726 Exchange StreetSuite 812Buffalo, NY 14210insyte-consulting.com
INSIGHTS
SPRING 2013 INNOVATE
COMPANY STI-CO Industries, Inc. specializes in
the design and manufacture of covert, tactical and
public safety antenna systems. The majority of STI-
CO’s customers are local, state and federal govern-
ment agencies within the continental U.S., Canada
and Mexico. They also partner with major high-
profile OEM customers.
SITUATION STI-CO’s ability to effectively service its
customer base required improvement. Lead times
were generally two to three weeks in a market that
needed quick response, and on-time delivery aver-
aged less than 50 percent. The company’s inventory
turns were low and about three turns annually.
Management believed that a lean manufactur-
ing approach could help address and resolve the
operational issues. By innovating these processes,
the company could better position itself to inno-
vate their products.
SOLUTION The first step was to introduce all em-
ployees to the principles of lean manufacturing.
A full-day workshop provided basic knowledge in
lean manufacturing methodology, and participants
learned real-work application.
Insyte also worked with STI-CO to complete a
high-level value stream map of the entire organiza-
tion for both current and desired future states. This
mapping exercise provided a comprehensive imple-
mentation plan utilizing the appropriate tools of
lean manufacturing for each of their major product
lines. Cross-functional teams worked to organize
and understand new processes and practices; they
then introduced and implemented these concepts
into key production areas.
In addition, STI-CO and Insyte began the process
of building and implementing an ISO 9001:2000
compliant quality system, which was reviewed
with the entire STI-CO team, further establishing a
foundation for understanding and progress.
CASE STUDY: STI-CO Industries
KYLE SWIAT
“The Insyte team helped us understand our customers and helped us bring new products to the market.”
–Kyle Swiat, Vice-President, STI-CO Industries, Inc.Increase in net operating profit
Increased inventory turns from 3 to 8 annually
Sales increase
Improvement in on-time delivery
Reduction in lead times
VISIT INSYTE-CONSULTING.COM TO VIEW THE VIDEO CASE STUDY
WELCOME TO THE FIRST EDITION of
our redesigned newsletter! As part of
Insyte’s 30th anniversary year, we have
been making a number of changes,
including debuting a new website,
building our social media presence,
and the reveal of our new tagline
(“Innovation. Growth. Profit.”) to better
reflect who we are. So I would like to
take this opportunity to describe what
we do, why we do it and how we do it.
Insyte is unique in focusing our con-
sulting services on manufacturing com-
panies in WNY. Manufacturing is still
the backbone of our regional economy,
leading the way in annual gross domestic
product for our area. Manufacturing is
the third-largest employer in WNY, pro-
viding more than 60,000 direct jobs and,
thanks to the multiplier effect, account-
ing for an estimated 30,000 jobs that sup-
port manufacturing.
We design our services specifically for
the needs of our manufacturing clients.
Our innovation services help manufac-
turers with everything from identifying
and incorporating new technologies, to
installing a systematic and repeatable
innovation process to create new prod-
ucts, new processes and/or new business
models (see our article in this newsletter
about innovation). Our growth services
are aimed at increasing manufacturers’
top line revenue by identifying new
markets and customers, increasing ex-
ports and improving related processes
like quoting and distribution. In the
final analysis, manufacturers want in-
creased profits. We can help by optimiz-
ing business processes to drop more dol-
lars to the bottom line.
Many of our clients think of Insyte
as their business doctor. Our dedicated
and experienced staff partners with you
to keep your business healthy, even call-
ing in specialists, when needed, from
Insyte’s network of partners to address
your unique needs.
Insyte also supports entrepreneurial
technology start-ups. We believe that
entrepreneurship and technology are
essential to WNY’s future success. In-
syte administers the WNY Venture As-
sociation and the Buffalo Angels; we
are the longtime Regional Specialist for
the Small Business Innovation Research
grants; and we helped found and run
the WNY Business Development Fund,
which has made more than $1 million in
seed investments in our region. Insyte
participates in the Bright Buffalo Niagara
Venture Forum and the Panasci business
plan competition at UB.
As a non-profit, we strive to do all
this in support of our mission, “…to
transform our region by stimulating the
growth and creation of dynamic compa-
nies to provide a superior standard of
living for our residents.”
We know that is a big job, but that
won’t keep us from continuing to chip
away at it, just as we have for the last 30
years.
PRESIDENT’S MESSAGE BY BEN RAND
THE OTHER BUFFALO BILLION Visit theotherbuffalobillion.com
INSYTE IS PROUD TO ANNOUNCE that we have surpassed $1 billion in client
impact in WNY for the period from 2000 to 2012.
What does “client impact” mean? Simply put, it is the quantifiable benefit
of the project work that WNY manufacturers have done with Insyte. These
figures are particularly meaningful because they are not our own guesstimates,
but come from our clients through an independent survey process conducted
on behalf of the federal government. We receive a portion of our funding
through the U.S. Department of Commerce (USDoC) Manufacturing Extension
Partnership program. To ensure that these funds are put to good use, the USDoC
hires an independent, third-party survey company to contact each of our clients
to quantify any benefits that client realized from their project(s) with Insyte.
In other words, the government wants to make sure they are making a good
investment.
Governor Cuomo has been widely praised in WNY for his pledge to invest a
$1 billion here for economic development. Some comparisons may be helpful to
appreciate the size and significance of these client impact figures:
Those comparisons may be interesting, but this $1 billion milestone is
significant to us for other reasons.
First and foremost, it indicates that we are fulfilling our mission and providing
value for our clients. They report an average of $1.37 million in impact from
each project with Insyte, which equates to an average return on investment
of more than $37 to $1. We are also very aware that jobs saved or created is
a measure of the human impact of our work, especially during the recent
recession. An important side benefit of keeping people employed is that they
pay taxes and purchase goods and services. New York State estimates that each
of the jobs we helped to create or save is worth a little more than $48,000 in
annual compensation, which would generate approximately $3,000 in income
taxes. Using that very rough estimate, 7,207 jobs would add more than $20
million a year to New York’s coffers for any number of uses: debt reduction,
school aid, Superstorm Sandy relief, infrastructure repairs, etc.
Many of us work hard for years with only a vague sense of the impact we
are having on our organizations and our communities. Thanks to the USDoC’s
impact surveys, we get a precise estimate every quarter of how Insyte is doing
in dollars and cents. Quarter after quarter, year after year, decade after decade
those numbers begin to add up, even for a little organization like ours (albeit the
largest management consultancy in WNY). So we will keep doing what we have
been doing, working one project, one company at a time to add value, to make
a difference and to strengthen WNY.
• $1,000,000,000isgreaterthanFirstNiagara’s annual revenue
• 7,207jobsismorethanthenumberoftotal employment of the University at Buffalo
• 7,207jobsisgreaterthanthetopemployerin Allegany, Cattaraugus, Chautauqua and Niagara Counties combined
• $1,000,000,000equalsabout2.5%ofannual gross domestic product (GDP) for the Buffalo- NiagaraMetropolitanAreaandabout15%ofits annual manufacturing GDP
• $147millionincapitalinvestmentsismore than the WNY Regional Economic Development Council’sinitialawardof$100millionfromNew York State in 2011
• 7,207jobsequatestomorethan1outofevery 10manufacturingjobsinWNY
• $147millionisgreaterthanthecombined grants of the Oishei Foundation, the Community Foundation for Greater Buffalo, the Gebbie Foundation, the Sheldon Foundation and the other top 30 foundations in WNY in 2011
WHEN JIM BURKE was ushered into the
office of Robert Wood Johnson, the leg-
endary chairman of Johnson & Johnson,
he was sure he was about to be fired.
As J&J’s product director, Burke had
introduced several over-the-counter medi-
cines for children and they had all failed.
But to his surprise, the chairman thanked
him!
“We won’t grow unless you take risks,”
said Johnson. “Don’t make that mis-
take again, but please be sure you make
others.”
Burke went on to become Chairman
& CEO of J&J, successfully guided the
company through its Tylenol troubles of
the 1980s and was named one of Fortune
Magazine’s 10 Greatest CEOs of All Time.
According to Burke, “any successful
company is riddled with failures. There’s
just no other way to do it.” His opinion is
shared by other great business innovators
and entrepreneurs. Thomas Edison boast-
ed, “I failed my way to success.”
Thomas Watson, Jr., who guided IBM
into mainframe computers, once said “the
way to succeed is to double your rate of
failure.”
Obviously, failing itself is not the goal,
but it is an inevitable aspect of experi-
mentation and innovation. Because the
vast majority of new ideas fail, you sim-
ply cannot innovate without failing. The
real key is to fail fast and fail cheap, keep-
ing your investment of time, money and
other resources to the absolute minimum.
The faster you identify and eliminate the
flawed ideas, the sooner the best ideas will
emerge. That is what Watson meant by
“double your rate of failure.”
Our Innovation Engineering methodol-
ogy emphasizes this “fail fast, fail cheap”
approach by focusing on what we call
“death threats”—those aspects of a new
idea that are most likely to kill it. Any new
idea will have multiple death threats, so an
integral part of conceiving a new idea is
identifying all the major ones. Examples
of a death threat to a new product might
include a performance issue, the customer
value proposition, or intellectual property
rights. Once these threats are identified,
the innovation team moves to construct
a test or experiment that will quickly ad-
dress each of the death threats that have
been identified. In this example, you
might build a working prototype to test
the technical performance question(s). Or
survey your most trusted customers to
gauge the value proposition. Or do a pat-
ent search to answer the intellectual prop-
erty concern. As a rule of thumb, Innova-
tion Engineering looks to address at least
one death threat per week in these Rapid
Cycles of Learning.
Rapid Cycles of Learning will rarely
provide 100 percent certainty regarding a
death threat, nor are they meant to. The
objective is to learn enough to confidently
move forward while lowering your risk.
For example, you may find a patent that
would apply to your idea. You now have
several options including: adjusting your
technical concept for the product to avoid
the patent; investigating the potential to
challenge the patent; explore licensing the
patent; or killing the idea completely and
moving to your next innovation opportu-
nity. Only when all the death threats have
been resolved is an opportunity ready to
move into development. Compare this to
the all-too-common case of a company
without a systematic innovation process
that invests large amounts in engineering
and design only to discover this patent
problem at the eleventh hour, if at all.
The most important decision of all is
to start. As hockey great Wayne Gretzky
once said, “You miss 100 percent of the
shots you never take.”
When was the last time your company
took a shot at innovation?
INNOVATION: Fail Fast, Fail Cheap“You miss 100 percent of the shots you never take.”
–Wayne Gretzky
EVENTSRECENT PROJECTS
BUFFALO NIAGARA PDMA - SPRING INNOVATION CHAPTER MEETING
PDMA.ORG
THURS MAY 9– UNTIL –
5:30P.M.
8:00P.M.
WNY VENTURE ASSOCIATION - COMPANY PRESENTATION FORUM
WNYVENTURE.COM
WED MAY 22– UNTIL –
7:30A.M.
9:00A.M.
2013 MANUFACTURING AWARDS
BIZJOURNALS.COM/BUFFALO/EVENT
TUES MAY 14– UNTIL –
7:30A.M.
9:30A.M.
A SAMPLE OF PROJECTS THAT INSYTE
HAS RECENTLY CONCLUDED WITH
WESTERN NEW YORK COMPANIES:
• Developed an equipment layout to
support an Erie County printing com-
pany’s consolidation of three separate
facilities into a new larger facility, re-
sulting in capacity for growth and im-
proved workflow.
• HelpedaChautauquaCountymanu-
facturing company identify and en-
gage U.S.-based component suppliers
to reduce manufacturing and logistics
costs and improve service levels.
• Used Lean Manufacturing method-
ologies and tools with an Erie County
equipment manufacturer to improve
its production process workflow, re-
duce scheduling inefficiencies and in-
crease product throughput.
• Guided a Buffalo food products
manufacturer to develop a sales and
marketing plan to increase sales of its
branded products.
• Helpedamaterialsmanufacturer in
Cattaraugus County develop market
positioning and content for its market-
ing materials and website.
• Facilitateddevelopmentofa strate-
gic plan, including strategies, action
plans and metrics, to help a South-
towns manufacturing company posi-
tion itself for significant growth.
• Worked with a Niagara County
equipment manufacturer to evaluate
and improve internal business process-
es including order processing, invoic-
ing, and materials management allow-
ing internal resources to focus more on
business growth.
• Developed and implemented an
ISO9001:2008 compliant quality man-
agement system with a Buffalo box
manufacturer.
• Provided Design of Experiments
training to a Tonawanda industrial
products company to provide the
capability to reduce errors and asso-
ciated costs by applying appropriate
statistical methods.
• Provided Lean Six Sigma training
and project implementation assistance
to a Buffalo printing technology com-
pany to reduce variation and defects in
manufacturing and support processes.
INSYTE-CONSULTING.COM