Jason Zenger: Jim, don't you have online chat for Carr Machine & Tool?
Jim Carr: As a matter of fact, we do. John just mentioned to me the other day that somebody was chatting with him online. I'm like, "Great." That's all millennials want to do, right?
Jason Zenger: Yeah, and that's why Xometry has it as well.
Jim Carr: I know. It's fantastic. You can just go right to the thing. If you have a question, just go right to the chat box, type in your question, and they can answer it for you right away.
Jason Zenger: Yeah, there's a little box that says help with a bubble. Type your questions in there and away you go. Go to xometry.com X-O-M-E-T-R-Y.com.
Jim Carr: Welcome to MakingChips. We believe that manufacturing is challenging, but if you are connected to a community of leaders, you can elevate your skills, solve your problems, and grow your business. I'm your host, Jim Carr, and I'm joined by my co-host, Jason Zenger, in our northwest suburban studio today. How you doing buddy?
Jason Zenger: I'm doing great. How are you?
Jim Carr: I'm in a good mood. It's a beautiful day in Chicago.
Jason Zenger: Yes, it is.
Jim Carr: Windows are open. I was just saying to our guest, 10 days ago we had six inches of snow and now it's 73 degrees and it's beautiful out.
Jason Zenger: Absolutely. I missed that.
Jim Carr: I know.
Jason Zenger: I was out in California when you had that snow.
Jim Carr: You didn't miss the fun, but-
Jason Zenger: I was opening up Zenger's West.
Jim Carr: You were?
Jason Zenger: Yeah.
Jim Carr: What a coincidence. We'll have to talk about that some time.
Jason Zenger: Okay.
Jim Carr: But anyway, Jason, automation, it's everywhere, man. Just a week and a half ago, I think it was two weeks ago, I took my entire team at Carr Machine to McCormick Place and we walked the floor of automate. Oh my God. I had no idea. It's a completely different kind of automation process-
Jason Zenger: Well, automation's a very general term.
Jim Carr: It's a very general term.
Jason Zenger: We've sold some universal robots, universal robotics that are collaborative robots.
Jim Carr: They were there. They were there.
Jason Zenger: They were there. They had a big booth there, but then there's other ways to automate. You can automate your processes through your ERP system.
Jim Carr: Absolutely, and that's what we're going to talk about today, right?
Jason Zenger: I mean, one of the things that you need to make sure you are doing in business is being as efficient as possible, and automation is one way to do things. First thing you want to do is kill something, eliminate it if it's not adding value.
Jim Carr: Kill the customer. Somebody told us that one time.
Jason Zenger: Well, I wasn't thinking about that. Yeah, we have discussed that before, but automate would definitely come right behind eliminating something.
Jim Carr: It's a big buzzword nowadays and I know a lot of people are doing it, and it means different things to different people. But I think today we're going to talk about automating your business, your company, your manufacturing company, through utilizing and implementing a really robust, full-spectrum ERP system.
Jason Zenger: Absolutely.
Jim Carr: Before we introduce our guest, and he is a repeat guest I might add, he's a pretty sharp guy, Jason, what's new at Zenger's or more importantly, Jason, what's keeping you awake at night? I know you sleep well. I don't. I'm just a couple years older, and when you get older, man, those nights get more and more restless.
Jason Zenger: Well, I mean I've implemented a lot of processes into my nightly routine, that allow me to sleep better at nighttime, and I've tried to talk to you about some of those.
Jim Carr: I think I know what you're going to tell me. You're taking sleeping pills, right?
Jason Zenger: No, I'm not taking sleeping pills. One of those-
Jim Carr: You're drinking a bottle of wine a night.
Jason Zenger: No, I'm not. Actually, when I drink wine, and typically alcohol gets you to bed quickly, but it doesn't necessarily keep you asleep, so-
Jim Carr: Yes, I know that.
Jason Zenger: ... I've tried to implement a lot of things into my nightly process so that I can fall asleep and stay asleep, so like go to bed at the same time, not drink alcohol.
Jim Carr: Okay. What a buzzkill.
Jason Zenger: Yeah, sorry. That's what I'm here for, buddy. Eliminating a screen from your face at least an hour before you get into bed.
Jim Carr: Don't tell me you can do that.
Jason Zenger: I can, at times.
Jim Carr: At times.
Jason Zenger: I'm saying it's a process. I'm not saying I follow it every night. Usually the reason that I don't is simply because my wife wants to watch a show together or something like that. I'm just being honest, and-
Jim Carr: You watch TV in bed?
Jason Zenger: No, we only have one TV. We have one TV in our basement and that's it. There's a couple other things that I do that make sure that I can get a full night's rest. Get my kids to bed early. You know what I mean? There's a lot of things.
Jim Carr: What you're saying is a consistent routine?
Jason Zenger: A consistent routine, yeah. I try to automate that in my mind as much as I possibly can. I don't eat a lot at nighttime.
Jim Carr: No?
Jason Zenger: Got to cut down on the sugar. There's a lot of different things there.
Jim Carr: Got you.
Jason Zenger: Read right before I go to bed.
Jim Carr: That's admirable. That's very admirable.
Jason Zenger: Yeah, I know. For you it's wine, sleeping pills-
Jim Carr: I don't take sleeping pills anymore. Do you do that thing-
Jason Zenger: He sounds like a rockstar. How do you get to bed at night, Jim Carr? Wine, sleeping pills-
Jim Carr: Well, I am a recording artist, just so you know. I always wanted to be a rockstar, as you can tell.
Nick Goellner: Do you guys use the feature on your phone where you can like turn off the blue light? You know what I'm talking about?
Jim Carr: No. What do you mean?
Jason Zenger: Well, you shouldn't have your phone in bed with you, I know Jim does that, sometimes.
Jim Carr: It's on my nightstand.
Nick Goellner: Yeah, so apparently the blue light can trigger your brain into staying awake-
Jason Zenger: Oh totally does, totally does.
Nick Goellner: ... into staying awake. I started using that feature on my phone, so at 9:00 my phone goes all orange and apparently I'm supposed to sleep better.
Jason Zenger: Mine goes orange at 3:00, but it doesn't do it as well as just not looking at your phone at least an hour before you're going to go to bed. [crosstalk 00:05:05] Because your brain is still active too, you know what I mean? You want to get that adrenaline from checking Instagram and seeing that one person that liked your photo.
Nick Goellner: The adrenaline's pumping, man!
Jason Zenger: My wife liked my Instagram photo, all right.
Jim Carr: No, that's what you think, that's not what I think. I'm just like, yeah, another one. Yeah, great. You're the one that gets your adrenaline all pumping.
Nick Goellner: No, I don't even care about social media, to be honest with you. I don't care about the likes.
Jim Carr: Okay.
Jason Zenger: But anyway-
Jim Carr: I'm sleeping much better if you're going to ask me.
Jason Zenger: I am.
Jim Carr: Yes.
Jason Zenger: Are you sleeping much better because business is better?
Jim Carr: Yeah, that always helps, right? But I am consistent with my alcohol intake. I don't exceed a certain amount per night. So I'm consistent. I don't eat late at night. I have a exercise routine that I follow all the time.
Jason Zenger: Exercise's important.
Jim Carr: Yeah. I go to bed consistently at the same time every night.
Jason Zenger: 7:38, right?
Jim Carr: 8:15, about. But I'm up at 4:00. And that's okay, I get a lot done at 4:00 am you'd be surprised.
Jason Zenger: No, I'm not. I'm actually up [inaudible 00:06:04]. Not at 4:00 or 5:00 but ...
Jim Carr: I've been sleeping better. Of course I get those occasional nights.
Jason Zenger: You look a little disheveled though. So maybe last night wasn't so good.
Jim Carr: Today?
Jason Zenger: Yeah.
Jim Carr: No, I feel great, actually.
Nick Goellner: That was just mean.
Jason Zenger: May be you just look that way, I don't know.
Jim Carr: Yeah. Well, it's been a long day. Speaking of disheveled, Nick, what's going on at the Bowling bar?
Nick Goellner: Come on, man. The Bowling boring bar is our bar where we ignore all of the advice about drinking in moderation.
Jim Carr: I thought you're going to say, it's our bar where Jason's the only one that's funny and everybody else is boring.
Nick Goellner: It's actually just a newsletter. But someday it'll be a real bar, very soon it'll be the bar in the making chips headquarter.
Jim Carr: We could yack it up and talk about the Metal Working Industry.
Nick Goellner: That's right.
Jason Zenger: Can the conversation [crosstalk 00:06:44].
Nick Goellner: What?
Jim Carr: Can we have a party there and invite all our manufacturing friends?
Nick Goellner: I think we should. We should have like The Rockford community get together at the Bowling bar and have conversations about what's going in and Metal Working Nation central [crosstalk 00:06:55].
Jim Carr: What about our good clients and friends in the Metal Working Industry?
Nick Goellner: Yeah.
Jim Carr: Yeah, I think that's good too.
Nick Goellner: Let's do it.
Jim Carr: Yeah.
Jason Zenger: Caleb is cringing over there because he doesn't want to have to take out a liquor license for the Bowling bar.
Nick Goellner: Well right now the boring bar isn't a real place, it's just a email newsletter. What you can get in the email newsletter is the latest content from MakingChips. So you go to makingchips.com, you subscribe. We'll have the podcast delivered right to your inbox along with some other stuff.
Jason Zenger: And as a bonus, if you subscribe you will find out when that actual Bowling bar is built and you could be one of the Metal Working Nation that gets to go to the Bowling bar when it opens.
Jim Carr: When a VIP guest took the Bowling bar.
Nick Goellner: You have been invited to the party with the cool kids.
Jim Carr: That's right.
Nick Goellner: We got some news to Jim.
Jim Carr: I do. I always wonder why it's my responsibility to own an episode and my responsibility to find manufacturing news. I always wonder why I'm attracted to these news articles. I think it's because my dad always instilled this in me. When is the recession coming?
Jason Zenger: I think it was a generational thing because my dad was the same thing.
Jim Carr: Why?
Nick Goellner: My dad's the same. Once you go through it apparently it sticks with you.
Jason Zenger: I've been through several of them too.
Jim Carr: Yeah, I've been through a lot.
Jason Zenger: This actually kind of reminds me but I told you, Jim, I'm going to be delivering a speech in September for the industrial supply industry. I'm going to be talking about how to lead through fear, because it gets beat into you.
Jim Carr: It does, it really does. Because it's not fun to fail. But anyway, the reason I picked this is because, there's always, when is the recession coming? Who's got the crystal ball? Who really knows when it's going to come? And of course, I like to the output of what this one said. It's no secret that we had a little bit of a downturn in fourth quarter 2018.
Jason Zenger: A downturn or a slow down in growth?
Jim Carr: Thank you. Thank you.
Nick Goellner: A slow down, right?
Jim Carr: A slow down in growth. I think it kind of got people concerned, the stock market was-
Nick Goellner: Was it an alley?
Jason Zenger: Or was it a cut gym? Remember we talked about that.
Jim Carr: It was an alley. It wasn't something to get-
Jason Zenger: Were you bleeding?
Jim Carr: I was not bleeding.
Jason Zenger: Okay. Having the same conversation with you that I had with my son this morning.
Jim Carr: Well, here's the thing. I think the feds were thinking about increasing the prime interest rate, it got people thinking, when the feds do that they think, "Oh, there's a looming recession." I think people pulled back a little bit, it kind of crossed over into early 2019. And then all of a sudden they decided they weren't going to raise the interest rate. I think people started buying again, the excitement kind of like gained a little bit. Now what I'm seeing from this article, it says, "Forget your recession fears. Now the stock market is hitting new highs because everything is bouncing off what the stock market is doing." So as a matter of fact, I think that if you look back at late December 2018, the stock market was down. It was good.I think it went back, we had lost everything we had gained in 2018 at the end of 2018. Is that right?
Nick Goellner: Yeah, I'm not really sure. What I know is we talked about this in like a few episodes ago. We talked about how the little bit of a slowdown and growth is making everyone think, "Oh recession, recession." That's what Jason is talking about.
Jason Zenger: We did a MakingChips episode about it.
Nick Goellner: Yeah like, don't be a wuss. If it slows down a little bit it's not the end of the world we're probably not headed towards another 2008 anytime soon.
Jim Carr: Yeah, so I just want to read this is from Barron's B-A-R-R-O-N'S. These is just this couple paragraphs. This is the late 2018 correction was mostly attributable to the Fed raising fears that the federal funds rate could be raised over 3% this year, followed by a switch to no more rate increases this year. The new high is a big deal because it confirms investors are much less concerned about imminent recession than they were at the end of last year. No recession means better growth in the back half of 2019. This kind of like, was the opposing contradiction to what your news article was a few weeks ago? Where it said the recession is looming. And it's there's going to be a slowdown in the third and fourth quarter 2019.
Jason Zenger: Is it the Dow that everybody always talks about?
Jim Carr: Well, I think the Dow was the most notable thing.
Jason Zenger: Yeah. Somebody predicted it was going to be at like 40,000 eventually, which is pretty lofty goal, but it was definitely down a little bit today.
Nick Goellner: Well, I'm excited about the things that we can actually control.
Jason Zenger: You mean like making chips?
Nick Goellner: Like if you're not making chips you're not making money, right?
Jason Zenger: Bam, end of episode?
Jim Carr: No.
Jason Zenger: Oh, okay.
Nick Goellner: No we're just getting started. [crosstalk 00:11:29].
Jim Carr: ... to talk about. I want everyone to know, don't fear the recession, don't put yourself in a vulnerable position because if you do, and the recession does sneak up, you need to be prepared. You need to react to that downturn quickly.
Jason Zenger: Caleb Do we need to put any disclaimers on this about not making any investment?
Nick Goellner: Yeah, please don't do that.
Jason Zenger: Investments based on advice from making chips. We are not a financial [crosstalk 00:11:54].
Jim Carr: We are not in finance.
Jason Zenger: Don't listen to us.
Jim Carr: All I'm saying is don't put yourself in a vulnerable position because the recession will come and if you're-
Jason Zenger: Making chips.
Jim Carr: ... not ready for-
Jason Zenger: Just don't listen to Jim.
Jim Carr: Yeah, or Jason,
Nick Goellner: It's all about forgetting fears in the article. One of the things that can make people fearful is change, right? People are always afraid of changing. Any time you add automation, you're kind of letting go off some things and allowing them to be automated a little bit. What we're going to talk about in this episode with our guest is how automation can speed things up and make things more efficient, eventually make you more profitable, and allow you to sleep a little bit better at night. Let's get into it, guys.
Jim Carr: Jason, why don't you introduce our friend, a repeat guests. He flew all the way here from the Pacific Northwest, to be with us today to share all the good stuff that he knows about automating through ERP.
Jason Zenger: Well, Paul Van Metre is the man with the baritone voice and he also spells his last name incorrectly. But more important to that he is the president ProShop ERP. He is the only ERP system that we are aware of at making chips that grew out of a machine shop. So Paul definitely lends a lot of expertise as it relates to the machining industry and the software industry and really melding those two things together. So Paul, welcome.
Paul Van Metre: Thank you very much. Nice to be here.
Nick Goellner: Where is the baritone? I was expecting a baritone.
Paul Van Metre: Had just to put that in there.
Jim Carr: Anyway, Paul, thanks again for flying out today. It's always great to have you in our studio and sit down and have a real conversation about business and automation for that. And I thought automation, man, it's such a big word, it can mean so many things to so many people. What I did is, I got the definition off Google about what automate is, and it says convert a processor facility to largely automatic an operation. I think that's exactly what Paul is here to talk to us about. And what his ERP system is doing, is to automate the machining process. So Paul, many small manufacturing's, as you know, are resistant to automation. I know I was at one time, and I had to embrace it. What do you see? Because you've dealt with a lot of small manufacturing companies, particularly machine shops, that's your target audience, right? What is this barrier to resistance to automation? What do you see? What do you hear often-
Jason Zenger: You mean to say what is this barrier to adopt automation?
Jim Carr: Yes, thank you.
Paul Van Metre: Well, I think for many shops, it's the fear of the unknown. Everyone kind of fears things they're not familiar with. Automation seems intimidating, and sort of a big thing with lots of details. Is probably expensive. They know there's probably benefits but it's still a big hurdle to jump.
Jason Zenger: I know for me, my fear of automation is the fear that it's not going to process in the same way that it did prior to the automation of that task. If it were something simple like automating the way that we deliver invoices to a customer, and for that customer that is our biggest client, and they expect their invoices a certain way I put in this automation, and it just doesn't happen the way that I thought it was going to, and they get mad. Something as simple as that, which I know is a little more simple than something that happens on the shop floor. But for me, that's my fear in the automation. Is letting go of that.
Paul Van Metre: Yeah, yeah, absolutely. Letting go of control is something that everyone is nervous about. The tools that you use to do automation are crucial. If you're using the wrong tools, it's just not going to work very well. You guys mentioned in robots, cobots in the beginning of the show, that's-
Jim Carr: [inaudible 00:15:53] type of automation.
Paul Van Metre: Sure, but it's a good example of and it's an easy one to understand.
Jason Zenger: Yeah, because that's what everyone thinks of, automation, robots.
Paul Van Metre: Yeah, it's an easy one to understand. You can put a robot in front of your mill, and you can get more consistent parts or run a night shift if you can't hire people for night shifts. That's the way to automate a machining process. We think of ERP as ... I also want to just talk about, there's a box that the ERP software is in, right? ProShop is not just an ERP system. Absolutely not.
Jim Carr: It's not.
Paul Van Metre: Yeah, I don't even like to necessarily paint it in the picture of an ERP.
Jim Carr: Define what do you believe in your head it is.
Paul Van Metre: We call it a digital manufacturing ecosystem. It basically is a way to ... it's an ecosystem, it's a process that you can ... here I am using the term in the definition of the term, so I'm sorry. It's a way to tie all the details of your business together in a sort of a digital paperless, seamless, efficient way. We'll get to that.
Jim Carr: We will.
Paul Van Metre: But ERP when designed properly, can really help to automate your whole business not just the machining processes, but everything that you do. What it lets you do is build systems that will take care of all those details because we know that machine shops have a million details you need to keep track of, and lets you then focus on the bigger picture and really improve your efficiency and throughput and ultimately your profitability.
Jim Carr: Absolutely.
Jason Zenger: What was the impetus in automating a ecosystem ERP process at Pro CNC, the company that you own prior to ProShop?
Paul Van Metre: Yeah, when we started our company, like almost all companies, we grabbed Excel, and we had QuickBooks and we just started making a bunch of spreadsheets and Google Docs didn't exist back then. We built spreadsheets to manage our work orders and our jobs and our tool list and everything. It was fine at beginning when we were the six of us that started the company, that was fine. But as we started growing and doing more business and hiring employees, it just became way too much. We couldn't handle it. It wasn't scalable, and so it was just getting really chaotic, and we decided that we needed some better software to help manage all the details. And just couldn't find anything.
Jim Carr: What were some of those chaotic things that were happening? I just want to make this relatable because I want to see if those same things that you were experiencing were the things that I was experiencing.
Paul Van Metre: Sure.
Jim Carr: What were those things?
Paul Van Metre: In every small business, everybody wears a lot of different hats.
Jim Carr: Totally.
Paul Van Metre: Right? Whether it's, "Hey, did you order that material for that job?" Or, "Was I supposed to do that?" Or you got to set up the job that you realize the material hasn't arrived yet. So you got to tear the machine back down and set up a different job. Or there's a long lead time cutting tool that you need, and you're kind of stuck with your lead time?
Jim Carr: But we made the setup, we got two machines ready, but we're waiting for the tool.
Paul Van Metre: Exactly.
Jim Carr: It's coming from Israel.
Paul Van Metre: Right. And we didn't realize it until we're in the midst of the setup. All those kind of details are the things that we needed to keep track of, and there wasn't any system we could find that would do that for us.
Jim Carr: Right. I totally get it. I'm glad you shared that with me and the Metal Working nation because we're so involved in the day to day operations of running the business. We don't even realize that there's a solution for these chaotic instances that we're living through. And it doesn't have to be that difficult, right? So you and your partners were pretty green back then. You were learning, you were growing rapidly. What exposure did you have to manufacturing ERPs before developing your own? Now you said you were using Excel, you said you were using Word docs? Obviously there had to have been ... because I know I was using an alternate manufacturing ERP system. You had to have at least looked at those or tried them out and what were the reasons why they weren't a good fit for pro CNC?
Paul Van Metre: Well, actually, at the beginning, we had zero exposure to any other systems. Keep in mind we were fresh out college. None of us had really had any other jobs, certainly not in manufacturing. When we realized that Excel was not going to be good enough and carry us through to our vision. But we probably look through the big green books. The internet was still in its infancy.
Jim Carr: The Thomas register?
Paul Van Metre: The Thomas register.
Nick Goellner: Yeah, seriously?
Paul Van Metre: We had that on the shelf.
Nick Goellner: No kidding? Oh my god.
Paul Van Metre: We probably called up or maybe email was a thing back then. But we had several different software companies come and give us a pitch and give us demos and show us how their product worked. The best word to describe our feeling was underwhelmed. We were just thinking ourselves, "Are they serious? This is as good as the industry has to offer?" Because all those details I mentioned, like the cutting tools and this and that, and your setup sheets and your G code and all those things. None of them managed any of those things. They were fine at putting in your order, and placing a purchase order with a vendor, but all the other details that were so critical on a daily basis, they just completely ignored them.
Jason Zenger: It was like [inaudible 00:21:02] wasn't written from the shop floor perspective.
Paul Van Metre: No, it was from a very accounting based perspective.
Jim Carr: Right. I was going to say why do you think that it wasn't as big as it was? Because do you think that the people that developed that software didn't have true shop floor experience?
Paul Van Metre: In some cases, absolutely. In others to counter your initial statement at the beginning of the show, I think some of them what we heard did start from shops. I can't imagine why would they ever build something? Even if they were trying to run it in their own shop? Because it still seems so unsuitable? We just decided that there's no way we're going to buy one of these systems. By the way, they were all still paper based. We had a vision very early on that we wanted to be totally paperless and digital and sort of more dynamic and live and not relying on these paper documents.
Jason Zenger: And that was pretty innovative in the late 90s.
Paul Van Metre: Yeah, nobody was doing that.
Jim Carr: Nobody was doing that.
Paul Van Metre: And none of this offer was web based back then either.
Jason Zenger: You were a web based from the very beginning?
Paul Van Metre: From day one.
Jason Zenger: Were you programming with HTML?
Paul Van Metre: Yes. From day one. Yeah.
Nick Goellner: That's crazy to me because it's like, all right, so we can't find a system that really fits. Let's just make our own. Did you guys have a background in that kind of thing?
Paul Van Metre: No, we were all manufacturing guys, right? But my partners knew this guy who did web development. And we talked to him and we decided to. He was kind of at a place where he was looking for something to do and we hired him. We hired him back in 2000.
Jim Carr: You hired a developer.
Paul Van Metre: We hired a software developer.
Jason Zenger: What is the software written in right now?
Paul Van Metre: A number of different sort of languages. But it's a pretty neat type of database doesn't really matter. But it's called A1DB. It's a sort of a big data type database. But anyway, we hired him just to build something for ourselves. When we were doing the math on how many different licenses of these other systems we would have to buy. How many other software products we'd still have to buy to fill in all the details and just try to make them talk with each other, and then have it accessible at every machine and every place we want do it because we didn't have paper. Seemed like it was going to be way too expensive. We thought this hiring Matt would solve that. Little did we know we'd have a software developer salary for like 20 years. It ended up being very expensive, much more than those other systems. But it ended up to where we are today.
Nick Goellner: I think that's something I hear all the time about the best startups is they're born from solving their own problem.
Paul Van Metre: Yeah, this was absolutely strictly out of need. We had no intentions of ever doing anything with it, other than run our company with it.
Jim Carr: Right. It's all about efficiency. It's all about automation. It's all about throughput. It's no secret that we at Carr Machine have been using ProShop now actively for about 10 months. I'd like to share with you Paul because I don't know some of these bullet points I've ever shared with you personally. But more importantly the Metal Working Nation just a few of the time saving efficiencies that I've seen in our company by implementing ProShop redundancies. I'd mentioned this before, it was like, we had pieces of material everywhere. Again, it was on our network drive, it was on our PCs. It was in OneDrive. It was in Word. It was in Excel. It was in Google Drive. It was in Google Sheets. It was all over the place. It was in QuickBooks, it was everywhere. We had stuff everywhere.
Jim Carr: There was never a process to collecting that data consistently, where everybody could go to, to get an access that data. One of the big things that we love in pro shop is, everybody that's using the system, which is the entire company knows exactly where the native files are from the customer. So they'd PDF, they'd STEP file, that CAD file, it's all there. Everybody in the entire company has full access to get that native file and look at it during the thing. Part of the impetus in creating a paperless system is what you're trying to pitch ProShop as. The redundancy thing to me is the thing that stands out in my head and has been a big time saver because everything's in ProShop from the estimate, to the quote, to the purchase order to the part level, to the work order, the material, the customer information, the tooling order, the tracking of jobs. It's a one stop shop to find anything you want to know about that particular job.
Jim Carr: What we do is if we have a SPECT out tool, and estimate, we've already got it spec we've already got the cost in there. All we do is create a P.O to Zenger's, Inc. We put in that work number, it pulls it through, it ties it right to that job. It's automatically linked. And if we ever have to go back and do research on what was the cost of that tool?
Jason Zenger: How many of us [crosstalk 00:26:11]
Jim Carr: How many of us use? What was the delivery? Who took the order? How long ago it was? There might even be pictures of the tool. And there we know exactly what we used and it's tied directly to that particular work quarter.
Nick Goellner: How many tasks in that process are now automated that you used to have to do manually? Did you ever think about that?
Jim Carr: Oh my god, at least 100.
Nick Goellner: Really?
Jim Carr: At least 100 if-
Nick Goellner: I thought you will say like 10.
Jim Carr: No. Tasks?
Nick Goellner: Yeah. You have one process before where you were doing it the old way and now you've got some automation involved in the job you just described. [crosstalk 00:26:51] ... things you don't have to do now that you did manually before?
Jim Carr: Yes.
Nick Goellner: Wow.
Jim Carr: To create a purchase order to Zenger's for that particular tool, we have to go into our database which was either on our network drive it was a Word doc or was on a cloud, on one drive. It was either on our network driver or on our cloud drive. We'd have to find that purchase order, we'd have to copy, save it as, we have to put our job number in. We had printed print it. Print the purchase order, send it to Zenger's, Zenger's will process it.
Paul Van Metre: Did you fax it to him?
Jim Carr: No, we did not fax it. We scanned and emailed.
Paul Van Metre: You print it then you scan it?
Jim Carr: We would create a PDF.
Paul Van Metre: Okay, that's better.
Jim Carr: And email it to Zenger's but we would print the PO internally so we would have a paper [crosstalk 00:27:38].
Nick Goellner: Oh my god, we get the idea. We don't need to hear all 100 of them, but wow.
Jim Carr: Yeah, that was a lot.
Paul Van Metre: Most importantly I want to know does Zinger's have a good vendor supplies rating score in ProShop now? Because you talked about delivery time-
Jim Carr: We could have everything right away.
Paul Van Metre: [crosstalk 00:27:53] vendor performance score? The dashboard.
Jim Carr: Explain to all these people in the studio and the Metal Working Nation, what that is and why we're doing that? For every shipment that we receive.
Jason Zenger: Does it automatically rate us?
Jim Carr: No.
Paul Van Metre: Well, yes.
Jim Carr: Go ahead.
Jason Zenger: Not automatic, [crosstalk 00:28:07].
Paul Van Metre: Well, some of it does. There's those two objective scores on time delivery and quality. But then there are several subjective ratings, whether their customer service was good, whether the lead time was good, packaging was good, all that kind of stuff.
Nick Goellner: Those Jason's jokes actually funny or he just think he's funny?
Paul Van Metre: So those go in. Anyway, I was just kind of being funny-
Jim Carr: The whole reason why we're doing that on, an as received basis, is to comply with ISO, because we have to keep our vendor performance rating in check. Is this vendor suitable to continue to do business with or not. By rating all the vendors ... what it does is that product comes into our receiving department, the guys that are in the receiving department that are trained to receive they open the package then scan the receiving ticket into that purchase order. We've got a paperless thing, we know who received it, we know how it was received. Because if you mouse over the packing list-
Paul Van Metre: It will be the time and date stamp.
Jim Carr: ... it says time and date, says Scott received it on this day at this time. And then the person that's receiving it is supposed to do this quick rating, just like Paul had mentioned. Was it on time? What was the customer service? What was the quality? How was the packaging, and it defaults to a three.
Paul Van Metre: Three out of five.
Jim Carr: Three out of five.
Paul Van Metre: Just to give them an average rating.
Jim Carr: Right. But at the end of the day, we have definitely moved some of those from some of our vendors. If we were order ground material and it comes in, they missed the grind size we type that in.
Paul Van Metre: Sure you'd make an NCR about that probably.
Jim Carr: We probably would. I don't know if they've done that yet. But yes, we probably would. That is just one.
Nick Goellner: So it's automated but you can go in and adjust manually because I think that's one of the big fears that people have with automation. Is it so automated that you're not going to be able to actually control anything?
Paul Van Metre: Yeah, well remember, we built this in our own manufacturing company. We certainly weren't going to hamstring ourselves to do things, the way that we actually wanted to run business. The idea is to help automate the process, but let you define the details of that. The fact that you're going to receive that by going to the receiving dashboard, click on the purchase order number of the item you're receiving, and then do the receiving process, and document whether they were good or not. That's the part that helps to automate, rather than pulling up a spreadsheet or writing it down on a piece of paper and having that be a very manual process.
Jim Carr: There's a couple more of things that I want to go through too because I could go on forever and ever. These are just some highlight things that-
Jason Zenger: You really can't go on forever and ever.
Jim Carr: No, I can't, I can't. One thing that I've noticed that is really powerful is the customer information because I'm always concerned about when we do get a new customer. Where is all credit information. Let's say we get a new customer. They're out on the west coast, I know nothing about them. They might be a startup, they might be a legacy, aerospace customer. What's the first thing you do? You run a Dun and Bradstreet. I take that report, upload it right to the customer contact page. Then my office manager, Linda, she sends a credit application to them, they send it back. All those documents come back in PDF format. We take all that we put it all in there and then we say yes or no we approve it or not. And then it's checked off whether the customer has been approved for credit right then and there.
Jim Carr: It's one place that we can always go to for that. Same thing in that customer, the contact thing is, does the customer require a first article inspection port? Does the customer require material certs? Does the customer require AS9100? Does the customer require special shipping or packaging processes? Do they want the packing list inside the box or do they want it outside the box? Do they want the purchase? All of this information is built into the customer contact module. And it's available to everyone. I didn't know this, but what you just told me recently was that in the shipping operations when the shipping and receiving department actually go to ship it and they click that operation that all the shipping information shows up right there. No styrofoam peanuts, no plastic materials, whatever. I didn't know that. But thank you for asking.
Jim Carr: That's just one thing. And maybe you can embellish a little bit on that.
Paul Van Metre: Yeah, well, I think this for those that listen to the last show that I was on about franchising, the way that we built these systems to be able to customize by company, the specific touch points that that customer wants to kind of be communicated with and all the details, that is an automation, that is a way to automate the process of handling that. It's also a really good example of building sort of a franchise process, that you can customize that for each customer and it's the process you've built, and you follow it every time. And people are getting that consistent performance. That customer is getting the packing slip inside the box and they want two copies, right? As they've told you. If you don't do it that way, they're going to get upset, and they're going to call you up and say, "Hey, why do you keep not getting the paperwork correct?"
Jim Carr: Right. Didn't you read it on the purchase order? "Well, no, not the sixth time we did it."
Paul Van Metre: Right. That's also part of ... I appreciate you saying that. That should be something that's caught in contract review, which is also an automated step in ProShop. Again, trying to meet those ISO requirements. Because back to my earlier point that ProShop is not just an ERP system, it is a QMS system just as much as any ERP. The point that we made about us having zero experience with other earpiece systems, I think when we first built this was ... I think it actually was a silver lining because we had no preconceived notions about what an ERP system actually was. Like zero context.
Jim Carr: Because you had absolutely no idea what an ERP system represented at all. You knew your needs and so you built a product based on your niche needs.
Paul Van Metre: Yes.
Jim Carr: And that's how it was birthed. And it was so niche to the machine shop.
Paul Van Metre: Yeah, it turns out that almost every shop out there needs to be able to document whether the paperwork should go in the box or on the box, right? Those kind of details, and so many others are the things that we faced, right? We would have a customer call us and say, "Hey, please stop putting the paperwork on the box because it gets ripped off and then we can't find it."
Jim Carr: Exactly.
Paul Van Metre: Then we built a process in ProShop to be able to document where the customer wants their paperwork preferences. Then we would display that in the shipping operations. Every time someone is shipping any box for that customer they see the exact information that customer wants them to see. It was just very organic and natural the way we built it.
Jim Carr: Tell me, and I don't have experience with this. On that app, the shipping operation whichever number it is, I don't know what the shipping operation numbers and it can change based on-
Paul Van Metre: You can have whatever number you want.
Jim Carr: And I've never done this yet because I don't do shipping and receiving, but does it tell the shipping and receiving department that that particular customer requires material certifications and first article inspection reports?
Paul Van Metre: That happens at the final inspection operation.
Jim Carr: In the final inspection-
Paul Van Metre: Which is typically before shipping actually happening.
Jim Carr: Okay got you.
Paul Van Metre: When you check the box that they want an AS9102 first article, and they want a CFC, and they want the certs? Then ProShop will automatically pull the document package together, it will format the inspection report in the AS9102 format. It will go find every cert that's related to that project. If you have an assembly of 10 items, and each item has a material cert, a plating cert and a hardware cert. Not the CFC. Those are the actual certs.
Jim Carr: CFC is at the end of the whole assembly. Yes.
Paul Van Metre: Yeah. If you have 10 items, in your assembly with three certs each, ProShop find all 30 certs that were scanned in during the receiving process you mentioned earlier.
Jim Carr: That's what it does.
Paul Van Metre: And builds this document package, totally formatted to the specific requirements of that customer. Which is may be different than the customer that you ship five minutes from now, right? They may not need certs at all. They may not need a CFC. And they might want an AS9102. So it will not generate the paperwork if that customer doesn't want it.
Jim Carr: Interesting. Very cool.
Jason Zenger: Jim, I have a question for you as we wrap up this episode.
Jim Carr: Go right ahead.
Jason Zenger: Have you implemented anything into your processes at Carr in order to enhance the experience of working with the new ProShop software?
Jim Carr: Actually, quite frankly, ProShop is part of our sales process now. When we get a new prospect, and we have that initial extremely important first interview where we're interviewing them. They're interviewing us. Typically it's with the engineer. I try to impress them with my technical knowledge. But what I want to do most importantly is because I think we're different in this regard, is they need to know, one of our three uniques is our communication. What I do is I'm doing a Google Hangout, a video conference. What I do is I share my screen with them and I say here, here's our ERP system. Guess what? I'm just not like looking at your print, looking at the quantity, looking at the tolerances in the material and say not that, it's $179. This is the process.
Jim Carr: This is the estimating process, it's going to take 40 minutes to do pre process checking. It's going to take us 90 minutes on the front end to do a setup plus another 30 minutes, that's an hourly set up. It's going to take five minutes to inspect it, it's going to take 15 minutes to break it down, and it's going to actually take 22 minutes to actually cut the metal. We've got all these times, we've got the first time we've made this setup. Subsequent times we've made this setup. How much inspection time is going to be allocated to that first time operation? How much time is it going to take to break that setup down? And then how much time are all the subsequent times we run the second through hundred and second piece part? It's going to add all that up, respectively. Dis I say that right, Paul?
Paul Van Metre: Absolutely.
Jim Carr: Okay, good.
Nick Goellner: That makes me think of when we flew out to Connecticut recently, we talked to Brandon and his dad and he was talking about like, why they started their shop. He was talking about I know what it takes to make a part. And he's like, it's like that plumber you bring to your house and you're like, "Okay, it's $3,000 of a material and you said you're going to be here for a week, why is it at $20,000? You use this in your sales, and be like, "Look, we actually use some science to arrive at the price. It's not just some arbitrary number where you have no idea there's like no transparency involved."
Jim Carr: We're not guessing. This is it, this is the hard numbers. I think they appreciate that authenticity. And the know that we're making proactive moves or proactive processes, we have them in place. So we can quote their jobs truer than they were a year or two or three ago when we were ... we weren't guessing but it's definitely more granular now and we're trying to hit the numbers. And then we can adjust, and then it pulls in the material costs, you can add the percentage of markup you want to do it. Any of your outside services like heat treating, black oxiding, Electroless Nickel. All those come up it goes down at the bottom. You can add your markup to those. There was recently an update which has been fantastic, by the way. That you can put in, if there's a Lot Charge, let's say the minimum Lot Charge for black Anodize is $175, I have one piece. That Lot Charge will pull through just for that one piece. But if I have 100 and that same quote it will take the each price, it'll take the greater of the two.
Jim Carr: It's been really helpful. So again, Jason, to answer your question, this has definitely become part of our sales process now more than just a manufacturing process. Automating our manufacturing process.
Paul Van Metre: Yeah, what you just described there is really automating the estimating process.
Jim Carr: And that's the world that I live in.
Paul Van Metre: If you're using our template system and I hope you are.
Jim Carr: I am using it, yes.
Paul Van Metre: Then it makes that so much faster because all those things are already plugged in, all the defaults, all the Lot Charges and you just tweak the details and [crosstalk 00:40:57].
Jim Carr: The best part is, let's say I've got five line items on a quote or an estimate. And they're all similar parts, but they're different part numbers, I just do the first one first, then I copy that estimate, tweak that just a little bit. It literally might take me 20 minutes to estimate the first part, but the second, third, fourth, and fifth, there's only going to take me maybe two minutes to get that done, because I'm copying, just tweaking the part number, the revision level and maybe the nomenclature, and then I'm on to the next thing.
Paul Van Metre: I think what's maybe more important to the theme of the episode is that once you've automated that process, that once you receive that order, it is much more automated and seamless on the back [crosstalk 00:41:45], as it flows into the shop. That's where the automation is really reaping that fast.
Jim Carr: And that's just 60 seconds more. That's where I struggle a little bit because there's a lot of front end data that has to be put into the system. I struggled with that a little bit because I thought, oh my god, this is not how I used to do things. And now it's taking me a little bit more time to do it, probably because I wasn't used to the system to the way you input it. But oh my god, now that I am using it, it's a world of difference. It's a world of difference. It's just a different mindset, just a different process.
Jason Zenger: Well, this has definitely been insightful. I would say that if a manufacturing leader out there is not making the effort in order to bring their company into a place where they are automating the processes with their ERP system, they need to start thinking about it.
Jim Carr: Right. It's a very helpful tool.
Jason Zenger: It's a competitive environment. And it's more and more difficult in order to make money in this industry and any industry. You need to use the tools that are available at your disposal in order to help you to be competitive.
Paul Van Metre: You bet.
Jim Carr: Paul, thanks again for coming out today, visiting Chicago from the Pacific Northwest. It's always a pleasure to see you and hear these stories and help each other, right? Because at the end of the day, that's what MakingChips is all about. We're here to equip and inspire. And hopefully there's something that we said today that's going to help that guy out in rural Nebraska. That's really struggling with automating his process. And maybe we can help them save five to 15 minutes tomorrow. Maybe he'll even be interested in looking at ProShop as a future ERP system for his shop. If you want to reach out to Paul, you can go to Paul's LinkedIn.
Paul Van Metre: Yeah.
Jim Carr: Paul Van Meter V-A-N M-E-T-R-E on LinkedIn or go to ProShoperp.com and check out some of the videos. They're pretty impactful stuff.
Jason Zenger: And at the end of the day, if you're not making chips-
Nick Goellner: You're not making money.
Speaker 6: Metal Working Nation, listen up, manufacturing is challenging. You need to think differently. The day to day will win the urgency, the pursuit of growth, customer demand, workforce development, new machine tools and robots. The list goes on and on. It is possible to stay ahead of the game of manufacturing. You can't do it alone. We're here to give you access to exclusive content from other leaders, as well as videos, blogs, show notes and more resources designed to equip and inspire you on making chimps.
Paul Van Metre: Thank you. You're ahead of me. [crosstalk 00:44:51].
Nick Goellner: I think Paul's answering the question for who is the funny one? [crosstalk 00:44:56]. Paul is not the funny one. It's still not Jim. You've been dethroned Jason.
Jason Zenger: No.
Nick Goellner: It's now Paul.
Jason Zenger: I'll share with Paul that's okay. As long as it's not Jim.