Tackling talent and new technology in the manufacturing workplace: Talking with Spencer McMillan of McMillan Electric Company

Spencer McMillan is Vice President of Sales and Marketing, as well as Manufacturing, for McMillan Electric Company, a manufacturer of precision-built fractional horsepower electric motors, located in Woodville, Wisconsin. The family-owned organization has been in business since 1976.

What are the biggest challenges in your industry?

We compete primarily against overseas and Mexican manufacturers, which have lower labor costs, so we have to find a way to continuously bring newer and better designs and offer high-quality products while still running an extremely efficient operation. As our products become increasingly sophisticated, we rely more and more on technical talent. For example, today we need people who know firmware, can write motor software, and/or can design hardware for control boards. Being in Woodville, Wisconsin, it has always been a little tougher to recruit people. The Twin Cities metro area “bubble” is expanding, though, as more people choose to live in places such as Hudson, WI. That’s good news for us, as it puts us ever closer to the population center.

How are regulatory or policy changes creating new opportunities?

We have seen a big shift in our business due to evolving energy policies. The drive toward energy efficiency is good for us, because it pushes manufacturers in the direction of the type of motors we produce. For example, the Department of Energy’s new fan energy rating (FER) standard for furnace fans goes into effect in July of this year, meaning that all new furnaces sold must use higher efficiency motors. Another example is the Underwriters Laboratory 507 compliance standard for electric fans, which favors products with higher efficiency motors.

As a family-owned manufacturer, what are you doing to stand out as an attractive place to build a career?

First and foremost, we focus on continuing to be a great place to work. We offer industry-competitive starting wages and benefits, as well as profit sharing and attractive flexibility policies. But we believe a good workplace goes beyond those things. Being a family-run company creates a positive work environment that feels like a family – and we want it that way. Every year at our Christmas party, we announce the people who have been with us for at least 30 years. This past year, we announced more than 60 people – an amazing number for a workforce of 220. As we add new types of talent to our team, we want to make sure we are hiring the right people and then retaining them so that we don’t have turnover and retraining costs. We recently began experimenting with a few personality tests that assess key personality traits and give insight into how people think, enabling us to gauge fit for a particular role. It has proven very accurate and we intend to integrate these tests into our organization in the near future.

How are you using technology to improve the way McMillan operates?

As noted, we use more firmware in our motors to control and improve efficiency. Beyond that, we look for ways to use technology to improve our manufacturing capabilities and reduce the cost of putting together a motor. We have made large capital investments to compete with overseas pricing. For example, instead of buying certain finished product to use in our motors, we have increased vertical integration by purchasing the machinery to make that product in house. We’ve also added robots in our coil winding area, new and improved testers and more shaft cutting machines. We are also upgrading our information technology. We have spent the past year looking at ERP systems and are in the midst of an ROI calculation. This is a huge step for us, but when you are competing against billion-dollar global enterprises, you have to be as efficient and effective as possible.

What advice would you give to other leaders in your industry?

You always have to be innovating and improving. Particularly when you are competing with manufacturers around the world, you can’t afford to take a week off, because your competition is always pushing and getting better. My other piece of advice is to have and communicate a clear vision for the company, so that everyone understands the goals for the next year, three years, and 10 years and how you expect to get there. We have our company’s competitive strategy spelled out in a document that we update quarterly and annually.  The document has our core values, the company’s purpose and target market and it always has our vision outlined from quarter to quarter and year to year.  It is the company’s identify and vision all in one.  We also have a company meeting every month where the company shuts down and all employees attend. We talk about what is going on with the business, how sales are doing, new products, and new customers. People feel more involved when they know what is going on with the business and where we are headed.

What’s your favorite thing about living and working near the Twin Cities metro area?

I grew up in Saint Paul and love living in the area. It is a great place to raise a family. I have friends and family close by – not to mention many great restaurants, golf courses, and the Commodore Squash Club. It also makes commuting easy. When I’m driving to Woodville, everyone else is driving toward the city and I am going the opposite direction. I can set the cruise control and enjoy the nice drive.