Damon Pistulka 00:01
All right, everyone, Welcome once again to the faces of business. I’m your host, Damon Pistulka. And with me, I have none other than the manufacturing unicorn. Ray Zagato. Welcome.
Ray Ziganto 00:17
Thanks, brother. Thanks for having me. Great to be here. Oh, man,
Damon Pistulka 00:21
it’s awesome to have you, I just say, well, we talk it’s just it I I just enjoy it so much. Because when, when you know, your background and the experience you have not only in US manufacturing, but setting up facilities, running facilities running global operations. It’s just a treat to be able to talk with someone like yourself with the experience you have and and what you’ve been able to do and what you still are doing with manufacturing. So, so thanks for thanks for being here.
Ray Ziganto 00:52
My pleasure, Dan, thank you. Well,
Damon Pistulka 00:55
it’s it’s really been an interesting past year and a half or so. It’s been, it seems like you’re in half. But I really it’s only been a little over a year now since we decided that the world was going to slow down a little bit and change here. Yeah, there you go as a dogear would do that. But I thought it’d be interesting for us to talk, you know, get get on today and really talk about some of the opportunities that have opened up in manufacturing and some of the challenges that we’re still seeing in manufacturing. Some because of COVID, just some because of normal economic change. And, and I think it’ll be fun to talk about a few of those. Sure. Sure. Yeah.
Ray Ziganto 01:40
Let’s jump in man. So
Damon Pistulka 01:41
if you can, if you can, first of all tell tell people that may not have heard a little bit about your background, so so we can kind of set the stage with that. Sure. My I,
Ray Ziganto 01:51
I came up in what I thought was the I still believe is the coolest part of manufacturing, a lot of job shops, that type of stuff. So my Yeah, my background is been in and out of business development and operations, and overall leadership of job shops, small and large. I’m talking startups, you know, I’ve started them up, I’ve run 1500 person organizations domestically and internationally. And when I say job shop, I’m talking tooling intensive, custom parts and assembly.
So you know, molding, stamping, with automation, and the tooling that goes along with that. So I’ve been around that my entire career. I’m an engineer by osmosis. I’ve just been around technical stuff and have a, I guess, a passion and a knack for it. But I know when to shut the hell up when the engineers are in the room. So I can, I definitely know how to how to encourage it and and keep the conversation going.
But been awesome for last four years have been on my own. My own consulting firm, I’m in a position now where I can help more companies then just, you know, spend 100 hours a week working, you know, for the four walls that happened to be responsible for my paycheck. And it’s been awesome to see so much stuff, so much diverse activity, different industries, different parts of the world. And the good news is manufacturing is alive. And while there’s a lot of opportunities.
Damon Pistulka 03:20
Yeah, yeah, I think you’re exactly right. I mean, I get more excited about it every day almost. And I think that in some ways COVID actually helped us manufacturing concerns, in just, you know, pointing out some of the challenges in a global supply chain, and some of the the need for a global supply chain on the converse of that, you know, yep. So,
Ray Ziganto 03:51
no, I, I see that 100 100% and it’s, you know, it’s kind of a stimulus response type thing I’ve felt for some time and don’t get me wrong, I am absolutely Pro, you know, US manufacturing by American but, you know, I’m a business guy. And a lot of the, you know, the US manufacturers that have clients here, those clients probably do business internationally as well. So, why wouldn’t you follow them? You know, yeah, it’s kind of the the number one thing but as far as COVID kind of being a shot in the arm.
Pardon the bad pun for for manufacturers, frankly, I think us manufacturing has needed some sort of a slap upside the head for for a while. We’ve I think we’ve I think we’ve sat back we let some stuff get away from us. And I think those companies that were doing well we’re kind of again, it’s it’s easy if if things are going okay, what’s your motivation to you know, to drive really substantial change in your organization self while the the the human toll of COVID has been terrible. And then certainly on the business side, there have been, you know, many losses that are, you know, that are terrible as well.
Many manufacturers have have jumped on the opportunity to figure out, okay, we’re resource constrained. Now what? And that’s really when manufacturers are at their best, you know, when an external force, whether that’s a customer geopolitics or a pandemic, tells them that you can no longer do things. You know, the kind of the natural response is a little bit like, Well hold my beer, you know, yeah. And, and it’s stuck. You know, it’s been like that long enough that those, those new habits and routines have stuck. And I think Yeah, my good. Yeah, there’s been some good to come out of it. So
Damon Pistulka 05:49
yeah, yeah, I laugh because you know, manufacturing guys know what hold my beer means. Oh, so funny. Well, we got Rodney, thanks for listening, Rodney. Ronnie’s a works with a manufacturer over here in Washington and and we’ve got said there are a lot of opportunities and you get enough material and I know that the raw material prices in steel aluminum in the in the metal goods have gone up like crazy. And continuing to go up.
Ray Ziganto 06:22
Oh, yeah. Yeah, it’s, it’s brutal. And, you know, part of that’s part of its the downside of you know, as you talked about earlier that the supply chains, in some instances, we’ve cleaned them out too much. Yeah, I’m a you know, and and there are certain areas that need a little more purposeful management, that doesn’t necessarily mean gobs of you know, governmental intervention. But I think there are some lessons learned, hey, every time there’s a typhoon or an earthquake somewhere, every purchasing person around the world goes nuts. When the dust settles, then they’re tasked with how do we make sure this doesn’t happen again.
So unfortunately, we’re living through a period of as Rodney matches like, now, we could do so much more if we can just get them a TV can get it. Yeah, never mind that you got to pay through the nose. You know, to get it but in a lot of places, man, we’re restarting the significant parts of of economies and industries that are that are getting back to work. The shipping challenges that are out there, you know, the logistics issue, freight costs are up what like 3,000% or something? Oh, yeah,
Damon Pistulka 07:29
yeah. Yeah. Anybody that shipping anything you know, UPS or FedEx kind of thing now is, is crazy because the e commerce demand during COVID drove their you know, weight through the roof and capacity. I’ve got actually got a neighbor that has a couple of FedEx routes. And, you know, he said it was like Christmas every day. And, and you know it the Christmas season and delivery. Delivery business is is like you don’t want that to be all year round. Right? It’s so busy. And and that kind of change drove the shipping prices up on everything. Oh, yeah, sure.
Ray Ziganto 08:04
Yeah. All that went nuts. And it’s tough, different industries are getting hit different ways. You have a client in the aerospace industry. You know, I work everything from you know, medical device, people are doing industrial hardware type stuff, aerospace, you talk to those guys getting a titanium forging that has a normal lead time of a year. Yeah, my mind. I’m like, a year, you know, but it’s like, you know, it’s a different industry. So the whole, the whole cadence with which you’re, you know, setting up your supply chain management process, and there are definitely some new dimensions that got added to it. And last year, that’s for sure. Yeah,
Damon Pistulka 08:44
yeah, that’s for sure. That is there’s no doubt about that. Yeah, and only in aerospace. Really? Do you find lead times like that, because I used to run a company where we’ve made f 22 parts and just getting that titanium there. It was 50 some week lead time on it. And, and and then it didn’t always make it.
Ray Ziganto 09:04
Yeah, yeah. And in the intervening 52 weeks, your customer moving out? Yeah.
Damon Pistulka 09:11
Yeah. So that’s always good. Well, the the the thing that’s interesting is now, someone just sent me an article yesterday, it was talking about the manufacturing demand is up. And I think that, you know, wow, that’s probably true or could be true. I don’t know, you know, 100% on that. I, we were talking before we got on, but that’s something that’s happened. Time and time again, we see these peaks and valleys and always,
Ray Ziganto 09:38
when I was, you know, coming up in the industry, you know, I’d see, you know, you start out or you come out of schools and boy things are going great. It’s gonna be a streetlamps gonna be like this forever, and there’ll be a guy look like me going, just wait. Just wait and see. And if you’re around long enough, you do see things, you know, go up and go down. The circumstances are a little different this time around COVID was a weird one. Because it was it was a very uneven impact in the manufacturing sector. The recession 2008 2009 took everybody off a cliff. Yeah. This time it’s been different if you’re supporting, you know if you know hospitality or restaurants that got dicey.
Damon Pistulka 10:23
Yeah, he got hammered.
Ray Ziganto 10:24
Yeah, those guys got killed. anybody involved in packaging? went through the roof. Yeah. You’re even the automobile business. If you were if you had the ability to still work from home, you’re still buying stuff. Yeah, already that you went online. e commerce went nuts. Yes. So you know, I talked to people that have had record years. You know, it was just it’s crazy at the
Damon Pistulka 10:48
time but it was you are exactly right. And I and I feel for the people that were in hospitality and travel and those other ones they got got hammered and I and I feel for him I don’t work with clients like that. And my clients were on the other end of that spectrum where they did 50 plus percent growth last year because they were in e commerce or they or they were manufacturing something they could sell online like you said, and there was in demand a home product.
I mean, if you if you went into a Lowe’s or Home Depot anytime in the last 10 months, you know where what what people are doing they’re working on their homes, they’re they’re putting new you can’t even hardly buy stuff in there. Right they’re so busy. Right? Right and so you go all the way back to supply chain and where that stuff manufactured. That’s those people are busy. Yeah,
Ray Ziganto 11:37
well part of it too is those those seasonal things. What they’re pulling in now got produced you know that the spring stuff you know, what’s what’s their schedule, you know, how do they cycle that? Yeah, you know, most of those guys are probably just about wrapping up what they’re going to produce and ship for spring and summer it’s coming out of warehouses because you know, they don’t they don’t do that j IIT No, no, no.
So so a year and a half ago or whatever somebody based on you know, past projections and everything’s Well, let’s build 5% more than we did last year or something. You’re looking at housing Yeah, you know, that’s on fire you can’t get lumber the average to build a home right now is what another 25 grand just because a lumber there you go
Damon Pistulka 12:20
he says raise it tripled Yeah, go go buy a two by four now.
Damon Pistulka 12:26
I was actually that’s that’s funny because I was gonna go in and buy some specialty lumber and I was I’m I I well cuz I needed I don’t know whatever our two by two by four piece of cedar right, the clear cedar. I think the last time I bought it was 50 bucks. So that’s gonna be that was a long time ago. So it’s gonna be expensive
Ray Ziganto 12:46
to fill out a credit app.
There we go.
Damon Pistulka 12:50
Yeah, yeah. With your bankruptcy letter for your line of credit. Oh, wow. But it is it is it’s it’s crazy how some of the industries really have just taken off and and are seeing unprecedented sales and precedent and profits. While while the other ones were it was face to face business was being done really got in got hammered pretty bad.
Ray Ziganto 13:12
Well, it pivoted there to the people that were able to adapt to that, again, blame Jeff Bezos and Amazon. But we are all in a world now where we expect kind of that Amazon Prime experience. Yep. In everything that we’re doing. It’s not just b2c b2b is becoming like that. And even if you are in perhaps, especially if you are in an engineered products, you know, type of environment because you know, our friend Allison du Ford, you know that the usual suspects that you talk with, tell you that so much of the buying decision happens.
There’s about 70% of it happens before they ever even reach out to the company. How are you showing up, you know, out there to even be present. If you’re if you’re still of the mind that, well, my sales guys can’t travel, my customers won’t let them in the lobby, therefore we can’t sell. You’re circling the drain. You’re wrong. You’re absolutely wrong. And we can prove it.
Damon Pistulka 14:13
I read I love that. Because it is it is so true. And you’re getting killed by people that you don’t even know because they’re not around the corner. I mean that the supply chain or suppliers across the US they Yes, there’s some stuff that you’re not going to ship along ways but the vast majority of it couldn’t be shipped significant distance. If if it if it’s the right supplier, and it’s right there doing things the right way and that supplier is marketing better than you is getting in front of those customers better than you. And if you think your salespeople are going to be able to do that, they can’t do it alone. No,
Ray Ziganto 14:54
and the whole dynamic has has changed. Man I’ve seen this coming for a long time. Even back I was, you know, running the, the big job shop in those environments. You know, you talk about the two types of salespeople you have on the fit, you got a hunter and you got a farmer. And the reality is in the end the engineered components world, the you don’t need as many salespeople as you used to, because so much of the relationship and the real revenue generation, I’m not talking the break down the door and go secure the new client.
I mean, the kind of, you know, work through the organization you’re already in, happens in customer service happens in program, program management happens and the logistics side, it’s shifted inside organizations. There’s a guy out there right now, and I wish I could remember his name, when I think of it, I’ll share it with you. But there’s, he’s always gets built a business around the fact that it’s like, your operations is really what’s responsible for revenue generation. Think about that for a minute. They’re not talking about new customer acquisition, but it’s, you know, bringing the most out of the business you already have.
And I see it every day with every client that I talked to the first point they all want, we want growth, we want to go somewhere looks, you know, what is what’s it gonna take to go get 100 new customers, you know, right now. And the first question you asked is, have you you know, what do you know about your existing customer base? We’ve been with them for 30 years, they love us, how do we get to the new ones?
You know, and I’m like, you know, what are your long distance company you want you treat the new customers better than the old ones? You know, so you start doing some analysis. And Honest to God, I haven’t seen a manufacturing company yet that doesn’t have another 20% worth of growth sitting in customers they already have. Yeah, they’ve never looked at it. Yeah, they’ve never really dug into it.
Damon Pistulka 16:47
Yeah, it will. And it is it is so much easier. Ronnie brought this up to it says internet, internal growth is better than banging on doors. It’s 100%. Because they know you already and more than likely, they you’re not a single source supplier anymore. I mean, that was many years ago, they got that out that you had to have multiple sources for everything. And that’s fine and good. But it doesn’t mean that you can’t be like 95%. And now you’re 80% or something like that.
Ray Ziganto 17:16
Yeah, exactly. What’s Robbie’s point? You know, I think you need a little bit of both. But here’s another area, a lot of manufacturers have a problem with math. Again, in the spirit of they get not talked into, but they see what’s what’s possible on social media now that everybody’s got access to it, you know, for basically the price of your cable bill. You know, you can be out and have a presence, you know, me doing something and you fall victim to the to the likes, you know, and the responses that I get out, I got 1000 likes, big deal.
The unit of measure that matters, you know, is dollars. Yeah, manufacturers have a math problem, especially in the customer component side. You don’t need 1000 new customers. No, probably need three, maybe five? Yeah, no, you’ll double your business exactly in three in three to five years. Now, around this point, who should be making those calls? Who’s who’s got the best business card in the company?
You know, when I was, you know, President, CEO of a company, I could get a meeting anywhere. Yeah, no, that was awesome. And as a recovering sales guy that made me feel good, you know? Yeah. So. So that’s who needs to be on the plane of the sword building relationships for down the road? Because when they need to, you know, when it’s when it’s time for the bringing in that next supplier? That new one, the first one they think of, you know, yes,
Damon Pistulka 18:37
that’s a good point. Because you know, that, that is one of the things that I know a lot of, and I’m not saying this because they’re small, but the entrepreneurial business owner that started this business, they might be 10 $15 million dollars, even $20 million. Now, they’ve gotten away from that sales part of it, because a, they never really liked it. That’s what they didn’t, they didn’t get into business to be a salesperson they got in business to have a business, blah, blah, blah. And, but they are the honestly, they are the best door opener.
Ray Ziganto 19:11
Yeah, there’s, there’s no question that always helps. That always helps. It’s even if you just bring them with, you know, if the sales guy brings them, or however you want to do it, hey, that, you know, whenever we had company tours, we love having visitors, you know, come to the facility. I don’t care who it was what time it was, I want to meet him, either in the first part of the meeting, I want to be there at the very end of the meeting. You know, see what you know, Hi, how’s it going? What’s going on? But it’s like you have to you have to play a role in that you really do.
Damon Pistulka 19:43
That’s a great point. It’s a great point because you know, it is really it’s it’s giving that customer that added attention that makes a difference in the long run.
Ray Ziganto 19:54
Yep. Yep. That’s
Damon Pistulka 19:55
that’s a great point because it’s and and you’re to your point earlier to One of the things that we need to as, as leaders in manufacturing, I believe, too, is make sure that everyone in the company knows how critical they are to the sales process with existing customers and everything they do. I mean, because if you’ve got a if you’ve got a delivery driver out, you know, running out, you know, dress like a slob driving like crap, you know, all that stuff are gonna look just as bad as your salesperson not doing the right job or customer service person not not being played on the phone, whatever it is. Yeah. And, you know, we’re all salespeople at the end of the day. Yep. Yeah. And I think, go ahead.
Ray Ziganto 20:44
Reminds me, I think Ben Baker says everybody follows follows Ben, it’s like, you know, your, your brand, and your reputation is only as good as your most pissed off employee on their worst day.
Damon Pistulka 20:56
Yeah, yeah, that’s, that’s it.
Ray Ziganto 20:58
I’ve had that. And I’ve gotten I’ve gotten calls from, you know, fortune 500, or the receiving department at a fortune 500 customer that opened up a box. And on the bottom, you know, when somebody, you know, got pissed off at one of our facilities, I had a pastry down there. You know, it’s like, I’m not sure, how do I how to, you know, quantify or qualify, you know, this type of contaminant? Yeah. You know, it’s like, well, you know, looks like a bear claw to me. You know, but it’s, it’s everybody, it’s, it’s not a department. It’s the whole company.
Damon Pistulka 21:32
Yeah. And I think the the owners, the the managers, presidents, all of them need to let people know that because I think as, as an executive in a company, it’s easy, because you’re in that role all the time. Yeah. But when you’re not, you forget about it. You’re working around people, you know, you’re real comfortable around them every day. It’s a little different situation. I think that just just by taking those added steps. And I think that when I look at different industries, I like because I get to do like you do, I get to float in different industries.
And when you look at some of these industries, and I don’t even work in it, hardly at all, honestly, anymore, but the restaurant industry, the restaurant, industry, good restaurants, the difference between a good restaurant and a bad restaurant, is is all in the people in how the people are taught how they’re trained, how it’s reinforced. It’s not that the foods that you can have, you can have mediocre food, and still sell the hell out of it in a restaurant.
If the people are great. They do us it’s like, Whoa, you came back again, your wonderful scene again, re awesome. The last time you were here, we had such a great time, blah, blah, blah, blah, blah. And you know, that kind of thing makes such a difference, that the meal itself is just an afterthought. Exactly.
Ray Ziganto 22:59
Yeah. It’s all people remember how you treat them? Yeah, that’s, you know, that’s it comes down to, you know, how do you how do you do that? And in a digital age, how do you do that? Yeah, you know, and that’s part of the learning, you know, and the kickers face it, you know, hey, I grew up around, you know, and came up in business, and the manufacturing site and I, I laugh at, you know, the promotions, you know, that, you know, that I’ve worked along with, you know, and it’s, you know, you joke about and stuff like that, and at the heart of it, they’re awesome. They’re awesome people, but it’s like, you know, building building that bridge, and making them comfortable.
You know, getting out there because it’s it’s a different world. But it’s a bigger world. Yeah. You know, and it’s in a lot of ways. It it should be it’s kind of aligning itself, right, where the manufacturers, you know, even if you are that crusty engineer, why don’t want to go meet with anybody? Well, what if? What if we just created a way where you could swap really cool ideas back and forth with other engineers? Why don’t we all right. There you go. My dad help you call it what you want your idea and
Damon Pistulka 24:10
move over there? Yeah, that’s awesome. That’s a great example of it too. And I think it really is a big world. And that’s, and when we when we talk about we big world. It’s a global world now. And I think that, you know, there’s there’s companies now like, Alibaba, that are looking for us manufacturers that want to sell internationally. I mean, you’ve got a fair amount of international experience. And what do you think there? Do you think that we’ve got an opportunity in the next few years to really increase our overall offshore sales?
Ray Ziganto 24:41
There’s a huge opportunity for that, because you know, what the barriers historically, for international type business have ever used in my experience they’ve been based on, you know, it’s been bad information. You know, somebody knew a guy once who tried to sell something somewhere and had a bad experience. He’s never doing that again. So okay. So therefore it becomes, you know, it’s industry lower.
Yeah. Yeah, even even if you get past that, then there, there’s the perception, oh, I gotta hire attorneys and, you know, accountants and, you know, this is, you know, the language barrier, it’s, everything’s, everything’s a cost and a barrier. And for a period of time, it was, you know, hey, it was expensive.
Ray Ziganto 25:23
can, you know, in my career, I remember it, you know, going from, hey, this is probably going to be a six figure to start, maybe an overall seven figure investment, if we want to actually have assets on the ground, and stuff like that, and then all the air travel back and forth, because we couldn’t do stuff like this.
Yeah. But it’s, you know, it’s, it’s really changed the, the, our ability to facilitate outreach, our ability to have an access to platforms like Alibaba is, is, is incredible our ability to transact, you know, business internationally, our ability to market, you know, all of those things, there’s, there’s so much of that stuff that can happen, eventually, you got to get on the ground at some point, but so much of it can happen. Virtually. Yeah, you know, a lot of it can get put in place along the way.
And the, if you’re operating under the assumption that well, you know, I’m I’m too small to do this, you know, I’m, you know, $10 million, or maybe less, you know, I’ve got examples of companies that are doing it both on the supply chain side, and on the the new market penetration side, that, you know, 20 years ago, you said, Are you nuts, you know, there’s there’s a company right now, my friend, Tom, hilarious, look up a company called Ergo seal, er, g o SCA, all family owned business is second generation. And Tom has done some fantastic things, not bootstrapping.
But just Just think about it and go, go find resources that can help you do it. And there are so many available. So yeah, yeah, there’s a lot of perceptions that need to get out of the way. And there’s huge upside. Huge upside.
Damon Pistulka 27:08
Yeah. And I think you you touched on a little bit, I think that overall now because of the digital influence in the in the the way that we have to change our marketing, in manufacturing, and really in all business. The the amount of digital outreach that we have to do expanding our geographical coverage really isn’t that difficult compared to you,
Ray Ziganto 27:33
it’s, it’s so different. I got 20 some years ago, when I, when I was last company, I was with my first joiner about $15 million in revenue at the time, and facilities and Gosh, where were they? They were in Singapore at the time, and they were in Scotland. And even with with that footprint between going to the facilities, and going to see customers who spend their million bucks a year on air travel, yeah, well, moving people around. Now. It’s like, there’s just so much you can you can accomplish?
You know, it’s I can have you on the screen. Hey, turn on the camera on the CMM. I want to see you inspecting that mold real time. Yeah, what we’re getting or take me out to the shop floor. You know, you said you’re getting flashed somewhere, you know, where is that? Or, you know, let me see how that fits that stamping presses hitting, you know, there’s just so much you can do or pull the data real time. Yeah, you don’t have to anymore. You know, it’s really, I think it’s taken a lot of the slack out of the system. z has zoom wasn’t invented last year. It’s just there was an alternative air flights were cheap. So yeah, get on a plane. You know,
Damon Pistulka 28:46
what a lot of it was habit, a lot of was having people thought that they needed to do that. But you’re, you know, within a business, if I’m used to, I’ve got these this bit of travel I do every month, that’s what I do. Blah, blah, blah, you do that your salespeople are doing it, blah, blah, everybody just gets used to it. And really what I think the last year has taught us is that, hey, it doesn’t have to be that way. And when you look at some of the things that that COVID forced us the video, I think that it is it can revolutionize some things about support about you know, you just think of maintenance, right?
You know, I’ve run this like you saw this stuff like you where you’ve got these big million dollar CNC machining centers sitting here running on that damn thing stops. It’s it’s not a pleasant sight. And and if you had to in like in the old days, you have to wait for the technician to get on a plane, Come out, come in and fix it. Well, now what do you do like you said, you plug it in, you get someone with a with hell with an iPad and they can FaceTime on random thing.
And they know you got a technician on your end of course because you’re not gonna have that kind of equipment without somebody that can fix it. They’re they’re sitting there diagnosing it, that guy did not leave his home. And he didn’t, he didn’t have to wait 36 hours or whatever the heck it took him to get on and get a flight. If you’re lucky, if there’s someone sitting there that can come and fix it, it gets fixed fairly quickly that way.
Ray Ziganto 30:18
And, you know, you bring up a good point, because there’s still this hesitancy among manufacturers, same reasons to begin, and maybe it’s a language thing, but whether you want to call it industrial IoT, or industry 4.0, or whatever, you know, this the censoring that you’re talking about? Yeah, there was a time when if you weren’t making Rolls Royce jet engines, or you weren’t, you know, Amazon’s, you know, you know, that that type of thing. Okay, it was pretty pricey to get involved in, but to do basic condition monitoring on a machine shop floor to understand and do something about your micro stoppages that might be occurring.
I go in machine shops all the time, that might have 10 machines. Some of them have 100. Well, you know, if you picked up, you know, half an hour, a week or an hour a week across 100 machines, what did that just do for you? Yeah, yeah. How much those things cost? So it’s, it’s, it’s going after those things, the tools exist. They’re not scary. They’re not expensive. Yeah. And the the, there’s an abundance of people that are dying to teach you how to use it. Yeah, in your factory. So
Damon Pistulka 31:34
yeah, that’s, that’s for sure. And that’s, that’s a cool opportunity, I think, because when you look at some of the stuff that can happen it and you’re right, and if you’re in a machine intensive like CNC machining, your greenlight time is is crucial. I mean, that’s that’s was one of the measures I used in actually a few businesses I ran is, you know, in a, in a sheetmetal fabrication facility, it’s the the punch of the lasers, how many hours did you run on them?
And I ran a company that we made checkout cars for grocery stores where they are all CNC router out of wood, how many hours do we put on the CNC routers? Because it’s, it’s simple. You find your bottleneck, and you measure how much you do that. And in the CNC machining centers, it was greenlight time. If you go, Okay, how much money do we make this week? Well, how many hours do we run? That’s that simple. And you increase that on any of those levels? You’ve increased your productivity
Ray Ziganto 32:28
long as you’re building the right thing. Yeah. cuz I’ve been in shops, where it’s like, gee, we, you know, we run are always at 75. How come? We’re losing money? Yeah.
Damon Pistulka 32:39
Yeah, scrap out the bag or stuff? Yeah, yeah, exactly. No, you still have to do you still have to be smart building the right stuff? And doing that, but it, but it is, I think that the, you’re right, the IoT stuff that can that can help understand these little things anymore. Because, as we talked about, before we got on, there are not very many, if any silver bullets left in these manufacturers that you’re going to go we just gained 20% efficiency in what we’re doing. Yeah. It’s It’s not like that. You have to find the percent here and the percent there and percent there that eventually will add up to 20.
Ray Ziganto 33:18
Yeah, yeah, exactly right. To get to those those step changes. But you know, part of it is sometimes you got to throw out once that thing and audacious hairy ass goal. Yeah, you know that, you know, we got to figure this out. Because if you don’t, if you don’t draw a line in the sand that initially gets everybody going, Are you nuts? Yeah. It’s like, nope, you know, you know, and that’s, that’s where the boss has to, you know, step in and do, you know, we can do this or, you know, I’m gonna take away half your hours, you know, you have to create that constraint. But we have to figure it out. And here’s why.
What’s missing a lot of times is I’m going to pull the rug out from under you, and I’m not gonna, I’m not gonna tell you why. You know, is the thing is, you see it all the time with engineering departments. It’s like, for, you know, an engineering department to be at their best needs to be slightly overloaded. Like if they if they go through a slow period, and then the work piles back up, and you don’t, and you don’t constrain the the hours, you’ll never get anything done. Yeah, it just won’t happen. It’s human nature. You got to you got to kind of get back into back into the fight mode. Yeah. To get stuff out the door. It’s just Yeah,
Damon Pistulka 34:27
yeah, that’s for sure. And then it is and I think that when you the Yeah, it’s the the there is a tremendous amount of opportunity, even in mature businesses to rethink what you do. And and, as you talked about, I still think that just about any business can find 25 30%, productivity improvement, cost reduction, whatever you want to talk about, but it’s not going to come by how you do the work.
It’s going to come by week. going to have to look at everything we’re had to redesign the way that we build something, the way, the way it’s manufactured the way that it’s packaged all the way through one way end to end. And you can do that even on smart commodity products. I think there there are ways to do that. But it will take some additional effort
Ray Ziganto 35:18
well, and what they have to look at is those those organizations, it’s like, you know, we’re making money hand over fist, we’ve got this awesome, you know, we’ve got this new widget, and I had an econ professor in college that said profits attract the crowd. Yeah. And he was right. It’s like, sooner or later, somebody is going to look and go, How come these guys you know, you, you can be sole source for a while if you’ve got the better mousetrap. But you also better be good at constantly reinventing mice, mousetraps, like world, you know, that has to be part of the business. Because if you’re a one trick pony, somebody else is gonna figure it out in a hurry. Why profits attract a crowd? Yeah.
Damon Pistulka 35:59
That’s for sure. That’s for sure. And I think I think that the the best companies understand that, and they’re always doing that innovating and innovating, even what looks as the same product, innovating how they’re doing it, because the ear ride profits, attract lazy attitudes, and I don’t know any better way to say it, when you’re when you’re fat and happy. A everybody’s happy owners, happy shareholders, whatever you got, and life is good. And if if the executives, the people that are in charge of the company are not giving people the incentive, the motive, the motivation, the the challenge, to continue to improve, it’s really easy to get to get fat and lazy
Ray Ziganto 36:47
or exactly, you know, one of the best ways you Hey, the first thing everybody likes is how, you know how well paid and the benefits and all that, you know, that’s nice, but, you know, I’ve known people making a lot of money, you know, leave somewhere because the organization wasn’t, you know, they didn’t like it, it didn’t feel right, you know, whatever. And important thing, especially in the manufacturing space, you know, with your technical staff, it’s like, man, give them give them something to tinker with.
I think in some cases, that’s one of the one of the Lost arts, is it especially within a business, it’s, you know, find that that skunkworks thing, and I’m not saying you got to be, you know, Hewlett Packard or, you know, new jobs, or, you know, any of those things, but some of the most awesome innovations, and the new things I’ve ever been able to bring to customers started with really small investments.
Yeah, you know, first, it’s creating an environment where the people with the creative ideas are comfortable enough going forward, saying, hey, look what I put together on my lunch break. Wouldn’t this be neat? Yeah, you know, and then when you come back to them, and said, What do you think you could do with 500 bucks, you know, and McMaster Carr catalog, you know, or whatever, it’s why you do do it, let’s see what happens, you know, you really got something to
Damon Pistulka 38:04
talk about. I don’t know, you are, that is so true, it is so true. Because giving people ownership and allowing them to express themselves in that way, engages them fully mind and body. And when you get that entire engagement from someone, it is so much better for for them, it’s better for the company, it’s better for everyone around them.
And that that driving that innovation is not going to happen by staying in the same lane. It’s not you have to let people veer off in a controlled environment, to the extent that you want them to that, that to do that stuff, because, you know, they didn’t come up with the damn cell phone by by keeping it stuck to a landline, you know, right? It’s not you got to let people do what they’re gonna do an lm express that and that’s a great point. You know, and it is simple, it is simple. And it’s, it’s allowing and challenging people to do it.
Ray Ziganto 39:06
And it can come from anywhere. You know, there’s, there’s so much I’ve seen more businesses brought to their knees, because they never thought outside the box about automating just where you’re getting where and how you’re getting reporting about what’s going on on the shop floor. Well, we’ve always done it on the yellow cards, where we record by hand production, and then we key it in and everything like that. It’s like, I know, that’s how we’ve always done it, but by the time I get it and analyze it, whatever bad thing that happened is a day behind me, you know, and it might still be going on, you know.
So again, innovation can come from anywhere in the in the organization and you’ve got to find a mechanism to allow it to come out. Not everything is a moonshot, you know, I mean, but it’s Yeah, some of those incremental things and the more you encourage it, believe me, you’re gonna come up with some own shots along the way. Yeah, that’s for sure.
Damon Pistulka 40:01
That’s for sure. It’s good stuff. And I laugh when you say that about the cards, because that’s one of the one of the earlier companies that I ran they, they did that, you know, everybody had, there’s 200. And some employees and every one of them had to fill out a job card every day. I’m like, why do we do this while we do this, because we then we key this numbers in and we get all this, we know exactly how many hours we put into a job this Okay, show me what we do with that information. And we ran the reports, they run the reports, we give these reports to people so they can look at them. And then I go, Okay, I went to who gets the reports? I was one of them.
They got the reports. And I knew I didn’t look at that damn right. And, and they said it, they said, Well, these people all you can look at the reports, you can decide what you want to do. I said, Now we’re gonna stop running them. We’re gonna stop taking it, we’re gonna stop keeping that number in everybody, for the accountants said, What are you gonna do? I said, it’s real simple. At the end of the week, we’re going to figure out how much we sold and how much we spent in labor. I said, that gives me the same number.
Right? without all of this.
Damon Pistulka 41:08
Yeah. They said, well, you’re not going to know what what it was on every job. I said, I don’t care if that number is right. I’m good. And I can if I can make that number better, I’m even better. Yeah, I don’t have to know that. If we have if we if that starts going haywire, we’ll find out what job it is. And you know, it’s some of these things like you said, it’s it’s, it’s really looking at things almost, with childlike eyes, and wondering why ask him why, why are we doing it?
Ray Ziganto 41:38
We get we get stuck into the human nature. But you’re absolutely right. At some point, if you don’t stop and ask why. You’re a what, why is this system still here? Because everything is, you know, if you absolutely, positively have to have it. Can we automate it? You know, because I’m sure right after you said, you know, stop recording these these daily reports, somebody pulled back a curtain. And it was like Raiders of the Lost Ark you saw? Because we’ve got to keep these in case somebody wants to go back to 1978. Yeah,
Damon Pistulka 42:10
yeah. Oh, yeah.
Damon Pistulka 42:14
Yeah. It’s like, yeah, I laugh for that, too. I’m one of those guys that throws away everything you don’t need. If you don’t need it, it goes out. You know, I took that whole five s stuff pretty seriously when when we started that in the 80s, and just kept right on going. So Oh, good stuff. Well, you know, I think I think they’re really the the one thing that I want us to touch on quickly, before we wrap up here, Ray is, you know, to me, it seems like this while COVID cause some things globally for manufacturers, this is really just another normal cyclical change that we’ve seen over and over again, but I wanted to get your take on that.
Ray Ziganto 42:57
Yeah, I think it COVID kind of his was I faced that it’s on it’s unexpected. It’s unprecedented. Yeah, you can go back to what the 19 1718 or whatever. But yeah, it’s it’s an unusual events. But I think, again, the lessons learned have been, I think it’s done nothing but help manufacturers kind of fine tune it. It helped them get digital in a hurry. Yeah, I’ve got one of the people I follow. And Richard Lecky, has a company called instrumental and and they’re talking about right product at the right time. They do automated optical inspection tied to artificial intelligence, and basically allows engineers to do product development and production optimization, long distance.
Wow, when COVID first hit, leading edge, Big Brain type stuff. When COVID first hit, she said, in the next 18 months, we’re gonna see five years worth of innovation get put into place in manufacturing. And she’s right. Absolutely, right. Because because there was it was a crisis of sufficient magnitude that hit close to home, or everybody it was a whole year bear moment, where it’s like, yeah, you know, we either lean into this thing, or we’re gonna get swept away. You know, so now they’re leaning in or not, you know, now we’re getting pissed about it’s like, I need more labor. I need more material, you know, we can do more. That’s awesome.
Ray Ziganto 44:26
these are awesome problems to have build on them. You know, build build on those things. You know, yeah, it’s, it’s creating a lot of a lot of work and it seems unnecessary, but there’s still so much learning going on and evolving. We’re just doing it at a faster pace right now, which, in my mind, manufacturing needed it needed that shot in the arm. So
Damon Pistulka 44:48
yeah, well, I mean, just like anything, it’s like like said, if your profits are good, the incentive the change is not really that that high or the level Not that high. And I think this this broad awareness that I think the digital change that does that has been forced on manufacturers is is healthy because you’re gonna die whether you know it or not, because you’re you’re buying base is, is is now not, you know, people that are our age,
there are people that are much younger than us that they are going to go online and do a lot more searching before they go and reach out to you and and if you’re the if you’re the the job shop that’s got the the old website that says hey, look at my sheet metal fabrication place that I’ve got these 17 machining machines, and I got this kind of lay than this that that’s all it shows. It’s like, a that’s that now that doesn’t help me a hell of a lot. I’m a medical product manufacturer that’s looking for this kind of dot dot, dot, dot dot. And if you don’t speak to me, I’m going to the person that does
Ray Ziganto 45:54
exactly, exactly. And for those, you know, the fab shops, the short winners, there’s people out there that are purposefully going for the low volume high mix side of things. Yeah. Which, which, on the one hand, if you have to, if you look at manufacturing, in the traditional sense, my god to set up all of those customers, because I you know, I’m going to need to have 1000s of customers to ever achieve any volume. Yeah, completely different. It’s very much Hey, upload your drawing.
We’ll go through it give you a quote. Yeah. Your credit card, Here comes your part. You know, they’ve automated that whole show. It’s like, No, I don’t have to have a call center on staff, you know, yeah. Standby. Waiting, handle up. Look at protocol labs. Yeah, look, look at what those that’s that’s the future of a lot of stuff that’s that’s going on. I’m not saying everybody is going to be in that model. I guarantee they’re going to be aspects of it. You better have in place.
Damon Pistulka 46:45
Yeah, you hit it in the head. Because Listen, someone that’s going to want a one off or something doesn’t care if that is $75 or $175. They don’t care. And if you set your back your facility up well enough that listen, it doesn’t matter. What if, what if it’s out of a similar material? Yeah, I should be able to put that one through my process. Just like all the other ones right around it. Yes. There’s some setup. There’s a little less than that. But if you do it right, it flows through. Certainly not enough to make that unprofitable. Doing network. Exactly.
Ray Ziganto 47:27
Yeah. Start with the customer. The journey your customer expects and work back from there. That’s your business model. Yeah. Yeah. Quit trying to jam years down their throat. They don’t want it.
Damon Pistulka 47:39
Yeah, they want to buy what they want when they want. They want it when they want it. Exactly.
Damon Pistulka 47:45
Yeah, I saw I say real quick. We got Jenny’s listen to us. Thanks a lot for listening, Jenny. Jenny’s got a cool manufacturing a welding place in Iowa. So awesome. Yeah,
Ray Ziganto 47:56
everybody that’s out there. Connect Find me on LinkedIn. I’m easy to find. I love talking manufacturing. I promise no pitch. I just love talking shop. Hit me up anytime. If you ever need my help. We can talk about that separately. Yeah,
Damon Pistulka 48:11
yeah, it’s it’s awesome to have you on Rei. And I just appreciate the opportunity. And, and I’m excited. I mean, I’m, well, I’m always excited. But I think this is gonna be really a fun time for manufacturers to rethink how we do things. And and also, I think, for me being a little bit grayer than I was, you know, 20 years ago. This is fun, because we’re teaching younger people now, how to do this and what they can do and how to really expand their mind with what they know and what we know. And putting that together.
Ray Ziganto 48:42
Yeah, I love it. It’s like I’m so pleased. Like you I’m not done with my career. Oh, hell, no, thank goodness along the way. I’ve always had an appreciation for picking up new tricks. So we might be becoming old dogs, but it’s like, man, we got we got some got some game. Yeah, we’re still
Damon Pistulka 49:01
going. game. So yeah, good stuff. Well, Ray, thanks so much for being here. Thanks, everyone, for listening. Again for the faces of business. I’m your host, Damon Pistulka with eggs your way and raise a Gonzo here. Get Ray on LinkedIn, catch him on MFG out loud. Yeah. Good there to him and Alison to Ford. And if you aren’t already thinking about tomorrow at 10:30am pacific time, we’ve got yo bear.
Abraham, I believe his last name is going to be talking about LinkedIn and LinkedIn navigator and LinkedIn ads on our manufacturing e commerce Success Series with Kurt Anderson and myself. So tune in for that should be a good time there. And just so happy, everyone have a great evening and if I don’t, if you don’t hear from me before, have an awesome weekend. We’re having Spring time, let’s get out there. Enjoy that weather