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.

*    *     *     *     *

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.

Scroll down to listen to the podcast

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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Hammers Only See Nails

By Lloyd Graff

“If all you have is a hammer, everything looks like a nail.” This phrase is attributed to Abraham Maslow in his book, The Psychology of Science, in 1966.

It relates to a cognitive bias that involves over-reliance on a familiar tool. The screw machine guy thinks he can run 150 pieces successfully on a multi-spindle, and the person who has Citizens and Stars wants to put a 20,000 piece run on several of his Swiss machines.

We all tend to fall back on the tools we own or are most familiar with. I saw the downside of this phenomenon over the past several months as my wife Risa struggled with nagging headaches which flared up after strenuous exercise, particularly Tae Kwon Do sessions, where she attempted to keep up with people often 30 or 40 years younger than her.

She went to see a respected neurologist at the University of Chicago who put her through the scans and MRIs that modern medicine uses to diagnose maladies, but nothing showed up. Yet the headaches kept coming and getting more severe.

The problem with migraine headaches is that close to one third of Americans get them at times and there is no real cure, just drugs and approaches to make life more livable as one endures them. Migraines are thought to be caused by too much blood in the brain or vessels in the skull, which triggers pain.

By constricting or regulating the blood flow, pain can often be controlled, which is why caffeine or certain beta blockers, which regulate blood pressure, can be useful. Ice can also reduce suffering when applied to the head. Botox and steroids can also help.

Risa tried them all, kept a diary, and the headaches still kept coming. Then two months ago, something scary happened. She got heart palpitations which pushed her to call her generalist doctor for a checkup.

Because Risa was considered an athlete in top shape, the neurologist had not listened to her heart of late, but as soon as the doctor put a stethoscope on her, she heard a very loud heart murmur. She let Risa listen and it scared her. We were at University of Chicago Hospital and she was able to get in for an echo cardiogram within a half hour.

On the drive home, we heard from her doctor. She had a severe mitral valve tear in her heart. The cardiologist on duty that night just happened to be a friend that we had known since she was a three year old, and she laid out the likely scenario ahead – more tests, open heart surgery, then cardiac recovery.

I dared to ask the question, “could this have caused the headaches?”

The answer was that there was nothing in the literature to indicate that, but we’ll just have to see. We talked to family members who were doctors but not heart specialists or neurologists. They felt that the screwed up blood flow caused by the mitral valve tear and the resulting “regurgitation” of blood back to the heart could cause headaches and the spooky whooshing feeling she often felt in her forehead.

Five weeks ago, Risa had open heart surgery at Northwestern University Hospital. The surgery was performed by Dr. Patrick McCarthy, a world expert in mitral valves who was recommended by the cardiologists at Northwestern’s rival hospital, University of Chicago. She is recovering well and soon will begin cardiac rehab.

She has not had one “migraine” headache since the surgery.

The question that troubles me is why the neurologist never heard the heart murmur, or connected that weird swooshing Risa felt in her forehead after exercise with the migraines.

The heart-head relationship never came up.

“If all you have is a hammer, everything looks like a nail.”

Question: How do you deal with headaches?

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Ep. 71 – Selling Wickman Multi-Spindles with David Taylor of Machine Tool Spares

By Lloyd and Noah Graff

Our guest on today’s podcast is David Taylor, owner of Machine Tool Spares, one of the world’s most respected rebuilders of Wickman multi-spindle screw machines.

Machine Tool Spares is based in Coventry, England, the birthplace of Wickman machine tools. His company turnkeys Wickmans and sells Wickman spare parts all over the globe. David shared his views on the role of cam multi-spindles and Great Britain in today’s machining industry.

Scroll down to listen to the podcast.

Main Points

(3:00) David talks about his company, Machine Tool Spares. The company provides Wickman multi-spindle spare parts, service, rebuilt and turnkey machines around the world. He says the company’s mission is to keep the Wickman cam machines relevant in the modern world. He says his company stretches the capabilities of the machines to do applications never achieved before using Wickman cam machines.

(5:00) David says that Machine Tool Spares is the independent alternative to Wickman Group, also located in Coventry, England.

(6:30) David says Wickman usage in the UK is continuing to decline. He this is due to less people with skills to run the machines, and because people are put off by the length of changeover time between jobs on the machines. David says his company is finding growth in India, Europe, and Scandinavia.

(11:00) David says Machine Tool Spares is doing much less selling of machines in “as-is” condition and more rebuilt and turnkey machines for customers’ specific applications. He says customers have higher standards for parts and want to buy machines that are ready to make high quality, consistent parts as soon as the machine arrives on their floor, so every machine that is shipped out is tested for accuracy.

(12:15) Lloyd and David marvel at how old Wickman machines in poor condition continue to run good parts for decades. David attributes this to how robust Wickmans are.

(13:30) David says that customers in India are becoming more sophisticated and wanting to buy higher quality machines, rather than purchasing equipment primarily based on price. He talks about an unusual turnkey job Machine Tool Spares sold to India in which a company needed to machine a forged part.

(18:00) David says that often he has seen companies running very expensive CNC multi-spindles on certain simple jobs that a cam multi-spindle could easily handle. He says Machine Tool Spares does not retrofit Wickmans with CNC capability. Instead the company sometimes engineers customized attachments to accomplish complicated operations.

(12:40) David talks about another business he has a share in, a CNC Swiss shop running Citizens.

(22:30) David says Machine Tool Spares has not sold much equipment in China but has supplied Wickman spare parts there. He says even though that market is growing, his company hasn’t pursued it because it would require considerable resources.

David Taylor, Owner of Machine Tool Spares

(24:45-31:30) David talks about Brexit. He says that for the next year everything will stay the same in the UK, but next year Britain’s relationship with continental Europe could dramatically change depending on how the new trade deal is negotiated. He says that the EU is much more experienced at negotiating trade deals than Britain, which hasn’t negotiated a new trade deal independently in 40 years. He says he is pretty worried about the deal’s conclusion. In a worse case scenario he says he would even consider moving part of his company’s spare parts business into a facility in continental Europe.

David says the Brexit negotiation could dramatically effect Britain’s  supply chain. He gives an example of a Nissan plant in northeast England, which has historically been one of the most productive car plants in Europe. He says Nissan holds half a day of stock there. It uses 5 million parts per day, 60% of which are imported. He says that if importing material into Britain becomes a slow and difficult process, businesses like Nissan may leave.

David says Brexit has significantly depreciated the British Pound. This is has been good for the country’s exports, but has disrupted the country’s imports.

(33:10) David says he enjoys Swarfcast because it’s nice to hear people talk about our industry. He says when he goes to dinner with friends he describes himself as “the dinosaur.” He says he is in a world his peers don’t understand because they don’t have the privilege of working with machines that are 40 to 50 years old.

Question: Can you make good money with old screw machines?

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Ep. 70 – Machine Tool Building with Michele Tajariol of TAJMAC ZPS, Part 2

By Lloyd and Noah Graff

Today’s podcast is part two of an interview we did with Michele Tajariol, co-owner and Vice President of TAJMAC-ZPS, one of the world’s most prominent producers of multi-spindle screw machines. In the interview Michele gives his take on the competitive market of European multi-spindle brands. He also shared his experiences selling machines to China and India.

Scroll down to listen to the podcast.

Main Points of the Interview

(2:30) Michele says that when his family’s company TAJMAC purchased ZPS 20 years ago, it was only familiar with the the company’s multi-spindles. Michele says that he and his family knew very little about the other machines the company produced, such as CNC machining centers and gantry bed mills, and they knew only a little bit about the company’s foundry.

(3:20) Michele discusses the world multi-spindle market, saying that swings in demand for the machines are often volatile and unpredictable. He says that a year and half ago ZPS couldn’t produce enough machines, but currently the market is soft. He says sales of machines can change 50 percent or more from one year to the next. He says that the business has to be prepared to adapt to both high demand and low demand for machines. Michele says that though the multi-spindle business has gone soft right now, the machining center business is good because of strong manufacturing in lower volume sectors.

(6:55) Michele says that upper management of automotive companies seem as though they are not totally sold that electric cars will dominate the car market in the near future. One trend he is noticing is that younger people in Europe don’t want to own cars and instead use car sharing services. He says he thinks there will be a lot of demand for self-driving cars in the coming years.

Michele also says that people have not proven electric cars are better for the environment than standard gasoline models and thinks that diesel is probably good for the environment despite critics. He says that so many unknown factors are making car buyers indecisive. He says that people running multi-spindle screw machines for parts in internal combustion engines don’t know which production equipment to invest in going forward.

(11:20) Michele says machining centers are selling well now to produce batteries for electric cars. The machines are used to mill the cages that hold the batteries in cars and trucks. He says that he has no desire to buy an electric car himself.

(12:45) Michele says that a few years ago TAJMAC-ZPS chose to keep making a lot of cam-driven multi-spindle models in addition to building CNC multi-spindles. He says it was a move contrary to the other European multi-spindle producers who stopped making Cam machines entirely or greatly reduced their production of them. He says this has been a great business move because there are still a lot of end users making parts that don’t require CNC technology. He says that the price of a new ZPS cam multi-spindle will range from 400,000 Euros to nearly 1 million Euros. The price of ZPS CNC multi-spindles range from 600,000 Euros to nearly 2 million Euros, depending on the size and capability of the machine.

(15:35) Noah asks Michele to compare ZPS’s CNC multi-spindles to those of its competitors. He says a 6-spindle with the top configuration offers a higher configuration of driven axes and linear axes than its competitors. 

(16:20) Michele says the leader in CNC multi-spindle machines is INDEX. He says Schutte is steadily selling less machines, Gildemeister is just now rebooting its CNC multi-spindle. He says Tornos has had lots of ups and downs over the last 20 years, but their newest CNC multi-spindles have good technology because they redesigned their machines so recently.

(19:30) Michele discusses ZPS’s experience selling to the Chinese market. He says in China many companies opt to choose Swiss style machines over multi-spindles because they feel more comfortable than the multi-spindles despite them being more efficient. In contrast, Europe’s labor is expensive and its buildings are often small, so multi-spindles are the best choice for European manufacturers.

(21:40) Michele says that in India the price of a new multi-spindle is out of a typical machining company’s price range, so companies there opt to buy used or rebuilt multi-spindles. He says the Indian machining market is growing and companies there often have a better knowledge of multi-spindles than those in China.

(23:10) Michele says that believes China’s manufacturing industry will still be superior to India’s in the foreseeable future. He says China is unrecognizable from when he first went there 20 years ago, while India still seems much the same.

(25:45) Michele says think that in China people don’t have enough freedom but in Western Europe people have too much freedom and take their freedom for granted. He says that in China it seems like people are happy, while many Europeans and Americans complain that their standard of living has fallen.

(28:00) Michele says that luck has played a big role in his life. He feels grateful to have grown up in a good family in Italy and that he has had a lot of good career opportunities of which he has taken good advantage.

Question: Do you do business in India?

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A Quiet Car Please

By Lloyd Graff

Is it a lot to ask of a car to be able to have a conversation or listen to music while driving on the expressway?  Maybe so, because I can’t seem to find a car that can enable me to do so.

My wife’s lease is up on her 4-door Camry, and we are searching for a vehicle to replace it that does not require a scream to answer a question.

The problem of cabin sound appears to be multifaceted.  One issue is that I wear hearing aids which amplify background sound which can drown out human conversation.  There are adjustments to modify this issue in the control module in my phone, but that is impractical, particularly while I am driving.

Another complication appears to be the 4-cyclinder engine in the Camry which is noisy and seems to have to huff and puff to push a 4-door, full-sized sedan from place to place.

Tire noise on fast highways is another noisemaker.  It grinds through the floor relentlessly.  Add in meager sound insulation in the doors and you have the almost debilitating drone of a Camry and evidently most of the cars being sold today.

Toyota Camry, Lloyd’s wife’s noisy car

Going electric is an option, but that does not address most of the sound generation that drives me into silence.

Does anybody know of a viable option for people with a noise aversion?

*  *   *   *   *

Major League Baseball’s spring training begins again this week in Arizona and Florida.  This is a blessed event for me.  It is a sign of hope that another brutal winter in Chicago is finite. Hallelujah.

It also means hope is alive for another successful season for my beloved Chicago Cubs who have a new manager, David Ross, who was a second-string catcher during the Cubs recent golden period of 2015-2017.  I loved the former manager, Joe Madden, but the team seemed to need a change and a $5-million-dollar-a-year boss whose contract had expired was an easy target.  Madden quickly caught on with the Los Angeles Angels.

Another hopeful sign for 2020 is the hated Houston Astros have been found out as cheaters who used high tech to steal catchers’ signs and then used crude banging of a garbage can lid to alert their hitters to a fastball or off-speed pitch.  In the 2017 World Series they devastated Yu Darvish, then a top pitcher with the Dodgers, by informing hitters of what kind of pitch was coming.  People thought Darvish was “tipping” his pitches, but really it was the devious Astros who stole his catchers’ signs.  The incredible improvement in batting contact made by Houston hitters should have alerted Major League Baseball to the chicanery of the Astros, but the baseball honchos did not act until former Astros players spilled the information.

It is possible the Boston Red Sox may have done similar dirty tricks in their World Series season in 2018, but the verdict has not come down.  Their manager, Alex Cora, did get fired, however.

*  *   *   *   *

The battle for the Democratic Presidential nomination is fascinating and scary.  It appears Bernie Sanders will face off against Donald Trump, with Michael Bloomberg possibly running as a third option.

Many people think this match-up is a sure win for Trump.  I’m not so sure.  More later.

Go Cubs.

Question: What car would you buy to get a quiet interior?

 

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Ep. 69 – Life of a Machine Tool Builder with Michele Tajariol

By Lloyd and Noah Graff

Today’s guest on Swarfcast is Michele Tajariol, an old friend of ours and co-owner of TAJMAC-ZPS, one of the world’s most prominent producers of multi-spindle screw machines.

Scroll down to listen to the podcast.

In the interview, Michele discussed how his family’s business grew from a used machine tool dealer in Italy into a diversified multi-national machine tool builder. He also recounted his career path, first working with his father in Milan, followed by a short stint in Chicago working at Graff-Pinkert, and finally moving to the Czech Republic where he became the manager of ZPS’s factory.

Main Points of Interview

(5:10) Michele talks about the history of his family’s business. Tajmac was started by his grandfather Amadeo in the 1930s, producing mechanical lathes during World War II. Later, Amadeo became a rebuilder of single spindle machines, and sold used turning equipment. Michele’s father Andrea and his uncle, who would later leave the company, joined Tajmac. In the ‘90s, Tajmac began distributing new multi-spindle machines from ZPS a Czech machine tool builder. The company sold machines in Italy, Germany and the United States. (In the United States during that time ZPS multi-spindles were known as Euroturns).

(6:55) In the early ‘90s, Tajmac bought Wickman, the British multi-spindle builder, when it went bankrupt. It was Tajmac’s first experience producing new machine tools. In 2000 Tajmac bought ZPS. The company was in financial trouble, and Michele’s father liked the rigidity of the machines and the price.

(9:45) Michele says his father taught him the importance of loving your job, even if the job wasn’t your original dream. Also he says it’s important to do a job in the manner you like so you can continue to do it longterm.

(11:30) Michele talks about his experience coming to work Graff-Pinkert in 1999. At age 22 Michele had been working at Tajmac for three years. Lloyd Graff suggested to Michele’s father that it would be an interesting experience for Michele to try working in the machinery business in the United States for three weeks. He ended up remaining in the United States for four months. Michele enjoyed working at Graff-Pinkert where he felt a similar familial atmosphere to Tajmac, he enjoyed Chicago and he also met a girl in the city.

Michele Tajariol, Co-owner of TAJMAC-ZPS

(15:10) Michele talks about joining his family’s business. He said his father never put pressure on him to work at Tajmac. Michele did not like going to college in Milan where he only attended school for one year. He needed to work somewhere, and the machinery business seemed like a opportunity.

(16:20) Michele talks about how he came to work at the ZPS factory in Zlin, Czech Republic. The first manager Tajmac hired to run ZPS didn’t work very well for the first year or so. At 25 years old, Michele went to Zlin with some friends for a holiday weekend. He loved the city and was single, so he decided it was a good opportunity to live and work there. After a short time working at ZPS, the second general manager the company had hired was also unsuccessful. Michele then decided it was best for him to try running the company.

(22:30) Michele says he thinks he is just an “OK general manager” but considers himself a “good owner” who knows multi-spindles well. After 20 years he says he finally feels that he has a decent proficiency in the Czech language.

(24:30) Michele talks about all of the types of machines the TAJMAC-ZPS produces at its factory in Zlin. The company produces multi-spindles, Manurhin sliding headstock machines, CNC machining centers (multipurpose, horizontal and vertical), and gantry bed mills. It also builds plastic injection molding machines for Negribossi. The company also has its own foundry.

He says the most profitable machines the company builds are its multi-spindle screw machines, but those machines also take the most skilled labor and engineering because they are so complicated.

(27:20) Michele says ZPS is one of the only machine tool companies that makes every part in its machines starting with the casting. He says this is not the best business model, but it produces the best quality machines.

Question: Do you prefer to buy new or used machine tools?

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Tesla Worth More Than Toyota?

By Lloyd Graff

Tesla stock sold for $169 per share in June of 2019. People were wondering if Tesla was today’s DeLorean.  Its 2025 bonds were paying 7%.

Today, Tesla stock roared past $900 per share.  What happened in seven months, and what does it mean for the machining world?

Obviously, the short sellers got killed. The stock has a rather thin float for a significantly traded company, which makes it volatile. But even the doubters, and there are loads of them, must admit now that Elon Musk has done an amazing job in building a car company from scratch.

There were hot moments when cash was short, and he pushed everybody to work overtime to hit the production goals for the Fremont, California, plant on the mid-priced Model 3. Then he surprised most people by surpassing sales targets. He did the impossible again by building the enormous battery plant in Nevada and somehow putting up a huge plant near Shanghai and rolling the first cars out before the end of 2019.

Meanwhile, GM and Ford are lumbering along with their electric car plants in the Midwest, while Tesla is starting its European plant in Berlin.

I have always been a Tesla skeptic and never bought the stock, but now I must admit that Musk has an astounding track record on cars and somehow finds time to build his SpaceX dream into a viable entity, too.

Tesla Roadster 2020 Prototype

The aspect of Tesla which I think most people have missed is the amassing of data for producing a viable autonomous car. Tesla has had a few fatal accidents with its self-driving cars, but Musk, the supreme risk taker, evidently has made the calculation that getting to the end line first in both electric and self-driving is worth the damages incurred when screwballs push the envelope or fall asleep. Google’s Waymo has been much more conservative, avoided tragic accidents, but is a distant second to Tesla in data derived.

The Europeans like BMW and Audi, the cautious American car companies, and the ultra-conservative Japanese are way behind and stumbling. The $900 stock value of Tesla is the world waking up to the farfetched idea that Tesla may have a tremendous first mover advantage in both electric and self-driving vehicles that few people thought possible even a year ago.

It is possible that neither category becomes enormous, but it seems likely to me that at least one of them is the jackpot.

On the other side, Exxon stock is down 12% so far in 2020, and oil prices are sputtering. Electric vehicles gaining traction and, to a lesser degree, the rise of self-driving taxis, mean fewer machined parts.  In our machine tool business we see people hedging their bets on automotive work. It isn’t going away, but it certainly does not look like a growth business unless you are in the Tesla orbit.

Our customers who are heavy in auto and small truck are looking for diversification, which has pushed them into Swiss-type machining and away from multi-spindle screw machine work. The brutal competition for high-volume auto work has also forced our clients to take automotive expertise to other more appetizing areas.

Yet the conventional wisdom that automotive work is an idiot’s game may turn out to be wrong, too. The automotive supply chain’s reliance on China is showing itself to be vulnerable. The Trump tariffs, Chinese theft of intellectual property, the threat of the Hong Kong demonstrations spreading, and now the Corona Virus epidemic are exposing the danger of becoming too dependent on China outsourcing.

Despite Tesla stock hitting $900 on Tuesday, it would be a mistake to give up on old school gasoline vehicles driven by human beings, at least for the next 10 years.

Question: Is automotive work too risky to be in?

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Ep. 68 – Starting a Swiss Shop with Dulio Arellano

By Noah Graff

Today’s podcast is an American Dream story. Our guest is Dulio Arellano, owner of Premier Swiss, a Tornos shop in Addison, Illinois, which he founded in 2017. Dulio came to the United States from Mexico when he was 18 years old.

After working in various machine shops, Dulio got a job as a technician at Tornos USA. At Tornos, Dulio developed skills and relationships that gave him the foundation to start his own business at the age of 34.

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Main Points of the Interview:

(3:20) Dulio discusses his company, Premier Swiss, a job shop with three Tornos Swiss lathes, a DECO10, DECO13, and DECO20.

(4:25) Dulio talks about immigrating to the United States from Mexico when he was 18 years old in 2001. His father had already been in the United States for years, but the immigration process took a long time. 

(6:00) Starting at age 20, Dulio worked for eight years at a company that makes pressure pipes. While working there, his older brother repeatedly told him that he should look into a career in CNC machining. It took his brother independently enrolling Dulio in a CNC machining class to get him to try it.

Dulio Arellano, Owner of Premier Swiss

(9:30) After working in CNC machine shops for several years, Dulio landed a job as a technician at Tornos. While at Tornos he learned about the latest Tornos equipment. Just as importantly, he also made a lot of close contacts in the Swiss business.

(10:10) After four years working at Tornos, Dulio knew that he wanted to eventually go into business for himself. One day he went to a customer to give a training class. The customer told him that he had a used DECO10 for sale and asked him if he knew someone who would be interested in buying it. Dulio bought the machine at a bargain price in the low $20,000s.

(14:10) Dulio’s first challenge was to find a place to put the machine. He rented a heated 5-car garage on Chicago’s westside for $500 per month that he found on Craigslist. The business later moved to St. Charles, IL.

(19:00) While continuing to work at Tornos, Dulio started experimenting making a few parts he hoped to sell online, such as an arrowhead he had seen on eBay that was made in China. 

(21:00) On a Tornos service call to a huge customer, the customer told Dulio he was trying to find some good nozzles for coolant on his machines. Dulio told him he would make some over the weekend on his machine. He returned the next week with some sample parts, but unfortunately the customer had thought he had been joking when Dulio said he would make the parts. The customer had already agreed to buy 2,500 nozzles from a vender. Though he was quite frustrated, Dulio admits it was great learning experience about the importance of being clear in business deals.

(27:40) Not long after the frustrating nozzle incident, another customer called Dulio for help on a machine. After Dulio helped him, the customer complained that he did not have enough capacity for some of his jobs. Dulio told him that he had a DECO10, and the customer gave him the opportunity to make some parts for him. Since then, the customer has given Dulio enough work for him to buy a DECO13 and DECO20 and quit his job working at Tornos.

(32:10) Dulio believes that his business has a bright future going into 2020. He says he believes that America is the land of opportunity.

Question: Is this a good time to start a machining business?

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