Engineered To Lift

You Can't Buy Your Way to the Front of the Manufacturing Line
Engineered to Lift — Episode 6
Hosts: Naveen Vinta (President & CEO) and Eric Niemi (VP of Engineering), Bailey Specialty Cranes & Aerials
Runtime: 24:37

[00:00:00]
Naveen: Memphis — 1,500 megawatts of gas turbines sitting on the property. Have you seen that in the news? A stretch of trailer-mounted units, trucked in. One of the best-capitalized operations out there. They had to rent these temporary generators — not because they couldn't afford the real thing. Money is flush, we know, with the recent IPO and everything. Because they couldn't get in line for it.

Eric: It all comes down to time. If you can't get the standard product, you find a different one and you move. They don't have time to waste.

[00:01:00]
Naveen: There's no secret. We've talked about it in these episodes before — the AI headlines the presidents keep talking about, everybody is worried about, has quietly turned into a manufacturing race at the end of the day. So we see all the VCs and everything. If we go back: the dot-com, the Facebooks of the era, and then it came to crypto at a time, Web3 development at a time, and then now anything with AI in the mix — VCs throw cash at it.

So money is not the constraint anymore. When it comes to manufacturing, the queue is. Pick any critical component, it's backordered past your finish line. So no amount of check, no amount of spending power moves you ahead in the line. It just gets you in the line.

Eric: That's right. They just can't manufacture it in the timeframe that you need it. And that's the story of how it goes.

[00:02:00]
Naveen: So the industrial bench has to support all this manufacturing capability. The giants — the JLGs, the Skyjacks, the Genies of the world — they can scale, they can manufacture in volume. But it's the niche manufacturers. When you're at a critical time crunch, when it's the literal gold rush of our generation, they need manufacturers like us who solve the problems that don't have a catalog answer.

We build a solution for you. This is the Engineered to Lift podcast. I'm Naveen Vinta, and with me I have our VP of Engineering, Eric Niemi. Welcome to this episode. Welcome back, folks.

So I guess with AI and data centers, we can't stop talking about how political it has become. If we put politics aside — underneath the politics, there's always the manufacturing story. People who are trying to, like, NIMBYism, whatever you want to call it, stopping the data centers. If you go back, stopping technology has never been a winning proposition.

[00:03:00]
Eric: No, never. I mean, you look at electric vehicles, for instance. They had battery-powered vehicles, big trucks even, back in the 1920s, '30s. It only slowed down. It didn't stop. There's many people that don't want electric vehicles, but the fact of the matter is they're here anyway. You didn't stop the Teslas of the world. You didn't stop China from making them. Why? Because they were a cost savings in the long term. Did battery technology need to catch up? Well, that's another part of the story.

Naveen: Yeah. It was dormant for a long time because the technology and the atoms — it has to catch up.

Eric: Yeah. It just didn't have the technology to build a larger storage battery in a small, compact body, and that's just the way it is.

Naveen: Now that we have all of this, there's no going back in electric cars. So technology works like that. Human ingenuity leverages technology to make the leaps and bounds in progress — [00:04:00] I know I'm philosophizing a little bit — from the wheel to inventing fire, to electric cars, to now nanometer chips.

Eric: Yeah, it's all about speed. How fast can you get it to market? Well, AI's a piece of that. You have the idea, but how do you flesh it out? That's where AI comes into play. It can help you flesh it out, give you some more feedback without having to have a staff of 20 engineers working on it. You can throw the ideas into AI, and it goes out on the internet, and it finds all the other data and pulls it together so that you go, "Oh, wow, I didn't even think of that. There's this new technology out there that I really need to pursue."

Naveen: Yep. And this arms race is a real thing, whether we like it or not. Coming from a technology background, I can speak to it a little bit. Because once the world zeroes in, or centers their progress on a technology stack, it's hard to ask them [00:05:00] to pivot quickly. So as America, we want to be leading in AI, and then we want the world to adopt our tech stack. We have to be front and center in this one.

So talking about not being successful in stopping technology — you were saying something about MSOE having the electric car.

Eric: Yeah. One of the first shots at a production electric car was by GM. They had built about a half a dozen of them or so, and they got dispersed out to the market. Market didn't accept them. They didn't embrace the new technology. Well, what happened then is, "Okay, let's donate them to schools and research facilities, and they can look through it."

Naveen: Oh, I see.

Eric: Sure. And there were so many more developments that were made from that donation — that's where we get the Teslas and the other models that have come out for electric [00:06:00] cars. That's why now GM's got the electric Hummer. I mean, where did that technology come from? Well, somebody had to study what was out there. And before AI, the way to do it was: here's what we've come up with, now flesh it out, make it more compact, make it more visually attractive to customers.

Naveen: Yeah, appealing.

Eric: Appealing, yeah.

Naveen: So even talking about technology — Microsoft has a PalmPilot, something you used to touch with the pen. The pre-version of the iPad, a while back in '95 or something. It was way ahead of its time. The technology has to catch up. Steve Jobs had to do his presentation.

Eric: Yeah, just look at the BlackBerry, for instance. How many people had BlackBerries and wish they still had them? But the problem, the issue there, is technology's gone ahead. You no longer need the pen. I mean, you can just talk right to it.

Naveen: You have like 10 pens literally sitting on your hand.

Eric: [00:07:00] Right?

Naveen: Yeah. So talking about AI — let's start with our backyard, right? What's happening in Wisconsin. We have, like, the World Trade Organization and all of this — we've spent decades moving manufacturing offshore. So the famous map of top employer in every state, when you go over time: at least in the 1990s, it's manufacturing almost coast to coast. Every state, the top employers were manufacturers. Today, it's healthcare almost everywhere you look.

So now with this AI build-out, it's stress-testing how much of what's left of the industrial base — all at once, obviously, with this AI race on a deadline. For example, we try to source components locally. Could you speak to some of the challenges we are having?

Eric: Oh, sure. Just for instance, we were looking for a wheel drive that we had purchased previously for a product, and [00:08:00] turns out that the company sold a couple of times in the 10 years that have passed. So how do you find it? Do you start doing searches on the internet and you go back to the vendor? Nope, they don't make it anymore, or it's been discontinued. So how do you find a new one?

It's sometimes a real struggle. And not just bolt patterns change, but capacities change, speeds change. So how do you adapt that in? It can be a real struggle. And even then, when you find a manufacturer, you find out their lead time is 12 weeks away, 16 weeks away, half a year away.

Naveen: Yeah, we are standing in that queue.

Eric: Yeah. You buy a place in line, that's it. I mean, no amount of money can get you one faster.

Naveen: The podcast audience is supposed to be somebody who's in procurement trying to get to the finish line quicker. But if there are niche [00:09:00] manufacturers out there that are making these, and we cannot easily find them — please reach out to us. Over the episodes, we've described: we build aerial work platforms, we take all the niche equipment, we build customers' orders. If you have products that you think might be useful to us, please feel free to reach out.

Eric: Yeah. It's a great part of my job. I get to go find something new and interesting, and we can move on it quickly. We pivot on a dime.

Naveen: Yeah. Instead of buying from the bigger manufacturers, if we can support a fellow niche manufacturer, I'd be more than happy to do it.

Eric: Right.

Naveen: The backyard paradox: the biggest industrial construction in state history here in Wisconsin is going up. Mount Pleasant AI Campus, reported around $7.3 billion, declared operational in June. Port Washington, announced $15 billion-plus. So this all requires skilled workers. But if you have to build at this scale, skilled workers [00:10:00] — humans — can only scale so much faster, especially people with those kinds of skills. So a state that has just lost manufacturing as its top employer is hosting a manufacturing-scale build-out. So even though we lost it and healthcare became the top employer, with all this build-out, we might again pivot to manufacturing.

Eric: Yeah, sometimes you just can't find the people. I mean, you need 10 technicians to put something into place, you can only get five. So what do you do? Then you have to look for the technology —

Naveen: Leverage technology.

Eric: — leverage the technology portion of it to be able to lift the parts into place. That's where we come into play as a niche manufacturer. "Hey, we gotta lift this huge panel, and we've been doing it this way with eight guys." And we go, "Okay, we'll pivot, no problem." Put the attachment on a custom lift. We had a [00:11:00] base model already in stock, in the system, that we could adapt. But it's that adaptation that the big manufacturers can't do. They can't just pull one off of their production line and make changes specific for a customer.

That's where we come into play. That's where we move ahead in the technology. That's where we move ahead in less employees to do the same job safely. They can then move those employees over to another portion of the project. The project continues to move forward. Time is money, and they need the technology in place. They need that data center. They need that healthcare building. They need a power plant in place. How do you get it into place?

Naveen: Yeah. Talking about the AI build-out and everything — technology is always not decelerationist, but it always brings down the prices, in that sense. Because of this AI build-out, a lot of things that we used to do that took a lot of time, now we can outsource to AI, and [00:12:00] then we are working on very niche, exquisite problems. That has helped us focus on the right things for the customer, make sure everything goes out properly.

Before, if we were doing most of the rote work that had to be done — somebody had to do it — we may or may not have missed something more critical for the end user. But now, with AI, with machines taking care of it, our engineers are focused on exactly what the customer needs. We are paying much more attention to customer service and other things.

Eric: Right. It's those add-ons that make the job a lot easier for the customer, that we get time to develop — the added technology that makes the machine that much more efficient.

Naveen: How industrialization has helped —

Eric: They go hand in hand. Because you have a large number of workers doing physical labor. They need [00:13:00] healthcare. Well, when you help healthcare by making it faster and easier to provide service, you keep those workers more healthy. Now industry can grow. So when the industry has to grow, when there are more people that have paying jobs and they want more products, now suddenly you have to shift, because the demand is there.

Companies are gonna build the product. How quickly can you get it to market? And that's where AI helps — it's the speed to market. How fast can you develop it? How much higher level of technology they're asking for, they didn't even know existed. I mean, how many people every day go, "Hey, Siri," or "Hey, Google," or "Hey, Alexa." And they need that. "Hey, I don't have time to run to the store to get a new tape measure." And just, "Hey, Alexa, tell me the top three tape measures out there." And they give you the price [00:14:00] very quickly, and you can go, "Okay, Alexa, order that one." Or, "Hey, Siri, where can I get healthcare? Show me what's close to me." I don't have time to go digging through a catalog to find it. And so far as to go, "Hey, this is my healthcare system. Where can I get new eyeglasses under my program?"

Naveen: Remember one time when we were driving to a customer, we were brainstorming with Groq?

Eric: Yeah. Back over a year ago already.

Naveen: Over a year, yeah. It acted like such a thought partner. It was synthesizing what we both were thinking, and then made us so primed for the meeting that we were going to.

Eric: Right. It was a secretary. It was taking notes and feeding it back to us. "Okay, I think I know what you're saying." And it gave back a —

Naveen: Very detailed, yeah.

Eric: — very detailed look at it, and we went, "Wow, that was quick." And it's moving at the speed of light. I mean, if you're not in the AI, you're gonna [00:15:00] get left behind.

Naveen: Exactly. So previously, the industrial age helped with physical effort from humans. Now, AI is helping reduce the physical effort, and then also the cognitive load that everybody carries around.

Eric: Right. And you don't have time to dig through the drudgery of searching the internet manually. You tell Groq, "Go find me this." And it'll come back. It'll give you a quick report. It'll give you a synopsis of exactly what it found. Yes, it's gonna make some mistakes, but if you've got five to choose from and one of them is false, the odds are you're gonna hit one that's gonna really move you forward.

Naveen: Yeah. Talking about Siri and Alexa — this takes me down memory lane. Back when I came to this country in 2005, from tropical India to Fargo, North Dakota. I mean, it was colder than cold. So every morning when you're [00:16:00] getting ready to go to school, I had to turn on the desktop, wait for it to boot, to check the weather so I could step out. Then when the smartphones came, we had to check it. Now, it's just a passing thought: "Hey, how cold, how hot is it?"

Eric: Yeah. You can have it set as a reminder: "Hey, give me the weather report at 6:45 AM while I'm getting ready to go to work."

Naveen: Yeah, exactly.

Eric: "Hey, do I need my jacket? Do I need sunscreen?"

Naveen: So the fear about AI replacing the jobs or anything — at least in the sector that we are in, it might make folks very, very efficient. So as a practical matter: some of our technicians, when they're working on a machine, their toolbox is there, they're working on a machine here. I see them spending, like, 20, 30, 40 minutes going back and forth just to retrieve their tools.

Eric: Right.

Naveen: So what if there is a humanoid [00:17:00] robot: "Hey, get me a wrench." It can look at the socket, it can go fetch you the right wrench. Because you always retain the skill. Your physical effort goes way down, but you're doing the very important part of the job, not just the raw parts of the job.

Eric: Right. You're using your brain rather than just turning the wrench.

Naveen: Exactly. That's what we want — everybody to be more highly skilled, higher-skilled jobs than just doing the low-level everyday stuff. We can have humanoid robots that adapt to the existing form factor of chairs, toolboxes, and everything, and do those jobs.

Eric: And as far as where stuff is available — you source a part from an American distributor. But if you dig three layers down, I'll bet not all of those parts are made in the USA.

Naveen: The supply chains always point overseas.

Eric: Some of them are made in Italy, made in Czechoslovakia, they're made in China, they're made in Thailand. Why? Because [00:18:00] that's what happened when we offshored.

Naveen: Yeah, we hollowed out the industrial base.

Eric: Yep. Now we're looking to bring that back, because we can't even get in line to get those from China and Italy and Thailand. So what do you do?

Naveen: Bringing it back is the only option.

Eric: You gotta build. You don't have any choice. And the quality of the work that you put into it is going to be directly tied to AI. That's just the way it's gonna be, because you don't have the technical underbase to produce these things. So we gotta get smarter quicker.

Naveen: So Eric, we talked about how the supply chains have been a problem. If the supply chains are a problem for the bigger OEM manufacturers, obviously for somebody smaller like us, they're definitely a problem. Could you speak to how we can adapt to that?

Eric: You need that drive unit. So how do you get around that? [00:19:00] Well, you can't even get in the queue to get one. So you have to adapt. Maybe it's rather than having a built-in hydraulic motor, you have to separate it. Okay, who can manufacture just the hub part of it? And how quickly can you get it? Who can manufacture the hydraulic motor part of it? And how quickly can you get it? And that's how you adapt.

It takes more time on the engineering side of things, but the fact of the matter is you need the product out the door. And it's time. And yet you end up paying a little bit more — but now you've got a second adaptation for the same part. So now your supply chain just doubled.

Naveen: Yeah. So that's how, as niche manufacturers, we can work around the problems — quickly pivot our engineers. When the new suppliers throw their parts at us, we can make sure the calculations work, everything fits, and then we can [00:20:00] quickly design components around that thing to be able to adapt that new part into our machines.

Eric: Right. Find a new one that's got similar properties, similar or exact capacity, or better capacity even. And then adapt that into our product, and at the end of the day, give the customer a better product than they had.

Naveen: That makes the point about us as niche manufacturers, in the volume of your vendors. There are high-volume vendors who manufacture these aerial work platforms, but you also need vendors who can quickly pivot and then solve your one-off or first-of-its-kind problems. Because we can pivot around. The lead times are long — we can pivot around, we can source components, and then we can do some of the value-added manufacturing in-house to put them together. If the put-together part is 30 weeks, sometimes the components can be four to six weeks, right?

Eric: Right. So the best is to have all the [00:21:00] parts when you're ready to assemble, but that isn't always the case. You find something slipped in the supply chain.

Naveen: Yeah. We can substitute with something else. We don't have to have a very finished product come into our house to put the machine together. We have skilled technicians who have been doing this for years. They can look at the components, they can look at the blueprints, and then put the part together, and then that finished part can go in the machine.

Eric: Right. They don't always need every bit of the information — like if they were an entry-level technician that would need hand-holding and —

Naveen: Mentoring sessions, yeah.

Eric: — mentoring sessions, and the full list of everything that they need. But for some of the trained technicians, we give them, "Here's a rough idea. These two go together. Find a way to hook it together." And we know that the parts are out there. We probably have them on a shelf. The trained technician can go, "Okay, I need that fitting, that fitting, that hose, that valve [00:22:00] that we've already got on the shelf," and they can quickly put it together.

Naveen: Yeah, and then they'll make it happen. If there's anything our engineers can supplement — the knowledge that they need — then we can quickly come up with a solution. That's where having engineers on staff and trained technicians all under the same roof, working hand in hand, will produce product very quickly to the market.

Eric: Right. They're able to come right to my desk and ask the question, rather than having to get on a phone and spend 20 minutes out of their day trying to get a hold of somebody. I'm right here. My team is right here.

Naveen: Yeah. There's no getting hold of somebody. I just go in and talk to them. You don't have to schedule a meeting. You don't have to get it on the calendar. All of that bureaucracy that comes with a larger organization — we intentionally suppress it, and we intentionally keep it to an extremely low minimum, to none.

I want to close the episode by repeating the bottom line on the way out. The AI race went political. We all know [00:23:00] about it. Midterms are being fought on those agendas. And underneath all the politics, if you strip it away, it went physical. Manufacturing capacity is the limiting factor. Like we said before, money can't cut the queue. Every path runs through a factory that's already sold out — sold out till 2030, sold out till 2032.

So that makes this a manufacturing race. And a manufacturing race is won by the whole bench. The giants have to play a role. The niche manufacturers have to play a role. The small shops have to play a role. We're all in it together. Speed to market and the pivot — that's where we come in.

Eric: Technology's changing every day. And right now you're worried about the power. You're worried about the water. You're worried about this other portion of it. That's gonna change. And they're going to adapt. And they're gonna retrofit. I mean, the small fusion reactors are coming. And it won't be long.

Naveen: SMRs, yep.

Eric: SMRs are on the way — five years, 10 [00:24:00] years. The power grid will have to catch up, so we're gonna have to make advancements in that as well. Water systems, same thing.

Naveen: You can see how much VC money is getting behind all of these.

Eric: Yep.

Naveen: So you can see these problems will get solved. We're not there today. That's reality.

Eric: But they will catch up.

Naveen: Yep, definitely. With that — thank you all for tuning in. We'll catch you in our next episode. Have a great one. Stay informed, stay protected.