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TechTrends e-Newsletter I May 2004 Page 2 of 7 INFORMATION The secret to the VSM's power is its comprehensiveness; managers and floor leaders don't always see how their unit's best practices affect the value-added—or • wasteful—processes of another unit. The map visually represents process or information bottlenecks that ultimately cut into value-added time (i.e., time that translates into money from the customer). For example, new efficiencies on the factory floor may reduce a machine part's cycle time to 30 seconds, leading to a pile-up of inventory in the warehouse. A value stream map helps everyone see that improved profitability doesn't necessarily lie in getting from Point A to B faster, but in shortening the overall time it takes to turn raw materials into cash. It can also help you identify what industry-standard practices work for your business, and which of them don't. For these reasons, the VSM is the essential starting point for any manufacturer looking for opportunities to apply lean concepts. Industry Week reports that only 5 percent of U.S. manufacturers are truly lean, due in part to a lack of comprehensive understanding of how precious resources—ideas, time, materials—are distributed, start to finish. At the same time, lean principles have never been easier to adopt, thanks to rigorous training programs and consulting services that emphasize the value of the VSM to your company's growth goals. To learn more about value stream mapping and lean principles, read the "Lean Dreams" feature in the Fall/Winter 2003 issue of Minnesota Technology , or contact MTI's team of Lean Enterprise consultants at www.minnesotatechnology.org/business/lean.asp , or call 612-373-2900, or 800- 325-3073. • y [Tech Notes Technology business news from around Minnesota. The Minnesota Agricultural and Economic Development Board (MAEDB) wants to remind Minnesota businesses of the Small Business Development Loan Program , which will offer bond-backed small-business loans to Minnesota companies. Ranging from $1 million to $5 million, the loans will fund the acquisition of land, buildings, and equipment, as well as construction and renovation for manufacturing and industrial businesses with fewer than 500 employees. The fixed market-rate loans are made possible through the issuance of industrial development bonds backed by a state-funded reserve. Applications are accepted year-round. For more information, contact the Minnesota Department of Employment and Economic Development's (DEED's) Office of Business Finance at 651-297- 1391, or 800-657-3858. Fairmont's Nortech Systems , a communications equipment manufacturer, is building 4,000 intercom systems for upgraded Humvees that the U.S. Army will send to its troops in Iraq. The systems will replace traditional radio units with headsets designed to facilitate communications between vehicles. The Nortech intercom kits will be included in the "up-armored" Humvees, which also feature improved steel reinforcements and bullet-proof glass. According to the company, Nortech received the order for the kits in March. It is working as a subcontractor to Northrop Grumman ; the deal is expected to generate around $4 million in • revenue for Nortech. In 2003, exports of Minnesota's manufactured goods rose 9.8 percent to a http://www.minnesotatechnology.org/publications/techtrends/2004/May/printVersion.asp 5/17/2004