CAMT is pleased to announce the arrival of the Transformation Planner Operational Assessment designed to help manufacturing companies gain competitive advantage. This Assessment provides manufacturers with an objective overview of how their operations compare to other companies in their industrial sector, and high-level benchmarking on key operating metrics to lay the foundation for developing a targeted plan for improving productivity and saving money.

Using the innovative operational analysis tool developed by the Michigan Manufacturing Technology Center, the Transformation Planner, and an on-site tour, including in-depth interviews with your management team, CAMT will provide your company a Transformation Planner Operational Assessment report that will detail your company's:

• Performance levels on key operating metrics
• Organizational readiness for transformational change
• Improvement opportunities, targets, and financial benefits
• Recommended tools to achieve the targeted savings and growth

The process begins by completing a Competitiveness Review Questionnaire that covers operational data representing twelve prime performance indicators. Once analyzed by a CAMT assessor, the information from the questionnaire is entered into the Transformation Planner tool, which then compares your data to its database of companies in the same sector, and an initial benchmarking report is created. Then CAMT will conduct a one-day on-site assessment to verify and further analyze the report data, ensuring goals are reasonable, achievable, and that an action plan is put in place to implement the changes.

This is a unique opportunity for manufacturers to aim at becoming best-in-class through focusing on the improvement opportunities that will deliver the highest impact on your bottom line. For more information about the Transformation Planner Operational Assessment, please contact Merrily Hill Smith at 303.592.4087.

Finishes Ltd, a small business in Colorado Springs, provides plating and anodizing services to machine shops along the Front Range. The business has been serving manufacturers in Colorado since 1978.

The current owners, Frank and Linda Shannon, purchased the business in 1990. At that time, the business served only Colorado Springs and offered two product lines. Under the guidance of the Shannons, Finishes, Ltd. introduced four new product lines, extended service into the Denver/Boulder/Longmont markets, significantly increased revenue-- including a doubling of business for two consecutive years--, and grew its staff by 16 in six years.

But trouble arrived in 2002 as the U.S. manufacturing industry declined and manufacturing was outsourced internationally. The Colorado manufacturing market suffered a 30% structural decline; 30% of Finishes Ltd. customers declared bankruptcy and the company revenues dropped 50% within a couple of months. After incurring losses for two years, the Shannons resolved to stay in business, set ambitious sales targets and significantly increased the scope and scale of its marketing efforts. They were successful in staying afloat.

In late 2005, Mr. Shannon attended an event at which CAMT presented the 5S methodology. Convinced that 5S would help Finishes Ltd. improve and assisted by a state grant, Frank contracted CAMT to perform a 5S training and implementation on the shop floor with the entire staff. Frank was struck by the implementation of the training. "Our staff has never been so motivated by training as they were in 5S," noted Frank.

The implementation of 5S methodology included the rearrangement of the shop floor to facilitate smoother workflow, saving floor space, and reducing motion and time spent searching for essential information and tools. These 5S improvements were spread to all aspects of the organization and improvements are expected to continue because of the structural changes made company-wide. Managers have more time to manage now, resulting in improvement of quality and customer service. After implementing 5S, Finishes Ltd. returned to profitability for the first time in four years. Frank believes, "The survival of our company can be owed in part to the implementation of 5S."

Results:

• Sales increase by 27%
• Staff increase from 9 to 13
• Reduction in labor costs by 20%

CAMT has recently partnered with the Longmont Area Economic Council to provide primary employers with quarterly events on topics of interest and value. The first event, "What Will Your Business Be Worth In 3 Years", was presented by Steve McGill, owner of Engineered Business Solutions and a CAMT consultant. Mr. McGill provided an overview of the process and criteria for valuing businesses and solutions to achieve valuation goals.

This well-received program has led CAMT and the Council to collaborate on a Quarter One 2008 event to be announced soon. "The Longmont Area Economic Council looks forward to continuing and expanding our partnership with CAMT through their programs offered to our primary employers," said Wendi Nafziger, Vice President of the Longmont Area Economic Council. For more information regarding this partnership or to recommend topics for future events, please contact Wendi Nafziger.

Have you added product lines, expanded your facilities, or automated your processes? If your answer is yes, your business may qualify for the R&D Tax Credit. The R&D Tax Credit can be a significant and immediate source of cash for companies innovating and improving products and processes, even in day to day operations such as engineering, quality assurance, sales, marketing, purchasing and information technology.

Activities that qualify for the R&D Tax Credit include:

• Developing new or improved products or prototypes
• Modifying production processes
• Evaluating new materials or components
• Improving existing or building new facilities
• Testing for quality certifications
• Applying for patents
• Employing or contracting personnel for the above purposes

Introduced in 1981, the R&D Tax Credit was intended to provide companies with a credit to encourage increased R&D spending and investment in innovation, enable U.S. companies to create and preserve high paying jobs, and be better prepared to compete well into the future. Two thirds of firms currently claiming the R&D credit are manufacturers, and one third of claimants have revenues of less than $10 million.

Prior to December 2003, the requirements necessary to qualify for the R&D Tax Credit were rather difficult to meet. However, in December 2003, new IRS regulations were finalized which apply retroactively and have made it significantly easier to qualify for the R&D Tax Credit. The new regulations are in harmony with the intent of Congress and are more taxpayer friendly. They reflect a profound change in the position of the IRS. The new regulations: 1) make it easier for a broader array of companies to qualify their activities as R&D; and 2) provide greater flexibility with regards to meeting certain recordkeeping requirements.

For help in determining the likelihood of your company's eligibility for the R&D Tax Credit, here are some contacts to help get you started:

• Sonjia Romero, Tax Projects Group, 720.207.8364
• Triche Guenin, Partners Through Change, 303.777.9680
• Stefanie Simons, RSM McGladrey, Inc., 303.298.6473
• Tim Engstrand, fortisTCS, 303.915.9870