Precision Magazine, May / June 2010

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‘RE-SHORING’GAINSMOMENTUMWHY COMPANIES ARE TURNING BACK TO U.S.MANUFACTURERS

MARKETING OVERSEASAZ Manufacturers Take Advantage of Purchasing Fairs

THE MTCONNECT REVOLUTIONHave We Found the Holy Grail of Manufacturing?

arizonatooling.org THE RIGHT TOOLS. THE RIGHT TEAM. THE RIGHT TIME.

P R E C I S I O N

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The Premier Publication of the Arizona Tooling & Machining AssociationMAY/JUNE 2010 Issue

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CONTENTS

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CONTENTS in this issue

06 President’s Letter

08 NTMA News

09 Board of Directors

PLUSEducation Update • Office LeanLatest Local and National News

The Theory of Constraints

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oard of Directors

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‘RE-SHORING’GAINSMOMENTUMWHY COMPANIES ARE TURNING BACK TO U.S.MANUFACTURERS

MARKETING OVERSEASAZ Manufacturers Take Advantage of Purchasing Fairs

THE MTCONNECT REVOLUTIONHave We Found the Holy Grail of Manufacturing?

arizonatooling.org THE RIGHT TOOLS. THE RIGHT TEAM. THE RIGHT TIME.

P R E C I S I O N

TM

The Premier Publication of the Arizona Tooling & Machining AssociationMAY/JUNE 2010 Issue

2 / arizonatooling.org

FEATURES

20 Marketing Your CompanyThrough Purchasing FairsThe Resources Are Available to Make It Happen

24 Feel Free to Borrow My Tools

26 Fast and Dependable as anUnfair Competitive Advantage!

28 The Economic Argument for“Re-shoring” ManufacturingJobs Back to the U.S.

DEPARTMENTS

09 From the Washington Wire

11 Upcoming NTMA Events

13 Websites You Should Know

14 Legislative Update

16 Education Update

18 Tech Know

30 Member Listings

32 Upcoming ATMA Events

32 Index of Advertisers

M A G A Z I N E

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Precision Magazine is a subsidiary of:

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PUBLISHER Michael A. Kupanoff

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EDITOR Tammy LeRoy

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CONTRIBUTING WRITERS Mike Cline,Dave Edstrom, Dean Franck, Jeremy Lutringer, Harry Moser, Slip Reedy,

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4 www.arizonatooling.org

VOLUME 1, ISSUE 3 MAY/JUNE 2010

Precision Magazine is published six times per year by LPI Multimedia Inc. Opinionsexpressed are those of the authors or persons quoted and not necessarily those ofLPI Multimedia Inc. While efforts to ensure accuracy are exercised, the publisher assumesno liability for the information contained in either editorial or advertising content.Publisher assumes no responsibility or liability for unsolicited manuscripts or artwork.Reproduction in whole or part without the expressed written consent from the publisheris prohibited. Precision Magazine is the registered trade name of this publication.

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TAKING THE INITIATIVEMay, 2010

I would like to address several topics in this months President’s Letter to keep everyone abreast of the many things happening at the ATMA.

NTMA ConferenceFirst, I would like to hit a few highlights of the recent NTMA Fall Conference. A more in depth summary can be found on our website in the President’s Message area. e conference was full of learning opportunities as always. I came away much more impressed with ournational organization than I have been in the past. e NTMA membership has only declined 11 percent in the last year, much less thanmost organizations.

e benefits of our lobbyists’ efforts were clear as they reported on the NTMA’s impact on several key issues, including the so-called Employee Free Choice Act. Combined with Chairman Ron Overton’s testimony on the impact of the automotive industry crisis on smallbusiness, it seems we had a major impact on Washington. We have decided to send Dante Fierros to the April legislative conference, andwill have John Guzik of Franklin Partners speaking to us in June. One clear message from the presentations: Beware of increased activityby OSHA and EPA ... and I do not mean the friendly kind.

Led by Harry Moser, formerly of Agie-Charmilles, re-shoring was also a big theme. e Purchasing Fair in Irvine, Calif. on May 12 will befocused on re-shoring. Please join John Lewis, Dante Fierros and me as we carpool to the event. ese events were recommended at theroundtable discussions. Be sure to see Bruce Triechler’s article on trades shows in this issue; now is the time to sell!

Lastly, I was extremely proud of the ATMA and Chris Mignella at the NTMA conference. We are by far the most active and accomplishedchapter in the country.

Report on ATMA InitiativesBringing the focus back to Arizona, we have six initiatives for this year and I would like to report on several. Initiative #6 is to grow the influence and reputation of the ATMA both inside the state and on the national scene. We have begun to forge alliances with several keyorganizations including Greater Phoenix Economic Council (GPEC), Arizona Department of Commerce (AZDOC), Arizona TechnologyCouncil and the Society of Manufacturing Engineers (SME).

Along with the GPEC, we are seeking to raise these organizations’ awareness of the strong manufacturing base in Arizona and the importance of retention. By helping GPEC both court and transition new companies, we can get the first crack at supporting their businesses. A great example is Tower Automotive, which is coming to the Valley to manufacture for Stirling Energy. I have contactedTower Automotive about joining ATMA, using our supply base, and coordinating on workforce development so that they do not depleteour technical workforce.

GPEC will be touring some of our shops with local legislators later this year. AZDOC has long been a supporter of ATMA, but we are taking it to a new level with their support and distribution of our Precision News special Farnborough issue at the annual international air show this summer. Reserve your ad space now; it will be sold out.

Steve Zylstra of the Arizona Technology Council presented to our board and the team will be deciding how best to partner with them. e SME has also been a partner, but we are expanding this partnership with member pricing for each other’s events, recruiting them asbattlebot team mentors, and giving them access to our magazine for articles and ads.

Another key initiative is #2: Workforce Development. It will not be long before we are back where we started with insufficient talent tosupport our businesses. e bots program, under Jeremy Lutringer’s energetic leadership, is going strong with the National RoboticsLeague (NRL) state championship event reporting record registrants for the April 13 Showdown. Team leader David Lair is working withGateWay Community College to expand and publicize the 2+2+2 education track, and David, Ray Rubin and I are working with the city,

PRESIDENT’S letter


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county and Maricopa Community Colleges to get a three-year,multi-million-dollar federal grant to support the Precision Jobsfor American Manufacturing (PJAM) effort and beef up thelocal training programs.

My vision is to resurrect the true apprentice program withshort, defined, focused training in hard skills followed by internships and continued education as the students progresstoward Journeymen and Master machinist. I got to see the LA-NTMA training center in action last month and I was amazedby the 650 entry level students, seven-month curriculum and75 percent placement rate. Just like the Suns will beat the Lakers, we will eventually surpass LA.

Last but not least, I want to report on our political effortsheaded by Dante Fierros as initiative #1. We should all be proud that we helped the Arizona Manufacturers Council(AMC) achieve Super-PAC status. I was ecstatic when Dr. MarcOsborn, our AMC lobbyist, reported at our March dinner meeting that Sen. Andy Tobin stepped up to support our position on the CTE funding cuts, resulting in the tabling ofthis crippling budget move.

We plan to have several key legislators and GPEC officials toursome of our facilities to see just what great things we havegoing on. We have candidate J.D. Hayworth scheduled to speakat the end of April and are working to get John McCain toround out the discussion. As they say in Washington, if youdon’t have a seat at the table, then you are on the menu. Notonly are we at the table, we just might get a chance to carve the turkey!

I will report on our other initiatives—member participation,programs and revenue generation—in the next issue.

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‘60s; my brother took it to Colorado in the ‘70s. Dad said, “You weren't a realtoolmaker if you didn't have a Gerstner.” Gerstner is a tradition. It's part ofour heritage. I'm still in the trade but I've been in the corner office for the last30 years. I have a new Gerstner on my workbench at home. Gerstner isspecial. It's a reminder of American skill, pride and honor.”

“My Grandfather gave me his Gerstner when he retired in ‘85. I have had itever since. It brings a lot of nostalgia and class to my shop. I hope theycontinue making these boxes. It would be nice to have a leather covered toplike the old version.”

As has been the case for over 100 years and as expressed in the abovecomments, individuals who use Gerstner Chests on the job exhibit astrong sense of professionalism and pride in their jobs. Whenprospective customers visit, this professionalism also reflects on thequality level and work ethic of the entire company.

Jack Campbell, president of H. Gerstner & Sons, is equally enthusiasticabout the new partnership. “We at Gerstner have always known thatthe companies who are members of the NTMA represent this industry’sfinest. This new partnership will offer NTMA members and theiremployees the opportunity to own Gerstner Tool Chests at specialprices that are not available elsewhere. It is our hope that NTMAmembers will see this as an additional benefit to their membershipsand, in turn, which their own employees will realize this action as amatter of extra appreciation in the company for which they work.”

The complete line of Gerstner Chests and other fine wood products canbe viewed at the company’s Web site, www.GerstnerUSA.com. Forfurther information on the NTMA-Gerstner discount program or thenew NTMA Exclusive Gerstner Tool Chest design, contact NTMACustomer Service at 800.248.6862 or at [email protected], or visit H.Gerstner & Sons at [email protected].


EXCLUSIVE PARTNERSHIP WITH H. GERSTNER & SONS ANNOUNCED

The National Tooling & Machininig Association (NTMA) recentlyentered into an exciting new partnership with H. Gerstner & Sons, a104-year-old, family owned business recognized for building the “finesttool chests made in the world.” This partnership will bring forth a 30percent discount buying program for NTMA members, as well as a new“NTMA Exclusive” Gerstner Tool Chest design.

When announcing the partnership, NTMA Chief Operating Officer RobAkers said, “H. Gerstner & Sons is an organization that is synonymouswith the quality and precision standards that are representedthroughout our industry and by our membership. Over the years wehave enjoyed working with Gerstner, who has sponsored and supportedour National Apprentice Contest since 1985. We look forward tooffering a program that delivers additional value to the membership.”

NTMA and Gerstner recently surveyed the NTMA membership askingtheir opinions on several aspects of the tool chest and what they wouldlike to see in a new design for the perfect tool chest. Gerstner ToolChests are well-crafted, hardwood chests made of the highest quality,and the new design will not falter from that tradition.

NTMA received excellent feedback from our members on the surveythat confirms the benefit we believe this partnership will bring.

Following are some of the comments from members:

“Gerstner Tool Chests are very high quality. We have purchased five of themover the past 30 years. This year, we will be purchasing two additional onesas service awards.”

“It is those of us that take extreme pride in our skills and workmanship totruly appreciate and enjoy a Gerstner chest. Please keep the beauty and thequality of what you build.”

“I fell in love with the boxes when I was an apprentice 32 years ago. I havefour in the shop that I have passed on to my son, and my wife has one for a jewelry box at home. Please keep up the good work. I think they are a fine product.”

“My Dad bought his first box during WWII. He gave it to me in the early

NEWS roundup

OUR MISSION: “HELP MEMBERS OF THE U.S. PRECISION CUSTOM MANUFACTURING INDUSTRYACHIEVE BUSINESS SUCCESS IN A GLOBAL ECONOMY THROUGH ADVOCACY, ADVICE, NETWORKING,INFORMATION, PROGRAMS, AND SERVICES. ”

Gerstner Factory - Dayton, OHBuilt in 1913 to house thegrowing H. Gerstner & Sons company.

NTMANEWS



ATMAP R E C I S I O N

2010 ATMA Board of Directors

PresidentMark Weathers

Excaliber Precision Machining

Vice PresidentJoe SirochmanJPS Manufacturing

Executive DirectorChris Mignella

TreasurerMaxine Jones

PPG-Aimco Division

SecretaryDavid Lair

Dynamic Machine & Fabricating

TrusteeJohn LewisLewis Aerospace

Board MembersDante FierrosNichols Precision

Bob MarusiakMicro-Tronics, Inc.

John RaycraftArizona Precision Industrial

Greg ChambersPPG-Jet Division

Jeremy LutringerUnique Machine & Tool

Gary WatkinsMarZee

Associate Member LiaisonMickey Gartman

Gartman Technical Services

Arizona Tooling & Machining AssociationA Chapter of the National Tooling

& Machining Association

P.O. Box 3518 Scottsdale, AZ 85271 Office: 602.242.8826 Fax: 480.970.8501

arizonatooling.org [email protected]

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M A G A Z I N E

“The Right Tools. The Right Team. The Right Time.”

OUR VISION: BECOME THE PREMIER CENTER OF KNOWLEDGETO LEAD THE U.S. PRECISION CUSTOM MANUFACTURING INDUSTRY IN CONTINUING WORLD LEADERSHIP.

FROM THE WASHINGTON WIRE

Delivered biweekly, the Washington Wire e-newsletter provides information on the latest happenings in Washingtonthat are important to the metalworking industry.

One Voice Urges Congress to RenewBonus Depreciation Law

PMA and NTMA have joined with dozens of other national associations to send a letter to Speaker Pelosi, Majority LeaderReid, and Republican Leaders McConnell and Boehner, urgingthem to work in a bipartisan manner to renew the recentlyexpired bonus depreciation law through at least 2010.

While the HIRE Act signed by President Obama on March 18 renewed increased Sec. 179 expensing levels for this year, the temporary 50 percent bonus depreciation lapsed at the end of2009 and has not been restored.

Enhanced Sec. 179 will have a positive economic impact.However, because the law limits expensing to $250,000, thedirect beneficiaries are primarily smaller businesses. Bringingback bonus depreciation will encourage companies of all sizes to invest in newer, safer, more efficient and environmentallyfriendly equipment, which will undoubtedly help large and smallbusinesses alike.

The letter notes that, in the manufacturing sector, many smallercompanies produce custom-made equipment often sold to largercompanies ineligible for Sec. 179, but which could claim bonus depreciation. The two capital investment incentives work well inconcert. Both are needed now to help spur sales and create jobs.

Reinstating bonus depreciation will help inoculate the economyagainst a backward slide in business capital investment, enhancethe impact and benefits of other job-creation legislation (e.g., infrastructure investment), encourage recovery in fragile, capital-intensive sectors of the economy (e.g., construction andmanufacturing ), and, most significantly, put Americans back to work.



NEWS roundup

NTMANEWSFROM THE WASHINGTON WIRE cont.

Administration Postpones Currency Manipulation Report

Treasury Secretary Timothy Geithner announced that he will delaypublication of the Department of Treasury’s Semiannual Report onInternational Economic and Exchange Rate Policies due on April 15.Citing China as an illegal currency manipulator in the report wouldtrigger WTO negotiations and action. Amid the intense pressurefrom Capitol Hill and industry and in response to diplomaticgestures from U.S. officials, China appears on the verge of revising itscurrency policy. Economists believe the Chinese may immediatelyallow a small increase in the value of their currency followed by stepsto allow it to fluctuate in value along with the market. The Secretarytraveled to China on April 9 on a last-minute trip to discuss withChinese officials steps they are taking to address their illegalcurrency manipulation.

From Secretary Geithner’s statement:

“There are a series of very important high-level meetings over thenext three months that will be critical to bringing about policies thatwill help create a stronger, more sustainable, and more balancedglobal economy. Those meetings include a G-20 Finance Ministersand Central Bank Governors meeting in Washington later thismonth, the Strategic and Economic Dialogue (S&ED) with China inMay, and the G-20 Finance Ministers and Leaders meetings in June.I believe these meetings are the best avenue for advancing U.S.interests at this time.

“As part of the overall effort to rebalance global demand and sustaingrowth at a high level, policy adjustments are needed thatmeasurably strengthen domestic demand in some countries andboost saving in others. These are also important to ensure robust jobgrowth. In the United States, private savings has increased, thecurrent account deficit has fallen, and the President has outlined aseries of measures to reduce our fiscal deficit.

“Countries with large external surpluses and floating exchange rates,such as Germany and Japan, face the challenge of encouraging morerobust growth of domestic demand. Surplus economies withinflexible exchange rates should contribute to high and sustainedglobal growth and rebalancing by combining policy efforts tostrengthen domestic demand with greater exchange rate flexibility.

“This is especially true in China. China’s strong fiscal and monetaryresponse to the crisis enabled it to achieve economic growth ofnearly 9 percent in 2009, contributing to global recovery. Now,however, China’s continued maintenance of a currency peg

has required increasingly large volumes of currency intervention.Additionally, China’s inflexible exchange rate has made it difficult forother emerging market economies to let their currencies appreciate.A move by China to a more market-oriented exchange rate will makean essential contribution to global rebalancing.

“Our objective is to use the opportunity presented by the G-20 and S&EDmeetings with China to make material progress in the coming months.”

Last month, NTMA and PMA, along with other industry tradeassociations, sent a letter to Secretary Geithner urging theAdministration to cite China as an illegal currency manipulator inthe report.

House Subcommittee Holds Hearing on OSHA Expansion Bill

On March 16, the House of Representatives Education and LaborSubcommittee on Workforce Protections held a hearing on a billtitled Protecting America’s Workers Act (PAWA). Rep. Lynn Woolsey(D-CA) introduced the legislation in April 2009, which seeks tostrengthen OSHA by expanding coverage to millions of workers whothe Congresswoman believes are currently unprotected orinadequately protected, increases civil and criminal penalties forthose who violate the law, and provides additional whistleblowerprotections. It is similar in language to bills with the same nameintroduced in both the House and the Senate in previous Congresses.Opponents of the bill believe it will increase litigation and creativedisincentive for cooperation between employers, associations andOSHA, while failing to improve workplace safety and health.

While Assistant Secretary of Labor for OSHA Dr. David Michaelstestified that “… OSHA’s current penalties are often not large enoughto provide adequate incentives,” Jonathan Snare, a labor attorneytestifying on behalf of the U.S. Chamber of Commerce, believes thatemployers are better served with more outreach and compliance-assistance materials than increased penalties. Testimony submittedinto the record on behalf of the Associated Builder and Contractorsand the Coalition for Workplace Safety stated that PAWA’s focus onincreasing penalties and enforcement will do nothing to helpemployers ensure that injuries and fatalities in the workplace neveroccur, but instead will only serve to increase litigation, drain OSHAand DOL resources and create a more combative relationshipbetween OSHA and employers. The bill (H.R. 2067) has 63cosponsors and awaits further action in the House Education andLabor Committee.

Washington Wire is brought to you by “One Voice,” the advocacy group created by the Precision Metalforming Association (PMA) and the National Tooling andMachining Association (NTMA). For comments and questions regardingWashington Wire, contact Christie Carmigiano at [email protected]. ©2010 Precision Metalforming Association

Please send your news item ofinterest or press release to: [email protected]



Richter Machine & Design Has Joined

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MARK YOUR CALENDAR WITH THESE

UPCOMING NTMA EVENTS!BRINGING WORK BACK TO THEU.S.A.Hyatt RegencyIrvine, Calif.May 12

38TH ANNUAL NTMA/NIMSNATIONAL APPRENTICECOMPETITION Indianapolis, Ind.Hosted by Indiana Chapter, NTMAJune 9-12

13TH ISTMA WORLD CONFERENCE Caesar’s WindsorWindsor, Ontario, CanadaJune 20-24

JOINT NTMA FALL CONFERENCE &PMA ANNUAL MEETINGAmelia Island PlantationAmelia Island, Fla.Oct. 6-10

NTMA/PMA CONTRACT MANUFAC-TURING PURCHASING FAIRMGM Grand at FoxwoodsMashantucket, Conn.Oct. 29

CUT THROUGH THE CLUTTER.

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M A G A Z I N E

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NEWS roundup

NTMANEWS Please send your news item ofinterest or press release to: [email protected]

When OSHA Shows Up At Your Door...KNOW YOUR RIGHTS!

Every company owner wants to keep the workplace safe for allemployees. NTMA members are reporting drop-in visits from OSHAofficials. This article is intended to inform and educate members onsome of your rights if OSHA shows up at your door.

The first thing to know is that just because an employee of agovernment agency comes to your place of work, it doesn’t mean theyhave the right to walk in and take over unless they have a warrant. It is your property and they have to abide by the law, just as we do.

The first thing any company owner should do is to appoint a safety and health manager in advance to serve as the one and only contactperson for any attempted OSHA inspection. All personnel, especially in the front office, should be trained to notify this contact personimmediately if an OSHA officer comes in the door. This person should be the only company staff person who can give permission for the OSHA official to enter the building. The company official should first ask to see proper identification and ask for an openingconference.

There are three main reasons a company will get an OSHA visit: a drop-by or unsolicited visit, an accident has occurred or a complaint has been filed. The second two cases will usually involve warrants orother paperwork and the visit cannot be stopped. A drop-by visit can be refused, although it’s not highly recommended. A decision to denyentry should not be made lightly. Experience has shown that if theOSHA official is forced to leave and get a warrant, the subsequentinspection could be greater and more intense than it might have beenotherwise. While a warrant can only be issued based on probable cause, it should not be assumed that OSHA can’t get a warrant. If it is a general scheduled inspection, the official has a right to perform a“wall to wall” inspection, looking over the entire operation.

During the opening conference, the company official can ask the reasonfor the visit. If there was a complaint, the company has a right to see a written copy of the complaint, although it won’t contain the name of the complainant. Once the reason for the visit is determined, thecompany official should determine the most direct route to the area tobe inspected and the OSHA official should be escorted on that route to

and from the area to be inspected. Any area the inspector can see or anyviolations viewed can be inspected and fines assessed. The companyofficial should carry a camera and take pictures of any violations thatare cited. If any violation is noted during the inspection process andimmediate corrections or repairs can be made to eliminate theviolation, they should be made.

If the visit will interfere with necessary production operations or isexpected to take more than a day, a request to come back at a moreconvenient time can be made, but this may be seen as a denial of entry.OSHA officials are not allowed to interfere with regular production, but they are allowed to speak with employees. If that interferes withproduction, it can be requested that the questions be made at the endof the shift or phone numbers can be provided so they may call theemployee later. An official will not continue an inspection once theyhave been specifically advised that the employer has withdrawn consentto visit. The company can request to talk to the inspector’s supervisorto explain a legitimate reason for stopping or refusing a visit, but thereare no guarantees that the inspector will not come back and conduct amuch broader inspection.

Finally, a closing conference should be conducted to go over thefindings. The company staff person should be the only one to discussthe findings. They should avoid making any admissions of violationsbut should be prepared to furnish or obtain information to answerquestions, clear up misunderstandings and demonstrate compliance.

One way to help avoid issues is to call your state safety office and seekadvice before a visit from a federal official ever takes place. Most stateshave a state official who will come in and point out potential problemareas. In most states, these officials are legally bound to not notifyfederal officials of any findings. Instead, they are there to help. If theydo find problems, changes must be made to take care of the issues, butno fines would be assessed. Before taking any actions, check with stateofficials to make sure your state has laws to protect you. n

For questions on this issue, or to stay current on OSHA rules,members can login to the NTMA website and view the online SafetyResource Center for further advice.

ONE WAY TO HELP AVOID ISSUES IS TO CALL YOUR STATE SAFETY OFFICE AND SEEK ADVICE BEFORE A VISIT FROM A FEDERAL OFFICIAL EVER TAKES PLACE.



WEBSITES YOUSHOULD KNOWArizona Chapter Websitewww.arizonatooling.org

Arizona Department of Commerce – Job Training Grant applicationwww.azcommerce.com/workforce

Arizona Department of Educationwww.azed.gov

Arizona Manufacturers Councilwww.azchamber.com/amc

Arizona MEPwww.arizonamep.org

Arizona State UniversityMechanical & Manufacturing Engineering Technologywww.poly.asu.edu/technology/mmet/

City of Phoenix – Community & Economic Development Programwww.phoenix.gov/ECONDEV/index.html

EVIT (East Valley Institute of Technology)www.evit.com

GateWay Community Collegewww.gatewaycc.edu

Greater Phoenix Chamber of Commercewww.phoenixchamber.com

Human Resources, Safety & Environmental topics of interest (Also see a link on the NTMA website, www.ntma.org)www.blr.com

Maricopa Skill Centerwww.maricopaskillcenter.com

Maricopa Community Collegeswww.maricopa.edu

Maricopa Workforce Connectionswww.maricopaworkforceconnection.com

Mesa Community Collegewww.mc.maricopa.edu

Mesa High Schoolwww.mpsaz.org

National Institute for Metalworking Standardswww.nims-skills.org

National Tooling & Machining Associationwww.ntma.org

One Voice Advocacywww.metalworkingadvocate.org

SCF Arizonawww.scfaz.com

U.S. Department of Laborwww.dol.gov

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LEGISLATIVE update

CONTINUING IN OUR EFFORTSto bring you the highest level ofcurrent information regarding allthings “legislative,” we present to you the remarks of Franklin Partners regarding the recent appointment of Craig Becker to the National Labor RelationsBoard (NLRB).

Changes at theLabor BoardWHAT CRAIG BECKER’S APPOINTMENT COULD MEAN FOR EMPLOYERS

On March 27, President Obama made a series of recess appointments including the appointment of the highly controversial Craig Becker to theNational Labor Relations Board (NLRB). Becker served as the AssociateGeneral Counsel for the SEIU since 1990 and as a staff counsel for the AFL-CIO since 2004. His employment history is only part of what has somequestioning his impartiality. The concern also stems from some of Becker’spast writings, particularly a 1993 Minnesota Law Review article entitled“Democracy in the Workplace: Union Representation Elections and FederalLabor Law.”

In the article, Becker states that employers should not be parties to unionelections or accorded the rights of candidates. He further asserted that onlyemployees and unions should be parties to pre-election hearings to deter-mine certain matters. Becker also stated that employers should be barredfrom placing observers of their choosing at the polls, should not be entitledto charge that unions’ campaign behavior coerced employees, and should



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not be allowed to refuse bargaining in order to get a U.S. Court of Appeals to review the Board’s election rulings.

Moreover, Becker stated that employers have some right to campaign,but such rights should be greatly reduced. He wrote that employersshould always be prohibited from conducting mandatory employeemeetings to campaign. The current rule states that such meetings areonly barred during the 24-hour period prior to the election. Becker alsobelieves that employers should be bound by their own solicitation anddistribution policies when campaigning; only distributing campaign material in non-work areas and only during non-work time.

With Becker’s appointment, the question becomes, “How much of hiswish list would the NLRB try to accomplish without Congressionalamendment of the National Labor Relations Act (NLRA)?” The concernis that the NLRB, by issuing decisions and rules, could elevate union certification rates near levels anticipated under card check. Even with-out the passage of the Employee Free Choice Act (EFCA), the NLRBcould significantly change the organizational landscape. For instance,while instituting a “card check” method would require congress to passEFCA, which is unlikely this year, the NLRB could mandate “quick elec-tions,” requiring a vote within 10 days.

In addition, the Board could adopt rules recognizing minority unions,grant unions greater access to employees for organizational purposes,restrict employer options during union campaigns and elections, recastsupervisors’ roles during election campaigns, and leverage neutrality/card-check agreements by overturning certain Bush era decisions.

Many small and family-owned businesses work with their employeesand the local community for unique local solutions to labor issues. Withthe possibility of significant changes now that Becker is a member of theNLRB, small businesses could be placed at a competitive disadvantageand lose their ability to work with employees in an effective and individ-ualized manner, thus weakening American competitiveness and drivinga wedge between workers and employers at a time when all should worktogether to recover from the economic crisis. Becker’s appointment tothe NLRB will last into the first few days of January 2011 before requir-ing another Senate vote, and the question remains what he will do withthe time he has on the Board. n

This article was submitted by Franklin Partners.

BE A PART OF ONE VOICE! VISIT:WWW.METALWORKINGADVOCATE.ORG

NTMA GOVERNMENT AFFAIRS“Stay Informed, Take Action, Make a Difference”

THE POLICY DECISIONS THAT OUR LEADERS MAKE INWASHINGTON, D.C. CAN EITHER HELP OR HINDER OURINDUSTRY'S ABILITY TO COMPETE IN THE GLOBALMARKETPLACE. NTMA IS COMMITTED TO REPRESENTINGOUR INDUSTRY'S NEEDS BEFORE CONGRESS AND THEADMINISTRATION. LEARN MORE ABOUT THE VALUABLESERVICES OUR WASHINGTON OFFICE PROVIDES TO NTMAMEMBERS AT: WWW.NTMA.ORG



EDUCATION update

It’s been too long since physics class for me to remember the formulafor rotational momentum, but I’m pretty sure it has something to dowith the distance of the mass from the center of rotation and thesquare of the rotational speed. Whatever the math, the robots fromWilliams provided a lesson in storing energy in a rotating mass whenthey clinched first and second place in the National Robotics League(NRL) State Championship at the SkillsUSA meet on April 12 and 13 at the Phoenix Convention Center. One by one, the challengers weredisintegrated (some literally) by the spinning twins Slam Clam andRevolver. (No word on why the landlocked northern Arizonans are sofixated on nautical names, although I speculate it has to do withwatching too much Sponge Bob during their formative years.)

Hot on their heels was Mesquite High School challenger MWP, a toughand maneuverable bot that gave the champs a run for their money. The only other bot that gave them any trouble was a duct tape coveredcreation from Tucson called Ghetto Blaster, whose odd shape andmiracle material covering kept the dangerous duo from flinging it intothe air like so many of the others. These features gained it the BestRobot popular vote. The main event was truly special and worth thewait. This final battle for first place between the two Williams bots wasa cataclysmic showdown. It took two matches to decide the winner,with Revolver being thrown over three feet in the air and eventuallygetting its weapon severed from its body in a Terminator-like finale.

A Dramatic Finish to Fifth AnnualShowdown in the Sunby MARK WEATHERS

The competition gets more popular and the designs more creative every year, with the bots becoming increasingly destructive. Anyonewho doubts the power of the diminutive 15-pounders has only to lookat the gouged-up steel floor and battered Lexan to realize that we aredealing with some scary hardware. Coolest Bot award went to Roguefrom Tucson, a high-tech rotating shell with some mean looking claws. Several other spinning body style bots looked and ran great also, but none could match the power of the weapons-grade flywheelcontingent. One bot made so much noise spooling up its weapon tomax rpm that I was afraid the arena couldn’t handle what it was goingto dish out. One unfortunate entrant had its weapon cleaved in half atfirst contact, and several others literally flew into pieces. Let’s just saythe broom came in handy.

The loyal team of returning volunteers did a great job getting the record 26 bots through tech inspection and dual elimination matchesunder the expert direction of new leader Jeremy Lutringer from Unique Machine. A big crowd of loyal parents and friends watched thematches, joined by curious students from myriad competitions at thestate SkillsUSA meet. Jeremy presented the perennial winners with a$3000 check to help them get to Kansas City for the NRL Nationalcompetition. The event takes place June 21 - 23 at the Hyatt CrowneCenter (Get more information athttp://www.gonrl.org/national_competitions.php.)

above, right: JeremyLutringer from UniqueMachine presents the

winning check.



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I had several studentsapproach me aboutgetting jobs in shops,about getting sponsorsfor their bots or aboutgetting materials.Teachers, students and even a few parentstook time tocongratulate us on ourgrowing success. Wehave made a hugedifference in many kids’lives and have renewedinterest and awarenessfor manufacturing.

Our work will be continued this summer with the third annual SummerRobotic Competition and Intern program, and we are angling for a biggrant to complete the pathway from bots to apprenticeship so that wecan have the best students going into our shops. Please help supportour efforts during these lean times with a sponsorship, shop time,material or volunteering. Contact us at [email protected]. n

Mark Weathers is President of the ATMA.

PERHAPS ALL FORMS OF CHAOS AND DESTRUCTION

AREN'T CREATED EQUAL



tech KNOW

MTConnect:The Holy Grail of Manufacturing and Why Is This Time Different?

by DAVE EDSTROM

There have been many attempts to address the “Holy Grail” of machinetools and manufacturing over the years. The “Holy Grail” I am referringto is the ability for machine tools and manufacturing to speak acommon language. So let’s consider the question, “What is MTConnect,and why is this time different?”

First, let me frame the importance of MTConnect. John Byrd, formerPresident of the Association For Manufacturing Technology (AMT),stated on a number of occasions, “MTConnect will do more formanufacturing and machine tools in the 21st century than CNC did for machine tools in the 20th century.”

That is a very powerful statement. Byrd made this statement becauseMTConnect is the enabling technology for organizations to understandwhat is happening at any time on the manufacturing floor. To trulyunderstand why numerous organizations and companies believeMTConnect will be revolutionary, it is important to provide a littlebackground to understand the “why” and “how.”

I spent two days in Chicago at the 2006 International ManufacturingTechnology Show (IMTS) with a large number of companies inpreparation for a keynote address I was to give at AMT’s AnnualMeeting. After those two days, I was asked by John. Byrd and otherAMT executives to share my thoughts on the state of manufacturing,and I told them I felt the machine tool industry had a serious computerscience collaboration problem. What I meant by that was simply thatthere was not an open and royalty-free language for machine toolvendors to speak to one another as well as speak to the outside world.In other words, each machine tool vendor was a separate country untothemselves, with their own proprietary language. Creating a completelyintegrated manufacturing process from many different machine toolvendors was extremely challenging at best, and could be impossiblyexpensive and time consuming as well. Anyone who has been in theindustry for any length of time knows this all too well.

In addition, there were two major stumbling blocks I noticed in theprevious efforts to come up with a common machine tool language.First, the attempts were not based on current, open and royalty-free

Internet standards. Second—but just as important—these attemptswere not free. I call these attempts the “Country Club Protocol” approach.The previous attempts at machine tool interoperability had the exactsame requirements as joining your local private golf country club:

1) You had to pay your initial membership fee to join the club.2) You had to pay each time you, a family member or friend

played.

That logic makes perfect sense for a golf club, but is an utterly completenon-starter for creating a truly ubiquitous network protocol such as thosethat run the Internet. I know this can be a little confusing, so I’ll definesome terms here in everyday language so we are all on the same page.

What is a protocol? A protocol is simply the language that is used forhardware devices (computers, machine tools, smart phones, etc.) andsoftware (applications, browsers, ERP systems, etc.) to speak to eachother. Think of a protocol as the English language with some very, verysimple rules on how these devices/software will speak to each other.For example, “Get spindle data from mt-959.”

What does open and royalty-free really mean in the context ofMTConnect?

Simply stated, open is at the opposite end of the spectrum fromproprietary. Proprietary is all about restricting rights, whereas open isabout guaranteeing rights. These rights include use, creation,extension, distribution, derived works and being technology neutral.Royalty-free means that I do not have to pay someone or some groupwhen I want to use that protocol.

Think of open and royalty-free protocol as using the letters of theEnglish alphabet when writing an article of a book. I do not needpermission or have to pay someone every time I use the letter “d” or “e”in anything I am writing. Imagine if you had to pay to join a club andthen you had to pay some group every time you used the letters “d” or“e”. How would that affect our ability to communicate, collaborate andwork together?



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ERP: (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. An ERP system can include software formanufacturing, order entry, accounts receivable and payable, general ledger, purchasing,warehousing, transportation and human resources.

I made two suggestions for the machine tool industry to consider atAMT’s Annual Meeting:

1) They needed a wakeup call to start a revolution.2) They needed to hear from someone who has led

technology revolutions.

What came out of this discussion were two presentations at AMT’sAnnual Meeting. I gave a one-hour presentation titled “How TheInternet’s Participation Age Will Drive Dramatic Changes In TheMachine Tool Industry.” Dr. David Patterson of UC-Berkeley gave akeynote directly after mine titled “Creating a Thriving ManufacturingBase in 21st Century America.” Dr. Patterson and I closely collaboratedon our presentations; I discussed the economics regarding why themachine tool industry must change, and he provided concretesuggestions regarding what makes successful technology revolutionsand guidance for next steps.

Immediately after our presentations, AMT made the decision to fundan open and royalty-free standard called MTConnect. AMT chose tofund this effort because it was critical for the survival of the industry.

MTConnect is a read-only, open and royalty-free protocol that is linkingshop floor technologies and moving toward the goal of seamlessmanufacturing operation by providing a plug-n-play level ofinterconnectivity between devices, equipment and systems. It allowsvarious sources to understand and exchange data. The MTConnectInstitute, which was later formed to support the continuedenhancement of MTConnect, develops and continues to provide theopen, royalty-free standards intended to foster interoperability fromthe shop floor to the enterprise and to the Internet. MTConnect willprovide much needed information in a timely manner, taking both timeand cost out of the overall manufacturing equation.

Companies are using MTConnect today. As Roy Peterson of GEAviation said, “Right away, this data gave us a more complete picture of how the machines were performing.”

Bill Blomquist of Remmele Engineering remarked, “If a machine is idleor a transfer station is falling behind, we’ll be better able to find thereason.” The common theme for both Roy and Bill is the absoluteimportance of knowing what a given machine tool is doing at any time.

MTConnect is REAL. And I did I mention that it was open and royaltyfree? :-)

You can join the MTConnect revolution today! n

Dave Edstrom is CEO/CTO of Virtual Photons Electrons and Director of AMT’s

Office of Strategic Innovation. MTConnect is a registered trademark. Look for

a follow-up to this article titled “MTConnect®: A Technical View of the Open,

Royalty-free Standard.” Learn more at http://MTConnect.org.



FEATURE story

Marketing Your Companyrough Purchasing Fairs

The Resources Are Available to Make It Happenby BRUCE B. TREICHLER

Zircon Precision Products, Inc. is a 20-person, precision machining facilitythat does business locally, regionally, nationally and internationally. How dowe do it? By marketing, networking and attending trade shows. We have beenmembers of the Arizona Tooling and Machining Association and the NTMAsince 1973. In 1988 when I was promoted to General Manager of Zircon, BillUhlig, the company’s owner at that time, asked me to begin attending theNTMA Procurement Fairs to bring in new customers for Zircon. at was thestart of what is now an ongoing marketing focus for the company. Since then,I have attended many purchasing fairs put on by the NTMA.



In 1995, I had been trying to make contactwith a particular company I thought weshould be doing business with. I kept callingthem, trying to make inroads so I could get toa buyer of machined parts. I continued to get the runaround and never made contact.Hearing that this company would be attendingthe NTMA Procurement Fair in Dallas thatyear, I signed up so I could try to meet withthem in person. When I located their table atthe fair, I stood in line waiting for my turn totalk with them.

is company had hardware they needed to bemachined sitting on the table in front of me. I had made very similar parts to these, and Iwas becoming increasingly hopeful thatperhaps this would be the break I needed toget into this company. When it was my turnand I introduced myself, the buyer asked, “So,do you think your company can make theseparts?” I replied, “Yes, I know we can becausewe are already making very similar parts.” Hethen asked, “Can you deliver them on time?Because if you’re late, we don’t want to dobusiness with you.”

I presented him with our latest report cardfrom one of our larger customers, whichshowed 100 percent on-time delivery with100 percent quality. What the buyer said thensurprised me. “So you are the Bruce fromZircon that we have been hearing about.” Ilooked at him, puzzled. He reached under thetable and pulled out an envelope about fourinches thick with my name on it. “What isthis?” I asked. He explained that it was a quotepackage he wanted me to quote, and said thatErnie Apodaca from Layke Incorporated inPhoenix, another ATMA member, had toldhim about Zircon Precision Products becausethey had a need for another good shop.(anks for the kind words, Ernie!) atcompany is now one of our top three

customers with lifetime sales that have topped$8 million dollars, and we are currentlynegotiating a new contract with them.

e point? Networking works. e NTMAPurchasing Fairs work.

In summer 2003, I went to England to meetwith a new customer before my first shipmentto them had arrived. is customer in Englandwas also obtained as a direct result of the 1995 Purchasing Fair because it was adifferent company division of the customer I met in Dallas.

In fall 2003, I participated in an AerospaceMission to the UK and e Netherlands,sponsored by the Arizona Department ofCommerce. I met with top executives of many companies in the two countries, and Icommend the Arizona Department ofCommerce for creating a beneficial and well-planned trip. I also made friends and creatednew contacts with other local companies thatwent on the Aerospace Mission Trip, and Ihave kept in contact with them and have evendone some work for some of them.

What to Expect at the FarnboroughAir ShowIn 2008, I attended the Farnborough air show in England on behalf of Zircon PrecisionProducts. I attended this massive trade showwith the help of the Arizona Department ofCommerce, and it was an experience I’ll neverforget. I went in 2008 to learn the ropes, andif I ever get another opportunity to attend, I will be more prepared. e logistics of simply getting to the show can beoverwhelming, so if you go, it’s best to go withsomeone who has attended before and isfamiliar with the process.

FARNBOROUGH INT’LAIRSHOW 2010JULY 19-25, 2010

A platform for some 1,300 exhibitorsform the private, commercial, civil andmilitary sectors will showcase anddemonstrate aircraft, equipment andtechnologies. e show is specificallydesigned to facilitate tailor-made andunrivalled opportunities to meet,negotiate and announce businesstransactions.

A biennial event, FarnboroughInternational Airshow 2008 was attendedby over 133,000 trade visitors.

Exhibiting companies announced record-breaking order figures of US$88.7bnworth of orders. 70 delegations from 38countries attended alongside the 133,000trade visitors throughout the week and153,000 on the public weekend.Particular highlights of the show includedthe flight of the last remaining airborneAvro Vulcan, as well as the replica modelof the Cody Flyer, Samuel Franklin Cody’sfamous aircraft in which he made the firstUK powered flight providing the centerpiece for the Centenary celebrationsalongside the diamond anniversary of theairshow at its Farnborough home.

CONTACTFor general enquiries about FarnboroughInternational Ltd and its events contact:

Farnborough International LtdShowCentreTelephone: +44(0)1252 532800Fax: +44(0)1252 376015Email: [email protected]

US$88.7bn 2008 WAS A RECORD-BREAKING YEAR IN TERMS OF SALES ORDERS ANNOUNCED.



FEATURE story

Getting to England is easy. A non-stop flighton British Airways from Phoenix to Londonworks best. You leave in the evening, so youcan work all day and arrive the next day atabout 1:00 p.m. Getting from Heathrow toLondon is an experience in itself. You caneither hire a car to take you there atconsiderable cost or you can take the “Tube,”an underground subway system. Once youhave arrived in London and have found yourhotel, you can finally rest easy. Traveling withacquaintances from the Arizona AerospaceMission trip made the experience less nerve-wracking for me since they had made the tripmany times. We stayed at a hotel attached tothe Victoria Train Station, which proved to bea perfect place to be since we had to use thetrains to get to Farnborough each day. It tookabout an hour to travel from London toFarnborough, and we had to change trainsabout halfway there.

I met many interesting people on the train,including an officer in the U.S. Army who wasthe head of procurement for the Army inEurope. Speaking with him during a 40-minute ride, I learned a lot about how thingsare done in Europe. I also met a number ofsalespeople from all over the world along aswell as several exhibitors. I saw people I knewfrom Arizona, California and across the U.S. aswell as many of the contacts I had made fromthe Aerospace Mission when I visited Englandand e Netherlands in 2003.

Arriving at Farnborough Train Station, wewere all herded into buses that took us to theshow. Be sure to bring comfortable shoes ifyou go. is is a very large event and you willbe walking a lot. e attire for this event is abusiness suit. Although the weather was fairlycool the year I attended, I heard that in 2006,it was dreadfully hot and humid even thoughthe tents are air conditioned.

Be prepared to work if you attend and have astrategy in place, planning where are yougoing to go and when. Try to set upappointments with companies you want tovisit before you get there. Otherwise, yourfirst day will be spent trying to set upmeetings. If you pay to use the ArizonaDepartment of Commerce booth, they canhelp. ey are experienced, and they have thecontacts to make things happen. If you can,arrange to do business in the morning beforethey begin flying planes from late morningthrough the early afternoon. It’s very loudbecause you are right next to the runway, andyou won’t be able to talk to or hear yourpotential customer.

As the week progresses, the attire becomesmore casual. People first begin to loosen theirties, and then they begin taking them off. Bythe third or fourth day, the suit jackets havebeen left in the hotel rooms and everyonelooks much more comfortable. You’ll want tobe there for the “business” days, Mondaythrough ursday. e public days are Friday,Saturday and Sunday and it isn’t necessary tobe there at that time.

A Worthwhile ExperienceMy overall experience was great and I reallyenjoyed it. Traveling in England is pretty easywhen you know how to do it. If you have neverbeen there and are planning to attend, theeasiest and safest way is to travel withsomeone who has had the experience; if yougo alone, contact the Arizona Department ofCommerce. ey can and will help you. It willcost your company to be part of the Arizonabooth, but it is well worth the expense.

When you go to England or e Netherlands,communicating is pretty easy. Most people ine Netherlands speak Dutch and English, so Inever had a problem communicating withthem. It’s extremely important to know that

LONDON

FARNBOROUGH



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if you want to do business in Europe, you need to have a quality system that isregistered to ISO standards; otherwise, theywill not want to do business with you. e firstquestion I usually was asked was about ourquality system. If you are not registered, theconversation is pretty much over.

We have been doing business with ourcustomer in England for eight years and with the one in the Netherlands forapproximately 20 years. ey are both goodcustomers; they pay on time andcommunicate well with us.

We all need to market our businesses, nomatter how small or large we are. We need toget our company’s name in front of the rightpeople in order to get new business. It’s noteasy; it’s time consuming and can beexpensive. But don’t just sit around waitingfor the phone to ring to get new business. Go out and get it. at’s what I’m doing, and that’s what your competitors are doing. Be aggressive, attend functions, network with everyone you can and market yourcompany. Advertise your company in trademagazines that will be distributed to yourcustomers.

By using taking advantage of purchasing fairs and some of the other tools the NTMAprovides us, marketing becomes lessexpensive and is a much better use of ourtime. Traveling to a large trade show such asFarnborough or the Paris Air Show isexpensive, and it will require at least a week of your time to do it right. You can get helpfrom the Arizona Department of Commerce,which will assist in every aspect of your trip,including saving you money. n

Bruce B. Treichler is President of Zircon Precision

Products, Inc.

133,000TRADE VISITORS ATTENDED THE 2008 SHOW THROUGHOUT THE WEEK



FEATURE advertorial

About the time that Stephen Covey was writing his 7 Habits for Highly Effective People (Covey,1989), I had the opportunity to author, along with my brother, Pat, an Introduction to StatisticalProcess Control. (1992, Cline and Cline). is was a 12-lesson, home study course contracted bythe Materials Engineering Institute of ASM International, formerly the American Society forMetals. e process for the creation of each chapter was: I wrote the lesson and forwarded it tosix to eight experts in the quality engineering field; they conducted their reviews which I referredto as the bloodletting due to the numerous red markups; then, they returned their copies for meto collate and re-write based on a consensus input.

I could spell SPC, but I relished the opportunity to glean the in-depth understanding of qualitysystems, while each of the experts corrected my works. And, I chuckled as conflicting commentsabout each paragraph came in from the quality gurus. For example, one section resulted in thefollowing feedback: Reviewer A wrote, “If I’m going to be part of these reviews, you’d better findpeople who know what they’re talking about to write the material.” While reviewer B commentedon the same material, “It’s about time you guys started getting down to the meat of the topic—Great Job!”

I reflect on my writing career, because it was the point in my life where I began to realizethat every one of the learnings added another tool to my personal tool kit.

In 1991, I was fortunate to study for four days with Dr. W. Edwards Deming, who has beencredited with the turnaround of Japanese businesses and fatherhood of the Quality Revolutionthat hit Japan through the 1970s and America in the 1990s. He explained his 14 Points, but alsotaught his eory of Profound Knowledge. is theory recognizes the Appreciation for a System,Knowledge about Variation, the eory of Knowledge, and Psychology—of individuals, society,and change. Eventually, he published these thoughts in e New Economics (Deming, 1993). I leftDetroit that week with a much heavier tool kit and an admiration for the dedication of an aging,devoted gentleman who was committed to spreading his word.

Over the past 20 years I’ve regarded my tool kit as a support system for the completion ofengineering, leadership and management tasks. I’ve continued to add tools while I have travelledaround the world buying CNC and ancillary machines, benchmarking manufacturing processes,and facilitating quality, delivery, and cost reduction projects. I was able to identify aspects of theToyota Production System along with other strategic systems, Lean Principles, and theapplication of Six Sigma for process and product development. ese aspects could be seenlocally, in the USA and Mexico, in Japan and China, and from Brazil to Britain.

Feel Free to Borrow My Tools by MIKE CLINE

Reorganizing the Toolbox



Many of us are going through TOUGHTIMES, but we don’t have to do it alone.

MICHAEL CLINE LEADERSHI

Scottsdale, AZ 85255 • (602) 908-7552Contact us: [email protected]

Tailor improvement activities that ‘resonate’ with your business personality and situation –

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When I quit my “day job” and moved to the Southwest, I tookinventory of the status of my personal Tool Kit and realized that it hadgrown substantially and resembled a giant red Snap-on tool box. As Istarted to document what I learned I recognized that there are six keycategories that are regularly demonstrated by successful businesses,not unlike the 7 Habits of Highly Effective People, identified by Covey. I call these the “6 Diamonds of Success” and they include: InvestedLeadership, Cross-functional Involvement, Standardization, At theSource Quality, Compact Value Streams, and Continual Improvement.

As I reorganized the tool box, I recognized 58 items that contribute to the success of businesses and celebrate these as the “58 Facets ofSuccess.” e facets can be attributed to a variety of libraries, from ISO and AIAG documents to the teachings of quality and throughputexperts, including Lean and Six Sigma; and, some are simply my ownpersonal observations. Examples of the facets include: LeadershipParticipation, Quality Independence, Identification of Training Needsand an Up-to-date, disciplined Training Matrix, StandardizedCorrective Action Reports as a learning tool, Capacity versus TAKTanalysis, Important Characteristic Designation, Value Stream Mapping,and Business Plan Deployment.

I offer the Facets of Success as thought starters for business leaders tozoom in and focus on areas where past performance may not meetexpectations and there are opportunities for improvement. Sometimesthe rigors of the General Manager and COO assignments don’t leavetime for rewriting the business paradigm. It’s my hope that access tomy Snap-on Tool Box might help get beyond “business as usual” andmake “better than ever” the paradigm of the future. n

The article, “Feel Free to Borrow my Tools©” is copyrighted by

Michael Cline Leadership, Inc., 2010. You can reach Mike Cline at

[email protected]

e 6 DIAMONDSof Success

• Invested Leadership• Cross Functional

Involvement• Standardization • At-the-Source Quality• Compact Value Stream• Continual Improvement

Find out more about the ‘6 Diamonds of Success’ at:www.clineleadership.com



FEATURE story

AMERICAN MANUFACTURING HAS BEENFACING INCREASING COMPETITION FORMANY YEARS. THIS COMPETITION IS NOTLETTING UP, AND THE ECONOMY HASNOT HELPED.

High mix-low volume job shops and machineshops have a difficult scheduling environmentdue to the simultaneous production ofnumerous jobs with different routings, setups,process times, due dates, priorities andrequirements of finite capacity resources.While jobs compete for and wait for resources,expediting, stress and overtime join the fray.Creating more detailed schedules and betterforecasts, balancing capacities, and expeditingharder hardly improve the situation. Withnearly everything variable, job shops arenotoriously difficult to schedule or to predictdeliveries.

Focus on Efficiency and SymptomsTraditional solutions go after symptoms, orthey try to improve the performance of thesystem by improving the performance of all of its parts. It seems to make sense. If all theparts are working efficiently, the sum of themmust be efficient. Yet, with all of theconflicting demands, it doesn’t quite work outas expected. e symptoms are still there.

You likely have a lot of years in your business.You have probably seen and tried your share ofideas with varying results. e fact that you arestill here is testimony to your skill and tenacity.

Focus on FlowBreakthroughs come from areas most peopleare simply are not aware of. Instead of focusingon machines, people, processes and orders,look at the shop as a system with a flow of

work. Identify what slows the flow of workfrom getting through to the customer. ere is usually one thing that most limits the flow:It’s called a bottleneck—the system constraint.It is the most heavily loaded resource. econstraint is like the weakest link in a chain,which determines the chain’s strength.Similarly, the most heavily loaded resourcedetermines the limit of a shop’s output.

Take for example, a garden hose with a kink init. e kink is the bottleneck of this system. Toget more water through the hose, straightenthe kink. Improving any other part of the hosewon’t make a difference. Relieving thebottleneck results in a direct improvement inthroughput.

e bottleneck or constraint can be a person, a machine, a work cell or a department. It caneven be a policy, the market or some otherkink. Fortunately, there will always be aconstraint in a system, and it’s necessary andextremely valuable. It determines the systemoutput. It’s the first place to makeimprovements to increase throughput becausethe results are immediate. In fact, fixing anyother area usually has no effect on output. Aconstraint is only a problem if you don’t knowwhere it is or why it’s overloaded.

Managing Flowe constraint can function as a critical controlpoint for management. Rather than watchingall of the parts of the system, just watch theconstraint to know how the system isperforming. en business decisions based onhow they impact the constraint make sense.Nothing should get in the way of theconstraint by wasting its time or starving it.at means the rest of the system must

support getting the most through theconstraint. Protect the constraint. Keep itproducing. It’s the heartbeat of the shop. If the constraint stops, throughput is lost, andthroughput is how fast the shop is makingmoney. Lost throughput can’t be made up. Ifthe operator of the constraint goes to lunch,throughput is out to lunch also. If the hourlythroughput for the total shop is $2,000 perhour, that’s an expensive lunch every day.

High mix-low volume shops are verycomplicated because the bottleneck will moveas the mix of orders changes. A wanderingbottleneck is chaotic. Monitoring andmanaging the planned loading protects theflow from unexpected bottlenecks.

The Theory of Constraints (TOC)Managing a system as a flow of work throughthe constraint was developed by Dr EliGoldratt, a physicist who applied scientificthinking to business. His eory ofConstraints says, “Every system has somethingthat limits its output.” Since a business is asystem, the business is limited by something.He calls this a constraint.

Goldratt introduced TOC in 1984 in hisbusiness novel, e GOAL. TOC has since beenused in most major companies around theworld to dramatically reduce lead time whileincreasing throughput, profits and due dateperformance.

e eory of Constraints requires a paradigmshift in thinking. Instead of managing theschedule and every resource, the eory ofConstraints focuses on managing the flowthrough the constraint. Resources, equipment,software and processes do not need to change.

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Many people are unwilling to change the way they manage. e eoryof Constraints doesn’t look or feel like what they are used to. ey cancontinue with what they have been doing and be pretty certain how itwill be six months or a year from now, and they can be okay with this.Other people see possibilities and are willing to try on something new.

Consistently Fast is a Competitive Advantage!When using the eory of Constraints approach, manufacturing leadtimes can be short and due date performance near perfect. Competitorswill not understand how this is possible. ey may even think suchdelivery promises are crazy.

UnRefuseable OfferOnce very short lead times are dependable and there is sufficient freed-up capacity, a market offer can be created that the competition won’t tryto match ... because they can’t. is is an UnRefuseable Offer, also calleda Mafia Offer. It satisfies customers’ needs so well that they feelcompelled to take it. is is a powerful competitive advantage.

Speed, predictability and rapid response become a competitiveadvantage. eory of Constraints is an UNFAIR competitive advantage.

e ATMA is “dedicated to keeping manufacturing strong in Arizona aswell as on a national level.” Critical Chain Production Managementusing the eory of Constraints can help create that.

If you would like to find out more, come to a workshop. A Critical ChainWorkshop for Job Shops will provide simulations to demonstrate thedifference a balanced line, an unbalanced line, and Critical ChainProduction Management have on throughput. n

Skip Reedy is a Theory of Constraints expert certified by TOCICO. He is a Mechanical Engineer, holds a MBA, and is the only TOC consultant focused onhelping Arizona companies. Reedy can be reached at 425.923.5750 or byemail at [email protected].

CRITICAL CHAIN PRODUCTION MANAGEMENT WORKSHOPDate: May 26; Time: TBD; Location: Jobbing.com 8737 N. 77th Drive Peoria, AZ 85345 (602.200.6800)For information about the time and to reserve your seat, call623.533.4737.

FIVE FOCUSING STEPS OF

THE THEORY OF CONSTRAINTS1. Identify the system’s constraint.2. Decide how to best exploit the constraint.

(Get the most throughput.)3. Subordinate all other processes to the above

decision. (Don’t block or starve the constraint.)4. Elevate the system’s constraint. (Get more of

the constraint.)5. Don’t let inertia become the constraint.

(is is a process of ongoing improvement.)



FEATURE story

THE WHITE HOUSE AND CONGRESSSEEM TO ANNOUNCE EACH WEEK A NEW PLAN TO “SAVE U.S.MANUFACTURING.” WHILE THE FOCUSHAS BEEN ON INCREASING EXPORTS,THE KEY TO SAVING U.S.MANUFACTURING MAY BE A NEWDYNAMIC IN WHICH COMPANIES AREINCREASINGLY PURCHASING FROMU.S.-BASED SUPPLIERS PARTS THATWERE PREVIOUSLY SOURCED FROMOVERSEAS. “RE-SHORING” IS GAININGMOMENTUM. CATERPILLAR, FOREXAMPLE, RECENTLY ANNOUNCEDTHAT IT WILL RELOCATE SOME HEAVY-EQUIPMENT OVERSEAS PRODUCTIONTO A NEW U.S. PLANT. RE-SHORINGCAN'T BE EXPLAINED BY COMPANIES“JUST WANTING TO DO THE RIGHTTHING.” INSTEAD, THERE IS A STRONGBUSINESS CASE TO BE MADE FORSOURCING HERE AT HOME.

It’s undeniable that developing countries havea labor cost advantage compared with theUnited States; however, a closer looks suggeststhat products sourced from these countriesmay not necessarily provide the lowest TotalCost of Ownership (TCO) for the buyer. TCOanalyzes the entire cost a company incurswhen purchasing and using a particularmanufactured part. It’s the product price plusany costs that are jointly incurred by thesupplier and the buyer, and internal costsincurred by the buyer. e TCO of amanufactured part also includes the non-priceTCO components such as freight andpackaging, inspection labor caused by the partin the purchaser’s organization and inventorycarrying costs, missed customer deliveries dueto shipment delays, and travel costs to visitand manage the supplier.

To illustrate, the TCO of a stainless steel gearsourced in China (Exhibit 1) compared withthe same stainless steel gear sourced in theUnited States (Exhibit 2) by a U.S.-basedcustomer can be used as an example.

e product price is composed of the following:

• Material costs will be fairly close, with costs in China slightly higher due to a higher scrap rate of 4 percent vs. 1 percent in the U.S.

• China’s well-publicized advantage in labor costs is reduced by generally more efficient manufacturing processes in the U.S., but this cannot erase a labor cost differential of approximately 10 times (approximately $2.50 per hour in China compared with $25 in the U.S.).

• In capital/depreciation costs, China again has an advantage of about 20 percent. China’s often more labor-intensive processes require less machines and therefore less capital to be deployed, but the tougher operating environment means that many machines only last for seven years, compared with approximately 10 years in the U.S.

• A factory in the U.S. will, in most cases, be able to produce at lower energy costs than its Chinese counterpart. While electricity from the grid is approximately 30 to 40 percent less expensive in China, many Chinese factories must operate on backup generator power for several hoursper day or week, due to rolling power outages. This form of electricity gener-ation costs approximately two or three times as much as power from the grid.

Summing up the above components gives us adirect product cost of $1.89 for the U.S. and$1.75 for China-based production. In addition,a supplier’s overhead and profit must beconsidered expressed as a percentage of thedirect product cost. Assuming a 5 percentprofit for both manufacturers, and assumingoverhead markups of 15 percent of productcost for China and 25 percent for the U.S., thetotal cost or price per unit is $2.45 in the U.S.and $2.11 in China.

Now, add in the non-price TCO components.For several of the following components, it’s

assumed a minimal or zero base-level cost forthe U.S.-produced part and add additionalcosts incurred in Chinese production to obtainthe Chinese TCO.

At the beginning of a product life cycle,companies will spend significantly more onprototyping for China-sourced products than they would in the U.S. Due to timeconsiderations, this prototype part or tool willalways be manufactured in the U.S. A supplierwill charge more for it because it will notobtain the full life-cycle volume against whichit can amortize the prototyping cost. On a per-unit basis, prototyping costs will be higher ifthe full life-cycle run is manufactured in China.In our example, this cost is significant—5percent of the TCO of the unit.

Packaging for products shipped from Chinawill always be more expensive, but thisrepresents a small fraction of the overall TCO.Similarly, freight from China will always bemore expensive. In addition, U.S. customersare likely to have to expedite (i.e., air freight)parts from their Chinese supplier at times assupply chain management over such longdistances won’t be perfect. Expediting avoidsthe risk of a production shutdown, but it isexpensive. (See Exhibit 2.)

Related to the longer supply chain from Chinaare inventory carrying costs. e customerusually pays the Chinese supplier when thegoods are loaded onto a ship or truck, whilethey pay a U.S. supplier 60-plus days after thegoods arrive. us the customer must carrythat inventory for about three months longerif it is sourced from China. Depending on thevalue of the parts sourced in China, this number can be relatively immaterial or verysignificant.

Additional costs are associated with qualitymanagement for parts sourced from China.Quality management costs include theincreased manpower for incoming goodsinspection, the scrap rates for the parts notmaking it past the inspection, the rework labor

e Economic Argument for “Re-shoring” Manufacturing Jobs Back to the U.S. by DEAN FRANCK, HARRY C. MOSER AND MARIUS RONGE



exhibit 1: STAINLESS STEEL GEAR CHINA TOC

in $/unit

exhibit 2: STAINLESS STEEL GEAR U.S. TOC

in $/unit

cost associated with fixing substandardpurchased parts, and the scrap rates andrework of the final product if problems weremissed in incoming inspection and caused afully assembled product to fail finalinspection. In the stainless steel gear example,the additional quality management cost forthe Chinese part is significant.

Looking at the end of the life cycle of aproduct, with relatively short lead times in theU.S., it is feasible to end a product’s life cyclewith zero or very little inventory; whereas,companies are finding that they have moreparts inventory on hand when they aresourced from overseas. is leads to obsoleteinventory if the last few weeks of shippedproduct can no longer be used in production.

Adding up the individual components resultsin a non-price TCO of $0.59 per unit for the

Chinese part and $0.06 for the U.S.-sourcedpart, for an overall per-unit TCO of $2.70 forChina and $2.51 for domestic production. is example demonstrates that off-shoredproduction may mean “cheaper price,” but notnecessarily “lower Total Cost of Ownership.”While the result of the analysis will differ fordifferent parts, it is critical that companiesperform a full TCO analysis when consideringtheir sourcing options. is includes lookingbeyond quantifiable components to issuessuch as the security of intellectual property onproducts and processes; exchange ratefluctuation that may erase overseas benefits;increasing wage rates overseas; distance fromR&D research facilities; and regulatorycompliance, carbon footprint and enforceableproduct liability.

e economics of “re-shoring” has created realmomentum for companies to take a second

look at manufacturing in the U.S. On May 12,2010, e National Tooling and MachiningAssociation (NTMA) and the PrecisionMetalforming Association (PMA) will host itsannual purchasing fair in Irvine, Calif., thatwill, for the first time, focus on “re-shoring.”More information on the fair can be found atwww.tiny.cc/YU9e2. n

Dean Franck and Marius Ronge arefounders and partners of the consulting firm,The Gibb River Group, Inc., and specialize inachieving breakthrough cost savings for theirclients through highly practical on-the-groundsupport in Strategic Sourcing, TCO analysis,Lean Manufacturing and Design-to-Costefforts. Contact [email protected].

Harry Moser is Chairman Emeritus of AgieCharmilles LLC, a leading machine toolsupplier.

TCO ANALYZESTHE ENTIRE COSTA COMPANY INCURS WHENPURCHASINGAND USING APARTICULARMANUFACTUREDPART.



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BAR-S MACHINERY, INC.Mr. Tim Smith2575 N. Highway 89Chino Valley, AZ 86323928.636.2115 (ph) 928.636.1115 (fax)email: [email protected]: March 2010

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CALENDAR of events

PRESS RELEASE

NASDCTEc Adopts Unified Vision toTransform CTE

The National Association of State Directors of Career TechnicalEducation Consortium (NASDCTEc) unveiled a guiding documentto transform all of career technical education (CTE) into high-quality and results-driven comprehensive programs of study thatprepare students to succeed in their education and careers.

Reflect, Transform, Lead: A New Vision for Career TechnicalEducation” outlines a commitment by CTE leaders to adopt aunified vision that is framed by a set of progressive principles andactions. The vision will lead to the development andimplementation of common CTE objectives and standards alignedto The National Career Clusters framework, which is structured toprepare students for postsecondary education and career. This willrequire the implementation of aligned standards, curricula andassessments that are designed by educators and by business andindustry and are delivered in seamless programs at the secondaryand postsecondary level.

The interconnected principles are:

• CTE is critical to ensuring that the United States leads in global competitiveness.

• CTE actively partners with employers to design and provide high-quality, dynamic programs.

• CTE prepares students to succeed in further education and careers.

• CTE is delivered through comprehensive programs of study aligned to The National Career Clusters framework.

• CTE is a results-driven system that demonstrates a positive return on investment.

“Recognizing global influences impacting the economy and theresponsibility of education leaders to prepare students to succeedand meet new, higher workforce demands, the State Directorshave created a formal, unified plan for the way we willlead CTE into this new era,” says Kimberly Green, NASDCTEcExecutive Director.

NASDCTEc unveiled its vision paper via a webinar on March 18.The webinar will be archived and the document is available atwww.careertech.org. n

The National Association of State Directors of Career TechnicalEducation Consortium (NASDCTEc) was established in 1920 torepresent the state and territory heads of secondary, postsecondaryand adult career technical education (CTE) across the nation.NASDCTEc, through leadership, advocacy and partnerships, aims tosupport an innovative CTE system that prepares individuals to succeedin education and their careers, and poises the United States to flourishin a global, dynamic economy. Visit www.careertech.org or call301.588.9630 for more information.



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Documents

Precision Magazine, May / June 2010