Darlene Miller, the star of the new Chamber ad, is the CEO of Permac Industries, in Burnsville, Minnesota. image here: http://permacindustries.com/_mod_files/ce_images/header/newsevents.jpg

On its "Outsourcing Management" page, Permac Industries states:

Today’s complex manufacturing often necessitates the participation of more than one player in a project.  That’s why Permac offers outsourcing management, a process where Permac teams up with other global suppliers – inside the U.S. as well as offshore – to get the job done. But from the customer’s vantage point, they’re only dealing with a single source: Permac. http://www.permacindustries.com/about/services/unique-services/outsourcing-management/

2004: Miller Explored Outsourcing Parts Manufacturing to China to Save on Labor Costs

In February 2004, it was reported that Darlene Miller, owner of Permac Industries, was exploring ways to outsource parts manufacturing to China as a way to save on labor costs.

Miller who confirmed she was exploring the China option, said she must cut costs to maintain a customer base for the company, which had gross revenues of $3.5 million in 2003.

"Honestly, I don't feel like we'll survive if we don't consider doing this," Miller said. "If we've become a global economy, we absolutely have to do this. Some of the parts we do are pretty complex, so the chances of moving them or the materials would be tough. But there's a lot we do that can be moved over there."

Miller said contracting with a company in China could mean big savings for customers. She estimated she would lose $500,000 in sales this year alone with her current labor costs.

Outsourcing would not mean layoffs for Permac's 27 employees, Miller said. [Saint Paul Pioneer Press, 2/29/04]

Miller Even Traveled to China to Explore Outsourcing Manufacturing

In May 2004, Miller joined a 20 member Dakota County delegation mission to China. The delegation was organized by a local economic development director and included representatives from business and government.

The purpose of Miller’s trip was to explore ways to outsource manufacturing to China as a way to reduce labor costs.

"Do I want to do this? No. Do I have to? Yes," Miller said of her forays into China. "How do you compete with 47 cents an hour?"

Miller was scheduled to visit eight cities in 14 days and had made appointments with several companies.

Miller emphasized that she is pursuing the China option as a way to expand -- not downsize -- her business. She said she had no plans to lay off any employees.

After this visit, I will have picked out one or two sources to partner with," Miller said. "From there we will be doing the sample orders and going into production."

Even with shipping and all other costs factored in, Miller hopes to save at least 60 percent on the parts that she is able to acquire overseas.

Miller’s industry counterparts "feel like it's selling out" to outsource to China. But she believes that if she doesn't do it, "somebody else will." Her mostly male work force -- which labors in a 17,000-square-foot warehouse amid the din of heavy machinery and the aroma of motor oil -- understands her dilemma, she said.

"The guys know we're not trying to sell them out by any means," Miller said. [Saint Paul Pioneer Press, 5/13/04]

Eventually, Miller Outsourced Manufacturing Jobs to China

Miller eventually cut a deal to begin h subcontracting her less-complex, lower-margin jobs to a Chinese manufacturer she spent the past year (2004) identifying, qualifying and training.

Miller didn't have much choice: "Either I did it, or my clients would have done it directly," she said. Under the arrangement, Permac will guarantee quality and remake products if necessary.

She doesn't expect the deal to affect her employment here.

"This allows us to go after more short-run, high-tech business as well as more complex, high-volume contracts," Miller said, citing a recent order for 150,000 parts for blood-separation equipment. "We'll still be hiring." [Star Tribune, 11/3/04]

At the same time, she invested $700,000 in a piece of equipment to give workers in Minnesota better tools for specialized work that demands higher skills than the work she plans to send to China. A side benefit for the company's Burnsville workers is that the work going to China will reduce the need for what at times has seemed relentless overtime. [Star Tribune, 9/6/04]




Star Tribune: Miller Was The First to Go To China

When some of her customers threatened to take their business to China, Darlene Miller went there first.

If her clients were going overseas, figured the president and CEO of precision machine parts maker Permac Industries, she wanted to partner with them. So Miller visited Chinese precision parts makers to evaluate their prices and quality.”

When a customer says, ``We'll just take it to China,'' Miller can say, "That's a great idea, let's work together on this. I've been there, I've got contacts.

"They knew we would embrace it if we had to,'' she said. [Star Tribune,  6/5/06]

Miller Grew Her Business With the Help of an SBA Loan

By 1998, with another SBA loan, Miller had bought the 17,000-square-foot building Permac now occupies. She hopes to build an addition that will double the space, again with an SBA loan. Last year, revenue topped $4 million, and revenue this year is up 20 percent over last year. [Star Tribune,  6/5/06]

2007: Miller Explores Expanding to India

In 2007, Permac Industries President and CEO Darlene Miller scheduled a trip to get a firsthand look at business in India before she decided whether her precision-manufacturing company should enter the market.

"I'm interested in seeing what our competition is all about in India, and if there are any markets there we can serve," she said. [The Business Journal (Minneapolis/St. Paul), 10/15/07]

The U.S. State Department Helped Find Miller an Indian Supplier

With the help of the U.S. State Department, Miller found an Indian supplier in Mumbai who might be able to help her win a contract for 16 million dental tool components.

While India is perceived as an outsourcing threat by many small-business owners, Miller sees the country as a tool to help her 46 employees and $6 million machine shop.

"You can't stick your head in the sand and pretend like competitors aren't out there. I'm going to India to meet the competition. The world is flat. You have to know what's going on," she said. [Star Tribune, 10/27/07]

Miller and the U.S. Chamber of Commerce Helped Sell President Bush’s Stimulus

Permac Industries CEO Darlene Miller and eight other business leaders spoke Monday with President Bush about how the new economic stimulus package will help their companies.

Miller, who owns a high-precision machine shop in Burnsville, said she will use the enhanced expensing opportunities in the stimulus package to buy new equipment now instead of later. She was chosen from more than 60 business leaders to participate in the small phone interview with Bush, arranged with U.S. Chamber of Commerce help.

"We said, `Look, Darlene, you have a great story. Let us share it with the White House,'" said chamber spokesman Giovanni Cortile. "The fact is that she is positive and she is going out and buying equipment. She is not reading the paper and sticking her head in the sand and waiting for the clouds to pass."

With the incentive, Permac will buy an expensive machining center that will help Permac expand into new markets. She'll invest at least $650,000, which is about $350,000 more than planned because of the tax incentives.

"I definitely feel the stimulus package will help not only me but a lot of other small businesses," Miller said. It helps keep costs down, which is helpful in competing, she said. [Star Tribune, 4/8/08; see also: Star Tribune, 4/16/08; Star Tribune, 4/23/08]