Join Bill as he talks with Pete Huggins, President of ITEN Industries on the incredible journey of this family-owned business celebrating 100 years of innovation in manufacturing. Learn about ITEN's evolution, the significance of vertical integration, and how they are preparing for the future with advanced technology, shifting approaches to sales and marketing, and a commitment to quality.
Bill: Thank you for joining the Missing Half podcast, where we're discovering what's missing in manufacturing and B2B marketing. Today, my guest is Pete Huggins, the president of ITEN Industries. Pete, thank you for joining us today.
Pete: My pleasure. Thanks for the opportunity.
Bill: Absolutely. So we've been trying to set this up for a while. I've been really anticipating this time together. Let's start, maybe at the beginning of ITEN Industries. and I'm going to congratulate you guys on 100 years.
Pete: Thank you.
Bill: So, maybe tell us a little bit about that. I know your family has been the steward now of ITEN Industries for three generations and many, many years. And, I've had, relationship with the business and your family throughout its history, but maybe just talk from a really, broad perspective about the history of ITEN.
Pete: Okay, great. Charlie Iten was the founder of Iten Fiber, which was in 1923. Charlie was an immigrant from Switzerland, came to the United States, worked in, leather factory in Massachusetts. Made his way to Spaulding Fibre Company in Tonawanda, New York, and left Tonawanda, went to Cleveland in 1923 and started Iten Fiber, which was basically a fabricator of vulcanized fiber. Vulcanized fiber was the plastic at that time. Bakelite hadn't come around. And vulcanized fiber is a variation on the cellulose. Cotton cellulose is the same type material as flax, turned into parchment paper, but they turned cotton into vulcanized fiber, as opposed to flax being turned into, parchment paper, which goes back to the Egyptians. That was sulfuric acid and flax reacted. Vulcanized fiber is, zinc chloride acid reacted with cellulose fiber. Too much in the weeds. We'll get out of the weeds. Charlie left Cleveland in 1926, came to Ashtabula and bought out what used to be the Pierce Tire and Rubber Company, which became the Ashtabula Tire and Rubber Company as a result of 5000 miles to a tire in those days for cars. And then, moved, the fabricating operation a couple of years later, set up a manufacturing, material manufacturing from a standpoint of vulcanized fiber down in Plant One, which is down the street from where we are currently. And then, sold to the new burgeoning, electrical industry. Lots of stuff in the Cleveland area, Akron, Canton, lots of things going on. And Dad went to work for Charlie in ‘47 after World War II. Charlie passed away in 1957. Dad bought the company from his, Charlie's estate. And we really don't do anything now that we did then other than fabricate parts. We used to make vulcanized fiber. We were one of seven fiber manufacturers in the country. At this point, there are no vulcanized fiber manufacturers in the country. The last one to, get out of it was NVF. And then prior to that, Spaulding Fibre Company. Synthane Taylor and ITEN, I think is the total of them. We started making high pressure laminates when Dad was working for Charlie, which was would have been, early, early to mid 50s. And, we started doing injection molding back in, early 60s. We started making polyester, fiberglass, Nema grade polyester sheets, probably in the late 60s. We've been fabricating parts between punched parts, machine parts and injection molded for, well, since, since 1923. Basically. Sorry, not injection molding. Didn't come along til much later. We do protrusion, which is a continuous form of, polyester. Ladder rails, all the ladder rails you see on all the utility vehicles. Those are basically a form of filtration was pulled from protrusions or thermoset resins, protruded through a heated tool, as opposed to extrusions which are thermoplastic. They soften, was heat extruded, as in pushed through a tool where they're cooled. So vinyls and styrenes and polypropylene and all those things are basically extrusions. Thermoset epoxies, phenolics, melamine, silicones, some are capable of doing protrusions. Those things that are not condensation reactions, conversation reactions don't work well in protrusions. I've got too many ums in the process here. Sorry. No, you're doing well.
Bill: All right. So when you think about, you have that 60s and 70s your dad took over, when did you come to the business and like. Did you start here as a young person after you went and studied engineering? How what was your journey to get here?
Pete: My first job was picking up bricks. At 13 or 14. We'd had a, old boiler system. We tore down the stack and the boilers and all the bricks were there. And so I put a patio in for my folks, and I carried out a bricks one summer, but basically I started on whatever simple jobs around here someplace between 14 and 15 and worked through most of all the processes and departments that we had at the time. Went to Ohio University, majored in industrial technology, spent a little time with Uncle Sam, and, basically, I've been here most of my life.
Bill: Great. And certainly congratulations. We have actually a couple of clients who have made it to 100 years and a couple who are knocking on the door. So I don't know what that says about us, but I know certainly what it says about you and those other organizations that you've, reinvented yourselves. You have, been through the ups and the downs because there's no way that in 100 years there weren't peaks and valleys. And, my family's been in business since 1991, so we're on that, new trajectory, and hopefully we'll see that, continue, up into 100 years with generations. But, congratulations on that.
Pete: Thank you.
Bill: One of the themes here at ITEN Industries is Imagineering with Plastics. And I certainly think you guys, and as you've gone through some of the history, you've had to reimagine the business many times. And whether it's, with technological innovation, people, investment, raw material changes, and certainly there seems to be a renaissance here recently at ITEN. With everywhere I look, I see new machinery, I see new investments. Whether it's 3D printing, whether it's, punched parts machines. I took a tour earlier today, and at around every corner, it seemed like there was a new, upgraded machine. So maybe. Can you talk about how ITEN is preparing? Maybe can you talk about how ITEN is preparing for the next 100 years?
Pete: We're doing our best to stay ahead of the crowd, I guess. You're right. We have changed many times. Lots of product lines have come and gone. The fiber industry, basically seven manufacturers, high pressure laminate participants who used to be 15 of them, as in General Electric, all the way on down. At this point, there are no fiber manufacturers in the U.S. at this point there's only two, maybe three, two and a half, whatever. High pressure laminate manufacturers, we being one and Norplex being the other one difference between us and Norplex is we also we're a vertically integrated parts maker basically on the same basis we sell laminates to laminates and these days pre-break, which is the first step in the making of making a laminate. To lots of people, we would rather do the whole soup to nuts, if you want to call it that because we get to be in control of the whole thing. We either solve our own problems or we don't have anybody to blame the problems on. It allows us to Imagineer, as we call it. Different solutions combine things differently than other people would produce products that combination of poltruded and an over molded product that we did for a betting application many years ago was wonderful. That whole process, as far as combining and doing new things, is the most interesting or the fun part. Part of the reason I guess we do that is, is because you have less competition, being able to solve problems that other people can't do. And one of the things that we actually I enjoy the most is we can't find anybody to do this for us. It gives us an opportunity to really develop a great solution, save money in the long run for the customer and what they want to do, and provide something that gives us a unique opportunity to solve a problem for them, which gives them a unique opportunity to make a better, better product for their end customer and build a better relationship. So we get to look forward to the next opportunity.
Bill: Great. So, one of the unique advantages that we've observed, at ITEN Industries is your vertical integration. Specifically, when we talk about the, the laminates as a raw material, then your ability to engineer a solution, your ability to have the in-house tool and die to make the tool, and then the ability to whether it's small lots or very large volume, lots of punched parts to really be able to execute at a level that competitors and other participants in the market can’t because they don't have vertical integration, basically from raw material and idea or problem the whole way through to consistent quality of produced parts. Can you maybe talk about that vertical integration and how you see that setting ITEN apart in the industry?
Pete: Great question. The advantage, I guess, of being old and hanging around and seeing all these things and participating in each step and having interrelated departments, if we were purchasing laminates for an application, the laminate manufacturer wouldn't understand the punching situation, or if they did, it would be cursory, not enough to be an advantage to the, I guess the specific application. One of the specific applications is we supplied all the, fluorescent light bulb insulators to GE, Osram and Philips as in, we would ship in excess of 300 million pieces a month, which isn’t a real feat. The real feat was is that we supplied them to a PPM level of less than 100 parts, defects per million. And when you're punching parts out of strips, you have defects as the beginning and the end of every strip, you have opportunities for missed feeds as a result of all the little things that happen along the way. And to get 100 parts per million defect means that that much time that we screw up in a day's time of production, we've exceeded 100 million pieces. It's not possible to not screw up at least that much time during the day. But if you can identify and understand when you're screwed up, you can separate the parts. It's not possible, cost effective may be a better word. It's not cost-effective to make parts and then realize that you need to go through and sort those parts, especially when for sake of at that time, they were $0.98 a thousand, which meant we had to go through treater layup, laminating, pressing, trimming and the sheet manufacturing. And we had a process where we checked the sheet thickness to confirm that we were in thickness, correct thickness on the sheet, and then transfer it to the fabricating department, Plant Two here, and saw the strips, punch the parts, and if you added any more cost to that, you couldn't afford to do anything. So in a punching operation, we got to the point where we were able to understand when we were going to make a bad part, and we were able to then separate the bad part in midstream in production from the rest of the parts. So at the end of the day, we could keep track of knowing how many mis-hits, mis-feeds, whatever you want to call them that we had and convert that to if it was a five weight tool or a ten weight tool or whatever, convert those number of hits to the number of bad parts that should have been produced based on that. Check those bad parts at the end of the shift compared to the number of that we should have had, and say this is how many? And here's here's 90% of those parts. So at the end of that, we could calculate what our assumed ppm level was going to be, knowing that everything else that was produced was a good part. So we designed tools that allowed us to eliminate pieces at the beginning and the ends, the strips that would be half pieces. And we then designed tools and systems that allowed us to identify that we were getting a mis-feed, as in, the progression wasn't going to allow you to get the material to the right place. So the second stage of the die was going to end up making a half piece or something of that nature. And then on top of that, we solved the thickness problems. As far not solved, but we control the thickness and make them laminate. Nema allows you basically plus or -10% of the thickness. Not too difficult to hold, except that if you're treating the resin content in the wrong approach, you can take up that full 10%. Well, the tolerance that was allowed to us for those high volume light lighting insulators basically was about half a Nema. So we would treat to a treated weight to assure that we had no variation between resin content and paper content. Wasn't a big issue. It was treated weight. The treated weight would allow us to lay up a sheet within a given weight limit and hitting that given weight limit dead center in it. Because we made adjustments in the treating process. So we came up with sheets that were basically less than half of Nema thickness tolerance variation from sheet to sheet and less than that was in a given sheet. So we basically had no issues in the process of controlling thickness tolerances for those allowing the fact also that when you punch the parts, you're going to get about a thousand to lift up on the punching process. And then it then to confirm that we checked each and every sheet with what we called a sheet checker to confirm that there wasn't one extra ply or one to few plies in it, so that we basically had two issues. And all those 30 years of making parts where we shipped parts to customer that were out of sheets, out of tolerance on sheet thickness. So so our approach has always been there's it's easier to eliminate the process of making a bad part than it is to not try to find it afterwards. So we do everything we can in the tool design, in the tool construction, so that basically we've done everything that can possibly be done to make the job as easy for the operator to make good parts with the idea that they have an issue, they stop it, we fix the problem and go on from there, as opposed to thinking we can sort quality into the parts after the fact.
Bill: Well and it certainly seems that that that culture you built of problem solving and quality is evident in that process. Because if we start with one, we understand the customer's issue and needs. Right? So we've identified that. Then we make sure we engineer a solution. We build a tool that is going to do the job, the right way, and then controlling the raw material, the sheet that comes in, you're just removing variables, because if you had Nema grade sheets from a supplier, come in and hit those tools that it was at 10%. I don't know what your rejection rate would have been, but it would have been consistently inconsistent and high.
Pete: Right. The problem with buying standard Nema sheets from somebody else is they're only interested in getting it made to the Nema spec and processing it. Same thing we would be doing if that's all we were doing. But in our process we have the next step in the operation that we take, the approach that might cost us a little more time in the first step to be whatever, efficient, not efficient, but to make the quality better so that in the next step we save more time. So overall, between the departments, if we had just, you know, if we didn't have the departments working together or hopefully a reward system that causes people to want to work with their customer, as in or their supplier, no different than the relationship that we try to build with our customers and our suppliers. How can we make it easier for you? How can we do something to help you? And then that way we both win. So we take that same approach internally with the idea that lay up may end up having to do a little bit more precise or take a little longer in the process. But when you give it over here to Plant Two for fabricating, all of a sudden this fabrication process where you have to worry about some thickness variable goes away.
Bill: Sure.
Pete: So we apply that to basically everything that we do.
Bill: The other thing I've seen ITEN make a commitment to, is investing in more technology to accelerate the tool building process. And maybe talk about that because certainly whenever you have a client who comes in with a problem and you guys engineer a solution, and then you need to build that prototype tool and that the can then scale to production historically, and for a lot of people, that could take four, six, eight weeks to build that tool. We've heard that we're getting that tool-building time cut down to about two weeks or less in some cases. Maybe talk about maybe talk about that investment in making sure that as part of punched parts you can deliver that custom tooling more quickly so that if a client calls you with the problem, this isn't a 4 to 6 month journey. We can maybe cut this down to maybe 30 days in the best cases, maybe 45, which is significant, right? When we're talking about manufacturing, when we're talking about components, that's like clicking on the Amazon buy it now button and it shows up tomorrow. That would be an equivalent. So maybe talk a little bit about that investment in the tooling department and bringing those tools more rapidly to your customer so you can produce those punched parts.
Pete: Great. Well, let's go back in history, I guess, back in the 60s, when I started working one of the summers in the tool room to make a conventional end fiber die; at that time it was probably 240 to 300 hours worth of the tool maker's time. That was with the tools that were available, as in conventional standard old fashioned machining prior to EDM electrical discharge machining. So we made an end fiber tool, which basically is a like a wagon wheel with a bunch of spokes sticking out of it that gets stuck on the end of an armature in a fractional horsepower or large motor, but on a fractional horsepower motor and the windings go around it. And the end fiber basically protects the varnish on the copper wire from being split or cut in the winding up against the steel laminate. So we'd spend 250 to 300 hours making a single end fiber, which was basically an OD with an ID, except that they were prongs. Technology wasn't available to do anything different than an electrical discharge, or RAM, EDMing as it would be referred to now, came along. We were one of the first people in between, well, probably the first between Cleveland and Erie, but we were well ahead of our time as far as conventional EDM. So you would basically machine an electrode, then burn those shapes out of the electrode, as opposed to trying to mill a square corner with a round end mill. Can't do that. Which brought the time to produce a conventional end fiber from 250 hours down to maybe 120 to 150 hours by that change, and eliminating the old conventional way. And then after that, we, then that was probably in the 60s also that we purchased the first EDM electrical electrode EDM machine, and then probably in the mid 70s, I think we also were the first people in a couple hundred miles radius to buy a wire machine. A wire machine is like a jigsaw that instead of having a jigsaw blade going up and down, you got a little brass wire that's fed through and the brass wire becomes the conductor. You put a charge to that, and the brass wire is is eliminated, as in chewed up in the process of sparking out, taking the electrical current and sparking away the steel which eliminated the need to make an electrode. And it took that 120 to 150 hours, down to about 60 to 70 hours, because you had a program that you wrote as opposed to having to do those other components, no real machining other than you had to heat treat the tool, you had to heat treat the tool or the steel before you had to cut it, which eliminated the issues of grinding and secondary operations and all that sort of stuff. And at this point, we now basically take a hardened piece of steel, poke a hole in it, write a program in the wire, runs around the wire, clips itself off when it has to go from one hole to another hole. We just in the last week got a new state of the art wire EDM that took our older wires, which we’re now on our one, two, we're on our fourth generation of wire EDMs here, and we've gone from three and four inches a minute to seven inches a minute to this one is 14, not a minute. Excuse me, an hour. We're now at 14 inches an hour. And that tool that went from 250, give or take hours, down to 120 hours, down to 70 hours is probably, at this point a single tool like that we could do and make parts start making parts in probably, 30 or 40 hours. From from here's the purchased order to here's the tool ready to go in the press. When punching is slipped away a little bit compared to what it used to be, punching was kind of the pre-molding operations. And molding eliminated some of the punched parts because there wasn't any other way to do it and combine parts, but there's still a fair number of punched parts that exist. But in our heyday, as in when we had two wires going, we probably produced two dies every 2 or 3 weeks. We can produce them a lot faster now, but we aren't getting as much punch opportunities or mold. More molded opportunities are coming in the taking place of some of the punched parts stuff.
Bill: Got it. But I think the key there is for the available market that's out there, you guys can rapidly find a solution through your engineering. You can rapidly build the tool and scale production right away. So there's, I'm sure that a buyer in that market, their concern is okay if I change suppliers, it's going to take a lot of time, a lot of investment, or if there's a new opportunity, how are we going to get this done? Well, the answer is quickly and accurately and into a high quality production situation that we can consistently count on for our, our business. So, so, one of the other things I wanted to talk to you about, Pete, was when we think about the punched parts initiative specifically, and we think about quality, because any buyer in the market is going to be, you know, great. We can we can help you with your problem. We can engineer a solution, we can build the right tool quickly, cost effectively, and we can start to run that test batch and then scale production. Great. Quality is on everybody's mind. Right. And well two things quality and then timeliness. And I know that in talking to a number of team members today and touring the plant, you could sense that everybody is committed to quality and everybody is committed to timeliness. So maybe talk about that culture here at ITEN of quality and timeliness.
Pete: It doesn't do any good to make a bad part and have to make it over again. If you don't have time to do right the first time. So, our approach has been forever to optimize the process as far as our ability to make a good part. Don't take shortcuts on tooling. Don't expect the operator to be responsible for quality, the tooling and the process and the setup needs to be right. And if it isn't, the operator needs to say this isn't it, and get ahold of the set up guy and make the problem go away. On the same basis, we build tools internally because we know we're going to run them as opposed to buying tools outside, which at that point, if it comes to us, doesn't work, goes back to the tool house. They get paid a second time. Or to fix it or have the other issues and and anything that we don't do right, it comes out of our pocket. We have to fix it one way or another. It either slows down production, it adds costs because we didn't make it and we got to look for the quality issues. The customer gets upset because we sent them bad parts which we hardly ever, ever do. And when we make a mistake, which we do, but when we make a mistake, it's not a dimensional situation. It's not a quality as in what I refer to quality. Well you missed it by a half a thousandth or you missed it by two thousandths, it’s oh, we shipped the wrong part. I mean, it's a gross error that you don't really need to have a quality system to take care of, and the more again, my objective, it doesn't work all the time, but my objective is the more quality we can build into the tool, the more safe we can make the production process, the less quality time we have to put it in in a way of QC that adds value, but only for preventing making bad parts. If you're not making bad parts to start with in the quality exercise, which again is necessary, we have statistical process control that we do in in part or in process checking on to assure that as the tool as wearing as the die edges start going off that we check. And again, we didn't make 300 million pieces a month and hold half thousands tolerances, basically on ID holes and thicknesses and all that stuff by not having control over our processes. So we took the same things that we learned there, and we've applied them to all the other stuff so that it gets us return, it gets us benefits.
Bill: No that's great. And I think that's something where, obviously, and this is something I want to get into in a minute. I mean, you guys are investing in a lot of new machinery, a lot of new equipment everywhere I toured today, there was something new around every corner, which was awesome to see. But we can have new machines, we can have new ideas, we can have new thoughts. But if we're not basing those on the lessons we've learned for a long time, and I see a lot of companies, that we have access to or that we're, talked to that don't have that legacy or that institutional memory. And they struggle because they're going to make a lot of the same mistakes that you guys made decades ago. And you guys can hopefully skip those ones and make new ones. Right? That's the that's the journey. But I think when when you hear about companies that have done something at that high volume consistently over time, there's a an institutional memory, there's learning from that, and there's a culture that comes and becomes part of that company to do quality work consistently over time. And certainly being in your 103rd year, you guys have had consistency because, that's a long time. So, Pete, as we've talked around today and looked in, a number of the buildings, it seemed like everywhere I turned there was a fresh coat of paint. There was a new machine. So with with any company that's 100 years old, you have stuff from the past, right? Every company does. But there was a fresh coat of paint on equipment in new areas. And when I say that I'm talking about newer machinery investment that ITEN has made what are you, and your leadership team doing to prepare ITEN for the next hundred years?
Pete: Trying to keep up with technology, trying to make sure that we, have the ability to produce quality parts that gets the customer. And fortunately, or unfortunately, we don't have customers having issues with this, so they never come out to visit. So we don't get the opportunity, I guess, to show them what we're capable of doing. And more often, not more often. Always. The expression is, is when a customer comes to visit. Oh, I didn't know you did that. I didn't know you. Oh, you do that also. And yeah, we can help with a whole bunch of things. A bunch of things that we if you had reason to come and visit more often. But if you don’t have quality issues, nobody comes and gives you a hard time. So it's, you’re, you're caught in a good place, I guess that goes, but yeah, we've spent a lot of money on molding equipment, new wiring. We got a new saw that is supposed to been here already from Germany. We're still waiting. We added three new, mills just within the last, six months, I guess. Something like that. We have some new, business that's going to require us to increase, in the pultrusion department, add another piece of equipment that we will build in-house. We built three of the last four machines in-house. We have some more opportunities along those lines. Machining. There's got reason to get another mill with the added business. We got our CNC punch press. We, were fortunate to find one that was rebuilt about a year ago that we couldn't afford not to bring in and have additional capacity and back up for what we've got going. So it's been a nice situation lately.
Bill: You also have we're sitting here in the 3D printing room. Yeah. Right by this behemoth I so for Christmas I bought one of my sons a little 3D printer. And I told him today I was going to go see one that's almost as big as our car. So I have to take a snapshot of that with my phone and send it to him later. But he was all excited to hear about that. But no you guys are certainly investing in the next 100 years and really, accelerating the, your Imagineering and your innovation. And that's exciting to hear. As we've talked to people, throughout the facility, you can sense the excitement, you can sense that they, are believing in the momentum you're creating. So, I just want to congratulate you guys on, like, doing those things and making those next moves. And, also, you know, I think so we're from a local county in Indiana that's kind of out of the way, right outside of Pittsburgh. You guys are outside of Cleveland here. Ashtabula is not the, heart of anything. So I'm sure that this.
Pete: Wine country, you know.
Bill: Wine country. There you go. But I, some of the folks that we talked to this morning were really appreciative of the commitment to Ashtabula County and the local economy and making sure there were good manufacturing jobs that stayed here in the local market. So that that's also a great thing that you and your family have done. I think that you should be commended for.
Pete: Thank you. We do our best. We keep trying. We got a lot of people here that have got 30 years plus of, of, tenure and some old timers that have retired, retired in the last couple of years, and we probably lost 150, 200 years of experience in that process. But it is what it is.
Bill: That's right. Yeah. Time times keep rolling on. And we have to, roll with the times. One of the, themes of ITEN is and kind of the a catch phrase, if you have it, is providing components for life's challenges. And I think, one of the things I've appreciated in looking at a lot of the specifically the punched parts and some of the other manufacturing processes you have on the property is that you your team doesn't really make something that someone would recognize at a store or at a facility. You're making components that are added to, assembled on to, or combined with other things to make, make everybody's lives easier. Right? Which is where this tagline of providing components for life's challenges. When you think about the industries you guys service, so you certainly do a lot of work in the electrical installation and not consumer, installation per se, but in the, fractional horsepower motors in, switch boxes in, a lot of the components that kind of, help these new digital centers and all of the power and energy that go into those, railroads, electric road, rail assemblies, health care products and a lot of the electrical installation and products there as well as in many, many other areas. One of the things that I think we need to recognize as a society today is that there are jobs and companies that are providing support for a great life we live here in the United States, and certainly ITEN is doing its part to provide those components and you never get the press, like, because the shiny car doesn't come off the line. We don't have that big aha moment. So I sensed a pride amongst the team today of talking about that. Maybe if you could add a little bit, about 100 years at ITEN and providing those components and being willing to do maybe that unheralded that unseen and unrecognized work. But it's so important to our lives today.
Pete: Right, yeah, no, we do a lot of stuff that gets hidden and we contribute to a lot of different whatever, pieces of equipment or appliances or whatever. Back in the ancient days, we were the world's largest manufacturer of vacuum cleaner crevice tools. Before the advent of injection molding and flashlight barrels, we supplied flashlight barrels, basically wound tubes that we knurled and painted and sold to the people making flashlights in the country. All of them. Then the vacuum cleaners manufacturers the same situation and molding came along, and Charlie didn't want to get into injection molding at that point, and Dad tried to convince him we ought to. We ended up losing all that business. Had we been able to get an injection molding machine at that time, be kind of in the first dose, that business would have all stayed with us. Back to reinventing yourself, as you mentioned earlier. But we have lots of opportunities to participate with lots of stuff as the world has changed and those things that used to be made in this country, as in blenders and vacuum cleaners and everything that associated with that, went to China. We lost the business as a result of not, by default basically, wasn't anything we could do about it. At this point, they bring over a finished vacuum cleaner with the motors in it made in China or Japan or wherever it happened to be at that time. And we lost the ability to sell the fractional horsepower motors. And things changed, as in the auto industry used to be all electromechanical devices as opposed to printed circuits, circuit boards, which then became integrated circuits. And so that whole technology change has happened along the way. But all the auto repair companies in the, in the country were buying parts for us for all those electrical, mechanical devices. So that's all switched, changed. But at some point along the line, I guarantee everybody in the United States comes in contact with a something that has an ITEN part in it somewhere and other someplace along the line. Again, things are changing. We're kind of into moved into bigger parts because the, because the appliance industry has left as such. But the circuit breakers you were talking about for the big power distribution facilities, that's become a very nice addition to our ability. We do some pultrusion of some pretty sophisticated parts and then do a fair amount of machining to them afterwards. And they are being with the electrification of the country more so than what it has been, business is up as a result of all that. And we we can do a wonderful job as far as never had any quality issues with any of those parts. They’ve been in service for 25 years now. I guess as a new generation, and we just added some more capacity to end up basically doubling the sales on those things. So as as the times change, we end up trying to stay tuned to the market. And if a customer asks us to, help with some new project where we realize you need to you need to stay current or you're going to not exist.
Bill: Absolutely. Well and I think you know any company that's lasted as long as yours has, 103 years, you have to reimagine yourself. And markets change, times change. And, you guys have done a great job, of, of changing those things. So one of the reasons why we're working with you and your team is we're also having to reimagine the marketing and sales function. So, you know, maybe we can talk about that a little bit. Your prior go to market strategy was largely through sales team. Didn't lean heavily on marketing. And we're starting to see that change because of, you know, the younger buyer. COVID certainly impacted that with travel. The polish the doorknob, the send the old school sales team out and that relationship that is transitioning to more online information, content, people seeking answers online before they ever contact a company or a sales team, and also the cost differential of launching a huge sales force to canvas is significantly higher and not as scalable as digital marketing and having those outreach tools. So maybe let's talk a little bit about, you know, what you felt was missing in your marketing and why we're kind of going on this journey of developing a, more modern approach to B2B marketing and sales, to help you introduce these new opportunities and grow them in the market.
Pete: Right. Well, I keep saying, but back in the old days, things were different. Things changed. The technology wasn't available. Thomas Register was the way that people found people at that point, or found companies at that point, or by word of mouth as a result of somebody being associated moving, whether within an in, within, in an industry or a company or something else and taking their experiences and the people they knew with them. And if we if they remembered we had the ability to solve a problem for them, we'd get a phone call. And so we were found as a result of not like today, we're doing the same thing, but just doing it differently. We were found as a result of people having information to do that, because of some past experience or some understanding of where to get the knowledge. Thomas Register. Or we would have salespeople that would be prospecting or dealing with existing customers that were buying something from us, and they had other opportunities. And because of our versatility in regards to being able to supply parts, we just didn't sell apples. And if you don't want an apple, you got nothing to buy from us. So we had sales guys that were making calls on existing customers and along the way do some prospecting and knocking on other doors. And would come back with opportunities once in a while. Nowadays, nobody wants to see a sales guy or a sales lady, and at this point, to go knocking on doors is kind of an expensive process. The observations I've whatever grown to understand at this point is, is that the new generation. Thank goodness for them. Wants to do it with their phone, do it with the web. Those tools are phenomenal. The information that's available to you in less time than you can do it otherwise. And your approach, our approach as a result of your help and effort is to make ourselves available to those people that are looking for something that can find us easier than us hoping to find them by knocking on the doors. And so the end objective, from my standpoint is, is we need to create something that is easy for people to, whatever, purchasing people, engineers to find us, our capabilities, to realize that we are more than a valuable supplier and that we can solve their problems. And the other, I guess, approach another worry on my part is, is we basically engineer solutions. We're not one offs and just keep making it. We every everything we do is unique to a given customer for a given application. We probably don't, I know we don't have two parts that we make that get sold to two different people, two different companies. We may have laminate materials that get used by multiples, but everything has a unique part, and every part is designed specifically for their application. What is most beneficial from our standpoint is if we get to talk to the engineers that are designing it and, you know, if you thought about this or did this, we could save you a bunch. This would make life easier. And we can cut 80% of the cost of reworking it or redoing it by doing it right the first time. By not having to come back. And well, if we'd known to start with, we would have done it this way. We have enough experiences that we can know where the shortcuts are, know how we can do something better, and offer a solution to whatever extent is necessary, whether it be printing prototypes or machining or punching. And at this point, it's it's easy for us to make a punch tool. And it's inexpensive in relationship to what things used to be. So there's all these things that we can offer. But if the product is already designed and somebody has already purchased it before we've had a chance to participate, not a problem. Other than it's nice to get in on the ground floor and help solve some of these problems. So the new way of doing it is to basically get yourself easily found by everybody that might be looking, as opposed to thinking that you can go out there and talk to everybody that might not be looking and hit on 1 or 2 that are looking as opposed to being able to swamp the market, I guess, or swamp the swamp the market so that they're available to find you. And we need to make it easy for them to get their solution, which is the approach on this punched part initiative that we have gotten in place enough past experiences, knowledges, tooling capabilities, engineering abilities and support to do this basically almost in our sleep. And to do it more efficiently than I think anybody else out there. And no question, as far as quality goes and speed of delivery is not a not a problem, we can resolve whatever is necessary on that. So the effort or the difficulty from my standpoint is now that we have these capabilities to go out and knocking on enough doors to find enough people to give us enough opportunities when they aren't interested anyway at that point, or to find the ones that are interested and want to do something now we need to have your help in making that all happen or without it we've got capabilities that are just going to sit not get to where we really want them to end up being.
Bill: So we take that same approach that you have in the manufacturing facility to marketing. We're looking to find opportunities that we can design processes and tools around something that we can scale up and mass produce. Right. So it's very similar. And I think Pete you're exactly right. We have to think about the 95/5 rule. If you have a total addressable market, a target market that could buy from you, on average only 5% of those are buying today. The other 95 are, not a need, not in market. Don't have an issue. Current supplier’s doing fine or haven't developed that need. So we think about that 5%. We want to try and activate them to recognize you as an authority that you can solve their problem, that you can provide. You know, you have authority in the space and you can solve that issue. When we look at the 95, though, we can still message to them because we don't know which one’s which. Right. We can still message them with our brand and our brand promise and our solutions and who we are, what we do, why we do it, who we do it for, and those type of things so that whenever they move into that purchasing situation, into that 5%, they're ready with you on their short list. So lik oh yeah, I've been watching ITEN, I’ve been listening to their stuff, aware of their situation. I think they could be helpful to me. So yeah, I think we're on that right journey. We're very early in that journey, but we're excited about what we're seeing and what we're developing together. So it'll be interesting, to, you know, you and I won't be here for the, 200 year, but hopefully, they'll look back and think fondly of this partnership, in helping you guys grow. Pete, another thing, switching gears a little bit, we talked to a number of people today, and this word came, we asked this question, what does ITEN mean to you? And you're probably sitting here like, whoa, this could go the wrong way really quickly, right? You and I have been around a long time.
Pete: Did we pick the right people?
Bill: Yeah. Yeah, that's exactly right. Yeah. You paid them enough, right? But, you know, having been in the family business all my life, I mean, I started as a janitor in my dad's office building as a young person and went to construction crews and all the way up through. And you've been here for a long time and multiple generations. You ask those questions, and sometimes you wonder what's going to come out. But I think you'll be pleased that the consistent word that we heard was family. That's what we heard. And I just want to commend you and your family and take ownership and leadership group. The culture that we're hearing about and that people believe in is one of family that they can count on each other. And then I was asking some follow up questions, and we were talking about it. And they also were leaning towards clients, family and clients. That's kind of the two takeaways I had. And it was, we have to deliver for the client, the customer. We have to. So internally they're focused on the family aspect, but they also recognize that they got to produce something and keep the clients happy. So we can keep this family afloat. Right?
Pete: Yeah, absolutely.
Bill: So I was very happy to hear that. As a fellow business owner, you're always wondering what type of culture you're actually executing and delivering on. As a we all aspire to heights, but, you know, how are we reaching those? But I just want to commend you on that. I think that was, kind of a, Easter egg that we opened up and found an amazing piece of candy. Or maybe, I guess today with inflation, the kids want a $20 bill in their Easter egg to make it impactful. But I just wanted to congratulate you on that.
Pete: Thank you.
Bill: So, Pete, as we're looking to, wrap this conversation up, I'd like to ask you about a little perspective on the first 100 years. Not that you've been here for all of them, right. But you've been here for a big part of them, and certainly with your dad's history, you guys covered a good swath of the ITEN history. And as you're looking towards the future, you're investing in a lot of machinery, facilities. You're investing in people. I tour a lot of facilities, and I can tell when I walk in a building, if I can feel that, I don't know what it is. There's emotion, there's an energy, there's a a way people behave. And you can feel it here at ITEN Industries. Maybe talk a little bit about how you see the way you're positioning the company for the next 100 years around people, innovation, the culture, and making sure you're delivering for your clients.
Pete: Well, customer is, number one, because without the customer, none of us have anything. So we need to focus on our, quality policy is understanding and treating my customer’s expectations. And that's internal as in within departments, whether that me whether you're my customer or vice versa, which we're all each other's customers and suppliers. So we try to hopefully get that instilled in everybody. New people need to get adapted, I guess is the right way of putting it. As far as, again, business opportunities, we're trying to stay ahead with technology. We I forgot we got a, inspection machine for part inspection, which allows us to do what would take 15 or 20 hours per part in about five minutes. Once you've got the original program written. Again with the idea and some of the molded parts that we're doing that we need to be able to supply dimensional layouts for each and every one of those, PPAP labels on 2 or 300 parts. So it's, been a nice addition from that standpoint. Hopefully it lets us apply some of that to some of the other things we're doing, trying to develop some new products. We are, processes as well. We have a new process that we just came up with that, should allow us to do some pultrusions that nobody else is doing, allow us to do some structural, systems we would like to. It's always been my objective to develop a commodity type item that instead of everything being unique to a customer, we have a commodity that we can sell to multiple people, competing against the other people that are maybe making the same things, and have multiple customers buying the same item from us just to kind of help with leveling things out. Sometimes we're busier than all get out with new projects, and other times there's dry spells. And the same thing goes with commodities. But I guess my assumption is, is that we should be able to hopefully balance those things out a little bit. We got a lot of space in the four buildings that we own here in Ashtabula. We've got lots of time as far as multiple shifts go, it would be nice to get those filled up. We, need to find those people that are interested in doing those things. Sometimes it's easier than other times. We try to do as best we can as far as bringing in and training. We were real happy to have people that wanted to advance. We got entry level jobs that you can come in off the street for all the way up to toolmakers, engineers, the lab facility for testing and development of materials and all that sort of stuff, and CNC printing, printing. Excuse me, the programing. If I had to pick a number, we probably got 100 CNC type machines of one type or another between punch presses and machines for machining of parts and injection molding and all the controls at this point. The controls are unbelievable as far as what you can do on an injection molding machine today versus what you used to be able to do in the fact you can kind of see what happens real time by looking at the graphs and understanding absolutely what is going on inside that barrel and inside the machine, and get to the point where you can tweak the machine so they're putting in less than, what, less than a half of a cubic centimeter in into a cavity to balance the whole thing out. So and new tools as far as we're doing the same thing, we've got SolidWorks, which we've had for probably 15 or 20 years.
Bill: Your family is also making an investment, an additional investment here in Ashtabula County with the, hotel, which we're set to open sometime here in July. And I know there's been a journey, as all entrepreneurial processes are, but, very excited to stay in the new hotel, which is going to be, what end of the this is, July. So hopefully end of July 2024. That'll be opened. And, excited about that investment and opportunity. I know, speaking to some locals here, we stayed in the area last night. There's some chatter about that. Everybody's excited. So I think that's another great contribution you guys are making to the local community.
Pete: We, have been here all our lives. As in, my father and his father grew up in Youngstown, moved to Ashtabula and my grandmother, came over from Sweden with her rest of the family. So we're 3 or 4 gen, four generations, five generations, whatever ends up being in Ashtabula, we, it was done our best to contribute to the community from the standpoint of Kent State, when, our father passed away we made a contribution in his name, the family decided to make a contribution in his name for all of the things that he's done. And this opportunity came along as a result of the former Ashtabula guy that, moved away, did very well. And another Ashtabula friend that's been here all his life. And, the three of us decided it was probably a good thing to do to support the community. And it will be. It's still in process.
Bill: Sure. As as these projects always are. And that'll be good to be there in the opening and look back and reflect and hopefully forget about construction and all the hurdles you have to go through. Well, Pete, this has been just a great conversation. I think ITEN is positioned well for the next hundred years because of your commitment and your family's commitment to investing in people, investing in machinery and innovation. And I think you guys are set for Imagineering with Plastics for the next hundred years.
Pete: Thank you very much.
Bill: Yeah so thank you for joining us today. Really appreciate it.
Pete: Great. Thank you.