Manufacturing supply chain CEOs
Martin Harshberger sits down with SATIC's CEO, B.D. Erickson II to talk about being a CEO of a small business in today's American economy and the struggles that all current supply chain companies are experiencing.
Martin Harshberger hosts ''Manufacturing Supply Chain CEO's" to conversations with leaders all over the country to talk about their small businesses that are heavily influenced by supply chain companies. Martin sits with B.D. Erickson II of SATIC USA to talk about the opportunities and threats that are being presented and they discuss and encourage to connect and support others in any way that they can, because small businesses, like SATIC, are the heart of our American economy.
Martin Harshberger: “Welcome to this episode of Manufacturing Supply Chain CEOs! I’m Martin Harshberger, your host! Today I have B.D. Erickson, CEO of SATIC USA. Welcome!”
B.D. Erickson II: “Thanks for having me, Martin!”
Martin: “Tell us about SATIC! I looked at your website and…”
right? So we know that the Romans built the aqueducts in this marvel of engineering and they had water, water in restrooms and things like that and that’s a game changer, right? We know that at the turn of the century and Kittyhawk, guys flew and that had an impact on our world, and we live in the technology world today where everyone has iPads and iPhones and all these things, and really what has impacted our electricity, our electrical use and the quality of electricity more than anything was probably lighting. Up until the 90’s we really used Thomas Edison’s incandescent lightbulb for 130-150 years we used this thing, Martin! It just got hot and in getting hot it did two things- number one a byproduct of this heat was light so it lit your world, and number two it actually cleans your electricity that passes through it, believe it or not. So it’s a purely resistive load and any harmonics or distortion gets turned into heat! Well we did something, you know, accidently or nefariously changed from that Edison lightbulb to CFLs, that’s compact fluorescent lamp which is the curly-q. Well, he doesn’t clean electricity, he makes it dirty. So if each person, according to the Department of Energy, has 30 of these lightbulbs in your life then I want you to think about the impact of that, every American can potentially world electric light user went from, let’s use America, 30 electricity cleaners in your home to 30 electricity dirtiers. That had a profound impact on the electricity moving through the grid, our homes, etc. And we added something else, we added all of these DC devices- your phone, your laptop, your tablet, if it has a battery it’s direct current. Well the wiring in your home is alternating current so you’ve got to have that little box on the plug, you’ve got to have that little thing, and what that does is clips the waves so it strobes, if you will, at 60 Hertz because we have 60 Hertz electricity. That’s not good for anything that’s alternating current on the line, that also disrupts and lessens the quality of the electricity. So, you know, people say well what is dirty electricity? Is it
Martin: “Usually when you think of dirty electricity and manufacturing, that’s kind of my background, you think about the install capacitor banks, filters, whatever trying to clean it up so it doesn’t damage the equipment. That’s usually pretty high voltage stuff! Do you primarily deal in 120 or?”
it in, she plugged it in the hallway or somewhere where she had a lot of cord room, right? That’s the magic of vacuuming, how many times can I not move the cord, right? So even from somewhere away she could dirty the electricity, so now you don’t see that because a lot of the TV’s have filters. But guitar guys, audio-files, band guys love our stuff because you can hear it on your amp, HAM-radio guys can hear that distortion, factory guys love it, bitcoin miners are some of our best customers because you just create all this heat and now you’re making the electricity dirty and your equipment is subject and sensitive to it, so you have a problem that you’re creating hurting your own stuff! And heat soak is not good for equipment,
those components on circuit boards in a way that you can just plug in or wire in one thing, not six things, and have it be the highest quality that it can find in a reasonably affordable, modular, easy to install and use package, that's what we do."
Martin: “So how did you get into this?”
B.D.: “It’s going to sound silly, but it’s weird how life takes you down the little road, and I believe in the law of attraction, I believe there’s more things than we can see, I mean if you think about somebody from high school that you haven’t seen in 30 years and the guy calls you, right? Or you’re thinking about something and then there you see it. So I was working in lighting and I was selling high-quality compact fluorescent lighting, the curly-q guy, the awful guy, in the Middle East because our bulb was really expensive, it had not distortion, it had no harmonics, had 99 power factor which was unusual for those, they’re usually about 40 or 50, but they were very expensive. In the Middle East, electricity was so expensive we had a market for it. Well we moved home from Hawaii to Montana, where I’m actually natively from, and we bought a house under huge powerlines. Now I didn’t think about it at the moment, darn it! These are the biggest powerlines in Missoula and pretty soon our whole family is glowing and I’m not teasing, I mean I’m exaggerating a little bit but don’t think you can’t feel it, you can! All the grass under it is dead and my son, who was 12, had gone from straight-A student, perfect attendance, just a good kid, fun attitude and didn’t have any trouble to being anxious, being irritable, to not sleeping, and so, you know, they want to put him on a pill. I don’t want to drug my kid because he wasn’t like this before, so I just don’t want to drug my kid into a daze, I want to find out what’s changed. Is it adolescence? Is it me? What’s happening? And I really went down the rabbit hole there of dirty electricity, of specifically electromagnetic fields that come off of high-voltage powerlines, they’re not good for you, just, they’re not. Nobody wants to live under powerlines. Do you want the cell tower on your house? You don’t! You just naturally don’t. And so then I really thought about the correlation between the lighting that I was selling and it’s good quality, could that be good for your health? And I said no, and I’m not an easy sell! High pressure doesn’t work on me, I’m not quick to drink the kool-aid, I don’t go off the high dive into the pool, I go down the stairs. You know what I’m saying? But once I began to investigate it I kept finding all of these studies- dairy cows, they hate dirty electricity! Plants- they hate it! And you get better milk quality, taste, production when these guys are not in an electrical environment, I’m sorry but Amish milk is better! Don’t say it’s not, it is! It’s delicious! That poor guy thinks he’s a pet and he kind of is!”
Martin: “I grew up around the Amish so..”
Martin: “Well that’s exactly how I started my business! I had a problem with a large company and I thought everybody’s got this problem so I went out and solved it and it worked well and that’s a good way to do it. And again I also had a front in that too, I can relate to what you’re saying. What are your biggest opportunities and threats in your business you think?”
B.D.: “Supply chain! So my, in the beginning it was identifying my customer. So okay I’m drinking my own kool-aid, right? I’m too close to it, I think that it’s the greatest thing ever, but I’m living in it! So how do you A- find the person that thinks or believes like you do or has a problem like you? You said there’s a problem and no one is solving it, I’m going to solve it! And when you’re one of the first guys in the pool to solve it, you become the go-to guy and then your business grows, right? That’s the spot that I’m in! Everyone thought I was nuts for three years! I lost my tail, I lost 200-300 grand a year for the first three years! You know, you buddies are making 90-100 grand a year, you’re losing 200, right? It’s hard to stay the course! After the fourth year, people were like are you nuts?! Well I began to turn it around because I identified my customer, and then you have to identify what they want to hear and where do they get their news and how do I deliver that to them? So once that was initially the problem, who’s my customer and how do I deliver the message and where do I give it to them at? Now that we have the big customers, we orders are coming in, they’re larger than we’re used to and wouldn’t you know it, every boat in the world is parked off of the coast of three ports in America! So when we got these huge orders, you want to put your best foot forward with these companies and you want to ring the till, you want to capitalize on all this hard work and our circuit boards are stuck in boats. So our greatest threat right now I believe is that all the seeds we’ve planted and watered are now producing fruit and our customers are ready for products and the supply chains are so challenged right now that getting components is hard, and a lot of people are really struggling to find labor. Now I don’t suffer that! For whatever reason, the corporate culture that we’ve got here, I have two or three really great resumes on my desk right now that need jobs, they just need to find a home for them here because we’ve run out of room, and I get emailed and connections quite frequently that people would like to come and I’m a recruiter and head hunter extraordinaire. When I’m at a place and I see the best dispatch gal at work I’ve ever seen, I get her card, I do! I write her number down! And I would never go head-to-head with my local business guy and try and steal his guy, that’s not who I am, that’s not playing fair, but I let her know that if office politics or her life changes or if anything in her life isn’t all that she wants it to be, I’d certainly love a shot at helping her get there. And so that’s one of the things in the culture of our business and my mental thinking behind my team building that keeps a nice flow of workers, but that is something that I have to be cognizant of and very specific to, and I don’t mean to rabbit trail on you, Martin, it’s supplies! It’s, you know, not having one supplier, having three suppliers and having a constant decent sized flow of all these parts coming from all over, and I live in Montana, I don’t live in eastern Tennessee where the two biggest highways in the world converge, that’s just not my destiny, I’m in Montana so I have more logistical challenges then the average guy.”
manufacture. People try and buy my company, we have great gross rev, we have really great earnings, they want to move it, but they want to move to India and they want to move it to China, no! Everybody can’t do that, Martin! If everybody does that, we’re just a bunch of consumers! Somebody has got to draw a line and say this far and no further and you can make 10 dollars more a unit, I don’t need it!”
Martin: “And that’s what this podcast is about trying to re-sure manufacturing. I mean my background I came from the Pittsburgh area originally and knew about steel and what we want to do is bring some of that back. I mean I had a guy contact me yesterday that wanted to be on the podcast and I didn’t understand what he did while I was looking at his website so I called him last night and he’s a sourcing guy and I said ‘what does that mean?’ and he said ‘well I source products off shore and we manage it for you’, and I said I don’t want you on my podcast! I’m trying to source off-shore, I’m trying to help these guys make it here, you know? So I got the lecture about global, you know, thinking globally, well there’s a security issue with what we’re doing right now, we don’t make anything! We can steal everything else and we’re struggling! So I think it’s a wake-up call if we’re smart enough to look at it, right?”
B.D.: “So Martin I don’t want to give your presentation, but I sit on the board of the Montana Manufacturing Association, The Montana Manufacturing Extension Center, and The District Export Council. The health of the community is in direct proportion to the new dough, so what do I mean? Okay, so I get my paycheck and do I put it under my mattress? I should but I don’t! I get a pizza, I get my haircut, I get some new jeans, I get snow tires and Bobby mows my lawn. Okay, so I can spend and give that dollar to my hairdresser, for example, she doesn’t put it under her mattress either! She gets her hair done and she gets her lawn mowed and she gets gas and groceries and
B.D.: “I believe this from the heart! It’s who I am and what I do baby! So recently we got a little brass insert in 10 or 30 seconds you land a screw in something, you’ve got to have an insert to bite the screw, the female, right? There’s a company very close to us in Spokane Washington about two hours away and I’m having a hard time getting these things, and I went to them and I said can you make me this? Can you make this? He said yes and I said I’ll buy the tool, it will be your tool, you’ll own it, I’ll pay for it because I need you to make one million of these, I’ll give you a PO right now, we’ll stretch it out so that every quarter I want this many, he almost wept I thought he was going to kiss me right on the lips because I helped him get the tool, it now needs a second ship and he’s got a standing three-year order from me, and I said sell them to everybody you can! Use the tool! Get me mine first! But God love you, be successful and go!”
we’re talking about building a community and stuff- whatever I can buy or source locally I do. And there’s a couple things- number one I really don’t mind paying him an extra two cents per part just for being local, it’s just like neighbor tax that you do because you love them and it’s local. Here’s another thing, I can get in my car and go pick them up! I don’t have to wait for it to come from somewhere and hope that that truck doesn’t get a flat tire or hope that that thing doesn’t get stuck in the Suez Canal! No! I’ve got a fella, he’s young handsome and smart and he’s got a van and keys! He will be there in two hours to get our parts and if they need us to help package and ship them or get them or whatever, it’s all hands on deck! And that’s part of the culture that’s around my office too that, you know, ‘well that’s not my job’ we just don’t say that! Delivering a finished good is everybody’s job, jointly and separately. So if that looks like putting new toilet paper in the
also not hard to reach, I’m certainly not a CEO that wants to be aloof or hard to reach or sitting in the ivory tower, that’s not who I am. If somebody picks up the phone, (406) 493-1861, or go to www.saticusa.com, my email and my phone is in there, I would love to connect if we could work together, if my company can buy something that goes into our product that America manufactures that’s good quality at a reasonable price, I’m your customer.”
B.D.: "Yeah! We're at www.saticusa.com, that's our website, S-A-T-I-C USA.com, and we are a small American manufacturer. We are a tech firm, we're in the clean energy space, we manufacutre products for domestic and global export right here, each one is made with love and a measure of pride in Missoula, Montana, Martin."
Martin: "Well I look at your website and tell me a little bit about the product because my background is in electric too, in engineering, so I have a little bit of knowledge on what you're talking about, but it's kind of interesting, I was looking forward to this interview to see how this plays out. So tell us what your product does and who it helps and what the benefits are."
B.D.: "You bet! So the technological world that we live in changes,
real? It’s just electricity, Martin, that’s outside of some standards, you have to have some parameters, right? You’ve got to have volts, amps, watts, measure of harmonic distortion, fields and all these things and its gotten so far out of ideal standards that it’s now called dirty electricity and it does a couple of things- it’s inefficient, it’s wasteful, and now has been proven beyond contestation to be bad for you and I. So very few people were acknowledging it or addressing it, what we did was stepped up to recognize this problem and say hey we’re going to build our business off of making filters. Just like a Britta filter for your water, we’re going to make a filter for your electricity. And when our system is used, the electricity is so clean, it’s regulated, your stuff is cool, your phone will charge cool and fast, the lights won't flicker and things like this strobing, your DVR and things will be cooler, your power bill will go down, and if you believe in the EMF science and the things that are out there, it's also better for you, a biological person, living in the home."
B.D.: “Great question! Great question! You just nailed it! So one form of dirty energy can potentially be low power factor, you don’t want low power factor! It doesn’t save anybody any money in the home, but if you could choose good power factor or poor, you choose good because you don’t want to be moving all of these extra amps, it just turns into heat and it’s wasteful, right? So when I was a kid, electricity was so clean that TV’s and things didn’t have natural filters in them, my mom would come in and vacuum after school, I’m watching Gilligan’s Island or I Dream A Genie, and when my mom would vacuum it would put lines in the TV, Martin, you could see it…”
Martin: "I can remember that as a kid, yeah!
B.D.: "...right?! You remember that, right?! You could hear your sister's blow dryer on your radio! Don't say you couldn't, yes you could! So that was the distortion coming from that motor went back on the common line, she didn't climb behind the TV to plug
the equipment wants to be cool. Heat soak shortens the equipment life. So what you just asked is yes this is, most of our customers are residential so it’s basically the same idea on a 120/240 scale with more components, so the stuff that you could think of, surge protector-it’s in there, tuned capacitor bank-it’s in there, harmonic rectifiers and filters- they’re in there. So, you know, you’re looking for electromagnetic fields, electromagnetic interference, harmonics, distortion, power factor, all in one. So, you know, when people say ‘well is your IP disruptive?’ oh, we’re definitely disruptive in the marketplace because we’re the first to market, nothing in there is bleeding tech, Martin, I mean guys like you if I went down the list, well if your stereo you want to filter this, for your guitar amp you want to filter this, for your factory oh you want capacitors, rectifiers for surges you want this. What we tried to do was find the best people doing that, who’s doing this thing the best? Work with them, source their components, listen to their advice, not tell that expert, listen to his advice and then stage
B.D.: “So you know exactly what I’m talking about! It’s tastier man! And then I saw these greenhouses and grows in Canada and, you know, you can see the strawberries, the tomatoes growing towards the light. Growing towards the nutrition and growing away from the dirty electricity. So I just put it together for me, hey I’m not a cow, I’m not a strawberry or grass, but I am biological, and if it’s bad for those things it would track. And so the sales pitch is multi-faceted, it’s a really great surge protector, we all know what those are, it’s a great harmonics and distortion filter if you’re a HAM-radio guy or stereo guy or audio-file or musician, the EMFs are bad for your health, and then every piece of equipment would like a tuned capacitor ideally, it could live without it but it would like it. And so I just went down the road and I didn’t see anybody doing what I felt I wanted and what I needed, and I just decided that my son’s health was important and I needed to solve it for him, and if I came out the other side with a business model then that’s what I’m going to do.”
Martin: “I mean, it’s pretty country out where you are, but you’re right it’s not on the beaten path.”
B.D.: “You’re right, we live here because it’s beautiful and off the beaten path, so for all that gives you it also taketh away.”
Martin: “So where are you going to focus in the next two or three years?”
B.D.: "So we're launching a new line right now and it's going to be more attractive and slightly more better performance, but our products work great and that's not really a big change. I want them to be more handsome and easier to assemble, easier to
rent. You can spend that dollar six times and then that six dollars has been taxed into oblivion. Federal and state taxes have now disappeared. So if no new money comes in, in six exchanges your economy dies. So people love tourism because they drive tried and true and they leave this money. But manufacturing- here’s the most patriotic thing that you can do, you ready? Build an electronic where you live or build a product where you live and ship that overseas and you bring that money home, you re-patriate that money, you pay federal and state taxes, you pay local printers, shippers, suppliers, pay your W-2 employees and then you spread that out, and if you really want to be patriotic send it to one of our enemies. Bring that money straight home!”
Martin: "You did give my presentation, good job!"
Martin: “And that’s another great point, one of the reasons I include supply chain with manufacturing, you’ve got to partner with your supply chain like you just did! There’s got to be finding ways to work together because they’re struggling too. The old mentality from the auto industry is beat your suppliers down until they can’t breathe anymore, and they wonder why there’s no loyalty, right? So we’ve got to change that whole way of thinking that says look a manufacturer isn’t just that plant, it’s a bunch of things that’s in and out, the logistics piece, everything! So that’s kind of my thinking too because that’s one of the reasons I’m really enjoying this because I get to talk to a lot of folks that are interesting, just like yourself, and I’m learning some things and maybe it will do some good, you never know!”
B.D.: "You know I think it will, if people, we get into a little bit of a trance and we do get this globalized thinking and stuff gets pushed on us and there's some really great aspects to it, but as
bathroom or sweeping a room or staging an area so that things can, whatever it is I don’t want to get long-winded, whatever it takes to deliver a quality product at a fair price with good customer care, that’s all encompassing of whatever title or expertise you have. It is a total team effort, all hands on deck, and by-golly do it with a smile if you can because we’ve got to do it anyway, you know, let’s sing a Disney work song, you know?”
Martin: “Well where can people reach you? There’s your website that you talked about, and you’re on LinkedIn as well, right?!
B.D.: "Yeah, so my company's name is SATIC, S-A-T-I-C, and it's pretty easy to find, there's not that many companies with that name, thank goodness, right? We have a LinkedIn presence, we're certainly on Facebook and the social media platforms. But we're
Martin: “Great. I enjoyed having you! Thanks for your time!”
B.D.: “I really appreciate the opportunity to be on your podcast. Thank you, Martin!”