Author Archives: Ridgely Dunn

Swarfcast Ep. 40 – A New Person Every Day, With Noah Graff

By Noah Graff

In today’s podcast I was interviewed about a book I am writing which documents a year in which I have met at least one new person every day. I started 364 days ago when I met a guy named Tommy, working the bar at a restaurant in Chicago called the Blue Door Farm Stand.

Listen to the Podcast on the player below.

Over this year I estimate I have met 450 to 500 strangers. I have met people on the street, a ton of Uber drivers, and folks from all over the world. I have even been forced to call Comcast late at night, desperate to meet just one new person that day.

The quest to meet a new person every day has forced me out of my comfort zone, and it has made each day more meaningful than it would have been otherwise. How often does time go by and you wonder to yourself, what did I do this week? Maybe you can’t even remember what you did yesterday? But after meeting a person and writing about it, and often taking a selfie photo together, I usually feel that something meaningful happened. I learned something new. I had a new experience.

Right now I call the book “The Meeting People Project” as I haven’t thought of anything more clever.

Question: Who is the most interesting new person you have met this week?

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Tanking

In the world of professional sports “tanking” has become the trendy strategy for a losing team to turn a losing franchise into a contender.  In baseball, the Chicago Cubs and Houston Astros both transformed themselves by becoming ultra-awful losers for several years in order to draft potential stars and develop them into the nucleus of a winning team over five years.  Many teams try to “tank” and rebuild only to languish for years in the purgatory of sports.  The Cleveland Browns and Buffalo Bills of pro football come to mind.

The path seems pretty clear in pro sports, though not so easy to execute in real life.  In business change is constant.  I see the medium-sized suburban shopping centers that had a supermarket, a few restaurants, maybe a Starbucks, a movie rental store, a cleaners, two dress stores, and a Target are mostly pathetic relics.  The big-city print newspaper is another anachronism.  For these entities “tanking” is not a clear option.  There is no “draft” of young stores or advertisers.  For them bankruptcy is the equivalent to tanking, but there is no organized “draft” process for a defunct shopping center or print newspaper reliant on classified advertising.

I think most businesses face the possibility of extinction because of structural change in their industries, if they are successful enough to survive long enough to encounter it.

I am watching it firsthand now in the screw machine industry which has been attacked by foreign competition, technological change, an aging workforce that is difficult to replace, and in the next few years the likely decline in the use of internal combustion engines in vehicles.  Don’t forget the rise of cold heading and hot and cold forging to conserve metal.  The commercial side of the used machinery business has seen the transparency of the internet and

Tanking

the ascendancy of online auctions taking the mystery out of pricing illiquid, obscure market anomalies like machine tools.

For a used machinery dealer like me the “tanking” opportunity does not exist.  There is no “draft” to help the inept dealer.  The bankruptcy option that the shopping center owner has is a lousy one because the outdated inventory does not have underlying land to support its value like real estate.  Scrap iron is cheap.

My approach is to use another sports term, the “pivot.”  Use “quick feet” to change course, but stay on the field and compete.  For the Graff-Pinkert used screw machine business the cam multi-spindles are still profitable tools for new owners to the field but are not profitable enough to merit enlarging their numbers for most companies.  But firms need to keep them running even if they are old and tired.  Companies that used to buy several additional machines each year are now buying primarily repair parts.  Old multi-spindles become packages of scarce replacement parts.

One opportunity is clear. The high cost of labor is pushing even small firms into automation.  Graff-Pinkert is experimenting with buying and selling robots.  We recently bought two FANUC robots with a 15-pound “wrist” capacity.  They were bought new in 2016 and have barely any hours on them.

We also bought an ABB robot that was bought new in 2016 by a mattress manufacturer but never used.  It has a 300-pound lifting capacity.  The robot area appears to have potential.  We have already sold our first one, a FANUC robot that had been loading and unloading a CNC lathe.  Made a few bucks, and we’re building our knowledge and confidence.

We are also heavily involved in Swiss-type lathes and CNC multi spindles.  A lot of competition in this area but also significant demand.

Meanwhile, we continue to sell our older screw machines with heavy value-added options.  Customers will pay for our specialized knowledge even when they shun the old “commodity” screw machines.

Will our current “pivot” work in the changing machining environment?  Probably not.  We will have to continue to experiment and evolve.  Maybe pare down, maybe build up.  It’s business.  It’s constantly up hill.  But if you love “the game” it’s a fun job to try to figure it out.  At least some days.

Question: Is business easier or harder than it was 20 years ago?

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Swarfcast Ep. 39 – Jay Sauder on CNC Machining Parts for the Amish

By Noah Graff

On today’s podcast we interviewed Jay Sauder, owner of Sauder Machine in Plymouth, Ohio.

One of Sauder’s specialties is making hydraulic wheel cylinders for Amish horse-drawn buggies using sophisticated CNC equipment. Sauder and his 10 employees are all members of the Mennonite church. Earlier in his life, Jay himself drove a horse and buggy, but today he chooses to drive a pickup truck. However, all of his employees ride bicycles to work.

Jay told me that the company buys used equipment almost exclusively and seldom buys a machine for a specific job. He purchases equipment when he considers it a good value and fit for his company’s expertise. The company also is unafraid to use a variety of brands and controls, such as DMG, Traub, Haas, INDEX, Mazak, Matsuura, and Hurco because his workers are not bothered switching from one control to another. He enjoyed telling me about two 1988 CNC Traub TNA 480 Turn-Milling Centers that the company is currently refurbishing in-house.

Question: What is the most unusual job you’ve had?

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Betting on Yourself

I think I can learn something from anybody. I think there is a lot to be learned from James Holzhauer who has won $1,691,000 on Jeopardy and is still going strong.

I don’t watch the program, but I have seen it on occasion and remember Rosie Perez in the movie White Men Can’t Jump prep for the show like her life depended on it, hoping for her chance to make a big score. It is a quiz show competition with a betting component which is the perfect combination for James Holzhauer, a 35-year-old Chicagoan who is a trivia champion, math whiz, fast-twitch buzzer, and professional sports better.  He is the archetype of the Jeopardy savant that Rosie Perez dreamt of becoming.

His winning approach naturally depends on his breadth of knowledge and quick-twitch ability, but what sets him apart is his aggressive and unconventional strategy. James starts with the most difficult questions, trolls for Daily Doubles, and bets boldly, often risking his earnings in an effort to quickly put away his opponents.  He knows he is on a streak and so do most of his opponents, which gives him a big psychological edge.

His mantra is “all I have to lose is money,” and he knows he’s the smartest dude on the block, so he continually overwhelms his tentative opponents no matter how skilled they are.

I think there is a lot to be learned from Holzhauer.

I love his confidence and boldness. He believes in himself and that is vital to be a consistent winner. Intimidation can be a huge factor in sports and business. It does not have to go with obnoxiousness. You know when your opponent knows in their heart of hearts that they are going to win.

What really sets James Holzhauer apart is his audacity, his calculated chances in the betting.

In my own business career I have usually been cautious. My son Noah delights in questioning most of my business decisions, often challenging me for hedging my bets. Having seen a million things go wrong in my long business career I have good reason to be cautious, but I know I can learn from the aberrant tack that Holzhauer takes to bet big when he thinks he has superior knowledge.  This is how you win in sports betting and Jeopardy and probably in business over time.

A fascinating complement to the James Holzhauer story is the spotlight on Alex Trebek, the host of Jeopardy since its inception.  He is battling pancreatic cancer at the same time he is hosting the show and pulling in big ratings. Alex is showing supreme confidence in himself as he does five shows in a taping session while dealing with chemotherapy.

My hope is that he and James keep charging boldly into the dark nights of uncertainty.

Question: What is the best bet you’ve ever made?

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Swarfcast Ep. 38 – Connecting on Cobots: James Persenaire of FANUC

By Noah Graff

On today’s podcast I spoke with James Persenaire, a district manager at FANUC America Corporation. James gave insight into the strengths and weaknesses of collaborative robots and how Fanuc’s collaborative robots differ from competitors such as Universal Robot. He also addressed misconceptions about traditional robots that they are expensive and dangerous. He emphasized that the integration of the robot is the primary factor in both its cost and safety.

Listen to the podcast beneath the video.

Question: Have you brought robots into your machining operation?

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Mayday Mayday

Around the world May 1 is May Day, a holiday celebrated by Labor as a demonstration of its power and determination.

In the United States it is another work day and essentially forgotten as is the organized labor movement except by government workers and teachers. The industrial labor movement in America still has its vestiges in the United Auto Workers and Steelworkers and electricians, but it is a withering movement in the small- and medium-sized businesses I deal with.

Retail is a wasteland for organized labor. UPS is organized, but FedEx is not. Uber and Lyft are totally nonunion. McDonald’s and Starbucks are almost completely nonunion. Amazon is non-union.

Politically, the alliance of organized labor and the Democratic Party was significantly devalued by Donald Trump in 2016. He won Ohio, Pennsylvania, and Wisconsin with the votes of union and nonunion labor, and the Democrats were devastated and angry.  Even in the recent Chicago mayoral race, Toni Preckwinkel, who built her power in Chicago with the support of the Teachers Union, was humiliated by Lori Lightfoot, managing partner of one of the most powerful corporate law firms in Chicago.

What happened to labor unions in America?

Haymarket Riot in Chicago, May 1st, 1886

Haymarket Riot in Chicago, May 1st, 1886

A lot can be attributed to Richard Nixon and Henry Kissinger’s rapprochement with China in the early 1970s.  They saw it as a way to blunt the power of Russia, but it also set the stage for the development of China as an economic rival for America.  Our increasingly open trade policies and China’s incredibly successful combination of capitalism and communism captured millions of U.S. jobs and gave corporate America an easy option to combat organized labor.  Self-serving labor leadership in big unions like the Teamsters hurt it.  The opening of the South to big corporations badly wounded unions like the UAW.  Independent steel companies like Nucor opened plants in small towns and gave bonuses for production which whiplashed unions like the United Steelworkers.

To most young people today union membership is barely interesting unless they have a connection to get into a locally strong organization like Chicago’s electricians union, which has connections with big developers who have valuable relationships with key politicians.  This union style is not apt to draw big crowds to demonstrate on May Day.

It’s an insider’s game now.  If that approach continues organized labor will soon be seen as a relic of Depression days to be occasionally studied in American history classes.

Question: Would you want to be in a union?

 

 

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To Spray or Not To Spray?

By Lloyd Graff

I am in the process of making a lot of changes in my surroundings. The axiom used to be that as you get older it gets harder to change, but I don’t find that to be true. Seeing friends and associates get sick and die makes it easier because I want to sandwich more stuff into my life while I still can. If I have the energy and the money to replace the old appliances in the house and sand the floors and paint the walls I want to do it now.

The redo in my house has nothing to do with enhancing its value. Where I live home prices have stagnated for 30 years. Whatever money I’ve spent is an investment in happiness, not appreciation. Maybe that is the ultimate value play, anyway.

This year I’m spraying the apple trees on the Graff-Pinkert property. They have a fungus on the bark, and last year we lost the entire crop. This year I hope to see a big crop of tasty, red Jonathan apples in September. Is it an economic judgment to spray? Hardly. It is all about the fun of picking and eating the fruit.

I think of all the money I have sunk into my warehouse over 35 years. Recently I spent $10,000 to remediate moldy walls and drywall. It was an investment in health, but it really brought me no joy. Of all the investments I have made in the property the one that undoubtedly has brought me the most pleasure is paying a young artist, Mike Eisenwasser, 15 years ago to paint a mural on the side of a 40-foot container next to my warehouse. I see it every time I drive onto the property and every evening when I leave. I look out on it during the day. It is colorful and symbolic. It tells a story that gives meaning to my life and work, of connecting people through commerce and writing. It gives a visual voice to how I feel about my work.

used machine business graff pinkert with apple treesI think the value of art and storytelling is really undervalued in manufacturing businesses. People like to work in pleasant surroundings. I think customers often want context for what they are buying, whether that is in a story on the website, a sales person embodying the product, the packaging of the material, the voice that answers the phone, or the follow-up or apology for mistakes or delays.

The people who think everything in business is by the numbers are wrong. Decisions often are not clear cut in business. If it is a close call the winner is usually the one who is considered the most reliable or easy to work with or caring.

I imagine lots of folks are bewildered that Noah and I spend so much time on stuff that may seem frivolous and frothy to the community we serve. From a financial standpoint Today’s Machining World and the podcast are hardly great investments in time and energy. But Noah and I view ourselves as storytellers and artists. We do this work because our creative souls long for expression. It gives us joy to reach out to the thousands of people who connect with us frequently or once in a while.

I think the connections we make do ultimately bring us customers but that is not the purpose of this investment. We do it because we love to do it. We do it because we almost have to do it.

Question: Can you justify epoxying a factory floor?

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Swarfcast Ep. 37 – Finding Purpose in Your Work with Brent Robertson

By Noah and Lloyd Graff

Have you ever asked yourself what your purpose is when you go to work in the morning? Sometimes I wonder if I’m spending enough time making an important impact on the world, or if I’m too wrapped up in the mechanics of making deals on machine tools.

In this week’s podcast we interviewed Brent Robertson of Fathom. Brent is a business philosopher and consultant. His mission is help people discover what their purpose is, beyond just making money. He has found that if he can give people purpose in what they do, it inspires those they work with and their clients as well.

Listen to the podcast below the video.

Question: Is making money purpose enough for you?

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Machining the Fair Way

Francesco Molinari, the Italian professional golfer who has entered the top tier of pros who are factors in every major tournament, led by two strokes going into the final round of the Masters Sunday.

I have followed Molinari with more than a casual interest of late because he has used a putter made by a 90-person job shop just down the road from Graff-Pinkert in Tinley Park, Illinois. I met the owner, Bob Bettinardi, at IMTS. We were both resting our bones for a few minutes next to the Universal Robots exhibit, and we talked a bit about CNC mills and his putters business, which has evolved from the job shop that was its origin.

Bettinardi had a golf shirt on with Bettindari Golf’s logo. He has built a product with worldwide reach out of a small Haas mill shop.  This is the dream of so many independent entrepreneurs in our machining world who long for the margins and stature that come from a world-renowned product.

Bettinardi’s branded putters sell for $300-$400 for a club similar to the stick Molinari used to win the British Open at Carnoustie last year.  He also makes an $800 putter with a copper insert.

For a shop running VF-3 Haases with less than 100 employees, Bettinardi is playing in the big leagues with Callaway Golf and Mizuno dominant in the golf club world. It appears Callaway lured Francesco Molinari away from Bettinardi this year though Matt Kuchar, still a prominent pro, and many other up-and-comers are still using the Tinley Park shop’s putter.

Francesco Molinari's former Bettinardi Putter

Francesco Molinari’s former Bettinardi Putter

A Bettinardi faces a daunting challenge going up against the Callaways of the golf world. They have enormous marketing budgets, and a putter’s design can be easily copied. I do not believe Bettinardi has a patented putter. He has to make a product that pro golfers adore, convince them to stay with it for years, and hope his devotees win big tournaments to popularize his sticks. A company doing maybe $20 million a year in sales can do the golf shows and hit the big retailers, but it is always an uphill battle against the Callaways who have constant exposure in the equipment market and have their name on half the golf bags on the pro tour.

This is why small, closely held family businesses like Bettinardi Golf sell out to the behemoths. I do not know if Bob will sell out or if Callaway, with a market cap of $1.6 billion, will eventually crush him by stealing away all the Molinaris of the golf world when they get hot.

As an independent observer and former mediocre golfer, I hope he keeps milling fantastic, elegant putters in Tinley Park, Illinois, and selling them direct on Amazon for $399 a pop.  I’d like to see him buy a dozen more Haas mills and put “Made in USA” on every lovely club he makes.

Maybe today Francesco Molinari will wonder if he could have beaten Tiger Woods at the 2019 Masters if he had had the Bettinardi in his bag.

Questions: 

Is there an even playing field in the machining business?
Has Haas helped even the playing field?

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Swarfcast Ep. 36 – Ben York on Taking the Art Out of Machining

By Noah Graff

In today’s podcast I interviewed Ben York, an inventor and consultant for machining companies. I met him at the 2019 Precision Machining Technology Show where his company, Theory 168, was presenting his Perfect Zero Alignment system. The system uses a camera installed in a CNC machine to set work coordinates and align and set tooling (see demonstration video below).

Ben said his mission is to “take the art out of machining.” He wants machining to be easy enough so people can do it even if they don’t know the “tricks of the trade.” In the podcast Ben talks about his process of inventing his new product and starting a company in the machining field.

Listen to the podcast below the video.

Question: Is machining an art form?

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