lenty of states have a better business climate than that of Massachusetts, as Site Selection's annual state business climate ranking (published in the November issue) illustrates. But Massachusetts does its part to help companies offset employee training costs, and that can make an important difference. It helped convince Carlo Gavazzi Computing Solutions management to remain at its Brockton, Mass., headquarters, for example. The company, a wholly owned subsidiary of Carlo Gavazzi AG, a publicly traded, global electronics group, makes electronic packaging and system expansion solutions.
   Between offshore competition and customers becoming more cost sensitive, Carlo Gavazzi Computing Solutions felt increasing pressure to reduce costs, especially as it works to consolidate operations at one site. The company manufactures all its products in the United States, resulting in higher quality but at a higher cost per unit.
   Carlo Gavazzi Computing Solutions is completely autonomous – the company makes its own sheet metal, does it own machining, fabricates and populates its own boards, runs its own assembly operation, and performs its own painting and silk screening. So lowering costs is a challenge.
   The decision to consolidate its three entities in Massachusetts was based partly on business reasons and partly on history, according to Jessica Isquith, Carlo Gavazzi Computing Solutions' vice president of corporate marketing.
   "Texas or Nevada might have been cheaper, but we liked Massachusetts," says Isquith. "We were founded here, so there was a sense of returning to our roots. Plus, from a business standpoint, we felt there was a tremendous amount of talent here, a surplus of intellectual capital that we could recruit from."    As for the grants, the computer company knows that taking advantage of these funds frees up money for other uses.
   In March, Carlo Gavazzi Computing Solutions received a $176,000 grant from the Massachusetts Workforce Training Fund, an initiative to encourage employee training and economic growth within the Commonwealth. This grant marks the third and largest Workforce Training Fund grant won by Carlo Gavazzi Computing Solutions in three years. The most recent award follows a $30,000 award for ISO certification in 2005 and $50,000 for lean manufacturing development in 2006.
   "Constant improvement is one of our company's hallmarks," says Chris Boutilier, president of Carlo Gavazzi Computing Solutions. "This Massachusetts grant program allows us to invest in developing the skills of our employees as well as the efficiency and the quality of how we do business."
   The grant, supervised by the Massachusetts Department of Workforce Development and financed entirely by Massachusetts employers, will allocate funds to Carlo Gavazzi Computing Solutions over two years to invest in on-site training.
   The financial advantages of these grants go beyond the actual money that the state awards the recipients.
   "Unlike many states, Massachusetts doesn't require the recipients of its grants to give matching dollars," says Isquith. "Instead, whatever amount the state awards to a company, that company is expected to contribute that much worth of time to its people. So if you get a $10,000 grant, you're expected to give $10,000 worth of time to your people. But of course, the number of people who will go through the training, how many hours they will spend, the exact nature of the coursework, must all be clearly defined."
   Carlo Gavazzi's first grant had been provided to assist in bringing the company's prior ISO certification up to the most recent ISO 9001-2000 standard. The objective was to apply for another grant to help teach employees how to work better and to make the company more competitive.
   Ultimately, it was determined that the funds would be used to implement various process improvement initiatives – specifically, "lean manufacturing" techniques.    The only variable left was to decide exactly how the program should be initiated. It was a decision about which Paul Gilchrist, operations manager at the time the award was granted, had some initial doubts.
   "The suggestion was to focus the lean manufacturing techniques on our program for General Electric," he recalled. "We make a single unit for them, and it's relatively easy to make. My first thought was that we should apply the program to an area where we could get more 'bang for the buck.' But to their credit, our trainers suggested that we start with a simpler task and see how things progressed."
   Things went fine – and fast.
   "We changed everything about the GE program, from the way we processed the sheet metal, to the way we kitted it, to the way we brought in product, to how we brought it out to the floor, the works," says Gilchrist. "We had flow charts and value-stream mapping charts up on walls to help us critically examine every aspect of the manufacturing process, no matter how minor. Our trainers kept asking us, 'Why are you doing it that way?' The standard answer was that we had always done it that way, but they wouldn't accept that.
   "People who had been performing their tasks a certain way for a long time suddenly discovered more efficient ways to do those same things. They didn't necessarily learn to work faster or harder, they learned to work smarter. We started changing the smallest things, but they made a huge difference.
   "For instance, we used to throw carts on the floor with all the required parts on them. But we realized that by organizing the parts a little better and labeling them, people could find them more quickly. From a bottom line perspective, the efficiencies enabled us to realize serious cost reductions – not necessarily a large amount per unit, but since we make so many units for GE, it really added up."    And that was only the beginning.
   "Quality went up dramatically as well," Gilchrist added. "In fact, we have been running at 100 percent in final inspection for the last six months, which is an unprecedented figure." Cutting costs through lean manufacturing even helped Carlo Gavazzi Computing Solutions' sales process, as the company was able to lower costs for its clients while still generating profits.
   Naturally, the figures were a welcome outcome, as they are easily translatable to bottom-line results. But just as critical are the less obvious, internal improvements that will make Carlo Gavazzi Computing Solutions better equipped to deal with the highly competitive business climate that defines Massachusetts – especially now that the lean manufacturing principles have been applied to other programs.
   "When you start with a traditional factory environment and transform it, even for a few hours each week, into a learning organization, people get excited and even rejuvenated about their jobs," said Isquith. "The people in the trenches – the direct-labor personnel – begin to feel that their voices are being heard and that they are directly involved in the process. That has a profound impact on employee morale. We had people who left the company and came back because of the training. What's more, whenever we do have turnover, it's much easier to get the new people up to speed since our processes have been dramatically streamlined.
   "Following the success of the GE program, we implemented lean manufacturing on a project for Halliburton, with outstanding results. Using lean manufacturing on GE was the foundation of the way we do business now. And quality has gone up across the board."
   While not a huge sum by corporate standards, the grant money did make the company more competitive.
   "We were already looking at ways to improve our operation," says Isquith. "Constant improvement is one of our company's hallmarks. But the money certainly helped. We thought it was going to provide some assistance, but it actually turned out to be a catalyst to a company-wide solution that's helping us to win our battle in the Massachusetts corporate landscape."