The story is almost a cliché these days; the customer needs parts yesterday and you have a week’s worth of production left.

It was a typical Monday morning when we got the call from the Norfolk Naval shipyard. There was a container ship leaving 10 days from Monday, and our parts needed to be on that ship. Production was still in process and would be finished Thursday afternoon. With that in mind, we told the procurement officer that there shouldn’t be a problem and hung up the phone. But upon checking the parts list for that order, we quickly discovered that there were two parts which required heat treating.

It wasn’t until we called our outside heat treating service company that we realized we had a big problem. Their current backlog was one week. There was no way to make the boat unless the parts were completed and out by Tuesday. We were at least two days short of time.

One constant truth about manufacturing I have found is that you always have options. Ours were to either ship the parts late and lose the contract, speed up the manufacturing process or heat treat the parts in house. With a limited window of only a few hours to make this decision, we dissected the choices, one at a time. Option one was out of the question; we simply could not afford to lose the contract. We quickly discovered that speeding up manufacturing wasn’t possible without shutting down several other jobs that were just as hot. In the end, the only option that made sense was heat treating the components in-house quickly.

We already had some of the equipment in place to make heat treating feasible, but we had no idea if it would work right. For our socket production line, we had installed a furnace next one of our punch presses. This setup was used to heat blanks up to 1800 degrees Fahrenheit. There was a large hood over the furnace to pull out heat and gas. We had access to several air lines, and one gas line could be tapped into if needed. With that layout in mind, we had the rest of the afternoon to figure out the best method to finish the parts in-house.

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I am a bookkeeper with a small company. My boss, one of three brothers who own the business, is married with three kids. Last month, he asked me to place a considerably younger woman, whom I have never seen in our shop, on the payroll. A work associate told me the woman is my boss’s mistress. I processed an expense account report for a tradeshow trip, and I noticed dinner receipts for two and hotel bills showing double occupancy. I knew his wife was home with the kids during the show because I saw her that week at the hockey complex where our kids play. His two brothers are absentee owners (both get paychecks) whom I don’t think would approve of their brother’s actions. Should I confront my boss? Should I tell his brothers? The amount is not huge, but it’s better than my paycheck. The work associate says my boss is an adulterer who is using the company’s money to fund his own indiscretions, and I ought to report it to his brothers.

Russell says:
Family businesses are often piggy banks for the owners who use them to fund all sorts of activities, including some which are marginally related, if at all, to the operation of the business.

While you have your suspicions, you have no clear evidence of illegal conduct (tax fraud, money laundering), and there are a variety of innocent explanations for your boss’s conduct. Perhaps Ms. X is a leading expert on quality systems, and the restaurant tab reflects a working dinner in preparation for a sales pitch the next day. Maybe the hotel bill shows double occupancy because his wife, who planned to come, stayed behind to take the hockey player to district finals, which no one expected the team to make. If Ms. X attended the conference, you might ask where her hotel receipt is. But, she may say she stayed with her old business school roommate, who happens to live in the town where the conference was held.

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Texas City Explosion 2005

As the details gradually emerge from the BP oil spill it becomes more and more clear that management in London had incentivized the troops in the field to skimp on maintenance to enhance the company’s bottom line. There probably is a connection between the BP refinery explosion at Texas City back in 2005 and the Deepwater catastrophe in the Gulf. It appears to me that London had incentivized its employees to emphasize the short-term bottom line and ignore the future consequences.

With the U.S. productivity statistics showing incredible improvement in efficiency month after month, it prompts the question whether productivity incentives are always good long-term.

In the machining game, there is a danger in setting productivity targets that invite people to game the system. If one machine operator or shift is competing with another the temptation for sabotage in the plant is real. When teams compete against norms and other teams, the peer pressure within teams can become destructive to the enterprise. In a coal mine, when tonnage means everything, safety is often neglected, which may culminate in tragedy.

Sales incentives which are based on monthly or quarterly results often end up with employees gaming the system.

I’m interested in your experience with incentives.

How do you make incentives work for the business rather than undermine it?

I’ve got a great purchasing department. There are specialists in commodities, equipment, engineered products, and even someone who buys all our office and building supplies for our three locations. Recently, one of the department members was bragging about the new set of golf clubs she won at a vendor’s golf outing, and it got me thinking about the potential for kickbacks or extravagant gifts and how that could create problems, both internally and with some of our customers. We probably should have had some sort of policy years ago, but I’ve never seen a problem, at least so far. What should I be thinking about?

First, I wouldn’t limit my concern to the buying side. You can have bigger problems on the sales side, particularly if you run afoul of a customer’s purchasing policies. If you’re selling to the government, there are gift giving activities that can not only disqualify you from bidding for work but can land you in the “big house.” If you’re selling overseas, “gifts” to foreign officials can violate the Foreign Corrupt Practices Act and the laws of your host country. There are tax issues as well, such as the deductibility of gifts or the declaration of them as income. The IRS doesn’t fool around.

In addition to looking at the legal issues such as taxes and bribery laws, you should examine your customers’ policies. Many companies place a dollar limit on meals and restrict employees from accepting anything more than a key chain or coffee cup with the vendor’s logo. A customer’s employee who overlooks these policies can be fi red and get you off the vendor list. In an age where almost every action has the potential to be exposed, the era of the buyer’s trunk quietly getting loaded with booze and food at the holidays is waning. Obviously, a simple solution beyond reproach is to ban gift giving and gift getting. This however leaves a grey area, such as who pays for lunch or whether to accept an offer to use the vendor’s box seats for the playoffs. It also denies the reality that business acquaintances occasionally develop into real friendships, where gift giving and other favors are normal parts of friendship.

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What do you do when your doctor tells you to do something that you doubt is necessary?

I just endured a kidney scan and a cystoscope because I had a few extra blood cells in a urine test. The nurse called me several weeks after the initial test at a six-month appointment and told me that I needed to come back because my test wasn’t “normal.” OK, I’ll spend an afternoon going into the city to pee in a cup. But then the urologist says, “Lloyd, I want you to do a kidney scan and a bladder scope. There is a one in 100 chance there’s anything, but you are the age…”

So what do you do? Tell the doc who has treated you for 20 years, cut into your body and saved your life once, that he’s overreacting or milking the system? The doctor is God, right? Doing nothing could be a catastrophic mistake. Didn’t I miss the signals before my heart attack two years ago?

So I took all the tests. Everything was cool. I’ve got the nasty aftereffects of the scope and I feel like a chump, a dumb sheep who lamely colored between the lines of American medicine.

Question: What do you do these days when you feel fine, but the medical practitioner tells you to worry or take a drug? What do you trust—your gut or your doc?

According to Chiodo there are a lot of misconceptions about what the Tea Party actually is. He suggested I ask the following questions to readers to find out what they think the term “Tea Party” means.

1. Are you a member of the Tea Party?

2. What do you think the Tea Party represents?

3. If you think you know what it represents, what is your source of info?

Can’t wait to hear your answers.

Photo Source Michigantaxes.com

Tony Maglica of Mag Instrument Inc. at Work

I just spent a week doing the most inefficient, labor-intensive, stupidly expensive, appallingly large carbon footprint use of my time I can think of. I schlepped to California and knocked on doors. It was one of the most satisfying weeks I’ve spent in 10 years. Every face-to-face call I made was productive. Each client and potential client I met with spent more time with me and was more open than I could’ve anticipated. I realized that old school active listening face-to-face was still magical.

Two of the clients I visited were Tony Maglica and Ray Fish, who continue to defy the odds and conventional business wisdom as they build their companies in ridiculously expensive Los Angeles. Tony is 80 years old and runs Mag Instrument. Inc., the manufacturer of the Maglite® Flashlight,out of an immaculate million square foot complex in Ontario, 30 miles southeast of L.A. Ray is 76 and runs Electro-Adapter, making aircraft wiring hardware out of a functional 100,000 square foot plant in Chatsworth in the San Fernando Valley.

Both men work a dozen hours a day turning aluminum and other metals into countless perfect assemblies and finished products. Are they doing it for the money? Of course there are. And of course they aren’t. Tony could’ve sold out for centimillions I’m sure, and Ray hardly needs a tag day, but the daily challenges continue to light their fires.

Both guys still love to buy machinery. They live for the bargains on cam equipment that their peers would call obsolete. Tony recently bought a batch of Davenport screw machines and Ray picked up ten B60 single spindle turret automatics and made five good ones out of them. He still has the extra carcasses laying around for useful scavenging. Tony Maglica’s passion for unloved machinery brought him to the bankrupt assets of German Rotary transfer machine maker, Eubama, which he picked up from the ash heap. Tony has long admired the small Eubama trunnion, and he’s relishing the challenge of tweaking the design and making the key components in California and then shipping them to Germany for assembly.

Ray Fish was crowing to me about getting a steal on a Haas SL-20 lathe in a San Diego machine shop auction. The machine had 300 hours on the spindle. He had also just lowballed a dealer on a GT 75 Omniturn, even though he needs three of them right now. Ray knows what he wants, but the fun for him is buying it at garage sale prices.

When I spend time with manufacturing lifers like Tony Maglica and Ray Fish, I think of the aphorism, “Nobody says on their deathbed ‘I wish I’d spent more time at the office.’” I think these guys would laugh out loud at that common wisdom.

Question: On your deathbed do you think you will wish you had spent less time at the office?

Dan Ariely is professor of Behavioral Economics at Duke University. Behavioral economics examines market trends like traditional economics, but distinguishes itself by not assuming that humans always act rationally. The research relies on observing how people behave rather than using traditional economics methods such as cost-benefit analysis.

What is the behavioral economics perspective of the recent stock market crash?
DA: You can think about the recent stock market crash as a good example of the differences between standard and behavioral economics. In standard economics you let people run loose, and because people can optimize and be rational and they do only what’s best for themselves, the whole system works very well. In behavioral economics we don’t think this is the case. We think that there’s a lot of reasons why people make mistakes, and as a consequence they can’t be let loose on everything. The free market is not the right approach.

Define “irrational.”
DA: When we act in ways that we don’t understand or predict. This matters because it gives us an opportunity to get into trouble. If I think that I will have safe sex when the time comes but when I get aroused I don’t, it’s an opportunity to get into trouble. If I think that I will save for a long time but then I get tempted to buy certain things, that’s a problem. If we think that people can compute what is the right amount of mortgage for them to take out that’s a problem. If we think like Greenspan said when he testifi ed in front of congress that he thought that people would work in the best interest of their companies, which is clearly not the case, we get into trouble.

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For an extra $5,800, buyers of a Corvette Z06 or ZR1 can go to the General Motors Performance Build Center in Wixom, Mich., and assemble their own car’s engine. Even car maintenance novices will have the opportunity to build their own engines because as part of the deal a GM technician supervises the process.

“Corvette owners are some of the most passionate—and most involved—enthusiasts in the industry,” Jim Campbell, vice president of Chevrolet marketing in the United States, said on Monday. “The Corvette engine build experience offers customers an unprecedented opportunity to participate, hands on, in creating the car.”

Now I’m not the most mechanically inclined (ironic for an editor at Today’s Machining World), but I still think that it’s a way cool idea. But why?

Why are people fascinated with doing things independently and creating things themselves? I know, some of you are skeptical of this commentary, because after all, in America we are notorious for watching copious amounts of TV, eating fast food and going to Wal-Mart to buy everything we need.

Most people reading this article do a least one of those things, but still, tons of Americans like watching reality shows about hands on topics like cooking, building customized motorcycles, and restoring houses. Americans like to go to restaurants like Big Bowl where we pay for the right to create our own Asian dishes. We go to fish hatcheries and go berry picking where we hunt and gather our own food and then pay someone for the experience. Along with that caveman phenomenon, it seems like every other American is proud to have created his or her own HD home video.

Is it human instinct to want to build and create? Or maybe even just animal instinct? I believe it is. Many people don’t create things on a regular basis because we’ve been conditioned that the ideal is for other people or machines to do things for us, whether it be cook, farm, program computers, or fix our car engines.

But if you put kids together in a sandbox, or in a room with Legos, or even in a kitchen with pots and pans, there is a good chance they will create something, be it be a structure or a story or a work of art.

Question: Is it human nature to create things?

Source: nytimes.com

Corvette LS9 Engine Built From Start to Finish

Fernando Orellana’s father was a civil engineer and Fernando, when he was growing up, liked art. There seemed little to connect them.

“But I saw my father tinkering when he came home, doing this and that. I watched, but with no particular interest,” said Orellana. “Then someone connected the dots for me. What my dad was doing was no less art than what I did. The idea is that he was being creative and trying to figure things out. That is art.”

What finally dawned on Orellana is what has become an exciting mini-trend in modern art, the connection of mechanics, technology and art, primarily sculpture. Since it is primarily robotics-based, it is called ArtBots, and its advocates are positively evangelical about it.

“The definition of robotics is not firm and, frankly, the definition of art isn’t firm either,” said Douglas Irving Repetto, whose day job is as the Director of Research at the Columbia University Computer Music Center, but whose lifeblood is as the guru of the ArtBot movement. He has been the curator of several significant ArtBot exhibitions, the most recent one this summer at the Klein Art Gallery in the University City Science Center, a research facility just off the campuses of the University of Pennsylvania and Drexel University. “It is a diverse and wide open field and full of open questions. The primary one is, ‘What does it mean for a non-human system to be creative?’ Each artist is asking different questions when he or she enters the world of robotics. There is a sense now that there is a lot here, and that we don’t really know the answers yet.”

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