The Sound of Automation
Listen to this episode of The Sound of Automation podcast to learn about the benefits, opportunities and impacts of digital transformation. Discover the different ways to define digital transformation, and listen as Sam Hoff of Patti Engineering explains how digital transformation is used in his organization.
Podcast Transcript
Announcer:
Welcome to the Sound of Automation, brought to you by Clayton and McKervey, CPAs for growth-driven businesses.
Denise Asker, Director of Mkt. & Practice Growth:
Good morning, Bryan, how are you?
Bryan Powrozek, Sr. Manager, Industrial Automation:
I’m good. Denise. We’re back again.
Denise Asker, Director of Mkt. & Practice Growth:
We are. It’s great to see you live.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Another exciting episode of the Sound of Automation.
Denise Asker, Director of Mkt. & Practice Growth:
I’m looking forward to it. So today I think you’re talking about the overused phrase of digital transformation.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Yes.
Denise Asker, Director of Mkt. & Practice Growth:
I know why it’s overused. It’s here and it’s important, but can you tell me, in layman’s terms, what it all means?
Bryan Powrozek, Sr. Manager, Industrial Automation:
No, because you just told me I need to keep this answer short.
Denise Asker, Director of Mkt. & Practice Growth:
Yes you did.
Bryan Powrozek, Sr. Manager, Industrial Automation:
I think, as you said, it’s overused. A lot of people have different ideas of what digital transformation is, what it can do, et cetera. Sam Hoff and I, Sam of Patti Engineering, talked today about what digital transformation looks like for him and kind of some of the benefits, how’s it impacting his business, et cetera. I don’t think people will come away from this podcast with a definition, but I think they’ll come away with a little better understanding of how it impacts their business.
Denise Asker, Director of Mkt. & Practice Growth:
A little more clarity. That sounds good. With the pandemic on the tail end we can hope, are there a couple of trends that you’ve seen in this space that you want our listeners to be mindful of?
Bryan Powrozek, Sr. Manager, Industrial Automation:
Digital transformation itself is … There’s so many pieces going on, it’s hard to really pinpoint. But the biggest thing to me is how is digital transformation impacting the operation of the business? How is it impacting the people doing the job? Is it upskilling some people? That’s the big concern with automation. It’s putting some people out of the job market. I think when you really look into it, there’s more opportunities in that area than risks, but that is a big component that people need to think about in any digital transformation effort.
Denise Asker, Director of Mkt. & Practice Growth:
That makes sense. I know on the marketing side, we feel very stretched by all things digital that have heightened with the COVID pandemic. Are there are a couple of things on the accounting side that you see the firm grappling with as well?
Bryan Powrozek, Sr. Manager, Industrial Automation:
Yeah. I mean, you go through the big ones. Artificial intelligence, automation, the ability to do work from anywhere, and those are all great things. But you’ve got to establish people’s expectations. What is it exactly you’re looking to get from whatever this tool you’re putting into place? Can that tool actually do it? Then how do you not just replace what you were already doing with a new tool, but use that tool the way it’s intended and change the way you do business?
Denise Asker, Director of Mkt. & Practice Growth:
That makes sense.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Because that’s where the real value comes in.
Denise Asker, Director of Mkt. & Practice Growth:
Sure. Well, great. Thanks for that. I’m going to listen to Sam and hopefully come away with a little bit more knowledge.
Bryan Powrozek, Sr. Manager, Industrial Automation:
All right. Thanks, Denise.
Denise Asker, Director of Mkt. & Practice Growth:
All right. Yep. Bye-bye.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Hello and welcome to the Sound of Automation podcast. Joining me today is Sam Hoff of Patti Engineering. Sam, how are you doing?
Sam Hoff, CEO, Patti Engineering:
Good. How are you doing, Bryan?
Bryan Powrozek, Sr. Manager, Industrial Automation:
I’m doing all right. Doing all right. So today we’re going to talk a little bit about digital transformation. I mean, that’s obviously a very hot topic for anybody looking at Industry 4.0 and just business, in general, these days. But before we get into that, I guess, can you give me a little bit of your background and maybe some of the history of Patti Engineering?
Sam Hoff, CEO, Patti Engineering:
Absolutely. So Patti Engineering, we’ve been in business for over 30 years now. I started it a year out of college. Named it after my lovely bride Patti, who’s the CFO of the company. So as I tell people, she’s the CFO and the CEO. She’s got all the money. If I’m bad, you’ll never see me again.
Sam Hoff, CEO, Patti Engineering:
We have offices in Auburn Hills, Michigan, Indianapolis, Indiana, and Austin, Texas. We started out doing a lot of automotive automation. We still do a lot of work with the automotive industry. It’s a great industry to work for, but we’ve also branched out from there. We do a lot of textiles. We do warehousing and distribution, which as you might guess, is really hot these days. We’ve got great partnerships with clients like Siemens, FANUC Robotics, B&R, ifm, Ignition. We really try to concentrate on solving our customers’ issues. We’re about 35 or so employees.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Oh, fantastic. So now when you guys started out, were you more on the control side or the machine build side, or did you guys do a little bit of everything?
Sam Hoff, CEO, Patti Engineering:
If we do mechanical or we do traditional panel build like a lot of integrators do, we sub that stuff out. We are just high-level engineering. The company started out 30 years ago with me and a laptop and started bringing on employees, and every management lesson I’ve ever learned is the school of hard knocks, doing it wrong the first time and then figuring out how to do it right. But we have done traditional PLC programming and that kind of stuff and robot programming, but it’s morphed into so much as you’re seeing IT and OT blend together.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Yep. Oh, excellent. Really when we were kind of planning for these meetings and thinking about it and we talked about, “Okay, how do we do something with digital transformation,” for me, that’s one of those terms that I think if I talk to 20 people in industry, I’m going to get 20 different answers about what digital transformation is. There’ll be some commonalities, but I think it’s a buzzword that people like to throw out. You say, “Oh yeah, we’re focusing on our digital transformation,” but this is really an area, kind of a passion for you. Within the Controls System Integrators Association, you’re the chair of the Digital Transformation Committee. So in a nutshell, what is digital transformation to Sam Hoff?
Sam Hoff, CEO, Patti Engineering:
In a nutshell, what digital transformation is to Sam Hoff is using tools like the digital twin, business analytics, analytics that you’re getting from the floor to improve manufacturing without having to be right beside the line and watching it run. You’re right, Industry 4.0 and digital transformation, they’re buzzwords. Artificial intelligence is too. I’ve done a lot of studying into AI. You ask the 10 leading AI experts in the world what artificial intelligence is, you’ll get 10 different answers.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Yeah, and it’s funny to me because probably a couple of years ago, we started speaking on this a lot with, I think, Automation Alley and some of the other associations we’re involved in because I think a lot of people think about the plant floor. That you’re on many, you’re creating a digital twin, but so much of what we do in the finance and accounting world is undergoing the same changeover. You can replace your bookkeeper with a bot that’s just going to go and scan invoices and put everything you [inaudible 00:07:24]. So people really, I think, tend to fixate and focus on the plant floor, but there’s implications kind of across the board for a business of how it’s going to go.
Sam Hoff, CEO, Patti Engineering:
Without a doubt. Without a doubt. You’re seeing the blending of the plant floor and the front office. But the thing is, is most of these systems that you’re looking at out in manufacturing, they weren’t built with Industry 4.0 in mind. In fact, most of the systems that are being delivered today aren’t built with Industry 4.0 in mind. It’s funny because you see these large automation lines and all, and they use digital tools to help simulate, create solid works, NX, all this stuff to create these lines. Well then, lot of times they throw that away and they start mechanically building it and the controls engineer start controlling it. Well, let’s take these tools. Let’s use it. That is the basis of the digital twin. Now you can start testing and commissioning this system before it’s ever built. So you know what issues you’re going to have before it’s ever built. Now, you have to perfect the digital twin because a lot of times the simulations and all can be off. There’s a lot of work with perfecting it.
I take a look at it. I’m a huge baseball fan. Love the Tigers, love baseball, and you’ve seen analytics kind of overtake baseball. You’ll watch the Tampa Bay Rays, they have four outfielders and they’ve got three infielders between second and first base and they’ve got nobody on the left side of the infield. You’re like, “What the heck are they doing?” Well, they know the hitter. But the people that are doing those analytics, they have to understand baseball and the game and have a little bit of way to contextualize the data that they’re getting. One of the mistakes I see, that I see a lot of people suffer from, is they think they can just throw all this data at some AI company and it’s going to give them all the answers. Well, if the AI company, if somebody cannot contextualize the data and what the data means, they’re not going to be able to help. You need to have the ability to contextualize the data too, and that’s why system integrators are so set up for this transformation.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Do you see that really changing the role of the system integrator within the process? Because I mean, traditionally at least my understanding of it, you’ve got a Rockwell piece of equipment and you’ve got a FANUC piece of equipment and the folks working on the shop floor don’t know how to make those two work together. So the system integrator comes in and can connect those and get them to do exactly what you want to do. And then the plant personnel can take over and do the maintenance and update some minor things. But this really now kind of drives the system integrator up more because you’re saying, “Hey, not only can I make these two things work together, but I can also make it work together in a way that it’s giving you the information you want to see and that you need to see to run your business,” so it kind of drives you further up the value chain.
Sam Hoff, CEO, Patti Engineering:
Without a doubt. Without a doubt. You have to put together the edge strategy, you’ve got to put together how you’re going to maintain that piece of equipment over its lifetime, how you’re going to do predictive maintenance on that equipment. There are so many things that the system integrator can do by staying on the leading edge without getting on the bleeding edge.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Yeah, exactly.
Sam Hoff, CEO, Patti Engineering:
Trust me, I’ve been on the bleeding edge before.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Exactly, at one of the conferences I was at, I was talking to a representative from a vendor. I can’t remember which one it was, but they were talking about, “Oh yeah, our new robot. You’re not going to need an integrator because it’s going to be like your printer. You bring it in, you turn it on, your Wi-Fi network picks it up and you’re off and running.” I’m like, “Yeah. But somebody still needs to understand how to make all that stuff work.” So yeah, you may take out that low-level work you guys are doing, but now that’s just going to let you focus on the higher-level stuff. That’s where the real value is and the real money is for the organization.
Sam Hoff, CEO, Patti Engineering:
Yeah
Bryan Powrozek, Sr. Manager, Industrial Automation:
Excellent. So, how have you seen this change, these technologies, and digital transformation, how have you seen that change the way that Patti does business over the last … I mean, you said Patti’s been around 30 years, so how have you seen it change? Obviously, I’m assuming it’s accelerated a lot here over the last, five, three to five years.
Sam Hoff, CEO, Patti Engineering:
Without a doubt. You’re seeing digital and Industry 4.0 projects go from proof of concept to actually implementation now. We are having more conversations with our clients at higher levels and with the IT group and bringing different groups … You used to just work with the manufacturing engineers. Now you’re working with industrial engineering to see what they need, you’re working with the IT group to see what their needs are and talking about cybersecurity. I mean, you take a look at some of the cyber-attacks recently and all, and we’re in a cyberwar and how do you protect that industrial equipment on the floor? It’s a whole ball of wax there. How can we consult the client to bring them value?
You talk about the PLCs and the robots. I have some manufacturing experience from 30 years ago, but when I was in the body shop in Baltimore, you needed to know two devices. If you knew the PLC and you knew the robot controller, you could run that whole plant because that’s all there was. I mean, it was maintaining a lot of it, but that’s all you had to know. You had to be a master on those two devices to run that facility. With the complexity of automation, with vision systems, with AI out there, with predictive maintenance and all, that person that can run that plant and know everything technically on that floor is not there. So how do you give that person the help and the assistance to do their job better? How do you give them the tools to help them understand what’s going on? There are a lot more complicated systems than what we had 30 years ago.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Yeah. It’s interesting, I’ve been reading a lot lately about the talent gap, and it’s more than just the, “Well, we’ve got nine million people out of work at 9.3 million open jobs, and we can’t get them to match up.” It’s the fact that you don’t have the right people to do those things, and then the people that you do have … That guy that was working on the line doing kind of the preventive maintenance stuff, how do you upskill him to be able to now take a larger role in this, which then helps fill that void? Because I was speaking to another gentleman that works for an automation company on there. He’s in charge of their academic partnerships. I can’t remember the exact statistic he gave me, but just for what they saw the demand in engineers from the automation industry, exceeds what the universities are graduating, and that’s just one industry.
Bryan Powrozek, Sr. Manager, Industrial Automation:
So now you’re all competing and it’s like, “Hey, how do we solve that problem?” I think that some of the lessons from the pandemic are going to help with that. That-
Sam Hoff, CEO, Patti Engineering:
Without a doubt.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Now, you mentioned that Patti has a couple of offices, but now you can employ an engineer in Montana if he does the right job and he’s getting stuff done. So now Patti’s got a larger reach, which is good. Bigger talent pool. Harder for you. You’ve got to recruit in 50 states as opposed to just one. But how have you seen some of the benefits of digital transformation impacting how you’re running the business? Not the technical side, but the actual hiring, developing, things like that.
Sam Hoff, CEO, Patti Engineering:
The one thing about the system integration business is when you commission and you start-up systems and you visit clients, you have to be there. There’s a lot of travel involved. One of the things with digital transformation is you can reduce that by virtual commissioning, by being able to look at how the customer system is running remotely, by bringing data up and doing data analytics, and even going into Patti Engineering, the office, and all. I mean, we’ve never been hard-and-fast that you need to come in every day at this time and all. We’ve always had people working. Want to work at home today, that’s fine. You usually get more stuff done at home anyway.
Sam Hoff, CEO, Patti Engineering:
But that’s become … I mean, forever, pre-pandemic, Sam Hoff never missed a day at Patti Engineering. Now about one day a week, I’ll stay at home. Wednesday is my meeting day where you have a bunch of internal meetings. A lot of times our Wednesday I’ll just do that at home in my shorts. I’ve got to get rid of the head trash because I’m kind of a little old school in that way, but you are right. Being able to do remote employees, we had remote employees pre-pandemic, and we had a remote employee policy and all. But it even helps for it more so.
Bryan Powrozek, Sr. Manager, Industrial Automation:
I think, to me, it’s going to be really interesting seeing what stays, what goes, what changes as things go back to normal. But I think the companies that over the next whatever you want to say, five, 10 years, whatever it is, the ones that thrive and grow are going to find new ways, expanding the talent pool they’re going after, maybe pushing down who they’re going after. People that were traditionally maybe getting Associate’s Degrees. “Can we get them a certification that gets them ready to … Yeah. They’re not going to be able to do the full project, but they’re going to be able to contribute.” And then who knows? A lot of people used to graduate from the school of hard knocks. They would just learn on the job and then they’d learn the next piece and then they’d learn the next piece. I think we’ll probably see a lot more of that going forward would be my guess. I’m not an HR professional, but it’s going to be my guess.
Sam Hoff, CEO, Patti Engineering:
I agree 100%. We, over the last 30 years have overemphasized the worth of a college education. I don’t know how many kids go to college and graduate with a degree that’s worthless. You can go straight out of high school, get a skilled trades job as an apprentice electrician, make 20 to $25 an hour, start saving money, and build a hell of a career. Welders, CNC operators, and all this.
Instead, we’re seeing people, because of head trash, sending those kids to college, having them graduate, and having them have less skill than the kid that out of high school went and did that skilled trade. I’ll get off my soapbox a little bit, but there’s a lot of talk about education and how we fund it and whether we forgive, STEAD, and all this stuff.
We sat on a board of our daughter’s college parental advisory board. There is a shrinking number of high school graduates between now and 2035. That was the statistic when we were there. The problem will solve itself. Schools are going to be fighting more and more and more for the students that are available, and some of the schools will go by the wayside if the government just stays out of it.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Yeah, so I would agree. You mentioned head trash again. Let’s go back to one area where we see that. We touched on it earlier. Everybody’s got a different idea of what digital transformation is. So client calls you up, says, “Sam, I want to digitally transform my plant. I want you guys to come in and tell me what we got to do.” Right there, because you two are not on the same level and have the same expectations, I can see that creating a lot of problems. So how do you guys at Patti, how do you manage those expectations with the client to make sure that the job is successful and that they’re not coming in expecting that, “Hey, this is going to do these million things.” In reality, it’s going to fix maybe 10 things in their operation.
Sam Hoff, CEO, Patti Engineering:
So my first question is, why do you want to do the digital transformation? I want to hear why. “Well, my boss is telling me I got to do it because of our plant.” What’s your biggest problem that you have in your facility? What keeps you up at night? And then listen to that and say, “What can we do with different strategies and different digital technologies to try to solve that problem that you haven’t been able to do traditionally?” It has to start with solving a problem. Any digital project or digital transformation has to start with solving a problem.
Bryan Powrozek, Sr. Manager, Industrial Automation:
That’s a very good point, and I think we even see that within our own business. Most people think accountants, tax returns, financial statements. But inevitably business owners come to us for a reason. It’s not because they want their tax return filed. If that was their concern, they could find any CPA that’s going to do it for the price they want. They really want somebody that can advise them and ask those questions. Because I’m sure you have the same things that come through your mind and just having that sounding board to respond back and say, “Well, wait a second. Let’s kind of step back and, and see some more.”
Bryan Powrozek, Sr. Manager, Industrial Automation:
Well, Sam, this has been a great conversation. I really appreciate you taking the time coming in. One last curveball for you. I didn’t have this on my list before, but I think it’s worth noting because I know that … You said 30 years, Patti, but the anniversary is sometime around now.
Sam Hoff, CEO, Patti Engineering:
Yeah.
Bryan Powrozek, Sr. Manager, Industrial Automation:
What is one piece of advice if I’m a smaller system integrator just getting started out, I mean, in that 30 years you’ve seen a lot of ups and downs. You’ve seen different fads come and go. What’s one or two pieces of advice you have to that new Sam Hoff that’s coming out of college, wants to start his business, of how to have longevity over the long term?
Sam Hoff, CEO, Patti Engineering:
Be honest with yourself and be honest with your clients. You’re always going to make mistakes. But the thing is, is you have to look in the mirror every day and say, “How can I be better as a manager? How can I be better as an integrator? How can I serve my clients better today than I did yesterday?” You’ve got to be honest with your clients. Every system integrator, if you’re in here, you have those projects you remember. I probably have about three or four over 30 years that just about brought me to my knees, made me cry, stayed up at night. But you know what? You work your way through them. You figure out how to get them done and at the end be true to yourself.
Bryan Powrozek, Sr. Manager, Industrial Automation:
Excellent. Well, Sam, again, thanks for coming in. I appreciate the time. For all those of you listening to the podcast right now, I appreciate you tuning in.
Announcer:
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