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Vogt Awards Make Entrepreneurs’ Dreams Come True

Sunday, December 13th, 2015

I had the pleasure of witnessing the dreams of entrepreneurs come true when I attended the Vogt Invention and Innovation Awards Demo Day in Louisville, Kentucky on November 17thand watched Inscope Medical Solutions LLC, a Louisville-based startup, win $100,000 in grant funding.

Inscope Medical has developed an innovative laryngoscope, the OneScope, which integrates controllable suction and wireless video to provide a clear view of the vocal cords, improving the efficiency, speed, and safety of airway intubation.

The entrepreneurial team consists of CEO Maggie Galloway, chief scientific officer Dr. Mary Nan Mallory, and Chief Operating Officer Adam Casson, all of which are graduates of the Forcht Center for Entrepreneurship in University of Louisville’s College of Business.

Four other companies competed for the $100,000 grant during the Vogt Awards Demo Day. Each company had been awarded $20,000 in seed funding in August, which is non-dilutive, meaning no equity was taken. The $20,000 is designed to help the selected companies gothrough the program and maximize the value of the connections they are provided.It enables them to be able to create their first working prototypes via access to world-class resources.

Each company also received ten weeks of intense entrepreneurial training by the EnterpriseCorp staff and mentors, participated in a 10-week Lean Start-Up course by Nucleus and prototype development resources through the University of Louisville’s Rapid Prototyping, GE’s FirstBuild and LVL1 Hackerspace.

Winners also participated in Louisville Mini Maker Faire and were encouraged to network within the entrepreneurial community through Venture Connectors.

Upon completion of the program, companies then pitch their products at Vogt Demo Day. To have a chance to win an additional award up to $100,000 and meet with interested investors who can help take their business to the next level.

Lisa Bajorinas, Director of the Kentucky Innovation Network told me that the Vogt Awards are made possible by the Community Foundation’s Vogt Invention and Innovation Fund. During the 16 years of the program, nearly $2.5 million has been awarded to 50 companies. The program is administered by the entrepreneurial arm of Greater Louisville Inc., EnterpriseCorp, which is focused on assistance for entrepreneurs.

Lisa said, “The late Henry V. Heuser Sr., a native Louisvillian and founder of the Henry Vogt Machine Company, created a $5 million endowment at the Community Foundation to support local entrepreneurship shortly before his death in 1999. Henry had been able to use the equipment on his shop floor to assess the viability and commercial potential when he had an idea about how to make something better, quicker, or easier. He wanted to establish an award that would allow engineers and entrepreneurs access to the same kinds of resources.”

The four runners-up included:

Hue Innovations LLC – developed MiColor, a machine that includes a scanner, polish shaker, and ink that customizes creation of any non-toxic regular or gel nail polish color on demand for nail salons to reduce wasted polish, lower toxicity levels for salon workers, and enhance customer satisfaction by providing more color choices.

Stinger Equipment – created a concrete saw with its own engine and dust collection that safely cuts large blocks in a single pass eliminating fatigue, dangerous cuts, and exposure to lung cancer caused from silica dust inhalation.

Sunstrand – supplier and processor of value-added bio-material for domestic polymer composites using a proprietary line of bamboo and applied to hemp, kenaf, flax and jute offering increased potential to decrease weight and green-up plastics.

TriBlue Engineering Corporation – created a gas sweetening unit that allows natural gas processing plants to remove unwanted CO2 and H2S from their lines to make processing sour gas more economical and allows additional revenue streams to be made available because of the improved quality of the by-products.

The day after the Vogt Demo Day, I had lunch with Maggie Galloway and Adam Casson of Inscope Medical. Maggie explained that she and Adam had been MBA students at the University of Louisville and met Dr. Mary Nan Mallory, also studying for her MBA. They were assigned to form a team to find a problem and solve it. Dr. Mallory and her colleague, Dr. Thomas Cunningham, had experienced a failed intubation in the past and wanted to develop a better laryngoscope.

Maggie said, “Dr. Mallory and Dr. Thomas Cunningham, who was a resident physician in the Department of Emergency Medicine at University of Louisville, had the idea for the technology, so the University of Louisville filed the first patent on the device which they are licensing to Inscope Medical.” She said, “The OneScope streamlines the intubation process for physicians and emergency medical practitioners by combining the laryngoscope and the suction catheter so that physicians don’t have to juggle multiple tools.”

Maggie said, “The FDA just issued a recall of some of the equipment used to clean reusable scopes in hospitals, so there will be a big incentive to use disposable devices. Our OneScope is disposable. Maggie added, “About 25 million intubations occur in the U.S. each year and 50 million globally.”

Adam Casson said, “We’ve done more than 650 customer discovery interviews and more than 300 interviews with clinicians, including design feedback from more than 50 paramedics and Emergency Physicians. Our second generation device will also integrate a wireless video camera which will allow physicians to view the placement on a nearby screen.”

After returning home, I found out that the Vogt Award wasn’t the first award that Inscope Medical won. In February 2015, they won the Brown-Forman Cardinal Challenge and “received a ‘launch in Louisville’ package that is valued at $100,000. The package, provided by EnterpriseCorp includes services from various Louisville businesses as well as $15,000.”

“The Brown-Forman Cardinal Challenge brings top teams of graduate students to Louisville, where they compete for the prize and an invitation to the Global Venture Labs Investment Competition in Austin, Texas, in May,” said Van Clouse, the Cobb Family professor of entrepreneurship at U of L.

According to an article in the Louisville Business Journal, Inscope Medical participated in the Global Venture Labs Investment Competition and won another competition, on Saturday, May 9, 2015. “Among the prizes, Inscope Medical won $75,000, an invitation to close the NASDAQ OMX Stock Market, and a $25,000 incubator package….” The same article mentioned that Inscope Medical’s entrepreneurial “team had a second-place victory at the Rice Business Plan Competition in Houstonin April 2015, where it won $133,000. Prior to that, Inscope Medical took home third place and $4,000 at the Oregon New Venture Championshipin Portland, Ore.”

The number of awards won by Inscope Medical’s entrepreneurial team is impressive. As a director of the San Diego Inventors Forum (SDIF), I know of many startup companies in San Diego that would be very envious of Inscope Medical’s success in obtaining this amount of funding without having to dilute their ownership. Our 2015 SDIF Invention contest awarded cash prizes of $1,000, $500, and $250 to the top three winners in August. How nice it would be to have a multi-million dollar endowment to award ten times the amount we awarded!

As an alumnus of San Diego State University, I have attended the annual Venture Challenge Competition conducted by the Lavin Entrepreneurship Center at SDSU, which is the only other formal entrepreneurial contest of which I am aware in the San Diego region. The SDSU competition has showcased next generation companies for more than 20 years and provided students from around the world an opportunity to seek investment for their business ideas. Four years ago, the Venture Challenge transformed into the LeanModel™ Competition. “This new “business model” based competition focuses much more attention to testing a company’s assumptions and getting customer feedback in the early days of the startup.”

The 2016 LeanModel™ Competition will be on Friday, March 4th, and Saturday, March 5th, 2016 on the SDSU campus.” The LeanModel™ Competition is not a traditional business plan competition, it is designed to assist and reward student based start-ups that utilize both a solid business model and customer testing mentality.

“Teams will be competing for prizes totaling $20,000 in cash and inkind services. The top three teams in the competition will be awarded prize money. In addition, the small pitch event winners will also be awarded prize money. In the 2015 Competition, the top three teams won $7500, $4500, and $2500 in cash prizes respectively. The top three small pitch event winners took home cash prizes ranging from $500 to $1500.”

The companies competing in the Demo Day are examples of American inventiveness, but the most difficult challenge for any startup company is to raise enough money to get their product to market. The Vogt Invention and Innovation Awards set a standard that should be emulated by other regions of our country to enable more companies to succeed, grow, and create more manufacturing jobs in the United States.

 

Posted in Innovation, Manufacturing, Technology | No Comments »

Southwest Florida Attracts Manufacturers, not just Retirees

Tuesday, November 3rd, 2015

During my recent trip to southwest Florida as the guest of the Lee County Economic Development agency, I learned that in recent years, there has been an increasing number of business owners that have been regularly vacationing in the area who have decided to either move their business or set up a business where they like to play.

Lee County is on the Gulf of Mexico side of Florida about 125 miles south of Tampa and about 50 miles north of the Everglades National Park. There are five incorporated cities in the country: Cape Coral, Ft. Myers, Bonita Springs, Ft. Myers Beach, and Sanibel. The county population grew 63% from 1994 to 2014, but 55% live in the unincorporated area.

My tour host, Shane Farnsworth, Manager of Business Development for the Lee County EDO, told me that Cape Coral was a planned “bedroom” community, but many people never built homes on the lots. So, Cape Coral offers the greatest area of growth for industrial development through the purchase and combining of these parcels into industrial sites. Ft. Myers is the oldest of the five cities, so there is very little undeveloped land and new industrial sites will occur through redevelopment. During my visit, I met with executives of several manufacturing companies in three of five and the city of Naples to the south in Collier County (most of Collier County is taken up by the Big Cypress National Park.).

My first interview was with Bill Daubmann, founder and Senior V. P. of KDD, Inc. dba My Shower Door and a member of D3 Glass LLC. Bill originally had  established a closet organization business in Springfield, MA in 1986 and obtained a license agreement with Mr. Shower Door in 1989. After visiting the Lee County region for several years on vacation, he decided to move to Naples in 2001 and opened a showroom in 2003. His son, Doug, moved also and joined the company. He took the Fast track entrepreneur course by the Kaufman Foundation with one son in 2007 to “hone” their management skills, and took it again in 2011 with his other son.

Bill said, “It was a tough struggle from 2008 – 2010 due to the Great Recession, as southwest Florida was “ground zero” for the decline in the new home building market. We survived by mostly doing home remodeling.”

In 2011, they were informed that their Mr. Shower Door license would not be renewed for 2012, so they explored setting up their own manufacturing plant to make the tempered and glazed needed for shower doors. After analyzing how much glass they were buying out of the state and the problems they had with breakage and defective glass, they set up D3 Glass LLC in 2012 when new home building started coming back in a building they had bought during the recession. Bill’s oldest son, Keith, became President of KDD, Inc. dba My Shower Door. Bill said that the ovens for tempering the glass cost one million and everything else cost another million. They had to buy two custom-outfitted trucks to deliver the glass to their showrooms and customers.

Since Florida requires a license for the glass and glazing business, Bill and his sons took the test and got their licenses. Bill said, “We hired a consultant to do a “SWOT” analysis for our shower door business to make sure that our business model worked in all parts of the country. We wrote a business plan and did a beta test site. We are now selling our business model to others and running an academy on how to run a shower door business. We have four affiliate stores: Oklahoma City, OK, Grand Rapids, MI, St. Paul, MN, and York, PA. We also sell the specialized hardware for shower doors to our affiliates and other shower door companies.”

In the last two years, they expanded from just doing shower doors into other markets for tempered glass and recently finished providing all of the tempered glass for the new Hertz headquarters building that will open next month. Bill said, “We went from 22 to 50 employees in 18 months and are now up to 64 employees. We just made the INC magazine list of 5,000 companies at #2,085 and will be going to the big event next month.”

After I told him that I am part of the Reshoring Initiative to promote bringing back manufacturing to America, he said, “We were buying aluminum extrusions from China, but just switched to a vendor in the United States.”

In answer to my question about the advantages of being located in the region, he responded, “It is easy to deal with the people in the local government agencies, there is good transportation available on I-75 and Rt. 41, the new airport has flights going to our markets, and there are good local colleges for preparing the future workers we will need.”

My second interview was with Brian Rist, President and CEO of Smart Companies, of which Storm Smart is the largest subsidiary. Storm Smart is Florida’s largest manufacturer & installer of hurricane protection products and is the ninth largest manufacturer across all industries in Lee County. Brian is the inventor of the innovative Storm Catcher Wind Abatement Screens. He also moved from the northeast to southwest Florida to run his business. Brian said, “I started out with a couple of partners in a general contracting business and wound up as the sole owner. The first three years were a struggle to find a niche. The building codes were changing and I became the expert in the new codes, even teaching architects. After Hurricane Ambrose came in 1994, I tried to find a fabric that would replace plywood for covering windows. We talked with people in energy management and got everyone’s opinion. I founded Storm Smart in 1996 to manufacture fabric window protection. We became known as who to talk to about window protection. If you fail to plan, then you plan to fail. We did a CD on what businesses could do for emergency planning because 83% of businesses that have a disaster never recover.”

Brian explained that the building codes changed in Florida for developing sites in 1997 requiring window protection to be part of building a home. In 2001 new codes came out and insurance regulations changed also. Everyone has to have separate hurricane insurance. Insurance companies offered special rates for homes that had protection, and the State of Florida offered a rebate program.

“We started making polypropylene window protection by hand cutting the material, but we needed to ramp up to higher production. Getting a sales tax credit helped us to be able to buy a laser cutting machine in 2013, and it eliminated the bottleneck in our business helping us develop new products.”

They work with the biggest companies in the world that use fabric for hurricane protection. While their products protect homes from hurricanes, they also reduce energy costs. Brian said, “You can build a business based on a known market of saving energy and not just protection from hurricanes. Impact-rated windows are a fast growing part of our business. Most new homes come with impact rated windows.”

He added, “The building codes changed again and they are much more about retaining heat rather than saving heat. International codes are also changing. We watch what percentage of our business is with builders. We went to Cancun and set up small operation during recession in Mexico. We are currently doing work in Los Cabos, Mexico also. We sell to Caribbean countries like Bermuda, Jamaica, and wherever else there are resorts.

We have experienced fast growth and have been picked by Inc. magazine four times as one of the 5,000 fastest growing companies. We went from 26 employees to 100 employees after Hurricane Charlie. We went from five to six jobs per month to about 100 jobs per month.

We looked at all of their jobs and decided to really go back into the customer service business to be a sustainable business. We started to invest in our people and getting to know who they were. We had to make sure they were doing things right. We have to ‘walk the talk.'”

After we discussed some of the articles I have written on developing and recruiting the next generation of manufacturing workers and my involvement with the Coalition for a Prosperous America, he added, “‘ Walking the talk” also involves working with students and getting involved with the Southwest Regional Manufacturers Association [for which he is in the current Vice-President.] He said, “We won the manufacturer of the year for the local region last year. We work with five different academies related to construction. Only about 20% of kids go to college and only about 20% of them graduate from college. We had a tour of our plant during Manufacturing Day and had about 13-14 students come on the tour. Florida is too reliant on tourism and construction. Manufacturing creates more different opportunities for good-paying jobs. Our Governor was at our plant three weeks ago, and he understands manufacturing. By partnering with government and education, we can be more effective in growing manufacturing in Florida. In order to grow, we have to develop the next generation of manufacturing workers. Team building, time management, and ethics are the same regardless of the industry.”

In answer to my inquiry about Lean training, he said, “We have been very involved with lean manufacturing and are working with the Florida Manufacturing Program. We are going through a program for an ERP system in order to continue to grow. We have a plan to develop the company over the next three years. Part of it will involve having licensed dealers.”

The outlook for business in Lee County is very good according to the Lee County Business Climate Survey Report, Third Quarter, 2015 prepared by The Regional Economic Research Institute, Lutgert College of Business, Florida Gulf Coast University, released on August 27th, 2015. The key findings were:

  • 74 percent of executives stated that the current economic conditions have improved over last year
  • 66 percent of the executives stated that the current economic conditions for their industry have improved over last year
  • 67 percent of executives expect economic conditions for their industry to improve over the next year
  • 68 percent of companies expect to increase investment next year and none expect to reduce investment levels
  • 61 percent of executives reported increasing employment over the last year, while four percent reported reducing employment
  • 57 percent of executives expect to increase employment at their companies during the next year

While manufacturing represents only 2% of the economy of Lee County today, the staff of the Lee County Development agency is working with the economic development offices of the five cities and members of the Southwest Regional Manufacturers Association to grow the manufacturing industry and expand that percentage. Their work will be aided by the fact that Florida ranks 5th in the 2015 State Business Tax Climate Index with a score of 6.91. The corporate income tax rate is only 5.5% for C corporations only. There is no inventory tax for businesses, and there is no personal income tax. There are nine universities and colleges, and the two largest, Florida South Western State College and Florida Gulf Coast University have a combined enrollment of over 30,000 students. There is good technical training at the two-year community college level as well as at the Fort Myers Institute of Technology, Cape Coral Institute of Technology, and at the ITT Technical Institute. The Ft. Myers airport (RSW) is served by 15 air carriers offering nonstop flights to 46 destinations, most of which are east of the Mississippi.

The stories of these two companies are good examples of innovation to develop new products, becoming a lean company, creating a new business model, and expanding into new markets. These are some of the recommendations I made in the chapter “What manufacturers can do to save themselves” in my book, Can American Manufacturing be Saved? Why we should and how we can.

Having no corporate and personal income taxes and providing a friendly business climate are ideas I discuss in the chapter on what government can do to save manufacturing in my book. My next article will tell the stories of other companies I visited in Florida.

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Posted in Economic Development, Education, Innovation, Lean, Manufacturing, Reshoring, Technology, Workforce Development | No Comments »

Why are there so few states with “Bottle Bill” laws?

Tuesday, September 22nd, 2015

American consumers have increasingly favored recycling to benefit their community and the environment. Recycling is defined as the process of collecting and processing materials that would otherwise be thrown away as trash and turning them into new products. One of the best ways to promote recycling is with “bottle bills,” which is another way of saying “container deposit laws.” A container deposit law requires a minimum refundable deposit on beer, soft drink and other beverage containers in order to ensure a high rate of recycling or reuse. After learning that only ten states have container deposit laws, I decided to investigate why this is the case.

I am sure that everyone would agree with the following benefits of recycling cited by the Environment Protection Agency’s website:

  • Reduces the amount of waste sent to landfills and incinerators;
  • Conserves natural resources such as timber, water, and minerals;
  • Prevents pollution by reducing the need to collect new raw materials;
  • Saves energy;
  • Helps create new well-paying jobs in the recycling and manufacturing industries in the United States.

The three steps to recycling materials listed on the website seem simple:

  • Step 1: Collection and Processing – Recyclables are collected by curbside collection, drop-off centers, and deposit or refund programs. Next, “recyclables are sent to a recovery facility to be sorted, cleaned, and processed into materials that can be used in manufacturing. Recyclables are bought and sold just like raw materials would be, and prices go up and down depending on supply and demand in the United States and the world.”

The one hitch in these steps is that it takes enough recyclable material to make it profitable to manufacture products out of recycled material or make new products that utilize recycled content, such as carpeting, park benches, and even asphalt. The question is do we have enough recycled material to make the clear water bottles that could be endlessly recycled?

When you think of all of the trillions of clear water bottles purchased in the U. S. by American consumers, you would think that there would be more than enough material to keep making water bottles out of recycled material without having to use any virgin material. However, since there are only 10 states with bottle deposit laws, this is not the case. These states are: California, Connecticut, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont. Oregon was the first state to successfully pass a bottle deposit law in 1971, Vermont was the second state to pass a bottle deposit law in 1973, and Hawaii was the most recent in 2002. Most of the other states passed laws in the 1980s. Delaware passed a law in 1982, but it was repealed in 2009. The deposit is 5 cents for every state except Michigan, where it is 10 cents.

Tennessee proposed a bottle bill in 2009 and 2010 that failed to pass even though ten county commissions voted to endorse the bill. It would have required a five-cent deposit on beverage containers. The recycling rate in Tennessee is 10 percent, which was projected to increase to 80 percent with a bottle bill. Discarded bottles and cans are the primary contributor to litter in Tennessee.

Texas attempted to introduce a bottle bill (SB 635) into legislation in 2011, but lost by a vote of 101 to 40. It would have required a ten-cent deposit on beverage containers under 24 fl. oz. and 15 cents for larger containers. Recycling promoters filled a new bill in 2013, SB 645, but it was left pending in subcommittee on 4/22/2013. Two new bills have been introduced in Texas in the 2015 legislative cycle ? HB 2425 Regarding Refundable Deposits and SB 1450 Calling for Refundable Deposits.

Why is there so much opposition to bottle bills?

According to the Institute, “Bottle bill opponents include beverage container manufacturers, soft drink bottlers, beer, wine and liquor distributors and retail grocers. As ‘new age’ drink containers are targeted for inclusion in existing bottle bills, juice, sports drink and bottled water manufacturers have joined the anti-bottle bill forces…”

Major opponents of bottle bills are:

  • Anheuser Busch
  • The Coca Cola Company
  • Pepsi-Cola Company
  • Can Manufacturers Institute
  • Distilled Spirits Council of the United States
  • Food Marketing Institute
  • International Bottled Water Association
  • National Beer Wholesalers Association
  • Grocery Manufacturers Association
  • National Food Processors Association
  • National Grocers Association
  • American Beverage Association

The Container Recycling Institute claims that these companies and organizations have spent huge sums of money “to defeat ballot initiatives over the past twenty years, with industry opponents outspending proponents by as much as 30:1.”

During the last three years the three leading container trade groups (Aluminum Association, the Glass Packaging Institute, and the Association of Postconsumer Plastic Recyclers) have changed their position and now support bottle bills because of the success of existing bottle bills.

What are the reasons given for opposing bottle bills? The Container Recycling Institute lists the following reasons on a page titled Myths and Facts:

  • Deposits aren’t needed where there is curbside recycling.
  • Deposit systems target only a small part of the waste stream (less than 3% of municipal solid waste (MSW) by weight).
  • Deposit systems address a small portion of litter: 7 to 25 percent.
  • Deposit return is inconvenient (consumers prefer home curbside bins).
  • Deposits rob curbside programs of valuable aluminum can revenue.
  • Deposits are more expensive than other recycling programs.
  • Deposit returns are expensive for distributors.
  • Deposits are a tax” and increase the price of beverages.

I live in California, which is one of the bottle bill states, and we also have curbside recycling in the city of San Diego. I prefer to separate out the containers for which I paid a deposit and take them to a recycling center to get my deposit money back. In the major cities of California, stores do not take the bottles back. You can take them to recycling centers conveniently located in the parking lots of neighborhood shopping centers or to municipal waste management landfills where privately owned recycling centers are located.

I do not understand how anyone could consider a deposit fee a “tax” because it is refunded. None of the sales taxes I pay are ever refunded to me. Also, under container deposit systems, the cost of recycling is borne by producers and consumers, not by government and taxpayers as is the case for curbside recycling programs.

The Container Recycling Institute says that beverage containers comprise 40-60% of litter. Because of the bottle deposit law in California, you rarely see any bottles as litter. Homeless and poor people pick up all of the bottles that could be litter on streets and sidewalks to turn them in to get the deposit money. States that have bottle bills “showed reductions in beverage container litter ranging from 69% to 84%.”

In January 2015, a report was released, “Waste and Opportunity 2015: Environmental Progress and Challenges in Food, Beverage, and Consumer Goods Packaging” by Conrad B. MacKerron, Senior Vice President of As You Sow, a nonprofit organization dedicated to increasing environmental and social corporate responsibility. The Project Editor was Darby Hoover, Senior Resource Specialist of The Natural Resources Defense Council (NRDC), an international nonprofit environmental organization with more than 1.4 million members and online activists.

The report revealed that “With an overall recycling rate of 34.5 percent and an estimated packaging recycling rate of 51 percent, the United States lags behind many other developed countries.” With regard to beverage recycling, the report states, “Major beverage companies like Coca-Cola, Nestlé Waters NA, and PepsiCo are taking positive individual actions to boost bottle and can recycling. Still, most brands support neither a container deposit nor an EPR (extended producer responsibility) scheme to boost recycling—two proven ways to increase container recycling.”

With regard to beverage containers, PET (Polyethylene terephthalate) is the material most frequently used and thus is “currently the most recycled plastic material, yet only 30 percent of PET bottles are recycled. But since 94 percent of the U.S. population has access to PET collection, there is much more PET that could be recovered. “High demand and limited supply for recycled PET (rPET) demonstrates the economic potential of increasing recycling rates if materials can be recovered without significant contamination.” However, “U.S. reclaimers reported average yield losses of 31 percent for PET bales from curbside programs and 25 percent for bales from deposit programs” due to contamination by other recycled materials.” The report recommended expanding the use of PET to other types of packaging such as clamshell food containers to increase the supply of rPET.

One good reason to expand container deposit laws is stated in the report: “Recycling also helps create new, well-paying jobs in the recycling and manufacturing industries. The firms that process metals, paper, electronics, rubber, plastic, glass, and textiles represent 137,000 direct jobs and $32 billion in revenue. When suppliers and indirect impact are factored in, the industry supports nearly half a million jobs and generates a total of $90 billion annually in economic activity. If we increased the U.S. national recycling rate to 75 percent by 2030, we would generate nearly 1.5 million new jobs.”

Other key findings of the report were:

  • Up to 50% of the U.S. population may lack convenient access to curbside recycling for commonly recycled materials like bottles, cans, and newspapers.
  • Companies are required to pay for collection of materials in Europe, Canada, and other markets, but fight accepting that responsibility in the U.S.
  • Many companies also fight container deposit legislation – the most successfully demonstrated method to increase recycling rates, yet only operating in 10 states.

I agree with one of the recommendations of the report: “Increasing our ability to recycle packaging successfully will lead us closer to developing a circular economy in which raw materials are captured and processed to re-enter commerce many times over, thus increasing resource efficiency and reducing greenhouse gas emissions and our reliance on nonrenewable natural resources.”

Since clear PET plastic bottles can be recycled nearly endlessly, one of the best ways to accomplish this is to pass bottle bills in more states in the U. S., so we can increase the domestic supply of recycled PET. We also need to pass legislation to keep recyclers from selling the PET containers to China so that American companies like Plastic Technologies Inc. won’t have to buy recycled PET from other countries.

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Posted in Energy, Environment, Jobs, Manufacturing, Technology | No Comments »

Entrepreneurial Spirit Molds Success of Plastic Technologies Inc.

Tuesday, September 22nd, 2015

During my tour of manufacturing plants in the Toledo, Ohio region last month, I decided to write an article about Plastic Technologies, Inc because of the interesting story about Dr. Tom Brady who founded the company in 1985. When I interviewed Dr. Brady last week, he told me that when he worked for Owens-Illinois, Inc. from 1971-1984, he had become the VP and Director of Technology and had led the development of the first PET (polyester) plastic soft drink container and had directed the technical activities for all of O-I’s plastic product lines.

When I asked him what led him to start PTI, he said, “In late 1985, I happened upon a unique opportunity to start the company. Several of the major Coca-Cola bottlers were seeking to expand their already successful PET bottle manufacturing operations and to develop new and innovative PET plastic soft drink packaging products. The four largest Coca-Cola regional bottling cooperatives agreed to jointly sponsor and fund product development and engineering projects, and they approached me to manage those project development efforts. Not having an interest in just changing jobs, I made a counter offer to those Coca-Cola cooperatives to establish a separate independent company for the purpose of managing their projects. When they agreed, I left O-I to start Plastic Technologies, Inc. and signed long term contracts with all four Coca-Cola cooperatives.”

Dr. Brady also said, “Because of my industry experience, I was quickly able to identify additional customers that were non-competitive to Coca-Cola and I hired a small, but highly experienced professional staff, to do the technical development for the Coca-Cola Cooperatives and for other customers. Because of our professionalism and experience, we were quickly able to establish a reputation in the industry as a high quality PET R&D and technical support company. As our technical staff expanded and our revenue grew at compound annual rates of 35%, we moved to a larger facility in 1989 and set up both analytical testing and process development laboratories, with the capability of prototyping and testing PET containers and preforms. We founded Phoenix Technologies International LLC in 1991 in nearby Bowling Green, Ohio and have since then expanded the plant three times to produce recycled PET using proprietary technology.

Because PET had become the material of choice for new packaging during the 80’s and 90’s, we were able to quickly expand our customer base and to become involved in developing many different products and businesses, including health care packaging, plastic recycling, specialty compound development, and even leisure products. Our experiences outside the PET packaging field provided a basis for us to hire additional technical professionals to staff our laboratories and establish a reputation in the plastics industry as a substantial technical development company.

Since those early days, we have developed relationships with most major manufacturers, resin suppliers, machinery builders, brand owners, and converters. Today, we even supply preforms for blow molding to customers needing specific quantities or unusual designs. We have also learned how to work effectively with competitive customers andwe have become recognized for our excellence in protecting customer intellectual property and confidentiality. Today, our customers are involved in every step of the PET value chain from raw material supply through end of life recyclability.”

I asked if they were affected by the Recession of 2008-2009 and if so, what did they do to survive it? Dr. Brady said, “The recession did have a big effect on PTI’s business, but the recession, per se, was not the most significant issue. Rather, the recession just added to the challenge of changes that were already happening in the world at large. As is true for almost every business today, one of the challenges for PTI today is to redefine its business going forward. Dr. Brady said that what PTI has done successfully for 30 years is no longer as different and special as it once was. The challenge for PTI, and for every business today, is to find the “gaps” in the markets of the future that can be filled by employing the experience and knowledge that has been developed over many years.

Mr. Brady did say that “we had to do some things differently during the recession. We had to get more professional about sales because there are many more companies selling the same technologies and services now. The biggest impediment to our continued growth is that there are more competitors, so that staying ahead of the competition is a bigger challenge.” When he started the company, he was working with the top levels of management at his major customers. Now, he says that business is being done at a different level. More business is handled today by professional purchasing agents, so you have to be more price competitive than in the past. They also went through formal training in Lean, which has been beneficial to their manufacturing businesses, because, he says, “You have to be more efficient to be competitive in every aspect of your business today.” However, the Lean initiative didn’t affect PTI’s testing lab. Rather, becoming ISO certified has had more of an impact on that lab.”

Since I had seen a whole wall of patents PTI had been granted on display at their headquarters, I asked if the change in patent law under the America Invents Act of 2011 affected his company. He replied, “We have to take the steps to be “first to file” instead of being able to rely on being “first to invent.” We have to file more provisional patents than we ever had to in the past, which adds another big burden and costs that we didn’t have previously. Our number of patent applications has shrunk now that we can’t depend on being first to invent. Anything that adds bureaucratic activity becomes a burden on business.”

After my visit, I had emailed Dr. Brady information on the proposed patent legislation (H.R. 9 and S.1137) and asked if these bills would have an effect on his company.” He responded, “You don’t have time to fight everything that comes up. You try to work around it. In fact, we find that patents are less valuable than they used to be. It is more important to be first to the market and to be innovative. Our growth hasn’t been about becoming a bigger and bigger company. We started Phoenix Technologies and our other companies so that those teams could be more entrepreneurial themselves. Our growth model has been to expand by creating our own “Intrapreneurs,” by offering those intrapreneurs ownership and by growing as a family of companies. Our PTI family of companies now includes two manufacturing companies, two technical development and engineering service companies and three joint venture companies that license technology or sell specialty services to the packaging industry (Preform Technologies LLC, Phoenix Technologies International LLC, PTI Europe SARL, PETWall LLC, Minus 9 Plastics LLC and The Packaging Conference). Today, many PTI employees are owners and are in a position where they can truly feel it’s their company. Any employee can be considered by the management team for an opportunity to buy an equity stake, and 40% of PTI employees are owners today. We have more than 200 employees worldwide and many of the products you buy every day are sold in plastic containers designed by one of our companies.”

During my visit, I was astonished to learn that there are only 11 states that have bottle deposit programs to encourage recycling ? California, Connecticut, Delaware, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont. In these states, about 80% of bottles are recycled, while in non bottle-deposit states only about 20% of bottles are recycled. I asked why more states didn’t have bottle deposit programs, and Dr. Brady responded that many major companies oppose the programs because they say it would add to their costs. Dr. Brady explained, “You have to have an infrastructure in place to get enough material to make recycling profitable. However, he emphasized that everybody, even those who think deposit systems cost more money, would win if there was more recycled material, because the costs for virgin material would go down. He also pointed out that a lot of the recycled material goes offshore to China and other Asian countries because it is cheaper to ship the material in the empty containers that are going back to Asia than it is to ship the material to Ohio. We are a big enough company that we can buy recycled material from other sources in Mexico, Canada, South America, and even Iceland, and, we also benefit because we put it back into the highest value end-use products ? food and beverage containers. Dr. Brady pointed out that when China and India get to our standard of living, there isn’t going to be enough of all raw materials to go around. That means that reusing all materials will eventually become necessary and that recycling will become a significant industry, rather than to remain a “nice thing to do.”

During our interview, I learned that Dr. Brady had taken a leave of absence from the company in 2009 to become the Interim Dean of Education at the University of Toledo. He said, “At first, I was judged by the faculty and staff at the college to be a poor choice as the interim dean. However, I actually had the advantage of being completely dependent upon the expertise and experience of the faculty and staff at the college. I made a personal commitment to get to know each and every person in the college and to understand the personal and professional backgrounds of everyone. As a result, we were able to work together to craft a mission and strategy for the future and to create a climate of success going forward.”

Therefore, I wasn’t surprised to learn that Dr. Brady’s grandfather founded the University of Toledo’s college of secondary education. His mother, an aunt, his two sisters and both grandmothers all taught school. He doesn’t just “talk the talk”; he “walks the talk.” When he was interviewed by Plastic News prior to being inducted into the Society of Plastics Industry Hall of Fame in, 2012, he said, “My goal is to help anywhere I can to make education better. If we don’t educate our kids in this country, we’re lost. Our only competitive advantage is being able to be entrepreneurs. The rest of the world can catch up in everything else, so we better figure it out. And, there are not going to be enough unskilled jobs in the future, so you better educate people so they can go out and create their own jobs.”

Dr. Brady emphasized the importance of education and training in the whole economic development equation by saying, “In a sense, I think I could reduce the entire economic development issue to just this one issue. That is, if we spent every one of our economic development dollars on building a world class K-16 education and training system, I truly believe that economic development would happen naturally as a by-product of that initiative.” He reiterated a point that he had made to the mayor of Toledo a few years earlier:

  • Higher per-capita income is a by-product of higher-paying jobs
  • Higher-paying jobs are a by-product of knowledge-based commerce
  • Knowledge-based commerce is a by-product of education and talent
  • Talent and education are by-products of a superior K-16 school system, substantive trade and skill development institutions, and a superior teaching and research university.

I completely concur and made similar points in my book, Can American Manufacturing be Saved? Why we should and how we can, as well as the several blog articles I have written about workforce development and attracting the next generation of manufacturing workers. Manufacturing jobs are the foundation of our economy and the middle class. We must strengthen our manufacturing industry to create more jobs if we want our children and grandchildren to have an opportunity to live the “American Dream.”

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San Diego’s Invention Contest Showcases Innovative Products and Technology

Saturday, August 29th, 2015

The San Diego Inventor’s Forum held its 9th annual invention contest on Saturday, August 15th at Coleman College’s Kearny Mesa campus to see which product would come out on top as the best technology or consumer product invention of 2015. San Diego is no stranger to innovation. In 2013, the Organization for Economic Co-Operation and Development (OECD) ranked San Diego as the second most innovative city in the world and the most innovative in America. This contest kept the innovation momentum rolling.

Adrian Pelkus, President of the San Diego Inventors Forum, said “Over two dozen patented or pending inventors entered the contest this year. Further proof how inventive San Diego is! All the inventors that exhibited were super creative and ready for market. Thanks to all that entered and congratulations to the winners. I wish all of you the best on your ventures, and we look forward to seeing your product on the store shelves soon!” Ten finalists were selected to compete for best consumer product and five finalists were selected for the technology category.

The event was lively this year after the second inventor, Shane Cox, demonstrated that questions posed to the inventors by members of the 150-person audience could be broadcast over the PA system as the QBall was tossed from person to person. Cash prizes were awarded to the first and second place winners in each category. There was a tie for second place in the consumer product category. The winners were:

First Place

  • Consumer Product: REMEDI™ – a new antibiotic that Dissolves Airborne Diseases
  • Technology: Blue Marble, Inc. – Individually app-controlled solar sprinkler heads, drip valves, and sensors (don’t need batteries)

Second Place

  • Consumer Product:
    • QBall: a throw-able ball containing a wireless microphone designed to encourage audience participation by voice amplification
    • IR SkullCap – a high performance, smart-foam insert for hats or beanies to reduce impact to the head
  • Technology: Intruder IDTM Camera System – a solar-powered, easily-installed, self-contained wireless system including a motion sensor, noise maker, and camera to deter and catch intruders bent on burglary, property damage, or graffiti “tagging”

The Solamatic ® Solar Technology in Window Treatments came in as a close third in the Technology category. The Solamatic ® automatically opens and closes blinds with sensors that detect daylight and weather. Inventor Marin Caspa, President and CEO of VSI Technologies Inc., demonstrated how the technology works by darkening the auditorium while simulating the rising sun with a spotlight. As the “sun” rose and set, the device opened and closed window blinds in sync with the cycles of day and night. For further information, contact Martin Caspar at caspa1@solamatic.com.

David Horrigan of Horrigan Labs is celebrating his fourth win at San Diego Inventors Forum annual contest for his REMEDI™. Mr. Horrigan discovered this formula when he was developing biocides for nail fungus as part of his CoolToes™ treatment for onychomycosis. Another formula made the cut for that treatment, but this product was very effective for other things. “The patent pending formula is made from two natural oils extracted from food. The vapors from this formula dissolve the wall of fungus, mold, bacteria and viruses. Because it is the vapors that do the work, the antibiotic can attack pathogens in places where other antibiotics can’t go like the sinus cavities and lungs. A client was looking for a fungicide suitable for removing mold on fruit,” stated Mr. Horrigan. “I tried it on strawberries and grapes, and it proved effective at controlling those molds. I then tried it on numerous other pathogens, and surprise, it controls the microbes that cause eight of the 12 diseases on the president’s list of Fast Track diseases, or diseases that are out of control or cause great financial hardship to the country ? diseases like howlie rot, ringworm, tuberculosis, influenza, and antibiotic resistant or flesh-eating diseases.”

REMEDI™ will be going to market as a consumer home fungicide available through direct response and through dealers. Horrigan Labs is seeking licensors for distribution for the consumer medical applications under the name Neomycosin™. These products will be manufactured in the USA. For further information, contact Horrigan Labs at davehorrigan@cox.net.

The big winner for 2015’s technology invention was Blue Marble, Inc., with its intelligent irrigation system. Founder of Blue Marble, Paul F. Sabadin, showed off the system of app and weather-connected individual sprinkler heads, drip valves, and soil sensors. California’s drought accentuates the value of this impressive technology, which works directly with existing irrigation systems to enable precise control, turning on only individual heads and valves that indicate a need while leaving other heads and valves off, conserving water, saving money, and lessening irrigation’s environmental impact. The devices are solar-powered and were touted as being 100% battery-free and therefore expected to last for decades on agricultural farms or in residential gardens. “We envision a day where Blue Marble will deliver the perfect drink to every plant on every farm, every apple in every orchard, and every blade of grass on every lawn,” said Sabadin. The company has launched a crowdfunding campaign for the technology at Kickstarter.com.

Mr. Sabadin had referred to his product as an “Internet of Things” startup and when I asked why, he said, the “Internet of Things” is perceived by many to be the next social/industrial movement with respect to the integration of the Internet into the fabric of global society. As differentiated from the social Internet, or “Internet of People” where peoples’ data, communications, affairs, and accounts have been subsumed into the global Internet, the “Internet of Things” does the same for physical devices, essentially making devices first class citizens of this global network, having implicit identity, voice, and interacting with other physical “things,” in addition to being controlled by and exchanging data with the Internet of people. For me, being an “Internet of Things” developer means that my systems and devices leverage connections to the Internet to optimize benefit for the end users of our products … to use the internet to manage the physical world to optimal benefit. For example, I use both wireless and wired connections to retrieve Internet weather to optimize irrigation and water savings while, at the same time, I enable system users (people, of course) to monitor and control their systems over the Internet. It is an extremely exciting field and capability that I have imagined and wanted to work in all my life. Technologies, society, and economies have reached a nexus where implementations of this interconnected world are being quickly realized. Blue Marble is smack-dab in the middle of this movement.”

He stated, “Winning the SDIF contest is a great honor. For tech startups it is a great challenge to garner visibility in a crowded world and this honor both validates and adds welcome momentum to our work. While I sat in the audience watching the other contestants demonstrating their creations, I thought, “Wow, that device is clever. I could use one of those.” When I was announced as the winner, I was both surprised and flattered. And then I thought, “Wow, this audience and the other creative inventors were thinking the same thing, ‘Wow! Blue Marble! I could really use one of those!’ For a product developer and inventor there really is no better feeling!”
Second place winner in the consumer product category, Shane Cox, founder of PEEQ and inventor of the Qball, said “We were so excited to participate in this competition. We are even more excited that we won second place in the consumer product category!” The Qball, is a throw-able wireless microphone designed to encourage audience participation. Originally designed for the classroom as a fun way to get students to engage and interact, we quickly realized the need for this type of system in everything from Q&A at events, to Skype calls in the boardroom, and even Karaoke. At only $150 everyone can be a part of it. Keep an eye out for our upcoming Kickstarter campaign. You know you want one!” For further information, contact Mr. Cox at shane@peeq.us.

The other second place winner George Flint, founder of Impact Reduction Technologies and inventor of the IR SkullCap, said “We developed the technology to reduce impact for people across all walks of life. Using high performance, smart foam technology, we are developing products that help reduce impact to the head and body when added to apparel. The first retail ready product is the IR SkullCap, which can be inserted in any type of hat or beanie. Initial testing has shown that it reduces impact to the head by 60%. “For further information, contact Mr. Flint at info@irapparel.com

Second place winner in the technology category, John Baranek, inventor of the Intruder Id, said “Winning second place was a big boast to our team efforts to develop an easy to install, affordable intruder system using the latest advances in solar power and wireless technology. We’ve done proof of concept, but now need to make a working prototype system to do a beta test in conjunction with a local law enforcement agency. In these days of budget cuts for law enforcement, it will be a great aid for law enforcement to have a picture of the intruder to make it easier to catch repeat offenders. We want to make the system so easy to install and affordable that a “grandmother” can do it herself.” For further information, contact John Baranek at jwbaranek@verizon.net.

Other consumer product contestants were:

Rodolpho Brasolin for his collapsible, portable rack for all types of boards, such as surfboards, snow boards, kite boards. It is easily attached or removed from a wall when changing residences. A standing rack not requiring attachment to a wall is in development for athletes who travel.

Joe Buttici for his Pand-A-Choo stuffed doll with a movable right arm and sound to train children to cough or sneeze into their elbow.

Michael Kadie for his Pocket Rocket – a dual USB port that can charge two devices at the same time, featuring a car adapter, Lithium battery, and LED flashlight.

Dean McBain for his wall outlet and light switch gaskets to help prevent the following: Bed bug infestation, Toddler electrocution & choking, saves on heating and cooling costs, makes the wall outlets vanish, helps prevents home and office fires, prevent exposure of toxic gas, cigarette smoke exposure and toxic mold exposure through the wall outlet.

Houman Nikmanesh for his Bixpy Aqua Booster – a portable water jet with modular capabilities to act as a hand-held diver propulsion device, a paddleboard or kayak motor, and even a water pump with available attachment.

Anna Vasquez for her patented spotlight built into the front of a portable iron.

The other technology category contestants were:

Michael Kadie for his Simple Solutions Inclusive Lithium-ion master battery management system with a wide variety of potential applications for the safety and longevity of battery packs.

Dean McBain for his patented Alive Biometric Authentication Identification Security System Solutions, which combines one or more biometric signature sensing identification sensor(s) to authenticate the operator, coupled with physiological sensing sensors to verify the individual is “Alive”. The system then analyzes their physiological condition. If the individual’s condition is within their set parameters, then operation/access is granted through the device or system to the individual.

This was the sixth invention contest that I have attended, and the products and technology presented by the contestants were the most technically developed and market-ready of any previous contest. The availability of Kickstarter and other crowdfunding mechanisms is providing the opportunity for inventors to get their products into the marketplace faster than ever. It was exciting to see the progress of so many of our San Diego Inventors Forum members. Our meetings are held at the conference facilities of AMN Healthcare in the Carmel Valley area of San Diego the second Thursday of every month at 6:30 PM. Our meetings cover topics such as harnessing creativity, patents, trademarks & copyrights, licensing, how to select the right processes and sources for manufacturing (which I give), video and internet marketing for inventors, finding funding, and planning and giving presentations. Meeting presentations are recorded and can be viewed on YouTube.

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New Textile Dyes and Fiber Could Generate Paradigm Shift

Tuesday, August 11th, 2015

It is rare to encounter a technology that is so disruptive that it has the potential to generate a paradigm shift, and I had that opportunity last month when I interviewed Suzanne DeVall, founder and president of PBO, Inc. Her patented technology for utilizing the bi-product from tobacco plants to create a new textile fiber and natural dyes could generate a paradigm shift in the textile and leather industries.

I first met Ms. DeVall over four years ago when I was a managing member of a small business incubator for startup companies in the “clean technology” field. She was too early stage for our program, as she was going through a lengthy R&D stage, but I kept in touch with her to keep informed of her progress because I thought her technology had great promise.

In my recent interview at her office in Palm Springs, I asked how and when she got the idea of utilizing tobacco plants. She said, “I’ve been involved with the textile industry for over 30 years and have been a champion for organic materials. From 2007 to 2009, I was part of a small team who traveled to growing areas in Europe and the Middle East to set controls for certified organic textiles. In Turkey and Syria, I saw organic tobacco fields near cotton fields. Tons of plant material was going to waste since they only harvested the leaves for tobacco products, and I thought it would be interesting to see if a textile fabric and natural dye could be produced out of the tobacco plant bi-product. I began working with scientists in the Carolina Research Triangle along with key scientists in the tobacco agricultural and harvesting industry to verify that there was a large amount of raw material resources to support a large scale industrial project.”

I told her that I had written about the devastation of the southern textile industry in my book due to mills closing after transferring textile manufacturing to China, India, and other Asian countries. The textile industry lost 57% of it jobs from 2000 – 2010, and North Carolina had a large number of textile companies, so was the state most impacted by job losses in that industry. It was no wonder that North Carolina scientists were interested in a new textile fabric and dyes made from one of the state’s major crops.

Ms. DeVall continued, “With the assistance of leading scientists, we began converting the tobacco plant bi-product into a viable textile dye. After thousands of trials, our work led to the AvaniTM Color System to be sold under our wholly owned subsidiary, Dimora Colours, Inc., and I was issued a patent on April 8, 2014. We convert our extracted liquid base to a one-step and two-step powder process that is water-soluble. Our research also resulted in a “spinable” fiber that could be woven into fabric, but you can’t patent a fiber any more than you can patent fabrics made out of cotton, silk, flax, hemp, or wool.”

I asked why organic dyes are important, and she said, “The apparel industry is a seven trillion dollar a year industry that uses an astounding 8,000 synthetic chemicals, so it has a big pollution problem. The World Bank estimates that 17 – 20 percent of industrial water pollution comes from textile coloration and treatment. They have identified 72 toxic chemicals in our water solely from textile dyeing, 30 of which are permanent. This is a serious environmental issue for the industry. The U. S. EPA and other national and international agencies have placed increasingly strict regulations on the manufacture and use of synthetic colorants. The pigment and dye industry has had to develop the technology necessary to analyze and remediate pollutants in wastewater.”

She added, “Consumers have the mistaken illusion that synthetic fibers and dyes in clothing are safe. Your skin is the largest organ of elimination and absorption—what goes on the skin goes in the body. When toxins are absorbed through your skin, they are taken-up by the lymphatic system, then into the blood stream and eventually the liver to remove the toxins from your body. Your skin also keeps you healthy by actually eliminating about one pound of toxins daily.”

Our process doesn’t need the pre-treatment, washing, soaping and adding of enzymes, so it only takes three hours compared to the 8 to 10 hours of the traditional dyeing process. With our organic materials, we do not require harmful chemicals for processing the fibers and dyes. Our one-step and two-step powder process is a key development for saving energy, water, time labor and shipping costs. Our dyeing process saves about 60% of labor, energy, and water.”

 

I asked how she came up with that figure. She said, “We have been in clinical trials with major dye houses in the United States, Japan and Europe over the past 18 months with great success. We ran dyeing trials using our dyes at three companies, and these companies told her that it saved them about 60% of labor, energy, and water. They don’t have to heat water for so many different batches to do the pre-treatment, dyeing cycle, soaping, washing, and enzyme treatment.

She added that they use a water filtration system prior to delivering the colorant to the fibers in the final stages. “The water required for our closed loop system does not have to be of a high quality as our process purifies the water. The remaining water is then reused for the next batch. Our water system utilizes the content of the discharge and neutralizes it to a PH of 7.0; which is alkaline not acidic. As this discharge is neutralized during our process, the water is not only safe, it is also drinkable. This is a very attractive and cost-effective major benefit to third world countries where water is a scarce resource.”

 

Ms. DeVall then showed me many different samples of fabric, household textiles, and leather that had been dyed using her proprietary dyeing process. She showed me samples of cotton, hemp, silk, cashmere, and her tobacco fiber in addition to combinations of all of these fibers. The colors were so rich and vibrant that I wanted something made out of every different fabric. The colors ranged from a soft butter yellow to a rich dark purple. The leather was so soft that I thought it was deerskin, but she said it was just normal cowhide. The natural properties of her tobacco plant based dyes have a softening effect on leather that reduces the amount of tanning required.

I next inquired about the industries that could benefit from the AvaniTM Color System. Ms. DeVall responded, “In addition to the apparel industry, our dyes could obviously be used by companies producing household linens and textiles. But there are several other industries that could benefit from using our dyes, such as the leather goods industry, furniture manufacturers for fabric and leather upholstery, paper and packaging, and cosmetics. Our dye powders could also be added to PET material that comes in a powder to make colored bottles and containers without any added chemicals.” This made me think of the company I visited on my plant tour in Toledo, Ohio, Plastic Technologies, Inc., because they make clear and colored bottles and containers out of PET material.

This led me to ask how they plan to market their products. Ms. DeVall replied, “We plan to obtain licensing agreements with companies in different industries and regions of the world. We have discussed a license agreement with several dye manufacturers to process all our major orders. We would provide the technology and they would provide the processing facility and produce the dyes on a royalty arrangement. We have secured our first license agreement with a company in Japan to sell in Japan, Korea, and Taiwan.”

On my drive back home to San Diego, I felt as if I had been given a rare gift of an encounter with a visionary whose knowledge, experience, and tenacity had given birth to a new technology that could indeed generate a paradigm shift in more than one industry and make our global environment better in so many ways. I look forward to writing a future article about PBO’s success.

 

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Northwest Ohio’s Advantages as a Manufacturing Location

Thursday, July 30th, 2015

I was recently provided the opportunity to tour manufacturing plants in the Toledo, Ohio region by the Regional Growth Partnership (RGP), a privately held economic development corporation. Coming from drought-stricken San Diego where everything is brown to the lush green of Toledo was like being in paradise. I was even more impressed by the diversity and use of advanced technology, automation, and robots at the companies we visited. These were no “rust belt” companies.

John Gibney, V. P., Communications and Marketing, of RGP, was our tour host for the five plant visits we did over a two-day period. There were three of us journalists on the tour, Jill Jusko from Industry Week, Jenny McDonald from Manufacturing News, and myself as a freelance journalist. Also along were photographer Ana Duee from JobsOhio and Hannah Dixon of Development Counsellors International, RGP’s Public Relations firm that selected us for the tour.

As a 100 percent, privately funded economic development organization, the Regional Growth Partnership can operate beyond political boundaries. Investors include major corporations in the region, banks, utilities, universities and service providers such as law, finance, and insurance firms. The RGP offers a full range of traditional business development services, working in collaboration with its partners across the region to expedite and simplify the site selection process.

The RGP vision is that “Northwest Ohio and the adjoining Michigan region will be a premier global location for business and a leader in knowledge-based economic growth.” Their mission to achieve this vision is that “We will be the primary, private sector contributor to a collaborative regional economic development enterprise driving growth in jobs, capital investment, and wealth to Northwest Ohio and Southeast Michigan.”

The RGP serves as Northwest Ohio’s network partner for JobsOhio, “a private, nonprofit corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.” The RGP is one of the six regional economic development partners of JobsOhio, known collectively as the JobsOhio Network. The Network “provides the necessary connectivity to achieve a One Firm, One State approach to selling Ohio.”

I asked John if the region had lost any major companies or divisions of during the depth of the recession, and he responded, “No, we did not lose any corporations. We had cutbacks and layoffs during the depth of the recession, but no actual company relocations.” He added, “We had a peak unemployment rate of 13.8% in June 2009 for the Toledo Metropolitan Area, but it dropped down to 4.8% by May 2015.

I also asked John what has been their biggest success story of recruiting a company to locate in their region, and he replied, “Brazilian firm Valfilm North America purchased the former Dow Chemical Company plant in Findlay, saving the 55 employees left over from Dow. The company expects to add an additional 80 jobs with capital investment in excess of $13 million. Findlay beat out sites in South Carolina and Texas in a competitive search process.”

In data provided by RGP, I noted that out of a total workforce of 635,057 in the 17-county Northwest Ohio region, there are 172,805employed in Manufacturing. I calculated that nearly 25% (24.8) of the workforce have associate, bachelor, or graduate degrees, and 63.7% are between the ages of 25-54, so it is a younger workforce that most regions.

As a director on the board of the San Diego Inventors Forum, I was most interested in the fact that “the RGP created Rocket Ventures, a business assistance and pre-seed venture capital organization that operates in an 18-county area of Northwest Ohio. Rocket Ventures, LLC’s mission is to prepare technology-based start-up companies for funding and sustainability by providing intensive business assistance, enhanced management services, and pre-seed investments. Its vision is to create high-tech, high-wage jobs and to generate wealth in Northwest Ohio. Eligible clients of the organization possess significant intellectual property for revolutionary technologies.” I know how important it is for startup ventures to be able to get the investors they need to go complete their product development process and get their product successfully launched in the marketplace.

The Regional Growth Partnership’s business development efforts are focused on six primary cluster industries:

  • Advanced & Alternative Energy
  • Advanced Materials & Manufacturing Technologies
  • Automotive
  • Bioscience
  • Food Processing & Agribusiness
  • Transportation & Integrated Logistics

Toledo and Northwest Ohio have been called the “Solar Valley” because of having nearly 2,000 people working in industries related to photovoltaic development. “Moving forward, Toledo and Northwest Ohio are uniquely positioned for success in the solar industry due to a manufacturing and glass-making heritage, world-class research and educational facilities, thin film next-generation photovoltaic expertise and supply chain resources and logistics. In addition, the State of Ohio in 2010 designated Northwest Ohio as a Solar Hub of Innovation.”

Two of the companies we visited are in the Advanced and Alternative Energy industry cluster and one was in the automotive cluster.

The first company we visited on our tour was First Solar, Inc., the largest solar assembly plant in North America and the overall company is the world’s largest manufacturer of thin film Cadmium-Telluride (CdTe) photovoltaic modules. Founded in 1999, First Solar was the first solar company to produce 1GW in a single year, break the $1/watt manufacturing cost barrier, and implement a global PV module-recycling program. While the company headquarters is in Tempe, AZ, the U. S. manufacturing plant is located in Perrysburg, a suburb of Toledo, to be in close proximity to their glass technology that is centered in the Northwest Ohio area. They have installed 10GW worldwide and have 3GW in their contract pipeline. After watching a video about the company, Mike Koralewski, Sr. Vice President, Module Manufacturing, Jim Koedam, Plant Manager, and Jay Lake, Manager, Manufacturing Training, gave us a tour of the main manufacturing building at the Perrysburg site that houses four production lines making their solar panels. The campus includes over one million sq. ft. of floor space and they are converting a warehouse to another production building. They have about 1,300 employees in Perrysburg. They also have six manufacturing plants in Malaysia.

We next visited the Rossford plant of Pilkington North America, Pilkington is part of the NSG Group, one of the world’s largest manufacturers of glass and glazing products for the architectural, automotive industry and technical glass sectors.? Founded in 1918, the company was transformed in 2006 with the acquisition of Pilkington plc, itself a global leader in the glass industry and the inventor of the Float Glass process.? The Pilkington name was retained as a brand for the Group’s architectural and automotive products.

Pilkington North America has five float glass lines in the U.S. ? Rossford, Ohio (2); Laurinburg, North Carolina (2); and Ottawa, Illinois (1). The company has approximately 4,700 employees in North America. The Rossford plant makes float glass for the automotive market and also fabricates glass for specialty transport vehicles, such as farm equipment.

V. P. of Sales and Marketing, Stephen Weidner, conducted the tour for us and told us that the Rossford plant has about 2.5 million sq. ft. of floor space and the glass float production line is as long as a football field. At the beginning of the line, the furnace melts the pure Silica in the form of sand, limestone, and other ingredients into a liquid at 2900o C, which is cooled down to 1,050o C as it floats over the liquid tin and then further cooled down to about 200o C by the end of the line, where robots handle the glass until it is scored and broken into the right size for the end product, stacked into “books” of glass, and cooled enough for human handling. This production line was truly an amazing sight to a person who is fascinated by all types of manufacturing processes.

We next visited the General Motors Powertrain plant in Toledo where the six and eight-speed transmissions are manufactured. Plant Manager Joseph Choate gave us an overview of the division and a plant tour of both the six and eight-speed transmission production lines. This plant has about two million sq. ft. of floor space and about 2,000 employees (1,844 hourly and 184 salaried). One interesting note is that he showed us a picture of the solar panels on a portion of the roof of the building supplied by First Solar, providing 10% of their power.

As a sales rep who has sold every kind of metal casting processing, I have never seen such complex, intricate die castings as those supplied to GM. I was also impressed with the integration of robotics and automation with the human production line workers, which essentially made their jobs easier to perform, ergonomically safer, and more varied because every worker is cross-trained for every job in both the six and eight- speed transmission lines. By the end of these three tours, I felt I had walked five miles.

We ended the day by meeting Paul Toth, Jr., President and CEO of the Toledo/Lucas County Port Authority, at the site of the development of the Overland Business Park, an 80-acre site being redeveloped. He told us that it was originally the site of the Willys-Overland plant that converted from bicycle to automotive manufacturing in 1910 and produced the Jeep brand products from the 1940s through 1987, when it was purchased by Chrysler. He said, “The Port Authority purchased the property in 2010 Chrysler during their bankruptcy reorganization and has razed the plant, except for one of the brick smokestacks.” Extensive grading is being done to level the land to provide easier access to the nearby I-75 interchange and two active Class 1 rail lines. We saw the first of several planned Class 1 spec buildings that is nearly finished. What was very interesting to me is that the Toledo Port Authority’s jurisdiction is not limited to land adjacent to Lake Erie or the two tributary rivers as the San Diego Port Authority’s jurisdiction is limited to land adjacent to the San Diego harbor. The Port Authority operates the Port of Toledo, Toledo Express Airport and Toledo Executive Airport, also known as Metcalf Field, and acquired Central Union Terminal from Conrail in 1994, which was rededicated in 1996 after a $3.1 million renovation.

In addition, the Port Authority entered the business finance arena in 1988 and has assisted in financing close to 300 economic development projects representing a total investment of more than $1 billion while helping to create and retain more than 15,000 jobs. The Toledo-Lucas County Port Authority operates the Northwest Ohio Bond Fund.

On day two, we first visited Plastic Technologies, Inc. (PTI), located in Holland, where Chairman and founder Thomas Brady, Ph.D., and President and COO Scott Steele gave us a thorough company overview and tour of their facility. PTI is the leading industrial source for preform and package design, package development, rapid prototyping, pre-production and material evaluation engineering of PET bottles and containers. PTI manufacturing capabilities include injection molding of preforms and blow molding utilizing these injection molded performs. I have seen the extrusion type of blow molding being done here in San Diego, but had never seen blow molding using injection molded performs, which is a much faster process.

We concluded our day with a visit to Surface Combustion, which is celebrating its 100th anniversary this year. Dan Goodman, V. P. Sales & Marketing said that Surface Combustion was founded in Bronx, NY in 1915 to utilize patents covering a heating concept called “surface combustion.” The company relocated to Toledo in 1924 to serve the growing Midwest industrial base and Toledo glass industry. Surface Combustion has used its technology to design and build a diverse array of thermal systems (furnaces) and equipment, such as atmosphere and vacuum furnaces, atmosphere gas generator equipment, and steel mill equipment. It became a family-owned business when William Bernard, Jr. became the majority owner and President in 1998. The 66,000 sq. ft. plant has four manufacturing bays capable of assembling equipment that could be as tall as 25 ft. and as long as 35 ft. in the highest bay, utilizing their 20-ton overhead crane.

There is interconnectedness between four of the five companies we toured. NSG Pilkington makes the glass that First Solar uses to manufacture their solar panels. GM Powertrain has First Solar panels installed on its building. GM Powertrain either directly or indirectly uses heat-treating equipment produced by Surface Combustion. The common reason why all these companies are located in the Toledo region is the abundant source of natural gas as an energy source. The Northwest Ohio region offers some of the lowest industrial electric rates in the Midwest (4.73 cents per kilowatt-hour for industrial electricity.)

A trained, educated workforce is also another advantage of the region served by the Regional Growth Partnership. In addition, recent tax reforms in Ohio have reduced the tax burden by up to 63%. Toledo is located with a day’s drive of nearly half the U. S. and Canadian industrial markets representing nearly 100 million people according to data from the Port Authority. All of these factors add up to making the Northwest Ohio region an attractive manufacturing location.

However, I can’t say it better than what President and CEO Dean Monske said at our dinner, “I am born and raised in the Toledo area but I have traveled the world extensively and gotten the opportunity to witness and experience a wide range of diverse economies. For me, I still come back to Toledo as the perfect place to build your business and love your life. So, yes, I am a passionate champion of this region. But for the Regional Growth Partnership, our biggest cheerleaders in selling Northwest Ohio are the corporate leaders who have lived around the world and chosen this area to live and raise their families. They are our greatest advocates.”

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Patented Technology is Key to RoadLoK’s Success

Tuesday, July 14th, 2015

There is no lack of ingenuity and innovation in the U. S. today. Each year, thousands of new products are invented, and but most are never produced. Knowing how to use technology to create a product doesn’t mean you know how to manufacture it and get it to market. Obtaining a patent is a key factor in achieving success, but you also need to recognize the limitation of your knowledge and expertise and utilize experts in fields you need, such as product design/engineering, patent/licensing, material/process selection for prototyping and production manufacturing, and marketing.

I recently had the opportunity to interview Adam Xavier, founder and CEO of New Hampton Technologies dba RoadLoK Security, who is an example of an inventor and entrepreneur who successfully got his product patented and into the marketplace.

His company distributes products worldwide under the brand name RoadLoK. The company specializes in the design and production of model-specific vehicle locking systems for motorcycles, scooters and off-road power sports vehicles. The RoadLoK is the only locking system that safely and effectively prevents rollaway theft. The system is designed to be permanently mounted on a motorcycle, thereby eliminating the need for storing the lock while riding. The system’s permanent mounting eliminates all momentum, making it virtually impossible to damage calipers and fenders. This is accomplished while also protecting the rider, should the rider forget to unlock the system before attempting to ride off.

I asked how he got the idea for his product, and Adam said, “My twin brother Eric and I were sitting in the outside seating area of a bar the summer after we graduated from college and saw a man forget to take off his lock and tip over his motorcycle. We started talking about a better idea for a lock and drew a sketch on a napkin. The next day, we searched to see if there was a lock similar to our idea, but didn’t find one. We took our sketch to a CAD designer to turn our idea into a design that could be manufactured. A friend from college, Matt Tomosivitch, who had become a machinist, made our first prototype. Matt is now the chief engineer of our company.

Continuing, Adam said, “We made a video of our lock that showed how it worked. We wrote a comprehensive 60-page business plan. We filed for a provisional patent in July 2005. Then, we sent our video to local investor network group in New York and were kicked down to the group in our area, Orange County. The director contacted us, and we gave our pitch in December 2005. We got our first investment check from the Orange County Capital Development Group on February 16, 2006. This investment was enough to get us to our first trade show in March, the International Motorcycle Show in Atlanta, GA.

Adam said that they set up their first office in Middleton, NY and later moved to Newburgh, NY. They spent two years of R&D to finalize the design and raised another $3 million over three years to get into full production. They used 3D printing to make new prototypes as they improved the design. They received a lot of mentoring and hands-on help from their angel investors.

Their first utility patent was granted on December 23, 2008 after their third attempt at an “office action” at the patent office. They got their second patent in 2010.

When they started the company, Adam said that they wanted to keep everything made in the U. S. They used www.thomasnet.com to find all of their vendors. They have seven major vendors for all of the different parts of their product, and they are located in Illinois, North Carolina, New York, and Texas. Their mission is to produce a high quality product, so all of their vendors are ISO 9001-2008 certified to meet the exacting requirements of their customers.

They later moved to California because they needed to have face-to-face communication with their two biggest customers, one located in Murrieta and one in Corona, CA. California also has the biggest population of motorcycle riders.

The executive offices are now located in Santa Monica, CA, but their product is manufactured in Salisbury, North Carolina and assembled to order at their plant in Torrance, CA. Since the RoadLoK is produced to order, production is not automated and does not utilize any robots. They are looking at doing more vertical integration of parts manufacturing. Their screw-machining vendor in Chicago makes two parts, and the patented design of their locking pin has 5 components made by three different vendors.

They started to implement lean principles in 2009 and changed one component from a square rod to an extrusion, which reduced material waste by 62%. They have been working towards reducing other material waste and time since then.

Their original plan was to focus on after-market sales of the product for the first two years and then license the product to motorcycle manufacturers on a non-exclusive basis similar to how the airbag is licensed to car manufacturers. Now in its 9th year of operations, RoadLoK’s largest customers are KTM Sportmotorcycle and Ducati with others to be announced within the next year.

When asked how his company has been impacted by competition from offshore in Asia, Adam said, “We don’t have any direct competitors offshore, just cheaper substitute locking mechanisms. We are selling in Australia, Japan, and China and recently selected a company to partner with to produce parts in China to sell to the Chinese market. We have started the process to file a patent in China. We need to have manufacturing plant in China to sell to the Chinese market because of the high import duties. Brazil is another county we are looking at to set up a manufacturing plant because of the high import duties. There would be a win/win benefit of jobs to the community and provide a much-needed product for the people.”

I naturally asked how the recession affected his company when they were only a little over two years old when it started in late 2008. Adam said that they were spending about 85% of their time setting up a distributor network and program to sell to dealers utilizing direct sales persons. But, motorcycles are purchased with discretionary income, which dried up during the recession as people lost their jobs. So, their direct sales to motorcycle riders through distributors/dealers dropped drastically. To survive and grow, Adam said, “We had to reduce our direct sales staff and reduce our travel costs. We changed our sales model to online retail sales and direct sales to motorcycle manufacturers. This model has helped us grow and succeed. We have also started R&D on the next generation of vehicle immobilizers to other two or more wheeled vehicles that do not have a transmission.”

Adam had read my article on “Which Patent Reform Bill Doesn’t Destroy the American Patent System?” and said, “Our having a patent pending was key to getting investors and having a patented product has been the key ingredient to our success as a company. Investors want the protection of a patent, but they wouldn’t take the risk of being made personally liable. There is no way that we could have gotten investors if our investors had been personally liable for defending our patent in a patent infringement lawsuit.” Note: Adam was referring to the “Loser Pay’s provision of H. R. 9 and S.1137.

If we want to have more successful companies manufacturing products in America, then we need to protect our American Patent System and stop H.R. 9 and S. 1137 from being passed. Instead, we need to pass the Strong Patents Act of 2015, S. 632, which will “Enact balanced reforms to reduce abuse while sustaining American leadership in innovation.”

 

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Which Patent Reform Bill Doesn’t Destroy the American Patent System?

Tuesday, May 19th, 2015

In 2011, the Leahy–Smith America Invents Act (AIA) changed our patent system from a “first to invent” to a “first to file.” It also created easier ways to invalidate patents, called Post Grant Opposition procedures (PGOs). These PGOs are now invalidating 76% of the patents at which they are directed. Now, there are three patent reform bills in consideration by the House and Senate that are all purporting to fix some of the problems generated by AIA Act. They are:

The PATENT Act, S.1137, sponsored by Senator Grassley (R-IA), was sent to the Judiciary Committee on April 29, 2015 and would “amend title 35, United States Code, and the Leahy-Smith America Invents Act to make improvements and technical corrections…”

The Innovation Act, H. R. 9, sponsored by Rep. Bob Goodlatte (R-VA) was sent to the House Judiciary Committee on February 5, 2015 and would also “amend title 35, United States Code, and the Leahy-Smith America Invents Act to make improvements and technical corrections…”

The Strong Patents Act of 2015, S. 632, sponsored by Senators Chris Coons (D-DL), Dick Durbin (D-IL) and Mazie Hirono (D-HI) to “Enact balanced reforms to reduce abuse while sustaining American leadership in innovation.”

The first two bills are the result of the expenditure of hundreds of millions of dollars to lobby Congress by large corporations such as Google, Microsoft, Oracle, etc. over the last 8 years to produce a “patent troll” narrative and then fix the fictional problem of “patent trolls” with these bills.

Many consider the worst provision of both bills the “Loser-Pays with Joinder clause,” which means that 1) a patent holder who tries to defend a patent and does not prevail is potentially liable for the infringer’s legal costs (easily $1,000,000+), and 2) interested parties are joined in the liability. This means that the inventor could be liable for millions of dollars if he is unsuccessful in defending his patent against infringement, and an investor could be personally liable as well. With the odds of losing so high, Loser-Pays makes it impossible for almost all inventors to enforce their patent rights against patent pirates or ever get outside investment.

Under The Innovation Act (H.R. 9), a university could be liable for millions of dollars if patents created and licensed through university research were unsuccessful in defending against infringement. The university could be held liable for the legal costs of the infringer if the patent holder did not prevail in the patent infringement case because of the Loser Pays with Joinder clause.

The PATENT Act (S. 1137) exempts universities and pharmaceutical companies from the Loser Pay with Joinder clause, but makes it worse for small inventors. There is now a requirement that a patent holder certify that he has the funds for the Loser Pays liability before he can sue for infringement (easily $1,000,000 plus). This will eliminate the ability of virtually every independent inventor to defend a patent. And, if an investor provides the funds, he will be personally liable for the Loser Pays (piercing the corporate veil and throwing away hundreds of years of corporate law).

Randy Landreneau, founder of Independent Inventors of America, states the following regarding the exemptions: “It is shameful that we have a political system where groups with political influence get favored while the rest of us suffer. Universities and drug companies will still have patent protection, but the independent inventor, the individual the American Patent System was created for, will be destroyed. This is an all-out attack on a most basic and important part of America. This is arguably the worst and most damaging legislation in American history.”

Both of these bills would do considerable damage to the patent system, specifically harming inventors and small patent-based businesses. If either of these bills becomes law, inventors and small businesses will not be able to enforce their patent rights against large corporations with deep pockets while corporations like Google, for example, would still be able to enforce their patents against small businesses with devastating consequences to those small businesses.

Paul Morinville, Founder of US Inventor stated, “For the last two years, inventors have lost the large majority of patent cases. Post grant opposition procedures (PGO) created in the America Invents Act (AIA) invalidate patents at rates above 75%. Article III courts invalidate patents at similar rates under the indefinable “abstract idea” category of subject matter ineligibility. Today, inventors are losing more cases than at any time in the 224-year history of the U.S. patent system.”

He added. “Patent litigation is about risk and cost versus reward. If risk or cost is too high in relation to reward, an inventor or a small business cannot enforce a patent. This bill creates enormous risk and cost, and consequently it creates a patent system without inventors. An infringement suit can cost millions of dollars for each side. Prior to the American Invents Act (AIA), it was possible to protect small inventions from patent infringement. But, with the huge increase in inventor losses due to the AIA and the indefinable “abstract idea,” only inventions with exceptionally large damages can be enforced. It’s simple math, damages must exceed the cost of the case plus the cost of risk. Thus, the high damages bar would make the vast majority of patents unenforceable by inventors.”

In an opinion article in The Hill, Robert Schmidt, co-chair of the Small Business Technology Council, wrote, “H.R. 9, purported to solve a patent troll problem, is instead the next step in crushing competition from new small firms, creating “Big Tech Patent Ogres” that can ignore smaller players and their patents. This new bill makes it almost impossible for small technology startups to enforce their patents… H.R. 9 will retard innovation and cost America jobs and wealth. H.R. 9 is contrary to the Founding Fathers’ Constitutional intent, contrary to the policies of 220 years of patent law, and contrary to stated intention of the President and Congress to stimulate innovation.”

In contrast, The Strong Patents Act, S.632 would be good for all inventors ? individual, small businesses, universities, and large corporations. It would “would effectively crack down on the abusive practices of so-called patent trolls without weakening the U.S. patent system” according to the Association of Public Land Grant Universities.

The Biotechnology Industry Organization (BIO) “supports the STRONG Patents Act of 2015 and will continue to advocate for passage of legislation to curbing abusive patent practices, while not undermining the ability of patent owners to defend their inventions and businesses against infringement.”

Landreneau states, “The Strong Patent Act would rein in the Post Grant Opposition procedures so that they are more like federal court procedures used in invalidating property rights, rather than administrative procedures designed so that 76% of patents they are directed at are invalidated.”

Another advantage of this bill is that it “Eliminates fee diversion through the establishment of a new USPTO revolving fund in the U.S. Treasury.” It also “Empowers the Federal Trade Commission to crack down on abusive patent-related demand letters.”

Senator Coons’ website makes the following convincing argument for the importance of preserving a strong patent system:

  • “IP-intensive industries comprise one-third of U.S. GDP ($5.5 trillion), generate 27 million jobs, and pay employees over 30% more than other industries.
  • 75% of venture capital investors consider the value of patents when making funding decisions in small businesses (97% in the biotech industry).
  • Patents inspire innovation in fields that require long-term investment in R&D: from life-saving therapies to new generations of wireless technologies.
  • Patents allow us to benefit from the genius of small inventors. With a strong patent right, individuals create inventions that disrupt dominant companies. 
  • U.S. leadership in innovation is due in no small part to an unrivaled patent system. Strong patents today provide for game-changing inventions tomorrow.”

There is no question in my mind that the Strong Patents Act is the only bill that truly protects American innovation. As a director of the newly incorporated San Diego Inventors Forum, I join our board President, Adrian Pelkus, in urging everyone to contact their Senators and Congressional representatives to urge them to oppose the House’s Innovation Act (H.R.9) and Senate’s PATENT Act (S.1137) and vote “yes” on the Strong Patents Act of 2015 (S. 632).

Pelkus said, “We could lose everything if either of the two bad bills were passed by Congress. It could usher in the end of innovation as we know it and make it impossible for individual inventors to raise the money they need from investors to get their new products into the marketplace.”

Now is the time to fight with us to keep innovation alive and well in America and not allow large corporations to squash individual inventors.

 

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Additive Manufacturing is Making Rapid Technological Advances

Tuesday, April 7th, 2015

Advances in additive manufacturing and 3D printing are occurring so rapidly that there is now a daily newsletter on 3D printing for which I recently subscribed. Design News, Industry Week, Manufacturing.net, and many other publications are also publishing frequent articles on additive manufacturing, and most trade shows are now scheduling one or more sessions related to the topic of additive manufacturing/3D printing.

The latest e newsline from Manufacturing.net had the headline, “Liquid Printer Turns 3D Manufacturing Upside Down” and describes the new 3D printer introduced by Carbon3D at the TED conference on March 16. The new “3D printer can print up to 100 times faster than conventional additive manufacturing thanks to its ability to ‘grow’ materials upward from a pool of liquid,” using “their Continuous Liquid Interface Production (CLIP) technology, which builds material upward in a continuous stream.” The Carbon3D printer uses UV light to trigger “polymerization, the creation of three-dimensional polymers, while oxygen inhibits the reaction” and “can be used with a broad range of polymeric materials.”

Dr. Joseph DeSimone, the CEO and co-founder of Carbon3D, said “Our CLIP technology offers the game-changing speed, consistent mechanical properties and choice of materials required for complex commercial quality parts.”

A couple of weeks ago, I was contacted by Zach Simkin, Co-President of Senvol LLC, a company that does analytics exclusively for the 3D printing industry, letting me know that they recently launched a tool, the Senvol Database, which is the first and only searchable database for industrial 3D printing machines and materials. Simkin said, “Users are able to search the database by over 30 fields, such as machine build size, material type, and material tensile strength. The database is online and free to access. The database already has thousands of regular users since launch, many of whom are engineers across a variety of verticals.”

A few days later, I interviewed Annie Wang, Co-President of Senvol LLC, and she said, “Additive manufacturing is never going to replace 100% of subtractive manufacturing.” She emailed me the Video link to their presentation from the RAPID Conference last year ? “Determining Cost-Effectiveness of Additive Manufacturing.” She also emailed me the write up from the Wohlers report (“Cost-Benefit Analyses for Final Production Parts”), which gives an overview of two case studies that they did for GE and Johnson Controls. She said, “We used the Senvol Algorithm to determine whether or not it’s cost-effective to switch from conventional manufacturing to additive manufacturing.”

While the results of the analysis are proprietary, Wang and Simkin provide guidelines in the introduction of their study, writing, “However, just because a part can be produced using AM does not mean that it should be. Prior to implementing the technology, it is essential to conduct a thorough cost-benefit analysis. Generally speaking, it is often stated that AM is economically suitable for parts that have the following features: low volume, complex, and small. Although this can be true, it is not sufficient to only consider features of the part. Rather, when trying to determine whether a particular part can be cost-effectively produced using AM, it is critical to analyze the entire supply chain.”

In the report, they provide “… the seven supply chain scenarios that tend to lend themselves well to AM. If a part falls into one or more of these scenarios, then that part may be cost-effective to produce via AM. If a part does not fall into any of these scenarios, then the part almost certainly will not be cost-effective for AM given the current AM technology.” They are:

Scenario Description
 

Expensive to Manufacture
Do you have parts that are high cost because they have complex geometries, high fixed costs (e.g. tooling), or are produced in low volumes? AM may be more cost-efficient.
 

Long Lead-Times
Does it take too long to obtain certain parts? Are your downtime costs extremely high? Do you want to increase speed-to-market? Through AM, you can often get parts more quickly.
 

High Inventory Costs
Do you overstock or understock? Do you struggle with long-tail or obsolete parts? AM can allow for on-demand production, thus reducing the need for inventory.
 

Sole-Sourced from Suppliers
Are any of your critical parts sole-sourced? This poses a supply chain risk. By qualifying a part for AM, you will no longer be completely reliant on your current supplier.
 

Remote Locations
Do you operate in remote locations where it is difficult, time consuming, or expensive to ship parts to? AM may allow you to manufacture certain parts on-site.
 

High Import / Export Costs
Do you pay substantial import/export costs on parts simply because of the location of your business unit and/or your supplier? On-site production via AM can eliminate these costs.
 

Improved Functionality
AM can enable a part to be redesigned such that its performance is improved beyond what was previously possible.
© Senvol LLC

Just like a Total Cost of Ownership analysis is beneficial to determine whether or not to offshore the manufacturing of a particular part or product or return manufacturing to America from being manufactured offshore, Simkin and Wang state, “For parts that fall into one or more of the above scenarios, a detailed, quantitative cost-benefit analysis is warranted. To conduct such analyses, an algorithm, courtesy of Senvol, was used to determine what types of parts can be more cost-effectively manufactured using AM versus the status quo. The algorithm analyzes an array of variables that span the entire product life cycle.”

I told Wang that 3D printing is greatly accelerating the development of new products by the inventors that I advise as part of the San Diego Inventors Forum, but there are many times that a part can be made by 3D printing that can’t be replicated in a production process. For example, you can produce “chunky” plastic parts using 3D printing that cannot be made in the production process of injection molding. The use of 3D printing is enabling inventors to have a sample part to show/demonstrate in person or by means of a video to secure potential investors, but the inventor needs to do a careful analysis of the best manufacturing process to use for production, depending on where it will be used (home, office, or outdoors), product certifications required, and projected life cycle volumes, among other considerations. A 3D printed sample can be the essential ingredient of a video to do a crowdfunding campaign via Kickstarter, Indiegogo, or GoFundMe.

I told her that I give a presentation each year at our meetings on “How to select the right manufacturing process and sourcing location for your product,” which incorporates the Reshoring Initiative’s Total Cost of Ownership analysis. We agreed that companies could benefit from doing a cost-benefit analysis of comparing conventional manufacturing to additive manufacture as well as doing the Reshoring Initiative’s Total Cost of Ownership analysis when making the decision to manufacture in the U. S. vs. offshore.

Posted in Innovation, Manufacturing, Reshoring, Technology | No Comments »

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