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BRIEFLY:
Illinois Legislative Manufacturing Caucus convenes
Members of the bipartisan and bicameral Illinois Legislative Manufacturing Caucus met in the State Capitol this week to discuss strategies that will improve the business climate in Illinois. Led by four co-chairs (Rep. Ruth Munson, Rep. Will Davis, Sen. Dave Syverson, and Sen. James Clayborne), the Caucus discussed issues ranging from the need for a qualified workforce to fairness in tax policy to problems with Workers' Compensation. IMA Vice President Mark Denzler and IMA Board member Dave Bumbar (Aurora Metals) participated in the discussion.
U.S. DOL statement on December employment numbers
U.S. Secretary of Labor Elaine L. Chao issued the following statement on the December employment situation:
"The January 5th employment report shows that our economy continues to produce steady, sustainable employment growth with strong wage gains for America's workers. Average hourly earnings for workers jumped 4.2 percent in 2006, the best 12-month showing since 2000. This is further evidence that the president's economic policies are working and producing strong wage gains for America's workers, and we should be cautious of future policies that would slow these gains."
Promote your company on the U.S. Commercial Service website
Looking for sales leads or potential sales representatives in China? The U.S. Commercial Service in China provides U.S. exporters an inexpensive listing on the Chinese-language version of their website, which targets an audience of China importers and commercial buyers.
The Service will translate a description of the product or service for which you are seeking China representation, distribution or sales prospects. This translated description, along with an appropriate image, will be added to their on-line directory of U.S. exporters. When interested China importers reply, the trade inquiry will be forwarded to you.
Qualified U.S. exporters can obtain this listing by completing the form found at
http://www.buyusa.gov/home/fuse.html. In addition to choosing China, you may use the same form to enroll for listings in other markets where the U.S. Commercial Service offers this program.
Facing the facts: Manufacturers seek relief from high energy costs and many seek holistic approach to global supply chains
Recognizing that high, volatile energy costs are here to stay, managers at production and manufacturing companies say they must act to offset the impact of high costs or their companies' margins will suffer. Further, four times as many respondents as last year expect high energy prices to hurt their margins. These findings are the result of Industry Directions' second annual study on the impact of energy costs on supply chain strategy, The Energy Cost Factor: Transforming the Supply Chain to Offset Margin Squeeze. The survey garnered responses from 139 respondents from a wide range of industrial companies.
An increasing number of top manufacturing executives (79 percent vs. 77 percent in 2005) are focused on supply chain issues in relation to energy costs. In fact, executives indicated that virtually every aspect of the supply chain — topped by logistics and transportation; procurement, production, inventory management, and planning — is being seriously impacted by increased energy costs. Warehouse management, reverse logistics, procurement and planning are being impacted at a larger portion of companies than in the previous year.
"This year's findings are significant because they demonstrate that companies are not simply bearing the brunt of high energy costs in the most obvious areas of the supply chain," said William Brandel, Principal at Industry Directions. "Further, they now recognize that they cannot pass these higher costs on to customers or demand lower costs from suppliers."
Over four times as many respondents as in 2005 (22 percent vs. five percent) now recognize that energy costs may hurt their margins. Meanwhile, only 15 percent of respondents believe they can pass higher costs on to customers, compared to 31 percent in 2005. Moreover, fewer companies expect lower costs from their suppliers to offset energy costs going forward.
Industry Directions' research suggests that companies will derive some measure of benefit by focusing on specific areas of the supply chain. However, the overwhelming conclusion is that high energy costs provide little choice for companies but to optimize their supply chain network to design and improve planning and execution in a more holistic fashion, and ultimately transform the structure and dynamics of their supply chains to support global operations.
This study was sponsored by Logility, http://www.logility.com; and Manhattan Associates,
http://www.manh.com. Free copies of this survey report are available at:
www.industrydirections.com.
Avoiding electricity price sticker shock
When your business receives its utility bill for electricity consumed after January 1st, you will probably be experiencing energy price sticker shock. But, if you act now, you can save your budget from what may be an unnecessary added expense.
Utility rates for Illinois commercial and industrial business customers are increasing for the first time in ten years and will now be based on actual market prices. With rate increases expected to range from 20-55 percent or more, depending on a business' usage and service territory, many business decision makers will find that kind of jump in cost difficult to absorb.
If this sounds like you, you should know that there are solutions available to your business right now that can likely save you money and protect your energy budget from volatile price shifts.
In order to determine what solution is best for your business, first determine what's important to you regarding your electric supply. Some decision makers have little to no interest in actively managing their electric supply. They don't want to concern themselves with electricity products or strategies but they also do not want to pay the increased utility rates. If you are one of these decision makers, there are solutions just for you. You will be able to compare a competitive supply price to the utility rate, quickly make a decision, and get back to managing your day-to-day business concerns.
On the other hand, some decision makers have a greater desire to have more control of their monthly electricity budget. They may want to understand how various electric supply products are designed and which component costs are fixed and which are variable. By choosing the appropriate product you can determine how much price certainty and variability your business may expect in any given month. Understanding the various components of electric supply products and determining the most suitable solution for your business can be rewarding as it puts you in control of your energy budget. But, it may also be a confusing process if you have never shopped for competitive electric supply before. If this describes your situation, there are resources available to clarify the terms and issues and get you the facts.
Constellation NewEnergy, the endorsed electricity and natural gas supplier of the IMA and leading competitive supplier throughout North America, has solutions to meet your energy supply requirements and tools to help you choose the product best suited for you. Contact Denise Haggerty at 312-704-8525 or go to
http://www.electricityIQ.com/Illinois
to see if you can save money on today's increased rates.
United Airlines lands China route
The Federal Department of Transportation gave tentative approval this week to Illinois-based United Airlines to begin direct air service between Beijing and Washington, D.C. If Federal regulators give final approval next month, flights could begin as early as March 25.
"It's good news for Illinois that United Airlines will join Northwest Airlines in controlling 75 percent of flights from the U.S. to China," said Gregory W. Baise, president and CEO of the Illinois Manufacturers' Association. "Linking our nation's capitol directly with China's is important to promote continued favorable relations between China and the U.S."
As a member of the "Capitol to Capitol Coalition," the IMA was an early supporter of United Airline's application for this service and urged IMA members to voice their support by contacting transportation officials and encouraging them to approve the proposed route.
Counting the proposed seven new flights to China, United Airlines will account for almost half of the flight capacity between the U.S. and Beijing, making it the market leader. The new route will also feed into a network the airline is developing with Air China and Shanghai Airlines to serve 16 major cities in China, the largest such network yet by a non-Chinese carrier.
"China represents one of the fastest growing economies in the world," Baise commented. "Through the end of September, 2006, Illinois businesses exported more than $900 million in goods to China, making them our tenth largest trading partner."
United Airlines currently flies non-stop to Beijing from Chicago and San Francisco. Most flights are routinely sold out, according to the airline.
Tort reform efforts will continue in Congress
The Washington, D.C., newspaper, The Examiner, recently editorialized on the hopes that Democrats in Congress would continue the efforts of Republicans over the past several years to reform the nation's tort system. The editorial calls on House Speaker Nancy Pelosi and the Democrat majority in Congress to support genuine lawsuit abuse reform and bring the trial lawyers bar back to reality.
According to the American Tort Reform Association:
- The cost of the U.S. tort system for 2003 was $246 billion, or $845 per citizen, or $3,380 for a family of four.
- U.S. tort costs increased more than 35 percent from 2000 to 2003.
- The growth of U.S. tort costs have exceeded the nation's Gross Domestic Product (GDP) by two to three percentage points in the past 50 years.
- The U.S. tort system is inefficient; it returns less than 50 cents on the dollar and less than 22 cents for actual economic loss to claimants.
Experts claim efforts at both the national and state levels are needed to bring meaningful and lasting change to a system The Examiner called "seriously warped against providing justice for businesses and the consumers they serve."
Two key legislative proposals are pending in Congress. Congressman Lamar Smith (R-Texas) is author of the Lawsuit Abuse Reduction Act, which passed the House during the 109th Congress, but was not acted upon by the U.S. Senate. The bill enables judges to require plaintiffs filing frivolous suits to pay defendants' legal costs and it prevents so-called "venue shopping" that results in the most costly litigation.
The other bill, authored by Congressman Ric Keller (R-Florida), is the Personal Responsibility in Food Consumption Act, the so-called "cheeseburger bill." Many feel this legislation would ward off what many trial lawyers see as their next area of concentration.
Both bills are expected to be reintroduced in Congress.
New Year's resolutions for your business
New Year's resolutions are hard to keep. By the third week in January, when you're cloaked in guilt about your abandoned intentions to exercise more, take solace in having made — and stuck to — resolutions that will truly improve your business's bottom line this year. Here are ten resolutions to help you lose that organizational flab and get your firm on the coveted "sexiest financial statements alive" list.
1. Leave the "31 Flavors" to the ice cream shops. Great organizations understand the simple premise that you can't be everything to everyone. What you choose not to do is just as important as what you choose to do. Which potential customers will you choose not to serve, and what potential offerings will you not provide? Develop a list of trade-offs, and leave out the unprofitable products and customers.
2. Lose that unwanted "business weight." Lao Tzu, the father of Taoism, wrote, "In a jar, it is the hole that holds the water, so advantage is had from whatever there is, but usefulness rises from whatever is not." Southwest Airlines has used this premise to become the most profitable airline in history by not serving meals, not using multiple aircraft, not providing fancy lounges — you get the idea. In which areas of competition in your market can you reduce or completely eliminate resources in order to positively stand out from the competition?
3. Hit the "mental" gym. Before you can become a great organization, you must first develop great people to take you there. That means a commitment to training and development. What often stands in the way of reaching your full potential is a tendency to substitute hope for preparation. Ironically, senior executives — those with arguably the most influence on an organization's strategic direction — receive the least amount of professional development. Identify the key competencies required for success in your business and find the resources to train and develop them.
4. Junk the bumper car. Many organizations run like bumper cars. Every little competitor activity or customer complaint shoots the firm off into a different direction, with people scrambling to keep up. Operating in a constant state of reactivity is fine for a bumper car but can "total" the profitability and morale of an organization. Set strategic direction and modify your course only when all key variables have been thoughtfully considered.
5. Put away the fire extinguishers. We're all energized by the adrenaline rush of a business "emergency" — a customer's irate letter to senior management, a competitor's price reduction or an internal rush for new quality standards. While extinguishing some of these "business fires" is important to the sustainability of the organization, the vast majority are common, reoccurring situations that drain resources faster than a fire hose sprays water. Managers equipped with sharp strategic thinking skills triage the more common emergencies to ensure that the urgent activities don't engulf the important ones.
6. Replace busyness with business. In our action-dominated society, where the motto "greed is good" has been replaced by "speed is good," we invest little time to think. Most of us wouldn't consider going a full year without taking our car in for an oil change or tire rotation. Yet, how often do we conduct a "business tune-up" to carefully think about changes in the market, customers, competitors and the organization?
7. Immunize against hamsterosis. Like hamsters running incessantly in their wheels, many companies blindly do the same things in the same ways that everyone else is doing them. While things like best practices, benchmarking and Six Sigma can be of value to an organization's efficiency, they also create competitive convergence in a market. Soon, everyone looks, acts and operates the same. Ensure that your organization is creating differentiation in the areas that customers value the most.
8. Accessorize your business activities. Just like the father who embarrasses his children by wearing long brown socks with shorts and gym shoes, organizations can commit a similar faux pas by failing to accessorize their activities. Aligning marketing, sales, operations, and R&D activities within the same organization would seem like a "no-brainer." But how often are R&D and marketing promoting product leadership, while operations and sales are talking to customers about lowest price? Developing a visual activity system map can show where the discrepancies are and help you put together a winning "ensemble."
9. Dust off the Barry White CD. While the beginning of the fiscal year is awash in operational activities, it's important to reengage people's passion in the business. Take a fresh look at your organization's purpose in the form of the mission, vision and values statements. The more committed people are to the organization's purpose, the less chance that they'll be casting a lingering eye to a competitor's job offer later in the year.
10. Cancel the "Survivor" show. The majority of organizations are working hard each year to survive — maintaining a passable level of frustrating mediocrity. Most people don't strive for mediocrity but end up shackled by it as it becomes ingrained in the fabric of the organization. Take time to individually and collectively think about your goals and the strategy that will help you thrive in the New Year.
Survive or thrive in 2007? It really is your choice, if you're resolute.
The Strategic Thinking Institute, founded in 2002, is an organization dedicated to helping managers develop skills and expertise. Rich Horwath is founder and president of the Strategic Thinking Institute in Barrington Hills, Illinois. He is a former Chief Strategy Officer and serves on the faculty of the Lake Forest Graduate School of Management as a professor of strategy. Rich is the author of Storm Rider: Becoming a Strategic Thinker and Sculpting Air: The Executive's Guide to Shaping Strategy. Visit the Strategic Thinking Institute at
www.strategyskills.com.
Lumina Foundation for Education awards grant to manufacturing institute for ‘Business Champions'
Business leaders aim to close skills gap by expanding higher education opportunities for more people.
In December, the Lumina Foundation awarded a grant of $538,000 to The Manufacturing Institute/Center for Workforce Success and its partners for Business Champions, an initiative to catalyze business leadership to support policies that expand educational opportunities aimed at building a competitive U.S. workforce.
Working with the American Association of Community Colleges and the Corporation for a Skilled Workforce, Business Champions will activate business leaders to promote policies that improve access, affordability and success for postsecondary students, with the goal of expanding opportunities for more people of all ages and backgrounds to prepare for good jobs and help meet the nation's growing demands for a skilled workforce.
"It's a critical time for business leaders to speak out and support efforts to improve greater student access to and success in college," said John Engler, president of the National Association of Manufacturers. "Globally-engaged employers in America are in the fight of their lives for skilled talent. With the baby boom generation retiring, the shortage of skilled employees for today's high tech workplace is growing worse every year.
"We are honored to join with Lumina Foundation to build on its excellent initiatives — Achieving the Dream and Making Opportunity Available — aimed at opening the door for more underserved students to attend community college, prepare for good jobs and pursue the American Dream," Engler said.
"The United States has already lost its leadership role as the world's most educated nation, and recent reports suggest that the low skill level of the American workforce is a real and pressing problem," commented Martha D. Lamkin, president and chief executive officer of Lumina Foundation.
"Business Champions will expand, mobilize and amplify the ‘business voice' in support of higher education that is more closely aligned with the needs of the workforce. The business leaders will work with elected policymakers, higher education officials and employers in their regions and states to improve the workforce development capacity of community colleges and reduce the cost of higher education," noted Phyllis Eisen, vice president and executive director of The Manufacturing Institute's Center for Workforce Success.
"In order to compete in the global marketplace, the United States needs to make higher education an affordable reality for students from all backgrounds and align course offerings more closely with the demands of 21st century employers. Business Champions will activate business leaders in support of a stronger, more accessible community college system that teaches students how to succeed in today's high tech economy. We are delighted that with Lumina Foundation's support, we can bolster this important work initiated with grants from both the Ford Foundation and Charles Stewart Mott Foundation in 2004," Eisen said.
"Community colleges are the most logical institutions to respond to the urgent need to prepare a more highly skilled workforce," noted George R. Boggs, president and CEO, American Association of Community Colleges. "Community colleges cannot meet the significant skills challenges ahead, however, without the input and support of business. I look forward to working with The Manufacturing Institute/Center for Workforce Success and the Corporation for a Skilled Workforce on the new Business Champions initiative, and I appreciate the foresight shown by the Lumina Foundation for Education for supporting this important partnership."
Illinois Business Champions include IMA members Bison Gear and Engineering Corporation of St. Charles and Quality Float Works, Inc., of Schaumburg.
The Manufacturing Institute is the research and education arm of the National Association of Manufacturers. Visit
http://www.nam.org/institute
Lumina Foundation for Education, an Indianapolis-based, private, independent foundation, strives to help people achieve their potential by expanding access and success in education beyond high school. Visit
http://www.luminafoundation.org
The American Association of Community Colleges is the primary advocacy organization for the nation's community colleges. Visit
http://www.aacc.nche.edu
Corporation for a Skilled Workforce is a national, non-profit policy organization based in Ann Arbor, Michigan. Visit
http://www.skilledwork.org
The Ford Foundation is an independent, nonprofit organization devoted to strengthening democratic values, reducing poverty and injustice, promoting international cooperation and advancing human achievement. Visit
http://www.fordfound.org
The Charles Stewart Mott Foundation is a private foundation established in 1926 that supports efforts that promote a just, equitable and sustainable society. Visit
http://www.mott.org
ETIP grants reimburse companies for employee training
The Employer Training Investment Program (ETIP) supports Illinois companies' efforts to upgrade workers' skills in order to remain current in new technologies and business practices. The ETIP grant will reimburse Illinois companies for up to 50 percent of the cost of eligible employee training taken between July 1, 2006 and June 30, 2007.
Illinois companies that are retraining/upgrading the skills of their existing workforce may be eligible for ETIP grants if they meet certain criteria.
Apply for grant funding today! For details, contact Judy Parker, IMA Director of Training at 217-522-1240 ext. 3036, or email
jparker@ima-net.org
Purchase the 2005-2006 IMA Benefits Report today . . .
The biennial Benefits Report contains data on employers' plans for a variety of different benefit plans in addition to total number of holidays provided and for additional paid holidays. To order the 2005-2006 Benefits Report, contact Janie Stanley at 800-875-4462, Ext. 3020, or e-mail
jstanley@ima-net.org.
Order the IMA's 2006 Annual Compensation Report today
We're sure you'll find the IMA's 2006 Compensation Report to be a valuable tool for determining fair and appropriate compensation levels for your business. If you have questions, contact Janie Stanley at 217-522-1240, ext. 3020 or email jstanley@ima-net.org. Online access, print, or both, order yours today at . . .
http://www.ima-net.org/reportorder/login.cfm
DATES OF NOTE:
More events may be found at http://www.ima-net.org/calendar.cfm
Tuesday, March 6, 2007
HR Networking Forum
9:30-11:30 am, Holiday Inn,
222 Potomac Blvd., Mt. Vernon
Facilitator: Donna Rogers, SPHR, IMA's HR Consultant. Back by popular demand for the second year in a row, this no fee HR Networking Forum is designed for building relationships with other HR professionals in the manufacturing field. Manufacturing Members and Associate Members of IMA are invited and encouraged to attend. Discuss similarities and differences on current HR issues among peers as well as potential solutions. Finally, provide valuable feedback to the facilitator regarding HR related IMA member services. To register contact: Kim McNamara, 800-875-4462, Ext. 2109, email:
kmcnamara@ima-net.org
Tuesday, March 6, 2007, same location, from 1:00-4:30 pm:
Workplace Trends: Current Issues Affecting Managing Your Employees
Stay up-to-date on the latest employment-related issues facing your organization. IMA's employment law expert Jim Spizzo, Shareholder, Vedder Price Kaufman & Kammholz, P.C., will discuss in depth recent trends, cases and new legislation in this ever-changing field. Bring your personnel/human resource questions! Specific topics to be announced. COST: $125 for IMA members, $100 for additional attendees from same company and $200 for non-members. To register contact: Kimberly McNamara, 800-875-4462, ext. 2109, email:
kmcnamara@ima-net.org
Additional dates for the above mentioned program include:
Tuesday, April 24, 2007
Tuesday, November 13, 2007
Oak Brook Executive Plaza Conference Center,
1225 W. 22nd St., Ste. 140
Oak Brook
To register contact: Kimberly McNamara, 800-875-4462, ext. 2109, email: kmcnamara@ima-net.org
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