Top Shops Benchmarking: The Numbers That Separate Leaders from the Rest, Ep #27

So at its highest level, top shops is that annual visit to your primary care physician. What top shops does is it gives you that blood test for your business. You can start to make priorities or action items. That's where you start to see real success. Hey, Metalworking Nation, Paul here. The countdown is on for top shops 2025, and I want you to be there. It's happening on November 11th and 12th in Charlotte, North Carolina at the NASCAR Hall of Fame. The best of the best in the machining industry will be all in one place, sharing strategies, best practices, and leveling up together. And optionally, come in the afternoon of the 10th to visit Roushiaid's manufacturing solutions and see one of the most incredible machine shops in the world. If you've seen my videos of their shop, you know how amazing it is. That tour alone is worth the price of admission. Nick, Mike, and I will all be there and we want you in the room with us. Registration is officially open now, and the team at Top Shops has graciously offered listeners of making chips 20% off the registration price. That's $200 or more off with code MAK20. So go to topshopsevent.com, grab your spot now, and I hope to see you there. Welcome to Buy the Numbers. Each week, we'll explore the numbers that drive your business, from accounting and finance to operations in the exciting realm of mergers and acquisitions. Whether you're a seasoned veteran or just starting out, our discussions will equip you with the insights and strategies you need to rein in the power of data to elevate your manufacturing company. Let's crunch some numbers. Dave, welcome to Buy the Numbers. Mike, thanks for having me. Excited to talk with you. It's a great way to start the week, for sure. Well, I'm super excited to visit with you. We were both in India a few weeks ago at the Automated Shop Conference, which was a tremendous show. I listened to your speech and your presentation. It was like, "Okay, I gotta get this guy on here." So Dave, why don't you tell everybody a little bit about who you are, what you do, and then we can talk about what we're going to talk about. Yeah, absolutely. So my name is Dave Necessary. It is my last name. I get questions about it all the time. I encourage everybody out there to have a good time with it if they do run into me. I'm with Gardner Business Media. We are a fourth transitioning into the fifth generation family-owned media, marketing and market intelligence agency. We were founded in 1928 with the introduction of modern machine shop and have grown over time to support a number of different process verticals and media brands and live events and certainly market intelligence, which we'll talk about today. It's unfortunate to be with Gardner Business Media for 22 years now. My original background is in brand and product marketing. But over the course of the last 10 years or so, I've really worked on the digital transformation side of our business, starting with audience development and product development and more recently working across all of our surveys, market intelligence and market research, which kind of leads us to where we are right now. My current role, I'm the executive vice president of products and markets. So we work across all of our verticals to make sure that we are providing our audience the most up-to-date, the most insightful, and the most useful data and intelligence to help run their businesses. It's a part of our business that we continue to see both growth in, but certainly also engagement and really positive feedback from owners and operators and managers and engineers at different discrete parts and durable goods, manufacturing facilities. Modern machine shop, I don't think probably needs any introduction to my audience for sure. I don't know if I've ever been in a shop that there's not a copy there to look at. Well, specifically, and my listeners, of course, shows called by the numbers, and you might figure out I like numbers. One of those numbers I love to look at, and I've talked about this before, is benchmarks. I'll play off your name and say that this is a very necessary conversation to have. So at the show, you were talking about some of those clear differentiators between top shops out of your survey and then, quote, other shops, right? And, you know, just to put this in context for listeners, if they haven't heard me talk about this before, either on this show or making chips, give me an example of my experience with top shops. You know, I bought Hill Manufacturing in 2018. A few months later, there's a Modern Machine Shop Magazine sitting on my desk encouraging shop owners to fill out this bench-marking survey. So I did, and I don't know, you know, weeks later, I get back to this customer report that shows me against everybody else that filled out this survey. There's a very clear line and a lot of these show you get your value versus the rest of the industry, or the rest of the people that have replied. There's a lot of things that clearly delineate between top shops and other shops. Not that the other shops are bottom shops, they're just not top shops, right? I looked at that. We were clearly not a top shop based on, or they, you know, that previous year of ownership and, or the, you know, 40 years prior ownership. And it set off some tones for me of where I should be looking as I come in to try to improve this company I just bought and actually set that year kind of a five-year strategic, like in a, just kind of a side goal on a five-year strategic plan that, you know, if I fill this out in five years, I want to be a top shop. So anyway, we continue filling it out every year. I think 22, so four years in was maybe the first year that we achieved top shop. We had it every year since. And I continue to use that bench-marking report to see where we need to be going to make sure that I'm still performing at the top of my game. And there's so many different areas to talk about there. But yeah. And that's kind of what we want to talk about today. I think we want to, I think you've got a handful of data points that kind of clearly show where top shops are maybe spending money or doing certain things, having certain processes or technologies in place versus the other. And I think a lot of those translate all the way back to, and we'll get to it in here somewhere. But there's also a clear delineation between top shops and other shops just in profit, marketing. 100%. Right. And all of these things feed that. Yeah. And from what I can see. Yeah. So, so just some quick background on the, the history and the methodology of the bench-marking program. Because I think it helps inform, you know, some of the insights that we're seeing over time. We acquired top shops back in 2011, 2012. So we've done the report in the CNC machining and metalworking industry for 13, 14 years now. So over that time, we've had over 3,500 different businesses that have filled out the survey and, and given us data. And it's a really, you've taken the survey. So you know this, it's a really detailed survey that asks questions in four primary categories, machining technology. So what types of tools and technologies are you using? Shop floor practices. So what are you doing on the shop floor strategically or process-wise? Human resources. What are you doing with your people? And then lastly, business strategies. How are you running your business? And each year we take the responses that we get in a given year. We score all of that data on a set of key metrics. And the businesses that return across all of those key metrics in roughly the top 20% are designated or deemed top shops. The remaining shops we refer to as other shops. And then we publish a report that shows where the top performing shops perform and report in comparison to the other shops, which is really, really valuable. And it's available for anybody whether or not you take the survey. I think the real kind of secret sauce value in the top shops program is that if you do take the survey, not only do you get that benchmarking standards report for free, but you also get to your point, Mike, a detailed individual summary that shows how your responses specifically compared to the top shops and the other performing shops. And it also gives you a detailed metric summary on where you're in the top 25%. So places where you're strong, places where you're in the 75th to 25th percentile, so where you're kind of on track. And then for a lot of companies, most importantly, where you're in the bottom 25%, where you really maybe need to focus on improving. And to your point, I think we found over the years that a lot of those that take the survey, they take it every year and they like to see where that progress is, is taking shape, not just on the floor, but within the numbers as well. And we do top shops not only in CNC and CNC machining and metal working, but also in plastics processing, specifically in injection molding, in composites fabrication, and then also in products or parts or metal finishing. So we've got a ton of data and I'm excited to dig into maybe five areas that we see as the most consistent in pointing to those shops that are having more success across all of the elements of their enterprise. And before jumping into those, I'll note that one of the things we did back in 2022 in preparation for presentation we did at IMTS was we looked, we looked backwards 10 years and said, are there specific areas over a 10 year period of time that have historically and consistently pointed to or served as indicators of top performing shops. And the five that we really highlighted and we can dig into these a little bit more deeply, number one was the way that they invest in capital equipment, not just as a dollar amount, but as a percentage of sales. And I think that second one is a really important one. Top performing shops consistently, historically over time, invest five percent more of their gross revenue into capital equipment as a percentage of sales. And we can talk about some of the machine types. The second one, and we can dig into this more too, is the way that they think about marketing and promoting their business, whether it's across traditional channels or digital channels or in person. The third and the fourth are really closely related to each other. Building a certainly one that we see a lot of different tooling practices and processes that are clearer indicators of top performing shops, I think a lot of that has to do with the fourth one I'll mention, which is their investment in automation, not just within the machine, but all the way around the machine and the way that they're thinking about data, software, robotics in process, and then post-processing. And then lastly, as people, the way that they think about their people, whether it's training, optimization, compensation, recruiting, anything that they can do to create a sense both of motivation and community amongst their workforce. Those are the five differentiators at a really high level that we've looked at, and would like to hear from your experience, are there things within that that you as an owner and operator of a shop have made a little bit more of an emphasis and then we can dig into some specific areas? Yeah, so to put a few things you said in context, just for people that haven't seen the report, what's great is when you guys present that information, how you show, there's kind of two bands for every item, right? So there's the top shops and then there's the other shops and your dot fills fit somewhere in there. But then you do a great job of then showing that statistical range of the top shops and the other shops. And I think where people can get a lot of value out of this is where there's a clear separation between those bands. Some of the items when you go through is like everybody's kind of the same, top shops and other. And then there's the ones that are just clearly differentiating. And the other thing to maybe point out, because I know we talked about this a few months ago with Brent Donaldson from Modern Machine Shop on a making chips episode. And then we had comments, or I had questions coming to me like, hey, should I do this though because I'm so small and you just mentioned in there that, you know, a lot of these are as a percentage of sales. And so it really does normalize. It doesn't matter if you're a three machine shop or a hundred machine shop percentage of sales is percentage of sales, right? And it's not skewed to being, you know, the larger shops and we obviously spend more. So it's not, it's not just good to spend more on capital expenditures. It's what's the percentage of sales. Right. And so, so just as people are listening to that, you know, I want to keep that, I want everybody to keep that perspective that the things that we're going to talk about are, they are very relevant to your shop, even though you may feel like you're too small or something like that. But they, you know, I'll tell you one of the first things I saw that we were, we were a real laggard on. And I think it still stands true in today's report. I can't remember exactly what my number is versus the norms. But the, the two that I remember sticking out to me in 2018 was revenue per employee and revenue per machine. And I, and I think both of those speak to four and five that you just mentioned in your list, right? It's how you treat your people, how you doing. And then automation and efficiencies are going to, so those two things are going to boost both those numbers. And I do remember those two things probably standing out as the biggest differentiators that we had. Yeah. Not, maybe not the biggest, but they, but they certainly stood out as like, oh, there's people doing this a whole lot more efficiently than I'm doing this. Yeah. What's been your experience on those points? So, so first of all, really appreciate the comment that the top shops is something that has benefit regardless of the size or the scope of your shop or where you're at in your shop's development journey. Like just getting started is the best place to get started. And, and then specifically to that point, you know, that's one of the reasons why we're really careful about using percentage metrics in addition to like dollar amount or high level performance metrics, because regardless of your size, how much of your revenue you're reinvesting in your business, what's your revenue per, per employee, what's your revenue per machine, what's your profit margin? Those are metrics that are relevant regardless of the size of your shop. But to the point of increasing those two things, I think more and more, if we're looking at really big themes that continue to take a louder voice in top shops, it is how our businesses finding ways to reduce human capital per part and in so increasing the revenue per machine and the revenue per employee. And we just, you mentioned the automated shop conference or task as we call it internally, which we just had an Indianapolis. And you know, my portion of the presentation was just talking about what are those automation strategies that top performing shops are practicing more in order to do that, to become leaner, more efficient, reduced cost and human capital per part. The biggest pieces of that are the machinery they're investing in. So we see a lot more of the top performing in shops and investing in horizontal machining centers. From a tooling and workholding standpoint, the two biggest differentiators are the application of palette changers and tombstones on the tooling side of things, both in process and then around the machine. So the use of through tool coolant delivery, the use of high pressure coolant, tool inventory management, toolbending systems, tool pre-setting, things like that. And then, you know, without getting into the overall practice of things, the other one that starts to jump off the page more and more year over year is the investment in ERP, MRP, MES, things that are allowing them access to data across the enterprise that is proving out the effectiveness of it. So really thinking about that total automation integrated system. From a practice of standpoint, the two things that we see more and more and the adoption curves continue to get wider and wider, the gaps get wider and wider are top performing shops investing more and being able to run lights out, unattended or unmanned. And kind of a sub topic of that is the use of robotics for just machine loading and unloading or machine tending. Those are two areas where we just continue to see both more adoption but also more investment. So I think that answers most of that, most of the question there, yeah. Yeah, and yet to summarize, and as I go through the report every year, because you get down pretty detailed in a lot of areas and I love it. I look for a culmination of, you know, what are these statistics that are going to, there's 20 things in the report I can do to fix this one. So like you just mentioned, you know, if I'm improving my work holding and my tooling and maybe some robotics, you know, some some some sort of automation load unload the machine, I'm now making more revenue per employee, right? Because I'm making that employee more efficient, more productive. If I make that machine run 12 hours a day, set eight or 20 instead of 10, my revenue per machine has gone up, right? So, and you know, interesting. I don't want to forget to say this. I don't know if this is the right time to say it. But as most my listeners know, you know, I bought my first shop in 18 and I've bought on average a shop every year since. And it's actually in my valuation form now. I have some of these key metrics that I run against the companies I'm looking to acquire to help me determine the health of what I'm adding to my portfolio, right? And, and if they hit all those things as top shops, I know my multiple that I'm going to have to pay them to buy that shop is actually going to be higher than if they're not hitting any of that, right? So there's a lot of things in here. I mean, I would again, since I know I have a lot of listeners that are kind of in the buying or selling a shop stage, these topics should be incredibly important to you too, because you want to know what's what's good in the industry and what's not as you're, if you're selling, trying to increase the value of your shop, if you're buying, trying to determine the value of a shop you're interested in, there's a lot of value in this report as well. So anyway, as it, like I said, kind of a side note there, but I didn't want to forget to say it. And you're not alone in using the data that way. And we get groups that are in the investment community who are interested in these metrics too. And, you know, just to put some numbers to it as it relates to efficiency, these are things that we always monitor and report when we're talking about top shops, but, you know, those top performing shops who have a higher propensity to invest in things related to automation and efficiency, we always look at machine hours per day, right? And the top performing shops on average are machining for more hours per day. We look at capacity utilization, those top performing shops on average, 12% higher capacity utilization. We look at, you've already mentioned revenue per machine and revenue per employee. We look at profit margin, right? 10% higher profit margin amongst those top performing shops. And then not surprisingly because of it, you know, they have a higher customer retention rate. It's about 7% higher top performing shops over other shops. So what we try to do, I think to your point, Mike, is we look at the high level metrics we look at the areas of differentiation. And then for those that take the survey, we match where you are already investing in those points of differentiation and where you're not. And based on where you're not, those are the areas that you focus. And these are the metrics that you or the results are the outcomes that you should expect as a result of making those graduates. investments in areas where maybe you don't currently reflect what a top performing shop does. And so it gives a nice way to say, here's the high-level theme, here's the more specific process or technology, but here's the way you should be benchmarking the performance to make sure that you're getting out of it what you're putting into it. And that's why we do it year over year. And that's a lot of the feedback that we get as well. You just remind me too, some of these metrics because they have become important to us because we recognize they make us better. They've actually become part of our KPIs that we track even within our ISO audit. I mean, those are because again, they're broad indicators. You know, if we're making a lot of the right moves beyond just our on-time delivery are scraperate, right? And there's other things that our broader health of the company takes. Yeah. And, in fact, with that said, share your analogy of going to the doctor. I think that's such a great thing everybody can understand. Yeah. Sure. So people always ask about, like, put top shops in non-technical terms. And I tell them it's very much like going to your primary care physician for an annual physical. And the primary care physician tells us all these things that we know we should do. You know, we should get more sleep and we should have less stress and we should exercise more and drink less and eat healthier. And we know we should do all of these things. And it can be a little bit overwhelming to do all of those things. The real benefit in taking the survey is it's really like the blood work that you do ahead of time, where at pinpoint specific areas where, of course, you know, you can do 12 things at the same time to try to get healthier. And that's overwhelming and unattainable. But if you dig into the results a little bit more deeply and identify one or two things that you can start to make priorities or action items, that's where you start to see real success. And that analogy has always worked. And I think it frustrates my primary care physician because I don't do many of the things that tells me to do. But I'm really good at standing on stage and telling other people what they should be doing. But ultimately what Topshop does is it gives you that blood test for your business. And we do it as a service to the industry. We don't really charge anything for it. So I think it's again, one of the reasons to just get started and see what kind of results you get and then continue to improve over time as a result of it. Another observation I would make and actually I'm kind of scrolling through my report right now. And for example, when I talked about these clear differentiators between Topshop's and AirBales, you know, we all know people are our most important asset. And we want to we want to retain them. Yeah. We want to train them. We want to do lots of things. And I know there's lots of shops out there that their differentiator is their employees. Right. And that's probably I guess that's probably a general statement for every business in the world. But you know, if you were to rest your entire shop reputation on the fact that your employee turnover is low, I'm looking at the employee turnover right here and the bands between Topshop's and AirBales are identical. Yeah. That doesn't make you mean it's clearly important. And I don't think I mean, I certainly am not going to argue that it's not. But it's not it's not a differentiator between the Topshop's and AirBales. Right. Their experience really isn't either. I mean, when you look at the bands, I mean most of us have, you know, it looks like, you know, 10-year-on-average experience. Now, we just start to separate for sure. I mean, that's where you start to see those bands separate certainly across the board, whether it's on the floor, programmers, you know, for engineering. But I think again, I think a benefit of the report is just to see I can certainly tell you from my personal experience. We feel we're really good at some stuff that, you know, looking at this report, I would tell you everybody's really good at or there wouldn't still be in business. Yeah. Right. So I don't want to rest on that. I want to, how do I get better? And you've pointed out several, you know, and once you get past some of those personal numbers in the report, I think is where it starts to get pretty interesting too. I'd love for you to touch on some of the, yeah, you know, you'd test on this earlier as far as types of machining, types of tooling, types of strategies and softwares and stuff like that. What are some differentiators that you've seen, you know, in the last few years where the top shops really just pop out there just, and they're investing in things that the other shops are not. Yeah. Well, I mean, let's talk about too that we don't, they don't come up enough. You know, you probably attend a lot of industry events. I attend a lot of industry events and we talk a ton about technology. We talk a ton about process. We'll start with people, right? So, you know, you brought up the point, when we first started presenting top shops, I think there was an assumption that top performing shops just pay people more and keep people longer and that's not the case, right? What we're seeing is differentiators and human resources are top performing shops are more creative in the way that they attract people. So bring in new people and then the ways that they invest in continuing to improve and train them, right? So it's not just kind of keep the same people around. It's, can I find newer people that are aligned with the way that my business is growing and they do that through cross training. They do that through more formal leadership programs. They do that through investments in on-site and off-site training. So there's certain things in terms of the way that top performing shops are thinking about acquisition, training and retention of people versus just, can I keep my people and pay my people more, whatever the response is? You know, I'm looking at at a 2024 report and some of the biggest gaps are from an HR program standpoint, leader, supervisor development, formal training program, presence of cross training and then a review and raise program. Like those are areas where there are clearly big gaps and I think that speaks to, you know, these facilities or businesses thinking a little bit outside the box and the people that they're acquiring but certainly thinking even even further outside the box in the way that they're cross training and developing them so that they're aligned with the way that their business is growing. Like I think that that's a really interesting one. The other one that that honestly we've seen even more of a spotlight shown in recent months across all of our data is the way that top performing shops are investing in marketing their business, looking for new customers in different regions or in different markets and then investing in quoting, estimating and customer acquisition and some of the ways that they're doing that is one is they're investing in technology. I think more and more you've got automated or smarter quoting and estimating applications that people are using but things that we see top performing shops investing more in they invest more from a marketing standpoint in video like they do tours of their shop, they do kind of voice to the customer types of things and they invest in both traditional digital and in-person marketing and all of those things are things again. It's like losing weight and sleeping more and going to the doctor. You know, a long time ago it was, you know, I have a website and have salespeople. Now there's more of an investment of how am I actively telling my story to the market. So that's that would be a second. The first one is human resources and some of those specific things that I mentioned. A second is marketing in the way that shops are actively thinking about I need to do more to tell my story and to talk about things that appeal to both existing but also different or new customers that I can acquire. The third thing I think closely related to that is and we again see this across all of our data is businesses that are investing in adding capabilities so that they can either manufacture a machine for a new market or they can provide additional customer value. An example of that that we've seen a lot is facilities investing more and more in post-processing and finishing so they can deliver finished parts to customers and there's a little bit of an upsell. There's a little bit of a added value and so we see instances like that where we're taking care of our people. We're trying to drive more interest in our business and we're looking for opportunities to add capabilities so that we can expand who our customers are and how we provide value to them. So those would be three that I think we continue to see more and more of not just in top shops but in some of the other market research and survey we conduct. Bella's hey why I got you both real quick so I'm really trying to drill in like our work holding options at Hill and all of our shops. Any advice? Mike it's as simple as Razram. As what? Razram you've never heard of it? I have not. All. What Nick is referring to is the seven habits of highly effective work holding. That makes more sense. Reputability, accessibility, scalability, reliability, adaptability and modularity. If you want to find all of these principles in one catalog check out the SMW AutoBlock catalog. You can find it at SMW AutoBlock BLOK.com. Thanks fellas. Those are such excellent points and those I guess not even thinking about it. I mean those are certainly the three areas that I'm focused really. I mean those are you know we've seen our customers want more and more turnkey solutions from us right they don't yeah they they want us to handle the whole thing so either yes we have to bring some of that in house or we have to have really really good outside process partners and we're certainly looking at bringing more and more of like maybe finishing or something in house and you know to your marketing front probably a huge element that. of that there were, you know, there's internal and external marketing as well, right? There's, who do we tell our employees that we are and who we expect to be and then same with our customers? And sometimes those messages are slightly different, but I think to retain those, you know, like I referenced that we're all retaining employees on a similar rate, right? There's probably just a different, but which employees are we retaining, right? And the top shops are probably retaining those ones that are getting cross-trained and, you know, all those things that create additional value and the other shops maybe are turning through those a little bit more. But we still all have a, you know, similar turnover rate, but if I don't have all those HR practices in place like you talked about, my turnover might be my best employees versus a shop that has all those HR practices you talked about. Their turnover is their employees that don't fit that mold. Yeah, for sure. You know, certainly, and you know, you covered a lot of this at a task a couple of weeks ago, but, you know, one of the things that I think has stuck out in the report for several years has been automation. And I think that's probably worth touching on, but it seems like there is a clear differentiator there as well. Your shop needs automation to be a top shop. Would you agree with that overall statement? Yeah, 100%. And, you know, we talked a little bit about it earlier in the discussion, but, you know, when we really started looking backwards to see if there were really consistent indicators that defined top performing versus other, one of the first ones that we looked at was, are you able to run some level of unattended lights out unmanned, right? So from just from a strictly process standpoint, is that part of your business right now? And, you know, top performing shops are 20% more likely to be utilizing some instance of lights out unattended or unmanned. They're machining more hours today because of it. They're freeing up people to do other things because of that. So I think that that was the first place that we looked. The second place we looked is, is there some sort of difference or indication in those that are leveraging robots simply for machine tending, right? To automate that part of the process. Again, 20 to 25% higher likelihood that top performing shops are utilizing that. I think where it gets interesting is the two things that we see, which is what are the other technologies or practices that you're leveraging throughout the rest of the enterprise to inform that automation and then ultimately what are the metrics behind it. And so, you know, how are shops using automation? They're using it to machine more hours per day. Perhaps the biggest we see is they're using it to address the skills gap or the human resources issue. Sure. And then the third is they're using it to find ways to be more efficient and more profitable. And, you know, I shared earlier some of those. What are the machines that they're investing in? What are the tooling practices that they're investing in? What are the work holding practices that they're adopting? And then ultimately, how are they using software and data to inform it? So I think what we've seen over the last couple of years, and I kind of joked at the automated shop conference, one of the things that I think is really interesting about top shops and I won't share too many of them or any of them. And this conversation is not only do we ask for data, but we ask for verbatim feedback. We ask the respondent to tell us in their own words, what's the strategy that's making a difference in your business or what's the one thing that you're investing in in the coming year? And I read a lot of them at the automated shop conference and some of them are more detailed and more specific, but we get a lot of responses that sound like this. Robots, automation, unmanned, lights out. So there is clearly a continued focus on finding ways to bring more efficiency and more automation into the production chain, whether it's a really, really small independent facility or a much, much bigger and more complex facility. Yeah, and listeners, I'll rattle off a few things here that in Dave time in anywhere you want. We all have about the same machines. When I look at machine types, there's not a whole lot of differentiators. There's horizontal mills and mill turn multifunction is probably the only place. There's a differentiator. Machine strategies, the thing that really sticks out is clearly lights out. Yeah. A little bit of four axis, other natter, but everything's pretty tight. Sooling starts to differentiate a little bit, but in some areas, I mean, that's going to probably be as limited by your machines as much as anything, but certainly tool inventory management, shop floor vending, some of those strategies really start to play into their golly materials. Their dots are almost on top of each other in every section. My point is in a lot of those areas, we're all doing the same thing. It's how we're doing it, right? So, correct. What I would tell people just from my own experience, I'm going to go to the next section and talk a little bit about, I have a lot of spindles and I have several older machines. One of the things I've honestly following the lead of the top shop, spinch marks, I started looking at it, okay, I can't replace all my spindles. I can't have all new machines. I can't. But what can I do? Again, some of the things that stuck out, how can I start automating some of those machines? So whether that's some sort of robotic load unload, whether that's as simple as bar feeders and stuff like that. But one of the biggest areas I saw and still holds true today is in the work holding. If you look at the work holding, bench marks, there's a pretty good 10% gap I'd say on average with different work holding strategies. So whether that's multiple work pieces, tombstones, pallet changers, again, some of that's going to relate to the type of equipment you have. But point is, listeners, we're not sitting here telling you, you've got to go spend millions of dollars and on equipment to be a top shop. We're not telling you you need to pay everybody more, which obviously we need good salaries. But it's not just about money. It's where you spend the money. So a lot of that capital investment, one shop buying one new U-Mill could be a huge percentage of sales, but that may or may not really differentiate you and make you better versus what you're doing, maybe with the equipment you have. So the people that are running it, the way you're doing your work holding, the way you're doing your programming and tooling and all that, there starts to be more different shares there that I think everybody can learn from and improve from. Yeah, I think a couple of things. One, and I shared this at the task conference, is we started asking more and more questions about tariff responses. And one of the things that we've seen is there's a little bit of the decline in those that are indicating that they're going to spend money on new machines, but there's a big increase in those that indicate that they're going to spend money on retrofitting existing equipment. And so they're going to invest in controls or drives or motors or robots to take some of the things that they have now and make them more efficient. But I think to your point, and I will read just one verbatim really quickly that we got from a respondent in 2025. And I think this speaks to the point that you made that we don't suggest people go out and spend money that they don't have or just spend money to spend money. I think that one of the things that we see in the top shops verbatim is the mindful approach of this is a process, and we're going to continue to identify the specific areas that we can invest in to best impact that process. So this was the first question here is, what, if any types of machining or manufacturing capital equipment does your shop plan to purchase in 2025? And the first response that I read was, we plan to add one co-bot bringing our total to six, our investments in 2025 will be focused on additional automation. And my point there is like, they're not going to go out and buy six co-bots right away, but they're slowly looking at what's the return that I'm getting on my investment and then adding to that or mapping out where those investments are going to be over time based on what makes the most sense for their business. And in some cases, based on the results that they see of the survey that we provided them or the data that we turned around to them. And the responses are across the board where we see people say, I'm investing in a non-contact video, CMM or a five-axis mill with robots. Very rarely is it, I'm going to buy all these things and completely revolutionize or change my production, right? But they are saying, I'm targeting specific areas where I'm going to make a strategic investment based on where I'm stronger week. One of the things I've told people where I've spent a lot of my capital and expenditures over the last, I guess, seven years now, almost eight years. And I've got a mix of new machines and old machines, a lot of my growths come through acquisition. So when I acquire a company, it's got a mix of old machines and new machines. But one of the things I found is through automation, through workholding, through tooling technologies. I'm able to kind of breathe new life into old machines for just a fraction of the cost of replacing machines. And you pick up those efficiency gains and you're upskilling your people and you're cross-training them. All of those things, again, I think they go back to what are some of those big indicators. in this report that move a lot of needles, right? If I focus on revenue per machine and growing that, I'm gonna have to move a lot of the other needles to get there, right? And that's probably, to me, that's been the beauty of being able to utilize this as a benchmark is to be able to see what things can I change to modify some of these bigger metrics that I've proven to be very important and beneficial to me. Yeah, and that's why we provide the individualizer, the personalized report, and that's why it's broken down into those areas where you're strong, where you're on track, and where you're weak is, you know, I'm sure even in years where you returned as a top shop, there were areas where you were behind the rest of the survey universe, and I think that-- For sure. You know, if there's an interesting takeaway for those that are listening to the conversation is, we provide data on a ton of different metrics and on a ton of different strategies and in a ton of different processes. The real value is in being able to identify those strengths and weaknesses and make your strengths stronger and improve your weaknesses, because there's areas where really poorly performing shops are doing really well, and there's areas where really well performing shops are doing a little bit behind the curve, and that I think ultimately is the value in being able to establish this bar and saying, "Are you above it or below it?" And what do you do about a specific area where you are surprised that maybe you're a little bit behind the competition, and then doing a little bit of analysis to understand, is that a place to invest or not? The way I would sum up my mindset, based on what you just said, is-- And I should go look at this, but what I would tell you, you know, so again, I think our first time that we were designated versus today, and I think if I went back and put my 2022 results in today's survey, I would not be a top shop. And I think what this survey does just reminds me that, you know, world class today, five years from now is what everybody's doing, right? I mean, it's the entire enterprise version of continuous improvement, right? Like, where do I need to continually be improving myself to stay in the top shops banned versus the other shops banned? Because I'm fairly certain that if I went and reported the same stuff this year that I reported in 2022, I would not qualify as a top shops. And that's just how the industry evolves. And, you know, it's kind of like, I saw an incredible stat not too long ago about, I mean, I'm sure a lot of people are familiar with like the Inc. 5000 fastest growing companies. I think it's that report. There's something like 30% of them don't exist in three years. Right? I mean, like if you're not staying on top of your game, you just fall right off the radar, right? Like, so this isn't like, do it one time. Like, okay, I got there and you can rest at that. Yeah. The industry is rapidly changing. Technology's rapidly changing. The demands from customers and employees and everything else is rapidly changing. And for me, this is that annual visit to the doctor to just make sure I'm staying healthy. Yeah, 100%. That's why we do it every year. And that's why we provide it as a free service. And would encourage anybody out there who has questions about it. Just take a look online. The survey is always available. And there's a ton of great data out there for people to use and to share. Yeah. So to wrap this up for everybody, let's talk real quickly about kind of the process. So we've already missed the opportunity to do it this year. So that usually opens up what's sometime in February, March timeframe. Yeah. We technically, not a lot of people are itching on January 1st, after New Year's Eve, to take the survey. But we technically open it right about the first of the year. And it stays open until the end of the first quarter of the year. So sometimes we keep it open a little bit longer. But usually January 1st through early April is when we see the majority of the respondents. And the report to come out, what month, the two months later, something like that, something like May, probably. Yeah. A little sneak preview for your audience. We're working on some technology now to not only get the results back more quickly to respondents, but also to make it more interactive. So they have some different ways that they can interact with the data. Right now it's more of a static report. So we're going to continue much like we encourage the top shops too. We're going to invest in continuous improvement on our own to continue to make things better. Nice. And then, you know, so now fast forward to, you know, August September timeframe. I mean, you know, I've had my data. I've been up and look at it. I've gone over with my team. We've made plans for the year, you know, based on that. But what I'm, but kind of the next step in this process that I'm super excited about is in November, we've got the top shops conference coming to Charlotte at the NASCAR Hall of Fame. That's right. So tell the listeners just a little bit about that conference and, you know, why they might want to attend that. Yeah, it's a great event. We launched the modern machine shop top shops conference back in 2017. It was originally hosted in Indianapolis, Indiana, included a tour of major tooling machine, which is a great contract manufacturer in Indianapolis who has been designated a top shop in the past. The event is, it's part conference, part exhibit hall, and then obviously we do a ton of really cool networking type things or different entertainment type experiences. Being able to host the event, Charlotte's awesome, because not only were we at the NASCAR Hall of Fame, we're taking tours of some different manufacturing facilities nearby. Which includes Roushiait, I believe, right? Roushiait's, and we're also visiting the motor speedway as well. So there's some really interesting stuff. Those will be fun. It's either Roushiait's or I should know this, because I will be at the event. But the program has just recently been announced. It would encourage anybody to, or everybody to go visit topshopsevent.com to check it out and see some of the things that we have going on there. I think one of the things that's really interesting about the top shops conferences, yes, we do a deep dive into the top shops data. We also do panel discussions and round tables with current and future events. Current and past top shops. So it's really, we always talk about this program as four shops and buy shops. So we try to highlight as many actual owners, operators, engineers, managers, as part of the program, so that they're sharing first-hand accounts of what's working. And they're there to be able to answer questions based on anything that the attendee base has about things that they're hearing in the conference. So it's a little bit more one-to-one, it's a little bit more interactive and discussion-based. But we cover all four of those primary categories that I talked about earlier. So in addition to looking at the data and honoring this year's honorees and having first-hand accounts from top shops, we do specific dives into machining technology. We look at shop floor practices. We get into specifics around human resources. And we also look at business strategies. So you'll see HR people presenting and marketing people presenting. And machining technologists presenting and also business strategists presenting as well. So it is really a 360-degree one-stop shop for shop business improvement, regardless of where your specific need is. Yeah, and if all of that is not enticing enough, my Macon chips co-host Paul Van Miran, I will be speaking, which might be worth the trip in itself. I don't know. We've already got big feedback about you guys. People are real excited. Yeah, I'm a fact our whole making chips crew will be there, Nick will be there, I'll be there, Paul will be there. We're super excited about being there this year and participating. I've heard from several of our listeners that are playing on being there. Yeah. And I think it's going to be a really, really great conference. It's a really cool event. Having had the opportunity to work on the launch of the conference and then also attend and participate in it each year. It's really interesting because you get so many like-minded businesses. It's one of the things that I've always really appreciated about our industry is, yeah, at some level these people are competitors, but at the same time they recognize that they're also peers. And that by exchanging information, we make all of the industry better. And so it's some of those exchanges that you see that make this event really, really unique is you see business owners talking to business owners and operators talking to operators about really practical or tactical things that they're having success in. And they're open to share that. And that in term makes everybody a little bit better and a little bit smarter. So it's a really focused event. It's a really unique event. And I think lastly, and I think all events should have this word in it. It's a really fun event too. Yeah. Because we do really good job finding ways for people to connect outside of the classroom or the exhibit room or the reception area. So would definitely suggest people checking it out. Topshopsevent.com, it is in Charlotte at the NASCAR Hall of Fame, it's November 11th and 12th. Dave, we talked a lot about the business market report. And if I didn't fill out the report this year or the study and get my individual report, but I want to see this. Can I get my hands on it? Yeah, 100%. So one of the biggest benefits to take in the survey, obviously, is you get your own personalized report. For those that don't and want to dig into the data that we've talked about today, we have what we call the benchmarking standards report. It compares all of the different areas that we survey and breaks down top performing shops versus other shops. It's available on our website, Gardenerweb.com. I mentioned Mike to you that, as a thank you to you, but also to all your listeners, if anybody out there wants to come in, is interested in it. There is a fee attached to buying and then downloading that report, but if you want to reach out to me directly and talk about top shops and if you're interested in the benchmarking standards report, just contact me directly and I'll get a copy for you and we can talk more about the benefits of the survey and the way that you could participate in it. Well, in listeners, that's incredibly generous of Dave and I would certainly encourage you to shoot him a note because that's a $900 survey, right? Correct. Yeah, so there's value there and I mean we've talked about the value. There's also a dollar value to it. Yeah. That Dave is making a very, very generous offer and I would certainly encourage you to get your hands on the report. So Dave, if they are going to reach out to you, what is the best way to connect with you? So I always joke, I'm the only Dave necessary, I think, on LinkedIn that looks like me, but your listeners can't see me right now. So let me give everybody out there my email address. It is Dave, DAV EN at Gardenerweb, g-a-r-d-n-e-r-w-e-b.com. So Dave and at Gardenerweb.com, I'm also really easy to find on LinkedIn. I'm definitely the only Dave necessary that works at Gardener Business Media. So I encourage you guys to connect with me and message me. It's a really easy way to get a hold of me, but don't hesitate to email me, don't hesitate to connect on LinkedIn. I love talking about this stuff and we love sharing data about this stuff. So the more feedback and the more participation we can get, it just makes us smarter too. So please don't hesitate to reach out. Let us know ways we can help. Well, and if for some reason you can't connect with him, holler at me and I will get you connected, for sure, because there's a lot of value there and I hope everybody takes it. There you go. Dave, thanks so much for being on the show. I think this was great. I really hope everybody got out of this, what I get out of it and has an opportunity to look at this report. And hopefully next year participate in the report if they haven't already. Yeah, if we don't see in Charlotte in November, January 1st, 2026, like, no, nothing cures the New Year's Eve hangover, like taking a top shop survey on New Year's Day right before you start watching football. That's right. I wait till 1201 and that's what I start on. All right, well, Dave, thank you. This was great. I really appreciate it. Awesome. Thank you, Mike. Manufacturers, what is your biggest headache? Is it measuring improving profitability, gaining efficiencies with AI and automation, maybe tightening up your cybersecurity, maybe getting your business ready to sell? At CLA, their goal is to know you and help you with challenges like these and more. 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