[00:00:00] Speaker A: We can look at things and maybe we'll see risk where our customers didn't see the risk, or we might see rewards where. Where the customer didn't see the rewards.
[00:00:16] Speaker B: Hello, everyone, and welcome to the Robot Industry Podcast. And thank you for listening and thank you for subscribing. I'm Jim Beretta and I'm your host. And today's episode is with an old friend, Bruce Poulsen, who I've actually worked with at ATS and at Erhardt and have known for, gosh, a big number, I think. Bruce?
[00:00:33] Speaker A: Yes, it's been a long time.
[00:00:35] Speaker B: Welcome to the podcast. And this is. This podcast is kind of a little bit about how to buy a factory automation systems. Bruce, maybe you could tell us a little bit about your background.
[00:00:46] Speaker A: Yeah, well, I've been in automation for about 30 years. I started as a.
A regular engineer, manufacturing engineer, or process engineer, if you will. Did a lot of stamping and welding and traditional manufacturing type of processes. But I was a consumer of automation through those years. And then at one point I kind of evolved into, you know, working for automation companies.
First started out as an applications engineer and then evolved eventually into business development, which is where I've been now the last 15 years.
[00:01:22] Speaker B: And you've worked for some conveyance companies and done some really cool products and processes with them as well?
[00:01:28] Speaker A: Yeah, yeah. I was kind of a motion guy when I was focused on automation, and that motion ended up being applying well to linear motors and linear motor transport system, conveyor types. It was able to be part of a startup that was a lot of fun that was related to that technology.
[00:01:49] Speaker B: You know, you also learn a lot, which is a lot of fun. And I don't know if you know this, but I was actually an applications engineer at one time too, for a couple of years.
So now you're working for Earhart Automation, who's a client of mine and somebody I know real well. And can you tell us a little bit about Earhart?
[00:02:04] Speaker A: Yeah, Earhart's been in business for a long time, since 1930s, and we were a tool and die shop. And eventually we kind of started doing some automation around the tooling and die, so, you know, transfer presses and, and some bending and eventually the coil feeding and so forth. And then our customers started to ask us to do more and more. Some downstream assembly, you know, joining processes, welding and brazing and some assembly. And then at one point we kind of said, gosh, let's. About six years ago, we said, let's just change our focus from tool and die that does the automation on the side to primarily an automation company. And so that's when I got involved the president of the company who I've known for a long time said hey, this is kind of a new startup within an existing company, let's get this rolling. And so I bid on that and we've been doing that since.
[00:02:58] Speaker B: Oh, that's great. And Earhart, which was Earhart tool and machine or something similar to that, they're like 80 years old, right? Wow, that's crazy.
[00:03:06] Speaker A: Yeah, 1937 if I remember right was the start date. So whatever that meant. 30 turns out to be. But that's a lot of, that's a, that's a lot of years. You have 88 years. 87.
[00:03:16] Speaker B: Wow, that's, that's exciting. So Bruce, how do you prepare as a manufacturer? If you're going to buy an automation system, what are some of those steps?
[00:03:24] Speaker A: First thing you want to look at is the process, you know, see if you can figure out what you think your, your low risk, high reward or your, your low hanging fruit is something that maybe has a lot of labor involved.
That, that seems like a very simple motion. Now a lot of companies might think this is obvious, but it isn't always obvious to everyone. That's where sometimes the automation supplier can really help out. We can look at things and maybe we'll see risk where our customers didn't see the risk or we might see rewards where the customer didn't see the rewards. Then we often will look at what could be the potential would be an alternative process. Right.
So there's your process and maybe just instead of automating that process, you know, maybe you're welding, but, but could you be laser welding? Right. Which is no consumables and it's always very simple. You know, they're, you're cutting something, but maybe a chipless cutter is going to eliminate another process down the line, a cleaning process or something like that. So and then those, those folks will say hey, will this, will these changes work? These process changes work. And then you know, some experienced guys like, like us that have seen a lot of different things, we'll be able to say well yeah, we implemented something similar already. Right. But then this is the people, you need people to prepare those efforts, right? You know, somebody technical, somebody that can manage projects. However, a lot of times the most successful people on our customers ends are those people that have a real partnership approach. Right. Your automation supplier can be your best, most important supplier, really able to save you more money and improve your operations. Maybe more than anybody else.
[00:05:12] Speaker B: Some good points there.
Thank you for that. One of the things too that I wanted to emphasize with you is like when you do look for a project like let's say you're touring a factory, you don't pick the crazy hardest projects, right?
[00:05:26] Speaker A: No, no, you want to start off with something that's going to be successful for sure. Right. The lowest pieces. So, so we get involved sometimes in some, some high risk stuff just because we're engineers and somebody says oh, can this be done? And we say oh yeah, I want to look at trying to do that. Right. But, but those are, those are not the bread and butter projects. Right. So the simple ones are usually the ones that are going to be a slam dunk for being successful.
[00:05:57] Speaker B: So how do they, they being the customer, how do they set up a budget say for an automation project?
[00:06:03] Speaker A: Yeah, yeah. You know, their discussion is going to revolve around ROI or return on investment.
And automation of course can be investment, it can be a sizable one, but it can be a very sizable return too. And what they're doing is essentially looking at trading operations expenses or OPEX for capital expenditures. Capex and that can be a struggle for some organizations to kind of get their head around that. They have the financial models are all built around opex. Right. And they'll ratchet the employment up or down depending on the, maybe the load and so forth. And they're really used to seeing that as a, as a management tool, a risk management tool.
However, they sometimes don't always understand the cost of their labor. There's a lot of soft cost. You know, example could be a physically demanding job where they'd have lots of turnover. Maybe there's some, you know, medical costs, but there's always onboarding costs and training costs for new people. Those fully burdened cost with all the overhead, that's harder to understand, but it's worth the effort. Then once you understand your cost savings, the next step, or really not necessarily your savings but the cost of your project, the, your current cost, the next step is to determine your payback period. So that's going to be a function of your, your ROI goals. You know, some of the OPEX thinking people often think in terms of maybe as short as a one year payback. Oh, you know, my, I understand my fully burdened cost for an operator is $100,000. So I want, I got $100,000 automation budget. Automation can contribute value for many, many years often. And so if you limit yourself to one year payback, you're going to miss out a lot of opportunities to save a lot of long term cost.
So I have some customers, a lot of customers will use around a three year payback. I have some customers that use five years, five year payback. Right. So they're really committed to, to I guess automation, to reducing their costs the long term. And that's great, those long term outlook can be great. But then after you've figured out your, your payback period and you, you figured out what your, your cost is per FTE or full time equivalent, then the equation becomes real simple. So if you have that 100,000 per FTE in, in three years, that's $300,000 FTE for looking at a system. So if, if you, if you have a system that can reduce one FTE of shift, so that equates to a budget of around 900,000 or we'll say between 750 and a million dollars if there's a low overtime in there or something. And that can be a good starting point. With a budget like that.
There's a lot you can do.
[00:09:03] Speaker B: When we do talk about risk and we talk about risk a lot of course, and both engineers and on the manufacturing side, so some of the things that you can do to say take a risky project is to do another project like engineering study or a proof of concept study. Is that something that you guys do as well?
[00:09:21] Speaker A: Often we'll do an engineering start on a project and we'll do perhaps a proof of principle phase, you know, that helps us both balance the risk. Right. So, so the, the customer especially sometimes if those new processes or process changes will really require that. And, and, and so we can say, well here's, here's our budgetary cost of what we think this system will do. But let's have a proof of principle phase where we do these things and we'll maybe test out some products, some fixtures, the process, make sure some of our assumptions are actually true. And then at the end of that phase we can probably provide a more accurate bid. Our bid might go down. In fact it probably goes down as much as it goes up. Right. Cause we've capped our risk too. So we say, okay, now here's a firm quote for this process and we all know exactly what it is, what it's going to look like, what the quality change is going to be. And that's going to help them justify it on their end too. They're going to know, hey yeah, we got a sense of what the quality looks like, what the yield looks like and all of those things. So that's a great way to manage risk.
[00:10:31] Speaker B: So I guess one of the things that you have, Bruce, is usually you have a specification document that a manufacturer will bring to an automator. But what happens if you don't have a spec document?
[00:10:43] Speaker A: Yeah, we love it when they do detailed specification and so forth. There's industries like the automotive industry that always have a very, very detailed specification. That's a rare thing for most projects. Right. And it's also rare if it stays the same and doesn't change throughout the project as well.
So yeah, what we like to do is meet with that customer very early on, maybe before they don't have a specification document and have some conversations around the process. I looked at a process last week where this customer, he actually didn't like his process and we walked the lines and he was a lot of stamping and I said well we could, or it was some stamping and roll forming. And I said, well we can eliminate a bunch of this roll forming that you don't like and use wing benders, which is something that Earhart uses quite a bit. And instead of the roll forming and now they just love and so forth. So we have some conversations early on and then that can kind of drive the document. But we still do like to have some kind of document toward the front of this that everybody's working off of. Now if nothing else, Earhart, we can provide sort of a fill in the blanks specification document so we have something we could send our customers and they just fill in the blanks and send it back and then that can be our specification as well. Now some automation companies will offer to just write the whole specification document for you, a very formal document and that's probably a little more common in highly regulated industries. Right. Medical people need to have a document up front and, and, and so yeah, we do that and sometimes, you know, other automation suppliers can do that as well.
But I guess I'm saying either way, don't let the lack of a formal specification hold you back from the process.
Go ahead and get started.
[00:12:48] Speaker B: And one of the other things that I'm a bit of a stickler about is also getting a non disclosure agreement signed up because that's kind of a, it allows you to have a more freedom of sharing with your prospect.
[00:12:59] Speaker A: Yeah, yeah, we like to do mutual ones because we do bring things to the party and we're going to eventually be providing a specification hopefully with some novel ideas and solutions. And so yeah, we need to protect the IP both ways and it's one of the things talks about both in the throughout the bid process, but you can talk about that throughout the execution of the project as well. You know, do all the employees have non disclosure agreement signed with the company?
You know, do you do in your it, do you have network locations folders and stuff that are restricted access and so forth? So there's a lot of folders in the Earhart server that I can't look at and that's fine, I have no need to look at them. I'm usually lost when I get that error message. Right. But companies just need to be up to date and all those solid practices.
[00:13:59] Speaker B: Bruce, what are some of the key elements in the type of automation company that me as a manufacturer I want to engage with?
[00:14:05] Speaker A: Yeah. You're going to want to look at the capabilities of the people you're going to do with. Do they have experience in your industry and your automation processes?
We've been talking about medical and automotive.
A lot of guys special in medical device, you don't want to give them your automotive project. Right.
And so forth.
So I say it's hard to know just by looking at their website where what they've really done before and seen before.
We're maybe a medium sized company here at Earhart, but we have done a wide variety of things and we don't capture them all on our website.
In fact, I'm still learning some of the institutional knowledge that we have on some of the processes and industries. I was like, oh, I never knew we did that before.
What I'd say you can do there is, you know, don't be afraid, reach out. If you're going on that website, just reach out on that contact form and have somebody call you and talk to you a little bit and be able to evaluate them.
Other things people look at, you know, size of the integrator. Do you want a large integrator or a small integrator? Sometimes that depends on your project. Some of the larger integrators only want to work on $10 million plus projects. Right.
You know, others, you know, 10 million would be for us, a large project. Right. We do projects from 300,000 to maybe 6 or 7 million or something like that. Right.
So where you think that size of that project, another thing is proximity to where you are. Some people, especially newer folks to automation really like the idea of having an integrator that's close by. So if they have a tool down situation, those guys can get out there fast and help them. Especially if maybe their internal team isn't as strong, right. Then they're going to want to have that kind of assurance. But you can also ask about remote support as well. You know, even some of our closer customers, we still set them up with remote support so that when they have a problem, we can look at it and tell them, hey, you know, it's this sensor here or what have you that needs to be reset. And we can maybe get them going on the phone or even just add a recipe for a new part number or something like this. Right. We can just do that remotely. So I'll say the proximity is a little less of a factor. But then I think maybe the most important thing could be the culture. How do you feel with these guys? Do they feel like they're customer focused when you talk to them? Do they feel like they speak your language, they know the lingo of your industry and so forth?
And, and then, you know, are they folks that generally have a reputation to standing by their work and that kind of thing?
[00:17:05] Speaker B: So how about third party suppliers like robot companies? Can they help?
[00:17:11] Speaker A: Oh, yeah, you know, they typically, they want the business. They want the business for both the integrator and the end user. And so robot companies offer a training program or something like that to help that. You know, we're going to work with the robot company to size the robot, right? So make sure it has the reach and the payload capacity and those types of things. The same can be true for, for people that do process tools. You know, are, is it an adhesive? Are you, is it a tube bender? You know, we get connections from, from those types of people as well, right? Somebody has a welder they really like and they'll go ask the company, hey, who has integrated your welder into an automation system successfully? And those guys will say, yeah, you should go call, you know, xx or whatever. Call the guys at Earhart. They just did one, you know, last year with the same model and, and so forth. So those guys can be really helpful as well. And then, you know, another third type of third party is your distributor. So the distributors, especially, you know, sometimes distributors, they have a territory thing, right? So, so if the end users in one territor, the integrators in another territory, it can make their thing a little complicated. But they're going to have, you know, some help, be able to guide them as far as what types of products, you know, PLCs or what have you that they can get very quickly if you ever have a problem and those types of things. So, you know, and eventually then the end user, you know, has this tool you'll talk to this robot company has this distributor and what they, what they end up doing is some often making what they call a preferred equipment list. They say, hey, here, Mr. Integrator, here's this list. These are the people we like working with and are they people you can work with too? And, and, and then that course has all kinds of advantages to them, commonality components and their training on their end. And yeah, eventually you get there.
[00:19:11] Speaker B: It's pretty funny, Bruce, how small an industry this is. Right? You know, like, and you're, you're located like Earhart Automation is in Granite City, which is in the south of Illinois. You're up in Minneapolis area, are you?
[00:19:25] Speaker A: Yeah, yeah. The locations aren't as critical anymore. Obviously. I spent a lot of time going out and visiting customers and so I don't need to be at the office every day. Obviously there are some functions that do and those guys are there. But yeah, our applications and sales guys are scattered around and that helps us too.
[00:19:46] Speaker B: Yeah, it helps you be responsive. Right. If you can jump on a plane tomorrow, what are some of the questions that a prospective manufacturing customer might ask a supplier?
[00:19:55] Speaker A: First questions you'd ask are the ones we already been talking about, you know, the capabilities, the industries you serve, the regulatory certifications and things. But yeah, then you start to ask about drawing formats and you know, what kind of manuals you're going to get. We already talked a little bit about IP ownership. You know, make sure those things are covered.
Ask about the company ownership. Right. Are they someone financially stable?
Is there commercial risk?
Things have been pretty good the last number of years. But in the history of our industry there's been some financial mess, minefields people have had to walk through here.
And then one of the things I get asked sometimes is about the size of our install base, which for us is actually surprisingly large because we've been at it a long time, even though we're like, well, we're a new automation company, six years or whatever, but we're not a new automation company. We got a good size install base, right. So that's another thing to talk to somebody, make sure you get your head around. Right.
And then we talked a little bit about confidentiality already.
So make sure you're on the same page with all that.
But yeah, mostly whatever is important to your industry, your company or your project, you know, what's important to the customer is don't be afraid to ask any of that.
[00:21:26] Speaker B: Thanks for that, Bruce. Now what if you're a new user of automation that Kind of changes the rules a little bit, right?
[00:21:32] Speaker A: Yeah. If you don't know where to start. You know, I guess I talked a little bit about talking with that process, that process tool supplier. Right. So that's one place to start and, and see if they already have a recommendation for an automation company they've worked with. But yeah, after you get some of that in line, I guess some things you should plan around is, is make sure you have some internal capability, right? You're, you're gonna, whatever your automation is, at some point you're gonna need to do some troubleshooting, maybe make some simple changes, at least do some maintenance. And, and you know, as I'm saying, maybe you want to work with somebody more local for that first project and definitely have that remote thing, remote support, you know, set up, which might be a challenge for your IT people because some of the IT people, there's a number of technologies of ways to, to keep everybody secure. So, so that's just worth a longer discussion. Even if, even if you as an automation engineer for the end user, your IT people body slam you initially, go ahead and set up that conversation anyway. Maybe we'll be able to make them feel more comfortable. But important thing is to keep in mind the spare parts you're going to want to keep up and going. So I talked about that preferred equipment list, your distributors and so forth. What's going to be available on a short order from, from, from those guys, from those, you know, OEM robot guys or distributors. And what's kind of unique to your project that you'll just want to have some spares on hand and they'll probably be quite a few from, from the integrator. You know, there's a lot of custom pieces on everything we do and so get that, get that full complement of spares so you get them ordered and on hand and, and then you're ready for whatever comes your way.
[00:23:30] Speaker B: No, that's great. Some really interesting things and I think I'm reading into this little about when you're new to automation, about getting some champions and making sure and working with your integrator to make sure they kind of help you make sure that your champion knows kind of what he or she needs to know.
[00:23:48] Speaker A: Absolutely, absolutely. Yeah.
There's always a key guy on each end that sort of. Well, on my end too, it's the same way. So I say I'm selling Earhart services to our customer, but sometimes I'm selling our customer to Earhart. Is this customer really going to be a good fit for Us and will the project be successful and all of it. And that champion on that end has to be the same way.
He's got to sell the automation company to internally to his team as well as provide us all the information we need to make sure we're giving them the right solution.
[00:24:33] Speaker B: Bruce, the other thing that I wanted to mention to you, and you probably agree with this, but having a really good project manager on both sides, both on the customer side and on the Earhart side, is really, really important. Would you agree?
[00:24:45] Speaker A: Especially after the project launches, it's a single point of contact, kind of from system.
There's been a lot of times where if we haven't had that, then whoever calls us from the customer last, that's the change we start making in marching to. And then somebody else calls us, what did you do that for? Right. Why are you doing that?
And so forth.
So you really need that. And then the benefit for the end user on our end is they'll get that Gantt chart, they'll get that, the whole schedule laid out, those risk identified, the schedule risk specifically and, and then get those updates all the time so he doesn't find out, you know, two weeks before he's expecting to ship, that it's two months late. Right. You know, he knows right away and the whole bit and why. Right. Maybe, maybe we had a supplier that had a hiccup or, or you know, a product changed and it turned out to be a bigger change than everyone thought or, or, you know, who knows? But anyway, everybody knows why things are there, there's no surprises and that kind of thing.
[00:25:49] Speaker B: Yes, that's that good communication part of project management for sure. Hey, Bruce, did we miss anything in our conversation so far?
[00:25:57] Speaker A: Yeah. You know, the one thing I'd like to, I guess, encourage everybody to do is to get multiple bids on their project and not just. And you know, I guess that's kind of intuitive for people. But then don't just go with the lowest cost.
So oftentimes the finance guy at the end user, he's going to really like that idea. He's going to see that go, oh yeah, I like this whole thing.
But if you're that champion over there, don't let that guy drive the whole process. Right.
Have a decision matrix, here's the cost, but here's also other features which you think is going to do floor space and delivery and yield and risks and lay all those things out and then look for value.
My company, we're very seldom, we'd like to do top quality work and we're very seldom then the lowest bidder but we're often, we believe anyway and a lot of our customers do as well. We believe we bring a lot of extra value that's really worth a couple extra dollars to the solution.
Just. I know. So I've seen so many people Jim, with they buy that low price thing and then they have a bad experience and then they end up running away from automation for a few more years until they go back and take another look at it or whatever. So and then that's the, I guess maybe the final thing I'd leave somebody with is look for that then partner that's well a company that's really interested in being a partner with you. Right.
So they're going to stand by it, they're going to make sure it's, it's, is it works into the end. Even though if there's some, some gotchas or whatever they're, they're going to, they're going to really stick with you. And in the end having that partner that's, that's, you know, more than just a supplier is worth it really. Every penny that you're going to pay for it.
[00:28:01] Speaker B: I totally agree with you. And I also think too that when you're ramping up an automation system, if you go with a better integrator or machine builder that will pay you back in like weeks. The difference between a high bid and a medium bid.
[00:28:13] Speaker A: Right.
[00:28:13] Speaker B: Or a low bid, the joy of.
[00:28:15] Speaker A: The money saved is short lived compared to the long term payback of a good system. Right?
[00:28:24] Speaker B: Absolutely.
[00:28:25] Speaker A: And yeah, so two years from now you're not going to remember that you pay $50,000 less for that system.
But you're going to really hurt.
You feel the pain if it's not nearly as good. Right. For a long time.
[00:28:42] Speaker B: I'll put that quote in the show notes. Hey Bruce, if someone wants to find out more about how they can put automation in their facility, how can they get ahold of you?
[00:28:50] Speaker A: Yeah, well My number is 952-290-3384 and I love talking on the phone and chatting customers.
Yeah. If you're more comfortable. And email bpolson B P O L S o
[email protected] as e h r H A R D T A U M A T I O n dot com.
[00:29:11] Speaker B: Thanks for that Bruce and thank you for your time today. And when you're not helping people get into automation that they need, what do you like to do?
[00:29:17] Speaker A: Yeah, well I live in Minnesota with, with My bride many years, she, she had to get something. She's helping one of our kids with their taxes today. But yeah, and we have four kids that I consider fully launched in life themselves. So as you can see behind me, I got all these spools, all this filament for my 3D printers here. I'm big into 3D printing and I've kind of combined my love for design, my background and process and motion to do this 3D printing. And with my family, we kind of have a side hustle of a gaming company.
And so our gaming company is called Four Hearts and we make lots of unique gaming accessories that I print. And then this summer we're launching our first, our first full board game that we've conceived from the beginning. So we're pretty excited about that. It's called Beast in Show Play. Testing that thing since COVID Dave.
[00:30:21] Speaker B: Oh, that's great. And so Four Hearts is F O U R. And then the word hearts games. And I'll check that out too after we, after we sign off today.
[00:30:29] Speaker A: Yeah, and the hearts is H A R T S. It's the Nordic deer. Not. Not your heart and your chest.
[00:30:37] Speaker B: Thank you for that clarification.
Yes, our sponsor for this episode is, in fact Earhart Automation Systems. Earhart builds and commissions turnkey solutions for their worldwide clients. With over 80 years of precision manufacturing, they understand the complex world of robotics, automated manufacturing and project management, delivering world class custom automation on time and on budget. Contact one of their sales engineers to see what Earhart can build for you. And their General email is infoerheartautomation.com and Earhart is tricky to spell. It's E H RH ARDT. I'd like to acknowledge a three the association for Advancing Automation. They are the leading trade association for robotics, vision and imaging, motion control and motors, and the industrial artificial intelligence technologies. You can find
[email protected] and if you'd like to get in touch with us at the Robot Industry podcast, you can find me Jim Beretta on LinkedIn. Today's podcast was produced by Customer Attraction Industrial Marketing. And I'd like to thank my team, Chris Gray for music, Jeffrey Bremner for audio production, my business partner Janet, and our sponsor, Earhart Automation Systems.
