CONTACT: Linda Abbott 608-826-6215
MADISON, Wis. – Innovation is an essential strategy to achieve profitable growth at a time of intense global competition, but it remains a challenge for many of Wisconsin’s small and mid-size manufacturers.
To help these manufacturers make the transition, the Wisconsin Manufacturing Extension Partnership (WMEP) is stepping up efforts to offer “strategic innovation” consulting services. WMEP is developing new innovation tools, expanding the number of consultants who can deliver this expertise and raising awareness among manufacturers.
“The rapid pace of globalization and technology requires all manufacturers to aggressively foster innovation in their products, processes and business strategies. This isn’t just about inventing the next iPod. It’s about finding new ways to compete in a fast-changing world,” said Michael Klonsinski, executive director of WMEP, a non-profit consulting firm that helps manufacturers become more competitive.
Wisconsin’s 10,000+ small and mid-size manufacturers are the foundation of the state’s $47 billion industrial sector and a vital link in the supply chains of larger firms.
WMEP’s strategic innovation services include market intelligence, innovation culture, customer profiling, new product development research, strategic business planning, competitive analysis and innovation blitz, an intense 1-2 day session designed to promote ideas for new products or business strategies.
Innovation can be daunting because it takes so many forms, Klonsinski said. These include creating new products to meet emerging needs; implementing lean techniques to get goods to market faster; identifying new markets for existing products; and even developing new business models. “Each type of innovation has its own tools, but the common denominator is to build a new platform for long-term profitable growth,” Klonsinski said.
Innovation can also mean installing a new laser system to cut parts while you sleep, or finding out your customers are willing to pay for a service you once offered for free. At a minimum, it means changing the way employees and management think about their companies and products, listen to their customers, and generate new ideas.
“Our role is to help manufacturers put into place a structure, process and culture of innovation,” Klonsinski says. “We know that innovative companies earn higher profits, pay better wages and attract better employees who in turn fuel more innovation.”
A recent survey of Georgia manufacturers reported that innovative firms paid workers a third more than the average Georgia manufacturer and were 40 percent less likely to lose work to outsourcing.
Innovation crucial to economic growth
Innovation is the single most important factor in determining America’s success in the 21st century, says a report from the Council on Competitiveness. Innovation generates the productivity that economists estimate has accounted for half of U.S. GDP growth over the past 50 years. Innovation gives rise to new industries and markets, fuels wealth creation and generates high value, high wage jobs, the report states.
Nearly 60% of all private sector research and development (R & D) is conducted by manufacturers. Manufacturers invent most of the new technologies used in their industry, and through spillover effect, in the services industries as well, reports a new study from The Manufacturing Institute, the research and education arm of the National Association of Manufacturers (NAM), and the Council of Manufacturing Associations.
The study warns that downward trends in U.S. manufacturing innovation pose a serious threat to America’s long-term economic growth and living standards. “The US cannot afford to lose its manufacturing innovation edge and the wealth it generates throughout our economy,” said NAM President John Engler.
The Wisconsin Manufacturing Study also underscores the need for manufacturing innovation. The study, released in Oct. 2005, reports that the state’s industrial sector is poised for future growth as long as manufacturers make the transition from commodity products, which can be produced more cheaply overseas, to higher value, customized goods and services.
Strong gains for Mayville manufacturer
WMEP helped Mayville-based Bachhuber Manufacturing Corp. drive innovation throughout the company. Bachhuber an ISO 9001 registered producer of press automation equipment and machined products, has increased sales 11 percent, improved profitability and slashed lead times in its machined products line, from six weeks to two days.
In addition to the process innovations with lean, Bachhuber analyzed its customer base to gain insights for future marketing efforts. The analysis revealed demand for their product was actually driven by tool and die makers – not press operators as once thought – because die design determined whether Bachhuber’s press loaders and unloaders could be used with a specific press. The result: the company was able to rehone its marketing message, target decision makers and grow sales. General Manager Dennis Thomas attributes roughly half of the company’s higher sales to the discovery.
Bachhuber’s emphasis on efficiency and innovation has sharpened its competitive edge.
“We’re in a much better position to grow and serve customers as a result of these changes, and we’re looking forward to building on these improvements.”
Madison-based WMEP provides technical expertise and hands-on business assistance to help small and mid-size manufacturers implement advanced manufacturing technologies and business practices. WMEP is a leader in lean manufacturing, strategic innovation, quality systems and supplier development. Last year WMEP-assisted manufacturers reported a $215 million economic benefit with 2,381 jobs created/retained. For more information, visit www.wmep.org, or call 1-877-856-8588.