- Building a powder coating business from the ground up
- Adapting during COVID and using that moment to grow
- Acquiring and turning around Coatings Plus
- Why speed and reliability win in regional job shop markets
- How customer communication helps rebuild trust
- Why scheduling changes constantly in a job shop
- How uptime efficiency, units per labor, and quality data guide decisions
Dean Halonen: Thanks, everybody for joining us. My name is Dean Halonen. I'm the co-founder and CEO of Steelhead Technologies. And and welcome to Shop Talk. So this is this this show is for those that have dedicated their livelihood to the craft of manufacturing, because those people understand it's one of the hardest, if not the hardest, job in the world to, to do and do well and actually grow and scale a company.
Dean Halonen: And it's my pleasure today to welcome on Jarrod is it wise and our Jarrod Wiesen we serve. Yeah. The president and owner of coatings plus as our guest today and also I believe you have two shops, right Jared. There's Coatings Plus and Weezing powder coat. Yeah. We're we're currently sitting with, with two shops, an industrial paint supplier, and we're working out of third shop now for for growth.
Dean Halonen: Oh, 00A third as well. Yeah. Okay. So we'll get into that. But maybe starting back to square one Jarrod. And like, like maybe you grew up saying, hey, I'm always going to be in the powder coating or I'm always going to be in the manufacturing business, or maybe not. But maybe you're based out of Grand Rapids, Michigan, and, so it sounds like there's a couple of companies now in the portfolio, but if you could go back to maybe how did you how did you get started into into manufacturing and what what maybe piqued your curiosity about, this, this industry?
Jarrod Wiesen: I built roads, the day after I graduated high school, I started working for a large excavating company and quickly became an operator. And and excelled at that. During the winter time, I walked in on a conversation that somebody was having with my dad, somebody that he went to school with, and he was looking to sell his rim line.
Jarrod Wiesen: They had a production line where they would burn off rim shot blast, pre-heat, powder coat, and then they'd run through an electric oven and every seven minutes they were running the wheel through. And he had some old beat up equipment and one customer contract and, and a part time employee who was looking to get out of it.
Jarrod Wiesen: And I kind of walked in and, hey, what? That guy, what are you. We want to do something. As I recall. What is powder coat? We googled that. What did he want for it? And I had enough. I had enough money to buy it, so I did. And then baptism by fire. After that, we started doing wheels and even sharing what you bought it for.
Jarrod Wiesen: 77 $77,000. Awesome. And I moved it. I moved it into a $66,000 building that was purchased from the bank. And we put we powder coated rims in the front and start bolts in the back. And, that didn't pay, at all. So we really grew the business. And we had we had roots going from Kentucky to New York doing wheels.
Jarrod Wiesen: This is in Belding, Michigan. Belding is, a unique town because we're known for oven manufacturers. So there's the that's our largest industry is other manufacturing. I didn't know it at the time. I met a guy at the local golf course. I was at the bar and he said, hey, do you own this powder coating company? I said, yeah, said, how much are you powder coating rims foreign?
Jarrod Wiesen: I think at that time it was like $19.25 apiece. So I proudly said 1925 is, you know, if you start a powder coating like race car frames or quad frames, you might be able to do that for, you know, 100 bucks or 150 bucks. And I said, yeah. And he's imagine that he sold batch of us. So I'm not 100% sure.
Jarrod Wiesen: But I think at that time it would have been 2014 to maybe beginning of 2015. We bought a batch of it and a paint booth to match it for around a hundred grand, not installed. So I made a buddy of. Yeah, put it all together. It's running right now. It's still running at this exact moment. I would put it together and start a powder coating.
Jarrod Wiesen: Rounds or not, rims by other people. Stuff and quickly. That was kind of part of the deal, was, can I do your powder coat if I buy an oven from you? And, then it grew, you know, and then we got a second shift, and then I bought another oven, and we did in another paint booth, and we rocked that pretty hard until, the 2018, maybe 2018 going into 19.
Jarrod Wiesen: I sold the whole rim company and we were getting push to do production. So I put in a production line, so refinance everything and but the house on it. And then that was that was good. We started running pretty good on production for three days just to jump in there. Jarrod. You said. Yeah. Pushed to do production.
Jarrod Wiesen: So some a lot of our, a lot of our customers were doing the offline stuff for work. Also had high volume smaller parts. So they're going to my competitors to have that done. And they kind of wanted to have a one, a one stop shop for all of it. And I, you know, I wanted to keep them out of my competitor's dorm.
Dean Halonen: Yeah. And, yeah, we powder recorded for three days for pay. And then Covid 19 center shut the state down after that. Else, that wasn't as fun. So you so you went to the bank and said, hey, I actually don't really. I'm a little ignorant in this space. You go to your bank or your banker and say, hey, I'm getting all this demand for a request for this type of work.
Dean Halonen: I want to put in a new line. It cost, you know, a million bucks or what? Does the new line cost? 2 million, maybe at that. At that time, the line that we had was just south of the million. Yeah. So cost around $1 million. And then how do you is it pretty easy to get that, get that loan?
Dean Halonen: If you have like a how how do you think about, securing capital to, to to grow, refinance my house and put a lock on it along with my home and my my, my building. Got it. So you had to put all your chips in the middle. The banking sector. That will give you the money as long as they had.
Jarrod Wiesen: Yeah, they had enough equity or they had enough collateral to do it. Yeah. Wow. And then Covid happens that. Yeah, we, we ran parts for three days and then they shut it down. And my dad called me later that day and said, I think you're going to lose your house. And, so yeah, well, I guess so.
Jarrod Wiesen: We'll, we'll hang out in powder coat for as long as we can and take all that happens. We'll see what happens. And I got a call from a customer. They were making face shields all of a sudden for Tyson Foods. And that's when they, you know, they were getting a lot of hard push to that shutdown. The big meat packing plants we started to make.
Jarrod Wiesen: We started well, not well. Then instead of melting these face shields, they were getting CNC routed out and they needed to bend. And then they'd put two clips on them and put them on a hard hat. So we went to the local hardware store and bought stovepipe and rivets. Right. And we were then we went to menards and all the other ones we could.
Jarrod Wiesen: We filled the whole line with stove pipes, and we ran four mask at a time, and we burnt them in the dry off oven, took them out in the paint booth, and then did another set in the cure oven. So put them back out in the paint booth. I went through the cure up and we started taking them off in the in the packing section, hanging a backup.
Jarrod Wiesen: I think in our prime we're doing like 10,400 a night. And then we were powder. That was just at night and we're powder coating during the day. So it kind of turned out to be, a massive blessing and a, you know, an incredible blessing. So we went from, oh, boy, we might lose it all to really busy, you know, and it was just, just that, opportunity to adapt.
Jarrod Wiesen: My phone rang and says, I gotta I this is about 11:00 in the, in the morning, and by 1:00 the next morning, we had a load to Dawson City, Iowa of face shield mass. Go on to Tyson melt the band but yep. And they another company was making the brackets. Is this really big collaborative effort or are you guys painting the brackets or.
Jarrod Wiesen: No, no, they were, plastic. They're like a plastic injection molding bracket. Yep. Gotta, gotta. Wow. So talk about that. That just feels like that's the American dream, right? It just goes from it's a roller coaster of we're going to lose it all to maybe we had our best month ever. Yeah. In the, in the span of a call your dad back.
Jarrod Wiesen: Hey, the house is house is fine. House is good. We're good. Yeah. And, so, you know, it worked. It worked out. I mean, like, we. And then we had a lot of opportunity about medical equipment and stuff like that for, you know, hospital beds and stuff for these, you know, pandemic relief centers. So that, that really kind of jolted us.
Jarrod Wiesen: And we did a lot of work with the automation industry. West Michigan's really big on the automation industry and heavy metals and stuff like that. And that business kind of died down. And at that time, Amazon was putting in distribution plans. You know, distribution was getting big and automating and shipping and whatnot. So that business ramped up and we kind of were able to jump on that for the next couple of years.
Jarrod Wiesen: Wow. And then in 2020 2nd January of 22, we acquired Coatings Plus. So we were able to add them and we acquired Coating Forces acquired we said powder coat, which one we we purchased Coatings Plus in 2022. Got it, got it. So how did that how did you guys come to that decision? Did it just did it fall into your lap?
Jarrod Wiesen: Or did you or you're actively pursuing. We we were outgrowing our batch ovens. So with that same manufacturer that stopped me at the local gas at the at the golf course bar, I started working with them to build a big set of batch ovens, and we were going to lease a building and put them in there. We're going to do warehousing and, you know, some light of some way powder coat, license plate assembly, warehousing for the material handling, industry.
Jarrod Wiesen: And I've had equipment bought, burners and stuff that has a big backlog on it. And I had a plan to go that's not a big industry, especially, you know, in from a Michigan standard. So I was keeping this all real quiet until I wanted everybody to know. And so I kind of told there's always a supplier that kind of has a leaky mouth, you know.
Jarrod Wiesen: So I told him and I figured it would get around that while we since is adding another building and the Grand Rapids area, which is 30 minutes south of us, and then a local company in there called me and said, hey, don't come to Grand Rapids anymore, but a big competitor. Maybe it's time that you don't compete with us anymore and acquire us.
Jarrod Wiesen: And, let's go out to lunch that I was so excited to go to lunch because these guys would give me a run for my money. Millions of dollars a run for my money. They took me to the cheapest restaurant. I promise you that McDonald's when it cost more. I looked at the bill. They spent like $7 to buy me a lot.
Jarrod Wiesen: So I'm like, really? That's all? I was like, you guys have really ran me really hard. I'm gonna at least get a good lunch out of this. Thought I'd get a nice cocktail or something. No, we went to a really crappy hole in the wall restaurant and had the cheapest burger ever. But it's all part of it, and we were able to come to terms on it.
Jarrod Wiesen: That would have been in 21. We started working on that deal and then beginning of the year we were able to close on it and they were were they retiring or they just moved in? Yeah, they retired out of there and they they had made a lot of changes, you know, they were more or less a failing company.
Jarrod Wiesen: Got it. You know, and they I think that they knew it. So it was, it was a good it was a good acquisition. You know, we've, we've we've seen tremendous growth there. We've brought new technology and procedures. I mean they had sticky note pads and they tell people it would be done in two days knowing it wouldn't be done in two weeks.
Jarrod Wiesen: And, you know, it was a pretty it was a pretty hostile work environment, just a lot of upset customers and rightfully so. I mean, right, I mean, rightfully so. And it took a lot to rebuild their name. And it's been a lot of fun to do it to you know, really changing things. And it's been a journey, but we've enjoyed it all.
Dean Halonen: Yeah. And maybe now that it's the business is healthier, if you guys ever do sell weeds in our coatings for us, you can you can buy your, your next purchaser a little better burger. With with that. Yeah. But the better yeah. I'll get something a little better. Yeah. Some fries, maybe some fries, anything. But, hey, that's,
Dean Halonen: It's a tough world, so. And just to to dive into that a little bit, you are competing with this company. I'm sorry. 30 miles away. And it seems like in this industry, there's always, like, little ecosystems. If you're in Grand Rapids or in Detroit or, you know, you know, Cleveland, Ohio, where the cost of freight is or the cost of shipping is expensive, right?
Jarrod Wiesen: Yeah, it's it's a little bit of a dogfight in every little mini market. What do you say in this scenario? It was just like a price war, versus them, like, they're just undercutting prices. And that's what really it was. It was speed. It was speed. Trucks are expensive, you know, to go back and forth because we do ship between companies, you know, it's about $900, but it costs more than $900 when you have a whole team ready to assemble a project.
Jarrod Wiesen: But it didn't show up from outer court on time. So time was the big thing. And when you say time is and like you say, they say, well, we haven't done in two days, they went out. And then you say, I'll get it done in a day to win the job. Sure. And now it's just a it's a speed war if you sure.
Jarrod Wiesen: Well they always like to send it closer. It's quicker, it's cheaper. All that. But then they were kind of getting you know, hey they said they'd have it done in four days Ryan. Day seven. You know, now we're going to be paying overtime. We're going to be late on our job. You know, a lot of that stuff going on.
Jarrod Wiesen: So is it worth the freight? You know, so you had to sell it. You know, we're always on time. You know, we will not miss our ship date. So if it's important, if that's important to you, maybe you should send it up here. If it's not, you know, if you're not, it's hard to win the battle. Yeah. We're not a real big rush for it.
Jarrod Wiesen: Just have it in the next week or so. Probably as a you know, we quickly leave that room, you know, have some changes. Let us know. But we know that that's not at that time where we stood. You know, we needed to be the fastest because these companies are growing. They're I mean, they're they're big time. So so everybody here that's in powder coating knows that engineering got backed up, assembly got backed up.
Jarrod Wiesen: Well they got backed up. This got caught up. We're we're a week and a half behind on this project. Where are you going to make all that time up. Well we got to go yell at the last guy on the roof. That's the public order, you know? So I'll be there. Yeah. So time has where we really found.
Jarrod Wiesen: The majority of our successes. Who can get it done the fastest? Yeah. And in your market, I'm not sure we're building sets in relation to like Grant. Is Grand Rapids the major. What we're most of the customers are. So if you're outside of town 30 miles, you just got to be you have to be a little stronger, a little faster.
Jarrod Wiesen: Yeah. It's better. Yeah. Yep. That's correct. Got it. Support your point work there. I mean, they're driving past multiple parking shops to come to our shop and building. You gotta you gotta give them a good reason to do it. Yeah I love that. They'll say give you a good reason to do it. So let's that's that's that's the reason why are the leasing guarantee is we'll get you done on time.
Jarrod Wiesen: So. Wow. And what are your guys's lead times like what if you're or do you offer multiple, lead times like, hey, we can do it next day for our premium or in. Right. We, we're pretty busy now, so those lead times do get pushed out more than I like. We do track on time. I, I think we offer, I'm not 1,000% sure on this, but I think we're offering a four day lead time right now.
Jarrod Wiesen: If I have some customers less than they might, they might want to chime in and go, wait, wait, wait. You know, we're sitting at five or something that does that does happen. Scheduling is a big problem, right? I mean, we have 2000 customers and everything is due for days after it shows up, and you never know when it's going to show up.
Jarrod Wiesen: We don't know. We don't usually have when we got projections and people talk or whatnot. But you don't know it's it's it's due for days after it hits the dock. And you'll know it's here because the truck will be at the dock, you know. So of course we all have relationships and we usually see this customer every day, or they do round trips and stuff, but a lot nothing's really guaranteed.
Jarrod Wiesen: And it's the scheduling is a big thing. And it is something that we look at multiple times per shift. Yeah. So let's talk about that a little bit. Jared, in regards to I agree with you. We have hundreds of customers in this industry and the the job shop world is like it's a it's a it's a track like the transaction between you and your customer.
Dean Halonen: Like we're we obsess over automating that down to it feels like near like instantaneous, like real time updates. So you inside of, you know, inside of your companies, everybody knows where every part, every job is. But our long term goal is, to have that visibility upstream into your customer, and then you have the visibility, like what's coming next week so you can run like, hey, Gloss Black is going on Monday because we've got all this gloss black coming in.
Jarrod Wiesen: That's that's our lot. We, we see we even have to gamble on the weather. You know, when the roads are bad and all the news is stay off the roads and people might not ship out today or contractors are running, you know, other one day freight haulers we use in on time or same day is big for our area, but they might be running 20% behind schedule.
Jarrod Wiesen: So now my incoming is going to be 20% less. But when the weather all clears, if we have a three day storm and then the weather all clears, everybody empties out the warehouse all at one time. That could be on a Thursday. So now we're working over the weekend, but then we might be slow next Wednesday because that that that influx is now gone of work.
Jarrod Wiesen: So it's even gambling on the weather. When we start talking about these, it's conversations going, should we be throwing overtime at this? What are we going to get tomorrow? Are we going to get 24 hours worth of working tomorrow? Are we going to get 30 hours worth of working tomorrow? Are we going to 18 hours worth of work in the in in tomorrow?
Jarrod Wiesen: And how does that did what do we get the day before we can transfer over, the day after we can move up so that we're always selling at that 20 to 24 hours. But even when you're talking about I'm like, I don't know, I feel like the weather is going to hold some stuff back, but let's not do overtime yet.
Jarrod Wiesen: You know, let's try to save those costs because they're all fixed costs and overtime adds, adds to my my cost. So cutting to the margin but for sure. But cutting to the margin but boost customer satisfaction which boost sales. So it's like there's trade offs there. I'm curious when. So you bought coatings. Plus it seemed like a it's everybody loves a comeback a turnaround story.
Dean Halonen: Right. So maybe you can explain a little bit like, hey, we had the burger, we bought coatings. Plus, it was, you know, somewhat, and you could say. And then maybe what was life like then versus life today? Like, I, you know, what was the main drivers of like, hey, obviously it sounds like scheduling or like making promises on deliveries on time deliveries.
Dean Halonen: That was not happening. If you could explain a little bit, Jared. Like, you know what that was what to keep. So we we had a bad name. We would tire that. We'll have it done in two days. We want to. Have you done for a couple days after that we had a bad name. So we started flooding them with information.
Jarrod Wiesen: Unwanted information. Like when you order from Amazon, you know, your packages then scheduled. It's been shipped. It's been delivered. You know, what is your give us a review. They kind of give you too much information. When we wanted to give the same thing, we wanted you to know your parts are scheduled for this day. And and of course, they take it with a grain of salt.
Jarrod Wiesen: And I would too. I don't blame, you know, they take it with a grain of salt. So now we're. This is their on schedule. This is how many we have done. This is our rework rate on it. So giving them more information, I think put a lot of people at ease. And it took a while to, to rebuild that name.
Jarrod Wiesen: Of course, I knew a lot of their customers and they're like, yeah, well, we'll give you a shot because we always did a good job, you know? But they did send some stuff to sponsor their competitors. So I did have my name. Yeah. We don't always use you. We use you when it's an emergency or whatnot. But we we like to send it to somebody closer.
Jarrod Wiesen: But it was hard to rebuild that. So we flooded them with information. And we have a very important saying just do what you say, and I will not lie to you and give you the answer that you want today. So I have to have a hard conversation with you tomorrow, I might not. I'm going to tell you the truth.
Jarrod Wiesen: It might not be what you want to hear, but I'll be the truth today, and I'll be be the truth tomorrow as well. So just get in front of that. Part of our KPIs or key performance indicators as we track, you know, customer complaints. And we also have another saying it's not a complaint. We say at first, you know, like, hey, there's there's an issue with this versus just like waiting for them to complain, let's talk to them once we see an issue because we screw things up.
Jarrod Wiesen: Hey, we broke this. We bent this. We're going to be late on this. All this stuff happens. But versus them complaining, we confront them first. So then that way, if you're going to bring bad news, if you're going to have a bad situation, be the one that brings it up first. Yeah. Break it up. Yeah. So do what you say.
Jarrod Wiesen: Customer complaint is a complaint if we talk about it first. And that really changed our relationship with our customers. And luckily they've then they gave us another opportunity. They gave got exposed to another opportunity. And I think that they are happy that they do. So we we really do care. We push hard. We we lean on steelhead and the technology to to bombard them with more information than they want.
Jarrod Wiesen: And they, they don't call they they had habits of calling. Is our stuff done? You know squeaky wheel got the grease. Now we just give them a portal log in you know. So they like that they don't have to call and sit and hold and listen to the my music in the background and all that stuff. They just go on the portal and they can see perfect.
Jarrod Wiesen: And that's what we want. It's, it's we want to give them more information than they asked for just to rebuild that confidence. And I don't think my all my competitors are doing it. So it does give us an advantage. Yeah. And every I just a it saves so that that portal that's what I'm saying is like the connection between you and your customers.
Dean Halonen: We I'm like well you to your customers. Right now it's mostly to save you time with with those updates. But we do want to have you you have the ability to look what's coming down the pipe next week as well. I want them not to be able. I want them not to be able to manufacture parts without it.
Jarrod Wiesen: So I want them to lean so hard on just always having a good supplier that they can't do it without. That's the relationship that I want with them, and that's what we push for. We are a team. We are a part of this project from concept, from cradle to grave. We want to be a part of it. And that's that's amazing.
Dean Halonen: Now, Jared, what's with the, in the job shop? You mentioned the weather. You mentioned, you know, I think another one I heard is like, sometimes, you know, things go wrong, you break parts that band parts or operators don't show up, or there's some rework or there's, like the amount of or your, your paints comes in late shipment or there's probably 50 factors that could just mess up a schedule.
Dean Halonen: Sure. How do you guys, how are you guys that's using steelhead or your team to react in real time to the dynamic nature of and keep you want to keep the line full and the customers happy and good margins are good. Revenues are getting shipped out every day. How do you guys how do you guys balance that?
Jarrod Wiesen: We look at it a lot. You know, when we hit a shipment isn't going to be in what can we move it. What can we move up. What obviously we need to have a conversation with the customer first. Hey. And we have transparency. I a lot of our our paint suppliers are respect. Hey your spec customer right here says they need X amount of days.
Jarrod Wiesen: We gave them 20% more than they needed that. You know we do put it back on them. Hey they are not successful. So now it's affecting us. But they're your they're your supplier. More importantly though, we can pull it out of the schedule. When we can, we can plug and play back in. So when they come to me and say, so what is your plan now when Potter shows up five days late, have a have a plan for them, you know.
Jarrod Wiesen: Well, I, I don't know, I guess we'll have to see that. No, this is what, this is what it's going to look like. So kind of puts everybody at ease. But more importantly is no, I we definitely have to change the schedule and move move customers up. No ones usually that matter when they get their stuff a little bit early, but there's there there is a lot of factors that go on.
Jarrod Wiesen: You know, we cross-train a lot for when operators don't show up. We do try to batch ahead. We have kind of some trade secrets of how to get things done with less labor. We use our scheduling for that where we can steal labor later on, or not see labor later on to get the same amount of throughput, because it is such a variety that you might have parts the size of May and parts of the size of my water bottle cap all on there.
Jarrod Wiesen: The the labor requirement to hang those. You might get 400 of these on a hook where a part of me might get one over five, you know. So how do you balancing that labor is is a lot. But you know utilizing steelhead and tac times of what everything is and averages attack time. We know all that before before we even schedule your job.
Jarrod Wiesen: We know what the labor we know what the labor is going to be moving on. So, so-and-so didn't show up. So we're down a hanger or something of that. What can we do to schedule this job so that we're running the powder line in the company most efficiently? Because part of our labor that show up today or called in sick or whatever that might be, so that keeps the line full.
Jarrod Wiesen: And that's how you're going to stay ahead. Got it, got it. And now are you looking to.
Dean Halonen: Because there's always like there's like hard there's constraints right. With scheduling of like ideally we never change colors and ideally we batch everything possible. So real world happens. We have to, you know, wait to serve all these customers by these certain times. So, I mean, there's obviously knobs you can turn off like efficiency and customer satisfaction and, I guess I, you guys like in August and steelhead are you find yourself are you the scheduler or is that is that Josh.
Jarrod Wiesen: Josh does a lot of our scheduling. Yes. All of our skin. All of our scheduling. Yeah. So is he like dragging dropping reprioritizing many times a day or is he like, yes, 8 a.m. or. Yes, many times a day because there's 50 different factors that change it. Or and we also might be running ahead of schedule. What's that look like.
Jarrod Wiesen: Yeah. So and and usually usually we do. So we'll be running 10% ahead of schedule I think our domain set at or not our domain but think we're just set at 80% uptime. And currently maybe in the last quarter we're running about the 94 to 95. So he's got a good buffer in there. But we've had we have conversations.
Jarrod Wiesen: What does customer satisfaction look like? If you call me at 5:00 in the morning and I needed that noon, it's just not going to happen. But I feel like having it at 7:00 tomorrow morning is pretty damn good, too. So, so being being realistic, I mean, I'm we're not going to stop and shut everything. Everything down for you.
Jarrod Wiesen: We want to be a teammate. We don't charge expedite fees for any of our customers. We call it being a good partner. We don't have a huge sales staff here. Back to we are partners a whole way through. We understand stuff happens and it happens to us too. So please be aware. Please be sympathetic if we make a mistake as well.
Jarrod Wiesen: That it happens to our customers, it's going to happen. Your suppliers as well, whether they're your hacked specs, paint supplier, your powder quarter or whatever. But yes, that schedule changes a lot. But knowing your labor, knowing your uptime efficiencies, know knowing all your all your KPIs that you're measuring is very helpful. We have averages of color changes that we'd like to see per shift and, and through data of of through time of collecting, we've collected enough data to, to realize that we like to keep our color changes right in here.
Jarrod Wiesen: You're right. In an ideal world, 100% of the time, one part we know we'd have a really good looking shop, but we have hundreds of thousands of different parts numbers, you know, thousands of different customers. It's just not the world we live in. Agreed. And I was talking to one of our deployment, leaders before this call, and they mentioned not on the customer satisfaction side.
Dean Halonen: I will get into the KPI side on my next question. But on the customer satisfaction, he said he mentioned Josh was dealing with the customer and they're like, hey, when is this job going to be done? Right? And Josh whips up to open the schedule and he says, 2:30 p.m. today, they'll come off line. And the customer was like, oh wow.
Dean Halonen: So it's off by 230. And that part's coming right off the line. Picks it up and then they're on their way. So that is that confidence. And like scheduling. Is that improved? Your customers feel that, at all besides that one story, is that like a, a broader, like are they is that a broader, like a widely recognized, boost to your customer?
Jarrod Wiesen: So, so selfishly enough, we've tripled the size of codings. Plus we never tripled the size of the warehouse. Wow. So it's very it's very important to get your stuff out of here faster. So we don't wait to call you till it's completed. We want to tell you 12 hours ahead of time so that you can get it out of here a lot faster.
Jarrod Wiesen: I love it when my customers, like, the parts are still warm. Yeah. Get it, get them, get them out of here. That's the last time I have to move on. When somebody else is is behind that it's faster. Is going to get me accounts payable or my accounts receivable. It's. The faster you get it out of here, the better chance to not racking it.
Jarrod Wiesen: You know, stuff happens. We, you know, parts get hit or whatever. Get them out of here. Get them in your warehouse. We like to see that a lot better, but that that's. That was my driver. Yes. The fringe benefit is customer satisfaction. And we we go as close to as in a on time manufacturing practices as we can.
Jarrod Wiesen: But there's still those hurdles. Rework. I'm happy that that customer that we said is going to be done at 230. I'm happy that there was a rework on it, but it does happen, you know, but being able to talk to our customer, hey, I have 900 hot parts coming through. I need them done in 27 hours. Can you do that for me?
Jarrod Wiesen: I can't, I can get you 750. That's fine. The customer only wants 650. When can you have the rest of them? You'll have some more time. So just being able to have these conversations, turns out they don't need all of them. They just told me how many they were going to send. We assume that they want all of them, but giving them real world information of what we have material for, what we have right in time, what we have time for.
Jarrod Wiesen: And and like I said, I'm going to have the hard conversation with you today and not a, not a not a good conversation day in the realistic one and two days. Let's just have it all right now. But we can give them actual real time information. We're not making it up. It's not a wild guess or anything. This is this is how it is going to be.
Jarrod Wiesen: It's the truth. Yeah. And the truth wins at the end. The just to, you said you three x to the size of like the throughput, but didn't change the size of the building, but I can't, I can't tell you on throughput, but I can tell you on the gross sales. I mean, I don't I don't know what the cubic feet we were running or whatever, but yeah, gross sales is three just over three times higher.
Jarrod Wiesen: Wow. That's a that's that that's a that's a phenomenal turnaround with not three time staff. We didn't buy I bought a couple high levels. That was not like we put in another line. This is almost apples to apples with the same amount of assets. It's just freeing it up. We had you know the this company was all you know they just we well we did we did good.
Jarrod Wiesen: I'd walk in hey I make sure if do I say they did good. Look at all the stuff they got done, you know. And then we spent $1,500 on a line counter just to hook counter. Just to count how many hooks go by. Turns out they were paused 40% of the time. Not mad about it, but I want to know the reasons why.
Jarrod Wiesen: Well, we didn't have enough hanging. We had to pause and painting. We had to do this. We didn't know the hanging standard, all these things. Okay, well was able to get it up to that over 95%, which is what we're pushing now and we're still, you know, gaining in the small the inches and seconds of it to to tick those up.
Jarrod Wiesen: But there was a lot of open capacity there. But no one ever tracked it. Yeah, yeah, we did good. Look at all the stuff they got done. Compared to what. Yeah. There's a lot of pallets there. Yeah, there's a lot of stuff, but who knows. You know, no one, no one was thinking that way. That's amazing. So and in terms of thinking that way, if you look at a shift or a day, or a week, what are those?
Dean Halonen: I mean, you mentioned the hooks. Right. Or, you know, hooks up throughput. What are those key KPIs that you look at at, you know, at a daily basis to make sure, like, hey, today was good. We won the day right? So most importantly, we look at a couple it's units per units per labor.
Jarrod Wiesen: So how many hooks am I running compared to how many people I have on the line? If I brought in, I think there's maybe nine people run our line. If I had 15, would we get more work done or the same amount and just add to our labor cost? So our upgrade as a percentage is the number one thing I'm looking at.
Jarrod Wiesen: We run a lot of weekends, you know, but I might be able to run with five people because it's a long part. It doesn't require a lot of labor, but I still might be able to run a 95 to 100% uptime with that, with, with half of the staff. So Uplay is going to double. So UPL is most closely tied to a profit margin, which is what I'm the most concerned about is a healthy company on time efficiency.
Jarrod Wiesen: Because we are an asset capacity we have we're coming up on that asset capacity, which is why we're looking to grow. So I'm very concerned to making sure that we are running a 100% density. Are we can we fit more parts. And we have the density of readers, and we're measuring that uptime efficiency. And we do keep an eye on scrap our scrap rates pretty low.
Jarrod Wiesen: I never want to see it to be zero. But I also I want to keep in check too. And I know everybody. That's crazy. No scrap is good, you know. But like, if you if you if your scrap went from 0 to 2% in your throughput tripled, is that scrap a bad thing? Maybe not. Yeah. So you have to look at the holistic picture.
Jarrod Wiesen: Obviously on the units per labor our unit is a hawk. So essentially yeah for labor and then for the production line. Yes. You know we track and then we'll do average of carts in the off line. And I know while sometimes it's this and everybody has an excuse for these parts are sick and these take more and, but look at it on a, on a percentage of an average look at the last four months.
Jarrod Wiesen: How many, how many racks do you guys run. Because that you're going to find averages there. It's going to help you schedule. I mean, how many how many racks can you run a day with first, you know. Well I don't know how thick is the stuff. Well, let's just look at the law of averages here and that wall these that's it's not going to give you an exact pinpoint because it's not a production line.
Jarrod Wiesen: But in the off line it's going to get you a small circle. And you can you can dial it in from there versus just not knowing. It's going to give you a pretty educated guess. Got it. And then you're shooting for a target price per hook and price per cart. Right. Yeah. That's correct. Yeah. Got it. And then with the percentage of labor and material on there, you know, what's the, what's the labor rate for this and put it in a percentage of your gross sales and then up your material on top of that.
Jarrod Wiesen: And also it's on based on that expectation, when you quota, you take that math and then cascade it forward for the scheduling. And that's how it's trucking. Got it. Yeah. And then on the density, how is density just a visual thing or how you measure in density. Visual. Got it. But we have hanging standards. So everything, all these parts have been written.
Jarrod Wiesen: Not all of them, but most have been ran by now, multiple times. So there's a hang standard and there's, benefits if you can improve on it. And we do we'll set a hanging there. We'll test the guys, you know, and we'll put a hanging standard out there and that we know can be improved on and see if we're looking at it, if we're thinking that way really, or we'll go the other way, you know, we'll ask something that's unrealistic and see if they're going to come back and push back at management or line.
Jarrod Wiesen: It's going, we can't do this, you know, and the, what I'm talking I don't want intimidation. I want I want the hangers know their job better than me. So why am I talking? Why am I telling them what to do? You know, they they should be telling me. And we encourage that. You know I, I will set unrealistic expectations and then when and applaud them when they're like, man, I'm really sorry.
Jarrod Wiesen: I don't I don't know if this is possible. It's like, you're right, you know, plead your case to me and there's a reward for it. I appreciate that. Don't just don't just fail because this is what what's being said. Think for yourself. We don't want them thinking and giving feedback. So absolutely. Yes. Like a cookie would be like, hey, you put it in the standard two parts per hook.
Jarrod Wiesen: You know, I can do 3 or 4 and you want that feedback, say, hey, Josh or Jared. We can actually do much better here. We can get four parts per hook and improve our density. And they they are better than us, too. I mean, we've we've had some parts and I just all of us are out there, we're looking at and I just can't get it to go.
Jarrod Wiesen: And then two days later, hey, so-and-so said, why don't we do this, this, this and this? And they doubled it. And I'm like, no way. You know, just that it's and it's we definitely do celebrate the wins. Wow. Well, Jared, quite the story there. On on the overall improvements you mentioned the the sales is three acts of the same amount of assets or capital, which is, which is truly, like, like a Harvard case study type, outcome.
Dean Halonen: Any other notable improvements? Maybe an on-time delivery or efficiency in your in your tenure here at Cody's plus, I got I don't know if they had on time delivery beforehand, but I don't I don't have the numbers in front of me here. Yeah. Of of what? Our, of what it is. I know we're not getting a lot of pushback.
Jarrod Wiesen: We do we do watch customer complaints and rejects and parts. I get back there, and I don't I don't hear a lot of customer complaints. Throughput is it's since it's been measured a it's a lot more impressive. I mean, it's at least 40% higher than, than what it was from the small case studies that we did. After putting this, the simple hook counter, I definitely wasn't panicking moment like, does this thing work?
Jarrod Wiesen: You know, there's there's no way it's this bad. And and it worked. It was that bad, which was fun. I mean, at least at least it's low hanging fruit. I mean, the instant dopamine level that you get because you can fix some problems pretty quick. And I don't know if I, I wouldn't say it's a Harvard case study, that maybe that's just how bad it was.
Jarrod Wiesen: It was beforehand. What? We're certainly not any anything special. Just just people that watch and people that care. So it was fun because it's like, we can go sell a lot more right now. We can expedite. We can we can back to the time thing. You know, time wins. You know, we can really get things I we just found 40% open capacity.
Jarrod Wiesen: What what are we going to do with it? We thought we were busy and full this whole time. Turns out we're not. So. Oh, this awesome sweet. You know, that was. It was good. You know, it was good. Amazing. Yeah. And I would say you guys are special. Jared. The culture is special. Where everybody cares. Everybody's pulling the rope and looking for those little, you know, incremental improvements at every at every corner.
Dean Halonen: That that is that is unique. So, we do have some questions here from the audience that is, tuning in. Sandy says, Jared, we're curious, what are your top three operating challenges in today's environment? Just kind of off the top of your head in terms of like today being maybe now, I guess, anything? And in regards of today, operating challenges, employment is hard, you know, and it's it's closer to entry level than that.
Jarrod Wiesen: It's not. So being able to bring employees in quick and train them quick, and give them the understanding a lot of these people never worked in public workshops. They don't know what it is. You know, it's just kind of a job that that's has white physical requirements. And there's, you know, it's dry and it's guaranteed hours. But training people is a is a big thing.
Jarrod Wiesen: And then working with working with customers there are unique challenges. I mean, we have such a broad array from one off staff of a small fabrication company to a big OEM that working with customers is is a big challenge because everybody's everybody's different and everybody has their own way of doing it, a different expectation. You know, sometimes they expect to have their stuff in two weeks and sometimes they have a.
Jarrod Wiesen: Sometimes it's expected to have a lot quicker. So those are the top two. I think I'd have to think a little harder for the top three. Yeah that's good. And then we have a question for question from Jim Stormer. How many lines are you guys running today? I think you guys have a line or line or two and then some batch operations.
Jarrod Wiesen: And then how to steel, how to help with scheduling multiple lines without a forecast, like a sales forecast. So we have we have two companies. Each company has a line in that, one company has three batch of and the other company has two batch ovens. So they're different companies, different iron numbers, different names, different addresses. I do on both of them.
Jarrod Wiesen: So we've looked at each company different. How does steel had schedule parts going. And so that helps a little bit is that we only have one line. So for each schedule. So we have two different subscriptions with steel have one at each at each company. So we just schedule per company. What was the second part of that question.
Jarrod Wiesen: Without a forecast like a sales forecast? Well, we know what we have in the warehouse. So production when I when it hits the receiving dock, you schedule it. If it's. Yep that's what and it well a lot of it's repeat work now or we've coded it so we already know we look let's look at the production line.
Jarrod Wiesen: We already know how many cooks are in there. So at any given time, I can look in the warehouse and see how many cooks there are. Oh, every 24 hours, we have the capabilities to run about 3000 hooks. So there better be about 12,000 hooks in the warehouse. And that's going to be just just in time. It it fluctuates.
Jarrod Wiesen: So but we seem to be right there. Awesome. And a question from Aaron here. That was he is the president of steel and one of our co-founders as well. And he was saying that when during the deployment, that when you'd walk in in the morning, your first question was like, are we busy today? And the team was saying that it's hard to answer, like, I can't answer Jared Jared's question, now that you're on steelhead, is that answer pretty easy of like, are we busy today?
Jarrod Wiesen: They have it. Before I get out of bed in the morning. It's on my it's on my email. It's the first thing I do when I look up. There is every shift can tell me and I can look at how many hooks we have and how many we've done. And that's kind of tell us if we're busy. It's a it's the first thing we talk about, but everybody knows it.
Jarrod Wiesen: That's the first thing. Hi. Good morning. Are we busy? Hi. Good morning. How are you? Good. This is what we have in the backlog. We're schedule. We have work scheduled up to, next Tuesday at 2:00. We have 20 hours on schedule. Then we have, you know, 70 racks sitting in the off line, and we. Okay, so we're sitting right there.
Jarrod Wiesen: Are we working this weekend? Is, you know, going to be the next question. Are we working Friday. What's our overtime looking like. Wow. Well yeah they they have they have the the they have all the time. They know all the time. And when, when you see me walking through they. Yep. This is refreshed. How much are we sitting ahead of schedule?
Jarrod Wiesen: 13% as of 45 seconds ago. So everybody has all the time I mean it's it's on their phone. It's on their computer and everybody has it. It's it's awesome. So we all know you know. Wow. So everyone's is like pacing like pacing pacing to the plan. And that's it's truly amazing. Another question here from Sandy, now that you are, fully established and maybe in the Grand Rapids market, who are you primarily servicing like?
Dean Halonen: Is there a certain sector like, hey, it's data centers or it's, you know, distribution centers or automotive or we try not to get to to and we try to diversify what the data centers is taken up to be a good percentage of us. But Grand Rapids is, used to be, I guess, I don't know if it is anymore.
Jarrod Wiesen: Furniture city USA, we do a lot with the furniture industry. We still do material handling. Tech data centers are getting busier and busier. We're seeing more and more opportunities with with that, a lot of it's unknown. There's there's some agriculture greenhouses we see right now. We're seeing a lot of greenhouse stuff from the January to, April.
Jarrod Wiesen: There's a lot of a lot of greenhouse stuff. And we see some medical. We try to stay as diverse as we can. In the past, we've gotten too heavy in one industry, and, you know, that it can be detrimental. Can be a little risky if it drops. Yeah, right. Another question here from Mark. So you mentioned positioning coatings plus and weighs in powder as a as a partner to the customer.
Dean Halonen: And being a part of the project from cradle to grave. Maybe just talk a little more about like, like how do you position okay. Coatings. Plus we want to be like integral to every to every to our customers like they never dream about in-house in their work. Right. How do you how do you handle that?
Jarrod Wiesen: You know, recently we people are talking about tariffs and moving jobs back. So it's given us a good opportunity to to look at things and if things make sense to bring back stateside and if it has powder coat on it or even if it's an idea, this is a first time run. If it has powder coat on it, you should be meeting with your powder coating right away.
Jarrod Wiesen: Let's start talking about hook marks. Let's start talking about quality expectations. Is this part indoor outdoor medical? Is it aerospace? You know, let's start talking about it right now. Even if it's white light you know hey just a simple RFQ, okay? We don't have anything else is there. We're going to have to have some parts, some custom racking.
Jarrod Wiesen: What does target price have to be and what let's start working before we like to have reports in 24 hours. But if we have a complex project going that well, does custom tooling make sense? Why might be two days out to get a custom tooling for, you know, can we start buying material on volume because all their customers waiting on a quote and they're waiting on me, we might take more time.
Jarrod Wiesen: So if we can get in that project early, even when it's a concept of an idea, it's it I prefer. I want to be there right out the gate, then that, then that way when it does come to fruition, if it does, you're going to see us as a partner. We're not going to be shopped, where we can.
Jarrod Wiesen: That's that's totally up to them. But I want to make them more successful. And I want my I want my customer to see, well, you know, coatings plus really went above and beyond. And they had to get a custom powder, water and tooling and all this stuff. So that really helps us have the upper hand. When that job does come live.
Jarrod Wiesen: Let's, let's get a really good plan so that my customer can be competitive. We want to see it. We want to see it arrive. Yep. And there's some I, I used to be a design engineer at General Motors and coming out of college, I knew nothing about manufacturing. Like where a hole should be, where a hook could be, how a bracket can be bent, all these things, I mean, a lot of like entry level people just don't fully understand it.
Dean Halonen: So having that be a little like our design partner on the early side, most manufacturers are not in my in my opinion. I don't want you to know it. I want you to just bring in your professional that knows that. Right. Bring in the PR and then you'll take it from there either. Right. Well, let's don't don't be a particle professional.
Dean Halonen: Bring in the professional. Right, right. It's a great point. And then there's this last one here from John John Molder. So on the quality side of things, how or what reporting do you pull out of steelhead to on the quality side to make decisions or like have, maybe some quality data that you never had before?
Jarrod Wiesen: Well, we never we never tried to rework or reasons why. So if we, when we started track and rework, is it cross contamination. Is it a hook mark. Is it too light. Is it too heavy? So now we not only is it just classified, not that we were when we when Collins Plus was purchased, but rework was never tracked.
Jarrod Wiesen: Now we have reasons why. So we can start working on. We had some cross contamination issues that that we were having inside the oven. So we came up with up with a way to clean the oven of particles in the air in between color changes. And so now that we had that data of what we were having for cross contamination issues, we figured out that it was in the oven.
Jarrod Wiesen: Well, now, does this investment work to clean particles in the air? So having different reasons of why things are scrapped, obviously from making the same mistake again, you know. Yeah. Yeah. Don't get fooled twice essentially. Right. You know we we use steelhead for like example hanging salads. You know if there's, there's a part that has four holes on it, you know, but we might like most of the time we're not told where to hang, you know, but we might hang it in the wrong spot, you know, hey, we'd rather you hang it here.
Jarrod Wiesen: A rivet goes in there and no one's going to see it anymore. Okay, we'll let it go this time or whatever. But does. How does that message get relayed? I might not see this part for another year. So utilizing steelhead and hanging standards and putting quality alerts for a supervisor has to sign off on it. It's not just Jared showing up to the customer and saying, oh wow, we'll do better. I'll go talk to the guys.
Jarrod Wiesen: No one's going to remember this part in six months or two years when it when it shows back up. So having the data and all the documents, when I say we're going to do something about it, we are you know, we're going to make sure that this doesn't happen again. We're going to hold people accountable with with signatures. And and that's part of our corrective action on it too.
Jarrod Wiesen: And, and we take every customer complaint, we file a corrective action on it. We're not an ISO shop. We're not required. A lot of the time our customers don't require it. We do believe in it. So still, it's a big a big portion of how we document a lot of that, those quality concerns. That's amazing. And on the hanging, Senator, you snapping a picture with a phone or a tablet?
Jarrod Wiesen: There's there's a there's tablet and there's screens at every station so you can read it, in your language. And then there's a picture, it just with speeds, you know, same with same with packaging, you know, hey, we require a bag inside foam and then shrink wrap or just rough pack or just put back in the Gaylord box. There's a lot of different quality standards and it's ported so.
Jarrod Wiesen: So there's a picture every time. And then if there's, you know, hey, we have some white powder in this corner. We'll have like a go no go gauge of this is acceptable. This is not. So they're not showing up to the office. You know, there's 10,000 parts on there. Is this one okay. Is this one okay? You know, it gives them all the information on the line.
Jarrod Wiesen: And this we run 24 hours of the day. So they're always had the information. It's not like they're calling you at home or anything like that. So given your operators as much, as much as you can, this is always probably going to be a key. Yeah. Power to the people. I like to say give them the information to make the right decision. John fired.
Dean Halonen: And one last one here on the business side of things like, what are your favorite reports to help make business decisions? Coming out of favorite reports coming out of steelhead? Well, up time efficiency is going to talk about asset capacity. So it's going to tell you if you need to buy equipment. UPL is going to be closely tied to your profit loss.
Jarrod Wiesen: So it's a company successful. And I like to see on time shipment customer complaints. And we track them weekly customer complaints. And I like to stay on top of those because I don't want to get brushed under a rock. I do want to make sure that we do care, and I want my customer to know that when we do make a mistake, we take it very serious. We appreciate your work.
Dean Halonen: Unbelievable. Jared, thank you so much for your time. I know we're going a little long here, over a lot of time, but this has been amazing, super informative. If you're in the Grand Rapids area looking for a coding supplier, there's nobody better here than Coding Plus. And the reason way or reason, the reason team as well. So thanks everybody else for for calling in. Next month we'll have James Bohl from Sullivan Precision Metal finishing.
Dean Halonen: You can you can join that next month. But, thanks again, Jared, and thank you. But yeah. Thank you. So. Yeah.