Author Archives: Noah Graff

Ep. 90 – Running a CNC Swiss Shop in the UK with Tom Pearce of CIRC Manufacturing

By Noah Graff

Today’s podcast is the second episode of a season in which we’re talking to folks in the machining world outside of the United States.

We’re making a second stop in the UK to talk to Tom Pearce, founder of CIRC Manufacturing in Westbury, England, a small CNC shop specializing in producing flow control products using a Citizen Swiss lathe and Hitachi 4-axis mills. Tom talked about entrepreneurship in the UK and his company’s first consumer product, a luxury pen machined from exotic super alloys.

Scroll down to listen to the podcast. Or listen on your phone on Apple Podcasts and Google Podcasts.

Main Points

(2:10) Tom gives his background. He says he started as an apprentice electrician working with his father. Later he did maintenance engineering and installations in a big rubber factory that made strips and slabs of custom rubber compounds. Then he decided to start his own company. 

(7:10) Tom talks about starting CIRC Manufacturing. He says that while working at the rubber factory he taught himself to TIG weld on the weekends and started a welding side business. In 2014 one of his welding customers in the oil refining industry told Tom he had a job that was going to go big time and said this could give him enough work to start his own business. Tom says his dream was to start his own business so this opportunity gave him the impetus to quit his job and do it. Unfortunately, the big job he was promised never came. Tom had just signed a five month lease on shop space, so he took some small welding jobs. Then he got a lot of work welding cabinets for electronics, which enabled him to grow a business.  

(10:30) Tom says he thinks British people have an entrepreneurial spirit because he sees more and more people wanting to be self-employed.

CIRC Manufacturing’s New Luxury Pen Made of Exotic Super Alloys on a Citizen

(11:30) Tom talks about a luxury pen (see photo) he designed made from exotic super alloys such as Inconel and Nitronic 16. CIRC Manufacturing is now producing the pens on a 1993 Citizen L320. Tom says he thought it was a good product to sell because it is a product that people already want. He says the pen is important for showcasing his company’s capabilities as well has creating a new revenue stream. It is priced at 200 GBP. Tom says he spent months resurrecting the Citizen, but it now is a very reliable machine. He jokes that the tooling on the machine likely costs more than the machine itself.

(17:50) Noah asks if most English people are happy living in England. Tom says he thinks they are, but he admits he is speaking as someone who lives in the country side, so he can’t speak for everyone around the country.

(19:00) Tom says that his biggest challenge is to find the right people to work in his shop. He says the challenge is not necessarily because of a lack of talent available. He says he is most concerned with finding people he can work well with. Currently Tom has one full time employee, one independent contractor, and his mother does the office work.

(21:00) Noah asks Tom how he thinks British people view machining. Tom says living in the country he sees enthusiasm for machining, but he says that people in bigger cities may be less interested. But, he says he thinks that recently machining seems to be being portrayed as a little more hip on the Internet and on social media.

(23:25) Tom says that 2020 would be a good year if his company could finish as well it started. He says it started off well but when COVID-19 hit, he couldn’t get material he needed from Germany for several weeks. He says business fell off for a short time but has picked up.

(24:00) Tom says that CIRC Manufacturing’s specialty is flow control products—parts for metering, instrumentation, shafts, pins, and bushes. He says on the Citizen he makes pins and shafts, and for parts 20mm and larger he uses two Hitachi Seiki 4-axis mill turn machines. 

(25:00) Noah asks Tom to tell him something interesting he has learned in the last week. Tom says he learned how much work two men and a couple of old CNC machines can put out in a week. 

(26:30) Tom says that people can find out more about his company, CIRC Manufacturing, by going to his website, 

Question: What was the first machine tool you ran?

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Staying Too Long

By Lloyd Graff

Maria Konnikova, doctor of psychology, journalist and professional poker player, said that the hardest but probably most rewarding lesson she has learned is that to win consistently you have to fold when you see you are likely to lose, even after making a sizable bet on your hand.

This is a life lesson I see playing out vividly in the days of COVID-19 for people in business. In the machining industry, smart leaders shut down plants early in April, cut people or furloughed them, even if some were great workers they would have recruited with bonuses in 2019. Many also saw it as an opportunity to trim the marginal troublesome people who they will figure out how to do without even when business is strong again.

We also see the wrestling match between staying the course and cutting your losses in pro sports. 

The Chicago Bears drafted Mitch Trubisky, a quarterback who played only 13 games in college but was considered by some to be the next coming of Tom Brady out of high school in Mentor, Ohio. Ryan Pace, the Bears general manager, traded up one spot with the San Francisco 49ers to draft Mitch #2 in 2017, ahead of Patrick Mahomes II and Deshaun Watson. In his three pro seasons, Trubisky has been mediocre at best, ranking last among starting quarterbacks in the NFL last season. 

Yet Pace is bringing him back this year, though he signed journeyman QB Nick Foles to compete with him. Pace has refused to cut his losses. He has apparently not been willing to fold his losing hand after making a high stakes bet.

In baseball, the Cubs threw in their cards in 2011, hired new management, and cleaned house on the field. After three miserable seasons but several great draft picks and trades, the Cubs made the playoffs in 2015 and won the World Series in 2016. GM Theo Epstein is at the crossroads again this year with a fading team. He still has young players like former MVP Kris Bryant, who appears already to be in decline, and he has a pitching staff with no young stars. The question Cubs fans are asking is whether Epstein is waiting a year or two too long to throw in his cards for another tough rebuild.

Personally, I have found that changing course in business is the single hardest thing for me to do. Admitting an investment is a mistake, firing a nice person who is a mediocre employee, or worse, changing a direction that proved successful for many years but seems like it has lost momentum now, is extremely difficult for me.

I have also seen bad marriages linger for decades in some cases because of the sunken costs of children, familiarity, and financial security, which hold people together when the love is long gone.

Maria Konnikova said that she gave up more than one long-term relationship after internalizing the lesson of walking away from a losing hand in poker. Teaching this kind of resiliency and flexibility to children, and hopefully making it a part of your own DNA is much harder than tossing in a pair of aces. 

Question: When have you stayed too long?

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Ep. 89 – Machining in the United Kingdom with Joe Reynolds of MTD

By Noah Graff

Today’s podcast is the first episode in a multi-part series in which we’re interviewing people in the machining world outside the United States. Our first stop was England, where we interviewed Joe Reynolds.

Joe is Director of MTD, a company with several popular websites based in the UK that market prominent machine tool builders and inform people in the machining business on the latest news and technology. He also refers to himself as a “Swarf Guru,” so of course we had to interview him!

Scroll down to listen to the podcast. Or listen on your phone on Apple Podcasts and Google Podcasts.

Main Points

(3:20) Joe shares his background. Originally, he was an engineer and did a 6-year apprenticeship. He worked in sales with a few American companies before starting his own tooling company. Then at the EMO trade show 10 years ago he met Paul Jones, founder of Machine Tool Direct (MTD), which would be later known as MTD. Together they have grown the business to a staff of around 25 people. 

(4:35) Joe explains that MTD is a marketing company for machine tool companies as well as other industrial products firms. Joe says they work with Europe’s largest and most familiar CNC machine tool companies. 

(5:05) Joe describes how MTD works. Its websites focus on talking to people about CNC machines and other machine shop products. The sites feature tons of videos showing the products in action. is the most popular.

(7:40) Joe talks about the MTD Podcast. He says that anything that happens in the four walls of a machine shop is a good topic for discussion on the show, from the technology and tooling, to the people behind the scenes. 

(9:20) Joe debunks Noah’s preconceived notions about the UK machining industry. Noah says he has heard that the UK is no longer a major manufacturing center these days. Joe says that UK mainstream media would agree with Noah’s assessment. However, he says a deeper knowledge of the business reveals that manufacturing is massive in the UK. He says it represents 20% of the country’s GDP and nearly 80% of its total exports. He says the average annual salary in the machining field is about 32,000 Sterling, which is above the national average across all industries. He says the country has fewer factories, but they are more efficient. He says the UK is still lagging behind some other countries in Europe as far as adopting automation. 

(12:00) Joe claims that “approximately 80,000 businesses are doing something with a piece of metal in the UK.” He also mentions that the UK is working at improving certain disparities in the industry, including the fact that just 1 in 8 women are employed in manufacturing. He says the country is also struggling with an aging workforce. He says before the COVID-19 pandemic, the nation was 20,000 people short of the skilled labor needed to support the industry.

(14:00) Noah talks about his preconception that there is an occupational “caste” system in the UK. Joe says that this may have been true in the past, but things are changing for the better in England. Joe says that 20 years ago his peers questioned him going into engineering. He also reports that the perception of machinists is improving in the UK. He says there are more apprenticeships and more people are realizing that factories are cleaner and the money is good. 

(18:15) Joe talks about how the country is coping with COVID-19 and how that has impacted the machining industry. He says the government intervened with what it calls a furlough scheme. He says things aren’t as bad as you read in the papers, and that much like in the US, machining companies in the UK range from really hurting to doing well. 

(19:30) Joe describes the Ventilator Challenge, implemented by the UK government in response to the shortage of ventilators. He says the country’s manufacturing sector quickly produced 14,000 ventilators. The initiative helped some companies through a difficult time.

(20:20) Noah and Joe discuss Brexit. Joe claims 50% of people think it’s a good thing while 50% do not. He says the consensus is that it would be best if the country leaves with a deal. He says a good outcome would be the loosening of restrictions on relationships with countries outside of the EU and on exporting to those countries. He says some people believe that the UK doesn’t get enough out of the EU to justify the money it contributes to it. He says fewer companies are leaving then expected because of Brexit. 

(23:30) Joe talks about major companies with factories in UK, including: Boeing, Nissan, Ford, Toyota, Lotus, Jaguar, and Rover. He also lists aerospace companies such as Boeing, Airbus, and Spirit Airways. He says that Boeing chose to build a factory there, even when it knew that Brexit was coming.

(25:20) Joe says the UK is a good place to start a business. (see video) He compares machining company startups in the US to those in the UK. He says he sees a lot of US machining companies starting out in home garages, which is very rare in the UK. He says in England around 60% of machine shops are SME (small to medium enterprises) and have less than 10 people on staff. He says there has never been a better time to start a machining company in the UK, even with the COVID-19 pandemic. He says it is easy to borrow money and find grants, and machine tool dealers will sell machines with deferred payments and zero deposit up front. Joe asks Noah if the American Dream is real. Noah says that many Swarfcast listeners would say that it is. Noah says Americans have a tendency to lump all foreign countries together, which doesn’t provide an accurate picture of businesses overseas.

(30:00) Joe says that a lot of reshoring of manufacturing is occurring in the UK. He says it was already happening due to automation and robotics, as well as rising labor costs in China, and COVID-19 has accelerated the trend. 

(31:00) Joe says that revenues at his company are up and his websites are doing well despite COVID-19. 

(32:00) To view Joe’s various websites, visit (machine tools),,, and (supply network). The MTD podcast is available on all the podcast platforms.

Question: Is America still a good place to start a business?

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By Lloyd Graff

Some things in life are unforgettable. 

By chance last night I started watching a Netflix documentary on David Foster, one of the foremost music producers in the last half-century. Unbeknownst to me, Foster has produced artists like Barbra Streisand, and groups like Chicago and Earth, Wind, and Fire. He also produced Natalie Cole’s album on which she sang the great song, Unforgettable, in a duet with her late father, Nat King Cole, singing from a tape.

Nat King Cole with daughter, Natalie Cole

This song has always been a favorite of mine, not just because it is a wonderful piece of music, but because the duet performance that Foster put together connects me in a profound way with my own father, Leonard Graff.

One of my happiest memories of my childhood was standing around the family’s piano while my sister Susan played, and I sang along with my dad and Sue. Nat King Cole was an extremely popular artist when I was growing up, and we probably sang Unforgettable together.

In later times, I would often listen to Cole’s records, tapes, and CDs. Unforgettable, and his other huge hit, Mona Lisa, were my favorites. To this day I have those two songs playing frequently on my car stereo.

Over time, Unforgettable took on more meaning for me as I joined the family business and my father and I worked so intimately together. After he died in 1997, I longed for the closeness of that father-son relationship that was reinforced almost every day in the give-and-take of making the business successful, working alongside my brother Jim.

When I hear Natalie Cole make absolutely amazing music with her dead father, who comes alive in her beautiful voice, it brings back that relationship I had with my own dad. Sure, it had its rocky moments, but we had so many beautiful, unforgettable moments of joy and magic that stream back yet today as I get the amazing opportunity to work with my own son Noah.

Natalie Cole also went into the family business, but her father died when she was young. Somehow Foster, the producer, brought the two of them together in that incredible single. Their synchrony is stunning, especially when you see an image of Nat King Cole singing the song seated at a keyboard, while Natalie is doing it live.

When a family, and even a family business, somehow finds that elusive synchrony, it provides real joy. I still feel it with my dad even though he has been gone 23 years now. And when that lyric comes through the Acura radio, “when someone so unforgettable thinks that I am unforgettable, too,” hits my ear, even today my father comes alive in my heart.

Question: Do you have any unforgettable moments with a parent that you’d like to share?


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Ep. 88 – Collaborative Robots on Haas Mills with Timo Lunceford

By Noah Graff

Today’s guest on the show is Timo Lunceford, general manager of Swiss Productions, a 25,000-square-foot Swiss CNC shop in Ventura, California, that specializes in fluidic medical components.

Recently Swiss Productions introduced two 7-axis collaborative robots to work in tandem with two Haas CNC mills. Timo says the robots increase the production on each machine by the equivalent of 30-40 hours per week.

Scroll down to listen to the podcast. Or listen on your phone on Apple Podcasts and Google Podcasts.

Main Points

(3:00) Timo discusses his background. He Joined Swiss Productions at age 20 when he married the owner’s daughter. He has worked his way up from the very bottom to Vice President and General Manager.

(6:00)  Timo describes how Swiss Productions grew from an 8,000-square-foot shop with just 12 machines to a 25,000-square-foot facility with over 50 machines. He says 70% of the company’s business is making medical device fluidic components. It also manufactures parts for irrigation, automotive, and aerospace industries.

(7:55) Timo speaks about the company’s unique experience manufacturing parts for the medical industry. He says a major part of growing in that sector is networking and developing relationships around the world. 

(10:40) Timo talks about introducing collaborative robots to the machine shop. The company recently purchased two OB7 cobots from Productive Robotics. Timo says the company chose that brand because it seemed to be very user friendly and features 7-axis models.

(12:20) Timo says that at first employees were suspicious about the role of the robots in the shop. However, soon they realized that their jobs were not at risk and that the robots handled tedious labor, which freed them up to complete more interesting tasks.

(12:50) Timo describes how the OB7 robots help make valves for syringe pumps working in tandem with Haas mills. The robot picks up the unfinished valve, opens up the door of the machine, blows out the collet inside the machine and puts the unfinished part in the machine. Then, it opens a collet holding a finished part, takes the part out and drops it into a bucket. The robot then closes the collet, closes the machine’s door, and hits the start button on the machine. The robots can run lights out.

(14:40) Timo discusses the uniqueness of the OB7 model and how it is programmed through demonstration.

(15:45) Timo speaks about how the shop has increased the productivity of their two Haas mills by 30-35% using collaborative robots. He estimates the shop saves 30-40 production hours a week on each machine.

(16:20) Timo says that time is the most precious commodity for both the business and its employees. For the last 10 years, employees at Swiss Productions have enjoyed a 4-day workweek (10 hour days). He says that automation is playing a part to save the company money and give employees more time with their families.

(19:30) Timo says that Swiss Productions has remained operational throughout the COVID-19 pandemic because it is considered an essential business. He shows a picture of the syringe the company makes components for and describes how it is incorporated in tests for the virus. (see video above) He says last week he learned that the syringe component has been used in over 9,000 tests per day. He says that knowing that the parts his company makes save lives gives him purpose.

(21:00) Timo says he wants to understand how every part his company makes is used and how it makes a difference in the world. He says that sharing this knowledge with employees gives them purpose and motivates them to do great work. He encourages everyone in the machining business to go to work with a passion because it is an opportunity to change the world.

Question: Why are you NOT using robots in your shop?


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Bet Your Life

By Lloyd Graff

“Life is a game of incomplete information.” 

These are the words of Maria Konnikova, a writer and psychologist who learned how to play poker and then played on the professional poker tournament circuit to write her new book, The Biggest Bluff: How I Learned to Pay Attention, Master Myself, and Win.

Konnikova read from her book and discussed it with Stephen Dubner on the Freakonomics podcast this week. I found it particularly relevant because our family is now wrestling with a difficult decision while knowing that we have incomplete information, fear, and personal history to contend with.

The question is whether to get together as a family for a week to celebrate our recent 50th wedding anniversary.

I know many other people are grappling with whether to get together as a group for an extended period of time, requiring travel, expense, and above all, the possibility of people getting very sick.

My daughter and her husband and three children live in the Bay Area of California. The COVID-19 epidemic has subsided significantly there, and they have followed the local protocols religiously. The plan has been for them to come to Chicago in early August, and with my sons and their families, to go to South Haven, Michigan, for a week on the shores of Lake Michigan. This trip was planned a year ago, long before the pandemic. 

The economic question of paying for or canceling the three cottages in Michigan forced a decision upon us this week. If we gave up the cottages before July 9th we would not be penalized for backing out. 

We had a lot of imperfect information on which to make our decision. How dangerous was it from a sickness standpoint to travel by air from California? Are the COVID-19 tests accurate for both the current illness and antibodies? Could we maintain social distancing with 11 people, including kids who like to hug and play games and eat together? 

What Konnikova stressed throughout her interview was that in life we are always dealing with uncertainty. A doctor does her tests, takes a history, monitors symptoms, reads the journals, and talks to her peers to make a diagnosis, but then can still get it wrong. In poker you have to deal with the unseen down cards as well as deceptive techniques like bluffing. This could be similar to receiving lousy information from a patient.

But ultimately, a poker hand, a diagnosis, or even a trip, forces you to make a call. If a doctor is hesitant the patient will detect it, which may affect the outcome. A hesitant play in poker is an easy tell for a smart opponent to take advantage of. 

For our family, the indecision about the trip was causing anxiety for all of the adults involved. The underlying fear was the awful “what if my wife and I got COVID and ended up in the hospital.” We’ve both had open heart surgery, so the dire possibility could not be ignored. 

We gave in to the 1% or less possibility of a bad outcome for the family trip to Michigan. But we still have the opportunity for the family from California to stay at our big house with its large backyard in Chicago.

What Konnikova stressed is that there is no such thing as objective reality. However, the best poker player or the smartest decision maker has the ability to get outside of herself to see her own biases, fears, and assumptions. 

The question about the anniversary get-together is whether we can look at our fear for what it is and be wise and gutsy enough to accept the extremely small but real risk. I have reached that point, but my wife still isn’t sure that the risk is worth the reward. 

Konnikova’s book deals with the fact that life is not poker. It’s a lot messier. The consequence of a bad decision about COVID-19 could be death, while in poker it’s just losing chips. But the skills in poker and in life have many things in common. Developing a legitimate personal confidence that you will be right much of the time, while accepting that bad cards occasionally can kill the best of players is the way to live your life to the fullest.

Question: Would you go to a family gathering?

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A Gap in My Perception

By Lloyd Graff

We just recorded the biggest gain in stock prices for any quarter since 1998 with American unemployment at unprecedented levels. You don’t need to read the obvious in this blog, so let’s talk Yeezy, Kanye West, and Gap.

Gap stock rose 42% in one day last week when Kanye West announced he was designing a clothing line with his Yeezy brand on it, exclusively for Gap for 10 years. Gap’s value jumped $2 billion dollars with the news.

Being no fan of hip hop music, but mildly interested in West because he grew up near where I did on Chicago’s South Side, and because he met cordially with Donald Trump at the White House, I checked out Yeezy. The brand has turned Adidas from the German blahs to Jordan-esque cool with outrageously priced sneakers. A Yeezy pair of gym shoes may sell for $500 a pair if you can get them.

I really don’t feel the allure of celebrity apparel, but undoubtedly West is hot today and Gap, where Kanye worked as a kid, is capitalizing on his caché. Will Kanye West become a fading yesterday in a year? Not likely, with the magic of his wife, Kim Kardashian, continually polishing his image?


Another brand that fascinates me with its phenomenal stock performance is Peloton. The company sells an exercise bike and will lose more than $100 million this year. Yet it is worth more than Ford and Chrysler, and its stock has more than doubled since it went public a few months ago.

You don’t buy a Peloton at Dick’s Sporting Goods or Target. For $2,000 you can buy the hardware, but the secret sauce is the $40 a month subscription fee, which brings you a huge array of virtual programs. It also buys you status, because the Peloton bike is the Tesla of exercycles. Like Kanye’s $500 Kicks, it is the brand of the cool rich folk on the 40th floor of Manhattan high rises. And you can use it without having to schlep to the gym and put on a mask with the other infectious plebeians.

The branding is working brilliantly. The company is worth $16 billion.


Another fascinating story is Nikola, headed by Elon Musk wannabe, Trevor Milton. The company went public a couple weeks ago and has a market cap approaching $30 billion. They plan to build hydrogen powered semi-trucks at a yet-to-be-built plant near Phoenix. They might get a vehicle on the road in a couple of years. They are also taking reservations for a battery powered pickup truck called the Badger, which will eventually compete with Tesla’s Cybertruck, which Musk is already testing.

Nikola’s branding is clever, right down to the name, which is a play on the first name of the famous Serbian-American inventor Nikola Tesla.


One other stock I like to follow is DraftKings, which is an online sports betting company. The stock goes up and down with the likelihood of playing the baseball, basketball, and football seasons. When COVID flares up and players fall ill, the stock price falls. The company is valued around $10 billion dollars now. It is a play on the likelihood of a viable vaccine in a short period of time.

An assessment of Gap, Peloton, Nikola, and DraftKings, paints a colorful picture of America around the 4th of July 2020. The promoter and the entrepreneur are definitely alive. Should we be joyful or sad? Not a Yeezy question.

Question: Did Gap make a good deal?

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Ep. 87 – A 7-Axis Collaborative Robot for Non-Programmers, with Zac Bogart

By Noah Graff

Today’s guest on the show is Zac Bogart, founder of Productive Robotics.

Productive Robotics manufactures a 7-axis collaborative robot called the OB7. Zac says that the OB7 is different from other robots because it can’t be programmed with code, it only works by the operator showing it what to do. Also, by featuring 7 axes rather than the 6 axes of a typical robot, the OB7 has the ability to do more awkward human-like movements, such as grabbing a part inside a CNC machine while not being directly in front its door.

Scroll down to listen to the podcast. Or listen on your phone on Apple Podcasts and Google Podcasts.

Main Points

3:10: Zac shares how he got his start, creating large robots to move around special effects equipment for the film industry. His experience working with non-programmers inspired the company to build a type of robot that anyone could use.

5:15: Zac describes how his company, Productive Robotics, began developing collaborative robots in 2015. Its goal was to produce a user-friendly robot that didn’t require programming but learned through demonstration. 

6:05: Zac talks about the advantages of his company’s 7-axis robot, the OB7. He says it mimics the human arm, giving the robot more maneuverability in the workplace. For instance, the robot can reach into a machine’s door even while it is not directly in front of it.

7:30: Zac describes typical applications for the OB7 in a CNC machine shop and how the robot is used to simplify routine and monotonous tasks on the shop floor.

10:50: Zac talks about the difference between how the OB7 moves from other collaborative robots on the market. It is not programmed using a series of points like traditional robots. This can make its movement seem more natural and less “robotic.”

14:35: Zac says the OB7 has a tablet, but it does not work by inputting code like most other robots. Zac says that there is still a place on the tablet where you can see coordinates if needed, but controlling the robot is almost entirely based on showing it what to do.

16:15: Zac says other collaborative robots on the market say they have easy programming, but it’s only easy if you are a programmer. He says many people are able to learn how to program a robot using code, but they still have to spend time and energy learn. 

18:35: Zac talks about asking his son to teach him how to swing a baseball bat. He wanted to observe how his son showed him how to swing a bat. Understanding this aspect of the learning process aided Zac in designing the OB7.

22:00: Zac says that the OB7 doesn’t require an integrator to install it in most cases. For CNC machining customers, Productive Robotics includes a package that enables the operator to set it up.  

24:00: Zac says Productive Robotics emphasizes safety in its products. He says that all collaborative robots have certain standards they must comply with regarding their speed.

25:00: Zac says we are in the second inning when it comes to building robots. He says that ultimately all robots will be collaborative robots and we won’t need to program them. He says we will give robots commands and hopefully they will obey.

27:00: Zac says he prefers The Terminator 2 over The Terminator 1. He also talks about working on the special effects crew on the set of Star Wars but not knowing anything about the droids until he saw the movie. 

Question: How have you used robots in your machine shop?

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Ep. 86 – Work is Coming Back from China, with Mike Micklewright

By Noah & Lloyd Graff

On today’s show, we’re talking about manufacturing returning to the United States from overseas. Our guest is Mike Micklewright, Director of the Kaizen Institute.

Mike says we may have finally reached a tipping point when manufacturers accept that it makes sense to produce goods again in North America.

Scroll down to listen to the podcast. Or listen on your phone on Apple Podcasts and Google Podcasts.

Main Points

(2:15) Mike Micklewright explains that Kaizen is about transforming businesses to get rid of waste in their processes and building a culture of continuous improvement. He says this is accomplished by putting the right systems in place for leadership and communication.

(3:30) Lloyd Graff asks if the Kaizen Institute has its own waste. Mike says the institute needs to limit waste like all organizations and it has systems in place to try to operate by the principles it espouses.

(4:30) Mike defines on-shoring as bringing the industrial base and manufacturing base back to the closest proximity of the consumer.  

(4:50) Mike says that manufacturing goods overseas and shipping them to the consumer creates significant waste. He says companies that outsource to China don’t always look at the total cost of production. 

Mike Micklewright, Director of the Kaizen Institute

(6:45) Mike says that one challenge to bringing manufacturing back to the United States is that purchasing people are evaluated on a metric called Purchasing Price Variance (PPV). He says PPV signifies the actual price vs the standard price. He says the standard price sometimes means the price of an item the previous year, and purchasing people are trying to make the actual price lower than that. Making products overseas is one way to try to accomplish that goal. Mike says the purchasing people often do not look at the transportation costs or other logistics costs. He says they also fail to take into account risks such as labor strikes, natural disasters or pandemics.  

(8:35) Mike says there is a ton of data available to present to top management of companies to try to make them see the waste caused by off-shoring. He says we need to utilize various tools available to present the data, otherwise they will just choose to ignore it and keep doing what they have been doing. He says the trade war has also helped pursued companies to bring work back.

(10:20) Mike says Covid-19 and other recent catastrophes have made companies consider risk factors more than ever before. He says Covid-19 demonstrated how reliant the United States is on imports from foreign countries for its livelihood.

(11:40) Mike says Japanese companies set a good example of how to be self-reliant. They want to keep their manufacturing close to their consumers. They also don’t want to borrow money from their governments or from foreign governments. 

(14:00) Mike says the US isn’t totally ready to bring a lot of manufacturing back. He says the US manufacturing base has shrunk and the country has less people with skills and interest in manufacturing. He says implementing robots in shops and new education programs are helping to deal with the workforce problem. 

(17:25) Mike says outsourcing to Mexico is less of a problem than outsourcing to China. He says it creates less waste because Mexico is closer and its culture is more similar to that of the US. However crossing borders has challenges as well as potential for political strife between countries. Mike says bringing back manufacturing from China and putting it in Mexico is called near-shoring, as opposed to on-shoring. He says near-shoring has been occurring more than on-shoring.

(20:15) Mike says he hasn’t seen a lot of waste costs for the manufacturing industry caused by Mexican drug cartels. But, he says their influence the Mexican government could increase risk of doing business there.

(22:30) Mike says wages in China have been rising for the last 20 years, and this has brought some work back to the US. He says Covid-19 and the trade war may have finally caused a tipping point for companies to bring work back to the US. Yet, still he admits he can’t name specific companies doing it. He says some information about this is confidential.

(23:00) Lloyd says we hear in the used machinery business that US companies are quoting against China, but still he seldom hears of much work actually coming back. Mike says we need to get salespeople to understand the concept of “total cost of ownership” so when they are asked to make a proposal they are not just presenting a price tag. 

(27:00) Mike says that even though we have not seen on-shoring yet on a large scale, the issue is hitting mainstream news rather than just business news, which could mean we are at a tipping point.

(29:00) Mike says that he just bought a 1992 Winnebago to take a two week trip. He says he bought it at a good price, but then he had to pay an inspector and it needed lot of repairs. He says his purchase was a demonstration of people’s natural inclination to look only at price, rather than look at total cost. 

Question: Is work coming back from China?


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The Jackie Robinson Connection

By Lloyd Graff

Ed Howard was a star player for the Jackie Robinson Little League team that went to the Little League World Series in 2014. Last week, the Chicago Cubs picked him in the first round of the major league baseball draft. He was the number 16 pick overall, and it was the first time the Cubs have ever picked a Chicago player high in the draft.

The symbolism of an African-American from that Jackie Robinson team becoming a future Cub is powerful for me. As a boy, I went to Wrigley Field with my mother, an avid Cubs fan, to see the Cubs play the Brooklyn Dodgers when their best player was Jackie Robinson. 

Jackie came up to the Dodgers in 1947 to break the color barrier of Major League Baseball.  When I was 11 years old, I did not understand segregation in sports, but I do remember my excitement over the Cubs bringing in Ernie Banks and Gene Baker in 1954.

Drafting Ed Howard during this period of racial unrest in America is a reminder of the change I have seen in this country in my lifetime. Howard was considered the best shortstop prospect in the 2020 draft, but I believe the reason Theo Epstein and the Cubs picked him is because of the symbolism of getting a hometown black player from that Jackie Robinson Little League team which had captured the imagination of the city of Chicago. 

If Howard has just a hair of the charisma Jackie Robinson had, he will be a huge star for the Cubs.

Jacky Robinson Sliding into Home vs. New York Giants

I keep a giant photo of Jackie hanging in my garage, so every day that I leave the house I see Robinson stealing home against the hated New York Giants with the umpire calling him safe. Although I love baseball, it is the only baseball picture I have hanging in the house. I still have a bat signed by Ernie Banks, but that photo is the most significant sports memorabilia I own.

Race and sports and their interaction have been threads that have helped define me during my lifetime. 

I watched the greatest football player who ever lived, Jim Brown, from his days at Syracuse University to his incredible career with the Cleveland Browns. I was shocked when he retired from the game while still at his peak, also a huge sports memory.

In basketball, probably my greatest memory is rooting for the unknown Texas Western team as they defeated University of Kentucky for the NCAA Championship in 1966. Adolph Rupp coached the Kentucky Wildcats, who wouldn’t have a black player on the team until 1969. Texas Western was the first college team with five black players in the starting lineup, led by Hall of Fame coach Don Haskins. 

I have lived a lifelong struggle with my own gut-level feelings of racism, fighting with my feelings of kinship with black people as a Jew and an American, trying to live up to the ideals of my religion and country.

Jackie Robinson always will be my greatest sports hero. Here’s hoping 18-year-old Ed Howard, who went to high school a few blocks away from my childhood home, will become worthy of my walls and my cheers.

Question: Is baseball dead to you?

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