Jason Zenger: S-T-E-P. S-T-P. S-L-D-P-E-R-T. S-T-L. X underscore T. X underscore B. I-P-T. 3D XML. Cat part P-R-T-S-A-T.
Jim Carr: What are those, Jason?
Jason Zenger: Jim, those are all of the 3D models that you can upload into the Xometry instinct quoting engine.
Jim Carr: Of course they are. I knew that. I just wanted to see if you knew what that was. But yeah, Xometry is great to work with. I can not believe some of those I've never even heard of before.
Jason Zenger: Well, they get into a lot more stuff than just machining.
Jim Carr: Absolutely. But I guess you just drag it, drop it right into their website and bam, it spits out an instant quote. It's fantastic.
Jason Zenger: Yeah. I can't believe it, drag and drop and away you go. Go to xometry.Com. X-O-M-E-T-R-Y.com.
Jason Zenger: [00:00:47 intro music]
Jason Zenger: Welcome to Making Chips. 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, Jason Zanger and I'm joined by my cohost Jim Carr. How are you doing Jim? We're still in beautiful California.
Jim Carr: We are. Yeah, we absolutely are. I feel great.
Jason Zenger: Even though you didn't get any sleep last night, you're still doing okay. You're hanging in there.
Jim Carr: I'm a trooper, man. I got this. We're here. We just got a tour of this beautiful industrial facility here. I love what I saw out in that shop. I got the sense that they're really doing some cool stuff here too. You know, we always talk about automation, so it's great to see automation going into fruition.
Jason Zenger: Yes, absolutely.
Jim Carr: Yeah, it's awesome. It's really cool.
Jason Zenger: So, I've been to your shop, you're an organized guy. I know like you probably, much like my dad, you kind of-
Jim Carr: Are you comparing me to your dad?
Jason Zenger: Well, just that you and my dad are both a little OCD, obsessive compulsive disorder.
Jim Carr: That's you dude. That's not me.
Jason Zenger: So yeah. You're a little bit too, in like an organized way. Like you go through your structure with the episodes and everything. You've got... I'm complimenting you. You've got an organized shop.
Jim Carr: Thank you.
Jason Zenger: So I do like that.
Jim Carr: When you eat a bag of M&M's, do you put all the M&M's? Do you color code them like on your desk? Do you put like the green ones in one pile?
Jason Zenger: I only eat the red ones.
Jim Carr: Okay. We won't go there.
Jason Zenger: That's my favorite color.
Jim Carr: Oh is it really?
Jason Zenger: Yeah.
Jim Carr: And is that why you have a red microphone?
Jason Zenger: Yeah, not for political reasons. I just like the color. Don't try to paint me in a corner Jim.
Jim Carr: Do you think the red M&M's taste better?
Jason Zenger: I do.
Jim Carr: Okay.
Jason Zenger: I actually do.
Jim Carr: Interesting. Good to know.
Jason Zenger: So, being organized is important for a manufacturing leader though. I mean, we've talked about in the show Five S, Lean, we got your ISO certifications, you make sure your processes are correct.
Jim Carr: Absolutely.
Jason Zenger: We've talked about these topics a lot. And we've also talked about, just on this most recent episode, one of the gentlemen said that Lean and Five S are a thing of the past. I don't know if you remember that. Do you remember what he said the solution for the future was?
Jim Carr: I don't.
Jason Zenger: Automation.
Jim Carr: Good.
Jason Zenger: That's what he said.
Jim Carr: That's what he said.
Jason Zenger: So you know what I do? I sell what?
Jim Carr: What do you sell?
Jason Zenger: I sell cutting tools, Jim.
Jim Carr: I know, I know.
Jason Zenger: You use them.
Jim Carr: I'm your million dollar customer.
Jason Zenger: Exactly, exactly. And part of driving efficiencies for manufacturing companies that you need to automate how you procure your cutting tools as well. So, one of the things that we've seen in our business is that there's been an upsurge in customers demanding that they have some kind of automated venue solutions. So, that's what we're going to be talking about today.
Jim Carr: Sounds great.
Jason Zenger: So, we're going to discuss how manufacturing leaders can utilize point of use dispensing solutions, or industrial vending systems as they are commonly known.
Jim Carr: Is there an acronym for that?
Jason Zenger: POU.
Jim Carr: Okay.
Jason Zenger: Point of use? I don't know.
Jim Carr: Got it.
Jason Zenger: There's an acronym. I know you like the acronyms.
Jim Carr: Well no, you like them more than I do. But yes, I knew there would probably be an acronym behind this.
Jason Zenger: So, that's what we're going to be talking about today. And we have a special guest with us out here that we flew out here in the great state of California to talk about it. So, before we go there though, tell me something great going on at Carr Machine Tool.
Jim Carr: It's funny. You know, I mentioned that it was a little awkward leaving yesterday to come out here. There's a lot happening at my company, and I'm really proud already in the 24 hours that I've been gone from there how they're really handling everything in my absence. And thank God we have text and email that we can communicate during the day because I'm getting little granular pieces of information all day long. And today's been very good. Normally when you're in the course of your day, sometimes you get that punch in the stomach, right? But today has been really good.
Jason Zenger: Well, I'm proud of you. You're finally, you're finally letting go of the vine, which is one of the most important ways to grow. That's an EOS thing.
Jim Carr: Yes, I know.
Jason Zenger: So that's one of the most important ways to grow a business.
Jim Carr: I read that book.
Jason Zenger: Yeah, you did.
Jim Carr: I did. And I'm executing it too.
Jason Zenger: Yeah, you did. Yeah.
Jim Carr: Did you commend me for it?
Jason Zenger: I did. I'm saying you're doing a great job.
Jim Carr: Thank you, thank you.
Jason Zenger: In order to grow your business, you have to be less controlling.
Jim Carr: Yes, you're right. How about you? What's going on at Zenger? Anything good? Did you get any good text messages or emails today?
Jason Zenger: My office has been radio silence, so I'm very happy about that.
Jim Carr: Is that good or bad?
Jason Zenger: No, it's a good thing. People will contact me if they need me. So it's been good.
Jim Carr: Okay, good.
Jason Zenger: I mean, they know where I am. So, I'm very happy that the company is running and I have great people working for me. I'm, you know, to be quite honest-
Jim Carr: You don't think that they all have their feet up on the desks and they're smoking cigarettes, do you?
Jason Zenger: No. No, no, no. I trust my people.
Jim Carr: Okay, good.
Jason Zenger: Yeah, I mean, I'm especially happy, I have to say, so we've owned Black Industrial Safety Supply for two and a half years now and that team is, I mean my Zenger's team is phenomenal. That team is phenomenal considering that we've only owned it for two and a half years. And they just know what they, they don't even need me. It's awesome. It really is. And it allows me to do stuff like this, which is great.
Jim Carr: This makes you happy.
Jason Zenger: Yeah.
Jim Carr: You know we always highlight a particular manufacturing news article of the week. What do you got for us this week?
Jason Zenger: So this article is going to be related to the episode, the interview that we have for today.
Jim Carr: What a coincidence.
Jason Zenger: Yeah, what a coincidence. And it's from Business Wire, which it says is a Berkshire Hathaway company, which is interesting. So it says, "Industrial vending machine market size reported to reach 3.72 billion by 2025".
Jim Carr: That's a big stack.
Jason Zenger: That's a big stack. And I hope that the gentleman that we interview today is going to get a great portion of that.
Jim Carr: Should I write down that question to make sure we got it? Because I don't know if you put that on your notes.
Jason Zenger: No, you can write that one down. But what it says is the rising need for downtime, cost reduction and companies is expected to foster the growth of this market over the forecast period. These machines help to lower operational downtime while improving efficiency by enabling companies to manage their inventory efficiently. And it talks about how employee safety concerns are going to stimulate the market. So, basically people's concern for employee safety is going to drive the sales of vending machines to dispense safety supplies.
Jim Carr: Well it certainly makes sense to me.
Jason Zenger: So goggles, gloves, helmets, that kind of stuff.
Jim Carr: Oh, so you're saying the way that the PPE is dispensed is going to be-
Jason Zenger: Going to drive the market for industrial vending machines.
Jim Carr: Aha.
Jason Zenger: And you know, I suspect that, you know, one of the things we've talked about in the show before, I mean it's going to drive sales here in the United States. But maybe what they're talking about is that, I know for a long time, China and some of the other lower cost Asian countries have not been as concerned with their employees welfare in a manufacturing environment. So I'm told. And maybe that's going to change, such that they're going to start taking PPE more seriously and they're going to look for ways to try to contain that.
Jim Carr: Well, here's the thing, we were just talking today about what are the things that we need to do as a community of manufacturing leaders to retain our current talent. You need to respect them and you need to take care of their wellbeing, their health, their physical health. And I think that through this type of automation where it's definitely going to do that for sure. No question at all.
Jason Zenger: Absolutely. So should we move on to the meat of the episode?
Jim Carr: Absolutely. I'm looking forward to it.
Jason Zenger: Would you like to introduce our guest?
Jim Carr: I absolutely will. So, we are remote today and we are here at Auto Crib. And we're sitting in his studio and the gentleman's name is Steve Pixley. He is the founder and CEO of Auto Crib. Steve founded the company while also running an industrial supply company, much like Jason's, because he saw the need to provide a better solution for his clients. Steve created an industrial vending machine capable of storing and dispensing virtually any tool, part, or supply. And since then Auto Crib has grown to support a global network of dealers and distributors. And it's machines are used by leading manufacturers worldwide, including many of the biggest names on the Fortune 500. and they have 20,000 machines deployed across the world. Steve, welcome to Making Chips.
Steve Pixley: Thank you for having me.
Jim Carr: Steve. The metalworking nation better understands what your company does. Can you in your own words, tell us what is an industrial vending machine? And how do we use those in our particular shops?
Steve Pixley: So I think at its most base level it's really an inventory management system that's wrapped in discipline. And what I mean by that is that we don't take the item, whatever the item is, the supply, the tool, the part until we've done the data entry that is needed to make sure that that product is properly replenished and accounted for. Whether that be a job costing system or an accounting system, what have you. That's really at its base level what industrial vending is, its the dispensation and the and the accurate tracking of inventory items on the shop floor, or at the point of use.
Jason Zenger: So Steve, a lot of times Jim and I like to ask people what their manufacturing story is. So, as Jim mentioned in your bio, you used to own an industrial supply company, much like Zenger's, and you now are 100% in Auto Crib. And Auto Crib is a manufacturing facility, I mean, you are out there doing metal fabrication and assembly and everything like that. But can you tell us briefly your story of your time in industrial supply? And the longer story of why you founded Auto Crib?
Steve Pixley: Sure. We started MTS, which was an industrial supply company much like yours, back in the mid eighties.
Jason Zenger: Here in California?
Steve Pixley: Yeah. Here in California in the mid to late eighties. And I was the primary salesperson for the company running around selling tools, selling cutting tools. And over a number of years we had really two issues happening at the same time that kind of converged to form the Genesis of the idea of vending. And the first one was, is I would go to my customers and they would say, "Hey Steve, go get me a hundred more of this tap, or this tool, or this insert or whatever it is". And my comment back to them would be is, "I just delivered a hundred on Monday. There's no possible way you could have used a hundred in three days".
Jim Carr: I know what happened.
Jason Zenger: What?
Jim Carr: One of the machinists took that and threw it in their toolbox.
Steve Pixley: Exactly. So, suspended inventory, right? So, and I didn't believe that the employees were taking this. I mean I'm sure there were some employees that took inventory, but a lot of it was just misplaced or lost on the floor.
Jason Zenger: Every guy had a little bit in their toolbox.
Steve Pixley: Exactly. So after hearing this for 10 years, I came to the realization that these guys are not using this inventory, they're losing it. And, there's got to be a better way to track it and hold people accountable for what they take. And that was one of the first parts of the idea. And the second part was at that time a company called Kennametal, which I'm sure you guys are all familiar with.
Jim Carr: No, I've never heard of it. Kidding.
Steve Pixley: Yeah, was going into tool cribs and basically buying all the inventory under the idea of integrated supply. Buying all the inventory, placing their people there with a software system, and selling my customer base on the fact that let them run the tool crib. They can do a better job at it than the customer can. And they were starting to really hurt our business. They were taking a lot of our customers away. And I would go to my customers and say, "Look guys, there's no fundamental business process improvement in this. You shouldn't do this deal. You're just paying more for the tools". And my customers would just respond back with, "Well, what's your idea? Right? What's your better process?" And I didn't have one. So it was one of those things.
Jason Zenger: So you went back to the drawing board and you put on the thinking cap and you said, "Hey, this is what we need".
Steve Pixley: Yeah, we need something that takes the people out of the process and simplifies this and makes it easy.
Jason Zenger: So you were the brainchild with the design. You were the one. You had the aha moment?
Steve Pixley: Basically it was me and some of the other people at Auto Crib. Yes.
Jason Zenger: Okay, gotcha, gotcha. What pain did you see among manufacturing leaders that led you to that aha moment to start a company making industrial vending machines?
Steve Pixley: I think that the big one was just stock outs. Their machines were down because they didn't have the right tool that they needed. So stock outs were a concern. But we quickly realized that it was-
Jason Zenger: You mean like the CNC machinist is in the shop. He's running a two inch shell mill that has six triangle carbide inserts in it. All of a sudden he's running, running, running. At the end of day three, he goes to the plant manager and says, "Hey, I'm out of carbide inserts for it. This job is down. We're not, the production is silent".
Steve Pixley: Exactly.
Jason Zenger: That was what you're saying you wanted to mitigate.
Steve Pixley: Exactly. In many cases there was something that maybe we were changing the tool, changing that shell mill every six hours, or every eight hours and something in the setup, maybe night-shift, something happens with the coolant. It can be 50 different things and all the sudden the consumption goes up, spikes up and we're using inserts at two or three times the rate. But no one ever goes and tells the supervisor that we're consuming inserts at three times the rate. And this manifests itself three days later in a stock out. It's at that stock out that we usually involve supervision and they come over and say, "Well look, you know, you don't have the fixture tight. That's why this has happened". Or, whatever the reason is.
Jason Zenger: And the inserts are breaking down too fast or yeah, right. It has nothing to do with the individual according to the machine. There's something else associated with it. But what it is, it's giving you insight as to something's not right. Something has changed because their consumption of this particular tool or carbide insert was 20 a week, and then all of a sudden in three days they've used 60.
Steve Pixley: Exactly. Now you can get more granular with the data that you collect. So you know if you choose to, you know not only what insert is being dispensed, but who's taking it. You can track what machine it's going on and a variety of other factors, however you set up the system to do it. So you can get more data on analytics into what's going on so you can get to the root cause of the problem probably quicker.
Jason Zenger: So back when you started the company, the machines looked more like a, well we... the machines are called the helix machine. And it looked more like a, kind of like your traditional candy bar style vending machines. But the machines have changed a lot since then. So, how are those solutions nowadays different than what they were when you first founded the company?
Steve Pixley: Originally the machines were, like you said, traditional candy or snack vending machines. Over time people realized, and this was more with the round tools and delicate, more delicate items, that dropping the tool, like a candy bar wasn't good for the tool. And so, we began the process of starting to design equipment that didn't drop the tool. So today that's why we have carousels, and locker systems, and all different types of equipment to dispense different types of products. But the helix machine still is out there. It still a good solution for a lot of people, but it's not the best solution for all cases.
Jason Zenger: What percent of your overall inventory of the helix machines are out there on the floors now?
Steve Pixley: I would say, it's probably something like less than 20%.
Jason Zenger: Okay. And you're right, it's so funny because it does look like a Hershey's bar is gonna fall. But I do understand if you've got a a half inch solid carbide end mill all the way at the top and it drops, what would that be? Three feet?
Steve Pixley: Yeah, at least three feet.
Jason Zenger: At least three feet. It's going to chip the-
Steve Pixley: You can put padding there, but...
Jason Zenger: It's at the end of the day, there's no guarantee.
Steve Pixley: You don't to want to drop your carbon end mill in padding either.
Jason Zenger: Yeah. Do you know what a five flute high, a variable pitch iscar end mill costs? Over a hundred bucks.
Jim Carr: Absolutely.
Steve Pixley: Easily, yeah.
Jason Zenger: Steve, what are the biggest challenges that you solve... when someone's got a problem, right? So somebody comes to you, they've got a problem, they got a pain point. Whether it's a stock out problem or anything else, what is the resounding thing that you hear all the time that people say to you?
Steve Pixley: When you look at the, the pain points? It really, it kind of lines up pretty carefully with the industries. For instance, in the aerospace industry, which is a big part of our business, what they mostly care about is the time spent traveling to and from the tool crib. Because their labor force is extremely expensive. They typically are costing their mechanics, aircraft mechanics, out at $150,000 a year. So, they don't really care too much about anything other than, "I want to keep that guy at his work center working all the time". Right?
Jim Carr: Makes sense to me.
Steve Pixley: If you look at a plant that's building something smaller where they're cutting tools, like for instance a machine shop, a metalworking machine shops, they care about some things that are a little bit different because they have cycle time on the machine. And their employees are a lot of times standing there waiting for a machine to cycle. So, they're worried about other things like tool consumption and making sure that they accurately cost their jobs.
Jason Zenger: So the paint points that you're hearing are different based on the industry that you're getting the screaming from.
Steve Pixley: Exactly.
Jason Zenger: So from this particular aerospace company, it's the traveling. It's that engineer walking from point A to point B and back, from point B back to point A. Because they're highly compensated individuals, if you add up all that walking back and forth, you probably have a significant dollar amount that they're spending.
Steve Pixley: Well, and it's not just the actual walking. I mean they run into three buddies, they went by the door, they go have a smoke break, they stop at the coffee machine and then they go to the bathroom.
Jason Zenger: Yes.
Steve Pixley: So you've just killed 30 minutes.
Jim Carr: That's pretty tragic.
Steve Pixley: You also have the time that in the aerospace industry, they commonly refer to AOG or airplane on the ground. So, every hour that that airplane isn't in the air, it's not making money. It's kind of a double whammy for these guys. It's the cost of the aircraft mechanic, but it's also the cost of that airplane sitting on the ground.
Jason Zenger: That makes sense. So Jim and I like to talk about acronyms a lot.
Jim Carr: We do.
Jason Zenger: And another acronym that's used in the vending industry is FOD. What's FOD? And what does the vending solutions do to solve that?
Steve Pixley: So FOD stands for foreign object and debris. And this isn't just in the aerospace industry, it's in the nuclear industry. It's in a lot of industries where it's critical that the product that the manufacturer is making is free of any foreign object or debris that may damage that product in its use. So venting systems can, and do today manage the process of making sure that all of the tools and supplies get back to the vending machine and kind of in a passive way ensure that the product that the manufacturer is making is free of this FOD.
Steve Pixley: So for instance, I'll give you an example. If I'm going to take three drill bits out to work on a particular nuclear drag valve that I'm machining at the end of my shift, or at the end of the job, I must check back in three drill bits if that's what I've taken out. Because vending machines are basically computers. We have 30 or 40 people working on that product over a period of three weeks. They're all having to check their products back in. Then we can be sure that we have nothing left in that product.
Jason Zenger: I've heard of FOD before because we do work for Aerospace Department of Defense. And I see that acronym on my prints. And of course, it's all about foreign object debris. You know, when we drill in tap a hole, we can't leave chips in the whole, everything's gotta be out. Or, if it goes through a bead blast or a sandblast operation, we can't leave any media in the drilled and tapped holes, or in in the pockets. But what I'm trying to understand here, because this is kind of new to me and I don't really understand it. I want to be clear, is you're saying that this FOD process, that your tool crib realizes when the machinist puts the tools back in that there's a foreign object debris on them? And how does it monitor that?
Steve Pixley: It's not looking at that. I mean, obviously the vending machines not tracking if you left chips in a hole, right?
Jason Zenger: No, no, no. But, when you're putting those drill bits back in to the tool crib.
Steve Pixley: It's simply managing the fact that you took three drill bits to use on this job, and you returned all three of those drill bits at the end of the job.
Jason Zenger: Oh, I get it. I got you.
Steve Pixley: At the end of the operation. So, that's what it's doing. Is making sure that everything came back that went out from a tool and supply standpoint.
Jason Zenger: Just for inventory control.
Steve Pixley: Well it's not just for inventory control, it's also to make sure that we didn't leave any tools in the-
Jason Zenger: Oh! Like when you're having surgery they have to account for...
Steve Pixley: Exactly.
Jason Zenger: ...the tools that they're using on your body so they don't tie you back up.
Steve Pixley: Don't leave a sponge inside or something.
Jason Zenger: Right. Exactly.
Steve Pixley: Exactly.
Jason Zenger: Got you. Thank you for correcting me and enlightening me on that.
Jim Carr: Well, I mean another solution, you can also use it to manage some of your more expensive, say precision tools. So, if you have $1,000 bore gage, that can be checked in and out as well. So, that way you know that somebody has it checked out. And, if it's sitting on his bench instead of being back on the machine, you can manage that a little bit easier.
Jason Zenger: Totally understand.
Jason Zenger: So Jim, you know, we end Making Chips with our mantra. If you're not making chips, you're not making money.
Jim Carr: Yes we do.
Jason Zenger: And you know what, if you take too long to be making those chips, you know what happens? You lose money.
Jim Carr: You lose money. There's no accountability and there's no data.
Jason Zenger: So how do we solve that?
Jim Carr: Well, I'll tell you what we're doing now that we've converted and we're using Pro Shop ERP. It's a cloud based ERP system. So all of our employees, you know there's kiosks throughout my shop. Everyone has access to the database of the flow of work through our shop. And everyone time tracks against work orders that they're on. Every week, Ryan and I, our Operations Manager get together. We look, we say, "Oh, Jason, he's not at 85% of job".
Jason Zenger: Slow on his job.
Jim Carr: "He's not at 85% efficiency".
Jason Zenger: Taking too many smoke breaks. Must be another Jason because I know that's not me.
Jim Carr: Well no, I had to use you. I didn't want to throw anybody else under the bus. But at the end of the day, Pro Shop is great because it's hard data and numbers and information that we can look at every week and try and get that efficiency to about 85%. Meaning, everybody that's clocked into a work order, or clocked in has to have 85% of time tracking against a work order. So go to Pro Shop ERP, set up a demo, and Paul will be happy to talk to you.
Jason Zenger: There's a lot of mixed messages that we get from a lot of our clients about adopting vending solutions. So what do you see as like some of the biggest roadblocks to that adoption? Or do you think that we've kind of gone past that point where there really isn't a lot of resistance? Or do you still see some roadblocks and some resistance to getting them machines, installed and working properly on the factory floor?
Steve Pixley: If you look at a market, you really have five or six stages of a market. And one of the first stages is is you know you have the early pioneers that are looking at things from a product acceptance stand point. Does the product work? Does it make sense? Do I get a return on investment on the money that I put into it? And so, I think over the last probably 15, 16 years we were really in the product acceptance stage where we were still having to sell the concept of vending. But, with the event of some of the lower cost vending solutions out there, we've moved to really a product differentiation stage.
Steve Pixley: So to answer the question directly, I'd say that since we've moved to product differentiation where the customers are coming to us and saying, "You don't need to sell me on vending. I'm going to buy a vending system. Or, I'm going to get a vending system. You need to tell me why yours is better". So much like when Henry Ford built the first model T, he had to go explain why a car was better than a horse, right? He had to explain all the benefits of the car. At some point he didn't have to explain the benefits of a car anymore. He just had explained why his Ford was better than an Oldsmobile or a Chevy or what have you. And I think we've entered into that phase in the vending world.
Jim Carr: So now we're in a stage of product improvement, product development.
Steve Pixley: We're in differentiation, right?
Jim Carr: Right.
Steve Pixley: The high end, low end, a value line, those kinds of things. Yeah.
Jason Zenger: So that's a good segue into my next question. And obviously different industries have different challenges, or needs for tool crib vending, right? Explain to the metal working nation, and me, what those niche solutions are like. You sell these automation products to many different types of industries, from machine shops to aerospace to PPE. What are the different solutions available? Enlighten me a little bit more. Or there might be an industry that I don't quite understand.
Jim Carr: Or an application.
Jason Zenger: For an application. Exactly.
Steve Pixley: So that's a great question. So, Auto Crib obviously, our background, we were basically a metalworking distribution business, selling cutting tools. So, that's what I know the best. And we have a definitely a machining background. But over the years we've moved into aerospace, medical device, mining is now a big part of the business. So all of these different industries have different needs. And for instance, if we picked mining for instance, what they mostly care about is safety compliance. They want to make sure that their employees have the proper gear when they go down hole. And so that's what they're interested in is having at the end of a a shift change. They want to make sure that every employee that's in the hole has the proper cap lamp, the proper gloves, boots, whatever he needs, respirators, those kinds of things. And not only that, but they want to make sure that if anything did happen, and there was liability or a lawsuit filed, that they can prove that there's a record.
Jason Zenger: Yep.
Jason Zenger: That he did have access to the proper gear and he didn't take it for whatever reason. So different industries have different needs. If you look at, for instance, the medical industry, one of the things that they're most interested in is quality. They want to make sure that their gauges, their quality control equipment is properly calibrated. And they use vending systems primarily lockers to ensure that they don't dispense things that are not calibrated correctly and ready to go. So, if one of their devices falls out of calibration while it's on the floor, the vending system sends emails out to supervisors and says, "You need to go pick up this". You used the example of a bore gauge. "You need to go pick up this bore gauge and get it off the floor". If it's in the system, in the locker system, when it falls out of calibration, the machine refuses to dispense that. It locks down and won't dispense that item. And it will track that device out to an internal or external metrology department to make sure that it's out and it's getting calibrated and when it comes back that it's ready to go.
Jim Carr: Now you've done some unique applications over the years. And, I don't think that these are going to necessarily apply to the manufacturing leaders out there running a machining company. But just to spark some thinking, I know that you guys have installed vending systems to Vande Firearms for a police department. That you guys have vended computers that are actually being charged while they're in the vending lockers. How did that come about? And what other kinds of unique applications have you seen out there like that?
Steve Pixley: That there's lots of applications like that. Everything from, like you said, police departments tracking firearms. But what's even become more important for police departments are tasers. They want to make sure that these tasers are properly charged when the beat cop goes out onto the street. Because if it's not properly charged, then he has to resort to lethal force. And that usually costs somewhere between two and $4 million if you shoot somebody. So they don't want to use lethal force if they don't absolutely have to. And, and so very, very key to ensure that these tasers are properly charged.
Jason Zenger: I'm a little lost and please explain to me again, how does your the Auto Crib solution monitor the taser charging?
Steve Pixley: So when the, the auto crib solution charges, has a charging port and can also manage the operating system. If it's a Microsoft windows system or what have you. We give the ability to actually hook these devices up, laptops, iPads, those kinds of things into a router or switch and manage all of the virus protection and operating systems. But in the case of a dumb device, like a taser, it's just managing the battery life.
Jason Zenger: Right.
Steve Pixley: So it won't dispense the item until it's fully charged.
Jason Zenger: Got it.
Steve Pixley: So that's an interesting application. And as far as how do we get into these things. I would say that 90% of this stuff is just people searching on the web comes up with some key word that that directs them to our website. And they call and they say, "Hey, have you ever done this?".
Jim Carr: And you say, "No, but we can figure something out".
Steve Pixley: But we've got something similar.
Jim Carr: There you go.
Steve Pixley: We've done something similar to what you want to do. And so maybe we could, we could work together and come up with a solution.
Jason Zenger: That's where you want to be. You want to be at the beginning part. You want where you're collaborating together. Right?
Steve Pixley: Right.
Jason Zenger: That's where the biggest bang for your buck is at. Right? Yeah, absolutely.
Jim Carr: One of the things that we talk about a lot on Making Chips is, is robotics and automation. So first of all, do you see the vending systems as just another form of a robot?
Steve Pixley: Yes, absolutely.
Jim Carr: Okay. The easiest and the most, you know, slam dunk application is when somebody is using, like you said in your example, a hundred inserts a week. Are these vending solutions you think only for those high moving items? Or can you essentially use a vending system as a completely robotic tool crib attendant?
Steve Pixley: So the answer is, I used to think that way. That really, the Pareto rule applies to everything in life. And having a distributor brain, I'm really only interested in the 20% of the tools or supplies that move the fastest through the shop.
Jim Carr: Right. The 80% of the volume.
Steve Pixley: Right. It's 80% of the volume and it's 80% of the money and the spend, right?
Jim Carr: Right.
Steve Pixley: But over the years I've had to change my thinking because customers, whether it's a machine shop or an aerospace company or a medical device manufacturer, they don't want to just control the fastest moving items. They want to control everything. That's really driven our technology and our software to the point where we're now having to build systems that are flexible enough to take care of the fast moving stuff, but also can store and dispense the slower moving items and if you're going to be in this business longterm, I think you have to do that.
Jason Zenger: Where do you see the vending industry going?
Jim Carr: Yeah, when you look out one, three, five years even, and that's the way technology is moving, five years is probably pretty lofty, right? Where where do you see it going? What's the next big thing?
Steve Pixley: I think from a technology standpoint, I think you're going to see really hybrid technologies. Where for instance, we use load cells today to weigh items that are taken and make decisions on whether the user took one or seven. We use vision systems, we use RFID, lots of different technologies. And I think the next big wave of technology is going to be hybrids where we put these technologies together and crosscheck against some decision that was made by one technology with another. And I think that's going to really improve the accuracy of vending over the, and really when I say accuracy passive systems. Systems where we're going to allow the user to take anything he wants and then we'll decide what he took after he's done.
Steve Pixley: So that's really kind of where I see the technology going. And then from a more of a business standpoint, I see the market kind of bifurcating into two separate segments. One is the low cost vending solution where a supplier can get a free machine if he buys X amount of product from his supplier. And those systems are fine, but they will have very limited capabilities. And then, a kind of a top end or a high end solution, where they're designed to solve specific problems on a plant floor and the payback isn't related to how many dollars you spend with a specific supplier. That's basically where I see the market going over the next three to five years.
Jim Carr: Right. Well thank you.
Jason Zenger: Thanks Steve.
Jim Carr: We appreciate your knowledge. And you know you've been doing this for a long time and I think the metalworking nation really needs to explore, explore vending solutions if they haven't already done so and you definitely understand the business and have brought something to us.
Jason Zenger: Yeah, thanks to you really opened my mind up to the different ways that we can adopt this type of solution to any industry, quite frankly.
Steve Pixley: Thank you.
Jason Zenger: So Jim, did you learn something today? Are you, are you, are you ready for a vending machine yet? What do you think? Or do you need to solve your-
Jim Carr: There's no question in my mind.
Jason Zenger: ...capacity problem first? And then we need to talk about it again.
Jim Carr: There's no question in my mind that something like this is going to be on my shop floor soon.
Jason Zenger: I know you should call if you want to do that.
Jim Carr: Yeah, I bet. But you know, I think that I have to really go back to my people, discuss it because just like today how Steve inspired me to think outside the box about the technology that's available and the different applications that are available. I think that if I sit down with my employees and tell them, because you know, I have machinists in my shop that knew iscar, solid carbide end mill comes in, we order three from Zangers, it hits UPS. He runs over, rips open the box and takes one right out of the box and puts it in his toolbox because three weeks from now he's going to be cutting some titanium. And won't that be nice like, "I don't have to worry. Because I got a fresh end mill". The thing is the guy next week may need that end mill. We have no idea where the heck it's at.
Jason Zenger: The nature of your business is that you're doing lower volume jobs.
Jim Carr: Absolutely.
Jason Zenger: But you're starting to get more into the production and so it might start to become more of a factor for you.
Jim Carr: Absolutely. So how do people, how does a metal working nation learn more about this technology, this automation? And about Steve?
Jason Zenger: Like we talked about. I think if you need a solution, there are, like Steve said, there's very inexpensive solutions there. There's the old school candy or snack vending machines out there. But I think for most manufacturing leaders, if you're running a growing business, you need something-
Jim Carr: It's called a helix machine.
Jason Zenger: ...the helix machine.
Jim Carr: I looked back at my notes.
Jason Zenger: I think you need have a solution that's going to drive cost savings. That's going to really help you to take your company to the next level. And then you need something that is customized for your shop. And you need to work with somebody that really understands the industry and really can make sure that you're getting the right-
Jim Carr: It's very specific. It's a lot more specific than I ever thought it was.
Jason Zenger: Yeah, it really is. There's a lot of different solutions in there and there's a lot of different ways to do it. Like we said, from RFID to helix machines, which I wouldn't necessarily recommend to more of the, the robo and the related vending machines.
Jim Carr: Awesome.
Jason Zenger: So with that, Jim, if you're not vending your tooling...
Jim Carr: ...You're not making money.
Jason Zenger: Bam.
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Steve Pixley: So that's a, that's a great question. So honestly-
Jim Carr: Thank you, I didn't think of it. No, I'm kidding.