Zero Setup Time: Inside Norbert Kempf CNC-Technik GmbH’s 23-Machine Automated Shop | Ep. 49

[0:00] Hey, Nick, what’s up, buddy? Can I tell you about a dream I had last night? I want to hear it. It was a doozy I was driving from Switzerland through France to Germany with this guy from Finland and we went into the shop and Leonardo da Vinci was in there and This shop had no standalone machines 309 pallets doing 1,600 pallet transports every single day. A 5,500 capacity central tool system with five automated Finuc robots transporting up to 800 tools daily and you know what? Not one crash That’s a dream that that can’t be real.

I saw it with my eyes Well, if you did we should tell the story The Norbert Kempf CNC Technik company in St. Ingebert in Germany shows what can be achieved in mid-sized companies with innovative force and know-how. In 2019 CNC 4.0 production will be expanded with an additional flexible manufacturing system and a new production hall Complex components and assemblies require an equally complex and reliable production process The keys to success are reliable reproducible processes and in particular zero defect tool management since the installation of the first flexible manufacturing system in 2014 the number of employees has remained constant at 100 while productivity has increased In early 2014 our first flexible manufacturing system with automated tool supply was put into operation This has significantly increased our productivity The success was so overwhelming that we considerably expanded our capacity yet again with a further system in late 2018 we are absolutely convinced of our manufacturing and planning concept The expansion of our manufacturing system has substantially increased our flexibility 300 machine pallets and 200 raw material pallets are kept at hand in the high bay racks Each machining center even in different production halls can be automatically equipped with 5,000 cutting tools from central tool storage facilities This means that every component can be produced in a single production hall and can be produced on any machining center With our production concept we’ve completely automated the entire retooling process This enables us to offer customers long-size independent prices No matter whether a quantity of 10 or 1,000 is ordered the unit price will always be the same This is absolutely unique in the market Each order generates a process plan From FMEA analysis and the production control plan down to tool construction and CNC programming each step is planned ahead Process reliability has highest priority All order specifications are recorded in the ERP system and transferred to production planning The system performs a full resource check Required tools are reported to tool assembly Each tool receives an RFID chip with an ID number for individual identification Then it is checked and measured Tools are stored in the central tool storages for later availability Just in time it is automatically delivered to the respective machining center The machine pallets and raw materials are stored in one of the high bay racks The retrieval system transports them to the loading stations and thus feeds them into the production process The automated supply of tools and clumping devices does not only enable lot-size independent part prices Increased manufacturing flexibility also reduces lead times which in turn ensures predictable delivery Our intention was not only to talk about Industry 4.0 but to implement it and to benefit from it Today we can say that we’ve succeeded We’ve not only automated our processes, we can also monitor them completely For example the clamping of components with digital screwdrivers is checked and controlled via wireless access Another step towards integrated cross-divisional communication is the digital acquisition of process-inherent data The quality inspection of components is supported by time-saving digital information from the system The production system generates a barcode with all production information During scanning this data is transferred to the inspection order This ensures complete traceability The foundations of our corporate philosophy remain unchanged Customer-oriented solutions, perfect planning, safe reproducible processes and lot-size independent prices Talent is scarce, experience even more so, driving up costs and sleepless nights You may even think to yourself, can I do this? But this new era brings new technology and a different perspective on your operations What you will hear will turn on a lightbulb in your mind so you can turn out the lights in your shop Get ready to sleep soundly while your shop never stops Get ready for Making Chips Lights Out With your hosts Nick Goelner, Erik Nekic and David Buick Erik, you’ve convinced me it wasn’t a dream, it’s real And we are in the middle of Europe right now, driving for way too many hours together in a car With an amazing group of people You introduced us to Risto Niemi Yes, correct Yes, from Fastoms And of course we’re spending time with our good buddy Janik Muller from Swiss Modular Hello, thank you for having me Yeah, I’m super happy to have this mix here And we’ll introduce our special guest in a second But first Erik, how was it with me for four hours in a car? I think that we should probably swing by Geneva, Switzerland on our way back to the hotel and have a conversation Torture then, I would assume Okay, so Risto, please introduce yourself And then I will have you introduce our special guest today Who gave us a tour of this magical Disneyland of machining But go ahead, introduce yourself first My name is Risto Niemi, I work for Fastoms I’ve been there now for over 28 years now Being part of the global solution sales for over the many, many years now And going from customer to customer and thinking about how I can help them And what added value the Fastoms could help them Yeah, and we spent, what, four and a half hours, Erik, talking about just that And philosophy and how you help customers And sometimes how it’s difficult to help customers Because they get in their own way and they make it difficult to help themselves But what was your thoughts on the drive? No, I mean, I would agree with you 100% And, you know, being kind of a sales guru It was really interesting to hear how Risto overcomes a lot of those common objections When it comes to automating, like making process improvements and things like that So it was a phenomenal drive, learned a ton Thank you, Erik Okay, Risto, now you are the reason why we’re here You got a yes from a special guest Maybe a superhero or the Leonardo da Vinci of machining Santa Claus It’s so amazing, it almost doesn’t feel real Like what Erik was talking about with the dream But can you introduce us to our guest today? Okay, today we are visiting here the Norberg Kempf CNC Technik GmbH in Sankt Imperkt I’ve been working, I have had opportunity And the pleasure to work with Stefan for many, many years More than 20 years now And seeing the developing displays from where Actually, or being a part of that What Stefan has been able to build here The flexible chop shop Which is like outstanding and very, very unique in the entire world Yeah, yeah, absolutely Welcome, Stefan Yeah, hello, my name is Stefan Kempf I’m the owner and I’m the managing director of Norberg Kempf CNC Technik GmbH And I’m in the company since 1990 My father founded the company in 1970 And over the years since 1990 I developed the company to the stage we see now We have a lot of automation here With our flexible manufacturing systems Especially with our tool management Yes, nice to have you here today Yeah, it’s incredible I mean, it’s impossible for you to tell your story in 10 minutes Because there’s so many amazing pieces to it We’re going to do our best to tell it in 45 minutes to an hour or two But Eric, you also have a guest to introduce us to one more Or at least provide more of an introduction to Janik here as well Yeah, Janik Mueller shares a love of work holding much like I do And he works with our great partner Swiss Modular Triag out of Switzerland We asked Janik to join us today and to meet Risto and Janik So we had a wonderful drive up here Really, I really appreciate that you bring me here So maybe I do a quick introduction of myself I’m Janik Mueller I’m the CEO of Swiss Modular What we are doing, we’re doing a modular flexible work holding system And I work a lot with philosophy I don’t want to sell just a vice I want to sell a vice, a philosophy which brings the customer further in his process Gives a higher output just with the vice on a CNC machine So I’ve seen a lot today already With this company and you’re doing a great job If I take a look on the work holding side So yeah, I’m happy to be involved in this talk And yeah, ready for the next 40 minutes Yeah, no, thanks for tagging along It’s great to have you with us There’s just so much knowledge around the table I always feel like I am the dumbest guy in the room Which means I know we have really good guests So with that, to Nick’s point We don’t have a lot of time And this is a phenomenal story So I know our listeners are going to want to hear as much as possible So Stefan, I have to ask you We know from your awesome presentation That you joined the company in 1990 We know in 1988 this company bought their first machine And that first machine had a pallet changer attached to it Which I think is amazing Usually you don’t see that, right? I’d love to hear your story And then walk us through kind of the milling department What did it look like in 1990? Yes, as I came in the company in 1990 We had only this one machining center In two-shift operation And after nine years in 1999 We had ten machining centers Within three-shift operation At this time I had to see That the growing we made in the past That was not so successful I would like to have That’s why I thought about A further automation of our company And we need some preconditions for this automation And the first thing was That we bought a two-dimensional system That was in the year 2000 Then we looked That we have the same kind of machine brands and types Same kind of machines We call it monoculture of machines Monoculture, I love that So all the machines are standard And then you have a tool data management system as well So you can standardize your tooling Eliminate the variability that Like as you were saying It’s a precondition for a shop like what we just experienced And as a result of this monoculture of machines We had of course the standardized tool And machine palette interfaces Tool and machine palette interfaces And we looked that we are able to produce Our own machine palettes Because now we have over 300 machine palettes in the house It was on one hand It was a question of the cost But also a question of availability And now we produce machine palettes For customers all over the world So did you find it difficult To get machine palettes from The companies that were supplying Either the machines or the automation And just decided We have to be able to build these ourselves Yes of course We had the delivery time That was too long to get some palettes And the costs So did you end up reverse engineering the first one Taking the first palette And making drawings and reverse engineering it So that you could make it yourself Or were you able to make it The first time you made it No I make the engineering by our own Yeah so you reverse engineered it yourself And then started making them Yes And these are not always very simple to make A palette No of course that’s difficult And you need a high covericity For this machine palettes Because in our company We have 23 machines Connected with this machine palette And sometimes one machine palette Is in the MC number one And sometimes MC number 20 And that means That you need Reproducibility With this part of the machine tool Have you guys heard this We’re giving away a machine Like an actual CNC machine MakingChips with DN Solutions And KineMetal partnered up To put a fully tooled up SVM4100 in someone’s shop Totally free to enter Go to makingchips.com And put your entry in At IMTS We got a little game for you So come find the MakingChips Recording Studio We’re in the South Hall In the Hennig booth And we’re going to send you A little bit of a scavenger hunt Working with our partners That’s going to help you stack up Even more entries into the giveaway We’ll be announcing the winner From the main stage at IMTS Friday afternoon So go to makingchips.com And enter And the one thing that came To my mind While we were walking Your factory floor Was a strong vision Something like what you’ve built here You’re not just piece mailing That together over a period of time Oh, it would be cool to add that You know what would be neat Is if we put one of those on here I just picked up Such a strong vision Could you walk us through planning in your brain over a few years? The weaker was, I mentioned already, it was the growing was not like that I would have because as more machines we get, as more the utilization of each machine went down and that was the weaker. That was frustrating for you.

[17:09] Yes, and because at this time I saw every time when I came to the company, I saw the same errors every day and I was so frustrated about this and that’s why I developed this vision for the future. I think it’s important to say that, like to our audience right now, that’s something I think most shops experience. When you’re a one-person machine shop, maybe in your garage when you’re just getting started, you can keep that machine running a lot more than once you start to add two, three, four, five, ten machines and you have other employees that maybe aren’t you and they don’t have what’s in your head and then you’re saying, okay, why is my utilization down so much more as I’m growing? I should be getting stronger. I should be getting better. I should be knowing more but yet my machine utilization goes down. Yes, that’s true. That’s exactly the point. And Risto, let me ask you because I feel like this is an area where you’re always trying to guide your customers and just the industry in general toward it doesn’t have to be this way. No, but on the other hand, I understand that’s quite logical when you have a machine shop and you have the new orders coming, new contracts, you need to do something. What is the easiest thing to do is to buy a new machine. You can buy your machines. That’s not the problem.

[18:29] Those are available. Then you need to start to think how I get the new skilled labor to use the machines and that goes on and on and on. At the same time, the other people, when you are in the same company, when you are thinking about how to develop, you don’t have the, typically you don’t have the power for that because you are facing the daily issues so much. You are working with the details there, how I can get that part in the right accuracy, where is my raw material which is missing. At the same time, you would need to think in the big picture with the view from 30,000 feet that what I should do. That’s what Stefan had been able to do to stop that bad karma, so to say, and move on. Yeah, and I want to get into your vision and what it looked like when you first had the vision for what we’re in today. But before we do that, I want to talk to Janik for a second because we see this all the time from a workholding perspective where as your company scales and as you do more parts or you do a different mix of parts, you end up using less of the machine, not just in terms of time, but in terms of the actual space inside the machine. Maybe you could speak to that a little bit.

[19:46] What are your thoughts on that because I know you have some. Yeah, our philosophy is use the space. So our new marketing sentence is XYZ, use it. So when you’re buying a machine, a CNC, for example, a four-axis horizontal milling machine, you’re buying the full envelope. So use the full envelope, use the full Y envelope, build up from the table as high as you can and put on as many parts as you can that the spindle runs because we know at this table and probably, yes, our audience also know as long as the spindle runs, we make money or customers making money. You know, someone should start a podcast that ends every episode if you’re not making chips, you’re not making money. And folks, that was our first shameless making chips plug of the episode. Wait, in a few moments, we’ll have a by the numbers one for you. So now back to you, Stefan. So you have this vision because you’re frustrated with the utilization going down as you invest in more machines. But one thing I think is brilliant about you, you know, my brother, Noah, our president, he says all the time, always make the best long-term decision. If you always make the best long-term decision, then the longer time goes on, you’ll have a better result.

[21:19] And that is what you see in this company. You didn’t always say, okay, what’s going to be the best decision for next week? But what’s going to be the best decision for two, three, four years from now? So describe your vision when you were first thinking what you want your shop to be like, because when you see it today, it’s really remarkable. And if you had only a short-term thinking, we would never see this. No, no. It was always a long time thinking for this vision, of course. It’s not only years, maybe a decade for this. I mentioned already that we need some time for the preparation for the automation of the company, and that took three years. That shows that’s not a short-time decision. And then after these three years, we bought our first flexible manufacturing system and made some first experiences. Yes, with only one machining center and 12 machine pallets, one loading station, very small, in the corner of our hall. But at this point, it was already a vision for the future that we would like to extend the system. And we did it over the whole length of the hall, 36 meters.

[22:40] And then we had already 96 machine pallets inside, six machining centers connected, four loading stations. What was really important at this time or before was to create the surrounding processes from the company for such a production, for such a production philosophy. It’s like Christo said, it’s not done if you buy a machining center, a FMS system. You have to create your processes and your company for your new philosophy. And then you get really good results. That’s awesome. You know, when we were on the tour, you had mentioned that the central tooling system really is one of the most important pieces of the puzzle. And I’m just going to try to walk you through it. It is the biggest CTS system I’ve ever seen in my life. There are five Finuc robots feeding 23 horizontal machine tools. They’re all connected, but they’re not just like waiting for a cycle to be done and then going and swapping out that tool. These robots are using the FASTM software to plan ahead and they’re in a constant state of motion, organizing and reorganizing tools so that when the next job, the next cycle comes up, that tool is already preloaded, ready to go.

[24:02] And another thing about this CTS system that was fascinating was it’s connected to like a tool presetter. And the system is set up where if there’s any variance in the tooling, the tool diameter, it doesn’t even allow the system to start. So a lot of times when we hear people object to these mass scale systems, like, well, we wait and see what happens to your quality. You know, it’s like, if you even tighten a vice at the wrong torque, this system will not start. So the throughput on a system like this must be absolutely amazing. AI is everywhere right now and it’s going to be all over. But here’s the real question. How do you turn buzzwords into actual manufacturing outcome? That’s exactly what the IMTS Industrial AI Conference is built for. On Wednesday, September 16th, head to the South Building at IMTS for a one day practitioner focused program on reality based AI for the factory floor. This isn’t vague futurism or jargon soup. It’s about understanding where AI really fits in manufacturing from predictive maintenance and quality to edge versus cloud, small models, LLMs, and how to move from problem to purpose to process. If you’re trying to figure out what AI can do inside your shop, this is the room you want to be in.

[25:23] Learn more at the link in the show notes or head over to imts.com for more info. Do you want to talk a little bit about your philosophy, your manufacturing philosophy and what goes into taking a vision like what you’ve described and what we saw here today? What goes into taking that vision and just sticking to it? And I’m curious because while you’re building it long term, the phone’s ringing, customers need orders, customers want quotes, and to Nick’s earlier point, I think a lot of shop owners, they step outside the vision to just take the quick job. Yeah, what if a customer says, well, what if I give you a quantity of a thousand instead of a quantity of a hundred? How does that change my price? Yes, that’s a result of our lot size independent production costs. We don’t have any setup time in our system. All the set setup time is prepared from the system. All tools are delivered from the robots to the machining centers. The tool data management, like the tool length, diameter, and tool life is automatically written in the offset from the machining center. So you’re saying you don’t have any change in your price to your customer if it’s a hundred or a thousand? Yes, that’s true. We don’t have any setup time and that means we don’t have waiting time for the machine.

[26:52] The machine is still in production. During this setup, the machine is running and that’s why we don’t have this lot size independent pricing. So all your setup is, it’s all external to the machine happening outside of the machine because the machine is running, not just one machine, but 23 machines are running basically non-stop, almost 24 hours a day? Yes. In free shift operation, our utilization is over 90% every day and despite this small lot sizes and small annual quantities, we have this utilization and that shows that our processes are very stable, reproducible, and sure. That’s amazing. So let’s talk about your relationship with Risto for a second and how this all developed because you had a vision, but then Risto comes in here and he has a vision for how you should achieve it and did you always agree? Oh, not in every point in the beginning. No, it was always a good discussion about the potential solution we have or found in the future and it was always good to the working boss. Even though it’s not complete agreement, it’s good friction, healthy friction. It’s good to challenge and I have to say that I have got it more than I have given.

[28:17] Yeah, that’s awesome. I have got it from Stefan more what I have been learned, but that’s always as well my motto, the challenge myself. If customer is asking something, make even little resistance that challenging them and trying to find the true needs and true targets what they are. Otherwise, if you are just saying what customer asks, you are not really like digging enough deep to find out what is actually is the right way to do it. Yeah, and it’s like that with Janik and our company. We work very closely together for, I don’t know, 25 years, maybe something like this and there’s times where we kind of debate a little bit on how should we do this or how should we do that? And then there’s areas where like maybe Hennig is strong in one area or Swiss Modular is strong in another area and that coming together and debating and working towards well, here’s why we do it this way. It just makes you stronger. I don’t know if that’s how you feel Janik, but… No, that’s part of the relationship what a good relationship makes. Because if you are debating or if there are two options and you choose number one and I choose number two, we find a way to make one option. We find a way to make you agree that option number one was the right decision. Option number 1.5. But I think that blended option when we were talking about… I mean, Erik, you were talking about this tool system here and maybe the most interesting part about it is that it’s connected between two different buildings. You kind of conveniently left that part out, but there’s a freaking bridge that connects one… How many machines are in one building versus the other? Oh, we have eight there and 13 there.

[30:04] See, obviously you are close together. Eight in one building, 13 in the other, and it’s connected by… But the same tools can go back and forth because there’s a robot on a railroad working across two buildings. It’s unbelievable. Every machine is able to get every tool from the central tool storage. And that means that every machine is able to produce every part. And that’s the maximum of flexibility. With this philosophy, you can absolutely balance your capacity in the company. You have no bottleneck on one machine. You can produce the parts on every machine you want. And that’s the big advantage here. So, Risto, why is it a bridge instead of a tunnel? Bridge looks nicer. No, really. This is one of their debates. Should it be a tunnel or a bridge? Not a tunnel. It’s the bridge. I think that it just sounded easier for the service, for the maintenance, for the remaining as well, that we actually wanted to have the more tooling capacity in the second hall as well. So it just felt technically more convenient to build. But I think getting back there, the flexibility and those, if you think about that, now there are 21 machines connected in that tooling system.

[31:27] And in a conventional machine shop, the owner or production manager is thinking about, OK, next week, I need to complete 100 different orders. And you would have 21 machine tools there in the shop floor. And then somebody is starting to think that what work requires how many NC minutes? What work goes into which machine? And trying to make that even. It never goes even. One machine might go down or something is missing. The scenario changes right away. So it’s impossible to plan manually that in a conventional machine shop it works like that. And because you still want to do all the jobs, you need to have a lot, a lot over capacity to do your jobs. Not here. He needs to know how many machines I have next week available. I release so many orders. And then the system automatically balances. Any work can go to any machine tool at any time because the cutting tools are going there as well. And I think one important fact that we’re leaving out about the flexibility of your vision and your manufacturing philosophy is, again, we’re looking at a table of parts. And there are parts that would fit in the hand of a small child.

[32:42] And then there are parts that Nick can’t even pick up. I can pick them up. But Nick is not strong enough. But they are, I mean, really tiny parts to big parts. They will be made in any of those 23 machines, whichever one’s available. Doesn’t matter. Yes, that’s true. When we have such small parts which fits in a small hand. In the hand of Nick. Yeah. Then we have maybe 100 parts on one tombstone. Yeah. On one fixture, 100 parts. And maybe sometimes you have three zero points for one part. That means you have also to manage 300 zero parts for this complete fixture. But this is also a philosophy in our company to use the whole workspace which is available in the machine. Not only one part. And that’s also, we have only four X machines in our company. And sometimes we produce parts. Another guy would say that is a part for five X machine, but not in our house. Mostly we have maybe one or two more clamping stations on our tombstone.

[34:01] And that’s allowed us to produce these parts or many parts on the tombstone. Not mostly on a five X machine you clamp one part. That means you have also short pallet times and that’s not good. Yeah. You need, in average, we have a running time for all machine pallets about 45 minutes in average. Yeah. So just walk this through with a pallet system. Let’s say you had, you know, 10 pallets, 45 minutes, 450 minutes. Like, are we really getting through a shift or two shifts or three shifts? No. So you want to extend the amount of time the cycle takes, but more parts or more operations per cycle so that you’re getting more productivity of your total machine. That’s, I think, the point. If you can’t get through the night, then your automation only helps you a little bit. If you can get through a second shift, a third shift, you come in the morning and you harvest all your finished parts. It’s beautiful. Now, in your case, you’ve got 23 machines, unlimited tools, it seems like. You even have the material serving as well. It’s really brilliant. The machine-to-person ratio is outrageous. Like, how many operators or machinists are working on those 23 machines? We have one operator who is responsible for two machining centers. And on each shift, we have only one guy. We call him the trouble shooter.

[35:30] He is responsible for all what’s happened during the shift. Only one people for 23 machining centers. And he has to clear some machine errors. Sometimes you have an error with the probe if the workpiece is not located right or something like this. But only one people for all of the machining centers. He doesn’t really make the system work. He makes sure that if there’s an issue, it gets corrected. But he’s not there to make the system work. The system works on its own. Yes, that’s true. It’s amazing. Hey folks, listen up. You know that manufacturing buyers don’t ask simple questions. They’re asking about product compatibility, materials, specs, lead times, application fit, and they want answers before they even talk to sales. That’s where Navoo comes in. Navoo adds AI chat to your website trained on your own content so visitors can get reliable, accurate answers in real time. It helps buyers find the right product, understand the right application, and take the next step without forcing your team to answer the same questions over and over. And setup is simple.

[36:53] Navoo works with your existing website, it connects with tools like HubSpot, Salesforce, and Slack, and gives you visibility into what visitors are actually asking. See what your website has to say at navoo.co slash makingchips. That’s n-a-v-u dot c-o slash makingchips. I want to talk about Triag Swiss Modular for a second too, Janik, because the way that all of the machines can handle all of the parts, you guys have that philosophy with people. You know, your people are not one-trick ponies. We’re like, okay, she is a programmer, he is a setup guy, he is a maintenance guy, she is the machinist. All of your people are multi-skilled, like all of Stefan’s machines. All of your people can do more than one thing and I think you should speak to how you develop a culture like that because it’s really amazing. In the United States, we see many shops where the people are too specialized. They can only do like maybe one thing and then if they’re not there and they’re a key part of the system, then the whole system cannot operate. Kind of like if all of your machines couldn’t do all of the parts and there was only some parts that had to go on this particular machine and maybe that machine has an error that day or it’s down for maintenance, now you can’t make those parts that day. So how do you develop people the way that he’s developed machines where they’re multi-skilled and they can do the full operation within the business? Yes, so the advantage also in Switzerland, also in Germany, I think, is the schooling system that we have, or in Switzerland, we have an apprentice system.

[38:41] So you make an apprentice as a called polymechaniker, that’s a mechanical engineer. He goes four years for the apprentice, two days a week he goes to school, learns how to program and during the time when he works, the three days, he starts, in the first year, he starts conventional, machining, milling. Like what we would call manual, manual. Turning manual, yes. And then after the second, in the second and the third year, he starts on the CNC milling machine. So this is how he develops also. And after four years, you have a highly skilled young man or young woman. And in our production, as you said, we have one operator or two operators per machine. And these two operators, they are responsible for the machine, for programming, for the order processing on the machine, for the tool management and for maintenance of the machine. So one to two people for one machine and they are running. We only work one shift and they’re preparing during the day. On the morning, they are coming, they’re harvesting the machine, they’re loading new parts, having first operations on the first parts.

[40:09] And yeah, after evening, they leave after the shift and let the machine run during the night, unmanned, lights out. It can be challenging to continue to scale with that kind of quality person if you don’t have a robust training and apprenticeship program. You’ve been able to build a company that scales without that one person to one machine or one person to two machine ratio through like technology and automation. And then on the Swiss Modular side, you guys use a lot of the same stuff. You have a Festum system as well. You’ve got some, pretty much every machine has a pallet system. That’s the only way you can run at night. But you’re also developing the people who can keep one, two, three machines running through the night when they’re not there, when they’re at home sleeping. Yeah, and people who understands working a system, chaotic system, chaotic, different work pieces on different pallets. And yeah, super high mix. I’m glad we’re on the topic of people. A common thing we get feedback when we talk about shops that, you know, factories that are as automated as your factory is, Stefan, is, oh, well, what about all those jobs? What about all those people that could be, you know, and our argument typically is always, well, those, you know, loading a machine tool, who wants to do that? It’s a monotonous, repetitive career, right? Being a machinist, a little bit different, right? But talking to you, we find out that your people are actually incentivized in a very unique way to like make the best out of this automation environment.

[41:39] Could you mind sharing a little bit about how your incentive program works? Yes. We have integrated a bonus system, which is connected with the utilization of the machining centers. For example, the base are 90% of utilization until 95%. There’s a bonus for the operators, not only for the operators, also for the troubleshooter, also for the guy who does the production planning for the next 24, 36 hours, and then all of the company are connected with the utilization bonus systems. And that means everything has the same interest in our productivity in the company. And I love that because, you know, to speak about our president, Noah Golner again, he has this thing he says, like religiously at our company, which is no fences, no fences. And what you’ve created here is this perfect system that everyone needs to work together to make sure you’re hitting the utilization. Yes, it’s a team. There are four persons responsible for eight machining centers. And yes, there’s one team leader and they can organize themselves like they want. It’s up to them what they do. The improvement of the utilization, that’s the thing in our company.

[43:07] I love that. In the past, before we worked with this system or this philosophy, we had also a bonus system, but we paid this bonus at the end of the month. And then you saw at the end of the month that they reached this or this or this or this. It was completely difficult to saw what happened over the whole month. And sometimes it was also very frustrated for the people. And now we measure every shift, which utilization we have. And if they don’t reach at one shift, the next day they have a new chance to make it better. That is absolutely remarkable. So every day is a new day and it’s built that the team is incentivized to work together. And again, you know, it’s not built, the choice isn’t, do we want robots or do we want people? Here, it’s a system that’s built for them to work together in perfect harmony. And I think that can be sometimes the challenge with like incentive programs or compensation systems where, you know, you can only really give bonuses or give incentives if the business is performing. You’ve got it set up where the business is performing.

[44:24] I don’t even need to ask you if this company is profitable because I just walked through it. It’s incredible. And so as utilization drives profit, that creates the opportunity to pay your own employees a higher incentive. Yes. And so it’s totally aligned. And that’s sometimes the biggest challenge with compensation programs is making sure that everyone’s winning together. Yes. And I think you’ve done a brilliant job of that. So Risto, I haven’t heard from you in a minute. I think one of the hardest things for you is when you spend some time here and you helped develop this solution with Stefan and then you go to other companies and you want them to see what we just saw, but they don’t see it and it might take years for you to convince them what’s possible because, like Erik described at the beginning of the episode, this feels like a dream almost. It takes time, but at the end, it gives a lot as well. So spending the time to go that path and common understanding with the customer so when you finally get there, very often I need to help from Stefan that we can visit here because when you see that, so I go visit the shop and I see that the spindle up time is there 15%, it’s 20% and at the same time I’m telling a story about someone in Germany who is running above 90% all the time and manufacturing 3,000 different part numbers every year.

[45:52] So how is that possible? So my story is already too good to be true and going that path with the customers and showing them how it is possible, bringing them here perhaps if needed, it gives a lot as well at the end. Yeah, so good. If I was a young shop owner, I’m back where you were in 1990 and I’m frustrated with where I’m at and I just toured your shop and I said, hey, give me one piece of advice or one tactic, one thing I can go implement in my shop, what would you say to a young shop owner like that? I think a good tool management, especially our CTS, is the biggest advantage for a company because most of the potential errors in a workpiece are coming from the tools and if you have a really good tool management, you avoid so many errors. That’s awesome. Thank you, Stefan. And then you, Risto. Spindle up time. Understanding and challenging that are your spindle really doing the cutting work or if your machines are only occupied. The second point what Stefan as well touched a little earlier is what I see that the four axis machining centers, horizontal machining center equipped with APC are just too underestimated a value today.

[47:17] There are a lot of people they are jumping right away for wrong causes to five axis world whereas understanding of four axis machine tool philosophy and getting the setups out from the machine tool is really, really efficient, cost efficient solution to bring the output completely in the different level. And the third one, spindle up time again. Yeah, I love that. You know, I would say this, even in the drive over, I said if I was starting a machine shop today and I’ve said it many times, I would get a five axis mill with a pallet system. But I think your point and what I was enlightened today is there’s so much more real estate in most horizontals. And even though you might do two operations instead of all in one operation, if you’re using all the space like Janik was talking about and you have offline setups with pallet systems and tool management, you can actually get maybe more bang for your buck from a horizontal. And I think that’s the point that you’re making. I’m happy you learned something as well. You teach me. You know, every once in a while I learn something. So Janik, teach me something. I’m a shop owner and I’m so impressed with what I saw today and I said, hey, Janik, what’s your one tactic or one piece of advice that I should implement? You never learn out.

[48:36] Go open minded through your life. Go to exhibitions, go to open houses, open your eyes, listen, hear what your colleagues are telling you, what your friends are telling you. You never learn out. And really, that is my advice to a young man. And of course, we had tool management, we had the spindle, I go on the table, use your space on the machine. If you have a three axis vertical machine, take your table, take your space, put as many parts as you can, let the machine run. I love that. And I think one more that I’ll say on behalf of Janik is, come on, folks, trust your work holding guy. All right. Okay, for me, if I had to add one, it’s personified in this room. Find a network of people who are really brilliant people, other leaders. What you’ve done is incredible. And thank you for letting us in here, Stefan. What you’ve done is what we point to in all of our episodes is what’s possible. And you showed us that it is real. It’s incredible. And then I’ve learned so much, even Risto’s got me believing in horizontals again more than I did on a couple previous episodes, even though we have many horizontals and they’re great machines. I’ve learned so much from Janik and Beat and the Swiss Modular team.

[49:57] That’s basically what formed my philosophy on what I think a good manufacturing company is. And then, Eric, you’ve been a mentor to me. Before I hired you, for many years, I would ask him, hey, how would you structure this in sales? And like, how would you diagnose this sales problem or whatever it is? And so just the fact that you’re on the team is awesome because I continue to learn from you in that way. But I think sometimes, you know, in this space, people buy a machine shop and there’s so many problems in the machine shop. They either buy it or start it or inherit it from their father. And they have enough problems to fix inside their shop that they never do things like this. They don’t feel like this is important to have conversations and to see the outside world and to learn from other leaders and they really miss out on so much opportunity to learn a lot. So I just want to thank all of you for joining the Lights Out podcast. With Eric and I, it’s been such a blessing to be here and really a memory I won’t forget. So thank you so much. Thank you. You’re welcome. Thank you. Thank you for having me. All right, we’re going to turn the lights out on this episode.