Big help for small players

National manufacturer assistance program lands on federal budget chopping block

Posted on Sep 15, 2017 :: Cover Story
Jessica Thiel
Posted by , Insight on Business Staff Writer

Walk into Shawano’s J&R Machine,
and it’s hard to miss the fruits of the company’s success: a 4-year-old expansion that includes a modern front office and tastefully decorated conference room, an exercise facility for its 35 employees and a manufacturing floor outfitted with state-of-the-art equipment.

Taking it all in, you’d never guess that 13 years ago, Tim Tumanic, the company’s president, stood before his employees on the shop floor and informed them the business might need to close its doors. The company started in 1992 as a small manufacturer of pins and bushings. By 2002, however, it began to experience difficulties.

“A lot of business had started leaving the U.S. and we started feeling the pinch of that,” Tumanic says. “What once were good, profitable jobs for us now were gone.”

Fighting back from the brink involved a years-long process, one Tumanic says began with a Wisconsin Manufacturing Extension Partnership workshop he and his employees attended in 2002. Called Introduction to Lean, participants learned about lean manufacturing through a circuit board assembly exercise.

0917_Cover_story_2_rgbTumanic says the experience inspired his employees to put their problem-solving skills to work, and they began to see how their efforts could improve quality and delivery. By the end of the day, his team delivered their circuit boards 100 percent on time with zero defects, leading to an all-profitable product.

“Everybody walked away from that with a pretty good feeling and understanding of how they could make those impacts,” Tumanic says.

While getting back to strong standing took more than a decade and help from several resources, Tumanic credits the WMEP with helping the company establish a foundation of lean principles and continuous improvement. Today, 35 employees strong and growing, Tumanic says J&R Machine continues to look to the WMEP as a partner.

‘Targeted all the time’

Despite success stories like J&R Machine’s and evidence showing the program provides a strong return on investment — nearly $9 for every $1 spent, according to the W.E. Upjohn Institute — the national
MEP program has landed on the chopping block in President Trump’s proposed budget.

The MEP was established nearly 30 years ago with a vision of providing a resource that meant no small- or medium-sized manufacturer — SMM — would be more than three hours away from expert help.

“If you have an issue in your plant, you can pick up the phone and say ‘Hey, come and help me,’” says Buckley Brinkman, executive director and CEO of the Wisconsin Center for Manufacturing and Productivity, the umbrella organization that oversees the WMEP.

Brinkman says the organization has been targeted practically since its inception. The Heritage Foundation, a conservative think tank, has long had the MEP on its list of programs recommended for elimination.

Rationale for cutting the program usually comes back to a few main arguments, Brinkman says. When it was formed, the MEP was designed to be self-sustaining after five years, with the organization taking technology from National Institute of Safety and Technology labs, introducing it to SMMs, collecting a royalty and paying for the process.

The MEP quickly learned if it wanted to get the technology out, it would have to improve the operations at SMMs first, and Congress soon removed the sunset clause. The self-sustaining argument, however, has remained. Some also argue that the MEP simply provides consulting services and those should be free enterprise.

“The MEP is one of those programs that’s a slip of the eraser in the federal budget — $130 million isn’t anything to these guys,” Brinkman says.

While the MEP’s $130 million price tag is minuscule in the scope of a federal budget that pushes $4 trillion, Brinkman says it’s easy to lump it together with 50 other programs and save $5 billion and then point to cutting a substantial number of programs.A lifeline for manufacturers

public-private partnership dedicated to helping SMMs, the MEP runs centers in all 50 states and Puerto Rico. Last year alone, MEP centers interacted with more than 25,000 manufacturers, resulting in $9.3 billion in sales, $1.4 billion in cost savings, $3.5 billion in new client investments, and creation and retention of more than 86,000 jobs, according to its website.

In Wisconsin, the WMEP handles the eastern and southern portions of the state, including the New North, and the Manufacturing Outreach Center out of the University of Wisconsin-Stout works with the northern and western regions. Brinkman says the two organizations have increasingly found success with sharing resources and leveraging their unique strengths.

The WMEP boasts a reputation for creating programs for SMMs, including ExporTech and profitable sustainability and supply chain initiatives. The MOC is strong in tech scouting and serves as a “good translator” between business and higher education, Brinkman says.

With its services, the MEP creates a base, Brinkman says. While other consultants create a solution for one business, the MEP’s work can be applied to many companies. This works well because below a certain level, many companies can’t afford to build a solution or pay the bill for a private consultant, he says.

“What we do is we’ll generate a solution, but we can amortize it across a larger base,” Brinkman says.

0917_Cover_story_3_rgbThis is vital for Wisconsin’s SMMs, Brinkman says. When people think of manufacturing, they tend to picture big players such as GE or Harley Davidson, he says, but nearly 99 percent of manufacturers in Wisconsin qualify as small or medium, meaning they have 500 or fewer employees, and around 80 percent have 20 or fewer.

Typically, an organization approaches the WMEP for either an offensive or defensive reason, Brinkman says. From an offensive standpoint, that could mean a desire for growth or a wish to integrate new technology. Defensive reasons may include workforce issues or problems with throughput.

Because of their size, many SMMs don’t have the expertise or resources to address problems on their own, says Mark Hatzenbeller, regional account manager for the north region for the WMEP. In his role, Hatzenbeller develops relationships with businesses in Northeast Wisconsin and is often one of the first people to go in and try to understand companies’ problems.

People leading SMMs tend to work in the business versus on the business, Hatzenbeller says. When companies enlist the services of the WMEP, the organization’s employees can go into a business and ask tough questions and identify issues that may have gone unnoticed.

“We can in turn see things they may not have seen because they’ve been in the business for so long,” Hatzenbeller says.

A new way to do business

Little Chute’s ATCAM Inc. sought the services of the WMEP after a major customer sent in an auditor to assess the company’s quality management system. With the help of the WMEP, in 2015, ATCAM attained ISO 9001 certification, an international standard that specifies requirements for a quality management system.

Michael Bultman, ATCAM’s vice president, says the process took about a year, and the WMEP came in, did an assessment, and then returned with a plan and worked side by side with the business to implement it.

“We’re such a small company. I did not have the time or expertise to do it myself,” Bultman says. “It took a daunting process and made it much easier.”

With just 12 employees at ATCAM, a thermal spray and custom machine shop, Bultman says he must “wear many hats.” The organization worked with Bultman, assessing ATCAM’s practices and helping tailor solutions.

After undergoing the process and attaining the certification, Bultman says ATCAM has been able to keep customers it otherwise would have lost, and two major suppliers returned. Today, Bultman says the company runs more efficiently. It now has a system for tracking data and quality levels, making reviews a much easier process.

“It gave us a new way to look at how we do business,” Bultman says.

An uncertain future

The MEP’s impact is clear, but its future isn’t. President Trump’s budget includes no funding for MEPs.

0917_Cover_story_4_rgbBrinkman says the House of Representatives budget surprised the organization. MEP had hoped the House would restore the full $130 million but only ended up budgeting $100 million. This would result in a 23 percent — or $700,000 — cut for Wisconsin. The Senate’s bill, however, calls for the full $130 million with language behind the number stating it rejects the president’s recommendation of cutting the MEP.

Brinkman does see opportunities to improve the MEP. Its centers traditionally have been fiercely state-focused, and this can forfeit the power of the network. Focusing more on the network could help more people readily understand the services the MEP provides, he says. Similarly, the organization could brand itself more clearly in naming.

Brinkman points to the issue of cybersecurity as an example of a way the MEPs could collaborate. Three of the nation’s centers have already developed a top-notch approach to cybersecurity. Others should tap into that and use it as a template rather than forging their own ways, he says.

Brinkman and others will continue to advocate for the MEP. He’ll travel to Washington twice in September
to lobby for the organization. However, with legislators already grappling with big issues in the form of health care, tax reform and the debt ceiling, he says he feels a great deal of uncertainty.

“Who knows what’s going to happen in this deal cutting?”

Want to advocate for the MEP?

If you’re concerned about the fate of the MEP, the WMEP recommends contacting your federal legislators. Joylynn Gilles, executive assistant for the Wisconsin Center for Manufacturing and Productivity, says building support in the House is especially important, but the organization also seeks to maintain support in the Senate.

Online: Tim Tumanic of J&R Machine describes working with WMEP.

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