INTERAGENCY, INTERCONNECTIVE, INNOVATIVE

June 25, 2008, Meeting Summary

THEME: Business and Technical Assistance for U.S. Manufacturers-Part II

Introductions: The National Institute of Standards and Technology (NIST), Manufacturing Extension Partnership (MEP), thanked the participants for attending the meeting, which continues the May 28th meeting's theme on business and technical assistance for U.S. manufacturers.  The meeting participants introduced themselves and briefly described their programs.

 

Presentations:

A representative of NIST, MEP, gave a snapshot of what MEP does and where it is going.  They explained that MEP's delivery system is a collaborative effort by many programs, the majority of which are on INEAP's membership roster.  In highlighting the synergy between INEAP members' programs and MEP, the representative cited that community colleges play a significant role in the delivery of services to manufacturers, and MEP Centers work closely with International Trade Assistance Centers to help clients with export and import.

 

In the last several days, several members of the MEP Center field staff took part in a performance caucus.  These are quarterly meetings held for the purpose of surveying Centers' performance and measuring their impact on clients; a process that is designed to help Centers remain focused on MEP program objectives.  An MEP representative said that most Centers are performing well. With 1,800 field professionals, MEP Centers serve almost half of all U.S. small manufacturers and provide coverage for many of the same clients that other INEAP programs serve.  This scenario was supported by a representative of the International Trade Administration, who mentioned that the Sustainable Manufacturing Initiative is working with the MEP Center in Grand Rapids, Michigan, and that the Institute also has relationships with some of Michigan's economic development centers and environmental groups.

 

When asked if MEP Centers specialize in delivering specific services, such as sustainability or lean, or if they only work with specific types of manufacturers, an MEP representative replied that MEP supports all manufacturers with a North American Industry Classification System (NAICS) code, although health care and services industries are excluded, and that MEP Centers are fully capable of delivering the range of MEP services.  While a laundry facility in a hotel that employs 250 people would not qualify for MEP assistance, it could receive assistance such as staff training from MEP partners to help it become more productive.  When MEP works with partners, the Center takes the lead.  Additionally, when an MEP Center is collocated with a host organization, the host may get involved in areas that do not address manufacturing.

 

The representative then discussed MEP's 20/20+ vision.  The concept behind 20/20+ is that in a 3-year timeframe, MEP will help manufacturers take 20% off bottom-line expenses through lean, quality, and other programs that target plant efficiencies and add 20% to their top-line sales through, for example, export, relationships with universities, and Small Business Innovation Research (SBIR) participation.  MEP's role is to guide the Centers to ensure they have products and services that will help their clients achieve the 20/20+ vision.  As a result of the improved processes from lean and quality programs, MEP clients have excess capacity.  With the shift in focus from reducing costs to filling excess capacity and increasing revenue, MEP is looking at programs that will help manufacturers grow through new sales, new markets, and new products.  Eureka! Winning Ways (E!WW), which was rolled out last year, is a program that will help manufacturers create new value streams, differentiate their products, and enter new markets.  Clients attend intense sessions that use a scientific process to help firms develop growth strategies.

 

MEP Centers charge clients a nominal fee for the services delivered.  Each quarter, an independent firm conducts surveys of client engagements, for a yearly total of 6,000-8,000 surveys. To help Centers determine measurable impacts, many look at return on investment (ROI), some look at the survey data, and others look at Center-based data and analyze the data through a Remi^TM model to get a local ROI as well as compute the value of the service.

 

MEP's move away from conducting single projects and toward a focus on growth requires more contact with executive-level officers, since they are the key decision makers.  As MEP matures in its delivery systems, conducting executive-level engagements is vital in developing an understanding of where the clients want to go in the future.  Although clients can be very productive, if they make the wrong product at the wrong time, they will not be successful.  Consequently, one of MEP's objectives is to ensure that manufacturers make the right product at the right time.

 

When asked if MEP works with tribes as sovereign nations, the representative replied that this was not a specific goal of MEP.  Western States, as well as Arkansas, Alabama, and Oklahoma, with local connections to native manufacturers, however, are exploring export opportunities.  One of Michigan's MEP Centers may know where to find information on resources for tribal manufacturers.  The MEP representative offered to find the right Center and provide the information for those who are interested.

 

Sixty to seventy percent of MEP Centers' work with manufacturers is in plant production and focuses on what to do with additional capacity.  The goal is to shift the percentage of projects so that 40-60 percent of projects are focused on the shop floor and 40-50 percent are focused on the top line.  Although small and medium-sized enterprises (SMEs) do not seem to gravitate to the idea of developing new products, MEP's mission is to paint a positive scenario and help them recognize that developing new products is linked to their future success.  Large companies are now asking small companies to undertake new product designs and research and development (R&D) functions.

 

Financing innovation is a hurdle small manufacturers must overcome.  Ninety percent of MEP's target market has less than 500 employees, and it is these companies that generate the greatest impact.  The sweet spot seems to be with firms that have 20 to 250 employees, depending on the State.  If MEP Centers work with companies that employ more than 500, they must provide justification.  A supply-development program is one area where it makes sense to work with a large company.  There is one case where a large company is funding MEP to work with 50 of their suppliers on the delivery of parts.

 

MEP has a number of tools designed for specific sectors.  Although companies are not assessed to see if they qualify for MEP assistance, often a Center's first engagement with a client is in the form of an assessment.  Some manufacturers have specific issues they want addressed; however, an assessment looks at the business environment and revenue to determine where the manufacturer's pain is.  The Centers may charge a nominal fee, such as $200 for an assessment.  More sophisticated engagements, such as mapping, may cost $1500 because all processes and operations in the company are turned upside down.

 

Program Updates and Comments:

This roundtable presents opportunities for collaboration and provides a forum for leveraging all INEAP member resources.

 

NIST, MEP, commented that MEP and small manufacturers have begun to address the issue of financing.  Historically, MEP has focused on Lean and getting companies to become more efficient.  Now, the manifestation of growth on the sales side has shifted MEP's focus, which is evident in its 20/20+ vision.  It is true that to make money, you have to spend money.  But it is an evolutionary process to get companies to think about sales and revenue and move forward with growth strategies. 

 

The global economy requires growth and innovation; consequently, financing involves more than going to the bank.  Owners must ask themselves if they were on the outside, would they invest their own money in their company.  They must understand the value of innovation and the role it plays in increasing new sales, new markets, and new products.  E!WW helps them develop strategies to achieve these objectives, but the process is continual.  Manufacturers must define how fast and the way they want to grow.

 

The report Forging New Partnerships, published by the National Association of Manufacturers, indicated that less than 50 percent of companies understand or are aware of the Small Business Administration's (SBA's) lending-assistance programs.  MEP prepared a Quick Reference Guide to Growth Financing to help MEP Centers, field staff, and clients understand there are a range of financing options, programs, and techniques available to SMEs pursuing growth strategies.  The guide summarizes government loan and grant programs, tax programs, debt and investment options, and other related financing vehicles that clients can use for working capital or to cover seasonal sales or inventory.

 

The guide is updated on a continual basis.  In the future, the guide will include an appended 4-page table with program descriptions and links to each program's web site.  Information on how to apply for grants and other funds will be available on MEP's web site, and an MEP representative expressed that they hope that this step will lead to MEP conducting webinars on financing options.  The representative voiced that they will need partners who have in-depth experience with the range of available programs.  Because the programs included in the MEP guide have been selected based on anecdotal evidence that these have been the most frequently used, it would be helpful to have feedback regarding programs that may have been missed or misrepresented.

 

Information on all Federal programs for financing is included on http://www.grants.gov/, in addition to each agency publishing its own information.  There also are organizations inside each State that help companies compete for available funds.  These may be Small Business Development Centers (SBDCs) or an MEP Center associated with SBIR programs.  Centers can also talk to the State SBIR personnel to learn about matching funds.

 

During phases 3 and 4 of the SBIR program, where a manufacturer's growth strategy is a vital component in the competition for program funds, MEP's assistance is vital.  Several conferences on how manufacturers can compete for SBIR funds will take place in Michigan.

 

For those who need more guidance on the SBIR program, contact NIST MEP

 

A representative of the Environmental Protection Agency (EPA), National Center for Environmental Innovation, commented that SBIR funding is for a finite period and that there are also episodic grant opportunities.  The representative pointed out a contact that is considered a fountain of knowledge on where there are opportunities for loans and grants.  They also announced that a notification of a workforce solicitation grant was posted on the Department of Labor (DOL) web site (http://www.doleta.gov/SGA/sga.cfm) and this may present a future funding opportunity for some SMEs. 

 

It was also mentioned that EPA's formation of the National Advisory Council for Environmental Policy and Technology brings EPA and the financial and venture-capital community together to find ways to commercialize environmental and sustainable technologies.  EPA is putting together a list of recipients in the document EPA and the Venture Capital Community: Building Bridges to Commercialize Technology, and they will make the list available to anyone who is interested in it.

 

An Export Import (Ex-Im) Bank, City-State Partners, representative stated that as an agency that posts announcements pertaining to funding for small businesses on http://www.grants.gov/, they receive many phone calls from people who want to know how to get a grant.  Because there is a distinction between providing assistance that supports small businesses and issuing grants to fund small businesses, often the agency must decline to provide assistance to some people.  Many funding sources are narrow niches, such as with a Department of Agriculture grant for renewable energy or Department of Transportation funding for highway maintenance. 

 

The Technology Innovation Program (TIP) provides up to $3 million in funding that is mostly for high-risk investments and early-stage technologies.  TIP is different from the Advancement of Technology Program (ATP) in that universities can apply for grants directly and high-risk R&D projects that address critical national and societal needs in NIST's areas of technical competence qualify.  Only SMEs may apply. The Federal Register published the Notice of Final TIP Rule on June 25, 2008.

 

Small businesses also have access to information on Federal loan programs that are designed to assist with international trade.  SBA and the Ex-Im Bank collaborate to offer an Export Working Capital Program (EWCP) to small businesses.  The EWCP provides transaction-specific financing that can support the working-capital needs of a small business by providing a 90-percent repayment guaranty to lenders who make export-working-capital loans to eligible small businesses.  In general, SBA handles small-scale transactions (EWCP loans of up to $1.1 million), while the Ex-Im Bank handles applications of all sizes. Other Ex-Im Bank programs relate to buyer financing and export credit insurance.

 

A representative of Near-Time, Workforce Innovations Community Platform, explained that this organization, in partnership with DOL, is building an online network of regions committed to innovation and economic development.  This partnership is a spinoff of the DOL's Workforce Innovation in Regional Economic Development (WIRED) Initiative.

 

The goal is to push these web-based communities to the local level.  The wealth of information that INEAP can make available would be valuable additions to the site.  Cross-organization collaboration and consolidated information from academic institutions, forums, web logs, and wikis promote knowledge development within an open, public environment.  Issues of the day can be discussed, and a web log can be moderated by people from different member segments.  The outcomes from collaborative initiatives and the accumulated knowledge available through community forums will receive national and global exposure.

 

Innovating Networks (http://www.innovatingnetworks.net/), an open, web-based community for workforce and economic development practitioners, entrepreneurs, State and local government representatives, and all others who play a critical role in building our nation's communities, will be launched at the Workforce Innovations conference in July.  This site will be linked into Near-Time, which is a clustering platform for building communities of communities.  Real activities may be located in specific areas of interest or communities of practice.  During the next 12 months, Near-Time will move forward to expand the web site's features and user participation.  INEAP members can visit http://www.wired-nation.net/ to see how the web 2.0 platform can be leveraged to create this type of web-based community.

 

A representative of SBA, SBDC, recapped that the agency helps small business with procurement support and technical assistance. They support the Federal Emergency Management Agency with disaster-recovery efforts and are ready to support Indiana, Iowa, Missouri, and Wisconsin, States that have received disaster declarations, by pulling together the SBA's district offices, SBDC resources, and the Office of Disaster Assistance.

 

Although SBA does not deal with farming, there is a lot of interest in this area now that it has been determined that many towns are in the wrong location.  Other agencies also need to become involved in disaster-recovery efforts, and it appears that when INEAP members become involved, they can help communicate what and where resources for assisting people and businesses are available.  Many companies are being approached by different Federal agencies, which indicates a lack of coordination.  In addition to being confused about the sources of funding that are available and how to access them, companies must contend with a diminished workforce and road closures that limit their ability to recover. This is a great opportunity to bring the resources of Washington to the local markets.

 

An American Association of Community Colleges (AACC), Economic Development, representative commented that business continuity and emergency management are getting a bad name.  It is not just the response that is important in recovery; companies also must mitigate risk and plan in advance.  There should be some assistance from people who can provide a broad outline of the steps that small manufacturers should take when they are located in a small area.  One idea is to pull together a listserve and provide members with information on the difference between business continuity and disaster response.  This may be a good topic to attract more small manufacturers to assistance programs.

 

A Veterans Affairs (VA), Center for Veterans Enterprise, representative reported that the VA also is looking at the issue of disaster recovery and business continuity and that 89 percent of veteran-owned businesses think this is important but only 49 percent have a plan.  The VA would like to collaborate with SBA, with SBA taking the lead because it already has physical locations in place, and it is already engaged with State and local officials.

 

A representative from DOL, Employment and Training Administration (ETA), extended an invitation to INEAP members to view and test drive the DOL-sponsored web site  www.careeronestop.org/drs.  This site provides quick access to a range of employment and related sources for individuals and businesses impacted by floods and other recent disasters.  It was also requested that anyone who had a product or service to add to the site to them him know.

The representative from AACC, Economic Development, informed meeting attendees that the AACC web site will publish information on AACC's Building Better Communities Through Regional Economic Development Partnerships initiative on June 27.  This initiative is a 2-year, $2.5 million effort sponsored by the Wal-Mart Foundation to develop regional approaches to adult and postsecondary education, workforce, and economic development.

The association needs inside and outside proposal reviewers.  Proposals will be broken down to 10 pages per reader.  Please e-mail the AACC if you are interested.

A representative of the DOC, Office of Intellectual Property Rights, reported that companies that face problems with intellectual property can find assistance on http://www.stopfakes.gov/.  In addition, the Department recently finished an online training course that helps companies develop ideas about the types of intellectual property that need to be protected.

 

NIST, MEP, directed the conversation back to disaster response by mentioning Oak Ridge National Laboratory's participation in the Community and Regional Resilience Initiative (CARRI), which is a major program of The Southeast Region Research Initiative.

 

The representative also announced that the Office of Management and Budget is looking for comments on Award for Excellence in Economic Development, which was published in the June 25th Federal Register.  Economic development organizations and other Federal agencies that have a stake in Federal aid to communities should look at the announcement.

 

Another representative of NIST, MEP, reported that the Lowe Foundation attended a conference on economic gardening in Colorado.  The Lowe Foundation invested in a set of tools that can help local communities with economic development activities.  These tools can be found on http://www.youreconomy.com/.  Additionally, the representative said that a webinar, that articulates which grants are coming out, will be held in the future.

 

A representative of DOL, ETA, reported that ETA and MEP discussed working together to catalyze a partnership between education and employers to develop demonstration-training programs that address the skill needs of employers.  To make the best use of previous investments, the objective is to take what has been developed and disseminate it so people can access the curriculum and best practices without charge. The longer-range goal is to develop a better understanding of where MEP fits in with workforce development and job training.  Finding ways for the public workforce system to partner with the MEP system to get more broad-based change is underway.  When SMEs talk about workforce, it is important to understand what their perspective is.  The web site http://www.workforce3one.org/ is available and has recently added new material about the Workforce Innovation Conference in July.  A preconference session with MEP will take place in New Orleans on July 14.

 

A representative of the Colorado Association for Manufacturing and Technology, mentioned that their organization has regional partnerships around the State and works closely with community colleges on workforce development.  They will send examples of these to INEAP members who request them.

 

Meeting Wrap-Up:

The INEAP September Forum is currently being coordinated. 

 

Some proposals have already been received and the event's cross-cutting themes and panels are close to being finalized.  Any suggestions should be sent as soon as possible because the agenda is close to being finalized.

 

The structure of activities will be around specific topic areas such as collaborative opportunities, green initiatives, and disaster recovery.

 

With a capacity for more than 100 attendees, INEAP also would like to open up the Forum and invite public and private partners.

 

The Public Manager will hold their inaugural conference in Baltimore on July 29.  Details can be found on their web site at http://www.thepublicmanager.org/ along with INEAP meeting notes.  INEAP will be featured at the meeting.

Next Meeting Theme:                     

 DOE Energy Efficiency Programs and Assessment Centers and How People Can Get More Involved