Monthly Archives: May 2010

Saint Warren of Berkshire

By Lloyd Graff

A popular sports talk show in Chicago has a feature that exposes hypocrisy. They call it “Who you crapping?”

This crap goes out to Warren Buffett. After listening to Lloyd Blankfein, head of Goldman Sachs, tap dance in front of a Congressional inquiry about his company’s conduct during the subprime mortgage catastrophe, and reading Michael Lewis’s book, The Big Short, detailing the stupidity and duplicity of the ratings agencies, including the once venerated Moody’s during the same period, I was shocked to hear Saint Warren defend both at the annual Brookshire Hathaway pig roast in Omaha last Saturday.

But I suggest the real reason he defended them is that Buffett owns a big stake in both firms. Brookshire lent $10 billion to Goldman at 10 percent interest during the depths of the Wall Street chaos. He also has warrants to buy the company’s stock at $122 per share. He also owns 20 percent of Moody’s. He thinks Blankfein is great and wishes he could clone him. He also thinks Moody’s is a wonderful business.

These two pillars of Wall Street had a huge hand in virtually sinking the entire American economy. The SEC finally had the gall to challenge Goldman on a small deal and you would think capitalism as we know it is under siege. Thanks Warren, Oracle of Omaha, who you crapping?

Warren Buffet courtesy of

Warren Buffet courtesy of

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Starbucks Betrayed My Wife

By Lloyd Graff

Call it the frap flap but Starbucks is pulling the New Coke.

Evidently the Buck is feeling the pain from McDonald’s competitive and cheaper McCafé, in tampering with one of its most successful products, the beloved Frappuccino. My wife Risa was addicted to the mocha, light, double blended Grande Frappuccino with easy whip. Along with the shortbread cookie it was the break in her rigorous workday that usually goes to 8 p.m. (The shortbread replaced her former staple, the Rice Krispy Treat, after Starbucks ruined that by taking out the Trans Fats a few years back). The baristas at our local Starbucks all knew her order and started making it when they saw her approaching the store. If I came in they asked me if I was there for the Missus.

And now they’ve ruined it. According to Risa the new process using pumps is so inconsistent they’ve lost her recipe and cannot seem to recover it. From store to store the variance is enormous. I would compare this to McDonald’s using different hamburger grinds and ketchup at each store.

Fast food depends on consistency. White Castle makes the slider the same way everywhere, and Wendy’s chili is always reliable. A Frappuccino is not a Domino’s Pizza, which was so uniformly awful everywhere that it begged for a redo.

Risa is appalled. She’s furious. It is a topic of conversation daily. She feels like she’s been robbed of something dear to her without warning. She says she beat the New Coke debacle by buying cases of old Coke ahead of time. But there is no old Frappuccino to be had.

Starbucks you were stupid. Let’s see how long it takes before you realize it.

Question: If you were Starbucks CEO Howard Schultz what would you do to compete with McDonald’s?

From Blog Will Starbucks Die soon?

From Blog Will Starbucks Die soon?

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Making parts faster doesn’t always mean cheaper

By Mark Bos

In today’s difficult economy, we are all trying to make parts faster and cheaper. Unfortunately, making parts faster is sometimes at odds with making them cheaper.

I have learned from experience that sometimes a machine will consume less money if you slow it down a little and try to find the proverbial “sweet spot.” The fastest spindle speeds and the highest feed rates may not be the best way to run the machine. It may be difficult to convince your boss that this is true, but having real data to prove it can be helpful.

Tooling costs or machine repair costs are examples of costs that could go up significantly if the machine is pushed too hard when trying to reduce cycle time. When I get involved in a process, I like to track tool life. If I don’t know what my tool life was before I make a change, I can’t accurately measure the performance gains or losses caused by the change. I always share my tool log results with the machine operator, as part of his or her involvement in the process improvement.

The following is a good example of slowing a machine down to get better performance. The part was made on an Index ABC lathe. This machine was plunge-roughing the OD of a cylindrical part made of 8620 steel, using a .3” wide carbide insert-type OD roughing tool. The tool had problems with durability. The average tool life for this tool was little more than 200 hits per edge. When the edge went bad, it happened quickly and would cause problems for the finishing tool that followed it. This roughing tool is one of 11 tools used to make this part on this machine.

The first thing I checked was feeds & speeds. The actual surface speed for the roughing tool was 1100 ft/min, while the recommended surface speed range, per the insert manufacture’s catalog, was 250 to 600ft/min. After reducing the spindle speed by 50 percent to obtain a more suitable surface speed, I steadily increased the plunge feed rate to a value 60 percent higher than it was. After these adjustments the chips curled up tightly, with a nice sizzle when they came off.

The net effect of my changes on the cycle time was an increase in cycle time of less than 1 percent. I was lucky that I was nearly able to completely compensate for the decrease in surface speed by increasing the feed rate.

The tool life results went from little more than 200 hits per edge, to more than 1200 hits per edge. This resulted in a $330 reduction in tooling costs per month. Additionally, we reduced tool change time by 15 minutes per week.

This was a time where a slower cycle time actually enabled me to make similar quantities of parts per month and reduce tool usage costs. If someone forgot their machining 101 lessons, there may be room for improvement.

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Do you really want to be the boss?

By Lloyd Graff

Brian Capece has a five person shop in rural Maryland. He does wire EDM and precision machining for aerospace, satellite, medical and commercial clients, often working 65 to 70 hours a week. His wife runs his office now that his two children are in school. He’s been doing this for 10 years, since buying his first die sinker at an auction.

It’s been a rough year for Brian. He says he used up his cushion of money to keep the business afloat while not letting any of his people go, because those core employees are the key to his business and if he lost them he would be in the soup.

He is finally back in the black but wonders if the path he has taken for the last decade was the right one.

“After going to the tax man this year and seeing how much I had to pay, I really think I would have been better off working for somebody else than having my own business,” he told me.

His comment was not said out of anger or great regret, but I wonder how many people feel the same way—for the same money and less risk, they’d just as soon pull down a paycheck than sign all the checks.

Question: Do you think you would be happier owning your own company or being a well compensated, valued employee?

Michael Scott from The Office

Michael Scott from The Office

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The Power of Luck

By Noah Graff

New research is showing that lucky charms may actually improve a person’s performance when doing certain activities. A recent article in the Wall Street Journal reported on a study conducted by the University of Cologne in which participants on a putting green were told they were playing with a “lucky ball.” The people using the “lucky balls” sank 6.4 putts out of 10, nearly two more putts, on average, than those who weren’t told the ball was lucky—a 35 percent improvement.

However, this phenomenon only applies to instances in which a person actually has some control over the situation. Various studies show that believing in luck while doing activities in which most if not all the variables taking place occur independently of what a person intends to do can actually have a detrimental effect on success because choices are being made by a person with a false sense of control. Gamblers and stock traders who base their decisions on superstitious ideas have been shown to be less successful than those who don’t use lucky charms because the superstitious ones act more recklessly.

So what does this all mean? How can a person use this to their advantage in business? It means that a person has to be able to identify the variables of a situation before they decide whether their lucky charm is more likely to lead to a positive outcome or an outcome where overconfidence blows up in their face. If one is going to negotiate with a customer and comes in with a confidence in their own abilities, magnified by superstition, assuming the person does actually have legitimate abilities or talent, luck may enhance their odds of success. At the same time, a person can’t forget, that when the decisions of another person (such as their adversary) or pure chance dictates a situation, they shouldn’t have too much faith in their rabbit’s foot.

Question: Do you feel lucky charms or superstitions have helped you be successful in the past?


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