By helping small and mid-sized manufacturers implement new strategies, production techniques and cost-saving technology, the Illinois Manufacturing Extension Center says companies it worked with will realize about $450 million in sales, costs savings and employment gains in fiscal 2006.
IMEC said it worked with 450 companies last fiscal year, who reported, on average, the technical expertise and coaching provided by IMEC will help them increase or retain sales by $1.3 million, cut operating costs by $231,000, increase capital spending by $535,000, and create and retain 11 jobs.
Rising costs, along with imports from low-cost foreign producers, are forcing manufacturers to dramatically alter how they operate, and when they can’t increase prices to offset some of those costs, they need to operate at their highest level of efficiency.
“As an example, many more companies have begun to embrace Lean Manufacturing,” said Bob Weinstein, IMEC’s President. “The quicker the product goes from raw material to shipment, the more companies will make.” IMEC conducted 188 process improvement projects utilizing lean techniques last year, and the companies involved reported a 228-to-1 return on their investment in IMEC’s assistance.
While margins for highly repeatable commodities have eroded, some manufacturers are developing niche products and services, the group noted. Smaller manufacturers, meanwhile, are realizing they can compete globally by providing design support, logistics, packaging and other value-added components that customers will pay for.
In fiscal 2006, IMEC also collaborated with larger manufacturers to help their suppliers improve performance. The group managed Boeing’s Illinois Supplier Training Program, worked with Deere and its suppliers, and continued working with suppliers to Caterpillar.
The non-profit IMEC is funded by the Illinois Department of Commerce & Economic Opportunity, the U.S. department of Commerce, and service fees.