Todd Wanek: Technology and Talent in an Industry 4.0 Workforce

An interview with Matt Kirchner and Todd Wanek, CEO of Ashley Furniture Industries

Matt Kirchner 

Joining us this week is Mr. Todd Wanek, Ashley Furniture Industries’ CEO who assumed day to day leadership of the company in 2002. You know, Todd, in the time I’ve gotten to know you, I’m amazed at how committed you are to innovation, especially in the fields of advanced manufacturing, automation and data driven production in retail. So I know our listeners this week will gain tremendous insight from you as well. Thank you for being a part of this episode of The TechEd Podcast.

Todd Wanek 

Thanks, Matt. It’s an honor to be here.

Matt Kirchner 

We’re going to talk a little bit – actually quite a bit – about technical education, about the current conditions and the current goings on at Ashley and their investments in education, their investments in their business. 

I remember standing outside in front of the Ashley Technology Maker Center a little over a year ago with you. I know how important the world of Industry 4.0 is to your business model. So as we kind of build on Ron’s discussion about technology and automation, how do you see technology continuing to change the business in the coming years?

Todd Wanek 

You know, I want to talk a little bit about Ashley and who we are today. So Ashley is a vertically integrated manufacturer of home furnishings. We’re the number one manufacturer in the world. And we’ve had that honor for almost 20 years. When I talk about vertical integration: we do everything from buying the cow hides to tanning the cow hides to eventually taking them into finished furniture. We make plastic parts for our furniture, you name it, we do it. We really control a major part of our supply chain all the way through the delivery of the furniture to the customers. 

Todd Wanek 

And you know, one of the important things that we talk about a lot is Ashley is a maker. Very few companies in today’s world are makers – manufacturers. And a lot of people are resellers: Amazon’s a reseller, Target’s a reseller. Being a maker is something that we take as a true honor. And we’re privileged to be a manufacturer and privileged to be a manufacturer in the United States.

How will technology change manufacturing?

Todd Wanek 

Industry 4.0 to be successful has to be part of every business model. You can’t be in business today, unless you’re really involved in technology. One of the ways that we look at Industry 4.0 is how is it going to advance our business take us forward? And you know, we’ve we’ve made major investments in technology, whether it’s artificial intelligence, OMS, as well as robotics and Internet of Things on the shop floor. Everything’s getting connected. And that’s really what industry 4.0 means to us. It’s taking consumer data connected together with our product demand; taking the product demand driving our factories to make sure that we put the right technology in place, then making sure inside of our factories, we’re using robotics and automation to be as efficient as we could possibly be. 

Just to give you an example, we have over 800 technologists – IT people – that work for our company around the globe. So really have the capability to make an investment Industry 4.0 is really important. And we continue to lean forward and lean into that and put more people in place to be able to drive that technology forward. But it’s not just about buying a robot, it’s about determining how it’s going to fit together with your manufacturing operations, put all the technology pieces together, be able to drive it forward and implement it.

Matt Kirchner 

And that part of the model is just so important is making sure that not only that we’re investing in technology, but that it has an application. We’re not just doing it for the sake of automating or for the sake of technology, but that it’s actually benefiting the business, helping us to continue to fix the barn before we fix the house as Ron would say.

How should manufacturers adapt to remain relevant?

Matt Kirchner 

Todd, running such a gigantic enterprise as Ashley Furniture Industries is, I think sometimes people don’t have an appreciation for the fact that you know, they see the the accolades, they see maybe the benefits of of running a big business. There’s a lot of things to worry about when you’re kind of steering the ship. What are some of the things that you wake up at at three in the morning, if you do – I know I do some days – and have a hard time falling asleep again, because you’re worrying about a little bit? What, and especially as you look to the future, what’s on that list?

Todd Wanek 

Well, there’s a word that we use a lot, which is being relevant. And you got to be relevant as a company. And you know, Ron’s phrase about fixing the barn before we fix the house is true to us. You know, relevancy means a lot of things, it means you got to be relevant in design of products, you got to be relevant, your customer experience, you got to be relevant to your factories. So I worry about that. 

And, you know, we make a lot of investments to make sure we are relevant. We do a lot of research to make sure we are relevant. Matt, you’ve been on some of the trips that have been done overseas. You kno, the research you’ve got to put in place to be able understand the latest technology. So it’s really having the curiosity to understand what’s changing in the marketplace. 

And I’ll be honest, this whole COVID experience has been absolutely unbelievable. We call it a year of learning, you know. You can call it a lot of things; it’s been a year of disruption. But it’s also been a year learning. And we probably pulled forward five years, as far as the changes that need to happen to manufacturing. Let’s just talk about a factory floor. So a factory floor, you can’t have, you know, people side by side anymore. And that’s where robotics and technology have helped out a lot. Because you’re able to distance people more so than, you know, a typical assembly line building furniture.

We’ve had to really evolve to stay relevant and find different ways to do business, whether it’s how we manufacture, how we distribute, how we sell in our stores, how we communicate with our customers, because it’s different today. And then the expectations of the customers are changing every single day. How they want to get delivery – you know, I live in Florida, and in Florida, I can buy something at Publix and get delivery in two hours. You know, that’s just amazing. So we call this a law of reflection: that if somebody gives you a service that’s significant, that’s what you expect from other companies. And that’s something that’s going to put pressure on every enterprise in every business is the fact that you’ve got to be fast, you’ve got to be dynamic. And you’ve got to make sure you’re relevant going into the future.

Matt Kirchner 

Without question. And especially in this current age. You know, I had an interesting discussion with the Provost of one of the great universities in the state of Wisconsin not long ago, and his observation from an educational perspective was that COVID has expedited change in the world of education at least 10 years. 

Todd Wanek 

Yes. 

Are robots going to take all the jobs?

Matt Kirchner 

And we’ve certainly seen that in industry as well. One of those changes is certainly automation. You touched on that you touched on the value of robotics and automation and keeping employees safe as they continue to work in a manufacturing environment. Now, I know that in reading the touchstone philosophy that hangs in the manufacturing plants of all of Ashley’s facilities, a sense of security in jobs for your employees is implicit right in that touchstone philosophy. And we get questions from time to time from folks that say, look, in the wake of all this automation, are robots going to take all the jobs? Are we still going to have jobs in manufacturing? I certainly have my own philosophy on that. I think it creates opportunities, but would be really, really interested in your insights on that question.

Todd Wanek  

Certainly, I don’t think robots take all the jobs. I think that that’s where the reskilling of America needs to come into place. We’ve got to reskill people. The robots are going to be certainly taking some of the day-to-day repetitive jobs away, no question. But now you got to start using your mind in different ways. And I think that quite honestly, properly deployed, robots could add jobs. But it’s a different job, it’s a technical job, and making sure that people have the technical skills to be able to adapt to the technology. And not just robots, it’s also everything you’re going to have on technology for IoT: you’re gonna have sensors, you’re gonna have information coming at you in different ways, you got different maintenance schedules that you need to fly with, you know, with robots. And a lot of things like that are going to be essential for the workforce going forward. So there’s massive changes happening. 

And, you know, our concern is, how’s the educational system going to transform itself to be able to keep up with this rate of change that’s going to happen in manufacturing, and really, in every industry? The technology platforms that are being developed and built are very robust. You know, when you start thinking of artificial intelligence and machine learning, and what that’s gonna do, and the information that that’s going to be at people’s fingertips, it’s a question of how you’re going to take it and make it actionable, who’s going to interpret it, and who’s going to make it actionable to make sure that change can be effected in the company and in the business.

Matt Kirchner 

And those advancements in technology continuing to change workforce needs for Ashley Furniture, continuing to change the competencies and the skills that you’re looking for. And it sounds like at every single level of the enterprise, from an entry level employee, to a technician, to somebody working in IT, to an engineer and so on. What are your biggest challenges, Todd, in finding great people to work in your facility, certainly here in the United States, and because you’re a global manufacturer, all over the globe?

Todd Wanek 

Well, we have a saying at Ashley: we hire for attitude and we train for skill. The first thing we want to do is hire somebody that’s got a great attitude, believes in the future, believes in our company, and then we want to train them up, and we want to get them educated within our organization. And, you know, we spend a lot of time and energy on that. You know, we know we’ve got to reskill people as they come to work for us. So you know, we’re hoping that the educational system gets caught up here shortly. And we’re able to find people that actually have the skills that are needed. 

But it doesn’t matter where you are, whether you’re in a factory, whether you’re an office, whether you’re in a store, whether you’re in a distribution center, the technology is changing fast and furious. And we’ve got to teach people how to adapt to that technology. We got to show them the way, so to speak, and we got identify the educational needs that they need to be able to get caught up. 

And you know, we’re putting in so much technology right now it makes your head spin. Ashley Furniture is investing a billion dollars back into our company over the next 18 months. We just made that announcement. That’s typically a three to four year investment for us as an organization. We’re doing in 18 months. We’re putting physical infrastructure in place as well as new OMS, TMS, robots, IoT sensors, RFID, many things like that that we’re doing. And we’re also making significant investments in 3D printing. We’re really trying to understand the future of 3D printing. And right now we’re doing machine parts in our business. But we see that evolving over time to more parts and more materials as that gets more advanced.

So it’s really very significant as far as the changes and how you keep everybody up to speed. We have a go and see mentality in our business and our company where we want to go and understand the technology, what it is, and then how can we execute and implement it. And, you know, COVID’s certainly been more of a challenge for us. But we are a company that wants to make change. And we believe in change. We also believe in adopting technology. And we’re hopeful that the educational system gets caught up to that very quickly.

What does the US education system need to do to remain competitive?

Matt Kirchner 

Which provides I think, a perfect segue into the next topic of discussion here as we wanted to talk a little bit about your support of education, your support of training. We work with companies, organizations, educators here at The TechEd Podcast all over the country. And I think Ashley just provides a shining example of making investments in education. I know that you are a results-driven organization, you are an ROI driven organization as you should be. And so it’s not just about putting money into education, but making sure that we’re getting value out of those investments. As you think about all the investments that you’re making on the education side, can you tell us a little bit about why that is so important to Ashley?

Todd Wanek 

Well, number one, Ron talked about the global perspective that we have in our business. He talked about China and other parts of the world that were involved in Vietnam. We see a rapid change in their educational system, specifically in mainland China, and how they’re focused on engineering and technologies and, you know, machine learning, and developing that capability within their educational system. So you know, number one, we think that the US has to make a significant quantum leap in what education and what we’re teaching people. And you know, that the beauty of what China’s built is when they say, we’re gonna do something, and they go in deep, and they go in hard, and they transform the whole system. That’s part of their culture, it’s part of their government, is they decide they’re going to do something, and they go after it very aggressively.

Matt Kirchner 

Right. 

Todd Wanek 

So we’re very concerned about the US competitiveness, and the US and the fact that they’ve got to keep up. And that’s one of the reasons why Ron is so active in this whole educational system is because he sees us losing a major advantage in the world if we don’t start really transforming education, and the mindset of how we’re educating people and starting to look at the new technologies. So the why behind us is number one, we want to see the US be successful, we want to see it to be strong, and we want to see it be a leader.

Number two, it’s to help our company. We want to make sure that we’re creating value for our organization, at the same time as the US economy, because what’s good for us, you know, in manufacturing, because we have to have manufacturing in the United States to be successful. That’s what creates wealth. And we want to see our company be successful as well. So really, there’s there’s two pieces, which is we’ve got to compete with the rest of the world, we’ve got to go faster. And then we want to see our company continue to advance and progress.

Matt Kirchner 

And it’s clear from your your comments, Todd, that, you know, as we look at how do we continue to compete on a global basis? How do you continue to reinvest in in personnel and then qualified individuals to work in your manufacturing plants in IT, really across the entire business, that you feel as though there are some things that we can be doing in the world of education that we need to expedite that maybe we can do better? Inasmuch as I know, we have a number of technical educators that will be listening to this podcast, if there were two or three ways that those individuals working in technical education should change how they approach preparing students for these new careers and for the future of work, what recommendations would you have?

Todd Wanek 

Well, number one, I think we’ve got to stop waving the flag and think that we’re winning; we’re not winning. So I think the first thing that’s got to happen is everybody needs to understand there’s a sense of urgency that’s needed. There’s got to be a transformational mindset that comes into education. I would think that, number one, you need to understand how businesses are adapting and changing. And, you know, realistically, you know, we’ve got to make sure that our educators understand how it’s changing. I would really, really think it’s important that they understand technology, not just robotics, but also computerization, and software and machine learning, as I said earlier, and what impact that’s going to have on the world and in the worker the future. And I think they’ve got to read, they’ve got to understand what’s happening. 

Sometimes we get caught in patterns. And the pattern of doing the same thing over and over again, isn’t going to work for the future. We’ve got to make sure that we’re transforming education in a way where you look at what’s happening, you look at the changes that are happening in the economy and with business and technology, and determine how the education is get aligned to it. Because right now, it’s not aligning to the needs of the businesses.

Ashley Furniture’s investment in employee reskilling programs

Matt Kirchner 

And you talk about looking at those patterns and looking at how the world of education is changing. One of the trends that we’re seeing, especially in the wake of technology advancing as quickly as it is, is that we’re no longer in a world where you can earn a high school diploma, earn a technical diploma, associate’s degree, bachelor’s degree, really any level of education and figure that that is the end, that now we have our education and we move on into into the workforce. That whole world is changing. I know that Ashley continues to make significant investments in the continuing education, the lifelong learning of your workforce. One specific example is the Advanced Technology Maker Center in Arcadia, which I think is a shining example of how a company can invest in the future of its incumbent workforce. What was the spark for that effort? And how do you see lifelong learning in Ashley Furniture?

Todd Wanek 

The Advanced Technology Maker Center is a shining example, as you said, of what every company has to do, and what every educational organization needs to do, whether it’s technical or at the college level. You know, we really believe that it’s important for us to make sure our workforce is really skilled. And this is a whole reskill process. How do we reskill our people to be able to deal with robotics and automation? It’s not just for maintenance, but it’s also for operators. Because we believe that the world that we’re entering is going to get our operators to a point where they need to be reskilled. Because it’s no longer putting screws in, it’s working with a robot that’s going to put the screws in, and then making sure that it’s operating. The uptime on the robots needs to be significant, right? It’s got to run as Ron said, 24-7. So we’ve got to get technical capability within our business and within our company to be able to do it. 

And we’re just not getting in the clean handoff on that from the technical schools today. So we felt okay, well, we can either be concerned about that, or we could do something about it. And we decided to do something about it and put in a major investment in a new Advanced Technology Maker Center and re-educate our people. And we’re starting that effort, making a lot of progress. 

We also did a Mobile Skills Lab for the local high schools that goes from school to school within our Wisconsin operations. So hopefully, we can get the high school kids educated, so they’re ready to go to technical school. And that also goes hand in hand with the investments we’re making together with the technical schools to advance them as well. But our whole objective behind this, the spark is, you know, we said we’re not going to be a victim. We’re going to take an aggressive approach. We’re going to build an Advanced Technology Maker Center. We’re going to reskill our workers. Because it’s important for us. You know, people work for people and people work for companies that they believe in. And we want to make sure that our people that have been with us for many years have an opportunity to get new skills, and advance as the company advances.

The future of new energy in manufacturing

Matt Kirchner 

The Advanced Technology Maker Center and the Mobile Skills Lab, they’re both just great examples of innovation in technical education. Those aren’t the only ways that Ashley is innovating. I think on my last trip to the ATMC, Todd, I drove by a huge sea of photovoltaic PV panels, if you will, solar energy becoming so very important. And we’re huge believers here at The TechEd Podcast that technologies, so called behind the meter technologies, which are, you know, separate from the grid are going to be huge innovations and huge disruptions in the world of energy. In the handful of minutes that we have to share some ideas with us, can you talk a little bit about your investment in alternative energy and why that’s important?

Todd Wanek 

Yeah, well, you know, I think it’s important to be a good corporate citizen, and to make sure that your carbon footprint’s as small as it can possibly be. So we have installed electricity or solar into 10 of our facilities. And it’s making up 35% of our energy needs. And we’re very proud of that fact. Now, we believe that getting behind the meter is incredibly important. As this green new deal comes forward or sustainability comes forward, we’re going to make sure that we do our best to have a good carbon footprint or a small carbon footprint. Not only solar is important for us, but all the other mandates that we have in our business for sustainability and conservation. You know, we do a lot of recycling, massive amounts of recycling. We heat our plants in Wisconsin with wood waste, which again, allows us to have a very low demand for natural gases as we come into the winter months in Wisconsin. And, you know, we recycle metal, office paper, polyfoam, cardboard. We’re very, very astute on this. And we know that it’s our responsibility to make sure that we’re a good corporate citizen. And we have a sustainable footprint not only in the US, but really around the world.

Matt Kirchner 

And is that creating career opportunities as well in the world of alternative energy as Ashley sees it? 

Todd Wanek 

Oh, absolutely. You know, we have eco-friendly products that we build. There’s a lot of sustainability that we put in place with electricity. Obviously we put solar panels in place. It takes a whole planning process to be able to go underneath it. We’ve got a very robust plant engineering department that works for our company because we’re building projects continuously and also looking at electricity consumption continuously and how we can be more responsible as an organization. So lots of opportunities for Ashley Furniture as well as every company in the United States.

The role of reinvention in business and education

Matt Kirchner 

And as we wrap up our time today with Mr. Todd Wanek of Ashley Furniture Industries, you probably want to share a couple final thoughts here – anything, any reflections on our discussion that we’ve had on The TechEd Podcast today that you want to share with our audience before we close out our time?

Todd Wanek 

I want to hit one other topic here real quick. Reinvention is something that’s very important for every organization. We talk about reinvention of a business model, we rebirth ourselves. So we believe that every business goes through a lifecycle very similar to a person. You’re born, you become a toddler, you reach your own maturity, and then eventually decline and die. Right? Once you hit that zone of maturity, you want to stay there as long as you can. And then you want to constantly rebirth yourself, in other words, come back, and rebirth an organization. So we believe in that as a company. That’s why we make the investments that we do in our in our technology, in our people, in our business, in our infrastructure. 

And the same thing has got to be done with education. Education needs to be reinvented constantly. To teach the same things that have been taught since the beginning, are really, really tough. You got to constantly transform and adapt. And that’s really what I know you’re after Matt, is how do we make this better? How do we improve it? But it really does come back to a reinvention of challenging everything, everything that you do and everything that’s been done. And you know, that paranoia – I talked a lot about paranoia – you have to have paranoia, whether you’re in business, or whether you’re in education. What’s changing, and what’s evolving? And how do you change with it, and hopefully in advance of it, before you become obsolete?

Matt Kirchner 

And that is such a great, great message, Todd. I recall actually being in the room with you, a number of others. At the time the state of Wisconsin’s Governor Walker and candidate for Governor Tony Evers, who’s the current governor, in hearing that message of rebirth. And I think the point is, regardless of the audience, regardless of political agendas, regardless of really any of that, that whole idea of continuing to rebirth an organization – whether that’s a the largest furniture manufacturer in the world, whether that’s an educational institution – so very, very important, because none of us are going to remain at the top for very long, unless we continue to find ways to reinvest. What a great point that that you just made. And that stuck with me actually, in the three or four years since I heard you make it the first time. Are there any other items that are on your on your mind here, Todd, as we close out our timer that you think our audience needs to be aware of? I want to make sure that we extracted everything from your brain that we possibly can for the benefit of technical education.

Todd Wanek 

Again, I just think that that rebirth concept is what’s got to be thought through and then having a paranoid mind. And you know, looking at what’s happening around the globe, and making sure that you’re competitive. Because education is an industry, you know. It’s a business; your job is to educate the youth of our country and make sure that they’re ready to keep the country competitive and companies competitive with what’s happening around the globe. 

So I think that’s the most important piece that everybody’s got to grasp and understand. It can’t stay static. It’s got to evolve, and it’s got to change. And I think if that mindset’s adopted and people are looking around corners and saying how can we get better? How can we improve? What do we have to change? Don’t get married to what you’ve done. You’ve got to change it. And you’ve got to have that that drive to say, how do we make it better? And how do we improve it? And how do we make sure that that our country is competitive over the long term? I think if that mindset’s developed, Matt, I think that would be a huge, huge change. 

Matt Kirchner 

And that is a great point, I think to wrap up our time on, in terms of the change in the evolution. Obviously making sure that technical educators are staying apprised of that change. Continuing to innovate is is a huge part of our mission here at The TechEd Podcast. I want to thank our guest, Mr. Todd Wanek, who is the CEO of Ashley Furniture Industries, sharing just tremendous amount of information and discussions about innovation and how that innovation in the world of industry, in the world of private enterprise has to be aligned in so many ways with the world of technical education and vice versa. Thank you so much for being our guest on this week’s episode of The TechEd Podcast.

Todd Wanek 

Thanks, Matt. Appreciate it.

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