Wisconsin manufacturers have been continually vocal about the ongoing challenges they’ve faced in recent years. Supply chain issues and the labor shortage are highly used phrases we’ve all grown accustomed to hearing from business owners. During BizTimes Media’s Next Generation Manufacturing Summit, held Tuesday at the Brookfield Conference Center, five leaders from different sectors of the manufacturing sector shared how they’ve managed to overcome those headwinds and keep moving their companies forward.
The panelists included Tom Danneker, president and CEO of Menomonee Falls-based Glenroy, Inc.; Benjamin Gover, chief operating officer at West Allis-based Glenn Rieder; Pat Koppa, president of Milwaukee-based PFlow Industries; JP Moran, president of Pleasant Prairie-based LMI Packaging Solutions, Inc.; and Sachin Shivaram, CEO of Manitowoc-based Wisconsin Aluminum Foundry Co. Inc. Here are six lessons learned from these manufacturing leaders:
Communication is key
Supply chain backups were causing LMI Packaging to miss their shipping dates. Moran said all the lead times the company was getting were shorter than what they actually turned out to be, which left them scrambling to inform disappointed customers. LMI Packaging was having the hardest time getting accurate lead times for steel and electrical components. This made the company re-evaluate their approach to providing their own customers with lead times.
“We started promising more realistic lead times that we felt we could actually deliver without inflating it, because we knew our competition would be doing that so we couldn’t make lead times really long… it’s just that balance,” said Moran.
He added it’s critical to be realistic with customers and not “over promise.” LMI Packaging has only had one cancellation from a customer who thought they could get a shorter lead time from someone else, but Moran said he figured out “pretty quickly” that most customers don’t have another option.
Diversify your supply chain
Gover said it’s natural for manufacturers to gravitate to a supplier that gives them the best cost and the best lead time. However, there are unintended consequences when doing this.
“Well next thing you know, 80% of your supply is coming from five people,” said Gover. “If one of those people can’t supply you, you’re in big trouble. That was our lesson, and we’re reinforcing it as we speak.”
At Glenn Rieder the decision was made to not have one supplier for a critical material anymore. Gover cautioned it’s natural for a company’s procurement team to think having one supplier is the easiest path forward. He said manufacturers must have a diversified supply chain to remain in business during turbulent times.
Take an honest look at your suppliers
As a company looks to diversify its suppliers, it’s important to take a look at the ones it already has.
Danneker said that Glenroy has put in place supplier score cards for exactly this purpose. This allows the company’s procurement team to honestly review each supplier based on statistics like lead times and delivery accuracy.
“My procurement people have this perception of who our best suppliers are. And then we actually put it on paper. A couple of the guys they thought were in our top 10 weren’t,” said Danneker.
While it took a large amount of effort to put the supplier score cards in place, Danneker said they have provided his team with clarity on who their best suppliers really are.
Find new populations to pull workers from
LMI employs people from the Department of Corrections (DOC) as well as Carthage College students. These populations provide two additional pipelines of potential employees at a time when competition for workers is at an all-time high. In the past six months, two DOC workers were able to finish serving their time and come to work at LMI Packaging full time.
“Our temp employees are turning over quick. Some of them leave for 50 cents or $1 (an hour). We thought, how can we educate them?” said Moran.
That’s what led LMI to reach out to some area high schools and colleges. The company got an immediate response from Carthage College. Through a newly created program, Carthage students work 15 to 30 hours at LMI. LMI then puts $6 into a pool for every hour each student works. That pool gets sent to Carthage to help pay student tuition off. So far, 50 Carthage students have gone through the program.
Re-examine how you’re training new employees
In 2021, Wisconsin Aluminum Foundry was able to decrease new employee turnover from 100% to 15% after taking a new approach to how new employees should be trained. A Wisconsin Fast Forward Grant allowed the company to create a training center for new hires.
“It used to be go out there and if you have questions, ask the person next to you. The fact that the job was high paying was good enough to get people to stay. Now, if they’re thrown into a confusing environment, they understandably leave,” said Shivaram.
The new training center is staffed by a dedicated supervisor whose only job is to train new employees. The addition of translators has also allowed the company to welcome a more diverse group of new hires. Shivaram said once the company was able to provide new employees with a welcoming and safe environment to train, turnover rates were drastically reduced.
Act quickly when hiring
PFlow Industries had 30 open positions it needed to fill last year, a number the company was able to reduce to four. Koppa said the company had to take a hard look at why it wasn’t making progress in filling those positions. After talking with one of his recruiters, he was alerted to the fact that PFlow was simply moving too slow when responding to potential candidates.
“He said, ‘We send you leads and you don’t get an appointment scheduled for sometimes a week.’ By the time we got somebody scheduled for an interview, they already had another job offer they accepted,” said Koppa.
Since PFlow has an ESOP, the company was able to rely heavily on that benefit to help attract candidates from competitors.
