power of small manufacturing

Marlin Steel "Power of Small Manufacturing" ©

Manufacturing in the United States

Economic BackboneManufacturing contributes more than $2.2 trillion to the U.S. economy.

Source: National Association of Manufacturers (www.nam.org)

Did You Know?If U.S. manufacturing were its own country… it would be the 9th largest economy in the world.

Did You Know?• 12.3+ million manufacturing workers in the

U.S.• 9% of the workforce. • Manufacturing supports — approx. 1 in 6

private-sector jobs.

R&D Leaders• Manufacturers in the

U.S. perform more than 75% of all private-sector R&D.

Exports = Jobs• Exports support higher-paying jobs.• Jobs supported by exports pay 18% more.• Over the past 25 years, U.S.-

manufactured goods exports more than quadrupled.

• $1.4+ trillion in 2014.Source: National Association of Manufacturers (www.nam.org)

• Vast majority of U.S. manufacturing firms are quite small. – 256,363 firms in the manufacturing sector – all but 3,626 considered to

be small (< 500 employees). In fact, 75% < 20 employees.

Fewer Than 20 Employees 20 to 99 Employees 100 to 499 Employees 500 or More Employees

193,108

47,44312,186 3,626

Number of Manufacturing Firms by Employment Size, 2012

• Small (< 500 employees):– 5.1 million employees – $231.5 billion total receipts (2012 numbers)

• Large (> 500 employees):– 6.1 million employees– $367.1 billion total receipts

• Small and medium-sized exporters accounted for 98% of exporters and 33% of export value.

(2012 data, latest available)

Best Practices: 11 Easy Strategies to

Motivate, Engage & Empower Your Team

Drew Greenblatt PresidentMarlin Steel Wire Products

People = fixed costs • Team not variable costs• Encourage more training goal = 30 year

relationship• Dedicated• Engaged

17Marlin Steel "Power of Small Manufacturing" ©

• Marlin Steel Wire Products Established in 1968; purchased in 1998

• 18 minimum wage / no benefit employees• 5,000 square-foot facility• Largest bagel-basket maker in America

From bagels to Boeing

In 1993, annual bagel consumption = 14 per American

…Just 3 years later, annual consumption = 26

1993 =

1997 =

Booming bagel business

Source: Bakery Production & Marketing, 2/97

• Technology in 1998 = 1950s equipment and a FAX machine

• Every wire bend and weld by hand• No engineering prints• If we got a reorder, client had to send back one

of his baskets so we could copy it

Antiquated style...passable

• Atkins’ & low-carb diets• Asian importing• Clients going bankrupt• Surviving clients move to Asian

commodity baskets• Hemorrhaging cash

The perfect storm

• Boeing engineer calls• Light bulb went off• Make custom baskets for industrial

customers• 99% of sales were in wrong niche

Epiphany

Transformation• “Quality, Engineered Quick”• 20% of employees degreed

mechanical engineers• Precision & complex YES• Commodity NO

“Quality, Engineered Quick”

Exporting to 39 countries• 15% of business in exports

11 Easy Strategies to

Motivate, Engage & Empower

1) Cash bonuses• Skin in the game• Everyone (except temps, carrot to join full time)• Create mini-entrepreneurs• $ motivates• Pay Fast - Short duration (two weeks)• Big $• Micro cell (not overall company performance)• Concrete black & white targets

2) Invest in employee training• Training costs = 5+% of labor budget. • Your talent will have best skills in industry.• They will sound / be more knowledgeable with

clients and vendors.• More effective with less defects.• They will make your investment in the

machinery work better.

Marlin Steel "Power of Small Manufacturing" © 31

Promote career development • No pottery nor music• Relevant to Marlin’s mission: “Quality,

Engineered Quick”• Invest in education / encourage with $:

– 100% Community College tuition– 100% College tuition– 100% Master tuition

Raises for new skills learned

• $ for more abilities• Increases capacity• Improves adaptability• Improves cross training pace

3) Pay well• Cash bonuses• You get what you pay for• Talent is a fixed cost - not a variable cost• Competitors' best talent will come to you• “Nucor Style”:

Hire 5 Talented People, Pay like 8, Produce like 10

4) Automate • Give your employees the best tools so they

are on "steroids.”• With robots, software and automation, your

supermen/women will more effectively ship faster, better quality, delighting your clients.

• Automation does not get tired or distracted

5) Skills matrix• Post prominently (lunch room) for

all to see all the skills that make the company run.

• Share how many skills each employee knows.

• Grade each skill so clearly showing employees what matters - not golf or after work socializing

6) Listen

• Best ideas come from trenches• On the spot cash bonuses – for great ideas• Set up meetings to pull ideas

Factory floor = more comfortable

7) Hiring• Be very picky / only exceptional people• Key to success / most important thing you do• Use personality test to discern traits that fit

well with your corporate style• Show prospective talent exactly what they will

do before they accept so they are more likely to make a better decision

8) Hire fast, fire fast• When business picks up, hire people quickly

to ensure client needs are met• Remember… we make mistakes. If you

have the wrong person: Move swiftly to minimize negative impact

on team moral / function Part ways quickly

9) Safety

• Safety committee empowered• Monthly meetings• Invite in OSHA• Shoot for SHARP• More automated = easier to be safer

Safety – be relentless

• Focus on near misses – drill down• Job #1 – everyone goes home complete,

like they came in• Employees like working for safe companies• Signals dedication to employee well being

10) Repeatable clear process

• Team enjoys step by step methodology• Easier to innovate with Repeatable

Quality• ISO 9001: 2008

11) Be transparent• Improve culture with candor• No one else does it• No lies of omission• Employees can sniff out a fake• No one likes to be snowed

SO WHERE IS MARLIN NOW?

Employees safer

7x bigger 72% more employees

Paid better 480%

Helpful policies to ↑ MFG Jobs

Protect Intellectual Property

(IP) Rights

More International

Trade Deals

Pro-Growth

Tax Policy

#1 #2 #3

IP theft = unfair competition Website examplesCopied / altered imagesOriginal Marlin images

• Marlin’s competitors are using copyrighted images to market and sell products

Intellectual Property grows jobs

• “Secret sauce”• Innovation• Not selling on lowest price (nor low wages)

Trade deals grow jobs

1. 95% of world clients outside U.S.A.2. $92,000+ average mfg. wage for exporters3. 18,000 less tariffs with TPP4. Manufacturing surplus with deal partners

Pro-growth tax policy grows jobs

1. USA 50+% vs. Canada 15% 2. Less tools for workers3. Less wins, less jobs

Thank You

Drew Greenblatt President

www.MarlinSteel.com

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