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| Title | Pub. Date | Duration | |
|---|---|---|---|
| Dematic: Deidre Cusack | 22 oct. 2022 | 00:38:52 | |
Deidre Cusack of Dematic shares key lessons from business mentors, and how she sees automation and customer behavior evolving supply chain.
Danny:
– Well hello and welcome to today’s IndustrialSage Executive Series. I’m Danny Gonzales, and today I’m joined by Dee Cusack who is the chief technology officer at Dematic. Dee, thank you so much for joining me today on the Executive Series. Dee:– Happy to be here. Thanks for inviting me. Danny:– Well the pleasure’s all mine here. I’m very excited. For the audience who’s watching, we had a very lively pre-recorded discussion that we’re going to wrap in, and I’m excited to get into it. For those who are unfamiliar with Dematic right now, who’s Dematic, and what do you guys do? Dee:– Dematic is part of the KION Group. Dematic has actually been in existence for 203 years, and we are essentially the engine that goes behind ecommerce. We do supply chain automation, started in the early years with simple machines like conveyors and racking and so forth. Today we really are a very complex solution provider, full integrator in the supply chain automation space with obviously a big impact on software and robotics and all the latest technology. That’s what we do. Danny:– Excellent. Well ecommerce has done nothing but absolutely exploded. It was a huge growth trend before this thing called Covid came along, but then certainly afterwards it’s just been this massive explosion. I’m sure that we’re going to get into some more of the insights and different things that are happening in the industry with that a little later on in the episode. Right now I would love to get to know a little bit more about you. I’d like to know more about Dee. Dee, tell me, how did you get into this space? Take me back. Is this something that you said, “Hey,” —maybe when you were a kid? “I want to go into supply chain; I want to get into the technology space.” How did this all come about? Dee:– I’d love to say that I had this vision when I was four, but that would be stretching it a little bit. Danny:– You were six. Okay, I got it. Dee:– No, but I started my career in R&D. I have a couple of engineering degrees, and I’ve always been interested in how to apply technology into markets, and particularly market niches to help a business grow in a rapid and profitable way. I started my career in R&D. I then went into business development, and then more on managing entire businesses, P&Ls that were global for a variety of different markets. I did that for about 20 years and decided to come back to my roots a little bit more. A friend of mine, a colleague of mine that I used to work with called me up and said, “Look, there’s this wonderful company that I’m working with called Dematic; we’d love for you to come in and look at some of the opportunities.” And so the opportunity to go and lead the technology in a meaningful way, particularly with the software that the company had and to really develop a strategy to help the company grow in a sustainable way but also bring our solutions to the next level was really compelling for me. As I started to learn more about the company and the industry, I started to get more and more excited about it. And just coincidentally, you said ecommerce exploding, I joined Dematic just about the time that the lockdown started with Covid. I can tell you, it’s been an exciting ride, really trying to keep up with the pace of the market but also the changing demands in the marketplace since being part of Dematic. I just can’t say enough good things about the industry, the company, and some of the path forward and what’s coming ahead. Danny:– Wow, it’s fascinating that you jumped on right before Covid. What a time to jump into a company like Dematic at that time because we know that trends were clearly pushing towards ecommerce and the need for automation, robotics, AI; all this technology was coming in. There was a need for it and a clear growth trend, but then certainly thereafter, I mean, nuts. It just went crazy. So lockdowns were in March; you started in February, March-ish? Dee:– I started in March; that’s right. Danny:– Oh, my gosh. Dee:– Just about the time that the lockdown started so as you said, a lot of the trends were present before Covid, but what happened with our customer base was that everything got accelerated. The need for, how do you work? Everyone was putting demand on ecommerce, and people were working remotely, so we had to figure out how to do a lot of things remotely that we used to do in person, at the same time enabling new capabilities for our customers so that they could then service their customers. It was a very challenging but very fun time to be part of the business. You had to be very agile, very nimble in terms of your thinking. I mentioned earlier, Dematic is 203 years old. We’ve been doing certain pieces of the business for a long time, but it was a very conservative business. Now all of a sudden you interject this crisis, and now people need to apply their thinking in a slightly different way. It was really exciting to see it come together. Danny:– Absolutely. Well, and slightly, and then in other areas completely radically different. As you mentioned, it was interesting; internally from an organizational standpoint, having that thinking shifted, and you mentioned–the whole work from home idea and how do we transition that? But at the same time, in an industry where your customers are—how do we shift that for them as well, and then also oh, by the way, I think the numbers were saying in 2020, ecommerce growing by 40%. You have segments that have never really done this, or they were starting to pilot programs, and then said, “We have to accelerate this.” Exhilarating to say the least. Dee:– It was; it was. But I would say one of the cornerstones of Dematic has always been an entrepreneurial spirit, so I think everyone approached it in the way of, well, how can we make it work? China is still closed to a lot of travel externally, so a lot of things that were normal ways of doing business, we had to find different ways to accomplish the same criteria. How do you lend expertise? Now you do it virtually. Now, people start seeing on the screen the same picture, but through virtual goggles. It was just a different way of experiencing it. It taught everyone how to be a little bit more creative in terms of how do you accomplish a task? Danny:– Absolutely. I love how you said the entrepreneurial spirit. That’s something that’s not—when you talk about bigger organizations, corporations they tend to trend opposite, actually the exact opposite of that. I think that’s definitely a great silver lining of something we’ve learned, but that was already part of the culture to begin with. There was a lot of insights and innovations that came because of that that was already instilled in the culture. I don’t want to dwell too far too long on the whole Covid change and everything. I’d like to learn a little bit more, too, about you and your background. One of the questions that I love hearing answers from executives is just the—throughout your career journey you’ve obviously seen a lot. We were just talking about, obviously, some big changes. Throughout your journey, typically there’s a lot of people that have big influences on your career, both positive and negative. We’re going to focus on the positive side. Could you share a story of somebody that has made a measurable impact in your career? I know there’s a lot, probably. Maybe if there’s just one, I’ll even say two that come to mind that you can share with me. Dee:– Sure. So many people have had an impact on me in a positive way, and I tend personally to always look at an experience and try to learn something from it. Even just sitting in a conference room, I’ll look at who’s effective and who’s not effective with what they’re doing, and I’ll try to learn from the people that are effective, but also from the people that aren’t effective. I think as this is going on, and I replay it later on–– which is, how can I apply some of those same learnings to me? One person that I’ll call out—and I could call out 10 easily without thinking about it—was a leader of mine. I worked for him while I was at ABB. I worked for him for a number of years. He was masterful at not only the way that he interacted with customers, but the way that he interacted with people in general. If you met him, you would say he just enjoys people, and he’s so effective at building teams and building common alignment around the people. He was such a positive influence with me, and one day I said to him, “Not everyone has your same gift to go up and to compel an audience with such ease. It just comes so naturally to you, and you’re just so good at it.” And he said to me, “Yeah, what you didn’t see is last night in my hotel room, I was practicing for six hours.” He basically taught me through a number of different lessons as I learned with him watching how he really helped align his teams. These were all pretty strong leaders that all had very unique ideas, but what he taught me was, this doesn’t happen—nobody gets there by accident. What it takes is hard work and alignment and really getting the right people and understanding how they can work effectively together. It’s a lesson that I’ve learned through playing sports as a kid and so forth. He really brought it home and applied it in also a corporate environment where, again, there are people who are good at it; he was masterful at it. He had a tremendous—and he also was the most giving person. I had a women’s network that I had started at ABB, and I had asked him to participate in this network a couple of times, being the only man then in the room. He was always so gracious with his time and his mentoring that, again, it was all about the people. It teaches you that your objectives are one thing, but you really need to invest in the people. I always watched him a lot and tried to apply that to my own self. Am I meeting the same standard? Would people say the same? Danny:– That’s fascinating. I love that, especially how when you were talking about how—maybe on the outside you said that it came across as just his ease of being able to instill that vision and out there, but yet he was saying, yeah, but here’s really what was going on over here. I think that’s actually really critically important, especially in today’s day and age. When you look at things like LinkedIn, for example. When you look at social, and you can say, that’s a Facebook and Instagram and TikTok thing, the same thing is happening on LinkedIn, on professional platforms. There’s these images that are being projected of people. There was really an interesting stat to connect this; the conversation’s going to have an interesting connection here. When we look at the pandemic and shifts that have happened, there was an interesting stat talking about mental health with executives. There was a very high number, actually, of executives that were struggling, and I think that because of LinkedIn and some of these different areas, we have to project that, oh, everything is great, and it’s amazing. You lose sight of, that’s what you’re seeing over here, but actually this is what’s going on behind the scenes. It’s not something that you just automatically turn on. You have to work at it. I think that’s interesting when you’re talking–hey, look, I was practicing this. I was going over this. This isn’t stuff that can happen overnight, and I think we all know this. But I think that there is this—sometimes you see different things, and you’re like, oh, my gosh. This person is doing this or that. The reality of it is to build teams, to build greatness, it’s sort of slow and steady. It takes, like you mentioned, hard work. Dee:– It does, and I think while people all work hard, it’s also getting that right—having a good team. You can be the best at what you are, but if you don’t have a good team it doesn’t matter because you get to a certain point in your career or in sports or whatever it is that you’re doing. You get to a certain point, and it no longer becomes about what you can do. It’s a collective. You can’t scale, so you have to be able to build that infrastructure and have those people empowered so that they too can build their infrastructures, and then that’s when everything can then blossom. Before that, it’s just little bits of sunlight coming in. You really get the whole spectrum when everything comes together and is aligned. Danny:– Absolutely. Oh, 100%. Outside of the hard work and making this alignment, what’s one of the—there’s a lot of things that you try to put into play with what you’ve experienced with him. Is there another concrete example of something that you try to implement in your leadership? Dee:– The other thing with him in particular was he was very bullish on, “The customer always has to be front and center.” For you to be a good leader, you need to have a significant amount of customer engagement because that teaches you not only what that customer and the market needs, but it also teaches you how to be humble. It teaches you how to listen. It teaches you how to then report back into your greater organization a pulse on what’s going on and the priorities that you need to have. I’ve often thought about him as I’m coaching and mentoring younger people in the organization. My guidance is very similar to his. It doesn’t matter if you want to pick sales or business development or some kind of service, but something that you do should have a customer component in it as you’re building your career because it’s such an important perspective to make sure that you always have as you’re conducting your business. Danny:– Absolutely, and you see this. There’s a lot of this going on right now for as long as business has been around, but even in the material handling and supply chain space you see this a lot. There’s a ton of money being poured in from Silicon Valley. You were talking about a lot of solutions. There’s a lot of challenges, and a lot of companies are coming in saying, “Let’s try to solve this.” We’ve seen a lot when you talk to product development teams and whatnot that there’s an excitement around the technology and all this stuff that’s happening, and you start creating solutions on something. You think, hey, this is great. Look what we can do. But you go back and say, well, what’s the voice of the customer? Is there an actual addressable need that we’re solving? Is this something that they say, yeah, this is a big problem, and we need help with this? A lot of times it’s, hey, we think this is great that we can do this. Then there’s a massive misalignment because we’re not, like you mentioned, we’re not getting close to the customer and listening and getting feedback. Dee:– Absolutely right. It’s even connecting with that customer when you’re talking about some of these new players in the supply chain automation space because there are a lot. The market grew so quickly during Covid that it became a very attractive market. I think there are things to learn from that as well. In fact, some of the lessons I take out of that even today are: if you were looking at the market with a fresh set of eyes, would you solve the problem differently? If you sit back and think about it, it can make you think a little bit differently about maybe some of your own blind spots, having been in the market for a long time. That connection with not only where customers’ issues are today and really listening hard to that for the here and now, but thinking about it, are those your issues today? What are your issues going to be a year and a half from now? If we sit back and we think about it collectively together, what does that look like? Because maybe part of how we can solve today also positions you for a year and a half from now or two years from now because a lot of these customers—not all of them, but a lot of them—have significant capital expenditures that they’re going to be making. If we can think about it in the way of, how do you phase this in so what you’re spending today isn’t wasteful when you think about where you need to be years from now. How can you integrate all of that thinking? That’s where, personally, I get really excited to think about things in that dimension because to me, that provides my customer value, but it also gives my R&D teams a road map that is cohesive over a longer period of time so we can think about learning along the way, but also elevating and transforming the way that the industry is operating today. Danny:– Oh, absolutely, and I love how you were talking about—especially I think we can talk a little bit about some of these challenges that are going on and then things that we’re seeing going out from now because certainly over the last two years one of the biggest challenges was that things have been changing so rapidly when you look at okay, ecommerce just exploded. Then trying to forecast anything was crazy. Supply chain disruptions, and from a retail perspective right now the story is that there’s too much inventory because we had to put all these orders in ahead of time, and demand is skyrocketing. Then oh, now we have inflation and oh, consumers are coming down. Now we’re sitting on all this. What do we do? It just seems like things are way out of whack. Automation’s exploding; do we continue to do that? I heard a story about Amazon coming in, and they’re starting to slow down on some of their automation investment going in there. What are some of these short-term, and then bigger, these long-term challenges that you’re seeing? Dee:– I think with the market—I don’t have the crystal ball, but from everything— Danny:– I was hoping to have the crystal ball. Dee:– I know, but I left that over there. From everything that I can see, the market is inherently strong. We are going through what I would say is a short-term correction of some sort. I think you hit it on the head with the supply chain challenges that there are and the inflation being what it is. I think when you look across most of the market, it’s harder for our customers, typical Dematic customers, to make their ROIs work because the cost of materials is up. It’s hard to get labor. The complexities, the timelines have expanded. You do see some companies taking a bit of a pause to say, is this sure enough that I want to continue on or not? In general, I don’t see the labor loosening up a tremendous—we’re still going to have labor shortages. We’re still going to have ecommerce being a major influence. And consumers haven’t stopped wanting their products in, if not a day, in hours, and in some markets it’s 15 minutes that they want— Danny:– Wow, 15 minutes? That I didn’t know. Dee:– I think those demands are here to stay. When I order something off of whatever website it is, if they say, well you can have it in three days, three days used to be fantastic. Three days, now I’m like, I’ll go somewhere else. Danny:– What is going on? Dee:– Exactly. What all of that does is say, look, the need for automation and in particular more of an emphasis on software is ever-increasing in the market. I don’t think that’s going to go away. I think as companies now are in a point where they’re looking at their ROIs a little bit more closely, they’re looking at their inventory a little bit more closely, I personally think that the way that we’re going to solve that is for not only increased visibility across a particular enterprise’s network, if you will, of locations, whether it be warehouses or retail store or whatever, across their whole network of operations, it’s not only having the visibility but it’s also being able to impact the supply chain. I think of it in terms of, today everything goes in sequence. It starts with the supplier; then it goes here; then it goes here; then it goes here. If you can have enough connectivity, then you can break the sequence and be non-linear, like take that linear network right now and go non-linear, then you can take a lot of waste out of the supply chain, not only in terms of building footprints but in time, in gas, in number of trucks on the road. It really does start to impact things, and that’s where I start to get really excited. I think the need for that, what I just described, a couple years from now you’re going to be sitting down saying, how did we ever operate without that kind of visibility and that kind of awareness because you won’t be able to hit the customer demand if you don’t have it. I think that piece of the market will grow much faster than even automating the manual warehouses because today only 20% of the warehouses are automated across the globe. When you think of it in those terms, yes you have the big giants like Amazon that are very automated, but the vast majority of warehouses today are not automated. The available market is very, very large. Danny:– Yeah, and I’m not sure if I’ve heard that stat about warehousing. I know certainly when we talk about smart manufacturing, for example, which is not exactly identified with that, but it’s still 100% part of the supply chain there. Similar stories there, and there’s big moves to digitization as we move into that. One question I’m curious about in your mind. When we look at total optimization from the supply chain standpoint, a true end-to-end visibility, what does that look like, and how do we get there? To really distill it down, is it like an ERP on steroids, if you will, that has demand forecast, and you have all your tier one, tier two, three, all of those suppliers and all of that connected into that? What is that for you? Dee:– I don’t know if you saw or not, but we just signed a strategic partnership recently with Google Cloud. Danny:– Yes. Dee:– In fact, one of the reasons why we were so keen to sign that strategic partnership with them and them with us is that we share a common vision for what that end-to-end supply chain looks like. I know it’s a term that people throw around a lot, but really having a digital twin of the network in my mind is really important. I don’t think that any one company is going to solve that by themselves. To me, it’s a platform that many people can put their data up onto the platform. Then that data gets used in different ways to help customers solve their issues that they have because they’re going to have issues every day. The optimization is going to have to happen every day. Even if you boil it down to a particular warehouse, I see that those warehouses are going to have to be adaptive in terms of how the automation happens because today you may be processing a certain mix of goods. If you don’t have an adaptive system today, all of a sudden you get unsynced. You have all this automation equipment that’s set up for a particular combination of goods going in and a particular combination of goods going out. In the future, wouldn’t it be nice, and probably essential, that that system adapts itself to the extent that it can so that when you—oh, well I now have to ship. Think about it in terms of, we had a large customer that bought a system from us pre-Covid. They said, “80% of what we process in this very large automated location is going to go to our retail stores.” We said, “Okay.” Well the average number of items per transaction then are about a dozen, 5 to 15 number. When Covid hit, that whole way of going to market switched for them. Then ecommerce became a much bigger channel than retail was. Now all of a sudden people are ordering one or two at a time. The way that the whole system was sized and the capability of the system shifted overnight just based on the way that the order profile demands were coming through. That doesn’t even change what they were buying. But if you just think about that one change, all of a sudden everything got tipped on its head. Well if you allowed your software to be more adaptive and could use things like robotics and mobile robotics in your solutions, well now all of a sudden you might be able to adapt without making large capital expenditures. You might be able to adapt more readily for the variations that you have in your business, and it would all be—if you tried to do it yourself or a person managing that plant couldn’t keep up with the number of computations and look at the possibilities. That can only be done if you start to apply AI and RL to your systems. Danny:– Absolutely. Obviously we know, big lesson learned, and there’s a lot of lessons. I think you touched on it a little bit before–– just the resiliency piece in terms of flexibility and, like you mentioned, being able to go from larger orders, smaller orders. I think the term micro-fulfillment comes to play. From warehousing, and you look at retail or grocers and ecomm, it’s a blend now. It’s turned into, the final mile is a mixture of a warehouse to a traditional brick-and-mortar where customers come in and interact. That now is really changing a lot of people too, present company included. Big behavioral change there. I can’t tell you the last time—I didn’t really walk into stores too much before, but now you need to go to the grocery store to get something unless you make that order, and you just pick it up: “I just saved a ton of time.” I don’t think we’re going back from that. Dee:– I don’t think we’re going back from that either. That’s why I said, the market might be doing a little bit of a correction right now, but I think the long term is secure. The long term has a growth rate that I think is more sustainable, too. A market can’t grow at 40-some-odd percent, year on year. Danny:– No, certainly not. And to clarify, when you were talking about looking at the market, are you talking specifically in the automation and warehousing space, or are you going more macro? Dee:– A little bit more macro, I think. The market overall is continuing to grow, but still in mind of what is automation, what is happening in the supply chain. Danny:– Right. I think the future is bright, and it’s very exciting as we continue to go. I think there’s a lot, to be honest, that’s been—there’s a lot of new things that are going to come at us that we haven’t seen as a result of Covid. I think there’s a lot of things that, as we start seeing demand shift and forecasts and when we look at people reshoring and near-shoring, I think there’s still a lot that we’re going to see down the track. I think that resiliency and that flexibility is going to be just imperative for organizations going forward. But I think that companies like Dematic, and there’s a lot of other players out there doing a lot of different things in many different areas. It’s exciting to see that innovation happen, and not just from an R&D perspective, but also from an actual implementation I think is fascinating to me. Dee:– I couldn’t agree with you more, and I think the future—what I think Covid did to a lot of industries—supply chain automation included—is really challenge some of the business cases that people were using ahead of time. When you think about some of the technologies that have been available for some time, how can you reapply them into different spaces? The core technologies weren’t developed overnight. Those technologies have been viable for a period of time. We’ve just now learned, as a community, how to apply some of those technologies to solve some of the problems of today. I think when we do that and we look at, oh, now we’re much more resilient than we were before because we had to make some of these adjustments that we couldn’t justify necessarily from an ROI previous to Covid, now all of a sudden we say, “Aren’t we better off now because now we have this level of resiliency?” I think that kind of thinking will continue a little bit too. I think there are a number of people that were in leadership positions that had never been in any kind of a downturn before or have any challenges on a very wide level. Certainly Covid being global was very disruptive, obviously, in a lot of ways. But it gave people a chance to think about things in a slightly different way. Now all of a sudden it was, let’s take this from a couple different perspectives. I think it made all of us more resilient, certainly the whole work from home. Just think about what that did to allow everyone across the globe to think about, how do you show up at work? It’s a different way than they had been showing up at work probably across the board for quite some time. Danny:– Absolutely, and I think we’re going to continue to see some of this. Maybe not at the rapid pace that we saw the last two years. Hopefully not anyways, but I think we will definitely see that. Dee, I have thoroughly enjoyed our conversation, and we could probably go on for another, I’d say two or three hours, easy because this is fascinating to me. But you’ve got a lot going on; we’ve got a lot going on, so we’ll have to wrap and maybe do a follow-up here. As we wrap, I’d love to give you the final word. What would you like to leave our audience with? Dee:– Well thanks very much, and I appreciate the time today and have thoroughly enjoyed it. I would love to come back and be a guest at a future time. I’ll just leave you with this. If you have any interest, please go to dematic.com and browse around the website, and please contact us if you have any questions or want more information. Danny:– Excellent. Well Dee, again, thank you so much for your time. I know you’re incredibly busy, and we’re just very thankful for your time with us and sharing your insights and your story as well. Dee:– Great, thanks so much. Danny:– Alright, thanks. Well that wraps up today’s IndustrialSage Executive Series. Great episode. I have lots of notes here, lots and lots of notes, and hopefully you do as well. So thank you for watching or listening if you are on one of the podcasts. Listen, if you are not subscribed, I highly recommend you go to IndustrialSage.com and subscribe so you don’t miss great insights like this and get a pulse on what’s going on in the industry. Maybe it’s directly related to what you are doing. Maybe it’s tangential, but there’s a lot of changes happening, a lot of innovation, and this can help keep your finger on the pulse of where things are going. So that’s all I got for you today. Thank you so much. I’ll be back next week with another episode on IndustrialSage.
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| ThruWave: Pieter Krynauw | 24 sept. 2022 | 00:25:04 | |
Pieter Krynauw shares his career history and how ThruWave is applying millimeter wave tech to save retailers millions in fraudulent returns.
Danny:
– Well hello and welcome to today’s IndustrialSage Executive Series interview. I’m Danny Gonzales, and today my guest is a company called ThruWave. I have Pieter Krynauw who is the CEO. We met at MODEX in 2022, and so I’m super excited to have you join me today, Pieter. Pieter:– Hey, thank you. Nice to be with you guys. Danny:– Well this is exciting. You guys have some really interesting technology. There’s been several awards that you guys have won over the last several years. For those who aren’t familiar with who you guys are, who ThruWave is, give me a little bit of a high-level of who you are and what you do. Pieter:– Yeah, sure. At a high level, we’re a small start-up based in Seattle. We’ve just developed some amazing, ground-breaking millimeter wave ocular vision technology that can sense through cardboard, plastic, at very high speeds making it a great solution to inspect packages that move along a conveyor. We construct a 3D digital image of what’s inside a cardboard box or a plastic tote providing the ability to verify quantity, condition, content for our supply chain customers. We use simple hardware technology like this, and then it’s all software to analyze and support our customers. Danny:– Excellent. That’s pretty cool. I remember we demoed it; I think we did some video content there. It seemed like it was very interesting technology. We’ll get into that here in a little bit more in the episode, but right now we’re going to pivot, go to one of my favorite sections just to learn a little bit more about you, Pieter. I want to learn about your background, how you got to where you are, hear your story a little bit. Take me back; how did you get into this space? Was it something that, did you go to school for engineering? What was that? Pieter:– Yeah, it’s a long journey and a longer story. I grew up in South Africa. After college I moved to the UK, probably had a plane ticket and £100 in my pocket. Might’ve been a little bit more, but it didn’t feel like a lot at the time. I had some software and computer networking training at the time. This being the late 90s, I was able to find a really nice job at a small data company in the UK, and I had the opportunity to work with just some fantastic customers, a wide variety of customers in the UK which was really fantastic for me as a young person, young professional. I returned to South Africa after about two years in the UK, did an MBA, and I was fortunate enough to get an opportunity with Honeywell. We had a large contract with South Africa’s largest petrochemical company, so I jumped straight into the fire. I worked myself up, sideways, up again, into various positions in South Africa, the Middle East, China, and into the US working in a variety of roles, mostly in process automation, industrial process automation. Honeywell then acquired a material handling company a few years after I got to the US. I went over shortly after to lead that business. That’s the short story of how I got into the supply chain space. Danny:– Excellent. Through that journey—obviously we got the short, we got the abridged version. Totally get it. I’m sure there’s a lot of things that probably, a lot of left turns and right turns and then circles and go back up. Typically, like with anyone’s career, there’s a lot of people that have had a major impact and helped to shape who you are today. I know there’s way too many to go over, but who is one person that comes to mind that really helped to create and helped you to be the Pieter of today? That could be a lesson or a scenario. What is that for you? Who is that person? A person. Pieter:– That’s also a difficult question. I think maybe living and working in so many different locations, parts of the world, every location leaves something with you. The experiences and the exposure you later realize is a blessing that very few people get to have. I’ve been fortunate enough to work with just some fantastic professionals, individuals, over many, many years. If I really want to think back to what made me who I am, I would have to go back to my dad in two ways, one probably good and one probably bad. The good part is that he just showed me the work, the integrity, ethics, hard work, and I got that from him. But I grew up in a small town, never really moved, and I think that also wanted me to be a little bit more adventurous and go do a few things that maybe I didn’t think at the time was possible or that I had the capability to do. That part I think also shaped me. Then I’ve also got to say, from moving a family so many times, my wife has just been tremendous. I think I was enabled by her sacrifice to put her career on hold so many times. Very difficult to pinpoint the exact influences, so those would be two. Then I also would like to think that I’ve taken some of the good things from everybody that I’ve worked with in the past, and then maybe also avoided some of the bad things that I’ve seen in people that I maybe didn’t like that much. A combination of things, but my dad and my wife would be two ones that have really influenced my career. Danny:– Certainly. That’s great. Let’s jump a little bit now to your transition. You said you spent a lot of time with Honeywell, and there was a lot there. You moved to a lot of different countries, had a lot of different exposure across the industry. Let’s talk about ThruWave and how that started, how you got involved, and what did that journey look like? Pieter:– That’s a really good question. Obviously I was very blessed to work with a really great American multinational company that afforded me a lot of opportunities. I really liked moving from oil and gas, petrochemical into supply chain, really loved that transition, and I just see so many opportunities for technological advancement, automation, improvement, things that maybe oil and gas learned many, many years ago that can transition into the supply chain space. I really just love working in material handling and supply chain. After a couple of years running Intelligrated, I came across ThruWave, and I was blown away by the technology and just what this team of scientists were able to develop. I’ve never really worked in a start-up environment, and I thought the combination of those two things—doing something I haven’t done before, getting into some awesome technology—was just a great opportunity for me to do something that I haven’t done before. Danny:– Yeah, absolutely. It’s a night and day difference, going into very established corporate to start-up. It’s very entrepreneurial. Did you have that in your background at all? Was that something that was—is that spirit embodied in your family, or is that a new venture for you? Pieter:– I’m not sure; I guess working within a large multinational I think afforded me a lot of support, but I think to some extent also the places that I worked were so far removed from headquarters that you’ve got to do what you need to do to be successful. Roles aren’t always as defined and as clear, so working in the middle of nowhere you’ve got to do the project management, the sales, the service, the support. You’ve got to have a little bit of a self-starting nature and some entrepreneurial capability, I think, to be really successful. I think I learned that even though I worked in a fairly large company. Danny:– Excellent, very cool. Alright, so talk to me a little bit about that moment when you decided that, hey, I’m going to make this transition, and I’m going to jump onto the start-up. I imagine typically that’s a very challenging and difficult decision to make. Obviously there’s a lot of unknowns. It’s exhilarating, but it can also, I imagine, be a little terrifying, both sides of the spectrum. What was that like for you? Pieter:– Maybe I look at it a little bit differently. I think through my past career moves, I’ve always brought excitement and energy from trying things that I wanted to develop in myself firstly or tried to take on challenges that I haven’t done before. One of my first big moves was moving from South Africa to the Middle East. New culture, new location, new teams, different macro-environment. That was really exciting, although for me that was a sideways move at the time. Stepping out and growing into a company like ThruWave, I think the excitement and the challenge and the opportunity overshadows the risk or the doubt. I think from my point of view, that’s how I’ve always looked at things. I think if you’re going to look at everything that’s going to go wrong or if you’re worried the challenge is going to be too big, then probably it’s not a good move. Probably you’re not going to be successful. I tend to get energized by that, so I don’t think much about what can go wrong. Danny:– That’s great. I love it. The always positive optimist, it embodies a true visionary. Great, so ThruWave, you had this opportunity. How did ThruWave come to be in existence? Where did that technology come from? What’s the origin story? Pieter:– The founders of our company all came out of University of Washington where they’ve worked under Matt Reynolds and developed the basics of the technology. Then it spun off from there to really focus on the commercial application in the supply chain space. So out of UW, and it’s been a fairly long journey to really develop a technology solution that’s viable for supply chain customers. Danny:– The technology that you have, what exactly does it do? Pieter:– We use millimeter waves; it’s in the invisible spectrum. It’s totally human-safe. Think about it as a camera. Again, I’ll show the little module here. We have RF antennas mounted within this module. As an object, a case, a tote passes past the sensing module—we’ll have an array of modules—the movement and the waves reflecting off what’s coming past us gets received at the bottom. Then we would use those millimeter waves and reconstruct a 3D digital image of those reflected waves that comes back. Really simplified, but that’s in short how it works. Then once we have this reconstructed digital image, we can apply an analytic software algorithm, a classifier, and actually interpret the image and then do something with it. Think about it as, we’re taking a—this is a camera; we’re taking an image and then apply some computer vision algorithms to those images. Danny:– Absolutely. When we met—we didn’t meet, but I met your partner there, Matt—he was basically explaining to me, dumbing it down for me, was that essentially—that’s the same, if I understand correctly, it’s the same technology in body scanners at the airport that we might be familiar with. What it sounds like is there’s a lot of use case and applications to be able to—when we think of computer vision right now, it’s more on the surface level, on the exterior. But you have the ability to be able to actually give insights into what’s going on inside that tote or that package or the parcel. From a quality standpoint, or quantity, making sure that what is actually in there is what’s supposed to be in there. I’m assuming that’s one of the many applications. What are some of the top applications for this? Pieter:– Just to confirm, you’re absolutely correct. The scanning technology that they use at the airport, it’s also millimeter waves. We’ve been able to put it in a form factor with the right reconstruction and software algorithms have made it so that it can actually be viable within supply chain, working at very high speeds. In the airport instance you’ve got to stand really still, and speed and performance is a real issue. The team just did a fantastic job to be able to do that. Then you’re also correct. Think about a camera taking a picture; it’s really good with what it can see, but occlusion is a problem. Visible light spectrum is a problem. It can’t see beyond certain things which makes our technology really good. We can see through cardboard, plastics, light plastics, air packs, and the like. Yeah, so we can then see what’s inside which makes it a really good application to count, to detect damage, detect leaks. Heavy plastics, liquids, and metals really reflect well, and we see those images really well and we can then do something with it. Think about high-value electronics, liquids, bottling applications, security applications, counting applications for various industries. We’re fortunate that we can place throughout the supply chain, whether it’s inbound on the manufacturing side, within the manufacturing operation, outbound from the manufacturing, inbound to retail distribution fulfillment, outbound to whether it’s retail again or the end consumer, and then everything back through the reverse logistics chain, making sure the right things show up at your door. There’s no fraud; things are in the right condition, and the right counts are there. There’s a whole host of applications that will just grow and grow in the future as we develop new capabilities on the software side. Danny:– I can only imagine. As you were talking about all those different areas, lots and lots of applications. Is there a particular focus that you have right now as far as, from a go-to-market, that you’re really honing in on? Pieter:– We want to keep it simple, so we focus on a couple of use cases, a couple of applications. Really focused on a homogenous product set at the moment. Think about bottling, canning, operations whether it’s consumer product goods or in the bottling, beverage, brewery type of application. We can count bottles; we can detect broken bottles, broken cans, things that’s metallic of nature that’s missing, that should be there or metallic objects that’s in the packaging that shouldn’t be there. That’s got a nice, broad application, but from a software and a commercialization point of view, the value proposition is largely the same. And then the other thing we’re focused on is really determining whether the right quantity of things are in a box or a tote, so whether that’s in an ASRS system or in a packaging operation or picking operation. Those are the main things we’re focused on at the moment. Danny:– Excellent, well it makes a lot of sense, certainly. We’re talking about, I think you were mentioning a little bit about reverse logistics. That seems to be a big story right now, especially as a lot of retailers—there’s an influx of inventory because demand forecasting, the last several years have been crazy. Who the heck knows what’s coming down the track? Now everyone’s sitting on a ton of inventory, depending on where they are, right? Pieter:– On the reverse side, a lot of businesses have done a really nice job on the outbound side, but this growth in ecomm and then the reverse side, it’s just so difficult to keep up with. If we can deploy our technology and at least just tell our customers, “Hey, what’s supposed to be in there is in there,” it goes a long way for them to feel a little bit more confident that they can process a refund, process somebody trying to defraud them. Fraudulent returns in the US is about $25 billion a year, so it’s a sizable problem. Danny:– Absolutely, and it’s just like on the outbound side. It’s all about speed, speed and quality, so getting products and things to consumers—or could be other businesses—but then the same thing on the back end that you mentioned from a refund standpoint, get that going quickly. So I don’t think I’ve asked this—how long has ThruWave, have you guys existed? Pieter:– We’ve really come out of the shadows in the last 18 months to two years. Prior to that was really under the radar, in stealth mode, developing the core of the technology. We’ve gone through, over the last 18 months or so, we’ve gone through a lot of our POC testing, pilot programs, and commercial roll-up now. We’re really scaling up fast at the moment. Danny:– Excellent. You answered one of my next questions. Another question that I have on this just is from a funding standpoint. Have you gone through Series A? Where are you in that process? Pieter:– Yeah, it’s a good, timely question. We’ll be raising a Series A in the next, in the coming months. Danny:– Excellent. Pieter:– Before year-end. Danny:– Very good, very cool. Well listen, this has been—I’ve enjoyed this conversation. Like said when we met at—well we didn’t meet, but we saw ThruWave, I thought it was fascinating technology. I thought it was also really interesting that that hasn’t really, to my knowledge, from a visioning standpoint, there’s not a whole lot of other technologies out there like that at the moment. It just makes a lot of sense as far as all the different applications, specifically when we were talking about a lot of ecomm and logistics there and the supply chain space. I’ll give you the last word if you’d like to leave anything with our audience before we wrap. Pieter:– Great. We’re really excited about the technology and the solution that we can provide our customers. We think we’ve got a really disruptive vision of the future, and a lot of our customers, the only thing they can do today is throw labor at the problem, whether that’s statistical sampling and opening boxes and looking for defects or checking that things are good. We’re getting really a long way to automate that, make the labor a lot more efficiently and provide visibility to things that have not been visible before. We’re excited to work with the customers out there and really excited to get our technology and our solution out there to drive real value in what is a very challenging environment within supply chains. Restructuring of supply chains are going to happen, and transparency and visibility of data is probably going to be one of the most important things for customers to build a real competitive advantage within the supply chain. We’re excited to be part of that. Danny:– Excellent. You have exciting technology. We’re going to be hearing about you guys a lot more over the next several years, for sure. Pieter, thank you so much for spending some time with me today on the Executive Series. Pieter:– Thank you. Danny:– Alright, well that wraps up today’s episode with ThruWave. I had Pieter Krynauw, the CEO of ThruWave, which you can go check them out at thruwave.com. And that’s T-H-R-U-Wave. There’s a link, and we’ll have information that you can go check that out. Thanks so much for watching or listening. Maybe you’re listening on the podcast. Hey, if you’re not subscribed, I want to encourage you to go and go to IndustrialSage.com, and you can subscribe so you can get some of these great insights and hear about all the innovations and the technology that’s happening in the manufacturing and the industrial supply chain space because it’s rapidly evolving, and there’s some amazing things that are happening. That’s all I got for you today. Thank you so much for watching. I’ll be back next week with another episode on IndustrialSage.
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| Ambi Robotics: Jim Liefer | 03 sept. 2022 | 00:36:59 | |
Jim Liefer of Ambi Robotics shares his view of prioritizing customer desires and workforce quality of life when implementing ai and robotics.
Danny:
– Well hello and welcome to today’s IndustrialSage Executive Series interview. I’m joined by Jim Liefer who is the CEO of Ambi Robotics. Jim, thank you so much for joining me today on the Executive Series. Jim:– Absolutely. Thanks for having me here, Danny. Danny:– Well I’m excited to jump into our episode, learn a little bit more about you. Learn a little bit more about Ambi. It sounds like you’re a robotics company, based on the name. I’m just going out on a limb there. Jim:– We are an AI Robotics company. That is absolutely right. Danny:– So tell me a little bit about—what exactly are you guys doing? What are the problems that you’re solving today? Jim:– Yeah, so Ambi Robotics is an AI Robotics company, as you guessed. We are developing solutions that empower people. Primarily we are in the world of supply chain at the moment, so we are enabling those humans to work smarter. If you think of it in the way of right now the work that they do out there in the parcel world, in that industry, and also in the fulfillment world for retail operations, they are moving packages and parcels around. Our technology allows them to become robot handlers instead of package handlers. That is what the technology does, and that is where our focus is today. Danny:– Excellent, alright. Well sounds good. Sounds like a lot of the companies that we’ve talked to, there has just been such a huge acceleration of automation, robotics technology to solve a lot of the challenges that are going on now that were honestly present before the pandemic, but certainly accelerated afterwards exponentially with the, you mentioned specifically in the parcel or warehousing. Ecommerce has exploded. Then there’s nobody there. The labor has dropped. Jim:– Yeah, it’s a couple of things. The way that I always think of this is that all of us consumers, we’re on this path anyway of moving from brick-and-mortar shopping into ecommerce, going on our phone, having something arrive at our door basically. Then when the pandemic hit, it just accelerated that 5 or 10 years. I also, the way that I’ve seen this at least here at Ambi Robotics is that during that time where everyone was sort of in their bunker during the pandemic, there was a lot of progress made, a lot of progress made on the AI side, a lot of progress made around robotics and configurations. As you’ve said, Danny, there aren’t humans anymore, so it created this moment where the customer sort of has to find this solution because we can’t serve the need anymore. That’s the journey through the pandemic as I see it. Danny:– Oh, sure, absolutely. I’m excited to jump into that a little bit more as we get a little bit later in the episode. Right now—it’s one of my favorite parts. This is when I want to get to learn a little bit more about you. We get to learn more about Jim. Jim, so tell me. How did you get into this industry? How did you get into this space? Take me back. Jim:– Okay, well as you can see I have a few years on me, so we’ll go way back. Danny:– You don’t look any older than 25. Come on, man. Jim:– So I actually started as a computer operator for a bank. I also was mainframe systems operator, had the overnight shift. I was the sole operator, by the way, for this bank. I had this huge amount of responsibility on me to make sure that all the systems were working every day when the bank opened. Eventually I moved from that heavy set of responsibility into the world of 3PL. I worked for a third-party logistics provider, air and ocean freight and all of that around the world. UPS acquired that 3PL in the early 2000s, so now I became a UPS-er. Through all of that time at UPS on the technology side, I was exposed to different systems and what we were doing for customers. Then I moved from UPS over to Walmart ecommerce as VP of operations at Walmart. Had a lot of responsibility for the ecommerce fulfillment buildings and supply chain for Walmart ecommerce. All of that time, I was in the chair of looking for solutions to the problem, the problem being solving for process, solving for new volume, solving for the labor side. That is where I started on the big company side, and then after six holidays at Walmart, I moved into the exciting world of start-ups and eventually made my way to—the first start-up at AI Robotics was Kindred, and I was there helping them with that product that would serve the apparel industry. Then made my way over here to Ambi about 16 months ago as the CEO here at Ambi Robotics. Danny:– Well that’s awesome. Congratulations on that. It sounds like an interesting progression, an interesting journey into that. Throughout that time period, maybe if you could share with me a story or somebody who’s had an impact on your career. It could be a mentor; it could be somebody who gave you some great advice. I know most of the time people have a lot, and they struggle to pare that down. Share with me, who’s that one person for you? Jim:– There were many. I had many people along the way. I would say the person who changed the way I think about being in the professional world and also being a leader is a gentleman who came to be my manager in the late 90s, came to that 3PL that I mentioned. He had this perfect blend of challenging the team, uplifting the team, and protecting the team. His name is Gene, and so I always say there is Gene-isms that I talk about all the time. I hear his voice in my head. I hear him saying different things that make me much more of a servant leader and being humble. He changed everything I think about leadership Danny:– I like it. Share with me; what’s a Gene-ism that you can share with us? Jim:– Well an easy one is, catch people doing something right. He was a big believer in, don’t wait for the moments when you have to tell people, “Hey, you did that wrong,” but catch them doing something right. That’s one. I can give you a second one. The second one is—and it’s very corny—but he said, “Anytime you’re pointing your finger at somebody, there’s three fingers pointing back at you,” which, a lot of people say that. He would always say that, so don’t blame others. Many of those things that just—overall how to carry yourself and look out for the team just meant a lot to me always. Just speaking of that, we have an amazing team here that I think of every day. Caring for this team is my top priority. Danny:– That’s awesome. I love that. I especially love that you call them Gene-isms. You obviously are able to quickly rattle them off, and I like it. Corny or not, there’s three fingers pointing back at you when you point at—I love that. I’m curious. I think I know the answer to this, but how is that—obviously it’s influenced your style, your leadership. You mentioned servant leadership there. You mentioned that that was, back when you were at the 3PL. Was that before UPS acquired them? Jim:– Yep. Danny:– Okay. Were those Gene-isms, as you progressed and you moved up the ladder so to speak, was there a point where it just clicked and you said, “Hey, I need to go ahead and put these into play,” because a lot of times you’ll go through this stuff, and it takes time to absorb. Then there’s a moment where things shift. You say, “Oh, wow, I completely understand from a leadership standpoint how viable and important this is.” Jim:– Yeah, so it’s a combination of things. First meeting Gene and all of those things that are Gene-isms, but also the way that he thought about employee engagement and surveying and so all of those things to take care of the team. Then as I told you in my career when I moved to Walmart, Walmart is the place where I heard that term, servant leadership. By the way, Gene and I worked together in several places. The 3PL, we worked together at UPS. He then came to Walmart after I was at Walmart. The point of that is, it’s a build. I had that foundation, those things I learned from Gene, and then also all of the way that Walmart leadership works and thinks about the customer, so layering that in. There’s a strong customer component. One of the Walmart sayings is that the customer is always right, so I believe that strongly. Then when you tie into the other aspects of Walmart of everyday low cost is another big one for Walmart. Respect for the individual and servant leadership, those components, it just made sense to me. I couldn’t think of leading in any other way, and I think it’s served me really well to this point around being humble, servant leadership, passion, all of those things. Danny:– Oh, I love it. I think that’s one of my favorite stories I’ve learned, especially that you have some terminology around it. Gene-isms, that’s very catchy. I’m definitely going to be stealing some Gene-isms. I’d love to hear more later down the road. Well very cool. Let’s pivot a little bit now. Let’s go back to Ambi a little bit. You were talking about, obviously we’ve got a lot of issues with supply chain, with labor. You guys are helping to solve some of that. I guess a big question that I would have is, there’s been a huge influx of robotics companies. If you look at the last several years, it was growing and emerging. One big thing that jumped out to me was, we were at MODEX in 2020. There were AMRs everywhere, AMRs, AGVs, everything. Robotic arms, cobots, Spot was there, of course. Going back in 2018 it was a little less, and further, and there’s a huge emergence of it now. What is your biggest point of differentiation from the crowd, so to speak? Jim:– Okay, so we’ll weave this together. You have the technology component, so just to drill into that for a moment, on the technology component, it’s easy to get very excited about that. Being inside the AI Robotics company and all of that, you can get really into your own tech, and you can tell yourself that the simulation to reality transfer learning is the most important thing, and it’s really exciting. The way that the mechanization works with the hand-off between the software side and the mechanical side, that’s really cool. I say that because, as words of caution. Yes, that’s really cool, but—and the way that we’re differentiated is, the customer doesn’t actually care about those things specifically. The customer, and this is where Ambi is very different, the customer cares about their throughput, the volume that’s coming at them, the uptime, the ability to reposition labor—labor, human labor, reposition in their places of buildings and whatnot, and that is the primary differentiator for Ambi is that we care about the key metrics that the customer cares about. Yes, it’s great that we have the technology to rely on and we can bring the solution, but if you’re not shoulder-to-shoulder with the customer being attentive to those key metrics for them, I don’t know how you can truly win because you win when they win. I want to go back to what you were saying about MODEX. I saw the same thing. This MODEX that we just came from a couple months ago, kind of shocking how much technology there is everywhere, like robots and picking robots and all of that. As I said, though, there has to be a lot of realness. It actually has to be solving their problem, their specific problem that you have to configure for. Otherwise it doesn’t matter. Danny:– You’re 100% right. That’s the product developer’s challenge. Hey, this is super cool. This is great tech. That’s awesome, but is it an addressable market? What’s that need that you’re tangibly solving? One key thing you mentioned, that you were shoulder-to-shoulder with a customer. What does that look like specifically? Let’s say as you’re going through R&D, what are those practical things that you’re doing to really have a true understanding of your customer’s needs to develop something that says, “Hey, this needs to be addressed, and there’s a need for this?” Jim:– The first part is, it’s helpful that you have knowledge of what’s happening within the four walls. That’s useful. I told you I came from UPS and Walmart. Danny:– That’s helpful, yes. Jim:– That’s super helpful is to have that understanding, know the terminology. That aside, going and looking at the sites and understanding because you can’t say that—let’s use Walmart and Target as two examples. You can’t say that those two entities are providing fulfillment operation in the same way. There’s all kinds of different permutations, and in fact within any of those large retail entities, they might be doing it different ways at their different buildings because one of them is more manual; one of them has more high-speed sortation and so forth. Going through the operation and understanding the process and understanding what’s causing pain to the people there, the people at the line level and the supervisors and others, that is the key when you develop the system, and the Ambi solutions are highly configurable, both on the software and the hardware side. That’s what allows us to, and I’ll give you a couple examples. A, we can be upstream before high-speed sortation. We can be doing something around induction, or after high-speed sortation you can then provide more output locations from an AI robotic perspective. But it just depends on what the customer needs in that site and for that market. Danny:– No, absolutely, that makes a lot of sense. What are some of the big challenges? Obviously we know that labor is a massive one. Supply chain is another really big one, which are very inter-related. What are some of these challenges, though, beyond that, are you seeing with your customers? Or even in the industry in general? Jim:– In the industry in general, let’s first say for AI Robotics’ industry. What are those challenges? The way that I always think of it is, for a start-up, and for any of those where we are creating solutions that have never been in the world before, and also, by the way, the same kinds of challenges that businesses have that have been around for a long time which is around focus. As I said a moment ago, focus on the customer. Take care of your team. And I would say making sure that you have the ability to deploy what you say you’re going to deploy. It comes down to, it’s basic stuff of do what you say you’re going to do. If that’s what you commit to, then do it. That’s the big overarching. Going to the broader industry around, let’s just say supply chain is the—this phenomenal growth that happened, as we said, in the compression time of the pandemic is ongoing. The number of—if you think about supply chain in terms of last year there were something like 130 billion parcels in the world. 130 billion is this number to wrap your head around, and then only something like 25 billion of that was in the US. And all of those parcels are being touched three to five times, so it’s an enormous problem I guess is what I’m saying from a challenge perspective. There are so many places to go after that problem, all kinds of different directions but that is the challenge is the volume, the speed that all of us as consumers are demanding that we have it to our door, and the variation of all of those parcels. It’s everything from little, tiny things to very large and flat things and rigid and deformable and all that. I think there are seemingly endless challenges around those problems and different ways that you can solve it. Danny:– That’s a fascinating stat. I have not heard that before. You said 130 billion parcels out there, and only 25% were basically owned by the US, so to speak? Jim:– 25 billion of the 130 billion in the US. All of us that have packages arriving at your door, you would think that the US is leading, but actually we’re not. There’s many more parcels out there. I just think about where these solutions could go outside of the borders of the US to deploy these solutions and solve that problem. Danny:– To get into it, I’m sure the parcel—what am I trying to say? What I’m trying to say is, how much of this is consumer—I guess a lot of it ultimately is going to be consumer-driven, but relative to parcels that is B2B versus B2C, OEM parts versus a package of masks or pens. Jim:– Yeah, the numbers that I’m talking about are B2C and—there was something other. These are all parcels. This is all just parcel volume out there. It might be that it’s much larger parcels, sort of non-conveyable parcels. Yeah, that’s a lot of that. Danny:– Well that’s a lot. Like I said, I hadn’t heard that stat before. I think that’s fantastic. That’s pretty interesting. One of the things that I have heard that they’re reporting is after the pandemic, you get into March, April, May, I think through 2020 that ecomm, for example, exploded. It was like a 40% growth just in that year alone which obviously is going to accelerate, push all those parcels there. Jim:– It’s about parcels, and it’s what we also call eaches. Again in this world where we moved from product going into distribution centers in full cases and those full cases going to stores, and then people would put them on the shelf so you and I could go buy them, now that doesn’t happen anymore. Now all of those full cases are opened up at the distribution center, and the worker has to take out the each. The bottle of water, if you will, and then that goes in. Maybe you mix that with a bottle of water and, I don’t know, a mobile phone or something, things I’m looking at now. Then that goes into a parcel. Everything at this each-level has caused—it’s adding to the challenge because there’s just not enough human labor to manage all those eaches. It’s actually really fascinating. Danny:– Yeah there was an interesting stat at the A3, their conference I think last summer in Memphis. There was an interesting stat specifically about that, talking about as the growth of ecomm comes in, and I can’t quote it 100%. It was a very short time period, within I’d say three to five years, that the amount of jobs needed—which we’re already, right now I was reading a stat, it was, there were 6 million people short for jobs right now across the board. That is going to increase even more, but specifically into this warehousing and ecomm piece specifically because of that, as everything’s becoming more distributed. Jim:– Yeah, there’s several vectors to it. While we were talking about all of this volume and the throughput need, also the other thing to say is that no one—not no one. Few people want that job because that kind of work is quite onerous. The environments, those environments are not set up well for humans. They’re hot in the summer; they’re cold in the winter. They’re loud; there’s forklifts. There’s horns; there’s all kinds of mechanization going. The way that we want to help in the industry, and we want to uplift those workers’ lives, is that you put a robot solution there, and then that person can interact with their robot instead of having to interact with all those eaches. It’s just a far more fulfilling kind of a role, and just to tie this back, the symbiotic part of it is that the worker has a more meaningful role. They stay in the job. It benefits the person who has given them that job, so they have a better relationship. We feel great to be a part of that. Danny:– One thing that I’d be curious about, just as far as your technology and what you have, just from a training standpoint, you were mentioning one of the challenges, one of the things you often hear with automation whether it’s robotics or whatever type of automation, that oh, we’re taking the jobs away and whatnot. And we can say, “Alright, first of all, the reality is it’s hard to find labor right now.” People are saying, “I don’t want to do this,” for whatever reason. “I’m done with this; I’m moving on,” whatever. The reality of it is, there’s a big gap there, but let’s put that aside for a second. For those who are actually still in the workforce, there is fear and trepidation sometimes. Hey, this process that I do over and over again, maybe I’m going to get replaced. If we can train and redeploy that existing workforce, as you mentioned, you’re going to be assisted by, with a cobot. What does it take, from a training standpoint, that you’re seeing with your customers to be able to redeploy an existing workforce to have, hey, I’ve got a cobot here, and then here’s the new process? Jim:– That’s such a great set of questions there. Our approach has always been—let’s go back. The former way that perhaps this problem was being approached and that people were reacting to was robots are going to take our jobs. You can have a dark facility, and it’s all just robots doing all of this stuff. We’ve never believed that. We believe that in order for the solution—take the AI technology. I talked about virtual to physical transfer learning. You take the AI; you take the configuration capability. It needs to have a human interacting with it. So the human work changes, as I said, You sort of up-level that human’s work, so we’re very proud of what we think of as human-centric design. All of our systems have the human worker in mind in terms of the user interface that they have that tells them what’s going on and how to do something, so lights and indicators, things like that. That’s number one. Number two, we have developed what we call the robot operator program, so think of it this way. If you’re the customer and you’re managing this facility and you’re hiring these people, we’re working with our customers to allow our customer to post jobs that say robot operator in a parcel facility. Now you can post the job for a robot operator. You can bring the person in, and we have programs that we’ve worked out where, for example, there’s additional training. You can do training right from the user interface at our system. You can also do training online, so it uplifts them in a way that they get to learn new things. Then there’s of course moments of pride around Ambi apparel and pins and things like that that help them feel like, this is great. I get to come to work, and I get to interact with this robot. I think the world of thinking that robots are going to take over all these jobs completely is, really doesn’t make any sense. Danny:– I think that’s interesting, your robot operating program. Have you seen, when you’ve deployed this, that your customers are finding it may be a little bit easier from a recruiting standpoint to recruit new workers in because it’s fascinating and it’s new technology? Jim:– Well, so yes, and I want to say one of our key customers has told us just recently in the last month that when they post for this role—and just to say levels—when they post for this role they are able to post as a level 4, and I don’t know the distinction between 1 and 4 and 10, but they talk about it as, “Oh, it’s a level 4.” There’s many more people that are interested in level 4—it just seems to make sense—than they would be a level 1 which is just the very basic stuff. Finally, because you asked about training and familiarity with the solution, we find it to be a half-day, sometimes less, for them to understand how to interact. It’s very intuitive. Even I can do it, so it’s pretty easy to learn how to interact with the robot. Danny:– No, that’s awesome. I brought my son, he’s eight, to MODEX, so he could see all this. He’s been begging me. I went to ProMat in 2019, and there was an R2-D2. Somebody had, I think it was a— Jim:– Oh yeah, yeah, I remember that. Danny:– I was like, “That is awesome.” I sent videos, and he was like, “Dad, you have to take me to Chicago next year.” So anyways, we didn’t see R2-D2, but that’s okay. There was a lot of really cool robots, and one of the things that stuck out to me is that, how easy it was for him to be able to program and do, and the excitement. And I’m thinking, “This is amazing where the technology is going now.” You said half a day; you can go, and you can train on this. It brings a new sense of purpose and excitement to the role, and it’s assisting in a very material way. Jim:– Yeah, well first of all I just have to say right now, please don’t tell my nine-year-old that your eight-year-old was able to go because he specifically asked me, and I thought somehow that you had to be 18 to get in there. Danny:– You are; I didn’t know that, so anyways, we’ll just cut that from the— Jim:– Yeah, yeah, okay, we won’t talk about that at all anymore. And also the other thing is, our kids will be—my son is much more capable to do anything related to technology than I am. It’s pretty fascinating to watch him do stuff on his iPad. Yeah, I think back to the interacting with our system, the intent was to make it easy and approachable so that the employees of our customers would have no hesitation. And just that point of, is this robot going to take my job? In the early-on time, we were concerned with that in terms of our first deployments. What we found to our delight is that there’s a lot of pride. People, the employees out there, the warehouse workers that are doing this hard work, very proud of the fact that they have their system and their—one operator I spoke to one day, she was doing a selfie to send to her kid who is in high school. She was like, “Now I can send a selfie that I’m working with this robot,” and her high-schooler wrote back and was like, “Mom, that’s really cool. Can I work there at some point?” Who would think that? Who would think that that would be a world where her kid, her teenager would be excited to come do the work that she’s doing? Danny:– Exactly, and I think we’re seeing that play out. That’s awesome. That’s great. Okay, so great stuff here. I have one final question. This is a fun question. Here it comes. It’s the magic wand question; I’m going to give you a magic wand. You can solve one industry challenge, but it can’t be labor. It can’t be supply chain, and it can’t be my prospects, companies that I’m talking to, wide open, I need my solution. What would that be for you? Jim:– Okay, it can’t—and it’s one of my customers who we’re asking, or just anybody in the world? Danny:– Just in general. A lot of times people say, “Hey, listen, I wish procurement would just be like, go ahead. Oh yeah, this is easy to deploy. We need this; go.” Jim:– I will put it in this place of—I’ll use our general technology and capability and the thing that I wish was possible in the world. which is, we are still a long way off from robots being able to do things in the way that we look at, like you look at a future, sci-fi kind of a movie. I guess the one thing that I would wish for is an advancement such that the robots have broader capability from the start. I think about a couple examples. I think about having robots that are, I don’t know, going down the street. One of them is how, this notion of, there’s a few people working on this notion of delivery to your door. I think I want—maybe I don’t want this, but I think I want a world where there’s robots that are out there interacting more in the world with us humans and uplifting all of us. There’s a lot to be done in the world. You look around, and you think, “Why did somebody not pick that up,” for example, or whatnot. I suppose that’s my one, and again I’m thinking that world hunger is off the table in terms of answers that you were looking for. I think that that is one, and it will come someday, but I want it to be in my lifetime. Danny:– I think we’re beginning to see more and more of that. One of the funny discussions that I had on that topic with my son after coming back from MODEX, he was like, “Dad, they need to make a robot that can pick up my room and can clean up.” It’s funny, but you start seeing there’s more. You’re starting to see more things slowly roll out. Let’s take lawn care for example. Husqvarna’s got their robotic—and certainly the Roomba’s been out forever. Yeah, that’s interesting to think we’ll see more of these things slowly deploy out. I think safety is probably the big thing right now, but even more. You go to, what is it, I believe the airport in Cincinnati. They’re rolling out with a lot more of robotic solutions that are cleaning and trash. There’s a couple of things. It seems to be a good—they like to test a lot of things there. Jim:– I would say your son has a really good one, and if I had thought for a moment about my son’s room, because again it is such a mess. It’s not even—it’s just clutter. There’s a lot of projects going on in there. Yeah, I think that we live in a time where, just look back over a couple of generations and look at how the hockey stick, where this is going. It’s pretty amazing, and hopefully I’ll be able to live long enough to see other huge strides forward. What we’re doing right now is also incredibly exciting, so I’m happy for what I have. Danny:– That’s awesome. Well listen, I think it’s exciting. I think that world definitely is coming. It’ll be very interesting to see what that looks like, the world of the Jetsons that we were all told was going to be here in 2000. It’s a few years behind. But listen, Jim, I have really enjoyed our conversation and our time. Thank you so much for sharing your insights and your story and letting me sort of poke and prod a little bit, asking you some questions that may be relevant and on and off topic. I appreciate it. You’ve been a good sport, and I appreciated it. Jim:– Loved your questions. Thanks, Danny. Danny:– Alright, well thanks. Okay, well that wraps up today’s IndustrialSage Executive Series interview with Jim Liefer who is CEO of Ambi Robotics. If you’d like to learn more about what they’re doing, you can go to ambirobotics.com. There should be a link in the show notes or on the webpage or wherever you’re watching or listening. That’s all I’ve got for you today. Thank you so much. Listen, if you’re not subscribed, I highly recommend subscribing. Why? Because you’re missing out on great content like this that we do every week, and there’s even more stuff coming. We even have a really cool documentary series that’s going to be rolling out very shortly called Industries of the Future. You don’t want to miss that. That’s going to be fantastic where we’re highlighting what companies are using technologies to roll out, for solutions for their customers’ problems, things like computer vision and robotics, AI, bioenergy, all really cool stuff. That’s all I’ve got for you. Thanks so much, and I’ll be back next week with another episode on IndustrialSage.
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| Lanco Integrated: Bob Kuniega | 20 août 2022 | 00:30:29 | |
Bob Kuniega of Lanco shares how the industry’s lean practices wax and wane, and how manufacturers need to improve their recruiting methods.
Danny:
– Hello and welcome to today’s IndustrialSage Executive Series interview. I am joined by the president and CEO of Lanco Integrated, Bob Kuniega. Bob, thank you so much for joining me today on the Executive Series. Bob:– Very welcome, Danny. I’m glad to be here. Danny:– Alright, well I’m glad to interview you. We met, we were at the ASSEMBLY Show. We were talking about this before, in Chicago in 2021. My dates are all—with all the Covid stuff, time has just gotten all messed up. But yeah, it was the ASSEMBLY Show in Chicago. I think we met you guys there. You guys have some pretty cool technology and solutions. I think you guys were showcasing a solution with a partnership you had with I think Stäubli at that point. And so anyways, caught our interest, started talking, and here we are. For those who aren’t familiar with Lanco, could you just give me a quick high-level of who you guys are and what you do? Bob:– Sure, great. So Lanco, we make custom automated assembly and test machines really for the assembly and the testing of small to medium parts. Been around over 35 years; we have over 8000 machines stationed around the world. What we do is we work typically with an end customer who has a product and wants to get it to market and wants to automate the assembly end or test processes. We’re doing the concept. We’re doing the design. We’re doing the build and then the eventual validation and certification and tests that the product is meeting form, fit, and function. We typically, because of the size of the products we handle and the expense of our solutions, we’re focused in on a couple markets. It’s medical; it’s consumer electronics, automotive, some commercial industrial so a lot of these specialty applications that can warrant the complexity and the cost of these automated systems. Danny:– Sure, absolutely, okay. Well I’m sure that you guys have experienced quite of—like a lot of companies in this space, in the automation space, just quite a huge boom relative to Covid. I know there was a lot of, the industries were moving towards a lot of automation anyways, but certainly basically gas got thrown on that fire. Bob:– Yeah, absolutely right. Covid, while it was an unfortunate thing for the world, it was a boost and a refocusing, I would say to our business. We were fortunate early on to build a number of very rapid solutions for Covid test card kits, so more the self, home versions. That really shifted our market segmentation and what we’re working on. But as a result of that and as a result of supply chain disruptions and rebalancing, especially in this market in the Americas, you’ve got a lot of manufacturers who have decided they’re not going to go to a low-cost country and then have that disruption, so they’re forced to build local to their customers. But then depending where you’re at, probably now anywhere in the world, it’s tough to get people, and it’s expensive to get people. That whole shift, that was the gasoline that put on the whole industry. And in general our end users have really lost this ability to do the integration themselves, so they’re looking for us and our partners, our manufacturing partners to put it together and give them the solution they want in the end, which is produce their product to serve their customers. Danny:– Yeah, totally makes sense. That’s a story that we’ve seen and we’ve heard play out constantly. What’s interesting, too, is as things shift, we’re seeing new trends and different things. I think the labor piece was something that was really interesting. I think that everybody thought coming out of summer, 2021, I know the big thing was, the federal unemployment is helping to keep people out, and as soon as that’s over, we’re going to be back to normal. And then all of a sudden it was just like, wait a minute. People aren’t coming back. Wait, what’s going on? It’s a super interesting thing as we continue to progress. It’s like the story continues to evolve. We’ll circle back on some more of this stuff here in a minute, but what I want to do at this point is just get to know a little bit more about you. We want to know about Bob. Bob, tell me; how did you get into this industry? Take me way back. Did you study this? Did you go to school saying, “Hey, I’m going to go into engineering”? What did that look like? Bob:– Well like many people, I guess you take a bunch of turns. It’s never a straight line. Danny:– Exactly. Bob:– I am a recovering engineer; I will admit that. But really, I first got into it because I wanted to be a pilot in the military. It was circa Top Gun-ish things, and for various reasons I attempted to go in a couple of times. The engineering was a big of a fallback and a level of interest. My degree is actually aeronautical engineering. Danny:– Okay, that’s very cool. Bob:– I ended up not going into the military. I ended up going to work for Boeing, so I was designing and making airplanes. Had a couple cool jobs there. But the aviation industry is a little bit cyclical. I was living in Seattle; probably more opportunities if I got laid off at Boeing if I was in Southern California, but in Seattle there were some periods when Boeing laid off people, and the lights were out in the city of Seattle. I ended up joining an industrial distributor at the time who was selling PLCs and sensors and VFDs and data acquisition systems. So I was selling back to Boeing, to some of the departments I worked in. That got me into the manufacturing side. I eventually went from a distributor to a manufacturer and then spent a good part of my time on the manufacturer side working for a number of public and private companies, domestic and international experience, things like that. For the bulk of my career I’ve been in and around this manufacturing space. It’s kind of come full circle. As a manufacturer I would sell to some of our customers. I would sell to people like Lanco. And now I’m in a position to take a leadership role within Lanco and building that bridge between the manufacturers I once worked for and the customers I would occasionally service and that bridge and putting a whole solution from various manufacturers together to common customers and markets I’ve had experience with. Danny:– Oh, that’s very cool. I have to ask you this follow-up question because you completely piqued my interest on this. Do you have your pilot’s license? Bob:– I’ve got hours; I don’t have it yet. That’s a post-retirement thing for various reasons. Quite honestly at my time at Boeing, I would sit up in the cockpit, and it’s kind of boring being a commercial airline pilot. The military route is gone. They’re not recruiting as many pilots anymore. It’s almost more boring now, because it’s so automated, than it is being a bus driver. Danny:– That’s very true. So I’m a general aviation pilot, so I have a small 1979 Grumman Tiger. It’s funny when you talk to—you hear some similar things about all the commercial pilots. They like, “You literally take off; you just hit buttons. You’re on autopilot, and we’re just kind of monitoring things and talking to air traffic control.” You get into general aviation, you get to do a lot more things and play around with it. It’s kind of like a glorified bus driver, is what I was told. Bob:– What I was always told because I would occasionally go on delivery flights or revenue-generating flights, and the pilots would say it’s 99.5% boredom and 0.5% sheer terror. Danny:– Yeah, it can be polar opposites, no in between. That totally makes sense. Well that’s good. I’m glad it’s mainly more boring than terrifying. Okay, well cool. Sorry for that pivot; it just piqued my interest. I was very curious about that. Going back into your career and how you started and progressed and where you are now, throughout that process, can you maybe share with me somebody or something that had just a really big impact in your career? It could be an event; it could be somebody, a mentor. I know normally there’s a lot, but if we could focus on one thing, what would that be for you? Bob:– I would say—I had mentioned previously that my first job after Boeing was working for an industrial distributor. One of the vendors that we represented, I went and worked for them, and then we eventually got acquired by Danaher Corporation. We were their first acquisition that became a platform which became their motion group. So I was there in the nucleus of that. I’ve got a lot of respect for Danaher. They’ve got some spin-off businesses as a result of the success they had which was the core Danaher businesses. But immediately when we got acquired, you got immersed in what they call DBS, Danaher business systems, and they had their own educational system. It was a lot about lean, Six Sigma thinking, some concepts of strategy deployment, and so it was about actually putting a fact-based, process-oriented, results-driven type strategies together. In terms of, that was eye-opening for me. And they’ve been wildly successful as a company. I appreciate my time there, and I’ve taken that plus little pieces all around my career and used it as I’ve gone forward. Like anything, when you use it more you get better at it. When you make some mistakes, you learn from that. But I would say that was, Danny, from a professional standpoint, a really pivotal time in my career. Danny:– Okay, another follow-up question, that’s great. You mentioned lean, Six Sigma. I’m curious as we pivot a little bit now into current challenges and things that are going on right now, obviously one of the big learnings and things that companies continue to see is this resiliency with supply chain and looking at just how fragmented things are right now. Relative to let’s say lean manufacturing, this is an interesting question I like posing and asking people. Do you think we’ve gone too far in some cases with lean manufacturing? Relative to maybe just-in-time and some of these other elements. Bob:– I guess it’s easy to sit in the moment and arm-chair quarterback. Certainly we’re being impacted by it from the supply chain disruptions. I think our customers are thinking about this differently now, so it’s not all just-in-time anymore. The challenge is, you can be very lean as an organization and efficient, but you’re still reliant on outside forces. And unless you can get all those people in the supply chain up and down to be as lean and as efficient as you, the chain breaks, and then you have a problem. That really got exposed during Covid. Stuff was quarantined; you didn’t have people. Stuff was stuck on the water. You couldn’t get it out of ports and things like that. I don’t know that’s—lean has to be in the right balance, I think, and it has to be put in perspective with all the supply chain inputs and outflows that you have to deal with. Danny:– Yeah, it totally makes sense. If we were looking at it in a vacuum, certainly hindsight is, well I hate to say this now, 20/20. Overused phrase now. But I just think it’s interesting, is companies rethinking that. You have to, obviously, because it’s like, wow. But almost the unthinkable happened. I believe we were talking a little bit before we started recording here just how companies are now re-shifting, say, “Hey, listen, we’re reshoring. We’re bringing stuff back.” We need to make sure that our suppliers are closer to us so we can reduce a lot of—instead of saying we’re going to have suppliers overseas because we’ve seen what’s happening with shipping and ports and other countries—there’s a lot of dynamics at play that—maybe is there a lean 2.0 emerging from this? Bob:– Yeah, I think it’s a—the pendulum shifted as you previously implied, to super-lean, super-efficient. I don’t think it’s going to go back to massive amounts of inventory, but they’re going to have contingency plans. They may make the same product, and we’re seeing it with our customers. They’re making the same product in multiple locations in the off chance that a site has a cyber-attack or a natural disaster happens. They’ve got some abilities to flex and shift how they run their businesses. But I think the next wave, this notion of chasing the low-cost countries, there’s very few places anymore that are left to do that—China, India, some of these places, or the BRIC countries that were in vogue 10 years ago. They’re all seeing labor increases, and then you add to it the cost of transportation and logistics. Where lean worked was, you had low-cost inputs. You had a very stable logistics channel, and Covid blew that all up. Now people are going back, maybe back to where they were 20, 25 years ago before they were chasing all this lean and high-efficiencies. So it’s not going to go back to where it was. I think the pendulum will be somewhere in the middle. Danny:– Yeah, and that totally makes sense. What are some of these other principal challenges? Labor and supply chain obviously are the really big ones, but concretely what are you seeing some of these challenges are for your customers right now? Bob:– Their challenges—I talked about how they provide us a product, that we have to help them assemble and automate. Engineering is a discipline in demand for us and for them, and so sometimes we see designs coming from our customers that are not really made for manufacturability. And if they are, I guess that’s good for us, but sometimes we lose projects because it’s going to take so much automation to fit their product. Then it becomes something that they can’t tolerate any longer. I think on the one hand it’s good for us because they don’t have the engineering talent, and sometimes they give us a lot of liberty and maybe bring us in early on in the design phase. Sometimes we’re actually not only designing automated equipment, but we’re giving them comments on how these components put together make a product are going to be difficult for us to give them the solution they want, so we help them redesign some things. In most places, universities aren’t producing enough engineers fast enough. It’s one thing to be academically a student and understand the ME side and the electrical side. It’s another thing to put it into a practical sense, and that’s a struggle our customers deal with. It’s a struggle we deal with. One of our challenges, quite honestly, is because we’re so intimate with our customers sometimes, we are an attractive talent pool for our end customers because they work with us for a year, two years on a machine. We go install. We live onsite with them until it gets up and running, and then they put opportunities in front of some of our employees. But it’s a challenge that every business has in terms of keeping your employees engaged and wanting to work for us rather than somewhere else. Danny:– I definitely can see that being a very big challenge, certainly, especially in today’s environment. You were mentioning that one of these challenges, that maybe a lot of your customers are losing some of this engineering talent they would have on staff. Is that something that was a result of the pandemic, or was that something that you were seeing beforehand? Or is that new? Bob:– Yeah, I think it’s just a slow degrade. Part of it is, they don’t have engineers. Part of it is, their side is leaning and outsourcing it all. They used to have, in many cases, their own automation teams that at the very least serviced the equipment. At the very most they actually designed it. But with few exceptions—Amazon is a company that comes to mind—they have their own robotics division. They do their own skunkworks. They’re taking some off-the-shelf products or designing stuff themselves. I think it’s just that slow degrade and students not knowing when to go into the engineering field, and maybe this automation and manufacturing side isn’t as sexy for them. They’re off doing something else software-related or somewhere else. Danny:– That’s something that we hear a lot. You hit the key word I think there. People, oh, it’s not sexy. We want the jobs out in Silicon Valley or the tech startups and the cool—I think personally the reality of it is, I think for a lot of people, there is a tremendous amount of innovation. Personally I feel like there is so much innovation going on that’s happening that’s really exciting, and it’s even more of an exciting time because of that proliferation and acceleration of all these innovative new technologies. Certainly the pandemic again, if you want a little bit of a silver lining, accelerated all this and pushed this to do new things. What I think is fascinating, when we look at the—you were talking about it. I can’t remember now if we were talking about when we were recording before or after, but talking about certainly with the pandemic. We have to focus on these automation initiatives because it’s hard to find labor. If you can find it, then we have the rising costs. I think part of the big challenge is when you mentioned maybe from a lean standpoint, companies going back 25 years from where they were, maybe bringing that pendulum a little bit more towards the middle, that because of these new automation solutions, and because of the labor that is not there, that we can really bring in a little bit more independence and produce domestically. There’s a whole geo-political—if we could look at that right now, energy obviously is a big point of conversation and looking at I guess this question of globalization. It’s naturally, you’re seeing all that come back, and I think because of this technology, that’s eliminating—it’s solving the problem that 25 years ago companies started saying, “Well, we’re going out because of cheaper labor.” That’s a problem they have over there now, so how can we do that here domestically? Well I think technology and using automation—it’s not going to be the end-all, be-all, but it’s certainly filling that gap is what I’m seeing and hearing. Bob:– Absolutely. But that’s not just to western countries. We have operations in—I just got back from Malaysia. We have an operation in Malaysia, and that part of the world is booming to service that market, and we’re thriving as a result of it. They want to deal with a company A, that’s global; check, we are that. But they don’t want to deal—we service most of our 8000 units have been made in this facility in Portland, Maine, shipped domestically, shipped around the world, but that’s going away rather quickly. It was interesting; I went to Kuala Lumpur right before I left Malaysia to a company I used to work for, Parker Hannifin. We had sold them several machines, and their first question is, “How is your facility? Is it up and running? Is it functional? Do you have design, manufacturing, and supply chain capabilities in Penang? Because we know you; we’ve dealt with you around the world. We want you to make our next machine here in-country.” So even in those areas we would say they’re maybe not as developed, the mentality is, buy local. Again, they want that interface directly with us. Teams meetings, Zoom calls are great, but they want to see face-to-face. They want to work collaboratively, and we need to be there not in a couple days but in a couple hours. The only way for us to follow these global customers around the world is strategically put our businesses there where we have the capabilities locally to service and support them. Danny:– Interesting. That makes a lot of sense, totally makes sense. For a focus for you guys, obviously it sounds to be like that’s on the roadmap for you. Start localizing a little bit where your key customer accounts and whatnot. Totally makes sense. So I’m curious; I’m going to move on to our magic wand question. I like this question because we get a lot of different answers on there. I’m going to give you a magic wand. It’s this pen; I don’t know. It’s a magic wand. You can solve any industry challenge that you see, but it can’t be labor. It can’t be supply chain. I may even add a third one in there; we’ll see. What would you solve? Bob:– There’s still a war out there for different proprietary or open networks in the connection of these devices. When I worked for global companies, we would push our one, singular message. But no company, no matter your size in an automation world, has all the products. And so we’re faced with this challenge of taking these disparate products from various manufacturers, all very good on their own, but the connection to one, unified solution, and then the requirement moving forward is you get into industry 4.0 to connect it up to the ERP level to get this full digitized solution is still in its infancy. If we could get customers, suppliers agreeing on some standard protocols because that’s where we get challenged in terms of, the customer sometimes does not have a specification or a requirement for certain products, and then that makes our job a little bit easier. But sometimes they have other lines that our stuff has to hook into, or they’ve got some standards for maintenance reasons. We have this hodgepodge of different protocols and different programming environments which makes it challenging for us. Thankfully we’ve been doing this for 35 years, so we know how to hook this together. But quite honestly it makes it challenging for them and expensive for them. That’s the magic wand. I know coming from the manufacturing side for 25 plus years, they don’t want to do it because they want to keep you into their solution. We’re getting there. There are some open protocols, but I think going down that path I think would speed up the automation, the digitization across the manufacturing platform, make it simpler, make it less expensive for everybody. But right now everybody’s in their camps and trying to proport why theirs is the best solution. Danny:– No, it’s great. Interoperability seems to be a big thing. It’s interesting too, with all the continued emergence of new technology that’s coming in, you take robotics for example. I don’t have the updated stats on there, but just the explosion of new technology in robotics companies. Even going to shows, like we were at MODEX in Atlanta here a couple months ago. I think going back to 2018, 2019, probably 2016 certainly and then 2018, you continued to see more and more and more. Then now it’s just like this massive explosion, but then everyone’s running, to your point, on their own protocols, so really tying in all of the stuff together. Bob:– And speaking of robotics, I’m sure you saw at MODEX. Now there’s these cottage companies that are growing up around that with a top GUI layer that communicates to multiple robots so that the user has one interface to look at, and they translate everything down to the different protocols. Danny:– Yeah, it was actually Mass Robotics, the non-profit in Massachusetts. Last summer they came out with an interoperability standard which I thought was fantastic, and they had several different manufacturers involved with that to be able to do that. Do you think part of solving that challenge, is that going to be really solved eventually through association and standards boards coming in from programming and whatnot? I’m starting to get into areas that I am not as familiar with. Bob:– Yeah, and that’s been, I think, the current path. I think quite honestly it’s going to be the end customer pushing. If you’ve got these strict, hidden standards, we’re not going to use it. I think there’s going to be multiple pressure points that are happening. I think manufacturers just have to come to a courage to say, “We shouldn’t have a proprietary protocol” because it doesn’t—in the end if somebody comes up with a better mousetrap, and speaking of robotics you’ve got these guys that are laying over the top of this. Their power in terms of having a solution but it is a proprietary solution, they start losing that power. I think like anything it’ll mature over time, so there’ll be these open standards committees which there have been for PLCs and other software platforms. But I also think there has to be some pressure from above from the customer set saying, “We will not use anything other than something that’s open and standardized.” Danny:– Well that makes sense; that makes sense to me. Bob, listen, I’ve really enjoyed our conversation. It’s been fantastic. We’ve covered a large swath of topics over a relatively short time. But I appreciate you just spending some time with me and our audience just getting to know a little bit more about you, a little bit more about Lanco. For those who’d like to learn more about you guys, I’ve got lancointegrated.com. Is that correct, the correct URL there? Bob:– Yes. Danny:– Perfect; we’ll make sure those are in the show notes and anywhere this goes so that if people want to learn more about you and your company, that’s where they can go. Bob:– Well great; thank you for this opportunity, and hopefully we can speak again. Danny:– I would enjoy that. I’d like that as well. Thank you again. It was awesome. Bob:– Alright. Danny:– Alright, well that wraps up today’s IndustrialSage Executive Series interview. Listen, if you liked that, make sure that you subscribe if you are not already. You can go to—if you’re not watching it on the website, you can go to IndustrialSage.com and subscribe there. You don’t want to miss out because there’s a lot of great content like this. You can learn about trends and things that are happening and learn about other executives and have some great takeaways from that. So that’s all I’ve got for you today. Thank you so much for watching. I’ll be back next week with another episode on IndustrialSage.
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| CHL Systems: Michael Giagnacova | 23 juil. 2022 | 00:32:01 | |
Michael Giagnacova of CHL Systems shares on building relationships in business; and seeing challenges as new opportunities.
Danny: – Well hello and welcome to the IndustrialSage Executive Series. I am joined by Mike Giagnacova, the CEO for CHL Systems. Mike, thank you so much for joining me today on the Executive Series. Mike:– Oh, thanks for having me. I appreciate it. Danny:– Alright, well I’m excited to get into today’s episode. For those who aren’t familiar with CHL Systems, could you give me a high-level, like who you guys are and what you do? Mike:– Yeah, so we design and build solutions that move, make, and pack the products that feed our country. That’s the short clip of what we’re involved with. Danny:– Excellent, alright, well I’m excited to get into that a little bit more as I suspect you guys—there’s a lot that’s been going on in that industry. We talk about food and packaging and just moving all that, so a lot of things that have been going on. But before we get into all of that, this is one of my favorite parts of the episode where we get to learn more about you. We get to learn about Mike. So Mike, tell me; take me back. How did you get into this industry? How did you get into this space? Mike:– Yeah, so I was kind of born into it. My father owned a company that designed and built custom machinery, one-off machines. You would come to us; you would have a need for something that you’d have to custom design and build. So at a young age I started working as a machinist, working for my dad in that industry. Then I went to night school, Drexel University, for industrial engineering and worked during the day for my father. Then when I graduated there, I went to the University of Pennsylvania. We are just outside of Philadelphia. The Wharton School had a management program, so I took that. I went through that, that application. Then from there, worked in various manufacturing jobs learning how to make products, learning how to market and sell them. Those early days of being a machinist really have, I’ve carried them all the way through my career. Understanding manufacturing has been a huge part of my career. Danny:– Yeah, absolutely. What I think is interesting is that you said your dad owned that business, right? He was creating machines, and you’ve got a lot of, I’m guessing, some entrepreneurial genes or certainly some learnings from seeing your father doing that. Talk to me a little bit about that. Is that accurate? Mike:– Yeah, it’s pretty accurate. My dad was—he’s still alive—a true inventor, a great engineer. He went to Drexel as well, so we have a family history of Drexel grads. He was a true inventor of custom technology. You just couldn’t help but be a part of that. That’s who we were, and so some of the technology that we would use was cutting-edge. No challenge was too big, so to your entrepreneurial thing. The greater the challenge, the more exciting it was. And so yeah, I have a piece of that in me, too; not as much as my dad, but enough to get me into trouble. Danny:– Yeah, that’s always the rub right there. Enough to get you into trouble. Well let’s talk about some of that trouble. What trouble has that gotten you into? Mike:– Yeah, so I’m 59. I’ve been in this industry since I was a teenager, and been in different management positions pretty much all my life. There’s a lot of learning. You’re dealing with a lot of people. How you work with people, how you learn from them, there’s always an experience to learn. It builds who you are. That entrepreneurial spirit, for me, is really probably more driven around growth. How do you continue to grow a company that’s conservative, but at the same time it’s controlled growth? You’re not just swinging 20, 30% one way or another, and then you’re dipping back down. I think probably through my years of experience, the biggest challenge is going to be, how do you build a sustainable growth model that builds a company in manufacturing? You’ve got to remember; when I started manufacturing, the percentage of manufacturing to service was 80 manufacturing, 20 service. Now that has switched to maybe 5% manufacturing, 95% service. That’s a huge dynamic change in manufacturing. Danny:– Yeah, absolutely, and it’s continuing to evolve, it seems like just certainly on a yearly basis. Certainly with Covid there’s been a tremendous amount of change with that. Still in the same vein of your journey with this, who has had—if you could talk to me about somebody who’s had a big impact on your career? I know there’s a lot, but is there somebody that comes to mind that really has helped to shape you, to help you, to where you are today? Mike:– Yeah, that’s a good question. I think it depends upon the lens that you look through. If you look at the entrepreneurial spirit, there’s no doubt it was my father. I grew up in that. From a management standpoint, I worked at a company for a number of years called Harold Beck and Sons. They made electronic control drives. There was a manager there; his name was John Miller, still alive. His management perspective was just rock-solid. He didn’t get too excited. He didn’t get too down. He was really focused on, how do we make everybody better? He was probably my manager when I was maybe 30; I’m 59 now. To this day, I still use phrases that he shared with me back then. From a business environment, I’d have to say he was a big impact. In my personal life there’s plenty of guys that go to my church that I’ve worked with that really come alongside me, help me with my walk. Those guys are rock-solid. They may not be CEOs or famous people, but their impacts are huge. Danny:– That’s awesome. That’s great. Alright, so let’s move to… pivoting here a little bit. What, on a daily basis, what keeps you super energized? What gets you, in the morning when you wake up, you say, “Okay, we’re tackling this, or “We’re doing that”? What is that thing that pushes you along? Mike:– I wish it was one thing. The challenge is, it’s multiple things. For CHL, I think one of the main things, and one of the real benefits that I really get out of working here is the people. Really strong technical craftsmanship-type people here, and so they really get me fired up because they’re the people you work with every day. I enjoy that; I enjoy interacting with them. I enjoy being a part of their day. The growth model, how do you scale and grow at a respectable rate? We just opened an office in Texas, so we’re leaning into that space. Those things fill that entrepreneurial spirit in you. Danny:– Yeah, absolutely. Let’s talk a little bit about industry challenges and things that have been going on. Obviously there’s a lot of things going on right now. There’s a lot of things that were going on because of Covid, stuff that was going on before Covid. What are those challenges that your customers are facing right now? Mike:– Yeah, so probably the biggest challenge that a lot of our customers are facing is the labor shortage. If you go back through 2020, 2021, through the height of some of the Covid period, a lot of our customers, they may be protein providers. They may have 500, 600 people in the plant. Just to keep their level of headcount up, it was a challenge. Moving forward, what’s that challenge going to be? It’s going to be continuing to find ways to automate, to help those workers out, to take some of the jobs that are really difficult on them, and how can we automate that? That’s a place where we can help them. As of just this last week or two, the price of fuel, that’s going to be a huge problem for all of us. We’re all going to deal with that challenge. That’s the people that work here and the people that work in those facilities. They’re going to pay more for gas. But beyond that, everything that we use that has petroleum, the price is going up. Plastics, stainless steel, anything that has that in its processing is going to affect everyone. Danny:– Yeah, unfortunately. Hopefully that’s going to be a—we’ll see. Hopefully that’s a short-term bump. I don’t know; we’ll see. There’s a lot of craziness going on right now, but let’s talk about how you’re solving some of these challenges for your customers. You mentioned a little bit earlier on, you have a partnership mentality when it comes to your customers. Talk to me about, what does that look like, and how are you solving those challenges for your customers? Mike:– Yeah, that’s actually a great question. The mindset of partnering with your customer is huge for us, and what does that mean? If you’re working with a customer that is going to engage in some level of automation, for that to be really successful, it has to be a close-knit communication, a trust both ways. It can’t be, hey, I’m just going to take the lowest bidder. You’re going to get the job, and do it. There’s got to be a long-term partnership that goes back and forth. Especially with automation, it depends upon what it is. It can be robotic automation. It can be hard machine automation that you’re going to design a specific machine that can do that. But educating everybody, especially the customer, on what does it mean to own this automation? And so when you look at that, that’s a long-term play. That’s not one order, and I’m out, and I’m going to go to the next. When you really work with someone as a partner, the trust factor is huge, but also the outcome at the end. In our industry for a number of years, a lot of customers were, they made a lot of decisions just on the return on investment. Well, you’re starting to see that change a little bit. You’re seeing some of that in years of return extending out. The real benefit is that people are starting to see the value of just having a close-knit partnership they can rely on. Danny:– I’ve got a couple questions I want to follow up with. One of them I guess would be, as far as a go-to-market strategy, are you guys working directly with customers? In other words, are you working through integrators or just directly with these customers? What does that look like? Mike:– Yeah, so we are working directly with the customers in 98% of the situations. There are some situations where we’ll come in as an integrator for someone else. The business model that we have is, we’re going to take the project from inception to engineering to manufacturing to installation to commissioning, and that’s kind of like our competitive advantage. In that model, we really want to have a connection with the customer to really be able to make sure you understand what the needs are and you’re providing that. When you go through another channel, sometimes that can be… things can get lost. Danny:– Certainly. Mike:– To your one question there about how do you go to market, for us it’s really important that we don’t have one category. This is how we handle every customer. We’re really trying to market to the customer that’s going to be the best fit. That’s a challenge, but for us that’s the best model. Danny:– Do you have any stories or examples, concrete, XYZ—you don’t have to name a customer, but here is the challenge, and how you would walk them through that process? I know you mentioned hey, we’re going to do design then engineering and manufacturing. It sounds like you have a whole suite of solutions and capabilities, if I understand correctly. You have in-house manufacturing capabilities. You’ve got a really, from soup to nuts solution that can be fairly custom. Is that accurate? Mike:– Yeah, so when you look at what we can provide—internally how we do it is we break it into technologies. We have one technology group that we call CPI which is conveyance and process improvement. Then we have another group which is design/build. Now, that design/build is like a one-off. You have a custom machine that you need us to take a look at, we’re going to design and make that machine. Then we have a robotics area which would be either palletizing or pick and place cell. Then the other area would be what we would call an equipment group which would be products that we’ve designed for people several times, and maybe you’re going to try to commoditize some of that. That’s a small piece of our business, but we’d like to see that grow. To answer your question, it depends upon which area it resided in. For instance, if it was in a CPI environment, it could be a protein producer that wants to change how they’re processing a particular product or a cut up line or something like that. They would come to us and say, “Hey, here’s our existing space.” Now I need to design you a whole new layout with some technology that’s going to produce that. We’ve done that several times. We’ll go in; we’ll look at what the requirements are. We’ll come up with a design, a layout, working with the customer to meet their needs. Then upon that, we’ll design that, make it, and put it in. The other model is if it’s a custom design build. The ideal scenario in that situation is that you partner with someone and say, “Hey, this has never been made before, so let’s work together. We’ll do an engineering study, and we’ll do some initial concepting to see if it’s going to meet the needs,” like a staged design. Then if we get to that stage, if it’s approved, then you go to the next. Each model has its own path, if that makes sense. Danny:– Yeah, absolutely. Obviously there’s a lot of automation companies and things out there. Now we’re seeing a lot of investment coming in. It was interesting; before the pandemic, it seemed like we were seeing a lot of consolidation, PE money coming in, just acquiring a lot of groups and making these bigger organizations and growing through M&A. How does your organization really stand out from your peers? What’s that competitive advantage? Mike:– Our competitive advantage is really going to be one, we’re high quality. We’re known for that in the industry. Most of the area, especially in the CPI, the conveyance and process improvement, is in the sanitary design. It’s in a protein plant that has to be washed down. The level of quality of your product, fit and finish, is essential to preventing any bacteria and those types of things. That’s number one; you make a quality product and good things happen. But the real advantage that we provide is the beginning to end. You’re going to come to us, and we’re going to work with you on what the concept is. How do we solve the problem? Then we have ownership all the way to the end. Where a lot of other people in the industry, they just—and you had mentioned earlier—they do one piece, then someone else has to take it from there. The advantage, especially in this climate when the labor pool is tight—you’ll be at some of these facilities where they may have had an engineering staff; now they no longer have that. They need to rely on partners to be able to provide that solution, not just a conveyor. Without a doubt that high quality, cutting-edge technology, and we’re going to be with you through the whole process. That’s our competitive advantage. Danny:– That sounds like a very strong competitive advantage. These are not simple solutions that you’re bringing. These are very complex challenges, and they’re high-dollar. These are operational, huge changes to organizations. It’s not something that you’re going to take lightly, I would imagine. I’m not a food processor. I’m not a manufacturer. But you’re not going to take that decision lightly. That sounds like a great value proposition, a competitive advantage to me. One of the things that I’m curious about, and this may feel a little off-topic, but obviously we were talking about a lot of changes. Labor is a big issue. It was an issue before Covid, but now certainly it’s a much bigger issue. It’s a critical issue. What other challenges and changes have you seen in the organization, whether that’s inside your organization or inside the industry, due to Covid? Mike:– It’s interesting; we talk about Covid a lot, and we talk about the challenges. It’s funny; as you look back, there was also opportunity. Danny:– Yeah, yeah. Mike:– And so for us, I just had this conversation the other day. We have a remote engineer in Ohio. I have a manufacturing guy who worked for us for 35 years who’s now working in Florida. We have an office in Texas with engineers and applications guys. I say, would we have had that if we didn’t have Covid? Covid taught us how to work remotely, taught us how to work differently. We were blessed to have some really big orders, and the technology, IT, infrastructure in-house to make that happen. It really has actually strengthened us. Moving forward, the same model that we use to try to partner with customers, we’re partnering with vendors. The last year was a really strong year for us. We needed to partner with other manufacturers to help us do that work. Those relationships are phenomenal, and so they’ll help us in our growth model. So yes, Covid without a doubt had a lot of challenges, but it also had some opportunities that we may not have actually taken. Danny:– I love that. I should’ve addressed that, what opportunities. I like how you took that and you spun it, and you showed what you’ve learned and how you’ve been able to grow and take advantage of those opportunities. I think that’s fantastic, and that’s interesting when you ask a lot of our organizations about that because you get some similar answers. It creates some other opportunities by doing that, certainly, but I think it’s interesting, as you mentioned. It creates a little bit more diversity from your portfolio or your talent pool. You’re able to go and work with other people that you otherwise wouldn’t be able to work with or hire individuals who—because you had geographic constraints that you don’t have anymore. I think that’s interesting. One last question, and I didn’t send this to you, kind of on purpose. I like getting the real answer here. I’m going to give you a magic wand. You can solve any issue that you want or take advantage of any opportunity for the industry, for the industry. What would that be? And it can’t say Covid, we’re solving Covid or gas prices right now. Mike:– Yeah, that’s a great question. I’m going to qualify the lens that I’m going to use. Danny:– Perfect. Mike:– It’s not going to be the lens of, hey, this is a poultry plant or this is a pork plant. This is a manufacturing facility. If I could take a magic wand and fix an issue, it would be to change people’s mindset that welding jobs, machining jobs, service jobs, manufacturing jobs, they’re not low-end jobs. These are careers, and our country has started to devalue some of those jobs. Boy, America would be so much stronger if we could continue to build that and build a manufacturing environment where we could make things here again. That’s my lens; it may not be yours, but that would be awesome. Danny:– That’s an awesome answer. Thank you for that. I have heard that several times, actually. It’s interesting, and I try to keep it open. It’s interesting because I think—I agree. And I’ll use ourselves as an example. Several years ago we never, as an organization, didn’t have a ton of manufacturing or engineering background. We came from a video marketing agency and was working in this space and learning and had a perception like you were talking about. Had that perception, oh, it’s dirty. I don’t want to do that. We want to work with the cool technology companies. But when you started getting into it, and you started seeing what was happening, and you see true innovation, that was eye-opening. It’s been amazing, and so I think part of it is exposing—we have to expose people to what is going on, the real innovation that’s happening. It’s not, “Okay, I’m doing this job.” The bigger impact that it’s having, and that there is real innovation happening. That’s exciting. I actually, just this morning—it was interesting—I was driving my kids to school, and we’re driving by this open—it’s very interesting; I don’t know. I’ve got to maybe digest. Maybe I’m talking too much to them about this stuff. There was this open field, big grass field, and the kids start talking about, “Oh, yeah, that’s a lot of grass to cut.” And they said, “You know, they should use robots, robot lawnmowers.” which are coming–whatever, that’s here. And they’re like, “Yeah, I think it could take—if we had one per mile, maybe if that would be enough.” What I thought was interesting, and they’re just discussing this among themselves, and they’re young kids. I think my eight-year-old or seven-year-old or nine—however old; it changes every year, so I forget the ages. Maybe they’ve got a little bit of an engineering mind, but thinking about that, it was interesting. There was excitement about how they were going to solve that challenge using robotics. Mike:– That’s awesome. One of the things we are seeing, too, is you’re starting to see engineers, young engineers come out of school and then want to get the hands-on experience. We’ve had a couple engineers who started out as a mechanical engineer, designing-type position, and move into a manufacturing engineering position because they need that hands-on, they need that piece of, “I’m going to make something,” and craft it which is really encouraging. Danny:– There’s something super fulfilling with that, to get in there. And I think there’s a learning that you don’t have without that. I don’t have an engineering bone in me, so I have a deep appreciation for that. I really struggle putting IKEA furniture together. I’m not a good litmus for that, but I think there is absolutely 100% something to that. Anyways, I love your answer. I think it’s fantastic, and I’ve really enjoyed our conversation. I’ll give you the last word as we’re about to close here. Is there anything you want to leave the audience with? Mike:– Yeah, I think it is easy to look at all the negatives and look at all the challenges, but it’s almost just as easy to look at the opportunities and see what can be done. We’re a relational company, and customers are becoming more relational. That’s a huge benefit because what you can accomplish together is far greater than what you can accomplish on your own. Yeah, so 2022 is going to be an interesting year. We’re going to have a lot of interesting things happen, but we’ll get through it, and we’ll be looking at the next challenge in 2023. Danny:– I love it. What I heard is there’s going to be a lot of opportunities in 2022. That’s what I heard. Mike, listen, I appreciate it. Thank you so much for your time. I’ve really enjoyed this. For those who would like to learn more about you, they can go to chlsystems.com. Is that accurate? We got the right URL? Perfect. We’ll make sure that that is in the show notes so people can learn more about you if they say, “Hey, listen, we want to learn more about these guys. They might be able to help us.” That’d be fantastic. Again, thank you so much, Mike. I really appreciate it. Alright, well that’s a wrap for today’s IndustrialSage Executive Series. I really enjoyed it. You know, there are a lot of great takeaways. Once again, that magic wand question was a big one, all about changing the perception around manufacturing, and it’s such a big problem. It’s a really big challenge, and we need to address it. We need to expose kids and students to the industry and show them and not tell them, but really show them with all sorts of internships and co-ops. I know a lot of them already exist, but we’ve got to do more. You can tell I’m a little passionate about this, but that’s all I’ve got for you today. Thank you so much for watching this episode. Listen, if you like this and you’re not subscribed, make sure you subscribe. You can do that by going to IndustrialSage.com, going to the Executive Series, and you can subscribe there. We have pop-ups, all kinds of things that come up to allow you to do that because you’re missing out on great content like this. Also, I want to put a little plug in for a new documentary series that we are in the middle of right now. It’s a mini-doc series called Industries of the Future that we’re partnering with Schneider Electric on. It’s an awesome exploration into the manufacturing and industrial space. We’re exploring digital transformation, AI, robotics, sustainability, and really looking at companies and talking with their subject matter experts and really seeing what they’re doing, sort of pulling back that curtain a little bit. It’s a little bit more exploratory, if you will. We’re not focusing on product, per se. It’s more about process and different things in there, so check it out. You don’t want to miss it. We’re super excited about it. That’s all I’ve got for you today. Thank you so much for watching. I’ll be back next week with another episode on IndustrialSage.
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| RightHand Robotics: Vince Martinelli | 25 juin 2022 | 00:40:38 | |
Hear from Vince Martinelli of RightHand Robotics about his career journey, from coffeeshop management to startups and warehouse robotics.
Danny:
– Hello and welcome to the IndustrialSage Executive Series. I’m joined by Vince Martinelli who is the head of product and marketing for RightHand Robotics. Vince, thank you so much for joining me today on the Executive Series. Vince:– Yes, thank you Danny. Nice to talk to you. Danny:– Well I’m excited to jump into this conversation. I don’t think that we’ve had you on the show before. I know that we were talking about it a little bit before how I think we did a quick interview at MODEX in 2020, and I think you guys were part of that. That was fantastic. But first time on the Executive Series, so we’re excited. Vince:– Yes, thank you. Danny:– Before we jump into learning about you which is one of my favorite parts, if you could give me just a high-level on RightHand Robotics, who you guys are, what you guys do. Vince:– Yeah, so RightHand Robotics builds what we call a data-driven, intelligent picking platform for predictable order fulfillment. Now let me break that down just a little simpler, everyday language. Simply, it’s a configurable autonomous picking machine, and it can move individual products in a warehouse such as from an inventory tote. It might be coming from an ASRS-type system like AutoStore into an outbound order or a box. At that junction between the inventory storage system and picking the products flowing out of the building, the robot can move items. One thing that’s cool about that is an ecomm facility may have 50,000, 100,000, a million different products. Enabling a robot to pick and handle all those different things reliably is the secret sauce of what we do. Danny:– Wow, that’s awesome. It’s fantastic and super needed, obviously right now with ecomm growing exponentially, solving the big labor challenges, all kinds of stuff that I’m sure we’re going to get into. But before we do that, I want to—this is the part of the show where we get to learn more about you, and really this is one of my favorite parts. Tell me, how did you start your career journey? How did you get into this space? Were you always in robotics, in product or marketing? Tell me how things started. Vince:– Yeah, so coming out of college, my background’s in materials science, really semiconductor physics and so on. I got out of MIT, and I go into a semiconductor industry for different things. I learned a lot about designing of complex processor systems. Flash-forward another, I don’t know, key moment years later—well first off, I switched from R&D side of the world to business side and product and sales and some marketing and all these things when I joined Corning and got into the fiber optics business. Again, my interest there was more about the material science of the glass and how you make these things, and it was all cool. To cross over and work there, I kind of grudgingly took a job on the business side. Danny:– Oh, you went to the dark side. Vince:– Yeah, on the dark side, exactly. That’s the phrase. Found out I really liked it because there’s a part of communicating to people how that technology works and what you can do with it that I found I had some ability to take these complex things, talk to the PhD guys in the research lab, translate it into ideas and things that customers could gravitate to. There I worked on new products, so one thing that’s been consistent throughout my whole career is I’m always working on new products. While fiber optics was used for telecomm, we did things like work with a partner company to build a fiber optic gyroscope that was used in car navigation systems. So again, you never heard of that. Danny:– Wow, very cool. Vince:– 25, 30 years ago you could buy a Nissan car, one of the high-end models in Japan, and it had a fiber optic gyroscope as part of the navigation system with the fiber coming from Corning in the States here. That was really a cool application that was a lot of fun. We spent a lot of time looking for new market segments where fiber optics would be useful. Eventually that led me into some optical networking systems work and so on. The next big step was, I joined a start-up. So early in my career I was with big companies. This seems like a very logical step coming out of school, nice, steady career path. I meet a guy—we’ll talk about an influence that I had. I meet a guy on a flight, and we start talking about his company. It turns out they were potentially a customer of ours, but they were a start-up. I eventually joined there, but I learned a lot about networking and systems there. Now I know about how to design processor things, and I know a lot about networks. Years later when I start getting into retail and warehouses and fulfillment centers, all these things kind of come together. These are just networks and processors of a different scale and type. I probably spent, now, the better part of 25, 30 years just working on networks and processors and designs. It’s really fun. Danny:– That’s awesome. That’s pretty exciting and very interesting career path and challenge, going from materials sciences and then going over to product design, development, marketing, sales, all of that. I think that was pretty interesting about using fiber optics for a gyroscope for navigation. That’s interesting. Vince:– Yeah, and one other part—again, just to layer it in here, somewhere on that path—actually one other side bar is, after the optical networking company—I was with the company, we had an IPO, things went great, and I thought, “Wow, I’m going to go chill for a while.” I traveled, got married, and I opened a coffee shop. You might not have had that in my bio, but for a while I had a coffee shop near the beach north of San Diego, and that was exciting. I learned some capacity planning and supply chain issues and things from that business. It was there, the other thing I learned is a coffee shop, at least ours, was 365 days a year, and I could be there from 12 hours to 20 hours a day. Somewhere along the way my wife encouraged me to consider a new career path other than the coffee shop, and I bumped into a friend around that time who let me know about this company called Kiva Systems. A mutual friend of ours had founded the company, and I said, “Wow, I remember. I played baseball with a guy,” so anyways I reach out to Mick over at Kiva and scrambled, and I got a job there, joined when they had one customer. It was about 35 people. No one had dreamed of putting robots in warehouses really at that time. It seemed kind of crazy, so I took a chance with them. That turned out pretty well over time. So that’s a major crossover point. I went from coffee shop to warehouse robots in one jump. Danny:– That’s pretty awesome. What happened to the coffee shop? Did you sell it, close it down? Vince:– I sold it, and then eventually—the one positive outcome of that is, now I can make a really good cappuccino, and I’ve got a fall back plan if all this start-up stuff ever fails. I can be employed somewhere. Danny:– Hey, there you go. I love it. So you’ve got definitely an entrepreneurial gene or something in there for that. Was that something that came from family? Was it your parents or family members, they have businesses or anything like that? Vince:– Now that you mention it, if I think back when I made the decision to leave Corning and go to a start-up, this company called Sycamore Networks—I have an older brother, and he was part of Cisco Systems in the early days. In fact, he turned them down. He had a chance to join before their IPO, thought it was too risky and crazy. But he joined soon after, so before Cisco Systems became the giant networking company everybody knows, he joined when they were about 300 people or so. Anyways, when I was looking at that decision myself, he said, “Well, there’s no guarantees. Big company or small, there’s really no guarantees,” and he could explain to me in the early years of Cisco, there were good days and bad days and strong quarters, and there was always the concern that it may all fail at some point. You never know. But anyways, he encouraged me to take the leap there, and I think that made a difference. Again, I’m not necessarily saying either of us were entrepreneurial from the get-go, but when faced with the opportunity, maybe we have a little higher risk tolerance than most people, I guess. Danny:– Well I think that’s for sure. That certainly is a very common theme, and you have to. You have to have that. I’m curious; how has that—I think that that experience probably, there’s a lot that that has helped to influence the second part of your career as you’re moving in that risk-taking or that ability to see new things or other things that others might not. Is that something that you see now? Vince:– Yes, in fact it’s dawned on me in the last few years that I’m sort of an angel investor. I invest with my time at these companies. This will be my fourth start-up. The first three have two successful exits and one that we didn’t quite get there. You’re really betting with your heart, your soul, and your blood, sweat, and tears. I try to be pretty careful about which things I join and participate in. I think, again, the Kiva experience—of course, we got bought by Amazon. I worked at Amazon for a while. We actually helped redesign their template fulfillment center with Kiva as the engine, the picking engine in the middle. That was a great experience, nothing but favorable things from my point of view and my time at Amazon. Then you look at RightHand, and you say, “Oh, wow, this is another level of, could the robots make the item?” That first move, recently I did a talk somewhere, and I said, “The first mile, delivery, starts with getting the inventory out of the tote and moving.” Today the default is, you throw armies of people at it. It’s a boring job. It’s not a fun job. You stand there all day. You and I wouldn’t want to do that for too long, just stand there and move things, move the box all day. You can automate it. I don’t know; I guess sometimes from being on the inside of that industry and so on, I look at when I was looking a few years back for the next exciting challenge, and I got introduced to RightHand. I thought okay, this is coming up to an inflection point, and it’s a great time to get involved. Danny:– That’s awesome. Let’s talk about, you teased it and mentioned it there a little bit, but a big influence, somebody who’s had a big impact on your career. I know there’s probably a ton. I know for a fact there is a ton. If we could just boil it down to one person, and it doesn’t mean that this is the best one or the top one or whatever, but what comes to mind? Vince:– I’m going to name a guy. He’d be surprised if he ever listens to this. I may encourage him to, but anyways, Wade Rubenstein, great guy. I met Wade on a flight. We sat next to each other. I had gone to a trade show, again, in the networking space. It was called SUPERCOMM; some people may recall that one. Big show, and anyways the mission on that show was to sign up a particular customer for a contract and this and that. That kind of went sideways, so now I was flying home and thinking, “How are we going to explain this when we get in the office the next day?” The big deal didn’t look like it was going to happen. I sit down next to this guy Wade, and he had something with him that said SUPERCOMM, and I had a bag of literature and trinkets and stuff. We get to talking a bit, and I realize, oh wow, he’s at a company that could be a customer. They were a start-up. They were a couple of months old. As we talked—I learned later that he had seen me give a presentation somewhere and that he was already thinking that they needed someone with some of my background in fiber optics and stuff for their business. Anyways, within a few months, it turns out from that flight, from sitting next to him quite by accident, he reaches out. I get a job offer. I have to make that decision. Do I leave Corning, the really secure, well-known company at the top of that industry for this tiny start-up, 30-odd people. Again, I’ll throw one other name in there, Desh Deshpande who is a serial entrepreneur, who was one of the cofounders of Sycamore. It gave me some confidence. I met Desh and looked at his background and said, “Okay, this guy who always emphasizes dream big, think big and has gone on to a wonderful life and career of philanthropy,” past Sycamore and all. But anyways, with Wade, we hit it off, and we’re still friends to this day. It was really a changing point for me. He gave me the confidence to join the start-up, and then one of the things there was his focus on, if we need to do something, let’s do it right now. I’ll give you an example. We would get a resume in over the internet at the time; someone would submit their resume for a job we posted. This one guy, Jeff Lowe, Jeff sends in his resume. Wade comes over to my office, says, “The resumes hit two minutes ago.” He says, “This guy looks great. We should call him.” I said, “Really, we’re going to call him now? Doesn’t HR get involved? What happened?” “We’re calling him now.” We get on the phone, and we call him. He’s shocked because he just hit send five minutes ago, and we’re on the phone. He’s out on the west coast somewhere. We say, “Jeff, fly out for an interview next week; let’s get this going.” Within two or three weeks, he’s on board. Hey, if there’s challenges ahead, there’s white space on the calendar, let’s get it done and move fast. Wade was like, “If it’s worth doing, let’s do it right now, and let’s do it right, and let’s get moving.” Again, Corning was a really well-run company, all kinds of great things. But boy, that spirit was different. That was a shot in the arm for me. Danny:– That’s awesome. Great story on how you met and just that anecdote in terms of, let’s move now. I love that. That embodies that start-up spirit, and let’s go. What are we waiting around here for? Let’s move, and that flexibility you’re able to do that. Vince:– If we have time for one more, I’ll share another one. Recently we crossed paths, and he had a buddy with him. We shared the same story. 10:00 one night he calls me up and says, “Vince, any chance you can cover a meeting for me tomorrow? You’ve got to travel.” I was like, “Well Wade, tomorrow, really?” He says yeah, he had been traveling 100% of the time. He says, “My wife, she’s—I can’t travel tomorrow. I need you to help me out.” “Okay, where’s the meeting?” “It’s in Sweden.” So if I didn’t mention, our company was in Boston. I’m like, “Sweden, tomorrow.” He says, “Well the meeting isn’t tomorrow; you just have to fly out tomorrow.” “Okay, great.” So I meet him at the office mid-day. My flight’s at 5:00; we meet at 1:00. And I say, “Well what’s the topic of the meeting?” It turns out it was something that I didn’t know anything about. He briefed me for 30 minutes on it, and I’m going to meet the CTO of this company and resolve some critical issues. As I’m getting ready to leave, Wade says, “Oh, by the way—” he reaches to his bookshelf, grabs a book. He says, “Here’s a book on the topic; you can read it on the flight.” On the overnight flight I read the book. The meeting went well. We got the contract; everything turned out okay. Again, that was the spirit of the start-up we were in at the time. Danny:– I love it. That’s your consulting right there. Hey we got a—I don’t know what this is. I’m going to figure it out. We’re going to learn, and we’re going to go. That’s awesome. That’s a great story. I love that. Let’s pivot a little bit towards, talk about some of the industry challenges, things that are going on right now. Obviously I know we talked about labor. Supply chain’s a big thing right now. Certainly you were talking about the challenges of, from a picking standpoint that it’s so repetitive, but the reality of it is, what kind of a job is that? Now where we’ve got such a labor issue right now, I imagine that you guys are just, it must be crazy for you. Are a lot of companies saying, “Oh, my gosh, we need to solve this problem,” and they come to you? Vince:– Yeah, so let’s see. That’s absolutely true. I think, and again even before Covid, ecommerce, online shopping and so on was growing at 15 to 20% a year everywhere in the world. So eventually this puts pressure on—and again why does it put pressure on labor? I think no one ever thought about how they shopped. And again, if I said to people, “What’s the difference between shopping online versus going to the store?” Okay, there’s a few differences, but one of the big ones is, when you shop at the store, you provide some labor for free. You walk around, and you— Danny:– You’re the picker. Vince:– Yeah, you’re the picker. You’re the last mile delivery. Sometimes you’re the pack person too. You do all those tasks, and it’s somewhat efficient because if you go to the grocery store, you buy 50 items at a time or 20 or 50 or whatever, so your time trade-off, maybe it all makes sense to you. But when you order online a couple things happen. One is you start ordering things one or two at a time. Now you’ve exported that labor; you’ve outsourced it to somebody else, the labor that we used to provide for free. So that’s got to be accommodated somewhere. But distribution centers that feed products to stores mostly move items by the pallet or by the case. There’s some each-picking, break pack for certain goods or certain products, but it is the lower percentage of the overall volume of goods moved. Retailers all of a sudden have had this shift, and it’s been—again, I had the viewpoint from Kiva, Amazon, now RightHand. Over this last 15 years or so, people are having to deal with shipping ecommerce orders is entirely different from shipping goods to stores. It just flips things upside down. At 90-something percent, almost everything is by the individual product. Nobody buys a case, typically, online. And you buy them one item at a time, two items at a time. I’ll get 57 shipments to me over the next few months where I might’ve made two trips to the store before. I did a talk at that MODEX in 2020 where I said, “What if you projected this forward 10 years?” And you say, “Oh, my goodness, that labor content of picking things one at a time in the warehouse is going to skyrocket. There’s no way to find enough people. In fact, in the ridiculous endpoint of that, you would order it, and then you’d have to drive to the local fulfillment center to pick it yourself. That is shopping. Danny:– Wait a minute; that sounds strangely familiar. Vince:– Well there’s a point where—because the question I was trying to answer there is there a point where ecomm plateaus because you can’t just physically fill and deliver the orders? I’m sure other people looked at that at some of the bigger retailers and said, “Oh goodness, we’ve got to automate more than we were,” because even with conveyors and ASRS systems and a lot of these things, they automate chunks of the store, move, and sort in the warehouse but not really end-to-end. This is where, again, coming from telecomm, we built networking systems where you can pick up your phone, it goes to a cell tower to a back hall network to the main network across the world, all the way to someone else’s in milliseconds, and you’re connected. The grid’s network has got delays and buffers and storage and things, but even within the building which is sort of like a motherboard to a machine if you will, there is a lot of inefficiency between zones. If you can automate the interconnections in the building, it just sort of reduces friction, reduces cost, makes it simpler to fulfill the orders. Then again, I think for people who are doing that job today, we haven’t yet solved the automated delivery side of things. You can go from being a picker to a delivery driver. It might be a better career, better job. There’s all kinds of opportunities there. This is like switchboard operators switching to other jobs 50 years ago or something. The picker at the ASRS port maybe is just a temporary job patch for the last 20 years or so, just an artifact that you couldn’t automate it end-to-end at the time. Anyways, I think there’s a lot of opportunity and change there, mostly for the good, I think. Danny:– Yeah, absolutely. I agree, and I think it’s exciting. It’s interesting. Obviously things were—you mentioned at MODEX, this was pre-pandemic, sort of, I guess. It was right before everything went nuts. Obviously things were—what do they say? The puck was going that direction anyways, but then obviously it really accelerated. I think it’s fascinating as technology increases and it creates that ability. I remember some of these delivery services that were rolling out, or trying to roll out in the ’99 dot com era, and then even beyond that. It was so exciting at that point. Oh wow, one day, this is cool. Then it was just too early. The technology I think was too expensive at that point. The internet just wasn’t as prevalent. It just wasn’t the right time, but what I think was crazy, oh, just wait a few more years, and wow. Vince:– When you listen to—and I listen to some business podcasts and things. After companies are big and they’ve succeeded, it’s easy to say, “Oh yeah, we knew all along how things were going to play out.” But most of the guys, when they’re really pressed, and there is this one particular podcast that I listen to sometimes. When they ask the person, was it hard work? Was it brilliant intuition? Was it luck? Was it timing? It usually comes back to luck and timing, for start-ups anyway. You’re not driving the whole world. You’re not driving the trends or whatever. Hopefully you’re at the right place at the right time and then reacting and iterating and evolving. It’s never going to be quite perfect, and you’ve got to be ready to adjust. Yeah, same thing for us and, again, Covid. On the challenging side for us, we went from a company where everybody went into the office every day and worked to 90% remote, and now we hire people in other parts of the country or other parts of the world to work for us directly which we probably wouldn’t have done before. Some of our projects where we would have had engineers on-site, we have projects in Japan. Travel gets closed off, you can’t go there. Now we’ve got to train the customers and the partners that we have to do things that only our engineers would have been doing before. We had to accelerate that which pulled it in by a year or two from what we would have done otherwise. To keep the business going we turned a lot of things inside out and upside down, and here we are. We’re on the other side and still in a position to play to win. Danny:– Yeah, that’s awesome, and it’s exciting. I think you’re right about the luck and timing, but then pivoting, innovating, that continuous improvement piece. Speaking of pivoting for a second, I’m curious. As you are doing marketing—head of marketing and product—I’m curious. I’d love to talk a little bit about marketing for a second. One of the things that we constantly hear and I think that everyone is curious, trying to figure out, go-to-market strategies, where do we put the investments? What do we do? What is working, and what isn’t? We’re in such this environment that has been so consistently inconsistent, I think, over the last two years in particular. Let’s take trade shows for example. It seemed like summer of last year they were really starting to open up a lot more, a lot of stuff in the fall, and then as winter came, Omicron, everything just really nosedived. Early Q1 I know hearing about NRF was super low. CES was super low. We’ve got, as we’re coming out of this stuff, I feel like my general sense—if I looked at my little crystal ball, but it only goes about six months out. I feel like hey, things are opening up. Trade shows are going to be back, whatever. But I’m curious. What are your thoughts on that, and how have you guys been handling this whole—feel like you’re learning to drive a stick shift for the first time. First gear, second gear, you know. Vince:– I think again on our marketing side we always have a bit of a portfolio of investments. We got digital and social media, website, these things. We’ve got events, trade shows, things like this conversation. I think for a start-up, one of the things in the early stages—and when we onboard new employees at our company and I do a training on marketing for people, I say, “Hey, we can’t presume anybody’s ever heard of us or knows what we do.” We’ve got to get out there and evangelize that and keep that out there. In the earliest days of our company, if you’re familiar with the crossing the chasm model of technology adoption, well the innovators and early adopters are looking for people like us. Inbound marketing works pretty well because people are seeking out that next new thing. They want to be the first ones to use it. Now as we just raised some funding, we completed a Series C, and we’re on a new growth trajectory. So now we’re looking at things like account-based marketing which is the buzzword for, how do you really target the right guys in the right industry, right company, who are likely to be your qualified customers and again, maybe haven’t gotten comfortable yet or know enough about your company to pull the trigger and reach out to you, so can you start to take that to them a bit. Then the trade shows, we’re cautious about, we don’t have all our eggs in that basket. We went to NRF recently, and actually I think the other thing about our business model, we have two paths to market. One is selling direct to the end customer, the end retailer. But many of those firms work with system integrators, so we’ve been developing a partner program and channels program where we’ve been designed in with the system integrator, and when they sell the automation suite for the whole building, it will include some robots, our RightPick system from RightHand. At these shows we are meeting end customers but also integrator partners and companies to work with, so there’s value to that. Again, we’re playing on two or three levels and thinking about how to place our bets. There’s no one—you and I talked briefly earlier. There’s not one, single solution here. There’s not one-size-fits-all, so where you’re at in the market adoption curve, scale of your company, resources you have, it’s wise to not load up 100% on any one channel. The trade shows are important I think too, by the way, because we also see media there, analysts there, and other people, so back on that brand recognition and the awareness that we’re out there with something useful. This is a chance for us to get that message out, and we hope there’s enough customers there to really generate some pull from them as well. Danny:– Yeah, absolutely, I appreciate that. It’s good. Like you said, you’ve got to have that diverse portfolio, especially in a world that’s constantly changing. Let’s be honest too, the marketing and sales world too has been shifting especially when you look at all the MarTech and everything that’s been going on. It’s exciting. One of the things—congratulations on Series C. That’s exciting. And I should’ve asked this beforehand but totally did not. How long has RightHand been around? When was the founding of the company? Vince:– Yeah, 2015 was the official founding date, so about seven years now. We are right around 85 people or so, and again I think as we look forward, one of the big things on our plate this year is, we’re going to probably double headcount size, give or take. Recruiting, finding the right people, there’s all kinds of… It’s been—what’s the right word? Exciting for me to see in the last several months in particular the kind of quality of people we’re able to find and recruit. It’s a real competitive market out there. Danny:– Oh, yeah. Vince:– We have an interesting technical problem to solve. We have a really good culture of the company, and it’s really exciting the kind of level of folks we’re getting and finding. And then again, opening up our recruiting where some jobs don’t have to be in the building every day. We have people living all over. This is a new challenge by the way too. If you said, “As a competitive edge, how do you manage a team of 100 or 200 people when a good chunk of them never visit the office or see at once every three or six months?” They’re not even in clusters. An older model would’ve been, oh yeah, after we’ve got an office in this city, make people go every day. But no, this is everybody working like I am today from a room in their house somewhere. How do you keep that cohesiveness and interaction? This is something—we’re not the only guys trying to figure that out, but we’re actively and energetically putting time and thought into that to make it as good as we can. So far it’s pretty encouraging. Danny:– That’s awesome. That’s exciting. What I’ve heard too from other companies as well as you were mentioning earlier, the whole work from home now opened up to, well we probably wouldn’t have done that, but then now we have this diverse talent pool that we can draw from because of that. I don’t have to look at just these geographies to be able to hire new talent. We can go beyond that. It possibly opens up to more capabilities than what we had initially thought. The trade-off being, as you mentioned, that obviously is a big challenge to how do you instill culture? How do you—you mentioned cohesiveness. I think it’s lots of pros and—I still think they’re pros. It’s just, they’re opportunities versus challenges. How do you make that adjustment? I think that’s interesting. What would you say—2015 you guys started. There’s a lot of other robotics companies out there. We’re just seeing lots of activity, lots of VC money, lots of stuff going on. Relative to your competitors, what is your real strong competitive advantage? Where is your points of differentiation? Vince:– We talked a lot about the fact that we provide a picking machine. Again, at one end of the spectrum there’s folks who provide some aspects of the software so the vision system can work, but then you need other partners to pull it together into a machine, and then it still needs to be integrated to other things in the warehouse. We think our business model where we’re bringing a vision, the gripper, the AI intelligence, all together in one package, in one module, we think that’s a differentiator for many people. In the early days we didn’t talk about it as much, about our gripper. It doesn’t look like my hand, but I have to do that when I say gripper. Danny:– That makes sense. I like the visual. Vince:– The genesis of our company comes from a group of researchers, our founders, who were working on robotic grasping and manipulation in their PhDs and post-docs. The worked on a DARPA challenge and won this challenge of designing a gripper that is really good at doing complex tasks, so picking things up and so on. When they started the company, actually we would sell—when I joined in 2017 we were still selling kind of a research-grade gripper to academic institutions. This picking and warehouses is the main thrust, and so we sidelined that other business there. For a few years we didn’t want to get confused and have people think we only sell grippers because we weren’t a gripper business. We kind of downplayed on the marketing side and said, “I don’t want to talk about grippers all the time because then people pigeonhole us.” Now as we look ahead, we’re like, oh, no, our gripper, which has a suction cup like every gripper out there has to singulate and pull items up. But then we have some flexible, compliant fingers that really help stabilize items so you can move fast. You don’t drop things; You don’t fling them, with have sensing integrated into the grippers, so there’s a lot in our gripper technology. Again, over the years I’ve been with the company, other picking companies and other people have approached us and said, “Hey, can we license the gripper? Can we buy the gripper?” It’s like, “Well no, that’s ours.” An indication that, oh, we might have something special there. Danny:– That is, yeah. Vince:– Sometimes competitors want to buy it or license it from us. Then I think it depends on the competitor, but we just have a single-minded focus. This is the only line of business for us. There are large companies and traditional system integrators who will start up a robotics activity. They hire really bright guys, capable people and so on, but you mentioned the funding. We’ve raised 90-something million dollars, so if you want to build a really great, autonomous picking system which is as different from a factory robot as an autonomous vehicle is to a traditional car—it’s a whole different thing—if you want to do that, you’re not going to do it with three guys in the lab somewhere, even if your company’s got 10,000 people. It’s how many can you apply to this problem, solving it and doing it well and productizing it? We’ve got our, closing in on 100 people. That’s all we do. So I think that focus, it depends on which competitors and who you’re talking about in the landscape, but the kind of solution we’re providing, the fact that it’s designed to work and play well with integrators, the gripper, these are some of the advantages we’ve invested in, but then because we see that they’re differentiating us with the end customers and partners in the market. Danny:– Excellent, sounds good to me. Very interesting. I love when you were talking about with the grippers, too. You say, hey, I think we’ve got something here if we’ve got competitors wanting to license it or buy it or what have you. I think it’s great. Like I said, congratulations on the closing of the Series C. Sounds like that’s going to go a lot into R&D to continue to grow and to solve these challenges like you mentioned productizing stuff. Vince:– Engineering and recruiting, don’t forget recruiting. Danny:– Oh yeah, a lot of recruiting. So if anyone’s out there who’s interested and want to say, hey, listen, interested in an opportunity. We might know a company that’d be interested. Vince:– Yes, thanks. Danny:– Excellent. Vince, listen, I’ve thoroughly enjoyed our conversation. We have covered a wide spectrum of topics over probably 40 minutes or so. I personally really enjoyed it. I loved hearing your story, your background. I loved hearing about the airplane story—two airplane stories that you gave us, one how you met Wade initially, and then the second airplane story on how you had to read a book and school up on whatever topic that was. Came in victorious. Closed the deal. Vince:– Yeah, it was gigabit ethernet. Talk about a book that’s tough to read on an overnight flight, it was everything you needed to know from an engineering standpoint about gigabit ethernet standards. Danny:– Okay, that sounds—yeah, very good. Vince:– I made it through, cover to cover. Danny:– That’s awesome. Well we talked about that; we talked about industry challenges. We talked about you guys, your competitive advantage. We talked about a lot of things. I think we’ve got a lot of information here, and thank you again for your time. I’ll put out there, anyone who is interested, like I said who is watching or listening, if they want to learn more about you guys, they can go to righthandrobotics.com. Sounds like you guys got a lot of things going on. Thank you for your time. Vince:– Yeah, thank you very much, Danny. I really appreciate it. This was fun. Danny:– Alright, well that’s a wrap for today. We covered a lot. I especially loved hearing Vince’s story and the fact that he owned a coffee shop and very clearly has an entrepreneurial spirit having worked with so many start-ups over the course of his career. I loved hearing that RightHand Robotics story, what their value proposition is, how they’re differentiating themselves in the market. It’s exciting to see as we continue to see more innovations and solutions in the industrial space to address labor and supply chain issues, and I’m excited to see what the future holds there. Well that’s all I’ve got for you today. Thank you so much for watching or listening. Listen, if you’re not subscribed on the series, you need to make sure that you jump on that today. If you’re not on IndustrialSage watching there, maybe you’re listening on the podcast. Go to IndustrialSage.com; you can subscribe because you’re missing out on great content like this. You don’t want to miss out anymore, so get on that email list. We’ll send you an alert when this comes in. So that’s all I’ve got for you today. Thank you so much. I’ll be back next week with another episode on IndustrialSage.
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| PFS: Mike Willoughby | 04 juin 2022 | 00:47:34 | |
Mike Willoughby of PFS discusses his winding tech career, and how he’s seen the ecommerce market evolve since even before the internet.
Danny:
– Well hello, and welcome to today’s IndustrialSage Executive Series. I’m joined by Mike Willoughby who is the CEO of PFS. Mike, thank you so much for joining me today on the Executive Series. Mike:– Oh, it’s my pleasure Danny. Thanks for having me on. Danny:– Well I am excited to jump into today’s episode. So you’re coming in from Dallas, Texas, and for those who are unfamiliar with the weather going on right now, we were talking about beforehand, you’ve actually got snow going on there. Mike:– We do. It’s unusual. Texas is not known for having a lot of snow events, but this is our second this year. We were actually talking earlier about the one we had last year, so we’re definitely not getting a repeat of that, thank goodness. Nobody wants to spend a week with spotty power and the kind of freeze that we had a year ago. So just some nice, pleasant snowflakes going on outside my window. Danny:– That sounds nice, not like what you guys had last year. So glad it’s— Mike:– Definitely not. Danny:– And like we were talking about here, it’s crazy because it’s 70-something degrees over here. Whatever you got’s coming over here, so we’ll see what happens. – Have fun with that. Danny:– Thank you. Alright, for those who aren’t familiar with PFS, what do you guys do? Mike:– Well, so PFS provides order fulfillment services, to put it simply. We provide for our clients a premium order fulfillment solution, so if you think about brands that care a lot about their unboxing experience, what it really means to get, say, a Chanel health and beauty product or a high-end luxury jewelry item, you’re probably not expecting that to come in just a plain brown box with a bunch of air pillows around it. You’re probably expecting that it’s got some boutique-caliber experience. We do that for our clients. It’s a very non-Amazon kind of experience where you would equate that with, if you were going to a boutique and you were going to shop that boutique, you’re going to carry that package out. You’re probably spending a decent amount for the product itself, and the experience that you’re going to have when you actually receive that product yourself if you’re shopping in the store, you want to have as much of that as possible if you’re going to receive that package on your front door delivered by a courier. We provide a fulfillment experience across both the way that we manage the order as it comes into our systems, the way that we process payments, ultimately the way that we take the product out of our fulfillment centers, package it appropriately for each brand that we support, and then tender it to a carrier to get it to your doorstep and then provide the customer service that goes along with that, if you have a question about your product. And we want to do that in a way that reflects the brand, that we are not in the way of that at all. You’re never going to see the words PFS on any kind of packaging, on an invoice, your interaction with a customer service agent. Our intention is to be on-brand and reflect the brand that we’ve been entrusted to support. So that’s what we do. Danny:– Excellent, very cool. So yeah, very different than a traditional Amazon experience where the experience is the big piece of value, right? Mike:– Right. Well, you know with Amazon it’s all about efficiency, and they do an amazing job of creating an efficient transaction. We want to be efficient, but at the same time we want to create that exceptional experience. It’s the mission of the company to provide exceptional experiences for our clients and their customers. Danny:– Very cool. Well, I’m excited to get into that a little bit more because this sounds a little bit more unique than some of the other companies that we’ve been talking to where it’s all the same sort of thing. Obviously you’ve got different packaging sizes and whatnot, but it sounds like this is very much different. So we’ll get into that here in a second. But now is the section, the time where we get to know more about you. We want to learn more about Mike, so Mike, tell me. How did you get into this space? Take me back. Did you go to college for this? Did you, as a kid, say, “This is what I want to do”? What was that? Mike:– Yeah, I think probably like a lot of entrepreneurs, like a lot of business leaders, my journey is a bit of a winding journey, and I certainly didn’t—was sitting in my first grade class think, supply chain, logistics, transportation, those things sound cool. I want to go do that. In fact, it wasn’t until I was actually in college, my sophomore year, that I stumbled on technology as something that I really loved and that I had an aptitude for. One of the things that I think we’ll probably talk about is influencers. Who influenced you in your life? I think about a professor who recognized something in me and said, “You’ve got a real knack for technology.” And we’re talking about early 80s when I was at university, so technology wasn’t the kind of immersive, ubiquitous sort of experience that we all have today. That’s what got me started on the current journey that I’m on is an aptitude for technology and for solving problems using technology. I went and got my degree in information systems. I started my career with a consulting business that I started while I was in school. I really started that business out of necessity because I was in love with my girlfriend at the time and wanted to get married while I was still in school, and the only way that was going to happen is if we could earn a living while we were actually trying to finish out our degrees. I decided I better start a business and make some money. I did that by doing some work around the oil field, helping oil and gas businesses that were in the area of Texas where I went to school, and just put that sort of expertise to work and started to help people solve technical problems doing some programming, doing systems administration, that sort of thing. That small business grew into my first business that was all around custom programming consulting, that sort of thing. I sold that business to my partners in 1994 and started a software company that was oriented around commerce. We didn’t call it ecommerce at the time. In fact, the software that we actually created was a CD-ROM based application where you put a catalog on a CD and shipped it out, and along with that your pricing tables and everything went out for the specific customer. It was an early version of ecommerce, but it wasn’t HTML and browsers. It was based on CD and an application that we shipped. But a couple years after we started that company, it became obvious that the internet was going to take over providing content. Instead of getting a CD-ROM, you could actually just go to a browser and pull up the content. So we converted our application into an ecommerce application, and really the timing was perfect because it was the dot com boom at the end of the 90s. And so one of my biggest customers was a company called Priority Fulfillment Services, we now refer to as PFS. They were using my software to help their clients solve ecommerce problems in the late 90s, and we were so successful that the CEO of the company at the time came to me and offered to buy my company out in order to have access, exclusive access to the software that we were providing. And in 1999 it seemed like the perfect time to join a company whose focus was on ecommerce. That’s what got me into logistics is the application of technology to this ecommerce problem. I guess the rest is history as far as PFS is concerned. The last 22 years have been an amazing journey as we participated in dot com boom and a lot of bleeding edge kind of things to what does it look like to have a mature model and to do ecommerce 22 years later when it is rapidly becoming the way that people want to interact with the brand? Danny:– I think that’s a fascinating story. A couple of questions that I wanted to circle up on, I think it’s very interesting about the, particularly around the dot com, the 99 boom. But there was also not just the boom; there was also the bust. We had a lot of failed dot com companies that came in. And I am curious; did PFS, when did they start? Mike:– Priority Fulfillment Services was actually started by a wholesale distributor called Daisytek International in 1994. Danny:– Okay, alright. Mike:– And the purpose was to provide fulfillment services to the kind of clients that Daisytek had which are IBM, Hewlett Packard, Dell, basically high-tech products and consumables. And so we provided fulfillment services, customer care, and order management back in the mid-90s. As the company grew, as the subsidiary grew, we started to have brands approach us that had an idea to sell online but had no clue how to actually deliver a product that was sold online. So they were asking us to solve those problems around actually fulfilling orders that they were taking through their websites. And so we started to have clients that have product categories that were way different than anything Daisytek had. We had investment bankers that were working with Daisytek who came to the parent company and said, “We think this subsidiary that’s doing $30 million a year is probably worth four or five times as much as the parent company,” which everybody thought was ridiculous. How is that even possible? But they were right. We did a spin-off of PFS in 1999. I joined shortly before the IPO, and they were right. This $30 million fulfillment services company that was not profitable had a billion-dollar market cap in early 2000. March of 2000 happened three months later, and just as quickly as we shot up, we shot down. But the thing that really sustained the company was the blue-chip clients that we had, the folks like IBM and Dell and Hewlett Packard. They had the staying power where some of these dot com booms that became busts were gone overnight. So we were really fortunate to have the blue-chip clients that we had. Danny:– That was my next question. I was curious. Hey, what was the secret sauce that kept you going? That’s pretty interesting. Obviously you had those guys in your pocket, and you were servicing them. That was helpful. Fascinating actually, really, really interesting stuff. I want to back up a second. You talked about how you started the company—I want to make sure I heard this right. Did you start—you said the first company. Were you in college when you started that? You said, “Hey, the motivation was I need to start a living.” I find that interesting because we’re talking about entrepreneurship there. Is that something that you were predisposed to? Did you come from a family of entrepreneurs? What did that look like? Mike:– Well, so I didn’t necessarily come from a family of entrepreneurs. I came from a family of people who felt like it was important to stand on your own two feet, so to speak. My grandparents were farmers and ranchers. My father grew up in the oil field while he had a technology-oriented job. It’s very much an industry, and where I grew up in west Texas is a place that inspires doing what you can to support yourself and stand on your own two feet. My parents encouraged me at a young age to try to provide for myself and the things that I wanted to have. What are you going to do to earn those things versus them being given to you? Paper route at an early age; I worked in a restaurant busing tables in order to afford my first car when I was 16. That kind of work ethic I think maybe you might describe it morphed into entrepreneurialism in college where my giftedness sort of crossed with the need to support a family, at least the two of us that were starting our family. It just seemed like the obvious thing. Here’s a passion I have. Here’s a giftedness I have. Here’s problems that need to be solved, and I really loved to solve those problems, so why not combine the thing I love with making some money? It just lit a spark. It lit an entrepreneurial spark that has served me well, not only in the two businesses that I started, and the second one I ultimately sold to PFS to join this organization, but just thinking about how innovative this company has to be in order to thrive in such a dynamic industry. If you are an adrenaline junky like almost everybody who works at PFS is, this is a place that just feeds that because it’s always changing. There’s nothing ever status quo about this business. And if you’re going to rely on status quo, you’re going to quickly be out of business. Danny:– Absolutely, yeah. Yeah, those who don’t innovate, die. I think it’s fascinating on the entrepreneurial standpoint that it wasn’t something necessarily that you were predisposed to. You mentioned work ethic. How did you decide to start your first—were you just, okay, I have this problem. Alright, I need to do this. I need to make some money over here, and I want to be able to support a family. I’ve got some good skills here. What was that decision like? Obviously some opportunity presented itself, and you said “Hey, I think I can”—because not everybody just, in college, says, “Hey, I’m going to go start this business. Let me go start doing that.” What was that for you? Mike:– Well my story I think is probably going to be similar to a lot of people’s story which, sometimes it’s more important who you know than what you know. The way that I got started was, frankly an influencer in my life, the department chair of the information systems department at Abilene Christian University where I went saw something in me, and he actually had a friend who was working, had an oil-based business in town. He said, “My friend needs help, and I think you could help them. I know you know the programming language that he uses to run his systems, and he just needs a little bit of help, so can you go talk to him?” So we had lunch and talked about his problem and said, “Sure, I think I can help you.” I got in and made a change to a program, and anyway, he said, “Wow, really appreciate that.” He paid me $500 for two days’ work, which I thought was amazing at the time. Like, wow. Danny:– Yeah! Mike:– I’m going to get rich. But one thing led to another, and it was word of mouth that, helping him solve that problem and some more problems that he had. Then he referred me to somebody else, and pretty soon I had a business. It’s part jumping on an opportunity, but it’s also part having somebody who is connecting you with other people or somebody who has a problem that can be solved, and your talents can be put to work. I am definitely not the kind of person who says, “I am a self-made man,” or, “Pulled myself up by my bootstraps,” or anything like that. There’s a lot of people who were helping along the way to get me to where I am today. Danny:– That’s cool. I love hearing stories like that. I think it’s fascinating. It reminds me; you were mentioning oil in Texas. There’s a story that I heard recently, actually, of two college students in Houston—I believe they were in Houston—and they are doing bitcoin mining. They’ve created this bitcoin mining basically out of a shipping container, and they’re deploying them on oil platforms I guess because the natural gas that gets—I guess when they’re drilling for oil—I’m not super into oil. I don’t understand all of it. But what I was told is that you hit some natural gas; they have to burn it off. And so these guys said, “Hey, wait a minute. Let’s turn that into some energy. We’re burning it off,” and I think they did 4 million in bitcoin mining or something this last year. It’s opening up this whole thing. I think that’s really interesting. Mike:– Yeah, and how somebody would take an old-world industry like oil and gas production and the most high-tech industry you could think of, bitcoin mining, and somehow create some combination that makes sense. I’ve often looked at the flare on an oil platform and thought the same thing. Why are they wasting all of that natural gas just burning it off? Somebody saw the same thing and did something about it, so congrats to them. Danny:– Yeah, it’s interesting. That’s a whole other conversation we could have. You have a crypto-currency that is actually really expensive to produce. You’re like, wait, what? Anyway, so that’s a whole other thing. We could go into a big rabbit hole there, but I’ll bring it back. Okay, so really interesting story. Obviously you were talking about a pretty big influence there in terms of getting things going, somebody who said, “Hey, I see something in you,” and you take it, and you ran with it. You guys were able to sell that first company and then the second company into PFS, from what I understand, and then you guys were able to navigate the whole dot com bust issue and then continue to innovate and grow from there. You said that you have to innovate, and that’s constantly what you’re doing there right now. What has that change looked like over the last several years? 99 to 22, obviously there’s been a lot of change, even from 2019, but then obviously we had a lot of change in the last two years. What does that look like? Mike:– Yeah, well it’s a fascinating story, and I could take several hours to tell the whole story. Let me condense it for you. So this is what it looks like. Coming out of the dot com boom, as I’ve mentioned before we had the benefit of blue-chip clients that we were able to rely on when some of these other fly-by-night, as it turns out, ideas came and went. But we also discovered, I would say around the 2004, 2005 time frame, that we were really good at taking care of some complicated order fulfillment problems. We had some early clients that were asking us to do difficult things that you just didn’t see in a typical third-party logistics kind of situation, and especially the fact that we were bringing technology to bear to solve problems. It wasn’t just, “Well we put your stuff in a warehouse, and we’ll pick it and put it in a box and ship it.” We were actually solving some pretty complicated technology problems. So we decided that it would be in our best interest, and it would be a great commercial value to try to do as much as we possibly could around ecommerce and create what we called an end-to-end solution where we could take care of creating your website, designing your website, deploying your website on top of a platform, do all the order processing and the fulfillment, and that way if you had a brand and you wanted to come to us and say, “Look, I want you to just take care of all of this stuff. I’m going to do all of the advertising and manufacturing of this product. But then you take it, and help me put up a website and sell and deliver and all these things.” And so we built our company from 2005 to 2020 around this notion that we could help a client completely with their ecommerce problem. And we built the company that way. We built a professional services subsidiary called LiveArea that was built to design, deploy, help to manage the technology associated with selling online and were very successful doing that. But we also recognized that the trends that were happening in our industry, say five to seven years ago, were driving clients to start to really look at best-of-breed solutions and have multiple partners in an ecosystem to help them out. We started to run into headwinds associated with this bigger, diverse kind of strategy that we had, and we also recognized within our business that the better that we got at these professional services and at this kind of order fulfillment, the more different the two sides of the business became. As we were looking at what investment we want to make and what innovation has to happen in the two parts of our business, we decided that we really wanted to take advantage of tailwinds in our industry and specialize. So we went from diversification to feeling like it was in our best interest to specialize in some areas where there really were some very strong tailwinds. So we sold the LiveArea business last year, very successful transaction for $250 million. It was about a $90 million business, so that’s three times revenue. Danny:– Congratulations. That’s a great multiplier. Mike:– Pulled off a really good transaction for our shareholders, but what it allowed us to do was to really focus on the area where I feel the most growth potential is. One of the things that’s happened over the past two years that you’re aware of is that everybody really doubled down on ecommerce as the best way to deliver product to a consumer when that consumer didn’t want to get in their car and drive to a store or weren’t able to get in a car and drive to a store because the stores were closed or they were locked down. So we saw a massive increase in the growth of ecommerce just in a one-year period as retailers, by necessity, pivoted to ecommerce and as consumers, by necessity and then by choice pivoted to ecommerce. And we found ourselves where we have a premier order fulfillment company that has all the capabilities that we do with great technology and an amazing experience and an amazing set of clients to refer to and amazing tailwinds. We’re, I feel, perfectly positioned to take advantage of this evolution in ecommerce and to drive a lot of growth from just the opportunity that we see. Expansion, diversity, and then coming back to really focusing on the thing that we think has the most potential to drive growth which is this order fulfillment and just all the changes that are happening in our industry around how you actually get product to a consumer’s hands in an amazing way. Danny:– Yeah, absolutely. Quite the journey in the story there, and obviously there’s a lot with technology and how things have changed over those periods of time to make it easier. It’s kind of funny; when you were talking about it a little bit earlier when you guys were a little bit more diversified, it made me think of Tim Ferris and the whole four-hour work week, the premise being drop shipping. I remember that was a huge—it’s still very big. You see the evolution of Shopify and all these different things that are happening. Right now, the types of companies that you engage with: what do they look like in terms of size and volume? You were mentioning some brands specifically before that were a lot more specialty brands. Is there a particular sweet-sized company that you deal with? Mike:– It’s not necessarily a size from a revenue perspective or something. What’s going to be indicative of a really good relationship for us with a client and a true partnership is where that client really has a passion for the experience that the consumer’s going to have. I mentioned earlier, this unboxing experience. That’s usually how it’s expressed for us is, what is it going to look like when that person receives their package and opens it up in the way that the product is packaged, presented, potentially even the way that an assortment might be put together? There’s something about that experience that they care a lot about, and so what that does is, it creates difficulty in how you actually fulfill an order as compared to what you might see in a typical sort of warehouse. You’re having to gift wrap boxes. You’re having to personalize products. You’re having to work to make sure that that brand experience is what the consumer’s going to experience just like if they were shopping in the boutique. So that’s the common thread that you’re going to see through all of our clients is that they are passionate about the experience, and they are looking for something that’s differentiated compared to a typical just general merchandise retailer or Amazon, who I mentioned earlier. That could be across product categories like jewelry, especially luxury jewelry, accessories, luxury fashion, whether it’s handbags, footwear, apparel items, but particularly the more high-end luxury type brands. Our biggest product segment is health and beauty, so if you’re going to buy a beauty product you probably care about how it shows up. You probably want to have some samples that come along for the ride that invite you to experience the brand in a new and different way. You may even want to be able to choose the products that go into the pallet that you’re going to receive. Those are all difficult fulfillment challenges. They are difficult order management challenges. You may want to pay with PayPal; you may want to pay with Apple Pay. You may want to pay with a traditional credit card. So there’s complexity around how you manage the order from that perspective. But the biggest thing is going to be when it actually arrives on the customer’s porch, that she’s going to be able to have an amazing unboxing experience, and if there’s any question whatsoever she’s able to get on the phone with a real person that’s in her cultural context that she can talk to to say, “Look, I got a question about this, and I know that you’re going to relate to me, and you’re going to relate to my product. You’re going to relate to my experience, and you’re going to be able to help me solve my problem in the same way that if I was walking into a boutique. I expect the person behind the counter’s going to be able to help me with that problem.” So that’s what we do, and if you look at it across our entire client portfolio, you’re going to see that in every single client, that that’s their expectation for that kind of experience with their customer. Danny:– That sounds very cool. I like the value proposition, and you talked about the unboxing experience. Do you guys get involved from a design standpoint? Or is it, okay, so it’s, hey, this is what it needs to look like so we can create that feeling, and then here’s how we’re actually going to be able to deliver that experience and all the technical nuances there. That sounds like fun challenges. I totally see how you’re saying that things are not the same because it’s not a set it and forget it, here’s the template; here’s A, B, C. It’s A through Z plus whatever, right? Mike:– That’s right. Danny:– That sounds super interesting. As far as industry challenges that are going on, obviously with the pandemic, everyone—you were referencing a lot of customer changes and whatnot. How has that impacted you guys? I imagine it would impact you guys in a little bit different manner, maybe, than those who are specifically pushing out the same boxes or same sort of sizes. I know I’m generalizing here a little bit. What was that impact for you? Mike:– Well, so I do believe that everybody experienced some of the same kind of things from the last two years, one of them being, how do you respond to completely-unexpected scale? That happened for us in March through July of 2020. We actually have a graph that shows what happened to our order volumes coming in from our clients during that time period compared to the previous year which was a typical year. If you look at it, there’s this mountain that happens in Q2 and early Q3 of 2020 where we saw an exponential increase in orders coming in to our platform from our clients because they were shifting all of their orders to their ecommerce platform when the stores were closed. So one of the things that happened across our industry was surprise scale. Some providers, some retailers, some businesses were able to respond to that in a way that captured that demand, but many found themselves at the mercy of that demand and disappointing clients, unable to fulfill orders, unable to respond to that unexpected increase. We built a company, as I said earlier, that is able to provide that kind of premium experience and scale the business which is, it’s pretty unique in my opinion. The fact that we were able to turn that on at a moment’s notice in March of 2020 and say, “Okay, here’s unexpected demand, but we know how to do this. We do this every, single year during the holiday season.” And able to scale to that unexpected demand I think is different than a lot of people. And even somebody like Amazon who you would think would scale to be able to scale at a moment’s notice, you saw them saying, “Well we’re going to have to not take certain product into our facilities. We’re going to prefer other types of product. We’re going to potentially put our finger on the scale when it comes to which providers we’re going to support and which ones we’re not going to support as an indication that they even had trouble scaling to unexpected demand.” And then I think more recently one of the things that you’ve seen is our industry is reliant on the human factor. You’ve got people that are working in facilities that help make things happen, that are picking product and packing product and shipping products. You’ve got the—not that we do this, but in our industry you’ve got people driving trucks to deliver product to people’s doorsteps. There are humans involved in the entire supply chain. And as labor has become constrained as we’ve seen wages increase, you’ve seen a lot of business really struggle with, how do you adapt to that very rapid change in the availability and the cost associated with the human factor? We’ve always had an automation philosophy that says, “How do you help people be successful with automation versus coming in and trying to completely replace the human factor with automation?” We feel like augmenting the workplace and our people with effective automation is the best way because it’s really impossible for a robot to package a Chanel package in the way that Chanel would want. You have to have, in my opinion, people that are surrounding this experience that you’re creating, but you also want to help them to be as effective as they can. So our automation and our philosophy is that we want to own the most important automation where it’s the most differentiating was a key part of our ability to scale quickly and still provide that experience. We’ve learned how to quickly expand, quickly launch a new facility, and enable our people with the kind of technology required to be successful and in the process help our people to feel like they’re really contributing to supporting the brand that they’re working with in a way that doesn’t make them feel like a robot. They’re not showing up to a facility, and they just see product going by, and they’re basically just acting like a robot. They’re actually contributing to an experience that they can see and maybe even envision somebody’s going to actually have when the box arrives on the doorstep. And I personally think it elevates the human factor which is an important thing for us. We’re not looking to replace people with robots. We’re looking to help them be more successful with the right kind of automation. Danny:– Yeah, absolutely. That’s one of the really big talking points is, as a lot of companies have been looking at automation before, then pandemic, it was we have to automate because the labor is simply not there for multiple reasons. Obviously now there’s a lot of challenges with that. However, some of the stigma with it being that, are these replacing people’s jobs? Actually I read a very interesting survey that Accenture came out with when they were talking to specifically warehouse workers about their sentiments towards automation, robotics. What I found very interesting is that they reported that 60% had a positive outlook on it, which I found interesting. Then there was a 40% negative sentiment towards it. I thought that would’ve been higher, to be honest with you. But I think one of the really interesting things, and maybe you can expand on this a little bit. I’d be curious about your philosophy on this, but one of the negative areas was certainly, I’m worried about losing my job. I think that’s kind of a given. Number two, though, was concerns about training and being able to help onboard somebody who, this is normally a very manual process, and I’m picking this, I’m doing whatever, but now I’m interacting with some type of automation whether it’s an AMR or some sort of robotic arm or what have you. What are your thoughts on that? Mike:– I think that the application of technology to the workplace has the same pros and cons across a lot of different industries. And it’s the same factors are in place in a logistics facility which is that when you can use technology and automation to help people be successful, when you can help to alleviate the negative aspects of their job, like anything that we require that would create repetitive stress injury, where you’re lifting heavy things, how can you help somebody to do their job when you can take away that necessity for them to lift a heavy object or transport it from one place to another? That’s a job that automation can do and not only be more effective, but also to take that danger away from someone. You mentioned repetition. One of the things that is the most demoralizing about a job is meaningless repetition where you’re doing the same things over and over and over again in a way that you’re not really adding value other than the fact that you’re just accomplishing a task. Where that happens, you actually want to apply technology because if you’ve got a human that’s doing that same thing over and over and over again, it becomes demoralizing. And you’ll probably be able to be more effective with some sort of automation. You can also take the task that would otherwise be repetitive and actually provide a positive experience by adding gamification, for example, where if you’re going to be picking products and putting it on a cart, you’re able to see your statistics. You may get points for your productivity. The automation you’re interacting with maybe feels like a video game. It’s got some graphical experience that’s more than just “pick a product and stick it in a box.” There’s something about that process that actually appeals to your creativity and to your desire to have a richer experience. If you can provide that at the same time that you’re accomplishing the task, then it’s a win-win. You’ve got people who say, “”I actually kind of enjoy this. It’s like playing a video game, and I actually see how the more successful I am, that I can see that in my statistics right here on my little dashboard. And oh, by the way, somebody’s able to come along and give me a pat on the back and say, ‘Wow, you did a great job today’.” How does that maybe translate into value that I may be receiving, even if it’s as simple as the kind of value that you get from a video game when you collect a certain amount of points for achieving an objective. So there are ways, as I said gamification, just thinking about mixing it up, having people working on different clients and different products, not necessarily being always in the same, exact spot. What’s their upward mobility? How do they traverse the organization and move up and take the skills that they’ve learned and apply that to a new situation? It’s the same thing we all want. You’re working in a workplace where you can apply your giftedness, you can be rewarded, and you can take advantage of opportunities to manage your career. It’s not any different from somebody who’s working an hourly job in a warehouse facility as it is working a corporate job in a marketing department. Danny:– Yeah, absolutely. I love it, specifically on the gamification. I really like that. We’re seeing a lot of applications with that, and I think it’s pretty cool. It’s fascinating. So one last sort of industry question, and that’s I’m going to ask you to take out your crystal ball and look into it a little bit. Where do you see the future of the industry going? Mike:– Well one of the ways I think it’s actually really easy doesn’t take much of a crystal ball to predict, is inventory everywhere. If you’re going to be responsive to a modern consumer’s expectations, you’re going to deliver product same-day, next-day. That’s really the standard. Amazon has created that expectation. If you’re going to do that, you really have to have inventory that is in a lot of locations. It needs to be really close to the consumers, so it’s going to have to be in the region or the metro area in order to satisfy that. That is a huge change for anybody who’s operating a fulfillment network where you’re thinking about, I’m going to have a multi-node network. I’m going to have a lot of smaller locations that are probably distributed. And for us it looks like, how do you enable these kind of fulfillment experiences without necessarily having to always have the people in the buildings? So one of the things we’re working on is this idea that our clients are going to want to do some of these things themselves, and so how do we use our technology, our business processes, the knowledge that we have in creating these kind of experiences in our facilities and help our clients do that where it might make sense? For instance, turning a store stockroom into a little fulfillment location. Over the past two years retailers have learned that they really need to think about their stores as inventory locations for curbside delivery, for local delivery, somebody who wants to order online, pick up in store. They want to get in and get out really fast. Well to do that cost-effectively, you need to be able to run the back room of the store as a little, mini warehouse. How can we apply our technology and our knowledge to solve that problem? How could we put a small, metro fulfillment location up for a client or for multiple clients where you’re serving the Dallas/Ft. Worth area or you’re serving the Metro Atlanta area or you’re serving the Chicago metro area from a location where you’ve got inventory that’s there. That’s a change that Amazon introduced on a massive scale. Retailers need to figure out how to replicate that same scale without all the investment and all the overhead. And I think we have something really unique to offer in that scenario. The second thing that I would point to is the sustainability and resilience aspect. We have to do this in a way that’s sustainable. We have to figure out how to do these things in a way that is good for our planet and is good for people. Taking mileage out of delivering a package is one way to do that where you’re not putting it on a truck, then on an airplane, then on a final delivery truck. The closer you get your product to the consumer, the less carbon footprint you should have across that experience. We also need to be thinking about how we can create resilience. You look at supply chain disruptions that happened last year. You look at the impact of the pandemic on just the whole industry and the supply chain. We’ve learned a lot about where we don’t have resilience, and I think that there’s an opportunity for us all to look at, how do we create more resilient systems that are going to withstand some of these things that just happen unexpectedly, and do it in a sustainable way that’s good for everybody and the planet, which leads me to the third thing which is, stakeholder equity is going to be more and more important as we look in the future. How are we doing things in a way that creates win-win-win scenarios where you’ve got shareholders, you’ve got your employees, and you’ve got your customer and their customers that you’re taking into account all of their interests and needs when you’re designing a solution to a problem. That looks like to me equity when you’re thinking about your stakeholders in a business, not just your shareholders. Who all is relying on that business in order to make the world a better place? I think that’s going to drive more and more investment and focus for all of us, but when we think about our business, that’s a traditional—maybe not as focused traditionally on sustainability and stakeholder equity. How do we do the things that we’re doing that drive for those objectives? Danny:– There you go, awesome. No, I appreciate. Hey look, a lot of opportunities, a lot of challenges ahead to solve some of these issues and to really adjust to it. I think what you guys are doing over there is pretty cool. You guys got some really interesting, very interesting value proposition. I imagine you guys have—and imagine a lot of challenges in terms of how to fulfill orders that are very custom and still to do it at a faster, have that expectation of next-day—dare I say same-day—or two-day delivery. That certainly is a big challenge. Listen Mike, I really appreciate the time that you’ve spent with me and our audience here on IndustrialSage. I’ve really enjoyed it. I really, really enjoyed hearing your story. I think it’s fascinating hearing these entrepreneurial spirits and where it came from. You just solve problems, and it sounds like you’re still really passionate about it, just a little bit. Mike:– I think you’re right. Danny:– Anyways, for those who’d like to learn more about you guys, I’ve got pfscommerce.com. They can go check you out there. And Mike, thank you so much for your time. Mike:– Thanks Danny, really appreciate it. It’s been a lot of fun over the last hour just to talk about all of these things, so thanks for allowing me to share. Danny:– Oh, I appreciate it. And we’ll schedule maybe two hours next time so we can keep going. I had to hold myself back from really getting into these rabbit holes, but I really enjoyed it. Mike:– Thanks Danny, I appreciate it. Danny:– Excellent, thank you. Alright, well that wraps up today’s IndustrialSage Executive Series with Mike Willoughby who’s the CEO of PFS. You can check them out at pfscommerce.com. They got some fascinating technology and solutions, really interesting value proposition. I love talking about the unboxing experience and what that is. Obviously it’s very different than your traditional Amazon experience that you get with a package. What I think is interesting, and I didn’t bring this up in the episode, but I’m willing to bet you’re going to see more of that as you remember—I remember certainly as a kid, getting boxes, getting shipments was a big deal because they didn’t happen a whole lot. Now I look at my kids; they’re like, oh, it’s another box, whatever. I think that experience of actually unboxing and seeing things, I think it’s going to become more of a thing. Hey, but that’s my two cents. Hey, thanks so much for watching. Listen, if you’re not subscribed, I highly recommend. Go to IndustrialSage.com if you’re not there right now and subscribe because you’re missing out on great episodes like this, great content, great insights from guests like Mike who was talking about solutions and insights and challenges that can help you in your business, whether it’s in the same vertical or something different in the industrial space. You’re missing out, so subscribe. Alright, that’s all I’ve got for you today. I’ll be back next week with another episode on IndustrialSage.
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| TGW Logistics: Chad Zollman | 21 mai 2022 | 00:32:58 | |
Chad Zollman of TGW Logistics shares major milestones of his career, and the challenge of making business decisions as markets regularly shift.
Danny: – Well hello, and welcome to today’s IndustrialSage Executive Series. I am joined by Chad Zollman who is the chief sales officer at TGW Logistics. Chad, thank you so much for joining me today on the Executive Series. Chad:– Thank you, appreciate it. Danny:– I am excited to get into our conversation. So we were just talking before; you are in Grand Rapids, Michigan, and it’s very warm up there right now. Chad:– Yes, absolutely. It’s swimsuit weather for sure. Danny:– Excellent. Before we get into the first part which I love is getting into learning more about you personally, but for those who aren’t familiar with TGW, can you give me a little high-level of who you guys are and what you do? Chad:– Sure, so TGW is a global systems integrator for our customers. We focus on our core industries which would be fashion and apparel, grocery, and industrial and consumer goods. We actually design, implement, maintain highly automated fulfillment centers inside for various customers in various regions. And that’s not only in North America; like I said, we’re global. So what’s unique from a TGW standpoint, I think is we have manufacturing that sits in Austria and Germany, so we have, on top of your traditional conveyor, your automated storage and retrieval systems that we manufacture, we also have a robotics company as well. Palletizing, depalletizing, automated picking solutions, et cetera, all within our realm and sphere that we offer to our customers. Danny:– Excellent, well it sounds like quite a nice footprint. So the manufacturing and the integration side, you bring engineered solutions, bringing all that together. Chad:– That’s right. Danny:– Excellent. We’ll get more into that because I think there’s a little bit of interesting stuff going on with supply chain right now, and as we get into fulfillment and ecomm and retail and all these things. I’m suspecting you’ve been affected by this a little bit. I’m being a little facetious, obviously. Chad:– Right. Danny:– Let’s jump into you a little bit here. How did you start your journey? How did you get into this space? Chad:– Clearly through my college courses because I have an economics degree, but actually I came in through a family friend. He got me into the automotive supply chain area, so it was in the 3PL industry. I actually started in one of the initial lead logistics operations for General Motors in working for Ryder. That was more transportation-based, so really optimized transportation design and execution. Then that particular solution morphed into just-in-time delivery, and that’s where the warehousing portion came in. Really started working on, from a design perspective, warehouse layouts and effective solutions for just-in-time delivery, and then made my way through the 3PL industry. I worked for another organization, CEVA, for about 19 years or almost 20 years in various capacities, but eventually that led me to where I am today with TGW because the more the supply chain industry evolved, while the 3PLs were providing excellent solutions and there’s a lot of benefit to operations excellence and lean practices, we had more and more customers asking for ways to reduce their headcount, so really looking into automation. And the more my team kept working on solutions for these large customers, the more we saw the need, the want, the desire to understand more about automation. That really led to the interest, from my standpoint, into the automation. TGW reached out to me, so it was perfect timing; worked out really well. Danny:– Excellent. When did you start at TGW? Chad:– Four years ago. Danny:– Okay. Alright, excellent, so 2018. I think I can do math. It’s one of the things I forgot with the pandemic. Alright, so I’m curious. You said economics degree, and then now you found yourself going into supply chain and operations excellence and all. You said you came in through a friend. I’m just curious; initially what did that look like for you? What specifically were you doing in that job, and then at what point were you like, hey, I kind of like this? Chad:– I started outside of an internship. I actually started managing in a warehouse, first shift operation for container sortation, so returnable containers for the automotive assembly plants. After about a year of that, I worked my way into the design team, so that was more transportation optimization, so essentially taking all the suppliers that you normally work with and building out your daily milk runs, your weekly milk runs, and then working through our team who at the time actually provided the transportation services as well as third parties who did truckload provision, longer hauls, and then the assembly plants themselves to coordinate the activities from a parts standpoint, inventory standpoint, et cetera. So it really started, honestly, purely on the transportation side. And that evolved from a single plant to multiple plants and looking at synergies, et cetera. It was an interesting start, and the hook for me was just the logic. It just made a lot of sense, the concepts that the automotive industry was trying to apply, and really they were the frontrunners, I think, in the supply chain and really that lead logistics provision work. Being able to see its impact on the plants themselves to transportation budget, quite frankly, and then as it worked its way into more of the just-in-time delivery into warehousing solutions, you could just really see the benefit. You could really understand it. It just made a lot of sense, and I always enjoyed it. Honestly when I moved away from Ryder into CEVA, it was more on the sales side initially and design, but I got to see more and more customers. Suddenly you see similar problems across customers, across industries, and every problem was new, but at the same time you had the confidence to really work with a customer to solve it, and I think that was the hook. You felt that you brought value to the table, and you felt like there was a high amount of demand for what you were providing. I really enjoyed that aspect. Danny:– That’s awesome, yeah. That’s an interesting transition over from more operationally, engineering, over to sales. What did that look like in terms of being approached; hey, we think this would be a good opportunity for you to sell this? Well wait; I don’t know. What was that for you? Chad:– My initial transition from Ryder to, at the time it was TNT Logistics but eventually made its way over to CEVA that’s known today was just on the design side. Then a few years in after leading their design team, I was asked to commit to the dark side and move into sales. Danny:– You said it, not me. Chad:– Honestly, it’s an easy transition when you talk about the detail and the complexity of the designs because it is primarily engineering-driven and solution-driven. As a participant in that sales process, it was just natural, really, moving from an engineering leadership standpoint over into a sales position. It was an easy transition. I’m a competitor at heart. I love it, so getting into the sales side was fantastic for me. It was perfect and aligned with exactly where I wanted to be at the time, which is great. Danny:– No, that’s awesome. I love it. You mentioned, it’s such a technical sale. It’s very consultative, and it makes sense. You mentioned before a little bit really bringing value to customers. I think that’s where, obviously people talk about the dark side, sales, whatever. I don’t want to be the sales guy that’s always pushing this or that or whatever. But the reality of it is, when you really do have a solution that fits and you do have a customer that you know that you can really help solve their challenge, that is fantastic. Where it gets difficult is when that customer doesn’t know they have that problem that needs to be solved. That can be a little challenging. Chad:– Absolutely, absolutely. It sounds like you’ve been in sales. Danny:– Never, I’ve never done sales, ever. I do love sales. I think it’s a lot of fun, for those exact reasons you brought up. When you can solve a real, tangible problem for a customer or a client, that gets me excited when they say, wow, this is awesome. Look at this; this is great. Chad:– It does, and realistically in our industry right now these are large numbers. We’re not talking small investments. We’re talking material investments that in some instances are really career-changing for individuals making those decisions, and they don’t take them lightly. From our standpoint when you talk about sales cycles, nine months a year, in some cases well beyond that, both parties are making a big commitment to each other. I think you said it; it’s a mutual victory at that point. When you see the value, and the customer sees the value, and you’re really able to reach an agreement at the end of the day, everyone’s happy about it. You’re not really selling at that point. You want to be an advocate for change, and that’s really what the team is really happy about. What I enjoy is really working through just, I’m selling something to someone. It’s a solution that’ll make their business better, that’ll improve overall their company’s health, improve their personal careers as well. I think it’s fantastic. Danny:– Absolutely, no, I think it’s exciting. I love it. Over your career, tell me about somebody who’s had a big impact. I know there’s probably a lot. When I ask, most people are like, oh, there’s so many. Tell me about one that has had a big impact and why. Chad:– Sure, and we talked a little bit about it beforehand. I think in preparation I had seven names ready to go, past mom and dad and past other people. But in all honesty from a true career standpoint, I think the one person who is absolutely pivotal is Dick Jennings. He was the family friend that brought me into the 3PL industry and into supply chain right away. He really just had a unique perspective that resonated with me. I think his background was psychology, to be honest with you, and he made his way into operations and led really dynamic and fun teams. I saw what he could do, not only from a building standpoint because he brought in great people for their different roles and different functional areas, but just how he built that team dynamic and how he handled them as a leader and how he was revered by everybody as a leader really shaped the way of what I thought a leader should be because you have that mindset when you’re 21 years old or whatever you are at the time, and you say, boy, I want to be like that. I want to be someone that inspires people. And yet he can absolutely relate to everybody on the team. He was fantastic. He really set me on the right path to where I’m at today. Outside of that I’d probably be working for a bank somewhere. I’m really blessed and grateful. He really had a huge impact on my direction for my career, and then obviously personally its impact from there. Danny:– That’s awesome. You mentioned leadership was a big aspect of that. What are some of those lessons that you’ve learned from him, from Dick, from what, maybe 5, 10 years ago? You look very young. Chad:– You are in sales. It’s official now; you are officially in sales. Well done; well done. Danny:– Well I come by it honestly. What are some of those learnings that you apply today? Chad:– I think with Dick, he knew how to balance humor with the seriousness of the job. Specifically in the automotive industry, minutes equal dollars. There’s penalties associated with that when you’re running your business. He understood how to take the gravity of the business and balance that with the good atmosphere for people to thrive. That really, like I said, it really resonated with me on how he handled that. He knew the time to turn up a little bit of the heat, and he knew the time when to let people blow off some steam. I think just recognizing that at a young age for me, I said this is an environment where I would prosper. Having seen different environments now throughout my career, I really respected that about him and what he could do. As much as I try to do it, I’m sure I can’t exactly replicate that, but I think it’s important, just that balance of humor and life with the gravity of the business. We’re out selling deals at over $100 million. That’s a lot for people to be a part of. It’s pressure, regardless, when you’re in sales. And it’s pressure for our customers. But balancing the human side of it, the relationships, I think is really important, and I really drew from that. I still think about it regularly. Danny:– That’s awesome; I love it. It makes a lot of sense. Obviously a ton of stress involved with these decisions because, as you mentioned, these could alter careers and alter the massive trajectory of businesses. Let’s talk about that a little bit right now as far as challenges that are going on in the industry. Obviously everything has been completely shaken up over the last two years. There was a lot of movement and a lot of activity moving into automation going into these solutions. You mentioned you guys have got a robotics division. A lot of this was hot beforehand. Ecomm, fulfillment was hot beforehand, and then the pandemic happened, and it was like somebody just threw a can of gasoline on the fire. What are some of these impacts that you’re seeing, that you guys have experienced over the last two years? What’s your experience like? Chad:– From our standpoint, like you said, the pandemic’s really been an accelerant. We have just seen the projections from a 10-year basis shrink down to two and three years. Everyone’s scrambling to make decisions and accommodate, so I think initially through the pandemic we really saw that push to say, what can we do? If you think about it from our standpoint, again I mentioned earlier sales cycles can be nine months plus, and then the actual implementation—we call realization here—but the realization cycle can be 18 months. There’s a significant lead time for those changes to take place. Really educating customers as much as possible, working with them as much as possible to better understand their business because we’re forecasting for five years out, four years out, whatever it may be for future capacity and demands. Our customers were scrambling to come up with models that suggested what either through the pandemic and post-pandemic things would look like. That’s really been the challenge more recently, I would say. So that’s probably the first two years. More recently I would say it’s, the problems still exist, period, but it’s more on the supply chain side. Will I see that continued volume through my warehouses and what I have in my distribution nodes, and will the demand be there for the customers? It’s really interesting just to see how it’s evolved, even by Covid standards, over the past two years and how the customers are trying to balance that out with future projections because what we’re dealing with, honestly, are strategic decisions that are being made. It’s made it very difficult and very difficult to predict. Danny:– Yeah, it’s almost like trying to solve a Rubik’s Cube because it seems interesting looking at customer behavior. I think you said grocery, retail, fashion, apparel. Those are big industries. Looking at consumer behavior and how that, obviously that’s going to come downstream to affect you guys. There was a report that I heard—there’s a local consumer expert; I think he’s nationally syndicated, but Clark Howard, consumer advocate looking for value and whatnot. When you’re looking at all the inflation that’s going on right now, people are looking for cheaper solutions and whatnot, and one of the things that he brought in which I thought was interesting was that he was pointing out that certain big-box, online retailers that people are looking at from a pricing standpoint, they’re saying actually we’re paying a little bit more of a premium doing that, and he started to see that people are starting to go back into stores to shop there versus saying, hey, I’m going to have delivery. This is something that I heard maybe a week or so ago, and I thought, oh my gosh, this is crazy because we were—this whole shift of online delivery, everything, and you’re seeing all the retailers, we’ve got our curbside; we’ve got this. Then, okay, no actually forget that. Now people are going to go back into the store. Let’s talk about micro-fulfillment for a minute, like oh, my gosh. Those challenges changing, and then you mentioned the supply chain piece. I imagine that you guys have not been immune from that operationally from your own standpoint, saying just raw materials, getting that in to manufacture. I’m sure if you’re like anybody else that we’ve talked to, orders coming in, companies saying we need to put these solutions in now. You’re like, well I’m waiting on all this steel or whatever to come in. It’s craziness as you’ve had that experience. Chad:– Yeah, absolutely. We’re not immune from our side. I think our team’s done a fantastic job really of trying to plan out, really for those long lead time components and those components that are critical to our success and what we’re trying to accomplish. We’ve been very fortunate; I will say that, very fortunate. But it’s an hourly, daily job. The best we can do is keep our customers informed. There’s no doubt when you say supply chain today, everybody knows what that means versus when I started my career. No one knew what supply chain really meant in logistics. But now it’s so common to our nomenclature and what we’re saying and what we’re doing on a daily basis. We hear it in the news about everything from what we buy to how it impacts our business. Again, it’s just dealing with the challenges. It’s head-on, making as many plans as you can, working your partnerships as strongly as possible so that you can make your way through and setting the right expectations. I think that’s clear. From our standpoint I feel like we’re a little more predictable, probably than our customers have it. Like you said, there’s so many options out there, and it’s so difficult to say this is what our business will look like in two years, three years, five years. I spoke to a customer recently, and they had projections from 2019 that said by 2022, it’s an absolute decision point. After reevaluating over the last six months, that decision point’s been pushed out five, six years based on the projections. So it’s extremely dynamic right now, honestly, and I think everybody is just trying to level-set. That’s what I do appreciate. I think in conversations with customers, with our suppliers, with our trading partners, we’re having very open dialog about what timelines look like. I think that’s been the benefit across all of this, very open, honest communication, probably. Danny:– Yeah, that makes a lot of sense. I think that was a lot of challenge that was happening, a lot of education that was going on, too. Earlier on you were mentioning that the whole idea, supply chain and logistics, that people didn’t really necessarily know exactly what that meant or what were the nuances. Now there are supply chain experts everywhere. I’m sure if you had Thanksgiving, you ran into a lot of supply chain experts as well. Thanksgiving, the holidays, whatnot. One of the things that I found fascinating was that even on the C-suite, I was hearing stories that at the height of the pandemic that there was a lot of confusion, even internally, like why can’t we move this? Why do we have all these hold-ups? It was all this internal education, like well, there is this thing called supply chain. We can’t get our things in so we can make the things so we can ship them out. It was this, what? One of the things that I’m curious about is where do you think the industry is going, forward learning from what we’re still kind of going through, very much so, and what we’ve learned? Chad:– Sure, I still believe in the projections are there, in the fully-automated dark warehouse. I still think there’s a place for that, and that’s absolutely in our future, sooner than we think just based on the breakneck speed with which technology’s changing and improving. I think really the impediment to that right now is that predictability factor and really seeing what the pandemic will bring. Is this mid-term, long-term? I think there’s a hesitation, probably, in the marketplace in getting there right now. But at the end of the day I think the way technology’s improving, the way we are recognizing data as an absolute tool to run business, the way we are becoming more and more comfortable with automation within just various warehouses and warehousing applications, it’s absolutely where we’re headed. I think the industry as a whole is going to head right where we think it’s going to with the growth rates. I think there just might be a little bit of hesitation to understand, okay, how do we invest? How do we get there, and how can we make sure that technology is reliable enough and flexible enough for our needs? Hopefully Covid will be a little bit of a blip, and we’ll have some more consistency post-Covid with regards to consumer behavior and our supply chains, et cetera. But it depends on who you listen to; this could last many, many years. Danny:– Yeah, exactly. Who knows, right? One thing you mentioned, obviously predictability. Earlier in the conversation you were talking about when you were specifically at GM and with Ryder. You were talking about just-in-time at that point. We get into a little bit of lean manufacturing and whatnot. Are you seeing a–well obviously everyone has had a pull-back in that, naturally, because if you don’t have your things, okay, then you’re seeing massive disruption there. But going forward, do you think that there’s maybe going to be some rethinking on that? That maybe, have we gone a little too far? Is there maybe a little bit of a pull-back? I’m curious. Chad:– I think the root of it—we talk about this quite a bit in the impact to our business. At the core of the issue is the labor market and the scarcity. Unemployment levels, lower than pre-pandemic periods. The aging workforce is not changing. It’s difficult to find people for peak. It’s difficult to find them for daily operations. I usually have conversations with our customers, prospective and existing. I ask them, how are you, related to the overall staffing? The numbers come back between 80 and 90%, so if you figure businesses on average are only staffed to 85% of where they need to be—and this is just in their distribution nodes. This is just in their warehouses. That labor is in demand. The need for automation just grows, so I see the need in demand to be there absolutely 100% because I don’t see the labor market and the labor pool changing anytime soon. Emigration is down. You look at the aging workforce, you look at the jobs available to everybody right now, it’s a ridiculous amount of the great resignation with 40-some percent of the workforce turning over. People are looking; they’re seeing different options, and even through peak season, you see the signs going up offering 20, 30, 40% premiums for these jobs. I think that’s going to be the driving factor and will continue to be the driving factor. Yes, there may be some hesitance to say, my supply chain costs are greatly increased because of the scarcity of drivers because of the scarcity of ocean containers because the supply chains are being impeded. But at the end of the day I think the demand will continue to be there in some way, shape, or form, and the warehouses just aren’t staffed enough to support that. Danny:– Yeah, absolutely. I’m curious relative to your peers. What are you guys doing to stay ahead, sharpen that axe, if you will? Chad:– Yeah, I think the robotics company was purchased quite a few years ago, and I think utilizing them as an asset more and more in our solutions has been very advantageous for us. We explore strategic partnerships, technology changing so fast. Our core is in manufacturing. What we produce today is absolutely our strength, but we also recognize we have to continue to look in the marketplace. We have to continue to look with other trading partners to see what’s out there, AMRs, for example, other things. From our perspective it’s keeping your eye on innovation of what you have, but also recognizing that we have a core competence and maybe we can partner with others in the industry. I think more tactically what we’re doing, honestly, in North America I’ll use some examples, and then we have our own apprentice program that we’re utilizing to develop and retain talent. I think that’s really important. Globally we have our own training academy, again talking about developing leaders inside the organization and our employees overall. It’s really about that retention and what we’re trying to do to ensure that we have the right baseline for future growth. We talk about, the sky’s the limit in the material handling industry. The projections long-term are extremely high. For us, we have to continue to retain talent to stay ahead of our competition. We have to keep those folks who have experience inside our ranks and develop the individuals to be able to support that growth in the future. That foundation is clearly important for our success, and I’d stack that up as a key component to our ability to compete against anybody in addition to any other technology advancement, et cetera. I think that people are going to be one of the most important factors. Danny:– Absolutely, I think you’re 100% right. I think you’re seeing a lot of companies that are struggling with that just across the board. You mentioned the great resignation there earlier, a lot of people just shifting. There’s a lot of things going on right now, but I love how you said you have an apprenticeship program you’ve got going on, and then also global training centers. I think that’s absolutely the key to help keep people engaged and to continue, help them to continuously grow and be able to have that advancement. I think that’s fantastic. I’m going to pivot real quick as we’re starting to wrap a little bit. I’m curious; are you a book reader? Do you do any book reading? Chad:– I do; I do read books, absolutely. Danny:– Okay, that is good. I’m going to be clear: book reading versus audio, podcast listening. Chad:– Both, it’s perfect 50/50. I spend hours a day on IndustrialSage. Danny:– That’s the right answer, perfect. Alright, so we’ll move on. No. I’m curious; we got a top book that you’re reading right now, or listening to? Chad:– Sure, yeah, literally just wrapping it up is The Power of Stay Interviews. When we talk about retention of our employees and what we’re doing, we’re really looking at that as an executive team and what it means to really work with our employees on a regular basis to understand how they are personally, what their opinions are of the industry, of the organization, and their needs. Really, that’s what it’s about right now. That’s the most recent book I have on my nightstand. Danny:– That’s cool; so you said The Power of Staying? Chad:– Yep, I think I wrote it down here. It’s The Power of Stay Interviews for Engagement and Retention. Danny:– Oh, awesome. I haven’t heard of that, and there’s five people I’m going to send that to right now. Chad:– The author is Richard Finnegan, if you need it. Danny:– Oh, very cool, awesome. Alright, so since we talked about a podcast, or audio, what’s your number one podcast? Outside of IndustrialSage, I know. Chad:– Listen, I am all over the map, honestly. I am all over the map. Mostly sports, I would say; that’s more for me personally. Danny:– That’s perfect. What are the sports? Chad:– Everything, I mean everything. Right now college basketball, NFL that just wrapped up, college football. I’ll listen to pretty much anything that I can get my hands on. I can’t name one specifically that I would say is my go-to. I just plug in and go. Danny:– If you’re looking for an apology for the Georgia-Michigan game, you’re not going to get one here. Sorry, I’m just— Chad:– You’re breaking up. Danny:– What, you can’t hear—? Anyways, that’s awesome. And last question, just curious, as we wrap on this. Top hobby when you’re not solving the world’s problems, what’s your top hobby? Chad:– Outside of my three kids, I love to fish. I love to be up at our lake house. It’s awesome; just love to be outdoors, and I personally love to fish. I get out there and relax. I didn’t say catch; I just said fish. Danny:– That’s a good distinction. Chad:– Absolutely, so just to sit out on the water and relax and enjoy, unwind, is my number one. I absolutely love it. Danny:– That’s awesome; I love that too. Yes, I enjoy fishing. I’m not very good at catching. Chad:– It’s okay; you have good company here. Danny:– Awesome, well Chad listen, I have really enjoyed our conversation and learning more about you and learning more about TGW, what you guys do. Thank you so much for coming on to the show here. If anyone wants to learn more about what you guys do, I’ve got the website here, tgw-group.com. Yeah, I encourage anybody that wants to learn more to go there. Chad:– Absolutely, give us a call. Thank you for having me. I really appreciate it. This was great. Danny:– No, this was awesome. I enjoyed it as well. Thanks for sharing some of your insights with me and our audience. Chad:– Thank you. Danny:– Alright, well that wraps up today’s IndustrialSage Executive Series interview with TGW Logistics. I really enjoyed my conversation with Chad, and I hope you did as well. Listen, if you’re not subscribed, I highly recommend you go and get on the subscription list because we’re sending out content like this on a weekly basis. So you’re missing out on great conversations and learnings and happenings that are going on in the industry, maybe not directly in your industry, but still a lot to learn. So that’s all I’ve got for you today. Thank you so much for watching. I’ll be back next week with another episode on IndustrialSage.
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| Stryten Energy: Tim Vargo | 08 mai 2022 | 00:31:43 | |
Tim Vargo returns with Stryten Energy to discuss the interwoven world of automation, infrastructure, domestic manufacturing, and the evolving energy industry.
Danny:
– Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Mr. Tim Vargo who is the CEO of Stryten Energy. Tim, thank you so much for joining me on the Executive Series. – Great to see you again, Danny. Danny:– Well I’m excited to jump into this. For those who aren’t familiar with Stryten Energy, tell me a little bit about who you guys are, what you do. Tim:– Sure, happy to do so. So Stryten Energy is a company that has 13 different manufacturing plants in North America, in the United States, over 2 million square feet. We supply a variety of energy storage needs across several different platforms. So we have multiple chemistries solving multiple problems, and really excited about our future given all the challenges we’re having with energy storage today. Danny:– There are certainly a lot of challenges. Tim:– That’s for sure. Danny:– I think you guys have a lot of work cut out for you, but a lot of great opportunities. Let’s talk a little bit about—we can go into a little bit of the pandemic. What I think is interesting is just hearing from companies about how things have really altered that future for you. Some, it’s completely changed it. Some, we’re still the same. What was that effect for Stryten? Tim:– Our company is one of the essential manufacturing companies in the infrastructure of our company for both the military and stored energy. Our plants never closed. Our plants were open every single day from the beginning of the pandemic until now. We’ve had virtually no lost work days from a plant perspective. The demand for our products has been exceptional across the board in every segment that we serve. Our challenges have been, through the pandemic, two-fold. We all had to learn to work from home. That turned out to be a lot easier, I think, than everybody thought. Frankly, it’s a little harder to get people back to the office now because everybody likes to work from home, me included. I think we’re all sensitive, though, to the need to make sure that we’re continuing to build the team. Communications are always a little better in person than they are just, how many Zoom calls can you do in a day? Danny:– Exactly, yeah. Tim:– Having said that, our other challenge is just getting a workforce that is robust enough to handle the demand for our products. Like all manufacturers around North America that I’m aware of, we’re all short-staffed. We could probably all make more products if we had the employees to staff all the shifts and all the machines that we have. All of us are accelerating our plans to automate certain functions in the plant, so it’s not an automation play that’s designed to reduce the number of people we have, but I think we’ve all recognized we’re probably not going to get too many more people. Yet our demand is very robust, so we’ve got to figure out a way how to automate and use the people that we have to make more products. So that’s pretty exciting stuff in addition to the products that we’re making have huge demand and a really, really bright future. Danny:– Yeah, absolutely. Let’s talk a little bit about the bright future, too. One of the things is that, this whole idea of going with net-zero carbon emissions by 2035. What is Stryten’s role in that and your stance on it? Tim:– Sure. I’m going to focus just on the United States. Our plants are all located in the United States. We have a very tight supply chain centric in the United States. We get very few products from China at all, very few, a few electrical components that are also available from other parts of the world. We do get some supply out of Europe for our lithium blocks, but we’re in the process of bringing that all in-house in North America. It’s our ambition to provide a stable stream of energy solutions that are manufactured in the United States. We’re really positioned well to do that with that 2 million square feet of manufacturing that we have and with the knowledge that we have, the deep engineering and manufacturing and design knowledge we have of energy storage. That’s going to play a key role in the whole goal for 2035. That will not be possible without a concerted effort by a lot of manufacturers across a variety of different chemistries and solutions to provide that energy storage because one solution… lithium is not going to solve the world’s energy storage problems. Lead is not going to solve the world’s energy storage problems. Flow batteries and any other technology are not going to, by themselves, so it’s going to take a concerted effort across a variety of different chemistries and platforms to do that. I think we’re really positioned well to do so. Danny:– What I was unaware of before our conversation is that how much domestic production was happening. I think you said then numbers, it was over 90% or 90% there at. Tim:– For our supply chain, it’s well over 90, 95% of the products that we manufacture in the US are captive in the US from a product standpoint. When we look into the future with lithium expansion, flow expansion, the electrification in order to get to that net-zero by 2035, it becomes a little more pragmatic in how we end up getting there. It’s going to be interesting, that’s for sure. And then when you layer on top of the really enhanced regulations that are coming down the pipe, we were headed this way anyway. California has had energy challenges for well over a decade. The infrastructure is not able to support the demand in the electricity market. Storage has been a big deal out there for a long time. With the infrastructure that we have in North America that is so aged and the lack of investment in actually the electrification infrastructure and the reduction of nuclear energy and the reduction of coal, the storage of energy is going to be just so exciting and so demanding that even without government regulation to accelerate the process, it was going to accelerate naturally anyway. But with government regulations, they’ve got us on a fast track with some huge, great, ambitious goals for energy storage. Danny:– Talk to me a little bit about the—what does that future look like for you, down to on a consumer level or even from an industrial standpoint? Tim:– Sure. So if you think about the consumer level, obviously a lot of folks want to have solar power so that they can reduce their energy storage bill so they can send power back to the grid and have a stable amount of energy coming into their home. What has been lacking, really, over the last couple of decades with very few exceptions has been the storage of that energy that’s captured from a windmill in your backyard, solar panels on your roof or a solar array set up in your yard. That’s all fed back into the grid, and there’s really nothing stored in your home, for the most part, if you looked at it over the last decade or so. The opportunity there is to provide a variety of different storage solutions for the home. We have a lead solution which is probably a little more complicated than most people would like. Lithium storage is certainly the most convenient. It’s also pretty expensive. And so as lithium cost continues to go down, that’s going to be a very efficient way to store energy so that when the power goes out, you have actually energy stored up to run everything in your home from your heating to your air conditioning to your refrigerator to the lights on. That grid that can be made—let’s call it a micro-grid. Micro-grids are generally, would be more of a neighborhood thing. But just a grid for your house, you can support yourself. What the government is doing now, the government is talking about legislating micro-grids for neighborhoods. And so then you’re going to need something more than lithium to back it up, and that’s where we think the flow technology—we’re using vanadium as our chemistry to store energy because we happen to know it’s pretty efficient, more efficient than many of the other flow battery technologies—but that flow battery is going to be able to hold an awful lot of energy for a much longer period of time, four hours in duration or greater. And it’s completely scalable for the size of the grid that you want to support. Pretty exciting stuff. Danny:– That is super interesting. So I’m going to break that down to, in my mind, to an elementary level. I’m curious; I want to make sure I understand this right. You’re thinking that the future will be that, obviously, there’s a higher demand in energy production that needs to happen at a local, micro level, at your house or neighborhood and that we need the ability because you’ve got a solar array. You’ve got EV. The EV market, I guess we can talk about in a little bit, that’s exploding. Everyone wants their Teslas and their Rivians, and Ford’s coming—all this stuff. That’s creating a bigger demand there. From a storing standpoint, if the issue goes—we have issues. That would happen at a local, residential level, or even at a neighborhood level—call it micro—that’s pretty interesting. Tim:– The challenge here is that lithium today is the ideal solution for home energy storage. I’m going to venture to say that probably 95% of the lithium batteries that we get in the United States are made in China. The world, not only the United States, is very dependent on China-manufactured product. Long supply chain, I won’t even get into all the other nuances of products coming out of China relative to the importance of owning our own energy storage. Right now we have a foreign country that virtually owns our energy storage opportunity. Danny:– It’s a critical infrastructure issue. Tim:– It is, absolutely. Given that, we are, along with several other North American manufacturers who know how to build product and energy storage to scale which is really critical, we are all driving towards a North American or a United States-sourced supply chain and manufacturing to manufacture lithium energy storage right here in the United States for the United States. Government regulations, as they’re being formed today, are going to be requiring that energy storage to be manufactured in the United States, not only for your home, for the micro-grid or for the total grid backup, the critical infrastructure for all of the power plants. If you were to do that today, you’d have to go to China to get that product. We have the manufacturing technology in the United States. We have the understanding, the design, the footprint, and the intellectual capital to build that product right here. We just need a few years to get it done. Danny:– That’s super exciting. I love that. And we’re hearing all these stories across—actually I’ll give you a really interesting—not in the energy space, but in healthcare. There was, and just down the road, one of our clients over at Optimum, Jackson Healthcare. It’s a big healthcare staffing. They ended up buying an antibiotics manufacturer called US Antibiotics in Bristol, Tennessee. During the pandemic, they ended up going bankrupt and had employees that were coming in that were working there because they are the only domestically-produced—the only domestic producer of antibiotics, so penicillin, amoxicillin. That’s the only one in the United States, and it went bankrupt. And so they bought it, and we have to keep this thing moving forward. That was fascinating to me; a little terrifying, to be honest with you, saying wait a minute. When we’re talking about critical infrastructure here, certainly energy storage, the grid, you want to talk about big issues? That’s a big one. Tim:– You know, driving towards electrification, and obviously the EVs are at the forefront of that. That’s what gets all the publicity. The unfortunate part is, if you look at the average home in America, it only has 100-amp service. That 100-amp service, for the most part in the average American home is probably about 90% used. If you’re going to put an EV charger in your home, I think you need somewhere between 60 and 80 amps. Danny:– That’s a significant— Tim:– Where’s that going to come from? You’re certainly not going to say, well listen, we can’t use our refrigerator today because we have to charge our Tesla or our Ford pickup truck. Let’s take it down a couple notches. Ford’s got the great Mustang Mach-E which is a great vehicle. They’re selling a ton of them, manufactured right here in the United States. They’re sold out of their F-150 Lightning truck. If you want to do home charging with a reasonably fast charger, you’re going to have to have more amps in your home or you’re going to have some form of stationary backup power that you can charge through solar or through your network, hold that energy so when you come home at night to charge your vehicle, you plug in, and it runs off of that instead of your 100-amp box. So there’s a lot of things that are going to have to change in order for us to meet our net-zero goals. Danny:– A ton of things, but I do think it’s super interesting. We were talking about a little bit how people are—there’s this shift. I think even before we started recording, we were talking about this idea of creating energy production at the micro, at the home level or an industrial facility, what have you. I think that’s an interesting frontier, especially as now I feel like the costs have dramatically dropped. I remember looking at this 10 years ago. Okay, this is—the return on this, and now we’re really actually, the costs are going to—and from a storage standpoint. What is that looking like over there? Tim:– Lithium has dropped dramatically in the cost per kilowatt hour, which is how I think businesses around the world look at it, cost per kilowatt hour. It’s still expensive. It’s a lot more expensive than traditional energy storage. Let’s just use lead acid for a minute. We have our lead acid batteries in data centers around the world storing energy for if the grid happens to have a little hiccup. You lose power for a little bit, our batteries can pick up the delivery of electricity. That’s been tried and true for decades. It really works well, and it’s really cheap. Lithium hasn’t gotten there yet from a cost yet, but it is a lot more compact. It has a better charging cycle, and there’s virtually no maintenance to it. On the lead side, we’re working with a variety of different government agencies to try to improve and enhance the technology that’s being applied to lead acid battery manufacturing, so we think we’ve got considerable upside there to get it more competitive with lithium. There are some other chemistries that are being used that are also pretty exciting that are manufactured. The batteries are manufactured in the same way, but they just don’t use lead. Nickel zinc would be an example, so instead of using lead, they use nickel and zinc. They make a battery that just looks like a regular battery, only it has better characteristics for storage and charging. It gases less; you don’t have to worry about it being in your house. One of the challenges with lithium that you’ve seen in the news where your Tesla catches fire and burns to the ground; the fire department can’t put it out. So let’s just put that battery in your house. Little concerning for a lot of people, and so our understanding of that is pretty implicit because we’re in the energy storage business. It’s pretty hard to catch a lead acid battery on fire. It’s like the safest thing you can do. Where we were heading with our lithium drive to find, develop, and manufacture those products in the United States, we bought a great little boutique company up in Canada. They have the intellectual property that has lithium with significantly reduced exposure to explosion and fire. Between an enhanced battery management system that controls the electricity going out, electricity going in, in an absolute way, the technology that they’ve developed that we now own and are trying to commercialize for things like home energy storage is the dramatically reduced flammability of that lithium that everybody talks about as being so flammable. So again, applying what we know how to do from an energy storage standpoint, getting the right IP to be able to develop that—this happened to be for a military application, so it’s very usable and can be made a lot more cost-efficient if you don’t have to do these certain things that the government requires you to do for military applications. We see a huge opportunity there for us to supply a lithium product for the home that’s safer than anything that’s on the market today. It’s going to take us a couple years to get there, but it’s going to take everybody else a couple of years or longer. We’re going to have that again, manufactured right here in the United States with products from the United States or in some cases perhaps products from NATO-related countries with lithium. Danny:– I think that’s just—we’re hearing more stories of more insourcing, more companies switching supply chains saying, hey, we want more domestic production. I love it. I think it’s awesome. I’m curious; let’s talk about labor a little bit for a second. Obviously you mentioned before, there are some serious issues. It’s forcing, pushing a little bit more of investing into automation. How much of that was happening, before the pandemic versus—obviously the pandemic shone a light, and that created some interesting opportunities. Obviously a lot of companies were looking at automation, but maybe that was on the pecking order. That was, okay, that’s a nice-to-have, not necessarily got-to-have. When we’re looking at specifically with domestic production, and labor rates being higher than what they might be going to China, was automation part of a solution before that, before the pandemic? Tim:– Yeah, so great question. I would say that most people in manufacturing have a road map to improving their automation. Although the labor issue has been really acute during the whole Covid two years, it was a problem before. It really depends on what industry you’re in. If you look at automotive manufacturing, for example, where there’s a lot of risk for injury because you’re moving a lot of heavy items, automation has been a key to that for a long time. The wages that the car manufacturers pay their workforce is considerably higher, so automation became a cheaper way to do that. Your robot never takes a day off. They don’t leave for the first day of hunting season and all the other things that we all talk about in manufacturing. And so it really depends on your own business, but everybody has been working on automation, and it’s just gone up a couple of notches here in the last couple of years. Danny:– Yeah, it’s been super interesting, and I think it’s opening up all these other opportunities for companies that maybe didn’t have the same road map that you have. I actually think that’s really exciting because I appreciate that domestic production. Tim:– Not wanting to get too sideways, but a lot of those robots aren’t made here either. A lot of those circuit boards aren’t made here either, and so the big announcement about Intel and their huge manufacturing effort to begin making things here in North America again, in the United States again is critical to that whole robotics supply chain as well because we need to be making that here. We shouldn’t be depending on somebody overseas making that product for us. It’s a complicated problem, but there are great solutions. Danny:– Absolutely. I’ll go a little bit more on EV. I know we talked about some of the challenges and the impacts that’s happening. I would say challenges, but also opportunities with that. I’m curious from a, obviously we were talking about Ford, and I’ve always, from an automotive standpoint, but there are also so many applications. One of the areas that I’m fascinated in for multiple reasons because I’m a pilot, but that’s one, is actually in the aviation space. When it comes to drones or UAVs, in the parcel and packaging, so a lot of FedEx and a lot of, part of the—and I’ll throw a little, part of the Industries of the Future initiative that we’ll be launching here soon, one of the episodes we talk about that space and one of the former—looking at the future of the industry, drone delivery was one, and that’s one that keeps coming up. Obviously that’s incredibly battery-dependent. Tim:– Yes, it is. Danny:– Not to mention, there are a lot of other issues with weather and whatnot. I’m curious from your standpoint, from a technology standpoint, that and maybe even deeper aviation as we’re looking at some of these electric that are carrying passengers and larger cargo than just a package that’s this big. Have we arrived? Tim:– I think from a package standpoint, an unmanned drone to do a variety of different things, whether it’s military use, application is clearly an unmanned drone, whether it’s a drone that you put out in the field with sensors on it to determine where the enemy is or whether it’s a drone in flight, there are a lot of different drones that the military is using all using lithium technology. Again, challenge to find the product made here, so there are a couple of US manufacturers, competitors of ours who have been in that for a long time, and they do a great job. They’ve got a nice little head start, a very compact, different than an EV, for example, and clearly different than aviation. You’ve seen, if you’re an aviation buff, you know how long it takes for the government to approve something, and even when they do sometimes they mess it up. I’ll leave Boeing out of this because the government helped Boeing mess that up, but it took years to get those approved only to find out they didn’t work. Think about how long it’s going to take them to be comfortable putting a battery that burns on an airplane to fly people. A lot of drone development’s going to be done, large drone development’s going to be done with the government, with industry. It’ll likely happen but probably not in your business lifetime or mine would be my guess. I’m a little older than you—a lot older than you, so it’s certainly not going to happen in mine, but I could easily see it happening. The great thing about manufacturing ingenuity is, is that it never ends. It’s amazing the things that we can do to solve problems and create jobs and different solutions that we had only dreamed of before. Danny:– Absolutely. Well speaking of the ingenuity and being able to solve problems, if I were to give you a magic wand—this is a magic wand question—to solve one thing in the industry, what would that be? Tim:– People, that would be the biggest magic wand I could come up with. Whether you’re in the car repair business, trying to find a technician to do that is hard. Our schools aren’t set up like they used to be to train people for anything other than going to college. And yet we have a lot of jobs that are required to make America work that we don’t have the people for. We’re in the forklift battery business, so we have a nice share of wallet in that for new fork trucks and used fork trucks. Well guess what? They don’t have the technicians that they need to have either, so whether you’re an automotive technician, a motive power technician, you’re a technician working on a Navy submarine, you’re a technician working in an electrical substation, you’re an electrician, all those skills, all of them are short. We’re short hundreds of thousands of those people. So from a magic wand standpoint, if I could wave one, that would be it because then that would allow us to do all of the other things that we need to do to build the infrastructure to get the job done. If we don’t have those people—A robot can’t do that unless somebody can build it. A robot can’t do that unless somebody can design what the robot’s going to do. And even though there’s a lot of work being done for artificial intelligence, and frankly that gets a little bit scary from my perspective. I think if you heard Elon Musk’s interview it scares the heck out of him too. If he’s afraid of it, I think I should be afraid of it too. I’m just saying. AI is going to be doing a lot of things. We just have to be careful what we let it do. So anyway, the magic wand: people, labor. Danny:– Alright, another question then with that: how do we solve it? That’s the million-dollar—that’s the, well, billion-dollar, multi-billion-dollar question. Tim:– It’s going to take what we’re trying to do right now with this energy solution. It’s got to take a combination of government and private enterprise to work together to solve it. The government has one idea of what public education ought to be, and that varies by geography. But I think that we all have to recognize that as a challenge and invest in it together. Private enterprise can do an awful lot, but we have a huge education infrastructure that costs us trillions of dollars a year. We have to figure out how to better solve our education problems other than the way we’re currently solving them. Danny:– Interesting. Well, listen Tim, I loved this. I do have one more question. Last question, I think. Tim:– Last question, alright. Sure, I believe you. Danny:– As the leader of your organization, and this is a little bit more of a personal question here at the end, what do you do to help stay at the top of your game? Tim:– I’m in the manufacturing business, and we manufacture products with people. The best thing I can do with our leadership team in concert is to make sure we’re effectively communicating to all of our employees where we’re going, how we’re going to get there, and what it means to them and their families. Those are the things that our team works on every day is we’ve got to have clear goals. They have to be attainable goals. We can have stretch goals; we can dream big. But we’ve got to make sure we’re explaining that to the men and women that we work with every day so we’re all along on this journey together. We all know where we’re going. We have a pretty good idea how we’re going to get there, but we’re not going to get there working in isolation. We’ve got to get there working as a team. We’ve got 2500 employees in 13 different plants around the country. We’ve got to work together to make this work as well as we all aspire to have it work. Danny:– Awesome. Well Tim, thank you so much for joining me today on the Executive Series. Fascinating conversation; I know I threw you some curveball questions there, but I appreciate it. Tim:– Danny, it’s my pleasure. I really enjoy doing this with you. I like what IndustrialSage does here, and we’re happy to participate any time. So thank you . Danny:– My pleasure. So if anyone wants to learn more about you guys, they can go to—I’ve got the website here. It’s stryten.com, and learn all about the innovations. You guys have a fascinating story. Thank you for all the work that you’re doing. Love the mission, and we want to help; we’re here to help support that. Tim:– That’s great. Danny:– That’s awesome. Tim:– Thank you. Danny:– Alright, well thank you. Okay, well that wraps our interview with Tim. Thank you so much for coming on. Awesome; I loved it. So many great takeaways. So listen; if you are not subscribed, you’re missing out on great content like this, great interviews with leaders who are really creating innovative solutions, who are changing the world, really solving some of our pressing challenges that we’ve got going on. There are some great opportunities here. So subscribe; you can go to IndustrialSage.com. Subscribe there, and otherwise you’re missing out. That’s all I’ve got for you today. Thank you so much for watching, and I’ll be back next week with another episode on IndustrialSage.
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| InOrbit: Florian Pestoni | 24 avr. 2022 | 00:48:39 | |
Florian Pestoni of InOrbit discusses the challenges of creating company culture, scaling robotics companies, and adopting industry automation.
Danny:
– Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Florian Pestoni who is the CEO and cofounder of InOrbit. Florian, thank you so much for joining me today on the Executive Series. Florian:– Yeah, Danny, thanks for having me. Danny:– I’m excited to get into your story. So for those who aren’t familiar with InOrbit, if you could give me a little high-level, who you guys are and what you do. Florian:– Yeah, we’re a data platform for robot operations. So essentially when you roll out autonomous robots or smart robots into the world, you still need to keep track of them. You still need to manage them. So we provide the infrastructure in the cloud to manage all these robots, everything from knowing what they’re doing to stepping in when necessary. Danny:– Alright, excellent. Well that sounds interesting. It sounds like it’s a very needed thing, especially as there is an exponential amount of robotics companies that are coming out, and there’s all kinds of unique and different applications. I suspect that there’s a nice challenge that poses that you guys are solving, and we’ll get into that here in just a little bit. But before we do that, this is the segment where we like to dive in and get to know our guests a little bit better. This is where we want to know a little bit more about Florian. So Florian, if you could just give me some color on your background. How did you get into the technology space? Take me way back. Florian:– Yeah, I’ll tell you Danny, it has not been a straight line. Danny:– It rarely is. Florian:– I think in the curves is where something interesting happens. Maybe a little bit about myself, I’m originally from Argentina, born and raised, studied there. Came to Silicon Valley essentially pursuing the best technology. Worked at research labs and then eventually got closer and closer. into the business. Did an MBA here at UC Berkeley. I went from big companies to start-up, back to big companies. Usually a lot of people will either pick one track or the other. But to me, it’s always been just different ways to have an impact. I’ve worked at some of the very well-known companies like Microsoft and Atlassian and the company now known as Meta as well as a lot of those start-ups that you probably never heard of with various degrees of success, as start-ups go. I think what’s been the common thread throughout all of that is really technology with a global impact. I had the chance to work on products, for example on video, on the internet when it was relatively new, when it was still being proven out. Being able to reach a billion people with my products was really fantastic. But then I’ve also worked in really new technologies like, for example image processing, cryptography, all of these foundational technologies that we’re now seeing in spaces like the one I’m in, in robotics. So what’s interesting is some of the things that I did very early in my career without being able to foresee where they were going are things that I’m utilizing these days in this new space of robotics. Then in terms of robotics in particular, the way I like to say it is I blame my cofounder for getting me hooked on this. He’s had over 12 years of experience working in robotics. His name is Julian Cerruti. He worked with a research group called Willow Garage that was extremely influential. He started telling me about this recurring problem that robotics companies had, which is they work really hard to make a robot, but then once you go into the real world, you need to scale. Scaling is hard for every business, but it’s particularly hard for robotics. We built a lot of the foundational technologies to help them out. Danny:– Wow, that sounds—well definitely a very interesting story there. You told me how, you said you came from Argentina, and you went to UC Berkeley, you were looking at the MBA program there. Take me back before that. What’s the draw into the technology space? What pulled you into it? Florian:– It’s a good question. For me, it’s always been about what’s the thing that can have the most impact? I think we’ve seen the positive and sometimes negative impact of technology. I think that different professions will have impact maybe at more of a local scale. If you’re a physician, for example, you can have a huge impact on people, but you have to treat them one-by-one. Whereas through technology, you can reach a lot of people. Like I said, I had the fortune of working with products that had global distribution with over a billion users. So I think it’s really about that reach and that impact at scale. I could give you an example of a prior company that I started and shut down as these things go, which was in the digital health space. This one was really a labor of love for me, a very personal thing. My dad went through a lot of health issues, and it motivated me personally to go try to help people. I thought that through technology I was able to do that. This particular company didn’t pan out, but now you see a lot of digital health companies that are doing just that, especially when people are less able to go to the doctor. So technology does have that empowering effect, and in a very strange twist of fate, I now work on the health of robots instead of the health of people. Danny:– Yeah, that makes a lot of sense. That’s a good point there. Was that some EMR-type technology or some sort of digi—yeah. Florian:– It was a lot of digital tracking of—in the US, despite all the news that we get from Covid these days, cardiovascular disease is the number one killer. Danny:– Absolutely, yeah. Florian:– So I worked with two physicians who were specialists in treatment of cardiovascular disease, and a lot of it is about daily management, so blood pressure for example has a lot to do with food intake and so on. A lot of this is very lonely for people. You’re living with your condition every day. You don’t have a lot of support. This was meant to bring that extra level of support through data and help you stay on the path to maintain your health as opposed to treating the disease. Danny:– I think it’s always fascinating with technology as you were talking about just—you talked about having a global impact and being able to—it’s sort of the one-to-many effect versus maybe one-to-one. I think it was interesting, especially; you were talking about you were in the medical space, and that one-to-one treatment versus this technology being able to go out and open that up and touch tons of people. You were involved in a platform that had billions of users. That’s pretty exciting, and certainly would be able to touch a lot of people there. Throughout your career, who has had a big impact from an influential standpoint? Florian:– Yeah, let me answer this way. It’s an interesting question. People have influence in different ways. I had a great mentor really early in my career. I was doing research, and she was a world-renowned researcher. She took the time to get to know me and to understand what my motivations were and to coach me through that. I’ve always been greatly appreciative of that extra time, that extra effort that somebody puts beyond what their job description is. I also wanted to mention, there was another person who had an influence through inaction. I don’t think it was intentional on their side. I’ll tell you the story. Danny:– I’m intrigued, yeah. Florian:– Really early in my career, I was already very passionate, I would say, about technology and about having this global impact. I was working at a very traditional, slow-moving organization, and I kept pushing and pushing because I knew we could do more. We could have more impact for our customers. But people just wanted to maintain things as they were. And at one point–– again, this was probably my second manager ever— he comes to me, and he says, “You know, Florian, I love all your energy. You keep pushing and pushing, but sometimes when you push so hard, the rope breaks.” So he was basically telling me, look, just pipe down and play along. It was fantastic feedback because within a couple of weeks I was working somewhere else. That helped me move my career forward. He basically said, look, if you want to stay here, you just need to go slow. And I said, nope, not for me. So I think it helped me, and years later I remember that conversation. Again, it wasn’t a pleasant conversation, and it wasn’t intended as advice. Sometimes influence that pushes you in one direction or another can come from any side. Danny:– Yeah, absolutely. I love that; that is kind of a funny story. You were saying yeah, a little bit of an unintended, maybe potential consequence or action because of that. It certainly makes a lot of sense. It’s a very interesting difference between, you were working with gigantic, monolith companies. It’s interesting; even the companies that had start-up roots, they were lean, and they could pivot quickly. But then as you grow you start adding all these other layers to be able to essentially stop the innovation, or you mentioned to maintain, and you keep adding layers and layers and layers and layers and layers. I’ve always found that interesting. You’ve got the root, innovation, move, we can pivot; let’s go. And then it gets siloed, and then it’s just this giant ship you’re trying to move. It’s very difficult to make change there. That makes a lot of sense to me. I think it’s interesting. What was the phrase again? It was, sometimes if you push too hard… Florian:– I think it was something, if you’re pulling too hard to get everyone to come along, the rope breaks. The phrase that stuck in my mind was the rope breaks. Again, I think it was meant as a, just play along. I think the value that it brought me was clarity that that wasn’t a fit for me. Danny:– Absolutely. Florian:– Even today, InOrbit is still a relatively small organization. We’re about 20 people, and my cofounder and I spent so much time on culture. I know people talk about culture in grandiose terms. For us, it’s really helping people understand why we’re doing what we’re doing and really helping them bring their own way of contributing. I think—maybe this is too much of a rathole, Danny, but— Danny:– No, this is good. Keep going. Florian:– We hear a lot from companies that talk about culture fit. But I don’t think that’s what you should aim for because then you’re trying to get people to conform to a pre-existing mold. I think what you want is culture-add. As you bring someone new, are they contributing? Are they adding to the culture in the general direction that you want to take? I think, as you said, it’s really hard to do that at a greater scale. It’s a little funny that, with a company of 20 people, we’re already thinking about okay, how will this work when we’re 1000? But I believe that you lay the foundation for that culture really early in the life of a company. And then if you’ve done your job right, it’s self-reinforcing. You tend to attract people who want to contribute and add to that culture. If you get it wrong really early on, you did it with your hands. There’s the roots and then the tree. Maybe the tree will be skewed, and so I think it’s important to get it right. We spend a lot of effort on that. Danny:– That’s awesome. I would love to dig into that a little bit more if we can. I love the idea around culture, and it fits really well into your story there as far as how that transition goes. I love the concept of, you said a culture-add versus culture fit. What are some concrete things that you’re doing there to set the tone for the culture? Florian:– Yeah, maybe a little bit about the company. We’re a distributed team, so we have people all the way from northern reaches of Canada to South America. As a distributed team—and throughout the US also, from the East Coast to the West Coast. So that adds an extra layer of challenge when it comes to having people feel like they’re part of an organization that has a shared meaning and a shared objective. One of my—people don’t usually love meetings, but I do have a favorite meeting that we do every two weeks on Fridays. We call it the wins meeting. This is a meeting where we get together; there is no agenda, per se. People from across the company, we all get together. It’s not mandatory, so it’s not an official thing, but usually everyone is there. It’s really to share wins and lessons. Wins is, could be something that you did at work, you completed some development, and you want to demo to the rest of the team. Or somebody won a big deal, and they want to celebrate that. I think that’s pretty normal to do celebrations of things like that. On the other hand, we also do lessons. I think that’s really valuable, which is something that didn’t go according to plan. What did you learn? And sharing that with everyone else. This meeting kind of took a life of its own, and I’ll tell you a concrete story. We had an intern, and it was—one of the things we do is we rotate who is basically the emcee for the meeting, for the wins meeting. It’s a very participatory thing. We were having our wins meeting on May 4th, and for Star Wars geeks, that’s an important day. It’s May the Fourth day. We ended up; I said, well why don’t we do something with Star Wars? So this intern who happened to be hosting, she put up this amazing trivia game about Star Wars. Then we have some people at our company that are insane with trivia, like really, really good. They beat me every. Single. Time. But what’s funny is, this became kind of a tradition, so a lot of times we start the meeting with, tell us something about yourself, something embarrassing that you did or a trivia game. And it took a life of its own, and what I love about it is, it wasn’t like a top-down thing. We just created a space, and then it’s self-reinforcing. I don’t know. It’s a great way, like I said, my favorite meeting. Danny:– That’s awesome. That sounds like a great meeting. I love that concept of doing that and creating a cadence and letting it go beyond maybe what it was initially set up for and grow a little bit more organically. I think I see now a little bit more where you’re talking about the culture add aspect. I see that very clearly in that example. That’s fantastic. Florian:– So for example, we have an engineer on our team who does parasailing. Danny:– Very cool. Florian:– I’ll admit, I look forward to when he shares a video or something because it’s like vicariously living through his excitement. But you get to know people beyond just work. I think that’s really important for me. Danny:– That’s a great takeaway. I’m writing some notes here. I think we may be implementing something like that similar here. Anyways, I’m selfishly very excited about that. Thank you. What a great thing, talking about culture. It felt like a great, certainly an absolutely great segue as you’re building out InOrbit and maybe some of that inspiration. What’s the story behind how you started it? I know you mentioned that you said you blamed your cofounder there a little bit, but what’s the story there? How did you start? When did you say, we’re going to make this jump, and we’re going to start this venture? Florian:– As with many companies, it started with just a conversation about interesting problems to solve. Like I mentioned, my cofounder had been in the robotics space for quite some time. I came from the cloud world, so it was completely foreign to me. Maybe like a lot of people who may be watching this had my preconceived notions from movies and so on about robots. As I started learning more about it, I learned a couple of things. One is, the old-school robots that worked in factories, for example if you go to an automaker’s factory floor, you’ll have these massive robots, million-dollar robots. They just do the same thing over and over. They’re programmed in a very precise fashion to do the same thing over and over. What got me really excited was, there’s now a new generation of robots enabled by really new technology where the robots are coming into the open world. So now you’ll see robots in warehouses, in farms, on construction sites, at retail stores, in airports. So really pretty much wherever you go, there is a robot. I live in Mountain View in California, and when the pandemic hit we were really worried about our close neighborhood store, our grocery store, mom-and-pop shop, we know the owners. We’re like, okay, how are they going to hold up? Well this being Silicon Valley, within two weeks they were doing delivery to the home via robots. Danny:– Really? Florian:– What I thought was interesting was people’s reaction to the robots because at first it was just like, oh, my God, what is this? People taking pictures. That lasted about two weeks. Then it became part of the (of course) robots. So I think it’s interesting how we as consumers ourselves, we respond to the technology, first maybe in awe, but then it becomes part of our landscape. I think that’s what we’re seeing what’s really exciting about what’s happening with robotics. Back to InOrbit, we said, okay, great; how do we help? We see the potential. We see the impact. How can we add to that? Before we even started the company, within I think it was 25 interviews with founders of robotics companies, with users, really to understand what their problems were, we landed on this idea that, when a robot goes from the lab to the real world, there’s a big transition. A lot of times, and this is not probably very well-known, but a lot of times in those early days, robots had chaperones. They literally have an engineer following the robot around to make sure that it behaves as needed. Again, in the early days you probably had more engineers than you had robots. Then as you start to scale, when you want to go from 5 to 500, let’s say, a lot of things that worked in the early days stop working. That’s something that I’ve seen in the cloud, and that’s where my connection to this was–– which is, I’ve seen this work in the cloud where in order to operate the massive data centers that companies like Facebook or Microsoft operate, you couldn’t do it one server at a time. You have to have these scalable tools. So we set out to build those scalable tools for robotics, and we landed on this concept that we call rob-ops. If you’ve heard of dev-ops, which is tools and practices for operating software at scale, we’re bringing a lot of those ideas to the world of robotics. Danny:– That’s awesome. Can you say that again? I had not heard that, and I’m not ashamed to admit that, so what was… Florian:– So in the cloud space, there’s something called dev-ops. Danny:– Oh, dev-ops. Okay, I thought you said something else. Florian:– Yeah, like development and operations put together. So now we’re doing rob-ops which is robotics operations as a cohesive idea. Danny:– Perfect. That makes a lot of sense, and that’s great. Great analogy there, or connection on that. I’m curious, though; how did—you said you talked to several robotics companies just wanting to get an understanding. I think you said 20 or so leaders and end users. What was that moment in your mind? It sounds like you’ve done this before, so it’s not like—you’ve gone through this process, but did you have a particular moment where you said, okay, yeah, this is it. This is a big problem that I know we can solve, and it’s time to go. Let’s do that. What was that moment like? Florian:– Yeah, maybe to the point that you made about having done this before, there’s a method to the madness of starting a company. It’s generally called customer discovery and customer development. Customer development is a framework by Steve Blank. You go through the process, and that’s part of what guided us. In our case, maybe the moment of insight was precisely this idea that robots are, if you want to think about it this way, it’s like servers on wheels. It’s like a complex computer server with lots of sensors and moving around. So it’s in the—if you designed a data center for hundreds of thousands of hosts or computers, you need reliable power. You need great networking. You need ventilation to dissipate all that heat, so you design it, and you control as much as you can. A fleet of robots, I like to call it, it’s a data center from hell. It’s the worst possible way of operating a distributed computing platform because a lot of times they’re in uncontrolled environments. They have networks that come in and out. They’re on battery, so they need to come back on their own to recharge if they’re a mobile robot. So the challenges are much, much higher. When we talked to a lot of these robotics companies, what we realized is a lot of them weren’t necessarily thinking about those problems of scaling. If you’re very passionate about robotics, maybe you have a PhD and you work as a roboticist, you really have to focus on building that robot. We felt we could augment and help them focus on that, and we’ll take care of the boring part, if you will, of running the robots at scale. Danny:– Yeah, that’s exciting. So maybe an oversimplification of what you do. I’m a little nervous about saying this, but it sounds like you’re helping to solve—and there’s a lot of different challenges, but I know there’s a big challenge of interoperability, certainly, in this space because there are so—it’s interesting to see the growth of robotics over the last several years. It was a fast trajectory of growth, and then you pile on the pandemic. The huge needs just grew exponentially, and they continue. I can’t remember; there was a stat that I’ve seen as far as how many new robotics companies are on the—you have players who’ve been in here for years and years and years, and then you’ve got constantly new start-ups. It’s interesting because, like you mentioned, a lot of people think, you watch Terminator or all these other robotics and AI movies. Oh, wow, it’s going to take over the world and all these things. The reality of it is, is even though that, yes, you’ve got from an automation standpoint you mentioned automotive, and you’ve got these giant, maybe these FANUC robots that have been there, and they’re moving, and they’re—but they’re very set in place, or they’re caged. You’ve got all of these AMRs that are now, they’ve got more autonomy, and they’re going around all over the place. It’s totally opened up the playing field. But the problem being that, that’s great, but you can still only solve a finite amount of problems with this particular robot. You may need a whole fleet of 10 different types of robots to solve some of these different challenges. Is that part of what you’re solving there, with some of the software solutions? Florian:– Absolutely. If I can get really geeky here— Danny:– Please, get really geeky. Florian:– For a minute, we like to say we solve the four Os of robot operations. So the first O is observability. This is kind of like a fancy word for monitoring, but it’s really knowing through data what’s up. What is the robot doing? It has its own set of challenges as I describe because they’re all over the place. They’re on weak networks sometimes. So we solved that problem, and that becomes the foundation because it’s the data. So at our core, we’re a data platform. But then from there, there’s an operational aspect which is, robots get into situations where they’re no longer autonomous. They’re stuck. This happens—I won’t disclose numbers, but it happens a lot more than everyone anticipates. I think we have this picture of a robot; oh, it must be perfect. Far from it, especially when you’re in crazy environments. You talk about a warehouse, for example, but we’ve seen robots in retail stores while there are shoppers around. So there’s going to be a kid with a shopping cart and ketchup stains on the floor. You can’t expect the robot to be perfect, and that’s where some of these—augmenting the robot by human operators is a way to do that. So that’s the second O, operations. I think then you get into optimization. What you really want is to not have those problems happen as often. How can you solve it? We do things like tools for root cause analysis. Root cause analysis allows you to identify cases where things didn’t go as planned and derive insights from it. And just to give you a sense of scale, each robot may generate a terabyte of data per hour. The approach of, we’ll just throw everything to the cloud isn’t really practical, especially as you’re thinking about we now have fleets of thousands of robots operating in the world. So that takes us—optimization is how do I run my fleet more efficiently? Then the last O is getting to what you were mentioning before. We call it orchestration. Again, that’s a very cloud term, but it’s really, how do I bring different components together in a harmonious way? Now you’re more like the conductor of the orchestra. That can include many different types of robots from different vendors. In a warehouse, for example, you may have—let’s say there’s a cargo dock, and a truck comes in. Well you need to unload it, so there are now autonomous forklifts that can do part of that job, or maybe all of it one day. Then you have pallets. You need a depalletizing robot that will break down the pallet into its components. Now you need to take it into the warehouse proper. How do you do that? Do you do it one by one? Traditionally a lot of these warehouses have conveyor belts. The conveyor belts are really efficient, but they’re really expensive and they’re really inflexible. So what an AMR, an autonomous mobile robot gives you is flexibility because it’s controlled through software. So that’s where we’re able to bring all of these robots from different vendors and give someone a complete view. The term in the industry is a single pane of glass, one way to see all of your IT, or in this case OT, in one view. I think that’s where this is going, and you see really pioneering companies like FedEx really advocating for this ability to control different robots. Danny:– That’s super interesting. Thank you so much for getting, I think you said geeky with me. Getting into the technical weeds. I appreciate that. Actually one thing in particular that I had no idea, never heard this before: one terabyte of data per hour, one robot could generate. That’s a ton of data, especially if you’ve got a fleet of hundreds of these things. Transmitting that and getting that, storing it and then analyzing it seems—That’s crazy. That’s a lot of data. Florian:– A lot of times, Danny, all of those terabytes of data, you just need this one piece of data, the proverbial needle in the haystack. I think that’s what we do is, we try to turn all of that data into insights that people can take action on. Danny:– Right, absolutely. Well there’s a ton there. A couple other questions that I’ve got coming up then, how do you engage with your customers? Are your customers—obviously you talked about robotics companies. So I imagine, would your customers be robotics companies, end users, and integrators? Do you work with one, all—how does that work? Florian:– We work with different players in the ecosystem. At the end of the day, because of our orientation towards operations, we really care about maximizing the potential of every robot. As a robot vendor, of course you want a more efficient robot, a robot that fails less often or that requires fewer interventions. So we can provide a lot of data for them to improve on their robot. As an end-user, you’re really running the robots. In fact, I like to say, and this is a little shocking for companies in the robotics space, the end users, they don’t really care about the robots. They care about their process and what the robot can do to it. Their needs are going to be a little different. They’re all based on the same foundation of data, but what they’re trying to do is, they’re trying to drive this SLA higher and higher and higher. What’s interesting is there’s this middle ground between those two cases that I mentioned which is this idea of robotics as a service. Increasingly you see companies that, instead of selling you a robot and now you do whatever you want with it, they’ll essentially sell you a service that is backed by their own robots. We’re starting to see—this is very new—third party companies that will say okay, I’m not going to make the robot. I’m not an end-user. I’m just going to run these robots at scale. So we can help them with our infrastructure to do that like I said at scale, across robots, across sites, and across customers. Danny:– Yeah, that sounds super interesting. I have heard, definitely over the last little bit or so, robotics as a service. I think it’s a super fascinating play. Certainly with all the labor issues that we’ve got going on now, certainly a lot of companies are turning towards automation in any way—there’s a huge shift in the digital transformation that is happening. It was happening before, but again because of the pandemic in all areas, you’re seeing the supply chain, manufacturing, all up and down, logistics, and beyond. End users, you were mentioning retail and grocery for example. I love the store that you talked about, how the response with the local grocery store in the neighborhood, you said being Silicon Valley, what do we do? It’s fascinating, but we’re continuing to see more of that. And we’ll see more. What does the future look like for you? Florian:– I like to think of this future where we have millions of robots around the world that are positively impacting billions of people. Each robot can have this multiplier effect, whether it’s a robot in a farm making—so one of the companies that we’re familiar with is a, basically a robot that goes in a farm, identifies weeds, and then literally zaps them with lasers. Instead of having to have herbicides and spray it, you can turn that to zero. Another customer of ours has been able to grow leafy greens with a 90% reduction in the use of water. Again, all of these are things that are not moving the needle a little bit. They’re moving it a lot. We’re seeing a lot of electrification also which a lot of times goes with autonomy together. We see that reducing, for example, the carbon emissions. These little robots that deliver around Mountain View, they’re replacing somebody driving around in their car, getting out of the car, dropping the groceries, and getting back in the car. I think these things have huge impact. But to take it a little bit further, where we see the future is the collaboration between robots and people. I think we’re only starting to see the shape of that. I like to talk about this what we call a roboteer, like a puppeteer, but for robots. Maybe your job isn’t to go deliver food or isn’t to unload a truck. You’re monitoring. You’re the boss of a group of robots that are doing those things. Just like we said, the robots may not work fully autonomously, fully independently all the time. There’s always going to be corner cases or areas where somebody needs to intervene. But now maybe you can do–– instead of sitting in a forklift and driving it around–– maybe you can supervise 5 forklifts or 10 forklifts. You don’t even need to be there. You could be doing it through our platform or through other people’s platform. You could be in an air-conditioned room sitting in an ergonomic chair and responding to events as they happen. I think that vision of collaboration between people and robots and obviously the cloud and AI that come into that, I think that’s a great, in my mind a very optimistic vision of the future. Danny:– That’s really interesting. I like that, and it’s interesting. People always harp on, “Robotics is taking people’s job away,” and the answer we keep hearing is—I love this; I haven’t heard this, roboteer. It makes a lot of sense. You’re seeing that’s a—I do certainly believe that is where the future is going, too, when you look at a lot of these jobs as well. Obviously we’ve got major issues right now for a whole host of reasons, but the trend for years though before this has been, a lot of people, they don’t want to work. I don’t want to work in a warehouse, or I don’t want to work in manufacturing or logistics. There’s been a struggle trying to attract, so if there’s a way to say listen, we’re already seeing a decline in that. If we can bring in a solution over here from a technology standpoint to be able to assist people in those jobs, it’s creating an increased net positive effect. Florian:– Yeah, and you say I don’t want to work. I think it’s—these are tough jobs. I had the opportunity to tour some facilities, and without automation your job may be to literally walk 15 miles a day within the warehouse pushing a cart back and forth. Let me tell you, that’s not good on your knees. It may be super healthy because you’re walking a lot, but it’s not necessarily the best environment where you want to do that. What we’ve seen is, we’ve seen this tremendous increase in productivity while also improving the health of the workers where you can have, instead of somebody pushing a cart, the cart knows where to go. When you think about a robot, some people may have this idea of a humanoid robot. Our robots have very boring shapes. They resemble something that has existed all along, but now they add autonomy to it. So if the cart can go where it needs to go, now you’re focused on picking the right products and putting them on the cart, not on walking back and forth. So that has the dual effect of better, less wear and tear on the body and also greater productivity. Some companies will see 300% productivity increases by introducing an AMR. I think it can very much be a win-win. Danny:– Certainly, absolutely. Alright, my last question is a very difficult question. Since you brought up Star Wars earlier and you’re working in the robotics space, I’m curious. What’s the difference between a robot and a droid? Florian:– Ah, I think it’s just a terminology thing. Everyone knows R2-D2. Danny:– Who’s that? Sorry; no, I’m just playing. Florian:– So that is actually called an astromech droid. This is me showing off my Star Wars nerdiness. They do have different models. Not all of them are R2-D2. You do have, in the Star Wars universe, different types of droids that do different things. They already had this orchestration problem in Star Wars, and maybe they’re using InOrbit—you know, InOrbit, star—maybe there’s something there. Danny:– Maybe, and it’s a great parlay from the question of the future. So there we go. Listen Florian, I really have appreciated our conversation. Thank you for obliging. I loved your answer. Thank you so much on that, and for just sharing all of your insights about the industry, what you guys are doing, sharing your story and how you got to where you are today. It sounds like you guys have a very bright future, no pun intended with the Star Wars analogy. But I really do think that you guys are solving some big challenges and creating some unique opportunities in a space that is exploding. I’m going to be very excited to follow you guys. So for those companies who would like to learn more about you, I’ve got the website here, or the URL, inorbit.ai. I want to make sure that’s correct. We’ll have that in the show notes. Florian:– You got it. Danny:– And Florian, again, just thank you so much for your time with us today. Florian:– Danny, it’s been a lot of fun. Thank you so much. Danny:– I have enjoyed it too. Alright. Alright, well that wraps up today’s IndustrialSage Executive Series with Florian Pestoni who is the CEO and cofounder of InOrbit. You can go check them out at inorbit.ai. I loved today’s episode. Great story; a lot of great insights here. 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| Jervis Webb at Daifuku: Bruce Buscher | 10 avr. 2022 | 00:48:27 | |
Bruce Buscher of Jervis Webb shares his career history and Daifuku’s journey navigating the labor shortage with AGVs and AMRs.
Danny:
– Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Bruce Buscher. He is the vice president of sales of the Smart Handling Group of Jervis Webb. Bruce, thank you so much for joining me today on the Executive Series. Bruce:– Thanks for the invitation. Glad to be here. Danny:– Well I’m excited about this for multiple reasons. We met at the assembly show in Chicago; this was in October-ish. I’m blanking on my time. Bruce:– Yeah, the 26th through the 28th. Danny:– Oh, perfect, yes. And we had a great conversation, and we got to talking. I was like, man, Bruce, you need to come on the show. And it just so happened that it worked out for our filming that you were going to be here. And so I’m super excited to have you in person. I think you are the first person that we’ve had in person since the pandemic and all that, so it’s nice to have people back in the office. Now granted, we were doing a lot of this before too, and remote’s way easier. So we were accustomed to it beforehand. But nonetheless, always love it when somebody can come in, in person. Thank you for coming in. So first thing is, for those who aren’t familiar with Jervis Webb, if you can just tell us who you guys are, what you do. I know you’ve got Daifuku on your shirt. Maybe you could explain a little bit about just the company and the division specifically that you work in. Bruce:– Sure. Yeah, the company is Daifuku Corporation. They’re a Japanese-based company headquartered in Osaka, Japan. Jervis Webb is a division, airport technologies division of Daifuku Corporation. Here in North America the Jervis Webb group is made up of two pieces: airport material handling equipment as well as automatic guided vehicles. My responsibility for Daifuku is the automatic guided vehicles for North America, and we cross over in the markets. We cross over in the automotive market. We also sell AGV systems for parts of airport baggage handling systems and things. The acquisition between the two, there’s a lot of history between Daifuku Corporation and Jervis Webb going back actually to 1952. Daifuku Corporation became a licensee of the Jervis Webb company for our chain conveyor products to sell in the Japanese market to Toyota, Honda, Nissan, Subaru, and the other Japanese auto manufacturers. Then about 15 years ago the Webb family had decided that they wanted to exit the material handling business, family-owned, and at the time Susan Webb was the only family member of the Webb family that was active within the company, but there were 31 or 32 shareholders, Susan being one of them. She got outvoted by the rest of her cousins, nieces, and nephews, so the company was sold in December, 2007. And Daifuku Corporation actually purchased the company after a long-standing relationship going back to, like I said, 1952. It was a very good fit for Daifuku and a way for them to expand their business and footprint here in North America. Danny:– Yeah, that makes sense. Sounds like you got quite the storied history there with the company. So before we jump in a little bit more about specifically what you guys do and some of the challenges you’re seeing, I want to get to know you. I want to get to know Bruce a little bit more. This is one of my favorite parts on the Executive Series. So how did you get into this space? Take me back. Bruce:– Out of college my first job was with Honeywell Corporation in Minneapolis. Was working as an engineer: industrial engineer, production engineer, manufacturing engineer. It was kind of turbulent times back in the early 80s because of where interest rates and things were. There was a lot of shuffling around, and certain markets were booming. Other markets were going in the tank, so I was jumping around within the engineering ranks. And then one day I got a phone call from somebody in the marketing group with Honeywell, a guy by the name of Jim Woolford. He asked me to prepare for giving a site tour to some executives coming in from Whirlpool, from Lennox, and Rheem. They wanted to take a look at the manufacturing facilities where we built a lot of the product that we sell to them. And so I did that, and a couple days had passed by after the tour. Jim had called me and said, “You really are more of a salesperson than an engineer than anybody I’ve ever met before. You really ought to think about changing your career strategy.” I was at the time going back and getting my masters in business, and I was always interested in getting into and learning other parts of the business other than the technical side down on the plant floor. That was the door that opened up and said, okay, now is the time to make a change. I moved out of engineering within Honeywell and moved into their marketing group. Things just evolved after that, getting into sales and stuff. I found it was a good environment to use my technical background and technical knowledge but to use it in a fashion where I can work with customers and help solve their problems. That’s what got me into the sales end of it, and then on the automation side, that part with the technology and the way everything is changing. I’m a guy that I like to do things with my hands. This was a great way to use those skills in the sales side and, like I say, help customers solve their problems on the automation part of the equation. Danny:– Well it sounds like definitely a great fit. Obviously in this space there’s a lot of technical challenges. It’s a very technical sales process, so having that experience was obviously super critical. You said engineering background, so I’m assuming you went to college, got an engineering degree. Is that… Bruce:– Yeah, so my actual degree is industrial technology studies from what was at that time Mankato State University. Now it’s called Minnesota State University at Mankato, but it’s part of the University of Minnesota. When I was there and actually working for Honeywell, I got involved with Mankato State to actually help them become an accredited engineering school. At the time when I was there and going to school in Minnesota, University of Minnesota was the only accredited engineering program in the entire state. So a lot of engineering people, once the University of Minnesota program was filled up, they were leaving the state, going to North Dakota, South Dakota, Iowa, Wisconsin, Nebraska, wherever they could get in for an engineering program. For the state of Minnesota, they were losing a lot of revenue and things. And so we worked with the state, and because of my position within such a great company, Honeywell, and the fact that I was part of their engineering organization, I was invited to help Mankato State put together this program for the state of Minnesota and get them to be an accredited school. We did that, and of course now you can get any engineering degree, anything from chemical to electrical, computer science at Mankato right now. So that played a big part, and then with that I continued and picked up some of the other classes and things that I needed from a mechanical perspective because that was really what I enjoyed the most part on the engineering was on the mechanical side. I picked up the extra classes, and then I continued in and moved into the MBA programs. Danny:– That’s really interesting that you were saying that the University of Minnesota or Mankato—did I get that right—that that was the only accredited university in the whole, entire state of Minnesota. That’s very interesting. Bruce:– Yeah, and this was in the 1980, 1981 timeframe, so it’s not like this was back in the 60s or 70s. Danny:– Right, yeah. Bruce:– Yeah, it was really surprising that there was really only one place in the entire state where you could get a full engineering degree, and now all the other state schools within the state of Minnesota there are a number of them that you can get the engineering degrees there now. It’s a field that really just took off in the 1980s, not only in Minnesota but probably in a whole bunch of the other states as well. Danny:– Absolutely. I’ve got several in-laws, family members that are in Minnesota. That’s where my wife is from. And lot of brothers-in-law, sisters-in-law that have gone into the engineering space and production operations management and all of that. That’s why I was kind of shocked to hear that. It’s like, wow, that’s interesting. Good, glad they made that change. It sounds like you were instrumental in that. Bruce:– I helped out a little bit. Danny:– So one of the things that I wanted to get into—I really love asking this question. You touched on it a little bit, and I’m not sure if this was part of the answer there. Throughout your journey, who is somebody that really had a measurable impact in your career and your life? I know most of the time everyone says, oh, there’s so many. You mentioned somebody. Was that who you were thinking, or is there somebody else? Bruce:– Well Jim, of course, got me started to look outside the box and get outside of engineering because he— Danny:– That’s definitely outside the box. Bruce:– He clearly felt, he was along in that interview or factory tour. He saw more of a salesperson giving the tour, and how he explained it to me was when he called me to offer me a job was that I explained everything in more simplistic form, and I didn’t get into the technical details because these were executives, and they didn’t really want to hear or go down into the dirt and learn all the details. Danny:– “I don’t want to know how this thing works. What does it do?” Bruce:– So he was clearly a big influence for me to get me started. But the person that I would say really gave me a big foundation when it comes to factory automation type stuff is a very good friend of mine and a guy that I went to work for back in 1986, a guy by the name of Dennis Wisnosky. Dennis is a former executive himself through the GCA Corp. They made large robots, gantries and things. He did a lot of work with the technical people in the Air Force and Wright-Patterson Air Force Base. He started up a company, Wizdom Systems, Incorporated, in 1986 time frame. And it’s kind of a crazy story, but I got to know his wife because his wife was our real estate agent when we moved from Minneapolis to Chicago. She was the real estate person that Johnson Controls was using, and so she helped my wife and I get settled in Chicago. Shortly after that there was some announcements that were made within Johnson Controls, and my wife and I talked, and we really didn’t want to be a part of where the company was going which was going to require us to make another move to Milwaukee. We had just moved to Chicago and getting ourselves settled, so we decided, okay, we’re going to try to find a place, a way to settle down here. Rosemary, Dennis’s wife, actually introduced the two of us. She had mentioned that Dennis is starting this company. He really is looking for somebody with some sales and marketing background, things with background and knowledge of factory automation and so forth and controls. And that was a very good fit for where I was coming from and the background that I had. She got the two of us together, and we had what was supposed to be a short breakfast at Denny’s restaurant. Ended up turning into about a four or five hour meeting and developing a business plan. I went to work with Dennis, and one of the visions that we had—and again, this is in the mid-80s, so 1986, 1987 time frame— Wizdom Systems was an engineering consulting firm, and Dennis wanted to get into the controls business. There was a company that he found called Engineering Tools. It was a group of three or four ex-Intel people that realized that computers are starting to become a big thing in the 1980s here. For that reason he wanted to leverage the technologies of a computer and everything that Intel was doing and put it into the controls world which was at that time pretty much a proprietary, black box-type, whether it was an Allen-Bradley or a Modicon or somebody’s PLC. Everything was black box-oriented, and nothing was being networked together and things at the time. All that technology was just coming out and just getting started. We took this software, and we put it into a PC platform, and we launched Wizdom Controls which was a PC-based controls environment programmed, looked like, and felt like a programmable logic controller from an Allen-Bradley world. But you were doing everything on an IBM keyboard and using the technology that IBM and Microsoft and Dell and everybody else was coming out with in the PC world. That launched us, and that’s what really got me, more than anything, into the industrial automation side of it. I was with that company; we ended up—Emerson Electric purchased Wizdom Controls in 1996, October of 1996. I was with them for a while until the transitional period was over with, and then I migrated onto a couple other businesses that were also part of the industrial automation. I just actually celebrated my 15 years with the Webb company and Daifuku on December 6th. Danny:– Oh, congratulations. Bruce:– It’s been a lot of fun, a big journey. Danny:– Well it sounds like a lot of fun and a big journey, and I can only imagine really all of the change that you’ve seen in your career. You’re talking about it was ’86, controls, and using an IBM—I can only imagine now just that exponential curve of technology that continues to happen. Bruce:– Yeah, and in August of 1994, GM, Ford, and Chrysler had formed an organization which still exists today, but their charter has changed now, OMAC, Open Modular Architecture Control. There was a publication, a Connors publication called Control Engineering Magazine. That was like the Cadillac of all magazines in the 1970s and 1980s that all automation engineers would look at and read about. What’s the next generation of PLC? Who’s got what for sensors and things out there for your automation projects? The OMAC organization pretty much came out with—in fact they did come out in that article in Control Engineering magazine, and they said that they believe that PC-based technology will take over the proprietariness of programmable logic controllers and things in the future. OMAC was the big three from Detroit. It was their way of joining a team to promote this environment. For the most part it did happen the way they anticipated, but it took some different curves. Today you can, whether it’s from Schneider Electric or Siemens or Allen-Bradley or Omron, Mitsubishi, you can still buy their boxes that look like a programmable controller, but for the most part it’s an industrial computer inside of their rack so it doesn’t look like the Dell computer sitting on your desk. But it’s an industrial computer. Some of them are running operating systems like Microsoft. Some of them are running Linux. Some of them are running something else. Everything is operating exactly the way we envisioned it from a technology perspective. It’s more open architecture. Now you’re using 802.11 ethernet versus proprietary Allen-Bradley data highway and things like that. So that whole technology did evolve. Different details came into play throughout the process, but PC-based control is the basis of where everything is at. And today I don’t think there’s any type of sensor or control device that somehow doesn’t tie back into PC technology, making it much, much easier for customers that are building equipment and selling it to different companies or selling their services. It’s just a much more open environment than it was back then. Danny:– Oh, absolutely. And so many more capabilities, interoperability is huge. Let’s talk about—we talked a little bit about the past and this growth curve with technology. Where do you see things going? What does the future look like for you? Bruce:– We saw this back in 2008, 2009 when the economy took a serious dive because of the financial crisis. We saw a lot of manufacturing companies pick themselves up and made decisions right away; hey, we’re going to get lean. We’re going to go through our processes in our factories, and we’re going to find where we’re not efficient. We’re going to find where we’ve got waste, non-value added labor and things. We’re going to automate our way into the future and position ourselves so that we don’t have to go through the financial problems we went through when the markets crashed. Well when the pandemic came along, essentially the same thing happened, only now it’s not so much about the financial part of it. It’s about the workforce part of it. A lot of companies, they still don’t have their full workforces back yet. A lot of people have dropped out of the workforce. There’s supply chain issues and things going on right now, and so a lot of our clients today are looking at, okay, we’re going to spend this automation because of what Covid and the pandemic has exposed to us that we had this weak link in the workforce. And that gap is not closing fast enough. The number of our customers that normally were three-shift operations are still two shifts, and some of them are only one shift because their volume isn’t back yet, and in a lot of cases, they can’t get enough of their workforce to come back to work for them on a regular basis. Then of course the supply chain issues with not having enough parts, that’s not helping things either. You have two shifts of operation, and you’ve got enough parts to last for one and a half shifts. So everybody is looking for ways that they can automate to, again, try and avoid these issues in the future. Two to three years ago safety and ergonomics were probably the two biggest return on investment calculations for implementing robotic applications, implementing automatic guided vehicles, AMRs. Today probably the single most important value that everyone is looking at is, what does it do for my workforce? Because I have all these issues where I can’t get the people to come to work. Fine, let’s put in some automation to solve that problem for us. Danny:– Labor has always been an issue with manufacturing, attracting new people into the space, and there’s varying levels of it. I think this was a problem before the pandemic, but certainly afterwards for a whole host of reasons. You mentioned supply chain. Depending on what industry, too, you are in you had drops in demand. You had acceleration in demand. From a forecasting standpoint, who the heck knows what’s coming down the pike? We were talking earlier about some companies that we worked with that, they were seeing orders go through the roof just because of the way that the economics have shifted. But how much of this, in your perspective, how much of this did you see from February of 2020 to April of 2020? What did that shift look like in the need for what you guys have? Bruce:– For my group with the automatic guided vehicles, the increase that we saw clearly was due to the labor shortages. There’s no question about it. Our clients were even telling us right up front, “This project wasn’t planned for maybe another, until 2023 or 2024, but we can’t wait that long anymore because we can’t get enough of our employees back to fill the jobs.” And a lot of the positions that were open for some of the companies that are trying to expand their business because their markets are expanding—before the session started we were talking about the off-road vehicle industry. That industry has taken off to the point where they are planning the next generation of vehicles for 2023, 2024, much like whether a GM or a Ford plans for their next generation of cars and trucks because people want these toys. They want to play with them. And the manufacturers are saying, okay, if we’re going to expand the business, but it’s very difficult to find even new employees to come in because there’s—the manufacturing jobs have got a stigma about them. Well, I’m in a manufacturing plant. It might not be the greatest work environment, a lot of stereotypical type comments that I think a lot of people hang onto. So maybe for those reasons they’re not afraid of it. Maybe they just don’t feel that they’re around the technology that they like to be around that they get with their mobile phones and that type of thing. I’m not sure exactly what the reason is, but what I do know is that the manufacturing companies here in the US, they are planning that we are going to continue expanding our operations in North America. We’re going to continue expanding and bringing out new products. But we are going to do it based on automation, automated assembly lines, whether it’s through AMRs, AGVs, or some other level of automation. And we’re going to find again anything that is non-value added done by a person, we are going to try and figure out a way to automate that so that we can take that person that likes to work for us and redeploy them in another part of the operation where they get satisfaction and the value both for the company and for the employee. Danny:– Absolutely. Obviously when the pandemic happened, too, there was a lot of conversations around when we were off-shoring and moving a lot of manufacturing for the last several years—for the last decades—moving things to the Asian markets and Mexico, all kinds of other areas because of cheaper labor. Now that the labor bubble, if you will, has been popped and we say wait a minute; we’re really struggling with this, are you seeing some of your customers, are you seeing the industry bringing that back and saying, you know what? If we deploy technology and some automation, we could actually have some more domestic production here. And we’re seeing where the economics actually make sense. Bruce:– Absolutely. A lot of our biggest clients have brought product and projects that were targeted for maybe China or India or some other places in low labor rate areas. They have brought them back to the US and implemented them in the US factories with automation. One of probably the biggest things that we’ve seen with several of our large clients is to help in the cost-reduction efforts. They’re not so much setting up new plants outside of the US to take away business and jobs from the US. They’re setting up plants in other parts of the world to sell to those parts of the world. So yeah, you’re not exporting it from the US, but they become much more cost-effective by having a factory in Poland or having a factory in India or China or wherever it might be in Southeast Asia to serve that part of the market. We even do that ourselves. Daifuku China is a license from the Jervis Webb company to build some of our automatic guided vehicles. Those automatic guided vehicles are built for the Chinese market. We had to do it because the customers really were demanding it from us when we did this. We liked the idea of exporting them from the US, but we were going to start losing the business because the amount of time that it took to export it over to China, get it through customs, it could be anywhere from one to three months. Our customers, especially in the automotive space, they couldn’t afford to take those kind of hits on their big programs. And so they asked us, “Is there a way that we can get these vehicles, the exact design, but get them manufactured in China?” And so Daifuku said, “Yeah. We’ll get our Chinese factories to build the same, exact product that we’re building for you in Michigan. We’ll build it for you in China, but it has to stay in China. What’s built in China for automatic guided vehicles stays there. It cannot be exported to any other part of the world. Everything else still has to come through our Michigan plants.” And we’ve seen a lot of our customers doing the same thing: buying factories in other parts of the world to duplicate what they’re doing here in the US for that part of the market because by the time you export, especially with all the tax issues and import/export duties and tariffs and things that have taken place over the last few years, it really makes it difficult for a lot of companies to try to send product into other parts of the world where the dollar is much stronger than their local currency, so it destroys the market and the whole benefit of that. Danny:– Absolutely, it makes a lot of sense. And to be honest with you, I get excited about more US-based operations coming back here and growing here in the US just from an independence standpoint. And I think if anything that we’ve learned when you look at the supply chain and the resiliency, one of the big things is flexibility and being able to respond. And so when you have massive lead times because of transportation or logistical challenges, when you’re able to localize that production, that, like you mentioned, takes a lot of that off the table so you can really help to serve your customers better and faster and respond in a much more flexible manner. I think that’s a really interesting result, if you will, and I think that’s something that we’ve seen with the pandemic. You always hear, too, with technology, specifically with robotics, AGVs, and AMRs oh, my gosh, they’re taking away people’s jobs and all this stuff. You’re like, okay well the reality of it is, especially now, we got tons of jobs. Where are all these people? They don’t want it, and yet everybody still wants their really cheap items on Amazon. Something’s got to give. Bruce:– It’s a Catch 22 situation. There’s no questioning. I’ve been asked that question multiple times by customers, by friends just having casual conversations, even family members around the dinner table. What about all the people that are getting laid off? A lot of companies aren’t necessarily laying people off. They’re trying to redeploy their workforce and getting them to do value-added jobs. If you build cars, and your job in that plant is moving boxes around or moving parts around in totes, how is that helping build that car and making that car better and safer and less expensive so that the consumer can afford to buy them? And that’s the way you have to look at it. It’s not necessarily about all the people that you’re going to put out of work. I can also say without hesitation that the way our business has grown since 2008, 2009 time frame, in our factory alone, we’ve added a lot of people to our factory to help build these AGVs that we’re selling to customers. For a lot of our clients, again, their main focus isn’t, well, we want to get rid of bodies. What they want to do is they want to get rid of the jobs that nobody really likes to do. There’s not a lot of self-satisfaction in those jobs. And they add no value to whatever product it is that’s coming out of that factory. What the companies want to do is they want to take their employees and they want to give them a purpose. And by redeploying them in the factory with a job that actually has a purpose, that is actually building a car or building a motorcycle or refrigerator or whatever it is, they’re going to feel better about getting up every morning and going to work knowing that, “Hey, I’m going to be building refrigerators today,” instead of, “Hey, I’m going to be moving boxes around.” There’s just not a lot of self-satisfaction in that type of a job. Danny:– Right, absolutely. That makes a lot of sense. As we’re winding down on our conversation—this has been fascinating. I’ve really enjoyed it. Right now what does your organization do, what does Daifuku do or the Jervis Webb division—sorry, I had to write it down—the Smart Handling Group of Jervis Webb, what are you guys doing right now to stay ahead of your peers? The hard-hitting question. Bruce:– The hard-hitting question. We have ourselves, we’re really a very conservative company. We’re probably not going to be the company that’s going to be the first on the market with new technology. We acknowledge that the technology is changing, and it’s changing very rapidly right now. Automatic guided vehicles, AMRs, if you just look at in the last five years, I’ll go back to probably four to five years ago. There were maybe 20 to 23 companies total in North America selling mainly automatic guided vehicles, but there were a few selling AMR products and things at the time. Today when you look at the number of companies—and the companies are still coming in from China and other parts of the world because they want to get a piece of this growing AGV market, AMR market. It’s now targeted to be close to $18 billion by the end of 2025, 2026. There’s almost 60 companies and growing here in North America. And so the big thing was that AMRs brought to the table is the LiDAR technology, not having to put in an infrastructure that automatic guided vehicles use and so forth. There is really a lot of misinformation out there between the two different products, an automatic guided vehicle and an AMR. What makes what what? Everybody’s got their own opinion. In my opinion—again, this is my own personal perspective. I try to run my group this way, and we educate our customers this way. An AMR and an AGV basically do the same thing. We pick something up from point A, and we take it to point B. The application itself drives how often you need to do it, how many jobs per hour, whatever the customer is looking for. That all comes out in the end. But the technology literally is a complete crossover. Just like AMRs, we support the LiDAR technology. We call it natural feature navigation where the vehicle will look, and it will find building columns, walls, pieces of equipment, and it will guide off of those things instead of using laser targets or inertial plugs or magnetic tape on the floor. But we still support all those other technologies. And so where we’re going as a company, our philosophy is we want to one, learn from the customer. What is the problem you’re trying to solve? Two, with that, we’re going to try and find and identify one of our standard AGV products that would best fit your application, Mr. Customer. Then on top of that, and the last part of it is with all the different technologies that we have available to us that are our own technologies that we’ve developed, we are going to recommend—being the experts, because we’ve been doing this since 1962—we’re going to recommend. I know you say you want this technology on your vehicles, but we can provide that, but we really believe that this is the better technology, and for these reasons we believe it’s the better technology. Sometimes the customers listen to us, and sometimes they don’t. But that’s where we’re at, and we’re staying on top of where LiDAR is going and the next generation. It was less than 10 years ago. The fastest that you could get automatic guided vehicles to move in a plant was 200, 250 feet a minute. Now the average for most of us is running around 360 feet a minute. When the next generation of sensors start to react and respond faster, you’ll probably start seeing automatic guided vehicles, AMRs that might be running at 500 feet a minute and so forth. We’ve got to wait for the safety devices to get caught up with where the actual speed of these devices can operate because again being a very conservative company, we’re never going to put anything in front of safety. It stops right there. I don’t care how cool the technology is, whether the customer wants it or not. If we don’t believe that it’s safe, there’s no way that we’re going to deploy it on our vehicles and start to advertise it for that. We see a lot of growth in the marketplace, several billion dollars going from I think it was in 2022 the markets were supposed to be about four billion worldwide, and now they’re projected 18 billion worldwide between AMRS and AGVs. Danny:– Wow. Bruce:– The battery technology is going gangbusters right now. Lithium ion batteries, the cost per dollar amp hour is really getting almost equal to that of what lead acid batteries are. Just updating, and the technology that we already have is probably the position we’re going to be taking, at least for the next couple of years until some of these safety devices and things get caught up to where we can start running the vehicles faster. And then the integration with the rest of the systems, whether it’s MES system or MRP system, WMS systems that are in the factories, more integration at that level is going to be a big part of where this technology is going. Danny:– Absolutely, it makes a lot of sense, and I know, especially with the stat you mentioned. The market has just grown from 4 billion to 18, obviously it’s introducing a lot of new players in the space. One interesting little tidbit that one of our previous guests that we recorded just before this, we were talking about what I thought was interesting, is that from a startup perspective, they gave a stat saying that 25% of GDP is from manufacturing. Yet from a startup perspective, 0.7% are actually from startups in the manufacturing space. A big part of it, I think, is from not understanding. It’s a very complex; manufacturing is very complex. There is a lot of things going on there. I think what we’re seeing, which is interesting, and we were talking about this a little bit before, is that there’s a lot of new players on the space. There’s a lot of money pouring in from Silicon Valley. There’s a lot of VC and PE money being dumped in because we’ve got, there’s robotics in there, but implementing that into processes, there’s a lot of technical know-how. There’s a lot of things going on. So it’s going to be interesting to see how things shake out as we continue to go because obviously this is a space that is just blowing up. Bruce:– That’s probably one of our biggest challenges today when we’re talking with a customer that reaches out to us and wants to automate part of their operation. They read all of this stuff in, whether it’s on YouTube or different publications. They’re reading about all this technology. They’re reading about all these companies that have come out with this new product, new AGV or new AMR. One of the things that we have been talking to customers about a lot the last couple years is, look guys. You really need to better investigate this technology or this company to make sure that they are on solid ground for what you’re looking for. The fact that there’s so many new startup companies in the AGV business, some of them don’t even own their own technology. Some of them are buying and licensing bits and pieces from other companies, putting something together, and here. Here’s my AMR, or here’s my AGV. There’s nothing wrong with that provided that they have the financial means and background to be stable 10 years from now when you still need spare parts. When it comes to the installation and implementation of this automation in the factory, what kind of experience do they have? Within our group, it’s kind of ironic, but again being one of the oldest AGV companies in North America and being in this business since 1962, we’ve got engineers in our software and our electrical group that have literally been with the company 30, 35, 38 years, some of them going on 40 years. And they’ve been doing automatic guided vehicles that entire time. They’ve been there, done that, and there are so many things that some of these new startup companies, they don’t know how to design a system especially in a manufacturing environment, and even in warehouse and distribution. They haven’t seen enough experience themselves to where they don’t even know what questions to ask all the time. When you were talking about integration with some of the other equipment, some of the other software that the customer has, what safety issues you should be concerned about, and the safety standards themselves. It used to be ANSI B56.5 safety standard. Well now there’s some new safety standards that are coming out because the AMR community and the AGV community came together to develop a next generation of standards because there really were no safety standards guiding the AMR products. Although that was good because we really didn’t have to comply to anything if I’m an AMR company, the safety advisors and safety supervisors of the clients, that’s not what they want to hear. They want to know, how are you going to protect my employees from being hurt in their own work environment? How are you going to protect our equipment so that you’re not running into our building and some of our machines and all of that type of stuff. There’s a lot of that that’s being addressed now, slow and behind schedule from where it really needs to be. They admit they’re just now catching up with the technology and with the players in the business. But there’s a lot of things where I think we’re at the point in the industry and the market where we’ve got to slow down just a little bit, let everything else get caught up, the safety standards as well as the technology from where the companies are at before we start exploring in the new areas. The big thing is making sure you’ve got the right people designing a system that will work safely in your environment and yet accomplish what you’re looking for it to do from an automation perspective. Danny:– Absolutely, makes a lot of sense. Bruce, thank you so much for your time today on the Executive Series. From the first moment that we met and we had a great conversation at the assembly show—I wish we could’ve recorded that, and we got into some of it here, but it was great. It was very natural, very organic, and I really enjoyed talking about it and how you view things and hearing your insights. Thanks for coming in. Bruce:– You’re very welcome. Danny:– It was awesome. So for those who’d like to learn more about you guys, our audience can go to daifuku.com and come and check you guys out there. Bruce:– Right. Danny:– Alright, well so thanks so much. I really appreciate it, and I’ll wrap us out here. Alright, okay, well there you go. Thank you so much for watching or listening if you’re listening on any of the podcasting stations that we’re on. Fascinating episode. I really enjoyed it. Super excited that Bruce is able to come into the studio here. But thanks for watching. Hey listen, if you are not subscribed, you need to go make sure you get on that list because you’re missing out on great content like this great episode where you’re hearing from leaders and experts in the industry about what they’re doing and how the industry’s changing for them. Sometimes you guys are in the same space; some you are in tangential. There is a lot to learn, so get on the subscription list. It’s really easy; go to IndustrialSage.com and you can subscribe. You’ll get this; we send this out every week. So that’s it. That’s all I’ve got for you today. Thanks for watching. I’ll be back next week with another episode on IndustrialSage.
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| OSS Ventures: Renan Devillieres | 27 mars 2022 | 00:33:05 | |
Renan Devillieres of OSS Ventures explains their highly-successful business model of uniting the disparate cultures of manufacturers and tech companies.
Danny: – Well hello and welcome to today’s IndustrialSage Executive Series interview. I am joined all the way from France. I have the CEO of OSS Ventures, Renan Devillieres. Did I get that right, Renan? Renan:– Excellent. Danny:– We practiced that many times. Sorry, my French is not that great. Thank you so much for joining me today on the Executive Series. Renan:– Thank you for having me. Danny:– I’m super excited about it. Again, I hope I didn’t butcher things too badly. But hey, before we get into the episode, I want to know a little bit about OSS Ventures. What do you guys do? Renan:– Sure. So we are a venture builder. A venture builder is a special kind of investment fund. Instead of investing funds in companies, start-ups, technological start-ups that already exist, we invest a meaningful amount of money, time, and resources in companies that do not exist yet. We provide the ideas. We provide with the partners, and we create companies out of nothing. And we are specialized in manufacturing. Danny:– Interesting. That sounds really interesting, and we’re going to get more into that here in a little bit about, specifically, some of the challenges that you’re solving and maybe how you’re doing this because it sounds very intriguing like a different business model. But before we get into that, I want to learn a little bit about Renan. So tell me. How did you get into the manufacturing space? How did your career start? Renan:– At the start of my career—I was a nerd, so I was good at math. I did a school in France where they pay for your studies which is really good but then you have to give back up to two years in public service. I was an economist at the OECD, and I was studying industry at 20-year timeframe, the whole world. After two years doing that I told myself, I cannot go on not dealing with reality anymore because it was all so virtual and so long timeframes. And so I told myself, I like the subject. I like the topic of industry. I’ll try to go work in a factory. And so they got a very young guy with a mathematics degree, a theoretical mathematics degree trying to go work in a factory. And I think I sent something like 50 letters, got 50 no’s from factories. But I got one yes from the McKinsey & Company consulting arm specializing in factories. They were saying that I was good enough to give some advice to factories. So I did just that, and that is how I started my career in manufacturing. After four or five years working for McKinsey & Company, I went on to lead planning and then quality and then be a site director. And so the eight first years of my career, I was deep down in manufacturing, and I loved it. Danny:– That’s awesome. That is fantastic. That’s pretty cool. That’s a great story. Sometimes you hear people that come in; they didn’t start from day one. What’s kind of interesting, it sounds like you jumped into it, and you found a love for it. I think what’s interesting is the–– and I shared that a little bit with you in a different light, that I never thought that we would be working in this space. This was several years ago. Having come into it, it’s awesome. It’s pretty amazing. But what I think is interesting in your story, you said you sent out, you said 50 letters? Renan:– Yeah. Danny:– And you got the one response. Renan:– Yeah. Danny:– And then that opened the door. Renan:– Because basically—yeah, and basically factories were seeing a youngster with a theoretical mathematics degree like a coder—I was a coder at the time—just saying basically, hey, got any room? That’s not the right way to get hired by a factory. Danny:– No, that’s awesome. That’s fantastic. So what were some of those particular challenges that you had to face coming in? Obviously a big challenge of getting in right out the gate was getting your foot in the door. As you progressed in your career what did some of those other challenges look like? Renan:– One of them, one of the things that I think a lot of people who are not dealing with manufacturing work do not realize is that the factory or supply chain is one of the most complex objects in the world. In a factory you have 100 people, 200 different types of machines, tens of thousands of different products that you can make, and you need to organize all of that. All those physical flows, all those quality criteria, all the automation And so the factory or supply chain is fundamentally one of the most complex objects in organization we ever created as humans. And so as with all complex objects, there are a lot of rules, a lot of things to understand, a lot of things to organize. And I think getting to understand that as a big picture and then getting to try to innovate in that space is mighty hard because the cost of complexity to enter the subject is so high. Danny:– Yeah, absolutely, it’s super complex. I know that there’s a stat that comes out saying that—what is it—the manufacturing space, supply chain is one of the most data-prolific industries out there because of the complex processes and how layered it is. It’s pretty crazy. I totally understand coming in and having to really learn all of that. It’s a big challenge. Let’s talk about influencers in your career. Who was somebody that stands out that has had a major impact in your career or in your life–– it could be your personal life–– that has an impact on your career? Renan:– Obviously there are too many to mention but if I had to pick one, it would be after manufacturing I created a tech company. And I got lucky enough to get invested by a San Francisco-based fund linked to Google. And so the guy who taught me product management was a guy who worked at [unclear]. And so he showed to me the way that you think of a product that is immensely complex that has CALs as inputs and constraints and parameters. And you try to go from chaos to something relatively simple that does the job. What I fundamentally, that’s re-wired my mind from, “Complexity has to be dealt with by complexity,” to, “Complexity can be dealt with by simplicity.” He showed me that naturally and over and over and over again in the tech company that I started the end product after one year was 50% smaller than the first product that I shipped. And it was way better, like way better. And so he showed me that and that again, and when I first showed my product to him, I wanted to show everything. And I say, hey, get a load of this also and this and that because it’s that X case. And he looked at me and he said, this is way too complex for a very simple thing. That was, oh, oh, okay, right, yes. That was the best influence. Danny:– Yeah, that’s a great story, and that’s something that we hear about a lot and so a lot of companies still struggle with. It’s just when it comes to product development and design, a big challenge is developing something that there’s not necessarily an addressable market for because we think this is really cool. And we can design it, and then—so that’s one thing. I love that, from the design element, pieces that, it’s exciting, and we can get into the weeds about, oh, we can do it this way, all these different things. But the reality of it is, it’s simplicity is the big piece. And then selling that, it’s like understanding your audience and your markets. Really at the end of the day most—this may sound really bad—but most don’t care how it happens or what’s the inner workings. It’s just, let’s look at the result. It does that? Cool, I’m good with that. Now obviously some people—you’re going to be selling more to engineers, whatever, they’re going to want to get into the weeds and look at that. But I think that’s really, really interesting, just really the simplicity of design. What a great story. Super great lesson. What products were you making? Renan:– I was in the luxury industry in the first part of my career. Worked on complex watch-making. Among the things the most complicated you can do with engineers everywhere, complexity being the root of everything else. That was my first part of my career, and at some point I went out of my trajectory, and I created a tech company that I ended up selling. What really strikes me in those two worlds, there are so many similarities between the tech world and the manufacturing world because when you look at any application at scale, it’s a very complex web of constraints and what needs to be done, and blah, blah, blah. It’s a very complex web of engineers to be organized and to lead. And so it’s basically the same thing. A lot of methodology, product development methodology, lean method, are the same in the two worlds, but they don’t mix. And so that’s why also we created OSS Ventures. Danny:– That’s interesting. That’s great. I can only imagine. You said just the complexity, and you said initially you were making watches? Did I get that right? That’s pretty cool, very cool, actually. Let’s pivot now to today, what you’re doing. You mentioned earlier on the value prop of what you’re doing at OSS Ventures and that you’re basically creating companies out of nothing. Explain that to me. Renan:– In the grand scheme of things, we think, and we are not the only ones, a lot of the industry thinks that the era where basically digital and IT in manufacturing was just ERP and SAP, this era is gone. And so what we think is that in 5 to 10 years any factory will have between 50 and 100 dedicated vertical software that deal with one thing. For example, let’s take a very simple example, stock management. Stock management at scale is, you have tens of thousands of products. What is the right level of stock? Well today people are trying to do some things where we think that with the software that deals with this subject that will not be ERP and so our software will deal with that, with artificial intelligence and blah, blah, blah. We think that in any given factory there will be those sorts of softwares. And so we create those softwares. That’s our job. We create companies out of nothing. And so we have a very unique methodology which is we have a web, like a network of what we call pre-fab partners. Pre-fab partners are industries or companies, and they share pain points. So they say for example, I want to manage my stock, but it’s a mess. And so we find three, four, five companies with the same pain points, and we say to them, look. We are going to build the thing with you and solve the issue, and it’s going to cost you zero because OSS takes the risks. But when it works, you are going to say to all your friends, in all the factories of the world, that it works like a charm. And so we are going to sell as a software as a service what we created with you. We are going to sell it to the other 55,000 factories in the United States or Europe. And so that’s how we do. So it’s free for people who co-build with us, and then it’s paying for the rest of the world. And so far it works good. We went to 140 people in less than three years, so we are in hyper scaling mode. What we understood is: industry or manufacturing organizations, they have an issue which is that they cannot pay coders and manage coders like tech companies do. They don’t have the culture. They don’t have the time. They don’t have the processes. It’s very hard for them to retain those. And at the other end of the spectrum, the tech people, they do not know zero about manufacturing. And so they can only imagine what would be needed, but they don’t have access to that market because there is that cost of factoring the subjects. I have a stat for you: operations in manufacturing in the grand scheme of things is 25% of the world GDP. It’s 0.7% of all start-ups. Danny:– Wow, 0.7% of all start-ups. Renan:– For 25% of the world GDP. So okay, there is obviously something that wasn’t working. So that’s what we do. We put those very tech people, tech organizations, that tech know-how of building products at scale, and we take the pain points of manufacturing companies and create companies out of that. That’s what we do. Danny:– That’s a very interesting value proposition. Very interesting stat as well. I have a couple of follow-up questions that’s brought to mind. One is, I guess the most immediate: why do you think that—you said 25% of the GDP is made up of manufacturing, and yet 0.7% of all start-ups—that’s a tiny number—focus on that space. Why do you think that is? Renan:– I think there are quite a lot of reasons, and I think also it’s changing rapidly. First, manufacturing has a bad image. When you tell your kids, you tell them, you better be good at school. Otherwise you end up working at the factory. That’s things that are being said right now, So when you have that mental image, you think okay, I’m not going to work for those people. So that’s first. There is another which is two worlds that really don’t mix. Go to San Francisco. I lived in San Francisco for three years. Go to San Francisco and ask a random tech bro in the streets. Say, okay, how does a factory work? How does it work? You’ll get answers that are so far out of reality that it will be funny. The people who know tech do not know manufacturing, and people who know manufacturing do not know tech. But—and this is where it’s interesting—it’s changing really rapidly. Time person of the year, our dear friend Elon Musk, puts technology as a core asset to building the most tangible, physical thing in the whole world, a car. He’s now the richest people in the world. And what happened? He created the first factory in California. Now in California—I went to Fremont. In California you enter the Tesla factory. There are all those big machines, and you have young people, t-shirts and sneakers, and they are coding with their laptops in front of the machines. This is the future. This is not some greasy, in the countryside thing going on. That’s not where the future is headed. The future is headed towards mixing the tech and physical world in a totally new way of organizing physical production. Danny:– Absolutely. No, I love it. I love those. I love that you brought in Elon Musk, very topical, Time of the year, Elon Musk. I agree 100% with you on what the future is. You mentioned specifically going into a Tesla factory. You’ve got young people who are engaged in it. It’s coding; it’s the nexus between technology—and I think there is a big shift. I think the digital transformation that’s happening in manufacturing—I agree with you. I do believe it’s rapidly accelerating. I think it was accelerating pre-Covid. I think now, post-Covid or whatever, during Covid, it is now exponential. It’s clearly the way. But it also addresses the big labor challenges as well to be able to solve some of that. You mentioned attracting people to this greasy, this old, this mental image that everybody has. It’s a bad brand, a bad rap that it has. But I think we show a good light. We show what is actually happening. We show true innovation, and there’s a reason why people light up when they say, I want to go work for Tesla like you mentioned. I think that’s a—that kind of gets me excited a lot. Renan:– It does, it does. It’s very exciting. Danny:– That’s awesome. Okay, another question I want to ask about the value prop. You mentioned earlier on that you think that the future, the vision that you have is instead of managing, you’ve got an SAP, or you’ve got one big ERP, and it’s managing all the processes that it would be a little bit more micro-focused and saying maybe there was going to be 50 to 100 that’ll be I guess instead of generalizing the whole process, it’s going to be very specific to a certain process. Do you think that those would roll up under a larger ERP? Would they be more, I would say, just independent? What are your thoughts on that? Renan:– If you look at tech cycles in any industry, it’s a game of bundling and unbundling. There is that joke in San Francisco that there are only two ways of making money in enterprise software, either bundling or de-bundling. If you look at it from the big picture, the bundling phase is ending. SAP, the new version, SAP S/4HANA, the functional parameter is down 30%. So it’s 30% less feature than the previous version. The SAP CEO shared with us—the new one because the old one got fired—the new SAP CEO said in 10 years, 30% of all my income will come from third-party apps being distributed on top of the SAP platform. The best minds and the people who are leading in that area say the same thing. There is a question which is, will we see a kind of situation a la Apple/Android where someone will tax everyone? Or will we see a situation a la marketing apps where no one takes a tax? There is no question about, there will be innovation coming from verticalized software, way more easy to install, a lot of AGU machine learning, EURIX, everything. This will happen. Will it happen with an SAP tax or without the SAP tax is the interesting question. Danny:– Yeah, I think that’s very interesting as well that you bring up. I don’t see how that happens without that, to be honest. You look at Salesforce for example, and they’re across multiple industries, obviously. They’re growing in the manufacturing space. It’s the idea of creating a platform, and then you can plug into—Infor is doing that right now. And so I do see that happening. But to really boil it down, it’s creating an app store. It’s an app store on a platform. Renan:– That’s what they are trying to do. And at the same time, there is something called the common data model. The common data model is pushed by SAP, Microsoft, Salesforce, Infor, all the big guys. It’s an open-source data model, and if you share the same data model then you can be interoperable, and so there is not tax in the app store. And so the reason why this has been pushed as an open-source project is because the late entrance to the party such as Microsoft or people like that, they say we are going to go the open-source route so there is no single app store done by SAP or anything. But that’s very interesting to see. Danny:– Yeah, that is super interesting. I think it’s fascinating. I like the idea, the vision that you have going forward saying that we’re going to focus on micro processes, having the technology software to focus on that. One of the things that we’re seeing that’s very interesting, let’s say, in the robotics space right now, that is in supply chain and manufacturing, is the whole question of interoperability where you’ve got so many different platforms and different use cases with different AMRs or AGVs. But they all, essentially (boiling it down) they all need to talk to each other somehow. If you have proprietary system on top of proprietary system, from a scale standpoint it’s very difficult. It’s certainly not lean, and it creates challenges there. But I think that it does, from an efficiency standpoint, really help to solve some challenges in a much more meaningful way. It’s exciting, I think, to see where technology is going to take the manufacturing space and supply chain because I think there’s a lot of really complex problems that are way above my head; I’ll be honest with you. Going to your thing saying how these are complex processes, and you go to San Francisco, and who understands manufacturing and how a plant works. It’s like, what? It’s interesting. What would you say right now is the biggest challenge in the industry? Renan:– To me, I work closely with car manufacturers. I work closely with other verticals. Every single company is going to become a Tesla, a SpaceX or some form of it which is a company that leveraged technology as part of the operations and is able to operate at a pace, at a speed that is 5X the speed that is normal. It started with cars. It is coming with space. It will come in other vertical construction, pharma, pharma with the new R&D, and blah, blah. Today all the big CEOs in manufacturing are faced with one question which is adapt the culture at scale or fade into irrelevance. The car manufacturers, they took too long to do that, and so you have the Volkswagen CEO says, we are five years behind and it takes me 10 hours to assemble my cheapest car when it takes 1.5 hours to assemble a Tesla. And so they are all faced with that cultural organizational challenge. So what I say to them each time is the same. Nobody remembers, but 25 years ago a little-known Japanese car company called Toyota came and invented lean manufacturing, and it was radically different from everything everyone was doing at the time. And it took the whole manufacturing industry ten to fifteen years to implement some form of lean at one level. They have deep inside that muscle to change. They just need to grow it back. Danny:– That makes a lot of sense. It’s funny; it’s interesting that you bring in lean manufacturing because one of the questions that I’ve been posing to some people and there’s different facets of it, but relative to, let’s look at supply chain, and you look at lean. Have we taken it too far? Certainly we need to look at—the stat that you bring in you’re saying that Tesla in 1.5 hours, they can go from fully assembling a car on the line to 10 hours for others. I think that’s what I wrote down here. Obviously there’s some big things that need to happen there. With the Toyota example, I think one of the big areas for that was empowerment, I believe, on the line for people to be able to say hey, there’s a problem; we need to do—versus saying, hey, I’m a cog in a wheel, and I’m just gonna whatever. I see a problem, and there’s an issue, quality, whatever, I’m going to take ownership, and we’re going to be able to do that. It’s interesting when we look at production efficiency. I’m curious from a lean standpoint, have we pushed the envelope too far, specifically when you look at the broken supply chain right now that has forced some more globalization, outsourcing. I’m curious on your thoughts about that. I know we took a left turn here. Renan:– Something I am deeply convinced of is that innovation happens by layers. It’s not this or that; it’s this and that. Usually what I tend to see in companies, in industries, is that when they take an innovation, an organization innovation layer, if there is not another one to be created on top of that, then you go too far in the first layer, and you over-optimize for work that doesn’t exist anymore. And so one thing I say to all the people I work with is, I went to Tesla Fremont. I went to Amazon warehouses that are top of the pop. I went to the BYD (Build Your Dreams) car maker in China. The big difference between those lighthouse and a regular factory is that they are doing lean, and they are doing tech. So they are doing lean at certain points which is not to the extremes that we saw, especially in terms of reducing stocks and everything that we see in some companies. They are applying the first layer of innovation and the next one. And so what I see in organization is that organizations create reasons for existing. You have people. They are in charge of organizing the company. They know lean. They do lean, and they do lean for 30 years if left to themselves. And so you have to take those and say, now you do tech also. That is a mighty change. Danny:– That is a big change. That’s a big organizational shift, and that’s not an easy change. Renan:– No, that is not. Danny:– Well this has been just a fascinating conversation. I know we could literally go on for hours because I have—I probably have about 20 more questions I’d love to ask you, but I don’t have the time unfortunately. But for those who would like to learn more about you, they can check you guys out; they can go to oss.ventures. Is that correct? Renan:– Yep, excellent. Danny:– But yeah, like I said, this has been fantastic. I have a bunch of notes here, you can see here, that I wrote. It’s a fascinating conversation, Renan. Thank you so much for your time. Renan:– Thank you. Danny:– Alright, well and that wraps up today’s IndustrialSage Executive Series interview This is with CEO Renan Devillieres who is the CEO of OSS Ventures. If you’d like to learn more about them, it looks like they have some fascinating technology, and I really love Renan’s vision of the future. There’s so many great insights that I pulled away from here. One in particular, talking about how 25% of all GDP is in the manufacturing space, yet from an innovation standpoint from tech start-ups, that it’s 0.7%. I think that was fascinating. A lot of other things as well, just in terms of their vision on how they want to break down the processes and looking at maybe ERP isn’t one, big global behemoth that’s managing all the processes, but it’s more specialization. I’m kind of boiling that down. Anyways, as you can tell, I really enjoyed this episode, enjoyed talking with Renan. So check them out. Listen, if you’re not subscribed onto the IndustrialSage email list, you need to go to IndustrialSage.com. Get on there because you’re missing out on great insights like this where we’re talking with great leaders like Renan and others about innovation and changes happening in the manufacturing space. So that’s all I got for you today. Thank you so much for watching or listening if you’re listening to the podcast. I’ll be back next week with another episode on IndustrialSage.
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| TRG Solutions: Joe Yanoska | 13 mars 2022 | 00:29:30 | |
Joe Yanoska, CIO of TRG Solutions, joins us to discuss the vital importance of transparent and accessible data in supply chain and ecommerce.
Danny:
– Hello and welcome to today’s IndustrialSage Executive Series interview. I am joined by Joe Yanoska, who is the chief information officer at TRG Solutions. Joe, thank you so much for joining me today on the Executive Series. Joe:– Thank you very much. Happy to be here. Danny:– I am very excited to jump into today’s episode and learn a little bit more about you and about TRG Solutions. First off, tell me a little about TRG. Who are you guys? What do you guys do? Joe:– Well, we’re a managed service provider in the enterprise mobility and payment space. Really the easiest way to think about us is if it scans a barcode, we can help you figure out what devices are right for you. We can help you source them and deploy them out to all of your locations. And then while they’re in the field, if they experience a need for repair, you can ship them back. We can repair them, and then certainly at the end of that life cycle, if they need to be securely destroyed or whatever, we can help you with that as well. And then certainly, if you want to replace them, we will help you do the whole cycle all over again. So really being experts in that space and trying to help our customers use these however they need to, whether it be warehouse management, point of sale, whatever, we’re there to show you what devices work best in your environment and then can help you manage that entire lifecycle. Danny:– Great, awesome. So before we get more into the business and challenges and all that stuff, this is a special segment where I like to go in and learn about my victim—I mean my guest on the show. Joe, tell me a little bit about: how did you get into the industry? Joe:– Well for me, I started from the technology standpoint. I went to college to be a developer, an engineer, software engineer, and spent some time at Key Bank out of the gate. Then my second stop was at American Greetings where we spent a lot of time trying to save the world one greeting card at a time. One of the interesting things we got into there was personalized greeting cards. We really started to figure out the logistics of, obviously, taking something online, personalizing the card. But once you’ve taken that order, you’ve got to print it. You’ve got to kit it. You’ve got to ship it, and hopefully that it’s all right. If you think about Christmastime, you might be shipping out hundreds of cards to somebody or shipping them to everybody on their list on their behalf. There was an operation there to figure out how all that worked. And then that dovetailed into my time here at TRG Solutions where we really help people in those areas, especially around any of the mobile devices that are required to help any of their supply chain needs from, again, warehouse management to shipping to retail. You have all these touch points that need to happen along that way, and really these are the devices that are helping you collect that information, get it into your ERP systems so companies can manage their data, their inventory, all that stuff, as seamlessly as possible. Danny:– So you’re specifically, maybe some sort of RFID scanning. You said anything that basically has a barcode, essentially. Joe:– Barcode, RFID, anything that you’re able, helps you figure out where–– whether it’s a product, whether it’s luggage from an airline, whether it’s whatever, it’s got a barcode on it. And usually you want to know where that is all along the way. It’s these handheld mobile devices that people, their employees have in their hands scanning these barcoding. It’s usually updating an ERP system to let them know, hey, this is where it is in its process. And that’s where we’re really helping companies with that technology to make it as seamless and as easy as possible. Danny:– Excellent, well—but kind of going back a little bit, I’m going to take you back again. You said you wanted to be—program engineering, is that what you were studying? Joe:– Yeah, software developer, software engineer. Danny:– It sounds like you’re kind of still very much in that space. Joe:– Yeah, I’m the CIO here which means I handle all of the technology needs of our company. I call myself the head nerd, and I say that very proudly because it’s the systems that we put in place that help run our business, that help us help our customers run their businesses much more effectively. Danny:– Yeah, so in your career—one of my favorite questions to ask executives is hey, tell me about somebody who really had a big impact in your life, professionally primarily, but it could be personally as well. Who was that for you, and why? Joe:– Yeah, for me it certainly was a former CIO who I reported in to. It was actually in my time at American Greetings. One of the things that I really prided myself early in my career on was being a really good software engineer. Not only was I doing that, but I was also starting to lead software engineering teams. But that was my silo, so that’s what I was getting really good at. I remember I would—I always remember this day where I walked into his office and he’s like, “Joe, I want you to take over QA.” Now QA in software development is, you write the code, you send it over to the QA team, they test it. There’s always a little contention in that world because they’re finding stuff that’s wrong with your code. I certainly didn’t want to do that because I was a developer. I was on this side of the wall. What he did is, he saw something in me where I could come in and maybe make something better. Maybe something I didn’t see in myself. And so I ended up taking the challenge on, and that’s when I really saw my management career take off in that I could take on things that weren’t what I went to school for. The phrase he always used to use with me was, you need to get comfortable being uncomfortable. I still use that phrase today. I teach it to all the people that report in to me because I think there’s something to be said there where when you’re given a new opportunity there’s a confidence over time that you may develop to say, I can go into that situation. I can learn about what it is that I need to learn about. And I can start to manage that in a way that is maybe better than before. It may not be in an area that you were absolutely trained on. Now, that doesn’t mean you don’t need to go get training or you don’t need to go get a lot of books and start to study in the area. But what you do is, you develop a confidence that you can go into that situation. You can educate yourself enough, and then you can start to manage and operate that function in the business in a very effective way. And he was the guy that introduced me to that term and then started giving me other opportunities. QA was one of the first ones. Then I got the call center which was really outside my area of expertise, but you had to learn about that. That’s where it really helped me grow as a manager. And then it really set me up for higher jobs up the chain. I sit here today with a CIO title. I would never have been able to have that if it wasn’t for him. Danny:– That’s awesome. I absolutely love that mantra of being comfortable being uncomfortable. I love that. Actually it’s the third time it’s come up in this very short week already. It came up on Sunday. It came up yesterday. It came up now again. Joe:– It’s catching on. Danny:– It’s super catchy, but it’s also not just catchy, the meaning of it. It’s that everybody has fear, and it’s about what do you do with that fear? Because the opposite is being complacent. If you’re complacent, you don’t grow. Joe:– Absolutely. When I’m coaching some of my staff up, sometimes you can see some of those nonverbal cues where they’re uncomfortable, and I’ll ask them. Are you uncomfortable? And they’ll say, “Yeah.” I’m like, good. You’re growing. You’re now going to go learn a skill set that you didn’t have last week, and it’s going to help you in your career. And so those are things to be embraced and not be feared. Danny:– That’s awesome. I absolutely love it. That is 100%—love it. So today you got the title, the CIO title. What energizes you? You wake up in the morning, hey, here’s what I want to go tackle. What’s that thing for you? Joe:– For us it’s just constant improvement. One of the things that I absolutely love about where we are today is that we’re a mid-size company growing into a bigger company every day. And so what you’re constantly looking at, especially in the CIO seat, is do the systems, do the processes, do the people scale the way you need them to scale? A lot of cases where you go from startup, there’s a certain mentality in a startup company to a mid-size company, and oftentimes the things that got you where you were don’t get you where you need to be. You’ve got to think about things more strategically. You’ve got to think about systematizing some of your processes and procedures, things that you could do on a spreadsheet now are too big for a spreadsheet, and you need a system to manage it. It’s really coming in and working with our operations team, one, on how do we make our operations much more efficient and scalable— those are the two key words—and also throw secure in there as well because we would be remiss if we didn’t because those come with growth. Then the other side is, how do you work with your sales and product teams to make sure that the things that we’re putting into the system are things that maybe we could take to market and sell and show that we’re doing this and it’s a differentiator for us? When we’re in that sales cycle and we’re up against competition, we shine in that area and people want to bring their enterprise mobility business to us as opposed to one of our competitors. Danny:– That’s awesome. No, I love it. That’s great. Looking now with everything that’s going on in the industry, pandemic and all that fun stuff, how has the industry changed for you guys? Joe:– I think for us, and this is in helping our customers, our customers need to be much more transparent with their data than they ever have before, whether that is forecasting, whether that’s inventory management, whether that is putting in digital displays at retail. All of that requires systems. It requires people to help them service some of those things. Sometimes they’re putting new systems in, and it requires us to come in and help with some expertise, what systems they should buy or what kind of devices they should buy. A lot of it depends. Are you working in a warehouse that is basically a big freezer and is minus 20 all the time? Well, there’s a different type of device that will help you there. Are you working in an airport, like we talked about where the weather is going to be changing on a dime, and in some cases the device you might send to Minneapolis might be different than the device you send to Arizona because it’s different weather conditions all the time. Those are the things that our customers are constantly dealing with. We’re able to come in and help them figure out what’s the best way that they can service their customers or implement new devices or technology that helps them be more efficient and helps us bring value to their organization when we do that. Danny:– Absolutely. It was interesting; that’s probably the first answer that I’ve heard about transparency relative to—that’s a great answer. And it sounds like it’s across the board relative to suppliers, stakeholders, obviously end customers, just across the whole playing field. Joe:– Absolutely. When you look at retail now, think of all the things that they have to know inventory-wise. You expect to open up an app and know, in this store that is three miles from you, what they have on the shelf because you want to know they have it before you make that trip. That takes a lot of systems, a lot of inventory to make all of that work seamlessly, and that’s not going to change. That’s one of the things the pandemic really accelerated because now all of a sudden you went from a scenario where yeah, you were doing stuff on Amazon, and you were going to buy stuff in a store. But now all of a sudden the pick and go stuff is now big. And all of that requires that you know what your inventory is. You know what the prices are. And you’re making that available to your consumer base which you never really did before. Or maybe it’s not at the store, and it’s at the warehouse, and you want to give that customer a chance to say, okay, I can’t get it at the store, but we’ll send it to you in two or three days. You’re also starting to see that happen actually in retail. I was in a local sporting goods store not too long ago, and I was buying a new pair of running shoes, and they didn’t have my size. Literally the guy was able to say, with his mobile device right there, says, yeah, I don’t have it here, but I can have it shipped to your house in three days. Do you still want them? Danny:– That’s great. Joe:– And so he might have saved a sale by doing that. Danny:– Absolutely. Joe:– Again, required having that device, being able to locate it to your inventory, having somebody at the other end checking in that device and knowing what you had on the shelf. And all of that requires all of this enterprise mobility technology to make that work really well. Danny:– Yeah, absolutely. That’s a great story there. Actually I had a similar story, opposite; I won’t name who. Went in, bought something online, got in there, they didn’t have it. Big spike; it was Atlanta Braves World Series gear, so I’ll give them a pass. Everybody was rushing to the stores immediately. They tell me, they’re printing these shirts as fast as they can. They’re coming by the truckload. Very exciting time. Where do you see things going—obviously there’s a lot of learnings that, I’m sure, that you’ve taken from the pandemic. Where do you see things as things start to settle and going forward a little bit? Where do you see areas maybe coming back or staying? What are your thoughts? Joe:– I certainly don’t think any of the things we introduced in the pandemic are going to go away. They’ll certainly probably level because you’re going to have some people who like going back to the store because they like that browsing experience where they’re seeing physical things. But your curbside pickup is going to stay. If you’re a restaurant and you’re not doing curbside pickup, or you’re not doing—think of DoorDash and Uber Eats and all that stuff—you’re not doing those things, you’re losing revenue. All of our businesses are going to be more connected than they ever have before. They’re all relying on mobile devices to help us, whether it is, we’re checking out at retail, whether it is, we’re doing, again, inventory or warehouse management. All of that has to work more seamlessly than it ever has before, and if your company’s going to succeed, you have to be doing that really well. Danny:– Absolutely. Joe:– I see that only increasing and not decreasing and going back to pre-pandemic scenarios. Danny:– Totally, I agree. I think people have just—from a consumer standpoint, I can tell you it’s been fantastic. When you ask my wife, she’s like, oh, this is awesome. I don’t want to go into the grocery store. I can just go run, people bring stuff, put it into my trunk, and it’s great. Or it’s being shipped to the house or what have you. I think one thing that we’ve learned as well is just the value of time. Not that we didn’t know that before, but when you think of the traditional experience of just going grocery shopping and how much time it takes to do all these different things, you’re like wait a minute, I could just quickly on my app—and even if there’s stuff that I repurchase that maybe I wouldn’t get through an Amazon or wherever else, I could quickly just boop, that’s it. Here’s my list, go. I just carved out 45 minutes out of my day. Joe:– Yeah, it happens. My wife and I–– we got Instacart. When we joined, we were driving back. We were on a trip, and we realized we hadn’t done any grocery shopping for the week. We were driving back from where we were at on a Sunday, and we had an hour and a half ahead. She pulled open the app, and within a half hour, we had our grocery shopping done. It was going to be delivered right around the same time that we showed up. We get there; the bags are on the door, and away we go. Danny:– That has revolutionized our family vacations. It’s like, you go somewhere; we went to the beach, boom, same thing. We’re like hey, this is awesome. We don’t have to worry about all this other stuff. Yeah, that’s not going back. At least I hope it isn’t. I’ll be mad. What is your organization doing right now to really stay ahead of your peers? Joe:– I think for us, and this is constant, it’s an investment in our people, our services, and our systems to stay ahead. People to make sure that we have the right people to help our customers come in and have those good technical conversations and help, hopefully not be a vendor when we come in and hopefully be a trusted advisor when we come in to help them think about what technology they should be implementing and how it can help them and drive the business outcomes that they want to have. We then also internally need to invest in our own systems, so when we give services like repairs and all that stuff, we’re doing that as efficiently as possible and transparently as possible for our customers so they can see where their devices under management are because that’s part of the services that we offer. It’s people, it’s systems, and then services, so we’re also constantly thinking about where our customers need new services that can help them. One of the things that we have launched this year is actually a security service to be able to monitor your networks because we can certainly come in and help you set up networks, set up mobile devices and all that stuff, but now somebody needs to monitor them for security purposes. Certainly if the company has any sort of SOC or requirements that they have to meet, that’s an important thing so we can now throw that service on top. We can really become a one-stop shop as much as we can for our consumers. We have a tagline here where we try to make technology simple. I’m sure a lot of companies say that, but in this space what we want to be able to do is come in, help your decision-making, and then once you’ve made the decision, hopefully we can then provide the services to manage the devices that you’re buying, to manage the networks maybe that you’re putting in and do that in a secure manner. And if we do that well, you’re going to do more business with us. Again, we constantly strive to be that trusted advisor as opposed to just a vendor. Danny:– Well it sounds like it. I like how you’re thinking in the different dimensions and certainly bringing that consultative solution standpoint and bringing in those—you mentioned security being—that’s actually a huge topic right now with cyber, especially as we move into more digital transformation, and you’re seeing all of these issues. It’s an important thing. Joe:– Without a doubt. If you’re not looking at security, you’re behind the curve because that activity is only increasing and will continue to increase. The things and solutions we have to put in place need to have that. And if you’re a CIO and you have security rolling up to you, that’s certainly something that’s going to keep you up at night. Hopefully we can provide some services to help you sleep better. Danny:– Yeah, that’s a good benefit, good tagline there for sure. Talking about really staying—we talked about how your organization is staying ahead of your peers—I want to pivot to you a little bit. A lot of leaders like reading books, whether it’s fiction or nonfiction. Are you a book reader? Read any good books? Joe:– I used to be a really good book reader until Audible came out. Now I’m a big book listener. Yeah, there are two books that I’ve just gotten through, and I thought they were both really good. One is the more classic, and it’s called The Ride of a Lifetime by Robert Iger. He was the CEO of Disney, so it basically looks at his career, but there is a lot of interesting stuff in there in terms of how do you navigate company politics in a big company? It took you through some of the deals that he made with Marvel and Lucasfilm and Pixar which were absolutely fascinating to read because I think everybody knows of those deals. It’s really nice to see a little behind-the-scenes. Obviously somebody who was operating at a really high level, had a really good run. That’s one. And then one sort of off the beaten one is called Captain’s Class. It’s a guy who looked at—and he did a lot of math to figure this out—the 10 best teams, dynasty teams in the history of sports. He looked at basketball, rugby, he had all sorts of things. Really what he was trying to figure out is what made those teams great. Was it a good coach? Was it an elite player? What he found out is, really the factor was it was a team captain or a guy on the team who maybe wasn’t the superstar but kept that team together. He tells stories on all the teams. I found that book really fascinating because if you’re doing anything in corporate America, you have to be doing it with teams. I think it’s always good to know what makes teams tick and then what kind of people you need to put on those teams to really not just make them tick but perform really, really well because that’s what you’re going for. Danny:– That’s fantastic. Joe:– I found that to be a really interesting read. Danny:– Wow, that’s great. I’m going to write those down. What are those again, the Bob Iger one? Joe:– The first one is The Ride of a Lifetime. Danny:– The Ride of a Lifetime, okay. Joe:– Yeah, and the second one is Captain’s Class. Danny:– Alright, cool. That sounds fantastic. I’ve done—I actually haven’t finished it, but Be Our Guest about Disney, about all the customer service and just the systems and what they’ve got. Fantastic, but that sounds super fascinating. Joe:– It was, especially if you’re a higher-level executive, you’ll relate to a lot of the situations in the first book because you’re like, yeah, I definitely encountered that situation, and it was interesting to see how he navigated it. Certainly like when he—there was a point where he was the chief operating officer and went to be CEO. How did he make that transition? He did it in a weird way where the guy who was leaving maybe wasn’t so popular. He had to detach himself a little bit from that but not insult it in the same way. He had a very fine line to walk, and it’s really interesting to see how, from his perspective, he walked it and how he really threaded the needle there and then went on to be a very successful CEO of that company for over 10 years. Danny:– Yeah, it was a very good run. That’s super fascinating. We’re going to need to—we haven’t done this in the past, but we totally should. I think we’re going to have to put Amazon links in the show notes. People can go get these books because I’m certainly going to have to go get that. Joe, listen, I’ve really appreciated you spending some time with me and with our audience, and just a lot of great, valuable insights. I’ve got a lot of notes here I took. Joe:– That’s great. Danny:– Thank you for that. Joe:– Well thank you. I really appreciate the time to come and talk to you. I hope this interview gets shown to a lot of people. Danny:– Oh, it will be. And so for those that are interested, who want to learn more about you guys, they can go to trgsolutions.com. Joe:– That is correct. Danny:– I got that correct? Alright, great. Joe, again, thank you. Joe:– Thank you. Danny:– Alright, and that wraps up today’s IndustrialSage Executive Series with Joe Yanoska. He is the CIO, chief information officer, at TRG Solutions. The website is trgsolutions.com. Go check them out. They’ve got some great technology. I love hearing about just how they’re really tackling a lot of these challenges. I love how they’re talking about, they’re solving this transparency challenge that their customers are having all across the entire life cycle there, whether it’s end user customer to operationally. I think it’s fascinating, so go check them out. And if you are not on our email list, I highly recommend it. If you like listening on a podcast or if you’re maybe on social, go to IndustrialSage.com. Get on our email list because you’re missing out on great content like this great episode. So go do that. That’s it. That’s all I’ve got for you today. Thank you so much for watching, and I’ll be back next week with another episode on IndustrialSage.
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| Tecsys, Inc: Guy Courtin | 27 févr. 2022 | 01:19:11 | |
Guy Courtin of Tecsys Inc. returns to share how post-COVID public awareness has transformed both supply chain and industrial sales.
Danny:
– Well hello, and welcome to today’s IndustrialSage Executive Series interview. I am joined by a familiar face, Mr. Guy Courtin who is back in the studio no less for another episode here. I’m super excited about this. If you aren’t familiar with Guy, he came on before. It was a couple years ago. I think we’ve interviewed you a few times. Guy:– A few times, yes. Danny:– But Guy is the VP of industry and advanced technology at a company called Tecsys. Not to be confused with the state, I’m sorry we have to say that. Guy:– We’re in Canada. Danny:– Okay, so polar opposite. So anyways, Guy, thank you so much for coming on the show again and also to be in person. I’m excited about that. Guy:– Danny, thanks for having me on the show. I guess the first few times I didn’t screw up, and you’ve brought me back. But I’m really happy to be back, and to be back in person is fantastic. Danny:– Well it’s super—yeah, I’m super excited about this. I’m excited to unpack, get into some of these things that we were talking about a little bit in the preshow. I think there’s no lack of great content here. First and foremost, for me and for our audience who maybe is not familiar with Tecsys, what do you guys do? Guy:– Sure. First and foremost, we’re a Canadian-based company. We are a supply chain company. We solve supply chain problems. We focus on a couple of big areas, healthcare, retail distribution. And when it comes to the solutions we provide, think of us as really helping solve a whole host of supply chain problems, so warehouse management, transportation, order management, things of that nature. Really exciting from that perspective of being able to provide solutions to customers’ supply chain needs. We are, again, based in Montreal, Canada, but have global presence in Europe and elsewhere. I’ve been there now for almost a year. It’s really exciting. I think we are continuing to grow, even during the pandemic. I look at the solutions that we have are really addressing today’s needs for tomorrow’s desires by our prospects and customers but also from their customers. That’s who we are in a nutshell, and like you said, yes we’re T-E-C-S-Y-S out of Montreal, not the great state of Texas. Danny:– Alright, perfect. Well good to know. Well it’s supply chain. I keep hearing things about this. I don’t know. Guy:– Yeah, it’s funny. It’s come up a lot recently in the past two years. Danny:– I don’t know why, but I guess there’s things. So let’s talk about how things have changed a little bit since the last time you and I spoke, which I’m a little gray on when we—I think I ran into you at MODEX in 2020. Guy:– 2020, correct. Danny:– You came on in 2019, I think. Guy:– Correct. Danny:– What’s changed? Guy:– A different world, right? Entirely different world. From my perspective, I think we all have lived it, so I’m not going to rehash it. But I think what has changed—maybe not necessarily what has changed, but what has been exposed by the pandemic is, I think, what we should focus on. You mentioned supply chain, and it’s like, “oh, well, it’s coming up more and more.” I see my local news; they say supply chain. My mom knows what supply chain is. My mom knows what I do now. So I think what’s happened is not necessarily the shortages and things of that nature because I think those of us who’ve worked in supply chain know these things happen on a regular basis. Not at this scale, but what I think has really happened coming through the pandemic is an awareness of what happens in the supply chain, what the supply chain is about, the sensitivity our supply chains have to disruption, and the impact it has on us as a consumer, both in the B2B and the B2C world. So if there’s one change I think that’s really happened since the last time we spoke is really that awareness of what this means. Have we solved it all? Of course not. We’re already still seeing there’s shortages. We still don’t have enough material for cars, just like the strike going on right now in Ottawa by the drivers has brought that automotive manufacturing cross-border. Danny:– Yeah, they shut down Ford, right? Guy:– Yeah, they shut down Ford. They shut down GM because there’s no parts coming through. But I think we’re more aware of that now. Maybe two, three years ago, that’s maybe a small story in the back of the newspaper or in the business section where people would not pay any attention to it. Today it’s top of the news, and then people understand, well wait. Why am I not getting a car at the car lot? Why does it cost me more? Why are used cars now priced higher than when they were new cars? Oh, now I understand why. So I think that’s the big one I would focus on is this awareness that the general public has or should have about the complexity of the supply chain to get their products, again whether it’s B2B or B2C. Danny:– Yeah, absolutely. It’s interesting. I’m seeing a lot of memes and different things talking about Thanksgiving and Christmas or whatever, that it’s going to be, everyone’s a supply chain expert. We’re going to talk, oh, we know why things are going on, or whatever. But it has been interesting. Even as late as this morning, I had some eggs, and we’re getting low on our Valentina. I was talking to my wife; it’s this Mexican salsa, great stuff, hot sauce. Staple for any Mexican household. I was like yeah, we need to get some. My wife’s like, I can’t find any. I’m like, again? Okay, well it’s not a surprise. We got all these spikes and all kinds of issues and things that are going on. Obviously we’ve had massive changes now. There’s some things that have, I think, we’ve had some short-term disruptions, short-term issues, but there’s also some longer-term changes that I think are happening. What are some of those short-term things that you’ve seen? And what are some of those things that you think, hey, these things are here to stay for the long term? Guy:– Yeah, I think some of the short-term things is, unfortunately, consumer behavior in terms of hoarding, in terms of—we’ve taken the whole notion of safety stock, from the consumer perspective— Danny:– Yeah, I’m buying a case of Valentina hot sauce the next time I see it. Guy:– Goodness, you can’t run out. Danny:– I cannot. Guy:– You cannot run out. Talking to my mom again, I love my mom to death, but during the pandemic I’d open one of her closets. I’m like, mom, how many wipes do you have in here? How many Lysol wipes? She was like, every time I go I get as many as I can. Mom, you and dad just stay at home. What, do you clean the house every two hours? So I think that’s a short-term reaction. And I think we’ve seen this on a smaller scale. I live in Boston, and we always joke whenever the meteorologist says there’s a snow storm coming, we all run to the supermarket and buy bread and milk. Don’t ask me why. Danny:– That happens up there, too. Guy:– It happens up here, too. Danny:– It happens down—okay. Guy:– Why bread and milk? I don’t know, we’re all making French toast. Who knows? There’s this innate reaction that we just go, and we start hoarding stuff. It’s a snow storm. We’re not going to be stuck in the ice age for 20 years. But we’ve seen this in the pandemic where in the short term, this has taken a scale we’ve never seen before. This consumer notion of having to run out and just hoard things. And I think we’re seeing at some level in some companies as well. They’re trying to figure out; oh goodness, we have to rethink some of our policies and hoard some raw materials, hoard some finished goods, hold back some material. I think it’s a knee-jerk reaction, especially from the consumer. So I think that’s going to go away. Or I hope it goes away. The long-term, and I’ve seen more and more articles about this and discussions. I’ll be interested to see how this changes, and I hope it does, is re-thinking of our whole measurement of our supply chain. What I mean by that is the whole notion of lean, Six Sigma and all this, super efficient, just in time. Why am I holding inventory? Why do I have buffer stock? Why do I have safety stock? Everything will come to me just when I need it. I think we’re starting to see a shift where people are starting to question not necessarily going away from it, but maybe easing up on the stringentness that we came to saying, hey, I don’t need any safety stock. Everything’s just in time. I don’t even need that factory or that warehouse. Everything will come to my factory right away, and I’ll send it to the consumer. So I’m starting to see more and more of this. I spoke, I had a meeting with one of our clients in the healthcare side, and we had that conversation. It was a great conversation. He said, we cannot continue to proceed this way with the same notion of minimizing inventory, cutting down to bare bone, expecting things to come when they’re supposed to because this pandemic has shown us that it can’t happen that way. And yes, people might argue, well that’s a global pandemic. Hopefully we don’t get one of those again in our lifetime. But if you look at it from a company perspective, companies know that just a small disruption somewhere in the supply chain can have massive effects on the rest of the supply chain, a lot of it because of their sensitivity with their inventory. So what I hope—and this is a hope, and a hope’s not a strategy. I know that. But my belief is that we’re starting to see some discussions around rethinking how do we look at inventory in the supply chain in other aspects and how do we start thinking about it from a perspective of, maybe I carry a little bit more on my balance sheet, and maybe that doesn’t make my financials look as good as they could. But you know what? It guarantees me that I can keep the factory moving if there’s a disruption at the border. It could keep me moving if there’s a fire in my warehouse and I lose inventory. It could keep me moving if there’s a spike in demand somewhere. And I think that, for me, is a good thing. I think we need to, as an industry, move away from the financial people telling us, hey, trim, trim, trim. Make everything look good, to the reality which is the supply chain’s about people. It’s about getting products out. It’s about addressing needs and demands, and we need to be more sensitive to that. Danny:– So many good things in there. A couple things that I think were interesting, one, you were talking about just in time inventory, lean manufacturing. I went to the assembly show, a lot of automation, pretty heavy in automotive. But there’s a lot of other industries as well. I started posing the question: as far as lean manufacturing goes, have we gone too far? Have we pushed the envelope too far? You’re talking about globalization, and now people are, all this talk of—not talk, it’s happening. Repositioning their supply chains, more in-shoring and looking at solutions on how, okay, gosh, maybe we could get things cheaper going out to China or wherever. There’s a whole host of issues now. Massive range, right? I think it’s a very interesting discussion to think, okay. And to your point, I think companies are, they’re saying—and I brought this up, and I can’t remember who it was, an episode probably a year and a half ago, very early on. And I thought, you know what? We’re going to see an increase in warehouse production, and I think you’re just going to have to do this because—and I think what we’re seeing now, which you brought up the convoy which I think is fascinating. I think there’s a lot of interesting social implications to that, but I think you’re seeing some of the same responses, disruptions. Okay, trucking with infrastructure. It was also interesting, in the same notion, we get into the meme stocks. It’s some of the same, and it’s like another force now that seems to be—that has an impact and can have an impact on supply chain in certain areas. I’m not saying that game stock and those had an impact, but I’m saying just in the sense of the mobility, and there’s other forces now that are impacting it and can create, maybe not global, but certainly a little bit more disruptive in local areas. Guy:– Right, right. And I think part of it too, Danny, is it has to come back to, how do we measure? How do we look at our supply chains and say, this is a good or a bad supply chain? Is it because financially it makes our books look good, our balance sheet look good, our inventory levels look good, our efficiency? Or is it that we’re getting product to our end customer, whomever she or he is, in the most efficient, cost-effective, timely way for that business? I think those are, in a way, two different ways of looking at things. And I believe, at some level, we’ve gone too far by just measuring everything on the financial side and saying, oh, well the balance sheet looks great. Cash flow looks great. We’re doing fantastic. Not looking at, are we servicing our customer the best way possible? Well they’re paying us money, so we must be doing a good job. Eh, I don’t know if that’s necessarily the best, the only measure. I’m not saying it’s not a component, but it’s not the only measure. So I think that’s something else we need to think about. And to your point, I’m glad to hear from your perspective too, you’re seeing it. I think it has to change a bit. We have to start rethinking about this moving forward from our supply chains, and then I mentioned the healthcare client I was talking to. Look at the healthcare space. Well, if I need to get material to a surgery, I need to get it there. It doesn’t matter how much it costs—I mean, it does, but the most important thing is getting it there when it needs to be there because there are literally lives at stake on this. So I think we need to start looking at it from that perspective and being more sensitive to that, if you will. Danny:– Yeah, it was interesting on that point, in healthcare from a goods standpoint. I thought it was very interesting. There were a lot of stories talking about PPE and there was a huge—and then ventilators and all that stuff. You were seeing this response from manufacturers. There are actually some pretty incredible stories on how companies were able to completely go through new R&D. I remember, was it—Flex Manufacturing in particular, in six weeks was able to completely redeploy lines, and they were cranking out—I’m trying to remember. I think it was ventilators. It was incredible. You were able to go through all the red tape and what not. It kind of goes to that demand shift and the focus piece saying, hey, let’s put all of our efforts into this because this is priority. I remember talking with Fastenal, and this was probably in May of 2020. And I remember they were telling me, PPE, the masks and all this stuff, the next big thing, surgical gloves. That’s going to be, we’re going to have issues with that. Sure enough, a couple of weeks later, there it is. We even looked at the—I discovered this—the top rubber glove manufacturer is a Malaysian company called Top Glove. Their stock went from—because I was looking at this—it went from two bucks a share to 14. Now it’s back down to five-ish, something like that. I’m not giving out any— Guy:– No financial advice on the show. Danny:– I’m just reporting what I discovered and I thought it was interesting. Yeah, to your point, certainly a lot of these industries are going to be a little bit more important than others as far as— Guy:– Absolutely, and I think those industries also need to think about it from that perspective, but then also the people measuring it, the financial analysts, the stock and all, give them a break at some level. Or measure them differently. I don’t know if that’s going to happen. I hope it does, but we’ll see. A year from now we’re sitting back in these chairs in the studio, and it’ll be interesting to see what happens. Hopefully we’re completely out of the pandemic and things are becoming its own new normal. What does that look like? Danny:– I hate that word, by the way, that phrase. Guy:– Don’t get me started on that because there’s no such thing as a new normal. I’ll talk about this from a retail perspective when I hear that all the time, people saying the new normal. Well what was the old normal? Because before the pandemic there was this thing called Amazon that was killing all these merchants. Before Amazon there was this company called Walmart that was coming out crushing people. Before that there were malls. There’s never been a normal. It’s always just been constant change and evolution, which is a good thing. Now the pace has increased, but there’s no new normal. There’s just now. Danny:– Exactly. And the pace, I think, like you mentioned, for sure. Alright, we were talking about, before we started recording, the idea of the iceberg. Let’s get into that a little bit. Explain to me—let’s talk about what’s going on. You were saying at the top we’ve got demand and customer influences, this is what we want. And there’s a ton of things affecting that. Shifts in how people are buying, why they’re buying, how they’re buying, what they’re buying. Guy:– Who they’re buying from. Danny:– Exactly, but then there’s also this subset, underlying issues, big, big, big issues underneath. Let’s get into that a little bit. Guy:– Yeah. So I know it’s a very easy analogy because we see the posters and all that, but I do think it’s—to your point, I think the top, what we see above the water line is what you and I and all of us here are doing which is expectation-setting. We expect certain things. We demand both from our professional lives and our personal lives. We are demanding and demanding more and more. Like you said, speed and efficiency and selection and all this. But I think from a supply chain perspective, all the things under the water line such as labor issues, logistics, planning, execution, distribution, digital orchestration of orders, all those things that hold up the ability to meet those customer demands. What I do think is interesting–– and we touched upon it–– is, I feel as if during the pandemic that waterline dropped a bit. People got exposed to what was under there and saw the massiveness of what’s underneath. And I don’t even think they’ve seen—they haven’t—the entirety of it. So I think under the waterline I think it’s really interesting as supply chain professionals, we need to constantly wrestle with making sure that people are aware of those things, not just the customer, but more importantly our bosses, our bosses’ bosses, other people in our businesses because I think at some level, and we’ve been on—we, I say we, those in my circle, so to speak—we’ve been on this sort of mini-crusade for the past few years which is, supply chain needs a seat at the C-level table. We can no longer be a cost center within the organization. I don’t care if you’re a candy manufacturer, pharmaceutical company, a toy distributor, clothing distributor, you make widgets, you make whatever. Supply chain has to have a seat at the table at the executive level because the supply chain, at the end of the day, is what gets the products even if it’s a digital product—because oh, well we’re a digital company. We just do digital. No, there’s a supply chain behind that. Let’s figure out how we make it more efficient, make it work better, make it address the customer’s needs. And I think that’s what, when I look at the iceberg analogy, that’s what I feel we’re starting to see more of and be exposed to. But I think the complexity of it is still something that we need to constantly educate, not just the market and our customers, but even more importantly at times internally our own businesses to say, no, no, guys. We need to pay attention to this. We need to pay heed to this. We need to invest in it. We need to make sure that it does what it’s supposed to or else all the other stuff can fall short regardless of how well they’re doing. And I think that’s the part that I hate to say excited because of Covid, but that’s the part that, if there’s a silver lining it’s that that aspect below the waterline has sort of bubbled up, and I think more people are aware of it. Now it’s up to us to not just stomp around and say yeah, it’s important, but now to show why it’s important and how to turn it into a competitive advantage, not just a cost center. Danny:– Sure, absolutely. And I think—the silver lining piece is that there’s been so many learnings that we’ve had from this, and they’re going to continue to learn as things still evolve, I guess. But I think that there’s absolutely some great takeaways, and that was something that as far as specifically saying having a seat at the table, the C-suite role creation, that some of that doesn’t necessarily—yes, it falls under ops, but something that, especially I would say if you’ve got some of these manufacturing companies that you’ve got—you look at automotive for example. You’ve got how many components and pieces? And obviously they’re getting just destroyed right now. I was hearing, was it GE fridge, because of supply chain and labor issues, I think they’re down to one and a half or one and a quarter shifts or something like that. I mean, it’s crazy. Hopefully we don’t, obviously, run into something like this again, but I think as things are going to change, and I think that we’ve definitely seen that things can and do and will change and shift, it’s going to be critical to manage that. And the things that are being manufactured and created, certainly there’s levels of what’s important or not. There was an interesting story. I don’t know if you heard about this. One of our clients over at Optimum, they are a healthcare recruiting agency. They ended up buying a US manufacturer, an antibiotics manufacturer, in Bristol, Tennessee. What happened was during the pandemic, they are the only domestically-produced antibiotics—they do, I think, penicillin, amoxicillin, and a few other things. They’re the only one that’s produced domestically. They’re a foreign-owned entity, I believe, even though it’s called US Antibiotics. They went bankrupt. They went bankrupt during the pandemic. Employees went and continued to help to work there because they realized how critical all of that was. So the company’s Jackson Healthcare. They came in, and they bought up the company saying, we feel like this is so—this is critical. This is national infrastructure. You want to talk about supply chain issues and not having critical things, talk about hey, you know, I can’t get penicillin or amoxicillin which is used—it’s one of the most widely-used medicines. I think it’s a super interesting story, and why they went bankrupt. I think there are some supply chain issues and some things going on there. So when you look into that, you’re like, that actually really should be a national conversation as we get into—that’s critical infrastructure, and do we want to rely on foreign partners? We can get deeper into all this. But when we have specific domestically-produced battery manufacturers for those supply chain issues, issues with conflicts with other countries, what have you. Guy:– You’re absolutely right. I think it’s a great example, and that little piece is a critical part of a bigger supply chain, the healthcare supply chain and everything. So how do we shine a light on those important components and then have the right discussion about yes, we want to be competitive? We believe in the capitalist system. All things I agree with. But at some level we also need to understand there’s certain things that we need to be more conscientious of from that perspective. And I think that’s—I hope that conversation continues because I do think it’s—our supply chains are so global. They’re so sensitive to disruption. Massive or even minor, they’re very sensitive. And they’re all, you and I and the rest of us in our daily lives rely upon these supply chains not just to get our toilet paper, but in the medical space especially, to get the right drugs and pharmaceuticals, to be able to have access to hospitals to get the right procedures, et cetera. And I think it’s a conversation that has to be had. We haven’t gotten into roads and bridges and rail and all this and ports. You’re seeing at the Port of Long Beach we can’t continue to go about business as usual when we see what’s happening at those ports. That’s just an issue, not just nationally but globally. And I think as we do more, as things are accelerating and they probably will continue to do so, and maybe not accelerate for the sake of speed but just for the sake of being more sensitive and responsive to the supply chain, is our infrastructure ready for that? That’s the part that’s going to have to continue. It’s not going to be an every two or four year-type discussion. This is long-term. This is the infinite game that we must continuously work on. And I think that’s the part that, as a supply chain nerd, I get somewhat excited because I think it’s finally time that we’re having these conversations. Is there an easy solution? Of course not. If there were, I would have it, and—anyways. Danny:– You’d have an island by now. Guy:– I’d have an island by now, yeah. I’d have an island with all kinds of cool stuff on it. You’d be invited. You could come out. Danny:– Oh, I appreciate that. Guy:– Of course. But I think it’s across the board, across industries. And I think what we need to realize too is, I think your example, Danny, was fantastic, if you look at, well they have supply chain issues. Well what was it? Or the GE example. There’s labor. Well the labor in the warehouse, that’s a supply chain issue. That’s a supply chain issue. And I know that, near and dear to my heart, people, well, let’s put automation in it. Okay, well automation is great, but there are other things that go around automation we need to think about. We can’t just slap in this—automation solves. No, it doesn’t solve it because there’s other issues around it that might pop up. If we’re not aware of the macro supply chain issue, then the solutions we provide at a micro level we don’t understand or at least are sensitive to the long-term repercussions or the wider repercussions. And again, back to the question, when you talked about what’s coming post-Covid, I think it’s a greater awareness of this. I think more discussion. And what I do hope is that we see more supply chain at the executive level getting the attention it needs because then that will continue to push the conversation and to find solutions for it. Danny:– It’s kind of funny—not funny, but I remember hearing stories initially when this stuff happened, to your point on this. C-suite executives were pressing everyone. Why is this—why are we delayed on this? What is going on? What do you mean? Which was fascinating to me to be honest with you because I felt like doesn’t everybody— Guy:– We’ve said this for the past 20 years, yeah. Danny:– Isn’t this a—oh, I guess not. I guess it’s the, what is it? The squeaky wheel gets the oil. I guess maybe there were some squeaks, but— Guy:– Not enough. Danny:– Not enough, right? Guy:– But now all of a sudden when you’re going to the grocery store and there’s no toilet paper, people are flipping out. Or there’s no Lysol wipes, or there’s no—I got a funny message from one of my good friends who basically, jokingly, yelled at me because I guess during the pandemic we all became bread-makers. So he was making bread, and he got very cross with me because there was no yeast at his local grocery store. Supply chain issues. What’s wrong with the supply chain? There’s no yeast. I’m like—so I had to explain to him, well we model a certain amount of demand. This demand has gone through the roof, and manufacturing is basically planning for that kind of demand, so they can’t just ramp up when there’s no labor, there’s no raw materials. He didn’t care. He was like, well why isn’t it on my store shelf? Every time before the pandemic, there’d be the yeast at the store shelf. Now it’s not there anymore. And to your point it’s like, well why not? Back to the iceberg, because there’s a ton of stuff under that waterline, and not just one disruption but multiple under the waterline creates this tsunami of issues, and then you don’t get your yeast at the grocery store. Danny:– Tsunami of issues, that’s—dominoes. A domino effect of tsunamis. Demand, and then we got labor issues. Guy:– No raw material, factories are closed. Danny:– Somebody crashes a boat in the Suez Canal. Guy:– Which is again—not to laugh about it, but you’re absolutely right. It’s another reminder. You get some guy who’s never driven the ship who gets control who’s been told to do it, and he makes a mistake and crashes a boat into the side of the Suez. What happens? Yeah, it’s only there for a couple of days, but look at the long-term repercussions that has. Danny:– Oh, exactly. I remember talking with—I do not proclaim myself as a supply chain expert at all. I know enough to be very dangerous. But I remember talking with people for years. Supply chain’s very fragile, and you don’t understand how many intricacies and nuances there are. Infrastructure’s so important. Do you realize that when we have hurricanes, a hurricane comes through that can cause disruption for weeks to months. And, whoa, really? I had no idea. Because it takes time to unload the boats and move them and process them through. Things stack up. Guy:– Well just look at what’s happening now. There’s about 103 boats sitting outside the Port of Long Beach. That’s not just a static number. There are boats that keep coming in. There’s just a physical constraint of, there’s nowhere to offload the TEUs at the port. There’s then not enough trucks to then move those to a rail head or inland. So as you said, you can see how—wait a minute. This is going to take a while to clear up. This is not weeks or months. I’ve been told a year plus before that it gets somewhat close to “normal.” And you realize very quickly, yeah. And you think about this. How much inventory is sitting on those ships that is perishable or is getting damaged by sitting out in the ocean water for this long? It’s not just sitting in a pristine environment. It’s sitting out in the saltwater ocean. It’s not in the water; I know. But it’s not meant to be sitting out there that long. And how much of the inventory do we really know is perishable or is going to be bad? Or even if you look at a retail perspective, how much of that is going to get offloaded, and it’s oh, it’s the style for the winter. It got offloaded next fall. Oops, too late. Right to the discount rack. That long-term effect of some of these delays, you and I and I think others, we get it now when it’s finally hitting the average consumer—again, B2B or B2C—all of a sudden it’s like, oh, my goodness. What’s going on? Why is this happening? Well guess what? That ship that’s supposed to take two hours to be offloaded is now taking weeks. And then, therefore, it’s going to take another week to get on a truck. And it’s going to take another week, and oh by the way your warehouse, it’s already got inventory in there, and it’s just going to sit in the loading dock. So I can’t put it on the shelf or move it. You can see now the, like you said, the domino tsunamis that keep stacking up. All of a sudden you realize, well that’s why you’re not getting your product. That’s why you can’t run your factory. That’s why you can’t get your product to your customer. Danny:– And then consumer demand says, well that’s stocked. Hey, we like this new product over here. We like this. We don’t care about that anymore. Guy:– Right. Danny: Guy:– And the demand goes through the roof. – Yeah, and it is also a massive bulb effect across all this, too. I think, again, the silver lining is what I’m seeing, which I hope continues—and I keep saying hope—is the awareness of that. We’re starting to have more conversations about it. We’re starting to rethink how we look at these things from a lean perspective, from how we manage the supply chains. How do we measure them financially and otherwise? The belief I have is that as we continue to have these conversations, we’ll start thinking differently and therefore acting differently. And therefore, at some level also setting different expectations for our end customer. And all that I think is a good thing because if you look at supply chains in the past, man, we were running so lean. And if everything is perfect, it looks great. Danny:– This is awesome. Guy:– It’s awesome. Danny:– Until it’s not. Guy:– Until it’s not, right? Until there’s a tsunami that happens in the Pacific, and half my cars are underwater, and now what do I do? Or my chip plant is by a nuclear power plant that now has to shut down because there’s radiation. Oops. And I think that’s the part that we as an industry have to continue to work on ourselves, but also the general marketplace has to continue to have an awareness of it and be more sensitive to it. Give us a break sometimes. Danny:– Yeah, well I think, which is nice, I think the general public consumers have hopefully—hopefully your friend has calmed down. Guy:– That’s a good question. That’s a really good question. Danny:– But I think it’s—I’m not going to throw out the term, but it’s been ‘more normalized’. It’s more commonplace, and consumers, I think the awareness—it would’ve been nice if it had happened a different way, but it happened nonetheless. It’s happening. We’re seeing these adjustments, and we’ll continue moving forward. I want to pivot and move on to another area, unless there was anything else you’d like to add on. Guy:– No, oh, we could talk about this for hours, but let’s pivot. Danny:– I’m not going to bring in inflation, CPI, shifting consumer behavior habits. We’ll save that for another day because this is a lot of fun. I could go on, although I could do some bourbon. Well, it’s a little early. Guy:– It’s 5:00 somewhere, and it’s Friday. Danny:– Oh, that’s right. I have some WhistlePig—alright, well we’ll keep going. You went to NRF recently. This was December. Guy:– January. Danny:– January, early, mid-January. Guy:– During the pandemic I forgot what day it is. Now I’m forgetting what month it is. But anyways, yeah. Danny:– Everyone’s done the same exact thing. Guy:– Maybe you did put bourbon in this one. Danny:– I have vodka in mine. Alright, so you went there, and it sounds like a similar experience that we’ve seen with CES. We went to IPPE about a week or two ago. Just quick, your experiences, what was that? What do you think things are looking like? Guy:– So yes, we went to NRF, the big show, end of January in New York City, which I always half-joke, tongue-in-cheek that in normal years, the year truly hasn’t started until I’ve braved the New York winters and gone to NRF and hung out with 20,000 of my closest friends at the Javits Center and eaten Clif Bars for lunch as an acceptable form of sustenance. Danny:– That’s a good idea. Guy:– Yeah, but this year of course—last year they didn’t have it. It was virtual, and quite honestly, I don’t think it was very good. So this year it was back at Javits. When they started talking about it last summer I think we all got excited because obviously the vaccines had started rolling out. We had seen a little bit of a decrease. It felt like things were kind of turning a corner. Then unfortunately Omicron happened. Honestly, the event was good for me and the folks I went with from Tecsys. Why, because we were able to speak with a number of companies from a partner perspective who we otherwise probably would not have gotten that much time with. Why, because we’d have customers there we’d have to talk to. So from that perspective it was well worth the time. However, I think what I saw is sort of a rigidity by NRF with regards to, hey, this is not normal times still. Let’s be a little more flexible. We’re all in this together. Those of us who did come to New York are spending money to be here. We bought the passes. We paid for travel and hotels, et cetera. And oh, by the way, there is this Omicron going around, so technically we are still in a pandemic. We are willing to take the risk ourselves and to be there. I will say this, NRF did a very good job. They were very upfront about having vax cards and how to get in. They were very good about getting us home test kits on a regular basis that we could take back and use. People at the show were very respectful. I think I maybe saw one person without a mask on, maybe because they were eating, but I couldn’t tell. Let’s just give them the benefit of the doubt. Otherwise 99.99% of the people were all wearing their masks, and properly too. I’ll give them credit for that. So from that perspective, NRF did a great job. I think where I hold them a little bit accountable is, again, it’s not normal times. Let’s think about this together collaboratively. For example, my colleague and I–– we bought just a regular floor pass. So we got on the floor; we were able to walk around and interact. The general sessions we couldn’t get into. Why, because we didn’t pay for that pass. But we went up and asked, well can we go in? There’s no one here. We were told no, you didn’t pay for that pass. I was thinking to myself, wait a minute. You’ve got great speakers speaking to a half-empty, if not a quarter-empty, if not an empty room because no one’s going in because no one’s here. Why don’t you let the rest of us, because we want to listen, and we’re going to support the person that’s speaking. So I think a lesson to folks today who are running these physical events is think about, be situationally aware. We’re still in a pandemic. People are still wondering whether they should travel. People are pulling out. When I was at NRF, I was telling you guys backstage this. You walked on the main floor, and the whole front row was empty. Danny:– That’s crazy. Guy:– Where usually you have the big SAPs and Oracles with massive booths, gone. And it’s jarring to see that. So my advice is, again, just generally, I do hope we continue to have physical, in-person events. I encourage people who feel comfortable to go to them. I still think they’re incredibly valuable, but I would push on the folks organizing them today to think a little bit, to be aware of the situation. Read the room. You know what? Maybe I didn’t pay for the full pass. But you know what? I’ve got the CEO of big retailer X speaking. Maybe she would like to have more people in the audience. Danny:– Maybe. Guy:– Maybe. Maybe not. Danny:– But that’s the new normal so— Guy:– So that was my experience, and again, from my perspective it was very valuable. Now we did not have a booth, so I didn’t spend— Danny:– Oh, so you were walking the show. Guy:– So we were walking the show. We didn’t spend the hundreds of thousands of dollars from that perspective. So that’s the other part that I can’t speak to that. If I had spent the money for a booth and was not able to get out of it, I would have a much different opinion, I think, of the show because frustration is only the beginning of the description of what I would feel from that perspective. And again, I appreciate NRF having an in-person event. I think that was fantastic. But again, have a little more situational awareness. We’re all adults. Next year when things are back to normal I’m not going to show up and be like, oh, last year you only let me into the main session, and I only paid for this. Danny:– It’s understandable. Guy:– It’s understandable. I get it. Again, that’s my one advice to NRF and others having events: have that flexibility at the show to think about what is actually happening. Danny:– No, that makes a lot of sense. Have some flexibility, empathy, not even just for the attendees but also empathy maybe for your speakers. Guy:– Well and that’s the thing. Danny:– You’d think you’d want to pack it. Come on; come on, let’s get in here. Let’s go. Guy:– Get everybody in there. Danny:– I know you guys aren’t part of it. Come on in. Guy:– Come on in. Just sit. I’ll give you something I found funny about that, the empathy side. When I worked at Forrester a long time ago, I remember when Forrester had our first few big user conferences. We were a 300-person company. People didn’t really know what we were doing, so we would have these user conferences. And to your point, Danny, we’d have a speaker up there doing the keynote. And we would be like, get all the research associates, get everyone in the office to come because we’ve got the back row empty. We’ve got to get it— Danny:– Pack it. Guy:– Pack it. Make it visually—because you have a speaker taking time out of their day and their calendar. They’re coming to speak. Danny:– Is this worth it? Guy:– Yeah, are they going to come back next year or the year after? Pack it. Now, the good problem was as we went through better times, then we’d have to turn people away. That’s a good problem, but again, situational awareness. Danny:– Right, yeah, demand. So I’m curious. Are you guys planning on this year attending other—not just walking the shows, but are you going to actually have booths at any? Are you planning on—okay. Guy:– Yes, so we will, and a shameless plug, so we will be at MODEX back here in Atlanta in a few weeks, or in six weeks. Danny:– It’s not long, end of March. Guy:– End of March. We’re very excited about it. We are all in from that perspective. We will have a booth. I should have the booth number, but I don’t. I apologize, but anyone can look up our website and see it. We’ll have a booth. We are actually going to have a couple of speaking sessions as well, so we’re excited about that. So that’s the next big show for us, and then we will be starting to go to other events, not just walking, but putting more time and investment into it both in the healthcare side, the supply chain retail side, distribution side. We certainly will start seeing Tecsys more at these events as we go through this year. I can’t believe we’ve just started 2022, and I’m going to talk about 2023. We are in the midst of trying to think about, alright, for 2023, where do we start investing more in some of these because if we’re still like we were in January of this year next year, then you know what? I’m going to retire to a log cabin in Canada. You’ll never see me again. I’m off the grid. I’m out. But no, we certainly recognize the importance of that and are looking forward to it. I’m personally looking forward to it as well because I think it’s one of those that we don’t have it, we realize how much we miss it, how much business we drive from it. So I’m really excited about getting back and having that type of presence and the conversations that it creates and the buzz it creates. Danny:– I’m curious, just from right now, it’s like we’re back—I was just telling somebody, it almost feels like we’re trying to learn how to drive a stick shift. We’re in first; then we’re second. Then we’ve got to downshift back to first or whatever. Guy:– And we fry the clutch, and we start over again. Danny:– And then there’s a speedbump. We’ve got to go—I had to learn—this is coming from real experience here. I had to learn in Mexico with a guy who—my Spanish was okay. The guy that I was with didn’t speak any English, and I had—and where we were driving to was very hilly. It was in the mountains. And they have these things called topes, speedbumps, in the middle of the dang interstate. You could be doing 80, and then tope! You’ve got to—and then boom! boom! Then there would be a suspension shop right next to—Now that’s called creating demand. That’s a great—one day, as an aside—I’m getting very ADD. I’m going to write a business book. “Everything I Learned About Business, I Learned In Mexico.” Guy:– That’s a great use case right there. Create a demand and have the supply right next to it. Danny:– Perfect. Guy:– There you go. Danny:– That’s business right there. Guy:– That’s business right there. Done. Danny:– Yeah, exactly. That’s kind of what it feels like right now. Shows are happening. They’re not happening. We’re doing this, or—as we’re going through that, how are you guys, whether that’s you or Tecsys in general, handling that, just in terms of customer reach? I’m imagining that your business, like others, it’s very relationship-driven. I would imagine, too, that you need to get boots on the ground to be able to see things, how things are going. How have you guys been managing that? I’ll do a second part on that. I won’t. I’ll do the second part afterwards. Guy:– You know Danny, it’s the million-dollar question. I think we’ve been managing it as well as anybody can and is expected to these days. I think for us, it really has to be a combination. Again, back to the situational awareness. We have to be sensitive to our customers and our prospects and how they want to interact and where they are. I think it’s a combination of being at events, so walking the floor, getting face-to-face, a combination of course of a lot of digital marketing, and that has a lot of different flavors. I think it’s a combination of old-fashioned email reach out, things like that. But what we have found and what has been really good for us is early spring last year when things started to creak open a little bit more, and then really in the summer, it was really a dedication to—people are going to laugh at me in this, but old-school stuff. Getting on an airplane, going to meet customers and prospects, going to visit people for face-to-face meetings. Taking the time out to do this. I met with a customer at the beginning of the year, and had a great meeting, in person. When we were leaving, he said it a few times. Said hey, the fact that you guys came out to visit, that’s big. That’s really important because we could do this over Zoom. We could do this over—but the fact that you’re coming out, and you’re taking the time out in these conditions to come visit and spend time and sit down face-to-face, that goes a long way. I think that’s what, from our standpoint, that we’re certainly very reticent of is that this has to be a combination of a lot of different tools. Part of it is, again, it’s going to sound super cliché, but people buy from people. It’s still the way it works. And I think what we have found is during the pandemic and going to a lot of digital activities, those only go so far. Now it doesn’t mean that we stop. It doesn’t mean that they’re not useful. But it is a tool in the toolkit, and I think that’s what we’re seeing is that—and to your point, I think you’re absolutely right. It’s a great analogy. We’re relearning everything. I think we’re in this process of relearning, what events do we go to? Do we sponsor? Do we do a webinar? Do we go to IndustrialSage and have a session? What do we do? We forgot how to do this because the last year and a half it was, well we’re going to do a webinar, or we’re going to do a Zoom chat. Or we’re going to do another webinar. It’s like, okay, we’re all going to be sitting in our offices at home, and we’re all going to wear sweatpants on the bottom and look professional on top. And we’re going to smile and try to relate to our customers that way. We were able to get to a certain point with that, but I think what we’re rediscovering is if we can get 20, 30, 40% of the way with this, how do we get to 100%? Okay, we have to mix it up, and we have to again go back to old-school, traditional stuff. Get in front of people. Meet face-to-face. Shake people’s hands. Look people in the eye across the table. And I’ll tell you; it was interesting. I was with another customer of ours last summer, and great meeting and everything. But I remember we finished the meeting, we were walking out to our cars, and we were just chit-chatting, small chit-chat. And in that five-minute small conversation, I was like, Oh, we just discovered something about what one of the projects is that we can help him with. This is why this is so valuable. Danny:– Exactly. Guy:– It was just this hallway conversation. We were saying goodbye. She mentioned something and talked us through it, and afterwards I was like wow, that’s it. We can’t do that over Zoom or email or anything. I’m going to throw one of my friends under the bus. Love him to death, one of my— Danny:– You’re throwing all kinds of friends. Guy:– I’m throwing everybody under the bus. One of my best friends from college, brother of mine, love him to death, best friend. But he and I have a small difference in this where he’s an accountant, and he looks at everything as black and white. His vision is, well, you made it through the pandemic without traveling, so why do you need to go travel again? His feeling is, just send them an email and an invoice, and just get stuff done this way. I’m always like, no. People buy from people. These face-to-face conversations are how things progress and move. And don’t look at the dollars and cents of the cost of travel. Look at what it’s opening up down the road. And I think that’s where we’re relearning that skill. We’re rebuilding that muscle. Now does it mean that we’re going to just travel like crazy? No, I think we need to constantly reassess. But I think from a marketing and a sales perspective, we at Tecsys, and I think others are doing the same, is we’re taking this opportunity to relearn and to figure out which muscle we have to work on. Which muscle has atrophied a bit? What are the new muscles we can leverage with the old-fashioned muscles, so to speak? In a way I think we should look at it as an opportunity, and I think we are at Tecsys to really start rethinking about this and see, what can we do moving forward to take the lessons we’ve learned and then relearn the ones that we forgot? Danny:– Oh, totally. And I think it’s—definitely heard that from other people as well where it’s—I wouldn’t say it’s an old-school tactic at all. We’re human beings, even a B2B product, there is a level of emotion, even though there’s a lot more scrutiny that goes into it. But there still is a lot of emotion because it could come down to—unless if you’re the only provider of something. But when you’ve got a whole host of competition, people that can do something that’s similar or whatever, it’s going to come down to several things. The money certainly is one piece, but the other piece is the relationship and the team that we’re going to be working with on this. Do we really feel that they have our back? There’s a lot more at play. My background’s in accounting, believe it or not, so I totally get it. But the money, the black and white, it will show in the bottom line and the top line. Well probably more top line—we’ll see. Hopefully it’ll show in the bottom line, too. But from a top-line perspective, yeah sure, it may not change dramatically, but it will. I think to your point okay, maybe not everything you need to go jump on a plane and go whatever. There’s some stuff that yes, we can do Zoom meetings, and they’re totally appropriate for that. But it’s these interactions like you mentioned. I feel like business really happens, this stuff really happens not in the office. Like you said, you’re in the hallway. You’re walking out. You’re at dinner. And it’s these side conversations, these little things that you pick up on. Like you said, there’s no way you’re going to pick that up in the awkward five-minute pre-chat with Zoom while we’re waiting for Billy to jump on. Guy:– Right, well and what’s interesting, too what I’ve seen too, Danny, and I don’t know if you’ve seen this in some of your conversations. This is something I’m a little nervous about. I feel like sometimes on the flipside people are using Zoom as a crutch now where it’s like, oh, you know what? I’ll be in Atlanta. Let’s—happy to come by. No, no, no, no, let’s just start with a Zoom meeting, or let’s meet on Teams first, and then we’ll figure it out. So I think that’s the new muscle that we have to constantly work and harness, which is how do we get, if we’re going to be pushed to a first virtual meeting, how do we make the most out of that to earn the right to get that in-person meeting? Old-school before all this it was like, hey, I’m in town. Let me stop by. Yeah, okay, sure. Here’s my address; come by. Sit in my office. Maybe I’m not paying attention, but at least I’m forced to some degree to be there physically. Now I’ve seen this where people are like, let’s do a Zoom meeting first. I think that’s something that, as a vendor selling or anybody selling we have to keep that in mind, that our customer might use that as a crutch. That’s okay. Let’s figure out how to again maximize that opportunity with the goal intent of the next meeting and hopefully drive it to in-personal-type things. But that’s interesting. I’ve seen that coming out of the heavy part of the pandemic where we’re like, we’d be happy to come down, or we’ll be down wherever on this date. No, let’s just do a Teams meeting first. And it’s like— Danny:– It makes sense. I could see a couple of reasons for that, and maybe you got some insights on this as well, too, I’m sure. I could see that maybe, are they working from home, and it’s like, that’s going to require me to go into the office? I don’t necessarily want to do that. The other piece that I’m seeing is, especially I would think in your space, that there’s a lot of other, a lot of competition out there. And they are probably being hammered from multiple areas, so it’s like, before I really want to commit time, I really want to make sure this is worth it because I don’t want to go— Guy:– With 17 meetings for, yeah. You’re absolutely right. Danny:– And I think that’s, on the marketing side and the sales side, we’ve seen a massive uptick in terms of ad spend, email campaigns. You were mentioning webinars. Everyone’s doing the same thing, and they’re not doing them well. Present company included. We try to really make sure to provide value in our interactions, but sometimes, you know— Guy:– It’s a tough—you get it; we get it on our side. It’s tough. Personally, I know you do the same, we get so much email, personal email, work email. I’m like, why? I will say there’s been one or two that I’ve actually clicked and looked at because I’m like, oh, that’s kind of interesting, just to more learn what they’re doing, not to talk about their service. Danny:– Why have you clicked? What intrigued you? Guy:– There’s one that I clicked because this woman did a great job where she—I forget where, but she sent me a quick video where I was like, oh, that’s interesting. Then she followed up, and I didn’t take this meeting, but she followed up which I thought was good. She was like, happy to send you a $5 Starbucks gift card, get coffee, and you and I can just chat over coffee, virtually. I was like, eh, okay. I’m intrigued. I didn’t take the meeting, but I clicked. I opened up— Danny:– Enough to where you remembered it. Guy:– And I remembered it. I’ve gotten plenty of other ones I remembered for the wrong reasons. It was like, did you get my email? Why aren’t you responding? I’m like, oh, my God. Are we back in high school, and you’re like a jilted ex-girlfriend? Danny:– Can you just circle yes or no? Guy:– It’s like, read the room. If I’m not clicking—but again, I didn’t take her meeting. But I got past stage one. We have this conversation internally a lot. I just had this call recently about this, and again, I feel as if too what we, the challenge we have is with digital technology. It’s too easy to send messages to everybody. It’s too easy to say, oh, let’s craft this fantastic email, and then blast it to 10,000 people. As opposed to saying no, like in the old days where I’m sending a mailer or something. It’s like, well this costs money, so I can’t do 10,000 of these mailings. So let’s get that 10,000 list down to 2,000, and then 2,000 down to 200 and then down to 20 that we really think. Let’s really work it and figure out, Danny likes this, and Guy likes this, and we’re going to craft it. I think we’ve lost some of that discipline because now it’s just so easy to hit send, and we have all these great automations. Danny:– Doesn’t that solve it? Guy:– It solves everything. Danny:– Just like in a facility. Guy:– Absolutely, and I think that’s where we’ve missed out. And the problem is everybody’s doing it, so then we get lost in the sea of everything else. Danny:– Exactly. Guy:– And one of the things I talk to our team all the time about always is old-fashioned stuff. Go to their LinkedIn profile. Read about them. Go to their Twitter profile. I know some of it’s kind of creepy, but figure out— Danny:– It’s not creepy; it’s all public. Guy:– It’s all public. Danny:– I go to people’s houses—oh, no, I’m just playing. That’s creepy. Guy:– As long as you’re on the street, which is a public domain, you’re fine. Danny:– I’ve never done that. I’m just going to say that for the record. Guy:– But I think we as an industry, speaking as marketing folks, as an industry too I think we need to go back to—again, use all of the tools that are at our disposal, but go back to the old-fashioned way of, all right, get your list; work it. Figure out what makes people tick. And it’s not one-size-fits-all. Danny:– Exactly. Guy:– Danny might like emails. Guy might like snail mail. Figure that out as opposed to just saying let’s just click the button. Let’s canvass everybody. I’ll give you a story. When I worked at a company called Progress Software, we actually had a campaign that was really interesting. We had a lot of hospitality businesses: airlines, hotels, cruise ships. And we came up with this really targeted campaign where we, snail mail, got out and printed out on very high-gauge paper, looked like a menu you would get at a high-end restaurant, nicely printed, nice font and everything. And it was basically just a, here’s who we are. Here are some of the things that we can do, like a menu. Like if you need this, we’ve got these three things. For your entrée, it’s this. And we sent it out with, I forget the verbiage. We got a pretty good conversion on that. Why, because A, it was real mail. It was a nice envelope, heavy gauge, hand-written type stuff. And it wasn’t to 10,000 people. This was a very curated list, but the beauty of it was people got attention, and it was like, this is different. Let me go to the website and see. We did the same thing when I was at Infor which was, I thought was really cool as well. Same thing, we curated the list. There were 20 people in North America we wanted to go after. We were going after the French-speaking market, 10 in the French-speaking market. They literally brought myself in and Kurt who was our founder. And we said, alright, you’re going to read a 20-minute blurb for each one, but with their name at the beginning. So it’s not read a blurb and then we’re going to insert the name later. No, no, you read it each time. And it takes time, but you know what? On our side I remember, so they had me come in and do the French one. We sent out 10; we got one that got put in the pipe. Danny:– Hey, that’s great. Guy:– That’s fantastic. We used a digital tool, but we personalized it. And we did our homework beforehand to figure out this list we need to curate down to a size that makes the most sense. And I think that’s a lesson we at times forget is that we buy these lists. We say oh, yeah, there’s— Danny:– Blast them. Guy:– Yeah, 6000 people in North America that want supply chain solutions. Great, let’s blast them. And we do the usual problem with 6000, if we get 1% conversion, then that’s this many, and then of that it—oh, great, we’re going to make two million bucks out of this. It’s not—just put a spreadsheet and run the numbers like that. So I think we as a market, from a marketing perspective, I think we need to go back again to old-school of do your research, understand what people are looking for, just like we as consumers. Understand what makes us tick, and then go out, reach in. To your questions to start this is, we’ve got to learn or leverage the muscles we developed during Covid and relearn the ones that we forgot. And then figure out what the mix is moving forward because I think it’s exciting because we’ve learned these new techniques. It’s also daunting because we’ve forgotten some of them. And what I fear sometimes is that the pendulum swings too much. Oh, let’s do everything digital. Eh, I don’t know. Danny:– Right, right, totally makes sense. Love it. This is great. Personalization has always been a huge—I’ve just loved it. And there is some great technology out there now where you can still automate it a little bit, but you can still personalize it a little bit more. Great example. I absolutely love that. You’re seeing these a lot in account-based marketing campaigns, ABM, targeting, just being really targeted. Instead of 2000 people, we’re going to focus on these 20 and go real deep and provide real value. I love it. Thanks for sharing that, by the way. That was great. I’m going to check our time here. You’ve got a plane to catch. I want to make sure—oh, we’re doing real good. I’m going to ask you one last question. And this only going to go 45 minutes. No, I’m just playing. Guy:– The question or the answer? Danny:– Both. No, if you had a magic wand that you could change anything in the industry, what would that be? Guy:– I think for me the magic wand is, and this is for B2B or B2C is, and going back to our iceberg analogy, the magic wand is to have the consumer, and I don’t just mean us as consumers of retail, but consumers of any good or product is to reset or to create more reasonable expectations around fulfillment and things of that nature. Now I’m not saying that we should accept subpar service or we should accept bad fulfillment. I’m not saying that at all. What I’m saying is, the magic wand would be to make us more aware of what is it that it takes to get a product, this mug, from design to sourcing to manufacturing to shipping to storing to getting here to getting to this table. What is that journey, and the complexities of it that go into it so that if Danny orders 10 of these and they’re supposed to come next week, but they come two weeks later, you don’t flip out. Now, again, I’m not saying you accept poor service. But understand why, and that magic wand is not only the expectation, but also from the supply chain to be as open as we can be to our end customer so that they can have better expectations as well. That’s the magic wand I want because I feel as if supply chain at some level, which we’ve all played the beer game. I don’t mean the one, how many shots can you do? But the old beer game of operations. We’ve all realized, when we play that game at times, that supply chain sometimes is just this cloud of mystery. So you said you wanted 10 cases, but I really think you want 12, so I’m going to manufacture 15 because I want some safety stock. And then I’m going to tell my supplier, but my supplier knows that I always lie to her, so she’s actually going to under—think about it. It’s all expectations that are shrouded in mystery and that we are trying to game the system. I know we talk about digital and all this. Yes, that adds a level of transparency, but there’s still that underlying notion of, do I really trust you? Am I going to hedge? And I think the magic wand is to continue to have better discussions but more importantly is the customer’s expectations to be more in line with the reality. And we even touched upon this, but part of it too, and I think we’re going to see more of it, is around things like sustainability. Oh, you really want that product? Well I’m going to have to put it—and you ordered five items in your shopping cart, but you really want that one, so I have to expedite it. So instead of doing a full truckload, I’m going to send you one little item in a corrugated box, and I have to air ship it, and this, and this, and this. Do you really need it then? Can you set your expectation—maybe you do, in which case fine. But you need to understand the repercussions. You need to understand the cost. I think that magic wand is to open our eyes as consumers into what expectations should be and can be. And it’s to open the eyes or to encourage the supply chain to be more forthcoming with us as consumers so that we understand. My mom understands, why is there no toilet paper on the store shelf? My friend understands, why is there no yeast at the store? Now, he will probably still yell at me about it because he thinks I control the supply chain. Danny:– You do, don’t you? Guy:– Well yeah, but let’s not let that out too much. But that would be my magic wand. And again, I don’t want to make it sound like it’s kumbaya stuff because I do think if we had that better expectation, then we could manage in such a way that makes things—it might actually make things more efficient. It might actually make things better in the long run because—my little rant, I’m going to go on it for a quick second here is the notion of we need something in two days or two hours is an artificial need. Do you really need something? In some industries, yes. Healthcare for example, if somebody’s going into surgery and we need blood, there’s a time sensitivity to it. Danny:– They get a pass. Guy:– They get a pass. Certain things, yes, there is more time sensitivity. But honestly, if I order my kid a Christmas present and I ordered it late, that’s my fault. That’s on me. But does my kid really need something on this specific date? Probably not. They could probably wait a day or two or three or a week. Now again, I’m not saying we completely relax expectations and say, oh, if you told me it was going to be here next Thursday and it comes in three months, that’s okay too. No, let’s not go that far. But I think again, this preconceived notion that, well I need everything in two hours. Really? No, you don’t. So I think the expectation level, if we start understanding more about that, I believe that some of us—not all—will then understand better. Okay, yeah, I could wait. I can wait until you assemble all the items I ordered into one box. I can wait until your truck is full, and you can expedite it to me. I can wait until oh, your truck is going to fulfill that item at the store, and I can just go to the store and pick it up. Because now what’s it going to do? It’s going to save one extra truck coming to my house. It’s going to save a corrugated box. It’s going to let me go to the store and pick it up. So I do believe that if we have some of those changes, it actually might make the whole system better, more efficient because again, we as consumers will have more sensitivity to the intricacies of it and the suppliers or the folks in the supply chain will be able to offer us more ways of fulfillment that we otherwise now are just saying, no, no, no, it’s got to be here in two days. Eh, really? So I think that my magic wand is understanding from both sides. Visibility, understanding, expectation-setting which I think only can happen as we get more visibility, more trust, more understanding of what’s happening within the system because otherwise we’re back to the beer game. Yeah, I don’t really know if you are going to get me the stuff I need, so I’m going to hedge. And they– you’re going to hedge, and then your supplier’s going to hedge. The next thing you know, we got a bloated supply chain. That’s my magic wand. Danny:– I love it. No, it’s great, and it’s interesting. That is very interesting, and I think you’re 100% right. It goes to expectations. There is an expectation, but there’s one company that I think has created that expectation. Which is—I mean, look. I remember as a kid, getting packages was like Christmas. It was amazing. You’d have to wait freaking forever. If you ordered something, if you actually ordered something. Yeah, and then it would come in, and you’d be like, this is amazing. My kids are like, “Oh, another box.” Guy:– “You going to open it?” “Eh, I’ll open it tomorrow.” Danny:– Oh, yeah, you know, it’s some more stuff. Guy:– It’s awful, but it’s true. We live in a condo. We have a door person, and it’s great because they’ll get our packages. There’s not a day that goes by that, oh, you got a package which we’ve grown accustomed to. But again, it’s like, do I need this right away? No, I could probably have waited. This is that same company that’s driven that mentality. I look at them and say, guys, you’ve also messed up in a way because you started to creep a little bit into giving us more flexibility of, I’ll wait because then you’ll put all this stuff—now they’ve backed off on that. But also, the other day I ordered—super sexy order. I ordered a shower door sweep. Danny:– Oh, tell me more. Guy:– Oh yeah, it’s fantastic. It’s a little piece of plastic. It’s about this big; it’s about that wide. You would think the packaging would be small. No, big box. I was like, what is this? Really? You’re wasting all that corrugated. It’s not efficient in your truck because now you’re loading a pallet with all this stuff, all because you’ve got to get it—no, the system, from that point of view, that one company, you can do better. Do better. Danny:– Yeah, that is interesting. And I do know some of the incentives, and to be honest with you I haven’t shopped on there recently—or bought. We talked about the difference between buying and shopping which makes a lot of sense. But I do remember digital credits and stuff you get. Hey look, if you don’t need this thing now, that worked for me. I could see different things. It makes sense. It makes a lot of sense. What could we do to pull some of the pressure off? It also goes into, I feel like, just our society as a whole. From an ecomm perspective and the expectation of two hours or two days or what have you. What about fast food? It’s a cultural and societal thing, and it’s, “I have a need or a problem or a pain, and I want it solved as quickly as possible.” Guy:– We could write a PhD thesis on this. Danny:– Now we’re getting into psychology. Guy:– And you’re absolutely right. I’m an old fuddy duddy, so I’m like, ah, get off my lawn type stuff. But part of that too, I think it’s the expectation being set at that level from a standpoint—on the flip side when I look at things from the retail space, some of the brands I love like Bonobos, like Indochino, if you go to Bonobos when they first started—less so now, but they still have this model where it’s a showroom. You walk in; you go look at a shirt. You look at fabric. You look at this sports coat. You’re going to see what it looks like, see some colors. But then I’m going to ship it to you. Yes, I’m still shipping it to you, but the expectation is such that I can wait for it to come. Danny:– Because otherwise you would want it, get it, and I’m going to walk away with it. Guy:– I’m in the store, yeah. I went to Indochino, and they were purely digitally native. You would measure yourself. They gave you all kinds of ways to measure. You would send the measurements in, and then you, online, you would pick your suit, your patterns, and all this. They’d send it off. It went to China. They manufactured and sent it to you, and it was much cheaper than if you went to Savile Row in England. Funny story; one day I’ll show you pictures of when I first did this. My measurements, obviously, were off because I looked like I was wearing fat guy in a little suit type stuff. But anyways, I digress. Indochino’s done a great job of now putting in physical stores. Not stores, but basically tailors in malls. And I went to one recently in Las Vegas, and it was a great experience. I didn’t leave with anything. Why, because they’re going to ship it to me. To your point, Danny, I think that yes, culturally, psychologically, we’ve come to this instant everything mentality. But what’s interesting, there’s still some slivers where people are willing to say, you know what? Okay, we’ll wait for this. If I look at high-end luxury items, there’s still an experience, and there’s still a rarity involved with it. I was recently in Paris, before Omicron hit again, so last fall. I went to Maison Goyard, very high-end store. I was buying my girlfriend a present. And again, there was a scarcity. They don’t do any ecommerce. I can’t just go online and go click, click, click, and it’s shipped to me. You have to make the investment, literally both monetarily and physically, to go and stand in line and get in the store, but then it’s part of the experience. Now again, back to the earlier conversation around marketing, it’s not one-size-fits-all. If I’m buying something, I don’t want that. If I’m shopping, I’m okay with that. I want that, and I don’t need the instantaneous satisfaction. If I’m buying because I need a roll of toilet paper, I want to go and get it. We have to also, from that standpoint, see those expectations. And I think again, back to the magic wand, I think if we started to get more clarity as consumers around both of those activities and what goes behind it, then the players in the supply chain can then tell us or give us more options that are more viable as opposed to just, I need it in two days. Danny:– Right. Yeah, makes a lot of sense. I like the magic wand answer. It was good. Thank you. So Guy, listen. I’ve thoroughly enjoyed our conversation. I’ve thoroughly enjoyed having you in the flesh. Guy:– Hey, thanks for having me in the flesh again. You know I love coming here, so really appreciate you taking the time and having me onstage, in-person. Danny:– Well this has been awesome, and we’re going to do it again. Guy:– Absolutely. Danny:– And we were talking about, maybe we’ll change the set, and we’ll have some bourbons. Guy:– Have some bourbons, some cigars. Read some Chaucer while we’re at it. Danny:– That sounds like a win to me. Alright so, well thanks again for coming on. Guy:– Absolutely. Danny:– I’m going to wrap up today’s episode. This was awesome. I loved it. Listen, if you want to learn more about Tecsys, you can go to the website. It’s T-E-C-S-Y-S dot com. And if I misspelled it, it doesn’t matter because we have a link in the website in the video and on the post right there. But thank you so much for watching this episode. This was awesome, and again, I really enjoyed, always enjoy having Guy come on and sharing his expertise and insights and conversations, always been a joy. So you can check him out. He’s pretty active on LinkedIn. You can find him there. That’s all I’ve got for you today. Thank you so much for watching. Listen, if you’re not subscribed I implore you to go, if you’re not on the website right now, IndustrialSage.com, and you can subscribe because you’re missing out on great content like this, conversations with leaders in the industry to understand different perspectives and what’s working for them, how they’re seeing what things are going on. Maybe you’re in the same industry; maybe you’re not. A lot of learnings there, so a lot of great content you’re missing out if you’re not subscribed. So that’s all I’ve got for you today. Thank you so much for watching or listening if you’re on the podcast. I’ll be back next week with another episode on IndustrialSage.
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| Kindred AI, Powered by Ocado Solutions: Marin Tchakarov | 13 févr. 2022 | 00:33:06 | |
Marin Tchakarov, CEO of Kindred AI (Powered by Ocado Solutions) returns to share his thoughts on the rise of AI and robotics in ecommerce.
Danny:
– Well hello and welcome to today’s IndustrialSage Executive Series interview. I am joined by Marin Tchakarov who is the CEO of Kindred, Powered by Ocado. Marin, thank you so much for joining me again on the IndustrialSage Executive Series. Marin:– Pleasure to be here, Danny. It’s been a while. Good to be back. Danny:– It has been a while. A lot has happened since then. Maybe for those who didn’t watch the first episode when you were on—and if they haven’t, they need to go listen or watch it right now—but for those who aren’t familiar with Kindred, tell me a little bit about who you guys are and what you do. Marin:– Sure, we’re a smart robotics company in the ecommerce fulfillment vertical space. We were founded in 2014 by a collection of brilliant artificial intelligence and machine learning engineers and scientists. Fast forward to 2017. We productized what today is known as SORT which is a smart robot solution that automates a manual sortation station, or as they are called, “put walls” in ecomm fulfillment centers across the country. And so the essence of what we do is, we utilize artificial intelligence that powers machine vision to singulate—that is machine-vision speak for seeing—an item set, the items within it distinct and separate from one another. And then we have a patented AutoGrasp technology that identifies where we will pick a particular item to then effect a successful scan and stow. We essentially automate via smart robotics-type, machine vision-type solution, manual put walls in ecomm fulfillment centers. Danny:– Excellent. Well there’s no, I’m sure, lack of challenges or opportunities in the industry right there, specifically as we look at ecomm and what has happened over the last several months. Really another big thing happened and a big change since when we had spoken last. I think it was probably, I think it was February, March, or April of 2020. I’m totally forgetting the time. Marin:– Perhaps a little bit later than that. I want to say July or so, but yeah, sometime in 2020. Danny:– It was definitely—it wasn’t BC, before Covid, it was after. Marin:– That’s right. Danny:– Certainly there are some things that have happened since then. There was an acquisition that happened. Tell us about that. Marin:– Yeah, extremely exciting. We closed the acquisition by Ocado Group in December of last year, of 2020. An extremely exciting endeavor for the company in ways that it affords us the ability to accelerate our product development, our initiatives. And so we were very much on path to do ambitious things prior to the acquisition, but many of those would have been serial in nature. They would have been sequential. We would have chosen one or two to do at the same time, if that, and then sequence them out in our future. Now, with the backing of the powerhouse that Ocado Group is, we can focus on a few things at a time. We have four key focal areas for Kindred in front of us. In no particular order, one is to invest in our technology stack to improve our capabilities, to enhance our capabilities to handle a variety of items. In other words, to enhance and expand our item set capabilities. It’s extremely exciting. Another one that’s adjacent to that is we are also focused at the same time on expanding into different market segments and verticals that many of our existing and new customers would find extremely appealing. A third one is a very natural one, which the acquisition is a multinational conglomerate now is to look at expanding across the globe, so looking at different geographies. That would’ve been something that we wouldn’t have looked at for years to come on a standalone basis as a startup, as a small smart robotics startup in the space. But today we’re very much actively looking at geographic expansion across the globe. And last but not least, with the growth that we’ve been experiencing which I think I should probably note has been, we’ve been on a 200-plus% CAGR since inception. We’ve more than doubled every year since inception. We’re tremendously happy and proud of our growth metrics, and so with that growth comes the challenges of scale. And so the fourth aspect, at the same time, as I said, is to build an organization of customer success, account management, and just excellence in customer and client service that is data-driven, that is augmentative in helping our customers in their pride for effectiveness and efficiency in their fulfillment centers. Danny:– Well that’s fantastic. Congratulations, first of all, on that. That sounds amazing. One quick question that I have on that: Was that in the cards, would you say, before Covid? Was that a result of Covid? Was it completely, had nothing to do with it whatsoever? Marin:– No, it had, I would say—nothing to do with it is the short and simple answer. I think the expanded answer is that I am, again, proud of the organization and the brilliance of our team. To share is… We had an extremely successful few years behind us. We’ve been in commercial operations for the last four years, so that’s not a lot in established industries and businesses, but it’s an eternity in the vertical and the nascent space in which we operate as a smart robotics company. And we’ve been crushing it for the last four years doing so. I think 2020 was just yet another year going back in time, pre-acquisition, I guess during Covid. 2020 was an incredibly successful year for Kindred in the face of adversity with respect to Covid and the pandemic and lockdowns and all of that. When many businesses were battening down the hatches and trying to control costs, we adopted an extremely aggressive stance towards the market. We saw an opportunity to really double-down on our technology, our expertise, and customer growth respectively, and we delivered. And so we posted some tremendous growth numbers in 2020, and when that happens, the world notices. Danny:– Yes, they do. Marin:– That’s just, I think, the story. There was nothing contemplative or really as a direct correlation with the pandemic itself. Many of these trends in our persistence and progress have been—that was in existence pre-Covid. Danny:– That makes sense, and I was just curious about that. It’s such a fascinating space, obviously with all the digital transformation and the technology shift that’s happening. Obviously Covid kind of threw gasoline on the fire. Now you’re looking at current challenges right now relative to—you’ve certainly got the supply chain issues, but you also have labor being a very big one, specifically when we’re talking about robotics and smart robotics. As I understand it, the Ocado Group is a very, pretty focused online grocery. When it comes to some of these ecomm solutions, I was hearing stats that in 2020 that ecomm grew by 40% over that year alone, so it put a tremendous stress on micro-fulfillment being a big thing, to… just in general with that. Do you see those challenges continuing on in the foreseeable future? Marin:– Absolutely. Covid’s been—one thing is for certain, to give a nod to and an acknowledgement is that Covid’s been now with the hindsight of what, almost 18 months, 15 months, whatever, something like that, and us living with it, things are clearing up in terms of what a force it has been, and it’s been a massive catalyst in a number of venues. One of those is the shift from traditional brick-and-mortar onto ecommerce. Again, the pandemic’s been a massive accelerant and a catalyst to that shift. That is one aspect that we certainly think and, from what we’ve seen so far and where we are today, we think that’s going to persist into the future as that trend is here to stay. Another one is the trend that we’ve seen pre-Covid which is to do with what many folks call today labor shortages. I’d like to think of as labor inflation, if you will, outpacing general inflation in some ways or other. That trend had been in existence, has been in existence pre-Covid. Again, that’s one thing that got boosted and accelerated, and aspects thereof. Social distancing and health and safety aspects in the workplace are certainly getting a boost from that recent history of ours. Danny:– Yeah, it’s interesting. I was reading a stat from, I guess recently, the conference that A3 put on. It was in Memphis. This was a couple weeks ago, on robotics. And there was a particular stat that came out saying, and I can’t remember the specific timeframe, but I didn’t think it was super long, like five years or so where because of the rapid growth with ecomm—and again, this was happening before Covid, but it just pushed it into more—is that just with the shifting, particularly when we’re looking at micro-fulfillment, that there’s a projection that there’s not enough people really to fulfill the jobs, that that is going to be created, that shift that is being created. Therefore when you start looking at these questions that people will pose when it comes to AI, when it comes to robotics is it, hey, is this taking people’s jobs? When you look at some of this data that’s coming, are you saying, well, there’s going to be a giant gap if we keep going down this road, which it kind of seems like we are. That’s interesting. What are your thoughts on that? Marin:– Yeah, I think by and large I share your sentiments and analysis of that. And the summary that you put forth is fairly accurate from what we observe in our environment. I would add that we focus on introducing a new way of collaboration between human and machine. I think the way that I would want folks to think about this and the way we certainly think about it in introducing our smart robotic solutions into ecommerce fulfillment centers across the country is a new way for humans to collaborate with smart robots or these types of new industry 4.0 machines at wide, and in general. We therefore make while having the same human at fulfilling basically the same set of responsibilities. We add on a supervisory aspect to their job. In other words, they now are in charge of, typically, three to four robots. It’s important to note for the audience that one human can basically supervise up to four, sometimes even more, robots at a time. Then therefore that triples, quadruples, or more the output in terms of throughput and in terms of therefore efficiency into those operations. And at the same time, that collaboration is, dare we say, more fun. We have many instances in our customer sites where folks supervising robots have friendly competitions. They assign human characteristics and aspects to their fleet, to their mini-fleet of robots that they supervise. They call them names. They name them. They run stats against each other in teams. And so I think it’s a very new, 21st century way of collaborating with machines in a much more involved way than ever before. That’s how we like to think of what we bring in. Danny:– Absolutely. That definitely makes a lot of sense, and I love hearing about that interaction, co-bots, interacting, really assisting people in their jobs. It’s funny; you mentioned that it can be a lot more fun because the reality of it is a lot of these solutions where you’ve got super repetitive tasks from an ergonomic standpoint to safety issues, you’ve got issues. This helps to be able to really solve with that. I think it’s just some great solutions. We’re going to continue to see more innovation that’s coming out that’s going to, I think it’s really going to help solve a lot of these challenges. As we are starting to emerge, hopefully, from Covid and the pandemic, as we settle into the new normal, whatever that is, obviously we have some short-term challenges. Long-term, what are you seeing that is going to, I would say maybe challenges and opportunities. What is here to stay in the long term? Marin:– Yeah, in my view, and again having observed those trends over the last, especially with the catalyst in place and in the face of the pandemic, the trends that are here to stay are the continual shift from brick-and-mortar onto ecommerce. It’s difficult to say where that “equilibrium” would be, but I don’t think we’re there yet. From what we’ve observed, I think that would be something that would continue to trend, perhaps in a more accelerated fashion in our near to mid-term. It’s interesting to put that in perspective because from the advent of 3.0 and the internet and commerce and the internet two decades ago now in the early 2000s, ecomm had only grown pre-Covid, had only grown to teens. Teens, high teens perhaps, depending upon which survey you look at and in terms of overall volume. Teens would probably, in some surveys, be generous with respect to total commerce. Like you pointed out, just in the last year plus, we’ve seen a massive spike in that shift. And so I think that’s put that shift on a different trajectory and a different vector, and so we think that that’s going to continue. Another aspect that’s going to continue is the desire to automate with respect to addressing issues to do with efficiency and overall effectiveness, therefore, of fulfillment centers. Certain players in the industry set the beat, and consumers like it and follow it. And so we all like to get our goods in 24 hours, 48 hours perhaps, and so it’s a constant race to those KPIs and how do different… How do all the folks in the space get as close as possible to those standards? And so effectiveness and efficiency are paramount. Last but not least, probably social distancing would be with us for some time, dare we say for a long time. Danny:– Sure, yeah, absolutely. It all makes a lot of sense. I was talking with my wife about this, actually, with the changing. What I think was interesting, and I guess maybe this is—I never thought about it this way. What’s interesting is that when you go to… typically in grocery… Ocado is, that’s a big focus there. We essentially are, you go to shop, you are the pickers. You are literally picking the product in a distribution facility. Now that’s all shifting, and people have—it’s interesting to see how the consumer trends are where—even now I was hearing of people, just anecdotally, my wife was talking to one of her friends. She was like, I don’t understand—I never did an Instacart or any of these things until recently, and oh my gosh, this was mind blowing. I’m never going to go back to the grocery store. I’m going to do things this way, or I’m going to get my groceries from Amazon or what have you. I thought it was kind of interesting that—and maybe this is just my perception. I thought well, I thought everybody was doing this. Is this not—but obviously we’re still kind of—and not everyone has necessarily adopted it. It’s interesting when you look at the different experiences, and I’m curious. In the future, if you pull out a crystal ball, do you think that shoppers—and again, I’m not going to hold you to this—but do you think that it’s going to be 100% online where nobody’s going into stores anymore? Where do you think it gets to, and then it says okay, it’s going to kind of settle? Marin:– It’s a great question, and I wish I had that crystal ball, Danny. Danny:– We all do, right? Marin:– I would say there is an equilibrium. I don’t think that everything migrates over a period of time 100% to online activity. There is an equilibrium there. We still want to corroborate certain aspects of things that we acquire in our lives, whether it’s as basic as groceries or in apparel or bigger ticket items like appliances and cars and whatnot. In any case, what we ultimately want is a way to corroborate certain aspects of our behavior. That corroborative desire, I think, is with us and will persist. The question is what the equilibrium is. And also the question is in a way of perception, I believe what we determine is somewhat generic or has evolved to somewhat generic in the need for the corroboration. In other words, a common basket of goods and/or services perhaps are going to see a faster migration to online shopping from brick-and-mortar than some of the other pricier/more seldom acquired type of goods and services. Perhaps the shorter answer to this question is that there’s an equilibrium somewhere. I just don’t think that we’ve necessarily reached it yet. I think there’s some growth, probably meaningful growth left for that journey from traditional in-store to brick-and-mortar. It’s interesting because a lot of the brick-and-mortar experiences are also evolving where there is the hybrid model now of checking it out online buying it online and wanting to go see it and pick it up in-store and maybe do more shopping while you’re there and you’re picking up the items that you definitely needed to buy which you did online. So there’s an interesting hybrid evolving between the two, which is fascinating. Danny:– Absolutely, absolutely. And again, trends we were seeing beforehand, but now obviously even more. I remember going into an REI and looking at a bike on my phone, and then later—this was years ago—and ended up getting retargeted for that specific product. I’m like, wow, they’re using my GPS, and they’re retargeting. They knew the exact product that I was looking at. Crazy stuff, but we’re seeing, to your point, some of that hybrid, and we’re going to continue to see more. I think it’s fascinating stuff. I think you have a big challenge. Where are the trends going? Now let’s adjust here in the micro-fulfillment. Are we going to be on-premise, or is it going to be more distribution facilities? Is it all of the above? Marin:– I would just add, if I may, that yes, it’s a challenge, but it’s an incredibly exciting and fun one to have in front of us. We’ve been extremely fortunate to have focused on ecomm fulfillment all along, from the inception of our commercial products, thereafter. That’s been an incredibly fortunate aspect. But on the other hand we chose it strategically, so there’s also that. I think the exciting part here is that we’ve been a witness, and a participating one at that, of this migration from brick-and-mortar to ecomm, and we’ve been with our customers every step of the way helping them realize that growth in their online businesses and efficiencies thereof as well, so that’s been incredibly exciting to see not only obviously to talk about our growth, but our growth really translates into our customers’ growth, or the other way around. Really I should say our customers’ growth translated into ours, and so that’s been incredibly exciting to see. Danny:– I think we just tapped into a little bit of passion there. I think you got a little excited there. That’s great. I love that, and I love having conversations with leaders of different organizations because you can sometimes pinpoint and see where, and obviously I feel like we hit something there. It’s a thrill. It sounds like you really like solving these— I would say instead of looking at them as challenges, here are the opportunities. How can we solve them? Marin:– You’re spot-on. I’m glad that it came through. It is a passion. I am passionate about—I get extremely passionate and excited about helping our customers grow. We… one of our key values is to constantly obsess about customer experiences and how to solve pain points for our customers. This is critical. Danny:– All good, it’s all good. I think that’s super exciting. I get super passionate about it as well. I just love solving these problems. There’s nothing better than when you see a challenge or an opportunity, and you can go help your customer to be able to go and do that and get those results for them. That’s super exciting. That’s just—I love it, especially with—I think what you guys are doing is awesome. I don’t have an engineering bone in me, so I can’t do that. Machine learning and AI and robotics and all that stuff, I love. I have deep appreciation for it, but yeah, you don’t want me on that team. My last question is really targeted more for you. And that is, as the leader of your organization, what are you doing to stay on top of your game? Marin:– More communication. I think it’s been incredibly challenging of a time for everyone the last, let’s call it 15 months. One of the things that I’ve done to try and stay on top of my game as a leader is to therefore accent on different venues of communication, different ways to bring the team together to share information as timely as possible. We live in a very asynchronous, in that way, world today as most of the workforce is remote or a few folks going in and out of offices. Effective, timely communication is paramount, so what I’ve done is instituted different, more frequent check-ins and different types of check-ins with the entire team, whether it’s the executive team, whether it’s the broader team. For example, we have an every Friday all-hands, for 15 minutes standing. If we don’t need to talk for 15 minutes and share experiences from the preceding week we call it short. But there’s always a forum to share what happened during the week, highlights, lowlights, no bias, same light, and open up to Q and A. It’s just an example of one thing that we do that we hadn’t done previous to the pandemic. I try to over-index on communication and timeliness and transparency. Danny:– That’s great, super important, especially now when, like you mentioned, things have changed. Things are changing very quickly and rapidly. Where are we? That’s super important. Marin, I really appreciate your insights. I really appreciate your time that you’ve spent with me here and our audience over at IndustrialSage. For those who would like to check more out about you guys, they can go to kindred.ai; that’s correct? Marin:– That’s correct. Danny:– Alright, perfect. I wish you continued success. It’s been fun following you guys for the last little bit. I really enjoyed our conversation. I will echo, for those who are watching or listening here to go listen to that first episode. We really dove more into Marin. You’ve got such an incredible story from how you immigrated over. I was just relooking some of the notes on how you had to jump in full—I think you said you were doing a PhD course, and you said every third word, you’d have to go in the dictionary to look. What are they saying here? Marin:– No PhD, no, it was my psych 101 in college. It took me three hours to read 20 pages, yeah. Danny:– Okay, that’s what it was. A little fuzzy on that, but— Marin:– No worries. Danny:– Still, I have such a deep appreciation for that, and I think we talked about that. My family has somewhat similar experiences, not maybe to the level that you guys have. I think you have a fascinating story, and we’ll continue to— Marin:– Thank you. I’d also like to use the opportunity to give a shout-out to the team and the company. Yes, I’m very proud of my story. It’s my story. Yes, it’s wonderful. But I would say our team is beyond brilliant, and I am so proud of what we’ve accomplished with this team. We would’ve never gotten to where we are without our team at large. I just want to use the opportunity to say a big thank you to Kindred, our entire team, for working so hard and being as brilliant as you all are. Thank you from the bottom of my heart. Danny:– That is awesome, and obviously what a great, passionate leader. It’s all about the teams, right? Marin:– Yeah. Danny:– Well I’m excited to continue to follow you guys, see what you guys do, all the solutions you come up with. It sounds like the future is very bright. Marin:– Thank you. Thank you for having me. Appreciate your time. Danny:– We’ll do it again. We’ll do a follow-up here in another year or two, so we’ll see you. Marin:– Great, looking forward to it. Danny:– Awesome. Well thanks so much. Alright, well that wraps up today’s IndustrialSage Executive Series interview with Marin Tchakarov. He is from Kindred Solutions, Powered by Ocado. I think I didn’t say that at the beginning, so if you are watching this, Powered by Ocado. That’s all I’ve got for you today. Thank you so much for watching or listening. Listen, if you are not subscribed, I highly recommend you get on the email list. Why? Because you’re missing out on great content like this to hear from great leaders like Marin who was talking about how his team is awesome and how they’ve helped to solve these challenges and how they are continuing to grow. They’ve got a really, really great story. Get on the list so you can continue to learn from your peers, and you can just get a pulse of what’s going on in the industry. That’s all I’ve got for you today. Thank you so much for watching. I’ll be back next week with another episode on IndustrialSage.
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| Pricefx: Patrick Moorhead | 30 janv. 2022 | 00:34:20 | |
Patrick Moorhead, CMO of Pricefx, returns to share about the evolution of digital pricing software, and where AI may be leading the industry.
Danny: – Hello and welcome to today’s IndustrialSage Executive Series. I am joined by Patrick Moorhead who is the chief marketing officer at Pricefx. Patrick, thank you so much for joining me again. This is a second—this is a follow-up interview from before, so thank you for joining me again. Patrick:– Thank you. It’s my pleasure to be here. I’m glad to be here again. Danny:– Well I’m excited to jump into this because a lot has changed, like a lot a lot, not just Covid and all that good stuff. A lot has changed for you, and I’d love to hear that. But before we completely jump into this episode, for those who aren’t familiar with Pricefx, just tell us, who are you guys? What do you guys do? Patrick:– Yeah, we are a cloud-native, SaaS pricing optimization and management platform. We sell to billion-dollar-plus-a-year enterprises as a B2B service. We are designed to drive profitable growth and efficiency within those large organizations by helping them better understand their transaction and customer data in the context of how they price their products helping them then implement those insights into flexible price management strategies that are executed within the software with a high degree of speed, accuracy, and flexibility and ultimately deliver the gains that you can get off of that into their distributed global sales organizations through profitability solutions like CPQ, like rebate management, channel management, et cetera, et cetera. We’ve built what we believe is the leading SaaS pricing platform. We are one of the only companies that is a pure SaaS cloud offering. A lot of pricing software providers offer hybrid solutions that, at some level, require customers to install hardware in their facility that require custom coded, hard coded software solutions. Ours is completely configurable and 100% delivered online which makes it very flexible and speedy. And apparently the industry likes that because our growth has been significant. In fact, our growth has ranged from 70 to 80% year over year for three years running, even through Covid. Danny:– Wow, that’s fantastic. It sounds like there’s a win. As a follow-up to that real quick before we’ll jump into a little bit more stuff here, but from a very basic, fundamental level, how does that work? Let’s say from a manufacturing standpoint. Is it plugging into, like taking ERP data and customer data and looking at trends and whatnot? Patrick:– Yes, yes, that’s exactly right. Another way to think about Pricefx is it’s sort of a middle-office management layer. We’re able to ingest a significant amount and variety of data, so we can ingest and do ingest ERP data. We ingest CRM data. We can ingest data from financial services systems. For some customers we ingest data from web scraping services. In the case of one customer in Europe we even ingest and interface weather data as relates to their lift ticket business. So we’re very data-omnivorous, and then we’re able to transform that data by pooling it into data marts or lakes as the industry would call them to generate insights that then can lead into centralized, flexible price management. You’d be surprised to find out that in our estimation somewhere between 30 and 50% of enterprises above a billion in revenue manage their pricing via spreadsheets. That is obviously not the intention of spreadsheets, and it creates very difficult and complex pricing adjustment and pricing management situations inside those large organizations. So Pricefx is really designed to sit in the middle of ERP and sales as an ingestion point, but then also deliver prices that are optimized around willingness to pay or cost of goods sold against inflation or index pricing on commodities. There’s a whole range of strategies that can be deployed into the software that give the business the control to understand how to take price adjustment or how to offer promotions to customers without compromising their profitability and margin and then be able to deliver those into the hands of the ground force sales and customer relationship managers in a way that gives them autonomy to action that centralized insight without, again, compromising visibility and transparency into how deals go to customers and ultimately creating win-win situations for sales in the market of keeping customers happy but also maintaining profitability for the organization as a whole. Danny:– Obviously this isn’t exclusive to consumer products from a B2C verse. There’s a real strong play here, B2B if you’re dealing with distributors. Patrick:– That’s right. We’re primarily a B2B sales organization. Some of our customers are B2C, and so we work in sort of a B2B2C way in the retail genre or in the case of ticket sales, for example, and customers like that. We also have a good portfolio of customers in distribution which is kind of a hybrid world. We increasingly are building a business in and around food and beverage, not so much in the CPG manufacturer area, but more in the supply chain owners or industrial food suppliers. Danny:– The Syscos of the world. Patrick:– Yeah, companies like that who, again, anybody that’s managing a highly complex set of products and product pricing on a massive transactional volume where orders are configured in the multiple millions of dollars per order where you have customer relationships where there’s an ongoing cycle of new ordering but rebate conditions that need to be accounted for, existing inventory at the customer, and those are highly complex estimations to think about managing in the context of a spreadsheet. So we bring this full automation to that function inside an organization that helps them trim down the amount of time it takes for them to respond to and generate quotes. It can help them really calibrate pricing on a product portfolio level. It can calibrate around regionality rights, so by country or by continent. They can calibrate different pricing schemas based on the business unit and help business units in really large organizations understand the pricing of their partner business units in the context of one universe of logic. What’s new in that is optimization, and that’s probably one of the big changes for us as, in the time that’s passed since I spoke to you last, is the introduction of a next-gen, world class price optimization that’s powered by artificial intelligence as a core component of our product offering. Danny:– That’s fantastic. It sounds like, I would imagine, you said there was a stat, was it 30 to 50% of companies that were a billion or above, that they’re managing their prices based off of a spreadsheet. I totally can see that. I would imagine that there is a lot of margin that is left on the table that is able to be picked up. Say, hey listen, we didn’t realize it over here, looking across these two different departments or even the same department but across multiple territories or whatnot. And there’s lots of complexities. Patrick:– Yeah, there’s a lot of, in B2B still to this day around the world, there is a tremendous amount of pricing decision-making that gets made on the ground by the seller and the relationship manager. Well, I know what they like to buy, or I know how they like to buy it or generally try to keep things the same and keep the relationship stable. A lot of that relationship work tends to involve gut pricing, so the instincts of the salesperson pricing a deal which isn’t necessarily bad, although it can quickly get out of whack when you have an organization that is attempting to manage global profitability or maintain global margin targets, et cetera, et cetera. The advantage the software brings is efficiency to the business from a centralization point of view with a high degree of flexibility so that price changes and price strategy changes can be modeled, can be experimented with, and ultimately deployed pretty quickly, but then delivering all of that directly into the hands of the field sales organization so that as a customer’s order is being configured, and again with that optimization in place, the seller can actually receive guidance in the order itself that says hey, watch out for this discount, or you could be charging more for this based on this which, for any salesperson finding out that they could reliably probably charge more for something means better commissions, and there’s a lot of opportunity there as well. Danny:– Absolutely. No, it sounds like pretty interesting software. And I can imagine why you were having the kind of experience and the kind of growth rates that you have consistently, year over year. I can only imagine that the pandemic has added to that as it’s another massive variable across the board from spikes in demand to supply chain issues to labor issues to all kinds of things that are affecting price. Where do we give up on margin? How much are we going to absorb versus now we’ve got to pass it on? How have some of these challenges that the pandemic has brought altered your business and your customers? Patrick:– Yeah, I think each customer is unique, and there’s no one size fits all. I think we’re still overall in business grappling with what the long-term effects of the pandemic are going to be. In the early innings of the pandemic in 2020, I would say the primary pricing challenge that was brought about was speed of adjustment. It forced into the light the idea that a lot of companies philosophically believed it would become necessary someday to develop a rapid and reflexive or flexible approach to how they price and reprice and adjust pricing for their business, but it wasn’t a high priority. And the pandemic created a black swan event where if you weren’t able to rapidly and flexibly adapt your pricing strategy, you probably felt some pain. In 2020 I think there was a heavy interest from industry around, okay, I’ve got to find a way to get more flexibility in the way that I manage my pricing so that I can be more adaptive to the world because the world is now changing in ways we hadn’t anticipated, and it’s happening really fast. I think as we’ve gone along in 2021 that is still true, but I think now we’re seeing some of the additional pressures from the knock-on effects of the pandemic. The current one is inflation where you’ve got the long-term butterfly effect of supply chain disruption which is affecting commodity goods pricing. It’s affecting distribution and logistics. And all that is having a real tangible impact on, how do products get priced? Not only products that consumers on the shelf, but business to business products. You could look at the global microchip shortage. You could look at the bicycle industry as another example. While we don’t have any customers in the bicycle industry yet—maybe I will after your show—the bicycle industry is one that we talk about a lot because there is a very self-contained universe of how the pandemic brought on this massive demand spike where everyone’s stuck at home, and so I’m going to get a bike because I need to go out and exercise that the industry was not ready for, and so inventory went down. Meanwhile the ability of the manufacturing of bikes to supply parts that were necessary at the volume to meet demand wasn’t there. It’s still not there. You saw a similar thing in the auto business. Now it’s not only about hey, can we adjust our pricing and pricing strategy to effectively and rapidly respond to the necessities of the market, but also how do we, on an ongoing basis potentially account for these fluctuations in sectors of the market that we haven’t had to account for before like massive shortages in commodities or in the availability of industrial parts? Danny:– Yeah, absolutely. It’s been incredibly complex, and I don’t know that there are any manufacturers right now that have not been affected by this at all. – That’s right. Danny:– I’m hearing all kinds of stories, hey, I’ve got all these orders. I don’t have any bodies to actually go—any people to help to go do this or obviously automotive is at a big—I’m just hearing this across the board. GE refrigerators in between supply chain and labor, they normally run three shifts. They can’t do it. They’re down to one and a half. Patrick:– Yeah, and you look at the container ship situation that’s going on in the west coast of the United States as another symptom of the same problem. You have manufacturers that are succeeding in building and delivering goods, but then the goods can’t make the last mile because of capacity issues in the supply chain. And so then how do you account for spoilage, slippage, or late delivery? Trying to account for all that stuff via cells and tabs in a spreadsheet, it quickly is obvious that it doesn’t make sense. This isn’t to say that pricing software is going to solve the problems of the world. But I think it has drawn a sharp focus around the idea that pricing and price management, pricing optimization in the context of things like ERP and CRM and how orders get configured and delivered to customers needs to become a critical core competency for large enterprise, because now this potentially is the new normal where you’ve got to have this adaptability to say, “We’ve got to make a different decision about pricing or price management in this region of the world than we do in this region,” or “We need to make a different decision about this tranche of our catalog versus this tranche.” How do you find growth? That’s just a big question overall, and it’s not as obvious as it used to be. That’s where that AI, optimized-enabled technology that’s able to go and ingest your data and really come back and show you and say, hey, you’re doing tons of promotions over here, but you’re consistently losing money on those promotions because of X, Y, and Z. This customer doesn’t follow your MSRP guidelines, for example. Those kinds of insights are a key to unpacking the solution to those large, systemic problems. Danny:– Yeah, absolutely. Of the things that have changed in the pandemic, you mentioned “new normal,” and as we emerge—well, hopefully we emerge. Who knows? We were talking about it before. Who knows where we are? We’re in; we’re out. But as of three years from now—hopefully that’s a safe assessment— three years from now, what of these changes do you think will remain in place? Patrick:– Yeah, we talk about the pricing industry in our business as being a great business to be in because pricing is kind of a one-direction trend. It’s not going to get less important, and it’s not going to slow down. We built software that’s designed to help businesses adapt to that reality that pricing, the way that you price your goods and services and the way that that pricing arrives to your customers is only going to become more and more important over time for you to have mastery of. And the speed at which you will need to be able to make decisions about those issues will become shorter and shorter. I think that’s a macro trend that is not going to reverse itself anytime soon, and in three years that will still be true that the companies that are growing successfully are going to be the ones that are able to rapidly action insights off their data to deliver contextually appropriate pricing into their customers and markets in a way that’s going to both make the markets work but also drive their growth and profitability goals. I think AI is not a fad. It’s not a buzzword in pricing. I think it’s here for real. I think it’s still a buyer beware marketplace. I think there’s a lot of companies talking about AI for pricing optimization, and it’s important for buyers to really ask questions about what that means. Is it, for example, a black box AI where I’m supposed to give you my data and trust that your software plus smart people are going to just—they’re going to spit out an answer, and I just have to believe that? Danny:– That’s it, right? Patrick:– There certainly are solutions like that, and one of the things we were able to do in 2020 during the early part of the pandemic was actually acquire a leading AI company. That was one of the changes for us is—that was our first acquisition as a scale-up company. We bought a leading AI company out of France and spent the balance of 2020 integrating that into our core price management and price optimization offering. That AI, I think, is really next-generation in terms of both its power but also its transparency. We have a fully configurable AI solution. The algorithms are not protected. The capability of it is not proprietary to the point where a customer cannot go in and tinker with it and, in partnership with us, can tinker with the AI to meet their needs. That’s a key differentiator, I think, in our AI solution. I think more and more pricing will become a focus, particularly in the senior leadership of enterprise. The C-suite and upper management will begin to pay more and more attention to it because it has a really dramatic effect on the growth of a business when you get it right, and I believe that optimization and AI optimization will loom large in that conversation as well over the next three years. Danny:– Yeah, absolutely. You’re starting to see that across multiple industries, multiple solutions, the idea of how AI is the future, AI, machine learning. As they go through this big digital transformation period, whether it’s in your hardware—from a manufacturing standpoint, your actual machining and your actual physical assets—to the intangibles, the softwares, the data aspect and how that is all, where that’s connecting. I think it’s fascinating. You’re able to uncover trends and optimize and see things in a way that you never could before, or you could, but it would just take you forever. Or it would be too expensive, and it would be a massive lift. That’s a lot of spreadsheets you have to go through. If you had a magic wand, like solve one thing in your industry, what would that be? Patrick:– I think I’m probably not alone in my answer to this. I think that my colleagues… that our competitors in the business would say the same thing which is I think I would wish that more executive leaders in more billion plus enterprises were thinking and acting critically around their pricing strategy. That’s not necessarily new, but I would say it’s been that way for some time. And I think it’s slowly changing. But knowing what we know about the type of impact that high-grade enterprise pricing automation can bring to a business, I’m constantly surprised that it’s not a top conversation piece among CEOs and CFOs and CROs. The data point is pretty shocking. I think if you can achieve a 1% move in price can yield an outsized, multiple percentage point growth in profitability. If you have the right tooling, it’s actually a fairly easy way to achieve that kind of result in the context of the other ways that you could go about achieving several basis points of revenue growth in a calendar year. Then it comes to a SaaS cloud solution like Pricefx where the investment to buy the full boat from Pricefx can be ROI’d within 12 months just on efficiency or on some combination of efficiency and revenue gain. Once you understand it that way, it seems like a very obvious, simple choice to make for business leaders to install industrial-grade pricing management and price optimization into their company, and yet it’s not. It still continues to be considered either a back office function, or it’s relegated down the command chain in organizations into, in the best case, pricing leaders or pricing departments. But in many cases, and in some of our customers, there isn’t even staffing that’s addressing pricing. It’s handled out of finance, or it’s handled in sales. I would use my magic wand to create a lightbulb to go off in the brains of CEOs and CFOs and CROs around the world that pricing is actually the most efficient path to profitability that you have. And it’s actually easier than you thought it was. Danny:– That’s a great bite, a great answer. It’s funny, though, too. We ask that question quite a bit, and it tends to be a very similar answer. I just wish that people would understand that we’ve got… Totally get it, but there’s a lot of reasons for that. There’s a lot of fires, a lot of other things. And I imagine— I’m not super familiar with price optimization software. How new is it relative to everything else? Patrick:– That’s another interesting answer. So the answer is, it’s not new. Price management software has been around since the 80s, pre-internet. That’s where, when I mentioned those hybrid solutions or providers that want to install machinery and custom software at the customer, that’s them. Those technologies were invented in the 80s, and some of them were invented on mainframes. Danny:– On-premise. Patrick:– Yeah, on premise. So the idea of it and the solutions for it have been around for some time. We came on the scene six or seven years ago, really commercially started selling about five years ago, and we were different because we didn’t have any hardware. We were 100% cloud-delivered and 100% SaaS subscription, commercial terms. That was a big, new change. Now I think if you look around the pricing software industry, everybody that we run up against has some kind of a cloud solution. It’s another, similar to the AI question. It’s like, be asking questions about what that really means. Is it cloud-hosted, meaning it’s the same software that you used to run on premise, except now it’s on AWS. Or is it cloud-native? It’s built for cloud delivery and cloud configuration. We are in the latter category. The genre has been around for a while. I think awareness has been growing, and our business would reflect that. I think we’re in the early innings of cloud and SaaS pricing becoming a dominant staple of the way that middle-office management is conducted in large enterprises. Optimization is the new, shiny object in that conversation, and I think there’s a lot of learning that needs to happen in the business to grow into what to do with that. Yeah, and I think the thing that’s new—and it’s related back to our previous conversation—is this sort of heightened importance of that capability, that the pandemic black swan event and the knock-on effects that we’re experiencing today I think are drawing a very sharp focus on the idea that you need to have some level of responsive mastery over how you’re pricing your products to your customers and that you can’t do that in outdated technology, and you can’t do it in isolation of all this data about the supply chain or about the relationship with the customer or regionality or seasonality or all these other factors. Danny:– Yeah, makes a lot of sense. Interesting stuff. Big challenge, but also exciting. Obviously you’re doing something right if you guys have the growth rates that you are and the needs are there that companies are realizing that. My last question is a little bit more personal on you. What are you doing to stay at top of your game? What is that? Patrick:– I have been really investigating over the last year how to transform this company into a content marketing and inbound sales organization. That, I think, is the general trend among SaaS software providers is to move in that direction. Much like AI, I think people talk about that a lot, but implementing it or actually putting some teeth into it in terms of what does that mean is difficult. For us, I think we are investing, I am investing a lot of time in studying what it really means for the pricing industry to become a content marketer not from the point of view of what content do we make, but how do we create marketing that serves customers in the form of answering their real questions, but also serves our sales organization in terms of helping them not spend all their time on the phone educating but rather letting our marketing efforts educate our buyers so that by the time they meet our sales people, they can have a really precise conversation about how we’re going to work for them. That’s been interesting, so I’ve been making a lot of investments in our content marketing capability. As I look out into 2022, I’m eager to put some of that thinking to work. We’re going to really ramp up video as a company as both a tool for sellers but also as a primary channel for our marketing efforts. We’re attempting to develop a YouTube channel that will be the first pricing channel on YouTube, which I’m excited about. I’m keeping really close touch with the folks that are in that headspace in the business of marketing and software marketing about what does it mean to evolve from content marketing as having thought leadership to content marketing as marketing as a service to the buyer, educating buyers through marketing. I’ve really been enjoying this book recently by a gentleman named Marcus Sheridan who wrote a book called They Ask You Answer. I think there’s so much that’s right about that book, and I’m stealing shamelessly many ideas from the book as we look at how we’re going to build our content marketing organization at Pricefx. Danny:– That’s perfect. That’s it right there. Just answer your customers’ pressing challenges, their needs. That’s it. It’s easy, right? Boom, one and done. Patrick:– It’s easy to say. Danny:– Exactly. Well listen, Patrick, I’ve enjoyed our conversation. I’m sure we could probably go on for hours and hours. I think it’s a really fascinating space. I think the technology that you’re bringing in, certainly with what’s going on in the world, even before that, honestly. There was a reason why you guys were on a growth track before that. Now companies realize—it sounds like they’re realizing more, gosh, what levers do I have to pull? Oh, I never really paid attention to this one over here. Maybe we need to look at that now. Patrick:– Thank you for having me on, Danny. Danny:– Good stuff. But yeah, thanks for spending some time with us today sharing so we could learn a little more about you and Pricefx. Patrick:– Appreciate it, thank you so much. Danny:– Alright, well that wraps today’s episode, our Executive Series with Patrick Moorhead who is the chief marketing officer at Pricefx. You can learn more about them at pricefx.com. That’s price, foxtrot, x-ray, dot com. It’s the letters. We’ll have the link in the notes so you can go check them out. So that’s all I’ve got for you today. Thank you so much for watching or listening. If you are not on our email list, I highly recommend: get on that. Get on it today because you’re missing out some valuable insights. You’re going to learn about what other companies, your peers, learn about new technology like Pricefx that’s coming in. Learn about different solutions and what some of your peers are doing to really adjust and pivot with the pandemic and all the great things that life has thrown at us over the last two years. Thank you so much, and I’ll be back next week with another episode on IndustrialSage.
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| Quantum Storage Systems: Dean Cohen | 16 janv. 2022 | 00:23:01 | |
Dean Cohen of Quantum Storage shares how much the company has been able to grow while avoiding a lot of common industry pitfalls.
Danny:
– Well hello, and welcome to today’s IndustrialSage Executive Series. I am joined by Dean Cohen who is the vice president of Quantum Storage Systems. Dean, thank you so much for joining me today on the Executive Series. Dean:– My pleasure. Glad to be here. Danny:– I’m glad to have you on here. First order of business for those who are not familiar with Quantum, Quantum Storage Systems, tell me and our audience who you guys are and what you do. Dean:– We are a manufacturer of plastic storage bins and storage containers. We marry it up with wire shelving systems and supply to a wide array of customers complete storage systems in any way to organize your space. Danny:– Great, yeah. I imagine you’re in a whole host of different industries and niche segments. Can you give us a little bit of a flavor of that? Dean:– We’re fortunate to cater to a number of different markets. The markets include industrial and material handling, food service, medical, supermarket, food service, electronics, retail. There probably isn’t an industry or a sector that probably is not using or organizing with storage bins. Danny:– Gotcha. You said you’re a manufacturer; you’re manufacturing those as well. Where are those facilities where you manufacture? Dean:– We do all of our manufacturing of all of our bins here in Miami. We’ve been doing that since 1988, so we’ve been doing it a long time and have our own injection molding company here in Miami where we manufacture all the products. Danny:– That’s great. Okay, well cool. I think we’re going to jump into a little bit more some challenges, some things I imagine that just like everybody and all the manufacturers, no one’s been left untouched relative to Covid. I’m sure there’s been some challenges but also some great opportunities. But before we jump into all that, I’d really like to know more about you. I want to learn a little bit more about Dean. This is where we focus on the executives that we have on here. So tell me, how did you get into this space? Take me way back. Dean:– I’m very, very fortunate that my father who was a very, very large influence on me was always involved in plastics and introduced me to the plastics world when I was a teenager. I had an opportunity to come into a custom injection molding business when we were looking to begin our own product line and our own name brand which was the origins of Quantum. That was my original foray or entrée into the business when nobody knew what a Quantum bin was or nobody had any idea that Quantum even manufactured storage bins. Those were my original beginnings, and very lucky to be where I am today. Danny:– Is this a family-owned business? Dean:– It is. Danny:– Okay, alright, and so your father started it; is that what I understand? Dean:– My father and first cousin. Danny:– Oh, excellent. Are they still involved in the business? Dean:– My first cousin is. Yes, he is. Danny:– Okay, excellent. So you got in really, you said you were young. You were a teenager. Was it 16? Was that right? Dean:– That was my original entrée. I came out of college actually having nothing to do in the business world. I was actually a tennis player, and all I wanted to do was play tennis and travel the world playing tennis. Danny:– Oh, well what happened? Dean:– I reached the point where I decided that that was not going to be my final economic or final career move. I had always been intrigued with the business world and had always had a lot of interest in pursuing some of those endeavors. I came in basically in my mid-20s. Been here since then. Danny:– Wow. That’s awesome. I’m sure you’ve seen just a ton of change. I would imagine—and I’ve heard similar stories—that, especially with a family business, that maybe initially, hey, this isn’t the path that I wanted to go, and you come in. In some cases that there is a moment, that there is—I don’t know if, call it a light switch or just a hey, you know what? I really enjoy this. I didn’t think I was going—obviously you said you wanted to go do tennis. Did you have that moment? Was there a moment where you’re like, this actually—I really like this. This is cool. Dean:– You become fully immersed into it from the start. You’re extremely motivated. Coming from a competitive athletic world, I always had the mindset of liking to win and liking to compete, sometimes for better or worse. It was a very humbling beginning, coming out when nobody knew much about us. We had a great opportunity and a great space to get our product line and our products out to market. I loved the challenge. I loved the traveling. I loved the trade shows. I loved meeting people. Those were the origins, and that’s what actually I feel made Quantum a different company than most. We competed against companies that were quite a bit larger than us, had been around for a long period of time, a little bit of the old adage of the David and Goliath, if you will. Nobody knew us very well, but we worked hard. We built a product line today that is amongst the largest in the marketplace. We have a brand name that’s very successfully recognized that we’re very proud of. Danny:– That’s fantastic. Congratulations on that. That is no small feat. Obviously you’ve seen a lot in your career there, so do you have any—for those who are watching or listening, we have a list of questions. Big surprise, right? I want to ask you a question that’s not on the list, and I’m curious. I think you said you’ve been here 26 years. Does anything come to mind in terms of massive challenges that you’ve had to overcome in the business, the organization, or maybe even in your career that was a big, triumphant, big obstacle that you had to clear? Does anything immediately jump out? Dean:– Managing expectations. I would imagine in any business environment you have your ups and downs. You’d love to always think and feel that you’re always going to be successful and everybody wants to be successful. That’s not always the reality of what happens out there. You do win and lose, whether it’s accounts, whether it’s orders. We’ve had our fair share of disappointments, if you will, but as a group and as a team and I’m very proud to say that the people that are at this company, we probably have in excess of 50 to 60 individuals that have been with us from the beginning, 20 years plus, which is amazing. The overall milestones have been sort of managing expectations to reach the next level, whether it’s a dollar threshold, whether it’s a number of bins that we’ve sold, small, little things. Last year we were able to sell—this current year we were able to sell more than a hundred million containers, which is pretty cool. It’s a lot of bins that get sold into the marketplace. That’s not something that I thought we were going to ever be able to accomplish when I think about those sorts of numbers 25 years ago. Danny:– A hundred million last year. Obviously there’s a stat that I’ve heard that ecomm in 2020 grew by 40% I imagine from storage containers, totes being, I imagine, one small part of it. Then just as ecomm is growing almost exponentially, it feels like. From a capacity standpoint, before Covid hit and you said you were delivering a hundred million, were you stretched for capacity? What did that look like? Dean:– The history of the business has always been a little bit bursting at the seams. We’ve had a very aggressive sales force, a very aggressive and successful marketing team that has pushed our product very nicely into the spaces that we sell into today. We have a nice background and history of always being very competitive in the products that we manufacture and how we take it to market. In the early days we had eight injection molding presses. Today we have almost 60. The footprint to hold all of our inventory, we started originally in probably 75,000 square feet. Today we’re close to 1.2 million square feet. Managing the capacity has always been, we’ve always been in a growth mode, but growth within limits. We see many companies or many experiences that grow without bounds, and you don’t take care of orders or business environments that make sense for you as a company. Some of those we’ve learned through the years, and we try to make the right business decisions that have kept us on the right track of growing responsibly, which we feel we have. Danny:– That’s great. How many total employees do you have? Dean:– Today, almost 400. Danny:– Okay, and you said that 50-ish have been there since the beginning. Dean:– Yeah. Danny:– That’s pretty remarkable. Why do you think that’s the case? Dean:– We’re a family. I know that probably gets used over and over. We literally are a family, but it’s an extended family. I’m very proud to say that one of my greatest joys of the business is visiting all parts of the manufacturing portion to the warehouse portion to the office portion and knowing everybody by their first name. I love that. You come to know each other’s spouses and kids and the things that are even as equally important as the business world. I think that as a business unit we’ve grown nicely, but we’ve also protected and taken care of our “family.” Danny:– That’s awesome. That’s fantastic. Dean:– Thank you. Danny:– That’s a great story. Obviously within the last, we’ll call it close to two years at this point now, maybe a year and a half, especially when this episode releases, we’ll go back from March of 2020 when the world kind of stopped, and you’re saying that you guys cranked out a hundred million storage units—I’m saying that correct—containers—there is massive supply chain issues right now, and labor is a big issue. How have you guys managed that? Dean:– It hasn’t been easy. A big portion of our product line is wire shelving. Wire shelving is products, for us, that is manufactured offshore. We deal with a number of factories offshore. Today we’re importing close to 1000 containers a year from offshore, so managing the supply chain is a tremendous understatement of the year. That has been very, very challenging in itself. Fortunately we have a good team that was—I don’t want to say ahead of the curve, but it didn’t come as much of a surprise to us to see some of the challenges that were forthcoming. We had always been a company that believed very strongly in large inventories. The key in our industry that has been successful for us is having availability to ship your products quickly. Again, it’s probably an adage that gets used maybe too often, but if you have product that is well-priced and can ship quickly, you’re going to be successful. That has been Quantum’s “magic sauce” which is not a secret sauce by any means, but one that we’ve invested in. We’ve grown our infrastructure. We’ve grown our footprint from a manufacturing space to a warehouse space. And we’ve made sure to have our products available for our customers. As the supply chain challenges came on board, we were already heavily invested into lots of inventories. Fortunately we have good relationships with our factories and families offshore that we have suffered probably a little bit less than most with respect to not being able to get product or being significantly delayed. And while it is happening, we’re not nearly as affected as many in our space. Danny:– That’s great. It’s interesting; I posed a question—we were at a show a couple weeks ago, and I was curious about this, about people’s thoughts on specifically lean manufacturing. Have we gone too far? Have we gone too lean? You mentioned having a lot of inventory on hand. Obviously if you’ve got finished goods that are ready to go, there’s obviously a distribution component to that. I would say, it seems a lot of manufacturers have—let’s not keep a whole lot of inventory on hand, whether it’s raw goods to finished goods. It seems like you were incredibly well-positioned to be able to absorb some of that shock from the supply chain. Dean:– Our whole executive team felt that the key through all of this as things were going to tighten up was to always invest heavily into our inventory. We knew it was going to be an impact on cash and an impact on holding costs. We felt that it would pay significant dividends, which is has. Danny:– That’s fantastic. Dean:– So we feel it was the right decision. Danny:– Well, it certainly was. I could say 100%, so congratulations on that. Moving on a little bit more, we talked a little bit about challenges in the industry. Obviously the supply chain, labor is big. What are some of the new challenges that you’re seeing on the horizon as Covid’s, we’re kind of coming out, and there’s a lot of different things going on right now? What are you seeing as an industry as a whole are some challenges? Dean:– The nature of our customer base is changing a little bit. I think it’s been a very challenging environment to some of the smaller players that are out there. We continue to see some of the small players, if you will, not being as relevant or having a much tougher time to survive in the current environment. We’ve continued to see consolidation, and some of the age-old, the big are getting bigger, becoming more dominant. What it calls for us to do is just to stay true to our commitment to our distributors in making sure that they’re protected, big or small. You can’t be the masters of all the circumstances of whether other business or other companies survive or don’t survive, but you try and make sure that, as their supplier, you do right by them and you price them right. You ship for them quickly. You make sure that they get prompt answers to availability of product and when their orders are shipping. And if you make good, sound business decisions, you’ll have a good, loyal following, and that’s what we’ve noticed. So while we have probably, like most companies, probably lost some customers in the last 18 months due to the nature of the environment, things for us have remained still robust and busy, and we’re excited about the year ahead. Danny:– Yeah, who would’ve thought? Who knew what was going to happen in March? It was very scary times. We’re starting to wrap up now. What are you doing yourself to stay ahead of your game and to grow as a leader, personally, in your career? What are you doing? Dean:– As a business, we’re making significant investments into the digital space. It’s no secret that some of the old-school of the way things used to get done, you need to change with the times. It’s critically important that we stay up-to-date with technology, with digital content, with enhanced content, that our product is very easily found within search engines when our customers are selling our product in their online platforms that our images are presented well, our application images are shown well, our 3D rotations of the images present well, and that basically customers, when they’re searching for our type of product and looking for storage bins or looking for storage solutions, that they come across Quantum’s range of product which is easy to navigate, easy to find through, easy to click through. And then again, at the end of the day, I’d like to believe my bin is the most beautiful bin on the planet, but it is critical that it’s sold at the right price and that it can ship quickly. We have found that those two things we’ve married nicely. And as long as customers and companies can find our product and represent our product well, and then they know they have a good solution that they’re going to get priced competitively and the product’s going to be available for them and available quickly, and communicated very quickly as far as with tracking, you’ve got a winning solution. Danny:– Absolutely. Well that sounds like you have quite the operation going on down there. Next time I’m in—you said you were in North Miami, Florida, I’ll have to come stop by. I’d love to come check you guys out. Dean:– It’s a nice area. We love it. Danny:– I’ll come in the winter. How about that? Dean:– We have two temperatures: hot, not as hot. Danny:– There you go. That makes a lot of sense. Dean, listen, thank you so much for your time. For those who would like to learn more about you, they can go to quantumstorage.com. Is that accurate? Dean:– It is. Danny:– For all your storage needs, sounds like they’ve got quite a few things going on. Again Dean, thank you for spending some of your valuable time with us. Dean:– My total pleasure. Thank you. Danny:– Alright, well that wraps today’s IndustrialSage Executive Series interview with Dean Cohen who is vice president of Quantum Storage Systems. You can check them out, quantumstorage.com, if you have any needs there. Sounds like they’ve got quite an impressive company. I loved hearing about the culture and the history and their response through the pandemic and how it looks. Things are very bright for them. It’s great. That’s all I’ve got for you today. Thank you for watching or listening. If you are not subscribed, I highly recommend getting on our email list because you’re missing out on great content like this. I will be back next week with another episode on IndustrialSage.
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| FastFetch Corporation: John “Jack” Peck | 02 janv. 2022 | 00:22:34 | |
John “Jack” Peck of FastFetch shares his insights into the future of the distribution industry, and life lessons he’s gained along the way.
Danny: – Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Jack Peck who is the president and CEO of FastFetch Corporation. Jack, thank you so much for joining me today on the Executive Series. Jack:– Well it’s a pleasure to be here. Danny:– Well I’m excited to jump into today’s conversation and learn a little bit more about you and a little bit more about FastFetch. So to start with, for those who aren’t familiar with FastFetch, give us a little snapshot of who you guys are and what you do. Jack:– Okay, well my elevator pitch typically is, you know when you order something online and you hit the enter button, and two days later it shows up at your house? A lot of stuff happens between the time you press that button and it shows up. We’re responsible for part of that stuff. If you wanted to get more specific, FastFetch really produces software and hardware for order fulfillment in distribution centers and warehouses. We take orders. We do a lot of optimization, use a lot of artificial intelligence to get them out of the door quickly and accurately, in a snapshot. Danny:– Excellent. Well it sounds like that thing seems to be kind of important these days, especially as online ecomm is, I was reading a report how last year—because of the pandemic, so in 2020—the increase, it went up by 40% or something like that. I think we’re going to have some great things to be able to unpack here in the rest of this episode. But before we really dive into that, I want to know a little bit more about you. I want to know more about Jack. I want to know—take me back. How did you get into this space? Was it something that you studied in school? Was it as a kid, you were tinkering around with it? What was that? Jack:– Well things happen according to things you didn’t necessarily plan. When I was an undergraduate major, I was a math major. I did a lot of work. My PhD was actually in petroleum engineering and computer science, a combination of those which is a long ways away from distribution. Danny:– Just a little bit, yeah. Jack:– But you learn a lot about computers. You learn a lot about people. You learn a lot about research, innovation, entrepreneurialship, all of those things regardless of what the field is. When I went to Clemson University as an assistant professor, I looked for opportunities to do research. Some of those opportunities were brought to me by other people outside the university, and so I played on that and did a lot of work in social services, did a lot of work really for the governor’s office. I did a lot of work in Medicaid, the health department, did a whole bunch of work in mental health. That was primarily database work. Then around 1987 my kids were getting to the age where I was going to have to put them through college. I said, I better start earning some money outside the university. You do get opportunities like that during the summers in education when you’re looking for things to do. So I started a company, Foxfire Technologies. Foxfire actually specialized in manufacturing systems, real-time shop floor control primarily for apparel manufacturing. Well when apparel and textile started moving offshore to the islands and to Central American and now of course to Asia, that opportunity started to dry up some, so we transformed the company into really distribution. Distribution still remains in this country because you want it to really get the distribution centers close to the customers. I transformed my sales into that. Now Foxfire continued on, did very, very well. Sold the company in 2007 to pull out the opportunities within Foxfire for doing a lot of research into really order fulfillment. And so pulled that out and formed a new company called FastFetch Corporation which, where we are today, and have concentrated on that. As it works out, about 60 to 70% of the labor in a distribution center is in the area of order fulfillment. So if you want to really help out in terms of getting things out faster and getting more done with the same people, that’s where you concentrate your efforts. Danny:– Yeah, absolutely. I want to go back a little bit with your story when you said you were at Clemson, and I’m not going to hold that against you. Sorry, Georgia fan here. No, I love Clemson. Jack:– You wouldn’t be happy with Clemson nowadays. Danny:– I bet. You said, hey, listen; I need to make this change. Walk me through a little bit of that decision-making process from I’m going to go start my own business. That’s a big jump. Jack:– It is. I had that entrepreneurial spirit—we didn’t call it that back in those days—really when I was a graduate student. When I was a graduate student I started a company. I did a lot of work. That was back in Louisiana, back in Lafayette, Louisiana. I did a lot of work in that area. I did a lot of consulting for Shell Oil, for Dow Chemical Company solving hard problems as an undergraduate and a graduate student. Then when I came to Clemson it was encouraged to do things outside the university in the area of research. Applied research is primarily what I did. I continued to do that. As a matter of fact, I started the computer science department outside the mathematical sciences department at Clemson because mathematics, although I was a mathematics major back as an undergraduate, not everything is mathematics in computers. There’s a lot of opportunity for things that are non-mathematical. And so I broadened my perspective, got into more applied areas as I’m doing today. Danny:– Excellent. What was that moment, though? I’m assuming you were pondering, though, for a while. Hey, maybe I should do this. Maybe I shouldn’t. Should I? Should I not? Then stability and all these different things, these roadblocks. There becomes a moment, I think, when every entrepreneur says, you know what? I’m going to go do it. Jack:– Yeah, well leaving the university was one of the moments, I suppose. But even before that it became really clear that I could not do all of the things I wanted to do on a university salary. At one point in time I had a son at Carnegie Mellon. I had a daughter at Davidson. My wife was at Emory working on an advanced degree, and I had another son at the Naval Academy. Now he paid for himself on the five-year plan after graduation, but the sum of the tuitions exceeded my take-home pay from the university. All of a sudden you say, I’ve got to do something here. I’ve got to make a change and do some things that I’m really not accustomed to doing. And so I made that change at that point. Really when I took early retirement from the university I was able to then devote 100% of my efforts to a new business. Danny:– Yeah, absolutely. Fast forward two, three years, and look at this. I imagine it feels like that. Right? Jack:– Absolutely. And it was a good move. Danny:– That’s awesome. Let’s talk a little bit about over your journey. Obviously there’s a lot of experiences, a lot of ups and downs, a lot of challenges, but also a lot of achievement. Is there something that comes to mind, a particular milestone that you overcame, or maybe a mentor, somebody that’s really helped shape you to help bring you to where you are today? What comes to mind? Jack:– Gee, that’s an interesting question. I guess it really—two people had the most influence, I think, in the early days. One would be my major professor in graduate school who was really a pioneer in the computer field. I got to do some things as an undergraduate that most undergraduates around the country could not do. There were no computer science programs. He had the ability to really inspire others, and I was one of those he inspired, I’m sure. The second was probably a gentleman who was the head of the Appalachian Two District Health Department. When I was in my early days at Clemson, he came to me and said, look, I have an idea where we really ought to link together all of these state agencies with a common system with a database using online terminal access, and there weren’t terminals back in those days. We had to develop a lot of software to make all of that come together and have all the state agencies working together. That was a research project, but he gave me the inspiration to do things that had not been done in fields I had not ever worked in and learn a lot in the process. Danny:– That’s awesome. It sounds like, and I’m beginning to see now. It’s helpful to see the evolution and where now, what you’re doing over at FastFetch. Let’s jump into that a little bit now. What are some of the big challenges that you’re seeing in the industry? Jack:– Okay, that’s a good question. Well ecommerce is the big one, of course. As you pointed out early on, COVID accelerated that whole move toward ecommerce. People couldn’t get out of their houses. They had to order stuff. And they finally figured out, this is a pretty good idea. So all of a sudden it’s booming like it never has. And companies that haven’t gotten into it, well, a lot of them have fallen to the wayside as you know like Sears and a few others of that nature. Amazon, of course, having a leader who actually said we’re going to make this work and we’re going to solve problems that people want solved, well those kinds of things really helped a lot. We saw this coming early on. We’re taking a different approach. There are a lot of people that are doing advanced robotics, that are doing automated storage and retrieval systems that are very expensive. And those are fine if you have big companies can afford it. But over half of the distribution centers in this company are not big companies. And so what we’ve said is we’re going to make people more efficient. We’re going to get a 3, 4, or 5X increase in productivity out of the people you have. You’ll always have some people. So that’s what our goal is, and we’re going to make it affordable for even the smallest companies that are running vending companies that have a warehouse that might be 600 square feet. We want to make it scalable so that you can go to the largest companies at the same time. Those are the kind of solutions we’re putting together, and of course we’re seeking patents that have been granted several patents in the area which allows us to seek some protection against the larger companies that might want to invade our territory, if you will. Danny:– That never happens. Jack:– Well, we hope it happens. Danny:– What are some of the learnings or some things that have, with the pandemic, for FastFetch as a company and with the industry in general that you’ve learned and you’ve seen? Jack:– Well turnaround is the biggest thing. People get an order in; it has to be picked very, very quickly and accurately which means that you can’t—if I have a warehouse for example that’s 2 million square feet, well it takes over an hour just to walk the perimeter of that warehouse. If I have an order that requires a little of this and a little of that, and it’s all over the place, I can’t be walking around just picking stuff up out of the shelves and putting it in a box. That isn’t going to make it if I have 100,000 orders a day. I can’t have 100,000 people in my warehouse doing that, or 50,000. You have to have very clever techniques and do a lot of optimization, do artificial intelligence in order to guide people through the warehouse in a way that they can pick many orders with one trip through the warehouse so that we will do a lot of optimization. If we’re using a cart, for example, that might have 50 orders on it, I’d like to select those 50 orders out of many, many thousands so that I will minimize the walking through the warehouse to pick them. And so those are the kind of solutions we’re doing. There’s a lot of mathematics behind it, actually. Danny:– I can only imagine. Jack:– And so those are the kind of problems we like to solve. They’re not traditional, go-get-it problems. They’re go, be very clever in how you do it. Danny:– Yeah. Where do you see the industry going from here? Hopefully the pandemic—whether we’re over it, or in the middle, who knows? Where do you see things going now that we’ve gone through COVID? Jack:– One of the things that I see coming are drones. There’s been a little bit of talk about that over the last few years, but people want not two-day delivery; they want same-day delivery. If you’re going to do that, you’re going to have to have something like a drone that in big cities in particular to be able to take the items to the customer. And in order to do that, the distribution centers are going to have to be within about a 50-mile radius of the customer because they have to go out there and come back. If you have to have distribution centers, you’re no longer going to have one on the East Coast, in Chicago, and then on the West Coast. You’re going to no longer have those. You’re going to have micro-fulfillment centers. You’re going to have distribution centers, smaller ones, all over the place within, like I say, a 50-mile radius of the customers. And if you’re doing that, you can’t afford really expensive technology. You’re going to have to have less expensive technology that can be replicated in these smaller distribution centers. So that’s where I see things as going. And you see a little bit of that even with some of the—we’ve had retail stores which have been doing that for years, so I see retail stores—right now there’s something called omni-channel fulfillment. And with omni-channel, it started out saying we’re going to have the retail stores do a little bit of distribution because the clerks aren’t always busy. They’re going to fill some orders and ship them out. I see it happening just the opposite. I think you’re going to see distribution centers doing a little retail and primarily acting as showrooms for the products. What we’re going to be seeing now is a transformation of retail into distribution. That’s what I believe is happening. Danny:– I think absolutely, and I think it’s interesting too when you’ve got there’s a whole challenge with how— it’s interesting I think how retail has prior, before COVID, there’s been a big shrinking of it. Ecomm has been on the rise. You look at stories like traditional malls, malls across America that are now just abandoned. Here in Atlanta there are several that have been shrinking and shrinking and shrinking. And the question has been, what’s going to happen to that space? Something’s going to happen to revitalize. Do you think maybe that’s an answer from a micro-fulfillment standpoint where that’s the deployment piece? You were talking about drones and being able to deliver those to people if you’re within that 50-mile radius. Possible solution right there. Jack:– Absolutely, and I think that’s what you’re going to see. You’re going to see those big retail stores and malls, as you say, being transformed into distribution centers. They’re already 50 miles apart in major cities, so it’s not going to be that big of a deal to have a drone fly out of there to the customer in the larger metropolitan areas. It’s going to be a long time before you see it in Montana and Idaho, but that’s not where most of the people are. Danny:– That’s super interesting, talking about drones and all that. We’ve had some previous guests have talked about how they’re deploying drones for inventory inside warehousing. They’re outfitting using some computer visioning technology or even outfitting with RFID scanning. I think it’s an interesting application, but certainly as time goes on and the cost of this technology drops, probably the biggest hurdle right now is power from a payload perspective. What can you move? If you’ve got big, heavy things, that’s a little bit of a problem. Weather is also another little bit of a challenge. Jack:– It is. Danny:– Then the FAA is probably the biggest. But anyway, that’s— Jack:– I guess an example of what I’m saying is that many people go to computer stores. Your retail computer store —I won’t name them— but they’ll go to a retail computer store. They’ll see what they want, and they’ll go home and order it online, won’t they? Danny:– Yeah, exactly, or do it while they’re there in the store. Jack:– Absolutely. And so as I say, retail stores are going to have to start doing distribution, and they’re going to have to be competitive. Clerks are not very good order fulfillment people. They’re clerks in the retail stores. I think you’re better to leave the systems and the personnel, they will have skills, really, in distribution more so than clerks or salespeople. Danny:– Yeah, I think that’s cool to think about. Maybe it’s like the Jetsons, but on a smaller scale where you’re going to see packages and things flying around and all that good stuff. Throughout this, you’ve led this organization for a while. What are you doing currently, or a practice maybe that you’ve had since day one to really continue to stay ahead of your peers and to really keep marching forward and keeping yourself, your mission and your vision alive? What are some of those things? Jack:– Well we probably put more than 50% of our time and our resources into research and development. We look at problems that are out there. They may have been solved, but that doesn’t mean they’ve been solved in the best way. We look for new ways of solving problems, new problems, and I think that’s fun, personally. If it weren’t fun, I would be spending more time out on the lake or out on the ocean. It’s fun to do that, and the people that work for me are very talented. We have a really good group of people, and they have fun doing it. That’s why they’re working here. And as a result of having fun, we’re able to pay them pretty well, too. Danny:– That’s awesome. Well it sounds like you’re very passionate about what you do. You know an awful lot about it, and it sounds like you’ve got some great solutions to be able to help companies to be able to solve some of these big challenges that they’re facing. As I’m wrapping up, I want to give you the last word, the last opportunity to say anything you want to share with our audience. Jack:– Well I guess I would say work is important, and putting beans on the table is important, but do take time to smell the roses, a little cliche. Do take time with your family. Do take time on your hobbies. Do take time doing some reading. There will be a time when that will be perhaps all you’re going to be doing, so you better practice that as well. Danny:– All right, I lied. Last question: you mentioned hobbies. I wasn’t going to ask you this, but you brought it up. What are your hobbies? Jack:– Oh, gee, bunch of them. I guess if I were to put one of them up at the top, I’d say traveling. My wife and I have been fortunate to go to China, the Galapagos, Machu Picchu. We went to Antarctica last year. Been to Argentina. Been to Namibia. We took a nice river cruise down the Danube from Prague to Budapest. We took another one from Moscow to St. Petersburg, so I think traveling not only is it fun, but also it wakes you up and makes you aware of what other parts of the world are doing that’s—you may not have been fully aware of. Danny:– Yeah, exactly. I love it. That’s fantastic. Jack, thank you so much for your time. It’s been great getting to know a little bit more about you, about FastFetch, seeing how you view the world and these challenges that the industry is facing and also hearing about what you think, talking about the future. I love that. Jack:– Well I’ve really enjoyed it. Danny:– Thank you again. Alright, well that wraps up today’s episode with FastFetch Corporation. We were talking with Jack Peck here. If you want to learn more about them—they’ve got some really great solutions—you can go to fastfetch.biz, B-I-Z. And you can check them out to learn more about them. Hey listen, if you are not subscribed to IndustrialSage, I highly recommend. 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| ProShip Inc: Justin Cramer | 19 déc. 2021 | 00:29:51 | |
Justin Cramer of Proship discusses the major changes and challenges experienced by the logistics industry, and how they’ll shape its future.
Danny: – Hello and welcome to today’s IndustrialSage Executive Series. I’m joined by Justin Cramer who is the cofounder of ProShip. Justin, thank you so much for joining me today on the Executive Series. How are you doing? Justin:– Excellent. Thank you for having me. Danny:– Well I’m excited to jump into today’s episode and learn a little bit more about you. For those who don’t know about ProShip or have not heard of you, what do you guys do? Justin:– ProShip solves small parcel shipping complexity problems. And a lot of those problems are around speed. So if you’re a high-volume shipper, somebody shipping 1,000, 10,000, 100,000, maybe even a million shipments a day, you know there’s a lot of complexity involved there. There’s a lot of data that has to move, and it has to move very quickly or you’re not going to be able to keep up with your operators, your automated equipment, or maybe your batch processes. So that’s really what we do in a nutshell is we simplify and streamline everything necessary to actually produce the appropriate carrier label to get the package to your customer in the time they expect. Danny:– Yeah, and we all know now that that online and ecomm and when you look at freight with even just B2B from raw goods to manufacturer, just the whole thing with the big demand in ecomm has just created this massive demand for all kinds of technology where we’re seeing the supply chain is really struggling to keep up. And then there’s all kinds of talk about the big thing is, the holiday season comes up, what kind of strain you’re going to have on there. So I’m excited to jump into some more of these topics a little bit later, but right now, this part of the episode is I really want to get to know more about you, more about Justin and hear your story a little bit more. So tell me. Take me back. How did you get into this space? Was it something—did you go to school saying, hey, I want to go into logistics? What’s that story there? Justin:– No, actually I started out in the US Navy as a nuclear machinist mate. I was operating nuclear power plants at sea, had created some very good friends while I was there, and one of them got out of the military before me and ended up in the Chicagoland area doing logistics software and said, hey, I’ve got a job for you on the way out. And so we started. And we realized that well, logistics software is complicated, but not nearly as complicated as nuclear power. So we found what we thought was a pretty good niche: helping to move data, helping to select the appropriate carrier services, and apply a lot of business rules. And customers, they can get to some really complicated business rules, and I think we got lucky in the fact that we were able to simplify what nuclear power was, so we were able to help our customers using some of the same techniques, simplify their business rules, or maybe not simplify but streamline and properly hierarchy their business rules such that back in the early 2000s, they’d actually get significantly more out of the lower-powered processors that were available at the time. And it just grew from there. At first it was all about the integration. It was all about connecting to the rest of the enterprise software stack, moving that data, streamlining those business rules like I mentioned. But it was really about helping the customer to leverage the resources that they had with computing as well as labor which is a continuous issue that we’ve seen year over year, and of course now we are in the worst of it right now, we hope. Hopefully it will get better from here going forward. But it really came down to that, so we started creating carrier components to provide a higher speed. We started creating more connection components to get to more parts of the enterprise software stack. And it’s just slowly grown from there. And so we’re just a 21-year overnight success. Danny:– That was going to be my next question was, this was basically started, for the most part, coming out of the navy. Is that accurate? Justin:– Exactly, yeah, yeah. Danny:– That’s quite a jump. That, I would say, that’s a very interesting story because normally you hear, you’re going to some other organization, and then—that’s pretty awesome. Obviously you’ve seen a tremendous amount of change in the industry over that time period, I’m assuming. Justin:– Oh, yeah. Danny:– There’s a little thing called technology, and lots— Justin:– Well it’s not just that. When you look at it all the years ago, DHL used to be the fourth carrier in the US. And now they’re an international carrier the way we think of them. However, they’re one of the largest carriers in the world. Airborne is gone. That went with DHL. We’ve seen same-day continue to be the next thing, the next thing, and now we’re starting to see it again come back in the industry as people start to basically move around a little bit more. Maybe not all work from the office, but the more work from the office we’re seeing, the more demand we’re seeing from same-day. But there’s just a ton of changes that are continuing to go on, and probably one of the largest ones and one of the ones that of course me as a multi-carrier shipping software vendor is most excited about is we finally see the duopoly of UPS and FedEx where people are finally starting to question that and determine, can these regionals who have been around for decades, been providing reliable service for decades, can they help? Should I start introducing different modes? Should I start looking at crowd-source solutions? What type of courier should I be using? All these things. So to me we’re in one of the most exciting parts of the small parcel shipping software since we started. And of course that’s because of all the changes that we’ve seen over the last two decades. Danny:– Yeah, to your point there was a story that came out just a couple weeks ago of Roadie. I’m not sure if you’re familiar with them, but yeah, they’re here in Atlanta. And UPS is acquiring them, and to your point about talking about the crowd-sourcing or taking that Uber or that Lyft model, I think it is a very exciting time because you’re going to start seeing a lot of this, maybe what we call democratization of lots of change for a whole host of reasons. I think it’s super interesting. But I want to go back a little bit on your story. Going from, working on a, you said was it nuclear sub? Justin:– I was a sub volunteer. I ended up being on aircraft carriers. Danny:– Okay, aircraft carriers. I have a friend of mine who… he was on a nuclear sub. He did some of the same stuff. It was like, really? You’re in charge of this—this is crazy. Making that transition over to going into this logistics, I imagine that there was an element that, going through this, you’re kind of like, this is new. I’m not really sure. For you to be in this game that long, I would think that there’s a point where you’re like, man, I really love this. This is super cool. Did you have that moment? Justin:– That moment was basically my first successful install. The reality is, just like anything, when you have a good challenge and you actually complete that challenge, you get that first, in our case, production label out of the system and it goes into the appropriate carrier trailer, I was hooked at that point in time because what it meant was it meant pulling information from various components, ecommerce suites, OMSs, ERPs, WMSs, CRMs. A lot of home-grown systems are available now. All of these things, being able to navigate that complexity, being able to do that and then apply business rules such that the shipping station operators didn’t have to think of everything—we were there to support them, not the other way around. The first time that first production label came out, yeah, I was hooked. I wanted to do more, and I wanted to make it more efficient. Danny:– That’s awesome. That’s super cool. That’s fantastic. I love hearing stories like that. It’s almost like, hey, it worked. Justin:– We always thought it would work, and here it is actually live. And yes, it was a super affirming situation. Danny:– Yeah, absolutely. It’s only gotten a little bit more complex since then, I am sure. Going through your journey through all this, obviously you’re cofounder, and it can be very difficult. There’s a lot of challenges. It can be a little isolating, I think, at times. Is there a particular person or maybe an event in your life in this journey since the majority of it has been really with ProShip, but perhaps it’s even before that. Is there somebody that really comes to mind that you say, wow, they’ve helped me out tremendously. Again, it could be personally; it could be through business, both. Who comes to mind? Justin:– I’m actually a pretty voracious reader, so a lot of—somebody said that you should have multiple mentors, and they don’t actually have to be live people. For me reading Ben Franklin, reading Plato and Aristotle and all the others, reading about the various industrial leaders back during the Industrial Revolution, those things have all kind of come together in order to help give me a good background. But then, I’ve got to say, everybody that I work with brings something to the table. Even if it’s a new engineer, a new salesperson, a new marketing person, they come with information and ideas that I, in my years, haven’t had the luxury of coming across. Even talking with you before we started this broadcast started to learn a little bit, started to add a little bit to it. So there’s no one person. It’s the opportunity that everybody has provided me in order to learn from them and go forward. Danny:– That’s awesome. That’s fantastic. I love how you said just reading books and different things, but even outside of the industry or even business and organizations you mentioned, Ben Franklin, or even looking at—I loved reading about the Vanderbilts and the Rockefellers and looking at, what I think is super interesting is just transportation. It’s this idea of connecting people. That is still, you look at the railroads back in the 1800s or what have you. I think that Cornelius Vanderbilt, his big thing was taking a little boat and basically moving goods across this river, and he was able to help bridge— Justin:– Got to start somewhere, yeah. Danny:– Exactly. And then now you look at the internet, and it’s making these connections. Justin:– Making the world smaller. When you look all the way back into Socrates’s days, his world was 20, 30 miles. We move into Columbus’s day, and the world is measured in hundreds of miles. We get the transcontinental railroad, and all of a sudden for the United States the world becomes nearly 1000 miles. We go through Eisenhower; we get the interstate system. We get airplanes; we get boom. And then finally we get the internet where 8000 miles in a second is no problem. You can reach around the world to touch and communicate with somebody. So yeah, it’s all very fascinating how we got here. Danny:– I think it’s amazing. And fun fact, I think I read that Eisenhower, the reason for the interstates was actually a military thing so they could deploy, they could scramble planes faster. There is a certain amount of interstate that had to be— Justin:– Troops and everything, yeah. So literally, that was one of the things that the Germans did very well was their ability to use the Autobahn to move their light troops around the country to be able to shuffle them faster. It was a massive improvement in mobility and therefore—especially given the size of our country, putting in the interstate system ensured that if we did have to fight the last war again—let’s face it; it was built really for World War II—we could move troops from one side of the country to the other, north to south, and more importantly the logistics trains to follow them. Beans and bullets, you can’t fight a war without them, so having a way to get those to the troops was extremely important. Again, another great historical figure that has a lot to do with the reason why we function the way we do today. Danny:– Yeah, I think we’re going to have to make a new episode that we talk about America’s history of the industrial age. That would be super interesting. Let’s move on to today. There’s obviously a lot of challenges and a lot of things going on. What are you seeing right now are some of the biggest challenges? Justin:– I do not think there is a part of the logistics industry that is not suffering from a labor, materials, and backlog challenge. It’s meant great growth for us, but it’s still to the point where I don’t think there’s anybody in the logistics industry that can say we can do everything at the same speed we did three years ago. So whether it’s the backlog of ships out of the various ports that we see actually allowing us to get goods into stores and warehouses or whether it’s the labor shortage that might be in those stores and warehouses to actually execute all the way down to providing enough engineers that are well-trained in the logistics industry to apply the ever-increasing changes that customers are now realizing that they want. There’s just so much challenge with shortages right now, and it doesn’t just mean the physical labor or the trucks or, in this case now, the goods as well. But it does mean all of the people. It’s IT within our customers. It’s us onboarding engineers. It’s us having enough time to actually get things in place. It’s a huge challenge right now, and it requires some very open communication in order to ensure that frustrations don’t come to a boil. Danny:– Yeah, absolutely. No truer words have been spoken, that’s for sure. It’s been super interesting with all the changes that have happened in the evolution of that. How has the pandemic altered your future over at ProShip? Justin:– During it, like I said, it was a challenge of onboarding and communication. I think we’ve defined it as that which has made this bearable for us. I’m not going to say it’s easy. And it’s not exactly extra difficult. It’s just a lot more. That’s really what it is. On the other hand, I think going forward it has lowered the bar for logistics managers, for CTOs, for anybody in business where shipping is part of what you do to think about the fact that you truly need a comprehensive, multi-carrier solution to provide the appropriate services across the board. That really does come down to, who do you need where? You need to line-haul from one coast to another because that provides the appropriate time in transit at the appropriate cost level. Another thing that we’re seeing is there’s a ton of volatility in the market right now. We’re seeing new players coming onboard all the time. You’re talking about Roadie. Roadie, to me, isn’t new. They were in the business pre-pandemic. How many others of those have started up since 2020? Danny:– Oh, yeah. Justin:– How many of them are no longer in business? There is this new dimension, new challenge that’s going to come out as we go post-the shortage problem that we have right now once we get to the other side of that and we no longer have major capacity constraints from the nationals. Even the regionals and new start-ups have provided extra capacity, and so now we’re going to be able to get choices. With those choices there are going to be some new logistics companies that make it through and some that don’t. And I think that’s going to be the new challenge on the other side of this is actually right-sizing your logistics portfolio, making sure you’re using the right ones in the right area, and at the same time just to add another challenge to that, the consumers’ expectation of same-day, especially for high-value or perishable goods, is going to continue to increase. I’ve already got several very large retailers that, they’re looking ahead to that. They’re seeing it, and so it’s continuing to reinforce my thought process at the end of 2019 that same-day was going to be the next big thing. Little did I think any of us know what was going to happen over the last two years which, again, has accelerated different parts. Danny:– Yeah, it certainly has. It was definitely going that way, for sure, and then the gasoline just got dumped on there. Justin:– Yeah, exactly. Danny:– A lot of interesting challenges, for sure, ahead. You mentioned something. You said that with this, it allowed the ability to lower the bar a little bit. I’m curious; are you thinking of it from a sense of maybe a reduction of fear to be able to try those new things and to be able to say hey, we know we’ve been needing to do this, but we’re concerned about status quo? Now the band-aid got ripped off, and now it’s like—elaborate. Justin:– I think going from the two national carriers and the post office—the post office has never really been out of it, but let’s face it, they’re not competitive, and they’ve always been the low-cost winner. If you’re looking to rate shop, post office is always going to win. I think, to go back to your question, it is the fact that a decades-old thought process that I want to put all my eggs in one basket because that basket will provide me with the lowest cost and provide me with good enough service. I think that that has been shattered in the C-suite. I think that’s something that’s—it’s slowly been coming. At a certain size, companies diversify anyway. But I think the reality is where that might have been 100 million in logistics spend where they start to diversify, now that number will drop, and it might be as low as 20 million in logistics spend that companies start to look to diversify. I think that movement down is really one of the things that is going to be the major thing that we see. When we reflect back five years from now, we’ll see that as probably the primary change. But then there’s going to be some—like any pendulum, it’s going to swing back and forth. Right now it’s swinging to the direction of, I’ve got 20, 30 carriers. It’s going to swing back. Do I think it’s going to get back to where customers have less than five carriers? No, I don’t think so, especially with the fact that we’re not seeing a ton of same-day services come from the national carriers. You talked about Roadie and UPS. Well they’re going to keep that pretty separate. I think the biggest thing about that is going to be the next challenge that a lot of C-suites have to look at is, do I leverage a crowd-sourced solution? How are the crowd-sourced solutions going to differentiate themselves? Do I want somebody on their way home from work in jeans and a t-shirt delivering that package? I think each of the crowd-sourced solutions are going to come up with their own. Roadie has a lot more requirements to join, whereas a Postmates or a DoorDash may not. These are ones we’re actively seeing being used right now. Shipt is a whole other one. Are companies going to want to give their packages to a carrier that’s owned by Target? Do they want to give their packages to Amazon and actually have Amazon do the last-mile delivery? There is a tremendous amount of choice that didn’t exist even five years ago, so that means there is a tremendous amount of opportunity for what have been traditional logistics-execution methodologies to be changed for the better, I guess is what I’m trying to get at overall. Danny:– Yeah, absolutely. It makes a lot of sense what you’re talking about. What was the old adage? You’re only as good as your last load. Obviously with the whole resiliency piece, it’s just like we need to get stuff. Any which way, however we can, we need to get our stuff or send our stuff. I agree with you; I do see that pendulum shifting back, but it’s not going to drop, I think, too low just because everyone feels like, yeah, we’ve been burned. We’re not going to go back to that. Justin:– Let’s face it, the national carriers have the opportunity now to set their prices, to ensure that they hit the profit margins that they want. I’m sure that’s going to allow them to be able to accelerate growth, but there are thoughts out there that some of them are going to try to maintain really high quality and therefore really a less than value price. Danny:– That’s interesting. There’s been a lot of conversation about that not just in the logistics and freight space, but also even in let’s say commodities like steel. I’ve heard in a lot of other raw goods some very, very similar things. So I think it’s very interesting right now where we’re at. Cattle was another one with meat processing and particularly with beef. They’ve got some very interesting things with supply and demand. Supply is there, but the demand has been restricted for various reasons. Everyone’s talking about inflation and where things are going. I think it’s going to be very, very interesting to see what’s going to happen over the next several months, next year or two. Where are prices going to go relative to this? I don’t know. I hope that things are going to settle back down a little bit, but you’ve got to wonder. If the demand is there and things are—what’s that going to look like? I guess we will see. And kind of wrapping, Justin, this has been a really interesting conversation. I’ve really enjoyed. We’ve covered a lot of ground. My last question I want to ask is, you mentioned how you’re an avid reader. Right now, what are you reading? Justin:– Oh geesh. I am training a team, so I’m reading To Sell Is Human. Also, I always read a fiction book because it helps you sleep. I’m rereading Stephen King’s The Dead Zone. I am reading the 1950s manual on officer leadership from the US Army. Oh, there’s one more in there that I am forgetting. Oh, Getting To Yes, which is a negotiation book. Those are the books I’m reading right now in some various shape, way, or form. Danny:– That is fantastic. That is great. As we wrap up, thank you for your time. I’ll give you the last word. Do you have anything else you want to leave with our audience before we wrap? Justin:– I just want to have them all think about the fact that we are in an area of great change for the logistics world. I think that they should not only look at what’s necessary to get their packages out the door today, but make sure that they are starting to think about the plan after some of these capacity constraints go away. How are they going to simplify? Or are they going to stay very complicated? Just make sure that you look at that five-year plan, and it’s not the one you created in 2019 because if you created it in 2019, it’s not going to serve you very well. Take some time. Think about it. Be prepared for some of the changes that are going to happen as capacity catches up. Danny:– Awesome, this is great. I love it. Justin, thank you so much for spending some time with us today on the Executive Series. I really, really enjoyed our conversation. Justin:– Thank you. Danny:– All right, well that wraps up today’s IndustrialSage Executive Series with Justin Cramer from ProShip. If you’d like to learn more about their solutions—it sounds like they’ve got a lot of great ones that you might want to be looking at, especially with all the changes that have been happening and things that are going to come—go to proshipinc.com, and you can learn more about them. Hey listen, if you are not subscribed to IndustrialSage, you’re missing out on a lot of great content like this episode that we just had here with Justin Cramer from ProShip. Go ahead and get on that list, and go to IndustrialSage.com, and you can subscribe. There’s a lot of places to do that. You may be watching this from LinkedIn or maybe listening on the podcast. But go do that because there’s a lot of great content. You can learn from other leaders, learn from other organizations, what they’re doing so you can really implement some of these things or just have an idea of what’s going on in the rest of the industry. That’s all I’ve got for you today. Thank you for watching or listening. I’ll be back next week with another episode on IndustrialSage.
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| Waypoint Robotics: Jason Walker | 05 déc. 2021 | 00:51:37 | |
Jason Walker returns to discuss the philosophical and practical dilemmas of robotics, automation, and the labor shortage.
Audience Note: Shortly after filming this interview with Jason, Waypoint Robotics was acquired by Locus Robotics; and Jason Walker is now leading Locus’ efforts to develop new market opportunities following the sale. Feel free to read more about the acquisition on the Locus Robotics website. Danny: – Hello and thank you for joining me today on the IndustrialSage Executive Series. I am joined today by Jason Walker who is the CEO and co-founder of Waypoint Robotics. Jason, thank you so much for joining me today. Jason:– Yeah, great to be here. Thanks for having me. Danny:– Well I’m excited to chat with you again. I know we spoke, I don’t know, probably two years ago maybe under our—we’ve spoken many times at ProMat and then at MODEX. This is what, 2019, 2020, maybe even in 2018 as well. I can’t remember. So it’s been a minute. And then you’ve been on the show as well, but under the sales and marketing banner. But we’ve never had you on the Executive Series, so I’m excited to ask you some questions we’ve never asked before. So this will be fun and exciting. Jason:– I’m looking forward to it. I did zero preparation, so I always do best in such. Danny:– Perfect. No, we like that, honestly because you get real answers. I don’t want scripted, canned stuff. Yeah, we want the real deal. So we’re just having a conversation. For those who are unfamiliar with Waypoint, tell me a little bit about, what do you guys do? Jason:– We make autonomous mobile robots primarily for manufacturers, so small to mid-size enterprise which is, in the USA, about 90% of the economy. And the thing that’s—well there’s a bunch of unique things about Waypoint robots. But the thing that I think is the most interesting, overarching, unique thing is that we have intensely focused on ease of use. Our vision is that we can ship a robot to a customer, and the shipping and receiving clerk who unpacks that box can be the person who sets it up and gets it going and uses it on a day-to-day basis without any training. Kind of like when you buy an iPhone, it doesn’t come with an instruction book. It’s just so intuitive to set up that it guides you through it. That’s our vision, and that’s what we shoot for, and it’s what guides us through our process. That is something that I think is a big differentiator because of the accessibility it creates. Danny:– Yeah, absolutely. You’re definitely seeing—AMRs are huge right now, obviously. Moving into automation is a really big piece. And we’re going to talk a little bit more about that, but before we get there, what I want to do, this is the part of the show where I like to learn more about my guests. I want to learn more about Jason. So tell me, how did you start your career? Obviously CEO and co-founder of Waypoint Robotics, but take me back. Where and how did that start, even before the idea? Jason:– Well it’s kind of hysterical in hindsight. I got into robotics as a fallback. My Twitter handle is @iamrobotmechanic. And I’ve been some kind of mechanic my whole life, it seems. Right before I went back to college I was a racecar mechanic, and I figured I would go right back into racing as soon as I got out. And I was cherry-picking classes throughout college that would be relevant in racing. There’s no degree in racing, and it turned out that most of these classes fell under the robotics umbrella. But along the way I started building autonomous mobile robots, and I really got bit by that bug. When you bring a robot to life and teach it how to think and see it make decisions, that is something that you want more of. In my naivete, I thought, well if this racing thing doesn’t work out, I can always fall back on robotics. I’ve been fortunate to be at the right place at the right time for this nascent new industry that’s coming our way. So yeah, I had a really cool job that didn’t have anything to do with robotics right out of college and learned some incredibly valuable lessons that I’ve been able to apply to building companies and brands. Yeah, started working at iRobot, met my co-founder of Waypoint at iRobot. Co-founded a drone company with Helen Greiner after we both left iRobot and then was able to get reconnected with Patrick, my co-founder here at Waypoint to start this company. Yeah, now we’re here. Danny:– That’s really cool. That’s pretty interesting. Okay, so you wanted to go be a racecar mechanic, not a driver. So you wanted to work on engines and build them and all that good stuff. Is that correct? Jason:– Well I always wanted to be a driver, but the next best thing–– if you can’t gather up the millions and millions of dollars you need to be a driver–– is to be a mechanic. I was a mechanic before college, and I kept asking all the gurus around the shop and track, how do you know how to set the car up? How do you know this and that, And the answer was always, go back to college. Eventually that’s—I was always going to go back to college anyway. I just never got around to it for a few years. But then once I had a purpose and a reason, a specific thing I wanted, it was a lot easier to go back. My intention was that, once I got out of college, I’d be able to be a racecar engineer instead of a mechanic. Difference is probably inconsequential. You’re still turning wrenches and getting dirty and hanging out at the track. Danny:– It’s true. It’s a different kind of race, right? Jason:– Yeah. Danny:– I think that’s super interesting. Jason:– Maybe you get to sit in the trailer in the air conditioning for a few hours. Danny:– Yeah, exactly. So what type of racing did you want to—I’m just fascinated by this. I think it’s pretty cool. Jason:– Well I always have loved open-wheel racing, which is IndyCars, Formula 1. Yeah, so all the cars without fenders, basically. When I was a kid a friend of the family was a racecar driver, and he started out racing MGs and Austin-Healey Sprite, all these little, tiny racecars. Over time he graduated and ended up racing Formula Atlantic which is the very top end of the amateur class. When I was a teenager, I had the opportunity to learn how to be a racecar mechanic from Scott. That was a really lucky break. Most people never get to stand next to a Formula Atlantic, let alone have somebody teach you how to work on it. Danny:– Yeah, no kidding. From a racecar mechanic to a robotics tycoon, we’ll just say that. That’s very, very interesting. Obviously it’s a big influence. I was very curious about, it’s got to be something in your childhood that made you—we found that. So you go through, you said you went in to go to college. You wanted to learn more about this, and then you stumbled, I guess, across robotics. You’re like, wow, this is kind of interesting. This is kind of cool. What was the thing that really made you say, hmm, I think I’m going to stick with this a little bit more? What was that? Jason:– Well let’s see. At the university I went to, at Kansas State University, there’s this robotics competition that they have that coincides with open house in the spring. And there’s usually two or three different types of competitions within the overall competition. My partner Russ and I, it was just the two of us. You design, build from scratch, autonomous mobile robot, program it, et cetera. This was—dating myself severely, which is fine; who cares? Now you can go buy everything for tens of dollars that took us a semester to build from scratch. Building the sensors—and the rest of the teams had at least four, up to eight people that we were competing against. And it was just the two of us, and we ended up sweeping the whole competition, and so that was a huge victory. And the reason we were successful was because we did everything differently. We didn’t follow any guidance. There was a sumo wrestling portion of the competition, and part of the sumo competition is that each robot has a beacon, and then the other robot has a sensor to be able to look for the other robot. That’s how the robots find each other. I thought to myself, well that’s dumb. Why do I have to wait around to see that beacon if I can see the robot? And so my strategy was to look for the robot and attack the robot irrespective of where the beacon was. And so while other competitors were trying to find the beacon, scanning around for it, I was actually looking for the physical robot and attacking it immediately, and I was pushing them out of the ring before they even got turned around. That was an example where, if you read the guidance for how to approach this competition and how to set up your sensors— Danny:– That was not the right approach. Jason:– Well, I mean, it was the approach, and it was one where— Danny:– I mean, it was— Jason:– Yeah, because everybody was led in that direction, everything became very homogenized. And that left room for some rebels to come in and blow them all away. Danny:– That’s super interesting. Jason:– Yeah, and sensors—so the guidance told you how to build a whole bunch of sensors. And I give a lot of credit to my buddy Russ who found this different way of using the same sensors. There was a way to crack open the case of one of the receivers and modify the circuit board and cut traces. And you could turn a digital sensor into an analog sensor, and that was a game-changer because everybody else was using analog sensors that didn’t have any encoding in them, and they would get blinded by sunlight. Because ours was an encoded digital sensor that we had converted to analog, we could get the analog capability but the robustness of an encoded signal. That superior sensing capability made all the difference in all factors of the competition because when the sun went through the sky, it came through the windows differently, and if you were trying to navigate a maze, all the robots got blinded. They couldn’t see where they were, and we didn’t have that problem. Danny:– That’s fantastic. A whole new meaning to “blinded by the light”. I get it. Jason:– It’s a very real, current problem. Danny:– Interesting. Stupid question, but did you ever compete in Battle Bots? Jason:– No. I don’t think Battle Bots existed at the time. I’m not sure. Danny:– We need to bring Battle Bots back. Jason:– I think it’s back. Yeah, it’s back with a vengeance. The robots are getting more and more awesome. Danny:– I’m going to have to check that out. I just remember from years ago, and then—yeah. I don’t know. Jason:– Well, and I haven’t had cable for, like, a decade, so I’m not up on it either. Danny:– That’s the thing. I don’t think I’ve ever had cable. It’s all YouTube TV or whatever, which even that hasn’t been around that long. That’s pretty cool. Let’s talk about this then. I’m curious. At what point did you decide, hey, let’s go start Waypoint Robotics? And why did you make that decision, and a third question in that one question is, just explain to me the moment when you crystallized it in your head and you said, I’m going to do this, and you took that action. Jason:– Let’s see. For the last 25 years or so, there’s only been two robots that anybody had ever said, I want you to make this robot. One was a lawnmower, and the other one was a pooper scooper robot. I’m only admitting that second one now because somebody’s finally attempted it. By the time 2015 rolled around, Waypoint was a great company with a great team and money in the bank. I had just closed a deal with Motorola Solutions that included funding, and I was getting antsy. I had a great job with a great company, and it wasn’t so much of a startup anymore. That, combined with the fact that the FAA was taking forever to open up the skies, and I just felt like there was no end in sight. I got frustrated waiting around for maybe the government to— Danny:– This is with the drone company. You were saying you were working with drones or UAVs or whatever, yeah. Jason:– Exactly. So yeah, it was just—I wanted the exhilaration and the growth and the expansion of a startup again. The nothing-to-something part of the journey is gigantic. It kind of tapers off until you get into the hockey stick at which point it is a different kind of explosion. I was at a point where what I was doing, it was a cool product. It was a great team, great technology, great company. And I just felt like we didn’t have the freedom to operate because of regulations. And still at that point nobody had tried to make the pooper scooper robot, so I thought, well I’ll go start doing my homework on that and seeing if there is any interest from investors. As I was going through that process, just by dumb luck I crossed paths with my co-founder Patrick. When we started CyPhy Works, I tried to hire Patrick immediately. He wanted to live and work in New Hampshire, so I wasn’t able to lure him to our startup. But always wanted to work together again. So by dumb luck we crossed paths via email in 2015 while I was researching this other project. And long story short, he was like, I got a proposition for you. He had spun out of Segway to create a company called Stanley Innovation to build fully autonomous, fully integrated bespoke mobile robots and was doing it for—these are one-off robots for the elite labs on earth. Through that work, the vector really fell out of the, as a concept. People wanted to have a small, omnidirectional, industrial-grade mobile robot that was fully autonomous, fully integrated. As a lab robot, it was—I always said it was a Ferrari with no door handle and no steering wheel. It was a good product. It was a great team. As much as anything, just working with Patrick and the team was a huge part of why I went that way. But it was an opportunity to do another start-up with interesting technology, with a killer team, and without having to go gather up all of those resources from zero because there was a lot of things already in place. It was a great opportunity. I don’t know if this is part two or three of your question, but the next step was, how do we go to market with this technology? One of the things that I think a lot of folks in the robotics community wrestle with is, how do you reconcile your personal concerns, beliefs, social conscience with the work you do? I think that if you build weapons for the government or if you build robots, I was spending a lot of time asking myself and I always have throughout my life. Is the thing I’m doing something I feel like I should be doing? Am I proud of this? Will I regret it, et cetera? I was really trying to figure out, are robots going to be good for the world or not? I can’t stop myself. There’s easier ways to make a living. Robotics is really hard. But for those of us who do it, we’re just compelled to do it, and we can’t stop ourselves because it’s fulfilling in a really weird and wonderful way. I really needed to reconcile my philosophical questions about it. And at the same time I was looking at the market, and I was looking at the products that were out there and their capabilities. I was trying to figure out what was missing. It all suddenly came together when I realized that the robots we have are, there’s a handful of tasks that are valuable enough where you can make a robot that can do those tasks for a price that, the lines intersect. You can have an ROI as a user of the robot. Those tasks, it means there’s a very limited number of applications that they have to be set up by experts—this is in 2015. So it’s like the robots were barely good enough. They needed a lot of help from people to do a limited number of tasks. The people who could use automation the most, the small to mid-size manufacturers, the mom-and-pop machine shops, the technology was least accessible to those people because it was so expensive to set up and because their work changes constantly. They had to be able to change the setup of the robot constantly. You have a robot that needs a lot of hand-holding from an expert. Then it’s cost-prohibitive to hire an expert on staff or a contract for them to come in. And so you really need to do it yourself. Putting it all together, the thing that made sense was, if the robots need people to make them work, and if the people need robots—because this was, I think, kind of the beginning of the labor crisis. I think this is something people still don’t get in the mainstream world. It’s all we talk about in manufacturing, distribution robotics. Our customers, as long as we’ve been running Waypoint, have come to us and said, we cannot hire enough people. It doesn’t matter how much we pay. It doesn’t matter what we do. We can’t even get them to show up. Danny:– Especially now, that’s been a huge challenge over the last several months, for sure. But even before the pandemic. Jason:– Yeah, and it’s even worse now. So the labor shortage, the people who are doing that work, they really need automation to help them do it. The companies that they’re working for or within, those companies are losing a ton of critical opportunities because they can’t meet demand. They’re saying no to customers, and you can’t do that when you’re a small business. You’ve got to get that opportunity while it’s there. And so the people need robots. The small to mid-size enterprises need robots to be competitive with, if you’re an independent 3PL you need robots to be competitive with Amazon and Shopify. There was a need for the robots, and the robots needed people. There was also a need to have those two things be able to go together with the people you already have, not with an expert or taking your people and sending them to community college for two years. And so it all came together, and that’s where the ease-of-use thing came from. It’s like, okay, we’ve got this robot that, from a technological point of view, is a Ferrari, but it’s completely inaccessible to anybody but a paid team. Danny:– It’s got to be deployable, easily deployable. Jason:– Deployable by the people you have. Then it all made sense. If my robots are not displacing people, if they’re not taking work from people but instead they’re a tool that those people use to secure their own place in the future of the industry and the company and help their employer become more fiscally sound because they can capture more opportunity and growth then ultimately that creates more jobs. So you need people to fill them. It all worked together, and if instead of displacing workers, we’re in a position to engage with those workers and say, okay, you were pushing a cart for the last two years. Now you can use this robot to do that for you, and you can focus on the other 50 things that your company needs done that’s more interesting and more valuable. That was how I was able to, by considering the workforce and what’s in it for them in terms of them being a user of robot, in terms of them being a human being with value and skills and dignity and understanding their part of a bigger economy, they’re a part of a company that’s part of an industry that’s part of an economy, all of that came together when we decided to make our robots as easy and intuitive to use as an iPod or an iPhone. Danny:– That makes a lot of sense. I like the value prop. Hey, make it easy, like you said deployable by the people that you have versus, you said having to have this huge, arduous setup and training and all kinds of things. It’s interesting when you were talking about, in 2015 or 2016 when you were looking at the UAVs and drones, I remember we were looking to deploy those, that’s when you can start getting stuff on the market fairly cheaply. Before that it was really expensive, and then you were mentioning the FAA was just like, they didn’t know what to do. I remember hearing in Europe, a lot of the regulations were, they were actually doing stuff versus saying, no, you have to—whatever. I remember they had some ridiculous stuff where you actually had to have a real pilot’s license for a while before they had what was the triple three exemption and all this stuff. I remember a real big concern about Europe being, they’re going to outpace us on this because they’re already innovating. They’re going into ag. They’re going into all these different industries. Anyways, I think it was a very interesting time period with that. Jason:– Yeah, and for us it was even weirder because we were making a tethered drone that could stay in the air indefinitely. Danny:– Tethered, interesting, okay, yeah. So you have power. Jason:– There again, the ease of use. The use case here was that literally anybody could open this thing up and the user experience was so straightforward that you didn’t have to be an expert. You just set the altitude and hit go, and it would climb up and stay there. There is no piloting, and the technology it takes, whether you’re talking about Waypoint AMRs or CyPhy Works tethered drones, the technology it takes to abstract all of that highly technical controls and autopilot in the case of the UAVs or navigating and localizing in the AMRs. To make it simple is really complicated, and it’s really tough. That’s where all the value is. That’s where the gold is buried. But yeah, when you’re talking about frustration, it’s like okay, you can launch this with one button. It stays up there forever. It’s on a string, so it can’t fly away. Danny:– Safety. Jason:– We literally have it on a leash, and you’re still going to make us get a sport pilot license? Come on. Danny:– That’s really crazy. Jason:– On the other hand, everybody on the team including myself, we were all extremely appreciative of the intent of the FAA. We have very safe skies in the USA and always have. None of us want to risk that. The FAA was given a huge task and no resources. It’s like, figure out how to make this new technology just as safe as everything else has always been, and here’s zero dollars to go get it done. By the way, two years. They were between a rock and a hard place. Danny:– No, I certainly get it. As an actual pilot myself, I totally get that. There was a lot of stuff going on, a lot of concerns about, you got yahoos who—it’s great technology, but you’re taking this thing, and you’re going 2000 feet up in the air or 5000 feet up, and you have something that gets sucked up in a jet engine. Good thing they have two. Or go into a windshield or something. You have some serious problems. I know the probability is low, but still, a little scary. Anyways, but we were talking about some industry challenges where I want to get into a little bit. You mentioned a big thing, a big, huge challenge that is going on right now. It was pre-Covid as well, and it’s labor. I like how you talked about some of the concerns you were wrestling with in terms of, with what I’m doing here, what is that going to do to labor? I like how you answered that and addressed that. We hear that a good bit, they’re here to assist. It’s not like Terminator coming in, and they’re going to take all of our jobs and start killing us or whatever. Maybe down the road once we start getting some more technology. Jason:– A long way. Danny:– A long way away from that. What other challenges beyond that are you seeing for your customers right now in the industry that could be specific to Covid and just other things maybe going forward? Jason:– I think the top three are just labor. There’s this positive feedback of, there’s reduced labor to get done the work they already had to do, and then there’s increased demand for a lot of the industries that are using AMRs. Fulfillment, logistics, and manufacturing have all just seen this massive uptick at a time, it’s like more demand, less labor. And so it’s just been intense to try to figure out how to navigate that. I think that there were many, many companies. Certainly we were talking to a bunch of them who, their plans got so disrupted by the pandemic that, they knew they needed to be looking at AMRs and various types of automation. For a lot of them, their plans just got decimated. As they’ve been coming back from the pandemic, then they’ve been wanting to accelerate that. So it’s been good for the industry, but for the customers the need and the compressed timeline, they don’t have the luxury of figuring it out on their own time because they can’t function without getting enough people in. If you look at what Amazon did, if you start now and go backwards and think about, they were incredibly lucky to have made all those smart decisions. They saw very early on that automation was how that was going to go and bought a company to address that need. Even they are struggling to find enough people to get things delivered, and I can’t imagine what it would’ve looked like if they didn’t already have their own robotics company working on their behalf. For anybody who wasn’t lucky enough to have it in motion before the pandemic, I think that it’s even harder now to try to get it. Danny:– That’s a really interesting point that you bring up, how Amazon had that in place already before. I guess if we phrase it and we look at it this way, what if whenever they started, and I don’t know when they started pushing into that, but it was certainly eight years ago, six, maybe somewhere around there. Imagine if the pandemic had happened 20 years ago, 10 years ago. It was interesting seeing the whole shift and the whole pivot. With another interview we did, I think they gave us some numbers saying that they saw, their last year alone, there was a 40% increase in online sales and ecomm with fulfillment. That is a massive increase, and when you look at all the supply chain involved for that, all the way from raw goods to finished goods and everything that happens in between there, we’re talking about a massive, massive, massive lift. And oh, by the way, with labor, we were talking about this whole thing. What would’ve happened? And I have never thought about that until you brought that point up, and I thought, we would’ve been—things would’ve looked a whole lot different. Jason:– Well think about how freaked out people were about toilet paper and canned goods. Yeah, I think it would’ve looked a lot more like the movie Contagion where everything just went off the rails. We were able, most of the USA, most of the world, were able to get the things they needed to stay alive, and they didn’t have to go fight in the street for toilet paper. They could order it and have somebody else fight on their behalf which doesn’t happen. It just goes through a huge warehouse. But if we didn’t have access to all of these on-demand fulfillment, whether you’re talking about Grubhub or DoorDash or Amazon or FedEx, all of these services, these businesses, these resources that make it possible for people to live their whole life and not really have to leave the house if they don’t want to and have everything come to them, other than some post-apocalypse movie, I can’t imagine what it would’ve looked like because you really would’ve had to go out into the streets and try to find this stuff. Danny:– Yeah, that is super interesting. I haven’t thought about that at all. Imagine if this was 20 years, 15 years, whatever, beforehand—it’s interesting and kind of scary. Good point; we had these systems, and I guess the ability to be able to absorb this massive demand and this increase otherwise. It’s interesting; I remember the first time going into a warehouse that was automated. This was a long time ago, and they were picking, got the shopping carts out there. Literally it looked like a giant Walmart or whatever. Somebody’s picking a part, and the fulfillment was super slow. When they brought in an automated solution, just the speed at which they were able to fulfill was crazy. It’s interesting thinking, man, there’s no way. That would’ve been crazy. And so I guess to the flip of that is just seeing—I think demand now, the forecast of demand is that it’s just going—It’s like a hockey stick. Right now a lot of the conversations are hey, for this upcoming holiday, make sure you have all of your orders and everything in a good bit ahead of time because you got boats that are sitting out in port that can’t get in. Goods can’t get off. Jason:– Stuck sideways in a canal. Danny:– Anyways, so Jason, one of the things I wanted to ask you about is, recently—this was back in I believe July—we released a story on IndustrialSage talking about the interoperability standards that Mass Robotics was involved in. You were one of the organizations involved with it. Could you maybe tell us a little bit about what that is and why that’s such a big deal to the industry? Jason:– Yeah, the AMR interoperability standard that Mass Robotics pulled together with the collaboration of almost every robotics company out there, it was an amazing community collaborative effort. I think it’s going to be incredibly important and incredibly valuable to the customers. The things I’ve talked about before about how difficult it is to do a task with a robot and the technology, the cost of it to accomplish that task, that means that now and for a long time you’re going to have a bunch of single-ish use robots meaning that they’re a robot that’s really good at one thing or two things. Waypoint robots are amazing, but they don’t have forks. We’re not going to go scoop up a pallet. Likewise, the tuggers aren’t going to slide sideways and go up next to a piece of equipment like we are. Everybody’s tackling a different piece of the market which means there’s going to be heterogeneous fleet in facilities. To solve all the problems you’re going to need a lot of different robots from a lot of different companies, and this interoperability standard is, I think, a critical, key thing to be able to pave that way for all the robotics companies and all the customers because I think it’s really hard to—there’s a natural inclination to pull back on making a decision to see who the big winners are going to be. There’s not going to be one big winner. There’s going to be a bunch of companies solving a bunch of different problems. In this interoperability standard, everybody has to contribute to moving the entire industry forward, and it gives customers a chance to buy robots and know that they’re going to be able to work with each other and work with other systems going forward. So we’re excited about it. We’re really glad to be a part of it. Our robots will have that standard included in them. I’m just really proud of the community for doing it, and I think it’s going to be so good for the industry. Danny:– Well I was super excited to hear about that. I was waiting for somebody to release or do something there because it certainly is a big challenge in the industry when you have so many different technologies, different robotics companies, and I think sometimes people tend to think, oh, well I already have this robot or that one or whatever. The reality of it is, as great as they are, you have a very specific use case or set of use cases for it. It’s not uncommon to have a whole fleet of different AMRs from different companies. The ability just for them to be able to—it kind of goes back to the core of what you were talking about is being able to help to deploy this easily and quickly with people that you have there if everyone’s building this on a standard platform, then you can have a little bit more of that plug-and-play capability. I know it’s a little bit more complicated than that, but in general terms, it’s a lot easier than trying to connect all of these disparate systems. Jason:– Yeah, absolutely right. Danny:– My last question, I like to ask people on this, and that is obviously with all the changes going on with Covid, and even before that, what are you doing as a leader of your organization to really stay at the top of your game? Jason:– The top of my game? Danny:– Top of your game. Jason:– Let’s see. I think—man, I don’t know. We were talking about it earlier; it’s been a weird summer so far. I’m kind of knocked out of my natural rhythm in a bunch of ways. I think that trying to find a way to connect with friends and family after having not been able to for a year, I think that’s been something that has just been really good for everybody to reconnect with humanity. We hosted an engagement party for family friends who are getting married soon. All of the timing of that happened so that we could have a nice, outdoor party and it was just like an explosion of joy that nobody had been able to experience for a year. That was great. I don’t know; balance for me is, I have a very, very, very long duty cycle on balance. I’ll work really hard for many years and then take a year off, kind of get recentered. I don’t know if I’m in robotics because I’m like that or if I’m like that because I’m in robotics, but it is such a long haul. It takes a special kind of crazy to do robotics because it takes so long. It takes so many resources. You have to have a capacity for delayed gratification that is unlike probably basic scientists are the—and not basic in the teenage terms—the scientists who do basic research, that’s probably the best thing I can think of that’s comparable where you just keep grinding. You have a vision, and you know it’s way out there. You know it’s going to take years to get to it, not months. You have to learn to celebrate the small accomplishments, and then you have to remember to celebrate the huge accomplishments. Sometimes we have a product or a feature, a capability that’s been on our roadmap forever, and then all of a sudden we get it done; we get it deployed. We get great feedback from customers. Maybe we’re talking about it in our team meeting. It hit me. It’s like, wait a minute guys. Do you realize the first time we talked about this was 2017, and we’ve been either working on it a little bit or waiting to do it, and now we’ve done it? And it’s as amazing as we thought it was. It’s like, let’s take a moment and high-five each other. That lasts about 10 seconds, and then you’re back to the next goal. Danny:– You’re moving onto the next thing. You’re playing the long game, I think is what you’re saying. You’ve got to be in the long game. It’s funny that you mention about the celebrating piece. This is the second time I’ve heard that today. Talking with another executive, they talked about that being a big part of imparting some wisdom on other leaders and leadership is really celebrating those small victories, but making sure that you do that. I think a lot of people are guilty, present company included, in doing that. Hey, we did this. This was amazing. Okay, great, alright, boom. Now we’ve got to go to the next thing. It’s important to do that. And I love your answer about the whole, even now, especially after the last year being able to reconnect, just having that face-to-face, real in-person interaction. Unfortunately Zoom can’t do it for you as well as in person, and it’s important. Jason:– Yeah, and I’ve got to tell you. One of the things that, when you’re at a startup, especially a robotics startup where everything is so challenging, you work so hard, and you toil in silence. Nobody sees what you’re doing, and then one of the things that has always been really valuable about trade shows is that it’s an opportunity for your team to go out and see the look on customers’ faces when you tell them what you’ve done. For those of us who are on the phone with customers all the time, you realize how important that feature, that function, that capability is, and you know what it means to them, and you can anticipate the value of it. But for the rest of the team who are just grinding and they don’t get that constant feedback from customers about the importance in the work they’re doing, when you go to a tradeshow and you work so hard to do your day job, and then you work so hard to get to the show and really put on—you want to share your latest, best news. You want to have everything look as good as it can. You want to put on a good show. And that takes so much energy. And then the show starts, and you’re exhausted from all the prep. And you’ve got to have more energy to give to the people who show up to your booth. The thing that’s amazing is after all of that, you end up more energized at the end of the day. You might be physically tired, but you can see it on your teammates’ faces that it’s like, wow. Danny:– It’s validating. Jason:– We’re doing something special. Danny:– We’re doing cool stuff. Jason:– Then you bring it home, and it motivates you to keep walking that long walk in developing these products that take forever. I have really noticed the absence of that loop closure, of that ability for our team to directly interact with the market, with the customers, with the people who need this stuff and really first-hand see the look on their face when it lights up and they think, oh, you solved that problem. You did that. I can deploy it how fast? That’s something that—we’re packing up for a tradeshow. We’ll see how good it goes. Yeah, it’s—I don’t know, man. That’s tough. Trying to recreate that is difficult, and I’m sure I don’t do as good a job as I’d like to, but I try to remember that that feedback of enthusiasm is really important and try to communicate it to the team. There’s no substitute for the customers doing it with non-verbal communication. They can’t hide their excitement. Danny:– You’re right. Yeah, well hopefully that will be resolved here shortly. I hope to see you at MODEX 2022. Jason:– We’re planning on it. Danny:– I almost said 2020, but no, 2022 in Atlanta. That would be great. Jason, listen, I just really appreciate the time that you’ve spent with us today really sharing your story and your insights and how you started Waypoint, how it came to be and just your thoughts on the industry and where it’s going and challenges and all this good stuff. I really appreciate it. So for those who might want to learn more about you guys, they can go to waypointrobotics.com; is that correct? Jason:– That’s exactly right. And we are @waypointrobo on all the social stuff. Danny:– Perfect. Alright, well excellent. Well everyone, you can go to the website or go check them out on social. Jason, thank you so much again for your time. Jason:– Thank you. It’s great to be here. Always is. Danny:– Awesome. Alright, well that wraps today’s IndustrialSage Executive Series interview with Jason Walker who is the CEO and co-founder of Waypoint Robotics. If you would like to learn more about them, you can go to waypointrobotics.com or check them out on their social channels. We’ll have the links in the show notes below. Listen, if you’re not subscribed to the Executive Series, I highly recommend you go do that. How can you do that, you ask? Well, you can go to IndustrialSage.com, and you can subscribe there. And you want to do that because if you’re not, you’re missing out on all this great content like this interview that we just did here with Jason Walker with Waypoint and many others. So that’s all I’ve got for you today. Thank you so much for watching or listening. I’ll be back next week with another episode on IndustrialSage.
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| MCJ Supply Chain Solutions: Kai Beckhaus | 22 nov. 2021 | 00:26:54 | |
Kai Beckhaus of MCJ Supply Chain Solutions returns to share his thoughts on remote work, and missed opportunities for companies to adopt automation in their fleets.
Danny: – Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Kai Beckhaus who is the president of MCJ Supply Chain Solutions all the way down in Houston, Texas. Kai, thank you so much for joining me again. This is your second time on. Kai:– Thanks for having me, Danny. Good to see you again. Danny:– Great seeing you. So obviously a lot of things have changed since the last time that we spoke. And I think we’re going to get into that in this episode, but before we do that, for those who maybe did not watch the first episode and don’t know who Kai is or MCJ, tell us who you are and what you do. Kai:– Sure. Yeah, my name is Kai Beckhaus. I’ve worked in the material handling industry basically all of my work life and was an executive at Jungheinrich which is one of the two big material handling equipment companies that are the parent organization of MCJ Supply Chain Solutions now. Our mission is to bring Jungheinrich automated forklifts, trucks, AGVs, and all of the automation technology they have to the North American market US, Canada, and Mexico. And the second material handling partner that is a joint venture partner here for us is Mitsubishi Logisnext Americas. And with that setup, we have a good basement for all of the spare parts, the mechanical service, so that we can focus really on the system, the software integration and bringing those material handling automation projects to life to support our customers with their supply chains. Danny:– Fantastic. Last time we spoke—and I’m trying to remember. I believe it was April or May— Kai:– Right at the start of the pandemic, if I recall correctly. We were just going into lockdowns and the economy’s down. Danny:– So approximately five years ago; at least it feels like it was five years ago. So March-ish or April. Obviously a lot has changed. When we spoke, at that point there was a lot of unknown. There’s still a lot of unknowns I feel like, but there were certainly significantly more unknowns at that point. Now we know a few things. A lot of pivots have been made. A lot of things have happened. How has MCJ changed since that time? Kai:– Obviously we spoke at the beginning of the pandemic, so there hasn’t been a lot of change. All of us had to, customers and ourselves, really adapt to this pandemic and how to behave in it. It has been a long time since the last pandemic occurred, so none of us had that experience in our work lives where we had to cater for employee safety, obviously, and go into an economic downturn for the first months. Then picking back up and seeing a lot more automation demand because people realized automation is the thing that helps even when workers can’t come in when there is lockdowns. Supply chain resilience is very important to get all of the essential goods out to everyone. Danny:– Perfect. You mentioned obviously that you’ve had a lot of changes. You mentioned there’s new products being rolled out. You mentioned that there is an increased, higher demand. What does the future look like for you? How does it alter your future? Kai:– I believe when you look at different industries, the automation, when there is big manufacturing like car manufacturing, robots have been in that area for very long. There have also been AGVs since the 60s, but the degree of how many automation projects are deployed is just so much smaller than in other spaces. And I think this pandemic was an accelerator for that. There’s a little over, let’s say, 1.1, 1.2 million forklifts sold every year over the world, and that ratio of automation, whether it’s AMRs or AGVs is just so slow right now and small right now. So it’s going to grow significantly, and the pandemic was a boost to that. So I would say it is a permanent thing that automation will be more important. And a lot of clients whenever they have a bigger fleet of forklifts to buy will consider, is this something where automation makes even more sense than investing in operator equipment where we need a human workforce to run these fleets through the supply chain processes that are required. So I think that’s going to be a permanent change for the whole industry and adapting to integrating those solutions to existing environments. That is one part where with the logistics interface, the middleware software that we utilize and it’s becoming more and more important to have quick implementation times, seamless integration into the system because you don’t want different islands that don’t work with each other. Also the collaborative factor, very important whether it’s AMR or AGV, this is typically a lot of human interaction, especially when you have free-ranging AGVs there. So it’s going to be very important to have all of that collaborativeness in the products, and that’s going to continue. So we’ll see a lot of development and growth in the material handling, automation sector over the next years to come. Danny:– Absolutely, that makes a lot of sense. Now relative to MCJ, what were some of the pivots that you had to make to adjust? This could be pivots that you had to make internally from a way of working as well to maybe pivots to business model or products? Kai:– Well internally, obviously, travel was restricted in the first pandemic. So what we did is typically we would in a sales project and really walk the facility with the client to do two things: to really check all of the environments or constraints, see where is special things we need to cater an AGV solution and also to consult, what’s the best processes? Maybe the customer has something in mind, and with their expertise walking that site, we recommend, we might want to add that, or let’s be careful here. So all of that had to go virtual. It worked out well. We were a little nervous at the beginning. Hey, will we catch everything that we would used to? But our clients have been really great. They are working with us. We’re driving the same amount of time, four hours on site, and just walking the site on a Zoom or Teams call, and that really worked out well. So that’s an adjustment where the new technology supported us a lot. With all of these products, Zoom and Teams… the pandemic, you could say, came right at the correct time. Imagine this would have happened 10 or 20 years ago where all of this digital technology that we use, video conferences and so on, wouldn’t have been that far developed as they are now. Danny:– So doing these virtual site inspections, if you will, where you said you’re doing them through Zoom or Teams, were people walking through with an iPhone or something saying here’s this and here’s that, and you were able to replicate that by doing that. Kai:– Correct, correct. We had a clear layout where we discussed and we could talk. There was really a good dialog on that so that we said, okay, let’s focus on that. Can you please zoom in a little bit here? Go closer to that. Describe that process to us, all of the handover interaction points so that we make sure we deliver the same perfectly customized solution that fits that automation demand of the client as we would have done with an onsite visit. Danny:– That’s obviously a big change and a big challenge from a sales perspective. Do you anticipate, is that going to remain? Obviously virtual experiences don’t 100% replicate something that’s done in person. But in some cases, we find that it’s a little bit more efficient. Reduce travel time and whatnot. Are you seeing or expecting that that may be something that you’ll keep or go back or a mix of the two? Kai:– I think it will be, as with the internal workflows, likely it’s going to be a hybrid mode. I think a lot of business interactions, B2B, understand that it might not be that efficient to jump on a plane, have a full day or even two-day trip for a two-hour meeting. So I think a lot of those will be kept on a video conference where it’s a professional setup and you can discuss topics, clear out some contract language, let’s say, things like that. But the longer meetings when it comes to a site survey, when it comes to the implementation for being onsite and really teaching in-person rather than remote, all of those I think will resume to normal. It’s always good to have that personal relationship as well. To my experience it has always been a lot easier to do the very good and deep connection even on a virtual call once you have met prior to that in person at least once. So when you know a person, then it’s very good to reconnect on Teams and Zoom, but establishing new business merely via video conference can be a challenge. There’s a lot of areas where this works too, but I think it will be a hybrid that there is some travel to meet in person and then follow-ups, and especially those shorter meetings being diverted to having video conferences. Danny:– Yeah, I agree. I think we’re seeing that a lot across the board as well. Now you mentioned, too, how you had some new products that you had developed. Were these in response to the pandemic, or is it something that you already had on the roadmap? Kai:– Yes and no. It’s really both. We had a few facelifts to our products. The stacker and also the tugger model, as a response to the pandemic, it was also the enhancement of auto-hitching and unhitching so that it’s even more fluid process there when you pull tuggers to seamlessly connect the trains that they carry and unhitch as well. In general on the roadmap we had also to go to the biggest form of AGVs that we have in our portfolio which is the automatic VNA truck, very narrow aisle, high-density storage, and that area is one area where it’s really important to go for automation when you want to have a high throughput, 24/7 operation very often in that area and having this storage capacity at the highest. And a lot of customers that opt to investigate into that solution really see an AGV VNA application as an alternative to an ASR, automatic storage and retrieval system. So that is something which we had on the roadmap to add and bring into the market. Now working on the first project here, so that’s a good addition to the AGV portfolio to really automate the full process, full material handling of clients and being able to cater to all of that demand. Danny:– Absolutely. Well it sounds like it certainly helped to expedite things a little bit more to be able to bring those in there. And it sounds like those features from a product standpoint really are more permanent. Kai:– Correct, absolutely. And the good thing is, a lot of customers really want to investigate automation and what a learning for us was to give the customers the flexibility. So let me give that example in which we’re back to that VNA. The Jungheinrich product portfolio is designed that it’s the same truck whether it’s completely manually operated, whether you go halfway with the automation and go with the semi-automation where there’s still an operator on board, but all of that driving from the truck is automated already. So it’s just giving full-throttle speed, and the truck stops at the correct destination. And then the third level which can be also extended on the existing manual equipment is the full automation then, and that gives the ease so that clients say, okay, I want to start. I have manual trucks. I want to go with the semi-automation first, and in half a year once we come out of the pandemic, we have everything sorted, I definitely want to be prepared for the next run, so I’ll upgrade to full automation then. And that is something where we see this interaction, collaborativeness, that also an AGV might be operated in times. Clients really like to see the ability to hop on the vehicle and drive it manually there too. So all of that flexibility I think is even more important now, being prepared. You don’t know what the times are going to be. Are we going to go into an inflation now, some of these economists say. So people want to be flexible, and an AGV solution that can also cater for that is very important to really adapt to whatever requirements our clients have. Danny:– Yeah, that makes a lot of sense, as you mentioned, sort of future-proofing. It sounds like you’re able to give people a stair-stepped approach. I really like the flexibility piece because we’re hearing a lot of stories of a lot of companies having to switch up their supply chains and the way that you might import goods, whether it’s raw or finished. All that was changing. So with your existing infrastructure there, if it’s more permanent, that was a little bit more challenging versus saying, hey, we really needed something that was more an AGV here, but now we need to go a little bit more manual for the moment, and then we can switch. That sounds like a really great solution to bring adaptability and flexibility. Certainly as you mentioned for the future, who the heck knows? Hopefully we don’t go through something like this again. But inflation and all these great, wonderful things that nobody has any idea what’s actually coming down the pike. Kai:– Correct, correct. And I think it’s the same for the workforce. Flexibility is really important for yourself as well. It’s a lot different now to manage a business. You need to be flexible, be able to react fast, and I think we all proved that at the beginning of the pandemic. Everyone had to install new protocols of how to deal with this and now change it. Also for the hybrid work mode, I think a lot of employees, that’s something that will change. Every company is looking at having more flexibility. I’m not a fan of the extreme, so I would not say 100% home office, we work remotely, is really good for a company. But also it’s not being 100% in the office. It’s really, what’s best for the day? Is there interaction? Is there workshops? Is there brainstorming? That just works better in person, but when there is really individual work, everyone can be concentrated and can save the commutes to any office. So I think that is something that will definitely stay from the pandemic that there is more flexibility offered by companies but also demanded by the workforce. Danny:– Sure, yeah, absolutely. We’re definitely seeing that right now. One of the things, kind of a fun question I like asking is, if you had a magic wand—I’m giving you a magic wand right now—what are one of the challenges in the industry that you would want to see solved or taken advantage of—you could flip it and say, hey, there’s an opportunity. What would that be? And one caveat to your answer: it can’t be, I wish Covid would go away or whatever. Kai:– The next crisis is going to come, so we have to cater for that. Good question, Danny. Let me think. I think one thing that I would really wish with a magic wand to change is an openness on the client side. I think a lot of customers or material handling equipment users are just used to, they have forklift fleets. At some of those it would be really a perfect use case for automation. But they just don’t consider automation. I think to some people out there, automation is still something—we talked about it earlier—the car manufacturing OEMs, whatever, so really those robotic arms manufacturing cars. But automation has advanced in so many areas, so that we have a higher pace of replacing manually forklifts with automation by just talking about it. And I think this consultative approach, a lot of clients value that. And the second thing that goes with that is, often it is advisable for clients to really be open and just say, hey, I have this operation manually. What would you recommend? Do you offer recommendations for automation? How would that look like? But instead some people ask, I have five forklifts of Type A, so what is your replacement of Type A automated version? Maybe Type B would even be better for that use case in the automatic version. So this openness to being consulted, but raising that thought, yes, automation might help me in my situation, and I’ll enquire about it, and I’m open to talk about it. I think that is something that would help the users, all of these supply chain operations out there as well as vendors as MCJ and Jungheinrich brand here that we represent about our competitors as well to really see more of that interest in the automation and adapting to that and talking about it because there is a lot of demand and a lot of potential for our industry out there as the ratio, when you compare more normal forklift trucks to AGVs is just so small. It’s around a percent or two at max I would say when you look at the worldwide ratios there. Danny:– Absolutely. Well great answer to that question, if only we could be more open to these solutions and say hey, this is a viable solution to solve a lot of challenges that we see, I see, you see and being able to facilitate those discussions and look at how these solutions in your specific use case are viable. So yeah, great answer. My last question is another fun one I like. What are you doing as a leader to really stay at the top of your game leading your organization? You said you’re a little bit of a startup here in the US. What are you doing? Kai:– That’s a good question. I think it comes back to this flexibility we have talked about. To stay flexible, it’s important to have discussions. I would say two things really as an answer. The one thing is obviously I want to read things. I like to read books from other businesspersons. Last thing I read was from Tilman Fertitta who is owner of the local Houston Rockets basketball team here and also a lot of restaurants and so on, so that is a book a little bit more from the B2C side, but a lot of good ideas he mentioned there, so I enjoyed reading that as well as just, was a weekly newspaper. I like to stay informed on how businesses develop in Europe as well, so I read one European Newsweek. They have Business Newsweek as well. But even more importantly than reading is to me really the connections and talking to other people and having an open mind to really get feedback and ask for advice. I think that is something that changed in our generation, Danny, to maybe the CEO generation that is retiring now where it is less the CEO needs to be the strong person that never asks anyone for advice. It would be a weakness, and I think more in our generation it is, you have peer networks. You have mentoring relationships a lot more. I was fortunate to have really good bosses throughout my career and even in the position now with a board of managers and family and friends to really discuss certain business topics and get ideas and adapt those to really see what’s the best fit for me and get ideas and think about the right strategic implementations for your own situation, their own business at this point in time. And then also paying it forward and supporting younger folks with being a mentor there. So I think that is something where we are in a really good setup these days with a lot of networks and maybe social media and video conferencing. They have helped a lot too. It’s a different kind of networking than it used to be in the generation of managers that is retiring now is my personal belief there. Danny:– Yeah, I love it. Reading, love it. I have to check out the book that you were talking about to read that. But then also, I love how you mentioned that you ask advice. That is a big shift from maybe the outgoing CEOs that have been established. You’re right. I think that would have been perceived or was traditionally perceived as a weakness versus saying hey, let’s look and see. Maybe there’s some great ideas that somebody sitting in the corner that is introverted and have some amazing idea or something that pops up. I didn’t even see that. Somebody who’s going to be a little bit more closed, and you engage and open. I love it. Kai:– And the good thing is, you don’t have to take all of it. There is advice I like to listen to everything. It doesn’t mean you adapt everything. You still think about it and can really cherry-pick for yourself. But all of those ideas and from discussions, I think that’s a very good way to really get ideas as to say some persons that would not raise their voice if not asked. I think that’s very, very important to keep in sync and keep up to date, learn a lot from others and driving business forward. The world will remain flexible. Flexibility will be very important in the workspace, but also especially for those people managing those companies. So I think that’s—hopefully, I totally agree to you, we don’t get another pandemic anytime soon. That was enough, too real for all of us. But the next challenge will be around the corner, and there’s so many things like cyber security that has been a topic now which, ten years ago that was a totally different level. So there’s many different areas where it’s very important to remain flexible and learn and adapt to be able to be prepared. And when certain situations occur, being empowered to react quickly and thoroughly. Danny:– Absolutely. Well Kai, listen. I’ve really enjoyed our conversation. We’ve unpacked a lot of different things. I’ve loved hearing your feedback, hearing your answers to some of these questions and learning about how MCJ has pivoted, what you’ve learned, different things that are going to stay permanent. I like this wholesale hybrid model going—we think, yeah we got some virtual, but then in-person’s going to come back and just solving challenges in the industry and what you see going forward. I really appreciate your insights, and I know that every one of our subscribers are going to love it as well. So for those who want to learn more about you guys can go to mcj.team. Is that correct? Did I get that right? Kai:– Correct, that’s our URL where we have all of the product portfolio and a link to the Jungheinrich brand of automation equipment that we represent and give an overview of what we do. Danny:– Perfect. Well Kai, again thanks so much for your time. Kai:– Thanks, Danny. Danny:– Maybe we’ll do this next year. We’ll just see— Kai:– I’d love to come back. Sure, thanks. Danny:– …what is happening because I’m sure a lot’s going to happen over the next year. And there’ll be all kinds of things. Thanks again. Kai:– Thank you too. Danny:– Alright, well that wraps up today’s IndustrialSage Executive Series with Kai Beckhaus who is the president of MCJ Supply Chain Solutions. You can go to mcj.team to go check them out. Thank you for watching or listening. Listen, if you are not subscribed, go to IndustrialSage.com if you’re watching this on social media or listening and you’re not on our channel right now. Go to our website, and you need to subscribe because you’re missing out on great content like what you just heard here from Kai. So you can learn from other professionals in the industry, see what they’re doing and learn. So thank you for watching. Thank you for listening. And I’ll be back next week with another episode on IndustrialSage.
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| Brennan Industries: John Joyce | 07 nov. 2021 | 00:28:08 | |
John Joyce of Brennan Industries returns to share how remote work and logistics pileups have led to both issues as well as improvements.
Danny: – Well hello and welcome to today’s Executive Series on IndustrialSage. I am joined by John Joyce who is the global marketing director at Brennan Industries. John, thank you so much for joining me today on the Executive Series. John:– Glad to be here, Danny. Thanks for having me. Danny:– Well John, I’m excited to have you again for the second time because we spoke—gosh, I can’t remember when now. It’s been a minute. It was a while ago. It was before this crazy thing called Covid happened, so I imagine things have changed. We talked a lot about marketing last time, some tactics and different things that you guys were doing, and that was pretty cool. Today, before we get into today’s topic and discussion, for those who aren’t familiar with Brennan, if you could just give me a high-level on who you guys are and what you do. John:– Sure. Brennan Industries is a manufacturer of hydraulic components, specifically hydraulic fittings and adapters but also some accessory components. And we are a multi-national company, so we manufacture those things in the US, in Canada, in the UK, and in Asia and have a worldwide distribution network as well. Danny:– Okay, that’s great. Since we last spoke, and again, it’s been a minute, how have things changed over there for you guys? John:– Yeah, so I think the same way things have changed for a lot of businesses is an increasing reliance on remote, technologies that enable remote, remote management and leadership, and also other technologies that enable remote sales and a shift away from a traditional sales model which is still super popular in the world of manufacturing. It’s kind of like an old-school industrial world, shifting away from that model towards a more social selling and marketing-heavy. Marketing’s doing more lifting, I think, than it used to do in the past because of the inability of people to meet as easily and freely as they used to in the past. Danny:– Yeah, so it’s definitely made things quite a bit of a challenge. Obviously there’s been a lot of changes. You mentioned trying to reach customer, obviously, is kind of a big one. How has it really altered your future? Some of these things are, maybe you can say a blip on the radar, temporary. But what do you think those things are that will remain permanent? John:– Well I think actually a lot of the changes that have happened aren’t going to roll back. I don’t think things are going to roll back to the way they were before on most of the levels. We talked about increasing reliance on marketing. That was one of the changes and moving away from the face-to-face sales. That’s going to continue. I also think the importance of data and the immediate access to data through systems, kind of like ecommerce but streamlining that whole concept of direct-connect, direct-sharing of data has just gotten more and more important because it’s eliminating the human element which, we’ve been on a trajectory for that for forever, from really switching from face-to-face business to the telephone to the fax to the email to ecommerce. But Covid just pushed it all the way to the edge of almost touchless as much as possible. And I don’t think that’s going to go back, I think because we were going that way already. And not only in commerce, but then you also have that in leadership and management. Building and training and managing your team has also been shoved entirely over into the virtual space. So we’ve spent a lot of time developing training materials, building infrastructure for remote leadership and remote team management. And all of those things have improved the company, so I don’t see them just vanishing. I think all those changes are permanent. But it’s been—another topic is logistics. Logistics has been a nightmare since Covid, and hopefully some of that will change because it’s actually been so—the pricing and the availability of things and the ability to move things around has been horrible, and there’s been a lot of scrambling in that area. But again, having a multi-national footprint, having the ability to manufacture your parts in multiple geographies and move them around gives you a lot of opportunities for moving them around differently. That’s even helped through the logistical challenges. So I think all those challenges are going to stick, or those improvements. Danny:– Yeah, absolutely. Well, certainly. Obviously, there’s a lot of, with the cons come the pros. I’m curious; beforehand, was Brennan fairly virtual? What did the makeup look like? John:– No, not very virtual. The marketing department’s actually one of the most—sales and marketing are one of the most virtual. A lot of the sales guys are already scattered all over the place, and they report virtually. Then the marketing team, just due to the nature of marketing and the people who do it, you tend to get a lot of people who have worked as freelancers or are used to that kind of, having equipment and set up at home remote work. It actually works well for remote because everything’s digital, all the assets. Our team became more remote during this time, but Brennan as a whole I think hasn’t been very remote at all. That has been kind of a cultural challenge for Brennan, let’s just say. We’ve embraced it, but it’s also not been super easy. Danny:– Well yeah, and that seems to be a similar and familiar story with a lot of manufacturers. It is a cultural challenge. It’s a mind shift. Paradigm shift, really, but then you also have a whole other element. Obviously if you were a manufacturer and you are manufacturing things, there’s obviously elements that are, you can’t do virtually. But there’s hybrids, and there’s ways of being able to make that happen. I know that’s been difficult. What about trade shows and things like that? Was that something that Brennan took—did you guys do those before a lot? What does that look like? John:– In 2019 I think we did 19 or 20 shows. Some of them huge, and some of them quite small. In the last couple of years, we’ve done next to zero. I think just this year, we’ve done a couple. But even then there’s been a lot of resistance in wanting to do the shows which has been interesting. The people holding the shows really want to get the shows geared back up, but there’s a bit of a resistance of, eh, we’re not so sure we want to do that or anybody’s going to come. Or if the performance of the show is half of what it normally is, is it going to be worth it? But we have experimented and done three or four. I think there’s four on the schedule for this year. But I think it’s still questionable whether those shows are worth it yet again because of, everybody’s in the same boat. The nice thing is, everybody’s going through this, if that’s nice. It’s not like we’re the only ones going through these challenges. Your competitors are going through them. Your customers are going through it. So we’re all in this together, and I think we’ve all stepped back and said, okay, how necessary is some of this stuff? And it gives you the opportunity to rethink things like, maybe you’ve been doing them every year for years, or every two years for forever and you’re like, eh, do we really need to keep doing that? Or is this really providing value? I think that’s a plus side to the challenges again. Danny:– Sure, yeah. That makes a lot of sense. If I heard you correctly, I know you said you have some on the schedule. But have you already attended some so far? How have those been? I’m just curious. I’ve been hearing different things. John:– Yeah, the general reaction has been underwhelming. People come back; I’ve heard extremely underwhelming things like, that was horrible to eh, wasn’t the greatest. We have one that’s still coming up this year, the last one for this year, and I’m hoping that that proves to be a little better because the first ones were earlier in the year. As things have progressed this year I think it’s confusing because there’s, is it getting better? Is it not getting better? Is it getting better? So I’m hoping it is getting better and that this show coming up in a few weeks will be good. So far they’ve been pretty underwhelming. Danny:– Yeah, it’s interesting. We’ll see what happens with that. From what we’ve heard, very similar experiences is that just the attendance that you thought was going to be a lot higher than it actually was. And I’m sure that there’s several different reasons for that. Certainly if they’re international shows versus more domestic. There’s a lot at play certainly going forward in the fall as right now as the whole variant stuff in the US anyways is kind of going nuts. I’m really curious about some of these big ones that are going to be rolling up here in the next four to six weeks, what’s going to happen, if they will keep going, if they won’t. Certainly the attendance has got to be hampered, but who knows? It’s anyone’s guess. I kind of hope, personally, that we’re going to get back, better, and that we can take that variable off the table. Then we’ll see what’s left. You may have companies that say, we’re out of this game, or what. I’m very curious to see what’s going to happen there. I think it’s anyone’s guess. John:– Yeah, speaking frankly, I’ve always had a skeptical view towards most of the events, especially the bigger ones that cost a million dollars, basically, to participate at the scale that we need to participate. It’s like, are these really worth it? Are they really producing? Or is there some better way to do it? And I do think not having them hasn’t—I don’t feel like it’s been a major blow, like oh, wow, we missed 20 shows times two years. That’s 40 shows, and wow, you could really feel that. Honestly, it hasn’t been that. It has been pretty fine. So it just seems like right now last month was one of our best months we’ve ever had. I think it might have been the best month we’ve ever had. It’s kind of like business is cranking, and so just as a marketing guy, just really am questioning the ROI on these things. I think the break in the tradition of going to them is actually good because like I said before, it can really give you an opportunity to rethink. Do we need to pick this back up? We quit doing it; let’s just leave it where it was. Like a bad habit, we’ll just walk away from it. Danny:– Yeah, it’s interesting. Like I said, we’ll see what happens. On that, as we’re prognosticating a little bit, the future, the future of your industry, what does that look like for you? John:– Future of our industry, so we’re facing some challenges, that’s for sure, with the progress of technology and electrification of equipment. Hydraulics is not new technology, let’s just say that. There is a push towards anything new and shiny, so you see the threat of electrification. You start seeing that more and more, but what’s been interesting at least so far to see play out is the combination of electrification with hydraulics because of the inability of electrification to truly replace hydraulics in every application just due to, each method has its own limitations. So you’re starting to see digital pumps and things like that instead of actuators replacing hydraulic components, you just see more like a digitization of hydraulic components to give them some element of the control of electronics and things like that. That’s I think a direction that the industry is going, which I think is interesting. Seems scarier than I think it’s going to be because of the way the innovation has been changing and still people are embracing hydraulics just because of the ability of it to cheaply and easily transfer power in a way that other modes of transferring power just can’t do. Then for us as a company, I think the aerospace market is always an interesting market. You see tons of publicity recently with various billionaires blasting themselves off into space, but that market is more and more a growing market. Aerospace is a huge market, so of course it’s a growing market. But you see even space travel and everything related to that becoming more accessible to businesses. That was just the thing of governments, and now you have private businesses figuring out ways to do things like that. Some of those businesses are our customers, so that’s exciting to see. We say, more power to that whole industry and everything they’re trying to do because hydraulics is playing a role in it, and so we’re excited about that. Danny:– Yeah, that’s definitely super cool, especially about aerospace and you’re seeing all the privatization of that whole space exploration. That’s obviously super exciting. One thing I’d ask then, if I gave you a magic wand and I said hey, if there’s any challenge you see that you could solve right now, what would it be? Besides Covid. John:– For me personally, it would be technical integration, seamless integration. One of the things we’re really trying to push for—and what I mean is integration of business systems for the purpose of real-time data and real-time commerce, just fully integrated through the whole chain of distribution. I think there’s massive potential for that to solve a lot of bottlenecks and a lot of problems. And it’s not a new thing. It’s been going on, but it just needs to really come into its fullness which it has not. It’s so spotty and done in half-measurements, let’s say. I think that is something that I would like to see happen, especially at Brennan. And I’ve actually been pushing on this pretty hard. But in all industry, just to streamline all of the business that happens between industrial manufacturers and their distributors to speed up that process. You still have distributors today ordering by fax which is, it’s just an example of the state of how business is in industrial distribution sites. It needs to catch up with the rest of the world, and I think that that would make a massive difference if industrial business was happening at the speed of a business like a huge retail operation would, like a Walmart or something like that. And we’re getting there, and we’re trying, on our side Brennan is pushing to adopt and develop. We’ve developed our own technologies in that regard to bridge the gap between our distribution network which is huge—we have over 6000 distributors, maybe 7000 by now—and bridge that gap technologically between them and us to make that relationship seamless and almost to remove us out of the middle of the relationship because in my opinion, that is the ultimate customer experience would be that it’s all about the customer. You’re literally inside their head. Their data is inside your head so that they don’t even really need you, more or less, except you’re hoping, in my personal opinion, the end result would be, we’re basically invisible. Everything is just happening smoothly and seamlessly and automatically, and they never have to think about us. I think we need to get to that point. That would be my magic wand, let’s make that happen. Danny:– That’s a great magic wand answer right there. The customer experience, and it’s interesting. You mentioned retail. A lot of this is driven from our consumer behavior, our expectations. You and I go onto Amazon or whatever. You can go buy something online and get it, sometimes in an hour or faster. Your food, your products, your groceries, whatever, that’s all where that’s going. That’s sort of being pushed into, on the B2B side. Well, wait a minute; why couldn’t we do that? It was interesting. There was one of the companies that we talked—this was probably two, three years ago. They had pushed into ecomm, and you could go buy stainless steel tanks from them for $20,000 online. It’s interesting. B2B purchases obviously are very different in nature. But you mentioned from an ordering standpoint, like okay, fine. It’s still very technical, and you’ve got to go through all kinds of stuff. Certainly if you’ve got a distribution network, there’s going to be some similarities. Alright, let’s hit a button. It’s coming; it’s coming. It’s going to take some time. It’s also interesting too, you were mentioning fax. Real estate, I remember several years ago. It wasn’t that long ago, I guess. I was still blown away at fax. Like, really? You guys have to… Okay, alright, but you know what? It’s not the only industry that is… John:– Yeah, it definitely gives everything an old-school flair, the fax machine coming in the corner. Danny:– Things are changing. They’re coming. My last question before we wrap up is, what are you doing to stay at the top of your game, to continue to learn and sharpen your toolset? What are you doing? John:– That’s a great question, and I appreciate the opportunity to talk about that. What I’m doing is, I’m trying to share knowledge with other people in the marketing world and in the remote working world, both socially like social media, putting content out on social media, and also sharing best practices amongst peers. Let’s say sharing practices amongst peers to learn from each other and also public speaking. I’ve been trying to do more and more speaking and get out there more and talk about these things just like I’m doing right now, but also virtually in front of other groups or in-person as that is possible and just really help people to grow from the 30 years of experience that I have but also in that process you learn a lot yourself, both from trying to help other people grow and the input of others around you who are doing the same thing or have their questions or their experiences. Really just trying to give back, I guess, in some way actively is a huge way that I’ve found to try to advance myself but also the whole industry and other people. Honestly I’m really trying to focus quite a decent amount of effort onto doing that kind of thing, and also it’s very enjoyable. I love doing it. Danny:– That’s awesome. That’s a great answer. I love that. Giving back, but then you also— I do some of the similar stuff, and there’s a tremendous amount that you learn from other people. I love that. It’s fantastic. It’s sort of like this—I don’t know what I’m trying to say. You put in, you get out. John:– Yeah, I think Covid has locked us up in little boxes to some degree and you have to get back out of that. Even when you’re free, so to say, after being penned up for a long time, there’s actually a stretching. You have to stretch and get your muscles going back into, no, I need to be out there. I think just pushing yourself, or at least for me, pushing myself to be out there, to engage with people, even if it’s digitally, but everybody is so much better and more ready for that, engaging with people, engaging in the discussion, bringing ideas, sharing them, getting input. That is a very awesome growth process for everybody, really. Danny:– Yeah, that’s awesome. It’s funny; you reminded me of a story that a buddy of mine told me just a couple of weeks ago. He was a road warrior, always traveling, going somewhere, conferences, networking, all over the place. He told me, well I went to my first conference or whatever two weeks ago. He was like, I came back, and I was like, aw man, this is—yeah, I’m okay with doing this two times a year now. I don’t want to do this all the time. John:– He’s out of shape. Danny:– Yeah, exactly. He’s winded. It makes a lot of sense. I get it. Cool, well John, I really appreciate the time that you’ve spent with us here on the Executive Series, just learning a little bit more about you and about Brennan and just sharing ideas and thoughts on where we think this crazy world is going relative to industry. I’ve loved it. For those who would like to learn more about you guys, it’s brennaninc.com; is that correct? John:– That’s right, brennaninc.com, and you could also search me on LinkedIn. Feel free to follow or connect on LinkedIn. Danny:– Perfect, yeah. So that’s where you’re posting most of your social content? John:– Mm-hmm. Danny:– Alright, cool. Well we can follow you there. Follow John. So again, thank you so much for your time, and we’ll do this again. This won’t be the last time. John:– Okay. Yeah, I’d love it. I always love talking to you, Danny. So thanks. Danny:– Any time, any time. Alright, and that wraps up today’s IndustrialSage Executive Series with John Joyce. He is the global marketing director at Brennan Industries. If you want to learn more about them, you can go to brennaninc.com, or you can check out John. He puts out a lot of content on LinkedIn. You can go follow him, check out his stuff, share a comment, all that good stuff. Hey, speaking of content and consuming it, if you are not on our email list, you need to go and get on the list now. I highly recommend. Why? Because we’ve got great content like this and others that are coming out on a weekly basis so you can continue to sharpen your tools and learn from other leaders and executives about what they’re doing in their industries and how you can be a better leader in yours. So that’s all I got for you today. Thanks for watching or listening. I’m Danny Gonzales, and I’ll be back next week with another episode on IndustrialSage for the Executive Series.
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| Nanotronics: Matthew Putman | 24 oct. 2021 | 00:37:39 | |
Matthew Putman of Nanotronics returns to discuss lean supply chain and the pandemic’s boost to the genomic sequencing field.
Danny: – Hello and welcome to today’s IndustrialSage Executive Series. I am joined by the CEO and co-founder of Nanotronics, a man by the name of Matthew Putman. Matthew, thank you so much for joining me today on the Executive Series. Matthew:– I love to be on it. It’s good to talk to you. Danny:– It’s great talking to you again. We’ve got a veteran guest here. You’ve been on IndustrialSage in the past. Matthew:– I feel so lucky. Yeah, right at the beginning of Covid. I was saying that I actually was sick with Covid when I did your interview last time. I don’t know if you knew that. Danny:– Did we know, at that time—That was probably what, March of 2020-ish? Matthew:– Yeah, exactly. It was early in it. I wasn’t feeling well, but I was too embarrassed to say it. Not too many of us that we knew had it at that point. I was an early adopter. Danny:– There wasn’t a way to know at that point, I don’t think. Anyways, but glad you’re okay. Glad everything’s good. Matthew:– It’s great. Danny:– Yeah, that was a whole different world back then, wasn’t it? Matthew:– Oh, man, completely. It was scary. Scary time. Danny:– Absolutely. Well we’re going to jump into that a little bit, just see how things have changed for you and all this good stuff. But before we get into all that, for those who aren’t familiar with your company Nanotronics, tell us who you are and what you do. Matthew:– Nanotronics has been around for 10 years now, and we do industrial automation, bringing artificial intelligence and machine control to many different industries. We work in the genomic space. We really started in semiconductors and work in next-generation electronics. We work in multiple different industries focusing on what the next generation of manufacturing looks like. So we are this venture-backed company while being an old-school manufacturing company at the same time. The name of your podcast fits well, I hope. Danny:– Yeah, absolutely. It’s good. I think what is going on right now with all the digital transformation and all the technology that’s pouring in in the manufacturing space is incredible. And I think that one of the—if you want to look at stuff. Obviously Covid brought a lot of not great things, to put it lightly. But it also, as a flip side, as a consequence, I think it created a necessity for companies to adopt a lot of this technology, or at least be more open to it. It was already kind of going that way anyways, but it certainly created a need saying, oh my gosh, we need to really come up with solutions. We saw so many weak points and vulnerabilities. And we’re still obviously going through that. How has that changed your business? Matthew:– It’s changed just about everything. Not in the same ways that you generally hear where we’re doing these things by remote conferences, and you have people work from home. We never did that. We were involved with building things that were a part of the effort to try to deal with the changing world from Covid. So we were all in this work time mentality and this urgency to get things done. That felt different, and it felt different to think in terms of getting things done by tomorrow because there were lives at stake, or there was this need to get research done to see where it would go. It changed a ton as far as our motivations and the way we perceive time. It didn’t change the fact that we were still working from home—or not working from home. We were working from the office still, and from the factory. Now of course, we were talking to everybody else this way. And I find what’s really interesting about that is that we could see the hardware behind things. Literally, we do imaging of semiconductors. We do imaging of displays. We could see where this hardware was starting to wear thin. While everybody was celebrating the ability to communicate, which is amazing, you could see worries of supply chain problems and when this hardware would start to break and need replacement. We could start to see where that might become a problem. And so we tried to address that with the same kind of urgency as a Covid response. So it was just this incredible confluence of a number of things happening at once. Danny:– Yeah, absolutely. I remember—I think you were alluding to everyone going to Zoom and using cameras and whatnot. And then all of a sudden you couldn’t get cameras, and then all the supply chain issues there. ISPs were struggling with all the bandwidth and all the throughput that they had to have. We certainly noticed. We have done a lot of video streaming before. Yeah, you’re getting hammered, and no 1080p streams, 720. Your Netflix is getting knocked down. Just a huge strangle there, really, on all those things. Hardware, software, throughput, the whole nine yards. Matthew:– Yeah, and I think that in a way that pain is still going to be here for a while and will take companies and mindsets to change in order to address that. Computers are 24-month lead times sometimes for certain parts. People can’t get automobiles. There’s huge problems due to this chip crisis, due to everything that has been disrupted over the last year and a half, and perhaps a mindset that existed before that this just exacerbated. There’s a lot of pain and a lot of opportunity right now to be addressed. Danny:– Yeah, absolutely. So relative to that, how has this really altered your future over at Nanotronics? Matthew:– Wow. It’s as if we have emergency use approval not only for FDA devices that we make but for everything that we’ve imagined and worked on that we thought had 15-year horizons before. For instance, where we’re working in the genomic sequencing space for our customers that work in that space, suddenly they went from being a small part of our business to being a huge part of our business. We see mRNA vaccines are the most widely-distributed biotech in the world. Nobody would have expected an mRNA therapeutic on this scale this quickly. So that changes a big part of our customer base. We focus on that. I’m in a new building here that we had built—it’s actually the oldest building here in the Brooklyn Navy Yards, or one of the oldest buildings. They made submarines, and we made this, this modern building. We’d had this planned out for a couple of years, so we knew exactly how we wanted workflow to be. We’re going to make robots in this place. We’re going to make microscopes. Now in one part we’re making non-invasive ventilation devices that we’re shipping around the world. So we’re actually changing the physical infrastructure. We’re getting different types of people to do assembly and machining that we wouldn’t have thought before. So we’re adjusting to a world that is moving quickly and trying to make sure that we don’t miss that opportunity to do things that are outside of Covid but that we’ve always wanted to do, that I’ve thought important. So I can spend my rest of my career personally doing things that I’ve imagined always wanting to do, but not certain that the world would present that kind of opportunity. So there’s great risks and great potential reward that is very different than I would’ve expected a couple of years ago. Danny:– Yeah, that’s certainly a truth. You said something interesting I want to circle back on in a little bit. I don’t want to completely derail off this right now, yet. Matthew:– Oh, sorry. Danny:– No, no, no, you’re great. It’s an off-topic question that piqued my interest, so it’s very good. Relative to some of these changes that you’ve seen happen, you said, we’ve set everything up this way. We’re going to manufacture microscopes and these different—oh, actually that’s now, that’s off. We’re moving over to, you said either respirators or ventilators. Matthew:– Yeah, non-invasive ventilators that don’t require intubation. It’s a way that actually helped me when I was sick with Covid, and we’ve invented and got emergency use approval within three months. So that was something that was completely outside of anything that I planned for Nanotronics’s subsidiary of the company but has used our manufacturing techniques while, by the way, still doing microscopes. It’s just trying to do both in the same space, and we still have our other facilities as well working on the other products. But it’s just changing the way—and I bring up the space because even the physical structure of what we do is different. It’s not from working from home that it’s different from us. It’s the physical space we work in we had to transform to meet the changing product line and changing demand and changing opportunities. Danny:– Right, no, absolutely. How much of those, relative to some of those changes you said a large chunk of your business had switched. Do you see that continuing? Do you see that waning a little bit in the future and pivoting back? Where are you thinking things might go now? Matthew:– I have to put this—Nanotronics health division that makes the noninvasive ventilation and makes other products in the medical space. I’m going to put that over to the side a bit because that’s all new. That’s a different sort of business model. That goes to consumers, and that’s—but as far as our industrial space and what we make, we’re lucky that we made a product that, by using artificial intelligence, it’s agnostic to what industry we work in. That’s why we’re able to move so quickly into these other fields. Now luckily the fields we work in, I don’t see this synthetic biology going away. It’s only growing, so we’re glad to be in that space, in genomics, and moving then into proteomics. When will we see next-generation electronics as being a necessity? We’re having to deal in the United States with the fact that we import most of our semiconductors from a single company in Taiwan. The building of US fabs for next-generation, for us to even be self-sustainable in the United States, is only going to grow. So the places where we started to make larger progress during the pandemic are places that will, I think, be the largest part of our growth going forward as well. Danny:– Yeah, that makes a lot of sense. Again, certainly super interesting. You kind of touched on this a little bit, but if you were to put your—if we get the crystal ball out a little bit, thinking of the future here, what does the future of the industry look like to you, maybe even in some of those specific industries? I know you kind of have your hands in a couple different areas. Matthew:– Yeah, it’s the great thing about making these industrial-enabling platforms and getting deep in is that we get to see where the world is moving just before it happens. It’s a nice little view into the future. Whatever little bits of that we can help with is wonderful. If we take it by sector, it’s clear that moving to lower-cost genomic sequencing is more important than ever in order to do genome editing and eventually do proteomics because what we see with mRNA vaccines is being this rushed, as people thought for a year, to get this operation warp speed was actually something that was done much faster in the labs. Danny:– Let me ask you real quick. I’m curious. Matthew:– Yeah, sure. Danny:– I’m, and I’m going to suspect a lot of people in my audience may not be as familiar with genomic sequencing, and you mentioned something else. Could you explain what that is on a fifth-grade level—or a kindergarten level for me? Matthew:– Yeah, and it relates very much to what we’re all getting now with these—hopefully all getting, in my opinion—is these vaccines. The human genome is the code for making proteins in our bodies. This is the code to who we are and how things replicate. Being able to understand how to measure our own genome so that we know who we are is important. It’s also important to know what the sequence of a pathogen, such as Covid, is. Certainly not just Covid; this applies to any pathogen. Luckily by knowing that and the specifics of that, in this case sequencing SARS-CoV-2, you’re able to find what area of that needs to be edited in order to in this case do something which is, ignite the spike protein. It’s a chance to be able to ignite the immune system by using this RNA, in that case, the messenger of the sequence that matters. This is something that existed in many different forms, both sequencing—understanding what the genome of any animal, bacteria, or viruses were—for giving information. It also existed for being able to do genetic modification. We know this for crops, and we know this in many different studies and the creation of biologics that happened in the lab and were going through trials for many, many years, 10, 15 years or more. But this was a chance to take all of that research that existed before and apply it to creating a therapeutic, a vaccine in this case. Now we’re seeing right now variants which are mutations of SARS-CoV-2. You want to be able to sequence as fast as you can this Covid at any time so that you can then alter, know with the current vaccine will catch it or if not be able to alter the code, so change that RNA in order to be able to deal with the new mutation. We’re not at that point, from what we know at this point. But what changes, and where this becomes very crucial in dealing with the new world of being able to address urgency with this type of deep technology that most people were not familiar with until Covid is that we no longer should have to wait a year or two years or, in our cases, our whole lifetimes to get this advanced technology. It should be nearly immediate. That requires very rapid sequencing, and it involves then production of that new sequence inside a nanoparticle, in the case of how these particular vaccines are being delivered. Now we don’t do the sequencing ourselves, but we work with the companies that make them in order to do imaging for it, in order to improve the yields so that we can run this through as quickly as possible and to work with the companies to improve the price. So all of this makes what we would consider a more abundant, healthy future. Danny:– Yeah, absolutely. That sounds super interesting. Thank you for explaining that and breaking that down for me there. It sounds like just basically this technology, the future, you’re able to just respond faster and be able to, like you mentioned, get out therapies and vaccines and just different treatments for people faster because this technology allows. Matthew:– Yeah, I think a lot of these things that we hear about what went on during Covid, people seem to have fallen in one of two camps. There were those that life stopped for, and that’s unfortunate but necessary in a way. We were either quarantined, or there were no jobs to go to, or you’re working from home. Life had changed in that it slowed down. Pace of life slowed down. And then there were the industries that were in the trenches, and every moment mattered. And so it was, you just had to work constantly. And there was heartbreak to that of course. And there was an incredible rush that you were able to do something that would last, and that the methods of doing it would last far beyond this particular crisis. We were very much in those trenches. Danny:– Yeah, it’s funny you mentioned that. It’s 100% true. It just switched. It was like half over here and half over there. It’s very fascinating, I think, hearing these stories and just how you guys were able to pivot. I think you said earlier one of the products, because you mentioned with the ventilator, which you said you benefited from… Thank God. That’s great. I’m glad that—sorry to hear that it got bad for you. But you’re here, so that’s good. That’s great. Matthew:– I’m glad as well. Danny:– Yes. But you said that took three months to get emergency authorization use to be able to go to market with that and just switch all those. Matthew:– Yeah, that was really a pretty amazing story because I have a CPAP machine at home that people use for sleep apnea. I had had some previous health issues, and I knew that you could raise your blood oxygen level at least some by having this assisted breathing. So I did this, would measure my oxygen levels, and noticed that it would increase from a dangerous, near hypoxic level to a safety level. So I called my father who is my co-founder and a great inventor and partner for many years, I said we’ve got to make one of these, but make it that it costs $200 instead of thousands of dollars for a medical-grade device. It has to be one button, and we have to ship it to the world. So he built it at home, a prototype. Then we brought it to our facilities and put it to our R&D team, and we got emergency use approval in three months and started distributing these. Danny:– That is crazy. How did you manage the supply chain for all of that? Matthew:– That’s where Nanotronics came in handy. Nanotronics is as vertically integrated as you can imagine. It’s been part of our philosophy for many years. I’ve been concerned about supply chains being problematic. And so we bought our supplier for our core company before, and we make as many of the parts as possible from machining to assembly. We do as much as possible. And we also have manufacturing techniques that use this closed-loop AI so that you can train humans to do assembly incredibly quickly or train machines for those things that are automated. So while some of the other manufacturers of equipment in this space had huge supply chain disruptions, we had a fresh start. We could start building this ourselves and not have these types of dependencies. I hope that that serves as a model for not just the rest of our business but just in general that people can do things and companies can do things that are not as intertwined as we think they are. Danny:– Yeah, that’s a great point. If there was anything you keep hearing, talking about, it’s resiliency of the supply chain. Everyone obviously is reassessing and looking at all the vulnerabilities. There’s a question now of, how lean is too lean? Certainly looking at, assessing the supply chain issues. Maybe we can get something cheaper, but gosh, now we’ve got to look at what kind of vulnerabilities we have here. To your point, being able to align that a little bit more vertically. I like how you mentioned it was the closed loop. I think 100% right, and I think a lot of companies are looking at that and adjusting that right now. It’s not a quick, overnight fix, but I think that’s exactly where companies are going to be moving. Matthew:– Right. I imagine for a large company to completely change the way that they handle supply chain management and manufacturing procedures and processes is a really big deal. With this particular breathing product, starting from scratch probably gave us a little bit of a help, sort of the idea the start-up mentality can come in to disrupt industries. The point not to be in this case to have a business destruction of something but to actually shore up something that helps people breathe. Now everything feels this way. Helping the environment is a big thing right now that I’ve been thinking about that has gone from future to urgent. How do we deal with the environment as this sort of emergency-use approval to be able to deal with environmental disaster? How do you deal with it in order to make sure that we have everything that we need that we just cannot get due to something like a chip crisis or really a shortage of most supplies right now. It’s a strange time. There’s going to be some pain, but there is a mindset that is now a precedent that has been established from what has gone on with Covid that can be pushed in other directions. Danny:– Absolutely. What a fantastic story about—I love it how you just kind of like, hey, we’ve got to do this, and here is how we can do it, and let’s go. You were able to spin it up, go to market, and get it out there. Fantastic story. If I were to give you a magic wand—we’re in magic land right now—what’s one thing that you’d like to see in your industry or the industry, or maybe even the industries that you serve, changed or improved upon? And one caveat is, it can’t be Covid. Matthew:– It wouldn’t be Covid specifically anyway because I look at any pathogen as being the same. When you look at this, if you’re looking at synthetic biology, it doesn’t matter if you’re dealing with one coronavirus or another or a cancer, it’s a different way of looking at these things. If there was one thing, I think the hyper-distributed world of building. The ultimate goal is to be as atomically precise as possible. So if we can make things as close to perfect without waste, it also means that we are not reliant on getting large amounts of material. We are not destroying the environment. And we’re making really what we need where we need it. If that happens, it encompasses all the things we’re talking about. It leads to personalized medicine in a very short amount of time. It leads to making sure that I have a computer where I need it and when I need it rather than waiting on everything that it takes to have 24-week lead time. So I think that’s where we need to focus. And even though it sounds like a Star Trek replicator for those that have seen Star Trek, there are very close steps and things that we’re starting to see that let us believe that this is technologically possible. So now it’s just taking some steps toward getting there. Danny:– I love it. It’s such a great answer. I love asking that question because you get all kinds of answers there. But it was interesting talking about customized, more personalized manufacturing so you reduce the waste. It reminds me of, actually, the contact lens manufacturing space which blew my mind. I didn’t know that the traditional contact lens manufacturers produce around three sizes for your eye, your cornea, and there’s a large, huge numbers of variants. I thought that was very interesting that, hey, it’s just three. It’s some finite number that’s very small like that. I think it’s interesting when you go look at how, you can use a lot of this technology now to start thinking about how to solve that, to your point, to reduce a lot of the waste because you know there’s a ton out there because it doesn’t work for everybody, and there’s all kinds of issues. That’s just one, tiny little example. Matthew:– Yeah, I think that part of this is starting to think of everything as a factory. If you think of a cell in a body, it’s a factory that we are now figuring out how to deal with in order to activate immune cells and immune response. That’s a factory. There’s a bunch of factories in building things within your mouth. If you’re working on dental work or if you’re doing these—no matter what you’re doing on that small scale or whether you’re building automobiles, it’s all a way of thinking about manufacturing. It’s thinking about manufacturing as close to that place as possible. I think that that’s going to take a change of mindset still, even though we’re maybe getting closer. But I think people will start to be able to hold this in their hands and see that convenience as even being a greater convenience than we’ve seen with a lot of our modern technologies. Danny:– Yeah, absolutely. It’s super interesting stuff. So here is where I wanted to ask you a question that popped in my mind because you mentioned something I thought was interesting there. You mentioned basically there’s a lot of things that you want to be working on that you haven’t been working on. What are those things, if you’re able to share? Matthew:– Well— Danny:– And it could just be general ideas. I guess I was just curious about that. Matthew:– Yeah, I mean— Danny:– And we don’t have to. It’s alright. Matthew:– Oh, no, it falls into so many different categories. Danny:– Where to begin? Matthew:– There’s hardly anything that—I’m curious about everything. I want to make a movie. I want to produce an album. There are all sorts of things I want to do in life in general. But for the big things that matter, I want to be working, for instance, on tying biometrics to actual treatment. Closing the loop on something like what we are doing with this breathing device that we call nHale with measuring what your oxygen levels are and then moving something towards looking at what your state of your body is at any given time to looking at whether there is a delivery system for something like an mRNA therapeutic. It is closing the loop, and I could take that as being medicine, and I could look at that area of where medicine and health and longevity and all these things go. Or I would like to work on materials again. I’m a material scientist by training. There’s been huge advances in materials, but there’s also become huge necessities as we see. We have a shortage of materials to make much in the United States. So what new materials can be used? I work on things like, how can you grow new crystals in a more precise way so that you could make things out of materials that are actually abundant all around us. So I’m really interested in that field, and I’m more and more interested in geoengineering. So there are really so many different fields. I think the most important thing is not to wake up and feel overwhelmed that there’s so much to be accomplished. It’s trying to take those and put those together and say, what is this unified theory of technology that applies to everything? That’s the thing I want to invent. That’s the thing I want to be working on, that it doesn’t matter which field it is. That I can dream something tomorrow and whatever I had been working on yesterday and the year before and the year before that enables that to happen. The enabling technology’s always what Nanotronics has been doing. Now we just have to do it with wider dreams of what is possible in a shorter amount of time because we can hold these technologies in our hands now. Danny:– Yeah, it’s fascinating. I love all that. I can tell you’re just a little passionate, just a little bit. And that’s exciting. It’s exciting to hear. I get excited about it, and I’m not a material scientist. I don’t know these things. But I think it’s super fascinating what you’re doing. I think it’s super fascinating, just the exploration. As we’re winding down, one thing that I always love asking leaders such as yourself is, what are you doing now to stay on the top of your game? Matthew:– I think that I have started to do several things. A big thing, I’ve traveled a lot in my life. My career has let me, it’s been a great joy to travel everywhere, and I was inspired by places I went and different cultures and different people that I work with. And that is one thing that changed during Covid is that I didn’t get to travel as much. Nobody did. So I started to develop routines. I wasn’t able to have routines when I traveled all the time. So routines of before people wake up in the morning when it’s very early, I get a chance to sort of dive deeper, read more and take notes more at a point in the day where I’m still incredibly focused to do the harder things. So that has been good, and I try to keep actual physical books around a lot of different kinds. And when I’m at home, I can do this before I come to work. That’s really helpful to me. That’s been a big part of it, but I’m also, I play a lot of music. I play free jazz, and I play in a jazz band. During Covid I had a chance to record with a neighbor who’s a great trumpeter who I had listened to for many years and only discovered that he lived nearby right before the pandemic. So being able to completely switch gears and improvise and say, rather than the deep study that you would do to get into a topic that is necessary, how does that contrast with what maybe I would do late in the day which is try to turn off and see what just comes. And those two things that seem so different when brought together through the remainder of the day seem to help with conversations and collaborations and hopefully invention as well. Danny:– Awesome. No, that’s super cool. We talked about it before, really unifying those two worlds. And I imagine that a lot of innovation and a lot of vision’s coming out of that. You say, I see things differently. Matthew:– Absolutely. Danny:– Well Matthew, listen. I could probably talk for another four-ish hours or so because you’re super fascinating to talk to. Matthew:– We could do, three hours and 45 minutes is all I had put aside. Danny:– Okay, perfect. We could totally do that. No, I think that what you’re doing is fascinating, and it’s been interesting following your company and just hearing all the stories with the ventilator and just how you view the world and your passion. You’ve got quite the resume. Matthew:– Well I love talking to you. The last time, it was a great break in the day of being sick, and it’s amazing to talk to you this time. So I really appreciate it. Danny:– Well thanks for coming on again and sharing some of your knowledge and your experiences with us. For those who would love to come check out your company, it’s nanotronics.co. Dot co, not com, C-O. Matthew:– Exactly. Danny:– Nanotronics.co, and thank you so much for your time. Matthew:– Oh, thank you. I loved it. Danny:– We’ll do it again. We’ll do another follow-up. Matthew:– Okay, yeah. Danny:– Yeah. Matthew:– We’ll make it a yearly thing. Danny:– Perfect. Sounds great. Alright, well that wraps up today’s IndustrialSage Executive Series interview with the CEO and founder—I want to make sure I got my notes right—co-founder of Nanotronics, Matthew Putman. Fascinating story. So listen, if you are not subscribed, you need to go to IndustrialSage.com right now if you’re not there watching this video. Maybe you’re on social media. Go there. Get on the email list because you’re missing out on great content. There’s great stories from leaders, great insights that’s going to help make you a better leader. So that’s all I got for you. Thanks for watching, and I’ll be back next week with another episode on IndustrialSage.
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| IAM Robotics: Tom Galluzzo | 10 oct. 2021 | 00:24:08 | |
Tom Galluzzo, CTO of IAM Robotics, returns to share how the industry has changed since the first months of the pandemic.
Danny:
– Well hello and welcome to today’s Executive Series on IndustrialSage. I’m Danny Gonzales, and today I’ve got a very special guest. I have the chief technology officer Tom Galluzzo of IAM Robotics. Tom, thank you so much for joining me today on the Executive Series. Tom:– Danny, thanks for having me. Always a pleasure. Danny:– Well this is your second time. I think we talked, oh I don’t know, a year ago or so. I think it was post-Covid. It was after MODEX maybe, I think. Tom:– Yeah, it was right there in the middle of Covid. I think it was after lockdown started, yeah. Danny:– Yeah, it’s just Covid time. Was it BC, AC, whatever. Time has been confounded. Well a lot has happened since then, since we had spoken. And we’re going to get into that in a little bit. But first for those who aren’t familiar with IAM Robotics, tell me a little bit about who you guys are, what you guys do. Tom:– Yeah, absolutely. IAM Robotics, we are a warehouse automation company. We make autonomous robots to do any sort of material movements, transport around the warehouse. Our claim to fame is, we’re the first company that’s really commercialized what we call AMMRs, which is autonomous mobile manipulation robots. It’s a mouthful, but basically it means robot arms that can drive around that also have—it’s a driven robot platform that also has an arm on it. The robot’s able to see things and look around and find things, pick them up off the shelf for order fulfillment, so fulfilling products for ecommerce and that kind of stuff. Danny:– Excellent. That’s awesome. Since we spoke last time, I think we thought it was just March, April-ish of 2020, things were freshly, “Hey, you know, what’s going on, and how long is this going to be? It’s only going to be two weeks, right?” How has your business changed since then? Tom:– Yeah, good question. We’ve deployed our first scale deployment of our Swift AMMRs. We’re doing a deployment right now with a company called A.S. Watson in the Netherlands, so about half of their products are going to be picked with our robots. It’s really cool. We’re starting to ramp up the number of items that the robots are picking. It’s kind of an industry first. It’s the first time that we’ve seen mobile robots that have the ability to drive around and pick products actually do it autonomously. What we’re doing now is, we’re expanding our market reach. I would say what we’re doing with Swift is a very specific niche market of piece-picking long-tail items in inventory. What we’re doing is we’re expanding our market reach by taking the base platform of Swift, and we’re commercializing it into a product that we call Bolt. So Bolt is really a general AMR, autonomous mobile robot, and we have some really cool, unique features that hopefully you and I will get a chance to talk about here. But really starting to see some–– a lot of the traction and take-off in the market around AMRs and being able to do various things on top of a mobile robot that has that ability to drive around and navigate by itself. Danny:– Absolutely. So you were mentioning—maybe I missed it there—that first customer that you said in the Netherlands where you’re rolling out with this. What space are they in? Tom:– Yeah, they’re kind of like a CVS, Walgreens kind of company. They do pharmaceuticals, health and beauty items, cosmetics, that kind of stuff. So they have many different brands that they have across Europe and Asia. And they’re doing a lot of online order fulfillments, a lot of online direct-to-consumer business for all that health and beauty market space. Danny:– Oh, okay. Excellent. That makes sense. So do they have any retail locations as well, or is it all more like online? Tom:– They do, yeah. Danny:– Oh okay, so a mix. Tom:– They do. Yep, all across Europe and Asia. Danny:– Okay, well yeah, that seems to be the story and the theme as we continue on with this. Looking at these different changes, I know you said you rolled out with some new products. How has Covid really altered your future or at least maybe the way that you look at it? Tom:– Yeah, there’s a couple of different things, and we talked about this a little bit when I was first on the show. Basically there’s kind of the demand side and the supply side. The supply side is really, it’s just harder for folks doing order fulfillment, the companies out there that are trying to ship direct to consumers to find the people that they need and be able to keep up with the growing online demand. We have some of the data on this now, so with Covid, the ecommerce industry which had normally been growing at about this 15% a year, year over year growth, in 2020 spiked by I think 39%. So it went from a 15 year-over-year growth rate to, in 2020, there was that spike because everyone had to order things, almost 40% growth. Danny:– That’s huge. Tom:– We don’t think a lot of that’s going to come back. So the demand side is that everyone’s just buying—it kind of accelerated the consumer behavior to buy more things online. And so you take the supply side—it’s hard to find people to do this work—and the demand side going up, autonomous robots or automation are really what’s required to fill the gap for people trying to do that. Danny:– Well certainly we’ve had a lot of challenges, obviously, with the supply chain, but also you mentioned labor, labor being a really huge story and a big piece of what’s happening. But if I heard you correctly, you said you guys aren’t anticipating that demand is coming down. It’s going up. It was already going up, but with Covid, boom, it just ignited it even more. Tom:– Completely. I think that the future of work is forever changed now with the way that we’re buying goods online, but also just the kinds of work that people are interested in doing. I think it’s a universal challenge in anything manual work, so it could be manufacturing. It doesn’t have to be supply chain. It could be manufacturing, anything where people will previously just use the object movers and employ in basic manual tasks. We’re seeing a more educated workforce globally now because consumers are just more educated around how to use technology, apps, cell phones, computers. The younger generations don’t want to go in. They’re just not growing up with that mentality of, oh, I’m going to go work at my dad’s factory someday. That’s just not how it works now. The way it works now is, I’m going to learn how to use these apps. I’m going to go drive for Uber, or I’m going to go work in some other data thing. Or maybe I’m just going to work on making websites and mobile apps myself. That’s where everything is headed. You’re just seeing this generational shift from manual work to electronic work. Danny:– Absolutely. Getting your crystal ball out for a second, you’ve already prognosticated a little bit here. Tom:– It’s a dangerous thing to do. Danny:– I know it is. That’s okay; it’s all right. We’ll explore the dangerous side of this. What do you think the future of the industry looks like? Tom:– Yeah, really good question. I think generally speaking we’re going to see people doing more supervisory tasks, a lot of sophisticated automation within warehousing, supply chain, and ecommerce. We’re seeing a lot of deployment of what’s called goods-to-person systems now, so companies like AutoStore, Dematic, Intelligrated, they have lots of goods-to-person systems, shovel systems, mobile robot systems. There is a company that Amazon of course acquired years and years ago called Kiva Systems, which is basically mobile robots bringing shelving over to people. There’s a whole bunch of companies doing that kind of stuff now too that are bringing those solutions to market. Generally speaking, walking is going to be completely out, so people walking around the warehouse is just a thing of the past. It’s totally a waste of time and money for employers to spend on moving, people travelling from location to location. It’s all about having the automation solutions bring goods to a person. And we’re seeing more bringing of goods to the robots. Companies like RightHand Robotics, Berkshire Grey, they have these robot automation systems where the goods are coming out of an AS/RS out of the storage machine, brought to the robots, and the robots are doing some of the work to pick it. And really it takes a ton of people to supervise that, make sure the data’s all correct. Soon you’re going to see a lot of those higher-value tasks being done, a lot of the menial, just moving things around and picking items, those tasks are going away, and those are going to automation. Danny:– Yeah, it’s super interesting because I remember the first time going into—this is years and years and years ago, but going into a warehouse that was pretty automated, bringing in conveyor systems. Now there were no robotics because that was still, I felt pretty far out. Maybe Amazon was starting to roll out with it a little bit, maybe. But still just seeing some of that automation, and you’re looking at a warehouse. It wasn’t massive, but that had a million SKUs and just how you would pick orders was like, wow. You’re going down with a shopping cart and just putting stuff in like you’re going to Walmart, except we’re doing it here. Just seeing the ridiculous increase in efficiency by being able to process and pick a ridiculous amount more orders per hour is crazy. I remember walking in and just being like, whoa. This is crazy. This is nuts. Tom:– It’s huge. The scale is massive, and that’s only one distribution center. Of course the number of distribution centers is growing exponentially as well. There’s still so much concrete being poured to grow this industry. But you’re right, and your point about conveyor, I think conveyor is slowly going to trickle out of the industry as well in favor of more flexible, autonomous mobile robots. We’re starting to see some of that. So there’s certain sweet spots where, if the conveyors are long enough and the throughput is low enough, that it actually makes more sense to have a robot transport those goods from location to location in the warehouse instead of installing this big, long conveyor that’s not really going to get a big return on investment. Danny:– Yeah, that makes a lot of sense, yeah. Tom:– As we see the price of robots come down, we’re going to see more and more of that. Danny:– Yeah, I can see that. That’s for sure. It’s been interesting to see some of these different solutions that are replacing that. Certainly the flexibility piece is huge. It’s a big capital expense, and then if you’ve got stuff bolted to the floor, it’s hard to unbolt it and move it and reconfigure it and whatnot. Yeah, it’ll be interesting to see the future on that. So let me ask you this quick other question, another magical question if you will. If I were to give you a magic wand—I said here you go, take this magic wand—what would you use that to see to change in the industry? I will give you one caveat: it can’t be, “Get rid of Covid”. It’s got to be something outside of that. Tom:– That’s an interesting one. What would I like to see change? Nothing is immediately coming to mind, but I do think I would like to see more innovation in general, just people thinking out of the box about how you take some of the technologies that are out there today and deploy them in unique, creative ways. We’ve seen blueprint concepts for having, for instance, mobile robots replace sorter systems where you have mobile robots being able to pick up items in one part of the facility and shuttle them around in a sortation process or something like that. There’s so many things you can do with the technology today that still aren’t being done. There’s just an incredible amount of white space out there for being able to do more interesting things with person-to-goods solutions, being able to do more with robots combined with pick-to-light, that kind of stuff that we think could be really interesting for a broader set of folks in the market. The challenges associated with that are the industry is more looking for the product to be fully commercialized before we could just go and blank-check innovate. I think that would be the magic wand thing, if there was one thing we could do or if we could get some more of the R&D dollars to be able to try some of these models that we’ve toyed with on paper before. They could be really interesting for solving some really unique challenges in the space. Danny:– So note to the CFOs: increase budget for R&D. Okay, noted. Got that. That’s awesome. One thing I wanted to ask, and I didn’t. We didn’t preface this ahead of time, but I just thought I’d bring it up. I’m curious. Sometime within the last year—you’re CTO now. How has that… because when we talked originally I think you were CEO or president or something. Talk to me about that transition. What has that been like for you because I know recently we heard Vecna Robotics, same sort of thing with Daniel Theobald over there. I know he’s excited to focus on more product development and get into that. What has that been like for you? Tom:– That’s my background is technology, so for me personally it’s been a huge help to have someone else help carry the business and leadership. We got Lance Vandenbrook who’s fantastic. He was previously at Kiva Systems. He led their international sales and marketing. So he has a ton of experience in the space. He also worked with some other companies in robotics, so he has experience playing the CEO role before. So just being able to help manage the business, some of the executive recruiting, growing the scale, it allows me to really focus more on what I like which is evangelizing the technology, figuring out what the bigger strategic roadmaps are technologically and so forth, and providing more of that leadership to the technical organization here at IAM Robotics. I’ve made that switch before where I was CEO, CTO. When we were doing fundraising for our Series A round, there was a point where it was so much of a full-time job that I couldn’t both run the business internally and do the technology deployment that I had to do and go do the fundraising. I thought, I’m probably going to be better suited finding someone that’s more likely to have a million sales calls and talk to a bunch of investors. So we brought on a CEO for that portion, and it ended up working out well. We found our Series A investor, and then eventually I was able to step back into the CEO role, and then, now it’s at a point where we’re ready to scale, and I’m happy to have Lance take over the business end of things. It’s a double-edged sword. There’s an upside and a downside to being the CEO, and not having to do the downside stuff for me is where it’s helpful. Danny:– Well absolutely. Like you mentioned, it is a full-time job trying to raise, and then you’re constantly talking to investors. It’s just like, hey, we have other stuff that we want to do over here. Yeah, totally get that. Well congratulations on that, to be able to focus on those great pieces to keep things moving and growing and doing that thing that we talked about, innovation. Wrapping up a little bit, what are you doing as a leader, as CTO, leader of your organization, what are you doing to really stay on top of your game? Tom:– Yeah, that’s a really good question. I think you have to have some component of fun and tinker with technology to keep your head into it, I think. When you reach a certain level, you’re not really able to write code anymore. You’re not able to design algorithms and do any of the detailed hardware design or anything like that. You’re really just providing a top-level framework and architectured process. I think for me, I don’t ever want to lose sight of my drive to actually understand and actually build. And I have this innate kind of—I don’t know, what we’d call a grain of sand to the pearl in the oyster—just itching to always build and do things and learn new technologies. Just as a hobby I started tinkering around with my kids teaching them to program video games Danny:– Wow, that’s cool. Tom:– As an example. We’ve just been having a blast with that just as a hobby on the side, just showing my kids. For me it was an opportunity to get to learn how to program into a game engine. It’s inspiring. It makes you think through, oh man, if we could program robots this way, it would just totally change the game of how we got work done and how efficient we could be with—I’m not saying we’re doing anything like that yet, but it’s really helpful to just drive the creative process. Always get back to your roots and be able to tinker and have a hobby and learn the new tech. Danny:– Absolutely, and I love that you’re doing that, especially with your kids to bring them into that. That’s such a great skill for them. It’s interesting; it reminds me. I remember a story—this was years ago—where, I believe McDonalds was, a lot of their training modules they were using–this was several years ago, so they were programming everything and creating video games, basically, on the Nintendo DS. As an employee in Japan, if you were working at a McDonalds, you would go through all the training material on a game, basically, because they were realizing that, hey, with the culture, we love video games. Let’s do that. What’s interesting in industry is there’s a company called Forklift Simulators and we’ve done some work with them. They’re all training on forklift driving using VR technology. Tom:– I’ve seen that. It’s super cool. They use virtual reality, and it feels pretty realistic, too. I’ve tried that at some of the trade shows. I think there’s an aspect of that too, if you can get your engineers in the mindset of gamifying their own work. I think that’s one of the things as a CTO I want to explore going forward is starting to not think about work so much as, oh, there’s this list of tasks and stuff I’ve got to get done in my sprint but thinking about how you can get creative and figure out unique ways that you can change the code to make it better, ways that you can—a lot of times we get bogged down with something called technical debt which is where you program something initially one way, but it really wasn’t best for the future. I think I want to get a mindset in the culture around changing some of the software over time so that you can gamify the process of making it better as you go. You’re not just adding things to something. You’re polishing that stone and continuing to revise it and change it and tweak it. There’s a fun aspect of that because you’re trying to figure out unique ways to leverage your time to be able to modify what you have and make it more efficient. Danny:– Absolutely. I love it. I think this opens up; it goes back to this innovation piece. Just tinkering and exploring and, like you said, looking at all these different creative solutions that might help make that product better or create a new product that solves the challenge. It’s fantastic. We’re running up on our time here, but for those who would like to learn more about you guys, they can go to iamrobotics.com. Is that correct? I want to make sure I got that right. Tom:– That’s it. Danny:– Alright, they can do that. Tom:– I-A-M robotics.com, that’s it. Danny:– Awesome. Well Tom, listen, thank you so much for spending some time with me today on the Executive Series. It’s always great talking with you, and I hope that—we’ll do it again. We’ll have to do this; we’ll do another catch-up. Tom:– Absolutely. Danny:– Alright, great. Well that wraps up today’s IndustrialSage Executive Series with IAM Robotics, the chief technology officer Tom Galluzzo. If you’d like to learn more about them, you can go to I-A-M, iamrobotics.com. Listen, if you’re not on our email list, I highly encourage you to go to IndustrialSage.com right now if you’re not there, if you’re maybe listening on a podcast, and go subscribe because you’re missing out on great content like this so that you can learn from your peers, and you can see what things are going on and maybe expand some of your creativity as we understand what other people are doing and different solutions. So that’s all I got for you. Thanks for watching, and I’ll be back next week with another episode on IndustrialSage.
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| Hewlett-Packard, Sunrun: Sonita Lontoh | 26 sept. 2021 | 00:51:37 | |
Sonita Lontoh (Global Marketing Head at HP, Board Member at Sunrun) returns to share her leadership principles in light of the state of the industry.
Danny: – Well hello and thank you for joining me today on the IndustrialSage Executive Series. I am joined by Sonita Lontoh, who is the Global Marketing Head at HP and a board member at Sunrun. Sonita, thank you so much for joining me today on the Executive Series on IndustrialSage which, this is I believe your second time here on IndustrialSage. Sonita:– Yeah, and thank you so much for having me, Danny. It’s so good to be able to share some perspective today. Danny:– Well I’m excited to jump into today’s conversation a little bit more. I think the last time when you came on we were talking a little bit more about marketing and some other things. Now under the Executive Series, kind of excited to jump into a little bit more about you and learning a little bit more about some of your insights, what you’re seeing in the industry, and some different trends. Before we really jump into it, for those who are not familiar with who you are and what your role is and what you’re doing at HP, if you could share that, that would be fantastic. Sonita:– Yeah, great. And again, thank you for having me today. So yeah, just a little bit about myself, looking back at my career, about 25 years I’ve had the privilege to lead and advise at the intersection of innovation, digital transformation, and disruptive technologies. I’ve done that, Danny, both with new businesses within large Fortune 100 companies such as HP today and prior to that, also with Siemens with their new digital business but also with smaller, more entrepreneurial, Silicon Valley venture-backed technology companies. So pretty diverse, have seen the gamut, but the connecting thread is always new business. Usually there’s a disruptive technology involved, and then usually the disruptive technology is enabling some kind of digital transformation. So started that by focusing more on industrial IoT which, at the end of the day, as some of your viewers probably know, is about data and connectivity. And doing that prior to HP, focusing on energy and infrastructure. And then I was at Siemens about three years ago that I got a call from HP, and to be honest with you, I never thought of HP as a place to go. Not because it’s not a great company; it is a great company, but it’s an area that’s slightly different than where I was focusing. But then HP said, hey, we are starting this new business. It’s going to disrupt manufacturing. And as I listened more to them, basically it’s this new 3D printing and digital manufacturing business, and it’s enabling digital transformation but for the manufacturing industry. I viewed the opportunity as attractive because even though at the time I was focusing on infrastructure and energy, but I saw this as an opportunity to enable digital transformation in another sector. Plus the opportunity to start a new growth business for HP, which is the birthplace of Silicon Valley, and as the company is trying to evolve for the next phase of growth, I thought that was a great opportunity. And so here I am. I’ve been here for about three years now, and so far the journey has been pretty fascinating. Danny:– That sounds super exciting. Well congratulations. It is interesting how you said that, when you were coming from Siemens going over to HP, the idea of them being involved in a little bit more of a manufacturing and industrial application was very interesting, and how they said, we are coming in, and we are going to disrupt the industry. It’s very exciting about 3D printing. It’s been very much of a buzz topic. What are some of the themes and some of the areas and the trends that you’re seeing in the space right now that are requiring companies to rethink and innovate? Sonita:– Great question. Yeah, so when you look at the industry, I think there are a few trends going on, and perhaps I can summarize those as 3D as well, mainly decentralization of manufacturing and democratization or personalization, and then last but not least, and I think this is happening in many industries is decarbonization or sustainability. So let me just go over them briefly, each one. In terms of decentralization, we see a trend, I think, around the world for manufacturing to become more distributed and basically what that means it’s this shift that certain types of manufacturing can actually happen closer to where the demands are and locally, so more distributed. Of course it creates both challenges and opportunities for manufacturers. And then the second trend that we see is what I call democratization or personalization where there is also an increasing trend for customers, be it enterprise customers or end consumers to demand products and solutions that are more customized to their needs. The last but not least is this decarbonization or sustainability where we see manufacturers are always looking for ways to be more energy- and resource-efficient and looking for ways to improve their sustainability. But then when you take a step back, basically these trends create challenges for a lot of manufacturers because they have to be able to adapt not only their existing processes but also their people, their skill sets, the way they do business in order to be able to tackle some of these challenges. What we’ve seen, some of those companies that want to get ahead of the challenge, they adopt some digital technologies including 3D printing, digital manufacturing, in order to enable them to be more agile so that they can respond faster to customer demands. They can create new business models in certain cases, overall just turn the challenges into opportunities. Danny:– Yeah, absolutely. Relative to that, how have you seen companies adopting this new technology, whether it’s the 3D printing, digital manufacturing, and what do some of those use cases look like? Sonita:– Yeah, interesting. It has been definitely a journey for the past three years. I would say there is really no one-size-fits-all because the truth is I think each customer, like each company, is at a different stage of maturity with regard to their digital manufacturing maturity. Some, they’ve never tried it. They’ve never heard of it. Others, we see companies that have champions inside the company that have tried it, worked on it, maybe tried it on a few controlled applications trying to prove the business case before they scale it. And still others, and usually these are more for what I would call digital natives, well-capitalized startups, they don’t have legacy systems to deal with that they can just adopt the new technology and disrupt an industry. And so really as I explained, they’re at different stages of maturity, and they do it for different business reasons. But what we have seen is that as a solutions provider like HP, our goal is really to just partner closely with the customers regardless of where they are in their journey in order to be able to collaborate and work together with them to ensure that we are a trusted partner that can grow with them throughout their journey. What is interesting, Danny, what we have seen is, it seems, especially for production applications, it seems that applications where there is a need for highly-customized or what we call mass customization, 3D printing technology seems to be a good fit from a business case perspective. Basically if every single thing that you make is slightly different, then using 3D printing makes more business sense compared to, let’s say, if you’re just producing millions of parts of the same thing. We see industries such as dental aligners, hearing aids, maybe customized glasses, customized orthotics and prosthetics, customized shoes where the item has to be customized in a sense then the 3D printing really makes sense. As I mentioned previously as well we’ve also seen, it’s different working with a customer that is a digital native, well-capitalized startups with no legacy systems. Then they can go big faster versus working with a customer that has a lot of legacy systems. They have to start somewhere that makes sense, and you have to be patient and working with them throughout their journey because it’s not going to be an overnight project for them. Danny:– Yeah, absolutely. I can see that younger, leaner startups are going to be—I love how you said companies that don’t have the legacy systems, there’s going to be a whole lot of heavy lifting, or less heavy lifting, and they can see things a little bit differently and boom, be able to adapt because this certainly is a disruptive technology. I think it’s amazing. Let’s talk about disruption a little bit more. We’ve had this crazy thing happen over the last year called Covid. It has completely disrupted and changed all kinds of things. Looking at the industry, what are the biggest disruptions or the changes that you’ve seen in your opinion? Sonita:– Yeah, another great question. I would say reflecting back, especially last year, I think the pandemic has actually proved to be—of course it was a challenge. It was a challenge for everyone. But it has also proved to be a positive moment, I think, for this industry because for the longest time the industry has talked a lot about the potential of 3D printing to enable, as I’ve mentioned, distributed local manufacturing where people can manufacture on demand closer to the point of distribution. But during Covid, as you remember Danny, a lot of just supply chain disruptions happening around the world because— Danny:– Still happening. Sonita:– Yeah, borders were closed, goods and people couldn’t move. And so there’s a lot of supply chain disruptions, and we saw it as an opportunity, and not just an opportunity actually. We seized it, and our customers and partners seized it as well. I’m really proud to be able to actually share with you that last year especially after the first few months after Covid hit, lots of supply chain disruptions around the world, HP together with our global partners and customers around the world, we quickly rallied and worked together to design and produce I would say more than 5 million mission-critical applications, so things like PPEs, face masks, face shields, ventilator and respirator parts, nasal swabs, and others to basically help the local healthcare workers battle the pandemic. And so with that moment, it really showcased the power that this new technology had, and for the longest time in theory you can really use 3D printing for distributed manufacturing, but during that Covid-19 situation the first few months, it just really provided it I think with a watershed moment that hopefully can help with the paradigm shift in thinking as government institutions around the world, many different industries around the world are rethinking their supply chain resiliency and manufacturing processes. Danny:– Absolutely, yeah, a lot of reshuffling, the resiliency, supply chain as you mentioned there, huge implications and driving a big need to—I like how you said there was a lot of talk beforehand about how we could implement it. Now is, we have to implement this. Wow, look at this. This is an actual viable solution to really solve a lot of these challenges and create a lot of new opportunities. Relative to that, what are you thinking looking forward now over the next three to five or ten years? What trends or what are you seeing in the future? Sonita:– Yeah, I see the next three, five, ten years, there are two things. I think from the customer perspective, I think as more and more people realize the benefits of 3D printing as they move up their journey and they can see how this new technology can help them to either reduce costs from an operational efficiencies perspective or, in some cases, be able to enable them to provide better customer experience through personalized products for their customers or end consumers and in some cases besides that, companies that are the most advanced have been able to leverage new technology to create new business models and new revenue streams that would otherwise not be possible. I think as more and more people and companies and customers see this, I think they will start adopting it more and more and making it part of their processes. Then from the industry perspective, I think as the industry itself continues to mature, a lot of us, the players, we will have to continue to collaborate with each other in order to be able to provide an end-to-end solution for our customers so that it is easier for the customers to route the inner means. We have to make sure that the hardware, the software, the services, the design, it’s all inter-operable with each other so that it is easier for our customers in order to be able to adopt it and to make it an integral part of their manufacturing process. Danny:– Well certainly a lot of opportunities and a lot of different things that we’re going to be seeing over the next few years for certain. Going back to where you mentioned with Covid, certainly yes, there were a lot of challenges, but also you could flip it a little bit and say there was a lot of opportunities. And I think because of those opportunities now that have been capitalized on, it’s opening up this whole new world for both, you mentioned your customers but then also looking at your partners to be able to open up new business streams and align between, you mentioned software and hardware and all the infrastructure. I think it’s going to be very exciting to see all the new applications over the next several years because I really do think that this is going to be a huge piece of it, certainly be able to respond from a flexibility standpoint. We’ve learned that is critical, especially when it comes to your supply chain. Fascinating stuff. I kind of want to switch gears a little bit. This is where I want to get to know about you a little bit more and some things. Let’s talk about your leadership principles. What are they? What are some of those pillars for you? Sonita:– Yeah, great question. I would say over the years my leadership principles have evolved based on the experiences and as I also continue to grow on my own journey. I would say in general my leadership principles can be summarized as follows: The first one I think, especially in my area where I’ve been a lot dealing with disruptive technologies, and I deal with a lot of very brilliant inventors, people who invent things, I think leaders have to be customer-focused. And by that I mean, especially in the world of technology and especially in the world of disruptive technology, I think leaders have to take the time to truly understand what the customer needs are and be able to articulate how this great technology that are being invented are actually helping to solve real customer problems. I think leaders will also encourage others to be customer-focused as well. Then second, and again I think this is also related to new, emerging technologies, leaders have to be long-term focused because as I have mentioned it’s a journey for most companies from invention to commercialization to helping customers succeed; it’s a journey. So a leader has to have a very long-term view, and he or she should not be trading the long-term value for short-term gains. Then last but not least, this is more from a personal perspective. I think leaders develop other leaders instead of other followers, and there is actually this concept that I listen to from John Maxwell. You may know the leadership coach and guru where he says there are five levels of leadership, and most people are on the journey. But what really resonated with me, he basically said that while most people start a positional leader because it’s the easiest, but it’s also the least rewarding. And as you continue to grow in your own leadership journey, you will focus more on developing others because when you develop others as leaders—and I found this myself—when you have more leaders in your organization, more of the organization’s goals can be accomplished. And when you’re being intentional in developing other leaders, I think not only you reap the benefits, but then these other people also multiply it to others. And so I would say, I don’t think I’m quite at the pinnacle yet because I think these five levels, they talk about how you start here and then eventually you go up to the pinnacle level five, and I don’t think I’m there yet. However, I think as I continue to grow in my own journey, it’s focused on developing others as leaders just become more and more important for me. Danny:– That’s fantastic. I love that. You mentioned being customer-focused, and then long-term. That’s very, very difficult versus switching to short-term. And then developing other leaders, I think that’s fantastic. You mentioned John Maxwell, coming from there. Over the last year, looking at leadership, obviously Covid, to go back to that again, created a lot of different challenges and opportunities. How did you say that you were able to keep people really focused, your teams focused on success and moving forward in so much uncertainty? Sonita:– Yeah, and I think all of us were dealing with that last year and everyone has their own ways of leading during times of uncertainty. What I found is, when you have good people in general, they want to do well. But of course during times of uncertainty, they can be scared because they’re not sure of what’s coming. And so as a leader, I think one of the things that you can do is you can be even more authentic. You can be more compassionate, and you have to be able to provide a realistic sense of hope. Some examples of how you can be more authentic is as a leader I think during times of uncertainty, you can more openly and honestly share about what you know and also what you don’t know because especially last year a lot of leaders, they didn’t know. They were kind of like, this is a new playbook. The playbook has not been written with regards to how to deal with the pandemic. So you just have to be authentic because I found that people appreciate the honesty and the openness more, rather than if you’re sugar-coating and promising things that you don’t know may or may not happen. Then the second is, I think you can be more compassionate, and especially during the pandemic understanding that you have to give people the freedom to finish their work, and you don’t know how or when, and give them the freedom, trust them because sometimes your team members during the day, they might have to deal with their children who are homeschooled because of the pandemic, or they have to take care of an elderly family member, so you don’t know that. But as a leader I think you have to show compassion by giving them the space and the freedom to finish their work the way they see fit. Then last but not least, being able to provide a realistic sense of hope, basically giving people the sense that they are working in an environment that is safe and care about them. And you can do that by celebrating little things. I think last year we had some virtual birthday celebrations. We had some virtual happy hours. This was before people felt a little bit Zoomed out. We tried to really show the team members that, hey, we care. Let’s celebrate the little things. Let’s just make sure that people still feel that they’re part of a community, even though it’s virtual. So I think, yeah, during times of uncertainty, as a leader I think you have to be authentic, you have to be compassionate, and then you can provide this little realistic sense of hope. Danny:– Those are some great points. All of that makes a lot of sense. I love how you said, there was no playbook. Definitely there isn’t, and so I love the comment on authenticity. It’s like, we don’t have all the answers, and saying hey, this is what we know. This is what we don’t know. I certainly love celebrating…it’s kind of funny how you mentioned there before, people were Zoomed out because Zoom fatigue is a thing. Sonita:– Yeah. You know Danny, it’s funny because I think in the beginning everyone was, yeah, yeah let’s do virtual happy hour. And then I think after a few months, they’re like, oh, we don’t want virtual happy hour anymore because we’re Zoomed out. Yeah, exactly. Danny:– It’s real. So given your experience working with companies that are involved in disruptive technologies, how can leaders really inspire and foster a sense of innovation and creativity inside the workplace? What have you seen working, and how do you do that? Sonita:– Yeah, good question. I think at the end of the day, there’s no template for inspiring innovation and creativity. As leaders, we just need to create a safe space and environment for people to not be afraid to experiment and be able to fail fast, think outside the box. But there are a few guiding principles I would say that I’ve noticed in the past five, six years that seem to be working well. These are just guiding principles; again as I said, it’s not a template, and it really depends on the culture of your company and the culture of your people and what area of technology you’re working on. The first guiding principle I would say is to make it fun because I’ve found that when people are in a fun environment, somehow they become more creative. And so an example that I have on my own team every quarter we have this big planning meeting, and there will be a session where we divide all the people into different teams, and then they went their separate ways and think of one big idea that we might be able to implement for the next year. Then people came back and presented their ideas, so we did it in kind of a fun way, the Shark Tank way, and people become very competitive. It’s fun, and it’s competitive. And then you just got a lot of this very creative, great ideas. So that’s one. Then the second—and we experienced this probably during the pandemic—is to make it part of your everyday life. I think some companies maybe mistakenly believe in order to have creativity and innovation, you have to have a separate thing, the innovation group because the day-to-day people, they’re just focused on operations. So it’s this big, separate, magical thing that will be more innovative and creative. And I think, as we experienced last year, that actually is not true because what you’ve found is sometimes the most creative things can happen just on your day-to-day because you are trying to, let’s say, solve a problem for a customer, or last year, trying to pivot your plan because whatever you were planning was not going to happen due to the pandemic, or people were trying to achieve more with less. There’s a lot of budget cuts all over the place because of the resources and just uncertainties of the pandemic. And then you found out that people came with all kinds of creative ways to deal with just their day-to-day problems. And then last but not least, and I think this is very important especially for new businesses in categories that have not been created before. I think it’s very important to mix people from different backgrounds, and what I meant by that is not just diversity in terms of gender or race, but also people from different disciplines, people from different experiences, different industries. Here in this group at HP we have people who came from creative backgrounds, from engineering backgrounds, from big companies, small companies, from different industries. And what you found is when you mix people from different backgrounds you get what I call the value network. Basically what that is, is the interdependencies of these diverse thoughts and experiences contribute something that is much more informed and bigger than individual parts of the network. And so at the end of the day, Danny, I would say yeah, make it fun. Make it part of your everyday life. Then the third one is to mix people from diverse backgrounds that have different experiences. Danny:– I love that. That’s fantastic. I was just feverishly taking some notes. I really like those principles and those ideas because it can be particularly the second point where you said, make it part of everyday life. Where maybe if you’ve got a team that’s dedicated to innovation, well that’s kind of the point, I guess. But when you have a whole department and your whole operations team, they’re seeing things. They’re experiencing things. And a good idea can come from anywhere, right? Sonita:– Yeah, and what you don’t want is people who are working in, let’s just say ivory towers because there is a tendency for the innovation group, they are kind of their own group. They’re not out there in the real world. They’re thinking about all these things. But those are just theories, right? Until you actually try it out there, you don’t know whether it will work or not. Danny:– Exactly, 100% right. It’s like a lot of companies sometimes run into issues when it comes to product development. Oh, we think this is a great idea, but the reality is that when you get boots on the ground, it’s not a problem we’re solving. We think it’s cool because we can do it. That doesn’t necessarily mean it’s addressing a challenge in the market. And so I think it’s critical. So I love that, being able to incorporate that in there. I really, really love, as well, the whole, you’re bringing in your Shark Tank ideas, people going in and bringing in competing ideas. I love that, so we’re going to be doing that. That’s for sure. In the past, you’ve talked a little bit about having a growth mindset or being in this growth mindset. Can you share some ideas and perspectives on how to develop that, maybe where you might not have that? Sonita:– Sure. Yeah, okay, so first I think there’s already a lot of books and writings and thoughts about growth mindset out there. For me I think the core of a growth mindset is really about having the right positive attitudes and always looking for ways to improve yourself. What I’ve found is some people do this by actively looking for constructive feedback. I think certain industries, they’re more used to this. I think the consulting world, maybe because their main product is their people and their ideas, so they’re very into seeking constructive feedback, acting on feedback. What’s interesting, Danny, is I’ve learned through readings, through real experience or meeting different people, the truth is a lot of people are not good with dealing with feedback. Research shows that most people are actually terrible at it. The reason for that is because, interestingly, physiologically feedback triggers certain reactions in human beings. The first is, they say feedback usually triggers, the first reaction is the person will try to look for what’s wrong with the feedback. It’s just this trigger that the feedback has on people. Then second is the relationship trigger, how you feel about the feedback will partly be determined by who’s giving you the feedback. Is it someone you respect? Is it someone you don’t respect? How you look at the feedback depends on who’s giving it. But then the most important is what they call the identity trigger, and I read this, I think, in a Harvard article a while ago. They said how you internalize and how you really act on that feedback really depends on the story that you tell yourself about the feedback. Regarding this story, after the recent Olympics, it reminded me of, I went to a college a long time ago that had some kind of athletes. I remember at the time, my classmates were Olympic athletes. That was the first environment that I was in where I really observed firsthand how these people continue to look for feedback because they wanted to continue to improve themselves. And so I guess in order to have a growth mindset, I think you have to be able to continually look for ways to improve yourself. Most people get it through feedback, and most people are not good at dealing with feedback. But if you can overcome that, you can actually have a growth mindset because every, single—not failure, but every, single opportunity, you look for an opportunity to improve yourself. Danny:– Yeah, that makes a lot of sense. You’ve got to ask. If you don’t have any goals—it’s like taking a tennis ball and throwing it against a wall. If there’s not a wall there to bounce back, you don’t get. You don’t know; where am I? So it’s being open, really, and asking those questions and being vulnerable, really, and I think that’s maybe a piece where people sometimes get defensive or want to look—I love how you said, well we look at the negative in the feedback, like this is wrong. This can’t be right. I like it. No, I love it. It’s fantastic. I can see that being critically important especially in your background, being involved in all these disruptive technologies because it’s constant feedback. You constantly have to look at it and adjust and make improvements, not just, I imagine, from your leadership standpoint, but even just from a business model and from a product standpoint. It’s a constant feedback loop. That makes a lot of sense. Sonita:– Totally. Danny:– So as we’re closing, do you have any—share some wisdom, I guess, with some other professionals who are looking to continually want to grow themselves and really develop more leadership capabilities. What would you tell them? Sonita:– Yeah, great as a closing. I think the first thing all of us know, I think, is to just accept that it’s a journey. It’s a marathon. You’ll continue on your journey. It’s not a destination. But there are again, Danny, just a few guiding principles that I felt, at least for me personally, it has helped me throughout my journey. The first one, especially given my area and the things that I’ve been dealing with is to have a growth mindset. Have a growth mindset; embrace change. And sometimes you have to even disrupt yourselves before others disrupt you. Then the second one is to learn from mistakes. This is about getting feedback. This is about not being afraid to try new things because at the end of the day, if you keep waiting until it’s perfect, then you may never grow or learn. And I think if you’re not making any mistakes, you’re actually not growing because you’re not stepping outside of your comfort zones. And then the third one, again because it’s a journey, I think you should celebrate little victories. Some people, they wait for a big thing before they celebrate, but I would say it’s much better if you celebrate little milestones, little accomplishments, achievements, just to remind you that you’re on the right track. And then, I guess this is for some people, especially in the corporate world: always find mentors and sponsors, both men and women because, again, it gives you that diverse perspective. Seek out people who are not from your industry so that they can give you perspectives. What are the challenges and opportunities that they’re facing in their own industry? Then last but not least, and this is just for me personally because I also talk to a lot of rising stars. A lot of people these days, especially young people like millennials and Gen Z, really focus on their passion. Sometimes I think they get very impatient; that they go into an industry, they’re there for a couple of months, and then they say oh, my God, this is not what I want to do. I want to do something else. It’s not my passion. But what I would encourage people, especially people who are younger in their leadership journey is to think about how you can combine that passion—sure, it’s great to have a passion—but what’s most important is to be able to combine the passion with your skills because hey, you might be passionate about something, but are you good at it? So combine the passion with the skills, and most importantly with the purpose. I think these days I notice a lot of young people, they are seeking this purpose, so that is good. They want to work for companies whose mission and values are aligned with their own values, which is very important. But yeah, combine the passion with skills and purpose, and I think you will feel confident and good throughout your journey. Danny:– That’s some gold right there. That’s some fantastic advice. I really appreciate that, especially there at the end you were mentioning passion plus skills and purpose, aligning that in there. That makes a lot of sense. Passion, sure, you can only go so far with that. Got to match up the skills, and then if you can get the purpose, great. Sonita, listen, I have all kinds of notes that I’ve taken here, so I appreciate you spending some time with us and sharing your insights and sharing your experiences. You have quite the list of experience, especially with these disruptive technologies. Thank you for sharing what you’re seeing in the industry. Things are moving forward relative to 3D printing and digital manufacturing. Obviously there’s a lot of amazing things going there, and also just sharing with us a little bit about your own, a little peek behind the curtain there about leadership and how you view things. I think this is some very, very valuable information. I think a lot of people are going to enjoy watching this. Sonita:– Great, thank you so much. Thanks again for having me. Danny:– Well always. Well you know, maybe we’ll do a follow-up here in a year or so and see how things have progressed. We’ll continue the conversation. Sonita:– Certainly. Thank you so much, Danny. Danny:– Thank you. Alright, well that wraps today’s IndustrialSage Executive Series. I’ve really enjoyed it. I’m not lying; I have a bunch of notes that I took here. This is fantastic. Thank you for listening or watching. If you are not subscribed, I highly recommend you go to IndustrialSage.com if you’re not there right now, and go ahead and subscribe because you’re missing out on great content like this so you can take a whole bunch of notes and say, hey, this is how I’m going to learn. I’m going to get that growth mindset. I’m going to continue to get feedback and go from there. That’s all I got for you today. Thank you. I’ll be back next week with another episode on IndustrialSage. And I’ll see you then.
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| Tompkins Robotics: Mike Futch | 12 sept. 2021 | 00:29:11 | |
Tompkins Robotics CEO and President Mike Futch returns to the Executive Series share how the company has changed and adapted in the wake of the pandemic.
Danny: – Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Tompkins Robotics, their CEO and president, Mike Futch. Mike, thank you so much for joining me today on the IndustrialSage Executive Series. Mike:– Thank you for having us. Very happy to be here. Danny:– Well I’m excited to talk with you yet again. I think we had you on maybe about a year ago or several months ago. My train of thought from time is just completely changed with Covid. Mike:– Yeah, I think it was early summer of 2020 right when we were in the middle of everything and all the uncertainty. Danny:– That sounds about right. It sounds like we’re still in the middle of stuff with a lot of uncertainty. But hopefully it’s getting a little bit better. But we’ll jump into that in a little bit here. For those who aren’t familiar with Tompkins Robotics, maybe if you could just give me a high-level on who you guys are and what you do. Mike:– Certainly. Tompkins Robotics is really focused on using a fleet of AMRs—autonomous mobile robots—that we use for primarily sortation. So think about anything from the size of a penny or a business card up to a meter by a half-meter and 30 kilos or 66 pounds. We have different models that can sort small things, medium-sized things, large things, and we’re using those robotic sortation systems to take the place of traditional material handling systems that have been around for, quite honestly, decades. We’ve got a really exciting portfolio of products. We’ve really had some interesting things happen in the last 12 months, so to speak. We’re starting to work with other robotic firms where we combine our technology with other robotic technology. Think about goods-to-person AMRs. Some people say the old Kiva-style system of moving a shelving pod. Think of pick assist AMRs like a Chuck from 6 River. And think about a goods-to-person AS/RS like an AutoStore. We actually have installations where our primary system tSort is bolted to an AutoStore, and the automated storage and retrieval feeds a pick board where the items are placed on our robots to sort out to 500 or 1000 orders. Our systems are unique compared to traditional conveyorized systems in that everything you see in our system typically is on wheels which makes it portable, mobile. It’s very scalable and modular. And all of that drives a lower cost, higher flexibility, and has really been a game-changer for our customers. We deploy our systems throughout the entire arena, both retail doing ecommerce, store replenishment, returns, shipping. We are doing manufacturing, postal, a lot of different areas. Anywhere that you are sorting individual items for orders or packages to go to a home or business. We even have a micro-fulfillment solution, believe it or not. We just recently had a customer sign up, and the primary reason they signed up was because we could sort eggs with a watermelon behind it, and the eggs are not damaged. And so some really exciting stuff going on there. Danny:– Well quite the varied applications there. Yeah, I could see that being an important thing to be able to make the distinction and handle properly watermelon versus eggs right behind it. That makes a lot of sense. You mentioned earlier on, you said those are some of the changes that have happened. Was that one of the changes since we last spoke last summer? Mike:– Oh, yes. Some of the things like the micro-fulfillment solution which now has actually been sold to several different customers, and others are seriously considering it, we just had the idea when we talked a year ago about doing micro-fulfillment. We hadn’t figured out exactly how we were going to do it. That’s all come about in the last 12 months. We’ve also had some other things that have happened in the last 12 months that have been pretty exciting as well. For example, I mentioned partnering with AutoStore. We’re not an AutoStore distributor, but we partner with some key folks like Bastian Solutions and Kuecker Pulse Integration. That’s the merger here recently. I think it’s been about maybe two months ago. Pulse Integration and Kuecker merged together. Working with them, we’re doing AutoStore and tSort collaborations. We also have a relationship with GreyOrange where we do the goods-to-person AMR delivery to a tSort system. Obviously there’s robotic pick-in-place clients that we work with. Then we have a new product that is called xChange. This is something we may have mentioned to you last year, but we didn’t really have a good plan for it. xChange is a machine that will come after the four items for your ecommerce order are sorted into a container, or the 40 items are sorted to a store replenishment aisle of less than case quantities to replenish the store shelf. And when that carton is full or that order is complete, imagine if you will, a robot that comes and picks up that completed order, takes it away, and puts an empty back in place. Now what we’ve done is automated the exit side of item sortation. That’s really exciting, and that’s a collaboration we’re doing with IAM Robotics where we’re using their technology and working together to develop a solution to bring to the market in 2022. Danny:– Well it sounds like you’ve been very busy over the last 12 months. How much of this was in the works pre-Covid versus a response to Covid? Mike:– Well I’ll tell you, the xChange, I had a couple of guys at the office wrote a patent on that in ’19, so that’s been percolating for quite a while. It was not Covid-driven. I think the biggest thing that was Covid-driven for us was the micro-fulfillment because when Covid hit and everyone was talking about buy online, pick up in store, and the retailers were struggling, both the grocery chains and other types of stores. We had a little time on our hands because, quite honestly, to be perfectly honest there were a few customers who cancelled or delayed some orders. We looked around and said, wow, micro-fulfillment seems to be something that’s here to stay. It’s grown by leaps and bounds, or at least it looks like it’s going to grow by leaps and bounds. What can we do that’s different from the AS/RS solutions that everyone else offers? The Alerts, the Fabrics, the Takeoffs, the AutoStores, the Dematics, all the AS/RS suppliers for micro-fulfillment, is there a simple, less expensive way to use tSort to get some of the bang for the buck? We came up with an option driven by Covid and everything that happened in the spring and summer of 2020 using our tSort system to sort the items. So you could batch-pick 100 people’s orders. So you’re going down an aisle picking everything for those 100 orders. I’m going down another aisle picking everything for those orders. We don’t have dedicated inventory like the AS/RS micro-fulfillment solutions. But now I go to the back room to a tSort, and I batch-pick at a 5X the rate of what I get if I’m doing individual orders picking. I use automation to sort it out to the individual order. And so now I’ve got a system that quite honestly is a tenth of the cost, a tenth of the space, and a tenth of the lead time of an AS/RS solution that could go into certain stores. Let’s face it; not every store is going to be justifiable to put a 3 to 5 million dollar AS/RS on the back of it or even at every cluster of three stores. And so we think there’s a market segment where our solution that’s store-based could be applicable for at least certain stores for most chains. Danny:– Yeah, absolutely. Micro-fulfillment obviously—if I had a dollar every time I heard—obviously that was a big challenge that everyone was seeing. Relative to some of these changes that you seem to have experienced, relative to the market, and also maybe even internally from how you’re handling workforce, work from home versus people coming back, of those changes that you’ve seen, what do you think, going forward, that is going to look like? Do you think they’ll stay intact? Is it going to roll back? What are you seeing? Mike:– Well I’ll tell you, I really had high hopes—all of us did—that before the Delta variant came out that things would get back to normal by the end of this year. Now all bets are off, so to speak. So where I really hope this goes is that we can eventually get back to where travel is no longer a problem because the travel restrictions have been a real—let’s just put it bluntly—a pain. Our deployment that we did in Auckland, New Zealand as you can well imagine with the shut-down they had in that country, the folks we sent over had to do the full two weeks couldn’t leave their room except for the little courtyard one hour a day. It was really onerous requirements to get those folks on the ground over there to be able to take the system to a go-live status. So we really want to get away from that. As far as in-office staff, when we had Covid hit, obviously everybody started working from home except when you had to be in the office. There’s certain things you have to be there because we are a manufacturer, and we have to test systems and do things. But we’re still in the mode right now where you’re only in the office if you have to be. I don’t know for certain if we’ll ever go back to where everyone’s in the office, every day, all day long. I’m not sure that we’ll ever do that again. It may be a new situation that is a mix of in-office and at home, and maybe a few days in, a few days out in a given 10-day period. The bigger concern for us right now for our business are travel restrictions and accessibility to get to sites and be able to deploy the solutions that our customers are buying. With the Delta variant and the recent developments, I’m really not sure where it’s going. I’m worried that 18 months from now we’ll still have certain restrictions because of folks not getting vaccinated and new variants that may come out. Who knows what might pop up around the holidays? There could be a different variant. Danny:– Yeah, we talked about it earlier about just the uncertainty of everything. We were thinking, hey, at this point that we would be there, all clear. Obviously that’s not the case, and it’s anyone’s guess at this point as to what will happen relative to all the different variables that we’re looking at. Mike:– One other thing on that too, what if a variant comes out that the vaccine doesn’t protect you against? We’re back to square one. Danny:– Yeah, exactly. It’s interesting. We’re starting to see some of that play out a little bit. We’ll see what the future… how that all pans out. I’ll ask you this question. This doesn’t necessarily have to be Covid-related specific or not. But if you had a magic wand—I’m giving you one. What’s one thing that you’d like to see improve or change within the industry? Mike:– Well if I had a magic wand to do anything, Covid would be gone. Danny:– Alright, so here’s the second wand. Mike:– Yes, so that wand doesn’t have anything to do with the industry, so to speak. A magic wand for the industry, there are folks out there that are leaders at firms that have 20, 30 years of using older technology, traditional material handling systems that have been around for decades. And a lot of those leaders have not embraced cutting-edge technology, AMR technology, robotic solutions, et cetera. If I could get those guys to just embrace this new technology, this new frontier, because quite honestly when you think about it, a traditional put wall which many people in the supply chain have used for decades, if you have a system that takes less space, can deploy faster, costs less, and is four times as productive, why would you use the older technology? The same way about traditional sortation systems, whether you’re talking a tilt tray, a cross belt, a Bombay, a slide tray, if it’s less space, more upside capacity, lower cost, higher savings, faster ROI, and by the way with our system, it’s completely portable. You could pick it up and move it to another building. Why would you not embrace the new technology? At this day and time you would think more people would have embraced robotic technology than have. And what we’re seeing is the people who have an imperative, either through their management has decided that they’re going to lead—and think of people like Walmart and Target for examples—or firms that get between a rock and a hard place because they just don’t have a good solution that they can mass-rollout quickly to adapt to Covid and everything else that’s going on. Those are the ones that are adopting this technology more so than anyone else. A lot of traditional firms that have been around for 50, 100 years even, they’re still doing things the way they’ve done it in the past. And they’re slow to adopt the new technology. So if I could get them off the dime, that would be my magic wand. Danny:– Absolutely. Well that makes a lot of sense. Have you seen—you mentioned in your answer there, but just relative to Covid that’s helped accelerate things a little bit more, at least maybe not even they’ve pulled the trigger, so to speak on these solutions, but just say, hey, you know what, we really do need to look at something else because we’ve got too many operational issues or because of the demand and fulfillment needs have risen exponentially? Has that helped further that conversation or even explore new ways? Mike:– Yeah, it has. Before Covid ever happened, we were already transitioning to more of an each-handling environment, fewer full cases going to stores and being shipped to more onesy, twosy type of operation. And when you’re doing and you’re handling an order that has single items, your labor content goes up exponentially. And then Covid just threw JP-4 jet fuel on the flames and made a maelstrom of hot need for ecommerce to lift fulfillment which has higher labor at the same time you had lower labor availability. It was like the perfect storm. And so the firms that are really trying to get ahead of it out there, they’re trying to adopt to robotic solutions that allow them to scale quickly, roll out across their network very quickly, and adopt to this new reality of life. Some of the customers that we had back in ’18 and ’19, they’re now on the path of rolling out an additional 3, 10, 20 sites and cookie-cuttering out our technology even though the technology doesn’t have to be cookie-cuttered. They just rolled it out across their networks. And that’s really driven a lot of our business. The business that we’ve seen that really started in the summer of 2020 when the phones started ringing off the hook and there was a flurry of activity about what am I going to do; can you help? That’s driven into a phenomenal 2021 for us, and it consists of new customers, new applications like the xChange and the micro-fulfillment and then large customers rolling out en masse across a lot of sites. And so our year in 2021 will be our best year ever, our biggest year. We actually turned a profit in 2019, so just turning a—we’ve already been turning a profit, but we’ll turn more this year. Given where we are right now, we’re projecting that we’re going to double or better every year for the next three years. Danny:– Wow. Mike:– We think the market is that hot. Danny:– Well it definitely feels hot; that’s for sure. Congratulations on it. That sounds great. Hey, who would’ve thought? Obviously with ecomm, it’s pushing. It’s crazy. You mentioned that jet fuel was poured on thanks to Covid. One question that I’m kind of curious about for those who maybe are a little resistant to change or adopting some of these new technologies—I’m assuming that most companies say, hey, we want to toe-dip into this approach. They’re going to do some sort of pilot program. What does that look like generally overall? I know that probably depending on the application, there’s many different variables. In general a company comes in; they want to do a pilot program at one site before they roll out. From a timeframe perspective, what does that look like on average? Mike:– Our typical first install is six months from contract signed to go live. If you look at the system running over my shoulder here in the background, it consists of these platforms that the robots run on. It consists of induction stands where you put the items onto the robots. And then the robots sort into chutes, into containers where the items are sorted to. And those could be packages, or those could be individual items for an order going to your home. It’s about a three-month lead time to manufacture and deliver all the componentry. There’s about one month at the beginning just doing detail design to make sure everybody’s on the same wavelength. We’ve got our IT blueprinted out, and we know exactly what messages, all that stuff. Three months to manufacture and deliver, and then we install it, and we turn it on, and we’re walking out the door after six months. We’ve done systems in less time, but that’s typical for the size systems that we’re doing these days. Now once a system has been done, we can roll a micro-fulfillment site out as long as the orders are going one, two, three, four, going down the line, you could install a micro-fulfillment system and have it live in two weeks. Danny:– Wow. Mike:– That’s after all the IT integration is firmed up. You ordered it, so when you knock on the back door, here I am; let me in. Two weeks later you can leave, and the system’s operational. Danny:– That’s fantastic. Mike:– That’s for a small micro-fulfillment, not for a big, large, million square foot distribution center doing 35,000 an hour. Danny:– Yeah, wow. Again if I’m a company that’s sitting there saying, yeah, I need to jump on this, from a lead time standpoint, from a production and installation standpoint is there a backlog right now? If I were to come in and sign today—again, relative to how big my facility is and what I want to do; obviously I know there’s a lot of different variables—is there some sort of standard lead time we need to be looking at? You mentioned three months there initially, but from today? Mike:– It’s just like I said there. You sign a contract with us, we’re typically live and walking out the door six months later. When we’re doing a larger-scale program—we’ve got a program that we’re working on with a customer that’s going to be, the plan is to do 18 sites. The first site took six months. Every site after that is planned to go live one per month— Danny:– That makes sense. Mike:– One right behind the other. That’s the speed at which they want to move. We could do it a little faster if we needed to. These are actually sites that are regional facilities across the country for a retailer. Danny:– Okay, that’s good. Good to know. Obviously it doesn’t sound like it’s a super long time to get something installed and moving and rolled out. That sounds pretty cool. One random question—it’s not a random question, but I like asking executives these questions. We get a lot of different answers, and I love hearing this. Obviously you’ve had so much going on. Being an executive, CEO, president of an organization is very demanding and very stressful to begin with. Then you add a pandemic on top of that, and you add all the issues between labor and supply chain and increased demand, all this stuff that’s going on, having to make tons of decisions without having all the information. What are you doing to stay on top of your game? Mike:– Well that’s an interesting question. There is so much uncertainty right now, it’s hard to really know exactly what you think is going to happen six months from now maybe doesn’t happen. As far as trying to keep our business moving forward, you’ll notice when I talk about all the different models like xChange and partnering with GreyOrange and Right Hand and IAM and AutoStore and Bastian and JPI, all that stuff, and then the new models like our, we came up with a mini. We came out with a tSort Plus, so we expanded our sortation portfolio. We are expanding our software as time goes on. We do research, and we try to think about the real world: what are the problems that people who are running supply chains facing? Obviously there’s the labor issue. There’s also the segmentation of workforces now. It’s nice to have your workers in one area of the building not touching workers in another area of the building in case someone in one pool gets infected. Then the whole building doesn’t get infected. There’s worker segmentation; there’s labor issues. There’s scalability, rapid deployment. There’s a lot of different things, and then there’s combinations of technologies and new inventions like our xChange system to try to automate more steps. And so we do a lot of research and product development trying to think about where the future’s going to be and where could we, with our goal posts and what we’re trying to do, add value to our customers, our shareholders, and to the marketplace? We try to keep on top of that, work very hard to think about where we’re going and what we want to do. And what we’ve accomplished since 2016 is pretty impressive, in my opinion. The other thing that I try to make it a thing to do is, I think it was Ronald Reagan that used to say, “Surround yourself with a lot of smart people” because a lot of people said he wasn’t that smart. Now I don’t know whether he was that smart or not. I try to surround myself with some leaders and some people who bring some fresh thinking, that help with our growth and our projection of where we’re going and help us stay relevant because you can’t grow a business and double or better every year for four years running and one guy be in control of everything. We’ve got to expand our leadership team, bring new blood in, and grow this thing as a joint effort because it can’t all reside with one person. Danny:– Absolutely. That makes a lot of sense. I don’t know if Ronald Reagan said that or not or—sorry, rather you said you weren’t sure if he was the smartest guy in the room or not, but that makes a lot of sense. Surround yourself with smart individuals, people you can get a different perspective and different thinking and outside the box, stay relevant. I love it. That’s great. That certainly has served you well, certainly over the last several months that we’ve had to deal with this and then some. Mike, I really appreciate the time that you have given us to be able to sit down with you and ask some questions via Zoom. For those who’d like to learn more about your products and your services, they can go tompkinsrobotics.com; is that correct? Mike:– Yes, sir, and Tompkins has no H because sometimes people put an H in it, and you won’t get to the right spot. Danny:– No H, that’s good to know. No H; the H is silent and not present. Okay, but again, thanks again for your time and sharing some insights and just sitting down with you just to chat. Mike:– Well thank you very much. It’s always a pleasure to talk with you guys. I’m looking forward to speaking again, maybe a year from now. Danny:– I think we’ll have to do that. We’ll do a little—we’ll see where things are a year from now. Alright, well great. Thank you. Well that wraps today’s IndustrialSage Executive Series with Tompkins Robotics. I was talking with Mike Futch who is the CEO and president. Kind of picking up on the episode that we did an interview about a year ago. So it would be kind of interesting to go check out the previous interview, see where we are today, a lot of great things, obviously. If you are an executive who is not subscribed to the Executive Series, I highly recommend go to IndustrialSage.com right now if you’re not there already, if you’re listening or watching on some social media channel. Go there; subscribe because you’re missing out on some great content like this. That’s all I got for you today. Thanks so much for watching and/or listening. I’m Danny Gonzales, and I’ll be back next week with another episode on IndustrialSage.
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| Hytrol Conveyor Company: David Peacock | 29 août 2021 | 00:26:19 | |
David Peacock, President of Hytrol Conveyor Company, returns to the Executive Series to share what’s changed in one year after the pandemic.
Danny: – Well hello and welcome to today’s IndustialSage Executive Series. I’m Danny Gonzales, and I am joined with Hytrol Conveyor Company, the president David Peacock of Hytrol. David, thank you so much for joining me today on the Executive Series for the second time. David:– Yeah, it’s a pleasure being here, Danny. Thank you. Danny:– Absolutely. Well I’m excited to get into it. It’s been a little bit. I think it’s been about a year or so since we spoke last. Obviously a lot of things have changed since then and continue to change. Before we get into all of that, I would like to, for those who aren’t familiar with Hytrol Conveyor Company, if you could just tell me and our audience for those who aren’t familiar what you guys do. David:– We’re a manufacturer of conveyor systems, whether it’s high-speed sortation or even basic gravity. Anything in between that is what we’re building. It’s the systems themselves, the solutions that we’re deploying. Primarily retail distribution; ecommerce is a big part of it. But it’s the systems that go into those warehouses. Danny:– Yeah, obviously that has had a massive impact over the last 12 to 18 months. When we spoke last, a couple big things that jumped out to me is one, you had a great—talking about how to make decisions when you don’t have a whole lot of information. That certainly was a huge piece of last year, and even now. You talked about how there was a lot of changes that had happened in the industry, obviously a lot of work from home and just trying to battle the supply chain and labor and trying to dodge around shutdowns and keep operations rolling. How has your business changed since the last time that we have spoken? David:– We were in the middle of a lot of change when we spoke last year. I think we’ve worked through a lot of those issues. We now have work from home as a standard practice, but it’s really a hybrid system now as people started to come back to work on July 1st of this year. As an example, our engineering team now works, published 60% from the office and 40% from home, and that varies from person to person. We’ve stabilized that a little bit. Probably the biggest change is, as disruptive as last year was, our supply chain was fairly solid. This year it’s much more fragile, and we have to spend a lot more time trying to figure out how to get the basic components that we need in to build our systems. That’s a big change for us this year. Danny:– Yeah, we’re hearing that across the board. It’s interesting that you say that last year, you felt like it was impacted, but this year seems to be significantly—what are some of the drivers that you’re seeing that are impacting that negatively? David:– One of them is, steel prices have gone up remarkably. If you look back historically over the last three years, steel has been just slightly north of $600 a ton, and right now it’s $1800 a ton. So it’s three times what it was this time last year. It’s not just the price; it’s availability. We’re in a pretty good position. We have a great partner that we work with. But a lot of our component suppliers have struggled. We have actually supplied steel to some of our component suppliers so that they can get us what we need to build products. That’s one of the big changes. I think it’s a result of the extended nature of the pandemic. Everybody had supply chains in place that would allow them to work through short-term disruptions. But we’ve been at this now for close to 18 months, and so a lot of those supply chains have really been impacted and haven’t been able to recover. Danny:– Yeah, absolutely. Obviously steel has been a story for a while, even way before the pandemic when you looked at a lot of the tariffs. Certainly depending on where you were sourcing that steel from and the different kind–were you impacted with that before? Were you not impacted? David:– No; well, we were slightly impacted. About 98% of our steel is domestic steel. We’re actually in the first congressional district of Arkansas which is the largest steel-producing district in the country. We’ve got Big River and Nucor are both huge representatives about 50 miles from us. And so we consume a lot of domestic steel, very little external steel, or international, but that still had an impact on pricing. When you put the tariffs in place, prices went up, but it was manageable last year. This year it’s a huge challenge for us. Danny:– Yeah, absolutely. Triple the cost, you’re saying; 600 to 18. Well at least one thing is nice; you said you’re 50 miles away from there, so from a transportation cost standpoint which I understand that has risen, and there’s a lot of challenges there. Hopefully that has had a minimal impact for you. David:– Yeah, I can’t imagine dealing with that on top of the price of the steel itself, too. Danny:– Yeah, it’s crazy. When did you start feeling those impacts this year? Was that January? What point? David:– Well the way we buy steel, we buy it in advance, and we hold it. So our steel supplier has three months’ supply. It started going up in late fourth quarter, but we all assumed, the projections were that by second quarter it would start to decrease, but it’s just continued to climb. So really March, April, May timeframe is, really started to have an impact, and it just continues to escalate. Danny:– Yeah, wow. Do you see a reversal at any time in the future? What are some thoughts there? David:– When it was at $1500 a ton, I said, “It’s going to go down. This is not sustainable.” And now it’s at $1800 a ton. You talk to the steel industry, they say it’s going to go higher. But at some point customers are going to stop buying our products and demand will drop off. And then the supply will greatly outweigh the demand, and that will drive the price down. It would be nice not to have to go through that cycle, that we could somehow come to a balance where demand and supply meet each other. Danny:– Right, you mentioned how you do a lot of work with warehousing and ecomm, and ecomm being a huge story. It was growing exponentially before the pandemic, but afterwards, obviously we threw gasoline on it. Are you seeing a massive uptick in demand, or at least conversations as people are trying to build out warehousing? David:– Yeah. Our backlog right now, the orders that we have in hand, are about four times what we have historically seen. Really changing the order patterns, if you place an order, the lead times are extended well beyond what is normal. It’s forcing people to place orders now for things that they don’t need until 2022 just so they can get in line. So we’ve seen a huge change in that to the point that, since we last spoke, we’ve opened a new facility in Fort Smith, Arkansas. We originally planned on having about 200 people work there and producing about $70 million. Now, just in the short period of time that it’s been open, we’ve doubled our expectations of what we need to bring from that facility. By the end of the year we hope to have four other people that work in that facility. Danny:– Wow. You’re saying that happened between the last time we had spoken. Was that in the works originally? It sounds like maybe it was, but it got fast-tracked? David:– It was in the works. We were doing a search on where it was that we wanted to go. The state of Arkansas has been a tremendous partner of ours, and so we decided to stay in the state and put a second facility here. We signed the leases on that building on December 23rd. We announced that we were going there on January 4th and told everybody we were going to be producing product by March 1st, so less than 60 days later. We ended up meeting those. We’re continuing to ramp up that schedule, and it’s gone so well with the team that we have in place there that about a month ago the board agreed with us that we needed to put more product in there to try to help our capacity. We can sell as much product as we can build, and so if we can do more at Fort Smith, then obviously that’s the best thing for our customers. Danny:– Yeah, absolutely. It sounds like there’s a lot going on here. Obviously there’s been a lot of changes. We’re talking about the increase in the price of steel, but we’re also talking about a massive demand, work from home options, all these different things. What, going forward, do you think will remain versus roll back? Let’s say specific to demand. Do you see that tapering down a little bit? Or five years, you think that’s just going to keep growing? David:– Well I don’t know that anybody’s willing to risk five years, but I can tell you that we know that based upon the conversations we’re in right now, 2022’s going to be just as strong. We expect to continue to see double-digit growth. I expect this rate of growth to continue for at least two to three years. If you forced me, I would say that I’m hoping that it’s going to continue to grow beyond that, but at least for the next two to three years it’s going to be a huge constraint on demand. Danny:– Yeah, that seems to be the story that we’re hearing, and it makes a lot of sense, especially as you have the supply chain issues that are all across the board, across all industries. I don’t care who you are, everybody’s got something. And because we’re so interdependent, it’s just holding up. Obviously the big one in the news is the chip makers for the automobile industry. There’s all kinds of things. That’s certainly interesting. What does the future of the industry look like to you? David:– I think we’re going to continue to see the transition of ecommerce grow. We’ve actually been surprised this year that brick-and-mortar is doing very well. But I think what we’ve seen over the last 12 months or maybe 18 months we’re seeing an increase in the transition to ecommerce. We’re going to continue to see that for some period of time until we reach that natural balance between retail distribution and a brick-and-mortar environment versus an ecommerce. That’s going to continue to be the driver. We’ve all learned and come to expect that you can order something, and if you’re in Atlanta, as an example, you can get it the same day. If you’re in Jonesboro, you’re going to get it tomorrow. I tell everybody; I get a chance to meet our new employees every week when we’re going through orientation. I tell them the story of my daughter wanting a pair of Hunter boots for Christmas. I didn’t realize, and she told me less than a week before Christmas that’s what she wanted. Well they come out of the UK, but fortunately we got them two days before Christmas because they went through UPS’s Worldport in Louisville, and we’ve got a bunch of conveyors there, so our conveyors helped me make my daughter happy for Christmas two years ago. It’s those types of things that we’re going to see continue. We’ve all been trained that we can get something much quicker than we thought we could get it, even two or three years ago. Danny:– Absolutely, you’re 100% right. We are trained, whether it’s information or product, it’s boom, we have it. And so you’re 100% right. That makes a lot of sense. Let me ask you this: if you had a magic wand, and you could solve whatever industry challenge or problem or the opportunity, what would you solve? David:– First I would beg for two because there’s a short-term issue that needs to be solved, and a longer-term issue. The short-term is supply chain. The disruption’s at a place, whether it’s computer chips, tapered tubes, steel, all those things, we need to put some things in place so that we can eliminate some of the disruption being caused by the supply chain. But that’s short-term in nature. That’s going to need to work itself out. The bigger challenge—and if I only get one, it’s going to be in manpower. Employee development, the recruiting, the retention of folks, making sure that we have the people because those are the ones that are going to go solve the supply chain issues down the road. That’s what’s going to make us successful. We do a lot of things here. I can’t remember last time we spoke; we actually have a person on staff who manages our academic outreach. She deals with the universities. She deals with the technical colleges, and she even deals with the high schools to make sure that they understand what the workforce needs to look like from our perspective, but also helps us understand, what can we do to help them be successful? So it’s a two-way partnership. But it all comes down to having the people you need to be successful. Danny:– Yeah, absolutely. That makes a lot of sense. Again, that’s a big story we’ve heard. This was pre-pandemic, but obviously now with massive increases in demand, that makes it even that more important and challenging. And so yeah, absolutely, having the right people and having people trained and ready. Have you seen success in those programs where more people are coming in that are more—I guess would you say excited about working? Sometimes we hear that maybe they’re competing against people who might—I want to go work in Silicon Valley, or I want to go work over here. I want to work in these different areas. And I feel like, eh… Is that one of the challenges that you guys have faced? David:– You have to divide it into different skillsets. It’s a relay team; everybody has to do their part. Let’s talk about engineers for a second. In the last 18 months, we’ve lost one engineer out of a group of over 140 engineers. We’ve only had one engineer that left the company. So you can see that the work being done both to recruit the right people—we just finished last week; we finished our intern program for the summer. We had 10 folks that were here. We do things that—we pay for their apartments while they’re here, if they’re from out of the city. They obviously get paid. We have a very structured program. We give them a challenge that they get to go work on for that eight-week period of time. It has become a very competitive slot to become one of our interns, and that’s because of the work that the team is doing to attract the very best. We see that as the first opportunity to engage with those students, with the future engineers. Because of the success of the program, we’re getting the types of engineers that we want that feel challenged. And then we continue that same environment once they get on board. As a result our turnover has dropped to very little. Now I can be superstitious on occasion, so I hope I haven’t just jinxed us. But it has worked out very well for us. And I think if we continue to do those things, then we’ll be successful. You get out in the shop—in the shop those folks are motivated in a different way. Not good, not bad, it’s just different. Their expectations are different, so how can we help them stay safe, make a good wage so that they can take care of their families, and create opportunities? And so we have a path for everybody who comes to work here. We don’t want you to be here for three months. We want you to be here for 30 years. And so we’ve laid out paths that if you come in and you work in the paint system, but you want to advance to something else, then we help you understand what’s required to make that happen and then help you move in that direction so that you continue to stay challenged in the organization. And so that has helped us in that situation as well. I’ll tell you, in Jonesboro we’ve got 1400 people. We’ve hired 500 people so far this year, but we’ve also lost a significant number of folks because they come in for whatever reason; we don’t retain the folks that we need at the same level. So while we’ve only increased the headcount by about 125 people, we’ve had to hire 500 people to make that happen. That’s an ongoing challenge. Northeastern Arkansas, unemployment is below 4% again. It’s a very tight labor market already in northeast Arkansas that we’ve got to compete for. Even in Fort Smith, it’s a little bit better in terms of unemployment and recruiting folks, but we’re doing things. We put air conditioning in the facility. We’re the only manufacturer in Fort Smith that has an air-conditioned manufacturing facility. Danny:– Wow. David:– It costs money to do those types of things, but if we want the quality of people that we need to be successful, then it has to be a win on both sides of the equation. Danny:– Yeah, absolutely. That makes a lot of sense. We’ve been hearing a lot, very similar stories across the board, obviously. It sounds interesting if your unemployment rate is lowering a good bit. I know part of the story—good, bad, or indifferent with federal unemployment—that was a huge challenge with trying to, especially when we’re talking about more warehouse workers and working on the shop floor. That certainly was a challenge. Did you guys go through that at all? David:– Oh, absolutely. Trying to go out and recruit people has been challenging. For all the good intentions, some of the unemployment benefits have actually hampered us attracting the people that we need. You’ve got to make sure that people are taken care of, but the opportunities to work exist. And so let’s not incentivize them not. And that’s one of the challenges that we’ve been battling. Hopefully that’s going to resolve itself fairly quickly. Danny:– Have you seen that taper down a little bit now that—I know that unemployment’s supposed to be phased out in September. I believe it’s mid-September, so we’re probably six weeks out or so from that. Have you seen any things loosen up a little bit? David:– Well Arkansas was one of the states that opted out of that program in June, late June actually, the 26th. And so that has helped. There’s some back and forth about whether the courts have now weighed in, and so by September that should go away completely. And I think that people are starting to see that, hey, it’s not going to last forever, and so they’re not making the decisions on careers based upon that being a long-term program. So we are starting to see some benefit from that. Danny:– Yeah, obviously a lot of challenges. Who would’ve thought? I can only imagine because I haven’t done this, but running an organization your size is fraught with challenges to begin with. But you add in a pandemic and everything there—my hat’s off to you and to all leaders who have had to really face this. It reminds me of our conversation we had last time we talked about having to make those decisions with very little information and having to move and maybe sometimes you’re making them based off of gut with as much data as you can. But when you have incomplete data, what do you do? My hat’s off to you for that because I know that is not easy. David:– Well it helps to have a great team that supports those decisions. There’s not one single person that’s responsible, whether it’s my HR folks, the ops folks, the engineers across the whole organization, everybody’s working hand in hand. It’s how you develop your team leading up to the point that you need this. We’re being successful now because of the work that was done before the pandemic. If you’re in the middle of a crisis, that’s not the time to figure out how to work together as a team. The folks that I have here have done a remarkable job keeping us in operation. Danny:– That’s fantastic. That makes a lot of sense, absolutely. So as the leader of your organization, what have you done or what are you doing currently to stay on top of your game? David:– I need to understand where the industry’s going and what the customers are needing. But it goes back to the previous question we talked about, if I could fix one thing. It’s people and making sure that I have the right folks. And so I spend an awful lot of my time, rightly so, engaging with people in the shop, engaging with the engineering group, and just touching base, understanding what the challenges are that they’re facing. How can we help them be successful? But it’s really about staying connected, even outwardly. We have a fantastic network of integration partners, and going to visit those. We’re picking back up the pace on how often we go out. Tomorrow I get to go visit one of our IPs. I had dinner with one of our IPs last night. Later in two weeks I get to go and spend some time with about 20 different individuals. How do I stay plugged into those folks so that I understand the opportunities that they have and how we can help them be successful? It’s all about people, whether it’s internal or external. Danny:– Absolutely, yeah. Well David, I really appreciate your time with us today on the Executive Series. You’ve shared a lot of great insights and information. I know a lot of other leaders are going through the exact same thing, and I love your view on everything, and I love how you mentioned obviously one of the big challenges with being people, and how you’re actively engaged and just getting to know people, understanding their challenges, have some empathy, and then figure out, okay, how can we help solve those challenges? It’s all connected, right? For those who’d like to learn more about you, what’s your website? Where can they go visit you? David:– Our website is www.hytrol.com, and you get a chance to meet a lot of our folks if you go there. We’ve got a lot of great videos about the people who make up Hytrol. I would encourage you to go do that. Danny:– Excellent, alright. Well go do that if you’re interested in learning more about Hytrol. And you should because they’ve got a pretty impressive company. So David, thank you so much for your time today. David:– Thank you. Appreciate it, Danny. Danny:– Any time. Alright, well that wraps up today’s IndustrialSage Executive Series with Hytrol Conveyor Company with David Peacock who is the president. So that’s all I’ve got for you today. Listen, if you are not subscribed, you need to go to IndustrialSage.com right now, and you need to go ahead and get on our email list so you don’t miss out on great interviews like this and other content so that you can learn from other leaders. You can see what’s going on in the industry, stay on top of your game, and just take advantage of all of the content that we have at IndustrialSage. So that’s all I’ve got for you today. Thank you so much for watching or listening. I’ll be back next week with another episode on IndustrialSage.
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| Xometry: Aaron Lichtig | 15 août 2021 | ||
Aaron Lichtig of Xometry shares the ups and downs of going public, starting a podcast, and navigating supply chain in a post-covid world.
Their platform offers not only custom 3D printing services and additive manufacturing, but also CNC machining, sheet metal fabrication, injection molding, and urethane casting. Danny: – Well hello and welcome to the IndustrialSage Executive Series. I’m Danny Gonzales, and I’m here with a company that you’ve likely heard of in the news lately, very exciting, a company called Xometry. And I have Aaron Lichtig who is the vice president of customer marketing joining me for the second time on IndustrialSage. Aaron, thanks for joining us again today. Aaron:– Danny, it’s good to see you. Thanks for having me back. Excited to be here. Danny:– Oh, well I’m excited to jump in. Obviously there’s been a lot of change with Xometry for the better. A lot has happened since we spoke last, and I want to jump into all that. So for those who aren’t familiar with Xometry and who hadn’t seen your previous interview with us, can you just tell me who you guys are, what you guys do? Aaron:– Yeah, so Xometry is a two-sided AI-driven marketplace for manufacturing on demand. So you can think of us like Uber or Airbnb where you have supply on one side. We have over 5000 machine shops around the world who are part of our network, not just machine shops; 3D printing facilities, injection molding facilities as well. And then on the other side, we have engineers, designers, purchasing managers who are needing to make parts. A couple things make us unique. We have instant quoting and great AI-driven technology that is able to analyze the parts and give you pricing and lead time options instantly. We have a wide range of manufacturing processes available, 3D printing, eight processes that we instantly quote now. We just added binder jetting in our instant quoting engine, metal binder jetting. We also do CNC machining, sheet metal fabrication, injection molding, urethane casting. Those are all available on our platform. And then on the supplier side of the marketplace, they come, and they’re able to take those jobs, get revenue, keep their cash flowing in to help their businesses stay in business, their businesses to grow. And we continue to innovate on that side of the marketplace as well. We now offer the Xometry Advance Card, the Xometry FastPay that allows small manufacturing facilities access to cash up front that Xometry provides when they take a job from our network. So we continue to innovate on both sides, and the business continues to grow. If you want to check us out, try the instant quoting engine. You can go to Xometry.com, X-O-M-E-T-R-Y dot com and see all the things that we’ve been up to. Danny:– That’s exciting. We’re seeing a lot—we were talking about it a little bit before, some of the innovation and some of the new technology’s starting to come out. I love the Uber or the Airbnb-type models. I think you’re going to be seeing a lot more of those across many different industries and different applications. I think it’s really exciting. As far as, there’s a lot of things that have happened since we spoke last. Probably one of the bigger ones is that you guys went public recently. Maybe you could tell us a little bit about that and some other things that you guys have been up to. Aaron:– Yeah, well that is the big news over the past couple of weeks. We officially became a public company listed on NASDAQ under the symbol XMTR on June 30th. So as of a couple weeks ago you can, not just make parts through us or take jobs from us. You can be an investor in our business as well. With any company, last time we talked, we were still pretty small. That was two, three years ago, and it’s obviously a big moment in the evolution of any company, especially one in our space. But for us, we still see it as day one. Manufacturing is an enormous market, and we want to continue to digitize it, continue to change it, make those markets as efficient as possible and be the marketplace for manufacturing in the United States and around the world. We’ve got a lot of work ahead of us to get there and a lot of things we want to do to serve our suppliers and serve our customers better. Going public will help us to do that. So yeah, that is the biggest news in Xometry land over the last month or so. Danny:– Yeah, well congratulations on it. I know it must’ve taken a tremendous amount of work, but it’s a great achievement. So congratulations. Aaron:– Thank you very much. Danny:– Yeah, so let’s talk a little bit too about Covid, obviously. I think it’s hard to not talk about that relative to when we spoke last. Now, you said, going public is very big news, but how did that affect Xometry, and what were some of the results of that? Aaron:– Yeah, well I think like any business—you’re right. Covid has really shaped our industry and manufacturing in general over the past year or so, and I think it will continue to. But there are really two major trends that Covid accelerated that are relevant to our business and will continue to be relevant to how we operate moving forward. The first is continued digitization of manufacturing. Everybody went from, they weren’t in their place of work for periods of time. They were probably at their house. With Xometry, with instant quoting you can upload parts from your house, get a quote, order your parts, get them sent right to you no matter where you are. You don’t have to have a physical presence. You can do that from anywhere. And I think that trend will continue to accelerate, making those processes more digital versus handing a lot of things back and forth. We want to make that even more efficient. I think the second big trend is around supply chain flexibility and agility. During the Covid period, you had a lot of uncertainty. You had times where the disease was rampant in some places but not others. There were certain restrictions put in place by different national, state governments at different times. And we’ve also seen this in areas outside of Covid. Climate change is a major factor and can cause disruptions. You have unexpected things like the ship getting stuck in the Suez Canal that are beyond anyone’s control or ability to predict. And I think people are starting to realize and will continue to realize the value of a network-driven approach like Xometry has where you have many options. We have over 5000 partners all around the world, primarily in the United States where you can—something happens somewhere in one part of that network, the network is self-healing. You’re able to move a job to another place. You’re able to find capacity where it is open. And I think businesses will continue to experiment with different approaches there including using manufacturing networks like ours, but also potentially other options. There are many other ways that companies deal with that as well. So I think those two trends, we’ve seen those from the beginning, and they’ve been a big part of our model. And they will continue to be; we have seen those trends accelerate and get stronger over the past couple years. Danny:– Yeah, I think it’s interesting. We’ve heard this story over and over again. If I had a dollar every time I heard about resiliency… But it’s critical. It’s super important, as we all learned. It was interesting hearing a lot of stories of companies that had some of these supply chains, or the resiliency was built in versus companies that hadn’t. We were hearing stories, I remember. We talked to Flex Manufacturing, and they were able to, had never done anything, I think it was in the ventilator space. Within, I believe—and don’t quote me on this–I want to say it was six weeks they were able to completely go through their R&D process and get something on their manufacturing line and get it out there. It was because of the diversification in their supply chain and how they were able to do that and having some resiliency. So it’s interesting hearing these different stories. As you mentioned, these trends that you’re seeing or have seen, what does the future look like? Do you think those are going to stay? Is there going to be pull-back from there? Is that going to increase? What are you seeing or thinking? Aaron:– No, I think they will continue to be there. I think Covid was more an acceleration versus a blip in the existing trends. I think the digital technology will continue to get better. We will continue to add more manufacturing processes as time goes on. And so I think you will be able to buy a lot more of those parts digitally over time. I think that will definitely be there. And flexibility and agility will play out in different ways. The next thing that we see may not be a pandemic. It may originate in a different place. It may be something we can’t anticipate. But I think the key is right now if you have a supply chain that is only cost-optimized, single point of failure, it’s going to be tougher to deal with that. We live in a world that is more volatile than what we saw a decade ago or 30, 40 years ago. You need to have some redundancy built in. And something like a network-based approach gives you those options and also gives you, even if there is no crisis, you have a lot more flexibility. You have a lot more different jobs that can be done, a lot more different suppliers and technologies at your fingertips than you would have otherwise. Danny:– Yeah, exactly. I just think it’s very, very interesting. Like you said, a lot of the stuff is accelerating, and I think we’re going to continue to see that. It’s—I don’t want to say exciting—well, in certain areas, yes, it is exciting to be able to see that innovation. A lot of this was happening beforehand, and it was very hot to begin with. The gasoline just got poured on it for better or worse. And I think that that does create—there’s a lot of interesting opportunities that have been created, and there’s a lot of innovation that has been pushed, the need for more Xometrys in the world. One thing that I’d like to ask is that, if you had a magic wand right now and you could just snap your fingers, what would be that one thing that you would want to change or see updated or improved in the industry? Aaron:– Yeah, at large, a couple trends are really interesting to me. I’m still fascinated by 3D printing and everything that is becoming possible there. You always want some of those trends and the really cool stuff that’s out there to move even faster. Everything from continued better technologies for production parts—I think that will continue to be a trend that’s going to reshape a lot of different industries—to some of the fun stuff in 3D printing, like we made parts for an entrepreneur who built one of the first chocolate 3D printers. You can 3D print some chocolate. It’s really cool. It’s not going to reshape industry, but it’s going to be a cultural touchstone for a lot of people. It’s going to be something that people use and have fun with. So I think that is a big one. And I think in general, I love the fact that manufacturing has become more digital overall and has become more accessible and easier to use. Xometry’s mission is all about democratizing and making manufacturing accessible to more people. Anyone, whether you work at NASA or you’re an individual entrepreneur or an artist, you can come to our website and take advantage of the full range of capabilities that we offer and that manufacturing suppliers in our network can provide. It’s not like you have to be a big company to get access to some great technologies like Carbon DLS and HP Multi Jet Fusion which are really at the cutting edge of 3D printing. You can come do those tomorrow, get great parts shipped to your door in as little as a day in some cases. I love the democratic spirit of where manufacturing and digital manufacturing in general is heading. Manufacturing as a service does allow innovators to move faster. If I had my magic wand, I would want everyone to be able to do this because we need more innovation in the built world. I think being able to access that through our platform and through other sources as well, you can make five prototypes very quickly whereas before, you maybe could only make one slowly. Over time, those advantages are going to compound. You know this as a marketer, too. The first thing you do doesn’t always work. It’s really all about— Danny:– What are you talking about? Aaron:– How fast you can test things, how fast you can grow, how fast you can push forward and get feedback from your customers. And so if anything, I would just want to wave that wand and move it faster and make it accessible to more people around the world. Danny:– I think that’s super exciting, that accessibility piece, the democratization as you were talking about there. To be honest with you, I’ve always wanted to develop some sort of product. I don’t have that engineering mind. I have great admiration for the people who do that. You can see just some amazing innovations. But I think by opening that, that does open up the playing field so that hey, I have an idea. We want to do this. Let’s prototype something out there. To be able to do that I think is very, very, very cool, and I’m sure you probably have a lot of stories, like you were mentioning the 3D printing chocolate that you’re enabling people to be able to do, large and small. Aaron:– Yeah, we have examples from some of the largest organizations in the world where we worked with NASA on parts for the international space station. We worked with BMW on factory tooling for some of BMW’s best and most advanced manufacturing facilities. But we have also worked on some really interesting projects with smaller entrepreneurs. Building a 3D chocolate printer is pretty cool. We also worked on a great project with an organization called ClearMask which made masks that are transparent. During Covid it became very relevant to everyone. It was initially started by an entrepreneur who was hearing impaired, and that is a major challenge for people who are hearing impaired in a medical setting or another setting where masks are required. So helping to make that innovation come to life is really cool and shows that level of, we work with a NASA, but we also work with people who are just getting their ideas off the ground. Danny:– Absolutely, I think that’s very cool. I want to pivot to you a little bit now. I would be curious to know, what are you doing yourself—this could be because of Covid; could be not, whatever–to stay sharp? What are you doing to stay sharp as a leader? You’re VP of customer marketing over there. You have any magical things you’re doing? Aaron:– Yeah, in addition to continuing to learn about everything that is available from a marketing perspective and refined channels of messaging, I think one of the big ones that’s different from the last time that we talked was, I launched my own interview series, so trying to be the next Danny Gonzales. A poor job of it, but talking to some of the most interesting engineers and forward-thinking creative people in the space of engineering and design. Just by talking to them, it gives me a good perspective on what’s going on in the industry, where things are heading. I’ve talked to some really fascinating people from all different realms, professional racecar drivers, BattleBots contestants, people who are working at a variety of companies, coming up with different ideas. It helps me stay in touch with what’s going on in the marketplace and also to think about some things that I hadn’t really thought about. I had a guest—and this was before the Mars landing, well before—talking about how 3D printing can be used to take Martian dust and turn that into a material that you can use to 3D print real, physical objects in an extraterrestrial setting which I had never really thought about, but it’s just at the far edges of what some of these really cool technologies can do. Xometry someday, we might be active on Mars, have manufacturing partners up there as well. It’s pretty awesome to think about. Danny:– That’s super fascinating. I think that’s awesome. What made you want to kick off the podcast? What’s the name of it, and then what made you say, “Hey, I want to do this”? Aaron:– Yeah, it’s called Ok Xoomer, in reference to, “Okay boomer,” but I’m too young to be a boomer, so we went with that. What made me want to do it, I think during Covid, I think a lot of people were consuming more content, and there was a bit less of that human touch. On a personal level, I just missed that, talking to interesting people every day that I got to do that when I worked at Xometry and in prior roles got to work with fascinating people who were sitting right next to me. I didn’t have as much of that anymore. I just wanted to get out there and keep learning from people, keep interacting with people, and sharing that type of knowledge with Xometry’s customers and suppliers. Danny:– That’s great. When did you start it, and what results or what have you gotten out of it? Obviously you’ve been able to talk with really interesting people and whatnot, but from a marketing standpoint, or for sales? Aaron:– I started it, I think we recorded the first episodes in April of 2020, so it’s been over a year now. We have 61 episodes. They’re on Xometry’s YouTube channel. We do it mostly over video format, over Zoom. What have we gotten out of it outside of thinking and ideas? We do get them out on our social platforms. We will send them around to customers and partners who are interested in them and share them generally with different communities online. It’s not the primary marketing vehicle for Xometry or anything like that, but it is a way for us to introduce ourselves to some new people and have them see Xometry as someone who’s providing them interesting, entertaining, and informative content and not just a company that is a manufacturing business with a quoting engine. We are about ideas, and we are about being on the cutting edge in a number of different areas. Danny:– Awesome, excellent. That’s really cool. My mind is racing a little bit on that. I have been seeing this a lot; obviously we’re seeing this before a little bit more, and this is off-the-cuff here, but do you think, or are you seeing that companies have, there’s going to be a growing need from a content standpoint to be able to either create their own content, or community, rather, around their content and around their brand? It seems to be part of what podcasts and these different types of content series are doing. Are you seeing that? Is that something you think in the forward years, that might be a bigger thing, or fleeting? Aaron:– Yeah, for sure. I think content and community are important for just about every business in every industry. Humans are social, and humans do like to interact with other humans, and I think more so after the pandemic where we had periods of time where that was more limited. I think that it will continue to be something that’s huge. Xometry, we have a supplier community now where our suppliers can go to our site and discuss things with us as well as with each other, which is really interesting. There are a variety of other interesting communities online that are starting to develop in our space, whether they’re more bulletin board-style or things like Slack Communities and Zoom gatherings that are late at night with people from around the world. I’ve done some of that. We did our first Clubhouse event back in February, which was a cool experience and met some great people there who ended up being guests on my interview show. I think people are hungry for community, and having a direct voice to your potential customers is always a good idea. Danny:– Yeah, absolutely. I’ve really enjoyed this conversation. We traversed quite a few different topics here, but I think it’s super interesting and fascinating. Obviously you guys have got quite an interesting story, and it sounds like it’s just beginning now. I’m excited to see where things are going to go. Thank you so much for spending some time with me today and with the IndustrialSage audience and community. Like I said, congratulations with the achievement of going public, and obviously like you mentioned, a lot, a lot of more work ahead. So we’re excited to see what you guys do. Aaron:– Thank you very much, and it’s a great moment for us and a testament to the work of many people and certainly to all the hard work of our customers and our partners as well, making what they make and building what they build. That’s really what it comes down to. That’s the most important thing. Yeah, we look at every day as a new start and day one and a lot more opportunity for us to push forward and better serve the customers and suppliers on both sides of our network. Danny:– Well excellent. For any of those who are interested I’m sure you could check out, go to Xometry.com. Aaron:– Yeah, X-O-M-E-T-R-Y. Danny:– Xometry.com, and then the podcast, I’m sure we could find that on iTunes or Spotify or something like that. Aaron:– It’s on Xometry’s YouTube channel. Danny:– Oh, that’s right. You mentioned that. Aaron:– That’s the primary vehicle, so check out Xometry’s YouTube channel. Just type in Xometry on YouTube, and you’ll see all the episodes there. Danny:– Cool, we’ll make sure to put the links on there for people who are interested in learning more about Xometry and certainly the podcast, they can go take a look at that there. Aaron, thank you again so much for your time. Maybe we’ll do a follow-up here in another year or two. We’ll see what happens and go from there. Aaron:– Sounds good. Danny:– Alright. Aaron:– Thanks again for having me, Danny. Danny:– Thanks for being on. Alright, well that wraps today’s episode, another great episode on the Executive Series. I think it was a fascinating story. I think it’s really interesting to hear about Xometry and how they’ve gone public, obviously hearing a little bit about what Aaron is doing to stay on top of his game. I love the fact that they launched a podcast doing this in the midst of Covid and just building communities and learning from other people and really staying connected that way. Anyways, that’s all I’ve got for you today. Thank you so much for watching or listening. If you’re not subscribed, I highly encourage you to go to our website, and you can subscribe there, get on the email list there. Or if you’re on Spotify or iTunes, anything like that, you can certainly subscribe there. So that’s all I got for you. Thanks for watching. I’ll be back next week with another episode on IndustrialSage on the Executive Series.
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| CCS Dualsnap: Paul Konrath | 25 juil. 2021 | 00:40:01 | |
Paul Konrath of CCS Dualsnap returns to the show to share about how his career started and how their company fared during the pandemic.
Danny: – Hello and welcome to today’s IndustrialSage Executive Series interview. I am joined by Paul Konrath who is the president of Custom Control Sensors. Paul, thank you so much for joining me today. Paul:– Pleasure. Danny:– Well Paul, this is not your first rodeo with us. This is the second one. We did an interview with you a couple years ago, and I think this was before we actually had the Executive Series. So excited to have you back and learn more about you and about your company, Custom Control Sensors. Paul:– It’s a thrill to be back. Thank you very much for remembering me and inviting me back. Danny:– Well I’m excited to jump into it, learn more about you. We were talking about some stuff in the preshow here which I think is going to be very interesting. But before we get into everything, maybe if you could just let me know—I know, but the audience—who Custom Control Sensors, who are you guys? What do you guys do? What’s your history? Paul:– Sure, sure. We’re a 60-year-old company that has developed, designed, introduced pressure and temperature switches and sensors, mainly into the aerospace, defense, and industrial markets around the world. We have global markets, and almost every kind of plane has our products on it. Lately we’ve been introducing new technology, new types of sensors to especially aerospace, but same with industrial. We’re out here in California which is our main location. But we operate around the world, so it’s a global company. It makes it kind of fun. Danny:– Excellent. Well I guess we’re going to get into this here in a little bit more, but before we dive a little bit more into the business and challenges that you’re solving, this is the time that we’d want to get to know you a little bit better and learn how you ended up as president here. How did you end up with CCS? How did you end up in the engineering space? Take us back. Paul:– Okay, yeah, and it’s funny. You had given me some homework to do before we got together. It did make me think things I’ve never really thought much about. Me, I’m a Midwesterner, and one day I was filling out a form to go to school. A good friend of mine, he actually became my brother-in-law eventually, suggested engineering. At the time it was simple; okay, fine, I did that. Next thing I knew I was five years of engineering under my belt. It was a good time to be studying engineering. I think it’s a better time now because engineering runs the world in a lot of ways. Anyway, I came out of school and wasn’t quite ready for the workforce. I did some interning. I did some co-opping. Those are all good programs. So I had a little experience, but I was a lousy engineer as far as I could tell. So I got an opportunity to travel; then I went back into grad school and got an MBA which, in my eyes, I was blessed by a professor who, at the time, could see the benefits of an engineer with a sense of business. The irony is all through engineering school, we picked fights with business students because we thought we were better than them. But in the end, as my father one time said, it’s the business guy who hires the engineer. So I got a business degree as well, and that really put me in a good position. And as I mentioned, I did some traveling. I biked around Europe for a summer which taught me a lot about myself as well as travel and taking on new challenges. I had the benefit of growing up as being in the Midwest, coming out of Milwaukee which is my hometown. You could travel around America which we did in an old, beat-up station wagon and see the country and realize you can leave Milwaukee and go other places and survive. And so I came out of school, and pure luck, somebody called me out of the blue and offered me an opportunity with a company, Texas Instruments at the time. I had a couple requirements. I’m an engineer; okay, I wanted a company that was technology-based, well-respected, well-known. TI had a good reputation. Obviously a heavy driven engineering company. On the other hand, they had some of the worst sales and marketing experiences because they were engineering-driven. So it was a great time to go to Texas Instruments. Nobody could second-guess me because there weren’t that many people there who weren’t engineers or who had a business degree. So that got me started, and I moved out of Milwaukee. It’s a great place to be from. In fact, I was just there over the Fourth of July, and it’s still a lot of fun in the summertime. But I never looked back. The funny thing was I went to Texas Instruments in Massachusetts and New England. I was there mostly in marketing and got into sales. Somebody suggested to me one day out of the blue, hey, you might make a good salesman, being an engineer. I never wanted to be a sales guy. All I could think of is used car salesmen. And this is no offense to used car salesmen because I respect them now. But at the time, oh, my God, I don’t want to be a sales guy. And yet I took the chance, and that’s something I think somewhere along the line I learned about, hey, if it’s a reasonable challenge—reasonable meaning, what’s the worst that could happen? Go on and take the chance and see where it goes. So I moved into sales, and that made me a better marketing person when I went back. At the time, I was middle-career I suppose you could call it, and I was getting a little frustrated. Again, another person came up to me and gave me some good advice, said you may not be thrilled to be a mid-level marketing guy at Texas Instruments, but—his words, some of these, they always haunt me as being too simplistic—but it was bloom where you’re planted. Now, if you picture the guy who told me that, those words coming out of his mouth did not–he’d always been kind of a hard-bitten kind of guy, and here he was talking about flowers and bloom where you’re planted. But the interesting thing was, the message I took was maybe this isn’t the perfect place I want to be in, and maybe I’d like to be someplace else. But do the best job you can while you’re here. And people noticed. Next thing I know, somebody else came along and took a chance on me, partly because of that attitude. This may not be the place to be, but I do a good job—and moved me into operations for a while. That was an eye-opener. When you’re in sales and marketing, you can say all you want because it’s expected a little bit. I’m in marketing; I’m in sales. But when you’re in operations it gets a lot different. And to me that was one of the hardest jobs I ever had, dealing with people on a daily basis. You become part of their—you hear their problems. You hear everything about their families, and you still try and get work done. But it was a good experience. Then out of the blue I got a call to another company that was headquartered back in Milwaukee. It might be fun to work for that company. Again, it was out in the East Coast, but I could go back to Milwaukee and visit my family “on company time,” as they would say. So I did that for a few years. At the same time I kept my—I wanted to work internationally because the world’s getting smaller, and if you don’t understand—especially in our industries, industrial, aerospace, even defense in some ways—if you don’t understand what’s going on outside your local office, you’re missing opportunities. So I had done a good job in marketing and some program management. As luck would have it, my boss became responsible for a company over in England. He was one who couldn’t relate to the British, so he asked if I would. So I went over with my family for a couple of years, had a nice time, big experience, broadened my horizons. That opened up other doors for me. Again it was a challenge. Do you want to move your family to England or anywhere? It was a reasonable challenge. It was a certain risk, I suppose. Who knows what happens? When it came time to coming back, we ended up in California which probably wasn’t my wife’s plan, but it was an acceptable plan. The kids loved it, so here we are in California. And I had worked in large corporations for most of my career. I said next time I move, I want to move to a smaller company, a little flatter organization. The opportunity arose, and I’m in a relatively—CCS, Custom Control Sensors, privately-held company. It’s been under the same general family for 60 years. The owner is my boss, and it’s a very flat organization. So that got me here. The pandemic tossed a few curves at us, but eventually—and one of the reasons I came here, again similarly like when I went to Texas Instruments, the owner said, “I really don’t know much about sales and marketing.” Great; you won’t be second-guessing me, necessarily. I suddenly became the smartest guy in the room when it came to sales and marketing. That doesn’t happen in a big corporation where you have a lot of layers and a lot of people second-guessing or telling you this or that. Your ideas, you can’t please everybody all the time. Here it’s a lot easier to please. I only have to please one or two people, and I’m okay with that. That’s one of the attractions of a smaller business. Danny:– Yeah, obviously you have a very storied career, going around and with travel and not just from a geographic standpoint but also from different departments, obviously going from marketing to sales. You see that pretty common, or sales to marketing. But ops is definitely, it’s where the rubber meets the road right there. That’s when the ops guys start yelling at the sales people. What the hell did you just sell? We can’t do this! Paul:– What were you thinking? But I remind him that nothing in a company happens until something is sold. Danny:– True. Paul:– The rest of you guys can all just sit around, and until the sales guy produces, you’re all support. Granted, to your point, once I sell something, then I’m hoping the operations guy believes me and makes it happen. Danny:– I don’t know what you’re talking about. We’ve never run into that here. I’m curious. You said that you did engineering. What kind of engineering did you study? Paul:– I started as a biomedical engineer because I had great dreams of designing and making artificial limbs. But I found out that the school I was going to, their definition of biomedical engineering was essentially pre-med, which I could not see myself as a doctor. So electrical engineering was a huge overlap between—in fact, if you walk into an operating room today, it’s more of an electrical engineer than it is a doctor in some ways. Now they have, the doctor drives a robot that does the surgery. So I went into electrical engineering and stuck it out. I’d still be there if it wasn’t for some good friends and some fraternity brothers that helped me out in tough times. I’m not a very good engineer, but I get the concept. Danny:– It sounds like that’s helped a lot. Obviously it’s very difficult to get into a very technical—getting into technical sales or anything. Obviously when you were at TI, from a marketing standpoint, being able to relate to the audience, depending on who you’re selling to certainly you’re going to likely be selling to other engineers. There’s other stakeholders involved there, but being able to at least somewhat talk the same lingo helps tremendously. And then obviously in operations, that’s kind of a given. Paul:– You’re absolutely right. To be able to walk into somebody and have a technical—one of my focuses was, I want a technical product. When I interviewed with companies, and when I looked at a company, I would look at the product. Is it technical? Are they a leader in the marketplace? Are they well-respected and have a great quality reputation? Those are the three deciding factors. It didn’t matter where they were located because I’d move around. And it didn’t matter a lot of other stuff. But if it was a good technical product, well-made, highly reliable and a good quality reputation, that makes my job as a sales and marketing person all the easier. Danny:– Throughout your career you talked about that there were different people that approached you, said hey, you’d be good in sales, or hey, do you want to move your family to England and help. What’s one person or moment, maybe, that comes to mind that really, you think had a big impact? I know there’s probably multiple. Most of the time there is. But what’s one that stands out? Paul:– Probably one of my first bosses, Ed Iannotti. I’ll always remember him because, one thing is he took a big chance on me. He was willing to look at someone and bring him into an organization and stand behind me and give me some sense of direction, but at the same time freedom to do what I wanted to do, to learn, to fall, to trip a little bit, nothing fatal. He also taught me that I could have a relationship with my “boss” where it wasn’t all one way, that he would actually ask me what I thought and use my opinion. And here I was, a rookie, newbie, whatever you want to call it. He taught me early on that everyone has an idea. In my position now, I’m more of a consensus. I’ll sit in a meeting and try to draw the quiet ones out because they probably have good ideas, but they’re just overwhelmed by the other ones. That was one of the things that taught me about listening. Listen to the people, working with the people under you. I don’t like to use that term. But that was one; he was a big one, took a shot on me. And so did Ray Tarangela who gave me the operations job. I’m a sales guy, a marketing guy. I had very little, if any, operational experience. And he said, I’ll take a shot on that. And he taught me more about operations. Again, he said here’s the basics; just make sure—he taught me early on when Kaizen was new, when using Kanban was new. He taught me that—we had people running presses, and they spent more time with that press than they did with their spouse. But when you went up to them and said, “Take care of that like you want; do what you want to do to it,” all of a sudden the place cleaned up, and it ran smooth. So again, he was the kind of guy that opened up and said, “Give it a shot. Give it a try.” There aren’t any bad ideas except the ones that you don’t try. Danny:– No, it’s great, yeah. So I’m just curious. Your day-to-day now, obviously, it’s a little different. What’s a typical—I know I didn’t ask you this ahead of time, so I’m throwing you a curveball. Paul:– Yeah, that’s all right. Danny:– What’s your typical day-to-day look like? Paul:– You know, I wouldn’t say it’s real regular, but you usually come in and you check emails, see if there are any disasters. I got the smartphone, so I know if something goes haywire overnight. I’ll probably hear about it before I get here. But first of all, it’s a very good team here. And if you let them do their job, more often than not they’ll do the job. So I come in, I’ll check emails. If any one looks like a crisis, that might be one I focus on. I try to get all my meetings in the morning. One of the benefits of, if there’s such a thing as a benefit for a pandemic, was video conferencing because I can sit in my office. I can be in a meeting. I can be doing some other things if it’s not me that needs to contribute. I can get people who—trying to get people in a conference room sometimes, one is first getting them there. Second is, at the end of the meeting they want to sit around and shoot the breeze. The beauty of the video conference, you can turn it off and go on to something else. I’ll do that in the morning. I have a number of projects that we’re working on. Some of them are creative; some of them are longer-term. I try to put those in the afternoon. I go out and—I believe in management by walking around. It’s well-worn at this point. But get out and just talk to people. Say hi, what’s new. And how’s that thing work; what’s it do? How’s your day going? I think the people that work in this building, they like to know that upper management is around, is participating. Sometimes you help somebody out. Somebody complained about the air conditioner not working. I’m sure they told the maintenance guy, “Hey, the air conditioner isn’t working,” but if I see the maintenance guy and I suggest you might want to check that guy’s air conditioner, he’ll do it. The people appreciate that. That’s my day, and then usually I check emails before I leave, too, in case I missed any, and wrap it up. I try not to take work home. That’s why I come here. If I travel—and I haven’t traveled in a while, but I like to travel. So then when I do travel, that’s a little more chaotic. But again, and we’ll see how that goes post-pandemic, how travel goes. Danny:– Yeah, absolutely. Speaking of the pandemic and everything, I’m just curious for your organization. How much of an impact did it have for you, and what did you learn from it? Paul:– One of the biggest things is it blew us out of our comfort zone. CCS is, in some ways, very old-school. You came; you worked from six to whatever, whatever. You’re at your desk, and suddenly—and we have a large engineering staff. We have sales and marketing and production control. And suddenly California was probably a little aggressive in some of their mandates which, okay. Suddenly you couldn’t go to work, and we scrambled. And next thing you know, within a relatively short time, most people were up and running from home. I was impressed. Our IT gentleman Rod just did an outstanding job wiring us and getting us up. Henry, our CEO, was also very accommodating, just saying, “Whatever it takes, let’s get it set up. Make the people comfortable.” And we did a good job of sanitizing the plant and getting people back in relatively quickly with… one thing is—we’re proud of this—there were no transmission cases of Covid in the company. We were up and running within a couple weeks after the original shut-down. We’ve kept it clean. We finally just stopped wearing masks. If you’re vaccinated, now you don’t have to wear a mask. So it’s amazing how fast we moved from an at-your-desk, nine to five to working remotely and Zoom meetings and WebExes, and we kept it going. I think that taught us that we can be flexible. Now people are, can I work remote today? We don’t necessarily encourage or discourage it, but it’s an option that we didn’t have before. So that was great. It taught us that we could recover, and it taught us that we could be a little more flexible with people and their work environments. On the other hand, in some ways, I consider the pandemic a bit of a speed bump in our business. The aerospace business was booming in 2019 into 2020. Industrial was doing fine. Then all of a sudden, it’s amazing how you think you planned and projected and forecasted everything and didn’t see that one coming. In some ways, though, that speed bump helped us catch up on some things. It helped us work on some projects that, because things slowed down, we could work on some things that we were putting on the back burner. It got some other projects kick-started because ecommerce and digital marketing suddenly taught you how important digital marketing and ecommerce is because you couldn’t talk to people. You could call them on the phone. But it jump-started a few of those programs as well. I don’t want to see another pandemic, but I could find some silver lining in that cloud. Danny:– Sure, absolutely. And I think it’s a story that we’ve heard over and over again. Obviously yes, nobody wants to go through that again if we don’t have to, but certainly silver linings in terms of what, being able to learn. The flexibility is a piece that we hear a lot of. It’s always interesting hearing about different impacts. We deal with a lot of companies in the material handling space, and they’re still going nuts. Talk about accelerating business and just—but then everyone’s dealing with supply chain issues still relative to labor and resiliency, just the whole nine yards. Paul:– I don’t think we’ve seen the end of it. Danny:– I don’t think so. Unfortunately I agree with you. Some of it I think is self-induced. Other stuff is just, things are still running its course. That being said, from challenges that you see in the industry right now, what are the things that you’re seeing that you see on the horizon, whether they may have already been here pre-Covid or maybe not. What are you seeing? Paul:– From a change in the way our industry works? Danny:– Yeah, in the industry, the way that it works or, yeah. Paul:– When we say industry, I see myself flipped. Our customers’ industry is probably more important. My industry is sensors and switches and measurements. That’s always going to be important because sensors are the fingertips of the internet. It’s the sensors that are the eyes and ears of the machine and the systems that they run. And they become more so as people found out, hey, I can’t always depend on people being here, so robotics is more important. Automation is important, and we’ve embraced that here as well. I see that our business in terms of sensors and switches is pretty solid going forward as long as you’ve got the right types of switches and sensors. As far as industry goes, I think everyone appreciates the supply chain a whole lot more than they did a year and a half ago. I’ve seen a few industries back off the pressure for what used to be low price, low price, low price. Suddenly now it’s more, is it a good value? I’ve always preached, we’re a good value. We’re not the least expensive. We never will be, probably not the most expensive. But we’re going to give you the value you’re looking for. I think this whole pandemic has made people like the aerospace industry and energy and power and oil and gas a little bit more respective of, yeah, okay, this company provides support. It gives me a good value. It gives me a good product. They’re there when I need them. So I think you’re going to see a little less pressure on cost, cost, cost and a little bit more on, are you there? You’ve seen the move from foreign supply back to domestic supply. That’s not going to go away until somebody starts to say, “Hey, can I get it cheaper somewhere else?” Then hopefully somebody will say, “But remember what might happen,” or, “Remember what happened the last time.” I also see some larger companies reaching out financially supporting some of the supply base because they’ve put the supply base at risk with their cost-cutting. Then all of a sudden the demand disappeared, but you can’t make an airplane without certain parts. So now the aerospace industry has to carry some suppliers to keep them in business. I don’t think they like that, but they realize that we have to make sure that our supply base is financially viable even in a certain risk environment, God forbid another pandemic. Danny:– Yeah, it’s interesting just the inter-dependability across everything relative to supply chain. You look at globalization and just how the impact there. It’s a lot to unpack. I think the whole question around lean manufacturing is being re-looked at. Well, okay, maybe we pushed that a little too far. Paul:– Leaned it out a little too much. Danny:– Yeah, exactly. And aerospace—I’m a pilot—you lean too much of your fuel to air mixture, and you’re going to lose an engine. So we can’t go too lean. Paul:– That reminds me, yeah, I was going to tell you. You’re a pilot, and one of the things that happened during the pandemic, was one of my children started flight school. Danny:– Oh, awesome. That is very cool. They get the pilot’s license yet? Paul:– Not yet, not yet. He’s about halfway there. The goal is to be a commercial pilot someday, so we’ll see where that goes. Danny:– That’s exciting. Well, as an aside, and I’m not exactly sure. Obviously Covid messed with things a little bit. But there was a big pilot shortage coming up in 2028 I think was supposed to be the peak. I don’t know now. It probably is still there. Paul:– Yeah, it hasn’t changed a whole lot. One of the— and I’m not a pilot, so I don’t have to worry, but retiring at 65. Danny:– Exactly. Paul:– Pilots can still change. They were still retiring. They turned 65 during the pandemic, they had to retire. And so granted demand is down a little bit, but in some ways the airlines are lucky they weren’t making new pilots either at the time. So the pilots were retiring, but you weren’t replenishing the pool. And now suddenly the pool is kind of low. And it’s not just pilots. It’s flight attendants; it’s maintenance. It’s a lot of other stuff that’s impacted the industry as well. I would like to think in the next five years they will get back together, but— Danny:– You never know. I would think so, but to your previous comment that you made earlier just in the way that we’re doing business now and being more open and adept to video conferencing, for example. Go-to-market strategies, I know there’s a big question right now in terms of business travel, and I’m sure it affects you guys as well and what you’re thinking. But I’m hearing a lot of companies have, you can travel now, but a lot of people are like, you know what? I don’t know that I necessarily need to from a business standpoint. Maybe I don’t need to travel all over the place for all these meetings when I can do this over Zoom versus—So it’ll be interesting, I think, to see what that impact will be. Paul:– You made a very good point. The airlines certainly want business back. I’ve learned that we won’t always be able to get out to that person, so we have to find more ways for them to find us. Danny:– Yeah, exactly. Paul:– Going back to that digital marketing, that whole idea of helping people find you and make it easy to find, easy to buy, easy to do business with. And once they find you, can they buy your product? We’ve obviously pushed in that direction so that not only are we easy to find, but it’s easy to buy our product. But that’s the leverage that I try to tell my sales people, marketing people is you used to have to get in the car and drive to these meetings around the city. If you do this right and you do it well, you could stay in your office and do twice as many introductory meetings, meet-and-greets. Hi, is there an interest here? Can we get together? And we’ve learned to do that with larger corporations too. I can now address a number of engineers while they’re at their desks and say hey, do you want to join for this WebEx? Let me just talk to you about it. And if there’s an interest, I’ll be happy to jump on a plane and come up and see you. But I can talk to five or ten of you in an hour whereas I could only talk to two or three of you in a day after I travel all the way up there. So I see the benefits of video conferencing, the digital marketing, the ecommerce, and maybe that’ll make the business travel all that much more efficient and effective because I still believe eventually customers would like to see the person from time to time. Danny:– Oh, yeah. Paul:– They always do better in person. Danny:– Oh, 100%. Paul:– I believe your father was a salesman, or is a sales person. And so the selling job hasn’t gone away. How you go about it, obviously, is changing a little bit. Danny:– Yeah, certainly, and I’m sure it will continue to evolve. And it’ll oscillate and go back and forth. It’s an interesting observation; kind of an interesting tangent, too, talking about, getting in with the whole pilot thing. It worked. So Paul, one last question I want to ask, and again, I didn’t send this to you because I like asking people this off the cuff. So get ready for the last curveball. Sorry. And that is, what are you doing as a leader of your organization to stay on top of your game? Paul:– Okay, one is I’m not sure I’m ever on top of my game because I’m still learning so much every day and new things come up every day that you think, where did that come from? But one of the things is, I like to read. So I’ve been reading leadership books and articles because a lot of people have gone before me, have done a good job at being leaders. So you can learn from their ways. The other thing is, I’ve also learned, communicate more. I often believe—and somebody told me long ago, and I thought she was pretty smart—said you know, if you give the same information to a number of people—reasonable people, rational people—they’ll probably all come to pretty much the same agreement or consensus. And I find that’s true. If you take the time to communicate, you tell them what you want to do, you tell them the outcome you’d like to have, you give them the same data that you’ve got, generally they’re like, yeah, okay, that makes sense. Let’s do it. And I’ve learned to do that a lot more in this position because there are so many different things going on. But if you talk the main point, the main direction, the main things you want to get done here, most people are good at heart. They want to get it done. They want to do the right thing. And they’ll try to do what you want done. You don’t have to micromanage them. You set the general direction. We want to have good products. We want to be fair with people. We want to be reasonable. You want to treat people like you want to be treated. I’m trying to keep putting that into practice and lead by example too. So yeah, reading up how other people have done it, communicating like crazy, explaining and studying examples, those are probably the three best things I could come up with off the cuff. Danny:– That’s fantastic. No, that’s great. Any books in particular that you’ve come across that stand—you’re like, this is awesome? Paul:– Two or three come to mind. One of them is—I just finished a book on leadership. It talked about Abraham Lincoln, Theodore Roosevelt, Franklin Roosevelt, and Lyndon Johnson. I lived during some of their times. I never thought about it, but it talked about how they went through certain crises and came out, and they forged their leadership qualities and got through. But the book I’m reading right now, believe it or not, and I mentioned I was from Milwaukee, is Instant Replay by Jerry Kramer about the 1967 Packers season under Vince Lombardi. And I’m learning about Vince Lombardi leadership style. I’m not saying he was always right, but he certainly won games. Danny:– He certainly did, and that’s awesome. That’s fantastic. My wife is from Minneapolis, so we won’t get into anything there. Paul:– I lived in Minneapolis. Part of my wanderings, I’ve lived in Minneapolis, and it’s a wonderful city except in January and February. But really, good for you. And you know what? The people up there are super. I come from the East Coast back to the Midwest, and I didn’t realize the type of people and the quality of people out of Minnesota. Other than the Vikings, everything’s great. Danny:– Other than the Vikings, yeah, that’s what I hear. There’s a little bit of that that I’ve picked up on. Anyways, well Paul, listen, we could probably go on for three hours. This has been just interesting and fascinating, learning more about you. Paul:– Thank you for having me. No, I love your questioning. I love your questions. Danny:– This has been good. So for those who would like to learn more about you, would like to learn more about CCS, what’s the best way that they can check you guys out? Paul:– We have our website address is ccsdualsnap, all one word— long, but one word— ccsdualsnap.com. We’re always looking for advice on how to do better, but that’s the first place to go. I certainly encourage people to check it out. Danny:– Well, we’ll make sure that all the information is in the show notes and accessible throughout the video so if people want to check you out, they certainly can. So Paul, thank you. Paul:– Thank you. Danny:– And we’ll wrap. Paul:– Keep up the good work, by the way. I love your show. Danny:– I will. Thanks so much. Alright, well that wraps up today’s IndustrialSage Executive Series interview with Paul Konrath who is the president of Custom Control Solutions. Got that right. You can go to ccsdualsnap.com, check them out. The information will be in the show notes. Thank you for watching or listening. 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| Ad Victoriam Solutions: Jeff Jones | 04 juil. 2021 | 00:29:50 | |
CEO Jeff Jones shares the challenges he faced when deciding to not just found Ad Victoriam Solutions, but pursue a B Corp certification.
Danny: – Well, hello and welcome to the IndustrialSage Executive Series. Today I am joined by the CEO of Ad Victoriam Solutions, Mr. Jeff Jones. Jeff, thank you so much for joining me today on the IndustrialSage Executive Series. Jeff:– Great to be here. Danny:– I am excited to jump into this. So I’ve been familiar with your company and you for a little bit, for a couple of years now. I’m excited that we have you on the show. But for those who are not familiar with Ad Victoriam Solutions, or as I understand, you guys can also go by Ad Vic or just Ad Victoriam, for those who aren’t familiar, just give me the high-level of who you guys are, what you guys do. Jeff:– Sure, so we are technology consultants, in a nutshell. We’re in the business of digital transformation which is I guess a bit of a buzzword these days. Essentially we work with a variety of businesses and industries. Salesforce is our technology of choice, our partner that we work with. When people have decided to move forward with Salesforce or if they’re curious as to whether they should and how it would impact them, we come in and make that magic happen from there. We understand their business. We get to understand what their business is, what makes them different. And then we use technology to apply and enhance their business so that they run seamlessly and more optimized. Danny:– Excellent. Yeah, well, digital transformation is certainly a big buzzword in the industry for sure, and Salesforce is—when it comes to CRM, sales-enablement, they’re certainly the leading horse there. So I’m excited to jump into that a little bit more as we get down into the episode. For now, I’d like to know a little bit more about Jeff. I want to know your story, your background. How did you get into this space? Take me back. Where does this story begin? Jeff:– Let’s see; how far do you want to go back? I will tell you what I normally tell people. I went to UGA, had an undergraduate in— Danny:– Go Dawgs. I like it. We’re starting off right; okay. Jeff:– And in the mid-90s, way back then, I worked for a medical manufacturer for capital equipment for hospitals and was in sales for them. Had a territory, Georgia and Tennessee, and was very much in sales. Then there was this amazing technology that came out to the mid, late 90s— you may have heard of it— called the internet. It became a land rush. Everybody drove into that space. I went back and did an MBA at State. At the time they were the only one that had a night program that you could go do. I focused on technology and came out and worked for Ernst & Young for seven years doing coding, programming, relational databases, enterprise systems. Got done with that and joined a company, a boutique consulting company. It was Microsoft, that was my technology of choice at the time in consulting. That’s where my sales and my technology world collided. I would take customers that were originally 50,000. Next thing you know, they’re spending half a million, a million bucks with us on the things that we were doing for them and having a lot of success on that. I helped grow that company upwards to about, I think they were probably 10 people when I joined, and well, almost 100 when I chose to leave and was president of that company and had decided that Salesforce was real. They had moved beyond just CRM at the time. They were really moving into entire business line of applications. And so that’s when I decided to found Ad Victoriam back in 2014. You always think you can do it better. When you watch others run a business, you’re like, “Why don’t you do this? Why don’t you do that?” And then you start a business, and you realize why people make some of the decisions that they made during that time. But that was the journey that got me there. Sales, business background, then coupled with technology has been very successful because bridging those two, it’s not easy. Danny:– No, absolutely. When you were at UGA, what were you studying? Jeff:– I did international business at the time. Danny:– Okay. Jeff:– Yeah, it was great. I worked in Germany for a couple of summers for a beer distributor. Danny:– Oh, nice. Jeff:– Yeah, that was a great job when you’re in college, but not in the long-term. Not a long-term viable. Yeah, so that’s… Danny:– No, that’s great. I’m curious. You got into coding and whatnot. That’s a bit of a jump from international business. How did that happen? Jeff:– Well, I tell people if you go into technology, you have to be a problem-solver. You can’t be frustrated with the technology. It’s a bit of a puzzle, and for full transparency, my wife who also went to Georgia was an MIS major, and she was already in technology. I found myself liking the things that she was doing more than the things that I was doing. She had started out as a developer as well. Like I mentioned, when the internet first came out, everybody was picking it up, learning about it, and it was fairly basic in how you went about it in those days. I just enjoyed the problem-solving aspects of technology, still do. I miss being near the code sometimes. I’m not saying I want to go back, but there are aspects about it that I miss, the trying to solve things, the banging your head on the wall for a little bit and then the Eureka coming in and having it work successfully. Danny:– Yeah, absolutely. So it sounds like—and I was curious because you hear these stories all the time. You’re going to college. I’m going down this way, and then there’s an inflection point. Something changes, and you say, hey—It sounds like, with your now-wife—I’m presuming you guys were dating at the time—that was the inflection point. You discovered what she was doing, like this is kind of cool. I like this stuff. And then took that passion and followed that trajectory. Is that more or less accurate? Jeff:– Yeah, that’s a fair assessment. For me, I look back and— by the way, if you’ve never been to the computer history museum down in Roswell, you should get down and check that out. We just took our team out to it. And I bring that up because as I look back, there was a time where only nerds and people you kept in the back room worked with computers. I could be wrong, but I think in the 90s, that changed a bit where more and more people could get into it, and the internet made that available where it was a little more ubiquitous. Everybody could get into it, and they understood why and how they went about it. As you talk about an inflection point, I think that was for me where that came together because I always found it interesting, but I also had people skills that I wanted to get out and do those things too. My mind came together at that time. Danny:– Yeah, so talking about that, inflection points and changes, is there somebody that you can recall or maybe a specific event that maybe has triggered that lightbulb moment, or someone that throughout your career has really made a massive impact and has helped you to get you to where you are today? Jeff:– To say that there’s only one would probably be not fair. Danny:– Sure, of course. Jeff:– Back on my journey, I’ve been very fortunate to have a number of people who helped guide you or give you advice along the way. I mentored under somebody when I was in sales. I got to work with them and carry a territory and work very closely with that individual. I worked for a private company, so you could do things that you can’t do at publics. He was sick with cancer and couldn’t get around, so we’ll just put two people together, and y’all go figure it out. And so I was very fortunate to learn from that experience. A lot of the stuff that he had done in sales over the years, I picked up on that. Then when I got into technology, I had a good friend of mine. Still a good friend of mine; he’s an ex-Navy Seal. So he was really good to work under. He was my boss, but in the technology space, and how to approach problems and problem-solving that he had learned when he was in the military about, write down the complexity. Bring it down into its component parts. Bring it back together. And how to think about certain problems and so forth. Definitively along the way, there’s always others that give you an opportunity if you’re willing to listen to them. It’s why I’m always trying to find people that we can mentor or help. It’s probably one of the more rewarding things, as you grow a business, that you can bring others in and watch them grow and build their own careers and, ideally, not step on the same land mines that you stepped on along the way. They’re like kids, too; sometimes you can’t tell them. They’re going to figure it out for themselves. Danny:– That’s a really good point. So where do you think this entrepreneurial spirit that you have, where do you think that came from? Jeff:– My mom says I’ve always had it. I don’t recall. She tells the story; I’m like, “I don’t remember it that way, but okay. I’ll take your word for it.” To be honest with you, I don’t know where it came from. There is a certain amount. I’ve been in consulting for a long time. Consulting’s—one of the best parts of that is you get to work with a lot of different industries, a lot of different people, and you’re constantly making recommendations in how to do things better and how they should be done. Maybe at some point it was like I had that same desire where, at the company I worked for, I loved the owner there, but there were things that I felt needed to be done that weren’t being done. And so it was like, “Well then, let’s go do it.” Here is an opportunity to go do it, and that’s where that came from. Danny:– What did that look like for you specifically? Walk me through that moment when you said—because there’s obviously a difference between “Oh, yeah, we should do things differently,” and yada yada yada to actually doing it, to actually taking that step to say, in your mind, “This isn’t just crazy talk in the back of my head. I’m actually going to take action on this and do it, and I’m going to say goodbye.” What was that moment for you? What did that look like? Jeff:– I made the argument before, and now I can say it’s true that if you go and start your own business, you have to be crazy. Danny:– I would agree with that, yeah. Jeff:– There is something not right with you to go do that because if you… especially when you’re creating something from nothing. I had risen to, I was president of the company that I was with at the time, that consulting company, the Microsoft shop. So when I decided to do this, and it was actually my wife who spurred me to do it because she was like, “I’m tired of hearing you talk about doing something. Either do it, or stop talking about it.” Which is great because she’s my support for everything and the impetus that pushes me. At the time, because I was president, I could not go build something and step away. A lot of people talk about— Danny:– A side hustle or something. Jeff:– Right, ethically I was not going to do that. One day I walk in, and I’m like, “I’m done,” which was a bit of a shock, good position and all of that, and then just walk away from it. I also tell the story, the person who joined me, his name is Brian Mize, when starting the company. I was the sales guy; he was the technical guy. He had been a customer at one point in time, so we had been friends for several years. I’m like, “I’m going to do this; come with me. We will go do this.” And finally he agreed, and he said, “Okay, I’m in, but you’re quitting your job first.” So I had to go quit my job, and then he’s like, “Oh, okay, this is real,” and go do it. And I tell people it’s crazy because we started the company in May from nothing and by December of that year we had sold a total of $1700. Danny:– Are you sure you’re not missing some zeros there? Jeff:– Yeah right, exactly. You start to question yourself, like what have I done here? This seemed brilliant months ago. There’s a level of determination and will that goes into it and recognize that as you’re doing certain things, they are foundational, and they do not make an immediate return on what you’re doing. And you build on that because then our second full year of 2015, we hit seven figures. Danny:– Wow. Jeff:– So you build on it from there. There’s relationships; there’s things about the business. There’s hiring and things of that nature that you just have to get done. We’re kind of hell-bent on doing it our way. So far, so good. Danny:– That’s awesome. I know I could go on probably for another two hours on that, that’s for sure, alone because I’m fascinated by these stories, and I think it’s really cool. Pivoting to today, I’ll ask this first, and then I’ll move into another question. What are the primary challenges that you’re solving today for companies? Jeff:– It can be industry-specific. I know that you guys like to talk a little bit about manufacturing and so forth. Danny:– A little bit, yeah. Jeff:– A lot of what we’re seeing over there is a big investment in the B2B commerce where you’re not, you can sell directly to who you want to because when everything got locked down during Covid, and you’re dependent on people who are normally in the field writing up orders and things of that nature, and now that is not an option for you, that’s pretty damn scary. So we’re seeing a lot of investment on that. We do a lot of commerce in general. We break our business up into a lot of product sweeps, but commerce is the leading horse. And so we’re just seeing a lot of investment in that in particular. That ability to go to market digitally and seamlessly is what we’re seeing a lot of. Plus tying in a lot of your back-end systems where you’re not as dependent on manual intervention. You mentioned earlier; I find it funny people say Salesforce, and the first thing they think is CRM because that’s their lead horse. I make fun of them sometimes because that’s their ticker symbol, too, CRM which is fantastic, but they are so much more than that now. They’ve painted this symbol. They have a service offering. They have a commerce offering. They have what’s called CPQ for order-taking portals through their experience. They have a very broad offering for full back-end systems. A lot of what we’re doing is now bringing all of those offerings together for companies so it works seamlessly versus you have eight different vendors that you’re always trying to work with and wiring those systems together, which is doable. There’s some systems that you just have to interface with. But now you can put it all on a single platform and reduce the complexities involved and make things more seamless. Danny:– Yeah, absolutely; that makes sense. They’ve certainly made a significant amount of changes and acquisitions over the years. I remember when they bought Pardot in Atlanta which I think—was it ExactTarget bought them first and then— Jeff:– The big fish eats the small fish, then a bigger fish comes along. Danny:– Exactly. Jeff:– ExactTarget got Pardot because Pardot’s a B2B marketing automation, and ExactTarget was a B2C, so they had the full portfolio for marketing automation. Therefore when Salesforce bought them, it was a one-stop shop. Danny:– Yeah, exactly. No, it just seems to be the theme for a while. One of the things that I wanted to talk to you about that I thought was interesting, because to be 100% honest with you, I had not heard about this before, and that was about this concept of B Corps. I had met some people on your team, and they were telling me about it. Maybe I had come across it once or twice before, but I didn’t have the full explanation. So I just thought that was a very interesting concept. For those who are unfamiliar like myself prior, what exactly is a B Corp, and how are you guys involved with that? What does that look like? Jeff:– Yeah, so B Corp can be confusing because, as a business, we are still an LLC. B Corp is not a—there is a B corporation which is, you’re structured a certain way. But B Corp as itself is really just an accreditation that you can go and get. We like to talk about business for good or a force for good. We aligned with B Corp early on because we wanted a series of guard rails to help guide us and keep us focused on a lot of the reasons we started the business which is taking care of our employees, taking care of our customers, being considerate of the environment. Believe it or not, back in ’14 those were—I don’t want to say they were radical, but people didn’t talk about that as much at the time. And so we went ahead and worked on the accreditation. We got some help from the University of Georgia and their graduate program and made some great hires out of it to boot. But we used it to help us understand things that we wanted to do, so it got us much quicker in how we do our benefits. When we started rolling out benefits, how we went about it, we covered 100% of the employees’ benefits, health, dental, vision, and things like that. As a small business, that was a hard decision to make because it is very expensive. But based on the values we wanted to grow and live by those were decisions that helped drive that. How we do things as it relates to the environment, our suppliers which, as a consulting company we don’t have a lot of suppliers. Our main value is in people. But what we ended up doing is we put in volunteer time, so every employee has 40 hours a year that they can take off for volunteer work. It’s not vacation. If you want to go work for a charitable organization, we make that available for you. For us, B Corp was a way to make sure that we’re always focused or on the core of, as we talked about, wanting to do it better. Because if you’re growing a business, it’s easy to lose focus of that because what are you thinking; you’re like revenue, growth. Where’s the next thing coming from? How are we delivering? This was something that we could also use to make sure that we were always still focusing on those other things. So I encourage people to look into B Corp. And what I tell them is, even if you don’t go through the full accreditation because it is very rigorous, there’s a lot that’s in there that you can pull from and put in your toolbelt to help your organization overall. Danny:– So excellent. If I were to boil it down, it’s almost like a sense of rubrics or—maybe ideals is a weak word, but just in terms of helping to shape the culture by putting some very actionable items into it. Say hey, we value employees. We value the environment and having specific programs around that. Jeff:– Yeah, right. So it’s a way to ensure you back up what you say. Like, hey, we’re into diversity. Well, there’s a whole section in there where you have to say, and here’s how we’re approaching diversity, and here’s how our team is made up within diversity. And here are the offerings that we also make available for people when we say we are diverse. Or, we care about the environment. Okay, well these are the programs that we have in place for recycling. Here’s how we make sure that if we are a supplier that we source our materials and our supply chain from people that are small businesses that also care about the environment and things of that nature. We care about our employees. Alright, well explain what you’re doing around that versus just, hey, that’s a great marketing slogan. Why don’t we throw that on our website too? That is where B Corp brings it all together to make sure that folks are actually living and adhering to the things that they say that they care about. Danny:– Yeah, it’s excellent. How long did it take to go through that whole accreditation process? Jeff:– For us, it took almost two years because we knew nothing about it, and we were getting help through the university to get through it. I think people can get through it faster now, but it really depends. Nathan Stuck from our team who is our director of culture and somebody that we hired out of Georgia for helping us still works with other companies to help them get through it. I think we see some people get through it in six months, but a year because you have to go and change things, and you have to do a lot of documentation around and stuff like that. Like I say, it’s pretty rigorous. I don’t know if I answered your question. It took us two years. Danny:– Yeah, I was just curious. You mentioned that it was rigorous, and after understanding there was different programs and the changes, that stuff takes time. It’s not going to happen overnight. Just curious about that. So for those companies that are interested in learning a little bit more, I’m assuming there’s a website or something, you can go check that out. Jeff:– BCorporation.net or—I believe… Danny:– So we’ll figure out what that is and put that in the—assuming it’s going to be B Corp something. Jeff:– There you go. Danny:– No, it’s very cool. So you guys started that, you mentioned—When you started the company, was that part of the, was that one of the early initiatives? Jeff:– Day one, my wife and I knew in particular that we wanted to do something like, all the things I talked about there were important to us, but it was still rather abstract at the time. Danny:– Okay, yeah. Jeff:– Full transparency, I was doing some research and noticed a competitor. I was like, “Hey, what’s that?” And I looked; I’m like, “I like that.” That sounds pretty cool. That’s where… we picked it up from there because there’s only one other in the space. As you’re growing—at least, as we were growing—you always look at somebody, and you’re like, “I want to be like that guy,” like the one step up. And so I was doing some research and found one. That’s how we stumbled across it. It’s been very beneficial for us, especially as we’ve grown, from a culture perspective. When people join our company, they know who we are which makes our hires a little more targeted, which is good. Danny:– Yeah, that makes a lot of sense and like you mentioned, helps to put those guard rails up there to align your mission, your objective. You were mentioning with hiring, you know what you’re getting yourself into a little bit more, and so people can identify, say, “Oh, I like this; this is great. Not only am I getting a paycheck. The motivation as we’re seeing has shifted more into purpose and more into passion. I like what I’m doing, but I’m also—if I can align all those things, then that makes a lot of sense. Jeff:– It is; it helps a lot. And it’s interesting. Our team’s all over the US. The nucleus is in the Atlanta area, but that’s probably 50%. The rest, we’ve got people in Hawaii and Montana. We have these little pockets. We have a pocket in Indianapolis, and they wanted to do a volunteer event. So we flew some folks up from Atlanta, and they all got together and did a weekend volunteer event. It’s fantastic. Again, it drives the culture, gets everybody—especially with so many people remote, it’s an opportunity to come together and do something. Danny:– Yeah, absolutely. No, I love it. That’s awesome. Like I said, we’ll definitely put the link in the show notes and on the video so people can take a look at that if they’re interested. Jeff, listen, I have really, really, really enjoyed our conversation, and I don’t lie when I say we definitely could probably go another two hours just talking about entrepreneurship, B Corp, let alone all the technology disruption that’s going on and the transformation in and around the manufacturing space, outside, above, and below. But thank you so much for your time and sharing your story with us, with our audience, sharing about B Corps. I think a lot of people are going to like what they hear. Jeff:– Fantastic. I appreciate your having me on, and hopefully it was moderately interesting and helpful. Danny:– Oh, definitely. For those who would love to learn more about you guys as well, advictoriamsolutions.com or advic.com. Either of those work; is that correct? Jeff:– Yeah, both of those are just fine. Danny:– Cool, so yeah, if you’re interested, you can check that out. Thanks again, Jeff. I really appreciate it. Jeff:– Appreciate it. Danny:– Alright, well there you go. That wraps up today’s IndustrialSage Executive Series interview with Jeff Jones, the CEO of Ad Victoriam Solutions. You can check them out at advic.com or advictoriamsolutions.com. And also if you’re interested in learning more about B Corp, you can learn about those as well. We’ll have the link in the show notes or on the video player. Somewhere around here we’ll give you access to that. Thanks for watching or listening, if you’re on the podcast. If you are not subscribed, I highly recommend you jump on our email list there and subscribe so you can get all these great interviews and insights and different programs that we’ve got coming out on IndustrialSage. That’s all I got for you today. I’m Danny Gonzales. Thanks for watching, and I’ll be back next time with another episode on the Executive Series.
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| Microshare: Ron Rock | 06 juin 2021 | 00:40:22 | |
Microshare CEO Ron Rock shares the story of his entrepreneurial journey; his company’s pivot during Covid; and their digital twinning systems.
Danny: Hello, and welcome to today’s IndustrialSage Executive Series. I am joined by Mr. Ron Rock who is the CEO of Microshare. He’s coming in all the way from Philadelphia today. Ron, thank you so much for joining me today on the Executive Series. Ron:Thank you. It’s a real pleasure to be here. Danny:I’m excited to jump into this. We had some great conversations before we actually started rolling. But for those who don’t know Microshare, give us a little synopsis on who you are, what you guys do. Ron:Sure, so Microshare is in the IoT, internet of things, business. And specifically what we do is what we call digitally twinning the world, creating a virtual replica of our physical worlds by putting sensors on virtually everything. Why do we do that? We do that to improve the quality of life, to improve the sustainability in ESG initiatives, make it a better planet, create new efficiencies. And in this whole IoT world also surrounded with data is allowing new business opportunities. So companies like Microshare exist to be doing these types of projects. We specifically work in commercial real estate. We put sensors for occupancy, predictive cleaning, environmental monitoring, indoor asset tracking, COVID contact tracing. So think about anything that an industrial space will need. We also think about industrial space as hospitals without touching the patient, airports without touching the airplane, so that unregulated band where we all live and breathe every day outside of our home is where Microshare is building these digital twins and creating lots of safe value for employees and your ecosystem’s customers. Danny:Great. No, I’m excited to jump into that a little bit more. Obviously, it’s incredibly relevant and increasingly critical, really. So before we get into that a little bit more, during this part of the episode, I want to get to know you a little bit more. I want to get to know your story. So Ron, take me back to, how did you get into the IoT space, the technology space? High school, college, did you just say, “Hey, I love technology.” What did that look like? Ron:I wish it was that well-planned. I started out as a cook at Denny’s. I was cooking eggs from 11 at night to 7 in the morning, the graveyard shift. I put myself through college, La Salle College here in Philadelphia. My degree is in accounting. Danny:Oh, mine too. That’s a good one. Ron:You know, I didn’t know what to do. I was good at math, and our guidance counselor in high school said, “You know what? Be an accountant.” I realized by my junior year in college, I didn’t want to be an accountant. But it’s a great foundation to be able to get into any business. In the mid-80s, as I was graduating, IBM personal computers were just coming out. And I took a job at ComputerLand in Philadelphia selling IBM PCs when nobody knew what they were. And a few years later, I was one of the top reps in the country selling those computers. I discovered, though, that there were lots of opportunities to do things, and there were no companies to support them. When I was growing up, my house was the one that all my friends came to. When their 10-speed bike broke, I fixed it. Then, when we all got driver’s licenses, I was always tinkering with engines. I restore old cars. I restore old furniture. I restore old houses, like the one you see me in right now. And my father was a great guy. He said very simply, “Ron, you can have anything you want. You’ve just got to pay for it.” And so there was this value in my mind that I could do anything. Nothing was intimidating. So in the late 80s I started my first company, Brook Rock Corporation. We were the first company to be remanufacturing toner cartridges in 1988. Danny:Wow. Ron:Now that is a global industry. And today if you Google Brook Rock, you can still find some Brook Rock branded things on the internet. We sold that company before I was 30. I got involved in several other start-ups, so I’ve been an entrepreneur most of my life. I’ve also worked in two Fortune companies and ran a publicly-traded company in technology space. So I spent a lot of time in financial services. I spent a lot of time in insurance. I’ve been on public boards of insurance companies. And so my whole career has been, though, the same theme of, how hard can it be? I can figure that out. Let’s go do it. So I started Microshare. Now this is my sixth start-up. I’ve had a couple big wins. I’ve had a couple catastrophic losses. And not surprisingly that, if there’s any entrepreneurs out there today listening to this or watching this, your failures will stick with you for life. You tend to down-play your successes, and boy, the losses are painful. And you learn so much in those losses. So that’s me. I’m basically an entrepreneur because I think I’m unemployable. I just go and create companies so that I can have job where I want to be. And so I met my two partners, Charles Paumelle and Tim Panagos, who are co-founders of Microshare with me. I met them in 1999. I started a company in 2003 called Knowledge Rules. I grew that company globally and sold it to Accenture in 2010. And our customers were some of the biggest companies in the world: Citi Bank, JP Morgan Chase, American Express, AIG, Her Majesty’s Revenue and Customs which is the IRS of the UK. And the common theme on all of them was big, scalable, resilient, secure, regulated data. So our DNA is lots of data. It’s the kind of data that can’t go down. You just expect, when you swipe your credit card, it works. You just expect, when you go to the ATM, the account balance is right. There’s a whole world of new technology out there that can be very forgivable. But there’s core infrastructure data that just has to work all the time. And so when we sold Knowledge Rules, we had begun building these massive platforms for companies like GE to bring all these disparate, regulated data sets together. And we learned a lot about how data locked behind the firewall and data out in the cloud were beginning to co-exist. And we were all showing up at work with our mobile phones and saying, “Hey, now I want to be able to get my email on this thing, not my desktop that’s locked in the office, can’t be taken away.” And so we learned a lot about all of that. Also new things like Salesforce.com and DocuSign were coming up. So suddenly companies couldn’t save all their stuff in one place. That was the genesis of Microshare. And what we realized was IoT takes this problem and puts it on steroids. Let’s just imagine that maybe banks had 40,000 data sets between—and then if they bought another bank, they went from 40,000 to 80,000. But now with IoT, there’s going to be a trillion devices out there. And every one of those devices has a communication protocol, has a data format, has security, has encryption, has to be managed. And every single piece of data is just as important as your bank account. It is a vulnerable spot that hackers take advantage of. Data can be stolen. Data can be manipulated. So we decided to bring our data-centric view into IoT. I’ll stop there. We could go lots of different directions from it, but life-long entrepreneur is the short answer. Danny:No, it’s great. I love it. I love the story. I’m a huge data dork. I guess that’s maybe where the accounting thing came from. There’s stories in the numbers, right? There’s stories in the data, and it’s a matter of finding that and saying, what is this, and learning and making really informed decisions based off of it. And I think it’s super fascinating. Especially now, we talk about IoT and how it’s been taken off. We’re hitting a nexus of technology and speed with ISP where you can actually do this. You were talking about how you’re deploying sensors all over the place. I was reading somewhere that the manufacturing space, particularly, is the most data-prolific industry in the world. I can’t remember how many petabytes of data that is being generated when you think of all the different processes, even from a commercial real estate space, in terms of the actual facilities. All of the things that are going on there, I think it’s fascinating. And there’s so many, we’ll call them stories or insights or information that are locked that, having this technology now, you’re able to unlock it, and you’re able to see what that is. One thing that I want to circle back on, I was just curious. Where did you get this entrepreneurial spirit from? Was your father an entrepreneur? Your family? Do you have a predisposition to that growing up? Where did that come from? Ron:I appreciate the question. My dad was a hairdresser, and he had his beauty shop attached to our house. So my dad slept every day until 9:15, rolled out of bed, went down, and had his first appointment at 9:30. And in the summer times, we were building a cabin in upstate Pennsylvania, all out of recycled scrap material. Frankly, we’re still building it, 50 years later. In the summertime, my dad would take four days a week off and just work three days a week. And he was always able to accommodate the demands of the family and what we wanted to do with his ability to provide an income. And so it was a very unconventional household to grow up in. And I think I just took that for granted, so even when I went to college, it was nothing to work 11 at night to 7 in the morning. It didn’t occur to me that, no, that’s unconventional. I had classes; I needed money. I worked, and I slept when I slept. And there was no sense of, there’s a proper way to do it. You just make things work. And so at Knowledge Rules, our global corporate headquarters was my home in Philadelphia. We had a whole wing with apartments on it that we–the only reason that we bought a home that big was, we could accommodate my offices. And I woke up one day, and I thought, gee, I’m doing the exact same thing my dad did. I’d wake up. I’d walk down the hallway. I’d be at work. And there was just a, again, being the CEO, I was always able to accommodate where the kids were in life, what we needed to do. And so I think I was early in this idea that work life and personal life are really very intricately interwound. They’re not disparate. And by the way, that has some disadvantages as well. Danny:Sure, yeah. Ron:But very much, that’s why I was able to do this. Danny:That makes a lot of sense. That answered very clearly. I always love asking people that question that have started businesses and sold them because I feel like 9 times out of 10, there’s something, for the most part. It’s built in, or it’s learned, or both, or whatever. But I think the key is that—I remember—this has been a little bit of a phrase. There’s always another way. The status quo or whatever is not—so I think, obviously from a very young age, you saw that and experienced it. And what may be normal to you is very unconventional to everybody else. I think that’s fantastic. What an interesting foundation. Obviously, you have a very, very vast career. Is there somebody or something that stands out in terms of, it could be a mentor. It could be an event. I could be a family member. It could be something that happened in high school or middle school, or at Denny’s. Something that’s had a measurable impact in your career and on your life. Does something jump to your mind? Ron:There’s so many things. My team, and a lot of my team has followed me from company to company. I have a million Denny’s stories. You learn so much at Denny’s. Talk about instant gratification: you’re either successful, or you’re not. People either like their breakfast and pay for it, or they leave because it didn’t come out fast enough. There’s so many Denny’s stories that are part of my—other people have Harvard Business Review. I break in Denny’s. Danny:That sounds like a book. “Everything I Needed to Learn About Business, I Learned at Denny’s.” Ron:Yep. But no, I think if I had to pick one that was most defining, it would be my failure during the dot com. I got involved with a company. I was employee number one. We were well-funded, theoretically. We had venture capital that had committed $80 million to us. We ramped up. We hired almost 70 people. I had people leave really good-paying jobs to come join me. We had a couple million dollars of initial funding, and it was in March of 2000. That was the beginning of the end of the dot com meltdown. And so what happened from March to September is, I was flying around the country meeting VCs who had already committed, and they were saying, “Hey Ron, just one more question.” And you’d go back, and you’d crunch a bunch of numbers, and you’d get it back to them. And in fairness and in hindsight, they didn’t know that they weren’t going to fund me in April, May, June, and July. They were getting nervous. They were doing their job. Same thing; I thought they were going to fund, and so at the end of the day the meltdown happened. All the VCs backed out. I had a huge payroll. I had people who had shifted their lives to join me. And it taught me a lot of humility. It taught me a lot of–if it can go wrong, it really can go wrong. And there’s a level of sensitivity—sensitivity might not be the right word. But there’s a level of awareness now that, even as I’m growing Microshare, we’re 44 people. We’re currently raising $20 million on top of 20 we’ve already raised. I have a pretty extensive recruiting pipeline, and I’m very cautious, very aware that I don’t pull the trigger. When I ask you to join my company, I am now responsible for you. And I’m responsible for you even if the people behind me let me down. That doesn’t give me license to let you down. And so there’s a level of connectivity there and awareness that I think has had a profound impact on my career because—and if any of my employees are watching this, they might be busting my chops later—but at the end of the day, anybody that’s worked for me in the last 40 years will work for me again. And that’s a reputation I’m proud of. That’s a relationship that I take very seriously. Danny:That’s fantastic. Obviously a very difficult experience. A lot to learn from, a lot to unpack, and I’m sure there are still things that you’re unpacking and learning and looking at. What did that do to you, from a risk standpoint? Obviously entrepreneurs know the uncanny ability to be able to take on more risk than most. What did that do for you immediately thereafter? You mentioned it a little bit, how you’re very cautious about when you might bring somebody on. The ability to take on more risk and see that opportunity and say–I don’t know. Does it make you, initially, a little bit more gun-shy? Ron:Actually, no. Here’s the scary part of it. I’m much more conservative about the risk that I’ll put my employees under. Me, I’ll triple down. I’m okay losing my money. I’m okay failing. I’m not okay with my team failing. I’m not okay with my team not getting paid. So yeah, the risk is a great—I lecture sometimes at schools where I’m the least educated guy in the room. I’m lecturing at masters and MBA programs, and I have a slide with a big guy sitting on a thing of dynamite, and the sparks are getting ready. And I say, “Look, you can go to school to be an entrepreneur. You can learn lots of things that may or may not be important. But let me tell you. Entrepreneurism comes down to one thing and one thing only: How much risk can you personally endure? If you can’t endure risk, you’re in the wrong job.” After a lecture on time, a guy came up to me, and he said, “Mr. Rock, that was awesome.” He goes, “Can you help me out?” I said, “Oh, what is it?” He goes, “I have a great idea, but how do I get my wife to go along with it because she won’t let me borrow the money.” And I was like, “Dude, psychology department’s, I think, the next hall down. I can’t help you with that.” But the mere fact that he was asking and that he was deflecting his inability to take the risk onto his wife as opposed to looking in the mirror and saying, “Look, are you going to take the risk, or are you not?” And that’s a hard thing because people want to be entrepreneurs. They aspire to be an entrepreneur. They go to school to be an entrepreneur. I didn’t go to school to be an entrepreneur. There’s all of that, but at the end of the day, you’re not going to get an A+ in entrepreneurism and have a guarantee that you’re in a great career like you go into many other, financial services or consulting or manufacturing. There’s a lot of career paths out there where an A+ matters. An A+ in entrepreneurism doesn’t matter at all. It’s, can you apply it, and can you take risk? And I think the risk comes back to some of your early questions. I was never afraid to tear open that 10-speed gear box on the back of my bike when 10-speeds first came out. Everybody else was scared to death of them. I’m rebuilding a Rolex watch that got caught in a fire. I used to rebuild cars; now I’m working on a scale of—and I looked at this watch, and I thought, “I can do that.” And I’m 50 hours into it, and oh, my God. But you know what? If you and I are talking six months from now, I’ll have a Rolex on. I’ll say, “See this? Built it from scratch.” Danny:We’ll do a follow-up. That’s awesome. I don’t know. I just love asking these questions and getting everyone’s different—specifically entrepreneurs, their perspective on all of this. And we could probably go on for another three hours on this, but I’m going to transition to pivot a little bit now back to Microshare and talking specifically about, there’s a lot of challenges that have gone on, obviously, over the last 12, 13, 14 months, if I can do math. What are some of the big challenges that you’re seeing right now and going forward as we start to emerge a little bit? Ron:Sure. Initially, for me and for Microshare, Covid became real the week of March 16th of 2020. I was in London, and all of a sudden, all the restaurants were doing take-out only. Business meetings were getting cancelled. We really didn’t know what was happening. And by the end of March, I had come back to the states because the State Department said, “If you’re an American, get home now, or risk being stuck where you are indefinitely.” That was a little scary, and I had to fly home through Dallas. And you were treated–it was the first time, as an American, that I felt like my rights were totally stripped away. You weren’t allowed to talk to anybody. You were herded like cattle through these chutes. Your temperature was taken. You weren’t allowed to sit, once you got off the plane. And it was really scary, coming back. And it was scary for us as a company. We had just closed a couple really big, global deals where we were doing occupancy and predictive cleaning. Occupancy in a lot of your temporary office spaces, so think companies like we work where you go into a conference room, and they want to know people are in that conference room because they bill you extra to use those conference rooms. So it was a revenue shrinkage solution. It was a massive, massive deal, globally. And by the end of March, they cancelled that order. We also did a huge deal from one of the global accounting firms. They were going to put our occupancy—and we can do room occupancy. We can do desktop occupancy. And as we move to a lot of hotel space offices, you want to know. If you’re thinking of going into the office in Atlanta today, you want to know how many people are there, how many desks. Oh, by the way, you’d like to reserve a desk on the third floor, if you can. And so we were building those kinds of solutions. All those got cancelled by the end of March. And GlaxoSmithKline went to Microsoft, our biggest partner, and said, “We noticed that Microshare has an indoor asset tracking solution.” We put very inexpensive tags on hospital beds, wheelchairs, infusion machines, ventilators, and track where they are. So doctors and nurses look at the app on their phone; they know exactly where these things are. And GlaxoSmithKline said, “Do you think we could use that, modify it, for contact tracing?” In March of last year, nobody knew what contact tracing was. We never heard of it. Nobody. Well, the CDC came out and said, “Well, contact tracing is people closer than six feet, two meters, for more than 15 minutes—” and there’s been a lot of variability since—”that’s important. That’s going to be how we track the spread of the virus.” And so we were able to easily modify our software with off-the-shelf hardware to create a contact tracing solution. And with that, we made the front page of the Financial Times, globally, the third week of April last year. That led to the front page of The New York Times twice about Microshare. And then Fast Company, and then The Washington Post, and then the BBC did a piece on us. And we took contact tracing, and the idea was that it was for essential workers. Folks like you and me can work out of home indefinitely. But people in nuclear power plants, mining facilities, hospitals, distribution warehouses, essential workers have to show up. And so we started selling to that group. And by the way, all the press we got meant that our website got inundated with traffic. So the challenge was keeping up with the demand, not proactively selling it. And we took contact tracing, and we bundled it with our occupancy, indoor air quality, and we have something called touch-free feedback. If you see something–if you’re in a conference room, if you’re in a cafeteria, if you’re at a college campus–if you see something that worries you, who do you tell? And so we put these QR codes all over that you can scan with your phone, and it’ll say, “In an emergency, hit this. You need the cleaning crew, hit this. If somebody’s sick, hit this.” And it automatically links on the back end who can respond. In the UK they have something great; I love it. On the subway, on the trains, they say, “See it; say it; sorted.” See something, say something, and it’ll get sorted. Well, we’re solving for the say something. Who do you say it to? Who do you call? Putting this touch-free feedback is what we started. And we had push buttons, and we realized, with Covid, you don’t want to touch something else. But we bundled all of those into Clean = Safe. So we had a Clean = Safe campaign going after essential workers. A lot of traction with pharmaceuticals, so GlaxoSmithKline, Gilead, Novartis all became customers. Power plants in Australia became customers. Hospitals and nursing homes in the UK became customers. And so that was our reactive—and what’s interesting now, just as a side note, we sell it as a subscription. So we have 12-, 24-, 36-, and 60-month subscriptions for everything that we do. And prior to Covid, most of our business was 36 to 60 months. When contact tracing became available, everybody—again, in April, we all thought we’d be done by June. By June, we all thought, “Oh, my gosh, by Thanksgiving.” By Thanksgiving, certainly by New Years. Well, here we are. We’re all still in it. So people signed a lot of 12-month contracts. An interesting side note, two things: our contact tracing solution continues to expand globally. And customers that signed up for one year are now renewing for another. So there’s a false sense of security in the US that we might have the majority of the problem in the rearview mirror. On a global basis, we’re still in the second inning. So that was Clean = Safe. But we started thinking about analogies of, where’s the world going? Early on, we were one of the first to say, “We’re never going back to January of 2020” across the board. As consumers, as employees, as college students, as doctors and lawyers, we’re never going back to January of 2020. So what is the new normal? What’s it going to look like? And the analogy I came up with was 9/11. 9/11, when it hit, for the next 12 months, it was absolute global chaos. First of all, all of us were getting our sea legs. And if you remember, 9/11, even within a week or two weeks—one time I was watching Peter Jennings on ABC, and the TVs went blank. And immediately you’re like, “Oh, my God, what just happened?” How big is this going to get? How bad is this going to be? Then, there was the smoke coming up from the site, and there was a lot of knee-jerk reactions. Danny:Oh, yeah. Ron:And trying to travel, it was darn near impossible. But now, here we are decades later, we all know the drill. Whether you’re flying out of Dubai, London, or New York, you take your laptop out; you take your shoes off. You go through the metal detector; you stand like this. We’ve figured it out, and there’s a permanent infrastructure that’s never going away in air travel. I believe the same thing’s going to happen with Covid. And so just last week, after a lot of work in Q1, we launched a new branding, go to market, called EverSmart. And EverSmart is that new layer of infrastructure. We’re going to just expect that when we go to offices, we want to see how many people are there. If we’re going to go to the cafeteria, is it red, yellow, or green? Red, there’s too many people right now; you can’t go. Yellow, if you can wait, wait. Green, come on down; grab a cup of coffee. You’re going to want to use the restrooms. You’re going to look at your phone and say, “Which restroom has been used the least all day, and which restroom has the least number of people in it right now?” You’re going to want to look at your app and say, “What is the air quality in this building right now? How frequently is the air being refreshed?” So environmental monitoring, occupancy, people counting, something we’re calling a universal crowd safety. And crowd safety is, we’re used to going into an office building, and we get a visitor’s badge. Now that visitor’s badge is going to track where you are in the building. We’re going to be able to look and say, “Hey, we’re getting too many people on the second floor. We’re getting too many people over in the research area. We’re getting too many people in the shipping dock.” So real-time crowd management married with real-time air quality married with real-time, overall building occupancy married with touch-free feedback at any point in your experience from the moment you leave your house in the morning until you come home at night. If you see something, say something; get it sorted. Putting that infrastructure in place, all of these things are what we talk about with EverSmart. The other thing that we’re talking about and that’s getting a lot of traction, buildings have been moth-balled for a year. Buildings never had an off switch. So now you’re going to start to bring these buildings back to life. But now there’s conversations about hybrid workplace, flexible office time, vaccinated and not vaccinated. So let’s play that out. What does that mean? If everybody has flexible office time, does that mean everybody comes in on Wednesdays, and nobody comes in on Mondays and Fridays because they want four-day weekends? So suddenly I’ve got a crisis on a Wednesday. What if I start saying, “Look, if you’re vaccinated, you can come in on Tuesdays and Thursdays. If you’re not vaccinated, Mondays, Wednesdays, Fridays. Okay, that means my cleaning staff, my cafeteria staff, my security guards, my parking guards, they all have to be fitting into the vaccinated, not vaccinated. How do I think about buying electricity for the next year? A lot of these companies buy their electricity on auction based on very sophisticated models of demand. All those models are now irrelevant. How do I measure, real-time, how many people are coming into my building by hour, by day, based on weather, based on time of year? How do I align my security staff, my cafeteria, my food purchasing? Because at the same time that we’re coming back to life, we’ve got a global initiative that the US is lagging behind on, but now we’re stepping up with global warming, ESG, and sustainability. You’re being held accountable for your carbon footprint. So how do I know how much energy to burn, how much carbon monoxide to expel? How much waste am I producing from unused food and refrigeration systems running that don’t need to be and HVAC systems running that don’t need to be? So how do I align my actual consumption of space with my consumption? That is EverSmart. Danny:I think it’s super interesting. Again, all the implications on that as we look at, you mentioned energy use, for example, in a building, on how you might buy that, or even the supply chain. All the facilities, maintenance, everything that goes into it from CPG to what have you. There’s a whole life cycle, whole ecosystem. And right now, you’re right. It’s this, “I don’t know. What’s it going to be like?” It sounds like it’s a really great solution from a standpoint, not even just Covid, from a safety standpoint and having that flexibility to be able to respond. Who knows what’s going to happen tomorrow? If things flare up again later, who knows? Going back to the essential workers piece, being able to have proactive plans and the data and the ability to be able to actually respond to it and understand what the needs are, I think is invaluable. But there’s certainly a lot of other insights that you can glean from that, which I think was part of the initial thesis of Microshare to begin with. Ron:Absolutely. One of our biggest clients, they love our solution. And they said, “You know, we started out being reactive, doing contact tracing. What we’ve been able to now learn is, be proactive. There are lots of behaviors in our factory we never knew about.” And by making a few minor changes, they had some obvious super spreaders. The people delivering the mail were super spreaders. They never realized. So if this one person got sick, you could potentially knock out 70% of your employees. They made a few minor changes. They also were able to start identifying hot spots. Every space in an office building or a factory is not equal. Some places are used 140%. Other spots are used 10%. Knowing that really matters when you start thinking about driving a safer, more efficient facility. The other thing I’ll say is that, and you touched on this a little bit in one of our earlier conversations, the reason we’re able to do this is that the sensor technology has plummeted in cost. You talked about how there was a lot of data in manufacturing, and you’re absolutely right. But the data was there because the ROIs supported custom sensors, getting them powered. But a lot of the sensors I work with are under $20. Danny:Is it more like BLE technology? Ron:It’s BLE; it’s something called LoRa. It’s a low-power, wide-area network. But the magic of it is that it is battery-operated. I don’t have to tear open walls, so the installation is cheap. And I like to say, our solutions are disruptively cheap. I can provide contact tracing in an entire organization for less than a cup of coffee a day per employee. That just wasn’t possible five years ago. And it’s not the sensors. It’s Microsoft, IBM, Google, Amazon, all have cloud infrastructure now that just five years ago, you would have needed to build out a million-dollar data center just to begin turning this stuff on. You’d have had to tear open walls and put in wiring. You see RFID which is pretty popular. RFID is good, but only in certain installations because it’s expensive. So again, going back to manufacturing, the ROI was there. But we’re at a point now where I could put sensors on every dog, cat, kid, manhole cover, snow plow, toilet seat, refrigerator door, the sports jacket that you’re wearing. I can sensor up everything. And I start getting that data, and I’m driving safety, efficiency, quality of life, reducing carbon footprint. And the economics now work where they didn’t five years ago. Danny:Yeah, it’s an exciting time. That’s for sure because there’s a lot of challenges that a lot of us now, we’re going to be able to solve because we’re going to have more visibility and more insight. Ron, listen, I think we could probably, honestly, go on for another I’d say a solid four or five hours because this has been a fascinating conversation, your background, learning about Microshare, the solutions, your story with the pivot and everything. I really want to thank you for your time, sharing all of this with our audience. I think you guys have a very fascinating and quite honestly, a really critical solution that not just manufacturers, obviously, can leverage, but a lot in other industries. Thank you so much for coming on and sharing with us your story and Microshare’s story. Ron:Thank you very much. It’s been a pleasure. I really enjoyed the personal questions. That’s a little bit outside of the normal with these, so thank you very much. I appreciate the interest, and we’re excited to evangelize what we’re doing. We think it’s really exciting. We’re saving lives. How cool is it to have a company trying to make a profit, but you know what? You’re making a difference. And so we’re excited about it. Danny:And that’s a great purpose. Again, thanks for your time. This was awesome. Alright, so listen, I love this episode. All these episodes, I feel like they keep getting better and better. Check out Microshare, Microshare.io if you think this is a solution that you guys might need in your facility or in your building. Certainly we could talk about contact tracing and safety, and Ron was talking about a little bit of the challenges of looking for issues. If you have your workforce that gets infected, and then you have to close down the facility, your manufacturing plant, or what have you. We kept hearing about all these stories. There’s solutions. There’s technologies out there now that will be able to help to solve that. And oh, by the way, not just get data to create safety protocols, but also other information and insights to be able to increase your operational efficiency and whatnot. So obviously, it’s a very exciting time from a technology standpoint, data-wise. You know, if you listen to the show, I am a data dork, so I get excited about this stuff. So anyways, I’m going to stop yapping. Thanks so much for watching or listening to the Executive Series on IndustrialSage, and I will be back next week with another episode. And I will see you then. Thanks, bye.
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| Kaleris: Kirk Knauff | 16 mai 2021 | 00:28:14 | |
CEO Kirk Knauff of Kaleris joins Danny to share all about the major influences in his life and his career in supply chain.
Danny: Well, welcome to today’s IndustrialSage Executive Series interview. I am joined by Kirk Knauff who is the CEO of Kaleris in Alpharetta, Georgia. Kirk, thank you so much for joining me today on the Executive Series. Kirk:Thanks for having me, Danny. Glad to be here. Danny:Well, I’m looking forward to this. We were talking about this before a little bit, hey, this is kind of exciting. You guys are in Alpharetta, Georgia; we’re in Alpharetta, Georgia. We’re just a couple miles apart, so this is exciting. So for those who are not familiar with Kaleris, could you just give us a 30,000-foot view? Who are you guys? What do you guys do? Kirk:So we’re a supply chain execution software company. As you said, based here in Alpharetta, happy to be here. We’re really enjoying this budding Atlanta tech scene that we’re a part of. Relatively new company that’s the combination of three legacy businesses that we’ve acquired and put together to build this supply chain execution platform. About 200 folks work for Kaleris headquartered here in Alpharetta. We also have offices in Dallas and Oakland, California and two big development facilities in Sri Lanka and India. So that’s our footprint as well. Danny:Excellent. Well, that sounds great. So we’re going to dive into a little bit more of what you guys do, some of the challenges that you guys are solving here in just a little bit. But before we do that, this is the time in the episode where we want to get to know Kirk. We want to get to know you a little bit better, so I’d love to know your story, your background. How did you get into this space? Take me back. Kirk:Okay. Well, always been in the supply chain execution space or supply chain space, really. I started with a large railroad here in North America in Jacksonville, Florida, straight out of undergrad, on the sales and marketing side. My first job in the industry was an inside sales job, actually, calling former railroad customers and asking them why they weren’t using the railroad anymore. So that was kind of a baptism by fire. And from there, stayed on with them for about five years, and from there I got to know the founder of a small software business here in Atlanta. Moved up to Atlanta to start my career on the software side back in, around 2000. And I guess the rest is history from there. We grew that business over time. We sold it into a private equity company in 2007. Danny:Good timing, yeah. Kirk:Yeah. Actually a funny story about that, when we were talking to our private equity sponsors—who are great, by the way—while we were selling the business, we had never had a year-over-year decrease in carloads because a lot of our software still does, it’s involved with rail carriers. We had never had a year-over-year decrease, and the first year after they acquired us was our first year ever, which was 2008, where we saw a decline in year-over-year carload growth. So they kind of gave us a hard time about that, but they understood market dynamics. Anyways, then we acquired four companies between 2007 and 2011 to add to the platform, the supply chain software platform, and sold that business to GE Transportation in 2012. I stayed on at GE Transportation for about seven years, six and a half years, running that software business for GE. So yeah, that’s a quick overview of my background, all software and transportation-related. Danny:Yeah, so I’m curious. You mentioned you jumped in right after college. For undergrad, what were you studying? Was it something that you were saying, “Hey, I want to get into logistics,” or, “I want to get into sales,” or both? What did that look like? Kirk:Yeah, I think it was more of a sales thing, as timing would have it. When I first went to college, I thought I was going to be a lawyer, so my undergrad’s in history, actually. I love history and loved it then. Really, the only subject I really enjoyed in high school. Anyways, quickly figured out that’s not what I wanted to do. So I’d just graduated with an undergraduate degree in history from Florida State. Actually, that’s where my daughter is now, too. And while I was in school, I had a couple jobs, but one of them was with an insurance agency, Northwestern Mutual. They were having a big high-performance sales push in training and talent development. So my senior year in college, went through that whole program and then at the time CSX was benchmarking their sales processes, so as luck would have it, that looked really well on the resume. No, I had no idea what a railroad was or what a boxcar was or supply chain software, for that matter. So it wasn’t a big aspiration, just kind of where I ended up. Danny:Just kind of happened. It’s funny. I always love asking that question because it’s very interesting, that journey. Well, I wanted to do this, but I ended up doing that. You got sucked in, basically. The tractor beam just pulled you in. Kirk:Yeah, well the entrepreneur side has kind of been the driving force. When I was at the railroad, I loved the railroad and got a lot of experience and learned a lot about transportation and technology, for that matter, with some of the things I was doing. But five years was all that was going to be. I had the itch to go off and do something on my own or a little smaller and a little more, in an environment that you could control personally a little bit better. So the corporate world probably wasn’t where I was cut out for. Ironically enough, I ended up at GE for seven years. Danny:Yeah. Kirk:The entrepreneur side is really what was driving my career path. Danny:So how did you discover that? Was that something that you knew going on, or was it something that just started growing, and you’re like, “Hey, this is kind of interesting. I like this,” as you started getting involved with these other organizations, these companies? Kirk:Yeah. I don’t know; I guess that question—that’s a good question. I think as a kid, we were a middle-class family, as I mentioned to you when we were talking earlier. My dad worked for IBM. We moved around a lot. He was really influential in creating work ethic and a lot of the values that I respect and enjoy. So as part of that, I was always working, even as a kid, not because we needed the money, but my dad always taught me that’s what you do. You go out, and you work. So I always enjoyed the making money part of it, the working with other people part of it. Even as a third-grader, I remember cutting lawns, things like that. I think there was something in there the whole time, even as a kid that doing something on my own and controlling my own destiny and taking a bigger risk than other people are willing to take was always something I was comfortable with. So yeah, maybe that’s the answer to the question. Maybe it’s always been there, a little spark at least. Danny:It sounds like it has. I hear a lot of these stories where–– especially when you’re a kid. I can certainly relate to it. I remember literally scheming. How do I make money? What can I do? It’s kind of funny. You touched on how your father had an impact, obviously. I think most fathers and most parents would for their children. But throughout your career, is there somebody that jumps out? And it could be career or friend or family, or it could be an event that really had a measurable impact. And I’m sure there’s a lot, but is there one that stands out? Kirk:Yeah. Well, people-wise, there is a lot. I would say, obviously, my dad still is. My dad’s pretty retired now; kicks around doing some stuff, but he’s always been a big influence just from the perspective of values and work ethic and that type of thing. The president of the first software company I worked for, his name was Mack Purdy; he actually died recently. He was a big influence in terms of, he was just one of the kindest people I knew. So one of the first people that, in the business world, I ran into that really set an example of treating others how you want to be treated and you don’t have to be sharp elbows in every business interaction that you have, and respecting and loving your customers and appreciating them, and team members. So he was a big one. Then, today the CEO of that same company, his name’s Pete Kleifgen. We still hang out a lot. I consider him a mentor, still bounce ideas off of him all the time. He’s always been the person that set the best example of doing for one person what you wish you could do for a lot of people, so he always took the time to invest in a few people individually. I guess, hopefully, I picked up a little bit of that in terms of how I work with others on a team. Danny:Yeah, that’s great. It’s interesting; you were mentioning treating people the way you want to be treated and that kind of thing, especially with business. You mentioned the sharp elbows. That’s super difficult, especially when you get into scaling a business, PE or bringing in VCs or anything. That’s a very difficult thing to do, so it sounds like you’re pretty fortunate to be able to have a mentor and work with somebody like that. Kirk:It’s a balance for sure, and you said it well. I feel extremely fortunate. The people, and even the private equity sponsors that we had then at some of the past companies, and the one we have now which is AKKR now is our private equity sponsor, just tremendous relationship, shares the same values, extremely helpful and not overly involved in operating the business, but adding value every day. You hear a lot of stories that don’t quite go that way when it comes to outside investment in businesses, and I’ve been fortunate enough to land in some pretty good situations. Danny:Great. Well, let’s transition a little bit and talk about Kaleris now. Walk me through your involvement. You mentioned it’s a new company, and it sounded like there’s a lot of acquisitions happening. What’s the story there? Kirk:Yeah, so our heritage is a little unique in that—I actually worked for a private equity company for about a year, year and a half while we built out this thesis of investing in supply chain execution software companies with the intention of hopping back onto the operating side, like I am now, once we got it going. So in June of last year, in the middle of COVID, we were fortunate enough to acquire PINC. PINC stands for Positioning, Inc. I think you knew Matt Yearling, the former CEO. Danny:Yeah, he’s been on the show before. Kirk:Yeah, he’s a great guy. We still talk, and he’s working on an exciting new venture now. But Matt was instrumental in helping us make that acquisition. They were VC backed at the time. So they were our first kind of platform investment. And just a tremendous company, fast-growing, not a lot of work to do in terms of value creation there and instilling the values that we’d want to see in a company. So great place to start. And then quickly after that, we carved out a piece of my former business to add to PINC which does railyard management and transportation management systems, software systems for industrial shippers. So think about the shippers that are trying to move goods from point A to point B. They’re our ultimate customers and 3PLs for that part of the business. That’s also a fast-growing part of the business, so we combined that. And then our third acquisition was a small company out of Dallas that does asset maintenance and repairs, particularly around rail cars. So a lot of these industrial shippers who leveraged the railroad for primary mode of transportation have their own railcar fleets. And this company provides kind of a closed-loop maintenance process where you can do the billing and inspections and things like that for that. And that was kind of a product gap-fill for that second business I described. The founder of that business is still with us as well, so really helpful in terms of growing out that maintenance and repair segment of what we do. So that’s a little bit of the legacy, and that all happened from June to October of last year. Danny:Wow, that’s a lot. Kirk:Yeah, we’ve been hard at work at integration and branding. We changed the name of the combined entity to Kaleris, and we’ve started introducing that to our customers over the last few months. Now, part of this conversation is introducing Kaleris to the larger market. We’ve had a landing page, just as an example, for Kaleris.com for quite some time. Just this week, we’ve rolled out the official new website that’ll sit over top of the original three websites. So things like that that we’ve been working on, and obviously standing up to business, building the leadership team, a new location here in Alpharetta, and things like that. Danny:That’s fantastic. And obviously, what an interesting time. I think, if I heard correctly, you said June of last year, so June of 2020. Obviously, we were seeing, relative to supply chain, a lot of things going on. We’re still seeing a lot of things going on. Was this something that was in the works pre-COVID? Or is it something that was a direct result because of COVID, or a mixture? Kirk:Again, timing was really beneficial. We got to know Matt just before COVID. Actually, the last conference we went to was MODEX here in town. Danny:Yeah, we were there. We were all over that. The last trade show in the world. Kirk:Yeah, I think we were all deciding whether we should go or not, and I think about 50% of the people decided to go, and the other 50% decided not to. That was the last trade show. We hadn’t acquired the businesses then, but we had certainly expressed interest by then. And then everything else was virtual from then on out. So we had the good fortune of getting to know them a little bit before COVID when we were able to do that, and then we were able to complete the transaction ahead of time, or during COVID. Same for the other two businesses, we knew the folks there from other folks in our past life, so to speak. So it wasn’t a fresh start. Acquiring businesses or building partnerships during COVID has certainly changed. A little easier now than it was beforehand, a lot of assumptions that we had before in terms of this has to be face-to-face in order to accomplish what you want to accomplish. Those norms have definitely been challenged, and I think we’ve all learned a lot. Danny:So what are the biggest challenges that you’re seeing in the industry right now? Kirk:Other than the new dynamic based in just pure supply chain industry, the new dynamic of the importance of supply chain resiliencies is one of the biggest things that we’re seeing. Obviously depending on the vertical, could see some significant impact based on COVID, whether it be positive or negative. So I think looking back and hindsight in terms of everything that we learned during COVID, I think it’s a brand-new opportunity for both our customers and for us to think differently about how technology can help solve some of those problems. I think most of the conversations that we had during COVID and even today are around, what did we learn during COVID? What new challenges did we discover? How do we think about risk differently to avoid some of the mistakes that we made and some of the good things that happened, frankly, for some customers in terms of the outsized demand, things that they’ve never seen before and had to be able to flex their supply chain up and down? So I think that’s a big challenge, just thinking about what’s changed coming out of COVID. I think another challenge that we’re seeing, not related to COVID is I think our industry, so to speak, industrial shippers, people that are moving things around and the carriers that serve them and the whole ecosystem around that has done a really good job in investing in technology at the point solution level. I think technology has caught up, and there’s enough offerings out there now where the market and customers are really thinking about how to connect all that data that’s coming out of those respective point solutions, which there’s really good ones out there. But it’s solving individual challenges, so given what we just talked about with coming out of COVID and what customers are thinking about differently today in terms of a total solution from a visibility all the way down to the execution-level, I think that’s a big challenge. Where are the black holes? Where’s the missing data? And how do we connect all these legacy solutions that are out there now and add value to their respective businesses? So I think those are the big ones. Danny:Yeah, absolutely. How are you guys positioned to solve some of these issues? Let’s say specifically around resiliency. Kirk:Our investment thesis and how we’re thinking about our company in general is that every move matters. It’s kind of our rallying statement or cause, if you will. As we talk to customers at higher and higher levels within the enterprise, I think the solution and the story, the narrative that we can tell around solving specific challenges and across the whole supply chain is a really interesting one. I think it is, at least, and our investors agree. Between the yard management portion, if you think about trailer yard management which was the legacy PINC business, that team has just done a fantastic job with helping solve some of the biggest challenges there. Same on the railyard management or the TMS system which does a lot of billing, order management, work order creation, those types of things within those same shippers and for 3PLs that are serving those shippers, and then the asset repair stuff. I think you tie all those together at the data level and the analytics level, it’s a really unique conversation that we can have in terms of illuminating those dark spots in the supply chain, really adding innovation to those points of the supply chain which have historically been neglected, and frankly accelerating their transformation. In a lot of cases, believe it or not Danny, there are still sticky notes and paper-based processes. Danny:Oh, I believe it. I’ve seen it. Kirk:I think we add a value there on some of those really vertically-based complications that we still see in the supply chain today. Danny:Yeah, absolutely. I think it’s interesting, especially now. No one has a crystal ball in terms of what’s going to happen, hopefully as we’re climbing out. But you keep reading stories, like you mentioned, specifically about having visibility across your supply chain, and you’re moving your raw goods from A to B. I was reading some stories around Toyota and the automotive space. Just the challenges of when you have so many different components coming in from all over, and if you don’t have that kind of visibility to get an understanding of something that maybe ties into your ERP so you say, “We’ve got a problem in four weeks from now because we’ve got stuff stuck on a boat out in the port of Savannah or Charleston or whatever.” Kirk:Or can’t get chips. Danny:Yeah, chips is a big one. Kirk:Demand planning and all that stuff, it’s a—yeah, that’s part of the unique, and a little bit of what’s changed in terms of that whole looking at—I’ve used the word the supply chain several times, but like you just mentioned, there’s a whole bunch of what I would call individual, custom supply chains, whether you’re talking about automotive or energy or food/beverage, or whatever. They’re all unique challenges. But if you roll it up to the highest level, it’s that visibility so you can actually do something with the data and build software or technology around solving those challenges. But the fun part is, we’re just getting to the point where you have enough data to start to solve some of those challenges. So I think we’re positioned well to help with that, that kind of macro problem. But they are unique, depending on the supply chain. The automotive one’s a fascinating one to watch because it goes up and down so fast based on demand and the challenges that they face. They all seem to face the same thing at the same time, so it’s just big swings in terms of positive or negative from a supply chain perspective. Danny:Yeah, it sounds like you guys got some great tools and some great solutions to be able to have that visibility. I think it’s super exciting because I’m a little bit of a data dork. To be able to unlock potential and see things that you couldn’t see before because they were in disparate systems or what have you. So I think the future is bright, and that’s exciting to be able to unlock that, see the data, get the insights, and be able to make really informed decisions that you otherwise, it’s best guess. Kirk:Yeah, or you just had to duct-tape-and-baling-wire it together and do it manually and do your best at it. It makes it a really fun job around here in terms of customer conversations and thinking about what we can potentially do to help solve those problems. So yeah, it keeps everybody with a feeling of purpose around here. Danny:Well, it sounds like you guys certainly have your work cut out for you. No lack of opportunity going forward, that’s for sure. Kirk, I really enjoyed our conversation, our time here. For those who’d like to get to know Kaleris a little bit more, learn about some of your solutions, what you guys do, what’s the best way of being able to do that? Kirk:Well, all of our stuff is on that new website that I mentioned, Kaleris.com. And we’re happy to help. We pay pretty close attention to that, obviously, given the newness of it. We’ll try to be as responsive as we can. Also, all the traditional channels, LinkedIn, things like that that I certainly try to be active on and stay connected with the industry and with our customers. So I think those would be the two best ways. Danny:Excellent. Well Kirk, again, thank you so much for your time today and sharing with us your story, Kaleris, and what you guys are doing and just some insights in what you’re seeing in the industry. I know our audience will find it really valuable. I’ve enjoyed it, if nobody else does. No, but I think a lot of people will. Kirk:Oh yeah, I enjoyed talking to you as well. Thank you for having me. Danny:Well, thanks for being on. Okay, well that wraps up today’s Executive Series interview with Kirk Knauff who is the CEO of Kaleris. Some pretty awesome technology coming in to really solve the challenge of—a lot of different challenges, but looking at that resiliency in the supply chain and adding some more visibility so we can have some more data and insights about knowing where our stuff is, when it is, and then we can do better planning and a lot more things beyond that. So go check them out at their website, Kaleris.com. And that’s all I’ve got for you today. Thank you so much for watching or listening. If you’ve not subscribed, listen. You need to go to IndustrialSage.com, and go ahead and subscribe right there. Drop in your email address. We’re going to send you these weekly episodes of all kinds of content, and all kinds of great things are going to be continuing to come through in 2021. So thanks so much if you are a subscriber or listener. Hey, thanks so much; we’d love a review. Reach out to us. If there’s anything you’d like us to cover, say, “Hey, listen; we’d love you to do an episode on XYZ,” let us know, and we’ll do it. Alright, that’s all I got. Thanks, goodbye. Have a great day.
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| Chart Industries: Judson Voss, on What Inbound Marketing Is | 02 mai 2021 | 00:23:25 | |
Judson Voss of Chart Industries joins us to discuss a big buzzword in today’s digital, industrial, and B2B marketing space: inbound marketing.
Danny:
Welcome to this episode of IndustrialSage. We’ve got a familiar guest here. We have Judson Voss from Chart Industries, and today he’s going to be talking about really the power of inbound and how Chart uses it. And it’s a really exciting thing. So for those who don’t know you, Judson, or haven’t heard some of the earlier episodes because he was on quite a few at the beginning, tell us a little bit about yourself, who you are, Chart, all that good stuff. Judson:Sure. So with Chart Industries, I’m the digital marketing manager. That means most things. Danny:You do print brochures. Judson:I do brochures. I clean the restrooms most days. It just depends on what’s going on. I drink a lot of coffee for the most part. Danny:Yes, there you go. Judson:Yeah, there you go. So that’s my role there and title. What I do is take the strategy of what we’re trying to do and creating revenue and boiling that down to engagement with customers through the digital platform, which is 90% of what the world is today, anyways. Danny:Exactly, and that’s awesome. That’s very much what we’re going to be talking about today is really this thing, inbound marketing, digital marketing. What is that? From your standpoint, what would you define that as? What is it? Judson:What is inbound marketing? Danny:What is inbound marketing? Judson:To me, regardless of whether you’re looking at digital, analog, whatever it is, inbound is trying to figure out a way to get people to find you and to come into what we call this proverbial funnel, to have a way to interact with you. But nowadays, it’s really coming to a website, coming to some digital property somewhere, social media, whatever it is to get more information about your brand, about your product, about how you operate, all that kind of stuff. Danny:Yeah, and it makes sense. And it’s important these days because there’s been a lot of shift in the industry. I’m curious; how long has Chart actually been using some sort of inbound marketing for, and what was that tipping point where they said, we need to go into this and start moving in this direction? Judson:From a digital perspective, probably for the last five years, something like that. The tipping point that that’s my background, so that’s what we were going to do. Danny:There you go. Judson:But the reality is, that’s where the world is today. Looking at a very big picture view of manufacturing or really just old-school organizations–I’m not saying that in a bad way–companies that have been around for 70 years and have been successful. There’s no shame in being that company. They’ve operated in different ways. Some have latched onto the changes, and to some it’s something new. And it’s just a matter of understanding how your buyers operate, how people come to you, and how they find stuff. You’re talking about a tipping point, I remember I was actually out at a brewery talking to some folks, guys in their late 20s, early 30s that own this brewery, really smart business guys too, by the way. And I was talking to them about a product, and we’re setting them up to be, our company as a go-to that would show off our product and understand the technical pieces and be our voice in that industry. And I just said, off the cuff, I said, “You guys were sold by us. What was that experience, and what things could we improve on?” And they said, “Well, first of all, your video and the way you draw people into your site, from our perspective, really sucks.” Danny:Aw, thanks. Judson:I said, hey, there’s something. Maybe if I dig deeper, there’s something I could look at there. Danny:Hey, it’s good feedback, but that’s pretty funny. So why did they become customers? I’m curious, if your videos sucked, or whatever. Judson:Because there’s only a couple of companies in the world that make that specific product, and they came back and said, “It was really hard to find information about your product and you guys, but when you finally came out and visited with us, we just liked the way you did business more than the other companies. And that’s why they picked it. And there’s a balance there, too. There’s this incoming lead, never hearing of you, needing to warm up the lead part, which is getting to know your business. And then the other part is your people and your business. And I think that should be a piece of your incoming funnel is getting to know those folks, unless they’re just not fun to hang out with. Otherwise, it is an important key is that you are bringing them in to learn more about you, not just to go through this funnel and sell them and hit the bottom. Danny:Right, yeah. And I think that’s a really important point because I think there’s a lot of push-back that we hear every single day. And it’s like, well, that works in other industries, but we’re very relationship-driven. And it’s like, well, yeah, but every business is relationship-driven. And I think there’s a misunderstanding that it’s not to replace those relationships at all. I think it’s really to enhance it, to really augment it. You said something really key there. You said these guys were a little bit younger, in their 20s or whatever. And they thought, aw this is–have you guys been seeing a little bit more of that over the last few years? Judson:Yeah, and it only makes sense because if you think about it this way, Chart’s products, but a lot of manufacturing companies, they’re not selling to other companies. They’re selling to engineers. And most of the engineers that are seeking out new products as a part of their business are not the guys that have been around for 60 years that are working in the engineering manager, director’s role. It’s the younger guys, younger girls, that are in those roles that are coming into the business now. And they’re the ones that they’re sending out to seek these products. So just naturally, it’s going to be a younger crowd. I think it probably was all the time. It’s just that before we had the digital piece, we couldn’t figure out who those people were. So yeah, definitely it’s just a matter of the business, especially in a manufacturing industrial side. You are going to be talking to the younger folks at the company. Danny:Yeah. I think also, too, there’s a little bit of a misconception there, too that we always need to be talking to the CEO. And the reality of it is, there’s several different people. These decisions aren’t necessarily going to be made by one person. There’s an interesting stat, actually, that Google came out with in 2015 which says that–and this was, what, three years ago, three and a half, depending on when in 2015–that B2B buyers are, nearly 50% of them are millennial. Very scary stat, right? That’s what they would say. But the important lesson there, and you pointed it out, is that those young men and women are going to be making those decisions. The way that they buy is dramatically different than the way that things used to be purchased 20, 30 years ago. And it’s critically important to understand that and realize, because it reminds me of business models that just did not pivot. You always think of the Blockbuster and Netflix. Netflix came in, complete underdog, and completely upset the big boy. And I think it’s something like, they had, I think they were valued at, Blockbuster, the highest point was $8 billion. Netflix, I think, is 60 or 70 or 80 billion in terms of their valuation. That is obscene. But it happened slowly. It wasn’t like this overnight thing, and Blockbuster didn’t necessarily recognize, or they failed to recognize it, and it was too late. I hear this constantly from manufacturers, like, jeez, things aren’t working the way they used to, or tradeshow attendance is low. Now we’ve got all these competitors that are popping up. They’re doing all this stuff, and we don’t really necessarily understand it. So anyways, yeah, just to add onto that point. Judson:Yeah, I agree. And speaking to that, and I can’t remember the stat; it came from Joe Pelosi’s stuff, the inbound marketing stuff. Danny:Content marketing is, too. Judson:Yeah, content marketing is, too. I think it’s 90-something percent of B2B buyers today, the first touch is through your website or some digital property. It may not be your website; it may be something, an asset somewhere else digitally that they find you. And that’s just the buyer’s journey today. The main entry point is not going to be some of the things we’ve seen in the past. It’s going to be through a website, through a webinar, through a landing page. Something, somewhere is how they’re getting to you. And even digitally, in the trade, as an industrial area, pass their trade publications. Usually it’s not through the printed material anymore. It’s usually online, through an ad, through an article, something like that that they’re finding out about you, especially videos at a tradeshow and they learn more about you. But it’s not the tradeshow; it’s the video on the website. So the reality of it is, if you’re not well-positioned there, then you’re not well-positioned with 90-something percent of your potential buyers. Danny:Right, exactly. And I think that is, that’s the critical point there in that piece there. That has shifted. You just have to think about when you buy something, whether it’s a B2B purchase or a B2C purchase, what do you do? Do you go to the yellow pages, naturally, and you open–We go into this thing called “the Google.” You Google it, right? And it’s the same exact thing, whether you’re an engineer in a craft brewery looking for a mixing tank or whatever. Case in point. Judson:Yeah, the old days of parts and materials in a big catalog like this they’ll ship to you once a year, you look through it as an engineer to find what you were looking for and then call the company up to get more information, that’s gone. People want to be able to Google it online, find the thing, find more details about it, and then when they’re ready to buy, maybe talk to somebody. But they don’t usually want to do it. You and I are the same way, too. Even big purchases. I want to be educated as much as I can before I seek out the actual folks to get the real details, make sure that what I’m thinking is correct for the product. Danny:Which I think is another really great point is the fact that, I think there’s some stat they talk about. They say that 80% of buyers, when they contact you, they’ve already made up their mind. They’ve already done all their research. They’ve looked at you; they’ve looked at your competitors, and they’re down that funnel. They know who you are; they’ve looked at your material, good or bad. And then that next one, they actually reach out. They’ve already made that decision, or they’re very close to it. So I think the critical thing is, you mention on there that education piece. Nobody wants to, we don’t want to go to a website–we want to be very anonymous. I don’t want a salesperson calling me and hounding me and doing all this. So what have you guys done in terms of inbound to help facilitate that education, that buyer’s journey? Judson:The journey. It varies. Webinars are a big piece. When you’re talking about a fairly expensive, highly technical product, that’s one of the best ways to get there. Two things: they learn about your product, and they learn about you because they get both of those pieces. Hopefully the subject matter expert on that product is the one doing the webinar, so not only do they learn about the technical piece of the product, they learn about the person that they’re going to be dealing with, essentially, the person that helped design the product or get it to market. So both of those pieces are important there. You mentioned before about the CEO, and they’re not going to be the one that’s really buying the product, but they might have an influence. Spend as much time as possible, from an account-based marketing perspective, which is educating each of the different groups in the organization about the company and about the product, really more about the solution. Engineer might be interested in the specs of the product. Everybody else in that company is interested in the ROI. Why are we spending money on this product, and what are we getting out of it? So we try to go across the board that way, so all the different pieces are touched from a digital perspective. Danny:Absolutely, so make sure that the content of different areas, you either speak to that person who’s going to be looking. So if you’re talking to a CEO, don’t talk about, oh, here’s all the amazing features and benefits. They don’t care. It’s, operationally, we think that we’re going to be able to reduce some of your costs by 5% or 10%. Oh, okay. Judson:Even CEOs, maybe at that level it’s more about this is my company. We’re not a shot in the dark organization. We’ve been around for a whole bunch of years. That might be all they need to know at that level, the CEO, the COO. The CFO, he might want to know other pieces of information. Danny:That’s a great point. Judson:I always recommend, if you’re marketing to the CFO, don’t care about the product. Care about the payback. Create a calculator, and use that with the CFO because what they want to do is, they want to be able to calculate the payback without doing any work. Danny:Yeah, right, exactly. Just like we all do. So yeah, I always recommend different pieces like that that speaks directly to their organizational structure. Danny:Absolutely. The thing is, I feel like it’s really taking those relationships you develop, the way that companies have gone to market in the past, and it’s not really changing the structure of it so much. It’s just changing the medium and the way that it’s communicated and delivered. That’s really it. Judson:In my spare time — the other 24 hours of my day — I’ve helped organizations out on that side, the sales enablement piece. And I work with folks sometimes in explaining how to set up their funnel digitally in the first place through software solutions. The first thing I always recommend is, you want a quick win, it’s go out and interview the sales team and understand how they get leads, what they do with those leads, how they decide who’s the important one, who I should call back first, who’s the guy I’m going to ignore, that kind of stuff and totally just copy it. Digitally, just copy that, and do what they do because the company, you’re a billion-dollar company. You’ve been doing something right for a long time. Danny:You would think so, yeah. Judson:So just copy that digitally. You don’t have to go out and reinvent the world digitally. Just figure out how to support what works already through another format. Danny:Exactly, and I think that’s the key answer in that solution to the whole relationship question. It’s like, whoa, what is this? All this new stuff. Judson:It’s still there. Danny:Nothing’s new under the sun. Judson:There’s some cool new stuff from the perspective of how you get the leads in. It’s easier to schlock around at a trade show for four days and stand around at your booth looking at people like, oh, please come talk to me. There’s other ways to do it. Inbound, essentially, going back to the original question, inbound is a digital method to allow people to raise their hand instead of you seeking them out asking if they want your product. And so that’s what all these cool new tools really help you do. Danny:And the beautiful thing, and I love about it too–I mean, there’s a lot of things I love about it–is the fact that that thing runs, if you set it up right, 24/7. It’s like having a whole fleet of salespeople that are out there doing trade shows constantly. So while it’s night time here in the United States, if you’re a global company, you’ve got stuff, or what have you. Or somebody here, it’s an engineer, and it’s late at night. They’re trying to figure out this thing, and they come–they’re being educated. Maybe it’s that webinar that is pre-recorded, and it’s there, and that the project manager and engineer had put together. And they’re learning, and they’re developing that relationship. That relationship absolutely is being developed there. They’re being educated, and it’s being automated. That is really the key piece is that we can take what you’ve done but then scale it. And that is very, very exciting. Judson:Right, and then taking that information. People will say, I don’t know how to create content. You can probably get your subject matter expert to put a PowerPoint together and record it. That’s one piece of content, but now you can break that into a whole bunch of different things. Now you’ve got, A: you’ve got the slide deck that you can put different places. B: you should be able to go back through and figure out blog posts you can write, articles, just redeveloping what the content says on your website. If people watch the webinar, and they send you an email that says, hey, I saw your webinar, and I thought this was really interesting, put it on your website. It resonates with a customer; put it on your website. Danny:Absolutely Judson:And so there’s all different ways you could take that content and repurpose it into new uses. Danny:So for those who may say, yeah, that sounds like a great idea, why would they want to do it? What does content play in terms of–what’s the why it’s such a big deal in inbound? Judson:Well, because it is inbound. Danny:Ah, well there you go. Judson:The folks at CMI will say that, at least. But it is. There is no inbound. There is the idea and the structure. We talk about old-school and trade shows and stuff, but there is the old-school also of AdWords: “Come to my website, and somehow, you’re going to buy something from me because you see a picture of a product and a product spec under that.” That today is, while it worked five years ago, is old-school today too. We’re just moving faster. So people don’t want to just see the specs on products. They want the story behind it. They want to know what it’s going to do for them, which they’ve always wanted. They’re just asking for it digitally. And so they want to see all those pieces. Well, the content is that. The content is what tells the story, that explains the product. It explains your company. It explains who you are maybe sometimes and ties all that together. But without the content, there is nowhere to land and gather data. Danny:Yeah, it’s taking that education and feeding it throughout the journey at the right time. It can’t be just firehosed, everything, all the–And I think that’s the power of having marketing automation systems to be able to help facilitate and do that. Judson:In the right format, too. So we’re talking about repurposing. Part of it’s because we’re lazy marketers, and we want to get as much bang for our buck as we can by one piece of content. But the other thing is, everybody learns differently. There is that engineer that is going to sit there and watch an hour-long webinar. Just so you know, that’s not me. I go and sign up for a webinar. I get the replay, and I hope to God that they have a Cliff Notes version that I can read through in about four minutes. So there’s that piece of it, and there’s people that like to read and different ways that they like to consume their content. That’s why video podcasts, audio podcasts, blogs, you say which is the best? And the answer is yes. Danny:Yeah, exactly. So wrapping up here, one last question is for the company, the organization that’s saying, this is interesting. We’re thinking about this, and maybe we should do this. What advice would you give to them? Are there any particular key steps? What would you tell them? Judson:I could do this for an hour. Danny:That’s a whole other episode. Maybe we’ll do, we can do a part two if we need to. Judson:To me, for marketers, regardless if your title has digital or not in it or whatever your title is, you need to understand your business and your customers first. Regardless of the digital piece or anything like that, you need to know what you’re selling and why you’re selling it. And why you’re selling it isn’t to get revenue. It’s, why is the customer buying it? So you’ve got to have that baseline in there. But then, when you get to the digital side, you have to be honest with yourself. Say, this is new. This is something we haven’t done before, so we need to figure this out. And just going and telling your resources that you have already, go figure it out, it’s good if they want to take that on. Don’t do that as your main source. I think you’re going to end up flailing around trying to get there. So bringing in an outside resource I think is important if you don’t have it in place. If you’ve got somebody there, they’re the digital marketing king or queen, and they can do it, then great. Go from there. But you’re probably not asking that question if you’ve got that already. Danny:Probably not. Judson:So for the other 99.8% of us, it’s good to go out and seek out other resources, even if it’s just for consulting purposes and ask people what they think that are outside your organization that maybe have done this before, something like that, or just hiring an agency to come in and to that. I think that’s really important to set that up in the beginning. And then, the other piece is trying to figure out what you’re going to get out of it and what your plans are. There’s two things that I think, personally, that kill digital marketing implementations in organizations. One is, they don’t know what they want to get out of it. Well, I guess I should say there’s three. The other one is, don’t know what you’re doing, and don’t ask for help. But they don’t know what they plan to get out of it, so they just have zero ways to measure it. And on the back side of that is, they don’t have a way to represent to their boss, the next person up the line, what the ROI is going to be. Because what I see people do is, they come in and they say, we’re going to start a digital marketing plan. And their boss is like, eh. And sooner or later they say, so what do we get out of it? And they’re just like, you don’t understand. Digital marketing is the way of the world today. Well, as a business owner or as a CEO or somebody that’s running a business, the way of the world is great. They want to know what specifics they’re going to get. If they’re putting the money into it, what are they going to get back out of it? Danny:Exactly. Judson:And I think you have to be able to portray that to them. Otherwise, you will get stuck. Danny:Absolutely. Judson:We always said, get by, and get sponsorship from the top level in the organization. That’s what you need for whatever project you’re doing. Digital marketing is no different. I think it helps you, too because now you’re like, okay, now I know what I expect to get from it. And now I know what I’m going to measure. And now I know what success is going to look like for me, too. So you cover it all in that— Danny:Reporting, analytics, and communicating that back. Judson:Yeah, having a strategy, all that. Danny:Awesome. Well, Judson, I really appreciate the time. You’ve given us a ton of great information. If anybody had any further questions, they’d like to reach out to you, what’s the best way of contacting you? Judson:Best way is to go to my website, probably, judsonvoss.com. Danny:Perfect, yeah. Judson:I don’t know how I came up with it. One night I was sitting— Danny:That’s a tough thing. Judson:Yeah, I had to change my name and everything. But that’s probably the easiest way to get me through there. Danny:Excellent. Alright, well Judson thanks again so much for the time, as always. I know we’ve seen you here a lot. Hopefully we’ll see you here some more. And thanks again. Judson:You betcha. Danny:Alright. Okay, so that was great, look, another great episode. Inbound marketing, what is it? Why it’s important, why you need it, I think some really big, key takeaways. I think really the big thing is that recognizing and fully understanding that the buying cycle, the journey has shifted. It’s changed, and people are going to your website first when they want to go learn more about you. And you have to ask yourself a critical question: What are they finding when they go and Google you? A, can you be found? B, once you’re found, do you have the right information? Do you have the right content that educates them, that tells them who you are, about your products, about your services so that when they’re ready to contact you or make that decision and contact who they want to go to, that they have been fully educated on you guys? This is the company that we want to go with. Is that set up? It’s a very key thing. That’s the way that we’re going and the way that we’re going to be doing that here. So thanks so much for watching this episode. And if you have any questions, please feel free to reach out to IndustrialSage.com/questions. We’d love to answer them for you. Please share this; like this. If you’re listening on iTunes, we’d love a review. And, as always, thanks again. I’m Danny Gonzales, and this is IndustrialSage.
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| Drift: Chris Handy, on Streamlining the Sales Process with Chatbots | 18 avr. 2021 | 00:28:51 | |
Chris Handy of Drift explains how companies can use chatbots to enhance the customer experience and accelerate their sales process.
Danny:
Hey, I’m Danny Gonzales, and let’s jump in today’s episode. I got Chris Handy from Drift, and we’re going to be talking about chatbots. What the heck are chatbots? But before we get into that, Chris, hey, if you could introduce yourself to the audience, tell us who you are and what this Drift company does. Chris:Right, my name is Chris Handy. I work here at Drift as a customer marketing leader. I was an early customer with Drift on the client side, and then I started a Drift partner agency there for about a year. And then they basically said, why don’t you come do that on over here for us? And so I’ve served a lot of different roles in different companies from leadership to sales to doing everything and marketing and all those things. And I just found that Drift was making a platform that really helped accelerate the sales process for folks. And what Drift is, and what we say about Drift, really, is that Drift connects you now with the people who are already interested now, so you can build better pipeline faster. And we do that in a variety of ways. One, you’ve mentioned already, but we’re tied into all kind of areas of communication, especially for sales folks. So if you’re sending out an email or something like that, and they click on a link back to your website, you’re there. You are there to greet them, no matter who you are in the organization. And we can also automate some of those things so that if you’re not ready to chat with someone right now, we have DriftBot which can take care of a lot of things for you and route to you and book meetings and get support questions out of the way where they need to be. It’s a platform that really helps to get things done faster for folks that may not have had a great way to do that before. Danny:Awesome, that’s great. Actually, a quick question on this. Actually, we’re on the client side on there. I’m just curious; was there a particular vertical that you’re involved with? Chris:Right, so I worked with a bunch of different companies as a consultant. And we were implementing other technologies before, so maybe your more traditional marketing technology stack. And what we found is that the implementation of those hadn’t changed much, but the results that came in from those old-style landing pages and gated content on everything, behind mother’s maiden name and deepest darkest secret and all the other things that we let those forms build up to be, they just weren’t working as well as they used to. In fact, the lead volume had decreased by almost half on a lot of our different client accounts, so we were looking for, how can we take this to the next level? And so looking at Drift, and Drift was really early on, we started testing this on our own website. And the first moment we put it on, we started to get people that chose that channel over the other contact us-type channels almost immediately. And we also found that there was a greater number of people that were choosing to contact us overall. So this was really early days before there were bots involved and automation, so it was just chat. What chat allowed for was this brand-new channel that people didn’t like the old channel as much but maybe would’ve filled it out anyway, they chose the new channel. But then all these new people that were not really keen on the friction that forms and landing pages would put into place, they opted to contact us when before, they had not been contacting us. And when I saw that, when I noticed that, I thought, man, this is really something, something we need to be paying attention to. We had tried some other chat tools. They were not really focused on customer experience before. There were far more folks on maybe a support-type environment, and they just didn’t have that ease, that look and feel and experience when you’re actually using it on both sides, on the seller’s side and the buyer’s side where it just feels more natural. It feels a lot more like you’re just texting your friend. And so I knew there was something happening with Drift which led us to implement that with more and more clients. And I realized, man, we’ve got to just make this all that we do because there are not that many companies out there that just focus on this. And so we went deep on that. And it became clear that, while I could keep doing that, there were a lot of things about the product that, I was sending in suggestions and other things that they ended up appearing there, like the same day. Danny:Oh, wow. Chris:They would be there with the product. And that was just amazing to me. I thought, I’ve got to figure out what’s going on up there. How are they able to do something where I just tell them, “hey, I’d like for this to happen,” and then it appears. And it’s the way the product is built here, based on customer feedback and what people are really asking for. It’s like nothing I’ve ever seen. It’s not where there’s this one, singular thing that it has to be, and that we never stray from that. We follow what the customer wants. I just had to be a part of it. And we found a way to do that, and now I’m here leading customer marketing which is so much fun. I get to have even more influence over that kind of stuff and then see one of the best teams in the world, really, build this thing that’s helping sales teams connect with more qualified prospects. Danny:Well, that’s super exciting. So for our audience who might not necessarily—some are familiar with it, and some aren’t. When you’re talking about the concept of chat and chatbots, can you maybe break that down a little bit? Chris:Right, I think this is an important distinction. You may have had an experience, and some people think back to some time they’ve bought a car or something, and they had some chat on a car dealership website or something. That’s not what this is. When we talk about chat the way Drift implements it, it’s more like iMessage on your website where you can come in, and you can just have an easy conversation, and there’s no form to fill out—although a lot of people do choose to put in their email address just because they want to—where people can ask questions. And what’s great is that chat, in this case, it’s got bot baked into it. So it’s not just one or the other. So a bot would be an automated action taken by a clearly-represented chatbot on your website. So we know it’s not Chris. We know it’s not Danny. Ours is called DriftBot, and literally, it looks like a little robot. And so we expect that to behave differently than if I were speaking with a human. But what we’ve done is we’ve created a platform that is all-in-one. So there are a few different ways that you can interact with a company. You can interact with what appears to be a bot at the very beginning, and then a human might jump in if you get hung up on something. Or you can type into what we call a welcome message which is clearly me, or it’s clearly a human at the company, and then I’m expecting for someone to respond. Now, we’ve made it so that both work together really well. So if I type in an open question into chat, a lot of salespeople think to themselves, well, I can’t be there to answer all these support questions and other things like that. So we have a way that we hook into your knowledge base. And so what Drift is going to do… it’s going to look into your knowledge base for an answer first and try and surface that answer and get that out of the way right before anyone has to jump in. Then, if it’s not answered, then it’ll grab somebody. And what we find is that people use that moment to upgrade their knowledge base. It’s like, hey, people are asking for this. Let’s figure out a way to automate that. So you chip away at automating support over time. And what the bot does is it allows you to have a fully-automated experience where folks can self-qualify. For instance, you might have a bot that calls out from the corner of the website, it says, “hey, can I ask you a question?” But other than saying something like any question, we say “can I ask you a question?” And we say, “hey, are you looking to do this or that,” and sort of get people down a singular path so that we can identify more about what they’re trying to do. And then, maybe there’s a moment when we should actually pull in someone to talk with them. Maybe it’s a really hot lead that we already know is qualified. But maybe it’s someone that wants to book a meeting for later. And we’ve got that integrated right in, so they can just book a meeting on someone’s calendar right there without having to do the back and forth. So we’re really looking to automate those most common actions that people, on the buyer’s side, are trying to get done. They need an answer to their question. They need to book a meeting. Or maybe they have a question for someone now, and it’s appropriate and the sales team chooses to operate that way. So our platform, we look at it as the new way businesses buy from businesses. We’re far more focused to being a B2B tool than we are a business-to-consumer tool. I find that a lot of folks in this space are definitely in the B2B crowd. So if you’re selling B2B, and you are looking to make that experience better not only for the people on your site but also for you as a seller, you might want to give that a look just because you can walk down the street, you can be at the Walgreen’s, and you can get some of this stuff routed to your phone if you so choose, which is super cool. So that’s the two different things that work together as an overview and how live chat versus chatbots might work. We may go deeper, I’m sure. I’m sure you’ve got questions. Danny:Yeah, absolutely. I think that’s interesting. I didn’t know about the whole, connecting into the knowledge base. From a customer service standpoint, but also from marketing and sales, being able to learn, okay, what are those questions? I would imagine that would be able to fuel a content strategy. Say, oh, we’re getting all these questions about this or that. Oh, well, great, that’s our content. That’s what we’re going to help to be able to create. And it’s being able to do that, which is interesting. The other interesting thing, too, is that you mentioned that it’s a frictionless touch. So one of the challenges I think a lot of people run into, especially with a lot here in our audience, is that you get this data. You find out who it is, and you’re immediately, let’s get them on the horn. Let’s call them. And it’s like, whoa, wait a minute; wait a minute. Let’s just slow down. People are here. Let’s let them buy and self-educate on their terms. And I think that’s a really interesting thing that it allows that opportunity for you to be able to engage, if you want to. Chris:Right. We can always let people raise their hand. We’ve got sales reps; they’ll come running. Danny:Yeah, exactly. Chris:That’s not a problem. But if they’re not ready for that, why introduce this chase that doesn’t need to be there? It allows us to be a lot more conversational in the sales process and just, hey, what are you trying to do today? Let’s get you going, and let’s get you fixed up. Danny:Yeah, absolutely. Again, that makes a lot of sense in the world. So what are you guys seeing, just in terms of—what’s your vision in terms of the next few years on how you think this is going to play out as to, from a marketing tactic because, quite honestly, I’ve heard a lot about it over the last year or two, but this year in particular, and definitely seeing a lot of this being rolled out on a lot of different websites, very easy to identify the Drift robot. There we go; I get it. But what are you guys seeing in terms of what it’s looking like in the next six to 12 months? Chris:Yeah, what’s awesome is that we don’t have a product roadmap. We literally, and I touched on this before, but we follow what the customer needs. And so I can talk to that. Who are we solving problems for, and what are the kinds of problems maybe we’ve solved to give you a hint at why we do what we do? We’re laser-focused on sales and marketing. So there’s a lot of folks that are out there building best-in-class support tools that tack on this sales and marketing piece. We are looking to build the best platform for sales and marketing on the planet. And if we continue down that path, what we’re going to find is things like that help thing that I was telling you about where we could just automatically, 100% of support completely out of the way. Those kinds of things, they do emerge. And they come into play in really interesting ways. We have all kinds of different skills that our bot has. One of those skills is the email capture skill. It might come into play when someone asks for a meeting or when someone—you can use our product as sort of a universal gate for your content. What we found is that a lot of people have this big, complicated marketing automation system, and they’ve got a legacy of using forms. And they’re not ready to just upend everything and say, okay, we’re not going to take down forms. We’re very much against forms, but we realize that they are in place. And so the best way to ungate all of the content for people who you know already is to say, hey, tell us your email. And then Drift recognizes you wherever you end up going on the website. So why would we ever ask someone for an email again? Danny:It doesn’t make sense, redundant. Chris:It’s—absolutely. So we can offer an experience adjacent to all those forms and landing pages that you’ve got to give someone a fast lane into the content that they’re looking for, so we’ve got skills that take care of that. They take care of that throughout the conversation, and then they make sure that you get routed to either the right person or the right content based on where you are. And so allowing folks to skip that line and not ever feel like, hey, shouldn’t you already know who I am, is part of what we’re solving for. And I think that that speaks to our focus on solving the problems of people in sales and people in marketing who are focused on demand generation. Demand generation is all about sending email and sending people back to those forms, but we can make it better, and we can increase conversion rate because we’re not asking you to fill out those forms. We’re sending you right on through. Danny:That’s awesome. It’s such a different way of being able to propose that information. I love the idea. Even, it’s almost like not necessarily killing forms, but really moving away from that. And then, it totally plays into a much more seamless approach to that progressive profiling to get incremental information as we get along down the process, not having a form that has 15 million, which is a bad anything, having 15 million different fields. I don’t know you from Adam. Yeah, I’m going to give you my address; no. But having that as an iterative process. And I love also what you talked about, how you don’t have a roadmap, per se. It’s really all about listening to the customer. Chris:Right; there’ve been things that we’ve built, and we’ve thought, hey, this is going to go gangbusters. And it didn’t really go off the way we thought it would. And we put less emphasis on some of that stuff going forward and put more emphasis into what the demand is. And that is what’s so great about being close to the customer as an organization. The way I felt when I was a customer is how close we still are with a lot of customers where we feel a real attachment with these folks that help us build the product. When it’s a customer telling you what they want, that is the voice of maybe 100 or 1000 customers who really want the same thing but haven’t taken the time to speak up. So the one thing that Drift uniquely allows us to do is to stay in tune because we get these comments and suggestions all the time, and we’ve got now a cadre of folks that are just, they’re in the inner circle. We know who they are. We recognize them every time. Not just the technology, but we do. They’re trusted advisors because they’re telling us what they need. And we lean on the customer for that. Danny:Well, I think what is great and is such an awesome opportunity is taking that methodology, that idea and being able to, rolling that out, like with our audience. If they’ve got—you’ve got websites; you’ve got all this information there—is taking that exact approach, using that as the ability to listen to what people are asking for and then being able to adjust. And I think that’s, for a lot of people in the manufacturing and industrial space, that’s a big lesson that we’re learning and making adjustments to be able to say, hey, you know what? It’s funny you mention the whole, hey, we develop a product, and we think it’s going to be amazing. It’s the same, exact thing in the manufacturing space. We’ve talked about it all the time. If you’re developing a product, okay, well, let’s make sure first that there’s an actual need for it versus, hey, we think this is awesome. And it may be awesome, but if your customers don’t think it is and there’s not a need for it, well then it’s completely pointless. So this is kind of flipping that, being able to say, hey, look, we can take a pulse, take the temperature, see what’s going on. We might discover things that we didn’t know about, which I’m assuming that happens all the time. Chris:Oh, the product today versus where it was when I started using it as a customer is a completely evolved and, in some ways, very different place to be. The one thing that hasn’t changed, it’s only just gotten a better version of the same way it was is the way it feels when you’re talking with someone in there. I use this hand motion because I find that it’s even better. And so if someone’s out there, they’re already using drift or something like it, it’s even better to use it with your mobile device because that feeling of talking to someone, it very much allows you to be more conversational because you’re using that motion you use with your— Danny:Text message or whatever, yeah. Chris:Friends, right. I tend to have much more direct, more—I call the language business casual. It’s not so informal that you wouldn’t be comfortable doing it, but sometimes you have casual Friday, you wear jeans and a button-down shirt. You can sort of let your hair down when you’re talking with someone one-on-one and be more punchy in the way that you—because if you look at how you text, you’ll send a response to a question, like “do you want to go do this?” You’ll say “yes,” and you’ll send that. And then you’ll say “I was thinking about the same thing.” You’ll send that. And then you’ll say “but what about after, we do this,” and then you’ll send that. So you’ll have three little messages versus this big email. And what I see is that that’s how people use the product who are the most successful, and that hasn’t changed a bit. So this core experience between people who are just connecting with one another which is what we’re best at doing, connecting people now, has remained unchanged despite all of those other things that we’ve added to the product that really just help that connection happen with the right people, and happen faster. Danny:Yeah, that’s awesome. And that’s a big, sometimes, concern, too with a lot of our audience is that you know what? Well, listen; this whole online marketing automation, all this stuff, it seems so impersonal, and no, our business is all about relationships. I know; everybody’s business is about relationships. That is the key. And so I love the ability of being able to do that, to really make that connection happen faster when it’s needed. It’s a very interesting use case you’re talking about, just how the text messaging thing is almost how—yeah, you would communicate maybe a little bit differently that way. I love it. That’s awesome. What would you say to a company that are saying, hey, we’re thinking about rolling this out? What would be some tips in terms of first steps, in terms of rolling out something like this? Chris:Right, so oftentimes this will start either in the sales organization or in the marketing organization. So let’s talk about how it might look in both different instances. So if you’re starting in a marketing organization, a lot of times you’ll find one person who is excited about the idea and is looking to roll it out, but maybe isn’t sure exactly how to communicate all that to their sales team. If you’re not as open-minded and/or educated in what this can do, then the old dog-type salesperson might immediately shut the idea down. So I would say the way to get started is not to go to the sales team and say, alright, now you’re going to be chatting with everyone on our website because—and we’ve done a lot to solve for that, and it’s hard to communicate that if you don’t set the stage first. And so oftentimes, the most successful organizations driven by marketing are, they’re going in and they’re creating some of these experiences in an automated fashion, more so to get a proof of concept out there and just to use it as a lead-gen tool, sort of like what you described before. Let’s ungate most of the content by providing one opportunity to tell us who you are. Now, we’re going to send you off in different ways and make this whole process easier for you. And then as those leads are generated, you can find one person you can show on the sales team and say, hey look, here’s what we’re doing. This is working really well. We’re bringing in new people, more people than before, in fact. And we have a way where we can get people through a qualification process and then book them right on your calendar for a sales appointment. Is that something that— Danny:You would be interested in? Chris:Right, yeah, sure. Danny:Um, okay, yes. Chris:Right, so when you show people hey, look, here’s what’s going on, here’s how this is going to work, and here’s how I’m going to protect you from the massive volume of people who are on our site who may have a question that’s completely unrelated to a salesperson’s day. And so if you could position it that way, then you’re going to be able to get this thing going because you get one person going. They get automatic meetings, and they’re starting to build pipeline. Danny:Done. Chris:It just goes. So that’s, from a marketing organization standpoint, is getting that proof of concept, finding a pilot partner in the sales team. And a lot of times these sort of lines of communications are already there, but sometimes, and particularly in lower-tech or not quite as—you don’t have a bunch of software running all your stuff, basically. If this is a new area, then you may not have people who are focused on marketing operations or some of the things that go along with that. Now, if you’re a salesperson, you have a lot more leeway in this. So you can talk with someone in marketing and get this thing going and sort of bring that pilot person with them. Marketers love the opportunity to generate more leads because they’re measured on that, and how can we get this thing done faster? And I think my best advice would be to put this thing on—and you just go to the app store, you download the app, Drift. And then now you’ve got it on your phone, and you can just have this on you all the time when you’re ready to talk with anyone during the hours you set and the parameters you set up. Danny:No, that’s awesome. That’s super cool. Admittedly, we don’t have this on IndustrialSage, IndustrialSage.com on our website there. But we are totally— Chris:Well, that’s why I’m here, to change all that. Danny:We are totally going to implement it. Actually, it’s been interesting. It’s come up quite a bit, and actually we’ve looked at it. We’re like, gosh darn it, we need to do this. But it’s been interesting how we’ve seen some of our clients roll out with it and different things like that. So I definitely see this as going—we really appreciate your sharing with us your insights on it. I love your story, how you came from agency; that totally flipped the script for you, if you will, and now you have a pretty cool story. But it totally makes sense about the use case and how you guys are using it. So that’s awesome. Chris:Yeah, so if we ever do round two, we can talk about building the next level type bots for your company and what they should be doing. We talked about it being, flipping it again on the focus of your website and saying, can I ask you a question? So it’s the ice-breaker that gets the conversation started that’s maybe the most important thing. And it’s all about writing great headlines, and this goes back to old-school copywriting and all this. We’re not designing a new website and putting snazzy stuff on it. We’re just providing this other experience that other people choose to engage with, and we get to flex our creative skills a little bit on the copywriting. So I can talk with you again someday, maybe, about that. Danny:We’re going to have to have that second version, take two because we could probably go hours on this. For sure, we could go on hours. It’s super cool stuff; love all this technology. But really, at the end of the day, it is purposeful. It’s not like—because there’s so many different technologies—hey, we can do all these things. We can measure all this—yeah, it’s great, but you know. But this is very intriguing, especially as you have more machine learning and AI, all this stuff rolling out to make these things even smarter, better, faster, and all that stuff. That is super cool stuff. As we wrap up here, any last words you’d like to say to our audience about Drift and chatbots and all, where to be thinking for 2019? Chris:Right, one of the best things that I can offer you as a resource is that I’m heading up your Conversational Marketing University. Danny:Okay, very cool. Chris:There’s going to be a lot of education there and some of the things that we talked about, but going in a little bit deeper. So if this is something that you’re looking at rolling out at your company, even if you’re rolling out with another company, come learn, take the strategies that we’ve got in Conversational Marketing University. And roll it out wherever you like. We just want everyone to understand how to do this better, how to make better connections. And you can find that at drift.com/university. Danny:Perfect, that’s awesome. Well, we’ll put that in the show notes, make sure we’ve got that link in the articles and stuff that we have. So Chris, I really appreciate the time. This has been fantastic. I’ve learned a lot; I know our audience has learned a lot as well. So just thank you. Chris:Hey, thanks for having me, Danny. I appreciate your time. Danny:Absolutely, any time. Alright, so, wow. That was an awesome episode about Drift. Who’d have thought? Chatbots and AI and all kinds of crazy stuff. Listen, this is something that I mentioned there. I am not blowing smoke. We are going to put this on our website, IndustrialSage.com. We’re going to see first-hand just how this works, and we’re going to report those results back to you. And I wholeheartedly believe in this. I think this is something that we’re really, you’re going to see a lot more of. And it’s something to be thinking about on how to really augment your digital marketing campaigns to really help your sales teams to be able to generate leads, get them qualified, process them. Your sales teams are going to love you when you do this because that’s really what our job is as marketers is to really generate really qualified leads and really help sales to really close those. So that’s all I’ve got for you today. Thanks for watching. If you have any questions, we’d love to answer them. You can reach out to us; IndustrialSage.com/questions. If you’re listening on iTunes, we’d love a review. Social media, hey, we’d love a share. And until next time, I’m Danny Gonzales, and this is IndustrialSage.
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| Flex: Paul Baldassari | 04 avr. 2021 | 00:30:13 | |
Paul Baldassari of Flex Manufacturing joins the Executive Series to share how their company pivoted abruptly in response to Covid-19.
Danny: Well hello, and welcome to today’s Executive Series on IndustrialSage. I’m Danny Gonzales, and I’m joined by a very special guest today. You are in for a treat. Today we’re going to be talking with the executive vice president, Paul Baldassari, from Flex Manufacturing. And we’re going to be learning about Flex, what they do. We’re going to learn about Paul’s story. And we’re also going to learn about this massive pivot that Flex took at really the beginning of the pandemic, and we’re going to hear about their response. And they did some amazing things that you’re going to hear about. So before we get all into it and get excited, I’m going to introduce my guest here. We have Paul Baldassari. Thank you so much for joining me today on the Executive Series on IndustrialSage. Paul:Thank you very much, Danny. I’m honored to be with you today. Danny:Well, this is going to be a fantastic episode. I’m very excited about it. But before we jump all into it, let’s answer the first big question. Who is Flex? What do you guys do? Paul:Well, Flex, we want to be the manufacturing partner of choice. We want to design and manufacture products for our customers that improve the world. Today we operate in a lot of different industries. We do medical products that we’re going to talk about in more detail. We do automotive products, industrial products, products that power the internet on consumer devices as well as enterprise computing and communication devices. And probably for the audience in the room that you sit right now, there is going to be probably five products that Flex made for you for our customers that have the brand on the product. And we are proud that we serve so many people in so many different countries. Danny:That’s great. So real quick, just for context, how long has Flex been in existence? Paul:Flex started 50 years ago in contract manufacturing. Since then, we are proud to produce quality products for our customers. We started in PCBs, supporting basically electronic components on boards. And we increased the depth of our services to our customers, not only doing electronic boards, but today we also do a lot of tests, automation, design for our customers, this great, full products, and do the logistics and repair for our customers that we serve full product range as well, the full depth of the market. Danny:Excellent. Okay, so we’re going to jump in to more about the business and obviously this response that you had with Covid. But before we do all that, I want to get to know Paul. I want to get to know you a little bit more. Tell me. Take me way back. How did you get involved in this space? Paul:It was kind of a fascinating story. I was still a student. I worked for a company that was providing IT services in a summer job. And Flex was my largest client. And I was so fascinated by the products that Flex is doing because you’re always on the forefront of technology that I fell in love with the culture and with the environment. And that was about 23 years ago. So technically, I live my dream. I’m still in my summer job. But I have many opportunities in Flex. And that was really exciting. I started in IT, and I had the opportunity to go into engineering, to go into operations. I led a factory for a while with 7000 people, and that was a big learning for me. I got opportunities to lead quality. At some point, I was entrusted to lead HR for the full company which was a complete segue, but a very interesting experience. And today my team and I are leading manufacturing technology, strategy, quality, and other core functions for the company which is very exciting because you get to learn so many different things in Flex. Danny:That’s amazing. Wow. Okay, so quite the history there. You just fell in love with it, basically. You just—you said internship there out of college, or first job there. Paul:Absolutely. The great thing about Flex is you see so many different things. It’s like the dream of an engineer that you can work on the forefront of medical. You can work on the forefront of automation. You can work on the forefront on automotive. And you can also see how the technologies and the learning in each of those industries converge together. When you think today about an autonomous car right now, that’s where you merge the thinking of traditional automotive suppliers or automotive companies with the thinking of enterprise computing. When you have an autonomous car today with the edge computing that you need in the trunk, you have basically a small data center. And we know all of that because we produce, and we help our customers design data centers. And since 50 years, we are serving as well our customers in automotive. So we know how to put that in, how to make that server work in a car-type of environment, and with that help to power the future of intelligence cars. Danny:That’s fantastic. So alright, you’re in college. I’m taking you back there. You said you were in IT, so I’m assuming you were studying IT or some facet of it. At that moment, before you took that job with Flex, what were you planning on doing? What were your dreams set on? Paul:In Austria we have a special way of education that, even in high school already, you can learn a trade. So I did communication engineering. So I was always interested in technology, especially around communication engineering, how microelectronics work. But then I got into business administration, and I started business administration with a focus on IT. And that gave me the opportunity when I started my internship with Flex to help Flex manufacture high-tech devices. And if you think about how Industry 4.0 is powered today, it’s all about the convergence of manufacturing technology with IT. So both of my interests are coming together in this company, and that makes it so exciting. So when I started my internship, I was right on the manufacturing shop floor trying to help with IT solutions to make the production process more efficient but also to increase quality through tracking our products’ flow through the shop floor. And I see that with many colleagues and people from my team as well. Today a lot of people have passion about IT, but people also want to have something physically in their hand. We are powering those devices that enable IT solutions to function in an Industry 4.0 world, and that makes it really exciting to work in this company. Danny:That’s awesome. That is fantastic. You’ve had a very long career there, obviously. Is there a moment or maybe a person that jumps out to you that has had a huge impact in your career? That could be personally; it could be a mentor there in your career at Flex. Who jumps out to you, or what jumps out to you? Paul:Let me start from—it is a long career in this company for 23 years, but it doesn’t feel like that because you do so many different things. Every time you do something completely different, you work for a different industry, it feels like a new job. And that brings me as well to my mentor, Francois Babier. As a techie, I focused very much on having the best technical solution, having the best SMT line run the production. And he told me and taught me that it’s really all about the people. And that really was a revelation for me. At the end, we are all very passionate, especially people with a technical background. We want to bring the best solution in place. But everybody can buy the best SMT line. Most of the companies can put real nice factories in place. But customers are not choosing us because we have the best line or because we have the best factory. They actually choose us because we have the best team. And so for us, developing our teams and making sure that we have these high-performing teams in our company are most important. And at the end, this high-performance team is not only the people within Flex. It’s actually an extension of our people together with the customer team together with our technology partners and our suppliers. And Francois really helped me to understand that. And today he’s still a great mentor, really making sure that we keep always the people agenda as priority number one because at the end, that’s our sustainable advantage, I would say in the industry. And that’s a sustainable value that we can add to customers to help in creating this high-performance teams that together find great, innovative solutions and make that work in scale. Danny:Well, now I understand when you were talking about how you moved into HR a little bit, where that might’ve come from. That’s starting to come full-circle. I can see a little bit of passion there. So yes. Paul:Absolutely, yeah. At the end, it’s really all about people. When we think about our industry 10 years ago, the constraint of growth was always, can you get an SMT line fast enough? Can you get material fast enough? Can you build up a factory fast enough? But today, we are in a world where it’s all about people. All companies I know have only one constraint, and that’s talent and making sure that people work well together. It’s not only good enough that you have genius people in your organization. Actually, you need to bring a diverse team together that can work together. And that got even more complex in collaborative design with our customers. Today we provide a lot of design solutions across the full spectrum where we teach some things to our customers in areas where they have not operated before. They teach us a lot, and we need to have trust and work together. Our mission and vision is we want to be the most trusted partner because that enables an environment where people can work freely together, share ideas, come up with new ideas, and help to move things faster. And specifically through the pandemic, this was so important that we break down these barriers and all work together and create solutions that help us to create a better world and, in that current point in time, keep everybody healthy. Danny:Absolutely. Well, I think that’s an absolutely great pivot point or a way, a great segue as we transition a little bit. You were talking about the pivot with Covid and everything. Part of the story is that you guys were one of the companies that jumped on and said, there’s this huge shortage of ventilators that are coming on, and there was a massive need on a global scale. And you saw that need, and you responded to the tune of where you guys created just a ridiculous amount of ventilators. How did you say, from a business standpoint, we’re going to jump in, and we’re going to tackle this challenge? Paul:So we have been a large supplier of medical products in the past. And with that, we understood the responsibility. For example, we do a large amount of the worldwide market on blood glucose meters. So we understand our responsibility that we continuously serve patients that need help with monitoring their blood glucose. The good thing about medical is, it’s very high-quality products. The challenge that the medical industry faced in the past was that things go pretty slow because you have so much regulation that you need to take care of, and it’s totally understandable when you develop an industry like that that the patient’s health is most important. But once you get into a pandemic where it’s even more important that you get product fast out to the patients that need it, we were able to get with our customers and with regulatory environment and authorities to break down those barriers and speed up not only the design piece but also the supply chain. It takes an enormous amount of time, normally, to qualify all of your supply chain. And some of that is pretty rigid, I would say. So it’s difficult to scale. Danny:Yes. Paul:New technologies like additive manufacturing helped us suddenly to speed up the design process, but even on volume, we were able, with additive manufacturing, to bring parts that were stuck in some countries where factories were shut down. So it was great to have this new way and new spirit together with our customers and produce many thousands and millions more of devices that helped people during this pandemic. And I think that’s going to be a real revolution in the medical segment because now people understand how fast we can be when we break down all the barriers, work together. We are not compromising on quality. We still need the same quality because we are actually providing people that save lives. But if they go wrong, they can also put people at harm. So we don’t want to risk anything on quality, but we’ve shown that with better collaboration, we can be much faster and help much more people. Danny:Absolutely. And to that point, I want to be clear on here. I just want to make sure I have my facts correct. You had not ever manufactured a ventilator prior to 2020. Is that accurate? Paul:The ventilator story was really about how you can speed up design, how you can speed up volume REMS, and how you can also mitigate supply chain challenges. One of our key suppliers in the ventilator business was shut down. So we were supposed to deliver 20X more ventilators from one month to another, and we couldn’t get one component. So what do you do? We have today 106 additive manufacturing printers in the company. We put all of our brains together, and we basically used every, single piece of capacity that we had to provide components that we could use for ventilators. We scaled up, from a people perspective, from an asset perspective, and it was really great. Switching to the masks, that’s something that we learned in February last year. I was in China in late January, and Covid just started up in China. It was not really a thing yet in the US nor in Europe. I remember we had our first Covid contact in Europe, beginning of March, and by then people still thought that this will go away. Unfortunately, it did not. And we took a decision beginning of March that we are going to produce our own masks. And we have not produced a single mask before. So together with one of our trusted partners, we actually designed and bought 12 manufacturing lines. We distributed them in 10 factories around the world because, at that time, the conversation was about could you actually move masks from one country to another. The government started to put in supply chain restrictions. And so we diligently put together not only manufacturing but also supply chain strategy that we could serve from those 10 strategic locations all of our people internal and also strategic customers and suppliers. And now we’ve produced over 80 million masks. We did not have a shortage at all in the company about face masks for our people. We also provide a lot of masks to communities, to families. What we’ve seen during the crisis is that most of the Covid infections actually don’t come from within the company—we have very strict measures from social distancing to disinfection, so we have a very decent protocol—but come from the outside when kids bring it from school or people meet friends outside. So we want to give as many masks as possible, not only to our people, but also to their families that they can protect themselves. And we are donating a lot to communities as well. Danny:That’s amazing. That’s fantastic. During that time—you were mentioning a lot of the government restrictions and challenges relative to supply chain. You had suppliers that were completely shut down in other countries. Not to mention that even if you did have access to it, the delays were huge. So as sure as something as—you have a boat stuck in a port that can’t leave or it’s sitting out waiting to come in from wherever and there’s weeks to months where they’re behind. How did you navigate that, from setting up, looking for new suppliers? How did you navigate that? Paul:There is the IT piece that comes in. So already before Covid, we created a global supply chain system that provides us real-time supply chain information. So today we have a very good view on where are all the different parts in the world? Where are the parts incoming? What are the risks? And that system even allows us to look at a specific event. So if there is an earthquake in a specific country or location, which factories are hit? Which of those factories actually impact our factories and impact our customers? And we can go back to our customers. So first of all, we can react really, really fast. Second, due to our global scale that we operate today in 30 different countries, we are able to mitigate some of those supply chain shortages with internal manufacturing, some of that through our traditional manufacturing, some of that through additive manufacturing, and then work with alternative sources. So we have internal teams. As soon as we saw part shortages, we looked into, can we qualify other suppliers? Are there other companies out there that can do something similar or can convert fast enough? And I don’t want to say there were no problems. We had plenty of shortages, but we were able to overcome those together faster for our customers, and especially in the areas where it’s about helping people; that was most important. And I want to thank the team as well. People have worked crazy hours, like in so many other industries as well. Our team did crazy hours, and the motivation that we can help people, especially when they need it most, made everybody work twice as hard. Danny:Well yeah, absolutely. And I can only imagine. It sounds like you guys were actually way ahead of the curve compared to a lot of other manufacturers. We keep hearing about supply chain resiliency and obviously, that being a huge theme, especially as we move forward, looking at really managing risk, looking at—just analyzing the supply chain from getting a lot more granular than it was before. And so I think it sounds like, because of some of the technologies you had in play, you were able to respond a lot better. Had you not had that in place, you probably wouldn’t have had those kinds of results. Does that sound about right? Paul:Absolutely. We saw it already in the past. Fires, earthquakes, and so on, always had an impact on—and the supply chain is incredibly complex today. If you look at a cell phone, a cell phone has, today, about 2000 parts. You miss one of those parts, you cannot produce the cell phone. And it’s even a bigger disaster for us financially because then you have the 1999 parts on stock, and the one part is missing. And you’re converting everything into revenue, you have more inventory, and the customer is not happy. So it really forced us to have a very solid system. And as I said, our system today, if there is an event on a single point on the planet, then you see immediately which of our suppliers may be impacted. We can contact them directly or see that directly from the message feed that we get automatically in, see which of our plants are impacted, talk with our customers and take mitigation measures. But it had proven pretty resilient as well in Covid times. Covid did not hit the world at the same time. First, China was shut down; then, Europe started to be shut down. Then parts of the US, then Mexico, and so on. So there was always a little bit of leeway that you can take from the areas that are currently not so impacted that you get some of the components, and that’s where our system really thrived. But at the end, in a global pandemic, for sure we learned a lot as well that new technologies are helping us to improve, automation is very important, that you can scale, also that you reduce the number of people that need to be in a factory. We try to have in the areas where we were highly impacted by Covid, to have as little people as possible in factories and have them work from home. Automation is a big helper for that. Additive manufacture is a very flexible technology. If you’re missing certain components that you can 3-D print them yourself and use them to bridge the supply chain gap. So I think, overall, it helped us a lot to improve our system. It has taught the whole industry a lot as well as governments. We’ve seen a huge regress to have more local manufacturing, especially around medical and other critical products in region. And with our 30 sites worldwide, we are in a very good position to fulfill that demand. Danny:That’s fantastic, really an amazing story. I’ve got some numbers here I just want to run over to help to really convey to our audience what this really meant. One of the things you were talking about in terms of going through the R&D process and reducing the amount of time you’re able to actually go from the R&D to full-on manufacturing to shipping out, I have a note here talking about that. And typically, instead of having a 12 to 24-month cycle going—obviously, you have regulation; you have all this stuff—you’re able to go and produce stuff in a matter of—is this correct? I have six weeks, six weeks. Paul:Absolutely, yeah. Danny:That’s incredible. And you were able to produce more than 50,000 ventilators in just a few months again, knowing all the supply chain issues and the challenges. That is fantastic. You mentioned about additive manufacturing, which is obviously, it’s a great new technology boost we’ve had over the last—it’s relatively new, all things considered, which I think is super exciting, especially for the future, as you mentioned being able to respond. It’s really that time piece. Then, we talk about masks. With the masks, you had never produced those before. And now, I have a note here, you’re generating more than 62 million, or you’ve generated more than 62 million in under a year. That’s a small number. I’m just playing, obviously. 1.5 million masks per week. Pretty amazing. Absolutely amazing. And I think you had a great synopsis, a summation of everything as far as what you’ve learned in going forward. As we wrap up this episode here, going forward, if you could boil it down a little bit, what is your biggest takeaway? What is Flex saying, hey, this is what we’ve learned over the last 12 months? Seems like the last five years, but it really has been 12 months. What’s the biggest takeaway? Paul:My biggest takeaway here is, and I want to thank our customers, when we get to think out of the box, we can make the impossible happen. So that, as you said, 12 to 24 months on a product development cycle, that’s in normal times. And really, we were able only to boil it down to six weeks because everybody was working together under huge pressure, obviously. But also we have a very open mindset and are excited about helping people. So we’ve shown that we can do it. I think there are many more health challenges. There are many more other challenges out there, from feeding people to providing safer transport to providing more safety on workplaces and so on. So together, we can achieve pretty much everything when we work together as a team and we take down barriers. And I think we can all be very proud that we were able to achieve that all together and, again, suppliers, customers, all folks really—kudos to everybody. The other part is, digital revolution in the industry is key for future success. I was talking about the resilient supply chain. The resilient supply chain is a result of real-time digitization of supply chain. The same thing is important on the manufacturing floor, making sure that you gather all of the data that you have and create information that provides you insights that drive real business decisions that make a real difference. So Industry 4.0, digitization is key for us. Automation is key for us because we want to be able to manufacture. Even if our people cannot come to the factory, we want to provide an environment where people can work remotely and still produce high-quality products on the shop floor. Simulation, I didn’t talk about it yet, but has been key as well. So making sure that we have a common model that we can all share our thoughts and agree on how things should look like in the future enables us to be much faster and enables us to be much more efficient. We have trained, by now, people in every factory. We are creating digital twins or have that, actually, in most of our factories already. During the pandemic, we were optimizing continuous blood glucose meter manufacturing and many other projects with simulation, and I think that’s going to be key for the transformation in the future. It not only told us that we can work remotely over Zoom and we can work on digital models together, but it also creates a new dimension for us. Before—we can actually go forward in time and do things on a digital model together and agree on what the optimum should look like before we start putting machines in place and before we put bricks and mortar in place to build buildings and do many more simulations and pilots and learn what best-in-class will look like in the future before we put things in. And then, it’s fixed and it’s more difficult to optimize. Danny:Absolutely. Paul, listen, I really enjoyed our conversation. This has been a fascinating story. I’ve loved hearing and learning about you. I think it’s awesome that you got introduced to Flex 23 years ago, and still there today, and just instantly fell in love with it. And you’re helping to solve some incredible challenges and do it in an amazing way. So there’s definitely something very special going on at Flex. Thank you for sharing your story. Thank you for sharing Flex’s story with us today. I’m sure we’re going to have people that are going to want to learn more about you so they can go check you guys out at flex.com; pretty easy to remember. But Paul, thank you so much for your time and, again, sharing your story with us. Paul:Thank you very much, Danny. My pleasure, and I also want to take the opportunity to thank the full Flex team and all of our partners what is an amazing job during the crisis and looking forward to continuous innovation that we do together. Danny:Awesome. Well, that wraps up today’s Executive Series. Man, that was a great story with Flex and Paul. So many takeaways from that. I think a lot of people look at the whole pandemic with Covid, and I guess there’s two ways of looking at it. There’s glass half empty, glass half full. Obviously, there’s been a lot of—it’s been definitely challenging on multiple levels. And there’s definitely been, when you look at the deaths and things that are happening there, not good stuff. On the flip side, there’s been a lot of things that we’ve been forced to look at and reevaluate. We’ve always been talking about automation and digital transformation in Industry 4.0, all these different technologies and these emerging technologies that are happening. We’ve all been forced, all across every industry, really, to think differently and do differently. And I think that is one of the big silver linings that we’re seeing and sharing stories like we’re hearing with Paul over at Flex and how they responded and big takeaway about what we can do when we work together and we focus and remove barriers is pretty incredible. So anyways, that’s all I’ve got for you today. Thank you so much for watching or listening on today’s episode on IndustrialSage, the Executive Series. I’ll be back next week with another episode here, and I’ll talk to you then. Thanks.
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| EWISE Communications: Joanne Sanders, on Hurdles of International Marketing | 21 mars 2021 | 00:24:01 | |
Joanne Sanders of EWISE Communications shares unexpected hang-ups from expanding into international markets without proper preparation.
Danny:
Alright, so you are in a treat for today’s episode here on IndustrialSage. I’ve got a very special guest. Her name is Joanne Sanders from EWISE Communications, and she’s going to be joining us today, talking about the importance of messaging with, particularly if you’ve got international companies and you’re expanding, looking to go outside the United States, or if you’re a foreign company and you’re coming here. Joanne has a ton of experience and knowledge there. She’s also on the board of directors for the World Trade Center of Atlanta. She also serves as– let me look at this because there’s so many things– serves as international marketing liaison for the Georgia Manufacturing Alliance and this year as well. She is very, very popular. She won the Georgia Latina Excellence Award for business and technology. And not only that, the city of Atlanta actually gave her an award as well. So she’s been incredibly busy. Stick around for this episode of IndustrialSage. You’re not going to want to miss it; it’s going to be awesome. I’m Danny Gonzales, and this is IndustrialSage. So Joanne, thanks so much for joining us on this episode of IndustrialSage. Before we really get going, and we had an intro… you’ve got a lot of great background there. But if you could just introduce our audience to who EWISE is a little bit deeper EWISE Communications and yourself and a little bit more of your background, that’d be awesome. Joanne:Yeah, so really, the way that I explain EWISE is really explaining how EWISE began. Really, I’m a former sales executive that was really, quite honestly, frustrated with marketing. Danny:Wait, frustrated with marketing? That never happens. Joanne:That’s right. So frustrated with marketing, meaning that they were producing a lot of materials that were great, that were beautiful, but they weren’t in alignment to the buying process. They didn’t speak to my buyer. They actually weren’t helping me close the deal. So a lot of times what I would do is I would receive these marketing pieces that weren’t really helping me, so I would basically end up redoing them. And so finally, after a while, I thought, you know what? Why don’t I go ahead and start my own group here, my own agency? And so EWISE came about. That was about nine years ago, and because of that sales background, really EWISE has turned into a target marketing agency. EWISE really focuses on helping companies launch products, launch into new industries, launch into new regions. A lot of companies have their own marketing person, but when it comes to expanding and really making a big leap into a new market and so forth– and really, it’s a business decision much more than even a marketing decision– that’s usually when they bring me in. And because of that, we’ve actually done a lot of work on the international front. We’ve worked with a lot of international manufacturers, in fact, that are trying to come into the US or to the European market. And we’ve also worked with domestic manufacturers that are trying to expand overseas. That’s a little bit about EWISE. Danny:No, I love it. I love the whole–there’s so much friction a lot of times between sales and marketing, and so you hit the nail on the head there. But segueing into our topic and everything that we’re going to be going on as far as the international companies and that specialty, talk to me a little bit about that. What are some of those challenges? Are there challenges around that? Joanne:Definitely. The thing about it is that there’s a lot of different nuances when it comes to doing international marketing. So general marketing is really packaging a company, understanding your brand, getting your messaging, your value proposition, really articulating that, and then turning that into pieces that support that and then campaigns that reinforce it to your target audience. But when you’re dealing with international, you really have to take a look at all of those things because you do all of those things. But you have to look at it from a universal perspective. You have to make sure that a message is universal and that message, yet, can apply to different regions and that you can massage that particular message, that brand, to be applicable and to seem localized, yet it’s still communicating at a broader audience. There is cultural nuances that you have to take into account. And so there’s a whole other dimension of things that you really have to think about when you’re doing international marketing. There’s really no room for assumptions. There’s no room for that. You really have to be careful when you’re doing that. Danny:And that makes a lot of sense. I know there’s a tremendous amount of companies that are foreign that are making their entrance into the US markets. I know here in Atlanta and Alpharetta, there’s a ton of all kinds of European companies and Asian companies that are here. So what are some of those challenges that they might be facing, coming in as a foreign company, an international company, trying to break into a new industry in the US market in particular. What are some of those challenges from that marketing, that messaging standpoint they might be looking at? Joanne:So if you split them up both ways, there’s the foreign companies that have moved into the US market. They’re trying to further anchor into the US market. And a lot of times, those companies… they were successful overseas. And so they’re trying to come into this market, and they’re applying basically the same rules of engagement— Danny:We’re going to rubber-stamp it. Joanne:That’s right, exactly. And they’re applying the same kind of rules of engagement into this market, and you can’t do that. And so they’re having trouble recruiting workforce or recruiting people to come to their company. They’re having trouble sticking the landing when it comes to this particular market. So a lot of times, it’s a lot of cultural, just a lot of understanding the different business models and the different business dynamics when you’re a foreign company. But when you’re a domestic company that’s trying to expand overseas, you almost have to apply that in the other direction. You can’t assume that the business culture and your business practices and whatever has led you to be successful in one particular market will apply to the other. And so you’ve got to make sure that you open your mind. You check everything, and you don’t run on assumptions. That’s one of the biggest things that people do is that they assume a gazillion things, and they assume that– Well, I’ll give you some examples. A lot of companies, of course, they’re working on digital marketing campaigns. And they assume that, here in the US you’re doing Facebook and Twitter and LinkedIn, and you’ve got a model here. And so they assume that, well, I’ll just replicate that model, and I’ll do it in Spanish. Or I’ll do it in another language. Well, the reality is that there are rules in different cultures. So for example, if you try to do a digital marketing campaign in China, in Asia, there’s other social media platforms in that market that are different, that no one has heard about here in the US. When you’re translating different campaigns and different things, you have to make sure that those messages resonate in different languages. Otherwise, you could really step in it. For example, a lot of times they include email marketing as part of those digital campaigns, and if you’re trying to do email marketing in Europe, Europe has ridiculously strict email privacy laws. And if you start doing email marketing, something as innocent as sending an email or an advertisement through that medium and you violate some of those rules, you can get heavily fined, and in some cases, you can even end up in jail. Danny:Really, in jail? Joanne:Right, and so you’ve got to really be careful. You can’t assume that a particular marketing initiative that worked in one country or in one region is going to work for another. Danny:Right. Well, it sounds like there’s a lot of different things. Outside of the culture, it’s also understanding, what are the rules? What are the rules of the playground over here? Joanne:Absolutely. Well, here’s another example. For example, a lot of times people assume that the purchase path of a product is the same in one region versus another. I was raised overseas; I was raised in the Caribbean. And here, if you buy something, if you’re manufacturing tomato sauce or something like that, and you buy it here at the grocery store. You also buy it at the grocery store in Latin America, but there’s also small convenience stores, and then there’s whole communities around those convenience stores, and they’re at every single corner. But actually, if you just focus on the grocery store, you miss out on a huge part of the purchase path of most people that are buying that particular product. And so a lot of times, people don’t think about– they think about, how do I create awareness, and how do I do that? But they don’t think about the supply chain and the purchase path and where the buyer is and how they are buying. And that’s really different in the different countries, based on infrastructure and for a variety of reasons. Danny:That’s really interesting. So note to self, no spamming in Europe. Joanne:That’s right, no spamming in Europe. Danny:It might work here, mainly. But over there, you said you might get in— Joanne:You could get into trouble. You can get into big trouble, yes. Danny:That’s pretty interesting. I wouldn’t be surprised if we’ll see that maybe down the road over here. I know Europe went through a lot of privacy issues and things. And I’m sure that’ll make its way over here to the United States at some point. Joanne:Yeah, well and I was just going to add, so I recently spoke at the Georgia Manufacturing Alliance. They had their annual conference about three weeks ago now. And that was one of the things that caught everybody’s attention. They thought, oh, my gosh, I didn’t realize. It’s like I said. Something as innocent as that could get you into a heap of trouble. So you really need to work with experts that really understand what they’re doing and really can at least set that foundation from an international marketing perspective and help others understand what kind of systems that you need to put in place in order to make sure you’re successful. Danny:That’s some really great information there. Didn’t know that. So it goes back a little bit to, and we talk about it here all the time, is really strategy personas, looking at that persona development, that’s another level. So you could have your personas leveled out here for the US. But then it’s like that is not necessarily going to translate to somebody overseas. Or maybe it does, but how you reach them is going to be completely different. Joanne:Absolutely. If you’re trying to get into the healthcare market in Brazil, it’s going to be very different than trying to penetrate the healthcare market in Asia or in Europe. And it’s all about, there’s different buyers involved, and you have to understand who that persona is and that buyer profile. There’s different buyers. There’s different people that are part of that purchase process and that decision-making path. So it really is. You cannot assume that whatever has worked in one market is going to work in the other. You just can’t assume anything. That’s probably one of the biggest things is that, when you’re dealing with international marketing, you almost need to go back and go back again and go back again and make sure that you cross your T’s and dot your I’s and there’s no assuming anything. Danny:That sounds like a whole lot of fun, dealing with some of these things. Joanne:Yes, it’s a lot of detail-oriented work, yes. Danny:I can only imagine. So bearing this in mind, what are some high-level things to keep in the back of your mind to… expanding into a global market or even those companies that are here? Joanne:So I think two things. I think messaging is really important. And it’s important to make sure that you have a universal message and one that is simple. And a simple message doesn’t mean generic; it doesn’t mean boring. It means that you’re just keeping it simple, that you’re using words that everybody understands in order for you to, at a macro level, be able to communicate with everybody. For example, FedEx, “The world on time.” Simple statement, everybody understands that. And they can then mature that and say, “The world on time” or “Brazil on time.” They can take that and massage it for the specific markets that they’re dealing with. But at the end of the day, it’s something that encompasses everything. The other thing I would say is, when you are communicating, make sure that you’re using the power of communicating through words and communicating through design. Visuals can really help cut through a lot of issues, especially when you’re dealing with international markets. And it’s important to make sure that you’re cognizant of how those two are working together. I was reading an article about Louisiana. And Louisiana, nothing is more mouth-watering in Louisiana than a picture of a crawfish with the word Cajun on it. Danny:I’m hungry now. Joanne:But the reality is that not everybody understands or has seen a crawfish. Not everybody understands the word Cajun. So if Louisiana’s trying to target and market to other people that have never visited, then what they need to do is they need to adjust that picture. You need to be able to communicate. They need to, instead of a close-up, because that could look like a scary animal, you have to draw back, put it on a plate, instead of just saying Cajun which everybody there understands, you have to talk about unique spices that come from this region that will make unique seafood taste mouth-watering good. And when you explain it like that, it’s simple terminology, but it speaks to everybody and actually allows people to grasp at what you’re trying to communicate to them. And it’s just really important that again, you have a simple message that everybody understands and then, you marry communicating through words and design. That’s usually the ticket to being successful. Danny:Interesting. So… makes sense. I imagine, though, that not everybody takes this to heart and actually implements this the way that they probably should or could. Any notable blunders that come to mind of any–a little bit, a few? Joanne:A few, yeah. Yeah, I’ve got a couple. So there was a–this is one that I shared at the summit with the Georgia Manufacturing Alliance. There was a golf ball manufacturer who was doing very well in Japan. And they were selling large packages of golf balls, and they were doing great. So they thought, how do we take things to the next level? Why don’t we create a smaller package that people could pick up at the cashier, at the convenience store, wherever else. And so they created this sleeve with four golf balls in it. Well, the problem is that the number four in Japan, the sound of the number four means death. So nothing in Japan is in fours. They’re in threes and fives, but they’re not in fours. And that’s a cultural element that the marketing department didn’t realize. So think about it. They produced all of these packages. There was packaging that had to be reassessed. They had to do promotional materials around this. They had to do all of this stuff just to then lose money because then, all of their sales started going down. They’re like, well, what happened? Wait a minute; this is a cheaper product. This was going so well. This is actually a cheaper product. Why are we losing money on it? Well, because they forgot that cultural detail. And see how one little simple thing made a huge difference. There’s also another one that comes to mind. There’s a very popular beer company, and I probably shouldn’t say the name. A very popular beer company, they had a popular promotion here in the US called “Let it loose with” this company, just let it loose. And so really popular campaign here. They said, you know what? Perfect. We’re going to roll this out into Latin America. And so they did almost a verbatim translation. And so you can imagine, a verbatim translation actually meant, “you’ve got the runs” instead of kicking back and relaxing. And so it was incredibly embarrassing, and they were horrified. They had spent millions of dollars on advertisement just to then have to pull it all back. People were laughing at the brand. And so they ended up having to pull back. Those are some examples. And I use blunders; I think blunders are good examples of how we can learn and how we can pay attention. You need to make sure that your message translates well, not just your brand message, but your marketing campaign messages. Make sure that it translates well. You’ve got to validate it. If you take the extra step of validating, you’re going to save–think about it. You save millions of dollars. These companies could’ve saved a whole lot of money. Talking to experts that are, again, looking at specific things to make sure that you’re not missing anything is just highly important. I do as much communication as possible around this in order to build awareness because a lot of companies here that are, again, trying to anchor further in need to be cognizant of those kind of things, too. So there’s a German company here that’s trying to–why aren’t people just buying my things? Focusing on the things that resonated with the buyer in Germany, you’ve got to make sure that it actually translates well into the US market, and the same the other way around. Danny:That makes a lot of sense, and it’s really interesting. To put it into perspective for their American viewer, talking about– I really like the Louisiana example. We know in the United States, Texas barbecue is really good, and so trying to market that. Maybe New England– New England clam chowder down in— Joanne:That’s right; exactly. Danny:But to your point, you’ve got audiences who don’t know that or have those nuances. That’s very, very, very difficult. And I can even see that happening here domestically as well, all the different regions and the areas. And so that’s definitely, it’s very important to be able to look at and assess that. Joanne:Yeah, well and I think particularly now that customer experience is really important and all those kind of things, it’s really about the buyer, really about the buyer processing information, experiencing everything. And you really just need to be very cognizant. The buyer has always been important, but now almost more than ever. And so you really need to pay attention to what you’re doing. And honestly, the world is becoming global, so this is good practice for any marketer to really start implementing international marketing. And if they’re not familiar, then bring in an expert, set that foundation, and then get going and let your marketing department go because the world is becoming smaller and smaller. Danny:Right. And I think you addressed as far as how to avoid some of those blunders. You mentioned really surrounding yourself with experts and people that really– Are there some key takeaways on that? Saying, look, if we want to go into the South American market or companies that are foreign and are coming into the United States, are there four key steps or something that they might be able to take? What would you recommend to those companies before they go whole-hog into something? Joanne:Well, so it’s funny because within the Georgia Manufacturing Alliance, I’ve now created an international manufacturing group, and it’s precisely for that reason because most people don’t know what to do. I’m a domestic manufacturer. I want to go overseas. Danny:Let’s expand. Joanne:Let’s expand, but where do I go? Do I go to Latin America? Do I go to Europe? Do I go here? Do I go there? Same thing for people trying to come into the US. The reality is that it always depends on your circumstance. But sometimes, if you’re trying to come into the US, foreign companies a lot of times, they don’t know about incentives that are available to them. They don’t know about those kinds of programs that are available through the economic development branches that are here within the state. And so part of the group’s purpose is to point people in the right direction depending on what they’re trying to do. If they’re domestic companies, they think, well, I can’t afford to start exporting. There’s grants for people that want to actually export. And so people don’t even realize that those kind of resources are available to them. When they’re expanding overseas, or they have an overseas workforce there’s things like taxes that change. And they’re like, okay, well what do I do now? And their local CPA might not really know about international tax. But then, there’s groups here that focus on that. So part of the purpose of the group is to try to work with the foreign companies as well as the domestic companies and point everybody in the right direction. It always depends. I can’t list four things to think about, but I think the most important thing is just look out for resources. Surround yourself with people that are available. The good thing about Atlanta is that Atlanta does so much international marketing. There’s over 70 trade centers here and trade, as far as the Swedish-American Chamber of Commerce and those kinds of trade groups here. And the reason they’ve invested here is because Atlanta does so much business with those foreign companies. Those organizations are great resources as well. Of course, each one of them is going to be a little bit partial. Come to Sweden; come to Brazil, and everything else. But they can answer a lot of questions as far as, if I was to go to Brazil because I just visited and I really liked it, how would I go about doing that and so forth? So there’s resources like that. There’s the State of Georgia. They’ve got a pretty robust international program there. And then there’s over 200 international organizations including the World Trade Center, which I’m a board member of that is there to basically do a lot of that match-making and to bring together a lot of expertise together and allow people to network. And so there’s a lot of resources available, and obviously within the group, with the Georgia Manufacturing Alliance, that’s part of my purpose is to try to point people in the right direction. Danny:So making the right connections there. Joanne:Pretty much. Danny:Surrounding yourself with experts and really jumping in, taking advantage of the resources that are available. Joanne:That’s exactly right. And a lot of times, it doesn’t cost you anything to do that exploration. And so it’s just about making the decision. Okay, we want to explore this in 2018, 2019, whatever it is, so let me start surrounding myself with the right people that can point me in the right direction, and getting knowledgeable because you want to be, you want to know what you’re buying before you buy. You want to know what you’re in before you embark on that, and that’s the smart thing to do. Danny:Well, this has been fantastic. It’s been a lot of great information. Joanne:Thanks. Danny:There’s a lot of nuggets of wisdom and great sound bites that I think is great. It’s really a good eye-opening conversation here. I think one of the big takeaways for me anyways, that I thought was interesting was about how some of the digital marketing tactics that are working here in the States, you can’t rubber-stamp that and say, oh, hey, that’s going to work in Europe. I don’t want to land in jail. or other–hey, you need to be aware of other social networks in other countries that we had no idea about. So really, at the end of the day, it goes back to that strategy and that persona, really getting an understanding of what’s working in that market. This has been fantastic. Joanne:Thanks. Thanks for having me. Danny:If anybody has any questions, they’d like to ask any questions after this, we’ll put all your information you’ve shown us. But what is the best way of reaching you? Joanne:You know, you can find my contact information on ewisecommunications.com. Or you can call me directly at 404-644-2779. Danny:Perfect. Thanks so much for joining us. Joanne:Thank you for having me. Danny:Well, thanks again for watching or listening if you’re on iTunes to this episode that we had here with IndustrialSage with Joanne Sanders with EWISE Communications. Really great; a lot of great information here all the way from companies that… if you are expanding into the United States or companies that are in the US, and they’re looking to go and expand their global reach. Some really strong considerations from a communications and a messaging standpoint that, hey look, the stuff that we’re doing here, whether you’re US-based or you’re foreign-based, may not work in the country that you’re looking to expand. So really, really surround yourself with experts who really understand how to take your product and your service and your messaging and really apply that to where you’re trying to expand and go. And really jump into the resources. A lot of great resources around here, if you happen to be from Georgia. There’s the Georgia Manufacturing Alliance. Joanne started the international sector of that group there. Make sure that information is in the show notes there. But there’s a lot of resources out there to help you be more successful. So again, key takeaway, really invest. Research; look at where you’re going to go. See what’s going to apply and what isn’t. And thanks again for watching. Like always, if you have any questions, please reach out to us, IndustrialSage.com/questions. And be sure to like, subscribe, share, review, all that good stuff. We’d love to hear back from you. And we will talk to you next week. Thanks.
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| Sercante: Andrea Tarrell, on Marketing Automation Gone Overboard | 07 mars 2021 | 00:24:22 | |
Andrea Tarrell, CEO & Founder of Sercante, joined us to discuss a common problem with businesses trying to break into digital marketing– namely, that they pay a lot of money and actually go a little overboard on the marketing automation.
Danny:
Alright, thanks for tuning in this episode of IndustrialSage it’s going to be a really great one. We’re going to be talking about marketing automation. So if you’re a company that is thinking about making that transition, you don’t have anything there, and you’re saying, I think we want to get into Pardot or Marketo or whatever that is. You really want to watch this episode. Alternatively, if you are a company that’s already done this and you have Pardot and Salesforce and you have a huge marketing tech stack that’s like this and you’re realizing, Oh my gosh I think we went in a little too fast, a little too quick and we feel like we are completely over our heads. This is a really great episode for you. So for today I have a very special guest. I have Andrea Tarrell from Sercante, who specializes in this and she’s going to be sharing with us her best practices and tips and tricks and strategies on how to make sure you have a really successful rollout with it. If you’re evaluating it or maybe if you’ve already done that and you’re trying to figure that out. So, stay tuned it’s going to be awesome. Again, we’re in the beautiful Optimum Productions studios and I’m Danny Gonzales, your host, and this is IndustrialSage. It’s going to be awesome. You’re going to love it. So I’ve got Andrea here and Andrea has got a lot of awesome experience but before we really jump into this, just let our audience know a little bit about you. What’ve you got going on? Andrea:Yeah, thanks for having me. I’m really excited to be here. Danny:Of course, yeah. Andrea:So I’m the Principal at Sercante. We’re a consulting firm that specializes in marketing automation in Salesforce. So helping teams optimize their technology and their processes, basically at every step of their lead to revenue flow. Danny:Awesome, that sounds great. It sounds like it’s a kind of a very needed thing. So since you are an expert in this area, let’s talk those companies that have used that, I think sometimes there is a little bit of a I’m guessing here. Maybe there might be I don’t know I might know a few companies or so that said, Hey we need to do this. We need to go from no CRM. We’re sending emails through, I don’t know, maybe something maybe through Gmail, and we’ve got a CSV data list. But you know what, gosh, we need to go ahead and make that transition. Let’s go Salesforce. Let’s go marketing automation. Let’s you know, and then– and then, oh this is so cool. You can do all these different things. And the tech stack is like this. And then next thing you know, you’re like, Oh my gosh I think we went a little overboard and this is a lot more difficult than I thought it was going to be. But I don’t know. Does that ever happen? Is that like a thing? Andrea:A hundred percent. Yep, I see that all the time. Companies have made a huge investment in software. So platforms like Pardot, HubSpot, Marketo, Eloqua. And they’re investing time, energy, manpower in building programs on these amazing platforms, but they’re kind of looking around and saying, okay are we really getting what we were promised? And is this giving us the value that we need? Danny:Right, yeah. Andrea:So kind of connecting the dots between what’s happening on the marketing side and what’s actually translating into close one revenue, that’s a gap that a lot of marketers are seeing. Danny:So it’s interesting too. I always find that interesting because you know that’s really the unique value, one of the unique value propositions that they have is that look you actually have the tools now that you can tie all a lot of those marketing activities from a marketing automation platform, and because it’s connected to a CRM, that you could actually look at that and you can run it, and say, Hey, look we’re doing this activity and we’re generating X over here. Obviously it’s not as simple as it sounds. I mean what are some of those pitfalls that you’ve seen and you know maybe what are some things that some companies can do to try to avoid that? Andrea:Yeah. Yeah, I would say that in theory it’s simple, but it isn’t easy. Danny:It always is, right? Andrea:Yeah, so I mean you know the workflow that you want to happen. You want somebody to visit the website. You want them to convert to a lead. You want to nurture that lead and then hand it off to sales when you’re ready. But, all of the different technology pieces and all of the different process steps along the way there’s a lot of details to work through. Danny:Sure. But, I mean that whole area it can be a little maybe sort of subjective too. And I think that’s where some of that, you know, in theory like you said, you can kind of jump from the point of, “Here, we want to do this.” We get a lead. Here, we get– and we’re going to nurture. Lead score. All that good stuff, but then I think there is maybe a little bit of a challenge of like, Oh, we can measure this and then we can do this. And then there’s all these really cool tools that we could, you know? Andrea:Yeah, and I think a lot of marketers, they look at the number of leads that are coming in and they’re excited. Danny:Leads are great. Andrea:Yeah, leads are wonderful. But then if you ask their sales team what they think of them, they’re decidedly unimpressed. A lot of companies when they’re first getting started with marketing automation will go to sales and say, okay what leads would you like to see? Almost every sales rep that I’ve asked that has said, well give me all of them. And I’ll decide what I want to follow up with. But that’s a losing battle. So I would definitely caution companies against doing that. So being really thoughtful about when a prospect really is ready to buy, and when sales needs to get involved. It seems like marketers are owning more of that pre-sales process than they ever have before. And the lines between like what’s marketing and what sales is kind of becoming blurred. Danny:Very blurred, right. And, you know, rightfully so. And every day, I mean it’s getting more and more, I think those lines are getting more blurred because that gray area is there. So I think you mentioned it: sort of a key point there. You’re saying that I think it’s interesting when you go and you talk to the sales rep and say, Hey which leads do you want? Well just send them all to me. I think that kind of speaks maybe back to a little bit of strategy, persona development, all that. And you’re saying that, Hey, when marketers say, look we’ve got all of these leads, this is great. But I think the big key question here is, are they the right leads? Are these people that are returning? ‘Cause yeah you can fill leads all day long. You turn a PPC campaign, and sure people are clicking on your website, people just, you know, doing form fills and all this. But, is it like, are these key client– are these the personas that we’re looking to develop and sell to? Andrea:Yeah, that’s a great point. And I think that’s a judgment call that sales is trying to make every day. They have an unlimited number of people they could follow up with. So they’re tasked with where am I going to spend my time? And if your leads don’t fit their high value profile, they’re just not going to pick up the phone and call them. Danny:Yeah, right. No exactly. Andrea:So I think kind of the next frontier is like how do we get tools into our sales reps hands so that they get the right prospect at the right time with the right content. Danny:Gotcha. Yeah, I knew that. So maybe, you know, let’s speak to that company that is maybe thinking about investing. Saying, okay, you know what we want to go ahead and jump in this marketing automation. And maybe they don’t even have a CRM, maybe they do. But they’re saying, Hey, we want to do some of this. What are a couple of steps or a couple of key things that they could do on the front end before they go and make that investment to be able to really maximize that and making sure that they’re set up for success. Andrea:Yeah. I think the first key is that it’s not a marketing decision or an IT decision. It has to be the sales, whoever’s your VP of sales, sales director, whatever that title is. They have to be a hundred percent bought into the concept of online lead generation and lead nurturing and see the same vision that you do or it will fall flat every time. Danny:Okay. Interesting. That makes sense. You brought in another key point that I kind of forgot about, but IT. But it’s interesting. So making sure that it’s set up. Okay what other things are there that, you know, that would help them to make sure that they can roll out that successfully? Andrea:I think there also needs to be a constant dialogue. So having that conversation about, what are the right leads to pass along? And not taking that first answer of, “Well send me all of them,” as the bottom line. But, kind of negotiating a shared vision of success. Like, what do we expect to happen with these marketing efforts? How do we measure it? And then having that conversation over and over and over so that everyone’s on the same page about how we’re tracking, what’s really happening, and you can address the strategy as needed. Danny:Yeah, and I think that that makes– a key thing that I could pick out is making sure to have that conversation over and over again. Sometimes that conversation will change a little bit and I think that it’s important because if you’re doing it right, you’re kind of measuring it. You’re looking at things you’re saying, Hey, we’re we’re measuring this and we’re seeing this over here. You know what? We just discovered something that we didn’t think about. Maybe we need to make an adjustment and that’s okay. But if you’re not analyzing that and looking at that and then having those conversations, then you can miss that. Andrea:Yeah, that’s a great point. Danny:The other great point is just communicating that. And making sure it’s like, Hey, let’s have the come to Jesus whatever with everybody like look, this is the goal. This is where we’re going. Let’s not forget like this is what we want to do. Because I mean it’s so easy to be like, Oh wow, all these amazing things. Let’s go this way or that way, you know, and just being grounded. Andrea:And part of that grounding exercise as a team is sitting down and mapping out, okay what does lead nurturing look like for my company? So if we had the perfect sales process that we could make fully automated, what would that be? If you don’t have an answer to that question it’s really hard to automate a process that doesn’t exist. Danny:Yeah, and I think again I mean it’s kind of like putting the cart before the horse or the, yeah, that’s right. Did I say that right? Andrea:Yeah, cart before the horse. Danny:I get those so confused. Right. But you know that saying right? Andrea:Same deal. Danny:So if I’m hearing it correctly, having that process mapped out ahead of time before even saying, Hey, let’s figure out which platform is going to work well for us. Let’s look at the sales process, but also the nurturing process. And like, what does that look like? And what are the steps? ‘Cause maybe I guess you maybe work a little backwards from there and say, okay, now let’s find a tool, the right tools that fit that need versus the other way saying, well, this is what we have. How can we make this work with what we’ve got? Andrea:Yeah. So taking the process that you want to replicate and using technology to support that. Not using technology to try to sub in for a process that doesn’t exist. Danny:That makes a lot of sense. So bringing in the right people, the decision ahead of time, making sure that you have a clear understanding of the objectives where you want to go, and then really mapping out that process ahead of time. So don’t buy the stuff, you know, don’t buy the tools and get all that. It’s really, Hey, let’s figure this out, and then that should influence that purchase. Andrea:Yeah. And if it’s sort of like a half baked idea in your head, like, okay, we know we want to call webinar leads and send them three email touch points. Before you roll out a huge automation program for that, try it with a handful of leads and see what happens. Like make sure that it’s the right process to automate before you go through all that legwork. Danny:Before you go whole hog on that. Okay, yeah that makes sense. What else? Are there any other tips for those companies that are saying that they’re thinking about making that investment, but they haven’t done it yet? We’ll get to those who have, and see there, but… Andrea:Yeah. Yeah, I guess for companies that are considering making an investment in marketing automation another piece to consider is, do we have the content to support this? Like what are we going to be sending people? Do we have white papers, blogs, videos, things that we can get in front of people in an automated way because the process, the content, and the technology are kind of the three things that come together to make a successful program. Danny:Process, content and technology. Okay I like those. Those are great three key points. Yeah, good point about the content. Sorry. Andrea:If I had to throw a one fourth one in there, just mixing it up. Data. So do you have clean prospect data? We also can’t email people who we don’t have email addresses for. Danny:We can’t? Oh okay. Alright, can we spam people? Andrea:Hopefully not, hopefully not. But going through your Salesforce data or whatever CRM you’re using or Excel spreadsheets if you’re still in that place. But doing an audit of that, using a tool like Brave Verify, Never Bounce to scrub any bad emails off of the list. To start with clean, fresh data when you get going. Danny:That’s a great point there. Yeah, clean, clean data. ‘Cause you can get in some trouble when you don’t do that. Andrea:Pretty quickly. Danny:Yeah very quickly. So we might’ve had a few experiences with that in the past. That was great. So we’ve got, gosh, I’m trying to remember to recap this. Making sure you’ve got the content, which I think is an overlooked thing a little bit too. It’s like, oh good let’s go ahead and buy this thing, but then you’re kind of missing like, okay what are we actually going to send in it? There’s a lot. It takes a lot to develop the right content. Obviously it’s a question of budget. It’s a question of resources. A big question is, is this content actually relevant and really helpful? I think also making sure that, is it actually working? Making sure that the content you’re going to put in there is measurable to, you know, as much as you can make it. Which I mean obviously not just getting it into a system like this is necessarily going to make it automatically measurable. There’s so many little tips and tools and tricks and you know, all kinds of things that you have to do to be able to do that. Andrea:Yeah, and another thing to think through is like what is the content that your sales reps are actually asking for? Sometimes as marketers we can get carried away with all the content we could create. So the blogs and explainer videos and things that are more like ready for the top of the funnel. Whereas sales might be looking for something that’s a little more geared at, okay what do I need to get in front of this prospect that I want to close? Danny:Right, yeah. So something a little bit more it doesn’t have to be as flashy, but maybe something a little bit more, you know, more informational. Andrea:More action-oriented. Yeah. Danny:Great point. So I mean, honestly, really at the end of the day we say this a lot here on IndustrialSage, a lot of it just goes back to strategy. Instead of just saying, look, let’s put together a plan. Let’s figure all this out. What is this going to look like? Let’s pretend that we don’t have this. And let’s kind of, like you said, build out that process. Let’s talk to the right people that need to be involved in this, certainly IT, sales and let’s figure out like, Hey, who do we need to really attract, like what kind of leads? What do they look like? Persona, you know, verticals, all that good stuff, because all that’s going to flow backwards. We can kind of work backwards from there. Right? Content and the data making sure that you’ve got– a, that you do have data that you can use or you have access to it. And it’s clean, all that good stuff. Okay. Andrea:One hundred percent agree. Danny:So, alright. Let’s jump to the– what about those companies that might’ve already done this? And they’re like, yeah you know we went from literally– I know a few companies who may or may not have done this, but so yeah we’ve got a website it’s like from the 80s and we don’t have a CRM. We’ve got a bunch of Excel spreadsheets we’ve got a CSV and that’s where everyone’s at, but yeah, gosh darn it we need a CRM and we need marketing automation, so we’re getting Salesforce and we’re getting Pardot and we’re going now. Boom, let’s go. And then we need all these other tools and all these other things. And then, you know, they’re like, Oh man there’s a lot here. This isn’t working as much as I thought. What do you recommend there? In that situation. Andrea:Definitely recommend the crawl, walk, run approach. So after you implement a big platform like Salesforce or a marketing automation tool, set quarterly goals of what you can– like bites you could actually chew. Because otherwise a year later you look at your contract and you say, okay like what have we really done with this thing? We’ve paid twelve plus thousand dollars and have we really seen the value? Danny:Right, yeah. Yeah. So otherwise you might be doing the opposite when you’re running and then you’re walking and then you’re crawling, ’cause you’re just like, crushed. Like, “Oh my gosh, this thing’s so busy.” Andrea:Yeah and a trap that I see a lot of companies falling into is using their marketing automation platform like a glorified email marketing tool. So just using it to send like ongoing list emails which it’s great at, but there’s so much more that it could do. Danny:That’s what MailChimp’s for. Andrea:Yeah. Danny:I love MailChimp, they’re great. Actually, they’ve got quite a bit of automation tools and stuff in there but anyways, you know, Constant Contact maybe. I don’t know. Andrea:Yeah, you don’t need to pay a marketing automation price tag for like, MailChimp level functionality. Danny:Exactly. Not downing MailChimp. We like MailChimp. Andrea:Yeah we love MailChimp. Danny:It’s just different tools, right? Andrea:Yeah. Danny:So, okay. Andrea:Yeah, so at least on a quarterly basis, I would say reviewing the functionality that you’re not using and kind of just doing a high level state of the account audit can be useful. Especially with new features coming out and integrations improving new connectors being released. It’s important to stay on top of that stuff. Danny:No, that totally makes sense. What about that company that– so, I mean those are really great tips here, but what about the ones that are just realizing like Oh man, we are way over our head like in this. Maybe they’re eight months into it, or like you said the renewals coming up or something and you’re just like, ah, geez. You know what steps do you think at that point to say, Hey, look, we’ve got to figure this out ’cause we were just, I don’t know. Andrea:Yeah. Yeah, I mean definitely considering a partner and being realistic about what your internal capacity is, is important I think. Danny:That’s a good point. Yeah, yeah. Andrea:Another thing to consider is like how can you move the ball? I’m going to use two metaphors in the same sentence, but how do you move the ball without trying to boil the ocean? Like how can you make progress without feeling like you have to tackle everything in the world that could possibly be automated? One way that I’ve seen people successfully do this is by running like pilot programs. So picking like three to five sales reps who… not necessarily your top dollar sales reps, but the ones that are the hungriest. The ones that actually care to follow up on leads that marketing has generated. So work with them to build a little pilot program. Design a follow-up process that they can test and give you feedback on, and use that to kind of springboard what you do next. Danny:No, this is such a great tip. I mean that’s– you know, and I think that’s the beauty of the product, ’cause that’s really what it’s built for. Is to be able to help. And once it’s actually functioning and working well it’s amazing. You know, the sales teams they’re all excited because they’re actually providing really qualified leads and really helping them on their job. You know, it’s essentially you can kind of like take your Salesforce a little bit more and flip it all to a little bit more, you know of an inside sales type approach. And it’s exciting once that is there. So, yeah. Andrea:Yeah, the way you put it: helping sales do their job, that’s what it’s all about. I also think it’s worth sitting down with your reps and just watching them do their thing for a while. Like see how they use the system, sit in on their pipeline meetings, ride along with them to a sales call and just see what their day-to-day workflow looks like. I can guarantee you we’ll see like five to ten opportunities for automation right out of the gate. Danny:That’s a really great point. Actually, oh wait– there was a couple of episodes we had, they were talking about basically the same thing. Saying, look you know, they spent, I think maybe it was once a week or once a month, but they would do that spend time with the sales team just to get an understanding. Just to, you know, get in their shoes and just you know be that fly on the wall and say, Oh, you know, how can I help make your job a little easier? Let me think you’re doing this thing over and over and over and over. Maybe there’s a template or something we can quickly make that you could use when you respond back to people or maybe there’s, you know, some sort of trigger that we could use that. Andrea:Yeah. Danny:All kinds of great things like that. Andrea:Yeah, and what parts of the system do they get excited about? Like, are the lead revisit alerts? Is that making their day? Or what functionality can you roll out to help them get excited about what you’re trying to do? Danny:That’s a really great tip. I’m going to ask you this other question. Do you sense sometimes that there is– I mean data is awesome and you’ve got all the analytics and all kinds of stuff. At what point do you feel or do you feel that there is too much data or too much analytics, too much information? I mean, does that, can that be a challenge? Andrea:Absolutely. Yeah. I mean as marketers there’s all kinds of data points we can look at. I mean like number of website visits, number of visitors, time on site, bounce rate, conversion rate, all of those numbers don’t mean a whole lot to people outside of the marketing department. We need that data to improve what we’re doing on the marketing side. But when it comes to like reporting that out and sharing that information, information overload is a good way to have everybody tune you out. Danny:That’s true. That’s a really good point. And to the point to kind of circle back to that conversation we had before making sure to communicate the results and the things that are going on there. Do you have it like a list, like maybe a top whatever, as far as metrics like here are the ones that you should really be caring about and looking at, and these are the ones that we should be focusing on. Andrea:Yeah. I think the ultimate goal is to get to the point where you can say marketing contributed this much to pipeline. This is a dollar sign of number of opportunities we sourced. And a dollar sign of number of opportunities we influenced. That’s the perfect place to get to. Danny:Absolutely, yeah. Andrea:If you can’t quite get there, if your data’s not in a place where you have that information, reporting on lead metrics is kind of the like the next best thing, but would definitely definitely encourage you to look at your process so that you can track lead to revenue the whole way through and report on those numbers. Danny:Actually I’ve got another question. As far as reporting are there any other tools that you might recommend? I mean just outside of, you know, tools that are built in specifically within like your part out of your Marketo are there other tools that are more helpful with that or you know? Andrea:Yeah. When it comes to bottom of the funnel reporting, Salesforce is really the powerhouse there. That’s where everything comes together and we connect all those marketing dots to the ultimate dollars. In terms of other reporting platforms, to be honest I do a lot of reporting in Excel. Danny:Hey, it’s a great tool. Andrea:And some of the native reporting in marketing automation platforms isn’t anything to write home about. Danny:Sure, yeah. Andrea:But yeah once you come up with a great dashboard template, it’s something you can reuse over and over. Danny:So just downloading CSVs and different, you know, different lists and different things and kind of meshing all that data together. Okay, perfect. No, that’s great. So, alright. Well Andrea thanks so much for that. That was a lot of great information out there. And so if there’s anybody that has any questions how could they reach you? What’s the best way? Andrea:You can find me online. Twitter, it’s at Andrea Tarrell. I also have a blog called TheSpotforPardot.com. Danny:Perfect, alright. Andrea:Post content there about weekly. Danny:Okay. Excellent. Alright, well, thanks again. And yeah, Hey, listen, as always, thanks for joining us on IndustrialSage. A lot of great information here. Look if you’re one of those companies that have gone ahead and made that big investment into you know Salesforce or a Pardot, Marketo or whatever, and you’re realizing, oh my gosh this is completely over our heads. Look, take a step back. Really kind of break things down, you know, focus in on some of these pilot programs and really get traction there. You know, it’s okay it happens. For those other companies that are thinking, hey, we need to make this transition, we haven’t done it yet, make sure that you plan ahead of time. Make sure you talk to the right people ahead of time. Make sure you have a really good understanding of the leads that you need to be generating. Really looking at those personas, looking at those verticals that you want to get in front of. Looking at what success is going to look like. Making sure that you have content ready to go. Make sure you’ve got data. I know it sounds like a lot. It is a lot, but it’s going to be amazing once you have that set up. And so it’s going to be successful, you can make it make it successful. I am butchering my words, but it’s okay. We’re going to keep going. So as always, thanks so much for watching this episode. If you have any questions, please feel free to reach out. We’re answering your questions every week. IndustrialSage.com/questions. And on social media please share this, like this. You know do all the things post content, ask us questions. If you’re listening on iTunes, we’d love a review. That’d be awesome. And as always again, thanks so much for watching. I’m Danny Gonzales and this is IndustrialSage.
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| Xometry: Aaron Lichtig, on Custom Manufacturing On Demand | 21 févr. 2021 | 00:27:12 | |
Aaron Lichtig of Xometry shares how custom manufacturing is more prevalent than people might realize– and how they’re changing that game.
Danny:
So you can think about us as a two-sided network or marketplace like an Uber or an Airbnb where we’re matching a lot of this highly-skilled capacity that’s out there with the demand that is out there in the marketplace. Aaron:Welcome to IndustrialSage, a free video podcast series all about digital marketing for industrial manufacturers. Hear interviews with your peers, and find out how they’re solving the same challenges that you might be facing in your own field. Coming to you from the Optimum Productions studio in Atlanta, Georgia, this is IndustrialSage. Danny:Alright, so let’s go ahead and jump in today’s episode. I’ve got Aaron Lichtig here from Xometry. Aaron, thanks so much for joining us on IndustrialSage today. Aaron:Thanks for having me, Danny. It’s great to meet you, and we’re big fans of IndustrialSage. Danny:Awesome, we love to hear that. So for those who aren’t familiar with Xometry, can you tell us a little bit about who you guys are and what you’re doing? You’ve got a really cool story. Aaron:Yeah, for sure. So Xometry, we are a custom manufacturer. We manufacture custom parts on demand for a variety of customers, mostly within the United States, within North America. Now, when a lot of people think of the manufacturing industry, they think of large factories like a Foxconn or someone producing hundreds of millions of parts or finished products for sale to consumers. But actually a big chunk of the manufacturing industry in the United States is in custom manufacturing, and these are prototypes; these are smaller and medium-sized jobs that are done not necessarily in enormous factories or enormous plant facilities, but in smaller shops. There are actually 190,000 small shops around the US who do great work but have less than 20 employees. And so our business was founded back in 2013, and it was launched into the marketplace in 2014. And there are really two parts to what we do. One is our instant quoting engine, so customers, anyone who has a 3D CAD file of any part he or she wants to make, you can upload that into our instant quoting engine which is a machine learning-driven technology that scans that part, looks at the dimensions as well as other things like materials and finishes that the customer specifies. And then, it instantly comes back with a price for that part based on the quantity that’s desired. And we do this across a range of custom manufacturing processes, 3D printing and additive manufacturing which is how we got our start when Xometry first began. We were focused on that industry. But now we do CNC machining, sheet metal fabrication, urethane casting, injection molding, basically the whole slate of custom manufacturing processes. So the customer comes in, gets that quote from our instant quoting engine. And then, we make that part for them and get that to their door. And a big part of how we do that is through our network of manufacturing partners. So we have over 2500 manufacturing partners that are qualified to manufacture on behalf of Xometry. And when the jobs come in, we post those jobs on a job board that our partners are able to see based on their capabilities along with a price, what we’ll pay them to do that job. And then, they take the jobs; they make it. We guarantee the quality; we inspect it, and then it goes out to the customer who has initially quoted it. So you can think about us as a two-sided network or marketplace like an Uber or an Airbnb where we’re matching a lot of this highly-skilled capacity that’s out there with the demand that is out there in the marketplace. So let’s say you’re a really skilled CNC shop that’s based in Ohio, but you’ve only got 15 people. You don’t have the big marketing and sales force. It’s going to be hard for you to get jobs with some of our bigger customers like BMW and GE, both of whom are also investors in our business, as well as NASA, US Army, customers of that scale. But we can bring those jobs to you and help the partners make more revenue. And we actually now have multiple partners who are making over $1 million a year just on Xometry jobs. Danny:That’s awesome. Aaron:Yeah, we take great pride in our ability to help customers make what they need to get made as well as to deliver revenue and jobs and more opportunities to the facilities that are a part of our network. Danny:That’s awesome. I love the analogy, the Airbnb of custom manufacturing. And I think, one of the things that I love about it is you’re saying, for me anyways, you hit the nail on the head with, I know a lot of custom manufacturers that are like you mentioned, the 190,000 and the less than 20 employees. That whole sales and marketing effort can be really challenging in terms of getting their name out there. And so I think that’s awesome how you guys are stepping into that void to be able to help provide value and visibility to be able to offer that service offering. And I love the fact that on the front end, from a customer standpoint, that you’re making it really easy. So if I’ve got a part that I need that we can just go online and, on demand, put the CAD files up there, and boom, turn that around, I think that is really awesome. I would imagine that the time that you’re able to minimize that time from the traditional experience of saying, hey, calling up a custom manufacturer, let me send you over these CAD files; get back to me in a couple days or whatever on what this might look like. What’s that time that you’re seeing, that reduction in terms of the turnaround time? Aaron:It’s a big reduction. Literally for hundreds of years, custom parts manufacturing required you to deliver some kind of design or file to a specific shop or spend a lot of time on the phone going back and forth, time spent quoting each job manually. But with the rise of digital and our platform–and there are some other platforms that instantly quote or give fast quotes out there as well. But what we’re able to do is, we can shorten that quoting time. There’s no back and forth; there’s no sending Excel files and CAD files around. You just upload your file to our secure site. That price comes back to you literally within seconds, and that’s a price that we’re going to stand behind. Danny:Okay. Aaron:Yeah, so you get that price. You know what it is. If you want to get it, we have, in some cases with some of our 3D printing processes, we can get you parts in as fast as one day, usually within a couple days. And so when you take out that time that you’re saving on the quoting as well as the fast production time that we have, you’re getting those parts in hand very quickly. As innovation and iteration cycles have gotten a lot faster in general over the past few years, our goal is to enable companies to do that as fast, as cost-effectively as possible with very high-quality work. And the companies that are able to do that are going to be the ones that win in the market because their products can get out there faster. Danny:Yeah, and really jumping on the whole digital transformation train, if you will, but a sense that you guys didn’t have that transformation; you were essentially born in that, born of that. And I think it’s such a great value that you’re providing, and to promote from a supply chain perspective, how fast we can help all of these other manufacturers to be able to get to market faster and help to solve the challenges they have for their clients and really shorten everything across the board. I think that’s absolutely fantastic as well as also opening up the opportunities whereas I would imagine that sometimes it can be a little difficult or a little challenging, instead of talking to one custom manufacturer, and they’re not a fit; let’s talk to these guys. Okay, they might not be a fit; let’s talk–hey, we’re able to send that out to a whole list of qualified companies and do that much faster. And so the name of the game, obviously, is speed. Iterate faster, better, cheaper, right? Aaron:Definitely, yeah. We want to do it faster, and we also want to give you, with our machine learning-driven model, the instant quoting engine as we call it, it gives you a price that should be very fair and very efficient out of the gate. And within custom manufacturing, there’s a wide variability in terms of the kind of quotes that you get for a particular job. But what we do, our model trains on existing files that we have. And the more files it sees, the better it gets and the closer it gets to what we think the real market price is. So when you come to Xometry, you know you’re getting a really good price. It’s not a swag that somebody is making up. It’s something that’s actually driven by technology. So there’s more efficiency on the pricing front as well. It could save you some time there. But yeah, our goal has always been to help folks manufacture great parts as quickly as possible and have them there on demand. Danny:I love that. I love that model; I love the technology and how it’s all digital from day one, from the input and making it a lot easier. So bearing that in mind, we were talking a little bit about digital marketing. How are you guys–because I imagine, you essentially have, if you think about it, you really have two people that you’re reaching out to. You’re reaching out to A, custom manufacturers to help to build that network, so that’s one outreach in sales aspect. And then, another one is, obviously, the other manufacturers who need custom manufacturers. So what does that look like for you guys? Aaron:Yeah, so we do think about those two audiences differently. On one side, our target is design engineers, mechanical engineers at all levels. We work with some of the biggest companies in the world. We also work with individuals who are trying to prototype ideas. We welcome everybody. There’s no minimum order quantity or dollar amount on our platform. Anyone can quote work from us. So on one hand, we’re trying to reach that target as efficiently and effectively as possible at great scale, at national scale. We’re primarily in the United States. We have some business in Canada and Mexico as well. And on the other hand, we’re trying to reach high-quality partners. We call them partners. These are the shops that qualify to be a part of our network, so we want quality leads coming in. We then qualify them; they make a test part. We do an assessment of their capabilities, and then they start off, if they pass that, with smaller jobs and work their way up as they prove that they’re able to deliver for our customers. So there are two separate channels; there are two separate targets. So there are different tools that we use for each of those. In both cases, the majority of our marketing mix is digital. But we’re really looking at how can we– we think about the See-Think-Do-Care model which is a model that we use. I worked at Google for six years on the marketing and sales side. That’s the model we used there. Looking at, within each of those audiences, at people who are in the See audience are ones who don’t really have any awareness of what we do. How do we introduce our concept and our value? The Think audience, those are people who, they may know of us, but they need to be persuaded. They’re thinking about their decision; how do we effectively influence them? And then, Do, these are the people who, I’m ready to buy right now. How do we get in front of them as efficiently and effectively as possible in order to make them a part of the Xometry franchise, get them to come on board? And so we’ve got plans for both of those audiences across those dimensions. Danny:Okay, so we’ve got these two audiences there. And you mentioned you’re primarily digital. Are you able to share what your martech stack is or what you guys have done, what you’ve had success in or failure? What does that look like? Aaron:Yeah, I can speak in general terms. Danny:Sure, yeah. Aaron:Some of that–like I said, we launched back in 2014, and we’ve been slowly scaling up our marketing since then. We now have a team that’s focused on growth marketing which is my team. And what we’re charged with doing is bringing more customers in the door, the people who have CAD files and want to make parts and will ultimately be good customers for us, people we can help. And then, on the partner side, we’re also trying to bring in those new partners. And we also recently launched a business called Xometry Supplies where, actually now we have an ecommerce storefront from which we sell aluminum. We sell machine tooling, and we’re going to expand into other types of supplies as well. So in addition to becoming partners, they now also can buy supplies for their shop from us to help make their shop more efficient. A big thing for us is making our partners as well as our customers able to manufacture more efficiently. That’s the growth side that we are constantly using tools, a wide variety of tools to bring people in the door and then to move them down through that See-Think-Do-Care funnel and get them to order from us. And then, there’s also a team that we have here led by my colleague Danny Chang who is the relationship marketing team. And what they do is they are focused on how do we work with the companies and customers who have ordered from us before, using the toolset of relationship marketing. Again, much of that is digital as well. So how do we get people who have already ordered with us to come back and use us some more, as well as on the partner side; how do we get our partners to continue to be active, to take more jobs from Xometry and start to grow their revenue with us? That’s how we think about marketing. And as we’ve scaled up–as I mentioned, we’ve been a digital company from the beginning, digital in our DNA. So for us, it’s not really a transformation so much as who we are. Digital is our essence. We are a digital manufacturer. Danny:In your DNA. Aaron:It is, absolutely. And as we’ve grown, we continue to look at a wide range of digital tools and building out our CRM programs for folks who have engaged with us in some way in the past. Danny:Yeah, because we all know the digital tools, there’s only a few of them out there. They never constantly change. Well, one thing that I thought was interesting, and I was hoping that you could elaborate on it a little bit more, there’s all kinds of different terminology you’re hearing. We had actually an episode with the chief marketing officer–well, that’s not the official title, but that essentially was the old titles– chief marketing officer for ABB’s Electrified Products Division. She was sharing with us, well, now we’re a lot more customer-focused. And so my title used to be CMO, but now it’s global experience officer. And so I think your title is VP of growth marketing. You were talking about growth marketing there. Talk to me a little bit about, what is growth marketing for those out there who aren’t, they’re like, okay, another term. What is that? Aaron:Yeah, I’ll talk through how I got to this spot as a growth marketer here at Xometry. I started my career as a traditional brand marketer. I worked at Procter & Gamble for about seven years. Danny:A little, small company. Aaron:Yeah, yeah, a little company in Cincinnati. There, I did primarily brand marketing and brand management. So I worked on teams that managed very large brands, Tide, Downy, Bounce, Gain, mostly in fabric care. Then at Google I held a number of roles; worked in industry marketing and then, worked on the direct sales side, the media side for a while helping to build the digital marketing programs for mostly larger companies. What I found throughout my career is what I really enjoy most is growth and innovation and helping brands grow, helping businesses grow, helping companies grow. And I think that the reason why the title of this role specifically is growth marketing is, we’re at a stage in our company right now where growth is very important. We are a venture-funded startup. We raised $25 million last July, so we are continuing to grow. Our growth trajectory has been really strong, especially over the last year or two. And so my team, why we define it as growth and relationship is so my team and the folks that I work with, what falls under growth are PR, content, all paid media channels, that type of thing, anything that is bringing people in and helping us to grow our business. And then relationship marketing, the real strong focus on that is so that team can really get in deep with our customers, understand their needs, and really focusing on doing what’s right for them. Now, there’s certainly areas where these overlap. For example, a promotion could work just as well for customers as it could for growth and acquisition. But I think we are here at Xometry very focused on how can we grow and scale quickly to serve more people. And it’s not about us. Every company wants to grow, but we believe we really have a great offering, and we want the maximum number of people who are within our target, engineers, mechano engineers who are designing products who have their CAD files ready to go. All of them should be trying Xometry, and all of them should be checking us out. We really believe that, and that’s the mentality we bring to what we do every day on the growth side. And growth, it encompasses many of the things that other companies use to segment their marketing departments. A big part of growth is direct response marketing. A big part of growth is brand marketing. A big part of growth is content creation and storytelling. So that’s why we think about it that way instead of saying, okay, this group does brand; this group does direct response. We really want people to be thinking about how do we reach more people or how do we better serve and learn more about the people who are already buying from us. Danny:No, absolutely. That makes a lot of sense, and I always like hearing these stories because you’re like, what’s the method behind the madness or the methodology there? And by the way, I like the logo there. Aaron:Oh yeah, I’m trying to make sure everybody see this. Danny:Yeah, so it’s very good. No, but it’s very–it looks, I guess from a branding perspective, it’s modern and fresh, and it’s different. It’s engaging, and I think that’s something that we— Aaron:This is actually— Danny:Oh, sorry? Aaron:This one here, this is the Xometry vintage t-shirt. Danny:I like it. Aaron:We have a vintage one as well as the one with our traditional logo, which you can see on our website. I’m rocking the vintage today. Danny:I like the vintage. Aaron:If you want one, or if anyone in the audience wants one, just have them send me an email; we’ll get one out to you shortly. Danny:Oh, my gosh, love it. I’ll be sending you an email. We’ll send you an IndustrialSage one. But we don’t have vintage IndustrialSage; we need vintage IndustrialSage ones. Aaron:Let’s do it. Let’s make it happen. I know a guy. Danny:Yeah, that might–no, but it’s, I just think the idea of just, you see that more with tech companies. That’s a very–you said you were from Google prior. That’s a very tech company kind of thing, and I think that that, we’re going to be seeing more of this coming into the manufacturing space. And I love it; I really like that feel, and it’s exciting along with the whole business model and the vision that you guys have, that’ll really help to really grow these companies. You guys are really invested. Obviously, you will grow, but then help these custom manufacturers and just really solve this gap and really help people to get their parts faster. That’s awesome. Aaron:Yeah, we’re in the manufacturing space, but we are a tech company. That’s why we’re located where we’re located. When the founders of the company, Randy Altschuler and Laurence Zuriff were looking for locations for it, part of the reason that they moved it to the DC area–we’re headquartered in Gaithersburg, Maryland. We have offices in Bethesda, Maryland, as well. And part of the reason they headquartered it here was because of the tech talent that is available here. We have to design our machine learning models. We have a software engineering team; we have a data sciences team that creates these, and they are knee-deep in technology every day. Now clearly, being experts in manufacturing is a core part of what we do as well. But we think about everything we do through the lens of technology. Xometry is a tech company. We’re a marketplace platform that’s enabled by technology. Danny:Awesome, love it. Aaron, thanks so much for coming on IndustrialSage and sharing some information across board about Xometry, what you guys are doing, the growth marketing. I almost said growth hacking, but growth marketing and just how you guys are viewing things and really looking to completely change the world of manufacturing, custom manufacturing and really bringing that essence of technology to market for manufacturers. So thank you so much. If anybody would love to learn more about you guys, where should they go? Aaron:Yeah, so we–first of all, thank you for having us. It’s been a real pleasure to be here. It’s an honor to have a chance to talk to you and share our story with your audience. If you’d like to learn more about Xometry, the best place to go is xometry.com, X-O-M-E-T-R-Y.com You could also email me any time. My email is alichtig, A-L-I-C-H-T-I-G@xometry.com. You could also find me on LinkedIn, Twitter. You could also follow Xometry on, we have Facebook, LinkedIn, Instagram, Twitter, so check us out there. And when you come to the site, make sure if you’ve got some 3D CAD files, check out our instant quoting engine. Upload your files; it’s always free for anybody to use. Get your pricing, and play around with it. See what we do, and we’d be excited to work with anyone in your audience. Danny:That’s awesome. Thanks so much for that. We’ll definitely be checking you out. I’ll be sending you an email for a t-shirt. We’ll send you a t-shirt. Thanks for coming on. Aaron:Alight, thanks, Danny. Danny:Alright so another great episode here with IndustrialSage. There’s a lot of different things that you could pull out from this. And I think that one thing that, it just screams to me is, yeah, digital transformation, we keep talking about it. This company is coming in and taking– Xometry is, I think it’s an awesome business model on what they’re doing. I think one of the very first takeaways that I had was just that whole customer experience that they’re bringing in at the very beginning, just thinking about, how can we make it really easy? What do we want? We want information very quickly and on demand. I want to run my business, and I may need these parts, and how quickly– I submit some CAD files, and boom, I get an instant estimate. Obviously we know how quick that is making the process better so that we can have the lead times a lot lower, and I can get back to my customer. Think about the customer. Think about how we can make it easier for them. Think how you can use digital means to be able to do that. I love the whole growth marketing thing; that aspect, instead of having everything siloed as brand and content and whatever. It’s all together. This is really the vision and that goal there. So a lot to unpack here, so I hope you enjoyed this episode. And we’re really thankful that Xometry was able to come in and that Aaron was able to come in and share some of his experience and what they’re doing over there. So thanks for listening, as always. If you have any questions, we’d love to answer them on the show. You can reach out to us, IndustrialSage.com/questions. If you’re listening on any of the podcast channels, whether it’s iTunes or Spotify or Stitcher or all the other half a dozen ones that we’re on, we’d love a review. Obviously we’re on social media; share our stuff. We’d love it. And thanks for listening or watching, however you’re consuming this. And we’ll catch you next week. Thanks.
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| Banyan Hills Technologies: Steve Latham, On Applying IoT Solutions | 07 févr. 2021 | 00:21:17 | |
Steve Latham, CEO & Founder of Banyan Hills Technologies, shares reasons why (and practical tips how) manufacturers should apply IoT solutions in their space.
Danny:
Okay, IoT, I’m sure you’ve never, ever heard of that in your life. Or maybe the industrial fourth revolution. Well, it is here, and it is not going away. And it is really awesome. So today we’re going to spend a little bit of time with Steve Latham from Banyan Hills Technology, and he’s going to walk us through some ideas and some strategies and some tips on how to actually use IoT solutions and to be able to have them to influence your digital marketing or just your marketing in general. It’s a really cool topic. There’s a lot of interesting use cases in here, so don’t miss out. You’re going to want to watch this. I’m Danny Gonzales, and this is IndustrialSage. I’m so excited to jump into this episode. So we’ve got Steve Latham here from Banyan Hills Technology who’s going to be walking us through IoT. What is that? Well, if you don’t know what that is, you’ve been living under a rock for a while, I didn’t know you know what it is. But we’re going to get into it from a marketing standpoint. It’s going to be really great. So before we really get into all that stuff, Steve, if you could just introduce yourself to the audience, tell us a little bit about yourself and Banyan Hills Technology, and we’ll go from there. Steve:Absolutely. So Steve Latham, I’m the founder and CEO of Banyan Hills Technologies. We’re a company that’s five years old, and we are focused on— we’re an IoT company. We’re bringing an IoT platform called Canopy to market, and then all associated services along with IoT. Danny:Okay, great. So IoT, industrial fourth revolution, all these great acronyms. For those, for the two people who are watching this who don’t know what that is— I’m not throwing shade. But if you’re not 100% familiar with it, what is it? Steve:Yeah, absolutely. It’s such an overused term in a lot of ways. Danny:A little bit, yeah. Steve:Yeah, so IoT, very simply at its core is about taking any machine or any device and then, connecting it, figuring out how to connect it to the internet. and then, leveraging the power of the internet to monitor that machine, maintain a constant conversation with that machine to remotely manage it, and create entirely new experiences based on the fact that that device is now connected. Danny:Yeah, and it’s amazing. There are so many different applications on it. And so from a manufacturing and industrial side, a million different use cases. We’re seeing an obviously, even just focusing it from plant operations, creating better efficiencies, better output. But there’s also a whole other aspect of new products that are coming out as a result. Talk to us a little bit about that, some of the things you’re seeing. Steve:Yeah, it’s absolutely— in the consumer space, so direct to consumer, I think everybody is now gaining in familiarity with these solutions like smart thermostats or smart lighting systems inside of a home, even smart doorbells so that you can tell when someone’s accessing your house from a remote location. And so I think, on the consumer side, we’ve seen the market be flooded with all kinds of really creative and innovative solutions. And so the consumers are starting to get an education on what IoT really is through that type of consumer engagement. And then, if you think about now, when a consumer walks into an enterprise, they start to expect that the same type of experiences that they have in their homes are now replicated inside of these big enterprises. And so we’re starting to see the adoption of really smart technology in enterprises, large industries, like we’ve never seen before, which is really, really exciting. Danny:That is exciting. And I’ve seen— it’s funny you mentioned the doorbell thing. I think I’ve seen that on my Facebook, the ads, the person looking who pings you on your phone and stuff like that. And then, even— I think one of the greatest ones is those little sensors that’ll detect water, so you put them around your faucets or toilets or whatever so you can detect that. I think, what a great way to be able to really solve some of those challenges from a manufacturing standpoint to consumer. Obviously, there’s enterprise applications to that as well, to be able to help solve some of those challenges around, hey, maybe we manufacture toilets or the inner workings there, but how can we help make that experience, to your point, better? Steve:Yeah, I think on the enterprise side, what’s really, really fun to see is that an enterprise now is really trying to do several things. Any business that’s running a retail footprint or a physical footprint is trying to drive down costs through operational efficiencies. They’re trying to come up with new ways to create revenue streams. And that’s just the basic premise of a lot of business. And so the value that IoT brings in that case is that if IoT can help, through its implementation, drive automation into a physical footprint, that’s going to naturally reduce the cost for the operator, which is why you’ve got these enterprises or enterprise operators gaining in comfort with trying to pursue these. But then the things that’s really, where I start to get even more excited is so now, if I’m an operator of a facility, and I’ve got a connected thermostat or an HVAC unit and also a connected lighting system, and I’m managing those through one automation platform, can I start to correlate data from those two control systems and then drive entirely new experiences for a customer? So we were talking earlier before the show about if we can tell that it’s Steve Latham that enters a property, and we know enough about Steve to where we can personalize the physical experience inside a building by maintaining a constant connection to these control systems, think about the power of that. There was a customer that we had that was in the gaming industry, a casino. You think about a casino, and you think about all the connected devices. If we know that, based on the profile of the customers that are in that casino, that we can drive a real-time, almost flash mob marketing campaign where on an instant, we turn all the screens to a certain color, a certain branded experience, we turn the music to that— really, a physical advertisement where the consumer gets merged into this experience, that’s pretty powerful stuff. Totally different way of thinking about marketing. Danny:That is super powerful. We touched a little bit on that experiential marketing aspect. From a digital marketing perspective, personalization is a really big thing. We’ve been seeing that a lot. But what I think is interesting is that IoT is opening that to be able to expand that beyond a digital experience. But they can kind of play together. So your example there of being able to, you enter into this facility, you put your information in there, and then the system knows who you are and because of that, they can adapt; they can personalize that experience there. So having those customer profiles and that information accessible through a database and having those right points there, play that together, and you’ve got digital plus that actual real physical reality experience; you’re able to drive that based off of that. I think that is awesome. It’s amazing. Steve:Yeah, I agree. I agree. Danny:Also on that note, on personalization too, some of the things that we’ve seen, which is interesting, and I think that we might be seeing this a little bit more based on your example there, is that even in just outbound communications, some applications you could take from that is just looking at cost savings that you’ve generated for your client based on implementing this solution, having that built into an automated reporting tool, or being able to say, hey look, we’ve implemented this solution or this tool that we’ve sold to you to help measure your, I don’t know, your tank usage, the amount of gas that you’ve put into this tank. Or we’ve been able to reduce the amount of deliveries by X amount, being able to help automate that a little bit and then communicate that. Steve:Absolutely, right. Yeah, there’s this journey that our customers end up going through when we implement our product. Our product is all about any devices that you have in your retail footprint or physical footprint; it doesn’t necessarily need to be retail. Any of those, we can connect into one management platform. And usually, the journey that we take a customer through, the first thing that they want to do, they’re very cost-focused. They want to get visibility into all those connected devices. They want to make sure that the availability of those connected devices maintains a very high threshold, that they’re healthy, that they can start to do things like preventative maintenance or predictive service on these machines in order to keep them up and running. And so usually, it starts with monitoring, just help me monitor all of the assets that I have deployed in this environment. Then, we take them, once everything is connected, then you can start to show them, we call them IoT campaigns which is really about, now that we’ve got real-time events coming from one device, is there a particular pattern that should trigger a reaction? And so that would initiate an IoT campaign which very well could be a marketing campaign. It could be flash mob advertising, or it could be as simple as creating a ticket and dispatch a technician to go service that unit. And so then we take them from this monitoring mindset to this idea that we’re going to help them create entirely new experiences based on the real-time data that’s coming in through the platform. And then the final destination really gets at what you were just driving at which is, let’s say you have 30,000 connected locations, and within those locations, you’ve got, on average, 50 to 100 devices at that location. You think about all of that data that’s coming into this central management system and how can you use that data? Once you get enough history, you can really start to develop. It’s not just one location that’s providing you what might be data or trends in isolation. You’re looking at 30,000 locations at scale, and you can really develop some ideas about patterns that are occurring inside of your business that you can start to drive reactions. And so that data, that final stage, is really about using the data to become way, way, way smarter about your IoT campaigns. But then also, now you have data that’s really interesting for the industry you’re serving, and they’re willing to pay you for it. Danny:Exactly, it’s another product. Steve:Right, and that’s really the typical journey. So it starts at monitoring, and it goes to this enhanced customer experience, and it lands at this really massive data store that becomes extremely powerful for them. Danny:Well, what I love about that is that it’s all about— well, a couple things— all about the data. So in everything that’s going on, it’s all data-driven. But the thing that’s really cool to me is that there’s a ton of creativity inside of that. One of the things, I think there’s— so I have an accounting background, and some people are like, how do you have an accounting background, and then you’re doing some creative stuff? One of the things I think is interesting is that, on the creative side, we’re always telling a story. But when you look at the numbers, there is a story inside those numbers. And I think that’s what bringing in these kind of platforms and having that data gives you the ability to be able to have that marble block, if you will. And there’s a story inside that. Now, we just have to chisel away and work away to figure out what that is and say, oh, wow; we just discovered now that we can connect all these different data points to be able to drive this marketing campaign. Or now we have a whole new product that we can— it just dorkily gets me very excited about all the opportunities that it poses. It’s really just a matter of stepping back, analyzing it, looking at it, and then thinking creatively, okay, well what does this mean if we’ve got this connection? And to your point, we’re seeing this trend over here. Well, maybe if we see a lot of people performing XYZ function, maybe we could at that point, we dispatch somebody. Well, maybe we’re sending an email; we’re just going to trigger an email that we’re going to fire out to say, hey, just wanted to let you know, we’ve detected this; we’re dispatching this. We’re on top of it. And from a customer service standpoint, it’s okay, wow, this is great. They’ve already gotten— we’re detecting some abnormalities; we want to keep the up time up. We don’t want any down time. Steve:I’ve got a great example of that which is exactly what you just said. There is one of our partners and a customer of ours is in the self-storage industry, and they manage access control systems within self-storage. And they have their technology deployed across over 35,000 locations. Danny:That’s a lot of locations. Steve:A lot of locations. Danny:A lot of data. Steve:Exactly. And one of the things is we’ve been talking to their customers about the value that IoT brings to this space. Almost every customer said, hey, could you tell us when a customer is about to leave by access control data? Which seems very logical, right? If you’ve got a customer that, there’s a lot of activity when they move in, and there’s a lot of activity when they move out— Danny:But in between— Steve:In between, it’s pretty silent. And so if you start to see increased usage, that would suggest that they’re probably going to leave. And that should trigger some sort of light touch to the customer initially just to say, hey, check out these incremental services like a moving service, for example. So I just think that more data, more visibility into a physical footprint through IoT can drive all kinds of new campaigns that we’ve never thought about. Danny:What a great use case there. Whether you have that moving service or not or being able to partner with somebody, again, it’s helping to solve the challenge. You’re taking that data; you understand what’s going on. Hey there’s something— I love it. And I think, it’s one of those things, I don’t know, necessarily, there’s a finite path, per se. Obviously, you have to have some sort of platform in place to be able to have that data and be able to analyze it. But just stepping back and thinking, what could we do to help make a better experience for our customers, or our customers’ customer, depending on who that is? That’s awesome. Another question is, is there such a thing as too much IoT? Or just because we can do something, I suppose we can measure it— I imagine, is there a balance? Steve:Yeah, a lot of times— and I’m a big advocate of this. I almost feel like we’re a little past with IoT as an emerging technology trend. IoT has arrived. It’s here; it’s on our face. It’s being used. There are standards that are coming to life around IoT. And so I feel like, in the last 12 to 24 months, we’ve really seen IoT arrive. But previous to that, one of the warnings that I would give a lot of people that would come in is, I would say, make sure you understand the value proposition that you’re pursuing before you just go experiment because at the end of the day, if it’s not enhancing the customer experience or changing your cost or revenue profile, you have to ask yourself if it’s worth the experiment of doing it. And so I absolutely agree with you. The good news to that question is because of where IoT is in its lifecycle, I think that we’re a little beyond a lot of experimentation. Things are really hardening and coming to life in a way that I think is pretty powerful for IoT. I think there are new emerging technology trends that are coming to life as a result of IoT that have that risk profile. Danny:Sure, yeah. So last question: speaking to a digital marketer, I am working for a manufacturing company, and we have got some IoT solutions rolled out. We have some things that are maybe helping us from an efficiency standpoint in our plant operations but also on the products that we have manufactured. What advice would you give to somebody who’s sitting there, different things that they might be able to do to be able to make their digital marketing campaigns a little better, a little smarter? Steve:Right, well I think there’s probably a few different ways to answer that. I think first and foremost, the advice that I would give a customer if they were asking me that would be that, focus on your strength. If your core competency is manufacturing hardware, that’s your 80, 80% of what you do, so focus on your 80, and develop relationships with firms that have a strong presence around digital marketing or IoT as a discipline, and leverage that to help you get that product to market. I think that, if you’re a manufacturing company and believing that you can become a consumer or even an enterprise marketing company around IoT is probably a little bit of a stretch. Some companies can do it, obviously. But I think most of the time, especially initially as you’re considering this, developing strong relationships with companies that can help you develop the right message is really important. And without a doubt, the most important thing to do, I believe, is to understand what your customers want. Understand the real value proposition of what it is that you’re building so that your message can be really focused, really targeted, and solve the right problems for them. I think, back to the point that you had previously, a trap is that you have just built something that technically is very cool and very fun. But it doesn’t actually solve the issue for the customer. And so your product is wrong; your marketing is wrong. You’re missing the point. So I would say, off the cuff, the two things that I would recommend are: get to the voice of the customer; make sure you’ve got that right. And then, develop the right partnership with a company that can help you target your message for that customer. Danny:I was hoping you would give us a silver bullet answer. But it’s a very consistent theme here on the show all the time. It goes to really looking at the personas, really getting an understanding of your customer. What are their challenges? What are their needs? And when it comes to product development is making something that is actually solving a problem, or is it just really cool, and you think it’s amazing? Steve:Yeah. Danny:Just because it’s really cool and it’s amazing, it might not take off. But if you’re solving a challenge, you’ve got to go through all of that. Alright, well thanks so much for coming on. If somebody has a question and would like to reach out, what’s the best way of contacting you? Steve:Sure, so you can reach us; go to our website. It’s www.banyanhills.com. You can reach out to support@banyanhills.com to get in touch with us, and we’d love to talk with you. Danny:Awesome. Well, thanks for coming on. Steve:Yeah, thanks so much. Appreciate it. Danny:Excellent. So alright, IoT, a lot of great nuggets of information here. I think one of the coolest things that I took away was the endless amounts of possibilities there are if you have an IoT solution that’s implemented or if you’re thinking about doing that. From a digital marketing standpoint, from a marketing standpoint, are you able to take that data and create better experiences, whether that’s digitally or even in person in that physical reality. So think creatively. Think about, okay, if we have access to the data, analyze it. Spend that time looking at it. Try to help to figure out what you might be able to do with that. It could be as simple as, if you’re dispatching preventative maintenance calls, being able to send an email campaign to be able to communicate hey look, we’re helping. We’re on your side; we’re helping you to solve that challenge or make sure that you guys don’t have down time. Things like that, they’re simple, but they really mean a lot. So hopefully you took something away. I know I did; it was awesome. If you are listening to this on iTunes, hey, we’d love to have a review. If you have any questions, we’d love to answer them; IndustrialSage.com/questions, we’ll answer those for you. Please share, like this, send, do all the things. And until next week, I’m Danny Gonzales, and this is IndustrialSage. Thanks for watching.
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| OMI: Brad Banyas, On Social Selling | 31 janv. 2021 | 00:20:39 | |
Brad Banyas, CEO of OMI, joins us to discuss why manufacturing marketing and sales teams do actually need social selling strategies.
Danny:
Hey, alright, we’ve got an awesome episode for you we’re lining up here. We’re going to be talking about social selling. What is it? I don’t know. But we have Brad Banyas here from OMI who’s going to tell us what it is and why you need to use it. I’m Danny Gonzales, and this is IndustrialSage. Alright, let’s go ahead and jump into this episode. Brad, thanks so much for joining us. We have Brad Banyas here from OMI who, basically what they do is they do a lot of sales force, marketing automation, and social selling strategies and integration kind of things. So before we get into this topic on, we’re going to be talking about social selling, Brad, tell us a little bit about OMI, yourself, your background, all that good stuff. Brad:Good, yeah, so we’re 19 years old this year; just turned 19. We help companies implement and execute CRM, marketing automation, and more recently, new social selling platforms. So companies struggle with that because there’s a lot of opportunity. There’s a lot of products, a lot of services. They don’t know, really, what fits for them. So we typically help anyone in the small to midsize business area and can come in with them and help evaluate tools on their behalf, help them get better sales processes or marketing processes on tools they’ve invested in in the past, and maybe they’re not leveraging those. Danny:That never happens. Brad:Yeah, actually, most of our clients actually have CRM in place, and so we help them execute that and help their teams better evaluate some of the new things that are going on in the market like social selling. Danny:Perfect. And that’s a great lead-in to the topic we’re going to be talking– because I think a lot of us have heard of social selling. You talk about it, and probably some of us or a lot of us, or maybe none of us– I don’t know–are actually doing it and engaging it. But I think what is really interesting, you have been hearing about this probably over the last two years or so, social selling, so let’s break that down before we get into how to do it. What is it? How would you define it? Brad:Yeah, I think a lot of people are like, is it just a buzzword? And in some cases, it may be. But social selling has really come out of the CRM space. And so what happened with the CRMs, people thought of it as a big database that you put data in, and you can’t get any information out or information changed on your contacts and your prospects. So what social selling really is about is the technology such– people are familiar with LinkedIn, probably the most recognizable platform that people use every day, new tools like Nimble CRM that are really catered to helping you to reach out and build more information about a lead or a contact where it will automatically go out and find information on your social accounts, so it builds a social dossier. So what that does, in the past we were all looking through books or buying lists or procuring other lists and trying to import them into CRM. The problem was, there was really no contextual information around that individual. So social selling is really built around that realm to help you identify that person, learn more about that person, and be able to reach out easier across different mediums. Traditional was phone and email; now it could be Twitter, Facebook, and LinkedIn. So it’s really bringing that front and center to the sales and marketing teams of these companies to interact more easily and more readily. Danny:Yeah, absolutely. And I think it’s such a great thing. It’s funny, too; it’s like maybe it’s a new term, but the reality of it is the basis and the premise of what goes on with it and how you do it, it’s no different than sales probably was done 100 years ago, 200 years ago. It’s the same process; it just has a different face to it. But I think sometimes it can be a little challenging, a little daunting because it’s like, wait, essentially we’re talking about getting on social media platforms like Twitter. Do I really need a Twitter? In certain cases it’s like, well, it’s interesting because everybody has their own, there’s all these different tools. You mentioned maybe not even email 20 years ago, but your phone. Now, it’s all these different things. Here’s my phone; here’s my email; here’s my LinkedIn; here’s my Twitter; here’s my Instagram. Look at all these different things here. So what are some practical applications in terms of using that in the sales process? How might a salesperson, and even marketing as well, how might they use those tools? Brad:Right, so part of the reason I’m going to step back as why it’s becoming more relevant is the whole way that people buy services and interact with your company has changed. Before, we would educate through a number of ways, mediums like magazines or trade shows, and that’s still effective in some cases. But today’s world is not about, can I find you or do I know who you are? But it’s, how do I better communicate with you or really build that relationship that used to be taken over time, maybe years, down to weeks or months to build a trusting relationship? So some of the ways that people use social CRM today is really being able to target that ideal person around their interests on things like LinkedIn. You can put categories in of what you’re interested in, CRM, manufacturing, certain things, boats, automobiles, whatever may be— Danny:The niche. Brad:Yeah, and the niches that you can define will then allow you to closer target that group of who you might be able to reach out to. So one example is, obviously we’re in the CRM space, so we want to know people that are using platforms like Salesforce or Nimble or other products that we consult on. So it’s very easy for us to identify those relationships. And then once we do, we find certain common things that’s going on at that company. Maybe there’s a job opening that was posted. Maybe there’s other what you would call storylines or tags that are important for us to know this person may be worth engaging with. And we use those tags, and they are made readily available and the social tools to bring it to our attention. So then we can focus on messaging. We can focus on, how do we want to communicate? Maybe we just reach out via LinkedIn. Maybe we call them, or maybe we put them in a nurture campaign to get them warmed up to talk to us versus aggressively going after them. Danny:Exactly. So really, what you’re talking about there in that explanation is really that omnichannel approach. Really, we have all these different channels, if you will, to be able to reach contacts. So maybe you put that in part of that sales process, part of that cadence. You’ve got, maybe it’s an initial phone call; and then it’s an email. And then I think what you’re really talking about there is engaging with somebody on the outside. If somebody’s putting a post up about whatever, like it. Maybe make a little comment on it. Or, like you mentioned, if somebody has a job posting or something, well maybe you know somebody that might be a really good fit for that job. Say, hey, I’m going to share this with such and such or send that link, and really providing some value and helping them. Brad:And that’s a great point. What social CRM has done and social selling has done is bring those listening points or those things that are going on front and center so that you can act on them. And you can actually become more helpful to someone. You can actually say, hey, I found this article; I know it makes sense for you. Or I know you go to Disney World every year; here’s a great article on Disney. So some of the things that we’re doing you mentioned briefly in the automation space is things like gifting or things like bringing their attention to something that, if you know someone, it means something very much to them, that they love Disney World, send them a nice card that’s personalized about something with Disney or a character on it. It’s about really trying to connect with that person at a human level and then begin to do business versus our old cold calling, call, call, call, you need it, you need it, you need it. And you just can’t get to those people anymore. So social CRM and social selling is really helping you nurture these relationships or find some type of common ground with an individual to then be able to really see if your products or your services are right for them. Danny:Yeah, a couple of key things in there you mentioned. At the end of the day, people want to do business with their friends. It’s a really great tool of being able to start to build that relationship. And the other thing that you said that, I love it there, really is providing value. Provide value first. Instead of, hey, come buy from me, buy from me, buy from me, it’s making that initial connection, and start having these interactions and building that relationship by providing value. So maybe looking and seeing, what can you do to help make their day better or solve their challenge or whatever that doesn’t have to take a lot. You mentioned, send them a little gift. You see them; they’re putting this post on–people pay attention. People love that, and that stands out way more than, hey, you want to buy this thing from me? Brad:Exactly, and the world is so funny, whether people believe in networking or referral marketing or referrals in general. In the consulting world, you get a lot of referrals because you don’t necessarily have a product that you can see, so you have to build trust and get referrals. And things like LinkedIn have been so successful because you’re building that network; you’re building that referral network. And I can go to any industry expert that I know in LinkedIn and say, we’ve got a client that’s got a problem, and I know you guys can help them. It has nothing to do with me, but I’m going to introduce you to them. That’s a different approach, and our clients remember that. I may not know anything about electrical engineering or whatever it may be, but based on our network and the strength of our network, you can disseminate hey, I’ve got a client that’s got a problem, and is there anyone out there who can do it? And you’re using the speed of the internet and these social tools to bring those expertise together and then solve problems. And it works. So you can’t take the traditional approaches; I’m going to go sell you this. It’s earned over time with the things and the good deeds or the referrals you provide over time. Danny:One of the best things, I think that’s a key differentiator between being a vendor versus a trusted advisor. And I hate the word vendor; I really do. But I had an experience a couple weeks ago. Somebody called me, and they said, hey, listen–it was somebody, we hadn’t sold anything to them; we were talking to them. They said, hey, I’ve got a question for you about this, and it was kind of outside. But I thought you might be a really good person to. But hey, I guess it’s pretty good that I’m calling you, asking– we made that jump, and we trust you, and all that stuff because there are some times, they had other challenges that, completely unrelated to the products and the service that we were selling. People say, hey, look. We see you have this problem over here; I need to connect you with this person over here, and let’s do that. People totally remember that. Brad:Oh yeah. Danny:And they’re like, thank you because this was a big pain in my butt, and you’re helping to solve it. Brad:It’s funny you mentioned the vendor comment because that’s something we dread. We want to be a trusted partner. And when someone says vendor, it’s the kiss of death, and you’ve just been commoditized down to a point that, next time it comes up, you’re gone. So whether you’re selling pencils or whether you’re selling Teslas, customers want to feel good. They want to do business with you, and you’ve got to add some value or differentiation. So some of these, back to these social selling and these tools available like we mentioned, Nimble, and LinkedIn, and all these great tools– that are very affordable; everyone can use them. Some of them are free– is it’s bringing that information and aggregating that information where you work, in your email, online, and it’s, anyone can use it. The old days of where you had to enter information in on Danny or– nobody wants, that’s death to a salesperson that has to sit there— Danny:Do data entry. Brad:Yeah, for three or four hours and do research and do that. And it’s a large percent of their time. In most cases, it’s a day a week. If you can give that selling time back to them and get them networking, get them interacting with some of these available software tools out there, it saves them time and money, and you’ll win more business. Danny:Now, I’m going to make a little bit of a pivot on there. Let’s bring some of that marketing into the conversation in terms of the tools and the market. How can marketing help support some of this because obviously, it’s outbound? Call it SDR work or whatever. How does marketing come in to be able to help support that? Brad:Right, I think staying away from the technology side, what some of this has been able to do is for really marketing and sales to align more around the customer profile or the segmentation. So in some of these services we’ve talked about, I have the ability to tag someone as, I need to nurture those people. They’re interested in automobiles; they’re interested in software or whatever it may be. The ability now for marketing to work with sales around nurturing them and pulling those leads and tags and executing a content strategy– these people are interested in automobiles; we only want to send content about automobiles to them– really has evolved, and it’s not as difficult as people think. So one example would be, you’ve heard people talk about drip campaigns, automate campaigns. It’s really irrelevant. It’s more about finding someone’s interest, knowing what they’re interested in, and slowly giving them relevant content. Same thing with the referral that we were talking about. Giving them relevant content over time so that, when they’re ready to buy, they know you’re targeting them, not for boats–it’s an automobile that I’m looking for. Danny:Yeah, and they knew who they’re going to go with on it. So that’s super key. We talk about this on the show all the time, that alignment between sales and marketing. Sales out there; they find these people. Okay, maybe they’re not quite ready to go, but let’s continue to nurture that conversation. That’s where some of these tools, whether you have these tools or not, but marketing should hopefully, in an ideal world, come in to be able to help to nurture them and provide that content, really to provide that education, to help solve their challenges so once they are ready to go, to your point, good to go. Brad:Yeah, and it’s really interesting because more of the content, where in the past in the traditional world, marketing had all the content or managed all the content. What we’re seeing that’s been successful is, in many cases some of the sales team is directly with the clients and getting feedback. So some of these things where sales-generated content, specifically around video, people creating their own video, people using that video over and over again just to try to get through to someone. We’re seeing really where they’ve had success in sales that the marketing and sales teams are coming together and jointly saying, hey, Danny did an awesome job on this kind of video for this client. We need to take this and put this into our marketing and our sales process for our other teams to learn from. And that’s been, we’ve seen that over and over be a success. Danny:So it’s really, instead of having that lone wolf approach to the sales. I’m just heads-down; it’s really bringing in that team. Brad:Exactly. And the wins today are a lot easier to share. They’re more visible. But as far as executing some of these sales processes and social selling processes, there’s been– in the past, everyone was a little hesitant. I don’t want to enter data. I don’t want to do that. Well, these kinds of tools are really beneficial around building your brand as an individual no matter what company you’re working for. It’s building your brand, and that’s really what it’s about. It’s about you’re confident in your products; you’re confident in your services. But you are the brand, and in the past, that’s not been the case. Well, the entity is the brand, but you as a representative have been empowered through a lot of these tools. And they’re readily available. And that’s how people really connect. So I think some of it’s good. Danny:That human connection. Brad:Yeah, I think it’s good, human to human. Danny:Exactly. Brad:It’s all about that. It’s funny how, as much technology as we have and such great automation and things we’re doing with artificial intelligence, at the end of the day, all these tools are making us do is be better at communicating our message more succinctly, more directly because it has to hit at the right time. The sales cycles of 20 years or five years or six years are being pushed down. Danny:Absolutely. Alright, so my last question here would be, okay, somebody says they watched this, and they’re like, you know, I haven’t been doing this. Maybe I should be doing this. It sounds like it’s pretty valuable. What key tips or advice would you give to somebody that is saying, you know, I want to start doing this? Brad:There’s a thing called the internet which we all know. Danny:Google. Brad:Yeah, you can Google it. You can learn anything about some of these concepts we’re talking about. I would say, if you haven’t been on LinkedIn, it’s one of the largest business networks in the world. It’s not new, and it’s something that I think will help you learn. You can get in; they’ve got some new things now that train you on social selling. You can literally get learning classes from LinkedIn, directly in LinkedIn. So there’s a company called Microsoft that bought those guys. Other things you can do is go out and look at tools like, we talked about these Nimble CRMs and these new, really simple, the easy-use tools where they connect to your existing tools you’re used to like Google or Microsoft Outlook. They connect dynamically, so it’s not like you’ve got to be a real tech wizard. And just start playing around and reaching out to people trying to link in with them. Have a subject; have something readily available that you need to talk to them about or that is relevant to them, and just engage, and you’ll be amazed. So if you start, and you’re like, I only have 20 people in my network, if you consciously do that and look for the right people, that network will grow. You will become a trusted part of the network, and it will bring you more business than you can imagine versus the traditional ways of cold calling or direct mailers. Danny:That’s awesome. Brad:Get at it, and good luck. Danny:Well, Brad, thanks so much for coming on. That was awesome. There’s a lot of great information here, a lot of great takeaways. If somebody would like to ask any questions, how can they get hold of you? Brad:Yeah, so we’re at OMI.co, as in company, so just OMI.co. You can go there; there’s a plethora of information about what we do, some of the topics we’ve talked about today. And you can call, and we actually will pick the phone up and actually speak to someone. Or you can email us or Twitter us or do whatever you want, but that’s where the best place to go would be. Danny:So if you need the plethora of information, go call Brad. Brad:Call OMI, yeah. There are 100 people behind me, by the way. Danny:Excellent. Well, thanks again for coming on. Hey, listen, another great episode here. Social selling, really awesome, really, really cool tool here. A couple takeaways that I can think of, that I pulled out here: Look, really leverage the social media platforms that you have. LinkedIn is a very easy tool to use. If you haven’t really used it a whole lot, set that up. Get your profile picture up there. Put your information in there, and start engaging. Maybe even just set some time up, I don’t know, once a day, just for five minutes. Go look; go join these groups that are in your industry. And start commenting. Start looking at people you know; help to solve their challenges. That’s really the goal, and to really cultivate that relationship. There’s a lot of other great nuggets of wisdom here, so if you have any questions, we have everything in the show notes. And, as always, if you have any other questions that we would love to answer for you, you can write in at Optim–not Optimum Productions because that’s the production company here– IndustrialSage.com/questions. We’d love to answer your questions. If you’re listening on iTunes, we’d love a review. Please share our content, like it, post it. And as always, enjoy. We’ll see you next week on IndustrialSage.
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| Eurokera: Mathias Konne, On the Importance of Brand | 24 janv. 2021 | 00:20:33 | |
This week Mathias Konne of EuroKera discusses the immense need for (and challenges of) building a coherent company brand online.
Danny:
Well, you are in for a treat for today’s episode. We have Mathias Konne from EuroKera who’s going to be walking us through their story on branding and why it’s really important and how they came to be. So before we jump into this, Mathias, if you could introduce yourself to the audience, who you are, background, all that good stuff. Mathias:Sure, so my name is Mathias. I’ve been working with EuroKera now for about four years. I am French, which will explain my accent in English. Danny:Oh, okay. Mathias:And I started working for them four years ago. Before that, I studied marketing in Europe. I came over to the US, and I’ve been working with the company for a while now. We manufacture glass-ceramic products. So for glass-ceramic cooking but also fireplaces and all that kind of high-temperature use. So it’s a highly technical glass. We have five factories, so two in France, one in the US, one in Thailand, and one in China. We supply customers all over the world. So that’s pretty much what we do. We have a French origin that we’re very proud of. I’ve been working in marketing since the very start. When I arrived at EuroKera, there was actually nothing there. So it’s been challenging, but we are building our brand, and we’re building pretty much everything from scratch. Danny:Sure, yeah. And that never happens. Nobody who’s watching this, probably, or listening, if you’re listening on iTunes, I’m sure that nobody has ever run into that where, hey, we don’t have marketing all of a sudden, we are. But EuroKera’s interesting to me and definitely not an anomaly. It’s very common. When you guys– if I understand; correct me. Do you guys deal directly with distributors? Do you go straight to the other manufacturers? What does that look like, just to set the foundation? Mathias:So we deal directly with the manufacturers. So your big brands that you know, that manufacture appliances, for example. We deal directly with them. Our teams go and meet with them directly. Danny:Okay, perfect. Alright, so in that sense, you guys did not have a marketing department for years. How old is EuroKera again? Mathias:It was born in 1990. Danny:Okay, alright, so it’s got some history. Mathias:It’s got a decent history. Danny:So all of a sudden, they said, hey, you know what? I think we need to do this marketing thing. And then, you came onboard. What did that look like? Why did that decision happen? Mathias:So why the decision happened is kind of unclear to me. I don’t know why, after 20 plus years, the company decides to do marketing. I think it’s because we have a great product. It’s very unique. And there’s only a few manufacturers of glass-ceramic in the world. So if you’re manufacturing glass-ceramic well, you’re going to sell it because there’s only so much supply. Danny:Right. Mathias:And so it’s easy to find customers. They’re big; they’re easy to locate. And I think it’s been very engineering-based so far with just negotiations, of course, but pricing but also the technical side because it’s a very technical product. I think what changed is, now we realize that you have to also educate the consumers to create that demand from the other side, the push-pull strategies. And that really helps with your business as a whole because even if you’re not dealing with them directly, people now with social media, with internet, with all these tools that they can have right at the tip of their fingers, well, they are educated. And they have access to the information way sooner than they used to. So now you can, if you’re in marketing or in sales, you can play with that and use that to your advantage if you do some marketing and if you build your brand around that. Danny:So push-pull, that makes a lot of sense. You bring up a really good point, too. Now, with the internet and all the other advances, you can argue home and box stores, the Home Depots and Lowe’s which have been around for a good while. If you really look at the history of your parent company you were talking about earlier, Saint-Gobain–did I pronounce that right? Mathias:Saint-Gobain, yeah. Danny:Saint-Gobain, alright. Okay, I’ve got to get my inner French going there. Which I am half French-Canadian, just a side note. [They converse briefly in French] Mathias:That’s pretty good. That’s all you need. Danny:Perfect, I’m good. They’ve been around for 350 years, and so these big-box retail stores where you go to actually do the DIY was largely not there before. It’s the minority of the time. Now, things have changed, and it’s been expedited, like you said, with the internet. And it’s interesting, too. You’ve got a lot of consumers who otherwise might not care about the product. Now, presumably because they have access to it–the information, that is– they’re a little bit more informed, and they want to know all these different things. That makes a lot of sense. That makes a lot of sense to me. So, interesting, how did you guys, when you came onboard, what were some of those first things that you guys did? You said, hey, we want to do marketing now. I’m assuming there was something that was done beforehand that was marketing-esque, right? Mathias:So there was some stuff that were already in place when I started. One of them was a website. So when I got onboard, it was in 2013, 14. It was already a very old website for that time. And so it was basically an online brochure, which I’m sure, it’s not uncommon in our business. I see a lot of companies that still have websites like these. But it was very simple. It was sort of marketing, but it was not going the extra mile. It was not even trying to connect to our customers– no need to say the end-users– no connection there. So this was already in place. We had all kinds of different collaterals, brochures and little spec sheets and all kinds of stuff. You name it, and they were all one thing that’s very, that really hurts your company and your brand. That thing is when you have all these things, and they all have a different visual aspect. We even had different logos. Some of the logos were in different colors. Some things that may sound crazy to some businesses, but I’m sure in the B2B world, it’s not that uncommon for companies to have that kind of issues. So one of the first things that we did was bring cohesion into that and bring a real corporate look, a visual identity. We’re still working on that. It’s taking a tremendous amount of time because when you have a small team and you have a big company, so many countries and so many collaterals, it takes a while to get there. But this is one of the first things that we started doing is create a new website that was matching the image that we wanted the company to convey and also make all the collaterals match the look of the website. So that was the first thing because web is very important. And I always remember, somebody told me that one time, and I thought it was the greatest quote I’ve ever heard for marketing. They said, “Do the basics, but do them brilliantly.” Danny:I like that. Mathias:And I think that’s something that any B2B marketer should apply to his business because we all have limited resources. We all have a lot of challenges. We all have very specific targets, audiences, and challenges. But I think if you do the basics and you do them brilliantly, then that is the most efficient way that you can do things. So you really have to focus on a set of key things that you want to do. Danny:No, I love that. That’s an awesome–we’re definitely going to be using that. That’s definitely a Tweet-able, quotable–I really love that. Mathias:It’s not from me, though. I won’t take the credit for it. Danny:We’re going to give you all the credit; don’t worry. So one of the interesting questions that I would have with that is that, obviously brand identity is really important. But you mentioned before that you’re dealing with a lot of engineers. Let me ask you this: why is it important to do that? Why having cohesion across all the different marketing collateral and websites and all these different things, why do that? And why is that important? Mathias:Because that’s the only way, in my opinion, to build a strong brand. If you have different looks, if you have different colors, if you have different fonts, if you have different images or people using low-res images, at the end, even if you don’t do that intentionally, but you’re hurting the company’s image. Whereas if everybody speaks one voice and everything looks the same, where you build that brand, you build that strength, and then, you attach a message to this brand. You attach a feel to it. And that’s where, I think, the value is added to your products because nowadays there’s tons of brands in the world. There’s new companies setting up every day. And in glass-ceramic, it’s a little bit less true because it’s a very specific, highly technical product. But you still have more and more competition. You have new companies starting in Asia, for example. They may not be good enough today with their products. Their quality may not be the same. It is not the same. It’s not even–it’s not. But you never know what the future holds. And so for me, that’s where marketing, that’s the main mission of marketing is to protect your brand. And you want to protect it in the present, but you also want to protect it in the future. But you have to start that work early and mainly on your brand to build that brand to where your brand is strong enough to add a specific value to your product that is besides quality, pricing, innovation. You want to bring another feel to it. You want people to be able to connect to your brand because that’s going to be a huge difference-maker, I think, when people feel a certain way about buying your products which is one of the missions of marketing in general. Danny:Right, yeah. Mathias:But I think that that’s very important. It’s just as true for B2B than B2C in a specialized product like glass-ceramic and less specialized products like Starbucks coffee. So I think that’s very important. You just add value to your products by building your brand. Danny:Totally makes sense. I mean, really, it’s creating that perception. It’s interesting you mention; you got things that have different fonts and different colors, and everything’s just scattered. It really does have this idea of, man, there’s stuff all over the place. Things aren’t, I don’t know, not going this way. And I think a lot of manufacturers really focus on the quality of their products, as they should. That’s really important, making sure that performance and the function is a high quality there. But I think a lot of times, that branding gets left– well, that’s the frou-frou stuff, whatever over there. This is–we’re focusing on this. And I love how you say that really creates stronger products that image, that perception that these guys have got it going on. They’re high quality. So if you have five different versions of logos on there, it’s kind of like, eh– There is a feeling. It might not be necessarily right there, top of mind, but I guess maybe there’s a feeling, like hmm. And I think we’ve all experienced that before. You see, even just in logo and letterhead development or a website. And you look at it, and you’re like, oh, wow, that looks like they’ve got things put together, versus this looks like this is from 1998. Mathias:Yeah, on top of that, it adds a professional look to what you do. So if you’re a very professional, highly technical company, well, you want to show your products in a professional manner so that that adds to that too, definitely. Danny:That makes a lot of sense. Mathias:To me, it’s just the same. You can take the example of, if you have a million people yelling a million words, different words, you’re not going to understand anything. But now, if you have a million people yelling one word, that’s going to be pretty loud. And then, you can ignore it. So that’s what I think a cohesive brand does. Then, you just have to pick the word you want to— Danny:Pick the word, which can be the most difficult. Mathias:That is. Danny:But I love all those different things. You also mentioned, too, protecting the band– your brand, not your band. But maybe if you have a band, and you need to–yeah, that’s important, too. But making sure that that is, it’s not diluted, especially with the competition coming in. That’s a big thing. I hear we’ve got a lot of manufacturers, they’re saying, hey look, we’re the biggest; we’re the baddest; we’ve always been around. And yet, you’ve got all these competitors that are popping up all over the place in different parts of the world and whatever. It’s important. Mathias:It’s very important, and that’s why you need that strong brand because, in the future, you don’t know what’s going to happen. And you need to build the foundations, the basics. You have to build them early to then be ready when you actually need to use them to differentiate yourself or your business from the others. Danny:Absolutely. So I want to move on a little bit here. So we talked about, you came in, and the first thing, let’s put some cohesion to our brand. Let’s really start dialing it in. Still working on that; it takes time. It’s not something overnight, and you’re done. Mathias:No. Danny:But what was next? What was that next thing? Okay, we’ve got this, and we’re working on the next thing. What was that? Mathias:So I think the next thing that you have to do once you get to the first stage which is getting things together, then you have to market your marketing department. And that, in the B2B world, is sometimes very complicated because marketing has sort of a bad image. You’re just an expense bucket where people just throw a ton of money, and they never see any return on it. So that’s one thing that you have to be cautious of early, too. And people in the B2B world are, I can talk for EuroKera, it’s very engineering-heavy, so people who actually love numbers, data, and graphics, charts. And that’s where you want to bring them. After a while, once you’re done setting up everything, your website, your social media if you have some, all your collaterals, that’s one thing that I think you then want to do is to bring the measurement. And I think we hear that a lot from everybody now because that’s the big thing. But it’s very important, I think especially more in B2B where people love numbers. And they’re right to love them because you want to see what you get for your money. Danny:Right, yeah. It is a business. Mathias:It’s a business. After all, we’re all here to make money. So you definitely want to do that, and I think that’s where digital marketing, for me, has completely revolutionized marketing in general because now you can finally measure things that you’re doing. Like I was saying earlier, if you give a brochure, like a paper brochure to somebody, well, he may walk in the corner and put it in the trash. Whereas if you have a website, or if you have social media channels, or if you have a newsletter or a blog or anything like that, you can clearly measure how many visitors you get, how much traffic you get, how many of these convert, the quality of your traffic, the funnels, everything. You can really have a great picture of everything that’s happening, and that’s definitely what I think the executives and all that, that’s what they want to see, I think, after a while because that’s going to help build your reputation and then build the trust that they have in you. And that helps you keeping the momentum going. Danny:That makes a lot of sense to me. So it’s just having–I’m, admittedly, I’m half numbers guy. I get it. I totally appreciate it, having that there. But there’s also bringing that element of, making sure you’re building that brand, but then, if you have different areas that you can be able to measure to be able to say, hey look, this is what this is doing. Even if it’s just, hey look, increase web traffic. Ooh, wow, this is great; we’re actually getting something out of that and then, building on that. What else have you guys, what was the next step after that? Mathias:After that, I guess it’s kind of a never-ending work. After that, you’ll find out that some things work, and some things don’t. And then, you have to also realize that you’re limited in what you can do and can’t do. And so I think that after that, you’re going to get to a phase to where now you’re mature enough to where you can identify and choose what you’re going to do because I feel like, at first, when I started–and when we start anything, we’re sort of running in every direction trying to do everything. And we thought we could do everything, and now we’ve learned a thing from this and seeing the measurements and everything, getting all the data. Now we’ve learned that there’s only so many things that we can do. And among these things, these work and these don’t. So then you really want to focus on what’s working and also what’s very efficient because I think a lot of companies like EuroKera have limited resources for marketing. And so you really want to focus the efforts of your team on what’s efficient. And also, now with these great tools like automation and all that, you have to also think, well, if you have customers all around the world and so many people to reach, what’s the most efficient way to do this? And how can softwares and automation help me to do this? So that’s also where you can definitely then, when you get to that stage, you can start thinking about all that. Danny:Yeah, no, that makes sense. I really enjoyed our conversation on this. Is there anything else you want to add, throw in there? We’ve covered quite a few topics. Mathias:Yeah, I think we did. No, I’m fine; nothing to add. Thank you for the opportunity to talk with you today. Danny:Well, thanks for coming on. If anybody would have any questions, want to reach you afterwards, what’s the best way of getting in touch? Mathias:You can reach me through the website. So if you go on www.eurokera.com, there’s a contact form. And you can here put a title, and your name, SageIndustrial, to your contact form, put that as a title, and I’ll get in touch with you. Danny:Awesome. That’d be great. And I really love the–what was the phrase you said? “Do…?” Mathias:Do the basics, but do them brilliantly. Danny:“Do the basics, but do them brilliantly.” Mathias:I love this quote. Yeah, somebody–it’s a lady that I had the pleasure to work with who told me that once, and I thought that was the best quote I ever heard, especially when you apply it to B2B marketing. Danny:Awesome. Thanks again. This was awesome. Mathias:No problem. Danny:This was really great. So yeah, another really awesome and great episode here with Mathias here from EuroKera. So a lot of takeaways here. I think the biggest thing is really just, like Mathias mentioned, I’m going to quote, really focus on the basics, but do them brilliantly. I love, love, love that quote. So I think a big challenge we have as marketers is to be able to say, hey, look, we’ve got all of these things we can do, especially in digital marketing. You look at your marketing stack, you’re like, oh, we can do this. We can do this. Before you know it, you’ve got 30 different technologies, and they’re making you scattered all over the place. Focus on the basics, and really do that. So a lot here, a lot to unpack. I hope you enjoyed this episode. I know I did. If you have any questions, we’d love to answer them. You can send them to us at IndustrialSage.com/questions, and be sure to share this and like this and put this all over the place on the social medias. If you’re listening on iTunes, we’d love a review, if you feel so compelled to do that. And until next time, I’m Danny Gonzales, and this is IndustrialSage.
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| Circuitronix: Eric Shumway, On Migrating to Digital Marketing As a Manufacturer | 17 janv. 2021 | 00:30:00 | |
Like other manufacturers, Eric was initially skeptical about migrating Circuitronix to digital marketing… but tangible results won him over!
Danny:
All right, let’s jump in today’s episode, we have Eric Shumway from Circuitronix all the way from Mesa, Arizona. Eric, thank you so much for coming here, he’s the VP of Sales and Marketing if I didn’t say that. Thank you for joining us. Eric:Welcome, happy to be here. Danny:How is it in Arizona, probably a little bit warmer than it is here in Atlanta. Eric:Right now it’s actually beautiful, I think we’re at the very end of what’s considered nice weather, and so we’re all getting ready for the typical Arizona summers. Danny:Oh, that’s awesome, it sounds great. I know we’re excited for the warmth over here in Atlanta, ourselves. So, for those who aren’t familiar with Circuitronix, give us a little background about who you guys are and what you manufacture. Eric:Okay, Circuitronix is a printed circuit board manufacturer, we have three primary factories in Asia and are in the process of bringing on a fourth, that build should be done by the end of the year or early next year in India. In addition, we have two sister companies in Mexico called Wattera and Chrom, and those factories produce injection-molded plastics and chrome-plated or PBD-plated plastics. Danny:Gotcha, all right. So, let’s talk a little bit about sales and marketing, we were having a little bit of a conversation before, and you were telling me that, well I actually would just love for you to share your story on how, some of this pivot that you guys are making just in terms of going a little bit more digital, tell me, just share with me what that move is, and why you decided to do that. Eric:Sure, no problem, let me kind of preface this a little bit, I’m an old-school guy, my degree was in sales and sales management, and I came up through a time where pretty much everyone was focused on that door-to-door, that business to business selling cycle, and you went and knocked on doors, and you sat in front of people, and that’s really how things were done. That kind of migrated through direct mail and other aspects, but really it was largely the same, until the advent of social media, the web explosion, all of these things, and for me, admittedly, I may have been a little bit slower on the uptake, and didn’t see the total value in digital marketing, but that has become really, really evident that the importance of the digital marketing, the platforms that, the efforts that are being made, cause in reality, we’re able to cast a much wider net, and capture people that we may have otherwise missed. But there’s a whole other aspect to this that we’ve begun to tap into, and that is the realization that many of these next generation engineers, next generation purchasing people, they’re quite frankly from my children’s era, and they do things very differently. They don’t have the same mentality in the way of where they get their information for, for instance, engineering contacts, they’re probably not more likely to go onto a Thomas Guide, not to disparage Thomas Guide, it’s been a great tool, but what we’re finding is that many of these next generation engineers purchasing quality, they’re spending a lot more of their effort and their time on the internet, they find their information there, they can Google it, they can go to Alibaba if they’re in Asia, any number of those platforms, and so without having really tapped in, not just doing things like search engine optimization, but looking at other platforms like LinkedIn or, as I mentioned, Google and Alibaba, you’re really missing the point, and so for us, we’ve migrated pretty heavily to a digital marketing platform, and to the point where we’ve begun hiring young, fresh out of college marketing people because that’s their mindset, that’s what they’re thinking about. Danny:Yeah, you’re 100% dead-on. I’m curious, you said you’ve migrated to a digital marketing platform, what specifically are you using? Eric:We’re pretty heavily invested into LinkedIn, specifically we utilize their sales navigator platform, and then couple that with the more traditional search engine optimization, identify keywords, AdWords, things that people are going to be looking at on the internet, and marrying those two together so that we get the best play, the best coverage, people are seeing us where they need to see us but they can also interact and respond accordingly. Danny:Yeah, absolutely, so I mean, when time-wise, when did you start doing that? Eric:It’s really been primarily in the last five or six months. Recognition that we needed to do something, but really fully engaging in that has been relatively recent. Danny:That’s great, so all right, what was the, was there a particular catalyst or something that basically said you know what, we’ve been thinking about this, we’ve been wanting to do it, and we just need to do it, was there a particular moment or event that happened? Eric:Kind of, part of that was that we were looking at different ways of rebranding our company, we started in 2001, we’re in a very traditional business environment of printed circuit boards and plastics, these are not new, exciting, sexy products. And so we looked and said what can we do to set ourselves apart, what we kept coming back to was, we need to think younger, we need to act like this next generation, and so about that time, we started looking at new marketing people that we could bring into the organization, and the owner of our company, he was the one who said we ought to look at these fresh college graduates, it was not necessarily one aha moment, through various points as we looked at how do we maximize the web, that was part of that moment. For me, though, it really came as I started talking with the younger generation, I have a son that’s in college, and was studying graphic design, he had friends, and we would talk, and then I started looking for additional marketing people to add to our company, and as we did that we looked at, do we add someone that’s got a lot of experience that knows our world, or maybe we want to look at this a little bit differently, and what we decided is, we wanted to look at this differently. We didn’t want to be just like everyone else, and doing that, the differently meant, instead of looking for old, seasoned people, we started looking at these young, fresh college graduates who were, they were used to things that were different, they didn’t view television the same way as I did, they didn’t watch their movies the same way, most of them were looking at their phones, and we started to think, although this is a very old, boring industry, not real sexy, plastics and printed circuit boards, our next generation of designers, our next generation of purchasing people and quality and engineers, these guys are young, these ladies are young, they’re getting their information differently than we’re accustomed to putting it out there. So that was really the impetus, that was the drive to find these younger, more innovative thinkers, and in doing that we’ve kind of shifted more of our moneys and our efforts into this digital marketing platform. Danny:It’s great, so all right, big question, you’re about five to six months in I think you were saying, so how’s it going? Eric:It’s going well, actually. One of the things that we’ve looked at to kind of identify if these metrics are working, is our LinkedIn engagement. And in just the last couple of months, we’ve seen the engagement on our LinkedIn pages increase by over 200%. We’re getting a lot more outreach or direct inreach, I should say, where people are responding to things as simple as little memes, we created a little contest within our company, because we wanted not only to have more content, but we wanted to engage more people in our company, and so such a simple little thing as this little one picture meme has generated a significant amount of interest by people that say that was funny or that was cute, I liked that, and all of a sudden they’re now looking at our page and then that drives them to our website, and before you know it you have a deeper and broader reach. Danny:Yeah absolutely, you know it’s interesting, we talk about this on the show a good bit, there was a big study that came out in 2015, that Google did, actually, and it was talking about how the average B2B buyer was at that point, this was four years ago now, or three to four depending on when in 2015 it was taken, but that the, it was nearly at that point, nearly 50% of the buyers or influencers in a B2B purchase were millennial. Obviously that has changed, it’s going to only increase obviously, and we now can only assume that it’s more than 50%, but Caterpillar actually took that and kind of ran with it and changed their whole go-to marketing strategy where it was a little bit more human-driven, and I think the story you’re sharing there, the whole meme piece, that you weren’t, I haven’t seen it, but I’m assuming you weren’t selling Circuitronix, you weren’t saying hey come buy from us. It was something that was a little bit more of, we’re just going to share something from us, we think it’s funny, whatever. Create a little bit of a relationship, and then go that way, and I think that is where a lot of manufacturers have to start thinking about things differently, and I think, sounds like you guys are doing a great job with it, that it can’t always be, and it shouldn’t be, sell sell sell, buy here, feature function, here’s all these things, the content has to be, really, we’re selling, even though it’s B2B, we’re selling to another human being. Eric:I think your point is spot-on. This was part of the discussion that we had within our senior management, is there were people that said “Look, that may work for a small company, but it’s not going to work for these big companies that we work with,” and my comment back was, “Why not?” Those big companies are made of people, and people respond to the same message whether it’s a small company or a big company, these are still people. Danny:Yeah, 100%, so another follow-up question then with that, you mentioned something that a lot of companies run into is that change management or organizational buy-in, sounds like there’s a little bit of a push-back there. How have you navigated that? Eric:I think like anything, you have to be able to show what your path looks like, this is what we’re going to do, this is the expectation of what that will yield, and there has to be an end line that says, at least based on this time period, we expected to get this kind of result, did we get it? Is there a return on that investment? I think best business practices still hold true, you can’t just throw good money after bad if it’s not working, but in this instance, in almost every way you have the ability to track it in some things on a daily basis, but certainly weekly, monthly, quarterly, you can look and see, have we seen an increase in the engagement, does that increase in the engagement then lead to further more leads, or the right kind of leads, are we closing more sales, all of these things interact, and you can see pretty quickly, are we seeing the success from this that we anticipated? Danny:Totally makes sense, so in order to be able to sort of show that closed loop, are you guys tying everything into a CRM or is it, how are you looking to see, okay we generated this interest, they’re coming to the website, and so on and so forth? Eric:We are, I wish that I could tell you that we had a phenomenal platform that was well-established before, this has kind of come hand in hand as we develop more of the digital platform, we’ve also been developing our CRM tie. But yes, with the new technologies that are available through almost all of the CRM platforms, you can literally tie your marketing efforts into the CRM, you can see what the response is, you can identify, are these now warm leads or are they just suspects that are tire kicking, and spend a lot less time trying to qualify these leads, as they’re coming in more qualified to start. We’ve done a few other things, like video outreach, your show’s a prime example of how we can utilize technology, but there are other ways, rather than just generating a quote, tossing it over a fence, and then a day or two later calling and hey let’s talk about this, we’ve been able to utilize some additional platforms that let us record a short little video and walk someone through a quotation or presentation, and send it to them and now we don’t have to wonder, did they get it or did they look at it, because the score actually, it links right back to us and we can say, hey they opened that at 11:33 and they spent 14 minutes looking at it and three of those were on page four. That’s the level of technology that’s available to us, and it’s all part of that digital marketing platform. Danny:Yeah, and now I’m super geeking out, I’m curious, so what did you use for the video messaging? Eric:We actually use a couple different things, one, there’s a technology called Loom that I think is excellent, you can get it in a free version, but with the paid version you get a little bit more functionality. Other things like Zoom, I think they’re all playing off each other, but Zoom is a web-based person-to-person teleconferencing with video, you can use that to record videos or give presentations, record it and then link that, and all of them can be linked with LinkedIn Sales Navigator where you can actually take your recordings, send them out in a PointDrive email, which then again does that linking. As they open the link you can identify who’s opened it, was it forwarded to someone else, now I’ve expanded that network, I’m identifying who’s important within an organization, and we’re able to drive deeper into each of these organizations, and quite frankly find the right people, so that we’re not spending a lot of time just hunting, we’re really working and nurturing and developing these relationships. Danny:Absolutely, so all right, so Loom, you said, L-O-O-M instead of Zoom, that’s interesting, I’ve not heard of that one, I’m very familiar with, there’s a couple other ones, but I know that’s kind of growing, that’s awesome, that’s exciting, because yeah, and I imagine depending on how it’s delivered, that I imagine the response rate’s much higher, I’m guessing, that’s what we’ve seen on our side cause we use it a lot, but yeah. Eric:For sure, and you know again, how have things been done in the past? Compare that to where we’re going in the future, and just the ability to take a simple presentation, I may decide that there’s, based on a conversation you and I had, there are three or four key elements in that presentation. If I just emailed it to you, you don’t know unless I’ve highlighted them and maybe then it still kind of just slips on by. But if we actually take a minute to create a three minute video, and I say “I just want to point out these three things, they’re the most important that we talked about.” Well now there’s no question, I’ve identified it, you’ve seen it, and I can see when you engaged with it. Those are the things that are kind of that next level digital marketing, but it’s not just marketing, I mean it’s really a total engagement. Danny:Yeah absolutely, and I love it too, and the other piece, I think, too, with the video element, it’s definitely differentiated, but I think the other piece is, it’s back to that human element, cause you’re able to make a connection, instead of, versus I’m just going to send you this thing, and you get an email or whatever that’s whatever text, and okay, maybe there’s a picture there, but now it’s like oh wow, there’s Eric, oh, okay, this is what. It just creates a little bit more of a connection. Eric:That may be bad, I’m not sure. Maybe you don’t want to see my face on there, but, I mean the reality is, you’re right, it is a very personal thing, it’s now taken it from some nebulous, I’ve got another email, and maybe I look at it or not, to oh, here’s someone that actually cares about me, they want to spend a little bit more time, we’re connecting at a different level. Danny:No, I love it, that’s great. I love hearing these stories, and all the innovations and just hearing how you said hey, we want to start doing this, and just kind of trying out different things and seeing what works, that’s awesome. Eric:And we did, I would tell you, it was a trial and error, tried a few different things, we identified what we shouldn’t do more than what we should initially, but in doing that it was, not only was it kind of fun, but we really did kind of create best practices for our company and, like everything that’s new, it will continue to evolve and enhance and we’ll figure out how to make it more effective. Danny:Yeah, absolutely, that’s great, just, congratulations on that, because that can be, that’s a big challenge, a lot of people, a lot of other companies can have, whether it’s that change in management issue or just fear of I don’t know, I don’t understand how this works, going and doing video and recording that, that kind of takes another level, people are like, “Ah, I don’t want to see myself on camera.” Eric:You know, I should get a royalty from all these companies, but I’m not. Another one that I thought was really cool was BrainShark, and it was one of the impetuses for the video, is that they had been pitching us on, “Hey, you need our platform to develop training modules,” and whatever these selling modules, and so we looked at it and then they sent back a video with what we had talked about, and showed us how easy it would be to create these modules in their platform, and they are, and each one of these that are out there have done a good job of identifying their strengths, but that idea, that was kind of the genesis, hey, maybe we can apply this, this is this technology company, but we’re a technology company in the print circuit board world, why aren’t we doing some of these next-gen ideas? And those were the things that kind of helped move us forward, and then as we would go to these younger marketing people in our company and say, “Hey, are you familiar with this?” They were like “Duh, yeah, we’ve been doing that for a long time.” It just all kind of made sense. Danny:That’s funny, that’s awesome, that’s great. So what is the next, what’s the future look like for Circuitronix? Eric:You know, it’s funny, as things become new they go old, we’re finding that by tapping into these newer ways of marketing, it’s driving our engagement with the customer, and so we’re spending a lot of time back in front of the customer, we’re doing things that most of us had decided was passe, trade shows. I had grown to the point where I hated trade shows, I couldn’t see any value in them because, here we spend all this money and time away from our actual effort, and hope that someone’s going to come and see us. But with this direct response marketing that we’re doing and these outreaches, what we’re finding is that we put the front-end effort in, and then we go to a trade show and we’re busy the entire time, and the right people are coming to see us, and here we are engaging face to face, like the old days, and so you ask what’s the real thing, well it’s marrying all of these, it’s not any one of them, it’s all of them. But how you interplay those, that’s the key. Danny:I love what you just said there, so a couple big things there, we, it’s out of arm’s reach now, but we have, we did our insights report, we talk about a lot on the show, we talked to over 156 manufacturers about their sales and marketing trends for 2019, and what was working and what wasn’t, and an interesting fact was that trade shows was the number one lead gen tactic by far, everyone said yes, but they were also saying, 53% if not more were saying yeah, we’re having a decline in leads, and I think what you just said just hits the nail on the head, and I think a lot of companies can resonate with that saying, “Man, what are we getting out of trade shows,” and I think it’s… you’ve got to flip it around a little bit, and it’s a great opportunity, but I think what a lot of people, a lot of companies miss, is that you said there’s a lot of upfront work, so I think the idea, oh, trade show, we set up a booth, here’s our banner, maybe there’s a video, whatever, people are going to come to us and whatever. You actually got to work it ahead of time, you know? you’ve got to work ahead of time, during, and after, and we’ve got some great articles and stuff on that but I think that what you’re, you just totally hit the nail on the head, you’ve got to cultivate it and get people excited and get in there. Eric:We did Electronica, I don’t know if you’re familiar with that show, it’s one of the largest trade shows in the world, it’s in Germany. And our organization in Germany and all throughout Europe prior to that show, spent probably six to eight weeks of doing very direct outreach and even to the point of setting up predetermined meetings, and the vice president of our European sales was literally every day in meetings, almost from the very beginning of the show to the end of the show, and we had more success as a result of that, than any show we’ve ever done. Danny:Yeah, and I get it 100%, it makes sense, let’s unpack that for a second. We look at it, it’s really cultivating the land if you will, getting everything ready and then everyone’s there, and you know you go to a trade show, and you get there, you’re like “Oh my gosh, I’m overwhelmed, there’s so many things. Where should I go?” You’re creating that purpose, and you’re able to talk to so many different people within a finite time, and that makes 100% sense to me, why that would be very successful for you, that’s awesome, congratulations. Eric:Thank you, we appreciate that. Danny:So everyone else who’s listening or watching IndustrialSage, take note, we’ve talked about this time and time again, listen to what Circuitronix is doing, it just makes sense, utilizing this new technology paired with what we have done in the past, it doesn’t mean that what is done in the past you completely throw away, no, not at all. Eric:There’s a reason it worked. All of these things will work, but much like any effort, if you’re not going to do it consistently, if you don’t continue to put the effort in, and figure out how they work together, then you’re like driving a car on two cylinders. Yeah, it’ll move, and you’ll get somewhere, but it’s not going to be in the most efficient way, you’re not going to get where you want to be as fast as you could, it’s when you couple all of these things together, you’re then running on eight cylinders, you’re going to move quickly, you’re going to get exactly where you want to be, but you have to do it all the time. you’ve got to keep putting gas in the car, you don’t just go forward for a little while and then stall, and then try to do it again, it’s got to be consistent, and when you start doing it in a consistent manner, and with all of the pieces together, that’s when you’re going to see the most bang for your buck and the best results. Danny:Love it, I couldn’t have said it any better. There you go, that’s it right there, that consistency, you just got to do it, and you’ve got to keep doing it. Eric, I really appreciate this time here, this has been really valuable, I’ve really enjoyed our conversation, just learning about you guys, your story, and where you’re going with it, and I love it, I’m super pumped to hear that you guys are doing video messages and all that stuff, that’s next level, that’s awesome, congratulations. So thank you again, do you have any parting words for our audience, of encouragement or advice that you might give? Eric:You know what, I will say, when we first started talking, I was not as familiar with IndustrialSage, and this is a little plug back with you guys, I’ve spent a lot of time on your website, and for professionals in the field like I am, I think that this is a great place to view and to look at, but also, just, you get a lot of, how would I say, value from other people that are trying to do what you’re doing. And if what I said can help someone, fantastic. Danny:Absolutely, that’s the name of the game. Thank you, thank you very much for that validation and the kind words, that’s what we’re trying to do here. Well, Eric, we could probably go on and on for hours and hours, but for those, if they have any questions, like to learn more about you, what’s the best way, I don’t know if you’re on, well obviously you’re on LinkedIn, so we could probably start there. Eric:Eric Shumway, also you can, if you’re into printed circuit boards or injection-molded plastics, you can email me at Eric.shumway@circuitronix.com, and that’s Circuitronix with an X. Or, look at our website, Circuitronix.com. Love to have you visit. Danny:Awesome, Eric, thank you again so much, we really appreciate it. Eric:You’re welcome. Danny:All right, okay, so look, another great episode, I love it, there are a lot of things I love about this, one is, I think just the whole story about saying, we need to make this change, and let’s try it, and let’s not do all the things super big, and let’s test some things, and I think Eric said, a really key thing for me was that he said “You know, we discovered a lot of things that we shouldn’t do, and we learned some best practices,” and what I love next is that they kept going. They didn’t say, “Ah, this didn’t work, let’s try this one thing, and this didn’t work, and oh, man, it works for everybody else but not for us.” But they kept at it, they made sure that they wanted to make, they wanted to look at what KPIs and different things they wanted to get out of it, so they could prove out that ROI, and they’re showing to be very successful, they’re showing to be innovative, they’re showing to not be fearful of things, the fact that they’re making videos and going on, I know that’s not super comfortable for everybody, but that is really where you need to be thinking, in the sense of being able to be differentiated and get your message out there. So, just take Eric’s words, put it to practice, I know you’re going to get a lot of value out of it, and that’s all I’ve got for you. So if you have any questions, we’d love to answer them for you on IndustrialSage.com/questions, put them in there, we’ll answer them for you, if you are listening on iTunes or Stitch or any other podcast, we’d love a rating, social media, hey, share the love, and last but not least, if you’re not on our email list, you need to be, so go to IndustrialSage.com. And why do you want to do that, you want to be a subscriber, why do you want to get the email, cause there’s a lot of awesome content, just like Eric was talking about, we’re sending stuff to you all the time, not spammy, but it’s really valuable resources like this awesome interview with Eric here. And there’s a lot of other content that you don’t get, listening through iTunes and podcasts and seeing even on social media, so do that, do yourself a favor, you’re going to love it, and I’m done, I’m going to stop yapping, and I will catch you next week, I’m Danny with IndustrialSage, thanks for watching.
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| Databox: Brian Moseley, on Best Practices for Building a Martech Stack | 11 janv. 2021 | 00:24:20 | |
Brian Moseley of Databox shares about the exponential boom in marketing software available, and best practices when building your own Martech stack.
Danny:
Alright, so let’s jump into this episode. We have Brian Moseley from Databox who’s joining us today. Brian, hey, thank you so much for coming and joining us. For those who don’t know you, if you could just introduce yourself to the audience, tell us a little about your background, who you are, what you’re doing at Databox. Brian:Sure, my name is Brian Moseley. I live in sunny Boston, Massachusetts. And I’ve been in Martech now for a little over five years. I started working at a marketing agency, and that led me to working for the marketing automation software company called HubSpot. Danny:Small company– yeah, sorry. Brian:Well, ironically, we were a small company when I started. That was back in 2013; we had about 500 employees. I went through the IPO with them. So I was on the agency side doing sales and onboarding new agency partners. Then, I had a sales manager role for a year, and that led me to follow a mentor of mine, Pete Caputa, over to become the CEO of Databox. So when Pete took over this last January in 2017, I came over as director of sales, and coming up on my two-year anniversary there. So it’s been a pretty good ride. Danny:That’s awesome. That’s great. So actually, for those who aren’t familiar a little bit with Databox, what exactly do you guys do? Brian:So we’re a data visualization tool. There’s a lot of us out there. There’s probably two dozen that I could recommend in good faith that are great tools. And the thing we do which is similar to every other tool is we take data from a lot of different places and consolidate it into a slick-looking, consistent dashboard. Danny:Great. I’m curious about this. Are you guys exclusive to marketing or just all things data? Or is there a particular niche you’re trying to focus on? Brian:That’s a great question. So every company should be focusing on some niche or vertical or ecosystem in some way, shape, or form. Otherwise–you can never be all things to all people. So I think a mistake that a lot of these data visualization companies in this space are making is that they try to go too wide. The playbook four or five years ago in this space was, let’s connect to everything that’s possible. And as we all know, the world has finite resources, and it’s impossible to invest in and support hundreds and hundreds of APIs. You can do it, but you won’t go deep into any one, and it leaves your customers wanting more complete integrations with fewer apps rather than trying to connect to hundreds of apps. So Databox does focus on marketing and sales technology stacks. Again, there’s other companies that focus on Martech and sales tech stacks as well. But that’s our ecosystem. Danny:Perfect. No, great. I was just curious about that, yeah, because data obviously is a big thing across the board, and there’s a lot of data out there. So great to know. So when we were talking before a little bit, before we started here, on a call previously, a little bit about the Martech stack. And for those in our audience, it’s new, when we talk about Martech stacks, we’re talking about basically all the different marketing technologies that you might have, whether it’s a HubSpot or using Databox or using Zapier, whatever, the 800– I don’t know how many there are now. I don’t know how many hundreds of thousands of SaaS companies there are. Taking all of those and then putting them together to be able to say, okay, well we want to be able to do ads, and we want this to lead into email marketing, and we want that to– And we want to be able to do retargeting, all this good stuff. Sometimes there can be a little bit of a problem. And so one of those things was that we talked about what happens when your Martech stack just goes wild, Martech gone wild? We were joking around with some stories and things about that. But I think it really resonates. It’s a real thing. Tell me a little bit about your experience with Martech gone wild and what you’ve heard from other customers that, I’m sure, doesn’t happen to anybody else. Brian:So 10 years ago, the only thing you had to check for digital marketing was Google Analytics. I cared about, how was I ranking? Did I get more people to my website this month than last month? So it was really easy. But Google Analytics has become really complex, and I mean that in a good way. But being complex, it also allows people to not focus as well on one thing. So now, 10 years later, now we’ve got Salesforce and HubSpot CRMs. You’ve got your email system, whether you’re using Mailchimp or ActiveCampaign or HubSpot. Now, you’ve got chatbots like Drift. Now, you’ve got conversational marketing. And then, you’re running Google ads and Facebook ads. The thing I learned at HubSpot was all marketers feel that 50% of their marketing isn’t working, but they don’t know which 50%. And now that there’s a lot more tools out there and a lot more channels out there, organic social media, paid social media, the list goes on and on. So just like I said, you can’t be all things to all people, you can’t do everything, especially if you’re a relatively smaller marketing team, six or less people. So you’ve got to stick to your guns, and you’ve got to stick to what’s working. Typically, a content strategy is really good. A promotional strategy around social is really good. And then, maybe one other thing that you’re taking a flyer on, like something that you’re testing. Maybe you’re testing video or chat or conversational marketing. My advice is, you can’t do everything, so focus on three things. Find what’s working, and try to really simplify your life because the more you make things complex, the less you’re able to prioritize. And that’ll really kill a marketing team’s resources. Danny:Absolutely, and I love the stat about 50%, just trying to figure out what that is. It’s kind of paradoxical, if I’m using that word right, in the sense that you go from, maybe if you’re transitioning over from a traditional sense of marketing over to digital– we’re doing that because we can measure, and it’s amazing. But then, it’s almost like you go way overboard, and you’re like, there’s so much that we’re measuring that we’re not even measuring what we’re measuring. It’s next level. It’s Inception right there. Brian:It is. Yeah, if you were just measuring lead form fills or goal completions in Google Analytics, life would be great. The nice thing about HubSpot, if you’re using it, is they do a great job of measuring three KPIs: visits, leads, customers. And if you want to add two more bonus KPIs, it’s the conversion rates between all those, so the visitor to lead conversion rate and the lead to customer conversion rate. If you’re a B2B company in manufacturing or industrial, really those are the five metrics you should be tracking, and everything else should be feeder metrics into those top five metrics. So there’s this concept that we didn’t invent, but it’s in our methodology. It was invented by Franklin Covey, actually, back in the ’90s. And it’s relevant now more than ever in the digital age. It’s called the Four Disciplines of Execution. And the methodology describes two different types of indicators or metrics: leading indicators and lagging indicators. The best example I can give is the simple sales one. In sales, you have to make 50 phone calls to book a meeting. And then, you have to have 10 meetings to book an appointment, and then, 10 appointments to sell a deal. Everybody understands that funnel. So the calls and the meetings and the appointments, those are all leading indicators, and the lagging indicator is– they call it a lagging indicator because once you see it, it’s already gone; you can’t change it. So that’s your monthly sales. But that applies to marketing also. So how many blog posts you create, that’s a leading indicator. How much traffic comes out the other end, that’s a lagging indicator. So what I think a lot of marketers are missing is this ability to think in that way that we’ve got these few, very critical activities that we can do that are going to lead to this outcome of more marketing-qualified leads for my sales team. So I challenge marketers all the time and say, what are your three things, what are the three levers you can pull to actually influence that MQL number? Is it the number of blog posts? Is it how long the blog posts are? Is it how many times you’ve posted on LinkedIn? What are your weapons, and what are your leading indicators that are going to help you tackle your lag? Danny:Absolutely, and it makes sense. And I absolutely love that, especially with the analogy too with sales over to marketing because, again, a lot of our audience sometimes is very transactional, so that’s one thing. But then, the other piece is that sometimes it’s like, well, marketing over here, it’s just flyers and things. No, the reality of it is, if there’s a funnel and it’s a real deal, and you mentioned a great acronym, MQLs right there. So for those who might not be familiar with that, we’re talking about marketing qualified leads. So really, we’re marketing them, we’re building awareness about us and our services and how we can help solve those challenges. And once they’re ready, they become SQ, they would go to that sales qualified lead. Okay, we know that they’ve got the budget, the authority, the timing, the need. Not everybody that’s going to come to our website necessarily is qualified, and we want to sell to them. I love it. And actually, you said Franklin Covey. It was the four disciplines– can you say that again? Sorry. Brian:Yeah, it’s the Four Disciplines of Execution. There’s a whole book on it, which I read, and I got a lot of value from. But all you really need to know is wrapped up in a five-minute YouTube clip just called The Four Disciplines of Execution. It’s a really great intro into the methodology. Danny:Perfect, and that’s awesome. Alright, I’ll take a look at that. Thanks for sharing that. That’s great. So what would you–there’s a couple things in there you said that I think– not a couple; there’s a lot you said that was great. But one thing in particular that I was latching on is, I’ll ask you the same question but in two different ways, depending on where we see a lot of our audience that’ll come from. One, for those that are just starting– it’s funny; we hear the whole Google Analytics thing where, oh, we’re doing this, and we’re trying to figure out SEO, all that stuff. But for those that are saying, hey, we’re just starting, and we just want to go into the– what would you recommend from a Martech stack? You touched on it there. What are those big things that– concretely, what does that look like? Brian:Yeah, so it depends on the size of your company. But there’s some really great free tools out there. SaaS companies have been forced to become far more generous in their free offering because there are so many options out there. So it’s this capitalist point of view that more options means more choice and a better product. So tools I love: Google Search Console is free. I don’t know how many people know about it, but if you are looking to get into basic SEO, and you don’t outsource that, and you really want to understand keyword rankings, Google Search Console is a great thing to read up on. There’s some awesome short YouTube videos. You can get certified and become an expert in a couple of weeks. Mailchimp is one probably everybody’s heard of. They’re an awesome way to send out email and communicate with your clients. And then, there’s two other ones that I would recommend. If you’re not already using a CRM, I would recommend HubSpot Free CRM. It’s a great way to close the loop. A really difficult thing for marketers is closing the loop and getting that back from sales of, hey, these three leads are awesome, but this one isn’t great. So let’s get more of these three because all three of those closed. We call that closing the loop, and if your sales team isn’t closing the loop, or if you’re not making it really easy for them to close the loop, a CRM, especially a free one like HubSpot, is a great way to start. And then I would recommend, if you’re looking to– I think everybody can benefit from conversational marketing these days, direct offers of a free plan which allows people to communicate with a bot on your site or communicate with one of your internal customer service people or salespeople. I get a ton of meetings every month booked from our pricing page. It’s one of our best sources of qualified leads. People are on your site; they have a question that you can answer now. Do you really want them filling out a form and then hoping that your sales rep gets back to them? Maybe not. What if they can help qualify that lead directly on the website? So that would be my top five free marketing stack. Danny:Awesome, no, I love it. It’s funny because you mentioned chatbots on there. It was one of our things we put out for early 2018, the big things you’re going to see coming out here. And I think it’s absolutely awesome from multiple areas. But all those things, some great free tools, so thanks for that. Now, I’m going to ask that question a little bit differently now. Alright, for some of those– let’s go back to those who, they’re on this train. They love it, and they’re like, okay, we need all the things, and here’s our Martech stack, and here’s–and then, they’re like, wait a minute. What are we even doing? Is this even valuable? How do you diagnose that situation? What advice would you give to somebody to say, okay, how do we evaluate what is important and what isn’t? Brian:Yeah, so I had a company say that exact thing to me, and what they did is they did a SaaS showdown where they literally took a whiteboard, and they had a bracket like NCAA college basketball. And they put these 17 different tools that they’re using. It was like SEMrush versus Drift, and they laid it all out. And they wrote down how much they were paying for it and how much it was saving them time. That’s a good way to figure out, evaluate your stack is just do a competition and invite your team and see who protests the most. The thing I’ll say about software, I have to educate people a lot on how to buy software. The way I think about buying software is more like you’re hiring a person. And you can hire software, and you can definitely fire software if it’s not doing the job. I think a lot of people expect software to come in and solve their problem, but that’s not how I look at it. If you have an existing process built out that you’re doing, and that process is tight, and it’s repeatable, then and only then should you be evaluating software to come in and automate it. But if you don’t really have a great process built out already, I wouldn’t look to software to solve your problem. The best example I can use is inbound marketing. If you’re creating blog posts, publishing them to WordPress, sending them out in Mailchimp, publishing landing pages in Leadpages, building forms in whatever you’re building forms in, if you’re doing all of those things already, then HubSpot makes a ton of sense. But if you’re not already doing inbound marketing or you haven’t already committed to it, it’s like a gym membership. It’s not going to solve all your problems. So I would, if you’re trying to figure out what in your tech stack makes the most sense, I would think, okay, what do we have good processes around, and which softwares are we using that are actually automated, and if we actually took those away, and we had to go back to doing things manually, would that be bad? Would it be really, really bad? If it’s not really, really bad, you can probably cut that tool. Danny:Yeah. No, I love about the… how to go buy software, make sure we do this right because that is– you’re absolutely right, 100%. If there’s no process around there, I hear this all the time. Hey, we’ve got HubSpot, or we’ve got Pardot. We’ve got Marketo, whatever. Marketing automation, it’s automated. We just do it and then, all of a sudden our marketing is there. It’s done for us marketing because that’s what it is. It’s marketing automation. I go, not exactly. We hear the same thing with Salesforce, integrating CRM or anything like that. Those are some really great stuff. Brian:You only get out of it what you put into it, and you’ve got to really plan out your attack. And that’s why sales people can be very helpful in that. I think salespeople get a bad rap a lot of the times in SaaS. They think that they’re trying to sell you the dream, but in all actuality, I think a really good sales person at Marketo or Pardot or HubSpot, I think what they’re trying to do is assess your current process, evaluate it, and then help you figure out how to fix your problem. And maybe it includes their tool, and maybe not. And hopefully they’re honest enough to tell you that and be transparent about it. Danny:No, absolutely. That, again, totally makes a lot of sense. Okay, so wrapping up a little bit– actually, one of the things that we get asked quite a bit is, with so many different platforms out there, and there’s so many different technologies you may be using. It’s funny; it’s like you get this one. This is 80% of what we need is right here. But then, now it takes another 10 platforms to fill up that next 15%. And that five, you’re just like, ugh, we’re not quite there. But one of the really big challenges we see is, okay, great, we’ve got all these different things. Golly, how do we measure that and look at, is it really achieving the goals that we were trying to get after? How do we generate reports? Where I’m leading is, I’m seeing some data visualization tools might be a little valuable to do that. What does that look like on your end? Brian:Yeah, so again, taking a step back from software, step one is: fix your process. I see a lot of reports, as you can imagine. People are sending me their reports. I probably see 50 a month. And they say, here’s my report; it’s a headache. It’s a bunch of PowerPoint; it’s 40 slides. I say, how do you build it? And they say, we go into Google Analytics, and we take three screen shots. And we go into this, we go into this, and we put all these screenshots into a PowerPoint, and we present it to our boss. And we’re really excited. The boss flips through it and says, okay. My eyes glaze over; and then, they hand it back to us and say, what am I looking at? The problem there is, the human brain is not built to analyze 40 to 50 to 100 metrics in a PowerPoint. That’s not right. And the question I ask people is, realistically, as the marketing team and the resources that you have, are you realistically able to influence all 100 metrics on that PowerPoint? And then, I’ll pause, and they’ll say, no. I’ll say, okay, then why are we– what does it matter, then? Let’s simplify; let’s cut. Let’s pick 5 to 10 key company goals or marketing objectives or initiatives that you’re trying to influence, and let’s put a number to it. The language is a SMART goal. It’s an acronym; it means specific, measurable, attainable, relevant, and time-limited. What are your SMART goals? Maybe it’s traffic. Maybe it’s leads. Maybe it’s sales. That should probably be in your top three. But then, maybe it’s Facebook ad impressions. Maybe it’s Google ad reach. Maybe it’s the number of organic traffic coming to the blog. Pick those top 10 metrics, and really focus on those. Buy a $300 TV off of Amazon; put it up in your marketing office, and then, find some free dashboard solution that you can connect all your sources into, put those top 10 metrics up on the screen, and then, set goals around them for the year. And then, break those goals down quarterly. Break those goals down monthly, so if it’s 12,000 visits for the year, that’s 1,000 sessions or visits a month. That’s really easy. Now and only now can I start saying, okay, how do I get to 1,000 every, single month? That’s a much easier question to answer than, how do I get more sales or whatever. Danny:Yeah, no, absolutely. It totally makes sense. Well, Brian, I really enjoyed our conversation. We talked about a lot of different things. Is there any other parting words you may have as we wrap this up? Brian:Measure the metrics that matter so that you can do the things that you want to do like getting off work early and going and spending time with your family. Danny:There you go. That’s awesome; that’s important. Brian, well, I really appreciate the time. For those who are watching this, we had a few technical difficulties before we started here, but we really appreciate your patience on this. If anybody has any questions, if they’d like to reach out and ask you any advice or questions or anything, what’s the best way of reaching you? Brian:I’m on Twitter @bmose14 or just come to the Databox website and hit me up in the Drift chat. I’m there all day. Danny:Awesome; that sounds great. So Brian, thanks again. We really appreciate it. And yeah, this has been awesome. Brian:Sounds good, Danny. Danny:Alright, thanks. Alright, so there we go. Another great episode with Brian Moseley from Databox and a lot of great takeaways. Listen, if you are just jumping into this and you’re trying to figure out your Martech stack, one of the big things that I took away was just keep it simple. And honestly, even if you’re already heavily invested in this and your Martech stack is huge, again, go back to the simple things. I can tell you, for 90% of you out there, you’re going to want to look at what Brian was talking about, looking at your traffic. Let’s look at your leads, your conversion. That’s really the big thing because it’s really, how are we going to fill up that pipeline, and what does that look like? More traffic to your website, and we can convert them better, and then, we can get them into leads. And let’s close the loop, like he said. Let’s figure out what our marketing activities are doing to actually really generate sales and really do that. So anyways, thanks again for watching. If you’re listening on iTunes, we’d love a review. If you’re on social media, share, like, comment, all that great stuff. If you have any questions, reach out to us at IndustrialSage.com/questions. We’d love to answer them for you. And thanks again for watching. I’m Danny Gonzales, and this is IndustrialSage.
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| MassRobotics: Tom Ryden | 03 janv. 2021 | 00:24:28 | |
Tom Ryden, Executive Director of MassRobotics, shares the story of how he got into robotics, and some of his career’s most pivotal moments.
Danny: Hello, and welcome to today’s IndustrialSage Executive Series. I am joined by Tom Ryden. He is the executive director of MassRobotics all the way up in Massachusetts. Tom, thank you so much for joining me today. I’m very excited to learn more about your organization. I’ve heard a lot about it and what’s going on. We’ve had some previous guests here. So just thank you so much for joining me today. Tom:Well, thanks for having me. Really excited to talk a little bit about MassRobotics and robotics in general. Danny:So real quick, if you could just give me a quick synopsis, a high level of MassRobotics. What do you guys do? Tom:Sure. So MassRobotics is an independent non-profit. Our mission is to support and grow the robotics, AI, IoT industry and really support it and see the adoption of this type of technology. Danny:Excellent. Well, there’s those– we all know that’s huge, lots of digital transformation happening right now relative to all those spaces. So I’m excited to learn more about your organization, what you guys are doing, how you guys are helping companies. But before we jump into that, I just want to get in to learn a little bit more about you, about Tom. So Tom, tell me, how did you get into this space? Tom:So I’ve actually been in robotics for a long time. I’ve been in automation, first with chemical automation, things like that, autosamplers, but got into robotics through an interesting story. A friend of mine had a small company doing ground robots and got an offer to be acquired by an up-and-coming young company at the time called ISR. So we chatted a little bit about it, and I was fascinated by this young company which turned out to be iRobot. And so they ended up acquiring his company. I ended up joining iRobot because I thought the mission, what they were trying to do was really fascinating. And I was there for a number of years and saw some great growth in that company and through the robotics that they developed and then, went on to start some other robotics companies. I sold my last company and was thinking about retiring, taking some time off, and a couple of folks from the industry came and said hey, we’re starting this new non-profit. Would you be interested in helping out? And that was five years ago, so I just have been doing it and loving it. It’s a great way to get exposed to so much different types of technology and really try to help these young companies get going. Danny:Yeah, no, that’s awesome. How did you get into robotics before that? Was it something that you studied? Was it something as a kid that you were interested in? What was that aha moment for you? Tom:Yeah, so my background is in engineering, electrical engineering initially. It was a unique way of– I love seeing things move and being able to make things move. And so I was not always in the kind of science fiction type of thing. One of the cofounders of iRobot, Helen, talks about her experiences when she was young and seeing the first robots coming out of some of the movies. That wasn’t really my background. I was just enjoying the mechanical… making things move… and then had an opportunity to do that and, from a young engineering, just enjoyed doing that type of robots. But when you actually get to make robots that physically move, and I ended up working on what are called bomb-disposal robots or robots that can go down-range and look at a device that might be a bomb or something and allow the operator to really stay far away and have the robot do that. When I learned, wow, that’s something that these robots can really do, it’s just a great way for this technology to be used. Danny:Yeah, that’s so interesting. It’s funny that you say, you mention that the idea of, from the movie standpoint of robots, that wasn’t– it was more from a mechanical thing. It reminds me of a funny little– my son, he’s seven, almost eight. He loves robots, all things robots. I even found him reading some industry magazines that I’ll have. He’ll be going through those. I think it’s super fascinating, although he does like all the movie stuff. He came down last night terrified about robots who were chasing him or something like that. Tom:One of the parts of our mission is STEM education because children genuinely love robots, and there’s so many great tools now that are available to get kids excited about a career in the sciences and engineering by using these robots and having them code them and make them move and make them do things, even starting down at a young age like your son, and we’re excited about that. Danny:Yeah, that’s super cool. That stuff, I’ll have to learn more about that because I know he would, and I think my daughters too, would enjoy that as well. But he, in particular, has definitely got a very engineering mind, wants to know how things work and gets very frustrated if he doesn’t know, wants to get driving in deeper. Anyways, I digress. So throughout your career, you mentioned you had sold a business before. So tell me a little bit about that. You mentioned you were involved with iRobot. Somewhere down the line, you started a business, then you sold it. What did that look like? Tom:Yeah, so I joined iRobot when they were fairly small, a bunch of engineers above a donut shop just outside of MIT, and stayed with them through the growth and then, through eventually the IPO. And then, after the IPO–I really enjoy the small company feeling. And it’s not that iRobot had changed. Colin Angle who is the CEO really did a good job of trying to keep that small culture, small business entrepreneurial culture. But I wanted to try something else, so I joined another friend from iRobot and another engineer from Polycom, and we started a company to design and build telepresence robots. And we ended up raising a significant amount of money from VCs. And that’s, in many respects, a blessing and a curse. I think it’s great to get that money. It allows you to design and develop the products. There’s also timelines, and one of the things that’s still a challenge with robots is the adoption, the rate of adoption. And so this was a robot that was meant to allow you to be in two places at once, allow you to have a physical presence and a robot be somewhere else, and you control it. And the adoption with that has been slow. It’s been growing over time, but not to the rate that a VC wanted to see. So they were encouraging us to find an exit. We sold to another robotics company, which was great, right in the area. And they continue to sell and manufacture that product. That was an interesting experience going through that. Danny:Yeah, definitely VCs and all the funding, it changes it a little bit or a lot of bit. And like you mentioned, there are definitely pros and cons for that. So I would say, and this is a question that I didn’t send before. For those who are listening or watching, surprise, we send questions ahead of time. That’s a given. But over your career, what have been some defining moments? Or what have been some–if there was one or two things that you could think off the top of your head that has been a big, defining, shining moment in your career where maybe it was something where you hear these stories– oh, we were back against the wall, or it was something where you had a major technological breakthrough or that big aha moment. Did you have any of those? Tom:Yeah, I think it was with the development of what was called the PackBot. That was the robot I was talking to you about before which was a ground-based robot that could do bomb disposal. We actually got into that through a contract with the UK Ministry of Defense. And the UK had had experiences with these types of roadside bombs with some of the challenges they had in Northern Ireland. And so they really had a great history and a knowledge. We came at it from the, hey, we’re smart engineers, and we can do this. And really, the aha moment was when we were spending some time in the UK on a range, and they said, “You don’t really understand what we do.” And we said, “Well, we kind of conceptually understand how you go and do this.” He goes, “No, you don’t really understand how this works.” And they took us and put us through some scenarios where we actually, one of our engineers actually had to go down-range to a car that had a bomb in it. And just really living through that experience gives you a different perspective of how to solve the problem. It was really around weight; we were trying to get– they had a requirement for a very low-weight robot so that it could be hand-carried, and we kept saying, no, this is as light as it’s going to get. This is truly as light as it’s going to get. We’ve done everything we can from an engineering perspective. And that’s when we went and one of the engineers put on a bomb suit which weighs a lot, grabbed the robot, carried it down to this car, walked back and said, we have to make this robot lighter because we can’t give that kind of weight to these guys to carry down. And so really just living through the end-user and his experience and understanding what they’re trying to do and what they’re trying to accomplish and how the technology can help really gave us a different perspective of how to approach that problem and how to solve that problem. Danny:I love that; that’s a great story. I think that that can be applied towards anything in any industry. And you see that happening a lot in the manufacturing space, supply chain, certainly robotics, technology. You look at start-ups in general. I have a great idea, and this is amazing. But just because you can do it doesn’t necessarily mean there’s a market or there’s a way and so, really, as you mentioned, getting in the shoes of that end-user, getting to experience what they’re experiencing, it creates more purpose. You’re like, okay, somehow we’ve got to figure out how to make this thing lighter because this is completely impractical. It’s just not going to work. I think it’s a great story. Tom:I’ll give you another story. So I was on an assembly line recently. The company was looking to automate, and so we were on the floor looking at this process that an operator was doing. It was fairly repetitive, and we were talking about different ways. We were there for quite a while. And then, all of a sudden I noticed the operator did something different. And we had been watching him for at least an hour, and they were doing the same repetitive process. It caught me out of the corner of my eye, so I asked them. I said, what did he do? And we went over and talked to the operator, and they said, every so often one of these parts has a little bit of flashing or a burr in it, and we have to deburr it. And I have this little tool; I go psht, boom. So it went from a very simple automation process to something that, yes, robots could still do, but now we had to add a vision inspection, more degrees of freedom to be able to actually add that little step to take that piece out. And also, then, you look at the ROI because now we’ve had to add this additional equipment to do this one task that happens fairly infrequently. Does it still make sense to automate that? So really getting to understand the actual problem at a really fine detail is critical. And it’s one of the things we talk to our start-ups all the time about, how much have you spent with the customer, and by the way, go spend more time because nobody spends enough time. Danny:Well, that’s awesome. What a perfect pivot point now as we go over to MassRobotics and what I think about what you do. And I love the fact that you say you’re talking with start-ups and that that’s something that you go look at. Tell me a little bit more about your organization, how you help. You said it’s a non-profit. You obviously have an incubator, or you’ve got space for companies to be able to develop. Tell me more about, why did that start? Tom:Yeah, so really it was folks from the industry that came, and they recognized that a lot of technology was being developed in the Boston area. But those start-ups were going to different areas to start their company, and why were we losing them? There was a number of reasons, but part of it was having that strong ecosystem that allowed the start-ups to get all the resources they needed. At the time, Boston really wasn’t known for doing some of the hardware as much as they could, and so we formed this facility. It’s an innovation center. It’s not really an accelerator; it’s a shared workspace where our start-ups pay a fee to be there, but it’s a pretty nominal fee. So it’s less than if they went and rented space elsewhere. But in addition to space, we provide a lot of services and support that helps those companies. So everything from tools, software; just as joining, they get great software from Autodesk and SolidWorks and Altium and things like that. They get access to a number of different robots, machine tools, things like that. And then, they also, hopefully we can help them find investors, find customers, that type of thing. So really building a community where everybody can talk and work with each other and help each other I think is an important aspect of what we do. Danny:No, that’s awesome. That’s exciting. You said it was started five years ago. Is that correct? Tom:Yeah, so the idea came about 2015. We actually opened our first facility in 2017, and we expanded. We now house 56, I think we’re going on 57 companies in our facility. So it’s really taken off. Danny:Excellent. Now, you’ve got an association side as well, so you’ve got that start-up piece but then, on the association side, what does that look like? How many members do you have in that side? Tom:Yeah, so we’re not really a membership organization, but we support other robotics companies in the community that we work in. So we work with a little over 350 companies, and they are, as you can imagine, a broad range of robotics companies and IoT companies. But everything from large companies like an iRobot or Amazon Robotics down to the start-ups that we house, a lot of mid-size companies that are doing really fascinating things in factory automation, warehouse automation, things like that. And we are really just trying to get them together as a community, understand what resources they need, make connections for them. And then, we advocate at a state and a little bit at a federal level around rules and regulations to support the adoption of this technology. Danny:Absolutely. Well, that sounds good; that makes sense. I’ve talked to a lot of different robotics companies, specifically in material handling, automation space, and specific to robotics, there’s been a lot of talk about interoperability and creating a little bit more standardization. Are you involved in any work in that? Tom:Yeah, so we have working groups that do more of the technical or deeper-dive work. We have one on drones and autonomous vehicles. We had one on automated mobile robots, so think of the robots that run around a warehouse or a factory floor. There, we’re working on an interoperability standard. So early on, you would get one vendor in; you’d get one robot, and they would run through your factory. But now, you might have a pallet mover. You might have a floor cleaner. And you have all these different types of systems that are running. How do they interoperate? So you don’t want a robotic picker to go down an aisle when the floor cleaner’s going to be in that aisle because they’ll run into each other, or the forklift. So if there’s a way that all of these different systems can talk to each other and coexist on one location, I think that’s going to be a benefit to all of those suppliers of that type of equipment. Danny:Yeah, absolutely, especially when you’ve got, it seems like a massive amount of new players, new companies coming in every day, solving these unique challenges that are a little bit more niche. But when you look at the grander scale, look at specifically about warehouse or some sort of plant operations. You’ve got a million different players. I know I’m speaking at a lower level here, but from a 30,000-foot view, that’s very difficult to be able to have all of– are you going to have 30 different systems? That’s certainly a big challenge. From your perspective, what are some of the biggest issues and the challenges that you’re seeing in the industry over the next, right now or over the next five years? Tom:So I think in the warehouse and factory side, we talk a little bit about this, the number of disparate systems that are going to be out there and how to get them to interoperate. That’s an important part, and it’s more just the systems talking to each other, but also, just think about all the infrastructure. They’re going to need to be on the same network. Charging stations is a great example. Are there going to be multiple charging stations? Can everybody use the same charging station? Right now, everybody’s got their own, and they’re all different types, too. So I think there’s a lot that is going to need to be worked out as these systems– as you want to deploy them in large numbers in these different operations. Danny:Yeah, that makes— Tom:I don’t think there’s going to be one robot. There’s not going to be a one-solution-that-fits-all type of thing. You may look at a factory, and they’re moving a 6,000-pound pallet. And yet, they’re putting a couple of pound items on a shelf. The same robots aren’t going to do those two different tasks. Danny:Right, right. Yeah, certainly big challenges ahead, that’s for sure. What are some of the great opportunities? I guess we can flip it a little bit. It’s a challenge; what are the big opportunities that you’re seeing? Tom:I think really, two areas that we’re really excited about is the ability to pick. We talk about this; it’s such a challenge. There’s still human pickers in most of these warehouses and still on a lot of the manufacturing lines of things that humans can do. But of things that robots can do, the ability to have those two work together, almost side by side, I think is a great opportunity as that technology develops. So we talk about collaborative robots. They’ve been around for a number of years now. But their deployment is really starting to pick up as people figure out how these two types of things can work together, how humans can work right next to these robots. There’s great systems by companies like Veo and others that are making vision and other models that understand how the robot’s going to move to make sure that they don’t interfere with what the human’s going to do. And the human can operate in that same space. When you look back 10, 20 years ago, you saw factory automation caged in. So if you look at a traditional factory line, you’d see all the robots in cages. That’s going to go away. That’s slowly going away, and I think it’s going to continue on that pace. Then, we’re going to see these robots doing all sorts of different tasks in a very flexible way. Danny:Yeah, I know that’s certainly a big challenge. You go to any of these large shows like a ProMat or a MODEX, and you’re seeing all the innovation and all the things that are happening. I remember, we had a client; they’re wholesale distributors in wine and liquor and beer. And you go into their distribution facility, and it’s definitely a very unique challenge. I remember specifically asking them, hey, what automation are you guys looking at to scale? I know it’s a big challenge for them. I was like, well, everything’s so varied, and now you’re not talking about moving a 6,000-pound piece and, then, something very small. It’s largely going to be somewhat within the same weight category-ish. But you’ve got, they’re very fragile, and the different shapes. It’s certainly, these are challenges that someone’s going to solve. Tom:Right, and you highlight another, we talked about opportunity. It’s certainly the end effector gripper, coming up with a diverse set of grippers that can pick up the things that you talked about. And there’s interesting work going on with the software and all those different things that can conform around different products. But the human has a great ability. If you put an egg and a bowling ball next to each other, we could easily pick those up, from one to the other, and switch back and forth. To get a robot to do that’s still pretty challenging. It’ll crush the egg if it has the ability to pick up the bowling ball. I think that’s an area that we’ll see some neat development. Danny:Yeah, excellent. Well, listen Tom, I think you guys are doing some amazing work. There’s a lot, it sounds like there’s some great innovations and some great things going on over there. So for those who would like to learn more about you, what’s the web address? Tom:So it’s www.massrobotics.org. Danny:Massrobotics.org, okay, great. So everyone can come check you guys out over there. Tom, thank you so much for your time today and letting us pick your brain a little bit. Tom:No problem. Thanks for having me. Danny:Alright, thanks. Well, there you go; that wraps up today’s IndustrialSage Executive Series interview with Tom Ryden who is the executive director of MassRobotics. You can go check them out, massrobotics.org. So hey, listen, if you like these episodes, make sure that you are on our email list. You can go to IndustrialSage.com, and you can subscribe because we have a lot of great content like this. We have the Executive Series. We also have the Bright Ideas Series by Acuity Brands. We have manufacturing news; we’ve got webinars and all kinds of content coming out that you don’t want to miss. So thank you for watching or listening. I’m Danny Gonzales, and I’ll be back next week with another episode on IndustrialSage.
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| Kobalt Tools: Jonathan Bradshaw, On Leveraging Customer Stories With Video Content | 27 déc. 2020 | 00:19:21 | |
Jonathan Bradshaw of Lowe’s® Kobalt Tools line explains how to leverage customer stories with video to generate leads and build relationships.
Danny:
Alright, so for today’s episode, I’ve got a really awesome story I’m going to share with you. I was on Facebook a couple weeks ago and came across this really cool video series called Artisan Series by Kobalt Tools. This is an amazing marketing tactic that they’re using to reach their customers by sharing their stories. And guess what? They’re not saying, “Hey, you need to buy from us because we’re the best and the most amazing thing.” They’re engaging their community, and they’re getting a lot of benefits out of it… So let’s go ahead and jump into today’s episode. We’ve got Jonathan Bradshaw who is the product manager at Kobalt Tools. Jonathan, thank you so much for joining us remotely from Charlotte today. Jonathan:Yeah, yeah, it’s beautiful here in Charlotte. I appreciate you having us. Danny:Excellent. So for those who are not familiar with you in the audience, can you please introduce yourself, tell us a little bit about you and Kobalt Tools. Jonathan:Sure, so I am the product manager for Kobalt Tools, so I’m responsible for a lot of the details that go into the products, designing stuff for our end-user, but also how to go to market with those products and making sure the messaging is what we need it to be to communicate that. Kobalt is a 20-year-old brand, but it’s also a private brand which belongs to Lowe’s, part of the store portfolio. We’re about to celebrate 20 years here in about two months. And we’re very much focused on user experience, so what makes Kobalt unique in the market is we’re building really tough tools, serious tools for serious jobs to get the job done. And we’re designing it in a valuable way, something that is very intentional for the customer, very comfortable to use, but at the same time a tremendous value. So Kobalt Tools really focused on the user experience from ergonomics to durability. Everything that it goes into the customer using the tool is what we’re focused on, that end-user to have a serious tool for doing serious work. Danny:And that’s awesome. I just wanted to share with the audience a little bit about how we found you. You guys are dialed in on that user experience. I was very impressed; I came across the Artisan Series that you have. It’s a video series you guys have posted on Facebook. I came across it. I’m a newly-minted private pilot; I’m super excited about that. And so I’m in all these different Facebook groups like Private Pilots of America or whatever. And so somebody had posted one of the videos that you guys had done in the Artisan Series, and it was actually on a guy who was building a kit plane. And so, naturally, I was, oh, I’ve got to watch this; this is awesome. And then, I realized later, who’s doing this? This is brought on by Kobalt Tools, and I thought this is awesome. These guys are doing it right. And what was awesome to me was that you guys are talking all about your customer. And it was sharing their story, and there was nothing like, hey, get Kobalt tools today from Lowe’s or whatever. It was all about that customer, and it was telling a story. And I said, this is awesome, and so then I reached out to you guys on Facebook. It was like, we totally need to bring these guys on. I just want to hear about all of this, so for the audience, that’s how we found you guys, and it’s just awesome. Jonathan:Well, what we like to think makes us unique at Kobalt is we start with the customer in mind. Our designers are intently focused on the customer experience. Our engineers, our quality folks, everyone–when we talk about our tools, we talk about the customer and then the tool that meets that customer’s need. And when we were discussing ways to go to market– we’re a large brand for Lowe’s, but we are a private brand. So we don’t have the large marketing dollars that everyone else has. We rely on some of the bigger brands to bring customers into the door, so we don’t have to worry about that. Now, it’s okay, how do we communicate to that customer? One of the things that we like to show is, alright, what is our customer doing with our tools? What are they using them for? And as we started to search out some artisans and stuff, we heard about Randy with the plane. We got people who build furniture out of reclaimed wood and all kinds of different things. But the goal of it was, if you noticed, there’s not a lot of product shots in there. We’re going to get our product in there; obviously, it is there to represent the brand. But out of a four-minute video, there’s maybe 20 seconds of total product shots. And it’s really about the user and how they’re using our tools to enrich their lives, how our tools are making their projects better. Building an airplane’s a serious thing. Once you go up, you’ve got to come back down. Danny:Yes. Jonathan:So you better have some real tools to put that together and make sure that you’re doing it the right way. Randy was already using our products. We found him through our social media. And that’s how we find all of our artisans. Danny:I think there’s another great element of that. You found him through your social media, so you guys are obviously active on that channel. Now, I know a lot of our subscriber base, we’re focused on B2B, but there’s a lot of lessons to learn. I know this is B2C, but we’re seeing this transition. There’s a really great story that came out of a study that Google did back in 2015 when they found, back then, three years ago, or three and a half, depending on when in 2015, that nearly 50% of B2B buyers were millennial. Three years later, I’m guessing that it’s 50 or more at this point. And that’s a big lesson. So Caterpillar latched onto that, took their campaigns, and totally changed it. Now, Caterpillar, they’re not B2C; they’re going to be B2B. They’re selling these giant tractors and stuff. And they went to go tell more stories to bring in a more human element, and that’s exactly what you guys are doing there. So I don’t want to hear any of this, oh, B2C, B2B–it doesn’t matter. You’re selling to other humans. You’re having that transaction, that conversation. Jonathan:Right. Yeah, so I guess the best way that we’ve approached it or thought about it is if your marketing is your blockbuster movie, you’re going to have your action shots, and you’re going to have all that stuff. We have a series called In Motion where it shows all of our tools in super slow-mo. It’s really cool; it’s really specialized. But it doesn’t tell a story. And for any movie, whether it’s a blockbuster or a drama, whatever, you’ve got to tell the story of the people who are using the tools. Candidly, you can only do so many slow-motion shots of a drill or of a lawn mower just slinging grass. It becomes disinteresting, but there are so many people out there using our product that are very interesting. Nobody shoots four-minute long-form commercials because you’re not going to hold a customer’s interest that long. But we can shoot videos because the stories are interesting. And we can tell a story of our customers. And if we happen to sell some more tools from it, cool. But this isn’t really designed to be a viral thing. It’s just really to connect with our customers and show them that we’re here for them and that we’re part of their story, and we get them, and we understand them. That’s what we’re trying to convey with the Artisan Series. Danny:That’s awesome. And you guys are doing a fantastic job, so kudos on that. Talk to me a little bit about the inception. How did you guys come to that realization, saying hey, we need to do this. Did you just jump out? Hey, we’re going to do all these episodes. What did that look like? Jonathan:So it starts with where we’re at with our marketing dollars in our company. We’re part of a large, Fortune 40 retailer. We’re a large part of what we do in the categories that we participate in, but we’re still overall a small company within it. We do have autonomy to operate, and so we had to look at ways to spend our limited advertising dollars, and connecting with the customers seemed like the most important part. So what we noticed in the tool world and across the board is that social media-wise, there’s not a lot of connection between what they’re putting up on the screen and what the customers are interacting with. So not getting a lot of likes, not having a lot of followers. And their customer response time’s also no good. So we’re less than a day in response to our customers. We have over 10,000 calls we’re answering. That’s not a ton, but in the tool world it is; it’s actually quite a bit. We’re really proud of that, so we’re engaging with our customers that way. We find we get a lot of really good product ideas or product improvement ideas. As someone who’s a product manager, I’d rather somebody who’s using this tool every day or every weekend doing their job or their hobby or their passion to tell me how to make it better. You’re the real-life engineer. We go with that, and we learn from it. Then, the decision was, okay, how do we in turn show our customers who else is using this tool and what else these tools are capable of doing? And so you start to get these submissions online of people like, hey, check out my garage; I have everything in the Kobalt series. I’ve got tool boxes and garage storage and lawn equipment and hand tools and power drills and all kinds of stuff. And so the customer starts to show you, here’s what I’m proud about with my Kobalt. Then, you start seeing people, they’ll tag Kobalt tools in a project that they used. That got it started. So you see someone, and they made this beautiful table, this beautiful reclaimed wood table, and they used a couple of different Kobalt tools. And they tag you in it, and you’re like, well, I didn’t make that table. Kobalt didn’t make that table. You did. But based on that, the brand was part of their project. We were along for the ride, whether we signed up for it or not. And we signed up for it by selling them a product. That was the manifestation, and we kept going with the idea of getting these artisans and seeing how people every day use our products. Danny:That’s awesome. There’s so many lessons in there. There’s so many takeaways that I have anyways from that, that I think the first thing is, yes, you are engaged socially, and you are listening and being open to the ideas. I think it’s awesome that you are discovering all these different use cases and all these different, what people are doing with these tools. And I think that’s a huge takeaway for other companies to be able to think, hey, we may think– especially, I can imagine, as a product manager. It’s like, oh, well, we’re going to develop this product because over here, this is how it needs to be used. No, we really need to listen to what our customers actually, what they need and what they want. You see so many times that a product is developed because we think it’s a really cool idea, and it’s great, and it can do all these things. But the market, they don’t really want it. They want this over here. So I think that’s just an awesome lesson that you’re listening and then engaged in that community. You’re helping to build that, and if you didn’t have that, I don’t know that you would’ve been able to take this as far downstream as you have. Jonathan:Right, and the customer or, for most of your audience, the other businesses– we’re in the B2B world–if you’re offering something nobody needs, you’re not going to move it. Let them tell you what they need first, and see if you have a solution or you can develop one for them. That’s definitely the approach we take when we’re developing. It’s extremely customer-centric. Danny:That’s awesome. So what pieces of advice would you have to a brand that’s saying, you know what, we’re thinking we want to toy around with doing something like this; maybe we want to toe-dip. What piece of advice would you give? Jonathan:Crawl first, and then walk, and then start sprinting. You used the term dip your toe into it. Allocate some money; spend a little bit of resources differently, and figure out how you want to talk to your customer and learning about what’s important to them. And then, when you start walking, you start realizing, okay, this is how the two-way conversation works between you and your customers. And then, from there, you learn how they’re using your products. You learn what they’re doing with your stuff, and if they’re modifying them or if they’re using them as designed, or if they’re holding them a different way you didn’t imagine they would ever do, but it happens to work. And then, you can run. And by run, I mean you create the content they’re interested in looking at. You create ways in which they can interact with you in their brand. The biggest challenge in retail, and I feel like it’s also in any business to business situation, is you’ve got to meet your customer where they are. It’s no longer about them coming to you and trying to find solutions. It’s no longer about them necessarily coming into the brick and mortar store or reaching out to you via your phone number or your email. You’ve got to go find them where they are. And so if they’re out on Instagram, I’ve got to go find them on Instagram. And if they’re out in “Facebook World,” then that’s where I’ve got to go. That’s the biggest thing is crawl, walk, run. Try something. Do something different. And then, continue to expound and learn and be willing to change. I wouldn’t jump into it with some huge grand strategy because a year ago, the Artisan Series wasn’t on our radar. It wasn’t something that anybody had thought to do or that we were really going to engage in. It was more, we were doing product shots and that kind of product-focused marketing. The Artisan Series was a departure for us, and it’s been really successful. We got a lot of engagement from it. Customers comment. We’ve been shared hundreds of thousands of times. And then, also the cool thing about the Artisan Series is the customer stays there. They watch the whole thing. They’re staying in there, and they’re watching the whole video. And so even if there’s not a whole lot of brand exposure to it, we’re engaging, and we’re getting their attention for a longer amount of time. And as anybody who markets knows, that’s one of the biggest challenges is how do I get my stuff in front of you long enough for you to learn about it? Danny:Yeah. Jonathan:And if you make something interesting that’s engaging, like you’re into aviation and you’ve got a video on aviation, and you stay and watch the video to the end to the point when you engage with us, that’s how you found us. That’s what we want to do with each one of our customers. And we’re going to continue the series into this year and work into different parts of the country and different fields of use. Now we’re running. So we crawled; we walked; and now we’re off to the races. Danny:That is awesome. Such great feedback. You touched on a couple different elements that we’ve had in a couple different episodes recently, going to where your customer is at. And that’s such a big thing right now. You’re talking ecommerce or the brick-and-mortar, the retail, the omni-channel approach, that is changing constantly. And it’s interesting, the whole B2C buying experience. The way that people buy B2C, they want that same experience B2B. And you’re seeing those worlds really come together. So kudos, congratulations on what you guys are doing. You guys are doing fantastic listening to the customer, responding to it. You said a really big thing about engaging them. That’s a big thing on YouTube metrics, for example. It’s not about view counts and how many views you can get. It’s how long will people actually engage with that content. And that’s where it’s all going, SEO, all that stuff. It’s all about the content and engaging. So congratulations. Jonathan:Absolutely. Thank you. Danny:So we have, obviously we talked about this Artisan Series. We’ll put some links in the show notes. If you’re listening on iTunes, we’ll have those there. If you’re obviously looking at the website, we’ll have those there. You can take a look at that. If anybody has any questions for you, what’s the best way they might be able to reach out and contact you? Jonathan:Social media, of course. You can reach us at, Instagram is @kobalttools. Twitter, also @kobalttools; Facebook, look up Kobalt Tools with a K not a C, and you’ll be able to engage with us. We try to respond as quickly as possible. So that’s where we’re at, and that’s where we live. Danny:That is awesome. Okay, well Jonathan, thanks so much for joining us on IndustrialSage. I really enjoyed the conversation. And best of luck with the continued success that you guys have. Jonathan:Thank you, and I appreciate you reaching out. And I hope you enjoy the next round of Artisan Series that comes out. Danny:Yeah, we can’t wait to see it. Jonathan:It looks awesome to me, so I hope you’ll watch it. Danny:Absolutely. Alright, well that was another great episode. Listen, if you have not checked out the Artisan Series from Kobalt Tools, you totally need to do that. So all the links in the show notes; if you’re listening on iTunes, you can check it out there. On the website, you’ll have it there. Listen, a lot of major takeaways, so many. One big notable piece is being engaged in the community, building that community, being part of it, and listening, listening to what customers are saying, telling their stories, not so much yours. That’s a huge one. And Kobalt Tools is really reaping a lot of benefits by doing that. And don’t be like, oh, they’re B2C; we’re B2B. That’s coming together. Remember that study that Google did in 2015 and how Caterpillar found that. So take these tips; take that advice. If you’re thinking about doing this, which you should, remember, don’t sprint. We’re going to start crawling, then you’re going to walk, then you sprint. So thanks again for watching this episode. If you like it, we love that engagement on social media. Share it; like it. If you’re listening on iTunes, we’d love a rating. And if you have any questions, we’d love to answer them for you. You can reach out to us, IndustrialSage.com/questions. We’ll answer them on the show. And as always, I’m Danny Gonzales. Thanks for watching; this is IndustrialSage.
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| Arris Composites: Ethan Escowitz | 13 déc. 2020 | 00:34:32 | |
Ethan Escowitz, CEO & Founder of Arris Composites, shares common benefits and obstacles experienced in the additive manufacturing industry.
Danny:
Well hello, and welcome to today’s IndustrialSage Executive Series. Today I am interviewing Ethan Escowitz who is the CEO and founder of Arris Composites located all the way out in California. Ethan, thank you so much for joining me today on the Executive Series. Ethan:Yeah, it’s great to be here. Thanks for having me, Danny. Danny:Well, I’m looking forward to this and jumping into this episode. So for those who aren’t familiar with Arris Composites, we’ll start there. What do you guys do? Ethan:So we make products— Danny:Okay, yes. Ethan:…broadly. So obviously composites are an important part of those products, and the continuous-fiber composites that we’re able to produce have the highest strength-to-weight ratios, which is why they’ve been used so broadly in aerospace. But we’ve really enabled mass production of these methods that really started in these very high-performance applications for use everywhere in all kinds of different applications. And in addition to that, we can make complex products that not only have continuous-fiber composites but also other materials like metals or plastics or whatever is required for the particular functional requirements of a product. Danny:Okay, and just to set the scene here, how long have you guys been in business? Ethan:So we started in 2017, so we’re going into our fourth year. Danny:Okay, excellent. So we’re going to jump into a little bit more about Arris, what you guys do, some of the problems and challenges that you guys solve. But before we do that, I want to do a deep-dive into Ethan, and I want to get to know you a little bit more and for our audience to get to know you a little bit more. Tell me, how did you get in the industry? Ethan:So I had been in the traditional manufacturing technologies that produce most of the products that surround us every day, the molding and casting and machining and stamping and things. And in around 2009, I started working with my first company that was involved in 3D printing, and that’s when I became enamored with the technology. And really, since then I’ve worked with plastic 3D printing companies, metal, composite, both private as well as working with commercializing 3D printing or additive molding technologies that developed at Lawrence Livermore National Lab and finding commercial applications for those. So really the broad additive manufacturing space is where I’ve spent the last 10 years. And that’s really, those two aspects of my background in manufacturing, the conventional technologies and then this new, advanced manufacturing really specifically additive manufacturing and 3D printing is where I’ve spent the last decade. Danny:So how did you get into that before that? Was that something that you– were you predisposed to the industry in school or before that? Tell me that story. Ethan:So I had a geology degree, so the mechanical and materials world that I am in was not really specifically what my training was. I actually shifted from mechanical when I was in school to geology. And I ended up working at Ricoh, a printer manufacturer, and really through that was first exposed to biz dev and technical products. And then I got a lot more interested in the product design and manufacturing world and that’s where I started getting exposed to a lot of the different manufacturing technologies and the ways that you might make any product. And it was really through seeing the important interaction between product design and manufacturing technologies that I got really interested in how you can have a differentiated commercial product as a result of leveraging new manufacturing technologies. And really, 3D printing was the space that, in the late 2000s, a lot of people were looking to, to unlock new potential. Medical, aerospace, consumer products, there were grand aspirations for where the 3D printing world might take many of these different industries. So it was the most exciting space to be in; it’s what I focused on. And some of those things have panned out; some of them haven’t panned out. The story of the last 10 years in 3D printing is a very interesting one. But that’s really how I found myself in this space between research and development and those killer applications for these new manufacturing technologies that comes out of these research and development efforts. Danny:Excellent. So throughout your career journey, is there somebody or something that stands out in terms of, that’s been a big inspiration or has helped to shape a decision or influence your career? Does anything jump out to you? Ethan:Yeah, for sure, there’s a million credits, I’d say. I’m definitely an example of a lifelong learner, and I’m a big advocate of mentors. My Audible is filled up with books I’ve listened to and will listen to repeatedly. One specifically that has always stuck with me and is very important with my career journey is a lot of Malcolm Gladwell’s work, but specifically The Tipping Point was one that really intrigued me when you hear about the stories of these major industries that get to a point where there’s a significant shift that happens of some sort. One of the examples they give is the electronics, the computer industry, and how there was that major shift where you have Larry Ellison and Bill Gates and Steve Jobs and these individuals that happen to be very intelligent individuals that are at the right place in history at the right time and are important in shifting, in guiding these enterprises that come out of that. So I really took that narrative; I guess I read that probably around when it came out or around 2000 somewhere. This was always a narrative that I brought into the search for manufacturing technologies that enabled and unlocked commercial advantages in the product design world. So I would definitely point back to that as a very formative story, if you will, for informing what I was looking for in terms of a technology, an approach that could really make a difference, that could really make a major impact. Danny:Yeah, no, excellent. That’s a great story. Yeah, I’m a big fan of Malcolm Gladwell’s work as well. And I would argue now, we’re at another tipping point. Obviously, this year has been a very interesting year, to say the least. And I think, obviously, there’s a big focus on the negative, on what’s happening, what’s going on. But I’d also say, I would look at the opportunities that have been presented. And I think that we are really at a massive tipping point right now, especially when you look at disruptive technology and the manufacturing–you can look at it across the board. Disruption is happening across all industries. But I think specifically, when you look at manufacturing, you look at supply chain, look at all these different areas where we are at a huge tipping point. What are some of those challenges that you are seeing in your space right now? Ethan:So yeah, there’s a lot to unpack there. First, the most important thing with supply chains and the manufacturing methods that are responsible for the majority of products that surround us in the world, you just can’t change that much that fast. So while I am absolutely a big advocate of a lot of the things that you’re saying, things are shifting. For the purchasing decision for a product that’s made 100 units a month, it’s very easy to shift it from one place to another. For the incredibly complex products that surround us in the world, whether it’s our automobiles where the bill of materials and the part count has gone up by tens of thousands over the last couple decades, and those become more complex, or if it’s our mobile devices where those are becoming even more complex, there is such a complex supply chain that flows into any one of those, it’s actually really challenging to make major product architecture shifts in those industries. So that said, that is why for decades the fundamental way in which… take a car that’s made with stamped metal and tack-welded together on an assembly line: the basic architecture doesn’t change a whole lot. But there are those punctuated periods where you suddenly have a major shift. And that’s where things get really interesting today where you have, if we’re sticking with the automotive industry, very disruptive things happening. Electric, autonomous, new business models, incredibly important shifts in the businesses like fleets. And you can look at analogs for some very interesting indicators of what we might expect from an industry like that. Commercial aerospace was, in 1970, there was almost all metal in the planes. And between 1970 and today, it’s gone all the way up to almost 80% composites in the Boeing Dreamliner because, for every pound you remove out of the plane, it costs less for that plane’s operator to fly that plane. So total cost of ownership drives the buying decision of planes. Vehicles, completely different. Vehicles did not go through that evolution at all because, for the longest time, it’s just been, what’s the sticker price? How good do I look in it? Let’s kick the tires, and I’m going to buy it. But with this major shift in ownership with fleets owning more, with total cost of ownership being more important, with autonomous needing these expensive assets to run as long as possible, then we’re actually shifting this major industry that consumed so many vehicles each year towards a business model that has a clear precedent to really considering total cost of ownership and not just, how good does it look when the buyer walks into a showroom? So it’s shifts like that, that driver from the commercial end, where the end-consumers’ buying patterns are changing. They actually provide us with some of the incredible leverage that these industries are seeing to change and do things differently and we can obviously see that with the valuation of Tesla and the way in which they’re doing a whole variety of things different from their predecessors. So I think your point is very powerful and very timely because, in some areas, we are completely limited by the legacy that’s come before us. And in others, there’s just these incredible shifts that have happened in a very short period of time and promise continued disruption ahead. Danny:Yeah, absolutely. Well, like you mentioned, obviously, making these changes–you talked about earlier on, the supply chain where you’ve got a massive list of components, and you’re sourcing them from all over the place–but not just changing suppliers is a very easy thing. But you mentioned changing the infrastructure, the actual design applications of it makes it very difficult. I think it’s interesting, talking about automotive, for example, you mentioned aerospace there, too, for a little bit, that really that nexus of technology coming in, you’re talking about autonomous, and you’re having a lot of these cars, from maybe a buying criteria, and I’ll take my–personally, for example– I used to be not very excited about all the technology. It was cool stuff, but now that’s a big driver for me. It’s like yeah, yeah, cars, the performance is great and all that good stuff, but I’m really interested in all the different, how’s this thing connected, and I want it to interface with my iPhone and all these different things to a point where that’s actually going to be a motivating purchase decision. And it was, at least for me, specific, the whole CarPlay thing. I loved it. Ethan:Yeah. Danny:That was like, I’ve got to have on my list. So looking at things like that, relative to how you’re actually going to go and design and manufacture that and say, well, okay, now we’ve got to bring in all this additional infrastructure and design into it. And you’re seeing that not just in automotive, but across the board where maybe we didn’t see this before. We’ve got a client that we work with in the lighting space. Okay, well, we have connected lights now. And look at the different kinds of data and the applications we can have there. So it’s kind of having to rethink not just the product design but also the application and the use cases which affect– you mentioned the business case and how to go to market and how to even educate market segments, whether it’s internal stake-holders from a sales standpoint to the consumers. And it gets very interesting and complex. I think it’s exciting. Ethan:Yeah, you get into user experience there, and I think that user experience– I’m actually in our factory adjacent to the train tracks, so— Danny:Supply chain, that’s good. Ethan:Yeah, I’ll tell you, that’s the supply chain in the background. But user experience is incredibly important. And typically, when you think about the car that you’re talking about, as you put all of that functionality into the car, you imagine you’re getting more and more and more components. In general, as the user experience has gone up, the part count has gone up and gotten even more complex. We actually work in some interesting areas there where you take an example of a next-generation mobile phone that I can show you where we’re able to take–and take the device, but make the class-A consumer surface finish. It’s got to look very nice. But the important thing that really relates to what you were getting at is, if I look at the actual enclosure that we’re able to produce for these applications is putting this material that’s stronger than titanium into these incredibly small features enables us to make it thinner and lighter and more desirable for the user to help with those user experience things, but we’re also able to integrate–and you might not be able to see it very well–but you can see the wire leads that run into the electronics that are actually in the enclosure itself where these, before, were just machined pieces of metal or molded pieces of plastic. So you’re actually getting smart structures that are removing components from the inside of the enclosure, putting it inside the device itself so it’s actually getting smarter. They perform better there; they’re more rugged. And your part count is going down. So this is a very simple version of that, but when you start imagining some of the larger structures that you might put into a vehicle where this is the highest strength-to-weight ratio, continuous fiber composites, running through that where within that structure, you can start adding some of those sensors and electronics–and you can actually see a cross-section of the truss with the wires that run through it–how you can actually not increase the part count. You can decrease the part count and get the better functionality and the better user experience. And a great example of where we’re able to do this really fast is the drone industry. The drone industry doesn’t have these giant assembly lines and the long product development cycles and 30,000 parts that need to be designed in. So we have one customer that we took 17 parts in their drone and consolidated it into one, single part that doesn’t require all those separate, discrete manufacturing steps, doesn’t require all those assembly steps. And the outcome is higher performance, better looking than what they were able to produce before. But it’s because that industry has very low thresholds to make changes and has a lot of latitude, obviously less regulations, less qualification that has to happen. So that’s where you’ll see many of these disruptive approaches start to manifest themselves earlier and faster where some of the industries that have a longer product refresh cycle and a little bit longer design cycle will take a little bit longer for us to start seeing them on the street or in the stores. Danny:But yeah, it’s funny you bring up the drone industry. We actually have an episode, I think it is yet to be released–I don’t think it’s been released yet–by the time this is released, it will have been– so I’ll put that caveat in there. But Ware, a company that basically, some of their big deployments have been in warehousing and using drones to be able to essentially take inventory. You mentioned you’re seeing a million different applications in there, certainly in that space. And aerospace in general, the lighter, the better. I’m a pilot geek; I’m a pilot, and I’m an aviation geek, so I love all that stuff. But yeah, the lighter the material, the more durable, the better. You mentioned in there with aircraft, or even the same thing with drones, you start getting metal out, then not only are you saving from a weight standpoint, but you’re also from a maintenance standpoint of having to worry about rust and different things will start going away. It’s interesting, too, when you look at, from a fulfillment standpoint, Amazon obviously is getting a lot of press about how they’re deploying all these different things between, from a battery manufacturing standpoint to get more efficiency, if we can reduce the components and decrease the drag, decrease the weight, all of this is driving towards actually making this a real reality that one day, we’ll have a drone that will be delivering whatever to us. Ethan:Yeah, a great example exactly to that point, this is a bracket that you might see in any plane. This is the classic-type brackets that the metal 3D printing industry has been working on developing using topology optimization which is software that, instead of taking what that bracket used to be which was simply two welded pieces of sheet metal with holes drilled through, it takes that essentially T-bracket, they would call them and then say, “Well if we have to transmit stress from up here down into these areas, let’s just run it more directly.” And that’s when the software does such an amazing job at making these elegant designs where the load literally follows the path. And traditionally, these weren’t done because making this out of metal would have been really expensive. So 3D printing opened up the possibility of shapes like this. But metal 3D printing is actually using much heavier materials than we work with. Continuous-fiber composites, you can look at it with a measure called specific strength and specific stiffness where you take into account, in the strength and stiffness, the weight of the material, and that’s where these continuous-fiber composites have the highest specific stiffness and specific strength and why they’re used so broadly in aerospace. So we’re able to use these ideal continuous materials in these shapes that have only been possible with 3D printing before. And the fibers actually wrap around the hole and then run all the way down the legs. And they can wrap around the bottom hole here, so you can imagine your fasteners that are connecting this assembly. The load is being directly transferred down. We actually just published a paper with a top aerospace company where we were able to remove over 70% of the weight from these brackets that were made with titanium 3D printing using our methods. So that alone, for a component that might number in the hundreds or thousands in large aircraft, is a big deal when you’re talking about the future of aviation where they need to reduce their operating costs. And in addition to that, this represents one component that is connecting things together. When we think about a truss, that one bracket that I showed you is essentially like a unicell in a much larger structure that we can look at making. What if we’re not just bolting things together, but what if we’re making larger integrated structures like the large one that I was showing back here and using part consolidation to get further benefits in terms of manufacturing and weight savings? And to your point, these are corrosion-proof materials, so you don’t have the painting that you need to do and many of the post-treatments with a lot of metals. Danny:That’s super exciting. What other industries are you guys doing a lot of work in? Ethan:So aerospace, obviously, has the most experience working with these materials. And the payoff in reducing the amount of jet fuel that’s used is extremely high. So because they are so expert in these materials and are really set up to digest a technology like ours, that has been an area that we have had a lot of work since very early on with the company. Drones are directly adjacent to it. Everything we’re doing with aerospace directly applies to drones and can happen a lot faster because you’re not flying people around, so you don’t have all of those qualification challenges. Really, the neat thing though is that all of these methods we’re talking about that are important for aerospace, they can apply to all of the terrestrial vehicles as well. And in fact, the reason that many of these aerospace methods haven’t made their way into cars and trucks and all the rest is because the aerospace methods are so expensive relative to the cost thresholds of automotive. Just a neat example, these are two brackets that look almost the same that I was showing earlier, and they are exactly the same shape, made on the same machine. But one is aerospace-grade PEEK carbon fiber, very high-performance material. The other is automotive-grade nylon carbon fiber, much lower cost, a little bit lower performance, but meets the thresholds of mass-market automotive. So the nice thing is, we can apply these aerospace methods to these broader industries like automotive, industrial applications. Light-weight structures can be used all over industries. Then sometimes we’re looking at, how do we pack more strength into a smaller space? So we might work on applications like seals or different mechanical components. But when you’re packing more strength into a smaller space, that’s where we’ll do all kinds of things for consumer products as well. So you can actually see a bit of a sample part that we have, like a watch and some of the other parts that we’re able to put in an incredibly small package. The quickest elevator pitch for our technology is that we can, out of an automated molding system, get parts that have the strength of titanium, but they’re one third the weight. So really we’re able to hit the cost/performance thresholds you need for mass market, and then we have the weight savings and the strength. And those three concepts are why we’re really broadly applicable. So you were asking about industries; aerospace, industrial, consumer products, and a wide variety of vehicle applications are some of the primary focuses. Danny:Excellent. Well, it makes a lot of sense to me. I imagine, especially in the vehicles and anything that’s going to be consuming a lot of energy, too, has a great sustainability story to go along with it as well, just in terms of lower emissions. Not only is it a cost savings benefit from reduction of fuel, but also from the emission piece as well, so it sounds like a triple-win. Ethan:Yeah, the sustainability– it is so important to look at the energy saved by the component that you’re making. We also look a lot at what are the material inputs, and then what is the end-of-life. So we can think about these three phases when we’re talking about the total energy embodied in a component. So we’re working, actually, with a new class of composites. So since the 1950s Corvette was one of the first composite success stories, so composites have been around for a while. But they’ve used this matrix material of super glue or epoxy that hasn’t been recyclable. We’re actually working with the next-generation of composites that use the recyclable resin systems. So we’re looking at, how do we get cleaner chemistries? How do we get lower-energy fibers? We can not only work with carbon fibers, but glass fibers. Then, to your point, in the middle when we look at the total lifetime energy savings of the part, you can factor that, and then end-of-life as well we’re working on some novel recycling technologies that can take the end-of-life products and give them another– taking this idea of cradle-to-cradle, how do you anticipate the end-of-life when you’re planning the beginning of the next generation? Danny:Well, excellent. It sounds like you guys are really onto something. It sounds like there’s some cool stuff coming down the pike for you. My last question I want to ask before we wrap up this segment is, going back to what we were talking about before as far as some influences in your life, and you mentioned book reading and how your Audible account is very full, what are you reading right now, or listening to? Ethan:So I’m going to check my Audible, when you’re asking. I’ve got a bunch of the HBR’s Guide To; I’m always listening to those. What I’m actually excited about is, Malcolm Gladwell has the new Talking to Strangers book that I literally just downloaded, and I haven’t read yet, so that’s what’s cued up now. In terms of influences, I think that there is also no substitute for mentors. There have been, through our history, there’s a lot of credit that some really strong mentors have played for me personally and our management team. Carl Bass, former CEO of Autodesk who was an early advisor, angel investor, just continual sounding board over the years. Being able to have individuals like him help guide the ship and think through some of the hard decisions and give me the conviction, I owe a big debt of gratitude to him for that. There’s also, when we were raising our Series A, having a chance to meet Jeff Immelt, former CEO of GE, who is a partner at our now VC firm, NEA, who we’ve had a long-term, great relationship with. Having him share his background and starting his career in the composites industry in the 1980s when the chopped fiber version of composites were being adopted by the automotive industry and hearing his on-the-ground stories about what those major shifts in industry look like. There’s no substitute for great mentors, but the next best thing is listening to their book if you can. Danny:That’s awesome. Yeah, no, that’s fantastic. Ethan, thank you so much for spending some time with me today on the Executive Series. For those who’d like to learn a little bit more, give us your website. What’s the best way? Ethan:Yeah, arriscomposites.com. Danny:Arriscomposites.com, we’ll make sure to put that in the show notes for those who are listening to the podcast and in the notes for those who are watching the videos. Ethan, thanks so much for your time, and best of luck. Ethan:Yeah, thank you, Danny. Great to meet you. Danny:Great meeting you. Alright, well that wraps today’s IndustrialSage Executive Series with Ethan Escowitz who is the CEO and founder of Arris Composites. Go to their website to check them out, to learn more about them. And before we wrap, if you are not subscribed onto our email list, I highly encourage you to do so. You’re missing out on some fantastic content that we’ve got other episodes of the Executive Series like this. We have the Bright Ideas Series by Acuity, which is very exciting, manufacturing news, and many other things that are going to be happening as we continue to move this train down the road. So thanks for watching and listening. I’m Danny Gonzales, and I’ll be back next week with another episode on IndustrialSage.
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| HP: Sonita Lontoh, On Building Awareness In Emerging Technologies Like 3D Printing | 06 déc. 2020 | 00:20:30 | |
Sonita Lontoh, VP of Global Marketing for HP in 3D Printing and Digital Manufacturing, discusses the nature of building awareness in emerging technologies like additive manufacturing.
Danny:
All right, so let’s get started. In today’s episode, I have Sonita Lontoh here, who is from HP. She’s actually the VP of Global Marketing for HP under their 3D Printing and Digital Manufacturing Division. Sonita, thank you so much for joining us today. Sonita:Thank you very much for having me. Danny:So, long title, there’s a lot going on there. So, maybe tell me a little bit about what your role is there at HP with the 3D printing and digital manufacturing. Sonita:All right, so I joined HP about a year ago doing global marketing for this new business, and actually, I’ve always been interested in the intersection of new technology, the business model, and policies, and my experience has been really diverse, from the entrepreneurial, to venture-backed Silicon Valley companies, to Fortune Global 100 companies, and my role and responsibilities here really is to position HP as that trusted solutions leader that helps our industrial customers, industrial manufacturing customers, succeed in their digital manufacturing journey, and when you think about it, that’s actually quite a departure from the core historical of who HP is, ’cause I think most people know HP mainly as a consumer and commercial human technology company, but this new foray, this new business into 3D printing and digital manufacturing is slightly different than the traditional HP, right? As probably your audience knows in the world of industrial manufacturing, it is not enough, I would say, for a technology company to only be viewed as a hardware technology vendor, but it more important for the company to be viewed as that trusted solutions leader that actually has the expertise in the end-to-end solutions, namely hardware technology, software, and services, to help the industrial customer succeed in their journey. Because, at the end of the day, when you think about it, customers want to apply new technologies such as 3D printing or digital manufacturing to really achieve benefits. And, there are many benefits of 3D printing, but, in general, I would summarize them into three things. The first is to help our industrial customers achieve operational efficiencies for their own manufacturing operations internally. Second, to help our industrial customers to be able to provide superior customer experience for their end consumers, externally. And, last, which is usually the hardest, especially for big, incumbent manufacturers, is to create new business models and new revenue streams that wouldn’t otherwise be possible. And so, a lot of my marketing activities here at HP really focus on developing the strategies and executing on a multi-problem, multi-channel marketing plan, then position HP as that trusted solutions leader. Danny:Excellent, yeah, and this whole digital transformation piece that’s happening is just rapidly evolving. The manufacturers, industrial companies as we know it, and I think the whole 3D printing aspect in particular is very fascinating. We’re seeing a lot of manufacturers that are very excited about it, for many, many reasons. So, on that note, maybe we can jump into a little bit of, maybe some interesting innovations, or the different applications that you’re seeing that you’re rolling out with your solutions. Sonita:Great, and I’m glad you’re asking about applications, because, I think in this world of 3D printing and digital manufacturing, hey, great to have technology, but at the end of the day, what kind of applications that eventually deliver benefits that you can enable? So, there are many applications, Danny, that can be enabled by 3D printing, ranging from automotive, to aerospace, to medical, to consumer products. You name it, it’s really endless. When you look at 3D printing, it’s really being used for three things. The first is for functional prototyping, the second is for manufacturing aids, and the third, which is the most important, is actually for final parts productions. And, for those in the audience who may not be familiar, 3D printing has actually been around for 30 years, but in the past, it had been primarily been used only for prototyping. But, in the past few years, with the advancement of the technology and also the knowledge, we have seen more and more use of 3D printings for industrial manufacturing applications. So 3D printing, in the role of industrial manufacturing, enables three cool things. The first, it enables new geometries that wouldn’t be possible. The second, it enabled new part properties, that also wouldn’t be possible otherwise. And, the third thing, it also enabled new mass customizations that wouldn’t otherwise be possible. So, here, I would actually like to share with the audience this Apple, and probably you cannot see the whole thing, but this is a 3D-printed iPhone case right here, as you can see, the whole thing was 3D printed. It was a lattice structure, and it has actually my name embossed on it. And, another interesting application of 3D printing that leverage mass customization is eyewear that can be 3D printed to best fit your head and your face. And then, dental liners can be 3D printed, as well to best fit your teeth and your mouth. Like Invisalign, and Smile Direct, and all those dental liner companies. And, last but not least, orthotics and prosthetics that can be 3D printed and personalized to best fit your body. And so, while a lot of these more consumer-oriented and medical products are interesting, HP is also focusing on industrial applications, especially in automotive. And, with the advent of new automotive platforms, especially for electric vehicles and for autonomous vehicles, there will be many automotive parts that will be 3D printed, and why is that? And, the reason is because when you start going to electric vehicles and autonomous vehicles, it’s actually a big advantage for parts to be 3D printed, because one, it reduces the weight of the car, and then, second, because of that, it increases the car efficiencies, and then, last but not least, if you have customized, 3D-printed interiors inside the car, it provides superior customer experience for the end consumer. So, in this particular area, we’re working with many ecosystem partners, including leading companies like Volkswagen. They’re actually the largest auto company in the world, and we’re working with these ecosystem partners and customers who look to leverage our technology to help them, within their digital manufacturing journey. Danny:Absolutely, that’s fantastic. So many different applications. I can see how that, it’s kind of endless. I know one area in particular I’m curious about, as far as the different materials that you’re able to do. I’m hearing a lot that metal is starting to be a big area. Do you have anything like that in the future coming down? Sonita:Oh, actually, we at HP, we did launch this business three years ago, primarily with polymer, with plastics. However, last year, Danny, we actually launched our metals business, so the metals technology. The printer itself is not ready yet, but it will be ready by the end of next year. However, we are, today, already enabling those customers who are interested to actually 3D print metals, for production, through some of our production partners. So, to answer your question, material’s actually one of these most important factors to enable industrial 3D printing, and again, I don’t want to bore the audience with regard to all the different technical materials, but even when you say plastic, there is PA12, PA12 glass beads, PA11, there’s all types of plastics materials depending on the applications. And, the same thing with metals. So, materials, it’s really one of the enabler, actually, to make 3D printing more industrial. Danny:That’s super exciting, and I love that, I could geek out this all day, but let’s move a little bit into the sales and marketing aspect in terms of rolling out this new solution which is a little bit of a newer approach for HP. How are you guys building that demand, and really go about it from an awareness standpoint? Sonita:Yeah, great question, and actually, the way I would view it is really a journey, so it is new to HP, definitely, this whole industrial approach to marketing, but 3D printing and digital manufacturing itself is still an emerging new technology, as well, to industrial manufacturers. So, it’s like new, new, everything is new, and everything is evolving, everything is emerging. And, so the approach to marketing, I would say, is very different from the marketing approaches for an established category, because this category is not established yet, in the mainstream, at least. Even for industrial manufacturers. So, really, a lot of our marketing strategies and activities are focusing on three pillars, Danny. So, the first pillar is what I would call building the market, and creating awareness. So, building the market is actually important, because, again, the market is emerging, right? And so, for that, a lot of our activities are focusing on building these multi-channel, multi-touch marketing plans that really showcased all the possibilities and all the benefits that 3D printing can deliver. And then, in addition to that, we also showcase our thought leadership, because, again, it’s an emerging area, so a leader such as HP has to have a point of view, of what does digital manufacturing mean, and what kind of benefits, and how does it fit in with all of the other advanced technologies in manufacturing, but we also showcase our thought leadership with industry analysts, industry influencers, and the ecosystem partners and customers. And then, the second pillar is what I would call showcase our customer successes. This is like customer advocacy, as I would say, the audience probably understands, in the industrial world, nothing speaks louder than the customer’s success. As a technology provider, you can say all you want, but until a customer that I think his or her peers respect, shares something, probably shares their best practices, lessons learned, how they’re leveraging our technology to deliver benefits for them and to achieve their business objectives, I just don’t think… I cannot say enough about the importance, really, about customer advocacy. So, in marketing, we work hard to document and also showcase all of these customer successes, be it through our videos, our case studies. We let our customers present at industry events. We do webinars together. We do a lot of things to really let the customer shine, because, at the end of the day, that’s how you showcase that you’re actually delivering value. And then, the last thing, the last pillar, is what I would call the educating market and creating demand. So, again, because 3D printing is still relatively new, but, actually, for manufacturers, to truly benefit from 3D printing, they have to know how to design the product for 3D printing. So if they are only 3D printing a product that was traditionally designed for traditional manufacturing, they wouldn’t be able to take advantage of the full value. So, because of that, we do a lot of workshops. It’s called Design for Additive Manufacturing. We also have digital minds consulting services where we try to change people’s minds, work with potential customers and partners to teach them which applications would be a good fit for them. To adopt 3D printing, helping them to build the business case, the technical case, and so on, and so forth. So that’s what a lot of that we do in terms of creating demand in the market. Danny:That’s fantastic, that’s great. You know, I love the approach there. Especially, you talked about, at the very beginning, in terms of building that market. Big word, we throw it around a lot, omni channel, but really at the end of the day, it so important, I think, with a lot of our audience members, too, just to think the way that we buy has changed, and it’s very different, and it’s important to make sure that’s it’s not necessarily one channel, that it’s across the board. And, you had to have that message, but it’s packaged in different ways across how the different type of content and that media is best communicated. So, and then I love the customer success pieces. Testimonials, obviously, case studies in the advocacy piece are important, but one thing that I thought was interesting that I think that a lot of, some of our audience sometimes, we tend to forget a little bit, is the best practices piece. Here, let’s share that story, here’s the ROI, great thing, but hey, here’s the lessons learned. Here’s how you might want to be set up for success over here, and I think that’s very, very valuable. Sonita:Yeah, and actually, just to pound on that a little bit, Danny, because again, as I said, digital manufacturing is actually a journey, because it’s still not mainstream, and each customer is different, because they have a different sets of challenges and opportunities, and some customers might start in one way, and they want to focus on certain applications, others may want to start other ways, and other sets of applications, but the point is, I think, for HP, is no matter where the customer starts his or her journey, that we have the comprehensive and integrated solutions and expertise and also other customers that can share their best practices and their lessons learned to help the other customers succeed in their own journey. Danny:Absolutely, and I think that’s part of that enablement piece, I think, to be able to, because the reality of it is, making some of these transitions, it can be fearful. Is this going to work? Is it not? And so, just to help to be able to minimize those barriers. Sonita:Yeah, so in a way, this is actually a form of digital transformation for the manufacturing process. I know digital transformation is this word that everyone throws out there, right? But, truly, for me, this is an example of a digital transformation for the manufacturing sector. Danny:Absolutely, and a lot going on there. So, it sounds like there’s a lot of things that you guys have on the horizon. What’s next, what’s that big, next exciting thing that’s coming down the road for HP? Sonita:Man, there are so many things. This business moves so fast. I think we, of course, we keep improving our systems, and right now, as I’ve mentioned to you, we understand that it’s not all just about the hardware technology. We understand it’s about the end-to-end solutions, which means, the hardware, the materials, the software, the services. And, I think what is really big for us right now, we also understand that you cannot do it all by yourself. I think each ecosystem partner has a role in it, and that’s why we have, I’m not going to mention each one, but we have a set of ecosystem partners that we really work with closely, in order to be able to deliver, at the end of the day, that end to end solution. So, for an example, actually, about three weeks ago, I think we announced the expansion of our alliance with Siemens. Of course, as you know, Siemens is one of the leading digital industrial companies. And, what we did is, we expanded our alliance to make sure that our additive manufacturing systems are actually integrated within the Siemens end-to-end factory solutions. Because they have it from the design to the engineering, to the manufacturing, to the production, all the way to connecting to the digital twin and their MindSphere industrial IOT platform. And so, I think for HP, we’re realizing that in order to truly transform digital manufacturing, deliver benefits to our customers, we have to make sure that our system can be integrated within an end-to-end factory workflow. So, many things coming, of course, more materials, more applications, but also ensuring that our system can integrate within the larger digital factory environment. Danny:Exactly, yeah. It’s a big team approach, it’s not just one and done. Not just one. You are stronger together, and it takes all the different partners to do this, yeah, absolutely. Sonita:Yep, yep. Danny:Excellent. Well, Sonita, this has been a fantastic conversation. I really am very thankful for you for coming on IndustrialSage. If anybody would love to learn more about your solutions or have any questions for you, what’s the best way to get in touch? Sonita:Yeah, I would say the best way is to actually, to get in touch with me, I have a LinkedIn profile, which is my name, Sonita Lontoh, and I have a Twitter, @slontoh. But, if you’re interested to learn more about HP Solutions, go to hp.com and click on 3D Printing. Danny:Excellent, a lot of ways to get a hold of you guys. So, you got the omnichannel thing going on, that’s great. Sonita, thank you again, so much, for coming on, and sharing this information with us. Sonita:Thank you very much, and hopefully, it’s useful. Danny:I think it’ll be very useful, thanks so much. So, there you go. Great episode here with IndustrialSage, again, with Sonita Lontoh from HP. There’s a lot of great things, at least for me, that I feel like we were able to unpack on here, and one thing that I mentioned, she mentioned three pillars from the market, and there’s some subsets there, and one being building that market, the next piece is showcasing success, and that customer advocacy piece. In particular in that, I loved the aspect of not just sharing those stories and that ROI and that case study. We know that’s really important, but also helping to share some of those best practices, and those learnings. So, particularly in a market where we are looking to, it’s an emerging market. Where, maybe not everyone is used to it, there’s a lot of fear, and maybe a little bit of trepidation that we can go, and say, “Look, here’s some ways that we can enable you “to really roll out with this, “successfully, as much as we can.” I think that was fantastic. And then, obviously, educating the market, and really helping to create that demand, and really being those thought leaders and putting out that content. So, a lot of great things to unpack here. Hopefully, you have one or two key takeaways that you can implement, as you think about this today. And, that’s all I’ve got for you today on this episode. Thanks for watching, if you have any questions, you can reach out to us at industrialsage.com/questions. We’d love to answer them for you. If you’re listening on any of the podcasting stations, we’d love a review. Social media, share our stuff, we’d love it. Share the love. So, that’s all I’ve got for you today. Thanks so much for watching, or listening, depending on how you’re consuming this. I’ll catch you next week, I’m Danny Gonzales, and this is IndustrialSage.
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| Vecna Robotics & Mass Robotics: Daniel Theobald | 29 nov. 2020 | 00:32:24 | |
Daniel Theobald of Vecna and Mass Robotics returns to share more of his story, and common misconceptions about the robotics field.
Danny: Hello, and welcome to today’s IndustrialSage Executive Series interview. I am joined by the CEO and founder of Vecna Robotics, and also the co-founder and president of Mass Robotics, Daniel Theobald. Daniel, thank you so much for joining me today on IndustrialSage. Daniel:My pleasure. Danny:So before we jump into everything here, I would love for you, if you could just give me a little introduction about who Vecna Robotics is and Mass Robotics. What do you guys do? Two organizations that’s got, some pretty cool stuff you got going on there. But what do you guys do? Daniel:Well, Vecna Robotics is the world leader in what I would call high-capacity AMRs, so autonomous mobile robots that move large items, pallets, what are often referred to as non-conveyables, so kayaks, tires, mattresses, exercise machines, all these type of things that our modern ecommerce society has going through shipping that used to be handled differently. So we are able to fully automate the movement of materials in a facility, taking them from point A to point B safely, reliably. And really exciting, the focus of the company is not just around these types of robots but also around the idea of, how do we really optimize the overall end-to-end workflow? One of the key learnings we had early on is that robots are just as capable of wasting time as human workers if not tasked effectively. So just trying to insert a robot into an existing process might not achieve the kind of return on investment a customer is looking for. So a big focus of ours through our pivotal software is around this idea of making sure that you’ve got the right resource in the right place at the right time and really optimizing the entire workflow through a facility rather than just trying to insert a robot into a particular spot. So that’s sort of the headlines of Vecna Robotics. One of the unique things about Vecna Robotics is that we are very active in the area of social responsibility. From the very beginning, we have paid our employees to spend approximately 10% of their workweek contributing to community service in our local and international communities. Well, several years ago, myself and a number of colleagues here realized that there was a need for an organization to really help move forward the adoption of autonomous systems in the industry in a more practical way. And there are a number of obstacles that were preventing effective adoption of these types of autonomous solutions. So we used our community service time at Vecna to band together with others in the industry and co-found this organization called Mass Robotics. Mass Robotics is one of the largest, fastest-growing industry associations for robotics, IoT-connected devices, and their mission is, essentially, to facilitate the adoption of this technology by connecting innovators and end-users and investors and equipment providers, sensor providers, in more effective conversations and also through working to establish practical interoperability standards that can help ease the adoption of these type of solutions, as well. I think the short version of that is that the robotics industry is really where the computer industry was several decades ago, where the mobile industry was a couple of decades ago. There’s a lot of fragmentation, a lot of different people out there trying to build robotics solutions, but the standards and the interoperability aren’t quite there yet to support easy adoption, plug-and-play adoption of this. And so those are some of the things that we’re really focusing on. Danny:Yeah, absolutely, and I can only imagine that, because of recent events, just really the demand, the increase in demand for efficiency and technology solutions and innovation across the board but specifically in supply chain and material handling has just gone through the roof. Daniel:Yeah, and I would suggest that really what we’re seeing as a big impact of this pandemic and some of the changes happening worldwide is that there’s an increased appetite for flexibility. Automation can take many, many forms, and there’s what I would classify as very rigid and fixed automation and, then, there is flexible automation which is the next generation of rapidly adaptable automation. And the point of that is that customers realize that planning for the future is harder than ever now. They don’t know what’s going to happen. It used to be that you could design a warehouse or a factory and expect it to operate essentially as designed for about a decade. That world is long gone now. And many of our customers have trouble predicting what’s going to be happening six months from now, much less five or ten years from now. So this has caused a real tectonic shift in terms of the type of automation people are looking for. They don’t want big, built-in solutions that lock them into a particular process or throughput forever. They want to adopt solutions that can evolve and change rapidly with them as their business needs evolve and change. Danny:Yeah, and I think that’s a very interesting point. Do you think that, as far as the need for flexibility, do you think that was something that was already happening that was on the horizon before the pandemic? Or do you think that, is that something completely new, or has it just been accelerated? Daniel:I think it’s been accelerated. Certainly, this has been our thesis from the beginning. And I think that thesis has just been strengthened significantly by this. The trend in technology is always towards flexibility. Modern computer technology, modern sensors, et cetera have really allowed this to happen. It used to be, you’d go all the way back to the loom workers, the Luddites, and some of the first automation that came into the human consciousness in terms of humans, jobs, technology, how does this all work? It was really very specifically-built automation. You would build a machine that was capable of doing one thing and doing that repeatedly again and again and again and again. That’s what led us to the industrial revolution. That’s what led us to mass production. Danny:Sale, yeah. Daniel:The idea that we could efficiently build something. Everything didn’t have to be an individual human being with their hands building each individual item. It was great; it brought tremendous prosperity to the human race as a whole. But we did lose something. We lost that flexibility. You go to the store to buy clothes, and you have to choose from a set of discrete sizes. Someone had built a machine to make this jacket that isn’t made specifically for you. It’s made for somebody sort of like you. The exciting, new opportunity we have with flexibility is we can regain some of that custom-made for you. It will fit you perfectly. It will perfectly address the needs of your operation or business because everything doesn’t have to be the same. So that’s really where this idea of flexibility is something that has been evolving for a long time. I think the understanding of how valuable it is in modern industry is really just being underscored now with this pandemic. Danny:Yeah, absolutely agree 100%. We started definitely jumping in ahead here a little bit, which I’m getting excited about. But I want to take it back. I want to take a step back for a second because I want to get to know you a little bit more. I want to get to know Daniel and how you got into this space. Take me back. Was this something that, as a kid, you were involved in technology? Or was it just something that you picked up later down the road or you went to school for? Where did that start? Daniel:I have been really fortunate, and I realize this more and more as time goes by. I was born in Silicon Valley before it was called Silicon Valley and had some really great opportunities that, at the time, I didn’t realize were so special. For example, I had the opportunity to attend probably one of the first ten elementary schools in the world that had a computer lab and was able to use their Commodore PET computers, Apple One computers, and, to me, it was perfectly normal, like oh yeah, I’m going to go to school, and I’m going to go to the computer lab. This is back in the early ’80s. Then the same thing: in middle school, I got to learn programming as a young person and always just had an incredible interest in technology. My parents were incredibly frustrated by the fact that they couldn’t bring something home that didn’t end up taken all apart, sometimes successfully put back together. But more often than not, parts were lost along the way. Then, in high school, incredible opportunities to study programming, electronics, et cetera. And I was really fortunate that I was chosen as the top computer science student in all of California… Danny:Oh, wow. Daniel:…and was able to attend a program at the Lawrence Livermore National Lab where I got to program, work on AI projects on, at the time, the world’s fastest supercomputer and there met some very influential people like Edward Teller who had a big impact on the way I think about technology and humanity and our responsibilities. Danny:That’s pretty awesome. So obviously you’ve been steeped in it since day one. You said you were in elementary school, and you had access to– I think it’s hilarious, you’re talking about how stuff would come home and you would try to disassemble it and reassemble it, sometimes successfully. I remember getting, we got a– I don’t know what we had, some early computer back in the, this was early ’90s, maybe late ’80s. I remember messing around on MS-DOS and just completely jacking up the computer doing all kind of– I don’t know what the heck I’m doing. I’m just pressing; I’m learning little things. It’s very– definitely didn’t take it to the level that you did. That’s for sure. Somewhere down the line, has there been somebody that’s been a big influence on you or has had something that has triggered a pivotal moment in your journey? Daniel:Yeah, there are a number. Certainly, first I would credit my father for instilling in me the values of humanity and our responsibility to help those around us. That has been a foundation of my life from the beginning, and I have to say that that’s certainly where I’ve found the most joy in life is when you know that you’re doing something that is making the lives of other people better. Danny:Absolutely. How did he do that? What’s a concrete way that you remember that he instilled this? Daniel:Yeah, so he was very active in Boy Scouts and so pulled me along through the Boy Scout thing. Service, community service is a really big aspect of that program. Not so popular anymore for a variety of reasons, but I certainly appreciated having that opportunity growing up. He would drag me to the house of widows who– I remember going to this mobile home park pretty regularly to do maintenance on an elderly woman’s trailer. I hated it, quite frankly, at first. It smelled— Danny:How old were you? Daniel:Oh, it was over the years, so probably starting as young as five or six and, then, going all the way up through my teenage years until I left for MIT. It really was a great experience for me, not just in the fact that we have a responsibility to help people, but also we were solving problems. I had to go in there at a very young age. He expected me to go and look at something, figure out what’s wrong with it and come up with a solution. I really appreciate that because as I got to MIT, I have to say one of the things that surprised me, and I was so excited to get to this school where I felt like it would be a mecca of like-minded people who were just fascinated with engineering and technology, et cetera. And it was, but I was a little bit surprised how many people there just chose engineering as a major and didn’t really eat it and breathe it and sleep it like I did. So I was surprised when I got there and people didn’t know how a car engine worked. They didn’t know how to rebuild an engine. They didn’t know how to build a robot. So the fact that I had a very hands-on childhood was very important in developing, at least the way my brain works which is, boy, if I don’t understand how that thing actually works, I’m not going to be satisfied until I do. I think that broad exposure to a very wide range of different disciplines has been one of the key strengths that I’ve been able to bring to bear at a lot of these things. The innovation, the exciting opportunities, I think, tends to occur at the interfaces between different disciplines. I’m very grateful for that. Danny:That’s an awesome story, and it obviously is a testament to, like you mentioned, opening up, talking about your vision on how you dedicate 10% of the time, your employees’ time, the company time, towards non-profits and charities and helping over there. Obviously, I just think that’s such a fascinating story on how, obviously, that has shaped you from the technology standpoint from a figuring things out mode and also that greater aspect of humanity. I think that’s, actually, a very beautiful story. Daniel:Well, and I think that one of the things I’ve learned over the years is that focusing on the greater good is good business. And early on, I took a lot of heat for that. I took a lot of heat for people suggesting that, “You couldn’t really run a company, a socially responsible company, and be a real company.” It was, maybe, a lifestyle company or something like that. I wholly rejected that premise. I believed that from…and I think that the other aspect is, a lot of times people feel like, “Well first, we have to achieve massive economic success. Then, once we’ve done that, maybe we’ll think about giving back.” I think it’s important and incumbent on each of us to figure out how to give back immediately, every day, starting day one. So the 10% community service policy opportunity that we’ve created for our employees has been incredibly successful from a business perspective. Attracting and retaining the world’s best talent, attracting and retaining people who are team players, who are uniquely capable of working within a team effectively and solving problems together, we believe we’ve really benefited from that over the years. Danny:Absolutely, sounds like it. I love it. I think that’s fantastic. Let’s jump into– we talked about this a little bit at the beginning. But this is industry challenges or, as I like to sometimes phrase it, as opportunities. Obviously, there are a tremendous amount out there right now. We talked about– flexibility, obviously, was a huge piece as we look at supply chain resiliency. I loved your analogy talking about the industrial revolution, for example, which, I think, is fascinating. When you look at history and just how quickly, over the last 120 years or so, how much we’ve evolved technologically. Look at manufacturing. Look at the speed of travel. Man, the fastest we could travel at the turn of the century was what, 30 miles an hour or so? Then, when we had the Apollo missions, we’re doing 17,000 miles per hour, something crazy like that. Daniel:Yeah, it is a really interesting evolution. And I think part of what makes it both simultaneously incredibly exciting and somewhat scary is the fact that the pace only accelerates. Technology creates the opportunity for more technology faster. And this move from purpose-built machines to general-purpose machines has really been driving that. So the fact that it used to be that a cell phone was to communicate remotely with somebody and now it is the basis of our society, in a sense, and you can use your cell phone for just about any task. Not something that anyone really would have predicted, but the impact that technology has only accelerates. And so that’s really why I feel like it’s important for engineers to take responsibility to think about– not necessarily completely own, but to at least think about– the impact of the technology we create. This was really made clear to me when I had the opportunity to talk to Edward Teller at the Lawrence Livermore National Lab, had a big impact on me, not necessarily anything specific he said, but just thinking about the gravity of the implications of the hydrogen bomb and all of the factors that would come into that. You can have a variety of opinions about it. I don’t think there’s any right or wrong opinions, but the fact of the matter is, we need to be thoughtful about the impact the technology we build will have on the human race. I don’t think it’s sufficient anymore to just say, yeah, we’ll build this stuff, and we’ll let other people figure out what’s right and wrong. The technology in some sense is shaping what’s right now. You think about social media. It’s just a fascinating issue. It goes back to this idea, we’re not going to be able to, we just simply cannot predict the future at this point. What is going to be happening five years from now? Who knows. Danny:Yeah, absolutely. I think that’s interesting, and I think that’s fantastic. Do you have a methodology or anything on how you, even inside Vecna, of how you think about… we’ll call it purpose-driven engineering or R&D. Is there a certain phase you go through to say, hey, let’s really think about the implications of this? Daniel:Yeah, I think that it’s a team effort in the sense that we are very driven by the idea of empowering humanity. Any products that we get involved with can’t be about just making money for somebody as much as it is how do we improve productivity allowing the human race to accomplish more than ever before? How do we make sure that that benefit is accessible and available to everybody? Our goal is to improve life for everybody on the planet. Sometimes that takes a little bit of time for the benefits to get there. But again, you think about something like the internet. The massive impact it has had on people’s ability to achieve security, safety, equality, access to capital, micro-loans, to end abuse and those types of things, far, far, far reaching. That wasn’t what the people who were working on connecting two universities over, connecting the computers at two universities: they weren’t thinking about any of that. They were thinking about science and building rockets and collaborating. But then this vast, positive social impact– and there’s negative, too. But on the whole, I think we agree the best positive social impact comes out as a side-effect. That’s the key thing is that the side effects tend to be far more impactful than the original reason that we were building the technology. Danny:Yeah, I’d say it’s probably next, near to impossible to– well, it is 100% impossible, I think, to actually predict, hey, what’s the good or the bad or whatever for this. But I do like the idea of thinking about it. Certainly, as we get into technology and how rapidly accelerated it continues to be that there’s a lot of, specifically around AI and machine learning, and obviously robotics is being thrown in there. There’s a lot of, well, it’s really interesting. Is it one day going to be Terminator where machines are going to take over? A lot of interesting debate and conversation about that. I think that– I’m totally blanking on his name right now– Tesla Daniel:Elon Musk. Danny:Elon Musk, thank you. I can’t believe I just totally blanked on that– has some interesting thoughts, and I’d be curious on yours. Daniel:Well, it’s interesting that you brought up Elon because he said something that I really respect not too long ago. When the Model 3 was languishing, production wasn’t happening at the rate it was supposed to, he Tweeted about how he, Tesla, was owning a mistake that they made. He said, “I made a mistake. We tried to over-automate.” Then he said that people are vastly underrated. This has been the thesis with which we’ve built our automation approach is that it’s really about empowering the human worker, not replacing the human worker. If you’re focused on trying to replace humans and go straight to this lights-out automation where humans aren’t involved, you’re not going to achieve the kind of results, the kind of value creation that you could otherwise, the kind of resilience. There are always problems. There are exceptions. This is exacerbated by the fact that the world is changing more rapidly. The types of products that need to get to consumers are changing rapidly. And so things are going to go wrong. Technology isn’t good at handling things going wrong. People are good at things, handling things going wrong. Danny:That’s very true. Daniel:And so achieving that ultimate, that optimal pairing of humans and the technology is really where the key to success is. And so I was really grateful that Elon acknowledged that. Humans are incredible, and until you’ve built a robot to try and do something that humans do, it’s really easy to just believe Hollywood. I’ll give you one brief example. Early on– you mentioned the Terminator. We were working on a military research project, a robot to rescue a soldier from the battlefield. It was called the BEAR Robot. I was on an interview with the BBC, and of course the very first thing they said is, “Now you’ve built the Terminator.” I said, “Well, no, we haven’t built the Terminator. First of all, the robot’s objective is to help. Second of all, that’s Hollywood, and it’s important to understand the difference between Hollywood and a lot of the fear, uncertainty, and doubt that surrounds these things compared to actual concrete information.” I was meeting with one of our program sponsors on this BEAR Robot project just to draw out this point. He said, “And I’d also like you to have the robot pick up this bottle.” It wasn’t part of the project, and I said, “Well, that’s not really part of the project, and to boot, that’s– ” and this was a decade ago– “that’s a completely unsolved academic problem, an incredibly hard problem to solve.” And he says, “Well, why? We paid for cameras for the robot, so it can see it. Just tell it to pick it up.” Danny:“Oh, hang on, real quick. Let me just–” yeah. Daniel:Well, and so that’s the thing. We take an incredible amount for granted as human beings because we are amazing. Danny:Yeah, the amount of autonomy that we have, yes. Daniel:It’s amazing. The computer doesn’t see things. The computer gets a series of zeroes and ones. And somehow, a programmer has to take those zeroes and ones and turn them into some kind of useful information to then make the robot take some actions. We are so, so far away from the Terminator or AI becoming alive and threatening the human race. Now, humans can use technology to hurt people. That’s what we really need to be careful of. But I would say, in general, my feeling is that we don’t need to fear technology for technology, the technology itself. What we need to do is go back to my original premise. We need to be thoughtful about how technology is used and applied and make sure that we’re not leaving people behind and make sure we’re not hurting people and make sure that the technology is helping to empower humanity, not create more problems. Danny:Oh, great. Daniel, listen, I’ve really enjoyed our conversation. This has been fascinating. We’ve talked about a lot of different things. We talked about Terminator; we talked about having that human experience and really being thoughtful around design, around products there. But also, I love your stories about growing up with your father and just learning to help people and really building a company that can really be focused on, or part of a mission of doing good for people. I think that’s fantastic. Then, obviously, talking about Mass Robotics and what you’re doing. I think you guys are doing some pretty amazing work and some stuff there. So for anybody who would love to come check you guys out, I guess go to, what, vecnarobotics.com? Is that the right URL? And then, Mass Robotics, what’s the website there? Daniel:Yeah, massrobotics.org. Danny:Perfect, dot org, so couldn’t be any easier. So Daniel, thank you again so much for your time, and– yeah. Anybody wants to— Daniel:My pleasure as always. Danny:Awesome. Well, that wraps us up today. Thank you so much for watching or listening to today’s episode on the Executive Series here with Daniel Theobald with Vecna Robotics and Mass Robotics. Obviously very, very interesting stuff we talked about today. So thank you for watching or listening. Listen, if you are not on our email list, you need to go to IndustrialSage.com right now, and you need to subscribe. Why? Because you’re missing out on fabulous content like this where we talk to other executives in the manufacturing and industrial space, technology, and supply chain; because there’s amazing things that are going on right now that you need to know about. We have manufacturing news and a whole lot of other content that you’re missing out on if you’re not on right now. So that’s all I got for you today. Thanks so much for watching. I’ll be back next week with another episode on IndustrialSage.
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| What Manufacturers Can Learn From Amazon’s Transactional Ease Playbook This Holiday Season | 15 nov. 2020 | 00:13:31 | |
Manufacturers would do well to take notes from Amazon’s tactics to create transactional ease for customers this year…
Danny:
Hey, what’s up? Danny Gonzales here with IndustrialSage. Hey, listen. Today we’re going to talk about a little bit more around transactional ease and that customer experience and being customer-obsessed. So if you have been following IndustrialSage recently, we’ve launched with the Bright Ideas Series. It’s by Acuity Brands®, so Bright Ideas by Acuity Brands on IndustrialSage is very exciting. A lot of great topics that are coming out on a weekly basis. This was launched back in August, and so it’s been fantastic. So one of the episodes that was released, maybe a couple weeks ago was around transactional ease. So we had Acuity’s, some of their website team on. Another one, we had– I think the episode was called “Transactional Ease” with their CTO and other people. And they were talking about just really the importance of having website– not just website design, but just the overall sense of making it very easy for your customer to work with you, to be able to buy from you. And that’s such a big, big thing, especially now, with Covid times right now, it’s been, obviously, very challenging. But this is really something that, ultimately, is something that really was super important before. There was a lot of conversation around being customer-obsessed, being customer-focused. and looking at how we sell all throughout, really that whole process. Whether that’s we have no idea who you are through we’re courting the relationship, and you’re a sales-qualified lead and we’re getting you to the sale to we’ve made the sale and, then, afterwards, how do we actually facilitate that, that post-sale close? And it moves into customer service, and then hopefully they buy more and more and more and more and really looking at how we help to make things a lot easier. I know in that episode, specifically, that we were talking about looking at the user experience on websites. So looking at ecommerce is a really big thing for manufacturers right now, especially with COVID. It was a big deal, again, before, even bigger now because trade shows and in-person events, all these things, have been greatly reduced or completely eliminated or canceled. And so everyone’s been making this switch to how do we sell virtually? How do we create this experience? How do we make it easy for people? And so what we have to do is really get into the minds of our customer and get an understanding of what their pain is, what they’re going through, how can we make working with us very easy so it’s, man, that was awesome. It’s like a click of a button, and boom. Let’s eliminate the amount of clicks. So one thing that I wanted to show, a little show and tell today. This is a catalog. It’s very exciting. I got this a couple weeks ago, or maybe a week or two ago. And this is from, believe it or not, Amazon. Now, I’m not sure if they’ve done this in previous years. I haven’t seen it. That doesn’t mean they haven’t done it, but this caught my eye, and I wanted to share with you what this is. This is, basically, a product catalog. You may think to yourself, “Hey, wait a minute. We’re talking– you just mentioned, Danny, about ecommerce and how companies need to make that pivot in the– ” Well, yeah, but there’s also a thing where, we’ve also got an interesting thing going on right now which, again, was happening before, but we’re seeing it now, is the digital channels have, there’s been a massive rush to it. How many virtual events have you seen? How many webinars? How many Zoom conferences? You’re probably going through Zoom fatigue like everybody else. But even before that, let’s think of email marketing and all these different things. Those channels were getting really clogged. And so brands really needed another way to be able to get in front of their audience and think about this transactional ease thing. Think about the audience who Amazon is targeting. What this is, is this is a toy catalog for kids. I’ve got a couple kids, and let me tell you, here’s what happened– and I know you know, and you can guess exactly what happened when they saw this. We got this sent to our office because we buy Amazon stuff like everybody else. But also, at my house we got that as well. The second the kids found this, it was nuts. I mean, they were tearing through it, and they were marking up everything that they were going to get. And it was amazing; it was so exciting. They’re, “Mom, Dad, we’re marking up our list, and we’re going to show you what we want so we can go through it.” Wow, that’s a $400 thing. Okay, I don’t know about this. It’s exciting. And so I thought it was interesting because, again, to my knowledge, I don’t think that Amazon has done this in the past. Again, maybe they have; correct me. Anyone out there who’s watched this on social media, let me know when they started doing this because I’d be very curious. But I think it’s interesting to go back to ecomm, from an ecomm standpoint that they’re delivering through direct mail. They sent this to our mailbox. And they understand the audience. The audience is kids. Well, the kids might not, probably don’t have access to Amazon, so how do we get in front of them? How do we create demand? Then, how do we make that sale? Genius. So I want to unpack what they’re doing in here. I think there’s a lot of lessons that we can learn, even when we’re selling B2B in here. So I want to jump in. We’re doing the document cam, camera one over here, I’m going to grab my phone real quick, alright. This is going to be a little bit of fun show and tell. Okay, so here we go, catalog super exciting. Let’s open it up, alright. First thing we’ve got, transactional ease, make it easy for your customer. Look, we can write a list right here. We already know that we’re coming up with stuff. Let’s make a list so we can get it out to our, to Santa or parents so they can send it to Santa or whatever is going on there. We’ve got recipes here for hot cocoa because, you know, that makes sense. Alright, let’s go more– some fun games. Here we go; alright, cool. Here are the games, everything, alright, and toys. First thing that you will notice is that there are– well, there’s first of all, what jumped out at me, is there’s no prices on here. That was like, hey, how much is– all that stuff. That’s number one, which is interesting. Number two is that there’s very few words. Well, our audience, not all of them can read yet. Some of them can, but still, I thought it was– It’s all very visual. It’s very simple. And it’s all image-based. So how do you actually find out the prices and all that good stuff? Well, two ways: one, see this little thing up here? This is a QR code, if you don’t know what this is. I’m sure you’ve seen it before. Here’s a cool thing about QR codes, and this is something that can be really valuable for everybody. You can open this; you need a QR code reader. Well, iPhones, for example– I’m not sure about Androids– but iPhones, I can just swipe up, go to my camera like I’m going to take a picture and then, guess what? I go there: boop! It creates a little link. Look what pops up– Amazon, dah-da. There we are; there’s the toy section. We love toys. Alright, that’s pretty cool. I bet you’re really collecting some data on that. There may be some retargeting. Alright, so that’s number one. You can go to that; it’s on the main page. But what if I wanted to know– this truck here is really cool. I want to know what this is. So what you’re going to do is inside the Amazon app, you are going to come up to the, you go to the camera, so let me go here. Here you go to the little camera icon, and there’s the truck. And then, guess what? I’m going to press Start. Ooh, look. There’s magic things going on. And bam, there’s the truck that we were just looking at, $120– really, $120? Can a kid ride in that? I guess they can. Free delivery, wow. Okay, so pretty cool. What do you guys think about that? I think it’s pretty neat. So we’ve got a bunch of other toys and other cool things. That’s essentially– there’s some games and some different things in here, dolls and all kinds of fun things. So we can go back to the main camera. I’m done with the document cam. So that, essentially, is it, a little bit in a nutshell. Simple, but a couple really, really cool things and a couple applications that I see very, very concretely for you. It doesn’t matter what space that you’re in. But a couple different things is, think about, wow, they’re going to print. And it’s direct mail. A lot of people thought, well, direct mail’s dead, and all this stuff. Well, no, it isn’t. It’s just, everyone has shifted over to digital. And digital’s still, yes, it’s super important. It’s really, it’s the merging– see my IndustrialSage things, stickers. It’s merging these two technologies. We’ve got digital, and we’ve got traditional print. And this is still super relevant, but it’s really powerful when you bring these two together, and we’re starting to see a lot more of that. You’re starting to see a lot more omni-channel campaigns. And when you have a channel that gets very clogged, email, electronic mail has been very cluttered lately, for the last several years. Have you noticed, maybe your actual mail, the snail mail… I would bet you that you’ve probably experienced a lot of what I have, and others: where that’s actually gotten dramatically reduced. How much junk mail do you get? You get way more junk mail in your actual email versus your snail mail. So that’s a really interesting opportunity. The other thing that I thought was very, very valuable and interesting that works really, really well for you is the idea of using QR codes and visual scanning apps to be able to take you to product information. Obviously the natural thought process is saying, well, if you’ve got, you’re a large distributor or you’re a manufacturer and you actually have a product catalog, that’s the natural thing is okay, how can we merge these two worlds together where I’ve got this here, and I need to be able to buy it. How could I interact with these two so that I could help make that faster versus let me look at this here; now that I’ve got to go on my phone. I’ve got to look up the web address, and then I’ve got to figure out– what’s the product name on here? No, we’re making it very, very quick. Couple little swipes and camera snapshots and boom, I’ve got– you’ve got me right where you want me. So I can get that product information, and I can make an informed decision based off there. So I think that is really, really cool. Another really great use case I think is actually post-sales. So imagine where you’ve already sold– let’s say you’re an equipment manufacturer and you’ve got this big, multi-million- dollar, hundred thousand-dollar machine. And you go, and you sell it to whatever company. And you go install it, and you’ve got to do all this training. You’ve got to do all this stuff. Then, you leave, and then, what happens? You’ve got to turn the keys over and manuals and whatever to the plant ops and then, they take it over from there. Well, what happens when somebody else comes in? Maybe somebody is using this, and there is a lot of turnover in that role. Or maybe you have a lot of 1099 labor, contract labor that comes in and uses that, and you need to be able to onboard them a little bit better. Well, instead of saying, “Hey, here’s a manual,” what if maybe there was a manual with QR codes that could take you back to some of these training videos that you could learn on how to do that? Or what if there were frequently asked questions with issues, technical issues that might happen, whether it’s maintenance or just troubleshooting areas that are pretty frequent that you can create very, very easily and very quickly content to make them happy, to make that transactional ease even better so that they’re like, “Wow, this is awesome. They thought of me. This is very cool. It’s going to keep our downtime a lot lower.” I’m happy because we’re making it a lot easier. So I just thought it was great. I wanted to share this magazine with you. If you haven’t gotten it and you have kids, and you do get it, quickly throw it away. No, I’m just playing. But yeah, great way, great thing. I love it. I thought it was super cool, so I wanted to add that on to the episode that we saw on transactional ease with Acuity on the Bright Ideas by Acuity Brands. Anyways, that’s all I’ve got for you today. Thank you so much for watching or listening. Like I mentioned, if you haven’t checked out the Bright Ideas by Acuity series, I highly recommend it. Check it out, especially if you work in any construction or industrial environments. They’ve got a lot of really cool solutions and stuff there and some great topics on that series as well. So, anyways, that’s all I’ve got for you, and I’ll be back next week with another episode on IndustrialSage.
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| Ware: Ian Smith | 08 nov. 2020 | 00:29:04 | |
Ian Smith, CEO of Ware, shares the story of his career and how he ended up in the business of employing drones for supply chain inventory tracking.
Danny: Hey, thank you for joining me today on today’s IndustrialSage Executive Series. I am joined by Ian Smith who is the CEO at Ware. Ian, thank you so much for joining me today. Ian:Pleasure to be here virtually. Thank you for having me. Danny:I’m excited to talk more and learn more about you. Thanks for coming on. So for those who are not familiar, we’ll start with this. Ware, what do you guys do? Ian:Yeah, so at Ware, the easy way to explain it is we deploy self-flying drones inside of warehouses to automate the tracking of our customers’ inventory. So all the stuff on the pallets in the warehouses that the lay-people, you and I as consumers never see or even think about when we click Add to Cart, Checkout, and it shows up at our door, there’s an entire, obviously, massive industry that manages all of our stuff. So we at Ware tell them where their stuff is. Danny:I like it. I think I see where you’re going with this. This is cool. Well, I’m excited to jump into that and get into the back story on everything. But before we do that, I really want to get to know a little bit more about you, about Ian. So take me back. How did you get into this space in this industry? Ian:Well, it’s a saga. So I grew up in Houston, Texas. My dad is an engineer at NASA, and so I grew up always fiddling around with machinery, cars, and building things and just working in his shop with him. Eventually, we settled on building a model aircraft. So if anyone’s built model aircraft before, today you can buy a fully-assembled one. It’s really easy. But there used to be the hard way of doing it, which is the way we did. It was thin balsa wood. It was glue that you have to set overnight. I was 10, 12 years old. Danny:Wow, so we’re not talking an RV-10 or an 8 or anything like that. We’re talking Ficaro. Ian:Yeah, yeah, yeah. So these– well, small, radio-controlled model aircraft. Danny:Okay, okay. Ian:So you had the heat shrink. You had to use heat shrink and a heat gun. And it was really, it was really difficult. And it was a huge test of patience, but that was my first taste of aviation. And, of course, in between that I would be going into the space shuttle mock-ups where the astronauts trained. So I was really lucky to be able to do that since my dad ran that building at JSC in Houston. And eventually I became a helicopter pilot. That was my first profession, commercial helicopter pilot, flight instructor. I was a new flight instructor in 2008 which, as everybody knows, was a pretty bad economic recession. I used to hold, I guess, the honor of having that on my list of experiences, and it was the worst time to be a new flight instructor. But unfortunately with Covid-19, I’m pouring one out, proverbially, for all the new flight instructors now because it’s got to be pretty tough for those folks. Danny:Oh, yeah. Ian:So in 2008, I pivoted. I spent a lot of time in aviation brokering jet fuel to corporate flight departments, the Gulf Streams and the Hawkers and all those things that the big companies fly. And I just remember, very vividly, in 2013 I was going to the grocery store. I parked my car. I was listening to NPR. I heard this story about drones and how they were a thing and that there were people out there using small drones that they built to make money. But unfortunately, it was illegal. And so that piqued my interest, and I didn’t realize that the model aircraft I was building that were so basic and used little, tiny gas engines and all the heat shrink in the wood were now plastic with PCBs in them and flight controllers and auto-pilots and all that stuff thrown in there, GPS. And they could fly themselves. And so I made a very, in that moment, I made it my goal to be in the drone industry as a career. Since then, I’ve worked at multiple drone start-ups on the software side, the hardware side, in the US, in Europe. I have a podcast about drones called Commercial Drones FM. And now, I’m the CEO and cofounder of a company that deploys drones, flying robots, inside of warehouses for inventory tracking. So it’s been a journey through many different types of aviation and aerospace, but there’s always been that element of something flying has always captured my interest. Danny:Oh, that’s awesome. That’s super exciting. You’re speaking my language. I’m a pilot, but I’m not a– I’m a private pilot, so not an instructor or anything like that, or commercial. But love all things aviation, so your whole story, completely resonating with me. I’m not going to lie; I’m a little jealous that… you said your dad ran the JCS building, and you got to go on all the– so I’m up to here with jealousy. Ian:That part was crazy. Yeah, that’s the one thing that I think is the coolest thing because you can’t just do that as a guest, going in. I would be playing around on all the equipment the astronauts use to train. There’s these zero-gravity– I probably shouldn’t even be saying this. But there’s these things you could use, and I would look up, and the normal visitors to JSC to visit would be watching this glass chamber. Then, there’s this little 6-year-old playing with all this stuff. Danny:That’s awesome. That’s cool. So obviously, from a young age, you were highly impressionable with that, with your father– I’m guessing, is he a rocket scientist? I would just say, yes, he’s a rocket scientist. Ian:Just a mechanical engineer. He’s really good, though. Danny:Obviously, that shaped you. That helped influence you. Has there been any other areas or somebody that– maybe it’s your dad– throughout that have really had a big impact on your career, helped maybe shape that trajectory or just really inspired you? Ian:The thing that comes to mind when shaping it is, when I was trying to determine, I think I was in high school, still. We had some family friends who actually worked in aviation, and I was considering becoming a pilot. I went over to meet some of them at their hangar. They had a big– it’s a big, public company, so they had beautiful corporate jets. I came in there just to get some advice, talk to all these old-salt pilots. They’re the guys that are flying around the executives of this company. I said I was interested in helicopters, and they all told me not to do it. So I did it. I was like, you know what? No. Helicopters are way cooler than airplanes. And so, yeah, in terms of that, I wouldn’t call it, I wouldn’t really say a specific person. I think I’ve always been intrinsically motivated. This probably stems from my dad who was always down in the shop tinkering around. I always have to be tinkering on something, building something, feeling like I’m doing something and keeping myself busy with my hands or my mind. And so I think it’s that kind of stuff that really drove me towards this and always wanting a challenge. And yeah, aviation is challenging. It’s risky. Danny:Yeah, just a little bit. That’s awesome. So do you still fly? Ian:I don’t, no. No, it’s really expensive, prohibitively expensive to fly a helicopter which is a bummer. Some people ask me sometimes, “Hey, I want to become a… get a private pilot rating in a helicopter.” I’m like, “Okay, well be advised that you can’t just get it and, then, fly at your leisure.” You literally have to keep flying in increments. If you stop flying, you can lose your license, and you have to go through the whole thing over again. So it’s really expensive to have it as just a hobby. $250 or more per flight hour, that’s after you’ve got 40, 50, 60 hours to get your license. So fortunately, I do have my commercial rating which is good for life, which is some weird loophole that for some reason, I don’t have to keep up with my flying. I can just get in any time. But unfortunately, no, I don’t fly still. Danny:Well, I’m assuming you still have to do, I don’t know, some sort of biennial flight review or something for that. I don’t know, for the commercial rating, for efficiency— Ian:No. Danny:No, really, interesting. Ian:If I wanted to fly, the only scenario is if I wanted to fly a passenger and get in the aircraft with me, I would have to undergo I think– it’s been a while. Danny:Yeah, yeah. Ian:I’d have to undergo something, and so I know that for a fact. I would probably feel okay getting in the cockpit with just myself, but I would still be nervous to take any passengers. So I’d definitely want to get a few hours of instruction and get all signed off again just to brush up on things. Danny:Yeah, no, I hear you. No, I think that’s super cool. That’s exciting. So, well, let’s jump in a little bit more. I got a little bit of background in how you started. Tell me, what made you want to start a company? What was that thought, or was there a moment that you said, “Hey, you know what? I see this opportunity. Let’s go.” Ian:I think I’ve always wanted– I’ve always been, didn’t know what I wanted to do. So before, I told you my glorified version of my career. Of course, you don’t talk about the things that were tough and difficult. In college, I didn’t know what the heck I wanted to study. You’re supposed to pick your degree, and you have no work experience. Danny:What did you study? What did you end up doing? Ian:At first, it was architecture. Danny:Okay. Ian:Which actually… I kick myself today because I just love architecture. I think it’s amazing in being creative and designing things and seeing it come to life. And people using it… it’s just so cool. Then, I pivoted to art, and I hated art because it was just, who painted this? Who painted this? What style is it? And, then, I just wasn’t into it. This is in college. Then, I left college to go back home because I wasn’t feeling it. Then, my buddy was like, “Hey, do you want to fly helicopters?” I was like, “Yeah, let’s do that.” So I did that, and I was thinking about doing cooking school, culinary school, getting a degree there. So I’ve always wanted to build stuff and create things. Flying helicopters just seemed really cool at the time. So that, combining my curiosity to build things and fascination with technology, it really motivated me, I think, to try to join– I wanted to be where all the technology was. So right now I’m saying this today, but because of all the Covid-19 and this exodus, a lot of folks are leaving San Francisco and the Bay Area. But still, it’s Silicon Valley here. So this is where tech is. So this dream of mine, ever since I lived in Houston, was to work at a company in San Francisco. So finding the niche with drones and having that come up at the same time my career was starting, being able to pivot to that was fantastic. Then, being around start-ups, being around entrepreneurs and highly motivated people rubbed off on me as well. And one of my goals was, okay, start a venture-funded start-up in San Francisco. Raise over a million dollars. Say that you’ve done it and experienced that. You learn so much. So being a part of start-ups and helping build them was amazing. But also, with my podcast that I started, it’s also a business. It generates revenue. I’ve had public company sponsors. That scratched my itch. But, then, finally now with where I’ve got my co-founder of a venture-funded start-up, we’ve raised over a million bucks at this point, so that’s cool. Danny:That’s awesome. When did the venture start? Ian:We started Ware, technically, the company was started in January, 2019. But we’ve been working on this problem in earnest for over a year and a half, so 20 months or so, give or take, not that it matters, those four months. But in our relatively young life of the company, I think, yeah, every month does matter. Danny:Absolutely. Did you start off– obviously, to go to the material handling space, supply chain, inventory management, did you start off that way, or was it something that you, through discovery, found your way there? What did that look like? Ian:So one super cool thing that I’ve always loved about working in the drone industry is that– I wouldn’t even call it the drone industry anymore because it’s an industry that exists to help other industries solve problems. So there’s no drone industry unless you’re making parts and pieces and components of drones to build the drone. There’s drone services and things like that, but you’re always applying these flying robots and the software, the data, and the results that they can provide to an industry. So it was fascinating to learn, in my early days with drones, about agriculture, about construction, oil and gas, utilities, linear infrastructure, mining, everything. All those industries can benefit from the power that drones bring. And that was so fun for me, the variety of learning of those industries and finding and connecting the dots from the drone to the data to the industry and, then, figuring out what deliverables they needed to call it a success as a customer. So my fascination and my motivation with drones is that they’re applicable in so many scenarios and industries. So with supply chain, logistics, warehousing, I had basically no experience with that. I did have a stint for a year as the general manager of an ecommerce company that focused on smart home technology. It was a company called Tink in Germany, and I was the general manager in the US for the expansion. That was my first taste of understanding drop shipping and of understanding logistics and fulfillment and the distribution centers. And that was the last thing, or the thing I did right before starting Ware. So it was understanding and knowing of this industry, understanding the need that they need better cycle counting. They need more automation. The need to– cycle counting and tracking inventory in warehouses has not changed for hundreds of years, materially, maybe even thousands. It’s still the same thing. The world’s biggest companies are having humans strap themselves into a piece of machinery, go up 30 feet and, then, use their fingers to count their products, just like this: one, two, three, four, five. Then, they count the bottom row. Then, you do the multiplication. Then, you know– it’s shocking. I’ve watched one of the world’s largest companies have their inventory counted like that. It’s slow; it’s error-prone. These people who do it probably don’t like doing the same thing monotonous all day. So applying drones to it is a no-brainer. So to answer your question, I had almost no experience in it. But I love to learn about these new industries and finding out the ways to help solve their problems. And build the product and the service to meet the needs is one of the most exhilarating parts of this. Learning and talking to the people that work in those warehouses has been awesome. Danny:Yeah, I think it’s super interesting, and it’s exciting. Call it manufacturing, supply chain, warehousing is really going through a huge disruption right now. It was going through it before Covid. Obviously, now, I think we’re accelerated by five years, if not more. But the need for that disruption has been happening. You’re seeing all kinds of really cool innovations and things that are happening. And I remember, when I first started hearing about the ability of deploying drones, UAVs, whatever you want to call them, to do inventory management and tracking, I thought it was awesome. I think it was really amazing. What are some of the challenges that you see in the industry relative to inventory and even Covid, maybe stuff coming out that you think that are going to be pretty relevant? Ian:Yeah, so humans have become this liability in a post-Covid world or a mid-Covid world. They’ve always been, let’s face it, a liability. What if a human, one of your human workforce, your employees, falls and hurts themselves? Nobody wants that. Plus, when you tag onto the cost of that, then there’s the insurance to mitigate the risk and all that, workers comp, et cetera. So they’ve always been a liability, whether– every employee, as an employer, knows that themselves. With Covid-19, we’ve talked to some of our earliest users and customers of our product. There were scenarios– normally in a warehouse, it’s full of people. People are walking around. They’ve got lunch areas and break rooms. They’ve got all these– they’re all over the place. It’s not just stuff on shelves. In these big warehouses, there’s people everywhere. They were in close proximity, like normal, like any office, probably a little less close proximity than a normal sit-down office. There were scenarios where I’m talking to a company that, anyone listening to this would know if I named them, they have stores all over the United States, everywhere, thousands of them. And they had a breakout of Covid-19 in one of their facilities. So they had to shut down the whole facility. And it was not a breakout, actually; it was probably two people that tested positive, but you’ve got to take all the precautions. Shut down the full facility. Sanitize everything everywhere. A few days later, they’re back up and running. That probably cost them millions of dollars in lost everything, lost revenue, everything. So the fact that humans can carry viruses that can shut down business is difficult. So that is a challenge that the industry faces that, I think, our technology helps a lot with. Keeping humans from doing all these manual tasks– humans are so much better at thinking with our brains and making decisions and deducing. And there’s so many other more– operating the machinery to physically move things, not just counting things and observing and looking at stuff. Counting, really? We’re so much more capable than that. So those same humans are being reallocated to different jobs in the facility. So, in some cases, it requires less humans to do that same job, but they can do other things. Now, I’m not even going to get into the fact that, of course, there’s automation coming for everyone’s job in the warehouse. That’s a tough pill to swallow. We’re not the arbiters of truth on that. We are not trendsetting on that or anything. We’re merely fulfilling the needs for the customers and what they’re asking for. So you might be, just listening to this, surprised that the vast majority of the customers we do talk to, their number one goal is not to reduce headcount, even though that is part of the liability concern with viruses that can spread so quickly now. But it is, actually, increasing accuracy, increasing frequency. The robots are faster, et cetera and so on. So the big challenges related to Covid and with robots, it’s so deep and vast I could go and snake around in any of these areas here. But those, I think, are the big ones that are easiest to talk about and understand right now. Danny:Yeah, absolutely. I think it’s interesting, you mentioned, too, that a lot of people that are not necessarily saying, hey, it’s a primary motivator or it’s the number one reason why we’re looking to implement more technology solutions because we want to reduce headcount. I think that, especially, if anything that Covid-19 has taught us, especially with supply chain and all the issues, is really that resiliency piece. So if it wasn’t better, faster, cheaper before– I mean, it was– now it’s even more so. So how can we add things into the supply chain that are going to increase that resiliency by increasing the efficiency? So certainly I imagine that running inventory the old school way would be done once a month, once a week, whatever. Now, I imagine you can just run that out on a, consistently kind of thing. Ian:Exactly, yeah. Just to touch on another one of the big benefits, because it is interesting, is that the pace at which humans, and a team of humans– okay, so taking a few steps back– is that, if you think about ecommerce growth, warehouses have grown to these giga-structures, one million plus square feet, two million square feet in some cases, these gigantic structures that are a mile long. It takes you 10 minutes to walk from one side to the next. People drive golf carts and stuff like that in the warehouses. They’re massive. So imagine your job is to cover and count everything in that warehouse manually. Well, the only way to also achieve, how do you do it faster? You hire more humans, and you throw more humans at the problem. And it’s just really inefficient. So the speed at which robots, in this case, flying drones, can fly around and take pictures, boom, boom, boom, boom, boom, up and down the racking, looking at everything and just be really quick about it is 20 plus times faster than humans can do it. So it gives, in terms of resiliency, it gives the customer unprecedented access, visual audit log history of their inventory, images of every piece of inventory in their facility, something they’ve never had before, at a pace and a rate and a frequency of which they never thought fiscally possible. So it’s changing the way that they can view understanding their inventory when it’s in a warehouse or a distribution center. Danny:That’s interesting. I was curious; I was going to ask about what the pick-up on efficiency was, and you said it was 20 plus X, which is, that’s a good improvement, saying that facetiously. You mentioned that the way and the how that you’re doing it, in terms of imaging technology or taking snapshots and different things. So I would imagine, I’m just thinking out loud here, other benefits would be, too, if you’ve got inventory shrink issues or you’ve got damage, maybe there’s a shipment issue or something and everyone’s trying to pin it on, we all know it was the shipper, it was whatever. No, here it is in our facility, and it was not damaged before– I don’t know. I could see all kinds of use cases and stuff like that. It’s very interesting. Ian:Absolutely. Some might think, oh, just slap a barcode scanner on a drone and fly it around. But we don’t believe that. There’s the old saying, a picture is worth a thousand words. So we want to take pictures and images. And we can tell so much from imagery. There’s so many ways to process an image. There’s very cool ways where you can generate depth from 2D images. So you can start seeing in 3D around what would normally be 2D. So when you look at that and compare, okay, just scan a barcode and tell me where it is, that’s– you’re delivering the status quo. While it still would be faster and, likely, cheaper as a solution, we take it multiple steps further. So now, like I mentioned, visual audit history, looking at inventory on a given date, understanding where it was, not having to rely on someone, maybe thumbing the wrong button when they type it on the scanner when they do the cycle count. Maybe they swapped the 5 with the 9 or whatever, the button below it. Then, all of a sudden, you’ve got an incorrect count, and you can’t verify it. So now, you have a visual audit history. So many different things you could do with images, and it’s much more of a rich data source than just scanning these barcodes that’s out there. So that’s what we really, really focus on. We talked a lot about drones and stuff, and that’s cool, but drones don’t excite me. They’re a means to an end. They’re a tool in the toolbox. They might as well be as exciting as a hammer. If you go in any one of our— Danny:They’re a little bit more exciting, but yeah, I hear you. Ian:A little bit, yeah, a few more moving parts. But if you go into any one of our deployments, day one, day two, folks working on the warehouse floor, and everyone’s just looking at the drone. Cell phones come out, taking videos. This is pretty cool stuff. It’s exciting, right? Week two, no one is looking at that drone. It is merely an appliance inside the warehouse doing its job and getting it done. So the big thing just to drive home, the point here is, the data is what matters. The drone’s not what we’re selling here. We’re selling the service, and the service involves inventory reports, accurate, timely, better than you’ve ever had them before. Danny:That’s awesome. That is fantastic. So, Ian, I think I could probably go on and on and on about the aviation and inventory and drones and the whole nine yards. But for those who would like to learn more about you guys because it sounds like you guys have some pretty cool solutions, what’s the best way for them to get to learn more about you? Ian:Yeah, just pop up on a web browser, getware.com, G-E-T-W-A-R-E dot com. We’re building products at the intersection of machine learning, AI, and robotics in this trillion-dollar supply chain industry. So, of course, we’re hiring. We’re growing; there’s interest. So if you’re an engineer on the software or robotics side, definitely look that up. But if maybe you’re an end-user, customer, or partner, also get on there. There’s ways to contact us, learn about the technology, check out some case studies, and just see if it would be a good fit to move forward. Danny:Awesome. Well, Ian, I really appreciate the time. Thank you so much for spending some time with us here over at IndustrialSage. Ian:My pleasure. Thank you so much for having me. It’s been a nice little break from my normal duties. So really nice setup you guys got, and happy to have been a guest. Danny:Great, well thanks so much. Ian:Thank you. Danny:Alright, well there you go. That wraps up today’s IndustrialSage Executive Series interview with Ian Smith who is the CEO of Ware. Pretty cool technology they’ve got. So go to getware.com. Hopefully I got that right. It’ll be in the show notes. If you’re listening on our podcast, all of the information will be down there. Hey, listen, we’d love a review. If you are not on our email list, you need to go to IndustrialSage.com, and you need to subscribe. Why? Because you’re missing out. You’re missing out on all kinds of great content like this interview that we had here with Ian. We have manufacturing news. We’ve got more series where we talk to CEOs of innovative companies large and small, all across the US and globally so you can stay abreast of what is happening in the industry especially as things are just constantly changing. So anyways, that’s all I got for you today. Thank you so much for watching or listening. I’m Danny Gonzales, and I’ll be back next week with another episode on IndustrialSage.
Thanks for reading. Don’t forget to subscribe to our weekly newsletter to get every new episode, blog article, and content offer sent directly to your inbox. You can also subscribe wherever you download podcasts so you can listen on the go! Sponsored by Optimum Productions | |||