Swarfcast

Today’s podcast is the second half of a two part interview with Chris and Brandon Voss, coauthors of the best selling book on business negotiation, Never Split the Difference: Negotiating As If Your Life Depended On It. Scroll down to listen to the podcast. Chris Voss used to be an FBI hostage negotiator. When he retired, he applied the negotiation techniques he learned in law enforcement to the business world. Some of the methods Chris and Brandon teach can seem difficult to execute and counterintuitive, but I can personally vouch for their effectiveness in my own business dealings.   Main Points (3:00) Chris and Brandon talk about why they prefer not to name price first in negotiations. They also explain why they don’t like extreme anchoring (naming an extreme asking price to begin a negotiation). Brandon says that it’s a problem that so many people come into a negotiation and automatically assume the first price is an extreme anchor.  (5:35) Chris says that very often when people ask you to give them a price they are not actually interested in buying. He says that researchers have found that at least 20% of the time people ask you for a price they are only looking for a competitive bid, which he equates to lying in business. He says this percentage is an underestimate because people don’t naturally admit to lying, so you have to use strategies to bring out the truth. (10:40) Brandon gives examples of how to use labeling to get a customer to reveal what they are willing to spend. As explained in part one of the interview, a great strategy to get information is to use labels—verbal observations such as “it seems like,” “it sounds like,” “it looks like,” and “it feels like.” He suggests saying, “It sounds like you haven’t spent that much time thinking about what you would spend on this,” “It sounds like there is a ceiling you don’t want to cross,” or “It sounds like you have a range in mind.” (13:17) Brandon says it is also good to let a counterpart name price first because it  makes that person feel they are in control. He says that when people feel autonomous and in control of what is happening they are more likely to want to make a deal.  (15:10) Chris explains the purpose of asking “no” questions. One of the negotiation techniques Chris and Brandon prescribe is getting other people to say “no” in conversations. He says that people are unfortunately conditioned that the word “no” is a word they don’t want hear in negotiations. People associate it with failure. However, he says research has shown that when people say “no” it actually makes them comfortable and safe and prompts them to take action (see video below). Click here to watch more videos from the interview. (18:40) Noah asks if Trump is a good negotiator. Chris asks jokingly, “Do you want the Trump people to hate us?” Chris brings up Trump’s dealings with North Korea. He says Trump did a spectacular job opening the negotiation with  North Korea—something unprecedented. However, he says that today nobody seems to know where the negations are at. Chris says that Trump is by nature an “assertive” negotiator, similar he and Brandon. He says that assertive negotiating can yield to some early spectacular successes, but people will not want to deal with you long-term if you can’t change from that mode. He says that every negotiator needs to be assertive, but it cannot be the only component in how you operate. (21:35) Brandon and Chris discuss their dislike for the concept of “win-win” solutions. Brandon says the term is associated with compromise in which both parties give up things, leading them to feel unsatisfied. In his experience, deals that people call “win-win” often fall apart. Chris says when someone says “win-win” in a negotiation, they are either a cutthroat negotiator or a naive negotiator. He says if someone calls him to propose a “win-win opportunity,” he will hang up. Unfortunately this subject came up at the very end of the interview, and Chris and Brandon said they could easily give an entire lecture about it because of its complexity. Question: Do you like to haggle when buying a car?

Today’s podcast is part 1 of a two part interview with Chris and Brandon Voss, co-authors of the best selling book on business negotiation, Never Split the Difference, and executives at Black Swan Group, a company offering business negotiation training. Scroll down to listen to the podcast. Never Split the Difference teaches how to approach business negotiations using the same the techniques that Chris Voss learned from decades working as an FBI hostage negotiator. I can vouch for its effectiveness personally, having listened to the book from start to finish 3 years ago. I probably use its principles in our business every day. Main Points (3:45)  Chris and Brandon explain their company, Black Swan Group, which teaches business negotiation. They sum it up as the company that “makes sure you don’t leave money on the table.” They also say that it provides guidance for navigating difficult conversations. (5:35)  Chris talks about working as an FBI hostage negotiator specializing in terrorism. He says that his son Brandon learned a lot about negotiation from a very young age by observing him. He says that Brandon used his skills of “disarming agitated adversaries” to deal with disciplinarians and Vice Principals in high school. After Chris retired from the FBI he taught negotiation in business classes at Harvard and Georgetown. A few years ago he and Brandon cowrote Never Split the Difference, which has become the best selling business negotiation book around the world. (9:00) Chris says that the principles of hostage negotiation work for business negotiations across all cultures. He says that in every business deal something is under siege or threat. (12:25) Brandon explains one of their most important negotiation strategies, mirroring and labeling. He explains that “labeling” refers to a verbal observation in which a person says, “it feels like,” “it sounds like,” “it seems like,” or “it looks like.” A “mirror” means repeating the last few words of the last sentence that someone has just said. These techniques help sound out your counterpart. They give a person new information about how the counterpart sees a situation, but the counterpart stays relaxed because you don’t have to ask questions. Questions can make people feel they are being interrogated. (17:15) Noah brings up his own recent challenge using mirrors and labels to get a machinery rigger down in price. (19:25) Brandon talks about a negotiation technique called an “accusations audit” (see video) that Noah could use to try to get a machinery rigger down in price. The negotiator mentions all of the difficult things his counterpart has had to do to accommodate him. This can neutralize his negative feelings before he has a chance to say them. In the case of Noah’s machinery rigger, he could say to him things like, “I know you have had to do a lot of work already for this job,” “I know you’re the only game in town,” “I know you’ve already tried to get the price down,” and “I bet your sick and tired of having this conversation with everyone you speak to.” Click here to watch more videos from the interview. (24:15) Chris explains price anchoring. He says that most academics say a person should start a negotiation by naming an extreme asking price. However, he discourages this strategy because it can scare customers away and cause one to lose potential deals. Also people don’t know what price their counterparts will start at—perhaps his price is better than they thought. Chris says the majority of the best negotiators get the counterpart to name a price first. When both people are trying to make each other name price first a person can use mirrors and labels to get important information about the price the counterpart has in mind. Question: Do you usually like to name price first in a negotiation?

Today’s guest on the podcast is Taber West, founder of Gravity Worx, the manufacturer of a high performance suspension electric bike, called the E160FS. Scroll down to listen to the podcast When Taber was younger he raced bikes professionally, but as he aged and gained weight he no longer could do the type of cycling he used to enjoy, particularly mountain biking. When he discovered that a high performance e-bike could empower him to ride places he had thought were impossible, he set out to build his own. Main Points (3:50) Taber gives his background. He started out as a junior electrical engineer in the Navy. He has worked at various tech companies such as Unisys and Intel. He worked at Los Alamos National Laboratory (in his home town), where he worked on projects such as constructing super computers, running fiber networks, and various classified projects for United States military and security agencies. This gave him a wide background in fields such as advanced manufacturing, digital systems, and programming. He has three engineering degrees in electrical engineering, complex systems, and software engineering. (5:22) Taber says when he was younger he raced bicycles professionally in triathlons and mountain biking, which he calls “painful and financially ungainful.” He says he liked mountain biking the best, even though mountain bikes back then were primitive and braze welded, with no suspension. He says he has tested just about every mountain bike component over the last 30 years. (6:30) Taber talks about restarting his old bicycle company, Gravity Worx, 6 years ago, focusing on building state of the art carbon fiber mountain bike wheels. He designed a multiple wheel mold and started producing composite wheels and testing them under extreme riding conditions. He wanted to create a mountain bike built to withstand hitting the trails hard or carrying a heavy rider such as himself—Taber says he is 6 feet and weighs 300 pounds. (9:25) Taber says he knew that with the right technology he could build a mountain bike stronger, faster, and better than anything else out there. The problem was that the best technologies which were being used in aerospace and ballistics had not yet been applied to building bicycles. (10:00) Taber shows Noah a cut section of one of his rims, a hollow composite layup in a three piece mold that has no holes in the spokes. (12:00) Taber says that after he engineered his components he had to search for the right machine tool to produce them. (12:50) Taber explains in detail the components for his bikes’ hub shells. The body of the hub shell is forged from a 7075 ingot of aluminum alloy, then heat treated, then machined down. (16:40) Taber talks about the production process for the hub. He says to make the hub at a typical machine shop it would probably require 2 different 5-axis mills and 4 different operations. He discovered that Samsung has multi-axis Swiss-type mills designed for feeding in bar stock that can machine the part in about 9 and a half minutes. He said another option is the INDEX C300 turning center priced around $1million (he estimates), which can make the part in about 4 and a half minutes. (22:30) Taber talks about his prototype rear derailleur, the mechanism that shifts the chain at the rear sprockets (see video). He says his is different from all other rear derailleurs in the world because it’s designed specifically for his mountain bikes and e-bikes. He says an e-bike bike is extra heavy and has to withstand significantly more torc. (23:25) Taber talks about how he has to produce very precise bike components because even a few extra grams can effect performance. (24:25) Taber compares his e-bike’s features with competitors. He says he can get 55 hours of heavy climbing out of a single battery charge. He says part of the reason he can get such long battery life is that his bike weighs 44 and half pounds while a typical e-bike is in the 53-55 pound range. Thus, his bike is lighter, but is built to hold more weight. He says he designs his bikes to climb a hill at a 20% grade over rock. Taber says that his initial prototype bikes have passed 500 miles of riding and 63,000 feet of climbing. Question: What is your experience with e-bikes?  

Our guest on today’s podcast is Ben Cohen, sports writer for the Wall Street Journal and author of the new book, The Hot Hand: The Mystery and Science of Streaks. Scroll down to listen to the podcast. In the book, Ben analyzes many types of hot streaks, from basketball shooting streaks, to investing streaks, even a streak of hit plays by William Shakespeare. Most people have had a moment in their lives where a string of successes have given them the confidence that the next thing they try will also be successful. This book explores whether that belief is actually true. Main Points of the Interview (4:40) Ben gives his background and what inspired him to write The Hot Hand. He says he has always been obsessed with sports, and while at Duke University he got an internship in the sports department of the Wall Street Journal. In 2014 and 2015, Ben wrote some articles about the “Hot Hand” concept, and he thought it could be a neat way to look at a lot of industries beyond basketball. (6:30) Ben says that when he started looking for examples of the Hot Hand, he saw it everywhere. He says we all have felt the Hot Hand at one point in our life and that the Hot Hand applies to all industries. (7:00) Ben defines the Hot Hand as “when success leads to more success.” In basketball, where it has often been studied, it applies to the phenomenon of when a player makes several shots in a row and then it seems like the player has a higher likelihood of making the following shot. He says that this feeling applies to moments in all different professions or activities, and if we take advantage of those moments it can change our lives. He first noticed the feeling personally during a Junior Varsity high school basketball game where he scored 18 points in one quarter, more points than the rest of his entire basketball career put together. (8:50) Ben says that several years ago while researching for his first piece on the Hot Hand he discovered a paper based on 30 years of research by world renown psychologists Gilovich and Tversky, which stated that the Hot Hand does not exist, but is cognitive bias. When the paper came out most people didn’t believe it, including a lot of basketball folk.  Ben Cohen, author of The Hot Hand: The Mystery and Science of Streaks (16:30) Ben says that the Hot Hand seems to be the product of talent, circumstance, and a little bit of luck. One Hot Hand Ben writes about in the book is a string of successful plays by William Shakespeare. During one of the most prolific periods of Shakespeare’s career, he premiered King Lear, Macbeth, and Anthony and Cleopatra in a span that some say was as short as two months. Prior to then he had not come out with a play in two years. Ben says this occurred during a plague year that had killed off much of his competition. Satires starring children had been a trend in theater, but when the plague hit, an adult audience more interested in tragedies became a better market. Ben says that like during Shakespeare’s time, Covid 19 will inspire art movements or industry innovations. One never knows what a catalyst will be for a Hot Hand.  (20:10) Ben discusses a chapter in his book about Raoul Wallenberg, a Swedish businessman and diplomat who saved tens of thousands of Jews in Nazi-occupied Hungary during World War II. (24:35) Ben discusses another part of the book that recounts Steph Curry’s extraordinary game against the Knicks in 2013, in which he scored 54 points and hit 13 3-pointers. He hadn’t ever put on a performance like it prior to that game. After that game the Golden State Warriors encouraged Steph Curry and other players on the team to focus on 3-pointers much more they had previously, breaking conventional basketball wisdom of the time. (30:10) Ben concludes by saying that really smart people have come to different beliefs about whether or not the Hot Hand is real. But, he says how individuals respond when it seems they are getting the Hot Hand is what determines whether it is a force to enable extraordinary feats. Question: Do you believe in the Hot Hand?

On today’s podcast we interviewed Rick Wheeler, owner of O’Malley Manufacturing in St. Petersburg, Florida, a company originally founded in 1910. Scroll down to listen to the podcast. Over the years O’Malley has had a knack for finding niche products to produce such as the Hair Snare, Lint Snare and Bait Bucket, which are all made with robotic injection molding. Rick likes to manufacture with injection molding because it allows him to make his products in-house from start to finish, and to sell them at competitive prices compared to products coming from overseas. Main points of the interview  (3:30)  Rick gives some history of O’Malley Manufacturing, which was started in 1910 as Edward O’Malley Valve Company. Rick’s great aunt married the company’s owner, Tom Reed, and when Reed died, Rick’s grandfather took over the business. After serving as a pilot in the Navy for six years, Rick came to work at the business in 1991. (5:45) When Rick joined the business in 1991, O’Malley’s primary product were faucet and valve reseater kits, which they called Drip Stoppers. The company used Brown & Sharpe screw machines to make cutters and stems.   Rick Wheeler of O’Malley Manufacturing, holding a Bait Bucket (7:30) Rick talks about some of O’Malley’s main products. In 1969, an inventor brought the company a product she had come up with called the Hair Snare. The Hair Snare has a raised screen that typically goes over a bathroom sink drain to catch hair and small objects like jewelry and contact lenses. The inventor had first sought out much larger plumbing suppliers such as BrassCraft to make her product, but they weren’t interested. O’Malley was recommended to the woman by several people because they knew the company from the National Hardware Show and International Home + Housewares Show where it had exhibited for decades. This was the first product the O’Malley produced with injection molding. (10:30) Rick talks about another product from O’Malley called a Lint Snare, which is kind of like the Hair Snare, but instead of preventing hair from going down a bathroom sink drain, it is a filter that prevents laundry lint from going down the drain of a laundry tub. When one of O’Malley’s salesmen brought the product to Rick’s father in 1985, he balked because the product required knitting. Eventually he was convinced the product had potential and bought six knitting machines to make it from start to finish. (13:00) Rick talks about O’Malley’s relationship with the Hair Snare inventor. O’Malley bought the patent from her and paid her a royalty of 2% of gross sales until the patent ran out.  (14:00) Rick explains that his bait bucket can transport 1 to 2 dozen live shrimp to use as fish bait. It needs to have a top to keep water in, but still be has to be easy to open. Rick bought the bait bucket business, which came with the molds and a customer base.  (16:00) Rick talks about O’Malley’s entry into the injection molding business. For the first several years of producing the Hair Snare, O’Malley used contract molders. O’Malley owned a mold, which at the time cost $25,000. Contractors held the mold and made pieces as needed. After several years using contract injection molding companies successfully, O’Malley’s mold was stolen by one of its contractors. After this incident, the company decided to do its injection molding in-house. It purchased its own molding machine along with an integrated robot, and was able to eventually produce parts lights out. (21:20) Rick says he likes the injection molding business because enables him to make products cheaply enough to compete with overseas competitors. He says he prefers this business to precision machining metal parts because he thinks it would be much more labor intensive. He says he doesn’t want to be spending hours in the office quoting lots of jobs and have to employ setup people. Also, he says he likes the process of injection molding. He likes the challenge of understanding the pressures and temperatures, the tonnage of the machines, the clamping and how to adjust the settings of a machine to get his desired part.  (24:40) Rick says much of his success in acquiring products to make comes from good networking. He advises people make products rather than just selling other people’s products. He says that with the right equipment, injection molding provides a lot of possibilities to make products from start to finish. He says he knows many successful entrepreneurs who make their own molds, finding product ideas by searching the internet for popular items. Question: Have you been able to make your own niche product?

Today’s guest on the podcast is Gabriele Oettingen, professor of psychology at NYU and author of the book “Rethinking Positive Thinking: the Science of Motivation.” Contrary to conventional wisdom that asserts “positive thinking is always positive,” Oettingen’s studies have shown that people who embrace only positive thinking as a way to reach their dreams are often the least successful in achieving their goals. Scroll down to listen to the podcast. Gabriele’s strategy for success requires people to identify realistic, specific goals and then identify potential obstacles along the way. She calls it WOOP which stands for Wish, Outcome, Obstacle, Plan. I’ve used the strategy myself and I have to say it’s really worked for me. Main Points (4:10) Gabriele gives her story. She came from the field of behavioral biology, but later switched to psychology because she was interested in the concept of hope. She was interested in how people could keep going when they inherited difficult circumstances. She studied how people’s expectations determine their success. She found that when people had successful experiences in the past, they were often successful in achieving goals. She also found that people who had positive fantasies and daydreams not based on successful past experiences often did not achieve their goals. (6:35) Gabriele defines expectations as judgements of how likely something will happen in the future, based on past experience. For example, she says a business owner with many years of past success will likely be successful in the future. However if a business owner has positive fantasies and daydreams about the business doing well despite having a poor past performance, the business probably will not do well in the future. Gabriele gives another example of a smoker imagining that he can reject a cigarette. If he hasn’t had good experiences trying in the past, he probably will fail.  (8:35) Gabriele says that the general consensus around the world is that “positive thinking is positive” and that positive thinking will lead to more effort and more motivation. However her studies show that the more positively people think about the future the less well they do. The more positively people in weight loss programs fantasize about their success the fewer pounds they lose, while the people who permitted negative thoughts in their minds lose more weight. She said that tests on university students show that the students who fantasize the most positively about their job prospects are the least successful at getting employment when they graduate. This is due to them often studying less and sending out fewer job applications.  (11:15) Gabriele says her research shows that the more people fantasize about having a relationship with someone they have a crush on the less likely they are to have one. Her research also shows that hip replacement patients who imagine their recovery to be the quickest are less successful in recovering than people with more moderate expectations.  (13:20) Gabriele says that fantasies and daydreams hinder success because they cause people to expend less effort to reach their goals. She says her research also shows that the moods of people with positive fantasies and daydreams are worse in the long run than people with less fantasies and daydreams. The daydreamers’ moods were great initially, but in the long run they felt worse because their dreams did not come true. She says the problem is that positive fantasies and daydreams cause people to feel almost as if they have accomplished their ambitions. This takes away their energy. (16:20) Gabriele says that the positive fantasies and daydreams are still important because they stem from people’s needs. They remind us of the voids in our lives we need to fill and give us motivation. If you are in a job you don’t like you start fantasizing about having a different job. If you are in a bad relationship you start fantasizing about being in a different situation. After you know what a problem is, then you can start to find a solution and go in a new direction.  (19:10) Gabriele says the way to energize people so they can accomplish goals is to encourage people to identify the obstacles that hinder their ambitions. First this demonstrates to people they are not yet where they want to be. Then it helps them make a plan of action to get there. She calls this mental contrasting.  (21:42) Gabriele says that imagining the obstacles that stand in the way of accomplishing goals triggers non-concious processes in the brain that cause behavior change.  (22:10) Noah asks Gabriele’s opinion of when people say their belief in God helps them to reach their goals. Gabriele says in desperate circumstances where the obstacle in front of people seems insurmountable or is impossible to identify then thoughts and daydreams might be more useful than mental contrasting, because it at least they can provide hope. But she says in cultures and circumstances in which people have freedom and the ability to chart their own paths mental contrasting is the best option to succeed as well as decide which goals are most sensible to go after. (26:50) Gabriele explains WOOP, a framework used to assist people with implementing mental contrasting. WOOP stands for Wish, Outcome, Obstacle, Plan. The framework helps people formulate ways overcome potential challenges, by utilizing the mindset: “If I meet obstacle (X) then I will do the behavior (Y) in order to overcome it.” The thought process non-consciously makes people behave in a way that enables them to fulfill their wishes. Noah brings up the free WOOP app that assists people with mental contrasting, which he has used many times to accomplish his goals.  (29:15) Gabriele suggests that people go to the www.woopmylife.org to learn about mental contrasting before using the phone app. Noah says that he will do a demonstration of the WOOP app, assisted by Gabriele, in a video on the Today’s Machining World website (to be released shortly). Question: Do you usually think about obstacles when you set a goal?

Today’s guest on the podcast is Jim Regenor, founder of Veritx, a company which helps clients dramatically reduce lead times and increases readiness for military and airline customers with blockchain technology. Scroll down to listen to the podcast. With today’s 3-D printing technology parts can be produced on site so clients don’t need to wait for products to be sent by land or sea. All that needs to be sent is the digital information for how to produce the parts on site. Blockchain insures the digital information is correct. Main Points (3:30) Jim gives background on his company Veritx which he established in August of 2019. He characterizes the company’s product as “a digital parts catalog for regulated industries that reduces long lead times and increases readiness for military and airline customers.”  (4:35) Jim talks about a proof of concept with the Department of Defense where blockchain could reduce the lead time for an F-15 part from 265 days down to 6 hours from order to delivery. He says that the United States military still uses some aircraft from as far back as the 1950s, so being able to deliver spare parts efficiently can be difficult when many of the original aerospace suppliers have gone out of business.  Jim Regenor, founder of Veritx (8:00) Jim gives his background. He spent 31 years as a pilot in the U.S. Air Force. He was on the Security Council for the Bush and Obama Administrations, and he also ran a large logistics operation, with 15 locations in 11 countries across three continents—many of them war zones. He said he was moving roughly 570,000 tons of cargo and about 2 million people a year, and found himself constantly needing spare parts.  (9:25) After he got out of the Air Force, Jim ran the military aftermarket division at a Tier 1 aerospace company called Moog Aircraft Group. The company had acquired a 3-D Printing business in Michigan and realized that 3-D printing would become an enabler for digital 4.0 schema and how industries would interact. This led him to world of blockchain. (11:00) Jim says that 3-D printing coupled with blockchain enables what he calls the fourth modality of logistics. Instead of transporting physical parts by land or sea, digital information to make the parts is sent on the cloud. Then parts are manufactured on site with 3-D printing. Blockchain enables the information to be sent properly. (14:10) Jim characterizes blockchain as a distributed ledger. He gives an example of several people in a room in which one person owes another person 10 dollars. Every person records that 10 dollars is owed in their ledgers. If the person who owes money tries to lie and says he only owes 9 dollars, the people in the room have records to prove he lying. This concept means that information can be sent through a decentralized transparent system and cannot be corrupted. All records are transparent so that there is a consensus. For blockchain applications, sometimes hundreds or thousands of computers keep the ledger. This can be used to establish value for cryptocurrencies such as Bitcoin, but it can also work well for other applications such as logistics because it enables people to track the entire lineage of an asset. (17:20) Jim gives an example of Walmart using blockchain to track the supply chain of its lettuce from harvest to store shelves to combat the E. coli problem last year. (19:00) Jim says that many companies are using blockchain right now and data can be tracked with user interfaces. He says for the supply chain for aerospace blockchain records the entire process, starting with the initial requirements being sent to a designer. Then each stage such as the design of a part, manufacturing, quality control, etc. is recorded individually. Everything is transparent and correct, insuring a good final product. If people realize there is a design flaw, it is easy to go back and find the mistake because each stage has been recorded with blockchain.  For more information about Veritx go to veritx.co or email Jim Regenor at jim@veritx.co. Question: What’s your experience using blockchain?

Our guest on today’s show is Terry Iverson, co-owner of Iverson and Company and author of a new book called Finding America’s Greatest Champion: Building Prosperity Through Manufacturing, Mentoring and the Awesome Responsibility of Parenting. Scroll down to listen to the podcast Terry and his family have been in the machine tool and production business for almost 100 years, specializing in Hardinge equipment. In writing this book, Terry draws upon his vast network of professionals in a variety of businesses to understand how mentorship and apprenticeship can rebuild American manufacturing.  Main Points (4:00) Terry says his book’s main message is that with better mentoring and parenting the United States could fix its problem of the skills gap in manufacturing. (5:15) Terry talks about the origins of his family’s machinery business. In 1925, his grandfather went to work at Hardinge. He started sweeping floors, but soon climbed the ladder in the business because of his engineering acumen. He started his own business in 1931 selling and rebuilding Hardinge machines. Terry’s father joined the business, and his uncles started their own production shop. After spending six years getting his mechanical engineering degree, Terry joined the business about 40 years ago, though he was reluctant at first. (9:25) Terry says he sees his book as a way to give back to the industry that has been so good to him and his family. He says over the span of his career his clients have told him more and more that they can’t find enough skilled people. He hopes that his book helps to change the culture of education in the United States from one that only encourages expensive 4-year colleges that result in horrible student debt. Terry says he credits his own success in life to having lots of great mentors such as teachers, coaches, and family friends. Terry Iverson, author of Finding America’s Greatest Champion: Building Prosperity Through Manufacturing, Mentoring and the Awesome Responsibility of Parenting (11:15) Terry says mentors are valuable because they can use their experience to guide young people, to help them find the best ways to succeed. He says that while there is nothing wrong with college, it is a pity that young people are not also exposed to manufacturing trades. He says that more mentors and parents who are aware of potentially fulfilling and lucrative careers in manufacturing can help change this trend. Terry says that the manufacturing industry in the United States hasn’t advocated enough for itself, whereas in many European countries manufacturing jobs are highly regarded by society. Terry sites a stat that if the U.S. manufacturing economy was ranked among manufacturing economies of other countries it would be ranked 8th in size.  (18:20) Terry says that apprenticeship programs in the United States began disappearing in the late 1980s, but today he is starting to see a comeback. He says part of the reason the apprenticeship programs disappeared was that U.S. companies were thinking only of the short-term bottom line, in contrast to European companies that take a more long-term business strategy. He says in Germany manufacturing companies typically have 10 percent of their workforce as apprentices, meaning a company of 200 workers would have 20 apprentices, etc. He says the German American Chamber of Commerce is working hard to bring back the trend of apprenticeship programs. (21:30) Terry says he hopes that as the manufacturing industry becomes more computerized and automated, that computer savvy young people will be attracted to it.  (24:40) Terry says that young people in Europe know what they are passionate about in their teens. He feels that more internships and programs that expose American young people to a variety of careers could help build a skilled workforce in manufacturing, as well as other fields in the United States.  (29:00) Terry talks about a 17-year-old intern he had at his own business who was interested in engineering. She had an idea for a device that tested for concussion protocol. Terry contacted a friend from high school who was a biomedical engineer who helped her get a pending patent. She went on study engineering at the University of Illinois. (31:20) Terry says to go to Championnow.org for information to buy his book. He is offering a special discount to listeners of Swarfcast. Question: What made you choose a career in manufacturing?  

Our guest on today’s show is Eric Fogg, co-founder and head of machine connectivity at MachineMetrics. MachineMetrics produces a device that connects directly with machine tool PLCs and controls to track realtime and historical data on equipment. Operators use the data to assess how machines are truly performing, which is often quite different from what they perceive. Scroll down to listen to the podcast. Main Points (3:10) Eric explains that MachineMetrics is a machine data connectivity data platform. The company makes a device (he calls an “edge device”) that connects directly to machine controls and sensors of production equipment. The device gathers valuable data on how the machines are performing and sends it to operators to analyze. (4:10) Eric talks about taking machine shop classes in high school. During high school he worked at a lot of different machine shops on nights and weekends and taught himself programming. (7:00) Eric says that MachineMetrics can gather data from all vintages of machine tools, not just CNC machines, though CNC machines provide the most data. He says right now MachineMetrics has a client using its edge device to gather data from a punch press that was manufactured in 1925. He says, “As long as it moves and has electrons flowing through it we can probably get some useful data out of it.” (10:00) Eric says that in college he majored in theology because he wanted to work in the field of corporate ethics. Eventually he started his own machine shop in his mid 20s that specialized in green technology products. Eric Fogg of MachineMetrics (14:00) Eric says that when the 2008 recession hit he started doing more job shop type work with low margins. He eventually closed his company started doing Six Sigma consulting for job shops in Vermont. The experience of analyzing the processes of different shops inspired the idea for MachineMetrics. He says he observed that shops were often making decisions based on a gut feeling rather than based on data. He came up with the idea to pull the data that already was on the machines’ controls to create reports, dashboards and analytics to help machining companies make decisions. (20:25) Eric says the most basic data MachineMetrics tracks is machine utilization—how much machines are running versus how much people think they are running. He says the average perceived utilization of equipment by MachineMetrics’ customers is just under 80%. The actual average is in the high 20 percents to low 30 percents (the numbers are based on active shifts). He says that the numbers can be surprising as various markets differ. For instance, he says for some types of very low volume work (1 or 2 part runs) 15% utilization might be considered world class. He says for high volume shops utilization is often much higher. For instance, he says shops making millions of parts with much thinner margins sometimes have utilization in the 90 percents. He says that no matter what type of shop, clients are usually surprised at their utilization rates. (24:10) Eric gives some examples of how MachineMetrics data uncovered problems that led to low machine utilization. He gives an example of a client who was using cheap 1/4” drill bits on a drill and tapping center. The company calculated it took only 5 minutes to change a drill bit out, so they used cheaper ones with short tool life. The problem was that while operators left to get a new drill bit from the tool crib they got sidetracked and the average time to change the drill bit was actually over 40 minutes. After learning this the owner of the company decided to go out and buy the most expensive drill bit that lasted 10 times longer than those he was using. It was a solution that was much faster and easier to implement then changing the procedure in the shop which could have tons of variables to consider. (27:40) Eric says that MachineMetrics generally does not advise customers how to use the data they collect. He has found that customers usually take the initiative to solve their problems. He says his company is often surprised at the interesting ways that clients utilize the data. (30:15) Eric discusses a phenomenon he sees in CNC shops he calls “cyclecreep.” What happens is that over time people gradually alter they way they run jobs by making tweaks such as changing tools or feed rates which often increases cycle time. The problem is that the manufacturer continues to bill its customer for the original cycle time. Operators see green lights on machines which makes them think everything is running fine but problems are occurring behind the scenes. (35:30) Eric gives an example of a company running the same parts on 20 vertical machining centers that were bought over 10 years. MachineMetrics found that no two machines had the same original cycle time of 40 minutes. He says that some cycle times only differed a few seconds but the delta between fastest machine and the slowest machine was 15 minutes. After seeing this data, in just a week the company was able to adjust the machines to all have a cycle time within a few seconds of each other. (37:25) Eric says it can be difficult for his clients because often MachineMetrics is delivering them bad news. He says that the consistent trend he sees is that the most successful shops have a culture around change. Question: Are the effects of the coronavirus a net plus or a net minus for your machining business?

On today’s podcast we’re delving into a topic that’s been on many people’s minds these days, the coronavirus. Scroll down to listen to the podcast Our guest is automotive supply chain expert Dan Hearsch, Managing Director at AlixPartners. Dan is briefed daily by his associates in China about how people in manufacturing are dealing with the coronavirus. FYI, this interview was conducted one week ago on Feb. 26, 2020. Main Points (2:55) Dan gives his background working in the automotive industry for OEMs, as well as Tier 1 and Tier 2 suppliers. Today he is a consultant, focusing on supply chain and procurement projects. (3:55) Dan says many people have been comparing the coronavirus, also known as Covid-19, to SARS, the last serious epidemic in Asia back in 2003. He says the big difference between the SARS outbreak and the current one is that in 2003, China was roughly only 4% of global GDP, while today China has a much more significant role in the global supply chain and its own internal economy is much larger than it was 17 years ago. (5:30) Dan says one of the hardest things about the coronavirus outbreak is knowing what the local response is going to be. He says that it seems like the quarantine policies in China, Korea, and Italy are the correct response. (6:00) Dan says he’s briefed daily on the latest news in China from his associates in there. The news is based on what they are seeing from the Chinese government and what they are seeing in real time from the companies with whom they work. Daniel Hearsch of AlixPartners (6:55) Dan says he hears there is a decreased incidence of new coronavirus cases and the death numbers seems to be falling, which makes people hopeful that business will get better soon. He says the worst thing to do is to send people back to work too soon because they could get sick again and the quarantine process would have to start over. (7:40) Dan says the Chinese New Year amplified the spread of the coronavirus because of all the people traveling back to their homes in the countryside. However, he said that from a business standpoint the Chinese New Year was helpful because people who buy goods from China were already planning for an eight day shut down. People had planned to have extra material already in transit on the water, but had not planned for further delays. (9:40) Dan says the majority of factories in China that were down have opened up again. He sites a Chinese government survey of 982 enterprises that said 41% had resumed by February 14 and predicts over 80% should be back up and running this month. He says the biggest problems relate to transportation and workforce issues because a significant number of people are quarantined or have trouble traveling. His sources say that Chinese manufacturers in the survey are running at only 30-40% of their potential productivity. The Chinese government is comparing the current electricity usage in various industrial areas to past years to gage productivity. It found that the level of usage was about 57% that it was at this same time of year in 2018 and 2019. (12:15) Dan says that the automotive sector has a very lean supply chain, meaning companies hold very little safety stock, which makes it vulnerable to the decrease in supplier productivity. (16:40) Dan says that some North American manufacturing companies are going shorten their supply chains as China, Korea, and Italy can’t supply enough parts. He says this trend would lend itself to machining processes that are fast to set up. He says capacity shouldn’t be a big problem because the domestic automotive market has been down of late. (18:50) Dan says China has both a supply and a demand problem because many of the domestic customers who buy parts are also closed. This differs from the United States that only has a supply problem because companies are still purchasing goods and consumers are still buying. (20:40) Dan says that many of the large scale supply chain problems caused by the coronavirus are not new. He draws a comparison to the aftermath of the Fukushima nuclear power plant disaster in 2011, which exposed the problems that occur when companies have too many suppliers concentrated in one region and do not have enough relationships with backup suppliers. (23:45) Noah asks if the pharmaceutical supply chain in China has similar issues as automotive. Dan says the problems are probably similar. He says the transportation issues could be significant as suppliers try to catch up on a backlog of shipments, though he predicts the production processes might not be as labor intensive as those of automotive. (27:45) Dan says that the coronavirus is a common type of virus—the same type of virus as the common cold. He says the Covid-19 epidemic is quite contagious and has a high fatality rate of 2.5-3% compared to .05% for typical flu. He says limiting personal contact with other people and washing hands regularly is the best practice to protect oneself against the virus. He says that a lot of people make mistakes such as wearing the wrong type of protective masks and wearing a mask more than one time. (31:20) Dan says if the United States has an outbreak the impact on its economy shouldn’t be as dramatic as China’s. A higher percentage of people have the ability to work remotely while quarantined because a smaller percentage work in factories. Still, he admits an outbreak will still significantly affect the domestic supply chain. (33:30) Dan says out of China’s study of 982 surveyed Chinese companies 42% of those enterprises will run out of cash in the next three months and 10% will run out of cash in one month because they can’t cover their fixed costs. He says it is likely the Chinese government will act as a safety net, though he is not familiar with the bankruptcy laws there. (36:40) Dan says the best case scenario is that the most problematic countries get the Covid-19 epidemic under control and it doesn’t become a global pandemic. He says it is possible that in 4 to 5 months most suppliers will be back up to speed in the problematic countries. (38:25) Dan says the precautionary health measures by governments seem to be the correct plan to deal with the coronavirus epidemic. He says saving people’s lives is more important than keeping factories running, not just for humanitarian reasons, but also for long-term business success. (39:30) Dan says it is vital for manufacturers to set up alternate suppliers as soon as possible to prepare for a pandemic or other supply chain setbacks. Question: Have you noticed supply chain interruptions due to the coronavirus affecting your business?