EPISODE ONE: DAN KING, DAVEY TEXTILE SOLUTIONS

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I'm your host Dave Shook. Today I'm here with Dan King from Davey Textile Solutions. Dan has been working with us for quite a long time and is one of the smarter and more innovative people I've ever encountered in my career. Dan, can you just give us a brief introduction to yourself for the listeners?

Dan King: Sure yeah so my name is Dan King I'm one of the owners of Davey Textile Solutions in Edmonton. My whole role is Vice President of Operations, so I cover all research and development, all IT function, and all production. I've been doing this for 30 years now. My background is in computing science and engineering so three gives me a little bit of a grounding in the in the area, but I guess that's my readers digest intro.

Dave Shook: Thank you and a bit about Davey because Davey is a cool company so a little bit about company itself.

Dan King:  Davey’s been around since 1986 in Edmonton as well so we have our background in textile contribution. So back in the 80s and 90s we did that and basically made manufacturing a whole bunch of different textiles cutting them up for people as their requirements sending them out to them. But in 2000 when the next generation decided to buy it we looked at the the financial and said oh no one’s buying textiles anymore. We needed to do a pivot, so we pivoted into manufacturing of reflective materials safety materials, so we're sort of hang our hat on innovation around making very high functioning retroreflective materials for use in safety workwear. But in 2010 we kept on the continue losing our supply chain so we decided we better get into our own manufacturing, so we now have a facility here at Edmonton that manufacturers this this composite reflective material. We have the capacity to about 2,000,000 meters a month now here within this facility.

Dave Shook: Just to explain to listeners who may not know exactly what we're talking about what we're talking about here is the yellow and reflective stripes that you see on like firefighters coats right? It is it is yellow plus it has that retro reflective stuff that reflects light back the way it came so they're visible at night and it is also fire retardant.

Dan King: Could be or not necessarily.

Dave Shook: May or may not be.

Dan King: It depends on the customer and they end-use yeah.

Dave Shook: Cool OK and like your spot in the market no doubt you have competitors right. So do you compete primarily on like price or quality or speed of delivery? What's your place in the market?

Dan King: So one of the things that a long time ago I was explained to me is there's a concept in economics called the value triangle. And basically you've got three sides that value triangle quality, service, and price. We feel we're pretty effective in all three so we really focus on our quality that's a very very leading value proposition from Davey. But on our service level we have to give credit to one of my partners who does a great job in the service side of things and our whole organization. I mean we're very service oriented and we try to be as effective on price as we can be. I think we sort of have a good advantage in all three of those areas.

Dave Shook: That's really neat I haven't heard of the value triangle but it's a really succinct way of describing the ways in which people sort of you know look at your offering right. So it's quality service and price? Dan King:  Yes.

Dave Shook: I got to remember that. Cool, okay so now there's a lot has been going on technologically and industry for the last few years with the whole sort of you know industry industrial Internet of Things boom and now really something of a bust or at least a retrenchment going on the on the tech side. Like we're seeing you know tech companies retrenching, we're seeing valuations drop and that kind of thing. But that's on this sort of speculative new technology development side. As a company that actually makes stuff what's your point of view on that? What is it what excites you? Are you like disappointed, depressed with the changes in the market? Or do you see this as like just an opportunity for you to keep doing what you've been doing only with you know better cost position as well?

Dan King: Yeah I mean that's honestly what it is. So, the foundation of our whole manufacturing here in in in Canada predates the industry 4.0 concepts and IoT buzz that came to be in the 2017/2015 time frame. So in 2010 when I was actually structuring what does this manufacturing in concept look like for Davey I had an whole aspect of automation with them that the only way I'm going to compete in a textile world with our global competition out of predominantly Asia, you know the India’s the Pakistan’s the that whole region is being automated because we're at a disadvantage in Canada with our labor costs. So we needed to find ways of automating so I’ve always had a structure and foundation around automation here so IIOT is simply how do I get there. I'm going to look at how do i digitize and get my equipment digitized so i could bring the data forward you know the whole i couldn't serve five steps towards automation so it's a foundation of where we're at and the fact that it's going through different cycles is cutting consequentially we still have to get there it's just going to like you say it's things are a little bit on sale now.

Dave Shook: With where things are right now what excites you the most about what's going on for Davey right now and you know in the industry in general?

Dan King: So well one of the big projects I’ve been working on right now is around sustainability. Textiles is one of the largest polluter in the world right now so sustainability is a big discussion point. After oil and gas, [textiles] is considered the second largest polluter. Fast fashion is the biggest contributor to that likely. You know you hear these stories about buying shoes on whatever online store you can get and they send you 5 pairs and you choose the one. You send the other four back and they throw them away because they cost them too much money to put them back into their inventory so they just disposing them. There's a lot of different retailers that are doing some not so sustainable methods of practices.  Also one of the things that's happening and especially I'm gonna pick on ladies wear. Ladies like a lot of different variants in their products, so these large retailers will make five times what they need or whatever math you want to put on to it more product than they need knowing that a lot of us going to be landfilled at the end of the cycle, right. So they're gonna sell 10% of that or 20% of that and the rest is going to go to landfill. It's not a great process. Then also you look at the affluence that come off the manufacturing and you look at the excess inventories. There's a lot of reasons why we have too much waste in this and most of the waste goes into landfill.

Dave Shook: Wow.

Dan King: Yeah so we what we're looking at is it's becoming a big discussion point in the in textiles. What are we going to do how do we create a better sustainability story? So in order to look at sustainability, of course you have to measure things so that's where I'm really focused on. I need to start digitizing the information and getting to know what I'm getting. A foundation of what we know and what sort of waste we have in our process and reducing that waste. You and I have had a lot of conversations about lean 6 Sigma and to use lean six Sigma methodologies to try and figure this all out. Well what am I going to be looking at is OEE trying to optimize our manufacturing overall equipment effectiveness ensuring that what we make is going to be a first run products. We don't want to have a lot of seconds and on and offs and you know we don't want to do a lot of rework on our products. And those are all wasted efforts and so not sustainable initiatives. That's really what I'm kind of excited about is how do we use this this IIOT to really work towards a better sustainability equation.

Dave Shook: That's really interesting. I had no idea. I mean it makes sense but I had no idea that that sustainability was such an issue in Textiles.

Dan King: Go on most retailers websites and you'll see there's always a whole section just on their sustainability story.

Dave Shook: Wow that’s interesting. So when you switched to manufacturing in 2010 right when you when you made that change what's been like the biggest thing you've learned about running the business as a manufacturing company?

Dan King: Well one of them in the talk we recently had the opportunity to do in Orlando. One of t my takeaways from this the work we've been doing so far and one of the things that I'd liked in my message was don't fall in love with your IT/OT. I had a mentor a few years back that made a comment to me saying you what you need to be careful when you're getting into manufacturing is falling in love with your equipment. It’s like I go I went and bought a brand new car in 2014 and it was a great car. Well at some point in time it's not a great car and at some point in time you have to replace that car, no matter how much you love that car. The same thing with your equipment at some point in time you're making a lot of money off your equipment, let's hope that you are. But at some point in time also you might not be. It might not be the most effective device and maybe there's a new device that's come out that's better. So don't fall in love with it replace it, right. That's ultimately what it is but the same thing holds with my IT OT world. We've got a lot of equipment out there. I've got PLC's installed in certain devices and there are all kinds of different equipment out there. It doesn't make sense for me to try and utilize that. It might cost me a lot of money and a lot of resources to interface into older systems rather than just putting new sensing systems on. So that's one of the things that I found very interesting. Another one that I think that that you and I have shared conversations in the past about is don't over engineer things. I mean I think you actually made a comment recently about that saying we tend as computer technologists people involved in this industry to we love lights and the horns and everything else. We like to engineer things. That scares a lot of people when they see all this stuff. What we need to do is engineer exactly to the value that the customer needs right when we need more value we put into an equation is wasted energy.

Dave Shook: So, I want to pick up on a couple of things the first one is is kind of a embarrassing story about myself but it's around the don't fall in love with what you've currently got. It's kind of the sunk cost fallacy right so you know where, but I spent all this money on it and I want to get my money’s worth. Right? And so it must have been five years ago or six years ago was quite some time ago. So this was back when I was a consulting company I was recommended by a friend and former colleague to a manufacturing company and they're discreet manufacturing and they had a number of production cells making different but related pieces of different related parts or products. They had a problem they had your problem they didn't know when equipment was running and when it wasn't correct so but the advantage they had was that all of their equipment was running on PLC's that were accessible they were all like small Rockwell controllers. Compact logics or micro logics controllers so we went about this like the standard way that a control engineer would do so right where you patch into those PLC's and you know you find the counter that's counting you know parts coming off and you just hook into that yeah but the that wasn't the expensive part. The expensive part was that this required us to basically implement at the time another controller that could talk the Rockwell protocol to them or certainly a device that could talk to Rockwell protocol on that network. And when you're talking to an industrial controller on the industrial control network all of a sudden cybersecurity becomes an enormous concern. So we had to implement the standard two firewalls and DMZ in order to make it so that there were no meaningful or cyber security threats on that against their production facility. Well we just blew our brains out on the cost right. The customer when I put the proposal towards him for like $120,000 he just about fell out of his chair. He was very polite but never heard from him again. So this is cost fallacy and over engineering things approach right now if I were to do it these are the things they were making were made of metal and you know a Raspberry Pi and a hall effect sensor as the metal part drops off would work just fine that's exactly what we're looking at right and so you know the hardware prototyping costs there might be a couple 100 bucks the programming might be you know a couple of thousand or something like that but you could go from a standing start to value in you know a week and from that point without any cyber security risk.

Dan King: Yeah the only downside to the whole thing is you've got a redundant system there potential. But yeah I don't see a big I don't see a big downside in that redundancy the other side of it too, Dave, that that we dealt with that you were there right from the get go and this one too is when you start tying into existing control systems there's a good chance that you're going to have some influence on that system.

Dave Shook: Yes you interfere with it somehow right?

Dan King: You could create an interference, right? And so this is another thing that we wanted to avoid so by putting our own sensing systems we totally leave it to do its job and now we're building a new you know digitalizing systems doing drawing data off our own data points or our own. As long as you just verify that you're getting the same data that it's getting but yeah.

Dave Shook: You know it's funny because it's one of those things that you know there's sort of this inelegance to it, right. We're already counting this one so why should we count it again. On the other hand double entry bookkeeping exists for a reason, so perhaps having two completely independent ways of measuring might not be a bad thing and in these days we're computing power is inexpensive and sensing in the non-intrinsically safe world is also pretty inexpensive. It's you know it's not a bad idea to look at redundancy of measurement.

Dan King: So I have to reference a book that I read years ago and Dave you might know this book but li'm going to date myself by even bring it up as a book called, The Cuckoo's Egg. It did that basically as a discusses the position that started working at University of California Berkeley and he was hired to try and reconcile two different accounting systems there were penny out. And through that book or through that that exploration he determined that there the system was being hacked.

Dave Shook: Oh yeah this is Cliff Stoll's book? Yeah!

Dan King: It was a really good read but it's exactly we're talking about having that redundant system LED them to actually figure out that they had a huge issue it was millions of dollars of invasion that they had dealt with one of the early big hacks.

Dave Shook: Yeah no that's a famous story I didn't realize they had a book about it. But yeah I know that's a very good point right so redundancy of measurement is not by itself a bad thing and it's just that you need to have procedures in place for reconciling right and those are not procedures you had before because you only had one. It's like the parable of the man who has one watch knows what time it is man has two watches never knows what the time. That is so very cool.

OK so moving on a little bit you're at the ARC conference and you brought up the concept adaption which I thought at first you meant was adoption but no you meant adaption. How are they different? I'd like you to give me some information about that.

Dan King: Yeah so interesting I kind of came across this concept almost by accident I was doing just a lot of researching on what am I using the right words for what I want to say and that led me to the distinction between adoption and adaptation. So adoption is a very commonly used phrase that we tend to use and that's user adoption. It is like how are we going to get them to accept what we're bringing forward right.

Dave Shook: Yeah

Dan King: The ideas the subjective tone to that but I get is we're creating something and they're going to accept it.

Dave Shook: Right.

Dan King: What I'm trying to distinguish between that and adaptation is we need to give them also time to rationalize themselves. Like I said in a note just yesterday to somebody was in a dot in an adoption process I can script I can say my calendar says by June 20th 2025 I will have this adopted. OK so I'll have that technology implemented it'll be rolled out across my organization blah blah blah. But that's not to say that all of my users have adapted to it, right?

That's really the distinction I'm trying to make ther.  Also one thing that's very important in my thinking through on this whole concept is everybody adapts at their own pace. That's the other thing we have to build into this we have to go out to the individual and understand culturally how they are adapting to what we're bringing forward. You've got some people who don't know what a computer is and you've got some people who drive a computer all day long. They're going to have different rates of adaptation to whatever we're bringing along. So that's really what the message I'm trying to make clear there is we have two things to worry about: adoption and adaptation. I actually was thinking that I think at the conference I was talking more about that it’s adaption not adoption. But now I'm more thinking it's adoption with a hint of adaptation now I'm seeing we just gotta build it into our plan.

Dave Shook: That reminded of like the first chunk of my career where I was working as a control engineer in chemical plant and the sort of brutal learning I had. So you know I did PhD right and one of the courses I took was something called optimal control and going to work in the plant it was driven home really fast that the optimal controller is the one that's turned on. And regardless of what how sophisticated the algorithm is if the user can't use it effectively it's ineffective. So your point here really is that the technology has to be usable by the user, yes there is a training learning coaching step to it. But especially in a production environment there is this need to make sure that the person working in the production environment has got like really clean and simple ways of interacting with the product. That the every screen needs to direct them to what the negative you know they which of the three buttons they push and it has to be really clear how to get back from here to the main place because they've got other concerns on their mind like you know getting machine back to running or dealing with some sort of operational crisis or having help an injury.  You cannot muck around in those times with you know user interface problems. It's neat idea thank you for that. Now that you've got this system in place you've had quite good adoption of the system and adaptation of text to the equipment, what's next?

Dan King: So well we're at right now of course just trying to go from sort of a pilot kind of mindset to a complete rollout to complete implementation. That's what's in place right now. We’re just working with you guys [Uptake Fusion] to try and get them to the every bit of our production equipment interface digitally into the back of historian so we can get access that data. But then I'm now starting to think through sort of where else we go with this. So one of the concepts I have around the concept of sustainability is energy optimization. As I'm viewing it now I want to say how do I use --  like right now we're heavily electrically powered by most of our energy comes from electricity here so I'm wondering how well are we utilizing that energy. What can I do to change my operations, and utilize energy better? I'm starting to explore different ways of generating electricity that I'm sure a lot of the listeners have heard of CHIP -- which is the combined heat and power process. A lot of the energy that's produced all most of the energy is produced in our province Alberta is generated through the burning of natural gas.

That’s great if it produces energy I'm going to say relatively effectively we all know it's not great but anyways it does a relatively good job.

Dave Shook: Better than coal.

Dan King: Right. But what if we go out to these plants and we look at them. We see plumes of heat going up stacks. So what might keep power guys actually you know finds ways of utilizing the waste that heat back into process? While of course because we’re heat energy or thermal energy so I'm looking at the CHIP processes to draw that energy back in to our plant rather than destroying it up into the atmosphere.

One of the things I'm playing around with right now is the possibility of using sustainable waste to energy. Is there a way of utilizing some of our waste streams in our in our plant? But also just industrial solid wastes to put back into creation of energy. So I'm playing around in those areas thinking them through. Anyways if there’s opportunity, but, also I'm looking at other sides. How do I do our maintenance better? That's one of you know. I'm looking right now actually we're from when we were at the ARC conference. I came in contact with a another company that has a really interesting sensing systems for vibration and thermal analysis. Maybe we can start looking at you know what sort of energy or what sort of vibrations we're getting and what sort of heat signatures are we getting from bearings or rollers or whatever it is. I started looking at,  how do I optimize my maintenance process right now? We're on a very cyclical calendar time based maintenance program -- not the most effective. You don't really know how much of you have the systems been utilized in that time window, so I'm personally looking at changing it from a calendar based maintenance system to an actual optimized operating hours based system. And then looking at energy consumption, so if a motor starts consuming more energy we know it's either under greater load or it has more frictional resistance. That something is  going wrong in it. We'll be looking at that and then the third one would be you know probably looking at vibrations or thermal energy exposures to see if there's something else going funny. I'm looking at that as a another big opportunity for us.

Dave Shook: Yeah I've been really interested in in combined heat and power in part. I mean I just bought a plug-in hybrid vehicle right and I've been looking at electric vehicles but there's not enough charging stations in Alberta yet to go full electric. But there's a lot of alternatives to plain old natural gas furnaces now. And the thing about combined heat and power is you could use it for heating your house plus also you know generating electricity. The challenge with most combined heat and power systems is that it is a fixed fraction. It becomes electric but with the advent of heat pumps for domestic heating that allows you to move that towards heat from electricity to some extent. Right so there's at the risk of more complexity. I mean what's happening is that you can gain more efficiency and add more greater complexity and the whole thing there becomes the equipment manufactured to be maintained and for a long life. You have to look at the sustainability of the equipment itself because a lot of stuff is not designed these days for maintenance.

Dan King: Yeah, actually I'm working with your old colleague Dr. Kevin Dorma on this area.

Dave Shook: Oh, cool that's really neat I’m glad to hear it. We're getting close to the end -- one last question.  When you look back five years from now at your digital transformation journey, how will you know you've succeeded and what do you want it to look like?

Dan King: I actually was thinking through this this concept the other day thinking that do but it's not going to be different. This is a wheel of reincarnation I oftentimes talk about a learning curve. The learning curve is an exponential curve no matter which that's almost a fractal wherever you look at within that learning curve it's just another picture of that same learning curve -- and it's the same thing here. In five years I’m just going to be another point on the pathway that's going to look as ominous in the future and we look back and say how simple was that which is what I just did. I don't think I’m going to be in much ado different mindset. I’m just going to be still on the journey trying to figure out how to get better at manufacturing than I did last week.

Dave Shook: It really is the continuous thought process you know Lean Six Sigma is a methodology but, I'm going to date myself, very early in my career I read Demings Out of the Crisis which was really the book that popularized TQM. You know a lot of what he said basically comes down to you know as a manager you need data, you need to look at the variability in that data, you need to understand what is you know special because what is a consequence of the system itself, and you need to act to make things consistent and then improve them and then just keep going. So it's interesting I like the way you describe it being you know like a curve or a flat-up an exponential curve or fractal that as you zoom in it looks the same it's still learn and you know take an incremental step forward.

Dan King:  And yeah so I did observe the other day was the law of diminishing returns does apply in this area. So we are going to get ever decreasing returns on our investment as we get better and better at our manufacturing process.

Dave Shook: Yes yeah. Yeah so for a given situation for a given environment with regard to raw materials and supply chain and all that kind of stuff yes there is a for diminishing returns. That's why you don't over engineer and that's why you build for the problem that's in front of you. That's why you don't you know try and do absolutely everything there's a point beyond which it doesn't make financial sense, but also as we've seen in the last three years there can be enormous shifts in the assumptions that we make about how the world works right. At that point a lot of things reset. Stephen Jay Gould was an American author who wrote about evolution, he was a researcher, and he wrote in Natural History magazine. He was the guy who came up with the notion of punctuated equilibrium and how it drives evolution. During times when things are constant evolution proceeds very slowly and what you tend to get is species optimizing within the niche, they're in right and very tight specialization. Then there are upheavals like a comet hits the earth or you know other sort of cataclysmic events which can be local as well as as worldwide. In the in the generations following that cataclysm you know the previous order was reset and the attributes that made that gave you advantages in the old circumstance no longer give you advantages in this circumstance. Then there's a very very rapid evolution to and adaptation to the new environment.

Dan King: Right

Dave Shook: We kind of see that in industrial technology like the introduction of the microchip and the distributed control system and then with the you know the personal computer and the introduction of like windows within control systems, 25/30 years ago now and yhen with industrial networking and and so on. Every time there's like this sort of new opportunities that come up and whole bunch of shuffling and some people win, some people lose and some people continue.

Dan King: Right.

Dave Shook: So yeah five years from now -- it's going to be interesting to see some stuff is going to line out like we're going to see a bunch of stuff in the whole industrial Internet of Things, some vendors are going to out, and some are going to pop up. But a lot of what we're going to see in the next little while is kind of like consolidation.

Dan King: Yeah.

Dave Shook: But who knows what's gonna come up five years from now. Right? There will be another thing and who knows what you know where Davey [will be]. I'm sure you're looking around and looking at market scans and figuring out you know is this a niche to be in forever. You know I don't want to make you say anything that's not appropriate but you're a smart enough person that you understand that all sort of market positions are earned and temporary Right?

Dan King: You have to be continually pivoting to new markets and new opportunities. Exactly yeah this is I mean one of the one of the big things, I just gave a presentation on the day on our R&D initiatives. We're continually looking how we reengineer and how we use new resources to create better solutions for our customers. It really does always come back to what is the best way to bring value to your customer? You've got to find somebody who's willing to pay the money for what make and what's the best way of doing that. I would definitely say differentiating from our competition is important.

Dave Shook: Absolutely. OK well it's been a fantastic time. Thank you very much for your time. Any closing out thoughts you'd like to offer at this point?

Dan King: My closing out thought would be the sooner anybody gets on to a pathway towards digitization and removing some of the labor element from their manufacturing process the better off they'll be. We know that we are seeing a coming labor crisis so the longer you let leave yourself to be vulnerable to labor crisis worse off you'll be when it actually starts playing out.

Dave Shook: Right OK. Thanks again Dan for sharing your story. I hope you enjoyed our conversation this week about Davey Textile Solutions, adaption vs adoption, and digital transformation.