Grace Clark:
Welcome to the show, and if you could please just introduce yourself for our audience.

 

Tod Virden | GrayMatter:
Hi, good morning. My name is Todd Virden. I’m the Vice President of Brilliant Operations here at GrayMatter.

 

Grace Clark:
Can you please tell us about your role at GrayMatter and your background in the manufacturing industry?

 

Tod Virden | GrayMatter:
Sure thing. So we’ll start at the beginning. So I spent about 14 years in industry before joining GrayMatter. So I grew up in General Electric Company in a variety of different manufacturing environments. Started out in a high speed light bulb manufacturing facility, really learning PLCs, HMIs, vision systems, and then starting to dabble in SCADA for data collection off of our test equipment or our production lines. Transitioned from there. Spent a couple of years in the medical device industry where we were making parts for X-ray machines. Very validation heavy. I didn’t love it because things went really slow. I was on the customer focused teams, so that meant we were taking customer requirements, figuring out how to make the product, and then validating the manufacturing process. From there, I transitioned to GE Transportation. It was the locomotive division to help start up a factory. Because of my background in automation, my plan manager at the time who I had worked for at my first role asked that as we were buying equipment for that facility, we thought about everything with a digital mindset in mind.

 

So being able to connect it to the network, gather data, and eventually connect it to a plant SCADA system even though we didn’t have anything because we were tearing out the concrete. After that facility was up and live, I became a production supervisor for a few months, maybe a year out of necessity, I had built the line, so I was the person right for running it. Transitioned into a facilities manager for a while, helping to get the facility side of things in order, and then really transitioned into what I call the machine connectivity leader for GE Transportation. So because of my background in the automation thing, SCADA machine connectivity took what I was doing at one facility and really scaled that out to the business and that’s where I actually got to know gray matter. So GrayMatter was a system integrator for me for about four and a half, five years as we went through the GE Transportation business and connected over 400 machines across 13 different facilities.

 

So now I’ve been at GrayMatter for about five and a half years. I’m joined as a solution architect, helping customers figure out what they want to do on their journey, and then coming up on two years ago now, I took over the brilliant operations team. So my team focuses now on MES implementations, integration to other business systems, dashboarding and reporting, and then we pull in our automation folks when we need to do that machine connectivity or we need to upgrade a system or what have you. So my team now is pretty geographically diverse, but we work in a number of different products to implement MES for our customers.

 

Grace Clark:
Very cool. So we are going to be talking about MES a bit today. My first question to you is what are some of the ways that industrial professionals, especially those who are in non-technical roles, what should they think about when they hear manufacturing execution system also known as MES?

 

Tod Virden | GrayMatter:
Yeah, that’s a great question and if I’m meeting somebody for the first time that has heard of MES but doesn’t really know what it is or has maybe looked at Gartner reports or scoured LinkedIn, those sorts of things, I like to put it as it’s your business process digitized. So it could be tracking of ingredients or parts through the manufacturing process. It could be understanding downtime or digitizing the quality checks that you do or in an ideal world, all of the above. It is really an ecosystem of solutions and put onto a single pane of glass. I like to put it as we want the operators to focus on what they make and doing it the best that they can and not have to think about “what system do I go to track the downtime that I just had,” or “where do I put my ingredients that I just consumed to make this batch?” Or “Oh, I got to go grab my clipboard to answer these questions about this widget that I just made.” We want to make it easy for the operators to do their jobs and get all of that information back to the decision makers who can help to do things better, faster, cheaper, and ensure the right quality.

 

Grace Clark:
Your team has identified a opportunity in the mid-market, mid-market companies. How has the conversation about MES being available to mid-market companies changed from say 10 years ago?

 

Tod Virden | GrayMatter:
Great question. 10 years ago, if you weren’t in the Fortune 100, you probably couldn’t afford to get started in MES. It was software expensive. It was hardware expensive. You had to have a large team of people to deploy almost all of the solutions 10 years ago even were on trend, right? There were very few SaaS or platform as a service kind of solutions out there. We’ve seen a huge shift in the industry over the last 5-10 years that have made MES more accessible to the masses. So now certain software packages are much lighter weight, easier to install, less IT intensive. Other platforms are literally software as a service or platform as a service where you’re not hosting any of that. The vendors are taking the heavy IT lift off. So as we see the move from the Fortune 100s, Fortune 250s into that, it means that they don’t have to have as many people to manage the implementations or the solutions long-term, which makes them more cost effective. It kind of moves the cost around a little bit, but there’s a lot more creative ways to get started.

 

Grace Clark:
Tell me about some of the challenges that these mid-market manufacturers are facing when considering an MES solution.

 

Tod Virden | GrayMatter:
So unfortunately, the challenges, the mid-market folks or even the small and mediums face is not different than the big guys, right? The Fortune 50 if you will. It’s all about finding value in the solution and being able to justify the ROI and understanding what are you trying to accomplish, why would you embark on, and I’ll even go above MES, why would you embark on some digital transformation or some Industry 4.0 or whatever you want to call it. There’s got to be some reason to do it. And what we want to make sure is that we’re not trying to boil the ocean to get started. I hate to say it. I want to talk them into starting small, maybe having a vision for boiling the ocean, but starting small and getting traction with something. And if you’re on LinkedIn and active at all, you’ll see a lot of things about is OEE dead?

I think OEE has its place, but man, do I like starting with just downtime tracking. If you can’t track downtime, we’re not even going to talk about OEE. We’ve got to build a culture around using systems and MES is a solution is great, but we got to not forget about the people and process side of things and boil that all back to, you have to talk about the ROI. So if we’re talking about a downtime solution, what do you hope to get out of that investment? And really, I think within the mid-market, the major challenge there is having enough people on the team to help build that justification, that use case and understanding why it’s valuable to them, and then selling up to the C-suite to fund the thing. If you can’t justify an ROI, you’re never getting started it. At GrayMatter, we’ve got some tools and tips and tricks we can use to help customers justify that business case to get started faster.

 

Grace Clark:
Well, that’s fantastic. I mean, honestly, I can really relate to that from a marketing perspective with our clients where it’s like we should probably start small. We need to have goals in mind. So it’s just kind of interesting to me how even though that’s engineering, the idea still aligns.

 

Tod Virden | GrayMatter:
Absolutely.

 

Grace Clark:
Through those who go through with that type of solution. What are some of the benefits that specifically a medium-sized manufacturer could gain?

 

Tod Virden | GrayMatter:
Similar to the last one, it doesn’t matter if you’re small, medium, or big. I think these are all the same types of benefits on time delivery is a big one, right? Getting product out the door to your customer when it needs to be there. Increasing asset utilization or personnel productivity I think is another big one, or probably one of the most important ones that we see, especially in the food and bev and similar spaces is traceability. And that one’s a hard one to put a value around, but being able to do that traceability audit quicker with less banker boxes full of paper. I think probably one of the biggest detriments I see to the mid-market is they’re typically people constrained. So when you’re taking your people that are already constrained and now giving them a task of like, go do a traceability audit for this product because big tier one autos says you got to do it tomorrow.

If that’s paper based, you’re now taking one of your key players, your starting pitchers now off the mound and he’s in the back office going through paper. And to me that’s got a huge benefit to the business. Putting an actual justifiable ROI around any one of those can be tricky if you don’t have some tools at your disposal to justify them. But I’d say those are probably the biggest ones is on time delivery. Right the first time, decreased downtime, and then your asset utilization, whether it be people or equipment, either one, getting more out of them. I got to be careful to say here, with any solution we deliver, the solution by itself does not solve the problem. It’s a tool for your team to use to get to that end state. But without user adoption, the MES, I don’t care the brand, there is none out there that will solve it on its own. That’s where people and process has got to come into play.

 

Grace Clark:
Yeah, there’s no magic button.

 

Tod Virden | GrayMatter:
Unfortunately. No manufacturing is hard.

 

Grace Clark:
Right. Speaking of resistance to adoption, so how can manufacturers overcome that resistance to change when adopting modernization strategies that require these different workflows and processes?

 

Tod Virden | GrayMatter:
So to me, this is the most important part of a modernization strategy, and it all starts with communication. I’m a firm believer in: we’ve got to educate the entire team on the why implement some new system? Why digitize? Why take things off a paper and put them into a computer? Why add PCs or PLCs? If we can get the team to rally behind the why and see how it benefits them, they’ll be much more likely to engage and adopt whatever’s being done. If we force things from the top down, or worse yet from the system integrators point of view, we will fail without why. The plant I helped start up, we viewed this as a huge investment in not just the plant but in the region, and it was job security for the long term. The fact that we were investing millions of dollars into digital technology meant that we could run a plant more effectively and efficiently so that the current people that work there… so that their kids and grandkids can have jobs.

 

That’s a powerful why to get behind. If the team views it as, “oh, they’re just doing this so they can cut headcount,” you will not get the right engagement. And I’d say this day in age, MES specifically is almost never deployed to reduce headcount. It is deployed because people can’t onboard fast enough. Turnover is already high, so the yellow robots sometimes get a bad rap for replacing people, but I think even there it’s not replacing people so much as an upskilling of other skill sets. I view MES the same way. It’s not to replace people, it’s to get more value out of the assets that you’ve got.

 

Grace Clark:
Absolutely. When it comes to, when we started this, your company recognized that there was this market opportunity. So how did you identify this market opportunity within these mid-size companies?

 

Tod Virden | GrayMatter:
Great question. So we’ve been working with a lot of the big guys for over 20 years. We’ve got great relationships in a lot of those Fortune 250 kind of customers, and over the last, I’ll say three to five years, we’ve really seen a shift in the market coming to us and as well as our marketing team outreach. I think part of it’s driven by: we’ve had friends leave the big guys and go to other places and say, “wow, we’re missing this.” And they’re coming to us and saying, “Hey, you know what you did for me over there. We want you to do that again here.” But that’s one avenue, but we’ve also just seen certain industries really starting to pick up building materials. As an example, I would’ve never traditionally targeted building materials as an industry to be looking for MES, but now we’ve got those folks coming to us saying, Hey, we know you guys do this sort of thing. Can you help us as well? Because we’ve seen the market shift. I think it’s allowed our marketing team, our sales team to go put some targeted approaches in place to go look for opportunities as well.

 

Grace Clark:
What kind of conversations were you and your outreach… what kind of conversations were you having with manufacturers that kind of revealed this shift and this gap in the market?

 

Tod Virden | GrayMatter:
It’s an interesting time where lots of people are trying to do more with less. As we’ve been talking to different customer friends, some of them are putting in a new ERP system and trying to get data out of their control system or just trying to get off paper because they know they can’t make any decisions when all of their data is locked into paper. So I think from what conversations are we having, it really varies on who the client is, what we’re working on them with, whether it’s a cold reach out from them to us or us to them. The conversations start all over the place. From a market standpoint, I’d say it was a little more naturally flowing than a big aha moment for us. It was kind of, I took a step back with our sales and marketing teams and said, “wow, we’ve seen a lot of this type of food and bev coming to us recently. Maybe we should go do some more targeted,” or “we’ve seen these construction folks coming to us, maybe we should do something different.” So I’d say been more natural and evolutionary versus revolutionary.

 

Grace Clark:
Gotcha. Gotcha. So you had these companies coming to you. Just curious, what do you think your marketing was doing successfully to attract these type of new clients? Like you said, building materials, you would’ve never thought of serving that area, but they came to you. Where do you think you were going right with your marketing?

 

Tod Virden | GrayMatter:
We do a variety of different things through our marketing team. We host monthly and powerup podcast where we talk about different topics and we publish that out to our team. We’re very active on LinkedIn and posting different things about what we’ve got going on or just thought provoking kind of thought leader kind of stuff. We also host specific events where we target our current customers, but also new ones, and I think the diverse matrix of things that we do helps to deliver the right information to the right people because in a day where spam filters are absolutely amazing in email these days, a lot of the traditional email campaigns get filtered out. So it is a multifaceted approach that I think works the best and for no customer is like, “this is the only way you’re going to reach them.” It’s got to be a little bit of everything.

 

Grace Clark:
So you had mentioned this a little bit earlier, hesitancy and you need ROI behind it to justify things. So how do you and how does your team approach cost justification and ROI discussions with these mid-market clients who they’re a little hesitant to invest in MES?

 

Tod Virden | GrayMatter:
This is always an interesting one because – I’ll give two different dynamics. When there’s a customer that we don’t know very well, they can be very hesitant to get into financial kind of information. Even if we are under NDA with them versus a customer that maybe we’ve done some things with them and we’ve already built a trust relationship, they can be a little bit more willing. But I’d say number one, we got to get beyond that trust factor and make sure that they understand that we really do steward their information very carefully so that we can get into real ROI discussions. You know what, we’ve got slides for days on what is an MES worth. Directionally, those things are great to get started. I can say that by implementing a solution, you’re going to get 20 points in downtime improvement. The question is: what does that mean for a small or mid-market client?

If they don’t have hundreds of employees and thousands of assets, that may not resonate, but if we go a little bit deeper into the weeds, what do you pay your hourly workers? What does an hour of weekend work cost and walking through, what does it really cost? Not just: I’m paying somebody their hourly rate, but now I’ve got to have the air compressors on, I’ve got to have the lights on, I’ve got to have the nitrogen tanks running. All these other things that add up when you’re like, “oh, wow, if I could have got that hour on straight time when I was already open already working, already had the team there, that cost is much less than that one hour of overtime.” And sometimes if you’re not walking people through that mindset, they don’t get it. I mentioned this earlier, we’ve got some tools that we use to help capture all of those different elements to really build that ROI discussion and then not talk generically about, “oh yeah, we’ll get you 20 points. It’ll be great, I promise, and get to know if you spend a hundred thousand, we’ll save you 300,000 in this timeframe.”

Or sometimes we get to, “if you spend $100,000, I’ll only save you $50,000,” and then we have a tougher conversation about should that customer proceed. Sometimes the answer is yes because it’s a strategic thing that needs to be done for them to enable their business to go after other markets. If you’re in the automotive industry and you can’t do traceability, you’re not going to win certain customers over. Sometimes you just have to do it to get a seat at the table, and other times it’s like, no, we’re going to do this because it has good financial sense to it.

 

Grace Clark:
You’d mentioned automotive industry and if you can’t do traceability, you out of luck. Are there any particular industries or types of manufacturers within these mid-market that you see adopting MES more readily than others?

 

Tod Virden | GrayMatter:
I’ve got three that come to mind immediately when you ask that question, and I’ve already mentioned at least two of them, but food and bev in the smaller variety, right. For some reason I’ll say baked goods has come up a lot recently. We’ve seen multiple different clients where smaller facilities, very paper-based, wanting to get to quicker traceability exercises. That’s one. Building materials. I mentioned everything from aggregates to the actual end customer products. And the third, interestingly enough, I’d say are smaller beverage producers, both alcoholic and non-alcoholic. Again, the big guys have all had these sorts of things for a long time, but we’re getting to that next level down, and I really think a lot of it is due to people moving, right? People that used to be at a big CPG or food and bev customer and now they’re at a smaller one and they’re saying, “man, I know what these things can do.” We had somebody at an event recently say, “I’ve seen the Promised Land. I know what this can do for me.” And I was like, “wow, that’s a powerful statement.” So he had been somewhere else and he was somewhere new now, and he was like, I need that because I know what it did for me in the past. I think some of the movements we see of people in the market are really helping to fuel this more so than just the grassroots within the medium sized companies.

 

Grace Clark:
That is an impactful statement right there.

 

Tod Virden | GrayMatter:
When I heard him say, I’m like, “wow, yeah, these words are impactful.” I’m like, “okay, I’ve seen the promised land. I know what good looks like.” I’m like, “okay.”

 

Grace Clark:
Could you share a success story where you were working with a mid-market manufacturer and they successfully adopted an MES solution? Maybe what kind of impact did it have for them?

 

Tod Virden | GrayMatter:
So one that comes to mind immediately, food and bev customer, everything’s on paper today. Everything’s trapped on paper and I mentioned this earlier. They run pretty lean multiple facilities around the world, but at any given facility, only a handful of operational manager folks. For them, traceability was key. They wanted downtime and efficiency tracking, and they wanted digital process orders and all these other things that we’ve done for them. But to me, the most impactful thing was making sure their quality audits were done and that they could do their traceability reports. If an FDA auditor walked in, and the way they used to do it was literally they’d go to the warehouse and they’d pull down a pallet full of banker boxes and the operations manager would start sifting through paper if they had a surprise audit that could take that operations manager a half a day to a day to do that exercise of traceability.

And after implementing MES, it takes him about 30 seconds. The 30 seconds is half of that time is spent finding the serial number or the lot number of the ingredient that he is doing the traceability for. Once he knows that number, then the rest is four to five seconds and he’s got the full traceability audit. And when you think about medium-sized companies having less people, now he’s just got back hours or days of his time to focus on running the plant, not on appeasing the auditor. That’s where I think these things become really impactful is you’re making your people have more power over what they can spend their time on.

 

Grace Clark:
Fantastic. Is there anything that I haven’t asked you that you’d like to share?

 

Tod Virden | GrayMatter:
I don’t know if this is so much a question, but it’s probably just how do you get started? We’ve got a variety of ways that we can help folks get started in doing an assessment of: do you need MES or what does a roadmap look like for five years from where you are today to where you want to be helping with of value story workshop? Or we did one recently for a customer where it was actually a vision workshop. Why might they embark on a digital transformation before actually starting anything because they recognize that they needed alignment within their C-suite. So at GrayMatter, we try to really meet our clients where they are and understand that some people have already done all these assessment things and they just need a partner to go execute, and other people are just starting to think about it and need help or are being shepherded through the process. We’ve got a variety of team members that can help you get started no matter where you’re at that journey.

 

Grace Clark:
That’s awesome. Where could our audience reach out to you if they want to talk more after this episode?

 

Tod Virden | GrayMatter:
So we can be reached at GrayMatterSystems.com. That’s our website. There’s a couple different ways to reach out: there’s a chat bot you can chat with, or you can submit an inquiry there on the website to have somebody reach out and happy to get started, however makes sense.

 

Grace Clark:
Fantastic. Well, I really appreciate your time, and thank you for joining me today.

 

Tod Virden | GrayMatter:
Thank you.