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The concept of an ESOP to me has always seemed extraordinary yet at the same time a little hard to grasp. E-S-O-P is an acronym for Employee Stock Ownership Plan. Basically it means an employee owned company. Our guest on today’s podcast is Rich Gaffney, Vice President of Commercial Operations at Sentry Equipment, a 100-year-old manufacturing company in Wisconsin that has been employee owned since 1986. Rich and I discussed the business structure of ESOPs and most importantly the profound impact that employee ownership can have on company culture and workforce engagement. Even if you have no desire to make your company an ESOP, this interview will give you some ideas to think about as far as how to get people in your business feeling more empowered and committed. ************* Listen on your favorite podcast app using pod.link.     .   View the podcast at the bottom of this post or on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog   ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights   Noah Graff: Explain the concept of an ESOP. Rich Gaffney: ESOP stands for Employee Stock Ownership Plan. It’s a function of each employee having an ownership stake in the company. It creates a midterm or long-term financial vehicle for employees. It’s a potential retirement entity or real equity and ownership over the outcome and successes of the company, allowing employees to share in those rewards. Noah Graff: ESOPs come in different shapes and sizes, correct? Rich Gaffney: They do come in different shapes and sizes. There are around 6,300 ESOPs in the US, about 14.5 million participants or employee owners. There are other variations that would increase that count. Every ESOP has boundaries and legal guidelines to establish it. Companies have latitude over how they give ownership stake, what that looks like, and percentages. So each one is unique. Noah Graff: Before 1986 Sentry was privately owned? Rich Gaffney: The original owners of Sentry Equipment decided to retire and had no children interested in taking over. Looking at the employee base, there was an incredible amount of craftsmanship and long tenure. The Hensies wanted to leave Sentry Equipment as a legacy to the employees. They established an ESOP and sold the company back to its employees. Most who go the ESOP route through a transition of corporate ownership are usually about leaving a legacy behind. Noah Graff: How does the ESOP business structure influence its company culture? Rich Gaffney: The power of an ESOP is unleashed when you align the culture with the company’s mission. In an ESOP, there’s a connection and transparency that brings that culture forward. It creates and promotes a continual improvement style of engagement. Our president uses an analogy: If you go out to eat, would you rather be served by a waiter or the owner of the restaurant? Nine times out of 10, you’d say the owner because they have an invested stake in the success. In our case, everybody has some stake in ownership and success. Plugging into the culture and focusing on the ESOP aspect pulls engagement forward, along with productivity and quality. It brings ideas forward and brings people together around a common goal. We see the business from different perspectives. For example, we get continual improvement ideas from our welding department. They feel empowered to speak up because they know their suggestions can improve the company and serve customers better, resulting in rewards for everyone. Noah Graff: It sounds like it organically brings out employee engagement. Rich Gaffney: I think it organically comes out. People come to the table wanting to take pieces of lean manufacturing or other methodologies and apply what they think would best improve our environment. There’s an organic pull on that, tied to sharing in the company’s success. When companies transition to lean manufacturing, it’s often the executive team pushing it down through the organization. In our ESOP, we’re getting ideas pushed up to the executive team. We’re getting organic ideas from more aspects of the business than you would normally. Noah Graff: Is it culture shock for people when they join the company from other places? Rich Gaffney: I think so. As a new employee, you’re told about the ESOP and culture, and you think the honeymoon will end. But the reality is, it doesn’t end because we truly try to deliver on that message. We want engagement from our employees. We do pulse surveying and have engagement at all levels of executive management. The unusual part for new folks is how a second-shift assembler can approach the president with an improvement idea and actually get listened to. We have quarterly meetings where this kind of interaction happens. Noah Graff: What if an employee retires? How does that work with how they cash out? Rich Gaffney: In our world, if you retire from the company at actual retirement age, you get your name on a board here. We have a CEO board. That stands for Certified-Employee-Owner. Your name and years of service are etched into a glass wall in the factory. It’s a proud moment for folks. For the payout, you get the value of your ESOP plan in shares and percentage over a five-year period. Noah Graff: Before the interview you mentioned there was a machinist who was a millionaire when he retired. How did he acquire that much wealth? Rich Gaffney: It’s simple math. He worked here for a number of years. A percentage of his income over those years accumulated in the stock. He continued to accumulate through that willed submission every year, and he also gained because our stock price grew a lot. We had significant growth in our stock through the early to mid-2000s. We’ve had more than one shop person retire a millionaire just based on their ESOP alone, not including any 401k or other personal planning they had. Noah Graff: What is one of the biggest challenges for an ESOP? Rich Gaffney: The most difficult part is managing the communication. I feel a strong sense of responsibility to communicate concisely and succinctly with all employee owners. We have about 200 employees, and I’m responsible for 200 families putting food on their table and helping them achieve the lifestyle they want. I owe them accurate communication about what’s happening in the business. They have questions, and I owe them answers. The difficult part is we don’t always have the answer in front of us. Noah Graff: In an ESOP, you have that obligation more than in other companies? Rich Gaffney: That’s right. If we’re really living the culture of the ESOP, we have to do these things.  

My guest on today’s show is Kris Fugate, President of Revolution Machine Works, a prominent rotary transfer machine rebuilder, specializing in Hydromats. Hydromats can seem strange and overwhelming to those unfamiliar with them. Some say they their circular shape with 12 or 16 work stations reminds them of a UFO, and the machines can crank out complex turned parts like nothing else out there. Listen on your favorite podcast app using pod.link.     .   View the podcast on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog   ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights How Rotary Transfers Work Kris started the interview explaining how rotary transfer machines, particularly Hydromats, function and why they are such unique productive machines. How is it possible that parts which require several multi-spindle screw machines, or have cycle times of 2 minutes on a CNC lathe, can run complete on a Hydromat in 20 seconds? Most Hydromats are configured in a rotary dial-like shape. Unlike on a screw machine, in which the bar of material rotates and the tools are stationary, on a Hydromat the bar remains stationary and the tools rotate. Each station (unit) of the transfer machine functions like a CNC lathe or CNC mill. Units can do work such as turning, threading, milling etc. Each station machines one operation and then transfers the part to the next station for the next operation.  Advantages of Hydromats over other Turning Machines Hydromats have individual feeds and speeds in each station, so they aren’t held captive to the slowest operation, such as on an Acme-Gridley or other traditional multi-spindle screw machine. They usually come equipped with an inverting unit, which removes a part from a collet, rotates it and places it back in the collet so it can be machined from the other side. This feature makes Hydromats ideal for machining double sided fittings.  Unlike a lot of other rotary transfer machines, which are set up with the stations vertically arranged in the trunnion style that resembles a Ferris wheel, most Hydromats are set up horizontally, more like a carousel. This enables modular units that can be easily swapped, making easy, quick changeovers.  Also, Hydromats are designed with a hirth ring coupling, which enables them to maintain tight tolerances part after part.  Revolution Machine Works Kris’s company, Revolution Machine Works, services and sells refurbished and rebuilt turnkey Hydromats, and also supplies Hydromat spare parts. They often do entire overhauls on the machines, stripping them down to the casting. They rebuild units, and equip the machines with new Fanuc controls. While the Hydromats that Revolution provides are the non-CNC hydraulic generation, the company sometimes equips the machines with individual CNC units made by the Italian rotary transfer machine company DM2. Revolution Machine Works also distributes new DM2 machines in the U.S. Hydromats are Tough Business Since I went into the used machinery business over a decade ago, I’ve spent a lot of time learning about Hydromat rotary transfer machines. I’ve traveled to Germany, Italy, Switzerland and Norway to find them because you can make a nice buck if you find the right customer. Still, it’s always seemed like we had to have 10 interested customers to sell one Hydromat. It can get frustrating watching the machines sit in the Graff-Pinkert warehouse for years. Why do customers hesitate to buy these machines that can crank out great parts by the millions. Perhaps its because they often cost a few hundred thousand dollars, and then a bunch more money to set up. Kris could relate to my experience. A rebuilt, turnkey Hydromat, has double or triple the price tag of one that Graff-Pinkert would sell, and the customers expect considerable service.  In the interview, Kris pointed out a lot of the other challenges Hydromat customers face. The machines take up a lot of floor space—perhaps large enough to fit three CNC machines. They require at least one expert to keep them running correctly, and it can take six months to a year to train a Hydromat operator. Kris says he and colleagues often joke that they picked the hardest way to make money. We both agreed that it’s much easier to sell a Hydromat to someone who already has them. They have units on the shelf, expertise, comfort, and enough work for the machines.  Yet Kris says his work is most rewarding when he is able to get a new client into the Hydromat business. A Hydromat can be a game changer for a company in the high volume parts business, yet a purchase comes with significant risk. Years ago, he ran Hydromats in his family’s machining company D & S Machine Pts. He says he can still remember how it felt when the company paid over a million dollars to buy its first new Hydromat, its biggest capital investment at the time. I can tell that being able to put himself in the shoes of his customers is helpful for Kris to sell machines, but more importantly, it’s clear that it gives him a sense of purpose. Question: Do you prefer to buy, used, rebuilt, or brand new machine tools?

Using savings to buy a 20-year-old Swiss machine that’s been sitting idle for year is a gamble. Buying one to start a machining company without any customers yet or a place to put the machine means really going ALL IN. Today’s podcast is Part II of my interview with Dulio Arellano, founder of Premier Swiss in Addison, Illinois. We’re continuing Dulio’s story, discussing how he transitioned from working in job shops to becoming one of Tornos USA’s top technicians, and then how he rolled the dice, purchasing a used Tornos DECO 10 to start his own machining company. If you haven’t listened to Part I (Episode 218) I suggest you check that one out first. Listen on your favorite podcast app using pod.link.     .   View the podcast on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog   ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights   Working On the Shop Floor Noah Graff: Why do you feel it’s important for you to still work alongside your people on the shop floor? Dulio Arellano: There are a lot of benefits to being involved in the shop, even if you could step back and just concentrate on other things like sales and office-related tasks for running the business. This is not only for the owner but also for companies that have managers, lead persons, or people with jobs in the office. The attitude of the people is much different if you come out there and work with them. In my point of view, it’s kind of like, okay, I’m the owner, and I care about the shop more than anybody here. That’s why I’m going out there and talking to the people.  If you go out there in the shop and talk to the people, try to make their jobs easier. When people see that things are running, they change their attitude. I have a couple of guys that work here who have told me that they’re very proud to work here because, as an owner, you might see me at my desk for a full day working on sales and trying to close deals. But the next day, I might be underneath the machine, full of oil, changing the motor and helping this guy trying to do something or figuring things out so they run well.   Advice for Starting a Machining Business Noah Graff: Do you have any advice for people out there thinking about starting a machining business? Dulio Arellano: I think that for the people who are thinking of starting a business, they just have to keep in mind that if they really want it, it’s going to happen, but it’s going to require a lot of patience and a lot of hard work. It’s not easy, and it doesn’t happen fast. And if you don’t enjoy the work, if you don’t do it because you like the kind of work, if you don’t like the pressure or being in that position solving problems, maybe it’s not for you.    Being Flexible to Change Directions in Life Noah Graff: How did you expect your life to turn out until now versus how it actually did? Dulio Arellano: Well, I had learned from starting the business and from taking the job at Tornos that I wasn’t expecting to take, that you always have to have goals. But you also have to be open to what opportunity presents and be willing to switch directions at any minute. That could be a slight change or a complete change to another direction if the right opportunity presents itself. I don’t know what the future holds. I don’t know how the market is going to be, what field we’re going to go into, if I’m going to continue expanding, if I’m going to reduce the amount of equipment I have, or if I’m going to upgrade the equipment. I just know that I have my goal on where I want to be, but at the end of the day, I think that things happen and push you in a certain direction where you must go.  That’s how it’s been in the last six years that I’ve been in business. I plan certain things, and things go in a different direction. You have to change, make things work, or take the opportunity and change your plans.    

Have you ever wondered what it takes to manufacture luxury watches that cost tens of thousands of dollars? This is the episode to find out! Last week I reconnected with Josh Shapiro to tell him about a used Willemin 408MT Graff-Pinkert had for sale. He told me that he was extremely excited for his new line of watches coming out that he has been working on for years. He is finally going to be producing the entire movement in his watches. Please have a listen to one of our most popular interviews on the show!   Our guest on the podcast today is a machinist, entrepreneur, and master craftsman. Josh Shapiro is the owner and founder of JN Shapiro Watches, one of the few high-end luxury wristwatch makers in the United States. His latest line of watches will be priced at $70,000 dollars and up. His operation uses the most state of the art CNC Swiss and turn mills, as well as manual turning technology developed as far back as the 1500s! Listen to the podcast or read the highlights to learn how Josh is producing watches like nobody else has in United States for last 50 years. You can also view the podcast in video form on our YouTube Channel.     Highlights from the Interview Noah Graff: First, explain your company, JN Shapiro. Josh Shapiro: We make high-end luxury wristwatches. We’re one of the very, very few companies in the United States that manufacture watches. We started out just making the faces of the watches. Our expertise is with something called Guilloche, which is doing engraved geometric shapes on the faces of watches, and that’s done using non-motorized, very old school machines. They’re really special. From there we moved on to making our own cases. Now we are very close to having our first prototype completely in-house movement done.   Graff: How much do the watches cost? The price was $30,000 to $40,000 depending on the case material. The new series that we’re going to launch soon is $70,000 up to about $85,000, depending on material and customization. JN Shapiro Watch So they’re very expensive, but we put in about 400 to 500 hours on each timepiece. So much time goes into making each one of those watches.    Graff: How did you get into watchmaking? Shapiro: I just had a love of old things, so I ended up becoming a history major and then becoming a teacher. I walked into a local watch store here in Los Angeles called Feldmar when I was about 25, and just fell in love with watches. One of the first watches I saw was a Skeleton Chronograph watch. There was just so much going on there. It was so fascinating to me. Watches are mechanical. Watches are a really beautiful thing. It’s wearable jewelry that’s functional. It’s fascinating how the gear train flows together. How the escapement functions, the pendulum, just the whole interplay of all the pieces. While I was a teacher and principal, I was doing watchmaking as a hobby. Then around 2015, I purchased a really nice set of Guilloche, or engine turning machines, and that allowed me to do professional level work. I started producing watch faces, watch styles for other watchmakers, and started thinking in the back of my head of launching my own brand. Around 2018, I launched my first series, and that’s when I started really reducing my role as a principal, until finally leaving completely two years ago.   Graff: Explain engine turning Shapiro: The concept is there are cams made out of bronze on the spindle of the machine, and those cams are rocking against the stop. As the spindle is turning, it’s creating these geometric patterns. Then you can phase the cam, independent of the workpiece, and you can create these really beautiful geometric shapes. It’s an old art. Engine turning machines have been around since the time that lathes came into existence, around 1500. I have a number of them. The first one I bought, I scraped together every cent I had to afford it. Then, then I ended up selling that set of machines and buying another set of machines. The second set of machines cost me around $30,000. I didn’t have that much money, so I had to sell my 67 Mustang Fastback to afford it.   Graff: How many staff do you employ for making the watches? Shapiro: It’s me plus seven. I’ve taught everyone in the company how to do engine turning. I have one trained CNC machinist. I have another watchmaker who is turned into a CNC machinist. I have three other watchmakers who are doing various watchmaking tasks and manual machining tasks. I have one person who’s a trained jeweler, who has pursued a whole career in hand engraving, and one admin. So everyone has a really great skillset and really enjoys making things.    Graff: Tell me about the various machines in your shop. Shapiro: My first big CNC machine, which we still have, is a Haas office mill. That’s actually a great watchmaking machine, and there’s a lot of people in Switzerland that have these Haas office mills because they’re really, really accurate.  Then we got a Hardinge, HLV, which is like the premier tool room lathe. And then we picked up the, the (Citizen) L20 from you that was to practice on before we got our new shiny L12, which is getting here Wednesday.  The big machine that we got this year was a Kern Evo. Kern makes the most accurate milling machines on the planet. It’s a sub-micron machine. We can’t measure sub-micron here in our shop, but it’s nice to know that we’re working with the machine that accurate, that precise. It’s the first Kern Evo used for watchmaking in the US, which is really exciting.   JN Shapiro Watch Parts Graff: Explain the watch movement Shapiro: A movement is the guts of a mechanical watch. It’s everything inside of it, just like a car engine and transmission. There are some [watch] brands in the United States that do cases and dials, and some purchase everything from Switzerland. They’re just designed in the United States, like Shinola watches. You know they’re importing a good chunk of all their stuff. They got in trouble with the FTC for saying it was American made.  Slowly more is being done here. Our watch that we’re working on is the first time since the sixties that all the parts, all the little parts, everything are made in the United States.  The old series, the Infinity series, that we sold out on, we were making the case, the hands and the dial. So not the movement of the watch. That was according to plan. I did the Infinity Series to have the funding to grow the company enough to be able to make the movement. Some people make the mistake of trying to do the movement, which is the most difficult thing, right off the bat. And if it’s not a critical success, then they’re out of business.   Graff: Why do people buy expensive watches? Shapiro: I guess the best example is if you look at the car world. You can buy a Toyota or Honda, and it’ll get you from point A to B, and you can also buy McLaren and it’ll get you from point A to B. From the outside observer, they say, okay, the McLaren looks cooler and rich people buy it. But then you get into the engine. You know the car goes fast—very, very fast. There’s a ton of engineering that goes into the car to make it be able to do that. The quality of the parts that are in the car are produced at a much higher level than in a car that’s mass produced. It’s the same thing for a watch. It tells the time, but the quality and time that we put into each and every one of the parts is astronomic. [A watch] is something that’ll last hundreds of years. It’s a piece of art, and it’s functional art that you can wear on your wrist. Art is the spice of life. It’s not something that’s necessary for you to eat, or live. But it’s what makes our civilization special beyond just being a toy for wealthy people.  When someone sees a work of art it’s inspiring, and that’s what we do with our watches. They’re more than just time telling devices. Question: What is your favorite watch?

My guest on today’s show immigrated to the United States from Mexico at 18 years old, went to tech school, worked his way up in job shops, became one of the top technicians at Tornos, and then founded his own successful job shop. Dulio Arellano is the founder of Premier Swiss, a Tornos Swiss screw machine shop in Addison, Illinois. He is one of the most knowledgeable people I know about Tornos Swiss machines throughout the world, and whenever we talk he always has fascinating insight about entrepreneurship in the machining business. He’s really good at all the stuff I’m always working on like negotiation, networking, and finding deals on used equipment. He’s also a heck of serendipity creator. I actually had him on the show four years ago, but we’re both significantly better at our crafts now, and his business has grown a lot since the time of the last interview. Listen on your favorite podcast app using pod.link.     .   View the podcast on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog   ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights Dulio Arellano, was born in Mexico and immigrated to the United States at age 18 to join his father who had been working there since the 1970s. After working at various jobs when he first arrived, Dulio’s brother persuaded him to take a class on CNC machining at a community college. When he saw the machine make a part, Dulio knew he had found his passion. Despite initial challenges in finding employment due to his lack of experience, Dulio persevered and gained worked at several shops and progressed from being an operator to a setup person, continually learning and setting new goals for himself. Then he met the president of Swiss machine manufacturer Tornos at IMTS. This connection led to a job offer at Tornos, where Dulio became the company’s ace technician for Deco Swiss-type lathes and MultiSwiss CNC multi-spindle machines. In 2018 Dulio seized an opportunity to purchase a used Deco 10 lathe from one of his clients and started his own contract machining business Premier Swiss. Today the company has nine employees, a variety of Tornos Swiss machines and produces components for industries such as hydraulics, automotive, defense, aerospace, medical, and electronics. Excerpt from Part I of the Interview: Noah Graff: Do you feel a lot of operators are close minded about various brands and models of machines because they’re different from the ones they’ve been trained on? From my point of view as a machinery dealer it seems like driving a Honda vs. a Ford. Dulio Arellano: That’s exactly right. There are still people who say that maybe Ford is better than Chevy. These cars will take you places, just like the machines. The machine doesn’t make the operator. The operator makes the machine make amazing things. They all have issues, limitations, and one thing that you’re not going to like about them. Noah Graff: And most of them have something special about them, particularly Tornos. Dulio Arellano: Yeah, they all have something that is going to make things better. It’s just a matter of what you think is better and what’s going to work for what you’re trying to do. Noah Graff: Why do you prefer Tornos to other Swiss machines? Dulio Arellano: For a lot of reasons, not only because I believe that they’re better machines. I think they’re great machines, and they offer a lot of good benefits. They’re made thinking of the operator, the final person who’s going to spend the most time in front of the machine. In the Deco line, all your tools get preset outside the machine, making it easy right there because you are not getting your hands into the machine as much. You preset your tools, put them in, and there is no touch. Noah Graff: And there’s so much room inside the machine. Dulio Arellano: That, and the layout of the machine. For example, you’ve probably seen MultiSwiss (Tornos’s latest CNC multi-spindle). Do you see how the door opens? I mean, you can literally walk in the machine. The Swiss Nano is another example. How much more accessibility do you want for a machine that small? The complete cabin opens.   Question: What would be your ideal job working in a machine shop? Tune in for Part II in two weeks for Dulio’s philosophy when hiring inexperienced workers and why he likes to work on the shop floor.  

This week on Swarfcast, we’re sharing an interview we originally did back in 2020 with Paul Van Metre, Co-Founder of ProShop ERP. During our discussion, Paul shares a lot of valuable and timeless information that can help your shop run more efficiently. Since we did the interview, he has also started his own podcast, called Machine Shop Mastery: https://machineshopmastery.com/about/. We invite you to give it a listen! *** On today’s show we’re talking about how to set up machine tools efficiently. Our guest is Paul Van Metre, co-founder of ProShop ERP. ProShop produces a comprehensive web-based and totally paperless shop management system for small to medium manufacturing companies. Paul says that using a few best practices, guided by ProShop’s management system, can reduce a machine setup time up to 50%. Scroll down to listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts or your favorite app. Main Points Paul shares his background. He grew up in New York and studied mechanical engineering in college. He says he found it dry, so he began looking for something more hands on. He found a program in Washington State that was heavily involved in the Formula SAE competition, which he fell in love with. He and his teammates decided to start a machine shop together right out of college. (3:10) Paul says that for their machine shop’s first three years (in late 1990s) the company used Excel to make its job routers and travelers. As it added more machines, it put a computer next to each one. (5:15) Paul explains that the idea for his company’s proprietary shop management system came out of desperation and need. As the company grew, introducing more machines and employees, Excel was not keeping up. His team researched shop management software in the old school Thomas Register books. (6:25) Paul says that none of ERP software firms his company looked at offered products designed specifically for managing the shop floor. The products also required paper printouts, which Paul and his team felt was a step backward from what they were already doing using Excel. Ultimately, they decided to hire a software designer to design a custom ERP system for the company. Paul says it took a little less than a year to develop workable software to handle the company’s needs. (7:35) Paul says it took about eight years before the company’s ERP software received outside attention. During the economic slowdown in 2008, a production manager from his company’s biggest customer came to the shop to work one day a week. When he tried using the ProShop ERP he liked it so much that he told his own company about it. (10:50) The customer convinced Paul’s company to let it use ProShop ERP. Paul says that within six months of using the system his customer’s productivity was boosted so much it was able to free up three full time employees, and it drastically decreased its lead-times on various jobs. Then the customer asked if Paul’s company would allow some of its vendors to use ProShop ERP. Paul and his team then realized the opportunity to start a new business selling their ERP, which they founded in 2016. (12:30) Paul says he misses the joy of the production process of running a machine shop, but he says providing ProShop to help other companies succeed is what he enjoys the most. (15:45) Paul says that by using a few best practices a shop can save up to 50% of machine setup time. (17:45) Paul says proper setup process starts when a machine has already been torn down from its previous setup. The teardown should be part of the machine’s previous job’s processes. (18:46) Paul says the first thing to think about when starting a machine setup is to have all of the materials ready for the job at the machine—tooling, instructions, and rich media such as videos and photos to guide the setup person. This is because if a setup person has to leave the machine to get something that she forgot she can run into a multitude of distractions in the shop which significantly delay getting back to work on a machine.  Paul says one of the worst obstacles in slowing down setup time is when the shop doesn’t even have a necessary tools or materials on site. Then the setup process loses days while the company waits for materials to be shipped in. (23:00) Paul says it’s very important for a setup person to have detailed work instructions for a job ready (SEE VIDEO BELOW). He says that ProShop ERP’s paperless system makes it easy for people to have all the important info about a job at the machine at all times (again, so they don’t have to get up and leave the machine). Having paperless instructions also makes it smooth to set up jobs that were already run on that machine in the past because the setup person doesn’t have to find an old printout. The instructions from the old job are ready on a computer next to the machine and may have important updates from the last time the job was run. Having organized instructions at a machine that are easily accessible enables a different person to set up a machine than the previous one. Paul says that ProShop ERP has plans to have software integrated right on machine tools in the future.(24:45) Paul says ProShop ERP also helps with cutting time on the inspection step of a setup. It sets up processes for a setup person to do her own inspection on a part so the part looks good before it is sent to the Quality department. When the part goes to the Quality department there are notes for the quality technicians to pay attention to. (29:45) Paul says another important part of every setup is continuous improvement on a part. One of the key features of ProShop ERP is that it allows machinists to document process improving ideas, flag their planning department, create action items, and assign tasks to save even more time. It’s all in one place so that communication is simplified and efficient. (31:40) Paul says one of the most interesting things he learned last week was that 6% of the forests on the West Coast have burned this year within the last few weeks, which is nearly 20 times more acreage than last year. (34:05) Paul says a key takeaway is that setup is very logical and doesn’t require specialized software if you have key systems in place. He believes that a little upfront work will have huge ROI on your time on the back end of the process. (35:15) Question: What aspect of work do you wish you were more organized for? For more information on ProShop ERP, visit: https://www.proshoperp.com/.

Do you ever wonder how I make a living buying and selling old iron? Sometimes Graff-Pinkert’s used machinery business boggles our own minds too. But we have some tricks of the trade that make it possible for me to pay my mortgage, and on today’s podcast I’m going to share a few of them with you. We’re running an episode from the Job Shop Show podcast, where I was interviewed last year. Host, Jay Jacobs, and I talked about a lot of fun topics, such as what to watch for when you’re buying used machinery, negotiation tactics, and of course, how to create serendipity. If you like this interview I recommend you check out the interview I did with Jay in episodes 196 and 197, as well as other episodes on the Job Shop Show. Listen on your favorite podcast app using pod.link.     .   View the podcast on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s ad for Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights Jay Jacobs: When I used to consider buying used equipment, I must admit I had a lot of fear. Fear of overpaying, fear of buying a lemon, or fear that the machine doesn’t work correctly and I have no one around to help me. As opposed to buying a new machine that’s under warranty.  Noah Graff: First of all, we much prefer selling a used machine to somebody who already has that model or has something very similar. Because unless it’s a Wickman or Davenport, or maybe an ACME multi-spindle, Graff-Pinkert probably is not going to be able to support the machine. If there is something fundamentally wrong with a machine we sell, we will do what’s necessary to make the situation right, even if that means taking a machine back. As for used machines not working properly, my advice to people is always go and inspect. Spend the $2,000 to go see the machine or hire somebody to inspect the machine for you.  If it’s an older machine, I suggest that you already own that type of machine or that you have someone really experienced to maintain it and operate it. Also, it’s important to research which machines are going to have the best support from the OEM and which machines have spare parts most readily available. Some models and brands are going to be a lot better than others. Ask around before you spend a bunch of money on a used machine.   Jay: How do you know if you’ve overpaid for a machine? You buy something and the next day you see the same thing and it’s 75% of the price you paid and you feel like a schmuck. Noah: Well, that’s partly just dealing with yourself. After you buy the machine, you just have to ask yourself, “How much money am I going to make with this machine over the next decade?”  I beat myself up all the time after I finish deals, wondering if I could have paid a few thousand dollars less or made a few thousand dollars more. But that’s counterproductive. That’s just ego. What you should be thinking about is if this is a good deal that will make you money longterm.    Jay: How do I know that I got the right price? That I’m getting a fair price. Noah: You and I have both read the negotiation book, Never Split the Difference. So I know we both hate the word “fair.” Everyone has a different opinion of what “fair” means. But, as far as getting a “good price.” Do some research. Call a bunch of dealers and get quotes on similar machines and then compare them. Also, always ask around about the people you’re buying the machines from if you’re not familiar with them. We’ve been cheated out of a lot of money on past deals, and it likely would have been prevented if we had just asked some other dealers about the seller, or even just googled the seller.  There was a deal in Japan a few years back in which we thought we were being clever by not telling other people about our great source of cheap machines. Then we lost a few hundred thousand dollars on machines that never came. When we finally asked some other dealers about the seller, a Taiwanese dealer called JS Precision, we found out that they were notorious and the owner had gone to jail. Do research. It’s one of the most important parts of buying machinery, whether it’s new or used. People often ask me, which brand of machine they should buy? And I say that most of them are pretty good. Some things are personal preference. This brand has one feature. This brand has another feature.  But I usually advise people to find out which machines the most shops around them have. That’s important if you later need help or resources. Also, ask other shops which brands have the best service in your area. If you check those things, you’re probably going to be OK with your purchase, at least for a while. Questions:  What’s one of the greatest deals you’ve ever made? What’s one of the worst deals you’ve made?

Pasta machines operate a lot like cam screw machines, Antonio Adiletta told me when I interviewed him for this week’s podcast. Antonio is co-owner of Arcobaleno and GAM Precision in Lancaster, Pennsylvania. After growing up in Italy, Antonio moved to Canada and then eventually emigrated to the United States with his wife and business partner, Maja. He has manufactured, sold, and serviced fresh pasta making machines for 26 years, and for the last decade, he has simultaneously run a CNC machine shop. Listen on your favorite podcast app using pod.link.     .   View the podcast on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights When Antonio started his career in manufacturing at a young age in Como, Italy, he apprenticed at a company that produced fresh pasta machines. For folks unfamiliar with fresh pasta, not all pasta comes as dry noodles in a box. Fresh pasta is soft and looks like dough. When restaurants boast that they serve “homemade pasta” they’re talking about fresh pasta. Often fresh pasta noodles are formed with an extrusion process, which is great for producing tubular shapes, like rigatoni, spaghetti, or penne. The other main method for producing fresh pasta noodles is the lamination process (rolled process), which is used for flat noodles like pappardelle and fettuccini. When I asked Antonio to tell me his favorite pasta noodle, he explained that choosing the right pasta depends on the marriage between the specific pasta noodle and the sauce. For tomato sauce, he likes spaghetti because of its thin diameter. For meat sauce, he says gnocchi or short rigatoni (mezze maniche) are ideal counterparts. As an apprentice in Italy, Antonio set up and serviced industrial pasta machines weighing as much as 5,000 pounds. Often he worked on machines that made tortellini and ravioli because those machines required more fine tuning than those making simpler noodles. Decades later, when Antonio bought his machining company, GAM Precision, he realized that Brown & Sharpe screw machines operate using the same principles as tortellini machines. Like operating a Brown & Sharpe, in which a cam indexes the turret, in a tortellini machine a cam indexes the stuffing or moves the filling injector. Antonio and Maja Adiletta, owners of Arcobaleno and GAM Precision Antonio eventually moved to Canada where the Italian pasta machine company that employed him had opened a distribution office. He worked there several years setting up and servicing machines. In 1995, he started his own company, which built industrial fresh pasta machines in-house. In 2002, Antonio and his wife moved their business to the United States. At first they continued to build their own line of machines. However, after a while, they decided that business model was too labor intensive, so they went back to distributing machines from a supplier in Italy. In 2012, Antonio and Maja purchased GAM Precision to diversify their business. It seemed like a good fit because they already owned some CNC equipment and had experience in manufacturing. Within a decade, they have modernized GAM from a cam screw machine shop to a highly automated CNC job shop, featuring some of the most powerful Citizen Swiss CNCs on the market. Pasta Extruder + Mixer from Arcobaleno Antonio says in the United States Arcobaleno has no competitors who can match its service in the industrial pasta machine space. However, the pasta machine business is challenging because unlike precision parts customers, who consistently demand more product, pasta machine customers often don’t need to buy new machines for many years because they are so durable. This means the company has to constantly look for new customers. At the end of the interview, Antonio walked around his showroom to explain various industrial pasta machines in his product line. He also showed me some colorful consumer models sitting under a Christmas tree. He told me about the challenges of making gluten free pasta—“because the gluten is really like a glue, that holds it together.” We compared the lighter gnocchi made in southern Italy to that of northern Italy composed of a much higher ratio of potato to flour. He preached the importance of salting the water abundantly before cooking pasta—enough to make it taste like sea water. Antonio knows that it’s the little details that produce perfection. Question: What’s your favorite pasta dish?

In honor of this weekend’s PMPA National Technical Conference, we’re resharing a podcast we did last year with Elliott May, engineer at BME in Port Huron, Michigan. BME builds original custom attachments for cam multi-spindles. They also rebuild Acme-Gridley screw machines. Elliott and I talked about a lot of fascinating things in this interview. How to keep old mechanical beasts relevant, getting young people into machining, and what it’s like to work closely everyday with your dad—who’s also the boss. Listen on your favorite podcast app using pod.link.     .   View the podcast on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog   ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Main Points Custom Attachments Elliott says that customers come to BME when they want to make a part on a cam screw machine but can’t figure out how to make it happen. The company offers an extensive line of proprietary attachments such air operated pickoff assemblies, rotary recess attachments, and synchronized slotting/milling attachments.  Elliott’s father, Brett, started BME 15 years ago. Nine years ago, Elliott started working at the company at age 14. His first job was cutting steel bars with a bandsaw. Later he worked in shipping and receiving, and then graduated to assembling attachments for multi-spindles. After studying engineering for a few years he began working in tandem with his father engineering attachments. Generally they are tasked with tweaking attachments already in their product line to suit the jobs of specific customers. A few times a year, they are called upon to engineer more novel devices, when a customer’s job calls for something special that they haven’t invented yet. Elliott says his father, Brett, is the “idea guy.” Brett analyzes what he wants to accomplish, then Elliott puts the idea down on paper (often CAD). They both are constantly putting their heads together to solve problems. It’s not uncommon for the two to stand at several whiteboards for long periods of time, brainstorming various drawings, trying to work out a solution. Elliott says they have a good chemistry at work, and over the years his role has changed as his knowledge and skills have grown. He admits that when he was younger and less experienced he may have been too overconfident in his ideas and he had to be put in his place. But nowadays, it sounds like he is genuinely challenging his dad in the engineering room. Acme Rebuilding  As a used machinery dealer myself, selling old cam multi-spindles, I grilled Elliott on a lot of the same questions we grapple with at Graff-Pinkert, our family business. I asked him if rebuilding old multi-spindles from the ground up, particularly Acmes, was a good business to be in. Graff-Pinkert still refurbishes some cam multi-spindles such as Wickmans and Davenports, but the work we do is much less comprehensive than that of BME. Also, we stay away from doing a lot of work on Acmes. The parts for Acmes can be very expensive, and the Acme rebuilding process is extremely labor intensive. For a rebuilt Acme, BME charges several hundred thousand dollars. The price depends a lot on what kind of turnkey the customer requires, if any. Elliott says the rebuilding and attachment businesses compliment each other. Often the rebuilt machines come equipped with BME’s proprietary attachments. He says he believes the cam multi-spindle business has a significant future because the machines are often still the best option for high volume jobs, assuming companies have the personnel to run them. Elliott May, Engineer at BME Young People in Machining  I asked Elliott why it’s a struggle to get young people to go into manufacturing and an even greater struggle to get them to run old multi-spindles. He says manufacturing has to shake off its bad reputation from the past, as having a top-down style of management that doesn’t care about the needs of employees. He suggests that if manufacturing employees could count on a clean, pleasant work environment, and felt supported and heard by management, more people would want to go into the field.  Working with His Dad I was very curious to get Elliott’s perspective about working closely with his father, as I also work with my father. I asked him if he felt like he was in a strange position as someone who is not the boss, but also not a normal employee either. It’s a position that I’ve often analyzed for over a decade.  Despite being only 23, Elliott says he has the advantage of having the longest tenure at BME of all its employees. He also says because of his experience and confidence in his ability, he earns the respect of his coworkers. I remarked to him during the interview that he often referred to his dad in the third person as “Brett,” rather than “my dad.” He says it’s a useful way to draw less attention to himself as the boss’s son, even if everybody knows he is. I personally have seldom used this strategy because referring to my dad as “Lloyd” just feels strange. But I admit that I sometimes refer to him as “the boss,” or some other euphemism, when I’m talking about him at work. It was Brett’s idea for me to ask Elliott to be on the podcast. I could genuinely feel his enthusiasm about the idea when he suggested it to me over the phone. I joked to him that it seemed like he was really “kvelling” about his son excelling in the business. He easily inferred the meaning of my Yiddish.  After interviewing both Brett and Elliott, it’s clear to me that both men share a passion for the nuts and bolts, and working together. Question: What’s something important you learned from your father?

I’m dealing with a customer right now who seems interested in some CNC machines Graff-Pinkert has for sale. They told me they needed this type of machine ASAP! And these machines are RARE! They even said they had a big job for the machines already and they are on the “verge of pulling the trigger any day now.” But then they stopped returning my phone calls. They’re ghosting me, and my crock brain is getting the best of me. I know these kinds of scenarios have happened to most of you listening to this, either in your professional life or your personal life. And no matter how successful you are, you have to be very strong mentally to deal with this problem in the right way. As machinery dealers buying and selling equipment all over the world, this happens to us at Graff-Pinkert, constantly. Today, I’m going to tell you how I deal with customers like the one I just mentioned, people who stop returning my calls or seem to be just stringing me along. So the next time it happens to you, you won’t go crazy and hopefully you’ll make the deal in the end. Listen on your favorite podcast app using pod.link.     .   View the podcast on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog   ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights As I just mentioned, right now I’m working on a deal for some expensive CNC machines. It’s a significant deal. Not the biggest one Graff-Pinkert has ever had, but it’s up there. It seemed like they really wanted the machines. We worked with this customer for different deal a little while back, so I think they like us and trust us. I went back and forth with the customer for a month. Closing the deal seemed to be getting nearer. But for the last few weeks, they’ve stopped being available when I call or text. They are GHOSTING me. I’m frustrated. I’ve put a lot of time and energy and thought into this deal. I like to think that I’m a great person who someone would want to talk to. Yet they don’t even have the decency to communicate with me, to tell me yes, no, or maybe.  Enough venting.  It’s time to snap myself out of this crap and explain how I deal with situations like this. Let’s break this down to a typical ghosting scenario You had a nice back and forth communication going for a little while, and things seemed to be progressing in a good way. Then all of a sudden, your customer isn’t available when you call and doesn’t call you back. They also stop returning your texts and emails. Let’s be real here, if this has been going on more than a week, it’s not a great sign. But it still doesn’t mean the deal is dead. If a customer showed significant interest once upon a time, the game is not necessarily over. Don’t take their silence personally. The first thing to remember when you’re being ghosted is don’t take it personally. Taking things personally when people don’t get back to me has historically been a weakness of mine. I’ve been ghosted by people I’ve known for years who I felt I had a great relationship with. I’ve been ghosted repeatedly by my old best friend, and it used to hurt me and piss me off, but I still appreciate him as a friend, so I stopped taking it personally. If I can deal with my friend of 36 years seemingly falling off the face of the earth, I should be able to deal with less important people I haven’t known that long who aren’t calling me back. Recognize your fear of the unknown. Maybe the worst part of getting ghosted is dealing with the unknown. Humans are naturally tortured by fear of loss. It often feels worse than actually losing. Fear of loss, AKA death, protected us in the wild for billions of years. We plead with the heavens. Why can’t they just say no if they don’t want to work with me? If they just say no, the fear of loss will be gone, the torture will be gone. I will at least know where I stand, and I can move forward with my business and my life.  This is true. Getting told “no” can be a beautiful thing, and I’m going to talk about that in a bit. Why you might be getting ghosted In order to stay sane and prevent yourself from doing something stupid when you get ghosted you need to understand why the person might be ghosting you. The number one reason in my opinion why people aren’t getting back to you about your big important deal—they just don’t care as much about it at this moment as you do. It’s possible the opportunity you’re providing is fantastic and the other person could be interested. But it’s just not at the top of their mind right now. Maybe they’re distracted by personal stuff like a family member who got sick or they’re sick. Or, they’re on vacation. Maybe something else is going on with their business that’s just a bigger deal than your deal—at this very moment. It would be nice if people had the courtesy to just tell me that they’re deflected with something else. After all, a text or an email takes 30 seconds. It’s something I think I’d do, but not everybody is that courteous. So don’t worry about that. Just stay mindful that a lack of communication might have nothing to do with you. Another significant reason people ghost you is that they don’t know what to say to you. They’re having trouble making a decision. Maybe they’ve been offered an alternative to what you’re selling and they don’t know which one to choose.  Maybe they’re embarrassed about their indecision because that they’re not sure they have enough money to pay for your product. That happens a lot to us, dealing with both startups and big companies. Many people are uncomfortable saying “I don’t know what I want to do,” or “I’m not ready yet to make a purchase.”  Also, your customer might be calculating that it would be poor strategy to tell you that they’re indecisive.  Stay mindful of those possibilities. It can take a long time before people are ready to make a deal. My dad says that deals are like fruit. Sometimes you just have to wait for them to ripen. We’ve waited years for single deals to finally break. You have to keep things in perspective. Another thing that can help when you’ve been ghosted is to remind yourself to keep perspective about this deal. This BIG deal. Is it really that big in the scope of your life? When I’m getting stressed out by a deal or other problems I encounter in life, I think about what the great negotiator, Jim Camp, wrote in his book, Start with NO. He says that all you really NEED in your life is food, air, and your loved ones. Everything else is just stuff you want. Always have multiple deals going on simultaneously It’s important to make sure to never let yourself be consumed by one deal—no matter how big or important it seems. One way I do that is by keeping a lot of other interesting deals going on at the same time. If you have other good things going for you, you’ll be less consumed by the person stringing you along. Better yet, you’re going feel less needy, which will make you happier and more confident.  You will also be less likely to call people too many times when you’ve been ghosted. When you call a customer too many times, even when they are truly interested, you come across as needy and you lose negotiating power if the deal does happen. But if you have a lot other deals going for you, when your ghost wakes up you’ll have a chip on your shoulder when you finally talk. You’ll approach the conversation knowing that YOU have value. And your customer will believe that you have value because they called YOU. Use “no” questions. Besides being mindful of the reasons why a person could be ghosting you, what else can you do? How can we wake up this ghost and wake them up in a good way that makes a deal more likely to happen? You need to use “no” questions. “No” questions are questions designed to get someone to respond to you with a “no” rather than a “yes.” Why are “no” questions helpful? Psychology studies have shown that people have a much easier time saying “no” than “yes.” It’s as if people are abused animals whose guard automatically goes up if they sense you want them to say “yes.” The reason for this is because it implies you’re trying to get something from them.“No” questions are super useful in a negotiation because they make you seem much less threatening. In the case of contacting a customer, using “no” questions make it more likely they will pick up the phone and that you will come across as less needy.  How do you do it? Whenever you contact anyone in a professional context, after you introduce yourself, always ask, “Is it a BAD time to talk?” Contrast that question with, “Is it a good time to talk?” When you ask if it’s a “good time” you’re asking FOR something. You’re asking for their time. You’re asking for the most scarce resource any of us have. That’s going to increase the possibility the person who answers phone is annoyed by your call. You also seem needy and low status as you’re begging someone to grant you their time.  Back to the person who’s ghosting you.  If you send someone a text message asking if it’s a BAD time to talk, first of all, they will appreciate you being mindful that they have things to do. Then, many people will think to themselves, “Hmm, well, I guess it’s not a horrible time to talk,” and they will respond. Or, they will say, “Actually it is a bad time. I’m at a meeting, I’m at funeral, I’m in Ireland.” But at least they will say something to you rather than staying silent. There’s another power “no” questions have when you’re trying to wake up a ghost. They can create a fear of loss for the person you’re trying to talk to. When you text or email someone, “Are you no longer interested in my product or service?” if they ARE actually interested, it might make them nervous that you could give up on them if they don’t reply back.  Or, maybe your “no” questions will just make the ghost feel more comfortable telling you they’re not interested, which is disappointing but at least you can get on with your life. There will be other deals. And hopefully, most of them will be with people who don’t ghost you. If your “no” question attempts are failing you I’ve got something extra in my the arsenal.  It’s what I call the “nuclear bomb.” It’s the last resort after you’re tortured for at least a month by a customer. It’s for a deal that seemed so promising, before the customer’s silence frustrated you and vexed you to the point where you’re ready to lay it all on the line to find out whether or not the deal is truly dead. You send the ghost a one sentence email. In it, you have a subject line that says, “Have you given up on this project?” Put that same line in the message. No “Hello.” No “best regards.” Just that one line. I’ve done it more times than I wish. Nine times out of ten they write back. In my memory, it usually resulted in them saying that they were still trying to make a decision, but they just didn’t know what they were going to do.  Whatever they answer, it’s almost always a relief because at least they communicated with you. Hopefully by that point you’re no longer obsessed with the deal anyway because you have others going at the same time. Remember these lessons. If a customer ghosts you don’t take it personally. Keep every deal in perspective in the scheme of what truly matters in your life. Be mindful of the reasons why your customer might be silent, because they still might be interested, and it’s counter productive to let deals stress you out. Have lots of opportunities going on at the same time, to keep you sane, make you less needy, and because that’s the way to run a successful business anyway. Finally, use “no” questions—both to prevent a customer from ghosting you, or to wake them up in way that doesn’t make you come across as needy. Don’t give up too early, and don’t blame yourself for a result that might be out of your control.