What is true inspiration?

In my recent interview with Arnold Kamler the Chairman and CEO of Kent Bikes, I found an example of true inspiration for American Manufacturing. I learned that “Made in the USA” is the way of the future when it comes to manufacturing and it doesn’t have to mean increased prices or reduced ROI. Kent Bikes is a great example of a company that employs robotics and automation in its American plant and creates jobs at the same time. Kent Bike’s South Carolina plant employs over 100 people and is continually growing.

According to Kamler, “Many believe that automation and technology are replacing coveted manufacturing jobs in North America, but on the contrary, if it weren’t for automation and technology, these North American jobs would be located elsewhere”. [bctt tweet=”if it weren’t for automation and technology, over 100 jobs would be located elsewhere” username=”ronjmorris”]The reason behind this is simple. Typically, it is cheaper to source labor in countries overseas such as Asia, but by using innovative technology and automation in factories, they can keep the jobs in North America, while having little effect on the company’s ROI.

Having been in the bicycle industry since 1972, Kamler again revived this lagging industry after it had essentially died in North America in the 1990s. In 2008, 100% of his manufacturing operations were in China where he found it to be the most economical. Four years later in 2012, Walmart made a pledge to contribute $250 billion towards Made in the USA initiatives, transferring those dollars away from imported products. [bctt tweet=”Four years later in 2012, Walmart made a pledge to contribute $250 billion towards Made in the USA initiatives, transferring those dollars away from imported products. ” username=”ronjmorris”]This got Kamler thinking about the possibility of moving his operations to North America, but his search for an affordable and well-equipped manufacturing facility didn’t pan out. That was until the Governor of South Carolina got involved. Governor Nikki Haley who had already dramatically decreased the unemployment rate in South Carolina, gave Kamler incentives to move his operations to her state. This incentive, combined with Walmart’s initiative, got the wheels turning and Arnold Kamler made the substantial commitment to move their operations back onto American soil.

But it wasn’t easy. Kamler faced several challenges in setting up Kent Bikes in America, the largest of that being the inability to find a skilled labor force that was familiar with bicycles. After much interviewing, they hired their first recruits. Those who stood out on the assembly line eventually became managers and their policy of promoting from within has worked well for them. After extensive renovations to the facility to allow it to work for the manufacturing operation, his current challenge is on the supply chain. Because there are no bicycle part manufacturers in North America, most of Kent Bikes’ parts must still be imported, which can be costly and inefficient.

Overall, Kamler says that his overall ROI hasn’t changed much having moved a substantial amount of his manufacturing here and that as they grow, and they are, he will realize a much better return on investment as compared to his operations in China. Currently producing 1,200 to 1,500 bikes a day, their plan is to create 400,000 bicycles in 2017. At that number, the costs to produce the bicycles are higher than China, but he believes that once he gets to the 500,000 mark, he’ll be on par.

At Executive Outlook, we’re always on the lookout for examples of smarter solutions such as robotics, artificial intelligence, and Big Data that are being leveraged today to create a better world of tomorrow. We hope these stories will inform, enlighten, and maybe even inspire you with ideas that will help your business. If you have a story you would like to share, please message me at [email protected]

What you don’t know will hurt you and what others know can too…

We recently spoke with Brad Watt, CEO of Crossfield Products Corp., a manufacturer of construction coating, overlay and fluid-applied flooring materials. With 40 years of experience in the business, he had some fantastic knowledge to share with us on how to improve your bottom line by improving the communication within your organization.

If you’re a golfer, there is no doubt that you know your handicap, and you use this as a measure of your performance to beat. You can hit balls all day long, but if you don’t measure how well you do on the course, you’ll never know what to practice to get better. You need to know other things like fairways hit, greens hit in regulation, and number of putts to realize when you’re improving and why. Watt believes the same thing happens when you run a business. By measuring how your business is doing in terms of sales, spending, profit, and other key metrics, you can set that bar and you can take the steps you need to in order to get above it.

Using simple Excel spreadsheets, Watt’s team creates dashboards to be presented at monthly meetings. These dashboards measure everything from healthcare costs to days to ship to net sales, depending on the presenter’s position in the company. From here, they can easily spot trends from month to month, which will give them the specific information they need to figure out how well they are doing.

Watt says that this system keeps them “out of the dark”, where they can put a discipline into the system. If they find an area where they aren’t performing well, they can do an in-depth investigation into why and try to improve it. As he says, “If you don’t know how well you are doing, you can’t do better”.

He takes this process even further, measuring the differences between the two locations of the company. What he initially found was striking: one location had labor costs that were above 5%, while the other location was able to keep these costs down to approximately 3%. By measuring these costs, they were able to address the problem and bring their expenses down, definitely improving their bottom line.

As the President of the company, Watt likes to investigate everything he can. On a daily basis, he takes a look over his software program, considering what customers are buying and what they aren’t. If anything looks out of place, he challenges it. He says that knowing what your customers are doing is a critical factor towards the success of your company and the easiest way to know this is through measurement and good communication.

Watt’s philosophy that what you don’t know will hurt you swings both ways. His advice to newcomers in the business is that what others know can also hurt you too. He believes in good communication with clients and employees, but feels that some people take it just a step too far, and this is a lesson well-learned for him too. He suggests giving your clients and competition just enough information that they know what you are talking about, but without giving away relatively confidential company information.

The strength of a business lies in how effectively it communicates, with your largest asset (and expense) being your employees. Knowing how well they are performing and communicating what you need is going to be the key to any business’ success.

We appreciate Mr. Watt sharing his insights. We all gain from the knowledge transferred from senior executives with decades of experience.

How Fit is your Factory?

In an ongoing effort to highlight companies that are implementing innovative solutions that increase efficiency, I recently spoke with Dennis Cocco, owner and founder of 10in6, a software company that offers a unique manufacturing solution that will increase a plant’s efficiency by 10% in just six months.

Like the abundance of people who say they want to get in shape, Cocco theorizes that manufacturing plants also want to get in shape, but both parties either don’t know how or don’t want to make the effort. They blame other factors for their lack of productivity and there is little transparency as to what really is at fault. Plant inefficiency is rampant, costing manufacturing companies time, money and affecting their overall ROI.

To increase ROI, businesses either need to increase profits or reduce costs. 10in6 is a software solution that will reduce your plant’s costs, by effectively measuring where your plant is lagging, mainly in terms of labor costs. Cocco says that most manufacturing organizations have established processes and technology to track their revenue, inventory and shipping, but on the shop floor, most are at the mercy of their management team, as there is truly a lack of technology that will track labor inefficiencies. That was until 10in6 came onto the scene.

The manufacturing world in North America is tenuous, with businesses thinking they can cut costs, mainly their labor costs, by going overseas. But with the rising cost of transportation, plus a call to businesses to stay within North America, and raw materials costing the same here as they do elsewhere, more and more businesses are deciding to run their plants here. What they do lack, says Cocco, is the information they need to increase their plant’s efficiency and reduce labor costs.

Many high-profit world-class manufacturing plants in the world can be likened to “gym rats” – those who have the discipline to get in shape, who figure out their weak spots and utilize their time the most efficiently. The ones who run the least efficiently are the ones who sit on the couch, want to get better, but just keep allowing things to run as they are, making excuses and letting it impact their overall health (or ROI).

If there is one factor that gets both unfit people and plants working more efficiently, it is accountability. Just like a personal trainer, the 10in6 software recognizes where your plant is running least resourcefully, so you can make the requisite changes and successfully increase your ROI. Because the software measures everything, you’ll also know where you are improving and why, so you can continue to get better.

In most plants, lines are staffed for either 40 hours or 80 hours. If the work isn’t getting done during those weekly shifts, weekends come into play, which significantly increase labor costs. Not only are you paying for the work to be done during the regular shift, you are paying double for overtime for it to be done on the weekend.

If plants can more effectively use their time during that 40 hours, their ROI will increase substantially. 10in6’s primary driver is to account for lost time. Their software solution will measure the weakest spots on the line and your overall equipment effectiveness (OEE). World-class plants have about an 80% OEE, while many other less-efficient plants are in the 40 – 50% range. With the 10in6 software solution, plants can double their output and go from the bottom of the pack, right to the top, simply by knowing where they need to improve and then doing it.

When Cocco started in the business, every plant had industrial engineers whose job it was to track performance in the plant, but those jobs no longer exist. With electronic auditing software like 10in6, it gives management more transparency and visibility to see what needs to be improved on the line. Ironically, reducing a plant’s manpower could actually make it more efficient. Cocco says that his software “tackles the last unmeasured frontier in the manufacturing world” in terms of measuring accurately what’s happening on the plant floor.

At Executive Outlook, we’re always on the lookout for examples of smarter solutions such as robotics, artificial intelligence, and Big Data that are being leveraged today to create a better world of tomorrow. We hope these stories will inform, enlighten, and maybe even inspire you with ideas that will help your business. If you have a story you would like to share, please message me at [email protected]

How to make the “false positives” go away for better lead generation results

In an interview with Peter Ostrow, President and CEO at <a href=”http://bit.ly/2kiDt0x”>TCI Marketing Services</a>, we learned that the secret to their success is based on delivering consistently better results than the competition. They achieve this by focusing on building and integrating into the process the right technology – one that can do many jobs. By managing a large amount of data through their unique software, they can efficiently and accurately provide their customers with consistently improved leads at a better price than their competitors. How do they do this?

TCI Marketing Services provides qualified leads to its B2B IT customers by making sure that the prospects they are delivering are extremely well vetted—no false positives. The advantage for the customer is that they can outsource a part of their lead generation activities knowing that TCI will deliver top quality leads on or ahead of time. With a focus on their sales goals, many marketing departments find it virtually impossible to generate enough raw leads that will ultimately satisfy the requirements of their down funnel sales activities, and that’s where <a href=”http://bit.ly/2kiDt0x”>TCI Marketing Services</a> steps in.

“While it sits in the background, the software we developed, improves the quality of the results while reducing overall program management costs and delivery times. That’s how powerful it is,” Ostrow said. He believes that having “a deep technology layer” allows them to deliver the best product to their customers, with technology that sits on a SalesForce platform and bridges the gap between traditional marketing automation and call center software.  Because of this, the ability to target goes up, results improve significantly over traditional publisher-led IT lead generation deliverables and the costs come down. Because of the ability to do things quickly and competently using one software base, they can offer a better product/result, thus helping their customers improve their Return on Investment (ROI).

Ostrow believes they’ve flipped the traditional lead generation model on its head. “With the advent and the proliferation of content out there, list degradation has gone through the roof, so our customers have tremendous trouble keeping subscribers active and engaged,” he says. “Using technology, we said it is less important how the relationship between the prospect and the advertiser is created, all that really counts is that the prospect is engaged and the long-term ROI for that prospect is there.”

To reach Peter Ostrow and learn more about how technology can increase your ROI, contact him at <a href=”mailto:[email protected]”>[email protected]</a>.