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Episode 36: The Keys to a Resilient Manufacturing business

Bryan Powrozek
Sep 27, 2023
 

 

In this episode of The Sound of Automation podcast, we sit down with Bill Boucher who leads Wipfli's manufacturing, retail and distribution segment. Bryan and Bill discuss ways for manufacturers to achieve success in the market by incorporating innovation, automation and technology into their processes.  Listen in to learn how to build resilience into your manufacturing business and achieve your growth goals.

Transcript:

Bill Boucher 00:00
 
try things and innovate and get that cultural aspect of identifying moving quick, learning, failing fast. And if you do that, then I think the next step would be the risk assessment to understand where you need to go focus. 

Podcast Intro Narrator 00:13
 
Welcome to the Sound of Automation, brought to you by Wipfli, a top 20 advisory and accounting firm. 

Bryan Powrozek 00:45
 
Hello, and welcome to the Sound of Automation. I'm Bryan Powrozek. And before I get to my guest, some exciting housekeeping to start things off. This is the first episode we're recording since Clayton McKervey joined Wipfli and so I felt what better way to kick off that new relationship than having one of my new colleagues come on and talk a little bit about his areas of expertise. And so, joining me today is Bill Boucher from Wipfli. Bill, how are you doing? 

Bill Boucher 01:05
 
It's a good day today, Bryan, yourself. 

Bryan Powrozek 01:07
 
I'm doing well, doing really well. It's a Friday, so about to about to get to the weekend. 

Bill Boucher 01:13
 
Downhill from here, I think. Thanks for having me today, I appreciate it. 

Bryan Powrozek 01:18
 
Well, no, thanks for coming on. And so, Bill, you lead Wipfli's manufacturing retail and distribution segment. So, I guess if before we get into the topic, if you just want to give me a little bit of your background and kind of talk about what that role looks like at Wipfli? 

Bill Boucher 01:31
 
Sure. As you mentioned, I head up our go to market for the manufacturing retail and distribution sectors within Wipfli. It's approximately one quarter of our book of business, responsible for client success, client acquisition, go to market strategy, and then really be working with our execution teams in the field to deliver fantastic results. So, some of the different areas we've focus on include within the manufacturing retail and distribution space, industrial products, consumer products, retail, food and beverage and distribution. And we have some niches where we really excel around metals, plastics. We also have a lot around the automation space, a lot of good traction and dealerships. We also have a strong ag practice. So again, we have and we go to market by these industries and by these niches to better serve our clients. 

Bryan Powrozek 02:33
 
That's fantastic and that's I think one of the things I'm kind of excited about is that you know obviously when we started by the name of the podcast Sound of Automation we were heavily focused on our customer segment in industrial automation and I think in just the few weeks I've got to meet and work with the Wipfli team it's going to be exciting to me to see how we merge some of what we're doing on the manufacturing side with what we know about the automation side. And so probably in terms of topics, we'll start seeing more stuff along these lines where we've really focused heavily on the automators themselves. And now we can kind of open that up and look at more broadly across all of manufacturing. So very excited. 
 

Bill Boucher 03:13
 
There's probably a lot of similarities that you've been seeing within the niche that we see across a little broader segment. But I mean, at the end of the day, what I find is the manufacturers really are focusing on, let's say, four key areas and growth being one of them, especially coming out of the pandemic. Second being innovation, trying to innovate. And I would say nowadays that innovation is probably being a little bit more lumped into growth, but definitely seeing a need for automation and efficiency. The cost takeouts are coming back into play. And the last area I'd say is resilience. And when we go to market, we try to help our clients build those capabilities around one or more of those areas to allow them to become self-sufficient so they can achieve and be in their success in the market. So, it's exciting times. Again, you bring a lot of those from the Clayton McKervey perspective to bear. And I've really increased our practice area in the automation space as well. So, looking forward to both of us doing great in the market together. 

Bryan Powrozek 04:15
 
Exactly. And I'm glad we made it to the first bullet point. We're already going off script. So, I like this. This is good. But I want to touch on the second point you had there on innovation. What are some of the ways that Wipfli’s out in the market helping clients understand how to take advantage of that innovation within their business and grow and develop? 

Bill Boucher 04:39
 
Yeah. So, in the truest sense, innovation comes at the DNA level. Right? I mean, it's something that many firms have tried to mandate or they've tried to implement as a program. But from a Wipfli perspective, you know, you need to start at the basics to be able to allow your people process technology to really drive that innovative culture. Okay, so while programs always happen to be able to make a tweak to an iPhone or be able to pivot just a little bit to change the colors, true innovation comes at the cultural level. And when we look and work with our clients across the spectrum of, I'll use people process and technology, all of those levers need to be pulled to help them be successful as they develop that innovation culture to where they're generating the ideas in a space that is open and welcoming. They're able to bounce some off each other now, days with new tools and technologies. And those ideas can actually be put to market pretty fast and fail fast if they need to and learn from them. 

So that usually takes a multitude of capabilities. That takes a strong hiring program to make sure you're hiring the right folks from an employee perspective. It takes strong, I would say, understanding of how the processes work and some technology to allow your teams to be able to focus on key areas versus, let's say, non -value -added areas that traditionally, if you don't have good automation in your environments or really strong process focus, you're spending your time in areas that you shouldn't. And innovation is one of those that typically comes second or third. But if you get the automation strategy right and you get your processes owned, your teams will start to have time to innovate and brainstorm those new ideas, get them to market faster. 

And then the last piece that we do is customer listening piece around, let's say, CRM and growth, where when you're in the market and you're out there listening to your customers, you're visiting customers to see how they use the product, you're actually trying to help the customers with next best ideas and next best products to use. That, all of those things together usually help our clients become more innovative, have a stronger growth culture, and an overall, probably stronger culture overall, because, again, when you're growing and successful, it breeds more success, I would say. So, a lot in that answer to Unbundle, but I definitely think that innovation still is important. It's just never been the driving factor for many folks. It always seems to be a second or third thing to go tick off the box. I don't know what you're seeing, Bryan. 

Bryan Powrozek 07:24
 
Yeah, you know, and it's funny because I was at an association meeting earlier this week and one of the automation companies was talking on one hand about how they're able to come in and help facilitate some of those conversations. And you think about a statement. an injection mold or their expertise is that molding process or that stamping process. It takes someone coming out for the outside to say, hey, there's another thing you're not thinking about here, another way you're not looking at this that now drives that innovation. Then they turn right back around and did the same thing internally of saying, hey, we're really great at the control side of things. We're not so good at the data analytics side. Rather than trying to build that internally, we're going to go borrow it or buy it and find a partner that can help figure that out for us. Because we don't want to get there in 20 years, we want to get there next year. Let's find the partner that can help us get there next year and then we can grow the internal resources as we go along. 

Bill Boucher 08:29
 
That's exactly, I think we're aligned 100 percent. When they're trying to pull Excel spreadsheets, they don't have time to be innovative. So, so let's give them the information they need and again whether it's product innovation internally or external focused on your markets to innovate the external product you're going that same culture and a lot of the same activities need to happen so. Again, it's the innovation now from our side. We are seeing a bit of a pivot because again people are starting you know there's a bit of a slowdown in the market. And people typically get a little tighter management leadership time had almost it pulls back just a little bit and that's unfortunate because you know those firms that are in strong position to take more market share these are the times when things get a little rough that those that have the right innovative culture there they have the right infrastructure that they can focus on grabbing market share this is the time for those to do that. 

But again you know there's always a little bit of a risk with that right swing big and down times it takes them confidence in your team your company you know the way the business is built to do that. And again at the end of the day we like to be a part of some of those conversations as we say to help them move maybe not all of them. Because at the end of the day we just want them to be successful in the market but this could be the time for some of our clients to take market share by being more innovative. And we just keep trying to push them a little bit more to get comfortable with that as I would say. 

Bryan Powrozek 10:03
 
Which you know I think that makes a nice segue into the into the last point you kind of brought up there about resilience right and that. As things started to take and that was another topic of conversation at this event is this another recession that we're going to just talk ourselves into the people start getting. More conservative and they're not spending the money and so it ends up generating a recession. Which you know some of the work that that Wipfli has put out around this idea of building a resilient manufacturing business you know I think also kind of helps with some of that so, you know what have you found are some of the keys to building a resilient manufacturing company? 

Bill Boucher 10:44
 
Yeah, so this will sound like a true consultant and I hate when I do this to myself. So, because sometimes I am what I am as Popeye used to say. So I think it all starts with just the simple risk assessment, you know, having either where you've got the ability to look at yourself in the mirror and you know, start by looking at that risk assessment, identifying where those are, or if you're not really capable, strong enough, diligent enough, having somebody else come in and give you the hard look, looking at the different areas, what's the potential risk from supply chain disruption? What's the potential risk from, you know, governance, regulatory disasters, those types of things? But that's typically the first step and many of us don't want to do that or we just think we know and we just kind of run into it. So that's always the first step but it does sound so consulting speak when I say that. I just kind of get a taste in my mouth. But... It still it still proves itself probably eight to nine, you know eight times out of ten It's the right first step to do. There's you know based on that risk assessment and which areas you should probably focus in it becomes the ability to prioritize because you can't go out and cure world of hunger in the first day or two or three and You know whether it's helping you, you know, we've learned a lot during the pandemic about diversifying our supply chains, right? 

So I think most firms should be fairly good at that and they've been working probably more on the just -in case rather than just in time and they're probably starting to move back a little bit there to start them and get a little bit more of the lean focus. But you know those two areas right now are always usually helping to make sure as we've learned the valuable lessons early in the pandemic that we need to make sure we've got those right capabilities the right supply base there to help us make sure that in the event that something happened similar maybe not to the same scale, I pray, but similar, that we're ready for it. So I think if you look at that most companies have some areas to work on whether it's pulling themselves back to a little bit more lean or just making sure that their partner ecosystem is built for strength but a lot of companies have been through that last 18 to 24 months. 

So that's one area. Second is around the digitization and let's say automation and technology so We learned with the workforce. It's still shrinking. There's been studies out there that there's that most manufacturers are having difficulties still hiring for their positions. Now I would tell you that some of its locations sometimes where the manufacturers are located but overall, with automation taking some of the roles out of the shop, let's say and new roles coming in at a higher level, what I'm seeing is that there's a gap that there's still only entry level roles to load. You know to drive a forklift load into a manufacturer or go into a truck, they're not high value roles, right? And stuff to find people at the same price when it's so hard work. 

So I think the more they can digitize and automate both their back office, their middle office and their front office, that will help them build the resiliency to kind of be able to one, to move quicker in the market, and two, not be behooved to the labor shortages that will continue to, I think, hinder our abilities, just because it's a structural thing. It's just we don't have enough people who can do the work. And there's lots of reasons for that that we can't get into a political conversation here because no one wants to hear about it. 

So, but at the end of the day, there's, we know we need to put our big boy or big girl pants on and figure out some of the solutions so that we can get some people in here to do the jobs that we need to get done. So, I think that's a second area. 

And then I can go through more, but the last one, I think you've mentioned a little bit around the data and analytics. To be able to use data, that's the first step in a lot of the automation digitization, but having good data, clean data, having strong business processes in place so that you can repeat and keep the data clean. Once you have that, then the first step that most companies are just starting to get down to be able to build the resiliency is to understand what to do with the data, make better decisions, understand how to visualize it, how to start to get prescriptive and predictive. If you take those three again, I think somewhere on the roadmap, there's probably a 99% chance that a company will have two of those three, I would say, whether it's around the diversified supply chain lean, whether it's around digitization or whether it's around data analytics that will come up and pop into somewhere on the roadmap they need a focus to do. 

Bryan Powrozek 15:27
 
Yeah. It's interesting, going back to your initial point about the risk assessment and that it's the, it really just underscores the need for having those best practices, kind of looking at those processes because I've seen it in talking with our automation clients, I saw it in my engineering career. Yeah, I can automate a process, but if that process is flawed to begin with, now I just make more mistakes faster and I make more of them. So really going in understanding the practices and that's another, from talking with my clients, another thing that it takes manufacturers a little getting used to is you may have always wanted to do the process this way, but you just didn't have the capabilities. Well, now don't automate to replace exactly what you're doing. It's kind of like the whole idea behind 3D printing is you, a 3D printed part, you're not going to design it the same way you would a stamped part. You take advantage of the manufacturing process and same thing here, knowing, getting that initial roadmap of kind of where you want to go, understanding what the automation needs to do and then developing the solution is it just underscores the need for getting all those things in line before you start spending the money on, whether it's a robot to automate your process or a bot that's going to process your AP, you got to have that done first. 

Bill Boucher 16:45
 
Agreed, it's the old garbage in, garbage out, and so forth around your data. But the topic that everybody loves to talk about, and if I say it three times on this podcast, I guarantee you will be trending. If I say artificial intelligence, did I say that correctly? Artificial intelligence? I say that three times, artificial intelligence. We will start trending because it's such a sexy topic out there, okay? And, but at the end of the day, the data is still the number one piece you need to have clean, which again is only usually, only enabled by having strong processes. 

So, once you get those two attributes in there, then we can start talking about analyzing your data and then moving into AI. But everybody wants to talk about AI right now. Now I think there were some statistics that, I think that we both saw talking about there's still, I'd say less than 50% of manufacturers are really applying automation or any of the industry 4.0 technologies. And I know AI might be a little bit more than those to help them in their workplaces. So, I think there's still a lot of clients out there and some of them are ours that I see that are still in industry as I used to call it, ERP 1.0. Okay, they might be on a QuickBooks or might be using some bespoke app that they've built and they need to continue to invest in some of that underlying technology, whether it's a business central net suite or Sage product to help them get to the ERP 2.0 so that their processes are honed so that the data is more accurate and more of the times. And then as they do that, they can start to move into the newer areas. 

So, there does require sometimes an investment to do that. It's hard to jump from something that is kind of random as one would say and unstructured into the newest stuff to your point with your clients and our clients. But it's also hard for them to kind of understand there needs to be a ratable roadmap so that they can achieve the growth that they want, achieve the savings that they want and achieve the business case. It's always exciting when we engage in those conversations to help them develop that. Because again, once they have the vision and they get their teams excited about it, it usually ends in, again, client success. 

Bryan Powrozek 19:08
 
Yeah, so I guess, Bill, what's your one piece of advice? If I'm that small to mid -sized manufacturer that's sitting back and looking on the horizon saying, yeah, I've got to do something. I just, I don't even know where to start. Like what is the first best step they can take to try and move down this path a little bit to modernizing their operations and improving you mentioned earlier that you can't do it all at once So.

Bill Boucher 19:37
 
I mean I'm not going to go back to the risk assessment because again, I can't say that I've almost said that three times if I keep using that this this will crater the podcast that we're doing because no one will want to hear it I think. Much like when I was saying around building the innovative culture, okay there's lots of things that tactical things need to happen, but everything that we're talking about requires change, okay the change management aspect of it the ability to I think. I was presenting at the recent FABTECH show and we were talking about back-office automation. I made that I started off the presentation around the fear of automation and a simple statement from a song, that I'm not going to sing to you guys I promise, from early in the 20-teens about,  as people we fear what we don't know, okay, and that causes a ton of bad things to happen and that fear of the unknown is basically in, you know, I'm not trying to get too philosophical, but it is in our DNA the fight or flight that has kept us to survive. But it also has implications when we're trying to help our organizations and our people move forward with the new technology and trying to get to new processes and to be able to move forward…that fear of the unknown, so what I'd like to say and trying not to be too high and too up in the clouds, is start to build that culture of addressing the change. Acknowledging that there is some truth to all those myths that talk about automation as hard or that you know It's costly.

There's lots of there's probably some failures out there. There is always some truth in every bit of those myths that we talk about of why you shouldn't do something but once you address that say, “yes, there is some of that out there” and acknowledge it, know it, then you can begin to move forward with building the change culture that is enabling to be open-minded to the new success to fail fast when trying to implement new processes or technology. 

So, if there was one thing that I would suggest at the macro level It would be to start to kind of allow that to come into your performance culture. Start to enable people to feel more comfortable even in a bureaucracy, a bureaucracy in an org structure, try things and innovate and to get that cultural aspect of identifying moving quick, learning, failing fast and if you do that then I think the next step would be the risk assessment to understand where you need to go focus and then have a road map. Once you figure it out lay out the road map so that you know as for the next three years or so two to three years. So that you when you make changes and your business changes you have a point of reference before you go change.

Lots of companies just start without the roadmap. So anytime something happens and they need to make a change, they don't understand what they're going for. So, the change just, they just change. And again, to me, having that roadmap and business plan out there gives you the North Star and you can make informed decisions. So those are the three things I would suggest. And again, I'm hoping that they're not too esoteric, but at the end of the day, if you don't have the right culture and you start down the path, it can feel forced and it adds a lot of friction to the process. 

Bryan Powrozek 23:06
 
Yeah. And I think that's, you know, that's kind of change management 101, right? Having everybody on the same page and going in the same direction, because inevitably, yeah, you're never going to have the perfect plan from the outset and you're going to have to change, but at least if you know where you're trying to get to, making those course corrections gets a lot easier. 

Bill Boucher 23:27
 
Agreed. We've had clients that as you mentioned before when they're all excited about the change and they get some new technology to go through selection next thing you know we are taking new technology tools and implementing the same 30-year system into them. It just looks a little nicer. And at the end of the day they know it but they can't stop it. The whole environment is conducive to just keeping doing what we do. So, I would tell you that change is important again. 

Bryan Powrozek 23:56
 
Excellent. Well, Bill, I'm glad I could get you on for my first podcast under the Wipfli umbrella. If someone wants to you know hear more about the services we offer to I mean not just the MRD you know clients but Wipfli covers a lot of different areas. You know what's the best way to find out more about the firm and potentially get in touch with yourself. 

Bill Boucher 24:20
 
Yeah, so I always like to say start with Wipfli digital. I think if you go Wipfli digital you'll pull up our digital website and then it probably aligns to a lot of the things we were talking about today. You can reach me at Bill.Boucher@Wipfli.com be glad to speak, talk, email, text, whatever the form or fashion, carrier pigeon if you care to. And by the way, I have seen people race carrier pigeons. There's a whole industry of that. I never knew that out there. So, it is still valid. Let me tell you, it really is still valid. So, but it is it may myself, Bryan, our team, we're here to serve first help you be successful first and then we'll figure out the right answer. So if you have questions, reach out to the website Wipfli.com, Wipfli digital, we'll be glad to get back in touch with you and again here to help. 

Bryan Powrozek 25:07
 
Excellent Bill. Thanks again. 

Podcast Outro Narrator 25:11
 
Thank you for tuning in. Don't forget to like us, subscribe and share on social. To learn more about Wipfli, visit us at Wipfli.com. That's W I P F L I dot com. Perspective changes everything. 

 

Author(s)

Bryan Powrozek
CPA, CGMA, CGMA, Senior Manager

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