The Core Values and Culture of Okuma

Making Chips: We are live here at IMTS at the Okuma booth. You can hear the machines buzzing in the background. The energy is high and we are very excited for our interview today. Our guest that we have today joined Okuma in February 1991 as an applications engineer, and moved into the role of Vice President of Sales and Marketing in April 2011. He graduated from Berea College with a Bachelor’s Degree in Industrial Management and Technology. In his 20-plus years with Okuma, he has worked as an applications engineer, sales engineer, product manager, and sales manager. I’d like to welcome the Vice President of Sales and Marketing at Okuma, Tim Thiessen. How are you doing, Tim?

Tim: Good. It’s great to be here.

Making Chips: We also have alongside me my good friend, Jim Carr.

You’re going in to the interview and I’m like, “Yes, he doesn’t even want me to be a part of this interview. He wants to take all the glory himself.”

Making Chips: No, my sidekick, the Robin to my Batman is right by my side.

Making Chips: I don’t know about that. I don’t know about that.

Tim: Can I make a brief correction here? I’d like to state that I’m a lathe application engineer.

Making Chips: Okay. Great.

Tim: Because we kinda have a thing between lathes, mills, and grinders. I just want to make that clear.

Making Chips: You know, that’s funny because Jim always talks about how snobby he is as a milling guy so you guys should fight it out there.

Tim: We can go there if you want.

Making Chips: We can go there if you want but anyway thank you Tim for having us today. It’s great. Like Jason said, the excitement here at IMTS on the conference floor is amazing.

Making Chips: It is.

Making Chips: I know when we were doing our live show yesterday and looked out at that crowd and I couldn’t believe how many people were there.

Making Chips: I’m always surprised when they show up to listen to you, too.

Making Chips: Yes, I know. It’s amazing but it’s good.

Making Chips: No it’s been a lot of fun and I think that we had some great guests during our panel discussion and I’m really excited to release those episodes to the metalworking nation. I think we’re going to get some great response.

Making Chips: Right. Tim, it’s a great time to be in manufacturing and this show is nothing less than stellar. Day three, people are driving in to the parking lots right now. Describe the optimism of the people, your customers that are coming into the Okuma booth. What are they saying? What are they talking about?

Tim: First of all, I think we expected it to be a great show. The business has been really strong since January, and so we knew that there was a lot of opportunities out there. The one thing you’re never quite sure of last couple of shows, many of our customers say they cut back on the people they send. Sometimes they weren’t even coming to the show but with this year with all the business and then obviously, you’re looking at unemployment stuff. You know there’s a lot of new people in our industry. We’re expecting it to be busy. We expected if the customer’s going to invest in sending people and get them away from the shop, this would be the time to do it.

Making Chips: I mean the only thing I ever hear is people saying, and we know this is literally only one person, too busy to come.

Tim: Yes. I saw an update last night, 122,000 people.

Making Chips: They broke the record.

Tim: Yes.

Making Chips: That is incredible.

Making Chips: It’s exciting.

Tim: We’re only on Wednesday.

Making Chips: I just saw a stat that said machine tools sales are up 24.9%. Is that right?

Tim: Yes. We’re feeling it. We have a really wide breadth of product and we’re selling from every part of that product line.

Making Chips: Yes. I’m hearing anywhere from three months to 18 months lead time on machine tools.

Tim: Of course ours is better than others but…

Making Chips: Yes, absolutely.

Tim: It’s a challenge right now.

Making Chips: Tim, Okuma has developed a really strong company culture and that’s glaring when I talked to all of the people that work for your brand.

Tim: Yes.

Making Chips: We all know that a long-term successful company with strong core values are the ones that remain at the top of their game. Can you break down the Okuma tagline, “Passionately pursuing a customer for life.”

Tim: I sure can. We are a company that’s 120 years old and a lot of companies don’t make it that long and part of the reasons is because they are not willing to change. Our founder, Mr. Eiichi Okuma, made a statement that, “The criticism of one is more valuable than the praise of hundreds.” That’s something we have hanging on the wall and we’ve lived by for a long time. A few years ago, we were challenged a little bit by our distribution model versus a direct model. In the end, you just want to be as close to your customers as possible. That’s really a part of our culture. The other part is that we want everybody to be engaged. We want everybody to be able to have a passion about our industry. One of our values is called “owning it” and we look at that in all aspects of our job. Owning the relationship between the distributor and ourselves or our customers and ourselves, and it really is what drives a lot of the employees at Okuma.

Making Chips: One of the things that we always talk about at Zengers is we always talk about that we want to empathize with our customer. We always want to make sure that we are sitting in their seats, that we are there to drive profit for the owner of the company. You just recently wrote a blog post called “It’s Personal” where you talk about empathy. We do say that at Zengers a lot, with empathy being the cornerstone of what we do and I believe that every successful leader out there. I believe that Jim, the way he wants to run his company, the way I want to run my company is that we need to empathize with our customers. Tell me about that whole notion of taking it personally.

Tim: I think empathy can’t happen until you have some understanding, right? I just mentioned about being close to a customer, and so it’s not only understanding their machining needs but it could be they’re going through a transition of generational leadership and things like that. If we’re just talking about machines and not taking into account that there’s some management changes happening, there’s some supply chain issues that they have and what can we do to be flexible for them? What are the other things we can do other than just trying to sell them a product? Getting a better understanding of what their needs are and what their opportunities are.

Making Chips: What are some of those things that you can do to be flexible?

Tim: I think some of the thing is if the customer can share with us, “I think we’re going to do this six months down the road,” maybe we can align some pipeline of machines that configure more to their needs. It starts with are they comfortable sharing that with us, and we’re not going to come knocking on their door every day looking for that order. You have to build that trust and that understanding before you could start sharing that kind of information.

Making Chips: We do talk about that all the time at MakingChips, about how the, “It’s not your father’s machine shop anymore.” Things have changed and people need to be more open and transparent in their partnerships so that they can really elevate their business. Jim always talks about it at his shop, how his dad used to hide the prints, right Jim?

Making Chips: Everything was extremely guarded years ago.

Making Chips: Now you needed to be transparent. You need to have those tight partnerships where you can make sure that you are keeping up with the competition.

Making Chips: I think you have to have trust. You have to have trust in your employees and your communication, you have to trust in your vendors, you have to trust in your customers. I think that old school way of doing business has just completely flipped on its head in the last 10 to 15, 20 years. I know if my dad knew how I was running his business today he couldn’t believe it. One thing that I want to ask you Tim is do you have any statistics on repeat customers because what I’m seeing here is your culture, your core values that you’re instilling into the Okuma brand are so impactful and so powerful that you have to have statistics on repeat customers.

Tim: Yes.

Making Chips: What percent of the machine tools that you sell are to repeat customers?

Tim: My boss might kill me for saying this on public radio or whatever.

Making Chips: He won’t kill you.

Tim: I would tell you that we actually do measure two things. We measure new customers, we measure returning customers. New customers - right now we’re on about two to three year average of 25% of our orders are to new customers. Then we also have been measuring returning customers. The customer who hasn’t bought from us in five years and just bought again, that was what we would call – now we don’t know why they might have gone away from us. They may just not bought anything but we’re capturing that, “Hey, they’re coming back.”

Making Chips: Is that how you view as active customers, somebody that buys at least once every five years?

Tim: Yes.

Making Chips: It’s a major capital of investment. I mean it’s not like buying an end mill. We measure monthly or weekly.

Tim: Right.

Making Chips: People just don’t have the capital to invest in machinery like yours. It’s a huge big investment in capital equipment. They just don’t do it all the time. It’d be nice but yes it wouldn’t be. There’s something else that I see. Most of the people here at the Okuma booth, they’re wearing that passion button. Tell me a little bit about that. I love little things like that that make us question you.

Tim: Really that button is part of that tagline that you mentioned which is, “We passionately pursue a customer for life,” and we realize that we can sell a machine but at the same time, we want to follow that customer all through that cycle that they have. Like I mentioned, generational leadership changes and stuff so we can never take for granted their business and we have to adjust just like they do to continue on and build that relationship, keep that trust going forward. The passion is a key part because it speaks to our culture. Our people love this industry, they’re invested. We celebrated a number of our employees here at the show that have done 15 or more IMTSs.

Making Chips: That’s 30 years.

Tim: We’re talking about a group of 25 people. It’s just a very strong and something that we really enjoy.

Making Chips: Do you feel that there are some cultural differences in working for a company that is not a U.S. manufacturer. They’re Japanese manufacturer. How do those cultural differences come into play where it affects the team here?

Tim: When I first started with Okuma I had a lot of hesitation going to work for a Japanese company. We have about 220 employees and maybe about 10 or 12 Japanese and they’re spread through all of different parts of the organization. They’re not all at the management level. Really their role is just to help us better communicate to Japan but everything we do in support and pursuit of our customer is with Americans. There’s a lot to honor about that Japanese culture when it comes to –

Making Chips: Yes. I’ve seen that they really come into play with your mission and your vision and your values and everything.

Tim: Yes. Much like that pursuit of a customer, we want them to have a machine that’s going to last 30 years. They’re not a disposable machine. We put an emphasis on that reliability, the quality, and the support that comes with it.

Making Chips: Tim, you started for Okuma in 1991 as a lathe sales engineer.

Tim: I know that took a lot for you to say that.

Making Chips: No, it’s great. You know exactly what you’re all about. You know what your strength is, you know what you’re an expert in, right? Tell me how you came into industry. Did you have a family member that was in manufacturing? Was it your dad, your uncle, your mother, your aunt? Tell us a little bit about that because there’s always a great story behind that.

Tim: Berea College is where it started for me. It’s a tiny little college, 2000 or so students but three guys that I went to school with. One of them was from Long Island, New York. When he moved back home he’s looking for a job and Okuma was just getting started in the U.S. and he got on and then it was just a chain of effect. One guy got on, called the next guy and so I was two years later after they had moved from Long Island to Charlotte. We were all application engineers and didn’t know what we were doing and it’s just been a great ride.

Making Chips: Are those other gentlemen still a part of the team?

Tim: You wouldn’t believe it but all three of them still work at Okuma. We all three are married to girls that went to that school as well, and one customer told us the most impressive part of the story is that you are still married to those same women.

Making Chips: Yes, that’s great.

Making Chips: Congratulations. I know I just hit 30 and it’s unbelievable.

Making Chips: Tim, I’m looking at this card and it’s a very nicely made laminated card that -

Making Chips: You want business cards like that, right?

Making Chips: Yes, I do. It’s got the Okuma logo on it and then on the back it has your values and it’s divided up into four little sections with your four values and it has a little bit of more of a breakdown of each of those values. Then on the other side it has the vision and the mission but the one overriding statement that’s on there is that “open possibilities” which we’ve talked about before on MakingChips. Tell me on that “open possibilities” how does that really impact your machine tool technology like what is it about open possibilities that really drives innovations and makes things possible for your customers?

Tim: Open possibilities came from our Chairman Dean Hanaki a number of years ago. What he was trying to express is that he wanted the customer to understand there’s probably more than what they might envision for machine tools and solutions.

Making Chips: He wanted to see things that they maybe didn’t see themselves.

Tim: Or help them see, yes. We easily grabbed on to that but the other part at that point in time was we were opening up our control to be an open platform PC. It’s kind of a play on both of those things that not only all these different types of machines, lathes, mills, grinders, and the automation that goes with it but the fact that we started to see the control being connected to the business systems, the office side of the business. We just thought it really spoke to who we are or who we wanted to be at that point in time.

Making Chips: I just heard the machine tools on the conference floor. It’s getting close to 10:00.

Making Chips: Is it a mill or a lathe you heard? Can you tell me the sound?

Making Chips: It sounds like a trochoidal cut actually from what I’m hearing from this vantage point.

Tim: Sure, bring up something. We can't do that well on lathes. [Laughter]

Making Chips: Is it? Is that something you can’t do?

Tim: No we can. [Laughter] I’m trying to throw him a bone.

Making Chips: A trochoidal cut is like a radial cut with an end mill that you take maybe 10% of the radial cut of the end mill but it creates a swap of a cut typically 2, 4, whatever inches wide but that’s what that sounded like.

Making Chips: Jim’s new thing is using and misusing big words now. [Laughter]

Making Chips: Anyway, before we go down to the conference floor and do a little video and share with the metalworking nation the excitement of the conference floor, what is the number one thing that you are most excited about the Okuma brand and about the technology going into 2019?

Tim: There’s a lot to choose from. Probably for me, it’s somewhere between this additive technology that’s out there. We do it in form of a hybrid machine. We’re talking about the machine that does both subtractive and additive.

Making Chips: I definitely want to see that.

Tim: Yes. Then the other side of that is back to the connection of the machine to your business systems, both of those are hot topics with our customers today. I think especially in the area of being connected, that’s something they can put in place right now. Additive, there’s still some development right?

Making Chips: Right.

Tim: In the materials and the programming and everything.

Making Chips: It’s just moving so fast, we just got to contain it. They’ll get it right eventually.

Tim: Right. Getting those machines connected, getting those companies connected that can happen right now and really doesn’t cost a lot of money to make it happen.

Making Chips: What end user segments have you seen that hybrid machine being used the most? We had on our panel discussion this week, we had Jay Rogers from Local Motors and he has a 3D printed autonomous car and it makes sense there but I wouldn’t intuitively think that I’m going to use additive on a Department of Defense part or an aerospace part but I could be wrong. Where have you seen that hybrid machine being use most?

Tim: I’ve definitely been proven wrong a number of times, too.

Making Chips: We all have.

Tim: That’s part of -

Making Chips: Growing.

Tim: It’s such a new technology that people are coming up with ideas every day that are applying it in different way, but if you think about the speed of doing business today, maybe you need to have a prototype done faster than you did the last time, and also the availability of materials especially those exotic materials. If that part now all of a sudden at the last minute needs a boss on it, something that I’m going to go back down my supply chain versus being able to add that boss and then machine it off. That’s where you look at those type of parts or the fact that you’re in the early stages and you haven’t really determined what’s the end result is going to look like, that additive machine provides a ton of flexibility.

Making Chips: You’re mostly seeing it in the prototyping and like saving non-critical parts right now?

Tim: Yes. Even like you mentioned the aerospace, you’ve got obviously the new platforms of aerospace. You’ve also got those old ones where you need a part that they made 20 years ago.

Making Chips: Right.

Making Chips: Like a legacy part that I might be making in another shop?

Tim: Correct, right. All that raw stock that they used 20 years ago, that is not sitting on the shelf.

Making Chips: Like great cast iron or something like that.

Tim: Right. They're not going to go back to a forging house or something to get it the same way they did the first time, right? Now, they can use maybe a big blank. They’re going to waste a lot more material but they have the ability to make that part a lot faster.

Making Chips: The lead times are cut to like 20% of what it could be.

Making Chips: You’re saying even like the material science part of it is up to snuff in order to create a part for the aerospace industry?

Tim: Yes. It’s getting there. I mean obviously the machines are very expensive, the material, the powdered metal is very expensive. You got to pay attention to all the safety concerns. Those are continuing to be developed. On our machine down there you’ll see a laser spy which is really all meant to protect the operator and the environment to make sure that laser doesn’t get out of the machine.

Making Chips: Tim, these hybrid machine tools that Okuma is making now, I would imagine they’re not for production type work. It’s strictly for low volume high mix right?

Tim: For the most part, yes.

Making Chips: Is that your target that you’re trying to sell to? Because obviously people, if they’re going to be doing thousands and thousands of parts, it doesn’t make sense for them to do an additive and subtractive hybrid machine whereas I get the whole concept. You want to create the part and you want to put the material on the table and then take it off and bring it into tolerance and just fine tune it and tweak it to size.

Making Chips: I mean at this point, you can remove material faster than you can add material at least now. I don’t want to say that’s always going to be the case.

Tim: You have parts that really lend themselves to do all of this on a subtractive machine and then send it over to maybe a dedicated additive machine but what we’re looking at is the times where, “I’m investing in this but I don’t really know what the future is going to hold,” so investing in this high-tech machine that can do both, that hybrid capability. If you look down on the floor, you know the multitaskers that we all have in our booths, that’s the same thing. That’s a lathe with milling capability and everybody’s going that direction. I think additive is just one step further in that direction.

Making Chips: I think you’re right.

Making Chips: Tim, before we break off the mics and go down to the conference floor and start looking around, can you tell us, Jason and I and the metalworking nation that’s listening to the show today, can you give them one piece of information that they can equip and inspire themselves with in regards to machine tool technology of the future and where it’s going and what they really should think about?

Tim: Wow.

Making Chips: It’s a big question but I know you can handle it.

Tim: I’ll just tell you. I think the best way to answer that is to say what are we talking about as a builder, and other builders would be too, and that would be the artificial intelligence. It’s coming, right? I mean you get in your car, your car does all kinds of things they never used to do. With the sensor technology and all of that, the next big leap is how can that machine be intelligent? Because you’re always adding new people to that machine that it takes a while to understand how to fully take advantage of all the capabilities of that machine. If there’s some intelligence that can go along with that and guide you or take you down that path, I think that’s where probably the next great steps are going to be.

Making Chips: You believe that the adaptability of learning the machine tool is going to become leaps and bounds quicker to learn how to run the machine tool in the future?

Tim: Yes. We have some of this today, like we call it collision avoidance. I’m trying to watch out for something the operators are about to do that’s going to damage the machine, and if I can give them an alert or just stop them from doing that, that’s a big value to a customer. First of all, nobody’s going to get hurt and the second of all you can probably just save yourself a bunch of dollars in rebuilding a spindle.

Making Chips: We talked about that during our panel discussion on educating the next generation. It used to be the mindset that, “I need to start somebody trained on an old school manual lathe or a Bridgeport and then I need to move all up to the CNC but it’s different now. Now, you just get them going in the CAD/CAM software and you get them doing the design, and then you bring them on to the CNC machine and they don’t even think about that. It’s the same thing with the artificial intelligence. There’s a way to really leapfrog people’s ability to get out on that machine tool so much quicker because of that new technology. The kids nowadays frankly don’t want to learn the manual machines, let’s be honest. They don’t want to hear from their leader, “You need to start on this old lathe.” They’re going to be like, I’ll go somewhere else where they’re going to teach me right on to the CNC machine.

Tim: When I say artificial intelligence, I’m talking about deep stuff. I’m not talking about Alexa and, “Hey, I want to listen to this song.” What I’d be talking about is that machine’s identifying that I’m using it in such a way that if I only did this, I wouldn’t wear that ball screw out. Or if I did this, I wouldn’t crash…

Making Chips: That is preventative digitization which is great. Wow. Do your machines play music? Is that a little secret that we’re learning here?

Making Chips: Don’t tell anybody but I like disco.

Tim: Only ‘80s rock, yes. [Laughter]

Making Chips: Anyway, it looks like we’re just about out of time. Tim, thank you so much for inviting us to your booth today. It’s been exciting. The energy here is just overwhelming quite frankly. It’s a pleasure to meet you and your entire team. I feel your culture, just when we walked in, I felt very welcomed by everybody that I met. It’s just an absolute pleasure to meet everybody here.

Tim: Thank you. I respect what you guys are doing. I love the name MakingChips. As a former applications engineer, that’s what it’s all about.

Making Chips: How do we say it at the end of the show? If you’re not making chips, you’re not making money.

Tim: There you go.