Category Archives: Swarfblog

Ep. 76 – Focusing on Obstacles with Gabriele Oettingen

By Noah Graff

Today’s guest on the podcast is Gabriele Oettingen, professor of psychology at NYU and author of the book “Rethinking Positive Thinking: the Science of Motivation.”

Contrary to conventional wisdom that asserts “positive thinking is always positive,” Oettingen’s studies have shown that people who embrace only positive thinking as a way to reach their dreams are often the least successful in achieving their goals.

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Gabriele’s strategy for success requires people to identify realistic, specific goals and then identify potential obstacles along the way. She calls it WOOP which stands for Wish, Outcome, Obstacle, Plan. I’ve used the strategy myself and I have to say it’s really worked for me.

Main Points

(4:10) Gabriele gives her story. She came from the field of behavioral biology, but later switched to psychology because she was interested in the concept of hope. She was interested in how people could keep going when they inherited difficult circumstances. She studied how people’s expectations determine their success. She found that when people had successful experiences in the past, they were often successful in achieving goals. She also found that people who had positive fantasies and daydreams not based on successful past experiences often did not achieve their goals.

(6:35) Gabriele defines expectations as judgements of how likely something will happen in the future, based on past experience. For example, she says a business owner with many years of past success will likely be successful in the future. However if a business owner has positive fantasies and daydreams about the business doing well despite having a poor past performance, the business probably will not do well in the future. Gabriele gives another example of a smoker imagining that he can reject a cigarette. If he hasn’t had good experiences trying in the past, he probably will fail. 

(8:35) Gabriele says that the general consensus around the world is that “positive thinking is positive” and that positive thinking will lead to more effort and more motivation. However her studies show that the more positively people think about the future the less well they do. The more positively people in weight loss programs fantasize about their success the fewer pounds they lose, while the people who permitted negative thoughts in their minds lose more weight. She said that tests on university students show that the students who fantasize the most positively about their job prospects are the least successful at getting employment when they graduate. This is due to them often studying less and sending out fewer job applications. 

(11:15) Gabriele says her research shows that the more people fantasize about having a relationship with someone they have a crush on the less likely they are to have one. Her research also shows that hip replacement patients who imagine their recovery to be the quickest are less successful in recovering than people with more moderate expectations. 

(13:20) Gabriele says that fantasies and daydreams hinder success because they cause people to expend less effort to reach their goals. She says her research also shows that the moods of people with positive fantasies and daydreams are worse in the long run than people with less fantasies and daydreams. The daydreamers’ moods were great initially, but in the long run they felt worse because their dreams did not come true. She says the problem is that positive fantasies and daydreams cause people to feel almost as if they have accomplished their ambitions. This takes away their energy.

(16:20) Gabriele says that the positive fantasies and daydreams are still important because they stem from people’s needs. They remind us of the voids in our lives we need to fill and give us motivation. If you are in a job you don’t like you start fantasizing about having a different job. If you are in a bad relationship you start fantasizing about being in a different situation. After you know what a problem is, then you can start to find a solution and go in a new direction. 

(19:10) Gabriele says the way to energize people so they can accomplish goals is to encourage people to identify the obstacles that hinder their ambitions. First this demonstrates to people they are not yet where they want to be. Then it helps them make a plan of action to get there. She calls this mental contrasting. 

(21:42) Gabriele says that imagining the obstacles that stand in the way of accomplishing goals triggers non-concious processes in the brain that cause behavior change. 

(22:10) Noah asks Gabriele’s opinion of when people say their belief in God helps them to reach their goals. Gabriele says in desperate circumstances where the obstacle in front of people seems insurmountable or is impossible to identify then thoughts and daydreams might be more useful than mental contrasting, because it at least they can provide hope. But she says in cultures and circumstances in which people have freedom and the ability to chart their own paths mental contrasting is the best option to succeed as well as decide which goals are most sensible to go after.

(26:50) Gabriele explains WOOP, a framework used to assist people with implementing mental contrasting. WOOP stands for Wish, Outcome, Obstacle, Plan. The framework helps people formulate ways overcome potential challenges, by utilizing the mindset: “If I meet obstacle (X) then I will do the behavior (Y) in order to overcome it.” The thought process non-consciously makes people behave in a way that enables them to fulfill their wishes. Noah brings up the free WOOP app that assists people with mental contrasting, which he has used many times to accomplish his goals. 

(29:15) Gabriele suggests that people go to the www.woopmylife.org to learn about mental contrasting before using the phone app. Noah says that he will do a demonstration of the WOOP app, assisted by Gabriele, in a video on the Today’s Machining World website (to be released shortly).

Question: Do you usually think about obstacles when you set a goal?

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An Awfully Productive Period

By Lloyd Graff

I am finally taking the time to stretch my neck and shoulders, and particularly my rotator cuff, during my quarantine at home (too many curve balls thrown over the years). I had never taken the time to do it until now.

I believe we will look back in a few years and say what an awful yet productive period we are living through right now. I decided to list things I think we will look back on with fondness about this frightful corona time, and ask you to add to the list.

1. Manufacturing is coming back to the US from China. We are hearing from many of our clients that they are getting scads of prints to look at because China has shown itself to be a self-serving and now unreliable source. Cheaper, yes, but when companies figure in all of the negatives of outsourcing to China, more and more firms want to reduce their reliance.

2. Reliable workers are becoming more available for hire with the unemployment shake-up we are going through. Young people will see the need for ventilators as a symbol of the importance of manufacturing in America, and a shift will take place away from office work.

Assembling a ventilator at Ventec Life Systems

3. A tremendous shift in medicine, education, therapy, religious services, office space usage, and a myriad of other things is taking place overnight. Some of these shifts will revert back, but the rapid change in the way people connect via interactive computer software is the beginning of a huge and permanent shift which will improve accessibility to quality services immensely and reduce costs in money and time. Just consider the time you spend traveling to the doctor’s office when often an interactive computer visit would be just as effective.

4. Families and friends coming together. People are going out of their way to connect these days in Zoom, or by phone, Facebook, or FaceTime. Quarantine has brought a strong desire to reach out to people who are important to us. Separation has brought a yearning to connect much greater than in “normal times,” when we are often complacent about relationships and the tendency is to ignore them.

5. Even the politicians are getting along. Republicans are talking to Democrats, governors are talking to the president and each other, bureaucrats are connecting with other bureaucrats in different departments. The Food and Drug Administration okayed the use of hydroxycoloquin for COVID-19 on anecdotal and preliminary data. Normally it would have taken forever and a day. Pelosi and Trump still can’t stand each other, but they both hold their noses and get vital legislation done. The Fed gets ahead of the markets and props up soft spots before they become crises.

6. Despotic countries like Iran, Venezuela, and Cuba are falling apart for various reasons.

7. Money is finally going into vaccines, which for many years have been an area starved for funds.

8. The country is preparing for the next pandemic or at least a possible next wave of COVID-19. Next time we will have the machines in place to test with a pin prick and blood test in 15 minutes.

9. We are cooking more and getting better quality take out. McCormick Spice Company stock is booming and quality eateries are doing takeout and delivery like never before. A pricey restaurant in Menlo Park, CA that my daughter and her husband go to on special occasions is now doing take out cocktails in mason jars. My local deli has chicken matzo ball soup to go, delivered to my car.

10. GM is making ventilators on two weeks notice. Not Tesla, but GM, that takes 6 months to PPAP a screw is putting together a ventilator with the cooperation of the UAW, made with hundreds of parts in an empty Kokomo, IN plant. Sounds like World War II. Who would have thunk it?

11. Companies all over the country are being recruited to make approved design face shields for people on the front lines of the illness. A company in Columbus, OH took a working design from a local hospital, copied it in their software, quickly got it approved at the local hospital, and bought five new printers to run it 24 hours a day. The printers were delivered by a truck driver who drove all night to get the cargo to them. Now they are making the design available to anybody with 3D printer capacity.

I am not a Pollyanna. You can’t be one and run a business, but the list is impressive. Please add your own observations.

Question: What positives do you see coming out of the COVID-19 war?

 

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Ep. 75 – Using Blockchain in Manufacturing with Jim Regenor

By Noah Graff

Today’s guest on the podcast is Jim Regenor, founder of Veritx, a company which helps clients dramatically reduce lead times and increases readiness for military and airline customers with blockchain technology.

Scroll down to listen to the podcast.

With today’s 3-D printing technology parts can be produced on site so clients don’t need to wait for products to be sent by land or sea. All that needs to be sent is the digital information for how to produce the parts on site. Blockchain insures the digital information is correct.

Main Points

(3:30) Jim gives background on his company Veritx which he established in August of 2019. He characterizes the company’s product as “a digital parts catalog for regulated industries that reduces long lead times and increases readiness for military and airline customers.” 

(4:35) Jim talks about a proof of concept with the Department of Defense where blockchain could reduce the lead time for an F-15 part from 265 days down to 6 hours from order to delivery. He says that the United States military still uses some aircraft from as far back as the 1950s, so being able to deliver spare parts efficiently can be difficult when many of the original aerospace suppliers have gone out of business. 

Jim Regenor, founder of Veritx

(8:00) Jim gives his background. He spent 31 years as a pilot in the U.S. Air Force. He was on the Security Council for the Bush and Obama Administrations, and he also ran a large logistics operation, with 15 locations in 11 countries across three continents—many of them war zones. He said he was moving roughly 570,000 tons of cargo and about 2 million people a year, and found himself constantly needing spare parts. 

(9:25) After he got out of the Air Force, Jim ran the military aftermarket division at a Tier 1 aerospace company called Moog Aircraft Group. The company had acquired a 3-D Printing business in Michigan and realized that 3-D printing would become an enabler for digital 4.0 schema and how industries would interact. This led him to world of blockchain.

(11:00) Jim says that 3-D printing coupled with blockchain enables what he calls the fourth modality of logistics. Instead of transporting physical parts by land or sea, digital information to make the parts is sent on the cloud. Then parts are manufactured on site with 3-D printing. Blockchain enables the information to be sent properly.

(14:10) Jim characterizes blockchain as a distributed ledger. He gives an example of several people in a room in which one person owes another person 10 dollars. Every person records that 10 dollars is owed in their ledgers. If the person who owes money tries to lie and says he only owes 9 dollars, the people in the room have records to prove he lying. This concept means that information can be sent through a decentralized transparent system and cannot be corrupted. All records are transparent so that there is a consensus. For blockchain applications, sometimes hundreds or thousands of computers keep the ledger. This can be used to establish value for cryptocurrencies such as Bitcoin, but it can also work well for other applications such as logistics because it enables people to track the entire lineage of an asset.

(17:20) Jim gives an example of Walmart using blockchain to track the supply chain of its lettuce from harvest to store shelves to combat the E. coli problem last year.

(19:00) Jim says that many companies are using blockchain right now and data can be tracked with user interfaces. He says for the supply chain for aerospace blockchain records the entire process, starting with the initial requirements being sent to a designer. Then each stage such as the design of a part, manufacturing, quality control, etc. is recorded individually. Everything is transparent and correct, insuring a good final product. If people realize there is a design flaw, it is easy to go back and find the mistake because each stage has been recorded with blockchain. 

For more information about Veritx go to veritx.co or email Jim Regenor at jim@veritx.co.

Question: What’s your experience using blockchain?

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Chapped Hands

By Lloyd Graff

My hands are wickedly chapped from washing them so often. So far, they are my biggest casualty of COVID-19. Does anybody out there have a cure–not for the virus, but for my raw palms and fingers?

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Until yesterday I did not know anybody who had contracted this virus. Unfortunately, a friend who is a doctor is now showing all of the symptoms congruent with COVID-19, but with the lag in testing results it is not confirmed. His doctor immediately prescribed hydroxychloroquine (the anti-malaria drug) and the antibiotic azithromycin for him, though the FDA has not approved the treatment.

Because President Trump praised its usage and Dr. Anthony Fauci, his chief medical consultant, cringed on national TV, these drugs have become a political issue.

Unfortunately, doctors are in a medical battlefield right now, without any thoroughly tested prescription remedy for this virus with so little history. Other than the pneumonia vaccine, which has a delayed effect, the anti-malaria drug and antibiotic is the primary approach currently available to augment a person’s natural immunity. To a layman, it seems absurd to argue over a treatment with a decent chance of working based on anecdotal evidence from France and New York City, and with few downsides.

Personally I think Rachel Maddow of MSNBC, who ridiculed the drug regimen because Trump touted it, would grab it if she came down with the virus.

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Lloyd’s chapped hands

Like so many people, I have self-quarantined for almost 2 weeks. Our machinery business is in hibernation for now. Our shop employees are on temporary furlough, while the office folks work from home.

A surprisingly large number of our clients are working, though automotive is dead for the moment. Truck and Ag equipment is deemed critical as are medical and military. Guns and ammo, a significant part of the turned parts world, are selling like gangbusters.

It is fascinating to watch the improvisation of entrepreneurs as their normal business shrinks. Restaurants have switched to takeout and delivery. Bartenders are repackaging fancy cocktails in Mason jars for takeout. My wife’s educational therapy practice has moved online, using Zoom with great success, and medicine is quickly becoming “telemedicine” with patients afraid to visit offices.

General Motors and Ford have been asked to quickly shift into making respirators. I understand a firm in California, which is already running at full capacity, has given GM its prints so they can take advantage of its massive supplier base to get up and running quickly.

A client of mine has offered to machine a respirator part on a 5-axis twin turret lathe that is currently made from a casting. The castings are not available so they would make it from an aluminum blank. They won’t make money on it, but it will fulfill a critical need for the country. It’s what we do in America.

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If I listen to a lot of cable news I get depressed, so I am limiting my intake. I vacillate between thinking COVID-19 is a world catastrophe of the first magnitude or a compressed influenza epidemic that we may be overreacting to. The flu kills 20 to 50,000 people every year in the United States. The bad thing about COVID-19 is its rapid spread without a vaccine. Unfortunately, New York City and Milan are being overwhelmed like Wuhan was in China.

But it is not the Black Plague that wiped out half of Europe’s population in the Middle Ages.

Will we be back to work by Easter like President Trump predicts? I doubt it. But I do think I will get to root for the Chicago Cubs yet this season.

Questions:

How do you cure chapped hands?

What is your business doing during the pandemic?

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Ep. 74 – Getting Young People Into Manufacturing with Terry Iverson

By Noah Graff

Our guest on today’s show is Terry Iverson, co-owner of Iverson and Company and author of a new book called Finding America’s Greatest Champion: Building Prosperity Through Manufacturing, Mentoring and the Awesome Responsibility of Parenting.

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Terry and his family have been in the machine tool and production business for almost 100 years, specializing in Hardinge equipment. In writing this book, Terry draws upon his vast network of professionals in a variety of businesses to understand how mentorship and apprenticeship can rebuild American manufacturing. 

Main Points

(4:00) Terry says his book’s main message is that with better mentoring and parenting the United States could fix its problem of the skills gap in manufacturing.

(5:15) Terry talks about the origins of his family’s machinery business. In 1925, his grandfather went to work at Hardinge. He started sweeping floors, but soon climbed the ladder in the business because of his engineering acumen. He started his own business in 1931 selling and rebuilding Hardinge machines. Terry’s father joined the business, and his uncles started their own production shop. After spending six years getting his mechanical engineering degree, Terry joined the business about 40 years ago, though he was reluctant at first.

(9:25) Terry says he sees his book as a way to give back to the industry that has been so good to him and his family. He says over the span of his career his clients have told him more and more that they can’t find enough skilled people. He hopes that his book helps to change the culture of education in the United States from one that only encourages expensive 4-year colleges that result in horrible student debt. Terry says he credits his own success in life to having lots of great mentors such as teachers, coaches, and family friends.

Terry Iverson, author of Finding America’s Greatest Champion: Building Prosperity Through Manufacturing, Mentoring and the Awesome Responsibility of Parenting

(11:15) Terry says mentors are valuable because they can use their experience to guide young people, to help them find the best ways to succeed. He says that while there is nothing wrong with college, it is a pity that young people are not also exposed to manufacturing trades. He says that more mentors and parents who are aware of potentially fulfilling and lucrative careers in manufacturing can help change this trend. Terry says that the manufacturing industry in the United States hasn’t advocated enough for itself, whereas in many European countries manufacturing jobs are highly regarded by society. Terry sites a stat that if the U.S. manufacturing economy was ranked among manufacturing economies of other countries it would be ranked 8th in size. 

(18:20) Terry says that apprenticeship programs in the United States began disappearing in the late 1980s, but today he is starting to see a comeback. He says part of the reason the apprenticeship programs disappeared was that U.S. companies were thinking only of the short-term bottom line, in contrast to European companies that take a more long-term business strategy. He says in Germany manufacturing companies typically have 10 percent of their workforce as apprentices, meaning a company of 200 workers would have 20 apprentices, etc. He says the German American Chamber of Commerce is working hard to bring back the trend of apprenticeship programs.

(21:30) Terry says he hopes that as the manufacturing industry becomes more computerized and automated, that computer savvy young people will be attracted to it. 

(24:40) Terry says that young people in Europe know what they are passionate about in their teens. He feels that more internships and programs that expose American young people to a variety of careers could help build a skilled workforce in manufacturing, as well as other fields in the United States. 

(29:00) Terry talks about a 17-year-old intern he had at his own business who was interested in engineering. She had an idea for a device that tested for concussion protocol. Terry contacted a friend from high school who was a biomedical engineer who helped her get a pending patent. She went on study engineering at the University of Illinois.

(31:20) Terry says to go to Championnow.org for information to buy his book. He is offering a special discount to listeners of Swarfcast.

Question: What made you choose a career in manufacturing?

 

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To Work or To Quarantine?

One of the more perplexing and upsetting things about the barrage of news about the coronavirus is the fact that its primary danger is to older, compromised people. 

I’ve always associated that with other people, but the objective fact is that, statistically, I and now my wife, Risa, are members of that group. Fortunately I don’t feel old or physically compromised. I am still playing in a young man’s game, the used machinery business, and blog writing, and I think I can compete with all comers on both fronts.

The dilemma is “how do I play it” now and when the current scare is over. My children admonish me that I must be ultra cautious because I am a heart patient who barely survived a heart attack, and several cardiovascular blockages that should have killed me eleven and a half years ago. Four bypasses, valve repair, luck, and maybe God, saved me. But now I live a normal life, exercise, work a lot, and still remember the middle name of my mother. But does that still mean that I have to act impaired when I don’t feel impaired?

Yet I am also scared enough by the virus to be self-quarantining for a couple weeks because they say I am highly vulnerable. I am a member of the old and sickly 10% of the population. 

Lloyd on quarantine at home

I was feeling pretty good about myself. I was getting cocky, complacent, and aching to get back to work at the plant, when I wrote the first draft of this blog. I knew I could keep my distance and protect myself.

Then I read about Northern Italy in the Wall Street Journal. 

I know people in Milan and Bergamo. My brother-in-law, Maury, was born in Genoa. I know the Tajariol family that owns ZPS Machine Tools quite well. They are my age.

Their world, and it is a beautiful place, is in chaos because of the coronavirus.  Hospitals are completely overwhelmed. Hundreds of human beings like me are dying everyday — alone — because people are not allowed to be with them for fear of spreading the plague faster. 

It is estimated that 60% of the Italian population has been infected. There is a real possibility of tens of thousands of people dying in Italy. 

It is a terrifying reality, and it cracked my bubble of cockiness about myself and America when I read it.

China is beating the virus back now. Korea is too. Civil liberties and privacy are being abused by the government to snoop on people to guarantee separation and quarantine, but in this case it seems necessary.

In America we are depending more on individuals using common sense and tending to themselves for the greater good.

I am going to do my part. See you on the “other side.”

Question: Are you working or quarantining?

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Ep. 73 Assessing Your Machine’s Performance with Eric Fogg

By Noah Graff

Our guest on today’s show is Eric Fogg, co-founder and head of machine connectivity at MachineMetrics. MachineMetrics produces a device that connects directly with machine tool PLCs and controls to track realtime and historical data on equipment. Operators use the data to assess how machines are truly performing, which is often quite different from what they perceive.

Scroll down to listen to the podcast.

Main Points

(3:10) Eric explains that MachineMetrics is a machine data connectivity data platform. The company makes a device (he calls an “edge device”) that connects directly to machine controls and sensors of production equipment. The device gathers valuable data on how the machines are performing and sends it to operators to analyze.

(4:10) Eric talks about taking machine shop classes in high school. During high school he worked at a lot of different machine shops on nights and weekends and taught himself programming.

(7:00) Eric says that MachineMetrics can gather data from all vintages of machine tools, not just CNC machines, though CNC machines provide the most data. He says right now MachineMetrics has a client using its edge device to gather data from a punch press that was manufactured in 1925. He says, “As long as it moves and has electrons flowing through it we can probably get some useful data out of it.”

(10:00) Eric says that in college he majored in theology because he wanted to work in the field of corporate ethics. Eventually he started his own machine shop in his mid 20s that specialized in green technology products.

Eric Fogg of MachineMetrics

(14:00) Eric says that when the 2008 recession hit he started doing more job shop type work with low margins. He eventually closed his company started doing Six Sigma consulting for job shops in Vermont. The experience of analyzing the processes of different shops inspired the idea for MachineMetrics. He says he observed that shops were often making decisions based on a gut feeling rather than based on data. He came up with the idea to pull the data that already was on the machines’ controls to create reports, dashboards and analytics to help machining companies make decisions.

(20:25) Eric says the most basic data MachineMetrics tracks is machine utilization—how much machines are running versus how much people think they are running. He says the average perceived utilization of equipment by MachineMetrics’ customers is just under 80%. The actual average is in the high 20 percents to low 30 percents (the numbers are based on active shifts). He says that the numbers can be surprising as various markets differ. For instance, he says for some types of very low volume work (1 or 2 part runs) 15% utilization might be considered world class. He says for high volume shops utilization is often much higher. For instance, he says shops making millions of parts with much thinner margins sometimes have utilization in the 90 percents. He says that no matter what type of shop, clients are usually surprised at their utilization rates.

(24:10) Eric gives some examples of how MachineMetrics data uncovered problems that led to low machine utilization. He gives an example of a client who was using cheap 1/4” drill bits on a drill and tapping center. The company calculated it took only 5 minutes to change a drill bit out, so they used cheaper ones with short tool life. The problem was that while operators left to get a new drill bit from the tool crib they got sidetracked and the average time to change the drill bit was actually over 40 minutes. After learning this the owner of the company decided to go out and buy the most expensive drill bit that lasted 10 times longer than those he was using. It was a solution that was much faster and easier to implement then changing the procedure in the shop which could have tons of variables to consider.

(27:40) Eric says that MachineMetrics generally does not advise customers how to use the data they collect. He has found that customers usually take the initiative to solve their problems. He says his company is often surprised at the interesting ways that clients utilize the data.

(30:15) Eric discusses a phenomenon he sees in CNC shops he calls “cyclecreep.” What happens is that over time people gradually alter they way they run jobs by making tweaks such as changing tools or feed rates which often increases cycle time. The problem is that the manufacturer continues to bill its customer for the original cycle time. Operators see green lights on machines which makes them think everything is running fine but problems are occurring behind the scenes.

(35:30) Eric gives an example of a company running the same parts on 20 vertical machining centers that were bought over 10 years. MachineMetrics found that no two machines had the same original cycle time of 40 minutes. He says that some cycle times only differed a few seconds but the delta between fastest machine and the slowest machine was 15 minutes. After seeing this data, in just a week the company was able to adjust the machines to all have a cycle time within a few seconds of each other.

(37:25) Eric says it can be difficult for his clients because often MachineMetrics is delivering them bad news. He says that the consistent trend he sees is that the most successful shops have a culture around change.

Question: Are the effects of the coronavirus a net plus or a net minus for your machining business?

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Slam Dunk in Atlanta

By Lloyd Graff

The Precision Machined Products Association (PMPA) held its annual Management Update over the weekend in Atlanta (also site of this year’s NCAA Basketball Final 4).  Around the world, conferences, exhibitions, Broadway shows, and basketball games have all been canceled, but not the PMPA Management Update.  One hundred and seventy people signed up, and everybody showed up except me because my wife’s recuperation from heart surgery kept me at home.

This was a true testimonial that the members of this group find this meeting worthwhile and are anxious to attend no matter hell or high virus.

Why do people care so much?  The program is usually quite worthwhile.  Brian Beaulieu, the economy prediction guru who has spoken numerous times, was on the ticket. He again told the group that the next two years will be good ones for turned parts contractors, and that the decade was shaping up favorably. He said he is not concerned about who wins the presidency, but more concerned about the composition of Congress.

Other speakers were professional and informative, according to my son Noah, who attended.  But I think the magnet that brings people from across the country is the desire to connect with peers who live the same fights in the same trenches.  People develop friendships at these events.  They have compatriots to share a problem or a tool or a piece that just broke in their Davenport chip conveyor.  This camaraderie is rare in business today.  It defies region, ethnicity, or size of bankroll.

Another professional group I belong to has gradually lost this quality. The PMPA has gone through a quorum of weak professional leaders in the last several years, but the openness and commitment of its members continues to make it quite a unique professional group that truly gives back to its members.

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The stock market is plummeting.  The coronavirus is everywhere (on the news). As I write this blog on Monday, March 9, there are 600 verified cases in the U.S., and Biden and Sanders are slugging it out in Flint and Dearborn.

I need a rest. The rest of this blog is about college basketball.

Obi Toppin of the University of Dayton in Ohio

At the moment, Gonzaga, Dayton, and San Diego State look like No. 1 seeds in the NCAA Tournament based on their records and national ranking. No Duke, Kentucky, North Carolina, or Michigan State, the usual candidates with the multimillionaire coaches. Other than Kansas, top ranked for now under Bill Self, it is all ragamuffins who have never won anything. Depending on your orientation this is either a great thing for fans or a catastrophe for TV ratings.

With the top players going pro after their freshman year or just skipping college to play in Australia or Samoa, the college game is starting to be a place for teams rather than stars vying for draft status.

Dayton’s top player is Obi Toppin. Four stars to you if you’ve ever heard of him.  Malachi Flynn leads San Diego State, which has not had a player of note since Kawhi Leonard a decade ago. Gonzaga has a famous coach, Mark Few, who puts together an international gathering of ambitious young guys every year and flies around the country looking for competition.

Another team to watch is Baylor, which was undefeated for most of the season. Baylor’s athletics department is known for women’s basketball and sex scandals. Baylor’s men’s basketball team is coached by Scott Drew, who previously coached for Valparaiso.  He was hired in 2003, to replace Dave Bliss who resigned due to scandal, because Scott was considered about as clean a college basketball coach around. This year, Baylor put together quite a good team of mediocre players who hustle their butts off.

Enjoy the tournament this year, which will also be in Atlanta.  It will actually be about basketball, not draft picks for the NBA.  Hopefully it will be watched by live fans.

Questions:

Are you scared about the machining business because of the coronavirus?

Should the PMPA have canceled its conference?

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Ep. 72 – Coronavirus and the Supply Chain with Daniel Hearsch

By Noah Graff

On today’s podcast we’re delving into a topic that’s been on many people’s minds these days, the coronavirus.

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Our guest is automotive supply chain expert Dan Hearsch, Managing Director at AlixPartners. Dan is briefed daily by his associates in China about how people in manufacturing are dealing with the coronavirus. FYI, this interview was conducted one week ago on Feb. 26, 2020.

Main Points

(2:55) Dan gives his background working in the automotive industry for OEMs, as well as Tier 1 and Tier 2 suppliers. Today he is a consultant, focusing on supply chain and procurement projects.

(3:55) Dan says many people have been comparing the coronavirus, also known as Covid-19, to SARS, the last serious epidemic in Asia back in 2003. He says the big difference between the SARS outbreak and the current one is that in 2003, China was roughly only 4% of global GDP, while today China has a much more significant role in the global supply chain and its own internal economy is much larger than it was 17 years ago.

(5:30) Dan says one of the hardest things about the coronavirus outbreak is knowing what the local response is going to be. He says that it seems like the quarantine policies in China, Korea, and Italy are the correct response.

(6:00) Dan says he’s briefed daily on the latest news in China from his associates in there. The news is based on what they are seeing from the Chinese government and what they are seeing in real time from the companies with whom they work.

Daniel Hearsch of AlixPartners

(6:55) Dan says he hears there is a decreased incidence of new coronavirus cases and the death numbers seems to be falling, which makes people hopeful that business will get better soon. He says the worst thing to do is to send people back to work too soon because they could get sick again and the quarantine process would have to start over.

(7:40) Dan says the Chinese New Year amplified the spread of the coronavirus because of all the people traveling back to their homes in the countryside. However, he said that from a business standpoint the Chinese New Year was helpful because people who buy goods from China were already planning for an eight day shut down. People had planned to have extra material already in transit on the water, but had not planned for further delays.

(9:40) Dan says the majority of factories in China that were down have opened up again. He sites a Chinese government survey of 982 enterprises that said 41% had resumed by February 14 and predicts over 80% should be back up and running this month. He says the biggest problems relate to transportation and workforce issues because a significant number of people are quarantined or have trouble traveling. His sources say that Chinese manufacturers in the survey are running at only 30-40% of their potential productivity. The Chinese government is comparing the current electricity usage in various industrial areas to past years to gage productivity. It found that the level of usage was about 57% that it was at this same time of year in 2018 and 2019.

(12:15) Dan says that the automotive sector has a very lean supply chain, meaning companies hold very little safety stock, which makes it vulnerable to the decrease in supplier productivity.

(16:40) Dan says that some North American manufacturing companies are going shorten their supply chains as China, Korea, and Italy can’t supply enough parts. He says this trend would lend itself to machining processes that are fast to set up. He says capacity shouldn’t be a big problem because the domestic automotive market has been down of late.

(18:50) Dan says China has both a supply and a demand problem because many of the domestic customers who buy parts are also closed. This differs from the United States that only has a supply problem because companies are still purchasing goods and consumers are still buying.

(20:40) Dan says that many of the large scale supply chain problems caused by the coronavirus are not new. He draws a comparison to the aftermath of the Fukushima nuclear power plant disaster in 2011, which exposed the problems that occur when companies have too many suppliers concentrated in one region and do not have enough relationships with backup suppliers.

(23:45) Noah asks if the pharmaceutical supply chain in China has similar issues as automotive. Dan says the problems are probably similar. He says the transportation issues could be significant as suppliers try to catch up on a backlog of shipments, though he predicts the production processes might not be as labor intensive as those of automotive.

(27:45) Dan says that the coronavirus is a common type of virus—the same type of virus as the common cold. He says the Covid-19 epidemic is quite contagious and has a high fatality rate of 2.5-3% compared to .05% for typical flu. He says limiting personal contact with other people and washing hands regularly is the best practice to protect oneself against the virus. He says that a lot of people make mistakes such as wearing the wrong type of protective masks and wearing a mask more than one time.

(31:20) Dan says if the United States has an outbreak the impact on its economy shouldn’t be as dramatic as China’s. A higher percentage of people have the ability to work remotely while quarantined because a smaller percentage work in factories. Still, he admits an outbreak will still significantly affect the domestic supply chain.

(33:30) Dan says out of China’s study of 982 surveyed Chinese companies 42% of those enterprises will run out of cash in the next three months and 10% will run out of cash in one month because they can’t cover their fixed costs. He says it is likely the Chinese government will act as a safety net, though he is not familiar with the bankruptcy laws there.

(36:40) Dan says the best case scenario is that the most problematic countries get the Covid-19 epidemic under control and it doesn’t become a global pandemic. He says it is possible that in 4 to 5 months most suppliers will be back up to speed in the problematic countries.

(38:25) Dan says the precautionary health measures by governments seem to be the correct plan to deal with the coronavirus epidemic. He says saving people’s lives is more important than keeping factories running, not just for humanitarian reasons, but also for long-term business success.

(39:30) Dan says it is vital for manufacturers to set up alternate suppliers as soon as possible to prepare for a pandemic or other supply chain setbacks.

Question: Have you noticed supply chain interruptions due to the coronavirus affecting your business?

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