Innovative Marketing and Sales Strategies

Growing Correctional Industries Program and Profitability

Exercise

Birthright Exercise

◦ Separate into 4 Groups

Youngest Children Oldest Children Middle Children Only Children

◦ Select a spokesperson and determine what advantages there are to your birthright and then sell the rest of the class on your reasoning.

Organizational Challenge• Trying to balance between being a economically

feasible and sustainable business while still being an effective correctional program?

• Misconceptions of “Prison Made Goods”

• Public Perceptions

• Legislative Issues

• Managing Change

REALITY CHECKWhere is your organization on the Business Life Cycle?

Momentum

Growth Cost Cutting

Decline

Position

What Slows, Stunts, or Stops Growth?• Uncertainty—How do we adapt/change• Takes to Long• Fear• Culture Meaningless Brainstorming Sessions Great Ideas seem to stall We sometimes invest in wrong or bad ideas

Obstacles

We have the capacity and workers that can build almost anything…….

Problem—we don’t know what exactly would be the most beneficial items to build/manufacture or how to penetrate a market.

Conundrum

Process Overview

NIST/MEP/GENEDGE ◦ Innovation Engineering

Systematic Approach to Marketing our Capacity

Similar to Lean Six Sigma

4 Step Process◦ Define—Clarity on Raw Concept◦ Discover—Fail Fast, Fail CHEAP◦ Develop—Make it REAL◦ Deliver—Go to Market

Ch

arte

r—S

cop

eProject Charter

Project Name: Unicor Innovation & Growth System Pilot Project Start Date: May 9, 2013 Status Date: May 29, 2013

<company logo>

Area of Business: Unicor Team Leader: Brad BeusProject Sponsor(s)Ken Yeich Executive Sponsor: Mary M. Mitchell (Asst. Director, COO FPI)

Project Plan Expectation is to complete the project in TBD (target date for developing concepts for development at least by new fiscal year)

Business ImpactThe prototype process, once fully adopted, will allow Unicor to consistently increase the number of inmates employed at a target of 10% annually, and, while doing so, maintain self-sufficiency.

Opportunity or Problem StatementUnicor needs to grow its business in order to increase inmate work opportunities. There has been a historic 30% decline in revenues and bottom line since 2009. There has been a corresponding reduction in prison employment of 43% over the same period. Recycling and textiles have been flat, while furniture, services and electronics have experienced steep declines.

. Goal StatementBuild a prototype process that identifies, vets and develops new products and services, new markets and new relationships. Quickly evaluate them against risk-adjusted standards (criteria) to Define and Discover idea potential before investments are made in Development and Delivery of new business opportunities. Emphasis on target customer problems and opportunities that are unique and solve customer problems, with proof and margins that support the business case. Corporate managers and business managers need to develop processes, strategies and expertise to develop and screen new business ideas.

Project ScopeIn Scope: Out of Scope:New, current and emerging market opportunitiesRepatriation opportunitiesPrison Industries Enhancement opportunitiesProducts/Processes/Services-Business Models

Projects that negatively impact domestic private sector employment

Create Project Charter

Select Team

Begin planning

Introduction to IE Labs Portal

Prepare for Market Research (or assign

homework)

Determine Market(s)

Conduct Market Research

Translation And Coaching

Review Market Research

Stimulus Mining

Formulate Market CTQ's

Develop Idea Starters

CREATE Session (Idea Generation)

Cycles Of Learning

Submit Concept Merwyn Analysis

Review Results

Revise Concept, if necessary

Go / No Go Decisions

Create Plan for specific product development /

commercialization activities, if viable

Prepare Plan for Commercial

Development

Define Measure Analyze Discover Develop

Team SelectionName Role % Time Name Role % Time

20Bill Donohue (GENEDGE) Management Coach 10 Peter Laguardia Core Team 20Mike Kelleher (IMC) Process Coach 10 John Roderique Core Team

20Mike Levy (GENEDGE) Process Coach 10 Kim Armfield Core Team 20Brad Curtis Core Team 20 Steve Harrison Core TeamJoe Sers Core Team 20 Chuck Darrin Core Team 20Eric Peipert Core Team 20Marie France Vareilles Transitioning Core Team 20Dennis Merrion Core Team 10

SW

OT

Buyers from private industries default to foreign sources/perks

Legislative changes

Competitive Pricing

Opportunities Threats

Foreign competition / pricing strategies

Social responsibility

ISO - military quality standards of manufacturing

Products are U.S. made

Agility / Surge capacity capabilities

Weaknesses

U.S. made products / "Buy America"

ISO / LSS certified

Negative perception of prison industries / labor

Ability to respond to external criticism

Lack of small business credit; no tax credit

Not structured for formal, ongoing, strategic R&D

Forecasting, BCA are sub-optimized

Lack of engineering expertise

Proof of Business Model Resiliency

Inherent inefficiencies of given environment / labor force

Viewed as supply chain risks for some new customers

Social responsibility

Reputation / brand with both private and government sectors

Financially low-risk partner, AAA rating

Two new authorities (Repatriation + PIE)

Government agencies not served

Excess capacity ready to scale / use

Business Model flexibility

Preferred source for government

State government procurement

Proximity Sourcing

Value Chain SWOT Analysis

5/9/2013

Preferred source for government

OSHA compliant

Modern enterprise (SAP)

Strong balance sheet for investment / readiness

Order-to-ship cycle is very quick

Available Infrastructure throughout the U.S.

Turnkey provider attracts customers, not many in U.S.

Strengths

Difficulty in procuring as part of internal policy (FPAR)

Limited understanding of commercial markets

Internal bureaucracy / responsiveness to customers

Delivery speed to market, efficient logistics / transportation

Available, integrated workforce

 

 

OVERALL MARKET RANK ("A"= GREAT OPPORTUNITIES;

"B"=VERY LITTLE OPPORTUNITY)

Market size $ / potential (H, M, L)

PIE opportunities exits? (Yes or No)

Repatriation opportunities exist?

(Yes or No)

Industry leverages existing capabilities?

(Yes or No)

CURRENT & NEW MARKETS:

MARKET SEGMENT - COMPETITORS

A H Y Y Y

SIGNS

A H Y Y Y

INDUSTRIAL FILTERS - 3M is the largest competitor, selling to government and commercial clients

A H Y Y Y

Textiles - Propper International, American Apparel (AL based), National Industries for Blind + 80-150 small businesses including sheltered workshops.

A H Y Y Y

Electronics--Renewable Energy and Energy Efficiency Products. Large Chinese manufacturers are the largest and most damaging competitors.

A H Y Y Y

Electronics--Cable, Communications, Rubber Molding, Electrical Boxes, Assembly, Wire Harnesses

B H N Y Y

OFFICE FURNITURE ("SYSTEMS") -- Knoll, Kimball, Hayworth, Herman Miller

B H N Y Y

PRINT SERVICES - General Printing Office; Defense Dept. (DFAS); RR Donnelly is a major competitor

B H (INCLUDES REPAIR) Y Y Y

ELECTRONICS - FLEET (UPFIT RE-SET) -- small competitors; GSA on fringes (upfit); in Reset competitors may also be customers; Depots.

B H Y N Y

DISTRIBUTION

C M N Y Y

Electronics--Plastics/Optics. Very limited current market selling internally to BOP.

C M N N Y

ELECTRONICS RECYCLING: (roughly 1,000 market participants). Mom and Pops. ERI, Simms (largest in the world) and Waste Management (all public); state prisons insignificant

C L (But total market="H") N Y N

CALL CENTER SERVICES: Verizon, Avaya (any telecommunications firms that are turnkey). Compete to bring offshore centers onshore.

CM (alternate markets very attractive

potentially) N Y N

DATA SERVICES PROGRAM: Data Entry, Scanning, Typing Services, CAD operations

KA

NO

Data Mining

◦ Tech Mining

◦ Market Mining

◦ Future Mining

◦ Insight Mining

Sti

mu

lus

Min

ing

CRITICAL INNOVATION THEME IDEA STARTER

INFORMATION CONVERSION AND HIGH TECH SERVICES Need  ideas  for  technology  work  or  related services which may provide a pathway to future inmate potential and sustainable growth 

REVERSE LOGISTICS, RE‐USE INDUSTRIES Need ideas for successful engagements in cyclical or niche manufacturing,  sorting, packaging and assembly for "leftovers" 

REVISIT VIABLE LOST OPPORTUNITIES 

Need  ideas  on  how  to  regain  lost  or  past customer opportunities, or re‐target government agency  opportunities  we  lost  to  offshore competitors 

PENETRATE CURRENT OFFERINGS Need  ideas  on  how  to  acquire  more  BOP  or current customer work (including better business development processes) 

MADE IN U.S.A. LABEL 

Need  ideas  on  how  to  engage  traditional  U.S. companies who now source mostly offshore, yet might wish to grow % of U.S. labelled products as part of their brand or competitive strategy 

SOCIALLY CONSCIOUS SUPPLY CHAINS Need  ideas  for  providing  services  to  companies who want  to  verify made  in U.S.A.  or maintain brand integrity by certifying their supply chains. 

CONTRACT MANUFACTURING Need  ideas  to  tap  new  and  existing  channel extensions  and  partnering  opportunities  as  an ongoing strategy for growth 

UNICOR TO THE RESCUE WITH TOTALLY NEW IDEAS Need  ideas on how Unicor can fill gaps  in  labor‐intensive industries completely new to us, such as agriculture or other industries 

TARGET IMPORTS Need ideas on how to engage with supply chains who  now  have  service,  quality,  or  logistics/cost gaps in non‐domestic production fulfilment. 

LARGE DEFENCE CONTRACTORS & NICHE SUPPLY CHAIN  Need  ideas  for  breakthrough  opportunities  in electronics or other applications 

 

(Value) 0.5 1 2 3

AUTHORITY COMPLEXITY New New Repatriation Approval From UNICOR BOD Existing Authority

CAPITAL REQUIRED >$500k <$500k <$10k In place (little to none req'd)

DIFFICULTY New Market & New Technology New Markets Adjacent Markets Existing Markets

BENEFIT Employs Few Prisoners & Low Margin

Employes Many Prisoners, But Low Margins

Employs Few Prisoners, But High Margins

Employs Prisoners, Plus High Margins With Growth

Potential

PRIO

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IZA

TIO

N C

ATE

GO

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Evaluation Prioritization

Rating Ideas

Inve

ntor

Na

me

Mar

ker

for

Sele

cted

Id

ea

Matt Swartz A Reincarnation For After-Life Vehicles 3 3 2 3 54Robert Stitt Configurator For Existing Unicor Webpage - JUST DO IT 3 2 3 3 54Ken Yeich C Outfitting Our Regions (Standardized Purchasing) 3 3 3 1 27

Steve Harrison C "Make It For Ourselves" - Outfitting Prisons With Commissary Items 3 3 3 1 27Chuck/Brad D Wire Harnesses 2 3 2 2 24Brad Curtis E New Brand Of "Penetentiary Products" Outdoor Gear (Version B) 2 3 1 3 18

Robert Grieser F Local/Regional Warehouse Space Trained Labor Pool Available 1 3 2 1 6Ben Logan E "Hard Labor" Brand - New Brand From FPI 2 0.5 1 3 3

Mark Turner G Prison Made Plastics/Food Trays, Cups, Flatware for Institutional Markets 2 3 2 2 24Dennis Merrion Heavy Duty Therapeutic Massage Chair For VA Hospitals 3 2 2 3 36Janet Connor QR Codes Make Your Day Easier - Just Do IT 3 1 3 3 27Jan Hynson Exclusive QVC Brand "Eye-C-U Readers and Sunglasses 2 3 2 2 24

Paul Campbell Zero Footprint Mattress Purchasing - Breakthrough In Mattress Recycling 3 1 3 2 18Pete LaGuardia Usage / Installation LED Lighting In BOP Facilities 3 3 2 1 18John Meagher Applications / System Solutions + PV for Developing Countries 2 3 1 3 18Gary Grabau Creative Solutions For U.S. Manufacturers & Startups 2 3 2 1 12Shirley Holm Data / Info Services For Government Agencies 3 1 2 2 12

John Roderique Secure Destruction of Goods Seized By Law Enforcement 3 2 2 1 12Carolyn Web Page Update Services For Government Agencies 3 2 2 1 12

Brad Curtis New Brand Of "Penetentiary Products" Outdoor Gear (Version A) 1 3 1 3 9Joe Sers Large Government Accounts Buy Total USA - AGAIN ! 3 3 1 1 9

Rudy Szollar Electronic Advertising / Marketing Sign For Retail Customer Experience 2 2 1 2 8Al Sheppard "Solar Farm" - Clean Green Energy & FPI 2 3 1 1 6Mike Killmer Unicor Expanding Offerings In GSA Catalogue 3 1 2 1 6

John Meagher PV Renewable Energy For Widescale Power Availability In Developing Countries 2 3 1 1 6

Stephanie Santucci Razor Edge Designs - Clothing & Apparel Allows You Self Expression 2 0.5 0.5 3 2

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Focus Areas

FINAL IDEAS SELECTED BY ALL PARTICIPANTS 

PROJECT LEADER  TEAM MEMBERS 

Automotive Harness Manufacturing  Carolyn Sheedy  Brad Beus, Chuck Derrin, Pete LaGuardia, Leslie Barkemeyer

Hard Labor Brand – New Brand of Penitentiary Products  Ben Logan  Brad Curtis, Jan Hynson, 

Stephanie Santucci Local/Regional Warehouse Storage & 

Labor Services  Shirley Holm  Robert Grieser, Gary Grabau, Janet Conner

Outfitting for Prisons  Rudy Szollar  Steve Harrison, Joe Sers, Paul Campbell 

Plastic Foodservice Hardware  Mark Turner  Al Sheppard, Mike Killmer, John Meagher 

Reincarnation for After Life Vehicles  Matt Swartz  Dennis Merrion, John Roderique, Robert Stitt 

 

Discovery Phase

“Fail Fast, Fail Cheap on Key Death Threats”

Do Customers Care

Does the Math Work

Political Fallout

Are We Capable

Independent Validation

Merwyn Research Concept Screening

Concept        Merwyn Score Automotive Harness Mfg.              51%    Contract Manufacturing Services for Plastic Injection Products    31%  Outfitting BOP Institutional Commissaries ‐ Make It For Ourselves     On hold, not scored   Premium Regional Warehouse Space/Labor Services at Exceptional Prices  51%  Reincarnation for Deadlined Vehicles          59%  Second Chance, A New Brand On hold, not scored

NOTE: The average score for concepts submitted for Merwyn benchmarking is 29%

Case Study

LED Lighting

Define

Discovery

Develop

Deliver

Thank You

QUESTIONS

Brad Beus, General Manager Business DevelopmentUNICOR/Federal Prison Industries400 First Street NW, RM 6013Washington, DC 20534202-305-3724 (Phone)Brad. Beus@usdoj.gov