The Board of Direc tors

The Board of Direc tors

Dan Ariens, President

Ariens Company

Troy Berg, President

Dane Manufacturing, Inc.

Steve Brahm, Vice President, Operations

Manitowoc Crane Group

Bill Breihan, Staff Representative, District 2

United Steel Workers

Amy Bruchs

Michael Best & Friedrich

Jose Bucio, Staff Representative

Wisconsin State AFL-CIO

John Choren, Director, Rapid Prototyping Center

Milwaukee School of Engineering

Daniel Clancy, President

Wisconsin Technical College System

Steven Copp, President

TCI, LLC, Trans-Coil International

Tom Duffey, President

Plastic Components, Inc.

Mike Erwin, President

Tailored Label Products, Inc.

Jim Haney, President

Wisconsin Manufacturers & Commerce

Randy Hulke, Director of Stout Technology Transfer Institute

University of Wisconsin - Stout

Mary Isbister, President

GenMet Corp.

Tom Jacobson, Vice President,Operations,

Bruno Independent Living Aids, Inc.

Gayle Kugler, Director

UW – Extension, Division of Entrepreneurship & Economic Development

Mike Lanser, President

Lakeshore Technical College

Richard J. Leinenkugel, Secretary

Wisconsin Department of Commerce

Peter Mancuso, President

Lindquist Machine Corporation

Jim Martin, Director of Operations

Donaldson Company

Rhonda Rushing, President

Berntsen International, Inc.

From the Executive Director

Dear Friends:

We are pleased to present the 2009 Annual Report for the Wisconsin Manufacturing Extension Partnership (WMEP). In the past year, WMEP has completed projects with 229 Wisconsin firms and helped those companies realize a positive economic impact of $164 million. We are proud to have been cited by our customers as helping to create or retain 798 manufacturing jobs last year.

This is a time of unprecedented challenges for Wisconsin manufacturers. The strain produced by the deep global recession and the dramatic constriction of business credit have put exceptional pressure on Wisconsin’s small and midsize manufacturers. Over the past year, the state has lost 50,000 manufacturing jobs, not including jobs lost in service industries that support manufacturing.

WMEP is working hard to mitigate the impact of the downturn. We continue to deliver lean and quality services to drive higher output with lower cost. We have expanded our innovation offerings to help our customers access new markets and develop new products to counter lost business.

Just as importantly, we are working hard to prepare Wisconsin firms for market growth when the recovery begins. Our Next Generation Manufacturing (NGM) initiative provides a road map for post-recovery success in what will be an intensely competitive global manufacturing environment. Our Enterprise Business Transformation (EBT) service takes a broad look at company operations and provides direction for strategic and operational changes. Additionally, we have entered into partnerships that have expanded our NGM service lines in the areas of sustainability, global engagement and innovation.

Manufacturing – the science and art of turning raw material into value-added products – has and will continue to be the best source of net wealth creation in the economy. At WMEP, we believe that an innovative, successful manufacturing base is the key to higher paying jobs and a higher quality of life in the state. We remain firmly committed to our mission – to elevate the Wisconsin manufacturing economy to be the best in the world.

Mike Klonsinski Executive Director Wisconsin Manufacturing Extension Partnership

Wisconsin Manufac tur ing

Wisconsin Manufacturing ● Wisconsin is home to nearly 10,000 manufacturers that

employ more than 440,000 – or roughly one in six – workers. The industry, hit hard by the global recession, lost 50,000 jobs during the past year. Still, manufacturing accounts for 20% of Wisconsin’s economy, and supports thousands of jobs in related industries such as transportation, logistics and services.

● Wisconsin surpassed Indiana this year to become the leading state in the nation for manufacturing employment, according to the U.S. Bureau of Labor Statistics. Manufacturing has a $23.7 billion annual payroll in Wisconsin, and the average annual manufacturing wage in the state is $48,116, one of the highest of any industry.

● Wisconsin is a global manufacturing leader, and despite current challenges, has a solid foundation to renew a successful and thriving industrial economy. In the past five years, manufacturing’s contribution to Wisconsin’s economy rose $7 billion to $48.8 billion in 2008, according to the federal Bureau of Economic Analysis (BEA).

● Wisconsin exports rose 9.2% to $20.6 billion in 2008, ranking Wisconsin 18th in the nation for exports. International sales have, however, registered a 21% decline for the first half of 2009. Despite the pullback, exports have been a bright spot in the state’s economy, rising 62% over the past five years, with a growth rate often outpacing the nation. Canada is Wisconsin’s largest international market, followed by Mexico, China, Germany and Japan. Manufactured goods represent 85% of Wisconsin exports.

● More than 500 Wisconsin manufacturers participated in the 2008 Next Generation Manufacturing Study, a ground- breaking effort led by the Wisconsin Manufacturing Extension Partnership to assess the global competitiveness of state firms. The study revealed the need for improvement in six critical areas. Wisconsin’s leadership paved the way

for a national study that underscores the urgent need for manufacturers to focus on reaching the world-

class performance benchmarks of Next Generation Manufacturing (NGM).

NGM: the Strategic Answer“I think it is clear that most manufacturers need help in taking their business to the next level to be able to compete with domestic as well as foreign competition—particularly smaller businesses. The problem is that many of those who need it are not aware of it until it is too late. WMEP’s Next Generation Manufacturing service line offers an affordable option for those smaller businesses to get that assistance and potentially open their eyes to improvements that may keep them around long term.” —Dan Hietpas, President, Muza Metal Products Corporation, Oshkosh

Improving Productivity is Critical“The Wisconsin (and indeed the entire United States) manufacturing infrastructure is facing unprecedented competitive pressures due to the global marketplace. Next Generation Manufacturing methods will allow Wisconsin manufacturers to compete with low-cost labor centers by improving productivity and quality to levels that are hard to beat.”

— Raj Nair, Vice President, Operations, Alfalight, Inc., Madison

Next Generation Manufacturing

Looking ForwardResearch suggests that markets and customers have changed substantially during the recession. Therefore, manufacturers must anticipate and prepare for the new business landscape that will be dominated by increased global competition, greater volatility and shorter lead times.

Next Generation Manufacturing refers to a framework of six attributes driving manufacturing growth and profitability in the 21st century. To remain competitive, manufacturers need to achieve world-class performance in a select few of these attributes and parity with key competitors in all others. WMEP offers new services within the framework of Next Generation Manufacturing to help manufacturers succeed in the post-recession economy.

● Customer-Focused Innovation: WMEP offers a range of services that help manufacturers streamline the product development process and to evaluate and enter new markets. One example is the Eureka! Winning Ways process.

● Systemic Continuous Improvement: Drawing on years of experience, WMEP provides a full range of Lean and quality services to help manufacturers upgrade their internal processes from the shop floor to the executive suite.

● Advanced Talent Management: WMEP and its partners provide training programs, such as Training Within Industry (TWI), as well as targeted services to help manufacturers acquire, train, and retain skilled employees and assure smooth management transition.

● Global Engagement: Through a strategic alliance with the Wisconsin Department of Commerce, WMEP is helping manufacturers access the resources they need to develop their export potential.

● Extended Enterprise Management: Leveraging the reach of the national MEP system, WMEP helps manufacturers and suppliers improve processes and communication to cut excess cost and time from the supply chain. WMEP’s AccelerateTM program is a national model.

● Sustainable Products and Process Development: WMEP and its partners offer a range of services that help manufacturers reduce costs and increase sustainability, including lean and green assessments and energy audits.

The attributes of Next Generation Manufacturing were developed by manufacturers, industry thought leaders and Manufacturing Extension Partnership (MEP) centers, and reflect the best practices and performance strategies of world-class companies.

Next Generation Manufacturing Study Results Show Performance GapWisconsin manufacturers that have made significant progress toward world-class status in any Next Generation Manufacturing category are more likely to outperform their peers, more likely to believe Next Generation Manufacturing attributes are important to their business success over the next five years, and more likely to actually adopt best practices. But simply believing an attribute is important doesn’t lead to world-class status. There’s a large gap between Wisconsin manufacturers’ recognition of the importance of NGM success strategies and their ability to achieve superior performance in any of the strategies. In general, smaller firms trailed the performance of larger firms in integration of Next Generation practices into their operations, and were less likely to have systems in place to measure performance.

Download this study and other related documents at: http://www.wmep.org/RequestInformation.aspx

Leadership for the Next GenerationLeadership for the Next Generation

Business Transformation Services a Catalyst for Competitive AdvantageIn January 2009, WMEP introduced Enterprise Business Transformation (EBT), a simple, effective methodology that helps manufacturers achieve dramatic financial results through ongoing operational improvements.

“From past experience with WMEP, we knew they had the background to assist us in establishing competitive priorities and help us refocus on our core competencies. We began the Enterprise Business Transformation (EBT) program in January 2009 to develop a framework for strategic development and deployment by assessing, planning and implementing continuous improvement programs. WMEP helped us establish solid metrics that are used to define and identify measurable and attainable goals. As a result of the program, product rejects have decreased to less than 1/10th of 1% and sales volume has increased by over 25%.

We feel, with WMEP’s assistance, the foundation has been laid for both short-term and long-term success.”

—Dan Culligan, President, Dairyfood USA, Blue Mounds

Eureka! Winning Ways Sparks New Product DevelopmentManufacturers have benefited from Eureka! Winning Ways, a scientific method for generating and testing new product ideas. Local manufacturers have experienced notable success with the method.

When Joe Carlson of Lakeside Manufacturing was looking for a reliable method to develop product ideas, he called on WMEP for help. “By using the Eureka! Winning Ways process, I estimate that

our product development time has been reduced by one-third, and the costs have also been greatly reduced. Eureka! Winning Ways allows us to focus on the right stuff and has

made us smarter about what to do, and what not to do.”

WMEP Responds to the Need for Improved PerformanceThe Wisconsin Next Generation Manufacturing Study highlighted the need for improvement in many critical performance areas. To respond to those needs, WMEP has developed new services to address the growth and business transformation challenges of Wisconsin manufacturers. WMEP offers the strategic support manufacturers need to strengthen their entire business in the process of becoming a Next Generation Manufacturer. Just a few of the ways WMEP is responding with new services are described below:

Manufacturing Matters! 2009 WMEP encouraged Wisconsin businesses to “reach for the future” by embracing the principles of Next Generation Manufacturing at its annual conference May 19th, 2009 in Milwaukee.

Keynote speaker and author Tim Sanders made the case for sustainability to manufacturing leaders in attendance. “A common misconception about sustainability is that it costs too much,” said Sanders, “but when done right, sustainability is free.” He offered compelling examples of manufacturers that obtained substantial savings through sustainable practices.

A high level of attendee satisfaction

Despite challenging economic conditions, Manufacturing Matters! 2009 delivered high quality, robust content timed for maximum impact. Evaluations revealed high levels of satisfaction with the Sanders keynote and the many workshops focusing on business transformation, export opportunities, lean manufacturing and growth strategies.

Leadership for the Next GenerationLeadership for the Next Generation Strategic Al l iances

Strategic Alliance Promotes Wisconsin Exports

WMEP and the Wisconsin Department of Commerce have agreed to combine resources and expertise to help

small and midsize manufacturers assess and develop their export potential. This initiative will accelerate the delivery

of Department of Commerce export services to WMEP’s large network of client firms and other manufacturers across Wisconsin. The effort will target manufacturers with outreach that includes

personal contacts, public workshops and other communications aimed at building awareness, knowledge and capabilities.

Wisconsin Manufacturers Encouraged to Seek Global MarketsWisconsin manufacturers have considerable opportunity to leverage international sales. For example, 77% of manufacturers surveyed in the Next Generation Manufacturing Study report that sales outside the U.S. have grown by less than 25% over the last three years; 7% of firms report non-U.S. sales growth of 51% or higher. Nearly two thirds of Wisconsin manufacturers (63%) reported they have no sales or distribution facilities beyond U.S. borders. Exports offer tremendous opportunity. All of the major emerging markets for manufactured goods are outside of the United States, and WMEP is committed to helping Wisconsin manufacturers enter and thrive in these markets.

Strategic Alliances Increase WMEP’s ReachWMEP recognizes that an expansion of service offerings for Wisconsin manufacturers can often best be accomplished through strategic alliances. Coupling WMEP’s customer reach and quality focus with a key provider brings the best of all worlds to Wisconsin manufacturers. A prime example of such a strategic alliance is the recently announced partnership with the Wisconsin Department of Commerce’s Bureau of Export Development.

Humane Manufacturing—Export SuccessHumane Manufacturing of Baraboo has leveraged the resources of Commerce’s International Division to develop and grow its global sales over the past few years. Donna Wilkinson, Vice President and Director of National & International Sales notes:

● Prior to 2006, Humane’s average yearly international sales ranged from $75,000 to $150,000

● Sales for 2007 more than doubled to $400,000

● Sales for 2008, were over $700,000 despite the recession

● Sales for the first 8 months of 2009 are already at $500,000

● Over the last 3 years, Humane has sold product in 31 countries

● Since 2006, 23 international dealers have been established

“There are tremendous opportunities in international trade for Wisconsin manufacturers. By working with WMEP, an organization with a proven track record of helping manufacturers compete and win, we can reach more state manufacturers who may not know of the great potential that exporting holds.”

—Richard J. Leinenkugel,Secretary, Wisconsin Department of Commerce

Success Stor ies

The Medalcraft Mint Leverages WMEP to Build Strategic Advantage

In 2007, when Jerry Moran bought The Medalcraft Mint, a private mint founded in Green Bay in 1948, he understood that the business faced significant challenges. Medalcraft Mint’s primary products were die-struck coins, medals and medallions produced by a very labor-intensive process, and the plant was operating at only 50% capacity. The company needed to upgrade its production processes, invest in new technology, and grow its business in highly competitive and diverse markets dominated by Chinese manufacturers.

In short, Medalcraft needed to re-create itself in order to grow. Through his work with WMEP, Jerry Moran learned about the principles of Next Generation Manufacturing and understood that WMEP had the capacity and depth of experience to help his company resolve the strategic issues it faced.

With WMEP’s assistance, Medalcraft successfully implemented processes for continuous improvement on the shop floor and within the office, but needed a methodology to focus on how to grow demand. WMEP introduced Medalcraft to “Eureka! Winning Ways”, a scientific method for accelerating profitable growth. This program provides a framework for developing products that customers want based on customer feedback and market research.

As a result of this effort, Medalcraft now earns $250,000 annually in General Services Administration business and has become a preferred supplier for many federal agencies.

In addition, WMEP’s Don McDonald suggested Medalcraft apply for the federal Trade Adjustment Assistance (TAA) program. The program assists companies negatively affected by import competition. With Don’s help, Medalcraft completed the application process and received $75,000 in matching funds for continued operational and strategic improvements.

Jerry Moran found the Eureka! process yielded more than just idea development, “I learned a lot about my company and my customers.” He’s applied the process to many aspects of Medalcraft Mint to improve processes and diversify markets.

The next step in Medalcraft’s journey of systemic continuous improvement is Enterprise Business Transformation (EBT), a process that unifies and focuses the entire company, improving operational, financial and productivity results. “WMEP has demonstrated its expertise in both tactical and strategic solutions in my business,” said Moran, “I look forward to working with WMEP as I continue to build Medalcraft into an innovative, nimble business that can out-perform the competition.”

Manufacturers Rely on WMEP’s ExpertiseWMEP’s manufacturing specialists provide a unique asset to Wisconsin manufacturers—a wealth of experience and knowledge gained from leading change from within the manufacturing environment. From Lean Services to Enterprise Business Transformation, WMEP’s unrelenting focus is on providing the right support at the right time to help Wisconsin manufacturers become the best in the world. The economic crisis has revealed the need to redefine how manufacturers operate, and WMEP’s experience in driving and implementing change from the shop floor to the executive suite is helping Wisconsin manufacturers become Next Generation Manufacturers—firms that are lean, innovative, flexible and well-positioned to compete globally.

Reliable Plating Uses Lean Manufacturing to Save Money and “Go Green”

Milwaukee-based Reliable Plating Works, Inc., provides decorative nickel and chrome electroplating finishes to a wide range of products. Reliable Plating turned to WMEP to find ways to increase efficiency and reduce energy, waste and raw material costs. WMEP stepped in to facilitate Six Sigma Green Belt training and a Lean and Green value stream mapping project. Though the company had a long history of being a leader in recycling and zero discharge technology, it wanted to take Lean and Green to the next level.

Over the course of the next two months, Reliable Plating launched a multi-pronged attack on waste and inefficiency and implemented measures to reduce raw material usage, air emissions and energy costs. As a result, the $12-million revenue producing firm generated a total savings of more than $1 million. What’s more, company President Jaime Maliszewski says the improvements and savings are helping the company stay profitable during the recession at a time when many other firms are struggling.

“You really have to think outside of the box,” Maliszewski said. “The first thing we discovered was that we had bad metrics that were understating our costs.” Products enter the company’s electroplating machinery on a flight bar, and the labor cost metrics didn’t fully take into account whether the flight bars carried products or were empty. After a careful analysis, the company revamped its heat-intensive plating operation to run three days per week instead of five. That alone sparked a 25% reduction in energy costs for an

annual savings of more than $100,000. In addition, start-up related rejects were reduced by 80% and direct labor costs were reduced by 10%, all while maintaining the same amount of production and sales.

Employees now work 12-hour shifts and 3-day weeks, enjoying fewer commutes, more time with their families and lower daycare expenses.

The firm’s biggest expense is nickel, which typically costs from $3 to $5 per pound but shot up to more than $20 a few years ago, sending shockwaves through the industry. A recently trained team of Six Sigma Green Belts tackled the issue of reducing nickel waste in the plating process, generating a savings of 14%, or $200,000 a year. The company is proud to have four Green Belts in its ranks, Maliszewski said.

Reliable Plating’s adoption of Lean and Green strategies are a strong competitive advantage in the marketplace. “When customers see you’re doing things smarter and better they have more confidence in using you as a supplier; they know you’re proactive and that you’ll be around in the future.”

Lean and Green is here to stay, he says. “Companies who don’t take this seriously are going to be pushed out. Looking back, I’m not sure we’d be in business today if we hadn’t started on this path.”

Par tners

WMEP works closely with many public and private organizations to bring world-class resources to Wisconsin manufacturers, including:

Economic Development OrganizationsWMEP partners with economic development organizations to promote the growth of strong statewide and regional manufacturing economies.

Labor OrganizationsWMEP works with the state AFL-CIO, industrial labor leaders and management to promote systemic continuous improvement within Wisconsin companies.

National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership

WMEP accesses the extensive national network of MEPs to provide support for suppliers outside of Wisconsin and leverages NIST’s powerful research and business programs to assist local manufacturers.

Northwest Wisconsin Manufacturing Outreach Center (NWMOC)

WMEP’s partnership with NWMOC, its sister center at UW-Stout, allows MEP services to be available throughout the state.

Private Manufacturing Service ProvidersWMEP works with private providers to supplement services in areas such as information technology, environmental compliance, plant layout and more.

University of WisconsinWMEP helps match university resources with the needs of manufacturers. For example, WMEP partnered with the UW E-Business Institute to help suppliers develop e-business capabilities.

Wisconsin Technical College SystemTraining from Wisconsin’s technical colleges combined with WMEP’s hands-on assistance delivers strong results to manufacturers.

Wisconsin Department of CommerceWMEP and has built a strategic alliance with the Bureau of Export Development to help manufacturers enter the global marketplace.

WMEP Helps Build a Better Manufacturing Community in Wisconsin“I think manufacturing in general in Wisconsin is very important. We now have the highest percent of employment in manufacturing in the country, and I think a strategic initiative for the state should be how can we encourage our state to keep and build on that leadership. This strategy should span from education, to transportation, to tax policy. It must also include WMEP continuing to bring high level manufacturing consultation to small and medium size businesses. WMEP’s experience across multiple industries is indispensable as it relates to how effective our manufacturing community can be here in Wisconsin.”

— Michael Katz, President, Molded Dimensions, Inc., Port Washington

I mpac t & Financia l Data

Nearly $1 Bill ion in Economic Benefit Over 5 YearsDuring the past five years, WMEP-assisted manufacturers reported impact of nearly $1 billion – $977 million – with 7,965 jobs created/retained. WMEP provided services to 676 state manufacturers last year.

Public funds invested in WMEP improve the competitiveness of Wisconsin manufacturers, drive economic growth, leverage federal dollars, generate higher state tax revenues and protect high-wage manufacturing jobs.

$118 M$17 M

$29 MInvestment

Impact

Cost SavingsIncreased/

Retained Sales

Dol

lars

$10,000

$8M

7M

6M

5M

4M

3M

2M

1M

0

$1,157,000

$2,378,000

$8,000,000

State Dollarsper Job

StateInvestment

Federal Dollarsto Wisconsin

AdditionalState TaxRevenue

Economic Impact

Return on State Investment

Getting ResultsSince 1996, WMEP has provided assistance to more than 3,600 small and midsize manufacturers to help them improve their productivity and profitability.

WMEP delivers on its promise to generate an exceptional return on investment for Wisconsin’s manufacturers and taxpayers. We understand resources are scarce and that our customers and public investors deserve the maximum return for their dollars.

The impact of our work with state manufacturers is measured and tallied quarterly. Over the past year, manufacturers reported an economic impact of $164 million as a result of their work with WMEP.

Return on InvestmentWisconsin’s investment in WMEP leverages more than $2 million in federal funding to provide an estimated $8 million in additional state tax revenue from increased and retained sales. This year, 2.1 federal dollars were received for every dollar invested in WMEP by the state of Wisconsin. WMEP-assisted manufacturers reported 798 jobs created or retained during FY2009. These 798 jobs produced an estimated $10,000 of state revenue per job.

Total: $164 Million

WMEP helped Wisconsin manufacturers create or retain 798 jobs in FY 2009

Wisconsin Manufacturing Extension Partnership

2601 Crossroads Drive

Madison, WI 53718-7923

877.856.8588

www.wmep.org