NJII research helping companies prep for future

Annemarie Appleton, president of Alloy Stainless Products Co., says working with NJII enabled her team to look at processes differently.-(AARON HOUSTON)

The president of Alloy Stainless Products Co. in Totowa credits the New Jersey Innovation Institute for providing her company with a comprehensive framework to save money through improved hiring and retention practices while also breaking into new markets.The president of Alloy Stainless Products Co. in Totowa credits the New Jersey Innovation Institute for providing her company with a comprehensive framework to save money through improved hiring and retention practices while also breaking into new markets.

The 74-year-old maker of stainless steel and specialty alloy pipe-valve and pipe-fitting products includes Knickerbocker Machine Shop, which manufactures products.

“Working with the NJII team was a very energizing experience and it helped spur a lot of creative ideas amongst my team in terms of looking at things in different ways, trying different things and being more creative all around in what we do,” said Annemarie Appleton, company president since 2015 and daughter of co-founder Michael A. Simonelli. “This process enabled them to think about doing something new with different processes surrounding hiring, fixing machinery, getting a replacement for a machine, all kinds of areas.”

Alloy employs about 49 employees at its corporate headquarters and another 15 at its warehouse in Fairfield.

“We are not stuck in old thinking,” Appleton said. “We have to upgrade and do things differently in order to hire better employees. We are looking for people who want to learn and grow instead of wanting to stand and watch a machine.

“I think we are picking better [employees]. I have seen the difference in how my supervisors are picking employees. It’s not just get a man on the machine as fast as possible. They are actually putting some thought and creative energy into the process because they want someone who will be involved in their job. And that’s going to save us money.”

NJII, a corporation of the New Jersey Institute of Technology, is providing government grant-funded research to local companies to help improve their operations. It provided a detailed report from Fraunhofer MarketExplorer — a German provider of affordable applied research that small- and medium-sized firms could not otherwise afford — showing what Alloy could do to break into new markets and develop new products.

Alloy used to struggle to attract qualified applicants and retain employees. Not anymore, said Appleton. The company is hiring as it buys new machines and upgrades the ones it already has.
The industry experienced a drop in orders from 2015 to 2017 due to the low price of natural gas, Appleton said. Gas prices began rising in early 2018, leading to an industry comeback.

“We are a small company with a legacy product that is competing with global production heavy with imports into the U.S.,” Appleton said. “We have a very small market share of this product in the U.S.”

Now Alloy is looking to break into the burgeoning wind energy business in New Jersey.

“We talked about many other things beyond the specifics in the report,” Appleton said. “I think my team benefitted from the outside input into our processes.”

NJII is partnering with about 127 New Jersey companies like Alloy to provide similar services to help them be more productive and reduce costs. These include companies in aerospace and defense, health care, health/information technology, civil infrastructure/sustainability and financial services companies.

American companies historically used research and development to harness new ideas that became innovative products, according to Donald Sebastian, NJII president and CEO. But that trend began to wane within the last 25 years, he said.

“We need a new model because American industry has largely abandoned its ability to conduct large-scale corporate [research and development], which for almost a century has been the basis of our economic prosperity,” Sebastian said. “The Bell Labs and the RCA Sarnoff labs are the places where the great ideas that turned into great products have grown.”

“American industry was too risk-averse to invest in risk reduction,” Sebastian said. “This is about risk reduction. How do we reduce the risk?”

Take health care, for example, where Sebastian’s team is helping companies in the space look for ways to close the gap.

“One of the things that has been introduced is the unwritten story of Obamacare,” Sebastian said. “Everyone talks about Obamacare as an insurance. No one talks about the billions [of dollars] the federal government has pumped into digitizing health care records.”

The NJII Innovation Labs has helped save $135 million in expenses through Medicare and Medicaid by way of a $50 million program, Sebastian said. This cost savings benefits consumers.

“We have nearly 100 employees working on this helping doctors understand the information technology to focus on outcomes as opposed to procedures,” Sebastian said. “The whole new model for reimbursement is that you will get paid for the health of your patient as opposed to just doing procedures.

“The information technology becomes an important way of stratifying patients, identifying what needs to be done for them — when it needs to be done — and providing for the care coordination that connects you to the other physicians.”

NJII is working with defense manufacturers to help them expand their portfolios.

“In a previous generation, companies will spend their whole lives making parts for the military,” Sebastian said. “If you put all your money in stocks, every time the market tumbles, you get a real bellyache. But if you’ve got a balance between stocks and bonds, one goes up, the other goes down. A financial strategy is to balance your portfolio.

“If you are a defense supplier and you put all your effort into making parts for the Air Force and the Air Force budget takes a hit, you could go out of business. In those cases the Defense Department has nowhere to turn because you are out of business. But if 60 percent of your business comes from defense and you can supplement it with 40 percent from somewhere else, then you have a balance.”

Sebastian used an analogy to illustrate the interplay between NJII and the companies it’s working with.

“We are the watering hole,” he said. “Small companies bring the risk tolerance and the new technology and in turn they get exposed or access to advanced test environments, advanced equipment, potential investors and opportunities to sell.”

David Hutter
David Hutter grew up in Darien, Conn., and covers higher education, transportation and manufacturing for NJBIZ. He can be reached at: dhutter@njbiz.com.

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