Talking Training and Factory Automation with Steven Smith of Perdix Software

Steve Melito: Welcome to New York Manufacturing Now powered by FuzeHub. I’m your host, Steve Melito, and we are here today with Steve Smith who is the CEO of Perdix Software in Rochester, New York. Steve, welcome.

Steve Smith: Thanks Steve. Great to be here.

Steve Melito: Fantastic. So to begin with, Perdix software works with manufacturers of all sizes and has a product called MOLI, M- O- L- I. What would you like us to know about Perdix and what’s so special about MOLI?

Steve Smith: Sure. So we started Perdix Software about four years ago now. I was laid off from a Fortune 500 job, Juniper Networks. I was a software engineer there and I took a couple of my former teammates and friends and we started a software company. One of those friends, my friend Jake, owns a small manufacturing company called OTEX Protective. They make arc flash apparel for electricians. He had several issues in order processing that were causing him to spend a lot of time working in his business and not on his business. So we set out to build a order processing system. Over time, that morphed into what MOLI is now, which is a documentation and process record keeping system primarily for medical device manufacturers. So what we are doing is replacing the paper job traveler and binders full of work instructions, controlled documents in a factory with touchscreens and we amount these onto an injection molding press or some other kind of large machine in a factory operator can go up and see their work instructions for the job, they can take their required training assessments that both FDA and ISO require you to prove competency. There’s a couple of other things that those screens can do, such as send alerts to the shop floor in real time. You can escalate issues to your supervisor and a variety of other tasks. Now that we have these nice touch screens on all the machines, we started saying, ” What else can they do other than help you meet compliance.”

Steve Melito: Great, great. And as a side note, where did you come up with the name Perdix?

Steve Smith: I was looking for a Greek name and a lot of the good ones were taken. So we dug deep into Greek mythology and we found that this guy Perdix was Daedalus nephew. Daedalus from the flying close to the sun-

Steve Melito: The one that tried to fly too high.

Steve Smith: Yeah.

Steve Melito: Yes.

Steve Smith: So Perdix was this clever sort of boy who actually invented the scissors according to Greek mythology, just by taking two halves of a bone that he found on the beach. And so, ” I can pivot these and make scissors.” So it was this obvious thing that no one had ever thought of before. So it’s kind of been our influence for, ” Well, no one’s ever thought of putting touchscreens on injection molding presses before, so let’s try it.”

Steve Melito: I like that. An obvious thing that no one thought of before.

Steve Smith: So we all use touchscreens in our daily lives, but yet in a factory they’re absent frequently.

Steve Melito: So how did you identify a gap or a need for MOLI in the markets? What type of pain points did you find?

Steve Smith: Sure. So I mentioned that we morphed this into a system for medical device manufacturers and that’s because we found a medical device manufacturer who had a slightly different problem than Jake but had a slightly larger budget than Jake and they were willing to work with us and come up with a spec for a system that would work for their needs. What happened was they had someone who goes around and pretends to be an FDA auditor essentially and delivers a report saying if the FDA showed up tomorrow, these are likely the findings that they would find. And that report identified some deficiencies around work instructions and they wanted to free up the space around the machines. So having these big podiums with binders full of paper, it was kind of an issue inside the safety zone and so that’s typically what we’ll encounter when we go in to sell to other companies now is often it’s a podium or sometimes it’s just dangling from the machine on a cord, a big binder full of documentation. There’s incomplete training records, there’s a lot of manual data entry. Someone’s taking a form that looks like a huge spreadsheet and they have to enter in all these numbers that different people have written in over the course of a shift and figuring out, ” Well, what’s Bill’s handwriting and what’s Tammy’s handwriting and was that an eight or a zero or a six?” There’s a lot of opportunity for error and you’re making decisions about quality and productivity based on numbers that might not even be accurate once they’re entered into your ERP system.

Steve Melito: So you’re eliminating that, ” Is it an eight or a five,” discussion that’s can really hold things up at times.

Steve Smith: And it’s a greater speed because now these forms are going directly into an ERP system instead of having to exist on paper for some indeterminate amount of time before they can be acted upon.

Steve Melito: And is MOLI agnostic in terms of ERP systems? Do you work with different ones?

Steve Smith: Yeah, right now we primarily integrate with SyteLine, which is one of the more common ERP systems. But our strategy is to eventually integrate with everything. We want to be the front face of your production and of course provide some of our own value, but also a lot of the value is just taking things that were separate systems and finding a way to combine them so that it’s more effective and you’re taking that investment they already made in an ERP system or a document management system or whatever and really integrating and tying it in and then giving the operators and administrators a nice interface around all of that.

Steve Melito: So when I go to your website, I see that MOLI is actually seems like a person. How did you come up with the idea? It’s a very clever bit of marketing.

Steve Smith: We were looking for a name for a product and we liked the idea of some acronym that spelled something. And so MOLI is multi operation lean intelligence and around the same time that we settled on that name, we realized there were a lot of assistance. You have Alexa, you have Cortana, Siri, et cetera, and coincidentally they’re all women and we thought we need to have Siri on your iPhone, MOLI in your factory. And turns out there’s some interesting research that I read about back when I worked at a marketing agency doing audio production work. Female voices actually carry better in noisy environments. So having a female assistant in a factory makes a lot of sense ’cause you have a lot of loud machines and when we eventually give MOLI a voice, that voice needs to carry in a noisy environment.

Steve Melito: So enough about MOLI. She’s pretty interesting, but I understand that you are too based on your background. So let’s talk about Steve Smith. You worked in cybersecurity with Juniper Networks and so tell us about your time there, some of the things you worked on, maybe even some of the things that you saw.

Steve Smith: Sure. I joined a startup called Mykonos Software that was based in Rochester about a month before it was sold to Juniper Networks and I was hired as the UI designer and UI developer. They had two different user interfaces and my first task was somehow unify them and then while I’m doing that, try to make it better. And so the product was actually a security system for websites. You would place this device logically in front of your website and at serve time we would inject all sorts of things that looked like vulnerabilities. We called them tar traps, they were sort of interactive vulnerabilities and we used your interactions with them to determine your skill level as a hacker and then deploy countermeasures. So a countermeasure might just be a warning if we catch you manipulating one of our URL variables for example. That’s simple enough. I do it, you do it every time you see a number in a URL, you try to change the number, see what happens. We would inject a fake parameter if someone touched it, give them a warning message and a full suite of theoretical attacks and theoretical countermeasures that could be customized on a per website basis. So we could really blend in basically giving an attack surface that was easier to hack than the website while at the same time identifying someone definitively as an attacker because they’re touching things that are deliberately put there to entice a hacker.

Steve Melito: Interesting. Almost like bait in a way, in a more intelligent solution than treating everything like a nail because you’ve got a hammer, you’ve got a screw, let’s use a screwdriver and be intelligent about the approach.

Steve Smith: So my role there was as the UI person and then I also had some opportunity to work on the security feature set of the product and also with integrating it into other Juniper products. And that’s kind of where I got this integration thing in my head of everything should talk to everything. Software needs to be sort of if we’re building artificial intelligence, that intelligence needs to be able to have conversations with other intelligence.

Steve Melito: So let’s talk a bit about not just operational security and I’m interested to know what you do at Perdix because certainly you’re on the front lines of what is a really big deal and we have a lot of conversations here at FuzeHub with manufacturers where we explain that unfortunately manufacturing is one of the big, targeted areas among cyber hackers and cyber- attackers. So please be vigilant. Tell us about your philosophy about cybersecurity overall.

Steve Smith: One of my hobbies is cooking and I look at security as the seasoning. Pepper’s a good example, you can take pepper and sprinkle it on your macaroni and cheese and you might end up sneezing because it’s not incorporated into the food or you can put it in while you’re cooking. And then those flavors have a chance to influence the other flavors in the dish and become an integral part of the dish. So that’s sort of how I approach security. There’s a lot of different pieces that all have to be in alignment and together for it to be effective for it to be tasty.

Steve Melito: And do you find that when you talk to manufacturers, do they get it? Do they understand the analogy? It’s clear and straightforward, but do they appreciate it?

Steve Smith: Most manufacturers do a reasonably good job at physical security already. They have access control; they have visitor passes with photos on them. They have non- disclosure agreements that you have to sign before you’re allowed in, no photos. They have a lot of great policies already around physical security. So trying to bridge the gap with someone who’s not necessarily technical in the same way that I’m technical, although they are technical in their own way is often easier than you might think because a lot of the analogies are very similar and people are getting more sophisticated with their savvy with computer security in general. So it’s no longer an uphill battle of, ” Okay, your password really shouldn’t be QWERTY1.” A lot of it now is mirroring what they’re doing in their physical environment, in the cyber environment.

Steve Melito: So we talked earlier about how MOLI can work with a particular ERP. What are some things… how would you distinguish yourself from traditional ERP vendors in your approach to cybersecurity? And please feel free to share some examples of where things have not gone well for some ERP suppliers.

Steve Smith: ERP is a very old industry. There have been ERP systems running on mainframes since the ’60s, the ’70s. And a lot of them like to maintain compatibility with data from 40 years ago, usually through some kind of upgrade process. But there’s a lot of technical debt associated with those older systems and they were built before security was at the forefront of a lot of people’s minds. Our power grid is a perfect example of this. There’s a number of protocols that where trust was assumed. It was like, “Okay, you’re on the network, you’re good to see this.” And ERP vendors have been really stepping up their game, but it’s analogous to sprinkling pepper on top of something that’s already cooked, whereas we’re approaching it from this holistic perspective. A good portion of my team worked with me on this security product. We have that security mindset and that’s where it has to start is culturally. The culture of the business that’s creating the software has to be security minded and the salespeople have to be security minded. Everybody has to be thinking about, ” How can we do this safely? We’re talking to all these different systems; how do we make sure we’re following their best practices and our best practices and keeping abreast of what’s new in the industry.” So the culture is really the most important part of security.

Steve Melito: Have you seen any ERP systems out there that make you scratch your head and wonder why they’re still even active?

Steve Smith: I can’t comment on specific names of course, but yeah, there’s always things that kind of make you go, ” Huh,” in any computer system or piece of software. I’ve seen people using very insecure passwords for database servers and that’s sort of the keys to everything. So you might have great account security, but the application server talks to the database over an unencrypted connection and there’s no password and it’s just the way that the vendor used to recommend it was set up and change controls a thing, so it’s hard to make those changes after the fact. So identifying as many of these places as possible beforehand is crucial.

Steve Melito: Now it’s your company. What’s your approach to cybersecurity? Is there anything that you do, not that you can share any secrets, but anything you do above and beyond what you see others do?

Steve Smith: One of the things that’s kind of unique is we’re a software as a service company. So all of the servers and things are not on site at the customer location, but we have a way to create a secure channel between our data center and their location such that to the rest of the internet, their software doesn’t exist. So you’re lowering the attack surface right away because somebody either has to be in our office or at their office to get to that server in the first place and then when we’re developing software, there’s a rigorous code review process where either I or my CTO have to sign off on every major feature commit and we review it as a team. And it’s sort of going back to that cultural thing. We do these little things that are in many cases common in the industry. I mean everyone does code reviews, but looking at it from a security mindset and trying to bake in as much of that as possible in our technical infrastructure following best practices of our cloud vendor and how we access those servers, setting up two- factor authentication, things that are best practices but are frequently not followed even though they are best practices.

Steve Melito: I really like that analogy. The term about being baked in and it’s integral to the product and the process and not just a bolt on or an add- on at the end.

Steve Smith: Absolutely.

Steve Melito: So another area I’d like to talk to you about and get your perspective on is manufacturers who are facing a wave of retirements at the same time. There’s also a shortage of skill labor and some people say, ” Automation is the answer.” Others say, ” We need better knowledge transfer systems.” What do you think about this?

Steve Smith: It’s interesting going into a factory and seeing a lot of gray hair and not a lot of not gray hair to replace it. I have some friends who work in manufacturing as machine operators or as assemblers, but they’re definitely not the majority. And I was talking to the operations manager at a local injection molding plant and they’re actually going to retirement homes to recruit mold makers. The standard deal they have is if you come in for at least five hours a week, they’ll give you a dedicated workbench in the back area and it’s that hard to find mold makers. So clearly something has to be done and I think that what we do in terms of training is a great way to do that. And yes, there’s automation, but people are always going to be involved in the process. Manufacturing, if you go back to the roots of the word means made by hand and I like very much the idea of people using their hands to make things and then using their hands to interact on a touch screen with something that will eventually be an artificial intelligence and working alongside of it. So it’s not replacing the jobs, it’s making your hands more powerful and it’s making your brain more powerful because you’re able to learn faster, retain the knowledge, get certified that you know the things that you’re doing and it’s showing you how to do things in many cases. We’re able to have video and improved training methodologies. So I think a little bit of both. There’s certainly going to be more of a labor shortage in manufacturing than there is today, even considering that they’re going to retirement homes to recruit mold makers. But we can’t have only machines in a factory and we can’t have only people. You have to have both and you have to really get in this mindset I think of working alongside of machines.

Steve Melito: So to tie this into MOLI and the idea of a digital display. Do you find this may be more attractive to a younger workforce? In other words, when you go to a facility, do the younger workers warm up to this more than the folks with gray hair?

Steve Smith: Initially, yes. The key to winning over any customer with a system like this is showing them how it will save them time. Time is really the one resource that we have in the world and I get the, ” Well, I can do that faster on paper.” Sometimes that’s the case and I’m very interested in those because if I can take that process and somehow make it faster than they can do it on paper, then I’ve gotten the older people on board. And that’s something that actually happened just a couple of weeks ago. I was visiting one of our customers and the guy was on vacation and we had just delivered some touchscreens and suddenly there were more of them. And part of his responsibility, every morning he has to go through all the currently loaded jobs and prepare a summary of all of the defects and completed parts and so on and this process was taking him longer in our software than it was taking him on paper. And the fact that more touchscreens showed up while he was on vacation, he comes back, he’s like, ” Wow, this is taking forever.” So I sat with him for about a half an hour and we figured out a way to do it that not only gives him the data he’s used to getting off the paper, but it does the summary part for him too. So we’re taking it that process that we initially made slower and we’re making it faster now. So it’s important to have that tight feedback loop. But absolutely everybody under the age of, I’ll say 40, but I really don’t know the number is so used to touching and poking and swiping and it’s become very natural. I think that’s where it’s headed for at least until we can come up with a better interface. Something that doesn’t involve touch. Maybe there’s, I don’t know, some kind of mind meld or something.

Steve Melito: Mind meld or virtual reality glasses that follow eye movements. Who knows where we’re headed.

Steve Smith: I think just personally, it’d have to be something that you’d have, you’d be able to take off at the end of the day. I wouldn’t want to be sort of jacked into work all the time, but maybe taste will change, who knows?

Steve Melito: So it sounds like you do spend a fair amount of time on the factory floor. Do you anticipate that as you add on more customers who are manufacturers, you’ll still provide this level of service?

Steve Smith: It’s crucial. We have to understand what’s going on in a very detailed way so that we can make the best tool for the job. I have to understand what it means when the job is black flagged or there’s flashing on a part or any of these terms that are foreign to me. I mean, I have a degree in music and I run a software company. I don’t know what witness lines are on an injection molded part. I didn’t until a few weeks ago. Going back to that culture thing, the culture of the company, we all come from different backgrounds. Manufacturing has to be that lingua franca and spending as much time as possible out seeing the people is the most important part of what I do.

Steve Melito: Is there ever any resistance maybe people that say, ” Well, you just don’t know our industry, we’re not going to give you the time to learn about it,” or can you generally convince them maybe some of each.

Steve Smith: I don’t know that anyone’s ever said that to me specifically, but there’s definitely a different way of speaking that I’m learning as I go. We’re a startup and every time I talk to somebody is a chance to try slightly different words. And a lot of it is, I don’t know their industry and I never will know their industry to the level that they know their industry. But if I know my industry and they know their industry and we can work together on where they overlap, that’s where it has to really be.

Steve Melito: Interesting how it sort of ties into the workforce aspect where a lot of it is aptitude, which is hard to measure because we’re very results driven degrees and certificates. But at the end of the day, does a vendor or a worker have the aptitude to learn a task at hand? Some companies get that and others are very hung up on certifications. At least that’s what I’ve seen. But just as a side note, I thought I would mention that. About workforce talent, there’s not enough workers to fill all of the jobs that are vacant today. How do you think this is going to affect workforce development in the future if we can speculate a little bit? Do you see it becoming reactive or maybe more proactive and in what ways? And any anecdotes that you have would be well?

Steve Smith: In Rochester, we have Monroe Community College. And as far as I can tell, they’re really leading the way in being proactive. They have a lot of people in the department that reaches out to young people and people that want to, maybe they’re older, but they want to reenter the workforce in a different career. They’ve got scholarships, they’ve got all of these great resources and tools, and they’re being as proactive as they can be. A lot of it though is cultural. I was speaking with one gentleman who goes out and talks to high school kids and he’ll get the kid all excited about being an injection molding operator. And you can make so much money and not have to go to college. And by the way, there’s a scholarship now, and even your training will be free. Kids all set and then that kid goes and talks to their parents and gets the standard, ” Well, we go to college in this family.” Yeah, but this is a great job when there’s- I talk to people all the time who are, they’re operations managers and they started out on a machine. So there’s a career path, there’s great pay and there’s free training. The institutions I think are being very proactive, but a lot of it is just a cultural thing. It’s expected that you go to college in a lot of families and it’s seen as a lesser thing if you don’t. And I think that’s really what we have to change if we’re going to solve this problem.

Steve Melito: I like that. It’s interesting too that there’s a perception if a young person doesn’t go to college right out of high school, they’ll never get there when in reality that’s not the case. There’s all sorts of adult learners and learning really never stops now.

Steve Smith: Absolutely. My mom went back to school a few years ago and now she’s a mental health counselor. She used to be a teacher. So even somebody my mother’s age, she’s not like elderly or anything, of course, but she’s certainly older than a high schooler. If she can go back to college and get another master’s degree, you can clearly go to college and get a bachelor’s degree. It’s not difficult. I mean it is difficult, but you know what I mean.

Steve Melito: So let’s bring it back to where we started and talk about your company. Before we wrap up, what would you like people to know about Perdix software that we haven’t talked about yet? Or what’s the elevator pitch maybe that you give?

Steve Smith: Well right now we’re looking for a handful more customers to learn with and grow with. And we like the medical device industry very much so we’re looking to stay in that industry for a while and really build a mature product for that industry before we move on to other industries, I think. But there are a number of sort of sister industries such as pharmaceuticals, that would be great next steps. There’s a lot of very similar regulations, a lot of very similar processes. And it’s advanced manufacturing. And I think that’s really the core of it is we work with manufacturers of all sizes. I mean, Jake’s company has five employees, but we’re trying to go to larger companies because there’s more opportunity, I think, to be agents of the change that needs to happen to prepare them for the future and the new expectations that are being brought on by their own industry, by regulators, by their customers, by their customers, customers. I mean that, that’s really the fun part, is knowing that in some small way, when somebody makes a part that eventually gets implanted into a human body, that I played a small role in that it’s just really exciting. That’s why I get up every day and trying to find industries that do other things that are just as cool is something that I’d like to do as I continue to grow as a company and as a CEO. It’s got to be something interesting. And everybody’s got their own little interesting thing. So it’s a matter of finding the overlap really.

Steve Melito: And you’re doing it here in New York State in Rochester. You’re supporting the manufacturing ecosystem that is really statewide. And I understand that New York State’s a great place for MedTech. It’s a great place for biotech.

Steve Smith: Absolutely. It’s a great place to start a company and it’s a great place to grow a company. We’ve got skilled workforce; we’ve got opportunities for additional training in the MedTech space. There’s some great organizations. We’ve got the Medtech Association in Syracuse, we’ve got FuzeHub, of course, pulling strings and making sure everybody knows that everybody exists, which I thought was a really interesting idea. There’s all these different centers and places that will help you, but FuzeHub coordinates all of that. And I think that’s a crucial role in making sure that New York State is competitive, not only inside of the borders of our country, but internationally.

Steve Melito: We enjoy hearing the kind words about FuzeHub, and that is indeed a lot of what we do is to help navigate, that’s part of our solutions program, help companies, inventors, entrepreneurs navigate a very large ecosystem that frankly can be confusing because there are lots of acronyms, lots of players, and so we try to be a guide and that’s how we add value. So on behalf of FuzeHub, I’d like to invite listeners who are manufacturers that may have a business or technical need to visit our [email protected] fuzehub. com, F- U- Z- E- H- U- B. com and if you would like to talk about some of the challenges that you may be facing and how New York State resources could provide a solution, I hope you’ll do that. The way to do it is on our website, on the homepage, upper right- hand corner, there’s a link that says, ” Solutions Portal or Solutions Program.” Click that link, take the time to complete a request for assistance and then you and I will have a conversation by phone. We’ll see what we can do to help you. So on behalf of FuzeHub and New York State Manufacturing Now I’m here with Steve Smith of Perdix Software. Steve, thanks again.

Steve Smith: Thank you.

Steve Melito: And we’re signing off.