In this episode we talk with Chuck Werner, Manager of Operational Excellence at the Michigan Manufacturing Technology Center. The MMTC is a resource for companies to help them work ON their business not just IN it. Listen to learn how manufacturing companies can make the right choices when implementing technology into their business.
Podcast Transcript:
Bryan Powrozek: I do think that Industry 4.0 is one of those terms that gets thrown around by a lot of different groups and doesn’t necessarily mean the same thing to all parties involved. When the Center is talking about helping manufacturers get up to Industry 4.0, what does that look like for you? How do you guys define that?
Chuck Werner: The term industry 4.0 is as far as we’re concerned, we use it mostly just for the historical sense. There’s been four industrial revolutions that have allowed us to use machines, then mass production and then computers in and of themselves, not necessarily interconnected. And then the fourth industrial revolution is really taking quite a few technologies that have been around for a very long time, multiple decades, and giving interconnectivity. So instead of having to go to separate areas to look at data, it’s bringing all of that data into one place so that we can see it and make decisions. It’s letting us monitor, not just run a machine, but monitor a machine and look at that machine. And it’s letting us kind of make a connection between what’s going on on the shop floor and our financial results.
Speaker 3: Welcome to the Sound of Automation, brought to you by Clayton and McKervey CPAs for growth driven businesses.
Bryan Powrozek: Hello and welcome to the Sound of Automation podcast. I am Bryan Powrozek with Clayton and McKervey. And joining me today is Chuck Werner from the Center. Chuck, how are you doing today?
Chuck Werner: Hi Brian. I’m doing fine. Thanks for asking.
Bryan Powrozek: Glad to have you on and I think it’s a pretty appropriate topic given the audience we’re focusing on. I think as we talked in preparation for this, our real target audience for the podcast are the businesses who are delivering the automation technologies to manufacturers. But this time it’s going to be a little bit different spin on it because you’re actually used to working with the manufacturers who are looking to consume that technology. So hopefully give some of the listeners a look at what the other side of the table is looking at and how they’re viewing things. So I guess just to kick us off here, could you give us a little bit of your background and talk about some of the work that’s done by the tech center?
Chuck Werner: Yeah, sure. So I guess for my own background, I’m what I’m going to call a 30 year veteran of the tier one automotive wars in manufacturing. So I started out about three decades ago as an operator on a plant floor, making parts. Slowly worked my way through, got my Lean Six Sigma black belt in ’96, Master black belt in 2010. So I’ve spent a long time making parts to put in boxes to sell the customers. I’ve been here at the Center in the role of manager of operational excellence for the last little over six years. And for about the last four and a half to five years we’ve been working on helping companies identify opportunities in technology. In addition, we do training, we do consulting, or as I like to call it mentoring. We like to think that the MEP, which is what the Center is a manufacturing extension partnership as a non-profit and a 501C uniquely positioned to be the trusted advisor to help people work on their business and not just get trapped working in their business all the time. And I should note, so we are the MEP for the state of Michigan, but there are actually 51 MEPs, one for each state as well as one in Puerto Rico.
Bryan Powrozek: Excellent. Yeah, you stole my next question there. So obviously for business owners operating here in the state of Michigan where we’re at, it’s the Michigan Manufacturing Technology Center, is that correct? Is the full name?
Chuck Werner: Absolutely.
Bryan Powrozek: But you guys go by just the Center, but that’s one of the points that I wanted to make for our listeners who are outside of the state of Michigan. While the Center focuses on helping Michigan based business with all the things that Chuck just talked about, if you like what you’re hearing in the course of this conversation, there’s an MEP within your state that does similar things. Now each state, correct me if I’m wrong here, Chuck, but each state operates a little bit differently and some may have all the services that you provide, some may not. But it’s definitely something that manufacturers, particularly the small to midsize companies who are looking for some additional help should familiarize themselves with because there’s a lot of great resources that you have access to.
Chuck Werner: Yeah, absolutely. Some are full service, some aren’t. But regardless of how the MEP is set up, any MEP can help a client or help a manufacturer get in touch with the resources that they need to move forward.
Bryan Powrozek: Excellent. So let’s dive into the topic and first maybe just kind of level set for everybody, because I do think that Industry 4.0 is one of those terms that gets thrown around by a lot of different groups and doesn’t necessarily mean the same thing to all parties involved. When the Center is talking about helping manufacturers get up to Industry 4.0, what does that look like for you? How do you guys define that?
Chuck Werner: So the term industry 4.0 is as far as we’re concerned, we use it mostly just for the historical sense. There’s been four industrial revolutions that have allowed us to use machines, then mass production and then computers in and of themselves, not necessarily interconnected. And then the fourth industrial revolution is really taking quite a few technologies that have been around for a very long time, multiple decades, and giving interconnectivity. So instead of having to go to separate areas to look at data, it’s bringing all of that data into one place so that we can see it and make decisions. It’s letting us monitor, not just run a machine, but monitor a machine and look at that machine. And it’s letting us kind of make a connection between what’s going on the shop floor and our financial results, which I think is probably the most powerful tool out there. We prefer the term lean manufacturing technologies or manufacturing technologies because our approach is, I’m not going to tell a small or a medium sized business that they need to go out and get all of these technologies today. Our approach is more to determine where you have an issue or determine what your problems are or what you need to work on and what you need help with, and then apply an appropriate technology to overcome what I think every manufacturer out there is currently suffering. And that’s an inability to find all of the workforce that they’re looking for.
Bryan Powrozek: Exactly. And I’ve seen this on both sides, kind of the [inaudible 00:07:33] back in my time in engineering and then my time working with clients. There’s a lot of technology providers out there, and I don’t think it’s done in a malicious sense, but it’s kind of the old adage of if the only tool you have is a hammer, then every problem looks like a nail. So business owners would connect with a technology provider, maybe through a referral, or they attend a conference, they find somebody and the technology provider comes in and talks about how, oh yes, we can solve all your problems with this or this. And then all it takes is that business owner getting burned one time on a piece of technology or a system that doesn’t live up to the hype that now they’re back on their heels and they don’t want to go through that again. And they just say, well, I’m going to continue on with what I’ve been doing and not try and go down that path again. So that’s one thing I really like about the Center and the MEP concept is that you guys are, you’re agnostic to all these technologies. Your only focus is go in, help the business owner identify where they can improve and then help give them some options for how to address those things. And then hopefully with that incremental improvement, they’re open to additional improvements as they go forward.
Chuck Werner: Yeah, that’s accurate. In fact, our adoption roadmap that we’ve put together on how a company should adopt a technology, I know most of them that you look at is go out and learn about all these technologies and that’s great, but what you said was so accurate, if the only thing you sell is this technology, and I ask you if your technology is going to help me, yeah, it’s going to do everything I need in my business, it’s going to turn back time and it’s going to make stuff fall up. And that doesn’t necessarily work out that way. So our very first step really is know thy self. Get in touch with your business and understand what your voice of business or the voice of customer is telling you your business needs. And then really get to know that need first because then it’s so much easier when I’m selecting a technology or an approach or really anything. It could be a system, maybe I have a system problem in the business and putting technology on top of a bad system just gives you a faster bad system and that’s not so helpful. So understand what problem you are trying to solve first and then move forward.
Bryan Powrozek: So I guess putting myself in the technology provider’s shoes a little bit here, what are some of the common objections that you hear when you’re working with some of these small to medium sized business owners related to trying to adopt some of these technologies?
Chuck Werner: The first one you’ve already hit on, as a matter of fact, the very first objection I hear is, yeah, we got an ERP and we’re using 20% of it. And I’m not picking on ERPs. I love information systems. I think many times the first step that a business should take is finding some sort of a system, an information system, ERP, MES, CMMS, whatever it might be to bring all that information in front of you to allow you to run your business and basically be proactive instead of reactive. So I think they’re a great thing. The problem is so many businesses didn’t understand their needs and they went out and got burnt because they got something or bought something that didn’t quite match their business needs. So I think that’s the first one is I didn’t know my needs and I got burnt and I’m not dipping my toe in again. Another one is not really understanding and I’m going to use the term ROI, return on investment. Not really understanding. Again, if I’m not in touch with my business, I may not know how much money I’m playing for. I worked with a company, they were a 50 million a year in sales company making a pretty good profit. And they were feeling pretty good about things. We went out, did a quick analysis with them and learned that they were writing a check for about $600,000 a year in lost materials. But if you don’t know that that money’s out there and you don’t know where that, then I don’t know that I have that money to invest. I can go out, I can improve that process, free that money up, and then use that money to invest. Or maybe the company doesn’t really understand what’s out there with regard to maybe grants and helps. That’s one thing that we as a center have been working with in partnership with the MEDC and our federal funder at NIST MEP is that right now there is a grant out there. And over time it’s been moving towards some of these grants that are coming out now will actually help a small business or medium business to get investment capital that they can actually use on capital expenses, which up till now has been hard to find. So getting that financial push is also an issue, but sometimes writing that check is the right thing if you just understand what the need of the business is or how bad you’re being impacted.
Bryan Powrozek: Oh, that’s excellent. And I think you kind of alluded to it a little bit earlier, but I’m assuming the way that the Center tries to overcome those objections is with that technology roadmap you referred to. And so you can show the business owner, here’s how we would like to progress you through this process and here’s the steps that we’ve seen are successful in terms of helping businesses move in this direction. Is that accurate?
Chuck Werner: Yeah, absolutely. But we also work with the technology providers as well. Again, as you said earlier, we’re agnostic. All we really care about is that the client, the manufacturers that we work with get what they need to develop and drive their businesses forward. Towards that end, I think another barrier, and I guess to tie this all together is some of the technology providers aren’t particularly good at playing with the small to medium enterprises is probably the best way for me to put that. There are a lot of robot suppliers as an example, who are very, very happy to come in and help you when you want to buy 20 robots for a production line. However, when you want to buy that first robot or co-bot, collaborative robot and just try dipping the toe in for auto loading one machine, it’s a little harder because it’s also harder for the sub supplier to understand, or we call them sub suppliers, but your technology supplier, they may not really have a model that works at that lower level or that smaller business level to help people get started. So it’s working with the public sector for how do we help to find the monies, it’s working with our clients to identify where their needs are and what level of impact that’s going to have. But then also working with that technology provider to try to come up with a model or a match that’s going to allow them to be effective or to help develop new providers and help them grow. We actually work with the various startups in addition to be able to help them grow so that we’re kind of building that infrastructure that can provide technology at that smaller level.
Bryan Powrozek: And I see that with the clients I work with as well. And there’s a few of the integrators that I know who are trying to develop somewhat more off the shelf type technologies where it’s easy for a small manufacturer, maybe it’s a machine tending piece of equipment or something like that where now the screw machine shop or the fab shop can keep that machine running 24 hours a day because the robot’s tending it over overnight. But yeah, by far I think there’s more providers out there who are ready to do the full system integration. And so there’s definitely a mismatch between the scope and size of projects they’re going after and the scope and size of projects that the small to mid-size manufacturer might need to see that first ROI and then down the road it could grow into something more, but to get that initial success to what their appetite for more, there’s not a lot of solution providers out there. So being able to connect the two sides as the Center, that’s a great resource I think, for the market. So I guess if I’m a manufacturer sitting back listening to this podcast and I’ve been thinking about this for a while and I’ve been kicking around the idea of improving my technology, what advice do you have for owners who are considering this investment?
Chuck Werner: Again, and we spoke to the roadmap, know your business, start with your business and or get help on looking at the business. So we have developed an assessment to be able to come in and it’s 40 questions, it’s about two hours of time, give us another hour for feedback. But basically coming in and taking a look at the whole value stream front to back of the business and trying to help identify where those areas of need are so that what it is you’re looking for in advance. And then find a trusted advisor. Or if you have those individuals, if you’re a medium size or even [inaudible 00:18:12] you’re not a larger size at manufacturer, it’s important to be able to go out and then do your own research. And that’s important. And sometimes that’s hard because then it becomes bandwidth. I know a lot of clients that I’ve worked with have made bad decisions on investments or technologies because they got fatigued. I’m very busy working in the business. [inaudible 00:18:40] use in the business on the business a lot, but I’m so busy working in the business and I’m going to go out and do this and I know I need this technology and I get it out there and I start asking questions and bang, the salespeople are on me. Not knocking salespeople, we need them. But the calls and the constant diversion from trying to keep my business running successfully. And then eventually I either walk away from the table or I buy something because this is the one that’s most in my face. So we always say know the business, understand what the gap is and what you’re trying to solve. So for example, I said earlier that I think it’s extremely important for a business to have some sort of an information system and know real time whether or not they’re successful as a business. However, if that business is constantly shutting down lines because they don’t have enough people or they can never make their trucks on time because they don’t have enough bandwidth to keep the machines running, as you said, I can run a machine one shift or two shifts, but I can’t run it lights out. I may need to consider that sort of technology through automation or robotics first. Because until I can quiet that shop floor down, the noise is going to keep me from working on any other culture or it’s going to prevent me as an owner or senior manager from working on the business. Because I’m just trying to make trucks and make shipments. So have a plan and treat it like a project, not a hobby.
Bryan Powrozek: Exactly.
Chuck Werner: If you’re in your third year of an ERP launch, we’re starting to move from project to hobby, we’ve got to have somebody running it.
Bryan Powrozek: Yeah, no, I think that’s a great piece of advice and something, you see a lot in that small to midsize and especially I would put it more on the small end. But you’ve got those five to 10 million year businesses and it’s no fault of the owner or the leadership team, but they’ve got to that point by doing it all themselves. And they learned all the lessons and they figured it all out. And so many of those business owners I work with, I have no doubts in their capabilities and given enough time, enough hours in the day, they could probably learn all the stuff they needed to grow the business, but they only have 24. And so they need to figure out where best to allocate their resources and then find the partners that can help them in the other areas. Because for the vast majority of them, their goal isn’t to turn this into the next Fortune 500, Fortune 100 company and have it survive on for centuries. It’s to grow the value to be able to exit and have money to take care of their family and enjoy their retirement. So you can really accelerate that by finding the right partners and the Center is one of those partners that we feel is a great resource to business owners especially, I keep coming back to that same point because you guys are unbiased, you don’t have anything to sell. You’re trying to help business owners navigate some of those initial challenges. So I think for businesses here in the state of Michigan are lucky to have you guys around and should definitely reach out to you. Obviously the other states and Puerto Rico, there’s MEP offices that can help as well. So by all means look those up. I guess if an owner’s listening to this and wants to learn more about some of the programs that the Center has to offer, what’s the best way for them to get in touch with you?
Chuck Werner: So the easiest answer is just go to our website at www.the-center.org, so that’s T-H-E-center.org. All of our services, all of our teams, and you know what, again, we’re going to help direct you. So if you go to the website, there’s an area to just ask a question and say, “Hey, I need help with.” And that will run right through our marketing department and get right to us. I’m reachable straight through there. I invite people. I think LinkedIn is a wonderful tool. So I’m on LinkedIn under my name, Chuck Werner, W-E-R-N-E-R, and can be reached through there or just give us a call here at the Plymouth office.
Bryan Powrozek: Well Chuck, I really appreciate you coming on today and sharing with the audience and I guess we’ll be in touch soon and hopefully work together on a few more clients here.
Chuck Werner: Outstanding. Thanks for the call.
Bryan Powrozek: All right, thank you.
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