John Grace

The Shifting Space of U.S. Manufacturing

Episode 5

Bill interviews John Grace, President of Ohio Tool Systems and Fawcett Co. After graduating from Purdue University and spending five years in corporate America, John joined the family business as the third generation leader. He describes himself as a business generalist in practice but a marketing nerd at heart, and brings a blend of perspectives to this week's episode.
 
Listen in for discussions of digital vs. traditional trade shows, the changing atmosphere of U.S. manufacturing, and the growing challenges of combining new innovation and technology with the necessary industry workforce.
 
Ohio Tool Systems is a leading independent distributor of DC electric tools for assembly, industrial tools, material handling products, quality assurance equipment, hydraulic & fluid power products, pumps, air motors, precision presses, industrial parts washers and more. Fawcett Co. produces mixing equipment from laboratory scale to 1000-gallon processing vessels.

Episode Transcript

Bill: Welcome to the Missing Half podcast, I'm Bill Woods, your host where we're discovering what's missing in manufacturing and B2B marketing. Today, I'm joined by John Grace, president of Ohio Tool. John, welcome and thank you for coming.

John: Thank you for setting this up and for allowing me to participate.

Bill: We appreciate it. John, you came from a background an educational background of business management at Purdue. And now you are a very young president here at your family's company. Could you talk to us a little bit about what you studied in college and then some of your professional experience that's brought you to where you are today? 

John: I might even go back further before that. Because it's a family business, I basically grew up around this. And, you know, I have other family members that weren’t as close to it maybe as me. Like, I remember coming in and running around the shop and learning about things and helping Grandpa in his woodshop and stuff like that. And so this and, you know, it is a manufacturing or at least we serve the manufacturing industry. So there's like a certain smell, right when you come in and and you hit the door and it's like, okay, yeah, I like I this is like in my blood right? My whole life. So, yeah, then school wise, I think I've always had an interest in like, I just tinkering and, and you know, creating things. I wanted to be an engineer. I went a different path, with business and marketing. But I uncovered in there this product management realm. o my first actually in college I worked on, you know, product development competitions and things like that and really enjoyed it right so you’re doing everything you do with the product all the way from from pricing and marketing and branding to the product itself, right? And that's all encompassed under marketing, which I think was great, maybe not the nuts and bolts of actually designing the thing. But what does it have to look like? What does it have to do? What's the value prop that it's, you know, delivering for the customer? I really dug into that and enjoyed that in college so that in my first job out of college or my first series of jobs out of college, I worked towards that product management role. The general manager of one of the businesses here that we operate gave a lot of notice that he was retiring, which was great, and that that product management role was a great sort of background for me to be able to come in and jump into that role and handle all those different functions. Right.

Bill: Excellent. So I was creepy and looked at your LinkedIn profile and saw that you went to Purdue and then you worked at Chain, which that's a huge company. I don't know how big they are, but thousands and thousands of employees and just a lot of red tape and different processes that you would have here. Maybe if you would compare that experience to whenever you came back here into the family business and took over Trans-mix and Fawcett. You know, I think fairly similar roles in product development, but difference in support and investment, but then also in red tape and just maybe compare and contrast those two situations.

John: Yeah, it's an interesting it's an interesting tradeoff, right? At the big company, there are a lot of processes and you have to figure out how to allocate resources. The great thing is they have a lot of resources, but you have to, you know, prove your case every step of the way. Why? Why you need the resources allocated in the way that you're saying you need them allocated to develop a project or launch a new initiative or whatever it is. And it's a I didn't mind the process, frankly, because you're also proving it to yourself, right? Like, it's not it's great to have an idea. Like every step of that process is going to help you learn, Is this real and something is worth doing, right? Can we do it? Is it worth doing? And so I value the prospect or the process in that regard. So then you come over to your own business and it’s like I can kind of do what I want like follow my gut and just do what I want to do. But that's on the one hand. On the other hand is, yeah, but you don't have all those resources, right? Engineering, you don't have a whole team dedicated to, you know, pricing variances. And so yeah, there's, there's pros and cons to each. But yeah, I mean I enjoy working in both atmospheres. Does that answer your question?

Bill: No, that's great. That's great. And I think when we look at the different career paths and different folks that we work with, it's just really interesting to see how everyone leverages different opportunities. And I think the opportunity you had to spend some time right out of college at a different company, something an opportunity I didn't have, I came right out of college, went right into the family business. I think there may have been some value to me being involved in other organizations working for a period of time. But right, you, you deal with what you're dealt with and you just make the best of it and work really hard at it. I do think when you look at the danger of the entrepreneurial opportunity of with Fawcett and Trans-mix is you don't have to go through all that red tape, which you can go faster and go leaner because you have to because you're more entrepreneurial. But then in some ways it you have a little bit wider opportunity for mistakes because there aren't those guards. You have a process to help you. So trade offs, I don't think there's a right or wrong. It's just deal with what you've got and make it work. One of the other roles you hold here is an Ohio Tool and the leadership of Ohio Tool. And when you look at that company, it is uniquely different to Fawcett and Trans-mix. Fawcett and Trans-mix you guys manufacture products and Ohio Tool, you're more of a distributor service. So can you maybe talk about those different roles and how you're juggling really two very unique businesses at the same time?

John: Yeah. So Ohio Tool Systems is the larger of the two companies Fawcett and then the Trans-mix product line that Fawcett makes is much smaller, but it's so and they're both small companies as well. But Fawcett is a manufacturer and it sort of controls its own destiny in that sense. We have some great customers and some very, you know, household name customers with Fawcett. With Ohio Tool you have household name large companies on both sides of us. So you have large very professional sophisticated manufacturers that we represent that have you know very well product lines and then you have very sophisticated companies that are making you know, they're, again, household products, appliances, automobiles, all sorts of stuff. And so you don't you don't control your own destiny as much in terms of the the vendors are constantly updating their product lines, coming out with new technologies. And that's all stuff that you have to keep up with. And that's training for the sales team, training for our inside team, our repair technicians, and have to work on this equipment, have to stay up to date. And so that's that's you know, it's it's a good problem to have you want you want to sell and support more and better products. And we even take efforts to find new manufacturing partners. You know, usually in ways where they don't conflict with existing ones. But we see the opportunity for our customer base because we're regional, what, hey, those customers could take advantage of these products who are who are some excellent manufacturers of those products that might be looking to fill gaps in their distribution. So there are there are things that we can do to to influence the overall at the company. But, you know, how did we get to where we are today? Some very excellent manufacturing partners we represent and then some very excellent customers that we are grateful for, of course, for the business that we dealt with them over the years. But yeah, they're they are very different. Like you said with Fawcett we have total autonomy and can go on different directions but Ohio Tool, but we have a narrower room to play in terms of those major companies on both sides of us.

Bill: Sure. So one of the things we like to talk about on the Missing Half podcst is we're trying to discover what's working, what's missing, what's what isn't working. And I think you guys had an interesting opportunity to have a really stark contrast with the Ohio Tool. So I think it was about two years ago in Covid that we helped your organization prepare for a digital tradeshow where we it was all online, it was facilitated by the organization. And then you’ve also had now I believe you’ve gone back to the traditional in person trade show with that same organization. Could you maybe compare and contrast those two trade shows and maybe like some of the outcomes or what do you think was missing? You know, was it truly the human element that was so important to a trade show and engaging that? Or is there is there something you discovered? Yeah, comparing those two that would be valuable and maybe other of our listeners and certainly I would love to learn about and know to discover. 

John: Yeah, I mean from, from my perspective and you know this is, it's it's a little bit of a unique show that we do here as in like I don't see it I don't see it going away. I think that that show in particular will always participate and I’ll be happy to participate in. So what I will say is like instead of saying is one, what's better about one or what's better about the other is just to jump straight to I think you take the best things from both and you combine them, right? Because we add some like digital assets videos and online surveys and quizzes and things that, you know, were part of what we did with you and that you take that which is great and you and you add that into the physical in person, right. So so you have the video playing in the background. We didn't do this, but I could imagine they wouldn't be hard to do. Here's an iPad. You know, go through this, you know, list of things and more a little bit more about that and submit, you know, asking this poll. And then we review that poll. And what comes out of that is we learned a lot about, you know, our customers think about us or the products or some ways to do things differently.

Bill: Tat's that's a great perspective because usually whenever I ask questions in this space and it's like the Covid years and that or how did we deal with trade shows and then looking at the non-Covid years and back to normal, whatever that means, I hear, it's just better to be back in person. But your perspective is that we could possibly make even in-person tradeshows more efficient. And a better experience for the exhibiting vendor and the buyer who's walking through the show floor by marrying the best of both worlds. That's a very interesting hypothesis and idea, and I like that, and I'm going, This is going to cause me to think like, which is and this is what I like to discover in this, because if I walk away and I'm like, Wow, I got to think about that because there's something there and something we can better serve you in the future and our other clients with an approach that's so you did a great job, John. You got me thinking, lightbulb firing here, so that’s good.

John: I mean, and we didn’t take a scientific approach and it's like, what's more, did we get more leads out of or anything like that? But like, yeah, I think it's been two trade shows now actually that we've had, you know, a computer set up, right. Or a television monitor. And so you get to talking to someone about a product and maybe you only have, you know, a few products to show off at the trade show. Maybe it's something that you can never show off at the trade show if you have a small booth and, you know, it's a big piece of machinery that you make or something. While you could have the TV monitor you could play a video, right? that's interesting. You bring that up. I'll show you this video, you know, it’s a short video, and you can walk them through or a QR code. Justin our marketing manager had, you know, QR code set up in the booth at different places to to tend to read through to a specific thing that had some additional content that we can, you know show off at the booth. 

Bill: Those are great perspectives. Whenever we look at just in general B2B or manufacturing working and you have both here you have manufacturing concerns and you have B2B service concerns in the two businesses. And so one of the things we like to talk about is, is there anything you've discovered recently that just went really, really well or changed your perspective on how you want to market and take your business and your sales team out there in the market to adjust your target markets?

John: Yeah, So I think we were talking about it a little earlier, but the one you just mentioned. So this is maybe a little bit down the funnel. Once you have an opportunity to get in front of a customer or start some dialog in some fashion. And yeah, we have in the last year and had a lot of success with prospecting and getting business going with the customers. And I have a lot of respect for the sales rep that did this example. Because he, he didn't focus on product, right? He took a big step back and focused on the application and the theory of fastening before ever going anywhere into you know, specific products and it you know it was partially for the the benefit the customer's benefit. Right but also for his benefit to learn about the customer and, you know, find out where they are in their level of sophistication, understanding of kind of going back to what I said earlier, you got this very sophisticated product, but if it's it could be overkill, right? For what you need. Maybe, maybe not eventually, right. Maybe eventually you do have the applications that could take advantage of that high technology. But you have to find, you know, that where you are at this point in time to get you in that direction. So, yeah. So when it comes to like marketing and branding around that, yeah, we don't look at our company is like just a catalog of products, right? It's the, the knowledge that goes that's behind those and that goes into recommending products and solving customers' application problems.

Bill: Sure. And when you look at Ohio where you guys are located, this is home base, right? But you guys are in number of states, Ohio, Pennsylvania, Michigan, Indiana, all.

John: Basically Ohio and the surrounding states. Yeah.

Bill: A big footprint. When you look at the resurgence of U.S. manufacturing over the last several years. And certainly the concern after Covid of and I think they call it fragility testing or supply chain fragility and those type of things. And people looked at moving more of their manufacturing back onto U.S. soil. Are you excited about what's happening in your territory as far as U.S. manufacturing and B2B service? Do you see a lot of potential and growth coming in the next three, five, seven years?

John: Yeah, I think I think the U.S. manufacturing in general went through like these like huge shifts, you know, in the last few decades or starting a few decades ago. Right. That have continued. And I think it's definitely slowed down and started to come back in this direction, you know, quality and lead times and the flexibility to change things and do the things that, you know, creates challenge even offshore. I'm not an expert on this topic, Like I think about cost, you know, like, yeah, we we in the U.S. offshored stuff and got maybe some immediate cost benefit, but maybe it's not what once was. And maybe now it's outweighed by the quality or the speed of innovation and things you can do if you have more onshore stuff. I mean, the domestic consumer market is very strong. And so, yeah, most of our long-term customers are are doing very well and have their own growth and expansion plans are investing in new production tooling, you know, with Fawcett paint and chemical companies continue that high investment. And you know with Covid some kind of unique things that cropped up like this home improvement, you know, like wave, right, or people are stocking up Lowe's and Home Depot to get all their supplies to remodel their house because they had all this time at home and so, yeah. So with Fawcett, you know selling to the paint industry I think definitely saw a bit of that. We follow the news closely like third generation company, right? So Grandpa Jack is reading the newspaper and, you know, giving me newspaper clippings about this. This company’s opening plan and this company’s opening plan. Well, that's great info. You know, so we follow that and yeah, I think there's positive stuff on the news all the time.

Bill: Great. Now, I think we're certainly immersed in the Rust Belt. I grew up in the Rust Belt. You said you're walking into a building and smelling and it feeling it was home. I remember as a kid going into some heavy equipment, manufacturing and repair facilities, smelling that grinding oil, smelling the fumes from welding and sandblasting, all those different things. And that was home to me as I grew up. And I certainly think that there's a tremendous amount of growth that's going to occur here in U.S. manufacturing and support services in the B2B sector here over the next 5 to 10 years. And then at some point in time, the next generation has to figure that out after that. But I think certainly the near term future is really bright.

John: And not to paint like a dire picture about labor and like, you know, Covid, obviously people did this work-from-home thing and I think that stuck in a lot of places. But when you look at the manufacturing sector, it's been very difficult through Covid and even since to to keep to find and to keep the talent that you need to operate these, you know, production factories basically. And so there is this like movement towards more sophistication in machinery and tooling. And I say not to paint a dire picture about labor. It's not it's not so much that there's fewer laborers. It's this idea that because there's so much turnover and in some cases like very steep learning curves to doing things and and doing that at a high quality output model. That you need products that can assure the quality of things they're doing. So to me, that's that's a key part of the trend is it like it's products that are helping operators and workers do the best job that they can do without having to have 20 years of experience doing the thing. Welding. We don't sell welding equipment, but they have now virtual realities while they train. So instead of having to fire up the high voltage, you know, system and have your, you know, the fumes and the sparks and the, you know, using up consumable, everything's consumable, right? The metal that you're welding, the stick that you’re using to weld. And so that it's all computerized. I'm not sure how closely it mimics actual welding but still like a great way to train and learn that's going to, you know, help this next generation of welders like get off to that much better of a start.

Bill: Yeah, I think that's a good point. We have to figure out as a society here in the U.S. how we marry technology, innovation, automation and the workforce together because it's symbiotic. We all need each other, right? And that's going to be part of our future. We do hear from a lot of our clients a challenge in recruiting, whether it's and it's it's the whole way from industrial sales, the whole way through the system to the folks running trucks to those who are stamping the you know, whatever welding, cutting every step in the value chain, in manufacturing has struggled. And I think that's those are one of the challenges we're all going to have to tackle here in 2024. And, you know, the second half of this decade. So. Well, John, thank you so much for taking time to talk with us today. We really enjoyed this conversation and appreciate your insights and good luck on the coming year.

John: Definitely, I appreciate it. 
Bill: Thank you.

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