MFG Austin Ep 10: Rick Loofs, COO at Cangshan Cutlery

Rick Loofs was most recently General Manager for NOV in Cedar park but he took the opportunity to lead the development of Cangshan’s new Leander based manufacturing and distribution facilities for North America. Cangshan makes culinary knives found everywhere from CostCo to William Sonoma and now they will be made in Leander, Texas. Our discussion focuses on the size and scope of this new plant as well as Rick’s dedication to servant leadership, helping people achieve their best life, and how this approach changes the way he builds teams and gets results for the organization.

I appreciate that, Ed. It’s a pleasure to join you today. It is a really neat opportunity. Back in November, I joined Cangshan Cutlery Company as their chief operating officer and leader to establish their first US production facility. And that’s a really cool opportunity. A lot of things have kind of culminated in and through my career to lead to this point. It’s an incredible opportunity to lead the effort to build a new facility. And for me, I think even more exciting, to build a new organization from the ground up.

We’ve got about 29 people currently employed with the company. Most of those in California—office personnel and distribution center. About half of those will probably be relocating to Texas along with the company headquarters and primary distribution center. So, the facility we’re going to have is, I think, unique. It’s pretty exciting. Like I said, it’ll be the first US production facility, company headquarters, distribution center, and a retail site. And that’s definitely a new foray for me, having been most of my career in the corporate settings within aerospace and semiconductor and most recently oil and gas. It’s definitely a different path and one that’s very exciting to me.

Well, that’s a good point. And you know, I frequently said manufacturing is manufacturing is manufacturing. There obviously are different environments that we manufacture in. We’re using alloy steels. Typical and somewhat traditional manufacturing processes like grinding, heat, treating. What’s different is organization in a lot of respects. This is private industry. It’s consumer goods.

You know, we do some B2B, but we also do direct consumer. So, there’s quite a few things that are different about how we operate as far as the manufacturing goes. One of the things I’m really excited about is this is going to be a very advanced and automated facility. Probably, I would daresay, the most fully automated of any cutlery manufacturer in the world. We’ve got contract manufacturing agreements with a couple of CM’s in Germany and one in Japan. And then a lot of our manufacturing is in factories within China. This facility in the US will really kind of leapfrog from a technology standpoint a lot of the facilities around the world today, and we’re very excited about them.

It’s actually kind of a hybrid. We’ll have raw still coming in, both plate and coil. The coil will get straightened. They’ll go through some sort of cutting or vamping process. Then, depending on the knife design, we will have bolsters that are formed on them, and then profiles will be cut.

So all of those processes from the time that the materials loaded into the production line through that, we will be automated. Then they’ll go into a heat treat process. Afterwards, a grinding and sanding process, and then polishing ultimately. So the grinding and sanding cells will most likely be cellular and the rest of the production will follow more of a linear flow.

We’re going to try as much as we possibly can to not be batching product as we’re going through the production. So, things like heat conveyor systems for our heat treating will be a key for our process technology to keep things moving through the production line.

Yeah, for a consumer goods production facility, I think it is, even in this region. We’re certainly not going to be the biggest, but we will be sizable. We’re still in the design phase with the architect and general contractor, but it looks like we’ll be building about 400,000 square feet and about half of that will be manufacturing. Ultimately, we hope to have, and our plan is to have, about 700,000 square feet with a little less than half of it being manufacturing. Of course this’ll be our central distribution center as well.

And we will be manufacturing for two different companies. Cangshan Cutlery is the one that’s making all the press. That’s what we talk about a lot. The other is New Star Food Service, and that is a company that currently distributes throughout North America food service items used in restaurants and cafeterias. And we’ll be bringing some of that production state side as well.

Well, I think the highest priority is getting the construction started. That’s been my number one objective. Working with the architect, the general contractor, the lending institutions to get everything lined up so that we can break ground and begin construction. In parallel, this is a new production facility and like I said, it’s going to be state-of-the-art. So, we’re designing the production line from the ground up. We’re not trying to copy a line that exists somewhere else. That’s taking a significant amount of effort as well to get all the design elements, the equipment specified, vendors contacted, quotes sent. We’re kind of running parallel paths in those two channels. And then in addition to that, just starting to get some of the processes and systems and partnerships in place for running an organization of this size.

Like I said, we have 29 people on staff currently, and our plan is to have in the neighborhood of between 200 and 300 once we’re fully staffed. So you can imagine going from almost 30 people to 10x that. That’s a huge undertaking. So getting all of that put in place, while it may not be my highest priority currently, is certainly on the radar and something that I’m already working on.

Well, I think, Ed, you mentioned it at the beginning. You and I have known each other for a long time. I’ve been in this region in manufacturing and supply chain for probably 25 years now, maybe even a little longer. And so, I know the region well. I know a lot of people, have extensive contacts. And in my focus, my drive really, is to see manufacturing succeed in this area. I know what it’s done for me, for my family, for my team members, for my leaders. And I want that type of environment here in this region. And you know, we’ve been very fortunate to have kind of an epicenter here for manufacturing. It’s primarily been in one or two segments and now that’s starting to expand. And that’s really exciting. Like I said, to be in a private company that’s consumer goods is new to me, but it’s still manufacturing and we still can learn a lot from one another and we can share a lot. And that’s where I’m excited. I want to have a facility that people are interested in coming and benchmarking and looking. Not just because it’s a neat product, but because it’s got advanced manufacturing and it’s a very thoughtful design at both the building as well as the production lines. I want us to be that type of place that can be a contributor in this community and this manufacturing community for others to learn from.

Well, I’m a person of faith and that plays a huge part in my life. And so, I believe in treating others well and serving them. And one of the things that I learned years ago is relationships are absolutely critical in life. Making an investment in those is key to our success as well as the success of an organization. My personal philosophy— put others ahead of myself, contribute to what they want to accomplish in life—and what I’ve found in doing that is people give you their best. If you’re approaching it in a genuine, authentic manner, then they know it’s not manipulative. I probably go against the grain a little bit from some of the traditional leadership thinking in the sense that some of the people that I’ve had on teams that I’ve been co-laborers with are some of my best friends now.

You’ve heard the old adage, it’s lonely at the top. Well, it’s only lonely at the top if you choose for it to be. Again, I’ve got great friends that on an org chart, yes, they reported to me, but it never felt that way. We were a team and we developed very deep and strong relationships. I think today I could call on them for anything and they know they could call on me for anything. And that doesn’t just mean in the professional arena. That’s any area of life. I think I’ve tried to live that out and I’ve been blessed throughout my career by taking that approach. That’s kind of how that led to it but it really starts with a solid faith foundation that extends from what we’re called to do.

Well, I think first and foremost, culture. I mean, culture is king. When we look at the talent that we’re assessing that we’re trying to add to the team, culture fit is part of that. Chemistry with the team. Certainly competencies that people have and what our organizational and team needs and what can they bring. But I typically start with their fit in the organization. Do they have the right character? Do they have the common vision or vision that we can align for what they want to contribute to the organization and where we’re headed?

When you get to hiring, I kind of follow Patrick Lencioni’s model of humble, hungry, and smart. And if you’re looking for people that have a level of humility, they’ve got drive, and they’ve got an emotional intelligence about them, then they’re typically going to be pretty successful. And a lot of the competencies and skills we can train for if people have the right character that drive the work ethic, and then the culture fit, then they’ll typically be pretty successful. Jim Collins is famous for saying, “get the right people on the bus, then get ‘em in the right seats.” And I kind of follow that adage as well.

I’d say very collaborative. It was, honestly, very difficult for me to agree to do this interview. I am very much introverted in that I do not like the spotlight. In a leadership role, you understand that you have to from time to time. I’d say my communication style is very informal, very authentic. It’s from the heart.

The things that I communicate to my extended teams are the things that I believe and the direction that we’re going. Obviously, you’ve got to structure communication to the audience, but I’m a fairly open book when it comes to leadership. I don’t try to keep things to myself, I’ll share anything. Anybody can call me anytime and I’ll either answer their questions or I’ll point them to resources where they can get the answers.

I remember in college the requisite communication course that you have to take, and I didn’t do well in it, let’s just put it that way. Early in my career it was very difficult. I had a lot of nervous tendencies when I had to speak in front of people. It was interesting. Six months out of college, I moved into a managerial role at a manufacturing facility. We were doing aerospace defense work. And as a supervisor, I had to present to the general manager and his staff. All the supervisors did. We all had a turn in the tank we say. And boy, that was brutal.

But thankfully the company saw enough in me, made some investments there. I went through the Dell Carnegie course for public speaking. And it helped. It didn’t resolve all the issues. The nervousness didn’t go away. I still get very anxious when I have to speak in front of people and even if it’s a group of ten or twelve, or group of a hundred, it doesn’t matter. So that’s still a challenge, but it’s something that I’ve worked on. What’s helped me is just to be authentic and not try to perform, just be who I am. And we’re going to have a conversation. If you don’t like that or if it’s not polished enough, I can’t control how you’re receiving that. So, that’s kind of the philosophy and it’s served me fairly well in these past few years and some of the higher-level roles that I’ve had.

Well, the one that we talk about regularly is labor, right? The workforce and having enough competent, trained individuals to execute the objectives that we have. That’s the big one, I’d say, and there’s a lot of effort that you in particular and ARMA have championed. And as a manufacturer, we definitely appreciate that. You know, I think ARMA is a great organization that’s really helping to further solidify manufacturing in this region and make sure that we have the resources that we need and the support of the governing bodies. So for that, I’m very appreciative. That’s first on the list.

The other, it’s kind of interesting you mentioned the growth in the area. One of the challenges as you’re trying to build a facility right now is finding enough resources to build the building. The Teslas and Amazons and Applied Materials and Samsungs of the world, they’re commanding the attention of a lot of contractors and subcontractors. We’ve got to look and be realistic about the timeline that we’ve got for building a facility. I think if we go into it with kind of open eyes, then we’ll get where we need to be. It just may not be as fast.

And then of course, there’s supply chain challenges, which we’ve also talked about extensively and we’re seeing that across the board. So that’s everything from construction materials to equipment for construction, production equipment, raw materials. I think for about three months we’ve had 50 to 60 containers stuck off the coast of California waiting for the ports to open.

So, there’s a lot of challenges everybody’s facing. I know we’re not unique in that, so that gives me a little comfort. At the same time, we’ve got to work diligently to overcome all of these.

It was my pleasure, Ed. And like I said, I really appreciate you and the effort that you’ve championed in this region for manufacturing.