The Manufacturers' Network

Connect with Arno Ham:Linkedin: https://www.linkedin.com/in/arnoham/Website: https://www.sana-commerce.com/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network Podcast. Our guest today is Arno Ham. Arno is the Chief Product Officer of Sana Commerce. Sana helps manufacturers, distributors, and wholesalers succeed by fostering lasting relationships with customers who depend on them and making their SAP or Microsoft Dynamics ERP and eCommerce work as one. He studied computer science and has been a driven eCommerce manager for years for big (retail) accounts such as Heineken, AkzoNobel, and Michelin. In his free time, Arno enjoys maintaining the webshop for the band and music society he plays in. So Arno, welcome to the show.Arno Ham: thank you. Thank you, Lisa, for having me. I'm excited.Lisa Ryan: So, share a little about your background and what led you to do what you're doing.Arno Ham: Everything is with technology. I am a nerd. I started computer science. I started working here at a company that was an agency digital agency. We built many web store websites back then, mainly for these big weak retailers. But at some point, we came across businesses with other needs. B2B companies - and it was already more than 10, 15 years ago.By helping them, we realized how we could help B2B companies, manufacturing companies, or wholesalers to do business online. , you need to do something differently. We can talk more about it later today. But the funny thing is that was the moment when Sana was born because we said, Hey, guess what? You talked in the intro about the long-lasting relationships that our customers want with their customers. In B2B, that's important. If you do, if you're shopping online as a consumer, you may buy something that you wear at the lowest price or where you can get the quickest shipment.But in B2B, if you need to have supplies every day or multiple times a day. It needs to be good, and you have trustworthy partners, et cetera. And to make that happen, to transform that, to put that from, let's say, all those business processes before, let's say, non-digital with or by phone or by fax or by email to make the digital.A lot of complexity is involved, and Sana was born. We were making that complexity easy by making ERP and e-commerce work as one because in that ERP, these systems that these companies are driving on, I would say where all your customers are, your order details, your transactions, your inventory, all that logic around it that makes you unique.You need to open that up to the world to ensure you can automate things. We are key players here in what we also call a digital transformation. We have around 1500 customers worldwide running SAP or Microsoft Dynamics as their ERP. We are helping them create a B2B eCommerce environment with which they can serve their customers.With B2B, it's just the beginning. Not all companies are doing digital commerce yet. They're starting with it. We are right on that wave. That was the shortest version I could give you, Lisa, but we could take it from here.Lisa Ryan: And when you talk about, back in the day, you had more of that personal connection, talking to people on the phone and maybe seeing them in person. Now we're bringing in that whole element of technology and digitalization. How do you continue to work with your customers and keep that personal presence when everything is so technology-based, so you're not just another button on a keyboard?Arno Ham: I love that question. There is a lot of complexity involved in making that relationship, let's say, more or less the same. But to give you a couple of examples or share a couple of customer stories, The important thing is that if you are a B2B buyer, as we call it, somebody needs to purchase something to do their job.So let's say you are a gardener or a contractor and need to work at some house; you require equipment, building materials, etc. You could call or go to a store and get your supplies. And you get that personal touch that you say, Hey, you had this pricing. We have agreements about that. You are a customer that is here every week. So, we have these agreements. But if you go online, you want to have that same experience. You want to give discounts, for example, or trade agreements. And you need to bring that online.And that is that example of the complexity we are solving, but it's so important. It sounds so stupid or simple that you must solve these things, but making that happen in your world is complex. And that's what we are solving. So that's one.It's about real-time pricing, inventory, product information, and selection. So all these things you need to have transparency and with whatever channel your B2B buyer is, reaching you as a company, as a manufacturing company, if it is over the phone or via the web store or another, or in the store itself, you want to have that same price, the same inventory levels, and the same product description.Because otherwise, you get an issue. You gain if the price is different online than in the store, then you harm the relationship, and you say, Hey, what's going on here? If I want to place an online order, the price is different. It's not what we agreed upon, harming the relationship.So that's why we are all targeting that or not a relationship. It should be as convenient as if somebody's talking about it. But you need to translate that whole relationship into a digital world. And we are solving many of these complex things and making them simple.And that's just one aspect of it. But we can also talk about, let's say, all the problems that manufacturing companies are struggling with. Still, I think this is where we see companies succeed in adopting their digital platform in this area, making sure that you supply total custom convenience as we say it. The features are that you can place these complex orders every moment of the day, 24/7 per day, seven days a week and that you have reliability without any compromise, which means it's real-time. The inventory is accurate. So, if you, that's not that you, if you're ordering something and then the salesperson or support person is calling you and saying, no, sorry, you just placed the order. But we have yet to get it in stock. That's, that is a pain, of course. So we are solving that and that you can. If you are also placing an order that the company is directly processing, it's a whole process to bring it online. So we are helping our customers with that. And it's a complex thing. But if you have done that, there are a lot of benefits for you as a manufacturing organization.Lisa Ryan: Timing is such a crucial aspect of it because we expect that immediate gratification when we want to find something and get it online. And often, the person who receives the order is the first to respond to the request for a quote. Yes. The first one they reach is that they can do it quickly, as you said. To see what's in stock to get the correct pricing and place the order versus waiting for a couple of days or even a couple of hours for the sales rep to call him back and then go through the quote process, and it's lengthy all that stuff. Digitization has sped that up and it's an expectation now.Arno Ham: Correct. Especially on the newer generations. They are used to living on their phones, to do everything from there. So if you are not opening that channel for them, you will have a missed opportunity, or you will, in the end, you will miss business, and the competition will take it for sure.Lisa Ryan: We talk about some of the good things that are going on, and then, of course, in manufacturing, there are all kinds of issues. In inventory management and supply chain, we saw a lot of disruption issues because of the pandemic. And then the war in Ukraine. What's your take on this, and what's the role of digital and e-commerce in inventory management?Arno Ham: Yeah, so for inventory management, all the things you just mentioned, it has been a couple of hectic years. And we are still in these in this period where we have a lot of manufacturing companies in our customer base. And when talking to them, they all struggle with the same kind of issues that they say. So we do not know at some point in time if we had something in stock or when we will get it back in, or that we get our inventory levels where we want to have it, or if the price of a product was differentiating all the time because the production cost the raw materials, the pricing for that was changing a lot because of the situation we had in the world.And what is so essential if you have these kinds of changes or need to adapt your business has. So, for example, if something is unavailable in stock because you cannot produce it, or is there something else? There is just a high month; they must ensure how to deal with it.Are you going to prioritize it for a specific customer group? Are you saying, hey, these customers need it more than others, or are you showing the real-time values and informing your customers to give that transparency, saying, Hey, sorry, it is not available, but it will be there in a month or so? So all that information exchange and transparency contribute to keeping these relationships in good shape.Because if you need to do that over the phone, you will be burning in on calls, and so on. But on the other end, if you do not have accurate numbers, you also will, once again, people will start ordering, and they will get issues because you cannot deliver. After all, you have problems with the production lines or something like that. So we have a lot of companies that have struggled with that and with the help of commerce. By giving transparency and intelligence in the platform, you can say, okay, this is not available anymore. Still, we have an alternative product that can help solve your problem.These are all things that we are helping. That's helping a lot of manufacturing through these challenging times. By doing so, they can reduce costs on one hand. They can keep the relationships, on the other hand. Some of them even become much better out of this situation because they took the opportunity to do it correctly.Lisa Ryan: That brings up a good point regarding the relationships because if there is a limited number of items. You have to prioritize which customers get those items, it's probably going to be the customers you like the most and you have the best relationships with versus those that come in and out.So it's a good reminder that people are on both sides of the equation. Keeping those relationships strong gives us a better chance of getting the needed products.Arno Ham: Correct. And that's what we have. We are solving that problem with technology, but it's mainly about the people in their sense, and technology supports that. But its effects on these companies, both the B2B buyer side and the manufacturing companies we support, are amazing. Another pain or another interesting sample, Lisa, is, for example, the complexity manufacturers face in going online.You already mentioned the lengthy quotation processes. That is something we also see; there's a lot of back and forth, generally over the phone or via email. But you can solve it in a digital way or in a platform that you can with the product selection process that you guide the customer what they need with information or with small wizards or product selection mechanisms.We also sometimes call that configured price quote. So that is all something we are doing, and it is, especially with manufacturing in the B2B space; sometimes, it can be highly complex. For example, ordering a new television or a piece of clothing is super easy in terms of complexity. But if you're purchasing a new truck or machine worth a couple hundred thousand dollars, you can imagine that it needs to be more easily transferred to a digital space to come to that selection process. So we have all kinds of partners we work together with to make that magic happen that you can say, okay, nicely configure a machine, or what spare parts do you need, et cetera, to bring that selection process or that lengthy quota process digital and that the B2B buyer can do that in their own time and their convenience and much faster than when to wait to on interaction from sales support. But still, the sales supporter, the people, was an important factor because they can step in when it's necessary when they can add that added value.Lisa Ryan: And you're looking at people that may hesitate to go digital because of the complexity of the product that they have, that a hundred thousand dollars truck or piece of equipment or machine. So, when it comes to the efficiency of it, how do you balance that?What would you suggest when somebody's. At that precipice that they don't know, is this something that I should keep doing the old way, or do I pay a small price for higher, a lot higher efficiency down the line? Where does that decision come into for them to decide?Arno Ham: Yeah. That is one of the most complex struggles or the questions they are asking us a lot or that they are struggling with themselves. Most of the time, we can have investments in B2B e-commerce can be severe to solve the complexity, and so on.So, will you get a return on investment at the end of the light? Looking at the 1500 customers that we have, many of them succeed and can reduce so many costs by chasing a better opportunity by automating or digitizing things.Let me give you an example. We had a European company that was a supplier of cleaning equipment, chemicals, and so on in the B2B space - for hotels, restaurants, etc. You need to keep these things clean, and before, they didn't have any digital channels, so they had salespeople on the road every week, every month, just taking in these orders.On the one hand, that was quite time-consuming because these people were driving around all those hotels checking, okay, how much do we need from this? How much do we need from that? And it needed to be automated or digitized. But, on the other hand, when Corona hit Europe, they could not physically visit these locations anymore, so they needed to do it differently. So what they did was they started with Sana, they digitized everything, and salespeople were not driving in cars anymore to all those hotels every weekday to get the orders.No, they were just online to say, Hey, place these repeatable orders or these orders on a day-to-day basis in the digital platform via the mobile app. And when I'm coming by, I will talk about more strategic topics of explaining new product times, really spending the time of you enhancing that relationship. And guess what? These salespeople now also have more time because they were not. So they could have this meaningful conversation by taking all these repetitive tasks they were not spending time on. They could also explore new markets or businesses because they have more time, and that's how you can expand your business.Lisa Ryan: I've heard that a lot because the pandemic taught us that a salesperson can call on smaller customers. Some accounts could be seen by salespeople who wouldn't jump on a plane and go to some tiny machine shop or something because it wasn't worth their time. But now being able to digitize that, being able to do it online, Not only does that give you access to customers that you may not have ever paid any attention to before, but as you said, now there's more of a strategic opportunity to work with the customers and personalize the attention and build stronger relationships by digitizing.Arno Ham: There is always a way, Lisa. This is about saving costs or chasing an opportunity by getting the boring stuff out of the way so the salesforce can do more valuable work there. But another attractive area is where we see a lot of success with struggling manufacturing companies, saying, Hey, how do we start, or the investment is considerable.There is always a way to start in a specific area. For example, if the machines are still lengthy, complex, and very hard to digitize, you can start with the after-sales or spare parts. That can also be a big part of your business, and you can have the opportunity there to digitize it.We have many manufacturing companies that are just focusing on, in the first years or in the first phases on that area, so that they say, Hey, this whole machine selling that is still, let's say, more or less a human process. All the after-sales and the spare parts that are fully digitized and the same values about the relationship are still there because the nature of our solution is that sense or the importance there is that all that information on what machines you have as a customer. You want to know that information to order the correct spare parts. You're not looking around for hours to ensure you have the right tools because you want to fix your machines quickly.That is what we solve with our solution. This integration we have with systems like SAP or Microsoft Dynamics is because all the logic is most of the time, and the data is already there. We are just bringing that to the surveys and helping the B2B buyers have this convenient place where you can, with a couple of clicks, say, Hey, these are my machines. I know this machine is broken. I need a new wheel. I have to correct one order and have it delivered as soon as possible to fix it.Lisa Ryan: So, when discussing manufacturers wanting to start the process and sell their spare parts online, where would you suggest they start? What are some of the things that they need to look at? Do you have any examples of a situation that began with spare parts that led to that same company's ability to do much more digitization by starting small and getting those results?Arno Ham: Exactly. So have for most of the manufacturing start indeed with spare parts. Another customer is Diversity, a prominent supplier of cleaning equipment, chemicals for hospitals, tools, et cetera, et cetera. It's a huge company; they do a couple of billion a year. Also, in the US and where there, we started with all these consumables, not only spare parts but also the chemicals to use in the machines because they're selling these cleaning machines and so on.That is step one. And later on, it went from region to region. They started first with one a couple of countries in Europe. And they have gone to another store, into another store. And now we are also talking about, hey, now we have all these consumable products for many different regions. What if you also digitize the machines' sales process, for example? We have C P Q tooling that you can do that's a selection process also for more complicated stuff like a machine, and you have all those questions and selections you need to do. And that is the next step to take another example I have, which is interesting for you to share. We had a company called Pinger, a global player in the world that is doing. It's a supplier of lifting equipment. Every truck needs a lift most of the time or a crane. Nine out of ten times, it's from Pinger. It's an Austrian company, but it's a world player there.And we are also starting here with spare parts. So as such a...

Lisa Ryan: Hey, it's Lisa Ryan, and welcome to the Manufacturer's Network podcast. I'm excited to introduce our guest today, John Abplanalp. John is the president and founder of Tight Lines Advisors consultancy, which focuses on optimizing manufacturing performance. So John, welcome to the show,John Abplanalp: Lisa. Thank you very much. I'm delighted to be here.Lisa Ryan: Please share a little about your background and what led you to focus on manufacturing with tight lines.John Abplanalp: I will try to give you the quickest version possible. I was involved with a family business, a precision valve corporation. My father invented the aerosol valve. I'm looking at the patent copy in front of me right now.He received the patent on March 17th, 1949. He is Swiss, but St. Patrick's Day was a celebration for my father that afternoon. He started their business. We ended up with 22 locations worldwide, serving most of the major customers, the SE Johnsons, the Unilevers, the record, Ben Keer, the who's who of, who's in the consumer packaging goods.A lot of the products they had were in aerosol form. He passed away 20 years ago at the end of August 2003. If I drop some numbers, we made about 250 million in sales. We get some family dynamics - a sister and brother-in-law that didn't necessarily buy into what we were doing, where we were going, confidence about myself, et cetera. It's not a complaint about it. Everybody has a right to, so we made the deal of evaluation and allocation assets, et cetera, and got that behind us in 2006 and continued. In 2008 we went from 250 to the end of our fiscal year 2008. We got to 343 million, and I'm proud of myself and the team for what we were able to do. That was the fiscal year of May 31st, 2008. You may remember a little turbulence in 2008, 2009. We went from 343 million in sales leverage from 343 to 290 million. It nearly killed us. From that, we brought the guys in to do the restructuring. We brought partners in the private equity world, and through you, watch it. I understand it. It's receivables. It's payables. It's inventories. It's what are we going to cut? What are we going to cut? What are we going to cut? As we went through it, we were two or three years into this process and had an opportunity to visit our South Carolina plant.Customer service was an issue, so we raised inventories, and cash was the issue. So we're driving inventories down again. The organization was just getting pulled back and forth again. I fully realized I was tapped into the ship at the time that created the change. But I had the opportunity to go down to our plant in South Carolina. It was a great group of people and still is. What we decided to do was focus on productivity. We started looking at the obstacles of productivity, material losses, health, and safety issues, downtime, and quality issues. We did it in various part series. We did it in a parade and went after the biggest issues first.We found that we made some mold changes without putting capital or throwing real capital investment into it. We did some, while leadership at the time was talking about we didn't have enough capacity. We had to spend $440,000 for a mold in a machine that was $20,000. We were getting the changes in a mold that we made. A mold that was 30 or 40 years old, and my father was getting about 50% output out of it.It took us eight hours to set up. Within 30 seconds, the mold was running at a hundred percent capacity. It was a phenomenal turnaround. We said that if we continued the path we were going, and what we could do, get all these changes, and the next ones on our list would reduce the cost of goods by 10 to 12% in one year alone with a lot more work to do.That would allow us to get more output in fewer hours. So you'd reduce your amount of labor hours. The other part was that productivity was greater, your lead time was reduced, and your on-time delivery was more consistent.Also, we were going after qualitative problems, and as a manufacturer, if something happens internally, it will eventually get. But we were able to reduce the number of qualitative issues that we had internally, and therefore the external failure rate dropped. So, our competitive position was enhanced along with greater profitability. At the time, if we were going back in and looking to sell, which I understand was part of the deal when we brought in our rescuers in the private equity world.But now we had a real chance to show to whoever was coming on. So here's your path out. Here's how you can drive profitability. If the gross margin improves, gross margin improvement, especially when you get a competitive position, is the greatest thing you can do to drive value in a company that drops right to the EBITA.You show it's consistent, the multiple improvements, the valuation takes off exponentially. So we continued down that path. The company eventually ended. Being sold, whether the ideas were adopted or not. I honestly don't know. Part of the reason we couldn't share those in the selling process.It was reflective, look, reflective on current management, but that's someone else's issue. But we sat there and said, Hey, this is viable. This is a hundred percent viable, and it's a real passion because the coolest part of the whole thing was not necessarily the dollar. But we had them when you watch people on the floor that were finally a part of this. We had the machine maintenance guys.We had the machine, the operators. We had the assembly mechanics. We had the assembly operators all have a partner say in it. Because they're the ones working around the problems and the issues daily. We gave them our support. You had guys high-fiving each other on the floor.When you started seeing the turnaround, there was one woman that was in charge of an assembly machine, and this one machine, we had to run Three shifts, seven days a week, and import goods from one of our sister companies to meet our demand in the two months. So by the time we were done, it was down to running two shifts a day, four days a week, and she wouldn't let anyone else near her machine.And it started when we first started doing that work. She came in with a bag of rejects, put it on the table before me, and said, we need a new machine. I said trust us. Let's go down this process for two months; I'll be completely behind you if we do. By the time she was done, there was no way you were getting rid of her machine.And to watch that turnaround, and to see the involvement, and the enthusiasm of the people, and don't get me wrong, everybody wants to make a. But, to watch what these people achieved with the appropriate guidance, I still need to come up with the solutions. They weren't my ideas.These were solutions running around our floors and machines for 30 years. So was, it is fantastic to do it, and that's the genesis of tight lines. The best way I could tell you is driving this profitability and value for a company with an organization that's upside down to the traditional triangle.My job is to support everybody else down there so they can be most effective as they can, and the last thing, and I swear I'll shut up and let you ask a question with it, but the last part of that is part of, the, one of the tenants of what the tight lines advisor says. So as we go through this process, we get that gain in the competitive position, the revenue line, and, most specifically, the cost of goods, which drives valuation.You take that gain in the cost of goods every year that the organization has been supportive of. Then, put it on the new valuation, a company, and give that value back to the employees appropriate on the appropriate percentages in either real or synthetic equity. Because yes, they will be working fewer hours, but you give them back because you can only achieve this with their input.So that's that, that's where the dynamic is. So now you've got partners with you that are all focused on the same aspect of what you're doing, getting the obstacles of productivity out of the way.Lisa Ryan: So that's such an important lesson right off the bat when owners and leaders of companies consider their hourly employees Because they know their job better than you know their job.And when they feel that they are a part of the greater mission, that they're able to make a difference, they are willing to give you so much more, and as you said, you also realize that there's an expectation of a return. So if employees are helping you to be more profitable, of course, they share in the profits, but when things don't turn, you know when things aren't going well.At least the employees know. So there's that level of transparency and accountability. You built in that feeling of ownership with your people, who were the lowest in the organization and the most important.John Abplanalp: How well did that come home to us during the pandemic? In the manufacturing op, it was guys. They came there every day when everyone else could afford to work from home in manufacturing. We saw it with the police officers, the supermarket guys, and the rest. They were the ones, they were the, right there facing the operations.This was this idea, and these concepts were formed before that. But okay. Someone said okay, I wouldn't have a hundred percent of the value. Yep. You won't get anywhere near the value, increase, or continual increase if you don't have their ideas. As you said, they're closest to what's going on.They're the ones that are dealing with the decisions the guys in the corner make on equipment. They have. Our brilliant ideas, and I'm not disparaging the guys in the corner office, don't get me wrong about that. But there are so many different things that are going on plants, and it's, a lot of it is legacy stuff that, that they were given either poor design, et cetera, that we made them run.Lisa Ryan: And it, when it looks like it, you had your first downturn, of course, in 2008, and now we're facing some different challenges when it comes to the economic headwinds that currently exist. So what are you seeing regarding some of the biggest roadblocks to productivity and growth that manufacturers face today? And how would you recommend they overcome them?John Abplanalp: My biggest issue is the pervasiveness of the success of the private equity world. That is not so much, and I don't want to paint them all with that same brush. You're familiar. You see how private equity works. They come back in cost, ripped out, et cetera.Decisions are made in a corner office, the same thing we're discussing on the floor. So you've got companies like Nusteel or Danaher even, productivity-based, et cetera., and they perform well. But my, my, my biggest headwind is not even so much it's an operation.It's the operating philosophy. There's a line. If I can say it this way, go back to you. You probably needed to be older to remember a gentleman named William E. Simon. Bill Simon was a treasury secretary under Gerald Ford and the energy secretary under Richard Nixon. But as treasury Secretary, ironically, he also made his fortune as the LBO of a company called Gibson Greeting Cards, which was the progenitor of the whole private equity world.But his view, and his quote, which I think is phenomenal, and I wish I had under, I had known it while I was still operating before, before tight lines in his as a country, he was speaking of the United States, the productivity, and the growth of productivity should be the first to economic considerations at all times.It is through those two things innovation, jobs, and wealth. If you can bear with me as I describe it this way, I'm using my two fingers. But if you can get more and more consistent output for fewer units of input. That's your gross margin line. So in between those two, that spread gets better.That's what drops to the bottom line. That's where the company's value has been created over the last 20 years. But unfortunately, it's one of the things I only have my subscription to the Wall Street Journal for this quarterly productivity report.Covid Aside, you can see over the last 17 or 18 years that while productivity is improving, the rate of productivity improvement is in decline. And to me, that is because what has happened was everybody started chasing As they got more competitive, they started losing productivity. China opened up, and Mexico opened up.Everybody was chasing cheap labor and not going after the productivity side of it. I'll say this. It could sound sarcastic or sincere, but when the previous glorious leader was down in Washington, the one that was just recently in New York yesterday. He put the tariffs in to support manufacturing in the United States.I'm not a big tariff guy. I am a, yes. I understand it would help the US manufacturers think it's artificial at some point. Cause you know it, it puts the barrier on the incident, which allows people not in the productivity to razor priThek the biggest hit in the face was when we had the supply chain issues, and we started realizing our dependence on.There's no cost to import from Mexico, China, or these other locations. There's the manufacturing there. There's a freight. Some logistics have to be baked into it. But I think in the US manufacturers, as they come back in, and onshore if they're coming from a lower labor rate area to a higher labor rate area, where we are right now, a lot of guys are resistant to doing that because it's going to reflect poorly on their financials.The only way out is through productivity. If I might add, the other aspect is that I guess the most significant headwind is changing our thinking even more than economic aspects Going on. The other thing that was going on, that was after World War II, had three advantages. One was we had a growing population.We had a population that was getting older, so you know, what we were buying was, increasing. We had more people coming in, but we also dramatically improved our productivity rates. So we are getting older, but it's almost running at a decline right now. Population wise. We're certainly not adding to the population.The only way we're out of we can get out of this thing now is productivity. One last part is to think of the huge amount of debt that the US has right now because of what was necessary in most cases in CO through Covid, and all the rest of us through Covid, and all the rest, not the covid. So the only way we get out of this is to become a net exporter.Nobody will buy from us just because we're the United States. We have to compete on price service. You know, the innovation side of the only way we can do that. Remember, we started before you went after productivity, lead times reduced on-time deliveries, and more competitive external quality. Is there a reduction or improvement in your gross margin line?Therefore, you can reduce your pricing. We have to. The only way we can do that is to be competitive in what we're doing. We can only do that through productivity, innovation, and the innovation that'll give us.Lisa Ryan: When you look at some of these things, you're talking about tariffs, and China, and supply chain, and the national debt, and some of those, sometimes it just feels so overwhelming as we think as an individual manufacturer or organization that's not something that we have any control.So when you're looking at the things that you know manufacturers themselves can control, that over time will benefit that big picture. But what does it take for an organization to do in its culture to generate that productivity at all levels of the organization?John Abplanalp: First, you have to go in e even before collecting the data. As we discussed before, the people in New York have to go in with an intrinsic belief in the human spirit. You have to figure out there are some dirtbags out in this world. We all know, but you have to believe that most people coming in to try to provide an income for themselves and their family is there for the right reasons.And they want to be part of something even bigger than themselves, that they feel good about it. So if you've got that, then we use the system called the DMA system. I'm not, the guy Nick Demus now passed away in South Carolina, but it was a great way to keep track of it.I recommend it for anyone to keep track of all the negatives. I like looking at the negatives because the positives to me, what your output was only the positive output result in any daily production or what was there was only because of the absence of the negatives if I can. So the more you can measure these negatives, and go after it, and organize your people, and in such a way to go after the biggest issues first.And it was non-financial. It was the number of pieces lost, in that series, the number of pounds, lost amount, it all translated to. By the way, we're patenting this tight line system the way it all rolls back into it. You can come back and take how it affects the financials, but that's what I would do.Believe in your people. Start organizing a data collection so you can go back in and start looking at what the negatives are, again, health, and safety issues, material losses, downtime, and qualitative issues, and then start organizing your key or best employees that you think could help out to begin with, and start working on the buy-in.Lisa Ryan: It comes down to company culture and what you do to connect those employees with the mission. One of the techniques you stress as crucial for creating sustainable value is your inside-out approach. So talk about that. How does it work, and what are some of the benefits that result from it?John Abplanalp: We've talked a lot about that and what we're doing. It's the guys on the floor. It's getting the data from the inner side of it, being able to put it we have yet to use. Terms like lean or six, whatever the appropriate methodologies are, you want to go back in and organize the people so they can do it.But you know what we're doing is collecting the internal and external data that is there, bringing that back into the organization, letting them have it, and having it reflect both internally, financially, and externally on the., and your competitive position. One of the things you mentioned sustainable growth.Sustainability is different. We hear a lot about the pros and cons of ESG - environmental, social, and governance. But you've listened to what we're talking about now. Are you in an environment where we can get more and more consistent output for fewer units of input material?That works for the ESG. The social aspect is now we're bringing our employees in. Not only by the way, not only are we compensating them on this side of it, but the other thing that we're doing is

Bryan DeBois, Director of Industrial AI at RoviSys, discusses AI's impact on manufacturing, challenges, and opportunities. He highlights the integration of data pipelines and historical data into AI processes, emphasizing cybersecurity in manufacturing. The podcast also shares a success story of a digital transformation project in the manufacturing sector and the importance of expert guidance and stakeholder involvement in AI implementation.

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network Podcast. I'm excited to introduce our guest today, Vinny Maurici. Vinny heads up the data engineering practice at ObjectEdge, a digital consultancy based in the Bay Area of California. He brings over 15 years of experience launching data programs for Enterprise and Fortune 500 B2B manufacturers and distributors. Vinny, welcome to the show.Vinny Maurici: Thanks for having me.Lisa Ryan: Share your background and what led you to do what you do at ObjectEdge.Vinny Maurici: As you just mentioned, I've been in the data world for about 15 years, and for me specifically, my brain has always worked in a way where I've seen data as more than just a means to an end. I like to build tangibility around how data can affect businesses. It's fallen into more of the consulting world, and it's been an excellent opportunity to work with our customers over the years to say, Hey, let's take this thing called fluffy data. You go to conferences all the time, and they say data are the new oil, and you need to turn data into an asset for an organization, and nobody knows what that means.It's such a big, wide-open topic, and for my team, we pride ourselves in saying, Hey, let's turn the intangible into a tangible. Let's create steps, order of operation, and actual outcomes and benefits for why data is essential to an organization. And it's been such a great time trying to build all these models for our customers.Lisa Ryan: With data just expanding at the rate it is. Before the show, we were talking about how AI is transforming everything, and data can be used for good and can also be used for evil, and it goes the whole spectrum in ways that we would've never thought about before.So specifically, though, when it comes to manufacturers, what are some of the data challenges that manufacturers are facing today?Vinny Maurici: There are some very unique challenges that manufacturers are seeing. If I take a step back, for example, and I look at even the distribution side of things like B2B distribution, they're all pushing to be more digital. MSC Industrial, for example, is a major MRO distributor that just came out last year in fiscal 2022 saying, Hey, We now do 2.28 billion in digital revenue alone, and they're growing at 17% year over year. So that's at a distribution level. So, what does that mean for manufacturers? It means that all their customers, whether a distributor or a retailer, are pushing to increase the channel presence. This means that the amount of data that these manufacturers, many of them are mom-and-pop, is more significant. They now need to support all these digital transformations that their distribution network their customer network is going through.It can be difficult because I have to manage more than I used to. And so I, as a manufacturer with a lot of unstructured data or data that I'm just used to, have supply chain information. So I want to send my products efficiently, not necessarily for people to use a digital network to make a purchasing decision.So how do I do that without hiring an army of employees or utilizing my current employees without burning them out? Because there's so much more now than there was. That's a difficult thing to solve as it creates a foundation of a problem even though they know that there is revenue and their success on the other side of the equation because all of their customers and digital partners are distribution partners and are doing great in that.Lisa Ryan: Can you give some examples of what you're talking about when talking about digital data and monetizing it? I'm wrapping my head around what that looks like, especially in a mom-and-pop shop or somebody that didn't necessarily have the technology, but they have all of this data. Yeah, just putting it in simple terms, what does that mean?Vinny Maurici: Yeah, that's a great question. So the way that it has been working for decades is that I, as a manufacturer, I'm going to go and I'm going to make something, some widget, and that thing will go through a lot of engineering and requirements and drawings that I'm going to have to build that thing. And then I'm going to go and sell it. And I usually sell it to distributors or wholesalers or whoever will take my product. In the old days, I would need an E R P, and the E R P would manage a couple of important facts about my product. For example, how much does it weigh? How many go into a box, how many boxes go onto a pallet, and what's the weight of everything so I can send it across?It's only a couple of pieces of information, and then your distributor goes out and sells it to their customers. And if it's B2B, they're picking up the phone, talking with their sales rep, and then placing an order. Now everything has changed. If I go back to an example of a distributor, these are complex parts.They're trying to make it so that their customers are no longer picking up the phone. They want to make it so that a buyer, an inventory manager, is going onto their site and finding the exact products they want, which leads to, Hey, I've got forty attributes across a job or drill bit, which might be a very simplistic product or an indexable cutting tool or welding equipment that I would typically have not needed to provide as a manufacturer, that type of information to my customers.So now they must go back to their engineering documents. They have to go back to see how they're utilizing that information and figuring out how to structure it. That's not a simple task, especially when much of this lives in PDFs or unstructured databases. So that is a significant hurdle for these organizations pulling out their hair, saying, I want to support my distributors. Still, I need the wherewithal. I need to have the data organized. I don't have it in a place that's easy to. We call it syndicate, syndicate downstream to my network of customers.Lisa Ryan: When looking at some of these, what are some of the other unique challenges you will encounter when you have this direct-to-consumer manufacturer?Vinny Maurici: Direct-to-consumer is a fascinating topic because, for a while, direct-to-consumer was this significant initiative or forefront for a lot of organizations because when we look at the advancements of cookies and adaptability of searching and a customer going out and asking for what they want, you could then grab that search result or grab those cookies and quickly serve them ads. I, as a manufacturer, don't need to rely on Amazon, or I don't need to rely on distributors.I can go and serve products directly to consumers and then not have to pay that in between the margin hit of getting it to a wholesaler and distributor. The problem is, last year, what did Apple do? Apple created this opt-in era where they said, " Hey, on default, we're going to turn off cookies, and you have to opt-in as a customer to serve those types of ads.All of a sudden, and there are many case studies about this, direct-to-consumer manufacturers started nose-diving in terms of their revenue because they couldn't find their customers very well. The whole point of this process was it was a very cheap way of customer acquisition. So now they have to differentiate themselves through good product data better.They can't rely on something like cookies through the customer data they now own. But, hey, somebody just searched for TVs. So I will serve them as a TV manufacturer, some options because that whole model has been cut off. And now, I need to build out those data profiles by myself because I now need to trust that consumers will do research.I need to bring my organic searches up through Google or Bing. And I have to create the best possible experience model so that people trust my site and make that purchasing decision. It has completely turned the way that folks are purchasing things on its head because they served up particular advertisements may be a thing of the past unless there's something new that some advertising agencies are trying to figure out.Lisa Ryan: That's so interesting because, for so many years, you get used to accepting cookies and everything. Yeah. And as a consumer, I would look at one ad on Macy's, and then for the next three months. I would just be getting this. And I never realized how that happened. It went to the extreme, and now it's being pulled back to protect the consumer from targeted advertising. So it's better for the consumer because we're not slapped upside down with 40,000 ads daily. But as you said, it makes it harder Yeah. For the manufacturers, because they don't own, you always want to own your list.Vinny Maurici: Exactly. People who didn't own those cookies and didn't have access to that information anymore. And it has made a struggle for an organization that built up an employee base, revenue model, and supply driven off a specific customer acquisition dollar.That customer acquisition dollar has been taken out of the equation, and they have to build a new equation now to figure it out. It's caused a lot of stress and anxiety with employees, with enterprises where we discuss things like the interest rates going up. These companies no longer have infinite cash, as they have free money from the banks.So this anxiety has this direct to the consumer group. I call it an industry, even though it's filled with sub-industries trying to figure out their way. All because, in essence, Apple started the trend of Google's now talking about doing something similar, and you say it's for the sake of privacy. There are arguments on both sides of the equation. Now you almost have to funnel to significant distributors like Amazon, Wayfair, or Walmart, who have substantial inroads into being able to advertise cause they have the money to do that. These smaller organizations need more money to do it.Lisa Ryan: This is new information for me. That was just the way that I saw it. Yeah. As far as all the trouble that Facebook got into for the privatization of data. That's the thing. Something good, we'll always find a way to use it for evil.Vinny Maurici: Exactly. Unfortunately, that's always the case. I know.Lisa Ryan: And it will be. Or else we'd never go to the movies because that's all the movies are about. So, when looking at good data and sound data practices, how would you define these when discussing an engineering lead for manufacturers?Vinny Maurici: That's an excellent question because this is, in essence, the first aspect of recognizing and realizing there's a problem. When we talk about good data practices, the first thing I preach is, do you, as a manufacturer, have a center of excellence focused on data? I might have multiple business groups. For example, I might have various regions cause I'm a global company. And a lot of the time, what you find is everything is siloed. Oh, Europe works differently than the United States. That works differently than the Asia-Pacific region, which works differently than the Latin America region. in one regard, that might be fine.Regulatory requirements will be different in various areas, but in the grand scheme of things, on how I manage data, I talked before about manufacturers. They have a lot of engineering documentation and tend to be in prints and in unstructured things, not in a way that's easily digestible or analytical to create business intelligence around.The first step is to say, Hey, how do I have good data practices? I've built a center of excellence that goes above everything. It goes above the business unit. It goes above regionality and it. I want to ensure data is supported consistently and accurately as an organization.I look at it like a library sciences methodology, right? If you look at the Dewey Decimal system, I know nobody uses the Dewey Decimal system anymore because we have computers in the library, but that is the fundamental of one of the very first taxonomies created or attributes created around how to find a book.The same thing should be your mindset: how do I discover and find a product or widget I am building within my organization? How do I define my customers, and how do I determine my customers in a very efficient, concise, and consistent way? Globally. So that creates a way to build data stewardship that is first in your mind before you do anything else.Remember, data should not be viewed as a means to an end. Oh, I have a new customer. I have to fill out pieces of information. I have to ship a product, fill out this information, and ship it. That's just a means to an end. I want to say, This customer is essential. They consistently buy X, Y, Z. Therefore, I can now upsell these other parts because they're related to these, and all of a sudden, I have all of this information at my fingertips to build a revenue pipeline and build out my customers in a much better and more meaningful way.And we want to create win-win situations. It's not. Like, how can I make more money? It's how I can make my customers do a great thing for their end consumers and increase the data sets or SKUs that they will be selling to their customers.Lisa Ryan: So how would for a large organization that's been focused on data for decades? Yeah, it's easier because they have a whole department. But if a smaller manufacturer, a mom-and-pop shop, who doesn't necessarily have the manpower and the knowledge to think about all the different things you just brought up. How do they even get started?Vinny Maurici: Interestingly, you asked that because for a smaller or mid-sized organization, I always have this feeling that is building out good data practices, and I'll get to the way to get started in a second. They're more important than large enterprises. Large enterprise has enough money to live through the pain. They might be sending spreadsheets everywhere, massaging data, and trying to figure out business intelligence in every way to serve their customers better.But they can do that because they're so large. So as a smaller, mid-size organization, the focus needs to be on, let's take a deep breath. We know this is essential to how we must go forward and serve our customers. And as I said before, we also can't just burn out our employees, and I don't have the money to hire many folks.So how do I get our house in order? And so that's my first suggestion to any customer I'm working with asking me what the first step is. Let's get your house in order. Let's worry about analytics and trends and all these other areas. Second, let's first decide, hey, how do you build and structure your data today?Because, more often than not, we'll hear an answer. Joe Schmo has this spreadsheet that they maintain, and there's this other spreadsheet, and we send emails back and forth, and the first step is just recognizing and writing down how data flows through your organization in a current state.And then all of a sudden, eyes get wide because people don't realize how deep they are into it until you map out your data flow through an organization and then, You say, Hey, there's a lot of low-hanging fruit here. So, for example, if I were to build out an enterprise categorization structure or if I were to integrate attributes that are being held into a spreadsheet into a better purpose-built database or workflow engine, I'm going to save my team tons of time.And then it's a win-win because the company will have all this better data to make more money. And then the employees who are in product management or who are in digital merchandising or who are in engineering or regulatory, they now have a much easier way of managing all this data as opposed to pulling out their head because they've probably been struggling with it just as long as anybody else.Those are probably those who have been asking for change for a while. And now you get the enterprise to recognize how important this is.Lisa Ryan: So you had mentioned employee burnout. On this show, we talk a lot about company culture. So how do you get your employees to buy into this and realize that all the little data points and all of the quote-unquote paperwork that they're doing that they're being forced to do now to collect this data at the beginning is going to pay off for them? What are the words to use or the things to put in place, or so we have a little bit of pain here to have much less pain in the future if we do this correctly?Vinny Maurici: That's so important because change management is a part of anything we do for our customers. You can't just go in and say, Hey, you're doing this poorly, and I'm just going to plop down a new process, technology, and things that will change everybody's working life.Because people are still people at the end of the day, right? They might be going through a cruddy process, but they might do it for 15 or 20 years. You don't know that. And so, any change they might view as a negative. And the critical aspect here is to ensure the business user is a part of the process from start to finish.Suppose we will change technology or process to enable data to be an asset within an organization. In that case, the people managing that data must be at the forefront. So we cannot just say, Hey, C-Suite is mandating this exercise or C-suite is man mandating this initiative without having the folks who are going to be a part of that initiative or who are going to be the end consumers of managing and making sure that data is in there clean and consistent and accurate.They need to be a part of this process from day one. They need to be giving their input into, in terms of what they do day to day and have knowledge into this is what we're going to do, and this is why we're going to do it, and this is why it's going to make your lives so much better. It's not going to be painless because change is always going to change.You can go from a green screen to some UI-based system that will bring people to tighten up and say. I don't want this type of change. But if you flow with them through the process and allow them to be a part of any of these data initiatives. It becomes a lot easier, and it starts connecting and clicking, and then people start buying in.And that's the key. It doesn't matter how much money you spend on technology; it doesn't matter how good a consulting firm is. We're the best consulting firm there is out there for data. If you don't get adoption by the people who will be doing it, it's all destined for failure.People are important, and those working on data are essential to any data initiative and program.Lisa Ryan: Just from the standpoint of showing your employees how valuable they are to the organization, and as you have your tenured employees that are, that have that whole history of the company and why you did everything, and then they start to feel that maybe they're going to be replaced by technology or by automation and just capturing what we're losing in the data that they naturally have in their mind to put into that process so that they feel they're valued and they also feel that they're contributing to a greater mission in the organization than maybe they felt before. Having that as part of the conversation

Connect with Brandon Bartneck:LinkedIn: https://www.linkedin.com/in/brandonbartneck/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network podcast. I'm excited to introduce you to our guest today, Brandon Bartneck. Brandon is Vice President and General Manager at Edison Manufacturing, and Engineering, a low-volume contract manufacturing partner focused on capital-light assembly of complex mobility and energy products.Brandon also hosts the Future of Mobility and Capital Light Assembly Podcast. So Brandon, welcome to the show.Brandon Bartneck: Thanks, Lisa. Great to be here.Lisa Ryan: So, share a little about your background and what led you to do what you're doing at Edison Manufacturing.Brandon Bartneck: Sure. I'm a mechanical engineer by background. I started my career at Boeing in process engineering and production engineering. Then, I entered the engineering services space and transitioned into business development and marketing for a large German engineering services company called FEV. FEV works to help companies create next-generation products that are helping to transform the mobility industry with improved internal combustion engines, drive trains, electric vehicles, hydrogen fuel cells, autonomous vehicles, and all those types of things.I then transitioned to Edison, where I was leading this organization last year. We'll talk about what we do and why we do it in this capital-light manufacturing manner—through my work at FEV, working with the companies trying to transform this dynamic mobility ecosystem. I saw that low-volume production was a challenge for a wide range of companies, from startups to some of the biggest companies in the world.And that transition from developing new technology and creating prototypes and proof of concepts to scaling that into production in a commercially viable manner is a filter that takes a lot of companies out. However, it is also a key enabler in making that technology and enabling it to make the impact intended by the companies producing it.So I saw this company, Edison, which culture fit very nicely with what I wanted to do. The service we're providing fits well with the things that are important to me., and that's how I got where I am.Lisa Ryan:  What are the complex mobility and energy products you guys are doing?Brandon Bartneck: It's a wide range. Much of the work is in the new technology transforming the transportation ecosystem. It supports companies that are developing electric vehicles is a lot of it, so building battery packs and things that go along with battery packs or electric drives.Also, the integration of electrified propulsion systems into vehicles. We're working in hydrogen fuel cells for mobility, energy storage, and the challenges of introducing these lower-emission vehicles Into the marketplace. But, again, we see infrastructure is a huge question, and the ability to supply the energy that can be used to charge these new vehicles where and when you need them.We're supporting the building of microgrids, battery storage, and hydrogen fuel high-voltage storage areas. But, then, the third main area we're supporting currently in this new technology space is autonomous vehicles. So the shift as automated driving is taking off, there's a need to transform conventional vehicles with new sensors, computing power, and communication pathways on the vehicle. So we're supporting our customers to build those vehicles so that they can deploy them in the marketplace.Lisa Ryan: So, how common are they? You see them delivering pizzas and stuff, but other than that, where are we in that process of having self-driving vehicles?Brandon Bartneck: It's still early. There are a few different flavors. So the last-mile delivery you're alluding to here is taking off in certain areas. You're also seeing robo taxis growing in popularity in particular geographic regions like the southern US and Arizona, where it's more accessible and not as challenging of weather, but it's small pilot programs.The areas we primarily support are more in the commercial logistics space and middle mile long haul delivery. A few vehicles are on the road right now, a few dozen. That's part of the reason it's small-scale right now. Everyone thinks it's going to scale up.The volumes and timeframe are uncertain. It's unclear whether this is 6, 12, or 18 months. Probably not, but it's a few years or the end of the decade before autonomous vehicles roll out at scale. So that's why these companies that are trying to deploy this technology, the approach that we take capital light assembly approach is important because it allows them to build the product that they need to without deploying a ton of capital upfront, and giving them, digging themselves in such a financial hole that they depend on a very clear volume, and the timeline for getting these products on the road, which there isn't that level of certainty in the market right now.Lisa Ryan: So what exactly is capital light assembly, and what are some of its benefits of it?Brandon Bartneck:  Thinking about the alternative, some of the guests that you've talked to in the past, like the traditional manufacturing, is often what we call a capital-heavy approach, where if you picture in your mind a manufacturing plant, you're probably picturing a whole lot of heavy automation robotics.That approach is excellent for a lot of things. For most items that are manufactured, you're able to move quickly and lower labor costs. You're able to have very fine-tuned quality control through the automation here. So it's excellent for building hundreds of thousands, 50,000, maybe a million of something yearly.We serve on the other side of the equation. We look at these products in the autonomous vehicle space, that you're talking dozens, hundreds, low, thousands of something per year. You're talking about a high degree of uncertainty often, whether that's uncertainty in the design changing in the marketplace, as I spoke of in the autonomous vehicle space or otherwise in these areas where you need to move quickly and with agility.The capital-light approach refers to a philosophy around manufacturing that minimizes upfront capital expenditure. Not that we're afraid of spending money there and investing in fixtures and automation as it makes sense, but wherever possible, we try to lean towards manually driven processes that are then tightly controlled and intentional, strategic deployment of technology, and what the result there is. It could be more efficient to produce on a unit basis. Still, we're allowing our customers to get into manufacturing with a much lower initial hurdle and much lower initial capital expenditure, allowing them to scale over time.Once you start building, if you build a few hundred or something, you can learn more about what that product will be, what the market will be, and when it will take off. So that allows this milestone-based decision-making so they can deploy capital in a less risky manner and with more clarity.That's the objective or the need for the support., and ultimately what goes into doing that well is the ability to design and execute a manually driven process that is very tightly controlled.Lisa Ryan: Now, in the beginning, when you were of sharing your background, you mentioned that this was an area that was a passion for you. What lights you up about what you're doing?Brandon Bartneck: Yeah. Ultimately, the Future Mobility Podcast I run is built around exploring safe, sustainable, effective, and accessible transportation. That's something that means a lot to me. It's the question of how we move people and goods sustainably on many levels. I'm talking from an environmental perspective, but also that we can build meaningful businesses around this and serve our people, and ultimately the goal isn't to. Introduce new and exciting technology that suits the needs of our community sustainably, and it's safe, and we're not injuring and killing people on the roads.Pursuing to make the transportation ecosystem more effective personally means a lot to me. So I'll pair that with this end goal of what we're doing is very important. The how and why is even more critical in finding a workplace where I enjoy going and my employees want to come. I'm serving customers meaningfully, and we're providing value and serving our community.It's those two things, the friendly tug of war of the product and what we're doing is a significant, safe, sustainable transportation ecosystem—but also doing it in an additive and fulfilling way for myself and our team. So those are the things that excite me.Lisa Ryan: That's an essential part of the conversation for people listening to the podcast to pay attention to your organization's mission and be willing to make changes and fail if things don't work right. Because it's an exciting time, there's such a commitment to being part of something that, like you just said, you are still determining if it will be a couple of years or decades before we fully integrate with the new technology.But it's always interesting to hear, you know what, what lights people up? People should pay attention to that because they want to be part of something bigger than they are, and transportation certainly is. So what are some situations where there are the greatest needs for this capital-light approach to production?Brandon Bartneck: There are two main areas. One is startups introducing a whole host of technology startups trying to introduce new technology. As I mentioned, The ability to build these things is commercially viable. So it is critical if they're going to make the impact they're trying to make.For the most part, our technology companies, not manufacturing companies, provide a ton of value coming in. Working with these companies to establish the manufacturing strategy and then ultimately execute that strategy as they scale intelligently so that they're deploying this limited capital whether it's venture cap, venture or venture-backed capital or otherwise in an intelligent matter. The other piece is something I didn't expect about a year ago, but established companies, and we're working with some of the biggest companies in the world, global automotive, OEM, and industrial companies. This shift into the following form of mobility and transportation will be critical for these companies to have strategic and financial success a decade from now.For the most part, they could be more financially attractive right now. There is a small market for some EV types or electric vehicles. It's growing in some markets, but a lot of the markets are just, we're talking hundreds of if you're looking at like work trucks or like industrial vehicles, forklifts, or even some of these infrastructure products.They're very low-scale right now, not the scale that these companies are typically built to execute on. An automotive OEM is used to making millions of vehicles per year, not hundreds or thousands. So we found that we are an enabler for these companies to go in, in a commercially viable way, and through these markets, try to grab market share while there's an opportunity and position themselves for.Down the line without requiring that considerable capital expenditure. The flip side of that is they have other products. They have the cash cows that they need to continue to build. We're finding that as the volumes for that decline. They have highly automated production for certain products cause they're making a ton of them.As those volumes decline, this capital-light, manually driven process becomes attractive on the backend and the life cycle maintenance for those products. ,Lisa Ryan: But it would be easier to tweak these products if you only have a hundred versus 10,000 vehicles. You need to change the technology or one of the pieces or parts there to make it more effective. That would be more flexible as far as that goes too. Is that what they're finding? What does it take to execute successfully in this space?Brandon Bartneck: So one of the big challenges is building quality into an approach like this? We've fortunately had experience in this space. Still, you have to be much more intentional about the design of the process and how you train and employ or deploy your people, which are the main resources to build these, so you're not replying, you're not relying on a very repeatable robotic arm to, to make many of these things. We're counting on humans to build this with, that is, training and buying into the system with clear instructions and manufacturing approaches. These approaches have quality built into those processes. One of the critical pieces is the ability to look at this design and intentional manufacturing process with process interlocks and things that don't allow manual errors to continue to grow throughout the process.Lisa Ryan: For the people you're hiring, do they have to come in with a specific skill set regarding an engineering background, or do you sometimes look for a good cultural fit and then teach them the skills they need?Brandon Bartneck: It's both. The cultural fit is critical across the board. That will continue as we execute the early builds for a program. It's a lot of engineering-minded individuals and experienced individuals who are leading that. But the magic is in the ability to transform that expertise into a process that can be executed by a skilled technician, someone familiar with executing builds in a repeatable way but might not be the expert on the product. The key enablers for us to execute in the space are the ability to put together work instructions and a manufacturing execution system that enables people who are less technically savvy on the technology itself to execute these builds in a repeatable way.Lisa Ryan: Company culture is one thing that we talk a lot about on this show because I believe, and the numbers show it, that when you get the culture right, as long as you're paying a marketable wage, money is not the be all, end all that people a ascribe it to be. It's just something that you have to do to get the culture right.You have done a great job over there at Edison regarding your culture and focus on living out your company's core values. So talk to us about that. What are your values? How did you develop them, and how does that focus turn out as far as your employees?Brandon Bartneck: This goes even a layer beyond Edison. So we're not a standalone company. We have a sister company, PJ Walbank Springs, a transmission component supplier that's been around for 40 years and is part of a holding company. One of the things that drew me to Edison, in addition to what I mentioned before, was that there is a clear vision for this organization.That starts with, we want to impact society in a certain way positively, and we want to serve our people, customers, and community in a certain way. So we have key practices and core values that have been defined for, okay, here's how we do it. Here's what we're looking for in our team and what's required.And that's super powerful for me as a North Star, and I ensure our teams align. So this core values piece is part of the daily discussion of how we provide that. We're maintaining that as we grow and live out the value. The way our values have been defined, it's one, take ownership.Two, either win or learn. Three: the golden rule - treat others as you'd like to be treated. Four, challenge the status quo. The type of work that we're doing is complex. We're agile. We are moving quickly. We're relying on our people to execute. That requires deep ownership of someone willing to come in, own what they're doing, take responsibility outside of the specific roles that have been undefined, buy into the team, and be part of this culture.Always be challenging the status quo, looking for ways to improve things. Learning from every opportunity, and ultimately just being a good person, is how we think about this, and we've. One of the best proofs is telling this story and being clear about the values. One of our customers recently remarked that working with Edison, he said, yeah, it's great that you guys are sharing this because, from the other side of the customer, it's evident that the culture is on point and is doing what you guys expect to.That means a ton because having a great alignment within our four walls is great. But the result here is that we're trying to serve our customers in the best way., and it's great when they can see that as well.Lisa Ryan: When it comes to bringing on the right people, because for the culture that you have there, it sounds like it's a safe culture for people to take the initiative and either win or learn and then, giving people the opportunity to fail because you know that's not always going to be a, of breaking the rules. But what are some of the ways that you determine that somebody's a good fit for your organization?Brandon Bartneck: Yeah, that's a great question. So we have traits we're looking for, and curiosity and humility's huge—a desire to continue learning. So we can define what we're looking for in these people with that.And then how do you go about evaluating and figuring out where? That's where your question is, right? We're not quick to hire. We have a long relationship-built approach, for the most part, where we have prolonged discussions with individuals. So we're trying to walk through the history of what has happened and how people are processing, thinking about, and learning about their career experiences thus far.Also, one of the things I hadn't been exposed to before is that we incorporate a test drive into our evaluation and decision-making process, which is what we're evaluating or defining. Real-world scenarios that this individual will experience in their role, and trying to discuss how they approach it and have them do the work of, hey, here's some of the work that's required, please, come out. We'll discuss, report, and present what goes into that, which serves both sides. So one, it allows the candidate to see, Hey, here's what the work looks like. Is this something that excites me, or does it seem like, yeah, that I dread doing? and it also allows us to see the competency, but also more than that kind of the way the individual thinks about and approaches a task like that. Whether it's something they're eager to go at and learn and dig into the things where. Have blind spots in their expertise; if not, maybe it's not the right fit.Lisa Ryan: I looked at it when my husband joined this new company last year. It was like eight interviews and six hours of personality tests to ensure they brought the right people on. He's just so happy. Sometimes, people want to get a body in there to fill space when there's an open position. But as I say, in many of my programs and clients that I work with, you need to hire more slowly and fire more quickly.Then it would help if you took the time to give them, show them parts of the job, and have those conversations. People will show their...

Connect with Tom Hatton and John Ballinger:Tom Hatton: thatton@cleanvapor.comJohn Ballinger: jballinger@cleanvapor.comLisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network podcast. I'm excited to introduce you to two guests on the show today, Tom Hatton and John Ballinger. Tom is the CEO of Clean Vapor, a radon and vapor intrusion mitigation company. He's worked in the environmental consulting and remediation industry for over 30 years.John Ballinger is the COO at Clean Vapor. He also owns a risk management and leadership development company. He's been working with Clean Vapor over the last three years. So, John and Tom, welcome to the show.Tom Hatton: Thank you for having us, Lisa.John Ballinger: Thank you very much, Lisa.Lisa Ryan: So, Tom, I will start with you. Share a little about your background and what led you to do what you're doing with Clean Vapor.Tom Hatton: Sure. My background is, I was, I have a science background, which is chemistry and physics, and right out of school, I was fortunate enough to be on EPA's very first vapor intrusion site, which is vapor intrusion is where chemicals that are in the ground come up into buildings and they're harmful to people.And I was able to develop a model that would predict how those papers would get into the building. And then, from there, I was drafted to be part of the first research team to figure out how radon is getting into houses in the United States. So we looked at a bunch of homes and buildings and came up with a flow chart for a logic pass for fixing these buildings.So that's how I got into this business. And one thing led to another. So we started, and we were fortunate. The United States Park Service was our very first client. And then we grew the business out of that to where we're today.Lisa Ryan: Awesome. And John, what about you?John Ballinger: So, I was in aviation in the military and left the military like many military people do when they're retiring and trying to figure out what I will do with the next portion of my life?And it was a natural progression to start a risk management company focused on planes, trains, and automobiles. And started that company and quickly saw that getting called in after the occurrence happened. It was people-driven more than it was process driven. There was a failure in someone following policy or procedure, or the leader in the organization needed to communicate more effectively.So that risk management company led me to start a professional personal development program, especially when it comes to leadership of the executives down to middle management. And that's Tom and me. Tom and I intersected about four years ago through our work with two nonprofits in dire straits.Lisa Ryan: So, before we dive into the culture that you have created at Clean Vapor, Let's talk a little bit about exactly what you do because we all have, or we're supposed to have, radon detectors in our house and stuff, but I don't know if people know what it is and why it's So, vital that you're doing what you're doing with it. What is radon, and why do you focus?Tom Hatton: There are two elements of focus for the company. One is naturally occurring radon, and the other is man-made chemicals that are a carcinogen, which is at many of the manufacturing sites, and that's where the intersection is probably for this audience. Radon is naturally occurring.It's of all soils worldwide, and it gets into your home based on the concentration in the soil below the home and how the home is constructed. Now, radon's hazardous because it's colorless, odorless, and you can't detect it. But it is the second leading cause of lung cancer in the United States.There are about 21,000 deaths annually caused by radon, and it's probably the country's number one underplayed health crisis, mainly because mother nature is the culprit. There's no lobbying against Mother Nature. It's one of these hazards that just gets swept under the rug because there's no bad actor you can point to and say, let me litigate against you. And there's also a personal responsibility element where you, the homeowner, or you, the building owner, are responsible for doing the testing. So people tend to avoid looking at it.And the third factor is out of all the harmful risks in the United States. The federal government only spends 7.9 million in education to tell people about radon.And when we encounter people, usually after they've got lung cancer, the question is, why didn't somebody tell me about this? And we took on our mission to educate to the extent we can as a small company.  Lisa Ryan: That brings it back to why you started the company in the first place. Is that right?Tom Hatton: Yeah. What happened was my wife Kristen and I were just married, and we realized that there was a family member who was suffering from cancer. We realized that there were probably less than 25 or 30 people in an entire country who knew how to diagnose buildings and correct them correctly. And we realized that we did if we did what we did in the science-based practices because what we did was a little bit different. We took a scientific approach to evaluate homes and buildings. When the government started collecting statistics on correcting these homes, we discovered we'd had the best results out of any company.In other words, the lowest radon runs post-mitigation. And we decided that the thing to do is since we had a corner on this technology, is that we would use it to mitigate as many homes as we could and take people out of the risk of getting lung cancer. And that's a terrible death. I've met these people on oxygen, and essentially they suffocate. The death is terrible. And I'm very passionate that it was one of the country's saddest, most overlooked health crises.Lisa Ryan: So, it sounds like you have a strong mission, which is important when you're coming to building a company culture. Let's start talking about that. First, what prompted you to look for someone else to help you develop and direct the company culture that led you to find John?Tom Hatton: So, that came out of the other side of the business, which it's not the other side, it's just a different focus, which is the chemical vapor intrusion part. We had grown that business, and we had worked with Fortune 1000 companies, but as the word got out about Clean Vapor and there was a growing need in the large consulting engineering world, we started working for Fortune 100's, and we came it for 500's and the 100's.And we were blessed enough to have an opportunity with a large aerospace manufacturer, and the company had grown at that point. And I'm very technically oriented and have one type of culture, which is based on respect and trust and the expectation if you ask somebody to do something that, they're going to carry it forward with the same level of commitment that you have now, that's not a reality. And as the company grew, I gave our clients A-plus technical support. But the other part of it, the installation part, the field services were developing their own cultures. So the company is almost like a farm without a farmer, with different segments, cows, and chickens doing whatever they want. And we acquired this client, and the person who made this all possible sat on the phone with me, and said time to saddle up. And I knew exactly what that meant: the entire company needed to get harmonized with one culture, a culture of excellence to match our technical services.And John and I were working on the nonprofit at that point, which got lassoed into a bad corner. And John said you need me, right? And I said, yeah, but I don't know if I can afford you. And he wrote, I wrote a number and said, I'll do this for a year. And he wrote it on a sticky and turned it over.And I'm like, yeah, we could do that. So, we looked at the company, and the company was running, It was producing products, but internally it was running like when you throw sneakers into your dryer, and they're all bouncing around. But we couldn't scale the company and have all this bouncing around because it would just get worse, and then we would lose the opportunity to serve a tremendous aerospace manufacturer. And that's when we evaluated the company and found out how out of balance it was. And that's where John started putting in plants. And he and I and Chris worked together very intently to figure out how we would fix this thing and give A-plus service to our clients worldwide.Lisa Ryan: Awesome. So, John, when you came into the company, what did you find and do? How did you prioritize your starting point?John Ballinger: Tom developed a system. I created a system I used before stepping inside the company by giving a series of tests.And that first test would be the Myers-Briggs test, which gave me insight into who I was getting ready to talk to. And I have administered the test. So, I often don't even need to have a picture or meet the person. I can read the test results and walk into a room, and if there are ten people in a room with ten tests, I can tell you which test belongs to those ten people.Everyone took the test. I went to the, I went to three different locations and walked in. We're talking to people and quickly realized through the process of the test and a risk assessment that I've developed over the last number of years that 50% of the people in companies, and this is a general statistic during the previous 17 years, are in positions they're not suited for. I call them. They're not wired for that position. They migrate to that position for one reason or another. Or, as most companies do, they just hire someone and put them in that position and hope they swim, but maybe they sink. Then they know they do not know what to do with them once they start sinking.I went in with that personality profile test, with that risk assessment, gave it back to Tom and Kristen, and said, here's what we need to do, and here's how we need to start. And there were roughly 14 people when we started, and we shaved it down to three, which is tough because you're rebuilding.And I talk about you remodeling the house while you're living in the house and growing too. And all that's difficult. And I tell the business owner, this will be very difficult because some of the relationships you've had with these employees are years and years long. But they don't meet the criteria we need to take it to the next level in this company.We start narrowing it down and then rebuilding it. At the same time, we're removing personnel. Then we have to select people. Cause I take the word h i r e out of the equation and say we don't hire people; we select people that will be on our team, much like a professional team does.Lisa Ryan: So, when you went from 14 to three, what was, what did those 11 people have, not have, or what were they missing as you saw the future growth of the company, and what did those other three have that you felt value enough to keep?John Ballinger: The first was respect. One of the things that I learned early on doing this, you may not always agree with the owner. And you may have a voice to go to the owners and state your opinions, but by all means, always respect the owner.And I saw a lack of respect in a lot of areas. And the three, even though they still need to be fine-tuned, there was still a level of respect they had that the others didn't. There were more blasé. We don't care, just give us our paycheck.Tom Hatton:  I want to add something to that too. What coincided with this was Covid. And suddenly, we were locked out of our work sense because of covid. And So, we decided to take that opportunity and implement personal and professional development. So, we selected courses, modules, and things for people to do, and the weirdest thing happened. We were paying for their time and the course, and people would just come up and resign one at a time, going, "this isn't for me," and I'm like, this is mind-blowing. If anybody allowed me to improve myself, and they paid for it, and my time, I would be all over it. But I found out that a specific type of employee wasn't interested in self-advancement, and they took themselves out of the equation one by one.And then we were able because there are a lot of people idle at home because of Covid, we took our time and selected the next level employee as a replacement. And that's when things started coming together because we had, John was steering the culture. I was steering the technical side of things, and I wanted to get back to what the company was when it was small, where I was selecting people, and there was enough personal time that if the culture didn't work, it just wasn't going to work. And that's where the whole scaling thing came on. But there was a lot of intentionalities and how we went about that, how we were going to replace people, what the job tasks were.We wanted people who had not just technical skills but good hearts as people. They like you care for the person you're working with. And I started hearing about these guys being over and their coworkers' houses for barbecue, helping each other put new brakes on their cars.And this cohesiveness started developing within the company. And that's what, that is what helped separate us. And we get great feedback from our clients. They said, Hey, I'll work with your guys any time. So they work hard, go out for dinner, joke around, return to the hotel, and show up for work nice, sober, and inspired the next morning.John Ballinger: Let me just put a little cherry on top of this for Tom and Kristen because it's tough to decide to remodel the house while it grows and builds. And they did that. And what happened even during Covid and the great resignation is that the company went from three, and it's standing at 34 right now.Lisa Ryan: Wow. And what's occurring to me, and what my listeners are picking up on, is there are so many lessons here. Number one, you have a CEO who's running a successful company but realizes there's a part he's missing where he has good technical skills but not people skills.So there's that awareness that sometimes the signs are there that we have to make those difficult decisions. And then you have 14 people that were probably good at what they did, but there needed to be a cohesive team. So, then we have to make the difficult decisions to get the people on the bus that are no longer fit or off the bus that is no longer fit for that bus, and then be willing to turn over what you are not good at to somebody good at it and start to make that whole thing. And then just what you just said with going from three people to now 34 people in this harmony and these relationships, that it's not a change that happened overnight, but because you were willing to do all the cleanup work beforehand, now you're starting to see the results of all the work that you put into it.Tom Hatton: Yeah. There are two employees that I want to point out. These guys were tremendous people. I liked them a lot. They were good at what they did, but what we were doing was not their passion. And I knew that. And one of the guys, cause we fly to some of our job sites, was a pilot, but he also had a physics degree.And he was good as a technical scientist out in the field. But he wanted to become a bush pilot in Alaska. And I had some connections there, and I knew of a job opening, and I called the director of that air transport company, and I said, Hey, I have a guy who works for me. He's a tremendous guy, but he's always wanted the pilot in Alaska.Would you interview him? And I set that up. He left. There was another guy with a very similar situation, and these guys did leave Clean Vapor. I lost valuable employees. Right now, we have an office in Charlotte—one guy who went from being a bush pilot to an airline pilot.And when he lays over here, Hey Tom, are you available? Can you run down to the airport? We can grab lunch or dinner. And we have a great relationship, and I actually feel happy about it. Because he's doing something that he's passionate about, and we only go through life once. And that's why it's important that we spend our best years seated in what we are crafted to do.And that's what I want at Clean Vapor. I want you to be wired to do what we're doing and enjoy what you're doing.Lisa Ryan: And paying attention to what that passion is in people So, that you're making sure that you have the right people on. And again, people might be saying that, oh, these employees, they want to come, and they just want to paycheck, and how are they going to be passionate about the thing that we're manufacturing?But finding out that aspect of the mission they can be passionate about. So, let's, John, let's go back to you as far as some of the things that you have focused on with the culture there and how you found the rest of the people to join the team to get it up to the number you are now.John Ballinger: One afternoon, I'm sitting watching, no, I'm not watching, I'm listening to the TV, and I hear the words as I'm working on my computer, "The San Francisco 49ers Select." It was the draft. I stopped typing. I stopped writing and I said if the professional athletes select and the college has recruiters that select.Why aren't business owners using that same platform to spend time selecting someone, not just throwing out a job description on Indeed or LinkedIn? Why aren't we spending time selecting that person? And we have a three-stage process that we've developed where we take someone. We bring them in, we bring them in at the level that they would be working with.So like the manager, the director does interviews until it gets done, and they take a series of tests. So, they're taking the emotional intelligence test. They're taking the working Genius test. They're taking a Myers Briggs test, and we're finding out who these people are and the job description we want them to accomplish and see, does that person match this job description? And it doesn't matter if they've been doing it at another job when they get to us.I sit on an airplane next to a gentleman from New York to Atlanta. And I said, is Home Atlanta? And he said no. Home's getting ready to be Florida. I'm retiring. And I said, oh, that's great. I said, what did you do? And he said, I worked for the New York Transit Authority for 40 years. I said, man, did you love that? He said I hated every day of...

Connect with Steve BlueLinkedIn: https://www.linkedin.com/in/stevenblue/Website: https://www.stevenlblue.com/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network podcast. I'm excited to introduce our guest today, Steve Blue. Steve is President and CEO of Miller Ingenuity, which is a high-tech company in the transportation space. He's also the bestselling author of five books and a speaker and consultant. Steve, welcome to the show.Steve Blue: Thank you, Lisa. It's a pleasure to be here.Lisa Ryan: Steve, share a bit about your background and what led you to do what you're doing.Steve Blue: I've been in manufacturing for 45 years and in senior leadership in manufacturing for the last 40. In the last 25 years, I've been the CEO of a manufacturing company, so I know the landscape of manufacturers.I have written five books. One of them became a bestseller. I'm a professional speaker. Just in the last year, I spoke at Harvard Business School, the United Nations, and Carnegie Hall, to name a few. Now and again, I'll do some consulting, but mostly it's professional speaking, authoring books, and then running my own company, which, as anybody in your audience will know, that's a full-time job in and of itself.Lisa Ryan: Before the show started, you and I were talking about company culture, and you said that you'd created a killer company culture in your company. I want to dive deep into that because with the workforce, with workers so hard to find these days to begin with, it's critical to create the type of workplace culture that keeps the people once you have them. So, share your philosophy regarding company cultures and some specific things you did within your company.Steve Blue: First of all, in my view, culture is everything. It is absolutely everything. It provides a foundation for profit, employee satisfaction, and shareholder satisfaction.And if you don't have the right culture, I can give you examples of the wrong culture. If you've ever traveled on an airplane lately, you know exactly what a wrong culture looks like. It's always amazing to me to use that example, Lisa. You get on an airplane, and the flight attendants work for the same people. They all work for the same company. They have the same benefits, working conditions, et cetera, et cetera, et cetera. And one will be miserable, and the other will be absolutely delightful. So it's hard. It all comes down to culture. In my company, we have several tenants of culture that we believe in.One of them is community. Another is ethics. Another is excellence. Most companies should have foundational cultures, and then your company might have a few different than mine, but people will resonate with the kind of culture you have in a company. Now, if it's a crappy culture, and if it's a culture of, we'll do what we have to, and no more than we have to get along, that's going to attract a certain kind of employee, and it'll resonate with a specific type of employee.But if you have a high-performance culture, you know what I always say, Lisa, is every company should strive to have a Cirque Du Soleil culture. Have you ever seen Cirque du Soleil?Lisa Ryan: Yes, several.Steve Blue: There you go. And I'm, I bet you everybody in your audience has, and one thing you don't see in a Cirque du Soleil show is somebody going, Hey, that's not my job.I'm not catching you today. I don't feel like catching you today. They never grumble. They always come to work every day, all jazzed up with a mission to do better today than they did yesterday. And I don't know why you wouldn't want a culture like a Cirque Du Soleil culture. So a lot of CEOs tell me we're manufacturing.We're not a circus show. You can't compare us to that. Actually, you can. You can create an environment that will attract the Cirque du Soleil talent. Now you have to make sure that, to your point, once they get here, see what we do, Lisa, is we're very careful in our screening.If you let somebody that has a bad attitude or doesn't believe in the kind of things that you're trying to do, your call. Don't ever let them in. Because then they start infecting the rest of the place. And so not only do the leaders interview people before they come to work for us, but the peers and people they would work with also interview them.And so then we get a read, is this person going to work with this culture or not? And that's how we keep them on the outside. And so once they're on the inside, you must constantly promote and continually reinforce and support that culture. So I'll give you an example: our employees pick a particular value of our culture every quarter, and they vote for an employee that illustrates and exemplifies that value. And so they all collaborate on it, and we give an award every quarter to the person who won it. And they get a hundred dollars bill, and then we put a full-page, four-color ad with them getting the award in our daily local newspaper.I can tell you that people love to see themselves in the paper, and then when they do, they brag to their neighbors and friends. Look at this. This is the kind of company that I work for. And as an example, I don't have any trouble recruiting talent at all. Because the world around us in our community knows we have a high-performance culture. They know we take care of our people. And when they see evidence of that, like that one example in the newspaper, it attracts the kind of people I want to attract.Lisa Ryan: So, how many employees do you have, and what exactly does your manufacturing company do?Steve Blue: We have about 200 people, and we make everything from low-tech products that go on the bottom of a locomotive, and the bottom of a rail car is an example in passenger and freight rail. And then we have everything from the top of that locomotive to the bottom. And then we move into the high-tech space with LED highway crossing signals, where the biggest manufacturer of those in the world and our newest flagship product called zone guard.It's a very sophisticated device that protects roadway track workers from getting killed. Believe it or not, if you see these guys working on the side of the rail, they're grinding the rail. They're clearing brush, all kinds of the stuff. A bunch of those guys get killed every year because of the train, they don't know the train's coming, and it runs them down.They have all kinds of procedures and policies, so that's not supposed to happen. So our product zone guard makes it virtually impossible for anybody to get killed on a track worker detail. So we're high tech to low tech, and everything is in.Lisa Ryan: And it's interesting because, when I was, when we first started the conversation, I, in my mind, was trying to figure out how many employees you have because you make it sound like a small company, you know that you can do these things and create this Cirque du Soleil culture and pick this the person of the month based on the values.But you have good size organization. So the challenge to people is, don't make excuses that my business is too big or we have too many people to do this because no matter what size your organization is, if you bring the right people on board, that you've already talked about that screening process, and that does work.I've had a couple of different podcast interviews as well as just my clients that I've talked to about letting your employees get involved in the interview process because otherwise, you have this person come in. He's got an excellent pedigree on paper, but as a human being, he's just an idiot.You bring him in, and your employees are like, I am not working with him. Versus, they get into the process, and before you even make the offer, your employers are like if you hire him, I'm leaving. And then, okay. Not the right fit.Steve Blue: Everybody looks good on paper. You never see the warts until they're inside the organization.So your point is well taken. The thing I want to say about an organization's too large to do well, every company has, they break down. A 10,000-employee company eventually breaks down to one leader with 20 people or one leader with 30 people. So don't tell me that you can't do it in a big company.You have to ensure that your leaders are completely on board with the culture. And then you charge them with the responsibility of carrying that.Lisa Ryan: And it really does have to come from the upper leadership and from the C-suite who sets the tone for the organization. If they're not buying into it, it will not happen.No matter how much a manager or HR wants to change the culture, it's got to get that buy-in from above and all the leadership.Steve Blue: I agree with this notion. Somebody wrote a book about it once. Leadership from the bottom. That's ridiculous. Yep. You can't leave from the bottom, for crying out loud.And I, there's another book out I think it's called Leading When You Have No Authority, that's bunk too. You have to have authority, otherwise, you can't lead. If you want to lead credibly, you have to be a good leader, but you can't lead from the bottom up, and the top has to buy into it.I'll give an example. I took over a company once that had a lot of problems. The culture was not what it needed to be, and it started with the guys at the top. So I brought them in a room, and I laid it off for them. Here's what we're going to do, here's what we need to do, and if any of you aren't on board with it, you need to leave.Half of them weren't on board with it, even though they said, oh yeah, sure, boss, I got that. But then they in action, they, so I just fired him. And so when I did that, the other guy said, whoa, he's serious about this. And you start at the top, and if you got you, you train them, teach them, coach them, cajole them, encourage them, support them.But if they don't do it, you have to get rid of them. Then it resonates with the whole organization. When people see that someone was asked to leave because they didn't follow a certain value or certain trait we want for the culture, they know the boss is serious about this. So I guess I should be too.Lisa Ryan: And you think about the commitment and loyalty that builds from the individual contributors as they're looking, because the, a lot of them don't believe that management will ever fire anybody in management, no matter how terrible the manager is. So when they see a leadership team saying, we're going to change culture, and by the way, we just got rid of these five toxic leaders, it sends a very strong message to the rest of the team.Steve Blue: It really does, Lisa, because you made a good point. A lot of times upper management thinks they're untouchable. They are what they are, and you can't do anything about it. And that's why companies can't change because they leave the change, the people at the top that aren't going to change and don't want to change them.You have to take them out. You know what happens is people don't become toxic overnight, Lisa, so they become toxic over decades. Usually, you can't fix that. I've tried, trust me, I've tried to fix toxic people. I've thrown everything you can imagine at it, but it just never works. So now I don't waste any time if I encounter a toxic leader or person. I just say goodbye.Lisa Ryan: Yeah, it's funny, I just had a program this morning, and one of the company leaders asked me how do you work with companies that have toxic leadership that want to hire you. And you've probably found the same thing, Steve, that most people don't hire us because they don't see the problem and don't want to fix it. So it's somebody else's thing to do. It's the companies that are already doing things well and want to do things better are the ones that focus on things like company culture and not just the bottom line and how we're going to make the next buck.Steve Blue: Yeah. It used to be you talk culture to a CEO, and they give you that deer-in-the-headlights look. These days more CEOs are beginning to understand the power and the absolute necessity of having a high-performance culture. And so they work at it. I had a CEO once who wanted me to come in and do a little consulting, and he had a toxic team, I could tell.And I said, look, I really don't want to do this, but I will, but only if you pay my fee up upfront before I even start. So he said why would you want that? And I said, because I know within two or three days of mean nosing are on your organization, your team's going to come to you and say, you got to take this guy out.He's going to destroy this whole company because they don't want anybody to upset their nice cushy positions. So I don't bother with you. I won't bother with companies like that. I just No thank you.Lisa Ryan: Yeah. I've had the same thing where you have to fire clients because they have the intention. Or they think it's something that they should do. They've heard that employees could make more money if they are engaged. So instead of looking at it from the heart of the matter, from the actual culture, and coming at it from that, it sounds woo woo, but that heart-centered approach. If you're looking at it as just dollar signs, you will fail.But if you go in it with that heart-centered approach that I'm doing this because it's the best thing for my employees, it's the best thing for my leadership, it's the best thing for my customers, then you know what? You're going to be more profitable. You're going to be able to keep people and you're going to be more productive and all of the good things that go along with it. But we have to do the work.Steve Blue: Yeah. Most CEOs don't have the guts for the. Because it's ugly and it's messy, at least in the beginning. Now, when you get an organization as I have, they run like a top. I'll give you an example. One Saturday morning I drove into the office to catch up with some work, and I saw a big U-Haul trailer and truck at our loading dock.And that's weird because we always ship by commercial carrier and we don't ship on Saturdays. So my curiosity got the best of me. So, I walked over and into the shipping department, and there were some technicians, a couple of factory workers, and one warehouse worker.They're unloading a bunch of stuff. I said, what are you guys doing? He said we were short a couple of parts to make this certain commitment to one of our customers, and we couldn't get it. So, we called all over the country until we found them and rented a U-Haul to get them and bring them back.I'm thinking, who gave them permission to do that? The answer is they didn't need permission, and that's the kind of culture we have. They take it upon themselves and do what has to be done, but that's the end stage. Most CEOs don't have the guts to start it at the beginning, where you have to fire people.I've had people threaten me. I've had threats to my family. I've had bricks thrown through my window. And all of that is part of the process of restructuring. I'd call it the heart and the soul of a company.Lisa Ryan: What did the company look like? What were the specific things you did? You were walking into a culture that was not what you wanted. And so, how did you start? How did you cause that turnaround to happen?Steve Blue: I'll give you a few examples of mechanics. Lisa, one example, you see how people behave is rooted in language, right? And so how they talk to each other largely determines whether they can work together or not and whether they can work productively or not.When I first took over this company, the language they used with each other was just awful. It would make a sailor blush. It was really bad. And so the first thing I did was to call everybody in the factory and say, here's the deal. We will not tolerate that kind of language.I said, I'm not talking about hell, and I'm not talking about, damn, you guys know what I'm talking about. I said, there are no second chances. It's zero tolerance. The first time you use that kind of language, you're going to get fired. We'll be no warnings. It didn't surprise me, because I've been around a long time, Lisa. Within hours, they were testing me, and I fired three or four people in the first afternoon.Now people started to pay attention. You can't fire people for swearing. I sure can. And once I did that, and it took a couple of days for quite a few people to get fired, then the rest of the people said, wow, I guess we better not talk like that anymore. So I've always believed that the first place you have to start in a company if you want to build a superior culture is to examine how they talk with each other and how they behave.So that was the first thing I did. And the second major, and this is of course, over a few years, you must first find out what kind of culture you have. Then you can decide okay because you may want to retain some parts of a culture. So we did surveys that brought in an industrial psychologist and surveyed every employee.I didn't ask the managers because they'll tell you what they think you want to hear. I wanted to hear from everybody. So then we had a good sense of what our culture was like, and there were parts of it that were, yeah, this is worth keeping. And then, we made a conscious decision, and culture is rooted in values.We made a conscious decision. Here are the company's values now—these values we don't want anymore. Here's why we don't want them, and here are the values we want. And in part, the employees told us the kind of values they wanted. Now the inmates can't run the asylum, but I, you'd be surprised that most times employees, when you say, what kind of values do you want?They'll say ethics, honesty, excellence. They really do because most employees want to work hard if you're giving them the chance. So that's, that was the second major thing we did. And then we threw everything we had against it. If you exhibit our values, you get promoted. If you don't, you get fired.If you exhibit our values, you get pay raises. If you don't get the pay raises. Everything an organization has, then you have to throw it toward the values and toward reinforcing your culture.Lisa Ryan: If I were to walk through your plants and I asked your employees about your values, is that something that they know? Like the Ritz-Carlton knows their theme?Steve Blue: Yeah, absolutely. And a lot of companies have their values...

Connect with Noah Graff:LinkedIn: https://www.linkedin.com/in/noah-graff-b7169a1/Website: https://todaysmachiningworld.comPodcast: https://todaysmachiningworld.com/swarfcast/Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network podcast. I'm excited to introduce our guest today, Noah Graff. Noah is the host of SwarfCast, a podcast that helps professionals in precision machining excel in their careers. For more than ten years, he's been a used machine tool dealer, or treasure hunter, as he likes to call it, buying and selling used equipment worldwide.He's also a blogger and editor for the website, Today's Machining World, directed at the Precision Machining Community. So, Noah, welcome to the show.Noah Graff: Oh, thank you. It's fun to be interviewed rather than always doing the interviewing.Lisa Ryan: So, share a little about your background and what led you to do what you're doing.Noah Graff: One way you could put it would be nepotism. My grandfather, Leonard Graff, started Graff-Pinker, our used machine tool business, about 80 years ago. My father and my uncle went into the business. In school, I was a film and history major. My dad had started this blog. It was a print magazine called, Today's Machining World. Because he had a journalism masters in college, it had always been his dream. So he started this magazine about the precision machining industry, which is what we specialize in.This was 2005, and he was trying to lure me in. He said, look, broadband is coming. We'll do video interviews, and he was right. He was about five years too early. But I went there and started working with the magazine, editing, writing, and then about 2011 or 12. Print was dying, so we decided we'd take the magazine online, and I would join the treasure-hunting business. We continued to blog, and then about four and a half, five years ago, we started SwarfCast, the podcast, which is an extension of Today's Machining World.You might be wondering why we call it SwarfCast. The word swarf is a British word. It means the chips, grime, and oil in these machines' bellies. But, of course, we specialize in screw machines or other CNC machines. So usually, they'll have a chip conveyor at the bottom of the machine, or sometimes they call it swarf.We had the magazine and then the blog. So we started calling it Swarf - Swarf was our column because it's getting down and dirty into what's happening behind the scenes and the belly of the machine.Lisa Ryan: With all of this workaround precision machining, what are some of the topics you cover? You have a podcast and a magazine. Is there that much to talk about in precision machining?Noah Graff: There's a lot to talk about. We've kept the podcast a little more niche. But with the blog, there's all kinds of stuff that our audiences would be interested in - everything from politics and economy to sports. My dad writes 50% of the blogs, and then I do a blog and a podcast every other week. But it's a springboard for things. But there are all kinds of things to talk about. Lately, the issues on people's minds are workforce development and people are always interested in technology.People are interested in company culture, and we come at it with a different slant because we are selling used machines to all of our readers and listeners. We have ears in it. We're hearing what everybody is saying. It gives us an interesting viewpoint. We like to talk about dealer stuff - people we've done, done deals with, machinery types of things that people are buying now, and trends we're seeing. Today we published a blog about how we're helping certain companies buy and sell their companies when people have gotten older and they want to sell out. For some other companies, it's better to liquidate their machines. That's another thing we do. We'll do auctions, so that's the one-minute, two-minute scoop.Lisa Ryan: One thing I enjoy about my speaking career and podcast is being around manufacturers and people passionate about something nobody else ever thinks about. There are many conversations around precision machining, and touching that niche market is cool. So when are you passionate about it for?Noah Graff: For me, it's this normal thing because it's what I've always been around. But in case it's specified. It's often metalworking that we're talking about. And we sell turned parts. We specialize in a specific kind of machine called a screw machine, and they have CNC screw machines and cam mechanical screw machines.We specialize in the CAM ones, which are great because you can rebuild them repeatedly. If a machine is from the eighties, that's a young screw machine. Oh wow. If I was alive while this machine was around, it's a cam screw machine. It's a young machine in screw machine years. Some of them we're selling might be in the sixties - that's not crazy.Lisa Ryan: So when we talk about bringing younger talent and newer people into the industry in manufacturing. You have these kids walking into the plant, seeing machines 60 years old, 50 years old, 40 years old. What can you then convey to them with all the automation and new shiny toys? What is it about that, that you can continue to use equipment that's that old or young?Noah Graff: No, you raise a good point. Getting people to use these machines is difficult. People don't realize that these mechanical screw machines are perfect for making certain kinds of parts. These are meant for parts you're making by the hundreds of thousands, and you can do a pretty precise job with them. And so, you might buy one of these machines. You might pay 30 grand or 80 grand for one of these machines.You might pay a million dollars to buy the computer-controlled version. If you're a company that needs to make a hundred thousand parts a year, you're caught in this weird spot where I need money to pay for a million dollars for a CNC machine. And these other machines are going to be too slow, these CNC machines. So if they can find the talent, they want to buy these machines. But it is difficult to find young people that want to do it. I know one of our good customers has apprenticeship programs in his shop. In the apprenticeship program, he pays more for people who want to learn mechanical screw machines.The machines are noisy. You're going to get dirty and younger people to want to push buttons and be in front of slick computers and screens and in cleaner shops that are quieter. It's a little harder, but certain people love it. It is possible to train people on these machines. Still, usually, people want to do the most cutting-edge technology, even if it may be different from the thing that's going to make the company the most money. That depends on the route these companies are taking. But you're seeing many phasing them out though they can't because they can't find the talent to run these machines.Lisa Ryan: I was going to say because that would bring up things like the knowledge transfer of taking somebody who's been on that machine who knows it inherently because they've been working on it and fixing it for 30 years. Absolutely. And you are bringing somebody in and trying to teach that. How, besides the apprenticeship programs, are you seeing them do anything else, or is it just the luck of the draw that you find the right person who falls in love with it?Noah Graff: If you want to work in a machining company, even if you've gone to trade school, the only way to learn is to be in the shop working on the machines in that environment. No matter who it is, they'll have to be trained by somebody, but fewer people will be there to train because everybody's retiring.At Graff Pinker, we will refurbish the machines and make repairs. And that's the great thing about mechanical machines. You can keep making repairs. One guy is retired and comes back just because he likes it. That's what you're up against, people. People need help finding enough workers who want to run the slick stuff, let alone the dirty stuff. It's challenging, yet you can if you know how to do it. It can still be a great living.Lisa Ryan: It just reminds me of fixing old cars and appliances versus fixing new things where everything is computerized.Noah Graff: It takes a specialist to do so that. There's some saving grace regarding the mechanical when there are no computers. Think about it. Would you ever use a computer that is twenty years old? Could you even fathom it?But these machines, some of them, some of the CNC machines, are made so well that you can use a machine from your 2000 that has a computer. But it's, and that's a skill set for the people that are repairing them. In our shop, we have a machine from 2007, and we have a guy, it's called an Emco CNC machine. We have a guy from the OEM that came to repair it. He's calling all around and trying to figure it out. It's an art to figure out an old computer,Lisa Ryan: I have barely had an iPhone for over three years. Much less a computer for longer than that.Noah Graff: And they won't repair the iPhone. They say, No, we're done.Lisa Ryan: No, you pay a thousand dollars, and it's disposable. When it comes to the workforce, what are some trends you're seeing people doing to attract or keep people once they get them in there?Noah Graff: It's important to, for the industry on the whole and for society to make the manufacturing and the machining business seem cool, seem like a good career. It's often more lucrative than doing something that you would spend a whole bunch of money at college to study. That's the first thing. I see a lot of business owners getting involved in the community. They get involved in schools, and they're gaining personally by it, and they're also just doing it as an altruistic thing. Were you asking about young people, or were you asking about all the employees?Lisa Ryan: Anybody that you have, the workforce itself. It's hard enough to find people right now, to begin with. And then, once you get them in there, you must figure out how to keep them because they have lots of choices now as far as if they decide to stay with you or ghost you at lunch.Noah Graff: This week, I interviewed somebody on Sunday who is a recruiter specializing in manufacturing. We talked a lot about this. She says that you must sell yourself if you are a manufacturing company. You need to treat these employees as though they're customers you're trying to push yourself to. So she's somebody people can go to find a recruiter that specializes in it. She also said networking, being on LinkedIn, is what she's doing.That's a big deal. Many machining companies we talk to have the best results when they bring in other people. You can't always have that, but that's something important. Regarding retaining and making your place attractive, it's a lot of what you hear in other places, too, of work-life balance and having better hours.Pay is significant, but everybody can offer that to the blue-collar industry by the hour. Traditionally, employee has little control over their hours. It was just, this is what you do and this, you work this many hours a day, and this is your overtime you can take.I interviewed a machining company. They have had a lot of luck retaining and getting employees by giving people flexible hours, saying, Oh, you coach your son's team, so you can work these hours. So you can work earlier and get off later, or you have to take your son or daughter to daycare so you can come in at x time.Or maybe they'll hire a student who can only work part-time. They're a talent, so they'll let them do that. They'll hire them even though they know maybe they'll leave. And sometimes those are the best possible people. The key is to have an open mind.Lisa Ryan: There were a couple of things that you said that stood out number one during the interview process where you are selling them, there's no way that they are selling you on their skills and everything because we must bring sexy back to manufacturing and let people know the benefits of it.There are a lot of people out there that are looking for opportunities. One of my clients, and one of the biggest signs they use, is to work with your hands. So it focuses on attracting people that get that intrinsic joy from working with their hands and getting into that.The other thing that shows with manufacturing is the work-life balance. Not only open to flexible hours, but we also have to change our minds about that. But if you think about machining, that's something other than something that can be done at home. You have your time back. You're not working from home on the weekends and nights and all of these things.It gives you a built-in opportunity to have a work-life balance while not having any student loan debt and being unable to do what you want and have a nice career out of it. It's interesting. The mind shift that manufacturers must have and the flexibility are huge.Noah Graff: Yeah. Most of the time, it still needs to be more flexible. You still have to go in. It's a harder sell to people because it takes a lot of time to go in. People are used to being at home now, so it's a shift. But, in many respects, it's healthy to go into a workforce and not see the world remotely five days a week. It's a complicated issue, but I hear so many different ideas.Lisa Ryan: We have the mom shift that I know a lot of manufacturers are talking about. Dads can do it too, but working from ten to two. The parents can get their kids off on the bus, then they go to work, and then they pick them up. The mom shift is a big one. I just spoke at FABTECH, and one of the guys in my audience said he has so many workers that get the benefits from their spouses that they don't need them. I'm not sure about all the ins and outs, but he allowed people to work fewer hours.So he's offering them thirty-hour workweeks without benefits because they got them from their spouse. They could go from a five-day week to a seven-day week because employees had fewer hours. They had more time on their own. You ask questions that you have never asked before. Your employees worked seven days a week, or he had shifts going seven days.They had shifts that he had shifts that went seven days a week instead of five days a week. So he could increase his staff by 30% and yet decrease the money he was paying for benefits. So it was an interesting concept. You think of things in ways we wouldn't have to consider before because flexibility and manufacturing usually don't go into the same sentence.No, but if you say, how can I offer half shifts? We have a shift from six to 11. We have a shift from 6:00 AM to 11:00 AM. So just again, giving people shorter shifts, looking for ways to give them their time back, because that's after two and a half years of the pandemic. So that's what we're looking for.So what, are there any other trends you're seeing regarding technology or the workforce?Noah Graff: As far as workforce, again, in technology, lots of people are talking about automating putting in collaborative robots, cobots. We're hearing a lot about reshoring and nearshoring, where work is coming back to the United States, but it's coming back to Canada or Mexico. So it's not necessarily that specific work that once was there is now here. What's more, now they're quoting jobs, and I'm getting a job that would've been there. So that's what I hear from companies.Lisa Ryan: What about some of the global trends you're seeing? So anything from across the sea, China, Europe, South America, or Asia?Noah Graff: Sure. Traditionally we've done a lot of business with Europe. Buying and selling back and forth is a puzzle right now. I hear things from places. I've heard Italy is slowing down. People are complaining about energy prices over there. Energy prices in some European countries are like seven times what they were, what they are typical. Unfortunately, some of this stuff in my world, in the machinery dealer world, can be a small sample size. I was talking to some people I knew in Germany who had this expensive CNC multi-spindle they wanted. They complained that their automotive and energy prices had been a little difficult.And then they're like, Oh, sorry, the guy can't sell the machine. Now he is got too much work for it. He's got a job. Let's see what else we're about to buy some machines in Japan. We're excited about that. Some CNC Swiss machines it's a kind of screw machine.That market is still crazy. If you can get one of these machines, that new one would be about 250,000. If you can get one that's 12 years old, you should get a hundred grand for it, which is pretty good. It is making us go to Japan to get these machines.We do crazy stuff like that. But of course, as we were negotiating for the machines, the yen suddenly popped up like 4%. So our margin is shrinking, but still, that's interesting. China is suffering because of the pandemic and different things that the government's done as far as shutting people, shutting them down, et cetera.But in the interview I just did this week, I was talking to a guy who sells Swiss star machines. This is like one of the name brands of Swiss screw machines. He said that they buy more machines in China in a month than they'll sell to the US in a year. That's how much they're manufacturing. It blew me away.Lisa Ryan: And are the machines that different? If you understand an American screw machine, is it easy to pick up a Japanese or a German model, or is it a new learning curve?Noah Graff: Oh no, the machines this guy was selling, this is a star. These are made in Japan. Okay. They are a bunch of machines. This Swiss-style screw machine, some of the main ones are from Japan. There's one from Korea. There's one from Switzerland, very famous. It's called Tonos. They call it Swiss because the people who invented this machine made watch parts in Switzerland.They needed a machine that could make long, narrow, precise parts in the United States. They have a few machine tools that they make Ho machines, which are very popular. They make them all over the place. There's a screw machine called a Davenport, one of the old-school screw machines. You could sell a machine from the seventies, and it would still be pretty good.This is also called the machine that won World War ii. Because it can just make parts, you can make one part in two seconds. If you ask anybody around the world, even European people making fancy machines, the Europeans make a lot of expensive high-end screw machines. They'll say no, this machine won World War ii.Lisa Ryan: So, talk about that. That's an interesting historical fact. So why did one machine win World War II?Noah Graff: That was the logical question. The reason it won World War II is that this is a machine. It's called a multi-spindle. These machines make a hundred thousand parts a year or more. They usually...

Connect with Jim Tincher:Website: www.heartofthecustomer.com. Email: Jim@heartofthecustomer.comLinkedIn: https://www.linkedin.com/in/jimtincher/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network podcast. I'm excited to introduce you today to Jim Tincher. Jim sees the world through the eyes of the customers. He's a nationally recognized customer experience expert, keynote speaker, and the author of DO b2b: Drive growth through game-changing customer experience. His firm builds loyalty and B2B organizations and works with multiple global manufacturing organizations. Jim, welcome to the show.Jim Tincher: Thanks, Lisa. It's great to be here.Lisa Ryan: Jim, please share a little about your background and what led you to do what you're doing.Jim Tincher: Sure. I've always been a customer and am very interested in that. In my first job out of college, I worked for a high-resolution laser printer manufacturing organization. During my first summer, I was going to visit my girlfriend, now wife, out in Connecticut. So I wanted to see a customer while I was there, just for whatever reason in part of it.It's always been a customer focus, but over time I recognized that the field of customer experience is where I gravitate towards. I didn't connect to the business, and that was my case. Once, I worked with a B2B to C organization, and it was all about the customer. I noticed that my internal colleagues needed to be resonating with them because I only talked about customers.I never connected it to the business. Since that time, 12 years ago, I've been focused on making that connection to how helping improve the customer experience creates a more substantial company. I'm especially intrigued with b2b, which is far more complex and richer than B2C. But nobody ever writes about it.They all write about Amazon. They write about Best Buy, where I spend some time. But instead, they need to talk about how creating a better customer experience creates a healthier organization in a manufacturing environment. That's my passion, and my mission is to make that connection.Lisa Ryan: One of the things when we look at engaging employees, the more engaged your employees are, the better they take care of your customers. So the better customer service you have, the better your business, which means the employees feel more connected to the organization. So it's this nice cycle that, again, in manufacturing, because they're often just making products that they don't see that result.They need to be more focused on the customer experience, according to what you're saying in your brand-new baby book, congratulations. That is a huge part of the picture. We talked a little bit before the show about your four items and your unique experience with Dow Chemicals.So why don't we start with Dow since everyone has heard of them? Then, you can share that story.Jim Tincher: You bet. First, our research shows that most manufacturing programs have a customer experience program, and I don't know whether that's doing a more substantial business when done.Your customer experience program should create an environment where customers want to buy more from you. They want to stay with you longer. They want to operate in less expensive ways for them and you, but only some programs can do that. Dow is an outlier in a very positive way. I first met the Dow team about four and a half years ago, and we were working on their complaints journey and had the opportunity to meet Dan Fedder, now their chief commercial officer.At that point, he was the VP of CX, and we were working again on the complaints journey. So when I first met him, he said, Jim, my goal is to create an enjoyable complaints journey.Lisa Ryan: That sound, it sounds like an oxymoron.Jim Tincher: Right? That caught me by surprise. And they measure effectiveness, ease, and enjoyability.They don't calculate net promoter score because they've proven net promoter score does not link to any business outcomes, and that's what they care about. They don't care about somebody moving their mouse to the right on a survey they care about. Do they create an environment where customers want to work with Dow?When there's a discretionary purchase that any of their suppliers can give, they want to go to Dow first. So that's the outcome they're driving towards. Not in that promoter score behaviors are they care about behaviors. And they have found that when customers say it's enjoyable to work with Dow, their order velocity increases.The categories in which they order go up. The genuine interest to Dow, their number one outcome, is joint innovation - a customer says, I trust Dow enough that I want to work with you to create new to the world products, and we'll benefit from that. But that only happens if they find that it's enjoyable to work with Dow.Lisa Ryan: And you look at that too, that when business is going smoothly, of course, we love the business. But most business loyalty happens when a mistake has been made, and it's up to that company to solve it. When that company acts, based on whoever messed up through that complaint process, that can completely turn that around and create that customer for life because they know that, for example, in this case, Dow has their back. So, talk about that complaints journey. What did it look like before, and how did they make it enjoyable?Jim Tincher: Sure. They started in the same situation probably many of your listeners experience. A complaint comes in, and it bounces around the organization. It's easy to convince yourself that this is somebody else's problem and send it to the organization. We see that in all kinds of organizations, not just manufacturing, but certainly in our multiple manufacturing clients.There's minimal incentive to take ownership of and solve an issue, and certainly one issue. Nobody wants that on their plate. It's very easy to commit yourself. That belongs somewhere else, and that's the situation they found themselves in. Where it comes in through, customer service goes over to the sales team or account management.From there, it goes to R&D and manufacturing and bounces around, with nobody taking ownership of it. And that is true. That's not a Dow problem. That's true of all our manufacturing clients. And what they said is that's not acceptable. So we worked with them to interview their clients; to talk about the impact when a complaint is not resolved and how that impacts the organization and the individual.Then, we brought that to Dow. They had us bring that to their senior leadership, showing how they now match. We brought in a video of their clients talking about the good and the bad of working with Dow, and they brought the data. Ricardo Porta is now their head of customer experience, and he brought in all kinds of data to show not just what people said but their behaviors and how that impacted Dow.What we then did was we worked across the regions. We went to Shanghai; we went to Tunisia in the Netherlands. We went to Brazil Rio, as well as the headquarters of Midland, to bring in the employees to talk about how this impacts their jobs. We also wanted to get the employees' ideas of making this an enjoyable experience without investing in new roles. It's very easy to say, Let's bring another 50-person department. They'll solve it. Dow was clear - we need to do this with the existing headcount. How can we do that? What they said is that what we'll do is we will carve a group out of customer service and other groups. We'll create a center of excellence for complaints, and we will work and give this group accountability to resolve complaints as fast as possible. As a result, they piloted in Latin America, and Ricardo was the one who led that pilot. They saw that complaints were handled more efficiently, which clients loved and led to greater, more substantial business outcomes for Dow and their clients. This created a positive vibe of success.Dow invests in this. They support a better complaints journey. They saw that the KPIs got better in time to resolve. For example, they saw enjoyability get better. The customers became more engaged, and then they saw behaviors improve. For example, future orders, order velocity, and order categories made Dow, a stronger company.This wonderful flywheel where investing in customer experience results in a stronger company. And that's the magic about Dow; they proved it. They didn't just say we think that once we invest, everything will be better. Instead, they proved it to help their executives reinforce the importance of the investment.Lisa Ryan: I look at that again, returning to the employee standpoint. In many places, complaints bounce around because nobody feels they have the authority or they're not empowered to take care of it. So, number one, they don't care, or they think they're going to get in trouble or they're going to have to jump through a lot of hoops.You said several things. You're empowering your employees, making them feel more connected and married to the results. I just learned about the IKEA effect: people are more connected to things they've had a chance to build. So, when you have that employee experience, and you take away that blame, that safety, you're creating a safe environment, and then these employees get to work for what's called a center of excellence. Yeah, I'd want to work for that too. So, you're creating such a win-win in such an easy way to do that.Jim Tincher: One of the other keys they did is they didn't make this a headquarters initiative. We're talking with one client of ours for who 20% of business happens in the US, but the US is where they are headquartered. So, all the ideas are focused on the US first, even though that's a smaller organization. But, again, this is not Dow. It's another group. Dow is very deliberately saying. We're going to involve all four of our regions. We're going to interview all four regions. So, we sent our team, for a second time, out to China, to Rio to involve the customers, talk to them, and understand their experience. Then the customers, because one of the things that Dow did that was effective is they went back to those customers and said, Thank you for giving us your feedback. This is what we're going to do about it. So many programs need to remember to do that.And Dan, the chief commercial officer, is very articulate. He went back and recorded a video sharing, here's what we're going to do differently. But also, their sales team deliberately reached out to everybody who participated, saying, Thank you again for being part of this. Here is what we're doing. They were closing the loop with clients, which makes them stronger advocates because that's more enjoyable. You get that feedback that we are your partner, and the sense of being a partner is a crucial part of enjoyability. Dow is not just a vendor. Dow is there to help my business be stronger.Lisa Ryan: That feeling is vital to Enjoyability and feeds into that immediate feedback in closing the loop. That also sounds like when you're doing employee engagement surveys. You want to ensure that you're getting back to the employees. Hey, this is what you wanted. This is what we did.And then employees, next time you reach out to them, they're not going to say that was a waste of breath last time. It's Holy cow; they're doing stuff. So just getting back to the customer and let them know that what I shared made a difference. And again, you're building that.We've spent quite a bit on number two: that emotional North star in the complaints journey. Let's go back to the other three steps in your book—tying the customer experience to business outcomes.Jim Tincher: Yeah, that's so important and rarely done that most programs. Our research is very clear. Most programs say, oh, we should do customer experience. They create a group over on the side somewhere. We should do net promoter scores. Let's do that. Okay, now do your survey work. Let us know what happens. That's where the most end, where they, if they do any analysis past that, they'll say, Okay, last year our detractors, those who give a low score, they churned at 7% versus our promoters, those who give a high score churned at 2%. Interesting. Many manufacturers, by the way, don't have a churn issue. It's more about a share of the wallet. But that's hard to measure. And so most customer experience programs don't even try, and they'll look at attrition at, what's that?Lisa Ryan: Can you define Share of wallet? What do you mean by that?Jim Tincher: That's a great point. Share of wallet is in a category in which they operate - of all the dollars spent in that category, how much goes towards us? So, LA Grand is another manufacturer, and I spent some time over the last eight years we've done programs with them, one of which we measured customer experience. We asked customers, who are your top two providers in this space? We worked with the AV division. Who are your top two providers, and how much do you spend with each? To get a sense of how much of their discretionary, how much of their spending is with that division. And we found for them that confidence in LA Grand was a great predictor of that.So, we're connecting the customer experience to outcomes to how much you spend with us versus our competitors. Very few programs do that. They believe that by improving the survey scores, they probably score better behaviors happen. But that isn't very compelling. We met with a $2 billion manufacturer the CEO of a month ago, and we shared one slide that talks about how we measure the customer experience, which is four categories.Yes, we have transactional sentiment surveys and net promoter scores, what they use, and that is part of it. But we also talked about behaviors. For example, how many complaints are opened? How do customers order? Do they order digitally? Which did many manufacturers want to drive? Do they order the old-fashioned way instead?How often are they ordering within lead time windows? Because again, if we have a better experience, they're more likely to come to us earlier, which means they're outside of the lead time windows, which we want, or before the lead time windows. Then we look at operations. What is the on-time delivery?What is the perfect order for Dow users to get it right? What is, how often are we getting the orders? Perfectly on-time product, no issues. And then so we, and the fourth category then is financial. Are we getting it now? A higher share of wallet is hard to measure because it's hard to know how much your customers spend with your competitors, but a good proxy is how many categories of products they are ordering from us. There are specific products for many of our manufacturing clients that they're the only ones who can offer, and that's not where the competition is. There are also several categories of products that their competitors also offer.That's the battleground. Do you earn the right for those more discretionary orders by doing a great job on the unique products? And so, the financial is another key part of that order. Velocity is another part, but by bringing in those financial metrics, we measure the customer experience into a combination of sentiments, but behaviors are key. Maybe 10% of your customers respond to your survey. But what percentage of your customers have behaviors? All of them. Univar is a distributor. They work with Dow and others clients outside their distributor of chemicals. They looked at it and said that 90% of our customers must complete a survey.Can we predict those who are happy and unhappy based on their behaviors? They look at the operational behavioral data and say this client seems like they're unhappy. I haven't failed that survey. They haven't told us that but based on what we're seeing in maybe order velocity dropping or more complaints open, they look unhappy.Hey, account management team, can you reach out to them to see if that's true and what's happening? So they create a synthetic NPS. Because for them, they know NPS matters because they can use the data to do that for them. So coming back to, again, how we measure behaviors. We calculate the operations or impact, and we measure the financial outcomes.That's how you measure customer experience. The sentiment is not a score; it is diagnostic. To help explain things. We have a conference; it'll be over by the time this comes out where Ricardo's going to speak about how he was asked a question. And let me bring up the actual question right here. How do I see the impact of inventory on my business, and how does customer experience help me explain that impact?Most CX programs would say, I don't know, but he went and did the math to show that when inventory drops for a specific time. Customers have no confidence. Therefore, they order less often because they'll order from somewhere else with enough inventory that they are confident they will be fine. So he can draw that connection between the inventory levels and future EBIT.Lisa Ryan: Okay. Amazing. Only a few programs do that. Yeah. You have moved nicely into the third act of bringing the business data into the analysis, where you deal with your inventory levels and customer confidence. For those of you keeping notes, the first one we discussed was tying customer experience to business outcomes. Creating an emotional North Star, the enjoyable complaint journey brings the business data into the analysis. So tell us a little bit more about that before we move to the fourth step.Jim Tincher: You bet. And that's where that's how you should be measuring the customer experience is based on. If I had to wrap the difference between what we call a hopeful organization. They might be doing good work, and they're doing customer experience work. Still, they need to be connected to the business versus a change maker driving an improved business through customer experience. And again, that's less than one out of four.If I were to sum it up in one sentence, it would be that hopefuls report on sentiment. This is how people feel. Changemakers study and change behavior, and that's all in the data. Both the manufacturer's behaviors as represented in operational data and in the customer's behavior as such things as future orders or the velocity complaints that are ordered, bringing those together.For example, if you look at your business and speak to the listeners, I suspect there is a direct link between complaints and future business. There is some threshold between either number of complaints or the length of the complaint where customers change their behavior. There's an issue open past a certain length of time, which will vary by industry in manufacturing.Let's say it's a month. If the complaint is open for more than a month, future behaviors change to order from you less often. So if you can look at that data and find that linkage, the survey is only there to help explain why it happens, but the critical thing is linking behaviors and using that data.What we find is that we're a Qualtrics partner. Qualtrics is a survey platform, popular. We did not plan this, but we found that every one of...

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network Podcast. Our guest today is Julia Goldstein. Julia is an award-winning author and business owner on a mission to make manufacturing more environmentally responsible. Her company, J L F G Communications, helps manufacturers connect business environmental action and effective communication. Julia holds a Ph.D. in material science and began her career as an engineer in semiconductor packaging before migrating to writing and consulting. So, Julia, welcome to the show.Julia Goldstein: Thanks, Lisa. I'm glad to be here.Lisa Ryan: So, share a little about your background and what led you to do what you do.Julia Goldstein: Yeah, it's quite the story. I started my semiconductor industry career, which made sense based on my education. I did a Ph.D. working on solder alloys, and so as said, it was a natural lead-in in working in semiconductor packaging. And then, I was always the engineer who wrote articles for publications, trade magazines, and reports for government contracts. And when I look back in college, we had this fantastic program called Engineering Clinic, where teams of students would work directly with a company on a project. It was my senior year; I was the team lead.I was also the one who wrote most of the. And my other team members did most of the coding because I did one that involved software. After all, I wanted to get over my lack of interest in doing software. So I'm like, I'm going to make myself do it. I'm going to write some code. So they wrote most of the code. So we got lots of great people writing code.That's not what I want to do. So I then ended up working for a trade publication. It was one of the ones I had written for when I was an engineer. So again, I did that for about a decade. Eventually, I started this version of the business I founded in 2011. I initially focused on content writing, white papers, blog posts, and articles for trade magazines because I've been on both sides, and I can understand what the magazines will want.And I was then moving much more into consulting for companies and bringing that teaching background. So I've always wanted to do teaching.Lisa Ryan: Okay. And how did your early experience in production control help you in your career?Julia Goldstein: Yes. That was a job I got right out of high school. It was the company my dad worked for, so I had an in, it's who you know. But the following summer, they hired me back with a raise. So that was on me because of what I did. When I first became an engineer, I sometimes worked with the people in production control, and I understood their frustrations.I understood that they had to do something on the back end when we would change something about a design. And so, it's helpful to work in different areas of the business and to understand what it looks like for people sitting in some of those other places in a company.Lisa Ryan: And it's also where you are focusing right now on sustainability, which is huge for all industries, particularly in manufacturing. So talk a little bit about that. What you got, what got you interested in it, and why is it important for manufacturers to pay attention to?Julia Goldstein: Thanks. I am a materials geek. Since I decided to pursue graduate education in material science, I have become fascinated with all these amazing materials that engineers could invent. You could tailor materials to have these particular properties. I became more concerned about these fascinating materials' health and environmental impact. It coalesced around when I decided to write my first book in early 2017. I said I wanted to be about materials because that's my interest, and I also want to make materials better. How are these materials? People don't; many people are not aware of it. Where plastics and metals come from. More people are right now. People know, Oh, plastics come from fossil fuels.But I thought even five years ago, people had no idea, and I wanted to bring that in. So the more research I did, the more people I talked to in developing that book, the more I became convinced that it was truly the way forward. And I remember thinking that 2018 is the right time to bring forth this message.And it was almost too early because not many companies were willing to listen to it. And today, they are. And companies of all sorts can improve their sustainability. For example, if you have office buildings, you can think about whether you are keeping the lights on. Do you have reusable coffee mugs instead of disposable ones?That's nice. The companies making products have a long supply chain and must deal with all the energy and resources used to make these products, package them and ship them around the world. So we need all sorts of manufacturers to think about how they can improve what they're doing to use fewer resources, serve energy, and not produce as many greenhouse gases.Lisa Ryan: What do you find are the biggest reasons why manufacturers are going into this kicking and screaming? Why don't they? Why are they fighting sustainability in some of those cases still?Julia Goldstein: I think a lot of them, they still seem to think of it as something that's going to cost them more money today depending on where they are in, say, the supply chain, right? Who's buying from them? Who are they selling to? Their customers may or may need to prioritize this. What they may be hearing from customers is, we need performance, we need cost, we need fast delivery. So, therefore, that's what they're going to prioritize, and they're looking at those short-term, quarterly earnings and keeping those customers happy. What they are often not thinking about as much is the long-term repercussions, the long-term problems in that eventually those customers may say, Oh, we need you to show us your greenhouse gas emissions. What are you doing about being environmentally responsible? Are you polluting our waterways in our cities?And if so, we don't want to do business with you anymore. So, it's more of a long tailpiece of things. It requires longer-term thinking, and it's. There's also a psychology that says if I have an immediate problem that I need to solve in the next hour, the next week, or this quarter, that will demand my attention. If I have an issue where I don't do things right, I will have problems in two or five, or ten years. So it's harder to feel the urgency.Lisa Ryan: And so when it comes to the costs involved, because there are some, but what are some simple things that manufacturers can do to get started?Julia Goldstein: It's about looking at what you are doing now. It's that audit of your processes, your supplies of your suppliers. It's looking for; there may be opportunities where you can save resources. So we can save here by investing a little bit there. And a simple example is stuff like changing out lighting. There will be a capital expense to change to more energy efficient. But it will pay off. It's good to involve employees throughout the company.Those on the manufacturing floor making the products may see opportunities to reduce waste. Sometimes consultants can come in and give a solution that would seem almost simple and obvious and will reduce scrap. It will help efficiency, and they just haven't thought about it because they're used to it. This is just how we do things.We have this process, this stuff goes over here, and then it gets shipped out of the building. And I don't know what happens to it, but if the employees ask those questions, what happens to it? And how much scrap are we creating, and how can we do it? And empower all the employees to have a say based on what they are seeing and experiencing so that they can make suggestions.Lisa Ryan: A lot of times in workplace culture, it's creating a safe environment, to begin with, where employees trust management, not only trust management, but they like them well enough to give them ideas that can save them money and make more profits and all that. So again, when we're looking at starting that very process, if management doesn't have the best relationship with their employees or they are going to try this time, what baby steps could they take to get started with that?Julia Goldstein: The top management needs to decide that they want to make those changes and admit where the communication might be breaking. One option, and again, depends on the company's size. Say you've got a company with 500 employees and have a town hall where the C-suite is giving a presentation saying, here's where we stand.Here is what we want to do. We want to become more environmentally responsible. We know that we need to do something. We want to listen to you and take questions without dismissing them to make it. Okay. We are going to listen. And how are employees going to know? Okay, they said it before, but they're not going to listen.Something needs to change in terms of the set where yes, they are going to listen. They're going to let people know that they heard them. People want to feel heard. They want to think that they can bring something up without being dismissed. They feel like they might lose their job if they complain and say, this isn't working right, because that's a real fear, and sometimes employees might remain.Because they don't want to be the whistleblower, and if you can create a safe environment within the company where employees know, who should they talk to and what can they say? And hopefully, they can be open about what's going on.Lisa Ryan: It reminds me of a couple of years ago. I was speaking at a conference, and they had chosen, I believe it was 4-Water for their, to make people aware of environmental impact, where they showed those guys, those two guys who started surfing. It was supposed to be this beautiful area in the world and wholly cluttered with plastic.So they started this whole movement. I had never heard of it; I had never had any exposure. So, there's something to that of making it compelling and interesting and allowing employees to understand the impact we humans have on the planet. And like you just said, reinforcing that with the company mission that comes from upper leadership and that employee.They are open to their feedback and ideas because those employees know their job and understand what they're exposed to more probably than the C-Suite does.Julia Goldstein: Yes. And they might learn about something that affects employee safety. There's usually a great mechanism for that. They can work with EHS and say, Okay, we'd better get some better protective gear or better filtration or something like that to make a safer workplace. They can also bring in an environmental benefit by asking if we handle hazardous waste better. Not only are the employees safer, but that's a less hazardous waste to deal with and determine how to dispose of and pay costs.And suppose you need to pay the cost of your accidentally releasing something. In that case, there are severe consequences to that for the community that often, I don't know, companies don't always think about that, but I think it's also important to go in with an understanding that yes, you can't just easily and quickly solve all these problems.Lisa Ryan: And that allows the employees to feel a part of a bigger mission too. This is the difference. This is the amount of waste we save from going into landfills because of your efforts. This is what happened. Going to the airport and one of the things I look for when I'm filling up my water bottle is I want to see how the water bottles were saved.I want to see that. And it's just these little things that I know. And then my online thrift store, thread up that will show how much my purchase, how many gallons of water it's saved because I'm using, what I say is ops other or OPC other people's clothing. But it's just these little things that employees look for, and they can feel better just by knowing these little differences that they are making and the bigger difference that they're part of an organization that's now making too.Julia Goldstein: Absolutely. And to start those kinds of initiatives before. Okay. We're going to shout out to the world that we've saved this many gallons of water; having those metrics within the work is great. Because, as you said, that tracker that says, How many plastic bottles has this device saved? Okay, let's see what we can do. And that some of what gets measured is what matters. If all the company measures are quarterly revenue, then that matters. And if it costs 10% more per part to change something out, there's going to be that, Oh, no, that can't happen.But it can make sense if what's being measured is more than the revenue piece. And there are all kinds of different ways. So, for example, if something supplies cost more, there are various ways to work around that and figure out how to absorb those costs.Lisa Ryan: So, do you have examples of companies that you had worked with as far as a before and after or some of the things that they did to put together a successful sustainability project?Julia Goldstein: Some of the examples that I have seen are where, They offer a challenge for employees to come up with ideas that can help with, and some of them are for environmental, some of them also might be social issues. They might be dealing with DEI in the workplace, so they can. There's sometimes overlap because one of the essential pieces is employee retention.And attract. More employees, especially the younger employees, right? The new graduates are getting jobs or want to make a difference. So by including them and saying, Okay, we're going to have this challenge, and we're going to give feedback to everybody who responds to let them know we heard your idea if they can't implement it or not, to let the employees know why.Lisa Ryan: Yeah, it reminds me of, I worked with a golf course several years ago, and they would pay $5 for every idea. They didn't care what the idea was. So if the employee had an idea as far as how to make money or save money, like one thing in the snack shop, the employee thought that they should use the over-ripe bananas in banana splits so that they could cover them with whipped cream and people wouldn't know that they were over rip. So they got five bucks, then at the end of the year, they would pick the best idea, and that person would win like $250 or whatever. But it was such an easy idea. It made the company tens of thousands of dollars in those $5 increments.So it's not like you have to shell out money, but if you are having fun with it, not taking yourself so seriously that hey, and then I had another client. What they did is they would have on a whiteboard in the office, they would have what you wanted on one side and what we did. So when it comes to integrating those two of getting the ideas from the employees. And, as you said, you can only act on some of the ideas out there. But if you let the employees know that they're being heard, you reward them for their efforts, having some fun with it along the way, it's tough, and the employees see that they're being recognized for those things. So that can make a massive difference in the culture again.Julia Goldstein: Yes. I'm starting up a new program, an assessment about where companies find out how well they're communicating their sustainability initiatives and strategies, and policies throughout the company where there's a questionnaire for employees to answer.There are individual interviews where employees can use one on one share what's going well and what isn't. What do they care? And say, Okay, are there disconnects? Are there mismatches, or are there areas where the company is doing well, and they should celebrate? Because on a scale of one to five, a four is fantastic.Many companies have yet to arrive. Five is the best. And do you want to get to five? Here are some ideas. And again, and if they're scoring, that's maybe a message. There are some quick wins to just something as simple as that town hall, which might be new for the employees.We had no idea that our company wanted to do this, and we appreciate it.Lisa Ryan: Yeah. And going into that town hall meeting with only a thank you for sharing. But, yes, as I've seen this. I just had an audience member last week that was doing stay interviews. He decided that he had heard about them and thought he'd start it.But unfortunately, when employees were giving him honest feedback, he fought with them. He tried to justify it, and he admitted in front of a room full of people that he messed up because it should just be, Thank you for sharing, even knowing that some employees are going to use it as an opportunity to vent. There could be a seed of something, an idea you can use going forward. So, no matter what employees say, remember that. Thank you for sharing.Julia Goldstein: Absolutely. It can be a tough thing for all of us to be able to take criticism without getting defensive.Lisa Ryan: Exactly. You have your newest book out, Beyond the Green Team. So what are some of the main takeaways that you cover when it comes to sustainability?Julia Goldstein: It is primarily about communication, and the book is aimed at manufacturing companies. We discussed earlier why manufacturers are the key to making a difference here. So there's a chapter that's about that internal communication piece; why it's crucial and critical to start within your company, and then moving to the external communication because the marketing team is already talking about what you're doing, what the products are, this initiative, that initiative, what are they saying about sustainability?Is there a reason to pause and rethink what you're doing inside? Then make sure that your outside messaging matches. It is a very tricky thing to do. Also, talk about the issue of greenwashing, which has become more of a buzzword. I don't know if you're hearing it where you sit, but what is it?What does that mean? So greenwashing is where a company will brag about its green credential, saying, we are saving the planet because we are packaging your product in a cardboard box instead of a whole bunch of plastic. But it needs to tell the story about some of the other things the company is doing to the detriment of that. So it's overselling those green credentials. Ooh, we better talk about being green and sustainable and eco-friendly. Or here's our new eco-friendly product, and all the details about that and what's behind the scenes is that's five or 10% of their portfolio. What's going on with the other 90%?The trick is to be honest about it. But not open it up so that people say, " Oh, 90% of your products are terrible for the environment. Oh goodness, that's awful. So it's a tricky mix in terms of figuring out what to say when, and again, humility, that being able to admit if you had a misstep in that area without getting defensive, is going to be a critical path forward.Lisa Ryan: So, as we're getting to the end...