Job Creation in the Manufacturing Industry with Jon Klinepeter

Episode 209 | Challenges: Leadership

Today’s guest on the MakingChips podcast is passionate about job creation in the manufacturing industry. Today’s youth are being pushed towards college degree—while racking up debt—which has led to $1.6 trillion in student loan debt in the country. It is staggering. Unfortunately, many students spend the majority of their working life paying off that debt. 

Jon Klinepeter left a career as a Pastor to start Forrest Bradshaw Industries and the Better Good Group. His goal is to offer underprivileged youth a shot in an industry that is screaming for more labor. To hear more about his heart and mission in manufacturing, listen to the whole episode of MakingChips now!

Connect with us: www.MakingChips.com/contact

 

Jon’s journey from Ministry to Machining

Jon Klinepeter spent 22 years as a Pastor in Chicago (and Minneapolis, MN). He had a passion and love for the people he worked with. He was an advocate in his community. His faith has always been very important to him—but he didn’t love the church organizational structure. So he completed an MBA in Strategy and Innovation.

Then, he bought a 38-year-old CNC Machining company from a Polish Immigrant. 

But why machining? Jon’s grandfather was his hero growing up, and had spent his life as a machinist. According to Jon, what drew him in was “The intellect being expressed through your hands rather than through an education system that rewards a certain type of thinking”. He wanted to build a business with that thought in mind.

 

 

A passion for job creation

Jon’s passion is job creation, and he knows the manufacturing industry is constantly growing. Not only is it growing, but being a CNC machinist is the highest paying career you can have without a college degree. Jon wanted to take that knowledge and start creating generational opportunities for underprivileged youth.

Nothing brings him greater joy than seeing the look of hope on someone’s face when they’ve been offered a job they never thought remotely possible. The purpose of Forrest Bradshaw is to inspire hope for a better future through living wage job opportunities in precision metal manufacturing.

 

 

100,000 jobs for at-risk youth is possible

With his purpose and vision for Forrest Bradshaw, he launched an initiative to create 100,000 jobs for at-risk youth across the country. He wanted to inspire hope for a better future through living wage job opportunities in precision metal manufacturing. He’s watched thousands of kids walking into job fairs scared and hopeless, but leaving full of hope. 

What is being offered is more than just a job, but a future

Many kids don’t have the right guidance or mentors available to them. Those of us fortunate enough to have parents that were available had a safety net. Parents are ongoing mentors throughout our lives—but many underprivileged youths don’t get that. Providing jobs gives them hope for the next generation. 

 

 

A business owner must lead with Integrity

With his core vision in mind, Jon knew he had to build a business with his values at the center of everything he did. The foundational value he chose to build Forrest Bradshaw on was integrity. At times, practicing integrity can seem counter-cultural. Jon reminisced about getting some machinery fixed:

The company giving him a quote for the job (that the insurance was going to cover) asked him what cut that he wanted from the quote. 

With his team waiting to see what his response would be, he responded “Just whatever it costs, bill us for that”. Your integrity will cost you something. That would’ve been easy money in his pocket. Instead, he chose to honor his core values and lead with integrity. 

To hear the rest of Jon’s mission, vision, core values, and advice for leaders in manufacturing, listen to the whole episode! 

 

 

Here’s The Good Stuff!

  • What would Jim do if he wasn’t at Carr Machine & Tool?
  • What’s happening at Carr Machine & Tool 
  • What’s new at Zenger & Black
  • Subscribe to the Boring Bar Newsletter!
  • Manufacturing News: Mike Rowe weighs in on student debt
  • Why Jon Klinepeter left ministry for machining
  • The purpose of Forrest Bradshaw Industries
  • The core values Jon embraces in his business
  • Jon’s advice for aspiring manufacturing leaders
  • We chat with Mark at Xometry about ITAR compliant vs. registered

 

Tools & Takeaways

 

This Week’s Superstar Guest

 

Connect With MakingChips


Subscribe to Making Chips on Apple Podcasts, Google Play, Stitcher, or Spotify

Jason Zenger: Jim, I got some more acronyms for you.

Jim Carr: Okay, give it to me, man.

Jason Zenger: And some numbers too. Can you handle it?

Jim Carr: No, I can't.

Jason Zenger: QMSAS9100ISO9001? Do you know what that means?

Jim Carr: I do know what that means as a matter of fact. It's two processes, QMS process. Quality management system processes. AS9100. And ISO9001.

Jason Zenger: And how does that work with your new ERP system?

Jim Carr: Well, what it is, Jason, we were talking earlier about the paperless system. All of the documentation that we use in AS9100 and ISO9001 is totally integrated.

Jason Zenger: So no more binders?

Jim Carr: No more binder. No more signing papers. Everything's integrated in Pro Shop ERP. And it makes our life so much more easier and so much more efficient.

Jason Zenger: So go to proshoperp.com for more information. Welcome to MakingChips. We believe that manufacturing is challenging. But if you were connected to a community of leaders, you can elevate your skills, solve your problems, and grow your business. I'm your host, Jason Zenger. And I'm joined by my co-host, the newly healed Jim Carr.

Jim Carr: Yes, absolutely.

Jason Zenger: Question, after a stint in the hospital-

Jim Carr: Did you just change that?

Jason Zenger: Did I?

Jim Carr: Yes, you did.

Jason Zenger: What did I do?

Jim Carr: You changed our mantra.

Jason Zenger: No, I didn't. What are you talking about?

Jim Carr: Yeah, it's Welcome to MakingChips. We believe that manufacturing is challenging. But if you are connected with a community of leaders, you can elevate your skills, solve your problems, and grow your business.

Jason Zenger: Isn't that what I said?

Jim Carr: I don't think so.

Jason Zenger: I think I did. Should we go back and check it?

Jim Carr: No. Let's just go.

Jason Zenger: Who cares? Who cares? Well, I think you think you've memorized it and you haven't. I have because I'm so ... I guess-

Jim Carr: I'm so dang structured.

Jason Zenger: I was trying to impress myself but maybe I screwed it up.

Jim Carr: Yeah. So anyway, good to be here. Feels good. We've got a great guest today. I'm really anxious to share his story with the metal working nation.

Jason Zenger: We're her at Zenger's Industrial Supply.

Jim Carr: We are. And every time I come here. I always tell my team, I'm like, "So what do we need? You're going to need any solid [inaudible 00:02:06]? You need any drills? You need any WD40? Denatured alcohol?

Jason Zenger: 55 gallon drum of coolant. We could send that in your car.

Jim Carr: I'm not going to throw a 55 gallon drum of coolant in the back of my Buick.

Jason Zenger: How about a tote?

Jim Carr: No, I'm not going to do that. I could do a tote. But I'm not going to put a 55 gallon drum in my trunk.

Jason Zenger: No tote's like bigger than that.

Jim Carr: Oh is that what it is? I didn't even know. How many gallons is a tote?

Jason Zenger: 250s-ish.

Jim Carr: Oh God. Oh really? Didn't know that. No that's big. That's big stuff boy.

Jason Zenger: Although, I might be able to put a tote... You know what I just bought you?

Jim Carr: What'd you buy?

Jason Zenger: Well, I didn't buy it buy. But I put 100 bucks on the new Tesla cyber truck. Have you seen that?

Jim Carr: No.

Jason Zenger: Yeah. It's their newest offering as far as a truck. So I'm either going to-

Jim Carr: Oh is that the one where they went to break the windows the other day-

Jason Zenger: Yes, that's the one.

Jim Carr: And then they broke and it was a big fail.

Jason Zenger: Right, yeah, yeah. Exactly.

Jim Carr: That was so lame. How in the world could they ever let that be an epic fail?

Jason Zenger: Right, there's a lot of people are saying the whole truck itself is not going to be what they actually release.

Jim Carr: But that's not going to be-

Jason Zenger: When the time comes.

Jim Carr: Isn't that going to be for the military? Those trucks? Those are going to be on the streets?

Jason Zenger: No. Well, what he said ... Well, yeah, those are going to be on the street. I put 100 bucks on one. And-

Jim Carr: What do you mean you put 100 bucks on one? You bought stock?

Jason Zenger: It's like a ... No, it's a reservation for the truck.

Jim Carr: Oh God. What is it to?

Jason Zenger: It just gets you in line to buy one of them when they're ready to come off the production floor. So what he's saying is that it's going to be the same vehicle that's also going to be on Mars eventually.

Jim Carr: Good luck with that.

Jason Zenger: For those of you out there, you can't see that Jim's rolling his eyes.

Jim Carr: I'm not going ... Yeah, it's not at all my brand.

Jason Zenger: Yeah, your brand is Buick. We understand.

Jim Carr: Yeah, I know it is. I need the lush, mushy kind of ride. And heated steering wheel, heated seats.

Jason Zenger: You and whose the Texan that promotes Buick?

Jim Carr: No, I think you're thinking of Matt ... No, I know ... It's Lincoln he promotes.

Jason Zenger: Oh okay, whatever. They're all the same to me.

Jim Carr: Anyway, those uncool brands.

Jason Zenger: Yes. So Jim related to this episode, have you ever actually ... And don't just make up a story, but have you actually thought about-

Jim Carr: No, I'm not going lie. I'm not going to cry either.

Jason Zenger: Have you actually thought about leaving Carr Machine & Tool and just doing something drastically different?

Jim Carr: Actually, good question and I wonder if you know me well enough to know that answer?

Jason Zenger: Be a bartender?

Jim Carr: Yes, exactly. In my early 20s, when I worked for my dad, I was questioning whether this was it for me. But I mean like I didn't really ... I really didn't feel that overwhelming passion for the industry.

Jason Zenger: But I don't mean like that. I mean after putting in decades. A decade or decades of work. Like maybe next year. Be like, "You know what? I'm done. I want to do something else." How about being a tooling salesman?

Jim Carr: No.

Jason Zenger: You want to run Zenger's Industrial and I can go do something else?

Jim Carr: No. But I would love to take a job at our marketing company and be in that capacity. So if I were to leave industry.

Jason Zenger: We have a marketing company?

Jim Carr: We do.

Jason Zenger: What's it called?

Jim Carr: It's called MakingChips Marketing.

Jason Zenger: Oh okay.

Jim Carr: Yeah.

Jason Zenger: I didn't even know that.

Jim Carr: Yes you did. But yes. If I were to leave Carr now. I mean I have this plethora of knowledge of this industry. Why not pull that through into something that I really, really enjoy doing.

Jason Zenger: I think the fact that you said plethora of knowledge means that you don't have as much knowledge as you think you do.

Jim Carr: Spell it.

Jason Zenger: P-L-E-T-H-O-R-A.

Jim Carr: E-R-A.

Jason Zenger: Oh.

Jim Carr: Oh, I could be wrong too. Anyway, we're not going to go there. But yes I would. So early in the 80s, yes, I wanted to leave Illinois. I went, "Oh I had all my friends. I'm just going to go Florida. I'm going to bartend in a hotel and it's going to be ... Life's going to be amazing." Good thing I didn't do that. I got some-

Jason Zenger: Right. Well, you wouldn't know me so that would be bad.

Jim Carr: I wouldn't know you. I got some sense. And I said, "You know what? My family's probably had a pretty good life so far. I think that if I push through and work really hard, I can probably mirror that same kind of lifestyle." A decent family. Raise a family and I have to say that it's been very rewarding to be and my family. Albeit it's been not easy. It has been hard.

Jason Zenger: So now you have-

Jim Carr: I have not thought about leaving industry so much as I have in the last five years. I can see the light at the end of the tunnel as far as retirement and what does retirement really look like for me.

Jason Zenger: So now you would leave if it came to working full time for our marketing agency?

Jim Carr: I could see myself-

Jason Zenger: You could see yourself doing that?

Jim Carr: I could see myself doing that. But I would have to make sure that my Ryan is fully equipped to manage the day to day of a manufacturing company.

Jason Zenger: So today's episode, we're actually going to talk about a manufacturing leader who wasn't always in the manufacturing industry and made a transition after a couple decades of doing something completely different.

Jim Carr: Completely different.

Jason Zenger: He actually moved in the opposite direction of what I want to move into.

Jim Carr: Well, that's okay.

Jason Zenger: But we'll talk about that later.

Jim Carr: Yeah, absolutely.

Jason Zenger: So what's happened at Carr Machine?

Jim Carr: We're going into Thanksgiving holidays right now today.

Jason Zenger: Right.

Jim Carr: And I'm seeing a really ... Things are really starting to drop off. The emails are, I would say, in half of what we normally would get in a typical Tuesday. But all in all, we're having a really good year.

Jason Zenger: Good.

Jim Carr: And I think 2020's going to be good too. You've got to keep positive mental attitude. You can't listen to what the media says. You can't be scared by that. You've just got to ... Like Jon and I and Ryan keep saying, we just keep working hard.

Jason Zenger: Well, you've got to make your own future. You know what I mean? Like that was one of the things that I realized during our last recession. And I know we've talked about that before. But you can't just sit back and be like, "Oh, we're in a recession. Can't do anything about it."

Jim Carr: Right. I know. You know what's crazy though? Have you been watching the stock market lately?

Jason Zenger: No, I don't watch stock market.

Jim Carr: It's in record territory right now. Who would have thought?

Jason Zenger: I bet you Trump thought.

Jim Carr: Well, he's taking all the credit for it. But nonetheless, we're in record territory. And people have been saying that it's going to just die for years now and look it.

Jason Zenger: I know. I know.

Jim Carr: We're still there. So anyway. So Jason, what's going on at Zenger's and Black, man?

Jason Zenger: What I thought of initially is that this is my favorite time of year because it's the planning time of year, but we're recording another episode about so I won't get into that.

Jim Carr: Fingers crossed.

Jason Zenger: What's on my mind right now? I'm trying to get that mis-collector installed for you. So that's been on my mind. Trying to find a HVAC guy to install your mis-collector. So I don't know. That's it.

Jim Carr: We might do it ourself. At our production meeting today, we said why can't we do it ourself?

Jason Zenger: You could.

Jim Carr: We could do it ourself.

Jason Zenger: Yeah, as long as you don't blame it on me.

Jim Carr: I know. Well, we're not. How can we blame it on you? But we'll get it done. In the big scheme of things, it's really a small little thing that needs to get done. I wouldn't take it personally. Are you?

Jason Zenger: Well, I get nervous because I know you like things to be done.

Jim Carr: No, I want it to be done right.

Jason Zenger: I like things to be done right and you like things to be done right so I want to make sure things get done right.

Jim Carr: Exactly. Don't worry about it. We got it. We'll work it out for sure.

Jason Zenger: Good. So the other thing that's going on MakingChips is we have our Christmas party coming up. Are we doing that at the Boring Bar? Or is it not done yet?

Jim Carr: No, the Boring Bar is not done yet. I think it's slated to open and we're going to be having a big, big grand opening when it does open. Our new marketing media facility in Rockford, Illinois early 2020. And there will be a Boring Bar. A bar that we can sit around and boring manufacturers can talk about boring manufacturing stuff, right?

Jason Zenger: Yep, sounds good. So what is the Boring Bar now?

Jim Carr: I know it sounds great. The Boring Bar is a weekly newsletter that we send out to everybody.

Jason Zenger: And why should I subscribe?

Jim Carr: Why should you subscribe? Because you get the insight. You get the latest. You get the stories. You get the video.

Jason Zenger: So what do I get that nobody else gets if you don't subscribe?

Jim Carr: But you get it in your inbox every week right when it's fresh and new. You know that there's a new episode out. You know that we've got curated news articles there.

Jason Zenger: Well, you actually get articles and you get videos that you wouldn't otherwise get if you only listened to the podcast.

Jim Carr: Right. Absolutely. So that's a very good reason to text to 38470 and sign right up. And I'm just double checking that number before we go any further. And yes. It's 38470. Just pull out your smartphone right now and text the 38470 and you're easily subscribed.

Jason Zenger: Well, you text CHIPS. C-H-I-P-S.

Jim Carr: C-H-I-P-S.

Jason Zenger: To 38470.

Jim Carr: You bet. What kind of manufacturing news you got today?

Jason Zenger: So this article is from Fox Business. And it's from a gentleman, I really like a lot of things that he has to say about not just our industry specifically, but about the working class industry. And it's an interview with Mike Rowe from Dirty Jobs. And the-

Jim Carr: Who I ... Honestly, I did not know anything about him.

Jason Zenger: Yeah, I was kind of surprised about that.

Jim Carr: Until you mentioned ... Yeah, I did not know him.

Jason Zenger: But the title of the article is Lack of Shop Classes is Why We're 1.6 Trillion in Student Debt According to Mike Rowe.

Jim Carr: You know what? That's disgusting.

Jason Zenger: I know.

Jim Carr: That is disgusting that we're 1.6 trillion dollars in student debt.

Jason Zenger: I know. It's ridiculous. And what he told Fox Business was that students continue to choose the expensive career path when there's excessive demand for blue collar workers. According to Rowe, there are currently millions of jobs out there that do not require a college degree. We know that.

Jim Carr: We know that.

Jason Zenger: And one of the things I was telling you the other day as it relates to these HVAC companies not getting back to you to install that mis-collector is because they're so busy. Because they don't have a pipeline of people to help them either. And so, this is a systemic problem.

Jim Carr: I didn't ... I would never have that HVAC, there's a lack of-

Jason Zenger: It's a skilled job.

Jim Carr: I know.

Jason Zenger: I mean, I would say that the skill level of a machinist is way higher. But an HVAC technician is still a skilled job.

Jim Carr: Right, you need some skill, right, yep.

Jason Zenger: You need training and everything in order to get that.

Jim Carr: Right.

Jason Zenger: So I'm going to quote Mike Rowe. What he says is "We have unintendedly maligned an entire section of our workforce by promoting one form of an education at the expense of all of the other forums." So what he's saying is that we've thought of going to university to get a major in psychology when you have no intention of being a psychologist is the way to go as opposed to get training to be a CNC machinist because we don't want to tell our neighbors that our kid didn't go to university. Because everybody gets that question when their kids are 17, 18. "Where's your kid going to college?"

Jim Carr: Right.

Jason Zenger: If you answer that question, "Well, he's going to go to get technical training to become a CNC machinist, everybody's like oh I'm sorry."

Jim Carr: Right. I know absolutely.

Jason Zenger: And that's terrible that that's the way our society is.

Jim Carr: It is. It is. When my parents asked me that same question. They're like [crosstalk 00:12:28] No either you're going to go into the family business and go to trade school or we're going to send you to a university. I had to think long and hard on what decision I was going to make. And I mean I took the family manufacturing company.

Jason Zenger: And that was smart.

Jim Carr: Well, I don't necessarily know if it was ... I guess it was ... It was a decision. I made the decision to do it. You know what I think that drove me? Is I didn't want to fail. I didn't want my parents to think that I was a failure. And that I could push through. Because I mean, let's face it. In the multiple decades that I've been in this business, I've had. I've ebbed and flow with good years, bad years, recessions, good times, bad times. And I've learned a lot. But I think at the end, you just ... I just don't want to fail. Failure to me is not acceptable.

Jason Zenger: Well, I think that the three smartest things that you probably did in your life was (A) working at Carr Machine & Tool, (B) marrying the wife you met, and (C) meeting me.

Jim Carr: Well, that's part of it. There's other things. I think there's another very big element too is networking. And involving myself in the TMA. Because it afforded me a lot of new relationships that would have not ordinarily been exposed to. And I met a lot of great people. And they rewarded me by making me the chairman in 2016.

Jason Zenger: So you also meet a lot of people ... I think we're getting off topic, but you also meet a lot of great people when you go to university. But I think the point is that like if you're going to do something like that, you need to have to a purpose.

Jim Carr: Yes.

Jason Zenger: And like when I went to college, my purpose was to be a chemical engineer. And that was what I was going to school for. And while a lot of my peers at Wash U were partying.

Jim Carr: And you weren't?

Jason Zenger: Three days a week. I was ... Like I got to study. Got to keep up with these. I was mostly competing against, to be honest, foreign exchange students that were willing to work seven days a week and study seven days a week. And I was like I can only do six. And so, I got by with C's in chemical engineering. But I was there for a purpose. And I think that's the big thing is like if you're going to go to school, we need to train our parents first. And educate the young kids out there to like you got to have a purpose. And I'm going to have a conversation with my daughter and say, "You're not just going to go to-" And I don't think she's like this because she's driven like I am.

Jason Zenger: But say, "You're not going to go to school just to have an experience and learn to be an adult. You need to learn to be an adult at home. And you need to go to university for a purpose."

Jim Carr: I could not agree with you more.

Jason Zenger: And there needs to be less people going to university.

Jim Carr: I just see all that debt and I see-

Jason Zenger: Oh it's disgusting.

Jim Carr: It's disgusting. And we need to start making changes. It's really important.

Jason Zenger: So could you ... Could we get on with the show?

Jim Carr: Yeah.

Jason Zenger: Could you introduce our guest?

Jim Carr: We have a great guest today. And I'm so glad that Jason suggested him to me the other day. Because I've met this gentleman before. And he's got a great, great story and we're going to hear what changed him and brought him into our industry. So our guest today in the MakingChips studio is Jon Klinepeter. He is the founder and CEO of Forrest Bradshaw Industries, a CNC metal manufacturer in Franklin Park, Illinois. Actually very close to here. And Better Good Group, a consulting firm focused on strategy and innovation for social impact organizations.

Jim Carr: During his 25 plus year career, Jon has been able to learn from and bring new insights to both for profit and not for profit organizations focused on strategic clarity, leadership development, excellence in communication, and building a collaborative culture. He holds an MBA from the University of Notre Dame with a focus on strategy and innovation. His family is his first priority as most of us are. And most important calling, Jon's wife, Christina, is also a CEO and is currently on the U.S. national team for karate. Making a run to qualify for the 2020 Olympics in Tokyo.

Jim Carr: His teenage sons, Gabe and Will, they love legos, nerf gun battles, and are often found hanging out with his dad in the CNC shop. Sounds a lot like me. And a lot like my kids. Welcome to the show Jon Klinepeter. Jon welcome.

Jon Klinepeter: Thank you. It's an honor and a privilege to be here. I told you before. I'm a consumer of your podcast. So to be on the podcast that I've listened to hundreds of times for my own inspiration and support is such an honor. So thanks. I love being here.

Jason Zenger: That's great. Well, MakingChips is a community driven platform. And we think that there's people that have a story to tell and there's stories that we have told on MakingChips over the years. And there's just hundreds more. And I think yours is one of them. And I think that there's many manufacturing leaders out there that can learn from you just as you've learned from other guests that we've had on the show. And maybe even you've learned a little bit from Jim and I over the [crosstalk 00:17:26].

Jim Carr: Just a little bit.

Jon Klinepeter: Tons. Tons of learning.

Jim Carr: Thanks, Jon.

Jason Zenger: So Jon, you spent a couple decades working in the church. And it's kind of funny because I actually ... I haven't expressed this on MakingChips, but my goal in life is to actually transition out of industry into working for the church. I want to eventually become a missionary in Thailand where my wife's family is from. So that's my goal.

Jon Klinepeter: Wow, okay.

Jason Zenger: My wife's not on board yet. But that's the goal. And you actually moved in the opposite direction which is not ... Not common. So why did you move out of the church into the manufacturing industry.

Jon Klinepeter: Yeah, I know that doesn't seem like a logical progression.

Jason Zenger: Well, I mean, I don't know if it's ... Yeah, it's kind of a ... Just a-

Jon Klinepeter: It's interesting for sure.

Jim Carr: It is ... It definitely is interesting. And I look forward to hear you tell the metal working nation all about it.

Jon Klinepeter: Yeah, for 22 years I was a pastor in local churches in Chicago area mostly. A couple years in Minneapolis, Minnesota. And in some ways, I was a bit of a reluctant pastor. Where I loved the people. I loved the opportunity to see people who were facing hard things find a community to help them resolve those hard things. And my faith has always been very important to me and governs my decisions and how I live my life. The church organization wasn't always the easiest thing for me.

Jason Zenger: I've heard that before.

Jon Klinepeter: It's a little ... It can be a little-

Jim Carr: Oh the organization.

Jon Klinepeter: Yeah, the structure. The mechanism.

Jason Zenger: It can be icky as we sometimes say.

Jim Carr: Yeah, it sure can.

Jon Klinepeter: Can be. So I didn't ever love that part. I always loved the people and the journey. So toward the end of my time working at a church, I ended up going back to school. Getting my MBA and feeling like there was something different for my next career. My next season, 20 some year run, was going to be a little different than my first run had been. So that's how I ended up leaving.

Jim Carr: So why CNC machining? I mean, was it something you were passionate about? Obviously, you knew what it was, right?

Jon Klinepeter: Some of it.

Jim Carr: I mean hopefully you know what ... Because like most of the people that we meet ... You go to a cocktail party or a Thanksgiving party or a holiday party and you tell people you're in manufacturing and they start to blur over and they're like-

Jason Zenger: And then you tell them what CNC means and then they're even more confused.

Jim Carr: They're even more confused. So why CNC machining, Jon?

Jon Klinepeter: Why CNC, yeah. It's a great question. So my grandfather, who the company is named after, Forrest Bradshaw.

Jim Carr: That's a great, strong name, right?

Jon Klinepeter: Yeah, I love the name.

Jim Carr: Forrest Bradshaw.

Jason Zenger: Reminds me of Tom Hanks for some reason, I don't know why.

Jon Klinepeter: Run, run Forest. So he was my hero growing up. And he was a lifelong machinist. And what I saw in him was the expression of intellect. A little like the micro category you talked about earlier. The intellect being expressed through your hands rather than through an education system that rewards a certain type of thinking. So I knew I was going to start something after working with some clients in the consulting side. Realizing my passion was actually job creation. And the hope that brings to a young individual.

Jon Klinepeter: So decided to figure out what is the best opportunity to create specifically living wage jobs. Not just menial jobs where someone has to grind and not be able to make a living.

Jason Zenger: Pushing a button or something like that, yeah.

Jon Klinepeter: Yeah, and not support a family. And not ... It doesn't get people to that next level of generational opportunity.

Jason Zenger: Right. You don't want somebody to be like pushing a button on the CNC machine and then having to work in the evening and not being able to see their family.

Jon Klinepeter: That's exactly right. So as we all know, there are significant opportunities for living wage jobs in manufacturing, more than most industries.

Jim Carr: More than most, yeah. It's ... We talk about this all the time on the show that it's the highest paying career that you can have as a CNC machinist without a college education.

Jon Klinepeter: And that's our real target is to help people who college maybe isn't the right opportunity for them. But they're ... They still deserve an opportunity to express their intellect and to create a better future. So that's sort of how it all came about. And worked with a couple brokers and looked at different companies that were for sale and ended up acquiring a 38 year old CNC company from a guy who'd moved to this country and built it the American Dream.

Jason Zenger: He was an immigrant, right?

Jon Klinepeter: He was, yeah. A Polish immigrant who built it from nothing.

Jason Zenger: A lot of ... I mean kind of a fun fact for the metal working nation, I think it's ... Chicago is the city with the second most polish people in the entire world.

Jim Carr: Oh yeah. That's for sure.

Jason Zenger: Next to Warsaw. It's like there's so many people immigrated to Chicago from Poland that it's just ... If you've never been in our ... In the industry here in Chicago, you might not know that. But it's very, very common.

Jon Klinepeter: Yeah, so [inaudible 00:21:51] is his name.

Jason Zenger: You learned your word. Okay.

Jon Klinepeter: And he created this company form nothing. And built it. And then was ready to retire and was looking to hand it someone and we-

Jim Carr: He did not have any like children?

Jon Klinepeter: He did. But they had other career aspirations and are thriving are theirs. His son and daughter are both thriving in theirs. So he wanted to find someone then on the outside to take it to ... That next level.

Jim Carr: Very interesting.

Jon Klinepeter: And that's why I got involved.

Jim Carr: Great.

Jason Zenger: Awesome.

Jim Carr: So tell us a little bit about your ... The nonprofit that you have. Just briefly. I know that's not really a manufacturing related, but what do you do in that nonprofit?

Jon Klinepeter: So it's actually a for profit company. But we work with a lot of not for profit organizations.

Jim Carr: Oh sorry, okay. Got it.

Jon Klinepeter: It's a consulting company, helping with strategy and innovation. We work with some corporate. Some not for profit and then some churches as well. To try and help them do what they're trying to do better with a more strategic alignment across the organization.

Jim Carr: Okay, is it similar to like an EOS?

Jon Klinepeter: It's very similar. It's trying to bring structure and organization and intentionality. I think that's the essence of strategy is bringing an intentional future into the purview of the organization. And so that's what we try and do.

Jim Carr: Okay, so going along with just that development of like a mission and vision for your company, what is the purpose of Forest Bradshaw?

Jon Klinepeter: So our purpose is to inspire hope for a better future through living wage job opportunities in precision metal manufacturing. This idea came from one of my clients on the consulting side was Starbucks. And they are a very intentional company around creating opportunities. And we did this hiring initiative across the country to try and get 100,000 jobs for at risk youth across the country.

Jason Zenger: What is an at risk youth? Can you break that down just for me?

Jon Klinepeter: A lot if it's about economic opportunity.

Jason Zenger: Okay.

Jon Klinepeter: People who are living in neighborhoods and areas of cities that don't have the same economic opportunity for jobs that other neighborhoods or suburbs do.

Jason Zenger: Got you.

Jon Klinepeter: So we would do these events where we'd have 12 to 1500 jobs available on a day. And 2000 kids would come through. And they'd be interviewed. And I see them come in scared and hopeless. And I would see them leave with a job offer in their hand filled with hope. Realizing that they have a future.

Jim Carr: To work for this fabulous brand.

Jon Klinepeter: That's exactly right.

Jim Carr: Right. And it's a huge brand. And everyone knows it. It's got all this public relations around it. And it's ... It's a positive thing, right?

Jon Klinepeter: And a brand that provides health insurance. And provides college opportunity if that's their right next step. And so, it's more than just a job although that's where I really saw the hope and opportunity for these young adults. So through that process I thought, "While I love helping other companies do that, I want to build a company myself with a team that actually creates and provides those jobs." So that's where this mission came from. And what we're trying to live. And we've been doing it for 16 months now. And it's a crazy roller coaster.

Jim Carr: That's great.

Jason Zenger: Great, love it. And Jim, if I were to characterize that whole notion of like an at risk youth, you've got three kids. And if any one of them ever got into a situation where say they couldn't find a job. They couldn't support themselves, they didn't know what they wanted to do in the future. It would be very simple for then to go to you and you would be able to give them guidance. You'd probably be able to-

Jim Carr: I still do that.

Jason Zenger: You still do that. You'd probably be able to lend your connections.

Jim Carr: I do.

Jason Zenger: You provided an education for them before that.

Jim Carr: I did.

Jason Zenger: But there's a lot of kids out there that don't have any of those things.

Jim Carr: They don't.

Jason Zenger: So they nowhere to go to. And so that's where they're vulnerable and they need somebody like Jon who can provide that guidance for them or an organization that can do that.

Jim Carr: Well, I say you parent your kids to a certain age and then when they become adults you mentor them.

Jason Zenger: Right, but some kids don't-

Jim Carr: Don't have that opportunity to be mentored.

Jason Zenger: They just have never had a parent.

Jim Carr: Right.

Jason Zenger: You know what I mean?

Jim Carr: I get it.

Jason Zenger: So like that's where that comes into play.

Jon Klinepeter: Yeah, we talk about in terms of a safety net. Like if something happens in any of our lives, we have some people around us who-

Jim Carr: We're insulated.

Jon Klinepeter: Will be that safety net.

Jim Carr: Yeah, right.

Jon Klinepeter: And these are young adults who don't have that. And they're actually the hope for their next generations in their family as they get these kind of job opportunities. And we see that in manufacturing too, right? Like we partner with Leyden High Schools to try and create jobs for high school students who are going through shop programs so that they can see their own future as hope as well.

Jason Zenger: Yeah, I mean I mentioned to you an organization that I love called GRIP Outreach for Youth. And they have their future steps program where they're helping these kids in high school get that guidance and get that ... Just that person that can help them to make it through high school. But now they're saying, okay, we got them through high school, how do we get them into a job? And so that's where that future steps comes into play. And you're doing that, trying to accomplish that, very much one on one in your company. I think that's a great thing.

Jon Klinepeter: Yeah.

Jim Carr: Yeah, it's a great mission, Jon. And what are the core values of Forrest Bradshaw? Share with us a little bit about that because really at the end of the day, it's really all about your mission, your purpose and your core values. I believe your core values is something that needs to practiced on a daily basis. You hire, fire, and retain employees based on those beliefs. So share with us a little bit about your core values?

Jon Klinepeter: Yeah, I would say our foundational value is integrity.

Jim Carr: Okay.

Jon Klinepeter: And to be honest and candid, in manufacturing, that can feel a bit counter cultural.

Jim Carr: It sure can.

Jon Klinepeter: And there have been moments where I felt a bit crazy in this season. Two months in to me owning the company, we had a lightning strike on our building that took out three of our five machines.

Jim Carr: Oh my God.

Jon Klinepeter: And our computer system that controls everything and does our programming. It was one of those nightmare situations.

Jason Zenger: What do you mean by took them out?

Jon Klinepeter: It sent an electric surge-

Jason Zenger: Like you had to reboot them or-

Jon Klinepeter: No, they were non-working.

Jim Carr: The boards. The boards went out.

Jon Klinepeter: It took us up to a month to get everything back.

Jason Zenger: Yikes.

Jon Klinepeter: Tens of thousands of dollars and so we were working with our insurance company and they were very helpful, which is always great. But the repair guy who was helping us at the time, he came to me and said, "Okay, I'm going to put this bill together for you, what do you want your take to be? Because this is what I do for my people." I said, "No, just whatever it costs, bill us for that." And he said, "Well, at least let me roll the deductible in for your insurance company." So my guys are standing there with me and I-

Jim Carr: That's awful.

Jason Zenger: Even worse-

Jon Klinepeter: Where it's a crossroads, right?

Jason Zenger: Because now you see all our employees are waiting for you to make that decision. That integrity.

Jon Klinepeter: He said integrity. Is he going to live integrity? At a cost, right? Like that was thousands of dollars that could have been in our cash flow.

Jim Carr: Right.

Jon Klinepeter: Had a similar situation. We were buying a machine where there was an opportunity to have one invoice that gets submitted and one that gets re-classed and provides income. Well, I know that there are competitors who are doing things differently. In fact, there's this great entrepreneur thinker out there. His name's [inaudible 00:28:17]. He recently said, "If ethics were profitable, everyone would be doing it, right?" It's very true.

Jon Klinepeter: And so what we've found is ... And what we've really made a foundational belief for us is integrity matters. Even when hard, we will make the right decision. And some days, again just totally candidly, I think I'm crazy and stupid for doing it that way. Because it feels like the game is stacked against us.

Jim Carr: Let's talk about this a little bit. Because what do you mean? Where is this coming from? Because obviously, this means a lot to you.

Jon Klinepeter: Yep.

Jim Carr: So where are you feeling the ickiness of this?

Jason Zenger: Well, Jim, I mean I have a story. This is very common in my business. In the cutting tools-

Jim Carr: But we're not interviewing you, Jason.

Jon Klinepeter: I want to hear Jason's story.

Jim Carr: No we don't. We want to hear your story, Jon.

Jason Zenger: No, this is just very brief.

Jim Carr: Okay, go.

Jason Zenger: And it's very common in our industry. In cutting tools sales where we know that there is potential customers out there that we'll never get their business because we're not willing to pay off the foreman or the machinist or somebody else in order to get the business.

Jim Carr: Oh yeah, you told me this.

Jason Zenger: I mean we, as a company, you talk about purpose. I mean we work for the owner of the company.

Jim Carr: You really do.

Jason Zenger: We don't work for the guy in the shop.

Jon Klinepeter: You don't.

Jason Zenger: If we're going to do work for the guy in the shop is because we want to make him look good to the owner. But we're not going to pay him off in order to get the business because that's lack of integrity. It's not our purpose. But there's a lot of people out there that will do that. You've seen it before. You've talked about it.

Jim Carr: You're sending a signal to your employees that says that's okay. You're green lighting that.

Jason Zenger: Yeah.

Jim Carr: And it just completely erodes your culture.

Jon Klinepeter: You see it a lot in scrap.

Jason Zenger: Yes.

Jim Carr: Yes.

Jon Klinepeter: So we, early on, thanks to some really important guidance, we got involved in TMA. Which has been a lifesaver for me to have some mentoring. To have that resource. But we initially had a scrap dealer they'd used for years where everything was under the table. There was no transparency to it. So we quickly found a new, ethical partner.

Jason Zenger: Our friend, Amy Aaron.

Jon Klinepeter: Amy Aaron, yeah. With United Scrap. And they've just been so great to work with.

Jim Carr: That's who we use too.

Jon Klinepeter: Yeah. But what we've learned is if that's going to be a foundational value it changes who your vendors are. It changes who your customers are sometimes.

Jim Carr: Absolutely changes who your customers are.

Jon Klinepeter: It changes who you hire.

Jim Carr: Yeah.

Jon Klinepeter: It changes all of that. And some days that feels great. And some days it's a ... If I'm transparent about, there are days where it is harder to make those choices.

Jason Zenger: Right, because you know you could have a couple extra thousand dollars in your pocket and that would go a long way.

Jon Klinepeter: Absolutely.

Jason Zenger: But yeah. That's ... You got to live by your values though.

Jon Klinepeter: Yeah. So that's a foundational value for us.

Jim Carr: Thanks for sharing that, Jon. A lot of people would not say that. And I respect you for saying that.

Jon Klinepeter: Thanks.

Jason Zenger: So and you have three more core ... Or four more core values?

Jon Klinepeter: So quality. That's kind of an industry standard right? You don't do precision manufacturing without quality as a value.

Jim Carr: You've got to have quality.

Jon Klinepeter: Because you can't send parts that aren't accurate so quality is important to us. Respect. And that's just ... This is probably governed by my faith to be honest that I ... We just believe that every person has inherent worth and value. And so our employees treat each other-

Jason Zenger: It's the imago dei.

Jon Klinepeter: Yeah. It's like this all made the Creator and in his image and that matters and so we should treat everyone with that sort of dignity and respect.

Jason Zenger: Even you, Jim Carr.

Jim Carr: Even me.

Jon Klinepeter: Especially Jim Carr.

Jim Carr: Yeah, especially me.

Jon Klinepeter: And teamwork is one where we don't mind saying what we don't know. We come together to come up with solutions for our challenges. And then service. We really want to serve our customers. Even our vendors. Like when someone comes in our shop, I want them to leave with that being a bright part of their day. Not a frustrating part. And so with our customers too, we really have tried to, from what it used to be, really tried to engage in new levels of customer service. And what does it mean to know our buyer who's working ... Like I know what's going on in their lives because they matter and I want them to know that. So that level of service.

Jim Carr: And it just adds ... It's part of the relationship that you're building.

Jon Klinepeter: Absolutely.

Jim Carr: And the stickiness as our friend would say.

Jason Zenger: So Jon, part of our mantra that we say here on MakingChips. Part of our intro. We say manufacturing is challenging. So when you got into the CNC machining business, did you think that it was going to challenging? Did you think it was going to be easy? What sort of surprised you about our industry?

Jon Klinepeter: I didn't think it would be easy. I had no idea how challenging it would be.

Jason Zenger: Okay.

Jon Klinepeter: Once a week, I ask myself, "What the hell was I thinking? Like I could be working for someone else who writes me a paycheck every two weeks." So there are plenty of moments where I have had this pause and say, "Okay, I believed in this. I still do. This too shall pass." A lightning strike 61 days into owning the company. That was not ideal. Very hard month after that. When we've had a slow quarter, that's challenging. Cash flow is extremely challenging.

Jason Zenger: It's very.

Jon Klinepeter: When the payables and the receivables are not aligned. We had two customers ... And they're great customers. But they added 15 days to their payables without notification. So we're ... I start making calls. "Hey, you guys have been real consistent."

Jason Zenger: We changed our terms.

Jon Klinepeter: "Oh yeah. Our comptroller changed our terms and we can't-"

Jason Zenger: No, we told you.

Jon Klinepeter: Yeah. "You didn't know?" "No, how would I have known." So those are ... Just some the day to day challenges of it. There are really so many ... It's honestly the hardest thing I've ever done.

Jim Carr: Really?

Jon Klinepeter: I thought that guiding people on their spiritual journey and the pain and hardness, I thought that was challenging. I don't think it can hold-

Jason Zenger: Well, you'll get a little callused and you'll know. And the more that you're in this industry, you'll let things just go right over your head. So yeah, you're taking things a little personally. And you just don't know. It's all new to you, right?

Jon Klinepeter: Right.

Jason Zenger: But I think that you have the right mindset on what ... How you want to run your business because that is what's going to drive everything else, right?

Jon Klinepeter: Right, right.

Jason Zenger: You have your core values. The reason why you went into business. You know what you want to do. All the other stuff is just going to be learned experiences. You know what I mean?

Jon Klinepeter: Yeah.

Jason Zenger: So that's going to come naturally.

Jon Klinepeter: Sure.

Jason Zenger: And through the day to day and the year to year and decade to decade.

Jon Klinepeter: And I resonate with that. And it's certainly gotten better even.

Jason Zenger: Of course it has.

Jon Klinepeter: But there are days ... And maybe this is helpful for some other people out there. I know this podcast has been helpful for me. There are days I just wake up with that sense of fear of what bill is due. What project are getting behind on.

Jason Zenger: I still have the same-

Jim Carr: Guess what Jon, that'll never change.

Jason Zenger: That'll never change.

Jon Klinepeter: And what gets me through those days. Again, my faith is important in that, but my belief in my team.

Jason Zenger: Yeah, that means you care.

Jon Klinepeter: Right. But my belief in my team. My belief that things do work out for the better on the long arc. But there are daily fears and anxieties.

Jim Carr: Yeah, my young sales manager told me once when we were going through a couple of bad issues. He said, "Somebody told me once think about the problem we have now and say is this problem we have today really going to matter in one to three years?"

Jon Klinepeter: That's a great question.

Jim Carr: Well, no, it's not. One to three years. Oh my God. This is going to be likely completely irrelevant. So we'll just get through it. And then we'll see what's at the other-

Jon Klinepeter: That's a great question.

Jim Carr: What's at the other side of this issue. And we're going to definitely learn from this and then we're going to make better decisions when that same issue comes up again.

Jason Zenger: Well, I remember when my company was about 20% the size of what it is now, and we had a customer that was 25% of our business. And I remember they were making a consolidation to like a national agreement, which at the time ... We have the capabilities now, but at the time we didn't have those capabilities. And that business was going bye bye. And I was like, "I don't know what tomorrow's going to look like if we lose this business." And now here we are 10, 15 years later and we're five times the size.

Jim Carr: Because you pushed through.

Jason Zenger: And we don't have them as a client and we pushed through and we just kind of gritted it out. And we knew what our purpose was and we made it through that transition.

Jon Klinepeter: And I think the resilience that to just every day get back up and go back it it. That's key.

Jason Zenger: Yeah, it's that grittiness. That grittiness. So what's in store for you for the future?

Jon Klinepeter: Well, we want to grow.

Jason Zenger: Okay.

Jon Klinepeter: Again, if the purpose is to create living wage jobs, we want to create more of them. So the hope is to continue to grow. We're ... December will be our best month yet which is encouraging.

Jason Zenger: Great, congratulations.

Jon Klinepeter: And just got a machine today which is-

Jason Zenger: Awesome.

Jim Carr: Yeah, that's really-

Jon Klinepeter: We got a VF2. A Haas. And actually in the history of the company, it's the first brand new machine.

Jason Zenger: Nice.

Jon Klinepeter: So it's going to take us into some new opportunities.

Jim Carr: Good for you.

Jon Klinepeter: So trying to build for growth. Invest for growth. And then to continue to create hope for manufacturing workers and that's where it all at. So growth. Want to grow, grow, grow.

Jason Zenger: Awesome.

Jim Carr: So Jon. It's been a pleasure to meet you and hear your story. And I'm sure it's resonating with a lot of manufacturing leaders out there in this big beautiful country of ours. But what we normally do at the end of an episode is ask our guest what advice would you give to any aspiring manufacturing leaders who are thinking about starting or buying a business in this industry?

Jon Klinepeter: Wow, that's a big question.

Jim Carr: That's a big question. And take a deep breath, think about it and give me three to five bullets.

Jon Klinepeter: Know who you are apart from that. Because if that defines you, you'll have even harder days. Keep your values at the center of everything you do and choose. One of the unique opportunities I had in being a pastor for 22 years was I got to see people in their final moments of life. It just kind of comes with the job. You're there with the family-

Jason Zenger: You get the phone call. You got to go to the hospital.

Jon Klinepeter: Yeah, when someone's passing on to the next thing. And that is a profound perspective giver.

Jim Carr: You mean when people are transitioning?

Jon Klinepeter: Right.

Jim Carr: Okay.

Jon Klinepeter: And what matters to them? It's not all the things. It's not working harder. It's those four to six people who are around them. And what I would say to anyone in any job, but specifically for manufacturing, keep the end of life priorities front and center to make sure you're making those choices every day that help that ending go how you hope. And that's ... Again, living out those values and not destroying your family in the pursuit of a great company, I think, is a worthwhile endeavor.

Jim Carr: A lot of people have.

Jason Zenger: Yeah, that's great. I mean you got to look at ... One of the best pieces of advice I ever heard was like look at what your funeral would look like and take some steps backwards. And I think it's easy for us to ... As my wife has called me to be as owners of manufacturing companies or just owners of businesses, be intense. Especially about our work. And I'm trying to be less intense so that when it comes to that time, I'm not just defined by my business.

Jon Klinepeter: That's right. And if I could, too, just thank you. Both of you.

Jason Zenger: You're welcome.

Jon Klinepeter: There are a lot of us out there where the podcast ... Like when we're kind of at our wits' end. It just ... It reminds us we're not alone. Your commitment. Your brand promise to inspire and equip absolutely happens. I've had so many inspirational moments and equipping moments from the two of you and your guests. So just keep this up. It's really important.

Jim Carr: Thank you.

Jon Klinepeter: To not just young manufacturers out there, but I would guess everyone's learning something from this so thank you.

Jim Carr: Sure, you're welcome.

Jason Zenger: Thank you. We appreciate that.

Jim Carr: Yeah.

Jason Zenger: I mean that's our purpose in MakingChips and that's what drives us so we appreciate you giving us that encouragement.

Jim Carr: And sometimes it's tough.

Jon Klinepeter: I would imagine.

Jim Carr: It is. Sometimes it's really tough.

Jason Zenger: Like 2019.

Jim Carr: Yeah, exactly.

Jason Zenger: It was a tough year for us.

Jim Carr: It has been.

Jason Zenger: But we need to look back and say what's our purpose and really focus on that. So thank you.

Jon Klinepeter: Absolutely.

Jim Carr: Wow, that was good.

Jason Zenger: That was good. I got some goosebumps, Jim.

Jim Carr: Did you? Good.

Jason Zenger: You know you always say-

Jon Klinepeter: Goosebump moment.

Jason Zenger: Like when we ... During a MakingChips episode, we have to look for the goosebump moment and I think Jon helped us to deliver that goosebump moment.

Jim Carr: Absolutely. Well, it's ... He had some great thought to think about. And I'm glad we had him on today.

Jason Zenger: Yeah.

Jim Carr: As a matter of fact. So what'd you learn? What's your takeaways?

Jason Zenger: I've been thinking about this lately and really to go back and define our purpose. And define our kind of ... Another word for that would be like our vision and our mission, more specifically our mission. And I really need to do that. And I had already thought about-

Jim Carr: Are you talking about Zenger's Black? You talking about MakingChips or both?

Jason Zenger: Yeah. No, I think we got it nailed down for MakingChips. I'm very happy with our purpose there. But I'm talking about Zenger's and Black and really saying what's our purpose? And sitting down with people that want to participate in crafting that. Because we've got our values. And I just don't think that we ... We need our rallying cry. I think I have it in my head. But I also want to ... I want to get it for my team and make sure that they're on the same page with me. Because I ... Like with the core values, we had an episode about this. We developed that as a team. I don't want to have our purpose developed by just me. It needs to be developed by the team as well. So what about you?

Jim Carr: I've just learned, I think, that just by meeting a lot of great people on this show and showcasing everyone's diversity in a way that they overcome issues and handle problems in their life, that it's helped me personally and professionally both to mitigate all those problems. I mean, it's been ... Yeah, it's been a tough year. I got really sick this year. And it was a culmination of a lot of things that I wasn't doing right. Stress was one big thing. And I just ... I don't get that worried about stuff anymore. I can't let it bother me anymore. Because at the end of the day, I can only do the best I can do. I'm only one person, right? I'm only one person. So I just do the best I can do. And as long as I know I'm going that then c'est la vie.

Jason Zenger: Yeah, you have chilled out a little bit so that's good.

Jim Carr: I have, I have. So that's it. Because at the end of the day, if you're not MakingChips.

Jason Zenger: You're not creating living wage jobs.

Jim Carr: Absolutely. Bam. Hey, Jason, Carr Machine & Tool is really starting to integrate into top tier aerospace and defense customers. I have to tell you, it has been really pushing us out of our comfort zone. And I've got so many questions. You know Mark Gallagher from Xometry. He's a friend of mine. I've talked to him a few times in the past. I know he just got a new role at Xometry because they're trying to penetrate that industry too. I'm going to give him a quick call.

Mark Gallagher: Hello?

Jim Carr: Hey, Mark, it's Jim from MakingChips. How are you today?

Mark Gallagher: Hey, Jim. I'm good. How about you?

Jim Carr: I'm great. Thank you. I'm glad you answered the phone. Because I just want to let you be privy to the fact that you are live on MakingChips right now so I just have some questions from you. I understand from Erin that you took a new role at Xometry and you're now out in California. Is that right?

Mark Gallagher: That's right.

Jim Carr: Yeah. And can you share with me and the metal working nation a little bit about what that role is about and the objective of you moving to California was for?

Mark Gallagher: Yeah, absolutely. So my new title is Senior Manager of Operations at Xometry. And the focus of opening a west coast office is just to better support the aerospace and defense customers that call the west coast their home. And there are definitely quite a few of them. So we just wanted to be local.

Jim Carr: I totally get it too. Carr is really trying to penetrate that industry as well. We've found it's a really good fit for what we do. Obviously, Xometry feels as though they have some partner companies that they can off shoot that work too as well. But man, I have to tell you, it's been tasking some of the requirements. Do you have a couple of minutes? Maybe we can go over some of these things. I just want to define them and make sure that maybe I can learn something from you and maybe you can learn something from me as well.

Jim Carr: So first and foremost, Mark, let's talk about ITAR. And ITAR, you can be ITAR compliant. And then you can be ITAR registered, right?

Mark Gallagher: Yes.

Jim Carr: Okay, so Xometry, I'm sure is ITAR registered. You have that registration number from the federal government that says that you meet all the criteria for ITAR?

Mark Gallagher: Yes, we do.

Jim Carr: So Carr is ITAR compliant. We have not been asked yet to fill out a ... Or go online and become registered yet. What would be the impetus for us to do that in advance of that?

Mark Gallagher: Yeah, so the federal agency that completes the ITAR registration is the DDTC and we've found it very, very useful. Being ITAR compliant, to start with, does open a lot of opportunities for you. But being ITAR registered just really simplifies things when you're going through audits with a lot of these customers. And a lot of the time, ITAR registration is one of the most basic barriers between you getting work with some of these customers and not getting work with some of these customers. So I would definitely always recommend shops that work with a lot of aerospace and defense customers to become ITAR registered for sure.

Jim Carr: Right. And let's just define that when you do register, they don't come out and do a physical audit at your particular company?

Mark Gallagher: No. I was mostly referring to like customer audits or customers when they're onboarding you as a supplier to them. If you have that ITAR registration number, that makes things a lot simpler in many cases.

Jim Carr: Now that we're talking about ITAR, let's talk a little bit about some of the requirements of ITAR like you have to have secure data transfer. Like you can't just send a print from the customer to the vendor or the vendor to the outsourcing company. It has to be either a password protected PDF or else you have to download it off of a customer site, right?

Mark Gallagher: Correct. It does make some of your communication with the customer a little more complicated. So at Xometry, we have to store all of the ITAR registered files or all the files that would fall under ITAR compliance on secure servers. And then definitely when you're communicating with customers, you can't just be emailing PDFs back and forth.

Jim Carr: No way.

Mark Gallagher: A lot of the customers we're seeing in response to this, they're basically developing their own customer portals where you communicate with them through those portals. If you need to mark up a drawing or give them feedback on something as your manufacturing part, they'll have a portal. But otherwise, yeah. You have to ... Password protected drawings or photos and we're also seeing a lot of customers with documentation delivery, they're going to electronic formats that you have to send over secure servers as well.

Jim Carr: Yeah, I found that to be the biggest thing with regards to ITAR. Is there anything else?

Mark Gallagher: Obviously there are staffing considerations with who you can have working in your shop and who you can have access seeing the ITAR, the data that falls under ITAR registration. It's really-

Jim Carr: Right, you have to ... When people come into our facility, they have to sign in. We have an iPad out in our lobby and they have to sign off saying that they're not a foreign national. And if they are ... And then everyone has to be tagged that they're a U.S. citizen and they have to sign a document.

Mark Gallagher: Absolutely. It's the same deal when I go and visit customers that are dealing with export controlled IP. I've had to take my passport different places. You go through a lot of vetting to visit some of the customers.

Jim Carr: I've been to companies already that have ... I've had to give them my cell phone even to meet with procurement. I couldn't even go into their offices. I'd have to even do like a 10 minute safety test.

Mark Gallagher: They generally don't like when you ask to join their Wifi in those situations.

Jim Carr: No, they definitely don't. Another thing that we're really learning about too at Carr is DFARS. DFARS is about the material, right?

Mark Gallagher: Yeah, absolutely. And generally, it's referring to metallics. But at Xometry, we kind of open up the umbrella a little bit more. If something requires ITAR registration, it doesn't necessarily mean you have to use DFARS compliance. You really just have to look at the quality clause flow downs that come with your POs, but definitely if you're working with aerospace and defense companies, it's much more common that they'll have restrictions on the origin of the material you're working with.

Jim Carr: Right, it has to come from qualifying countries.

Mark Gallagher: Yes, exactly. And that's what the DFARS is saying. Of the metal producing countries, I would say the two to watch out for are China and Russia.

Jim Carr: Yeah, I totally agree. It's amazing how much of the materials that we get from our vendors that are from those particular countries, unless you tell them it has to be DFARS.

Mark Gallagher: Yeah, they're absolutely huge producers of metallic raw materials. And with some ... It's definitely something you have to be really careful about with materials suppliers. Because a lot of suppliers now are essentially distributors and it's sometimes a little bit opaque where the material is actually coming from. They might tell you it meets certain AMS or STM specs or something like that.

Jim Carr: Right.

Mark Gallagher: But they might not tell you the origin of the materials. So if you have a contract that flows down and if they've said DFARS compliant materials is required. And you see a supplier that has what you're looking for, doesn't necessarily state it's domestic material or it's made in Europe or in a DFARS compliant company, definitely worth giving that supplier a car or shooting them an email and just making sure because-

Jim Carr: Oh man, I know.

Mark Gallagher: We've definitely run into situations where you order a high volume worth of material and it shows up on your dock and it's not usable.

Jim Carr: Oh I know. If the print says Titanium TI Allow 6AL/4V [inaudible 00:49:25] AMS6930. It better darn well be that. And you better have a materials cert that says that's exactly what it is. And then a certificate of conformance to go along saying that that's exactly what you bought.

Mark Gallagher: Yeah. There's tiers of work for these aerospace and defense customers, right? When ... If they're just prototyping something and you're in the quoting stage with them. And you say, "I can make this part for you, but that AMS spec you have is a plate spec and I'd really like to make this from [inaudible 00:49:54]." Sometimes in the prototyping stages, and if you bring it up during the quoting process, they'll be okay with it. But if you're moving to production or something that's a flight component or fracture critical or something like that for one of these aerospace and defense companies, they're generally not going to waive the print requirements.

Mark Gallagher: And you 100% better make sure that your materials cert lists the AMS spec or the ASTM spec. If there's a specific temper. This is something you have to be careful about.

Jim Carr: You really do.

Mark Gallagher: Sometimes-

Jim Carr: Once you've been stung, you're very cognizant of it the next time.

Mark Gallagher: Yeah. Absolutely and one thing I look out for is sometimes engineers will put a specification on a print because it's what their engineering guidelines state and sometimes it's just not physically possible. Some tempers only come in certain thicknesses.

Jim Carr: Right.

Mark Gallagher: So you have to watch out for discrepancies between what temper you can actually get the materials stock in and those conversations are much, much easier to have-

Jim Carr: In advance.

Mark Gallagher: In the quoting stage then we've got a part in a machine and you're trying to convince them why something's okay.

Jim Carr: I could not agree more. All right. It's all about good communication.

Mark Gallagher: Absolutely.

Jim Carr: I could not agree with you more. So with that, what we're learning with these top tiered customers is we really got to read all the terms and conditions that the purchase order says. Like supplemental supplier quality requirement clauses. First article inspection reports. Special processes certifications. If we're doing a part that has to go out for a chem film or chemical conversation or electroless nickel. They want a special process certification that says it's been to this or heat treating, they want a certification that it says it has actually been tested at 46 to 52 Rockwell C. And then, of course, the materials certifications as well. Are you running into a lot of your customers that are telling you that you've got to use their approved special process vendors?

Mark Gallagher: Absolutely.

Jim Carr: Yeah.

Mark Gallagher: And I'm sure if there's any Xometry partners listening, they've seen us flowing down those requirements as well. We're definitely, when we were venturing into the working with these type of customers, there's a lot more overhead than just working with customers that are asking for basic prototyping parts for you. And it's definitely worth investing some time to understand all of the kind of nuance of that particular customer's requirements. Especially if you want to develop them into a very large customer for your shop. The companies don't always make it very easy to parse what they're looking for.

Jim Carr: I agree.

Mark Gallagher: But it's definitely worth it. And we see very often where customers have put together a list of approved suppliers for different processes that they've audited. They've sent supplier quality engineers out to. And as a result, they want you to use them. And it's a little bit tedious. Sometimes you have to develop some new relationships with partners that you ... Finishers or heat treaters or material suppliers that you wouldn't normally use, but if you want to work with that customer, sometimes it's what you have to do and you have to make sure that that flows down onto your travelers so that if you have somebody handling outsourcing or finishing, they know that it has to go through a certain supplier as well.

Jim Carr: Well, Mark, I want to be respectful of your time. I appreciate you picking up the call. And giving me a little bit better insight. Looks like we're trending in the right direction. And hopefully, maybe Carr Machine can be a premiere partner for you in the future considering that we're going down the same avenue as well. And anybody else that's listening to this show, maybe if they're working within these parameters, maybe that'd be a good fit for somebody in the future as well. So reach out to our friends at Xometry. Mark will be tagged in this particular episode through LinkedIn. And I'm sure he could guide you in the right direction. So Mark, thanks again, for picking up the call and talking to me and being live on MakingChips and we appreciate your insight.

Mark Gallagher: Thank you very much, Jim.

Speaker 5: Thanks for listening to the MakingChips podcast. Jim and Jason knew that metal working nation, the community of world class makers needed to commit to a new way of leading to stay ahead of the competition. So MakingChips was created to fill that void. To give you advice from other manufacturing leaders who can push you to take action. Your manufacturing challenges have a solution. And many of them are at makingchips.com.

Brandon: I know you only like to talk about yourself, but you're supposed to ask me about what's going on with me.

Jim Carr: Oh that's right. I totally got lost there. Sorry, Brandon.

Brandon: You got lost in yourself.

Jason Zenger: He gets lost in himself quite often.

Jim Carr: That's why I need to have a show structure.

×

Subscribe to the MakingChips Podcast!