As the holidays approach, and work begins to wind down, the excitement of time off to enjoy family and friends, share great meals and exchanging gifts begins to build. It’s a time to reflect on the year, love on others, and give thanks for the abundance of life. As I reflect on my nearly 25 years in the machining trade, I’m struck by how much our essential industry means to the modern world and Christmas, Hanukkah, and any modern holiday. Bear with me as I (geek out and) go deep into why I believe this so deeply.

As you browse through the aisles of any local toy store, or surf Amazon or your favorite online toy retailer, you may recognize that most modern toys are largely made of plastic. Every one of those toys and all their plastic parts were almost certainly made on injection molding machines. Those machines use complex molds to receive molten plastic and form them into the shapes the toy designers envisioned. Those molds are highly complex machined parts, usually machined from solid steel. The molding machines themselves are almost entirely made from machined and fabricated parts. If you can look at the underside, or inside of any plastic part, you’ll often notice circular patterns snaking around the surface - machining marks from the cutters which carved away the metal to produce the mold.

If you are going high-tech this Christmas and gifting the latest iPhone or Android model to a loved one, those phone cases and many internal parts are directly carved out of solid chunks of aluminum or stainless steel. Thousands of CNC machines work 24/7 in factories all over the world making precision machined parts that are accurate to tolerances many times smaller than a human hair to make any modern electronic device sold today.

If you buy something a bit more homemade, a wood craft or handmade jewelry from a local merchant, I can assure you that machining was essential for the creation of those goods as well.  The wooden crafts were made with tools, handheld, or machinery, which were built almost entirely of machined parts. The pliers used by the jewelry artist to lovingly bend wire into shape, were cast and finish-machined to make them work precisely. The wire itself was drawn on machines as well, made entirely of, you know what…machined parts.

If you are the type to give experiences rather than physical gifts, good for you! But the experiences your receiver will enjoy are nearly guaranteed to be impossible without machined parts. The hot-air balloon ride could never happen without the huge weaving looms that made the balloon fabric, the machines that wove the ropes which hold the basket, and of course the burner and fuel tank which lift you into the air. What do all these items have in common?  They all require machining in order to be made. 

For many, the season is celebrated by getting out of the house and enjoying a hike up a local mountain, or hitting the ski slopes. None of you would make it out the door without the benefit of machining. The rubber soles on your hiking boots were molded in a machined mold, and the leather processed on large machines. Same with your ski boots, the hiking or ski poles, and even your coat. None could be made without the benefit of equipment made up almost entirely of precision machined parts.

If gifts or experiences aren’t your style, and a thoughtfully written letter or card is your vehicle for expressing love, I’m excited to tell you it would be impossible without machining! The paper you chose is made on large paper rollers which are large machined cylinders. The pen you craft your loving note with couldn’t have been made without machining and the tiny precision parts needed to make your pen work so perfectly.

Any holiday meal you enjoy will be a marvel of the modern supply chain. Processing foods grown or raised on farms around the world. These farms run on machines, the food is transported on machines, processed on machines, packaged on machines and delivered to your local store and your home via machines. None of this modern equipment could be manufactured without machining. Just one more example of how the holidays would be impossible without the machining industry.

I could go on indefinitely, because every modern product in existence today starts with metal and machining in one way or another. Machining is absolutely a bedrock of our world economy. I encourage you to think about it for a few minutes. Most people don’t stop to think about how products are made these days. They just enjoy the benefits of highly engineered, expertly crafted, and remarkably inexpensive products, all made on incredibly complex machines which are marvels of modern engineering and precision manufacturing. These amazing products are designed by engineers, programmed by CNC programmers, machined by experienced machinists, inspected by skilled inspectors, and they’re all supported by an entire industry of professionals who love coming to work to turn raw materials into the precision products that are essential to our modern world. Most of these professionals work at small and medium sized manufacturing companies that are, more often than not, family run businesses. 

So I might make a bold suggestion. Google “CNC machine shops near me” and call up a local machine shop near you - there are nearly guaranteed to be many to choose from. Go visit them, bring your kids to share with them the wonders of modern manufacturing, and help them understand how critically important this industry is to modern life, and their lives. Thank the owners and everyone who works there - and maybe even bring a small gift as a token of gratitude for their efforts running one of the hardest businesses in the world… a gift which would be impossible without other shops just like theirs.

Merry Christmas!

Have you shelved physical inventory counting till year-end? Cycling through all that needs to be done? 

Are you racking your brain on how to get it completed? Well you can count on us for some helpful tips & tricks! 

Puns aside, I know many of you are facing year-end physical inventory counts in the coming weeks, and this is a great time to share some best practices. I’ve found pre-planning in three key areas can help make this process run smoothly and be a success for all involved!

Organizing Resources

Depending on the size of your inventory and the level of detail you need to capture in your counts, organizing resources in advance of a physical inventory count is key! Pre-planning on your part will not only make the count go smoothly, but also will make the process more efficient & enjoyable for those involved. 

Logistics of the Count

Thinking through the logistics involved in a physical inventory count ensures you have all the tools you need to the day of. Here’s a few areas to focus on as you prep: 

Make it fun! And say thank you

“Inventory counting is fun!”, said no one... EVER! BUT you can make the event more enjoyable for the team by considering the following:

We recently completed our Machine Shop Ownership Change Conference. I had a great time putting it together and hosting the event along with Peter Zelinski of Modern Machine Shop Magazine.  The speakers and panelists were astonishing and brought fantastic insights about the ownership transitions they have gone through or been involved with. The attendees were very engaged and we had great questions which revealed the fact that they were genuinely curious about ownership change in general, and as it relates to their own companies.

As I reflect back on all the things the speakers shared and distill the most common and important takeaways that we heard time and time again, a few things come to the top.

    1. Get rid of skeletons in the closet!  We heard this exact phrase from several speakers underscoring how common this is, and how it negatively affects companies being sold. Now is the time to start getting rid of the worst of those skeletons. Make sure you disclose the rest of them upfront when you go to sell your shop. There are fewer things that will implode a deal than last-minute skeletons that WILL come out during due diligence!  It breaks trust from the buyer’s perspective and will leave them wondering what else they will find later in the closet.
    2. Have systems! There are so many machine shops out there that are run out of the head of the owner and maybe a few other people. They’re maybe barely using a bad ERP, have lots of paper, dozens of spreadsheets, files scattered all over their network, and lots of tribal knowledge. Fire fighting, overnight shipping, and last-minute scrambles are a stressful part of daily life. These types of companies are much harder to sell because nobody wants to buy a shop like that, and if they do, you’ll get pennies on the dollar.  The fix?  Start implementing systems today and become more process-driven.  It’ll dramatically improve the value of your business, and the ease of selling to other kinds of buyers, plus you’ll have a lot more fun in the meantime, and maybe start making so much money that selling may take a back burner. With the proper systems, you can realistically improve the value of your shop by 2x in just a couple of years.
    3. Be sales driven! Having a good year or two of consistent growth, profitable operations, and a well-diversified client base is key.  If you have too many eggs in one basket and have big swings in your revenue and profitability, those are all red flags for a buyer. This means investing in marketing and sales on a consistent basis. And the most effective plan for marketing and sales is to make it into a system.  See #2.
    4. Don’t go it alone! Just because you’ve run a machine shop for years, and you’re used to people coming to you for answers, doesn’t mean that you know how to sell a business. Get trusted advisors and listen to their advice! Lawyers, Tax Professionals, and M&A firms are part of an important lineup of people on your side who can make sure you get the best outcome possible.  Yes, you’ll spend some money on them, but the chance of success will be much higher!
    5. Stay cool! As Dave Capkovitz said, selling your shop is like putting one of your children up for adoption. It’s one of the most emotionally wrenching, and financially significant processes you’ll ever go through. So be clear about your intentions, what numbers are important to you, and try to remove the emotion as much as possible from the process. By keeping a level head, trusting your advisors, and taking lots of deep breaths, you’re much more likely to come out of the whole deal much better off.
    6. Communicate! Especially if you’re transitioning from one family generation to the next, don’t be afraid to talk about it. Clear and open communication about all the issues you can think of is really important! Don’t keep everything to yourself and wait until the last minute to bring it up. Even if it turns into an uncomfortable conversation, that’s a good thing and everyone will be better off having worked through the issues in advance and having a cohesive plan about how everything should be handled.
    7. Sell when times are good! Don’t wait to sell when you’re having a down year and just can’t take it anymore.  The time to sell is when everything is going great! You’ll get the highest multiple of your EBITDA when you’ve got a good year of consistent profits behind you.

Even if you’re not expecting to go through an ownership change in the near future, it’s never too soon to be thinking about all the topics above, and all the other great wisdom that the speakers shared.  With a small amount of advanced planning, you can dramatically improve the chances of successfully selling your shop or transitioning it to the next generation. I know how hard you’ve worked to build your business to the place it is today! It’s a monumental achievement, so finish it out strong and ensure an amazing outcome with some intentional planning, great systems, and no skeletons in the closet!!

If you missed the live conference, the recording will be available to buy until the end of 2021.  Registrants will also receive the entire slide deck, other handouts, as well as optionally have the opportunity to be connected with companies who are interested in buying machine shops, selling machine shops, or coaching or facilitating those transactions. 

Buy access to the conference here:

https://www.bigmarker.com/gardner-business-media-inc-w1/The-Machine-Shop-Ownership-Change-Conference?utm_bmcr_source=ProShop

By: Paul Van Metre

There are few more potentially challenging things an organization can go through than an ERP implementation, especially when it includes a total digital transformation, moving to a 100% paperless workflow. Challenging experiences tend to bring out the best, or worst, in people. We’ve been through hundreds of implementations at ProShop. Some were so fast and easy it nearly seemed effortless, finishing in a few weeks. Others were major challenges but did eventually make it to the finish line after much time and heartache.  Unfortunately, we’re sad to say that a few stalled out mid-process and failed completely. What’s the difference between them? Based on our years of experience, it comes down to the customer's team and their company's Emotional Intelligence. Our team, evolving product, and improving processes are relatively constant; so the primary variable is the customer.

We try very hard to only bring on great fit customers to our ecosystem. We’d rather not sell ProShop to a company unless we can nearly guarantee that they will love it, and it’ll be a great fit for them. We'd rather you keep your money if you’re not a great fit, both from an objective and subjective perspective. Here’s what we mean by that.

The cultural health, or lack thereof, is where we’ve seen the most dramatic differences in results with our clients. Here’s a list of key qualities for an organization to have in order to be successful in implementing an ERP System. If your company is going to be going through an ERP change, or any major organizational change, check to see how you compare to these cultural qualities:

Committed - 100% corporate alignment on the mission!  The message is, “We’re doing this and everyone needs to be rowing in the same direction.”  

Aligned - Assist employees in understanding the benefits, goals, and purpose for implementing an ERP. Help them understand how their contribution will have a positive impact on the company. Once your team fully embraces the wisdom of this change, naysayers and saboteurs won't be able to drag the team down.

Organized - Have a well defined list of roles. The roles should define everyone’s responsibility and expectations for getting tasks done correctly on an agreed timeline. 

Open to Change - Things are gonna change! That’s the whole point. Don’t dig in your heels and refuse to be open minded. Have a positive outlook on change to the point that it’s infectious! Be open to listening to new ideas, workflow processes, etc. Nothing stops an implementation dead in its tracks faster than the phrase “we’ve always done it that way.”

Curious - Even though you’ve been in business for years, you don’t know everything - I promise you that! You are going to learn a lot of new things and being curious instead of closed minded will serve you and the process well.

Humble - Be humble in how you approach interactions and be confident that you have things to learn from others, and vice versa. 

Decisive - When things do change, decisions will have to be made. Make them thoughtfully and quickly. You can always change later. Don’t let ‘paralysis by analysis’ stop the progress.

Collaborative - This is a team effort, with everyone on your team, your ERP partner, and others. Come to each interaction with a mindset of open collaboration. Implementation is not a spectator’s sport, it takes teamwork and diving in headfirst into the process. 

Kind - When difficult situations arise, bring kindness to your communication. Name a situation that was better served with anger vs kindness...it doesn’t exist.

Non-Confrontational - Goes hand in hand with kindness. Some people seem to seek out confrontation. They have less fun and have more challenges than those who are collaborative and seek harmony in their interactions.

Proactive - If you see something that might cause a problem in the future, speak up. Your perspective matters and actively sharing it and collaborating on solutions is awesome.

Realistic - This is the hard stuff that you and your team are going through.  There will be things that won’t be fun about implementing a new ERP System. Having realistic expectations and the understanding that everyone is doing their best is really important. Often the “Ah Ha” moments will come later in the process when you understand better how everything ties together.

Lean Mindset - This one is quite practical. You have tons of waste in your current process -  guaranteed! If you have a belief in eliminating waste through lean processes, that will help you make decisions, with all of the above qualities in mind.

I’m a firm believer that everyone always does their best, given their knowledge, the situation, and where they’re at in life. Everyone has past experiences in their life that range from amazing to traumatic.  It’s our life experiences and how we’ve incorporated them, grown from them, and evolved from them that defines how we show up as ourselves today. There is no right or wrong way to show up in the world,but there are ways that will be more effective than others. My wife taught me a great question to ask yourself when faced with how to respond to a situation:  “What is the most effective way to get the outcome I say I desire?” When you can step back, see the forest through the trees and ask yourself that question, and ask it of your company as well, that will generally serve you well to work through the difficult changes in an organization.

By: The ProShop Team

Design engineering and machining are the cornerstones of companies that manufacture products.  Unfortunately, it’s not uncommon for a rift to develop between the two departments.  It can feel like an 8-foot brick wall separates the critical functions: engineers throwing designs over the wall to machinists without context and machinists tossing back finished parts without feedback.

The bricks for this wall are laid by a lack of understanding and sometimes respect, between engineers and machinists.  Although both are instrumental to innovating new parts, engineers and machinists have different backgrounds and experiences.  68% of engineers have their bachelor’s degree whereas the majority of machinists went the technical training route with only 17% having received an associate’s degree. On the other hand, many engineers, especially younger ones, have little to no hands-on knowledge of machining.  These educational differences cause each group to look down on the other. To drive the wedge deeper, the average hourly rate of a design engineer is almost 2.5 times that of a machine operator.1,2  These two groups of highly intelligent, skilled people are working toward the same goal but from completely different angles and for different rewards.  This is the basis of misunderstanding and can lead people to feel the need to prove themselves by challenging and even disrespecting the opinions of others.

As you can imagine, this wall creates a litany of problems for the parent company, the biggest of which is that it significantly drives up costs.  When information doesn’t flow between design engineers and machinists both groups develop a blindspot.  Engineers don’t see how their designs impact fixturing, tooling, tool wear, order of operations, or inspection, all of which add cost.  Machinists don’t see the purpose of tight tolerances or challenging features causing frustration and resentment. A poor relationship between departments can lead to a toxic work culture that increases employee turnover, another significant cost.  In order to succeed the wall must come down.

The first step to taking down the wall is establishing good relationships.  Luckily, despite their professional differences, engineers and machinists usually share hobbies and interests outside of work. A great way for the company to catalyze interaction is to host events that fall into those shared interests.  For example, organizing an employee car/truck/motorcycle/boat show over lunch or right after work is a fun way to break the ice and get everyone talking.  Learning to appreciate the individual will lead to a better understanding of their role and responsibilities.

The buck is passed to the engineers because the work starts when they design a part.  Engineers must involve machinists in the design process early and often in order to visualize their blindspot.  Engineers should explain the objective of the project/product and share sketches prior to ordering prototype parts.  Engineers are usually doing project-specific work whereas machinists have seen a variety of parts across the company’s entire portfolio.  When the engineer shares the bigger picture with the machinist, the machinist may identify cost savings opportunities like reusing a component from another product or leveraging an existing program, fixture, or proven process.

This is also a good time for engineers to solicit feedback from machinists regarding opportunities to make changes that make manufacturing easier and cheaper while preserving design intent.  Designing features that align with standard tool sizes or loosening tolerances are examples.  This is called design for manufacturing, or DFM.  Too often engineers hear “We can’t make this part” or “We can’t hold that tolerance” without further explanation.  Collaborative DFM allows machinists to fully engage with the engineer, providing collaborative and constructive feedback on the manufacturability of the part and building rapport. Engineers, in turn, should be open to this important feedback rather than defensive.

This type of communication early in the project life sets the tone that both parties respect the opinion and value the expertise of the other.  That big brick wall is on its way down!  As the project continues in its life cycle, engineers and machinists should continue to work together in this way to optimize the design and drive down costs.  Engineers are data-driven creatures, so quantifying the cost savings of the DFM effort is a huge benefit.  An enterprise resource planning (ERP) system can help machinists accurately estimate set up, run, and post-processing times and analyze the data for various design iterations.  Over time, the ERP system becomes a database to reference when you start a new project, making informed decisions for new parts based on similar parts.

Once you’ve deconstructed the wall, look to hire individuals who will continue the culture of open communication and positive relationships.  If the wall is particularly high or hard to break down, consider hiring a manufacturing engineer and/or a design transfer engineer to operate as a buffer and facilitate communication between design and manufacturing.  Continue encouraging departmental alignment with regular opportunities to touch base or socialize--maybe the car show becomes an annual event!  Developing healthy and productive working relationships will allow the team to balance design intent and manufacturing costs to produce the highest value of quality products.   

References:

  1. https://www.zippia.com/design-engineer-jobs/demographics/
  2. https://www.zippia.com/machine-operator-machinist-jobs/demographics/
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