2012 business journal may 2012 b section

8/2/2019 2012 business journal May 2012 B Section

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BINSID

ETHE

BusinessJournalOF WEST CENTRAL OHIO

May 2012

Regions Manufacturing

Let us make our diversity in stamping products

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Theres a common refrainamong mainstream econo-mists that, when it comes toAmericas long-term growth,it doesnt matter whether thecountry has a strong manufac-turing base. Nor, they say, doeshaving a healthy industrialstructure create greater incomeequality. If we want growthand fairness, the thinking goes,we shouldnt focus on specificindustries. We should pursuebroad policies, such as invest-ment in education and progres-sive income taxation.

Earlier this week, formerCouncil of Economic AdvisersChair Christina Romer arguedthat there was nothing spe-cial about manufacturing thatwould justify public policiesaimed at supporting it.

But manufacturing is spe-cial. Its more innovative andpays better wages than the restof the U.S. economy. Thosefacts arent accidents of his-tory. There are reasons behindthem that are likely to persistfor the foreseeable future. Ifwe want more rapid economicgrowth and a more equal dis-tribution of income, we cant

be indifferent to whether theUnited States has a healthymanufacturing sector.

WHY MANUFACTURING

IS DIFFERENT

Lets start with innovation,which is the force that powers

long-term improvements in ourstandard of living. Here, manu-facturing strongly outperformsthe rest of the U.S. economy.Manufacturers are responsiblefor more than two thirds of allcompany-performed domes-tic research and developmentspending, even though theyonly generate about 11 percentof Americas GDP. More than athird of all U.S. engineers workin manufacturing. And about22 percent of all manufactur-ers introduced a new productor service between 2006 and2008, compared to 8 percent ofnon-manufacturing firms.

Why is manufacturing moreinnovative compared to otherbusinesses? The sector haslong benefited from the relent-less application of technical

knowledge and skill. Everyyear, production workers, en-gineers, and managers findbetter ways to solve the techni-cal problems of production. Asa result, production becomesmore efficient and, from timeto time, the production processgets reorganized.

That recipe for innovationdoesnt work as well in the rest

of the economy. In the servicesector, only a few productionprocesses, such as filling ordersfor fast-food meals or schedul-ing hospital patients, rely heav-ily on solving technical prob-lems, often through the use of

Manufacturing is special: WhyAmerica needs its makers

See MANUFATURING, page 3B


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2B TheBusinessJournal May 2012

In 2009, the Ohio Department of Development designated MAGNET as the go toEdison Technology Center serving the motor vehicle and parts manufacturingindustry statewide. MAGNET looks forward to providing its proven consultingexpertise to that industry segment throughout Ohio while continuing to serve the

entire manufacturing community in Northern Ohio with programs and activitiesdesigned to increase your growth and improve your profitability.

Making Manufacturing Innovative and Productive

Consistently successful manufacturers know that top line growth and greater

profitability are possible by increasing productivity and making enterprise-wideinnovation a high priority in their companies.

MAGNETs experienced industry professionals have proven expertise capableof assisting manufacturers of all sizes and segments in their efforts to achievegreater growth and profitability.

We specialize and are noted for being able to customize programs which meetthe unique needs of each client who comes to MAGNET for help.

How do we measure success and what can you expect from working withMAGNET consultants?

A 56-to-1 Return on Investment

Our clients report that for every dollar they spend with MAGNET, they receive backan average of $56 through sales growth and/or cost savings! MAGNET offersmanufacturing help in these areas:

MAGNETAn Edison Technology Center

MAGNET, designated by the Ohio Department of Developmentas one of the states seven Edison Technology Centers, is alsothe Third Frontier Center of Excellence in Product Innovation.

MAGNET focuses its Edison Technology Center activitieson a variety of product and process innovation and commercialization services to bothestablished and early-stage technology based businesses.

MAGNET has partnered with the Ohio State University Center for AutomotiveResearch (CAR) to generate increased growth and profitability for that industry

throughout Ohio. Both organizations are active participants in the Ohio AutomotiveIndustry Council established in 2009.

MAGNETAn MEP Service Provider

MAGNET is a provider of Manufacturing Extension Partnership (MEP)services through the National Institute of Standards and Technology (NIST), an agencyof the United States Department of Commerce.

MEP is a national network of specialists who understand the needs of manufacturers.Through MEP, manufacturers can access public and private resources that enhancegrowth, improve productivity and expand capacity.

MARK SCHARBONEAU IS MAGNETS

SENIOR BUSINESS CONSULTANT

FOR NORTHWEST OHIO

Scharboneau has more than 20 years experience

in project management, product engineering,

global sales and business development working

with companies such as Sheller-Globe, Ford,

Toyota, and Nissan.

WWW.MAGNETWORK.ORG

For more information about MAGNET, contact Mark Scharboneau

at 419.595.0002 or [email protected]

Profitability Improvement

Lean/Six Sigma Transformation Quality Systems & Problem Resolution Lean Product Development Workforce and Organizational Development Supply Chain Optimization Facility Layout & Design Inventory Productivity Analysis

Business Growth

Growth Planning Market Diversification IDEA Engineering Product Design, Engineering,

Development and Launch Sustainable Manufacturing


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May 2012 TheBusinessJournal 3B

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better information technology. But whenit comes to most services, the productisnt as clearly predefined as in manu-facturing, so its hard to make it moreefficiently. What counts as good service

-- be it a clean hotel room or a healthypatient -- is often a matter of opinion, andthe process of production is frequentlyinseparable from the service itself. Takethe restaurant business. Its pretty hard tomake waiters serve meals faster.

Because so much less is known abouthow to innovate in the services sector,an economy that loses its manufacturingbase ends up sacrificing much of its abil-ity to innovate at all. The consequence is

slower growth in living standards.Manufacturing also pays more thanother industries. A forthcoming Brook-ings report by Susan Helper and myselfshows that even after taking into accountthe characteristics of workers and jobsthat influence wages (such as education,occupation, union status, geographic lo-cation, and demographics), manufactur-ing workers earn about 8 percent more perweek than employees in other industries.Lower-wage workers especially benefit,earning about 11 percent more than theirpeers in other businesses, while high-wage workers earn just 4 percent more.

Although manufacturings wage ad-vantage may have shrunk after decadesof offshoring and union decline, thereare reasons why it still exists and willlikely continue. Because manufacturingis more capital-intensive than the rest ofthe economy, downtime is more costlythan in other industries. Manufacturers

pay a premium to attract and retain work-ers who are skilled and motivated to keepthe machines running. Factories are alsotypically larger than other business estab-lishments, so it is more difficult for man-agers to control the production process inmanufacturing. That means productionworkers have to take greater responsibil-ity than in other industries, and manufac-turers pay more to find the employeeswho can handle it.

On average, manufacturers are likely tocontinue to have greater need for skilled,motivated production workers than othercompanies. As long as they do, they willcontinue to pay more than other compa-nies. And as long as that happens, the loss

of manufacturing jobs will depress Amer-ican wages, especially for workers at thelowest rungs of the economic ladder.

MANUFACTURING JOBS ARE

WORTH MAKING

Manufacturing matters for innovationand income distribution, but its not theonly thing that matters. Industry-neutralpolicies as well as industry-specific onesare appropriate and necessary. Moreover,there are some parts of the non-manu-facturing economy, such as computersoftware, that have some of the same ad-vantages (though not the size) of manu-

facturing. Likewise, not all manufacturingfirms or industries are equally innovativeor high-paying. Public policy should besensitive to these differences.

While Americas manufacturing sectorno longer lords over our economy as inthe past, its still a crucial force. It is moreinnovative and pays higher wages thanother industries. Because thats likelyto be the case for the foreseeable future,public policy should support a healthymanufacturing sector.

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Manufacturing(Continued from page 1B)


4/84B TheBusinessJournal May 2012

Ramp up your workforce with the West Central OhioManufacturing Consortium!

Benets of membership: Special access to Rhodes State College and Apollo

Career Center classes

Supervisor leadership training

Continuous improvement workshops to help yourcompany identify and solve sources of problems

Access to trained employee prospects at all skilllevels

Trained advisors on awarding college credit for youremployees work experience, saving time andmoney on your companys ongoing training needs

Create and coordinate timely specialty trainingprograms for your company

Training available LOCALLY

The WCOMC represents manufacturers throughout this region,

addressing their various workforce needs.

For more information on the WCOMC and its Advanced Manufacturing

Pathway program, visit www.wcomfg.com or call 419-995-8353.

(419) 995-8406www.RhodesState.edu/WEDCE

4240 Campus DriveLima, OH 45804

Solutions, etcas a component of the

Workforce and Economic

Development/Continuing

Education Division at Rhodes

State College, supports

business growth and

development at all levels witha complete range of training,

consulting services and support

services designed to make you

and your business successful.

Specializing inEntrepreneurship,Training andCertifications

With the local economy rebounding,many manufacturers in west central Ohioare switching from survival mode toissues associated with hiring new work-ers and training their current workforces.Manufacturers concerns have also fo-cused on how they will replace experi-enced skilled workers who are approach-ing retirement. The Lima-based WestCentral Ohio Manufacturing Consortium

(WCOMC), representing 20 regionalmanufacturers with over $9 billion in an-nual sales, has been working with manu-facturers in addressing these and othertraining needs.

One of the positions in biggest demandin manufacturing in this region involvescomputer numerical control (CNC).CNC machinery involves programmingand operating computerized automatedmachine tools, instead of manually oper-ating them. In response to manufacturersdemand for CNC operators, the WCOMChas offered 10-week/two-course CNCOperator certificates from Rhodes StateCollege, giving students hands-on train-ing with CNC machines, auto CAD andblueprint reading.

Supervisors are among the high-se-niority employees retiring, or approach-ing retirement. The WCOMC and HuskyLima Refinery have sponsored a monthly

series of supervisor leadership work-shops to address proper management ofpersonnel and situations facing supervi-sors in the workplace. Workshops havecovered topics ranging from communi-cation, managing change, motivation andmorale, conflict and confrontation, man-aging multi-generational workforces andconducting successful meetings. Theseries will continue in 2012-13, with top-ics such as building team trust, holdingpeople accountable, coaching for optimalperformance, conducting and handlingdifficult conversations, delegating andinfluencing and conflict resolution. Thisseries has provided many manufactur-ers affordable, local training for some of

their high-skilled staff.The supervisor leadership series has

resulted in Rhodes State College and theWCOMC creating an associates degreefor supervisors. In addition to addressingskills needed by todays supervisors, thisdegree also gives the student the flex-ibility to emphasize technical trainingin quality, safety or engineering fields.Attendance in the supervisor leadershipseries may apply toward credit in this de-gree.

With many employers, increasingskills in the workplace require incum-bent workers to pursue degrees or certifi-cation, such as the supervisor workshopsand degree. However, there is merit to

awarding credit to an employee from theeducation accumulated from work ex-perience. Staff members from RhodesState College have undergone trainingfrom an accredited program on awardingcollege credit for experience. Awardingcredit for experience reduces the timeand cost of earning a college degree. Aprospective students certifications, workand other experiences are assessed, and

credit is awarded based on applied andcourse knowledge gained from these en-deavors.

These new programs are the resultof the WCOMC communicating and re-sponding to regional manufacturers toaddress their training needs, said con-sortium director Doug Durliat. We arein the process of presenting a workshopseries that addresses continuous improve-ment in the workplace. If interested inmore information on the continuous im-provement series, supervisor leadership,CNC or other training programs, contactthe WCOMC 419-995-8353.

Members of the WCOMC have accessto these and other programs at specialrates. To learn more about the West Cen-tral Ohio Manufacturing Consortium,its members, advanced manufacturingpathway certification and other programscheck its website www.wcomfg.com


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We invite you to find a new Center for your company

Henry County!Henry Countys central location puts you in the middle of not only Northwest Ohio, but the entire

Midwest. For more information on what Henry County can offer you, your company and youremployees, contact CIC Director Ralph Lange at (419) 592-4637 or online at www.hencoed.com

In a New York Times op-ed, Chris-tina Romer, the former chair of PresidentObamas Council of Economic Advisors,arguescontra her former bossthat thereis no compelling justification for policiesaimed at supporting U.S. manufacturing.

She lays out and rejects a few theoreticaljustifications for supporting manufactur-ing, including the idea that there are largepositive externalitieslarge social benefitsrelative to what private companies can cap-turetied to the sector. Her arguments areunconvincing. Most important, there arelarge social benefits associated with inno-vation and manufacturing plays an outsizedrole in creating them. In so doing, manu-facturing makes a disproportionate contri-bution to economic growth.

Romer ignores the strong evidence that

company research and development (R&D)is worth much than the companies capture.For example, Charles Jones and John Wil-liams estimate that R&D spending wouldhave to quadruple to be high enough tomeet the nations needs. Some economistshave estimated that R&Ds rate of return tothe nation as a whole (not just to the compa-nies that pay for it) is as high as 30 percent.There are also positive externalities asso-ciated with less formal innovations such

as improvements in production processes.Like the results of R&D, these innovationscan be copied or adapted by competitors.

As one of us has written for a forthcom-ing Brookings report, all of these inventiveactivities and innovative accomplishmentswould be vastly diminished without themanufacturing sector. Although it makesup only about 11 percent of GDP, manu-facturing accounts for 68 percent of all do-mestic R&D spending by companies in theUnited States. While only about 9 percentof all U.S. jobs are in manufacturing, 35percent of all engineers work in manufac-turing. National Science Foundation datashow that only 8 percent of all non-man-ufacturing companies introduced a newproduct or service between 2006 and 2008,while 22 percent of manufacturing compa-

nies did so. The same percentages apply tothe share of companies that added a newproduction or business process. Finally,corporate tax data from the IRS reveal that60 percent of income from royalties fromintellectual property goes to manufactur-ing firms.

The innovation spillovers that manufac-turers produce flow throughout the U.S.economy, not just to other manufacturers.The gains are especially large at the region-

al scale becausecontrary to Romers mis-interpretation of the literaturecompaniesperform better when they are located nearmany other firms than when they are moregeographically isolated. When a manufac-turing establishment relocates offshore, the

related companies in the region suffer dis-proportionately.Even aside from geographic linkages,

manufacturing firms are tightly linked toinnovation in the U.S. service sector. Forexample, high-technology services suchas Internet services, telecommunications,computer systems design, and scientificresearch depend on R&D in manufactur-ing. When a manufacturer moves produc-tion offshore, the skilled researchers andengineers it used to employ in this countryare no longer available to high technology

service providers. As the regional benefitsof that knowledge creation emerge andgrow in the foreign location, a larger shareof inter-related service activities (includingmanagement, administration, marketing,logistics, legal, and information technol-ogy) also relocate offshore to be closer tothe center of production.

Romer mentions tax breaks, trade re-strictions, and direct government invest-ment in specific industries as examples

of wrongheaded policies aimed to supportmanufacturing. In fact, though, there are awide variety of sensible policies that thefederal government could adopt to counter-act the market failures associated with inno-vationmarket failures that result in large

part from manufacturings outsized con-tribution to innovation. Desirable policiesinclude improving the training of workerswithout four-year degrees, strengtheningR&D tax credits, and expanding assistanceto small and medium-sized manufacturersto help them improve their economic per-formance.

Meanwhile, at the regional and statelevel, there are also many useful interven-tions available to policymakers. Regionalleaders can attempt to leverage their spe-cific strengths in the sector and shore up

their weaknesses by observing variouscapacities with respect to invention andresearch capacity, workforce skills, ac-cess to finance, and infrastructure needs.Improvements along these lines can ben-efit manufacturers and avoid wastefulcorporate giveaways to business. Givenmanufacturings special contribution toregional and national economies, such in-terventions would likely be well worth theinvestment.

The outsized benefits of U.S. manufacturing


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234 S. Jefferson St.Delphos, Ohio

Dedicated to improving the agribusiness and food

production chain since 1818.Leader in North America for consistent, high-quality oilseed

processing products and service.

Ph. 419-692-6010www.bunge.com

MillerPrecision

Industries, Inc.131 Progressive Dr. P.O. Box 489

Ottoville, Ohio 45876

CNC Precision MachiningSmall & Large Production Runs

Fixtures Special Machinery & ToolingSecondary Machine Operations

Phone 419-453-3251 FAX 419-453-3030www.millerprecision.com

Bunge Limited, founded in 1818, is aleading agribusiness and food company

with integrated operations that circle theglobe. Bunge employs over 32,000 employ-ees at over 400 facilities in over 30 coun-tries. Bunges agribusiness operations pro-cess and transport tens of millions of tons ofcommodities every year.

The facility at 234 South Jefferson streetis a soybean processing plant originally builtin 1909. The business purchases soybeanswhich are processed to make soybean oiland meal. The oil is sent to the companys

other locations for further processing intovarious food products. The meal is sold to

customers both locally and globally. TheDelphos facility has been making soybeanoil and meal since the 1940s.

The Delphos facility employs 53 people.Office hours are 8am to 4:30pm, with

grain receiving hours of 7a to 7p. TonyMatney is the Facility Manager.

For more information about the company,visit the companys website at :

www.bunge.com

Miller Precision Mfg. Ind. located in theOttoville Industrial Park has been in busi-ness for over 24 years. We offer CNC Preci-sion Machining Services including turning,drilling, tapping, and milling. MPI not only

provides machine service we also offer as-sembly, and many other value added ser-vices. Parts produced are used in lift trucks,military, food service, medical devices andmany other places that require precision ma-chine parts.

Being in high tech manufacturing, equip-ment is always changing. Keeping up withthe new technology has heped MPI staycompetitive in the world markets. The staffat MPI has the precision machining experi-

ence and training to produce a quality prod-uct that our customers come to expect.

Facilities at the Ottoville location com-prise of 72,000 sq. ft. of manufacturing andwarehousing. Also in Van Wert Industrial

Park we have 40,000 sq. ft. of machining andwarehouse space to serve our customer base.In 2011 we added a new facility in St. Marysthat now allows us to do large stamping andfabrications to keep up with capacity to meetcustomer demands. MPI has also added staffto meet the needs of our customers.

As new technology and equipmentchange you can find MPI in the change formany years to come.

Miller Precision Mfg. Ind.

Rudolph Foods CompanyFor 57 years, Rudolph Foods commit-ment to excellence has been passed fromgeneration to generation, just like theirlove for flavorful, traditional pork rindssnacks. In 1955, John Rudolph learned ofan untapped market for pork rinds and theOhio entrepreneur quickly launched hisown company producing pork rinds fromsmoked bacon rinds.

Two years later the company would face

its first big challenge, the meat industry nolonger smoked the rind on the bacon. Un-der pressure to save their fledgling business,Johns wife, Mary, put her home economicsbackground to work and invented a revolu-tionary process the company still uses to-day.

With Marys surefire recipe and Johnsleadership, Rudolph Foods became a snackindustry success story. Since then, John and

his sons have continued to dramaticallyexpand their business and the family tradi-tion.

Today, the company has six facilities inthe United States and three Internationalventures. With over 350 employees, Ru-dolph Foods has launched into new areas ofthe snack food industry while maintainingits presence as the nations leading producerof pork rinds and cracklin snacks.


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Dedicated to Excellence since 1920

This Surgical Suite Renovation wonfrst place in the national construction awards!

As your healthcare construction partner, Ferguson Construction Company has the expertiseto remodel or build your medical facility, allowing you to provide your patients with the

best possible care. Call us today to learn more about our extraordinary constructioncapabilities; wed be happy to help you with your next construction project.

Sidney: 937-498-2381Dayton: 937-274-1173Columbus: 614-876-8496Indiana: 812-546-0333www.ferguson-construction.com

ince 1920S

Have you seen what weve built lately?

Wilson Memorial HospitalSidney, Ohio

The Ohio Department of Development an-nounced the Ohio State Small Business CreditInitiative (SSBCI), a program that will accessfunding of more than $55 million to increaseprivate lending and the amount of credit avail-able to Ohios small businesses.

Through Ohios SSBCI, we are helpingto fill a major challenge faced by Ohio smallbusinesses that seek capital to expand and cre-ate jobs, said Christiane Schmenk, Director ofthe Ohio Department of Development. Ohiossmall businesses are the backbone of our econ-omy and providing them the tools they needto be successful will create a healthier Ohioeconomy.

The State Small Business Credit Initiative(SSBCI) was created by the Small BusinessJobs Act of 2010, which provided $1.5 bil-lion to strengthen state programs that supportlending to small businesses. Under the SSBCI,

states were offered the opportunity to apply forfederal funds for state-run programs that part-ner with private lenders to increase the amountof credit available to small businesses. TheOhio Department of Development applied forand received an allocation totaling $55,138,373from the U.S. Department of Treasury.

The Ohio Department of DevelopmentsBusiness Services Division will administer threefinancing programs utilizing SSBCI funds:

Collateral Enhancement Program (CEP) is a new $33.1 million program that providesbanks with cash collateral deposits to use as

additional collateral for loans made to eligiblesmall businesses. Under the CEP, the Ohio De-partment of Development will open an interestbearing account with a lender and deposit upto 30 percent of the loan amount where thereis a collateral value shortfall as determined by

the lender and the Ohio Department of Devel-opment (up to 50 percent of the loan amountfor minority-owned businesses or businesseslocated in a Historically Underutilized BusinessZone).

Ohio Capital Access Program (OCAP) supports small business lending by establish-ing a loan guarantee reserve pool at a lendinginstitution that participates in the OCAP. Thisprogram has been expanded (increased to $5million) and can provide financing to for-profitand nonprofit businesses that may be experi-encing some difficulty obtaining business loansusing conventional underwriting standards. The

state, the lender, and the borrower each pay asmall contribution fee into the pool. The reservepool is available to the participating lender forrecovery of any losses on any loan they haveenrolled in the OCAP.

Targeted Investment Program (TIP) isa new $15 million venture that supports thegrowth and expansion of targeted small busi-nesses within Ohios manufacturing, produc-tion, and logistics value chains. TIP offersdebt instruments tailored to the specific needsof the company at or below market interestrates.

Ohio receives fundingto leverage private lending


8/8


Applications & Industries ServedAerospace: Tooling / Fixtures Main Assembly Jigs

Plant Equipment

Material Handling

Flight Hardware

Gas Turbine Packaging

Auto & Consumer:

Auto Components

Transfer Lines

Appliances

Medical Devices

Electrical Components

Capital Equipment:

Printing Presses

Machine Tools

Plastics Machinery

Constructions Equipment

Process Machinery

Paper / Nonwovens Machinery

Marine: Propulsion

Generator Sets

Commercial and Military

Lubrication Skids

Fuel Skids

Design and Manufacture Gas Turbine

Inlet Exhaust Systems for Commercial and

Military, Both Foreign Domestic

Coldwater Machine Co. LLC / 911 North Second Street, Coldwater, OH 45828 / Phone: 419.678-4877 / Fax: 419.68.3565 / Email Us

Coldwater Machine

FWS Weld System

2008 Coldwater Machine Company All Rights Reserved An ISO 9001:2008 Company 1-419-678-4877 Email Us

Friction Welding | Process | System Sizing | Special Machines | Assembly | Fastening | Metal Cutting | Metal Forming | Packaging | Testing & Inspection |Tube Notching | Welding | Fixtures & Gages | Custom Application | Inspection | Weld | Design Engineering | Design Engineering | Dies | Electrical Controls | Project Management |

Precision Machining | ISO 9001:2008 Compliant

2012 business journal may 2012 b section

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