BusinessJournal

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May 2012
OF WEST CENTRAL OHIO

Regions Manufacturing
Let us make our diversity in stamping products your greatest asset. We build deep drawn, blank, in die welding tooling, in die assembly, transfer ready and progressive dies. We use materials such as cold rolled steel, hot rolled steel, galvanized, copper, brass, stainless steel, bronze, aluminum (including prepainted). We served the following industries- Automotive, Appliance, Enclosure, Lawn & Garden, Power Equipment, Burial Casket, Construction, Lift Truck, Aluminum Siding, Furniture, Electrical, Medical and Heavy Duty Truck. From rapid prototyping, design through development, tooling builds and modifications, metal stampings, fabrication and welding, we are here to serve you. Our recently added Mazak NTX Champion 4 x 8 laser featuring Sigmanest will enhance our fabrication capabilites, along with the addition of our 100 Ton 10 Accupress brake & OTC Robotic weld cell.

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long-term improvements in our standard of living. Here, manufacturing strongly outperforms the rest of the U.S. economy. Manufacturers are responsible for more than two thirds of all company-performed domestic research and development spending, even though they only generate about 11 percent of Americas GDP. More than a third of all U.S. engineers work in manufacturing. And about 22 percent of all manufacturers introduced a new product or service between 2006 and 2008, compared to 8 percent of non-manufacturing firms. Why is manufacturing more innovative compared to other businesses? The sector has long benefited from the relentless application of technical knowledge and skill. Every year, production workers, engineers, and managers find better ways to solve the technical problems of production. As a result, production becomes more efficient and, from time to time, the production process gets reorganized. That recipe for innovation doesnt work as well in the rest of the economy. In the service sector, only a few production processes, such as filling orders for fast-food meals or scheduling hospital patients, rely heavily on solving technical problems, often through the use of
See MANUFATURING, page 3B

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Manufacturing is special: Why America needs its makers

Theres a common refrain among mainstream economists that, when it comes to Americas long-term growth, it doesnt matter whether the country has a strong manufacturing base. Nor, they say, does having a healthy industrial structure create greater income equality. If we want growth and fairness, the thinking goes, we shouldnt focus on specific industries. We should pursue broad policies, such as investment in education and progressive income taxation. Earlier this week, former Council of Economic Advisers Chair Christina Romer argued that there was nothing special about manufacturing that would justify public policies aimed at supporting it. But manufacturing is special. Its more innovative and pays better wages than the rest of the U.S. economy. Those facts arent accidents of history. There are reasons behind them that are likely to persist for the foreseeable future. If we want more rapid economic growth and a more equal distribution of income, we cant be indifferent to whether the United States has a healthy manufacturing sector. WHY MANUFACTURING IS DIFFERENT Lets start with innovation, which is the force that powers

DESIGN

TOOLING

PRODUCTION

FABRICATION

WELDING

705 Kuenzel Drive | New Bremen, Ohio 45869 877.629.3295 | www.newbremenmachine.com

In 2009, the Ohio Department of Development designated MAGNET as the go to Edison Technology Center serving the motor vehicle and parts manufacturing industry statewide. MAGNET looks forward to providing its proven consulting expertise to that industry segment throughout Ohio while continuing to serve the entire manufacturing community in Northern Ohio with programs and activities designed to increase your growth and improve your profitability.

MAGNETAn Edison Technology Center

MAGNET, designated by the Ohio Department of Development as one of the states seven Edison Technology Centers, is also the Third Frontier Center of Excellence in Product Innovation. MAGNET focuses its Edison Technology Center activities on a variety of product and process innovation and commercialization services to both established and early-stage technology based businesses. MAGNET has partnered with the Ohio State University Center for Automotive Research (CAR) to generate increased growth and profitability for that industry throughout Ohio. Both organizations are active participants in the Ohio Automotive Industry Council established in 2009.

Making Manufacturing Innovative and Productive

Consistently successful manufacturers know that top line growth and greater profitability are possible by increasing productivity and making enterprise-wide innovation a high priority in their companies. MAGNETs experienced industry professionals have proven expertise capable of assisting manufacturers of all sizes and segments in their efforts to achieve greater growth and profitability. We specialize and are noted for being able to customize programs which meet the unique needs of each client who comes to MAGNET for help. How do we measure success and what can you expect from working with MAGNET consultants?

MAGNETAn MEP Service Provider

MAGNET is a provider of Manufacturing Extension Partnership (MEP) services through the National Institute of Standards and Technology (NIST), an agency of 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 enhance growth, improve productivity and expand capacity.

A 56-to-1 Return on Investment

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

Business Growth
Growth Planning Market Diversification IDEA Engineering Product Design, Engineering, Development and Launch Sustainable Manufacturing

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

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.

For more information about MAGNET, contact Mark Scharboneau at 419.595.0002 or mark.scharboneau@magnetwork.org
WWW.MAGNETWORK.ORG

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better information technology. But when it comes to most services, the product isnt as clearly predefined as in manufacturing, so its hard to make it more efficiently. What counts as good service -- be it a clean hotel room or a healthy patient -- is often a matter of opinion, and the process of production is frequently inseparable from the service itself. Take the restaurant business. Its pretty hard to make waiters serve meals faster. Because so much less is known about how to innovate in the services sector, an economy that loses its manufacturing base ends up sacrificing much of its ability to innovate at all. The consequence is slower growth in living standards. Manufacturing also pays more than other industries. A forthcoming Brookings report by Susan Helper and myself shows that even after taking into account the characteristics of workers and jobs that influence wages (such as education, occupation, union status, geographic location, and demographics), manufacturing workers earn about 8 percent more per week than employees in other industries. Lower-wage workers especially benefit, earning about 11 percent more than their peers in other businesses, while highwage workers earn just 4 percent more. Although manufacturings wage advantage may have shrunk after decades of offshoring and union decline, there are reasons why it still exists and will likely continue. Because manufacturing is more capital-intensive than the rest of the economy, downtime is more costly than in other industries. Manufacturers pay a premium to attract and retain workers who are skilled and motivated to keep the machines running. Factories are also typically larger than other business establishments, so it is more difficult for managers to control the production process in manufacturing. That means production workers have to take greater responsibility than in other industries, and manufacturers pay more to find the employees who can handle it. On average, manufacturers are likely to continue to have greater need for skilled, motivated production workers than other companies. As long as they do, they will continue to pay more than other companies. And as long as that happens, the loss

of manufacturing jobs will depress American wages, especially for workers at the lowest rungs of the economic ladder. MANUFACTURING JOBS ARE WORTH MAKING Manufacturing matters for innovation and income distribution, but its not the only thing that matters. Industry-neutral policies as well as industry-specific ones are appropriate and necessary. Moreover, there are some parts of the non-manufacturing economy, such as computer software, that have some of the same advantages (though not the size) of manufacturing. Likewise, not all manufacturing firms or industries are equally innovative or high-paying. Public policy should be sensitive to these differences. While Americas manufacturing sector no longer lords over our economy as in the past, its still a crucial force. It is more innovative and pays higher wages than other industries. Because thats likely to be the case for the foreseeable future, public policy should support a healthy manufacturing sector.

www.flatlandssupply.com

Monday - Friday 7:30aM-5:00pM Saturday 8:00aM-noon 1220 E. Jackson St. Van Wert, OH 45891 Tel: 419.238.1233 Fax: 419.238.1317

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We bring electricity to life.

Well keep your manufacturing facility connected.

Sidney Office 840 S. Vandemark Rd. Sidney, Ohio 45365 937.498.2357

Muncie Office 3100 E. County Road 350N Muncie, Indiana 47303 765.284.1594

Lima Office 2250 Central Point Parkway Lima, Ohio 45804 419.222.1109

www.sidneyelectric.com

OH LIC #21016

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With the local economy rebounding, many manufacturers in west central Ohio are switching from survival mode to issues associated with hiring new workers and training their current workforces. Manufacturers concerns have also focused on how they will replace experienced skilled workers who are approaching retirement. The Lima-based West Central Ohio Manufacturing Consortium (WCOMC), representing 20 regional manufacturers with over $9 billion in annual sales, has been working with manufacturers in addressing these and other training needs. One of the positions in biggest demand in manufacturing in this region involves computer numerical control (CNC). CNC machinery involves programming and operating computerized automated machine tools, instead of manually operating them. In response to manufacturers demand for CNC operators, the WCOMC has offered 10-week/two-course CNC Operator certificates from Rhodes State College, giving students hands-on training with CNC machines, auto CAD and blueprint reading. Supervisors are among the high-seniority employees retiring, or approaching retirement. The WCOMC and Husky Lima Refinery have sponsored a monthly

series of supervisor leadership workshops to address proper management of personnel and situations facing supervisors in the workplace. Workshops have covered topics ranging from communication, managing change, motivation and morale, conflict and confrontation, managing multi-generational workforces and conducting successful meetings. The series will continue in 2012-13, with topics such as building team trust, holding people accountable, coaching for optimal performance, conducting and handling difficult conversations, delegating and influencing and conflict resolution. This series has provided many manufacturers affordable, local training for some of

their high-skilled staff. The supervisor leadership series has resulted in Rhodes State College and the WCOMC creating an associates degree for supervisors. In addition to addressing skills needed by todays supervisors, this degree also gives the student the flexibility to emphasize technical training in quality, safety or engineering fields. Attendance in the supervisor leadership series may apply toward credit in this degree. With many employers, increasing skills in the workplace require incumbent workers to pursue degrees or certification, such as the supervisor workshops and degree. However, there is merit to

awarding credit to an employee from the education accumulated from work experience. Staff members from Rhodes State College have undergone training from an accredited program on awarding college credit for experience. Awarding credit for experience reduces the time and cost of earning a college degree. A prospective students certifications, work and other experiences are assessed, and credit is awarded based on applied and course knowledge gained from these endeavors. These new programs are the result of the WCOMC communicating and responding to regional manufacturers to address their training needs, said consortium director Doug Durliat. We are in the process of presenting a workshop series that addresses continuous improvement in the workplace. If interested in more information on the continuous improvement series, supervisor leadership, CNC or other training programs, contact the WCOMC 419-995-8353. Members of the WCOMC have access to these and other programs at special rates. To learn more about the West Central Ohio Manufacturing Consortium, its members, advanced manufacturing pathway certification and other programs check its website www.wcomfg.com

Ramp up your workforce with the West Central Ohio Manufacturing Consortium!
Bene ts of membership:
Special access to Rhodes State College and Apollo Career Center classes Supervisor leadership training Continuous improvement workshops to help your company identify and solve sources of problems Access to trained employee prospects at all skill levels Trained advisors on awarding college credit for your employees work experience, saving time and money on your companys ongoing training needs Create and coordinate timely specialty training programs for your company Training available LOCALLY

Solutions, etc
as a component of the Workforce and Economic Development/Continuing Education Division at Rhodes State College, supports business growth and development at all levels with a complete range of training, consulting services and support services designed to make you and your business successful.
Specializing in Entrepreneurship, Training and Certifications

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.

4240 Campus Drive Lima, OH 45804

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

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The outsized benefits of U.S. manufacturing

In a New York Times op-ed, Christina Romer, the former chair of President Obamas Council of Economic Advisors, arguescontra her former bossthat there is no compelling justification for policies aimed at supporting U.S. manufacturing. She lays out and rejects a few theoretical justifications for supporting manufacturing, including the idea that there are large positive externalitieslarge social benefits relative to what private companies can capturetied to the sector. Her arguments are unconvincing. Most important, there are large social benefits associated with innovation and manufacturing plays an outsized role in creating them. In so doing, manufacturing makes a disproportionate contribution 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 Williams estimate that R&D spending would have to quadruple to be high enough to meet the nations needs. Some economists have estimated that R&Ds rate of return to the nation as a whole (not just to the companies that pay for it) is as high as 30 percent. There are also positive externalities associated with less formal innovations such as improvements in production processes. Like the results of R&D, these innovations can be copied or adapted by competitors. As one of us has written for a forthcoming Brookings report, all of these inventive activities and innovative accomplishments would be vastly diminished without the manufacturing sector. Although it makes up only about 11 percent of GDP, manufacturing accounts for 68 percent of all domestic R&D spending by companies in the United States. While only about 9 percent of all U.S. jobs are in manufacturing, 35 percent of all engineers work in manufacturing. National Science Foundation data show that only 8 percent of all non-manufacturing companies introduced a new product or service between 2006 and 2008, while 22 percent of manufacturing companies did so. The same percentages apply to the share of companies that added a new production or business process. Finally, corporate tax data from the IRS reveal that 60 percent of income from royalties from intellectual property goes to manufacturing firms. The innovation spillovers that manufacturers produce flow throughout the U.S. economy, not just to other manufacturers. The gains are especially large at the regional scale becausecontrary to Romers misinterpretation of the literaturecompanies perform better when they are located near many other firms than when they are more geographically isolated. When a manufacturing establishment relocates offshore, the related companies in the region suffer disproportionately. Even aside from geographic linkages, manufacturing firms are tightly linked to innovation in the U.S. service sector. For example, high-technology services such as Internet services, telecommunications, computer systems design, and scientific research depend on R&D in manufacturing. When a manufacturer moves production offshore, the skilled researchers and engineers it used to employ in this country are no longer available to high technology service providers. As the regional benefits of that knowledge creation emerge and grow in the foreign location, a larger share of inter-related service activities (including management, administration, marketing, logistics, legal, and information technology) also relocate offshore to be closer to the center of production. Romer mentions tax breaks, trade restrictions, and direct government investment in specific industries as examples of wrongheaded policies aimed to support manufacturing. In fact, though, there are a wide variety of sensible policies that the federal government could adopt to counteract the market failures associated with innovationmarket failures that result in large part from manufacturings outsized contribution to innovation. Desirable policies include improving the training of workers without four-year degrees, strengthening R&D tax credits, and expanding assistance to small and medium-sized manufacturers to help them improve their economic performance. Meanwhile, at the regional and state level, there are also many useful interventions available to policymakers. Regional leaders can attempt to leverage their specific strengths in the sector and shore up their weaknesses by observing various capacities with respect to invention and research capacity, workforce skills, access to finance, and infrastructure needs. Improvements along these lines can benefit manufacturers and avoid wasteful corporate giveaways to business. Given manufacturings special contribution to regional and national economies, such interventions would likely be well worth the investment.

We invite you to find a new Center for your company

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 your employees, contact CIC Director Ralph Lange at (419) 592-4637 or online at www.hencoed.com

Henry County!

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Miller Precision Mfg. Ind.

Bunge Limited, founded in 1818, is a leading agribusiness and food company with integrated operations that circle the globe. Bunge employs over 32,000 employees at over 400 facilities in over 30 countries. Bunges agribusiness operations process and transport tens of millions of tons of commodities every year. The facility at 234 South Jefferson street is a soybean processing plant originally built in 1909. The business purchases soybeans which are processed to make soybean oil and meal. The oil is sent to the companys other locations for further processing into various food products. The meal is sold to customers both locally and globally. The Delphos facility has been making soybean oil 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. Tony Matney is the Facility Manager. For more information about the company, visit the companys website at : www.bunge.com Miller Precision Mfg. Ind. located in the Ottoville Industrial Park has been in business for over 24 years. We offer CNC Precision Machining Services including turning, drilling, tapping, and milling. MPI not only provides machine service we also offer assembly, and many other value added services. Parts produced are used in lift trucks, military, food service, medical devices and many other places that require precision machine parts. Being in high tech manufacturing, equipment is always changing. Keeping up with the new technology has heped MPI stay competitive in the world markets. The staff at MPI has the precision machining experience and training to produce a quality product that our customers come to expect. Facilities at the Ottoville location comprise of 72,000 sq. ft. of manufacturing and warehousing. Also in Van Wert Industrial Park we have 40,000 sq. ft. of machining and warehouse space to serve our customer base. In 2011 we added a new facility in St. Marys that now allows us to do large stamping and fabrications to keep up with capacity to meet customer demands. MPI has also added staff to meet the needs of our customers. As new technology and equipment change you can find MPI in the change for many years to come.

Rudolph Foods Company

For 57 years, Rudolph Foods commitment to excellence has been passed from generation to generation, just like their love for flavorful, traditional pork rinds snacks. In 1955, John Rudolph learned of an untapped market for pork rinds and the Ohio entrepreneur quickly launched his own company producing pork rinds from smoked bacon rinds. Two years later the company would face

its first big challenge, the meat industry no longer smoked the rind on the bacon. Under pressure to save their fledgling business, Johns wife, Mary, put her home economics background to work and invented a revolutionary process the company still uses today. With Marys surefire recipe and Johns leadership, Rudolph Foods became a snack industry success story. Since then, John and

his sons have continued to dramatically expand their business and the family tradition. Today, the company has six facilities in the United States and three International ventures. With over 350 employees, Rudolph Foods has launched into new areas of the snack food industry while maintaining its presence as the nations leading producer of pork rinds and cracklin snacks.

Miller Precision Industries, Inc.

131 Progressive Dr. P.O. Box 489 Ottoville, Ohio 45876

Dedicated to improving the agribusiness and food production chain since 1818. Leader in North America for consistent, high-quality oilseed processing products and service. 234 S. Jefferson St. Ph. 419-692-6010 Delphos, Ohio www.bunge.com
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CNC Precision Machining Small & Large Production Runs Fixtures Special Machinery & Tooling Secondary Machine Operations

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

Ohio receives funding to leverage private lending

The Ohio Department of Development announced the Ohio State Small Business Credit Initiative (SSBCI), a program that will access funding of more than $55 million to increase private lending and the amount of credit available to Ohios small businesses. Through Ohios SSBCI, we are helping to fill a major challenge faced by Ohio small businesses that seek capital to expand and create jobs, said Christiane Schmenk, Director of the Ohio Department of Development. Ohios small businesses are the backbone of our economy and providing them the tools they need to be successful will create a healthier Ohio economy. The State Small Business Credit Initiative (SSBCI) was created by the Small Business Jobs Act of 2010, which provided $1.5 billion to strengthen state programs that support lending to small businesses. Under the SSBCI, states were offered the opportunity to apply for federal funds for state-run programs that partner with private lenders to increase the amount of credit available to small businesses. The Ohio Department of Development applied for and received an allocation totaling $55,138,373 from the U.S. Department of Treasury. The Ohio Department of Developments Business Services Division will administer three financing programs utilizing SSBCI funds: Collateral Enhancement Program (CEP) is a new $33.1 million program that provides banks with cash collateral deposits to use as additional collateral for loans made to eligible small businesses. Under the CEP, the Ohio Department of Development will open an interest bearing account with a lender and deposit up to 30 percent of the loan amount where there is a collateral value shortfall as determined by the lender and the Ohio Department of Development (up to 50 percent of the loan amount for minority-owned businesses or businesses located in a Historically Underutilized Business Zone). Ohio Capital Access Program (OCAP) supports small business lending by establishing a loan guarantee reserve pool at a lending institution that participates in the OCAP. This program has been expanded (increased to $5 million) and can provide financing to for-profit and nonprofit businesses that may be experiencing some difficulty obtaining business loans using conventional underwriting standards. The state, the lender, and the borrower each pay a small contribution fee into the pool. The reserve pool is available to the participating lender for recovery of any losses on any loan they have enrolled in the OCAP. Targeted Investment Program (TIP) is a new $15 million venture that supports the growth and expansion of targeted small businesses within Ohios manufacturing, production, and logistics value chains. TIP offers debt instruments tailored to the specific needs of the company at or below market interest rates.

CELEBRATING

25

1987-2012

YEARS

Mercury Batteries Asbestos Management Light bulbs - Facility Inspections Electronics - Abatement / Removal
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Reduce cost. Reduce liability.

www.allied-environmental.com
Lima - Toledo

Since 1920

Wilson Memorial Hospital Sidney, Ohio

Have you seen what weve built lately?

This Surgical Suite Renovation won first place in the national construction awards! As your healthcare construction partner, Ferguson Construction Company has the expertise to 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 construction capabilities; wed be happy to help you with your next construction project.
Sidney: 937-498-2381 Dayton: 937-274-1173 Columbus: 614-876-8496 Indiana: 812-546-0333 www.ferguson-construction.com

Dedicated to Excellence since 1920

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

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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

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