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Category: @ Workwww.chicagotribune.com/business/chi-mon-minding-optimism-sep15,0,7487591.story
chicagotribune.com
Minding Your Business
Small Manufacturers Find Bright Spots in Tough Economy
Despite economy, small firms staying nimble, responsive to gain customers, expand businesses
By Ann Meyer
Special to the Chicago Tribune
September 15, 2008
Cari Murray and Doug Kremer have heard it time and again: “Manufacturing is dead in this country. Aren’t you freaking out?”
It’s just the opposite. Murray, who owns sheet-metal fabricator Mellish & Murray, and her husband, Kremer, who co-owns components-maker LaVezzi Precision with cousin Albert LaVezzi, are seeing growing demand for their manufacturing services despite the down economy.
“Our business is thriving,” Murray said. “We’re able to make it happen because we’re nimble, conscientious about labor and have invested a tremendous amount in capital equipment.”
The Chicago area generates two-thirds of the state’s $72 billion in manufacturing output and supports nearly 1 million manufacturing jobs, with more on the way, said Pam McDonough, chief executive and president of the Alliance for Illinois Manufacturing.
While a sluggish economy and high energy prices are conspiring to constrain growth in a number of industries, many of Chicago’s small and midsize family-owned manufacturers are in an expansion mode that’s counterintuitive.
“Trends aren’t tracking what presumptions are,” McDonough said.
The combination of a weak U.S. dollar, sinking labor costs and the steep cost of fuel are tilting the equation in favor of local manufacturers. When quality issues about overseas production are factored in, companies like Mellish & Murray and LaVezzi Precision are well-positioned for growth.
Glendale Heights-based LaVezzi Precision, which is celebrating its 100th anniversary this year, for decades produced components for the motion picture industry. When that industry was threatened by the growth of home videos, the company began moving into the medical-parts market, producing bone screws, dental implants and ventricular-assist devices.
It was a smart move. Sales have been climbing for the past five years, to about $12 million annually, up from $5 million in 2002. The company spent $1.9 million on new equipment in the past year and is on track to spend another $1 million in the year ahead, Kremer said.
Investments paying off
Meantime, Chicago-based Mellish & Murray also has invested more than $1 million in new technology and equipment to boost productivity. It brought in a team from the University of Illinois at Chicago’s Industrial Assessment Center to look at the plant’s energy usage and make recommendations for increased efficiency. By installing new lighting and locking in a two-year contract for electricity with a new provider, Mellish & Murray cut its electricity costs by about 30 percent.
This summer, LaVezzi spent $60,000 on new lighting and replaced air compressors at a cost of $72,000. The improvements should save $30,000 a year.
“New technology and productivity continue to make big cost reductions,” said Ralph Keller, president of the Alliance for Manufacturing Excellence. “That’s why the small manufacturers are doing well. They’re close to the customer. They’re nimble and flexible, and they can configure things to order for customers, where the manufacturers overseas are not.”
With the growth has come new jobs. Mellish & Murray has increased its head count by 10 percent in the past few years, to about 50, even while adding new equipment that reduces the amount of labor required, Murray said.
The company’s growth stems from diversification into new, value-added products and services. The 114-year-old sheet-metal fabricator offers full-product manufacturing of metal cabinetry for schools, hospitals and other institutions, from fabrication to painting, assembly and drop-shipping, Murray said.
“We’re a one-stop shop,” she said.
The company is competing head-on with contract manufacturers in China. But without long-distance shipping, Mellish & Murray can offer a shorter cycle time, and customers can carry less inventory.
“We’ve had a tremendous amount of bidding activity for people who might have gone overseas and are re-evaluating that,” Murray said.
The company began diversifying in 1985, when W.W. Grainger decided to manufacture its own products, pulling its account from Mellish & Murray. Besides scouting for new metal-fabrication customers, Mellish & Murray purchased a manufacturer of strobe lights and launched a new division, Aeroflash Signal. It makes the lighting for general aviation aircraft and school buses.
Diversifying business
About the same time, Murray’s husband was diversifying his family-owned business. Recognizing that the motion picture industry was going through major changes, LaVezzi Precision began targeting medical-equipment customers looking for quality components close to home. After a few lean years, sales picked up, generated by repeat business as well as increased marketing and word of mouth.
LaVezzi’s workforce totals 75, up from 50 five years ago, and it is recruiting for five machinists, Kremer said.
Ideally, the company looks for workers with a minimum of five years experience, but increasingly it has been supplementing less experience with training, Kremer said. It also has an employee-referral program, offering workers $1,000 if they bring in a qualified employee for a highly skilled job.
Wages are competitive, with machinists’ jobs typically paying $70,000 to $100,000, Kremer said. Yet the candidate pool is slim because of a misperception that manufacturing is dead.
“We want to expand our customer base but we are pretty much at maximum capacity,” he said. “We can’t grow without good help.”
Copyright © 2008, Chicago Tribune
Made (again) in America
The rising cost of labor and shipping abroad are driving manufacturing back to the U.S. So are the logistics of dealing with far-flung suppliers.
By Stephanie N. Mehta, global editor
September 11, 2008: 12:34 PM EDT
NEW YORK (Fortune) — Talk of a reverse migration of manufacturing from China to the U.S. has been buzzing across union halls and factory floors, corporate boardrooms and Wall Street.
The cost of shipping outsourced goods from China to U.S. customers has doubled in just two years thanks to high oil prices, and labor costs in China are rising sharply.
“There’s a shortage of technical and managerial talent,” reports Anand Sharma, CEO of TBM Consulting Group. “To attract managers Chinese companies are talking about salary increases of 15% to 30% year-over-year.”
Thomasville Furniture and Exxel Outdoors, a maker of camping gear, have both said they now are making products in the U.S. that they once outsourced to China; both have attributed the move to the soaring cost of transporting goods.
But other longtime outsourcers, such as Regal Ware Inc., a 500-employee maker of high-end cookware (sets go for as much as $4,000), have discovered that manufacturing abroad has another drawback: it isn’t nearly as efficient as they had hoped.
“We either had too much inventory, or not enough” of the products Regal Ware outsourced to China, says Jeffrey Reigle, CEO of the Kewaskum, Wisc.-based company. “We figured there had to be a better way.”
The better way, it turns out, proved to be right under his nose, at two Wisconsin plants where Regal Ware has produced stainless steel pots and pans for more than 50 years.
Cheap isn’t everything
As part of a review of its manufacturing processes, Regal Ware managers decided they could solve inventory woes and serve customers better by largely abandoning their 10-year effort in China. (The company will continue to go offshore for kitchen items that its U.S. plants don’t already have the machinery to make, such as pasta strainers.)
Cheap isn’t everything. To be sure, Chinese suppliers don’t have to worry about a wholesale exodus of customers. China’s trade surplus in July, for example, grew 4%, and export growth climbed almost 27%.
And plenty of manufacturers will continue looking for ever cheaper places to produce. In fact, as the cost of doing business in China rises, many companies – including Chinese firms – are shifting their production to less expensive markets, such as Vietnam.
But Regal Ware’s experience suggests that companies need to think beyond simply chasing the lowest cost supplier. CEO Jeffrey Reigle says the main reason for bringing production home was getting better control of the supply chain.
The Lunar New Year holiday, for example, posed an annual challenge: Factories in China typically shut down for several days around the holiday and workers stream to their home provinces. Inevitably, some workers opt to stay home, forcing factories to spend valuable time restaffing.
“It was always a bit of a nightmare trying to juggle around the holiday,” Reigle recalls.
About three years ago, the company, with the guidance of consultants TBM, started evaluating its operations to become more efficient. A particular concern was how long it was taking to deliver cookware to customers. The overseas manufacturers emerged as a key bottleneck.
Since the company brought production home earlier this year, delivery times to one major customer, Reigle says, have gone from 30 to 60 days to as little as 24 to 48 hours. “We can be much more flexible when we have a supply chain we control,” he says. Because of other strides in efficiency it’s made, Regal Ware hasn’t had to ramp up staffing yet.
Reigle declined to discuss how the shift in manufacturing has affected profits. But he cited the example of one customer that orders stock from Regal Ware but also buys directly from Chinese-based manufacturers. The customer says Regal Ware’s prices are 8% to 10% higher than buying direct from China, but that its cash flow from Regal Ware products has increased 10% partly because the seller can turn over inventory more quickly.
Regal Ware’s heightened efficiency has freed management to seek new sales opportunities. Reigle just returned from a trip to China, of all places, where he says he secured an order with a Chinese direct marketing company.
“We will be shipping American-made cookware to China by the end of September.” he says. He adds with a laugh: “Talk about man bites dog.” 
Sarah & I hung out Friday with the crew of Buena Tile, exhibiting at the Dwell show in Los Angeles. It was a good bonding event for the two companies. I put it on par with a 12 hour road trip to Albuquerque New Mexico.
Arto is now charging for pallets, as we have grown we have had a need to get consistent quality pallets. Since the beginning we have been keeping prices low by asking our neighboring dealers to bring pallets. Here is what they look like.
Arto and crew have been going here since the sixties. Here is the LA Times Story link
It started out as a weed, a plant in the wrong place. Now it seems at home.
We have been working on this project in Arizona for a couple of years now. This is one of the custom homes that appeared in AZCENTRAL.COM. The fence screen in the background is made with our 16×16′s and the slide shows shows off our floor tile. This puppy is waiting for Mike.
This is definitely a historical post. I am moving some from the old blog bit by bit.
Here is the link to his promo piece when he was on Jeopardy.
http://www.sonypictures.com/tv/shows/jeopardy/howdies/4925_love_fo57t.asx
As part of Arto’s Green Initiative we are working to provide products that help our customers meet Leadership in Energy and Environmental Design (LEED) standards. Along with making all of our products from regionally sourced materials, we are proud to announce that three of our more popular colors have passed tests for the Solar Reflectance Index (SRI).
Samples of our pieces in the colors Hacienda and Early Gray were sent to Atlas Material Testing Solutions in Phoenix, AZ along with one of our darker colors, Cotto Gold. We were fairly confident the first two colors would pass easily, but to our surprise so did our Cotto Gold piece. Since this is a very popular color we are very excited to be able to provide specifiers with the option to apply for LEED points by using our product to reduce the heat island effect.
By using tiles like our California Paver and Roman Tile and Paver lines on roofs and hardscapes, builders can earn LEED points for their projects, reduce the heat island effect, and help save energy through lower cooling cost in urban areas. The heat island effect plagues urban areas where lack of vegetation and shade drastically increase temperatures. The unshaded concrete and asphalt absorbs heat overtime and release it slowly sometimes resulting in temperatures more than 10 degrees hotter than the surrounding areas. SRI rated products reflect solar rays away from urban landscapes, preventing heat absorption.
California Pavers & Roman Tile can be adhered to a substrate and Roman Pavers can be adhered, put on a pedestal or set on a sand base.
On roof decks 90% will be pedestal or sand set. On ground level decks it can be all three types of the installation.
Arto was quite pleased with the quick and helpful service provided by Atlas and already has plans to test more of our 30+ different colors
to determine their SRI qualities. The result of our recent test and more information can be found at www.artobrick.com.
After attending a restoration convention at the Hollywood Roosevelt put on by the California Preservation Foundation I came across a flier for the USC Masters of Historic Preservation. On the flier is a picture of a concrete block from the Freeman House. There was an open house for their Summer Program on June 16th. William, and I attended the open house with Sarah, my daughter. I was impressed with the enthusiasm of the program director Ken Breisch. His vision for the program included a philosophy that we all have a responsibility to preserve our history. Everyone from architects, to historians, to the city hall, as well as contractors, manufacturers, and even regular citizens. The involvement of all levels of the Architecture department was highlighted by dean Qingyun Ma’s speech. Coming from China, he brings the idea that we are “Honoring the Past, Inventing The Future.” I like this idea. It is simple and honest. I find that in life we are often trying to do many different things at the same time. Sometimes they seem completely contrary but can actually work and thrive together. One of my favorite examples of two things that shouldn’t work but do is the idea of a custom commodity or the process better known as mass customization. At Arto it is one of our goals to create products that are mass produced in a way that they can be customized to your individual needs. Likewise the past and the future seem like complete opposites, and trying to focus on both could be mind boggling. Still it is the past which has laid the foundation for our future, and so the two are actually very closely linked.
Over the years Arto has been involved with the restoration of many buildings and landscapes. Some of the projects have been done with products William, one of our sales managers, would call “off the shelf.” Other projects are custom jobs. An example of “off the shelf” would be the Roosevelt Hotel in
I am excited and encouraged by the direction the USC school of architecture is moving. Their openness to community involvement inspires me to develop a relationship with them. By helping the restorers of our past today, we can look forward to a strong network of well trained preservationist in the future. I am also motivated to search out (instead of them finding us) opportunities that will help preserve the history of our public spaces and historical buildings in the way only Arto can. Our past is important to us, so is education, and our community. We’ll keep you updated as we do more work in these areas.
-Armen
Arto Brick celebrates 40th Anniversary in 2006
Arto Brick is celebrating its 40th year producing handmade building products in Southern California. In an era when most products are machine made and/or imported Arto Brick is unique in that every one of our products is handcrafted in Southern California. The success of Arto Brick is a testament to the vision and perseverance of one man and the most timeless of American stories – a man with a dream.
Drawing upon his experience as an artist and installer, Arto created handcrafted brick veneer that was both beautiful and easy to install. The product line has since grown to include tile & pavers, wall & pier caps, pool coping, balusters, moldings, liners & decos and we are continually adding new products, styles, sizes, colors & textures to meet our customers’ needs.
Although Arto Brick is well known for its signature “rustic elegance” Arto has always made innovative use of the latest technology. Arto originally worked with kiln-fired ceramics until costs skyrocketed during the energy crisis in the early 1970′s. Always a visionary, Arto seized upon the idea of using concrete to minimize energy costs. Impressed by the beauty and flexibility allowed by this venerable but (then) underutilized material, Arto has used concrete ever since for each and every product.
The newest feature at www.artobrick.com exemplifies both the flexibility allowed by concrete and the spirit of innovation that drives Arto Brick. From the convenience of their home or office visitors to our website can now access a digital color matrix to quickly and easily select custom colors to match existing surfaces or to create a unique look for their project.
We would like to thank all our customers and friends for their support over our first forty years and look forward to many more exciting projects and products in the future.
For more information about Arto Brick visit www.artobrick.com
For media inquiries contact Johnny Vasquez at 310-768-8500 x101 or jvasquez@artobrick.com.
It has been moons since I follwed up with Tom but here he is on his way to Austrila.
http://tomthetravelingtile.blogspot.com/2007/03/en-route.html
My marketing mentor Hugh Hewitt. Better watch out. I picked a 4 minute or so POD cast interview of me by a very heavy association “National Precast Concrete Association”. For those in Ohio those heavy things that can fall on you in a tunnel if not fastened with the correct epoxy and bolt .
here is a direct link to the pod cast.
http://www.precast.org/podcasts/Precast%20Specific/20060711_alajian_hgtv.mp3
here is a link to the page.
http://precast.org/podcasts/index.htm
Very excited today. Just purcahsed my first item off of EBAY. I have spent tens of thousands of dollars on the net for business and persnol items. I have surfed EBAY sites many times but have never bid. I even have an account I set up back in the 90′s, never used it. I needed an air compressor for the plant, got some quotes and choked. I have eaten up a lot homerepo air compressors so I needed a good one and I needed a lot of scfm, 37 plus for one item. Well I bid for the first time and won. Here is a link to my item. LINK
So know you know the reason for the destination. Not really it was Fontana 1 hour east of West Los Angeles. Now the adventure.
I miscaluclted. I got out to Fontna almost three hours ahead of time. Yes that is a lot. That normally is not a problem but had in the car with me three kids of my own and two first cousins the ages 4 to 10 median age 5. Ouch. No problem had my wifes Honda Odessey a very manly vehicle with it over the top GPS. So I searched for parks and historic sites to visit. Did plenty of drive-bys (spelling). Then it happened Jensen-Alvarado Ranch. Drove down a regular looking rsidential street. I thought my wife’s GPS was broken. Looked like a dead end or culdesac depending on your tax bracket. All of a sudden two homes were not where they should have been and there was an entrance to I think 45 acres of what is left of the historic site ranch.
Parked the VAN and got out. Wow its hot. We left Santa Monica / Westside it was what 71 degrees farehit. Got in the VAN had the AC full blast opend the door in Riverside and it was 101. It was hot the kids melted but they were free to run and sweat. We walked the property did not know what to expect. Came to some dirty pigs in the shade laying in some cool mud. Turn the corner and there is a beuatiful house, a sqaure brick building, a tower and white linens hanging up. It was a real surprise. Got closer and there was a docent Mrs. Henry. Very nice she asked us what we were doing here. I said I am here to buy a air compressor and I got out here to early. How much time do you have she said. I said about and hour. So here is the hour tour.
Jensen came from Denmark with a cargo laiden ship to Gold Rush San Francisco. Sold everything married a 16 year old Alvarado of Alvarado Street fame of Los Angeles. Had 12 kids 10 became adults. Had a winery and was the social center of the community. The kids can churn butter, clean laundry and churn Ice cream. There is much more like some military guy named Sherman stayed there. Anycase great people, great history not enough time. Definitley and redo.
Next.
Went to kickthe tires on the air compressor. Oh thats right at this time I had not bid on the compressor. Met a great guy named Mark. He is a master tinkerer.His back yard is a man’s playground trucks, machines compressors,not abandoned being worked on. The compressor looks great I hope it runs and picked up a drill press for one hundred dollars. Good deal. I hope it runs. Then Mark walked me to behind his home the kids had peeled away to the VAN by now. Well behind his home were a few avocado trees. He handed me the bigest avacados I have seen. As I end this note I am rushing to the end so I can go to the bed. We left had pizza. The end. Pictures Below.
I could not post them on the appropiate post. HA
Home & Garden Television
Modern Mediterranean 07/12/2006 9:30 PM HUOUT-101
Modern Mediterranean 07/13/2006 1:30 AM HUOUT-101
It is a common thing now a days for a building products manufacturer company to have product shown on television in the course of a home remodel or tare down. What is uncommon is the size of the company. I am excited to say we are going to be on the air sometime in August. At first I heard July. The link above is the page of the Show “Urban Outsiders” you may know the show as filmed in the UK as “The City Gardner“. I will have more as I know. I do know that there is actual drama with this episode. Matt James the host explodes and is bed ridden while the show is being filmed. He does not explode he gets heat stroke.
oh yeah one more thing. In the show is a new product that we are distributing. A line of glazed ceramic tile from a Mary Bianca a local tile maker in Venice California. He really completes the job to have her Blue Hex with or Spanish Cotto Hex.
Armen
It happened on my exciting trip to Indianapolis for committee week of the NPCA*. Yes exciting, it really is. One example of exciting is that the foundations subcommittee is adding a new category to the ICC code book. Basically a new product has been created that will make available precast concrete basements for residential use. Yes, exciting. Why? Because I hope basements can make a come back. I like basements and I think all children and all men do too. Plus maybe Arto Brick can put veneer on the walls.
Well what finally happened, First Class happened. Not on the way out. I am too cheap. I was converted. On the way out I sat next to a grandmother and her 10 year old grandson. No big deal. But they did not stop talking. That alone is not bad but they spoke a language I did not know, on a non stop flight from Los Angeles to Indianapolis. The boy was in my prized (assigned) window seat, prized because I have not flown enough to not care about looking out the window. I made my normal move and said it is okay that he is sitting in my seat. The grandma thought I was being rude. I sat through my prison sentence and got off the plane and forgot about the experience.
No conversion yet. On the journey home while I moved through stranded passengers going east I came to my self check-in terminal, slid my ID in, pressed a few buttons and then a message in red letters popped up on the screen. Not as impressive as the Red letters in the Bible those are of Jesus Christ?s message. Not nearly as impressive I realized the red letters were not due to my error at the terminal or indicating that my plane would be stuck in Washington DC because of bad weather. UPGRADE FOR 100 DOLLARS for the longest leg of the flight – Minneapolis to Los Angeles. I took the bait and later had remorse because I figured it is really not that good in first class or that bad in coach. No conversion.
Indy to Minneapolis. I sat next to a person who needed a seat belt extender. I am a fat man but I was thin now by comparison. The arm rest was up because the person overflowed into mine and there was attitude to go along with it. I was looking forward to first class but still no conversion.
Minneapolis to Los Angeles. I walked half mile for the plane change. Got on the plane and turned right and could not find my seat and realized I was fooled because it looked the same as coach. First class was not that special. Then I looked at the number it was 12 not 4. Turned around went past the curtain and sat down in seat 4C. I was converted; lots of room, friendly service, free food and, if I drank, free booze. I am converted.
*NPCA ? National Precast Concrete Association
**ICC ? International Code Council
Well it has been a long time since I posted. Feel real guilty.
The picture is of the desert we had at the NPCA party. Real decadent. Loved it. I am sure Caligula did not have a candied star with his name on it. The star did not have my name on it but I did feel special.
NPCA – 2006 CUP Awards Selection
Last year we participated in this competition and received a honorable mention. Let us see how we do this year.
Project : City Side Walk Replacement San Clemente.
William will also be presenting a marketing idea for the Pinnacle awards. We are competing with other innovative ideas. As you know from previous post William is a champion. See Why..
Well as I was searching for a photograph to awe you with. I was blind. So I guessed which one it was. The background is that this house was designed by an old customer of my Father (Arto). The customer recently passed away and I had never seen the work in person. Well I did and it looks great. I may make a page on the www.artobrick.com site that shows off projects. Armen
CA Boom 3 – The West Coast Independent Design Show!
Yes, a name that does not make me think of new concepts. But it is a show just like that. The staff here at Arto Brick are considering this show. But as shows go we are newbies (green). So there you go. We may last minute join but we will at least roam the isles and conferences.
Armen