[MUSIC]
In this episode of the Roadside MBA,
we're on our way to Adelanto, California, to visit Scott Turbine Mixer.
[SOUND] A small American manufacturer that makes the biggest blenders you've
ever seen.
>> You ready?
>> I'm ready.
[NOISE].
>> Where we test our talents with power tools.
>> Don't like children, I love them.
>> Play with fire.
>> I got it.
>> And find out how one tough little company beats back the competition with
process innovation, a highly skilled workforce, and
one of a kind custom made products.
[MUSIC]
We're cruising down Highway 99, headed for
Southern California, the land of sand and sunshine.
And the place we're going has got plenty of both.
[NOISE] Just not in the way you might think.
>> If there's the end of the world we may be very close to it.
>> The small city of Adelanto is about two hours drive east from the beaches of
Los Angeles, right on the edge of the Mojave Desert.
>> It seems like it's on the very edge of civilization.
All you see is flat, desert, and
a little bit of scrub, and there's not much else out there.
>> Welcome to the high desert beach community.
>> Thank you, Scott Schaffer, nice meeting you.
[CROSSTALK]. >> Yeah, Bill Scott.
>> But businessman Bill Scott says it's a perfect place for a small American
manufacturer to fly below the radar and compete in a tough global market.
>> How would you describe Bill Scott?
>> Bill Scott is a character.
>> Welcome.
We're at about 3,200 feet elevation.
Southern California and we have more sand than the beach does.
>> [LAUGH]. >> Bill's company,
Scott Turbon Mixer, has been here for 30 years,
making one of a kind custom stainless steel industrial mixing machines.
>> Pretty slick, huh?
>> Mm-hm. >> His customers use these massive
blenders to mix everything from salad mix to pharmaceuticals and soft drinks.
>> We would sell this little machine to somebody like Pepsi and
Coke, for mixing aspartame, sodium or potassium benzoate, caffeine, pectin,
you know, minor ingredients that go into, soda.
>> The central product and crowning glory of Scott's mixer is this,
an industrial mixing head designed by Bill Scott himself.
Unlike previous mixing heads that combines ingredients from the top and bottom of
the tank at the same time, effectively doubling the production capacity.
>> The upper cone or pump pulls down.
The lower cone or pump sucks up and it,
the discharge is actually across those teeth.
And that gives the sheer, so we're circulating, and we're sheering.
>> Bill patented his invention in 1980, which gave him a head start on
the competition, but his patent ran out more than 15 years ago.
>> One thing that I thought was fascinating about these guys is,
he had intellectual property rights, and
for a while that allowed him to kind of milk the patent, if you will.
But the patent ran out.
And now, there's no more barrier to entry.
Somebody can come make the exact same mixing machine.
>> I think the patent gave the company a big head start, a 17 year head start.
But the patent itself and that head start isn't enough.
>> Now that anyone can make the same mixer head,
Bill knew he had to do more to keep customers.
So he decided to become a one stop shop for the whole mixing process.
>> One thing you see out there is how vertically integrated this firm is.
They are not focusing on making mixer heads and
buying parts from other companies to put the whole system together.
They're essentially making the entire mixing system from scratch themselves.
>> But to make a complicated, high quality customized product, you need employees who
have stuck around long enough to learn the tricks of the trade.
>> Making these one off machines means that processes can't be standardized.
You're almost never doing the same thing on consecutive days.
And it means that the company needs a relatively high skilled workforce.
>> Jay is making a plastic bushing.
Jay is a really good manual machinist.
It takes a high skill level to make manual parts, very high.
Now we don't wanna let Jay know that, that we really depend on him.
[LAUGH] >> He probably knows already.
[LAUGH] >> Bill keeps his
employees around by offering job security in a remote area with high unemployment,
where his workers can provide for their families and afford to buy homes.
He wants to make sure that he always has an experienced workforce, so
he hasn't laid off a single employee, even during the Great Recession, 2008 and 2009.
>> Jose's been with me for over 20 years.
>> 25 >> 25 years, excuse me, Jose.
[LAUGH] >> You can't do it without them and
retraining employees is extremely expensive and very disruptive.
So as an employer, it's incredibly important to me,
if they're good employees to keep them as long as I can.
Give me eight hours of good work, and I,
in turn, will make sure that there's bread on the table, and you can plan your life.
>> He has a large share of the workforce, that has been here 15, 20, 25 years.
And, that's really important because to create value for the customer,
he needs to combine both the technology with the experience of the workers.
>> And these loyal, highly skilled employees, make a very high end mixer.
One that a competitor with a less experiences staff can't matched,
even after the patent has expired.
>> I focus on high performance.
There's a segment of the population that will buy a Ferrari or a Lamborghini, or
a Porsche.
That's the customer that I focus on.
>> Bill says he refuses to cut corners using stainless steel just for
looks rather than cheaper plain steel.
>> Not only do you want it highly functional and the last, or perform, or
do whatever you want it to do.
But you want it to look good.
>> Could you replace a lot of stainless steel with-
>> Absolutely I can.
Yeah, steel.
Absolutely.
I can make almost all my machines steel.
The problem is what are they gonna look like in six months or year.
>> Well, what about even plastics or-
>> It's not me.
It's not me.
>> So one by one, each machine is polished to mirror finish.
And every single weld is carefully buffed smooth.
>> Here, here, and
you can see it what they looked like before he started to grind and polish 'em.
Look at this weld.
Thing is perfect.
>> I take a lot of pride in the way that our equipment works.
It's assumed that it's gonna kick butt, but if it looks great,
compared to all the other equipments in that factory, it just sparkles.
And you saw these big machines.
They're beautiful.
As machines go, they're drop dead gorgeous.
[SOUND].
>> So how hard is it really?
What goes into making the Ferrari of mixers?
I got a chance to find out myself.
We started in the polishing room.
>> This is like, I feel like the flight attendant.
Giving the little lesson on the airplane.
[NOISE]. >> You ready?
>> I'm ready.
[NOISE].
>> That's cool.
How'd I do? I had the mask on upside down.
>> So, one of us knows what he's doing.
>> Do I need to redo it?
>> [INAUDIBLE] >> Don't tell anyone.
The other job I tried was welding.
That's really hard work.
>> [SOUND] Get as comfortable as possible and make a practice pass.
>> The guy who showed me how to do it has been doing it for two years and
he said he's still not nearly as good as some of the people who have been doing it
a lot longer.
[NOISE] Tell my children I love them.
I had visions of my finger being zapped, and, going up in smoke, but,
I was probably more careful than I needed to be to make sure that wasn't an issue.
What'd I do wrong? >> You have to hold it down.
There you go.
You're touching it.
>> Turns out I am not a natural.
>> Glow it. >> I got it.
And finally I'm welding.
Sort of.
I can tell you that after doing it for ten minutes I, I'm terrible at it.
I welded this however.
But, you know, even that is not quite true because the guy who showed me how to do it
did most of the work.
[LAUGH]
>> You couldn't look at the welding directly because
that's dangerous if you're not wearing your helmet.
I didn't see the welding as much as I saw the output and
I think that he needs a little bit more training on that.
[NOISE].
>> Did we shoot enough?
[LAUGH] I'm not very good at this.
Oh well. So much for
my dream of a second career as a welder.
Working on the shop floor has given me a newfound respect for
the craftsmanship that goes into making these mixers.
But creating a quality product is only part of the challenge of
building a successful business.
>> Before we got to the factory floor we saw a little tour of their office area.
And it was interesting to me how the office area was organized as well.
They had some sales people and some people who were quoting jobs,
and across that area, they had the engineers who were working on the design.
And that's really important in a company to make sure that you don't
produce things you can't sell, or sell things that you can't engineer.
And I really like how they were able to keep that communication together.
>> This is a business where,
it's really important for somebody to be talking to the customer and
really understanding what's going on, inside the customer's processes.
And that's a role that Bill himself has played for many years.
>> You can't get away from the customer.
A lot of people, you know, close the door, they take two month vacations,
they do all these things, and it's a wonder, I'd love to be able to do that.
In my opinion,
though, you can easily lose track of what the essence of the company is about.
>> With so much competition out there, understanding customers and
their needs is the key to making each and every deal.
And then there's confidence.
As the driving force behind this company, Bill has plenty of it.
>> Dan, one of my guys, was asking me today.
He says well, what happens if this went away tomorrow?
And I said Dan, there's so many opportunities out there right now.
It'd take me a couple months and I could figure something.
They're everywhere opportunities.
>> One of the things we like to ask at the end is, what keeps you up at night?
>> Nothing, I'm, I'm sleeping.
>> [LAUGH] And that's it, one man in a mixer.
And three economists, an RV, the open road, and a lot of time together.
>> There's no NPR to be had out here.
>> Yeah.
>> I couldn't find anything.
>> Next stop,
a desert dude ranch in northwestern Arizona, where people just like us
leave the cushy city life behind to see if we have what it takes to be a cowboy.
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