THE WISCONSIN MANUFACTURING EXTENSION PARTNERSHIP

AnnuAl RepoRt

2012

Mary Isbister President, GenMet Corp.

Kevin Kraft CEO, JARP Industries, Inc.

A.J. Gordon President, Gordon Aluminum Industries, Inc.

Kurt R. BauerPresidentWisconsin Manufacturers & Commerce

Troy BergPresidentDane Manufacturing, Inc.

Robert BradfordVice President, Manufacturing & Supply Chain Ariens Company

Steve Brahm, Vice President, OperationsManitowoc Crane Group

Jose BucioStaff RepresentativeWisconsin State AFL-CIO

Daniel ClancyPresidentWisconsin Technical College System

Kelly ColesDirector of OperationsThe C.A. Lawton Company

Steven CoppPresidentTrans-Coil International, LLC

Tom DuffeyPresidentPlastic Components, Inc.

Michael ErwinPresidentTailored Label Products, Inc.

Michael FarrellChairman and CEOSentry Equipment Corporation

Randy HulkeDirector, Stout Technology Transfer InstituteUniversity of Wisconsin – Stout

Mary IsbisterPresidentGenMet Corporation

Tom JacobsonVice President, OperationsBruno Independent Living Aids, Inc.

Board of Directors, WMEP

Mike Erwin has served as WMEP Chairman of the Board for two years and has been an active participant and supporter of the annual Manufacturing Matters! conference, the premier event for Wisconsin’s small and midsize manufacturers.

Mike KlonsinskiChief Financial OfficerWisconsin Economic Development Corporation

Gayle KuglerDirector, Division of Entrepreneurship & Economic Development University of Wisconsin – Extension

Rhonda RushingPresidentBerntsen International

Joseph WeitzerDean – Center for Business Performance SolutionsWaukesha County Technical College

John WestPresidentFox Valley Metal Tech

Ross WinklbauerStaff RepresentativeUnited Steelworkers

Thank you, Mike ErwinFor the past two years, Mike Erwin’s leadership as Chairman of WMEP’s Board of Directors has been instrumental in expanding the organization’s ability to assist manufacturers. Erwin, president of Tailored Label Products in Menomonee Falls, has recently turned over the leadership of the board to Mary Isbister, president of GenMet in Mequon. Erwin has been a key part of the WMEP’s success and the organization has been transformed under his leadership.

Erwin has been a major promoter of WMEP’s Manufacturing Matters! Conference, and this year, Erwin sponsored a first ever pre-conference reception, which drew a large group of manufacturing leaders, conference presenters, sponsors and WMEP board members. Erwin’s support of the highly successful conference has included roles as a presenter, attendee and industry advisor.

Dear Friends of Wisconsin Manufacturing,

It’s an exciting time to be a manufacturer in Wisconsin. We are the #1 manufacturing state in the country, with a long tradition of making great products. The WMEP is proud of the role we play in keeping our manufacturing base competitive and at the forefront of leading business practices.

Wisconsin is the leading manufacturing state because of a long tradition of making great products for the rest of the world. We share a piece of that tradition, having helped small and medium manufacturers for the past 16 years. The WMEP just passed the $2 billion mark in impact for our clients and have saved or helped create more than 14,000 jobs. Our focus on results and ability to leverage public-private partnerships put us in position to bring leading edge thinking and solutions to companies that otherwise would not have access to these approaches.

Our services help build the Next Generation Manufacturing talents necessary to compete in the future. The WMEP is nationally recognized for our programs that address critical issues across operations. These programs have been used in more than 28 states and set the standard for others to follow.

We are extremely proud of the results created for our clients and the State of Wisconsin. Enjoy some of our clients’ stories and please give us a chance to help create a success story for you!

Wisconsin manufacturing has a bright future. We have strong manufacturers competing effectively on the world stage. Dedicated professionals provide the support and innovations necessary to maintain our leadership position. Finally, the WMEP and our expert solutions and advice provide a resource that can keep our manufacturers competitive into the next generation!

Thank you for your support!

Buckley Brinkman Executive Director

Wisconsin Manufacturing Extension Partnership

Mary E. Isbister President, GenMet Corp.

I am truly honored to Chair the WMEP Board of Directors and to support this exceptional organization in its mission to elevate Wisconsin’s manufacturing economy to be the best in the world.

The practical knowledge that the WMEP’s manufacturing specialists bring to each engagement coupled with the passion and dedication that all the WMEP staff possess makes for a powerful and unique formula that spells long lasting, bottom-line business results. GenMet Corp. has experienced this first hand. For close to 10 years, the WMEP has been a strategic partner, instrumental in assisting GenMet in our ongoing pursuit of manufacturing operational excellence. The WMEP facilitated our Lean transformation, ISO certification, and leadership and team training, all of which have been key contributing factors to GenMet’s sustained growth and global competitiveness as a contract custom metal fabricator.

If you are a manufacturer in Wisconsin who wants to reach world class status in advanced manufacturing, the WMEP should be your first call—they are ours.

Mary Isbister, the Chair of the WMEP Board of Directors

The WMEP services sparked a $156 million economic impact that helped create and save 829 manufacturing jobs, according to results documented by clients in the 2012 fiscal year.

The WMEP helps manufacturers gain a competitive advantage and drive growth through Next Generation Manufacturing services – a suite of services developed to promote the world-class performance essential to competing in today’s volatile and challenging economy.

Our exceptional internal expertise helps our clients become more efficient, focused, innovative and nimble. We also engage a range of partners who have the specific expertise to assist clients with unique or specialized needs. These partnerships allow clients to access a range of services to drive positive change and increased competitiveness.

Proven ResultsThe WMEP drives results for its clients and delivers a 11:1 ROI for every dollar of public funds invested in the WMEP. Investment in the WMEP:

` Improves competitiveness of Wisconsin manufacturers

` Fuels economic growth

` Protects and grows high-wage manufacturing jobs

` Creates innovative approaches to improve Wisconsin manufacturing

` Generates additional tax revenues

We take pride in our results and our ability to advance our mission—to make Wisconsin manufacturing the best in the world.

Mil

lion

Dol

lars

FY 08 FY 09 FY 10

$250

200

150

100

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WMEP Economic Impact

$156

FY 12

$131

$226

$164 $164

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/Ret

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FY 08 FY 09 FY 100

WMEP Economic ImpactJobs Created/Retained

829

1235

798

FY 11

973

FY 12

1009

WMEP Economic Impact FY 20121500

1000

500

$30 M

$28 M

Increased/Retained Sales

$114 M

CostSavings

Investment

Mil

lion

Dol

lars

FY 08 FY 09 FY 10

$250

200

150

100

50

0

WMEP Economic Impact

$156

FY 12

$131

$226

$164 $164

FY 11

Num

ber

of J

obs

Cre

ated

/Ret

aine

d

FY 08 FY 09 FY 100

WMEP Economic ImpactJobs Created/Retained

829

1235

798

FY 11

973

FY 12

1009

WMEP Economic Impact FY 20121500

1000

500

$30 M

$28 M

Increased/Retained Sales

$114 M

CostSavings

Investment

Unprecedented returns for the Wisconsin Profitable Sustainability Initiative and WMEPWith a three year ROI of 25:1 on the state and federal investment and project break-even points as short as four months, the PSI program stands alone with respect to return, speed-to-benefit, and environmental impact, according to Wisconsin Economic Development Corporation CEO Paul Jadin. “The WEDC is proud to support such an impressive manufacturing initiative that has produced ground-breaking results and positioned Wisconsin as the most advanced state in America for driving profitable manufacturing sustainability,” Jadin said. Without WEDC’s commitment and investment to this market-leading effort, the extraordinary outcomes created would never have been possible. This represented a keystone investment for WEDC that measurably bolstered competitiveness for small and midsize manufacturers in Wisconsin. We can proudly say that WEDC, in partnership with the Wisconsin Manufacturing Extension Partnership, led the way for Wisconsin and our vitally important manufacturing sector.

James Mathews tests a robotic welder at J & R Machine, Inc., in Schofield, a WMEP client that has seen dramatic growth since 2004.

Brian Krieg assembles a Clean Burn waste oil heater. Rock Energy Systems, LLC, recently moved this company to Janesville.

Mil

lion

Dol

lars

FY 08 FY 09 FY 10

$250

200

150

100

50

0

WMEP Economic Impact

$156

FY 12

$131

$226

$164 $164

FY 11

Num

ber

of J

obs

Cre

ated

/Ret

aine

d

FY 08 FY 09 FY 100

WMEP Economic ImpactJobs Created/Retained

829

1235

798

FY 11

973

FY 12

1009

WMEP Economic Impact FY 20121500

1000

500

$30 M

$28 M

Increased/Retained Sales

$114 M

CostSavings

Investment

Wisconsin LeadershipWisconsin is the number one manufacturing state in the nation with more than 19% of the workforce directly involved in manufacturing. Manufacturing is essential to a healthy economy —a typical manufacturing facility that employs 100 people actually supports 158 jobs, 100 directly and 58 through employment at suppliers. As factories get “smarter” and more advanced, the multiplier increases significantly. Since 1996, the WMEP has been helping Wisconsin manufacturing grow and thrive, providing new services to give manufacturers the guidance and assistance they need to drive a healthy economy.

Next Generation Manufacturing The WMEP specifically designed Next Generation Manufacturing services to help manufacturers become more efficient, more sustainable, innovative and globally competitive. Over the past four years, a shift in how manufacturers view sustainability, exporting, and workforce development has been documented in the Next Generation Manufacturing Study (NGM) first published in 2008. Results of the 2011 NGM Study found that sustainability awareness has increased dramatically, focus on innovation is strengthening and awareness of the need for global engagement has increased as more and more manufacturers tap into growing overseas markets.

For example, in 2008, 33% of companies surveyed said that sustainability was important or highly important. By late 2011, that number had risen to 67%. Wisconsin manufacturers realize how important sustainable and green practices are to their bottom line and are making progress in implementing sustainable practices – in many cases, assisted by the WMEP.

In the past year, the WMEP has introduced and enhanced services based on the needs of Wisconsin manufacturers revealed by the Next Generation Manufacturing Study, including the Profitable Sustainability Initiative, ExporTech™, Accelerate and MPX software, and more services are under development.

To help manufacturers compete in the global market, the WMEP’s suite of services focus on the six attributes of Next Generation Manufacturing:

` Systemic Continuous Improvement

` Customer-Focused Innovation

` Sustainable Products & Process Development

` Global Engagement

` Extended Enterprise Management

` Advanced Talent Management

Markesha Parker, general fabricator, processes parts from the laser at GenMet Corp. in Mequon, a long-time WMEP client company.

Ken Tibbits processes multiple parts with the automated rolling machine at GenMet Corp.

Engage employees at every level to reduce lead times, eliminate waste, and improve quality.

Create an ongoing process for innovation by building a creative mindset and culture.

Take a 360° view to find savings through reduced energy use, process & logistics improvements.

Develop a results-based export strategy that grows business and drops dollars to the bottom line.

Optimize supply-chain performance with metric-driven process improvements.

Develop a long-term strategy to attract, develop, engage and retain the employees needed for growth.

The six attributes of Next Generation Manufacturing:Systemic Continuous Improvement

Customer-Focused Innovation

Sustainable Products & Process Development

Global Engagement

Extended Enterprise Management

Advanced Talent Management

The Profitable Sustainability InitiativeRemarkable impact In response to the needs of Wisconsin’s small and mid-size manufacturers, the Profitable Sustainability Initiative (PSI) provides a comprehensive review of the entire product life cycle. It is designed to quickly identify, assess, and implement innovative improvements in material use, production processes, product design and quality that result in improved financial and environmental performance. Following the successful participation of 45 pilot companies, the program now includes more than 100 Wisconsin manufacturers and has been able to:

` Demonstrate a clear link between sustainable practices and improved profitability

` Document superior return on investment—both public and private

According to the PSI First Report published in July 2012, a $2.1 million dollar public investment in the first 67 firms leveraged $5.9 million of investment in plant and equipment upgrades, generated an increase of $9 million in annual sales, created 43 jobs, and delivered $6.4 million in annual savings, representing a three year return of 25:1 on public funds. (see wmep.org for the full report)

Nationally recognized, innovative services

National RecognitionRandy Bertram, program manager for the Profitable Sustainability Initiative, was named a MEP Practitioner of the Year for his work developing the program. “Randy developed the WMEP Profitable Sustainability Initiative as a way to enable manufacturers to reduce their environmental impact while improving economic performance at the same time,” said Roger Kilmer, MEP Director. The program enabled the WMEP to secure state and federal funding which is projected to return more than $70 million over five years to Wisconsin’s economy.

Randy was recognized from among more than 1,700 manufacturing specialists nationwide for his specialized capabilities that enabled him to make a significant innovative and sustainable impact in client companies and across the MEP system. Congratulations to Randy on his outstanding work!

ExporTech™ Techniques that result in successful exporting ExporTech™ helps Wisconsin manufacturers fast-track international sales and has received rave reviews from participants since its introduction in 2010. Each ExporTech brings together eight non-competing manufacturers and a range of experts that help each manufacturer develop a custom, action-ready export plan at the end of three months. The unique three-session format allows manufacturers to share ideas with each other, talk one-on-one with experts in a range of fields, and have their export plans thoroughly reviewed and vetted by a panel of experts and their peers.

ExporTech’s impact:Thirty-two Wisconsin companies have graduated from the ExporTech program since its inception. Ten companies have now been independently surveyed for results and are reporting an overall total impact of almost $10 million. In addition, these companies created 15 jobs and saved 53—all as a result of an effective export expansion strategy.

Prolitec, one of the first companies to complete the program in 2010, has expanded their international business by more than quadrupling sales in two years and now have distributors in over 60 countries.

Randy Bertram, program manager for PSI, accepts MEP Practitioner of the Year award from Roger Kilmer, MEP Director

An image of ExporTech success: Distributors from all over the world tour Prolitec’s manufacturing facility in Milwaukee.

Bryan Schueller watches the progress of a hydraulic cylinder component at Jarp Industries in Schofield.

Jeremy Kuck, a graduate of Northcentral Technical College, enjoys his career as a machinist and designer at Jarp.

JARP uses Accelerate to set the path to growthJARP Industries is a Wausau area manufacturer of hydraulic cylinders with about 200 employees. Founded in 1959, the company was introduced to the WMEP through the Accelerate program in 2006. The start in the supplier development program led to projects ranging from strategic planning to value stream mapping to efforts boosting marketing effectiveness.

“WMEP has been a very valuable resource in helping us evolve.” JARP CEO Kevin Kraft said.

JARP lacked a defined marketing strategy and the WMEP’s involvement helped JARP clarify its direction and beef up marketing efforts. As a result of these initiatives, the sales and customer base jumped 15 percent.

The company also served as a pilot for the new MPX Capacity Maximizer tool. The tool validated the bottlenecks JARP had already identified and modeled how changing the sequence of workflow in the assembly and test lines could eliminate bottlenecks and improve throughput. After implementing the changes modeled by the MPX software, capacity in the two lines increased by 12 percent, enabling JARP to meet market demand.

Accelerate– tightening the supply chainThe WMEP’s Accelerate program helps OEMs across the country make the most of their supply chain and extend the reach of their internal support staff. Accelerate aligns the delivery capabilities of suppliers in a consistent approach that enables every link in the supply chain to perform up to expectations.

The results have been stunning. The program has assisted 443 suppliers, producing an average 43% reduction in total lead time, 62% reduction in delivered defects, improved on-time delivery, and reduced costs. These results have occurred across projects in 28 states, making Accelerate the leading program of its kind.

That success and the collaboration of our program advisory board led us to develop two new services. First, the WMEP’s new Quality Advantage program provides a way to ensure consistent quality from suppliers. Our approach standardizes language and processes to enable each supplier to produce a high quality product delivered on time. The second offering is the MPX Capacity Maximizer tool. This tool enables OEMs to understand the capacity of their suppliers and suppliers to make the right moves to maximize capacity and respond agilely to changing OEM demands.

The Accelerate suite is a great choice for OEMs looking to maximize the effectiveness of their suppliers and their supply chain staff.

Helping OEMs Make the Most of Their Supply ChainsManufacturers face a variety of challenges in getting the most from their supply chains. Limited resources, tightening requirements, and diverse supplier bases make it more and more difficult to align external resources to provide timely and effective support.

The Accelerate suite of services provides the answer for OEMs in 28 states across the country. These OEMs discovered what it means to have the expertise of the entire MEP network at their disposal to help their suppliers meet ever more demanding requirements. The WMEP extends the reach and capabilities of stretched staffs to deliver world class results!

Gordon Aluminum Industries, Inc. When Bill McIntyre, Gordon’s process engineering manager, discovered that grant money was available to offset the cost of energy efficiency improvements and for the procurement of new equipment, he approached the WMEP for more information.

Gordon Aluminum is a leading employer in Marathon County. The full service aluminum extruder offers anodizing, powder coating and fabrication services and has about 140 employees.

The WMEP has been working with Gordon Aluminum since 2006 on a range of projects related to continuous improvement. The WMEP used the PSI model to assist Gordon. The model features three phases: diagnostic, assessment and implementation. The diagnostic process uses a qualitative tool to determine the area of greatest potential impact with respect to energy, environmental, logistics and process improvements. This unique approach provides a 360-degree view of the entire operation.

At Gordon, the diagnostic tool identified energy utilization and scrap reduction as the areas with the greatest potential ROI. The assessment then drilled down into these two aspects and provided a detailed analysis as well as an estimate of the up-front costs and paybacks associated with several possible projects.

ResultsThe PSI assessment uncovered a significant opportunity for savings in scrap reduction. Gaurav Gandhi, WMEP manufacturing specialist, leveraged his extensive background with Six Sigma and continuous improvement to identify ways to reduce the scrap generated during the aluminum extrusion process.

Initially, the project set a goal of reducing scrap cost by $300,000 annually. After further analysis and implementation of the changes recommended by Gandhi, scrap reductions will generate at least $600,000 in savings per year. That means that over 5 years, Gordon Aluminum will save $3 million on scrap reductions alone.

“One of the intangible benefits Gordon Aluminum got from the project is learning some of the problem-solving techniques that other industries have used in the past for similar continuous improvement projects,” Gandhi said.

“Gordon Aluminum, like most businesses, is debt-financed. You need someone there that’s going to back your play, especially when you’re going to make a major investment,” Gordon Aluminum president A.J. Gordon said. “It certainly helps to have that independent view in your back pocket. We’re not alone in this fight. WMEP is well-known, the bankers know who it is, and frankly, our customers know who it is.”

Success Story

The press lead completes first piece inspection at Gordon Aluminum Industries, Inc. in Schofield.

Aluminum as it is forced out of the extruder. The PSI program saved more than $600,000 per year for Gordon in scrap reduction alone.

Wisconsin Manufacturing Extension Partnership Milwaukee • Madison • Green Bay

877.856.8588 www.wmep.org