Manufacturing matters of survival
Relentless innovation keeps American manufacturers ahead of the global curve.
When we think of innovation today, we think of the information technology industry, but American manufacturers still account for most of the innovation that takes place in the private sector. The U.S. Department of Commerce’s Bureau of Economic Analysis reports that American manufacturers, who are constantly innovating to stay competitive, perform nearly 58% of all private-sector research and development.
Manufacturers drive more innovation than any other sector and the digital age appears to have accelerated it rather than diminish it, as the BEA also says R&D in the manufacturing sector rose from $132.5 billion in 2000 to $295.7 billion in 2020. With no end in sight to the labor shortage, manufacturers also engage in relentless innovation to manage a declining pool of skilled workers with automation, notes Kurt Bauer, president and CEO of Wisconsin Manufacturers and Commerce.
“Simple manufacturing, like assembly, has mostly been off-shored, and what’s left in the U.S. is advanced manufacturing, involving complex and often proprietary processes,” says Bauer, who notes that most manufacturers are so protective of their own innovations they won’t allow cellphones with cameras on their shop floor. “Today’s manufacturing looks like the information age has merged with the industrial age.”
Dane County may not be known for manufacturing, at least not to the same extent as the Fox River Valley or metropolitan Milwaukee, but there are a surprisingly large number of them here. In recognition of the fact that October is Manufacturing Month in Wisconsin, we talked to prominent Dane County manufacturers about their approach to the innovative process.
Evco Plastics: Innovation takes many forms
Whether or not it’s the company motto, EVCO Plastics notes that it’s a company where innovation takes form, and those forms are made possible by a time-honored manufacturing process known as custom injection molding.
The DeForest-based company is a contract manufacturer, which is a manufacturer that contracts with other companies to make components or whole products. The company uses custom injection molding to help express the innovation of its employees, so the process could be considered a tool of innovators in much the same way that a voice is the tool of vocalists, and a brush is the tool of painters.
Custom injection molding is a manufacturing process for producing parts by injecting molten material into a mold. At EVCO, that material is various forms of thermoplastic, but in other manufacturing plants it could be metal or glass. Thermoplastics are polymers — large-molecule substances with a broad range of properties — that can be melted, frozen, and then remelted again almost indefinitely.
Dale Evans, chairman and CEO of EVCO Plastics, notes that people have been using molds to produce products for thousands of years, but injection molding takes the process to a higher level. “What we do in injection molding is inject a molten plastic at high pressure into a metal mold, and the mold cools the plastic into the shape that we require,” Evans explains. “The mold opens, we move the part, and we hopefully have little or no operations needed after that, if we’re really doing it right. That’s the big trick of doing this.”
The real innovation comes from EVCO employees because there are several considerations in terms of the design of the molds and the design of the automation associated with them. There are at least 20 generic plastics, but by the time various blends and additives are included, generic plastic can become thousands of different materials. During Evans’s tenure, EVCO has developed about 7,000 different products, and most of them are the result of staff creativity.
“You must design them first for the environment they are going to be in,” Evans notes. “Is it cold? Is it hot? Are the chemicals we use related to that? You’ve got to design the product and select the material to suit their environment, and then you must look at how the thing is going to break. What’s going to break it? How do we put things in place so that doesn’t happen?
“But our innovation comes from the people side of things. The form is basically how we do it.”
An example occurred 20 years ago when in-mold decorating became a thing. “In that process, you print labels, put pictures on them, have a robot put those into a mold, then you mold the molten plastic against it, and it all comes out in one piece,” Evans explains. “So, that was back 20 years ago when we did a lot of that. We were ahead of the game on that. There are different technologies you use to make better parts.”
Innovation also requires different staff expertise because Evans insists that there be a certain level of difficulty in everything the company does. If there isn’t, any manufacturer can do it, and so the company offers little in the way of value. That expectation can cause occasional staff grumbling, but in the end, it sets a manufacturer apart — especially when you play to your employees’ strengths.
EVCO has different plants for different purposes, including its Advanced Molding Plant (AMP) in DeForest and its Medical and Electronic Devices (MED) plant, also in DeForest. It also has plants in Oshkosh, Wisconsin and Calhoun, Georgia, plants in Monterrey and Juarez, Mexico, and a plant in Dongguan, China.
“We separate our people to focus on certain industries, so if somebody focuses on the medical device industry, we’re very good at that,” Evans states. “We have another group of people that do the power sport industry, so they know what is required there. So, there are different talents that our people have, and we utilize them.”
Reward systems are part of the motivation. For years, EVCO had a Silver Idea program to reward particularly fruitful ideas, and it applied to anybody, not just engineers and executives. The company started by giving people a one-ounce silver coin for successful ideas (the best idea of the year brought a one-ounce gold coin) but the rewards have transitioned into dollar equivalents. The point was to stimulate everybody’s creativity in making things. “Everybody can have an idea of how we can do things better, faster, and quicker,” Evans notes.
The COVID-19 pandemic forced EVCO, which is in the process of transitioning to a new corporate headquarters, to deploy its staff differently, moving people around to different plants to make products it had orders for. One DeForest plant handles its appliance work, but that business went down 70% at the start of the pandemic, and overall business initially dropped off by one-third, so EVCO went after product it wouldn’t normally go near — hand assembly, for example.
Eventually, the company was fortunate enough to have a couple of customers that made COVID test kits and similar products. At one point, EVCO had 17 machines producing COVID-19-related products for customers ranging from diagnostic components to saliva testing kits, and it maintains those lines of business. It also designed its own face shield.
“At the start of 2020, before COVID hit, we had 630 employees in the U.S.,” Evans notes. “When we started work in 2021, we had 800. We had grown by 170 people in the COVID year. Worldwide, we’ve got about 1,700 employees.”
The use of robots in automation is controversial, but manufacturers are quick to note it can help them manage a labor shortage that isn’t going away, and Evans adds that people aren’t necessarily replaced, just repurposed. “Everybody has this longstanding opinion that when you automate something, you get rid of the people that you used for that purpose,” he says. “Quite frankly, my first job out of college, I automated a process and that was back almost 50 years ago, and we replaced eight people. Now, what did we do with those people? We didn’t send them on the street. We just repurposed them. We put them into other things where we needed people.”
Thanks to the supply-chain disruptions caused in part by the pandemic, the other shortage manufacturers now face is with raw materials, but there are options there as well, albeit more expensive. “Last year, when they had that freeze down in Texas, they shut down a lot of plastics facilities,” Evans notes. “Now, this hurricane [Ida, which hit the Gulf Coast in late August], that is not going to help anybody that manufactures plastic resins, but there are other sources in the world. You can go all over the U.S. and Canada as well, and Europe as well as Asia.
“We had one of our clients that had to get material in here, and we had been air-freighting resin in from Australia, of all places, and that’s very expensive. It at least doubles the price of the resin, but the customer has no choice. We don’t have any choice either.”
Dane Manufacturing: Listening to innovation
Michael Lisle, president of Dane Manufacturing, describes the company as a full-fledged contract manufacturer. As such, Dane’s value proposition is its ability to handle everything associated with production, which minimizes the possibility of supply-chain disruption and helps take the mystery out of where customer costs come from.
According to Lisle, the assets it utilizes in production and the level of skill and knowledge of its employees would be difficult to replicate for all but the largest integrated manufacturers that use a lot of metal in their products. The company offers a continuity of production in which it can take the aggregate machine and commodity needs of a large customer base and apply its assets to meeting those needs.
In describing Dane Manufacturing’s relationship to customers, Lisle cites an old BASF advertising campaign that asserted, “We don’t make the products you buy. We make the products you buy better.” In many cases, Dane doesn’t make the end products that original equipment manufacturers (OEMs) buy, it tries to ensure that their own production lines can make them by having quality parts when they expect them. It does not maintain the brand, marketing, and customer sales relationships, but it does everything else associated with the product — building it, warehousing it to a set inventory level, and fulfilling it to the end customer.
“We don’t get to put our brand on most things that we make,” Lisle explains, “but we strive to make our customers highly successful as an ‘unknown’ organization that stands behind them and helps them win in the marketplace.”
Dane Manufacturing consumes millions of tons of metal, bringing in four or five truckloads of metal every day. For the sake of cost competitiveness, Dane constantly invests in new tools and technology to bring productivity improvements into every program it manages. The company has expensive assets that includes a mix of automation and various machines, and it takes highly knowledgeable individuals to run them all hours of the day. Not every manufacturer has this combination of assets and expertise. “Private jets came to the masses because people could share them at fractional time,” Lisle says. “A lot of our customers are buying fractional time of all the assets we have, and we keep them busy.”
Founded in 1917, Dane Manufacturing has been around for over 100 years, but there is no “signature innovation” that has stood the test of time, just a relentless approach to it. Asked whether most of its innovation comes in the products it produces for others or the processes it uses to produce them, Lisle answers both. “There are inevitably features that a customer brings us that need to be in their product but are very difficult to actually produce at scale,” he explains. “We work well internally, collaborate with them, and collaborate with our partners to determine how we might try an approach that is ultimately successful versus declining to quote or produce. We don’t say yes to everything certainly, but we know that creative solutions to hard problems is a great way to stay out of the business of making widgets that anybody else can make.”
An example of a patented technology is a thermal flow product which is sold to telecommunications companies and data centers. “When there is a lot of heat load, you air condition these telecom cabinets,” Lisle explains. “After a few years, the compressors on air conditioners tend to break down and fail, so Dane created something that provides the cooling potential of an air conditioner using just heat exchange and a fan. It reduces energy spend quite a bit, but you also don’t have a compressor that will fail in the field.
“We took a machine that is likely to fail in three or four years and gave them something that’s likely to last for 10 years safely by using some heat exchange technology and processes that we have in Dane that we couldn’t otherwise produce for another partner.”
Dane’s approach to innovation starts with listening first and includes listening to the people on the production floor. “We listen first,” Lisle explains. “As simple as that sounds, the odds are good that as a customer, prospect, or employee describes a challenge, we can interpret some form of an improvement or idea. We don’t always describe ourselves as an innovative company, but we are a team of individuals that is learning every day. When that’s the norm, you can’t help but innovate and improve along the way.”
As Lisle notes, it’s not hard for a customer to go out and get another quote from a Dane competitor, and the last thing a key supplier wants is to be confronted with an estimate that has “fat” in it. “Discussions of how to do things better by and large come from the production floor,” Lisle notes. “Something might get created in concept with engineering and pushed out to the floor, but inevitably the folks who are doing the work are going to see opportunities to do that smarter. So, they are the ones who will tell us where automation isn’t saving us, so we have to do this instead.”
The company also focuses investments on various X-factors, which are basically things that are rarely — if at all — found in contract manufacturers. Not only does it look for assets with exciting capabilities, but Dane also focuses on those that have significant automation potential. When it teams up with a new customer, it tries to utilize as much automation as possible from the moment it quotes, and only when it rules out the potential for automation with current assets will it pursue manual production.
“We try to collect first-mover advantages as new technologies emerge, and we try and focus on work that is more challenging to do,” Lisle explains. “As those new technologies emerge, we will take existing products we produce and validate if they can utilize these new technologies, and if so, it is far more likely than not that we will be investing in those new technologies years before our competitors.”
Beating them to the punch
Lisle tells the story of CEO Troy Berg’s first piece of capital expenditure when he bought the business. For the first 80 years of its history, the company primarily served the local agriculture industry. It was important for the area, but the outlook was mixed because many of Dane’s legacy processes and products were in danger of being offshored. Berg’s first capital expense was a punch press, which countered the conventional industry capital expenditure at the time — laser-cutting machines. Building the business around punched fabricated parts rather than stampings or laser-cut parts meant that Dane was performing more difficult work and needed a more highly trained staff.
Had the business stood still or selected an easier technology to implement, Lisle believes it would not have achieved the growth it has. “We are proud that the same punch still produces quality parts to this day, and it has many more punching machines alongside it, owing to the legacy of focusing the business around an area that is tougher to master,” Lisle adds.
Customers routinely come to Dane Manufacturing with challenges they’ve experienced with another vendor. Until two or three years ago, nearly all its products started with flat metal rather than tube. It would have been easy to say we don’t work with tube, and we don’t have the knowledge or assets to help you, but that also would have been inconsistent with a company value of always seeking growth and opportunity. So, staff spent time studying the product line, consulted with people highly experienced in the space, and purchased a significant number of assets before its first purchase order associated with tube-based product. Two years later, Lisle says that customer is winning all kinds of orders associated with tube and handrail that they were afraid to sell before partnering with Dane on that product line, but that’s not the end of the story.
“The better we got at tube-based product, [the more] it led to a significant new customer relationship in the last year, and they were referred to us from the original customer that asked us to take on their tube metal challenges,” Lisle says. “A choice to learn and grow from three years ago created more diversity for our business and is another seven-figure business line.”
Contract manufacturing is considered a form of outsourcing, but the COVID-19 pandemic and the supply chain disruptions it caused has resulted in the reversal of the trend of off-shoring. This is where a commitment to constant innovation gave Dane a competitive advantage because the pandemic took and gave from a business development standpoint. “It was a challenge because when your customers are closing due to mandates or to outbreaks, you are not going to be shipping product to them, but you’ve made commitments to your own suppliers and employees to maintain purchasing levels, hours, etc.,” Lisle states.
“It did also create some opportunities for us,” he adds. “Before COVID really hit this country hard, it was beneficial that there was so much manufacturing capacity abroad that this country relied on. When boats and planes weren’t coming to our country in February and March of 2020 before the virus got bigger still, a number of companies rethought very quickly the maintaining of exclusively foreign supply. In the year and a half since, we’ve seen a number of reshorings taking place to improve supply chains.”
As a result, there were additional new product innovations Dane participated in, more around hygiene than personal protective equipment (PPE). The company has helped a very large multinational company with some new product innovations bring mobile handwashing and hygiene stations out of the restroom and into event spaces, common areas, and production floors. According to Lisle, that went from a concept to a prototype to a production volume within a matter of weeks, and it remains a scaling opportunity.
“I don’t think many manufacturers would have taken this on quite the way we did — having the nimbleness of a small company, the engineers on staff to support it, and the scale of our production engine and space to produce a large-format product like this.”
Exact Sciences Corp.: Adding more exacting science to the mix
Exact Sciences Corp., the Madison-based molecular diagnostics company specializing in the detection of early-stage cancers, is best known for Cologuard, the first stool DNA test for colorectal cancer. But less known is the molecular diagnostics company’s focus on innovation, particularly since Cologuard’s 2014 launch, and much of it is internal-process innovation in its Madison laboratory, located at the company’s Discovery Campus.
This aspect of the business is led by Abby Ngampongsai, vice president of laboratory automation and services. Her team has implemented a series of enhancements to the processes in the company lab, most notably the automated mixing station that replaced a semi-manual process akin to a paint mixer at a home improvement store with a robotic arm and automation. “If you walk into Home Depot, that’s how we used that before,” Ngampongsai explains.
Cologuard received FDA approval in 2014, and since that time more than 6 million Cologuard tests have been completed. The automated mixer improves the efficiency of an especially important step in the Cologuard handling process.
With Cologuard, which is available by prescription only to screen adults 45 years of age and older who are at average risk for colorectal cancer, samples can be collected in the privacy of the home. The product looks for altered DNA and/or blood in the stool that could be caused by a precancerous polyp or colon cancer, and this is where Exact Sciences Laboratories comes in. The lab processes all Cologuard tests but before a result is delivered, a sample goes through a multistep process to prepare it for analysis. One of the most important steps is the addition of a saline-like solution called “buffer,” which is blended with the patient sample to ensure consistency for subsequent steps of the lab process.
Before the automated mixing station was designed and built — with the help of the Exact Sciences research and development team and Isthmus Engineering in Madison — mixing the buffer and patient sample together was a semi-manual process, requiring lab staff to manually move samples into mixing machines. The manual process came with some injury risks to the lab staff (pinched fingers, bumps, and bruises caused when lifting or closing the lid), and as Cologuard gained more traction in market, a more efficient process was needed.
Together, Exact Sciences and Isthmus Engineering created a custom mixing station centered around a robotic arm. In so doing, they automated a repetitive, ergonomically challenging task and streamlined laboratory throughput. These patient sample containers flow via conveyor belt down to the robotic arm, which can mix 24 samples at one time, and then it’s put right back on the conveyor belt line to keep it flowing through the lab.
The automation has not resulted in workforce erosion. It’s quite the opposite, as Exact Sciences is hiring lab employees because the combination of adding humans and adding machinery increases overall lab capacity. The company continues to work with local companies such as Isthmus Engineering and Big Sky Engineering to build automation tools, but the genesis of the automated mixer came around 2017, when Ngampongsai and her team were looking for more efficient bang for the buck.
In addition, the automated process keeps people at the heart of the lab process. Lab staff are still needed to monitor the four robots assigned to this task, but now they can focus on process flows and higher-level work. The lab team still monitors the automated process, but there is more time for upskilling and other aspects of staff development.
“With the old mixing station, we had six to eight people standing in line,” Ngampongsai notes. “Now all those people, now that we are putting in automation, they now can work on other things.”
Promega Corp.: Building on an innovative past
State-of-the-art buildings have a way of being transformative, but can Promega’s Corp.’s new Kornberg Center make an already innovative company even more so? The 280,000-square-foot research and development facility was designed to accelerate scientific exploration, and given the company’s productive history, that might seem like a tall order, but the facility is named for Nobel Prize winning scientist Arthur Kornberg, and one of its key occupants is already inspired by it.
Poncho Meisenheimer, vice president of research and development for Promega, considers it a catalyst that inspires inventive thinking. With a four-leaf clover architectural design, it features a spectacular four-story atrium, expansive windows that connect it with the natural environment, four laboratory wings that extend out as the four “leaves,” and wooden walkway bridges that connect the four quadrants.
It might seem like a luxury for a company that has produced more than 4,000 products that allow scientists to conduct experiments in gene, protein, and cellular research, but committing to innovation is a never-ending process. As a biotech firm with a manufacturing function, Promega’s innovation comes in several forms. “As much as I’d like to say it’s all innovation because I bleed R&D, it’s very largely based on our manufacturing and quality processes,” Meisenheimer says. “When you look at what we’re trying to do for our customers, we’re trying to make their scientific pursuits easier, with higher confidence in the data, and with more reliability.”
Promega’s products can be placed in three buckets — forensics, biological isolation and analysis, and illumination. Forensics is about identifying humans and aiding criminal investigations that show which humans were present at a crime scene and which suspects can be ruled out. Biological isolation and analysis played a role in Promega’s COVID response because it was about isolating the RNA from the SARS-CoV-2 virus and analyzing it. Meanwhile, Promega is observing its 30th year of making bioluminescence products that aid drug discovery by identifying small molecules, small proteins, or small antibodies that affect the biology of a cell by either inducing a repair mechanism or suppressing a malicious disease state.
Promega’s customers include academic, pharmaceutical, and clinical labs. “Our customers just want to know how their therapeutic molecules impact a cell, whether it be a cancer cell or a normal human cell,” Meisenheimer notes. “Then we come in and we say, ‘OK, we know our customers want to see how their drugs are impacting these cells, and all we’re going to do is create a system that gives off light. Basically, it’s a microscopic Hollywood stage where we are illuminating what is going on inside of a living cell.”
The company’s approach to innovation is about blending two things. On one side, it’s about finding ways to support the individual scientific and emotional passion in a person. On the other side, it’s to provide transparency into what the problems are because scientists will solve problems wherever they can. “That’s what they do, and that’s what they love,” Meisenheimer states. “If you can get the customer’s unmet needs, their fundamental problems and make that transparent to the scientist … inevitably the scientist will figure out a way to solve these problems.”
The Kornberg Center could take it a little bit further, he adds, because it’s also about catalyzing a creative, nonnormative environment. “I say nonnormative as this unusual way of looking at things so that it’s nonincremental,” he explains. “Creating this container that makes you think a little different, and there is a very important reason for that.”
That reason is the patents secured for Promega’s products. Patents are only earned on discoveries that are both novel and nonobvious. If you discover something that the U.S. Patent Office deems as an incremental step, no patent will be granted. Since patents are a fundamentally important aspect of Promega’s innovation, creating such a unique building could help its occupants think outside the box.
“That’s how I see Kornberg and why we invested what we invested in it, and why it looks the way it does, and why it’s so profound and beautiful and even kind of ominous and terrifying,” Meisenheimer states. “When I say that, I mean it from the standpoint of, ‘Yeah, you are really held to a much higher energy state where you think of things very differently.’ Everyone who’s in there will say, ‘I need to think of things differently in this building.’ That’s why I like Kornberg.”
Madison-Kipp Corp.: The aluminum die is cast
Madison-Kipp is known for aluminum die casting, which made for an easy transition for Vice President of Sales and Marketing Scott Sargeant, whose professional background started with injection molding. The similarities between injection molding and die casting are many because they both take something and put it into a molten state, then cool it and extract it.
In the case of Madison-Kipp, which makes products and parts for the automotive, recreational, and lawn and garden industries, molten metal is injected at high pressure into a mold. Then it’s cooled, extracted, trimmed, and turned into a finished aluminum component — an engine part, a structural part, or other part.
With lean production systems, automation, and a “SmartWay” continuous improvement process, Madison-Kipp stays ahead of the innovation curve. The 123-year-old company has several unique processes — including loose-piece inserts and insert molding — that serve engine applications and give it a competitive advantage.
At Madison-Kipp, innovation also is driven by the interface of two groups — a design engineering group and a process engineering group. An example of their collaboration came with 3D printing, which the company uses to produce cooling cores. “We can put water lines in these cores, and we use that to cool the die, and because of the ability of 3D printing, we’re able to print a nontraditional shape, so we’ve been able to do things from a cooling perspective that we couldn’t do in the past,” Sargeant says.
“For us, there is not a lot of scientific research going on,” he adds. “We see a need, and an application, and an opportunity, and that’s where our efforts are focused.”
Within a few years, the company could have an active role in supplying the manufacturers of electric vehicles. “It’s certainly an area that we’re looking at very closely, and we’re starting to transition into some hybrid applications where you have both an internal combustion engine, whether it’s an electric battery or some type of hybrid electric application,” Sargeant says. “But we’ve been talking to some of the EV startups and looked at that business.
“What we do aligns very nicely with that, just because of the characteristics of aluminum — the cooling properties, the attributes that they need from a weight-reduction perspective, as well as the heat transfer characteristics of the material itself, which really benefits applications for battery housings and keeping those batteries cool.”
During the pandemic, the importance of remote monitoring capabilities was reinforced. “We now have the capability to process, monitor, and adjust remotely, so if off-shift issues happen, we can immediately be aware, understand, monitor, and potentially impact those processes even in a remote perspective,” Sargeant explains. “When your salaried people are out for the evening, and you have a catastrophic failure on the first shift — which is an overnight shift for us — they can see that process, monitor it, and adjust it.
“Within the next year, all processes will be capable of being monitored remotely and have some level of process adjustment,” he adds. “That’s going to be a significant milestone for us.”
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