U.S. Manufacturing Today Podcast

Episode #12: Survive to Thrive: CLN's Strategic Approach to U.S. Industry Challenges with McKenzie Reed

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In this episode of U.S. Manufacturing Today, sponsored by Veryable, host Matt Horine sits down with McKenzie Reed, President at CLN of South Florida. McKenzie shares his journey as a mechanical engineer and co-owner of CLN, a manufacturer of CNC router systems, and discusses the company's role in the reshoring movement and the Made in America momentum. The discussion also explores the significant increase in domestic RFQs, the importance of reliability in industrial equipment, and the strategic importance of local support and customer service. Lastly, McKenzie provides insights into managing supply chains amid volatility and the future of U.S. manufacturing, highlighting the need for businesses to position themselves for potential growth as the market stabilizes.

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Timestamps

  • 00:00 Introduction to U.S. Manufacturing Today
  • 00:35 Meet McKenzie Reed of CLN
  • 03:27 The Reshoring Movement and Made in America Momentum
  • 06:32 Challenges and Strategies in Supply Chain Management
  • 08:19 Customer Support and Service Excellence
  • 21:14 Future of U.S. Manufacturing and Policy Impact
  • 23:13 Conclusion and Where To Learn More

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Episode Transcript

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Matt Horine: [00:00:00] Welcome back to U.S. Manufacturing today. The podcast powered by Veryable where we talk with the leaders, innovators, and change makers, shaping the future of American industry, along with providing regular updates on the state of the industry, the changing landscape policy, and more.

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This week we've got a great conversation lined up with McKenzie Reed of CLN, of South Florida. A company that specializes in CNC router systems and has a front row seat to the reshoring movement. Plus, we're digging into the Made in America momentum. What's behind the recent spike in some RFQs that we've seen domestically and why reliability is the new currency in industrial equipment.

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McKenzie, welcome to the show.

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McKenzie Reed: Thanks for having me.

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Matt Horine: It's nice to get to chat with you about this after seeing your post on LinkedIn and having some mutual connections, but would love to find out more about how you came to be part of CLN and your background and what's led us to this conversation today.

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McKenzie Reed: I'm a mechanical engineer by education and have been in machinery startup and design for coming up on 15 years now. I've been in Lance [00:01:00] all across the United States, a wide range of different applications. My first employer, I was a field service engineer for Rockwell Automation in the Systems solutions business group, which they would only send us out on new startups of industrial machinery and automation systems.

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So I did that for a number of years, just being the boots on the ground, one of the first ones in the plant. Sometimes it, it didn't even have walls on it when we first got there. And by the time we left, it was processing whatever that customer did. So I got to see a pretty wide range of diverse applications in my early to mid twenties, and that really set me up for a whole career in industrial automation and machinery.

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In terms of how we came to acquire CLN, we were living in Illinois at the time and we're looking into business acquisition as our next stage. When I say we, I mean my wife, Christina, and I, and I had been looking for businesses for [00:02:00] about six months to take over and acquire. We made the decision to move back to South Florida where we're originally from for family reasons, and when I switched the search to that area of the country.

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We almost immediately came across CLN of South Florida. It seems like an oddly perfect fit because of the CNC router table products that CLN manufactures. Because I had hands-on experience with CNC router tables, just throughout my experience, inside of all of these machines, they're made up of code variable frequency drives, servo drives, servo motors, wiring sensors, and that's all the things that I know extremely well from my previous career.

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We'd like to say that CLN found us and we found CLN because it, it was a unique skillset that I had. And then Christina brings her whole host of skill sets as well in sales, brand identity, marketing, partnerships. Between the two of us, we were able to come in and in the last two years, reshape it into [00:03:00] what we want it to be in the next five to 25 years.

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Matt Horine: Yeah, that's really exciting. And I know we had a previous guest on our show, James Hartman, who's a mutual connection of ours, and you hear so many great stories about this and people who are optimistic, and it's truly a family business in the sense that you see people jumping into the industry and into manufacturing, coming off the heels of careers, setting these things up, doing these kinds of things. Sounds like a great business and one that is getting a little bit more of a surge. Our production, we talked about the RFQs that you've seen come across, and I think I caught some interest in one of your LinkedIn posts about different types of business or requests coming in and you re recently posted about it. Tell us more about what you're seeing and what you think that change, that underlying change is causing it.

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McKenzie Reed: I'd say about two weeks ago now, we started seeing what I think is the first slivers of people becoming comfortable with the environment that we're in because it just seemed that those that have been sitting on the fence wondering [00:04:00] where we're going as a American economy. Just, just being like, this kind of just seems like the new reality, and at the end of the day, I need machinery for my operations or for whatever our customers are doing in the markets that they're in. So we did start noticing a, an uptick in RFQs coming in.

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To take a step back, just quickly, CLN is basically split between two major product lines, which is three Axis, Cnc router tables. We have a legacy line of plasma tables as well and our breaking into new types of machinery. And you know, that general market that I'll go into. The other about 50% of the business is what's called a channel letter bending machine. So it will notch, flange, and bend what's called channel letter return, which makes one third of your industrial sign that'll go outside.

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So if you think of any major chain or any sort of sign that you'll see mounted on a plaza as you're driving by it like that. Is that business's [00:05:00] sign, whether it's a corporate one or a mom and pop, that's a channel letter sign. And so we produce a machine that bends it into the design of that brand, and then you take the face of that sign in the back of that sign, you put the three together, you have a completed design. The CNC router tables also serve that market, but we're branching them out into other industries. But between those two, we have just been seeing more requests come in on the website and more people visiting our website. And we're getting a lot of calls back from our recent industry show that we went to last April.

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Really, I think that what's, as I said, that people are becoming more comfortable with the state of things and that we are a trusted name in the industry. CLN has been around almost 30 years. Christina and I have been at the helm pretty much exactly two years, almost to the day, and I think that is going to be important moving forward, is that we are the constant and potentially an [00:06:00] unstable market.

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Matt Horine: No, that's a great perspective and one that really caught my attention and what you said there about an unstable market, but having a great brand and recognizable name. Let's talk about the lighthouse and the storm concept. I think you frame that really well. Hedging is the wrong word here. I think there are some people who truly believe in domestic sourcing and domestic manufacturing and the Made in America message, but what does it mean to be a stable U.S.-based manufacturer in 2025? And how well prepared do you think you and your business were for this type of environment?

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McKenzie Reed: All things considered, we're doing pretty well. We are having weekly supply chain meetings at the moment. We had ours this morning where we are facing some supply chain challenges of electronics components. When the lead up to this from day one, the, the two year mark that we're about to hit, we really came in and audited all of our suppliers of like, how good of a partner are they for us? Do we have terms with them? Do we give them annual quantities so that we can [00:07:00] get the best availability and lead time? And where are they based? That was one of the things where we took a hard look at it and there are some things that we can't get, and there are very high quality electrical components that we source from outside the United States. One is the spindles that run the router tables as about as good as you can get of Italian quality for those. The things that we could take a look at and partner with local, either in the state suppliers or within the United States. We've already done that.

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So to answer your question, I'd say that we're faring better than most based on what I'm hearing, because we have already done that work of reaching out to American based brands and businesses and forging partnerships with them over the last two years. So we gotta jump on this. And then keeping a very close eye on our suppliers that our source from elsewhere. In terms of, in that post, I referred to CLN as a [00:08:00] lighthouse in the storm. Again, we're 30 years young in this industry. And I think what we have always hung our hat on prior to Christina and I taking over and we've especially accelerated. It is our quality and our service. I arguably think that we do service better than anyone in the industry of supporting our machines for the lifetime of the machine, even if you're not the original owner.

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So if these have been bought second or third hand and that customer reaches out to us saying, Hey, I just bought a CLN machine. We support them, and you get lifetime remote technical support from us. We also, I would say, offer best in class on site support. In this time especially, I think that people are taking a look at what they have and they're evaluating the next machine that they're gonna buy, and they want that to be from a company that they know is going to stick around.We're really marketing ourselves in that we're not brand new to this industry. We've been in this industry for [00:09:00] decades.

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We're going to remain in this industry, and we've tooled up and staffed up to continue supporting our customers in the way that our brand is known for. So I think that gives us a competitive advantage. And then in terms of that industry show that we just went to, our messaging was there are no tariffs here if you buy from CLN, because like for the most part, we're pretty insulated from it. The things that are subject to tariff, whether it's uh, raw material or whatever the case may be, it's marginal in the grand scheme of the machine cost.

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Our competitors at the show were branding themselves as You better buy now because our next batch is maybe subject to tariffs and we're like, you could buy now, or you can buy when you're ready for us. It doesn't really matter. We're here to support you when you're ready. Don't feel the pressure because you think that the price is gonna jump 150% because you're not gonna get that from us.

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Matt Horine: No, that's such a great perspective and shines a lot of light on what we've seen across the distribution and manufacturing landscape is [00:10:00] full forward as a strategy. Overstocking on inventory, doing things that are pressure sale to run away from tariffs and hopes that they disappear. And I know no one is really an expert on tariff strategy.

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Nobody's been through a trade war before in our lifetime or anything like this. If we are in one. It is a good strategy to completely say if you're sourcing or if you're buying from us, we source from the United States. And so this isn't a concern or something that you have minimal risk or exposure to. And I think one of the things that is a recurring theme for most of the guests on the show, and something that I've certainly heard in your answers here, is that your team's ability to deliver for both the product front and the proximity front on this are probably a key to success.

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Do you think we're finally seeing a cultural shift where local support and shop floor level training and expertise outweigh price? Are people really opening their eyes to that?

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McKenzie Reed: Absolutely. What we're hearing from people is we really feel at ease that you're local, and by local they mean that we're in the United States. And depending on what machine we're [00:11:00] talking about, one of the sides of our business is extremely competitive with a lot of players in the industry, and there are more and more popping up overnight, but they're all basically sourcing the same frame from Asia, and they're putting their own flavors on top of that frame and their branding and their colors on top of that same frame.

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Once you become educated to the market, you can almost immediately pick out who's getting their frames from where and what they're putting on top of them to make it their brand. On the other side of the business, it's extremely tight knit and a closed market, but even still, we've heard from customers of this brand does a really good job of marketing themselves as being a local resource, but we've gone through rounds and rounds of technical support and not been able to get an answer.

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And finally they had to fly in a "expert" from across the world. And that's how we found out that they weren't actually manufacturing the machines where we assumed that they were. So I think that the [00:12:00] market has started educating itself on that. I think that things being in the news have made people reevaluate what's important to them, number one.

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But number two, where their service and support is coming from. Are they truly getting it from the technical experts? And we're a small to medium sized business, and I don't pitch us as being larger than we are. And the ways that's advantageous for us is when I'm talking to a customer, I'm saying the technician that is assembling your machine, calibrating it and testing it, is probably the same person that's coming out and doing your training.And five years from now. Ideally, when you call and you need tech support from us, you're gonna get that same person and you're gonna have their direct line of contact for six to eight weeks after the installation.

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For any questions that came up that you didn't think of during your onsite training, we're gonna pair you with that person. So it's not like we get the purchase order and then you never hear from us again. Which is [00:13:00] what I will say of some of our competitors in the industry. We literally pair you up with the technician that had their hands on assembling the machine, testing it, packing it, and sending it out. And some people look at that as you're a pretty small company and it's like relatively, not really. The same person supports the machine for the lifecycle of the machine. And there's not only one of them, there's teams of them, the same person is regionally working with the customers in their area, and we pair them up with that person. So I think that's important. I think also that across the board, we're not the worst on price, depending on who we're talking about, foreign or domestic.We're 30% lower costs because we control our overhead and truly manufacture everything in-house.

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So there's not a whole bunch of stacking costs that we're getting from suppliers. It comes in as raw steel and it leaves as a machine. We are able to really control price when that's the case.

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Matt Horine: Overall, the overarching message has been something.[00:14:00] Like the Made in America concept or theme that you see has shifted a little bit from message to mandate, and its businesses like this that are really leading the charge on it. I wanna kind of dive into something that you mentioned earlier, and particularly your customers or even your suppliers.

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In your post, you ask for feedback on what tips the scale on capital expenditures right now, and I get the sense that most of your customers, something like this is a big capital expense for them. What have you heard and what is really making people pull the trigger? Because we've heard a lot of hesitation in the market about making big CapEx expenditures or CapEx buys right now. What's your take on that and what have you seen.

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McKenzie Reed: If people are in need of machinery? It doesn't matter what's going on, especially if they have three router tables that are ancient and they have to shuffle between one of the three on any given day to like output what they need to for their business.They really don't have the luxury of waiting to see how all this shakes out in the next one to two years. So I would say that those ones [00:15:00] have remained the same as two years ago when I took over.

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When they're ready and the phone will ring and it'll be a person that you haven't heard from in eight years. And for me, I've never heard from them because it's only been two years and they come outta nowhere and they're like, send me your wire information. I want X, Y, and Z out of this router table. And. Those days are amazing. I love those ones. So those customers are still the same. The ones that you know are near term four to 12 months out. Those ones have a more complex like buying criteria than they did maybe a year ago. Where we're getting a lot more questions about how far is this gonna get me? What type of capabilities do I get out of this size spindle, and should I go with an automatic tool changer or, or do I really just need a manual tool changer spindle for one extremely specific example.

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So they're being much more diligent in their process of vetting the machines and whereas if we were [00:16:00] building a custom nine by 14 router table last year, maybe we're building just your standard run of the mill five by 10 right now. That does what it does, works perfectly and it does exactly what they need it to, and they're not tacking on the additional things. So that's one thing that I've definitely paid attention to. The other decision makers, I just can't stress enough how much they're looking for a partner in all of this. They're not looking at a nameless, faceless brand. The expectation is if somebody reaches out that one of us answers the phone and supports them. Whether the machine is 15 years old or if it's 15 days old, that's the expectation is that they're really gonna be looking for their next solution to be. From a partner and not just, it's a commodity that's bought because I think that people are paying much more attention into where their dollars are going.

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Matt Horine: I think that's one of the other recurring themes that we get is that there is a shocking about a business to be made by just picking up the phone [00:17:00] or being quick or being fast to get back to somebody. And then that mentality really sticks through the process when you have somebody to pick up the phone and call on the expert to service a machine or ask a technical question.There's a shocking gap right now what we've seen in the market based on just being able to have a great level of customer service and the commitment to that type of customer service. For just a general overarching term on that, a commitment to quality may be another way to say it. I think something else that was very interesting that you and your team do that you mentioned earlier in the show was a weekly supply chain meeting, and we have a lot of operations leaders that listen to the show and work with Veryable on a daily basis. I'm sure they have their own supply chain meetings. What's running through that? As a small business, as somebody who's so specialized in, in those segments that you mentioned, and one that is seeing a lot more RFQs come through, what's the top focus for you and how do you use that to drive the decision making in the organization? Since you're already, a lot of your suppliers are here already, what are [00:18:00] some of the biggest things to look out for if somebody's catching up to where your organization is on being domestically sourced?

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McKenzie Reed: It's the delicate dance of what I would say is just in time delivery, which is for all the operators that listen to this, it's a well shredded term. For us, again, we are a SMB and we, I would love to be placing just blanket orders for two years worth of stock to keep on the shelf. We keep replacement parts on the shelf for overnight delivery for our customers, and then we're ordering three to five machines worth when we're reordering inventory, and that's pretty regular. It's not like those are happening months and months apart.

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But what I will say is that recently, maybe for the last year or so, every time we reach out to place that reoccurring three to five quantity order, the lead times are changing. It's extremely important. I'll give an example of there was one supplier, which is pretty run of the mill electronics supplier. Everyone in the [00:19:00] industry uses them. They're well known. They're well liked. For me, I wish that their service was a bit better, but they're, everything is sourced and made out of Taiwan.

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So like CLN has been using them for over a decade on the router tables and we kept seeing lead times get pushed out. Again, service in my opinion, was lacking. So we started doing, sending out requests for information for different suppliers, and I have to hand it to our operations lead because he came across a company that's based out of upstate New York that makes what I would say is some of the highest quality electrical component for this specific application that I've ever seen. And they actually are making it out of that plant themselves. At their worst during COVID, they went from three week to six week lead time, and this was a brand new integration for us and they completely walked us through it.

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From A to Z of how to do it with our product. And they did simulations [00:20:00] for us, uh, what was gonna be the best fit before we had any product in hand, whether it's us as CLN, or it's our suppliers, or it's like one to three stages down the supply chain.I think that's gonna be the expectation moving forward, because like for me, that's a level of service where they've got me now for as long as possible. I'm going to partner with them and I'm going to use that product because of the experience that we had, number one. But number two, because of the quality of the product.

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It's a part of our brand. We hang our hat on being a truly American manufactured machinery company, we should be using as much as possible components wise to accomplish that same goal. For us, that was extremely important. And I think moving forward, de-risking or otherwise, that's gonna be important. 'cause it's, for us, it just comes down to lead time. It comes down to lead time, availability, risk of the product. I can say that I've started getting a lot more [00:21:00] requests for documentation for me to fill out in extreme detail what I'm using these components for. Are these going into military application?Are the questions that I'm getting. I think everybody's paying more attention to that now.

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Matt Horine: Those are great insights. And before we let you go, I'd like to give you the opportunity as somebody who's on the front lines of what we hope is a reshoring boom and what we hope is a this new Made in America movement. What's your take on what the next six months look like for us manufacturing? Do you think we're in the early innings or is there still a game of margins and mindset? And how would you define it and what's your prediction over the next six to 12 months?  

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McKenzie Reed: The term that I've been using jokingly, but somewhat seriously, whether in peer groups or discussions with other owners, is that like we have to survive to thrive, which is like just surviving this turbulence of people potentially pulling back and waiting to see what's gonna happen.Because if the increase in RFQs that I've been seeing is the first sliver of where we're going, I just see unlimited [00:22:00] potential to this. And we as CLN are trying to position ourselves at least to be ready for that demand. We've onboarded in the last two months, about 15% more people. I have Rec's out for hiring more technicians through the summer to keep up with kind of what we're currently working on, not even what we're expecting towards the end of the year. The one thing I will say in terms of policy is if we go back to 100% depreciation year one for CapEx purchases, that will be a boom, because I saw the financials the last time that happened for CLN, and it was a game changer. It moved the needle for a lot of people. It would move the needle for me. I need to invest in machinery. I need to invest in the machining department. That would move the needle for me. And so I expect the same thing from our customers that are maybe holding off until they see something like that. And then I, I truly expect that the floodgates are Open.

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Matt Horine: [00:23:00] Yeah. That's something that we're getting a lot of sentiment about. And I know that depreciation is in the one big beautiful bill, which we just had an episode on, so we did a recap there. But obviously a lot of things tucked away in there. And truly a manufacturer's bill, as I heard it described. Where can folks go to learn more about CLN of South Florida and the work you're doing in this field?

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McKenzie Reed: So our company website is clnofsouthflorida.com The shorter version of that is just CLNcnc.com. We're also on Instagram. I'm pretty active on LinkedIn. You can find either my, my profile on any one of those or CLN's profile to follow both of what we're doing.

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Matt Horine: We really appreciate you coming on a lot of insights, so thanks for joining the show today.Thanks for having me. It was fun. To stay ahead of the curve and to help plan your strategy, please check out our [00:26:00] website at www.veryableops.com and under the resources section titled Trump 2.0, where you can see the framework around upcoming policies and how it will impact you and your business. If you're on socials, give us a follow on LinkedIn, X, formerly Twitter, and Instagram. And if you're enjoying the podcast, please feel free to follow the show on Apple Podcasts, Spotify, or YouTube, and leave us a rating and don't forget to subscribe. Thank you again for joining us and learning more about how you can make your way.