In his fourth State-of-the-State address, Wisconsin Gov. Jim Doyle recently announced plans to fund a new initiative to help small and medium-sized manufacturers that supply goods and services to large Wisconsin companies. The Manufacturing Supply Chain Development Initiative will help the Wisconsin suppliers identify and capture opportunities to improve their performance as they attempt to land business from original equipment manufacturers. With the program, technical assistance will be provided to 100 suppliers through the Wisconsin Manufacturing Extension Partnership (WMEP) and the Northwest Manufacturing Outreach Center (NWMOC). Doyle is directing the Wisconsin Department of Commerce to fund 50 percent of the costs for 100 companies to improve their systems. Mary Burke, secretary of the Wisconsin Department of Commerce, is overseeing the program. Burke recently spoke about the program and Wisconsin’s manufacturing sector in an interview with Small Business Times executive editor Steve Jagler. The following are excerpts from that interview.
SBT: Tell me about this new program.
Burke: "It’s working with the MEPs (Manufacturing Extension Partnerships) in the state to reach 100 additional small and medium-sized manufacturers who are part of the supply chain for our larger OEMs."
SBT: How will it be determined who the 100 companies are?
Burke: "The WMEP and the NWMOC work closely with the large manufacturers in the state and have really developed this program to reach the small and medium-sized manufacturers in their supply chains. They feel that through this, they will be able to identify those companies interested in doing this. We (the state) are picking up half the costs, so there is going to have to be an investment either by the company or the OEMs."
SBT: How exactly will this program help companies?
Burke: "The aim of the program is actually to do an assessment for these companies to document how adopting lean manufacturing principles would be able to improve their business. That’s what the MEPs call ‘Phase One.’ That’s what they have seen as the biggest hurdle to overcome, that first step, so that they can see whether it’s worth the effort and worth the money to put additional resources into adopting these. I think it’s a great way. This money will be used to identify, ‘You know, I think we can cut your lead times by 50 percent or we can cut your inventories by 50 percent.’ Those are the types of results that are shown, and then a smaller company will be much more likely to say, ‘OK, I’m going to invest not only financially, but my people’s time in this.’"
SBT: I just presumed, and obviously I’m wrong about this, but I just presumed that any manufacturer that’s still around these days already had adopted lean manufacturing techniques and Six Sigma by now.
Burke: "Unfortunately, that’s not the case. I think there are different levels too, that you can go to. I found with my experience at Trek bicycles that you’ve never gone far enough. That’s why they call it continuous improvement, because you need to keep going back."
SBT: So, it’s a journey, not a destination.
Burke: "Exactly. And the minute you think you’ve done it (all), you’re finished. You’re in trouble, because it’s pressing for even shorter lead times, even lower inventory levels and even lower costs. Those are going to be the successful manufacturers, who every year are looking for that continual improvement."
SBT: Do you have a dollar figure of what we’re talking about here? What is 50 percent of these costs to help 100 companies?
Burke: "It will be $360,000 total for the Department of Commerce part, which is 50 percent of the costs of the total program."
SBT: Of course the American automotive industry is in trouble. Wisconsin dodged a bullet when General Motors Co. decided to keep its Janesville plant open, but things don’t look good at all for Delphi Inc.’s plant in Oak Creek. There are still so many companies in Wisconsin that provide goods and services to the automotive industry, and we can’t insulate ourselves from those problems, can we?
Burke: "No, we certainly can’t. I think what we have to do is to realize that we are at risk, and we need to work as hard as possible. I was just in Janesville today, and when you have such a close call, it’s a bit of a wake-up call, and we have to keep pushing to stay competitive."
SBT: To the point of helping small and medium manufacturers – the CEO of one such company recently told us that he is having trouble finding and keeping good people in Waukesha County. Every time he hires a competent employee, a larger employer steals that employee away by offering better wages or benefits, and he’s having trouble competing. In fact, he said his company could have grown its revenues by 20 percent more in 2005 if only he could have kept more of its key people.
Burke: "Well, there’s no doubt that every company needs to be able to keep its people in order to be successful. I think that’s another initiative the governor had in the State-of-the-State, the area of health care. I know that that’s one area that smaller companies find it harder to compete against larger companies that have that benefit. The governor is calling for a statewide pool for catastrophic insurance, which should really lower the cost of health care, particularly for small businesses."
