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5.0. EDSR 04-12-2004 ITEM #.5. 11*' City of Elk River MEMORANDUM TO: Economic Development Authority FROM: Heidi Steinmetz, Assistant Director of Economic Development DATE: April 12, 2004 SUBJECT: Strategic Industrial Marketing Activities Update Attachments • Ad featuring E & 0 Tool and Plastics,Manufacturers Alliance April/May 2004 Newsletter • Progress Partner Dispatch (Economic Development Newsletter) April 2004 411 • Wolf Marketing&Media Information • Manufacturers Affiance Manufacturer of the Year Awards Flyer • Minnesota Technology Magazine,Winter 2004 I. Product Offering Strategy Industrial Land Issue Staff and Ehlers &Associates have received responses from the landowners of Elk River Business Park and Elk Path Business Center regarding terms of a master development agreement. They have indicated interest in participating in a master development agreement with the EDA for the development of their industrial/business park property. Staff is working with the attorney to draft the document. I I. Competitive Strategy Labor Market Research There is a separate memo regarding this issue. III. Key Account/Lead Generation Strategy As a result of the March 17th Star News article highlighting the Orluck Industries project, staff has received numerous inquiries from small to medium sized light industrial businesses seeking relocation or expansion. A comment among the calls was that they had thought Elk River was not interested nor had anything to offer light industrial companies. S Strategic Industrial Marketing Activities Update April 12,2004 Page 2 of 3 411 I V. Promotions & Advertising Strategy Manufacturers Alliance Newsletter The attached ad featuring E& 0 Tool and Plastics appeared in the April/May Manufacturers Alliance newsletter. This is the first year in which Elk River is advertising in the newsletter. It is important that advertising/public relations efforts reach both manufacturers and site selectors. The other publications in which Elk River advertisements appear are the MN Real Estate Journal Leasing Guide and The Business Journal,which appeal to site selectors, whereas the Manufacturers Affiance newsletter appeals to manufacturers. New SoftPac Ad Staff visited SoftPac in February to obtain new photos for a new ad featuring SoftPac. The ad will appear in the April 23rd Business Journal and in future issues of both The Business Journal and the Leasing Guide. V. Public Relations Strategy Economic Development Newsletter The attached fourth edition of the Economic Development Newsletter, the Progress Partner Dispatch,was distributed in late March to approximately 250 people representing the following groups: • Elk River manufacturers • High-tech companies located in Anoka, Sherburne,and Wright Counties • • Past&present prospects/inquiries • Key accounts (site selectors, etc.) The purpose is to inform businesses of information useful to their operations and present an "open for business"image. The newsletter is also available for download on the City's Website. New Public Relations Consultant Information is attached regarding Wolf Marketing&Media. Staff will be working with Murray Wolf on the 2004 Public Relations Strategy. Manufacturers Affiance Manufacturer of the Year Awards See the attached flyer on the Eighth Annual Manufacturers Affiance Manufacturer of the Year Awards. Staff attended the event in order to network with potential prospects. Sportech Featured in Recent Issue of MN Technology Magazine The attached cover photo and article featured Chris Carlson of Sportech. The article highlighted quality management programs,including the ISO 9000 system, a system used by Sportech. VI. Strategic Partnership Strategy Downtown Revitalization Project The HRA's preliminary development agreement with MetroPlains expired on April 5th, which means that staff is able to discuss the project with other developers,however the Strategic Industrial Marketing Activities Update April 12,2004 Page 3 of 3 • HRA has asked that final development agreement terms between the HRA and MetroPlains be presented at the May 3rd HRA meeting. VII. Business Retention Strategy Business Retention&Expansion (BRE) Visits Staff has been working to schedule BRE visits with Supermats and Dynetic Systems. Staff will contact EDA commissioners individually to schedule future BRE visits. . 1 PROGRESS PARTNER ch ham. River April 2004 Dispatch Light Industrial Hub of the Northwest Metro See and Be Seen —,,., r -,,.. z p streamlined the approval process for construction, so we '-."-:5;---'''-'4-:4-114'-:::: can be building to suit any new resident's needs quickly 4 mom,.` • „ -0T Arlt' `' and be cutting ribbons in a few months." Martens s� ,; -''! t points out that the fresh face of the Park allows for firms dSi r *' " a••.,lam ,-`, to have office space where clients and vendors may visit, { a' --,,::,t,--, '' � , right next to warehouse and light industrial manufacturing. '�' rgie v x "Today,image and efficiency must walk hand in hand, and �,r .r .,j-,�, N�. ki.,.',' , ,,-` -;,! the Elk River Business Park delivers." _. f lid y'^'* ' rr M � p<,. .r '. J#/ The location of the proposed Northstar Corridor �y a 77.4 , a Commuter Rail Depot is within blocks of the Park. In es 'xMz.,-;,-,:r),- `,,,,,,,,, „,,,e.. ,,---`( addition, the Parks prime location near Highway 169 `2, :,,,,,,,e.......,...;,�' --, yy', ' -et Ne*Il . .' and Hwy 10 provides the opportunity for great visibility re-' Imagine thousands of people seeing your firms logo every * -::::1_ day on the side of your bright, new facility. Talk about `i .r _11'..-., nome Depot " an image enhancer. �' MUItITenant ks- �I: • kik % - Bmlding Of course the city also has competitive land prices,TIF, \ '4.1i,-,./i''..IKr y ,,i- tax abatement, sub-prime loans and other incentives that �, ,i--,4. .�' rc-if -1-Z I - make the city a very cost-effective option from all perspectives. You need to give Elk River a close look. - - \h Twin Lakes Road -"'N "w"'° Elk River #1 in Job Growth! When looking for better space to conduct your business A recent review of employment data by the Minnesota and manufacturing, in addition to the"Location, Department of Employment and Economic Development Location, Location" that Elk River provides,you will indicated that Elk River had the largest net growth in employment of any city in central Minnesota. This was want to get ALL the amenities possible. calculated based on the number of employees in each The City of Elk River is both fortunate and proud to be community in Ql of 2001 compared to Ql of 2003. working closely with Brookstone, Inc. and Amcon Dan Swartz,Vice President of CB Richard Ellis says,"In my Construction to develop the Elk River Business Park, experience,businesses are attracted to the northwest area of the conveniently located overlooking Highway 169 on the east metro for access to the strong labor force. Often this labor side of town. Nearly 10,000 sf of building lease space is force is the existing workforce of a company looking to available and 25 acres of land that is already platted, relocate," says Swartz. "One of my clients is focusing on zoned business park/light industrial and offers fully this area since, even though they are located south of I-694, serviced lots from 1.5 to 10 acres. Even details like soil every existing employee lives in this area and they are correction and grading are already done to make your looking to grow their workforce with more quality move to Elk River that much smoother. Most lots will employees. I expect this trend to continue and in fact • also offer expansion potential as firms grow,which seems accelerate as the economy continues to grow." to be the norm in Elk River. Continued on back. "Everything stands ready to go," says Rick Martens, President of Brookstone, Inc. "Plus the city has r Am River w 3065 Orono Pkwy Elk River,MN 55330 Continued from front. Positively Minnesota! Governor's According to Cathy Mehelich, Director Manufacturing Roundtable results. of Economic Development for the City of Elk River, "Dan is right on the mark. In October of 2003, Governor Pawlenty convened three manufacturing We saw continued growth during 2003 roundtable discussions to ask executives how government can'support and expect great things this year.As the revitalization of Minnesota manufacturing. Suggestions included: light industrial hub of the northwest •'Tax cuts and reform to match neighboring states metro,Elk River is actively working to foster development of both the hot •Change state regulations and simplify permits commodities required for this job growth • Strengthen ties between education and industry to continue facilities and workforce." • Control rising health care costs •Appoint a state advocate for manufacturers in Elk River, founder Mark Jenson has •Make transportation projects a higher priori At Cymbet, a technology company based ty found it easy to recruit the highest skilled candidates to work in the city. Jenson •Protect and expand incentives for re-investment also-notes, "Our employees that commute The Department of Employment and Economic Development (DFFD) north to get here often comment what a took this information and identified the following key for further pleasure it is to drive the speed limit to discussion: work while watching the opposing traffic crawling its way south." •Reforming corporate taxation and sales tax on capital equipment •Changing the focus of regulatory agencies from enforcement to assistance In addition to exceptional values in employees and commercial real estate, • Streamlining and improving the process for obtaining state permits Elk River offers unique incentives for •Working with higher education to build a skilled manufacturing force businesses: competitive land prices,TIF, •Analyze the cost and value of adding a state advocate for Minnesota tax abatement and sub-prime loans that manufacturers make the city a very cost-effective option from all perspectives. • Containing health care costs •Working to cut air travel cost for manufacturers Contact the Economic Development Department at 763.635.1040 or visit the The complete report canbe found at city Web site at www ci.elk river.mn.us www.dted.state mn.us/FDPs/Roun.dtableRpt.pdf.Contact Diane Knutson for detailed information on available of DEED at diane.knutson@state.mn.us or 651.296.6076 with your III industrial sites. manufacturing comments or concerns. A � � avoid the temptations, the writing is Time to Reach so clear that the first steps to i our 2000+committed readers throu h an ad 4001°F. 0y 0 change should be easy to see. g in our newsletter ,fit Recognizing a problem is, as the �..,,iy�� — k.. adage goes, the first and hardest ' P . step in change. �� This book is part of a series. The �� other two books cover teams and "extraordinary" executives. Book Review: Not a CEO? At least not yet? = Call Bob Platt at Unless you live in a cave with no 651-647-9742 The Five interpersonal relationships whatso- Temptations ever, this book is worth a look. I of a CEO: think it would be very useful for any- •Engineering one with responsibility for others, •Technical A Leadership Fable from supervisors to CEO's and from • Light Industrial Lencioni,Patrick parents to camp counselors. Specialized Staffing Solutions for Your Business! San Francisco:Josey-Bass,1998fl John Hehre is president of We offer Temporary & Direct Hire Creative Processes Inc, Cute titles frequently grace books Placements for all levels: that otherwise wouldn't sell, and fora management-consulting .Drafters/Designers •All types of Engineers firm specializing in •Manufacturing/Production •Technicians good reason. In this case, however, business and mane- 39 ears 1965-2004 the title is appropriate and the book Celebrating y factoring process improve- is worth reading by a much wider ment for small-to Call June or Mike at(952)920-8040 audience than CEOs. A more appro- or visit us at www.daconeng.com priate title might have been The medium-sized firms.More information Effect of Key Interpersonal is available at www.cprocess.com. BACON Engineering&Service Co.,Inc Characteristics on Relationships with subordinates and ... snooze ... the u . Human Condition. Of course a title s MANY INDUSTRIES... like that would immediately place �� ,isONE LEADING EDGE the book,complete with dust,on the LOCATION shelves of other writers about the :` Location,location,location. "E&0 is mostly a regional ' � company.Elk River is close co major highways,which gives us human condition, never to be read p y i access to our customer base." by anyone without a pipe and a —Jay Caswell,CFO and co-owner,E&0 Tool and Platt/rr,Inc. tweed jacket. For site and financing opportunities,call(763)635-1040, The first part of the book is a - a or visit us on the Web at www.ci.elk-river.ntn.us. fable.The central character is a CEO , ,w l troubled by a big board meeting the . oY following day. He is introduced toos: Elk River the five temptations on his way The Light Industrial Hub othe Northwest Metro home that night. Each of the five temptenough c is illustrateds with COIDIAN Identifying Solutions enough description and examples to That Get Business on Track make it easy to understand. The r E c H N O L O G I E S,INC and Keep it There OCUSIWG GJW YNt)tf5YN1AL lII88HYtlrfCAYiON story, although obviously fictitious, is fun and easy to read. If WE don't have it, YOU don't need it. The second part of the book is a self-assessment of sorts, designedc� , r"m . to make readers think about which ' ' of the- five temptations they struggle - ' ; with. This part of the book requires ---XI Series Printers S Series Printers Desktop Printers Portable Printers Industrial/Manufacturing Warehousing/Distribution Low Volume Retail/Warehousing some honest self-examination. 8140 Mallory Court Office Environments iliklthough the book does not offer Chanhassen • MN • 55317 ®�tl=.s a pecific suggestions on how to Phone: 952-361-9980• Fax: 952-361-9981 •• info@coridian.com Visit our website at www.coridian.com ma@mfrall.com April/May 2004 A Manufacturers Alliance CALENDAR April 8 Alliance Program May 13 Alliance Program Join your peers to celebrate the Eighth Annual Lean Assessments and Audits A Manufacturers Alliance sponsors Manufacturer of the Year 2004 Does your company perform a valid baseline • March 26—Workshop:Rapid Design for Lean assess assessment ofyour ess=tuu�ar leas'goals? Manufacturing See page 6. � Awards '. p' Come hear why these Pee winning companies openly Valid performance measures agams .appropriate March 30—Workshop:Lean Maintenance expectations help,drive most improvement objectives. See page 6. give their time and share their journey a a key strategy p1 g to their own continuous improvement process. So,when your goal is to achieve mean enterprise you z April 6--Workshop:Change Management for need to establish a baseline of where you are now and a Lean Transformation Presentations by the Year 2004 Winners: use an objective yardstick to measure improvements. See page 6. Landscape Structures This should gage progress, inform stakeholders, and April 8—Manufacturer of the Year 2004 Awardsrive efforts to progress.Our presenters have it figured See this page and the yellow insert. Diversified Plastics, Inc.Iout!Learn how and why. DriSteem Corporation Presented by April 13-May 18—Workshop:Supervisory Training:Leading Down New Paths See page 8. Keynote address by Stevie Ray,Executive Director Hoffman Enclosures, Inc. April 20—Workshop:Visual Management& Stevie Ray's improv Honeywell—CAP 5S Improvement See page 6t. Thinking on Your Feet Rockwell Automation April 29—Workshop: Rapid Using Humor Effectively in the Workplace P P p Moderator:Pete Berglund Improvement See page 6. A gourmet breakfast buffet will be served. Thursday,April 8 7-10 a.m. Thursday,May 13 7:30-9:30 a.m. May 11:—Workshop:Measuring the Right Stuff See page 6. Please note change in time from regular programs. Hennepin Technical College—Auditorium Wooddale Church 9000 Brooklyn Boulevard,Brooklyn Park .` For all Alliance events,check the Web site at 6630 Shady Oak Road,Eden Prairie (Hwy 169&Brooklyn Boulevard.Exit east) www .mfrall.com and click on CALENDAR tab. Free Parking—Please enter at Door#Two Use student lots only—Free Parking Reserve online:www.mfrall.com Reserve online:www.mfrall.com A MPMA, PMA and NAM sponsors: Email:ma@mfrall.com,or call 763-533-8239 Email:ma@mfrall.com,or call 763-533-8239 April 5—Summit:Manufacturing Tomorrow: by Tuesday,April 6 by Tuesday,May 11 Charting a Course for Success in the Global Marketplace. Sponsored by Boston Scientific and The Business Journal. For info,and to reserve,call 612-455-17411 ASQ=MN Section 1203 sponsors: RESERVATIONS AND PROGRAM.DETAILS AApril 13—Section Meeting:QS9000's Fee at the door: ♦Reserve on-line:www.mfrall.com, Replacement TS16949 $30 for non-members A Email:ma@mfrall.com,or 40 For info and to reserve,call 651-779-9820. 4 FREE for Alliance company members A Call 763-533-8239 1 FREE for Alliance independent members Supervisory Training—April 13-May 18 See page 8. Time to Purchase the 2004 Wage Survey See page 3. c AA , Manufacturers Alliance PRESORTED YvV v Sharing Education &Resources Peer-to-Peer STANDARD 6233 Fernbrook Lane North A Maple Grove, MN 55311 U.S. POSTAGE www.mfrall.com A 763-533-8239 PAID PERMIT NO. 1121 MINNEAPOLIS, MN RETURN SERVICE REQUESTED Editor:Joan Houck Publisher:Art Sneen Adm. Asst.:Nancy Lohmann Layout:Marsha Micek A Design Board of Advisors: Peter Berglund Jeff Bowers Tom Denny Justin Dorsey Cathy Mehelich Ted Johnson Tim Mellesmoen Lynn Moline Loretta Mullany Rich Sachse Bruce Vatne City of Elk River Steering Committee: Don Craighead Jerry Doran 13065 Orono Pkwy Box 490 John Hehre Steve Murray Joe Norwood Terry Paul Elk River, MN 55330 Tom Pepin Mark Schuehie Lori Wallace For change of address or other mailing instructions,check and return 0 this newsletter to the above address. ❑ Remove name from mailing list ❑ Replace name with Manufacturers Alliance intends to provide information from competent sources, Please Reroute if Necessary but does not intend that the information be considered legal advice,nor does it intend that acceptance of advertisement construes endorsement of any Please Share This Copy with Others product or service. WMM Home Page 1 of 1 WiLF MARKETING & MEDIA Wednesday,April 07,2004 12900 April Lane,P.O.Box 1467,Minnetonka,MN 55345-0467 Phone:952.746-4405 Fax:952.746.4406 E-Mail:info@woifmarketing.com MISSION At WOLF MARKETING&MEDIA, our mission is simple. It's to help you to achieve your yours. Perhaps your in-house marketing and communications team needs help with an occasional project. Or perhaps you'd prefer to outsource the entire function. Either way, WOLF MARKETING&MEDIA has the experience,tools and talent you need. We're known for our uncompromising quality, attentive customer service and ability to deliver what's promised -- on time and on budget. Whatever your marketing and communications needs, large or small, please don't hesitate. Call us today. We will make it happen. ©2002-04 WOLF MARKETING&MEDIA LLC. All rights reserved. The material on this site may not be reproduced,distributed,transmitted,cached or otherwise used, except with the prior written permission of WOLF MARKETING&MEDIA LLC. • http://www.hreinsights.com/wmm_home.htm 4/7/2004 WMM Services Page 1 of 1 ../V N, di MARKETING & MEDIA Wednesday,April 07,2004 12900 April Lane,P.O.Box 1467,Minnetonka,MN 55345-0467 Phone:952.746-4405 Fax:952.746.4406 E-Mail:info@wolfmarketing.com SERVICES WOLF MARKETING&MEDIA is a full-service marketing and communications agency. We provide these services: • Strategic Marketing Consulting and Planning • Branding and Marketplace Positioning • Public Relations • Direct Marketing • Custom Publishing • Advertising - ,a�. , We can offer a complete turnkey service, including: • Conceptualization and Planning • Writing, Editing and Proofreading • Graphic Design and Layout • Production Management • Distribution Management • • Account/Project Management ©2002-03 WOLF MARKETING&MEDIA LLC. All rights reserved. The material on this site may not be reproduced,distributed,transmitted,cached or otherwise used, except with the prior written permission of WOLF MARKETING&MEDIA LLC. M http://www.hreinsights.com/wmm_services.htm 4/7/2004 WMM Our Work Page 1 of 1 IV MARKETING & MEDIA Wednesday,April 07,2004 12900 April Lane,P.O.Box 1467,Minnetonka,MN 55345-0467 Phone:952.746-4405 Fax:952.746.4406 E-Mail:info@wolfmarketing.com OUR WORK Implementing your marketing and communications strategy can take many forms. Here are some of the tool we can use to help you to achieve your goals: 1 Y I rSq ; LI yNewsletters, Directories and ,Public relations Direct marketing magazines membership guides and books ' Lr'frl f 3?�;5 r.,or • , ,..., , .... , ,,,,,, Writing Event and Advertising Web site content, sponsorship marketing and promotions design and development For case studies and other details regarding how we used these marketing and communications tools to deliver measurable results for these and many more clients, please contact us today. ©2002-03 WOLF MARKETING&MEDIA LLC. All rights reserved. The material on this site may not be reproduced,distributed,transmitted,cached or otherwise used, except with the prior written permission of WoLF MARKETING&MEDIA LLC. • http://www.hreinsights.com/WMM%20Our%20Work.htm 4/7/2004 WMM Home Page 1 of 1 Iv ) LF MARKETING & MEDIA Wednesday,April 07,2004 Sunday,July 13,2003 12900 April Lane,P.O.Box 1467,Minnetonka,MN 55345-0467 Phone:952.746-4405 Fax:952.746.4406 E-Mail:info@wolfmarketing.com NEWS/EVENTS On May 27, 2004, Murray W. Wolf, Principal of WOLF MARKETING&MEDIA LLC, will lead a seminar entitled "Third-Party Development and Ownership of Medical Office Buildings: What Every Hospital and Health System Executive Needs to Know," sponsored by the Healthcare Real " ' Estate InsightsTM newsletter. The seminar will be presented as an audio conference. For more information, please click here. On January 9, 2004, Mr. Wolf moderated a panel discussion entitled "What Clients Want to See in Statements of Qualifications (SOQs) & Interviews," sponsored by the Society for Marketing Professional Services (SMPS). The panel discussion, which focused on what healthcare decision-makers look for when they select architects, engineers and contractors, was held in Minneapolis, Minn. On October 28, 2003, Murray was a panelist during a discussion of marketing at "Business Growth 2003: A Resource Seminar for Area Commercial/Industrial Businesses." The seminar was sponsored by the Wright County (Minn.) Economic Development Partnership. Murray is an Adjunct Professor of Marketing Management in the MBA Program at the University of St. Thomas in the Twin Cities, and frequently speaks to trade and civic organizations. He has previously made presentations during the Minnesota Real Estate 411 Journal/University of St.Thomas "Seminar on Healthcare Real Estate," and to groups including SMPS,the Northwest Suburban Chamber of Commerce (Corcoran, Minn.) and Social Workers In Marketing (SWIM). If you are interested in having Murray speak to your organization, please contact him at(952) 746-4405 or mwolf@wolfmarketinq.com. ©2002-03 WOLF MARKETING&MEDIA LLC. All rights reserved. The material on this site may not be reproduced,distributed,transmitted,cached or otherwise used, except with the prior written permission of WOLF MARKETING&MEDIA LLC. • http://www.hreinsights.com/WMM%2Onews-events.htm 4/7/2004 • Eighth Annual Manufacturers Alliance Manufacturer of theYear Awards Thursday, April 8, 2004 7:00- 10:00 a.m. Our three winners will share their continuous improvement experiences. Landscape Structu se Ince Diversified Plastics, Ince DriSteem Corporation Keynote speaker Stevie Ray Columnist for the Business fouirnal Newspaper Executive Director, Stevie Ray's Improv Company Keynote address thinking on dour Jeer "Using humor effectively in the workplace" Gala Celebration ❖ 7:00 a.m. Breakfast Buffet ❖ 7:45 a.m. Awards Presentation 8:45 a.m. Keynote Address 9: 15 a.m. Meet the Winners DATE &TIME: Thursday, April $,2004 7:00. 10:00 a.m. (Nae time change from norma!programs) LOCATION: Wooddale Church- 6630 Shady Oak Road, Eden Prairie, Minnesota Please enter at Door#2 •This area has its own parkirg lot. For map& directions,check our website atwww.mfrall.com COST: $30 at the door for non-members of the Alliance FREE to Alliance members (up to fair free w/comembership, oda"!$30 each) RESERVATIONS: Please reserve early. Deadline is Tuesday, April 6, 2003. Reserve on-line at www.mfrall.com, e-mail to ma@rnfrall.com or call 763-533-8239. Reserved tables for 8 are $200 for 4 are $100. Contact the Alliance office at 763-533-8239 Manufacturer of the Year 2004 Awards Platinum Sponsors: t NEWS�t Sc{ ?ficBUSINESS NMtlittt,J,1$• ST, t • 1 E URNAL .. LEAN OFTFICE ESSENTIALS ■ WEB SITE ROI ■ KEEPING (TRADE) SECRETS ■ SMALL PROJECT;MANAGEMENT '� .` =` . :.• y, _:,,„„.._, ay.... , , q 1otT6hflIi ° y �N�t0 EC N' 0 tDfIGIAN'UFAAC NES71 5 .s1N "T a �a .; .a � 'e i' r "1,-4 S'r.. t+t * .w?Fy, r s�a y k t L � Iii I '' grana Y -- pr . iJ p; , - - pr®nm®se.a : z ^` ,: smoother , • 3'2 ' ri, „.. . . ,-...,- , _,, . „r., . Win@ IS .11 , • I:,, , ' . i .' - hwoht '....''''''''"' ,-liih, ., ,. _. ,, i , , , , ,, . ,,,, } for you* : , I: , w Chris Carlson,presidet i and CEO of Ellc Rise a do I has seen aig ,oo q Iit : `� t .� thanks to ail-IS 9f.a i \ . .401 , m .,,,...,..,,,,,e,....,_r. iii. 1./osis_ 1,101, „,-_,-, r.,,,,i4..„7,.., .. .. ..i.,,, ...„. . „, , .., .„:, , „. , . . , .,.. „ .„00.,.. .,:, .,,,,. t r„,, , 11.„, . ..,„ iiii ...•• ' ' ' ,"ir:' ..."6114 '.."filtio , , 5,....:r � ofP 0 N ,,.......„::...':,., \ S' '',......„. 400 \ . . ft, F` tx -,,,,,,,,... ? - . www.mntechnologymag.com ” ' Don't be intimidated by locker-code combinations like ISO 9001 or 14001. . t Behind them lie logical,adaptable processes to improve your business. } Via. . st. it lit s, <. 6 Y , , iiii• ..f ,. .. , � III ® 1 lei N I - fi \ .. ; li, ',,,,., z"efi f QuALITy „, , fi ® s I. , ,,,., 1 ... ,. ; 1 t. In 2003,the following consumer problems occurred in my household: _ a Two different retailers shipped us only one item when we'd ordered two, 1 but billed us for both.Two boxes of curtain rods either had missing parts `, or the wrong metal finish.Curtains purchased from a chain retailer were f shorter than the length indicated on the package.And in the box for a piece € of pressboard furniture,we discovered that the manufacturer had left out one third of the drawer runners.Consider that one company we dealt with had an error rating of 33 percent for all the products we bought from it. ; Now consider what it costs companies to fix these errors—from shipping ,n . replacement parts to losing a sale—and then multiply those costs across mil lions of customers. „ , I Exactly how much money American companies lose annually due to production errors is impossible to say;measuring and tracking such fig- ures across industries would be a monumental task.But there are clues. fry In 2002,the Meta Group,a Stamford,Conn.-based technology consult- 7„ r - ing firm,estimated that roughly 65 percent of the data sets that define = �. ` products and components had errors;that figure jumped to 80 percent for high tech,automotive,and aerospace products.The Malcolm Baldrige 5. National Quality Program estimates that quality lapses cost U.S.compa- nies about 20 percent of their sales revenues annually.And the U.S.Con- sumer Product Safety Commission estimates that deaths,injuries, and ",::: "` property damage from consumer product incidents cost the nation more than$700 billion a year.In short,there's room for improvement. With that in mind,it's no wonder that companies are turning to qual- ity management programs to help them please customers,reduce errors, and control costs.Within the last decade,programs such as ISO 9000,Mal- colm Baldrige,and Six Sigma have become more established practices for large and small U.S.businesses.ISO quality management and environ- Chris Carlson, :,. president and CEO BY SARA AASE I PHOTOGRAPHS BY DAN MARSHALL SpartechInc I 10 MINNESOTA TECHNOLOGY I WINTER 2004 mental certification,for example,now applies to about ,a! 1 I II' li 0 0 #i.:,—•4tli 1 60,000 U.S.companies,up from a few hundred a decade v E 1 € before,says Doug Older,owner of Techlogic,a quality I "III. M 11 CI II., t consulting firm based in Isle,Minn. Quality Magazine reports that businesses will spend 10 percent more in 2004 on quality testing equipment,software,and services than - = .; #.;.1 : ! „ 1,„0 • , - , --. - - ,a '`' they did in 2003.The magazine also notes that the rise i : ,, , ,.ti comes on the heels of a 14 percent increase over 2002. { ' 1; �; 1 One reason why:international competition,which is ' j. :.""h**46 ", .. spurring more companies to earn quality certifications. 1k,,‘1.4.0100r, Currently,ISO certification in other countries far out- ' i r ' :; �� paces that in the United States. "Unless a company is , geared to that global mentality,it's going to be left behind," �� 1 .i -� 1 ' ' '- Older says. "Quality demands are going to keep going y;' 11' . ,€ up;they're never going to be lower.• " t How do you know if your company would benefit . iititiowOMMONSOOMMINOWommimittoo t.• 1 1 from a quality management system,and which one should 1 you choose?That's where it pays to do some homework. BEHIND THE LETTERS ;1' ' What do systems such as ISO 9000,TS 16949,QS 9000,Six Sigma,and Malcolm Baldrige have in common?They're , t ' , i # all tools for helping companies get organized and track C ! j and control businesses processes and their outcomes. ' I 1 i Ik § "Most companies have 50 percent of[a quality program] �.: N. °: _` in place and they just don't know it,"says Anne Ochs, r ' , - principal of Quest Analytical,an Edina-based quality spe- I \ , I ' cialty firm. "A lot of manufacturing training and pro- -, duction is by word of mouth Joe teaches Sam,who teach- r ,\ es Alice,and the original process gets lost as each person l changes it or misses a step." w, Ochs adds that quality program implementation forces I",••• '"4.. companies to identify the good 50 percent,as well as the other half that's missing,by systematically constructing, following,and reviewing a business operation plan.It \' P requires the input of company employees in codifying production and workflow standards so that everyone .4. 0 agrees on best practices."Once you've defined your processes and you've controlled them, then you can improve them,"she explains."Until you've defined and started to measure them,it's hard to realistically improve." VI," The good news is that by following one of these proven F \ t•c t systems,you don't have to reinvent the wheel—you can °' merely adapt a system that works with your own busi- fc ness model.Choosing one system over another depends on such factors as a company's industry affiliation and regulations,business goals,customers,and size,but the '., ; 1 -I underlying principles of following and reviewing clear ® -. business plans and procedures,are much the same. ISO 9000:A SOLID FOUNDATION That said,many consultants and companies advise start- ing with an ISO 9000 system as a foundation.The Inter- national Organization for Standardization(ISO),a Gene- va,Switzerland-based nongovernmental network of the national standards institutes of 147 countries,is responsible for the largest body of quality management standards. WINTER 2004 I MINNESOTA TECHNOLOGY 11 11 11 ISO 9000,a generic set of quality management principles,lies ! tern,says Paul Thomsen,the company's director of purchasing, at the system's heart,while its different branches,such as QS millwide systems,and total quality manager. "We identified 9000,TS 16949,and ISO 13485 all apply additional standards that the common theme was a lack of an organized,systemat- • specific to industries and products within industries,such as is structure to do what we wanted to do,so we decided to pur automotive or medical products.All standards come up for sue ISO certification to mold those systematic methods,"he ireview and possible revision every five years.A new ISO 14001 says,noting that the low-priority problems that once were standard applies to environmental management practices,and ignored,only to resurface months later,get logged,reviewed, I' a new international occupational health and safety standard is and corrected. in the works. "Think of it as building a house,"says Ochs. Previously adopted almost exclusively by manufacturers, "The foundation is pretty much the same;additional specifics ! the ISO 9000 standards—the latest revision being the easiest by industry are like some of the walls being different." yet to adapt and follow,companies say—have been expanding The 325-employee Duluth plant of Stora Enso,a$9.9 billion rapidly to service industries such as banking and telecommu- paper products manufacturing company based in Finland,got nications.Although ISO 9000 encompasses a wide range of its ISO certifications for quality and environmental manage- standards and many industries,the latest quality management ■ 1 ment in 2002 after doing a self-assessment according to the certification standard, published in 2000, is called ISO quality principles of Malcolm Baldrige,a tougher quality sys- 9001:2000. "There seems to be natural progression with the standard to more of a business management system," says Myron Dummer,director of quality for Win- . d. • „,,,&,:7,-,41'4:43--- • :� land Electronics,a Mankato-based manufacturer of �'� , � ' tics , �v.' • products such as motor controllers.With about 90 _ ° ..is A'',':';;=;:7,' -�” "` a� l';':;::--; a, � ,�7 �,, ' employees and$18 million m annual revenues,Win- ': � r `�'' land first earned its basic ISO 9000 certification in F,�� - ,' , v, 1999,upgraded it to the ISO 9001:2000 standard last 1,. 41 = September and is now pursuing the ISO 13485 cer- 2 A tification for medical devices."Under the 1994 stan- r {/ dard it was hard to address your business manage- ' «;7,. ment systems,but with the 2000 revision it's a lot ,»`' better fit. I have a further appreciation of how our Y £. systems work together." -* - Consultants and companies like ISO 9000 because of its practicality and flexibility."Every organization in the world should operate according to ISO 9000," says Mark Ames,president of AQS Management Sys- ` tems,a St. Paul-based quality consulting firm. "It contains the basic requirements about how to get organized and run your business in a thoughtful, planned fashion instead of in a reactive mode. ` ,;,. ' ` The quality standard is organized around eight .. v.: r principles:customer focus,leadership,involvement of people,process approach,a systematic approach to management, continual improvement,factual d approach to decision making,and mutually beneficial _ 4 _ N supplier relationships.But ISO leaves it up to indi- _+i® vidual companies to interpret how to apply and carry `^'^ out the principles,so each business's ISO 9000 system � Parties. Pani Manua "m U 4��- will be different.That helps overcome a major hur- ,„,.:4 ,5-..'''' "�` dle to acceptance of a quality program—thinking that -40 �'' one's processes are too unique to be codified—while still providing unique ownership of the processes. "Once you've defined your processes and "A lot of people feel like their processes can't be you've controlled them,then you defined,or they can't be responsive to their customers if they codify them," Ochs says. In fact,the oppo- can improve them.Until you've defined site is true,she adds—once a company documents and started to measure them,it's hard how to do things,it makes it easier to identify excep- • to realistically improve." tions and be more responsive.Perhaps a pattern of exceptions will in turn lead to revised and improved practices. 12 MINNESOTA TECHNOLOGY I WINTER 2004 y. ` a iii ai ,,` ,,, Still,putting ISO systems in place z� I can require big changes. At Stora ' ' , ,$„ Enso's Duluth operation,the corn- ;. 1` ' • pany converted all of its documents .°. -\' to electronic versions to make sure that everyone had accessto the latest information. Thomsen says the , " * `i at process took about 16 months and required a 12-person steering com- mittee to drive it.It wasn't cheap or easy,and it involved a lot of people's time,he notes,but it was worth the effort. k Chris Carlson, president and . CEO of Elk River-based Sportech Inc.,an accessory manufacturer for 1 sport vehicles such as snowmobiles F ' and motorcycles,was pleasantly sur prised at how smoothly his compa ny implemented ISO 9000 last Octo- ber."I expected people with calipers, + forcing these systems on us,"he says. i "But they basically said, `This is i where you need to end up,now how , are you going to get there?"'" Sportech has 35 employees and a Joan Leedy,president, projected$8 million in sales for 2004. Dyne Technologies The bulk of its products are private • label items for customers such as Yamaha,Arctic Cat,and Polaris.ISO "[Thanks to ISO]our employees will know exactly 9000 implementation took about nine what to do because it's all written down,it will make us safer months, Carlson says,and had an immediate impact on quality.For in dealing with chemicals—and it will make sure example,he notes,prior to ISO 9000, all our customers are treated identically." Sportech might have sent out a wind- shield hardware kit that was missing, say,a bolt.It might seem obvious or mundane,he says, but Ochs sees three components as fundamental to success:the under the ISO quality program,the company glued each piece management review process,the corrective/preventative action of each kit with its corresponding part numbers to illustration process,and the internal audits process. "A failure in any of boards and hung them up in the assembly area.Now Sportech these is called a catastrophic failure,"she adds,and an outside employees are catching those kinds of errors before shipping. company called a registrar will likely halt an audit.Companies "This system is hard-wired as a proactive approach,"Carlson don't necessarily have to choose a registrar to certify their says."It forces to you take a look at what are you doing,how processes and officially register them as ISO compliant.If a are you doing it,and why." company does choose to become registered,it should perform three months'worth of internal auditing records before hav- STEPS TO IMPLEMENTATION AND CERTIFICATION ingaregistrar come in. To put an ISO 9000 or similar quality system in place,compa- nies typically hire a consultant who can perform a gap analy- FIRST THINGS FIRST sis for them—that is, assess what they're doing and what Companies that supply parts in highly technical industries such processes they need to change to meet quality standards.The as the automotive field often have additional product-specif- company then puts in place a steering committee made up of is quality requirements under ISO.For automotive suppliers, managers and representatives from other departments.That the ISO standard known as QS 9000 is being phased out corn- steering committee in turn might designate subcommittees to pletely by the end of 2006 in favor of a new standard,ISO/TS help write out its processes,depending on the size of the firm. 16949.While advanced standards are worthwhile,many peo- • As a company nears the end of the process,it trains some of ple who have been through the process will tell you that it pays its own people to do internal audits to make sure the system to nail the basics first.Frank Tsuchiya,corporate quality assur- actually works. ance manager at Minneapolis-based Donaldson Co.,a$1.2 bil- ................. WINTER 2004 I MINNESOTA TECHNOLOGY 13 In n lion filtration products manufacturing firm,says corn- , V 1 a�k I n g i-t \A o r I� panies should initially focus on basic ISO certifica- V V tion."You need to get that infrastructure in place,"he Il THREE WAYS TO ENSURE YOUR QUALITY PROGRAM says."QS and TS are more on the`10'end of the quai- 1 • DELIVERS QUALITY RESULTS. I ityscaleandrequirealotofmoneyandtime." I Because of its size—the company has 9,000 employ- lI [TIP #1] ASSESS YOUR NEEDS ees—Donaldson can't put new quality systems in place In choosing a quality program,focus first and foremost on your as quickly as smaller companies.Tsuchiya says Don company's needs."The absolute number-one ironclad rule is that it aldson started converting from QS to TS in 2001 and must make sense from a business and financial standpoint,"says should be done early this year.But he adds that the II Mark Ames,president.of St. Paul-based AQS Management process will vastly improve his company's quality sys- Systems. tems,because the new standard focuses less on the Big While many companies find it tough to pin down an actual ROI number from quality system implementation,they do talk about Three automakers'individual requirements,for exam immediatelyseeingimproved qualityand efficiency. Many also sayple,and more on actual work processes."Under QS � p Y Y I I that a formal quality program helps win new customers and get we did department-by-department audits that never them into new markets."If you have a potential customer that covered the processes and linkages to other depart- won't talk to you if you're not ISO certified,how do you know menu,"he says."In TS,the auditors come in and start what that's worth to your business? Ames says. Landing new customers is one of the expectations for Dyne with the senior vice president,the CEO,and sales- Technologies,a Woodbury-based firm that tests industrial firefight- ' people,comparing the business plan,strategies,and ing foam.The company hopes to complete its ISO 9001:2000 cer- priorities,and[asking]how they in turn flow down = tification in May."I think ultimately it will lead to more sales," into the rest of the organization." says Joan Leedy,president."I think some people out there don't use us [now] because they don't know who we are or what we do." NO SIZE LIMITATIONS A quality management system should also return cost savings to companies within the first year,consultants say.According to With only five people,Dyne Technologies,a Wood- Anne Ochs,principal of Quest Analytical,an Edina-based quality bury company that tests industrial firefighting foam, specialty firm,a Deloitte and Touche survey done in the 1990s put . doesn't have the coordination headaches of a Don- the average annual domestic savings for quality management sys- aldson.Instead,it has the same struggles as many of teras at $25,000 for companies with less than $11 million in rev- enues: its mid-size counterparts—how to take on a quality . [TIP #2] MAKE SURE THE PROGRAM FITS organization project in addition to the full-time responsibilities of running the business. Company Talk to other companies in your industry and with experienced president Joan Leedy says her company began the ij quality consultants.They can help you get a feel for the basic j process of adopting ISO 9001:2000 last August and meanings behind quality standards and how they might apply to ' your business. But no matter how much or little you rely on out I should be finished by May.But she doesn't doubt the side help,consultants say,companies must expect to do the hard value of the process. "[Thanks to ISO] our employ- work of adapting quality standards to the way they do business. ees will know exactly what to do because it's all writ- "There are companies out there that will sell you the paperwork, j ten down,"she notes. "It will make us safer in deal- but if you don't at a minimum adapt that,then you just have a I � book of papers,""Ochs says. ing with chemicals, and it will make sure all our p p customers are treated identically,so they don't get a COMMIT TO LEADERSHIP phone call one day and a fax the next." [TIP #3] AND FOLLOW-THROUGH Leedy also expects the certification to lead to more Once you've determined which quality program best fits your budg- sales and perhaps new testing markets as well. "ISO et and needs,you need to commit your top leaders and a team of i will spell out how we look at testing,"she notes,"If we key people—or, if you have a small company,as many people as add a new type,we'll do it much more methodically." possible—to see the effort through.Often that means designating one coordinator as the quality lead,and reassigning many of his or BEYOND ISO her previous job duties elsewhere.While some companies will hire a full-time quality coordinator,or have a quality department, Once it's successfully in place,an ISO 9000 quality "quality"people should not be seen as proxies for management,or management system often leads companies to con- the program won't be as effective,says Frank Tsuchiya,corporate sider additional quality steps,such as the environ- quality assurance manager at Minneapolis-based Donaldson Co. In mental quality management system ISO 14001,or the past, he explains, management designated all quality initiatives to his and other quality departments;now a new process requires a more stringent systems such as Malcolm Baldrige,Six top-down approach. Doug Older of Techlogic,a quality consulting Sigma,or lean manufacturing.The Baldrige program, firm in Isle, M inn.,says reluctance or reticence from upper man- which bears the name of a former Secretary of Com- agement indicates a lack of commitment to a quality program."If merce,was established in the late 1980s as an acknowl- I can't see higher management at the initial meetings asking ques- edgement of the need for improved quality in the face • tions about what this can do,then I'm seeing they're probably being forced into it,and I walk away every single time.A cookie- of international competition.Six Sigma,named for a cutter model is anti-quality." measurement standard in product variation,can be —S.A. traced back to the 19th century,but got its start as a 14 MINNESOTA TECHNOLOGY I WINTER 2004 "Every organization in the world should AQS Management Systems, Inc. operate according to ISO 9000.It contains r/ufaCtur}'n5► Au#aThflfive ®0 i #io the basic requirements about how to get organized and run your business Management Systems Standards in a thoughtful,planned fashion." se'viceYQUality >Environment . quality program in the 1980s at Motorola,the Schaum- burg,I11.-based maker of wireless,automotive,and broad- 4eros, >Health and Safety band communications products.Ames notes that Six Sigma in particular is best geared toward larger organi- zations rganzations with high production runs or volume. 1 Whatever quality initiatives they may be considering, , a/ over, companies should approach the process by determining which program best fits their financial and operational goals.The key to success,say those with experience,is leadershipand dedication. "I could see this flopping if PP g .♦you didn't have commitment from top to bottom,"Carl- son says."If you're really tight and lean with your staffing, this will add additional burdens to several people.The owner and key people have got to be behind it,and you have to have a no-turning-back attitude."■ Elsewhere in this issue,Sara Aase wrote about strategies for Mark Ames,AQS boosting Web site ROI. Management Systems • MinnesotaTechnology Baur a®o waurxe�uais®sumxcsr software LASTING engineering Upgrade your expertise with a degree or IPACT certificate program from the Graduate Programs in Software Engineering at the University of St.Thomas.We offer master's degrees,professional development seminars Reach your prospects and programs in software engineering. with a proven, powerful marketing tool: Minnesota Technology For more information,contact us at 651.962.5500 or reprints. www.GPS.stthomas.edu UNIVERSITY of ST.THOMAS • ", Cant-ad Shannon aloud, 65T-644478T'1 reprints@matech ori , WINTER 2004 I MINNESOTA TECHNOLOGY 15