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A Fond Farewell SEPTEMBER 2017 KENTUCKY ASSOCIATION OF MANUFACTURERS


The Goods September 2017 in this issue 03

FROM THE EDITOR

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SITEK: IT in MANUFACTURING

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PRESIDENT’S DESK

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MFG MONTH PREVIEW

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BIPAC: TAX REFORM

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MCM: 2017 COMPENSATION

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WELCOME NEW MEMBERS

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DBL: KINDNESS at WORK

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MEET LEE LINGO

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MSSC: FINDING SKILLED WORKERS

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ADVOCACY CORNER

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KDA: AGRICULTURE & MANUFACTURING

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BB&T INSURANCE BEAT

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MAKETIME SHOP ADVANTAGE

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CRITICAL COLLABORATIONS

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MEP: MAPPING the FUTURE

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FISHER PHILLIPS: WORKPLACE VIOLENCE

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THERMAL ENERGY STORAGE

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INCREASING MACHINE PRODUCTIVITY

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SOKY JOBS: WORKFORCE SOLUTIONS

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KENTUCKYONE HEALTH MATTERS

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DON’T MISS THE 2017 MANUFACTURER & EMPLOYEE OF THE YEAR AWARDS LUNCHEON! 34

The Kentucky Manufacturer of the Year 35 Awards were created to focus attention on the important contributions manufacturers and industry make to their employees, customers and communities. The awards showcase entrepreneurial spirit, community leadership, and policy contributions made by Kentucky manufacturers to enhance the sustainable, longterm prosperity of Kentucky. This year’s 2017 Manufacturer & Employee of the Year Awards Luncheon will be held Friday, October 27, 2017 at the Galt House Hotel, Louisville, KY. REGISTER TODAY!


from the editor

from the editor Summer is over, at least according to the calendar, and fall has arrived. This is my very favorite time of year, and although we will have warm days for a few more weeks, the cool days and crisp nights will be welcome!

There is much good information in this issue, a farewell message from Greg, and news you can use. Please be sure to read and share it with your network. If you have an idea for an article of interest to Kentucky manufacturers, please contact me at 502.352.2485 As we head into Manufacturing or email me at k.ellis@kam.us.com. Month 2017, we are excited about I look forward to hearing from you. the events that are ahead of us and the accomplishments we have We welcome several new members achieved over the past year. Read our in this issue. If you’re not a KAM Manufacturing Month Preview in this member yet, check out the member issue and check out our website for benefits on our website, and call or more information and registration! email me for more information. We’ll have you informed, saving money, and On September 18, we began a new increasing your business in no time! chapter at KAM by welcoming our incoming Executive Director, Lee Have a wonderful autumn, and we Lingo, as the successor to long-time look forward to seeing you at some KAM leader and friend, Greg Higdon. or all of our Manufacturing Month Greg announced his decision to retire Events in October! this year in March, and the search for new leadership was a long and involved process for members of our Board to complete. We look forward to working with Lee and helping him Karen Ellis achieve his goals for the Association Editor, The Goods in the months and years ahead.

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from the president’s desk This is my last opinion piece for the Goods as President and Chief Executive Officer of the Kentucky Association of Manufacturers. I am retiring the end of October after 23 years with KAM. After leaving the Kentucky Senate, I began working as a government affairs employee of what was then Associated Industries of Kentucky (AIK), then moved to become a government affairs partner with Government Strategies representing KAM. I was named President & CEO of KAM in December 2009. Over the years, I have been extremely fortunate to work with some great people who have served on KAM’s Board and Committees as well as colleagues under contract or as employees of the organization. As a group, KAM has faced many challenges in the last 23 years, many of which were in the areas of government policy, legislative and regulatory issues. I am satisfied our team addressed all those challenges in a professional way and I am proud of what we have been able to do with the resources we have had. We have advocated and informed on all levels of government and kept our members abreast of trends in energy, health care, education, and safety. We have been through many tax reform initiatives in my time at KAM— almost too many to count—and we are preparing to participate in another one

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later this year. We have always been able to get our thoughts and input into the final product even though most of the recommendations resulting from the studies have not been considered by the legislature. The current proposals being discussed by this administration have promise and we plan to be in the thick of the discussions. In looking back at various KAM legislative initiatives over the past 10 years, some that come to mind of which I am most proud include a Reinvestment Act passed during a special legislative session in 2009 that provided up to 100% credit against the state income tax for a minimum investment of $2.5 million with a retention of 85% employees. It also provided for funding of costs of eligible skills upgrade and training. I felt this was strong state and legislative recognition that proved in addition to seeking new businesses, we cannot forget our existing manufacturers. I am proud of the work the Unemployment Insurance Task Force did in stabilizing the UI Fund in 2010 after the 2008 recession stripped the Fund to its core. The group worked hard to stop the bleeding and restore funds to previous levels. Kentucky, like most states, struggled through the great recession of 2008 and beyond. The manufacturing sector took some real blows, but in Kentucky, we


Kentucky, with its geographic location and system of interstates, rail, and rivers, gives us the potential for a tremendous competitive edge that we at KAM have fought very hard to retain and expand over the years. A real challenge for our future will be to maintain that edge and the best way to do that is to continue to maintain and expand our infrastructure. KAM is currently participating in a coalition of local officials, small businesses and chambers of commerce to do just that and our team will be involved with organizing that legislative initiative.

as well as Career Pathways have been issues to which we have dedicated a lot of time over the years with some success but there is much more to do. It is so important to our members to have a steady pipeline of skilled workers to fill their needs in this age of advanced manufacturing. I am very proud to have been a part of manufacturing during a period when employment has transitioned from a “job” to a “career.”

president’s desk

managed to fight back and emerge even stronger. Our current manufacturing employment levels are over 243,000, higher than they have ever been. Our emergence as a national player in the automotive industry is something we all take pride in. Our auto manufacturers include Ford Motor Company in Jefferson County, Toyota in Scott County and General Motors in Bowling Green and that doesn’t include the auto parts and distribution businesses, which have exploded in recent years.

It is bittersweet to be leaving, happily anticipating more time with family & friends in Fancy Farm, but aware of so much work left to be done. I am confident that my successor, Lee Lingo, our Board of Directors, and our current team at KAM will continue working hard and advocating for manufacturing in Kentucky. Until we meet again . . .

KAM, through its sponsorship of the Energy Conferences over the past several years has brought attention to energy needs, efficiencies and savings that can be achieved at many of our older manufacturing facilities. The rise of energy costs in Kentucky is a new thing, and companies are turning to alternative methods of providing energy to supplement their energy needs and, at the same time, save on their bottom line. Workforce Development and Training

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long road to tax reform Andrew Blascovich, Director of Political Affairs, BIPAC

At the start of his administration, President Donald Trump identified several major legislative goals. These ranged from repealing and replacing the Affordable Care Act (Obamacare), to funding for infrastructure, cutting regulations, and tax reform. While the attempt to repeal and replace the Affordable Care Act has stalled, comprehensive tax reform has moved to center stage as the next legislative priority for the administration and Congress. Leadership in Congress and President Trump have all indicated in both messaging and rhetoric that tax reform is a priority.

In Congress, Republicans have said the most recent jobs report showed the need for tax reform that can boost economic growth. In response to this jobs report that showed slowing year over year, House Ways and Means Chairman Rep. Kevin Brady (R-TX) said, “Working together with President Trump and our colleagues in the House and Senate, I’m confident we can deliver pro-growth tax reform this year that improves the lives of all Americans.” Economic indicators like job creation could be the keys to spurring a somewhat stagnant Congress to action. Since the last comprehensive tax reform over thirty years ago, the tax code has not stayed as dynamic as the modern economy has become. Whether the tax reform proposed by President Trump is passed this fall seems very doubtful as the last similar tax reform that was accomplished by President Ronald Reagan took several years to craft and negotiate. The tight timeframe proposed by President Trump and the difficult agenda facing Congress post-recess make tax reform passage for this fall even more doubtful.

President Trump has signaled that he wants to sign a tax reform bill in the fall, but that time line is looking more and more unlikely. Congress returned from the August recess with several pressing issues that need to be passed quickly. These range from the need to raise the debt ceiling to maintain the country’s credit rating, to a spending bill to keep the government operating after September, to Hurricane Harvey and Irma recovery funds. Passing a comprehensive tax reform bill will be further complicated considering that whatever spending bill For questions or more information, is passed will more than likely only fund contact Andrew at blascovich@bipac.org. the government through December. This could impede the ability to debate tax reform as any further government spending will be a point of contention between deficit hawks and immigration advocates, if President Trump follows through that any long-term government funding bill must include funding for his proposed border wall with Mexico. 6

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Welcome to our newest members! kam board

EXECUTIVE COMMITTEE John Malloy, Chair LG&E-KU, Louisville Mike Baumgardner, Immediate Past Chair McCoy & McCoy Laboratories, Inc., Madisonville Douglas Irvin, Treasurer Darling Ingredients, Cold Spring Chris Driver Harshaw Trane, Lexington David Hall CSX Transportation, Louisville Greg Higdon, President & CEO Kentucky Association of Manufacturers, Frankfort Jackie Hogan Toyotetsu America, Somerset Diane Snow Fluor Federal Services, Paducah Richard N. Whitaker Sumitomo Electric Wiring Systems Inc., Bowling Green DIRECTORS

Bluegrass Rusty Ashcraft, Manager, Government Affairs & Environmental Policy, Alliance Coal, LLC Joe Blackburn, Plant Manager, Schneider Electric USA, Inc., Lexington Chris Driver, Filtration Program Leader, Harshaw Trane, Lexington Greg Higdon, President & CEO, Kentucky Association of Manufacturers, Frankfort Mike Peffer, Xerox, Lexington Rejeana Thompson, Aichi Forge USA, Inc., Georgetown South Central Jackie Hogan, General Manager, Toyotetsu America, Inc. Somerset Carroll Knicely, Jr., General Manager, CHUHATSU North America, Inc., Glasgow Richard Whitaker, Vice President, Sumitomo Electric Wiring Systems, Bowling Green Eastern Duane Danis, Director, Services Division, Boneal, Inc., Means Jason Macak, Engineering Manager, Marathon Petroleum Company, Catlettsburg Randy Norwood, Plant Manager, Regal Beloit America, Inc., Morehead

of Campbellsville

Louisville Leanne Cunningham, VP, GM, Brown-Forman Corporation David Hall, Resident Vice President, CSX Transportation Earl Jones, Senior Counsel, GE Appliances Gregory Kosse, General Counsel, Kentucky Farm Bureau Mutual Insurance Brian Long, Plant Manager, Dupont Louisville Works John Malloy, VP, Customer Services, LG&E-KU Moriah Ogilvie, Director, Anthem Blue Cross-Blue Shield Chris Perry, President & CEO, KY Association of Electric Cooperatives John Rainey, Director of Governmental Affairs, Altria Corporate Services Fred Thome, Plant Manager, Assembly Operations, Ford Motor Company Paul Weis, Manager, Business Services, LG&E and KU Northern Douglas Irvin, VP of Environmental Affairs, Darling Ingredients, Inc., Cold Spring Carl H. Wicklund, Retired, Hebron Western Robert J. Baker, President, Campbell Tobacco Rehandling, Mayfield Mike Baumgardner, President, McCoy & McCoy Laboratories, Inc., Madisonville Steve Loyal, VP Government Affairs, Atmos Energy Company, Owensboro Diane Snow, Internal Assessment Lead, Paducah Deactivation Project, Paducah

KAM TEAM MEMBERS

We welcome you to KAM and look forward to hearing from and working with you!

Greg Higdon, President & CEO Lee Lingo, Executive Director Karen Ellis, Operations & Communications Director Matt Ellis, Director, Web Development & Creative Design Sherry Harrod, Executive Assistant Rachel Bayens, Legislative Agent Carl W. Breeding, General Counsel Mary Breeding, President, Foundation for Kentucky Industry (FKI) Donna Brown, Legislative Agent Lloyd “Rusty” Cress, Executive Director, KAM Chemical Industry Council Prentice Harvey, Legislative Agent Mike Helton, Advocacy Team Leader Bert May, Legislative Agent Dustin Miller, Legislative Agent Kelly Shasky, Legislative Agent Mike Shea, Legislative Agent Molly Sutherland, Branding Consultant

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getting to know lee lingo

Executive Director, Kentucky Association of Manufacturers With Greg Higdon’s announcement in March of this year to seek a successor as he moved toward retirement, a search began in earnest in April. Many candidates applied, with excellent credentials, experience, and recommendations from trusted sources and KAM partners and collaborators. The Search Committee--consisting of Greg and Board members Jackie Hogan, GM, Human Resources, Safety & Environmental at Toyotetsu America, Inc.; Rich Whitaker, Vice President, Sumitomo Electric Wiring Systems, Inc.; and Chris Driver, Filtration Program Leader, Harshaw Trane—faced the difficult task of narrowing the search to a manageable number through phone interviews and preliminary in-person interviews. Eventually, one candidate stood out from the rest with a unique combination of experience, energy and enthusiasm. That candidate was Lee Lingo, then President of the Hopkins County Regional Chamber of Commerce in Madisonville, KY. With two decades of experience in non-profit management, sales, and marketing, Lee had successfully worked with stakeholders at the local, state, and national level to strengthen economic opportunities in the Madisonville-Hopkins County area. A graduate of Murray State University, as well as the US Chamber of Commerce’s Institute for Organizational Management, Lee has served on many Boards and committees and

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understands the unique challenges of that environment. As a member of the US Chamber of Commerce’s Infrastructure, Transportation, and Logistics Committee, Lee has been a strong advocate for the completion of Interstate 69, and is currently a member of the I-69 Industrial Alliance. Let’s get to know a little more about Lee in his own words . . . KAM: What excited you most about the opportunity to lead the Kentucky Association of Manufacturers?

Lee: I have a passion for building organizations, establishing strong relevance and striving toward significance. KAM has a provenance of over 106 years representing more than 243,000 employees, 3,329 facilities and $37 billion in Kentucky GDP. With manufacturers, suppliers and partners in many counties of the commonwealth and more looking at Kentucky every day, we have great coverage as well incredible opportunity for growth. There is a LOT to be excited about. I’m also truly looking forward to listening to our members to understand better what you need from KAM to be more successful. Your success is our success. KAM: What do you see as your biggest challenge in taking on this position?

Lee: One of the great challenges an organization faces is the status quo. The


has been for you in this position. What have we achieved?

Lee: We celebrated the commitment and leadership President & CEO Greg Higdon provided KAM and wished him well in his retirement.

meet lee lingo

status quo is not a final destination, it’s a rest stop on the way to significance. The challenge we face is determining what the future of manufacturing in Kentucky looks like and the path to achieving it. Let’s not define KAM by what it has been, or is now, but what we want it to be.

We developed a new strategic vision Change can be hard and is always and plan with an eye on the future of stressful and uncomfortable but it manufacturing growth, leadership and brings new growth, new opportunities excellence in Kentucky. and new energy. KAM moved beyond an email or KAM: Who is your role model, and why? publication to a personal face and a handshake with many new businesses. Lee: I don’t know that I have a singular The power to effect change and or public role model but there are grow comes from collaboration and people I connect with, observe and engagement. In 2018, KAM led the way admire every day that would fall under by engaging our members where they that moniker. I respect individuals conduct their business. We took the who seek first to understand, to hear opportunity to meet many of you and before being heard. I respect those listen to your needs, on-site, in a way who respect others. I respect those who we haven’t been able to in a long time. find ways to work through challenges to accomplish goals; an attempted failure I am really looking forward to getting to is far better than a stillborn failure. And I know you, our members, in the coming respect those whose dreams, goals, and year. ideas know no boundaries. Boundaries impose unnecessary restrictions and Please contact Lee at l.lingo@kam.us.com limit the chances for success. or call 502.352.2485 with questions, concerns or to set up a time to meet and get to know the new face at KAM! KAM: What’s your superpower? Lee: I can see the future. My Gallup Strength Finder assessment leads with futuristic. I focus on the big picture and long-term growth. My wide field of vision enables me to find inspiration and connect dots many people don’t see. I benchmark great organizations looking for exceptional initiatives and programs that can be adapted for use by my organizations. KAM: We’re sitting here a year from now, celebrating what a great year it

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advocacy corner All through the summer we have been talking about the possibility of a special legislative session that would include pension and tax reform discussion, sometime after August. This past month, the Governor announced he would call the special session but for pensions only. This leaves more than a little uncertainty depending on what the pension fix might eventually be, and what it will cost. Tax reform remains a mystery and Kentucky’s financial picture is not any better as we head into the 2018 budget session.

The Consensus Forecasting Group met in August and recalculated their estimates for the second year of the current biennium, lowering revenues by $200 million. The Governor announced acrossthe-board cuts to most state agencies of 17.4%. In addition to addressing the $200 million shortfall, the Governor has chosen to replenish the rainy day fund by $125 million. As in most recent budget cuts, Education, Corrections and Medicaid have been exempted. The administration hopes to finalize the budget reduction plan by September 25.

Consultant Recommendations for Kentucky Retirement Systems

The Administration’s consultants on pension reform, PFM, presented their third report to the legislature in August. The first two reports focused on why Kentucky’s public pensions were in the trouble they were in and this final report contained the recommendations for the systems going forward. The Kentucky Retirement System includes the Kentucky Employer Retirement System (state employees), Kentucky Teacher Retirement System, City and 10

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County Employee Retirement System and the Kentucky Judicial Retirement System.

To summarize, PFM recommends the following changes, as stated in the report: • All future Kentucky state and local government employees would have access to a balanced set of retirement benefits providing positive income replacement levels, including: o Social Security participation (not now available to teachers and many local government public safety employees) o Additional defined contribution (401K style) plans with significant minimum employer contributions and additional employer match o Retiree health care coverage consistent with that provided to active employees • All current KY state and local government employees would have the value of their accrued benefits maintained and receive benefits for future service as good as or better than those available for future hires. • All retired KY state former employees would receive at least the same benefit level they were guaranteed upon retirement, and would see significant improvements to the funding of their benefits - strengthening the solvency of these vital commitments. • In addition, all Kentucky stakeholders would begin to see steady and meaningful restoration of fiscal stability to the Commonwealth’s retirement systems, with greatly reduced risk of renewed pension crises in the years ahead. In turn, this progress would ultimately lead to more resources available for critical investments and services, or fair employee raises going


KENTUCKY ASSOCIATION OF MANUFACTURERS

advocacy corner

forward, and for improved financial groups, called the Kentucky Infrastructure health and credit strength. Coalition (KIC), who have joined together to push for increased transportation Legislative leaders have been meeting funding. Kentucky has a $205 million with administration officials to review the annual backlog in maintenance and recommendations. It is not expected that pavement needs and $400 million in new all the recommendations will be accepted. project needs to keep the system up to The House, Senate and Governor have date and maintain the geographic edge in said they want to recommend a package logistics we currently enjoy. You can learn they believe will sell politically and that more about the Kentucky Infrastructure everyone can fully support before calling Coalition at kickstartky.com. the legislature into a special session. The special session is anticipated to be Regular Session held sometime in late October or early With all the talk of pensions and tax reform, November. It is unclear if they will also we cannot lose sight of the 2018 budget recommend funding options at that time. session. This is the long (60-day) session and is highlighted by adopting the state’s Tax Reform two-year spending plan. We anticipate Discussion of tax reform and what that that at some point the budget, pensions might look like has taken a back seat to and tax reform will all come together, public pension reform for the moment. We either at the end of the regular session or anticipate that once the pension funding possibly another special session. Either needs are more defined, tax reform and way it won’t be easy and there will be a lot preparation for the next biennial budget at stake for manufacturers. will again take center stage, although it is not clear if that will be in the 2018 session Other issues we expect this session or via a second special session. include workers compensation reform, which fell short during the 2017 session. Tax reform has been one of the Governor’s During the interim, interested parties key initiatives, both during his campaign have worked together on a proposal that and since taking office. Key principles for restores employers’ subrogation rights; the administration include broadening streamlines litigation and simplifies the the tax base and moving from an income- process; revises the length of benefits based system to a consumption-based away from lifetime medical benefits, system. The Governor said early this year excepting specific permanent injuries; that tax reform could not be revenue and reconfigures weekly benefits for neutral with the pension problems and temporary total disability, among other the Commonwealth’s financial condition, changes. but legislative leaders have recently said they will push for a revenue neutral plan Additionally, the Education and Workforce and prioritize spending. I anticipate that Development Cabinet has been discussing we will see lower income taxes and closer Unemployment Insurance reforms to scrutiny on current sales tax exemptions. make costs and benefits competitive with other states. Transportation infrastructure reform will certainly be a part of any tax reform It promises to be a busy, but interesting initiative. KAM is a key partner in a large next six months. Please feel free to contact coalition of local officials, manufacturers, us with any questions or comments. chambers of commerce and advocacy

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bb&t insurance beat

What’s Required for Employer-Sponsored Tuition Assistance Programs Under Internal Revenue Code section 127, an employee may generally exclude from income amounts received pursuant to an employer-sponsored tuition assistance or educational assistance program (EAP) that was established in order to fund employee education-related expenses, subject to the maximum limitation discussed below.

The IRS, in Notice 96-68, has defined a graduate level course as “… any course taken by an employee who has a bachelor’s degree or is receiving credit toward a more advanced degree, if the particular course can be taken for credit by any individual in a program leading to a law, business, medical, or other advanced academic or professional degree.”

This exclusion was made permanent by EGTRRA 2001 following a number of According to IRS guidance, a course will extensions in preceding years. be considered to begin on the first regular day of class for the courses offered during Amounts received under an EAP may be that term. The date upon which a student excluded whether or not the educational registers for a course has no effect on the expenses are job related. date the course is considered to have started for purposes of the Section 127 An employee cannot exclude from income exclusion. more than $5,250 in educational assistance benefits in any calendar year. The following requirements must be met by an employer-sponsored educational “Educational assistance,” for purposes assistance program (EAP) to receive taxof an employer-sponsored educational preferred treatment: assistance program (EAP), is generally • Written plan: the program must be a defined in IRC Section 127 as an employer’s separate written plan of the employer payment of expenses incurred by an providing educational assistance for employee for education. Expenses such as the exclusive benefit of the company’s tuition, fees, books, supplies, equipment employees. A sole proprietor may treat and employer-provided courses of himself as employer and employee instruction including books, supplies and and a partnership will be treated as the equipment are all included within this employer of all self-employed partners. definition. • Nondiscrimination: the program must benefit employees who qualify under Educational assistance does not include a classification set up by the employer payments for tools or supplies that the that does not discriminate in favor of employee may keep after finishing the highly compensated employees, as course of instruction, as well as meals, defined in IRC Section 414(q). Generally, lodging and transportation. Payment for highly compensated employees are 5 any course or education involving sports, percent owners or members of the topgames or hobbies is not considered to be paid group of employees. Employees “educational assistance.” covered by a collective bargaining

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• •

number of employees currently working, the number of employees eligible to participate in the plan, the number of employees actually participating, the total plan cost, and the number of highly compensated employees. In addition, the employer was required to identify itself and state the type of business in which it is engaged.

healthcare

agreement may be excluded if educational assistance benefits were the subject of good faith bargaining. More than 5 percent owners: the class of shareholders and their spouses and dependents, each of whom owns more than 5 percent of the employer’s stock, cannot receive more than 5 percent of the educational benefit amounts. Employee choice: a program cannot offer employees a choice between educational assistance and other benefits that are includable in income. Funding: an educational assistance program may be funded or unfunded. Notification: eligible employees must receive reasonable notification of the program’s availability and benefits.

Notice 2002-24, however, suspended these reporting requirements with respect to EAPs and certain other employee fringe benefits. Employers are relieved of the obligation to file under Section 3039D until the IRS provides further notice. Notice 2002-24 superseded Notice 90-24, which exempted plans under Section 127 from furnishing the additional information concerning highly compensated employees that was required by the TRA ’86 amendments to Section 6039D.

A plan will still be considered in compliance with these requirements even though different types of educational assistance are used more than others or because successful completion of the course or obtaining a certain grade is required or This reporting relief applies to any plan considered in the process of obtaining year that begins prior to the issuance of reimbursement under the plan. further guidance on this subject by the IRS. Further, a plan will continue to meet the requirements of Section 127(b) even if it provides benefits to former employees. Included in the category of former employees are retirees, persons who were unable to work due to disability, persons whose positions were terminated due to a corporate downsizing, persons who left the employer voluntarily and employees who were involuntarily terminated from their positions. Until 2002, an employer who maintains an Educational Assistance Program under IRC Section 127 was required to file an information return (Schedule F to the Form 5500) for each year that the program is in effect.

Notable Changes to the Kentucky Group Health Insurance Market to Consider: 1. The vast majority of employer groups are now renewing in December and January. It will be critical that planning is done over the summer months to strategize and prepare in order to be thorough. 2. “Grandmothered” groups – those who have been able to keep the same medical plan since 2013 with little or no changes to benefits – are expected to have average increases ranging from 15% to 20% this year. 3. If you have a plan from Baptist Health Plan (formerly Bluegrass Family Health), we encourage you to contact Daryl Carlson at (859)422-3885, Collin Barber at (859)422-3884 or Griffin Meredith at (502)631-9600 for recent announcements.

The information return had to include the

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critical collaborations

M. Dianne Leveridge, PhD, PMP, Adjuct Faculty, Indiana Wesleyan University

Students return to school during September, marking time toward their educational and career goals. For businesses using the calendar fiscal year, September also marks the profit-making year 75% complete. September also marks the beginning of a new academic year for educational institutions. Governments begin the fiscal year in July, making September a beginning toward moving government programs forward. Connecting these movements toward closing the skills gap involves collaboration among partners. Businessled collaborations enable educational programs to meet industry needs, closing the gap between available jobs and skilled team members capable of filling those jobs. Known as apprenticeships, for centuries Europeans developed Industryled collaborations, closing the gap by developing team members with desired industry skills prepared to meet industry needs. Recently American industries adopted and hybridized European models with similar, promising results on a faster schedule (Isaacs, 2016; Zarkesh, 2004; Kentucky Chamber of Commerce, 2015; KYFAME Board of Directors, 2015). Traditionally, programs intended to close skill gaps have focused on customized workforce training, educator-led traditional skills training, and government programs within unemployment offices (Dymock & Billett, 2010; Kentucky Chamber of Commerce, 2015; Fox, 2015). Industry leading the collaboration remains a critical component enabling success, measured and continuously improved (Zarkesh, 2004; Bond, Ed.D., 2013). Success metrics include, and are not limited to, student retention, employment after program completion, applicant pool expansion, applicant acceptance growth, engaged business growth, and program sustainability year after year (KYFAME Board of

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Directors, 2015). Successful strategic collaborations between government, industry and education collect data on these performance metrics, develop methods to improve upon these metrics, and establish definitions of successful metric evaluation, with industry leading metric development and their critical collaborators delivering results toward those metrics (Greenstone & Looney, 2011). Further, industry-led partnerships blending technical training with soft skills into academic program credentials meet standards employers expect from team members (Hanks & Williamson, 2002; Zarkesh, 2004; Kentucky Chamber of Commerce, 2015). It is important to note many of these partnerships, because they are industry-led, instead become collaborations designed to develop students into productive, collaborative, mature, team members. As the new educational year begins, and the fiscal calendar year moves toward the final quarter, critical collaborative efforts closing the skills gap remain a national, state and local priority. Employers lead the way, partnering with educators relying upon those employers providing student employment opportunities, academic program feedback, and program growth. In the end, successful programs develop students into active, skilled team members as a pipeline directly into industry positions. Through these types of industry-led collaborations, employers become programmatic leaders, and educational and governmental institutions become program providers (U.S. Chamber of Commerce Foundation Center for Education and Workforce, 2015; Kentucky Chamber of Commerce, 2015; KYFAME Board of Directors, 2015). Maintaining and increasing global competitiveness depends upon industry leading critical collaborations developing team members capable to close the industry skills gap.


education matters

makerminded begins second year in kentucky Brittany Garrett, Program Director, MakerMinded KY

The second MakerMinded competition has officially kicked off in Kentucky along with the start of the 2017-2018 school year. MakerMinded’s online platform connects middle and high school students to over 150 leading-edge STEM and advanced manufacturing education experiences. The participating students and schools simultaneously become engaged in a student-driven, pro-manufacturing campaign and competition. MakerMinded’s goal is to provide students access to the right programs that will encourage and prepare them for further education and careers in advanced manufacturing. The program was first launched last year by LIFT (Lightweight Innovations for Tomorrow), in partnership with KAM, the Foundation for Kentucky Industry, and Tennessee Tech University’s iCube.

event and prizes for the schools and students accumulating the most points for completing the most activities.

Over the summer, 18 manufacturers across the state committed to connecting with local schools through MakerMinded, including 4 locations who will be hosting launch events this fall (Armor, USA; GE Appliances, a Haier company; Safran Landing Systems; and Toyota Motor Manufacturing, Kentucky). The MakerMinded Local Activities Page now features a map that geolocates any manufacturer featured on the platform so schools can easily identify companies closest to them. Other things to note for this school year include the #KYisMFG Student Video Contest, a new activity point structure, an updated activity submission page, and a newly organized and searchable activity portfolio, making The MakerMinded platform includes a it easier for students to find local activities searchable database of both national and programs that match their skills and and local student programs, including interests. online and in-person experiences, from manufacturing facility tours to Anyone (student, educator, parent, engineering design challenges to manufacturer, etc.) who is interested technical skills competitions. As students in getting involved with MakerMinded complete activities and programs, should reach out to Brittany (KY State schools receive points and compete Program Manager) at BrittanyGarrett@ against other schools in Kentucky. The makerminded.com and start exploring the competition culminates in a recognition platform at ky.makerminded.com. KENTUCKY ASSOCIATION OF MANUFACTURERS

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buildings as a resource

Thermal Energy and Demand Response Considerations Ty Vierling, Energy Services Leader, Harshaw Trane

Businesses have a lot to consider when it comes to energy, reliability and utilities. The significance of finding a solution that integrates cost, reliability, and corporate responsibility is not only increasingly important but is becoming a core business driver. Demand response offers businesses a substantial financial opportunity. The solutions that facilitate demand response also often improve resiliency. Have your cake and eat it too! Another important consideration is that commercial facilities utility rates are based on both usage and time of usage. While usage charges have remained steady, time of usage charges are up 50%. What does that mean for your facility? Manufacturers will benefit from looking at buildings differently. As the structure of power supply continues to evolve, it’s important to start looking at your building as a resource. Buildings outfitted with appropriate HVAC, controls, and thermal energy storage reduce the risk of downtime, reduce the cost of production and can easier maintain sustainability expectations.

store energy in off peak hours, specifically at night, major savings can be generated. For example, ice tanks are a beneficial form of TES that provides multiple advantages over traditional airconditioning. This process uses standard cooling equipment, plus an energy storage tank to shift all or a portion of a building’s cooling needs to off-peak, night time hours. During off-peak hours, ice is made and stored inside energy storage tanks. The stored ice is then used to cool the building occupants the next day. You still make the ice ahead of time, at night. But, the electricity you use to make that ice, is far less expensive at night than it is during the day. TES offers flexible control, stored emergency cooling or redundancy, resiliency and future proofing for smart grid preparedness. FLEXIBILITY Occupants can be cooled exclusively by ice, exclusively by the chiller or by the chiller and the ice depending on your electrical rates, demand charges and demand response strategies. During night-time off-peak hours chillers, can charge and store ice inside the energy storage tanks. During spring and fall when temperatures are milder, and cooling demands are lower, the ice can exclusively cool the facility.

What is Thermal Energy Storage (TES)? Through differing technologies, excess thermal energy, in the form of heating or cooling, is collected for later use for an individual building or in multiple buildings. Because commercial utility rates are often based on usage and REDUNDANCY demand peak, using TES to create and With energy storage, you always have

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extra cooling on standby. Your building of your HVAC operations and essentially will stay cool during chiller and other become a virtual power plant in the eyes of the utility. When you shift to cooling maintenance events. with ice storage only or cooling with chiller and ice you will get paid for helping RESILIENCY In a power outage, people in your free up more power on the grid when it building can keep cool, productive is needed most. Advances in technology and comfortable. A backup generator are creating a market for additional types can run controls, pumps and fans while thermal storage. No matter the type of the situation is evaluated. With stored thermal storage used, it is important that cooling, there’s no need to oversize your your facility is used as a resource to drive backup generator to run chillers. business results and not hinder those goals. To learn more about TES, contact Harshaw Trane at 502.499.7000. DEMAND RESPONSE If you’re operating an energy storage system, utility sponsored demand response programs can bring additional revenue. Software designed to forecast power load can communicate to the grid operator that your building is dropping its cooling load. With the right system in place, you can easily change the mode

50

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McM offices in 3 states Expert guidance, beyond the bottom line. KENTUCKY ASSOCIATION OF MANUFACTURERS

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workforce solutions for the commonwealth Mike Wilson, Vice President of Sales, SOKY Jobs

“Ask any of my former colleagues “A company’s employees are the most and they will tell you, Christina valuable recruitment tool they have,” said Christina. “Through our state of Dawson is a problem solver...” the art production process we capture Founded in 2016, SOKY Jobs is a Southern Kentucky born workforce communications and marketing firm. “Kentucky is currently in the midst of a highly competitive jobs market. Companies are struggling to find the talent needed to sustain and grow their business. I understand the current workforce climate because I’ve observed it closely over the past six years,” said Christina Dawson, SOKY Jobs founder & CEO.

real unscripted stories of individual people and in turn paint the picture of a company’s culture in a way that cannot be anything but authentic. It’s truly powerful!”

According to Senator Mike Wilson, Vice President of Sales at SOKY Jobs and a five-year Chairman of the Senate Education Committee, “Kentucky has a low unemployment rate and a booming economy. Because of that, a gap exists between the number of open positions and the number of employable people in our region. We develop customized, strategies for our clients that close that gap. Not only do they begin receiving more qualified applicants, but they begin to see a new pipeline of potential candidates.”

After working for two years in the manufacturing industry and then developing a successful pilot Workforce Development Program at the Bowling Green Area Chamber of Commerce, Christina was determined to continue the critical work that she had been doing at a more advanced level, even if it meant taking the risk of starting her own SOKY Jobs doesn’t rely on advertising business. through traditional platforms that speak to job seekers who are actively seeking SOKY Jobs advances workforce employment. They advertise jobs on development efforts across the region the same platforms that all businesses and beyond by leveraging the powerful market their products and services. This and cost-effective strategy of social media enables them to consistently engage advertising. Through custom-produced with candidates who were not initially job photography and video, SOKY Jobs uses seekers. According to Christina, Statistics real-life examples of local employees and show that over 50% of people who say share their personal stories with potential that they are completely satisfied in their job seekers. jobs will still consider what is out there

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soky jobs

and they take full advantage of that is tedious and complicated. That’s why through social media advertising. SOKY Jobs offers a specialty practice designed to take care of all a company’s SOKY Jobs has recently launched a compliance needs, from applications, to new division related to tax incentive calculations and reporting to the state compliance. Working for a start- and local municipalities. “With minimal up manufacturing company and in interaction with your staff, we will collect Economic Development, Christina has ALL of the economic incentives that your personally filed KBI applications. She company is eligible for.” has also witnessed billions in incentive announcements across the state. “It’s Christina also says that one of the main exciting! Millions of dollars in incentives reasons companies fail to file for final are approved in our area, but what no approval on their tax incentives is because one talks about is the difficulty of the they have failed to meet their hiring reporting process, how to file the proper requirements. SOKY Jobs brings a total paper work, ensure final approval and solution to businesses who are forgoing then actually collect the money, said millions because of problems that can be Christina. “When I began researching this solved. Extensions can be requested and further I uncovered shocking statistics. are most often approved. Additional time I wasn’t the only one who struggled in combined with innovative job marketing seeing the process through. More often strategies provided by SOKY Jobs can than not, companies never receive this ultimately equal millions of dollars. money. Over 50% of these dollars are never collected. I’m on a mission to For more information on SOKY Jobs change that.” visit www.sokyjobs.com, or find us on Facebook, Twitter, Instagram, Snapchat SOKY Jobs understands that today’s tax and YouTube. and financial managers are overwhelmed with commitments and deadlines. Month- For questions and appointment requests end close and forecasting deadlines are please contact: Mike Wilson, SOKY Jobs, intense and can consume the bulk of a Vice President of Sales by sending an financial manager’s time. This reporting email to mike@sokyjobs.com.

Job Searching at a HIRE level.

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insight

Importance of IT in Manufacturing Mark Dildilian, Director, Marketing and Business Development, SITEK Inc. With the vast array of products available today, the manufacturing sector must continue to look at the changing dynamics of technology and its customer base. Whether a manufacturer produces consumer goods such as smartphones, or toothpaste, or durable goods such as refrigerators or cars all manufacturers continue to be affected by flexibility in products, quality, profit margins, reducing time-to-market and other issues. In short, it is no longer business as usual in terms of embracing the principles of Kaizen, the Five R’s – right product, right quantity, right price, right quality, right time or other concepts to include “5S” programs for productivity. As a key foundational component, the contribution provided by Information Technology has had a significant impact on the manufacturing sector. IT as we know it today has provided the means to improve product quality, safety and bring economies of scale to manufacturing processes. “Information technology has changed the way we communicate and do business. It has become much easier to streamline processes and cut down operational costs. One of the biggest industries to gain from IT is the manufacturing sector” (Alex Wilson – 6 important Information Technology Solutions for the Manufacturing Industry, 2017)

that has assisted manufacturers in focusing resources more efficiently. These include: • Ability to monitor production and efficiently “shift” product lines • Developing systems/processes that improve delivery time-to-customers • Streamlining operations focusing on utilization of capital eliminating redundancy • Faster time-to-market on new products and implementing new product concepts Nowadays and more than ever, the manufacturer must place a sustained focus on improving its Information Technology capabilities and development platforms that are designed to deliver competitive advantage. Information Technology continues to play an influential and increased role in the global manufacturing arena. However, a majority of companies still rely on IT for data processing, communications, internal/external support, and generally to employ systems that deliver specific capabilities.

Therefore, please keep the following points in mind when developing future strategies: • Identify potential problematic issues and establish a protocol of technology goals and objectives • Keep investment options opened and explore creative use of next-generation One key contribution has been in the area disruptive technologies of automation. Information Technology has • Build upfront a solid IT foundation been responsible for developing platforms designed to accommodate that have delivered increased profitability by implementation of future technology improving productivity, reducing costs and add-ons monitoring the supply chain. Additionally, IT has provided the “connected” means Combining both innovation and Information

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• End-to-end, detailed traceability tying sales to production to inventory to supply-chain data in real-time • Ideal in support of local operations for individual plants that integrate seamlessly with corporate ERP systems

“By embracing the cloud, manufacturers no longer simply collect data but instead, gain actionable insights from it.”

importance of IT

Technology the manufacturing sector has been able to capitalize on new capabilities. As a result, new areas of business focus are currently being defined, and new trends have formed. According to the latest RSM Monitor Survey of Manufacturers (Jan. 2017), manufacturers will focus on customer relationships, top-line growth, and profitability. Please note: • “27 percent of U.S. manufacturers expect new technologies to help grow sales in the next 12 months” • “28 percent of manufacturers expect to leverage technology to increase profitability in the next 12 months”

(Source: Johannes Petrowisch | COPA-DATA 5.16.17)

Advanced Data Analytics – As the pace of manufacturing continues to accelerate forward-thinking manufacturers have become to realize that it is not enough Information Technology is also paving the to just analyze data via a database. Data way forward for Advance Automation - must be timely, actionable, and be able moving the “brick and mortar” factories of to be operationalized. Manufacturers are the 50’s to high-tech manufacturing centers beginning to systematically operationalize of 2020 and beyond. Advanced Automation their data into advanced and embedded implies that manufacturing will become more analytics that become a part of the enterprise/ sustainable by leveraging IT resources to manufacturing process(s). design, develop and implement technology (systems, software, and programs), analytics Information Technology has now taken on a and even artificial intelligence via Advanced new role as operationalizing and embedding Automation Platforms. These platforms will analytics is all about integrating actionable be designed specifically, to capture and insights into new informational platforms retain knowledge, and expertise of retiring (i.e., systems, software, programs) and manufacturing worker(s). This collected processes that can now be leveraged to information will then be applied to transform/ make decisions that are not costly or timebuild these high-tech manufacturing centers consuming. Through advanced analytics, of the future. manufacturers can create and embed realtime data via platforms into informational Technology and Manufacturing – Trends: dashboards, applications, devices, and other Cloud – The use of and the relevancy of data supporting databases. Benefits: to the manufacturing sector has been very • Analyze Large Amounts of Data – Data can now be converted from multiple effective regarding process improvement, sources streamlining operations and product timeto-market, etc. As a result, the hosting of • Identifying Data Points – Data can be filtered and correlated increasing the and subsequent processing of data has value of data increasingly been shifted from databases that have resided on a PC or a local server • Data Information Delivery – Data can be delivered to end-users in formats that to Cloud Computing technology. With so are easy to act upon many users demanding/utilizing data Cloud Computing has emerged as one of the best IT solutions for manufacturing. Cloud A recent study conducted by LNS Research Computing can reduce capital expenditures and MESA International concluded, “The top three areas of the impact of Big Data and IT labor costs. Benefits: • A common production network that on manufacturing were: 46% improvement supports a complex or single source of in better forecasting of product demand data in real-time and production, 45% improvement in

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understanding plant performance across multiple metrics, 39% improvement in providing service and support to customers faster.” The Internet of Things (IoT) – Simply, The Internet of Things (IoT)/Industrial Internet of Things (IIoT) is a network of physical objects embedded with electronics, software, sensors, and network connectivity that enables these objects to collect and exchange data without a computer or human interaction devices. An example of IoT in the manufacturing sector includes OEMs and manufacturer partnering initiatives. Currently, OEM’s leverage their suppliers’ expertise in product/component design with a primary goal to improve quality and reduce costs. These initiatives are fast becoming a universe of innovation and engineering sources. However, in most cases, these initiatives do not account for nor have access to real-time product usage information and even insights into customer preferences, needs, satisfaction or product/ component failures or lifespan information. In short, most product usage data, if recorded by the OEM at all, lies unused. Simply, sharing product usage (i.e., raw unstructured data/ classification) can present security concerns. Not-with-standing, the amount of data and post-processing can become very complex and time-consuming and could impede data quality. With the proper pathway and infrastructure, IT can harness and integrate software, sensors, analytics and network technologies geared to monitor/report the entire product life cycle via a set of intelligent tools. Resulting in a continuous flow of “real-time” information that’s transmitted, updated, classified and synthesized to the OEM and supplier transforming product design, quality, production, and product life cycle processes.

provide and merge an array of technology platforms that are designed to achieve a more streamlined and holistic path to digitization. Specifically, by adopting a plan to implement an IoT strategy manufactures will be able to transform the entire design/ production/product life cycle processes with digital tools that are designed to achieve competitive advantage. Benefits: • Integrating pools of digital data gaining system-wide visibility to enhance production control • Improving design and engineering through software that enables virtual design and rapid prototyping • Performing remote diagnostic checks and running simulations at certain intervals to predict and plan for maintenance GE predicts (2016), “…investment in the Industrial IoT (IIoT) is expected to top $60 trillion during the next 15 years…” IHS forecasts, “That the IoT market will grow from an installed base of 15.4 billion devices in 2015 to 30.7 billion devices in 2020 and 75.4 billion in 2025.” SITEK undertook an extensive IT application/ solution initiative in developing a unique “Tracker Tool” program for a Global USbased sign manufacturer. The Tracker Tool provided our client with an automated, electronic, and paperless capability to manage customer information and move work through the workflow process as well as route and track maintenance tasks ensuring a seamless enterprise-wide application/ solution. The application/solution provided for migration and pathing of IT, technology and platform add-ons to accommodate future business requirements.

At SITEK we understand technology, platforms, and workflow as it applies to the development of vertical market applications/ solutions. With specific attention to manufacturing, SITEK knows how to IoT is more than a race to the “Digital Future,” best leverage technology in designing, or should we say the “Digital Enterprise”? implementing and driving IT/development Information Technology is transforming the initiatives to deliver competitive advantage manufacturing landscape with the ability to for your business.

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KENTUCKY ASSOCIATION OF MANUFACTURERS

importance of IT

Please feel free to contact SITEK so that we Government and Education. SITEK also can discuss your business needs, priorities provides innovative solutions to technology and offer solutions designed for success. staffing needs. SITEK has the experience to place qualified candidates in the U.S. and About SITEK Inc., Founded in 2006 and internationally, delivering the right resources headquartered in Lexington, Kentucky, for any company. SITEK provides technology-driven solutions for clients large and small. SITEK has Contact Mark Dildilian, Director, Marketing delivered solutions for global clients in and Business Development at 859-539-2890 diverse industries including; Healthcare, or email mdildilian@siteksolutions.com. Visit Manufacturing, Utilities, Insurance, us on the web at siteksolutions.com.

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As we have for several years, we will video contest and see the winning celebrate all that is manufacturing in videos. This Conference is designed October. to bring together KY manufacturers, legislators and educators to learn what is working across the Commonwealth and nationally regarding filling the critical skills gap. Areas of focus will include how manufacturing is driving the changing paradigm, an update on the MakerMinded program, earning and learning in Kentucky, and finding Manufacturing Month begins with the the hidden workforce. This event will celebration of MFG DAY on October be held at the Galt House Hotel in 6, with a proclamation from Governor Louisville. Bevin naming October Manufacturing Month in Kentucky. Celebrate Manufacturing Reception

On October 26, we will host our second Workforce Readiness & Resource Conference, featuring Dick Hazleton, Chairman, President & CEO (retired) of Dow Corning Corporation, as our keynote speaker. We will also announce the winners of the #KYisMFG student 24

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Later that evening, we invite you to join us for our Celebrate Manufacturing Reception from 6:00-8:00 PM in the beautiful Waterford Room on the 25th floor of the Rivue Tower at the Galt House Hotel as we pay tribute to Greg Higdon and welcome our new Executive Director, Lee Lingo.


there will Breakfast, Louisville and KAM

mfg month

On Friday, October 27, be an Energy Awareness a collaboration between Energy Alliance partners from 8:00-10:00 AM.

to focus attention on the important contributions manufacturers make to their employees, customers, and communities, and the impact of manufacturing employees in their communities. These awards showcase entrepreneurial spirit, community leadership, and policy contributions made by Kentucky manufacturers and their employees to enhance the sustainable, long-term prosperity of Kentucky. This is an extended luncheon event. Mayor Greg Fischer has been invited to welcome our attendees.

Complete event information is available on our website, and you can register directly for all events. If you Later that morning, our 17th Annual have any questions, contact Karen Ellis Manufacturer & Employee of the at 502.352.2485 or via email at Year Awards luncheon from 11:30- k.ellis@kam.us.com. 1:30. These Awards were created

Opening minds to

ADVANCED MANUFACTURING MakerMinded is preparing students to fill the demand in the advanced manufacturing industry. We are a digital platform connecting students to leading-edge STEM & advanced manufacturing educational experiences in Kentucky, Tennessee, and Ohio. You can stay up to date with the latest MakerMinded news by subscribing to our email newsletter. Want even more news? Check out our news feed & follow us on Twitter, Facebook, and Instagram!

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compensation packages: finding the right fit Tiffany Cardwell, SHRM-CP, PHR, CCP, HR Consulting Principal, MCM CPAs & Advisors Are you struggling to pay rising health care costs, attracting and retaining skilled workers, complying with government regulations such as the Department of Labor’s overtime regulations and the shared-responsibility provisions of the Affordable Care Act (ACA)? These issues were among the top concerns reported by U.S. manufacturers, according to the third quarter 2016 Manufacturers’ Outlook Survey published by the National Association of Manufacturers. To manage these issues, manufacturers may need to review their compensation packages and make some tough cuts. Here’s a closer look at some of today’s human resource challenges. Trends in health care benefits The Employee Benefit Research Institute (EBRI) is a nonprofit research institute that focuses on health, savings, retirement and economic security issues. EBRI recently compared health insurance benefits before and after the sharedresponsibility provisions of the ACA went into effect. The study revealed that larger employers continue to offer health insurance benefits to their workers. In fact, about 99% of employers with 1,000 or more employees provide health insurance benefits. The coverage rate among employers with 100 to 999 employees ranges between 93% and 95%. But coverage among smaller employers has fallen dramatically since 2009. The coverage rate for employers with 25 to 99 employees fell from 81% in 2008 to 74% in 2015. For employers with 10 to 24 employees, the rate went from 66% in 2008 to 49% in 2015. And the coverage rate for employers with fewer than 10 employees decreased from 36% in 2008 to only 23% in 2015. Reasons to provide coverage There are many compelling reasons for offering health care benefits and many employers will continue to do so even if the ACA is repealed or modified by Congress in 2017. The most obvious is that employers care about workers and want them to be healthy. Moreover, by offering affordable health care insurance coverage, your company may have an advantage over competitors in a tight labor

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market. On the flip side, as the law currently stands, failure to comply with the shared responsibility provisions of the ACA can lead to steep penalties. “Large” employ-ers that don’t offer minimum essential coverage or that offer coverage that isn’t affordable or doesn’t provide minimum value face a penalty if just one full-time employee receives a premium tax credit. Beginning in 2016, the full-time employee (or equivalent) threshold for large employ-ers is 50. For 2015, the first year that the provision was in effect, the threshold was 100 full-time employees (or the equivalent) if the employer met certain requirements. Alternative cutbacks To help pay for health care benefits, there may be other offerings that you can eliminate or scale back. How do you know which benefits and perks your staff want the most? Compile a list of your cur-rent benefits, such as retirement savings plans, dependentcare and educational assistance, life and disability insurance, health club memberships, company pic-nics and holiday parties, summer hours, and free coffee and snacks. Then ask employees to rate their favorites. Small changes, based on the needs and preferences of your workers, can save money without lowering morale. For example, a plastics manufacturer reduced benefit costs by 20% with three simple changes: It increased health insurance policy deductibles, decreased the number of retirement plan options, and eliminated company-provided disability insurance coverage. You can also substitute less conventional offerings if you need to eliminate a popu-lar item from your benefits package. One idea is employee stock options, which preserve cash flow while giving employees the opportunity to purchase shares of the company’s stock at a predetermined exercise price. Another way to control labor costs is to monitor overtime hours. Limit nonexempt workers to 40 hours per week. If there’s a rush order that requires overtime, require the plant manager to obtain preapproval from the company’s CFO or owner. Whenever possible, consider


compensation/kindness

using independent contractors or part-timers taking such a radical step, consider alternatives during seasonal peaks. that can save money while continuing to offer health insurance coverage to employees. Make an informed decision Many small businesses have gotten out of the health care game since the ACA was signed into law in 2010. But doing so can lower morale, make it harder to attract and retain skilled workers, and lead to steep penalties. Before

why kindness matters at work Kelly Holden, Partner, Dressman Benzinger LaVelle psc

It is no secret that employees who are dissatisfied at work feel that way because of a manager, not because of the company. Culture is created by the managers and when it is good, employees are happy and usually, productive. When the culture is poor, employees leave more frequently and turnover is higher. Unemployment is at one of its lowest rates and jobs are plentiful. In certain sectors such as manufacturing, there are not enough workers to fill the jobs. When employees are hired and not treated well by a manager, they are less likely to stay knowing there are other jobs waiting. Turnover causes consistent retraining and lost productivity. The cost of turnover is estimated to be at least 2.5 times an employee’s salary.

was not Indiana Jones, James Bond or Superman. It was Atticus Finch from To Kill a Mockingbird. A gentleman who was kind, widely respected and chose right from wrong even when it was not popular. Atticus treated everyone with kindness and respect despite who the person was or their background.

It seems to be common sense that anyone would rather work for a manager who is considerate, respectful, kind and understanding rather than someone who is rude, abrupt and disrespectful. Given a choice to work for someone like Saddam Hussein, Fidel Castro, Adolf Hitler or Ghandi, Mother Theresa, Rosa Parks, the choice is easy. Being the heavy hand and ruling with an iron fist will not usually generate the best results.

Mark Twain stated that “Kindness is a language which the deaf can hear and the blind can see.� Kindness will improve the bottom line and as jobs are more competitive, being creative on how to attract quality employees and retain them is becoming more crucial. Start with kindness and respect and the rest will fall into line.

Another benefit from kindness the decreased chance of legal liability. Managers who are highly respected and well liked are less likely to be sued or get the company sued. The manager who is constantly critical and disrespectful infuriates employees causing them to seek legal advice. It is generally an intense dislike for a manager that causes employees to file EEOC claims or lawsuits.

Kindness and respect are universally better attributes than the opposite. The American Film Institute did a survey of the greatest movie hero. Surprisingly, it

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finding skilled workers: do you know it and can you show it? New Hands-On “CPT+ Skill Boss” Program Demonstrates Core Technical Skills Employers Need Employers - Imagine sitting down with a job applicant for your production job opening. Though this person has limited work experience in manufacturing or has been away from manufacturing for a period of time, they have recently been certified in CPT and CPT+. Even with experience limitations, the applicant’s two certifications are why you bumped them to the top of the applicant pool, and now this person is being considered for the job because you have confidence they will be able to transition into your workforce relatively quickly. Could this be you? For many years, employers have recognized the MSSC Certified Production Technician (CPT) credential, awarded for successful completion of rigorous foundational technical skill coursework in Safety, Quality Practices & Measurement, Production Process and Maintenance Awareness. Employers report their CPT hires are more productive, motivated and promoted to leadership positions more quickly than their non-CPT peers. CPT graduates show up to work consistently, stay on the job longer and have a positive attitude towards work; qualities that all employers, regardless of sector, are looking for in an employee. Some employers report saving over $2000 per CPT hire because they need less on-boarding time and there is less turnover with these employees. Could this be you? Yes! This can be you: With CPT and CPT+ certified applicants, you would know the individuals you interview not only have the basic technical knowledge necessary for your production job opening, but they also have demonstrated key hands-on technical skills within each of foundational areas of production. This will save your company time and money in the recruitment and on-boarding process. Down the road, your CPT/CPT+ workforce may transition to team leaders, supervisors or even obtain higher certifications or degrees filling in those highly skilled positions your company so greatly needs. The CPT training program is available at many locations in Kentucky: KCTCS institutions, 4 high schools in Jefferson County, local Workforce Investment Board Careers Centers

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(in conjunction with their training partners), and individual company sites. And now, in addition to the instructor-led, online course of study, MSSC has announced a new handson training and assessment component to compliment the CPT program: CPT+ Skill Boss. “Manufacturing executives have argued for decades, and still argue, that they need more workers with deeper technical and creative problem-solving skills to be competitive in global markets,” said Leo Reddy, who leads MSSC to bolster the nation’s economic competitiveness. “While we’ve made progress over the years, much more work needs to be done. That’s where the Skill Boss comes in – this is a cost-effective and portable machine that high schools, community colleges and manufacturers can use to train people to excel in an advanced manufacturing environment.” MSSC sets national skill standards for CPT, is endorsed by the National Association of Manufacturers and is accredited under ISO 17024, the international quality standard for certification bodies. Corporations such as Cummins, Harley Davidson, GE Appliances, Toyota and Walmart specifically seek out and hire people with MSSC certifications. Jeffersonville, Ind.-based Amatrol, the nation’s leading manufacturing technical education provider, designed and built the Skill Boss based on MSSC’s CPT standards. “Manufacturing executives often tell us that they can’t find people with requisite skills, yet many companies and schools don’t have the financial resources or physical space to build training centers,” said Amatrol CEO Paul Perkins. “The computer-controlled, portable Skill Boss, more interactive than a robot and just 20 inches tall, solves that problem. I am also convinced that this exciting trainer will attract many more young people to begin careers in advanced manufacturing.” “As a longtime supporter of the CPT program, GE Appliances greatly welcomes the Skill Boss hands-on certification component to the CPT training program. We believe giving students the opportunity to demonstrate what they


Colorful and multifaceted, Skill Boss will be more fun than a robot for many students and will encourage them to enter a career pathway in advanced manufacturing. Cost-effective (at under $20K), Skill Boss will enable many more schools, who cannot afford a lab or tech center, to offer hands-on MSSC CPT training and credentialing. In addition to aligning with key CPT-required skill sets, the Skill Boss could also prove very useful to companies who want to do additional hiring assessments for potential employees. Skill Boss Value Add “As an instructor, having Skill Boss will provide me with a functional hands-on teaching and testing tool that will allow my students to learn and demonstrate the valuable skills and concepts of the MSSC CPT program,” states

skilled workers

know is just as important as their knowledge Victor Burgos: MSSC Master Trainer. The Skill gained through their coursework,” states Eric Boss: Leef, Executive HR leader of the Supply Chain • Allows for documentation of 55+ “Handsat GE Appliances, a Haier company. “We on” Skills applaud the MSSC and Amatrol on working • Affordable for manufacturing training together to develop an accessible classroom programs in lower income regions tool for CPT students, as well as providing an • Trains and assesses hands-on skills for all additional hiring measure for employers.” sectors of manufacturing • Removes employer doubt by requiring What is Skill Boss? evidence of hands on skills The centerpiece of this new program is a • Strong training and assessment tool for transformational training device, invented by incumbent workers Amatrol that enables MSSC, for the first time, • Allows for hands-on training and to offer hands-on training and assessment as documentation for each MSSC CPT an enhancement to its signature CPT training Concentration and certification system. “Skill Boss” is a • Interactive with CPT virtual 3-D simulation computer-controlled machine that performs learning a wide variety of functions aligned with 55+ • Increases incentive to earn the full CPT hands-on skills from the MSSC’s national • Appeals to tactile learners through dynamic Production Standards. learning experience • Excellent for remote “rural” learning As shown in the • Classroom friendly, fits onto a standard Skill Boss brochure, tabletop and features: this highly o An electric motor, technical machine o Variable frequency drive, is portable and o Human-machine interface, compact. Together o Pneumatic pick-and-place module, with its associated o And when setup, this system will quality programmable test and sort blocks made from plastic logic controller and metal. (PLC), Skill Boss fits comfortably on a standard 3’x 6’ table, CPT+ Skill Boss is designed to further qualify and requires 110VAC and compressed CPT Certificants for employment. Individuals air. It is strongly built with industrial grade seeking a CPT+ credential must pass the components to withstand heavy use. It is current written assessments for all four designed to cover many of the core technical CPT Modules: Safety; Quality Practices & Measurement; Manufacturing Processes & competencies related to both discrete parts Production; and Maintenance Awareness. and process manufacturing. To learn more about Skill Boss, hands-on standards, and how/where to place orders please go to the Amatrol website at: http:// w w w. a m a t ro l . c o m / p ro d u c t / s k i l l - b o s s performance-based-assessment/. The non-profit, industry-led Manufacturing Skill Standards Council (MSSC) is the national leader in training and certifying individuals with the core technical competencies needed to begin careers in advanced manufacturing. Applicable to all sectors of manufacturing and part of the NAM stackable credentials framework, which uses the National Career Readiness Certificate (NCRC) as the academic baseline for work readiness, the MSSC CPT is the technical foundation for building the manufacturing pipeline since its focus is on the entire population of entry-level workers for all production jobs. For more information about MSSC you can visit www. msscusa.org or contact LeeSa Page, Senior Advisor for Kentucky at lpage@msscusa.org.

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kentucky’s agriculture and manufacturing positioned for a bright future By Kentucky Agriculture Commissioner Ryan Quarles Did you know that Kentucky agriculture contributes $45.6 billion annually to our state economy every year? It’s true. Not only that, but more than $7 billion is generated in Gross Domestic Product (GDP) from food, beverage, and related product manufacturing. It’s easy to say: Kentucky agriculture and manufacturing go hand in hand. At the Kentucky Department of Agriculture (KDA), we are working every day to strengthen the relationship between our farmers and our manufacturers.

northern Kentucky. In August, Owensboro tobacco processor Swedish Match said it would expand its operations with a $40 million investment, generating new jobs.

You see, agriculture is economic development, and Kentucky has a lot going for it, making it a premier destination for agricultural and manufacturing interests. Our state is within one day’s drive or a two-hour flight from two-thirds of the U.S. population. Not to mention the fact that our electricity costs are among the lowest in the nation, In June, the KDA joined the Kentucky and we are home to UPS and DHL cargo Association of Manufacturers (KAM) to hubs, with a third - Amazon Prime Air - on host three economic development forums its way! across the state. The Linking Agriculture for Networking and Development (LAND) Kentucky has a rich agricultural heritage and conferences kicked off a discussion our state is well positioned for a bright future. between producers, processors, farmers, Thankfully, Governor Bevin and leadership in and businesses about how they can work the General Assembly understands this and together. Each LAND forum featured an are all developing public policies to make update on KDA initiatives, a talk by KAM our state friendly to any business seeking CEO Greg Higdon, and a panel with regional to locate here. Working together with KAM and the Kentucky Cabinet for Economic agricultural and manufacturing leaders. Development, the KDA stands ready to work In July, Hillshire Farms, the largest meat with any agriculture-related manufacturing processing company in the United States, business looking to open its doors in announced a $50 million expansion in Kentucky.

Kentucky Commissioner of Agriculture Ryan Quarles, left, speaks at ribbon cutting ceremony for biomaterials and processing company Sunstrand, which is headquartered in Louisville, Kentucky

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Kentucky-based startup MakeTime announced the launch, and participating industry partners, of the MakeTime Shop Advantage Program at Modern Machine Shop’s inaugural Top Shops conference. The program is the first of its kind and is designed to make technology, sophisticated hardware and business services more accessible to the U.S. manufacturing base, which contributes over $2 trillion to the U.S. economy annually. Inaugural partners include: global 3D design software giant, Autodesk; the world’s leading supplier of cutting tools and tooling solutions, Sandvik Coromant; multinational computer technology company, Dell; supply chain cost reduction company, Transportation Impact; and manufacturing financing partner, Manufacturers Capital, a division of Commercial Credit Group Inc. According to Jeff Rizzie, Director of Digital Machining for Sales Area Americas at Sandvik Coromant, “Partnering with MakeTime on their newly-launched Shop Advantage Program makes a lot of sense. We are both focused on driving out the waste that exists in today’s manufacturing supply chains. Providing easy access to Sandvik Coromant’s industry leading metal cutting solutions and know-how through the MakeTime platform enables their suppliers to provide world class machining services.”

to help MakeTime’s supplier network solve their current business challenges and further their capabilities in manufacturing.” “We are excited to partner with MakeTime and offer our technology products and solutions to their supplier network,” said Mobolaji Sokunbi, Head of Strategic Partnerships, North America Small Business with Dell. “We believe that this partnership will make Dell technology products and solutions more accessible to MakeTime suppliers, making it easier for the US manufacturing base to grow faster.”

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tech and industry giants partner with kentucky startup to advance the us manufacturing supply base towards a tech-enabled future

Todd Pritts, Chief Product Officer at MakeTime, says that manufacturers have historically experienced barriers to adopting new technologies and processes. MakeTime’s program will help machine shops bridge the technology gap faster and facilitate a more productive American manufacturing workforce. “MakeTime’s mission has always been to refuel U.S. manufacturing. We started by building technology that makes it easier for manufacturers to get parts made with American suppliers,” said Pritts, “now we can go one step further and provide American suppliers access to the tools they need to get ahead, and stay ahead, of the technology curve in the global manufacturing climate.”

Through the Program, machine shops will be given access to special offerings for cutting tools, CAD/CAM software, “We are delighted to be partnering with computer hardware, CNC machine tool MakeTime,” said Robert Yancey, Director and manufacturing equipment financing of manufacturing industry strategy and and more. business development at Autodesk. “The Shop Advantage Program provides The Shop Advantage Program is exclusive Autodesk with a great opportunity to qualified members of MakeTime’s to expose the industry to the latest network of over 1,000 U.S.-based machine manufacturing software and technology shops. All machine shops based in the U.S. KENTUCKY ASSOCIATION OF MANUFACTURERS

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are eligible for qualification when they standards and innovations demanded create a free account on MakeTime. by the metalworking industry now and into the next industrial era. Educational About MakeTime: support, extensive R&D investment and MakeTime streamlines the production of strong customer partnerships ensure the CNC machined parts. Powered by data and development of machining technologies the nation’s largest network of qualified and that change, lead and drive the future of connected suppliers, MakeTime radically manufacturing. Sandvik Coromant owns compresses the manufacturing timeline, over 3,100 patents worldwide, employs creating a reliable path to CNC machining over 8,500 staff, and is represented in production that is fast, intuitive and cost- 150 countries. For more information visit competitive. www.sandvik.coromant.com or join the conversation on social media. About Sandvik Coromant: Part of global industrial engineering For questions or more information, contact group Sandvik, Sandvik Coromant is at the Kasey Hall at 844-625-3846, ext. 704, or via forefront of manufacturing tools, machining email at kasey@maketime.io. solutions and knowledge that drive industry

mapping the future Scott Broughton, Center Director for AKA When is the last time you decided to go on vacation and left without thinking about where you are going and how to get there? By preparing for everything or worse yet, embarking but preparing for nothing, there is only one guarantee; it is going to be an expensive trip! I can picture it now … you pack an extralarge suitcase that holds everything from a swim suit to a business suit. You have a separate suitcase for all the shoes you will need; tennis shoes, running shoes, walking shoes, black and brown dress shoes, work boots, dress boots, snowmobile boots and don’t forget your trusty flip-flops. The entire family packs for both warm and cold climates ready for sleet, snow, sunshine, and tsunamis. Good grief you look like Clark Griswold from National Lampoon’s Vacation driving down the street! It probably will also be a good idea to bring some extra money. You remember as you are driving away that your car is due for an oil change and your brakes are beginning

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to grind. You will inevitably stop by a local “convenience store” (the type at which you can buy bait, beans and Band-Aids) and pay $25 for the $5 bag of charcoal you forgot at home on your way into your final destination but who cares, it might be 2am and it took you 3 days to get there but you are finally there! You might lose a piece of luggage or two but turns out you really did not need them anyway. That is the problem with simply driving with no pre-planning or map to get you there. Pre-planning and a map bring focus and structure to your adventure. It stops you from driving east to find out you really wanted to go west. It allows you to pack a duffle bag with a towel, swim suit, a few pairs of shorts and t-shirts because turns out all you really wanted to do was drive to the local water hole to go swimming for the weekend. Without pre-planning and mapping out an expected destination and outcome, you will spend money on non-pertinent activities taking money from needed activities that would allow you to get to your destination


In the business world, pre-planning and the mapping of activities to achieve the desired outcome is similar to the same thought processes you go through when planning a vacation. Bad strategies and planning result in wasted efforts and resources. Wasted efforts and resources correlate to wasted money and we only have so much available money to “waste”. Most do not realize how much money they are spending on bad and un-focused (non-valued added) activities. Most of the manufacturing world has heard of Lean Manufacturing and is at least familiar with Value Stream Mapping (VSM). Manufacturers do not realize the flexibility of VSM in their facility though. VSM maps out a company’s “current state” activities, compares them to “world-class” initiatives and develops a strategy for change creating a better “future state” of activities which includes objectives for achieving goals. A goal could be increase through-put by 10% or increase new customers by 20%. VSM’s purpose is simply to identify “value added activities” and more importantly, identify “non-value added” activities to eliminate. Most only think about VSM from the view of the plant floor and looking at plant problems and issues such as Quick Changeover, 5S, Problem Solving, Kanban and of course, Lean 101 but VSM philosophies can also be applied to ALL activities in manufacturing, most importantly, growth. Most companies who have problems in growth simply do not have a good mapped out process to allow them to spend their limited resources smartly creating activities to develop new or improved revenue streams.

them to increase speed and decrease risk in the development of new ideas for increasing revenue. By doing a little pre-planning and most importantly mapping of processes, you will bring structure and focus to your activities ensuring you are not walking out of that “convenience store” with your $50 gourmet dinner of pork n beans and hotdogs. You can do it, it would work but eventually, your resources (money and staff) will either be depleted or worse yet, leave for the neighbor’s aroma of steaks.

mapping the future

more quickly and cheaply.

The Advantage Kentucky Alliance (AKA) is Kentucky’s resource to address the challenges of today’s hyper-competitive business environment. Cut cost. Be efficient. Achieve profitable growth. AKA’s cost effective services give manufacturers the tools to be competitive. Regardless if it is a spot solution or total transformation, all technical assistance and training is customized to fit your objectives. Our goal is that you use the AKA as your Resource Center of choice in KY. Again, if you are “willing and able”, allow AKA to educate you on potential solutions. For more information about how the Advantage Kentucky Alliance can help you bring structure and focus to your activities, develop business strategies, do Value Stream Mapping or for more information on any of our other Continuous Improvement or Growth services, contact Scott Broughton, Center Director at 814-505-3786, scott.broughton@ wku.edu or visit www.AdvantageKY.org

VSM can and should be utilized for both Lean and Growth activities and like all good Systems, should start with a sound business strategy to set direction. By truly understanding what a company’s Very Important Problems and Very Important Opportunities (VIP/VIO) are, companies can then coordinate a map of activities to allow KENTUCKY ASSOCIATION OF MANUFACTURERS

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there are no safe spaces Violence in the Workplace

George D. Adams, Partner, Fisher Phillips Workplace violence ranges from verbal threats to the nightmare of workplace shootings. Shootings are statistically rare, but present intense legal, moral, and practical dilemmas for employers. Recent terrorist attacks show employees can be “collateral” victims even when violence is not specifically directed toward the workplace. Work rules can reduce the risk and impact of lower forms of workplace violence, but no one who is willing to commit murder will be dissuaded by a work rule or “no guns” sign. There are no “safe spaces,” but employers can and should take reasonable steps to mitigate workplace violence. Legal Considerations No federal law requires employers to have a workplace violence policy. Most states’ workers’ compensation laws provide the exclusive remedy for workplace injuries (even shootings), although there are some exceptions for gross negligence, foreseeable harm, and negligent hiring and retention. Unfortunately, other laws can create a “Catch 22” for employers who try to preempt violent behavior (e.g., terminating an employee perceived as mentally unstable may violate the ADA). The Occupational Safety and Health Act does not specifically address the issue. At the time of this writing, however, OSHA’s website contained the following statement regarding workplace violence and the General Duty Clause: An employer that has experienced acts of workplace violence, or becomes aware of threats, intimidation, or other indicators showing that the potential for violence in the workplace exists, would be on notice of the risk of workplace violence and should implement a workplace violence prevention program combined with engineering controls, administrative controls, and training. Nearly every employer has heard of some threat or intimidation in the workplace. If OSHA intends to apply this standard, every employer arguably must implement a workplace violence prevention program. Moral and Practical Considerations After an employee is killed, no one wants to wonder “what could I have done to prevent

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it?” There are limits to what an employer can and reasonably should do to prevent workplace violence, but simply hoping for the best is unrealistic. Employers plan for fires, earthquakes, and other disasters. Workplace violence differs from natural disasters in the sense that it involves intent, but the results can be just as devastating. Employers should have emergency action plans for preventing, responding to, and recovering from workplace violence. Plans typically begin with a risk assessment, and are tailored to the employer’s circumstances (including a risk/benefit analysis). An employer who operates a convenience store in a neighborhood with a high crime rate has a higher duty to protect employees, and needs a more robust plan, than an auto dealership in an area where little crime occurs. For most employers, it would be impractical and unnecessary to erect security fences and hire armed guards to defend the property. It also would be unrealistic, however, just to declare the property a “gun free zone” (many shootings occur in such places— because the attackers know there will be no armed person to stop them). Plans should address security, education, deterrence, intervention, emergency response, and recovery. Education includes teaching employees and supervisors to recognize signs of potential violence, such as threatening to harm others, approval of others’ violent acts, disproportionate anger in response to minor slights, bullying, and troubled domestic relations (e.g., a restraining order against an ex-spouse). Managers can be trained to analyze employees’ complaints for signs of anger, aggression, or depression, and trained to address these situations. Include procedures for handling employees who may react violently to being terminated; consider having the police or security personnel nearby when you announce the news. Include procedures


self-preservation skills they can use outside the workplace (e.g., developing situational awareness makes a person safer everywhere).

Encourage employees to notify HR if they seek or obtain a protective order against someone. If possible, obtain a photograph of the person and provide copies to security, receptionists, and others likely to encounter the individual in the workplace. Instruct them to isolate the individual, notify designated managers, call the police, or take other appropriate action.

Conclusion Extreme acts of workplace violence can be as devastating as a tornado or earthquake, yet many employers who plan for random acts of natural violence have no plans for dealing with intentional acts of human violence. No perfect plan exists, but employers should take reasonable steps to prevent, prepare for, and recover from these disasters just like any other. Stay out of the news!

“Active shooter” (ever seen an “inactive” shooter?) incidents are unpredictable and often over within 10 to 15 minutes—sometimes before the police arrive. People will be confused and terrified during the event, and in shock afterward. The employer will need to deal with first responders and the media, and take steps to keep the business running. After the shooting starts is not the time to figure all this out. To be effective, a plan must be fully developed and practiced before an attack.

workplace violence

for monitoring terminated employees after they leave the worksite, and for responding to those who make or appear to pose a threat.

George D. Adams is a partner in the Louisville office of Fisher Phillips; for 17 years, his practice has exclusively been devoted to representing a wide variety of employers in labor and employment law matters.

An effective plan explains how to deal with violent situations (run, hide, or fight). It identifies escape routes, and assigns specific managers to call the authorities, rally employees in gathering areas, and perform other duties. If some employees must remain at their stations to oversee critical operations, the plan might include installing heavy, lockable doors with small windows, so those employees can keep the attacker out. Local police should have a copy of the floor plan and universal access keys or cards.

The attorneys at Fisher Phillips will share workplace legal tips, ideas and suggestions at the Triple Crown of Employment Law at Churchill Downs on Sept. 21, 2017. The informative seminar will cover a variety of employment law topics for HR professionals, business owners, employee managers or workplace decision makers. The half day (12noon – 5 p.m.) seminar will include roundtable discussions, and will be followed by a cocktail reception and twilight horseracing. KAM members will receive a 20% discount with the code FP20 upon registering here. For more information visit FisherPhillips.com or contact Abby Tasman at atasman@fisherphillips.com or 502-561-3995.

There are indirect benefits to this undertaking. One is giving employees some peace of mind. Training also helps employees learn

This article presents an overview of certain legal issues. It is not, and cannot be construed as, legal advice. For more information, contact Fisher Phillips’ Louisville, Kentucky office 502-561-3990.

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is a small design flaw robbing manufacturers of valuable time and productivity in milling operations? Manufacturers are increasing productivity 15-20% by addressing a flaw in toolholderretention knob design that affects precision and increases cycle time What if a small investment in time and attention could yield an increase in milling productivity by 15-20% across the boards? While some may immediately tune out because it sounds “too good to be true,” an increasing number of manufacturers that machine parts are learning they can significantly increase cycle times and productivity by resolving one of the most fundamental and longstanding problems in machining: improper seating of the toolholder in the spindle. This small fact robs machining operations of valuable time, affects tolerances and precision, shortens tool and spindle life and even increases power consumption. Yet despite widespread evidence of uneven wear patterns and simple “touch-off” tests that immediately identify it as an issue, the industry has largely ignored this aspect of machining and, unwittingly, are paying a significant price for it. Productivity Gains – an Executive Level Decision “In my role as an executive, anything that reduced costs or improved efficiency got my attention,” says Joe DaRosa, former president at Toyota Manufacturing of Texas. According to DaRosa, improper seating of tapered toolholders in the spindle is often overlooked as a factor in the performance and efficiency of CNC milling equipment. “Companies purchase top-of-the-line machining centers for a half a million dollars or more and buy the most expensive cutting tools, yet they completely ignore the interface between them: the toolholder and the retention knob,” says DaRosa, adding that the purchasing decision for these items often comes down to the lowest priced options, including overseas. So, when he first learned about an inexpensive fix to a machining problem that even by conservative estimates could increase productivity 15%

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and tool life even more, he was immediately intrigued. “If you’re an executive, you’re going to look at this [solution] and see reduced costs and increased productivity; If you are machining operator you will see increased tool life and less frequency of changeover,” adds DaRosa. DaRosa is referring to a flaw in the design and utilization of retention knobs in tapered toolholders secured by drawbars, such as the popular V-flange, that date back to the original designs first introduced decades ago. The flaw in the system Although the shank of tapered toolholders is ground to a fine finish to fit in the spindle within very precise, established tolerances, those that utilize drawbars are also threaded at the narrow end to accept a retention knob. The knob is designed to engage with the drawbar, which exerts a pull force that holds the toolholder firmly in the spindle. The problem is poorly designed, traditional retention knobs – a less than $20 part – when tightened create a bulge in the taper that prevents full contact and proper seating in the spindle. Once this expansion occurs, the toolholder will not pull fully into the spindle and so cannot make contact with upwards of 70% of its surface. Perhaps because the shank and spindle are so carefully machined or because the industry has utilized retention knobs on tapered products for decades, this issue has largely been overlooked. However, the results are manifested in a wide range of CNC milling issues often attributed to other causes: vibration and chatter, poor tolerances, non- repeatability, poor finishes, shortened tool life, excessive spindle wear and tear, run-out, and shallow depths of cuts. High Torque retention knobs There are solutions on the market today that


The High Torque retention knob is longer, by design, to reach deeper into the threaded bore of the toolholder. As a result, all thread engagement occurs in a region of the toolholder where there is a thicker cross-section of material to resist deformation. It also includes a precision pilot to increase rigidity, and is balanced by design. Since even over-tightening of the High Torque retention knobs can still create a bulge, the company provides specifically calculated torque specs based on drawbar pressure. By combining the High Torque retention knob with the correct torque, spindle contact with the taper is improved to close to 100% every time. This can be verified by simple 6-step “touch off” test (www.jmperformanceproducts. com/toolholder-test.aspx). More sophisticated measurement of toolholder expansion (bulge) can also be taken using a taper shank test fixture. The solution can even provide V-flange toolholders with the rigidity and concentricity necessary for high speed machining of titanium, aluminum and other metals/alloys without having to turn to HSK or Capto tooling systems that are 2-3 times more expensive. Eliminating tooling errors For Dan Carlstrom of Carlstrom Associates, a manufacturer’s rep organization that sells toolholders, milling products and workholding systems, the “light bulb” moment came when he recommended the High Torque retention knob to a customer that was struggling with a boring product he had sold them. “The customer was having a problem holding size on a component, so they had to take multiple boring passes and then do a final reaming pass to get this hole to size,” explains Carlstrom. “When they put the High Torque retention knob on the toolholder, the boring tool was able to cut the hole to size, in tolerance, in one pass.” “They never gave me total cost savings, but

needless to say it was significant. It also solved a huge headache for them,” adds Carlstrom. Carlstrom, who emphasizes that his company does not represent or sell JMPP’s High Torque retention knobs, says whenever he runs a test of his product for a customer he does so with the knob installed to eliminate poor seating in the spindle as a variable that could affect performance.

machine productvity

address this design flaw. In 2009, JM Performance Products, Inc. (JMPP) introduced its High Torque retention knob. Invented by the company’s founder, John Stoneback, the product works with all existing toolholders including BT, DIN, ISO, and CAT toolholders from 30 taper to 60 taper.

“When I run an end mill test, a toolholder test, or a boring bar test, I will not run it without the High Torque retention knob, period,” says Carlstrom. “I know it will make my tools, which I get paid for, run properly.” The ROI in increased productivity In addition to increasing productivity, decreased tooling costs and set up times can increase revenues that more than justify the cost of High Torque retention knobs. Although the product costs nominally more than a traditional retention knob, at a conservative 10% increase in productivity, the ROI can be as little as 3 weeks. At a 20% increase, the ROI can be achieved in a week or less. Furthermore, manufacturers running 24/7 or having to add extra shifts to meet production demands could scale back, if so desired. With so much to gain, experts like DaRosa say the issue is simply lack of awareness. Although manufacturers are already benefitting from implementing the High Torque retention knobs, many consider it a competitive edge so keep the information close to the vest. Others remain unaware – even dismissive – that improper seating of tapered toolholders in the spindle is even a problem that has far reaching effects on machining. “My entire career, we always looked at cost, not price,” says DaRosa. “So when you get my attention with something that can increase productivity, my direction to procurement is to take a close look at it and not just based on price.” For more detailed information contact JM Performance Products, Inc., 1234 High Street, Fairport Harbor, OH, 44077; visit www.jmperformanceproducts.com; call (440) 357-1234; oe email sales@jmppinc.com.

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health & wellness KENTUCKY ASSOCIATION OF MANUFACTURERS

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KentuckyOne Workplace Care, a program of KentuckyOne Health, aims to strengthen the health of manufacturing workers in Kentucky. For more information on how we can address the healthcare needs of your employees, please call 1-844-573-8942.

health & wellness KENTUCKY ASSOCIATION OF MANUFACTURERS

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Profile for Kentucky Association of Manufacturers

The Goods (September 2017)  

The Goods (September 2017)  

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