Manufacturers Make Their Case at the Capitol

Business leaders from across the state urge legislators to support the Growth Acceleration Program.

Don VanderMey, president of Floe International in McGregor, did not have overly ambitious expectations about coming to the State Capitol to testify about funding for the Growth Acceleration Program (GAP). "I just wanted to have enough energy to convey [GAP's] importance," he said.

GAP is a state-funded matching-grant program for the state's small manufacturers to implement business improvements that increase efficiency, reduce costs, and promote growth. VanderMey was one of three Minnesota manufacturers who told members of State Senate Economic and Housing Budget Division about the strategic importance of GAP to their companies.

"People don't often realize how much of an effect they can have on issues at the capitol," says Enterprise Minnesota president and CEO Bob Kill. "There is little more powerful than manufacturers providing input and actual examples of how a program like GAP affects their business, their employees, and their community."

VanderMey told legislators how GAP helped Floe take on projects to reduce waste and free capital. Two years ago, he said, the company was keeping $5.5 million inventory on hand with lead times of five to six weeks. Today, through implementing kanban, or pull system, and the Toyota Production System the company has reduced inventory by over half to $2.6 million and lead times are just over a week.

"It was important for the legislators to hear about our work with GAP," says Denise Johnson, vice president of Rite Way Mechanical Installations, Inc. in Lester Prairie. She said that, particularly in a bad economy, it is important for the state to understand how their investment is paying back dividends.

Rite Way recently received GAP funds to help train supervisors, implement a new software system, and synchronous flow, a business system that improves results by increasing net profit and return on investment. Johnson says that the new software system has shown an immediate impact. She said that they are now able to provide clients with a quote within a few hours, and track inventory and costs much easier.

"Manufacturing is what drives this state," Johnson said. "During this down economy, it is the small and medium size manufacturing companies that are the job sustainers and, oftentimes, job creators."

Ed Polin, lean enterprise manager at Central Container Corp. in Brooklyn Park told legislators that over the past several years, with raw material prices rising and selling prices remaining flat, it is as important as ever for companies to remain on a lean journey. He said that GAP helped Central Container retain their commitment to lean and go a step further into 'green,' as they recently became the first Minnesota company registered in the Green Supplier Network.

Initially passed in 2007 as a $750,000 allocation, GAP funding has since enabled nearly 70 companies showing a $15 to $1 return on investment. The GAP legislation proposed this session, authored by State Senator David Tomassoni and State Representative Tim Mahoney, would provide a $3 million matching grant program for small manufacturing and manufacturing-related companies to implement new ideas, processes, and techniques to improve their business.

Having visited Floe International the past November, Senator Tomassoni told the committee of the company's progress from firsthand experience. "They've had a transformation," Tomassoni said. "It's very impressive."

For VanderMey, that is the type of support for GAP that he is happy to hear.

"If we keep doing this, manufacturing in the State of Minnesota can be a very well-oiled machine and we can remain extremely competitive, which is obviously great for our state and our people," he said.

Enterprise Minnesota Magazine
March/April 2009

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