In this episode, we talk to Tom Burmeister, President of Profit Miners, Inc. a management consulting company focused on operational improvements for manufacturing clients. With over 40 years of experience working in, owning, and improving small to mid-sized machine tools and other manufacturing shops, Tom knows the ropes of this business and the ups and downs it has seen since the 1980s. Join us as we discuss the trade-offs, security risks, and people skills needed to successfully include cobots, automated tooling, and other Shiney-new equipment into long-standing small to mid-sized shops.
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EPISODE TITLE: Which is Better? IIoT or Lean Culture? – Tom Burmeister
In this episode, we query the four decades of manufacturing experience of Tom Burmeister of Profit Miners, Inc., a business operations expert. Among today’s topics are transitioning SMBs to automation, whether or not it’s really necessary, how to fill the skills gap, and how to transition businesses that have been closely held and the workers that have been there for decades. All very topical and we dive deep into it.
“ IIoT projects are not really that difficult to do, but what people lose track of is the fact that the employees are the most valuable, flexible tool you can have in a shop. Absolutely. The more knowledge they have, the better off you are.” – Tom Burmeister
About Profit Miners: https://www.ProfitMinersInc.com
About our Guest Tom Burmeister:
Tom Burmeister is an entrepreneur and consultant who gained his business and manufacturing expertise over 40 plus years in positions ranging from shop floor to senior management in companies of various sizes and industry segments throughout North America.
With his unique perspective and practical, hands-on approach, Tom has successfully managed a broad variety of engagements including start-up, merger & turn-around situations, lean initiatives, product & process development, facility expansions, and company relocations.
Tom has performed business operational assessments for the CT Development Authority and provided technical assistance to the CT DECD in support of their efforts to attract new businesses to CT. He was also selected by the State of CT to develop a curriculum and provide Lean training to groups of manufacturers under the Progressive Manufacturing Pilot Program.
Tom obtained a Mechanical Engineering degree from the University of Wisconsin – Milwaukee and a further degree in Mechanical / Computer Engineering from the Milwaukee School of Engineering.
CT Energy Programs, Tom’s latest venture, brings a continuous improvement approach to helping clients reduce costs by better understanding and managing energy use. Past enterprises include an energy procurement and services company, a manufacturing service company, a factory automation business, and a non-profit organization that acquired old manufacturing facilities and put them to new uses. Tom was also a founding member of Connstep, a NIST Manufacturing Extension Partnership program.
Tom currently serves on the Board of Directors for the New Haven Manufacturers Association and the Connecticut Economic Development Association. We are pleased to have someone with his depth of experience spending time in the Factory of the Future®.
Tom B. – Profit Miners, Inc.
[00:00:00] Mitch: Welcome to another episode of the Factory of the Future®.org podcast series. And today our guest is Tom Burmeister, owner, and founder of Profit Miners, Inc. and a person with a vast amount of manufacturing experience spending four decades. And I’m proud to count him as a friend and a colleague in the work we do with factories.
[00:00:24] Mitch: So welcome Tom.
[00:00:24] Tom: Hey Mitch, how are you doing today?
[00:00:27] Mitch: Quite well. To get things started, we usually like to have our guests tell us how they got into manufacturing. And the main reason we do that is many people have preconceived ideas that if you work in manufacturing, the only thing you do is operate a machine.
[00:00:41] Mitch: And that’s one of the myths we’re trying to dispel. There’s plenty of room for all kinds of people with all kinds of interests and all kinds of professions within the world of manufacturing.
[00:00:54] Tom: Yeah. That’s very true. In my own story, I started out, grew up in Milwaukee, and had a neighbor with a machine shop.
[00:01:01] Tom: So when I was a young kid, I’d go over to the shop, earn some pin money cleaning up and moving stuff around. And that kind of led to “here’s how you sharpen a drill.” “Here’s how you make the lathe tool.” You say you run a machine so on and so forth. And actually, it was back then that I met my first mentor, an old German Toolmaker named Gus who if they’re saying the shop, as many of the Milwaukee tool shops, was predominantly German. And, while I spoke English and not German, the owner was fine with English. Most of the toolmakers spoke English when they had to so Gus came around and he told me finally that the only way I’m going to get anywhere is if watch what the master toolmakers do and learn from them. And it’s frankly it’s a thing that I put to practice all throughout my life. It’s pretty good advice, right?
[00:01:55] Tom: I transitioned into molding shops. Pattern-making screw machine shops, stamping houses. I’ve been in pretty much every kind of shop there is, and I’ve run an awful lot of different. Over my career, not had a lot of different jobs in manufacturing. And so you’re absolutely right. There’s, it’s not just a one or two things you can do.
[00:02:20] Tom: It’s really just an unbelievable amount of different technologies and things that you can learn in the world of manufacturing.
[00:02:31] Mitch: Cool. So many people think that you have one role and you’re saying you can change and like I’m going to go to school for this or work something, and then they get out and they’re like, oh, maybe I don’t actually like what I’m doing. I think what I hear you say is that even within what you’ve chosen to do, you’ve done a bunch of different things and it’s still all roughly within manufacturing.
[00:02:56] Tom: That’s correct. You’ve got your production people, your quality inspectors, your engineers, people trying to figure out what the customers’ part should really look like and how to actually make it procurement, buying materials, controlling your inventory, and paying the bills. There’s an awful lot going on under a roof.
[00:03:16] Mitch: So one of the things we’re talking about today is technology and what role it plays.
[00:03:23] Mitch: Three what changes are coming with the industrial internet of things? And again, I think this is a whole other area where there’s a lot of chatter and not a lot of actual people with experience saying what it is and how it’s going.
[00:03:39] Mitch: So if you can maybe speak a little bit about your experience with seeing technology change. Over the time that you’ve been working in manufacturing, one of our other guests said used to be the maintenance person who only needed a spanner wrench and screwdriver and could fix just about everything in the shop.
[00:03:59] Mitch: Now that same, person’s got it, ultrasonic leak detector and an infrared gun for heat bearing analysis. And so he’s still the maintenance person, but he’s got a lot more tech.
[00:04:11] Tom: Yeah, that’s very true. When I was a kid, in almost any shop you went into, half of the machines would be Navy gray from the war effort.
[00:04:20] Tom: And not a whole lot of sophistication. You get into the late seventies into the early eighties and it really started getting more interesting. You’d take a look at mold making. I used to stand in front of a machine that looked like a Bridgeport. The machine had a big baseball handle on it. And it was a deco machine. They called it and it was a tracer.
[00:04:42] Tom: So I carved a wooden template and this tracer had a probe that I basically used the baseball bat to run over that wooden template. And wherever I moved that the cutting tool on the machine cut metal to form that shape. Wow. And it was, now you go down and you sit down, you’re running a program, you punch it in and it seems am zoomed.
[00:05:03] Tom: The thing’s moving to 900 inches. Off the thing comes. A part that would take me maybe, 3, 4, 5, 7 days to make and a knock that off in an afternoon. It’s really pretty amazing and I don’t have to do mark-up and I don’t have to make a pattern. So yeah, so technology has come a really long way.
[00:05:25] Tom: And what it’s allowing people to do. Become more competitive. You’re a little more flexible. You can get things done quicker. The technology is good. As far as manufacturers are concerned, the problem is people have to understand it and have the capacity to utilize it.
[00:05:45] Mitch: That and looking at the things that have changed what do you see people adopting the most common in the factories you’ve been in?
[00:05:56] Tom: You’re starting to see some work assists, some robotics, some vision systems, basically things that can help ensure that they’re not going to scrap out a part. A lot of this technology is being utilized to minimize the time it takes to train a new guy to do their job. Falls under that whole lean mistake, proofing thing process improvement that’s going to be a bigger issue as things move forward and in manufacturing here.
[00:06:31] Tom: For now you’ve seen some more sensors being applied a few robots, a little bit of pick and place, it depends on. Really, repetitive stuff, automotive, you see a little bit more of it than you do in say some defense companies that are making a, a few of these know that mass production thing comes into play.
[00:06:55] Mitch: We talked with someone who said that they had workers who were packing boxes with parts and these people were getting carpal tunnel. One hand, the hand they used to pack the box. So they go off and get it fixed and they come back and they would pack with the other hand and then they would get carpal tunnel in the other hand.
[00:07:12] Mitch: And then, it was very sad because it wasn’t the intention to have people injure themselves on the job. So the company looked into getting robots and then people were like, oh, replacing us with robots. But what they found is that they, the people needed to do other things to help the robots.
[00:07:29] Mitch: So nobody lost their jobs. No, they were, the robots were packing these boxes precisely, but they still need to unload the boxes. They need to load the machines, load the robots, monitor the robots, check the quality of the parts, and all sorts of stuff.
[00:07:44] Tom: So yeah, It’s a common misconception people look at automation and manufacturing and the flags go up that we’re going to be displacing workers.
[00:07:55] Tom: I’ve done a lot of automation in my career, again, from when things were starting to go up and okay, let’s take some PLCs and add some motors and ball screws to this manual machine and make it an automated machine to a certain standard, that kind of stuff. I haven’t to say that I have unsold more automation in my career than I’ve ever sold.
[00:08:14] Mitch: What do you mean by that?
[00:08:15] Tom: It, at the end of the day, going through the expense and there’s training and maintenance, and a lot of things come into play with automation that if it’s really not a good fit for that particular application, you don’t want to do it. And, early on everybody okay, that’s great.
[00:08:36] Tom: Now who’s going to program that robot it works great for this job, but now you want to do that job over there. How’s that going to happen? I worked with a Canadian outfit, they made jet skis okay. And we designed and installed a robotic line to pick up these, basically, we’re welding.
[00:08:56] Tom: It’s three bodies. So you pick up the parts and weld them together and get passed off to this other role, but it would do its thing so on and so forth. And then they said, oh, this is often we should do it on this other widget that we make. And so then they’re looking to invest millions at a time.
[00:09:12] Tom: Production line and, we sat down and it’s yeah, I don’t think so because you’re really only going to get, 30% improvement over what you’ve got. You’d be better off hiring two people and training them to do these other tasks, get some standard work in place and just clean up your act a little bit.
[00:09:30] Tom: There’s no sense in making this hardware investment when for much less money, you can get a couple of people and train them and have them be productive in other areas.
[00:09:40] Mitch: Can you speak a little bit more to that? That’s to me, that’s really interesting. Cause I think especially in the US maybe we have this fascination or obsession with technology and what’s new and shiny. And oh, that’s going to solve all my problems. When many times, in fact, your problems don’t come from a lack of technology.
[00:10:00] Tom: Yeah. Like everybody buys a new iPhone every year. Come on, it’s a phone I’ve been granted some other technology in there, but do you really need that, there’s that whole cutting edge/bleeding edge thing.
[00:10:11] Tom: And careful what you wish for it falls into that a little bit too, a lot of places. When I’ve seen automation that the thought is we need to drive down direct labor costs. And that’s a valid concern, especially as things are getting tighter, and are much more global in the manufacturing arena now.
[00:10:30] Tom: It’s a lot of competition. You got to reduce your costs where you can and where it makes sense. So you know, a lot of people embrace “let’s use technology, so we need fewer people and have to pay people less.” But basically, it lets. How do we read? Or directly ever contact and using sensors and things to help you become predictive with respect to maintenance or predictive as to when is this job really going to end. So I can schedule the next one, forgetting your throughput accelerated.
Those are all things, and they’re not really that difficult to do, but what people lose track of is the fact that the employees are the most valuable, flexible tool you can have in a Shop.
Mitch: Absolutely. And perfect.
The more knowledge they have, the better off you are. And granted with knowledge comes expense. You’re going to have to spend some money on some training. You’re going to have. So more money if you don’t want them going to the shop next door, but that is such a small investment compared to the cap X for robotic lines and automation that, might be good for these two jobs, but aren’t going to help you with the ones for two years down the line, when you have to change your whole mix because your customer base has moved.
[00:11:57] Mitch: The places I’ve seen where they’re like, oh, we need to add robots or we need to, make this a more fully automated with part counters or whatever, a better visual inspection. They still have not tapped deeply into the concept of Lean and fully implemented Visual Factory or things that could really help there.
[00:12:22] Tom: All right. When you look at it, you look at a manufacturer, benchmarking stuff. A world-class manufacturing company operates at about 80, 85. Maybe 87% of their optimum efficiency. World-class yep. Okay. So that’s a very small percentage of manufacturers, frankly, the majority of manufacturing companies, the reality is they operate somewhere between 50 and 60% of their optimal efficiencies.
And they’re operating at 50 or 60% because partly they’re really. Partly, they don’t really know any better. Partly they really haven’t had a chance to sit down and think about the process and, functionality and, what’s the best way to do something. And there’s a lot of, this is the way we always did it.
[00:13:17] Tom: There’s a lot of, these are, Monoliths these pieces of equipment, everything, almost everything runs through. We have to run everything through them and this is the way we’ve always done it. Yup. Yup. They don’t think in terms of maybe we can schedule better or maybe we can eliminate some operations in a process, your basic value stream mapping stopped doing what you don’t have to kind of stuff you don’t get rid of the waste.
[00:13:40] Tom: You look at wrap rates, maybe what you want to do. Spend a little more time and a process so that you don’t have to rework it and spend additional time and money on that or scrap it and have to start all over, and then you have like equipment uptight, a maintenance program you have in place, are you using sensors to tell you.
[00:14:00] Tom: When a tool’s getting dull so that you can change it before you start scrapping out parts, getting bad finishes, so on. Or, when do I need to change the oil in the compressor or, so on and so forth? This whole, I went, I’m sorry, the industrial internet of things thing.
[00:14:17] Tom: It’s cool. From a competitive advantage standpoint. It’s, using sensors and, some computers and, yeah. Okay. You got to have some knowledge about what you’re doing, but it’s not that hard to set up a system whereby you can start collecting real-time data in your manufacturing process, whatever it is, and be able to start looking at some trending and get a handle on how to better manage your internal resources.
[00:14:41] Tom: You can use that technology. And size companies to maybe jump out of that 60% and maybe crib up to 70 or 75% efficiencies. I’m using a whole lot of compressed air, like compressors running all the time.
[00:14:57] Tom: All of a sudden it breaks down. And now all my equipment that needs compressed air is offline until, three, four or five days till I get somebody in to fix the thing.
[00:15:04] Mitch: Huh. Then let’s talk a little bit about the limitations.
[00:15:09] Mitch: Steps or the hindrances that keep people from adopting technology, given that, if you can go from 50, 60% of your capacity up to 70%, and you’re getting that 10% back that’s a huge number of hours of productivity, for all the machines. And if this sensor, if the sensors and things can help you do that, what would be the.
[00:15:36] Mitch: Why don’t people just run out and go buy these things?
[00:15:39] Tom: There’s this, there’s a couple of things that are inhibiting technology in the manufacturing world. Big companies, the GMs, the UTC is the, what have you, is they’ve got the capital, they’ve got the money, they’ve got the resources, they can sit back and say, oh yeah, let’s try this.
[00:15:55] Tom: And it’s not a big deal, unfortunately, nationally we just talk about connection. Then, we’ve got about, call it 4,000 manufacturing companies in the state. Okay. And out of that 4,000, 80, 85% or probably have a hundred or fewer employees. Okay.
[00:16:18] Tom: And out of that group, I would say you’re probably looking at 70% of the manufacturers in the state are 65-70, something like that, probably in the 60, 50, 40 employee age range and lower. These are small, smaller mid-sized shops that are, they’re working for the primes. They’re making parts for Pratt.
[00:16:43] Tom: They’re making parts for GM or whoever, and they’re running and gunning and there they’re still here because these folks are smart enough and they have enough business sense to remain a little bit competitive. What they don’t really have is time to figure out how to do this internet of things, stuff nor the extra cash to do that, to do it.
[00:17:07] Tom: And so one of the big barriers in the capital followed quickly by, internal resources or resources, period. I can come in and say, okay, let’s look at critical systems. Here’s how we monitor those. Here’s where the monitoring is going to work, and here’s, what’s going to happen when you see this or that.
[00:17:29] Tom: There’s some effort to that and it can be a little bit, it can be a little bit daunting, especially if they’re not having a lot of luck on having huge margins, which most of them aren’t. So that’s certainly a piece of it. The capital part and the resource part are big.
[00:17:44] Tom: When you get into automation, you’re automatically talking about. You can’t put a robot in and have it on a production line with five or six other people working on that line without teaching them how it’s going to work, how it’s going to impact what they’re doing, what they have to be afraid of what they have to be careful of, all these kinds of good things.
[00:18:02] Tom: And then you got to have your maintenance people. Well, how do you fix this thing? I’d get the program this thing, and then somebody has gotta make fixturing you grippers for the robot. How do I pick this part up versus that part up, so on and so forth there are a lot of levels associated with automation, depending on what it is?
[00:18:21] Tom: You talking about automating and again this is all good and it’s necessary, but there’s still an awful lot. A company can do to get out of that 50, 60% efficiency without really buying much of anything. But again, that goes into training, right? So now you’re talking to apprenticeships, you’ve talked about funding bill there’s a lot to that.
[00:18:46] Tom: And of course, while your employees are training, they’re not working, so you’re not making money. And that’s why the vast majority of the small mid-sized companies, don’t do a whole lot about that. And it’s been a problem for decades and frankly, it’s all coming to a head not too far in the future.
[00:19:10] Mitch: Yep. I know. Here, we’ve heard stories of the larger top-tier companies pilfering skilled labor from the lower suppliers because they can’t find skilled labor on their own.
[00:19:23] Tom: Oh yeah. I have a client in Farmington. They’re a major supplier to Pratt hired off the head quality guy and a couple of engineers.
[00:19:31] Tom: And then the following month they came and yelled at him for not getting their parts on time. It’s the guys that did that you just bought. So what do I do? Yeah. I’ve got another client down in the shoreline is, two months ago he was out in Chicago looking to hire welders because he couldn’t find any welders because Electric Boat, I hired all as welders.
[00:19:47] Tom: Wow. And they were going to put him out of business. So he’s actually moving people from the Midwest out to Connecticut to work for him because he can’t find anybody local. Cause there really, hasn’t been much in the way of welder training in the state. So this whole training thing is huge.
[00:20:04] Tom: From when you look at the automation aspects of, moving to manufacture forward.
[00:20:11] Mitch: Yeah. It’s a big piece. And then the other part, I think that people are often concerned about is keeping things secret or safe cyber security, and can you talk a little bit about that?
[00:20:24] Tom: Oh, that’s another huge problem. And it’s going to get bigger as this IOT stuff starts growing. You’ve got some. Spread across the world when you went, okay, you got all your sensors going well, what are they running on them? Running on wifi, probably. They’re connected to the internet, probably.
You got all your machines on the internet. You’re transferring data between your customer and your design prototyping. Okay. I’ve got components I need to make, I send those by email, over to some rapid prototyping house. So he’s going to 3d print. The opportunity for somebody to come in and steal technology is considerably amplified with all of this.
[00:21:06] Tom: And then you hear these stories about the whole ransomware stuff. So you’ve got a, you’ve got a server you’re running your CAD systems, your ERP systems, your entire business lives on that server. And then somebody in the office puts a USB in. It goes to a website and all of a sudden you got your servers locked up and somebody wants a couple of hundred thousand bucks to release your data back to you.
[00:21:32] Tom: This does happen.
[00:21:33] Mitch: It’s not funny, but it’s that happens.
[00:21:35] Tom: Or your server crashes. At a client in Waterbury back over the winter, their server died. They thought they were backing everything up, but unfortunately, their backup wasn’t actually working. So they lost it. But. Yeah, it took him a couple of weeks to get things back online. It was a huge impact on our operations.
[00:22:00] Mitch: Yeah. That’s it’s, you gotta be as careful as you can be and you should probably have a dedicated person being careful with you teaching everybody else. How to be careful, because what I’ve read statistically, is that the biggest threats are people, either opening emails, they shouldn’t.
[00:22:18] Mitch: Or a disgruntled employee, bringing something in and sticking it in through a USB port,
[00:22:24] Tom: oh yeah. That can, that can happen. And frankly, that doesn’t necessarily just happen in the cyber world. And so some years back, I had a client where a disgruntled employee poured a bunch of oil down the drain, and then he called the DEP and this poor company was not a huge company and they were forced to pay an unbelievable amount of money to cover the cost of digging up floors, digging up soil and remediating all of that. There are all kinds of terrorism, I guess it could hit, but certainly, the IIoThings opens the door to the cyber problem to some more, and you mentioned earlier, you should have somebody there.
[00:23:05] Tom: That again, small midsize companies, they can’t afford this. You’re not going to hire a $20,000 IT guy who’s 15 years old, you’re going to hire a professional that can deal with it. You’re talking, probably $80 – $120,000 a year, payroll, for an onsite person.
[00:23:25] Tom: Absolutely. Okay. So now you hire consultants to come in, which is what everybody does, they’re still charging, a couple of hundred bucks an hour, and it’s an expense that, might not really fit into Small – midsize companies, budget or worse, they come in and they spend $20,000 on a study and stuff.
[00:23:41] Tom: Exactly what they have to do and how to do it. And that’ll save you. And all you need is a three-quarters of a million dollars to buy all this equipment and put it in. And they look at the guy and he said, geez, I’m glad to give you $20k, and the thing goes on the shelf and they don’t do anything.
[00:23:58] Mitch: That’s a perennial problem. I think we’re pretty much near the end. We touched on the worker part of this automation thing, and, that is going to be a huge issue.
[00:24:15] Tom: And frankly, it’s not something that the manufacturing community is really going to be to solve on its own. In Connecticut, we’re looking at right now there are about 12,000 unfilled manufacturing jobs.
[00:24:31] Tom: Yeah. And so we’ve got a critical need for people in manufacturing and manufacturing-related fields. We don’t have enough engineers. We don’t have enough tradespeople, frankly, a lot of work that I’ve been doing the last few years, it’s been with midsize companies, people at a hundred employees or so they’ve closely-held all the money’s in the business.
[00:24:55] Tom: The owner wants to buy a trawler and moved to Poland, no junior assistants, aren’t really equipped, or don’t want to run the business. They’ve got a hundred employees that are family. Yep. Often multi-generation yep. Employees and all the money’s in the business. What did he do? And so they got to get their money out and then they take a look.
[00:25:19] Tom: And Ernie the toolmaker is 72 and Burt, the setup guy for the fore-slides. Granted people are still using four slides, he’s in his late 60s. And so all of the critical highly skilled people, critical high skilled people that they need that are crucial to the operation of the business are going to be gone in five years or so.
[00:25:40] Tom: So they’re trying to figure it out. And they polish that apple up and let somebody else deal with that problem. So that’s a significant thing and what really needs to happen is more on the legislative side, more funding needs to be put into schools for training, trade schools, and industrial arts.
[00:25:57] Tom: We’ve seen, I won’t use the word resurgence, but we’ve seen a number of, trade schools coming back online. And they’re putting out students that can be built on potential employees, but, still, the numbers are just very low. So that’s something that really needs to accelerate.
[00:26:15] Tom: But again that’s, manufacturers obviously have been supportive of that forever and ever, but it’s really more of a budgeting legislative thing. That’s gonna be the key factor one, are we going to have employees to work in the factories, and two, are they going to be able to afford to implement new technologies to make them competitive on a world scale? Interesting.
[00:26:38] Mitch: All right. Anything else?
[00:26:41] Tom: No, I think that probably covers enough. I think we probably bored your listeners to tears.
[00:26:47] Mitch: I doubt that. We’ve covered a lot of ground, really good stuff. Thank you so much for being my guest.
[00:26:53] Mitch: And we’re going to, for all listeners, we’re going to put the show notes in on the page for the website, download and also links to anything that we’ve mentioned in the podcast that will take you to other fabulous places, including Profit Miners. Thank you for listening and tune in again next week.