Manufacturing evolution

SBN Staff
12:00 am
February 1, 2013

In a swiftly changing world, these three manufacturers have learned the art of adaptation.
Later this month, these three regional executives will participate in a panel discussion at the 2013 Evolution of Manufacturing Conference, presented by Cuyahoga Community College. They will address a topic every manufacturer faces: adapting to the 21st century manufacturing world.
Smart Business asked each panelist to share his or her thoughts in advance on what’s changed and how he or she has addressed it.

Tom Salpietra
president and COO,
EYE Lighting International
Q: What is the most significant challenge EYE Lighting has faced over the past few years?
A: Solid-state lighting, made up of LEDs or light-emitting diodes, was developed more than 50 years ago. However, it has only been within the last year or two that SSL technology has made its way into general illumination in the home and in commercial and industrial applications. The price premium in adopting SSL is still somewhat controversial, but in time, it will become a more affordable option. In the meantime, customers are demanding other energy-saving solutions in the form of traditional types of lighting.
EYE Lighting’s business strategy has been in the roadway, commercial and industrial markets. Over the last two years, we have been shifting our focus away from the older forms of bluish and yellowish lighting to ‘white’ ceramic technology and to solid-state lighting. We continue to make investments in R&D and manufacturing so that we can maintain our lead in providing high-quality, value-added lighting solutions for our customers.
Q: How has this better positioned you for long-term operational sustainability?
A. We manufacture more than 70 percent of our volume in Northeast Ohio with a dedicated and experienced labor force. Over the last couple of years, we have engineered new products and developed more efficient processes, retraining our employees to meet the needs of our changing environment. Our ability to make these changes and still sustain our company culture lies in our passion for continuing to subscribe to lean manufacturing and operate under our various ISO certifications. We are proud of our rigorous approach to ISO 9000-Business, IS0 14000-Environment, and OHSAS 18000-Health and Safety.
Q: With all these changes, how do you continue to adapt?
A. We must continue to expand our offering of various products and services, rethinking our strategy every couple of years: Are we on the right track? How can we enhance our competence? Should it be organically or through an acquisition? What other kind of improved business model can we develop? How will e-commerce and social media affect our go-to-market tactics?
These are the questions we continually challenge ourselves with on a continuing basis. Sometimes just by self-examination, the answers are fairly clear. At other times, we need to venture outside into other industries and businesses to know how they are handling their changing environment. In the end, we allow ourselves to learn and improve upon the experiences of others.
Q: So what big initiatives is EYE Lighting undertaking this year and next?
A. Our strategic initiatives over the next couple years encompass significant investments in ceramic HID and LED technology. We know our customers want energy-savings solutions, yet they want to maintain a high level of quality and performance across all their lighting needs. We will expand our sales personnel and our marketing campaigns, including our activities in e-commerce and social media. We are very excited about the contributions EYE Lighting can make to the marketplace, and we owe much of our success to our employees and our dedicated customer base.

Eric Lofquist
president and CEO,
Magnus International Group
Q: How has Magnus evolved over the past few years to meet growing demands in your industry?
A: Founded in 2007, Magnus initially focused on transforming petroleum-based co-products into liquid fuels and other carbon-rich materials. Eventually, we moved from traditional petroleum-based products to processing vegetable oils and naturally derived emulsions into natural waxes for items such as fire logs and candles.
The company’s most notable innovation came in 2010, when we vertically integrated our operation to convert discarded food industry co-products into unique, natural animal feed ingredients. Since then, Magnus has grown substantially by turning leftover raw materials — like restaurant fats, oils and greases, and sweets from food manufacturers — into healthier, tastier feed for the dairy, cattle, poultry and swine industries.
Q: How has this better positioned you for long-term growth?
A: Today, 90 percent of our product development is now on the animal nutrition side of the business. This sector is more predictable, profitable and stable than other industries in which we’ve worked, and there is less overall market pressure.
Our production facility is as diverse and as flexible as ever. Magnus’ ability to come to market quickly with one-of-a-kind, high-value animal feed ingredients has been critical to our success and the success of our partners.
The opportunities to collaborate with the world’s leading food companies, both as suppliers and customers, have been incredible. Magnus’ complete transparency and unique profit-sharing structure creates a difficult-to-duplicate business model that clients find attractive on several fronts. I think we offer the best product-price balance, boutique processing ability and special production techniques.
Q: So with all these changes, how do you continue to adapt?
A: Moving from petroleum-based inputs to sustainable global products has focused us even more on product quality. We recently became ISO/FSSC 22000-certified, which is the leading worldwide standard for food safety management. Achieving and maintaining that standard means we’re operating at a higher level of detail and quality systemwide. Now, all employees individually commit to a plant quality and safety pledge as a minimum requirement for being part of our work community. The net result has been increased product quality, enhanced customer and end-user satisfaction and measurable, award-winning growth in customer-shared revenue.
Q: As you look to the future, what significant initiatives is Magnus looking at for this year and next?
A: Our goal is to produce one new branded, natural product per quarter from prime and secondary co-products. Many of these will be exclusive animal feed ingredients. At any given time, we could have three to five different products under development. Some won’t make it past the lab stage — we have a strict, rigorous testing process — and some might not survive the market. But one or more will gain traction, and we’ve learned for that to happen, we need to always have a selective stable of products under consideration.
Why? Our future growth depends on constant innovation and remanufacturing. We need to be nimble to respond to unanticipated opportunities and have short uptime on new processes and products … all the while maintaining the superior product quality and service for which we’ve become known. We will stay ‘lean’ and ‘kaizen’ in our production strategies and continue to find groundbreaking ways to rescue landfill-bound feedstocks and convert them into renewable products.

Suzy Remer
owner and CEO,
Midwest Box Co.
Q: What have been some of the most significant challenges you’ve faced recently with Midwest Box Co.?
A: I became sole owner in August, and business has bounced back to almost pre-recession levels. But with our customers skeptical about their future business, ordering has changed. We now see very exacting ‘just-in-time’ ordering.
For our noninventory customers — those who do not use our warehousing program — we now need to be able to manufacture and ship product based on shorter lead times. For our inventory program, we find more customers are choosing this option to take advantage of price breaks and instant availability of their product.
Customer service is another area where change is happening quickly. It is more important than ever to be able to respond to a customer’s needs immediately. Many customers seem to wait until the very last minute to order and require us to fulfill their needs quickly. This has taught us how to be more flexible and responsive to our customers’ needs. We have inventory notifications that help our customers manage their ordering. We have developed delivery ability that allows us customer access in a more timely and efficient way.
We also acquired the Walford Industrial Park. We had been tenants here for more than 30 years. As owners of the park we can now expand to meet any future growth without moving.
Q: How has the economy played a role in changes you’ve made?
A: Pricing had become quite a challenge. In the past, we could develop a relationship with a customer based on our quality, service and competitive pricing. Staying true to our commitment of quality and service has worked well for us. But today, we find customers who leave us due to perceived cost savings and then return after discovering that the quality and service of the company they left us for are not the same.
That’s something we’re addressing this year, so the biggest initiative for us now will be cost reductions. Margins have been squeezed. We are trying to be as aggressive with our vendors as our customers are with us.
Q: Let’s look back in time a bit. Midwest Box Co. has a rich history in this region, correct?
A: Yes. It was founded in 1964 by my father, Marvin Hecht. We started as a short-run supplier and have grown to become Cleveland’s oldest and largest sheet plant. As I mentioned, I became sole owner last year but came on board with my dad and sister in 2002. Before that, I was involved in high-end retail. I didn’t really grow up in the business like many other second-generation owners have.
Around the time I joined my dad and sister, my father decided to purchase the industrial park where we were located, Walford Industrial Park. It has been put up for auction, and he thought it made sense. After my dad purchased it, he turned to me as we were leaving the auction and said, ‘Suzy, do something with this.’ So I ended up spending a lot of my time getting the park filled with tenants who needed industrial space. It wasn’t easy, so I decided to think differently and become a bit more innovative. Today, we have an eclectic mix of tenants, including Ray’s Mountain Bike Club. And these days, I spent all my time managing our real estate and running the company.

Click the links below to read the individual profiles for all of this year’s honorees.