New center provides high-tech advice at low price.

Federal, state subsidies make consultants affordable

Thousands of manufacturers in Los Angeles County are losing a competitive edge because they aren't operating efficiently, said John Chernesky, executive director of the California Manufacturing Technology Center in Hawthorne.

The center, set up six months ago to stem the exodus of manufacturers from the area, has provided technological and business assistance to 145 companies statewide, said Chernesky.

He said every company evaluated so far "has had strengths and constraints that kept them from being world-class manufacturers."

"We find companies continually not taking advantage of on-the-shelf technology," he said. "Some fail to grasp the technology evolving around them because their most valid concern is survival."

The center, located at El Camino College, is one of seven manufacturing technology centers across the country that were established through the Technology Competitiveness Act of 1988. The centers are designed to be technology brokers between sources of advanced manufacturing technology and the small and medium-sized companies that need such technology.

The centers offer a wide range of services that are typically too expensive for small businesses. Because the centers are subsidized with a host of federal and state grants, they are able to offer services for a fraction of the cost of private-sector providers of such services.

No area seems to need such a center more than Los Angeles County.

Southern California is home to 30,000 of the state's 49,000 manufacturers, said Chernesky. And the majority of those are clustered in the South Bay area of Los Angeles County, he said.

With the radical consolidation of the defense and aerospace industries, and the lingering recession, some 250,000 manufacturing jobs have left L.A. County since 1989.

The California Manufacturing Technology Center in Hawthorne was set up with federal and state grants totaling $34 million, allocated over a six-year period. The National Institute of Standards and Technology, which is part of the U.S. Department of Commerce, provided the center with $12.9 million. The rest is coming from the California community college system, the state's Employment Training Panel and the state's Trade & Commerce Agency.

Chernesky said the center's services are available to any manufacturer in the state which employs fewer than 500 people. He said the center's staff advises companies on a range of issues, but their real specialty is performing detailed assessments of businesses. Consultant fees charged by the center range anywhere from free to $50 an hour, compared to $150 to $500 an hour in the private sector.

Assessments, which involve examining every aspect of a business -- from its books to its manufacturing processes -- typically cost between $2,000 to $4,000. In the private sector, such assessments typically cost about $14,000, said Chernesky.

Since May, the Hawthorne center has hired 23 engineers to act as consultants, he said. On average, the engineers have 11 years of production shop floor experience and about half of them have master's degrees in business administration, he said.

Ultimately, the center would like to hire 42 engineers and perform detailed assessments of 500 companies a year, as well as help 2,000 others through seminars and workshops, said Chernesky.

After the current grant money runs out in 1999, the private sector would have to come up with one-third of the center's operating funds. The remaining two-thirds would hopefully be covered by new federal and state grants, said Chernesky. Because the private sector currently contributes much less than one-third of the center's operating costs, consulting fees would likely increase after 1999.

Chernesky said it's too early to tell whether the center has been instrumental in keeping businesses from fleeing the area.

But at least one of the center's clients said, if it hadn't been for assistance from the center, her business would probably have been extinct within five years.

Muffie Alejandro, president of East L.A.-based Jan-Al Innerprizes Inc., which makes shipping containers for a variety of uses, said her business was facing extinction because of environmental regulations outlawing certain solvents, as well as because of the rising costs of lumber.

With the center's help, she said, her company is exploring "new avenues in packaging."

Her company builds custom-made containers that can last through 100 trips. They can house anything from space-bound satellites to earth-bound shoes. She wouldn't say what new manufacturing processes and product lines her company is exploring, but she said the center is helping her find government funds for her idea.

Along with exploring new packaging ideas, she said, the center's staff gave her company management tips.

Meetings, she said, are now short and quick, and employees are encouraged to share their ideas. Any employee who offers an idea that helps production is given a pin with the company's logo -- a red rhinoceros. Employees are also given guidance in time management while on the job.

Instead of being mired in the day-to-day running of her company, Alejandro said management is now freed up to explore research and development.