Roy Young hosted his daughter Debbie's company in his Georgia horse barn five years ago. Now he serves as the company's director of new product development.
Indeed, MEP's federal budget was a paltry $106 million yearly. But Carr grew MEP to 75 centers and 400 satellite offices in just three years, a full year ahead of schedule. His larger goal was to create a network of community experts who could help small manufacturers get the kind of advice they desperately needed to survive and prosper, but that was often too elusive or too costly. "The real treasure of what we're accomplishing is an integrated system of centers, not just dots across the map," Carr insists. "We recognized early on that it's easy to wind up with a lot of independent fiefdoms that run and operate without very much leveraging of one another's resources."
Traditionally, small manufacturing companies have been an isolated bunch. Many are insular family businesses; others are run by engineers or inventors who, while talented in their own areas of expertise, remain unaware of new technology and management techniques; still others are situated in rural areas with little access to peers. When MEP first hit the street, recalls Carr, its stated mission was to bring those manufacturers NIST-developed technology. "We had advanced technology in federal labs and thought we could push that into small firms," says Carr. "But we learned early on that these companies were several generations behind in technology." Indeed, while NIST was offering bleeding-edge technology, Carr found himself dealing with small companies that didn't even have a computer. Sensing a disconnect, he quickly backpedaled. MEP centers would be market-driven, helping small manufacturers get to the next level -- regardless of their starting point.
MEP's reach is still growing. Some 360,000 small manufacturers now operate in the United States, and more than 95% of them have all their facilities within this country's borders. Carr estimates that MEP serves about 7% to 8% of those companies annually. He'd like to increase that to 10%. But the percentages aren't nearly as important as the measurable results of MEP's involvement. For the last three quarters of 1999, the most recent period for which data are available, nearly 3,000 manufacturers reported that as a direct result of MEP's assistance, they were able to retain sales or increase them by a total of $1.4 billion. During the same period, those companies reported, the program helped them achieve total cost savings of $364 million. MEP's assistance ranged from quick advice on purchasing a new inventory-control system to redesigning an entire manufacturing plant. Much of it was offered at a fraction of what the manufacturers would have paid outside the MEP system.
Pipe Dream
To understand some of the ways MEP helps U.S. manufacturers, consider Kenway Corp., of Augusta, Maine, a $3.5-million maker of industrial pipes, tanks, and ventilation systems. A year and a half ago, Kenway CEO Kenneth Priest took a trip to Virginia that was destined to transform his second-generation family business.
Priest was searching for ways his company could gain a competitive advantage and add value to its products. He considered embedding Kenway's pipes with electronic sensors that would alert customers to leaks in the pipes, some of which were located in remote areas. Priest had a long-standing relationship with both the Maine MEP office and its then-project manager, Tobin McGregor. McGregor hooked up Priest with a visiting NIST scientist named Richard Parnass, who was looking for ways to bring technology from NIST's laboratories to companies like Kenway. In fact, Parnass knew of a Virginia Tech spin-off in Blacksburg, Va., called Luna Innovations, that had received federal funding to develop fiber-optic sensors. Perhaps, Parnass suggested, Luna's sensors could be used in Kenway's pipes.
"People realize that because we have control over our supply, they don't have to invest in inventory. If you're buying outside the country, you're buying container loads that you have to pay for up front. And who knows what's going to happen next?"
--Debbie Young
Priest was intrigued, and MEP's McGregor got cracking. Within a week McGregor had scheduled additional meetings at NIST and had done due diligence on Luna Innovations. Soon after, McGregor and Priest flew to Washington to meet with NIST, then drove five hours to visit Luna. "I had cold-called the company and said, 'Here's the deal," recalls McGregor. "So by the time we got there, they were ready to talk."
Later, when a strategic alliance between Kenway and Luna seemed imminent, McGregor suggested that he and Priest make a quick stop back in Washington to meet with a friend of McGregor's who was a patent lawyer. The friend helped them complete a patent search within a few weeks and file a patent application for Kenway's "smart pipes" -- a double-walled pipe with fiber-optic sensors -- just six months later.
Meanwhile, back in Maine, Nicholas Karvonides, the local MEP's vice-president for technology transfer and international development, used his network connections to find a midwestern consulting firm that specialized in market research for the chemical industry. "Others in the MEP system had used them," says Karvonides. "We have a pretty robust Rolodex." The firm, Taratec Corp., based in Columbus, Ohio, spent three months researching the market for smart pipes and came back with a thumbs-up report: stricter environmental regulations on heavy industry were increasing demand for sophisticated pipes like Kenway's. MEP also steered Priest toward two state agencies that ultimately gave him the funding for half of the $24,000 he needed to pay the market-research firm, file patents, and cover MEP's consulting fees.
