Connect with Kelly:LinkedIn: https://www.linkedin.com/in/kelly-springer-b847996/Email: Kelly.Springer@metalflow.comLisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. I'm excited to introduce our guest today, Kelly Springer. Kelly Springer serves as Metal Flow Corporation's President and Chief Executive Officer. Metal Flow Corporation manufactures technically sophisticated custom metal components primarily to the global automotive industry.Kelly has made significant contributions to the community through her involvement in various organizations, including her current roles as a member of the Michigan West Coast Chamber board of directors, the Michigan Women Forward Advisory Council, and as Executive Champion for Inference Manufacturers next group. In addition, she was recognized in 2017 as the recipient of the Lakeshore Athena leadership award. Kelly, welcome to the show.Kelly Springer: Thank you for having me excited to share some time with you today.Lisa Ryan: Great. As we get started, please share a bit of your background, including why you chose to go into manufacturing. What led you to Metal Flow?Kelly Springer: Well, I started in manufacturing way before college. I worked in a family-owned business that had a manufacturing bent to it. It was a printing company and a family business. After graduating college, I went into accounting because my degree was in accounting. I was a public accountant for 23 years. During that time, the main focus of my practice was tied to manufacturing. Metal Flow was one of my clients. I joined the organization in 2013 as the chief financial officer was intrigued about leaving the consulting side of public accounting and being part of a team that was running a successful business. I spent a fair amount of time on the manufacturing floor and learned more about our processes in a family-owned business setting. I'm not a family member; I'm responsible for executing along with my executive team on all the things that make this business successful. We're going to talk a bit about people, and people are certainly the number one cornerstone of what we do here at Metal Flow.Lisa Ryan: When you look at how the labor market is right now, people are incredibly hard to find. The focus is on retaining the people you already have, those good people who are making everything work, and, of course, getting rid of the toxic people bringing everybody else down. Your tagline is people, process, products, pride, and where people come first. Please share your philosophy and how you've changed the culture over there.Kelly Springer: When you think about people, you don't have to go too far to hear lots of articles, podcasts, and media coverage about the uptick in automation in American manufacturing. That's an aspect. But the core foundation of what we do requires people to do it. We want folks to take great pride in the fact that they're part of the Metal Flow. We refer to our employees as team members. It starts by valuing them and the technical talents that so many of our roles have and recognizing that retention becomes a vital part of understanding what all those roles involve. So for us, it's just as crucial that the person who packs our parts in a box that ultimately puts the shipping label on them and sends them out the door feels equally as valued as the individual who ultimately manufacturers that part, with an extreme level of technical expertise that we relied on. When we think about that, and that philosophy, and or culture, we really were in a position where that became critical, even before the pandemic. Labor was tasked, and indeed, retention of those technical string paint trained individuals became essential to us, well in advance of that. We have focused on retention as a strategy for people for many years now, and it built that into our culture.Lisa Ryan: What are some of the things you do to make sure that that person like you said that was shipping the boxes out the door feels just as valued, listened to, and heard as the technical people making the products? What are some of the things, some of the ways you're creating that?Kelly Springer: Now, certainly there's the given right, I think you have to be market competitive - whether that's with your wages, whether that's with your health package your benefits, and to me, that's just a given in this day, and age it's so easy for that information to be readily available to folks. We view our team members as part of one larger team, so no role is more important than another. We have stepped back to say there's no magic bullet when we think about it. It's all the smaller individual things that we're able to do. So we recognize that health insurance, check Giving a given 401k, check. Those things are presented. We're focused on how people feel when they walk into our building every day. We want to make sure they are engaged in the vital work that we think we do, making safety-critical parts. And do they feel like their contribution, whether it's any role in the organization, is valued by those around them? So building that team environment, recognizing those efforts, and celebrating success collectively can be almost something that becomes part of your culture but doesn't necessarily come with a big price tag. We have intentionally done what we refer to as Metal Flow high fives things that are simple that don't cost dollars. But again, a way that you can recognize someone with hey, you're getting a card that says we're giving you a metal flow high five, and their peers recognize their efforts and trying to celebrate in that way. Some of the small things. We've done fun activities around food, fun activities around games, and interaction in ways that break the norm. We also have outdoor picnics, food trucks, and things like that. While that aspect is essential, it's the camaraderie and the gathering together. Even with the pandemic and being outside with a safe distance, we develop further a team's relationship. When you talk about retention and why individuals leave often, it could be tied to who they work for in that management role. So we've been intentional about providing additional training to our teams' managers and supervisors to let them understand how their position and engagement can make a difference. Lisa Ryan: So let's break it down with a couple of the things you shared. Let's start with the high fives. Is everybody given a stack of these cards? Is there a common place where you keep them? Are they printed out? What is the procedure that you use for them?Kelly Springer: Our procedure is our HR team coordinates that activity. It can be someone recognizing one of our core values or principles, and they are following our mission. Or they helped me out when I was having a tough day. So there are wide open criteria. The process is straightforward. You can recognize them. We take occasions where we use that same approach and do it 100% across the board to the whole team.Manufacturing day is a great example. It is celebrating that we get to work in manufacturing here, and our work is essential. But, in terms of Michigan and the US economy, when we think about those simple things.Lisa Ryan: and I love the fact that you're doing things with manufacturing day. I can't tell you how many audiences when I mention manufacturing day, very few hands get raised. It's a meaningful way to introduce people to manufacturing, bring it into the schools, and bring that pride back for American manufacturing. What are some of the things you do for manufacturing day?Kelly Springer: Well, we make it a day of celebration. We highlight some of the wins that we've had collectively as a team over the last year. We use it to talk about the great things about manufacturing and the parts we manufacture. Our parts go all over the world. Our team meetings talk a lot about leveraging this broad reach that we all have to make safety-critical components, specifically in the automotive space. We're doing that with an American flag hanging in our production facility. Our uniforms have the American flag on them—our production uniforms, put that pride celebration that comes with that. We also host students on that day. This year, we released a testimonial Video about why we work, and that will flow. The great thing about what we do here is that it included lots of different team members that we then featured in the video, and we released it for the first time on manufacturing day.Lisa Ryan: So did you bring in a whole production team, or did you use your cell phones, and walk around the plant, and talk to people.Kelly Springer: Well, we did a little bit of both. We brought in a production team that helped us with items that will be used to sell our product moving forward. The fact that we wanted team members to be part of that. Then we separated all that footage and used some drone video. The video of our facility was shot by one of our team members who happened to have great skill with drones. It showcases who we are, what we do, and, most importantly, the people that we have.Lisa Ryan: It's also in finding little personal details about that one employee. Who would have known that they were an expert drone operator unless you have those conversations, and you allow that employee to shine by being involved in this incredible project? Number one, that's super cool, but when you think about attracting people to metal flow, if I'm a candidate. I'm checking you out. I'm going to go and see what kind of videos you have out there. I'm willing to see those interviews to see if people look like me. Does it look like a great place to work? That's why I asked about the cell phone. In addition to the production crew, of course, the production looks great. Still, having honest conversations with people will make candidates more likely to come to interview. Because they can see what's going on there, and that pride, and that you know the joy you have of working together, I'm sure coming through on those videos.Kelly Springer: It certainly does. When you talk about recruiting, you also think you have many different tools in your toolbox. We try things to see if they work. One of the critical things for recruiting talent has been our existing workforce - by using them to tell their story. Sometimes that's been done through bonus programs and referral bonus programs, but we don't have that in place right now. But when we walk through the facility, we're giving a potential candidate, who we feel we're selling. The opportunity to see what we do and who we are. We walk them up to a Work Center and ask why you don't tell this candidate and why you work at metal flow. Why are you here? What gets you excited about coming here every single day? We can then use those answers directly from our team members to build and recruit others. Again no cost to asking those questions.Lisa Ryan: On the other thing too is it's giving that potential new employee people they've already met before they even walk in the door, instead of being the total new kid on the block. You're allowing your current employees to reinforce What they like about working there, and as you said, while capturing what they're saying, you can use additional fodder to put out there to bring in more people. It all comes back to culture. If you don't have that culture where people enjoy working there, it's going to come across on the videos too. If you don't have that culture, you probably won't do videos to begin with. These are the little things that you're doing. What are some of the other things you're doing that surround your culture?Kelly Springer: Creating this career path for our team members becomes very important. You can look at the statistics and know whether you group it by age or that folks can move a fair amount. In a country that has a lot of manufacturing opportunities for individuals, one of the critical things that we've focused on is how we create a career path that requires, in many cases, a variety of training opportunities. We're certainly very proud of our apprenticeship program designed explicitly for our journeyman toolmakers, and that program is approved through the Department of Labor. We've taken great pride. We had great success, But we onboarded a training coordinator. We started to focus on the skills and competencies needed in our roles. How can we help our team members? Do we understand where they want their career to go? Are we asking the right questions through our performance management system to understand their long-term desired role? What skills do they need? Do they know the skills and competencies required? How are we helping them through in-house training? We also have a very successful continuing education program that allows us to support those future career paths for our team members. So being able to show that, yes, I started in this type of role, but I can talk to others who've made lateral moves. Who's made vertical moves; who've grown their career in a variety of different roles? That testimonial helps us on the retention front and the recruiting front. We don't expect you to stay in this entry-level role in perpetuity, but we can help you create a career path that will work for you long term. That's an attractive opportunity for someone considering employment.Lisa Ryan: It also sounds like you're taking quite an individualized approach with employees. How do you find out from them? How do you work with them to set the career path they want?Kelly Springer: Our performance management system identifies what contributions they feel they've made to the organization, so we can celebrate those and recognize those. But a vital part of that with their direct supervisor is understanding what you want. So I believe the question we asked is where you want your career to be one year from now it's less about the title, wage and more about what position you are interested in learning more about how we can showcase you. That way, in some cases, we've done internal internships. You have a chance to see what another role might be like; some are very much in line. You can start as an operator. You can become a technical operator. Those are very well understood. Still, it creates other opportunities, even outside of some of those roles. We also task our team members with learning something new every year. What new skills or training would you like to have And those that their supervisor has identified for them. So through that process, we've been able to highlight some nontraditional career paths that have worked out exceptionally well for some of our team members.Lisa Ryan: So is there one or two particular stories that come to mind as far as an employee that may be surprised, you with the career path they chose or a unique way that you helped a particular individual.Kelly Springer: We have had an individual who went through our apprenticeship program. They then decided to take additional coursework, supplemented through a program that we have. Now, this person is leaning more towards a technical design engineering position. They could do an internship in our design engineering group and then make that transition. We've had individuals who have worked in our sales estimating roles, who now, in one case, the director of procurement.Based on coursework and additional training done, we have other individuals who have started individual roles for all of the purchasing that we do. We've been very intentional about moving them to other areas of the organization. For example, we have a college student who started with us as an intern, joined us full time in our sales development role, spent time on the floor doing tool assembly, and then moved into a project management role. We'll do a rotation through quality to enhance his long-term sales engineer goals. So these are lots of different examples.But ultimately, each can be individualized as long as you have the building blocks within our system to help them achieve those desired outcomes.Lisa Ryan: Well, and you're showing people that there are lots of opportunities for them because what we see too many times is that When people feel that they want to move ahead in their career, they think they have to go to another company to do so. When you're figuring out how to put all of these programs into place, it's helping you keep those people. They not only see it for their peers, but they can see themselves in those same roles as well.Kelly Springer: Absolutely. They are the best person to tell what that journey through their career path has meant to them. You have to capture what that experience has been.Lisa Ryan: Right. When looking at your employees who are learning something new every year, is there anything you're using to train other employees? They're highlighting that knowledge or how you are disseminating it through the peer-to-peer type of training.Kelly Springer: To some extent, we are. It's informal - it's happening informally today. We also have examples of learning a role or some aspect of a role that may complement what you do. An example of that I would give is building a forecast to forecast what our sales volume would be our materials scheduling team does that. Our financial analyst potentially reports at the end of the month on performance. An example might be a learning opportunity for that team member. They might need to sit with the person who builds the forecast for one month to understand the data that goes into it and how that completes that picture of all of those different functions within the organization.Another example is someone in the production environment who doesn't understand all the different types of quality checks required in another production area. They could spend time learning that technology, whether that's a key on a piece of equipment or just a new measuring technique, and ultimately they're enhancing their skills. Still, they're also doing a level of cross-training independent of the skill they're developing.Lisa Ryan: Well, in steadily cross-training, but that communication allows people in different departments to understand the actual process instead of just assuming that it should be done a lot faster because until they get in the midst, and see everything that's that is going on in there. They also get to see what goes wrong along the way. So that adds time to it, then it just keeps people communicating instead of just those silos that we run into so often.Kelly Springer: It builds on our concept that we're one team - one Metal Flow working together. Each role is critical. Someone will say, well, I have no idea what people in accounting do sitting in an office all day. I said, well, you don't ever not get paid when it's time to be paid. They play a critical role. Their role is vital; it's just different than your role. I think building that through and creating the concept of understanding what others do and why their role is

Connect with Prateek Joshi: prateek@plutoshift.com Website: www.PrateekJ.comLinkedIn: https://www.linkedin.com/in/prateek-joshi-91047b19/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. Our guest today is Prateek Joshi. Prateek is the founder of Pluto shift and a published author of 13 books. He's been featured in publications such as Forbes, CNBC, TechCrunch, and Bloomberg. You can also visit his website at Prateekj.com to learn more about him. Prateek, welcome to the show.Prateek Joshi: Thanks Lisa for having me. It's great to be here.Lisa Ryan: Alright, please tell us about your background and what got you both interested and involved in Ai.Prateek Joshi: I grew up in a small town in the southern part of India. When I was growing up, water was a beautiful luxury. In college, it stuck with me as I began my professional career. I studied machine learning Ai across law, a natural inclination. But there's a big gap in Ai in the physical world. It's not nearly as ubiquitous as it could be. We all know how to use it every day, as in search engines, but it was about machine learning.But there's a big gap when it comes to the physical world. That was the core motivation behind doing this, to bring Ai to the physical world. It started with water, meaning any physical infrastructure that touches the water and gathers data. So, we use Ai to solve a fundamental problem like water. How can we use it efficiently? How can we distribute it? How can we make sure it's not wasted? So, that's how it all started.Lisa Ryan: What are some of the applications of water that Ai would be used for? It's something that I would have never even thought of.Prateek Joshi: I ended up with a simple example. As the average consumers here in America, we get our water to a network of pipes. An essential part within that setup is called the cleaning process, meaning you'll get raw water from somewhere, and there are these very large treatment facilities that convert raw water into the water that we can consume.This is a very energy-intensive process, meaning you need to use a lot of electricity and chemicals to make sure the water is clean. If you're not careful, the water can leak and waste electricity, which is again a huge problem. A simple application collects data for pressure-temperature flow rates and then uses a tool like Ai to make sure you're not wasting water. You're not letting it leak, and you're not wasting electricity to clean water. This is one application of how you can use Ai efficiently. There are 100 other use cases as well.Lisa Ryan: When it comes to manufacturing, of course, water plays a significant role with many factories and plants. But as far as taking this into the manufacturing sector, how do you make Ai practical for manufacturers?Prateek Joshi: Let's look at a manufacturer. A simple example would be a company that produces food or beverage, and part of the process is to get raw material. Let's say you're making ketchup. You've got to get your raw material in, and then you need at least sources such as electricity, chemicals, and water. That goes into it, so raw material sources go into the facility when the ketchup comes.A manufacturing operation can be broken down into several steps if you look at a manufacturing operation. Each step has a certain efficiency level, meaning how much are you consuming to produce a unit of output now if we don't use any new technology? A human would have to do it. Imagine a facility where you have 300 membranes, like a filter. What stops this from going through, and you got to make sure that it's all functioning. You can't keep an eye on such extensive infrastructure by planning around as a human. The goal is how do we make sure that if let's say, Monday number 49 is acting up. How will we know if the pressure is going way up or it's going way down? You need to know.In the corporate world, you'll be sitting inside your office, and you want to know what's happening. That's where technology like remote monitoring can be beneficial. For example, a tool can automatically detect memory numbers 40 minutes. Of course, it would help if you did something about it, so what this does is it makes sure that they get produced regularly, and you don't need to run around to make sure the system is working perfectly. That's just one example.The production supply chain is another vast area of many use cases. Operations-specific use cases can be deployed inefficiency here.Lisa Ryan: Let's go back to artificial intelligence. Since you've written 13 books on it, you're the expert. So what exactly is artificial intelligence? What does it do, and how does it work?Prateek Joshi: Artificial intelligence is a State. It's the goal, meaning you can build a system. To build an Ai system that is intelligent enough to take actions independently. Ai is a state of being. Now machine learning is a vehicle to achieve that goal. Data is the field for the vehicle. That's how we relate these terms like Ai, machine learning, and data.That's how they put it together. Until then, we use the umbrella term artificial intelligence to describe any system hardware, software, or combo that can do things on its own. We use it every day. The simplest form of intelligence is like a calculator. That is simple, but we don't think of it as Ai, but technically it is doing the little thing. I have two massive numbers, and it shows you the result.More complex Ai systems can drive cars. They can detect danger when flying in the air, which ranges how much intelligence they have. We can put in a system, but that's how we look at Ai. Today, as you've seen, there is a very successful implementation of Ai in the form of automation, meaning if you're in a factory, sometimes it's hazardous for a human to approach a hot furnace. So, a machine does the specific task of taking this and putting it there. It sounds like a simple example of how Ai manifests itself in the video.Lisa Ryan: So, Ai then would be a part of machine learning? Because if I hear you correctly, machine learning is the machine is doing something, and, over time, it learns from itself and gets better.Prateek Joshi: Yes, machine learning is as more data comes in, the machine learns how to behave in various scenarios. It learns more and more it approaches. As of today, we are not fully there yet. We don't have an Ai system that's indistinguishable from humans. We're not there yet, but plans are becoming more intelligent, and machine learning is all the algorithms. The umbrella term is machine learning. All the algorithms, tools, and frameworks you use to make a system intelligent.Lisa Ryan: What are some of how you would deploy some of these Ai technologies in the world of physical infrastructure?Prateek Joshi: An excellent way to look at it is we work backward from the use case. Let's say the goal is to reduce energy consumption. Let's say you're a food processing company and want to reduce the energy. You can do per unit of output produced. That's a problem, and once you've identified that goal, you work backward to figure out what tool or system I should use to attack this problem. Because Ai is pretty vast, no single model can solve everything. Working backward on the issue, and when you do that.Once you define that, you also assess what data we have available. We want to reduce energy consumption, but do we even know how much we can do today? Do we know the initial primary lowers that make the energy consumption go up and down? I'm collecting temperature data, so these are basic questions. Then, we have some pressure-temperature data. We know what you want to do; then, you build a tool. It could be software. It could be hardware. It may be both. The whole time it is achieved, it starts driving that. Today, you can do X. Maybe three months from now. You will consume point eight of that. Meaning 80% of that and then eventually 50. The goal is to drive towards that goal in fashion, and that's how they appear. We're continually improving with more data.Lisa Ryan: If somebody's thinking about incorporating Ai or machine learning into their plant, what would be some ways to drive the behavior change needed for that implementation? Because people are going to be afraid they're going to lose their jobs, or they may not like the robots, or they may be afraid of them, or they have all these misconceptions as far as what I can do. They start with that conversation and change the employees' behavior to get the buy-in you need.Prateek Joshi: We commissioned a study to understand that. In March of 2020 and then a few months later, we wanted to understand people in manufacturing. It could be operations managers, operators directors, and people running facilities. So we surveyed those professionals to know how you use it. Because you can go into the facility every single day, and yet you need to know everything that's happening at all times.So what are you doing so? We conducted a survey and found very interesting results. It's not that people or companies do digital transformation. If you're doing pen and paper, how do you digitize that work if you don't lose it in a fire? The goal is, how do you digitize the operations? And 94 of the participants said that the company's primary way of doing it is boiling the ocean. Meaning somebody comes up with a big initiative, their entire company of 40,000 people. They try to do everything all at once, and in many instances, it's not feasible to do because it's a massive company. So they are introducing a drastic change in our stakes. That's why. But boiling the ocean shouldn't be the plan, yet people do this. Within that, 78% of the participants said that they were supported by the Department heads when they took an op-specific approach. I mean that you choose a piece of work that could be monitoring a membrane or detecting pump failure. A small piece of work, and then you transform that; you digitize that in an already focused manner and a bite-sized way. What that does is it creates a success template meaning oh this facility in Los Angeles, or this was somebody in in in Miami did it. That template can now be implemented in Chicago, Boston, and Seattle.A groundswell builds up, and that's how you transform a particular piece of work in and digitize that. So what we call out specific digital transformation. I would say start with the bite-sized approach and a clear success template that can be used to transform work. That's what we have seen as a third party did quite a bit here.Lisa Ryan: Is there a best practice for deciding where to start? Are you looking for the most mundane tasks that human effort is wasted on, or are you looking at the most dangerous tasks? Are you looking for those detailed tasks that maybe humans miss the mistakes? Is there some best practice you recommend?Prateek Joshi: That's a good question. What happens is the initial choice determines the entire approach, meaning people are either completely turned off by it, or they become very enthusiastic about it. So, the initial choice matters a lot. What we have seen is pick a workflow that is low-hanging fruit with high impact, meaning something could be easy. But if the company doesn't care, the initiative will be killed. So, the goal is to figure out what is low-hanging fruit. I can have the highest impact on the business, which is a great first try, so let's automate it. Because, when it comes to bringing a new piece of technology, it has to make sense for both the user, meaning, it has to be easy to use. Because the company has to invest capital, Roi needs to see the return. The sooner you can make that happen, the better it is.Because of that, I think this combo that using a simple example would be monitoring as a simple example or other examples could be if you are scanning the seats by hand, digitize that. Nobody wants to sit and do that. People have other work to do, so the goal is to identify those tasks that nobody will mess with. So it's going to have a significant impact.Lisa Ryan: So, with the clients you've worked with within the study you've done in this field, do you have some examples of success stories that you can share of where the company was before and what happened after they started using Ai.Prateek Joshi: Yeah, we have a perfect example for company, where before we started working with them they know they produce the beverage company that makes a product and what was happening was water as you can imagine, is a crucial part of the business; meaning how this how they treated it and how they use it. How they discard all of that matters because every incremental benefit, every incremental ISM efficiency, will translate to the old dollars because it's a pretty big company. Because of that, within the operation, water treatment with a huge part of it. We started working with them on that and what happened was over a year, we ended up saving more than 15 million gallons of water. That was one side, and you can imagine 15 million gallons can feed a family for years. It's a lot of water on an industrial scale, it's large, so the goal is to identify these high-impact areas were before doing this. After using a product, they started out doing that, saving this water. What this also does is, in addition to the Auto I benefit, that is, a positive impact on the ESC metrics carbon footprint. So that is another very key benefit that you can achieve by solving problems and energy, water, and chemicals that can significantly impact your PSG footprint.Lisa Ryan: Are there particular types of industries that you've mentioned beverage a couple of times, and you said your connection with water. What are some of the other big industries that you've seen that have successfully taken off taken off with us?Prateek Joshi: The trend we have seen as any industry, where the energy consumption is high, is that those industries are active. They actively pursue new technologies because it's costly. So the source has a significant impact on carbon footprint. So are the water, beverage, food processing, chemical, manufacturing, and data centers.We've seen a lot of activity in these industries. Food and beverage have been very active, so say that's one of the most active verticals. All of these industries have been actively pursuing new technologies here.Lisa Ryan: Do you have any other ideas or tips if somebody is starting to think about this? What are some resources they could turn to? What would be the best way for somebody to begin exploring the topic?Prateek Joshi: I think many of the resources are available online and on our website. We have several White Papers and case studies that were just published, mostly talking about how to think about it. In addition to that, many of the publications, depending on the industry or smart water magazine publishers, water-related technologies, food, and beverage, have something similar. The chemical industry has something similar, but the goal is to try things out and create a framework to quickly try things without disrupting the business and see exactly what works for you. It would be best to look at simple things like automating. But an easy starting point because this is only something we can automate, something as simple as scheduling. We automate that. It makes our life easier. With the manufacturing, you can look at it. You automate the work of monitoring. You can automate the work of ticketing.What happens after taking what happens when you do save energy? How does that work? Determining what can be automated is step one—after that, working with a partner who can do a small, well-defined pilot. I'm going to go from there, so I think that's an excellent way to get started here.Lisa Ryan: And is there a way to test that it's working, or is this something that once you commit Ai, you're all in or not. Is there a way to try it, see if it works, and then decide yes, I'm going to stay with this or no, I'm going back to the old way?Prateek Joshi: 100%. That matters a lot, and that's precisely how we should think about it, so as a new technology, the goal is within them. Let's see what our director of operations says. The goal is, can you create a framework where, if you want to test out. Let's say you saw a new Ai cloud tool that can reduce chemical consumption, so the goal is, how can we quickly pass it out. It usually takes about 90 days. No matter what piece of tech it is, within 90 days, you should be able to see the impact.I know. I think it should take like two years, that's too long. But I've seen 90 days has a good time at the break where you deploy it. You use it honestly for 90 days. Then you measure before it was a surprise, meaning you have to be diligent about the status quo before you start doing it to measure the impact, and then you can do it. So it's not a one-and-done thing. It's like Ai is almost becoming a ubiquitous cloud or Internet. It's already here. The goal is to make it work for you, and it's all it's ubiquitous. Almost all of us use it every day in some shape or form. It's just going to figure out how to make it work for you.Lisa Ryan: And what about tying it in with your existing system systems? You think that some manufacturers have equipment that is decades old. So they're trying to incorporate some new equipment, or is it better if you're starting fresh I mean, how difficult is it to tie in all the different systems that you're going to find in a manufacturing plant.Prateek Joshi: That's a legitimate concern, but potential customers are when we talk to noncustomers. We do see that quite a bit. These companies have been around for decades; some companies have been around for more than 100 years, so they have a long history of decisions and associated hardware. The goal is to ensure that they stay up to date on simple things like data collection, so if you're not collecting data, step one is to get the sensors in place.Start collecting the data, but yeah, I think if you're not on the journey, some people are on all parts of the spectrum. If you have nothing going on the step, one would be talking to a hardware company, which can deploy sensors and send the data to a database. Once you have that, you go to the following type of data analysis, if you don't do data analysis without any data in place, I think. I think assessing where you are on that spectrum and then choosing the right initiatives matters a lot, and I think many, many companies have successfully moved along the spectrum. They're moving fast, and many vendors and companies are showing up with amazing technologies.Lisa Ryan: And then the last thing that comes to mind is just from a security standpoint from a cyber security standpoint, how are you making sure that all of this is being kept safe that nobody can. Access that or hack into your system. What are some of the things you would recommend as far as that goes, or is that not an issue?Prateek Joshi: No, it's an issue. Any data company has to have access to your customers' data. Make sure that data and your system are secure. A...

Connect with Ann WyattLinkedIn: https://www.linkedin.com/in/awyattrecruits/Website: https://www.annwyattrecruiting.com/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. I'm excited to introduce our guest today, Ann Wyatt. Ann is President of Ann Wyatt recruiting. She's very passionate about workforce development and building a solid quality team, focusing on manufacturing. Her goal is to connect the right people to the right jobs. Ann, welcome to the show.Ann Wyatt: Lisa, thank you so much for having me.Lisa Ryan: Absolutely. Please share a bit about your background, how you got started in recruiting, and why the focus is on manufacturing.Ann Wyatt: Sure. I started my recruiting agency. I got into recruiting because I'm very passionate about workforce development. My first job after graduating college was working for the career Center. I worked my way up through the career Center. I enjoyed the jobs portion, matching the candidates with the companies and working with local area employers on job fairs. After that, I worked with the greenfield sites and hired new or existing candidates from the labor market, creating and developing labor market information profiles for economic development.In 2015, I decided that it was starting to get tight. We're already starting to see a tight candidate pool at that time. I decided that I could do a better service to the community by leaving the state and starting my own recruiting company, focusing strictly on manufacturing. Firstly, I picked manufacturing because it made up most of the workforce in the local area Bowling green, Kentucky, where I'm from. The wages were higher in manufacturing than in other industry sectors, so we had to work all positions when I was looking. When I was looking at the different industry sectors like health care, customer service, retail, and manufacturing, the wages were substantially higher in manufacturing than in other industries. I thought that somebody didn't have to have a college degree to go into manufacturing, and they could make perfect money.So, that was quite inspiring to me. I wanted to stick with the manufacturing and develop those relationships with the local area employers even further. One of the things we're seeing is the numbers all over the board.Lisa Ryan: With 2.8 million manufacturing jobs going unfilled by 2028 and all these other statistics that are out there, many manufacturers are all fighting over the same people. One of your areas of expertise is working with your clients on the candidate experience. A lot of times, they post a job. They don't think about it, or, as you say, they post and pray, and then whoever walks in the door doesn't think about it.It starts from the starting point of their candidates' experience. So what are some of how you've seen companies successfully elevate their candidate experience?Ann Wyatt: That's a great question, Lisa. I think that companies are still getting acclimated to the fact that this is a candidate-driven market. They have to put a lot more effort into recruiting quality talent than they were previously. They're used to the idea of posting job descriptions on a job board and just hoping and praying for the best.Companies with the most success and recruiting top talent are going through those extra steps to build a relationship with a candidate. From the moment they apply for the position, whether things like getting back to them or leaving them with an automated or canned response or no response. Whether that's having a great marketing and branding strategy where they do video job descriptions or creating interactive job descriptions that tell the candidate a little bit more about the company, their story, their brand, and their history. Whether that's being just more flexible with the candidates long term desires. For example, I just had a company come up with 5000 on their salary from their salary cap for a position. They were in love with the candidate.But they just really thought that she was the perfect person for them. So they went that extra mile, and when the candidate came back and said, I guess I would take a pay cut. So they didn't make her; they gave her what she was currently making.Those types of ideas and the ability to put yourself beyond just the traditional corporate stuffy box and show your human side as a company. Show that you care about your workforce and invest in your workforce. Those will be driving factors when you're looking at recruiting and retaining top talent.Lisa Ryan: You brought up a couple of things that I want to focus on. The one with this candidate that you just placed was looking to leave her last employer, and she was thinking about taking a pay cut to do it. That sends a message loud and clear to people. You are listening to your employees and having their ears open. Taking care of the people you already have on your team and making sure you're having those conversations that keep you here would cause you to leave. Having those in advance can have prevented that woman from ever thinking about leaving.Was there anything, and I don't know how much she shared with you, but why was she thinking about leaving her last employer? What was it about this company that she was thinking about taking a pay cut, even though she ended up not having to. That's an excellent question. I love that.Ann Wyatt: The candidates had been with the previous employer for five years. The previous employer was a greenfield startup company that came to the area. I will tell you; I wouldn't say I liked taking this person from this company. I have a little bit of history with the company. I don't work for them. It broke my heart that she wanted to leave because I worked with them at the state. It was like I wanted good things for this company. What was frustrating for her was that she didn't feel like the organization and support she needed with the company.In the greenfield sites, especially if it's like a foreign company coming in, it takes a long time to get their structure in place and to get up and to run. So to get their product out the door, she was getting to the point that she was losing faith. It was ever going to stable out for her, and I think that was the driving factor for why she left. When I called her up and asked her about this position, she was very interested in the company's very well-established. They had most of all their processes and procedures in a row. Everything was in a good routine. She liked the fact that the company was smaller. It was more family-oriented, and some people like that. She liked that.When she went in for her interview, the client went out of their way to give her a quality candidate experience. What I mean by that is she was introduced to everybody on the floor, everybody in the office. She was allowed to talk to everybody to ask questions of other employees that were not necessarily interviewing her. I remember talking to her after the interview, and I said, how did it go? What did you think? She was still at that point; for her that, she was like, okay, I'll do it, I'll take the pay cut. She was saying I'm still making this amount. So when I called her up, I talked to her. She said they were so sweet, so friendly, and welcoming to me. She said I would be very interested if I had to take a pay cut.Lisa Ryan: I said that's great. That sounds so much for these companies saying I can't afford to pay these people. I can afford all the money that they're looking for. It's not about the money. Here is a woman ready to take a pay cut to go somewhere else. They took her around; they introduced her to everybody, making her feel at home. They created that experience. She was at that level of frustration that may have been alleviated if her other company had asked her - what tools do you need? What resources can we provide for you? To minimize the frustration that she was still having five years later. The other thing is, can you explain what you mean when you say greenfield?Ann Wyatt: A greenfield is the manufacturing equivalent to a startup. Essentially, they worked with the local area, economic development—all the way up through the state of Kentucky, which starts at the state level. The company will contact the United States Chamber of Commerce about economic development. We'll try to begin the process of saying, hey, I'd like to put a plant in.For example, somewhere close to a customer, this company had GM as one of their biggest customers. They wanted to be close to Bowling green, Kentucky, for that reason. Then the state will work with that company to find the right development for them to meet their needs. If they need a railway, for example, or they need shipping like by boat, or they need to be by an airfield like at an airport.They'll work with that. They'll work with utilities if they need wastewater and things like that.Lisa Ryan: They're starting with a greenfield, starting from the ground up. Then they build the building and all that. That's what I thought. Just in case somebody else had the same question in their mind about that. Going back to that woman, and her taking the job anything. Is there anything else about that experience that the company did well? What solidified her commitment to joining them, besides the extra five grand, showed how much they valued her. They didn't make her take a pay cut, so it just sounds like such a win, win.Ann Wyatt: Exactly. I was this recruiter. These moments are infrequent. When this happens, you could cry. It's so good for everybody. They did a great job being flexible in the pay, and they have excellent benefits. I want to say, like, for their health care coverage, their deductible is low. They have like a $700 deductible on a family plan. I thought that was her. I was like, I want that.But they go out of their way to constantly improve their benefits and do everything they can do to help their employees out.Lisa Ryan: I think it was magical how they walked her through the plant and introduced her to people. That goes on both sides of the equation. Number one: she got to see who she was working with, but it also gave the people on the floor some comfort that this person was going to be a good fit. Because maybe if she was did something where she brushed off somebody, or she was rude to somebody, that team member can come up, and say I don't think she's going to be a good fit here. So it really can help a company on both sides of the equation of supporting your current employees to feel connected to the process and as a very welcoming gesture to your new employees coming in.Ann Wyatt: I think that was a mini high-performing teams interview. Getting her to walk the floor, talking to everybody, and introducing her to everybody, was a great way to get feedback. Whenever I see companies hiring with high-performing teams made up of different people from that department, those companies have the highest success with retention and talent acquisition.Lisa Ryan: How vital is training? It is the whole process of training your managers to do it and doing it the right way. Training and professional development in the company itself, and let's start with the managers - the people were doing the job interviews and posting the jobs. What are some best practices when you are training your people?Ann Wyatt: Sure, no, that's a great question. I do think that it takes a certain level of training. Many companies, when they're hiring, recruiting frequently falls under the human resources function. I don't feel like it's an excellent fit for human resources just because of compliance issues. Human resources always have to be so compliant. And they have to understand employment law. I like to think of recruiting as if human resources had a happy spot. That's the happy spot for human resources. A lot of companies hire entry-level people to come in. That's their first job. You can do the recruiting because it's a lot of fun. It's happy. I'm not going to say it's easy, but it's not like negotiating employee or mediation. It's not like that. It's not benefits or payroll either. Companies should do a more proactive job of providing interview training, whether situational or behavioral interview training. I think that's important when you're doing interviews. There's a lot of nonverbal cues that people give.It helps that you're not subconsciously reading what you see. Instead, you see it, acknowledge it, and then what does this mean. So, for example, if somebody is over talking or they're not talking enough, you're going to immediately have that little red flag say, Oh well, what's wrong. But then, being able to go further, and saying okay, well this person is easy, they're over talking, they don't have enough experience. They're saying a lot, but nothing in that situation. Or they're under-talking, so maybe they're not very interested.Being able to read those numbers is essential. I think it's an excellent practice for companies for performance and analytics measures to have a matrix of their core values. What soft skills they're looking for when they're doing the behavioral interviews and then assessing them and ranking them based on that set.Lisa Ryan: Make sure that you're getting the right fit right off the bat. Besides that one client that we spend some time with their employee experience, what are some of the other things that you've seen people do or ideas that work when it comes to connecting with that employee right off the bat before they agree to come on board?Ann Wyatt: Recruiting is a lot of relationship building, and I would like to see it as a recruiter. I would love to see some more of that, too, in recruiting. It's a lot of relationship building. If somebody applies for the position, and they're not the right fit, it doesn't take much to send them a DM on LinkedIn and say, hey, I saw that you applied for that, thanks for that. But I think that this is what the company is looking for, or just being that person not making time for them so if they have questions to be there to answer their questions if they want to learn more about the company. And what their story is to provide them a look at the company and their story. What's their product, where are they in a global market? What's unique about this company? Why do the employees of this company want to work there? Those are all things that, as a recruiter, I feel like you should be able to not only understand but also convey effectively to candidates that you're contacting. Building relationships may not work out for this, but I love to stay in touch and check in every so often to say Merry Christmas, hey Happy New year. I've spent a lot of this over the past couple of weeks to be friendly.Lisa Ryan: You mentioned something about video interviews or video job descriptions earlier. Please tell me more about that. What do you mean by that?Ann Wyatt: Video job descriptions are a great way to showcase your company, your product, your machinery, and what you do. It is a great way to show prospective candidates. When I have a company interested in doing a video job description, for example, I try to pick out some of the things required from the job - what they're looking for. When you read a job description, there's what they need. So you pick out the things that matter most that will be the driving decision-making factors. You showcase those in the job description videos, so whether that's a technical role - say somebody is looking for an automation engineer or something, that person needs to have a strong PLC background. I want to know what your plc hardware is. What are you running? Rockwell, Siemens - what do you have. I want to showcase that in the video for candidates. Because somebody may be very interested, they may not have the experience. Maybe they have seen it. So being able to give them a quick, effective visual synopsis of what you're looking for what you need, and then also what you do at the same time, is a lot more effective than just the old text.Lisa Ryan: That sounds like something you could do right on your phone. You're not looking at hiring a production team; you're looking at showing a day in the life of what that job is on a short video that you can shoot right on your phone.Ann Wyatt: Definitely. You could also do employee testimonies. If you want to pull somebody from the floor that works in that same role and have them talk about what they like about it, why they took the job, and what their day-to-day is like. You could do that. If there's a camera app, you could use that. I have software, but I think it's not expensive. It's like $250 a year. It's very cost-effective to do things differently.Lisa Ryan: Those are the things that set you apart. Even though we all have a smartphone of some kind with us at all times pretty much anymore, there are probably very few people doing that. So, suppose you want something to differentiate yourself from everybody else out there immediately. In that case, it's showing that day in the life on video and doing things that are different from what everybody else is doing in their recruiting practices.Ann Wyatt: Exactly. It makes you appear transparent. It makes you appear approachable, and you're stepping out of that rigid corporate box and showing your humanity to your candidate pool. That's something that they want to consider before they take a new job. At the end of the day, the candidate pool is so tiny if somebody takes a new job because they genuinely want to.Lisa Ryan: Exactly. So, as we get to the end of our time together, what would be your biggest tip for companies to recruit successfully or onboard new employees?Ann Wyatt: I think going the extra mile to be willing to meet people where they are is something that I say, often in a lot of advice in a lot of the advice that I give it but what I mean by that is to be flexible and meet people where they are. Find out if you're interested in hiring a person. You're saying, Okay, this is the one for us. Find out what that motivating factor is for that person. Sometimes it's many. Sometimes it's not. Sometimes they want flexibility. Being able to meet them where they are and going that extra mile for them is the best advice as to what you can do to win in the candidate race right now and increase your culture and retention.Lisa Ryan: If somebody wanted to get a hold of you and continue the conversation, what's the best way for them to connect?Ann Wyatt: Probably LinkedIn is where I spend most of my time. I love connecting with people on LinkedIn. So please send me a DM and let me know that you found me through the podcast. I would be happy to connect with you.Lisa Ryan: All right, well, and thank you so much for being with me today. It's been a great conversation.Ann Wyatt: Thank you, Lisa. It's a pleasure.Lisa Ryan: I'm Lisa Ryan, and this is the Manufacturers' Network Podcast. We'll see you next time.

Connect with Steve Burke:Website: https://www.hitech-industrial.com/Phone: 219-707-5956. Lisa Ryan: Hey, it's Lisa Ryan, and welcome to the Manufacturer's Network Podcast. Our guest today is Steve Burke. Steve is President of HiTech Industrial, a multiline distributorship representing over 30 manufacturers. They support many sectors from steel, chemical, healthcare, transportation, automotive, and manufacturing. And after being in business for just over two years because of their focus on customer service, they have both made a profit and exceeded their goal. So, Steve, welcome to the show.Steve Burke: Good morning, Lisa. Thank you for having me.Lisa Ryan: Absolutely. So, Steve, share a bit of your journey and what led you to found HiTech Industrial.Steve Burke: My background is as a pipe fitter. For about 23years, I had the privilege of working in many different industries. I then moved into a service technician, multi-state, working in all the industries weusually cover: steel, chemical, heavy manufacturing, automotive, and more. And this allowed me to see exactly what's going on in their maintenance teams and some of the issues they're having.Lisa Ryan: Okay, so share a bit of that background, like where you were and then why you decided to start, what were you looking to create that was different from what you are seeing out there. Steve Burke: As a hands-on technician, I saw a distinct repetition of maintenance issues lubrication, hydraulics piping things that were not being done in their optimum way. Frequently, I would make suggestions, which would positively influence the customers' maintenance. So they would ask me to do other things like, Can you show some of my guys this? Could you work with me on that? What's this stuff about a Lubrication audit. So I broadened the spectrum of just being a parts replacer or providing a part to someone who provided a consultant service to increase reliability and help their maintenance teams.Lisa Ryan: And so then, how have you translated that into what you're doing with HiTech? Because, again, starting a business and meeting goals and making a profit right off the bat, you have to be doing something right. What do you attribute that to? Steve Burke: Well, I worked as a distributor for a pipe fitting for about ten years. So again, this took me deep into the engineering and the maintenance teams, working with them on significant problems that they were having and finding out other issues in hydraulics and lubrication things of this nature. Once I saw that I started asking questions and saying, Well, is this the first time this has happened? And often I heard, no, this happens all the time. I've got to make this repair. I've got to do this process over and over again.And when you started to ask why the answer was Gee, I don't know. It's the way we always did it. Henry Ford had a saying where he said, if you've always done what you always do, you always get what you always got. And I think that's true. And HiTech industrial is trying to bridge that gap and help them move into an area where they can find solutions to reliability and their maintenance problems. Lisa Ryan: So when some of the things that we talked about, some of the things that you focus on, things like being transparent, taking a sincere interest and actively listening to your customers and doing service, that goes one step beyond what are some of the philosophies that led you to do that, like transparency. I'm sure that you sometimes have to tell your customers things that they don't necessarily want to hear, but that transparency also does well for you. So talk a bit of that. We'll start with transparency.Steve Burke: Sure, it's been a key for us to work personally with our customers, whether it be a maintenance manager, whether it be the President of a manufacturing company, or whether it just be a technician. And we have to make some hard statements like you mentioned, you can't do it that way. It doesn't work. You're not fixing it. You're just putting a new part on a problem, and it's going to fail. We got into discussing that more in-depth with them. What do you mean, it's going to fail?And what I found out is that people have assumed roles where they don't know the history of the maintenance issues. So they find out that we're replacing parts repeatedly and not looking at a root cause, not looking at a process that has been changed, not looking at additional equipment that's been added that is affecting or contributing to the downtime failures.Lisa Ryan: Really, what you're doing is instead of just selling parts, you're going above and beyond and giving them the service, and probably over time, maybe you're not going to sell as much because you're not replacing the same parts because you've fixed the problem, which then would lead your customers to trust you more. So is that what you're finding?Steve Burke: That's precisely correct. Yes, we do shoot ourselves in the foot, so to speak, for not replacing every part or making an extra couple of dollars replacing a part. But we prefer building a relationship with our customers, understanding their personal needs because that's going to bond our customers or join our customers to partner together to create more reliability and profitability. And in some cases, we even make a safer alternative for them to operate. Lisa Ryan: I know that training is a significant component for you. So is that looking at both the people you employ to ensure that they are trained personally and professionally and your customers or talk about your focus on training?Steve Burke: Training is just one of the most overlooked things in the industry today. We don't have time to train. We don't have the budget to train as things we hear. We don't have the people to teach who could train on this system. Joe and Bob and all the old-timers are evolving. They're retiring. They're leaving the industry and taking with them 30, 40 years of a wealth of knowledge, the young people coming in, qualified, great guys willing to work. They don't have the knowledge or experience we're trying to get to that process. Find out how and where we can help them solve their problems.Some of them have more knowledge than myself because they've been highly trained in an area, but they don't have the broad understanding that 30 plus years of experience working in the industry has provided. So we're joining with the maintenance managers and finding out your biggest problems. And this is a fundamental question that's not being asked when you call up a mega house or a large supply house. And you say, I need part XYZ. That's what they do. They give you part XYZ, but they don't connect with why you need part XYZ, and who knows how to replace it? And how many times have you replaced that in the last year? Because they should last in multi-years. So we're kind of explorers. We're kind of investigators asking these questions.Lisa Ryan: And when you talk about the fact that, yes, we do have the silver tsunami of baby boomers that are retiring and taking their 30 and 40 years of experience with them, is there anything that you're doing to capture some of that knowledge before the people walk out your door.Steve Burke: We are looking to maintain a relationship with our customers. We're a small company, Lisa. So we're not big, but we take people and train them to have a comprehensive knowledge of the products that we carry. And then we work with them. Often I go out with them to look at a job, meet with a team, and ask the questions that they haven't learned how to ask yet, because you can't just ask Gee, why is it broke or what have you done to fix it?Steve Burke: You have to go to the second level and third level questions to funnel down, create an understanding of what is your real problem, reliability. And how can I help you?Lisa Ryan: Yeah. So really taking it into the real world instead of textbook what's supposed to happen because we know in maintenance, there's no way you're ever going to see anything that can go wrong in maintenance.Steve Burke: It's true. We're finding that maintenance teams, managers, and leadership are being asked to do more right now with fewer people. Manpower is plaguing the nation right now, let alone manpower that wishes to work in a hands-on, hands, dirty environment. And we're working with them to optimize the steps they are taking to create the maintenance programs that keep things running.Lisa Ryan: And one of the things I know that you do to our customer audits to help with that, to investigate those problems and provide solutions. So, could you share with us a bit of your process? What does that look like? Maybe some steps that if somebody is listening to the podcast today and would like to incorporate that thing for their customers, how would they get started?Steve Burke: You had a tricky question to answer. We're covering multiple product lines. Let me just take one example. That is easy to share, and that will be in lubrication. Lubrication touches anywhere. There's moving parts in manufacturing, steel, chemical. It's a universal issue. And yet it is also one of the most specialized knowledge banks there is. It's not a glorious or a sexy industry to be in. Everybody wants to stay away from it. It's constantly the last component of a piece of equipment that's looked at for liability.But lubrication is the lifeblood of the industry. So we'll come in, and we talk with people, and they start asking some fundamental questions about lubrication from single-point lubrication to multi-hundred-point lubrication systems. Do you have them? What are you doing with them? Who's your lubrication guru, and the answers often are. We don't have one. We haven't had one for years. I just had a customer who told me that 24 of their automated systems are no longer operational. Five of them are limping along because they have nobody to provide the technical expertise and the time to come in and fix it.Sometimes we have to do this on a fee basis where we work with our customers and find out how we can help or work with your team to get a start point to get this quired knowledge of your issues, and we'll work with them. We'll find out where the problems are. We'll find out where their high maintenance issues are, and we'll start from there and roll it out. Often that means talking to maintenance managers, supervisors, and technicians to understand their level of lubrication and how to maintain it.And right now, there's a vacuum in that area. People are trying, and they're looking online to find stuff, but there's no real active resource. So we'll take it and work with them. From the basics, Lisa, from what lubrication is and how to maintain your system to that complete process.Lisa Ryan: Yeah. And as we're going more and more into automation, that lubrication part will be, like you said, the lifeblood of keeping that equipment going. And when we think about maintenance, the best thing about maintenance does not have to use it. If you maintain your equipment correctly and even start with the basics that you talk about of Lubrication 101. Too often, people assume, vendors assume, that people know what to do, where to put the parts, and how to work anything. But the fact that you're starting from that ground zero and not assuming anything seems like that will be invaluable to extending the life of your customers' equipment. Steve Burke: And that's what we found over and over time. And if you take and make these repairs and create a process for successful maintenance of these systems, they're very durable. They last a long time. Without that maintenance, without that understanding, they can become a daily maintenance issue that impacts profitability and downtime and, again, sometimes even safety. For example, some statistics show that 65% plus bearing failure is directly related to improper lubrication. So that's a huge number. And when people start to hear that and see that, and you can show more, you can extend the life of a bearing, extend the runtime of a piece of equipment, protect their assets. You become a valuable resource to them. Lisa Ryan: Yeah. And one of the ways that I think you also stay a resource is in your follow-up. So you're not just going in there doing an audit, giving them the right pieces, and then okay, see you later. Let's go on to the next one. You are also staying in touch with them. So what are some of the ways that you continue to be a resource for the long term with your customers?Steve Burke: Yes, staying in touch is a law start. Customer service is a law that starts right now. They want a large house. A large company often wants to get that call taken care of and off their list, and they won't ask or follow up a need with them. Situations like, hey, I sent them a text. Hey, I send them a voicemail. Hey, I left them an email, and they didn't get back to me. Maintenance teams are overworked right now. You have to be the source that gets back to them repeatedly until you talk to them. And we sometimes apologize for being overly enthusiastic, if you will, and trying to reach out to our customers. And, hey, I know this is the third email. I know this is the third call. Please excuse me. If you'd like me to stop, let me know. But if you're just too busy, I'll wait for you, and I'll make my efforts to get a hold of you. And I didn't trust that way by being a Bulldog. I've been called you're a Bulldog. Well, sometimes you have to be a Bulldog to help people. And I always apologize and say, if that's ever an inconvenience, let me know, and I'll change.Lisa Ryan: And the fact that you're giving them the choice of, hey, if you don't want to hear from me, fine. But the fact that you keep going after probably most of your competitors give up when they sent that one text or they sent that second voicemail and they didn't hear back. So they move on to the next one where you are, letting those customers know that this is important. They are essential to you, and you're there for them.Steve Burke: That's correct. And we hear that routinely. Thanks. I got to get to that. But I had this. I had that we had a tornado here. We had this. There are many different reasons why they can't get back to you and what you would like to be prompt information, but often they'll say, yeah, thanks. I got to get that done. Let's get this and move forward. And that's where we earned reliability, trust. Or that's where we've gained a hey. This guy cares because we do. We care about our customers, and we care about finding the solutions.Lisa Ryan: I think that's such an essential lesson for everybody, not only in manufacturing and distribution but in every industry. When we're reaching out to potential customers, and they're not getting back to us, we think it's all about us. Oh, they must not like me. They must not want to do business with me. I must be getting on their nerves. But, in most cases, it's got nothing to do with you. We don't know that they just had a tornado, that they just had a flood, that they just had a major breakdown, that their maintenance guy quit, or all of these other things that are taking their attention.And we are such this tiny dot on their radar. We don't think about it. So if we can take ourselves out of the equation and just let them know, okay, I'm here from you. I'm here for you when you need me. I'm here for you when you need me, but just keep on keeping on that. You're adding value and keeping your ego out of it. It sounds like it's true.Steve Burke: And I often ask questions like, when would you like me to reach back to you? I understand how busy you are. Is there someone you can delegate this to? I can take this off your plate and perhaps work directly with a technician. And we do that routinely because technicians are the keys to maintaining reliability. It's not in a CEO's hands. It's not in a maintenance manager's hands. He directs these solutions to go out there and fix things. If they're going to do it, they can if they have the knowledge and ability to do it.But they can't do anything if just because somebody wants them to. If they don't have the tools, the knowledge, and the experience to get it done or the resource, we can help them out with that resource, right? So I still get dirty, Lisa. I still go down into the dirty pits, and I still get my hands all greasy if that means helping out a customer well.Lisa Ryan: You're also setting an excellent example for the people who work for you, which I want to get into a little bit, too, because I know that you have a small company and that labor is hard to find. But it sounds like you are building a heck of a team by doing what you're doing and letting your employees know that you are just as willing as they are to get your hands dirty. So what would you say are some of the things you are doing to create that workplace culture that keeps people working for you and not going down the street to a competitor.Steve Burke: What a challenge. When I started this company, I asked the people I was bringing to the team. Is this what you want to do? Is there anything else you want to do? Because if there is, now is the time to go and do it. But if you elect to stay here, if you like to move forward, success will follow because we will be working harder than the next guy. We will be providing services that the next person isn't providing. We will be sincerely focused on delivering what our company is designed around.That is to provide solutions to the industry. Once I gave some time, and I said, don't answer now. You cannot answer me right now. Don't just nod your head. Don't just say yes. I want you to go home, talk with your wife. I want you to think about it. I want you to look at it. And I want you to see if there's anything else that could make you happier. And once they did, once they came on board. How are we going to make this the best company? How are we going to strive for excellence daily? One of our slogans is always better, never best, because we want to improve daily for our customers. And for us. It may be adding a paper void packing machine. It may be buying a piece of equipment in one of the cases of hose crimper, the state of the art where you could buy one that was less money. But we're going to buy the best one to make sure we can do it quickly, efficiently and provide the best product for our customers.So those kinds of things and listening to their input. Well, think we should do this. One of the cases is we take parts and get them in from a customer, and they're Rod. They're just a piece of metal. Okay, we bag them and vacuum seal them, and then we put a label on the outside of them because some of our customers don't have the luxury of having a climate-controlled area to store their parts. And when they store metal steel, they'll find that they'll get corroded, rust, covered, damaged, and it's hard to see them.Sometimes it's hard to read numbers that are stamped on or laser etched down. So we put them in a half-inch yellow and black label, and it's easy for them to read. So we try to simplify everywhere we do bin management for our customers because of that.Lisa Ryan: So I think a vital lesson, too, is making sure that your employees have that commitment to you by not making them. When we think about bringing people on board, we're like, oh, no, you have to give me an answer right now where sometimes when you take the time you let them process, and then when they're ready to commit to you, the employees know where you're coming from, and they're willing to make that commitment. And it

Connect with Martin DeBono:Website: www.GAF.energyLinkedIn:Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. Our guest today is Martin DeBono. Martin is President of GAF energy. GAF energy has built a combined manufacturing and R&D facility in California, where they are currently building the next generation of solar roofing systems. Martin, welcome to the show.Martin DeBono: Thank you for having me.Lisa Ryan: So share with us a bit about your background and what led you into solar.Martin DeBono: Out of college, I joined the navy. I was a submarine officer for five years after serving in the military. I pursued a career in technology, working for various software and hardware companies during that journey. A recruiter reached out to me and said, hey, are you interested in working for the solar power company? This conversation took place back in 2012. At the time, I thought solar power, that's just a niche industry. It turns out that even at the time, it wasn't an easy industry, and it's been growing very quickly.Last year, more than half of all the new electricity generation in the United States came from solar. For the last eight or nine years, I've been in solar. I recently became the President of GAF energy, an operating company in the standard industry family of companies. Standard Industries is best known for owning the largest roofing manufacturing company in Europe. So we joined a company with a strong heritage in roofing and manufacturing.The reason for this is that there is a convergence between solar roofing and being part of the world's largest manufacturer, and we felt it would be a great platform in which to push both industries forward.Lisa Ryan: So why solar? What are some of the opportunities that you see for solar long term? I live in Cleveland, Ohio, so that's not usually where we think of the sun a lot.Martin DeBono: I'm here in California, one of the nation's leading solar markets. What's remarkable is the cost of solar generators has come down, and the cost of electricity has gone up. In solar, you're getting electricity from technology. We've seen the pricing of technology go down. The price of your iPhone has come down. The cost of computers has come down. You get way more performance at a similar price point.Solar energy is following the price of other technology. We get more for the same price, whereas traditional energy – coal, natural gas, etc. - is going up because those commodity prices are rising with inflation. The opportunity with solar energy is enormous, including in places like Ohio, especially when you incorporate the solar generating material into the building itself. By manufacturing a solar roof, we can kill two birds with one stone, integrating the solar and roofing systems. It reduces costs and will allow more people to get the benefits of solar electricity, which is a more reliable source of electricity. It's also a less expensive source of electricity than what you get from utilities.Lisa Ryan: It's also obviously a lot cleaner and something that we don't have to worry about running out of any time soon. As far as the contribution of making a difference on the planet, it also sounds like solar has a leg up on a lot of the other places that we get our energy from.Martin DeBono: Many people aren't sure about the impacts of climate change and global warming, but I try to tell many people that the effects of getting fossil fuels include shipping. You're transporting it, and that takes money.As a veteran myself, we have the Sixth Fleet, which protects the Persian Gulf to ensure oil supplies. So, first, there's a benefit for the self-generation of electricity. Second, the answer is staring us in the face during the day, or at least for half the day. The amount of energy that the sun transmits to the earth in one minute Is the equivalent of all the world's power plants' output any year. If we can harness a small fraction of that, we can wean ourselves off fossil fuels. You're right, it is clean, but I think that the most common reason people choose to get a solar roof is selfish, and that is it's less expensive. You can use a significant investment investing in solar - it pays off.Lisa Ryan: So, your emphasis has been that you are doing the R&D and the manufacturing in the United States. Why is that such a big deal?Martin DeBono: Yes, so it's been shocking now that I'm old. I just had a major milestone of a birthday. But you see just the loss of manufacturing expertise in the United States, especially in solar. As recently as five or six years ago, almost a third of the solar panels in the world were manufactured by US companies. Now that number is less than 5%, and I've seen facilities move across borders or in different States to save a few hundred thousand dollars or a few million dollars a year.Perhaps, the most concerning is that I've seen an exodus of talent from the clean energy industry accompanying the decline of American manufacturing excellence in clean energy. By this, I mean, eight or nine years ago, when I got into the solar industry, it was pretty easy to recruit people because they're like, hey yeah, I'm going to work for an American company, I want to make a difference, as you mentioned. Solar energy is clean energy, and it does indeed help with some of the challenges that our energy supply chain has today. But they become disillusioned when they have to spend 2, 3, 4 months a year away from their home by flying to Asia, where the predominant manufacturers of solar products in the world are located. They are trying to implement their inventions on the manufacturing line. So today, those same people are not getting into the industry but instead taking jobs at Google or Microsoft. They are highly educated, and those companies need highly educated people. So for us, combining manufacturing and R&D was a necessity. We want to attract talent and meet our customers' demands very quickly.Lisa Ryan: Solar has been around for a while. What is it that you're doing on your end? In bringing solar to the United States, what differentiates what they get from Asia, and the rest of the world.Martin DeBono: Yes, so, as I mentioned, by combining R&D and manufacturing in the same facility, we've been able to make advances very, very rapidly. We just announced the first world's first nail-able solar single, and it's the first advancement in the way solar is installed in about 30 years. The traditional way solar is installed to take a flat-screen TV and bolt it to the roof through the water protection barrier. Many of your listeners have seen a solar panel it's about two feet by three feet or two feet by four feet and lug it up to the roof. We've created a nail-able solar shingle.There's nothing else like it in the world. It will reduce the installation time remarkably. It also makes sure that the waterproof integrity of the home is maintained, and it looks a lot better than those early solar panels. In addition, you're able to do it quickly again by not having our R&D team having to spend half their lives on planes. Instead, they walk 10 feet to see the manufacturing line where these new products are created.Lisa Ryan: Please tell us what those panels look like compared to other solar panels.Martin DeBono: Yes, certainly. What we produce looks nothing like the traditional solar panels at all. It looks like a shingle. Traditional shingles are 40 inches wide by about 16 inches tall, and the two singles overlap half of it. You shingle half of the single above it, and it covers the single below it to make sure water flows. We created a solar shingle about five feet wide and again 16 inches deep. They nail it down, and it looks just like a shingle.If you are standing on the sidewalk and you're looking up at your house, they are perfectly in line with the rest of the roof. There is nothing that the single soul itself is the shingle. It's remarkable. No one has invented it before because I don't think people thought it could be invented. But, more importantly, there are several factors at play that allow this to be the right time for such an invention.First, what's happened in the solar industry is the solar cell itself is no longer the most expensive part of the value chain. The actual installation of the solar module is the most costly part. When someone looks at what makes up the cost of a solar system, getting installed is the most significant part. Sales and marketing is the second biggest part. The solar cell itself has come down much in the same way. If you think that an iPhone memory has come down to low prices, processing power has also come down. That spawned a new form of computer, the handheld computer or the iPhone.Similarly, the cell's very, very low cost has enabled us to focus elsewhere. The first reason is the reduction in the price of the solar cell. The second reason is that we come from it from a roofing perspective. Finally, GAF Energy, through its relationship with Standard Industries, knows a lot about manufacturing, and we're able to put that manufacturing expertise to bear to create an entirely new form factor.Based on the single form factor, the company has been perfecting for 50 or 60 years. When you combine the advances in materials technology and solar, along with the manufacturing expertise in roofing, those are two of the three concentric components. The last was a willingness to invest. Standard Industries is one of the largest private companies in the United States, if not the world. They have the capital to invest. They've invested in leading technology such as recycling asphalt shingles. As I mentioned, their willingness and desire to make a long-term investment, even though it seems very quickly, it's taken us two, three years to do this. They've invested two to three years in making this happen. As a result, the combination of some of the constituent components of solar pricing is coming down.Roofing manufacturing expertise, willingness to it, and willingness to invest has allowed GAF energy to move state of the art, and it's something that nobody expected can be done.Lisa Ryan: Well, I think, from a Labor standpoint, it also sounds like there can be tremendous savings in labor if you're not lugging those big titles up to the roof and doing all that. Talk a bit about that aspect of your product.Martin DeBono: Yes, absolutely. The labor savings is twofold: one, the actual physical act of getting the material on the roof is much simpler. The shingles go up just using traditional shingle transportation methodologies. In many parts of the country, shingles are delivered right onto the roof, as opposed to a solar module having to be lugged up the roof - it's about 47 pounds, I think the only limit is 50 pounds, so it's just under that. Once on the roof, they use a nail gun, and it goes down at least twice as fast as the next fastest technology for solar. So the savings are significant. The other savings that we get are directly related to our manufacturing in the United States because we're closer to the customer. Because our factories are in California, we can take advantage of streamlined logistics and supply chains.As I mentioned, 95% of the solar panels United States come from outside the United States, and if the weather is holding up the ports on either coast or the amount of time it takes shipping across the ocean, that's a lot of time - six to 12 weeks on the water. With inflation, that eats into your profits. We have labor savings. The savings one gets from the supply chain nearby are fantastic.Lisa Ryan: Right. We've heard for years about how manufacturers were leaving the United States. So it sounds like this is an excellent excuse to start bringing some of that manufacturing back. But what do you think are some of the reasons we've lost so much manufacturing here in the states, including solar.Martin DeBono: I think that we've lost it because many companies just became concerned about cost and not innovation. They became worried about prices and not customer satisfaction. Then, of course, there's no doubt that other governments, China specifically, said, hey, we need to build a manufacturing base here. So they made low-cost government loans available to incentivize people to move their facilities overseas. The reason I say it's short-term is that I've seen decisions made where one moves a factory from the United States outside the United States for a few million dollars. You lose that in terms of meeting changing market requirements rapidly. You lose that in terms of productivity losses because you have people who designed the equipment which isn't located near the people operating the equipment.When there are challenges in production, those are costs that don't show up in any spreadsheet initially. But they show up overall. So I think that what you see in the solar industry is that as more of the solar manufacturing has moved overseas, the industry's overall profitability has declined.I tell many people who are not familiar with the solar industry, like the airline industry. If you added up all the profits in the airline industry from 1932 to the year 2000, it was zero. They couldn't make any money. We saw that in the solar industry, solar manufacturing was outsourced to Asia. The overall profits in the solar industry have gone away. That's because they lost sight of innovation, and they lost sight of customer service.Lisa Ryan: Is your product both for home use and commercial use, or is it primarily geared one or the other?Martin DeBono: Our product is primarily geared towards residential space. GAF is the largest residential roofing manufacturing company in the United States. They're one of the largest commercial manufacturers as well. But we designed our product to blend perfectly with a typical residential roof, so in the United States, the predominant roof type is our singles. Our solar shingle matches very well with the traditional shingle, and so you have a seamless transition from one to the other. There's so much opportunity in residential roofing right now that that's our focus. We put this in perspective that over 5 million people get a new roof a year. GAF has over 25% market share, so they're able to give them a million people a year. The opportunity around roofing is so prominent on the residential side that that's where we'll focus initially.Lisa Ryan: On this show, we talk a lot about workplace culture in manufacturing and the skilled trades, which is an excellent correlation between both. What are the things that you are doing well with your employee? How are you not only attracting people to your industry but what are some of the things that you're doing to keep to keep them there?Martin DeBono I don't want to call our employees skilled and unskilled because our assembly line operators have become very skilled in what they do. So let's say the folks, the PhDs, and the masters who invent the products for them can see the fruits of their labor. Every day is gratifying; even now, the factory has been up and running for four or five months. People go out, and walk the line, and look at what's going on, and it gives them a tremendous sense of satisfaction.They also appreciate that they don't have to get on a plane to make any changes. Suppose you're a creative type, an engineer, an inventor, physicist, or chemist trying to make a significant impact in the world. In that case, the ability to see the fruits of your labor is remarkably rewarding. It exceeded my greatest expectation. We did this because we wanted to attract talent and retain it. The looks and the smiles on people's faces when they see that line running and the ability for us to change very quickly has paid huge dividends on the Ph.D. master side of the house as well as our operators.The cultural challenge is typically when you have a manufacturing company. All the people that designed the actual widget or whatever you're making are physically separated from those that manufacture it. You can end up a multicast cultural system, where Hey, I'm skilled, your unskilled labor. We're trying hard to avoid that. It does cost us a bit more, but we share the same cafeteria benefits to both skilled and unskilled labor. While that costs a bit, what we believe that enables us to do is if you can instill empathy for the operators and the people that develop it. You will come up with a much more efficient manufacturing process more quickly.The time it might cost in downtime has increased the time to implement the new features that enable you to get more margin by having just one workforce, as opposed to thinking about it, if skilled and unskilled, there are benefits there.Operating in California is a very high-cost environment, and automation is also super important to us. We expect that, over time, we will be able to automate more and more of the process to improve our output. Our operators will move from doing manual steps to being the ones who oversee the robots that, through it, this is only possible by having the R&D team co-located with the factory.Lisa Ryan: One, and the other benefit too is if somebody on that factory floor, who is using the product, sees something that maybe the engineers miss because they're not involved in the day-to-day manufacturing or the day-to-day installation, that conversation happens having to fly over to Asia to make a tweak that may or may not work. You're having that conversation, and when those hourly, the unskilled employees feel heard feel that they're making a difference. That level of commitment and loyalty to the company goes up several times because they're not just some grunt work around the line. They're being listened to and having lunch with the skilled labor.Martin DeBono: It happens all the time. A young woman has a Ph.D. who is talking with the operators. They are the ones in manufacturing and impacted her part of the value chain. They develop the type on that instantiate itself. She came and redesigned some of the ergonomics of that. This is all the best practice in manufacturing, but here you have it happening at a much quicker pace. Similarly, our attrition now is remarkably low for what we pay. We have had such low attrition on the operator side, and I attribute that they are just as invested in making these things, making this company work because their recommendations are, if not immediately implemented there, directly discussed. It's not like they put them in some box, and they make your back in six to nine months, but they can go and talk with the folks that are responsible for that particular job. It has been remarkable.I think that, overall, this will enable our success. We have a good market product and market fit. We can manufacture this product locally so we'll stay in front of the competition concerning implementing these new capabilities. Therefore, the challenge becomes, how do we manage our costs? We manage our costs by getting costs out of the system faster. Simply...

Connect with Gil Mayron:LinkedIn: https://www.linkedin.com/in/gilmayron/Website: https://cobotnation.com/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. Our guest today is Gil Mayron. Gil is the founder and CEO of Cobot Nation, Architects of Automation. Before Cobot, Gil was a pioneer of the consumer 3D printing industry, as the founder and CEO of Botmill 3D, which manufactured and sold the first fully assembled desktop 3D printers. 3D Systems Corp acquired Botmill. He resides in Las Vegas, Nevada, with his wife and two children. Gil, welcome to the show.Gil Mayron: Thank you.Lisa Ryan: So share with us your background and what led you to everything you're doing in robotics and automation.Gil Mayron: I started in 3D printing. 3D printing is inherently slow, so there are only so many things that you can do to speed up the printing process when usually they use lasers, plastic filament, or some other method. But most of the time, it's going either point by point or layer by layer, so the only way that you can speed up 3D printing is typically through something like automation. We recognized early on that automation was in the same phase as 3D printing.  When I sold the company back in 2011, very few companies took it on the consumer level. The industrial patents are starting to expire, and it makes sense that the adoption is coming around now, especially since you have code.Lisa Ryan: That has changed the industrial landscape, hasn't it?Gil Mayron: My background in 3D printing led me to do automation and robotics; it's a very similar type of process when it comes to sales and other things like that. The only difference over here is that we deal with customers directly. We're not making a product that we're selling as a commodity; we are making a highly customizable product to the customers' needs. We do something very few do.What led me over to robotics is that 3D printing is slow. It's inherently slow, and the way that you can speed it up is through automation. So automating little tiny tasks between the more significant tasks, and in automation, especially in industrial robots. We saw the same scenario in 3D printing in 2008, 2009, and 2010 which led me to sell the company in 2011. The industrial companies, so all the large industrial robotic arms, are incredibly high priced. It isn't easy to integrate within your company, so we saw that the opportunity was virtually identical to what we saw in 3D printing.Lisa Ryan: Oh wow. What do you think when it comes to robotics? We've been talking a lot about automation and the need for automation, but what role do you think robotics plays as far as the future of manufacturing.Gil Mayron: The role that robotics plays in the future of manufacturing is probably upwards of 95% or more within the actual processes being done. Our engineers go out to facilities daily. It's incredible how many facilities that we go to, which are some of the largest names in the world, and they have no automation or the automation that they think they have is not automation. It's not helping up the flow of what they're doing. All of the repetitive tasks; all the things where you have humans that could be sitting on the floor sitting on a chair; they're doing something for a few hours at a time, because their safety reasons, or they physically get tired. Those are all things that are going to get replaced. Those are all things that we can easily have robots do. Those are things that are happening right now. You'll probably see a massive transition happen for the next 12 to 24 months, especially considering that our customers were saying that they're having problems hiring labor, so not only are they automating, but they're having problems hiring work.Lisa Ryan: So what do you think has been part of the hesitation when you go into these plants, especially large companies where you think automation will be a natural fit? Why the hesitation for bringing any automation in.Gil Mayron: In general, and manufacturing in general, just its sound and taste are typically gritty. It's a dirty business that comes with a lot of wiring, many electronics, and many things of that nature. The hesitation is a fear factor as to how I get into this. It sounds like it will be so expensive because only the largest companies on the planet have it. When they look at videos of Tesla, and they see these robots operating on things, then there is no way that somebody who has a singular plant is thinking to himself. Oh, I can do with that guy does because they're doing it because they make a lot of money. We're seeing now that the ability to get into it is it doesn't take a lot of money at all. It takes 10s of thousands, if not just a few thousand dollars, to get into automation these days, as opposed to what it would have been like just a few years ago, which is hundreds of thousands, if not millions of dollars to automate a singular task or a singular cell. So the hesitation is price; the hesitation has been the perceived fear of what comes with it. Not only that, let's keep in mind the owners of a lot of companies out there, whether unionized or not, the hesitation is also around the human aspect of what's happening there. We're starting to see more and more companies finally getting a grip around, "look, automation is happening. If I don't do it, somebody else is going to do it." And by the time I do it, if I'm the only one who does it, anyone else is probably somewhere in the range of about 18 to 24 months behind me.My throughput is already increased, so that gives me a huge leg up to get customers. The hesitation will start to cancel itself out and more coming along the lines of adopting automation.Lisa Ryan: When we talk about the human factor and the potential displacement, there are pros and cons. The pros, being that with labor being as hard to find, it eliminates some of that. It also eliminates repetitive tasks and makes for a safer environment. The cons are that people are going to lose their jobs. How do you deal with both ends of the spectrum, helping people incorporate more robotics in their facility?Gil Mayron: If you know that automation is coming, you should have the ability to prepare at least to a slight degree. As far as trying to train yourself with more management within the company you're operating. Not just the cell, but now, you're running multiple cells at the same time for the companies themselves who are automating. We have yet to see a company where the only reason they're automating is safety. Maybe they may start that way but, it's also throughput. It's how much can make it done in a given period.It's always going to be more with a robot. It's always going to be more consistent with the robot. A robot ultimately pays itself off, so you have no cost associated with it over time, except for a small support cost to keep it up and running throughout the years.But then, of course, you have the cons. The cons are really on the human side of things, but for humans for people. Some things can be done. First, when companies are automating, they should compensate the people remaining at the company. They should be giving good packages for the people leaving the company. They should be raising the wages, so we shouldn't hear from a lot of these companies that Oh, we can't find labor. If you're automating, and you know precisely what your margins will be, you know exactly what you're going to make.Most of the companies we deal with are publicly traded, so they know what the effect is on what they do. So there should be no reason why they can't incorporate a program to raise wages, give good benefits packages, give good retirement packages, and ultimately offer more training to the employees who may need that training, especially the younger ones coming in.Lisa Ryan: How do you start that conversation with the employees getting their feedback taking a look at the tasks that could be automated. How do you get their feeling for where they want to go in the company if they stay with the company? Is there a process that you have seen your clients go through at that from your starting point?Gil Mayron: Two years ago, when we would go to a facility visit, we often would disguise ourselves. We wouldn't wear a Cobot Nation hat or a shirt. Now, when our engineers show up, we're fully branded. The employees know what's going on. Many of them got excited because they were helping out their job to a very good degree. Most companies that start in automation are the process. They usually don't just automate an entire facility in one shot. Usually, it's a process so that they might automate one line, then two lines, then the majority of the facility, and then ultimately all of the facility at the end of the day.Lisa Ryan: When you're talking about robots, talk a bit of that. There's the term itself - how that's playing out. How can cobots augment the capabilities of the humans that you still have working there?Gil Mayron: The definition of a cobot is a collaborative robot. This could be a robot that can work with or without a human. Most of the robots that we make at my company are collaborative, so we intend to have them work next to a human. Even though we put all the safety precautions, the intention is that it could work next to a human. For example, it'll have perimeter sensing so that it won't go beyond a certain point. We can add other sensors so that the robot may slow down when a human enters a room. If the robot is to hit somebody, it stops immediately. There are other things that we can't stop. If you were to run into the robot, that's your fault, but that's pretty much where we see how it's able to work with humans. I also want to point out collaborative robots are lead generators. It's an entry point in getting to full automation. Every time we gain a new customer, every time somebody takes it on, within a month, they call us back, and they say, "hey can we do this again over here?' Many times they have to repeat things that they're doing. We have some customers where one robot will replace 21 people on one line in a day, so that's seven people per shift; three shifts - one robot replacing them. It is also quadrupling their throughput. That's an excellent example of what these robots can do. Whether they work with or without a human, it is of the collaborative nature. We do that with every customer, but it usually leads up to full automation.Lisa Ryan: So what do you think are some of the myths about automation? What are some things that people don't tell you about automation that happens in the real world?Gil Mayron: Many people think that they can't do automation, for whatever reason. Maybe it's because they're not an engineer. Perhaps it's because they're just not adept at certain things, or they're just set in their ways. There is a warning for those who have a contract type of business. Let's say a contract manufacturer who has a machine tending process. They deal with the CNC machine, and they're doing the same process, day in and day out. That same customer needs to start to embrace automation because if their neighbor gets automation, they will lose that business immediately. There goes their entire livelihood, and I can tell you the amount of smaller companies that rely on one, two, or three main customers, and if they lose them, they lose their livelihood. So the perceived nature of automation needs to change. People need to embrace automation. It's going to happen, whether they like it or not.I might be a catalyst in my own right, but it doesn't mean that somebody else will be. It needs to be embraced, and the gritty nature needs to be perceived a little differently. We're doing the branding of our company in much more of a Willy Wonka type of style. If you walked into our office, you wouldn't see any robots until you walked into one of our collaborations, also played on the word collaborative laboratory. You open the door, and suddenly you see overhead conveyors, different types of robots, vision systems, and things like that. We try to take that automation and break it down into something that makes sense for the customer. Most of our customers have no engineering talent at their company, so we do these things from scratch.We train them on what to do, and we move on from there, so that's one way to deal with having people adopt automation.Lisa Ryan: One of the things we've seen in the last couple of years with COVID is the speeding up of technology. How much more user-friendly things have become because we've been forced into technology adoption. From your standpoint, what are some of the coolest things that you've seen as making the software more user-friendly or getting people involved; getting people trained? I'm sure it's easier today than it was just a couple of years ago to get involved with robotics.Gil Mayron: All of our competitors tried to sell their collaborative robots as robots that are easy to program. That you can do by yourself if you buy the robots. We get many calls from those customers that say, "Hey, I still have the robot in the box. I have no idea what to do with it." We handle things at my company because we do not have the customer do any programming whatsoever. The interface that we give them is custom to their company. It could be branded to their company and be as simple as they wanted to be. If they only wanted to adjust a cycle time, that's all the robot will do. This way, it makes it a lot easier to train the people who are getting into automation on dealing with all of these robots.Some of the cool things that we're seeing are integrating all of the machines on the machine floor very easily. Because of that, we're seeing that it's very easy for automation to start to take place. We're seeing that people are getting a little more excited about automation rather than scared of automation. That's going to play a big part in unionized companies. They need to think about what they're going to do. Some of the cool things on top of just those regular scenarios are the type of things that we're working on. For example, the ability to go into a bin of a whole bunch of different objects, and for the robot to be able to identify precisely what it's looking for - whether by shape, color, texture, whatever the case may be, it can pick it up. It can do something with it. It can have multiple tools on that. It can go directly over to a welding cell. It can then go directly over to a painting cell. It can go directly over to the truck. We're seeing all these things start to happen, and people are excited about it.Lisa Ryan: You take away that fear with a done-for-you system. When you have that robot sitting in a box, I'm sure that you're like, "I have no idea what to do." You've spent enough money that you don't want to break it the first time you take it out. So having somebody that you can lean on to get the system going for you sounds like an excellent plan for getting started.Gil Mayron: It also allows companies to manage their employees. The ones that can stay on board - it's very easy for them to stay on board; it's very easy to be trained. The ones who are not staying on board should be offered a greater incentive for leaving or more training.Lisa Ryan: Is there a success story or two that comes to mind when you think about the difference that cobots have made for one of your clients?Gil Mayron: We have a case study that's coming out in about a month with one of our customers. They are a billion-dollar company that deals with corrugated pipes. One of their processes involves 17 different humans. Think of an entire line - you have 17 people across this line, and at the end of the process, you have somebody sitting on the floor who's taking a pipe and is putting a pipe into a machine that's banging the end the pipe. We call that a swaging machine. It has a bunch of dyes inside, and it just bangs the end of that pipe to shape it into whatever it is that they want. This person is sitting on the floor, and they're taking these pipes, which are extremely sharp. They have to wear gloves, and they have to put one in, take it out, switch it over, put it in, take it out, move on to the next one. They have to do it within a specific time because the machine itself is timed, not the person. The person doesn't have a way to press a foot pedal every time. They need to keep up with the machine. The only way to make that consistent, safe, something worthwhile that immediately brings a profit to the company is to replace it with a robot. That's one of the case studies that we have coming out. We think it's going to be a very formidable one.This is the kind of company where they saw the improvement within the first day, and then they decided to do it across all of their other facilities.Lisa Ryan: So it sounds from that that it's taking a walk around the plant, and seeing those repetitive tasks; seeing those people sitting on the floor, putting themselves in some danger that may be the best place to start to see how it works.Gil Mayron: That's correct. If somebody has a notion of their company being automated, they can certainly come to my company. We will send an engineer out immediately; we have engineers all over the place. The engineer's job is to go and look at every application, then walk through the facility. They identify every application and rank every application on what's the most important thing to the customer.We can then come back to them with a return on investment. We can show them which application will make them the most money, which one is good for them to do now, what they should be phasing out later on, and so on. We give a good starting point. We don't know about the rest of the companies. We don't think that they operate in much of the same way. For us, it's essential to hold their hand as we go through the process.Lisa Ryan: So is there anything that we should know about the processes of how you work with your customers?Gil Mayron: One thing to know is that any customer that has anything to do with manufacturing, that's something that they should be looking at the automation for and if they don't. They should certainly be wary of their competitors and when their competitors are looking at automation. Other than that, I think we covered most of it. We try to simplify the process as much as possible, and we believe we are doing a pretty good job at it. My background dictates that. We're going to continue on this path, and simplify, and try to have as many people as possible adopt it.Lisa Ryan: Wonderful. If somebody did want to get a hold of you to continue the conversation, what would be the best way for them to do that?Gil Mayron: I can be reached via LinkedIn or my company. Other than that, there's no other way to contact me. So I'm completely dislocated from any other social network. The company, however, is on every single social network - Cobot nation.Lisa Ryan: All right, and I will put your contact information there in the show notes too. Gil, it has been a pleasure...

Connect with Joel Block: Website: JoelBlock.comLisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. I'm here today with Joel Block. Joel is a futurist, long-time venture capitalist, and hedge fund manager, which is gobbledygook for a professional investor who lives in a shark tank like on TV. Initially, an expert blackjack player, counting cards, and beating casinos in Las Vegas, Joel later built and sold his publishing company to a Fortune 500 company. Joel, welcome to the show.Joel Block: Lisa, thanks for having me. How are you?Lisa Ryan: Good, good, thanks. I know that this is a manufacturing podcast, and we're going to be getting there. There are all kinds of disruptive business trends going on in manufacturing. Before we get started, you are a professional investor, which means you look forward in time. How do you decide exactly what to do regarding these trends that you're talking about?Joel Block: I started in the gambling business, and I take risks for a living. I look at things. Investors give me their capital. I'm not a broker. Investors literally give me their money, and then we buy something together, and then we share the profits. That's how Wall Street works. It's how my business functions, and that's been in that business for 30 years. I've bought and sold companies. I've built and sold my own company from scratch to a big company, and I've done with many other companies entrepreneurial-type people have tried to do.I look at companies from many different perspectives, and I think about the impact of other things happening in the world. Then I think about who will win, who will lose, and that's how I do it.One of the things that we'll talk about, I hope, is disruptive business trends because these are things that could knock you out of your lane or cause you some problems. I like to think about that. I want to think about what could go right, what could go wrong, and the impact of different kinds of external and internal things. There's a lot here, and you will unpack a lot of stuff.Lisa Ryan: So, how did you get started in all this? What was your journey as far as where you started and how you ended up here?Joel Block: I learned how to play blackjack as a young. I was 20-21 years old. I was in casinos. I was playing, and actually, I knew I was good at it. But I also knew if I kept playing, I wouldn't have gone to college, and it would have been bad for me in the long run. So I ended up getting an accounting degree and became a CPA. I worked at Price Waterhouse, but I was a little rebellious. I wasn't an excellent account. If I didn't quit, I'd been fired for sure.What made me not be a good accountant made me great in business. I asked a lot of questions. I always wondered, and they didn't want me to wonder things. They wanted me to be a good soldier and do the work. I wasn't a good soldier, but I was a great general. That wasn't what they needed from me, so I get that, and it wasn't the right environment. So I started a real estate syndication company where I learned how to raise capital.I learned how this stuff works and then started a venture capital transaction I built and sold. I've just stayed in that business ever since. I love doing deals and buying and selling things. I spent a lot of time helping executives of different kinds of companies to see the world. It may be another way because I bring a different perspective to them. I helped them to learn from all the things that I've learned. You go inside of 1000 companies in your career – buying, selling, looking at their books and records and be involved with those companies, and you learn a few things. I've been around the block and share a lot of Intel with my clients or companies we work with.Lisa Ryan: A lot of the discussions you get into have to do with private equity, so what exactly does that mean, and why are you having these kinds of conversations with manufacturers recently?Joel Block: Many smaller companies are being approached by private equity firms to buy them. This is a very, very robust time for sales transactions. I recently was talking to a guy who called me to say, "I'm not ready to sell my company yet, but I'm starting to get some calls." What do you think I said? Well, the iron is hot. Companies are paying a lot for companies, so these private equity outfits are spending a lot. So if you're thinking about selling, you may not be perfectly ready, but the time may be just right.Companies are paying a lot because there's a lot of money on the sidelines. Private equity companies only make money. When they deploy their capital and buy assets and then put those assets to work, that's the only way they make any money. They've got a big pool of capital in a bank that's not making them any money, and they got to put it to work. That's part of the reason they're so aggressively looking for companies to buy now that presupposes everybody understands what private equity is if I could just give you a minute on this.Lisa Ryan: Yeah, please.Joel Block: It's a complicated business. I've spent my whole life in it. It's a kind of business that most people don't understand. Here's how this works. If you have equity ownership, like when you have your house, you have a mortgage, which is the bank borrowing - that's debt. Then there's equity, which is the part that you own. So we're not talking about the debt part. We're talking about the equity part, just the amount you own.Equity comes in two primary forms. There could be public equity, which is the stock market where people put their savings or their retirement or their pension fund goes into. They're called equity securities. That's where you're buying the equity of a company. That's public equity because it's been processed through the government regulatory system. There's a whole other category called private equity, which has any business funded privately now that could be a small business where a family puts the money in to run their little company. It could be a large business that is just as owned privately by families are people, but it's not public, so there can be many owners. A private equity firm is a firm that specializes in taking in capital from typically other firms and other funds, and they aggregate all this capital together. Then they go and look to buy things. They tend to have something in common. Whatever it is they believe, they'll have a strategy.For example, they want to put a network of manufacturing companies in a specific category. We want to buy and put the other roofing companies; we want to buy and put together manufacturing companies; we want to buy and put together mobile home parks. There are different ways that you can group assets. These companies are looking for venture capital and finance for innovative or early-stage companies. Another example is hedge funds which are well known but not well understood. There are lots of different kinds. Most of the types that affect manufacturing are these firms looking to buy companies, and they're building portfolios of what are called portfolio companies.They're trying to get ten different companies with some synergy to work together and help each other. They're not financial buyers, which are only looking for returns. They're called strategic buyers because they're trying to build synergies among their assets. So that's who's making the phone calls. The good news is that they're not price-sensitive. They're more concerned about the value of their portfolio and your ability to contribute to their portfolio. It's not about how great you are. It's about how great of a fit you are into their portfolio.Lisa Ryan: When I think about venture capital, I think of days of old where these companies were coming in and buying companies to tear them apart and sell them and pieces. But it sounds like what you're saying is they're looking to build something where a group of companies will make money. So instead of tearing things apart, they're building things together. Is that what I'm hearing?Joel Block: Well, these things are not. They're not mutually exclusive. You know some companies by and tear things down, some companies by an aggregate assets something so there are all different strategies that these companies will do. But what probably affects the manufacturing industry more right now are probably the ones where the people are aggregating - strategically aggregating assets to build a portfolio. That is not to say that somebody wouldn't buy a company and then have a garage sale. There might be great real estate. They may have some other idea for what the business could be. There's a familiar saying right in my neighborhood where there was a great restaurant fantastic restaurant. They came in probably paid 50 times more than the restaurant was worth because they wanted the real estate to build a large-scale apartment shopping Center. So it's not out of the question that that doesn't exist. It does. Most of what's happening in manufacturing right now are probably strategic buys for building portfolios.Lisa Ryan: And what do you see, are some of the other significant trends on the horizon for manufacturers?Joel Block: The fact that private equities calling is a trend. It's not a disruptive trend, but it's happening. Some other things are big and important. The most significant thing that manufacturing companies could do immediately that would most impact their pricing would most positively impact their bottom line is to get off the transactional treadmill where you sell something. The next day you have to sell something else, next to sell something else and move toward more of a subscription or a recurring revenue model. Many people will say, oh, this doesn't apply to us. That's more of a technology thing. But Wall Street and the private equity companies love these kinds of revenue numbers. They love recurring revenue because it's dependable.In manufacturing, what does that mean that could be an auto-ship, where somebody signs up for an automatic shipment every month. You give them some reason why they would do that; Maybe they get priority shipping, priority inventory, maybe they get a slight price discount for being automatic. You can have a whole service department, where your service department is based on we're going to send somebody out whenever you need them. So we have a service contract service. Contracts are recurring revenue, so there are different ways that manufacturing firms can install recurring revenue programs into their model. It's essential because recurring revenue is higher quality than transactional revenue, so it's different. The real difference here, the trend, is that this is not about all dollars being the same color green because they're not. Recurring revenue dollars are worth more, and that's just an important distinction that I hope your listeners can understand. Suppose they move in the direction of starting to create higher quality revenue. In that case, they move toward making their company more valuable, whether it's to an acquirer or just for the current ownership and management to have more money come to the bottom line. Those are better dollars.Lisa Ryan: It just seems that this is a different way of thinking when it comes to manufacturing and when the last two years now, with COVID and everything else that's been going on of looking at every aspect of your business differently. Certainly, recurring revenue, some auto-ship can be a game-changer for some people listening today.Joel Block: it's a real game-changer. The first big company that did this was Microsoft. Microsoft was always in the software sales business, but they're no longer in the software sales business. They're in the software rental business. You don't buy Office anymore. You rent it yearly - Office 365, their new program (and it took a long time for it to catch on). Still, once it finally caught on, they were rewarded with not only enormously more revenue, enormously more net profit, but enormously more market CAP.Those prices or stock went enormously higher, so part of it was related to more revenue that came to the bottom line, and part of it was a Wall Street rewarded them with a higher number. All those things together, it's fantastic. These are concerns that are easy for companies to address. I wouldn't say easy, but this isn't the most complicated thing in the world. If people sit in a boardroom and start thinking, How can we create some recurrence? How can we create some repetitiveness so that our salespeople don't have to be knocking on doors all the time? That's the beginning of a solution.Lisa Ryan: It also ties those customers to you. It makes it harder for them to leave you and go to a competitor because they know you're always there. Their products are expected.Joel Block: And that's why your company becomes more valuable. You're not a transient kind of company where things are coming and going, and maybe somebody buys, perhaps they don't buy. When you start getting the kind of regularity, regularity means loyalty and loyalty are bankable. When you've got that then, you're in the money.Lisa Ryan: When I think about it from a convenience factor, because, even with the Microsoft 365, which of course I went into that fighting kicking screaming, I wanted to buy that and pay one time for it. But then they just made it so darn attractive for you, with the different things you could do on PowerPoint, and it just made sense to stay with that program. So it's the same thing if you as a manufacturer can figure out how to make it more convenient for your customers, how to give them, like you said, discounts or better service or priority shipping, or that they know that they are first in line.When it comes to some of the shortages that we're doing because they're recurring customers versus some Joe off the street, that will be a one-shot deal. If you're making an offer, they can't refuse.Joel Block: That's exactly right. If you look more carefully at Microsoft, think about this because this is what used to happen. Maybe your experience is the same. About every five years, I buy a new copy of Office. I go to Staples, and I pay about $200. Of that. Microsoft probably got half, so they got about $100. Then I would take that disk and give copies of it to my kids. But, of course, I wasn't supposed to do that, so we all did the same thing.So, every five years, Microsoft got 100 bucks out of me. So they come out with this new idea, they say, look you're going to get all our updates, you're going to get everything too, you're going to have it all the time, and you get the whole suite there's no fool around. You can have as many people, and all five of your people in your family can be on the thing. So what do they do now? So Staples is out of the loop, so they got 100 bucks direct. They get it every year, so in 10 years under my old pattern, they would have probably got $200, but now under the new pattern, they get $1,000, so that's five times more.Wall Street gave them a two-times bump on their multiple because I'm a more loyal customer now. I mean, now they've got predictable revenue. Suppose you look at the stock price. Their stock price is up almost ten times from about 2014. The numbers have gone up by ten times when you look at the numbers. It's not inflation. It's because Wall Street has rewarded them for specific patterns of activity. These patterns of movement help manufacturing companies do precisely the same thing.They need to be doing some of this. This is a very disruptive trend; it's a powerful trend, and there are strategies that companies need to employ to hook into these things and to take advantage of them.Lisa Ryan: When you also mentioned inflation so, and that's something that's come up in a lot of conversations in the last several weeks, several months, how does inflationary market affect manufacturing.Joel Block: Well, you know what's obvious is the prices go higher. A couple of things happen. Number one on the supply side, everything you have to buy goes higher. On the sell side, everything to sell as to go higher, so the whole ocean just lifted a little bit, you know, everything went up a little bit. But there's a lot more to it than that. If you borrow money, there's a perfect chance that interest rates will be higher. Not long from now, I mean the Fed is working on this right now. They haven't exactly released it; we'll know more by the time this episode comes out. But the likelihood is that the Fed will be raising interest rates at least somewhat, so that means that if you carry inventory, you're carrying costs are going to be going higher. That puts pressure on manufacturers. There's a lot there, so that's a very problematic thing in the manufacturing sector. Manufacturers need to plan for that. They need to be as lean as they can on inventory. But then, they're conflicted because there's a supply chain problem. They want to have as much inventory as they can because otherwise, they may not give me more. So there's an actual conflict, which companies have to work through and think through. That's the impact of inflation. Inflation impacts us in many different ways, and the other thing is that consumers are getting pinched. As prices start going higher, food, gas, travel, housing - those numbers go higher for people. They have less discretionary income, so depending on the kind of product you produce, whether you're an end-user product or something that goes into another product, there may be fewer dollars available. So as the economy starts to contract and get a little smaller because people don't have the money to keep going.Over the last ten years, more air has been put into the balloon. The balloon is the economy, and the economy gets bigger and bigger and bigger. And now, a little bit of air will start coming out of that balloon. It's not going to be like the recession during COVID. It's not going to be the recession of 2008, but we can expect that the balloons will get a little smaller. That means that everybody will have to tighten their belt a little bit because things are going to change. That's a more extensive discussion than now, but certainly, it's an important question that you bring up.Lisa Ryan: What are you, seeing as far as the manufacturers are doing well right now to prepare for the future? What are the mistakes that you're seeing that they're making?Joel Block: You know COVID was kind of a mixed bag for people. For some people, it just knocked them off their podium, and they lost their balance. They had to reorganize themselves. For others demonstrated remarkable resilience, and they confirmed the ability to think clearly that this market is not working anymore. They looked at the landscape. They asked what other landscapes can we address. They found other places to start selling in different ways to put their products into the marketplace. They started thinking about what other problems that we could solve are. That's the question that you have. That's the fundamental question. What problem do we solve? When you understand what problem you solve well, who has this problem. Where are those people? How do...

Connect with Michelle Katics:Email: Michelle@BankersLab.com.LinkedIn: https://www.linkedin.com/in/michellekatics/Website: BankersLab.comLisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. Our guest today is Michelle Katics. Michelle is co-founder and CEO of Bankers Lab who provide lending simulation tools to the financial sector for the last ten years in over 30 countries. Bankers Lab is making these financial simulations available to the manufacturing sector, which can benefit from the world-class solutions used by banks for years. Bankers Lab is working to disrupt finance in the manufacturing sector, reduce the time and friction required to finance manufacturing equipment, and enable more rapid innovation. Michelle, welcome to the show.Michelle Katics: Thank you for having me, Lisa.Lisa Ryan: Michelle, please share with us some of your background and what led you to do what you're doing with Bankers Lab.Michelle Katics: Well, I'm a recovering banker who was solving problems. I was working internationally in banking, we were trying to teach people across our banks' footprint in 57 countries how to optimize their portfolios, which was no easy feat. My background is very much mathematics and economics. It seemed like everything I had done till that point came together. We saw that simulation was a way to solve those problems to help people see things that you can't see from a textbook and to see how the world works through simulation.Lisa Ryan: So, share with us a bit of that process. When I think simulation, I think video games and I think of flying a plane and trying not to crash it. How does that look like in the banking industry?Michelle Katics: Well, the concept is the same in a sense. We use the analogy of a flight simulator. We say to people, okay, that's great you can drive the plane, but do you know what to do in a storm? Do you can you do a water landing?It is pretty comical if you Google how to do a water landing in an airplane. It gives you ten steps, but it's ten steps. Set the flaps to this. Set that attack angle to that, etc. Anybody can read those steps, and you can probably memorize them and repeat them as a trick at the bar or something. There's no way you and I will do a water landing. There's such a difference between just reading something in a textbook and practicing it. The concept of simulation, which is what they use in most verticals. Most industry verticals these days are something we also do.In the financial sector, you'd say, gosh, it's been my dream to learn how to manage a multi-billion dollar credit card portfolio. I don't know why you'd have that dream these abilities. No problem, give me two days with you, and we're going to put you into the simulator, and you're going to make all these decisions about the portfolio. What are my credit criteria? What size credit limits should I give people. The thing about simulation in any simulation is that you press the button, and you get to see what will happen in two years. You see it instantly, so your learning loop is seconds long, whereas if you try to learn by doing and your job, you'd have to wait two years. It creates this very rapid learning.When you have these complex portfolios, with the cause and effect in there, it's just such an easy way for people to wrap their heads around that. They can practice, not just the core concepts, but they can also anticipate what might happen in the future. Clients can come to us and say, well, we think this might happen next year, what should we do? No problem, let's simulate it. So, you know, do the fire drill if you will.Lisa Ryan: So, what are you seeing or how are you seeing manufacturers using this type of technology?Michelle Katics: It is a new thing for us, and it's really fun. In manufacturing, if you step back for a minute and look at the industry, you've always had massive manufacturers doing their finance, such as  GE capital. In the past, to do your financing if you're going to sell jet engines or medical equipment or robots or whatever it is, you want to provide that funding for your customers, which many big manufacturers do. In the past, you had to have big on-premises servers and a team of 20 people. Systems manage those loans. These days with things in the cloud, we're seeing that you don't need to be as big as GE anymore to do that.To some extent, because of the cloud-based software, finance for this part of the economy has always been full of friction. Let's face it. Banks are not the best at providing this kind of financing. They're good at many things, but typically this has been, I would say, a bit of an Achilles heel, so the manufacturers like, wait a minute, let's do this ourselves.Lisa Ryan: We've all heard things about outsourcing. We outsource all kinds of services and products and everything these days. But what you're talking about is something you refer to as insourcing. What does that look like, and why might some manufacturing companies insource their financing?Michelle Katics: Let’s take an example of we're selling robot arms. Some small shop comes to us and says we'd love to buy three of these. We have a significant labor shortage. I would tell them that as the manufacturer of that robot, go to the bank, get a working capital loan, and return. I'm outsourcing the finance. That poor, small business goes to the bank that needs 8500 pieces of paperwork, so, you might not sell that equipment if that small business can't get that loan. Insourcing finance means I've already built the robot arms. I own them. I've made the thing I'm selling.  I will provide the financing myself. I might either lease them, and many manufacturers do this already. Still, I'll give that financing myself, so what we see, for example, is with cloud-based systems, you can set up simple credit criteria. The other thing is that I can increase sales of my robot arms because I've created a financing option. I'm the one-stop-shop. It would help if you bought this thing for me. Canon financial does a great job with print shops and stuff that they're always financing the printers.But the other upshot is that it creates a customer stickiness that we noticed. For example, Canon Financial provides the financing for the local print shop to buy a massive printer to print posters and stuff like that for the community. Still, it's sticky because once the leasing arrangement ends, Canon Financial is right in there saying, hey, we see that this equipment was depreciated. Do you want to upgrade to the next model? It provides this natural touchpoint with the customers to keep expanding your sales to them, renewing it, and providing them the next generation of equipment. If they went to the bank, bought it, and went away, you have to start with them to sell more.Lisa Ryan: So, in the case of that robot arm, though they are financing it to own it, they're not financing it to lease it like you would with a printer for Canon.Michelle Katics: We see a trend that we would call equipment as a service. I say software as a service, meaning you don't own the software. If you have ever used Office 365, that's the service because you don't own it. You're just renting it for nine bucks a month. I don't want to cough up the 250 bucks upfront. I'll pay nine dollars a month, thank you very much. Equipment as a service is the same concept. Creating flexible and short-term leasing options is what we're seeing. Successful manufacturers who do this provide all those options. So do you want to purchase to own? Will we give you this working capital loan for this equipment, or do you want a long-term lease? If it's a crane, I only need to lease it for a month, so that's more like equipment as a service. In that type of sector, they'd have these leasing arrangements, but at the end of the day, good lending is centered around good product design. Each manufacturer needs to kind of know whether you're building cranes; that might be kind of more short-term use. You might have particular financing options versus somebody selling robot arms where these factories say, no, we want to buy it to own it, thank you very much. We will use this thing until we run it into the ground. For each type of manufacturer, there are different product types for financing that are most suitable.For agriculture, for example, John Deere has provided financing suited to their industry. The other reason manufacturers are better suited to do this is you go to a bank and say we need an agricultural loan, so the guys going to pay he can pay us zero. So while he's planting his crops, and he'll pay you a bullet loan when he does his harvest, John Deere understands agriculture, so they're good at providing that product structure, whereas the bank might be like, what? You’re not going to pay me anything for four months? It's that type of those product features that the manufacturers already understand those customers in a way that the banks don't.Lisa Ryan: So, as far as from a personnel standpoint, though, is that something that manufacturers would have to take on a whole new department and a whole new learning curve, or is this something that Bankers Lab that you set it up and you do that work for them.Michelle Katics: We see people setting this up in different ways. For example, the more prominent companies would have a couple of people say under the CFO who would manage this. Some people pull in a consultant to set up the initial credit criteria. We come in with the simulation exercise, just so as an organization, then we say to sort of, for example, to the manufacturer. What are your goals with this financing? Are you trying to increase sales? Are you trying to make sure that you get product renewals? Are you more interested in short-term cash, or are you trying to maximize it over the long term when you set up the criteria? Our partner, Turnkey Lender, has software where it's super easy to do the drop-down boxes, and somebody can set up the software for you. You're up and running, and you can bring in a consultant. We can find the people. Then the idea is to automate it as much as possible and have people within the manufacturer set up financing. Before, we had to hire a whole department of people to sit and push the 83 pages of paper for the loan applications. This process is as automated as possible, and you have somebody who understands the strategy. Then you can manage that.Lisa Ryan: Okay, so what are some of the typical hurdles when manufacturers are insourcing finance?Michelle Katics: Well, these days, with the cloud-based software, I think, sometimes it might just be perceptions. If you say to somebody, oh plug into this loan origination and management system, they assume it's going to be some giant IT project. These perceptions are starting to get shattered. I'll give you a great example with Canva. Canva is software that you might use online to create what a graphic designer would have done in the past. The free account is so powerful, right? But the point is with cloud-based software, there's a perception that it would be difficult. It's a lot easier. One thing is just the perceptions are a hurdle. The second thing that is true for any lender is to understand lending. That's where we come in. If that's the sticking point, no problem. We'll put you in the flight simulator and teach you enough to be dangerous. You have a sound system with lots of reasonable checks and balances, and you have somebody good set it up according to your strategy, but I think that knowledge gap is what we're trying to make sure is not a sticking point.Lisa Ryan: I just had an experience, and I think about financing and like you said, the 84 pages of paperwork, I took my car in four tires the other day, and of course, they found a lot more with my car, so it ended up being a lot more expensive than I thought. Instead of paying them my credit card at the end, I went to their lender and got pre-approved, and I never gave the tire to replace my credit card. They did 90 days same as cash, it was the easiest thing on the planet, I did an electronic signature.It's so easy how these types of services are making our lives, especially when now, mind you. I signed and probably said electronic sign and 84-page document that I have no idea what's in it; hopefully, they're not taking my first child, which would be difficult since I don't have one except my cats. So it wasn't an easy option versus what you were talking about. That small manufacturer is going to a bank—having to justify and do all of the paperwork they need to decide whether or not you're going to get the loan.Michelle Katics: Here's my question about the manufacturing sector.  The financial industry has done an excellent job at the point of sale. We've created many frictionless financial products for the consumers. But at the end of the day, the financial sector is failing the manufacturing industry because it's our engine of growth. For example, when we talked to manufacturers in northeast Ohio, you guys have all these crippling Labor shortages. You realize you can source other products, but if you have supply chain issues, you need capital. We need to fix this in the manufacturing sector to have the frictionless process you have as a consumer. Because it's the engine of growth of the economy, we're having supply chain issues if we can get that capital expenditure sorted out and made easier for everybody. It just seems as it'll help both at the broad economic level and help those companies grow faster.Lisa Ryan: So what are some of the companies that you've worked with that are doing this?Michelle Katics: So a great example, I'd like to call our partner, Turnkey Lender, who provides the actual production software for this activity. Turnkey lender, if you go to their website and their blogs, they have some excellent case studies about Siemens that they're working with, so you can read those. Case studies are online about the work that they have done with them which is very interesting for the manufacturers. We can always give you those links for the show notes if you like because those are highly relevant. We're also seeing things like the example of a solar panel manufacturer saying, oh wait, I can increase my sales if I provide the financing. Here's another excellent example where lending is contextualized in the manufacturer knows more than the bank meaning. A solar panel manufacturer might evaluate that financing, not just based on the borrower's ability to repay. It's more about what's the site plan. Is there enough sun? Is the thing going to pay for itself? Is the installer high quality? The manufacturer will see that whole set of elements outside of just the borrower, whereas if you go to the bank for that solar panel, that the bank will just be looking at the borrower.Lisa Ryan: Is this program work primarily for selling parts already on the shelf? You mentioned robot arms - if they already manufacturer the robot arms. But what about things like custom orders and customer equipment? Would that also work the same? Or how would that work?Michelle Katics: From a finance perspective, it works, the same. But another area to call out based on that question of what other products does this work for some of that the other thing that it works well for is what we call factoring. So invoice financing works great for that. If you're having supply chain issues, often you get your lending the short-term money while the goods are in transit—that is gap financing. For any manufacturing company, especially right now, a supply chain issues. If I were a CFO, I'd step back and say what's causing friction in my system right now and how can I use throw some financing to unlock it? My suppliers are struggling because the transit times or longer, and they need were financing for that transit time. Maybe I’ll provide that. Oh, and I made extra interest income along the way. So I would look at the whole system and say, okay, what is my sticking point? Is it a Labor shortage? Can I throw some tech at it? Where's the friction in the system, and let's see if we can use some financial options some financial engineering to smooth out those bumps.Lisa Ryan: When you brought up an interesting point with interest, too, that becomes an additional source of revenue for the company - instead of that manufacturer paying the bank. Are you seeing that many of these companies are offering interest rates similar to the bank? Are they the same as the bank? Do they give them a little bit of a break on the interest rate to make it more attractive to them? Or do they make it perhaps higher for the convenience of being a one-stop-shop?Michelle Katics: I'm going a little bit finance geek out on you. So the short answer is that any manufacturer should be in a position to charge a lower rate, whether or not they decide to do that, for the following reasons so let's say you have a piece of equipment that costs $100,000. And we go to the Bank to borrow the money, and we're going to the bank needs to have the hundred thousand dollars. They need the cash to give me for the loan, and then I pay interest on hundred thousand dollars. Let's say it's 10%. If I'm the manufacturer, I have the equipment, and maybe let's imagine it cost us $50,000 to produce the equipment. I've already done my cash outlay right, so I lend the money to my buyer for $100,000. The cool thing is, I collect interest on $100,000, but I only needed the 50, whereas the Bank needed 100. It seems to say so my so based on that simple example. So my interest margin is my profit margin is double the bay if that makes sense because I'm charging interest to my client, not just on the goods I produced, but I'm charging them the interest in my profit margin.I'm in a position I have all this flexibility. I have another revenue stream, but then that's a little short-sighted. Yes, I have another revenue stream, but the ample opportunity is that customer stickiness, the customer relationship. Your customer will be very loyal and keep coming back to you, rather than a different manufacturer for that type of thing. If they just filled out a one-page thing and upped my contract, I got the new generation of equipment two years later. Why would I switch right from the print shop? Why would I rip out all my Canon stuff and buy from somebody else when I just thought one page for new get my latest equipment called good.Lisa Ryan: Right, well, and you're also differentiating yourself from all of your competitors because they are going the traditional route. It makes it a lot more challenging to get the financing you need so as a differentiating factor, so not only for long-term retention of customers, like in the cannon example. But also for attracting new business because you make it kind of a done for you one-stop-shop type of thing.Michelle Katics: Exactly. Let's say our print shop chose between two big printer companies, absolutely. I would even tolerate a...

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. Our guest today is Rich Morin. Rich spent 20 years helping companies recruit, interview, hire, and retain employees that fit their culture. In addition, he spent eight years in the US managing the sales of Fortune 500 companies selling Boeing, Sikorsky, General Dynamics, General Motors, Ford, Mack truck, and many others. He also trained many managers in leadership and coaching skills, including helping sales forces become more competent and confident in sales skills. Rich, welcome to the show.Rich Morin: Well, I appreciate it, and thank you very much for the opportunity.Lisa Ryan: Absolutely. Would you please share with us about your background and what led you to do what you're doing?Rich Morin: It's a short story. Twenty-one years ago, I was involved with a training company that also dealers for international hiring assessments. Although that company met its demise, I'm still a very active dealer with Profiles International, which puts me in front and center with companies looking to recruit, interview, hire, coach, and retain the kinds of people that fit their company and culture.I have spent a reasonable amount of time interviewing my clients, providing the objective tools for the hiring process. We all have been guilty of hiring somebody on a gut feeling, and a short while later, we regretted that gut feeling because the good feeling is gone. Then you have to terminate the person without objective data. Unfortunately, that still happens too often. Lisa Ryan: I'm sure well, let's go with the thinking about the hold on. Thinking about those profiles of people you've talked about, a certain gut feeling went with it that could sometimes lead us to hire wrong. In today's workplace, where it's so difficult to find people, it makes it more critical than ever to make sure you're bringing on the right people. How do profiles help you to do that, knowing about that person before they ever come on board?Rich Morin: Well, there are two answers to your question. First, and speaking of what profiles has an example, a pattern is made of the position, so the company takes a hard look at what they expect from this position in person. The applicant then completes a series of questions, and these cover the gamut from mathematics to general knowledge to verbal skills and so on. It becomes a match against the company's pattern, so now, you have the job call it manufacturing manager or sales manager doesn't matter. There's a pattern, and then you see the fit, that is, the level of fit between the applicant and the position.I'm coming out of that where the applicant fell out of the grading. So, if you can imagine, and I can send sample reports, of course, but on a scale of one through 10, if the position requires a 6, 7, 8 and if the applicant is weak, of course, it will generate interview questions to help examine that. Two things happen. The company then realizes maybe they don't need that higher level of skill, or the person is flat out not going to make it. So they're probably going to struggle if you do hire them for that position. But the good news is you can match them against a different position using the same data. Perhaps there's a better fit, so what comes out of this, you're right. You've got an applicant in a very thin field these days. There's not a lot of them applying, but now, if they don't fit the first position they applied for, they're offered a second position to which they fit. They go, wow, I'll take that job because they fit. Part of this has got to do with their cerebral ability, verbal reasoning, numerical skill, and numerical reasoning.  We are the only critters that use numbers and words. Some people are good at numbers, and some are not. If the job requires a lot of numbers, it's nice to know that upfront. They might interview well and look great, but if they can't do numbers, they're going to struggle, hate it, and leave. They're going to affect your company's culture because it will be moaning and groaning about how tough it is because they never fit in the first place.Lisa Ryan: One, it sounds like this is something to know each job description; to understand what is entailed, to take a look at people who have been successful in that so that you're not doing just an overall profile for your company, but as for that specific situation, how does a company figure out how to build those profiles for each position that they're interviewing for?Rich Morin: Well, it's straightforward. Within the system, there's a library, and they can scroll through and pick the exact title, if you will, or something that's very, very, very similar. They take it, of course, they rename it to make it the same company, write their name and so on. That's one way. The other way is they can do a job assessment survey. It's a bunch of questions that ask what does this job requires. Here's the problem: we'll say that you have somebody who has been doing a job for 20 years or 30 years.Well, their interpretation of what the job requires is changed. They're still doing it, and everybody accepts that, but the new people coming in there are new to it. Communications requirements, new software requirements - so in actuality, the job is not the one the person who is leaving has been doing; it's a very different job. So to your point, the companies have to be very aware of the changes happening so rapidly. Back to the assessment, they want to hire somebody with the capacity, verbal skill, verbal reasoning, and a library. Some people can speak well, but they don't understand a lot of the words. They can fool you because they have a nice rhythm to their delivery, but they're not competent in the language. Especially if you're in a multi-lingual situation where you have people dealing with different languages or language skills, verbal skills and reasoning are critical.Without repeating the numbers aspect, those things are essential. So now you have a profile of the current position requirements, and then you can do a match that makes sense.Lisa Ryan: It also seems that it's essential to keep up to date with people. Because, as you said, somebody's been in a position for 20 years they had a job description they're doing it. But, looking at not what the position was, but what the position needs to be going forward, mainly we're just coming out of this pandemic. Technology has changed just about every part of business, and so looking at, starting with today and looking into the future, would be a critical part for people as they're starting to look at who they need to hire and what kind of positions they need to fill the talent that goes along with that.Rich Morin: Well, yes, and so, then brings me up to a different solution if you will. Fit first tech.com is a company that has been in business for 20 years. They do a lot of business throughout North America, but what they do is unique. Companies are coming out now; they're starting to hire. However, the job boards are not full of applicants. However, the job boards exist, whether it's Monster or Indeed, or all these different job boards. So this system creates some questions. The applicants answer the questions, and automatically they're funneled. So instead of reading through 50 resumes, I'll elaborate in a resume in a minute, but instead of reading 50 resumes, the top three or five candidates are at the very top. Job descriptions are not based on what they've done because often, what they've done is not crucial versus what they're required to do.Now they've got the top applicants at the top. They can read the resume, and they can read the resultant questions. Their replies to those questions now have a real sense of who this person is, and there's a speed element required here. You want to answer these applications rapidly because you can still get them if they apply to multiple companies. So you've got a job as a forklift operator, and so 50 people apply. Do they want to be a forklift operator? Well, not really. They want a job. Now, they will tell you they always wanted to be a forklift operator. That was a dream job - well, that's probably not true. These assessments help you see through them. The forklift operator has got so much capacity. You're from a warehouse manager position because it happens to be a vacancy, and the guy goes, yeah, I'd like that. The reason he would like that is that he matches the requirements and the questions. It shows what he is capable of, not what he has done or she has done. The funneling helps deal with it if you're not getting a flood of applicants but getting many applicants. It funnels them and gives you questions. Then it goes further and helps you coach them, which helps retain them and helps to onboard them. You have more objective data about these applicants.One more element, now it doesn't preclude you, the employer, from contacting referrals. What it does is help you create questions. When the applicant submits his five referrals questions, the employer can go to the referrals and ask very pertinent questions about this person.Not, "Oh, he's a great guy. She's a nice girl who's been here five years; who cares. We want to know specifics about how they operate, what their good points are. What are their bad points? What kind of conflicts? You can ask those kinds of questions, so now you know the whole story. It can take the referral information to still speak with the referrals, but now you've got some objective criteria they responded to. You're not trying to reach people on the phone. You're not trying to call them and get ahold of them. There's no time, you got to hire them, and you haven't spoken to the referrals.Lisa Ryan: Right and speaking to referrals is a critical part of that because people can come across well in an interview that can come across great on paper. But then, when you take the time to ask the question to those referrals, you might find out things like, ooh, that person won't work a single minute of overtime, or that person will never pitch into something that's not specifically on their job description. So we find out these little personality quirks that may not show up necessarily in the interview process.Rich Morin: That is correct. Especially if you think about the challenge of being a leader these days, now, I take exception to the word manager, and I'll explain. I don't like to be managed, but you can coach and lead me. I not really don't know too many people that want to be managed.To stay on that for a moment, you look at a winning team of any kind baseball, football, soccer, it doesn't matter. Those teams are not managed to greatness, no, no they're coached and led to excellence. These assessments provide the "managers" now; if I had it my way, I promote them to coach and leader. But it gives them objective data to help coach and lead these people; some will be better equipped than their leader.They have more knowledge, more wisdom, or experience, and more education. That's a good thing, so these assessments help hire better people than the person interviewing. You don't want to hire people smaller than yourself.Lisa Ryan: So let's think about that for a minute. We've used the assessment. We found the person we're going to hire. They're a good match for the position and the company. We've checked out their referrals. What are some ways you have seen your clients successfully onboarding these people, so the offer is made, but there may be a week or a couple of weeks before that person starts?And then, once they start, you want to hit the ground running. What's like that t-minus two weeks, until the first month or two that that person's onboarding. That would be an excellent way to onboard them.Rich Morin: Well, there are a few different aspects to my reply. The first is that a company's culture is so fragile. Everybody you bring in can either support it or undermine it. So you've decided to hire somebody within your ranks who is a great person, a hard worker, focused, and loyal to the company. So those are the kinds of people you want to team up with that new entrant into your company. Those first few days will set the course. Too often, companies hire somebody, and everybody's busy, so the person stumbles around, will you know go to this department go to that department. Still, they're kind of on their own, and they're forming wrong opinions about what's going on and about the helter-skelter ways things are happening. Maybe it's because of a flood of orders, who knows, but they don't know that, so you want to invest a reasonable amount of time planning.It's the four p's: you plan, you prepare, you practice, and then, you perform well. You want your people to have a planned entrance.  You want to prepare them for them. You want them to practice, so now they're with people with seniority and experience. They see the attitude. They see a safe environment. So these people are taking the time to explain how to do the work safely. That includes ergonomics - how to get up from your chair and move your arms and wrists so you don't develop carpal tunnel syndrome. A lot goes into onboarding, but picking the people you want to team them up with goes a long way and helps establish what is required, especially if it's multi-dimensional.So the one person introduces the new applicant to the next person that says, well, sometimes you'll be doing this person's job. So there's a transfer of knowledge, and it's smooth, and the person understands clearly what they've stepped into.Lisa Ryan: Exactly. Figuring out that first-day work buddy is also essential, but it helps in a couple of different ways. Number one, that person who is your good employee, who's been with you, who has the right attitude, feels that they are valued. They are empowered to be that person's leader or guide for their first couple of weeks on the job.It makes the person that's starting feel more connected because they're not sitting in a basement filling out paperwork for the first day of their job, and nobody even knows they were supposed to be there. You're also allowing a relationship to happen. We've probably all been there, where that very first person that we meet our first day on the job or the first person that invites us out to lunch. That person is our friend for the rest of the time that we're there. So making sure that you start those relationships right off the bat with something like that gives everybody involved a much better onboarding experience.Rich Morin: Absolutely. I use sports as an example. I love sports, and I think it's a great example of coaching and leading. What do they do with a rookie? They give them the locker right beside the veteran. Why is that not any veteran but the right veteran? Because they see how they prepare, they think, they see how they act, and that person takes them under the wing. They team them up with these people for why, well, they want them to be good.In the case of sports, you're paying them a lot of money. That doesn't mean they're going to be good. You must coach and lead them. By teaming them up with somebody like a mentor, the word mentor applies here. That goes on, and it establishes a bond. They will link with that person for a long time because they were matched correctly. Their personalities meld, and the position strengths, perhaps yeah, it's powerful.Lisa Ryan: Look at the amount of investment that we have in that employee. We spent time going through the interview process and the screening process, and then we're paying for the profile assessments to come through. So by the time we have that person come on board, we could have invested thousands, if not tens of thousands of dollars in the process unless we are very structured about how we're bringing that person on and how we're welcoming them to the organization. We're making sure that on day one, that their workspace is set up, maybe their business cards have been ordered, their password is ready, their desk is clean, and their truck is clean, whatever it is. People know that they are showing up for the job. You spend all of this kind of money upfront, so you must keep that in mind. Once that person starts - and for the first 2, 3, 6 months that they're on board - they probably have interviewed with other companies and are just as likely to say, "hmm, this company isn't what I thought it was. I'm out of here." So all of that money you invested in them walks out the door.Rich Morin: Absolutely, the two words that come to mind to support when you said, our cost and price, so it costs a lot to bring somebody on board. It costs a lot if they do come on board. When they harm and scare away your customers. They'd cause issues in the road. The absolute fragile culture you tried so hard to create is cost versus the price of an objective assessment, so now, the person, the applicant has completed. You've taken the time, your HR people, whoever's interviewing takes the time to read the results. They look at the questions and interview the person using objective data. Suddenly, for the price of two or $300, they have a very clear view of the person and, by the way, the applicant is impressed because now they've been asked to do something that other employers are not. They're going, wow, this company put me through this assessment. They get a personal copy, not one that matches, but one that tells them about them. They go, wow, I didn't know that I was good at this or that. This is a fit; this doesn't fit - so it's a win/win. Cost versus price, let me assure you, the price of an assessment is enormously lower than the cost of not using them, and let's face it, we've all made hires in haste. We've all made hires based on gut feeling, and it doesn't work out very well too often.Lisa Ryan: It makes me think of this past year. My husband was part of the great resignation. He was with a company for 13 years, and his priorities shifted. He realized that as he started to get to the end of his career, he wanted more. He didn't feel valued and appreciated all these things that I talked about in my programs. So finally, a company on LinkedIn found him. They told him it was going to be a long process. It was about a two-month interviewing process which included about six hours of personality assessments. The company wanted to make sure that they got the right person in. I will tell you. It was a match made in heaven. But, of course, I could have told them that Scott would be the most excellent employee that they had. I thought the funniest thing was that he scored the lowest areas were things like creativity and innovation. Well, he's a cost accountant, so those are the areas that you don't want people to be innovative and creative. So I thought it was funny. When I look at the last couple of months of him being with this company, how much of a difference and how valued he felt right off the bat, I know that what he went through that process that company had 10s of thousands of dollars invested in him in that whole two-month process. I don't know how many other people they were interviewing; I'm just happy they chose Scott.Rich Morin: And that's a great...

Connect with Chip HautalaLinkedin: https://www.linkedin.com/in/chiphautala/LinkedIn: https://www.linkedin.com/company/motionsource-international-llc/Website: www.MotionSource1.com. Phone: 888-963-moto or 888-963-6686.Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. I'm here today with Chip Hautala. Chip is CEO at MotionSource international. He's an experienced business owner and C-level executive with a demonstrated history of working in the machinery and manufacturing industry. In addition, he has business development skills, working with startups, sales development, budgeting, business planning, and team building. Chip, welcome to the show.Chip Hautala: Thank you, Lisa, glad to be here.Lisa Ryan: Chip, please share with us a bit about your background and what led you to MotionSource?Chip Hautala: I founded MotionSource in 2012. We're in our tenth year. Before that, I was involved in industrial distribution lubrication and hydraulics with another company. I was a CIO and CFO there. After they let me go, a number of our suppliers contacted me and asked me if I had was if I was going to start my own company. I said, well, I hadn't thought about it. After five or six of them came to me and said, you really should start your own company, I did that. That's how MotionSource began.Lisa Ryan: So you were doing something right if you have vendors and suppliers coming to you and wanting you to start your own company. What do you think are some of the things that you were doing right? You have a pretty cool culture over there. For ten years, you've been doing it. What do you think it was that made those people reach out to you?Chip Hautala: I think it's because I had hired every person who works there in the former business I was in. I take a team concept as I'm an old ballplayer. People say a small business is a family. I say no. Families can be dysfunctional, but teams work together. Teams always have each other's back. So I developed a team mentality, and I carry that over into MotionSource. My word is my bond. I've never gone back on my word in business, and I think that counts for something.Lisa Ryan: And how have you incorporated that team concept into MotionSource? What does that look like for your employees?Chip Hautala: Everyone works together. JFK had a saying that a rising tide lifts all ships. We have profit sharing. Some benefits that make it possible for everyone to work together. We have split commissions. If you were one of our salespeople and you didn't quite know enough about this. There was somebody else in a building and did they can work with you on that. They're going to receive a commission too. You're going to receive a commission, so everybody wins in the end. I'm big on quotes, but there's a Bruce Springsteen quote that says nobody wins unless everybody wins. That's the way I run the business.Lisa Ryan: That's a unique outlook when it comes to sales. Often you have one salesperson, and they go in, close the account, and get all the commission, even though a lot of other people potentially help them do that. It sounds like you created something that allows everybody on that team to win.Chip Hautala: Exactly. It's a team mentality because everybody wins when we win. It's a matter of making sure that everyone is taken care of; everybody does their job. So it lends to a more cooperative environment. When the company makes a profit, which we've been making for many years now, at the end of the year, we sit down, and we say, okay, we're going to divvy this up among everyone. Everybody gets an equal share of what the profit is. I don't need to be a multi-millionaire. But everybody and I always tell everyone here. You know what? This is how I feed my family, but this is how you feed your family. Let's stick together on this. Let's work together. It's led to an incredibly high employee retention level.Lisa Ryan: What are some specific stories or incidents or somebody who came from another company and got involved with the profit sharing. What things are you doing that they have shared with you? What are the reasons that they stay with you?Chip Hautala: One of the excellent examples I have is our national sales manager, Heather Pucci. She was working for a recruiting firm. I was looking to hire another salesperson, and she kept saying sending applicants over to us. I was interviewing them, and I said they were missing something. Finally, she came into the office, and she told Chip I'm sick and tired of sending you quality people, and you're rejecting them. What are you looking for? I said I'm looking for you. I'm looking for somebody like you, that's what I'm looking for.She said, are you offering me a job? I said, yeah, I think I am. She had zero experience in industrial sales, but she was doing industrial recruiting for a long time. She came in, and I said, it's going to be tough because you're going to have to learn all this stuff. You're going to learn everything that we know. If you're willing to do that, you're going to make a hell of a lot more money than you're making in recruiting. She committed to it. She was a salesperson for several years, and now she's our national sales manager. All of our salesmen report to her. That's a success story that we have.Lisa Ryan: It says something about you, especially in an industry where it's so hard to find people to begin with, with industry experience. What did you look for beyond that in finding somebody who had the personality, had the drive, and was willing to commit to the industry? You were taking a chance on them, and that it worked out well for you.Chip Hautala: I always say this as long as you don't quit on me, I'll never quit on you. You're never a loser until you quit trying. As long as you keep trying, I will keep working with you. She had a rough first year. I'll be honest with you. She didn't do very well on sales, and I lost money on her the first year, but she kept trying and got better. She evolved to the point where she was one of our top salespeople. She had some management skills, and she became a sales manager.Everyone responded very well, which is interesting because we're in a male-dominated industry, and she's a female sales manager. It worked out well.Lisa Ryan: You're sending a message to the rest of your employees, too, when you're not giving up on someone. When companies lose money on a sales rep in the first year, they're gone. But the fact that you continue not to give up on her and allow her to fail forward has paid off. That leads to a level of commitment and loyalty when employees see that you have their back and you're not going to let them go with the first sign of things not going well.Chip Hautala: Definitely. You learn a lot more in defeat than you learn in victory. As long as a person is learning and going forward and keeps trying, that's a winner. That's somebody that I want to be associated with going forward. That's how we have populated or our company here. I don't call anyone.Lisa Ryan: Right. Some of the other unique aspects of your business that we've talked about are that you offer more flexible hours and unlimited vacation time. Please tell us a bit about that because we hear all of these things with Netflix and these other companies offering unlimited vacation times. People are curious as to how they do that. Do people take advantage of it? How do you get any work done when you're just out basically allowing your employees to do whatever they want to do so? How has that worked for you?Chip Hautala: it's worked out well. One of the reasons is that this is your business, whether you're an employee or a business owner. We succeed when everyone succeeds. We do have an unlimited vacation here, but the rule is, you have to have somebody to cover for you. There's never a time when everyone's on vacation when a customer is not served. There's never a time when somebody is on vacation when their emails are not monitored.It's incumbent upon you. If you want the privilege of unlimited vacation, you are responsible for making sure that everyone's covered. It's worked out excellent. In our society, we tend to value work too much. Compared to European societies, Americans work far more. That's not what life's all about. A gentleman I worked for many years ago told me that nothing that happens inside these walls is as important as what happens outside these walls. I've carried that philosophy forward. Your work needs to be done. You need to hit your numbers, but you also need to have a life outside of here. That's what you're working for.Lisa Ryan: Right. You have the communication in place that people are responsible for filling their slots to ensure they're covered. But you're also empowering them and treating them like the adult human beings that they are. They can have that work-life flexibility that is so important, especially in these last 19 months, 20 months, however long it's been with COVID. People have changed their priorities. It sounds like you've been doing that all along, and it's helping you keep the people you have.Chip Hautala: It's funny that you mentioned that, Lisa. The funny part about it was in 2012 when I started MotionSource. I'm an old it guy. I thought that I would set up the system where everything is in the cloud or phone systems in the cloud. Our networks are in the cloud; our business systems are in the cloud. I thought to myself. If we ever have a snow day, everybody could still work from home. Never did I imagine there'd be a pandemic, where we'd be closed for how long.Last year, during the pandemic, we worked remotely for 15 months. Everybody worked from home. Nobody skipped a beat. There was never a phone call that was missed. Everybody worked a lot harder. They considered it a privilege to be able to work from home. We never laid anybody off. We never had any shut down as far as that goes. It worked a lot better than it was a perfect Union of technology and communication with our employees.Lisa Ryan: And how are you handling that now? They were working exclusively from home for 15 months. Do they have to come back to the plant? Is there even more flexibility in working versus coming to the office? How is that working out now?Chip Hautala: We have flexible hours, so some employees have to come in a little bit later during the school year because they're taking their children to school. They come in earlier in the summertime. If you want to take time off, you can take it; it's one way the pandemic helped. It validated our business model of allowing people to work remotely. There's never a time where you have to come into the company. If you want to go into the office, you're welcome to go into the office. If not, you can work from home. You're an adult, so you're responsible for completing everything you need to complete.Lisa Ryan: Right, and I think they are just empowering your employees, letting them know that you trust them. I can't tell you how many horror stories I hear about companies monitoring people's minutes on the phone; they're tracking people's keystrokes on the computer to make sure that they are not ripping you off by working from home. You've seen it, I've seen it. We've all seen it who trust employees. Given the trust to do the work they need to do on their own, without the distractions at home, the chances are good that they will work even harder for you while they're at home.Because you've trusted them with that flexibility, they're also going to stay with your company instead of looking for that next company that's going to give them that flexibility that they're looking for.Chip Hautala: Exactly. One of the best compliments I've ever received, and one of the things that make me smile, is when I've had people tell me, you know, this is the best place I've ever worked. I'm never leaving here. So that means a lot to me.Lisa Ryan: If you were looking at all the things that you do within MotionSource, what are the things that are working best for you?Chip Hautala: Communication. Whenever a customer calls in, I've worked for companies, and we still deal with some suppliers, where when a customer calls in for a quote, it takes a week to get back to them. We have a rule here that will get back to you within 20 minutes with a price. People are waiting on that price so that they can place their order. They may be resellers where they need to get back to their customer on that, so that's one of the rules that we have. You have to get back to somebody within 20 minutes with pricing and availability.Also, we never sell parts. We sell value. There are many times when I empower the employees to do this. It's better to lose the sale unless you have is the perfect solution for it. We work with it, and here's how you want to tweak it to get it to work better, rather than trying to sell them something new. Those people always come back. They know that you have their back. Our job here is to make you as a customer looks like a rock star, whether it's to your customer or whether it's to your boss.Lisa Ryan: Your 20-minute rule has got to lead to a lot more closed business. When people wait a week for a quote, the first person who receives the quote back is the one who wins the business. So the 20-minute rule, I'm sure that that leads to a lot more sales than letting those quotes fall through the cracks too.Chip Hautala: The company I used to work for before I came here was in a similar industry, and it was not unusual for it to be a week, a week and a half, two weeks to get back to a customer with a quote. Nobody wants to wait that long. What if you went to the store and wanted to buy a pair of shoes and they said, you want those shoes? Come back next week, and we'll give you a price on those. Would you ever go back there again?It's the same thing in the industry. It's essential to get back to people. It shows that you care. It shows that you're invested in them, and that's the best way to do business. That's how I would want to be treated, so that's how we treat our customers.Lisa Ryan: It also prevents a lot of those from falling through the cracks. Oh no, I was supposed to get back to this person, and I never did. By that time, they've already chosen another supplier anyway. From a networking standpoint, if you were to think about something that you would like to learn from other manufacturers or distributors, what would that be? By the same token, what are some of the insights that you would be willing to share if somebody reached out to you?Chip Hautala: What I would like to learn from other manufacturers and other businesses in your practices as a closing business? What are your practices as far as pricing, things like that? I want to share that the most important thing is communication. Communication is key. It would help if you remained in contact with your customers, team members, and everyone else. If you have excellent communication, you have a great culture, and you have a great business.Lisa Ryan: You've shared some great ideas with us today. When it comes to MotionSource, who are the type of businesses that you reach out to? What would be good contacts or good connections for you?Chip Hautala: Anybody in the rubber industry. We're very big in the rubber industry. We have a lot of products for the food processing, food servicing, and packaging industry. We have several customers in the packaging industry, the auto industry, in the steel industry. Anybody in those sectors, we can help. We've also added a couple of line items where we're more of a green business. We offer green solutions for everything, where there's no electricity involved. A lot of our pumps are solar pumps. We can provide you with that. As we advance, there are things to do, so we've jumped into that right away.Lisa Ryan: Absolutely, and if somebody did want to connect with you, what's the best way for them to do that?Chip Hautala: I'm on Linkedin. You can find me as Chip Hautala. You can look up MotionSource on LinkedIn. Our website is MotionSource1.com. Everything that we sell there's manual for online. You can give us a call at 888-963-moto or 888-963-6686.Lisa Ryan: Chip, it has been an absolute pleasure having you on the show today. Thanks so much for joining me.Chip Hautala: Thank you, Lisa. Thank you for inviting me to be on.Lisa Ryan: I'm Lisa Ryan, and this is the Manufacturers' Network Podcast. We'll see you next time.