10:45 A.M.
Refreshments and networking

*Manex will award a complimentary Benchmark Assessment report to one of the attendees. The Manex Benchmark Assessment compares a company's performance against its peers in 12 key best-in-class metrics.

Who Should Attend
Manufacturers, distributors and their supply chains:
- CEO, President, Owner, Principals
- COO, CFO
- General Manager
- Vice Presidents, Director of Operations

Cost: $20 per person
Due to limited space, we encourage you to register online in advance to ensure your spot. For questions, please contact Wendy Linney at wlinney@manexconsulting.com.

Click Here to Register
 

For information on the next Manufacturing Summit, please contact Nana Cho at ncho@manexconsulting.com.

Recap: Santa Rosa Manufacturing Summit
The first Santa Rosa Manufacturing Summit was held on February 19, 2009, with more than 120 in attendance. Manex hosted the Summit in partnership with Comerica Bank, Moss Adams LLP, the UCLA Anderson School of Management and the Santa Rosa Chamber of Commerce.

The Summit began with a keynote by Dana Johnson, Chief Economist for Comerica Bank. Mr. Johnson gave a presentation on the economy after the credit crunch, and discussed the latest trends and policies impacting the global, U.S. and Bay Area economies. Professor Charles Corbett from the UCLA Anderson School of Management gave a presentation on how companies around the world are increasingly becoming involved in Green Supply Chains. Professor Corbett demonstrated how supply chains in a wide range of industrial sectors are becoming greener, and how green supply chains are often more profitable.

Bill Browne of Manex gave a presentation on ways manufacturers can grow sales and profitability in a recession. Mr. Browne discussed issues and challenges that manufacturers are facing in this climate, and proposed five low cost, rapid ways to grow sales and reduce costs. The Summit concluded with a final presentation by Bob O'Connor of Moss Adams LLP, who discussed R&D tax credit strategies for manufacturers. Mr. O'Connor discussed how the R&D tax credit is a hidden and immediate source of cash for many companies, especially for small and mid-sized manufacturers.

Foster Lumber Yards was the winner of the Manex Benchmark Assessment which provides benchmarking data comparing a company's performance against its peers in 12 key metrics.

The next Manex Manufacturing Summit is scheduled to take place in Solano County in Fairfield, CA on May 5, 2009. For information on upcoming Manex Manufacturing Summits in the Bay Area, please contact Nana Cho at ncho@manexconsulting.com.

What's News
Ways to Thrive, Even in Tough Economic Times
The Bay Area's economic environment remains challenging and is expected to deteriorate further until the third quarter of 2009. Experts predict the California economy will not rebound until 2010. It is more important than ever for a company to assess the state of its business and identify immediate and long-term performance improvement opportunities. A rapid kick-start tool is the Manex Benchmark Assessment, which helps identify and prioritize near-term performance opportunities. The Benchmark Assessment frequently finds cash "hidden" in excess raw materials and finished goods inventory, and highlights excess rework/waste and equipment downtime compared to industry peers. Manex also has turn-key solutions to help companies realize rapid top-line and bottom-line performance improvements that are immediate and sustainable, strategically sound, and that promote growth. For companies faced with financing challenges, Manex can assist in improving its business performance and obtaining better access to financing through our partnership with selected lenders and private equity groups. We do this by helping companies meet lender covenants and qualify for better or additional financing, and by providing introductions to private equity and alternative lenders. Since 1995, Manex's Rapid ROI solutions have helped companies realize immediate process improvement and cost savings, and identify new or improved market opportunities and growth strategies. For more information on Manex's various solutions, please contact Jonathan Lee at jlee@manexconsulting.com.

California's State Treasurer's Office Increases the Industrial Development Bond Program to $150MM
The State Treasurer's Office has increased the funding allocation for the 2009 Industrial Development Bond (IDB) program from approximately $120MM to $150MM. Manufacturers can use these tax-exempt, private-activity bonds, which are issued through state and local governmental agencies, such as The California Enterprise Development Authority (CEDA), to help purchase facilities and finance capital expenditures. Manufacturers interested in these funds must be credit worthy and meet certain state and federal requirements. Companies meet the basic eligibility requirements if they are seeking less than $10MM to acquire or construct facilities and they are capable of securing bank financing.

IDB financing was created by the United States Congress to promote investment in land, buildings and new equipment associated with domestic manufacturing and processing operations. Every state gives cities and counties the authority to issue IDBs, often through state entities such as CEDA. Because the bondholder is free of both federal, and in most cases, state income taxes, there is a healthy demand for this product and thus a liquid market.

Companies interested in pursuing IDB financing will need help from a group of experts who can assist in closing the deal. A bond counsel, who is a private attorney with expertise in public financing, will determine whether a project complies with federal tax law and will make sure the company can get the funding. An underwriter can sell the bonds to the public and a financial adviser to private investors.

For more information on IDB financing, contact Nana Cho at ncho@manexconsulting.com. Manex will also hold a panel discussion on "Financing Resources and Access to Capital" at the Solano County Manufacturing Summit in Fairfield, CA on May 5, 2009. An IDB expert will be on hand to discuss in more detail how the program works. Click here to register for the Solano County Manufacturing Summit.

 

Running Against the Tide: Asset-Based Lenders Can Help Companies Through the Credit Crisis
Contributed By: Jeffrey Sweeney, Managing Director, US Capital

With the global recession deepening, credit markets have been tightening further. Securing traditional funding through banks and other financial organizations has now become more difficult than ever. Banks are no longer willing to lend to companies that are not generating positive cash flow. Their security demands have also increased. Credit has become more expensive and conditional. This has pushed many companies to distress and, in some instances, bankruptcy, especially smaller businesses.

Unlocking the value of your assets

What many businesses do not realize, however, is the extent to which they can leverage their business assets to secure funding. There is a well-developed market for providing working capital for small businesses with assets, such as accounts receivable, inventory, purchase orders, premises, machinery and equipment, and even a brand. This type of financing is called asset-based lending, or ABL.

Last year, the Commercial Finance Association announced that ABL was a market worth over $500 billion. "These findings prove that companies are still able to obtain financing to meet their needs," said Andrej Suskavcevic, CEO, "and they're doing it by utilizing their assets-ranging from accounts receivable and inventory to intellectual property, equipment and real estate-as collateral." Today, ABL is a fundamental financing solution.

The benefits of asset-based lending

When times are difficult, unlocking the inherent value of your assets, especially intangible assets, is attractive. Today, ABL is affordable, offers flexible loan structures, and can provide the borrowing power that cash flows may no longer be able to supply. At US Capital, for instance, businesses can borrow money using the liquid, current assets of the company (such as accounts receivable and/or inventory) or the fixed assets of a business (such as plant, property, and equipment) as collateral. Asset-based loans are priced competitively with cash-flow loans, and come with fewer financial covenants. They can be used to secure working capital, but also to finance growth or acquisitions.

For more information on asset-based lending, contact Jeffrey Sweeney, Managing Director of US Capital at 415-882-7160. Mr. Sweeney is scheduled to speak at the Solano County Manufacturing Summit on May 5, 2009. Click here to register for the Solano County Manufacturing Summit.

21% of Bay Area Manufacturers Project Sales Increase in 2009
In a recent survey, fully 21%, or about one out of five, Bay Area manufacturers project sales increases in 2009. One-third believes sales will decrease, and 46% believe it will remain about the same. The survey was conducted by Market Development Group, Inc. (MDG), a marketing and sales consulting firm that provides business growth solutions. MDG interviewed 178 manufacturers about their projected 2009 sales revenue compared to 2008.

According to Eric Wiedenmann, President of MDG, the manufacturers who expected their sales to grow attributed this to new, innovative products or being well positioned in growth areas such as medical devices and security. Mr. Wiedenmann noted "In rough economies like this one, even well positioned companies need to pay close attention to their sales and marketing plans. For most manufacturers, the best way to ensure stable or growing sales is to invest in marketing. Too many companies cut back in these areas, when the economy turns down, and these are the very areas most in need of investment."

Market Development Group, Inc., founded in 1997, provides high impact sales and profit growth solutions in challenging economic environments. For more information about the survey and MDG, contact Eric Wiedenmann at 925-648-0680.

Manex Partners with Santa Rosa-Based HR Services Firm
The HR Matrix, a Santa Rosa-based firm specializing in Human Resources, Organization Development and Search, has partnered with The Corporation for Manufacturing Excellence (Manex). Through its partnership with Manex, The HR Matrix provides custom management and staff training programs to help manufacturers meet their training objectives. Manex advises manufacturers, distributors and suppliers to improve their profitability and competitiveness. Cofounder, Brenda Gilchrist, stated "together, we can provide comprehensive solutions to ensure the workforce is skilled in leading manufacturing methods and technologies and that managers and staff are trained to enable future innovation."

 

Client Results
Startup Biotech Company Implements Lean Methods and Achieves Significant Improvements in Profitability and Productivity
A startup biotech company headquartered in Menlo Park, CA, is developing a transformative single-molecule, real-time DNA sequencing platform. The company's goal is to commercialize this DNA sequencing technology, eventually enabling sequencing of individual genomes as part of routine medical care. Enabling routine use of DNA sequencing requires a significant increase in price performance and overall capabilities. This technology offers a completely new performance envelope - long reads, increased throughput, and low cost. The company is funded by various venture capital funds.

The company identified Lean Manufacturing as a critical way to achieve their objectives of increasing price performance and overall capabilities in real-time DNA sequencing. It turned to Manex as a partner to transform their organization using Lean Manufacturing because of Manex's comprehensive Lean knowledge, and in-depth manufacturing expertise.

Manex conducted 5S and workspace layout/organization training with practical application of each step within their operations. A Value Stream Mapping assessment of current operations was conducted to examine the environment. Manex then identified and prioritized initial, high-level opportunities for improvement.

The implementation of Lean has helped the company improve productivity and increase the efficiency of its operations. Specific results include:
 

• 5S and workspace layout/organization implementation has resulted in a 40% increase in productivity
   
• Reduced floor space requirements by >50%, eliminating need for new building
   
• Doubled throughput in Surface Production
   
• Reduced cycle time by 68%
   
• Consolidated two "manufacturing areas" into one area while not sustaining any down time; process completed in 1 day
   
• Provided comprehensive workforce development through Lean Manufacturing training

Leading Manufacturer of Cultured Marble Products Improves Efficiencies, Achieves Higher Levels of Profitability, and Produces Better Products for Customers
For over 25 years, a leading manufacturer of cultured marble products in the Bay Area has pursued an ongoing commitment to outstanding quality and customer service. With a 35,000 square foot production facility, the company designs, builds, and installs high-value surface products for a number of applications.

Due to high levels of demand, the manufacturer grew its business as needed to meet that demand. At this time, the company has the opportunity to improve upon its operations on the manufacturing floor and in the back office, and to provide significant workforce development and training to its employees.

The client engaged Manex to analyze these areas of opportunity and implement process optimization solutions, while simultaneously providing training to its employees. Manex performed product flow observations, implemented improvements, conducted time floor space analysis, recommended a future state layout and reorganized the Finished Goods Inventory area to improve floor space efficiency. Manex also provided training to employees in 5S and workspace layout/organization, waste identification, safety, personal protective equipment (PPE), root cause analysis and practical problem solving. Financial and non-financial metrics were also identified to help the client define and measure progress toward organization goals.

A US Department of Energy (DOE)-approved energy audit was also conducted, and recommendations were made to reduce energy consumption.

Specific results include:
 

• 134% improvement in 5S and workspace layout/organization score from Jun 07 - Jun 08
   
• 78% improvement in productivity
   
• 20% reduction in scrap
   
• 51% reduction in remakes
   
• 76% reduction in rework