The Manufacturing Executive
The Manufacturing Executive

Episode 101 · 2 months ago

Revitalize Manufacturing Through Employee Wellness

ABOUT THIS EPISODE

Our workforce has changed drastically over the decades. The highly desirable and stable manufacturing industry of the past has struggled to retain workers in our modern times. But there is a way to revitalize the manufacturing industry in the US to keep up with the manufacturing powerhouses around the world.  

Today’s guest, Jason Azevedo, Chief Strategy Officer at MRCA, shares his views on the importance of investing in your workforce, how automation keeps workers employed, and what manufacturing companies can do to build stronger communities.  

Join us as we discuss:

  • What revitalizing manufacturing looks like today
  • Why employee health and wellness is most important
  • How automation and robotics benefit the worker
  • How to empower smaller communities through manufacturing
  • How to make your company desirable to buyers 

At the end of the day, every manufacturing company. You ask them. All I do sheheet metal. Know you're in a people business. We're in a labor and people business. Nowadays the machinery does a lot of what we're doing. Welcome to the manufacturing executive podcast, where we explore the strategies and experiences that are driving midsize manufacturers forward. Here you'll discover new insights from passionate manufacturing leaders who have compelling stories to share about their successes and struggles, and you'll learn from B tob sales and marketing experts about how to apply actionable business development strategies inside your business. Let's get into the show. Welcome to another episode of the Manufacturing Executive podcast. I'm Joe Sullivan, your host and a CO founder of the Industrial Marketing Agency guerrilla seventy six. It's certainly an exciting time to be in manufacturing. New Technology is emerging all around us at a faster rate than ever before. There's certainly no shortage of demand in most places, and the next industrial revolution in America is right front of us. Interestingly enough, it seems that the most important ingredient and all of this is one that's been around since the very beginning, and that's the people my guest today. We'll talk about why the best manufacturers, even those whose businesses have been constructed on the backs of Ai, cobots, machine learning and automation, still need to put their people at the front of their respective strategies if they want to stay ahead. Let me introduce him. Jason as a veto, created his first manufacturing company with just six hundred dollars when he was only fifteen years old. At this young age, he was able to establish business with companies including starbucks, Nike, Disney, marvel, Volkswagen, Audie, Lucas films and NBA teams. Jason owns and operates legacy US manufacturing companies and has hatched...

...a plan to give back some of his wealth to the community of these American workers. In two thousand and nine, Jason cofounded mosaic, taking on the roll of CEO but also touching conceptual development, engineering and deployment. Since two thousand and nine, Jason's been at the helm of growing the company you're over year, acquiring several entities and creating several others to round out his manufacturing efforts. Jason's personal interests include riding dirt bikes and quads, beach volleyball, whiskey tasting and learning to ranch horses, goats, cattle and chickens. International travel weave it's weaves its way in there as well. Jason, welcome to the show. Awesome, thanks for having me. Look forward to talking about yeah, likewise. Well, Jason, let's start at the beginning here. The first thing I learned about you is that at age fifteen, you'd grown a business to one million in sales. And I can promise you that at age fifteen, the only things I was worried about were who my homecoming date was going to be in one freshman basketball trials were going to be. So we have to tell us that story. So we so we built the first company. I was actually I was in it with my brother also. I was fifteen, he was twenty and, like every hair brained kid, were we're going to make a ton of money pretty t shirts, and come to find out that it's not a really good way to make a ton of money. So we and we had started. It was fenywhere of two thousand and seven. So right as we kind of got our feet wet, we only had six to six hundreds each kind of working through this this business. The market falls out and you get the end of two thousand and seven, early two thousand, and make crash. Right is we're kind of getting going and every person we talked to was this is the worst time on earth to start a business, this is horrible, this isn't that you guys should get out and you guys are you're going to lose everything. And being the geniuses we were, we didn't listen to the single person. So it was and it would...

...looking back, they would probably right that it was just a really bad time. But we also ended up being the best time ever because all the equipment in the in on the market was going for pennies on the dollar because everybody's losing everything. So we're able to go buy equipment at basically firesale prices and all of the people, all the big, big companies, that how all the best clients, while some of them started going out of business. So you start having these large clients who are there used to being at other places, but that other places in there anymore. So there's kind of a gap in these markets suddenly, which we were able to start exploiting and we took it that we wanted to go after the most complex, crazy stuff we possibly could, because nobody wanted to do that in that market. They everyone wanted to run the simplest production they possibly could. They wanted to really be very protectionist, and we went the opposite direction. Go Hey, we'll just take on the craziest stuff we can. We don't know, we don't know anything about anything yet because it's so early on. And well, when you start doing the craziest stuff and there's a hole in the market, we you start being able to pick up large clients that are that normally a business wouldn't, at that early of an age, be able to get into. So it it end up being a blessing for us, but it was definitely one of those situations you're sitting they're gone, boo, this is gonna this is gonna hurt and and we learned how to fight through it. It's called this. So this was a tshirt printing business. Literally. Yeah, so originally the very first company we had was a t shirt printing company. We took it a lot further than that, though. The next thing we know we were printing clothing, we're manufacturing our own machines internally to do crazy stuff. So we it started printing t shirts and then at the end of it, at the end of that ex specific organization, it was really a development and a many fracturing of apparel and clothing items. Very cool. Well, let's yeah,...

...it's a great story. You know, it's interesting. You were a few years in life ahead of me there, but it's right about the same time I started my business, which is my only business in the one I'm still running today, and it was, you know, I look back on and think, well, I never knew a good time from the beginning. We started Oh six, watched everything kind of fall apart a year later and we were, you know, took me in my business partner, twenty three year old guys who knew nothing right and and so you just you figure it out and then when things get better, you kind of ride the way if you've already been ahead of it. So it was awesome when you got the good years, because I'm like, Oh, I've never had one of these. This is exactly how is. This goes. Yeah, no, good. Well, very cool. congrats on that, and now let's kind of keep moving forward her. So I've I heard you talk about how we need to revitalize manufacturing at this moment in time. That, of course, could mean a lot of things. I'm curious what it means from where you sit. So mainfacturing is going through a transition point. I mean it constantly is, but there's there's some really special things happening right now. The first and foremost, and our focus, is American mayfacturing. There's a huge transition back to more and more production US and a lot of misnomers that a lot of people have gotten stuck in their heads just aren't true anymore. My favorite is it's not affordable to Purtas in us. Well, that that that's not true room, and if you don't, if you don't, people don't want to believe me when I say it. That's fine. Fox Con the number one Chinese contract manufacture is building a US plants. I mean I that that, that Alan says it. It is viable to produce in the US. But there's there's a revitalization that has you can't just keep on doing things the way you've done them for fifty sixty years because the production, especially as it's coming back, is different than when it loved and we have to embrace new,...

...new ways of doing things. Factories cannot look like dingy, scary, dangerous places. They will they've got to be polished and clean and pretty, and employee wellness and health is the a, the absolute primary. The amount of manufacturers I talked to that I oftentimes do not understand the business of their actuation. At the end of the day, every manufacturing company, you ask them. All I do sheet metal. Know you're in a people business. We're in a labor and people business. Nowadays the machinery does a lot of what we're doing. So what what any strong business leader in the manufacturing sector needs to be looking at as process efficiencies, how to take care of your people, how to how to get them new skill sets? We just brought in one of our plants a robotic will and the guy who was welding was was nervous because he thought was going to take his job and it for us, it was clear that it wasn't going to take his job. Is actually make him make more money, but to him it wasn't. We had to really take a step back and explain to him and go hey, automation is not here to take your jobs. It is here so you aren't you don't go home with welding, with flashburns and and so that you can get more products out. And the reality is we are consuming products so much faster than we were fifty years ago that if you're training a single man hour with no efficiency and no assistance, there's no way we can make enough products to supply to supply the entire world. It's just we have to get more out of each man hour. Otherwise it did. We just simply cannot kind of keep up with our consumption anymore. So there's a lot of these misknowmers of automations going to take jobs or it's too expensive to do in the US. None of that's true anymore. I mean there was a point in time that no question...

...that, but the tech that has come into the mainfacturing industry and just in the last five years it's completely reset all of those that those things that people have been grained in them. That's next step of it is revitalizing people's view of manufactory. If you go back fifty years ago, a mother would turn to her son and go, you should get a good factory job. It will take care of you, you're good to go. Well you as manufacturing went through a weird spot there for for about twenty years where a lot of the industry decided that the way to compete with lowage countries was to treat America American workers like like low wage countries treat their workers. And the reality is that's not that. That's not going to happen in the deals and we it went through a large learning curve. So now if you look at the plants, like look at the new Tesla plant with polished white floors, beautiful lighting, safety mechanisms everywhere, these are jobs that are starting at super high pay with no education needed to take them. They'll on site train. But we need to get people to realize that so that it gets back to that point where you're proud to go get a factory job or manufacturing job and it's not, if not, seen as a negative. So there's a huge vitalization that has to happen there where you're actually the work has to be put into re educate the general public about what the manufacturing sector is and when it's becoming in it where it's headed and if that works put in the the industry will thrive incredibly well. It's just the work has to be done. Yeah, that's really well said. I mean you've hit on so you hit on so many things there that I've just heard from so many different really smart people in the manufacturing sector of the last year too, especially since I've been doing this podcast. I mean, first of all, there's not enough labor to go around and that situation is not getting better. You mentioned welding. That's probably might, probably worse there than anywhere in manufacturing, from everything I'm hearing, with...

...the rate of which people are exiting versus entering. Right you have this this perception of robots are taking our jobs, when the reality is there's nobody. You can't get the work done. Like automationed is no longer an option, it is a necessity for survival. And then the people whose jobs maybe actually being replaced to some extent on the front lines are being elevated to places where they can do the jobs where, like you said, they're not coming home with burns on their arms. And, like you know, we make a point to never say we're saving jobs. Yeah, and we there are jobs that need to die. They that is the reality. Yeah, so you revitalize the worker and give them a new skill set so that he matches the modern industry and I have really hard time. But Oh, we're going to save jobs. No, dude, I do not want people doing jobs that we're doing forty years ago because they're dangerous, they are unhealthy. There's better ways to do it now. But I'll tell you one thing. I would rather train a welder to program welding robots run them all day then I would anybody else, because when he looks at the weld he's going to be able to tell you if the robotics is working correctly, unlike any other person can. So you know, I don't want to save the welcome job. I did that. I want that to be out of me, but I want the welder making more the programming that well, that Rope Bot all day long, YEP, and making sure it's putting out with the the correct product. So really it's a revitalization of the workers and the plants and the communities that they're in, not just a hey, let's put a bandid on and save the jobs, because frankly, that just doesn't work. Yep, absolutely. I think you nailed it, Jason. Shifting gears for a second here. What do we need to be doing here in the US keep pace with China and other growing manufacturing powerhouses in the world. So all, I kind of...

...take it from what we're what we're doing and then and push back with it for all functional purposes. We we own private empty fund but really we're manufacturers. We use private equity as our mechanism by which to buy companies. We're going out and buying legacy. US A factoring companies, profitable, well run companies. Usually owner does have a succession plan or they this company's just it's good, solid company, but it's a regional usually regional company. We're China and a lot of almost manufacturing countries have an upper hand. Is the complete supply chain. So the old days of being a manufacturer and I only do sheet metal, well, that doesn't work anymore. It doesn't match the current supply chain. Products are significantly more complex. Oem's do not want to individually piece every single component from ed who are take it to an assembly facility and you're sure to see more and more contract manufacturers pop up. So they are at least controlling the supply chain, but really getting connected to a larger supply chain is incredibly important. That that is the largest barrier. If you can help O wem's by controlling as much of that supply that that process is possible and that you don't have to own every single one. In Our world we do like own as many of the components as possible, but you don't have to. You just need to have a good working relationship with the industry. American many factors are not historically known for being the best at working with each other. There's a you get a lot of fingerpointing if an issue happens on that's kind of gotta go. That that's got to go. It's the the sharing information, talking to each other, really working as a major organism is incredibly important and in reality that a lot of the countries that have taken mainfaction from the US. That's how they function, whether it be a function of...

...their how their government's work and forcing companies to work together, whether it's a function of just how they do trade information. So really getting that information flow between manufactures. And then the other one we touched on is you got to employ wellness and employee focus has to be paramount. We need people in the BIS, in the industries, and it this goes from engineering talent down to operating machinery. If we don't focus on fully wellness within the manufacturing industry, we will never get enough people to work in our plants. Therefore, we will not that. We will not get the industry and position that. That is the that is the core of it. If you look at that, we talked about Fox cons they have had a huge issue finding employees for that planet in Wisconsin because we we haven't put the work into treat people. And that is the big transition that needs to happen over the next five seven years is make a manufacturing job something people are proud of and happy to go to every day. Do you see companies, the examples where you see this happening really well, like who should be a model to other manufacturing businesses out there? There's there's sprinklings of the everywhere. Look take it to take a tesla. What they've done with the the image in the quality of the inside of their plant is is impressive. I mean it's you. You're putting someone at least working in an environment that they feel good. And I am fortunate enough to have some of the early Tesla employees on my team and things like putting pretty shrubbery inside of a factory sounds ridiculous, but it just made people feel better. Like that. This doesn't have to be massive, crazy things like, oh, we're giving away free stuff every day. No, just just make people want to be there. Ford and and some of the biometric suits...

...that they're using to take strain off of people's body. If you unemployee leaves your leaves your building and they they are not exhausted, their bodies not hurting when they talk to someone else in their community. Hey, what do you do for a living? Oh, I actually work in the factory. Well, if that person's hurting, it's going to be work in a factory. It that the little, little differences and you're seeing it all over the place and different companies are doing it for different reasons. Some of them are doing because they want to reduce social issues, but the really strong ones who truly have teams paying attention to employee wellness and happiness, those are very special kind of company and you do see it a lot more in the privately helds. We were currently acquiring a few companies that are very privately held and it's really, really interesting to see how passionate the owners are for taking care of their people. And then you look at their better. You look at their balance sheets and it matches because the people take care of the company. So it's that the and then you we've walking the ones that you meet the owner, you meet the ownership and you're sitting there going, Oh yeah, and you look at that balance sheet and it's it's mean and Nancy and you're like, okay, this there is a correlation here. Yeah, but that's really in dressing. And what more important time than right now? And retention is such a challenge and and you know, do you hear all about the great regisit resignation and people just, you know, getting up and leaving not coming back to work. I mean, there's no more important time than right now to be focused on employee wellness. Yeah, it's and I mean we're and we're a little crazy on our side. We're going to be a step further so our private I could be found. The way that we actually hit our liquidation event for our for our investors and for ourselves is we actually are transferring a...

...hundred percent of the ownership to the employees in the local communities, because we, we as a team, believe so heavily that protecting these oftentime regional manufacturing companies in their local community is incredibly important and that is a way that you can revitalize not only just the the manufacturing sector but the country as a whole. Is Transfer that ownership to the employees in the in their their home local communities. That way, the only person who can choose to move that out of that community in the long run is the people within the community. So it's we're really focused on. How do you take care of the people and and I'll tell you of the first four people, employees that we ever had backward back when we started the first company, of the first four employees, three of them still work for me. They and they've come up through the company. We've done a lot of work together. They all they they hold higher positions in the organization, but these are people that started with us at one thousand, sixteen, seventeen years old. So it does work. We've proven it so, but it really you have to have a very clear focus on it. Okay, Jason. So for manufacturing owners and leaders who are listening right now that are looking to create value in their businesses, can you talk about what kinds of things that you look for in a business? As you'd maybe evaluate them. So there's base metrics. I mean that. The reality is top line and bottom line are important. Of course that has further. But then the importance is for us, and I recommend this to anybody buying companies, try to find if you're looking at company. When we go look at a company, we're trying to find hints of how the employees feel about the company. If you buy a company that the ownership has treated the...

...employees badly for a long time, no matter what, you have an uphill battle. The day you walk into own of that company. It's like picking up a pound puppy that was abused. The institution is going to be scared and hurt and there will be distrust built in that is incredibly difficult to undo. So if you if you want to add value to your manufacturing company, it's any distrust issues between the management and the employees. If you if you do not do that, someone coming in to acquire you will use that against you because it makes the job so much harder. Cleanliness. It sounds crazy, but it is another huge one for us. It is hard to we looked at a plant about nine months ago. Love the company, love the the product, love the quality love the financials, love everything. Walked into their plant and it was so messy that we decided the only way we would buy this company is if we move the plant because we can't even get it clean, and so it we decided, here's what we need to do. So if that was used financially against them, and we because we knew that only option. And they had beautiful new equipment too, throughout this plant, but the only way we could get this place under control was going to be a movement. Or not the only way, but it was the cheaper way, was to move this planet. So you want to make sure that you're investing in things that make it easy for someone to take over the company, and people forget that a lot. That you when we're looking at a company, if I'm going to buy it, I got to do whatever you've been doing, and if you've been wearing fifteen hats and and you're you're kind of the driver of everything, your company's not really worth worth nearly as much to...

...me. That that is the reality is. You have to understand the buyer has to come in and run the place. So you start getting leadership team in place. If you're preparing to sell, you we're going to always look at the leadership teams has been in place for at least two three years. Think about what you would want when you were buying something. The other one is your equipment is not worth anything. I mean that the reality. It is financially worth something, but I we run into a lot of owners that are like, well, we've got with this machine from one thousand nine hundred and forty five. If I had to buy it again at two hundred two thousand dollars, and it's like no, it's sorry that I'm not running the rude no. And then the other thing is is realize who you're selling to. I will be honest, there's an often time I'm I buy companies cheaper, but because of our track record of preserving the legacy and that that is very, very important to that in a core concept, core pillar of our business. So when I go in and say hey, I am going to preserve this, I'm going to make sure we take care of your people that have been here, we're going to do everything in our power to keep everything the local community that's in. But you gotta remember that making a decision like that also has trade off. You have to understand who you are as a business seller and a business owner and match that up with how you want to value your organization. This is definitely our like a daily than within our organization. Is How do you look at a company? Yeah, I bet, but it's great. I mean, people need to hear this from the outside. I mean, you know it's you mean your example, the the machinery from one thousand nine hundred and forty five right, although, although an extreme kind of you know, situation, I'm sure this is how some people are thinking. It's they're not thinking about the right things in terms of what is actually creating value if they wanted to exit or you know, and frankly I...

...mean the way I've been advised with my business, a completely different type of business is you build it like like you intend to sell it, even if you don't intend to sell it. Right, and you got to make those bigger long term decisions and you need to be focused on the right stuff. Well, and the other one is if you're starting to get closer and closer to selling, do not change what you're doing. I watch people. Are they mentally decided they're going to sell, so they start checking out or they decide they're going to sell. So they start revving the engine as hard as they can to increase the number. The problem with that is is that we're reving the engine like crazy. It it breeds cracks and Oh and it sometimes it works out and they get these nine big revenue lines and everything's great, and sometimes they damage the organization so much that anybody coming to buy it is like Whoa. No, no, no, no, no, no. I mean you would be amazed how many financials we see that doubled in the year prior to the wanting to set and that good. Sometimes that is really bad. Other Times, and I will say most private eputy and most people buying these organizations as as as a business. So when they actually all they do is buy and round of companies. Your your pop of a hundred percent last year. Is it really a value to them? It's cool, it's great, some numbers there, but it's not. It's not it's not guaranteed to be sustainable, and it's not. Unless they, the person purchasing, believes they can repeat that two or three more times, it doesn't add a lot of value to them. So just really a good, strong, stable company that can can expand is what you want. To be and and we are. We are different. I like very strong I don't like turnarounds either. That it's so much, but there's so many good companies for sale in this country I don't find the reason to go buy one that has to be...

...completely flipped and all this stuff have to be done and you've gotta just it just doesn't matter our model. Jason, here's a wide open question for you. To kind of put a wrap on this one would what do you see on the horizon and manufacturing in the US? What gets you excited about the future? I think the there's a lot of energy behind cool new stuff that's going to really help with process and safety and and employee on this that the movement of cobots coming into into industry, though. I mean those are things that ten years ago people were barely even dreaming about and really being able to program a piece of robotics in eight minutes or program of well welding robot and ten minutes like that. The tech has caught up so fast to where it where it needs to be. I'm I'm extremely excited. I remember we bought some people remember these. They were called backster robots from rethink robotics are the root. FIRST LIKE USABLE COB ont they're basic, they were toys, and now you got industrial cobots. I think it's just going to completely change how the games played. Awesome. Yeah, it's been really fun for me to talk to so many different people from you know, who have different areas of specialty looking into manufacturing, AI, with robotics, machine analytics, Sen learning, like there's just so much interesting stuff happening and, like you said, it's happening so fast now that it's like we're finally catching up to where we need to be. So we were in a simulation lab in Florida talking about some stuff, but the we're actually in conversations right now to build an augmented reality system for assembly lines, so as so it's popping up all your quality cha and the next thing you need to put and it's it's imposing it on...

...where you need to do it. I mean the text here. It is not like there's some new invention that has to be built for this. It's here and it's getting cheaper and cheaper by the day and I think the way we're going to augment people's ability to do the jobs is going to be unbelievable. It's awesome. Well, Jason, can you tell our audience how they can get in touch with you and where they can learn more about Mrca or any of the other ventures that you're involved with? Yeah, so in MRCA DOTNET. Go there. There's actually a way to schedule even a direct conversation with me. I'm very, very much about sharing where the industry is at and who what, what ideas were all playing with. So there is. We leave a link on there that you can get directly to onto my calendar. We, along with other partners in the organization, also follow us on Linkedin. We put up a lot of content of stuff that we're I think is cool that we're working on. If anybody's interested in investing and they're an accredited investor, please go there, go to the website. We can talk to you about kind of the benefits and the the amounts that it is which we left our minimum investment pretty, pretty low, so typical Americans can that. Typical credit investors and Americans can get involved with this because we really do think it's incredibly important. So it really the website's the best way to get contact points with us and we're always happy to talk. Beautiful. Well, Jason, thanks for doing this day. Was a really interesting conversation. Awesome. Thank you, and that's for the rest of you. I hope to catch you on the next episode of the manufacturing executives. You've been listening to the manufacturing executive podcast to ensure that you never missed an episode. Subscribe to the show in your favorite podcast player. If you'd like to learn more about industrial marketing and sales strategy, you'll find an ever expanding collection of articles, videos, guides and tools specifically for be tob manufacturers at gorilla seventy sixcom learn...

...thank you so much for listening. Until next time.

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