Manufacturing Business

2010 Georgia Legislative Report by GIA

1/27/2010 by Administrator

Contribued by: Lee Lemke, Executive Vice President, Georgia Industry Association

Scroll down for the very latest industry news from the State Capitol.

The Georgia Industry Association is tracking state legislation that could potentially impact industry and manufacturing business.  From new leadership in the state House to expected budget short-falls and a gubernatorial election on the horizon, GIA keeps us up-to-date on important changes at the Georgia Capitol. 

Senate Appropriations Chairman Jack Hill said "with January marking the halfway point for fiscal year 2010, Georgia's overall total revenue collection shortfall now stands at $1.148 Billion or -13.7%.

Transportation

Governor Perdue released his recommendations for the amended FY2010 budget and the recommended budget for FY2011. The FY2010 amended budget calls for a further reduction of the state budget from $18.6 billion to $17.4 billion by the end of the fiscal year ending June 30.

The 2010 budget recommendation includes $300 million in bond projects for transportation. The Governor laid out a vision for committing a similar amount in the future budgets, which total as much as $3 billion over the next decade. The bonds will be paid back using state general funds rather than motor fuel taxes, which are declining at a time when transportation needs are increasing.

"This is the ultimate accountability system, the DOT will be responsible for delivering projects, and the legislature will answer to the voting taxpayers in deciding whether to continue making these investments," the Governor said.

Voters in each region will have the ability to decide on new transportation improvements by voting on a one percent sales tax. If the district votes yes, the additional sales tax collected in their district will be used to fund their list of projects. If the district votes no, the tax will not be levied.

The Governor also recommended $68 million for the deepening of the Savannah River Harbor. The joint federal-state project will deepen the shipping channel from 42 feet to 48 feet allowing the world's biggest ships to call on the Savannah Port.

Read more about legislative activity affecting industry during the 2010 Legislative Session:

Week 1

Week 2: Governor Perdue's budget recommendations for FY2010 and FY2011.

Week 3

Week 4

Week 5

Manufacturing Business and Technology Evaluation

1/14/2010 by Jack Burnett

It is important to take a wholistic view of your business and technology when implementing information systems.  This entails an evaluation of your manufacturing business and technology, your market and growth plans. Don't spend the time for analysis and study up front, and you risk ending up with silos of information and inefficient work processes as a result.  Synchronizing informatin flow throughout your organization and with customers, partners and vendors allows manufacturing firms to operate more effectively.  There are four areas to evaluate when implementing information systems.

The Business Processes area defines the business strategies and describes the various department and customer groups.  The rules of collaboration and workflows associated with the business processes are defined.   Requirements for this area are completed first to understand the operating culture and overarching processes to which business applications are applied.

Business Applications consists of the services, transactional applications and systems that support the business processes.  System designs and technical scope are created to solve particular business problems for specified users.  Line-of-business systems are identified, and integration with the current and future applications is defined.  We typically see business applications categorized as Web, Sales/CRM, Operations and Financials.

The Information Architecture describes the business data that is exchanged and shared between employees and customers, employees and other employees, and all people participating in the manufacturing value chain.  Databases and systems used to store data are identified.  The rules for access are determined, and the security rules are mapped to user groups, applications, and data.

The foundation is the Infrastructure Architecture, which describes the requirements of the IT hardware and networks supporting the web and transactional applications.  Definitions of access methods for internal and external user groups, and the connectivity of systems to support business processes are defined.

At TwinEngines, I create strategic roadmaps defining an implementation plan for the right-size applications at the right time. I deliver the strategy first, and then deliver solutions to unique business problems that companies face in ecommerce and sales, manufacturing and logistics, and repair and warranty.  Our focus at TwinEngines is on small and mid-market companies, providing businesses with the best value.

Key steps to avoid hiring errors and hiring the right people

12/17/2009 by Jacqueline Harris

Brad Wolff, Director Business Development, Jumpvine, Inc. contributed the following article:

Key steps to avoid hiring errors and hiring the right people

"Begin with the end in mind" when you hire.  You need to know just what you want this person to do and accomplish (the end result of his/her efforts) in this role and write this down.  This allows you to write a quality job description so that you can attract the best people.  This also helps you determine what credentials you desire the candidates to have on paper (their resume). 

1. Create a "model candidate" and write down these characteristics.   Use the information you gathered from step one to help you determine the skills, personality and other characteristics you would like this person to possess.   Write down these specific characteristics so that you can develop questions to evaluate each candidate's fit with respect to these traits. 
2. Determine what type of manager you are and factor that in:  Being honest with yourself about your own personal style and your available time to train and manage can be critical to hiring people that work out well for you.  For example, if you are the type of manager that likes to be closely involved in on a day to day basis, then focus on candidates who prefer a manager that gives a lot of direction and feedback. 
3. Plan ahead to determine when to begin the hiring process.  A rule of thumb to go by is that the process will usually take longer than you expect.  If you have a specific start date in mind, you need to allow time to receive qualified candidates' resumes,  interview the candidates, make offer and allow a few days to get a final decision and 2-3 weeks from resignation until start date.
4. Consider candidates with more future potential and less experience as well as those that can do the job immediately:  Companies often narrow their choices too much and would benefit from considering both candidates who have the experience to come in and do the current job right away and those who will need to learn and grow into the current job but have the potential to do a lot more once they master the current duties. 
5. Make sure your vacation, benefits and pay match up with the people you are hiring:  The type of pay and benefits a company offers is often related to the industry they are in and the type of people that they usually hire.  Be prepared to find ways to flex if needed to minimize the gap between the market for the people you seek and your company offerings. 
6. Have a hiring process developed prior to starting the search and stick with it while remaining flexible when needed.  If you do not have a well thought out process in place, you are likely to make hiring mistakes that could have been prevented.  When you meet a candidate you like, it is easy to be influenced by emotion and impulse.  This can cause you to avoid taking this person through all of the important steps in a good hiring process. 
7. Develop your process for initially sourcing/finding candidates prior to actually sourcing your candidates: This may seem obvious yet it is a very challenging area that is often not planned for in advance.  There are many methods of finding good quality employees.  This includes the following: Internal employee referrals, internet ads, candidate resume postings on career sites, industry and professional associations, personal affiliations and recruiting firms. 
8. Be very aware of the message you send by how you interact with the candidates during the hiring process. The best candidates are usually in the highest demand by your competitors in the employment market and typically receive multiple offers.  As a result, in addition to considering money, location, job duties and other factors, they will usually take into account how they feel about working for you.  Remember to do what you tell them you will do.  If you say you will call on Monday, then be sure to do this. 
9. Be flexible on number of people you need to interview on a position. If someone is an excellent fit based on what you have already decided you are looking for in the previous steps, don't hold off on this person simply because you did not interview a specific number of candidates yet.  

Keeping Morale High in a Down Economy

12/17/2009 by Jacqueline Harris

Brad Wolff, Director Business Development, Jumpvine, Inc. contributed the following article:

Keeping morale high in a down economy

Amid our current economic downturn, many managers are realizing that keeping morale intact is crucial but more difficult to achieve. Businesses have to motivate survivors of layoffs as well as prepare to compete for talent when the economy rebounds.  With companies reducing their staff, it has forced employees to do more work with fewer rewards in the form of bonuses, raises and benefits than under normal times.  As a result, companies are faced with the challenge of producing equal or better products and services under more hazardous conditions. 

Sound fundamentals of human relations are of utmost importance in managing through these challenges: Here are three approaches that can have a positive impact:

1. Communication: Send clear, unambiguous and well thought-out messages to staff about what's going on.  A monthly face-to-face "status update" meeting between staff and executives to convey that there are no secrets at the company. These steps can cut stress, boost transparency and shows convey the message that we are "all in this together".

2. Fairness: A sense of fairness has a direct influence on morale. This means communicating in a respectful and kind manner, letting people voice complaints without repercussions, explaining the rationale for job cuts, and making those cuts as fairly as possible.  Allowing the staff to participate in solutions can go a long way when it is feasible.  For example, if you need to cut $1 million in salaries, you can let the staff know that you need to either lay off four people or have each person reduce his/her pay by 10% and let them vote on what they prefer. 

3. Acknowledgment of value: Providing positive feedback and showing an interest in people's work has a direct effect on morale because it increases their feeling of importance and competence. Simple emails saying "Good job" or "Thanks for your hard work" can go a long way.  In addition, giving workers a chance to enhance and broaden skills - by moving around within the organization or working with different people - also helps them feel less trapped in their jobs at a time that salary increases and bonuses have been reduced or discontinued.

Here are three approaches that can have a negative impact:

1. Social events: If it appears that social events are used in lieu of more relevant measures, they can backfire.  It can appear that money is being poured into socials instead of where it is more important.  Having said this, when employers follow the positive approach guidelines above, social events can be helpful when they involve simple gestures of gratitude at a small amount of money spent.  Examples of this would include things like a ping-pong tournament, scrabble contest, softball game, picnic etc.  Anything that allows people to play together and interact in a fun way can foster good, cooperative feelings that pull people together in appreciation of their employer

2. Tolerating slackers:  With employees being asked to do more for less, workers who do not handle their fair share or do poor quality work add an extra burden to those who do.  Don't let good employees carry weak performers.  Letting some people get away with doing less work can breed resentment among harder-working colleagues. It is also wise to balance out workloads if they appear uneven.

3. Abandoning normal practices that are positive in your culture: Just because there's a downturn, it doesn't mean you should eliminate things that are appreciated and not overly costly. How well you manage people (or how your organization treats people) in tough times impacts today's morale as well as your reputation in the market and sends a powerful message that may well matter when times improve.

Additional considerations of importance:

In addition to salary, rewards and benefits play an important role in employee morale.  Employees expect certain benefits even under challenging economic times.  The reality for employers is that they pay a large amount of money for these benefits, many of which are not truly valued.   Since what employees value changes over time the downturn might be the right time to take an objective look at all of the things that you provide for your employees and compare this to the things that your employees truly value. 

Providing a simple questionnaire for your employees to anonymously communicate what benefits and rewards matter  most to them can be a starting point in gathering this information.  If what you offer now is not aligned with what your employees value, you are investing your resources where they do not provide the return on investment that you are seeking and your employees are potentially not satisfied either.

With creativity and flexibility employers can often achieve their desired result at equal or fewer dollars than they currently spend.  Since employees vary in what they value, honoring these differences while keeping the value of the rewards fairly equal can go a long way in improving morale and employee satisfaction levels.  For example, if you decide to cut back on $2000/yr per employee in the benefits/rewards that are not really valued per employee feedback, you may replace these with a small variety of choices from which employees can select.  One person may want to receive this money in cash compensation while another wishes to take an extra week of paid vacation. 

Additional ideas that may have merit in your organization:

1.  Rewards programs that include bonuses for bringing ideas that decrease expenses or increase revenue. 
2.  Telecommuting options
3.  Four-day work weeks
4.  Transportation subsidies

One final consideration before implementing changes in any areas above would be to "think through" and get the advice of people you trust before rolling out changes.  If you currently experience poor-morale, then thoughtlessly conceived changes can worsen morale problems because employees can perceive them as insincere ploys by management.

Contact Jumpvine for additional information or assistance. 
Office: 770-394-8536(direct) | Toll Free: 866-606-1205 | Fax: 770-394-8928
400 Northridge Rd., Suite 200, Atlanta GA 30350 | bwolff@jumpvine.net
www.jumpvine.net

Georgia Entrepreneur and Small Business Assistance Program

11/17/2009 by Administrator

Karen Fite at the Georgia Tech Enterprise Innovation Institute contributed the following article on the OneGeoriga Authority funding and assistance program for entrepreneur and small businesses:

The OneGeorgia Authority and the Georgia Department of Economic Development recognized the fertile soil that rural Georgia has to offer small businesses and entrepreneurs.  Yet, they understand the challenges that face many of these businesses as they dare to succeed and grow.  In an effort to continue building on the state's policies and programs to enhance, support and grow small businesses and entrepreneurs in Georgia, they ventured to establish a new service program targeted to entrepreneurs.

Through the Entrepreneur and Small Business Assistance Program, Georgia Tech Enterprise innovation Institute and University of Georgia Small Business Development Centers have combined resources and service to extend our current entrepreneur and small business programs and services. This program works to provide expertise by connecting these businesses to the appropriate resources, expanding into new markets and providing highly specialized technical assistance through Georgia's research universities and other qualified service providers. TwinEngines is one service provider supplying expertise in lean web presences, eCommerce and search engine optimization.

The activities provided will be targeted to entrepreneurs and small businesses located in eligible and conditionally eligible counties within Georgia's service delivery regions, as identified by the OneGeorgia Authority.  Companie must have less than 100 employees and are in Georgia's identified strategic industries or a qualified supporting industry, as identified by the Commission for New Georgia. Those strategic industries include Advanced Communications, Aerospace, Agribusiness, Automotive, Bioscience, Defense, Energy/Environment, Financial Services, Information Technology, Logistics/Transportation, Manufacturing, New Media and Tourism.

The services will be provided in six areas to eligible companies:

1. Mentoring & nurturing to support start-up companies and small businesses
Developing Business-to-Business and Peer-to-Peer Networking forums allowing opportunities for the entrepreneurs and CEO participants to learn, share their experiences with their peers, and make effective use of the time and talents of the participants.

2. Access and prospecting new markets (domestic and international)
Helping companies develop new markets by providing market data for identifying niche markets, expanding their current customer base or expanding into international markets.  Market data will be provided as well as guidance on the use of the information to development of new products or markets to grow healthy, profitable revenue streams for the entrepreneurs and small business.

3. Marketing through technology
Assisting small businesses and entrepreneurs in their efforts to market through technology will be provided through training and direct assistance with the use of contracted consultants, such as TwinEngines.  These services will include assistance with eCommerce, lean website development and enhancement, search engine optimization, and social media/networking.  

4. Specialized manufacturing and technical expertise
Assistance to small manufacturers for specialized manufacturing technologies and technical expertise will primarily be provided by EI2's existing manufacturing extension service, the Georgia Manufacturing Extension Partnership (GaMEP).   Assistance will be provided in three primary areas: Lean Manufacturing, Automation, and Software Technologies. 

5. Business development & growth
Assistance in this service category will be provided by UGA and Georgia Tech's network of business and entrepreneurial consultants.  Consultants will meet with a company's owner and/or management team to discuss the company's challenges and opportunities.  Based on this initial consultation, the consultant and company will agree to a course of work with stated goals, action plan, timeframe for completion, and identification of anticipated impacts.

6. Defense and other state and federal contracts
The Georgia Tech Procurement Assistance Center (GTPAC), housed within EI2, helps Georgia businesses identify, compete for, and win government contracts.  Contracting assistance is provided for federal, defense, state, and local procurement opportunities.  This no-cost assistance comes in the forms of teaching, mentoring, and coaching.  Clients are also provided with a complete set of tools to research and identify government contracting opportunities.  Our services take the form of classroom instruction, customized electronic bid matching, and one-on-one counseling.

For more information, contact Karen Fite, ga-esb@innovate.gatech.edu.

A Call to Create Sustainable Supply Chain Management Practices

10/21/2009 by Jacqueline Harris

Dr. Mary C. Holcomb, University of Tennessee contributed the following article.

A CALL TO CREATE SUSTAINABLE SUPPLY CHAIN MANAGEMENT PRACTICES

This past year presented unprecedented challenges to firms as economies worldwide moved into recession.  The tough economic times significantly impacted how companies of all sizes managed and operated their supply chains.  The 830 companies that participated in our 18^th annual study on the trends and issues in logistics and transportation told us that the economic hardship is being compounded by unpredictable demand, increased customer requirements, and volatile commodity and fuel prices.  All of these factors are making 2009 one of the most difficult operating years ever for businesses.

The economic slide since 2008 has placed tremendous pressure on firms to become much more efficient than ever before.  In this relentless pursuit, customers have reminded companies that cost is not the only critical factor for success - service is just as important.  This was reinforced by the study results that showed that a majority of companies (48.9 percent) view themselves as "being all things to all people" when it comes to the overall strategy of the firm or business unit.  We have seen growth in this strategic direction of "being all things to all people" since 2006 when it passed customer service as the top ranked strategy.  As the Exhibit 1 shows, customer service and cost leadership combined are a smaller percentage than the mix strategy for 2009 illustrating just how dominant this approach is becoming.

Should we be concerned about the increasing number of firms that are choosing this strategy?  The short answer is yes.  For the mix strategy - being all things to all people - to be successfully deployed, service and cost tradeoffs must be carefully evaluated for each and every customer interaction.  This strategic direction requires that firms carefully differentiate service levels for customers in order to maximize their profitability.  Without this segmentation firms deliver "one size fits all" service.  Not only is this approach too costly for the firm in the short and long run it also results in the "best" customers receiving the same service as less important customers. 

Over the eighteen years that we have conducted the annual study, business conditions have fluctuated from good to challenging, particularly after 9/11/2001.  What we have found is that many firms in response to difficult times take actions that are often reactionary to the situation.  While these changes may have an immediate impact, the concern is that they are not changes that will sustain the business once the economy recovers - much less position the firm to take advantage of growth opportunities.

The current recession has prompted many firms to consider how they can endure during this economic downturn.  For many firms this has led to a relentless focus on reducing costs.  With the increasing number of firms that have positioned themselves "to be all things to all people," the concern is that the cost-cutting decisions are not being made in a manner that will best support this strategic focus.  What we learned from past experience is that cost-cutting initiatives focused solely on reducing operating expenses often negatively impacted firms for several years afterwards.  What lessons did we learn that can be applied to the current economic situation?  Simply stated they are:

• Cost cutting must be done using a strategic filter.
• Investments in improving supply chain capabilities should not be delayed.
• Even in bad times, customer service cannot be sacrificed.

The challenges and issues that firms are dealing with today leads us to believe that the changes that are occurring are not for a season; some argue that continual economic and social change is the "new normal" for global supply chains.   Therefore, instead of constantly reorienting to the changing conditions perhaps a wiser approach would be to create sustainable supply chain practices that adapt to conditions.  While the term "sustainable" has been used lately in the context of environmental and green issues, it also succinctly conveys the need to build and develop approaches and techniques to managing and operating the supply that will make the firm more responsive to a host of conditions. 

What are the supply chain management practices that will sustain supply chains through good and bad economic times?  They are:  velocity, adaptability, synchronization, optimization and profitability.  These are the drivers that will create the type of supply chain that is needed for the new normal.  Now is the time for companies to set themselves apart from the rest by viewing the economic downturn as the opportunity to change their competitive position through the development and implementation of sustainable supply chain practices.  The challenge that firms must deal with is how to advance this agenda in a period of financial adversity when the unrelenting pursuit is one of reducing costs.  The study results indicate that smart firms are making strategic and tactical changes to their businesses and supply chains that will make it possible for them to weather this economic storm.  More importantly, they are building for a more prosperous future.  These companies will be ready to deploy and utilize an array of capabilities that are based on sustainable supply chain management practices.  The question that you must ask is - "Will our company be ready when the economy rebounds?".

The 18^th Annual Trends and Issues in Logistics and Transportation is a joint research effort of the University of Tennessee, Georgia Southern University, Capgemini, U.S. LLC, and JDA Software.  More research on the annual trends and issues, as well as sustainable supply chain management practices, can be found at:  http://www.transportation-trends.com

Windows 7 Upgrade Advice

10/15/2009 by Jack Burnett

As a Micrrosoft Gold Partner in multiple competencies, TwinEngines follows our partner's technology releases so we can offer advice to our small and mid-market manufacturing businesses.  We think the Microsoft technology platform is the most cost-effective solution for a small and mid-market company.

With the release of Windows 7 to manufacturing this past July, and planning for 2010 in full swing, I found a timely article on ZDNet offering information based upon Gartner Group analysts.

The prevailing attitude is that Windows 7 is not only Vista done right, but Windows done right.  If you have Vista PCs, then consider upgrading those to Windows 7 late next year.  Manufacturing businesses currently using Windows XP should start planning next year for the upgrade to Windows 7.  Target 2013 as the deadline for being off of XP completely.

While Windows 7 does not have the 'killer' functionality that drives immediate upgrades, and it's not a major architectural release either - it does have many good features such as:

• AppLocker
• BitLocker to Go
• BranchCache
• Better User Account Control Settings
• Improved UI
• HomeGroups Support

Microsoft Software Assurance (SA) is an important consideration during any new software release.  For users who don't have SA contracts, Microsoft's limits on downgrades to XP is 18 months from Windows 7's release or until the time Windows 7 Service Pack 1 is released - whichever is earlier.

Gartner's bottom line recommendations are:

TwinEngines started moving to Windows 7 on new PCs and any re-builds, and Windows 7 is meeting all desktop office PC needs.  We started planning for our shop-floor and back-office applications in the Windows 7 OS.  Click here to see the full article.

SETAAC Helps North Carolina Garment Manufacturer

9/16/2009 by Jack Burnett

Nancy R. Fullbright, SETAAC, contributed the following case study showing how SETACC helps Southeastern manufacturers compete with imports:

Mack and Mack, a Greensboro, N.C.-based women's apparel manufacturer, is something of an anomaly. It is a U.S. cut-and-sew manufacturer in a country where nearly 91 percent of the 20.8 billion garments purchased in 2006 were imported. It has increased employment in an industry where employment decreased from 585,700 in 1998 to 204,800 in 2007. And it has managed to do all of this while the U.S. trade deficit soared to $62.2 billion in July 2008.

"We design, cut and sew better women's wear for distribution to some 65 specialty boutiques throughout the United States. Our entire operation - administration, design, production, shipping, receiving and a retail outlet - is housed in a single, 7,300-square-foot building in downtown Greensboro," explained John Davis, co-owner (with his wife Robin) of Mack and Mack. "The textile and apparel industry, once prominent elements of our local economy, has moved offshore to take advantage of huge cost savings. We have established a niche market, but until we become a household name we will always work on narrow margins. And that is where the SETAAC program has been a great help."

The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech's Enterprise Innovation Institute in Atlanta, helps manufacturers develop and implement turn-around strategies to better compete with imports. SETAAC project manager Mark Hannah conducted an initial review of Mack and Mack and helped the company prepare an application for the U.S. Department of Commerce. Once the company was approved for funding, Hannah developed an adjustment plan that detailed projects to receive funding support, including assistance in marketing and sales, new product development and equipment training.

Firms that are accepted into the SETAAC program pay for 25 percent of the diagnostic visit and report. The Department of Commerce generally pays half of the cost of project implementation for activities to benefit the company. Private sector consultants submit quotes for implementing the identified projects and the company chooses which consultant to hire to execute the outlined changes.

"With SETAAC defraying most of the cost, we were able to have one of our newly-hired designers trained on our pattern digitizing equipment, which would have cost us around $4,000," Davis said. "Normally, we would have depended on the limited in-house experience available, along with our outdated help manuals. Instead, we were able to have a trainer spend a week at our facility with our designer, giving her invaluable insight into the latest techniques."

Mack and Mack's equipment digitizes garment patterns and prints them on perforated paper; sizes can automatically be scaled in the computer. According to Davis, it is not feasible to send the patterns to overseas factories for production because of their strict quality control.

"Admittedly, our business model is unusual. We have a very attractive boutique in the front of our facility and, once you get further in, there are glass doors through which you can see people at sewing machines making the clothes that are on the sales floor," he said. "Almost all the clothes hanging in the store are made in black - because that's a color we know we can always sell - and you can try them on. You choose the style and color, and in two weeks you can pick up the clothes that have been made specifically for you. Making one outfit at a time is one of our best selling points and, at the same time, one of the things that is most challenging in terms of growth."

SETAAC has also helped Mack and Mack upgrade its Web site, a key component of the company's marketing strategy. Davis notes that having the Web site configured for e-commerce has allowed Mack and Mack to increase its sales and diversify its revenue sources. In fact, the company exceeded $1 million in sales last year for the first time since 2003 and increased its workforce from 12 to 17 during the same time period.

"It's partly natural business growth, but I do feel the growth was abetted greatly by having the assistance provided by the program," Davis said. "We have created three jobs - two in production and one in administration - and retained all of the jobs we already had. Having the additional help has allowed my wife and me to focus on the bigger picture."

Mack and Mack was founded in 1995 by Robin Mack Davis who started out cutting garments on a ping pong table in her parents' basement. After five years, the firm relocated to its current location in the historic district of downtown Greensboro. The firm has grown over the years, and now sells its original designs in 65 upscale boutique clothing stores nationwide. According to Davis, SETAAC's assistance will help the small manufacturer continue to grow and compete in a global economy.

"I can think of few other government programs for small businesses where the intended benefits are so well-targeted and so effective," he said.

To learn more about SETAAC and how to get started, visit the SETAAC website.

Southeastern Trade Adjustment Assistance Center (SETAAC)

9/16/2009 by Jack Burnett

SETAAC contributed the following article about their trade adjusment assistance program:

Has your manufacturing business been impacted by import competition?  If so, you are not alone.  Fortunately, many manufacturers have been able to receive federal assistance to improve their competitiveness and profitability.

The Southeastern Trade Adjustment Assistance Center (SETAAC) administers a U.S. government program that can provide up to $75,000 of U.S. government funds on a cost share basis for manufacturing firms that have been impacted by low-cost imports absorbing market share.  This program is available to all U.S. manufacturing businesses that have experienced declines in sales and employment due to import competition. 

The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech's Enterprise Innovation Institute in Atlanta, helps manufacturers develop and implement turn-around strategies to compete better with imports in eight Southeastern states:

• Alabama
• Florida
• Georgia
• Kentucky
• Mississippi
• North Carolina
• South Carolina
• Tennessee

Last year, SETAAC helped more than 30 companies. On average, these companies received $42,000 in matching funds. In the last three years, SETAAC's clients have increased sales by 26 percent and improved productivity by 28 percent.

SETAAC's role is to partner with manufacturers and guide them through the 3-step process of certification, diagnosis and implementation.  There are various projects types eligible for funding.  Some common project examples are:

• ERP and production software installation and integration
• Production system innovation or re-engineering
• Quality compliance certifications/CE/ISO upgrades
• Lean manufacturing, Six Sigma, continuous improvement programs and custom process engineering solutions.
• Strategic planning and target market identification/planning
• Identification and development of new products and new markets/prototyping
• Export feasibility assistance
• Web site design/e-commerce implementation and/or sales literature

The program funds cannot pay for assets, but can pay for projects that improve a company's competitive position.  There is no cost to the firm to get certified.  

To learn more about SETAAC and how to get started, visit the SETAAC website or contact Maria Gorges, Program Director, at (404) 894-6787.

Southeastern Trade Assistance Adjustment Center (SETAAC)
Enterprise Innovation Institute
Georgia Institute of Technology
760 Spring Street, NW, Suite 330
Atlanta, Georgia 30332-0640

Manufacturing Business Hurt by High Corporate Tax Rates

8/14/2009 by Jack Burnett

The Organization for Economic Cooperation and Development (OECD) released new data showing that the United States corproate tax rate is getting more out a whack with the rest of the industrialized world.  And that is a bad thing.  High tax rates tend to adversely affect a business' and a nation's ability to attract capital, jobs, and economic growth.

The average tax rate of OECD nations fell to 26.5% after Sweden, Czech Republic, South Korea and Canada lowered their rates this year. The United States corporate tax rate is at 39.1%, only behind Japan when looking at industrialized nations.  Great Britain is learning the hard way; they recently lost McDonalds' and Google's European operations so those companies could lower their tax bill.

Manufacturing business can be hurt by high corporate tax rates, because high tax rates cause manufacturers to not accumulate capital that is needed to increase productivity.  Lower productivity causes GDP to decline. 

The Tax Foundation also addresses the effective tax rate argument when considering the US tax code:
"To many "new economy" firms that produce ideas and services, and whose profits are derived from intellectual property and licensing, the statutory tax rate is the effective rate because these firms don't have large plant and equipment costs to depreciate. They are highly sensitive to the statutory rate and, because they are not capital-intensive, can most easily locate their operations in jurisdictions with the lowest tax rate."

The OECD economists reported,
"Corporate income taxes appear to have a particularly negative impact on GDP per capita. This is consistent with the previously reviewed evidence and empirical findings that lowering corporate taxes raises TFP (total factor productivity) growth and investment. Reducing the corporate tax rate also appears to be particularly beneficial for TFP growth of the most dynamic and innovative firms. Thus, it seems that corporate taxation affects performance particularly in industries and firms that are likely to add to growth."

Read more about the report and analysis of corporate tax rates and their affect on manufacturing businesses here.

Quick Start - Georgia’s brand name for workforce excellence

8/07/2009 by Administrator

Rodger Brown, Director Marketing and Communications, Quick Start. contributed the following article:

The dedicated team at Quick Start, contributed the following about the strategic workforce solutions delivered to Georgia manufacturing businesses by Quick Start:

When cable network CNBC announced its latest ranking of "America's Top States for Business," the business-news leader noted: "Many states point with great pride to the quality and availability of their workers, as well as government-sponsored programs to train them."

Yes, many states do. But only one state can point to its ranking as No. 1 on CNBC's list for the quality of its workforce and workforce training. That's Georgia. And that's not the first time Georgia has been recognized for workforce development. For nearly a decade, Expansion Management magazine conducted an annual survey of site selection professionals to rank states in workforce training. These are the professionals who advise companies on the best locations to make investments, start a new manufacturing business and create jobs. Georgia scored the top spot numerous times, ranking No. 1 overall for all the years of the survey.

What accounts for that success? Such an achievement is always a team effort. State agencies, our technical colleges, the university system, individual communities, and our corporate partners in economic development collaborate to tell Georgia's story. What seals the deal with regard to workforce is the quality and effectiveness of the strategic workforce solutions delivered by Quick Start, a part of the Technical College System of Georgia.

For 42 years - since 1967 - Quick Start has been providing workforce training for small and mid-market companies creating and keeping jobs in Georgia. Quick Start's services are provided free of charge to new companies as an economic development incentive to locate in Georgia, and to existing companies to support them as they expand or implement new technologies to stay competitive.

Customized training - training the right people with the right skills to precisely meet each company's needs - is Quick Start's core business. But that's not as simple as it sounds. Today, those fundamental, practical skills incorporate higher-level challenges -- critical thinking, collaborative team skills, and dedication to continuous improvement. Companies are continually upgrading processes, developing new products, and implementing new technology, and these advances demand a new way of thinking about workforce training. Today's environment calls for strategic workforce solutions.

"Strategic workforce solutions" is not just a catchphrase. To deliver a strategic workforce solution, Quick Start must understand a company's culture, its products, markets, goals and manufacturing business challenges, as well as the specific requirements for different jobs. This strategic understanding then informs the relationship between Quick Start and the client company, adding value every step of the way -- from assessing and selecting candidates, to training new employees, and building efficient, productive teams. It's this deep and broad value proposition that earns Quick Start and Georgia the international recognition and top rankings that continue to grab headlines.

That's also how Quick Start has evolved as the top brand name for workforce solutions. Usually, people don't think of state agencies in the same way they think of commercial products or services that compete for brand awareness and brand recognition in the marketplace. Quick Start, however, is different. To effectively partner with manufacturers, Quick Start has to operate like a business itself. "Quick Start" is a registered trademark, and the state of Georgia has 42 years of stellar performance invested in the brand proposition represented by the name. It's a priceless asset that helped Georgia businesses create or save 17,601 jobs last year alone.

As all businesspeople know, this is how brands work. Our range of experience - from manufacturing to biotech, warehouse and distribution, and business operations - and our range of clients - from locally owned and operated businesses around the state to international corporations - all contribute to the meaning and value of the brand name Quick Start.

Quick Start is Georgia's unique brand advantage that means world-class performance, rapid and efficient training, effective and strategic partnership, and bottom-line return on investment.

Best of all, for companies creating or retaining jobs in Georgia, Quick Start's strategic workforce solutions come free of charge.

No wonder Georgia wins.

Rehashing the “Manufacturing” economic past and tips for the future..

8/06/2009 by Jacqueline Harris

I was reading not too long ago about some of the economic ups and downs for Georgia Manufacturing businesses over that last few years..

REHASHING THE PAST ......

Good old Textile manufacturing, one of Georgia's oldest industries, remained the most important industrial source of income until 1999 when output from food processing exceeded it. From 1997 to 2001, annual textile output declined 8.4% whereas output from food processing increased 12.1%. Other manufacturing areas were also increasing, so from 1997 to 2000, there was an overall 16% increase in Georgia's manufacturing output.   It was startling to hear that more than half of the gain was lost in the national recession in 2001, as manufacturing output fell 8.3% in one year, reducing the net gain since 1997 to 6.4%. The national recession of 2000 impacted Georgia's economy worse than most, as its annual growth rates at the end of the 20th century dropped abruptly to 1.5% in 2001. The state lost more than 133,000 jobs from January 2001 to October 2002. Layoffs in the fourth quarter of 2002 amounted to a 2.2% increase over the fourth quarter of 2001, the worst performance in the country.

TIPS FOR THE FUTURE ......

Advance 10+ years - what can we do to keep the Manufacturing Industry alive and profitable, retain jobs, grow your manufacturing business and overall, increase your bottom-line. 

Let's just start with the day-today trials.  It's been said that all too often, day-to-day business gets in the way of making a manufacturing business more successful.  In 2009, today's highly competitive, ever-changing world market, small-to-mid-sized manufacturers that want to continue their success need to do more than just build a product and hope for the best.  Business Executives "Manufacturers" need to look up from their desks and see what's happening to their business, customers and the market. Revaluate your marketing efforts, groom your existing customer lists and revisit old customers, see if new projects are available. Take a look at current market needs and see how your product fits.   Most business executives are often too busy with day-to-day fire-fighting and too close to the subject to look ahead and do what's necessary for success. 

So what's the answer?  Many believe that in order to stay profitable, manufacturers -- like every other organization -- must practice profit-focused strategies, including a planned profit model.   Walk the shop floor, check for bottle necks, check and double check your inventory logs, make sure your manufacturing website is one of your TOP marketing efforts and make sure everyone is onboard and actively contributing.  Don't rely on excel spreadsheets to track your progress and inventory, and don't rely on post-it notes and email to relay a message, make sure your presence is not just the picture on the wall or the voice behind the big door.   Everything has to be looked at and massaged and included in the planned profit model.  

Economy recovering? Ways to emerge with an advantage

8/03/2009 by Chris Zimmerman

I recently read an article by Tom Emmrich, president, Americas, Dassault Systèmes that I couldn't agree with more.  Here are few points of summary:

This current downturn by some economist's estimations is around 18 months old.  So if current indicators (and history) are any guide, then the recovery has begun.  What can a manufacturing business do to be ready to emerge stronger and more capable and competitive?  Here are a few areas that we believe are critical:

• Efficiency starts with manufacturing technology. Utilizing the latest manufacturing and information technologies and best practices can drive greater efficiencies, free time for innovation and give an organization the flexibility and core set of tools needed to succeed when the economy rebounds.
• Automated PLM can speed innovation to market. Companies with a strong product lifecycle management strategy will be able to respond more rapidly to market changes or increases in demand by being able to iterate digitally on various product alternatives, and then quickly move to market while the competition is still getting started.
• Innovation starts from within and means more than a casual or informal awareness of the market and industry - and must pervade the entire company, not just a few people. You need to develop a culture of innovation and process discipline to support it.
• Collaboration is critical to the nimble business. To be a successful manufacturing business in today's markets means you must have the ability to seamlessly connect with your partners, suppliers, customers and branch offices.
• Operating efficiently is the most important aspect of improving and preparing your company for success when the markets take a favorable turn. An economic downturn is, in fact, the perfect time to evaluate internal processes to identify ways of working which require evolution.

Regardless of the condition of your manufacturing business, a review of many of the tenets of a good business are important to realize future savings, and more importantly, to return to growth faster and to win market share.

Click here to review the complete article by Tom Emmrich.

Manufacturing Business Economic Update

7/23/2009 by Jack Burnett

I listened to Dr. Jeff Humphreys, Director of the Selig Center for Economic Growth at the University of Georgia's Terry College of Business, at the TwinEngines' Business, Braves and the Bottom Line™ event July 21, 2009.  He provided an economic forcast with insights for manufacturing businesses.

Dr. Jeff Humphreys summarized his discussion with this advise for a manufacturing business:
He believes the recovery will start in the 4th quarter of 2009, and "now is the time to plan and act for the recovery - not a vigorous recovery, but more of a flat, slow recovery".

Here are other highlights from Dr. Humphreys from the discussion at our educational seminar:

• Last fall in 2008 the country was very close to the precipice of an economic failure.  3 causes occurring at same time:
  • Cedit failure
  • Housing failure
  • Financial crisis
• The federal government's actions helped avoid a Great Depression 2.0, but there were other key factors:
  • Social safefty nets in place that were not in place in the 1930's
  • FDIC helped stall the panic
  • The massive global response helped
• "Almost through all the really bad stuff." The economy will continue to decline with the recovery in the 4th quarter, but exact timing will depend on the improvements to the credit market
• There was a one-year income loss during this recession. 
• Because of the massive loss, the recovery will not be the normal quick bounce back from a recession - slower and flatter.  Can't rulle out stagflation.
• Wealth destruction in the the middle class is unprecedented - includes large home equity losses
• Job Loss Prediction:
  • 280,000 in GA - 250,000 all ready
  • 7,500,000 in USA
• Expect unemployment to peak just north of 11% nationwide
• These 5 Headwinds indicate recession very near end
  • Credit Market thawing
  • Housing activity (starts & sales) already bottomed
  • Oil prices will be lower this year
  • Inflation is not today's problem
  • Wealth destruction ended at end of 1st Quarter '09
• Fed will take back rate custs mid 2010 so now is the time to look at business loans
• Federal stimulus does not have much productivity dividend, so payback of stimulus will be a drag on the recovery.

• Georgia Notes:
  • Did not experiene the huge losses in housing, but did have a supply bubble that hit prices.
  • 12% price drop in houses, but short sales and foreclosures overstate that drop
  • Major sector of Manufacturing tied to housing in GA
  • In 1999 there were 3.9 M jobs in GA; today there is 3.9 M jobs in GA.  Lost a decade of job growth and return to pre-recession numbers won't happen until 2013.
  • GA does enjoy stimulus from 3 areas today
    • Population Growth
    • Productivity Increases
    • State and Federal stimulus

Manufacturing Business Update

7/01/2009 by Jack Burnett

I checked my Twitter account over lunch and kept seeing positive article after positive article regarding the state of manufacturing around the globe.  When it reached six articles showing manufacturing business getting better (or less bad), I just had to compile links to all of them here in one place.  Take a minute to enjoy the positve news from surveys and reports on June 2009 global manufacturing activity:

• GM China Sales Hit Record High - any good news in the automotive industry these days is worth a mention
• European Manufacturing Sees Steady Growth - The purchasing managers index -- a gauge of business activity -- for the euro zone's manufacturing sector rose for the fourth month running to 42.6 in June from May's 40.7
• Surveys Show Chinese Manufacturing Expanding - PMI indicates the economy is midway through a recovery, adding to mounting signs Beijing's 4 trillion yuan ($586 billion) stimulus is starting to show results, boosting domestic demand to offset lackluster exports
• UK Manufacturing Improves In June - Recession in the British manufacturing sector eased in June, with output rising for the first time in over a year, according to the Chartered Institute of Purchasing & Supply's survey.
• U.S. Manufacturing Probably Shrank at Slowest Pace in 10 Months - The Institute for Supply Management's factory index rose to 44.6, the highest level since August
• Appliance and Electronics Giant Expands in Gwinnett County, Georgia - Hisense Corporation USA and the State of Georgia, announce the expansion creating 35-40 new high-wage jobs

Companies Are Collaborating to Cut Costs

6/25/2009 by Jacqueline Harris

Andy Williams, Partner, M33 Integrated Solutions, contributed the following about blog:

Companies Are Collaborating to Cut Costs

The doom and gloom mentality stemming from our country's financial crisis has set in. By now, you have probably been presented with countless old and new strategies for weathering the economic storm.  As is usually the case, some of these strategies work for some of the companies out there, but none of the strategies work for all of them.  Still, that doesn't mean they're not all worth investigating if it means you might find the strategy that works for you.

One of the trends that we've seen emerging in this economy is network collaboration.  And why not?  With the ubiquity of information management systems and the ability for multiple parties to communicate in real time, collaboration is an idea whose time has come.  It's not the right fit for every company, but it's becoming a major driver for cost reductions in the companies that are making it work.

Logistics veterans might describe collaboration as an over-hyped solution that rarely gets results in the real world.  Effective collaboration means creating a network of trading partners that enables shippers to operate more efficiently and at a lower cost as a group.  In the past, collaboration was prohibitive to business because the labor required in coordinating activities canceled out the cost savings.  But with the widespread adoption of web-based logistics planning tools, as well as the growing reliance on Third Party Logistics (3PL) partnerships, shippers have the capabilities necessary to integrate distribution channels and transportation providers to minimize collective distribution costs and execute 'best-practice' solutions.

Most companies have adopted lean practices over the last decade, but there's a natural barrier that keeps independent companies from reaching the next level of savings.  Let's put this concept in more understandable terms:  I can negotiate a very low rate for a cab ride for myself, but it won't be cheaper than splitting the fare with someone else. 

Most companies do not currently have the resources to search and create these collaborative networks independently.  In today's down economy, options to smart-source this network creation initiative to a third party partner are increasing.  It is critical to investigate any future partner's ability to create and host network collaboration communities.

When like companies in like markets collaborate to form a collective distribution network, either independently or through a third party, they will inevitably benefit from reduced costs and faster time-to-value.  The companies that comprise such a network, share in best-practice solutions, while solidifying reliable relationships with providers that typically wouldn't present a partnership fit independently.  Carriers newly introduced to these networks find immediate synergies with the other companies, often increasing their availability in critical lanes for their original client.  Additionally, with over 80% of the trucks on the road carrying less than full trailer loads, collaboration allows cost sharing for shippers, increased carrier revenue, reduced capacity demand in the market, and often faster transit times.

In this economy, everyone is trying to do more with less.  There's no question that most companies will come out of this recession leaner than they were when it began, but the competitive advantage will go to those companies that used this time to implement new partnerships and processes that will increase efficiency when the economy turns around.   Forward thinking management at proactive companies will create that advantage through collaboration.

Tough times? Use them wisely!

6/15/2009 by Chris Zimmerman

Recently, I have spoken to many companies who have taken the approach to hunker down and wait for the storm to pass:  taking the path of expense cutting, halting any capital or discretionary spending, and reducing sales and marketing initiatives.  Although for some, this is the prudent move, for many an opportunity has presented itself.  We all know, and history has shown us, that the economy will rebound and in most cases, manufacturing businesses will be there after the storm. 

So in these down times, what can we do and what can we gain?  A few potential ideas:

• Examine all process and procedures for:
  • Redundant or double data entry
  • Highly manual processes (high potential for errors)
  • Examine the use of spreadsheets in production (limited visibility)
  • Data availability to the appropriate parties (executive, back-office, customers, vendors)
• Utilize technology to solve the above issues
  • In most cases using the systems already owned
• Potential manufacturing business gains:
  • Increased market share when business increases
  • Increased profitability through a more scalable business with no expense increase
  • Improved operational efficiency for a clearer view of data for better decision making
  • Broader view of all data across the entire business
  • Improved process can allow for reallocation of over staffing and head count

It is not always for the faint of heart to make bold moves in difficult times, but more often than not, they will be rewarded for their foresight with a more dominant business.

The link below is to a blog post from the President of SGIA, he agrees that the time is right for business and process improvement.

Last to Move - First to Lose

Georgia QuickStart for Manufacturing Businesses

6/01/2009 by Kevin Seefried

Many manufacturers are not aware of the resources available through Georgia Quickstart.  This group is a true jewel for Georgia and a key asset when attracting new manufacturing business to the state like the recent Kia plant located in LaGrange.  Georgia QuickStart doesn't just focus on new business, they also work to help keep and grow existing manufacturing business through training and retraining programs.  These training  programs are a great way to educate workforces on new solutions, business systems and processes at small and mid-market companies.

I was glad to read in the Georgia QuickStart Winter 2009 Newsletter, that the Camilla, Georgia Ethanol plant had its first grind as it starts operation.  I had the opportunity to drive by and see this facility last year as I headed down to our annual beach trip and was very impressed. 

Also, be sure to check out the last page of the newsletter to see how this group is making an impact in the state of Georgia and in your area.

Carbon Emissions

5/14/2009 by Administrator

Eric Taub, CFA, Founder/Managing Partner at Verus Carbon Neutral Partnership LLC. contributed the following about carbon emissions:

Carbon Emissions - Don't Miss the Train

Whether you believe in human-induced (anthropomorphic) Climate Change or not, there is a very real chance that your business will be affected by the regulations surrounding Cap and trade. It will create a layer of costs for companies that are not prepared. Subsequently, your company's carbon footprint will become an important tool. Don't be surprised when your stakeholders expect to see it on your next annual financial statement.

Currently, there are seven Cap-and-trade bills pending, some of which have bi-partisan support (one is co-sponsored by Senator Specter who recently became a Democrat). The most recent of which is the Waxman Markey bill. President Obama has made it very clear that he supports Cap and trade. Finally, the EPA has recently moved to regulate CO2 as part of the Clean Air Act (a George H. Bush legacy). The EPA set a level 25,000 metric tons of CO2 as a starting point; affecting over 13,000 manufacturing facilities in the US.

You could say the Climate Change train is coming down the tracks at a good clip and you have three choices: lead, follow or get out of the way (don't get run over). Don't worry it's not all doom and gloom for your business. The choice to climb aboard basically means that you choose to create assets and these assets can serve many different purposes:

• hedge against energy costs
• investment in intellectual property, patents, etc.
• competitive advantage

The best way to hedge against high energy cost is to use less of it. With some coaching, most manufacturing companies can trim their energy use by at least thirty percent. If you accomplish that, congratulations, not only have missed getting hit by the train, you're on board with a first-class ticket. This means you were able to switch to an energy-saving culture. There are detours to watch out for; like the big sign that says electricity is only at about 14 cents a kilowatt hour. You can avoid that detour by remembering how some of the airlines prospered by having the vision to hedge jet fuel when it was cheap.

Now if your manufacturing business is particularly energy savvy, you may develop energy-saving products or technologies that are marketable or attractive to investors. So, instead of being a mere passenger on the train, you get to supply it with energy. If your company is big enough to get directly effected by Cap and trade, the use of these assets could help you create valuable CO2 offsets as well.

If you want to steer the train you have to join the list of over 100 business members on Chicago Climate Exchange. Members include companies like Dell, IBM, Ford Motor Company, and American Electric Power (and a number of lesser-known smaller businesses as well), all of which have made legally-binding commitment to cut their CO2 emissions.

To get a base line of where your CO2 is coming from you must measure your carbon footprint. Without a metric that tells you where you are it's difficult to determine if you're on the right track of building assets or the wrong track of creating liabilities.