How Better Tooling Creates Massive Profit | Ep. 85 [Kaci King]

What if the biggest advantage in manufacturing wasn’t a new machine, but a smarter tooling strategy?

In this episode, West Ohio Tool CEO Kaci King explains how custom-engineered cutting tools are helping manufacturers slash downtime, increase productivity, and save millions in operational costs. From solving “impossible” machining problems to creating tooling solutions that dramatically outperform industry standards, Kaci shares the engineering philosophy driving one of the most innovative tool companies in manufacturing today.

This conversation also explores leadership, family business growth, manufacturing culture, and the future of supply chain resilience in an era of rising carbide costs and global uncertainty. If you want to understand how advanced tooling, engineering partnerships, and long-term thinking are reshaping manufacturing performance, this episode is packed with insights you won’t want to miss.

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Transcript

Dr. Leeanne Aguilar 0:06

What if the biggest competitive advantage in manufacturing isn't a new machine, but a cutting tool strategy that makes every hole dramatically cheaper, more consistent, and almost free by the end of its life? Welcome to Industry Ignited, the podcast where we explore the leaders driving transformation across industry, manufacturing, and innovation. I'm your host, Dr. Leanne Aguilar. And today I'm joined by Casey King, owner and CEO of West Ohio Tool, a certified woman-owned business delivering innovative custom-cutting tool solutions. Casey, welcome to the show.

SPEAKER_00 0:40

Thank you for having me.

Dr. Leeanne Aguilar 0:42

Now you are a STEM kid who originally imagined a very different future. How did your early love of science shape the problem solver you are today?

SPEAKER_00 0:52

I was one of those kids that always wanted to know the why and the how, how it worked and what drove what. I believe that curiosity is really the foundation of engineering. It's not just about the math, but more even about the systems. So when a customer comes to us with a problem, I sometimes see a physics problem or a tool geometry problem or a variety of options. Early love of science taught me to look for a root cause, not just a quick fix, but I also was raised by a dad and grew up with this thinking from a very early age. He was the founder of our business, was also an engineer, and one of the four original to start up a local major automotive engine plant, later going into cutting tools solely because he loved to solve problems and figure out the why behind what was happening. So his way of thinking really was implanted in me in an everyday life at home from a very early age. He had the theory, find the problem, fix the problem. So it was everything from my upbringing to starting the business to growing the business.

Dr. Leeanne Aguilar 1:52

So you just got it naturally. You grew up in the environment and it was just, yeah, integrated, you know, instilled in you from a very early age. So as you mentioned, West Ohio Tool was started in your with your, it's a family business. It started in your family's garage and then it grew into a serious manufacturing operation. What are the defining moments you remember from watching the business evolve from a small shop hustle to real industrial capability?

SPEAKER_00 2:18

Well, you mentioned that it started in our garage, which is literally like one room potting shed now for my mom. After the garage, we remodeled a large chicken coop, propped up the walls, poured the concrete. So that was kind of the next phase, but we now had space to service our first industrial work, some tooling or maybe more so saw blades for the woodworking industry for a local RV manufacturer, and also Amish cabinet shops. So that was really our first uh location outside the garage. Dad went to a woodworking show in Atlanta where he really got the vision of tool and cutter grinding for industry. So his vision long term for the business, I think, was really ingrained or maybe born at that moment if it hadn't already been so. But to do so, we needed more room. Uh so the family built our own steel building from foundation up with taller walls that could house the industrial grinding equipment that was needed that he saw. Uh, I watched my parents grind, pun intended, to start a growth business. And I saw their grit that it took to build something from nothing. A defining moment wasn't when we bought necessarily the first big, shiny piece of equipment, but it was seeing their relentless work ethic that was required to survive. Wasn't glamorous. It taught me that industrial capability isn't bought but earned through decades of showing up, especially when things are hard. Several defining moments probably stand out to me when we made our first hire outside the family. It was suddenly more than just a family project. People and families were now relying on us. And that guy is actually still with us today and will retire in roughly two years. So that's been a fun journey with him. I've seen also in our first CNC grinder. Dad saw that grinder when he went to that woodworking show. I'm gonna have one of those someday. And mom said it's 500,000. It's no way. And here we are, we have many at this point, but it was a huge leap of faith on their part that opened doors to work that we couldn't touch before. And then lastly, the probably um biggest defining moment for me was when major OEMs started coming to us because they had a problem to actually solve or because they couldn't get the performance they needed elsewhere. So we now were at that defining moment that it felt like we were no longer just a small shop, but a real engineering partner.

Dr. Leeanne Aguilar 4:32

Wow. And so what year was the company founded?

SPEAKER_00 4:36

Uh, 1989, November 11th, 1111. Yeah.

Dr. Leeanne Aguilar 4:40

Oh wow, yeah, good day. So you just really saw the evolution and the risk, I guess, too, that they were having to make in order to grow and invest in these um, well, first bigger buildings and then bringing in the equipment to give them additional capabilities and then hire, bring people from the outside in to help expand bandwidth and capabilities. And no, that's really awesome. And so were you working in the business when you were younger, or were you just watching them uh and and learning?

SPEAKER_00 5:09

No, I was the first delivery driver. Um, mom and dad both had full-time jobs. So the business was started after hours. We say second and third shift, and they often tried to figure out what they call, they created the eighth day, like they found time where they didn't know existed, right? So as they would do the work in the evenings or overnight, then I would be the local delivery driver. I went on to get a college degree and really was an integral part why I was in high school, why they were first growing and starting the business, and then went to college and took basically four years out of the business and also summers out of summers, we're mostly helping them. But we say in small business you wear a lot of hats. And at that time it was maybe it was cooking dinner, maybe it was running dad to his full-time job on second shift, maybe it was this or that. So we used to answer the phone and say, just one minute, I'll let you talk to the owner. And my mom would put the phone on posh and have my dad get on. So I mean, there was like a lot of juggling things, but at that time you do shipping and um accounting and answering the phones and making the tool. And at that time, you know, it was just the family. So we'd have switched tabs to do whatever needed done. And then he asked me to go get a job outside the real world to get beat around for a while to appreciate what family business had to offer. And I had a temp job through Wendy's. And I the joke became he almost lost me to Dave Thomas because I had so much fun there. But uh really as I look back, it gave me an inkling leading now to create a culture that I wanted to create, reflecting on uh that experience. So yeah, okay.

Dr. Leeanne Aguilar 6:43

Well, that's awesome. And that's a that is a good idea, just to get out into the real world, get some other experience, and and I think that's really good advice. Now, you studied accounting though in college, accounting and auditing, and loved seeing how things are made in the the real world. How did that financial and operational lens become an advantage when you stepped into leadership?

SPEAKER_00 7:02

I see in the community, and I just talked to the chamber um about this as well, and they're trying to educate small businesses, and there's so many what we call spinning plates or portions of the business. And one big piece of it is the financial end. Somebody can be super passionate about creating a solution, which is why businesses even exist to begin with. But if they don't have the understanding, um, it makes it difficult. So the background and accounting and auditing taught me to see the business as, I guess, an entire living ecosystem instead of a collection of silos. Each area, of course, affects or can affect the other, and then of course, as a whole, by understanding how the operations really feed the piano, I developed a perspective that feels at this stage invaluable in manufacturing, especially through some of the hard years, the pandemic, and other challenges where at times margins can be razor thin and having to be able to shift when necessary. And then in addition, from sort of um, I don't want to say a sales because we're not a normal sales entity, um, I it gives me also the lens to be able to step in to share the value of what we offer differently, not from viewing tooling as an acquisition cost, which is typically not apples to apples, to compare the cost of two tools. So two drills can look identically the same. One is more, one is less, but one will outperform the other. So it's our job of proving to customers how we can create longevity and create uh value instead of seeing the total from like an acquisition cost, more so from like an investment over its life, but also being able to focus on the economics behind every part, showing to the customer the downtime they've saved, how much more they can produce during that time. So it's really a true cost per whole and really an entire tool life ROI. And I don't think if I didn't have the financial perspective on the growing up in the business and how the pieces work together, I'm not sure I would have this understanding. It can very often become a competition over just an initial quote price, but it truly is way, way deeper than just the acquisition cost of the tool. So it has allowed us to be able to move conversations past that initial price tag and speak a language that resonates with a broader team of people, everything from executive to engineer to purchasing, um, and shifting that focus from that initial purchase cost to profit margins and higher production output.

Dr. Leeanne Aguilar 9:31

Yeah, that makes sense. So you're really able to speak to the true value and cost and ROI and demonstrate that from a financial perspective because you really have that deep understanding of the numbers and how that all works together, right?

SPEAKER_00 9:48

Yes.

Dr. Leeanne Aguilar 9:48

It's not just a line item, it's so much more. Right.

SPEAKER_00 9:51

So much more.

Dr. Leeanne Aguilar 9:53

Now you step back into the business at a high-stakes moment, your father's health crisis, a lack of transition plan, and then a global pandemic. What did it take personally and strategically to become the new sheriff in town and rebuild the company from the inside out?

SPEAKER_00 10:09

Ooh, difficult days for sure. Um, I I feel like it really came down to two main things: courage, courage to make a decision, courage to make what we felt at the time was the next best decision or the right decision at the time, but also the courage to make them fairly quickly at times, no matter how hard they were, and also the clarity to know exactly who we wanted to be and ultimately who we would become and what we wouldn't be as a company. I felt like at the time it was really almost about a personal and professional survival. Dad got sick, the no succession plan, the pandemic. We had a really toxic culture and toxic people. And I didn't want to stay part of a business that it just wasn't absolute fun. At the end of the day, I wanted it to be an extremely fun place for all of us to spend time creating something really amazing together with a team of people that shared the same vision and the same passion. So we had to make a few incredibly hard choices at the time. We couldn't be everything to everyone, and that both met our internal team as well as the customers that we served. We really made the decision at that time to no longer be a commodity shop in any sort of way, fighting for pennies or supplying those who didn't see the long game of what we provided in various ways. We had to make decisions to let people go who didn't fit where we were going. Um, and we ultimately fired a few customers who didn't value us, but it also made space to find the right people who believe what we believe. So becoming the new sheriff in town meant drawing a line in the sand and saying we're an engineering company, not a job shop, not a PO processor. And ultimately for the internal culture, not just a place where somebody comes and puts their time in, but really thinks and uh contributes, provides value, and isn't interested in continuing to contribute problems during the time that they're here. We had a few scary days, but we felt like it was the way to carry their legacy forward. And we really feel like I hate to say we've arrived, but we feel like we're there now. Like we've created this culture that we love and we feel like it's a really fun place to work and to start to see people wake up and share ideas and transform customers and results by their thoughts. It's really an exciting part to be a part of or thing to be a part of, but it I feel like proud mom. Like I feel like as a leader, it's been really fun to cultivate this culture with within the walls.

Dr. Leeanne Aguilar 12:37

It sounds like you got really intentional about it, and then it was a strategic plan that you put into place. So out of curiosity, like how how large was the company at that time? How many people I believe 18. Okay. And how how many are you now?

SPEAKER_00 12:51

Well, we went down to 12, and I think we're back up to 15. Uh, we realized we had extra. Some people self-selected out, some people we had to unfortunately hold the door for, but we ultimately learned we could do way less with less people. So it was a strategic move from a financial point, but the players that got removed were the people that were either creating too many problems or not providing any value. And small business has a very difficult time supporting people who who are doing either.

Dr. Leeanne Aguilar 13:23

Yeah. So you had to get I mean you got very efficient, is what I'm saying. Yeah, the efficiency increased and you really identified, right, where where there was extra weight or or baggage that had to be be cut, basically.

SPEAKER_00 13:36

I think our fewest number of people, we started rehiring at the end of last year in November. So we went an entire year with out quite a few. We rehired starting in November, but last year was our largest year in company history. So it proved that the whole team were capable of great things with less people, and um, that efficiency part that you mentioned was huge for us.

Dr. Leeanne Aguilar 13:56

Yeah, streamlining, having processes in place, getting very organized. And yeah. And when you took over, had you identified that there was a toxic culture in place previously? And do you think the the culture was it toxic because it just evolved that way organically without direction, or or what do you think contributed to that culture?

SPEAKER_00 14:20

I don't think I have any of those answers. I think we had some of the wrong people. So we operate on a system called EOS. They have a theory that it's a hundred percent of the right person in the right seat. We added maybe an additional phrase, uh, the right bus. So do we even have the right people on the right bus? Do they deserve to be here? Are they adding value and living core values? And to the extent we don't have to ask them ever. And then maybe they weren't in the right seat. So we did some juggling to figure out who belonged where, but ultimately it was our bus, and we had to decide who was the best fit and who had proven themselves up to that point. Uh, there were some people who had really taken very much disadvantage of my dad, and I'm not sure he even saw it at the time. I think over time he finally saw it. But yeah, we stepped into a really toxic culture. In fact, it was one of the reasons I went home to start working in 2016. We had some internal issues and some people who didn't think I belonged in the company. So uh I almost exited at that point and had given my dad a choice. Hey, I've been your right-hand support for a long time, but I I'm out, I'm not doing this anymore. You can buy out my shares or I'm going home to work, and that was in 16 before working from home was a thing. So, how do you step in on that notation that you left on back into lead? Which is why it felt like the new sheriff in town, and then everybody's wide-eyed when that person who opted out is back and then they're leading, like we were being groomed to lead, but right they weren't leading ultimately, and the the company was kind of flailing because a team of people that were put in place, being taught to lead, weren't choosing to step up to lead. And at that point, it just was imperative that somebody step in to do so.

Dr. Leeanne Aguilar 16:12

Yeah, yeah, took the lead, you know, said, okay, this is the bus we're on, this is what you know and what we're looking for, these are our values, and then determining if it's the right people on the bus. Right.

SPEAKER_00 16:23

Yes.

Dr. Leeanne Aguilar 16:23

Yeah. So you've said you're not focused on selling cutting tools. You're an engineering team that builds tools to solve problems for people in manufacturing. What does that mindset change in how you diagnose an end user's pain and design a solution?

SPEAKER_00 16:38

So we don't employ traditional salespeople in that sense. Uh, we don't have a catalog, so we can't say, hey, pick one of these instead. Uh we have a tech team of what we call design people and makers that include engineering and also like an applications guy that does all the programming, who's teaching and training our team. And there's three gentlemen on that tech team that have had decades of experience in many industries. So when we're talking or a lead or a customer are talking to us, they're talking to somebody who understands about geometries and physics, how to cut a variety of materials. We don't ask what tool they want to buy. We ask them what problem are you currently having that needs help solving. Often the customer may think they need a better tool or a different tool, but they often just need a better geometry or a different approach. And it's ultimately because we're custom, we have this niche, where it's ultimately our job to figure out just back to I think the original question you had, that whole mentality of find the problem, fix the problem. But it's our job ultimately to explain why they're having the problem and how to how to resolve it. Um so we had to get really intentional and very skilled at diagnos uh diagnosing the root problem and then designing a tool solution around it.

Dr. Leeanne Aguilar 17:55

Yeah. Cause like you said, as the experts, you often understand the customer's problem better than they do. And so what they think they need may not be really what they need oftentimes. So yeah.

SPEAKER_00 18:06

And sometimes it's a very difficult conversation to have because even though they want help, it can be a machine problem, it can be a coolant problem, it can be something on their end, but not always are people open to really addressing the issue. And maybe there's times it's not possible, but uh so through tooling, as long as we can make sure the rigidity of their machine is there, they're using the correct coolant, it's you know, we have them test the coolant to make sure nothing has gotten off in balance, uh, they have the proper work holding. If it truly is a tooling problem, then that's where our magic secret sauce steps in to help them fix their issue.

Dr. Leeanne Aguilar 18:46

Well, you said something interesting that people aren't often open, I guess, to hearing. So why is that? Do you think? What is what causes that?

SPEAKER_00 18:54

We say it's something that we've been working with an outside consultant on, and I truly believe reflecting on everything he's taught us about neuroscience, people, and all the things that make us tick, it's almost a difference in inward versus outward mindset. So if this is like my baby and my project, maybe I'm not open to hearing someone else's input or a way to make it better. Um, and I'm not saying all people are like that, it's just sometimes difficult, delicate situations or delicate conversations to have if we pick up on somebody being like that. Typically, when somebody's very open, they have a very outward mindset, and it's very easy to put all the facts on the table and nobody to become emotionally involved, or I don't want to say someone take offense, but you know, sometimes when there's a very large OEM, they're used to doing something a certain way, and you're not in machining and you're not in our shoes. And how do you think, you know, la la la. So it's oftentimes just even walking them, helping them create the idea that they're creating the solution, right? Like here's the tools, here's what we see, this is what we would suggest, but ultimately leaving the choice up to them. They're the ones that has to make the change or a tooling or, you know, whatever.

Dr. Leeanne Aguilar 20:10

Right. And I get that, and I hear you, and I've encountered that as well. It's like um not everyone's willing to hear the solution sometimes. They're not ready for that. They're sometimes they're they're holding on to certain beliefs for whatever reason, and it can be very delicate, like you mentioned. It can be a delicate situation. Yeah. So it's so I think that's where communication plays a big part, being able to communicate effectively and like you said, giving options or suggestions or recommendations, but not like, you know, letting it be their choice and and you know, ultimately. But yeah, it's interesting. Yeah, the human human psychology or dynamics.

SPEAKER_00 20:46

Yeah, for sure.

Dr. Leeanne Aguilar 20:47

So West Ohio tool can reverse engineer tooling packages from a part print and even combine tools, like going from 23 tools down to eight. Walk us through how you evaluate a tooling package. What are you looking for, and where do you most find hidden waste?

SPEAKER_00 21:05

We find likely the most hidden waste is in the number of tools. And not saying that they don't need those number of tools, but oftentimes machining people are very familiar with what we call standards. There's standards out of a catalog. So they may say, hey, in order to make this notch in the part, I need this tool. And in order to do that, I need that tool. But every number of tools that increases also increases, of course, the number of operations or passes in machinery that's needed. So time is money, and for every tool that has to run another cycle to do something, uh, is less production that they can make, less parts at the end of the cycle that they're putting out that they can sell. Not to mention sometimes, even uh the number or time frame that it takes to make tooling changes. So that's where we commonly find the biggest waste. People that are used to buying standards sometimes are so frustrated. Um That they're ready to receive help. But for every tool that has to run through the machining process, of course, it's time. And for for every time the machine stops to change tools, there's more downtime, and we all know time is money. We prefer to create a custom solution when possible. Not that they can't use standards, sometimes it's very necessary, but to reduce the number of tools, which also reduces acquisition cost of all of those tools, downtime for all the changeouts, cost of servicing all of those tools, and then of course reduces ultimate cost per hole at the same time of increasing their productivity. Those are designed, and that was, I guess, back to the first part of your question. We evaluate the design by looking at the current geometries, the number of tools, the tolerances. Many times we have to operate within a three to five micron tolerance, sometimes one. So we have to find geometries or tooling solutions that can fit within that. We also look at the material type they're cutting. And we say, or one of our apps guys says literally any tool that anyone can think of, we have a technical team to create it. So it's really trying to provide that best service to the customer, the best value at the end of the day. Referencing the example that you mentioned, 23 to 8, the purchase price of all those tools, service work of all those tools. Now they're combined down to eight. So um they've saved an incredible amount of production machining time for only eight tools having to run the cycle versus all 23, not to mention all those upfront tooling acquisition costs. So yeah.

Dr. Leeanne Aguilar 23:31

So I'm hearing you're really a customer advocate as well, you know, looking at their problem, helping them become more efficient, save costs. You know, it's not selling, just selling something that will create the whole. It's like, yeah, it's the best solution, right? Now you offer life cycle support, regrind, re-tip, service through tool longevity. So the tool is optimized beyond day one. How do you get customers to shift from upfront price to long-term cost per whole thinking and what metrics make it click?

SPEAKER_00 24:01

Right now, our industry is in an unprecedented time. People are really being forced to look at any cost-cutting option available due to the carbide pricing, volatility, and availability concerns. So even without us showing them any data yet to this point, they're sort of being forced to find other cost savings measures just through is there another material we could be using to cut costs and still keep 100% performance or longevity? So that's something we're working through right now with our current um partner base. But servicing those tools through regrind and retipping, of course, by far is the number one way uh to reduce cost purchase price. So if they have a tool that they're buying and they use it till quality's bad per se, whatever that tool life looks like, and throw it away, every single time they're having to buy the material plus the time it takes us to put all the geometries on the tool. So if they can send the tool back to us and we can recondition that tool back to 100% performance at a fraction of the cost since they're not rebuying that material, of course, it becomes a quickly value add light bulb moment, even if people are already doing it. But at the end of the day, it's just showing them the data, showing them the math frequently.

Dr. Leeanne Aguilar 25:18

Yeah.

SPEAKER_00 25:19

If tool life is currently established, for example, at 8,000 holes, uh, we had a customer who had an establishment of tool life of 8,000 holes, but the current vendor was only lasting 5,400 holes. So I asked them the question would it be valuable for you if we hit tool life at 8,000? It's always a yes. Yeah. Um, but we made that same tool that lasted 16,000 holes. So we literally do the math. We nearly doubled what they hoped to achieve, but tripled what they actually achieved. So we literally walk through that math of what's the upfront cost, how long did it last, what's cost per hole? And then in our situation, like as a case study, ours was 16,000 holes divided by that cost. And then we also do the math with showing them, okay, it lasted triple the life. So we're saving you three changeouts. What's that time that you're saving? In this case, it was 45 minutes each. So over that 135 minutes, what's your production cost per minute that you're now saving and putting back in your pocket from an operational standpoint? And then in addition to that, how much more are you making during that 135 minutes used to be shut down? So it's really showing them the data and way more outside the box than just that initial cost, whole ROI from even an operational downtime cost savings. Yeah. So you can imagine what happened when we made a different solution for that same tool that now goes 583,000 holes. They can re-grind it and do it again. So showing them that just this one case study has been super fun. And if they didn't get it before, they they surely see it now, right?

Dr. Leeanne Aguilar 26:57

Right. So you let the numbers talk because ultimately there's that bottom line. And who doesn't want more, more, you know, profitability, a better ROI? And and yeah, awesome. Now there's a perception in the market that any carbide tool maker can make the same tool. What's the truth behind that? And what variables separate average performance from breakthrough tool life?

SPEAKER_00 27:20

Oh, it definitely feels like the biggest lie in manufacturing. Maybe that's too strong of a word. Maybe the biggest misunderstanding is a little easier. It almost feels like if you say any chef can make a souffle, everyone has eggs and flour. Certainly you can make it. And my dad would always say it comes down to the recipe. So is it just about eggs and flour? What is it about the mixture? I think perception is every drill is a drill, is a drill, but like just in the last example that I gave you, it's simply not the case. So we say it comes down to recipes of geometries, uh, grades of material that we choose based on their application. There's so much more that goes into it than just like make this thing. We call that standards, not to standards are very much needed, but at the same point, people can make standards all day long. The custom part really is a huge game changer with both from our standpoint and their standpoint, how much longer they can run. But we have to have a much better team full of skilled trades and knowledge and all the things. So it's really part of our recipe on our end to be able to provide that best ROI for them. It's also kind of like, you know, I think everyone assumes you can have like a grinding machine or the best grinding machine. And we feel like we do have the best grinding machines in the world. But if we don't have that recipe of the technical team plus a mindset of innovation, plus the knowledge of a variety of cutting tools in the application, we're just making the same tool everyone else makes, not really maybe the true solution.

Dr. Leeanne Aguilar 28:56

Yeah. So when you're working with your customers, are you also supporting them with the training, with the process and the productivity aspect?

SPEAKER_00 29:05

Um, it just depends. The major OEMs, I feel like, have a skilled team in-house full of engineers and machinists, that they don't usually need that from us. And the rigidity of their machining and work holding are typically spot on. Not always, but it's usually not an educational standpoint we have to take with what we call high volume machining or one of the major OEMs, because that skill set is already in place. But we do run up against it every now and again.

Dr. Leeanne Aguilar 29:36

Now let's talk about outcomes. You've helped manufacturers reduce costs per hole by up to 98%. I mean, and you've delivered dramatic tool life gains, like jumping from tens of thousands of holes to hundreds of thousands and beyond. What's your favorite example of a customer problem that looked impossible until the tooling strategy changed everything?

SPEAKER_00 29:56

Hands down, it's our edge X4 application. We engineered a cross-center tip PCD drill that is literally transforming manufacturing. There's two quick stories: one in aluminum that we made carbide drills that ran 25,000 holes without change out, that is now lasting a million holes with the edge X4 drill without change out. So it runs an entire four-year model change and it prevents them from shutting the line down 40 times over four years. And the fun thing is, we were the only one out of four companies that could provide that solution because numerous vendors were asked. Um, I feel like this innovation from our team hasn't really been a quote unquote improvement or drastic improvement, but nearly a paradigm shift for sure. The second story with our Edgex4 drill is that we were the fifth company asked to provide a solution, but we didn't even get to know the breakdown of the material. We were just told it was ceramic like, that it was proprietary. Four other nationally known drill vendors were asked, and all of them failed to even cut the first hole. So we were the only ones successful. It now helps them make an innovative product for the semiconductor semiconductor industry that's also lasting exponentially longer than their prior solution. So those are probably by far my two favorite examples.

Dr. Leeanne Aguilar 31:13

Yeah, no, great examples. Thank you. No. Uh Casey, carbide supply and volatility are becoming a strategic risk with major global concentration in raw materials. How is that reality changing what manufacturers should prioritize right now? And why does longer tool life become a supply chain strategy, not just a performance goal?

SPEAKER_00 31:33

Well, I really feel like it changes the conversation from how much is this tool to how exposed am I in the market, especially when there's availability concerns. When we look at where raw, tungsten, and carbide come from, there's a massive geopolitical risk right now. If a customer is running a process that burns through, say, for example, 500 drills a month, they're sort of holding a massive liability. And nearly in this industry, we're facing, I want to say, a crisis that we've never faced before of that whole just-in-time inventory for us to ship. If there's material we can't get our hands on, then our customers can't plan, hey, we need to order that four weeks in advance because at this point we don't even have a total idea when we can get our hands on the material. So if they are burning through for that example of 500 drills a month, they just are holding a huge liability. They're more vulnerable to a shipping delay, uh, pricing hike, raw materials shortage than the shop just down the street that maybe only needs five drills to do the same work. So this is why tool life for us is a constant educational piece and why we also feel it's a supply chain strategy. If we could give them a drill like the Edge X4 that lasts months instead of hours or even years in some cases, we just removed maybe 90% of their supply chain risk that they no longer need to stockpile or panic when prices increase, which is also what we're facing. From July 1st of 25 to today, we're nearly six times uh the price hike that we were. So if you have a tool that lasts, for example, four years, you're now insulated from all of those pricing hikes. Um and in my auditing days, we called it risk mitigation. Today, maybe it's called common sense.

Dr. Leeanne Aguilar 33:17

I'm not sure, but both right. Yeah.

SPEAKER_00 33:20

So finding ways to stop consuming so many consumables is very important in this day and age for sure.

Dr. Leeanne Aguilar 33:27

Right. And is that part of the conversation too when you are working with your customers? It's just yeah.

SPEAKER_00 33:32

Absolutely. In fact, it's probably one of the biggest conversations that we're currently have for obvious reasons right now, you know, pricing, availability, volatility, all the things. So we're constantly, over the last several months, we're constantly having conversations with customers. In fact, our team has had a few revolutionary ideas born out of this crisis, but we saw the same thing from the pandemic, right? If our team has that mindset of innovation and ultimately providing value to our customer, we have we have a tool that supplies uh ABS braking systems to all models globally. And that tool, because it's made of all carbide and is very intricate geometries and tolerances, that tool, for example, several hundred dollars, like pushing $400 because of the current carbide crisis. It used to be like $200, but it's like nearly doubled because of this carbide problem, not because of a shop or labor rate increase, but solely because of material. So our team has thought of a solution that will literally take that tool from nearly $400 down to $150. And we're currently in the process of making those tools right now for them to test. And we're super excited because it cuts their costs in half, basically, or less than half. So it's very critical conversations we're having with every customer to figure out how, in this especial time of crisis where most people are paying more, can we help provide additional value and provide additional cost savings? So yeah.

Dr. Leeanne Aguilar 35:03

Oh, that's exciting though. Well, yes, yeah, good luck. That's amazing. Yeah. Now you've grown into new markets, automotive, aerospace, defense, even semiconductor adjacent applications. What's your go-to approach for entering a new vertical? Is it proof of concept tests, engineering collaboration, quality requirements, or something else?

SPEAKER_00 35:23

I think really, especially from the defense angle, we have to lead with compliance and proof together. Department of War, I guess, is best said in these days. We don't, we can't just say, hey, trust us, it's a super uh nitty-gritty industry. And they all are, even automotive, but aerospace and defense is beyond the requirements of automotive. So obtaining the AS 9100 certification for aerospace was imperative. And then right now we're in a period of gaining CMMC level two certification. We haven't gone through the certification route yet, but we had to obtain compliance, which looked like making a lot of internal changes, buying auditing software for IT that we didn't have before. I mean, it was like $50,000 that we invested just to become compliant, but it's to ensure our own government that we're willing to do what's necessary so the people that they don't want to have the information can't get their hands on it. And then we went one step further and also um became ITAR registered. So we have to prove that we check all those boxes, but we have to also provide proof and examples of value add, the data, the proof, the tolerances. So it's a lot of boxes to check, just more than, hey, this is an example or this is what we did for the guy down the street.

Dr. Leeanne Aguilar 36:41

So yeah, right. Yeah. Your growth goals are bold, moving from a record year past 4 million towards 10 million with the right partners. What does alignment look like for you and customers? And what kinds of customers are you intentionally saying no to now?

SPEAKER_00 36:57

We say no to what we maybe refer to as the spreadsheet shoppers, or we realize there's a pattern of becoming maybe their second quote, but not obtaining the order. We tell people we will rarely ever be your cheapest quote up front. But if they're constantly shopping for that acquisition cost versus partnering and seeing the long-term value that we can provide for their operations, it's not going to be the right customer for us. And likely even what we say almost a waste of time for our engineering team to spend their time quoting. If we're constantly going down this road of, hey, Casey, you need to cheapen your price. That's not who we are. Like we're in the ballpark, we're close, but based on all these other case studies, we know that we can have a significant impact on your tool life and longevity and reduce operational costs for you. So we're never in the hunt to be the cheapest. If somebody doesn't have what we call the long-term lens to see that, and they're only like, you can't see the forest because of the tree in front of your face, those are the people we ultimately have to say no to, whether it's just via a quote or even partnering together. So if they only care, I guess, about the lowest quote, then we're definitely not for those people. Alignment for us really means that they want to be a partner and have a long-term relationship and gain all of those value add things that we can provide. If they want someone who will visit the shop and answer the phone and have a live body and ultimately what we're good at solving the problem, especially with the weird hard things, um, that's what we want. And we're looking for the relational business, not the transactional business, like one PO at a time or just the PO processor. So we feel we'll get to 10 million by finding those right partners and just not every customer that comes along or just somebody wanting a PO to be processed, like our biggest value adder for those long-term people that are in it for the long haul, wanting that significant savings overall.

Dr. Leeanne Aguilar 38:48

Yeah. And that's really, I guess, your talks to your or speaks to the strategy that you have of moving past the not being a commodity business. You're not a commodity, you're a you know, specialized engineering shop. That's part of that moving past being a commodity is offering more value. It's focused, focusing on relationships. It's beyond that. And I think that's really a more sustainable model. If it's if you're always just focused on being the lowest cost part or service, then there's nothing special about you, right? There's no reason to stay that you know you could easily just be replaced by the next person who has a the lower price.

SPEAKER_00 39:25

Absolutely. We say there's two models of cutting tool businesses, standard and custom, and then maybe even more so that like we've kind of even stepped it up, maybe another notch. I don't the unicorn weirdos. I'm not sure what that looks like. But our team gets this super hard stuff that no one else can figure out. So we have to have this team with education, experience, knowledge, years of understanding of how to make tools, but also how they work in our customers' facilities, right? So we have to pay obviously people more than what we call a standard toolmaker. So maybe one in standard, maybe one shop has 20 machines and they run the same half-inch part all day long. And that person just loads the material, maybe doesn't have to understand much. They're just running the program that's already been set for them. They have an overhead cost that's significantly less than a company like ours with super skilled trade teams that are knowledgeable that we have to pay in order to retain, of course. But as a result, our overhead and our labor rate is higher than maybe somebody that has a standard shop. Again, it's investing in our people up front to be able to provide that long-term value, not just spitting standard parts out all day long. So we can make the standard stuff, it's just that we've choose to move on to the weird stuff because we're really good at it and we love solving the problem that nobody else can ultimately.

Dr. Leeanne Aguilar 40:45

Right, exactly. And yeah, it's like if you're not just stopping to, you know, if you're not just trying to pinch pennies and it's not an immediate thing, it's it's a long-term, you know, result that you can provide. It's the long-term value, like you said, and the sustainable results. So, Casey, you're also building a legacy built business. Your daughter has stepped into key financial responsibilities, and your son is around the operation too. What do you want the next generation to learn about leadership, manufacturing, and building something that lasts?

SPEAKER_00 41:16

Of course. I mean, when I say they've been subjected to it, they've grown up with it. My daughter says, Oh, I've seen all the things you and grandpa and grandma have gone through, right? Like it's sometimes even the unwelcomed stepchild, and I don't mean that in a bad way towards stepchildren, but we see sometimes uh logistics of families, and maybe if there's a stepparent or stepchild, things are awkward. And sometimes that sits at our holiday dinner. Like that's not what we wanted to talk about at holiday dinner, right? But sometimes there's pressing issues. I mean, I remember thinking the pandemic. We stepped in six or eight weeks prior to the pandemic, and that was in March. And I remember by Memorial Day, it like it was still at the family picnic because it wasn't over, right? Like manufacturing had shut down for the first time ever for eight to ten weeks. And how can we afford to keep our team? And like it wasn't the backyard patio, like, let's have hamburgers and play yard games and all hang out. That elephant in the room at the end of the day, and and she says, Mom, I see everything you go through, even at night during sometimes the hard days, but I think they already have a very clear understanding that manufacturing isn't, I guess, what I would call dark and dirty. We are oftentimes told when people to our facility that this is so high-tech and it's so awesome what you guys are doing and who you're making for and the industries and the parts that it's going to. But um, oh my gosh, this is the cleanest shop I've ever been in, and it's really quite noble work. And we had a new team member added this week. And at the end of the day, I said to him, This do you know what we do here? I missed your interview, but I need you to understand we're not making parts to push out the door. And I wish I could have had this conversation with you before you joined, but here we are. We make drills for space site satellite manufacturing, we make tooling for drones, we make tooling for brakes to help humans stop their car to go home to their families at night. It's this what I call bigger impact in the world that by doing what we do allows somebody else to make some really cool something that we could already even be using on a daily basis. So I guess to me, uh leadership is service and building something that requires much more than a technical skill. It takes resilience and humility, commitment to the values, even when it costs us the same the sale ultimately. Um, whether they choose to stay in business or not, I want them to see that a real legacy is built by taking care of our people first and dedicating ourselves to something bigger than yourself. And this is a standard of excellence that I would hope by being third gen and seeing my dad and I come through it, and even my mom, that this is something that they will carry forward.

Dr. Leeanne Aguilar 43:55

Yeah, I love that. I mean, I I I I do, and helping uh Not only your son and daughter, but uh those who work with you really see the value and the bigger impact that they're making. I mean, what you're creating tools, it's not just about tools and creating holes. It's about right, the end product, the things that are impacting people's lives.

SPEAKER_00 44:15

And well, in an auto major auto OEM, we s we say this. If we've helped you save millions or billions of dollars in the last decade, that has such a huge ripple effect in the world. Like they could be choosing to A, make more profit, but also in a time frame of affordability and everything rising, this is also their opportunity to lower that massive cost to the customer. So by being so innovative, like we not only are impacting manufacturing and what's being made, but also driving that affordability piece to the consumer if that manufacturer uh chooses to pass that on. And then they ultimately have the upper edge per se, you know, with their competition because of that pricing and affordability that we've been able to help them achieve. They they now have that upper edge with their own competitor.

Dr. Leeanne Aguilar 45:07

So it's that ripple effect, right? Where everyone Yeah. Well, Casey, thank you for joining me today and for reminding us that innovation is in manufacturing isn't always flashy. Sometimes it's a smarter tool, a stronger engineering partnership, and a relentless focus on long-term value. For listeners who want to learn more, how can they contact?

SPEAKER_00 45:25

They can find me on LinkedIn or they can also email me, my first name, KCKACI at westohiool.com.

Dr. Leeanne Aguilar 45:32

All right. Thank you. And yeah, I've really enjoyed this episode.

SPEAKER_00 45:38

So I'm honored to be here.

Dr. Leeanne Aguilar 45:40

Thank you. And for our listeners, if you enjoyed this episode, please subscribe to Industry Ignited and tune in to the next one, where we've got more leaders and innovators bringing real solutions to the manufacturing world. Until next time, stay bold, stay curious, and keep igniting industry.