Springs spring 2011 vol 50 no2

T h e I n t e r n a ti o n a l M a g a z i n e o f S p r i n g M a n u f a c t u r e

Spring 2011, Volume 50 Number 2

A Publication of the Spring Manufacturers Institute

ŠiStockphoto.com/Kudryashka

Sustainability Under the Influence: What’s Driving Environmental Sustainability Deeper Into the Supply Chain? 17 Green Supply Chain Management and Its Implication on Environmental and Energy Performance 27 Save with Energy-Reducing Retrofits 32 Keats Manufacturing Saves Some Green With Lighting Project 35

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President’s Message From Scott Rankin

Don't Let the Manufacturing Animal Become Extinct

I volunteer with various charities and recently had the opportunity to work with the Philadelphia Zoo. The Zoo has many objectives, including conservation and saving animals headed toward extinction. As the world changes it seems animals can become more fragile in their environment. If we make a slight change, it has the ability to wipe out an entire species. Once gone, it is not possible to bring that animal back to our world. So I’m helping teach teens about the things they can do to not only be aware, but to help keep these animals alive and well.

As I put on my springmaker hat, it looks like we are doing the same thing to manufacturing as with many of these animals. Our government is changing the environment, which is driving away manufacturing jobs and businesses. This is a problem that will last for years, if it’s not dealt with quickly and effectively. I see this as something that is being done without thought to the impact upon future generations. As a result, the manufacturing “animal” will become extinct.

But it occurred to me that we have the solution right in front of us. When an animal becomes extinct it cannot come back. It is gone forever. Bye, bye dinosaurs.

Manufacturing companies were started by entrepreneurs. These companies grew through hard work, sweat and determination. We still have the ability to bring these businesses back to life.

Even if a company loses all of its business to China, India or modern improvements, the basic ideas and knowledge to build a business have not disappeared. We need to find the entrepreneurs who are bold enough to start again. We need to find the business people who want to start something new and bring their company back to life.

This is not for the faint of heart. This takes time and effort. This takes people who care and who can see the benefit for the future and for future generations.

Please look at the fragile business environment in which we live and work. Let’s all be aware that it can be brought back and it is a situation that can be changed. If only two animals are left and the right people are brought in, teamed with the right environment, the whole species can be brought back to life. When the right entrepreneur is put in the right environment with the right ideas, a business can be brought back to life or created from scratch. I want to be on the side that allows this to happen. Whether with animals or companies, this is what our future generations will need to survive and thrive.

Succeed with Passion!

Scott Rankin President, Vulcan Spring & Mfg. Co. scott@vulcanspring.com

SMI Executive Committee President, Scott Rankin, Vulcan Spring & Manufacturing • Vice President, Steve Moreland, Automatic Spring Products • Secretary/Treasurer, Russ Bryer, Spring Team • Immediate Past President, Reb Banas, Stanley Spring & Stamping • At Large, Mike Betts, Betts Spring SMI Board of Directors Tom Armstrong, Duer/Carolina Coil • Dennis Backhaus, Spiros Industries • Jim Callaghan, MW Industries • Ron Curry, Gifford Spring • Ann Davey, John Evans’ Sons • Chris Fazio, Diamond Wire • Kurt Gillespie, Century Spring • Richard Guimont, Liberty Spring • Greg Heitz, Exacto Spring • Gene Huber Jr, Winamac Coil • Miko Kabeshita, Ark Technologies • Steve Kempf, Lee Spring • Brett Nudelman, International Spring • Hap Porter, SEI Metaltek • Byron Ress, Zapp Precision Strip • Richard Rubenstein, Plymouth Spring • Ted White, Hardware Products • Chris Witham, Motion Dynamics Springs Magazine Staff Lynne Carr, Advertising Sales, lynne@smihq.org Gary McCoy, Managing Editor, gmccoy@fairwaycommunications.com Dina Sanchez, Assistant Editor, dina@smihq.org Sue Zubek, Graphic Designer, zubekdesign@gmail.com Springs Magazine Committee Chair, Richard Rubenstein, Plymouth Spring • Lynne Carr, SMI • Ritchy Froehlich, Ace Wire Spring & Form • Tressie Froehlich, Ace Wire Spring & Form • Bud Funk, Fourslide Products • LuAnn Lanke, Wisconsin Coil Spring • Brett Nudelman, International Spring • Tim Weber, Forming Systems • Europe Liaison: Richard Schuitema, Dutch Spring Association • Technical Advisor: Loren Godfrey, Colonial Spring Advertising sales - Japan Ken Myohdai, Sakura International Inc. 22-11 Harimacho 1-Chome, Abeno-ku Osaka 545-0022 Japan Phone: +81-6-6624-3601 • Fax: +81-6-6624-3602 E-mail: info@sakurain.co.jp Advertising sales - Europe Jennie Franks, Franks & Co. 63 St. Andrew's Road Cambridge United Kingdom CB41DH Phone/Fax: +44-1223-360472 E-mail: franksco@BTopenworld.com Advertising sales - Taiwan Robert Yu, Worldwide Services Co. Ltd. 11F-B, No 540, Sec. 1, Wen Hsin Rd. Taichung, Taiwan Phone: +886-4-2325-1784 • Fax: +886-4-2325-2967 E-mail: stuart@wwstaiwan.com Springs (ISSN 0584-9667) is published quarterly by SMI Business Corp., a subsidiary of the Spring Manufacturers Institute: 2001 Midwest Road, Suite 106, Oak Brook, IL 60523; Phone: (630) 4958588; Fax: (630) 495-8595;Web site www.smihq.org. Address all correspondence and editorial materials to this address.

The editors and publishers of Springs disclaim all warranties, express or implied, with respect to advertising and editorial content, and with respect to all manufacturing errors, defects or omissions made in connection with advertising or editorial material submitted for publication.

The editors and publishers of Springs disclaim all liability for special or consequential damages resulting from errors, defects or omissions in the manufacturing of this publication, any submission of advertising, editorial or other material for publication in Springs shall constitute an agreement with and acceptance of such limited liability.

The editors and publishers of Springs assume no responsibility for the opinions or facts in signed articles, except to the extent of expressing the view, by the fact of publication, that the subject treated is one which merits attention.

Do not reproduce without written permission.

Cover art created using images from Istockphoto.com: ©Istockphoto.com/Kudryashka

2 SPRINGS Spring 2011

Table of Contents

17

40

32 FEATURES

DEPARTMENTS

17

2 President’s Message Don't Let the Manufacturing Animal Become Extinct

Under the Influence: What’s Driving Environmental Sustainability Deeper into the Supply Chain?

By Diana Gruhn

32 Saving with Energy-Reducing Retrofits

By Mark E. Battersby 35 Keats Manufacturing Saves Some Green with Lighting Project

By Gary McCoy 36 Lost Outside the Circle

By Michael Lobraico 40 Beware of Yuan

By Scott Pitney 46 Worn Out at Work?

Twelve Common Workplace Behaviors That Drain Everyone's Energy 50

SMI Annual Market Summary Report What’s an Attainable Profit Level?

And, How Do I Get There?

by John Mackay

COLUMNS 11

Be Aware Safety Tips OSHA Inspections: How You Were Chosen and What to Expect

By Jim Wood

13

IST Spring Technology Cautionary Tale: Torsion Spring Stresses — Part 2

By Mark Hayes

7 Global Highlights

8 Regional Spring Association Report

24

Flashback Get Ready for ISO 14001: What You Need to Know About Environmental Management Systems

By Stefan Heinloth

27

Flashback Update Green Supply Chain Management and Its Implication on Environmental and Energy Performance

By Jerry Skaggs

55 Springmaker Spotlight Jay Dunwell, Wolverine Coil Spring Co.

By Gary McCoy 61

Inside SMI SMI Fall Business Meeting Set for Las Vegas; SMI Sponsors Wire Rod Supply Chain Conference

64 New Products 67 Advertisers’ Index 68 Snapshot Jim Tomei, A-1 Wire

4 SPRINGS Spring 2011

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Global Highlights North America A new addition to Fox Valley Spring’s Greenville, Wisc. headquarters will create 28,000 sq. ft. of office and manufacturing space, situated to the west of and adjacent to the current facility. This site allows easy access and high visibility to State Hwy. 96 and is located within the Greenville Industrial Park.

Consolidated Construction, who built the original Fox Valley Spring facility, is handling the design and construction of the addition.

Charly Klein, vice president of sales and marketing of Fox Valley Spring, said the expansion is the natural outcome of the company’s deliberate sales strategy and company-wide engagement over the past few years.

“It sounds simple, but it was really just hard work and a lot of knocking on doors to increase our market share,” he said. “Our employees knew we’d have to be aggressive to weather this economic storm. We boosted our sales budget and everyone worked to make processes leaner throughout the company.”

Those initiatives not only brought in new customers, but earned Fox Valley Spring ISO-9001 certification and the 2009 Small Manufacturer of the Year Award from the Fox Cities Chamber of Commerce and Industry. The addition will add enough space to Fox Valley Spring’s current 25,000 square foot facility to house equipment for an expanded product line. It will also make shipping and receiving operations more efficient, and allow for future employee growth.

Said Keith Wincentsen , vice president of operations, “Although we’ve planned our building expansion for several years now as part of a controlled growth strategy, it’s our employees who didn’t let the economy get in the way. This construction, at this time, is really a testament to their persistence.”

Construction was expected to be completed in April, 2011.

The Wire Rod Supply Chain Conference will be held May 2-3, 2011 in Atlanta, Ga., sponsored by Wire Association International (WAI), the American Wire Producers Association, and other partners in the supply chain. For details, see www.awpa.org Also in Atlanta, WAI returns to the Georgia World Congress Center for Interwire 2011, including the trade show, technical programs and the Association’s annual convention. For information on Interwire 2011, visit www.wirenet.org.

Messe Düsseldorf will participate in Interwire 2011 May 3-5, at the Georgia World Congress Center, Atlanta, Ga., to promote its worldwide program of international wire and cable trade fairs, including wire Düsseldorf 2012 (March 26-30, 2012 in Düsseldorf, Germany), wire Southeast ASIA 2011 (September 13-15, 2011 in Bangkok, Thailand), wire Russia 2011 (May 23-26, 2011 in Moscow ) and wire China 2012 (September 25-28, 2012 in Shanghai). At Interwire booth 902, exhibitor, visitor, hotel and travel information for wire Düsseldorf 2012, wire Southeast Asia 2011, wire Russia 2011 and wire China 2012 will be available.

Every two years, wire - International Wire and Cable Trade Fair - in Düsseldorf becomes an international meeting point for specialists from the wire, cable and tube industry. About 1,200 international exhibitors will present machinery and equipment for wire and cable production and processing as well as machinery for spring manufacturing, metal forming and quality assurance to 35,000 visitors from around the globe.

For information on wire Düsseldorf 2012, wire Southeast ASIA 2011, wire Russia 2011 and/or wire China 2012, visit booth 902 at Interwire 2011 or contact Messe Düsseldorf North America, at (312) 7815180, e-mail: info@mdna.com, or visit www.mdna.com.

Design & Manufacturing Canada will be held June 21-23, 2011 at the Toronto (Ontario) Congress Centre. Attendees will enjoy hands-on access to the latest products and services to boost productivity and improve competitiveness, including: CAD/CAM/CAE software, contract manufacturing and engineering, CNC machining, enterprise technology software, fluid power and control, laser machine services, precision metrology, QA/QC sensing, and inspection, rapid prototyping and EBM, R&D testing equipment and services, and more. Suppliers will answer questions, help streamline processes, and demonstrate moneysaving techniques. Presentations from leading OEM suppliers on the latest developments and technologies important to industry will also be available.

For more information, visit www.DM-CanadaShow. com. u

SPRINGS Spring 2011 7

Regional Spring Association Report WCSMA Gets Ready for Spring Fling 2011

T h e We s t C o a s t S p r i n g Manufacturers Association (WCSMA) will hold its Spring Fling from May 20-22, 2011 at the Pala Mesa Golf Resort in Fallbrook, Calif.

Attendees will enjoy golf, a winery tour, and have access to nearby entertainment such as casinos, hot air ballooning, and Old Town Temecula.

Pala Mesa Golf Resort is a California-ranch style hotel located between the Temecula wine country and the scenic North County region of San Diego. Contact the hotel for reservations at (800) 722-4700 and be sure to mention you are with WCSMA to obtain the discounted room rate of $149.

The Spring Fling Golf Tournament will take place on Saturday, May 21 at the Pala Mesa Resort Golf Course, which is considered one of Souther n Califor nia’s most challenging courses. The cost is $69 per person. To participate in the golf outing, contact Trully Pittman at: tpittman@ulbrich.com.

Non-golfers can enjoy an organized tour of the local Temecula wineries that includes transportation, lunch and tasting fees to three of four wineries. The cost is $66 per person. Contact Debra Donley for more information at: Debra@ftrmetalproducts.com.

For additional information on WCSMA, visit their Facebook page or www.wcsma.us.

NESMA Holds Holiday Party; Board Members Take Field Trip

The New England Spring & Metalstamping Association (NESMA) held its annual Holiday Celebration on December 15, 2010 at the Silo Restaurant in Farmington, Conn.

NESMA encouraged attendees to bring non-perishable food contributions for the United Way of West Central Connecticut to distribute locally. The response was overwhelming and many different NESMA members had to fill their car trunks with donations to deliver to the United Way. NESMA used the occasion to recognize four member companies and three individuals who have contributed above and beyond the call of duty.

Bob Iorio of Feroleto Steel Inc., a former director of NESMA and the Spring Manufacturers Institute (SMI), recently changed jobs after 30 years of employment at Gibbs Wire & Steel. Bob was unable to attend

the festivities, but at Bob’s request I accepted the award for him.

Manny T avares, a NESMA director, came to this country from Portugal many years ago and started at Rowley Spring and Stamping as a kick press operator.

Manny is the rare person who has spent his entire career at one firm.

Over the years Manny kept rising in the company and is now executive vice president and general manager.

In addition, Manny is a tireless NESMA contributor whose term as a director regrettably ended in 2010.

Yin Wang, president of Nucoil Industries, along with his father, the founder of Nucoil, flew in from Singapore to receive the award. Yin was recognized for his work with Bristol Technical Vocational School (Bristol Tech), a regional technical high school in Bristol that serves 30 communities in central Connecticut.

Bristol Tech has a manufacturing

by Ted White

8 SPRINGS Spring 2011

program where students can learn, among other things, the coiling of springs and manufacture of stampings. Yin arranged for Bristol Tech to receive some very modern CNC equipment. Before Nucoil’s involvement, the techniques the school offered students were restricted to those using older equipment.

Through Yin’s efforts, students can now gain experience on very modern equipment.

In the last couple of years, NESMA has recognized member firms with longevity in the spring and stamping industry. With so many companies with rich histories, NESMA found it impossible to recognize them all at one event.

This year, the association honored: Industrial Steel & Wire (1935), Tollman Spring Company Inc. (1945), Acme-Monaco Corporation (1947) and Gibbs Wire & Steel Company, Inc. (1956).

Recognizing the Bristol Tech Gem An award was also presented to Bristol Tech at the holiday party for its manufacturing technology program run by Ben Russell. The school has long worked with NESMA to train students to operate spring and stamping equipment. Also attending the award presentation were Ben, Joyce Mowrey, Bristol Tech principal, and Ben’s associate, Stephen Hanecak.

Earlier this year NESMA presented a check to Bristol Tech.

Since the school has a culinary program, they held a “thank you” luncheon at the school for NESMA board members. The board was joined by Joyce, Ben and some other members of the staff.

Attending this luncheon was one of the most eye opening events I’ve

Bristol Tech was honored at the 2010 NESMA Holiday Celebration. Pictured (l-to-r): Joyce Mowrey, principal of Bristol Tech; Stephen Hanecak, Bristol Tech manufacturing program associate; Ben Russell, head of the Bristol Tech manufacturing program; and Bill Lathrop, NESMA president and president of Colonial/Han-Dee Spring.

had in recent memory. From the beginning, the enthusiasm with which the students served us was impressive. You could tell these students, of somewhat difficult backgrounds, were not merely fulfilling school requirements, but really enjoyed the training they received and were pleased to engage our group.

When the luncheon concluded, the cooking and serving members came out of the kitchen for a photograph session. At a time when teenagers are frequently maligned for indifference to their surroundings, this group was anything but. The smiles and excitement on their faces were quite inspiring. I had never been to a technical school before and certainly not one with a culinary program. I remember thinking that the person in charge of this program (who is a chef at a nearby restaurant) was truly good at what he did.

We n e x t v i s i t e d t h e manufacturing program and I was once again shocked at the student’s enthusiasm. One student

demonstrated his work and showed us how he had improved his previous efforts. Not only was he interested in what he was doing, he worked hard to increase the caliber of the product he manufactured.

I had been quite impressed by the culinary department and later realized that it was not isolated to this one department. It was evident that multiple departments were achieving the same results and that Bristol Tech was not your ordinary institution.

Furthermore, I had to confess that I had been completely wrong about NESMA’s ongoing involvement and support. Before the tour, I thought NESMA’s support for Bristol Tech was a wasted portion of my company’s dues. I believed NESMA’s philanthropic endeavors for Bristol Tech only helped the local spring manufacturers, and did not appreciably benefit Hardware Products, located more than 100 miles away.

SPRINGS Spring 2011 9

I now believe any institution or program that inspires young people and helps convert students with inauspicious beginnings into meaningful members of society deserves to be supported.

Unfortunately, this is not always the case. Bristol Tech (like all

government programs) has been the subject of budget cuts and has even been considered for complete elimination. Only through the herculean efforts of many groups has it survived, but at lower levels of funding.

I urge all NESMA members to appreciate the gem that is in their midst. When the State of Connecticut looks at Bristol Tech in the future, NESMA members need to make sure the school is touted for expansion rather than budget cuts.

CASMI Elects 2011–2012 Officers The Chicago Association of Spring Manufacturers, Inc. (CASMI) has announced its officers and board of directors for 2011-2012.

Rick Ross, Rockford Spring, is the new president of CASMI. Other officers are: JR Strok, Mohawk Spring Corp., vice president; Tony Iuliano, Rapid Wire Forms, secretary/treasurer; and Joe Sirovatka, Bel-Air Manufacturing, past president.

The CASMI board of directors includes: Bob Henneberry,Rockford Spring; Jeff Burda, Master Spring & Wire Form Company; Joshua Kahn, Perfection Spring & Stamping Corp. ; and Tom Renk, CASMI. The next CASMI member dinner will be held on April 20 at The

10 SPRINGS Spring 2011

Wellington Restaurant in Arlington Heights, Ill. Bill Strauss, senior economist and economic advisor in the economic research department of the Federal Reserve Bank of Chicago, will present an “Update on the U.S. Economic Outlook.”

CASMI has scheduled its annual golf outing for Wednesday, June 1 at Pheasant Run Resort and Golf Club in St. Charles, Ill. After a summer hiatus, the organization will reconvene for CASMI Day at the Races on September 22 at Arlington Park Race Track in Arlington Heights, Ill. The event will begin at 11:30 am.

For more CASMI information, visit www.casmi-springworld.org or phone (630) 369-3466. u

CASMI held its annual Valentine Dinner Dance on February 12 at Twin Orchard Country Club in Long Grove, Ill. New CASMI president Rick Ross and his wife, Kathy, were in attendance.

Top: CASMI Valentine Dinner Dance participants are pictured, back row (l-to-r): Scott and Dina Sanchez, Adrienne Banas, and Rick Carr; front row (l-to-r): Reb and Megan Banas, Joe and Sheila Goldberg, and Ron Banas.

Be Aware

OSHA Inspections: How You Were Chosen and What to Expect

Safety Tips

By Jim Wood

I

t is a misconception that OSHA picks companies at random. It is true, however, that they conduct inspections without advance notice. They focus their inspection resources on the most hazardous workplaces in the following order of priority: 1. Imminent Danger Situations – hazards that could cause death or serious physical harm receive top priority. Compliance officers will ask employers to correct these hazards immediately, or remove endangered employees.

2. Fatalities and Catastrophes – incidents that involve a death or the hospitalization of three or more employees come next. Employers must report such catastrophes to OSHA within eight hours.

3. Complaints – allegations of hazards or violations also receive a high priority. Employees may request anonymity when they file these complaints.

4. Referrals - hazard information received from other federal, state or local agencies, individuals, organizations or the media receive consideration for inspection.

5. Follow-ups – checks for abatement of violations cited during previous inspections are also conducted by the agency in certain circumstances.

6. Planned or Programmed Inspections – inspections aimed at specific high-hazard industries, or individual workplaces that have experienced high rates of injuries and illnesses, also receive priority.

Jim Wood is an independent regulations compliance consultant to the Spring Manufacturers Institute (SMI). A certified instructor of the OSHA Out-Reach Program, Wood conducts seminars, plant Safety Audits and In-House Safety Trainings. These programs help companies create safer work environments, limit OSHA/Canadian Ministry of Labor violations and insurance costs, and prepare for VPP or SHARP certification. He is also available for safety advice and information by phone at (630) 495-8597 or via e-mail at regs@smihq.org.

When an OSHA inspector appears at your front door, the first thing you should do is ask for his/her credentials, which include both a photograph and a serial number. If you have any doubt about their identity, call the local OSHA area director and get confirmation that the person is indeed an inspector.

Opening Conference – The compliance officer will explain why OSHA selected the workplace for inspection and describe the scope of the inspection, walk around procedures, employee representation and employee interviews. The employer then selects a representative to accompany the compliance officer during the inspection. An authorized representative of the employees, if any, also has the right to go along. In any case, the compliance officer will consult privately with a reasonable number of employees during the inspection.

Walk Around – Following the opening conference, the compliance officer and the representatives will walk through the portions of the workplace covered by the inspection, inspecting for hazards that could lead to employee injury or illness. The compliance officer will also review worksite injury and illness records and posting of the official OSHA poster.

During the walk around, compliance officers may point out some apparent violations that can be corrected immediately. While the law requires that these hazards must be cited, prompt correction is a sign of good faith on the part of the employer. Compliance officers try to minimize work interruptions during the inspection and will keep confidential any trade secrets they observe.

Closing Conference – After the walk around, the compliance officer holds a closing conference with the employer and the employee’s representative to discuss the findings. The compliance officer discusses possible courses of action an employer may take following an inspection, which could include an informal conference with OSHA or contesting citations and proposed penalties. The compliance officer also discusses consultation and employee rights.

SPRINGS Spring 2011 11

Results – OSHA must issue a citation and proposed penalty within six months of the violation’s occurrence.

Citations describe OSHA requirements allegedly violated, list any proposed penalties and give a deadline for correcting the alleged hazards. Violations are categorized as: Other than serious; serious; willful; repeat; and failure to abate. Penalties may range up to $7,000 for each serious violation and up to $70,000 for each willful or repeat violation. Penalties may be reduced based on the employer’s good faith,

inspection history, and the size of the business. For serious violations. OSHA may also reduce the proposed penalty based on the gravity of the alleged violation. No good faith adjustment will be made for alleged willful violations.

Appeals – When OSHA issues a citation to an employer, it also offers the employer an opportunity for an informal conference with the OSHA area director to discuss citations, penalties, abatement methods, abatement dates or any other information pertinent to the inspection. The agency and the employer may work out a settlement agreement to resolve the matter and to eliminate the hazard.

Alternatively, employers have 15 working days after receipt of the citation and proposed penalties to formally contest the alleged violations and/or penalties by sending a written notice to the OSHA area director.

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Cautionary Tale: Torsion Spring Stresses — Part 2 Spring Technology

by Mark Hayes

P

art 1 of this tale questioned whether the classical mechanics formulas for calculating stresses in torsion springs were correct. In part 1 it was shown that the mandrel diameter influenced torque output using the spring shown in figure 1 fitted with strain gauges.

The torsion springs were made with a gap between the coils, had tangential legs, and used 4mm square spring steel wire. To ensure the test spring was not subject to plastic deformation the maximum deflection was limited to 45 deg/9.3Nm, equating to a theoretical uncorrected stress of 870MPa, or 52 percent of the wire UTS.

Figure 1: Gauge locations

but the spring visibly sheared producing stresses that were not the same at each of the strain gauge location.

The average stress measured with each mandrel was similar, but the difference in maximum and minimum was much greater with the small mandrel. The stress data for a constant torque will now be discussed.

The strain gauge results were used to calculate the stress for an applied torque of 8Nm. The results in table 1 show the average calculated for the loading/ unloading stresses measured at the four gauges, and they were measured at both the static and driven end of the spring. In theory the stresses at each end should be the same, and to a first approximation this theory was shown to be true in practice. The theoretical stress at 8Nm is 750N/mm2 uncorrected, and 810 N/mm2 corrected1.

Mandrel Diameter Ø25 Static

Ø30

Driven

Static

Ø32

Driven

Static

Driven

40.0

39.6

Angle (Deg) at 8Nm 43.5

The spring was supported during testing on interchangeable mandrels of Ø32, 30, 25mm diameter.

The spring legs were loaded using Ø9mm pins at a radius of 40mm from the jig center.

When deflecting to a fixed angle, the torque, and hence stress, was lower when using a smaller mandrel, Mark Hayes is the senior metallurgist at the Institute of Spring Technology (IST): The International Independent Centre of Excellence for Spring Technology. He manages IST’s spring failure analysis service, and all metallurgical aspects of advice given by the Institute. He also designs and delivers the majority of the spring training courses that the IST offers globally. Readers are encouraged to contact him with comments about this cautionary tale, and with subjects that they would like to be addressed in future tales. Contact Hayes at (011) 44 114 252 7984, fax (011) 44 114 2527997, or e-mail m.hayes@ist.org.uk.

43.3

40.6

40.8

Stress (N/mm2)

Position G1

856

850

822

814

798

809

G2

915

928

820

796

787

763

G3

685

689

714

711

731

733

G4

626

621

714

741

753

788

Average

771

772

768

766

767

773

Table 1: Stress at the Static and Driven ends subject to a constant 8Nm torque

These results show that with the larger Ø32 and Ø30mm mandrels gauge 1 is the highest stressed position, which is to be expected. However, when the mandrel diameter becomes smaller, then the maximum stress position moves to gauge 2 (as would exist for a spring without a mandrel), so that with the Ø25 mandrel, gauges 3 and 4 have a reduction in stresses, indicating that the coil shearing is producing an increase stress at positions 1 and 2 and a reduced stress at position 3 and 4. It can also be seen that as

SPRINGS Spring 2011 13

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the mandrel diameter reduces, the maximum stress measured increases.

Since the maximum measured stresses are approximately equal to the calculated corrected stress, it is reasonable to continue to use this calculation method, but beware that the actual maximum stress will be higher than the calculated when a relatively small mandrel is used. However, this work shows that the current method of correcting the calculated stresses in all design standards around the world are flawed, and while they give approximately the right result (but only with relatively large mandrels), a new calculation method would be recommended.

A new multi-national research project to produce an internationally acceptable formula for correcting torsion spring operating stresses is required.

The moral of this cautionary tale is that the operating stresses in torsion springs could be significantly different from the values calculated in CAD programs, and this may help explain some problems that are encountered with this type of spring. u

14 SPRINGS Spring 2011

1 The

practice in Europe is to correct the calculated stress at the OD of a torsion spring by a factor greater than 1. The SMI uses a factor of 1. A.M. Wahl in “Mechanical Springs” and Berry in “An Investigation of Small Helical Torsion Springs” published in 1952 by the Institution of Mechanical Engineers, have shown that the correction factor at the OD is less than one. Their analysis assumes that the coils remain concentric.

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Under The Influence: What’s Driving Environmental Sustainability Deeper into the Supply Chain?

by Diana Gruhn

SPRINGS Spring 2011 17

“It’s patriotic!”

responded second-generation spring manufacturer, Jonathan Slass, general manager of Rotor Clip Company, when asked why he uses sustainable business practices at his plant in Somerset, N.J. He explained that energy efficiency reduces U.S. dependency on foreign imports.

A practical businessman, Slass began thinking green in the late 1980s as a means of reducing energy costs. That’s long before energy leaders identified that more than three quarters of the greenhouse gas (GHG) emissions that are linked to many industry sectors come from their supply chains.1 This is why large corporations have already begun to focus on indirect GHG emissions (referred to as Scope 3), which flow downstream through their supply chain.

Spring manufacturers whose goods end up either directly or indirectly in the end products used by large original equipment manufacturers (OEMs) are part of this downstream flow. With the power to make purchasing decisions, OEMs are in a strong position to influence manufacturing processes throughout their supply chains.

While Rotor Clip and other spring manufacturers like Automatic Spring Products Corporation of Grand Haven, Mich. and Betts Spring Company of Fresno, Calif. already save on energy costs by practicing environmental sustainability, statistics show there’s plenty of room for improvement. According to a national “Next Generation Manufacturing” study by the Manufacturing Performance Institute (MPI), of the more than 2,500 U.S. manufacturers surveyed in 2009, only 16 percent of respondents ranked green/sustainability as highly important to their success over the next five years. Another 16 percent said it was not important.

Worldwide efforts have been made to capture data related to Scope 3 emissions with the cooperation of the OEMs that ultimately purchase spring products. This should get small- to mid-sized spring manufacturers to start thinking not whether or not, but just how soon and how far down the supply chain the push toward sustainability will travel.

Emphasizing the significance of this trend, the MPI study also reports that U.S. manufacturers who fail to prepare for the market shift toward environmentally sustainable manufacturing processes will be unable to compete in the new marketplace. Making sustainability

18 SPRINGS Spring 2011

a strategic business priority primes U.S. manufacturers to meet the rising demand for sustainably manufactured products. Those who fail to adopt best practices in emissions management, waste reduction and natural resource consumption expose their business to reduced profit margins, market share loss, and financial penalties from regulatory bodies.

Ready or not, sustainability is quickly becoming a key competitive differentiator in the global marketplace.

Leadership as a Model for Change While studies show that factory greening is a low priority among many small- to mid-sized U.S. manufacturers, it is highly ranked among companies at the top of the supply chain that have responded to increased market and regulatory demands.

These companies are leading the charge toward supply chain sustainability. Cost and environmental concerns coupled with consumer demand and emerging regulatory requirements have inspired a growing number of large corporations to promote environmental management within their supply chain.

Many are deploying environmental best practices by establishing guidelines for environmentally sustainable business practices, and by cooperative efforts designed to educate suppliers.

General Motors, in coordination with the Environmental Protection Agency (EPA), educates and provides support for vendors within the automotive manufacturers’ supply chain through its Supplier Partnership for the Environment program.

“Many industries are leading by example, without government mandates, and partnering with suppliers to ensure best practices for sustainability,” said Kristin Zimmerman, Ph.D., a member of General Motors research and development advanced technology infrastructure team. The Suppliers Partnership for the Environment is a partnership between automobile OEMs and the EPA that was developed to add value

throughout the automotive industry’s supply chain while improving the environment.

Last year alone, Ford Motor Company surveyed 35 of its top global suppliers on their energy usage and estimated greenhouse-gas emissions. Their plan was to better understand the carbon footprint of its supply chain to eventually create a broad-based carbon management approach for Scope 3 emissions. As part of this effort, Ford shared supplier feedback with World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

SC Johnson and Siemens AG are among the other companies who participated in this initiative led by the WRI and WBCSD. WRI and WBCSD are leading a global collaboration of businesses, governments and non-governmental organizations to develop credible methods for measuring and reporting corporate GHG emissions.

They are currently analyzing the Scope 3 emission reports collected by Ford and the other participants to draft a new Accounting & Reporting Standard to be used to measure indirect or Scope 3 emissions. The final report is expected to be released this spring.

Consideration should also be given to efforts within the public sector toward pushing sustainability further down the supply chain. According to a report made by the EPA in late 2010, “Managing Supply Chain Greenhouse Gas Emissions — Lessons Learned for the Road Ahead,” the U.S. government plans to incorporate emissions management performance into its future purchasing decisions. Acting also as a leader among large entities, the government has encouraged its vast base of suppliers to measure and report their GHG emission.

The motivational shift toward a greener supply chain as evidenced by the substantial efforts put forth by large private and public entities, in the U.S. and globally, is a harbinger for the new way manufacturers will be expected to conduct business.

Green, the New Green Historically, purchasing decisions made through the supply chain have been based on cost, quality and service — sustainability is quickly emerging as a fourth measure.

“If suppliers are not managing their energy usage, both internally and across their own supply chains, then they are not effectively managing their costs,” according to Zimmerman.

Energy is a volatile commodity and price fluctuations impact cost and availability of goods. Efficient energy usage helps control costs and is one way spring manufacturers can insulate themselves against spikes in energy and fuel prices. By tracking energy usage, manufacturers can stabilize some of their expenses thereby reducing costs both up and downstream. Cost

control is one of the reasons that companies at the top of the supply chain are receptive to helping suppliers implement sustainable manufacturing practices.

Another factor influencing OEMs to promote sustainability throughout the supply chain is brand consciousness. OEMs build their brands on good corporate citizenship as a way to satisfy customers.

By working with companies whose commitment to sustainability is in alignment with their vision and values, OEMs strengthen their image, in effect adding value to their brand.

For OEMs, influencing the supply chain toward sustainability is a practical business matter. The role of corporations is generally not to mandate business practices to suppliers. Requirements for environmentally sustainable practices are established by the International Organization for Standardization (ISO) and the EPA, while OEMs serve as leaders exemplifying the effectiveness of energy management. The ISO is a non-governmental organization that develops standards to measure and communicate an organization’s level of quality. ISO 14000 is a category of standards that addresses environmental management. The first two standards, ISO 14001:2004 and ISO 14004:2004 represent requirements and guidelines, respectively, for environmental management systems. The other standards in this category represent more specific environmental aspects such as performance No matter the size of the spring or its intended application, Instron® offers complete solutions for a wide variety of spring testing requirements.

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“While environmental hygiene

makes the world a better place to live, cost management, service, and quality cause businesses to thrive. The amount of natural gas we consume, normalized for production volume, has been reduced by 20 percent. Electrical energy consumption is down by 22 percent and water consumption is down by 39 percent per unit of production,” detailed Bob Van Dyke, Automatic Spring.

evaluation, life cycle analysis and auditing. Achieving ISO certification provides written assurance that an independent third party has audited and verified that a company’s management systems meet established standards.

A push from customers to invest in systems to better manage energy usage seems a tall order, but customer influence is perhaps the greatest motivator.

For the OEMs that many springmakers serve, it’s a practical business approach -- a means for achieving production efficiencies, lowering energy costs, and satisfying customers. Is this approach feasible for a smaller shop?

Supply Chain Sustainability in Action Some small-to-mid sized spring manufacturers have already implemented environmentally sustainable practices either at their own behest or with encouragement from OEMs. “What the OEMs and others did was create motivation to formalize and systematize our approach to environmental management through ISO 14001.

The goal-setting, recordkeeping, and accountability that are a part of ISO 14001 have, no doubt, helped us to gain momentum in our efforts,” explained Bob Van Dyke, a human resource manager who is in charge of environmental affairs at Automatic Spring.

While environmental hygiene makes the world a better place to live, cost management, service, and quality cause businesses to thrive. At Automatic Spring, “the amount of natural gas we consume, normalized for production volume, has been reduced by 20 percent.

Electrical energy consumption is down by 22 percent and water consumption is down by 39 percent per unit of production. Those accomplishments have helped us to maintain and improve our competitive position

20 SPRINGS Spring 2011

in this world market. This has not gone unnoticed by our customers, some of whom have recognized us with awards and with additional business,” detailed Van Dyke.

The ISO 14001-certified Betts Spring Company was also encouraged by their OEM customers to get the certification. As a result, they have implemented a wide variety of sustainable programs to accomplish this including aggressive energy conservation through the careful monitoring and control of heat and light applications for production as well as office use. Steel, wood, batteries and paper are recycled. In addition, they have invested heavily in air pollution control technology — Best Available Control Technology — for carbon dioxide, particulate matter and nitrous oxide emission control. Betts Spring has been recognized in their community for storm water control.

Betts Spring, “believes it [sustainable business practices] has contributed to allowing our company to flourish through the most difficult economic period in our nation’s history. While it has contributed to new business, we are confident that this commitment will have an even greater significance to growth in the future,” said Terry Holcomb, vice president of operations.

Sustainability also stoked innovation at Betts Spring. They have and continue to develop new product lines specifically geared to reduce weight and increase aerodynamics in vehicles. These new products ultimately reduce fossil fuel consumption, lower emissions and enhance the life expectancy of a vehicle.

Rotor Clip, on the other hand, emphasized that while sustainability efforts do cut costs, they have not helped to maintain business. Although similarly encouraged, Slass said his experience showed there was no net gain from investing in ISO 14000-certification.

Although Slass has never formally calculated his savings, taking practical steps have formed enough of a

savings incentive for him to continue taking measures toward energy reduction.

Taking practical steps toward energy reduction has made a difference for Rotor Clip. For instance, they suggest suppliers purchase raw materials on returnable skids and maximize truckloads to save on shipping and fuel costs. A web-based portal is available for suppliers to transact business with Rotor Clip. Additional efforts to reduce energy usage include requiring customers to ship in returnable containers, and consolidating orders into full skid loads whenever possible.

Further efforts to improve energy efficiency are done internally and include a push to reduce paper usage by instituting the exclusive use of electronic communication. Switching to energy efficient variable-frequency drives (VFDs) improves the efficiency of motor -driven equipment by adjusting the motor speed to match the changing output load, and has made a big difference in reducing electricity usage. Rotor Clip now follows the European standard for light bulbs by using T5s instead of HID lighting. A new rooftop air conditioning system is more energy efficient than the old system. Plus, air leaks that cause machines to vibrate increase electrical costs by about $.25 an hour, and by repairing them, significant savings have been achieved.

Underscoring the complexity of company greening, Slass said you have to consider other variables when measuring cost savings. For example, fluctuations in business impact energy usage. His plant used less energy in 2009 because business dipped, but this cannot be factored in with other energy usage savings.

Notwithstanding any planned or incidental rewards, the factor that most influenced the decision for these three spring manufacturers to apply energy efficient measures at their plants was a desire to do the right thing.

Doing the right thing proved to be valuable to business by reducing expenses. A significant portion of a manufacturer’s GHG emissions is generated by electricity usage,

which can be directly linked to production costs, giving manufacturers a competitive advantage. That savings can be used to provide pricing flexibility or reinvested into the business to drive innovation.

Implementing Organizational Change Once convinced that bringing lean and green practices to the shop floor are a profit center and not a cost center, figuring out where to begin is a springmaker’s greatest challenge. The prospect of initiating a change process toward sustainability can seem difficult and overwhelming, particularly for a

SPRINGS Spring 2011 21

“It is highly likely that substantial

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small shop with scant people power to spare for such an undertaking. It’s true that taking a GHG inventory for the first time can be time-consuming and requires dedicated staff time and resources, but the same could be said for implementing any new strategic business plan. Manufacturers that are willing to modify their business practices can avail themselves of services provided by organizations that offer guidance, knowledge and other resources to help them through the process.

Taking a GHG inventory is the first step toward gauging the carbon footprint a factory creates within a given period of time. Manufacturers must allocate

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time and resources to gather utility bills and other necessary information. The EPA’s Green Suppliers Network (see related article on page 27) is specifically geared to help manufacturers learn about strategic methods for lean manufacturing and environmental responsibility. Their recommendations are based on the GHG Protocol established by WRI/WBCSD. They have created a variety of learning modules and tools to measure emissions. To be accepted into the program, participants must agree to a review and make a few other commitments. Having a low-cost technical review enables manufacturers to identify strategies for improving manufacturing processes and using materials more efficiently.

For help in adopting best practices and strategies to drive growth, competitiveness and profitability, spring manufacturers can reach out to their local chapter of the National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership (MEP).

“It is highly likely that substantial profitable sustainability gains can be realized through standard lean manufacturing practices to ‘weed out waste’ in spring manufacturing. Opportunities that show additional promise can be found in reduced energy and materials use in the heat-treatment and coating/ plating/painting processes in spring manufacturing,” said Lee Swindall, director of consulting services for the Wisconsin-based MEP. There are MEP centers in every state; visit http://nist.gov/mep/find-your-local-center. cfm to find one near you.

Further resources and incentives are available through local, state and national governing bodies to offset some of the costs of adopting energy efficient technology. These incentives vary from state to state and sometimes even from town to town.

Rotor Clip is getting ready to put up solar panels at its New Jersey facility. Slass is taking advantage of a 30 percent tax credit incentive from the federal government and New Jersey’s Solar Renewable Energy Certificates (SREC) program, whereby he earns credits for energy generated. Those credits are sold to electricity suppliers

through the SREC tracking system. The solar panels will generate an approximate annual cost savings of 25 percent and, together with the incentives, the solar panels should pay for themselves within five years.

There are plenty of incentives and resources available for manufacturers that want to organize and measure sustainability initiatives on their own. Manufacturers with limited personnel should consider hiring a consultant that helps organizations achieve ISO 14000 certification. They can take a manufacturer’s leadership team through the certification process step-by-step.

“By implementing ISO 14000, business leaders demonstrate a commitment of resources and effort.

It shows they are willing to implement a true process approach, which includes recording and documenting, to their sustainability efforts. ISO 14000 is an internationally-recognized standard, and as the risks associated with non-conformance increase on a national and international basis, it will become increasingly important across most, if not every, industry’s supply chains,” said organizational change expert, Fred Raimondo, president of Verdant-Consulting Group.

Transformation toward environmentally sustainable manufacturing processes is well underway and increasing in significance. “Sustainability in products and processes is an essential driver of global competitiveness and success. Manufacturers that embrace sustainability in products and processes are well positioned to gain a competitive advantage and capture new markets and customers,” said Swindall.

Now is the time for spring manufacturers to decide how they will compete in the changing marketplace.

Can business as usual be sustained over the next 5, 25 or 50 years? Controlling costs must be a business imperative for all spring manufacturers by thinking in terms of sustainability and executing a plan. Each business has to look not only at what the nearest competition is doing, but also at what business approaches their customers are taking.

Sustainability as a means of achieving cost savings, satisfying customers and improving the prospect of getting new or additional business is in alignment with the objectives for implementing any new strategic business plan.

The Time is Now Actions that are already underway, in both the private and public sectors nationally and globally, indicate that growth among spring manufacturers looks greener as costs and customer demands accelerate efforts to drive environmentally sustainable business practices deeper into the supply chain.

According to the EPA, nearly all of the 27 million cars around the world that reach the end of their useful

life are recovered for recycling each year compared to 60 percent for paper and seven percent for plastics.

“Considering that automobiles are among the most recycled consumer products in the world, the business of sustainability is not going away, it’s only going to grow in importance and become a key requirement – a license to operate”, said Zimmerman.

The inevitable changes that influence manufacturing processes and products are a call to action for U.S. spring manufacturers to shift with the changing marketplace and meet the rising demand for sustainable manufacturing practices. u Diana Gruhn is an accomplished marketing communications professional whose career spans over 15 years working with businesses of all sizes in the manufacturing, IT and not-for-profit sectors.

She has a proven track record in developing integrated marketing programs for web, print and multimedia platforms that raise brand awareness and increase profitability. Contact Gruhn by phone at (631) 902-7744 or e-mail dianadianasays@gmail.com.

1 Y.

Anny Huang, Christopher L. Weber, and H. Scott Matthews, “Categorization of Scope 3 Emissions for Streamlined Enterprise Carbon Footprinting,” Environmental Science & Technology, Vol. 43: No. 22 (2009): 8509 http://pubs.acs.org/doi/full/10.1021/es90164a.

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Flashback Get Ready for ISO 14001 What You Need to Know About Environmental Management Systems

by Stefan Heinloth, DQS, Inc.

(Editor's note: This article was originally published in the Summer 2000 issue of Springs. When the original article was published, Heinloth was based in the U.S. Heinloth is now the managing director of UL DQS, based in Germany. His associate, Jerry Skaggs, provides an update to this article on page 27.)

Facts and figures Organizations of all kinds are increasingly concerned with achieving and demonstrating sound environmental performance by controlling the impact of their activities, products or services on the environment. They face increasingly stringent legislation and other measures to foster environmental protection.

A general environmental protection movement started in Europe in the late 1970s due to the higher population density compared with the U.S. Many organizations formulated environmental policies and objectives in the 1980s to address public concerns for the environment. As of January 2000, the number of organizations with registered Environmental Management Systems (EMS) exceeded 10,000 in Europe.

A similar movement started in the U.S. in the early 1990s. In the past years, many larger corporations have started to include environmental policy statements in their annual reports. Some have already implemented a comprehensive EMS. Ford has even started to require its suppliers to demonstrate their environmental awareness by a registered EMS. The number of organizations with a registered EMS in the U.S. has just exceeded 1,000 in February 2000. This number will increase rapidly in upcoming years.

The ISO 14001 Standard ISO 14001, EMS, was released in 1996. It is designed to provide organizations with the elements of an effective EMS, which can be integrated with other management requirements, to assist organizations in achieving environmental and economic goals. ISO 14001 provides an EMS model, as shown in Figure A. How to Start Most organizations will perform an initial analysis of their current environmental position to determine the need for a formal environmental management system. ISO 14001 provides valuable information for such an initial analysis in Annex A3.

A small team within the organization should identify the significant environmental aspects associated with the activities at operating units, considering: • Emissions into the air • Releases to water • Waste management • Contamination of land • Use of raw materials and natural resources • Other local environmental and community issues The team should consider normal operating conditions, start-up and shutdown conditions, as well as reasonably foreseeable emergency conditions such as flood, windstorms and fire.

24 SPRINGS Spring 2011 ©iStockphoto.com/Ali Mazraie Shadi

In addition, the organization must identify all applicable legal and regulatory requirements, which will be subject to change. These requirements will differ substantially between states and communities.

Based on this initial analysis, the organization can define its significant environmental impacts, which need control and management’s attention. In a review of this initial analysis, the top management of the organization can determine the degree to which a formal EMS is deemed necessary and important for the organization. The organization’s values will have a major impact on this decision.

Environmental Policy Once top management has decided to implement an environmental management system, the first step will be to define the organization’s environmental policy.

This policy is the driver for implementing and improving the EMS. It must be appropriate to the nature, scale and environmental impacts of the organization’s activities, products and services.

The environmental policy must include the commitment to legal and regulatory compliance, as well as a commitment to continual improvement. It provides the framework for setting environmental objectives and targets. This policy must be documented and communicated to all employees. In addition, it must be available to the public.

Planning The organization will establish documented environmental objectives and targets, at each relevant function and level within the organization.

These objectives and targets will be based on the results of the initial analysis, where significant environmental impacts and regulatory requirements had been identified. Usually, an organization will define performance objectives regarding all, or at least the most significant, environmental impacts. Consideration must include technological as well as financial aspects.

In the next step, the organization will establish a program to achieve its objectives and targets. This program will consist of action plans for different functions, including the means and the timeframe needed. This program will be implemented to achieve improved environmental performance of the organization.

Implementation and Operation This aspect is the cornerstone to successful environmental management — good intentions are turned into reality. The effective implementation of the EMS requires defined roles, responsibilities and authorities throughout the organization. A management representative must have the responsibility to oversee the EMS and its performance.

In addition, all employees who can have a significant impact on the environment must be made aware of

their roles and responsibilities within the EMS and the importance of respective procedures. It remains management’s responsibility to ensure adequate competence of such personnel.

The organization must control those operational processes that have a significant impact on the environment. Operational control can be achieved through documented procedures, clearly communicated operating criteria and competent personnel with an awareness of environmental impacts. Furthermore, procedures must be established to ensure emergency preparedness and adequate response. They may include fire drills, responses to spills and leaks, and any other reasonably foreseeable emergency situations. Such procedures should be tested periodically, where practicable.

Checking and Corrective Action The ongoing measurement and monitoring of relevant operational characteristics is important to track progress toward established objectives and goals.

Only measurable data will provide a reliable basis to evaluate the organization’s performance regarding environmental objectives and its policy.

Whenever situations are identified in which actual performance deviates from established limits, corrective action is mandated. The organization must establish the respective responsibilities and authorities. Any corrective action should be targeted toward the causes

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Canada

159

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Total

439

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Environmental Policy Management Review

Checking and Corrective Action

of encountered problems, rather than their superficial symptoms.

Changes that result from corrective action must be recorded. Such records may impose a legal and financial risk on organizations in the U.S. because some Environmental Protection Agency (EPA) regulations call for fines for certain regulatory violations, even when the organization identified the problem internally and resolved it promptly. Self-declaration is a much-discussed topic in today’s U.S. environmental regulatory system that is still waiting for resolution.

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26 SPRINGS Spring 2011

Initial Analysis/Review of Environmental Policy

Fax: 763-780-2182 Toll Free: 1-877-780-2131 www.larsonsystems.com

Planning Implementation and Operation

Management Review Finally, top management has to review the EMS periodically to ensure that it remains suitable and effective in achieving environmental objectives, including continual improvement. This step closes the loop to the environmental policy. At the beginning, top management will define the environmental policy as the driver for the EMS. Then, at defined frequencies, top management will review progress toward this policy, as well as the need for changes of the EMS or the policy itself.

Summary and Conclusion The international ISO 14001 standard is gaining popularity in North America. The need for systematic corporate actions to protect the environment is apparent, and public awareness of environmental issues increases rapidly. The top management of each organization must define its own standing regarding environmental concerns.

The ISO 14001 standard offers a valuable and worldwide recognized management tool to establish a systematic approach toward corporate environmental protection. Including the introduction and appendices, it has 20 pages; the requirements for an environmental management system take up only three pages. Every organization should be aware of the content of this standard and use it to assess its own position.

The first 1,000 companies in North America that have registered their EMS have reported substantial benefits, including: • Cost savings for waste handling • Increased employee motivation and retention • Reduction of legal risks • Competitive advantages through improved product design and registration.

These should be good reasons for every organization’s leadership to learn more about environmental management. The top management of every organization is ultimately responsible for the organization’s impact on the environment. The time has come to act in a systematic and planned manner. u

Flashback Update Green Supply Chain Management and Its Implication on Environmental and Energy Performance

By Jerry Skaggs, P.E.

The Automotive Industry Push Environmental and energy performance within all manufacturing industries is critical to the long term profitability and sustainability of each company and industry. The spring industry is no exception.

For over ten years there has been a continuing force applied throughout the supply chain to increase performance efficiencies and reduce environmental footprints. In January 2000, the Automotive Industry Action Group, on behalf of the “Big Three,” sent a letter stating all Tier 1 automotive suppliers had to be registered to an ISO 14001, Environmental Management System (EMS), no later than July 1, 2003.

The letter stated that “working together will improve our environmental management capability and is part of the sourcing decision for new business.”

Thus began the first real industry push towards Green Supply Chain Management (GSCM). Over these past years the benefits of an EMS have worked their way throughout the entire automotive supply chain. One study1 finds “The effects of ISO 14001 on GSCM practices to be quite large. Facilities with an EMS are about 40 percent more likely to assess their suppliers’ environmental performance than those without.” These studies have found that the adoption of an EMS is influenced by firm size, export ratio, debt ratio, stakeholder’s environmental preferences and pressures, and firm’s financial flexibility.

However, it is possible that even though an adopter of EMS may not directly improve its environmental performance, it may implement policies and practices that affect and influence the environmental actions of other organizations. For example, EMS-certified facilities will influence its supply chain and will likely implement green supply chain management (GSCM) practices and thus assess suppliers’ environmental performance when making their purchasing decisions. It is also probable that certified facilities will likely attempt to green their supply chain by requiring that their suppliers undertake particular environmental measures.

EMS Certified Facility Advantage The fact that an EMS promotes GSCM practices suggests the possibility of an EMS’ positive externality: If a firm assesses its suppliers’ environmental performance and requires them to undertake environmental measures, suppliers should subsequently improve their environmental performance. If so, EMS-certified facilities play a role in reducing environmental impacts outside their production process.

By virtue of undergoing certification, EMSregistered facilities will formalize their commitment to achieving environmental performance goals. Additionally, these facilities will show their commitment to embed environmental practices deep within their operational frameworks so that protecting the natural environment becomes an integral element of their operational strategies.

Some authors 2 distinguish two levels when explaining the objectives of an EMS: on the one hand, at a corporate level to advise and guide firms to reduce their environmental impact through identification, measurement and control activities; on the other hand, at a societal level to provide an internationally legitimized system of standardization that fosters international trade. Nevertheless, few studies focus on the analysis of the competitive advantages that firms can get from an EMS certification.

The lack of empirical evidence provokes skepticism among managers about the potential results of these types of environmental investments, so it is necessary to bring additional research that shows the competitive advantages that firms can really get by protecting the natural environment with specific environmental practices. In order to make an empirical contribution to the management field related to natural environment, the main objective of this article is to identify the competitive advantages that managers really associate to EMS certification.

Cost Advantages of Life Cycle Analysis Life cycle analysis can also be a source of cost advantages. It implies making a holistic analysis of a

SPRINGS Spring 2011 27

product’s impact on the natural environment along its whole life cycle — exploration of raw materials, design, manufacturing, transportation, sales, use and disposal. A specific practice which is based on life cycle analysis approach is the design for environment.

It involves considering the complete product life cycle when designing the environmental aspects of products or processes, in order to minimize the environmental impact of product use and disposal. It requires the development of products with a maximum useful life and that are easy to disassemble and recycle.

To understand the relationship between EMS and GSCM, it is important first to define a firm’s supply chain and its relationship with the natural environment.

The supply chain consists of all parties that are involved in fulfilling a customer request, including the suppliers, transporters, warehouses, retailers, and customers themselves. A facility’s supply chain impact on the environment stems from inputs that increase waste during product storage, transportation, processing, use, or disposal. These inputs affect a final producer’s products, production waste, and disposal.

Facilities that purchase inputs from a specific supplier also acquire waste from each supplier up the supply chain. One purpose of GSCM, therefore, is to avoid inheriting environmental risks from less environmentally-conscious suppliers. In so doing,

facilities assess the environmental performance of their suppliers and require suppliers to undertake measures that ensure the environmental quality of their products.

Understanding the Relationship between EMS and GSCM GSCM has potentially significant implications for an organization’s environmental performance because GSCM, together with EMS, offers a more comprehensive means of achieving environmental goals among networks of firms. To the extent that EMS-certified organizations are more likely to green their supply chain, the social benefits of EMS can be significant if these networks work together to reduce their environmental impacts.

The view is that EMS potentially promotes GSCM. At their core, both EMS and GSCM rely on a continuous improvement model. EMS adopters have knowledge and proficiencies in pollution prevention practices.

They also have invested in training their employees to seek out pollution prevention opportunities. By encouraging their employees to work together in teams, EMS adopters may be able to leverage their pollution prevention skills and environmental knowledge toward other integrated forms of environmental management, such as GSCM practices. EMS therefore offers a framework to more readily support GSCM decisions.

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Specifically, facilities with EMS are 22.5 percent more likely to assess the environmental performance of their suppliers and 46.9 percent more likely to require that their suppliers undertake environmental measures.

These differences are suggestive of the effects of EMS, though one should not interpret them as causal3.

Some findings suggest the possibility of EMS’ positive externality in that a facility’s adoption of EMS may positively affect the environmental performance of its suppliers. This is because the adoption of EMS has positive effects on the implementation of GSCM practices, which in turn, may make it likely that suppliers will reduce their environmental impacts.

Almost 77 percent of manufactures participating in a recent survey said they are currently required by their customers to report on their environmental impact and that of their products, or require their vendors to do so – these results suggest that green supply chains are becoming the norm4.

From the two studies (in a two year period), the percentage of EMS certified organizations requiring supplier reporting has risen from 47 percent to 77 percent, with the real indication that future business will be driven by suppliers being at a relative disadvantage if they are not part of a GSCM driven system. This can include the U.S. EPA’s Green Supplier Network, where the Green Suppliers Network empowers companies to increase productivity, reduce waste and boost profitability. By combining Lean and Clean manufacturing methods, our technical reviews optimize resources such as labor and materials, identify opportunities to maximize return on investment, and eliminate waste. The Green Suppliers Network Technical Review provides business-focused solutions to address suppliers’ manufacturing challenges5.

and are responsible for the loss of 10 to 20 percent of all electricity converted into mechanical energy.

Pure energy conservation efforts tend to be ineffective, as they lead to the Jevon Paradox. The Jevon Paradox is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase (rather than decrease) the rate of consumption of that resource. The implication is that technology and improved efficiencies may not necessarily save the day when it comes to managing your energy use performance. Most energy efficiency in industry is achieved through changes in how energy is managed in an industrial facility, rather than through installation of new technologies.

An energy management standard provides a method for integrating energy efficiency into existing industrial management systems for continuous improvement.

The emergence of the EN 160016 Energy Management System (EnMS) and the ISO/DIS ISO 500017 EnMS are formalized approaches to establishing the systems and processes necessary to improve energy efficiency.

The standards specify requirements for an EnMS to enable an organization to develop and implement a policy and objectives which take into account legal requirements and information about significant energy aspects, use and consumption. It is intended to apply to all types and sizes of organizations, irrespective of any geographical, cultural and social conditions. In short:

Energy Management Implementation The other half of the discussion is based on energy implementation, which has a direct correlation to EMS and GSCM performance. U.S. Department of Energy data indicates that energy use in the U.S. is broken into four basic components, as follows (approximate total energy use values): • Industry 33% • Transportation 28% • Commercial 17% • Residential 21% In the industrial section, for example, increasing costs have forced energy intensive industries to make substantial energy efficient improvement in the past 30 years. The reductions are largely the result of recycling waste materials and use of cogeneration equipment. In addition, it is well known that electric motors consume more than 60 percent of all electrical energy generated

SPRINGS Spring 2011 29

• The EN 16001 EnMS standard was released in July 2009 and is primarily used in the European Union. However, it is applicable to any organization and effectively reflects many of the EMS requirements and structure, therefore easily integrated into an existing EMS. • The ISO/DIS 50001 when released (tentatively scheduled for mid- to late-2011), has global application and contributes to more efficient use and consumption of available energy sources, enhanced competitiveness, a positive impact on climate change and considers all types of energy.

Increasing Costs as a Business Driver Even without current global energy instability requiring a review of energy use and consumption, U.S. corporations are driving the supply chain to continue to improve its overall performance, as they relate to EMS, EnMS and GCSM. For example8: • In March 2010, Wal-Mart announced a new set of programs to reduce carbon emissions in its supply base, with a strong partnership approach in which it will get very proactive in working with suppliers on the specifics of products and processes.

• In May 2010, consumer products giant Procter & Gamble announced it was going to require suppliers to report their carbon emissions, and developed a framework and spreadsheet tool (with the help of key suppliers) that it made “open source,” meaning any company was free to use it for their own needs.

Summary By implementing a management system that integrates environmental and energy concerns, organizations can increase their operating efficiencies, manage the sustainability of products through life cycle analysis, and exhibit leadership in meeting customer and societal expectations of a responsible business.

Green Supply Chain Management extends the impact of an organization’s environmental commitment and energy efficiency.

For additional information or assistance in starting an EMS or EnMS, you can reach UL DQS Inc. via e-mail at energy.interest@us.dqs-ul.com. UL DQS will be more than happy to help you understand: what the standards require; provide a gap assessment to help you understand how their implementation will provide value to your organization; or to just better understand your operational opportunities to increase overall efficiencies in both environmental and energy performance. u Jerry Skaggs is a registered professional civil engineer with more than 28 years of professional experience in project management and engineering and has conducted over 575 audits. He is qualified to ISO 9001, ISO 14001, BS OHSAS 18001, Responsible Care (RC 14001 and RCMS), International Bottled Water Association and EN 16001 and on the ISO / PC 242 TAG and the JPC2, Joint Project Committee – Energy Efficiency and Renewable Energy Sources – Common Terminology for the development of the ISO 50001, Energy Management Standard, AWWA’s standards writing committee for the Utility Management System, AWWA G400-09, August 2009 Standard. If you have any questions, comments or concerns, Skaggs can be reached at energy.interest@us.dqs-ul.com.

Endnotes 1

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“Is ISO 14001 a Gateway to More Advanced Voluntary Action? A Case for Green Supply Chain Management,” Discussion Paper, March 2009, RFF DP 09-05, Resources for the Future, Washington, DC “Which Competitive Advantages Can Firms Really Obtain From ISO 14001Certification?” Murillo-Luna and RamonSolans-Prat, Journal of Industrial Engineering and Management, 2008, v1n2, p 104-118 “IFS Study Reveals Most Manufacturers in a Green Supply Chain,” http://www.businesswire.com/news/ home/20110221005661/en/IFS-Study-RevealsManufacturers-Green-Supply-Chain ibid US EPA, Green Supplier Network, Program Elements. http://www.epa.gov/greensuppliers/program.htm EN 16001, Energy Management Systems – Requirements with Guidance for Use ISO/DIS 50001, Energy Management Systems – Requirements with Guidance for Use “Green Supply Chain Year in Review 2010”, by The Green Supply Chain Editorial Staff, January 5, 2011, http://www.thegreensupplychain.com/news/11-0105-1.php?cid=4059

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Saving with Energy-Reducing Retrofits

By Mark E. Battersby

©iStockphoto.com/pagadesign

T

he Obama administration recently announced proposals they hope will persuade private businesses to invest in retrofitting existing commercial facilities to make them more energy efficient. Included among the proposals were more lucrative tax breaks to blunt the cost, and provide easier access to loans to pay for energy-efficiency upgrades.

What may surprise the owners and managers of many spring manufacturing businesses that own the buildings housing their operations — and the Obama administration — is the existence of tax incentives that already substantially reduce the cost of making commercial buildings more energy-efficient. Also available are a number of tax incentives and funding programs to help reach those goals.

Commercial Buildings Although federal tax rules have long treated commercial property less favorably than residential property, today’s tax breaks for commercial buildings create significant incentives to make those properties more energy efficient. The Energy Efficient Commercial Building Deduction currently allows spring manufacturers and other businesses tax writeoffs for new or renovated buildings that save 50 percent or more of projected annual energy costs for heating, cooling and lighting. Partial deductions are also available.

Rather than deducting the actual cost of the equipment or systems purchased to make commercial buildings more energy efficient, a flat tax deduction of up to $1.80 per square foot is available. Remember, however, the improvement must save at least 50 percent of the heating, cooling, ventilation, water heating and interior lighting energy cost. A partial deduction of $0.60 per square foot can be taken for improvements made to one of three building systems — the building envelope, lighting or heating, and cooling system.

The deduction applies to “energy efficient commercial building property,” defined as depreciable property installed as part of a building’s (1) interior lighting systems, (2) heating, cooling, ventilation and hot water systems, or (3) the building’s envelope as part of a certified plan to reduce the total annual energy and power costs.

The U.S. Department of Energy maintains a list of software that must be used for calculating power consumption and energy costs to certify the energy savings required to claim the deduction. With only buildings covered by the scope of the American Society of Heating, Refrigeration

32 SPRINGS Spring 2011

and Air Conditioning Engineers’ (ASHRAE) Standard 90-1-2001 eligible, seeking professional assistance is almost mandatory.

Saving Taxes While Saving Energy Increasing numbers of spring manufacturers and suppliers already employ, or are installing solar heating or lighting. Not too surprisingly, many of those spring manufacturers and suppliers are eligible for tax credits.

Every business is, for example, eligible for tax credits for qualified solar water heating and photovoltaic systems and for certain solar lighting systems.

Under the tax credit rules, qualifying equipment will either use solar energy to generate electricity, to heat/cool or provide hot water to a structure, or will use solar energy to illuminate the inside of a building by means of fiber-optic distributed sunlight (tube systems and passive solar are not eligible). The credits are available for systems “placed in service” between January 1, 2006 and December 31, 2016.

The business energy investment credit is generally equal to 10 percent of the taxpayer’s basis in qualified energy property placed in service during the tax year.

However, effective for property placed in service before 2017, the credit percentage is increased to 30 percent for: 1) Qualified fuel cell property; 2) Equipment that uses solar energy to generate electricity to heat or cool a structure or provide solar process heat (except used to heat a swimming pool); 3) Equipment that uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight; and 4) And, after October 3, 2008 — qualified wind energy property.

That’s right, the cost of small wind turbines for home, farm or business use, as well as the cost of installing geothermal heat pump systems, qualify for a tax credit. In addition to a fuel cell credit similar to that available to consumers, tax credits are available to businesses that install qualifying micro-turbines.

These systems, which typically run on natural gas, are small power-producing systems sized to run small to medium-size commercial buildings.

The 30 percent investment tax credit for solar energy property and qualified fuel cell property and the 10 percent investment tax credit for micro-turbines have all been extended through 2016.

company programs providing advice on energy-efficiency, grants, state and local tax breaks, and even financing.

The American Council for an Energy-Efficient Economy (http://acee.org/energy/state) offers, as one example, the State Energy Efficiency Policy database.

The database is searchable by either state or policy area.

Another database, established in 1995 and funded by the U.S. Department of Energy, is the Database of State Incentives for Renewable Energy (http://www. dsireusa.org), a project of the North Carolina Solar Center and the Interstate Renewable Energy Council (IREC) which provides a comprehensive gateway to detailed information of a variety of state energy policies.

More Mundane Tax Write-Offs Don’t forget that many more mundane tax write-offs can help reduce the bill for energy-efficiency. Thanks to the Tax Relief Act that became law in December 2010 many tax write-offs were extended. Now spring manufacturers and suppliers can write off 100 percent of equipment and machinery placed in service after

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Other Energy Incentives In addition to the incentives provided by federal tax laws, there are a number of local, state, and utility

SPRINGS Spring 2011 33

September 8, 2010 and through December 31, 2011. For property placed in service in 2012, the new law provides for 50 percent additional first-year depreciation.

Last fall’s Small Business Jobs Act also increased the Section 179, first-year expensing dollar and investment limits to $500,000 and $2 million, respectively, for 2010 and 2011. The Tax Relief Act provides for a $125,000 dollar limit and a $500,000 investment limit for tax years beginning in 2012 and “sunsets” after December 31, 2012.

That means that a spring manufacturer may immediately deduct as a Section 179 expense, up to $500,000 of newly acquired business property, new or used, placed in service during the tax year. The Section

Last fall’s Small Business Jobs Act created the State Small Business Credit Initiative and funded it with $1.5 billion to strengthen state programs that support lending to small businesses, including some spring manufacturers and suppliers. Under the State Small Business Credit Initiative (SSBCI), participating states will use the federal funds for programs to leverage private lending to help finance small businesses such as manufacturers that are creditworthy, but are not getting the loans they need to expand and create jobs.

Last year’s Jobs Act included other provisions designed to help small businesses obtain funding.

Although not limited to energy funding, among the new programs providing financing are:

Energy performance improvement projects may be different from many other business investments because they provide an immediate and predictable positive cash flow resulting from lower energy bills.

179 expense write-off is reduced, dollar-for-dollar, by any property acquisitions in excess of the $2 million investment ceiling, limiting the write-off to smaller businesses.

Currently, there is a 15-year write-off for qualified improvements made to leased business property under which both leased equipment and the business premises qualify.

Paying For Energy Savings Today, access to capital for an energy-efficiency upgrade is not an issue for many within the spring industry thanks to what many experts label as a “reluctance to invest rather than a shortage of capital.”

Some upgrades, of course, require little funding. For those requiring investment, there are many traditional and non-traditional financial resources available.

Energy performance improvement projects may be different from many other business investments because they provide an immediate and predictable positive cash flow resulting from lower energy bills. This feature allows them to be financed with both familiar and unconventional financing.

Tax incentive programs offered by local, state and the federal government have long helped overcome the relatively higher front-end costs associated with energy efficiency equipment. Today, tax incentives reduce the cost of acquiring and installing energy-efficient property — and significantly reduce the day-to-day costs of operating the business. The increased emphasis on energy-savings has also spawned a number of programs to help finance the cost of “going green.”

34 SPRINGS Spring 2011

• A Small Business Lending Fund to provide up to $30 billion in capital to financially sound small banks with less than $10 billion in assets to encourage them to lend money to small businesses.

• Any spring manufacturer considering Small Business Administration loans stands to benefit from the extension of provisions that amped up SBA lending guarantee programs and fee reductions that recently expired. In addition, the bill increases the maximum loan size for the SBA’s 7(a), 504, and microloan programs. The 7(a) and 504 loan program maximums would bump from $2 million to $5 million and the microloans would increase from $35,000 to $50,000. Loans made under the SBA Express program would temporarily increase from $300,000 to $1 million.

Whether planning renovations, expanding, or constructing new facilities, ever-increasing energy costs have many spring manufacturers and suppliers thinking about “going green.” While lawmakers ponder the big picture and future proposals center on funding, it is important to remember that current tax laws can help every spring manufacturer and supplier reduce the out-of-pocket, up-front expenditures needed to achieve long-term energy savings.

Will your company take advantage of the taxsavings available to reduce energy costs? u

©iStockphoto.com/Ali Mazraie Shadi

Keats Manufacturing Saves Some Green With Lighting Project

by Gary McCoy

$

imply changing the light bulbs in the Wheeling, Illinois plant of Keats Manufacturing has not only helped improve the company’s work environment, it has paid off in bottom line savings to their electricity bill.

his investment. Plus, Eggemeyer found out the local electricity utility, ComEd, had a special program called “Smart Ideas for Your Business” that offered financial incentives to help companies complete projects that reduce energy usage.

The lighting retrofit project was done by switching Keats’ lighting from metal halide bulbs to more energy efficient T8 fluorescent bulbs. Matt Eggemeyer, vice president and chief operating officer for Keats was responsible for the project. He says the company spent a little over $6,000 to make the change in their 40,000 sq. ft. Illinois facility.

As a result, Keats has saved over $2,000 a month on their electricity bill since the switch in November 2009.

While his neighbor had completed the project internally, Eggemeyer hired a local firm, Connexion, to help oversee and implement the lighting retrofit program. Connexion is a full-service provider of electrical and energy business solutions.

“It was a significant savings on money and power that had a three month ROI,” explained Eggemeyer.

Eggemeyer said the impetus for the project all started from a conversation with a neighbor. “Up until that point I didn’t know anything about the energy savings that were possible from changing light bulbs,” said Eggemeyer.

His neighbor had just retrofitted his manufacturing facility with new energy efficient lights and he was experiencing a very quick return on

“As springmakers none of us know this stuff. And I certainly couldn’t pretend to know about light bulbs and foot candle ratings,” explained Eggemeyer. “Utilizing the expertise of Connexion’s lighting engineers to guide us through the process was very helpful.”

“The new lighting has washed out a lot of dark spots that were prevalent on the shop floor. Before the lights were installed, we had purchased individual lights for our work stations to help employees see better,” said Eggemeyer. “They don’t need those lights anymore.”

Eggemeyer admits that he’s not naturally so environmentally oriented, but appreciates that Keats is doing its part to be “green.” With the benefits that Keats has derived from the project, Eggemeyer said he called a good friend, who’s a fellow springmaker, and said: “You’ve got to do this.”

No matter what state you are located in, Eggemeyer encourages all springmakers to take a look at energy efficient projects like this.

He concludes, “You might be surprised, like I was, at what is possible.” u

In addition to retrofitting the light bulbs and lighting domes, Connexion installed motion sensors so lights would only come on when needed.

They also upgraded outside lighting to the building.

Not only did Keats save on electricity, Eggemeyer says the quality of the lighting on the shop floor is much better. “It is almost too bright now,” laughed Eggemeyer.

SPRINGS Spring 2011 35

O

Lost

utside the Circle

by Michael Lobraico (Editor’s note: The following is based on one of Michael Lobraico’s clients, John Poole.

All of the names and telling details have been changed to preserve client privacy.)

©iStockphoto.com/Qweek

36 SPRINGS Spring 2011

J

ohn Poole had the perfect plan for the family HVAC business.

Too bad it was headed for ruin.

John headed up product development in a business founded by his grandfather nearly 60 years ago. John’s parents now owned and ran the business, along with an uncle who had a small stake. The business, which had started out of the back of a flatbed truck, now had a big central office in Markham and international clients. But the heydays were back in the early to late ‘90s. Since then, $16 million in annual revenue had fallen to just over $10 million, and 32 employees became 25. Frustration and tension pervaded much of the workday, and even spilled into the family’s social gatherings. But John saw a solution, a way to reignite growth and take the business to new, unforeseen heights.

I’d met John at a retreat I ran a couple of years ago for an association of family enterprises.

He called last year, eager to see me.

Over coffee he told me his plan to develop an arm of the corporation for the green sector: Air conditioners powered by wind turbines, heating systems run off of the earth’s natural warmth. He’d studied the market potential, the development costs. They could do it, but would need to make a sizeable investment. If they did, they could easily double their revenue within five years.

John wanted to present his plan at the next monthly planning meeting. He needed to get everyone’s support, but was worried about convincing his older brother, James, who managed one of the sales regions. James constantly shot down new ideas. And because John was often the one with the ideas, tension had developed between the two.

John had support from other family members in the business, but their parents generally shied away from disputes, choosing inaction over action, and new ideas rarely got any traction.

John wanted to know whether I thought his presentation would convince James and the others.

I said, “Your presentation is perfect. But it will never work.” He

“One circle stands for family, one for business, and one for ownership.

Every member of the family stands in one, two or all three circles. But in most family businesses there’s no clarity, and people are standing in circles they shouldn’t be. There’s often no separation between the circles.” looked stunned. “That’s the wrong audience.”

I explained, “You should only be talking to stakeholders and then managers in the company. Your plan requires investment, debt financing. Those are owner issues.

And the implementation of your plan will require coordination with the management team. The problem is, at your planning meeting, you’ve got some owners, some managers, and various family members who are only regular employees. And

each of them has an influence on decisions. Furthermore, some of the family members will be part of the business in the future and some won’t.”

Is Everyone in the Right Circle?

“So I should just talk to my parents, my uncle and James?”

John probably wasn’t aware that I’d also spoken to James at an industry function, and had some insight that might hold the key to John’s solution. “John,” I said, “one of the tools I use to help family businesses succeed is something called the Three Circles.

“One circle stands for family, one for business, and one for ownership.

Every member of the family stands in one, two or all three circles. But in most family businesses there’s no clarity, and people are standing in circles they shouldn’t be. There’s often no separation between the circles. But certain conversations and decisions should only happen in very specific circles. Right now, your business is suffering because people who shouldn’t be standing in the ownership circle or the business circle are influencing the direction of the company.”

I asked John why he thought James was always shooting down his ideas. “Because he’s got a new family and hates the idea of taking a risk.”

“Partly, yes. But more importantly, James is not really part of the business. For him it’s a job, and not a job he particularly loves.”

“He’s always wanted to go into animation. That’s his passion.”

“You can buy a plane, John, but that doesn’t mean you can fly it. That’s what’s happening with James. There’s the anticipation that he’s going to own part of the company someday, but that

SPRINGS Spring 2011 37

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doesn’t qualify him to help run it.

James can stand in the owner’s circle, but he doesn’t belong in the business circle. You’re the future of the company, John. You have the passion for it and the know-how.

You should be the one standing in all three circles. ” “What do we do?”

I suggested John, James and I meet to work out a plan for both their futures. The concept of the three circles was a revelation to James. He felt immense relief at the idea he could still benefit from a stake in the family business without having to work there. After developing a plan whereby James

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could transition out of the company and find something in the animation industry, the tension between the two brothers evaporated. Seeing a future in which he earned his income as an animator freed James up to think more rationally about the business and to appreciate John’s value. He admitted he didn’t really know the business, and said that John’s ideas were probably the right ones. He actually liked the idea of letting John determine the company’s future without having to be involved in decisions that were over his head.

Over the next few weeks, I worked with John, James and the family to set up a proper structure for the family and the business based on the three circle model.

I worked with their accountant and lawyer who helped put together the legal and financial underpinnings, which gave everyone confidence that both the family and the business were moving in the right direction.

John’s plan eventually got approved and the company began selling its first line of green products a few months ago. Sales have been brisk and demand is pouring in.

The company expects to see positive growth for the first time in years. u Michael Lobraico is the founder of NCI Solutions, a company specializing in helping family businesses maximize their potential. For further information, visit www.nci-solutions.com or e-mail mlobraico@nci-solutions.com.

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Beware of Yuan

by Scott Pitney, Katy Spring

D

uring Katy Spring’s 11 year history, we’ve bid on many contracts with high dollar volumes. We rarely get this business because someone will usually accept a slim margin to win these large volume accounts. We’re competitive, but we know what we need to make a profit. Our philosophy has always been: offer a fair price that builds long-term customer relationships. Underbidding or bidding for very slim margins does not fit our business philosophy or make good business sense.

That’s why I didn’t give it much thought when we received a bid from a Chinese import/export company with a total U.S dollar value that exceeded a million dollars. While the volume is great, we assumed someone would outbid us since the company is in China where the labor rates are much lower. Surely they would select a Chinese spring manufacturer.

I know there are good spring manufacturers in China, but our Chinese clients tell us they buy from us because they can’t get the quality they need from their local suppliers.

We were skeptical and cautiously optimistic when this import/export company accepted our price and wanted to do business with our company.

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Moving Ahead With a “Contract” When I told this Chinese company that we typically work with purchase orders, he said they work with “contracts” instead. So I received a simple, two-page document that covered standard contract items (part number, price, delivery, packaging, etc.). The contract left certain blank items for us to fill in, such as “terms.”

All our overseas customers without a U.S.-based office are required to provide cash-in-advance wire transfers. For this prospective Chinese company we also asked for ten percent down. They didn’t bat an eye at anything we asked for in the contract.

When the draft contract was returned, the prospective client asked for a face-to-face meeting at their office in China. While China isn’t a vacation hot spot for me, for a million dollars in new business I would gladly go.

But before going halfway around the world we asked for a video conference and our Chinese counterparts agreed to it. We downloaded free video conference software, only to discover they didn’t have a video camera.

Why didn’t they mention this in my original request?

For several days I talked with my partners, James West and Mark West, about how to proceed with our Chinese prospect. James suggested making samples and submitting them for approval first. We all thought it was good idea. However, the company told us a deadline with their client the following week would make it impossible to submit samples in time.

At this point, I was starting to get excited about the possibilities that this business deal could bring to our company. So I pushed for following through with the face-to-face meeting. This is a decision that I later wished I could have changed.

We started to shop for plane tickets to Hainan, China and because of the expense we decided that only I would go. James and Mark would stay in Katy and be available 24/7 should I need them…and I would.

After two months of negotiations, we only had a week to prepare for the trip and make sure we had all our ducks in a row. We reviewed our bid again, checking and rechecking every detail. Considering we booked this trip only a week in advance, we found a travel agency that got us a fair price. We researched everything on this Chinese import/export company we could find on the Internet and reviewed their Web pages several times. They wouldn’t tell us much via e-mail.

They told us they preferred to share more information at the meeting, which I assumed was the secretive nature of the Chinese business culture.

James, Mark and I had many conversations before my departure, and all of us sensed that things were going too smoothly. Our company just doesn’t land

large accounts like this so easily. But we couldn’t find any red flags, so we kept moving forward.

I remember saying: “If I were spending a million bucks, I think I would want to visit the company that’s making my product, instead of the other way around.”

There were many more questions to be asked.

Off to China On October 31, 2010, I departed Houston at 6 a.m. for Hainan, China via Newark, N.J. and Beijing. After a four-hour layover in Beijing, I landed at Haikou City Airport at about nine in the evening, local time.

After being on a plane for over 20 hours and traveling some 28 hours with layovers, I finally met Yuan, the prospective client, and his assistant, Ruby.

Ruby spoke English moderately well, although I had to ask her several times to repeat her name. Yuan and Ruby were nice and did a good job of initially putting my mind at ease.

From their website, the 5-star hotel I was staying at seemed nice and made a good first impression. Even though I’m cheap, I chose 5-star because I wanted everything a Haikou hotel had to offer. Plus, with the exchange rate it was only $70 a night (USD).

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Pictured (l-to-r) are Katy Spring partners James West, Scott Pitney, and Mark West.

After checking in to the hotel, I visited the hotel’s “New York-Style” disco, which is a story in itself for another time. After that interesting experience, I went back to my room and couldn’t get the lights to work.

The hotel manager came and showed me that I had to stick the room key in a slot by the light switches to activate the electricity. Ingenious, I thought.

I’d been told the beds were firm in China, but I didn’t expect this. The unusually firm mattresses reminded me of camping, which for me is a sleeping bag on the ground with no air mattress. It’s fine for a couple of nights, but then I’m ready for my own bed As tired as I was though, I slept pretty good that first night.

After experimenting with the food at the hotel’s “Western-style” restaurant and taking an interesting walk outside the hotel, I got ready for our first meeting scheduled for 4 p.m.

Getting Down to Business Ruby, Yuan and their driver picked me up for the 25-minute trip to their office. I was briefly introduced to their general manager, Louis, and we finally got down to business.

The details we discussed in the contract were basic: price confirmation, quantities and the ability of our company to deliver. They asked questions about packaging, which were more questions than we usually get. I speculated they were concerned about the long transit time and wanted quality packaging so the product would arrive undamaged.

After answering their questions it was my turn.

I wanted to know the industry our products were supporting. I wanted to know why they were sourcing from a U.S. company when labor was so much cheaper in China. I wanted to know how long they’d been in business and how long they had a relationship with the customer to whom they were exporting parts.

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They told me the end user was a German company that produced medical products. They were buying parts from my prospect’s broker who was actually in Los Angeles. A spring company from Taiwan was making the parts, but they were having quality problems. Since the parts were actually shipped to L.A., they wanted to source in the U.S. They told me they obtained quotes from two companies in the U.S. and one in Mexico. I was told we had the lowest price of the three companies and they added that ours was “the lowest price by far.” Against a Mexican spring company? That didn’t make sense.

Putting Down 25 Percent?

Additionally, we asked for ten percent down to initiate the contract. We thought we’d never get it, but it didn’t hurt to ask. They offered to put down 25 percent! Their explanation was that they didn’t want to pay the additional wire transfer fees. They offered to give a quarter-million dollars to a company they knew virtually nothing about. It seemed strange to say the least. I couldn’t wait for James and Mark to hear this one.

Since China is 13 hours ahead of Texas, I waited a few hours that evening before calling James. James was surprised, as I was, that they wanted to put down 25 percent. And like me, even though we became a little more skeptical at this point, James and Mark could see no valid reason to walk away from this deal. So we agreed to proceed.

The second meeting was scheduled for 1:30 p.m. the following day. Once again I slept in but I didn’t sleep well. The hard mattress was not working for me.

For our second meeting, it was more of the same.

They had questions that I considered standard: How long would it take to get samples? What size boxes did we have? What will be the maximum weight of every box?

©iStockphoto.com/Ameng Wu

What seems too good to be true probably is. For this “contract,” the kicker was a small sentence that contained the words “notarization fee.”

We were used to working with purchase orders from our other overseas customers, so this “contract” seemed a little different. The only part in the contract that mattered to us they agreed to, and actually exceeded our expectations: we require a wire transfer deposit before proceeding with manufacturing. The fact that they agreed to prepayment and even wanted to put down 25 percent did make us suspicious. But after the second meeting, we kept moving forward.

The following day there was no face-to-face meeting.

Ruby phoned to tell me they would e-mail the final contract and add some minor agreed-upon changes.

After reviewing, they would schedule a formal signing for Friday. James and I reviewed the final contract and the only change we asked for was: “FOB our plant.”

This is what we do for all our international customers.

I phoned Ruby about the change and in less than 30 minutes, they e-mailed the updated contract. It was a go.

After the previous evening, I got sick and had zero desire to eat. I just wanted to get through the signing of this contract and get back to bed. I wanted my strength for traveling, because I was scheduled to leave at eight the next morning.

Before the meeting, I was offered green tea, which I accepted. The Chinese serve and sell green tea in loose-leaf form, meaning no tea bags. So I drank the tea and picked the leaves out of my teeth. We went over the contract one last time. Then Louis, the general manager, arrived for the signing. Louis sat down and we exchanged pleasantries with Ruby’s assistance.

Louis said things like, “We wish to have a long-term relationship with your company. We hope to source more parts with your company in the future.” Yuan and Ruby were binding five formal contracts, stamping pages with what looked to be a formal red stamp of some kind, and getting them ready for signatures. Then came what our instincts were telling us the whole time.

The Deal Breaker What seems too good to be true probably is. For this “contract,” the kicker was a small sentence that contained the words “notarization fee.” Specifically it said, “Each party will pay half the notarization fee.”

To get something notarized in the U.S. is relatively inexpensive, so we didn’t think much of this when we first saw it in the contract. According to Louis, the

fee would be one and two tenths percent of the total contract value, or about $3,700 (USD) for our half.

Louis asked me if I was okay with the fee. I said it wouldn’t be a problem: “We’ll just deduct it from your invoice.” Louis said that was unacceptable as the total dollar amount could not change and the Chinese notarization department was very strict about every detail. He said they needed the fee prior to notarizing the contract. He also said it takes up to two weeks to process the contract for notarization, and could I come back to sign?

“Hell no!” I said to myself, and asked them what the options were, because coming back in two weeks was not practical. They said I could sign an authorization letter to accept my signature.

Knowing that these contracts were garbage (again, the only formal contract with a foreign company to us is cash in advance), all I wanted to do was leave.

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Scams are everywhere, but being snake bit by a foreign scam can create prejudices about doing business with an entire country.

I signed the five worthless contracts. After signing, Louis slapped his hand on the table and stood up with his hand extended for a handshake, which is what I guessed was another Chinese custom. We shook hands and the entire office applauded. I played along, took a few photos, and a few minutes later, I waved goodbye.

Incidentally, Louis refused to be in the photos due to a Buddhist belief that he couldn’t be in any photos until January 1, 2012. I thought, “Yeah right, Louis.”

Uncovering the Truth I got back to the hotel and contacted James and Mark to tell them about this new development. I told James: “Certainly they would not fly us halfway around the world, spend two months negotiating, and go through all of this for approximately $3,700?” James agreed and didn’t have a problem with paying the fee either, especially over a million dollar contract. Still we were more skeptical now than ever.

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After hanging up with James, I still felt ill and I tried to sleep but could not. I knew we needed to do some more research, and I sent a text message to Mark and asked him to search the Internet for “Chinese Notarization Scams.”

An hour later I got a call from James. Mark had found information on several companies with similar tales, including a stamping company in New Jersey with an almost identical story. They even mentioned Yuan by name. In the stories we read, some of these companies paid the notarization fee and some paid it more than once when told that additional money was required. None of these U.S. companies heard from Yuan again after they paid the notarization fees. Now we were ready to walk away from this deal…and fast.

Ruby called later that afternoon to ask how I was feeling. I told her, “not well.” She then asked if we could wire the notarization fee money today to a personal bank account. The personal account was necessary, she said, to avoid paying higher Chinese taxes. Ruby claimed that in China, higher taxes are charged to business accounts than to personal bank accounts.

When I told her we could not, she asked if they could pick me up and take me to an ATM. I told Ruby I don’t carry an ATM card when I travel and only had about a hundred dollars to get me home. For the first time, this second push made me a little nervous because these people planned to take me to the airport in a few hours.

I wasn’t comfortable being with them or at their mercy.

Convinced that they wouldn’t do anything stupid, I still decided to leave before they arrived at 6 a.m. to pick me up for the 40-minute ride to Haikou City Airport. I only slept about two hours that night and ate nothing, partly due to being restless and partly due to what would be later diagnosed as food poisoning.

At 4:30 a.m. I went down to the front desk and checked out of the hotel. I was glad to see my favorite bellhop was there (he had assisted me earlier in the week at the hotel gym), and he tried to get a cab for me. He apologized that the soonest he could get a cab was 30 minutes. For 100 Yuan (less than $20 USD), he offered to take me to the airport in his own car. I quickly accepted his offer and would have given him $100 (USD) if he would have asked.

Ready to Leave With the exception of the Texas driver’s license office, I can’t remember being so happy to leave a place.

Once I got through airport security, I texted Yuan to tell him I was not feeling well and was already at the airport. He texted back and asked me to wait. I told him I was getting ready to board the plane. That was the last I heard from Yuan, Ruby or Louise.

After a pleasant experience at the airport with a young Chinese man who had never seen a foreigner before and got his picture taken with me, I was on my way back to the U.S. This young man was the bright spot of my trip that reminded me that all of China was not bad. In fact, the majority of the people I met were friendly, polite, humble, and appreciative. This young man at the airport was the epitome of all the good memories of the Chinese people.

It was a miserable flight home, but upon my return I received a lot of text messages from my family, my partners, including James and Marks’s parents, Claude and Mildred West, and friends. This made me feel better and appreciative that I was home.

What this Chinese company tried to accomplish with their scam was selfish because their actions hurt honest Chinese companies that are trying to conduct legitimate business with other U.S. companies. Scams are everywhere, but being snake bit by a foreign scam can create prejudices about doing business with an entire country.

Why would a Chinese “import/export” company go through all the trouble for $3,700 U.S dollars? In China, the exchange rate is about six to one. Remember my 5-star hotel room that cost about $70 U.S. dollars?

I’m guessing this same room could have easily been $250 to $400 a night in the U.S. Thirty seven hundred dollars? If they can scam about four or five companies a month, this pays fairly well in China. But I’m speculating.

“Nothing venture, nothing gained,” James said later. It’s true. We took a calculated risk that didn’t pan out and it could have cost more than just the travel expenses. I wish we would have shut down the false hope this situation created much sooner. We are still a young, motivated company, just a little wiser now.

In addition to reporting this scam to all five American Embassies in China, we felt it was our obligation to get the word out so other companies wouldn’t fall into the same trap. Mark found the information about the New Jersey stamping company and others that experienced what we did, and it saved us from additional expense and frustration. We greatly appreciate those companies taking time to make their stories public and warn other companies, like ours, to beware of Yuan. u (Editor’s note: To read Scott Pitney’s longer unedited version of this story, please visit: http://www. katyspring.com/press/beware-of-yuan.html).

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Worn Out at Work?

Twelve Common Workplace Behaviors That Drain Everyone’s Energy

I

t’s been a long, exhausting year at your workplace.

You’re tired, depleted, and quite frankly just done with “business as usual.” You’re laying the blame for your fatigue squarely at the feet of the increased responsibilities and long hours you’ve been facing. But according to Jon Gordon, you might be wrong. He insists that working hard—when done with a good attitude in the right environment—can actually be quite invigorating.

In other words, what’s wearing you out at work might not be the work.

“Most people wrongly assume that their tasks and responsibilities are what’s grinding them down,” explains Gordon, author of the newly released Soup: A Recipe to Nourish Your Team and Culture. “However, while ‘work’ is a convenient scapegoat, the real culprit is often the negativity of the people you work with and for, their constant complaining, and the pessimistic culture that is now the norm in a lot of workplaces.”

The fact is, many of us work in a world of drainers.

And what, exactly, is a drainer? Gordon says the term can describe anyone in the workplace—a boss, coworker, employee, or client—who sucks the life and energy right out of you.

No one sets out to be a drainer, of course. It’s just that some people regularly (and inadvertently) exhibit energy-draining behaviors. What’s worse, many bosses allow them to continue—or are themselves guilty of practicing these behaviors. And over time, the entire culture becomes poisoned.

Don’t fret, though: Gordon promises that if managers are able to identify the offending behaviors and fix them, they’ll be able to spend more time nourishing their companies’ cultures—which will, in turn, make employees happier and more productive, thus increasing the bottom line.

In Soup—written in a fun business fable format (much like his Wall Street Journal and international

bestseller, The Energy Bus, and several other titles)— Gordon lays out the ingredients that make up a nourishing culture, instead of a draining one.

Here are Gordon’s top twelve draining behaviors (presented in a what-not-to-do format), as well as tips for how you can make a change for the better in each of these situations.

1

The Energy Vampire Attack

DON’T: Let negativity become your go-to response.

There’s nothing more draining than a boss or coworker who is constantly negative. Gordon calls these folks “energy vampires.” They are never happy, rarely supportive, and constantly nay-saying any and all ideas and suggestions that aren’t their own. According to them, you might as well give up before you start.

DO: Respond constructively when someone offers up an idea. Even if you know more about a particular project, have more experience than the rest of your team, or are positive that the suggestions others are making are off the mark, hear them out. Let employees and coworkers know that when they come to you with their ideas, they’ll be heard with an open mind and received with respect. Insist that everyone else practice positivity as well. While negativity squelches creativity and initiative, an encouraging attitude will keep creative juices flowing and encourage constructive dialogue.

“As pessimism rises, performance decreases,” Gordon explains. “You have to encourage optimism and guard against pessimism, or your team will suffer.”

2 The Out-of-Control Complain Train

DON’T: Give in to the temptation to whine. It’s a well-known phenomenon that can have catastrophic consequences: One person’s complaint resonates with someone else, who then proceeds to add grievances to the pile, which prompts yet another individual to

©iStockphoto.com/Helder Almeida

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throw in her two (negative) cents...and so on. Before you know it, everyone is complaining, and any work that gets done thereafter is marred by a bad attitude.

DO: Push for solutions. The next time a water-cooler conversation threatens to barrel out of control into Complaint Central, step in and ask the complainees how they would make things better. Better yet, take a cue from Gordon’s bestselling book The No Complaining Rule and ban complaints altogether. It’s tough love for sure—but it will also create and sustain a positive culture.

“When you boil things down, complaints are just noise and nothing more—but each one does represent an opportunity to turn something negative into something positive,” Gordon points out. “Turn your employees from problem-sharers to problem-solvers— it’ll make an unbelievable difference in your office’s atmosphere!”

3 The Vicious Voicemail (or e-mail)

DON’T: Leave critical or harsh messages on voicemail or send them to an e-mail inbox. Nine times out of ten, these critiques seem much more vehement and condemnatory than they actually are. Plus, any communication you send via electronic methods can potentially last forever. Not only could your words come back to haunt you, they’ll also be a constant reminder to your coworker or employee of his or her supposed shortcomings.

DO: Suck it up and conduct the tough talks in person. If you need to have a stern talk with someone, or if you need to talk through a conflict or problem, do it in person if at all possible. You’ll be able to ensure that your words and tone aren’t misinterpreted, and you’ll be able to immediately have a constructive dialogue with the other person. By talking about ways to improve, you can end the conversation on a positive and encouraging note.

the recipient. Be sure to flag any urgent e-mails so that your teammates know which tasks to tackle first—and include as many details as possible so that 1) you won’t forget them, and 2) the recipient can get started as quickly as possible. If you can, combine as many of the tasks and questions as you can into one document.

“One e-mail as opposed to ten separate ones is a lot less intimidating,” reminds Gordon. “And if you do fire off a multitude of messages in a moment of panic, a quick note acknowledging the unusual volume can change everything!”

5 The Busy Bee Bamboozle

DON’T: Confuse activity with progress. You know the person. She’s always soooo busy but doesn’t ever seem to meet deadlines or get anything done. When teams are being formed, people secretly hope she isn’t assigned to theirs. She’s living proof of the fact that just because your day is full of things to do doesn’t necessarily mean that you’re getting them done.

DO: Set goals and hold yourself and your employees accountable for results. These results should be ones that matter and that are visible and valuable to your team. It can be helpful to transition over to a day-today plan that will help everyone stay on the right track.

Most importantly, don’t put your team in situations where the lines are blurred. If the goals are crystal clear, they’ll be easier to accomplish.

4 The Loaded Monday Morning Inbox

DON’T: Overwhelm your team with a mountain of e-mails before the week is underway. If you’re finishing up your own to-do list late on a Friday night, or if you’re simply trying to get a jumpstart on the week ahead, it can be tempting to dish out the details and to-dos as you think of them. After all, if you wait ‘til Monday morning, you might forget to tell those who need to know! However, coming in to an inbox of 57 new messages is draining and makes folks feel like they’re fighting an uphill battle from the start.

DO: Boil down and bundle your communication as considerately as possible. Inevitably, people are going to be working late and sending e-mails over the weekend—in today’s business culture, it’s unavoidable!

However, there are a few things you can do to make “You’ve Got Mail!” less stressful and more efficient for

SPRINGS Spring 2011 47

6 The Low Performer Look-Away

DON’T: Let sub-par work slide. Simply put, low performers drag the rest of the team down. They are like a cancer inside your organization, creating resentment and generating more work for everyone else. And if you allow them to linger and thrive for too long, your best employees will move on to a more productive environment.

DO: Institute a zero-tolerance policy for low performers.

Hold your entire team accountable for meeting their goals and adhering to the same performance standards.

If one person consistently misses the bar, then you need to take swift action. Let your employees know that you value their hard work and that you will not allow others to do less and get away with it.

“In support of this initiative, strive for complete transparency,” Gordon advises. “When your team knows exactly what’s expected, they’ll know where they stand—and you’ll be able to make sure that their fears, uncertainties, and questions aren’t holding them back.”

7 The Unclear Communiqué

DON’T: Assume others have all the information they need, or that something you know isn’t really all that important. These hastily drawn conclusions that result from chronic poor communication can lead to serious mistakes and major missed opportunities.

Plus, lack of clarity is incredibly frustrating to those who must work with you. When employees, coworkers, or supervisors have to spend their time tracking you down for clarification, rather than getting the communication from you that they need, productivity falls and creativity is stifled.

DO: Make a concerted and proactive effort to make sure that the right people are in the know. Whether it’s letting your boss know that a client’s daughter is getting married (so he can call in congratulations) or telling a coworker that a vendor prefers to be contacted only via e-mail, be sure to tell the appropriate people.

You’ll set your entire team up for success and ensure that your clients get the service they deserve. Also, make sure you copy the right people on e-mails, promptly return voicemails, and are clear about directions and expectations. And if you say you are going to do something, mean it.

“A big part of a successful culture is having a relationship between employees and managers that is built on trust and collaboration,” says Gordon. “And that can happen only if a clear line of communication is established so that inspiration, encouragement, empowerment, and coaching can take place.”

8 The Disorganization Drag-Down

DON’T: Allow disorganization to impede productivity.

If you’re managing or leading a company, heading up a big project, or traveling non-stop, it’s likely you’ve lost an e-mail, important paper, phone number, or pie chart or two (or three or four) in your day. You’re busy, and that’s understandable. But constant disorganization can drain your employees and coworkers if they always have to cover your tracks. It may not always be possible, and accidents do happen—but not being able to find the quarterly report for the third meeting in a row sets a bad example, and it depletes others of the energy they could be putting towards other, more productive work.

DO: Make a concerted effort to keep up with your tasks and responsibilities. And if you can’t immediately put your hands on something you need, don’t automatically ask others for help. Take a few minutes to try and find what you need on your own. Better yet, try to think of better systems and processes than the ones you’re using (or not using) now. If you see that someone in your office has a particular knack for organization, ask her for some tips to help you out.

“Remember that there’s no substitute for communication when you do drop the ball,” Gordon instructs. “Tell your employees that between travel, a jam-packed schedule, and working between two computers and a Smartphone, you’ve lost something you shouldn’t have. If you are humble and honest about it, they’ll be more sympathetic to your plight and more likely to jump in and help you keep things organized!”

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9 The Hasty Plate Clear-Off

DON’T: Sacrifice quality on the altar of expediency.

There’s a lot of work to do, and you (understandably) want to get your own tasks done so you don’t hold up others. However, moving through assignments quickly in order to get them off your own plate can also mean that you’re piling the work on someone else. If you’ve rushed, you’re more likely to have made mistakes and been sloppy, which isn’t fair to the person who gets the assignment after you.

DO: Take the time you need to do the job right.

Rather than rushing through a report or clicking “send” just because it’s 5 p.m., get focused and make sure you do your best work the first time. Pay attention to details, check over your work, and make sure you’ve followed the proper guidelines. Your coworkers and employees would rather have a project that’s done right than one that’s ahead of schedule. (And if you have to turn in a project a day late on occasion, it’s not the end of the world.)

“Doing your best work sets the rest of your team up for success,” notes Gordon. “When people realize that you’re this kind of teammate, they’ll take on your projects with confidence and energy.”

10 The Chronic Deadline Dodge

DON’T: Allow unmet deadlines to throw everything and everyone off-track. With all the unexpected obstacles you face in a workday, it’s not always easy to meet deadlines. And yes, sometimes it’s impossible— but those times should be few and far between. When people chronically miss deadlines, it’s a sure sign of a cultural issue. Either people aren’t giving it their all—or they’re truly overburdened. Either way, your company’s productivity will suffer.

DO: Set reasonable, clear deadlines for everyone involved (and hold them accountable). Once something gets off-track, nobody is willing to own it. Make sure you set reasonable deadlines that you and your teammates can meet in order to avoid setting folks up for failure. And even if it takes some extra elbow grease from time to time, make a conscious effort to meet every deadline every time (and hold your team accountable for meeting them, too!).

11 The Unattainable Atta-Boy (or Atta-Girl!)

DON’T: Get so caught up in what’s coming down the pike that you forget to acknowledge what’s happening now. Most managers and business leaders would agree that they feel a lot of pressure. And it can be hard for them to constantly be the ones catching the heat from the higher-ups while the rest of the employees have only their own goals to meet and worry about.

However, when responsibilities give you to-do tunnel vision and cause you to skimp on the “job well dones,”

employees can get discouraged in a hurry—especially if you immediately ask about another goal that’s gone unmet or push more work at them to try and make up for losses in other areas.

DO: Express appreciation and admiration when appropriate. Employees don’t need a pat on the back and a round of applause at every turn. What they do need is to know that you can be satisfied. If, like a hamster running in a wheel, an employee feels as though no amount of hard work or hours spent will ever garner the boss’s approval or satisfaction, his energy and self-motivation will be zapped.

“Leadership is not so much about what you do,” asserts Gordon. “It’s about what you can inspire, encourage, empower, and coach others to do. If employees know you can be pleased and that goals can be reached, then they will happily work toward those things.”

12 The Blame Game

DON’T: Point fingers at others in order to take the heat off of yourself. A mistake is made, the boss is mad, a deadline is missed. If all eyes are on your team and you start pointing fingers, you could be making a huge mistake. If your employees or your coworkers don’t think you shoulder your share of the blame or are unapproachable when it comes to constructive criticism, they’ll start to shut down toward you.

DO: Accept responsibility for your actions gracefully and humbly. Nobody likes to be the one at fault. But owning up to your mistakes and learning from them are big parts of working together and being successful.

If you make a mistake, be the first to own up to it and try to do things differently in the future. Also, be open to suggestions and criticisms—they may make the going much smoother!

If some of these behaviors sound all too familiar, don’t despair. Now is the time to take stock of what’s making your culture less than nourishing—and resolve to make it better. u Jon Gordon is a consultant, keynote speaker, and the international bestselling author of Soup, The Energy Bus, The No Complaining Rule, and Training Camp, all from Wiley. He and his books have been featured on CNN and on NBC’s Today show, as well as in Forbes, Fast Company, O, The Oprah Magazine, the Wall Street Journal, and the New York Times. A graduate of Cornell University, he holds a master’s degree in teaching and works with numerous businesses, professional sports teams, schools, universities, and nonprofit organizations.

Soup: A Recipe to Nourish Your Team and Culture is available at bookstores nationwide, major online booksellers, or direct from the publisher by calling (800) 225-5945. For more information, please visit: www.JonGordon.com and www.Soup11.com.

SPRINGS Spring 2011 49

Design Pics/Punchstock

SMI Annual Market Summary Report What’s an Attainable Profit Level?

And, How Do I Get There?

by John Mackay

T

he SMI Annual Market Summary Report provides important financial benchmarks for spring manufacturers. The report presents insights into the performance of the typical spring manufacturer and more importantly, profiles a high profit group of manufacturers. By examining these high profit companies you can understand the areas where they excel and the trade-offs they made in order to achieve success.

According to the most recent SMI Annual Market Summary Report (profiling 2009 data), profit margin for the typical spring manufacturer climbed steadily from 2001 to 2008. In 2009, of course, we ran head on into a recession. As can be seen in the exhibit on the next page, in that same time frame “high profit” spring manufacturers earned approximately three to four times more profit than the typical manufacturer in the study.

The blue line in the exhibit profiles one of every four manufacturers that make up the high profit group in the Market Summary Report. If one out of four spring manufacturers can bring 11 percent to the bottom line, it should be an attainable goal for other manufacturers as well.

Many small business owners believe they are so closely involved with all facets of their operation that there is no need to participate in an industry benchmarking study. However, if your company wants to grow and increase profitability in today’s competitive environment, you must realize that sometimes even your best instincts may not be enough. And without an industry benchmark, they are only instincts. It is essential that you take the time to analyze industry best practices and build them into your company’s business plans.

50 SPRINGS Spring 2011

Profit Margin for Spring Manufacturers: 2001–2009 20.0 15.9 14.1

15.0 11.0 10.0

9.0

5.0

2.6

2001

11.0 9.6

8.1

1.0 0.0

10.9

15.2

2002

3.4

4.1

4.6

4.7

5.8

1.5

1.5 2003

2004

2005

2006 Typical

As your company sets its financial and performance goals, you must set them within practical and workable achievement levels. But, how do you know if your goals are practical and achievable? By comparing your performance to established industry performance targets and analyzing how “high profit” companies in the industry achieve their success.

Simply stated, financial benchmarking with the Market Summary Report is one of your most powerful tools to initiate and sustain improved profitability.

And it’s free!

What’s in it for SMI? 1) Understand the impact of legislation and regulation on SMI members’ businesses.

2) Position SMI as a proactive interface with governmental legislators.

3) Design SMI members’ services to appropriately address their needs.

Whoopee! So what? Who cares?

What’s in it for me?

Every SMI member that participates in the survey receives an individual company report, called the Financial Performance Report (FPR), that compares your company’s results to those of similar spring manufacturers. Such comparable benchmarks include not only the typical spring manufacturer’s performance but also those spring manufacturers in the same sales classification. The FPR also indicates how your company compares to the industry’s most profitable manufacturers. The FPR provides data for more than 100 different measures, ranging from sales per employee to inventory turnover to gross margin. It also

2007

2008

2009

High Profit

includes all key financial ratios as well as a complete income statement and balance sheet. In order to protect your confidential data, Mackay Research Group sends this report directly to you.

A Catalyst for Change?

The FPR can be a critical catalyst for change. It is difficult for owners, managers and their employees to dispute weak performance or inefficient processes when clear, systematic, comparative data is available.

Data empowers and stimulates people to address real issues and find solutions where results can be measured. Achieving financial success and facilitating change are two of the primary roles of manufacturing executives. The Annual Market Summary Report can be a tool to support both of these important roles.

Assess Success Factors The Market Summary Report evaluates the degree to which a business is successful. It focuses on critical financial success factors like: • Is your profit acceptable?

• Does it provide a reasonable return on the owners’ investment?

• Are your margins adequate to cover overhead?

• Are your expenses out of control?

• Are you spending too much on direct materials or direct labor?

• Is the resulting balance sheet acceptable?

Challenge Long-Held Beliefs The Market Summary Report provides a comprehensive and comparative evaluation of financial performance that help identify strengths and weaknesses. Manufacturers have a tendency

SPRINGS Spring 2011 51

to overestimate their strengths and underestimate their weaknesses. Little progress can be made when performance evaluation is left to a debate, based solely on experience and subjective evidence.

The Market Summary Report provides credible results to guide and motivate those in a position to have the greatest impact on performance improvements.

When owners and managers review the Annual Market Summary Report results, inevitably two types of conclusions are reached. First, some of the results reinforce what managers already believed, based on

T H E

S T E E L

their previous experience and training. The difference is that now there is credible, comparable evidence to support what was previously opinion or supposition.

Second, owners and managers are inevitably presented with results that challenge their long-held beliefs. These results are typically questioned because the evidence is contrary to long-held assumptions. Once the credibility of the results have been established, managers face the challenge of integrating this new information into their overall view of performance.

These results typically have the greatest impact on improving profitability.

Credible results provide evidence for managers to rethink their assumptions about strengths and weaknesses. It calls for them to incorporate new insights into a revised perspective of problems and opportunities. The Market Summary Report results challenge managers to address their most critical financial factors.

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Informed Decision-Making Few businesses have unlimited resources to invest in all aspects of their operation. Each year managers are faced with making resource allocation decisions that will result in improved profitability.

One of the major barriers is the inability of managers to shift resources from historically established operating procedures.

The Market Summary Report can provide infor mation that details the level of performance as well as the importance of financial factors for success. Identifying low performance factors that have great impact on profitability allows managers to focus their attention on those factors to improve and deploy their resources in the most efficient and effective manner. It prioritizes for the decision-maker where an investment of resources will have the greatest impact on improving profitability.

Motivate Employees Even the most well-intentioned employees become frustrated and discouraged when they receive little feedback regarding the impact of

their efforts. The Market Summary Report may be used to motivate employees in four ways: • It reinforces performance. Evidence of good performance is an opportunity to congratulate and reward employees for a job well done. This will motivate employees to maintain and improve performance.

• It identifies critical financial factors essential for performance improvement and provides evidence of where their efforts will have the greatest positive impact. Materials? Labor?

Overhead? Each company is different. Identifying areas where your company’s performance is below that of other spring manufacturers challenges employees to improve by tapping into their competitive nature.

• It provides meaningful performance comparisons. Comparative results with other companies in the same industry remove all doubt that it can’t be done better. With evidence that others perform at a higher level, employees typically rise to the challenge and commit themselves to improvement.

• It provides continuous assessment. With the trend results in the Market Summary Report, employees find out what needs to be improved AWire_Springs_Spring Issue.qxd

1/2/11

16:48

and recognize when and how their performance will be assessed in the future, which has proven to be a powerful motivator.

Each of the benchmarking outcomes described above empowers owners and managers to effectively make changes in their businesses. Sound evidence from the Market Summary Report can be used to address the need to break from ineffective practices and to begin a process to improve profitability.

You know you need to benchmark with the SMI Annual Market Summary Report, but you are just too busy. Let’s face it: If you don’t financially benchmark your company and implement the improvements suggested, there’s a real chance that someday you could find yourself out of business. Then you’ll have plenty of time to benchmark, but it won’t matter.

The deadline for the SMI Annual Market Summary Report analyzing 2010 financial data is May 31. If you haven’t received your questionnaire, call Lynne Carr at (630)495-8588, or e-mail lynne@smihq.org. u John Mackay is president of Mackay Research Group, a survey research organization that specializes in profitability and compensation research for manufacturing trade associations. He can be reached at john@mackayresearchgroup.com or call (720) 890-4255.

Page 1

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Springmaker Spotlight

The Wolverine team during a visit from U.S. Senator Debbie Stabenaw.

Adapting to Perform

A Profile of Jay Dunwell, Wolverine Coil Spring Co.

by Gary McCoy

W

hat a difference a couple of years can make. When the Great Recession hit hard in late 2008, it forced many springmakers to adapt their approach to the market.

Wolverine Coil Spring Co. was one of those spring manufacturers who had to evolve with the economic change. The company had a significant customer base in the automotive and office products industries.

As Jay Dunwell, president of Wolverine Coil Spring explained: “The downturn certainly helped us get off our tails and say, ‘Okay, what else is out there?’”

I recently sat down with Dunwell at the company’s office and manufacturing plant in Grand Rapids, Mich. He candidly said that as much as they enjoyed being comfortable building customer relationships in these niche industries, it was time to go out and explore new opportunities.

The company now has expanded its customer base to the appliance, hardware and home furnishings industries, among others.

“We’re wonderfully busy right now,” said Dunwell. “We can hardly keep up. We’re in a hiring mode; discovering some of those challenges. The theme of our first quarter 2011: ‘Problems we like to have.’”

Dunwell said the company continues to strike a balance between investing in new technology “at a pace that keeps you competitive,” while at the same time “realizing that certain customers and product lines can run very well on some of the older mechanical technology.”

Wolverine’s strategy is fairly simple: “Look for customers that can use the services of multiple product lines that we may produce.” Dunwell further reiterates that customers are attracted to Wolverine as a company “that has a quality and engineering systems structure that can support their needs.”

SPRINGS Spring Spring2011 2011 55 SPRINGS

Dunwell says constantly showing customers “love” by sitting down with them on a regular basis is vitally important. “If you’re flexible with them (customers) they really appreciate it.”

He says the company’s motto, “A commitment to perform,” well fits their desire to be great customer service suppliers.

As the company has increased business in the last four months, Dunwell says “the trick is to maintain that level of service and ‘Johnny on the spot’ responsiveness as we get busier.”

From a business strategy perspective, “we’re just trying to be close to the customers; changing as their needs expand or adjust.”

“Innovation is critical

Having Fun Dunwell says as much as there is pressure to perform, he says the employees and staff of Wolverine like to have fun. “We better have fun with what we’re doing,” he explained, “because if we’re not, then there’s a lot of other spring companies out there that are happy to take over our business.”

The company has metrics to follow, weekly staff huddles, along with monthly and quarterly staff meetings. “We share everything on a quarterly basis so everybody knows the score of the game and they know why things are tightening up or why we’re paying bonuses and giving raises,” explained Dunwell.

One of the things he believes and models for his employees is that there is more to life than the “sun rising and setting on Wolverine Coil Spring.” Dunwell says, “I try to bring that philosophy, if you will, to the culture of Wolverine.”

The company provides employees with the opportunity to earn paid personal days. If employees are on time each day, they earn a 1/2 hour of paid personal time per week.

Dunwell says the policy allows employees to accrue the time and use it for such things as children’s sporting events and other family activities.

Many of the company’s 50 full-time employees have been with the firm for more than a decade, and some have worked there for as long as 30 years.

Wolverine Coil Spring began in 1946 under the leadership of Raymond Carlberg, Dunwell’s grandfather. The company enjoyed steady growth until Carlberg passed away from a sudden heart attack in 1957. Dunwell’s mother, Nancy, experienced the passing of her father as a sophomore in college.

Dunwell’s grandmother, Virginia Carlberg, suddenly a widow, stepped forward to run the company. She was heavily supported by her son-in-law, Don Risch, a young engineer.

Dunwell says his uncle was “young and eager and did a terrific job of leading and growing the company with Virginia.”

to the success of many businesses, whether it’s product innovation or process innovation,” Dunwell said for a case study at the ACT website. “If you don’t have critical thinkers, if you don’t have problem solvers within your talent pool, you’re going to miss out on many innovation opportunities. And without innovative thinkers, you may be missing out on what could be the single most important factor in whether your business survives or it doesn’t.”

Son of a Dentist The son a dentist, Dunwell did not grow up being involved in the spring industry. He attended the University of Michigan and during his time off in the summers he worked in the injection molding industry at several companies around Grand Rapids. He graduated in 1987 with a degree in economics.

“As I looked at my career opportunities after graduating, I started to take a more serious look at the family spring business,” explained Dunwell. “I had a couple of cousins who worked for the company and yet I thought there might be an opportunity for me in a leadership role at some point.”

56 SPRINGS Spring 2011

In 1987 Dunwell came to work at Wolverine. At the time, one of the company’s sales representatives was retiring and Dunwell was tapped to take over his territory.

He fondly recalls making calls with this salesman, who distinguished himself with the top hat he wore and the shoebox he carried, full of index cards.

“The index cards had rubber bands around them for each of the communities he was visiting,” said Dunwell. “He would say, ‘Here’s the Holland rubber band, the Grand Haven rubber band, etc.’ Each card had comments about family and hobbies for every individual at each company.”

Dunwell remembers making a call at one company that was looking for weekly deliveries from Wolverine.

“The salesman took his hat and his briefcase and as we were walking out he said to me: ‘Jay, I’m glad you’re taking over because that’s just a whole new world that I’m just not sure I’m ready to handle.’”

At the recollection of that sales call, Dunwell says: “I laugh and think of how far the world has come along, especially when you think of this salesman who grew up in the business that regularly made monthly, quarterly or annual shipments.”

Today’s Requirements Dunwell says just-in-time (JIT) and vendor managed inventory (VMI) are now the new normal for springmakers.

“We’re checking websites throughout the day and supplying whatever number of boxes the customer needs for the next 24 hours,” explained Dunwell.

“That’s the way manufacturing is now and it is certainly a global footprint. You have to be cognizant of where your customers are.”

Dunwell took over as president of Wolverine in 1995. At the time he had been taking night classes at Western Michigan University to earn an MBA degree.

He decided to abandon the pursuit, believing that his time was better spent focused on running the company.

One of his cousins, also from the third generation, Brian Risch, is also involved in the day-to-day operations of the company. Risch is the company’s estimating/cost manager.

“Like a lot of family businesses, I’m not sure we’ve handled the transitions over the years as well as we could have,” admitted Dunwell. “I’ve learned a lot about better ways of doing that through the family business council of our Chamber of Commerce here in Grand Rapids.”

Wolverine specializes in compression, extension, and torsion springs. They also produce wireforms, pins, stampings and multi-slide products. Secondary operations include: stress-relieving, grinding, tumbling, shot peening and corrosion protective plating.

In addition, Dunwell says some customers have awarded Wolverine sub-assemblies to produce.

While Dunwell says they haven’t made any springs that have traveled to the moon, the company sold a

Left: Extinglo ashtray produced by “Wolverine Household Products” a subsidiary of Wolverine Coil Spring back in the ‘50s and ‘60s. Below: Cutter set also produced by Wolverine Household Products back in the ‘50s and ‘60s.

line of household products in the ‘50s that included the Extinglo ashtray and a package with a cake and cheese slicer. At one time they made military hand grenades.

A Passion for Workforce Development Even though they are competitors, Wolverine Coil Spring and fellow SMI member company, GR Spring and Stamping, are quite involved in the Manufacturers Council that is part of The Right Place, Inc. a non-profit economic development organization that promotes the economic growth of greater Grand Rapids. Dunwell says “as much as we are in the same industry, we’re competing on a global scale. If we’re not learning from each other and improving with other businesses in the area, we’re going to quickly fall behind on a global basis.”

Wolverine was awarded the 2004 Michigan Manufacturer of the Year by the Michigan Manufacturers Association (MMA).

One of Dunwell’s passions is workforce development.

He’s heavily involved in the Kent County Workforce Development Board and the Workpaths.com advisory board.

In October 2009, Dunwell was awarded the firstever ACT Employer of Excellence Award at a special ceremony in Washington, D.C. Martin Scaglione, president and COO of the ACT Workforce Development division, explained that “Wolverine Coil Spring was selected for its successful implementation of ACT resources to improve workforce quality, and for its role as a tireless advocate for local and regional adoption of initiatives to ensure a strong and skilled workforce into the future.”

This award honors employers that have significantly raised business performance by enhancing the SPRINGS Spring 2011 57

Initiative organizers planned to administer WorkKeys assessments and award Michigan National Career Readiness Certificates to document worker skills throughout the region. They quickly recognized that engaging employers in the initiatives represented an essential first step to success. Dunwell’s advocacy for improving workforce skills ensured that Wolverine Coil Spring would be among the first companies to get involved.

“In 2007, as we were rolling out this WIRED initiative, the management team at Wolverine decided to test everyone—all our current full-time employees,” says Dunwell. “Test anxiety set in when we began telling our team about the National Career Readiness Certificate and the three WorkKeys tests that power the Certificate (Applied Mathematics, Reading for Information, and Locating Information). People were asking ‘Does this mean I could get fired if I don’t do well on the tests?’”

Dunwell assured Wolverine employees their test results would remain confidential—only he and the company’s human resources manager would have access to them. “We tried to reassure them that the testing would give us an understanding of our talent pool and skill sets, and lo and behold, we did find some telling things.

“There were a few individuals who didn’t score so well; and not surprisingly, they were also the individuals who occasionally had quality issues on

workforce readiness of their employees. Award recipients demonstrate their commitment to helping individuals gain the sustainable workforce skills needed to contribute to the organization’s success.

Improving workforce quality has always been a priority for Dunwell.

“Innovation is critical to the success of many businesses, whether it’s product innovation or process innovation,” Dunwell said for a case study at the ACT website. “If you don’t have critical thinkers, if you don’t have problem solvers within your talent pool, you’re going to miss out on many innovation opportunities.

And without innovative thinkers, you may be missing out on what could be the single most important factor in whether your business survives or it doesn’t.”

This perspective matched up well with objectives established by West Michigan Workforce Innovation in Regional Economic Development (WIRED), a nationally recognized economic development initiative launched in the Grand Rapids area in late 2006. Dunwell served on a team that developed and submitted a funding request to the U.S. Department of Labor as part of the WIRED program. The West Michigan initiative was among the first to be funded, and the decision to use ACT assessment solutions to evaluate the region’s workforce skills was cited as an important reason for the application’s success.

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the production floor,” Dunwell recalls. “It became clear that these workers had skill gaps and just weren’t able to handle some of the work we were asking of them.

These skill deficits pointed out the need to offer specific training to close those gaps.

“We also found a few individuals who scored extremely well yet were doing some entry-level occupations or activities. We put those individuals on a fast track with some technical training and provided advancement opportunities. In one case, we had an employee who went from an entry-level position packing springs in shipping boxes to eventually operating our most sophisticated CNC equipment,” Dunwell reports.

“In addition to finding occasional ‘diamond in the rough’ employees, this testing is helping us build career ladders for our employees based on their training plans and rising skill levels.”

Once Wolverine had a good picture of its talent pool, there was no question about testing new employees using the same assessments. Applicants for full-time positions at Wolverine must now earn a Michigan National Career Readiness Certificate.

Wolverine Coil Spring served as a pilot site as the National Career Readiness Certificate was rolled out in Western Michigan. Dunwell formed a regional employer group to assist the project’s leadership as it pushed forward on goals, strategies, and metrics. He also championed the initiative by organizing employer awareness events and securing business support for the National Career Readiness Certificate.

He’s also been a part of The SOURCE. The organization is a not-for-profit employee support organization designed to help employees keep their jobs, receive training to enhance their employment, and help employees move into better positions within or across companies. The SOURCE does this by utilizing the best resources of the government, area non-profits, and private employers.

One of the things that Dunwell has been a part of is supporting the efforts of case workers from The SOURCE to be on site at Wolverine to help employees.

The Family’s Soft Spot Dunwell, and his wife, Amy, were the captains of their respective college sailing teams-- at the University of Michigan and at Western Michigan University, respectively. The couple met after college, away from the water, at a ski weekend with college friends.

“They had a little craps table there that weekend and she (Amy) took all my money,” recalls Dunwell with a chuckle. “I said: ‘I’ve got to get to know this girl who cleaned my clock.’”

The couple got married in 1993. Although they share a mutual passion for racing sailboats, the two Dunwell sons, Scott, 16, and Bradley, 14, do not. They instead are focused on competing in soccer and hockey.

Above: The Dunwell family, Jay, Scott, Bradley, and Amy in Costa Rica last summer. They all had on the same t-shirt after their luggage was stolen the previous day and the fishing charter gave them shirts.

Below: Scott, Morris, and Bradley on their first day of school last fall.

But Dunwell’s okay with that. Through his son’s soccer and hockey games he’s able to pursue one of his hobbies: photography. Action photos of Scott and Bradley can be seen throughout Dunwell’s office.

The Dunwell family has a soft spot in their heart for Morris Kamara. In between the ages of his two sons, Dunwell says Kamara, 15, has played soccer with Scott and Bradley for years and is “practically part of the family.” He even appeared in their Christmas card this past year.

Kamara is a refugee from the Ivory Coast. Last year, Amy worked through local red tape and politics so Kamara could attend the same high school as Scott.

Mandingo is Kamara’s native language. So Dunwell has helped mentor Kamara with his English and organized tutors to help him.

“He and his cousin survived the bad people who came to their village,” explained Dunwell of Kamara’s past life. “We don’t know what happened to Morris’ parents.”

Kamara and his cousin came to West Michigan through the auspices of Christian Family Services in the Grand Rapids area. The cousins live together in a house just a few miles from the Dunwell’s.

As Wolverine has adapted to perform for customers, the Dunwell family has adapted and committed themselves to help make one young man’s life better. u

SPRINGS Spring 2011 59

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Inside SMI

SMI Fall Business Meeting Set for Las Vegas SMI will hold its 2011 Fall Business Meeting September 24-27 at Green Valley Ranch, just outside of Las Vegas in Henderson, Nev. The SMI executive committee will meet on Saturday, September 24 from 1 p.m. to 4 p.m. On Sunday, September 25, SMI committee meetings will be held from 12:30 p.m. to 2 p.m., followed by the SMI board

meeting from 2 p.m. to 4:30 p.m. An opening cocktail reception will take place from 5:30 p.m. to 7 p.m.

Speaker tracks will kick off on Monday, September 26 from 8 a.m. to 4 p.m. This will be followed by table top exhibits and a cocktail reception from 5 p.m. to 7 p.m.

The meeting will conclude on Tuesday, September 27 with

SMI Sponsors Wire Rod Supply Chain Conference SMI is a gold sponsor of the 2011 American Wire Producers Association (AWPA) Wire Rod Supply Chain Conference, scheduled for May 2-3 in Atlanta, Ga. at the Omni Hotel at CNN Center. The event will include: Keynote and industry presentations; a wire rod supply panel; and two economists on the topic of “Recession and Recovery” to update predictions from last year.

After a conference program agenda from 1 p.m. to 5:30 p.m. on Monday, May 2, a cocktail reception will follow from 5:30 p.m. to 7 p.m. The last day of the conference on Tuesday, May 3 will

include a “Breakfast for Business” session, followed by day two of the conference program from 8 a.m. to noon.

Please note that registration to the Wire Rod Supply Chain Conference includes entrance to the Interwire Trade Exposition, which will be held at the Georgia World Congress Center from May 3-5 from 10 a.m. to 5 p.m.

For more program information and to register for the Wire Rod Supply Chain Conference, visit www.awpa.org.

speaker tracks from 8 a.m. to noon.

The SMI Lunch and Membership Meeting will take place from 12:15 p.m. to 1:15 p.m., followed by the final session of speaker tracks from 1:30 p.m. to 4 p.m.

For more information on the SMI Fall Business Meeting, contact SMI at (630) 495-8588 or visit www. smihq.org.

SMI Welcomes New Members SMI is pleased to welcome its newest members.

Commercial Spring and Tool Ontario, Canada Link Engineering Plymouth, Mich.

O & G Spring Chicago, Ill. Rockford Spring Rockford, Ill.

SPRINGS Spring 2011 61

SGpow

SMI Mourns Passing of Members It is with deep regret that Springs announces the passing of the following members.

Jack D. Haber, 71, died March 4, 2011.

Since 1997, Haber was the general manager of Plymouth Spring Co., Inc. in Bristol, Conn.

Richard Rubenstein, president of Plymouth Spring Co., said Haber was an expert in his field. “Jack had many talents. His other interestes included being a certified bartender.

Boating was his passion and hobby.”

Haber is survived by his beloved, Gaye Hayden, daughters, Jill Tuchmann and Pamela (Brad) Mondschein, his grandchildren, Joshua Gallant, Jordan Tuchmann, Alana and Rachel Mondschein, his brother, Larry Haber, and sister, Judith (Steve) Rubin.

Eleanor Stellyes Largent, 96, died Dec. 22, 2010. She attended Knox College in Galesburg, Ill., and later graduated from The University of Chicago in 1936. She was married to John Whittier for nearly 20 years before they divorced. They had three children, Eleanor Hope, Joy, and Lillian Alice.

She married Bernard “Bud” Asher in 1956. This marriage brought two more daughters, Lorene and Bernadette into the family. Eleanor and Bud acquired two businesses, Century Spring and A-1 Spring Corp. early in their marriage. These businesses

continued to grow, before Asher passed away in 1970. Largent then married longtime Idaho friend, Bernard “Bernie” Stellyes in 1971. Two more children joined the family, Jeanette and Monte. Stellyes brought his keen business sense to Century and it continued to grow and prosper throughout their marriage before he died in 1988.

Largent continued to be a driving force behind Century Spring until her retirement in 1989 at age 75. Century Spring continues its dominance in the spring business to this day, thanks in part to the leadership of Largent.

After retirement she became heavily involved in philanthropic pursuits and received many awards for her work. She enjoyed several leisure activities including bridge, duplicate bridge, and golf. She won the Oakmont Country Club 1994 Marsha Young Golf Tournament. She continued to enjoy her travels with family and friends.

On April 6, 1996, she married Willard Largent and welcomed two more daughters, Joan and Barbara, into the family. They enjoyed golf and family in Idaho and Glendale, Calif. They also traveled the world and in 2008 moved to Regent’s Point in Irvine, Calif.

She is survived by her husband, Willard; sister Lillian Birk (Wilbur); children, Hope Rhodes (Mark), Joy Land (Alan, deceased), Alice Mallrie (Joe), Jeanette

Dickeson (Bob), Monte Stellyes, Joan Weaver, Barbara Paisley (Bob), Lorene Todd and Bernadette Maguire. She is also survived by 12 grandchildren, nine greatgrandchildren and two great-grandchildren due this year.

Elizabeth “Betty” Jane Strauss, 90, died January 21, 2011, peacefully at home after a short illness. Betty was the wife of Chuck Strauss, founder of Regal Steel Company, Warren, Mich., who preceded her in death in 1992. They were married for 51 years. The Strausses attended many SMI conventions.

Strauss loved the theater, and before her marriage to Chuck she studied at the Pasadena Playhouse. She acted locally with the Ridgedale Players.

She was a devoted member of the National Shrine of the Little Flower Catholic Church for many years, and taught catechism to developmentally impaired children. She and Chuck traveled all over Europe, Japan, Central America and the Caribbean.

Strauss is survived by her children, Charles (Elizabeth), Mary, Susan (William) Rechlin and Paul (Gloria); her grandchildren, Lisa (Ken) Veenstra and Charlie Millerwise; four great-grandchildren; and many nieces and nephews. u

A WORLD OF SPRINGS

Available in low volume quantities.

Avoid no-bids or timely set up on short runs. Century Spring is a great source for filling low volume or prototype demands. Our stock parts ship same day at a very low minimum.

To learn more or to request a free stock spring catalog, inquire at info@centuryspring.com or by calling us at (800) 778-3430 Mon-Fri 6:00am - 4:30pm PST. Compression • Extension • Die • Disc • Drawbar H-Clips • Tapered • Torsion • Urethane

222 East 16th Street, Los Angeles, CA 90015 ph 800-778-3430 • fx 800-474-4479 info@centuryspring.com • www.centuryspring.com/smi

62 SPRINGS Spring 2011

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The Fast Track to High Quality Wire Suzuki Garphyttan offers it’s customers a vast selection of high quality wire with JIT delivery. From valve spring and stainless wire to flat and shaped wire, SG goes the distance to accommodate your every need. Call today and put our enhanced global distribution and impeccable customer service track record to work for you.

Oil Tempered Wire • OTEVA® Valve Spring Wire • KD Clutch Spring Wire • STATO Spring Wire OTEVA® Oil Tempered Valve Spring WIre • SiCrV+Ni-Alloyed High Tensile Wire • SiCrV-Alloyed High Tensile Wire • SiCr-Alloyed Wire KD Oil Tempered Clutch and Transmission Spring Wire STATO® Oil Tempered Chrome Silicon Spring Wire GARBAFLEX® Flat & Shaped, Carbon & Stainless Wire

Suzuki Garphyttan The Most Powerful Wire Source.

4404 Nimtz Parkway • South Bend, IN 46628 • (574) 232-8800 • Fax (574) 232-2565 • suzuki-garphyttan.com SPRINGS Spring 2011 63

New Products

Virus Detector for Industrial Computers from Hagiwara Sys-Com Hagiwara Sys-Com, has launched Vaccine USB, the industry’s first portable virus detection tool for Windows OS-based industrial systems.

In the past, industrial systems were built for specific functions and long life, and were typically custom-built with their own proprietary operating system. In comparison, for ease of manufacture and better cost performance, the majority of modern systems increasingly use Windows OS-based off-the-shelf industrial computers. For this reason, these systems are at higher risk of being attacked by the same viruses that affect office computers and can cause expensive plant shutdowns or service disruptions.

The Vaccine USB is a portable virus scan software that requires no software installation. Powered by anti-virus industry leader McAfee, up-to-date virus definitions can be downloaded to the Vaccine USB from any internetaccessible computer so that users can perform the virus scan with the latest definition file even in network-isolated environments.

The Vaccine USB works seamlessly with computers running Windows operating systems including XP Embedded, a popular platform for industrial computers. Upon insertion of the Vaccine USB, the virus scan program stored on its emulated CD-ROM partition will auto-run, a significant benefit for industrial computers that may lack a keyboard, mouse, or monitor.

The Vaccine USB is ideal in industrial settings including factory automation, professional A/V equipment, medical systems and test and measurement devices, among several others.

Hagiwara is now accepting sample requests through its website, www.hscus.com/Embedded/udrw/favusb.htm.

New Almen Mini-Strips and TSP-M Gage The new EI Almen Mini-Strip and companion TSP-M Gage from Electronics Inc. verifies shot peening intensity in small and/or inaccessible areas. This approach replaces the laborious shaded-strip procedure with a faster and more accurate process for spring manufacturers.

The mini-strips measure 1’’ x 1/8’’ and can be attached with double-sided tape directly to a simulated fixture—no need to allow room for a standard Almen holder. Plus, they’re ready-to-go—no need to make a shaded strip. Their small size makes them ideal for measuring intensity in small or hard-to-reach areas like dove-tail slots in jet engine disks, gear roots, and the internal bore of springs, without creating a complicated test fixture.

Electronics Inc. has also developed an intensity verification procedure with the new strips and gage that can be conducted on a simulated fixture.

64 SPRINGS Spring 2011

“Creating expensive, complicated test fixtures will become a thing of the past,” said Jack Champaigne, president of Electronics Inc. “Now spring manufacturers can get a much better idea of what’s happening to the critical interior diameter of springs that were difficult to test with fullsize Almen strips.”

The Almen mini-strips are made from SAE 1070 cold-rolled steel in a special process assuring hardness to Rockwell Hardness 44-50 HRc and are available in “A” thickness .051 inch and “N” thickness .031 inch. They must be used with the EI Almen Gage TSP-M. This gage has all of the features of the EI #2 Advanced Almen Gage but the Almen strip platform has been designed to accommodate the smaller and lighter strip. The Almen mini-strips and TSP-M gage are available for delivery now. For more information, visit www. electronics-inc.com or call (800) 832-5653 or (574) 256-5001 (U.S. and Canada).

Rustlick ULTRACUT Aero — New Premium Water-Soluble Oil Rustlick introduces ULTRACUT Aero, a new premium water-soluble oil optimized for high-tech ferrous and nonferrous metals including titanium, aluminum, Inconel and stainless steel which are widely used in aerospace, medical and the electronics industries. ULTRACUT Aero uses lubrication and antimicrobial technologies to create a cutting fluid that is “high-performance and long-lasting.” The company says it is “proven to offer maximum bioresistance against bacteria and fungus.” This non-chlorinated coolant also has superior boundary lubricants and extreme pressure additives for great surface finish and longer tool life.

Rustlick ULTRACUT Aero is available in 5 or 55 gallon containers.

ITW ROCOL North America designs and manufactures a full line of coolants and lubricants for the metalworking industry including the Rustlick product line of cutting and grinding fluids, EDM fluids, rust preventatives, sump-side additives, and coolant maintenance equipment. For more information, call (847) 657-5343.

Larson Electronics’ Magnalight Introduces Strobing LED Beacon Larson Electronics’ Magnalight Generation III 10 Watt LED Strobing Beacon is a small yet very powerful LED beacon light that uses a 10 watt LED to produce an exceptionally bright strobing flash that is brighter and more powerful than typical LED beacon lights.

Although one of Magnalight’s most powerful 12 volt LED beacon lights, it is also very small and versatile. The entire unit measures 2.5 inches wide by 2 inches tall and only .5 inch thick. This beacon is equipped with a 10 watt LED, putting it ahead of commonly available LED beacons that contain low power 1-3 watt LEDs. The 10 watt LED is paired with a specially designed clear optical lens to generate a brilliant 360 degrees of flashing light that is visible several thousand feet farther than most other LED strobes. The cast aluminum flush mounting base offers excellent mounting versatility and ease of installation. Unlike typical beacons, this beacon produces colored illumination without colored lenses or optics that can fade or discolor over time. This LED beacon is solid state and uses no filaments or glass in its construction, resulting in an extremely durable light that can withstand far more abuse than regular filament based beacons. The unit is waterproof and offers a wide variety of strobing flash patterns that can be set by the operator. Available in red, amber, blue or white, this LED beacon is ideal for use in the utility, construction, security, law enforcement and emergency services industries.

Weatherproof and extremely versatile, this LED beacon is ideal for all commercial applications and those in which high visibility is critical.

Visit Magnalight.com to view the entire line of Magnalight LED lights or phone (800) 369-6671.

Rotor Clip Specially Coils Constant Section Rings for Use in Automotive Transmissions Rotor Clip Company, Inc., has developed a specialized wire-forming process in the manufacture of Constant Section Retaining Rings for use in automotive transmissions.

These rings (Rotor Clip designations UMI, UHO, and USH) are coiled into a slightly elliptical shape which compensates for the plastic deformation that will occur during installation. Once installed, these rings “kick-in” and assume a more traditional circular shape which contributes to: Allowing the parts to clear the bore much more easily due to roundness; higher load capacity due to increased groove contact; and maximum clearance for assembled part to pass through the installed part.

The “kick” to the parts is most exaggerated at the gap of the part when it is installed. This allows for easier removal, using standard installation tools since the exposure of the gap is increased.

Visit www.rotorclip.com for online retaining ring specs, sample requests and quotation requests. To request a hard copy of the 2010 catalog, email adv@rotorclip.com. For technical considerations or design questions for these and other products, e-mail tech@rotorclip.com.

SPRINGS Spring 2011 65

Pinpoint Laser Systems Introduces New Version of 4-Axis Precision Mount The 4-Axis Precision Mount moves the Microgage Laser in four axes; vertical and horizontal, as well as two angular axes pitch and yaw to simplify machinery and equipment alignment tasks. Its laser beam can be positioned to within 0.001 inch and is ideal for checking machinery travel, precision bore alignment, the straightness of fixtures and assemblies and much more.

Like all Pinpoint Laser Systems products, this mount is easy to set-up and can be used on the production floor, as well as in the field for installations and servicing work.

Two precision micrometers adjust the elevation of the laser up and down, as well as its position left and right. Another pair of precision adjustments is for angular control of pitch and yaw. The mount is easily attached to a tripod or bolted to a machine, allowing for tight laser positioning control over distances as great as 150 feet. This 4-axis mount can be used for

checking straightness, machinery parallelism, squareness, flatness, bore alignment, and other demanding alignment tasks.

The 4-Axis Precision Mount is fabricated from solid aluminum and is protected by a hard, anodized coating. The micrometers are graduated in 0.001 inch increments (metric versions available) for easy control, and the mount is assembled with precision roller bearing slides and stainless steel hardware for years of reliable use.

For additional information call (800) 757-5383, or contact cjlord@pinlaser.com.

Zncoat™ Finish — New High Performance Alternative to Zinc Plating

World Class Worldwide Suppliers of Quality Metal Forming Equipment and Services for Over 100 years

AN SPX BRAND

• Two-High & Four-High Mills • Custom Rolling Mills • Turks Heads • Wire Flattening & Shaping Mills • Swaging Machines • Spring Coilers • Strip & Wire Formers • Wire & Tube Drawing • Rebuilds & Modifications

SPX PRECISION COMPONENTS - FENN DIVISION AN SPX BRAND

66 SPRINGS Spring 2011

300 Fenn Road • Newington, Connecticut 06111 Phone: 860.594.4300 • Fax: 860.667.4667 • Email: precision.fenn@spx.com www.spxprecision.com

NOF Metal Coatings North America Inc. and Curtis Metal Finishing Company are launching ZnCoat, a new finish that offers effective solutions for the problems that have been encountered by users of zinc plating for fasteners and small parts. ZnCoat, a zinc-rich coating for ferrous metals, offers several major advantages for high strength fasteners when compared to electroplated zinc. The finish is entirely chromium-free and provides superior corrosion resistance with a thin film, without risk of hydrogen embrittlement. Most importantly, these features and more are available at no extra cost when compared to zinc plating, baked for hydrogen embrittlement relief. ZnCoat is applicable for industries such as agriculture, construction, appliance, recreation, marine, etc., providing these markets with a higher performance alternative to conventional zinc plated finishes.

Compared to conventional zinc plating, ZnCoat consistently achieves over 240 hours of ASTM-B117 salt spray corrosion protection, as well as higher cyclical corrosion performance and real-world outdoor weathering resistance.

“ZnCoat has a number of performance advantages for high strength fasteners in comparison to zinc trivalent plating, at no additional cost. The superior rheology of this coating allows for consistent, uniform application – a definite must for thin films,” says Brian Lowry, vice president – technical services at Curtis Metal Finishing. “The finished product has an aesthetically pleasing, metallic silver appearance and it retains that appearance much longer than electroplated zinc.” Curtis provides the coating at two locations, Sterling Heights, Mich., and Machesney Park, Ill. For more information, contact Lowry at (586) 939-2850, or go to www.zncoat.com. u

Advertiser’s Index

Admiral Steel (800) 323-7055. . . . . . . . . . . . . . 22 Alex Industries (847) 298-1360. . . . . . . . . . . . . . 54 Alloy Wire International (866) 482-5569. . . . . . . . . . . . . . 53 Century Spring, Division of MW Industries (800) 237-5225. . . . . . . . . . . . . . 62 Diamond Wire Spring Co. (800) 424-0500. . . . . . . . . . . . . . 44 Elgiloy Specialty Metals (847) 695-1900. . . . . . . . . . . . . . 12 Exova (866) 263-9268. . . . . . . . . . . . . . 14 Fenn Technologies (860) 594-4300. . . . . . . . . . . . . . 66 Forming Systems Inc. (877) 594-4300. . inside front cover,

back cover Gibbs Wire & Steel Co. Inc. (800) 800-4422 inside back cover Instron (800) 564-8378. . . . . . . . . . . . . . 19 InterWire Products Inc. (914) 273-6633. . . . . . . . . . . . . . . 1 JN Machinery (847) 439-0866. . . . . . . . . . . . . . 23 Kiswire (201) 461-8895. . . . . . . . . . . . . . . 6

KOS America (770) 965-1145. . . . . . . . . . . . . . 16 Kreher Steel (800) 323-0745. . . . . . . . . . . . . . 52 Lapham-Hickey Steel (800) 323-8443. . . . . . . . . . . . . . 25 Larson Systems (877) 780-2131. . . . . . . . . . . . . . 26 Mapes Piano String Co. (423) 543-3195. . . . . . . . . . . . . . 43 NIMSCO (563) 391-0400 . . . . . . . . . . 47, 58 Precision Quincy (800) 338-0079. . . . . . . . . . . . . . 41 Precision Steel Warehouse (800) 323-0740. . . . . . . . . . . . . . 38 Proto Manufacturing (800) 965-8378. . . . . . . . . . . . . . 56 Pyromaître Inc. (800) 231-7976. . . . . . . . . . . . . . 45 Radcliff Wire (860) 583-1305. . . . . . . . . . . . . . 29 RK Trading (847) 640-9371. . . . . . . . . . . . . . . 5 Seneca Wire/FENIX, LLC (419) 435-9261. . . . . . . . . . . . . . 15 Shinko Machinery +81-6-6794-6610. . . . . . . . . . . . . 3 Simplex Rapid (563) 391-0400. . . . . . . . . . . . . . 31

Las Vegas Business Meeting

Spring Manufacturers Institute (630) 495-8588 . . . . . . . . . . . . . .

Suzuki Garphyttan (574) 232-8800. . . . . . . . . . . . . .

TCT Stainless (800) 334-7509. . . . . . . . . . . . . .

Tool King (800) 338-1318. . . . . . . . . . . . . .

Ulbrich Stainless Steels (203) 239-4481. . . . . . . . . . . . . .

United Wire Co. (800) 840-9481. . . . . . . . . . . . . .

Vulcan Spring & Manufacturing Co. (215) 721-1721. . . . . . . . . . . . . .

Zapp Precision Strip (203) 386-0038. . . . . . . . . . . . . .

39 63 28 30 21 33 48 60

©iStockphoto.com/ john eklund

Join SMI at the

Visit the SMI website to see our Scholarship winners

September, 2011

SPRINGS Spring 2011 67

Snapshot Jim Tomei A-1 Wire

Nickname: Jimmy (but only on the sports field).

Company name, city and state: A-1 Wire, Rockford, Ill. Brief history of your company: Originally a family owned business, we’re now part of Special Metals and a Fortune 500 aerospace company called Precision Castparts. In the past few years we’ve transitioned to a specialty nickel and stainless wire supplier to the demanding aerospace and medical markets.

Job title: General Manager., A-1 Rockford/Operations Manager, Wire Group Birthplace: Hinsdale, Ill. Current home: Batavia, Ill. Family: Wife, Cathy (married 24 years), daughter, Melanie, 18, and son, Jared, 12, pets, Indy (dog), and Mitzi (cat).

What I like most about being in the industry: The good friendships that are built.

Favorite food: Italian, which means pretty much anything from Maggiano’s.

Favorite books/author: Umberto Eco. Favorite song/musician: Cat Stevens, Mike Oldfield, Regina Spektor.

Hobbies: Soccer, running, and other sports that keep me from embarrassing myself on a golf course.

Favorite places: Cayman Islands/ SMI convention in New Mexico.

Best time of my life: Birth of my daughter (apologies to my wife and son).

68 SPRINGS Spring 2011

Jim Tomei with son, Jared, wife Cathy, and daughter, Melanie.

A really great evening to me is: Good food and drink, laughing with friends.

The one thing I can’t stand is: Greed. Way too much of that around.

The most difficult business decision I ever had to make was: The personnel cuts of 2009. They were necessary, but difficult.

My most outstanding quality is: None, for me. Any success I have comes from the great people I work with.

Role model: Dick Gallentine, my first manager in the wire industry, who taught me the importance of building strong teams.

People who knew me in school thought I was: A really good soccer player, and geeky.

I would like to be remembered in the spring industry for: Building my own strong team, and leaving it a better place than when I came in.

I knew I was an “adult” when: I had to pay my way through college.

If I weren’t working at A-1 Wire, I would like to: Work in a field that keeps me outside, and hopefully in better shape.

But people will probably remember me for: They probably won’t. I blend in to the background too well.

Why Partner With Gibbs? Our People.

Aaron Adam Al Alison Alisyn Allan Allen Anderson Andrew Angel Audra Ben Beth Bev Bill Bob Boyd Brad Brent Brian Calvin Caralee Carlos Cathy Chad Charles Christine Cindy Claire Clyde Dadisi Dan Dana Daniela Dave Denise Diana Dick Don Duane Elaine Eric Fitz Francisco Frank Garry Gary George Glen Gloria Greg Gregory Heather Hector Herb Jack Jean Jeanne Jeff Jim Joe John Jonathan Jonathon Joyce Juan Julio Kelly Ken Kevin Kirk Lisa Luanne Manuel Maribel Marie Mario Mark Matt Mauricio Mike Neal Neil Pablo Pat Paul Paula Pedro Perry Peter Phil Piotr Raul Ray Rich Rick Ricky Rodney Roger Rosetta Sandy Shaun Shawn Steve Susan Terry Tom Tommy Tony Tricia Vern Wayne Every successful organization counts on its people. At Gibbs we have a team of dedicated employees you can count on, too. Men and women who truly care about the work they do and the customers they serve. They are really a special group and they’re yours at no extra charge when you choose Gibbs.

reliable people, innovation and leading edge technology, the lowest total cost and a commitment to customer service and responsiveness beyond traditional expectations. That’s why so many leading companies have chosen to partner with us.

Since 1956 Gibbs Wire and Steel has represented a combination of excellent quality product, knowledgeable and The People You Can Rely On For Wire And Strip 1.800.800.4422 www.gibbswire.com

Connecticut 800 788-8112

Indiana 800 788-8113

Texas 800 788-8114

California 800 788-8115

North Carolina 800 788-8117

Ontario Mexico 800 387-2441 ++ 52(442) 384-3950

©iStockphoto.com/Kudryashka

Wire Diameter: 0.6mm-2.0mm (.024”-.078”) Complete cam-less operation Standard 10 axes Optional up to16 axes Z axis in/out Quill movement Rotating tool holder Multi-radii servo winders Touch screen interface

www.formingsystemsinc.com www.spring-testers.com