Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 23, 1994 TAG: 9411160028
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: LEIGH ANNE LARANCE SPECIAL TO ROANOKE TIMES & WORLD-NEWS
DATELINE: MARTINSVILLE LENGTH: Long
The computer software development firm incorporated in 1990 but just this year took off with a product called Winformant. It uninstalls unwanted Windows applications, popular among users who want a quick, easy way to rid their computers of old systems in order to free up memory space.
"We really hadn't planned on producing a commercial product," said Neocom Vice President Fred Herring, 31. But a national firm suggested they try, and sales took off.
So did the business.
"We started with one employee - me," said President Tom Albanese, 31, who runs Neocom with his computer-whiz brother and Herring, a high school friend. The company employs 11 and hopes to double that figure in the next year.
There's a difference between developing software and manufacturing it, though, and the company is ready to broach that new turf.
For help cultivating the venture, Neocom can call on the A.L. Philpott Manufacturing Center and its four-member team of manufacturing specialists.
"Now it's actually the package and so forth that we're getting involved with. It's a tremendous difference," Albanese said. "That's what the Philpott center will help make more feasible."
So far, they've brought in information on sales, marketing and programming, said Herring, who heads up the business's sales and service operations.
"They will do a lot of the legwork and will save us a lot of time and money. We don't have to reinvent the wheel. They've got resources," Herring said. "Our size business is what they're hoping to develop."
Without the center's expertise, it might take a lot longer to have the manufacturing side of the business up and running, from publishing the software to shrink-wrapping it to finding other markets to getting products out the door.
"It's preliminary, but as we grow we expect them to be more involved," said Vice President and General Manager Joseph Albanese, 35.
Preliminary is the operative word.
The Philpott Manufacturing Center is just beginning its work with manufacturers in its service area, which encompasses 23 counties and 11 cities in southern Virginia. The fourth manufacturing specialist joined the team just last month, and the group hopes to hire a fifth by next year.
\ Virginia's General Assembly established the center in 1992 to stem the steady decline in manufacturing employment that occurred during the 1980s. Businesses dependent on military contracts and Defense Department spending have cut back on their work forces, and the center expects others may be hurt by international trade agreements like NAFTA, among the United States, Canada and Mexico, that could pull manufacturing jobs elsewhere.
In a region thin on job opportunities, the decline of manufacturing is no small matter.
The purpose of the center is to rebuild and strengthen the region's existing manufacturing base and improve productivity and performance by offering the equivalent of an extension service, much the way Virginia Tech and the U.S. Agriculture Department have aided farmers for generations.
"Manufacturing is the engine of the economy, and small manufacturers need help," said the center's executive director, John Hudson. In the area served by the center, roughly one in four jobs is in manufacturing. In the rest of the state, that figure is less than one in 10, he said.
Hudson had worked with Neocom before, when he was director of technology assistance and transfer at the Center for Innovative Technology in Northern Virginia. So it was fortunate the firm was getting into manufacturing at the same time the center was coming together.
The center's manufacturing specialists include: O. Bruce Burnette, who has extensive manufacturing experience and contacts throughout the state; Michael P. Levy, whose specialty is quality systems and industrial engineering; Sharon D. Dickenson, an expert in manufacturing systems engineering and process simulation; and Kenneth H. Wessel, whose experience is in business marketing and management.
"Many, many companies have downsized. They have eliminated the type of [management] personnel who do the things we do," Wessel said.
"If you're a small- to medium-sized firm, you don't have the luxury of having extra people to do focused project work, ... and that' s where we're going to help fill in," Dickenson said.
Although the center is based in Martinsville, its staff is not. Three of the specialists work from field offices in Halifax, Emporia and Lynchburg.
Each specialist is responsible for a specific territory and is the initial point of contact for manufacturers in his or her region, but they stress that they work as a team.
"When you call one of us, you get the whole center," Burnette said.
They will coordinate their operations through regular meetings and eventually via the Internet and will travel from manufacturer to manufacturer depending on where their individual expertise is needed.
"For the last couple of weeks we've been understanding each others' skills," Dickenson said.
While each is expert in a different area, they also rely on outside contacts.
"We're just four people, and we can't be everything and everywhere," Levy said.
They've been learning about the resources at the area community colleges and business centers. Hudson mentioned a computer-integrated manufacturing lab at Patrick Henry Community College, part of a $2.5 million addition that should be completed in nine months to a year and will allow the center to demonstrate manufacturing technologies.
"It will let them [manufacturers] test drive concepts before they commit capital resources to it," Hudson said.
Also at the ready are two advisory panels - one for industry and one for technology - made up of manufacturing CEOs and plant managers. Membership on those panels and the center's board of trustees reads like a Who's Who in education, economic development and manufacturing in Virginia.
They include: the presidents of the University of Richmond, Virginia Tech, the University of Virginia and numerous community colleges; Glenn Hunsucker, president and chief operating officer of Bassett Furniture Industries Inc. in Bassett; Cal Ferguson, manager of the Babcock & Wilcox CIM Systems in Lynchburg; Peter Coe, president of Aerial Machine and Tool Corp. in Patrick County; and Robert Skunda, Virginia's secretary of commerce and trade.
Resources reach beyond state borders, however. The center also can access a network of similar manufacturing centers nationwide.
"There is broad bipartisan support in Congress for the concept of a nationwide system of what you might call manufacturing extension centers," Hudson said.
In 1989 three large centers were established in New York, South Carolina and Ohio.
There are now about 29 centers around the country. "We might find the answer for a Virginia manufacturer in California or Massachusetts," Levy said.
Federal funding and support for the centers comes from the National Institute of Standards and Technology.
"The ancestor of this program is the manufacturing technology centers," said institute spokesman Mark Bello. They were designed to give technical assistance and an economic boost to manufacturers struggling in a changing marketplace, and to in turn boost the communities that depend on the manufacturers for jobs.
"The idea is kind of to provide one-stop shopping for manufacturers," Bello said. "So when you get back to the theory of jobs, if you help them become more competitve, I'd say it is working. A lot of companies have reported increased sales, improved productivity, reduction of waste, and new markets."
While this year's talk is of the center's start up and its mission, last year it was suggested that federal support for the Martinsville center followed Rep. L.F. Payne's support for legislation endorsing U.S. participation in NAFTA.
"I think people tried to make an issue out of that because it was coincidental," said Ellis Woodward, Payne's press secretary. The Roanoke Times & World-News last November reported that the day after the 5th District Democrat announced support for the legislation, he met with Vice President Al Gore and, during their discussion, asked that Martinsville be considered as a site for a manufacturing technology center. Days later, the White House wrote a letter in support of the center.
Woodward said Payne voted for NAFTA because he thought it would be good for businesses in the region. "But the timing of it led some to charge there was some direct connection. This is incorrect. Were we going to be able to make that [the center] happen anyway? I think so."
Bello disputes any notion that location of the centers is political. He said they came into being during a Republican administration as a pilot program and still have the support of the Clinton administration, which hopes to increase the number of such centers to 100.
"I think that Congress clearly saw a need and was satisfied with the results," Bello said. He noted that the money comes from matching funds and is directed to localities based on need and the merit of their applications. "It is a competitive process," he said.
The Philpott Manufacturing Center operates as a state agency with its own board, statutory authority and an $800,000 budget: $400,000 in federal funds, $150,000 from the General Assembly, $100,000 in in-kind contributions in the way of office space and amenities, and the balance from private sector contributors.
Although there are other agencies to help manufacturers, there are no plans for more institute-funded centers, Hudson said.
|n n| In the next few weeks the 1,418 small and midsize manufacturers in the center's service area will receive surveys asking them what services they want.
"We'll be asking, what are constraints keeping them from being prosperous and thriving? What do they think their weakest link is that we can help strengthen?" Hudson said.
The responses, which are confidential, will be used to determine whether the center needs to alter its menu of services.
"We think going into this that we have some idea of the priority needs," Hudson said. "But the key is, we're new. To use the carpenter's phrase, measure twice, cut once."
The group in late September started meeting with some manufacturers to define what needs to be done and how the center can play a role.
They'll help with: business planning; marketing and financing; management information systems; ordering and billing; inventory planning; quality improvement; ISO 9000 standards and work force training; and more.
Modernization is another area where the center can help. "That may not necessarily mean state-of-the-art. It may mean moving from the '50s to the '70s in terms of technology," Burnette said.
So far the group is optimistic that the center can help manufacturers in an area of the state hard-hit by a changing economy.
"The initial demand has been brisk," Hudson said.
Companies like Neocom will be a particular boon to Southside Virginia because they will help diversify the manufacturing base - the computer industry isn't subject to the same ups and downs as the furniture industry, for example.
But the center is set up to serve all existing small and mid-size manufacturers in the region, whether the focus is computers, textiles, furniture or metal works.
"We work with them all," Burdette said. "The door is wide open if you're a manufacturer."
by CNB