The 2012 HR Awards — Winner List


AdvoCare Group

Megan Busovicki, human resource manager

Megan Busovicki has spent the last six of her nine years in the HR industry working for AdvoCare Group. As human resource manager — and the sole human resource staff member at the company — she has led a number of initiatives that have enhanced the quality of AdvoCare Group’s workplace, impacted business success and attracted top talent, playing an integral role in the company’s overall growth.

One of her recent initiatives is leading AdvoCare Group University — an internal professional and personal enrichment program — by chairing an AdvoCare Board of Education committee. She is designing a core curriculum based on direct feedback from departments and individual employees and implementing a companywide policy for continuing education, ensuring employees have access to both professional and personal enrichment options.

Busovicki also co-chairs the Quality and Assurance Committee, the Disaster Recovery and Business Continuance Planning Committee and is the chairperson for the AdvoCare Group Wellness Committee. She supports and coordinates various charitable initiatives and has developed policies to create an adaptable and flexible workplace for employees seeking to work either in or outside of the office.


Child Guidance & Family Solutions

Lyn L. Gwinn, manager of human resources

Lyn L. Gwinn has worked as manager of human resources for Child Guidance & Family Solutions, which serves Summit County, since 1991. Her work on behalf of the nonprofit organization contributed to it being distinguished among the “50 Best Non-Profit Organizations to Work For” by The NonProfit Times two years in a row. She’s also completed four North Coast 99 award submissions for CGFS, earning the organization a spot among the 99 best employers in Northeast Ohio for top talent three of the four times.

With more than 20 years in the field — including previous work for Andrews, Bartlett & Associates Inc. and BFGoodrich — Gwinn has proven experience in administering complex benefit programs, designing new benefit packages, suggesting alternative funding arrangements and clearly maximizing benefits to employees by communicating various health, life, pension, 40l(k) and dependent/health care options.

She received her education from the University of Akron.


Cleveland Foundation

Monica Brown, director of human resources

Monica Brown is the director of human resources for the Cleveland Foundation, where she has worked for the last six years. She has previous experience serving as the director of human resources for the Western Reserve Historical Society, as well as experience providing human resources consulting to a number of other nonprofit organizations including the Beck Center for the Arts, the Literacy Cooperative, the Fund for Our Economic Future and Neighborhood Connections.

Brown is a certified senior professional in human resources and serves as a mentor to junior-level human resources professionals through the Cleveland Society for Human Resources Management.

She earned her bachelor’s degree from Kent State University and her master’s degree in human resources and labor relations from Cleveland State University.


Cleveland State University

Vickie Coleman Gallagher, Ph.D., assistant professor and CSU SHRM student chapter adviser

Vickie Coleman Gallagher, Ph.D., returned to her alma mater, Cleveland State University, in 2010 as an assistant professor and soon stepped up her engagement with the school. Volunteering in 2011 to serve as the CSU Society of Human Research Management student chapter adviser, Coleman Gallagher has helped the organization overcome challenges and achieve many goals.

She kept the organization running smoothly through a period of transition: coordinating activities with an entirely new student officer board, a new Cleveland Society of Human Resource Management liaison to the student chapter and staffing changes at the SHRM national office.

But her efforts didn’t stop at merely maintaining the organization. Last year, Coleman Gallagher was a featured presenter in a Saturday development workshop for HR students held at CSU and guided student officers in planning an evening panel presentation that showcased successful HR alumni. She also participated in both Cleveland SHRM student leadership workshops and coordinated the spring workshop hosted by CSU, and she has been an active member of the Cleveland SHRM Education Committee.


Cleveland State University

Olga Nagdaseva, master’s of business administration student

Olga Nagdaseva is pursuing an MBA at Cleveland State University, from which she has already earner a bachelor’s degree in management and labor relations.

Nagdaseva demonstrates a commitment to academic excellence, consistently being selected as an honor student. She was inducted by CSU’s Monte Ahuja College of Business as a member of Beta Gamma Sigma, the Association to Advance Collegiate Schools of Business honor society.

The Monte Ahuja College of Business also selected her to represent the student body at the its Corporate Roundtable, as well as at the Net Impact National Conference, Crain’s Cleveland Business Emerald Awards, Entrepreneurship Immersion Week sponsored by the Entrepreneurship Education Consortium and to serve as a student delegate to participate in the final stage of the AACSB accreditation process.

Additionally, Nagdaseva served as the president of Net Impact and secretary of Society for Human Resource Management — two prominent CSU student organizations. She maintains affiliations with SHRM, Cleveland SHRM, Beta Gamma Sigma International Honor Society, APICS, Net Impact, the Institute for Supply Chain Management and the Purchasing Management Association of Cleveland.


The Lubrizol Corp.

Tom Tomasula Jr., director of global staffing and domestic relations

Tom Tomasula Jr. serves as the director of global staffing and domestic relations for The Lubrizol Corp., a specialty chemicals manufacturer. In this position, he leads the corporate recruiting and staffing team to conduct and complete fulfillment of open positions with top performer, focusing on implementing talent acquisition and talent management strategy for the corporation.

Among his many accomplishments at Lubrizol he provided strategic recruiting consulting and training solutions for clients up to $1 billion in revenue, managed the recruiting function at a national, $700 million organization, led the human resources function for a 320-person multioffice division, and performed the budgeting and analyzed the financial results for a $65 million division.

Prior to Lubrizol, Tomasula held talent-acquisition-related positions with Ratliff & Taylor, Employers Resource Council, Cole National and Cole Vision, among others. He received an MBA in accounting from the University of Michigan and a BBA in accounting and philosophy from the University of Notre Dame.


Main Street Gourmet

Kelly Loebick-Frascella, director of human resources

Kelly Loebick-Frascella is the director of human resources at local bakery manufacturer Main Street Gourmet. She began her career in 1999 when she created and developed the human resources department for the company. Her efforts have continued to evolve, with her focus now directed toward leadership development, diversity, safety and wellness.

Last year, the company’s efforts in workplace wellness earned it the first annual “[email protected]” Grand Prize Award for small- to midsized companies from the Cleveland Museum of Natural History. Employee programs include a healthy lunch program, guest speakers on fitness, a bicycle program, a weekend hiking club, a lunchtime walking club, an annual health fair that includes individual health assessments, free smoking cessation seminars and free employee immunization clinics.

Loebick-Frascella earned her bachelor’s degree in psychology from the University of Akron and is currently enrolled in their MBA program.


Nordson Corp.

Gerard “Jerry” J. Torma, director of human resources global support

Gerard “Jerry” J. Torma is the director of human resources global support for dispensing equipment company Nordson Corp. Serving with the company for nearly 30 years, he develops and directs effective human resources global support programs that enable Nordson to achieve business objectives on a worldwide scale.

In addition to his efforts with Nordson, Torma is affiliated with a variety of organizations including the board of the Northern Ohio International Business Network, the Cleveland Council on World Affairs, the U.S. National Foreign Trade Council, the Council on Foreign Relations, the American Society for International Human Resources Management, the Lorain County Community College Business Advisory Council and the Cleveland State University International Business Advisory Council.

He earned his bachelor’s degree from the University of Akron and an MBA from Baldwin-Wallace University.


Petrus HR Solutions LLC

Amy Petrus, human resources consultant

Amy Petrus is a human resources consultant with Petrus HR Solutions LLC, with more than 20 years of experience in the field. She manages HR-related projects and programs serving a diverse client base, ranging from technology, manufacturing, service and nonprofit organizations.

Petrus’ areas of expertise include compensation, performance management, policy and procedure development, training, executive/management coaching, staffing assistance, and employee relations and communications.

She has more than 10 years experience in consulting roles at KPMG and Employers Resource Council and serves on the Human Resources Committee of the Board of The Susan G. Komen Northeast Ohio Affiliate. Petrus is also a member of the Northeast Ohio Human Resources Planning Society.

She earned her master’s degree in human resources and labor relations from Cleveland State University and holds the designations of certified compensation professional through World at Work and senior professional in human resources through the Society for Human Resource Management.


PolyOne Corp.

Jeffrey A. Hudson, manager of training and organizational development

Jeffrey A. Hudson is the manager of training and organizational development for specialty polymer materials, services and solutions provider PolyOne Corp. Serving in various positions in his eight years with the company, he currently has global responsibility for training and development, performance management, career planning, employee engagement, and other organizational development functions.

Hudson is also a member of the United Way committee at PolyOne. He continues this spirit of community outside of the company as a volunteer for the United Way of Lorain County’s annual “Week of Caring” projects. Additionally, he is a member of the Society for Human Resources Management and an alumnus of Cleveland Bridge Builders.

Prior to working at PolyOne, Hudson held roles in organizational development and change management leadership at American Greetings and Accenture. He earned his bachelor’s degree in business and a master’s degree in industrial relations from West Virginia University.


Skoda Minotti

Christa Lenko, director of employee development

Christa Lenko has served as director of employee development for CPA, business and financial advisory firm Skoda Minotti since 2005. She is responsible for managing, supporting and assessing the company’s organizational needs to foster an environment that maximizes personal and professional growth.

To this end, Lenko has applied her more than 10 years of progressive human resources experience to design and implement professional development programs, manage recruiting activities, and develop and maintain talent management and performance improvement programs.

Prior to working for Skoda Minotti, she served as the manager of human resource strategies at Thompson Hine LLP, HR generalist at CTI Molecular Imaging and HR generalist at LexisNexis. She earned her bachelor’s degree in psychology from the Franciscan University of Steubenville and her master’s degree in organizational management from the University of Phoenix.


Western Reserve Area Agency on Aging

Carol Burhenne, director of human resources

Carol Burhenne is the director of human resources at Western Reserve Area Agency on Aging. Upon joining the company in 2011, she set out to restructure the HR department, implementing a new benefit plans for health insurance as well as more affordable ancillary benefits through a joint effort with Northeast Ohio Area Agency on Aging.

Burhenne completed her master’s degree in clinical counseling at John Carroll University during her first six months at WRAAA and became a licensed professional counselor through the state of Ohio. She received certification in trauma-focused therapy and is a certified by the state of Ohio as a chemical dependency counseling assistant. This education and training enables her to better assist employees who may experience work and life challenges.

In addition to her work to improve WRAAA from the inside, Burhenne strives to make a difference in her community. She participates on the HR Committee at the Ronald McDonald House of Cleveland Inc. and as a “wish granter” and PR liaison for Make-A-Wish of Ohio, Kentucky and Indiana.

The HR Awards

The HR Awards recognize Northeast Ohio HR professionals who have demonstrated excellence in the field of human resource management. Their achievements and unique skills show they are dedicated to improving themselves and their organizations. The awards honor all levels of HR practitioners, from individuals in local SHRM student chapters to HR executives.

The awards are co-hosted by ERC and CSHRM, two of the area’s leading organizations in the HR industry. Each award category is judged by an independent panel of distinguished representatives from the local HR community.

The following is a letter from  SueAnn Naso, the president of CSHRM and Staffing Solutions Enterprises, and Patrick Perry, the president of ERC:

Congratulations. It is a great honor for ERC and CSHRM to host and honor the human resources leadership in our region. Our inaugural “class” of winners and finalists reads like a “who’s who” of professionals who continue to make a difference through sound, creative and proactive HR management. We are also pleased to recognize the leading faculty adviser and student participant for Student SHRM Chapters in our region who are developing the next generation of HR leadership.

The HR Awards will be an annual event where individual professional achievement in HR will be recognized. We appreciate the tremendous response received in this first year of the program and look forward to ERC and CSHRM working together to showcase individuals making a big difference in their profession and respective organizations.

Check out our winners’ information in this issue and also at They are truly leading by example and our hats are off to them for making a positive impact on others. There is no greater recognition than with your peers and that is certainly the case with this year’s HR Awards winners and finalists.

Last but not least, thank you to The HR Awards committee, judges and, of course, our sponsors. Their hard work and support was critical in launching this regional initiative.

Check out the HR Awards Finalists

Check out the HR Awards Winner List

Endless Referrals: The Go-Giver Way

On November 15, spend the morning with world renowned speaker and author Bob Burg at the special event, “Endless Referrals: The Go-Giver Way,” and you’ll learn how to quickly and easily build a prospecting and referral “machine” to continuously create more sales than you ever dreamed possible.

If you’ve ever asked yourself the question, “Who do I talk to next, now that my list of prospects has run out?” then this program is for you. Combining humor, entertainment, and a whole lot of “nuts & bolts” information, bestselling author and internationally-acclaimed speaker Bob Burg shares principle-based methods that will accelerate your ability to meet and connect with new people and build the trust that is essential in life and business!

During this powerful program you will also learn the philosophy at the heart of The Go-Giver embraced by so many of today’s top producers and leaders, including the principle behind Law #3: The Law of Influence; specifically how to apply this principle in order to cultivate a network of endless referral business. In fact, by the time you leave this event you will have a complete action plan ready for immediate application and success.

For more information and to register, please click here.

Before that, though, check out this special interview that Kristopher McCrone, the founder of Interdependent Coaching, conducted with Burg about the program:

Fundamentals falter … But fears fade

Bob Leggett, CFA, Senior Investment Strategist, FirstMerit Wealth Management Services

Every quarter, FirstMerit sends a newsletter to all its wealth management clients. In the Fall 2012 edition, Bob Leggett, CFA, Senior Investment Strategist, FirstMerit Wealth Management Services, discusses the year-long battle between fears and fundamentals.

Here’s an excerpt from the newsletter:

For the past year, we have been harping on the need to downplay fears and focus on fundamentals. Our point was that fundamentals were at least okay and might actually surprise the consensus to the upside. The fears were not unreasonable, but appeared to us to have low probabilities of occurring within our tactical time horizon. Thus, a total focus on the downside risks of fearsome outcomes (such as a U.S. recession, the Fiscal Cliff, the European crisis, or a China hard landing) could — and did — cause many investors to miss the opportunity to participate in a bull market.

Market returns were very good through Q3 and the S&P 500 led the way with a 16.4 percent total return. Midsized and smaller stocks were up about 14 percent and despite U.S. Dollar strength and European leadership’s determination to shoot themselves in the foot, EAFE was +10 percent and Emerging Markets +12 percent. Fixed Income returns weren’t bad either (although Treasury returns were only low single-digits), as “spread product” such as Corporates (+7.1 percent) and High Yield (+12.1 percent) continued to do well. Somewhat ominously, TIPS did much better than non-inflation protected Treasuries.

Read the entire newsletter here: 10629_Fall2012_MM_r4

Bob Leggett, CFA, is the Senior Investment Strategist at FirstMerit Wealth Management Services. Reach him at [email protected] or follow him on Twitter @firstmerit_mkt.

People first

Kim Murphy, Vice President of Employee Benefits, InfoCision

When visiting one of InfoCision’s offices, you’ll notice more than the tables, chairs and water cooler found in a typical workplace. It is not out of the ordinary to pass a yoga class practicing downward dog, a physician scribbling a prescription or a preschool class reciting the alphabet.

While these scenes may be out of place in many employers’ offices, InfoCision has worked hard to make them a staple. The company recognizes its employees are the heart of its business, so it focuses on recruiting and retaining them with a variety of amenities and benefits, says Kim Murphy, vice president of employee benefits at InfoCision.

“We strive to give our employees a work-life balance,” Murphy says. “We want to provide opportunities for employees to handle things like exercising at work so when they go home, they can focus on their families. And we believe that contributes to a happier, healthier employee.”

Amenities include:

  • InfoFitness centers: These 1,500- to 2,000-square-foot gyms include top-of-the-line equipment such as treadmills, elliptical machines and recumbent bicycles. The centers also offer classes such as aerobics or yoga, and are open from 7 a.m. to 11 p.m. They are free for InfoCision employees and family members covered under the company’s health plans. Many InfoCision employees and even entire departments attend classes together. “My department works through lunch, then at 4 p.m. we all go down as a group,” Murphy says. “It’s nice to have that support — on the days when you don’t want to go, you have your coworkers pushing you, and it makes it a lot easier.”
  • InfoWellness clinics and programs: InfoCision provides on-site doctors for both employees and family members regardless if they participate in its health plans. The company also has a prescription concierge service so employees don’t need to run out to pick up their medications. Other wellness programs include free smoking-cessation programs and subsidized weight-loss programs.
  • InfoKids Early Learning Center: This fully licensed child care center at InfoCision’s corporate headquarters in Akron can care for more than 90 children ages 6 weeks to 14 years. The center offers summer programs, two infant rooms and toddler and preschool rooms, play areas, educational toys and computers. It provides a creative curriculum education model. InfoCision’s satellite call centers offer subsidized child care options.
  • InfoCision Management Corporate University: Geared toward salaried staff who have a clear path of advancement within the company, IMCU offers free or discounted workforce development through on-site programs as well as outside classes and workshops through the University of Akron and other local institutions.
  • Employee assistance program: InfoCision provides employees with a toll-free number to call for financial advice or free counseling sessions for anything from a death in the family to a divorce. The employee receives recommended local counseling services, and he or she can use the services as much as he or she needs.
  • On-site delis: InfoCision’s Café 5 on-site delis offer healthy hot and cold meals, snacks and gourmet coffee. In addition, InfoCision’s vending machines now offer healthy choices.

InfoCision also offers a comprehensive benefits package for both salaried and hourly employees, Murphy says. These benefits are available upon hire and include health care, vision and dental plans, paid holidays, free life and disability insurance, paid personal and vacation time, quarterly bonuses, paid training and tuition reimbursement. InfoCision also offers 401(k) participation after 90 days of employment.

Aside from amenities and benefits, InfoCision also strives to create a work environment in which employees can excel. “For as big as we’ve gotten, we still have a family feel,” Murphy says.

“It starts when you enter the front doors and the receptionist greets you like you’re family even if you’ve never been here before. We also have a newsletter for employees every month, and our executives speak regularly to our employees and are open for questions or available to talk afterwards. That open communication really makes a big difference.”

InfoCision also has a group that travels to its facilities and speaks with employees about what’s happening at the company and in the workplace. This program, in conjunction with an employee suggestion box, is meant to provide an open forum for employees to voice ideas or concern.

“We have an open-door policy,” Murphy says. “Our employees have the opportunity to speak to not only to their supervisors and team leaders — as our supervisor to communicator ratio is one to nine — but our executives as well. That’s not something that’s typically found at other companies, but we believe it is a key part of recruitment and retention.”

For more information on employee benefits and amenities, contact Kim Murphy at [email protected] or visit

Finding customers on the move

Mike White, Chief Technology Officer, InfoCision

More marketers see mobile texts growing as an effective campaign tool especially for local efforts. A couple numbers illuminate the reality and the potential for success:

  • 6.1 trillion text messages sent annually — an average of 200,000 per second — according to The International Telecommunication Union, the United Nations agency for information and communication technology.
  • Response time is usually measured in seconds or minutes. Corresponding lag time for email and voicemail messages average several hours.

Smart Business spoke with Michael White, chief technology officer at InfoCision, about the rise of mobile text marketing and how it is changing the call center business.

What factors drive the growth in text marketing?

Definitely the rise in the number of mobile devices. And, with the new generation, texting is how they communicate. It’s the new demographic. Also, there are some statistics out there that show that the age group for people who text is widening. It’s not just the 18-to-29-year-olds now. It’s the 30-to-40-year-olds and the 50-to-60-year-olds that are starting to text as well. So it’s becoming very commonplace out there.

How is the growth in mobile text marketing affecting the call center business?

We look at it from a service bureau perspective. We are handling calls on behalf of our clients, and what we’re seeing is that as we contact people through our traditional channels, people also want to be contacted via other methods.

As the types of communication channels change and options expand, we’re also finding people respond to texts a lot more readily than they respond to other forms of communication. I’ve seen statistics that show 90 percent of texts get opened and read within 15 minutes of being sent.

Texting is becoming a type of marketing that is exploding in popularity because of the growing percent of the population who have cell phones or mobile devices. As we see that proliferation, as a call center vendor, we need to be able to have that channel available to our clients so they can communicate with their customers or donors.

What changes are call centers making to capitalize on text marketing?

The main thing is they need to have a provider or in-house platform that is capable of sending and receiving SMS messages. (SMS, or short message service, is a standardized communication protocol that enables the exchange of text messages between fixed line and mobile phone devices.) It’s basically a tool set and call centers need to have the right tools to provide the service.

Why has InfoCision chosen to make this investment?

It’s another option for how our clients can reach out to their customers. In addition, because it’s a very new and emerging space, where we’re finding significantly higher response rates.

Michael White is the Chief Technology Officer at InfoCision. Reach him at (330) 668-1400 or [email protected]

What to look for in an advisor

Joseph R. Ramey, CPA, Senior Manager of Accounting Tax Services, Zinner & Co. LLP

When becoming a business owner, trustee or beneficiary of a trust, or executor of an estate, there comes a time when seeking out a professional advisor is necessary. But where do you even begin to find that right advisor with all the necessary attributes?

In most situations, for example becoming a trustee, executor or business owner, an advisory team is needed because the specialties of each advisor are unique. There are several common qualities to look for in any advisor that will be the perfect fit for your team.

Smart Business spoke with Joseph R. Ramey, CPA, a Senior Manager of Accounting Tax Services at Zinner & Co. LLP, about the qualities you should look for.

Technical Strengths and Credentials

These qualities are fairly straightforward, and typically an advisor will display their credentials and area(s) of specialty on their website. When evaluating their technical expertise, look at their speaking engagements and for articles written in the specialty areas that are important to your situation and background. For example, if you just became an executor of an estate, you want to find an attorney that not only focuses on estate and probate, but also speaks on the topic and has authored articles in that area. Lastly, it is also important to note any professional groups or boards in which they participate; this will help in understanding how current they are in what is going on in their specialty.


The best way to start looking for an advisor is by talking with your family and friends who may know or currently have trusted advisors. If your close circles of acquaintances are able to refer someone they work with, then you will have more comfort in knowing how that advisor will work with you as well. Another good referral source is your own current advisors from other professions. For example, if you are in need of an investment advisor, contact your accountant or attorney and see if they have a recommendation for you.


Sometimes the most important quality to evaluate and assess in an advisor is their personality. The most technically sound professional may not be the right fit because of differences in personalities. Always meet face-to-face with a potential advisor and evaluate how they speak with you and how you feel when you talk with them. If you walk away scratching your head trying to figure out what they were talking about, they may not be the right advisor for you.

At Zinner & Co., we maintain a vast network of professionals in various fields and are always able to recommend an advisor that will work best with you. Our Exclusive Service Provider Program (ESP) is a group of the “best of the best” advisors in their respected fields, which allows us to deliver a pre-screened list of quality referrals to our clients based on their specific needs.

Joseph R. Ramey, CPA, is a Senior Manager of Accounting Tax Services at Zinner & Co. LLP. Reach him at (216) 831-0733 or [email protected]

Driving global sales for manufacturers

Andrew Dorn, Industry Leader, Information Intensive Business, Acxiom Corporation

When Andrew Dorn, Industry Leader, Information Intensive Business, Acxiom Corporation, was recently researching the top manufacturers in the United States, one topic kept coming up — the strong growth expectations focused on the world’s emerging markets. With the economies of the U.S. and Europe in flux, Dorn felt that, now more than ever, manufacturers need to be attentive to those emerging markets.

“The world is now flat,” says Dorn. “Competition comes from everywhere, so manufacturers need to be everywhere.”

Because of that, Acxiom has partnered with Smart Business to present a special one-hour webinar: “Driving Global Sales for Manufacturers: Why global growth for manufacturers is more important than ever.”

During the webinar — on Wednesday, September 19 at 1:00pm EST — we will discuss why global sales for manufacturers is critical, what factors should be considered in developing or refining the  international strategy, and, finally, present a roadmap that can be employed to optimize chances for success.

Featured panelists will be Zia Daniell Wigder, Vice President and Research Director, Forrester Research; Jennifer Barrett Glasgow, Global Privacy and Public Policy Executive, Acxiom; and Michael Biwer, Managing Director, Acxiom.

“As you enter the global market, it is imperative you understand the privacy laws in each country as they are quite complex and some are very stringent, for example, having criminal penalties for some violations,” says Barrett Glasgow.

Other topics to be discussed include:

  • How to determine which countries to enter and what data to gather to understand regional customer requirements
  • Recommended approaches to building country-specific strategies that can help facilitate smooth transitions, lowest possible cost-of-entry, and consistent performance
  • Considerations for navigating the complex web of country-specific data protection and privacy laws companies must adhere to in their efforts to connect with customers and prospects
  • Best practices used by leading companies that have successfully entered new markets

“The U.S. and European economies are still recovering and the balance of growth is constantly shifting,” says Dorn. “For example, China and Brazil have been experiencing strong growth. They are encountering a maturity curve, but that doesn’t lessen the importance of the issue — manufacturers need to be diversified and have a presence in all major world markets.”

The webinar, “Driving Global Sales for Manufacturers: Why global growth for manufacturers is more important than ever” will be held at 1:00 pm EST on Wednesday, September 19.

Click here to register for this free event!

Success south of the border

When Mexico makes headlines these days, it’s usually for rare but shocking drug-related violence. Unfortunately, this dark spot has blocked an expanding bright spot that is helping many U.S.-based global manufacturers to stay competitive. A variety of companies have set up plants south of the border and are counting on Mexico’s proximity to the United States, cultural similarities, and highly skilled and motivated workforce to fuel growth plans that support domestic job security.

According to the manufacturing trade journal IndustryWeek, foreign direct investment in Mexico rose 9.7 percent in 2011 compared with 2010 to reach $19.44 billion. After a 5.5 percent growth rate in 2011, the Mexican economy is expected to grow 4.5 percent in 2012. Mexico is still considered a lower-cost option compared with the United States, but increasingly, manufacturers are putting production in Mexico for other competitive advantages that benefit the entire company, including U.S. operations.

One such company is Santa Fe Springs, Calif.-based Phillips Industries, which makes customized and off-the-shelf electronics for the transportation industry and has operated a plant in Saltillo, Coahuila, Mexico, since 2007.

Phillips Industries manufactures customized trailer harnesses at its Saltillo plant, which accounts for about 25 percent of the company’s volume. Phillips Industries became interested in Mexico in 2006 when attending an open house at a Mexican plant operated by one of its customers. The customer was encouraging its suppliers to site facilities in Mexico. Simultaneously, Phillips was dealing with performance problems at a Dallas plant that seemed to have a low probability of quick resolution.

Rob Phillips, vice president of global operations, said the decision was made to shut down the Dallas plant and move production to Mexico, and the company opted for a “shelter model” to set up and run the operation.

Fundamentally, this model mimics outsourcing, but the manufacturer maintains control of critical functions such as business processes, strategy planning, hiring decisions and product-specific parts and materials procurement. The shelter company handles the administrative side of setting up and managing a plant: permitting and regulation, the importing and set-up of production machinery, utilities relationships and even employment.

Beyond cost savings, the biggest benefits of a shelter model are that manufacturers can launch production much faster, the entire process of setting up a foreign site is simplified and handled by experts, and the producer can devote resources to core competencies and serving customers.

Phillips chose The Offshore Group, which runs two industrial parks in addition to Saltillo, at Guaymas/Empalme, Sonora, and Guadalajara, Jalisco. Rob Phillips said the speed with which the Saltillo plant was set up and began production provided a huge advantage over going it alone.

“We began negotiating in a meeting September; we signed a contract on Halloween day; and we were up and running by the beginning of the next year,” he said. “The decision to move production was a quick decision, and The Offshore Group kept pace with us. We were a company with no experience operating in Mexico, and we were able to set up a world-class facility in a short period of time.”

Phillips said going with the shelter model shortened set-up time because The Offshore Group winnowed job applications to those that matched Phillips’ criteria and needs, imported and set up production machinery and handled all other “localized” aspects of setting up shop in Mexico.

When companies such as Phillips Industries can shorten set-up time for a new facility, it can begin fulfilling customer orders sooner, which in turn shortens the return-on-investment period for up-front costs. As a result, the new operation begins contributing to profitability and cash flow sooner.

Having a shelter facility in Mexico shortens cycle time on other key metrics compared with locating a facility in an overseas location, such as Asia. For example, Rob Phillips said the lead time for Phillips’ customized trailer harnesses that are made in Saltillo is four to five times shorter than competitors’ lead times. Both the shorter shipment route (no ocean to cross for North America) and similarity of time zones, language and cultural factors play into that advantage.

Additionally, Rob Phillips said he has had no problem finding enough properly trained and educated employees. In fact, they are more educated than U.S. professionals in some ways.

“We’ve hired several people right out of college who have been directly educated on lean purchasing for the automotive industry, and I’ve never seen that anywhere else in the world,” Phillips said. “If I need to hire someone, I have an incredible pool of people who are interested and have the experience we need. I’m not having to look for a production manager for six months. I look maybe for a week and a half. I might get four or five very qualified resumes of English-speaking people who really understand lean and are what I am looking for.”

In some cases employees work directly for the manufacturer, while in others they work for the shelter company. Phillips’ employees work for The Offshore Group on paper, but Rob Phillips said they are just like his own employees.

“The shelter actually employs them, but for all intents and purposes, they are Phillips employees. They get a check from the shelter, but they are very loyal to our company and invested in the business.”

Ideally, manufacturers searching for a shelter partner should look for a complete, turnkey solution that allows them to focus on their products and not plant maintenance. For example, Phillips has been able to concentrate on building a pool of local strategic suppliers for materials and components—those that add to customer value—while The Offshore Group handles less-strategic MRO procurement.

“We have had so much success in Mexico that we are constantly looking at what products can we move there,” said Rob Phillips. “There are discussions of moving some of our products for European customers from Shanghai to Mexico because it cuts lead time in half.”

A model plant in Mexico

When Mexico makes headlines these days, it’s usually for rare but shocking drug-related violence. Unfortunately, this dark spot has blocked an expanding bright spot that is helping many U.S.-based global manufacturers to stay competitive. A variety of companies have set up plants south of the border and are counting on Mexico’s proximity to the United States, cultural similarities and highly skilled and motivated workforce to fuel growth plans that support domestic job security.

According to the manufacturing trade journal IndustryWeek, foreign direct investment in Mexico rose 9.7 percent in 2011 compared with 2010 to reach $19.44 billion. After a 5.5 percent growth rate in 2011, the Mexican economy is expected to grow 4.5 percent in 2012. Mexico is still considered a lower-cost option compared with the United States, but increasingly, manufacturers are putting production in Mexico for other competitive advantages that benefit the entire company, including U.S. operations.

One such company is The Intec Group of Palatine, Ill., a global supplier of automotive parts and systems. The company employs 375 people at its Guaymas manufacturing plant, which accounts for $33 million in annual U.S. sales. In addition to U.S. customers, the plant serves customers in Mexico, Canada and China.

According to Intec President and CEO Steven M. Perlman, having a Mexican location improves Intec’s performance both directly and indirectly.

“Directly, it is the highest performer of all our global facilities, including those in Asia,” Perlman said. “The skills and work ethic of the staff there have resulted in Intec Mexico delivering the highest margins to us and the best quality and service to our customers.

“Indirectly, Intec Mexico’s performance has motivated our customers in sourcing more business with Intec’s U.S. and Asia facilities. Intec Mexico is also developing technology that will be used by our other factories.”

Intec has been manufacturing in Mexico since 2002. It has operated under the “manufacturing shelter” business model administered by The Offshore Group, an outsourced manufacturing support or “shelter” company. Fundamentally, the shelter business model mimics outsourcing, but the manufacturer maintains control of critical core functions such as production and manufacturing processes, strategy planning, hiring decisions and product-specific parts and materials procurement. The shelter company handles the administrative side of setting up and managing a plant: permitting and regulation, recruiting both direct and indirect labor, the importing and set-up of production machinery and raw materials, utilities relationships, and the payment of salary and benefits to the workforce.

The Offshore Group runs two industrial parks in Guaymas and Empalme, Sonora, as well as a third park in Saltillo, Coahuila.  The company has also begun to offer its services in Guadalajara, Jalisco.

Beyond cost savings, the biggest benefits of a shelter model in Mexico are that manufacturers can launch production much faster, the entire process of setting up a foreign site is simplified and handled by experts, and the producer can devote resources to core value-added manufacturing competencies and serving customers.

“Using the shelter model offered by The Offshore Group allows us to focus our attention and efforts on our technology, development of our people, and our customers,” Perlman said. “These are the critical activities for any company’s success.”

Our partner in Mexico handles “essential, but not necessarily value-added activities,” Perlman said.

“Those are many of our ‘back office’ or administration requirements, including payroll and benefits administration, tax administration, non-direct material purchasing, recruiting and employment screening. This frees up the top-level people in our organization to work on strategies that provide a better value proposition for our clients.”

Some of the other benefits of the shelter model in Mexico that have helped Intec be more competitive include support and networking with other Offshore Group clients, management of labor-union negotiations, instant credit from suppliers and accurate estimates on how long new building projects and infrastructure upgrades will take.

Perlman said Intec Mexico is an important part of the company’s growth strategy. Because the plant is so efficient, the company has been able to “reclaim” factory floor space for additional growth.

“This has delayed our need to expand beyond the current facility, but we believe we will be expanding our capacity beyond our current facility within five years. In the meantime, the current plan is to increase output and revenues at the existing Mexico facility by at least 20 percent and as much as 50 percent.”