Part 2 of my conversation with Jason Blessing
Jason, there are three myths that I have seen in the last year, which I call toxic, because they dampen the national mood. One is the myth that automation is leading to all kinds of jobless futures. The second is the middle class is dead. Then the third one is something you personally confront quite a bit, Jason, which is this myth that the US doesn't have any manufacturing. I don't know where those three myths have taken hold, but you hear it so often, it just want to pull your hair out.
I agree. I think about certain geographic regions of the U.S. Obviously the Midwest, a little bit of the Northeast, the Carolinas, Tennessee, Texas, the Pacific Northwest. All of those geographic areas are anchored by very robust manufacturing economies that are building everything from cars to planes to appliances, and those are American workers that are building them, and building those products, and have a great standard of living as a result of it.
Talk a little bit about some of the more impressive factories you've been to recently . You travel quite a bit to your customers.
I think for me the crown jewel of any factory that I've been to is the Caterpillar chain of facilities that are down in Seguin, Texas. They are another Plex customer, and I think what stands out to me there is the incredible amount of automation that's used to drive customer loyalty as well as product quality. To be a little more specific about that, every single engine that's built in this plant is made to order, and it is made to a very rigid specification for that customer. That customer could be Caterpillar. It could be an engine that's going into a big dump truck that's going to get shipped off to a mine somewhere, or it could be the New York Fire Department, and it could be a replacement powerplant going into one of their fire engines The level of customization is incredible, down to the exact color of the engine block, and how it's going to be painted, the components on the engine that factor into performance requirements.
There are 24,000 different configurations. The line is about a mile long, and it starts with just an engine block, and as it goes through 15-20 different work stations, every single employee has technology around them that informs them of what products or which parts to install on this engine, based on the spec. Again, fulfilling that value proposition at Caterpillar, they’ll build your engine any way you want.
The other thing that is, I think, very impressive in this particular case is the focus on quality. Whether an engine is going into a tank that's going to end up on a battlefield, a fire engine that's going to be a first responder in an emergency, or a dump truck that's going to be in a remote mine in the middle of nowhere, they just have have to work. These engines just have to be able to thrive in difficult environments.
So at Caterpillar one of the ways that they deliver that focus on quality is almost every single tool that's used to install a part on a machine, the settings on it, and the measurements to make sure it's installed properly, are all automated, and plugged into the Plex backbone. All of the different measurements and tolerances to make sure that the engine was fitted and built properly is all measured and recorded, so at the end of the line, after almost a mile of workers working on these engines, they know two things. First, they know the specific engine is built exactly to the specification of that customer, and second, they know it's going to be high quality because they tracked every tool, part and operation on the line.
I think, again, Caterpillar's just that great mix of technology coming together to fulfill a customer value proposition and drive better quality.
The other one that also stands out to me is Accuride. Their CIO, Paul Wright, has done a great job using technology to drive increased automation that's allowed them to reduce their customer response time significantly. I think when they started, pre-Plex, it would take them roughly 15-20 days to fulfill an order. Now they're down closer to 10 days, with a goal of getting to mid to high single digits.
That's important for two reasons. It means their customer can carry less inventory because they can get a just-in-time order. For Accuride, their biggest expense is actually steel coils, so they can get much more nimble in the amount of inventory they're carrying. They've been able to drive a lot of value for their customers, and for their business, by optimizing supply and demand.
An ancillary benefit of these improvements is that Accuride has opened up tens of thousands of square feet in their factory, where they used to just store finished product and steel coils. That space is now open and available to them to put new lines in, staff them with new employees, and get into new product lines So they're just far more efficient in their use of the square footage and the equipment in their factory through use of a better technology and automation.
Accuride has now been recognized on multiple occasions by the Association for Manufacturing Excellence for their implementation of lean systems and practices. They’re a great example of both business achievement and U.S. manufacturing leadership.
Those are the two that really stick out for me. I also like to visit our candy manufacturers and our beer bottling lines. Those are always fun. Probably a little more because of the products they produce, but it is amazing to stand on the plant floor of some of these big industrial operations, witnessing how they're using technology, and how sophisticated the workers and the manufacturing process are.