MEP News
The ROI of Enterprise Minnesota
BY JOHN CONNELLY
When manufacturers consider buying a new piece of equipment or investing in a new software application, a typical component of the decision is usually this one: What will be the return on investment? It’s also an appropriate question to ask when they engage the services of Enterprise Minnesota.
When we work with clients we want to ensure results that are directly beneficial to their businesses. Through our collaboration with clients, we want them to increase sales, decrease costs and make solid investments.
If clients go through a significant transformation with our help, such as the implementation of lean enterprise or the idea engineering process of Eureka! Winning Ways®, we would expect that after a year the changes made would have offered good news to their bottom lines.
There are two methods by which we come to understand whether our expertise leads to ROI. One is personal. We start at a project’s beginning, helping to determine what returns should be anticipated. Staying in touch with clients throughout the life cycle of the project, we see if achievements have been made. For some clients, the Eureka! Winning Ways® process may have led to new product development or penetrating a new market. For other clients, a lean enterprise implementation may have helped them reduce inventory, add capacity or avoid construction of new space while improving productivity.
The second approach is a 20-question confidential survey developed by the Manufacturing Extension Partnership (MEP), which falls under the Commerce Department’s National Institute of Standards and Technology. Enterprise Minnesota is the MEP Center for our state.
Conducted by a third party, the survey asks whether clients saw increased sales or reduced costs in the last 12 months, created new jobs or retained them. It asks if clients made any investments based on advice from an MEP center, or whether improvements allowed them to avoid expenditures.
The national results for projects completed in 2006 are truly impressive. Based on engagements with 28,000 manufacturers, the organization’s affiliates created, increased and retained sales of $6.76 billion and saved clients costs of greater than $1.1 billion. The program produced 16,740 jobs and retained another 35,845 jobs.
Just as important, 82 percent of the manufacturers surveyed reported they were more competitive, 79 percent were more productive, 53 percent increased profits and 51 percent increased revenue or cash flow.
Taken as a whole, MEP and Enterprise Minnesota have created great value for clients. We challenge ourselves in each project to plan improvements resulting in a minimum 15:1 return on our client’s investment.
ROI matters greatly in today’s business world. And ROI is something MEP centers like ours deliver daily to clients in Minnesota and around the country.