From Pops to Pipes: The State of Manufacturing in Minnesota
From an economic standpoint, the manufacturing sector in Minnesota appears to be booming. Manufacturers across the state are expecting record revenues, profitability, and investment within their companies this year, according to Enterprise Minnesota’s 2018 State of Manufacturing survey. The challenge looming in the background, however, is a workforce shortage that could easily impede future growth.
To learn how manufacturers are keeping up with new technologies and planning for the future, Twin Cities Business hosted its annual Manufacturing Forum on June 26 at the Metropolitan Ballroom in Golden Valley. The forum was moderated by editor in chief Allison Kaplan and sponsored by RSM.
Joining TCB as panelists were Erik Brust, co-founder and CEO of JonnyPops, a St. Louis Park-based popsicle manufacturer; Michelle Daggett, president of Lakeshirts, a Detroit Lakes-based custom apparel decorating supplier for the resort and college markets; Bill Gray, president of Uponor North America, an Apple Valley-based manufacturer of polyethylene (PEX) pipe used in plumbing, fire sprinklers, and radiant heating and cooling systems; and Tom Sega, president of Duluth Pack, a Duluth-based leather and canvas bag maker.
What follows are edited excerpts from the forum categorized by topic.
Bill Gray: Our manufacturing processes uses a fairly old extrusion technology, essentially you take plastic resin, melt it and sculpt it into a pipe shape. We just opened a second manufacturing plant in Hutchinson. We originally set a goal to manufacture 1.4 million feet of pipe by July 1, we are over 5 million now, so we’ll have exceeded that goal by about 4-times.
Michelle Daggett: We’ve come a long way from our co-founders Mark and Mike’s plywood printer. Now we have 48 automatic presses and 32 multi-head embroidery machines. We’ve added new products, such as stickers and magnets, over the years. We have a wide breadth of designs—over 100,000 in stock—and we develop about 10,000 designs a year. The internal systems we’ve developed on our IT side provide up-to-date metrics that give employees an indication of how they are doing for the day.
Tom Sega: We still handmake everything that we manufacture. We are a cut-and-sew shop, we do leather and canvas cutting, sewing, and riveting. We have about 300 designs that we make and about 3,000 SKUs. Our challenge going forward is to keep up with demand. A lot of the cut-and-sew technology and business has gone overseas, so we need to implement our own manufacturing training.
Bill Gray, president of Uponor (left), and Tom Sega, president of Duluth Pack. (Photo by Adam Bettcher)
Daggett: About four years ago we added a weekly quality meeting, where departments heads from every area of the company meet to discuss and assess returns and mistakes that involved 12 or more items. When we first started our lean journey, we thought that everything was about faster setup, but what we found out was that a lot of issues that we were encountering weren’t production related. The first year that we implemented the quality meeting we cut our errors in half.
The importance of being American- and Minnesota-made
Sega: First of all, our city name is in our product name: Duluth Pack. We are the oldest canvas and leather pack and bag maker in the U.S., and it’s our 136th continuous year in business in Duluth, so making it here is the core essence of what the company is about.
Daggett: We do all of the decorating in our facility in Detroit Lakes and that’s important for speed. You need to be able to order on a Monday what you sold out of on the weekend and get it back by the next weekend. If you are ordering from overseas, not only could you be looking at higher minimums, but also a 12-week lead time, and when you are trying to stay in stock with your best-selling designs, that just doesn’t cut it.
Erik Brust: Today’s consumers are looking for local product, so being located in Minneapolis and that being our initial market was how we were able to get off the ground as quickly as we did. We certainly have a real sense of identity here in Minnesota.
Gray: The worry that I have is that we are very dependent on the construction market. If you start messing with the costs of projects and they don’t pencil out, then they don’t start. I think we have a really good thing going in the economy right now, and I haven’t seen a good economic argument for what is taking place with tariffs.
Daggett: We look for advances in technology in areas that are the most time-consuming or for positions that are the most difficult to fill. It’s not that those employees will be displaced, their position just changes. The equipment makes certain jobs easier and more desirable.
Brust: The technology that we are really investing in is IoT. We’ve been able to map our entire production floor and make it more understandable as to what a good day looks like versus a bad day.
Erik Brust, co-founder & CEO of JonnyPops, and Michelle Daggett, president of Lakeshirts. (Photo by Adam Bettcher)
Talent attraction and retention
Gray: It’s still a challenge to find people who know that manufacturing is an option and that’s not the dirty factory work that’s depicted in old movies. Part of it is changing the nature of the work so that you can attract a larger percentage of the population, such as changing lifting requirements or adding flexibility options, and the other part is getting kids into the plant for tours, so that they see exactly what this work looks like—90 percent of it is getting people through the door.
Daggett: We’re pretty fortunate in that you can actually wear flip-flops and T-shirts to work. We also handed out over a million dollars in profit share last year to employees, and we’ve been doing more about getting our name out there through tours and community outreach. We have over 60 artists on staff and for a while we were struggling to find artists. What we found after inviting colleges in for tours was that they had no idea that we existed. They said, “we would have been referring students to you all the time had we known that were here.”
Brust: The way that we are able to be successful and grow fast is by cross training our employees. We work closely with HR to make sure we are investing, training, and making sure they feel a part of what’s going on by communicating what our vision and goals are.