IndustrialSage

– Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Kai Beckhaus who is the president of MCJ Supply Chain Solutions all the way down in Houston, Texas. Kai, thank you so much for joining me again. This is your second time on.

– Thanks for having me, Danny. Good to see you again.

– Great seeing you. So obviously a lot of things have changed since the last time that we spoke. And I think we’re going to get into that in this episode, but before we do that, for those who maybe did not watch the first episode and don’t know who Kai is or MCJ, tell us who you are and what you do.

– Sure. Yeah, my name is Kai Beckhaus. I’ve worked in the material handling industry basically all of my work life and was an executive at Jungheinrich which is one of the two big material handling equipment companies that are the parent organization of MCJ Supply Chain Solutions now. Our mission is to bring Jungheinrich automated forklifts, trucks, AGVs, and all of the automation technology they have to the North American market US, Canada, and Mexico. And the second material handling partner that is a joint venture partner here for us is Mitsubishi Logisnext Americas. And with that setup, we have a good basement for all of the spare parts, the mechanical service, so that we can focus really on the system, the software integration and bringing those material handling automation projects to life to support our customers with their supply chains.

– Fantastic. Last time we spoke—and I’m trying to remember. I believe it was April or May—

– Right at the start of the pandemic, if I recall correctly. We were just going into lockdowns and the economy’s down.

– So approximately five years ago; at least it feels like it was five years ago. So March-ish or April. Obviously a lot has changed. When we spoke, at that point there was a lot of unknown. There’s still a lot of unknowns I feel like, but there were certainly significantly more unknowns at that point. Now we know a few things. A lot of pivots have been made. A lot of things have happened. How has MCJ changed since that time?

– Obviously we spoke at the beginning of the pandemic, so there hasn’t been a lot of change. All of us had to, customers and ourselves, really adapt to this pandemic and how to behave in it. It has been a long time since the last pandemic occurred, so none of us had that experience in our work lives where we had to cater for employee safety, obviously, and go into an economic downturn for the first months. Then picking back up and seeing a lot more automation demand because people realized automation is the thing that helps even when workers can’t come in when there is lockdowns. Supply chain resilience is very important to get all of the essential goods out to everyone.

– Perfect. You mentioned obviously that you’ve had a lot of changes. You mentioned there’s new products being rolled out. You mentioned that there is an increased, higher demand. What does the future look like for you? How does it alter your future?

– I believe when you look at different industries, the automation, when there is big manufacturing like car manufacturing, robots have been in that area for very long. There have also been AGVs since the 60s, but the degree of how many automation projects are deployed is just so much smaller than in other spaces. And I think this pandemic was an accelerator for that. There’s a little over, let’s say, 1.1, 1.2 million forklifts sold every year over the world, and that ratio of automation, whether it’s AMRs or AGVs is just so slow right now and small right now. So it’s going to grow significantly, and the pandemic was a boost to that. So I would say it is a permanent thing that automation will be more important. And a lot of clients whenever they have a bigger fleet of forklifts to buy will consider, is this something where automation makes even more sense than investing in operator equipment where we need a human workforce to run these fleets through the supply chain processes that are required.

So I think that’s going to be a permanent change for the whole industry and adapting to integrating those solutions to existing environments. That is one part where with the logistics interface, the middleware software that we utilize and it’s becoming more and more important to have quick implementation times, seamless integration into the system because you don’t want different islands that don’t work with each other. Also the collaborative factor, very important whether it’s AMR or AGV, this is typically a lot of human interaction, especially when you have free-ranging AGVs there. So it’s going to be very important to have all of that collaborativeness in the products, and that’s going to continue. So we’ll see a lot of development and growth in the material handling, automation sector over the next years to come.

– Absolutely, that makes a lot of sense. Now relative to MCJ, what were some of the pivots that you had to make to adjust? This could be pivots that you had to make internally from a way of working as well to maybe pivots to business model or products?

– Well internally, obviously, travel was restricted in the first pandemic. So what we did is typically we would in a sales project and really walk the facility with the client to do two things: to really check all of the environments or constraints, see where is special things we need to cater an AGV solution and also to consult, what’s the best processes? Maybe the customer has something in mind, and with their expertise walking that site, we recommend, we might want to add that, or let’s be careful here. So all of that had to go virtual. It worked out well. We were a little nervous at the beginning. Hey, will we catch everything that we would used to? But our clients have been really great. They are working with us. We’re driving the same amount of time, four hours on site, and just walking the site on a Zoom or Teams call, and that really worked out well. So that’s an adjustment where the new technology supported us a lot. With all of these products, Zoom and Teams… the pandemic, you could say, came right at the correct time. Imagine this would have happened 10 or 20 years ago where all of this digital technology that we use, video conferences and so on, wouldn’t have been that far developed as they are now.

– So doing these virtual site inspections, if you will, where you said you’re doing them through Zoom or Teams, were people walking through with an iPhone or something saying here’s this and here’s that, and you were able to replicate that by doing that.

– Correct, correct. We had a clear layout where we discussed and we could talk. There was really a good dialog on that so that we said, okay, let’s focus on that. Can you please zoom in a little bit here? Go closer to that. Describe that process to us, all of the handover interaction points so that we make sure we deliver the same perfectly customized solution that fits that automation demand of the client as we would have done with an onsite visit.

– That’s obviously a big change and a big challenge from a sales perspective. Do you anticipate, is that going to remain? Obviously virtual experiences don’t 100% replicate something that’s done in person. But in some cases, we find that it’s a little bit more efficient. Reduce travel time and whatnot. Are you seeing or expecting that that may be something that you’ll keep or go back or a mix of the two?

– I think it will be, as with the internal workflows, likely it’s going to be a hybrid mode. I think a lot of business interactions, B2B, understand that it might not be that efficient to jump on a plane, have a full day or even two-day trip for a two-hour meeting. So I think a lot of those will be kept on a video conference where it’s a professional setup and you can discuss topics, clear out some contract language, let’s say, things like that. But the longer meetings when it comes to a site survey, when it comes to the implementation for being onsite and really teaching in-person rather than remote, all of those I think will resume to normal. It’s always good to have that personal relationship as well. To my experience it has always been a lot easier to do the very good and deep connection even on a virtual call once you have met prior to that in person at least once. So when you know a person, then it’s very good to reconnect on Teams and Zoom, but establishing new business merely via video conference can be a challenge. There’s a lot of areas where this works too, but I think it will be a hybrid that there is some travel to meet in person and then follow-ups, and especially those shorter meetings being diverted to having video conferences.

– Yeah, I agree. I think we’re seeing that a lot across the board as well. Now you mentioned, too, how you had some new products that you had developed. Were these in response to the pandemic, or is it something that you already had on the roadmap?

– Yes and no. It’s really both. We had a few facelifts to our products. The stacker and also the tugger model, as a response to the pandemic, it was also the enhancement of auto-hitching and unhitching so that it’s even more fluid process there when you pull tuggers to seamlessly connect the trains that they carry and unhitch as well. In general on the roadmap we had also to go to the biggest form of AGVs that we have in our portfolio which is the automatic VNA truck, very narrow aisle, high-density storage, and that area is one area where it’s really important to go for automation when you want to have a high throughput, 24/7 operation very often in that area and having this storage capacity at the highest. And a lot of customers that opt to investigate into that solution really see an AGV VNA application as an alternative to an ASR, automatic storage and retrieval system. So that is something which we had on the roadmap to add and bring into the market. Now working on the first project here, so that’s a good addition to the AGV portfolio to really automate the full process, full material handling of clients and being able to cater to all of that demand.

– Absolutely. Well it sounds like it certainly helped to expedite things a little bit more to be able to bring those in there. And it sounds like those features from a product standpoint really are more permanent.

– Correct, absolutely. And the good thing is, a lot of customers really want to investigate automation and what a learning for us was to give the customers the flexibility. So let me give that example in which we’re back to that VNA. The Jungheinrich product portfolio is designed that it’s the same truck whether it’s completely manually operated, whether you go halfway with the automation and go with the semi-automation where there’s still an operator on board, but all of that driving from the truck is automated already. So it’s just giving full-throttle speed, and the truck stops at the correct destination.

And then the third level which can be also extended on the existing manual equipment is the full automation then, and that gives the ease so that clients say, okay, I want to start. I have manual trucks. I want to go with the semi-automation first, and in half a year once we come out of the pandemic, we have everything sorted, I definitely want to be prepared for the next run, so I’ll upgrade to full automation then. And that is something where we see this interaction, collaborativeness, that also an AGV might be operated in times. Clients really like to see the ability to hop on the vehicle and drive it manually there too. So all of that flexibility I think is even more important now, being prepared. You don’t know what the times are going to be. Are we going to go into an inflation now, some of these economists say. So people want to be flexible, and an AGV solution that can also cater for that is very important to really adapt to whatever requirements our clients have.

– Yeah, that makes a lot of sense, as you mentioned, sort of future-proofing. It sounds like you’re able to give people a stair-stepped approach. I really like the flexibility piece because we’re hearing a lot of stories of a lot of companies having to switch up their supply chains and the way that you might import goods, whether it’s raw or finished. All that was changing. So with your existing infrastructure there, if it’s more permanent, that was a little bit more challenging versus saying, hey, we really needed something that was more an AGV here, but now we need to go a little bit more manual for the moment, and then we can switch. That sounds like a really great solution to bring adaptability and flexibility. Certainly as you mentioned for the future, who the heck knows? Hopefully we don’t go through something like this again. But inflation and all these great, wonderful things that nobody has any idea what’s actually coming down the pike.

– Correct, correct. And I think it’s the same for the workforce. Flexibility is really important for yourself as well. It’s a lot different now to manage a business. You need to be flexible, be able to react fast, and I think we all proved that at the beginning of the pandemic. Everyone had to install new protocols of how to deal with this and now change it. Also for the hybrid work mode, I think a lot of employees, that’s something that will change. Every company is looking at having more flexibility. I’m not a fan of the extreme, so I would not say 100% home office, we work remotely, is really good for a company. But also it’s not being 100% in the office. It’s really, what’s best for the day? Is there interaction? Is there workshops? Is there brainstorming? That just works better in person, but when there is really individual work, everyone can be concentrated and can save the commutes to any office. So I think that is something that will definitely stay from the pandemic that there is more flexibility offered by companies but also demanded by the workforce.

– Sure, yeah, absolutely. We’re definitely seeing that right now. One of the things, kind of a fun question I like asking is, if you had a magic wand—I’m giving you a magic wand right now—what are one of the challenges in the industry that you would want to see solved or taken advantage of—you could flip it and say, hey, there’s an opportunity. What would that be? And one caveat to your answer: it can’t be, I wish Covid would go away or whatever.

– The next crisis is going to come, so we have to cater for that. Good question, Danny. Let me think. I think one thing that I would really wish with a magic wand to change is an openness on the client side. I think a lot of customers or material handling equipment users are just used to, they have forklift fleets. At some of those it would be really a perfect use case for automation. But they just don’t consider automation. I think to some people out there, automation is still something—we talked about it earlier—the car manufacturing OEMs, whatever, so really those robotic arms manufacturing cars. But automation has advanced in so many areas, so that we have a higher pace of replacing manually forklifts with automation by just talking about it. And I think this consultative approach, a lot of clients value that. And the second thing that goes with that is, often it is advisable for clients to really be open and just say, hey, I have this operation manually. What would you recommend? Do you offer recommendations for automation? How would that look like?

But instead some people ask, I have five forklifts of Type A, so what is your replacement of Type A automated version? Maybe Type B would even be better for that use case in the automatic version. So this openness to being consulted, but raising that thought, yes, automation might help me in my situation, and I’ll enquire about it, and I’m open to talk about it. I think that is something that would help the users, all of these supply chain operations out there as well as vendors as MCJ and Jungheinrich brand here that we represent about our competitors as well to really see more of that interest in the automation and adapting to that and talking about it because there is a lot of demand and a lot of potential for our industry out there as the ratio, when you compare more normal forklift trucks to AGVs is just so small. It’s around a percent or two at max I would say when you look at the worldwide ratios there.

– Absolutely. Well great answer to that question, if only we could be more open to these solutions and say hey, this is a viable solution to solve a lot of challenges that we see, I see, you see and being able to facilitate those discussions and look at how these solutions in your specific use case are viable. So yeah, great answer. My last question is another fun one I like. What are you doing as a leader to really stay at the top of your game leading your organization? You said you’re a little bit of a startup here in the US. What are you doing?

– That’s a good question. I think it comes back to this flexibility we have talked about. To stay flexible, it’s important to have discussions. I would say two things really as an answer. The one thing is obviously I want to read things. I like to read books from other businesspersons. Last thing I read was from Tilman Fertitta who is owner of the local Houston Rockets basketball team here and also a lot of restaurants and so on, so that is a book a little bit more from the B2C side, but a lot of good ideas he mentioned there, so I enjoyed reading that as well as just, was a weekly newspaper. I like to stay informed on how businesses develop in Europe as well, so I read one European Newsweek. They have Business Newsweek as well. But even more importantly than reading is to me really the connections and talking to other people and having an open mind to really get feedback and ask for advice.

I think that is something that changed in our generation, Danny, to maybe the CEO generation that is retiring now where it is less the CEO needs to be the strong person that never asks anyone for advice. It would be a weakness, and I think more in our generation it is, you have peer networks. You have mentoring relationships a lot more. I was fortunate to have really good bosses throughout my career and even in the position now with a board of managers and family and friends to really discuss certain business topics and get ideas and adapt those to really see what’s the best fit for me and get ideas and think about the right strategic implementations for your own situation, their own business at this point in time. And then also paying it forward and supporting younger folks with being a mentor there. So I think that is something where we are in a really good setup these days with a lot of networks and maybe social media and video conferencing. They have helped a lot too. It’s a different kind of networking than it used to be in the generation of managers that is retiring now is my personal belief there.

– Yeah, I love it. Reading, love it. I have to check out the book that you were talking about to read that. But then also, I love how you mentioned that you ask advice. That is a big shift from maybe the outgoing CEOs that have been established. You’re right. I think that would have been perceived or was traditionally perceived as a weakness versus saying hey, let’s look and see. Maybe there’s some great ideas that somebody sitting in the corner that is introverted and have some amazing idea or something that pops up. I didn’t even see that. Somebody who’s going to be a little bit more closed, and you engage and open. I love it.

– And the good thing is, you don’t have to take all of it. There is advice I like to listen to everything. It doesn’t mean you adapt everything. You still think about it and can really cherry-pick for yourself. But all of those ideas and from discussions, I think that’s a very good way to really get ideas as to say some persons that would not raise their voice if not asked. I think that’s very, very important to keep in sync and keep up to date, learn a lot from others and driving business forward. The world will remain flexible. Flexibility will be very important in the workspace, but also especially for those people managing those companies. So I think that’s—hopefully, I totally agree to you, we don’t get another pandemic anytime soon. That was enough, too real for all of us. But the next challenge will be around the corner, and there’s so many things like cyber security that has been a topic now which, ten years ago that was a totally different level. So there’s many different areas where it’s very important to remain flexible and learn and adapt to be able to be prepared. And when certain situations occur, being empowered to react quickly and thoroughly.

– Absolutely. Well Kai, listen. I’ve really enjoyed our conversation. We’ve unpacked a lot of different things. I’ve loved hearing your feedback, hearing your answers to some of these questions and learning about how MCJ has pivoted, what you’ve learned, different things that are going to stay permanent. I like this wholesale hybrid model going—we think, yeah we got some virtual, but then in-person’s going to come back and just solving challenges in the industry and what you see going forward. I really appreciate your insights, and I know that every one of our subscribers are going to love it as well. So for those who want to learn more about you guys can go to mcj.team. Is that correct? Did I get that right?

– Correct, that’s our URL where we have all of the product portfolio and a link to the Jungheinrich brand of automation equipment that we represent and give an overview of what we do.

– Perfect. Well Kai, again thanks so much for your time.

– Thanks, Danny.

– Maybe we’ll do this next year. We’ll just see—

– I’d love to come back. Sure, thanks.

– …what is happening because I’m sure a lot’s going to happen over the next year. And there’ll be all kinds of things. Thanks again.

– Thank you too.

– Alright, well that wraps up today’s IndustrialSage Executive Series with Kai Beckhaus who is the president of MCJ Supply Chain Solutions. You can go to mcj.team to go check them out. Thank you for watching or listening. Listen, if you are not subscribed, go to IndustrialSage.com if you’re watching this on social media or listening and you’re not on our channel right now. Go to our website, and you need to subscribe because you’re missing out on great content like what you just heard here from Kai. So you can learn from other professionals in the industry, see what they’re doing and learn. So thank you for watching. Thank you for listening. And I’ll be back next week with another episode on IndustrialSage.

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– Well hello and welcome to today’s Executive Series on IndustrialSage. I am joined by John Joyce who is the global marketing director at Brennan Industries. John, thank you so much for joining me today on the Executive Series.

– Glad to be here, Danny. Thanks for having me.

– Well John, I’m excited to have you again for the second time because we spoke—gosh, I can’t remember when now. It’s been a minute. It was a while ago. It was before this crazy thing called Covid happened, so I imagine things have changed. We talked a lot about marketing last time, some tactics and different things that you guys were doing, and that was pretty cool. Today, before we get into today’s topic and discussion, for those who aren’t familiar with Brennan, if you could just give me a high-level on who you guys are and what you do.

– Sure. Brennan Industries is a manufacturer of hydraulic components, specifically hydraulic fittings and adapters but also some accessory components. And we are a multi-national company, so we manufacture those things in the US, in Canada, in the UK, and in Asia and have a worldwide distribution network as well.

– Okay, that’s great. Since we last spoke, and again, it’s been a minute, how have things changed over there for you guys?

– Yeah, so I think the same way things have changed for a lot of businesses is an increasing reliance on remote, technologies that enable remote, remote management and leadership, and also other technologies that enable remote sales and a shift away from a traditional sales model which is still super popular in the world of manufacturing. It’s kind of like an old-school industrial world, shifting away from that model towards a more social selling and marketing-heavy. Marketing’s doing more lifting, I think, than it used to do in the past because of the inability of people to meet as easily and freely as they used to in the past.

– Yeah, so it’s definitely made things quite a bit of a challenge. Obviously there’s been a lot of changes. You mentioned trying to reach customer, obviously, is kind of a big one. How has it really altered your future? Some of these things are, maybe you can say a blip on the radar, temporary. But what do you think those things are that will remain permanent?

– Well I think actually a lot of the changes that have happened aren’t going to roll back. I don’t think things are going to roll back to the way they were before on most of the levels. We talked about increasing reliance on marketing. That was one of the changes and moving away from the face-to-face sales. That’s going to continue. I also think the importance of data and the immediate access to data through systems, kind of like ecommerce but streamlining that whole concept of direct-connect, direct-sharing of data has just gotten more and more important because it’s eliminating the human element which, we’ve been on a trajectory for that for forever, from really switching from face-to-face business to the telephone to the fax to the email to ecommerce. But Covid just pushed it all the way to the edge of almost touchless as much as possible. And I don’t think that’s going to go back, I think because we were going that way already. And not only in commerce, but then you also have that in leadership and management. Building and training and managing your team has also been shoved entirely over into the virtual space.

So we’ve spent a lot of time developing training materials, building infrastructure for remote leadership and remote team management. And all of those things have improved the company, so I don’t see them just vanishing. I think all those changes are permanent. But it’s been—another topic is logistics. Logistics has been a nightmare since Covid, and hopefully some of that will change because it’s actually been so—the pricing and the availability of things and the ability to move things around has been horrible, and there’s been a lot of scrambling in that area. But again, having a multi-national footprint, having the ability to manufacture your parts in multiple geographies and move them around gives you a lot of opportunities for moving them around differently. That’s even helped through the logistical challenges. So I think all those challenges are going to stick, or those improvements.

– Yeah, absolutely. Well, certainly. Obviously, there’s a lot of, with the cons come the pros. I’m curious; beforehand, was Brennan fairly virtual? What did the makeup look like?

– No, not very virtual. The marketing department’s actually one of the most—sales and marketing are one of the most virtual. A lot of the sales guys are already scattered all over the place, and they report virtually. Then the marketing team, just due to the nature of marketing and the people who do it, you tend to get a lot of people who have worked as freelancers or are used to that kind of, having equipment and set up at home remote work. It actually works well for remote because everything’s digital, all the assets. Our team became more remote during this time, but Brennan as a whole I think hasn’t been very remote at all. That has been kind of a cultural challenge for Brennan, let’s just say. We’ve embraced it, but it’s also not been super easy.

– Well yeah, and that seems to be a similar and familiar story with a lot of manufacturers. It is a cultural challenge. It’s a mind shift. Paradigm shift, really, but then you also have a whole other element. Obviously if you were a manufacturer and you are manufacturing things, there’s obviously elements that are, you can’t do virtually. But there’s hybrids, and there’s ways of being able to make that happen. I know that’s been difficult. What about trade shows and things like that? Was that something that Brennan took—did you guys do those before a lot? What does that look like?

– In 2019 I think we did 19 or 20 shows. Some of them huge, and some of them quite small. In the last couple of years, we’ve done next to zero. I think just this year, we’ve done a couple. But even then there’s been a lot of resistance in wanting to do the shows which has been interesting. The people holding the shows really want to get the shows geared back up, but there’s a bit of a resistance of, eh, we’re not so sure we want to do that or anybody’s going to come. Or if the performance of the show is half of what it normally is, is it going to be worth it? But we have experimented and done three or four. I think there’s four on the schedule for this year. But I think it’s still questionable whether those shows are worth it yet again because of, everybody’s in the same boat. The nice thing is, everybody’s going through this, if that’s nice. It’s not like we’re the only ones going through these challenges. Your competitors are going through them. Your customers are going through it. So we’re all in this together, and I think we’ve all stepped back and said, okay, how necessary is some of this stuff? And it gives you the opportunity to rethink things like, maybe you’ve been doing them every year for years, or every two years for forever and you’re like, eh, do we really need to keep doing that? Or is this really providing value? I think that’s a plus side to the challenges again.

– Sure, yeah. That makes a lot of sense. If I heard you correctly, I know you said you have some on the schedule. But have you already attended some so far? How have those been? I’m just curious. I’ve been hearing different things.

– Yeah, the general reaction has been underwhelming. People come back; I’ve heard extremely underwhelming things like, that was horrible to eh, wasn’t the greatest. We have one that’s still coming up this year, the last one for this year, and I’m hoping that that proves to be a little better because the first ones were earlier in the year. As things have progressed this year I think it’s confusing because there’s, is it getting better? Is it not getting better? Is it getting better? So I’m hoping it is getting better and that this show coming up in a few weeks will be good. So far they’ve been pretty underwhelming.

– Yeah, it’s interesting. We’ll see what happens with that. From what we’ve heard, very similar experiences is that just the attendance that you thought was going to be a lot higher than it actually was. And I’m sure that there’s several different reasons for that. Certainly if they’re international shows versus more domestic. There’s a lot at play certainly going forward in the fall as right now as the whole variant stuff in the US anyways is kind of going nuts. I’m really curious about some of these big ones that are going to be rolling up here in the next four to six weeks, what’s going to happen, if they will keep going, if they won’t. Certainly the attendance has got to be hampered, but who knows? It’s anyone’s guess. I kind of hope, personally, that we’re going to get back, better, and that we can take that variable off the table. Then we’ll see what’s left. You may have companies that say, we’re out of this game, or what. I’m very curious to see what’s going to happen there. I think it’s anyone’s guess.

– Yeah, speaking frankly, I’ve always had a skeptical view towards most of the events, especially the bigger ones that cost a million dollars, basically, to participate at the scale that we need to participate. It’s like, are these really worth it? Are they really producing? Or is there some better way to do it? And I do think not having them hasn’t—I don’t feel like it’s been a major blow, like oh, wow, we missed 20 shows times two years. That’s 40 shows, and wow, you could really feel that. Honestly, it hasn’t been that. It has been pretty fine. So it just seems like right now last month was one of our best months we’ve ever had. I think it might have been the best month we’ve ever had. It’s kind of like business is cranking, and so just as a marketing guy, just really am questioning the ROI on these things. I think the break in the tradition of going to them is actually good because like I said before, it can really give you an opportunity to rethink. Do we need to pick this back up? We quit doing it; let’s just leave it where it was. Like a bad habit, we’ll just walk away from it.

– Yeah, it’s interesting. Like I said, we’ll see what happens. On that, as we’re prognosticating a little bit, the future, the future of your industry, what does that look like for you?

– Future of our industry, so we’re facing some challenges, that’s for sure, with the progress of technology and electrification of equipment. Hydraulics is not new technology, let’s just say that. There is a push towards anything new and shiny, so you see the threat of electrification. You start seeing that more and more, but what’s been interesting at least so far to see play out is the combination of electrification with hydraulics because of the inability of electrification to truly replace hydraulics in every application just due to, each method has its own limitations. So you’re starting to see digital pumps and things like that instead of actuators replacing hydraulic components, you just see more like a digitization of hydraulic components to give them some element of the control of electronics and things like that. That’s I think a direction that the industry is going, which I think is interesting. Seems scarier than I think it’s going to be because of the way the innovation has been changing and still people are embracing hydraulics just because of the ability of it to cheaply and easily transfer power in a way that other modes of transferring power just can’t do.

Then for us as a company, I think the aerospace market is always an interesting market. You see tons of publicity recently with various billionaires blasting themselves off into space, but that market is more and more a growing market. Aerospace is a huge market, so of course it’s a growing market. But you see even space travel and everything related to that becoming more accessible to businesses. That was just the thing of governments, and now you have private businesses figuring out ways to do things like that. Some of those businesses are our customers, so that’s exciting to see. We say, more power to that whole industry and everything they’re trying to do because hydraulics is playing a role in it, and so we’re excited about that.

– Yeah, that’s definitely super cool, especially about aerospace and you’re seeing all the privatization of that whole space exploration. That’s obviously super exciting. One thing I’d ask then, if I gave you a magic wand and I said hey, if there’s any challenge you see that you could solve right now, what would it be? Besides Covid.

– For me personally, it would be technical integration, seamless integration. One of the things we’re really trying to push for—and what I mean is integration of business systems for the purpose of real-time data and real-time commerce, just fully integrated through the whole chain of distribution. I think there’s massive potential for that to solve a lot of bottlenecks and a lot of problems. And it’s not a new thing. It’s been going on, but it just needs to really come into its fullness which it has not. It’s so spotty and done in half-measurements, let’s say. I think that is something that I would like to see happen, especially at Brennan. And I’ve actually been pushing on this pretty hard. But in all industry, just to streamline all of the business that happens between industrial manufacturers and their distributors to speed up that process. You still have distributors today ordering by fax which is, it’s just an example of the state of how business is in industrial distribution sites. It needs to catch up with the rest of the world, and I think that that would make a massive difference if industrial business was happening at the speed of a business like a huge retail operation would, like a Walmart or something like that.

And we’re getting there, and we’re trying, on our side Brennan is pushing to adopt and develop. We’ve developed our own technologies in that regard to bridge the gap between our distribution network which is huge—we have over 6000 distributors, maybe 7000 by now—and bridge that gap technologically between them and us to make that relationship seamless and almost to remove us out of the middle of the relationship because in my opinion, that is the ultimate customer experience would be that it’s all about the customer. You’re literally inside their head. Their data is inside your head so that they don’t even really need you, more or less, except you’re hoping, in my personal opinion, the end result would be, we’re basically invisible. Everything is just happening smoothly and seamlessly and automatically, and they never have to think about us. I think we need to get to that point. That would be my magic wand, let’s make that happen.

– That’s a great magic wand answer right there. The customer experience, and it’s interesting. You mentioned retail. A lot of this is driven from our consumer behavior, our expectations. You and I go onto Amazon or whatever. You can go buy something online and get it, sometimes in an hour or faster. Your food, your products, your groceries, whatever, that’s all where that’s going. That’s sort of being pushed into, on the B2B side. Well, wait a minute; why couldn’t we do that? It was interesting. There was one of the companies that we talked—this was probably two, three years ago. They had pushed into ecomm, and you could go buy stainless steel tanks from them for $20,000 online. It’s interesting. B2B purchases obviously are very different in nature. But you mentioned from an ordering standpoint, like okay, fine. It’s still very technical, and you’ve got to go through all kinds of stuff. Certainly if you’ve got a distribution network, there’s going to be some similarities. Alright, let’s hit a button. It’s coming; it’s coming. It’s going to take some time. It’s also interesting too, you were mentioning fax. Real estate, I remember several years ago. It wasn’t that long ago, I guess. I was still blown away at fax. Like, really? You guys have to… Okay, alright, but you know what? It’s not the only industry that is…

– Yeah, it definitely gives everything an old-school flair, the fax machine coming in the corner.

– Things are changing. They’re coming. My last question before we wrap up is, what are you doing to stay at the top of your game, to continue to learn and sharpen your toolset? What are you doing?

– That’s a great question, and I appreciate the opportunity to talk about that. What I’m doing is, I’m trying to share knowledge with other people in the marketing world and in the remote working world, both socially like social media, putting content out on social media, and also sharing best practices amongst peers. Let’s say sharing practices amongst peers to learn from each other and also public speaking. I’ve been trying to do more and more speaking and get out there more and talk about these things just like I’m doing right now, but also virtually in front of other groups or in-person as that is possible and just really help people to grow from the 30 years of experience that I have but also in that process you learn a lot yourself, both from trying to help other people grow and the input of others around you who are doing the same thing or have their questions or their experiences. Really just trying to give back, I guess, in some way actively is a huge way that I’ve found to try to advance myself but also the whole industry and other people. Honestly I’m really trying to focus quite a decent amount of effort onto doing that kind of thing, and also it’s very enjoyable. I love doing it.

– That’s awesome. That’s a great answer. I love that. Giving back, but then you also— I do some of the similar stuff, and there’s a tremendous amount that you learn from other people. I love that. It’s fantastic. It’s sort of like this—I don’t know what I’m trying to say. You put in, you get out.

– Yeah, I think Covid has locked us up in little boxes to some degree and you have to get back out of that. Even when you’re free, so to say, after being penned up for a long time, there’s actually a stretching. You have to stretch and get your muscles going back into, no, I need to be out there. I think just pushing yourself, or at least for me, pushing myself to be out there, to engage with people, even if it’s digitally, but everybody is so much better and more ready for that, engaging with people, engaging in the discussion, bringing ideas, sharing them, getting input. That is a very awesome growth process for everybody, really.

– Yeah, that’s awesome. It’s funny; you reminded me of a story that a buddy of mine told me just a couple of weeks ago. He was a road warrior, always traveling, going somewhere, conferences, networking, all over the place. He told me, well I went to my first conference or whatever two weeks ago. He was like, I came back, and I was like, aw man, this is—yeah, I’m okay with doing this two times a year now. I don’t want to do this all the time.

– He’s out of shape.

– Yeah, exactly. He’s winded. It makes a lot of sense. I get it. Cool, well John, I really appreciate the time that you’ve spent with us here on the Executive Series, just learning a little bit more about you and about Brennan and just sharing ideas and thoughts on where we think this crazy world is going relative to industry. I’ve loved it. For those who would like to learn more about you guys, it’s brennaninc.com; is that correct?

– That’s right, brennaninc.com, and you could also search me on LinkedIn. Feel free to follow or connect on LinkedIn.

– Perfect, yeah. So that’s where you’re posting most of your social content?

– Mm-hmm.

– Alright, cool. Well we can follow you there. Follow John. So again, thank you so much for your time, and we’ll do this again. This won’t be the last time.

– Okay. Yeah, I’d love it. I always love talking to you, Danny. So thanks.

– Any time, any time. Alright, and that wraps up today’s IndustrialSage Executive Series with John Joyce. He is the global marketing director at Brennan Industries. If you want to learn more about them, you can go to brennaninc.com, or you can check out John. He puts out a lot of content on LinkedIn. You can go follow him, check out his stuff, share a comment, all that good stuff.

Hey, speaking of content and consuming it, if you are not on our email list, you need to go and get on the list now. I highly recommend. Why? Because we’ve got great content like this and others that are coming out on a weekly basis so you can continue to sharpen your tools and learn from other leaders and executives about what they’re doing in their industries and how you can be a better leader in yours. So that’s all I got for you today. Thanks for watching or listening. I’m Danny Gonzales, and I’ll be back next week with another episode on IndustrialSage for the Executive Series.

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– Hello and welcome to today’s IndustrialSage Executive Series. I am joined by the CEO and co-founder of Nanotronics, a man by the name of Matthew Putman. Matthew, thank you so much for joining me today on the Executive Series.

– I love to be on it. It’s good to talk to you.

– It’s great talking to you again. We’ve got a veteran guest here. You’ve been on IndustrialSage in the past.

– I feel so lucky. Yeah, right at the beginning of Covid. I was saying that I actually was sick with Covid when I did your interview last time. I don’t know if you knew that.

– Did we know, at that time—That was probably what, March of 2020-ish?

– Yeah, exactly. It was early in it. I wasn’t feeling well, but I was too embarrassed to say it. Not too many of us that we knew had it at that point. I was an early adopter.

– There wasn’t a way to know at that point, I don’t think. Anyways, but glad you’re okay. Glad everything’s good.

– It’s great.

– Yeah, that was a whole different world back then, wasn’t it?

– Oh, man, completely. It was scary. Scary time.

– Absolutely. Well we’re going to jump into that a little bit, just see how things have changed for you and all this good stuff. But before we get into all that, for those who aren’t familiar with your company Nanotronics, tell us who you are and what you do.

– Nanotronics has been around for 10 years now, and we do industrial automation, bringing artificial intelligence and machine control to many different industries. We work in the genomic space. We really started in semiconductors and work in next-generation electronics. We work in multiple different industries focusing on what the next generation of manufacturing looks like. So we are this venture-backed company while being an old-school manufacturing company at the same time. The name of your podcast fits well, I hope.

– Yeah, absolutely. It’s good. I think what is going on right now with all the digital transformation and all the technology that’s pouring in in the manufacturing space is incredible. And I think that one of the—if you want to look at stuff. Obviously Covid brought a lot of not great things, to put it lightly. But it also, as a flip side, as a consequence, I think it created a necessity for companies to adopt a lot of this technology, or at least be more open to it. It was already kind of going that way anyways, but it certainly created a need saying, oh my gosh, we need to really come up with solutions. We saw so many weak points and vulnerabilities. And we’re still obviously going through that. How has that changed your business?

– It’s changed just about everything. Not in the same ways that you generally hear where we’re doing these things by remote conferences, and you have people work from home. We never did that. We were involved with building things that were a part of the effort to try to deal with the changing world from Covid. So we were all in this work time mentality and this urgency to get things done. That felt different, and it felt different to think in terms of getting things done by tomorrow because there were lives at stake, or there was this need to get research done to see where it would go. It changed a ton as far as our motivations and the way we perceive time. It didn’t change the fact that we were still working from home—or not working from home. We were working from the office still, and from the factory. Now of course, we were talking to everybody else this way. And I find what’s really interesting about that is that we could see the hardware behind things. Literally, we do imaging of semiconductors. We do imaging of displays. We could see where this hardware was starting to wear thin. While everybody was celebrating the ability to communicate, which is amazing, you could see worries of supply chain problems and when this hardware would start to break and need replacement. We could start to see where that might become a problem. And so we tried to address that with the same kind of urgency as a Covid response. So it was just this incredible confluence of a number of things happening at once.

– Yeah, absolutely. I remember—I think you were alluding to everyone going to Zoom and using cameras and whatnot. And then all of a sudden you couldn’t get cameras, and then all the supply chain issues there. ISPs were struggling with all the bandwidth and all the throughput that they had to have. We certainly noticed. We have done a lot of video streaming before. Yeah, you’re getting hammered, and no 1080p streams, 720. Your Netflix is getting knocked down. Just a huge strangle there, really, on all those things. Hardware, software, throughput, the whole nine yards.

– Yeah, and I think that in a way that pain is still going to be here for a while and will take companies and mindsets to change in order to address that. Computers are 24-month lead times sometimes for certain parts. People can’t get automobiles. There’s huge problems due to this chip crisis, due to everything that has been disrupted over the last year and a half, and perhaps a mindset that existed before that this just exacerbated. There’s a lot of pain and a lot of opportunity right now to be addressed.

– Yeah, absolutely. So relative to that, how has this really altered your future over at Nanotronics?

– Wow. It’s as if we have emergency use approval not only for FDA devices that we make but for everything that we’ve imagined and worked on that we thought had 15-year horizons before. For instance, where we’re working in the genomic sequencing space for our customers that work in that space, suddenly they went from being a small part of our business to being a huge part of our business. We see mRNA vaccines are the most widely-distributed biotech in the world. Nobody would have expected an mRNA therapeutic on this scale this quickly. So that changes a big part of our customer base. We focus on that. I’m in a new building here that we had built—it’s actually the oldest building here in the Brooklyn Navy Yards, or one of the oldest buildings. They made submarines, and we made this, this modern building. We’d had this planned out for a couple of years, so we knew exactly how we wanted workflow to be.

We’re going to make robots in this place. We’re going to make microscopes. Now in one part we’re making non-invasive ventilation devices that we’re shipping around the world. So we’re actually changing the physical infrastructure. We’re getting different types of people to do assembly and machining that we wouldn’t have thought before. So we’re adjusting to a world that is moving quickly and trying to make sure that we don’t miss that opportunity to do things that are outside of Covid but that we’ve always wanted to do, that I’ve thought important. So I can spend my rest of my career personally doing things that I’ve imagined always wanting to do, but not certain that the world would present that kind of opportunity. So there’s great risks and great potential reward that is very different than I would’ve expected a couple of years ago.

– Yeah, that’s certainly a truth. You said something interesting I want to circle back on in a little bit. I don’t want to completely derail off this right now, yet.

– Oh, sorry.

– No, no, no, you’re great. It’s an off-topic question that piqued my interest, so it’s very good. Relative to some of these changes that you’ve seen happen, you said, we’ve set everything up this way. We’re going to manufacture microscopes and these different—oh, actually that’s now, that’s off. We’re moving over to, you said either respirators or ventilators.

– Yeah, non-invasive ventilators that don’t require intubation. It’s a way that actually helped me when I was sick with Covid, and we’ve invented and got emergency use approval within three months. So that was something that was completely outside of anything that I planned for Nanotronics’s subsidiary of the company but has used our manufacturing techniques while, by the way, still doing microscopes. It’s just trying to do both in the same space, and we still have our other facilities as well working on the other products. But it’s just changing the way—and I bring up the space because even the physical structure of what we do is different. It’s not from working from home that it’s different from us. It’s the physical space we work in we had to transform to meet the changing product line and changing demand and changing opportunities.

– Right, no, absolutely. How much of those, relative to some of those changes you said a large chunk of your business had switched. Do you see that continuing? Do you see that waning a little bit in the future and pivoting back? Where are you thinking things might go now?

– I have to put this—Nanotronics health division that makes the noninvasive ventilation and makes other products in the medical space. I’m going to put that over to the side a bit because that’s all new. That’s a different sort of business model. That goes to consumers, and that’s—but as far as our industrial space and what we make, we’re lucky that we made a product that, by using artificial intelligence, it’s agnostic to what industry we work in. That’s why we’re able to move so quickly into these other fields. Now luckily the fields we work in, I don’t see this synthetic biology going away. It’s only growing, so we’re glad to be in that space, in genomics, and moving then into proteomics. When will we see next-generation electronics as being a necessity? We’re having to deal in the United States with the fact that we import most of our semiconductors from a single company in Taiwan. The building of US fabs for next-generation, for us to even be self-sustainable in the United States, is only going to grow. So the places where we started to make larger progress during the pandemic are places that will, I think, be the largest part of our growth going forward as well.

– Yeah, that makes a lot of sense. Again, certainly super interesting. You kind of touched on this a little bit, but if you were to put your—if we get the crystal ball out a little bit, thinking of the future here, what does the future of the industry look like to you, maybe even in some of those specific industries? I know you kind of have your hands in a couple different areas.

– Yeah, it’s the great thing about making these industrial-enabling platforms and getting deep in is that we get to see where the world is moving just before it happens. It’s a nice little view into the future. Whatever little bits of that we can help with is wonderful. If we take it by sector, it’s clear that moving to lower-cost genomic sequencing is more important than ever in order to do genome editing and eventually do proteomics because what we see with mRNA vaccines is being this rushed, as people thought for a year, to get this operation warp speed was actually something that was done much faster in the labs.

– Let me ask you real quick. I’m curious.

– Yeah, sure.

– I’m, and I’m going to suspect a lot of people in my audience may not be as familiar with genomic sequencing, and you mentioned something else. Could you explain what that is on a fifth-grade level—or a kindergarten level for me?

– Yeah, and it relates very much to what we’re all getting now with these—hopefully all getting, in my opinion—is these vaccines. The human genome is the code for making proteins in our bodies. This is the code to who we are and how things replicate. Being able to understand how to measure our own genome so that we know who we are is important. It’s also important to know what the sequence of a pathogen, such as Covid, is. Certainly not just Covid; this applies to any pathogen. Luckily by knowing that and the specifics of that, in this case sequencing SARS-CoV-2, you’re able to find what area of that needs to be edited in order to in this case do something which is, ignite the spike protein. It’s a chance to be able to ignite the immune system by using this RNA, in that case, the messenger of the sequence that matters.

This is something that existed in many different forms, both sequencing—understanding what the genome of any animal, bacteria, or viruses were—for giving information. It also existed for being able to do genetic modification. We know this for crops, and we know this in many different studies and the creation of biologics that happened in the lab and were going through trials for many, many years, 10, 15 years or more. But this was a chance to take all of that research that existed before and apply it to creating a therapeutic, a vaccine in this case. Now we’re seeing right now variants which are mutations of SARS-CoV-2. You want to be able to sequence as fast as you can this Covid at any time so that you can then alter, know with the current vaccine will catch it or if not be able to alter the code, so change that RNA in order to be able to deal with the new mutation. We’re not at that point, from what we know at this point.

But what changes, and where this becomes very crucial in dealing with the new world of being able to address urgency with this type of deep technology that most people were not familiar with until Covid is that we no longer should have to wait a year or two years or, in our cases, our whole lifetimes to get this advanced technology. It should be nearly immediate. That requires very rapid sequencing, and it involves then production of that new sequence inside a nanoparticle, in the case of how these particular vaccines are being delivered. Now we don’t do the sequencing ourselves, but we work with the companies that make them in order to do imaging for it, in order to improve the yields so that we can run this through as quickly as possible and to work with the companies to improve the price. So all of this makes what we would consider a more abundant, healthy future.

– Yeah, absolutely. That sounds super interesting. Thank you for explaining that and breaking that down for me there. It sounds like just basically this technology, the future, you’re able to just respond faster and be able to, like you mentioned, get out therapies and vaccines and just different treatments for people faster because this technology allows.

– Yeah, I think a lot of these things that we hear about what went on during Covid, people seem to have fallen in one of two camps. There were those that life stopped for, and that’s unfortunate but necessary in a way. We were either quarantined, or there were no jobs to go to, or you’re working from home. Life had changed in that it slowed down. Pace of life slowed down. And then there were the industries that were in the trenches, and every moment mattered. And so it was, you just had to work constantly. And there was heartbreak to that of course. And there was an incredible rush that you were able to do something that would last, and that the methods of doing it would last far beyond this particular crisis. We were very much in those trenches.

– Yeah, it’s funny you mentioned that. It’s 100% true. It just switched. It was like half over here and half over there. It’s very fascinating, I think, hearing these stories and just how you guys were able to pivot. I think you said earlier one of the products, because you mentioned with the ventilator, which you said you benefited from… Thank God. That’s great. I’m glad that—sorry to hear that it got bad for you. But you’re here, so that’s good. That’s great.

– I’m glad as well.

– Yes. But you said that took three months to get emergency authorization use to be able to go to market with that and just switch all those.

– Yeah, that was really a pretty amazing story because I have a CPAP machine at home that people use for sleep apnea. I had had some previous health issues, and I knew that you could raise your blood oxygen level at least some by having this assisted breathing. So I did this, would measure my oxygen levels, and noticed that it would increase from a dangerous, near hypoxic level to a safety level. So I called my father who is my co-founder and a great inventor and partner for many years, I said we’ve got to make one of these, but make it that it costs $200 instead of thousands of dollars for a medical-grade device. It has to be one button, and we have to ship it to the world. So he built it at home, a prototype. Then we brought it to our facilities and put it to our R&D team, and we got emergency use approval in three months and started distributing these.

– That is crazy. How did you manage the supply chain for all of that?

– That’s where Nanotronics came in handy. Nanotronics is as vertically integrated as you can imagine. It’s been part of our philosophy for many years. I’ve been concerned about supply chains being problematic. And so we bought our supplier for our core company before, and we make as many of the parts as possible from machining to assembly. We do as much as possible. And we also have manufacturing techniques that use this closed-loop AI so that you can train humans to do assembly incredibly quickly or train machines for those things that are automated. So while some of the other manufacturers of equipment in this space had huge supply chain disruptions, we had a fresh start. We could start building this ourselves and not have these types of dependencies. I hope that that serves as a model for not just the rest of our business but just in general that people can do things and companies can do things that are not as intertwined as we think they are.

– Yeah, that’s a great point. If there was anything you keep hearing, talking about, it’s resiliency of the supply chain. Everyone obviously is reassessing and looking at all the vulnerabilities. There’s a question now of, how lean is too lean? Certainly looking at, assessing the supply chain issues. Maybe we can get something cheaper, but gosh, now we’ve got to look at what kind of vulnerabilities we have here. To your point, being able to align that a little bit more vertically. I like how you mentioned it was the closed loop. I think 100% right, and I think a lot of companies are looking at that and adjusting that right now. It’s not a quick, overnight fix, but I think that’s exactly where companies are going to be moving.

– Right. I imagine for a large company to completely change the way that they handle supply chain management and manufacturing procedures and processes is a really big deal. With this particular breathing product, starting from scratch probably gave us a little bit of a help, sort of the idea the start-up mentality can come in to disrupt industries. The point not to be in this case to have a business destruction of something but to actually shore up something that helps people breathe. Now everything feels this way. Helping the environment is a big thing right now that I’ve been thinking about that has gone from future to urgent. How do we deal with the environment as this sort of emergency-use approval to be able to deal with environmental disaster? How do you deal with it in order to make sure that we have everything that we need that we just cannot get due to something like a chip crisis or really a shortage of most supplies right now. It’s a strange time. There’s going to be some pain, but there is a mindset that is now a precedent that has been established from what has gone on with Covid that can be pushed in other directions.

– Absolutely. What a fantastic story about—I love it how you just kind of like, hey, we’ve got to do this, and here is how we can do it, and let’s go. You were able to spin it up, go to market, and get it out there. Fantastic story. If I were to give you a magic wand—we’re in magic land right now—what’s one thing that you’d like to see in your industry or the industry, or maybe even the industries that you serve, changed or improved upon? And one caveat is, it can’t be Covid.

– It wouldn’t be Covid specifically anyway because I look at any pathogen as being the same. When you look at this, if you’re looking at synthetic biology, it doesn’t matter if you’re dealing with one coronavirus or another or a cancer, it’s a different way of looking at these things. If there was one thing, I think the hyper-distributed world of building. The ultimate goal is to be as atomically precise as possible. So if we can make things as close to perfect without waste, it also means that we are not reliant on getting large amounts of material. We are not destroying the environment. And we’re making really what we need where we need it. If that happens, it encompasses all the things we’re talking about. It leads to personalized medicine in a very short amount of time. It leads to making sure that I have a computer where I need it and when I need it rather than waiting on everything that it takes to have 24-week lead time. So I think that’s where we need to focus. And even though it sounds like a Star Trek replicator for those that have seen Star Trek, there are very close steps and things that we’re starting to see that let us believe that this is technologically possible. So now it’s just taking some steps toward getting there.

– I love it. It’s such a great answer. I love asking that question because you get all kinds of answers there. But it was interesting talking about customized, more personalized manufacturing so you reduce the waste. It reminds me of, actually, the contact lens manufacturing space which blew my mind. I didn’t know that the traditional contact lens manufacturers produce around three sizes for your eye, your cornea, and there’s a large, huge numbers of variants. I thought that was very interesting that, hey, it’s just three. It’s some finite number that’s very small like that. I think it’s interesting when you go look at how, you can use a lot of this technology now to start thinking about how to solve that, to your point, to reduce a lot of the waste because you know there’s a ton out there because it doesn’t work for everybody, and there’s all kinds of issues. That’s just one, tiny little example.

– Yeah, I think that part of this is starting to think of everything as a factory. If you think of a cell in a body, it’s a factory that we are now figuring out how to deal with in order to activate immune cells and immune response. That’s a factory. There’s a bunch of factories in building things within your mouth. If you’re working on dental work or if you’re doing these—no matter what you’re doing on that small scale or whether you’re building automobiles, it’s all a way of thinking about manufacturing. It’s thinking about manufacturing as close to that place as possible. I think that that’s going to take a change of mindset still, even though we’re maybe getting closer. But I think people will start to be able to hold this in their hands and see that convenience as even being a greater convenience than we’ve seen with a lot of our modern technologies.

– Yeah, absolutely. It’s super interesting stuff. So here is where I wanted to ask you a question that popped in my mind because you mentioned something I thought was interesting there. You mentioned basically there’s a lot of things that you want to be working on that you haven’t been working on. What are those things, if you’re able to share?

– Well—

– And it could just be general ideas. I guess I was just curious about that.

– Yeah, I mean—

– And we don’t have to. It’s alright.

– Oh, no, it falls into so many different categories.

– Where to begin?

– There’s hardly anything that—I’m curious about everything. I want to make a movie. I want to produce an album. There are all sorts of things I want to do in life in general. But for the big things that matter, I want to be working, for instance, on tying biometrics to actual treatment. Closing the loop on something like what we are doing with this breathing device that we call nHale with measuring what your oxygen levels are and then moving something towards looking at what your state of your body is at any given time to looking at whether there is a delivery system for something like an mRNA therapeutic. It is closing the loop, and I could take that as being medicine, and I could look at that area of where medicine and health and longevity and all these things go.

Or I would like to work on materials again. I’m a material scientist by training. There’s been huge advances in materials, but there’s also become huge necessities as we see. We have a shortage of materials to make much in the United States. So what new materials can be used? I work on things like, how can you grow new crystals in a more precise way so that you could make things out of materials that are actually abundant all around us. So I’m really interested in that field, and I’m more and more interested in geoengineering. So there are really so many different fields. I think the most important thing is not to wake up and feel overwhelmed that there’s so much to be accomplished. It’s trying to take those and put those together and say, what is this unified theory of technology that applies to everything? That’s the thing I want to invent. That’s the thing I want to be working on, that it doesn’t matter which field it is. That I can dream something tomorrow and whatever I had been working on yesterday and the year before and the year before that enables that to happen. The enabling technology’s always what Nanotronics has been doing. Now we just have to do it with wider dreams of what is possible in a shorter amount of time because we can hold these technologies in our hands now.

– Yeah, it’s fascinating. I love all that. I can tell you’re just a little passionate, just a little bit. And that’s exciting. It’s exciting to hear. I get excited about it, and I’m not a material scientist. I don’t know these things. But I think it’s super fascinating what you’re doing. I think it’s super fascinating, just the exploration. As we’re winding down, one thing that I always love asking leaders such as yourself is, what are you doing now to stay on the top of your game?

– I think that I have started to do several things. A big thing, I’ve traveled a lot in my life. My career has let me, it’s been a great joy to travel everywhere, and I was inspired by places I went and different cultures and different people that I work with. And that is one thing that changed during Covid is that I didn’t get to travel as much. Nobody did. So I started to develop routines. I wasn’t able to have routines when I traveled all the time. So routines of before people wake up in the morning when it’s very early, I get a chance to sort of dive deeper, read more and take notes more at a point in the day where I’m still incredibly focused to do the harder things. So that has been good, and I try to keep actual physical books around a lot of different kinds. And when I’m at home, I can do this before I come to work. That’s really helpful to me.

That’s been a big part of it, but I’m also, I play a lot of music. I play free jazz, and I play in a jazz band. During Covid I had a chance to record with a neighbor who’s a great trumpeter who I had listened to for many years and only discovered that he lived nearby right before the pandemic. So being able to completely switch gears and improvise and say, rather than the deep study that you would do to get into a topic that is necessary, how does that contrast with what maybe I would do late in the day which is try to turn off and see what just comes. And those two things that seem so different when brought together through the remainder of the day seem to help with conversations and collaborations and hopefully invention as well.

– Awesome. No, that’s super cool. We talked about it before, really unifying those two worlds. And I imagine that a lot of innovation and a lot of vision’s coming out of that. You say, I see things differently.

– Absolutely.

– Well Matthew, listen. I could probably talk for another four-ish hours or so because you’re super fascinating to talk to.

– We could do, three hours and 45 minutes is all I had put aside.

– Okay, perfect. We could totally do that. No, I think that what you’re doing is fascinating, and it’s been interesting following your company and just hearing all the stories with the ventilator and just how you view the world and your passion. You’ve got quite the resume.

– Well I love talking to you. The last time, it was a great break in the day of being sick, and it’s amazing to talk to you this time. So I really appreciate it.

– Well thanks for coming on again and sharing some of your knowledge and your experiences with us. For those who would love to come check out your company, it’s nanotronics.co. Dot co, not com, C-O.

– Exactly.

– Nanotronics.co, and thank you so much for your time.

– Oh, thank you. I loved it.

– We’ll do it again. We’ll do another follow-up.

– Okay, yeah.

– Yeah.

– We’ll make it a yearly thing.

– Perfect. Sounds great. Alright, well that wraps up today’s IndustrialSage Executive Series interview with the CEO and founder—I want to make sure I got my notes right—co-founder of Nanotronics, Matthew Putman. Fascinating story.

So listen, if you are not subscribed, you need to go to IndustrialSage.com right now if you’re not there watching this video. Maybe you’re on social media. Go there. Get on the email list because you’re missing out on great content. There’s great stories from leaders, great insights that’s going to help make you a better leader. So that’s all I got for you. Thanks for watching, and I’ll be back next week with another episode on IndustrialSage.

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– Well hello and welcome to today’s Executive Series on IndustrialSage. I’m Danny Gonzales, and today I’ve got a very special guest. I have the chief technology officer Tom Galluzzo of IAM Robotics. Tom, thank you so much for joining me today on the Executive Series.

– Danny, thanks for having me. Always a pleasure.

– Well this is your second time. I think we talked, oh I don’t know, a year ago or so. I think it was post-Covid. It was after MODEX maybe, I think.

– Yeah, it was right there in the middle of Covid. I think it was after lockdown started, yeah.

– Yeah, it’s just Covid time. Was it BC, AC, whatever. Time has been confounded. Well a lot has happened since then, since we had spoken. And we’re going to get into that in a little bit. But first for those who aren’t familiar with IAM Robotics, tell me a little bit about who you guys are, what you guys do.

– Yeah, absolutely. IAM Robotics, we are a warehouse automation company. We make autonomous robots to do any sort of material movements, transport around the warehouse. Our claim to fame is, we’re the first company that’s really commercialized what we call AMMRs, which is autonomous mobile manipulation robots. It’s a mouthful, but basically it means robot arms that can drive around that also have—it’s a driven robot platform that also has an arm on it. The robot’s able to see things and look around and find things, pick them up off the shelf for order fulfillment, so fulfilling products for ecommerce and that kind of stuff.

– Excellent. That’s awesome. Since we spoke last time, I think we thought it was just March, April-ish of 2020, things were freshly, “Hey, you know, what’s going on, and how long is this going to be? It’s only going to be two weeks, right?” How has your business changed since then?

– Yeah, good question. We’ve deployed our first scale deployment of our Swift AMMRs. We’re doing a deployment right now with a company called A.S. Watson in the Netherlands, so about half of their products are going to be picked with our robots. It’s really cool. We’re starting to ramp up the number of items that the robots are picking. It’s kind of an industry first. It’s the first time that we’ve seen mobile robots that have the ability to drive around and pick products actually do it autonomously. What we’re doing now is, we’re expanding our market reach. I would say what we’re doing with Swift is a very specific niche market of piece-picking long-tail items in inventory. What we’re doing is we’re expanding our market reach by taking the base platform of Swift, and we’re commercializing it into a product that we call Bolt. So Bolt is really a general AMR, autonomous mobile robot, and we have some really cool, unique features that hopefully you and I will get a chance to talk about here. But really starting to see some–– a lot of the traction and take-off in the market around AMRs and being able to do various things on top of a mobile robot that has that ability to drive around and navigate by itself.

– Absolutely. So you were mentioning—maybe I missed it there—that first customer that you said in the Netherlands where you’re rolling out with this. What space are they in?

– Yeah, they’re kind of like a CVS, Walgreens kind of company. They do pharmaceuticals, health and beauty items, cosmetics, that kind of stuff. So they have many different brands that they have across Europe and Asia. And they’re doing a lot of online order fulfillments, a lot of online direct-to-consumer business for all that health and beauty market space.

– Oh, okay. Excellent. That makes sense. So do they have any retail locations as well, or is it all more like online?

– They do, yeah.

– Oh okay, so a mix.

– They do. Yep, all across Europe and Asia.

– Okay, well yeah, that seems to be the story and the theme as we continue on with this. Looking at these different changes, I know you said you rolled out with some new products. How has Covid really altered your future or at least maybe the way that you look at it?

– Yeah, there’s a couple of different things, and we talked about this a little bit when I was first on the show. Basically there’s kind of the demand side and the supply side. The supply side is really, it’s just harder for folks doing order fulfillment, the companies out there that are trying to ship direct to consumers to find the people that they need and be able to keep up with the growing online demand. We have some of the data on this now, so with Covid, the ecommerce industry which had normally been growing at about this 15% a year, year over year growth, in 2020 spiked by I think 39%. So it went from a 15 year-over-year growth rate to, in 2020, there was that spike because everyone had to order things, almost 40% growth.

– That’s huge.

– We don’t think a lot of that’s going to come back. So the demand side is that everyone’s just buying—it kind of accelerated the consumer behavior to buy more things online. And so you take the supply side—it’s hard to find people to do this work—and the demand side going up, autonomous robots or automation are really what’s required to fill the gap for people trying to do that.

– Well certainly we’ve had a lot of challenges, obviously, with the supply chain, but also you mentioned labor, labor being a really huge story and a big piece of what’s happening. But if I heard you correctly, you said you guys aren’t anticipating that demand is coming down. It’s going up. It was already going up, but with Covid, boom, it just ignited it even more.

– Completely. I think that the future of work is forever changed now with the way that we’re buying goods online, but also just the kinds of work that people are interested in doing. I think it’s a universal challenge in anything manual work, so it could be manufacturing. It doesn’t have to be supply chain. It could be manufacturing, anything where people will previously just use the object movers and employ in basic manual tasks. We’re seeing a more educated workforce globally now because consumers are just more educated around how to use technology, apps, cell phones, computers. The younger generations don’t want to go in. They’re just not growing up with that mentality of, oh, I’m going to go work at my dad’s factory someday. That’s just not how it works now. The way it works now is, I’m going to learn how to use these apps. I’m going to go drive for Uber, or I’m going to go work in some other data thing. Or maybe I’m just going to work on making websites and mobile apps myself. That’s where everything is headed. You’re just seeing this generational shift from manual work to electronic work.

– Absolutely. Getting your crystal ball out for a second, you’ve already prognosticated a little bit here.

– It’s a dangerous thing to do.

– I know it is. That’s okay; it’s all right. We’ll explore the dangerous side of this. What do you think the future of the industry looks like?

– Yeah, really good question. I think generally speaking we’re going to see people doing more supervisory tasks, a lot of sophisticated automation within warehousing, supply chain, and ecommerce. We’re seeing a lot of deployment of what’s called goods-to-person systems now, so companies like AutoStore, Dematic, Intelligrated, they have lots of goods-to-person systems, shovel systems, mobile robot systems. There is a company that Amazon of course acquired years and years ago called Kiva Systems, which is basically mobile robots bringing shelving over to people. There’s a whole bunch of companies doing that kind of stuff now too that are bringing those solutions to market.

Generally speaking, walking is going to be completely out, so people walking around the warehouse is just a thing of the past. It’s totally a waste of time and money for employers to spend on moving, people travelling from location to location. It’s all about having the automation solutions bring goods to a person. And we’re seeing more bringing of goods to the robots. Companies like RightHand Robotics, Berkshire Grey, they have these robot automation systems where the goods are coming out of an AS/RS out of the storage machine, brought to the robots, and the robots are doing some of the work to pick it. And really it takes a ton of people to supervise that, make sure the data’s all correct. Soon you’re going to see a lot of those higher-value tasks being done, a lot of the menial, just moving things around and picking items, those tasks are going away, and those are going to automation.

– Yeah, it’s super interesting because I remember the first time going into—this is years and years and years ago, but going into a warehouse that was pretty automated, bringing in conveyor systems. Now there were no robotics because that was still, I felt pretty far out. Maybe Amazon was starting to roll out with it a little bit, maybe. But still just seeing some of that automation, and you’re looking at a warehouse. It wasn’t massive, but that had a million SKUs and just how you would pick orders was like, wow. You’re going down with a shopping cart and just putting stuff in like you’re going to Walmart, except we’re doing it here. Just seeing the ridiculous increase in efficiency by being able to process and pick a ridiculous amount more orders per hour is crazy. I remember walking in and just being like, whoa. This is crazy. This is nuts.

– It’s huge. The scale is massive, and that’s only one distribution center. Of course the number of distribution centers is growing exponentially as well. There’s still so much concrete being poured to grow this industry. But you’re right, and your point about conveyor, I think conveyor is slowly going to trickle out of the industry as well in favor of more flexible, autonomous mobile robots. We’re starting to see some of that. So there’s certain sweet spots where, if the conveyors are long enough and the throughput is low enough, that it actually makes more sense to have a robot transport those goods from location to location in the warehouse instead of installing this big, long conveyor that’s not really going to get a big return on investment.

– Yeah, that makes a lot of sense, yeah.

– As we see the price of robots come down, we’re going to see more and more of that.

– Yeah, I can see that. That’s for sure. It’s been interesting to see some of these different solutions that are replacing that. Certainly the flexibility piece is huge. It’s a big capital expense, and then if you’ve got stuff bolted to the floor, it’s hard to unbolt it and move it and reconfigure it and whatnot. Yeah, it’ll be interesting to see the future on that. So let me ask you this quick other question, another magical question if you will. If I were to give you a magic wand—I said here you go, take this magic wand—what would you use that to see to change in the industry? I will give you one caveat: it can’t be, “Get rid of Covid”. It’s got to be something outside of that.

– That’s an interesting one. What would I like to see change? Nothing is immediately coming to mind, but I do think I would like to see more innovation in general, just people thinking out of the box about how you take some of the technologies that are out there today and deploy them in unique, creative ways. We’ve seen blueprint concepts for having, for instance, mobile robots replace sorter systems where you have mobile robots being able to pick up items in one part of the facility and shuttle them around in a sortation process or something like that. There’s so many things you can do with the technology today that still aren’t being done. There’s just an incredible amount of white space out there for being able to do more interesting things with person-to-goods solutions, being able to do more with robots combined with pick-to-light, that kind of stuff that we think could be really interesting for a broader set of folks in the market. The challenges associated with that are the industry is more looking for the product to be fully commercialized before we could just go and blank-check innovate. I think that would be the magic wand thing, if there was one thing we could do or if we could get some more of the R&D dollars to be able to try some of these models that we’ve toyed with on paper before. They could be really interesting for solving some really unique challenges in the space.

– So note to the CFOs: increase budget for R&D. Okay, noted. Got that. That’s awesome. One thing I wanted to ask, and I didn’t. We didn’t preface this ahead of time, but I just thought I’d bring it up. I’m curious. Sometime within the last year—you’re CTO now. How has that… because when we talked originally I think you were CEO or president or something. Talk to me about that transition. What has that been like for you because I know recently we heard Vecna Robotics, same sort of thing with Daniel Theobald over there. I know he’s excited to focus on more product development and get into that. What has that been like for you?

– That’s my background is technology, so for me personally it’s been a huge help to have someone else help carry the business and leadership. We got Lance Vandenbrook who’s fantastic. He was previously at Kiva Systems. He led their international sales and marketing. So he has a ton of experience in the space. He also worked with some other companies in robotics, so he has experience playing the CEO role before. So just being able to help manage the business, some of the executive recruiting, growing the scale, it allows me to really focus more on what I like which is evangelizing the technology, figuring out what the bigger strategic roadmaps are technologically and so forth, and providing more of that leadership to the technical organization here at IAM Robotics. I’ve made that switch before where I was CEO, CTO.

When we were doing fundraising for our Series A round, there was a point where it was so much of a full-time job that I couldn’t both run the business internally and do the technology deployment that I had to do and go do the fundraising. I thought, I’m probably going to be better suited finding someone that’s more likely to have a million sales calls and talk to a bunch of investors. So we brought on a CEO for that portion, and it ended up working out well. We found our Series A investor, and then eventually I was able to step back into the CEO role, and then, now it’s at a point where we’re ready to scale, and I’m happy to have Lance take over the business end of things. It’s a double-edged sword. There’s an upside and a downside to being the CEO, and not having to do the downside stuff for me is where it’s helpful.

– Well absolutely. Like you mentioned, it is a full-time job trying to raise, and then you’re constantly talking to investors. It’s just like, hey, we have other stuff that we want to do over here. Yeah, totally get that. Well congratulations on that, to be able to focus on those great pieces to keep things moving and growing and doing that thing that we talked about, innovation. Wrapping up a little bit, what are you doing as a leader, as CTO, leader of your organization, what are you doing to really stay on top of your game?

– Yeah, that’s a really good question. I think you have to have some component of fun and tinker with technology to keep your head into it, I think. When you reach a certain level, you’re not really able to write code anymore. You’re not able to design algorithms and do any of the detailed hardware design or anything like that. You’re really just providing a top-level framework and architectured process. I think for me, I don’t ever want to lose sight of my drive to actually understand and actually build. And I have this innate kind of—I don’t know, what we’d call a grain of sand to the pearl in the oyster—just itching to always build and do things and learn new technologies. Just as a hobby I started tinkering around with my kids teaching them to program video games

– Wow, that’s cool.

– As an example. We’ve just been having a blast with that just as a hobby on the side, just showing my kids. For me it was an opportunity to get to learn how to program into a game engine. It’s inspiring. It makes you think through, oh man, if we could program robots this way, it would just totally change the game of how we got work done and how efficient we could be with—I’m not saying we’re doing anything like that yet, but it’s really helpful to just drive the creative process. Always get back to your roots and be able to tinker and have a hobby and learn the new tech.

– Absolutely, and I love that you’re doing that, especially with your kids to bring them into that. That’s such a great skill for them. It’s interesting; it reminds me. I remember a story—this was years ago—where, I believe McDonalds was, a lot of their training modules they were using–this was several years ago, so they were programming everything and creating video games, basically, on the Nintendo DS. As an employee in Japan, if you were working at a McDonalds, you would go through all the training material on a game, basically, because they were realizing that, hey, with the culture, we love video games. Let’s do that. What’s interesting in industry is there’s a company called Forklift Simulators and we’ve done some work with them. They’re all training on forklift driving using VR technology.

– I’ve seen that. It’s super cool. They use virtual reality, and it feels pretty realistic, too. I’ve tried that at some of the trade shows. I think there’s an aspect of that too, if you can get your engineers in the mindset of gamifying their own work. I think that’s one of the things as a CTO I want to explore going forward is starting to not think about work so much as, oh, there’s this list of tasks and stuff I’ve got to get done in my sprint but thinking about how you can get creative and figure out unique ways that you can change the code to make it better, ways that you can—a lot of times we get bogged down with something called technical debt which is where you program something initially one way, but it really wasn’t best for the future. I think I want to get a mindset in the culture around changing some of the software over time so that you can gamify the process of making it better as you go. You’re not just adding things to something. You’re polishing that stone and continuing to revise it and change it and tweak it. There’s a fun aspect of that because you’re trying to figure out unique ways to leverage your time to be able to modify what you have and make it more efficient.

– Absolutely. I love it. I think this opens up; it goes back to this innovation piece. Just tinkering and exploring and, like you said, looking at all these different creative solutions that might help make that product better or create a new product that solves the challenge. It’s fantastic. We’re running up on our time here, but for those who would like to learn more about you guys, they can go to iamrobotics.com. Is that correct? I want to make sure I got that right.

– That’s it.

– Alright, they can do that.

– I-A-M robotics.com, that’s it.

– Awesome. Well Tom, listen, thank you so much for spending some time with me today on the Executive Series. It’s always great talking with you, and I hope that—we’ll do it again. We’ll have to do this; we’ll do another catch-up.

– Absolutely.

– Alright, great. Well that wraps up today’s IndustrialSage Executive Series with IAM Robotics, the chief technology officer Tom Galluzzo. If you’d like to learn more about them, you can go to I-A-M, iamrobotics.com.

Listen, if you’re not on our email list, I highly encourage you to go to IndustrialSage.com right now if you’re not there, if you’re maybe listening on a podcast, and go subscribe because you’re missing out on great content like this so that you can learn from your peers, and you can see what things are going on and maybe expand some of your creativity as we understand what other people are doing and different solutions. So that’s all I got for you. Thanks for watching, and I’ll be back next week with another episode on IndustrialSage.

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– Well hello and thank you for joining me today on the IndustrialSage Executive Series. I am joined by Sonita Lontoh, who is the Global Marketing Head at HP and a board member at Sunrun. Sonita, thank you so much for joining me today on the Executive Series on IndustrialSage which, this is I believe your second time here on IndustrialSage.

– Yeah, and thank you so much for having me, Danny. It’s so good to be able to share some perspective today.

– Well I’m excited to jump into today’s conversation a little bit more. I think the last time when you came on we were talking a little bit more about marketing and some other things. Now under the Executive Series, kind of excited to jump into a little bit more about you and learning a little bit more about some of your insights, what you’re seeing in the industry, and some different trends. Before we really jump into it, for those who are not familiar with who you are and what your role is and what you’re doing at HP, if you could share that, that would be fantastic.

– Yeah, great. And again, thank you for having me today. So yeah, just a little bit about myself, looking back at my career, about 25 years I’ve had the privilege to lead and advise at the intersection of innovation, digital transformation, and disruptive technologies. I’ve done that, Danny, both with new businesses within large Fortune 100 companies such as HP today and prior to that, also with Siemens with their new digital business but also with smaller, more entrepreneurial, Silicon Valley venture-backed technology companies. So pretty diverse, have seen the gamut, but the connecting thread is always new business. Usually there’s a disruptive technology involved, and then usually the disruptive technology is enabling some kind of digital transformation. So started that by focusing more on industrial IoT which, at the end of the day, as some of your viewers probably know, is about data and connectivity. And doing that prior to HP, focusing on energy and infrastructure.

And then I was at Siemens about three years ago that I got a call from HP, and to be honest with you, I never thought of HP as a place to go. Not because it’s not a great company; it is a great company, but it’s an area that’s slightly different than where I was focusing. But then HP said, hey, we are starting this new business. It’s going to disrupt manufacturing. And as I listened more to them, basically it’s this new 3D printing and digital manufacturing business, and it’s enabling digital transformation but for the manufacturing industry. I viewed the opportunity as attractive because even though at the time I was focusing on infrastructure and energy, but I saw this as an opportunity to enable digital transformation in another sector. Plus the opportunity to start a new growth business for HP, which is the birthplace of Silicon Valley, and as the company is trying to evolve for the next phase of growth, I thought that was a great opportunity. And so here I am. I’ve been here for about three years now, and so far the journey has been pretty fascinating.

– That sounds super exciting. Well congratulations. It is interesting how you said that, when you were coming from Siemens going over to HP, the idea of them being involved in a little bit more of a manufacturing and industrial application was very interesting, and how they said, we are coming in, and we are going to disrupt the industry. It’s very exciting about 3D printing. It’s been very much of a buzz topic. What are some of the themes and some of the areas and the trends that you’re seeing in the space right now that are requiring companies to rethink and innovate?

– Great question. Yeah, so when you look at the industry, I think there are a few trends going on, and perhaps I can summarize those as 3D as well, mainly decentralization of manufacturing and democratization or personalization, and then last but not least, and I think this is happening in many industries is decarbonization or sustainability. So let me just go over them briefly, each one. In terms of decentralization, we see a trend, I think, around the world for manufacturing to become more distributed and basically what that means it’s this shift that certain types of manufacturing can actually happen closer to where the demands are and locally, so more distributed. Of course it creates both challenges and opportunities for manufacturers.

And then the second trend that we see is what I call democratization or personalization where there is also an increasing trend for customers, be it enterprise customers or end consumers to demand products and solutions that are more customized to their needs. The last but not least is this decarbonization or sustainability where we see manufacturers are always looking for ways to be more energy- and resource-efficient and looking for ways to improve their sustainability. But then when you take a step back, basically these trends create challenges for a lot of manufacturers because they have to be able to adapt not only their existing processes but also their people, their skill sets, the way they do business in order to be able to tackle some of these challenges. What we’ve seen, some of those companies that want to get ahead of the challenge, they adopt some digital technologies including 3D printing, digital manufacturing, in order to enable them to be more agile so that they can respond faster to customer demands. They can create new business models in certain cases, overall just turn the challenges into opportunities.

– Yeah, absolutely. Relative to that, how have you seen companies adopting this new technology, whether it’s the 3D printing, digital manufacturing, and what do some of those use cases look like?

– Yeah, interesting. It has been definitely a journey for the past three years. I would say there is really no one-size-fits-all because the truth is I think each customer, like each company, is at a different stage of maturity with regard to their digital manufacturing maturity. Some, they’ve never tried it. They’ve never heard of it. Others, we see companies that have champions inside the company that have tried it, worked on it, maybe tried it on a few controlled applications trying to prove the business case before they scale it. And still others, and usually these are more for what I would call digital natives, well-capitalized startups, they don’t have legacy systems to deal with that they can just adopt the new technology and disrupt an industry. And so really as I explained, they’re at different stages of maturity, and they do it for different business reasons. But what we have seen is that as a solutions provider like HP, our goal is really to just partner closely with the customers regardless of where they are in their journey in order to be able to collaborate and work together with them to ensure that we are a trusted partner that can grow with them throughout their journey.

What is interesting, Danny, what we have seen is, it seems, especially for production applications, it seems that applications where there is a need for highly-customized or what we call mass customization, 3D printing technology seems to be a good fit from a business case perspective. Basically if every single thing that you make is slightly different, then using 3D printing makes more business sense compared to, let’s say, if you’re just producing millions of parts of the same thing. We see industries such as dental aligners, hearing aids, maybe customized glasses, customized orthotics and prosthetics, customized shoes where the item has to be customized in a sense then the 3D printing really makes sense. As I mentioned previously as well we’ve also seen, it’s different working with a customer that is a digital native, well-capitalized startups with no legacy systems. Then they can go big faster versus working with a customer that has a lot of legacy systems. They have to start somewhere that makes sense, and you have to be patient and working with them throughout their journey because it’s not going to be an overnight project for them.

– Yeah, absolutely. I can see that younger, leaner startups are going to be—I love how you said companies that don’t have the legacy systems, there’s going to be a whole lot of heavy lifting, or less heavy lifting, and they can see things a little bit differently and boom, be able to adapt because this certainly is a disruptive technology. I think it’s amazing. Let’s talk about disruption a little bit more. We’ve had this crazy thing happen over the last year called Covid. It has completely disrupted and changed all kinds of things. Looking at the industry, what are the biggest disruptions or the changes that you’ve seen in your opinion?

– Yeah, another great question. I would say reflecting back, especially last year, I think the pandemic has actually proved to be—of course it was a challenge. It was a challenge for everyone. But it has also proved to be a positive moment, I think, for this industry because for the longest time the industry has talked a lot about the potential of 3D printing to enable, as I’ve mentioned, distributed local manufacturing where people can manufacture on demand closer to the point of distribution. But during Covid, as you remember Danny, a lot of just supply chain disruptions happening around the world because—

– Still happening.

– Yeah, borders were closed, goods and people couldn’t move. And so there’s a lot of supply chain disruptions, and we saw it as an opportunity, and not just an opportunity actually. We seized it, and our customers and partners seized it as well. I’m really proud to be able to actually share with you that last year especially after the first few months after Covid hit, lots of supply chain disruptions around the world, HP together with our global partners and customers around the world, we quickly rallied and worked together to design and produce I would say more than 5 million mission-critical applications, so things like PPEs, face masks, face shields, ventilator and respirator parts, nasal swabs, and others to basically help the local healthcare workers battle the pandemic. And so with that moment, it really showcased the power that this new technology had, and for the longest time in theory you can really use 3D printing for distributed manufacturing, but during that Covid-19 situation the first few months, it just really provided it I think with a watershed moment that hopefully can help with the paradigm shift in thinking as government institutions around the world, many different industries around the world are rethinking their supply chain resiliency and manufacturing processes.

– Absolutely, yeah, a lot of reshuffling, the resiliency, supply chain as you mentioned there, huge implications and driving a big need to—I like how you said there was a lot of talk beforehand about how we could implement it. Now is, we have to implement this. Wow, look at this. This is an actual viable solution to really solve a lot of these challenges and create a lot of new opportunities. Relative to that, what are you thinking looking forward now over the next three to five or ten years? What trends or what are you seeing in the future?

– Yeah, I see the next three, five, ten years, there are two things. I think from the customer perspective, I think as more and more people realize the benefits of 3D printing as they move up their journey and they can see how this new technology can help them to either reduce costs from an operational efficiencies perspective or, in some cases, be able to enable them to provide better customer experience through personalized products for their customers or end consumers and in some cases besides that, companies that are the most advanced have been able to leverage new technology to create new business models and new revenue streams that would otherwise not be possible. I think as more and more people and companies and customers see this, I think they will start adopting it more and more and making it part of their processes. Then from the industry perspective, I think as the industry itself continues to mature, a lot of us, the players, we will have to continue to collaborate with each other in order to be able to provide an end-to-end solution for our customers so that it is easier for the customers to route the inner means. We have to make sure that the hardware, the software, the services, the design, it’s all inter-operable with each other so that it is easier for our customers in order to be able to adopt it and to make it an integral part of their manufacturing process.

– Well certainly a lot of opportunities and a lot of different things that we’re going to be seeing over the next few years for certain. Going back to where you mentioned with Covid, certainly yes, there were a lot of challenges, but also you could flip it a little bit and say there was a lot of opportunities. And I think because of those opportunities now that have been capitalized on, it’s opening up this whole new world for both, you mentioned your customers but then also looking at your partners to be able to open up new business streams and align between, you mentioned software and hardware and all the infrastructure. I think it’s going to be very exciting to see all the new applications over the next several years because I really do think that this is going to be a huge piece of it, certainly be able to respond from a flexibility standpoint. We’ve learned that is critical, especially when it comes to your supply chain. Fascinating stuff. I kind of want to switch gears a little bit. This is where I want to get to know about you a little bit more and some things. Let’s talk about your leadership principles. What are they? What are some of those pillars for you?

– Yeah, great question. I would say over the years my leadership principles have evolved based on the experiences and as I also continue to grow on my own journey. I would say in general my leadership principles can be summarized as follows: The first one I think, especially in my area where I’ve been a lot dealing with disruptive technologies, and I deal with a lot of very brilliant inventors, people who invent things, I think leaders have to be customer-focused. And by that I mean, especially in the world of technology and especially in the world of disruptive technology, I think leaders have to take the time to truly understand what the customer needs are and be able to articulate how this great technology that are being invented are actually helping to solve real customer problems. I think leaders will also encourage others to be customer-focused as well.

Then second, and again I think this is also related to new, emerging technologies, leaders have to be long-term focused because as I have mentioned it’s a journey for most companies from invention to commercialization to helping customers succeed; it’s a journey. So a leader has to have a very long-term view, and he or she should not be trading the long-term value for short-term gains. Then last but not least, this is more from a personal perspective. I think leaders develop other leaders instead of other followers, and there is actually this concept that I listen to from John Maxwell. You may know the leadership coach and guru where he says there are five levels of leadership, and most people are on the journey.

But what really resonated with me, he basically said that while most people start a positional leader because it’s the easiest, but it’s also the least rewarding. And as you continue to grow in your own leadership journey, you will focus more on developing others because when you develop others as leaders—and I found this myself—when you have more leaders in your organization, more of the organization’s goals can be accomplished. And when you’re being intentional in developing other leaders, I think not only you reap the benefits, but then these other people also multiply it to others. And so I would say, I don’t think I’m quite at the pinnacle yet because I think these five levels, they talk about how you start here and then eventually you go up to the pinnacle level five, and I don’t think I’m there yet. However, I think as I continue to grow in my own journey, it’s focused on developing others as leaders just become more and more important for me.

– That’s fantastic. I love that. You mentioned being customer-focused, and then long-term. That’s very, very difficult versus switching to short-term. And then developing other leaders, I think that’s fantastic. You mentioned John Maxwell, coming from there. Over the last year, looking at leadership, obviously Covid, to go back to that again, created a lot of different challenges and opportunities. How did you say that you were able to keep people really focused, your teams focused on success and moving forward in so much uncertainty?

– Yeah, and I think all of us were dealing with that last year and everyone has their own ways of leading during times of uncertainty. What I found is, when you have good people in general, they want to do well. But of course during times of uncertainty, they can be scared because they’re not sure of what’s coming. And so as a leader, I think one of the things that you can do is you can be even more authentic. You can be more compassionate, and you have to be able to provide a realistic sense of hope. Some examples of how you can be more authentic is as a leader I think during times of uncertainty, you can more openly and honestly share about what you know and also what you don’t know because especially last year a lot of leaders, they didn’t know. They were kind of like, this is a new playbook. The playbook has not been written with regards to how to deal with the pandemic. So you just have to be authentic because I found that people appreciate the honesty and the openness more, rather than if you’re sugar-coating and promising things that you don’t know may or may not happen.

Then the second is, I think you can be more compassionate, and especially during the pandemic understanding that you have to give people the freedom to finish their work, and you don’t know how or when, and give them the freedom, trust them because sometimes your team members during the day, they might have to deal with their children who are homeschooled because of the pandemic, or they have to take care of an elderly family member, so you don’t know that. But as a leader I think you have to show compassion by giving them the space and the freedom to finish their work the way they see fit. Then last but not least, being able to provide a realistic sense of hope, basically giving people the sense that they are working in an environment that is safe and care about them. And you can do that by celebrating little things. I think last year we had some virtual birthday celebrations. We had some virtual happy hours. This was before people felt a little bit Zoomed out. We tried to really show the team members that, hey, we care. Let’s celebrate the little things. Let’s just make sure that people still feel that they’re part of a community, even though it’s virtual. So I think, yeah, during times of uncertainty, as a leader I think you have to be authentic, you have to be compassionate, and then you can provide this little realistic sense of hope.

– Those are some great points. All of that makes a lot of sense. I love how you said, there was no playbook. Definitely there isn’t, and so I love the comment on authenticity. It’s like, we don’t have all the answers, and saying hey, this is what we know. This is what we don’t know. I certainly love celebrating…it’s kind of funny how you mentioned there before, people were Zoomed out because Zoom fatigue is a thing.

– Yeah. You know Danny, it’s funny because I think in the beginning everyone was, yeah, yeah let’s do virtual happy hour. And then I think after a few months, they’re like, oh, we don’t want virtual happy hour anymore because we’re Zoomed out. Yeah, exactly.

– It’s real. So given your experience working with companies that are involved in disruptive technologies, how can leaders really inspire and foster a sense of innovation and creativity inside the workplace? What have you seen working, and how do you do that?

– Yeah, good question. I think at the end of the day, there’s no template for inspiring innovation and creativity. As leaders, we just need to create a safe space and environment for people to not be afraid to experiment and be able to fail fast, think outside the box. But there are a few guiding principles I would say that I’ve noticed in the past five, six years that seem to be working well. These are just guiding principles; again as I said, it’s not a template, and it really depends on the culture of your company and the culture of your people and what area of technology you’re working on. The first guiding principle I would say is to make it fun because I’ve found that when people are in a fun environment, somehow they become more creative. And so an example that I have on my own team every quarter we have this big planning meeting, and there will be a session where we divide all the people into different teams, and then they went their separate ways and think of one big idea that we might be able to implement for the next year. Then people came back and presented their ideas, so we did it in kind of a fun way, the Shark Tank way, and people become very competitive. It’s fun, and it’s competitive. And then you just got a lot of this very creative, great ideas.

So that’s one. Then the second—and we experienced this probably during the pandemic—is to make it part of your everyday life. I think some companies maybe mistakenly believe in order to have creativity and innovation, you have to have a separate thing, the innovation group because the day-to-day people, they’re just focused on operations. So it’s this big, separate, magical thing that will be more innovative and creative. And I think, as we experienced last year, that actually is not true because what you’ve found is sometimes the most creative things can happen just on your day-to-day because you are trying to, let’s say, solve a problem for a customer, or last year, trying to pivot your plan because whatever you were planning was not going to happen due to the pandemic, or people were trying to achieve more with less. There’s a lot of budget cuts all over the place because of the resources and just uncertainties of the pandemic. And then you found out that people came with all kinds of creative ways to deal with just their day-to-day problems.

And then last but not least, and I think this is very important especially for new businesses in categories that have not been created before. I think it’s very important to mix people from different backgrounds, and what I meant by that is not just diversity in terms of gender or race, but also people from different disciplines, people from different experiences, different industries. Here in this group at HP we have people who came from creative backgrounds, from engineering backgrounds, from big companies, small companies, from different industries. And what you found is when you mix people from different backgrounds you get what I call the value network. Basically what that is, is the interdependencies of these diverse thoughts and experiences contribute something that is much more informed and bigger than individual parts of the network. And so at the end of the day, Danny, I would say yeah, make it fun. Make it part of your everyday life. Then the third one is to mix people from diverse backgrounds that have different experiences.

– I love that. That’s fantastic. I was just feverishly taking some notes. I really like those principles and those ideas because it can be particularly the second point where you said, make it part of everyday life. Where maybe if you’ve got a team that’s dedicated to innovation, well that’s kind of the point, I guess. But when you have a whole department and your whole operations team, they’re seeing things. They’re experiencing things. And a good idea can come from anywhere, right?

– Yeah, and what you don’t want is people who are working in, let’s just say ivory towers because there is a tendency for the innovation group, they are kind of their own group. They’re not out there in the real world. They’re thinking about all these things. But those are just theories, right? Until you actually try it out there, you don’t know whether it will work or not.

– Exactly, 100% right. It’s like a lot of companies sometimes run into issues when it comes to product development. Oh, we think this is a great idea, but the reality is that when you get boots on the ground, it’s not a problem we’re solving. We think it’s cool because we can do it. That doesn’t necessarily mean it’s addressing a challenge in the market. And so I think it’s critical. So I love that, being able to incorporate that in there. I really, really love, as well, the whole, you’re bringing in your Shark Tank ideas, people going in and bringing in competing ideas. I love that, so we’re going to be doing that. That’s for sure. In the past, you’ve talked a little bit about having a growth mindset or being in this growth mindset. Can you share some ideas and perspectives on how to develop that, maybe where you might not have that?

– Sure. Yeah, okay, so first I think there’s already a lot of books and writings and thoughts about growth mindset out there. For me I think the core of a growth mindset is really about having the right positive attitudes and always looking for ways to improve yourself. What I’ve found is some people do this by actively looking for constructive feedback. I think certain industries, they’re more used to this. I think the consulting world, maybe because their main product is their people and their ideas, so they’re very into seeking constructive feedback, acting on feedback.

What’s interesting, Danny, is I’ve learned through readings, through real experience or meeting different people, the truth is a lot of people are not good with dealing with feedback. Research shows that most people are actually terrible at it. The reason for that is because, interestingly, physiologically feedback triggers certain reactions in human beings. The first is, they say feedback usually triggers, the first reaction is the person will try to look for what’s wrong with the feedback. It’s just this trigger that the feedback has on people. Then second is the relationship trigger, how you feel about the feedback will partly be determined by who’s giving you the feedback. Is it someone you respect? Is it someone you don’t respect? How you look at the feedback depends on who’s giving it. But then the most important is what they call the identity trigger, and I read this, I think, in a Harvard article a while ago. They said how you internalize and how you really act on that feedback really depends on the story that you tell yourself about the feedback.

Regarding this story, after the recent Olympics, it reminded me of, I went to a college a long time ago that had some kind of athletes. I remember at the time, my classmates were Olympic athletes. That was the first environment that I was in where I really observed firsthand how these people continue to look for feedback because they wanted to continue to improve themselves. And so I guess in order to have a growth mindset, I think you have to be able to continually look for ways to improve yourself. Most people get it through feedback, and most people are not good at dealing with feedback. But if you can overcome that, you can actually have a growth mindset because every, single—not failure, but every, single opportunity, you look for an opportunity to improve yourself.

– Yeah, that makes a lot of sense. You’ve got to ask. If you don’t have any goals—it’s like taking a tennis ball and throwing it against a wall. If there’s not a wall there to bounce back, you don’t get. You don’t know; where am I? So it’s being open, really, and asking those questions and being vulnerable, really, and I think that’s maybe a piece where people sometimes get defensive or want to look—I love how you said, well we look at the negative in the feedback, like this is wrong. This can’t be right. I like it. No, I love it. It’s fantastic. I can see that being critically important especially in your background, being involved in all these disruptive technologies because it’s constant feedback. You constantly have to look at it and adjust and make improvements, not just, I imagine, from your leadership standpoint, but even just from a business model and from a product standpoint. It’s a constant feedback loop. That makes a lot of sense.

– Totally.

– So as we’re closing, do you have any—share some wisdom, I guess, with some other professionals who are looking to continually want to grow themselves and really develop more leadership capabilities. What would you tell them?

– Yeah, great as a closing. I think the first thing all of us know, I think, is to just accept that it’s a journey. It’s a marathon. You’ll continue on your journey. It’s not a destination. But there are again, Danny, just a few guiding principles that I felt, at least for me personally, it has helped me throughout my journey. The first one, especially given my area and the things that I’ve been dealing with is to have a growth mindset. Have a growth mindset; embrace change. And sometimes you have to even disrupt yourselves before others disrupt you.

Then the second one is to learn from mistakes. This is about getting feedback. This is about not being afraid to try new things because at the end of the day, if you keep waiting until it’s perfect, then you may never grow or learn. And I think if you’re not making any mistakes, you’re actually not growing because you’re not stepping outside of your comfort zones. And then the third one, again because it’s a journey, I think you should celebrate little victories. Some people, they wait for a big thing before they celebrate, but I would say it’s much better if you celebrate little milestones, little accomplishments, achievements, just to remind you that you’re on the right track. And then, I guess this is for some people, especially in the corporate world: always find mentors and sponsors, both men and women because, again, it gives you that diverse perspective. Seek out people who are not from your industry so that they can give you perspectives. What are the challenges and opportunities that they’re facing in their own industry?

Then last but not least, and this is just for me personally because I also talk to a lot of rising stars. A lot of people these days, especially young people like millennials and Gen Z, really focus on their passion. Sometimes I think they get very impatient; that they go into an industry, they’re there for a couple of months, and then they say oh, my God, this is not what I want to do. I want to do something else. It’s not my passion. But what I would encourage people, especially people who are younger in their leadership journey is to think about how you can combine that passion—sure, it’s great to have a passion—but what’s most important is to be able to combine the passion with your skills because hey, you might be passionate about something, but are you good at it? So combine the passion with the skills, and most importantly with the purpose. I think these days I notice a lot of young people, they are seeking this purpose, so that is good. They want to work for companies whose mission and values are aligned with their own values, which is very important. But yeah, combine the passion with skills and purpose, and I think you will feel confident and good throughout your journey.

– That’s some gold right there. That’s some fantastic advice. I really appreciate that, especially there at the end you were mentioning passion plus skills and purpose, aligning that in there. That makes a lot of sense. Passion, sure, you can only go so far with that. Got to match up the skills, and then if you can get the purpose, great. Sonita, listen, I have all kinds of notes that I’ve taken here, so I appreciate you spending some time with us and sharing your insights and sharing your experiences. You have quite the list of experience, especially with these disruptive technologies. Thank you for sharing what you’re seeing in the industry. Things are moving forward relative to 3D printing and digital manufacturing. Obviously there’s a lot of amazing things going there, and also just sharing with us a little bit about your own, a little peek behind the curtain there about leadership and how you view things. I think this is some very, very valuable information. I think a lot of people are going to enjoy watching this.

– Great, thank you so much. Thanks again for having me.

– Well always. Well you know, maybe we’ll do a follow-up here in a year or so and see how things have progressed. We’ll continue the conversation.

– Certainly. Thank you so much, Danny.

– Thank you. Alright, well that wraps today’s IndustrialSage Executive Series. I’ve really enjoyed it. I’m not lying; I have a bunch of notes that I took here. This is fantastic. Thank you for listening or watching. If you are not subscribed, I highly recommend you go to IndustrialSage.com if you’re not there right now, and go ahead and subscribe because you’re missing out on great content like this so you can take a whole bunch of notes and say, hey, this is how I’m going to learn. I’m going to get that growth mindset. I’m going to continue to get feedback and go from there. That’s all I got for you today. Thank you. I’ll be back next week with another episode on IndustrialSage. And I’ll see you then.

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– Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Tompkins Robotics, their CEO and president, Mike Futch. Mike, thank you so much for joining me today on the IndustrialSage Executive Series.

– Thank you for having us. Very happy to be here.

– Well I’m excited to talk with you yet again. I think we had you on maybe about a year ago or several months ago. My train of thought from time is just completely changed with Covid.

– Yeah, I think it was early summer of 2020 right when we were in the middle of everything and all the uncertainty.

– That sounds about right. It sounds like we’re still in the middle of stuff with a lot of uncertainty. But hopefully it’s getting a little bit better. But we’ll jump into that in a little bit here. For those who aren’t familiar with Tompkins Robotics, maybe if you could just give me a high-level on who you guys are and what you do.

– Certainly. Tompkins Robotics is really focused on using a fleet of AMRs—autonomous mobile robots—that we use for primarily sortation. So think about anything from the size of a penny or a business card up to a meter by a half-meter and 30 kilos or 66 pounds. We have different models that can sort small things, medium-sized things, large things, and we’re using those robotic sortation systems to take the place of traditional material handling systems that have been around for, quite honestly, decades. We’ve got a really exciting portfolio of products. We’ve really had some interesting things happen in the last 12 months, so to speak. We’re starting to work with other robotic firms where we combine our technology with other robotic technology. Think about goods-to-person AMRs. Some people say the old Kiva-style system of moving a shelving pod. Think of pick assist AMRs like a Chuck from 6 River. And think about a goods-to-person AS/RS like an AutoStore. We actually have installations where our primary system tSort is bolted to an AutoStore, and the automated storage and retrieval feeds a pick board where the items are placed on our robots to sort out to 500 or 1000 orders.

Our systems are unique compared to traditional conveyorized systems in that everything you see in our system typically is on wheels which makes it portable, mobile. It’s very scalable and modular. And all of that drives a lower cost, higher flexibility, and has really been a game-changer for our customers. We deploy our systems throughout the entire arena, both retail doing ecommerce, store replenishment, returns, shipping. We are doing manufacturing, postal, a lot of different areas. Anywhere that you are sorting individual items for orders or packages to go to a home or business. We even have a micro-fulfillment solution, believe it or not. We just recently had a customer sign up, and the primary reason they signed up was because we could sort eggs with a watermelon behind it, and the eggs are not damaged. And so some really exciting stuff going on there.

– Well quite the varied applications there. Yeah, I could see that being an important thing to be able to make the distinction and handle properly watermelon versus eggs right behind it. That makes a lot of sense. You mentioned earlier on, you said those are some of the changes that have happened. Was that one of the changes since we last spoke last summer?

– Oh, yes. Some of the things like the micro-fulfillment solution which now has actually been sold to several different customers, and others are seriously considering it, we just had the idea when we talked a year ago about doing micro-fulfillment. We hadn’t figured out exactly how we were going to do it. That’s all come about in the last 12 months. We’ve also had some other things that have happened in the last 12 months that have been pretty exciting as well. For example, I mentioned partnering with AutoStore. We’re not an AutoStore distributor, but we partner with some key folks like Bastian Solutions and Kuecker Pulse Integration. That’s the merger here recently. I think it’s been about maybe two months ago. Pulse Integration and Kuecker merged together. Working with them, we’re doing AutoStore and tSort collaborations. We also have a relationship with GreyOrange where we do the goods-to-person AMR delivery to a tSort system. Obviously there’s robotic pick-in-place clients that we work with.

Then we have a new product that is called xChange. This is something we may have mentioned to you last year, but we didn’t really have a good plan for it. xChange is a machine that will come after the four items for your ecommerce order are sorted into a container, or the 40 items are sorted to a store replenishment aisle of less than case quantities to replenish the store shelf. And when that carton is full or that order is complete, imagine if you will, a robot that comes and picks up that completed order, takes it away, and puts an empty back in place. Now what we’ve done is automated the exit side of item sortation. That’s really exciting, and that’s a collaboration we’re doing with IAM Robotics where we’re using their technology and working together to develop a solution to bring to the market in 2022.

– Well it sounds like you’ve been very busy over the last 12 months. How much of this was in the works pre-Covid versus a response to Covid?

– Well I’ll tell you, the xChange, I had a couple of guys at the office wrote a patent on that in ’19, so that’s been percolating for quite a while. It was not Covid-driven. I think the biggest thing that was Covid-driven for us was the micro-fulfillment because when Covid hit and everyone was talking about buy online, pick up in store, and the retailers were struggling, both the grocery chains and other types of stores. We had a little time on our hands because, quite honestly, to be perfectly honest there were a few customers who cancelled or delayed some orders. We looked around and said, wow, micro-fulfillment seems to be something that’s here to stay. It’s grown by leaps and bounds, or at least it looks like it’s going to grow by leaps and bounds. What can we do that’s different from the AS/RS solutions that everyone else offers? The Alerts, the Fabrics, the Takeoffs, the AutoStores, the Dematics, all the AS/RS suppliers for micro-fulfillment, is there a simple, less expensive way to use tSort to get some of the bang for the buck?

We came up with an option driven by Covid and everything that happened in the spring and summer of 2020 using our tSort system to sort the items. So you could batch-pick 100 people’s orders. So you’re going down an aisle picking everything for those 100 orders. I’m going down another aisle picking everything for those orders. We don’t have dedicated inventory like the AS/RS micro-fulfillment solutions. But now I go to the back room to a tSort, and I batch-pick at a 5X the rate of what I get if I’m doing individual orders picking. I use automation to sort it out to the individual order. And so now I’ve got a system that quite honestly is a tenth of the cost, a tenth of the space, and a tenth of the lead time of an AS/RS solution that could go into certain stores. Let’s face it; not every store is going to be justifiable to put a 3 to 5 million dollar AS/RS on the back of it or even at every cluster of three stores. And so we think there’s a market segment where our solution that’s store-based could be applicable for at least certain stores for most chains.

– Yeah, absolutely. Micro-fulfillment obviously—if I had a dollar every time I heard—obviously that was a big challenge that everyone was seeing. Relative to some of these changes that you seem to have experienced, relative to the market, and also maybe even internally from how you’re handling workforce, work from home versus people coming back, of those changes that you’ve seen, what do you think, going forward, that is going to look like? Do you think they’ll stay intact? Is it going to roll back? What are you seeing?

– Well I’ll tell you, I really had high hopes—all of us did—that before the Delta variant came out that things would get back to normal by the end of this year. Now all bets are off, so to speak. So where I really hope this goes is that we can eventually get back to where travel is no longer a problem because the travel restrictions have been a real—let’s just put it bluntly—a pain. Our deployment that we did in Auckland, New Zealand as you can well imagine with the shut-down they had in that country, the folks we sent over had to do the full two weeks couldn’t leave their room except for the little courtyard one hour a day. It was really onerous requirements to get those folks on the ground over there to be able to take the system to a go-live status. So we really want to get away from that.

As far as in-office staff, when we had Covid hit, obviously everybody started working from home except when you had to be in the office. There’s certain things you have to be there because we are a manufacturer, and we have to test systems and do things. But we’re still in the mode right now where you’re only in the office if you have to be. I don’t know for certain if we’ll ever go back to where everyone’s in the office, every day, all day long. I’m not sure that we’ll ever do that again. It may be a new situation that is a mix of in-office and at home, and maybe a few days in, a few days out in a given 10-day period.

The bigger concern for us right now for our business are travel restrictions and accessibility to get to sites and be able to deploy the solutions that our customers are buying. With the Delta variant and the recent developments, I’m really not sure where it’s going. I’m worried that 18 months from now we’ll still have certain restrictions because of folks not getting vaccinated and new variants that may come out. Who knows what might pop up around the holidays? There could be a different variant.

– Yeah, we talked about it earlier about just the uncertainty of everything. We were thinking, hey, at this point that we would be there, all clear. Obviously that’s not the case, and it’s anyone’s guess at this point as to what will happen relative to all the different variables that we’re looking at.

– One other thing on that too, what if a variant comes out that the vaccine doesn’t protect you against? We’re back to square one.

– Yeah, exactly. It’s interesting. We’re starting to see some of that play out a little bit. We’ll see what the future… how that all pans out. I’ll ask you this question. This doesn’t necessarily have to be Covid-related specific or not. But if you had a magic wand—I’m giving you one. What’s one thing that you’d like to see improve or change within the industry?

– Well if I had a magic wand to do anything, Covid would be gone.

– Alright, so here’s the second wand.

– Yes, so that wand doesn’t have anything to do with the industry, so to speak. A magic wand for the industry, there are folks out there that are leaders at firms that have 20, 30 years of using older technology, traditional material handling systems that have been around for decades. And a lot of those leaders have not embraced cutting-edge technology, AMR technology, robotic solutions, et cetera. If I could get those guys to just embrace this new technology, this new frontier, because quite honestly when you think about it, a traditional put wall which many people in the supply chain have used for decades, if you have a system that takes less space, can deploy faster, costs less, and is four times as productive, why would you use the older technology? The same way about traditional sortation systems, whether you’re talking a tilt tray, a cross belt, a Bombay, a slide tray, if it’s less space, more upside capacity, lower cost, higher savings, faster ROI, and by the way with our system, it’s completely portable. You could pick it up and move it to another building. Why would you not embrace the new technology?

At this day and time you would think more people would have embraced robotic technology than have. And what we’re seeing is the people who have an imperative, either through their management has decided that they’re going to lead—and think of people like Walmart and Target for examples—or firms that get between a rock and a hard place because they just don’t have a good solution that they can mass-rollout quickly to adapt to Covid and everything else that’s going on. Those are the ones that are adopting this technology more so than anyone else. A lot of traditional firms that have been around for 50, 100 years even, they’re still doing things the way they’ve done it in the past. And they’re slow to adopt the new technology. So if I could get them off the dime, that would be my magic wand.

– Absolutely. Well that makes a lot of sense. Have you seen—you mentioned in your answer there, but just relative to Covid that’s helped accelerate things a little bit more, at least maybe not even they’ve pulled the trigger, so to speak on these solutions, but just say, hey, you know what, we really do need to look at something else because we’ve got too many operational issues or because of the demand and fulfillment needs have risen exponentially? Has that helped further that conversation or even explore new ways?

– Yeah, it has. Before Covid ever happened, we were already transitioning to more of an each-handling environment, fewer full cases going to stores and being shipped to more onesy, twosy type of operation. And when you’re doing and you’re handling an order that has single items, your labor content goes up exponentially. And then Covid just threw JP-4 jet fuel on the flames and made a maelstrom of hot need for ecommerce to lift fulfillment which has higher labor at the same time you had lower labor availability. It was like the perfect storm. And so the firms that are really trying to get ahead of it out there, they’re trying to adopt to robotic solutions that allow them to scale quickly, roll out across their network very quickly, and adopt to this new reality of life. Some of the customers that we had back in ’18 and ’19, they’re now on the path of rolling out an additional 3, 10, 20 sites and cookie-cuttering out our technology even though the technology doesn’t have to be cookie-cuttered. They just rolled it out across their networks. And that’s really driven a lot of our business.

The business that we’ve seen that really started in the summer of 2020 when the phones started ringing off the hook and there was a flurry of activity about what am I going to do; can you help? That’s driven into a phenomenal 2021 for us, and it consists of new customers, new applications like the xChange and the micro-fulfillment and then large customers rolling out en masse across a lot of sites. And so our year in 2021 will be our best year ever, our biggest year. We actually turned a profit in 2019, so just turning a—we’ve already been turning a profit, but we’ll turn more this year. Given where we are right now, we’re projecting that we’re going to double or better every year for the next three years.

– Wow.

– We think the market is that hot.

– Well it definitely feels hot; that’s for sure. Congratulations on it. That sounds great. Hey, who would’ve thought? Obviously with ecomm, it’s pushing. It’s crazy. You mentioned that jet fuel was poured on thanks to Covid. One question that I’m kind of curious about for those who maybe are a little resistant to change or adopting some of these new technologies—I’m assuming that most companies say, hey, we want to toe-dip into this approach. They’re going to do some sort of pilot program. What does that look like generally overall? I know that probably depending on the application, there’s many different variables. In general a company comes in; they want to do a pilot program at one site before they roll out. From a timeframe perspective, what does that look like on average?

– Our typical first install is six months from contract signed to go live. If you look at the system running over my shoulder here in the background, it consists of these platforms that the robots run on. It consists of induction stands where you put the items onto the robots. And then the robots sort into chutes, into containers where the items are sorted to. And those could be packages, or those could be individual items for an order going to your home. It’s about a three-month lead time to manufacture and deliver all the componentry. There’s about one month at the beginning just doing detail design to make sure everybody’s on the same wavelength. We’ve got our IT blueprinted out, and we know exactly what messages, all that stuff. Three months to manufacture and deliver, and then we install it, and we turn it on, and we’re walking out the door after six months. We’ve done systems in less time, but that’s typical for the size systems that we’re doing these days. Now once a system has been done, we can roll a micro-fulfillment site out as long as the orders are going one, two, three, four, going down the line, you could install a micro-fulfillment system and have it live in two weeks.

– Wow.

– That’s after all the IT integration is firmed up. You ordered it, so when you knock on the back door, here I am; let me in. Two weeks later you can leave, and the system’s operational.

– That’s fantastic.

– That’s for a small micro-fulfillment, not for a big, large, million square foot distribution center doing 35,000 an hour.

– Yeah, wow. Again if I’m a company that’s sitting there saying, yeah, I need to jump on this, from a lead time standpoint, from a production and installation standpoint is there a backlog right now? If I were to come in and sign today—again, relative to how big my facility is and what I want to do; obviously I know there’s a lot of different variables—is there some sort of standard lead time we need to be looking at? You mentioned three months there initially, but from today?

– It’s just like I said there. You sign a contract with us, we’re typically live and walking out the door six months later. When we’re doing a larger-scale program—we’ve got a program that we’re working on with a customer that’s going to be, the plan is to do 18 sites. The first site took six months. Every site after that is planned to go live one per month—

– That makes sense.

– One right behind the other. That’s the speed at which they want to move. We could do it a little faster if we needed to. These are actually sites that are regional facilities across the country for a retailer.

– Okay, that’s good. Good to know. Obviously it doesn’t sound like it’s a super long time to get something installed and moving and rolled out. That sounds pretty cool. One random question—it’s not a random question, but I like asking executives these questions. We get a lot of different answers, and I love hearing this. Obviously you’ve had so much going on. Being an executive, CEO, president of an organization is very demanding and very stressful to begin with. Then you add a pandemic on top of that, and you add all the issues between labor and supply chain and increased demand, all this stuff that’s going on, having to make tons of decisions without having all the information. What are you doing to stay on top of your game?

– Well that’s an interesting question. There is so much uncertainty right now, it’s hard to really know exactly what you think is going to happen six months from now maybe doesn’t happen. As far as trying to keep our business moving forward, you’ll notice when I talk about all the different models like xChange and partnering with GreyOrange and Right Hand and IAM and AutoStore and Bastian and JPI, all that stuff, and then the new models like our, we came up with a mini. We came out with a tSort Plus, so we expanded our sortation portfolio. We are expanding our software as time goes on.

We do research, and we try to think about the real world: what are the problems that people who are running supply chains facing? Obviously there’s the labor issue. There’s also the segmentation of workforces now. It’s nice to have your workers in one area of the building not touching workers in another area of the building in case someone in one pool gets infected. Then the whole building doesn’t get infected. There’s worker segmentation; there’s labor issues. There’s scalability, rapid deployment. There’s a lot of different things, and then there’s combinations of technologies and new inventions like our xChange system to try to automate more steps. And so we do a lot of research and product development trying to think about where the future’s going to be and where could we, with our goal posts and what we’re trying to do, add value to our customers, our shareholders, and to the marketplace? We try to keep on top of that, work very hard to think about where we’re going and what we want to do. And what we’ve accomplished since 2016 is pretty impressive, in my opinion.

The other thing that I try to make it a thing to do is, I think it was Ronald Reagan that used to say, “Surround yourself with a lot of smart people” because a lot of people said he wasn’t that smart. Now I don’t know whether he was that smart or not. I try to surround myself with some leaders and some people who bring some fresh thinking, that help with our growth and our projection of where we’re going and help us stay relevant because you can’t grow a business and double or better every year for four years running and one guy be in control of everything. We’ve got to expand our leadership team, bring new blood in, and grow this thing as a joint effort because it can’t all reside with one person.

– Absolutely. That makes a lot of sense. I don’t know if Ronald Reagan said that or not or—sorry, rather you said you weren’t sure if he was the smartest guy in the room or not, but that makes a lot of sense. Surround yourself with smart individuals, people you can get a different perspective and different thinking and outside the box, stay relevant. I love it. That’s great. That certainly has served you well, certainly over the last several months that we’ve had to deal with this and then some. Mike, I really appreciate the time that you have given us to be able to sit down with you and ask some questions via Zoom. For those who’d like to learn more about your products and your services, they can go tompkinsrobotics.com; is that correct?

– Yes, sir, and Tompkins has no H because sometimes people put an H in it, and you won’t get to the right spot.

– No H, that’s good to know. No H; the H is silent and not present. Okay, but again, thanks again for your time and sharing some insights and just sitting down with you just to chat.

– Well thank you very much. It’s always a pleasure to talk with you guys. I’m looking forward to speaking again, maybe a year from now.

– I think we’ll have to do that. We’ll do a little—we’ll see where things are a year from now. Alright, well great. Thank you. Well that wraps today’s IndustrialSage Executive Series with Tompkins Robotics. I was talking with Mike Futch who is the CEO and president. Kind of picking up on the episode that we did an interview about a year ago. So it would be kind of interesting to go check out the previous interview, see where we are today, a lot of great things, obviously.

If you are an executive who is not subscribed to the Executive Series, I highly recommend go to IndustrialSage.com right now if you’re not there already, if you’re listening or watching on some social media channel. Go there; subscribe because you’re missing out on some great content like this. That’s all I got for you today. Thanks so much for watching and/or listening. I’m Danny Gonzales, and I’ll be back next week with another episode on IndustrialSage.

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– Well hello and welcome to today’s IndustialSage Executive Series. I’m Danny Gonzales, and I am joined with Hytrol Conveyor Company, the president David Peacock of Hytrol. David, thank you so much for joining me today on the Executive Series for the second time.

– Yeah, it’s a pleasure being here, Danny. Thank you.

– Absolutely. Well I’m excited to get into it. It’s been a little bit. I think it’s been about a year or so since we spoke last. Obviously a lot of things have changed since then and continue to change. Before we get into all of that, I would like to, for those who aren’t familiar with Hytrol Conveyor Company, if you could just tell me and our audience for those who aren’t familiar what you guys do.

– We’re a manufacturer of conveyor systems, whether it’s high-speed sortation or even basic gravity. Anything in between that is what we’re building. It’s the systems themselves, the solutions that we’re deploying. Primarily retail distribution; ecommerce is a big part of it. But it’s the systems that go into those warehouses.

– Yeah, obviously that has had a massive impact over the last 12 to 18 months. When we spoke last, a couple big things that jumped out to me is one, you had a great—talking about how to make decisions when you don’t have a whole lot of information. That certainly was a huge piece of last year, and even now. You talked about how there was a lot of changes that had happened in the industry, obviously a lot of work from home and just trying to battle the supply chain and labor and trying to dodge around shutdowns and keep operations rolling. How has your business changed since the last time that we have spoken?

– We were in the middle of a lot of change when we spoke last year. I think we’ve worked through a lot of those issues. We now have work from home as a standard practice, but it’s really a hybrid system now as people started to come back to work on July 1st of this year. As an example, our engineering team now works, published 60% from the office and 40% from home, and that varies from person to person. We’ve stabilized that a little bit. Probably the biggest change is, as disruptive as last year was, our supply chain was fairly solid. This year it’s much more fragile, and we have to spend a lot more time trying to figure out how to get the basic components that we need in to build our systems. That’s a big change for us this year.

– Yeah, we’re hearing that across the board. It’s interesting that you say that last year, you felt like it was impacted, but this year seems to be significantly—what are some of the drivers that you’re seeing that are impacting that negatively?

– One of them is, steel prices have gone up remarkably. If you look back historically over the last three years, steel has been just slightly north of $600 a ton, and right now it’s $1800 a ton. So it’s three times what it was this time last year. It’s not just the price; it’s availability. We’re in a pretty good position. We have a great partner that we work with. But a lot of our component suppliers have struggled. We have actually supplied steel to some of our component suppliers so that they can get us what we need to build products. That’s one of the big changes. I think it’s a result of the extended nature of the pandemic. Everybody had supply chains in place that would allow them to work through short-term disruptions. But we’ve been at this now for close to 18 months, and so a lot of those supply chains have really been impacted and haven’t been able to recover.

– Yeah, absolutely. Obviously steel has been a story for a while, even way before the pandemic when you looked at a lot of the tariffs. Certainly depending on where you were sourcing that steel from and the different kind–were you impacted with that before? Were you not impacted?

– No; well, we were slightly impacted. About 98% of our steel is domestic steel. We’re actually in the first congressional district of Arkansas which is the largest steel-producing district in the country. We’ve got Big River and Nucor are both huge representatives about 50 miles from us. And so we consume a lot of domestic steel, very little external steel, or international, but that still had an impact on pricing. When you put the tariffs in place, prices went up, but it was manageable last year. This year it’s a huge challenge for us.

– Yeah, absolutely. Triple the cost, you’re saying; 600 to 18. Well at least one thing is nice; you said you’re 50 miles away from there, so from a transportation cost standpoint which I understand that has risen, and there’s a lot of challenges there. Hopefully that has had a minimal impact for you.

– Yeah, I can’t imagine dealing with that on top of the price of the steel itself, too.

– Yeah, it’s crazy. When did you start feeling those impacts this year? Was that January? What point?

– Well the way we buy steel, we buy it in advance, and we hold it. So our steel supplier has three months’ supply. It started going up in late fourth quarter, but we all assumed, the projections were that by second quarter it would start to decrease, but it’s just continued to climb. So really March, April, May timeframe is, really started to have an impact, and it just continues to escalate.

– Yeah, wow. Do you see a reversal at any time in the future? What are some thoughts there?

– When it was at $1500 a ton, I said, “It’s going to go down. This is not sustainable.” And now it’s at $1800 a ton. You talk to the steel industry, they say it’s going to go higher. But at some point customers are going to stop buying our products and demand will drop off. And then the supply will greatly outweigh the demand, and that will drive the price down. It would be nice not to have to go through that cycle, that we could somehow come to a balance where demand and supply meet each other.

– Right, you mentioned how you do a lot of work with warehousing and ecomm, and ecomm being a huge story. It was growing exponentially before the pandemic, but afterwards, obviously we threw gasoline on it. Are you seeing a massive uptick in demand, or at least conversations as people are trying to build out warehousing?

– Yeah. Our backlog right now, the orders that we have in hand, are about four times what we have historically seen. Really changing the order patterns, if you place an order, the lead times are extended well beyond what is normal. It’s forcing people to place orders now for things that they don’t need until 2022 just so they can get in line. So we’ve seen a huge change in that to the point that, since we last spoke, we’ve opened a new facility in Fort Smith, Arkansas. We originally planned on having about 200 people work there and producing about $70 million. Now, just in the short period of time that it’s been open, we’ve doubled our expectations of what we need to bring from that facility. By the end of the year we hope to have four other people that work in that facility.

– Wow. You’re saying that happened between the last time we had spoken. Was that in the works originally? It sounds like maybe it was, but it got fast-tracked?

– It was in the works. We were doing a search on where it was that we wanted to go. The state of Arkansas has been a tremendous partner of ours, and so we decided to stay in the state and put a second facility here. We signed the leases on that building on December 23rd. We announced that we were going there on January 4th and told everybody we were going to be producing product by March 1st, so less than 60 days later. We ended up meeting those. We’re continuing to ramp up that schedule, and it’s gone so well with the team that we have in place there that about a month ago the board agreed with us that we needed to put more product in there to try to help our capacity. We can sell as much product as we can build, and so if we can do more at Fort Smith, then obviously that’s the best thing for our customers.

– Yeah, absolutely. It sounds like there’s a lot going on here. Obviously there’s been a lot of changes. We’re talking about the increase in the price of steel, but we’re also talking about a massive demand, work from home options, all these different things. What, going forward, do you think will remain versus roll back? Let’s say specific to demand. Do you see that tapering down a little bit? Or five years, you think that’s just going to keep growing?

– Well I don’t know that anybody’s willing to risk five years, but I can tell you that we know that based upon the conversations we’re in right now, 2022’s going to be just as strong. We expect to continue to see double-digit growth. I expect this rate of growth to continue for at least two to three years. If you forced me, I would say that I’m hoping that it’s going to continue to grow beyond that, but at least for the next two to three years it’s going to be a huge constraint on demand.

– Yeah, that seems to be the story that we’re hearing, and it makes a lot of sense, especially as you have the supply chain issues that are all across the board, across all industries. I don’t care who you are, everybody’s got something. And because we’re so interdependent, it’s just holding up. Obviously the big one in the news is the chip makers for the automobile industry. There’s all kinds of things. That’s certainly interesting. What does the future of the industry look like to you?

– I think we’re going to continue to see the transition of ecommerce grow. We’ve actually been surprised this year that brick-and-mortar is doing very well. But I think what we’ve seen over the last 12 months or maybe 18 months we’re seeing an increase in the transition to ecommerce. We’re going to continue to see that for some period of time until we reach that natural balance between retail distribution and a brick-and-mortar environment versus an ecommerce. That’s going to continue to be the driver. We’ve all learned and come to expect that you can order something, and if you’re in Atlanta, as an example, you can get it the same day. If you’re in Jonesboro, you’re going to get it tomorrow.

I tell everybody; I get a chance to meet our new employees every week when we’re going through orientation. I tell them the story of my daughter wanting a pair of Hunter boots for Christmas. I didn’t realize, and she told me less than a week before Christmas that’s what she wanted. Well they come out of the UK, but fortunately we got them two days before Christmas because they went through UPS’s Worldport in Louisville, and we’ve got a bunch of conveyors there, so our conveyors helped me make my daughter happy for Christmas two years ago. It’s those types of things that we’re going to see continue. We’ve all been trained that we can get something much quicker than we thought we could get it, even two or three years ago.

– Absolutely, you’re 100% right. We are trained, whether it’s information or product, it’s boom, we have it. And so you’re 100% right. That makes a lot of sense. Let me ask you this: if you had a magic wand, and you could solve whatever industry challenge or problem or the opportunity, what would you solve?

– First I would beg for two because there’s a short-term issue that needs to be solved, and a longer-term issue. The short-term is supply chain. The disruption’s at a place, whether it’s computer chips, tapered tubes, steel, all those things, we need to put some things in place so that we can eliminate some of the disruption being caused by the supply chain. But that’s short-term in nature. That’s going to need to work itself out. The bigger challenge—and if I only get one, it’s going to be in manpower. Employee development, the recruiting, the retention of folks, making sure that we have the people because those are the ones that are going to go solve the supply chain issues down the road. That’s what’s going to make us successful. We do a lot of things here. I can’t remember last time we spoke; we actually have a person on staff who manages our academic outreach. She deals with the universities. She deals with the technical colleges, and she even deals with the high schools to make sure that they understand what the workforce needs to look like from our perspective, but also helps us understand, what can we do to help them be successful? So it’s a two-way partnership. But it all comes down to having the people you need to be successful.

– Yeah, absolutely. That makes a lot of sense. Again, that’s a big story we’ve heard. This was pre-pandemic, but obviously now with massive increases in demand, that makes it even that more important and challenging. And so yeah, absolutely, having the right people and having people trained and ready. Have you seen success in those programs where more people are coming in that are more—I guess would you say excited about working? Sometimes we hear that maybe they’re competing against people who might—I want to go work in Silicon Valley, or I want to go work over here. I want to work in these different areas. And I feel like, eh… Is that one of the challenges that you guys have faced?

– You have to divide it into different skillsets. It’s a relay team; everybody has to do their part. Let’s talk about engineers for a second. In the last 18 months, we’ve lost one engineer out of a group of over 140 engineers. We’ve only had one engineer that left the company. So you can see that the work being done both to recruit the right people—we just finished last week; we finished our intern program for the summer. We had 10 folks that were here. We do things that—we pay for their apartments while they’re here, if they’re from out of the city. They obviously get paid. We have a very structured program. We give them a challenge that they get to go work on for that eight-week period of time. It has become a very competitive slot to become one of our interns, and that’s because of the work that the team is doing to attract the very best. We see that as the first opportunity to engage with those students, with the future engineers. Because of the success of the program, we’re getting the types of engineers that we want that feel challenged. And then we continue that same environment once they get on board. As a result our turnover has dropped to very little. Now I can be superstitious on occasion, so I hope I haven’t just jinxed us. But it has worked out very well for us.

And I think if we continue to do those things, then we’ll be successful. You get out in the shop—in the shop those folks are motivated in a different way. Not good, not bad, it’s just different. Their expectations are different, so how can we help them stay safe, make a good wage so that they can take care of their families, and create opportunities? And so we have a path for everybody who comes to work here. We don’t want you to be here for three months. We want you to be here for 30 years. And so we’ve laid out paths that if you come in and you work in the paint system, but you want to advance to something else, then we help you understand what’s required to make that happen and then help you move in that direction so that you continue to stay challenged in the organization. And so that has helped us in that situation as well.

I’ll tell you, in Jonesboro we’ve got 1400 people. We’ve hired 500 people so far this year, but we’ve also lost a significant number of folks because they come in for whatever reason; we don’t retain the folks that we need at the same level. So while we’ve only increased the headcount by about 125 people, we’ve had to hire 500 people to make that happen. That’s an ongoing challenge. Northeastern Arkansas, unemployment is below 4% again. It’s a very tight labor market already in northeast Arkansas that we’ve got to compete for. Even in Fort Smith, it’s a little bit better in terms of unemployment and recruiting folks, but we’re doing things. We put air conditioning in the facility. We’re the only manufacturer in Fort Smith that has an air-conditioned manufacturing facility.

– Wow.

– It costs money to do those types of things, but if we want the quality of people that we need to be successful, then it has to be a win on both sides of the equation.

– Yeah, absolutely. That makes a lot of sense. We’ve been hearing a lot, very similar stories across the board, obviously. It sounds interesting if your unemployment rate is lowering a good bit. I know part of the story—good, bad, or indifferent with federal unemployment—that was a huge challenge with trying to, especially when we’re talking about more warehouse workers and working on the shop floor. That certainly was a challenge. Did you guys go through that at all?

– Oh, absolutely. Trying to go out and recruit people has been challenging. For all the good intentions, some of the unemployment benefits have actually hampered us attracting the people that we need. You’ve got to make sure that people are taken care of, but the opportunities to work exist. And so let’s not incentivize them not. And that’s one of the challenges that we’ve been battling. Hopefully that’s going to resolve itself fairly quickly.

– Have you seen that taper down a little bit now that—I know that unemployment’s supposed to be phased out in September. I believe it’s mid-September, so we’re probably six weeks out or so from that. Have you seen any things loosen up a little bit?

– Well Arkansas was one of the states that opted out of that program in June, late June actually, the 26th. And so that has helped. There’s some back and forth about whether the courts have now weighed in, and so by September that should go away completely. And I think that people are starting to see that, hey, it’s not going to last forever, and so they’re not making the decisions on careers based upon that being a long-term program. So we are starting to see some benefit from that.

– Yeah, obviously a lot of challenges. Who would’ve thought? I can only imagine because I haven’t done this, but running an organization your size is fraught with challenges to begin with. But you add in a pandemic and everything there—my hat’s off to you and to all leaders who have had to really face this. It reminds me of our conversation we had last time we talked about having to make those decisions with very little information and having to move and maybe sometimes you’re making them based off of gut with as much data as you can. But when you have incomplete data, what do you do? My hat’s off to you for that because I know that is not easy.

– Well it helps to have a great team that supports those decisions. There’s not one single person that’s responsible, whether it’s my HR folks, the ops folks, the engineers across the whole organization, everybody’s working hand in hand. It’s how you develop your team leading up to the point that you need this. We’re being successful now because of the work that was done before the pandemic. If you’re in the middle of a crisis, that’s not the time to figure out how to work together as a team. The folks that I have here have done a remarkable job keeping us in operation.

– That’s fantastic. That makes a lot of sense, absolutely. So as the leader of your organization, what have you done or what are you doing currently to stay on top of your game?

– I need to understand where the industry’s going and what the customers are needing. But it goes back to the previous question we talked about, if I could fix one thing. It’s people and making sure that I have the right folks. And so I spend an awful lot of my time, rightly so, engaging with people in the shop, engaging with the engineering group, and just touching base, understanding what the challenges are that they’re facing. How can we help them be successful? But it’s really about staying connected, even outwardly. We have a fantastic network of integration partners, and going to visit those. We’re picking back up the pace on how often we go out. Tomorrow I get to go visit one of our IPs. I had dinner with one of our IPs last night. Later in two weeks I get to go and spend some time with about 20 different individuals. How do I stay plugged into those folks so that I understand the opportunities that they have and how we can help them be successful? It’s all about people, whether it’s internal or external.

– Absolutely, yeah. Well David, I really appreciate your time with us today on the Executive Series. You’ve shared a lot of great insights and information. I know a lot of other leaders are going through the exact same thing, and I love your view on everything, and I love how you mentioned obviously one of the big challenges with being people, and how you’re actively engaged and just getting to know people, understanding their challenges, have some empathy, and then figure out, okay, how can we help solve those challenges? It’s all connected, right? For those who’d like to learn more about you, what’s your website? Where can they go visit you?

– Our website is www.hytrol.com, and you get a chance to meet a lot of our folks if you go there. We’ve got a lot of great videos about the people who make up Hytrol. I would encourage you to go do that.

– Excellent, alright. Well go do that if you’re interested in learning more about Hytrol. And you should because they’ve got a pretty impressive company. So David, thank you so much for your time today.

– Thank you. Appreciate it, Danny.

– Any time. Alright, well that wraps up today’s IndustrialSage Executive Series with Hytrol Conveyor Company with David Peacock who is the president.

So that’s all I’ve got for you today. Listen, if you are not subscribed, you need to go to IndustrialSage.com right now, and you need to go ahead and get on our email list so you don’t miss out on great interviews like this and other content so that you can learn from other leaders. You can see what’s going on in the industry, stay on top of your game, and just take advantage of all of the content that we have at IndustrialSage. So that’s all I’ve got for you today. Thank you so much for watching or listening. I’ll be back next week with another episode on IndustrialSage.

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– Well hello and welcome to the IndustrialSage Executive Series. I’m Danny Gonzales, and I’m here with a company that you’ve likely heard of in the news lately, very exciting, a company called Xometry. And I have Aaron Lichtig who is the vice president of customer marketing joining me for the second time on IndustrialSage. Aaron, thanks for joining us again today.

– Danny, it’s good to see you. Thanks for having me back. Excited to be here.

– Oh, well I’m excited to jump in. Obviously there’s been a lot of change with Xometry for the better. A lot has happened since we spoke last, and I want to jump into all that. So for those who aren’t familiar with Xometry and who hadn’t seen your previous interview with us, can you just tell me who you guys are, what you guys do?

– Yeah, so Xometry is a two-sided AI-driven marketplace for manufacturing on demand. So you can think of us like Uber or Airbnb where you have supply on one side. We have over 5000 machine shops around the world who are part of our network, not just machine shops; 3D printing facilities, injection molding facilities as well. And then on the other side, we have engineers, designers, purchasing managers who are needing to make parts. A couple things make us unique. We have instant quoting and great AI-driven technology that is able to analyze the parts and give you pricing and lead time options instantly. We have a wide range of manufacturing processes available, 3D printing, eight processes that we instantly quote now. We just added binder jetting in our instant quoting engine, metal binder jetting. We also do CNC machining, sheet metal fabrication, injection molding, urethane casting. Those are all available on our platform.

And then on the supplier side of the marketplace, they come, and they’re able to take those jobs, get revenue, keep their cash flowing in to help their businesses stay in business, their businesses to grow. And we continue to innovate on that side of the marketplace as well. We now offer the Xometry Advance Card, the Xometry FastPay that allows small manufacturing facilities access to cash up front that Xometry provides when they take a job from our network. So we continue to innovate on both sides, and the business continues to grow. If you want to check us out, try the instant quoting engine. You can go to Xometry.com, X-O-M-E-T-R-Y dot com and see all the things that we’ve been up to.

– That’s exciting. We’re seeing a lot—we were talking about it a little bit before, some of the innovation and some of the new technology’s starting to come out. I love the Uber or the Airbnb-type models. I think you’re going to be seeing a lot more of those across many different industries and different applications. I think it’s really exciting. As far as, there’s a lot of things that have happened since we spoke last. Probably one of the bigger ones is that you guys went public recently. Maybe you could tell us a little bit about that and some other things that you guys have been up to.

– Yeah, well that is the big news over the past couple of weeks. We officially became a public company listed on NASDAQ under the symbol XMTR on June 30th. So as of a couple weeks ago you can, not just make parts through us or take jobs from us. You can be an investor in our business as well. With any company, last time we talked, we were still pretty small. That was two, three years ago, and it’s obviously a big moment in the evolution of any company, especially one in our space. But for us, we still see it as day one. Manufacturing is an enormous market, and we want to continue to digitize it, continue to change it, make those markets as efficient as possible and be the marketplace for manufacturing in the United States and around the world. We’ve got a lot of work ahead of us to get there and a lot of things we want to do to serve our suppliers and serve our customers better. Going public will help us to do that. So yeah, that is the biggest news in Xometry land over the last month or so.

– Yeah, well congratulations on it. I know it must’ve taken a tremendous amount of work, but it’s a great achievement. So congratulations.

– Thank you very much.

– Yeah, so let’s talk a little bit too about Covid, obviously. I think it’s hard to not talk about that relative to when we spoke last. Now, you said, going public is very big news, but how did that affect Xometry, and what were some of the results of that?

– Yeah, well I think like any business—you’re right. Covid has really shaped our industry and manufacturing in general over the past year or so, and I think it will continue to. But there are really two major trends that Covid accelerated that are relevant to our business and will continue to be relevant to how we operate moving forward. The first is continued digitization of manufacturing. Everybody went from, they weren’t in their place of work for periods of time. They were probably at their house. With Xometry, with instant quoting you can upload parts from your house, get a quote, order your parts, get them sent right to you no matter where you are. You don’t have to have a physical presence. You can do that from anywhere. And I think that trend will continue to accelerate, making those processes more digital versus handing a lot of things back and forth. We want to make that even more efficient.

I think the second big trend is around supply chain flexibility and agility. During the Covid period, you had a lot of uncertainty. You had times where the disease was rampant in some places but not others. There were certain restrictions put in place by different national, state governments at different times. And we’ve also seen this in areas outside of Covid. Climate change is a major factor and can cause disruptions. You have unexpected things like the ship getting stuck in the Suez Canal that are beyond anyone’s control or ability to predict. And I think people are starting to realize and will continue to realize the value of a network-driven approach like Xometry has where you have many options. We have over 5000 partners all around the world, primarily in the United States where you can—something happens somewhere in one part of that network, the network is self-healing. You’re able to move a job to another place. You’re able to find capacity where it is open. And I think businesses will continue to experiment with different approaches there including using manufacturing networks like ours, but also potentially other options. There are many other ways that companies deal with that as well. So I think those two trends, we’ve seen those from the beginning, and they’ve been a big part of our model. And they will continue to be; we have seen those trends accelerate and get stronger over the past couple years.

– Yeah, I think it’s interesting. We’ve heard this story over and over again. If I had a dollar every time I heard about resiliency… But it’s critical. It’s super important, as we all learned. It was interesting hearing a lot of stories of companies that had some of these supply chains, or the resiliency was built in versus companies that hadn’t. We were hearing stories, I remember. We talked to Flex Manufacturing, and they were able to, had never done anything, I think it was in the ventilator space. Within, I believe—and don’t quote me on this–I want to say it was six weeks they were able to completely go through their R&D process and get something on their manufacturing line and get it out there. It was because of the diversification in their supply chain and how they were able to do that and having some resiliency. So it’s interesting hearing these different stories. As you mentioned, these trends that you’re seeing or have seen, what does the future look like? Do you think those are going to stay? Is there going to be pull-back from there? Is that going to increase? What are you seeing or thinking?

– No, I think they will continue to be there. I think Covid was more an acceleration versus a blip in the existing trends. I think the digital technology will continue to get better. We will continue to add more manufacturing processes as time goes on. And so I think you will be able to buy a lot more of those parts digitally over time. I think that will definitely be there. And flexibility and agility will play out in different ways. The next thing that we see may not be a pandemic. It may originate in a different place. It may be something we can’t anticipate. But I think the key is right now if you have a supply chain that is only cost-optimized, single point of failure, it’s going to be tougher to deal with that. We live in a world that is more volatile than what we saw a decade ago or 30, 40 years ago. You need to have some redundancy built in. And something like a network-based approach gives you those options and also gives you, even if there is no crisis, you have a lot more flexibility. You have a lot more different jobs that can be done, a lot more different suppliers and technologies at your fingertips than you would have otherwise.

– Yeah, exactly. I just think it’s very, very interesting. Like you said, a lot of the stuff is accelerating, and I think we’re going to continue to see that. It’s—I don’t want to say exciting—well, in certain areas, yes, it is exciting to be able to see that innovation. A lot of this was happening beforehand, and it was very hot to begin with. The gasoline just got poured on it for better or worse. And I think that that does create—there’s a lot of interesting opportunities that have been created, and there’s a lot of innovation that has been pushed, the need for more Xometrys in the world. One thing that I’d like to ask is that, if you had a magic wand right now and you could just snap your fingers, what would be that one thing that you would want to change or see updated or improved in the industry?

– Yeah, at large, a couple trends are really interesting to me. I’m still fascinated by 3D printing and everything that is becoming possible there. You always want some of those trends and the really cool stuff that’s out there to move even faster. Everything from continued better technologies for production parts—I think that will continue to be a trend that’s going to reshape a lot of different industries—to some of the fun stuff in 3D printing, like we made parts for an entrepreneur who built one of the first chocolate 3D printers. You can 3D print some chocolate. It’s really cool. It’s not going to reshape industry, but it’s going to be a cultural touchstone for a lot of people. It’s going to be something that people use and have fun with. So I think that is a big one. And I think in general, I love the fact that manufacturing has become more digital overall and has become more accessible and easier to use.

Xometry’s mission is all about democratizing and making manufacturing accessible to more people. Anyone, whether you work at NASA or you’re an individual entrepreneur or an artist, you can come to our website and take advantage of the full range of capabilities that we offer and that manufacturing suppliers in our network can provide. It’s not like you have to be a big company to get access to some great technologies like Carbon DLS and HP Multi Jet Fusion which are really at the cutting edge of 3D printing. You can come do those tomorrow, get great parts shipped to your door in as little as a day in some cases. I love the democratic spirit of where manufacturing and digital manufacturing in general is heading. Manufacturing as a service does allow innovators to move faster. If I had my magic wand, I would want everyone to be able to do this because we need more innovation in the built world. I think being able to access that through our platform and through other sources as well, you can make five prototypes very quickly whereas before, you maybe could only make one slowly. Over time, those advantages are going to compound. You know this as a marketer, too. The first thing you do doesn’t always work. It’s really all about—

– What are you talking about?

– How fast you can test things, how fast you can grow, how fast you can push forward and get feedback from your customers. And so if anything, I would just want to wave that wand and move it faster and make it accessible to more people around the world.

– I think that’s super exciting, that accessibility piece, the democratization as you were talking about there. To be honest with you, I’ve always wanted to develop some sort of product. I don’t have that engineering mind. I have great admiration for the people who do that. You can see just some amazing innovations. But I think by opening that, that does open up the playing field so that hey, I have an idea. We want to do this. Let’s prototype something out there. To be able to do that I think is very, very, very cool, and I’m sure you probably have a lot of stories, like you were mentioning the 3D printing chocolate that you’re enabling people to be able to do, large and small.

– Yeah, we have examples from some of the largest organizations in the world where we worked with NASA on parts for the international space station. We worked with BMW on factory tooling for some of BMW’s best and most advanced manufacturing facilities. But we have also worked on some really interesting projects with smaller entrepreneurs. Building a 3D chocolate printer is pretty cool. We also worked on a great project with an organization called ClearMask which made masks that are transparent. During Covid it became very relevant to everyone. It was initially started by an entrepreneur who was hearing impaired, and that is a major challenge for people who are hearing impaired in a medical setting or another setting where masks are required. So helping to make that innovation come to life is really cool and shows that level of, we work with a NASA, but we also work with people who are just getting their ideas off the ground.

– Absolutely, I think that’s very cool. I want to pivot to you a little bit now. I would be curious to know, what are you doing yourself—this could be because of Covid; could be not, whatever–to stay sharp? What are you doing to stay sharp as a leader? You’re VP of customer marketing over there. You have any magical things you’re doing?

– Yeah, in addition to continuing to learn about everything that is available from a marketing perspective and refined channels of messaging, I think one of the big ones that’s different from the last time that we talked was, I launched my own interview series, so trying to be the next Danny Gonzales. A poor job of it, but talking to some of the most interesting engineers and forward-thinking creative people in the space of engineering and design. Just by talking to them, it gives me a good perspective on what’s going on in the industry, where things are heading.

I’ve talked to some really fascinating people from all different realms, professional racecar drivers, BattleBots contestants, people who are working at a variety of companies, coming up with different ideas. It helps me stay in touch with what’s going on in the marketplace and also to think about some things that I hadn’t really thought about. I had a guest—and this was before the Mars landing, well before—talking about how 3D printing can be used to take Martian dust and turn that into a material that you can use to 3D print real, physical objects in an extraterrestrial setting which I had never really thought about, but it’s just at the far edges of what some of these really cool technologies can do. Xometry someday, we might be active on Mars, have manufacturing partners up there as well. It’s pretty awesome to think about.

– That’s super fascinating. I think that’s awesome. What made you want to kick off the podcast? What’s the name of it, and then what made you say, “Hey, I want to do this”?

– Yeah, it’s called Ok Xoomer, in reference to, “Okay boomer,” but I’m too young to be a boomer, so we went with that. What made me want to do it, I think during Covid, I think a lot of people were consuming more content, and there was a bit less of that human touch. On a personal level, I just missed that, talking to interesting people every day that I got to do that when I worked at Xometry and in prior roles got to work with fascinating people who were sitting right next to me. I didn’t have as much of that anymore. I just wanted to get out there and keep learning from people, keep interacting with people, and sharing that type of knowledge with Xometry’s customers and suppliers.

– That’s great. When did you start it, and what results or what have you gotten out of it? Obviously you’ve been able to talk with really interesting people and whatnot, but from a marketing standpoint, or for sales?

– I started it, I think we recorded the first episodes in April of 2020, so it’s been over a year now. We have 61 episodes. They’re on Xometry’s YouTube channel. We do it mostly over video format, over Zoom. What have we gotten out of it outside of thinking and ideas? We do get them out on our social platforms. We will send them around to customers and partners who are interested in them and share them generally with different communities online. It’s not the primary marketing vehicle for Xometry or anything like that, but it is a way for us to introduce ourselves to some new people and have them see Xometry as someone who’s providing them interesting, entertaining, and informative content and not just a company that is a manufacturing business with a quoting engine. We are about ideas, and we are about being on the cutting edge in a number of different areas.

– Awesome, excellent. That’s really cool. My mind is racing a little bit on that. I have been seeing this a lot; obviously we’re seeing this before a little bit more, and this is off-the-cuff here, but do you think, or are you seeing that companies have, there’s going to be a growing need from a content standpoint to be able to either create their own content, or community, rather, around their content and around their brand? It seems to be part of what podcasts and these different types of content series are doing. Are you seeing that? Is that something you think in the forward years, that might be a bigger thing, or fleeting?

– Yeah, for sure. I think content and community are important for just about every business in every industry. Humans are social, and humans do like to interact with other humans, and I think more so after the pandemic where we had periods of time where that was more limited. I think that it will continue to be something that’s huge. Xometry, we have a supplier community now where our suppliers can go to our site and discuss things with us as well as with each other, which is really interesting. There are a variety of other interesting communities online that are starting to develop in our space, whether they’re more bulletin board-style or things like Slack Communities and Zoom gatherings that are late at night with people from around the world. I’ve done some of that. We did our first Clubhouse event back in February, which was a cool experience and met some great people there who ended up being guests on my interview show. I think people are hungry for community, and having a direct voice to your potential customers is always a good idea.

– Yeah, absolutely. I’ve really enjoyed this conversation. We traversed quite a few different topics here, but I think it’s super interesting and fascinating. Obviously you guys have got quite an interesting story, and it sounds like it’s just beginning now. I’m excited to see where things are going to go. Thank you so much for spending some time with me today and with the IndustrialSage audience and community. Like I said, congratulations with the achievement of going public, and obviously like you mentioned, a lot, a lot of more work ahead. So we’re excited to see what you guys do.

– Thank you very much, and it’s a great moment for us and a testament to the work of many people and certainly to all the hard work of our customers and our partners as well, making what they make and building what they build. That’s really what it comes down to. That’s the most important thing. Yeah, we look at every day as a new start and day one and a lot more opportunity for us to push forward and better serve the customers and suppliers on both sides of our network.

– Well excellent. For any of those who are interested I’m sure you could check out, go to Xometry.com.

– Yeah, X-O-M-E-T-R-Y.

– Xometry.com, and then the podcast, I’m sure we could find that on iTunes or Spotify or something like that.

– It’s on Xometry’s YouTube channel.

– Oh, that’s right. You mentioned that.

– That’s the primary vehicle, so check out Xometry’s YouTube channel. Just type in Xometry on YouTube, and you’ll see all the episodes there.

– Cool, we’ll make sure to put the links on there for people who are interested in learning more about Xometry and certainly the podcast, they can go take a look at that there. Aaron, thank you again so much for your time. Maybe we’ll do a follow-up here in another year or two. We’ll see what happens and go from there.

– Sounds good.

– Alright.

– Thanks again for having me, Danny.

– Thanks for being on. Alright, well that wraps today’s episode, another great episode on the Executive Series. I think it was a fascinating story. I think it’s really interesting to hear about Xometry and how they’ve gone public, obviously hearing a little bit about what Aaron is doing to stay on top of his game. I love the fact that they launched a podcast doing this in the midst of Covid and just building communities and learning from other people and really staying connected that way.

Anyways, that’s all I’ve got for you today. Thank you so much for watching or listening. If you’re not subscribed, I highly encourage you to go to our website, and you can subscribe there, get on the email list there. Or if you’re on Spotify or iTunes, anything like that, you can certainly subscribe there. So that’s all I got for you. Thanks for watching. I’ll be back next week with another episode on IndustrialSage on the Executive Series.

Thanks for reading. Don’t forget to subscribe to our weekly newsletter to get every new episode, blog article, and content offer sent directly to your inbox. You can also subscribe wherever you download podcasts so you can listen on the go!

– Hello and welcome to today’s IndustrialSage Executive Series interview. I am joined by Paul Konrath who is the president of Custom Control Sensors. Paul, thank you so much for joining me today.

– Pleasure.

– Well Paul, this is not your first rodeo with us. This is the second one. We did an interview with you a couple years ago, and I think this was before we actually had the Executive Series. So excited to have you back and learn more about you and about your company, Custom Control Sensors.

– It’s a thrill to be back. Thank you very much for remembering me and inviting me back.

– Well I’m excited to jump into it, learn more about you. We were talking about some stuff in the preshow here which I think is going to be very interesting. But before we get into everything, maybe if you could just let me know—I know, but the audience—who Custom Control Sensors, who are you guys? What do you guys do? What’s your history?

– Sure, sure. We’re a 60-year-old company that has developed, designed, introduced pressure and temperature switches and sensors, mainly into the aerospace, defense, and industrial markets around the world. We have global markets, and almost every kind of plane has our products on it. Lately we’ve been introducing new technology, new types of sensors to especially aerospace, but same with industrial. We’re out here in California which is our main location. But we operate around the world, so it’s a global company. It makes it kind of fun.

– Excellent. Well I guess we’re going to get into this here in a little bit more, but before we dive a little bit more into the business and challenges that you’re solving, this is the time that we’d want to get to know you a little bit better and learn how you ended up as president here. How did you end up with CCS? How did you end up in the engineering space? Take us back.

– Okay, yeah, and it’s funny. You had given me some homework to do before we got together. It did make me think things I’ve never really thought much about. Me, I’m a Midwesterner, and one day I was filling out a form to go to school. A good friend of mine, he actually became my brother-in-law eventually, suggested engineering. At the time it was simple; okay, fine, I did that. Next thing I knew I was five years of engineering under my belt. It was a good time to be studying engineering. I think it’s a better time now because engineering runs the world in a lot of ways. Anyway, I came out of school and wasn’t quite ready for the workforce. I did some interning. I did some co-opping. Those are all good programs. So I had a little experience, but I was a lousy engineer as far as I could tell. So I got an opportunity to travel; then I went back into grad school and got an MBA which, in my eyes, I was blessed by a professor who, at the time, could see the benefits of an engineer with a sense of business.

The irony is all through engineering school, we picked fights with business students because we thought we were better than them. But in the end, as my father one time said, it’s the business guy who hires the engineer. So I got a business degree as well, and that really put me in a good position. And as I mentioned, I did some traveling. I biked around Europe for a summer which taught me a lot about myself as well as travel and taking on new challenges. I had the benefit of growing up as being in the Midwest, coming out of Milwaukee which is my hometown. You could travel around America which we did in an old, beat-up station wagon and see the country and realize you can leave Milwaukee and go other places and survive.

And so I came out of school, and pure luck, somebody called me out of the blue and offered me an opportunity with a company, Texas Instruments at the time. I had a couple requirements. I’m an engineer; okay, I wanted a company that was technology-based, well-respected, well-known. TI had a good reputation. Obviously a heavy driven engineering company. On the other hand, they had some of the worst sales and marketing experiences because they were engineering-driven. So it was a great time to go to Texas Instruments. Nobody could second-guess me because there weren’t that many people there who weren’t engineers or who had a business degree. So that got me started, and I moved out of Milwaukee. It’s a great place to be from. In fact, I was just there over the Fourth of July, and it’s still a lot of fun in the summertime. But I never looked back.

The funny thing was I went to Texas Instruments in Massachusetts and New England. I was there mostly in marketing and got into sales. Somebody suggested to me one day out of the blue, hey, you might make a good salesman, being an engineer. I never wanted to be a sales guy. All I could think of is used car salesmen. And this is no offense to used car salesmen because I respect them now. But at the time, oh, my God, I don’t want to be a sales guy. And yet I took the chance, and that’s something I think somewhere along the line I learned about, hey, if it’s a reasonable challenge—reasonable meaning, what’s the worst that could happen? Go on and take the chance and see where it goes. So I moved into sales, and that made me a better marketing person when I went back. At the time, I was middle-career I suppose you could call it, and I was getting a little frustrated.

Again, another person came up to me and gave me some good advice, said you may not be thrilled to be a mid-level marketing guy at Texas Instruments, but—his words, some of these, they always haunt me as being too simplistic—but it was bloom where you’re planted. Now, if you picture the guy who told me that, those words coming out of his mouth did not–he’d always been kind of a hard-bitten kind of guy, and here he was talking about flowers and bloom where you’re planted. But the interesting thing was, the message I took was maybe this isn’t the perfect place I want to be in, and maybe I’d like to be someplace else. But do the best job you can while you’re here. And people noticed. Next thing I know, somebody else came along and took a chance on me, partly because of that attitude. This may not be the place to be, but I do a good job—and moved me into operations for a while. That was an eye-opener.

When you’re in sales and marketing, you can say all you want because it’s expected a little bit. I’m in marketing; I’m in sales. But when you’re in operations it gets a lot different. And to me that was one of the hardest jobs I ever had, dealing with people on a daily basis. You become part of their—you hear their problems. You hear everything about their families, and you still try and get work done. But it was a good experience. Then out of the blue I got a call to another company that was headquartered back in Milwaukee. It might be fun to work for that company. Again, it was out in the East Coast, but I could go back to Milwaukee and visit my family “on company time,” as they would say. So I did that for a few years. At the same time I kept my—I wanted to work internationally because the world’s getting smaller, and if you don’t understand—especially in our industries, industrial, aerospace, even defense in some ways—if you don’t understand what’s going on outside your local office, you’re missing opportunities.

So I had done a good job in marketing and some program management. As luck would have it, my boss became responsible for a company over in England. He was one who couldn’t relate to the British, so he asked if I would. So I went over with my family for a couple of years, had a nice time, big experience, broadened my horizons. That opened up other doors for me. Again it was a challenge. Do you want to move your family to England or anywhere? It was a reasonable challenge. It was a certain risk, I suppose. Who knows what happens? When it came time to coming back, we ended up in California which probably wasn’t my wife’s plan, but it was an acceptable plan. The kids loved it, so here we are in California.

And I had worked in large corporations for most of my career. I said next time I move, I want to move to a smaller company, a little flatter organization. The opportunity arose, and I’m in a relatively—CCS, Custom Control Sensors, privately-held company. It’s been under the same general family for 60 years. The owner is my boss, and it’s a very flat organization. So that got me here. The pandemic tossed a few curves at us, but eventually—and one of the reasons I came here, again similarly like when I went to Texas Instruments, the owner said, “I really don’t know much about sales and marketing.” Great; you won’t be second-guessing me, necessarily. I suddenly became the smartest guy in the room when it came to sales and marketing. That doesn’t happen in a big corporation where you have a lot of layers and a lot of people second-guessing or telling you this or that. Your ideas, you can’t please everybody all the time. Here it’s a lot easier to please. I only have to please one or two people, and I’m okay with that. That’s one of the attractions of a smaller business.

– Yeah, obviously you have a very storied career, going around and with travel and not just from a geographic standpoint but also from different departments, obviously going from marketing to sales. You see that pretty common, or sales to marketing. But ops is definitely, it’s where the rubber meets the road right there. That’s when the ops guys start yelling at the sales people. What the hell did you just sell? We can’t do this!

– What were you thinking? But I remind him that nothing in a company happens until something is sold.

– True.

– The rest of you guys can all just sit around, and until the sales guy produces, you’re all support. Granted, to your point, once I sell something, then I’m hoping the operations guy believes me and makes it happen.

– I don’t know what you’re talking about. We’ve never run into that here. I’m curious. You said that you did engineering. What kind of engineering did you study?

– I started as a biomedical engineer because I had great dreams of designing and making artificial limbs. But I found out that the school I was going to, their definition of biomedical engineering was essentially pre-med, which I could not see myself as a doctor. So electrical engineering was a huge overlap between—in fact, if you walk into an operating room today, it’s more of an electrical engineer than it is a doctor in some ways. Now they have, the doctor drives a robot that does the surgery. So I went into electrical engineering and stuck it out. I’d still be there if it wasn’t for some good friends and some fraternity brothers that helped me out in tough times. I’m not a very good engineer, but I get the concept.

– It sounds like that’s helped a lot. Obviously it’s very difficult to get into a very technical—getting into technical sales or anything. Obviously when you were at TI, from a marketing standpoint, being able to relate to the audience, depending on who you’re selling to certainly you’re going to likely be selling to other engineers. There’s other stakeholders involved there, but being able to at least somewhat talk the same lingo helps tremendously. And then obviously in operations, that’s kind of a given.

– You’re absolutely right. To be able to walk into somebody and have a technical—one of my focuses was, I want a technical product. When I interviewed with companies, and when I looked at a company, I would look at the product. Is it technical? Are they a leader in the marketplace? Are they well-respected and have a great quality reputation? Those are the three deciding factors. It didn’t matter where they were located because I’d move around. And it didn’t matter a lot of other stuff. But if it was a good technical product, well-made, highly reliable and a good quality reputation, that makes my job as a sales and marketing person all the easier.

– Throughout your career you talked about that there were different people that approached you, said hey, you’d be good in sales, or hey, do you want to move your family to England and help. What’s one person or moment, maybe, that comes to mind that really, you think had a big impact? I know there’s probably multiple. Most of the time there is. But what’s one that stands out?

– Probably one of my first bosses, Ed Iannotti. I’ll always remember him because, one thing is he took a big chance on me. He was willing to look at someone and bring him into an organization and stand behind me and give me some sense of direction, but at the same time freedom to do what I wanted to do, to learn, to fall, to trip a little bit, nothing fatal. He also taught me that I could have a relationship with my “boss” where it wasn’t all one way, that he would actually ask me what I thought and use my opinion. And here I was, a rookie, newbie, whatever you want to call it. He taught me early on that everyone has an idea. In my position now, I’m more of a consensus. I’ll sit in a meeting and try to draw the quiet ones out because they probably have good ideas, but they’re just overwhelmed by the other ones. That was one of the things that taught me about listening. Listen to the people, working with the people under you. I don’t like to use that term.

But that was one; he was a big one, took a shot on me. And so did Ray Tarangela who gave me the operations job. I’m a sales guy, a marketing guy. I had very little, if any, operational experience. And he said, I’ll take a shot on that. And he taught me more about operations. Again, he said here’s the basics; just make sure—he taught me early on when Kaizen was new, when using Kanban was new. He taught me that—we had people running presses, and they spent more time with that press than they did with their spouse. But when you went up to them and said, “Take care of that like you want; do what you want to do to it,” all of a sudden the place cleaned up, and it ran smooth. So again, he was the kind of guy that opened up and said, “Give it a shot. Give it a try.” There aren’t any bad ideas except the ones that you don’t try.

– No, it’s great, yeah. So I’m just curious. Your day-to-day now, obviously, it’s a little different. What’s a typical—I know I didn’t ask you this ahead of time, so I’m throwing you a curveball.

– Yeah, that’s all right.

– What’s your typical day-to-day look like?

– You know, I wouldn’t say it’s real regular, but you usually come in and you check emails, see if there are any disasters. I got the smartphone, so I know if something goes haywire overnight. I’ll probably hear about it before I get here. But first of all, it’s a very good team here. And if you let them do their job, more often than not they’ll do the job. So I come in, I’ll check emails. If any one looks like a crisis, that might be one I focus on. I try to get all my meetings in the morning. One of the benefits of, if there’s such a thing as a benefit for a pandemic, was video conferencing because I can sit in my office. I can be in a meeting. I can be doing some other things if it’s not me that needs to contribute. I can get people who—trying to get people in a conference room sometimes, one is first getting them there. Second is, at the end of the meeting they want to sit around and shoot the breeze. The beauty of the video conference, you can turn it off and go on to something else. I’ll do that in the morning.

I have a number of projects that we’re working on. Some of them are creative; some of them are longer-term. I try to put those in the afternoon. I go out and—I believe in management by walking around. It’s well-worn at this point. But get out and just talk to people. Say hi, what’s new. And how’s that thing work; what’s it do? How’s your day going? I think the people that work in this building, they like to know that upper management is around, is participating. Sometimes you help somebody out. Somebody complained about the air conditioner not working. I’m sure they told the maintenance guy, “Hey, the air conditioner isn’t working,” but if I see the maintenance guy and I suggest you might want to check that guy’s air conditioner, he’ll do it. The people appreciate that. That’s my day, and then usually I check emails before I leave, too, in case I missed any, and wrap it up. I try not to take work home. That’s why I come here. If I travel—and I haven’t traveled in a while, but I like to travel. So then when I do travel, that’s a little more chaotic. But again, and we’ll see how that goes post-pandemic, how travel goes.

– Yeah, absolutely. Speaking of the pandemic and everything, I’m just curious for your organization. How much of an impact did it have for you, and what did you learn from it?

– One of the biggest things is it blew us out of our comfort zone. CCS is, in some ways, very old-school. You came; you worked from six to whatever, whatever. You’re at your desk, and suddenly—and we have a large engineering staff. We have sales and marketing and production control. And suddenly California was probably a little aggressive in some of their mandates which, okay. Suddenly you couldn’t go to work, and we scrambled. And next thing you know, within a relatively short time, most people were up and running from home. I was impressed. Our IT gentleman Rod just did an outstanding job wiring us and getting us up. Henry, our CEO, was also very accommodating, just saying, “Whatever it takes, let’s get it set up. Make the people comfortable.” And we did a good job of sanitizing the plant and getting people back in relatively quickly with… one thing is—we’re proud of this—there were no transmission cases of Covid in the company. We were up and running within a couple weeks after the original shut-down. We’ve kept it clean. We finally just stopped wearing masks. If you’re vaccinated, now you don’t have to wear a mask.

So it’s amazing how fast we moved from an at-your-desk, nine to five to working remotely and Zoom meetings and WebExes, and we kept it going. I think that taught us that we can be flexible. Now people are, can I work remote today? We don’t necessarily encourage or discourage it, but it’s an option that we didn’t have before. So that was great. It taught us that we could recover, and it taught us that we could be a little more flexible with people and their work environments. On the other hand, in some ways, I consider the pandemic a bit of a speed bump in our business. The aerospace business was booming in 2019 into 2020. Industrial was doing fine. Then all of a sudden, it’s amazing how you think you planned and projected and forecasted everything and didn’t see that one coming. In some ways, though, that speed bump helped us catch up on some things. It helped us work on some projects that, because things slowed down, we could work on some things that we were putting on the back burner. It got some other projects kick-started because ecommerce and digital marketing suddenly taught you how important digital marketing and ecommerce is because you couldn’t talk to people. You could call them on the phone. But it jump-started a few of those programs as well. I don’t want to see another pandemic, but I could find some silver lining in that cloud.

– Sure, absolutely. And I think it’s a story that we’ve heard over and over again. Obviously yes, nobody wants to go through that again if we don’t have to, but certainly silver linings in terms of what, being able to learn. The flexibility is a piece that we hear a lot of. It’s always interesting hearing about different impacts. We deal with a lot of companies in the material handling space, and they’re still going nuts. Talk about accelerating business and just—but then everyone’s dealing with supply chain issues still relative to labor and resiliency, just the whole nine yards.

– I don’t think we’ve seen the end of it.

– I don’t think so. Unfortunately I agree with you. Some of it I think is self-induced. Other stuff is just, things are still running its course. That being said, from challenges that you see in the industry right now, what are the things that you’re seeing that you see on the horizon, whether they may have already been here pre-Covid or maybe not. What are you seeing?

– From a change in the way our industry works?

– Yeah, in the industry, the way that it works or, yeah.

– When we say industry, I see myself flipped. Our customers’ industry is probably more important. My industry is sensors and switches and measurements. That’s always going to be important because sensors are the fingertips of the internet. It’s the sensors that are the eyes and ears of the machine and the systems that they run. And they become more so as people found out, hey, I can’t always depend on people being here, so robotics is more important. Automation is important, and we’ve embraced that here as well. I see that our business in terms of sensors and switches is pretty solid going forward as long as you’ve got the right types of switches and sensors. As far as industry goes, I think everyone appreciates the supply chain a whole lot more than they did a year and a half ago. I’ve seen a few industries back off the pressure for what used to be low price, low price, low price. Suddenly now it’s more, is it a good value?

I’ve always preached, we’re a good value. We’re not the least expensive. We never will be, probably not the most expensive. But we’re going to give you the value you’re looking for. I think this whole pandemic has made people like the aerospace industry and energy and power and oil and gas a little bit more respective of, yeah, okay, this company provides support. It gives me a good value. It gives me a good product. They’re there when I need them. So I think you’re going to see a little less pressure on cost, cost, cost and a little bit more on, are you there? You’ve seen the move from foreign supply back to domestic supply. That’s not going to go away until somebody starts to say, “Hey, can I get it cheaper somewhere else?” Then hopefully somebody will say, “But remember what might happen,” or, “Remember what happened the last time.”

I also see some larger companies reaching out financially supporting some of the supply base because they’ve put the supply base at risk with their cost-cutting. Then all of a sudden the demand disappeared, but you can’t make an airplane without certain parts. So now the aerospace industry has to carry some suppliers to keep them in business. I don’t think they like that, but they realize that we have to make sure that our supply base is financially viable even in a certain risk environment, God forbid another pandemic.

– Yeah, it’s interesting just the inter-dependability across everything relative to supply chain. You look at globalization and just how the impact there. It’s a lot to unpack. I think the whole question around lean manufacturing is being re-looked at. Well, okay, maybe we pushed that a little too far.

– Leaned it out a little too much.

– Yeah, exactly. And aerospace—I’m a pilot—you lean too much of your fuel to air mixture, and you’re going to lose an engine. So we can’t go too lean.

– That reminds me, yeah, I was going to tell you. You’re a pilot, and one of the things that happened during the pandemic, was one of my children started flight school.

– Oh, awesome. That is very cool. They get the pilot’s license yet?

– Not yet, not yet. He’s about halfway there. The goal is to be a commercial pilot someday, so we’ll see where that goes.

– That’s exciting. Well, as an aside, and I’m not exactly sure. Obviously Covid messed with things a little bit. But there was a big pilot shortage coming up in 2028 I think was supposed to be the peak. I don’t know now. It probably is still there.

– Yeah, it hasn’t changed a whole lot. One of the— and I’m not a pilot, so I don’t have to worry, but retiring at 65.

– Exactly.

– Pilots can still change. They were still retiring. They turned 65 during the pandemic, they had to retire. And so granted demand is down a little bit, but in some ways the airlines are lucky they weren’t making new pilots either at the time. So the pilots were retiring, but you weren’t replenishing the pool. And now suddenly the pool is kind of low. And it’s not just pilots. It’s flight attendants; it’s maintenance. It’s a lot of other stuff that’s impacted the industry as well. I would like to think in the next five years they will get back together, but—

– You never know. I would think so, but to your previous comment that you made earlier just in the way that we’re doing business now and being more open and adept to video conferencing, for example. Go-to-market strategies, I know there’s a big question right now in terms of business travel, and I’m sure it affects you guys as well and what you’re thinking. But I’m hearing a lot of companies have, you can travel now, but a lot of people are like, you know what? I don’t know that I necessarily need to from a business standpoint. Maybe I don’t need to travel all over the place for all these meetings when I can do this over Zoom versus—So it’ll be interesting, I think, to see what that impact will be.

– You made a very good point. The airlines certainly want business back. I’ve learned that we won’t always be able to get out to that person, so we have to find more ways for them to find us.

– Yeah, exactly.

– Going back to that digital marketing, that whole idea of helping people find you and make it easy to find, easy to buy, easy to do business with. And once they find you, can they buy your product? We’ve obviously pushed in that direction so that not only are we easy to find, but it’s easy to buy our product. But that’s the leverage that I try to tell my sales people, marketing people is you used to have to get in the car and drive to these meetings around the city. If you do this right and you do it well, you could stay in your office and do twice as many introductory meetings, meet-and-greets. Hi, is there an interest here? Can we get together? And we’ve learned to do that with larger corporations too. I can now address a number of engineers while they’re at their desks and say hey, do you want to join for this WebEx? Let me just talk to you about it. And if there’s an interest, I’ll be happy to jump on a plane and come up and see you. But I can talk to five or ten of you in an hour whereas I could only talk to two or three of you in a day after I travel all the way up there. So I see the benefits of video conferencing, the digital marketing, the ecommerce, and maybe that’ll make the business travel all that much more efficient and effective because I still believe eventually customers would like to see the person from time to time.

– Oh, yeah.

– They always do better in person.

– Oh, 100%.

– I believe your father was a salesman, or is a sales person. And so the selling job hasn’t gone away. How you go about it, obviously, is changing a little bit.

– Yeah, certainly, and I’m sure it will continue to evolve. And it’ll oscillate and go back and forth. It’s an interesting observation; kind of an interesting tangent, too, talking about, getting in with the whole pilot thing. It worked. So Paul, one last question I want to ask, and again, I didn’t send this to you because I like asking people this off the cuff. So get ready for the last curveball. Sorry. And that is, what are you doing as a leader of your organization to stay on top of your game?

– Okay, one is I’m not sure I’m ever on top of my game because I’m still learning so much every day and new things come up every day that you think, where did that come from? But one of the things is, I like to read. So I’ve been reading leadership books and articles because a lot of people have gone before me, have done a good job at being leaders. So you can learn from their ways. The other thing is, I’ve also learned, communicate more. I often believe—and somebody told me long ago, and I thought she was pretty smart—said you know, if you give the same information to a number of people—reasonable people, rational people—they’ll probably all come to pretty much the same agreement or consensus. And I find that’s true. If you take the time to communicate, you tell them what you want to do, you tell them the outcome you’d like to have, you give them the same data that you’ve got, generally they’re like, yeah, okay, that makes sense. Let’s do it.

And I’ve learned to do that a lot more in this position because there are so many different things going on. But if you talk the main point, the main direction, the main things you want to get done here, most people are good at heart. They want to get it done. They want to do the right thing. And they’ll try to do what you want done. You don’t have to micromanage them. You set the general direction. We want to have good products. We want to be fair with people. We want to be reasonable. You want to treat people like you want to be treated. I’m trying to keep putting that into practice and lead by example too. So yeah, reading up how other people have done it, communicating like crazy, explaining and studying examples, those are probably the three best things I could come up with off the cuff.

– That’s fantastic. No, that’s great. Any books in particular that you’ve come across that stand—you’re like, this is awesome?

– Two or three come to mind. One of them is—I just finished a book on leadership. It talked about Abraham Lincoln, Theodore Roosevelt, Franklin Roosevelt, and Lyndon Johnson. I lived during some of their times. I never thought about it, but it talked about how they went through certain crises and came out, and they forged their leadership qualities and got through. But the book I’m reading right now, believe it or not, and I mentioned I was from Milwaukee, is Instant Replay by Jerry Kramer about the 1967 Packers season under Vince Lombardi. And I’m learning about Vince Lombardi leadership style. I’m not saying he was always right, but he certainly won games.

– He certainly did, and that’s awesome. That’s fantastic. My wife is from Minneapolis, so we won’t get into anything there.

– I lived in Minneapolis. Part of my wanderings, I’ve lived in Minneapolis, and it’s a wonderful city except in January and February. But really, good for you. And you know what? The people up there are super. I come from the East Coast back to the Midwest, and I didn’t realize the type of people and the quality of people out of Minnesota. Other than the Vikings, everything’s great.

– Other than the Vikings, yeah, that’s what I hear. There’s a little bit of that that I’ve picked up on. Anyways, well Paul, listen, we could probably go on for three hours. This has been just interesting and fascinating, learning more about you.

– Thank you for having me. No, I love your questioning. I love your questions.

– This has been good. So for those who would like to learn more about you, would like to learn more about CCS, what’s the best way that they can check you guys out?

– We have our website address is ccsdualsnap, all one word— long, but one word— ccsdualsnap.com. We’re always looking for advice on how to do better, but that’s the first place to go. I certainly encourage people to check it out.

– Well, we’ll make sure that all the information is in the show notes and accessible throughout the video so if people want to check you out, they certainly can. So Paul, thank you.

– Thank you.

– And we’ll wrap.

– Keep up the good work, by the way. I love your show.

– I will. Thanks so much. Alright, well that wraps up today’s IndustrialSage Executive Series interview with Paul Konrath who is the president of Custom Control Solutions. Got that right. You can go to ccsdualsnap.com, check them out. The information will be in the show notes. Thank you for watching or listening. Listen, if you’re not subscribed, I highly recommend going to the website and getting on our email list because you’re missing out on great content like this, and there’s more and more and more coming out every single day. So I’ll be back next week with another episode on the Executive Series. Thanks so much for watching.

Thanks for reading. Don’t forget to subscribe to our weekly newsletter to get every new episode, blog article, and content offer sent directly to your inbox. You can also subscribe wherever you download podcasts so you can listen on the go!

– Well, hello and welcome to the IndustrialSage Executive Series. Today I am joined by the CEO of Ad Victoriam Solutions, Mr. Jeff Jones. Jeff, thank you so much for joining me today on the IndustrialSage Executive Series.

– Great to be here.

– I am excited to jump into this. So I’ve been familiar with your company and you for a little bit, for a couple of years now. I’m excited that we have you on the show. But for those who are not familiar with Ad Victoriam Solutions, or as I understand, you guys can also go by Ad Vic or just Ad Victoriam, for those who aren’t familiar, just give me the high-level of who you guys are, what you guys do.

– Sure, so we are technology consultants, in a nutshell. We’re in the business of digital transformation which is I guess a bit of a buzzword these days. Essentially we work with a variety of businesses and industries. Salesforce is our technology of choice, our partner that we work with. When people have decided to move forward with Salesforce or if they’re curious as to whether they should and how it would impact them, we come in and make that magic happen from there. We understand their business. We get to understand what their business is, what makes them different. And then we use technology to apply and enhance their business so that they run seamlessly and more optimized.

– Excellent. Yeah, well, digital transformation is certainly a big buzzword in the industry for sure, and Salesforce is—when it comes to CRM, sales-enablement, they’re certainly the leading horse there. So I’m excited to jump into that a little bit more as we get down into the episode. For now, I’d like to know a little bit more about Jeff. I want to know your story, your background. How did you get into this space? Take me back. Where does this story begin?

– Let’s see; how far do you want to go back? I will tell you what I normally tell people. I went to UGA, had an undergraduate in—

– Go Dawgs. I like it. We’re starting off right; okay.

– And in the mid-90s, way back then, I worked for a medical manufacturer for capital equipment for hospitals and was in sales for them. Had a territory, Georgia and Tennessee, and was very much in sales. Then there was this amazing technology that came out to the mid, late 90s— you may have heard of it— called the internet. It became a land rush. Everybody drove into that space. I went back and did an MBA at State. At the time they were the only one that had a night program that you could go do. I focused on technology and came out and worked for Ernst & Young for seven years doing coding, programming, relational databases, enterprise systems. Got done with that and joined a company, a boutique consulting company. It was Microsoft, that was my technology of choice at the time in consulting.

That’s where my sales and my technology world collided. I would take customers that were originally 50,000. Next thing you know, they’re spending half a million, a million bucks with us on the things that we were doing for them and having a lot of success on that. I helped grow that company upwards to about, I think they were probably 10 people when I joined, and well, almost 100 when I chose to leave and was president of that company and had decided that Salesforce was real. They had moved beyond just CRM at the time. They were really moving into entire business line of applications. And so that’s when I decided to found Ad Victoriam back in 2014. You always think you can do it better. When you watch others run a business, you’re like, “Why don’t you do this? Why don’t you do that?” And then you start a business, and you realize why people make some of the decisions that they made during that time. But that was the journey that got me there. Sales, business background, then coupled with technology has been very successful because bridging those two, it’s not easy.

– No, absolutely. When you were at UGA, what were you studying?

– I did international business at the time.

– Okay.

– Yeah, it was great. I worked in Germany for a couple of summers for a beer distributor.

– Oh, nice.

– Yeah, that was a great job when you’re in college, but not in the long-term. Not a long-term viable. Yeah, so that’s…

– No, that’s great. I’m curious. You got into coding and whatnot. That’s a bit of a jump from international business. How did that happen?

– Well, I tell people if you go into technology, you have to be a problem-solver. You can’t be frustrated with the technology. It’s a bit of a puzzle, and for full transparency, my wife who also went to Georgia was an MIS major, and she was already in technology. I found myself liking the things that she was doing more than the things that I was doing. She had started out as a developer as well. Like I mentioned, when the internet first came out, everybody was picking it up, learning about it, and it was fairly basic in how you went about it in those days. I just enjoyed the problem-solving aspects of technology, still do. I miss being near the code sometimes. I’m not saying I want to go back, but there are aspects about it that I miss, the trying to solve things, the banging your head on the wall for a little bit and then the Eureka coming in and having it work successfully.

– Yeah, absolutely. So it sounds like—and I was curious because you hear these stories all the time. You’re going to college. I’m going down this way, and then there’s an inflection point. Something changes, and you say, hey—It sounds like, with your now-wife—I’m presuming you guys were dating at the time—that was the inflection point. You discovered what she was doing, like this is kind of cool. I like this stuff. And then took that passion and followed that trajectory. Is that more or less accurate?

– Yeah, that’s a fair assessment. For me, I look back and— by the way, if you’ve never been to the computer history museum down in Roswell, you should get down and check that out. We just took our team out to it. And I bring that up because as I look back, there was a time where only nerds and people you kept in the back room worked with computers. I could be wrong, but I think in the 90s, that changed a bit where more and more people could get into it, and the internet made that available where it was a little more ubiquitous. Everybody could get into it, and they understood why and how they went about it. As you talk about an inflection point, I think that was for me where that came together because I always found it interesting, but I also had people skills that I wanted to get out and do those things too. My mind came together at that time.

– Yeah, so talking about that, inflection points and changes, is there somebody that you can recall or maybe a specific event that maybe has triggered that lightbulb moment, or someone that throughout your career has really made a massive impact and has helped you to get you to where you are today?

– To say that there’s only one would probably be not fair.

– Sure, of course.

– Back on my journey, I’ve been very fortunate to have a number of people who helped guide you or give you advice along the way. I mentored under somebody when I was in sales. I got to work with them and carry a territory and work very closely with that individual. I worked for a private company, so you could do things that you can’t do at publics. He was sick with cancer and couldn’t get around, so we’ll just put two people together, and y’all go figure it out. And so I was very fortunate to learn from that experience. A lot of the stuff that he had done in sales over the years, I picked up on that. Then when I got into technology, I had a good friend of mine. Still a good friend of mine; he’s an ex-Navy Seal.

So he was really good to work under. He was my boss, but in the technology space, and how to approach problems and problem-solving that he had learned when he was in the military about, write down the complexity. Bring it down into its component parts. Bring it back together. And how to think about certain problems and so forth. Definitively along the way, there’s always others that give you an opportunity if you’re willing to listen to them. It’s why I’m always trying to find people that we can mentor or help. It’s probably one of the more rewarding things, as you grow a business, that you can bring others in and watch them grow and build their own careers and, ideally, not step on the same land mines that you stepped on along the way. They’re like kids, too; sometimes you can’t tell them. They’re going to figure it out for themselves.

– That’s a really good point. So where do you think this entrepreneurial spirit that you have, where do you think that came from?

– My mom says I’ve always had it. I don’t recall. She tells the story; I’m like, “I don’t remember it that way, but okay. I’ll take your word for it.” To be honest with you, I don’t know where it came from. There is a certain amount. I’ve been in consulting for a long time. Consulting’s—one of the best parts of that is you get to work with a lot of different industries, a lot of different people, and you’re constantly making recommendations in how to do things better and how they should be done. Maybe at some point it was like I had that same desire where, at the company I worked for, I loved the owner there, but there were things that I felt needed to be done that weren’t being done. And so it was like, “Well then, let’s go do it.” Here is an opportunity to go do it, and that’s where that came from.

– What did that look like for you specifically? Walk me through that moment when you said—because there’s obviously a difference between “Oh, yeah, we should do things differently,” and yada yada yada to actually doing it, to actually taking that step to say, in your mind, “This isn’t just crazy talk in the back of my head. I’m actually going to take action on this and do it, and I’m going to say goodbye.” What was that moment for you? What did that look like?

– I made the argument before, and now I can say it’s true that if you go and start your own business, you have to be crazy.

– I would agree with that, yeah.

– There is something not right with you to go do that because if you… especially when you’re creating something from nothing. I had risen to, I was president of the company that I was with at the time, that consulting company, the Microsoft shop. So when I decided to do this, and it was actually my wife who spurred me to do it because she was like, “I’m tired of hearing you talk about doing something. Either do it, or stop talking about it.” Which is great because she’s my support for everything and the impetus that pushes me. At the time, because I was president, I could not go build something and step away. A lot of people talk about—

– A side hustle or something.

– Right, ethically I was not going to do that. One day I walk in, and I’m like, “I’m done,” which was a bit of a shock, good position and all of that, and then just walk away from it. I also tell the story, the person who joined me, his name is Brian Mize, when starting the company. I was the sales guy; he was the technical guy. He had been a customer at one point in time, so we had been friends for several years. I’m like, “I’m going to do this; come with me. We will go do this.” And finally he agreed, and he said, “Okay, I’m in, but you’re quitting your job first.” So I had to go quit my job, and then he’s like, “Oh, okay, this is real,” and go do it. And I tell people it’s crazy because we started the company in May from nothing and by December of that year we had sold a total of $1700.

– Are you sure you’re not missing some zeros there?

– Yeah right, exactly. You start to question yourself, like what have I done here? This seemed brilliant months ago. There’s a level of determination and will that goes into it and recognize that as you’re doing certain things, they are foundational, and they do not make an immediate return on what you’re doing. And you build on that because then our second full year of 2015, we hit seven figures.

– Wow.

– So you build on it from there. There’s relationships; there’s things about the business. There’s hiring and things of that nature that you just have to get done. We’re kind of hell-bent on doing it our way. So far, so good.

– That’s awesome. I know I could go on probably for another two hours on that, that’s for sure, alone because I’m fascinated by these stories, and I think it’s really cool. Pivoting to today, I’ll ask this first, and then I’ll move into another question. What are the primary challenges that you’re solving today for companies?

– It can be industry-specific. I know that you guys like to talk a little bit about manufacturing and so forth.

– A little bit, yeah.

– A lot of what we’re seeing over there is a big investment in the B2B commerce where you’re not, you can sell directly to who you want to because when everything got locked down during Covid, and you’re dependent on people who are normally in the field writing up orders and things of that nature, and now that is not an option for you, that’s pretty damn scary. So we’re seeing a lot of investment on that. We do a lot of commerce in general. We break our business up into a lot of product sweeps, but commerce is the leading horse. And so we’re just seeing a lot of investment in that in particular. That ability to go to market digitally and seamlessly is what we’re seeing a lot of. Plus tying in a lot of your back-end systems where you’re not as dependent on manual intervention.

You mentioned earlier; I find it funny people say Salesforce, and the first thing they think is CRM because that’s their lead horse. I make fun of them sometimes because that’s their ticker symbol, too, CRM which is fantastic, but they are so much more than that now. They’ve painted this symbol. They have a service offering. They have a commerce offering. They have what’s called CPQ for order-taking portals through their experience. They have a very broad offering for full back-end systems. A lot of what we’re doing is now bringing all of those offerings together for companies so it works seamlessly versus you have eight different vendors that you’re always trying to work with and wiring those systems together, which is doable. There’s some systems that you just have to interface with. But now you can put it all on a single platform and reduce the complexities involved and make things more seamless.

– Yeah, absolutely; that makes sense. They’ve certainly made a significant amount of changes and acquisitions over the years. I remember when they bought Pardot in Atlanta which I think—was it ExactTarget bought them first and then—

– The big fish eats the small fish, then a bigger fish comes along.

– Exactly.

– ExactTarget got Pardot because Pardot’s a B2B marketing automation, and ExactTarget was a B2C, so they had the full portfolio for marketing automation. Therefore when Salesforce bought them, it was a one-stop shop.

– Yeah, exactly. No, it just seems to be the theme for a while. One of the things that I wanted to talk to you about that I thought was interesting, because to be 100% honest with you, I had not heard about this before, and that was about this concept of B Corps. I had met some people on your team, and they were telling me about it. Maybe I had come across it once or twice before, but I didn’t have the full explanation. So I just thought that was a very interesting concept. For those who are unfamiliar like myself prior, what exactly is a B Corp, and how are you guys involved with that? What does that look like?

– Yeah, so B Corp can be confusing because, as a business, we are still an LLC. B Corp is not a—there is a B corporation which is, you’re structured a certain way. But B Corp as itself is really just an accreditation that you can go and get. We like to talk about business for good or a force for good. We aligned with B Corp early on because we wanted a series of guard rails to help guide us and keep us focused on a lot of the reasons we started the business which is taking care of our employees, taking care of our customers, being considerate of the environment. Believe it or not, back in ’14 those were—I don’t want to say they were radical, but people didn’t talk about that as much at the time. And so we went ahead and worked on the accreditation. We got some help from the University of Georgia and their graduate program and made some great hires out of it to boot. But we used it to help us understand things that we wanted to do, so it got us much quicker in how we do our benefits. When we started rolling out benefits, how we went about it, we covered 100% of the employees’ benefits, health, dental, vision, and things like that. As a small business, that was a hard decision to make because it is very expensive. But based on the values we wanted to grow and live by those were decisions that helped drive that.

How we do things as it relates to the environment, our suppliers which, as a consulting company we don’t have a lot of suppliers. Our main value is in people. But what we ended up doing is we put in volunteer time, so every employee has 40 hours a year that they can take off for volunteer work. It’s not vacation. If you want to go work for a charitable organization, we make that available for you. For us, B Corp was a way to make sure that we’re always focused or on the core of, as we talked about, wanting to do it better. Because if you’re growing a business, it’s easy to lose focus of that because what are you thinking; you’re like revenue, growth. Where’s the next thing coming from? How are we delivering? This was something that we could also use to make sure that we were always still focusing on those other things. So I encourage people to look into B Corp. And what I tell them is, even if you don’t go through the full accreditation because it is very rigorous, there’s a lot that’s in there that you can pull from and put in your toolbelt to help your organization overall.

– So excellent. If I were to boil it down, it’s almost like a sense of rubrics or—maybe ideals is a weak word, but just in terms of helping to shape the culture by putting some very actionable items into it. Say hey, we value employees. We value the environment and having specific programs around that.

– Yeah, right. So it’s a way to ensure you back up what you say. Like, hey, we’re into diversity. Well, there’s a whole section in there where you have to say, and here’s how we’re approaching diversity, and here’s how our team is made up within diversity. And here are the offerings that we also make available for people when we say we are diverse. Or, we care about the environment. Okay, well these are the programs that we have in place for recycling. Here’s how we make sure that if we are a supplier that we source our materials and our supply chain from people that are small businesses that also care about the environment and things of that nature. We care about our employees. Alright, well explain what you’re doing around that versus just, hey, that’s a great marketing slogan. Why don’t we throw that on our website too? That is where B Corp brings it all together to make sure that folks are actually living and adhering to the things that they say that they care about.

– Yeah, it’s excellent. How long did it take to go through that whole accreditation process?

– For us, it took almost two years because we knew nothing about it, and we were getting help through the university to get through it. I think people can get through it faster now, but it really depends. Nathan Stuck from our team who is our director of culture and somebody that we hired out of Georgia for helping us still works with other companies to help them get through it. I think we see some people get through it in six months, but a year because you have to go and change things, and you have to do a lot of documentation around and stuff like that. Like I say, it’s pretty rigorous. I don’t know if I answered your question. It took us two years.

– Yeah, I was just curious. You mentioned that it was rigorous, and after understanding there was different programs and the changes, that stuff takes time. It’s not going to happen overnight. Just curious about that. So for those companies that are interested in learning a little bit more, I’m assuming there’s a website or something, you can go check that out.

– BCorporation.net or—I believe…

– So we’ll figure out what that is and put that in the—assuming it’s going to be B Corp something.

– There you go.

– No, it’s very cool. So you guys started that, you mentioned—When you started the company, was that part of the, was that one of the early initiatives?

– Day one, my wife and I knew in particular that we wanted to do something like, all the things I talked about there were important to us, but it was still rather abstract at the time.

– Okay, yeah.

– Full transparency, I was doing some research and noticed a competitor. I was like, “Hey, what’s that?” And I looked; I’m like, “I like that.” That sounds pretty cool. That’s where… we picked it up from there because there’s only one other in the space. As you’re growing—at least, as we were growing—you always look at somebody, and you’re like, “I want to be like that guy,” like the one step up. And so I was doing some research and found one. That’s how we stumbled across it. It’s been very beneficial for us, especially as we’ve grown, from a culture perspective. When people join our company, they know who we are which makes our hires a little more targeted, which is good.

– Yeah, that makes a lot of sense and like you mentioned, helps to put those guard rails up there to align your mission, your objective. You were mentioning with hiring, you know what you’re getting yourself into a little bit more, and so people can identify, say, “Oh, I like this; this is great. Not only am I getting a paycheck. The motivation as we’re seeing has shifted more into purpose and more into passion. I like what I’m doing, but I’m also—if I can align all those things, then that makes a lot of sense.

– It is; it helps a lot. And it’s interesting. Our team’s all over the US. The nucleus is in the Atlanta area, but that’s probably 50%. The rest, we’ve got people in Hawaii and Montana. We have these little pockets. We have a pocket in Indianapolis, and they wanted to do a volunteer event. So we flew some folks up from Atlanta, and they all got together and did a weekend volunteer event. It’s fantastic. Again, it drives the culture, gets everybody—especially with so many people remote, it’s an opportunity to come together and do something.

– Yeah, absolutely. No, I love it. That’s awesome. Like I said, we’ll definitely put the link in the show notes and on the video so people can take a look at that if they’re interested. Jeff, listen, I have really, really, really enjoyed our conversation, and I don’t lie when I say we definitely could probably go another two hours just talking about entrepreneurship, B Corp, let alone all the technology disruption that’s going on and the transformation in and around the manufacturing space, outside, above, and below. But thank you so much for your time and sharing your story with us, with our audience, sharing about B Corps. I think a lot of people are going to like what they hear.

– Fantastic. I appreciate your having me on, and hopefully it was moderately interesting and helpful.

– Oh, definitely. For those who would love to learn more about you guys as well, advictoriamsolutions.com or advic.com. Either of those work; is that correct?

– Yeah, both of those are just fine.

– Cool, so yeah, if you’re interested, you can check that out. Thanks again, Jeff. I really appreciate it.

– Appreciate it.

– Alright, well there you go. That wraps up today’s IndustrialSage Executive Series interview with Jeff Jones, the CEO of Ad Victoriam Solutions. You can check them out at advic.com or advictoriamsolutions.com. And also if you’re interested in learning more about B Corp, you can learn about those as well. We’ll have the link in the show notes or on the video player. Somewhere around here we’ll give you access to that.

Thanks for watching or listening, if you’re on the podcast. If you are not subscribed, I highly recommend you jump on our email list there and subscribe so you can get all these great interviews and insights and different programs that we’ve got coming out on IndustrialSage. That’s all I got for you today. I’m Danny Gonzales. Thanks for watching, and I’ll be back next time with another episode on the Executive Series.

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