Manufacturing on the Move

By Andrew Weeks

It’s been said that necessity is the mother of invention, and it’s a statement that seems to hold true for WCCO Belting Inc.

The Wahpeton, N.D.-based company is a progressive rubber belting manufacturer that has contributed not only to the region’s economy, but the state and country’s export market.

In the process it has followed trends, created a few new ones, and has always looked to the future to see how it may impact the industry even further.

“We really had to embrace innovation and we’re crazy about rubber products,” Rod Koch, the company’s vice president of operations, told Prairie Business during an interview in June. “That’s been our secret for 66 years.”

It is companies like WCCO Belting that make North Dakota stand out as a progressive, forward-thinking state.

Adding some numbers into the mix, manufacturing in the Peace Garden State produces about $4 billion worth of product every year, according to Dave Lehman, advanced manufacturing business development manager for the North Dakota Department of Commerce. That equates to about 7% of North Dakota’s total gross state product (GSP) “Numbers aside,” Lehman said, “our manufacturers are a critical support system for other industries in the state such as agriculture and energy.”

But manufacturing has taken some tough hits in the upper Midwest over the past several months, in part because of the pandemic but also because of other challenges that have creeped into the industry, some of which, Lehman said, may have long-lasting effects.

Manufacturing employment was down by almost 9,000 in Pennsylvania over the past year and 6,800 in Wisconsin, according to an article by the Washington Post, while Minnesota was among three states that lost factory jobs over the same time period.

The pandemic has only added to the burden of a stressed industry. In South Dakota, manufacturing saw a 5.3% decrease from May 2019 to

May 2020, according to the state’s Department of Labor & Regulation. In 2019, some 45,200 people were employed in manufacturing in South Dakota, but in May 2020 that number was down slightly to 42,800.

“South Dakota was lucky to not have seen as large of disruptions as some states did regarding the stay-at-home requirements, so South Dakota manufacturers are receiving recognition for being a reliable source of supply,” said Don Cuperus, director of South Dakota Manufacturing & Technology Solutions, an organization that was formed in 2010 in an effort to grow the state’s manufacturers.

Similar things could be said of North Dakota. “Prior to the pandemic, manufacturers in the state were heavily focused on increased automation in their facilities. This ranged from increased back office automation to CNC and robotics installations,” Lehman said. “There was also an extremely heavy focus on workforce. This was due to North Dakota maintaining one of the lowest unemployment rates in the nation. To combat this, manufacturers were focused on workforce efficiencies and aggressive hiring practices.

“While we are still seeing these trends continue, as a result of the pandemic there is additional focus on employee safety and onshoring parts used in our manufactured goods. … Most of the trends we are seeing are centered around employee safety and product procurement.”

Such is the atmosphere in which WCCO Belting finds itself today.

Though the company has adjusted out of necessity because of the pandemic, such as implementing more safety protocols, Koch said no one at the facility has tested positive for COVID and the company has stayed true to its priorities: employee safety and wellbeing, strong client relations, high-end manufacturing and innovation.

Export and Innovation

WCCO Belting’s genesis has roots in the 1950s when Ed Shorma started a shoe-repair business. In the course of events and circumstances, his skills led to a number of other ventures and Wahpeton Canvas Company was formed, better known as WCCO, which today produces rubber belting products for equipment manufacturers and distributors at home and abroad.

It’s best known for its work with the agriculture sector but also does work for a number of other equipment manufacturers. The company’s made-to-order belts are sold all over the world, with the RAPTOR – a high-end use belt – being its most popular. The RAPTOR was introduced in 2012, Koch said, but noted a second-generation belt is on its way that will include features to increase efficiency.

“We pride ourselves on designing custom solutions for various industries,” he said, noting the RAPTOR is the “gold standard” in belts for equipment manufacturers. “I think pretty much every major equipment manufacturer in the world uses it. We really like to focus on the technological advancements in our belts. We have proprietary compounds, proprietary fabrics, proprietary constructions that are patented.

“The way we do things is just a little bit different than everybody else. … We have a lot of proprietary processes, including our curing cycles. It makes us offer a superior product.”

Koch describes “value innovation” as “function over cost” and said “a lot of customers design a new product and then go to a catalog and buy a belt for it. It may work but it’s not really optimal, and so we love it when a customer calls and says they have a new application, or even an existing one, and need a custom solution for it. That's where we really shine. … It's mind boggling to have a $100,000 piece of equipment not functioning right because of a $50 belt that fails.”

Staying ahead of the competition is something in which the company takes great pride. Its success has, in part, been because of its innovative playbook.

“I think it's the ‘necessity is the mother of invention’ mentality that's been here since day one,” Koch said. Customer relations from the Heartland to foreign lands are paramount. “If somebody has a challenge, we love to solve it with them. That's how you form your partnerships and it’s pretty key to what we do.”

Of course, other manufacturers in the upper Midwest also have innovative playbooks and add to the export market while affecting business at home.

Spectrum Aeromed has been manufacturing medical transport equipment for aircraft since 1991, when it opened in Wheaton, Minn. It moved to Fargo, N.D., in 2007 and continues to provide state-of-thecontinued on page 15 continued From page 13 art transport equipment for the aviation industry.

Michael Gallagher, vice president director of production, said the company employs about 26 and cannot claim it has a lot of customers in the region. But, like WCCO, it has many clients in other parts of the country and all over the world, including an office in Germany.

“In order for the company to grow and continue to expand we've had to grab the global market in aviation,” Gallagher said. ”It's pretty easy to do that because we’re already playing in that industry. … I think export, for us, has been a natural growth of the business. … It's a very niche business that we're in; there aren't a lot of companies and not a lot of competition (that manufacture transport equipment for air ambulances). We have probably one main competitor in the U.S. and a few in Europe.”

The company’s overseas relations remain strong, he said, but the past few months have been tough for sales reps to meet with foreign clients like they are used to doing because of travel restriction due to the pandemic.

“Those are not easy things to overcome in the short term,” Gallagher said. “How long is this going to last? … If you have a supply chain that runs through China, that’s a very difficult thing to deal with right now.”

Challenges and Impact

It’s easy to blame COVID-19 for challenges that some manufacturers are facing, but other difficulties in the industry surfaced before the pandemic.

One of the more common challenges, according to Cuperus, with the South Dakota Manufacturing & Technology Solutions, is finding and growing a skilled workforce.

“One of our focuses at MTS is helping companies upskill their employees and deploy automation to become more productive and an employer of choice,” he said. “Most employees enjoy the chance to engage in new things and technologies. There may be reluctance initially but it is easily overcome when they see the positive effects on their jobs.”

He said one of the concerns his office hears is leadership development in the industry. Something MTS has done to help address the issue is developing a training program called Lean Leadership for Supervisors. As Cuperus described it, it’s “a study of leadership intertwined with lean concepts for supervisors and future supervisors to learn so that they can lead at an optimal level.”

During each session different leadership topics are discussed and new tools are introduced. “The small peer group setting facilitates meaningful conversation and group learning for the new supervisors,” he said. “Our goal is to challenge participants to think differently about situations, create new habits for growth, and be more impactful in their position.”

Objectives of the program include determining what leadership style to apply and when to build a culture of engagement; navigating difficult conversations with team members; communicating with clarity, credibility, and confidence; combining goal-setting and accountability to foster growth; and applying Lean concepts to everyday activities and responsibilities to increase efficiency.

Over at Spectrum, Gallagher said the company’s leadership is intact and the manufacturer has remained steady without a lot of turnover, noting a number of its employees moved with it when the company relocated to Fargo in 2007.

Being rooted in the region, even when clients may live in other parts of the country or world, is a big dividend for the communities in which they work and operate.

“I think the biggest thing is that we provide a lot of employment for the local community,” Koch said of WCCO Belting, noting the company employs around 200. “We try to hire local folks.”

Besides manufacturing its own niche products, Spectrum Aeromed outsources to local businesses depending on its needs, which could be a painter or a business that specializes in machining parts.

“Those are all sourced to small businesses in this area,” Gallagher said, explaining that the company has partnerships with a number of businesses in Minnesota and North Dakota. It plans to stay rooted in the Red River Valley.

“We have suppliers all over but for the most part we've always tried to cooperate with other small businesses that are like us, and we support them and grow and work with them to improve our products and processes. … We can do that with anybody in the US or the world, but to work with somebody local that has the same values that we do, it’s just so much easier for us to work with them and get things done. … We have a long history here in the Red River Valley and it's been a good environment for us to operate in.”

He said he views the future of manufacturing in the region, and especially North Dakota, as having a bright future, despite current and perceived challenges.

Technology also will play a part in the industry’s future, thus the need for companies to be continuously innovating.

“It’s hard to say exactly what will happen over the next five years, but I feel manufacturing will continue to experience significant growth,” Lehman said. “Technology will play an increasingly substantial role. Most notably in two areas: one being automation of processes and the other being a greater diversification of cutting-edge product offerings.”