Annual Report & Capabilities

manufacturing improvement specialists

2012

Dear Clients and Friends:

Despite the continued challenging economic climate, Illinois is replete with manufacturers making tremendous strides to strengthen, retool, compete, and become the next generation of manufacturing. From traditional industries that remain the core of our manufacturing strength to emerging sectors that are important for our future, the evidence is strong that Illinois manufacturing can and will remain vibrant.

IMEC has been strengthening and retooling itself in order to better serve the needs of these next generation manufacturers. We are focused on serving as a catalyst that helps transform this great state of manufacturing. We know effective partnerships and expanded services are essential to accomplish this.

We are proud of our many strategic partnerships and are appreciative of the support from so many collaborators. We particularly want to thank the Department of Commerce and Economic Opportunity (DCEO), the City of Chicago Department of Housing and Economic Development, and the Illinois Community College Board for their commitments to strengthen our collaborative efforts. And, as is true since the beginning of IMEC, we remain tremendously appreciative for the deep commitments of our university partners that have been a foundation of achieving our mission.

Expanding our service offerings is necessary to fully support manufacturers facing today’s complex global economy. This year we strengthened our ability to deliver operational excellence results in new areas such as quick response manufacturing, continued to lead a national MEP supply chain initiative, created innovative capacity within a continuous growth model, rolled out an approach to sustainability that simultaneously improves the bottom-line and the environment, as well as talent development models to ensure long-term success. Additionally, we have built our capability to support transitions of ownership and related succession planning.

We remain committed to developing and refining a full range of integrated solutions that help Illinois companies compete and win in the next generation of manufacturing. This annual report celebrates the success of Illinois manufacturing and showcases the steps that selected IMEC clients took to remain productive and globally competitive.

Sincerely,

David Boulay, Ph.DIMEC President

Daniel SchuellerIMEC Board ChairmanPresident - Brad Foote Gear Works

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POINT OF PRIDE, RICH IN TRADITION

CHOICE TO CELEBRATE

PLATFORM FOR ECONOMIC SUCCESS

Visit www.imec.org/Made-In-Illinois.cfm to create your profile!

OPPORTUNITY TO CONNECT AND COLLABORATE

We initiated “Made in Illinois” to recognize our local manufacturers, their capabilities, the jobs they create and the opportunity to buy and to collaborate

with locally made goods. Since our launch in Spring ‘12, we have welcomed more than 75 companies as participants. Now it’s your turn...join the conversation and show what being “Made in Illinois” means to you!

Made in Illinois Program

The IMEC Advantage

We are committed to providing a return on investment. On average, every dollar invested in IMEC’s assistance

generates twenty dollars in client sales, cost savings and productivity improvements.* We have ongoing discussions with clients to determine if we are achieving the objectives desired and that even one year later these returns are still being realized.

*Based on three-year average

IMEC strives to be a recognized leader in driving manufacturing competitiveness by maximizing your company’s value through next generation approaches that improve the top-line and bottom-line.

$28,000average workforce investment

2,252jobs createdand retained

992

$722,000 $218m

553

companies served

technology/equipment spending per client

$8,500 average project cost

value-added services and projects

retained salesper project

aggregate impact

$167k

5*Non-voting

We link your long-term plans and related goals with on-site implementation services by identifying performance gaps, solving

these gaps, and building a culture to support sustained improvements. We help optimize operating capacity, implement advanced product and process innovations, increase sales and enter new markets, and improve profitability.

IMEC customizes every solution to address the client’s specific needs, uses training to transfer knowledge and skills to the client’s employees, and serves as a mentor and coach to sustain success.

BUSINESSDEVELOPMENT

Chris BlumhoffDavid Otto

Jenny McKinneyJim BrowningJohn SchaeferLinda Green

Melissa BasaMike WaightRoger Shrum

Steve BosworthSteve ParsonsBoard of Directors

Brad AlbrechtBudnick Converting

Jim HaleyIllini Wire Works

Jennifer KalasIRMCO

Scott KelleyPlano Molding Company

Daryl LindemannIllinois Valley Plastics

Richard LouisTurner Electric Corporation

Representatives to the Board*

Gary AnnaBradley University

Larry DanzigerUniversity of Illinois Chicago

Lisa FreemanNorthern Illinois University

Kyle HarfstSouthern Illinois University Carbondale

Phill WadsworthNIST-MEP

MANUFACTURINGSPECIALISTS

Dennis MorrallEd Huey

Eric DanielsonGreg Thompson

Jim PapeJohn Remsey

Mark BaerMary HallockRick Winkler

Shankar AnantSherri SchulzTom Babin

ADMINISTRATIVE

Kathy TunneyAsst. Director,

Information Systems

Lori AmermanOperations Coordinator

Sandy FlynnAdministrative Assistant

Shannon ShrumAccounting & Grant

Specialist

Sue KnappAdministrative Assistant

LEADERSHIP

Amy FitzgeraldMarketing Manager

David BoulayPresident

Michael MonahanVP, Finance &

Information Systems

Rob McCannBusiness Development

Manager

Steve BarnhartService Delivery

Manager

The IMEC Team

Larry MeeskeDeere & Company

Patrick MurzynCaterpillar Inc.

Dan SchuellerBrad Foote Gear Works

Joe ShiverHamilton Sundstrand

Vince TappelBoeing Defense Space & Security

Jeff TownsendEclipse Inc.

Gerry WappelhorstRetired

Ed WolbertTransco Products

Craig ZoberisFusion OEM

MEP Center Affiliate Location

Park Ridge

Effingham

Chicago

IMEC State and National NetworkIMEC specialists have an average of 18 years manufacturing experience and are strategically positioned across the state. To ensure the right expert is focused on the solution, IMEC also utilizes Illinois-based public and private sector resources, as well as expertise from a national network of more than 2,000 consultants from affiliated U.S. Department of Commerce, NIST Manufacturing Extension Partnership (MEP) centers.

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Unleashing and aligning employee expertise with strategic objectives.

• Strategic Planning• Succession Planning/Transition of Ownership• Leadership Development• Supervisor Effectiveness (TWI)• Organization Change• Safety and Health

Guiding supply chain strategy through a focus on the total cost of ownership, reduced risks and constraints, and overall global integration.

• Strategic Sourcing• Risk Mitigation• Capacity Planning• ERP/MRP

Achieving profitable growth by differentiating products and services, pursuing customers in non-traditional markets, and deploying advanced technology and business processes.

• Sales/Marketing/Diversification

• Product Development and Prototyping

• Innovation Engineering• Export

Reducing the environmental footprint while improving operational performance.

• Energy Management, including ISO 50001• E3: Economy, Energy, Environment• Waste Reduction

Driving an integrated approach to eliminate non-value added processes, contain operating costs, and deliver impeccable product quality, with zero defects.

• Lean Enterprise• Quick Response Manufacturing• Quality Management• Six Sigma

Advanced Talent Development

Supply Chain Growth & Innovation

Green Manufacturing

Continuous Improvement

IMEC Services and Capabilities

Sycamore • 40 employees • www.skhandtool.com

Manufacturer of high quality hand tools for the automotive maintenance and industrial sectors

In the past, I’ve dealt with consulting services that want to come and tell you what you need to do, but sometimes you already knew that, you just didn’t have the resources to get it done. IMEC helped with both the expertise side of the equation, but also helped with the actual manpower to implement the improvements in the facility.

SK Hand Tool

SituationSeeking diversification opportunities, Ideal Industries of DeKalb County sought to acquire a company in a complementary industry. Ideal leaders learned that Chicago-based SK Hand Tools was filing for bankruptcy, and Ideal became the only United States company to make a bid for SK’s assets. The four other bidders, located in Asia, wanted to acquire the SK brand name and customer list and move the work offshore.

IMEC SolutionIdeal was ultimately awarded the bid and engaged IMEC to help initiate a start-up operation to build hand tools for the automotive maintenance and industrial sectors. Company leaders drew on IMEC’s strategic advisement to aid in the selection of a location, decision on adaptation of an existing facility vs. a greenfield site, and all aspects of the design, layout and optimization of a newly re-constituted SK Tools operation. Here’s the catch: The entire process, from construction of the 130,000 square-foot facility to the acquisition of technology and the placement of equipment and set up of production cells, needed to be completed in 8 months in order for the company to win back work from existing SK customers. IMEC’s innovative project team worked with SK Engineers and team members borrowed from Ideal Industries to develop the individual processes, work flows, cells, personnel requirements, square-footage calculations, kanbans, pull systems and, eventually, a full facility build-out and internal operational layout. The company manufactured and shipped its first product within the 8 month window. As a result, a venerable U.S. brand is back in circulation, providing auto mechanics with the tools they need to maintain American autos, and the Industrial community with the tools they need to keep American factories humming.

Results

• New 130,000 square foot manufacturing facility• 40 new jobs• $16 million capital investment• Met on-time ship deadline customer orders

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”Tim HerrickOperations Manager, SK Hand Tool

Click on the QR Code for a link to the SK Tool video!

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We’ve been through a bad decision in the past – the wrong system and poor implementation – and I can tell you from experience that’s much more costly than investing the additional time and money to bring in a resource like IMEC. Using IMEC’s expertise and network, we feel like we did everything possible to make the best decision for our company.

Rockford • 95 employees • www.caldwellinc.com

Manufacturer of standard and custom-engineered below-the-hook lifting solutions for manufacturing, construction, industrial and other customers

The Caldwell Group

SituationCaldwell Group purchased a manufacturing information system in the late 1990s, but stopped implementation only partially through the conversion from a previous model because it wasn’t the right fit. The company had been running multiple systems concurrently with some success, but recognized that business growth required more effective tools, particularly as customers continued to demand products and information faster and faster. Choosing the right replacement system from the dozens of options on the market, though, seemed a daunting task.

IMEC SolutionTo avoid laying a new system on top of ineffective work processes, IMEC recommended combining the selection with internal process improvement work and led Caldwell Group through a review of the existing system, a “wants and needs” assessment and current state process mapping. After narrowing down the list of potential systems, IMEC brought in several vendors for high-level walkthroughs to help the company envision what a new system could do. With this background, Caldwell Group developed future state process maps incorporating key system capabilities and used them to communicate final functionality requirements to vendors. The company made a selection following more detailed demos, and implementation of the new system should be complete in January 2013.

Results

• Increased ability to serve customers physically & electronically• Improved scheduling, management of inventory & work in progress• Integration of e-commerce & configuration tools• Enhanced shop floor efficiency & more on-time deliveries

“”

Doug StittPresident, The Caldwell Group

Chester • 3500 employees • www.gilstermarylee.com

Produces more than 8,000 food items for more than 500 private-label brands, including virtually every major U.S. retail grocery chain and wholesaler

Savanna • 200 employees • www.elkay.com

Market leader in the manufacture and assembly of drinking fountains and water coolers for the commercial building market

Gilster-Mary Lee Corporation Elkay Manufacturing

SituationBecause success in the low-margin food industry demands a laser focus on efficiency, Gilster-Mary Lee wanted to embark on a proactive effort to evaluate processes, identify areas for improvement and train workers in the areas of lean manufacturing and continuous improvement. The company was particularly interested in improving productivity - without increasing costs or sacrificing quality - on production lines for one of its fastest-growing restaurant customers.

IMEC SolutionAfter providing both lean and continuous improvement training for employees, IMEC took a multi-functional team through a value stream mapping exercise, then divided them into groups to tackle a series of projects. From this work emerged recommendations for improvement, which the company put into place over the next few months. As a result, Gilster-Mary Lee increased production for its fast-growing restaurant customer from 680 to 900 cases a shift with the same workforce and little capital expenditure. Additional projects ranging from order processing efficiency to employee safety are now in the works - all designed to help the company on its ongoing growth transformation.

SituationStriving to stay competitive from a U.S. manufacturing base, Elkay Manufacturing’s Water Cooler Facility is focused on controlling operating costs. Following a strategic planning process to identify areas of focus for 2012, the company asked IMEC to complete a lean assessment, which led to an E3 (Economy, Energy & Environment) Review, three key areas in which Elkay’s executive team was looking to drive efficiencies.

IMEC SolutionThe E3 Review involves a hands-on assessment of production processes, recommendations for improvement and assistance with implementing energy-saving projects. For Elkay, the process started with value stream mapping to identify specific process flow areas and root causes of waste within the facility. IMEC spent several days on site assessing various aspects of the company’s operations, calling on support from energy and environmental experts at the University of Illinois at Chicago and the Energy Resource Center. The end result was a list of specific action items in each area: Economy, Energy and Environment.

Results

• Boosted productivity by more than 30% on key lines• Added capacity without significant capital expenditures, change in workforce• Positioned the company to better serve a key customer & seek new business

opportunities

Results

• Facility layout changes yielded better efficiency and less rework• Re-layout of the compressor room improved air flow• Scheduled maintenance checks mean fewer compressor leaks• Installing energy-efficient equipment will drive cost savings• More recycling will increase revenues

We’re looking at this as a multi-year evolution of the company. Continuous improvement is continuous, after all-there’s no end point. IMEC is helping us implement cost-effective solutions within our own four walls.

“

Tom WelgeVice President, Gilster-Mary Lee

”

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Sycamore • 80 employees • www.driv-lok.com

Manufacturer of press-fit metal fastening and joining components for the automotive industry, medical, industrial, department of defense and others

Driv-Lok

SituationDriv-Lok is in an intensely competitive sector, where customers demand certain levels of efficiency. The company had experienced growth in sales to automotive manufacturers, doubling volume on some key parts. The production increases posed some challenges in the company’s sorting and packaging department, the final step to ensure non-defective products are released. An assessment revealed that long machine set-up times were causing some delays in shipment.

IMEC SolutionIMEC and Kishwaukee College teamed up to provide a solution to improve the efficiency of the Sorting department. Several executives participated in a Lean Manufacturing Series at Kishwaukee and a Value Stream Mapping project was executed in the facility to pinpoint areas of waste and identify opportunities for improvement. This led to development of a cross-functional team of Driv-Lok employees to craft an updated plant layout, and reduce change-over times on the equipment. “The only way we can stay competitive in the market is to take waste out of our facilities,” said Becky Metcalf, Executive VP of Driv-Lok. “We had our operators, not our supervisors, be part of the teams. The operators are the people that drive the processes throughout the plant.” Involving the operators in the solution has made the difference at Driv-Lok. “Our operators are so proud. Once you get a key employee to embrace the concepts of Lean, that word spreads and then becomes a daily operating habit.”

Results

• Set-up times reduced up to 50%• $18,000 in tool savings• Inventory cost reductions of $1 million expected• Significant reductions in capital spending anticipated• Shop-floor productivity, efficiency, capacity improved

All of the efficiencies that we are gaining means more profit for the company, and in turn, more money for our employees. With all of the things we are seeing increase in today’s economy, that’s the thing we’re going to keep Americans and American jobs for.

“

Becky MetcalfPresident, Driv-Lok

”Click on the QR Code for a link to the Driv-Lok video!

Aurora • 30 employees • www.nitrex.com

Provider of metal heat treating equipment, services and technology

Nitrex Inc.

SituationWhen Tammy DalBello joined Nitrex as the Manager of Quality and Regulatory Operations, she soon learned that plant safety was also part of her responsibilities. The 30-employee Aurora-based company heat treats metal parts that belong to their aerospace, automotive, and machining customers. By its nature, heat treat can be a dangerous industry, and DalBello knew that worker safety would be one of her highest priorities.

IMEC SolutionShe connected with IMEC after hearing about programs to help manufacturers recognize and avoid health hazards associated with industrial chemicals. IMEC specialist Ed Huey conducted a detailed assessment, pinpointing opportunities for safety improvement. He then worked with the Nitrex team members to address the problem areas.

“Sometimes it’s the little things, like electrical panels not being labeled or doors opening the wrong way,” said DalBello. “Even more than that, our associates are dealing with hot flames, so proper techniques are crucial. Once you see these challenges outlined in a report, it’s obvious that they need to be corrected.”

DalBello is proud to report that Nitrex’s work paid off, having one year with no illness or lost times due to accidents, and achieving $142,500 in savings (cost avoidance) as a result of the projects.

“You can definitely attribute the cost savings to the discipline we have developed with IMEC’s help. We’re paying less in worker’s compensation premiums and nothing in emergency room bills. That’s a huge return from a half-day audit and training.”

DalBello appreciated Huey’s approach. “He was very collaborative in showing us the right reasons to do things without being overly critical of our approaches,” she said, adding that Huey is also working with the team on developing standardized work instructions on a variety of key operational functions.

Results

• $142,500 in cost avoidance savings• Achieved one year without illness or lost time from accidents• Reduced workers compensation premiums

We really love the fact that IMEC is here for us. They have so many resources for a smaller company, it’s incredible.

“Tammy DalBelloManager of Quality & Regulatory Operations, Nitrex Inc.

”

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Burr Ridge • 50 employees • www.fusionoem.com

Specializes in low-volume manufacturing, making products for other manufacturers who no longer want to produce them internally, but don’t have the volume to make outsourcing overseas a cost-effective alternative

Fusion OEM

SituationFusion OEM currently serves about a dozen customers in the printing, packaging, oil and gas, and medical industries. The company wants to diversify – while still remaining lean in terms of number of employees – but past efforts to take on additional work have put a strain on Fusion OEM’s infrastructure. The desire to grow led company leadership to the Chicago-based TMA, an Illinois manufacturing association, which recommended IMEC as a resource for lean manufacturing training.

IMEC SolutionIMEC and Fusion OEM started lean implementation in the front office instead of on the shop floor, analyzing processes related to quoting, buying and ordering, then identifying and implementing a series of efficiency improvements. With this step complete, IMEC introduced the rest of the company to lean principles, taking all 50 Fusion OEM employees (office and production workers) through Lean 101 training.

Results

• Increased ability to scale the company & serve additional customers

• More confidence to survive & grow in a global marketplace• Improved morale due to employee involvement & reduced

inefficiencies• Empowered employees able to complete jobs more efficiently

I love the basic concept of IMEC. They help you discover issues, make it clear to your team where those issues lie, identify solutions and then train your people to put those solutions in place and sustain them. As a manufacturer, you only have so much cash available to commit to this kind of work. IMEC is as effective as possible with your money. Every second they were here was beneficial to me and my employees. It was worth every penny we invested.

“

Craig ZoberisPresident, Fusion OEM

”

Click on the QR Code for a link to Fusion OEM videos!

Plano • 45 employees • www.mthpumps.com

Manufacturer of regenerative turbine pumps used in a wide array of applications, including hot water boilers, MRI machines, bio-medical equipment, computer chip manufacturing lines and more

MTH Pumps

SituationBecause many of MTH’s customers work in highly technical industries, adherence to strict quality standards is essential. Over the years, the company had worked on developing ISO-compliant systems-but didn’t begin pursuing certification in earnest until 2011, when a major customer made it a requirement of suppliers. Rather than tackling the certification process alone, MTH decided to enlist IMEC’s support.

IMEC SolutionIMEC started with an analysis of MTH’s current systems, walking through each section of the ISO standard and evaluating existing processes and documentation. After identifying key problem areas, IMEC and the MTH team worked together on a weekly basis over the next six months to streamline processes, update documentation and conduct employee training. After an ISO auditor conducted a preliminary audit to identify potential issues, IMEC helped the company implement corrective actions. Two months later, MTH sailed through its official audit to achieve ISO 9001:2008 certification.

Results

• ISO 9001:2008 certification led to increased customer confidence

• Improved internal processes enhanced product quality• Fewer returns & scrapped parts created significant time

& cost savings• Clearer specs for bearing fit reduced frustration in

manufacturing trying to make good parts

With IMEC, you get a consultant who knows the problems manufacturers face and is full of potential solutions to address them. The cost-to-benefit ratio with IMEC is so much better than with other consultants that don’t specialize in manufacturing.

“

Tim TremainPresident, MTH Pumps”

Chicago • 3,000 employees • www.sandc.com

Global provider of equipment and services for electric power systems, including switching and protection products for electric power transmission and distribution

S&C Electric Company

SituationAs a supplier to the utility industry, where there’s a big emphasis on smart grid and renewable energy projects, S&C is committed to providing equipment and services that help customers meet sustainability goals. That commitment led S&C to the Green Suppliers Network (GSN), a collaborative venture of industry, the EPA and the Department of Commerce’s National Institute of Standards and Technology Manufacturing Extension Partnership. Through a series of interactive site reviews (sometimes known as E3: Economy, Energy, Environment), manufacturers work to improve business processes - with the goal of lessening environmental impacts and improving productivity and customer satisfaction.

IMEC SolutionTo pursue registration as a GSN Partner, S&C teamed up with IMEC (project management and efficiency review), the Illinois Sustainable Technology Center (environmental analysis) and the UIC Energy Resources Center (energy analysis) and selected its painting operation as the value stream to assess. Over the course of six-plus months, IMEC facilitated a diverse group of S&C employees as they analyzed the process from grinding to final painting. The team reviewed chemical, water and energy usage; waste and pollution generated; and employee safety.

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Streator • 64 employees • www.plymouth.com

Global supplier of specialty tubing in carbon, alloy and stainless steel for auto, mining, aerospace and recreational

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Plymouth Tube Company

SituationCorporate leaders charged Plymouth Tube’s Streator facility with completing Training Within Industry, which leverages supervisors to apply the principles of lean manufacturing, standardized work and continuous improvement on an ongoing basis. The project’s goals were threefold: 1) break down operator processes into standardized work through documented job instructions, 2) train supervisors to teach those job instructions to employees and 3) verify that employees learned the skills and processes necessary to perform the work safely and efficiently.

IMEC SolutionIMEC and Illinois Valley Community College collaborated to complete the project, with IMEC delivering the training and technical assistance and college staff providing project management and securing grant funding. The project kicked off with a walkthrough of the Streator facility, then IMEC developed the scope for the training and conducted half-day sessions over the course of two weeks. The Job Relations module taught supervisors how to build positive employee relations, increase cooperation and motivation, and resolve conflicts effectively. In the Job Instruction module, supervisors learned how to quickly train employees to do a job correctly, safely and conscientiously.

Results

• Trained most supervisors in both Job Relations & Job Instruction• Developed a more visual workplace; enhanced quality & safety• Improved job instructions & documentation• Streamlined the employee training process

We weren’t looking for a consultant. We wanted a partnering relationship, and that’s what we got with IMEC and Illinois Valley Community College.

“

Cam ValleGM, Plymouth Tube

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