Indiana manufacturers leading the way with cutting-edge products and processes.
by Steve Kaelble
“Somebody's got to create wealth,” says Pat Kiely, president of the Indiana Manufacturers Association. Indiana's manufacturing industry is doing plenty of that these days, and that's a great thing for the state's economy. Indeed, every state wants more manufacturing jobs, but few are as fortunate as Indiana.
The Hoosier state is historically among the nation's most manufacturing-intensive economies, which can be a liability when the economy tanks but a blessing when times are good. Most economists agree that times still aren't as good as they ought to be, and there's lots of recovery left to accomplish following the Great Recession. But in Indiana, according to Kiely, manufacturing makes up about 28 percent of the state's economy, which is nearly what it was a decade ago.
Other big manufacturing states? “Those other states have lost ground,” says Kiely, “but we've maintained our ground.”
Looking back at 2013, “it was another positive year,” Kiely says. Business was strong in the automotive sector, which is a big piece of Indiana manufacturing, and steel did well, he says. “The employment numbers were weaker in the first half but were getting better in the second half.”
Indeed, he says, the Indiana economy added some 4,500 manufacturing jobs in November alone. “We ended the year on the employment side better than we started,” Kiely says. That has helped push the state's jobless rate in the right direction. Ever since dipping back under 9 percent in late 2011, “the Indiana unemployment rate was stubbornly above 8 percent. Now it's 7.3 percent.”
He's also encouraged by recent revisions in national economic figures to show the economy growing at a faster pace than previously reported. “If that's true, the economy is in much better shape,” he says. Not that he's totally happy with news out of Washington. He's concerned about federal rules and regulations that he thinks could stifle growth, and political battles that could continue to cause uncertainty.
Still, though, Kiely is upbeat about 2014. “I'm looking for a decent year.”
The recovering economy is, of course, a large reason for the positive news in the Indiana manufacturing sector. But give some credit to innovation, too. Indiana manufacturers are finding ways to improve both their products and their processes, giving them a leg up on competitors overseas, and elsewhere in the country. Read on for a small sampling of the innovation happening in the manufacturing sector in the northern part of the state.
More than Hot Air
Vanair Manufacturing Inc. in Michigan City makes things a lot simpler for workers in construction, utility work and a wide range of other industries. Lots of people need air compressors for the work they do, and Vanair makes it easier to take compressors on the road.
You've no doubt seen work trucks towing air compressors from site to site, attached to a hitch in back. “We took the compressor and mounted it on the truck, using the truck's own engine to drive the compressor. We turn the truck itself into a tool,” says Greg Kokot, the company's president. His brother, Ralph, is CEO. “It saves weight, it saves space, there's only one engine to maintain, and it frees up the tow hitch to bring something else to the site.”
Vanair was launched in Michigan in the 1970s, and came under its present ownership in 1997. Ten years later, the Kokots decided to move their company to Michigan City.
Today, the manufacturing facility is innovating its processes to add value and enhance quality. “We are a lean manufacturing company and are getting more and more into lean concepts,” Greg Kokot says. It's paying dividends, he adds. “We're able to get more products out with less time per unit.”
Another improvement in the manufacturing process involves quality control. “Each person in the line checks the work of the material coming in. Each person becomes a quality tester,” he says. And when that person completes work and passes the unit down the line, “the next guy in line checks his quality.”
Most of the work done at the Vanair facility is assembly, Kokot says. Though the company designs and engineers all of its components, many are manufactured elsewhere–but mostly in Indiana. “We can adapt to market demands,” he says.
Vanair's product innovations make life on the job easier for workers in many occupations. “For just about any industry you can name, we have air compressor products,” Kokot says. Vanair compressors have even helped score touchdowns–and save lives.
The company's compressors have been spotted on the sidelines at some NFL games. The idea is to use the compressor to fill special inflatable shoulder pads with chilled air. That helps players lower their body temperatures on hot game days, and perform better on the field.
As for the lifesaving capabilities of Vanair products, “we do a lot of military applications,” Kokot explains. He's especially proud of a Vanair installation deployed in Afghanistan and Iraq, using high-pressure air to help locate and uncover hidden explosive devices before they can do any harm. “It saves soldiers' lives.”
A Tasty New Twist
MonoSol LLC is on a roll, and the best part may be yet to come. “We're hiring like crazy,” says the company's president and CEO, P. Scott Bening. Nearly 100 employees came onboard in the past year, bringing employment to more than 450, and another hundred could join in the coming year, he says. The company has corporate headquarters in Merrillville and manufactures elsewhere in Northwest Indiana. “We're going to stay here and distribute globally.”
What's driving the boom? Product innovation. MonoSol's recent growth has come through its manufacture of the plastic film used to create Tide Pods and similar products that have just enough laundry or dishwasher detergent for one load, packed in a water-soluble wrapper made by MonoSol. Consumers love getting their detergent in the handy packets.
“All of our films turn into carbon dioxide and water when they dissolve,” Bening says. “Making films for that delivery system is very unique.”
Procter & Gamble's Tide Pods hit the market about two years ago. Other manufacturers such as Dial, Sun and Unilever quickly jumped on the bandwagon with unit dose laundry products of their own, with film supplied by MonoSol. Unit dose laundry products now make up about 8 percent of the market, and it's growing. About a decade ago, similar products hit the dishwasher detergent market, also using MonoSol film.
The company has a market share of more than 90 percent of the water-soluble film business, and exports half of its products to more than 50 countries on six continents. “We're growing to keep up the capacity,” Bening says. There's expansion in LaPorte, and the company has been hunting for an additional manufacturing location.
What could add to this already-amazing success story? “One thing that we've started to launch is edible film–not just soluble but edible,” Bening says. There are all kinds of possibilities for packaging food products in pouches or sachets that can be dropped into cold or hot water–from soup mixes to grains to drink supplements, such as packets that can turn bottled water into a fortified supplement.
How big can the edible innovation become? Who knows? “When we look at the potential,” Bening says, “that market could dwarf the detergent market.”
“Our Innovation is Organization”
Manufacturers are often seeking ways to improve their processes, creating new efficiencies, removing unnecessary steps, reducing waste materials. Much can be gained by taking a long, hard look at processes. But there can still be limits within a particular facility's size and attributes, or a company's corporate structure.
South Bend-based General Sheet Metal Works wanted to remove those constraints and really find a better way to get the job done. So the company is designing a new facility with the best possible process in mind, and is restructuring its whole company around its innovations, according to Taylor Lewis, vice president and chief operating officer.
“Two years ago we embarked on a journey to redesign the organization,” she says. “We said, what is manufacturing going to look like in the future? What are the challenges going to be?'”
So the company started with a relatively clean slate, not just in terms of facility, but corporate structure, too. “We turned the box over, rearranged the blocks and designed a new organizational structure,” Lewis says. “We created positions in the executive and management structure. Our innovation is organization.”
The result has impressed outsiders such as auditors working on ISO audits of the company. The auditors, says Lewis, were hard-pressed to find anything to mark down the company's scores. “Our ISO auditors said they've never seen a culture like this.”
As for the design of the soon-to-be-built facility itself, “we hired a top-notch information analyst and used various data mining techniques to understand how our processes work. We designed a facility from the inside out, from the process up.”
General Sheet Metal Works has been in business for more than 90 years, but it's no longer in the sheet metal business. “We got out of the sheet metal business and are a metal fabricator–stamping, bending, laser cutting,” Lewis says. The company's products can be found in many places, from equipment to construction to solar installations.
The company knew it needed to innovate itself in order to help its customers keep ahead of the curve, Lewis says. “We looked at what our customers are facing,” she says. “Customers are going to need to be able to scale in order to remain competitive globally. They need to grow their enterprise without a proportional growth in their investment infrastructure and labor. We have to be able to provide elegant solutions.”
