Staff Written Articles
Articles found in our monthly E-Newsletter
By Shane Cantrell, MMEC Business Advisor
Technology is changing the world at a rapid pace, from the phones and computers we use daily to robotics and other new manufacturing methods. Staying competitive requires implementing technology and automation within your business, which is easier said than done. Reforming your technology can be intimidating, since the more sophisticated technology becomes, the more complex it is to understand and operate. The financial aspects of implementing technology can also be challenging, from ROI calculation to capital financing.
At the recent Innovate Montana Symposium, MMEC partnered with: Chris Orms of GTUIT, Trae Buchert of Key Technologies, and Chuck Wambeke of Industrial Automation Consulting to listen to the concerns of business people and discuss potential ways of addressing the challenges of introducing these new complexities. Together they addressed 5 key questions.
Where is the Puck Going?
In other words, what does our future look like with the implementation of technology and automation? In what could be deemed a happy coincidence, technology adoption is overlapping with a large percentage of the traditional workforce retiring, without the necessary numbers of younger skilled workers available to backfill their positions.
Robotics used in the manufacturing process are not the only type of new technology affecting manufacturers. Automation is providing productivity and efficiency gains in all aspects of business, including marketing and sales, customer service, financial operations and management, shipping and supply chain, and on and on. Different types of technology must be integrated to provide the best outcomes and allow our companies to keep up with the competition.
What should MT businesses do to prepare to participate in the IIoT? How does and will technology affect manufacturers who choose to be early adopters?
Before we put time and money into implementing new systems, we should spend time understanding what it is that we’re really trying to accomplish, and how the technology we’re considering will get us there. We’ve all heard the phrase “big data,” referring to the large amounts of information which can be generated by new higher-tech systems. Technology is making all sorts of data available at the touch of a button, but what should we really be collecting, and what do we do with it? Planning is crucial to avoiding disappointment in outcomes.
It is important to be knowledgeable about the technology you’re considering before signing on the dotted line. “Doing your homework” on new technology implementation includes not only gaining a thorough understanding of the new product or system, but also consideration of training needs, learning curves of those who will be interacting with it, new or different inputs that may be necessary, implications for your supply chain (both incoming and outgoing), etc. One really needs to understand what the end goal is. What do you want the “Future State” of your process or organization to look like? If you (the end-user) do not understand how you want the new system to function, then the implementation of technology and automation could result in a very disappointing outcome.
We must also consider the human element. In most cases, as Trae Buchertemphasizes, people still buy from people. Technology must be user-friendly, and expectations must be clearly communicated. Adequate support of new technology is also crucial to successful implementation and achievement of desired outcomes.
What technology disruptions do you see your respective technology domains bringing to your customers markets? What could the implications be for MT organizations?
As Chris Orms mentioned, we need to consider “what you are doing to your business. It is crucial to have the ability to be more adaptive in everchanging market conditions. The importance of doing business in different ways cannot be overemphasized. Sometimes, we as humans can be the biggest technology disruption.
The other looming issue is the skilled workforce consideration that is all too common among manufacturers in Montana. It is very challenging to find people that are willing to work. Technology and automation are key tools that can be used to address these concerns. Another potential technology disruption is how to re-purpose people and re-train them with the necessary skill set to incorporate new technology and automated processes. The implications can be very detrimental to small to medium sized manufacturers that have not proactively planned to address the new skills necessary and training accordingly.
Chuck Wambeke also emphasized the importance of a properly designed Human-Machine-Interface (HMI). Industrial Automation Consulting has engineers that carefully configure the HMI based on the application at hand. The HMI needs to consider ease-of-use and design for the specific functionality needed. A poorly designed HMI can often negatively affect how effective technology and automation is implemented and integrated into their existing systems. Did we mention planning again?
We’ve seen great economic gains in Bozeman recently due to the rollout of the Bozeman Fiber Network. Have you seen other micropolitan regions strengthen their competitive advantage through technology adoptions?
Trae Buchert shared about how successful central Washington state has been in Grant county with their fiber optic program. The Daily Dot publication had this to say about this small community: “Ephrata is a sleepy farming town nestled squarely in the middle of Washington state, about halfway between Seattle on the coast and Spokane near the Idaho border. While Ephrata is the biggest city in Grant County, there’s little chance anyone would mistake it for Silicon Valley. Yet, underneath Ephrata’s unassumingly rural exterior, the area plays host to massive data centers for Internet giants like Microsoft, Yahoo, and Intuit. Why would the titans of the tech world choose to house their most valuable resource in an isolated little town of approximately 7,000 people? Simple: This particular little town has the fastest Internet in the nation.”
This case study is a textbook example showing the importance of employing technology to attract new businesses and capture incredible economic gains that would never have been possible without it. Grant county in Washington state chose to invest in high technology to achieve a significant competitive advantage over most communities in our nation. What would it look like to do something similar in our Montana region?
Where do you see technology advances being the most beneficially impactful?
The food industry, according to Trae Buchert, is seeing incredible impacts in product recovery and efficiency gains. State-of-the-art technology has been employed to sort food products using vision cameras, lasers, and specially designed sorting conveyors to reduce waste and use them for another product type. The result has been astounding in increasing product recovery, dramatically improving efficiency, and overtime labor savings. This technology is not limited to the food industry alone. Other applications can be easily translated to: mining, lumber, recycling, tobacco, and ammunition manufacturing.
Chris Orms shared about the technology advancements being used in the oil and gas industry by GTUIT through the employment of managing and monitoring equipment in the field (high value in technology). Using technology, GTUIT can now manage and monitor equipment remotely without even needing to be on-site.
Overall, it is clear that we have a lot to learn about how to effectively introduce and implement successful technology and automation systems in our organizations. Technology in its very essence is very dynamic, so it makes it very challenging to keep up to speed. The best place to start is to ask questions and then proactively plan to include the use of technology and automation in your situation. Resources are available, and MMEC is here to help you walk your technology journey. If you are interested in further exploring technology, robots, and automation, please consider attending the upcoming workshop on September 12-13 in Bozeman, MT. Find out more information and get registered here.
With the Wannacry ransomware attack fresh in everyone's memory, and scary stories and statistics in the news constantly, there's no need to harp about the odds and potentially devastating effects of a cyber assault on your small business. The evidence is overwhelming that taking steps to protect your organization and employees must be a priority. For those in the Department of Defense supply chain, the deadline is also fast approaching to have your cybersecurity program, mandated by recent revisions to the DFARS, in place.
In December 2016, the National Institute of Standards and Technology (NIST) published a revision to its Special Publication 800-171, which outlines 14 areas of security against cyber threats. The publication details requirements for protecting the confidentiality of Controlled Unclassified Information (CUI) in nonfederal systems and organizations. DOD contractors must be in compliance with these requirements by no later than December 31st of this year.
For those not in the DOD supply chain, the NIST publication is also useful in developing any organization's cybersecurity strategy. In addition to the Special Publication, NIST has also developed a voluntary Framework, which is scalable for any size organization and intended to help guide businesses and other organizations through implementation of security measures in gradual steps.
As with most things in our information-dense environment, a plethora of information about cybersecurity is available at our fingertips, but figuring out what's most important and undertaking the task of planning and implementing changes in the best manner for your business can be challenging. MMEC is one of many resources in Montana who can help. A great opportunity to learn more will be the Cybersecurity session at the Innovate Montana Symposium on July 12-13 (if you're not already registered, you should!).
One thing is certain, and that's the need to act sooner rather than later to ensure that your company is as protected as it can be. An analogy that hits home to us in Montana could be made: it's like running from the bear – your odds are better at the front of the pack than bringing up the rear!
DOD Contractor Resources:
• Defense Cybersecurity Requirements for Small Businesses
• Cybersecurity: What Small Businesses Need to Know
Additional resources available on the MMEC website.
MMEC Business Advisor
Intellectual Property, or IP can be defined as a product of the human mind or intellect; including ideas, inventions, expressions, methods, processes, unique names or chemical formulas which have potential commercial value and can be expressed in tangible form. The United States Patent and Trade Office (USPTO) has the duties of governing IP in the USA.
By the above definition, IP could be as straight forward as the secret ingredient
in your Perfect Bloody Mary. IP can also be more complex, such as a highly engineered,
Rare Earth bearing Nano-structured catalyst that is integral to the production of
some esoteric and valuable wonder material.
IP not only refers to patents, but also to Trade Secrets, Copyrights and Trademarks, as well as affording certain rights to the owners or inventors of distinct company names or packaging designs.
Patents, perhaps the most commonly known area of IP, are divided into three categories:
- Utility Patents – Ideas and inventions such as new drugs (Viagra), mechanical devices (better mousetrap), manufacturing methods (anodizing), etc. In 2015, the USPTO received 589,410 Utility Patent Applications, resulting in 298,407 awarded patents.
- Design Patents – Used to protect ornamental objects, unique designs etc. – such as a USB charger shaped like a conventional telephone. Determining if something should be covered by a design patent or a utility patent can be tricky, but there are a few simple tests that can help.
- Plant Patent – Applies to asexually reproducible plants (grafts and cuttings). New plants, both asexually produced and produced via pollination can also be potentially protected by a Utility Patent.
It is important to remember that IP rights are offensive in nature, not defensive. Having a patent issued by the USPTO does not afford the owner automatic protection
from infringement. Rather, it grants the owner certain rights to exclusivity and
potentially affords them a framework for offensive legal recourse. The USPTO is not
responsible for making sure no one else is using your patented ideas; that responsibility
falls to the patent owner. Rather, the USPTO role is to keep others from patenting
ideas or inventions that too closely resemble patents already granted, also known
as “Prior Art.”
Any inventor, entrepreneur or business entity developing or using IP should be familiar with the basic concepts and terminology used to describe IP. In particular, understand the importance of confidentiality; do not disclose an idea or innovation publicly if the intent is to patent it or treat it as a trade secret. Prior to discussing or disclosing un-protected IP, be sure to have an executed NDA (Non-Disclosure Agreement) in place.
There are several good IP reference books readily available. Over the years, Patent It Yourself(D. Presseman; 2014) has become a common reference tool used by many inventors and the like. It provides a thorough, comprehensive and straightforward resource to guide users from idea to marketed invention. For those looking to gain an understanding of how IP is used at the highest levels, the book Triumph of Genius (R. K. Fierstein; 2015 ) provides an in-depth account of the landmark IP suit brought by Edwin K. Land and Polaroid against Kodak
- Dave Allard MMEC
MMEC Business Advisor
The most important aspect of starting a food manufacturing operation is Food Safety. Nothing will be more important to you and your business than never having a customer become sick, or injured, or worse from consuming your product. Food Safety in the food manufacturing world is overseen by the FDA, State and Local authorities, and many times large distributors of your product. Generally this oversight will consist of on-site audits. An auditor will walk through your operation from start to finish and will conduct a paperwork review of your production records.
Over the years, Food Safety in the US has become formalized and standardized in an
effort to provide the best possible safeguards for you and your customers. The FDA
has mandated Good Manufacturing Practices to be followed by every food manufacturing
facility. These practices are published in the Code of Federal Regulations (CFR117)
and provide guidance in cleaning ability, sanitation, and cleanliness of processing
areas and prevention of microbial and chemical contamination.
A good Food Safety Program in your facility can be broadly thought of in two ways:
- First: Reduce the chance for any hazardous material to become introduced into your product stream. Control them at the source. This requires a variety of programs, called Prerequisite Programs, which you should have in place. Your employees should be trained in them, and they should be followed. In addition, you should be checking frequently to ensure that they are being followed. Think of them as your SOP’s, or Standard Operating Procedures. In other words: what things do you do, how you do those things, when you do those things, where you do those things, who does those things, and how do you know those things were done.
- Second: If a failure occurs in one of your Prerequisite Programs and a critical hazard should become introduced into your product that could cause harm to a customer, how will you detect, and remove it before you ship the affected product? Or better yet, how will your business design a system that doesn’t allow this to happen in the first place.
This is the purpose of a Hazard Plan, better known as a HACCP Plan. HACCP stands for Hazard Analysis and Critical Control Point. These plans have been mandated by the FDA for certain high-risk foods like juices and canned foods, although many other manufacturers follow a HACCP Plan because it is good business to not harm your customers, and because many retailers, wholesalers, and distributors require a HACCP Plan regardless of the product you make.
The two efforts mentioned above work best together. Relying only on your HACCP Plan while utilizing weak Prerequisite Programs is a recipe for disaster. For example, relying on a vision system to inspect finished product works best if the incoming load of hazards is infrequent. If chemically tainted product, broken glass, insects, etc. are being detected by the vision system, then the Prerequisite Programs upstream are in need of an overhaul. The possibility exists that some of these issues may pass through the vision system due to faulty maintenance, operator error, or any number of other reasons.
Prerequisite Programs can be varied depending on the facility and processes involved. The 12 most commonly found are: Facilities (clean, well laid-out, secure, weather proof), Suppliers, Sanitation, Pest Control, Employee Training, Specifications, Production Equipment, Personal Hygiene, Chemical Control, Warehousing and Shipping, Traceability and Recall.
You should have procedures or policies in writing for each of these, detailing what and how your company handles the areas of operation. Some may be brief, while others may require a set of written procedures that require step by step procedures and training. Signed off check sheets are important to serve as records of your sanitation activities. All Prerequisite Programs should list on the front page who is in charge and their job title, where the actual program manual or documents are located, who has revision authority, how often the program is reviewed, and which personnel are trained in the program.
Generally speaking, think of a hospital. We expect there should be no dirty dressings or bandages on the floor, utensils and equipment should be properly stowed, doctors wearing proper clothing, hand washing available, etc. That image in your mind is what your operation should be like. After all, you’re making people’s FOOD.
MMEC Senior Business Advisor
The very first baby boomers turned 65 in 2011; 10,000 turn 65 every day. Baby boomers own 63% of the private businesses in U.S., and 80-90% of their wealth is tied up in their businesses, where it is highly illiquid. Here in Montana, many of those businesses have been managed as a source of cashflow to support lifestyle; rather fewer owners have viewed their businesses as a source of wealth beyond income.
A recent Exit Planning Institute survey confirms that 76% of baby boomers who own businesses plan to transition over the next 10 years, and 48% plan to do so in the next 5 years. Alarmingly, the survey found that 12 months after selling, 3 out of 4 business owners surveyed “profoundly regretted” the decision, and 75% of private businesses put on the market don’t sell. A very common reason for ‘no sale’ is the gap between value expectations of the seller, and the price that potential buyers are willing to pay. Fully half of all business exits were not voluntary, but resulted from death, disability, divorce, disagreement, or distress.
Owners wishing to leave on terms and at a time of their choosing should focus on exit planning well in advance; I’ve heard it said many times that owners who don’t sufficiently plan for a successful exit are busy preparing for an unsuccessful one. So what’s an owner to do? In my experience, owners ‘lean in’ when asked a fundamental question “Do you know what your business is worth?” That difficult, triggering question gets to the heart of an essential, early step in exit planning; correlating owners’ “life-after-business” plans with their personal financial plans and the value of their biggest and most illiquid asset, their business. That eye-opening data frequently jumpstarts serious exit planning endeavors, about which, more next time....
One of my dad’s favorite sayings when I was growing up was, “Better safe than sorry.” That old adage really rings true when it comes to protecting your business from cyber and other information security threats. Considering the devastating potential consequences of suffering a security breach, and the exponential rise in cyber attacks among small manufacturers and businesses in general, making the time to implement some basic security protocols such as the ones mentioned below could have a significant ROI for your business.
- Train your employees on how to protect sensitive information. This includes everything from installing new applications on company computers to use of social media to how to handle tax and other important information and even handling email phishing and spam.
- Update, update, update. Always ensure your applications are up to date – checking your settings to make sure automatic updates are allowed is a good way to do this.
- Install, update and run antivirus and malware protection regularly. Make sure to keep your subscriptions up to date, and periodically check to see if an upgrade to your application is warranted.
- Require everyone (including yourself) to use strong passwords, and consider two-step authentication whenever possible. Don’t store passwords where they could be easily stolen or hacked (such as in Notes or a similar app on your smart phone). A good rule of thumb is to use a minimum of 12 characters, including upper and lower case letters, numbers and symbols. Passwords driving you crazy? There are a number of password manager apps available now, as well. Here’s a link to a recent review article in PC Mag: http://www.pcmag.com/article2/0,2817,2407168,00.asp.
- Install a Firewall
- Secure your network Wifi with a strong password (always change the factory-set password right away!), and set it so that it doesn’t broadcast the SSID.
- Ensure everyone has their own individual accounts and passwords, and control administrative/full-access privileges.
- Ensure your email provider offers adequate filters, and engage security settings in web browsers to keep employees from accessing malware-infected websites.
- Backup, backup, backup your data. Run regular backups and always keep important information in more than one location. Cloud-based storage services often provide backup of your data, in addition to allowing access from anywhere with internet.
- Control physical security of laptops and other sensitive information. Know where important and sensitive information is stored and who has access, and keep it secure. Don’t leave your laptop on your car's back seat, or open and logged in where anyone could access it.