IndustrialSage

All right, so let’s jump into today’s episode. I’ve got some great guests here. I have Linda Goetze, who is the president and CEO of the Blockchain Chamber of Commerce, and we have Michael Darden here, who is a member of the Blockchain Chamber of Commerce. Thank you so much for joining me today on IndustrialSage.

Thanks for having us.

I’m super excited to get into this topic, ’cause it’s going to be a little bit different than what we’ve maybe talked about in the past, where it’s been traditionally a lot of sales and marketing. And as I’ve alluded, I’ve talked about this on the show a little before, where we’re starting to make a little bit of a transition, a little pivot. We’re going to get into some different topics.

So, I’m very excited to talk to you guys today about Blockchain. That’s super interesting, and it’s a topic that you hear a lot about, and there’s a lot of misnomers, a lot of misinformation. And I’m hoping, and I know you guys are going to do a great job of just kind of sharing with us and our audience a little bit more, for those who maybe are a little less informed about Blockchain, what it is, what are those opportunities, how can you roll that out in a manufacturing environment, and what that looks like. But before we get into all that, Linda, if you could maybe just tell me a little bit about yourself and the Blockchain Chamber of Commerce.

Absolutely.

That would be awesome.

Yeah. Obviously, the introduction to Blockchain is different for everybody, and mine was buying bitcoin.

Oh, that’s exciting.

Yeah, in 2012, when it wasn’t convenient to do.

Okay. So no coin base or anything like that?

No, no, no, no, nothing that easy. Not push-button like it is today. Yeah, the process was getting money from the bank, going online and finding out where there were these special ATMs, taking the money from the bank, where they gave you strange looks and put you on a list, (laughs) to the ATM location, where the clerk behind the counter gave you strange looks. Anyway, then you get a little receipt. You go back, you enter it, you get a string of letters and numbers, and you take that home, and you hope when you spin up your own instance of the bitcoin Blockchain, that it says that you have X number of bitcoins in your wallet.

Wow.

So you take real, “real” money, and put it into a string of letters and numbers, and have trust.

And hope that it’s there?

That’s trust.

Yeah, exactly.

That something good is going to happen here. And I just saw something about it that made me, I mean, I talked to my husband three times before he actually said, “Okay, let’s go ahead and do that.” And it has been one of the best diversification choices we have made. And I’m not recommending going and taking all your money out of the bank (laughs) and putting it into bitcoin or anything like that. It was a very measured approach that we took, and they’ve actually shown that between one and, I think it’s three to five percent of your investable assets being in bitcoin can actually lower the volatility of your overall portfolio. So, it’s pretty interesting to look at that and say, “Hmm.” Because everyone hears about bitcoin, “it’s so volatile, it’s off the charts.”

Yeah, exactly, right.

And seeing bitcoin and Blockchain being in the same bucket just makes me kind of cringe, (laughs) because bitcoin is a part of the cryptocurrency sub-vertical that’s part of the financial services vertical, which is one of 12 verticals that we have at the Chamber that Blockchain is impacting. And manufacturing is one of those huge verticals. Supply chain is massive. What we’re seeing obviously in the financial services vertical, we’re seeing it in the news all the time.

Sure, right.

So it’s changing the way the world works.

That’s a super interesting story. So you got in super early with that, 2012.

Yeah.

I mean, that’s pretty awesome. So, tell me a little bit, how did you get involved then with the Blockchain Chamber of Commerce? What’s the story there?

Yeah, I connected with the very first event that was held. It was January of 2018, and Abraham Xiong was actually the ideator of the Chamber. He and a core team were holding this meeting, and they had everyone raising their hands. “How long have you owned cryptocurrency or bitcoin?” So when they got to five years, and I was the only one still holding my hand up, (laughs) well, they call me the “grandma.” I’ve tried to change that to “godmother,” not “grandmother.” (laughs

No, it was just a real, strong connection with that core team. I became a founding member of the Chamber, just did volunteer stuff, was on panels, and then was asked to be CIO of the Chamber, and the progression and the creation of the Blockchain ecosystem platform, that has kind of been my baby, and then I was asked to be president and then CEO of the Chamber. So it’s just been a progression of growing into the need and helping establish, we have 23 chapters that are being set up worldwide right now.

Oh, wow, yeah.

I just got back recently from visiting our chapter in Dubai.

That’s awesome.

And our chapter in Athens, Greece. So, amazing people around the world that are connecting with the Chamber, and what I love about it most is the core intent and the heart behind it is to help educate. And I’m an educator, that’s my background. So educating and connecting people to this brand new technology, it’s not brand new, it’s about 11 years old–

To most of us, it is. (laughs)

But to most, it is brand new. So our social mandate is raising awareness, facilitating adoption, and inspiring advocacy. And that’s for commerce, consumers, and people building careers in Blockchain. So I know we have a lot of commerce going on.

Oh, yes.

And the manufacturing areas, again, are kind of where a lot of it starts. We have to look at the genesis blocks, being in the manufacturing space. So, I’m excited because we have members of the Chamber that are phenomenally impactful when it comes to what’s going to be done in using Blockchain for good and connectivity and transparency. I mean, I’m just happy to get to be a part of the connecting and educating.

Well, that sounds super exciting. How many members do you have in the organization worldwide?

Well, we have 23 chapters, and we have a model where we connect with traditional chambers. So the Cumming-Forsyth Chamber of Commerce.

Okay, yeah.

Is one that we have a reciprocal membership with. So we’ve been really involved in what they’ve been doing. They recently just did a hackathon, the talking light.

Traffic lights.

Talking traffic lights.

Oh, that was like a couple weeks ago!

Couple weeks ago.

Yeah, yeah.

At the Digital Ignition, yeah.

The Blockchain Chamber was part of that connectivity.

Oh, excellent, very cool.

So, anyways, stuff like that happening here in Atlanta, but then globally is what we’re a part of.

That’s awesome. So obviously, to most of us, I feel like it’s an emerging technology. I think there’s a lot of confusion and a lot of myths flying around around what it is, and I think… It’s funny. Even in our conversation before, we were talking like, yeah, we feel like we have a decent understanding, but there’s still a lot of confusion about what it actually is, let alone how it can actually help you. So, could you maybe explain a little bit to what actually is, in layman’s terms, what is Blockchain? And it’s not bitcoin, right? (laughs)

Yeah, that’s the first misconception we try to take off the table. Obviously bitcoin was the first iteration that we publicly knew about Blockchain from, right? So it’s built on top of a Blockchain. So you have the little b, which is the bitcoin, and the big B, which is the Blockchain. But the bitcoin Blockchain, there’s thousands of other Blockchains now. The two big distinctions are the private permissioned and the public Blockchains. So bitcoin is a public Blockchain. What we’re seeing enterprise use most frequently today is that private permissioned Blockchain.

So the concerns about bitcoin mining consuming so much energy, these private permissioned Blockchains don’t have that same energy consumption, because they’re not doing the same type of mining and hashing to create these blocks. So, to give an example from the bitcoin Blockchain, you have a block of data. It could be any kind of transactions. It could be pictures. It could be anything you’re putting on the bitcoin Blockchain. And you take it, and you create a hash of that block. So, it’s basically saying, all of this data equals this string of letters and numbers.

Okay, all right.

Then you take that, and you add it to the next block of information. So now that record of what happened over here is now connected to what’s happening here, and then I hash that total with a new hash, okay? So it’s, once again, the string of letters and numbers representing this block of information, that includes this block of information, and you just keep doing that.

And they build on top of each other subsequent, right.

So what’s really interesting is that this fits just how a manufacturing facility works, right? You’re receiving all this raw material. That raw material has internal work orders to be able to mix them together, produce a defined output product that ends up being what you’re selling to the consumer. But what you want to identify in your own internal supply chain is where waste is. You want to remove that waste by controlling all of those variables that are inside of that manufacturing or distribution facility. But in order to be able to control those variables once it leaves that facility, it needs a way to be able to permission the sharing of that data, and Blockchain is what enables that in these private Blockchains, where you have permission-based access so that trading partners, like suppliers to a manufacturer, can actually see the same order, in real time, being produced at the manufacturer’s location so that they know that there’s not going to be a delay at the shipping location, so that they know there’s not going to be a delay in their production cycle.

And that visibility upchain and downchain is what we’ve always striven to achieve inside of the four walls of the facility. But the visibility, the ability to calculate those sort of data points, we generate a lot of data inside of every manufacturing and production facility, but filtering through that to make informed information. Why did I collect that piece of information? It’s usually for someone else down the chain, and if they don’t call and ask for it, they’re unused. In a Blockchain-based environment, you can implement smart contracts that self-execute. So when a certain event takes place, it triggers the data to push to the next location.

So what’s a good example, like maybe a concrete example of a smart contract?

So, a smart contract in the logistics world of shipping a transaction from one party to another, a simple transaction, would require the party that owns, sorry, the party that own the goods and the party that they were selling the goods to, engaging with some third-party provider to be able to bring a truck and move that truck from there with the driver to that destination location. The visibility of what the manufacturer has produced inside of their four walls, as soon as they put that onto that truck, it’s basically gone.

Gone, yeah.

So now, it’s a hope and a prayer that it’s going to show up at your location, and if I don’t hear a complaint back from you, it’s going to just get a paper email, or paper mail copy of a signature sent back to me from the trucking company wanting to get payment, and that’s the first time that I know that it actually got delivered. In a Blockchain environment that has permissions, each of those parties would get access at each transition point. So when the truck picked it up from me, you would get an advance shipment notification that this is the driver and the piece of equipment that’s currently left my location and is on its way to you. And in the future world, the track and trace of that transaction, of GPS location, should and could be communicated to all parties through the supply chain, much like your Uber driver that’s on the way.

Exactly. And if I understand correctly, replicating that experience that you have as a consumer when you buy something from Amazon, or you ship something for whatever, FedEx or UPS, and just having that visibility and understanding that, okay, this is where it is, this is happening, and it’s making and then connecting into your systems. Is that a good…?

It’s a really interesting example that you give, because somebody like an Amazon or a FedEx or a UPS, they have closed-loop systems, where they have tired to take that control of what’s inside the four walls and say, “Well, if we controlled every one of the assets between here and there, then we can control all the data.” So those sort of systems, United States Postal Service as an additional example of that, they have their own pieces of equipment and their own employees that are moving it

In the place where Blockchain fits most is where there are marketplace participants that are going to engage with each other for a short period of time and then disengage. And when they disengage, they want to leave the historical breadcrumb trail of what their experience was, “I had a good experience with this guy, he did a super job,” so that everybody else down the chain can see that that’s a quality person to be able to work with, and that immutability and the collection of that granular level of data is certainly possible with today’s computer equipment, but the artificial intelligence world helps to unlock that data to be able to make more informed decisions in supply chain.

Great. That’s fantastic, especially since the traditional, from a logistics and a supply chain, I mean, that piece, as much as a manufacturer would probably love to have a closed loop system, that’s just impossible. (laughs)

I mean, you have too many trading partners.

Right, exactly.

And too many touchpoints, and too many intermediaries that are stepping in. I mean, a typical shipment gets moved 5.6 times by truck before it shows up at the destination, from raw material to finished goods.

Raw goods, all of it, yeah.

That’s an insane amount of touchpoints, but if we really look at it, it’s the same thing. You’ve got raw materials to manufacturer, manufacturer to value add, value add to distributor, distributor to end-user. And you can add a couple of pieces in there that can add additional value, but we still have a need, from a person/company that has goods to their customers, and the service providers along the way that are helping to be able to get it there should be transparent with their interoperability to enable the sort of visibility that the manufacturers have.

I just want to break in there, because the permissioned aspect of this allows for visibility to certain parties at certain times, not necessarily visibility to everything at all times.

Okay, all right, yeah.

So, the initial instigator of the Blockchain can determine how those smart contracts are written and where those permissions are granted. So there is visibility at certain points, but there’s also an ability to maintain. Because it’s private, you can maintain a certain sense of, “Oh, the competition’s not seeing my dirty laundry or my stuff.” (laughs) It’s when you get to the public chains where it really is out there, and then the security that you have is with encrypting data that only you hold the private key to.

It’s very similar to how an FTP box works with EDI transactions between current trading partners. When an existing warehouse has an order that’s coming in, they are typically getting an FTP, a file transfer protocol, of a file that’s telling them what the order is that’s coming down to them, and that digital approach has become pretty standard, but it’s also become a little bit bastardized. So, the standards of EDI have some customizable fields at the end, and usually, you end up with a trading partner where you define what those are, and then that’s your rhythm for communicating with them. But in a Blockchain environment, specifically like in supply chain and logistics, those standards haven’t ever existed before.

And a couple of years ago, organizations, one specific organization around supply chain, started to develop the standards for interoperability between these different platforms.

Having the ability to be able to have an immutable distributed ledger platform and having the rules so that they can interoperate together efficiently is two elements of timing that were required for this to be at a tipping point of adoption.

So I think two years ago, we started to hear about Blockchain and Blockchain and transportation, and, “Whoa, what is this, what do we do?” And there isn’t a quick answer to it, because it’s really a cultural change. It’s a change of saying, “Right now, I have full accountability inside of my warehouse and inside of my manufacturing, and when there’s somebody that makes a mistake, I can track it down to the person that picked the order on this day at this time in this aisle.” That’s Blockchain. It’s just creating that record of accountability so that everybody that touches it from the beginning to the end of that cycle has visibility to what took place.

So you said something interesting. In order to get that transparency, you mentioned it’s immutable. So if I were to break that down, it’s essentially, in layman’s terms, we have multiple copies of this. So if something gets deleted or edited over here, if I understand correctly, you have all these other copies that will say, “No, no, no, no, actually, that’s wrong,” and boom, now we can…

And that’s basically what a hash does, is it identifies so that each time a block is added to the chain of where a transaction takes place, it updates the other nodes of what the transformation is. And if any of those don’t have the right hash that says “update this record,” then it identifies that as being an exception. It says, “Wait a minute, we’ve got a breach in the security of our environment,” and we can correct for it before it becomes a breach.

An issue, yeah, that’s awesome.

One of the things that probably should be clarified is DLT stands for distributed ledger technology, not decentralized ledger technology.

Okay, all right. Very big difference, yeah.

So when you go to the public chain, that’s decentralized. When you have the private chain, that is distributed, like he was mentioning, with the multiple nodes, but not necessarily decentralized.

It’s controlled.

You still have oversight and control of one entity of those group of nodes, but they are distributed.

That makes sense. So, I’ve got, in my organization, in my plant, here’s our private Blockchain, and we can control permissions and all that stuff, versus the public, which is where a bitcoin would be, and everybody has access to that.

Can have access.

Or, can have access to it. Okay, all right.

So there’s actually a layer between those two, which is there’s permission-based private chain. And that is where you bring your trading partners in. Even your competitors.

Okay, you get access, you get access, you don’t.

And now you can say, “Everybody that’s in the blanket making business has access to all of the raw materials from everywhere so that we can all make better buying decisions and all make better transportation decisions.” It’s better for all of us to work together in this, but I don’t want to share who my customers are with you, and you don’t want to share your customers with me. So we will control based off of the agreement of these “coopetition” partners what the rules are of how we’re going to share this data effectively, the intent being that all boats rise with the layer of the lake. So if you get the layer of the lake to be able to come up with the information flow and the transparency, everybody does better.

That’s awesome. Okay, so, I have another question, then. So, I mean, this all sounds amazing, right? The rainbows and kisses. (laughs) It’s super easy, right?

Where’s your unicorns? (laughs)

Right? It’s amazing. It’s going to solve all the problems in the world. Not really. But those organizations that are kind of interested, who are actually rolling out with this now, and what does that look like from an organization that’s saying, “We want to kind of start dipping our toe in and moving in this direction”?

You mean like Walmart and Coca-Cola and those guys?

Yeah, yeah.

They are. We have, I guess the green chain is the most thrown out there implementation to help make sure that any greengrocers’ goods that could be contaminated with any kind of outbreak can be targeted by location and taken off the shelves.

Farm to table.

Boy, that’s a great use case, ’cause right now, isn’t there something?

There’s a lettuce recall going on right now.

A lettuce recall, yeah.

And it’s limited because of the fact that there’s more controls in place. This has gone on in the manufacturing world forever, of there being lot numbers and manufacturers dates to be able to serialize equipment and model numbers so that there are some data points.

But tracing in six seconds rather than six days.

Or six weeks. I mean, to try to touch all the data points along all my partners and get them to share that data around one transaction is a long time of phone calls and recordkeeping, and it’s just data. And if it’s organized and labeled and tagged correctly, then accessing that should be a real benefit for all those parties that contribute to that data source.

Absolutely.

Now, Coke is probably one of the biggest supply chains that has most recently come out, saying that they’re doing a Blockchain implementation with their supply chain. It’s not just the little guy, the cypherpunk, that’s doing Blockchain now. It really is the big enterprise players and all the big four with Deloitte and IBM. They’re all doing consulting into organizations around the world at different levels of success, and I hope that we’ve gotten past the POC stage, which is that proof of concept, like, “Okay, this actually does work for this business use case,” to actual rolling out and implementing Blockchain in the areas of business that it makes sense.

‘Cause there’s still places where you should just use an internal ledger; you don’t need Blockchain. But when that immutability is important, when that private permission to access is important, when you’re working with people that you don’t want to have to trust, and you just want to know that when my pallet hits their dock, payment hits my account, Blockchain can do that.

It’s a great use case! (laughs) I would like to know that. It’s interesting. Obviously, the industrial studies for the last better part of two and a half years, it’s been a lot around sales and marketing, and the digital transformation conversation is huge inside the manufacturing/industrial space, and it’s the same thing in sales and marketing, the same thing. But the common thread in this specific use case you were talking about relative to sales and marketing is really that visibility all the way across, even if you look from a sales to fulfillment standpoint, is really seeing that thread and the touchpoints and having visibility at all areas to be able to go back and say, “This drove X amount of sales,” or that, or this, and just having the data and the connections and that visibility is huge.

Those are key performance indicators that are driven by data points where you can average and identify outliers, and you can’t average and identify outliers if you don’t collect the data.

Exactly.

So the first step is to be able to build the infrastructure that enables the data collection to take place. A lot of the early Blockchain solutions, frankly, have been orchestrated, where there’s, “I want to show a working Blockchain to my management team, so I’m going to put these partners on the Blockchain and connect my very narrow path so that these parties can do this.” The natural progression of something even like bitcoin where it matures over time, it starts to be able to gain generalization, and generalization comes in and creates a truer marketplace of consumption of the new data, and that new data is what’s missing at the moment, because there’s a trust element that’s involved in being able to have those first participants sharing in an anonymized or non-threatening way, but there’s a trust factor, that they’ve got to jump on board and say, “I see the incremental benefit of being able to have competitors…”

The “coopetition.”

“The competitors and competition, so they can do better if they work together.” And I think we’re starting to see that because of these narrow things that have taken place, but the Gartner hype cycle of this puts this at, it’s hyped, it started to go down a little bit, but now you have true cases that people can look at and say, “Okay, so we’ve never had the bitcoin environment hacked, with the inability to be able to correct for the problem.” So, there’s a proof there, and now, what else can we apply that sort of methodology to that adds the value? And I just see supply chain as one of those that is an absolute natural.

We have tried for my entire career in supply chain to be able to create that transparency and record-keeping so that not only can I inspire employees based off of number of lines picked or accurate items received or number of shipments processed per day. Those are all data points that we already realize are valuable, but we have a limited ability to reward our partners that are outside of our four walls for their performance, because we have limited data. But if we open up the floodgates of that data like we have inside of our own four walls, it’s really an exciting time to be involved in the sensor deployment of information.

That’s awesome. That sounds super exciting. I think we’ve uncovered, we’ve unpacked a lot, and sure, we can probably go way deeper on this. (laughs) I know we just scratched the very top of the surface, and I really thank you and appreciate you for coming on just to share some of that, demystifying it a little bit, kind of sharing some more truths around what it is and, most importantly, what it’s not. So, if anyone would love to get involved or learn more about your organization, what’s the best way of doing that?

Yeah, absolutely. Blockchainchamber.org is our website, and we also have an initiative of the Chamber that is the Blockchainecosystem.io website. So, that’s a place that we intentionally built to help the community gather and connect and be organized into those 12 verticals where they can see who’s doing what where and connect, this “coopetition” we’re talking about, and actually be able to build better together, and be available for people coming and looking for Blockchain solutions. So, head to the Blockchainecosystem.io website, and obviously, we’d love to connect with you. If you’re here in Atlanta, we have an event this Thursday, and we have them on a monthly basis around the different verticals, and just love to have the community connect together and learn together.

Excellent. Well, Michael, Linda.

Thanks very much for your time.

Thank you so much for coming on.

We really appreciate it. It was awesome.

A pleasure, thanks.

Thanks.

Thank you. Oh, we’ll shake hands. Cool, so, all right. Really great episode of IndustrialSage. I hope you learned a lot. I certainly learned a lot. I think there’s a great word that I’m going to pull out of that. It’s “coopetition,” did I get that right? “Coopetition,” I think that’s great. You know, I think it’s interesting. The same thing we’ve talked about sales and marketing and that transformation that’s happening, obviously the same thing is happening inside your manufacturing plant, inside your supply chain. And I think it’s interesting to me, one of the things, some of the same exact challenges in terms of really that transparency and sort of opening up, doing things differently.

I mean, it’s kind of a scary thing to be able to say, “Hey, I’m going to share my data with you,” and I think that “coopetition,” did I get that right? Yeah, okay, good. I think it’s awesome. I also think that the ability for using Blockchain to be able to create more visibility, it’s absolutely, 100% where we’re going, we’re seeing that. That’s the whole point. That’s why you have access to data. And like Michael was talking about, start with collecting that data, and then we can start understanding it, breaking it down, looking at it, implementing solutions like Blockchain to be able to unlock that visibility, that transparency, and to really get, there’s a lot of data. We can make better decisions for your company, really, at the end of the day.

So anyways, thank you so much for watching this episode of IndustrialSage. Look forward to a lot of great new content coming down the pipe over the next several months. 2020’s going to be pretty amazing. I hope it’s going to be amazing for you as well. If you have any questions you’d like for us to answer on the show, you can reach out to us at industrialsage.com/questions, and that’s all I’ve got for you today. Thank you so much for watching or listening, if you’re on any of the podcast stations. You can catch us next week with another episode of IndustrialSage. I’m Danny. Thanks for listening/watching.

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Well good morning, and welcome to another episode of IndustrialSage. This is the Executive Series and today, I have a very special guest. I have Ed Brown, who is the President of Topper Industrial. Ed, thank you so much for joining me today on this episode of IndustrialSage.

Good morning, Danny, thank you for inviting me. I’m looking forward to this.

I’m looking forward to it as well. We were just chatting before we started, you’re saying it’s a very warm and balmy 20-ish degrees in Milwaukee. Is that right?

It is, and we got a little snow, but I know I’m jealous, we wish we were somewhere where it was warmer, but it’s a good place to live.

The Midwest is great, I love it up there, especially, there’s a lot of great winter sports and the summers are just absolutely beautiful up there. So for those who aren’t familiar with Topper, real quick, if you could just give me a quick, little synopsis of Topper Industrial, who you guys are, what you do and then we’ll dive into a little bit more about you.

Oh, no problem at all. As you mentioned, Topper Industrial is located in Sturtevant, Wisconsin. We’re about 15 miles south of Milwaukee. We’ve been in this location since we started the company in 1994. We started out, my background, I’m an engineer. Went to The University of Wisconsin, which I’m very proud of. We started out, as a young guy, I was really involved in welding and metal fabricating. So, I started a business that, we primarily built material handling racks. And what I mean by that, we would be welding up racks for Harley-Davidson, to ship engines from their assembly plant in Milwaukee to New York, Pennsylvania. We would build engine racks. It’s a structural, steel device that you would put a finished product on. Normally pretty durable and we would then ship that to various customers. Chrysler, in their earlier days, became a very big customer. They had a plant in Kenosha, Wisconsin, which has long been closed, but it was a huge stepping stone in that Chrysler had become a major customer for us and they have been ever since and they still are. There’s some things about, that later on, we can brag about, maybe in a little bit if we have time.

But, an interesting thing happened in 1999. I got a call from a Chrysler plant indicating they wanted to switch from fork truck delivery system to a cart delivery system. First time I’ve heard of it. When I got the call, I thought it was odd, I’d never heard of such a thing. But it was the first time I heard the term lean, which of course I’ve learned to embrace and I’m a big supporter of lean. We did do that project, Danny. It isn’t quite the system we have today, but in the process, it launched what Topper Industrial is today. We primarily today, design and build material handling delivery carts. In most cases, the delivery system consists of a tugger. We’re just starting to break into AGVs, we’ve done a few of those programs, where the carts make the delivery, but instead of a fork truck delivering one pallet of parts to replace parts in an assembly line; we now will pull five, six, seven carts. And in the process, they pick up empties. The primary, most common system is, a cart is filled with some parts, can be a motorcycle assembly line, could be a car assembly line, could be anything, or even a workstation. Well, we deliver the parts to the workstation in a cart, the operator works out of that cart. When the cart is empty, we replenish it with a new cart.

When you are looking at cart delivery, which is what it is today, it’s called fork truck free now. Cart delivery’s kind of lost, it’s been lost and the term now is fork truck free. And that’s not actually, truly accurate, but the reason is, fork trucks are inefficient, fork trucks are dangerous. I’m not sure if you or your audience know this but, every single day in the United States, 100 people are severely hurt by a fork truck, everyday. It’ll happen today, it’ll happen tomorrow. So, the primary goal from the safety side of it, is to keep the fork truck away from people. From a productivity and lean style, we like the delivery of the carts because it eliminates waste and you’re much more productive. I’m going to take a break because I feel like I’m rambling, Danny.

No, it’s all good.

Maybe we could, okay, so today Topper is a fairly good size cart manufacturer and designer. And we’ve built carts for everything under the sun, from rocket boosters to feathers and everything in between.

That is anything and everything in between. So, I kind of want to go back for a second. You mentioned you graduated from The University of Wisconsin, said you’re very proud of that. How did you jump into taking that entrepreneurial spirit? Did you start the business right then? What did that look like and how did you eventually go into starting your own company?

Well Danny, I’ve never had an opportunity to do this. I’m going to take advantage of you a little bit and brag about something that happened.

Please, yeah.

When I was a senior in high school, I was kind of a maverick. I was afraid of sciences and math and I took all shop courses. I had this wonderful teacher, his name was Greg Pecora, and he never got credit for this. He was my English teacher and I wasn’t going to pass English and get a diploma in high school. He made me a deal, he said, “If you get a part in the high school play, I’ll give you a passing grade.” Even though I didn’t do one single book report. And I lived up to the deal, I got the part. I actually didn’t think…I got my high school diploma because of this guy.

Sometime afterwards, a friend of mine was in the hospital. I had not gone to college, I was working as a car mechanic. I went to the hospital and Greg Pecora was there. He had, I think his appendix, I don’t remember what the symptoms were, but he really insisted I tried going to college. He had me take an ACT test, which I did horrible and I thought I still could never was capable of going to college. Well, after I got my ACT test, I showed it to him. He actually pulled some strings at The University of Whitewater, which is a local college that he got me to go to on a program, and of course when I got there, I was a different guy. I don’t sit in the back anymore, I sat in the front and I did well. And I transferred to Wisconsin, which is where I ultimately got, but there was a high school English teacher, and I never got time– and he died. And of course, I thanked him many times for helping me do that.

Well, when I got out of college, I was working for my next door neighbor. When I was a kid, about 10, 11 years old, he taught me how to weld. He had a big influence on my life, so I actually went to work for him. In the earlier days, our company, and we’re talking a long time ago, believe it or not, built television towers, which was the only product when I joined the company. I’m the guy who met with, then what was called, believe it or not, American Motors, which Chrysler bought and we started building racks for American Motors and Chrysler. We then merged with another company and we became a minority partner in that company. It did not work well, after 10 years we split up. But in that process, I had discovered that we had a niche for material handling devices. Today we do conveyors, and gravity conveyors, and carts and all kinds of things. So, we left that company and I started this company and it was in 1994. All I went after was the material handling related equipment. That’s kind of how I got where I am today. I’m going to take a break and see if you have any questions, if you want me to go in a different direction. But I want to thank you for letting me say that, because no one’s ever heard that.

Well, that’s sort of the point and the purpose of why we want to do this Executive Series a little bit more. Instead of just talking about business and here’s the objectives, here’s what we’re doing. Yeah, we’re going to get to that stuff, but take a very personal interest in the stories. I think it’s very interesting just to hear, that’s very interesting to me to see the massive influence that an English teacher had, a ripple effect. I think it helps to create context, to look around what you have built and how you’ve gotten there. I think it’s super interesting and I think our audience finds that very interesting as well. So, I want to kind of go back with this English teacher a little bit. What was it that made that impact? Was it pushing, saying, “Hey, listen, I’m going to push you in this direction and challenge you”? Do you hear his voice saying like, “Hey, we’re going to go into this company, let’s start another one”? What was that motivating force behind that?

That’s an interesting question because first of all, in his class, and I still have the characteristic, I’m the joker, I’m the one that tries to get everybody to laugh in the room. That characteristic has stayed with me my whole life. But, in a different direction than that, I tried to do an appositive, I was destructive and a troublemaker. But this guy just saw something and I don’t know how he did it, but he did it. And one of the interesting things is, when I got to Whitewater, my first year, my first semester, my resident assistant was an ex-Air Force guy and I was lucky because that guy taught me good study habits and notes and how to be effective in a classroom.

But just to brag a little bit about Mr. Pecora, I actually went to the high school advisor and I won’t say his name, doesn’t matter. After he saw the ACT test, he said, “Go back to being a car mechanic.” At the time, it was considered a good job at a new car dealership. But Pecora, he wouldn’t have it, so he actually knew the Dean of Admissions, got me in and my second semester, I got pretty good grades, all A’s. I was motivated, now I had found that, there’s a new person inside of me I didn’t know was there. I started mid-year, so it was the second Christmas. When I brought my grades home, of course I had to go see this guy. And he said, “Would you bring them to Horlick tomorrow?” And I said of course I would. And we went to see the teacher and he said, “Do you remember this guy?” And he said, “Sure.” And he showed him my grades and he said, “You told him he wasn’t smart enough to go to college.”

Pecora was kind of a really special guy and I know there’s lots of excellent, excellent teachers out there, but I happened to be in the right classroom with the right guy. And in addition to him pushing me to do this, it didn’t matter, it helped a lot that the girl I was dating at the time loved the idea of going to college. And my next door neighbor who had taught me how to weld, he was an engineer from Wisconsin and he was so excited about it. Actually my family didn’t take me to school, my next door neighbor did. He actually became my father-in-law; I married his daughter many years later.

That’s awesome!

So a number of things had to fall into place and believe me, that first semester, I was a pretty lonely guy and I thought about quitting a few times. His name was Robert Edstrom, I would call him up and say I want to come home and he’d say no, no, stay. I stuck it out of course, and after that first semester, then you knew that you were going to finish. But it took awhile to get into the groove, but the right people were there. But Pecora clearly is the guy who grabbed me by the neck and said, “You’ve got to do this, life’s too short. There’s so much you can do with it.” And of course I thank him a lot because I’m the first one in my, I have sisters and brothers, I’m the only one that got a high school diploma out of my family, let alone go to college. So it was kind of special.

Very special, very special, that’s awesome. That is awesome. So you started the company, you’ve said in ’94, and you’ve said you’ve done everything and anything in between. You mentioned rocket booster, carting for, all kinds of crazy, cool stuff. What are you doing these days, like your role in the organization?

Well, I didn’t want to correct you on this interview, but I’m no longer the President, I’ve become the CEO. I’ve taken over R&D, pretty much, still function as the Chief Engineer. We have half a dozen really good designers here today, but one thing that’s kind of fun, in that some of the designers haven’t had a lot of math and understanding engineering. One of the fun things that I get to do is we actually have classes now, where I can explain engineering, in terms of statics, dynamics, strength of material and that if they build something, we analyze it for stability and strength to make sure that what we build is strong enough and will never fail.

From the standpoint of just being a businessman, the company’s in a good position, it’s profitable, it’s stable. We don’t have debt and over the last 10 years, my son who’s Ryan Brown, who’s running the company, has just completely redone the company from the ground up. And what I mean by that is, we have the best equipment that you can imagine. When I started out, we had an ironworker. Today, we have CNC lathes, CNC mills, man saws, lasers, plasma. About a week ago, we ordered a brand new, it’s called a tube laser; most expensive machine we’ve ever bought. But what you can do with that is, you can build the best equipment possible.

I tried to build a reputation and I think we have. We may not be the cheapest cart in the world, or our solutions aren’t the cheapest, but we like to think they’re the best and the most durable. Most everything we build gets a five year warranty. However, most of it doesn’t need attention even at that point. It’s just well-designed and well-built. So we try to pride ourselves on that and that’s made it a lot easier with having the right equipment. It’s kind of nice, even welders today, have gone from MIG to fusion, and they’re expensive, but they weld excellent and they have no splatter or debris. So it makes the finished product look that much nicer.

That’s awesome, that’s great to hear some of that transition and just that focus on quality. There’s been a lot of change in the industry over the last, I mean, there’s a tremendous amount. I know that you’ve seen a lot from ’94 to now. I think from a material handling standpoint, with the whole, we’ll call it the Amazon effect, with needing to get things done faster. Lean manufacturing is a big piece with having much tighter supply chain needs. What are the big challenges that you’re seeing in the industry right now?

Wow, there’s actually quite a few. Believe it or not, I still, we’ve been building carts and converting to fork truck free delivery for almost 20 years, well actually 20 years, 21. I’m still surprised, and I can’t fake up any names, I don’t want to give anybody trouble, how you go to a major, major, major manufacturer, somebody who’s been in business for 100 years, and they have multiple plants in the United States, how they are unaware – I don’t want to say ignorant, but unaware – of the benefits and the cost savings and the safety improvements that they could make by implementing equipment that usually has a payback of, very, very quick, a year or two years at the most.

There are many companies out there that are cutting edge, Danny, don’t get me wrong. But, I want to give an example. I can’t say a name and if I hadn’t really thought of it, I would have asked their permission, but we’re building carts right now for a company that builds diapers. And they build a lot of diapers, millions and millions a day. And the system that many plants in the United States, I started working on this program three years ago, they have a really, really bright guy who sees the benefits of a cart delivery system versus a fork truck. It took us three years to get management, and this guy makes a lot of money, it’s not like it’s an issue. Well, it turns out, we’ve got the program going now, we did initial tests in one department in one factory, and the results were so fantastic, the company immediately released the program for the entire plant and then I got a call that said, “How quick can we do all the plants?” And it went from them finally seeing the light.

I want to give you an example of something we did just a few months ago, it’s a light manufacturer. They build a lot of the lights that are on streets and stuff. We put in a cart delivery system, and later on, I’ll get into that if you want to hear about it, but what they did in the process, believe it or not, this plant runs seven days a week, 24 hours a day. And in the beginning, before they put in cart delivery and their fork trucks, they had 30 people, 30 material handlers on each shift, all three shifts. They also had, I don’t remember the real numbers, but on fork trucks, but I know that the savings were excessive. We eliminated over 44 trucks

Wow.

And we eliminated, there were only 13 people on each shift, doing material handling, using the cart system versus the fork truck. So, their return on investment was extremely fast and of course, and then that was only a third of the plant. We still have two more parts to do and we’ve got orders to do the rest of their plant. And this is another company, that one’s actually pretty close to us, it’s in Wisconsin and I think we went back and forth for two to three years quoting and looking at designs. There’s also a, not a bad, but there is a pushback. I probably, personally, have converted over 100 plants from fork truck delivery to cart delivery and I can tell you almost every single one, when you walk in, employees of a company are angry and against, they’re very negative toward the carts because they think they’re going to make their jobs harder. Well, I’ll tell you this, every single case, we’ve walked away winners and in most cases, I get a hug when I leave.

There’s still a mentality out there that cart delivery isn’t as good as it is and it’s a shame because fork trucks are inefficient, they’re expensive, they’re heavy, they’re dangerous and carts are efficient, carts are lean. When I learned what lean was, and the fact that carts could be such a big part of reducing waste and continuous improvement, just from the standpoint, when you have a fork truck and a stationary station at a work stall, if you want to change the package or part presentation, it’s a major deal. In our case, change the cart. It’s simple, it’s flexible and it’s actually so much easier. That’s one of the things that we fight daily. You would think that the world would know.

(laughs) Yeah.

We recently developed a cart for, I’ll even say it, it’s Toyota. Of course, a leader in lean, major, major leader in lean. And fortunate to be a supplier to them and get involved and we developed the new barrel cart. You may think that, in addition, you can imagine how difficult a 55-gallon drum of anything. I don’t care what’s in that drum. They’re five, 600 pounds and they get exchanged in some places constantly. And instead of having all that equipment, we put the barrel on the cart and you do a cart exchange; and it’s a phenomenal improvement. That’s just the tip of the iceberg, what you can do with them.

Yeah, so you mentioned something earlier on. You said you guys are starting to move into the AGV world a little bit. Talk to me a little bit about that. That’s obviously robotics and AGVs, automation is a very hot topic right now. What are you guys doing in that space to address some of those needs that are coming up?

I think we’re on top of it pretty strongly. In the last month, we did a system for a company that uses an AGV, a well-known, very reliable piece of equipment that we’ve done many projects with. And we build power roller carts and each cart can be a single or a dual position cart. We actually put a PLG with a bunch of sensors on it. So the AGV primarily does the tracking and the stop and starting; that’s based on its computer. The stop and starting is based on, after the cart is positioned, the computer on our cart will talk to the computer on the work stall and say, “Either give me a load or take a load.”

I’m really proud of the fact that, we just delivered 16 carts, they’re dual stationed, so that, what it basically does, when it pulls up, these are all, in this application, the cart pulls up to a machine and takes two loads off finished product, the AGV takes it to a shipping dock, or a fork truck will lift it off the cart and puts it on a semi. Very, very successful program and we’re pleased that when we put it in in November, not one single glitch. Of course, we had a bunch of really good electrical engineers setting up their routes and debugging and programming the computers, that they all are working properly. But, very, very happy with the success. We’ve been involved with maybe, a half a dozen AVG manufacturers, and we’ve done a little work for all of them. It’s a fairly expensive installation and it takes the right company.

Sometimes, I’ve heard it, and I’m not sure, Danny, if this is true, this one it was in that they, to make that system pay for itself, they need to have a company that works seven days a week, 24 hours a day, which this one does. I don’t think it ever shuts down, man, even Christmas they’re going. They make so much styrofoam products, it’s unimaginable what we consume in this country, how big we are. We’re seeing more and more of that, but it’s primarily major companies with high volume production requirements.

That makes sense, yeah. As we look to wrap up the interview here, what does the future look like for Topper? It’s relative to products, or innovations?

I hope my interpretation and my children, one thing I’d like to highlight a little bit is that, this company was a really good company. It became a great company, I have five children who joined the company. When they were young kids, I used to have to wonder if they’d even want to work with me. But they all, one got a degree in business, one got one in marketing, one got an engineering. So we got a really neat package, in that, Ryan taking over the day-to-day operation and I get to do the R&D. It’s been a really nice combination and the kids are, in my opinion, very smart and they really do a good job. We are continuing, I’m not sure, Danny, right at now, but, I don’t know, maybe 20, 30 patents that we like to think we’re very innovative and creative and committed to doing a super job. I can’t tell you that we’ve never done a job that the customer wasn’t happy, but we didn’t leave until they were. So that, I think we have a good reputation of always finishing it.

Our company has a philosophy, and we’re pretty good at this, we don’t like to grow more than 20, 25% a year. A few years ago, we doubled in over a year, and it was very difficult financially, it was very difficult to find people, it was difficult to get equipment. Believe it or not, you can do a lot more business and make less money, than if you control things and you’re really keeping an eye on things. So we see that, we’ve actually bought the land next to our existing building. We’re ready to put up a new facility and it’s based on the fact that, I don’t know, the last 10 years, it’s worked well for us. By controlling the growth, we control the quality, we control the delivery schedule, and of course, everything’s much better on a system where you have that. Business has not been a problem, we have too much. I’m trying not to, all indicators are, even during the recession, from an economic standpoint, I don’t see a downturn for us.

By becoming, I don’t know, less dependent on financing with banks and stuff, we’ve actually been through a recession like everybody else did and it was tough. We diversified because we were primarily automotive during that. Automotive is still a big part of this company, but it’s not the major part anymore. We’ve found out that there’s a number of companies, and I don’t want to say too much, who are more recession-proof, and we made sure that we are suppliers to them. Because I can’t control what’s going to happen to the economy, but I want to make sure that I’ve covered all the bases in that. I can’t say we’re recession-proof, I don’t know if that’s possible, but I think we’re very close. We keep cash on hand. Who would ever think, in your lifetime, that General Motors and Chrysler would go bankrupt? I didn’t.

Yeah.

The bank that I’m with, that I started with when I started, the company is still with, said that would never happen. Well, even the bank never thought General Motors and Chrysler would go bankrupt and at that time, they were my two biggest customers; they still are today. We’re very proud of our relationship with all the automotive people. One of the things they get to brag about, a little bit like a Chrysler, or a Kia, they only will use our equipment because it’s tested and it’s real reliable and it’s a good design. And we have many, many customers that will only use Topper equipment because they’ve tried others and it’s failed and we go the extra mile, in terms of designing and testing to make sure our equipment’s made out of the proper metals and built right and all that stuff.

Great, well, it sounds like you guys have, there’s a lot of growth for you, hopefully managed growth, making sure that it’s, yeah, because growing too fast sometimes has some challenges with it. But, sounds like you guys are really poised, set up for the future, looks like you guys have had just a great, several, 20 plus years doing this. It sounds like you guys have got some fabulous products. I love hearing about what you guys are doing now, with the AGVs and answering that challenge, and helping to really educate your customers on how to use these solutions and how your solutions are really helping to tell that sustainability story, really help from a safety aspect. It sounds like you guys are doing fantastic.

Well, we feel pretty good where we are. Don’t think we take this for granted. We work hard, we’re very fortunate to have a great group of salespeople who are hardworking guys. They’re all from the business and I’m proud of every one of them. There was a time when I was the only salesman for this company and that was one of the harder jobs to give up, believe it or not. I enjoyed, immensely, all my relationships with all the companies that we’ve built, the hundreds and hundreds over the years. And that I maintained friendships a lot of them to this day. Yeah, it’s been a real fun ride. I hope the kids enjoy it as much as I have. I’m getting ready to take it a little bit easier, they tell me. (laughs)

I really enjoy being here, I love the challenge. You asked me earlier, what’s it like to get up in the morning? I usually have a list, I do every night, what I want to do the next day. I’m kind of a get up and go, there’s a lot going on in the world, a lot of opportunities. And I actually feel bad that I’m getting up in the years. I wish I had another 50 to do this because I’m not sure where they’re going to end up with all of it, but we still enjoy a lot, it’s fun.

That’s awesome, that’s awesome. Well, Ed, I really thank you for joining me today on IndustrialSage. If anybody would like to learn more about Topper, what’s the best way, what’s your website?

www.topperindustrial.com. Please contact us about anything. We love a challenge. That’s interesting, I want to bring one thing up. You’d think from a cart standpoint, we’ve yet to see anything we can’t put on a cart, and as we mentioned earlier, I can say it, we build carts for rocket boosters for SpaceX out in California.

That’s pretty cool.

Kind of fun to be a part of all these things.

Oh yeah.

That cavemen, who invented the wheel, I’d like to meet him because without wheels, I wouldn’t have a business. I appreciate you taking time, letting us tell you a little bit about Topper, we’re proud of it.

I really appreciate it. Thank you for sharing your story, too. It was great to hear the background.

Well, it’s, uh… but here I am, and you don’t forget your roots, you know?

Exactly. Well, thank you so much.

Okay, Danny, take care.

All right.

Bye bye.

Bye. All right, so there you go. Another great episode of IndustrialSage, round up our Executive Series. This is a new format that we’re going to be rolling out with, when we talk to our different executives, just to hear, really, their stories. And to hear the background of their career paths. I just love hearing family owned business, hearing the story how everyone’s involved. I thought it was actually really neat that Ed’s kids are coming in, running the business and have backgrounds in marketing, engineering. It sounds like what they’re doing is super innovative. I love the story and the aspect of his high school English teacher, who, obviously made a really big, pivotal impact.

So anyways, I hope that you enjoyed this series. We’re going to be rolling out more of these as 2020 rolls on and if you have any questions, we’d love to answer them for you on the show. You can reach out to us at IndustrialSage.com/questions and if you are listening on any of the podcast stations, we’d love a review. Share the love on social media and I’ll be back next week with another episode of IndustrialSage. Thanks for watching.

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Okay, so let’s jump into today’s episode! I have Picavi here, I have Johanna Bellenberg, who is the director of marketing and communications. Johanna, thank you so much for joining me today on IndustrialSage.

Thanks for having me.

Excellent, well we’re excited to have you here, so this is a… you guys are a German company, so you’re joining me from Germany this morning, is that correct?

It’s actually the evening in Germany right now, so.

Well evening in Germany, morning here, yeah. That’s… we were just talking about, it’s a little chilly there this morning, or this evening, over there, so, we’ll get the timezone thing down. But for those who aren’t familiar with Picavi, just key us in, let us know a little bit about who you guys are, and what you do.

Okay so, as you said, we’re a German company and we developed a solution for intralogistics which incorporates smart glasses. So it’s actually called pick by vision, or a lot of people might know it by vision picking, so we use the smart glasses to guide the worker visually through the warehouse, and bring a lot of benefits with it.

Absolutely. So how long has the company been around for, when did you guys start?

So it was founded in 2013, and since the end of 2015 the product launched on the market, and since then we’ve been selling, and have right now over 70 customers worldwide, and recently, last year, in February, we started our Picavi US Inc in the states as well.

Great, so can you walk me through a little but of the background of how and why Picavi started?

Sure. So our founder was always in the logistics sector, so before Picavi he was at a different company that sold pick to light solutions, and one day he was like, “Well that should be easier somehow, we have so many new products, and digitization is rolling in, so there must be something else.” So he, I think he traveled the world where the main countries that are involved in this technology for a couple of weeks, and then he came across the Google Glass, and he was like, “Okay, we are ready.” So this was actually how the idea was born, that he combined the VR benefits of pick to light, which is initially the visual guidance, with the flexibility of, for example, pick by voice system, and put them into the glasses, now we have a display to go, and this is how everything started back in the day.

Yeah, well it wasn’t too long ago… So you guys have, there is obviously a lot of change, a lot of transformation that’s happening, and obviously technology’s a huge part of it. We’re seeing a lot of movement thanks to a lot of ecommerce, we’ll talk the big Amazonification, if you will, moving, so it’s creating obviously a bit of a strain on getting things better, faster, cheaper, and really tightening your supply chain. How are you guys differentiated between other service providers, other technologies that are in your space that are in pick to light, or using Google Glass, these different types of technologies?

So what our main focus actually is is the human being, the person who has to get the job done. I mean we all have these high demands: I want it fast, and I want all the information, it has to be all perfect. In the end, somebody in the warehouse has to put that together, and we are actually focusing on that person, and how we can support him or her in this great busy, dynamic, and fast moving world of logistics, to actually keep the complexity of the whole process in the background, and just make it a very nice and easy working experience?

Okay, so could you maybe walk through a little bit, like how do you guys think from a product design, from a development standpoint on how, keeping the worker in mind, how have you kind of reverse-engineered if you will, your products and your solutions?

So I would say that the main interesting point would be that if we look at the natural mechanism of transferring information from the outside world into ourselves, we actually process 80% of the daily information via the optical nerve. So this is one very important fact to keep in mind when we talk about smart glasses, because let me just show you, we have a little display right here, it’s comparable to a heads up display in a car, so you have all the information you need at any minute, any second, right at the edge of your field of view.

So, compared to other systems like, let’s talk about a pick by voice system, where somebody is constantly talking to you for nine hours straight: there are studies that the productivity in the first two hours is just great, but after that it just decreases, and we are trying to figure out how to use actually this natural mechanism, and leverage it for productivity, for error reduction, and also quality, which are essentially the main points in a logistics operation. So we kind of have a display to go, which lets me be very flexible in my movements, without having to concentrate on a voice constantly, or have to do a movement when I have an arm terminal, so it’s very focused also on my ergonomics.

Yeah, that makes sense. That’s really interesting, so you said, I think the stat was somewhere around 80%, you said, is through our eyes, we’re basically consuming information that way. So, does it work in the sense, you said it’s got like a heads up display in… so is it picking up, are you able to scan the different products, or it’s picking up and just from a like, almost from an augmented reality type thing, where you say, “Hey the product that we need to get is over there,” and you’re able to look around and it’s able to help to identify that? Versus a pick to light, where you’ve got to have lights all over the place, and that area actually lights up, is that more or less how it works?

More or less. So when we talk about pick by vision, or vision picking, we talk about assisted reality, which is comparable to a heads up display in a car, so it gives you additional information you need to fulfill a task, other than virtual reality, where you’re completely cut off, or augmented reality, where the computer generated reality melds with your real reality. So we are essentially giving additional information, but the two realities do make sense without each other, so they’re not melded.

And what we do is, actually we don’t see that we really need real augmented reality in a warehouse, because the human being, the worker still wants to work a little bit themselves, and doesn’t want to be handed to every task they have to do. And we are concentrating a lot on pictures and icons, we always say they’re kind of like the universal language. We have customers that actually have like 30 different nations in their warehouse, so language is always a big topic, but we are trying to solve every issue, and provide the best solution we can.

Interesting, so as far as a rollout period, so we’re talking about how we’re able to integrate this with an ERP or WMS, what does that look like, just from an obviously… I know that’s kind of, I’m sure the answer could be, depending on the number of SKUs and everything can vastly vary, but just from a, just an integration standpoint, what does that look like?

Okay, so a lot of people are always scared, like, “Oh my God, we have to involve IT, and it’s going to be a huge project.” But we have actually very smart interfacing technologies, and have customers that went from kickoff to go live in about five to seven weeks.

Wow.

So we can be fairly quick. Of course the customer has to do a part as well, but the main hard work is on our side because we have to create the interface to do the system.

Well, it sounds like a pretty cool technology. What are the different ranges, I know you’ve got some products and some things behind you, is it all just Google Glass or do you have a wider range of products and solutions?

Of course we test all the smart glasses that are on the market, but as I said in the beginning, we have a strong focus on the human being, and also the ergonomics, and Google Glass as of today is still the most ergonomic device that is out there. We will be happy if there are other wearable smart glasses coming out, but we always look on the ergonomics of the product.

Okay, I have actually have a really just simple question, and I was curious about this. Obviously, you wear glasses. How does it work with somebody that is in the environment there that already wears glasses for the, just to see normally? How does that work?

Well, you know, they just have to work blind.

Okay, all right, that works.

No, I’m just kidding! Of course we have solutions for all kinds of scenarios. If people wear prescription lenses or have to wear safety lenses, for example. So I can just try to show it, we have a little button right here, and we just– let me, I have to turn it around. We disconnect the smart part of the smart glasses, and then there is an additional frame that has the same connection, and then we just clip it onto there, and put the individual prescription in there, and they’re good to go.

Perfect, so it’s very easy to adapt. Okay, excellent, so obviously there’s a lot going on in the industry, and there’s a rapid change as we’ve talked about. You guys are addressing that, certainly looking at it from the perspective of the worker and the workforce. What are some of the challenges that you are seeing in the industry, particularly as we roll out in 2020 from your standpoint?

Well there’s all sorts of different challenges. For example, in Europe we are a little ahead of the states, so over here we actually have already the rollout scenarios where people have like 80 to, I don’t know, 150 glasses in the warehouse. We are experiencing this with the US as well, but only with a small number of customers. So there’s a lot of customers that are still looking in other technologies. But of course, the whole topic of digitization, where is it leading, is a big challenge. And then the topics where buzzwords that come with it, like IT security. Or in Germany for example, we have very strong unions, so they are always part of the discussion. Of course we have a lot of material for all the concerns, but I think a worldwide challenge that we can help solve is actually the lack of skilled workers.

So, we have customers, in particular one I just visited a couple of months ago, and he actually has people that are in retirement coming back, working with the smart glasses because he needs more skilled workers, but today they are very hard to find. So, he brings them back to solve the problem, but they’re actually working with the smart glasses as well, and what we see is that we can help solve the problem because the product is so easy to work with, that we only have training times from 15 to 30 minutes, and the workers are ready to go.

And also, a very big challenge is the buzzword big data. We have a lot of sensors in the smart glasses as well, because essentially it is a computer, but gathering all the data doesn’t help us if we don’t understand it. So we just developed a solution, it’s called the Picavi Cockpit, that makes big data into smart data. So it has different features. For example, analytics which helps me understand where more potential in my warehouse could be, or how the wifi might be an issue for my productiveness. So there are a lot of products we are developing to address all those challenges in today’s and tomorrow’s world, actually.

Oh that’s fantastic, so that sounds like a great solution to be able to optimize and just kind of figure out best practices and some better efficiencies. One last question that I’ve got is, just from, you mentioned earlier on that, obviously US was a little slow to adopt some of these technologies: whereas Europe is a lot more advanced. From an adoption standpoint in Europe, kind of a blanket statement, what would you say that is just in terms of the average warehousing fulfillment, like, what percentage rate do you think that they are using this technology, relative to where they could be?

That’s a tough question. I would say in 2020, we will see a very fast development in actually rolling out the technology even more. We have customers that have rolled out the technology over multiple locations, not only one warehouse. But of course, in every scenario they can do more, so for 2020 we’re hoping that the technology will become a standard, we have actually customers like DB Schenker, which is a very big profile, and they have the goal to set pick by vision as the new standard in picking, so we are very thrilled to see that development. But the US is not as far behind as you might think. We have actually a very big customer too that just ordered another 80 glasses, so they will be, I think, the biggest warehouse in the world using pick by vision.

Oh wow, that’s crazy. So I’m just trying to get a sense of what the landscape looks like just in terms of, in Europe but obviously relative to the US. Over the next five years are you seeing that the adoption is going to be, we’re going to be seeing this all over the place, and it’s going to be an industry standard, versus, “Hey this is a nice-to-have.”

No I would say it will become a standard because we have seen so many great success stories with the product, and I’m not saying that because I’m in marketing. But we actually have customers that share their numbers with us, and we are thrilled that the technology is being accepted as well as it is. And maybe the US might even overtake Europe this year, because the mentality is very different. So in Germany we always say, “Okay let’s try this and once it’s good, we’ll see if we roll it out.” But in the US they tested a number of glasses for like two months, and they were like, “Okay, let’s do this.”

“Okay, let’s go.”

Overall. So the US is faster in actually rolling out, but yeah, I would say this year is going to be great for all of us.

Well that’s awesome! That sounds super exciting. I love hearing about the technology, and the solutions, how you got really thinking about the worker and the ergonomics, and just the designing… obviously the big data piece was very cool, the rollout, and how you guys are providing more value than just around that physical product. So, I really appreciate the time that you’ve spent with us here on IndustrialSage, if anybody would like to learn more about your products, I’m assuming go to your website. Is there any other, anything particular, is it picavi.com, what’s the address?

It’s picavi.com.

Perfect.

Yeah, pretty easy. But you also have the chance to check out the product at MODEX. We’ll be there in March. You can work around our little warehouse and see yourself.

All right, well that sounds good. Johanna, thank you very much, and I’ve really enjoyed it.

Yeah me too, thanks again.

All right, thank you. Okay, all right, well great episode, I loved really, this is super exciting. I remember when Google Glass came out several years ago, and it was like the thing, and then it kind of went away, and now you’re seeing it come back with all these different applications. And like Johanna was talking about, this could really be the breakout year in 2020, and I thought it was interesting that she was saying that it’s possible that the US could actually outpace and outgrow Europe as far as adoption.

So, definitely something to look out for from a technology standpoint, and be sure to be, if it’s not something that you… if you guys’d like to learn more about it, go check it out, go to picavi.com. And we’ll have information and links in the show notes where you can check it out a little bit further.

So, thank you for watching this episode of IndustrialSage, we’ll be back next week with another episode here at IndustrialSage. I’m Danny, and I’m signing off.

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I have Mr. Cory Flemings here from JBT to join us on the first Executive Series under IndustrialSage. Cory, thank you so much for joining me today.

Pleasure to be here, thanks very much.

Well, so for those who aren’t familiar with JBT, who are you guys? What do you guys do?

Who is JBT. That’s a very good question, especially within the realm of material handling. JBT is actually named after a guy named John Bean who was an industrial fruit tree sprayer back in the 1880s. We go way back. And he partnered up with a guy in 1921, I think, who was an almond manufacturer and they created this company called The Food Machinery Company, which many of us have now, if you say the name FMC, go, “Oh, I know FMC.”

So FMC came through two world wars. We’ve built landing craft in World War II. We built the MM13 fighting vehicle in Vietnam. We did the Bradley fighting vehicle. We got into oil and gas. In fact, the fruit tree sprayer became sprayers for de-icing fluid on aircraft after we started flying jets after World War II. You’ll still see JBT sprayers out there when you’re getting sprayed to take off in the wintertime. You’ll still see us doing that kind of work.

So then JBT got its name when the FMC gas guys and the technology guys broke off and long story, but right around the turn of the millennium they took the food machinery companies, the AGV division, and then our aviation assets that does everything around commercial airlines and loaders and unloaders and de-icers and so forth, generators, and they spun that part of the company off back to its original founder’s name, John Bean. So we’re known as JBT, John Bean Technologies. And that’s where we came from.

That makes a lot of sense. So that’s a lot, you’re touching a lot of different industries. What are kind of the main industries that you guys focus in?

So corporate JBT, we have really two big divisions. Food division, which is subdivided into protein and liquid foods. So we freeze half of the world’s frozen food. Our machines do, at least. We just do a lot in canning and frozen foods and in juicing. I think we squeeze 50% of the world’s orange juice globally. And then, there’s the aero tech division. So Jetway, when you walk onto the airplane, that jet bridge, the Jetway brand is actually a JBT brand.

That’s super cool, yeah.

Then if you look down you see the loaders and things that you look out the window of the airplane, a lot of that equipment is actually JBT. So we have aero tech as another division of our company, and the AGV division is part of the food tech division. So the food tech division is all kinds of industrial machines for food processing, commercial food processing. The AGV division, then… Ironically, we don’t do a lot in food: we do a lot more in manufacturing in automotive and things like that. So it’s kind of interesting that we’re part of the food technology outfit. But nonetheless, we do a lot in beverage. In the automatic guided vehicle world, any time you’re dealing with pallet of heavy loads, full pallet sized units, that’s the kind of equipment that we have to work with.

So in the world out there right now there are really two subsets of the automation world for automatic movement. You’ve got the AMR community, you hear a lot about, and the AGV community. And there’s a large perception that the AGV community’s kind of getting old-fashioned and so forth. AMRs are autonomous mobile robots that use a different type of navigation technology, but the vehicles generally speaking are small. They’re carrying 60 pound loads, tote size. Whereas AGVs are carrying full 2,200 pound pallets. The vehicles themselves will weigh 12,000 pounds. So obvious safety implication of moving 10,000 pounds through a rack system, you don’t want to run into things or certainly not people ’cause it will really leave a mark.

Yeah.

Whereas the smaller AMRs? It can hit somebody and stop and it’ll body check you, but it’s not going to leave a mark so to speak. But there’s certain blending of those two communities and as the world moves forward there’s a lot of change that’s in store for us all as we move forward in the future.

Yeah, it sounds like, so it’s a lot of Star Wars stuff that we’re seeing, right?

There really is a lot of that going on. There’s a lot of 3D vision we’re getting out of the automotive industry, right? Several years ago we were thinking about autonomous cars that were using 3D vision. A lot of that 3D vision is being imported into our industry that we can put onto vehicles, whether they be small AMR vehicles or larger AGV vehicles. There’s a lot of that new 3D vision going on. There’s radar, there’s all kinds of different… sonar technologies… How do we find obstacles in 3D space to avoid them and figure out a path to get to point A to point B the quickest? It’s really interesting.

The other thing that I see happening in the market right now is, for many many years we had forklift companies out there in the market. They’re also trying to figure out, how much longer will I be able to continue to do manual forklifts? So they’re all jumping into the autonomous movement as well. Whether you’re talking about the European companies or some of the American companies here. So our company JBT is also getting involved in working with the OEM fork truck suppliers in automating their equipment as well. So there’s a lot of automation. We’re just starting to see the tip of the iceberg that’s coming.

Yeah, absolutely. I think there’s several reasons for that. It’s a super exciting time in this space as you look at that evolution of how we buy. And you can call it “the Amazon effect” or what have you: really logistics and supply chain having… there’s a huge critical need from that, from the ability of where maybe five or 10 years ago you would traditionally send goods and your products to a distribution facility, then it would go to another large distribution facility to a retail outlet, like a Walmart, but now we’re having these areas where we’re going more direct and it’s creating this, maybe it’s a little bit more stress on the system, if you will.

It’s a lot more stress. And you called it the Amazon effect. I’m thinking of Jeff Goldblum in the first movie where he’s looking in the rear view mirror and the dinosaur’s chasing him down. “Must go faster!”

Yeah, exactly!

And that’s really the way it is. There’s so much pressure, the Amazon effect of “It’s got to be there tomorrow.” I mean 10 years ago, you go through a warehouse they could deliver in two days or three days. Anymore and it’s got to be there within perhaps hours or certainly tomorrow and it does create a lot more stress on the supply chain.

Exactly, so it’s not even just the finished goods out the door, it’s the whole supply, the whole supply chain infrastructure. I can’t talk, wow. I love that visual. I think we’re going to steal that now. We’re going to have Jeff Goldblum with the, that’s awesome. That’s perfect-

Was it “Jurassic Park?”

“Jurassic Park”, yeah yeah!

“Must go faster!”

Yeah, exactly. So how are you guys sort of addressing that? Obviously AGVs and AMRs really have, obviously there’s a lot of efficiencies you can pick up. How are you guys, what are some concrete examples or solutions that you guys have been able to solve challenges for customers to be able to bring in that efficiency?

Wow, that’s a pretty wide open question. Many people would I guess would be surprised to find out that many of the hospitals that they go to actually have behind the walls are automatic guided vehicles running behind the scenes.

Really, I didn’t know that.

For example, Ohio State University, they have, I think, 64 vehicles at the facility and it’s really an intralogistics system of the hospital. You’ve got food to deliver, you’ve got dirty laundry to take out, you’ve got trash to take out, you’ve got surgical cabinets that need to move, supplies come in from the supply room that need to be distributed through the hospital. There’s a logistics system that’s completely automated in that hospital that actually has elevators that goes from the basement all the way to the 23rd floor. Greenville, South Carolina, has a hospital that’s completely automated.

And that’s all behind the scenes kind of thing?

Right.

So like the corridors?

The patients don’t even know that they’re there.

Okay, interesting.

What we’re starting to look at now is moving with AMR assistance to move into patient rooms using these kinds of AMR vehicles as well. So there’s the logistic system and then they have more specialized or efficient ways to move material through a hospital if it’s just a heart pump that needs to go from the equipment room to room 324, there’s no sense in sending a whole barge up there. Those are some interesting applications we’ve seen. They’re all over the automotive market. It goes without saying. Most recently like drywall.

You think about any factory that has manufacturing you can’t turn off. So you start building or generating gypsum, liquid gypsum to make gypsum board, you don’t want to turn that machine off. Injection molding plastic, glass manufacturing, metal manufacturing, those kinds of industries where the machine just runs whether you’re ready for it to come out or not, it’s coming out. We’ve got vehicles we’ve built now for the gypsum industry that will handle 10,000 pound loads and those big stacks that you see at Home Depot or Lowes we’re picking those things up and maneuvering them around in the manufacturing plant, and we can even load trucks with those things. So we’re seeing some very interesting new applications we’re coming out with.

I’ve got an interesting question. As far as adopting this new technology and sort of rolling it out, what does that look like for an organization that typically says, we’ve got a, we want to roll this solution out in our warehouse. This is a very sort of, I know you can probably answer this 300 different ways, but what’s the typical rollout type period for something like this?

That’s a good question. In fact, I was just talking through this yesterday. How long does it take from the time the light bulb goes on to the time we can get a purchase order? Yesterday we kind of went through, an average process can be about seven months. “Wow, seven months, why does it take so long?”

It starts with a rough order of magnitude. One of our sales people will come, they’ll walk through the facility, what do you want to do, da da da da da, and the first question we’re trying to answer collectively with the customer is is there even a project here. Can we get a rough order of magnitude of how many vehicles we would need, how much it’s going to cost to justify through return on investment there’s a project here, or there isn’t a project here? If it’s a seven year return on investment, you know, nice meeting you let’s part friends and move on.

The next step then would be to go to a budgetary process. We’ll say okay, let’s validate the rough order of magnitude budget by running it through some engineering, coming up with a concept, a budget, a layout, answering most of the technical questions and it’s going to be plus or minus 10 or 15%, it’s going to cost this much. Does that still meet the return on investment requirements that we have?

At the end of the day, I often say we don’t sell equipment we sell investments. The investment that we’re going to provide to a customer is going to be competing at the CFO office with some guy who wants to paint the ceilings white ’cause it’s going to make it more efficient. And the return on that is 24 months, instead of 25 months or something, so they’ll paint the ceiling instead.

So what we’re trying to do is just constantly keep an eye on the economic picture as we’re going through the process. The customer meanwhile, if they’re a publicly traded company, they’ve got to have three bids minimum, so they’re going to grind through the sausage manufacturing process of getting other customers to bid and trying to compare three differently solutions and that process takes some time, and finally you get to the point where they say we think we want to go with you, now we need a firm budget.

Then we have to go back in and really nail the number and really get it down, and that whole process, site visits that the customer might want to make visiting our headquarters, that can take somewhere around seven months on an average basis. Can we do it faster? Certainly, but for planning purposes think about seven months is what it takes from the start to the time when you’re ready to pull the trigger and then it’s going to take another six to nine months to get the system built and installed.

So it’s a year and a half process to the time the light bulb goes on to actually get it installed and running. Something to keep in mind while you as an executive are thinking through that process sometimes we get frustrated on the supplier side because it just takes so long for customers to make the decision. Six or seven months can go by and we look at that and say you could be saving $2.5 million a month.

You could have started that at this.

Right.

Yeah.

And it’s a $14 million delay.

Yeah, yeah.

So that’s kind of a rough picture.

It’s great, it’s interesting. Especially as we see more of these solutions really and as the industry makes the “digital transformation,” the big powerful words. As we are moving into this space just to get an idea of that. Now, one other question I’ve got for you is I know we’ve got MODEX that’s coming up I think you guys are going to be there. We’re going to be there. What have you guys got coming down the pipe that you’re going to be… Anything you can reveal and share with us beforehand?

We’re starting our second freezer facility and what’s rather new in the marketplace is a vehicle that will actually work in minus 20 degrees Centigrade temperatures. Think about how much it costs your labor, those of you who have these freezers know how much you have to pay for labor to go work in a freezer all day. So these vehicles live in the freezer and they work 24 hours a day, seven days a week. They get charged by getting charged through the wall. The chargers can be outside the freezer. They plug up on something that comes through the wall and the vehicle stays in the freezer and keeps working. Revolutionary really, it’s been something the freezer companies have been asking for a long time and we’re starting our second facility now in the freezer market.

That’s awesome, ’cause maybe I’ve been to one or two freezers and you’ve got minutes. You cannot be in there for super long.

Exactly.

I think I’m sure there’s some sort of OSHA regulations and different things in there, so it’s fairly regulated. It sounds like an amazing solution where you guys can really increase that efficiency. I imagine the ROI on that has got to be.

The cost efficiency certainly right because if your people can’t be in there as long, it takes that many more minutes for them to do the job and it costs that much more. So it’s a real sweet spot for AGVs to work.

That’s awesome. So, all right, I’ve got another little question. I didn’t ask you this beforehand, so we’ll see. With technology, particularly with AGVs and AMRs, there’s this whole, in robotics and AI, and technology in general, from a workforce standpoint, there’s a whole question and debate about are these taking people’s jobs. “Are they replacing us?” You must come across that.

Sure.

In sales prospects. How do you address that?

Yes. They are taking people’s jobs. Yes, but then the age-old question is where are the buggy whip manufacturers these days? There aren’t any buggy whip manufacturers any more.

But the problem that we all have to deal with is if company A and company A are competing, let’s just pick two off the top of my head, Maybelline and Revlon are in competition with one another. They both produce the same thing. If one gets an advantage in terms of efficiency through the supply chain, the other’s going to take it on the chops.

I remember a very interesting time, it was 10 years ago, I heard a VP from Procter & Gamble actually, he stood up and he said, “I came to my job and I asked this question. How long does it take from the time we buy, let’s just take Pert Shampoo. How long does it take from the time we buy the bottles and the paint and the raw materials and the pallets and the plastic and the stuff that we need to the time we get our money back from Walmart?” So the cash to cash cycle. Asked the studio audience. And I thought, probably six weeks or something like that. Now P&G, I hope this isn’t still the case today, but it was 43 weeks. And that’s not really the point. “The real point is,” he said, “What percent of our attention do you think, our corporate attention was fixed upon the process of the work in process?” So making the stuff. “90% of our attention was on the manufacturing process. We’re automating the manufacturing and so forth, right. And how long do you think that process took? 90 minutes.”

So in this 43 week period of time, the supply chain I’ll say, 90% of the company’s attention was focused on the 90 minutes that it took to actually make the material. That was just really revealed to me the supply chain is where, so you have two companies manufacturing the same thing and they could be any two companies doing any two commodity products that you go to the Walmart and you see on the shelf. Company A, company B? The one who gets more efficient, from 43 weeks down to 22 weeks, their costs can go down or their profit is going to go up. One or the other. They’re going to put the other guy out of business. So to your question, what do you do then if your competition puts in AGVs and they reduce their labor and they get more efficient? What’s going to happen to you if you don’t?

So the whole idea of competitiveness is really what’s at stake. If we can figure out a way for people to take orders at McDonald’s by using a kiosk instead of paying people to do that, it’s happening, it’s a reality. It’s business getting more efficient. There’s really no other way to say that. Now the question then is, how do companies deal with if we’re going to reduce the head count by putting a system in, what’s the most humanitarian way to do that? Is it to just tell them “Oh, by the way Monday you don’t have a job.” Or is it to let the natural attrition of a company as people retire take those assets away and not replace them. That’s what many companies do.

That and retrain all kinds of different solutions around there. I was just curious about that. You always get different answers, so I like asking… asking the question.

I don’t want to try and dodge the issue.

No, it’s a real issue.

It is.

It’s a real thing, and it’s funny that you bring up the whole McDonald’s thing ’cause that’s exactly what I was thinking in my head is that that was a couple of years ago with the whole minimum wage piece and it was like, okay well, we’ve got, we’re kind of hitting that nexus of technology. At the end of the day, it’s a business right? I mean there’s obviously, you want to make sure that you’re balanced, of course, but at the end of the day it’s like, you mentioned the competition and the technology piece is there, it’s driving innovation and if we don’t have that, your competition’s really going to drive that innovation and really that’s what drives innovation and growth and how – was it John Bean Technologies? – went from a fruit sprayer to de-icing planes.

International conglomerate.

Yeah.

Yeah, exactly how they did it.

That’s– Love the innovation. I love what you guys are doing. It sounds super cool with, I love the whole, the new freezer products that you’re rolling out with. That sounds like an amazing solution that I can see a lot of companies benefiting from. That’s just kind checking the boxes on a lot of things there. So anything else, any parting words?

Look at the way we ship freight today. If you open up the back of any given over the road freight company’s doors it looks like McLaughlin’s closet because they’re trying to maximum the cube. I’ll just suggest that in 10 years or less the way we do that will be completely different because what if you could automate your cross dock? What if you when you pulled into your depot you didn’t have men on forklifts. AGVs were just swapping loads from truck to truck and the trucks took off again. That’s another area that we see a lot of potential.

Absolutely.

And it goes on. The opportunities to do those kinds of things given the smarter and smarter computers and faster processing power just gets more and more lucrative we see in the future.

Yeah, case in point, didn’t Google a couple weeks ago talk about how they cracked quantum computing or something to that effect that they had actually like solved an algorithm or something with that.

And that’s part of the frustrating thing about being a human being today, right? Is if you’re in business, it’s a full-time job just trying to keep up with what’s going on around us. There’s so much change that’s so fast. It’s very difficult to just keep up.

Yep, it is, but it’s also exciting.

That’s right.

There’s so many amazing things. So Cory, I really appreciate your time coming by the IndustrialSage studios and kind of chatting a little bit. If anybody would like to learn a little bit more about your solutions, and it sounds like you’ve got some really cool stuff, where’s the best way to learn more about those or get in contact with you?

Our website, JBTC.com (John Bean Technology).

Excellent.

And we have a whole section there on automatic guided vehicles and give us a call, we’d love to take care of your needs.

Excellent, Cory, thank you so much. I really appreciate it.

My pleasure.

All right, so that concludes our first Executive Series interview here with IndustrialSage. I loved it, I hope you enjoyed it as well. Learned a lot about it. We’re going to be doing more of these as the year rolls out. Where we’re going to take a deep dive and sit down with some executives and learn about what they’re doing, the innovations they’re bringing to market, hear their stories and hopefully, you can learn a little bit about what they’re doing maybe that’s in your industry or not, and really take some of these things at heart and see how you might be able to apply it in your business.

I just loved hearing how JBT has a rich history from 1883 now to 2020 as we move into this new decade. All the amazing innovations from a chemical fruit sprayer using it as de-icing. We’re talking about AGVs and AMRs and robots and all kinds of crazy cool “Star Wars” stuff and it’s amazing where we’re going as the industry just continues to change.

So that’s all I’ve got for you today. Thank you so much for watching or listening. Listen, if you are on any of the podcasts stations we’d love a review. Hey, share some love with us on our social media channels. If you’re not a subscriber, you need to subscribe at industrialSage.com. That’s all I’ve got for you today. Thanks so much for watching. I’ll be back next week with another episode of IndustrialSage.

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