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Trade Secret Protection

The American Bar Association estimates the market value of S&P 500 companies can include as much as 75% of intangible assets. This is quite an increase over a 1975 estimate indicating less than 20% of these companies’ collective market value consisted of intangible assets. A good portion of these intangible assets is intellectual property which includes patents, trademarks, copyrights and trade secrets. As you may be aware, there is now federal jurisdiction for trade secret theft.  The Defend Trade Secrets Act of 2016 (DTSA) was signed into law on May 11, 2016, after being unanimously passed in the Senate and ratified in the House by a vote of 410-2. The DTSA became immediately effective for all trade secret misappropriation taking place after the bill’s signing date.

While many of us might not think of trade secrets (such as the formula for Coca-Cola) as being commonplace, the National Science Foundation estimates that corporations actually employ trade secret protection perhaps two times as often when compared to patents.  As such, trade secrets certainly constitute a significant amount of value of intangible assets for American corporations. Trade secrets can include a formula, practice, process, design, instrument, pattern, commercial method, or compilation of information.  To fit the federal definition of a trade secret, the information must include a) information; b) reasonable measures taken to protect the information; and c) information which derives independent economic value from not being publicly known as defined under 18 U.S.C. § 1839(3) (A), (B) (1996).

A paper co-authored by create.org and Pricewaterhouse Coopers estimates that trade secret theft ranges from 1% to 3% of the Gross Domestic Product of the U.S. and other advanced industrial economies. As such, the federal government chose to create a federal cause of action for trade secret misappropriation in the DTSA. This legislation includes a three-year statute of limitations, and it authorizes remedies similar to those found in current state laws. The DTSA also creates a seizure procedure for use in extraordinary circumstances where the offender “would destroy, move, hide, or otherwise make such matter inaccessible to the court, if the applicant were to proceed on notice to such person.”  While the seizure may be carried out immediately, the new law provides that the court shall set a hearing not less than seven days after the issuance of the order.  Finally, the law protects whistleblowers from retaliatory accusations of trade secret misappropriation, so long as the whistleblowers disclose the trade secret information to government or court officials in confidence.

The DTSA does not preempt existing state law, which will preserve options for metalcasters in regard to whether to file federal or state claims and court selection.  It also notably omits any requirement that a trade secret plaintiff describe its trade secrets with particularity, which helps to protect the sensitive trade secret information after prosecution of the offender.  The criminal provisions of the DTSA increase the penalties for a criminal violation from $5,000,000 to the greater of $5,000,000 or three times the value of the stolen trade secrets to the organization, including the costs of reproducing the trade secrets.

As a result of the legislation, your metalcasting operation may wish to consider four responses to the DTSA after consulting your business attorney:
First, you may wish to update your employment and confidentiality agreements to disclose the whistleblower immunity provisions in the DTSA. If you do so, your metalcasting facility may be eligible to recover double damages or attorney fees in trade secret litigation.

Second, reevaluate your company’s tolerance for bringing trade secrets claims. Many companies have been deterred from making claims in the past because of the uncertainties and delays in state courts. Federal courts, however, have smaller case loads, allowing them to more directly and efficiently manage such litigation.

Third, take inventory of your company’s trade secrets and evaluate the protections in place to maintain the confidentiality of those secrets. Preventative measures are far more effective and less costly at keeping your secrets safe than trying to “re-secure” a trade secret after it is disclosed.

Fourth, develop response plans for suspected misappropriation and for receiving a seizure order. Trade secret litigation tends to move relatively quickly. Having a plan for what to do in the event your secrets are stolen will prevent unnecessary delays that can compromise your rights. 

Click here to see this story as it appears in the April 2017 issue of Modern Casting.


Plant Energy Benchmarking for the Metalcasting Industry

How much energy does it take to produce a pound of finished casting?

The honest answer to this seemingly simple question is: “It depends.”

Why is that?

Energy benchmarking is the tracking of energy use using standard metrics to compare past and future performance. Such metrics sometimes can be used to set usage standards to compare your energy use to similar machines in the same facility or to similar machines at other facilities. But our industry brings significant challenges that complicate the issue.

Efforts have been made to establish energy usage standards for the metalcasting industry by the U.S. Department of Energy (DOE) and others, without much success. An ideal benchmarking methodology continues to be sought, but has not yet been identified.

You can’t manage what you don’t measure. Energy benchmarking requires a regular regimen of data collection of energy consumed correlated in time with the amount of finished product produced. The time interval of the data collection is critical; it will provide your smallest time window into the operations of your organization. Putting time-resolved power meters on major energy consumption devices helps provide a better understanding of your power consumption and provides new insights into your production operations.

Perhaps an analogy is in order. We can easily calculate the actual mileage that our car gets for each tank of fuel. Establish your mileage and you can compare the cars’ fuel cost and performance over time. This is a simple form of benchmarking. Collecting mileage metrics has led to estimated mileage standards by the EPA to help us when we shop for a new car. But such standards are established for only four categories of vehicles, based on two factors: vehicle type (passenger cars or light trucks) and size of the vehicle. As the sticker on the window warns, “Your Mileage May Vary.” Many factors, such as driving style, traffic congestions, tire pressure, etc., will influence the mileage that you get in your car.

Energy usage in the metalcasting industry is affected by many more variables than calculating car mileage. Hold times on furnaces, power settings, energy types and costs, metallurgy type (including which alloy), insulation levels, maintenance issues, outside temperatures, and other operational issues can be the metrics you include in the values to be benchmarked.

Two operations are rarely identical in energy performance—even in the same facility with similar equipment. In fact, performance between different shifts with the same equipment can be significantly different. For example, certain mechanical properties of the final product may require different heat treatments using different amounts of energy.

When benchmarking against the amount of finished product produced, plant recovery operations will greatly affect results. Benchmarking metrics will all be affected by melt loss, planned recovery from machined material losses and unplanned recovery losses, like spills and scrap.

Establishing the Baseline
Tracking essential metrics does not have to be difficult. A spreadsheet can be used to establish basic benchmarking capabilities. This simple analysis is only useful for the case in which the electricity monitored by the meter in this example is primarily used for production equipment and not building HVAC.

If you’re looking for a more comprehensive spreadsheet-based tool, Energy Performance Indicator (EnPI) has been developed by the DOE Advanced Manufacturing Office (AMO). EnPI V4.0 is a regression analysis-based tool developed to help plant and corporate managers establish a normalized baseline of energy consumption. This tool can track annual progress of energy-use improvements, energy savings, Superior Energy Performance (SEP) metrics, and other energy-related metrics that account for variations due to weather, production, and other factors. This DOE tool is designed to accommodate multiple users including Better Buildings, Better Plants Program and Challenge Partners, SEP participants, other manufacturing firms, and non-manufacturing facilities such as data centers. The EnPI add-in can be downloaded at https://ecenter.ee.doe.gov/EM/tools/Pages/EnPI.aspx.

There is a great benefit from energy benchmarking in order to monitor vital metrics within your own organization. It will give you the ability to find serious cost savings, improve process efficiency, and increase production throughput… often with little or no capital expense. Is it time to better understand how a major expense for your company is spent? The choice is yours; the electric bill will continue to arrive in the mail. 

Click here to see this story as it appears in the April 2017 issue of Modern Casting.

 


On the Leading Edge of the Industry

This issue of Modern Casting includes a major focus on additive manufacturing. There are case studies from our industry, perspectives to consider, and perhaps a call to action for your own company. The issue follows the American Foundry Society’s first multi-day conference on additive manufacturing last autumn.

At that conference, held Oct. 3-6 in Novi, Michigan, we had an exciting and close look at how these emerging, disruptive technologies are being used in our industry to produce cast components and what it will mean for metalcasters. We toured facilities that have adapted additive manufacturing as significant parts of their business plans.

Just as additive manufacturing is on the leading edge of our industry, each month our editorial team strives to provide inspirational, informative, and interesting content that helps you and your team be as innovative, productive, and profitable as you can. There are frequent updates on other technological process advances, tips on eliminating casting defects, stories of successful conversions from fabrication to castings, government affairs updates, and insight into ways to engage your manufacturing workforce to perform at the highest possible level.

Speaking of high-performance workforces, AFS is on the leading edge of providing knowledge and skills training for the metalcasting industry. All AFS Institute classroom courses have been revamped to employ adult-learning best practices. For those who prefer training in the convenience of their own facility, the AFS Institute offers most courses as in-plant, company-specific options. Moreover, many dozens of foundries are now employing e-learning from the AFS Institute to develop their talent, as was noted in a recent Modern Casting case study of Charlotte Pipe and Foundry. A skilled workforce can not only improve a foundry, but also differentiate it from the competition.

Metalcasting is a fast-changing industry, operating in an atmosphere of rapid-fire change in the marketplace, the workforce, and in government. AFS has an obligation to help lead the industry successfully through these changes. Modern Casting is one of the essential ways we communicate critical information and advance those aims.

Thank you for your readership, and enjoy this issue.

Click here to see this story as it appears in the April 2017
issue of Modern Casting.


Metalcasting is a Livelihood

In this issue’s cover article “New Melting at Fonderie Laperle” on page 28, the metalcasting facility’s president, Tom Leonard, talks about the importance of the operation to the community.

“These are high-paying, skilled-labor jobs,” he said. “We want to keep the foundry going and keep Canada working. It’s a middle-class job. There’s nothing more middle class than a foundry worker.”

I love this quote. I’ve heard variations of this in many metalcasting facilities across North America, and the statement tells us several things:

•    The jobs in metalcasting can support a family and home ownership.
•    Working at a metalcasting facility means health insurance and peace of mind.
•    Metalcasting bolsters a critical sector of the economy that the Pew Research Center says is shrinking.
•    Some jobs in metalcasting might be physically demanding but they also require problem-solving and critical thinking, which can be personally rewarding.
•    Metalcasting gives a career path, whether it starts in the shop floor or the office.

In short, metalcasting is a livelihood.

I have met metalcasting executives who started at the company in all different areas of the business, from the grinding room to engineering to human resources. They worked hard, partipated in development opportunties, took on increasingly more supervisory roles and eventually became one of their companies’ top leaders.

Metalcasting work is not a dead-end job, and I encourage you to be like Leonard and talk about it. Keep bringing it up—to your local community, lawmakers and job candidates.

And don’t forget to tell your current workforce, as well. Let them know there’s opportunities for growth at your company, both in terms of climbing up the ladder and across the bridge to new markets and new technologies.

Remaining stagnant won’t keep your employees from falling out of the middle class. 

That’s part of what Leonard was talking about regarding Fonderie Laperle’s jobs. Innovating your business is what keeps your workforce well-paid and well-motivated. To keep the business strong and healthy, Laperle invested in new technology that will allow it to be more flexible to meet new customer and market requirements.

Enjoy this issue, and as always, you can share your metalcasting facility’s story by sending me an email at swetzel@afsinc.org. 

Click here to see this story as it appears in Modern Casting.


Simple Steps

Keep it simple.

Sounds easy enough, right? Just do what’s in front of you while keeping an eye on the big picture seems like a fairly straightforward proposition, but we all know it’s not, especially when you’re aiming high and aspiring for greatness.

Author John C. Maxwell knows this, and that’s why 3 Things Successful People Do: The Road Map That Will Change Your Life is a valuable addition to any library.

Maxwell is a bestselling author and extremely prolific. When I went to find a book to review, he seemed to take up half of the business section at my local store, so he clearly knows how to get published and published frequently. His writing style is easy, breezy, straightforward and very readable, and that comes through clearly in this book.

As the title indicates, this book is broken down into three parts, parts that are also the three things:
•    Knowing Your Purpose
•    Growing to Your Maximum Potential
•    Sowing Seeds That Benefit Others

To me, all of the three things made sense. It’s incredibly important to know your purpose, even though people can lose track of that. They get caught up in minor things that distract them and can cause detours. Sometimes, you know where you want to go, but it’s hard to figure out how to get there.

It’s also crucial to benefit others when you’ve been successful. After all, what’s the point of “making it” if you haven’t helped others get closer to reaching their own goals?

The most important of the three things was the middle and meatiest section, about reaching potential. This is the chapter where Maxwell really flexes his muscle, albeit in his laid-back and easy-going writing style. The advice that hit me the hardest is how Maxwell wrote that growth is a choice. In that section, he quotes famed author Leo Tolstoy’s quip,  “Everyone thinks of changing the world, but no one thinks of changing himself.”

For whatever reason, this has stuck with me after reading the book. And, speaking to the power and ability of Maxwell to convey his message, he finishes the same paragraph with “You can choose to grow or fight it. But know this: people unwilling to grow will never reach their potential.”

That’s a pretty powerful paragraph and just one of many that makes this book an important one. It’s important for anybody trying to better themselves but unsure of how to do it.

In fact, I wish I had read a book like this when I was younger. It’s that valuable a roadmap to success, and one anybody can understand.   

Click here to see this story as it appears in Modern Casting.


Offense and Defense

Football season has come and gone, but one of the principal aspects of the sport applies to business advocacy, as well. Football is a game of both offense and defense; a team that hopes to advance to the Super Bowl better be adept at both parts of the game.

The same has applied in the serious world of business advocacy. Businesses such as metalcasting are influenced heavily by public policy, and often for the negative. Regulations are frequently more sweeping and costly than necessary or advisable. Tax policies may discourage investment and hiring.

Permitting processes tend to slow many projects to a crawl. AFS, which has an active advocacy program on behalf of the metalcasting industry, has long had to devote a lot of resources to playing defense against such policies. Sometimes, as in the case of OSHA’s silica rule, we have even had to sue our own government.

Over the past eight years, the opportunities to play offense were few and far between. True enough, there were some important victories, such as the multi-year transportation infrastructure law and a tax package that included a permanent research and development credit. But most of the positive aspects of the AFS agenda were stuck in neutral.

Following the November elections, there is a new interest in Washington in advancing policies that encourage investment, economic opportunity, and business growth. AFS has been in touch with the Trump administration and every congressional office, emphasizing that the time is right for our policy agenda.

That agenda includes reducing regulatory burdens, implementing pro-growth tax reform, strict enforcement of trade laws, investment in infrastructure, smarter future rulemaking, maintaining a strong national defense, restoring voluntary programs at OSHA and EPA, and expanding domestic energy production.

The new opportunities to play offense don’t mean that we can let down our guard on defense. But they do mean that for the first time in eight years, a more positive business climate for the $30.3 billion metalcasting industry is possible. I invite all Modern Casting readers to join us in Washington, D.C. on June 20-21 as we stand together as an industry for a Government Affairs blitz in the nation’s capital.

Advocacy is one of the three pillars of the AFS vision, alongside education and innovation.

Click here to see this story as it appears in Modern Casting.


Flip the Calendar

Come January, it always takes me a couple weeks to get used to writing the new year when I’m signing something, writing a check or dating a letter. I know it’s not 2016 anymore, but by habit there I’ll scribble it, then cross it out and correct it. 

We do a lot of things by habit or routine in work and at home. It makes us efficient and frees up brain space to think about other non-rote things. We don’t need to process how to accomplish a task; the steps have already been mapped out, memorized and engaged.

Pulling together an issue of Modern Casting is the result of routines. Weekly editorial meetings. Daily check-ins. Standard deadlines, copyediting processes, and page design procedures. Before each issue, the magazine team does not have to answer the question, “How do we go about making a magazine? The template has been established.

But as helpful as habit and routine are, like 2016, eventually they become outdated. When that happens, quality—of life or product—suffers.

Because it’s the first month of a new year, January is when many of us think about a fresh start, as trite as that sounds. Fresh starts are needed. The last 12 months have some baggage and they will continue to load us down until we remember to flip to the next year. Perhaps it was the sale that took forever to close or position that could never stay filled or a bottleneck that was perpetually delaying delivery.

This is a good time to examine what continues to work well and what doesn’t. Sometimes, difficult projects are one-offs and just need to be let go. Other times they are signs that the current routine needs to be re-evaluated. So either move on or start figuring out a new way of accomplishing your goal. Don’t keep writing 2016 when it is 2017.

I invite you to share ways you or your company has created an improved routine by emailing me at swetzel@afsinc.org. And because Modern Casting is always looking for a fresh perspective, please send along your thoughts on what you’d like to see in the magazine.

Have a happy New Year.

Click here to see this story as it appears in MODERN CASTING.


Manage Your Time

Time management is one of the biggest issues facing employees and employers today. Whether it’s because of a growing list of tasks, increasingly complicated duties, non-work problems that need to be taken care of, or just an inability to get off Twitter or Facebook during business hours, it feels like managing those precious minutes gets harder by the month for anybody who has even a modicum of responsibility during work.

In his book “Procrastinate on Purpose: 5 Permissions to Multiply Your Time,” New York Times bestselling author Rory Vaden writes knowingly and seems all too familiar with time crunches. He spells out in plain language ways to make your time matter more, and how not to waste it with surprisingly simple and intuitive ideas.

(Not that it matters, but the title of the book is ironic and catchy. It’s not iconic like “Steal This Book,” but certainly memorable.)

To get his points across to the reader, Vaden breaks up his advice into five “permissions” on what he calls a “Focus Funnel.” They are:
• Eliminate: The Permission to Ignore.
• Automate: The Permission to Invest.
• Delegate: The Permission of Imperfect.
• Procrastinate: The Permission of Incomplete.
• Concentrate: The Permission to Protect.

All of these ideas have value and Vaden gets them across impressively efficiently. The part that had the most relevance for me (of course, your mileage may vary) was on concentration. I have a habit of, well, wasting time until I need to get on deadline and have to accomplish something. Sometimes that means I’m rushing a lot more than I should be. And even though I end up getting things done, it’s more stressful than necessary.

It turns out, this is healthy, albeit in the reverse. In the chapter that focuses on this topic, Vaden goes into detail about working double-time at the start of a task when necessary, so you can have free time later. He also effectively mentioned farmers and how they harvest when they have to harvest, that at times there’s nothing they can do to avoid it and how it has to be a priority for them.

(Trust me, this makes sense in the context of the book.)

In general, “Procrastinate on Purpose: 5 Permissions to Multiply Your Time” is a valuable book for any professional who struggles with managing their precious minutes. I certainly fall into that category and will take many of the lessons with me as I continue my writing. And maybe I’ll be more efficient on my next deadline.  

Click here to see this story as it appears in MODERN CASTING.


Time to Boost Economic Growth

In the late 1990s, dot-com companies that had yet to generate a profit were trading at astronomical valuations. Traditional measures like price-to-earning ratios, we were told, were obsolete in an era when eyeballs and clicks were the metrics du jour. It didn’t take long, though, for the market to crash. It turned out the longstanding investment rules developed by the likes of Benjamin Graham and Phillip Fisher were timeless and trusty, not outdated and crusty.

Over the past eight years, there has been another “new normal.” Over that time, the U.S. has failed to enjoy even a single year of 3% economic growth. Not surprisingly, this lackluster performance has led to diminished economic opportunity and tax revenues. Even as the unemployment rate gradually inched back to 4.9 percent, the numbers of people who dropped out of the workforce has been staggering.

This has been the slowest economic recovery over the last 75 years. Some people have bought into the argument that we are destined to perpetual growth rates of 1 to 2 percent. Yet, this seeming new normal need not be a permanent reality. With the right public policies, robust growth is again possible. With that growth would come more demand for products that contain cast metals, as well as other goods and services. Better opportunities for entrepreneurs, and more jobs would also result. In a phrase, a better future.

AFS is waging an aggressive effort to improve the public policies that affect the casting industry. We have taken OSHA to court over its crystalline silica rule, and are a part of separate litigation against EPA over its “clean power” and ozone rules. Our tax system has created an uncertain environment that hinders our industry’s ability to compete, and AFS is therefore advocating tax reform. Metalcasters face trade challenges from trade-distorting policies and practices abroad, and AFS is advocating a more aggressive trade policy to combat these practices to strengthen our manufacturing base.

AFS is also encouraging Congress and the Trump administration to make a commitment to long-overdue investments in infrastructure. Over 30 percent of casting production goes into infrastructure—accounting for 3 million annual tons of castings. Finally, AFS is opposing a recent Treasury Department draft rule that would remove legitimate valuation practices for estate, gift, and generation-skipping taxes.

On the workforce development front, a total of 38 classroom classes have been redesigned over the last several years. AFS is now offering e-learning that makes metalcasting industry talent development more affordable and convenient than ever.

AFS is also playing a leading role in technology development and transfer, which positions the casting industry to meet the ever-evolving technology needs of its customers for many years to come.

Click here to see this story as it appears in Modern Casting


Finding the Fun

Each October the last few years, our office has hosted an event for National Manufacturing Day.

Manufacturing Day’s goal is to celebrate careers in manufacturing and share with the community and students how these industries support our economy. It’s a chance for companies to share what they do with the public. Your organization might even hold an event. We host an open house with a hands-on metalcasting demonstration.

Man, it is fun.

In your jobs, the pressure is on to deliver safe, economic, and attractive parts, and it may not feel like any fun much of the time. Manufacturing Day is the chance to take a break from the deadlines and show others what you thought was so enjoyable about manufacturing and metalcasting in the first place.

Designing something, making a part that has a purpose in the world, is gratifying. The smiles on grade-school kids’ faces after pouring their first small casting is proof of that.

This issue of Modern Casting shares the 2016 AFS Hoyt Lecture from Richard Gundlach. Gundlach dives deep into the science of cast components and their properties with the vigor of someone who truly relishes the topic. For a lighter read, we’ve also included an article giving a glimpse of castings we rely on in the winter, from skiing to snow plowing. 

Once again this past October, AFS and Modern Casting held an open house, and I enjoyed seeing the community and students learn and be excited about the metalcasting industry.

Even more, I like watching those from the industry explain metalcasting and the opportunities it offers as a career and a manufacturing method.

If you are looking for an audience to share what your company is making or how you are solving your customer’s problems, you’ve found the place. Not all projects are headaches—let us know what’s got you smiling.

Click here to see this story as it appears in Modern Casting


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