Category Archives: Business

Best of Swarfcast Ep. 33 – A Successful Woman in the Machining Business

By Noah and Lloyd Graff

Happy New Year! As much of the Swarfcast team is on vacation through the holiday season, we’re sharing a few of our favorite podcasts from 2019. This week, we feature an episode we did with Aneesa Muthana, the owner of Pioneer Service Inc., a CNC machine shop located in Addison, IL. The episode originally aired in March of 2019.

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Lloyd and Noah write: “On today’s podcast, we interviewed Aneesa Muthana, owner of Pioneer Service Inc., a CNC machine shop that features 26 Star CNC Swiss lathes. Aneesa shared her fond memories of being raised on the floor of a centerless grinding shop, M&M Quality Grinding, founded by her Yemeni immigrant parents. While other girls were playing with Barbie dolls, Aneesa relished learning to use micrometers and cleaning out oil tanks from Cincinnati centerless grinders. At 23 she left M&M, where she had once thought she would stay forever, and bought into Pioneer Service Inc. a Brown & Sharpe shop owned by her uncle.

Aneesa Muthana of Pioneer Service Inc.

Aneesa shared her views on a number of topics, including how women are treated in the machining industry, her preference to work with Star CNC Swiss lathes over Samsung and Brown & Sharpe machines, and the significance of the hijab she wears.”

Question: What are you looking forward to most in 2020?

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New Year, New Product

By Lloyd Graff

The Food and Drug Administration (FDA) makes it almost impossible for a small company to develop an effective drug and bring it to the marketplace.  It’s one of the main reasons drugs are so expensive in the United States and introduction of new drugs is so slow.

Yet once in a blue moon a relatively small pharma company, living on borrowed money and borrowed time, defies all the odds and slithers a potential blockbuster drug through the laborious regulation, testing, and lawsuits of fat pharma that wants to squash potential competition, and dashes to the finish line.

This happened a few weeks ago when Amerin Corporation’s Vascepa won expanded approval for heart patients, not only with elevated triglycerides but also for diabetics and millions of other Americans with elevated cardiac risk.

This is after Pfizer, which makes Lovaza, the current favorite artificial fish oil capsule (which I have taken for 10 years) has sued them, and the FDA has taken its sweet time to get the tests done to expand its recommended use for the majority of heart patients who currently take statins.

The first statins came out 30 years ago and have probably given heart patients worldwide hundreds of millions of extra years of life.  Fish oil and synthetic versions have also helped, but the reduction of cardiac events shown by this fish oil substitute with some kind of secret sauce developed out in left field called Vascepa has stunned and confused the complacent drug companies and probably the FDA, which may explain why it has taken so long to get it into the mainstream pharma world.

Yet this is typical of innovation. It almost always starts in a garage or workshop as an idea.

I think of Google boys, Larry Page and Sergey Brin, who had no money after leaving Stanford in 1996 but had some goofy ideas about how to make the internet more useful for people.  Sergey asked his future sister-in-law Susan Wojcicki, who had a home with a garage near the campus, if they could camp out in it and keep their computers there.  Susan, who is now in charge of YouTube, probably said, “Sure, but clean up when you’re done.”  Soon after Google was born.

Innovation is still coming from little people, tinkerers, creators who just hope they can solve a problem, make something better, or invent something cool.  Often they are doing it not to make a mint of money but because they get satisfaction, joy, maybe a sense of fulfillment.

YouTube started that way, so did WhatsApp and Instagram.  All were gobbled up by Google or Facebook long before they generated a profit because folks like Larry Page and Mark Zuckerberg know the value of a great idea even in its nascent state.  So did Tim Cook at Apple when he paid a billion dollars to Dr. Dre for his earbuds and fledgling music service, which were a great idea but a mediocre product before Apple put its name and technology behind them.

Big companies are generally lousy at innovating but good at improving manufacturing and marketing.

I was reminded of innovation when I read on the PMPA (Precision Machined Products Association) listserve a request by a reader of the Swarfblog, Randy Lusk.  Randy had a part he wanted to run on a Miyano BNE-51SY, and he wanted to shave the part.  His research indicated there was no tool sold that would do this so he was thinking of improvising with a 62H Slitters Shave he used on a 1-3/4” 6-spindle Wickman multi-spindle automatic.  He figured it would work if he could build a base to allow it to fit the Miyano.

If there isn’t a product on the market, “well, there ought to be, so I’ll make it,” is the mindset of a guy like Randy and a myriad of other folks in the precision machining community.

If you take the macro view, this is what the Chinese are not good at, and they know it.  Their approach has been, “If we don’t have it, steal it.”  This approach can be very useful in the short run, but it is a failure long term unless America continues to allow them to steal technology in exchange for access to their market.  An educational and political system which preaches conformity and orthodoxy at all costs ultimately collapses, I believe.

To Chairman Xi in China, trade issues can be negotiated, finessed, and circumvented.  For him, the existential problem facing China is the desire for freedom exhibited by the people of Hong Kong.  If he sends in the tanks and mows down the protesters, China will be seen as a hapless butcher that fears its citizens.  It will be another Tiananmen Square disaster.  And protest could spread to the mainland.  If he lets it continue to burn and gain strength in Hong Kong it could spread to Macau and then to the mainland.

He has a huge problem going into 2020, and the U.S. should do nothing to help him with it. They haven’t been trained in China to adapt old shave tools to modern equipment.

They also don’t know how to deal with dissent.

Question: What new thing have you created?

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Best of Swarfcast Ep. 39 – Machining Parts for the Amish

By Noah Graff

Happy Holidays! While much of the Swarfcast team is on vacation through the New Year, we’re sharing a few of our favorite podcasts from 2019. This week, we revisit Episode 39, in which Noah interviews Jay Sauder, owner of Sauder Machine in Plymouth, Ohio. This episode originally aired in May.

Noah writes, “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.

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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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Our Take on the Machining World of 2019

By Lloyd and Noah Graff

In today’s podcast Lloyd and Noah Graff reflect on their experiences in the machining world of 2019. What did we see this past year? What did we learn? How did it feel?

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Main Points

(2:07) Lloyd says when he thinks of 2019 he thinks of his “constant battle between despondency and hope.” He feels like one deal can make or break a year in the used machinery business. 

(3:45) Lloyd and Noah talk about the importance of journaling about their days. Lloyd tries to do it in the middle of the work day while Noah prefers to do it at night. Both agree that by journaling they realize they did indeed accomplish things, and have significant conversations and experiences on a given day. 

(6:00) Noah and Lloyd talk about the grim political news of 2019. Lloyd says everything is focused on conflict. Noah says in 2019 he found he was happier and more productive by minimizing his news intake.

(7:00) Lloyd says ironically one of the more fun parts of 2019 was watching the Chicago Cubs games and sharing the experience with family by texting and calling during the games. He also says one of his greatest pleasures is working with Noah, and that he would not work in the machinery business without having Noah question and push him. He says the day he can’t handle being questioned is the day he should retire.

(10:50) Noah talks about his personal growth with self-help books such as Dale Carnegie’s How to Make Friends and Influence People. Noah and Lloyd talk about their strategies on how to make others feel important and comfortable in conversations.

(15:50) Lloyd says one of the most significant experiences of 2019 was being conned by an international customer. It was a lesson in the importance of doing due-diligence and that it is impossible to know who to trust, even after meeting them in person.

Lloyd and Noah reflect on another year in machining

(23:13) Lloyd predicts what used machines Graff-Pinkert will focus on selling in 2020. He believes in focusing on the “unloved machines” such as multi-spindle screw machines rather than all late model CNC equipment because older equipment has potential for better margins. However, he still preaches caution because machines are “unloved” for a reason. 

(25:00) Lloyd says the European automotive industry seems to be betting on electric cars much more than that in America. The unchartered territory has made high production machining companies in Europe nervous and indecisive about what work to go after in the next few years. 

(28:30) Noah remarks that the values of multi-spindle screw machines seem to have fallen dramatically in the last year. High quality European screw machines sold for incredibly low prices in a few recent auctions. Lloyd says it demonstrates buyers are cautious, but he thinks people’s mindsets could change in the near future.

(36:00) Noah says he is grateful he gets to create Swarfcast. He thanks the show’s loyal listeners and proudly announces the podcast has its first paid advertiser, Firetrace. He gives his pitch for listeners to subscribe, share, and rate the podcast.

Question: What is one thing you will remember from 2019?

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Ep. 64 – Automating a Machining Business with David Wynn

By Noah Graff

Today’s podcast is part two of an interview we did with David Wynn, CFO of ABF Engineering and Machining, a third generation screw machine shop in South Fulton, Tennessee. Dave makes a lot of his profits on mechanical screw machines that are older than him, but he emphasizes using advanced technology to automate his business’s processes.

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Main Points of the Interview

(2:15) David says it is important that his employees be driven individuals. He wants people who can work independently in a loosely structured shop environment. His employees can divide their work amongst each other as they want and structure their time how they want as long as they meet production goals. Dave says the more power you give your people, the better they perform.

(3:55) Dave says his goal is to one day have someone else handle the day to day responsibilities of his company so he can focus on growing the business by improving customer relationships and automating business processes. He says he would like to be able to step off the face of the earth for 30 days and and then return seeing the company running smoothly as though he never left.

(8:20) Dave discusses his goal to automate every part of the business that takes his mind away from the key tasks at hand. He says his shop has one button that turns off the all the lights, regulates air conditioning, turns off exhaust fans and everything else necessary to leave the building.

(10:20) Dave talks about the parts he is making on his Brown and Sharpes. He says if he has a high production run he can often can get a closer tolerance on a Brown and Sharpe than a modern CNC machine because the machine is rigid like a tank. 

(13:35) Dave says he does not see his company as competing with China. He says his parts are not commodity parts because he often does short runs of 500 pieces or less. He jokes that “a Brown and Sharpe was a CNC before CNC was cool.”

(14:20) Dave says he feels the machining business in his blood. He thinks the machining bug has been passed down to his 5-year-old son who has been coming to the shop every day since he was born.

(18:20) Dave says he is glad he went to business school rather than going straight into the machining business out of high school because it taught him to determine the values of assets. He says his dad had actually forced him to go to college.

(20:35) Dave says he sees purpose in the machining business because every mechanism people use has parts that have been machined. He appreciates creating tangible products rather than merely creating liquidity in the finance industry.

Question: Is a college education important for running a machining business?

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Ep. 63 – Running a Machine Shop like a Tech Company with David Wynn

By Noah Graff

Today’s Swarfcast is part one of an interview we did with David Wynn, CFO of ABF Engineering and Machining, a third generation screw machine shop in South Fulton, Tennessee. After earning an MBA, David joined his family’s business 17 years ago. His stated mission is to run a machining business composed of old cam screw machines as though it were a tech company.

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Main Points of the Interview

(2:40) Dave gives a history of ABF Engineering and Machining. The business was started by his grandparents and father in 1976. They primarily ran Brown & Sharpe screw machines.

(4:45) Dave talks about the machines in his shop. He said the company has Haas lathes, CNC Swiss, and a CNC mill, but still more than 50 percent of the company’s work is done on Brown & Sharpe screw machines. The company is running 15 Brown & Sharpes currently, but Dave says he has about 100 in the building.

(6:30) Dave gives a brief education about Brown & Sharpes. He says what makes Brown & Sharpes productive is that an operator can work with the turret and other tools simultaneously. The machines are extremely rigid, and have a gear driven 5Hp motor.

(12:47) Dave explains how building a cam for a Brown & Sharpe screw machine is similar to writing a CNC program for a Swiss machine. The main difference is the CNC program is immediately implemented while the cam takes days to build.

(14:45) Dave talks about how he came into the business. He had never stepped foot in the shop before he turned 18 years old. While in college and grad school he began working at the company. He earned an MBA, but instead of going into the finance industry he fell in love with the machining business and decided to do it full time.

(18:40) Dave talks about how ABF Engineering and Machining changed after he and his father bought it from his grandfather. He says they chose to focus on creating a new culture based on teamwork and innovative work practices. They prefer to hire people who fit into the company’s culture rather than hire based on an applicant’s talent.

(21:55) Dave talks about the company’s unconventional practices for work hours. Its employees have the flexibility to work when they like and choose how many hours they work as long as they get their work done and work as a team. He says that most outsiders look at him like he is a space alien when he tells them about some of his policies.

(28:40) Dave says that usually the people who are most successful at his company are the ones who put in a lot of hours at the shop and also at home. One of the characteristics he looks for in a great employee is someone who is constantly trying to better herself.

Question: Do you know how to run a Browne and Sharpe?

 

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Ep. 62. Small but Profitable Swiss Shop with Travis Erickson

By Noah Graff

Today’s podcast guest is Travis Erickson of Precision Components of Oxnard, California. Precision Components runs Tornos CNC Swiss lathes, specializing in producing custom mil-spec contacts primarily for the aerospace industry. Travis and his father handle all of the company’s machining and quality duties and employ only three people in their shop.

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Main points of the interview

(2:50) Travis explains the core of his company’s business, custom mil-spec electrical contacts that go into circular connectors for large OEM aerospace companies. The company produces parts ranging from 16mm all the way down to .0013mm.

(4:45) Travis talks about the Tornos Swiss machines at Precision Components. The company has nine DECO 10, a DECO 13a, an EvoDECO 16, and an old ENC 162 which Travis says is practically older than him. Travis says his father bought the first Tornos DECO sold in the United States in 1997 or 1998, a DECO 10 that is still running in the shop today. Travis says the company’s EvoDECO 16 cost around $400,000 new after freight and options. He says possibly other Swiss brands could do the company’s work, but he has no plans to switch because he knows Tornos machines produce the tolerances he needs.

Travis Erickson of Precision Components, Oxnard, CA

(7:24) Travis talks about the history of Precision Components. His father started the company in 1988. Travis says he is 34 years old and has been working at the company for 11 years since finishing college at U.C. Berkley. The company is literally right around the corner from the Haas Automation factory, but it has never had the need for any Haas machines.

(9:45) Travis says Precision Components doesn’t advertise with a website, despite his degree in marketing. He says the company has a core group of reliable customers, and right now he is not concerned with striving for huge growth.

(10:30) Travis says aside from he and his dad there are only three guys who work in their company’s shop. They handle tasks like parts cleaning, tumbling, deburring, light assembly and monitoring the machines. Travis’s Dad is the primary machine setup person and operator, while Travis handles quality and the company’s business responsibilities. Travis says the company at one point had 11 total people, including two setup guys, but it downsized in 2009-2010, and the setup people left to explore other opportunities. He and his father realized that the company could operate successfully with a much leaner but efficient workforce.

(15:05) Travis says he thinks the machining business will slow down next year because of the Presidential election. He says that the “big boys” like Boeing and Raytheon typically buy a lot of inventory leading up to an election and then wait to see what happens before they start funding new projects.

(17:10) Travis says he knows it will be important to grow more and invest in some employees in the near future now that he is starting a family.

(21:30) Travis talks about the challenges of running a machining company in California such as state taxes, hazardous waste permits and wild fires (which caused this podcast interview to be postponed a week).

Question: Do you wish your machine shop was larger or smaller?

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Haas Doubling Down on Vegas

By Lloyd Graff

I find California the most interesting state in America. It is not known as a machining mecca, but it is home to America’s most progressive and largest machine tool builder, Haas Automation of Oxnard, north of Los Angeles.

It appears we may not be saying that much longer as Haas prepares to build a gigantic manufacturing complex in Henderson, Nevada, just outside Las Vegas. Gene Haas, the owner of the company bearing his name, has bought a home in Henderson so he will be able to have his eyes and ears to the ground in the 2 million plus square foot project. He will also save a bundle on taxes in Nevada.

He is following the lead of Elon Musk, who is based in the San Francisco area and builds Teslas in Fremont but constructed his massive battery plant in the Reno, Nevada, area.

California is still a great place to live, go to school, start companies, vacation, and press olive oil, but for making stuff profitably it is Alcatraz. Skilled people find it hard to afford unless they commute from the boonies and start at 4:00 AM. The politicians are hostile to manufacturing because they think it pollutes everything. California’s regulations and taxes make those of Illinois look benign.

Rendering of new Haas Manufacturing facility in Nevada

Many people with homes they have held for decades are selling to move to Idaho, Utah, or Nevada because they are livable places that are still affordable by California standards.

I understand Haas is offering some great end-of-year sales these days, but that may not be because of preparations to move to Vegas. You don’t build 2 million square feet of manufacturing space overnight, even if you are Gene Haas. Likely the company will have two facilities for while, still using its original location in Oxnard, California.

* * * * *

Another interesting event in the L.A. area besides forest fires and power outages is the return of Harvinder Singh to the machining business.

Mr. Singh sold his interest in Ganesh Machinery to a private equity firm in 2018 and began a machine tool financing firm in nearby Moorpark, California. Running Ganesh Singh had built up the import of Taiwanese lathes and machining centers with aggressive pricing and attentive customer service. His company did not try to be the most sophisticated provider but gained market share by selling value.

Evidently the new people who bought the firm did not have a feel for the industry and were heavily leveraged. When Ganesh did not produce the returns they were hoping for they abruptly sold off the finished inventory to an auction firm and abdicated.

Harvinder says he did not know it was coming until it happened, but he happily came back to pick up the pieces. He says he reassembled the company within a few weeks, and it is now up and running under a new name, Expand Machinery LLC. He hopes to really hit his stride by the New Year. In the meantime, he has kept the financing business while he puts Ganesh back together.

In business nothing ever stays the same. In California that seems doubly true.

Question: Are you happy with the location of your business?

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Swarfcast Ep. 61 – Xometry’s Greg Paulsen on Facilitating a Manufacturing Network

By Noah Graff

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Today’s podcast centers around a company that provides capacity for machining firms that lack resources to meet clients’ needs.

Our guest is Greg Paulsen, Director of Application Engineering for Xometry. Xometry provides manufacturing on demand using an artificially intelligent quoting system and a manufacturing partner network of over 3,000 companies.

Main points of the interview

(3:00) Greg explains his background in product development working for firms in the additive manufacturing sector. He discusses the his dislike in his previous job of sending out lots of RFQs and then having to wait for responses. 

(3:40) Greg explains that Xometry’s purpose is to get rid of the RFQ process for most parts using AI technology. On Xometry’s website a person can submit a 3D CAD file and instantly receive an estimate for price and lead time on a job. 

Greg Paulsen of Xometry

(4:12) Greg says that Xometry has a network of manufacturing partners that can provide CNC machining, sheet metal processing, injection molding, as well as 7 different 3D printing processes for over 60 different materials.

(5:05) Greg characterizes Xometry as a storefront that connects work with those that are best able to produce it. It has over 3,000 manufacturing partners, mostly small manufacturers of diverse disciplines. Greg says that the large number of companies in Xometry’s network quoting work enables it to determine what price is “market fair” for a job.

(7:35) Greg says it is easier to quickly determine prices on low volume jobs (1 to 1,000 pieces). He says often large companies such as Bosch use Xometry so they don’t have to worry about producing very small volumes. He says that Xometry can also facilitate high volume jobs, but clients would have to have a more involved consultation with Xometry’s staff to set up the process, rather than using the online quoting system.

(9:30) Greg says Xometry is usually used by companies who are already working at full capacity and then receive unexpected work. He says shops also utilize Xometry when they need to do work that doesn’t fall into their normal areas of expertise. 

(11:30) Greg talks about how manufacturing firms can join Xometry’s partner network. He discusses a vetting process in which Xometry pays potential partner manufacturing companies to make a sample part.

(27:50) Greg talks about another service Xometry provides that he calls the Finishing Network. Xometry matches manufacturers with partners that can provide secondary operations, anodizing for example. In these matches the clients can communicate directly with each other, unlike Xometry’s anonymous manufacturing on demand service. 

(35:40) Greg talks about Xometry’s supply services. The company can provide manufacturers with raw materials as well as tooling.

(44:50) Greg talks about Xometry’s revenue model. He says it generally inserts around a 20% margin for transactions. Its system finds the delta between the market fair price for manufacturers’ take rates and the market fair price for the customers’ take rates.

Question: What have been your experiences with manufacturing networks like Xometry?

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Swarfcast Ep. 60 – Alec Mandis, Machining in New Zealand Part 2

By Lloyd and Noah Graff

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Today’s podcast is part 2 of an interview we did with Alec Mandis, Chief Executive of Accord Precision, the largest machined component manufacturer in New Zealand. Over the years Accord has strived to set itself apart by developing a diverse group of niche products. One example is a stainless steel diving helmet made from an investment casting which took the company three years of R&D to produce successfully.

Main Points of the Interview

(2:30) Alec talks about the process to produce Accord’s stainless steel diving helmet from an investment casting. He says that five years ago the commercial diving industry needed a more durable helmet than the standard light weight fiberglass ones at the time. Accord spent three years of R&D to bring its helmet to market.

(7:15) Alec talks about why Accord spent so much time and money to develop its stainless steel diving helmet despite it being a low volume product. He says that creating a difficult product like the helmet elevated the company’s capabilities for process controls. Accord became better prepared to produce other difficult or high risk products such as those for the medical device industry. It also demonstrated the company’s abilities to potential customers.

Alec Mandis with diving helmet made by Accord Precision

(11:30) Alec says that Accord has put great emphasis on statistical process control and ISO registration for decades. The company has ISO 13485 medical device accreditation which enabled it to get FDA registration in the United States in six months, which Alec says normally takes companies four or five years to obtain.

(12:50) Alec says his best trait for running his business is his ability to manage people. He says it is essential to communicate with employees and create strong relationships with them. He says it is important to help them when they need it but push them when possible.

(13:50) Alec says the thing he would most like improve upon is a work-life balance in his personal life. He is trying to spend more personal time with family but says it is difficult while running a business. He thinks New Zealand has a pretty balanced work schedule. Accord’s employees work 40 hours a week over a four day work week, but Alec still works five days a week.

(16:55) Alec says that New Zealand’s geographically remote location has spurred the country’s innovation and self-sufficiency. He says the country has the best magnet manufacturer in the world and is a world leader in the production of MRI machines. The country also shines in the agricultural and dairy sectors.

(18:40) Alec explains that the nickname “Kiwi” for a New Zealander comes from the kiwi bird, which is native to the country.

Question: Can a small machining company afford to do extensive R&D?

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