Part of being a machine shop owner—and a business owner in general—is that every day there’s a new challenge to navigate. A machine might break down. Perhaps someone who has been a team member for decades quits. Your factory could burn to the ground. Or your Dad—the owner and manager of the shop—gets sick with cancer. That’s how Nick Sainati was thrust into becoming the GM of Belden Universal. In this episode, he shares his journey. It will resonate with some of us, fascinate most of us, and impress all of us. Don’t miss this inspiring family story!
Belden Universal is an AS9100 manufacturer of precision universal joints and drive shafts. They started in 1970 as Belden Tools, founded by Nick’s grandfather and his brothers on Belden Avenue in Chicago. They used to buy tools from ZENGERS, which was just down the street!
Instead of going into the family business, Nick ended up in San Francisco in investment banking. He spent two years at an eCommerce startup and eventually moved back to Chicago. After both he and his wife got an MBA, they moved to Seattle for her job. After running a wine business, Nick transitioned into Starbucks Corporate in brand management. He helped launch the Starbucks evening program that tied-in with wine. He transitioned to a strategy team after that. He learned about culture, managing people, and running complex projects.
Two months after Nick’s first daughter was born, his parents came to visit them in Seattle. They told Nick that his Dad had a rare form of Leukemia. He needed to take time off of work for treatment. They were going to have to sell the business unless Nick or his sister could come back and run it. Nick was shocked. His parents were healthy active people who were never sick.
After processing the news and discussing it with his wife, Nick decided to move back to Chicago to take over Belden Universal, an AS9100 manufacturer of precision universal joints and drive shafts. Four months later, he was in Chicago running a machine shop—and he knew nothing about manufacturing. Nick bought a large book about manufacturing that was for a college-level manufacturing class and dug into back episodes of Making Chips, which helped him get immersed in the language of machining.
When Nick took over in 2018, the machine shop had just moved into a new facility, doubling the size of their manufacturing floor. They had a tenured team and people to help get Nick up to speed. But he was also their boss—and couldn’t do most of their jobs.
Soon after taking over, Belden lost their biggest customer—which was one of the reasons they had moved into the bigger space. They immediately lost what would have been ¼ of their business. Nick knew it would be his first challenge. But then his sales manager of 19 years quit three months in. Instead of panicking, he took stock of the situation and helped define where they wanted to go in the future.
They hired an internal candidate for the sales management position. She blossomed as a leader and got their team back on track. They worked hand-in-hand on the culture so people were excited to come to work every day. In an era like today where every shop is competing for employees, the culture matters. A shop can’t survive with a negative culture. 18 months later, after continuous incidents with the production manager (who had been there 29 years), Nick decided it was time to part ways. They let him go. But this man had been involved in every part of the business.
The benefit of letting him go was that Nick was forced to get more involved in floor operations. He began to work closely with his engineers on improvement projects and personnel issues. He got to know the people on the factory floor. He stepped up and earned respect from his team.
How did Nick manage the machine shop through COVID? What does the future hold for Belden Universal? Listen to the whole episode to hear more of his unique story.
What did Nick learn? The most important thing is that problems can look very daunting in the moment—especially multi-faceted problems. But the most important thing is to take a break, formulate a plan, understand what the desired end outcome is, and start chipping away at it. Family businesses have long timelines where things don’t have to be solved overnight. They can make progress every day, month, and year towards that vision. Eventually they will find success. A problem now may seem like a bump in the road over the arc of your career.
— BAM!
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What is the Cybersecurity Maturity Model Certification (CMMC)? The DOD is implementing the CMMC to normalize and standardize cybersecurity preparedness across the Federal government’s defense industrial base. Meaning? If you’re doing DOD work, they’re mandating that you get this certification. So you need to know what this is all about. We’ve brought in Paul Van Metre and John Bilek to help fill in the blanks. Check it out!
Cybersecurity is a large problem. Most attacks originate from Russia but there’s also a lot of domestic hacking happening. Because of this—according to MXD—the DOD is now spending more than $300 billion each year on government contracts. The DOD Directive 8140 requires that any contractor must satisfy specific training and certification provisions to ensure sensitive data remains secure. The qualifications can be transferable and useful across the board.
Jason points out that this cybersecurity effort is how we protect our country, industry, economy, and more. Our enemies want to steal our technology, which is why we must keep it secure. Because manufacturing is a huge part of what the DOD does, anyone in their supply chain must follow the same cybersecurity protocols.
CMMC applies to anyone in the defense contract supply chain. That includes both contractors who engage directly with the DOD and subcontractors who fulfill and/or execute those contracts. The CMMC standards will affect over 300,000 organizations. If you want to continue to do work for the DOD, you will have to get certified over the next 4–5 years.
Paul has heard of shops that are starting to lose work because they aren’t on track to get the CMMC certification. John has been asked multiple times if he’s been certified. While you cannot get certified yet, he is working toward compliance. There are five different levels of CMMC compliance. Most machine shops are expected to be certified at level three.
How soon do you have to implement this? Paul points out that you can’t sit on this. There are very few approved auditors, so if you wait until the last minute you’ll lose out on a significant amount of your sales. If 30% of your business deals with the DOD, you could lose millions without the certification.
In May 2021, an entity was announced that would start handling the CMMC audits. What kind of costs will be put on machine shops? It’s going to be far more expensive to implement than an AS9100 audit. The CMMC is built on cybersecurity standards, the main one being the NIST 800-171 standard.
If a company is already compliant with that standard, they can likely check off the boxes for CMMC Level one. If you aren't compliant with this standard, to reach level one compliance could cost you between $5,000 to $25,000. For level three, it will be around $15,000 to $100,000, depending on the size of your shop. This is going to be a large financial hit no matter what you do. The certification is costly—but if you don’t get it, the loss of business may cost you more.
A shop in Florida was quoted $100,000 for a company to “help” them get CMMC certified. Be wary of who you look to for help—a lot of unscrupulous people will take advantage of this rollout. Find accredited and reputable consultants. There will be grant money offered to help companies get this certification.
What can help cover some of these costs? IMEC gave Carr Machine a grant to get ISO certified years ago, which covered some of the implementation and auditor fees. IMEC will be giving grants out to augment the cost of implementing this. Paul points out that the MEP gets its money from the Federal government and allocates it to different organizations like IMEC. The unknown? The amount of labor you may have to invest in to get to level three certification.
So what does CMMC compliant actually mean? How is ProShop ERP implementing updates to help you walk through the process? John and Paul share a few examples, so keep listening!
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In this episode of Making Chips, Jim and I chat with Paul Van Metre—the Co-Founder of ProShop ERP—about the process of selling his machine shop. We dissect the process, including how to understand the valuation of your company and how to make your shop more attractive to potential buyers. If you’re considering selling in the next few years, this episode is full of actionable tactics and strategies that will help you succeed.
BAM!
- Jason Zenger
I bought ZENGERS from my Dad in 2019, right before the pandemic hit. learned that there’s a lot involved in buying/selling a machine shop. Not only that, but it takes multiple years to get to the point to learn how to run a shop by yourself. Running any business that employs a team of people takes a lot of work.
A lot of people are looking to retire and sell their machine shops. The youngest people of the Baby Boomer generation will be 65 by 2030. And of the 18,000 machine shops in America, the majority are owned by Baby Boomers. The vast majority will have some type of transition of ownership in the next 10–15 years.
Jim is getting calls from M&A companies all the time about buying his shop. He isn’t even close to ready to sell. I’m on the buy side, and I think this is a great time to buy a machine shop. Whether you want to merge, participate in a roll-up, etc. now is the time. Even if you’re not ready for several years, you need to start planning.
Paul notes that owning a business is one of the most significant financial decisions anyone can make in their lifetime. These shops are the baby of their owners. They’ve poured 10, 20, 30, 40+ years into them. Leaving that behind and passing it on to the next generation is a difficult and taxing process. Some shops may close their doors and sell off their machinery.
A client of Paul’s, Mike, was deeply involved in the M&A and private equity space. He was trying to sell a shop where the owner wasn’t interested in making her business attractive for sale. They couldn’t sell the shop for years. So Mike decided to buy the shop himself. He knew it was a good business at the core and got it for a great deal. He also recently acquired another machine shop.
Paul worked with a small shop in Colorado—Focused on Machining—who was in banking before moving into manufacturing. He looked at 4–5 shops before landing on this one. Because he was in banking he understood the financial side and has done an incredible job growing the business.
Pro CNC was founded in 1997 when Paul was just 23—straight out of college. When they sold in 2014, they were a mature company with 17 years of experience under their belt (Paul shares his story in episode #98 of Making Chips).
In hindsight, Paul had been preparing the company for sale for many years. They started hiring people to replace the three partners so they weren’t working in the business every day. They then hired an M&A company to take them to market (the whole process took around a year).
Sadly, Paul points out that 80% of businesses that get listed for sale never sell. Many businesses end up selling off their assets. Those people are likely making only a fraction of what their company could be worth. So how do you set your business up for success? What can you do now to make it more attractive to future buyers? Listen to the whole episode to learn the process!
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In this week’s episode of MakingChips, hosts Jim Carr and Jason Zenger bring in Federico Sciammarella, the President & CTO of MxD, to discuss the basics of cybersecurity, including the types of cyber attacks, and how a manufacturing leader can equip their shop with a strategic plan to prevent and deal with potential cyber threats.
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In this week’s episode of MakingChips, hosts Jim Carr and Nick Goellner talk with Nick St.Cyr, a Product Manager at Methods Machine Tools, about his history in the manufacturing industry, the role of a product manager, and the importance of establishing a vision of the future for your company.
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In this episode of MakingChips, hosts Jim Carr and Jason Zenger meet with Paul Van Metre of ProShop ERP to discuss 10 things to consider when going through the process of getting AS9100 certified.
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In this episode of MakingChips, hosts Jim Carr and Jason Zenger talk with Peter Eelman, Vice President and Chief Experience Officer of AMT, about IMTS 2022, the return of their in-person trade show, and what’s in store for the future of IMTS events.
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0:08 | Jim talks about his time with the Amper Technologies pilot program for machine monitoring systems
1:27 | Jim and Jason introduce the episode and their past experiences with IMTS events
8:00 | Jason shares manufacturing news regarding Xometry’s move to the public market
10:16 | Jim introduces their guest Peter Eelman from AMT to discuss the history and return of IMTS
16:54 | Peter talks about the effect of the COVID-19 pandemic on IMTS, and how they were able to adapt to the situation
20:33 | Jim asks Peter about the future of IMTS, as both physical and virtual events
23:21 | Peter explains the scale of IMTS, and its effect on the industry and the Chicago area
26:57 | Peter describes what’s next for IMTS, with the return of the physical event in 2022
30:20 | Jim asks about the future of automation in manufacturing, and how IMTS 2022 will feature it
34:52 | Peter explains how IMTS participants can prepare for the 2022 event and connect with other manufacturers through their website
38:30 | Jim talks about the upcoming Fanuc & Mitutoyo demonstration from CNC Machine Services Inc, and how you can register for the free event
MakingChips hosts Jim Carr and Jason Zenger sit down with Akshat Thirani, the CEO and Co-founder of Amper Technologies, Inc., and Charles Morley, the President of Schleifring Medical Systems, to talk about how Charles implemented Amper technology in his shop, and the benefits it has had on his business.
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Hosts Nick Goellner, Jim Carr and Jason Zenger are joined by Mark Cunningham and Kim Akimoto from CLEAR Solutions Sales Consulting to discuss the differences between product and sales management at manufacturing companies, and how strategic sales tools can lead sales teams to success.
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In this episode of MakingChips, Jim Carr, Jason Zenger and Nick Goellner discuss Retirement: Yes, No or Never. This could be a step in evaluating your decision whether you are a manufacturing leader at the highlight of your career or at the beginning stages of your career with plans for greatness.
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In this episode of MakingChips, Jason, Jim and Nick discuss the R&D Tax Credit. This could be a huge saving for your manufacturing company, but please don’t take this episode as legal, accounting or any similar advice; you should contact a professional after you have listened to this episode.
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In episode of #267 MakingChips, host Jim Carr and Jason Zenger discuss Why You Need to Consider These New and Low-Cost Employee Benefits"
Connect with us: www.MakingChips.com/contact
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In episode #266 of MakingChips, host Jason Zenger and co-host Jim Carr Discuss 25 Trends Affecting the Future of Manufacturing in 2021 and Beyond.
Connect with us: www.MakingChips.com/contact
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In episode #265 of MakingChips, host Jim Carr, Nick Goellner and Jessica Peterson discuss How to Create a Diverse Community in the Workplace to Solve One of the Biggest Challenges in Manufacturing with Justin Sherman and Andrew Crowe with Equity Machine Works
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In this week’s episode of MakingChips, Jason Zenger discusses 4 reasons to say no to an opportunity. Manufacturing leaders may need to say no more often to opportunities especially as the economy heats back up.
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In this week’s episode of MakingChips, hosts Nick Goellner and Jason Zenger discuss 6 Communications Tools for the Manufacturing Leader.
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In this week’s episode of MakingChips, host Jason Zenger and Nick Goellner discuss tips for effectively communicating to your team in the workplace
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In this week's episode of MakingChips, hosts Nick Goellner and Jim Carr are joined by Eric Nekich, a Sales Manager at 5th Axis, to talk about workholding, and the changes in sales tactics through the years.
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3:30 | Jim and Nick play a manufacturing quiz game
10:30 | Nick introduces the episode guest Eric Nekich of 5th Axis
14:15 | Eric shares how he got involved in the manufacturing industry
16:00 | Eric talks about how 5th Axis grew from a contract manufacturer to a workholding brand
18:10 | Eric discusses how automation is growing in popularity in machine tool tending
22:00 | Jim talks about what his team likes about 5th Axis workholding
27:33 | Eric and Nick discuss how selling workholding has changed over time
37:14 | Eric explains the difference between the jaws on "dinosaur" vises and 5th Axis vises
40:44 | Eric talks about new modular automation components at 5th Axis
45:10 | Jim offers his final thoughts on the episode
47:09 | Jim and Jason explain the different technologies featured on IMTS Spark
In this week's episode the MakingChips hosts talk with metalworking influencer Tony Gunn and his career in the manufacturing industry.
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0:00 | Jim talks about how simple ProShop ERP made his virtual shop audit
4:25 | Nick shares manufacturing news about the rise of firearm sales
10:00 | Nick introduces the episode guest, Tony Gunn, the General Manager of MTDCNC Global
13:18 | Tony discusses how he got his start in the manufacturing industry
17:40 | Jim asks if the manufacturing industry is still seen as a "dirty" or "lower-class" industry
22:00 | Tony shares some of his thoughts on social media, marketing, and fellow manufacturing influencers
29:19 | Tony talks about his new position at MTD CNC Global
35:30 | Jason asks Tony about what problems he is trying to solve in the manufacturing industry
39:43 | Jim and Jason talk about the knowledge centers at IMTS Spark
In this episode of MakingChips the hosts discuss sections to include in their production meetings, and how they can benefit their shop and team's productivity.
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0:00 Jim shares how he can access real-time data and reports using ProShop ERP.
1:32 The hosts talks about the virtual grand opening of the Boring Bar
5:20 Jim introduces "social intimacy" and how it strengthens relationships
9:40 The hosts discuss what's happening in their businesses
12:30 Jim explains what he uses production meetings for and why they're important
15:49 Jim shares the different sections he includes in his production meetings and the benefits they provide to the team
19:08 Jim discusses how he added weekly COVID-19 updates to his production meetings in response to the pandemic
26:44 Jim creates a "hot list" to update his team on what's going on in the shop
29:50 Jim opens the floor at the end of meetings for Q&A and team discussion
34:18 Jim and Jason talk about the different showcases at IMTS Spark
In this episode, the MakingChips hosts discuss the career of NFL star Tom Brady, and how his personal keys to success are also applicable to the manufacturing leader.
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0:00 | Jim and Jason talk about the different technologies featured on IMTS Spark
7:24 | Jason reads a press release from DARPA about off-Earth manufacturing of lunar structures
12:45 | Jason shares his points on how manufacturing leaders can take cues from Tom Brady's success
13:13 | The hosts discuss how manufacturing leaders might be retiring too early
24:49 | Jim and Jason talk about IMTS Spark Demo Days with Stephen LaMarco from AMT
31:53 | Jason explains Tom Brady's daily schedule and how having a routine helps with success
37:10 | Like Tom Brady, having a healthy diet and lifestyle can contribute to the success of a manufacturing leader
39:30 | Having core objectives can get you on the path to succeeding, as opposed to unrelated pursuits
43:40 | The hosts offer final thoughts on how Tom Brady's successes can be contributed to his strict regimen and practices
In this week's MakingChips podcast, Jim and Jason discuss if you can be successful running a small machine shop, with Jim offering tips based on his own experiences.
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0:00 | Jim and Jason talk about the different knowledge centers at IMTS Spark
1:10 | Jim mentions how he used ProShop ERP to extract the necessary data to collect the federal R&D tax credit
5:06 | Jim shares information on the failure rates of new businesses
7:45 | Jason explains why he's planning on taking a sabbatical from work
13:00 | Jim reads a news articles about the manufacturing economy bouncing back in 2021, and the different factors that will affect it
20:08 | Jim and Jason talk with Dan from Xometry and Vinny from PenCo Precision to discuss their experience with Xometry during the 2020 pandemic
26:22 | Jim asks "what is success in business?"
31:27 | Jim shares his tips for running a successful small machine shop
39:30 | Jim and Jason talk about how they analyze risks before they make business decisions
In the newest MakingChips podcast, the hosts discuss how to use triggers to create new habits and systems for your business and your personal life.
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0:00 | Nick talks about how he sees ProShop ERP on shop floors across the USA.
4:01 | Jason shares an article about a how people purchase books to display and pretend to look intelligent
7:27 | Jim and Nick explain a times they made changes to remain transparent as leaders
9:23 | Jason describes how he attempted to start changing certain habits at his company by creating new triggers
14:19 | Jason talks about the system he adopted to discuss and track the changing triggers and habits with his team
16:43 | The hosts talk to Chuck Matthews at DP Technology Corp. about IMTS Spark.
24:13 | Jim asks Jason and Nick how they store and utilize the information they gather through reading materials
27:53 | Jason explains how he's used triggers to create habits in his personal life