Dan Rexon: Future of Manufacturing and robotics in Packaging| Precision Automation
Transcript of our interview with Dan Rexon, building Precision Automation
Dan Rexon
Yeah, so we're over 75 years old. And it's really an organic growth story. My grandfather started the business in 1946. Following World War Two, he was in war industries working for for companies that were supporting the war effort at home, a machinist by trade. He basically went out on his own and said, I'm gonna start a machine shop business. So with a mill and a lathe in his garage, he started working around the Philadelphia area, Camden County, New Jersey, started in Haddonfield, New Jersey. Basically, chasing smokestacks in the area was trying to see how he could support industry all over the region, Delaware Valley region primarily, and, you know, just a kind of a lot of effort and will to do. He built the business that way and over time, slowly and surely adding resources and capabilities, adding machinist, adding some pieces of equipment, having some successes with local companies in Camden and Philadelphia, grew to customers in New Jersey and Trenton and New York area and south into Delaware, Maryland. So it's really a blood sweat and tears kind of story that has grown organically over the years. He was a hard worker and built from the ground up in that way. And really, for the next 20 plus years, it was the business was founded as precision parts. He was always searching for, you know, making parts. But as he grew over time, customer base grew, repeat customers grew. We turned into more of an automation company. And about the late 70s We changed our name to precision automation company rather than precision parts to reflect the focus of of automating facilities, providing machinery a purpose built equipment, still with the backbone of the machine shop, supporting customers in that fashion but also adding value to them by providing equipment as needed or sub assemblies or complete machines. In the early 50s, in 1953, he followed an existing customer of his it was General Electric out of Trenton, they went to Louisville and opened up appliance Park. And to maintain that customer he opened up a second shop in southern Indiana. Not not too dissimilar from how we're in Jersey to Philadelphia, Clarksville, Jefferson Ville area Indiana's across the river from Louisville. So he opened up precision parts Indiana in 1953. To support that customer and they've been in business for since that point, they're only a couple years younger than we are here in New Jersey. But over time, it was always a precision parts New Jersey and precision parts Indiana and the Indiana facility now does business as Paco manufacturing. I know that that was a question for you later on. But it kind of fits into our story right. You know, a couple of probably about 20 years ago, we rebranded the Indiana facility to be PECO manufacturing, the reflect their focus in manufacturing equipment for customers and focusing in the Upper Midwest market, Louisville, Kentucky, Indiana, Illinois, Michigan, to see kind of that area of the country. But nevertheless, back to New Jersey, organic growth over those years and really just by adding capabilities adding capacity. We move multiple locations to have larger shops in bigger areas from she's simply hiring engineer to design and build custom pieces of equipment. Basically, a customer would say Hey, this is our town. And this is our, our need and we would circle the wagons get the engineering team together determine the best way to achieve or to satisfy their needs. And that was kind of our plan for many many years. in about the mid 80s, we started a conveyor integration department or division of our company where we were going to supply conveyor systems to our customers, it was very often that a machine was built for a customer and you needed to convey the parts or pieces or product to and from our machine, whether it was an assembly system or a packaging system or you know, a pick and place system whatever it may have been through the years, product has to come in and complete product has to go out. So there was a synergy with the conveyor integration aspect. And that division of our business is still today a growing area. conveyer and material handling systems are a large chunk of who we are and who we want to continue to be. We had, you know, we acquired businesses, and divested them over the years. For one reason or another as growth opportunities for us. We have, I think it was about 2007, we started working with an Italian company in Milan, called ARCA. And we represent their line of pressure sensitive labeling machinery here in North America. So that's a, you know, another synergistic partnership that brings us into packaging in a way that we hadn't been. Being a solutions provider and automation company, as a wide range of solutions for our customers speed them in many different ways. But with Arca, we offered a product so to speak, a product line of pressure sensitive labeling machinery print, apply machinery, they have laser marking equipment, and that was a tangible foothold in packaging machinery. And we still work with our kids today their growing area of our business. Well, that's very much synergistic with conveyors, labeling packaging machinery. And really today, we are a pretty vertically integrated company with all the experiences built up over those years, the machine shop is still the backbone of our company, conveyor and material handling integration is a strategic focus and a growth point. But as much as anything else now, in this day and age, we talk about automation, people think robotics. So we are growing in the robotics space. And that's a major focus for us moving forward. The last decade, I would say, going back, we've worked with robotics back into the 80s. But they were a more challenging piece of machinery to work with for programming for setup, very expensive. In the last 10 years, robotics have taken off tremendously. And they're cost effective, they're very easy to program. They're They're easy to install, and support. And there's many, many options for us. But that's a growth point for our business. And we try to look at automation solutions through that lens these days. Because we can really tackle unique challenges through that flexible automation space in a way that designing and building a purpose built machine. be necessary. Now robotics can really take that space in a lot of ways. So that's precision automation. In a nutshell. I tell my customers that there's a lot of different ways we serve customers, whether it's machine shop parts pieces, conveyors, robotics, custom built machinery, any combination thereof, or areas that we are not specifically marketing, we have the ability to support through our engineered based approach our engineering group very strong mechanically and electrically. And they're really the backbone of our future of our business in terms of integrating robotics, conveyor, complete system, warehouse, so forth. So it's a quite complex market sell because there's so many different ways we can support our customers. But moving forward, our major focus is material handling, integration, and robotics.
Neil Kanakia
I was gonna ask you about trends, but you kind of answered that question. Do you guys primarily only work like in the US, or do you also sell internationally or do you procure raw materials internationally?
Dan Rexon
Yeah, good. Good question. Primarily, we focus here in our North America. We've had businesses in the past, and we have customers that bring us to Europe, to South America, but it's it's few and far between. Really, we're not a huge organization. There's about 60 of us here in New Jersey and 30 in Indiana. So we're big enough not to be small, but we're too small to be big, so to speak, which, you know, really, we do our best work where we can support our customers more locally. Between the two locations, you know, New Jersey, here, we cover the Northeast and the Atlantic seaboard very well. We can offer high quality, fast service and support with Paco in the Upper Midwest, you know, we support that area of the country very well. Primarily, we are a an account based type business where our customers may have a headquarters in New Jersey, and we'll do project for them, we'll design the system forum where we'll put together an integration project for them and find success. Maybe it's in New Jersey, Pennsylvania, but they have a facility in Ohio, or Nebraska, or California. And we build on those successes. And these companies bring us different places. So it wasn't more than a year or two ago, we had a large project in Nebraska, in Ohio, and in California, all with customers that started more locally, they met us more locally here, but they have 568 15 facilities maybe. And they brought us to different areas of the country. So we serve, we typically would say that we serve North America. We're into Canada for some customers that bring us there and into Mexico for others to bring us down there. But North America is really where we where we live in terms of procurement, typically in North America as well. I mean, obviously, electrical components and controls components are coming from typically Asia, but we procure them here in the US through their their local distributors.
Neil Kanakia
You have a lot of experience with like lead generation and finding new customers that primarily through building relationships with people or does it also does the the online aspect of it come into play? Or is that really not a big percentage of the way leads are generated?
Dan Rexon
Our business has been built on on referrals and repeat relationships. That's really been the basis of our of our customer base. And, you know, we might have contacts that move from one business to another and bring us with them. We tend to do a lot of repeat business. We're proud of that, you know, we have you build strong relationships with our customers. Yeah. But other ways that we generate business, we go to packaging machinery, we chose as well as material handling trade shows, we usually have one or two shows a year, either at modex, or pro mat or PAC Expo, pack Expo East for example. This year, we're going to be in Las Vegas for PAC Expo. And then in March and November next year, we'll be in Philly, Pac Expo East and pack Expo International, Chicago. So trade shows are big because we get a chance to show ourselves amongst other industry amongst, you know, everybody in the industry, and differentiate our products and services. And in that space, we generate many opportunities and many customers. But But absolutely. Today, we spend a lot of time and effort on our online marketing or SEO efforts. Our website was revamped a few years ago, we get quite a few inquiries on a daily and weekly basis. And really, if you think about it, how often have you searched for something where you didn't just go to Google to find what you wanted to find? There's some targeted prevention Sure, but at the same time, increasing our search engine optimization and presenting our website and products and services in that way generates quite a bit of business for us.
Akshay Lulla
You mentioned the trade shows. But in terms of recruiting people, the trade shows, have they been helpful for that? What are ways that you can like make this industry like more appealing towards younger people?
Dan Rexon
The trade shows are definitely a good way to show packaging as are the material handling as because I guess it's not the sexiest thing to sell or to talk about right and keeping people in it. The videos are a great way to see that I mean, I'd encourage you guys to go to PAC Expo East in Philadelphia next spring. You'll see you know you'll see machinery you'll see robotics see compound units see, you know, AI introducing into our business in a lot of ways. But it's good way to see that they're, you know, building machinery and packaging is, is cooler than you would discuss, right? It's how things are made or fascinate a lot of people, engineers or myself, I'm fascinated by it, you know, people often you know, they say, What do you do and I say you've ever seen how it's made, you know, we make machinery that makes things. And you might see a machine that makes pretzels or a machine that putting together electronics, and those pieces of equipment are how are you know, where we live? We consume a lot of stuff and how good mate has a computer get me? And how does it sell for me and how to pens get assembled? Right? That's all automation. So once you enlightened people get them see it, it becomes much more interesting. You will see quite a bit of college individuals at face shows learning and becoming interested in our industry in that way. So yeah, good question. Actually.
Neil Kanakia
Part of the reason we created this blog and newsletter is to get the younger generation, or Gen-Z to even to even know about these industries, because not many of us even know that. This kind of industries and opportunity, because against talking about the sexy like, AI or everyone goes into finance after graduating.
Dan Rexon
Yeah. And I didn't really you know, robots are very interesting to a lot of people in how diverse they can be and how useful they can be in this industry. Is, is, I think, a point for younger generation. You look at automation, as robotics, right? people more likely to be interested than old school automation, or machine shop type work. Right?
Akshay Lulla
Yeah. In terms of like robotics and automation, I think there was an interview I read where you mentioned, vision systems is something that you have been following. So what is like, some of the, like, direct app? No, like newer applications that you've seen in that space? In terms of?
Dan Rexon
Vision is rapidly advancing as well. And that's, you know, Vision guided robotics, the integration of vision, high, high, highly sophisticated vision systems and robotics, I mean, in a lot of ways are finding, finding ways to replicate a human with with eyes and the articulation of hands. So it's, I find those instep together and vision has rapidly advanced the point where you can use it in ways you wouldn't have been able to attend years ago, they're also becoming more and more cost effective to but identifying products for assembly or packaging, you see the robots that are picking and placing food and beverage applications. You know, there's a lot of ways that vision is used in terms of robotics and vision guided robotics, but we use vision a lot for inspection, we do quite a bit in the pharmaceutical space. So we're using it for, you know, verification of date, unlock codes, and you can use it to ensure that things were properly sealed is obviously protecting, you know, medicines and stuff like that from tamper evidence is is important. So you're doing a lot of like double checking with vision in our space in the pharmaceutical space. And, you know, it's worth it's, it's worth its weight, right, in terms of making sure that what is supposed to be produced is being produced that way. But yeah, vision is an integral part of our business moving forward. Yeah,
Neil Kanakia
Do marketplaces like Xometry, or mfg.com. come into the picture in your industry?
Dan Rexon
Yeah, Xometry. I do have some experience with Xometry. And it's a it's a opportunity and a disruptive force in our space. And I've kind of gone around in circles with Xometry Because I can see them as both an opportunity for us but also as I see them as an opportunity as a supplier and a customer and I've used them in both ways. The ability to drop in a model, have a quote established, you know, in one second and purchase it at a very cost perfect price is attractive for, for me in terms of prototyping. And I want something really quick, I don't know if I want to, you know, prototyping in general, let's call it that. At the same time, I worked with Xometry. And I get emails on a regular basis, soliciting jobs, because my machine shop can make the parts for Xometry customers. We haven't done many projects in that way. Because it's quite cheaper than, you know, the way that our traditional machine shop would work. lead times are crazy fast. And a lot of ways you'll put a part in and they'll say you can have in three days. And I wonder, you know, how do we how do we do that? Because we need to procure material, fabricate it, inspect it, and send it. So there it's a very, very fast paced solution in our industry. I would say I see it as much as an opportunity for us to be geometries customer as I do as a supplier to Xometry customers. That makes sense. But I mean, a product built the way it's supposed to be your door and a few days. I mean, how can you argue with that at a good price?
Akshay Lulla
I have a few friends that have used it, and they really have enjoyed the experience. I'm sure that that does put, some time pressure on the machine shows that up to deliver that quick.
Dan Rexon
Yeah, we find, you know, there's opportunities that pop up on Xometry, for for larger quantities that were well suited for, you know, once we program apart, get it in our machine and produce it on a production level, you know, it's a very good option for us. The very cost effective very fast parts that you may see, hey, I want one or two of, you know, a shaft turned down to a diameter with a, you know, drilled and tapped hole in the end of it, for example, that's really good for the the mom and pop shops, hobbyist type machinists, who have a small piece in their in their garage, no overhead and, you know, taken up a $600 job to make four pieces, and I'll send it to you the next day. If I had a machine in my garage, I could do that when I get home from work and make a little side hustle. And I think there's quite a bit of their suppliers that are like that small companies that are self motivated individuals with the resources. Very nice to know the way you hone in on what you want to be want to have quoted to you or excuse me, literally to say that what you what type of work you want to put out, you can say, hey, I want to I work within this size space and send them and you put in all the parameters and you'll get opportunity RFQs from things within a very fine parameter. Oh, it's, I like it. I think it's great. And it works.
Neil Kanakia
In terms of software or in terms of trends of software, is there anything you guys use like ERP systems? How does that integrate into this business?
Dan Rexon
Sure. So we're, we're a job shop, without a product, so to speak, that we repeat on a production basis, we use an epic core product for ERP. That's a it's for job shops. So every project we have in the sign of project number goes through its processes, and the project is completed and the number is that it's assigned to it isn't past project. That ERP system works perfectly fine for us. There's other software's obviously, that would make sense for production type, you know, companies that make something on a repeat basis, but as a job shop, it keeps our it keeps us organized. It keeps us adhering to our ISO 9001 certification requirements. And it keeps us efficient. I mean, we need to be efficient in our space and for not that we're not going to be profitable in that way. So that software has been good to us. We've I think we changed over from an older Epicor Software about five years ago, perhaps recently updated our Epicor 10 system and it worked for us on a regular basis.
Akshay Lulla
In terms of like trends, what do you is there any type of like media that you use to keep up to date and stay ahead of things?
Dan Rexon
Yeah, we're active members of PMI, which is the packaging machinery manufacturers Institute, a growing organization collection of businesses like ours and packaging machinery, automation space. They're the ones who put on the trade shows but they also put on conferences and events and webinars and market research. So Well, we stay up to date on some of those market research opportunities that are presented to us we participate in their their manual meetings and their executive leadership conferences, where there's speakers and futurists and, you know, you connect with the industry. So you're really keeping a nice beat on what's happening in your industry. MHI, the material handling Institute is the material handling focus industry group. So really participating and staying current with those guys is a is a way that we're, we're on top of trends, I mean, otherwise, keeping your ear to the ground, you know, industry publications that are associated with those, you know, you're keeping up with those trends in that way. Another way is really communicating with our suppliers, you know, our suppliers have robotic systems control systems, you know, they're always putting out new products, new, new solutions. So staying up with them is the way that we're keeping ourselves moving forward.
Akshay Lulla
Sure, that's awesome. Yeah. Like, I guess the those associations are probably really valuable, because those positions that you're going to have those people that are probably going to be hard to find on the internet easily.
Dan Rexon
Absolutely. Yeah. Do you both in industries as well. So you know, you, you establish relationships within within those groups, and you go to an event, and it's, you know, like an old reunion after summer, several years, and you know, people and you're communicating with them, and it's a way you generate business, it's the way you collaborate in our industry. It's a way you can have too many friends in this industry, that's for sure. Yes, for sure.
Akshay Lulla
Do you use like Chat, GPT or anything in your day to day or no?
Dan Rexon
That's another really good question. I don't worry, I've been trying to determine what the best way that AI is going to work for our business. You know, I think we could use it for generation of marketing materials, we use Constant Contact for email. So you know, email blasts, so to speak. And they've introduced to AI content generators, which is, which is cool. It can crawl our history of previous marketing and promotional emails and generate new ones based on the nomenclature we use and the way we present our company, I have not really dug too deep into that I've tasked our marketing team with with utilizing that further, streamline your process take less time to generate promotional materials. But in terms of a day to day, no, I don't use it very often, we've entertained the opportunity to utilize AI in terms of like search, optimization, in that, you know, I'm trying to identify prospects and customers, I'd like to identify the individuals in those companies just to streamline my prospecting work. So we're in the process of evaluating options in that space. Pretty cost effective, and if it helps streamline my process of identifying customers, companies and individuals to contact their I'm all for it. And I think we will be moving forward on that. Here, if not within the next month or two. Because, you know, you could just trying to say I want to find a big pharmaceutical company in New Jersey, just going through traditional channels on, you know, search engines, or LinkedIn doesn't necessarily get you to the right person fast. That's not going to do the work for me in terms of selling our business and selling our products and services. But if it gets me to the right person quicker, I see that as a very valuable use of AIin our business.
Akshay Lulla
Yeah, definitely that, that I'm sure that like prospecting probably takes up a lot of time and this, like, how to cut that down. Like use it. I started using it a lot, but like not I mean, I don't use it like completely, but I like take help with it if I'm stuck anywhere, and like drafting any type of message, which is been like, really useful.
Dan Rexon
I wish I had it when I was in college, I would have been helping some papers or at least getting me going or something like that.