Chain of connection

Posted on Jul 1, 2015 :: Cover Story
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Posted by , Insight on Manufacturing Staff Writer

When Oshkosh Corp. suddenly faced defense spending cutbacks in 2013, hundreds of workers were laid off. The ripple effects — how Oshkosh’s suppliers were impacted — were less visible.

For some of those companies, Oshkosh Corp. was their primary source of business. So when the producer of defense industry vehicles no longer needed their supplies, it hit them hard. A Department of Defense grant has been helping those suppliers diversify into other markets, and now New North Inc. has recognized the potential to take that program a step further.

The organization is launching an initiative to help build a region-wide, diversified supply chain. The program will help any manufacturer that wants to be a part of the new marketplace.

“This has morphed into something better than I expected it to be,” says Dave Thiel, executive director of the Waupaca County Economic Development Corp. and a member of the advisory committee for New North’s Defense Industry Supply Chain initiative. “What New North has decided is, ‘Let’s see how we can use this opportunity and make it work for us long term.’”

Businesses encouraged to enter profiles online

Heading the project is Connie Loden, New North’s senior project manager, who was hired in February in part to help lead the defense supply-chain initiative.

“We’re trying to target those defense contractors,” Loden says. “But anyone, any of the businesses in the region, would have the opportunity to enter their business profile into the marketplace.”

New North has been working with an advisory committee of regional business leaders to help develop this new, expanded supply chain marketplace, which would essentially be operated through a user-friendly web-based tool. Companies could input their profiles, including capabilities and certifications, and connect with other suppliers and industry supply chains.

The website is being built by Infinity Technology Inc. of Green Bay and designed by Coalesce Marketing and Design of Appleton, and will be beta tested in early August.

New North is planning a meeting for manufacturers on Aug. 25 to demonstrate the marketplace tool and explain how participation in the project will be beneficial to manufacturers, says Mark Kaiser, CEO of Lindquist Machine Corp. in Green Bay and a member of the business advisory committee.

“What we’re trying to do is develop a supply chain value proposition for different markets that we think would fit,” Kaiser says.

Those markets will help complete the directory, which also will be promoted at the Manufacturing First Expo & Conference in October to help get manufacturing companies on board.

“I think the challenge is to get it in front of the right people,” Kaiser says. “That’s always a challenge — to get it in front of the right people with the right value proposition that’s going to resonate.”
But once they see it, Kaiser doesn’t think it’ll be a hard sell.

“Manufacturing is one of the key drivers in Northeast Wisconsin,” Kaiser says. “And our manufacturers, because of our work through the NEW Manufacturing Alliance, are used to collaborating with each other. We have a history of doing that. I think that brings value as well.”

The marketplace will identify defense contractors so they can be available when defense projects are, Loden says. But the purpose of the Department of Defense grant is to also help those defense suppliers find new markets. New North is targeting defense contractors in the Oshkosh Corp. and Marinette Marine supply chains because they “both have potentially the same up and down cycle to deal with,” Loden says. Those companies number 700 to 1,000, she says.

Grant designed to curb economic extremes

The Oshkosh Region Defense Industry Diversification Initiative (ORDIDI) grant was awarded by the Department of Defense to the East Central Wisconsin Regional Planning Commission, which disbursed the grant through various agencies to implement several initiatives, including New North’s Defense Industry Supply Chain initiative.

“We’re seeing recovery from the downturn of the contracts, so there’s some opportunity for recovery in defense,” Loden says. “But one of the challenges in defense contracting that this experience has made us remember is that there are ups and downs. The interest and purpose of the defense industry supply chain project is to take those suppliers and help them diversify their customer base.”

Building a profile on the marketplace website helps connect companies into multiple industry supply chains. The marketplace will be searchable by keywords or by industry sectors, so there will be multiple ways of finding companies that have desired skills.

Loden already has been working with supply chains and industry clusters during her time at Progress Lakeshore. The five-county Lakeshore Industry Cluster Initiative and directory of resources is serving as a kind of template for what New North would like to implement.

Outcomes ‘very positive’

Among businesses that have participated in the clusters and the marketplace online, the outcomes they’ve experienced have been “very positive,” Loden says. More than 80 percent of company leaders said participation was beneficial and 25 percent received direct contracts as a result of their involvement. Half developed new business relationships.

“The research and the experience is that they will get direct benefits back through that participation,” Loden says. “And that comes in the form of new transactions.”

Additionally, business leaders have told Loden that through their participation in the Lakeshore cluster, they’ve made connections with other company leaders that they wouldn’t have been able to connect with before. Those relationships are key to developing new contracts.

“People often think about it being a competition, and how do you get the businesses that are potentially competitors to connect and share anything?” Loden says. “Really, you need to think about it instead as a ‘co-opetition’ type of approach.”

So far, New North has been working with partners including the Milwaukee-based Water Council, the Midwest Energy Research Consortium and the Wisconsin Aerospace Partners to develop supply chains in those sectors. The effort is also analyzing the capacity of the forestry industry in the northern counties and has plans to work with the food and beverage industry and alternative energy companies.

“I think people tend to forget that in sectors or cluster work, we tend to put them into silos: It’s manufacturing, it’s agriculture, it’s energy,” Loden says. “Well, often those all have interconnected relationships, so it makes sense to understand how they connect or what overlaps from industry to industry.”

That way, you can either present them to new markets or explore new innovation, she says.
“Contracting runs a pretty large gamut in regards to type of business, but what we’re working particularly on or focusing more on are those that are in the manufacturing sector,” Loden says.

Because of the focused nature of manufacturing, those companies might not have explored how their capabilities fit into other supply chains.

But the opportunities are there. For example, a company that makes labels for defense vehicles might find a market producing labels for other trucks or equipment, or a company that makes an O-ring for one industry might be able to refine it for another, Loden says.

“The potential for this is pretty substantial in regards to having a leading-edge resource tool for both businesses that are looking for suppliers, and also an opportunity for other business-to-business collaboration,” Loden says.

Raising awareness of suppliers in the region

The marketplace tool also will help companies become aware of the supplies and capabilities that are available locally.

“Often we think those businesses know each other, and sometimes they’ve heard each other’s names, but they don’t always know the breadth of the capabilities they can apply,” Loden says.

The marketplace website also will have features for posting company news, such as awards or new machine purchases. There also will be a section for posting requests and calls for innovation.

“New North has come up with a system that has great potential to help a lot of companies in the area,” Thiel says, “and maybe keep a bunch of dollars flowing inside the regional economy.”

Thiel says he’s looking forward to sharing the website in his community.

“It’s another tool and resource for me to tell Waupaca County businesses about,” Thiel says. “It’s kind of a one-stop place that they can go into and potentially find companies that they can work with, and that can help them in their business.”

The supply chain website will help the region grow manufacturing businesses, Kaiser says. He hopes it will help attract large companies to invest in the New North region since it will have a supply chain already in place.

Lindquist is a natural candidate to benefit from the initiative as it’s a contract manufacturing company that already does machining, fabricating and assembly for a number of different markets, Kaiser says.

“These are the kinds of things that New North needs to do, and will be really helpful for further economic development here,” Kaiser says. “It’s a great idea and a great concept, and I think if we do more of these kinds of things, it’s going to make a difference.”

Learn more Aug. 25
New North will hold a meeting for manufacturers on New North’s supply chain initiative on Aug. 25. Contact New North at (920) 336-3860 or visit www.thenewnorth.com for more details.

Interested companies also can attend a lunch-and-learn session during the second day of the Manufacturing First Expo & Conference, Thursday, Oct. 22 at the KI Convention Center in Green Bay.

On the web
www.thenewnorth.com/strategic-initiatives/defense-industry