darsequipment. Slitting rewinding and sheeting

Increasing winder speed; Facts versus fiction: Ch. 37

2004-06-30T09:47:00.000-07:00

Calculating actual run time cycles:

Before you bid on a job, it is best to determine if your plant has the right equipment to do the job. For example, if the counter roll customer specifies half inch cores on the finished rolls, you cannot run this job on your Cameron duplex slitter rewinder. it will not work.

To run small core diameter rolls you need a machine designed for the job. We will cover small core production in some future posts. For now we will continue with our counter roll project.

How to determine ramp speed:

Ramp speed is computed by the operator based on actual trial runs. It is almost impossible to hit this number right on the head based on paper calculations. Let us not split hairs. One can figure things out without an actual trial run by estimating line speeds. The accuracy of these calculations will be directly proportional to the operator's experience.

Golden rule of estimating:

If you have to bid on a job, it is best to be on the cautious side. I always advise my clients to bid a job based on your slowest ramp speed. If you have run this stock in the past then you have precise figures to work with. Any new material that you have not run before , must be carefully evaluated.

Load times:

Determine the number of cycles for loading the unwind stand. If each parent roll of paper is 50,000 feet, at 500 feet per finished roll, you will have to change this roll every 100 cycles. This is just to give you an idea. Ofcourse the footage will vary depending on the job.

In actual practice, here is what you can expect. Once the parent roll is loaded on the unwind stand, the operator threads the paper through the winder. He cuts off several hundred feet of this paper in setting the machine. Setting tension control, setting the slitting knives, adjusting the web etc.

Towards the end of the cycle, the operator will stop the machine before the roll has run out of paper. These "stub" rolls can be salvaged, but that is another subject. In other words, you cannot calculate 100 cycles for this project. 98 or in the best case situation 99 cycles is what you can expect.

If you do not allow for this "waste" factor, you are building an error in your bid that will hurt the bottom line.

Secondly, the time it takes to load the parent roll on to the unwind stand has to kept in mind. The length of time it takes to pick up a parent roll, bring it to the winder, load the unwind shaft, position the roll onto the stand, "square" the roll and finally thread the web has to be calculated. In addition the setting of the slitting knives, setting the tension control, the brake tension and the nip roll pressure also has to be taken into account.

Don't forget the time it takes the operator to load the rewind shafts with the cores and pick up these rewind shafts and lock them on the rewind arms. It may surprise you to know that this loading and unloading can take more time than the actual rewinding cycle!

This is Dr. Winder saying bye bye for now....Live long and prosper.

Slitters: Increasing speed: myth; Chapter 36

2004-06-29T09:31:00.000-07:00

Estimating production runs based on actual field tests versus pie-in-sky dreams:

In the last two posts we addressed the actual "run times" of a duplex slitter rewinder. The start-stop cycle time issues were calculated. In this post we will continue to explore these points in more detail.

This is the biggest mistake made by converting plants when bidding or estimating run times on any given converting job. A simple calculation mistake can lead to thousands of dollars in losses. This can also lead to future loss of business.

A client who was charged a dollar a roll for the last job is going to be extremely upset when you discover your mistake and now quote 2 dollars a roll for the same job. Had you done your homework the first time around, this mistake wouldn't have occured.

Knowing your production speeds, down to number of rolls produced per hour, on a given slitter rewinder is critical. We shall now continue with our time study.

Ramp speed:

How does one determine the best operating speed for any given grade of paper, film or foil?

This depends on several factors:

1) Lineral footage that has to be wound on the finished roll.

2) Properties of the material that is to be wound.

3) Grade of paper or film.

4) The thickness of the stock in question

5) Parent roll size and weight.

6) Other unique conditions.

These are not the only conditions, but this gives you an idea of what is involved.

Each grade of paper ( or plastic) has its' own unique properties. All these properties come into play during the rewinding cycle. The only way to determine the exact run times is an actual trial run. Ofcourse, if the plant has run a certain grade of paper in the past this becomes a moot point.

If you have never run a certain grade of paper before, don't assume that you can have the same production results.

The weight of the parent rolls will be different. The slitting knives will have to be readjusted for this new grade of paper. Core sizes may be different than what you are normally accustomed to. The job may call for a different rewind core diameter. You may not even have these different sized shafts in your plant.

The parent rolls may be seconds. They may be wound too tight or too loose. Crushed cores and other defects in the parent rolls may bring the plant to a complete stop. The job you thought was going to take 2 hours might end up being a 2 day nightmare.

If you, as the owner or the plant manager ignore all these points and go ahead and quote a price, you have to live with the results.

Standard operating procedures:

Every job that comes in has to have a master work sheet. This master work sheet doesn't have to look like the IRS tax return form. But try to address all the points listed above and then some. The form should be signed off by the estimator, the receiving manager and the machine operator before the quote is sent out to the customer.

This is Dr. Winder saying bye bye......Live long and prosper.

Slitters: Increased speed: Myth. Chapter 35

2004-06-28T10:29:00.000-07:00

Increasing the slitter rewinder's speed:

...We will continue our discussion in this post. Plant managers and converting plant owners make the common mistake of equating speed with increased production. In the last example we had a roll with 500 lineal feet of paper. If your slitter rewinder has a top speed of 500 feet a minute, that doesn't mean you can wind this roll in one minute.

Imagine yourself sitting in a sports car with a top speed of 200 m.p.h. You are at a stop light waiting for the light to turn green. The next stop light is 500 feet away.
The sensible thing to do would be to start out real slow and then speed up. Once you are at a safe distance from the next stop light you start slowing down and then come to a full stop at the stop light.

Slitter rewinders have to be operated in the same way. The machine starts out real slow, picks up speed and then about a 100 feet from the end it ( the winder) starts to slow down. It comes to a dead stop at precicely 500 feet, because that is what the customer wants...a roll with 500 feet of paper on it.

In technical terms here is how it goes..... Machine has a "soft start" function built into the motor controls. The soft start assures that the machine cycle starts out smoothly without any sudden jerks. Any sudden jerking might break the web or introduce wrinkles or soft spots in the web. In addition this allows the operator to make sure that everthing is starting out as planned. In case of a problem, the machine can be shut down without too much waste.

Once the machine starts in the soft start mode, it takes a couple of seconds and then goes into the "acceleration" mode. Speed starts to pick up and then reaches the "ramp speed". Ramp speed is the optimum speed at which the winder can run, based on the stock being run and the actual lineal footage in question. Please note, "ramp speed" is not the "top speed". Ramp speed is simply the best speed for the job at hand.

Once the ramp speed is achieved, the "deacceleration mode" kicks in. This is the point at which the motor starts to slow down, smoothly. Just like the car driver starts to "slow down" before the next stop light. This slowing down is the "deacceleration mode". A good driver will do this without any jerking or "hitches". Controlled deacceleration plays a vital role in the quality of the finished product.

Let us look at this in slow motion.

1) Machine starts out real slow ( soft start). Paper starts to wind around the core. This cycle takes about 5-8 seconds. This can always vary depending on operator expertise.

2) Machine starts to accelerate slowly and then reaches ramp speed. The acceleration cycle may take another 3-8 seconds.

3) Machine reaches ramp speed. It continues to run at this speed till the signal to slow down is given.

4) Machine goes into the deacceleration mode. This takes about 5-10 seconds, depending on the ramp speed.

5)Machine comes to a full stop. The brake module had been activated at the deacceleration mode and now it applies the final brake.

We will examine each aspect of this cycle as a function of time and actual lineal footage wound.

This is Dr. Winder saying bye bye. Live long and prosper.

Winders, Increased speed: Myth: Chapter 34

2004-06-27T10:45:00.000-07:00

Does increasing speed on a slitter winder translate into increased production?

Answer: Depends on the application and the product in question.

Billions of dollars are spent by the aeronautical industry on R&D, to increase the speed of its jets. As we approach the speed of sound, a different set of problems arise.
The same is true for the automobile industry. Billions are spent on car design and fuel efficiency. There are sports car on the road that boast 1,000 H.P engines and top speeds in excess of 200 m.p.h. If the legal speed limit on our highways is 55 to 65 m.p.h. all this extra horse power is a total waste. Yet people who have the means still buy these sports car.

Slitter rewinders are not in the same league as jets or cars. Yet increasing speed has become the holy grail of paper mills and converting plants. Let us look at this in some detail, with actual examples.

Counter rolls:

In the last post, I showed how the plant increased production by about 20% without retrofitting or touching the actual slitter rewinder. We will stick with counter rolls in this example.

We take a 12 inch wide counter roll, wound on an inch and half core, with 500 lineal feet per roll. On a 65 inch wide slitter rewinder you can get a maximum of 5 rolls per cycle (5 x 12= 60 inches). The top speed of this winder was about 250 feet per minute. To make calculations easy, it would take about 2 minutes per cycle to wind a 500 foot roll. Wrong!

Imagine that you are in your car waiting for the stop light to turn green. The distance to the next stop light is 500 feet. Assume there is no speed limit. But here is the catch. You must come to a full stop, without crossing the line at the next stop light.
If you start out by burning rubber and hit the pedal to the metal, you will need extra heavy duty brakes and a parachute to come to a full stop. This will be a short, violent
and brutal drive. The strain on the engine, burning tires and other stresses will take a heavy toll on the car.

In a slitting rewinding operation you can't start out like a bat out of hell. The web will break. Before the cycle begins, the web has to be threaded and wound on the core.
The operator has to check to make sure that everything is in perfect alignment. There are no wrinkles: the web path is true: The core is in perfect position: etc. This takes the operator anywhere from 10 -15 seconds or more. The operator also has to load the cores on the rewind shaft and set the shaft in position. This takes another 30-60 seconds. In this example we are using only one operator.

Once the cores are loaded and all inspection checks have been made, the process begins. If we add all the time so far, we have spent anywhere from a minute to two minutes and we haven't even started yet!!!

Soft Start:

The machine has to start out real slow. This slow start allows the operator time to see if everything is going as planned. In addition it allows the web to start in motion and overcome any inertia problems. If something goes wrong at this stage, the operator hits the stop button. This saves a lot of material from being wasted, if the cycle has to be restarted from scratch. Had you started full blast, you would have wasted several hundred feet of paper. The less waste you have the more profitable it is. Obvious.

The old time winders did not have this automatic slow start feature. Several different schemes were used for this "soft start" procedure. This was an art and it took the operators months of trial and error to learn. I am sure you can see the amount of waste during this training period not to mention the drop in production.

Learning this "soft start trick" actually took a lot longer than a few months. Each grade of paper had it's own unique properties. Hence, what worked on one grade of paper did not work on a different grade of paper.

So far we have seen that about 2 minutes have gone by and we haven't even started the operation. We shall continue to explore this in our next post.

Till then, live long and prosper.

Unwind Stand, Increase your production speed: Chapter 33

2004-06-26T14:50:00.000-07:00

Analysing slitter rewinders piece by piece:

I was called into a plant that was making counter rolls on one of their rewinders. These rolls varied in width from 6 inch wide to 18 inches wide. All finished rolls had about 600 lineal feet of paper. Each roll was rewound on an inch and half core. The machine in question was a 65 inch wide Cameron duplex slitter rewinder from the early fifties.

The plant manager was utterly frustrated with the number of rolls that were being produced per shift. My mission was to recommed any design changes that would increase production.

Conditions:

I had to work with what they had. They had no desire to buy a different machine. They loved this old clunker. I was quite amused by this, but I went along with what the boss-man wanted. The boss-man had rather modest goals. A 10% increase in production would be enough to make him happy.

Dr. Winder analyses this problem:

First of all, this was the wrong machine for the job. Secondly, this was an old clunker that had a top speed of about 300 feet a minute. Any faster and the machine may fall apart due to the vibrations. Third, they had very limited resources and didn't want to spend too much money. Keeping the above points in mind, I went to work.

The parent rolls coming into the plant were seconds. These were rolls that had been rejected by the mill for one reason or another. The plant could buy these rolls at scrap prices. However, the finished rolls fetched top dollar. The profit margin on these rolls was extremely high.

Rejected rolls from a mill are rejected for good reason. The rolls are either wound too tight or too loose. The cores may have gotten crushed or the roll was dropped and damaged. Water damage etc, there are quite a few reasons why these rolls are rejected. The point is that this is all good material. There is nothing wrong with the paper.

These rejected rolls weighed anywhere from 2,000 to 4,000 pounds each. The forklift operator would pick up a roll using a roll clamp and "steer" this into the unwind stand. This was pretty hairy . One wrong move and the forklift could easily do some serious damage to the winder. Roll-changes took about 20- 30 minutes from start to finish. This was not counting the crushed core repair or the "wet and damaged material" waste cycle removal times.

A simple overhead crane system was installed that took care of loading the rolls on to the unwind stand. This was easier, safer and much quicker than loading by forklift. Time to load the new roll was cut down to about 8 minutes versus 20 to 30 minutes using the forklift method. This simple retrofit boosted production by about 25%. The plant manager was beaming from ear to ear.

Production of these rolls could be increased 20 fold if they used the right equipment to begin with. Notice....no changes were made to the unwind stand or the winder.

Live long and prosper....till the next post

The case of the pesky paint sticks: Chapter 32

2004-06-25T08:53:00.000-07:00

Increasing Production. Simple Retrofits:

We have been talking about the survival of the converting industry in to-day's climate.
We have also established that we (American manufacturers) can not compete with the Third World countries based on wage rates, taxation structures and all the other handicaps.
That leaves us with only one option and that is to be more productive. We have to produce more per hour to reduce our manufacturing costs.

Let's be realistic:

I could start doing some arcane mathematical calculations to prove certain assumptions. However, we want to keep this as simple as we can. Let's say that a simple 'paint stick'
costs one cent a piece. These paint sticks are made in China or India. We ignore all transportation and shipping costs. The fact remains that these paint sticks cost a cent a piece in the USA. Most times , when you buy a can of paint you can pick up a few of these paint sticks for free. These paint sticks have a nice logo or the paint manufacturers name or the hardware store's name imprinted on them. This logo can be one color or two color or three colors.

There are certain standards that these paint sticks have to meet. They have to be nice and smooth with no sharp edges. Secondly, they have to have some structural integerity.
You can use only certain kind of woods to make these paint sticks. This in a nutshell shall serve as our first example.

Obviously, if these paint sticks are selling for a cent a piece, the manufacturing cost is even lowerer. Let's say that if you bought these paint sticks directly from China your net cost would be half a cent per piece.

You are an American manufacturer. One of the products that you make is paint sticks. Suddenly you notice that your buyers are not buying this product. It doesn't take you too long to find out why. You were selling these paint sticks for 5 cents a piece and barely making any profit on them. So you call an emergency staff meeting to discuss this disaster. After hashing this over for a week or two you still have no idea about what to do.

It is at this point that you realise that you need outside help. Dr. Winder is called in....

The Doctor is in:
When I showed up at the plant and sat down with the management team, I was presented with all kinds of pie charts, production figures, manufacturing methods....you get the picture....
After looking at these charts etc. I asked "what is the cost of your raw wood"? No-one at the plant had figured this out. Calculators came out and in a very short period it was determined that the cost of the raw material was almost 2 cents per piece!! Just to convert the raw logs into paint sticks cost 2 cents a piece. I looked at the boss man and told him he could not compete with China or India. That was it. I was done.

All cost figures etc given in the above example are all made up to illustrate a point. I don't look forward to some bean counter sending me e-mails to point this out.

We shall continue.....in future posts. Till then, live long and prosper.

Slitter rewinder : Chapter 31

2004-06-24T19:19:00.000-07:00

How to increase production:

The utter lack of vision at some converting plants never ceases to amaze me. Wrong machines are used. The job could be run much easier and faster only if the right machine was used. When probed for answers as to why a certain job is being run on a particular machine, all kinds of nin-compoopish answers are given.

Rule number one:

Use the right piece of equipment for the job. You can limp along using the wrong machine for a while. Sooner or later, you are going to lose this segment of the business to someone else. Most of the time this blunder is made by the owner, however , there are times when this decision is made by the plant manager. No-one likes to be told that they are making a big mistake. The pesky "ego" factor comes into play.

Rule number two:

Don't be shy about getting an outside opinion.

If you do decide to call in an outside specialist, don't tie up his hands. Give him full rein to find all areas of weakness. Let him know that there are no sacred cows. If he sees a problem with management, so be it. Spare no-one. Allow the specialist to do his job unhindered.

Why call in outside help if you know all the answers? Don't wait until it is too late.

We shall continue with this in future posts. Till then live long and prosper.

Slitter Rewinder: Chapter 30

2004-06-23T10:01:00.000-07:00

Retrofitting slitter rewinders for increasing production:

A converting plant has to be on the cutting edge of technology to survive in this climate. There is no way an American manufacturer can compete with India or China. Labor costs in China are reportedly 65 cents an hour! India is not too far behind as far as hourly "slave" wages are concerned.

Add to this the taxation situation. State taxes, Federal taxes, real estate taxes, sales tax, fuel surcharge, heating costs and the list goes on and on. Insurance costs are another big factor. Ofcourse, none of these "safety" costs are an issue with third world countries.

The poor countries do not have any of these costs to consider. This is something we will discuss in another post. For now, let us concentrate on increasing production. As you can see, we face a daunting task indeed. This is not a level playing field. American manufacturers are in a do or die situation.

Cutting costs:

There is only so much cost cutting one can do. You can lower your thermostats and freeze your workers. This will save a few bucks a year. You can reduce your waste factor to almost zero. Even after you cut all your costs down to the bone, you are still in a no win situation.

There is only one thing you can do, and that is to increase production. Even this increased production may not be enough to offset the cost differential between overseas production costs and domestic costs. However , we cannot just sit around twiddling our thumbs, hoping that the Politicans will do something about this sad situation. The Politicans are touting "job creation" in the service sector. These "minimum wage" paying jobs are sending us back to the stone age. Next thing we will see is horse and buggies all over our landscape.

Slitter rewinder : Chapter 29

2004-06-22T10:12:00.000-07:00

How to increase net profit margins:

Companies spend millions of dollars on advertising, to try to increase market share. The small converting plants can not afford to spend that kind of money on advertising. Having stated the obvious , let's look at different ways a small company can increase its' bottom line.

As I mentioned in my last post, a slight increase in production has a dramatic effect on the net profit figures. It is incumbent upon the owner to dedicate all the resourses he has on increasing production. The first place to start is by breaking down the production figures for each piece of equipment in the plant. As an example let's say Slitter no.1 produces 100 rolls per shift. This should be broken down to rolls produced per hour. Exact operating expense should also be calculated and broken down to cost of operation per hour basis. This has to be done for each and every piece of production equipment in the plant. Once these figures are calculated, it is simple
to arrive at "profit per hour" per unit.

Important:

If a machine sits idle, it is not making any profit for the plant. However, this should not become an obsession. There will be times that certain machines will not be in operation for one reason or another. The machine operators should be trained to run several different machines in the plant. In fact the best operators should be able to operate every converting machine on the floor. If your plant has "specialized operators" each dedicated to one machine only, then you could be headed for trouble. As a matter of fact you will pay dearly for this mistake.

Primma Donnas:

Every small converting plant has a few machine operators that suffer from this "primma donna" syndrome. Mostly, these are older guys who have been running the same antique winder for 20 years, plus. It is my experience that you can not change these "fixated" personalities.

Old farmers suffer from this malady as well. They will fuss and tend to an antique 1945 Ford tractor. They are in love with this tractor. It is their baby. It doesn't matter to the farmer that it takes him 2 weeks to till a field. This same field could be tilled in 4 hours using newer equipment. What's the rush?

This attitude and mindset is fine if you are the owner of the plant. However , if you are working for someone else, then this attitude will sink the whole company.

Resistance to change is the biggest stumbling block to innovation. To increase production this issue has to be addressed.

Slitter Rewinder: Chapter 28

2004-06-21T10:31:00.000-07:00

Economic Analysis: Reasons for deciding to buy a used slitter rewinder:

Actually, it is quite easy to determine whether you need a new slitter rewinder or not.
Let's say that the old faithful clunker of a slitter that you presently use generates a 100 rolls a day. As per our last example, we also see that the converting plant is generating a decent profit. We have already gone through the accounting analysis of hiring a new salesman.

Now let's examine how we can increase our production. Any increase in production will have a direct bearing on the bottom line. Since no new man-power is to be added to the staff, everything else will remain constant. Your operating costs, rent, heat , light etc will stay the same. Any increase in production will increase the net profit figures.

A mere 10% increase in production will have a dramatic effect on the net profit figure. This slight increase in production can actually double your net profit! look at the advantages of doing this. There has been no increase in costs. Your total expenses have remained the same, but your profits have doubled.

This is a no-brainer. Yet, I come across companies all the time that have blinders on and are utterly oblivious to this simple fact. CHS is missing.

By buying a new slitter rewinder ( a used machine will do nicely, thank you) that produces 10 more rolls a day versus your old slitter rewinder, you have doubled your profits.

Survival Tactics: Chapter 27

2004-06-20T09:44:00.008-07:00

Boosting productivity:

In the last post we explored options for increasing profits. All things being equal, the only way to boost profits is to increase productivity. Hiring more people to increase production is not really the answer. If the bottom line ( net profits) remain the same increasing the work force is a moot point.

How to increase production:

This is the easiest and yet the most difficult decision a plant owner has to make. The difficult part is the owner's mind set. A converting plant will not give any thought to hiring an additional salesman or hiring additional machine operators. An accounting analysis relating to additional man power has already been addressed in the last post.
However, when it comes time to make the decision to buy a new piece of equipment, often times the decision makers tie themselves up into knots. This process need not be too difficult, if a little research is done in advance.

The only way to increase productivity in a converting plant is to have the right machines for the job at hand.

This is where the nightmares begin. The plant workers resent any kind of change. They have grown used to doing things the old fashioned way. There is a pecking order that is well established in the plant. Any change in operating procedures will be fought tooth and nail. Iam sure you all know the routine. Pretty soon the union gets involved and threats of strike may be in the air.

Taking our example from the previous posts, it takes the master lathe operator 15 minutes to sharpen a drill bit. A fully automated drill sharpening machine can sharpen the same drill bit in 15 seconds. Plus it is safer, faster and idiot proof. Anyone can be taught to sharpen drill bits in less than 15 minutes. In addition the drill bits are sharpened perfectly, everytime. This indeed is a sore point of contention for the old master lathe operator. He feels impotent. He feels threatened. His job is on the line.

Every converting plant owner should be well aware of this fact. If the plant owner is not aware of this fact, then he is doomed to mediocrity. In most third world countries any automation is highly resisted. Since automation means reduction in jobs, the Governments will step in and actually ban the importation of such machinery.

This resistance to change is not a natural instinct but a force of habit. If you get up at 7a.m. every morning and suddenly the job calls for you getting up at 3a.m., this will make your whole life miserable. This state of misery will only last a few months, till your body acclimatises to this new routine. The same principle applies to getting new machinery. The operators dread this as this is akin to getting up at 3 in the morning. In addition there is the fear factor. The experienced operator feels like a total rookie. Yet this too shall pass.

So, the plant owner not only has to adjust to these new realities himself, but it is his job to make sure that the rest of the troops are with him. He has to lead the workers and assure them that there aren't any job or pay cuts in the works. The new machines will be faster and easier to operate.

Survival Tactics: Chapter 26

2004-06-19T10:36:00.000-07:00

Allocating resources:

.....Continued from the last post....

The small converting plant in the last post shows that it is generating a $100,000 net profit per year. We examined what would happen if an additional sales man was hired. As the owner of this plant certain decisions have to be made. Should things continue the way they are? After all, the company is showing a decent profit. This is a personal decision and the owner is in a best position to make this call.

However, if the management decides to expand the operation, careful attention has to be paid to the fundamental operating procedures. Doubling the size of the work force has to be carefully analysed. What's the point of doubling your size if your net profit drops or remains the same? Each new member added to your staff has to be justified. If you fall in the "public sector" mind set and start hiring just to look bigger, then you are headed for a major disappointment.

Increasing profits:

Let's set a simple goal. Our mission is to double the net profit for this converting plant. How do we do that?
1) We can increase our price for finished goods by 10%. On a million dollar sales figure this comes to an extra $100,000. Mission accomplished. This is easier said than done. If the going rate for sheeting is $200 dollars a ton, by raising your price to 220 dollars a ton (10% increase in price) you might end up losing all your customers. This only works for the State Government and the Public sector. They keep raising prices and there is nothing the public can do about it. They have no accountability or fear of losing their jobs. They live in a World that is immune to any economic common sense. In addition they have no competition. For them there is no day of reckoning. They produce nothing. They just make rules for the rest of the private sector.

As we can see raising prices to double your bottom line is not going to work. So we now have to come up with plan "B".

2) Reduce wages:

This is another brilliant innovation....this cut-in-wages...to save costs. If Mr. Henry Ford had followed this concept, I hate to imagine where we would be today. United airlines is in big trouble. The union made billions of dollars in wage concessions...yet United is losing millions of dollars a day. Note, the upper management got bonuses!! The sacrifices were made by your daily lowely workers.

In the early eighties I bought a computer powered by a 8088 microprocessor. The clock speed was 4KHZ. Hard drive was 10Megs. I paid over $6,000 dollars for this clunker in 1983 dollars. Today, Iam using a computer that runs millions of times faster than the 8088 machine and with the printer and all I paid $500 for this. The computer industry sets the standard for the rest of the World.
Cutting wages is not an option....not yet anyway. But the way our politicans are going I wouldn't be surprised if wages went down to 65 cents an hour.

3) Make your workers more productive:
Well folks, China had forced labor. Russia killed millions in labor camps. Overtime laws are being changed. In effect the changes are being introduced so that the employers doesn't have to pay overtime. Let the masses slave. We have more 'fat cats" to feed. Tax cuts are enacted, yet fees are raised. End result..we end up with less than before these changes were enacted. And the deficits keep sky rocketing...pension funds are depleted, social security teeters on the edge of bankruptcy....
American workers have less free time than any other western nation. Both the husband and wife work...yet this is barely enough to eke out a decent living.
To make workers more productive you have to provide them with the right tools.

Survival tactics: Chapter 25

2004-06-18T09:53:00.000-07:00

Economics 101:

Common horse sense.

The number of years one spends in college and a string of degrees after ones name has nothing in common with what I call " common horse sense". All top notch athletes basically go through the same training routine. Yet you get a few that are heads and shoulders above the rest. These "stars" have something extra and this is attributed to their unique genetic make-up.

The same principle applies to CHS ( common horse sense). You are either born with it or you try to cultivate it. Again, the guy born with it will have an edge over the one who has cultivated it. Let us now explore this in some detail.

Example no.1

Let's take a small converting company that does a million dollars in sales per year. (gross sales). Assume that the net profit is 10% of gross sales. That means that this company is making a net profit of $100,000 per year. The owner sees that things are looking good and that he should expand. To this end he starts out by hiring a new salesman. The going rate for a good salesman is $50,000 a year. Add all the travel expenses, insurance, car expense, other expense etc. and this adds another 30,000 dollars
for a total cost of $80,000 a year for this new salesman.

To remain at the same level ( $100,000 net profit) the company now has to generate an additional $800,000 in business. This is almost double the production levels of the previous year. Think about it. You have to double your output....yet nothing really changed as far as the bottom line is concerned. To double your production two things have to happen. One your machine operators suddenly start producing twice the product in the same time or you start a second shift. By starting a second shift you have to figure out the additional man power and operating costs.
Assume your labor cost per year is $500,000 a year. Starting a second shift will add another $500,000 to your costs.

Ignoring this simple fact is the leading cause of failure. Owners lacking this CHS will go ahead with hiring a new salesman without any thought to realities on the ground.

Hiring a new salesman can actually put you out of business. Think about it. The rule of thumb for hiring a new salesman should be as simple as ABC. The salesman should generate enough business to pay his own expenses plus contribute a hefty chunk to the bottom line. If this is not happening in your business, then you are in serious trouble.

First things first:

The most obvious place to start is on your production floor. Analyse everything. How much is each slitter rewinder producing per shift. Do these calculations for every piece of equipment in your plant. You should have these facts on your fingertips. For example Sheeter no.1 generates $200 per hour net profit. Reduce every machine to net profit per hour basis. This will give you a vivid picture of how everything in the plant is functioning.

The best way to improve the bottom line is to increase production. How do you double production? Triple it? Increase it 10 fold? Is this possible? The answer is a resounding yes.

Plant dynamics: Chapter 24

2004-06-17T09:54:00.000-07:00

The Emperor has no clothes....

Not so long ago, the person who picked up your garbage was called the "garbage collector". Now a days he is known as a "sanitation engineer". No matter what title is bestowed upon this person, the fact remains that he still collects garbage. Couching the truth by twisting words fools no one. The public sector has carried this "sham" to the height of absurditity. Titles upon titles, subtitles and other strange names are given to simple everyday jobs. The disease has spread to the private sector as well.

The Public sector employees keep adding sub-titles and multiplying. The job that can easily be done by one person is now split up in such a way that it takes 10 to do it now.
Forms are generated. The instructions for filling these forms are so convulated that no one can understand them. This beast keeps growing.

Hanging on to power;

Anyone who suggests a reduction in budget for these bloated bureaucracies is targeted.
Politicans dare not touch any of these sacred cows. And the public suffers.

The private sector bears the burden for all these new agencies. For the first time in American history, there are more people working in the public sector than the private sector. In other words 47% of the people in this country support the other 53%. This ratio is getting wider and wider. You don't need a looking glass to see that this system is doomed to fail.

There are lot of people in this country who are well aware of these facts. Every business-man knows this. He sees this cancer spreading, yet he is utterly powerless to stop it. The big multi-national corporations are reeling like drunkards. They are in bed with the politicans. Special tax breaks and other perks are enacted into law that give these giants special treatment.

Folks, for a business to succeed in this climate requires extra effort. You have to increase production to survive. There is nothing you can do about fixed costs. Your insurance costs will keep going up....this is totally out of your control. Taxes, both State and Federal will keep eating up to half of the fruits of your labor. Real estate taxes will keep going up. Energy costs will keep rising. Raw material prices will keep going up. Every step you take will cost you more. Tuition costs, medical expenses etc., all going up. It is indeed a depressing picture.

America's strength lays in its middle class. The gap between the rich and the poor is becoming wider and wider. This "wealth divide" is the root cause of all the third world countries woes. In the 3rd world you have the super rich and the poor. There is no middle class. When the middle class disappears the country falls apart. The patient has been sucked dry. There is no more blood left to be sucked. That's when the vampires feel the first pangs of hunger. Then the vampires turn on each other and the biggest , baddest vampires take over. There is no rule of law. The vampires make their own laws.

Pray thee, tell me of any farmer who won't tend to his fields. Or one who won't save seeds for the next seasons crop. Tell me of a farmer who won't tend to his animals. Does he not work 7 days a week? Does he spend more than he earns? Is he not a good neighbor?
If you can name one farmer who does not do all these things, then he is not a farmer. And if he is , he will waste his fathers heritage and good name.
The very Earth will curse him. The cries of pain of his unfed animals will reach the very doors of heavens.
But what about the farmer who does everything right? He looks after his flock, tends to his crops and works 7 days a week. " Thou shall sow, but strangers shalt reap thy fields". See any connection?

13 yards of concrete: Chapter 23

2004-06-16T09:17:00.000-07:00

Before joining the union I worked for a small construction outfit that built houses, duplexes and apartments. This was a non-union shop. These were bad times as far as the economy went. I was thankful that I had a job.

Physically, I was fit as a fiddle. This was back breaking work and by the end of the day, there were times when my muscles ached. At night I would go to the library and read all the books on different construction methods and techniques. In a couple of months I had read every book on construction techniques that was available at our local library. With my maths background I had no trouble understanding the simple formulas for calculating load bearing walls, steps and risers and how to lay them out. The different roof styles, laying out bird's mouth cuts and angles. During the day all these principles were put to practice and reinforced in my mind.

Mr. Keys was my foreman at this time. He was great guy and an excellent carpenter. During our lunch breaks I would ask him all kinds of questions. He enjoyed this.

The layout guy:

It's the lead carpenters job to do "the lay-out" work. This is where every opening for doors and windows is layed out. The length of the walls, corners, headers, cripples, stairs etc are all laid out. This information is taken off the master blue-print.
Mr. Key's soon realised that I was really good at laying out the grids etc. Next thing you know, I was made the lead carpenter. I also got a dollar an hour raise in my miserable pay scale.

The size of our crew varied depending on the size of the job. On smaller jobs there would be only 4 of us with one guy acting as the foreman. On big apartment complexes there would be 12 of us split up into 3 crews. That meant there were 3 fore-men on bigger job sites.

My nightmare begins:
When the news hit town that I had been "promoted" to be the lead-man and that I had been awarded an extra dollar per hour in my pay scale, some folks didn't like it. There were guys who had been on the job a lot longer than me. The fact that I was making more than some of these veterans was a sore point. My life became a living hell. A few guys would rave and rant all day aiming their venom directly at me.

I went over to see Mr. Keys...and told him what was going on. He was well aware of this and told me this was to be expected. He had no other words of wisdom for me....I was on my own.

Things went from bad to worse. I dreaded going to work. I put up with this out of necessity....I needed the job. It was at this time that I started to look for a different job and by a miracle I ended up with the union.

As I look back at my life , I realise that every disaster was a blessing in disguise. The good Lord has a strange way of nudging one in the right direction. Years later I would run into these guys....they were still carpenters....and I would say a silent prayer for them.

People abhor change. So beware when instituting new policies or getting new guys into your plant. The old management will resort to every dirty trick in the book to sabotage your new policies and changes.

Machine Designs: Dos and Don'ts: Chapter 22

2004-06-15T10:12:00.001-07:00

13 yards of concrete:

When I first started out as a journeyman millwright and a journeyman carpenter things were not going so good. The economy was in a recession, interest rates were sky high and inflation was out of control. I was the lowest member on the totem pole, based on years of service. Hence the only jobs I was sent to were the ones that no one else wanted. I had to drive over a 100 miles one way. I was always given the hardest and the dirtiest jobs. Most of the time I was knee deep in muck and mud, laying out the foundations. As soon as the concrete was poured and we had a nice smooth, dry surface to work on, I was sent to the next hole. Wisconsin winters are brutal. The worst thing that you can do is to get your feet wet during winter. I learnt that real fast.

Seemed to me that everyone in our union was related! We had nephews, uncles, cousins, fathers, second cousins, brother-in-laws etc. Most were from local farm families. These were all big, burly guys. Simple country folks. Conversations always centered around hunting and fishing. Curious by nature, I would always ask questions that seemed dumb to these guys. Questions like how much milk does an average cow give. Ofcourse, I got 20 different answers from 20 different guys. Questions related to different crops, yields per acre, price per acre, fertilizers and how it was applied and when was the best time to apply manure. Tractors and farm implements. Bee-keeping....endless questions.

Until I showed on the scene, no one had discussed these topics. They all knew ( or thought they knew) the answers to such simple questions. A simple question would lead into a lively debate and at times tempers flared over differences of opinions. Most of these guys were high school drop outs. The few that had finished high school could barely read or write. But, I really liked these guys as they stated their biases and opinions unabashed. A spade was a spade. There was no "politically correct" mumbo jumbo.

And they came to know me. I made a lot of friends, but I also made a lot of enemies. At this time I was also teaching night school at the local Technical institute. One of the subjects I taught was blue print reading. The fact that I could read blue prints was perceived as threat by a few foremen on the job-sites. I was always "tested" by the crew. Once the forms were set-up, I was always asked how much concrete was needed to fill the void. To me this was as easy as ABC, and I would do the simple calculations mentally and say 6.75 yards or whatever the answer happened to be. The foremen on our job sites could not do these calculations mentally. They used slide rulers. This was another ploy to impress the average millwright.

Mr. Hugh was the foreman on one of our job sites. Hugh was about 63 years old with a bushy head of snow white hair, rosy red cheeks and a twinkle in his eyes. He was a sweet gentle soul. He always reminded me of Santa Claus. We got along perfectly. Everytime Hugh had a problem understanding the blue prints, he called me aside and I would either render a 3D drawing or explain the whole concept to him. I made sure that the rest of gang didn't know this out of respect for Hugh.

We started at 7 in the morning and worked till 3p.m in the afternoon. At around 2.45p.m. all work would come to a stop. Everyone started picking up their tools and putting stuff away. By 3p.m. the whole crew was headed for the gate. Since I was the youngest and the junior most member, I was assigned tasks that I had to do before I left. So I was usually the last one to leave.

Once you start pouring concrete you don't stop till the job is done. The job required that there be at least one carpenter on hand while the concrete was being poured. 90% of the time this meant that I had to stay on the job site till the concrete crew were finished. Then I had to go around and install all the key-ways and other bolts etc., while the concrete was still green. None of the senior members cherished this task. It meant crawling up and down scaffoldings and ladders carrying all kinds of steel bolts and key-ways. I didn't mind doing this at all and so this task was left for me almost all the time. In addition I had to make sure that all nuts and bolts holding the forms were secure and that no critical bolt patterns got shifted during the pour.

It was around 2.30 p.m. one hot afternoon, when we finished forming a section of a retaining wall. Mark, who was the superintendent, came by with his slide ruler. It was his job to order the concrete. I was standing on the top of this wall. And without thinking I shouted out, "Hey Mark we need 13 yards of concrete". Everyone on the job site heard me. Mark utterly ignored me and proceeded to pull out his slide ruler. After about 5 minutes on the slide ruler he shouted out, " We need 10 yards of concrete". Everyone heard this.

By 3 p.m. when the concrete trucks arrived, everyone was gone except the concrete crew and the lone carpenter. Around 7 p.m. the concrete trucks ran out of concrete and we were still about 10 inches below grade. The concrete guys were furious. One of them went and fetched Mark from his office trailer. We needed 3 more yards of concrete to finish the job. It is well past 7 p.m. by now. The concrete plant was shut down for the day. The wall had to be poured in one shot. Mark made some emergency calls. The concrete plant had to be re-opened and 3 miserable yards of concrete had to be custom mixed. It was almost 10.30 p.m. before the 3 yards of concrete arrived and we could finish pouring the wall. By the time I finished putting in all the key-ways and bolts, it was past midnight.

13 yards of concrete:

Next morning when I showed up at the job site , I was summoned to Mark's trailer. Mark handed me the "pink slip". He didn't say a word. I picked up my tools and left the job-site.

Machine Design: Dos and Don'ts: Chapter 21

2004-06-14T10:01:00.000-07:00

The mouse trap powered car:
One day my son came home with a mouse trap. I think he was about 11 years old at that time. The teacher had told the class that they had to design a car that was powered by a mouse trap. There could be no motors or springs or other power-assist mechanisms, otherwise the project would be disqualified.
Each student had to work on his own. The class was not divided into small groups as was the case in some of the previous projects.
This had been an on going project over the years at this high school. The object was simple. The car that went the furthest won first prize and all the bragging rights. In addition the winning car was placed in a show case at the high school, with the winners name, proudly displayed.
My hat off to whoever came up with this brilliant idea. It was a simple idea, yet not as easy as it sounded. Since all the previous winning designs were already on display, the kids had a pretty good idea about what to do. The problem was if the kids followed the existing winning designs, they would end up with the same results.
I followed my son's progress with great interest. He prototyped a few designs but wasn't too happy with the results. He needed some wheels. So I made some light weight wheels using some 1/8 inch plastic. He didn't like these wheels at all.
He finally started using AOL disks. We kept getting these dumb AOL disks in the mail by the hunderd. These were perfectly round, stiff and light weight. Plus they added some color to the project. For the rear wheels he used 2 LPs that he bought at the local thrift store. Finally , the project was done and he was kind-of-glad that this nightmare was over.
Confession time:
I must confess I couldn't stop thinking about this mouse-trap powered car. Designs, calculations, ratios etc., flooded my mind. I wanted to "guide" my kid in the right design direction. I gave him hints and suggestions about using pulleys and how they worked. I think I drove him nuts. It was my wife who finally suggested that I stay out of the kid's project and let him design it on his own. "How else will he learn" she said.
She was right. It took a great amount of self-control on my part to keep my mouth shut from that point on. And I learnt a valuable lesson about raising kids. Let the kids learn from their own mistakes. (Easier said than done...sigh).
The Day of the competition:
On the day of the competition, we all looked at the entries. It was obvious that 90% of the entries were not designed by 11 year old kids. Some frames were made on CNC controlled milling machines. There was no way an 11 year old could have produced these results. The proud fathers had this "look" on their faces, some were even smirking....
and the competition began.....
How to spot a winner...
In a corner, all by himself, stood a skinny little kid, with thick horn rimmed glasses. He was all alone. Neither his mother nor his father had shown up for this competition. He was being raised by a single mother....His mother was probably working that day...
He was cradling his Mouse-trap car in his arms. The whole car was made out of styrofoam, including the wheels. He had carved the whole thing using nothing more than a sharp utility knife. There was something different about this car....
Everybody had mounted the mouse trap on top of their contraptions. This skinny kid had his mouse trap mounted at the bottom of his car. On one side of his car, he had mounted a a small section of a comb. This comb was held to-gether by two clothes pins. The comb acted like a limited slip differential..and released the power in small increments.
When the mouse trap was released, at the starting gate, the sudden power burst made the tires slip on the slick floor. Almost 50% of the power transmitted was wasted in slippage and by now the mouse spring had travelled over half its arc. Most entries had this "tire " slippage problem. In addition the weight of the car played a significant role in distance covered.
The skinny kid bent down, cranked the mouse trap and let his car go. It started to move, real slow. Unlike all the other entries, where the contraptions took off like bats out of hell, this car started out real slow. And then gently it started to gain speed. None of the power was wasted. Every ounce of the spring tension was transmitted to the the wheels in small measured doses. The tires did not slip. No energy was wasted.
The car kept going....it just kept going. There was total silence in the hall. Suddenly every body realized that this baby wasn't stopping anytime soon. The car was pretty ugly, yet there was a certain elegance in its simplicity and design. This kid had used nothing more than a carving knife, some styrofoam and 2 clothes pins...
He had put to shame all the CNC designs and the fancy paint schemes. The kid set a new record for distance travelled by a mouse-trap powered car. And he had designed this all by himself. His design was a radical departure from anything done previously.
Genius is a class unto itself.

The sorry state of affairs: Chapter 20

2004-06-13T11:59:00.000-07:00

Lack of innovations in the converting industry: continued...
Auto makers spend millions of dollars at auto shows. Every year the media is abuzz with rumors and gossip about the upcoming new models. Hundreds of magazines are devoted to the auto industry. The reasons for this are obvious. There is a market out there that can support these million dollar advertizing blitzes.
In the converting industry, we do not have a big enough market to justify this kind of expense. The lack of R and D investment by the major manufacturers of converting equipment is the biggest stumbling block to innovation. And unlike the auto industry, converting companies do not routinely buy new models every year. First of all, there aren't any new models out there and secondly the costs associated in replacing machines is quite high.
Faced with this climate converting plants have 3 options:
1) To retrofit existing equipment to increase speed.
2) To buy brand new machines in hopes of increasing production.
3) Buy used equipment.
There is a fourth option. And that is to redesign a machine in-house.
Quad Graphics started out in Wisconsin. In no time at all they became the biggest and most profitable outfits in the country. The owner of the company realized that there weren't any machines out there that could do what needed to be done. So he had machines designed to meet his needs. These were one-of-kind custom built units. No one else in the World had these machines......and the rest is history.
Innovating new designs:
Take a 1,000 blocks of granite. Take a 1,000 guys and give them a hammer and a chisel each. Their mission? To carve out a human figure resembling "David". How many of these guys are going to produce anything that even resembles a human form?
This same principle applies to machine designers. I have seen companies waste tons of money designing "Rube Goldbergs". The task is given to some-one in the plant to design some contraption that will auto-mate some aspect of the production line. This is not fair to the plant guy in-charge of the mission. He has no idea what he is supposed to do, much less design a proto-type. If it's the owner who takes up this task...then there is nothing you can tell him..it's his money.
Designing machines is an art. If this is approached strictly from an engineering point of view then you end up with machines that looks like "Sherman tanks". What one needs is a lean, mean racing machine that leaves the competition in the dust..not a tank.
And just like on a racing car, careful thought has to be given to speed with which tires can be changed, spark plugs can be replaced, provisions for oil changes have to be made etc. The whole concept is to speed up every aspect of daily tasks that have to be performed to keep the car in top operating condition.
On the other hand, converting equipment is designed by the-seat-off one's pant mentality. No thought is given to the operator. The poor operator of these contraptions is the last thing on the designer's mind. If a car manufacturer followed these design rules, they wouldn't last too long.
Dr. Winder's rule no.1
The machine operator is the most important member of your staff. He can make the company millions of dollars in profit. I have seen slitter rewinders in operation , where the waste factor approached 12%! It wasn't the fault of the operator, it was a bad machine design. It all goes back to the guy sharpening drill bits by hand.

The sorry state of affairs: Chapter 19

2004-06-12T10:08:00.000-07:00

Lack of innovation in the converting industry:
If we look at the history of auto-mobile development from its' inception to the present day, we see remarkable changes. Same applies to aviation and just about every other industry except the converting and paper mill industry.
The reasons for this sad state of affairs are pretty obvious. In its heyday, the paper mills were making money hand-over-fist. Very little attention was paid to the actual machinery. Research and development were relegated to the back burner and the mills went about with their business. Lack of competition was the primary culprit.
By the 70's, cracks started to appear in this invincible paper-mill juggernaut. Rivers, lakes and ground-water contamination, air pollution and high energy costs finally stirred this beast from its slumber. By the 80's mills were closing left right and center. As usual, when things go bad, you suddenly see a frenzy of mergers and consolidations take place. Transfusing new blood into a disease ridden patient..never saves any lives. It's a total waste of good blood.
The only hope of saving this "sick" patient is to do radical surgery. Get rid of the diseased parts, replace broken bones with new titanium joints and above all "fire" the old doctor. "Do not pour new wine into old skins"..
This lack of innovation extended to the paper converting machinery manufacturers. There weren't that many manufacturers to begin with. All kinds of half baked ill conceived designs were let loose on the poor public. Some designs were so bad that they should have been used as boat anchors rather than for converting paper.
By the late 90's most of these machinery manufacturers were history. New players had jumped into the market place, but they too were having a rough time making a go. The basic design remained the same.
Imagine, if you will, if the auto mobile had not changed since the 40's. What kind of contraptions would we be driving? Sure, we could still be able to get from point A to point B, but it would take twice as long. The thought of all these clunkers clogging our highways is a nightmare. Unfortunately, our converting machines are still stuck in the dark ages.
Let's continue with our automobile example and explore this concept a little more. The race car driver is the one who puts his life on the line everytime he gets behind the wheel of a race car. He tells the engineers and pit crew about all the problems with the car. It's this feed back from the driver that allows the manufacturing team to make the necessary design changes. If, on the other hand, this driver says that every other car on the race track is faster than the one he is driving, folks we have a problem. If all the other cars are Chevys and he is driving a Ford, then he ( the driver) wants a different, faster engine or a Chevy. You can take the best driver in the USA and give him a lousy car, folks, he isn't going to win any races.
The race car seat is designed so that driver is comfortable. In addition, when seated his ( the driver's) feet should reach the pedals. Obvious. Isn't it?
If spark plugs need changing, the mechanic should be able to get at the plugs, easily and quickly. Obvious? No?
If a tire has to be replaced, it should be easy as pie. Obvious? No?
If the car needs fuel....one should be able to fuel it as fast as one can. Self evident? No?
What if new brake pads are needed?
These above mentioned points are self evident. You don't need a rocket scientist to figure them out.
Back to converting machines. Converting machines are designed by guys who have never run one in their entire lives!!! Are you getting the drift?
We will explore this further in future posts.

Buying Equipment: Chapter 18

2004-06-11T12:10:00.000-07:00

Today, we will continue from where we left of.
Penny wise pound foolish:
I had 3 guys stop in to look at some equipment. One was the owner , the other was the salesman and the third guy was the one who would actually run the machine. I guess you could classify him as the actual machine operator.
The boss man was a real gentleman. He asked a lot of questions...mostly technical questions related to the actual production speeds etc. Plus he took a lot of notes. The sales guy didn't ask too many questions. And the actual production guy didn't say a word.
After our initial meeting , which lasted a few hours, it was decided that the machine operator would come back with actual stock material and we would trial run the material. In addition I would teach the operator the basic fundamentals of the machine. We went back to the warehouse so that the boss-man could take a final look at the machine in question.
I was working on another machine at this time and there were parts laying all over the place. This machine had a whole bunch of score knives. As I disassembled these knives, I would set them on a skid. So the skid had old knife holders and rotary blades laying all over.
I junk these old blades and always put new blades on all the machines I retrofit. A few days later we test ran the machine and showed the operation guy all the ropes. He reported back to the boss-man.
The boss-man and I discussed things and the machine was sold. It was while we were getting the machine ready for shipping that I got a call from the operator. He wanted a few of those old blades. I asked him why he wanted old blades. "Well" he says "when the new blades get dull, I will replace them with these old blades". I didn't say a word, but steam was coming out of my ears.
I picked up the phone and called the boss-man. I asked the boss-man a question. "If you had a brand new car....and it needed a set of tires...would you put on used tires"? He was quite ataken back by this. The boss-man had done his homework and knew what he was buying. He knew how much money this machine would generate for the company. The operator on the other hand had a different "mind-set".
As the owner or the plant manager, you should keep these points in mind. Don't let your $10 dollar-an-hour operator make machine buying decisions for you. By all means pay attention to what the operator has to say....but you make the final decision. Don't be penny wise and pound foolish.

Buying Equipment: Chapter 17

2004-06-10T10:40:00.000-07:00

Penny wise pound foolish:
Used machinery buyers come in all shapes and sizes. Each buyer has his own "system" of making the final decision.
If it's a really big company, the decision to buy a used piece of equipment is relegated to the division manager or the plant manager. The owner of a small company generally makes the final decision. A smart plant manager is worth his weight in gold. He can save a big company millions of dollars by making smart used equipment buys. I have seen companies spend millions of dollars in buying brand new equipment. A few months later this brand new machine is shoved into a corner to gather dust. It was the wrong machine for the job. I have seen this scene played out over and over again.
A few years ago, I had gentleman come over to see me. He had set up a unique binding operation. There was nothing on the market that could do what he wanted to do. Everything was done by hand. There were over 100 employees working 3 shifts at this plant. I spent about 2 weeks observing their operation. After thinking about this for a while, I came up with an idea to automate one aspect of his operation. To keep costs down, I suggested we make one unit....a small unit, to see ..how it played out. I started out with an old machine, stripped this machine down to bare bones and started adding the features that were needed. Even though this was a proto-type, I followed my usual operating procedures. All parts stripped to bare metal. These parts were then sent out to be primed and painted. All shafts, brackets etc were sent to the plater to be either nickel plated or chrome plated. When the machine was finally assembled it was a beauty.
This machine worked better than he expected. They could do 2,000 sets an hour compared to about a 1,000 sets a day by hand. It took 2 people to run the machine. One person could run the machine but he couldn't keep up with the output. Manually, they had 8 guys doing this job. You figure out the maths and savings. I was given an order for 6 more units. As a matter of fact just about every piece of equipment they had in that plant was retrofitted or custom made by us.
This plant was bought out by a giant corporation. The owner told me, he had an offer that he couldn't refuse. He retired.
This was a great customer and over the years we had developed a very good working relationship. If anything went wrong I would go service the machines.
Once the new company took over I stopped getting any calls from them. I called the plant manager and she explained to me that it was the new company's policy to do all service work in-house.
About a year and half later , I got an emergency call from this company. One of the machine was not working and the second one was acting up. The in-house service guys couldn't fix it. So, I went over. I knew every inch of this plant, since I was the one who had set-up all these machines. In the back room I had set up up a small area, where all critical parts for these machines were stored. Special relays, limit switches, sprockets, gears etc etc. I had suggested that all critical components should be on hand to reduce down-time to a minimum. The last owner thought that this was an excellent idea.
The problem turned out to be a worn out limit switch on one of the units. In addition the encoder was on its last legs on both the machines. No problem, I thought, I will just go in the spare room and get the parts. When I went back the whole "spare" room had been turned into a break area. I couldn't see the spares anywhere. Turns out that no one knew what all this "junk" was and it got thrown out. Sigh.
I had to order replacement parts. It was at this time that I suggested to the plant manager that she order extra limit switches. "How much are they" she asked. "About $16 dollars a piece" I replied. "16 dollars" she gasped...and said no.
Penny wise pound foolish
It took two days to get the parts in. I had to make 2 trips to fix these units. So with travel time etc my labor rate was twice what it would have been...had the parts been on hand. Don't forget the down time....One hour of my labor was equal to about 6 limit switches...
Oh, by the way, the service department turned out to be a 20 year old gal. She was a farm gal who knew more about milking cows than fixing machines.

Buying Equipment: Logic: Chapter 16

2004-06-09T09:54:00.000-07:00

When I first started the business that I am in today, I was quite apprenhensive. I was the new kid on the block. The major players had been in business for many years. Some were 3rd generation companies. It is inevitable in this business that pretty soon you get to know all the players. Some of these guys had huge big warehouses full of all kinds of used equipment. They had inventory that was worth millions of dollars. 12 salesmen, 4 gals who answered the phone, accounting departments, shipping departments, overseas offices in several different countries.....you get the picture.
Here I was....a one man operation, starting with hardly any capital and no real contacts.
Observations:
The first thing I noticed was that the salesmen at these big companies had an "attitude". They always gave the impression that they were extremely busy....and that taking a call was a special favor they were bestowing upon me. They made sure that our conversation was interrupted several times. So rule number 1 at these companies was "act busy".
Second thing I realized was that these guys did not know equipment. They were salesmen. So if a client had a certain unique need, they had no idea which machine would be the most suitable. Unless, ofcourse, the client gave them the exact make and model of a machine.....well, well...
Third thing I observed was that none of them ever touched any of the machines in inventory. So if a guard was dangling...they let it dangle. Machines were left out in the open, exposed to the elements.
I suddenly realized that here was a golden opportunity staring me in the face.
I started by totally disassembling a slitter rewinder....down to the bare frame. This was a Cam 10, a 72" wide dual drum surface rewinder. The frames, guards, etc. were all sand blasted , primed and painted. All bearings were replaced with high speed needle nosed bearings. This was one of the most difficult and expensive projects, as I needed to hold exact tolerances. The next part was redoing all the idler rollers, the bed rollers, the rider roller, anvil roller, etc.
The cost of having the rollers done was a shock. If only I had a lathe....
I finally finished rebuilding this slitter rewinder. I also built a custom skid for this unit, so it could be moved without damage. I sold this unit to the first customer who came in to look at it.
Dr. Winder buy's a lathe:
It cost me over $2,000 dollars to have a simple idler roller made at the local machine shops. After much thought and calculations, I went ahead and bought a heavy duty Monarch engine lathe. As usual, I took this lathe apart and rebuilt it. This lathe paid for itself in the next winder I rebuilt. Over the years this lathe has paid for itself a 100 times over.
A decision to buy a machine should be very simple. How long before the machine pays for itself...the pay back period is the most critical element. Second, most of the time, you can save a fortune by buying a used, rebuilt piece of equipment.
Third....who to buy from and why.
OCC Orange County Choppers:
I love watching this show on TV, where the father and son team make custom bikes. When the bike is finally done..it's a work of art.
Unfortunately, I cannot do the same to slitter rewinders or sheeters. I bring the machine back or restore it as close to original as possible. Updates can readily be added, if the customer wishes ie.. latest state of the arts tension control system, shaftless unwinds, brand new disc brakes, computerized drive system etc etc.

Making Choices: Chapter 15

2004-06-08T09:41:00.000-07:00

Best laid plans of men and mice....
Sometimes in the late 70s', OPEC raised the price of oil. This was a sudden move and it caught the World by surprise. Actually, the truth of the matter is that the World powers colluded on this plan....If I take off on this tangent....we would be off the subject.
The news media and the prophets of doom jumped on this band wagon. Our wiley politicans saw this as a golden opportunity to start up a whole new agency. Jimmy Carter was the president then. He called this "the moral equivalent to war..." and with great fan fare DOE ...The Department of Energy was created. This new Department was supposed to "save" millions of barrels of oil....Needless to say, like any other Federal Agency, this DOE grew ...and grew. Within a space of two years DOE was spending well in excess of 2 billion dollars a year!!! Not a single barrel of oil had been saved. Instead, the tax payers had to shell out an extra 2 billion dollars for these paper pushers.
New laws were passed. Mandates were issued to businesses and to car makers to increase miles per gallon. While the poor ordinary folks were shovelling more and more insulation into their attics and walls, brand new office buildings and complexes were being put up to house these new DOE sub departments.
After spending millions of dollars on studies...recommendations were issued. Lower the thermostat to 63-65 degrees. This will save the country so many million barrels of oil a year. One after the other these edicts poured out of DOE. Think about this for a minute. They spent 2 billion dollars to tell us that if we lowered our thermostats to 63 degrees , we would save energy. And the 55 miles per hour speed limit was passed into law.
At the height of his power, Hitler is reported to have said " Isn't it great that the public is so stupid". And he was right.
It was at this time that I was at the University of Wisconsin Madison attending a class in Advanced Energy Management.
We had top scientists from all over the USA and Canada. Engineers, coal plant managers, utilities, steel mills, Oak Ridge, etc etc etc.
One of the projects we were given was to figure out how to save energy in the manufacturing sector. We were divided into groups...chosen by pulling names out of a hat. There were 10 of us in my group. We were given a Sears vacuum cleaner.. a brand new vacuum cleaner. Our mission? To recommend manufacturing procedures that would save energy in the actual manufacturing process. I was the youngest member of this group. I looked up to all the older members of our class. We all lived at the campus, barring a few ,who stayed at hotels. So I got to know quite a few of my "classmates". They were all good guys.
Vacuum Cleaner Disassembly:
The whole class split up into their respective work stations. We elected the oldest guy to be our group leader. All 10 of us stood around this Sears vacuum cleaner. No one said a word. Each of us had our note pads, pens and fancy calculators....and we all stared at this vacuum cleaner. Finally, our group leader asked us for suggestions. No one said a word....silence. Being the youngest member, and a total green horn , compared to the rest of the group, I too kept my tongue in check....
Finally, I couldn't take it anymore. And I suggested, we take the vacuum cleaner apart. I mean take it apart and study every nut, bolt, screw, motor, brushes ....in short rip this baby down to its components. Then we study each piece.....The group agreed...there were no arguments.
In no time at all we had this vacuum cleaner in pieces. All laid out neatly on the table. One thing I noticed....most engineers in our group wrote in caps. Plus they had beautiful hand writing. I made a mental note of that....and to this day I write in caps. There are times when my brain is going faster than my hand and I switch to scribbling. But later, there are times when I can't read my own scribbles. well,..I try.
Even my "caps" suck.
Once the vacuum cleaner was disassembled...the active discussions began. Why, they even got heated at times. There were dozens and dozens of screws, some philips, some hex nuts tons of different kinds of screws. All these screws were to hold the body of the vacuum cleaner together. The body was in 10 different pieces. Now the discussion switched to "how to make screws" by using less energy. I mean this dicussion went on and on....and we hadn't even touched on any of the rest of the parts staring at us.
And....then....as I looked at these guys....a thought suddenly dawned on me. This was utter stupidity.
The Kid Speaks:
I raised my hand....Finally when they all stopped talking, I said "Why are we wasting our time talking about screws"? As I said this , I reached over and swept all the screws that were the topic of discussion, off the table. Then I paused, to see the group's reaction...Shock....utter shock....Before they could recover from this shock, I took the rest of the screws and swept them off as well.
"Gentlemen" I said, " We have to redesign the whole cover, so that no screws are needed. Not only will it save "energy" but also labor and reduce manufacturing costs."
By the end of the day....we had finished the project. All fancy calculations were done and reduced to "BTUs" saved. This complete report was submitted to the University. Iam sure they passed it on to Sears. It was Sears, after all , who had donated the vacuum cleaner in the first place.
Oh, by the way, I was offered 4 jobs.....

Making Choices: Chapter 14

2004-06-07T09:30:00.000-07:00

...As we saw in the last chapter, sometimes it takes a shock to make a company see the light. The bigger the company, the harder it is to change its course. In the private sector the economic forces weed out the weak and the inefficient. Public sector, on the other hand has a blanket immunity from any market conditions or realities. This is not entirely true, but by the time any kind of corrective action is taken....years have gone by and millions have suffered.
A public servant is just that...a servant of the public. It is the public servant's job to serve the public. Sounds beautiful doesn't it? A selfless, self sacrificing individual dedicating his or her life to the good of the country. Classic case of double speak. Today's public servants have one goal in mind. To seek out the maximum amount of power they can. Ofcourse, all this concentration of power comes at the expense of the general public. Think about it.
Do any so called public servants or elected officials produce anything? Anything at all?
Do they grow food like a farmer? Do they make steel? Do they dig coal? Do they produce paper? Anyone.....???
These elected officials make rules and regulations for the rest of the public. Law after law is passed. Look at our tax code. The most devious and unjust system ever designed. 10 days plus the first 5 months of a man's wages and earnings are taken away by the Government. 6 months out of the year you work to pay your taxes. Out of what's left you still pay a sales tax everytime you buy something...gas tax, this tax, that tax.
Meanwhile, these departments keep growing bigger and bigger. These bloated "servants of the public" are on a drunken orgy....with no end in sight. Deficit after deficit. Essential services are cut. School programs are cut, taxes are raised...even more, real state taxes go up......but never....are these bloated governmental agencies reduced.
The rules that apply to the private sector....do not apply to the Public sector. If a private company did what these folks do..you wouldn't last a day. I am sure, by now you get a clear picture of what's going on. The foxes are in-charge of the hen house.
The business owner is well aware of all these problems. Folks, don't forget the "Global economy", "free trade" and all the other fancy acronyms. All these are more fancy schemes to suck the last drop out of the patient.
Why ?
Simple. Anyone elected to a public office will do everything in his or her power to keep that job. He will try to create more rules and regulations. His sole mission is to spend more money than he did last year. In the Public sector common sense is turned up side down. Whereas in the Private sector, the goal is to be a lean, mean machine, to save as much money as possible, to be more productive in the Public sector none of these rules apply to the Public sector. The word "productive" is not in their vocabulary. The more departments this guy creates , the more important he feels.
Recipe for disaster.
This disease spreads to big corporations and small companies alike. Take Chrysler corp. as an example. They had so many different departments, and so many different layers, that the left hand didn't know what the right hand was doing. Finally the company went bankrupt. Utterly, totally bankrupt. It is at this point that Mr. Lee Iacocca (sp?) was brought in...to try to salvage this company. Why was this gentleman successful in saving Chrysler? I mean they had hundreds of folks who were getting ungodly amounts of compensation to run Chrysler. Had everyone at Chrysler had a lobotomy? Answer, yes...in a manner of speaking. All these folks had been brainwashed into thinking that they knew what they were doing. It took an outsider to come in....and remove this cancer. This malignant and deadly disease that had spread to every nook and cranny at Chrysler. Since this was not a governmental agency, Mr Lee could do as he wished..no ifs, buts or nos.
First, he fired all the department heads...the punk drunk leeches.
The Power players:
Quite a few converting and sheeting plants have a few individuals that suffer from this "know-it-all syndrome". This includes a few owners as well. Only one thing, no two things, that can change this mind-set. One is a self realization from within, and the other is bankruptcy. For no outside force can change this mind-set.

Making Choices: Chapter 13

2004-06-06T09:49:00.000-07:00

K Mart at one time was a major player in the retailing industry. The existing management patted itself on the back....and no one questioned or dared to question anything. If you were to retain your job, you followed the bull crap coming out of management like a bunch of lemmings. Folks these guys were being paid millions of dollars in compensation plus all the perks. Were they asleep at the switch? Had they been lulled into a false sense of security? Could they not see the hand writing on the wall? Next thing....the company went bankrupt. Heads rolled. And the finger pointing began....and so it goes....
Nature's built-in extinction program.
An amoeba is a single celled organism. It can reproduce sexually or asexually. If you take a small beaker full of water and introduce one tiny little amoeba into this medium, pretty soon you have a whole colony. As the amoeba multiply they thrive and the numbers keep going up. This multiplication follows an expotential curve...2, 4, 8, 16, 32,....etc...till it's into the millions and then billions. Then suddenly...something strange happens...This colony hits a "critical mass". At this point in time the colony starts to die....Think K-Mart.....
Obviously , humans have a few more cells than the lowly amoeba. But if we follow Darwins theory...are we not direct descendants of these one celled creatures? Look around you. Have you not seen great chain stores go extinct? Paper mills..that were once giants in the American economy, no longer exist. The list goes on and on....
Once a company reaches this "critical mass", all innovations mysteriously stop happening. The company is top heavy. Management thinks it's invincible. The layer upon layer of management, rules, double-speak, lies and more lies, cooking of books, all spell its doom.
History Repeats Itself.
This act of self destruction doesn't only apply to companies or corporations, but extends to Nations as well. Look at the great civilizations of the past. Their ruins attest to their glory. Where are they to-day? Gone." Crown and septre must come down
and mingle with the dust". Even our sun, one day, will cease to exit.
What does all this have to do with buying a winder?
If you have been reading Dr. Winder's posts and you don't see the connection, then Iam afraid, the rest of the posts are not going to be much help to you. And to those folks who have followed these posts and are starting to see the picture..welcome. " Cast yea not pearls before swines".
Remember, a Winder is nothing more than a tool. The better the tool, the better the results. Yet, you can't discount this..." a bad workman always quarrels with his tools".
Your machine operator must have training. You cannot expect your average car driver to race at the Indy 500. Even if you give him the best car at the starting line.
Without proper training the operator picks up "bad habits". When a new employee is hired, he too picks up on these embedded practices. I have seen a whole bunch of "morons" running around operating machines. It amazes me that the company still makes money ,in spite of all these short comings. I never blame the operators. It is the owner or the plant manager's responsibility to make sure that proper training is imparted to the plant personnel.
OSHA standards dictate that a forklift operator must have proper certification and training. An electrician must be State certified. A plumber , truck driver etc...all must have certifications in their respective trades. Do any of your operators have any kind of certification? No? Did you train any of them? Who trained you? Why, you say, I ran this machine for 25 years!! I can make more rolls-per-shift on this machine than any one else in our plant. I can make a 1,000 rolls per shift! Now think of the master lathe operator...who can sharpen a drill bit in 15 minutes.
Just because you had your head buried in the sand for the last 25 years, doesn't mean the World stood still. A legally blind operator ( State run in Ohio...society for the blind) produces 30,000 rolls a day!!...And she is blind...man.. only 18 years old..How's that grab you?
Take your Blinders off.

Auctions: Inner workings: Chapter 12

2004-06-05T09:54:00.000-07:00

Seeking opinions:
Yahoo and Google are multi billion dollar companies. They have millions of people using their services every day. When you first log on to either Yahoo or Google....you will see that at the bottom of the page there is a place where you can send comments or suggestions.
Here are two industry giants, with unlimited resources, in-house research departments and think tanks....yet they still seek out suggestions from the general user.( Actually most major search engines have this suggestion box.) Why?? Why would a billion dollar company bother with the humble opinions of the average Joe Blow? Think about it.
The beauty and elegance of this boggles the mind. With this one little step, they have tapped into the sum knowledge of every user on the net. If there is some aspect of the search engine that bothers you, or you find something that is utterly stupid, all you have to do is send your comments to the powers to be. Hopefully, someone on the other end is actually reading your comments and they can then rectify the problem.
Now back to our machine buying topic.
Once you have determined that you need a new slitter rewinder, you now have to figure out what make and type is best suited to your needs. This is another area where your machine operator or plant manager can either make you or break you. Let's explore this last statement.
Take a top notch lathe operator. Lets say this guy has 30 plus years in the industry. Only problem is that he has never learnt how to program or run a fully automated CNC lathe. This guy will do everything in his power to make sure that his "top dog" status remains intact, within this company. You now have an 20 year old kid...straight out of the local Technical college. This kid has worked with computers since he was a toddler. He can punch in the code so fast that all you see is a blur of fingers on the keyboard. Give him a blueprint and he will make you the part within minutes. Now the top dog resents this. He lets everyone within ear shot know that these new kids have no respect or knowledge about the true art of machining. To make his point he asks stupid questions that only an old timer would know. "Let's see you sharpen this drill bit on that grinder" says the Top Dog. The new kid has never learnt to sharpen a drill bit by hand ( manually , that is). He just put it in the automatic grinder and out came the drill bit all shiney and good as new. " Why" says the kid "we just threw the dull bits in a bucket and once a month I spent a few hours sharpening them in the automatic drill sharpening machine. Took about 30 seconds to sharpen one.." he adds. This is like throwing salt on the Top Dog's wounds. It takes him 15 minutes to sharpen a drill bit , manually . It took several years before he got the time down to 15 minutes per drill bit....
Keep the above points in mind:
You, as the owner or the plant manager must keep the above points in mind. Understand the reasons and motives of your machine operators. If your machine operator is only familiar with running an old Cameron slitter rewinder, he will do everything in his power to try to convince you to buy another Cameron. Even though a Dusenbery or a Titan would increase your production a 100 fold. Iam not suggesting that you utterly ignore your machine operators' input. Listen, take notes and mark down each operators' input.
It is also a good idea at this point to mark down your own choices. Analyse, why are you leaning towards a particular make? Is it out of familiarity? Or affinity for a certain make and model?. Keep investigating till you have left no stone unturned.
Getting outside help:
Even billion dollar corporations hire specialists and consultants to come in and suggest improvements. These consultants are not cheap. At the end of the day a consultant may say that he could find no better options than the ones already in place.
(That is if the consultant is a honest guy.) Even if this happens, it's still money well spent. At least management gets assurance doubly assured. On the other hand, once you call in a consultant, set simple ground rules.
The Golden Rule
Above all, to thine own self be true. Tell the consultant to be brutally honest. No ego, no position is too sacred. If he sees anything that needs to be corrected or changed, so be it. Spare no one. The whole company is under the microscope. No exam is to be spared..be it oral or rectal....
Lay your pride and ego to rest. Let the consultant do his job..unhindered. What's the point of calling in outside help if you are not ready for it? It's like going to a doctor....you don't tell the doctor what to do..you merely tell him about the pain or the symptoms...he examines you and then recommends a course of action.
Dr. Winder Reports For Duty:
I detest politicans. They talk out of both sides of their mouths at the same time. Have you ever heard a reporter ask a politican a question? A simple question...the answer to which is either a "yes" or a "No"? After 15 minutes talking utter nonsense, using strange words.....you suddenly realise that you didn't understand a darn thing he said. Meanwhile 15 minutes of your life has just flashed by and the TV show has filled in its alloted time slot. This crap happens over and over. Day in day out. Then you get several TV personalities analyse what the politican just said. Another half an hour down the tubes...While these TV announcer with their nose jobs, fake boobs, skin stretched tighter than a snare drum, and the classic "hollow eyes" ( more plastic surgery) use more strange words and flash their bleached tooth smiles. Who are they fooling? They are well past their primes...old hags trying to look like young models,
And old men trying to look like movie stars. This bull crap is beamed daily into our homes. Why? Simply because people get so sick of this that they stop listening. That is exactly what the whole show is designed to do ...to lull the masses into a deep hypnotic sleep. Meanwhile, the elected officials stay in power.
Don't let this disease spread to your company. As the owner or plant manager be true to your company. If you find a problem....state it clearly. Give simple answers...yes or no..will work dandy.

Auctions: Inner workings: Chapter 11

2004-06-04T09:37:00.000-07:00

To buy or not to buy.
Let's start out by saying that you have done your homework and know exactly what make and type of machine you want. You have also checked and know what a brand new unit will cost you. Obviously, all pay back periods, depreciation schedules and all other costs associated with this move have been analysed. If you haven't done all this, then you are simply not ready to buy a machine. You don't have enough information to make an intelligent decision. To make assurance doubly assured, let's go over these points in a little more detail.
What do you do before you buy a house? Ofcourse, buying a house is not the same as buying a machine. Even if the new machine costs 10 times more than your house, its still not the same thing. I am merely pointing out the obvious. Do your homework!
How to make the decision to buy a machine.
1) Decision to buy a machine has to be made by the owner...if its a small company. If it's a medium sized company and the owner is actively involved in the day to day operations, then the owner still has to make the decision. Bigger companies have managers that make these decisions. If you are a small or medium sized company, one of the biggest mistake you can make is to let a machine operator or some other member of your staff make this decision for you. We shall qualify this statement.
Let's say you have an old slitter rewinder. This antique has been in your plant since you started the company, a few years back. It's not a bad machine...why ? Because if you didn't have this slitter rewinder you wouldn't be where you are today. You know that this machine leaves a lot to be desired...since you actually ran it, or still run it from time to time. You have a list of things that you wish that you had on this machine. A better unwind system. A better tension control system. Oh, how you wish you had a shaftless unwind system. Perhaps a hydro-pneumatic rider roll system for better density control. And you absolutely detest the old knife holders..and so...the list goes on....
This unit generates say 10% of your total sales. It is your work horse. Without this machine your sales would suffer a big blow. You also hate this segment of your business because although it generates 10% by volume, of your total sales, it generates the least amount of profit...percentage-wise.
Your calculations indicate that if you could increase production by a mere 10 extra rolls per day, off this machine.....You would feel better...much much better...
Company mind set.
For the last 5 years you (the owner) ran this machine yourself. Noone can run this machine faster or produce more rolls per shift than you. You now have a couple of operators that run this machine for you. The only time you run it is when someone falls sick or a deadline has to be met. So you are an expert on this machine. Lets say this machine, on average produces a 100 rolls a day. If you were running it , you could produce 102 rolls.....but that runs you ragged.
You discover that a new slitter rewinder with the most basic features lists for $500,000. Every thing else is an option. If you add all the other options, the price jumps to $750,000. Based on the price you run a costing analysis....to try to figure out the payback period. Your calculations show that it would take 10 years to pay off this machine. The salesman ( the one who is trying to sell you this machine) will point out all the tax loop holes, the depreciation expense etc etc to try to soften the blow. You have worked like a dog, to get to where you are today. The thought that 10 years from now, the yoke of this debt will finally be lifted off your shoulders, leaves a bad taste in your mouth. It scares the hell out of you!! What if things slow down? What if the economy takes a dump? No matter what happens in the future, you know this debt will hang on your head. This single decision can either make you or break you. You cannot let a $10 dollar an hour worker make this decision!!

Auctions: Inner workings: Chapter 10

2004-06-03T09:19:00.000-07:00

The right attitude.
As you gain more insight into the inner workings of an auction, you will feel quite comfortable when it comes to bidding. However, before you get too comfortable, there is a lot more you need to know.
Costing analysis.
One of the biggest mistakes people make is not calculating their exact cost of an item at an auction. This is pretty easy to figure out.
1) Calculate your per-day and your per-hour cost...eg...$25. per-hour...$200 per-day.
2) Calculate your travel costs to the auction site....air fare...car rental,
food, lodging and any other expenses incured.
3) These costs have to be added to the item that you won at the auction.
Now lets continue with our example from the last post....Assume your bid of $800 dollars was the high bid for the plastic banding machine. To this add $80. auction commission. Add $200 for loading and another $200 dollars for transport charges. So far your cost is (800+ 80+ 200+ 200=) $1,280 dollars. Depending on your distance from the auction, your out of pocket expenses will vary. However, you need to add these expenses to the base cost of the plastic bander. Assuming it took you a day to go back and forth to the auction, add $200 to this for your lost wages. Add your car expense etc etc. Lets say this comes to ( 200+ 100 =) $300 dollars. Now this bander is up to $ 1,580 dollars.
Your nightmare is just beginning....
Next morning, with eager anticipation, you await the arrival of this plastic bander. You tell all your co-workers how "cool" you were at the auction and how you "blew " all the competition out of the water. You are beaming with pride at your astute judgement. From this day forward, you resolve to buy all your future machines from auctions. You are "hooked". You have caught the auction fever. Alas, if only you knew....
The nightmare begins....
At about 11 a.m. the trucker arrives at your loading dock. You unload the bander, sign the bill of lading and proceed to admire your acquisition. The plant folks gather around, why even the office staff is out there....all eyes are on you....
No one knows how to turn this contraption on. Finally, you figure out how to get the power to the machine and turn it on.....
Then nothing. I mean nothing happens. About 2 hours of monkeying around later, you realise something is seriously wrong with this machine. No one at the plant has any clues as to what the problem is. In desperation, you get on the phone and start calling all the local repair geniuses you know. Finally, you realise that you have to call someone in, to fix this bander.
Next day, the grease monkey shows up. He charges $60 bucks an hour plus parts. The grease monkey spends a few hours poking around and running electrical tests. after 4 hours you get the results....
1) the motor is toast. Motor cost $150 dollars. To take out the old motor and replace it...Labor cost $150.00. He isn't done yet.
This machine was run 24/7...The clinchers are shot. New clinchers and new seal heads about $500 dollars...labor about $125 dollars.
He recommends that all relays be replaced...they are on their last legs...New relays plus labor $200 dollars. " If it was my machine", says the mechanic, " I would junk it".
At the bottom of the estimate sheet is his charge of $240 dollars for giving you this good news. After you sign the invoice...and after the grease monkey leaves... you realise.....what a nightmare you got yourself into.

Auctions: Inner workings: Chapter 9

2004-06-02T10:09:00.000-07:00

Auctions: The Ego factors.
To be successful at auctions, one has to dump all emotions at the door. Don't walk into an auction with any emotional baggage. Sounds simple...doesn't it? Hmmmm.
If you have been following these posts, recall what I wrote earlier. People will be pawing, touching, feeling and crawling over everything and anything they can get their hands on. You will be amazed at the number of people at an auction site. And this thought is bound to go through your mind..."are all these folks going to be bidding against me?" Relax....for Iam going to tell you stuff..noone else will...
1) 90% of this...this mass of humanity are "tire kickers". These folks have a lot in common. Just like at a rock concert, most in the crowd are rock music lovers. At an auction site, these are what I call "auction junkies".
An anatomy of an auction junkie.
An auction junkie is a guy who loves to attend auctions. Doesn't matter what kind of an auction, as long as it's an auction. Sometimes in the past, this auction junkie got lucky or heard a story from one of his buddies....And the story goes something like this...
The lucky junkie was at an auction. Noone bid on this item...and the junkie got it for a couple of bucks. He brought it back home and sold it for a 100 bucks. You can actually see the guy drooling, as he tells this story. So...with this hope burning in his chest..the junkie attends every auction he can...hoping to repeat this success. This addiction is like the gambling bug.
Guys will actually take off from work...to attend an auction...miles from their homes. They will drive all night, if they have to....never thinking about how much time, loss of work, loss of income etc this trip is costing them. The thrill of the auction is well worth it to them and wild horses wouldn't keep them away.
These folks come in all shapes and sizes, but they are easy to spot..to the trained eye.
You have nothing to fear from this horde.
Now, let's talk about the other 10%. Out of this 10%, half are members of the auction team. That leaves you with about 5%. These are the real buyers. This is your competition.
Let's take this a step further. Let's say there are a 1,000 guys at this auction. We have established by the process of elimination that only 50 guys out of this bunch are serious buyers. Let's also say that all you are interested in, is the plastic strapping machine. Now out of these 50 serious buyers, only 10% may be interested in this plastic bander. That means you have 5 guys that will bid on this item. You have already done your homework and established the highest amount you will bid on this item. So have the other 5 guys. But, each one will have established a different value in his mind. Some will have established a higher value, some will have established a lower value than yours.
Keeping the above points in mind, you now realise that the "horde" is just back ground noise. Ignore it. Let the mob do its thing. Now, here is what's going to happen...
Once the bidding begins:
Bidding begins:
99% of the time the auctioneer will start out at $2,000 dollars...who will give me $2,000 dollars....He then will lower the bid price..till someone opens the bid. 99% of the time noone is going to bid. The bid keeps going down. Around the machine, the horde is in a frenzy. People start to push and shove....each one trying to get as close to the machine as possible. Remember, out of all these people only 5 are real buyers. The rest are there to get their "fix".
As the bid gets down to $100 dollars....the horde goes nuts. They smell blood...you can actually see guys start to drool....some start to twist and turn...strange expressions appear on their faces. At this point in time, the crowd is in the grips of mass hysteria. While all this "madness" is going on, the auctioneer whips up the crowd even more...
"Come on folks..You all know this is a steal..." He keeps egging the crowd...acting disgusted..throwing his hat down...waving his arms around....and the crowd loves it.
The bidding is down to $10 dollars!!!! For heavens sake!! $10 dollars!!!
While all this is going on the real buyers are standing "apart". (Not always...but most of the time). It is easy to spot the real buyers. They are calm as can be...poker faces..no readable expressions...relaxed.
At this price of $10 dollars, one member of the horde raises his hand....either timidly or rather energetically....and the bidding starts...You can see the whites of the bid opener's eye balls....he has almost lost all bladder control....and bowel control is about to go...This loss of bodily functions is transmitted to the rest of the crowd either chemically or by scent....Iam not too sure..but transmitted it is!!
Bids up to $15....Someone shouts $151/2.....and slowly the bidding starts to inch up.
By now it is utter chaos. Hopes, dreams of getting a steal are still very much alive. But the bidding keeps going higher and higher. You can actually see which members of the horde had a $20 dollars expectation....and once the bidding exceeds the $ 20 dollar level, you can see a bunch of them literally deflate. Their faces get this "long faced" look...shoulders droop..eye balls rotate back in home position...and now the crowd starts to concentrate on the remaining bidders. At each $10 dollar increment in the bidding process a certain percentage of the horde "deflates" and the noise level drops correspondingly. Once the bid reaches a $100 dollar level, 90% of this horde is out of the picture. This horde came with one expectation, and one expectation alone...to buy stuff at one cent on the dollar or less.
Now the bids start to go up in hundred dollar increments...100....200....300 dollars etc. It is at this point you hear $500 dollars!!...Hello??? Hello?? Who said that?
All heads turn....and this guy standing as far away from this horde as possible...is the one...who bid $500 dollars. And just like magic, all murmering, all itching and other assorted psychotic motions cease. Now the real bidding starts...the first half was nothing more than an elaborate staged play. To get the juices flowing...
At this point there may be only 3 guys left....and one of these 3 is going to be the high bidder.
Meanwhile the horde has recovered and is clawing its way to the next item on the auction block. And this scenario is repeated all over....again and again.

Auctions: Inner workings : Chapter 8

2004-06-01T12:15:00.000-07:00

How to bid at auctions:
Preparation, preparation and more preparation is the key. The more prepared you are the less chances that you will make dumb mistakes. Bidding is a relatively easy process, hence I won't dwell on that. Instead, I will concentrate on the basic mistakes people make at auctions.
1) Know what you are bidding on. Let's say that you have inspected a small plastic strapping machine. It appears to be in good condition. Ignore the minor dings and dents, after all you are buying a used piece of equipment. On the other hand , if you don't like the dings and dents, don't bid! End of story.
Let's assume that you like the unit and want to bid on it. Do you know what a brand new unit like this costs? Lets say that the price of a brand new unit is $2,000 dollars. This unit appears to be a few years old. Check the name plate. Chances are the serial number and other info provided by the manufacturer might provide this info. try to get this info if you can. Talk to the plant guys or the auctioneer...they might be able to help you.
Once you have determined the age and condition, how do you go about determining the value on this?
Establishing Value.
Let's say the unit is 3 years old. Based on the age alone you know that the company, in all likelyhood, had depreciated this unit down to zero. Hence the book value is zero.
Don't get too hung up on what the company's book value is. You are at an auction. Value will be determined by the highest bidder. Figure out your costing on this unit.
a) What will the auctioneer or the mover-on-site charge you to load this unit onto a truck?
b) What will be your trucking costs, to transport this to your place?
Let's say the transportation costs = $200 dollars. The loading expense...lets say = $200 dollars.
c) Does the auction charge a 10% buyers fee? If so figure this into your calculations.
d) Establish an upper limit....the maximum you are willing to pay for this unit.
Let's say you think this unit is worth a @1,000 to you. If you bid a $1,000 dollars your total cost is going to be....$100 dollar auction commission + $400 dollars for loading and transportation charges for a net cost of $1,500 dollars!
This is 50% more than you had planned to pay! Hello??? Anyone home??
I have seen this happen over and over. The worst part is listening to the high bidder justify this mistake.
Throw all the above advice out the window...if you are bidding on a one-of-kind antique car or object that you must have.
Above all do your homework. Know what you are bidding on......

Art of Listening; Lesson 1

2004-05-30T12:45:00.000-07:00

Less than 1% of the population has this built-in innate ability, this simple act of listening. It is one of the hardest things to teach. If one pays particular attention, one can learn "to listen". However , this presents a slight problem. If a person is concentrating fully on listening, while consciously trying to keep his tongue in check, his brain will short-circuit.
There will be an inner conflict. This person's vocal muscles have been conditioned over a life time and they ( the muscles) respond as an unconscious reflex action to the first spoken word that hits the listener's ear drums. Overcoming this habit is a daunting task indeed. "Rebuke a wise man and he will bless you. Rebuke a fool and he will curse you"
(Bible..Solomon..proverbs)
A few years back, I had a call from a gentlemen in California. I listened
very carefully to what he was tring to accomplish. As he talked I took notes and underlined the key points. I always scribble notes while Iam taking calls from clients. When he had finished, talking, I knew exactly what he wanted. Now let's lay out the scene so that everyone can follow.
There is this huge big company in our neck of the woods. Over 500 employes and publically traded to boot. The plant manager they had hired, for one of the divisions, was a close relative of one of the powers-to-be. You can see where this is going. This guy had never run any kind of converting machinery much less work on one. As a matter of fact a few years earlier, he had started a converting operation and run it into the ground a short time later. In this new position the guy was in-charge of a whole division with about 40 guys working under him.
They spent almost a million dollars updating an old sheeter. Brand new computerized drive systems installed by some company out of the East coast. Rebuilt shaftless unwind systems that were custom installed on special tracks cut into the floor. Special overhead hoist systems. The list goes on and on. This process, of updating took over a year. Ofcourse, while this "remodelling project" was going on the company could not fullfill the orders coming in. They started to sub-contract this work out and the prices started going up.
A couple of guys that worked for this division saw this and realized that they could start a new company to fulfill this need. Sure enough, they started a new company. For starters they bought a brand new , latest state of the arts sheeter. And within weeks they were up and running. They are one of the fastest growing companies in our area.
Meanwhile, the remodelling kept going. Seemed like every other day the guy would have a new vision and add to this remodelling project. To this day, I cannot fathom what the management was doing while this was going on. Wasn't accounting paying any attention? Who knows.
Finally the sheeter was ready. Almost 14 months from inception. Top speed of this sheeter was 800 feet per minute.
The new competitors meanwhile had gone on to double fly precision sheeters at a cost of 2 million plus, a piece. These machines ran at an average speed of 1,200 feet a minute and they cut perfectly square sheets. Not only were these machines almost twice as fast but they also eliminated several supplementary operations. These guys could run a 1,000,000 lbs of paper in less then 3 days.
So this newly remodelled sheeter sat idle. Don't get me wrong, once in a while they would run this sheeter, but that was mainly for in-house sheeting. They had lost all sheeting jobs to this new competitor.
The stock took a nose dive. Heads rolled. From 40 guys at this division, they were down to about 6. But Mr. Brain had not been let go....not yet...he wasn't done yet.
It was at this time that I got a call from the new accounting dept. asking me if I would be interested in buying this "remodelled sheeter". I went and inspected the unit and gave the accounting department my valuation on this unit. The accounting dept. had asked 3 other dealers the same thing. The other 3 dealers had already presented their reports and valuations but not one of them wanted to buy it for inventory. They all wanted to "list it" on an exclusive basis.
I listened very carefully to what accounting had to say. They would be closing this division down in less than 3 months. However, they had a long term lease on the building and the rent payments would still have to be paid for the next 3 years plus! I bought the sheeter and about 10 other pieces that were at this facility on one condition....that I be allowed to leave the machines in the plant for 3 months free of charge...after which I would pay the pro-rated rent based on the square footage my machines occupied. The accounting chewed me down to one and half month free rent and I did not quibble. It was a fair deal.
I suggested that they sub-let the building. Sell all the machines that were not needed, transfer the ones they could use to other departments and empty the warehouse. Sometimes you have to bite the bullet. No point in throwing good money after bad money.
This was a perfect sheeter for the gentleman in California. It had almost 95% of the features that were needed and the other 5% could easily be added at very little cost. In short this unit was a perfect machine for their needs. I called California and told the gentleman to come over for an onsite inspection. However, before he came I suggested he ship over a few rolls of his stock material, so he could see his material being sheeted in real time. This came as a total shock to him.
After they had inspected the machine, seen it in action, they bought it. It took 3 flat beds and 3 days to disassemble this machine and load it, for shipping to California.
It was over dinner that the gentleman from California told me why he had decided to buy this sheeter from me.
1) He had been looking for a machine for a long time.
2) He had called all the dealers....but none understood what he really wanted.
3) But you actually listened to me said.
4) The clincher was when I suggested he send sample rolls to run on this sheeter...
Folks, like I said in my earlier post, buying is the easiest thing in the World. Just make sure that the seller knows what the hell he is talking about. Listen and you will be able to seperate wheat from the chaff.

Handshakes: Ego boosters: Chapter 7

2004-05-29T20:40:00.000-07:00

Moving on with our hand shake business, we now come to the Indian sub-continent. India, the land of the mystics. Here too , we find great symbolism attached to the hand. The great statues of Budda always shows the Budda holding his hand in different positions. Each position has a mile long explanation.
The classical dancers of India employ the use of subtle hand movements. Each move is well recognised by the average Indian.
Same is true with the folks in Burma. The female dancers make the maximum use of hand movements to convey the message of the dance. The Japanese, the Chinese and just about every other race on the face of this Earth has its own system of hand signals.
On any stock exchange in the World, you see guys waving and making strange hand signals to execute a buy or sell order.
Your hands are a dead give away....if you are lying or telling the truth. So if one decides that one is going to put his hands in his pockets or hide his hands behind a desk, that too tells a lot about the person. How a person moves his or her hands, while talking is a direct window into his mind. We have all heard of "poker face". There should be an expression "poker hands" applied to people who go out of their way not to move their hands. A liar can't chew gum and walk at the same time. While he is busy concentrating on not "showing his hand", he cannot allocate enough of his brain to the other tell-tale signs, hence totally exposing himself....

Handshakes: Ego boosters: chapter 6

2004-05-28T22:16:00.000-07:00

What's in a hand? If you ask an astrologer, he is sure to reply "your whole life". Deeply etched on thy palm are your life, love, and money lines. Each intersection, each swirl means something. President Regan and Mrs. Regan did not do anything till the astrologer-in-residence had been consulted. Munch on that for a while folks.
This hand symbolism has extended throughout history. The ancient Egyptians had a complete hand signal system, whereby they could pass messages from one observation tower to the next. The Romans too had a complex hand signal system for relaying messages.
In the Old Testament there is a story about Moses....as long as Moses had his hand raised above his head the Israelites were in a winning position. When he tired and his hand fell, they would start to lose...
Free Masons, Knights Templars, the Rosecrusians etc all have unique handshakes. That way they can recognise a fellow member from a different lodge or country.
So, a handshake is not merely the amount of pressure you try to exert at a first meeting, but the very act is shrouded in mystery, myth and legend. To have some psudo-psychologist come up with this "firm handshake" psycho babble is utter nonsense.
I trust I have clarified this "handshake business" and the next time you shake hands, you will utterly disregard this mumbo-jumbo. Just be yourself and relax. You are out there looking for a machine for your company. You can squeeze as hard you want, it will not make any difference.

Handshakes: Ego boosters. Chapter 5

2004-05-27T09:03:00.000-07:00

We shall continue our dissection of a handshake in this chapter.
Saddam Hussein, the guy who ruled Iraq, had this "handshake business" taken to the height of absurdity. He would stand up in a fully erect position, cock one eye ,ever so subtly and extend out his hand. Now, normal human beings, bend their arms at the elbow, while extending their hand for a handshake. We all know exactly how this works. Saddam, on the other hand, let his arm drop to his side and then he would bend his arm at the elbow, while holding his upper arm tightly against his side. The person shaking Saddam's hand would have to "over-extend" his arm to reach Saddam's hand and in so doing would have to "bow down" to reach it. Iam sure you have all seen this on TV. The impression to the viewers was that the hand shaker was paying homage to the mighty Saddam.
If you watched one of Saddam's army generals shake his hand ,Saddam would lower his hand even more , till the hand was almost level with his ankles. The general would then bow down and kiss Saddam's hand. To the onlookers and the TV audience it looked like this general was kissing Saddam's feet....he was so low to the ground.
Now recall the scene where the alpha dog is greeted......
I shall continue to paint these vivid pictures, so that you, the reader is left with no doubts about the accuracy of my observations.

Handshakes: Myth and fallacy: chapter 4

2004-05-26T10:27:00.000-07:00

continued from last post...
It has become the Gospel of the business World, this handshaking business. Every book on business you read, sooner or later, brings up this utterly false premise. As usual I am going to put this myth under the microscope and dissect it--piece by piece.
Myth no.1 A firm , strong handshake shows that you are a solid character...Poppycock, utter rubbish. If I was hanging by the skin of my teeth, over the edge of a building, I can see the advantage in having a steel grip type grab my hand and pull me to safety. However, before I let go, I would look up at the person who is offering this so called "grip of steel". If this angel of mercy looks like a Woody Allen clone, forget it....I will take my chances and keep hanging.
This "firm-handshake" psycho-babble, expounded by puny, chest-caved-in type nerds who have never done a lick of physical work in their entire lives has taken on a life of its own. It has embedded itself into the American psyche. Problem is, this has become the standard operating procedure for all business types around the World. Japanese companies pay a small fortune to have "business-trainer" come in and introduce the poor Japanese business-men into the art of "a firm handshake". They spend the whole day doing this idiotic action over and over under the watchful eye of the trainer. By the end of the day the poor Japanese trainee is utterly confused, has lost what little confidence he had to begin with. Now he is sent out into the business World with a diploma that says that he graduated with honors, from the American Hand Shaking Institute.
The Japanese company is out a few thousand dollars per trainee and the trainer is on his way to the bank.
Even women have gotten into this act! The very fabric of our society has been tainted with this curse. Nothing turns me off more than a petite little lady trying to squeeze my hand as hard as she can....
Myth no 2
Does a firm handshake indicate a strong personality? Answer NO.
Does a firm handshake indicate that you are dealing with a trust worthy character? Answer NO.
On the contrary, a fake, forced, contrite hand shake indicates a personality that is not to be trusted. Any man or a woman who can't even shake hands like a human being and has to resort to these praticed moves should put you on red alert.
Dissection 101:
I am sure most of you watch wild life shows on TV. Have you seen the reaction of a pack of wild dogs when the Alpha dog comes on the scene? All tails go down. The pack members (based on the pecking order) greet the leader. They get this look...this look of utter submission...and kind of curl up and pay homage to the leader. The best words to describe this look would be a "pathetic look".
Meanwhile the Alpha dog puffs up his chest, tail up in the air, that look in its eyes that says "one wrong move and I will rip you apart" and looks down at the grovelling pack member. Only when the pack leader takes his eye off the grovelling member can the groveller move....to be replaced by the next pack member.

Analysis: Buyers mind set chapter 3

2004-05-25T09:20:00.002-07:00

continued....
John, one of the kids in our sample study, is the most aggressive in this bunch. So we start out with John and assign him a number "subject 001".
Subject 001:
John comes from a family of 3 kids. He is the first born. John's mother was one of those radical types. She loved protest marches and could be counted on to do the most outrageous things. She strapped herself to a tree once and gained national media attention. This ofcourse, was after all, save-a-tree movement. She thrived in this environment. No institution was too sacred and anything to do with the status quo was fair target. She spent her most productive years involved in this radical life style. Her in-your-face type style turned off most guys. Relationships with men barely lasted more than a few months at a time.
It was on her 37th birthday, when she noticed, that all her "friends" who showed up for her party, were total strangers. There wasn't anyone there that she had known for longer than a year or two. Sure , there were a few regulars but none that she was truly friends with. She also noticed that most of the "new faces" were far younger than her. That night, when everyone had left, she felt alone. All the regulars that she had started out with, were all married and had kids. Over the years they had lost contact with each other and it was only by accident that they would run into each other. They would promise to call, to get together, but nothing ever came of it. And so the years kept passing....

Analysis: Buyers Mindset. Chapter 2

2004-05-24T11:44:00.000-07:00

continued....from last post...
Let's assign numbers to the members of this group. That way all actions and reactions can be accurately measured, tabulated, cross-indexed, linked, graphed plus meet the basic scientific standards.
-First Reaction: Link 101: Have you ever been to an industrial auction? If not how about a plant auction? No? Any auction? It doesn't really matter what kind of an auction, but industrial auctions, farm auctions and plant auctions have quite a bit in common.
Let's lay out the scene. We will start from the time you arrive at the auction site. We will ignore all the nightmares it took to get to the auction site....flying-in, car rental or driving time, motels, food etc etc.
The first thing you notice is the number of cars. There is no parking near the auction site. It takes a while to find a parking spot and then walk to the actual auction site. Now comes the registration process. After registration you are given a bidder's number or a paddle with a number on it. You can now bid on anything at the auction up to your credit limit established during registration. You start walking around trying to see all the machines or items that are of interest to you.
The first thing you notice is the number of people...like ants...some in tightly knit groups, some alone....all crawling around every machine or part that is up for auction.
-Observations and Analysis: If you are a rookie to auctions and this is your first time at an auction, you will feel like a fish out-of-water. But relax, you have read Dr. Winder's analysis and you feel quite confident. If you have not read Dr. Winder's analysis with rapt attention, then you should feel like a fish out of water.
The Auction Begins: The auction guys reads out the conditions and terms of the auction and goes over any special conditions and the auction begins....
The crowd comes to life...you can feel the anticipation of the crowd..you can actually see guys drooling....some start to gulp.....then you remember, that day, long ago, when little Tommy pulled out that laffy taffy from his pocket....

Analysis : Buyers Mind set. Chapter one

2004-05-24T10:31:00.000-07:00

One of the simplest, yet most difficult concepts to understand is what I call the buyer's mind-set. There are quite a few different types of buyers. These analysis can be applied to just about any shopper, but in this article I will reserve my observations and analysis strictly to buyers of used converting machinery. This begs the question, "Why buy a used piece of equipment versus buying a brand new machine?"
Before we immerse ourselves into the deep, dark, arcane depths of psycho-analysis, let's continue to explore the simple, basic common sense reasons.
Buying is the easiest thing in the world. It doesn't take a genius to buy. Even a four or five year old kid knows how to buy. Give the guy or gal behind the counter a quarter and viola!! you get a piece of candy. This first act of buying sets the stage for the rest of the buyer's life! This simple act, this exchange of currency for a commodity is "imprinted" on the child's mind, forever.(Imprinting 101)
Imprinting step 2: The kids are in school. It's recess time. About six kids are sitting around playing. One of the kids pulls out a piece of laffy-taffy from his pocket and slowly starts to peel off the wrapper....The rest of the gang is watching this....some start to drool, others start to gulp. If you monitor this activity as an independent observer, you will notice that the group as a whole moves closer to the kid opening the wrapper. This is quite subtle, barely perceptible to the untrained eye. Yet, the group dynamics has suddenly changed. The kid opening the candy is now the center of attention.
Imprinting step 3: Now, instead of looking at the group as a whole, let's observe the reaction of the kids one by one....

Qualitative Analysis before purchase of a winder

2004-05-23T10:57:00.000-07:00

Iam assuming that you have already looked at the above mentioned points.(previous post) You have also
discussed this matter fully with your plant manager and other powers-to-be. Now comes the time that one has to make the decision. Before you take the final step, it makes good sense to explore the following points:
1) Using our present in-house equipment....what's the best production speeds we can achieve.
2) How many finished rolls can we make per day using our present machine?
3) How many operators, packers, labellers etc does it take to make these rolls?
4) What's our per roll cost (for finished roll) not including raw material costs?
5) Additional costs should be factored in for heat, light, water and exact electrical usage.
6) What is the customer paying for these rolls? (that is from its present supplier)
7) After calculating these costs...can we even do this job at a decent profit?
Now let's look at this a little more closely. As an example, if your customer is paying 20 cents per roll( all nicely packed etc), and your calculations indicate that your total cost per roll, using your present equipment is 50 cents a roll...then obviously you are not going to even try to waste your time bidding on this job.
However, as the owner, or the manager you will try to figure out why is it possible for your competitor to be able to do the same job at such a low cost. You kind-of-know your competitor and know for a fact that these rolls are indeed made in the USA. You have ruled out that he ( the competitor) is not running a sweat shop or importing these rolls from China. Totally frustrated you call a meeting of your top employees. Each one scratches his or her head offering no clues. Now you go into a slight depression and your hemorrhoids start acting up. You can't figure this out. As the owner you realise that if you do not get up to speed, soon you will be sitting at a train station, hat in front of you, strumming on a guitar, hoping for nickles and dimes. Not a pleasant thought at all.
Just like money makes more money and success breeds more success, failure leads to bigger failure....all these thoughts are going through your head....dark clouds are everywhere and noone seems to offer any clues. The last straw is when your wife comes home ( from her weight loss class) and tells you that Big Bertha (your competitors wife who also has a weight problem, and goes to the same club as your wife) told her that Harold ( her husband) is buying her a brand new SUV.
"How in the name of heavens can he afford that?" you ask
"Well" says your wife "He is making a 70% profit on this roll business". It is at this point, when the final nail has been driven into the coffin that you realise you need help and need it fast.
More details and solutions to follow.

The sad state of affairs.

2004-05-22T17:44:00.000-07:00

The converting industry is undergoing its most drastic changes, as I write this. Paper
mills are shutting down. Plastic film manufacturers are closing shop. Thousands of
decent hard working folks have lost their jobs. This climate is not only affecting the
changes in the paper industry but also the plastic, film, foil and non-woven industry.
The state of Wisconsin alone, has lost over 84,000 manufacturing jobs. "Out-sourcing",
"service sector job" have become the latest buzz-words. Folks, let's cut out the "double-speak" and look at this in its simplest form. In Wisconsin the average Joe blow mill worker made between $50,000---60,000 dollars a year in wages. Not counting the basic benefits like health insurance, retirement funds, union benefits, vacation, etc, etc, etc. Now imagine the same guy in the "service sector" flipping hamburgers at minimum wage. I'm sure we all see this clear as daylight. While all of this is going on, the politicians are white washing the reality and painting another rosy scene. Keeping the above points in mind, it's time to offer some words of wisdom for our industry. My area of expertise lies in machinery. Following is a list of items, I will keep adding to this list as time permits.

#1. What's the best machine for the job?
#2. What is the maximum production capacity of this machine?
#3. How difficult is it to run this machine?
#4. Can we train a regular guy to run it?
#5. Or do we need a rocket scientist?
#6. How much room is this machine going to require on our floor?
#7. How much is this going to cost?
#8. What is the payoffs on this unit?
#9. Can we service this unit in house?
#10. Or are we going to have to pay through the nose every time that we need service?
#11. Do we really need this machine?
#12. Can we use our existing equipment to make the needed products?