This week, we sat down with The MLP Group (Manufacturing Legacy Partners). They’re a multifaceted team of highly skilled and experienced subject matter experts dedicated to strengthening American manufacturing by facilitating the successful ownership transition of small to mid-sized manufacturers.
Collectively, they bring over 300 years of experience and expertise across all functions and aspects of a business to assure the survival of companies as they approach and transition to new ownership. On top of that, they also help companies thrive, increase owner value, and continue to support employees and the community. The Manufacturing Legacy Partnership is protecting the legacy of the small manufacturing supply chain in the United States.
If you’d like to contact The MLP Group, please email michael.mcvey@clearview-mgt.com.
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The MLP Group
The MLP Group
We’re doing the episode in our new office, and we’re trying to get everything set up and do a pretty big episode. We have the MLP group. AJ, why don’t you tell us who the MLP Group is?
I’ll kick that over to Mac.
Thank you, AJ. The MLP Group is a team of nine that we put together. They all represent different functions of a business and the whole concept. The mission is for us to help initially and, I think, mostly right now, small manufacturers who are looking at ownership transfer. Baby Boomers own over 50% of all the businesses still currently, and just in manufacturers in the state of Ohio, there are about 14,000 manufacturers.
About half of those are owned by Baby Boomers. About 6,700 of them are small manufacturers owned by Baby Boomers. If you think about the number of businesses that are going to be transferred in the next few years, there’s going to be quite a bit of competition for funds because that’s just manufacturers and that’s just in the state of Ohio. Across the country, there are about 2.34 million small businesses owned by manufacturers. We’re here to help.
What motivated you guys to start this group? Was it just to help?
It was Scott’s retirement. It was Scott who inspired me initially. He said to me at one point in time that if he could do anything that he’d like to do, that would be to go into a manufacturer, tell them to go ahead and take their spouse and head to Florida. He’d take the company for 2 to 3 months, do an assessment on them, and then go in and help to transition them to become worth more.
That got me to thinking, and then I saw some of this data along the way, and I went back and talked to Scott, and he liked the idea. Both Scott and I have a bit of manufacturing experience. The other Scott in here is Scott Brown. I love manufacturing, and so do they. I think it’s the cornerstone of the US economy. I grew up in Pittsburgh, and that’ll get a few things here. I watched a lot of manufacturing in Pittsburgh, and I just loved it. At the end of the day, you can say I made something.
Scott, how long ago was that that you guys started the group?
Scott and I started talking, and we started putting together the group last December or October, somewhere at the end of 2023.
Scott, tell us about your background.
I’m a U of L graduate, which is why I don’t like the UK. I’m an engineer who started out at GE in Louisville and spent most of my career operating manufacturing companies. The most recent one that I operated was owned by somebody who didn’t have a plan for how he wanted to get out and it struck me that the risk for that business was that he would just go away when he leaves, that the business would be gone. For me, I just see that it’s a lose-lose-lose. The owner loses, the employees lose, the community loses, and I see that as a real problem. I used to say that the only thing I knew how to do is to be a manufacturer. If manufacturing disappeared, then there’d be nothing for me to do. For me, it becomes about preserving manufacturing in the US because it’s important to me. It matters.
You asked me, and I said something about a few of us being in manufacturing, and I didn’t say anything about Ryan. Ryan Kane was 20-some years with Worthington Industries. He was a regional controller in Michigan, so he has a lot of manufacturing experience, mostly in the financials, which can mess up manufacturers.
It can save them. I love our financials and without the financials, I’m lost.
Ryan is creative.
The financials I find is probably one of the most important things for me. Ryan, you and I could probably talk for days on that into things, but nothing gives me more anxiety than a P&L that’s butchered or a balance sheet that’s not right, or things that aren’t categorized correctly. I was just looking at ours and I’m like, “Why are we spending $100,000 here?” Somebody’s like, “No, we’re not spending $100,000.”
I’m like, “That’s what it says in one of our P&L.” I was here until 9:00 at night, digging through everything trying to understand why that money was there. I’m with Ryan. I think we’re good when it comes to the numbers and how important those things are but what’s the main objective with the MLP Group outside of the transitioning the owners? Mac, you said that it was the biggest part was just transitioning owners to be a little bit more hands-off and then a succession plan, correct?
Yes. In the long run, it’s part of when I started to hear Scott say is to keep manufacturing in business. He said impact community. One of the things I didn’t hear him say, but I know he knows, is supply chains. When you think all of a sudden, a few of these people disappear, they close up and liquidate. What does that do to the supply chain? There’s a lot of talk about onshoring. How are we going to do that if these manufacturers are closing? How do we help everybody stay in business and grow? Not just stay in business but be worth more and be able to contribute more.
The supply chain is a big deal. We have a customer it’s a very large Ohio manufacturer right now. We started working with them and they want to bring a little over $1 million. We’re trying to figure out if that’s Chinese dollars or US dollars at this point. We’re in this back and forth, but they want to bring some pretty substantial work back.
They went out and they tried to do it on their own and they couldn’t find anyone that had the capability to make this certain product and we had probably seven of our manufacturing partners just no quote it. They didn’t want to look at it. They had $100 million manufacturing companies just no quoting things.
I have a buddy that started a manufacturer up in Wisconsin, Aaron, that’s been on the show and he’s going to buy 2 or 3 pieces of machinery to reshore it and we’re going through the ROI and just trying to figure everything out. In order for us to reshore more manufacturing, it’s going to take more folks to try and figure out how. Not just say, “It doesn’t fit our current capabilities we don’t want to quote it.”
Bringing Manufacturing Back
You guys probably read this multiple times. Manufacturer’s, what I’ve found is if it doesn’t fit into their box a lot of times, they don’t want to do it. In order for us to bring more manufacturing back, I think that it’s going to take some owners to think outside the box and say, “There’s a substantial opportunity here. How do we figure this out?”
We don’t have the machinery right now. We have the talent. We have the bean counters that can make sure that we’re making the money. We have we have the engineers who can figure out how the hell to do this. As an owner, you have to be willing to invest in the machinery and the time, put that money out in front pay it forward to get more manufacturing brought back. That’s where I’ve seen some of the struggles.
Part of that problem, Dustin, is that the owners are all guys like me and Mac. They’re old people, and they’re not as creative as some of the younger generation, and they’re not the ones who are looking for a new challenge that they’re going to spend the next ten years working on and doing great at. What we need to do is we need to transition some of those businesses that are owned by those Boomers and move them into the hands of some of the next generation of business owners. Manufacturing is at risk when all of these Boomers just go away. Business will fail, and that’s why we’ve got to be able to transition the business to that new ownership.
Manufacturing is at risk when Boomer business owners retire without a succession plan. We need to transition these businesses to the next generation of owners. Share on XHaving A Succession Plan
What are you seeing with that, Scott, in that transition period? Are you seeing people who are willing and have your same vision where they’re like, “We need to successfully have a succession plan because little Bobby doesn’t want to be in manufacturing and he has no interest in taking over the business?” Are you seeing folks that are enjoying their retirement and they don’t care?
I tell you, the experience that I’ve had with owners of manufacturing companies is that the owner is so entrenched in the day-to-day operation that he wakes up one day and says, “I’m ready to give it up.” He’s never thought about what’s the next thing. I’ve talked to multiple owners about this idea and about coming in and doing the work, and the big problem ends up being, I can’t be all things to old people, and that’s why you see around you now people from every aspect of the business, and that’s what makes the Manufacturing Legacy Partnership so different.
We’re bringing people to the table that are operations folks, financial folks, IT, legal, and across the board and we have the ability to work with the owner about their personal finances and how much do they need to be able to retire and all of the things that go with it. I couldn’t have done that on my own and I don’t have any one person in this room who could have done it on their own and that’s why we came together as a group.
When you and I had our first phone call, we hit it off pretty quickly because I grew up playing hockey. I don’t know if anyone else played hockey here, but if you travel anywhere in the world and run into another hockey player, you start talking. I think manufacturing for me is very similar when you run into somebody.
I don’t care where you’re at or what country you’re in, but if you run into somebody that is in manufacturing, you just hit it off. It doesn’t even matter what you’re manufacturing, you can talk about it, and you have that commonality, and you enjoy making things. I’m not a person that is very good with intangible items. It has to be tangible.
I have to be able to touch and feel it, and that’s what manufacturing is to me. I think it’s fun to see it come back. I remember when I was a kid, manufacturing was going overseas and everyone was pushing everyone to get out of manufacturing. “Go to college. You don’t want to work in a factory.” Now, it’s reverse like, “What do we do to the market? We pushed everyone to go to college, now we don’t have machinists, now we don’t have welders, now we don’t have these people.”
Scott, to your point, it’s probably burnt some of those people out because now they’re in this recruiting stage where they’re like, “Business is good, but our bottleneck is welding, and we can’t find enough welders.” They say, “We’re just going to take the work that we can handle. We’re at full capacity where we are even though they’re probably at a third capacity.” When you go into a company, are you helping them build back up to position themselves for a better sale, or is it strictly just trying to do an acquisition?
I don’t even think that it’s about the acquisition as much as it is about preserving the business. For us, it’s helping them to understand what are the things that it takes for the business to be transferable and then helping them to take those steps either to improve the business, to separate them from the business so that it’s professionally managed and they are not the business when they sit there, to look at their financials and make sure that somebody outside of the business would understand them because that’s a big problem.
Nobody wants to buy a business that they can’t understand the financials in. Dustin, you think back and you see the impact of not being able to manufacture things, we were scrambling, begging people to make masks or ventilators. We have to have that capability here in the US and we’ve got to pass that to the next generation.
I’m 100% on board with that. We have to be self-sustainable as a country and not rely on other countries that, regardless of what you believe, may or may not have put us in the situation that we’re in, and then we’re relying on them to help save us. It’s a scary proposition where we don’t. I know so many people just here in central Ohio I talked to, and they’re like, “We produced you 500,000 face shields. What’d you do before?”
They’re like, “We’re a mold maker, but we weren’t making any molds or we weren’t doing this, so we had an opportunity to make face shields, so we figured it out.” It’s pretty cool that everyone came together in that fashion. I know a big portion of our business right now is supporting restaurants to open and manufacturing pieces and parts for social distancing and things like that. It’s a different time, for sure.
One of the things that we’ve also discovered through all of this is that through COVID. The fact that a lot of people are learning exactly some of the talent that they didn’t realize their own staff had. There is one that’s a printing company that’s down in Lancaster. You mentioned Shields. They’re a printing company, and he brought his whole team, and now, every Monday, they meet and have this creative conversation. It says, “What can we do? How can we do it better? How can we do it differently?”
They discover that as a sideline at home for fun. This one guy likes welding, another guy likes to do whatever, and they go, “I didn’t know you liked that. I just thought you did what you did here.” Now, they’re finding these things, and they’ve created three other businesses because of that. It is finding that talent and saying, “I didn’t know our staff was so multi-talented.”
That’s another thing that we’re coming from, all of this, the COVID. You’d love to be out of this. I’m 100% for manufacturing to be in this country, and I think all of us want to come back here. A lot of times, we hear a lot of, “Why I don’t have the talent?” as Mac always says to me. People don’t know what’s right under their noses, and now we’re learning exactly what’s right under our noses, and that’s fascinating to me.
I’ll just add to that. Another thing they don’t know is the learning capabilities that they have. A hundred years ago, when I was in the Navy, I trained nuclear plant operators for the Navy. We took 17 to 21-year-old kids, some of who hadn’t even finished high school, and trained them to be the safest reactor operators in the world. You just have no idea what the capabilities are of the people that exist out there and I think that one of the talents that they need to be looking for right now is learning agility.
People often underestimate the learning capabilities of their employees. With the right training, even those without a high school diploma can become highly skilled professionals. Share on XLearning Agility
Learning agility, explain that to us.
If you think about all the technology that exists out there and how they’re it’s advancing so rapidly. They buy a piece of machinery now. Three months from now, they have to change the settings. Six months from now, they have to change the tool and dies the equipment. Twelve months from now, they have to buy an integrated piece of machinery.
All through all those changes, the operators need to know how to start it up, shut it down, and change the settings. They need maintenance people to know, “I now need to go to this. I need to use these tools. I need to do this frequently.” Those types of things are going to change so rapidly. People need to be able to keep up with that.
I think that’s a great point because I’ve worked for a manufacturer that didn’t empower their people. They wanted to make all the decisions, and they didn’t empower, and people lose focus pretty quickly and give up. They’re like, “Iif I’m going to be a robot, then I’m just going to sit here and do what you tell me to do, and I want to come in at eight and leave at five, and that’s it.”
I think it’s so interesting, we work with so many different manufacturers that the owners and leaders that empower their people to make decisions and let them screw up. They have the most phenomenal people. Other companies do, too. They just haven’t taken the shock collar off of them to let them mess up because now everyone with that company is so afraid of messing up that they just lose their innovation.
They lose their passion to figure things out. I think that COVID is obviously a horrible thing, but I think the good out of it pushed us to figure things out, and then everyone’s achieving new things, even if it’s something as silly as a face mask or like, “We didn’t even know we could do this.” Within a month, we’re producing 500,000 of them. I think the owners that handcuff their staff and don’t let them have the agility, they just stifle their growth, I would think.
A lot of them say one thing. They go, “We love to take risks. We allow our members and our employees to be risk takers, creative, and all this.” They don’t. They want to say, “This is the process. This is what you’re going to do, and this is the line we want you to be in.” When they do need to say, “You’re going to take a risk, but risk means you’re going to make a mistake, it’s okay.
As soon as you know it doesn’t work, let me know, and let’s get a solution made.” That’s what makes it exciting, and that’s what makes a team come together and the excitement and all of the fun of the job. Do you remember when you were younger? I can remember my brother and my dad and they’re putting a car together and don’t know how to put this piece together.
They’re out there for hours, and they finally get together. They’re high-fiving each other and think they’ve just made a rocket to the moon, but it wasn’t. It was that they were talking. They were building something together, and they were creating, and they figured it out. That’s what’s exciting, and that’s what brings the excitement to your job every day.
It’s not just coming in, punching the card, going over there, and punching a button. It’s being excited about that, waking up to be excited, and that’s what manufacturing used to be. Right now, we got to get that back. There are kids that want that, and they’re excited about that. When you see kids that are so entrenched in their phones, in anything that is high-tech at all, they love it because it’s creating something.
When you can figure it out.
They’re figuring out things in seconds that we can’t do in hours, but they figured out and love that. It’s so much fun to them, and that’s what’s manufacturing, and that’s what’s a key component.
Another aspect of that is it’s not just in the engineering. It’s not just in the production. If you get that going in a company, it suddenly shows up in IT. It’s been there. It’s just that you’re allowing it to happen. It suddenly shows up in marketing. It suddenly shows up in sales. It suddenly shows up in finance. Wait a minute, you don’t want that one.
The Marketing Piece
The marketing piece for manufacturing is very interesting to me, and that’s how I started my company as a marketing and sales consulting company. Marketing is so much easier because when you have passion with the company, and you’re doing cool things, and people are having fun doing it, just like in here, Darren’s taking pictures of us, and we’re all laughing and joking, and you can see the passion coming out of people, this makes amazing content.
If you can have that within your company where you’re just talking, and Darren goes and films a factory floor, and he talks to an operator and they’re excited about what they do. Nobody cares if he even graduated high school or she graduated high school, but that makes amazing content, and then you push that out.
That’s way better than running a radio spot or spending a hundred thousand dollars on Google AdWords. It’s viral. People want to watch it. In this age, you can do a lot of marketing for free as long as you have the content and can capture the content and then push it out. You don’t have to pay to make people watch it.
I don’t know about you. I will lay on my bed, watch, and look at Instagram on manufacturing for hours. I’ll watch this machine run, and it’s like making a spring or whatever because we represent a spring company, and it’s as mesmerizing, you’re like, “That’s how that’s made?” You go to the next video and it’s free content and I just don’t think that there are many manufacturers that get that. They think of marketing as this necessary evil that they’re going to spend money, but they can’t track it and things like that. Nowadays, we track everything.
Dustin, the other place that that’s a problem is most of us who are old manufacturing guys. We like making stuff, and all of the rest of that stuff just doesn’t matter to us. The problem with that is that that business then is there’s nobody thinking about what comes next. Where does the business go? Who takes it over? How can it be something exciting for that next generation to want to have and to own? Every kid wants to be a tech giant.
I think that you brought up a very good point about surrounding yourselves with like-minded people who are good at that particular thing. If they’re busy making their widget or widgets, then they need to partner with somebody who has a marketing mindset in manufacturing to get their name out there and to make sure that they have a website. Not just a website that has pretty pictures on it but a website that is an engine that is an ROI generator.
There’s no reason for any of us to do anything unless it’s going to generate revenue, and I truly believe that. If marketing is not generating you revenue, then you should not be doing it, or you should be doing it with somebody different than is doing it for you if it’s not generating revenue. I think that that’s a very good point that you brought up in the very beginning is let’s surround ourselves with people that are better at any particular thing and turn them loose, you give them some guidance, this is what we want to achieve and let them do those things.
If you think what’s the single biggest revenue-generating sale that you’re ever going to make if you’re a business owner and that’s when you transfer your business. If we haven’t done anything to market that, to prepare it, to separate ourselves so it can be managed without us sitting in the seat, you’ve built an empire that’s going to collapse the day that you walk away. That’s why you see all of the talent sitting around the table because we all want to see that survive.
I had a guy call me who was referred to us, and this gentleman bought a manufacturer. They’re a stamping company, and they have a pretty niche thing that they stamp, and he bought it from an individual that’s lived in Florida for 10 years, and it just every year it dropped and dropped and dropped. He bought it at a great point.
They’re probably at an eighth capacity, but the previous owner hadn’t put any revenue back into the business at all, no new machinery, all the machines need all updated, all the electronics need to be updated, and the same people that work there were at 30. At one point, they’re at four because they just lost so much business, and he called me he’s like, “I want to grow this business back. I’m an engineer. I’m not a salesperson, but we need sales.” We had a great conversation, and I think you guys would be great for him to network with.
The previous owner probably was getting out eight years late because he didn’t know how to get out.
You’re right. He lost a tremendous amount of money just enjoying his life in Florida, which is good for him. You’re right.
Making The Business More Efficient Between Now And The Transition
There’s one other point. We’re talking about the legacy and the point of transition, but the thing we miss is coming in and the improvements you make between now and the point of transition. Everything that we do in the development is optimizing and making the business more efficient at present for the future. You think about this, getting in there where you talk about unshackling the staff and letting them go innovate and create these things.
At what point do you become re-engaged in the business because it’s not running you? You’re running the business. You may decide. I’m interested in staying this a little bit longer but now maybe I exit out.” You set your business to be that much more successful not only in the future but for this day, tomorrow, the next year, and beyond.
When you think about improvements, maybe make a few thousand dollars, $10,000, $100,000 improvement now, you wait five years down the road that compounds over that you start seeing a lot of significant improvement. You talk about the innovation and that’s where you’re starting to see. We start forcing that, but the great part about having somebody external come in and look at it, I say not governed, but we don’t look at the business you do.
We’re looking at two different eyes. We haven’t been in your business. We’re looking at with different perspectives and different eyes, and we’ve seen different things that we come in, and we can give you new perspectives on, “Have you ever considered this? Have you ever considered that?” “I hadn’t thought about that.”
External perspectives can spark innovation in your business. Having someone from outside your organization look at your processes with fresh eyes can lead to new ideas and considerations. Share on XNow, it sparks that innovation, and that’s the great part. We’re working to get you ready for the point of transition, but think of all the great things you can do between now and that point. To grow and develop that next generation, to develop the pipeline for customers and talent and to leave that legacy, whatever that legacy is that you want to create.
I’m sure that during that process, it’s self-rewarding because you probably see some people get some life back into their souls. Where they’ve been doing the same thing for so many years, they’ve lost that passion, and then you guys come in and start asking those questions, and they get fired back up again.
It’s entirely possible we go in and help them prepare, do a better job getting more value in their corporation to be able to transfer the ownership, and they may say, “What I see going on now, I’m not ready to go. This is fun again. I remember this years ago. I didn’t know Scott knew that. I didn’t know AJ could do that. This is fun, yeah, and we also got some university involved in it.” All of a sudden, it’s like, “Things are kicking here, I like it.”
Advice For Manufacturers
What advice would you give to a new manufacturer, somebody that’s new in the business? There are plenty of them out there right now who are starting up a machine shop or a CNC fab shop or something.
My advice is if I can give it, I’m going to charge you for it, though. It’s don’t be insular. Get to know your peers, and get to know the other manufacturers around you. When you look at the brain power that is manufacturing, don’t just count on yourself. It’s what makes manufacturing so much fun because people like you who get passionate about manufacturing get excited, and they’re willing to give their time and energy to you to help you succeed. Everybody’s not going to charge you for that because they love this stuff. Get to know your peers.
The people that don’t want you to succeed don’t talk to them. At the end of the day, I wanted to do a podcast for a long time, and I was chicken shit about it, and I was too afraid of what people would say when it took me 30 minutes to get the thing up and running, and we fumble through it and then finally and I’m like, “It doesn’t matter.”
At the end of the day, if somebody doesn’t like it or whatever, then don’t listen to it. The people that do and the people that are passionate about it, we get together and talk about it, and you move on, and Scott, I think you’re right. Those that are starting and they’re telling you that you’re crazy, you probably are, but who cares? Be crazy by yourself if that’s what it takes, and find somebody else that’s crazy to be crazy along next to you and have at it. You have one life.
One of the interesting parts, I’ve got 28 years of manufacturing experience. I didn’t know structures like this and things like the OMA existed until I exited and went out with my own organization. I’ve done manufacturing in California, Texas, and Ohio, never knew any of this infrastructure existed. For example, I walk into an OMA meeting where there are hundreds of people.
Seriously, where has this been for the last 20? No, it’s more like, where have you been? Coupling on what Scott said is don’t insulate yourself, but go out and talk to people and find out who the people are, what are the organizations that you need to connect with that are going to be at your point, be there to support you when you need it, to move your organization forward faster than you can right now.
I think that peers in the manufacturing industry are an important part. Somebody that you need to connect with, stay connected with, figure out who stimulates you more, and continue with them. I also think that occasionally, you need to step outside of that and maybe even talk to an attorney. Go talk to a finance guy, go talk to somebody. You need that stimulation, those other things, too, the other people with crazy ideas. Crazy is part of the term for the entrepreneur. You got to be a little bit crazy. Maybe a lot of bit crazy.
We talked about this. I just had one of my buddies on that’s an attorney, a mechanical engineer and patent attorney, very smart guy. We talked about exactly that. The attorneys who want to see you succeed aren’t going to charge you $400. Just sit down and listen to you. If they do, then find a different attorney to have that initial conversation that you can sit down or have a phone call with them, and you have a question that’s legitimate, and if it’s not, then whatever, you guys can hash that out.
Find somebody who’s going to just have a conversation with you and not want to charge you $400 or $500 because they are passionate and they want others to succeed. I promise you, if you have a good idea and you need them, they’re going to make their money on the back end, and you’re going to need them. That’s going to be money well spent.
One of the things I love about this group is we have all these functional SMEs, but at the same time, we have each one of them they’re an SME subject matter expert relative to finance, relative to IT. They also have experience with the other functions. They know things you don’t think they know, and that’s true for everybody in this room and on this show. They have talents you might not have considered when you said, “They’re an attorney. They’re a talent management person.”
That’s fantastic because we go into an organization, and we sit down, and I’m looking at the talent management aspects of it, and all of a sudden, I see something relative to operations, relative to preventative of maintenance system or something like that. Then I can talk to Scott Elsworth about that. Claudia’s in there, and she’s looking at things, and she can then say something to AJ. She’s looking at the legal aspects of it, the structure contracts. She’ll see something relative to a software tool they use, and she says, “AJ, I think you ought to check this out.” And they all have that experience.
You guys bring up so many different points, just with us starting pretty new. My company is seven years old, but we started to ramp up in the last couple of years. To your point, I think I told you on the phone call I wish I had known you four months ago or five months ago because we invested heavily in a piece of software, and it keeps me up at night because it doesn’t work how it should be working or how we were told it should be working.
You need those people to bounce those things off of different ERP systems, warehouse management systems, or accounting systems. All those things have to talk together, and if you’re a sales-driven company, you want your sales system to talk to all those systems and integrate them all into each other, and it makes your life a lot easier, but making that happen is not an easy task. Nothing works the way that they say that it should work, I found out.
Is it not all user-friendly?
No, it’s still 80, 20 rule. It does 20 of what you want it to do.
I think that’s one of the unique things about this group, Dustin, the fact that as manufacturing is changing and growing and evolving, you’ve got new technology, you’ve got automation, you’ve got robotics, you’ve got ERPs and everything else like that. You need to have somebody from the operation side that understands what the operation floor looks like, how all the numbers and the whole system works together, and then your IT guy comes in and helps you fix all of that or at least tie it all together.
I think a lot of businesses, it’s not just manufacturing but specifically in manufacturing, where they get into trouble is that everything is siloed. They look at technology, and it’s like, “I’m going to put this piece in to solve this problem here.” And don’t look at how it impacts the rest of the workflow or what issues this will cause on the back end.
That’s where we try to fit that gap and look at the business as a whole and not just individual functions. There are plenty of people, and like I told Mac, whenever we get together with this group, I could go in, assess your technology, and tell you, “You’re doing this wrong.” At the same time, I can work with Scott over here and Scott says, “Their operations is slow because of this, that.
There are different bottlenecks here.” I’m like, “This is a great technology solution that will help streamline that.” That’ll make them more efficient on the floor and at the same time, it’ll loosen up some things on the back end and create efficiencies on the back end as well. Being able to look at it from a holistic approach, I think, is what businesses are missing, and that’s what we try to bring to the table of things.
Streamlining operations with the right technology solutions can create efficiencies on the production floor and in back-end processes. A holistic approach is key to optimizing your manufacturing business. Share on XFor you guys to come in and have both of those, I can see that it works out well because if you go in alone, they’re like, “This guy’s just trying to sell me this technology because you’re making money off of it.” If you guys are going in as a group and you’re looking at it as a whole package and how it’s going to improve your throughput or it’s going to improve the efficiency on the floor, then they can start thinking, “This is going to give me a return on my investment.” It’s just not a necessary evil that I’ve got to buy this thing because I have to have it. Then they’re just upset writing the check to own it. If it’s going to make their business better and make them more efficient then it makes that investment a lot easier.
One of the other things that gets missed is the checks you don’t have to write because you’re investing in a solution that doesn’t make sense for you. There’s a lot to be said for wasted cost that’s one of the things I call getting caught up in the opportunity cost, where you buy a solution but you only use 20% of what the product can do. You didn’t need to invest in that product, there was another solution where you could have used 80% of that product or 90% of it and been well better off.
We’re doing that right now. We’re doing an opportunity cost loss analysis of just how much time I’m paying an engineer to figure out why it’s not working and why there’s a rounding error. Ryan would lose his mind. Right now, We have a system with rounding errors, and they’re like, “Just deal with it.” I’m like, “What?”
What? You can’t just tell the bank to just deal with it?
Just pay us that extra penny. It’s not a big deal.
The system says it’s owed to me.
JobsOhio
Exactly, it’s in our AR, I swear. Claudia, you’ve been pretty quiet, and I know that you’re not quiet. Why don’t you tell us more about you, JobsOhio and all that fun stuff?
Sure, I’d love to. I think we talked about this the first time that we met. Dustin and I think it’s important, and I echo everything that everybody said on the call. I love the synergistic nature of this group and the fact that we cover every area and organization. I believe that we can drive a lot of value in organizations where they’re getting ready to sell the business, be acquired, or set things up for succession.
One of the reasons that this is a passion project for me is because I grew up in a small town in Ohio where there was one stop light. It’s a mile square, and in a business that employed 30 people was considered a major business in that small town. One of the things that I like us doing is the fact that we’re so conscientious about helping these companies transition and helping them be acquired so that they can continue to have that organization, that manufacturing company in that small town so that it doesn’t have a negative reverberating effect on the economy in that small town and it seemed that happened when I was growing up.
This is a big passion project for me, and I have met eight other amazing people along the way who are similarly situated and have similar mindsets. As we talk to more organizations about what we do, we’re finding even more and more people who think the way we do, and they’re equally as excited about it. For me, this goes with my daytime mission as well.
I am the Senior Director of Compliance for JobsOhio and JobsOhio’s mission is to create jobs for Ohioans, so that everybody can have their own experience of what the American dream is to them right here in Ohio. Putting Ohioans to work is important and not losing jobs is important. One way that Ohio could lose jobs is if companies decide to shutter their doors because someone decides that they’re ready to exit their organization. To me, this is just a continuation of my passion for making sure that people have jobs they love and are excited to go to every day. It affords them a lifestyle so that they can self-actualize all of their dreams.
A major manufacturer in my hometown shut down when I was 16 or 17 years old, and hundreds of people lost their jobs. The town that I grew up in is less than 20,000 people. It had a significant impact on all the other businesses in the town, including my grandfather’s ice cream shop that was right down the street because he had hundreds of people throughout the week that would come and eat lunch there.
I don’t think that, as a whole, many people put the weight into what a manufacturer means in the town to all the other ancillary businesses around the restaurants, the bars, and the CPAs. You take a hundred people out of the town that there could be five CPAs doing everyone’s taxes. What does that do to them? It is huge and I’m glad that Ohio is looking at that to keep manufacturers here and to bring new ones on board.
Their numbers are pretty clear, Dustin. For every manufacturing job, it supports another 1.8 jobs. If a manufacturer in the community closes and they have 100 employees, another 180 lose their jobs.
It shakes the infrastructure of an area. All the things that you said, Dustin, are true, but it also impacts your banks, and your grocery stores, your barbers. Whether they’re all family-owned or larger organizations, it has a negative impact on that entire community. It also negatively impacts the schools, and the fire departments, and the infrastructure that requires taxation dollars to be able to run those organizations.
We saw a significant decrease in our town. When I was younger in Piqua, Ohio, there was an underwear manufacturer and I forget what the name of the company is now. Somebody here may know, but it was a huge underwear manufacturer in town. It left when we were young, and I think they both went to Mexico. My hometown is just now starting to come out of that because people are trying to figure it out, and we have some new people coming in who are passionate about it.
When manufacturers go to a town, and it’s out in the middle of nowhere, they’re a bit concerned, “How are we going to recruit talent?” The big manufacturers are now trying to figure out how to bring talent to that town. People who can live near a bigger city look at moving an hour and a half away from anything. It’s a lifestyle change at that point, a big lifestyle change.
Dustin, this is where our marketing guy would say, “Just imagine how well they could have done if they had a group like this to help them.”
Who is your marketing guy, by the way? We can talk about that later.
We all are.
That’s the best answer. I think that if the president or the owner or upper management is not equally working as hard as their sales force or marketing team or whatever to bring in business, that’s a scary proposition. I think you have to have that passion behind an owner to be forward-thinking enough to also bring those opportunities in.
I think that an owner that just says, “All right, sales guy or salesgirl, you’re not hitting your numbers.” And they go back to their house in Florida and check in once a week. It’s a little more difficult if you don’t have the right people at the helm, and you’re only relying on those people if they’re not investing in something, new technology, or something.
The other part of that on the sales side is that how many times do small manufacturers say that the person who is doing the sales is the owner? The owner wants to transfer this company over and says, “Who are your salespeople?” He said, “I do it.” “So now, who’s going to do it when you’re gone? You’re the one that knows everything.” A lot of times, they don’t think about all of that, that whole spectrum, and what has to go.
Into Karen’s point too that that can impact the sale ability of that company. If you have one person at the top who is so critical to the continuation of that business, it could impact whether a company is willing to buy your company. Alternatively, too, if the new owners inject some new life into that organization, that previous owner may want to stay on, and it helps transition the business that way so that he or she has the opportunity with these new owners to find other people and help skill them up so that that transfer is a little bit more seamless.
New owners injecting life into a manufacturing company can encourage the previous owner to stay on and help with the transition, ensuring a seamless transfer of knowledge and skills. Share on XI think that that goes back to surrounding yourself with people who are better than you are. If you surround yourself with a bunch of people smarter than you, it’s pretty easy for me to do, surround myself with people smarter than me. I think it makes your life a lot easier and helps project yourself and accomplish better things.
I’m just trying to remember. I don’t remember which Malcolm Gladwell book it is, but Malcolm Gladwell does talk about that piece, that in business or in life that sometimes the time and effort it would take you to skill up to your weaknesses either you may never achieve it regardless of how much effort you put into it or the time that you take to skill up, you’re taking away from the things that you have a natural affinity for.
Forget about what your weaknesses are. Spend less time trying to be better at your weaknesses and more time honing what you’re good at. I think that that’s one of the things that our educational system is bad at is they’re so focused on trying to make the kid that’s bad at math or good at math instead of better at what they’re good at, writing or art or whatever they’re freaking good at. Make that kid better at what they’re good at and what they’re passionate about. Don’t worry about making that kid better at what they’re bad at because, most likely, they’re never going to be good at that because they freaking hate it. Just concentrate on what you’re good at.
I think, too, what you’re saying, Dustin, is if you’re focusing on what you’re good at, you like work is never going to feel like work. It’s always going to be a passion project to you, and if you like what you’re doing, you’re always going to invest more time than if you’re doing it because society put you in this box.
I think that that’s where we’re getting back to the whole college thing, and if you like working with your hands don’t go to UK or don’t go to the Ohio State University, go to a tech school and be a good machinist or be a good diesel tech or be a good welder or concentrate on what you enjoy doing. Don’t go become a nurse because your mom’s a nurse. Follow your passion don’t worry about your dad’s passion.
My dad told me I was crazy. I love my dad to death. He’s like, “You’re doing what?” I’m like, “Yeah.” He supports me but in the beginning, he’s like, “You’re not going to go get another job? I’m like, “No, I have a plan. This is what I’m going to do, and if I execute it, then great, then I’m off and running. If I don’t, then I can go get another job, I guess.” The jobs are always there.
I don’t even know what time we’re at. Usually, I keep track of time somewhat, but I’ve completely lost track of time, which is a good thing. Mac, tell everyone how they can get in touch with you. Just through our show. People know that they can email and ask questions and we’ll forward them on. They can email at Info@MfgMonkey.com.
It’s a real easy way and then we’ll get you in touch with whoever you want to. I appreciate everyone coming on. I appreciate everyone’s patience in the beginning more than anything. I think I sweated through my nice UK, three quarters up here. I get anxiety when things don’t plug in and I push the power button, and it works. That’s the end of my skill right there. I turn it off a couple of times and turn it back on, and hopefully, it works.
Dustin, I just want to tell you, thank you. I know you were sweating a little bit there in the beginning, but I think this was a great experience. I enjoyed it. I thank Claudia also for somehow or other running into you and you two connecting. I think there are a lot of things that this group and your group can do together and I appreciate the opportunity to get together with you.
Thank you everyone for coming on. I had fun.
Thank you.