to a variety of organizations with a concentration in Lean Business Processes. Laurel assists clients seeking to improve their processes in both areas of through put and quality with the ultimate goal of bottom line growth. She provides both classroom and hands-on training.

Laurel has over 20 years of manufacturing experience, with a focus on continuous improvement. She has held a number of positions within operations, engineering and management and has facilitated events for improvement throughout North America as well as internationally. She has trained hundreds in Lean Principles to help create cultures of Lean thinkers.

Susie Zimmermann has more than 20 years of experience developing and managing marketing and communications for corporations, non-profit organizations, and government agencies. In her current work with clients from both the commercial and non-profit sectors, she provides strategic consulting on branding, product launches, messaging, positioning, employee communications and comprehensive marketing programs.

Prior to launching her own consulting business, Susie managed marketing and communications programs for the Department of Commerce’s Manufacturing Extension Partnership, AmeriCorps and the Peace Corps.

Laurel graduated with a B.S. in Electrical Engineering from the University of New Haven, with a minor in Business Administration.

connstep.org

upcoming events

The LEAD Program Begins September 23, 2013

Continuous Improvement Champion Certiﬁcation Begins October 1, 2013

The gist:

The LEAD Program teaches executives how Lean provides the gas pedal for proﬁtable growth, increasing the value of the business.

Who attends? The LEAD Program is a professionally facilitated, interactive roundtable for the top leader and their reports to engage in a meaningful dialogue about their speciﬁc business transformation to a Lean culture.

The gist: CICC is a ten-session course providing intensive exposure to the principles and practices needed to develop and sustain the Lean Enterprise. You will receive immediate reinforcement of the classroom learning by applying your training to a real-life project within your organization. Together with on-site mentoring and knowledge assessments, this approach dramatically reduces the time frame from training to bottom-line results.

http://bit.ly/LEADFall13 Who attends? Those tasked with implementing and sustaining a culture of continuous improvement within their organizations. http://bit.ly/CICCFall2013

2013 CONNSTEP Conference Moving Forward: Operational Excellence to Proﬁtable Growth The 2013 CONNSTEP Conference is an unequaled opportunity for manufacturers, healthcare organizations and service industries to learn, network and collaborate. You will HEAR how your peers have overcome challenges - including changing workforce culture, sustaining continuous improvement gains, and surviving leadership shifts. You will LEARN from leaders who have successfully transformed their organizations into high performance, high value businesses. You will GAIN insights into how to create an organization with a dual focus on performance excellence and profitable growth.

www.connstepconference.org

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Vol. 2, No. 3

ask the expert

Using A3 to Move CI Forward it is to only work on one element of the A3 at a time. Meaning, if you are holding an hour long meeting, but uncover a number of missing data points, then they are assigned and the meeting is adjourned until the data has been collected.

BY LAUREL SUCHECKI | Business Growth Consultant lsuchecki@connstep.org

ou have questions, Laurel Suchecki ﬁnds the answers. An expert in Lean and continuous improvement, Laurel answers your questions using her experience and the knowledge of industry’s top thought leaders.

Look around and ask yourself, is the way we work around here ideal? Are all of our goals being met? If the answer is no, then it is time to get started on improving the day-to-day issues that get in the way of continued success. Now, I don’t mean that you need to start holding a ton of kaizen events, but it does mean you’re ready to introduce the A3 tool to your employees. The A3 is a great tool that anyone can use to lead an improvement activity; it helps keep the leader focused by giving them a template for continuous improvement. Most meetings to resolve issues involve a group of people sitting around a table discussing an issue(s) randomly. Usually these meetings result in zero actions taking place with a follow-up meeting again the next week to discuss the same issues. What the A3 can do is provide you with that external structure to build your improvement from within. The owner of the A3 needs to get up, and yes I do mean get up (Reason: it helps maintain focus when looking forward) in front of the group and first explain to the team, the structure of the A3. The team needs to know where they are going and that there is a systematic approach in place to get there.

Everyone loves to jump to solutions, but they need to know that there will be plenty of time for that later on. The A3 owner then guides the team through each element of the template. It is important that the leader is always writing down the items discussed on a white board or aisle pad. Again, this will keep

The A3 is a great tool that anyone can use to lead an improvement activity; it helps keep the leader focused by giving them a template for continuous improvement.

The A3 should be discussed weekly with the manager of the A3 owner for feedback and mentoring. In my experience, I have also found it helpful to post it as a report for general knowledge of the team’s progress. In my 15+ years focusing on continuous improvement within manufacturing, I have found that the A3 tool works in any environment where Lean is being used – and am always impressed by how teams embrace the tool to keep their continuous improvement work on track with remarkable results.

LAUREL SUCHECKI is a business growth consultant, providing consulting services to a variety of organizations with a concentration in Lean Business Processes. Laurel assists clients seeking to improve their processes in both areas of through put and quality with the ultimate goal of bottom line growth. She provides both classroom and hands-on training.

the discussion focused and everyone will have a clear understanding of what is being agreed upon. During the meetings there will be missing information that is needed to complete an element of the A3. Each missing data point must be assigned to someone on the team to collect before the next meeting. I can’t stress how important connstep.org

biz lit

When Drive by Daniel Pink hit the bookshelves in 2009 it was greeted with rave reviews, and deservedly so. Pink explored what motivates us, and proposed that the best motivations come from within. According to Pink finding meaning and purpose in what we do drives our behaviors much more than any external reward system. I was hoping for the same level of breakthrough thinking in Pink’s latest, To Sell is Human. And Pink did deliver some value, just not as strongly or as richly as in his previous books. To Sell is Human begins with the premise that we are all in sales. In particular, the explosion of entrepreneurs in our new economy means that many more of us are selling ourselves and our products and services. Pink also posits that the abundance of information available to everyone changes the balance in a sales situation. As Pink states, in the past sellers knew more than buyers so buyer beware. Now that information is available and ubiquitous the balance has shifted; it’s now seller beware. Which means connectivity, not persuasion is the key to sales success. Sellers now have to connect with the buyer instead of persuading the buyer with feature and function superiority. Pink repeatedly returned to the world of selling cars to illustrate. For example, buyers can easily determine the capabilities and reliability of a car before going to a dealer. Plus, they know the dealer’s cost. As many car dealers freely admit buyers can find out exactly what a dealer paid for a car. From this foundation Pink spends the last two-thirds of the book delving into the processes and means for connecting with others. He talks about three characteristics for how to connect with others. The first is attunement; the ability to be in sync with another person. The second is buoyancy; the ability to be positive. The third is clarity; the ability to help others see things in new and enlightening ways. Pink moves onto what to do; three abilities needed in today’s sales world. “Pitch” is the distillation of your value. Pink presents six variations on the traditional elevator pitch. “Improvise” is as the word describes; being in the moment and not being scripted. “Serve” is all about delivering value as the buyer defines it.

Producing Prosperity: Why America Needs a Manufacturing Renaissance is, at its essence, a book about economic policy that makes a compelling case for why manufacturing matters. While it offers little practical advice for small business owners, for those that interact with elected officials, the message is one that they must hear and be made to understand. Pisano and Shih draw the link between manufacturing and innovation and economic growth. They begin by discussing the effect of once popular argument that “we’re entering a postindustrial society; that we’re really in the business of R&D, software, and services,” and that “the decline of manufacturing in the United States is a natural and healthy evolution toward a more knowledge-based economy focused on services and innovation.” The authors go on to discuss how this thinking has led to a deterioration of the “industrial commons” that they describe as “underlying … sets of technical and operational capabilities, some of which are shared across firms and even across industries … The commons is embedded in suppliers, customers, partners, skilled workers, and local institutions such as universities. Commons are sources of competitiveness for industries that draw from the shared capabilities.” Allowing critical elements of this “commons” to move overseas has made it increasingly difficult for America to compete in the world economy. The authors recommend a number of policy solutions – increased education of the workforce; investment in science and technology; and a national manufacturing strategy. While this book provides a high level discussion and recommendation for a national manufacturing policy (or lack thereof) it is well written, and an enjoyable read. JOHN MC CARROLL | CONNSTEP jmccarroll@connstep.org www.connstep.org

To Sell is Human is good. It’s just not enough. Being in sync, being positive and being clear. Communicating well, listening well, and thinking about the buyer. These are basic sales skills, particularly today. Pink seems to have written the book for the novice salesperson. To make his points he draws examples from decades-ago old school selling. His examples include lessons from the last remaining Fuller Brush door-to-door salesman. He compares a car dealership with elderly salespeople taking afternoon naps to the modern approach of CarMax. He talks about sales scripts at NCR Corporation started in the 1800’s and perfected through the 1950’s, 1960’s, and 1970’s. Most young salespeople weren’t even born when these sales techniques were practiced. Comparing them to today makes the contrast just too easy and simplistic. Pink hits on many of the key points that are important in today’s sales environment. These include the ability to connect with your customer on a real and authentic level, to listen, to collaborate, and to help customer’s buy what they value. If you are new to sales or haven’t yet realized that selling today is a totally different dynamic than it was even ten years ago, then Pink’s latest will have some revelations and breakthrough thinking. However, I wish Pink had written this ten plus years ago. Then it would have been enlightening. In today’s environment Pink’s latest is just reinforcing. KEN COOK | Peer to Peer Advisors kcook@peertopeeradvisors.com www.peertopeeradvisors.com

Peter Shankman - entrepreneur, speaker, worldwide connector and author of the newly released Nice Companies Finish First: Why Cut-Throat Management Is Over and Collaboration Is In will discuss his ﬁndings at the 2013 CONNSTEP Conference, June 5th in Hartford. All attendees will receive a copy of Nice Companies Finish First and will have an opportunity to have them signed.

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SMB success

[Re] Focused on Growth program, had their focus re-adjusted to concentrate on generating new business for the company. With their energy and efforts aimed at strengthening current customer relationships and uncovering new market opportunities, the new business development team was able to secure four new projects, all with long-term potential, with one of Metallon’s biggest automotive customers – Robert Bosch Corporation. They also attained Bosch’s “Preferred Supplier Award”.

BY MICHAEL PERRELLI | Marketing Specialist mperrelli@connstep.org Photograph by Dennis M. Carbo Photography

ith CONNSTEP conducting the company’s internal quality auditing, Metallon was able to re-focus internal resources on business development and market opportunities - capturing new customers and securing long-term business.

Metallon, Inc., located in Thomaston, Connecticut since its inception in 1964, is a high volume metal stamping and assembly facility with 47 employees. Currently holding ISO9001, TS16949, and ISO14001 registrations, Metallon actively serves the automotive, aerospace, and commercial industry markets. Situation Early on in the implementation of their ISO9001 / TS16949 system, Metallon had tasked multiple personnel with the quality auditing function. Simultaneously as these folks learned and began to audit the system, the economy slowed to a crawl. Senior leaders knew they needed to expand their customer base and strengthen current relationships with the ones they currently had. Top management decided to additionally pursue registration to ISO14001 to become a player in the world wide market.

Solution The company contacted CONNSTEP, Connecticut’s NIST/MEP affiliate, for their Internal Quality Auditing (IQA) program in a move designed to reallocate central Metallon resources to focus on company growth and the generation of new business. During the IQA program, CONNSTEP assisted Metallon in retaining its quality certification by assuming their internal quality auditing function and implementing ISO14001. CONNSTEP’s team of professionals looked for non-conforming aspects to which corrective actions should be applied and provided management with the feedback necessary to determine if its quality management system is being implemented effectively and efficiently. Metallon was registered to ISO14001 in mid 2011 with zero non-conformances on the registration audit. The three original auditors, relieved of their auditing functions at the outset of the

In addition to growing current relationships when the IQA program first started, subsequent IQA projects have provided Metallon with the ability to take hold of new technology and new business attached to it within the commercial industry. Due to the company’s ability to maintain superior quality performance levels, a customer within the commercial industry presented Metallon with a request for a new stamping process for composite decking plugs. The newly acquired technology and market has taken off and now accounts for a sizeable portion of their business within the industry. Results • Added 6 new jobs in various positions • $500,000 in new sales • $3,500,000 in retained sales • Cost / Scrap reduction savings of $100,00 • Reinvested $200,000 into equipment upgrades and workforce skills “CONNSTEP has been a tremendous asset in the implementation of our QEM systems and performing our internal auditing. They assisted and recommended ways to clear up any potential issues before they developed into something larger that could negatively affect our business or customer relationships. It freed up our limited resources and allowed us to focus on growing our business, optimizing our processes, increasing our efficiencies, dramatically reducing scrap, and minimizing the impacts to our environment. I highly recommend CONNSTEP.” - Roger Porter Quality Assurance Manager / QEMS Management Representative connstep.org

leadership insights

What Iâ&#x20AC;&#x2122;ve Learned... Martin Seifert President of Nufern, East Granby, Connecticut

BY SUSIE ZIMMERMANN | STAFF WRITER Photograph by Nick Caito Photography

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leadership insights

real love and intention was in electrical engineering. Even in high school I earned cash by repairing radios and TVs. My career was predestined. I came to the U.S. from Canada right after graduating from the university, because I knew there would be a greater opportunity to succeed in the U.S. Americans today are still the best in the world at applying resources to solve problems quickly. What I do best is engineering-based: writing patents, troubleshooting, developing products. I have a good sense of what things can and should do. I leave the other parts of the business—finance, HR, etc.—to others whom I’m incredibly grateful to. Their expertise makes up for my weakest skills and allows me to focus on my favorite parts of the job.

Nufern’s success emanated from its failure as a start-up. We began as a supplier of specialty fiber needs for three companies, and shortly after our financing was closed the telecom industry crashed. Everything stopped, but we had our investment money and a new facility, so we quickly needed to find customers to pay the bills. That’s when we turned to gyroscopes. Now we make the world’s best fiber lasers. I’m a pragmatic first generation Marshall Plan son. In spite of my interest in engineering, I quickly figured out that the best way to pay for college would be by doing field prospecting work in Alaska and Yukon and other locations in the summers. That lead to a degree in geology, but my

Hire wonderful people who are smarter than you, think similarly, and have complementary skill sets. You also must trust them completely, and have fun working and laughing with them. I take a holistic approach to life, and push people out the door at the end of the day. We run full blast all day at work, and then everyone needs to go home and take care of what’s really important. Life is too short. We better have fun every damn day. If work isn’t fun and mentally stimulating, you better find something else to do. But if you’re having a headbanging day, you have to get away. If you’ve lost the battle for the moment, it’s time to take a break. Change the pace. I sleep on it.

Actions I’m not proud of stick with me forever and become my guideposts. The pain of error is high enough for me that I work hard to avoid it. But everything is an experience to be learned from—if you didn’t learn, it was wasted. Even so, I don’t always learn the first time. Sometimes it takes many lessons before I get it. Everything is hard. The only way to be successful and overcome challenges is to work hard too. Then you can accomplish anything. Success is all about productivity. The job is never done. Don’t ever give up. Nothing is ever as dark as it looks today. Too many people give up early or before things even start. Confucius was right: “The longest journey begins with the first step.” With three sons in college, I will be working ‘til I’m 87. But that doesn’t sound so bad.

Martin will be part of a panel discussion about the realities of the Lean journey at the upcoming 2013 CONNSTEP Conference, June 5th at the Connecticut Convention Center. Learn more at www.connstepconference.org

Sure, I’ve had regrets. Enormous regrets. connstep.org

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thought leadership

Riding the Lean Growth Wave

BY ART BYRNE | Author, The Lean Turnaround

recent inductee into the Industry Week Magazine’s Manufacturing Hall of Fame, and with over 30 years of Lean leadership under his belt, Art Byrne’s recent book, The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company, illustrates how leadership teams, in all industries, need to think and act to become true Lean companies.

So you’re ready to start your Lean transformation. You have learned the Lean fundamentals of working to takt time, running one-piece-flow, establishing standard work, and connecting to the customer through a pull system, you must establish a clear vision of what you are trying to achieve. Now you should think about your Lean transformation in business terms. You are running a business, and you have an obligation to both your shareholders and your employees to do this as well as you can. I break this down into two parts. Your first objective should be to use Lean as a strategic weapon to improve your value-adding activities and vastly improve your results. Don’t be afraid to set an ambitious stretch goal however—if you don’t expect your employees to achieve dramatic results you are not respecting their potential. Your second reason to make the shift to Lean is the responsibility that you have to your people. I always felt that my biggest obligation was to the people in my organization. My first priority was to protect their jobs (a successful, growing

company does this best), and after that, to provide opportunities for personal growth and wealth creation. Switching to a Lean strategy for my businesses always created the type of learning environment that allowed these things to happen. Remember that everything starts with your strategy. You’ll need a strategy statement that articulates your vision and incorporates the stretch goals that are required to achieve it. The need to have your strategy statement brief, simple, and repeatable cannot be overstated. Even if your people don’t fully understand where you are taking them, being able to repeat the words of your strategy will make all of them understand that they are all part of the same team, going in the same direction. When creating your strategy, avoid saying anything that will limit your upside. Make your strategy broad enough and generic enough that your vision will fit any future acquisitions that you make. The fundamental transformation that you are undertaking is the removal of all the waste from your value-adding activities so that your business will be able to compete on its operational connstep.org

thought leadership

excellence. As a result, it is important that your strategy lay out the defining parameters of the operational excellence that you envision. Set your sights high. In fact, set all your targets above the best-known results in your industry in order to best the competition in all categories. For example, a company with three inventory turns should adopt 20 inventory turns as an initial goal. A target of simply doubling the inventory turns makes people think that they just need to work a little bit faster. If the goal is 20 turns, it is clear that you need to rethink everything. If you are an insurance company that takes 40 days to respond to an application for insurance, then set your goal at five days, or if you are a hospital with an average wait time in the Emergency Room of four hours, set your target at 30 minutes. The important point here is that you should not fear stretch goals. There is a common misconception that people will become demoralized in the face of stretch goals and stop trying. However, experience has repeatedly proved to me that weak goals are what hold people back. Once you begin your Lean transformation, be prepared to change EVERYTHING that you do with your enterprise. Converting to Lean changes everything. And while not everything has to change right away (in fact, some things canâ&#x20AC;&#x2122;t change until you have taken some initial steps such as getting your value-adding activity into a one-piece flow), you must still be aware that you canâ&#x20AC;&#x2122;t just delegate Lean to one spot. You must LEAD Lean in order for it to succeed. And be prepared for this to change you as a leader. One of the primary responsibilities of Lean leadership is to identify and eliminate

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thought leadership

“You must LEAD Lean in order for it to succeed. And be prepared for this to change you as a leader. One of the primary responsibilities of Lean leadership is to identify and eliminate the obstacles to your success.”

the obstacles to your success. One of the biggest mistakes that companies make during the transition to a Lean strategy is keeping existing systems and measurements in place and trying to just lay Lean on top of them. This is the normal approach for CEOs who view Lean as some “manufacturing thing.” Unfortunately, approaching Lean this way pretty much guarantees that you will not be successful. Let’s look at just one of the most important changes that your company must undergo in a Lean transformation—not to mention the most difficult as you will get lots of resistance. I’m talking about the need to change your accounting system; more specifically, to stop using a standardcost absorption system. Standard-cost accounting systems are incompatible with Lean. They are antithetical to Lean practice because they encourage and reward precisely the behaviors that you want to eliminate. In fact, I think of standard-cost accounting as “the antiLean.” For instance, in a Lean world, inventory is considered the root of all evil because it hides waste. The standardcost absorption accounting method takes the opposite view: it rewards those who build inventory, allowing them to defer a portion of their production costs to a later period. Dig a little deeper and you will find that absorption accounting also

twists behavior by making shop-floor managers more interested in hitting their absorption goals for the month than in making what the customers want. In most shops, managers know exactly which products represent the most absorption hours and, come the end of the month, if they are running behind on absorption hours, production will switch over to those high-absorption products—usually built only to populate inventory racks—so that the monthly profit and loss (P&L) statement looks good. Added to that, standard-cost accounting simply is not very accurate. In my experience, it is unusual to find a standard cost for any product that is within 30 percent of where it ought to be. Moving to the Lean accounting model not only takes away the barrier of the traditional standard-cost system, but also helps the entire organization clearly see what is happening. Lean accounting is also less costly (requiring less financial staff) and more accurate than standard- cost accounting, as it captures only actual costs. Better information facilitates better decision-making. A simplified and refocused accounting system also encourages, rather than fights, the transition to Lean.

of direct labor costs will greatly help your decision-making and facilitate the shift to Lean instead of fighting it. These actions will drive Lean principles even more deeply into the ways people work. They will help align and enable everyone in your company to see Lean as strategic, and to take advantage of its power as an unfair competitive advantage over your competitors. They will help everyone in your organization share the rewards of Lean growth.

Register for Art’s presentation at the upcoming 2013 CONNSTEP Conference and receive a copy of his new book, The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company. June 5, 2013 Connecticut Convention Center Learn more at www.connstepconference.org

Remember that this type of change does more than change the numbers on the balance sheets. Taking measures such as eliminating narrow definitions connstep.org

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Reshoring Momentum Continues to Build

BY HARRY MOSER | Founder, Reshoring Initiative

he beneﬁts of reshoring are clear - economic stability, strong industrial base, motivation for the next generation workforce, and job growth. So why aren’t more companies bringing work back to the US - to Connecticut?

Reshoring - the return of offshored manufacturing - has been steadily gaining momentum, with media, government and industry demonstrating a strong commitment to support American manufacturing and reindustrialization. Companies, consumers and the government are recognizing not only the economic feasibility of making things in the US, but also the importance of local manufacturing in the holistic cycle of production, innovation, R&D, IP protection, and the fostering of a skilled workforce and training programs that make all of the above possible. I sold EDM and HSM machine tools in Connecticut for 25 years and was always impressed by the skills of the local workforce. Connecticut, with its long, proud tradition of high-skilled manufacturing, should have lead the national reshoring trend but does not appear to have done so. This article is a rallying call to Connecticut companies to reshore, with the help of CONNSTEP, Connecticut’s Manufacturing Extension Partnership (MEP) and other supporting groups in the state. The next MEP sponsored reshoring webinar will be Wednesday, June 12 at 2pm ET. I hope to “meet” all of you there and help you and Connecticut reshore. The logic of reshoring is simple: produce near the customer. Overseas labor savings have been shrinking and the “hidden

costs“ of producing far from home are becoming both greater and more apparent. More companies are using Total Cost of Ownership (TCO) analysis to see these and other shifts, and as a result they are increasingly deciding to bring production back to the US, which is still the largest market for most products. To meet the needs of the domestic market, it makes sense for U.S. companies to expand here instead of offshore, and for foreign companies to locate their factories close to U.S. consumers. In addition to helping companies make more money, reshoring will help balance the approximately $600 billion/year U.S. trade deficit. Completely balancing the trade deficit would increase U.S. employment by about 6 million and significantly reduce federal, state and local budget deficits. The Reshoring Initiative is a non-profit organization dedicated to helping companies recognize the true cost of offshoring by understanding their Total Cost of Ownership (TCO). TCO is defined as a total of all relevant costs associated with making or sourcing a product domestically or offshore. TCO analysis helps a company objectively identify, forecast and minimize Total Cost. The Reshoring Initiative provides a free online TCO Estimator™. To determine the TCO, the user provides 36 answers that are used to calculate 26 unit costs. The Estimator accumulates a single cost value for a product connstep.org

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sourced from a particular supplier. The user repeats the process for each vendor, and can then objectively compare the TCO for the same product from multiple vendors, whether local or offshore. In addition to the TCO Estimator software, the Initiative also provides a database of 400+ reshoring articles and a Case Studies feature where companies can share their real cases of reshoring. All resources are free on the website at: www.reshorenow.org. The following shows the distribution of reasons (costs) that motivated published cases of reshoring. Distribution of Reasons for Reshoring Number of Cases Cited

REASON Wage & currency changes

Quality, warranty, rework

Freight cost

Delivery

Travel cost/time or local onsite audit

Inventory

Intellectual property loss or risk

Total cost

Communications

Image/brand (prefer US made)

Difficulty of innovation/ product differentiation

Loss of customer responsiveness

Emergency airfreight

Natural disaster risk

Price

Green considerations

Burden on staff

Political instability

Product liability

Personnel risk

Regulatory compliance

Source: Reshoring Library 3.9.13

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Companies across all sectors of manufacturing have reshored, or have committed plans to bring work back to the U.S. The following is a sampling of some of the 200+ companies that have/will reshore.

Company

Product

Reasons Production Reshored

Wright Engineered Products

Plastic injection molding for medical & telecom

High transportation costs; rising foreign wages; quality defects common

China

Santa Rosa, CA

Hydraulic die cutting presses

Restoring company’s long “Made in USA” heritage; warranty costs reduced by 90%; improved speed to market; rebuild employee sills and morale

Taiwan

Cincinnati, OH

Morey Corp.

Circuit boards

Quality issues; inventory cut by 94%

China

Woodbridge, IL

Ace Clearwater Enterprises

Welded assemblies for aerospace & energy

QC issues; customers willing to pay more for high precision and quality

Hungary

Torrance, CA

Bailey Hydropower

Hydraulic cylinders

Fast delivery versus five weeks “on the water”; long supply chain issues with quality

India

West Knoxville, TN

Spectrum Plastics

Injection molding for aerospace and medical

Intellectual property; quality issues; gained new business

Freeman Schwabe Machinery

From

Ansonia, CT and Minnesota

Links to articles on many of these cases can be found at: www.reshorenow.org/book/table, and in the reshorenow.org library

Geography of U.S. Reshored Jobs For whatever reason, thus far there are not many documented cases of reshoring in Connecticut. It is not clear whether Connecticut is late to reshoring or is less public about its successes. If your company has reshored, please let us know by submitting your Case Study, as described at the end of this article.

US Regions

States Represented

Number of Companies Reshored

South

AL, GA, FL, KY, MD, NC, SC, T, X, VA, WV

Midwest

IL, IN, KA, MI, MN, MO, OH, WI

West

CA, ID, OR, WA

Northeast

CT, NJ, NY, PA, VT

From sampling of 101 reshored companies in the Reshoring Initiative Library 3.14.13

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More Ways to Improve Manufacturing and the US Economy Bringing enough jobs back to restore our economy and balancing the trade deficit will require a broad range of actions and behavioral change across most sectors of our society, as outlined below. The highest priority is on developing a much stronger skilled workforce. Reshoring helps recruit that workforce by demonstrating to students and society that local manufacturing is coming back and providing solid long-term careers. Connecticut has a great reputation for workforce skills, so it should be able to aggressively reshore. Player

Present Condition

Needed Behavior

OEM Manufacturers

60% decide on offshore v. reshored sourcing based on price or other simple measure

Consistently use Total Cost of Ownership (TCO)

All Manufacturers

Underinvesting v. China and much of Europe; training, especially apprenticeship training, generally poor

Apply Lean, automation, TOC, QRM and other means to close any remaining TCO gap; start extensive apprenticeship programs

Community Colleges

Overall, Community Colleges have dropped manufacturing programs, but they are starting to come back

Emphasize importance of manufacturing careers and offer a wide variety of manufacturing career preparation

U.S. Government

Overly focused on exporting, starting to appreciate reshoring

Make providing the workforce needed, for the nation to be competitive, the highest priority

Too high a priority on lowest cost products

Source based on TCO, instead of ex-works price; make it easy for consumers to find Made in America products and to understand quality differential

In general, good quality, slow response, higher prices, poor training

Use TCO as a sales tool to educate customers on the benefits of buying domestically from them; respond fast to preserve the natural advantage that flows from proximity to the OEM customer

K-12 Education System

Guidance counselors primarily guide to the best college student can enter v. best career path student can achieve

Dramatically improve student performance, especially in STEM fields and preparation for manufacturing careers; provide the tools for students to compare a skilled manufacturing career to outcomes from attending 4 year college

Universities

Focus on enrollment numbers; regardless of major

More focus on engineering, especially manufacturing and industrial engineering majors

Focus is on competing for factories

Focus on helping companies decide not to offshore, or for those that have offshored, help with reshoring and/or localized supply chain; focus as much on getting OEMs to outsource locally as on OEMs new facilities/ locations

Brick and Mortar Retailers

Contract Manufacturers

States (EDC organizations)

We believe that the fastest, most cost effective, stable way to strengthen local economies is to motivate and enable reshoring and help companies see the benefits of not offshoring. The Reshoring Initiative is ready to help you develop plans for your community, train and network your OEMs and contract manufacturers, and provide publicity for your reshoring successes! How You Can Accelerate Reshoring Use the TCO software: • Help local companies make more objective sourcing decisions • Convince local companies to stay, expand and source locally • Convince foreign companies to locate in the U.S. Use Reshoring Case Studies to promote: • Local companies • Your area as the “U.S. Reshoring Capital” or as a manufacturing hub • Use the Reshoring Library to identify prospects Put as much emphasis on local outsourcing as on new OEM factories: • Organize state or regional Purchasing Fairs to help local suppliers replace offshore sources for the OEMs • Build clustering/moats/ecosystems around your companies • Attract suppliers and OEMs to join the cluster Use the success of reshoring to motivate local manufacturing skills training programs.

Reshoring Initiative Harry Moser 847.726.2975 http://www.reshorenow.org http://www.reshorenow.blogspot.com Twitter: @reshorenow LinkedIn: Reshoring Discussion Forum

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Five Critical Strategies for Proﬁtable Growth in the New Sales Reality

BY DUANE CASHIN | New Business Development Expert duane@duanecashin.com 5. The world has changed for the sales professional, as I am sure you are aware! Would you like to know what decision makers and influencers in the B2B marketplace say they expect from those they do business with in 2013? Let me share two direct quotes from over 30 interviews with decision makers, and their influencers, that have taken place in the last 90 days: • “I expect any sales professional calling on me to have done some research. I want them to demonstrate to me they have “some” understanding of my industry and company. I expect them to be clear on the products and services we offer and the types of customers we serve. And I want to see evidence of this quickly.” • “I will not take seriously any sales person who obviously is “chasing commission dollars.” I will make time for a sales professional who has done their research, asks relevant and intelligent business questions and can offer some ideas that will help me gain a competitive advantage. I want to meet with business people.”

If these comments represent the general consensus of top level decision makers today, then you have some work to do. The life of a professional sales person demands excellence in selling skills, product knowledge and in the business world of your prospects. Without exception every business person interviewed offered up the same advice: “As a result of the recession the bar has been raised for all of us. At this point in time I expect more from the sales people I meet with than at any other time in the past.” This expectation puts pressure on us to take our game up several notches. Based on that reality here are 5 tips that will enable you to satisfy the demands of today’s savvy and demanding buyers: 1.

One of the fastest growing industries in the

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world today is the “Information” business. The more information that is available to us the more we crave. Capitalize on this need by becoming an Information Broker. Begin to view yourself as one who is expected to provide relevant and meaningful information to your prospects and customers. Study and prepare yourself to have business conversations around business topics such as: return on investment and vertical market characteristics. Your ability to engage in conversations around these two issues will differentiate you from your competition in a big way. You will impress your prospects and customers with your business insight and savvy and will be viewed as a credible source of information and ideas. Become Trilingual. Your ability to establish business rapport will be in direct proportion to your ability to speak the language of the individual you are attempting to communicate with. Learn to speak the language of: Decision Makers, Influencers and Gatekeepers. Become aware of what it’s like to walk in their shoes, and understand their world. With this insight you can focus your questions and suggestions to ensure you will score a direct hit. Speak their language and make it all about them! Create relevant business questions. It has been said that you can tell how clever a person is by their answers and how intelligent they are by their questions. Make research and business study a regular event in your weekly schedule. As you are studying the unique dynamics of various vertical markets, and how to articulate ROI, take the key information you uncover and use it to craft relevant and meaningful business questions. Set a goal to create an inventory of such questions and you will realize an immediate improvement in your ability to establish business rapport and will be viewed as an insightful contributor. Prove It! Today’s savvy buyers are numb to such claims such as: “We have the best product,” “Our service is second to none,” “We will beat anyone’s price.” In fact the more such claims you make the more you will be viewed as a transactional product peddler, a time waster, and will quickly erode any chances of establishing credibility and trust in the eyes of your prospect or customer. Create an

inventory of examples and 3rd party evidence to back up your claims. You will be most impactful when you can back up each and every claim you make with an example of how your idea has been effective with another organization and the positive results they were able to realize. Also, letters of testimony from your satisfied customers go a long way in establishing credibility and belief in the eyes of your prospect and customer. This one tip alone could have a significant positive impact on your business success and peace of mind; develop a Pipeline Passion. The most dreaded aspect of the sales process is prospecting. Obviously it is a result of the rejection that we are subject to and often gets pushed off to the side. Consistent prospecting is the single most powerful activity you can do that will have a profound positive impact on your success. Become a student of every aspect of prospecting. Focus on those companies that you are best prepared to serve. Become crystal clear on the importance of prospecting, set specific goals as to the number of qualified leads you want in your pipeline and do whatever it takes to get it done.

The successful sales professional today is firing on all cylinders and is keenly aware of the challenges the prospect faces. Gone are the days that a sales person could get by with simply a “sparkling personality.” Don’t look at today’s business world as an overwhelming and insurmountable mountain that needs to be climbed. Look at it as an opportunity to grow. Look at it as an opportunity to realize a level of professionalism that is guaranteed to separate you from your competition.

A presenter at this year’s conference, Duane will delve deeper into what you must do to become a worldclass sales organization. Join us June 5th for the 2013 CONNSTEP Conference at the Connecticut Convention Center. Learn more at www.connstepconference.org

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Keynote Presentations by Visionary Thought Leaders

Art Byrne

Gary Kusnierz

Peter Shankman

Jose Palomino

Author & Former CEO, Wiremold

Vice President, Performance

CEO, Entrepreneur, Adventurist,

Sales-Centric Marketing Strategist,

Corporation

Excellence, Affinity Health System

Author

Author, Entrepreneur, Professor

Panelists include leaders from Connecticut organizations Pegasus Manufacturing, Rushford, Dymax, Birk Manufacturing, Danbury Hospital, Capewell, Lex Products, Connecticut Hospital Association, Siemens, Z-Medica, Connecticut Spring & Stamping, Hospital for Special Care, and many more...

Moving Forward: Operational Excellence to ProďŹ table Growth Immerse yourself in an inspiring program including keynote speakers, interactive workshops, and networking. You will be energized with real, actionable ideas to lead your organization to performance excellence and profitable growth.

The 2013 CONNSTEP Conference brings together the experience of industry experts and fellow leaders to share their best practice methods on how to implement strategies that help organizations thrive.

June 5, 2013 | CT Convention Center, Hartford www.connstepconference.org

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For the small to medium size business that wants to remain competitive and grow in local and global markets, CONNSTEP provides technical and business solutions proven to have both immediate and sustainable long-term impact. Unlike other professional consultants that focus only on a single component of your business, CONNSTEPâ&#x20AC;&#x2122;s multidisciplinary team uses a deliberate holistic approach, providing innovative results-driven top line growth solutions that impact the entire organization. Since 1994, nine out of ten CONNSTEP clients have reported increased profitability. In 2011 alone, data provided by an independent survey credited CONNSTEP with impacts of more than $160 million dollars, including new and retained sales, and the creation and retention of nearly 1,600 jobs. Our experience and network of local, state and federal resources, make us not only unique but unequaled in our field and in our state.

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