R.J. Reynolds is one of a number of consumer product manufacturers that increasingly rely on customized packaging to reach different market demographics. The trend heralds a significant increase in business for Alcan Packaging Co.’s Peachtree City, Ga., printing plant, which mainly produces packaging for R.J. Reynolds’ numerous cigarette brands. But to take advantage of the opportunity, Alcan management had to figure out how to tighten their processes, and for that, they turned to Georgia Tech.

Typically, Alcan’s rotogravure press operated long continuous runs of up to 20 hours per job, according to general manager Chris Turk. R.J. Reynolds’ new approach meant that while the aggregate number of cigarette packages would be about the same, the total would be divided among several shorter runs, one for each different wrapper design. So the first key issue to be tackled for increasing capacity was how to reduce the time-consuming press set-up required for each new print job.

“Strategically it wasn’t a cost-reduction initiative,” said Turk. “We were trying to get ahead of where our customers are going.” The number of SKUs – manufacturing parlance for individual items – ordered by customers has doubled and sometimes tripled in recent years, he added.

“If we were to move from a relatively simplistic supply chain to a highly complex supply chain, from a few items to a very high-mix manufacturing environment, one of the things we needed to look at was set-up time reduction,” Turk said.

He contacted an old acquaintance, Derek Woodham, West Georgia region manager for Georgia Tech’s Enterprise Innovation Institute. Woodham visited the Peachtree City plant to outline Georgia Tech’s services and learn about Alcan’s needs.

“They recognized that to grow the business they had to look at their processes in terms of turning jobs around faster and freeing up capacity in the finished goods storage area as well as material handling,” Woodham said. “We conducted a kaizen related to setup reduction, and they took that training and application and applied it to all their presses.”

Kaizen is a learn-by-doing technique involving all employees and managers for implementing lean manufacturing and continuous improvement. The methodology focuses on process and results, systemic thinking and objectivity.

The reduction in set-up time was so successful in getting jobs through the press quickly that the pre-press work for new jobs couldn’t be ready fast enough, creating a delay. At the other end of the press, finished work quickly accumulated, creating a bottleneck. Workflow efficiency then became Woodham’s next target.

Finished goods come off the press and are stacked on pallets, which are then taken to a stretch-wrapping machine before going to the shipping area. It’s a straightforward process in theory, but had become a bit disorganized in practice.

“We created flow lanes for the finished goods area so the forklift drivers put material into designated locations instead of having things stacked all over the place randomly, ” Woodham explained. The new organization included a process for moving pallets to the stretch-wrap area that resulted in a steady flow of work to the machine, he noted. Previously, the haphazard material flow would leave the machine underutilized for periods of time, but double- or triple-booked at other times.

“They had been thinking about buying another stretch wrap machine to handle the crunch times,” Woodham said, “but by evening out the material flow, a second machine was not necessary.”

The value to Alcan of these changes and increased capacity is substantial, since they enabled the company to more than double its R.J. Reynolds’ account.

Alcan already had a little more than 40 percent of R.J. Reynolds’ cigarette packaging business when the company acquired the rest of the multi-million-dollar contract, according to Turk. “So we had to figure out how to fit more business into our existing plant until we could build a new one,” he said. “If we hadn’t been able to do that, I think we would have been in deep trouble because the contractual arrangements and agreements were fairly rigorous in terms of what would happen if you couldn’t supply the product – and more than doubling your business transcends just asking people to work overtime.”

The new business also added 25 new jobs, bringing Alcan-Atlanta’s total to 180, Turk noted.

With 31,000 employees at 140 sites in 30 countries, Alcan Packaging is a major player in specialty packaging for the food and beverage, pharmaceutical and medical, beauty, and tobacco markets. A company that size has extensive continuous improvement expertise available in-house, so why work with Georgia Tech?

The services offered by through the Enterprise Innovation Institute are, in a word, convenient, according to Turk.

“With Georgia Tech, we can tap into their lean enterprise programs when we want to, in whatever way we want, with as many people or as few people as we want,” he explained. “To me that’s a great opportunity. I might not know today that in a month I’ll need to take advantage of something they have to offer, but when that time comes, they’ll be ready to help.”

Another advantage, Turk noted, is that Georgia Tech experts like Derek Woodham bring an outsider’s perspective to the task. People within the company culture tend to think alike regardless of whether they work at a printing plant in Georgia or a printing plant in the United Kingdom, he noted.

“I think our kaizens were successful, at least in part, because nobody came in here with a pre-set notion of the way it ought to be.”

Corporate programs tend toward a one-size-fits-all approach and can be time-consuming as well as logistically inconvenient if a certain training session is held in a distant location.

“For the kaizen we ran last summer with Georgia Tech,” Turk said, “they came in, four days later they left, and we were done.

“I don’t think we even used 10 percent of what’s available at Georgia Tech to help us achieve what we were able to achieve. That’s the exciting part because from our standpoint here at Alcan Atlanta, this was a huge, huge success story for us.”

For more information on lean enterprise services offered by the Georgia Tech Enterprise Innovation Institute, contact Derek Woodham (706-881-0535); E-mail: (derek.woodham@innovate.gatech.edu) or Tim Israel (404-894-2272); E-mail: (tim.israel@innovate.gatech.edu).
Research News & Publications Office
Enterprise Innovation Institute
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 100
Atlanta, Georgia 30308 USA

Media Relations Contact: John Toon (404-894-6986); E-mail: (john.toon@innovate.gatech.edu).

The Georgia Institute of Technology has launched a sweeping restructuring of its business and community assistance programs as part of a new initiative known as the Enterprise Innovation Institute.

The restructuring brings new and established Georgia Tech programs together into a broadly integrated initiative designed to help industry, entrepreneurs, economic developers and communities become more competitive through the application of science, technology and innovation.

Creation of the Enterprise Innovation Institute represents the first major reorganization of Georgia Tech’s economic development and business assistance programs since the Economic Development Institute (EDI) was formed in 1993.  The changes affect all activities of Georgia Tech’s former Office of Economic Development and Technology Ventures, including the Advanced Technology Development Center (ATDC) business incubator, VentureLab research commercialization effort, Commercialization Services initiative and former Economic Development Institute.

Supporting Georgia Tech’s goal of defining the technological university of the 21st century, the new organization will expand efforts to identify and transfer key innovations likely to have significant impacts on local, state and national economies.  Plans for the restructuring grew out of consultations with key Georgia Tech stakeholders, findings of the 2005 Georgia Manufacturing Survey, and recommendations from the National Innovation Initiative co-chaired by Georgia Tech President Wayne Clough.

“The future viability of local, state and national economies will depend largely on their ability to successful apply science, technology and innovation,” said Georgia Tech Provost Jean-Lou Chameau.  “Through the Enterprise Innovation Institute, Georgia Tech will bring its considerable resources to bear on helping enterprises of all types become more competitive in today’s global marketplace.”

A leader in science and engineering education and with a research program totaling more than $400 million per year, Georgia Tech is a major developer of science and technology innovations.  Building on these new technologies and collaborating with like-minded organizations, the Enterprise Innovation Institute will work with the private sector to apply innovations to real marketplace needs, he said.

“The rapid and dramatic changes taking place throughout the world mean U.S. companies can no longer compete just by reducing costs and boosting efficiency,” said Georgia Tech Vice Provost Wayne Hodges, who heads the new organization.  “Business is now global and companies must complete on the basis of innovation.  To succeed in the future, companies must be able to develop and commercialize innovative products, processes and services ahead of their competition.”

Beyond driving innovation into business, industry and government, he explained, the new Enterprise Innovation Institute will also make Georgia Tech’s services to industry and communities more customer-focused, more closely tied to the strengths of the institution, and better able to take advantage of Georgia Tech’s expertise.  It will also expand efforts to form new companies and create new commercialization opportunities based on technology developed by Georgia Tech researchers.

“Because of its research and service programs, and participation in national competitiveness initiatives, Georgia Tech is uniquely positioned to help our state’s companies and communities both understand and meet the challenges ahead,” Hodges added.

Underscoring the challenges facing Georgia companies, the 2005 Georgia Manufacturing Survey found that 18 percent of the state’s manufacturers had lost business to international outsourcing between 2002 and 2004.  But on a more hopeful note, the survey also found that companies relying on innovation for a competitive edge enjoyed larger sales margins, paid higher wages – and had less to fear from outsourcing than did companies relying on other forms of competition.

The new Enterprise Innovation Institute provides services through four primary units organized by customer group:

• Industry Services, which focuses on industrial customers around the state.  This unit includes the Georgia Tech Regional Office Network; Atlanta-based centers that focus on such productivity improvements such as quality, lean enterprise, energy and environmental management; and federally-supported programs such as the Manufacturing Extension Partnership and Georgia Tech Procurement Assistance Center.
• Commercialization Services, which focuses on moving technology out of the laboratory and into the marketplace.  Commercialization Services identifies Georgia Tech innovations with potential commercial value, works with faculty to determine the best path for commercializing the technology, helps license technology established companies, and – where appropriate – involves experienced entrepreneurs in forming new companies.
• Entrepreneur Services, which focuses on meeting the needs of emerging companies around the state.  The unit includes the Advanced Technology Development Center (ATDC), the Georgia Statewide Minority Business Enterprise Center, the Centers of Innovation program and the new SBIR Assistance Program for the State of Georgia, which helps eligible companies win federal R&D grants.
• Community Policy and Research Services, which brings innovation to local and state government entities while conducting technology-based research and policy projects that help communities provide a supportive environment for business and industry.  The group’s best-known services are WebFIT, which helps communities anticipate the results of land-use decisions, and LOCI, which assess the economic impact of development.

A fifth new unit, the Strategic Partners Office, assists companies seeking to develop Georgia Tech relationships, serving as bridge to a broad range of campus-based resources and people.

“We see a need for more strategic and comprehensive assistance to these companies that are forward-thinking and interested in innovation,” Hodges said of the Strategic Partners Office.  “Expanding our relationships with them will help create synergies between Georgia Tech assistance programs that will boost both their value and impact.”

Research News & Publications Office
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 100
Atlanta, Georgia  30308  USA

Media Relations Contact: John Toon (404-894-6986); E-mail: (john.toon@innovate.gatech.edu).

Companies may think they’ve tuned into customers when, in reality, they’re self-absorbed.

“Although most companies start out with a strong focus on customers, as the organization grows beyond a dozen members, people may stop looking outward and become preoccupied with internal processes,” says Craig Cochran, a region manager at Georgia Tech’s Enterprise Innovation Institute, where he assists companies with quality improvement and lean techniques.

In his new book, “Becoming a Customer-Focused Organization” (Paton Press, 2006), Cochran explains that this corporate myopia is a natural phenomenon sparked by self-preservation.

“Once someone becomes part of an organization, it’s only natural to want to remain part of it – at least, until something better comes along,” he explains. “The irony is that this inward orientation doesn’t ensure survival. In fact, it guarantees the opposite—irrelevance, obsolescence and death.”

In contrast to other books on the topic, Cochran takes a global approach to being customer-focused, covering everything from management systems to complaint resolution. A customer-centric philosophy isn’t just for Fortune 500 companies, he stresses: “All organizations have customers, including government agencies and nonprofit groups.”

In search of feedback: A good example of the inward orientation at work is how many companies approach customer feedback as an annual event – an Olympic survey of sorts – instead of treating it as an ongoing process.

“Companies shouldn’t try to invent new ways for collecting customer feedback,” Cochran says. “They already have countless customer interactions available to them, ranging from salespeople to technical reps. What’s important is to provide some structure to these interactions and share them with everyone in the organization.”

Weaving customer feedback into daily processes makes it easier to digest and easier to take action on, he adds.

Embrace complaints: Another measure of an organization’s true focus is how it handles customer complaints. Most companies treat complaints not as red alerts but as something they’ll get around to eventually. Managers even argue about how to categorize complaints, whether it was a bona fide beef or merely a comment.

Smart companies cherish customer complaints. “Customers who complain are not nitpickers or looking for discounts, they’re committed to your organization,” Cochran says, noting that complaining requires time, effort and emotion. “Someone who isn’t committed to your company wouldn’t bother complaining.”

Customer-centric organizations make it easy to complain. They use toll-free numbers and complaint desks staffed by knowledgeable people who don’t give scripted answers. They apologize for any inconvenience suffered by customers and thank them for bringing the problem to the company’s attention.

Perhaps most important, customer-focused organizations make sure they get back to customers. “Unless you let someone know what action has been taken, the customer is never going to perceive a difference,” Cochran says. “You’ve got to close the loop. If the customer isn’t aware of the fix, then the remedy doesn’t exist.”

Leading indicators: A customer-centric company tracks customer satisfaction and loyalty metrics at the highest levels of management instead of relegating them to the customer-service department.

In most companies, however, senior management fixates on financial measures like sales and profits. “But these are historical metrics of what happened in the past,” Cochran points out. “In contrast, customer-satisfaction and loyalty are leading measures that indicate what will happen in the future, so they’re more valuable to the organization.”

Bottom line, if a company isn’t concentrating on its customers, the blame belongs to the boss. “The leadership of an organization has no job more important than making sure everyone knows the importance of the customer,” Cochran says. “CEOs who want real job security should try to please customers, not shareholders.”

Research News & Publications Office

Georgia Institute of Technology

75 Fifth Street, N.W., Suite 100

Atlanta, Georgia  30308  USA

Media Relations Contact: John Toon (404-894-6986); E-mail: (john.toon@innovate.gatech.edu).

Technical Contact: Craig Cochran (678-699-1690); E-mail: (craig.cochran@innovate.gatech.edu).

A new study of nearly 650 Georgia manufacturing companies underscores the importance of innovation as a competitive strategy – at a time when international outsourcing continues to impact Georgia’s manufacturing community.

The 2005 Georgia Manufacturing Survey shows that companies basing their competitive strategies on the development of innovative products or processes enjoy higher returns on sales, pay better wages and have less to fear from outsourcing than do manufacturers relying on other competitive strategies.

Georgia manufacturers that rely on innovation for their competitive edge reported returns on sales 50 percent higher than companies that compete by providing low cost products – a gap that grew substantially since the last survey in 2002. Innovative companies paid workers a third more than the average Georgia manufacturer and were 40 percent less likely to lose work to outsourcing than were companies competing on low cost.

The survey of Georgia manufacturers, part of a periodic study begun more than a decade ago, was conducted by the Enterprise Innovation Institute and the School of Public Policy at the Georgia Institute of Technology.

• Read the full text of the 2005 Georgia Manufacturing Survey

“Innovation, whether in products or processes, or in organization or services to customers, is one of the main paths through which manufacturers can become more distinctive, secure market premiums, satisfy customers, expand sales, reward workers and improve their bottom line,” explained Phil Shapira, a professor in Georgia Tech’s School of Public Policy and a study co-author. “Companies that do not continuously innovate will find themselves under increasing pressure from low-cost producers in the United States and globally.”

Offering innovative products gives companies a competitive edge that provides protection against outsourcing and allows them to charge a premium – which creates higher margins and allows higher wages, notes Jan Youtie, a researcher in Georgia Tech’s Enterprise Innovation Institute and another study co-author.

“If a company competes on the basis of innovation, that usually means only a few other companies are offering similar products,” she said.

After launching its iPod music player, for example, Apple Computer was able to charge a premium – and still commands a majority of the market. And Google has maintained a competitive edge by continuing to offer new products that build on its market-leading search engine, Youtie noted.

But innovation isn’t limited to products and processes. Companies can also compete using innovative marketing strategies and organizational approaches, she said. Aflac’s talking duck, for instance, provided a marketing innovation that helped the company stand out in the crowded health insurance market.

“The benefits to innovation are pretty much across the board for companies in quality of goods, variety of goods, market share, increased capacity, reduced time for product delivery, improved production flexibility – and reduced inputs of materials, labor and energy,” she noted.

But there are barriers to innovation that involve costs, capabilities and risks that may keep some companies away.

“It’s not just a matter of money,” Youtie said. “There are also issues with having qualified personnel to undertake the innovation, seeing the need in the marketplace, and overcoming a concern that innovative products cannot penetrate markets dominated by established companies.”

The relatively low priority placed on innovation doesn’t bode well for the state’s manufacturing community.

“Without more innovation in Georgia, manufacturers abroad will steadily out-compete us by having better products and more efficient processes,” Shapira warned. “This is a particular concern for Georgia’s base of small and mid-sized companies. While we have many excellent small firms in the state, we lack the large base of innovative, specialized and flexible small manufacturers seen in some other advanced industrial economies.”

Fewer than 8 percent of companies responding to the survey chose to compete on innovation. However, a much larger percentage applied innovation to products and processes that were part of other strategies. The survey found that nearly half of Georgia manufacturers had introduced a new or significantly improved product between 2002 and 2004. Branch facilities of companies headquartered outside the state had the highest rate of new product introduction.

Those new products can quickly become important. The average manufacturer introducing new-to-the-market products reported that those products accounted for nearly 20 percent of sales. Nearly 12 percent of innovators reported that their new products accounted for 50 percent or more of sales.

While innovation has traditionally been considered the business of large high-tech companies, Youtie noted that firms of all sizes – and in all technologies – can benefit. Traditional industries such as food processors can innovate in product packaging and marketing, while apparel and carpet firms might apply new finishes – perhaps based on nanotechnology – to differentiate their products.

Though small companies may lack the innovation resources and networks of larger competitors, they can often make decisions and implement changes more quickly, Youtie noted.

 

• Providing high quality products and services (53 percent);
• Offering the lowest price (20 percent)
• Adapting products to customer needs (14 percent);
• Providing quick delivery of products or services (12 percent);
• Including value-added services with products (10 percent);
• Developing product innovations and new technology (8 percent).

 

The percentage of companies competing on the basis of low cost declined from 27 percent in 2002 to 20 percent in 2004. Youtie and Shapira speculate that’s because many companies using that strategy have simply gone out of business.

“Low price will bring in more sales for a while, but it’s hard to keep that up,” Youtie noted. “You have to compete with companies in countries with even lower cost structures.”

For decision-makers, the study’s implications are clear. “Firms, industry associations, universities and state and local policymakers all need to be involved in new efforts to stimulate many more of our small, mid-sized and larger industrial enterprises to invest in the innovative strategies that will help them not only to survive, but also to grow,” Shapira said.

 

• 18 percent of Georgia manufacturers lost work to international outsourcing between 2002 and 2004. “Outsourcing is a real concern now, and I expect it will continue to affect Georgia manufacturers,” Shapira said. “Some of the firms that took part in our 2004 survey will not be in businesses in the state, or will have fewer employees, when we repeat our survey in 2007.”
• About 12 percent of manufacturers gained “insourcing” work from facilities elsewhere in the United States. While that shows Georgia continues to be competitive within the nation, it raises concern if that competitiveness stems only from low wages, Shapira cautioned.
• 48 percent of manufacturers identified concerns with human resources, up significantly from the 2002 study. While earlier surveys found concern about availability of skilled workers, more than a quarter of the 2005 respondents had problems finding workers with basic skills – up from just 11 percent in 2002. Despite the concern, however, 20 percent of the respondents made no investment in worker training.
• Nearly 40 percent of manufacturers reported lean manufacturing concerns, an increase from 2002 statistics.
• Nearly one in five companies reported concerns about energy costs and conservation – even prior to the recent storm-related energy cost increases.

 

The survey was sent to approximately 4,000 Georgia manufacturers that had 10 or more employees. Completed surveys from 648 manufacturers were weighted to reflect employment and industry distributions.

The Georgia Manufacturing Survey is conducted periodically to assess the condition of Georgia’s manufacturing industry. In addition to the authors already named, Georgia Tech School of Public Policy graduate students John Slanina, Jue Wang and Jingjang Zhang provided research assistance in the 2005 study.

The project was supported by the U.S. Department of Commerce’s NIST Manufacturing Extension Partnership, the U.S. Economic Development Administration, the Center for Paper and Business and Industry Studies at Georgia Tech, the Georgia Department of Labor, and the QuickStart Program of the Georgia Department of Technical and Adult Education.

Research News & Publications Office
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 100
Atlanta, Georgia 30308 USA

Media Relations Contact: John Toon (404-894-6986); E-mail: (john.toon@innovate.gatech.edu)

Technical Contacts: Jan Youtie (404-894-6111); E-mail: (jan.youtie@innovate.gatech.edu) or Phil Shapira (404-894-7735); E-mail: (ps25@prism.gatech.edu)

An economic development study conducted by the State of Connecticut ranks Georgia Tech among the nation’s elite institutions for generating economic development through university transfer of technology.

The study, released by Connecticut Governor M. Jodi Rell, has far-reaching implications for job growth, economic development and education. The study examined successful university-based technology transfer and commercialization initiatives throughout the United States.

The report – Accelerating Economic Development Through University Technology Transfer – notes several factors that help states position their universities as centers of innovation and business growth, including strong academic leadership and research capabilities, availability of early stage capital, commitment to and support of entrepreneurship programs, and the existence of infrastructure such as innovation centers, incubators and research parks.

Georgia Tech was one of nine universities selected as a case study for the report.

The report states that, “Georgia Tech is one of the strongest universities in terms of its relationship with and assistance to industries of all sizes and its strong role in statewide economic development.”

According to the report, “Perhaps what is most remarkable about the Georgia Tech model of technology-based economic development is how intertwined it is with state and local economic development initiatives. When one examines the economic development initiatives linked to the university, it is difficult to readily discern which initiatives are State of Georgia and which are Georgia Tech.

Moreover, the level of private sector involvement in helping shape and direct these initiatives is stronger than in almost any institution in the country. Georgia actively solicits industry input through advisory boards and councils at its colleges and research centers, and this has helped shape the institution’s curriculum, R&D focus, and service orientation as well as encourage direct industry involvement.”

The report acknowledges that there are certain issues that must be worked through by institutions in regards to balancing academic life with the corporate need for commercial confidentiality. It cites Massachusetts Institute of Technology, Stanford University, Carnegie Mellon University, and Georgia Tech as institutions that appear to have found a balance between achieving academic excellence and pursuing technology transfer and commercialization goals.

The report notes the importance of having early stage capital and a good incubator system. Sam Florance, director of the Gateways Program at Purdue University, agrees. “We have found that those firms (in Purdue’s Research Park’s incubators) that don’t receive support in the early stages face a long, hard road. For those firms that do receive management, resource and technical support, they have about a 90 percent chance of a five-year survival.”

The report praises the Advanced Technology Development Center (ATDC) as one of the premier incubators in the country, and the Office of Economic Development and Technology Ventures is also highlighted in the case study. “It is widely recognized as one of the strongest, if not the strongest, university-based economic development program in the nation,” the report said.

Other universities selected for case studies include: Carnegie Mellon University, Massachusetts Institute of Technology, Purdue University, Stanford University, University of California-San Diego, University of Pennsylvania, University of Wisconsin -Madison, and Washington University (St. Louis).

The study was conducted by Innovation Associates, of Reston, Va. on behalf of the Connecticut Technology Transfer and Commercialization Advisory Board of the Governor’s Competitiveness Council.

A little over three years ago, preparations for the International Formalwear Association’s annual trade show were underway in Las Vegas. Management and sales representatives from Elite Formal Designs Inc. arrived a day early to prepare displays of their latest designs in cummerbunds, ties, vests and other tuxedo accessories manufactured at their Davie, Fla., factory.

The date was Sept. 11, 2001.

The ripple effects following the terrorist attacks in New York and Washington were felt in Nevada, where the suspension of air travel forced cancellation of the trade show. Also grounded were the hopes for a banner sales year at Elite, putting the company’s very survival in jeopardy.

“The IFA show is where we present our new line for the coming year to our customers and where most of our orders for the coming year are generated,” explains company treasurer, Jo Knorr.

Elite Formal Accessories is a family-operated business founded in 1985 by Jerry Parness, who serves as president. The company specializes in the design, manufacturing, marketing and distribution of tuxedo accessories under the Bill Blass, Jean Yves and Bracci labels. Elite’s accessories are sold to retail outlets, primarily men’s merchandisers and formalwear rental shops.

Without the trade show mainstay in 2001, sales fell by more than 40 percent. On top of that, “we had just expanded our plant because our sales had been growing so much,” Knorr adds. “We had to adjust.”

Fallout from the 9/11 attacks also made the company more vulnerable to pressure from the recession and “the effects of imports that have been devastating the apparel industry,” says Parness.

Once back in Florida, Brian Parness, the founder’s son and Elite’s chief financial officer at the time, began hunting on the Internet for programs that could help them weather the impending difficulties.

His search turned up the Southeastern Trade Adjustment Assistance Center (SETAAC), a non-profit organization based at Georgia Tech’s Enterprise Innovation Institute.

SETAAC provides technical and management assistance in manufacturing, sales, marketing, and information systems to help companies improve their productivity and competitiveness. Drawing upon funds available through the U.S. Department of Commerce, SETAAC can provide 50 percent of the cost of implementing improvements.

Once Elite’s eligibility for assistance was certified, SETAAC staff prepared a comprehensive company profile that identified Elite’s competitive strengths and weaknesses, and included information about the company’s sales and marketing, financial posture and productivity.

More to the point, the diagnostic report outlined several projects to boost the company’s bottom line. Elite’s management selected four of the ideas for implementation.

“For each project, we provided the names of three or so qualified consultants who could perform the actual implementation work,” says Mark Hannah, SETAAC project manager. “Elite would interview each of the prospects and pick the one they’d be most comfortable working with.”

Given the imperative of introducing new designs to the marketplace, the first order of business was a new-product photograph shoot for Elite’s catalog. SETAAC funding was the most important aid in producing this bread-and-butter sales tool because “it meant that we didn’t have to pull money from somewhere else in the company to do it,” Knorr says.

The next project involved an upgrade of Elite’s materials resource planning (MRP) software to reflect the availability at any given moment of inventory items for sale, as opposed to items still technically on site but already sold and packed for shipment.

The adoption of lean manufacturing methods was another SETAAC recommendation embraced and implemented by Elite’s management. The factory floor layout was changed so products move more efficiently through the manufacturing process, leading to a 2.7 percent reduction in labor costs.

“We’ve also eliminated a lot of bottlenecks,” Knorr says, “but when they do occur, we’re able to easily identify and remove them.”

In the past, during periods of peak demand, Elite outsourced work it could not handle alone. The SETAAC report concluded that outsourcing is more expensive than in-house production. The efficiencies and increased capability gained from lean manufacturing techniques have allowed Elite to virtually eliminate its outsourcing.

Better customer service is another benefit, according to Knorr. Thanks to both the MRP software upgrade and streamlined production methods, the company can ship a larger number of complete orders and in less time than before, she notes.

The most recent and final project involved implementation of an electronic data interface (EDI), which allows customers to automatically order and track merchandise online, a common and often preferred practice in the retail business. The system opens up new business opportunities for Elite.

“This is a whole different area we’re going into,” says Knorr, “and it’s part of the reason sales have jumped about 20 percent higher this year than last.”

This past season Elite posted its first profit in three years, and the coming year looks promising, Parness notes. “There’s still room for improvement, and we’re looking forward to improving our areas of production, EDI, advertising and marketing.”

Jon Goldman, director of marketing, attributes the company’s rebound to the ways in which Georgia Tech’s technical assistance have complemented the company’s commitment to personalized service.

“The members of our sales team travel the country visiting our customers individually,” he notes. “So while we’ve adjusted some of our processes technologically, we’ve also kept the character, honesty and one-on-one rapport that characterizes our sales approach. It has blended well with the help Georgia Tech provided.”

Knorr adds: “We’ve put in a lot of hard work and a lot of sacrifice to get us where we are, but SETAAC and Georgia Tech deserve a lot of the credit too. Quite simply, we could not have done it without them.”

For more information about Georgia Tech assistance in trade adjustment, contact Mark Hannah at 404-894-4407 or (mark.hannah@innovate.gatech.edu).

Research News & Publications Office
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 100
Atlanta, Georgia 30308 USA

 

Media Relations Contact: John Toon (404-894-6986); E-mail: (john.toon@innovate.gatech.edu).

Technical Contact: Mark Hannah (404-894-4407); E-mail: (mark.hannah@innovate.gatech.edu).