You've probably heard how the Chinese government subsidizes furniture manufacturers and their suppliers. How can American retailers and the public expect domestic furniture manufacturers to compete against both low wages and government subsidies while our governing bodies sit on their collective hands and watch factory after factory close?
Well, the fact of the matter is our representatives haven't been sitting idly by. Believe it or not, our government is subsidizing furniture manufacturers, too. Maybe they aren't handing out blank checks like China's manufacturers seem to be getting, but there is help out there if you are willing to take a little time to search for it.
The Center for Lean Learning has located funding resources for several companies to use to augment the cost of a lean initiative. If you follow this column, you know that lean is the key to leveling the playing field against China and other Pacific Rim countries. This article will introduce you to a sampling of funding resources for your lean journey.
There are a number of different ways to begin your search. At the center, we quickly narrowed the search down to the Economic Development Corp., which, at the federal level, is a pretty large animal. Every state has at least one government affiliated EDC and there are a number of EDC offices that are not official federal or state government agencies, but, nonetheless, they have money to support lean initiatives.
Fortunately, it's a general rule of thumb that the government agencies that appropriate and administer the grant funding are not the ones to approve grant requests and distribute the money. That's a good thing because there is less oversight to contend with and the application process is much simpler.
The federal EDC works with organizations such as the Manufacturing Extension Partnership, MEP, to channel funds to other agencies that actually approve applications. Every state except South Dakota has an MEP. The process may seem complex, but the only agencies you will be dealing with are in your city, county or regional area where there is a vested interest in making your organization succeed.
The MEP office in Michigan is the Michigan Manufacturing Technology Center. We worked with the West Michigan office, MMTC-West. They are hosted by The Right Place Inc., a regional non-profit economic development organization supported through investments from the private and public sectors. Simply stated, its mission is to promote economic growth in West Michigan.
It has been our experience that they live their mission with a passion you might not experience in dealing with a more detached organization. Each MEP is equipped to support client companies in a variety of areas. The MEP conducts assessments, provides assistance in strategic planning, training, marketing and sales, etc. Assistance is provided through organic resources or consulting groups such as The Center for Lean Learning.
The grant that we partnered with MMTC-West to attain for our client company, Worden of Holland, Mich., reimbursed 75 percent of the cost of the lean initiative for the first six months of implementation. That made all the difference for Worden management in their decision-making process. As you can well appreciate, furniture manufacturers usually don't have a budget line item for outside lean facilitators, so the money to retain those resources has to come from other scarce finances, which means the program, albeit valuable, probably won't happen. Thanks to the support from The Right Place through MMTC-West, Worden was able to achieve great success in its lean initiative.
West Coast programs
We haven't worked with all of the agencies that have resources available to defray the cost of a lean implementation, but among those we are familiar with, California and Arizona have very impressive programs. For some reason, though, furniture manufacturers don't seem to be aware those states have very generous and employer-friendly programs waiting for your company's application.
The California grant administrator told me other industries are taking advantage of the program, but furniture manufacturers are hesitant to even allow the agency to share the message with them. Our own experience indicates their frustration is real. Why would managers complain about unfair competition and then turn their backs on assistance tailored to help them be more competitive?
Arizona will even allow manufacturers to form a consortium for grant application purposes. In other words, if you have an upholstery plant, one of your business associates has a casegoods plant, and another one is a foam supplier, and you are all interested in adding points to the bottom line and growing your businesses through lean, your consortium can apply for grant funds to be shared to meet the needs of each individual company.
You could also share the cost of the transition process by retaining one consulting group to work with the consortium. I was especially impressed with Arizona's one-page application. Unlike the grant criteria of most other states, Arizona allows the recipient to spread use of the funds over a two-year period. That's especially important because it allows a company's lean champion to phase the transition to lean in a more balanced manner rather than force-feeding all the tools and strategies in a short time before many of them are ready to be used.
There are a number of other agencies that are privately funded, some by special interest groups that are passionate about retaining domestic manufacturing jobs. Others are successful public/private partnerships that include manufacturers, county governments and educators.
One such agency is the Southwest Virginia Alliance for Manufacturing Inc., SVAM, a non-profit educational organization. The focus of the SVAM is to retain regional jobs, enhance employee skills through a variety of training programs and educate young adults in the value of employment in the manufacturing sector to ensure a sustainable workforce for future growth and to attract more manufacturing jobs to the area.
The feature program of the SVAM, Dream It Do It, a manufacturing careers awareness program created by the Manufacturing Institute, is gaining national recognition for its emphasis on helping students identify and achieve their dreams.
Other resources that shouldn't be overlooked are the State Employment Security Commissions. They have programs for manufacturers to enhance skill levels and create a more productive workforce. Worden obtained a grant from the Michigan Employment Security Commission that allowed us to provide lean skills training for a select group of employees.
If you are vacillating on whether to launch your company's lean initiative because of scarce financial resources or a lack of trained staff, hesitate no longer. Contact the organizations mentioned in this article or The Center for Lean Learning, at www.thecenterforleanlearning.com, for assistance in locating resources near you.
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