Best of Swarfcast – Ep. 85 – Kaizen Principles for Personal Growth with Darrell Sutherland

June 24, 2021 Comments Off

By Noah Graff

Note: The Swarfcast team is enjoying a short summer break this weekend. We’ll be back next week with a fresh blog. In the meantime, enjoy this great episode from 2020 on incorporating Kaizen principals into your daily life, with guest Darrell Sutherland.

Today’s guest on the podcast is Darrell Sutherland, founder and owner of Dylan Aerospace in Auburn, Washington, a Tier 1 supplier for Boeing.

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

Darrell is also a professional mentor. He believes in using the Kaizen manufacturing principles for personal development as well as to improve a business. He believes in the power of mentorship so fervently that he spends over $100,000 a year on his own education.

Main Points

(3:40) Darrell talks about his personal transformation in the last decade or so. He says that for many years it was hard for him to just get out of bed because he wasn’t happy with his life, despite his success and running a business he loved.

(4:15) Darrell says growing up he looked awkward and was bullied a lot but thinks his difficult childhood prepared him for adversity later in life. He says when he was young he got into martial arts, which made him realize his passion for learning and more importantly teaching. He says he has a talent for deconstructing ideas and concepts and synthesizing them into individuals’ unique abilities.

(5:40) Darrell grew up in Washington state. His grandfather and father worked for Boeing. His father told him to never be a “number” working for Boeing.

(8:00) Darrell says his manufacturing business had been very successful and made a lot of money for a long time before he underwent his personal transformation. He was even able to take more than 10 years off from day to day operations so he would have a lot of time to raise his kids. Yet he still wasn’t content with his life as he was addicted to food and alcohol, gaining over 100 pounds. He says November of 2009 he realized that he needed to change direction, starting with his health. Darrell says it took him many years and thousands of dollars to get the guidance he needed to fix his life.

(11:00) Darrell in the end realized that the Kaizen principles he had embraced in his manufacturing business could be applied to his own personal life. Darrell summarizes the Kaizen principles as deciding what one wants to accomplish and then analyzing and breaking it down to its root. Then a person starts making small incremental changes at the lowest level he can, and then analyzes the result at that low level. The process makes a person more aware of certain facts about his own life that he hadn’t looked at before. Then when a person can understand the roots of what the real issues are, he can understand the challenges he needs to overcome. Darrell calls his philosophy “living Kaizen,” and in his new book he writes about its parallels with the Toyota Kaizen model.

(14:30) Darrell says that reshoring of manufacturing is happening quickly and we as a country need to be prepared for it. He says despite Covid-19 this is probably one of the greatest times to be in manufacturing. He says that the pandemic demonstrated to everyone that the offshoring of U.S. manufacturing during the last few decades put the United States in a terrible position in the areas of infrastructure and national security.

(15:40) Darrell says before Covid-19 he was already planning for 2020 to be a big year for his company. He says that several years ago his company started an initiative called I Love MFG. MFG stands for “Moving, Feeding, and Guarding” America and the world.

(16:55) Darrell says that young people have no connection to manufacturing. He says they don’t think about their consumer items or modes transportation that are created through manufacturing. He says with reshoring upon us he is going to devote himself to opening young people’s minds to manufacturing.

(19:30) Darrell says that people often “stumble” into the world of manufacturing rather than set out to make it their trade. He says the question we need to ask is, how do we turn people into professional manufacturing people? He says we need to analyze how people are hardwired from birth and softwired by their community and then find the lane for them in the manufacturing space. He says he interviews his employees of all levels to help them figure out their talents and find the best way they can excel at his company.

(24:30) Darrell talks about how to find mentors and why they are so important. He says mentors are important to help us to find our weaknesses so we can fix them but to find the right mentor a person has to figure out what he wants. Darrell says to look on social media for mastermind groups to locate mentors, but he warns to watch out for life coaches who haven’t already achieved anything in their lives.

Darrell says for more information about Living Kaizen people can go to his Website, darrellasutherland.com and lifeapprentaceship.com where he will be giving away a free PDF with an introduction to his program.

Question: Which self-help books have benefited you in the past?

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Davenport Dinosaurs

June 23, 2021 • 14 Replies

By Lloyd Graff

Is it really possible that the “thing,” the loud, relay operated, cam directed monstrosity called by the name of a sofa, is on the comeback trail?

Is it possible that the “thing” named for a little burg in Connecticut that chews up brass like it’s a kosher hot dog, still has a following?

Could it be possible that the stodgiest of plodding metal dinosaurs that uses so many cams for one job that it requires voluminous shelves to categorize them, still has a fan club?

Folks, it may just be possible in this weird, finally unmasked, industrial moment, that the multi-spindle automatic screw machines, known by archaic names like Davenport, New Britain, Acme-Gridley, and Wickman are making one of the oddest comebacks since cauliflower became a “hot” vegetable.

William Simeon Davenport started the Davenport Machine Tool Company in 1894 to produce clock pinion turning machines, and then progressed into building the Davenport multi-spindle turning machines, which he patented in 1902. In his words, the development of a machine is a growth process: “My first machine had about 350 parts. Improvements and simplification added the other 1,500. A machine grows out of a crude infancy like a boy into manhood.”

It was also said that old Mr. Davenport could make anything but money, but his student, an ambitious mechanic named Earl Brinkman, who began working at Davenport in 1925, turned it into a money-making machine as he became the leader of the firm.

A Davenport dinosaur, headed to a customer

My father, Leonard Graff, met Brinkman when he was first starting out in business. He regaled me with Brinkman stories when I was a kid. He connected with Earl when he was taking a train to Chicago on his way to Milwaukee to see his father during World War II. My dad convinced him to come to his shop on a Sunday and introduced him to a farm boy turned mechanic named Paul Carlson, who had recently gone to work for my father’s nascent screw machine shop, which had six Davenports then.

Brinkman coached Paul for several hours and told my dad that he was gifted, and that he could place him at any shop in America. Paul soon ran the shop and stayed with my dad for 30 years.

When Graff Pinkert moved into our new warehouse in Oak Forest in 1975, we had a celebration and Brinkman came back to speak as a featured guest. And now in 2021, that ancient machine, not much changed from the original design of Mr. Davenport and upgraded to the Model B version by Brinkman in the 1940s, is still productive, and still amazingly successful at whacking out 1/4″ and 1/2″ parts, tapped and deburred, 10 times faster than a Citizen or Star.

Today that awkward 5-spindle, ridiculous looking, 3,000 pound erector set is in demand to make fittings and car parts in Nashville, Shanghai, and Bangalore. They’re stupid noisy, so many people shroud them with fancy Noise Tamers, which cost more than the dinosaurs themselves. Some of the true aficionados like to run them without the Tamers so they can tune themselves into the machine’s rock and roll.

The Davenport. Is it an amazing screw machine or a dumb couch? The New Britain is named for a sleepy Connecticut town. The Acme-Gridley was invented by George Gridley, who studied stenography in his spare time while he invented his brilliant but clunky multi-spindle warrior that helped win two World Wars.

These loud tyrannosauruses still bang out parts by the multimillions each month. To my amazement, after spending a lifetime listening to their Timkens, they are making another comeback.

When everybody believes an idea is dead, it may well be the time to buy.

Question: What is the oldest machine you use in your shop?

Ep. 124 – Valuing Employees, with Scott Eighmy

June 17, 2021 Comments Off

By Noah Graff

Today’s show is the first episode in our new season about hiring and retaining good employees in machining companies.

Our guest is Scott Eighmy, co-owner and CEO of American Turned Products, a medium-sized precision machining company in Erie, Pennsylvania. Scott says his company is struggling like many manufacturing businesses right now to hire new good employees, so he needs to get the most out of the people he already has. He says small acts of recognition and making employees feel heard is key to maintaining a happy and productive workforce.

Scroll down to listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts, Spotify, or your favorite app.

Key Takeaways From the Interview

Background of American Turned Products

American Turned Products (ATP) employs a little under 100 people. It serves a variety of industries such as automotive, appliance, military, and hydraulics, primarily focusing on high volumes—jobs with quantities of hundreds of thousands or millions of parts. To produce the large quantities of precision turned parts the company has many EPIC CNC Hydromats and INDEX CNC multi-spindles.

The the city of Erie and its surrounding areas supply ATP with a population of around 250,000 as a source for employees. Erie has a long history of heavy industry, its educational system is solid, and the cost of living is relatively low. A person can purchase a nice house there for $120,000.

Wages at ATP range from $12 per hour for new workers to $24+ on the higher end. Most of the hourly workers at the company start at the bottom and are trained in-house.

Today’s Difficult Labor Market

Scott says the current tight labor market has been challenging for ATP. He says the precision machining business is hot right now, but potential workers don’t have enough incentive to get jobs while they can still receive the generous unemployment benefits brought about by the COVID-19 crisis. Scott says he hopes Pennsylvania will soon stop taking the government subsidies that fund the special unemployment benefits, as several other states have recently done.

In typical times, ATP finds new employees by using temp agencies, but right now there are no temps available. The company also tries to find new employees using social media such as Facebook and LinkedIn, but that has also not yielded great results.

Culture of Employee Engagement

Scott says the millennial employees at ATP often ask why they have to do certain things, rather than simply accepting orders. The company tries to show them respect by allowing employees to ask questions in meetings and giving them straight answers. For instance, if management asks employees to prepare equipment to be sold, sometimes people ask why the company is selling it. Then managers do their best to explain why the change is necessary.

ATP wants its hourly employees to understand the purpose of their work, so the company often sends them to visit customers. Also, when customers come to visit the company, shop employees give them the tour, rather than the managers. Scott says, “The more employees understand what is important to the customer, the better the product the customer receives.”

Making Employees Feel Valued

Scott says ATP’s management philosophy is to show its people it respects and values them. It’s not uncommon for the company to have small celebrations, like a pizza party for a team that succeeds in setting up a challenging part.

He also says the company demonstrates how much it cares about its people by constantly emphasizing the importance of safety. Management has daily meetings with employees on every shift, and the first topic they go over are safety issues in the plant. In addition to preventing accidents, Scott says it demonstrates to employees that the company cares about their wellbeing.

He says if you demonstrate to people that you care and show optimism, people will be loyal and do good work.

Question: Do people at your company communicate well?

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Our Hiring Mess

June 16, 2021 • 8 Replies

By Lloyd Graff

A good client of mine is trying to buy a company to get the employees. The firm is not making money, but he is so desperate to hire workers near his main operation in Ohio that he is willing to overlook the financials because he believes acquiring the firm will enable him to bring in his own lucrative work to make the transaction pay.

How did the machining world get into this pickle? It is not new, but rarely has it been this acute.

I have studied it as a participant in the industry with skilled and semi-skilled employees, and as an observer. I am curious if you agree with my opinion and observations.

The industry has grown up over the last 100 plus years in America, first under the leadership of people with Western European ancestry. Then it evolved over time to include a lot of Eastern European ethnicities. These owners and managers have tended to attract employees with similar backgrounds. Some companies became almost like small tribes and families through the years, reflecting their ownership. They often were passed down from generation to generation, and fathers, sons, and cousins often took on similar jobs over decades.

Unique skills developed. The best companies tended to prosper and go on for generations. It was an effective system as long as enough workers, primarily male, landed in the industry.

The financial system, often local banks, provided capital for growth. American businesses liked doing business with folks who looked like their managers, and it became increasingly useful to work with the small and medium-sized businesses, which provided very palpable skills and economically convenient pricing. Then one day, Big Business decided price was everything and started to send work out of America, primarily to Asia.

Everything started to get more complicated for American machining firms. Immigration of Europeans to the US slowed dramatically. College education became more available with loan programs. It also became more desirable with great numbers of white collar jobs available and diminishing opportunities in machining as Big Business increasingly looked to China for cheaper pricing. The US government encouraged offshoring during the Nixon-Kissinger days to develop a counterforce to a bellicose Russia.

China became a highly valued trading partner for the United States. Machining businesses continued to bump along, protected by defense and aerospace spending and the ingenuity of generational firms, which still had funding from domestic lenders.

Eventually recessions, merging companies, and lack of capital devoted to training and recruiting sapped the traditional family businesses. Wages were not raised enough to bring in the numbers of young people needed to keep businesses healthy long-term. Hispanic males gradually replaced the European tribes to some degree in larger cities.

One thing that stands out is the small number of women attracted to work on the factory floor. Machining does not appear to excite women as a career, though there is no premium on physical strength in today’s machining environment.

The field also seems to have little appeal in the African American community, male or female. The machining industry and the tribes within it are not reaching out to them, and when they have in the past the reception has been tepid.

Another major factor is the rise of Amazon, Costco, and other major firms, which have raised their wage structure and provide health insurance benefits. They have effectively changed the traditional minimum wage and made it obsolete. They have also eliminated the rationale for Unions, which we saw in the recent Birmingham election. Only in government situations, where the opponent has little incentive to fight them, have Unions managed to thrive.

Graff Pinkert customers who can’t hire, moan that clients like Caterpillar allow them no pricing power, yet they buy CNC machines and robots, so they clearly have both capital and pricing power.

If there were no options to hire, we would have no customers, yet we are very busy at Graff Pinkert right now. Machining companies are managing to deal with the people problem.

How are you approaching it today?

Question: How do you usually find new employees?

Opening Up!

June 11, 2021 • 8 Replies

By Noah Graff

Yesterday evening my wife, Stephanie, and I stopped to get gas. As I fueled up, a man named Danny, on the other side of the pumps fueling his own car, struck up a conversation with me. You know that special breed of people who walk into a room, almost always smiling, beaming their positive energy onto everyone? Danny is one of those guys.

He commented to me about the crazy high gas prices in Illinois, currently in the $3.30 per gallon range. I told him about the gas prices in California, where I was last week, which are over $4.00. I was tired after a long day of work, but suddenly I was uplifted. We both commented how nice it was to be chatting with a complete stranger on a sunny summer day without wearing annoying face masks, and without concern about germs or concern that the other person would be afraid of our own germs.

Danny introduced himself and seemed like he was starting to put out his hand. But I extended my elbow and bumped his—now the modern introductory gesture. We laughed about how stupid handshakes really are. I remarked that the custom of bowing in Asia makes so much more sense, and no wonder Italy had had trouble containing the virus in a culture where it’s normal to greet people with multiple kisses on the cheeks!

Noah and Danny Meeting at the Pump

Pre-Covid-19, this would have been a fairly typical interaction for me. I love talking to strangers. I completed a personal goal of meeting at least one new person every day from May 19, 2018, to May 19, 2019. Meeting strangers is something that makes my life interesting and serendipitous. It also makes the world feel less isolated. Two strangers meeting can be like nuclear fusion—their combined energy becomes greater than their sum.

Today Chicago officially “opens up!” Soon after this blog is published, I am closing up the laptop and meeting up with a customer visiting from Japan. I’m taking him to Wrigley Field for the first Cubs home game of the season with seating at full capacity.

Good possibility I’m going to talk to some more strangers.

Questions: Do you like talking to strangers?

Are handshakes stupid? Will you switch to a new type of greeting?

Best of Swarfcast – Ep. 97 – Reducing Machine Setup Time up to 50% with Paul Van Metre

June 10, 2021 Comments Off

By Noah Graff

On today’s show we’re talking about how to set up machine tools efficiently.

Our guest is Paul Van Metre, co-founder of ProShop ERP. ProShop produces a comprehensive web-based and totally paperless shop management system for small to medium manufacturing companies. Paul says that using a few best practices, guided by ProShop’s management system, can reduce a machine setup time up to 50%.

Scroll down to listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts or your favorite app.

Main Points

Paul shares his background. He grew up in New York and studied mechanical engineering in college. He says he found it dry, so he began looking for something more hands on. He found a program in Washington State that was heavily involved in the Formula SAE competition, which he fell in love with. He and his teammates decided to start a machine shop together right out of college. (3:10)

Paul says that for their machine shop’s first three years (in late 1990s) the company used Excel to make its job routers and travelers. As it added more machines, it put a computer next to each one. (5:15)

Paul explains that the idea for his company’s proprietary shop management system came out of desperation and need. As the company grew, introducing more machines and employees, Excel was not keeping up. His team researched shop management software in the old school Thomas Register books. (6:25)

Paul says that none of ERP software firms his company looked at offered products designed specifically for managing the shop floor. The products also required paper printouts, which Paul and his team felt was a step backward from what they were already doing using Excel. Ultimately, they decided to hire a software designer to design a custom ERP system for the company. Paul says it took a little less than a year to develop workable software to handle the company’s needs. (7:35)

Paul says it took about eight years before the company’s ERP software received outside attention. During the economic slowdown in 2008, a production manager from his company’s biggest customer came to the shop to work one day a week. When he tried using the ProShop ERP he liked it so much that he told his own company about it. (10:50)

The customer convinced Paul’s company to let it use ProShop ERP. Paul says that within six months of using the system his customer’s productivity was boosted so much it was able to free up three full time employees, and it drastically decreased its lead-times on various jobs. Then the customer asked if Paul’s company would allow some of its vendors to use ProShop ERP. Paul and his team then realized the opportunity to start a new business selling their ERP, which they founded in 2016. (12:30)

Paul says he misses the joy of the production process of running a machine shop, but he says providing ProShop to help other companies succeed is what he enjoys the most. (15:45)

Paul says that by using a few best practices a shop can save up to 50% of machine setup time. (17:45)

Paul says proper setup process starts when a machine has already been torn down from its previous setup. The teardown should be part of the machine’s previous job’s processes. (18:46)

Paul says the first thing to think about when starting a machine setup is to have all of the materials ready for the job at the machine—tooling, instructions, and rich media such as videos and photos to guide the setup person. This is because if a setup person has to leave the machine to get something that she forgot she can run into a multitude of distractions in the shop which significantly delay getting back to work on a machine.

Paul says one of the worst obstacles in slowing down setup time is when the shop doesn’t even have a necessary tools or materials on site. Then the setup process loses days while the company waits for materials to be shipped in. (23:00)

Paul says it’s very important for a setup person to have detailed work instructions for a job ready (SEE VIDEO BELOW). He says that ProShop ERP’s paperless system makes it easy for people to have all the important info about a job at the machine at all times (again, so they don’t have to get up and leave the machine). Having paperless instructions also makes it smooth to set up jobs that were already run on that machine in the past because the setup person doesn’t have to find an old printout. The instructions from the old job are ready on a computer next to the machine and may have important updates from the last time the job was run. Having organized instructions at a machine that are easily accessible enables a different person to set up a machine than the previous one. Paul says that ProShop ERP has plans to have software integrated right on machine tools in the future.(24:45)

Paul says ProShop ERP also helps with cutting time on the inspection step of a setup. It sets up processes for a setup person to do her own inspection on a part so the part looks good before it is sent to the Quality department. When the part goes to the Quality department there are notes for the quality technicians to pay attention to. (29:45)

Paul says another important part of every setup is continuous improvement on a part. One of the key features of ProShop ERP is that it allows machinists to document process improving ideas, flag their planning department, create action items, and assign tasks to save even more time. It’s all in one place so that communication is simplified and efficient. (31:40)

Paul says one of the most interesting things he learned last week was that 6% of the forests on the West Coast have burned this year within the last few weeks, which is nearly 20 times more acreage than last year. (34:05)

Paul says a key takeaway is that setup is very logical and doesn’t require specialized software if you have key systems in place. He believes that a little upfront work will have huge ROI on your time on the back end of the process. (35:15)

Question: What aspect of work do you wish you were more organized for?

For more information on ProShop ERP, visit: https://www.proshoperp.com/.

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Making the Most of My Life?

June 9, 2021 • 8 Replies

By Noah Graff

What the heck did I do last month? What did I do last week? What did I do today? Do you ever ask yourself those questions?

The last three years, I’ve written in a diary nearly every day. It takes me about 10 to 30 minutes to recount the day’s main events and then ramble about my reflections and feelings. I also try to take a selfie photo each day to go along with the diary entries that I type into my iPhone or computer.

I write because I want to make sure the memory of each specific day is not lost. Life keeps feeling like it’s going faster and faster, and sometimes I have trouble recounting what I did just hours earlier, let alone years ago.

I think I’m hung up on a fear that I am squandering my one precious life on this earth. It’s important to me to know that each day mattered. What would “mattering” entail? To me, a day that mattered would mean I created something, learned something, tried something new, or helped someone. Spending time with loved ones also makes my days count.

Noah’s Diary, June 8, 2021

While writing this blog, I looked up what I did on June 9, 2018,—three years ago today. I was on my bachelor party weekend in New Buffalo, Michigan, a special day that I hadn’t thought about for a long time. I also read that on June 9, 2020, I almost sold a Tschudin grinder, did a great podcast interview, made dinner with my wife Stephanie, and watched a Chicago Bulls documentary.

In 2021, I also started writing down at least one new thing I learned each day. Yesterday, I learned from a colleague that a thread whirling live tool attachment for a Citizen machine could cost anywhere from $10,000 to $20,000. I also learned from a business partner that putting sugar in bread dough slows down yeast activity, because “yeast likes to eat sugar.”

I think my paranoia about squandering my time on earth may represent a longing for greater purpose. Maybe if I was fighting for a human rights cause, maybe if I was raising children, perhaps then I would worry less about my days being lived to their potential. If I felt like I was doing more things that left a tangible mark on the world, maybe I wouldn’t feel like I needed to document every day.

Do a lot of people ponder this stuff all the time? Would most people find my daily ritual unnecessary?

I have to stop writing now. It’s 12:30 PM, and I haven’t even documented June 8, 2021, yet.

Question: What makes a specific day significant for you?

Ep. 123 – How to Find Serendipity with Christian Busch

June 3, 2021 • 1 Reply

By Noah Graff

Our guest on today’s podcast is Christian Busch, author of the new book, The Serendipity Mindset: the Art and Science of Finding Good Luck.

Have you ever noticed how certain people always seem to get lucky breaks? According to Christian these lucky people have a skill for recognizing luck when it materializes. In his book he guides readers on how they can create luck, recognize it when it appears, and then turn it into positive outcomes.

After hearing Christian interviewed on another podcast a few months ago, I was so fascinated I started listening to his book myself.

My job as a machinery dealer revolves around serendipity. Opportunities for machines always pop up when we’re not expecting them. It’s one of the most interesting parts of the job. But I’m seeking other serendipity in my life. I’m looking for inspiration for new creative projects and opportunities to bring more purpose into my life.

Scroll down to read more and listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts, Spotify, or your favorite app.

Key Takeaways From the Interview

Serendipity Hooks

Christian prescribes using what he calls serendipity hooks, triggers to cause serendipitous outcomes in social interactions.

He advises introducing yourself to new people by using alternative questions to the typical, “What do you do for a living?” For instance, if you meet someone at a conference you could start a conversation by asking people what book they are currently reading, or you could ask them what they are thinking about at that moment and why.

If other people ask you what you do for a living, Christian suggests to mention several diverse things that could spur a connection with your counterpart. For instance, in my case I could say, “I’m a used machinery dealer, I have a podcast, and I’m passionate about making documentary films.” That response would create three different potential hooks that the other person might relate to.

Good salespeople use serendipity hooks by casually mentioning alternative uses for a certain item or various other products available. The strategy is to not make a blatant pitch, just mention things in passing that could possibly strike a chord a client.

Christian Busch, author of The Serendipity Mindset.

Changing Your Paradigm

In his book, Christian brings up the Seinfeld episode in which George Costanza decides to do the opposite of everything his instinct tells him. The behavioral shift results in him meeting a beautiful woman and getting a job with the New York Yankees. Christian suggests that people try to think of one thing they could do differently every day.

One issue he says we need to overcome is the “hammer and nail problem.” If we need push a nail into a wall we automatically think we need a hammer. Our current knowledge closes our minds. However, if we have less expertise in an area, we are more likely to try new innovative ideas, for instance, the development of mobile banking in Third World countries where ATMs are hard to come by.

Always Keeping Your Eyes Open For Serendipity

Christian says if you believe interesting things can happen, it makes them likelier to happen. You should be prepared that every meeting could lead to something. For instance, if you spill coffee on a stranger at a cafe you should be open to using this as an opportunity introduce yourself to the person. Christian happened to have met an ex-girlfriend as well as his current wife that way.

He suggests to keep a serendipity journal in which you write down examples of when serendipity strategies worked and didn’t work. It is also useful to write down when you failed to use a strategy that might have led to serendipity.

Connecting the Dots

Christian says we can’t always change a situation, but we can influence our response to it. We can often use negative circumstances in our lives to get to positive outcomes, for example, the reinvention of a brewery during the Covid-19 pandemic, which used alcohol to become a hand sanitizer company.

Last year Christian became severely ill from Covid-19 and almost died. While he was sick and alone in his house he read Man’s Search For Meaning, by Viktor Frankl, a book about a man in a concentration camp who tried to find meaning in something every day despite being in a place where there should be nothing meaningful. He says reading the book made him rethink his life’s priorities. When he recovered, he started a romantic relationship with a friend of 12 years. They are now engaged and expecting a child.

Question: If you could be granted one wish for a serendipitous occurrence, what would you wish for?

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Worth the Risk?

June 2, 2021 • 7 Replies

By Noah Graff

Last Friday we sold a Swiss machine. It was an OK deal, but in order to complete the sale we had to take some live tooling from a different machine we own and transfer it to the one we sold. We don’t know how much the live tooling is going to cost to replace it, but we made a calculated judgement that robbing one of our other machines was worth it. The important part was to make a sale. Close the deal! Because even in a good market, as we seem to be in right now, it’s hard to close deals.

It’s funny how a used machine can stay on the market for six months, a year, two years. Then all of a sudden you get interested in purchasing it. You start doing your research to see if it’s the right machine to buy, and boom! Someone else is interested too, and it’s gone the next day.

It’s not out of the ordinary for Graff-Pinkert to buy machines from people we have never met. We buy machines on other continents, machines sitting in caves or barns, machines old enough to be my parents.

We buy some machines we have only seen a few photos of, let alone seen running on video.

In 2012, we bought our first INDEX MS32C at an auction in Australia. We did not know how much we could sell it for, and we didn’t know how much it would end up costing to ship it to Chicago—$70,000. We still ended up doing well on it.

We have also taken some risks on deals in the past that had horrible consequences. We suffered one our worst loses a few years ago on a CNC machinery deal in Asia. I spent several days with the seller and his wife. They shared intimate details about their family with me. They paid for my train ticket. They conned me.

In our business, it’s important to constantly question ourselves whether a risk is worth taking. Are we are making a decision with limited knowledge because we were too lazy or careless to do the necessary research that could prevent a mistake? Or, do we really have to make a snap judgement on deal because otherwise we risk losing out on a great opportunity?

What would be worse, losing out on a lot of great opportunities because we were too indecisive or scared, or taking a big hit from a disastrous deal?

Question: What interesting calculated risks have you taken in the past? Did they pay off?

Lean to Excess

May 25, 2021 • 8 Replies

By Lloyd Graff

The Ford F-150 pickup trucks, with an average selling price $40,000, are sitting unfinished in assembly plant parking lots. For lack of computer chips, they cannot be driven or sold. Ford will lose at least $2.5 billion in sales this year. Most of it will never be recaptured.

Ford and most of the car companies are victims of being slaves to the philosophy of “lean.” Their unwavering belief that their computers and data analysts can predict usage and dictate the ordering of components to wring out the last nickel of profit in order to raise the price of the stock and pad their bonuses, is one of the fallacies of 21st-century business practice.

In the Great Chip Fiasco of this year, the sheep who decide how to keep the factories running at peak efficiency made hugely incorrect estimates on demand for 2021. Unlike the components that come from primarily domestic Tier 1, 2, and 3 producers in North America, chips come almost entirely from Asia.

Frankly, I do not understand why a chip made in China or Taiwan should be significantly cheaper than one made in Albuquerque or Phoenix, but that was the calculation car companies bought into over the past 20 years, so the chip makers followed their reasoning and built almost all their high-volume new plants across the Pacific.

In the midst of a pandemic, before the FDA had okayed two extremely effective vaccines, the car guys all believed that sales of the 2021 model would be awful.

Evidently, they and their “smart” computers were so sure of their predictions of misery they chose to order chips from Asia in paltry amounts. But chips were the one component in a car or truck that they could not ramp up quickly. They could not start churning them out within weeks, the way American manufacturers did when called upon to produce respirators in 2020.

The obvious and enormous weakness of dependence on foreign chips with limited North American capacity was that they had to be right in their predictions or face a production nightmare. The stupidity of “lean” has always been the blind belief in predictability and the illusion that you can quickly pivot from a mistake.

Fat in the supply chain is insurance. Evidently, insurance is not part of the computer programs that dictated the “lean and mean” mess of hundreds of thousands, and eventually millions, of unbuilt vehicles.

As any human being knows, life is unpredictable. Who saw a pandemic coming two years ago? Who saw water shortages in Taiwan? Who saw an increasingly testy relationship with China? And who saw a huge rebound in demand in 2021?

But that is why lean to excess is dumb, and the F-150 pickups sit unfinished, and new chip plants in America are several years away.

Question: What stuff do you always keep extra of?

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