Kirk Frameworks

[GSmith]

Hey GS,

You have asked the $64,000 question my friend and I have a very long answer that might be best done over a beer, lunch and dinner – but – I’ll give you my Cliff’s notes version for now and if you ever want to talk more just let me know.

Cash flow and profit are obviously the things we are shooting for here and one without the other is worthless in the long run. The question is how does one get both of those things to happen at the same time.

...

Dave,

Thanks for the thoughtful response. I don't want to turn this into a thread about IF, or anything other than you, but could not resist picking your brain given the background. Perhaps another thread, or even a different venue, but I'd love to hear more.

In the meantime, a couple of responses to your thoughts:

First, I worked with Eli Goldratt back in the 80's, have trained in Toyota plants in Japan, and keynoted lean symposiums, so I'm pretty well versed on the principles of flow and lean production. What I bought into at IF 2.5 years ago was, and still is, a pretty good lean operation. Not quite pure single piece flow, but there is no batching, and every work order is a sold, custom frame sequenced into the production flow based on customer due date. Given the high degree of variability in product, and chronic materials delays (a whole different topic, but most of the tube and other major component suppliers in the bike biz would have died long ago if they were serving the automotive market where the on-time delivery and quality standards are much higher), maintaining strict single piece pull based on customer due date is a challenge. Our biggest bottleneck (Herbie, the fat Boy Scout from Eli's book) is paint. The high degree of variability is killer, and the dance at the intersection of art and science often stumbles, so high degrees of rework as well.

Net, IF is a pretty good operation (thanks to Lloyd, Jamie, Tyler, et.al.), and the least of our worries. The front end of the business 2.5 years ago was a disaster... blindly pursuing growth for growth's sake, making commitments to customers without being connected to the shop floor, and completely lacking any financial discipline which pushed the business to the brink. The financial stuff was easy to fix by shoveling a bunch of cash into the big hole that had been dug, and we are now extremely cash flow focused (it shocks me how easily folks forget that the customer is the only one that gives you money for anything, so shipping them a quality product, on time, is the end game, full stop).

We are now consistently profitable, cash flow positive, and in a position where from a size stand-point, we are basically selling to capacity. We are much smaller than even you would guess, and until someone proves me wrong, I aim to keep it essentially where it is, only growing when we "earn the right" by consistently producing up to our current theoretical capacity. Under this scenario, we still have head room to grow, but only by earning it, not by adding incremental assets, either human or machine, that could become asset drag if we fail to perform. This also gives us the license to say no, which is the most valuable thing I believe a brand can do for itself.

I think that the biggest problem builders that are more than a single individual fall victim to is the tyranny of growth. For a variety of reasons, they simply don't want to define boundaries for themselves, and adhere to them. Next thing you know, compromises in whatever they were once distinctive for get made, no single choice seeming to be a big deal, but they inevitably wake up one day and the sum of all of those little compromises finds them stuck in the proverbial middle, worried about how to feed the machine that they've created.

So, long winded way of coming back around to you: Aside from the reasoning that you've already provided for your own choice to be a one-man-band, and given your long tenure at Serotta, what advice do you have for folks about how to think about growth in this business, and all of the implications that stem from it. Is 40ish frames/year the magic number, and folks need to build their model and expectations around that if they choose to be solo operators and have some semblance of balance, or is there another take on it whereby builders could extend their aspirations and make it work without compromising on product, control and/or lifestyle?

[Craig Ryan]

Dave, your comments make it much easier to understand why you have chosen the route you're following. With the business model you mentioned earlier and Goldratt's book, what level of inventory controls are you able to apply to your one man shop? I mean, where is your limit on bulk ordering of materials vs. quantity discount. An example might be drop-outs where you get price breaks at 9, 25, or 50 sets. Do you only work 2 or 3 frames out? And then what if a part holds up production? An example might be a fork crown only sold by one company. Thanks in advance. You're a hero for many.

[Dave Kirk]

Dave, your comments make it much easier to understand why you have chosen the route you're following. With the business model you mentioned earlier and Goldratt's book, what level of inventory controls are you able to apply to your one man shop? I mean, where is your limit on bulk ordering of materials vs. quantity discount. An example might be drop-outs where you get price breaks at 9, 25, or 50 sets. Do you only work 2 or 3 frames out? And then what if a part holds up production? An example might be a fork crown only sold by one company. Thanks in advance. You're a hero for many.

Hey Craig,

Thanks for taking the time to write.

I keep my raw material inventory down to a bare minimum of 'stock' tubes and I place orders for tube on average about every 4 weeks and I look ahead at what I'll be building to make up the bulk of the order. I'd say that at any given time I could make about 6 bikes out of the stock I have on hand. i have an agreement with my supplier that I will buy directly from them and get as much as I possibly can from them and in turn they give me a quantity discount based on how many tubes i will take delivery of in a year. FWIW I work with Reynolds and they treat me very well. They make special tubes just for me and have been very responsive. I buy one tube from True Temper (JKS seat tube) only because Reynolds doesn't currently offer what I want - but we are working on that.

For the most part I don't worry too much about quantity breaks. Most are so small and the and on the other hand the carrying cost can be so high that it seems to be a near wash to me. So I order only what I will need for a month or two max and it works very well for me. Also remember that I'm working out of about 200 square feet and I don't have room to store a years worth of tubes. I could if I rented a place but there goes all the savings and more.

You hit the nail on the head about control. If I run out of any one single part then I can't ship the frame so in that way a cable adjuster is just as important as a down tube............ without either I can't ship the bike and get paid for it. So I keep very tight control on my stock. The flip side is that I have very few SKU's and my stock level is so low that I can take inventory by looking around the room and then recording in my spiral notebook.

One last thing about raw material inventory. I have at a minimum two sources for every single piece I need to do my job. I don't want to be caught out with a supplier being out of stock. If the main supplier is out I call the other guy and I'm golden. It almost never happens but it's good to have the rolodex full of those numbers just in case.

The above of course applies to raw material inventory. I have no finished good inventory at all and if I do my job well never will. I work on one at a time and only start one when the previous one is finished. This keeps things turning and cash flow positive. I sometimes see folks here and elsewhere with a dozen fork tips all brazed and ready to finish and it honestly makes me cringe just a bit. Unless they are team bikes that the builder will not get paid for this is bad news. I think builders 'saving time' by brazing a bunch of crowns to steerers are mislead at best. They are all single operations with no set up and there is no time savings shy of adjusting the torch. It feels efficient but it is not. There is no economy of scale. All the time working on the 2nd through 10th crown could have been spent getting the one bike closer to going into the truck and getting paid for the work. I'll get off my soap box and just suggest that anyone who is open minded would enjoy reading Goldratt's "The Goal".

A hero? That's extremely flattering and a bit overwhelming. I think if you knew me really you'd reconsider that. But I'm flattered and appreciative nonetheless.

I hope that helps.

dave

[Dave Kirk]

Dave,

Thanks for the thoughtful response. I don't want..............................

So, long winded way of coming back around to you: Aside from the reasoning that you've already provided for your own choice to be a one-man-band, and given your long tenure at Serotta, what advice do you have for folks about how to think about growth in this business, and all of the implications that stem from it. Is 40ish frames/year the magic number, and folks need to build their model and expectations around that if they choose to be solo operators and have some semblance of balance, or is there another take on it whereby builders could extend their aspirations and make it work without compromising on product, control and/or lifestyle?

I don't know that I have an answer for that. I certainly know what works for me and have made my choices but what will work for others is much harder to say. A few random thoughts before getting to bed early so I can get out early for an autocross race tomorrow -

* I feel strongly that any growth be natural and organic. If you have to borrow money to grow you aren't ready to grow. IMO you need to be able to pay for the growth with excess income.

* I think that 40ish frames is a good number for lugged guys and double that for one man tig shops. To go much beyond this for most people isn't sustainable and the builder will burn out or simply not have much of a life. I'm sure some can do it but they are the exception to the rule.

* if you build 40 frames a year by yourself adding a helper will not put 80 frames out the door. It just won't and never does. If you are lucky the two people will put out 60 and now neither of you are making enough money to live a real life on and raise a family if they wish. IMO once you leave the 40 lug/80 tig frames and try to get bigger by adding people you'd better be able to sell 1000 or so frames a year to afford the help and to keep them busy. Over the 40/80 is dangerous territory. On the low end of the spectrum you are limited by the number of bikes you can make and out out the door - at the high end it becomes how many you can sell. I don't think Trek worries much about having enough time to make the bikes - they are concerned will selling them.

* if the one man shop wants to grow for fun or lifestyle reasons then that is totally cool. You hate working alone? Bring in a partner with a varied skill set and have fun. But if the builder thinks he can grow the biz to make more money then I would have to say I doubt that happens very often. The way to make more money is to get your costs all down as much as you can, reduce your rework to near zero, set up your shop and office so it's simple and efficient and a fun place to be, and then build the brand image so demand grows and you can justify charging more for your work. That will put money in your pocket.

I hope I understood and answered your question.


BTW - very cool that you know Goldratt. we need to have dinner and a beer or two and talk about this stuff. My wife Karin is tired of my talking about it so I need new people. Congrats on keeping IF in the black. it is not an easy thing to do.

Bed time...... vroom vroom in the morning.

dave

[GSmith]

I don't know that I have an answer for that.
....

Word-a-licious answer(s), and I hope the folks that are newbies, or contemplating getting in this game realize how fortunate they are to have folks like yourself, Carl and Richard share their accumulated business wisdom so freely. It's one thing to share the tech stuff, but so many forget, or for some reason think that this is too noble a pursuit to taint it with talk of money, but at the end of the day somebody has to eat and put a roof over their head, so the business side needs to be addressed.

I think that your math is spot on, acknowledging that paint would have to be outsourced to a shop of some scale to make it work long term.

On a separate note, given your martial arts background, you'd totally dig a lean study tour in Japan. Lots of overlap, and very Karate Kid in some senses. You are taught by a Sensei, conduct improvement exercises in a Kaizen dojo, etc.. I've been made to stand on painted foot prints in a single spot on the factory floor for hours just to listen and observe. Fond memories now, but I thought it sucked for the most part back then.

Thanks much.

[steve garro]

Damn, thanks for all that Dave. you confirmed several things i thought, and showed me a new way to think about flow. here's an easy one: time spent on a lugged frame vs. a fillet one & why? Thanks!! - Garro.

[cash]

Thanks for your insights. Fascinating, to say the least.

This frame: Kirk Frameworks - JK Special race bike : does it for me. One of the most beautiful, perfect bikes I've seen in a long time.

Now, a question or two:

1.) Who is your ideal customer?

-and-

2.) What is "good enough"? I think about this with respect to the typical bike I see on the road (which, on the front range, is generally quite nice). They are typically carbon Trek-Specialied-Cervelo-et al, and in the same price range as the bikes you (and others, here) produce. I ride an old Merckx Team Sc, and I don't think there is really anything "better", so I've not yet replaced/retired it. Just curious on your thoughts.

Best regards.

[Eric007]

First off, had a very long ride on the terraplane yesterday with a running friend (on her much less colorful ti bike). Swell day. Today: it's back to heavy rain. But with the rain, I've enjoyed catching up on this discussion.

A question (or two) on a different aspect of the business:

1). My hunch is that you made a conscious decision to dedicate a certain amount of time to returning e-mails and phone calls. And further, unless you are a saint by nature, I suspect you made a conscious decision to be prompt and pleasant about it. Question -- how much of your day does this take, and did this just come naturally to you or do you make a special emphasis to do it this way?

2). I suspect you have the patience of Job, but how many inquiries by phone or e-mail do you handle for every sale? I suspect every builder must feel a bit of frustration handling similar questions again and again, and I can easily imagine you could lose a half-day talking to someone who winds up not buying a bike.

[Dave Kirk]

Word-a-licious answer(s), and I hope the folks .....................
On a separate note, given your martial arts background, you'd totally dig a lean study tour in Japan. Lots of overlap, and very Karate Kid in some senses. You are taught by a Sensei, conduct improvement exercises in a Kaizen dojo, etc.. I've been made to stand on painted foot prints in a single spot on the factory floor for hours just to listen and observe. Fond memories now, but I thought it sucked for the most part back then.

Thanks much.

I think a pilgrimage like that would be fantastic. I don't consciously think of Goldratt's 'theory of constraints' but there was a time when it was the bulk of my working life. I can still get sucked in the uncommon sense of it at the drop of a hat.

Let's have dinner at the next NAHBS.


Dave

[Dave Kirk]

Damn, thanks for all that Dave. you confirmed several things i thought, and showed me a new way to think about flow. here's an easy one: time spent on a lugged frame vs. a fillet one & why? Thanks!! - Garro.

Good to here that I put some valuable info out there for you. Buy the book and read it a few times. Being the one man shop that you are it won't have the same effect it would have for a bigger shop but it will still have real concrete value.

Dave

P.S. - I just realized that I didn't answer the core question - must be I was dopy after spending a long day standing in the sun. I would say that it takes me about 1-2 hours longer to build a fillet bike than a lugged bike on average. While a fillet bike requires no lug prep it does take longer to do the finish work getting it paint ready. I charge $100 more for a fillet frame than a lugged to offset the extra labor cost. Like you I want my fillets to look good from every angle and every nook and cranny should be just so and this takes time. As you know its easy to make rough fillets that look good once they are covered with bondo and paint but I just can't live with that. It will not make the bike ride better or last longer if the fillets are just so and it's hard to make an argument that they 'need' to be that way but it's the only way I like doing them.

D

[Dave Kirk]

Thanks for your insights. Fascinating, to say the least.

This frame: Kirk Frameworks - JK Special race bike : does it for me. One of the most beautiful, perfect bikes I've seen in a long time.

Now, a question or two:

1.) Who is your ideal customer?

-and-

2.) What is "good enough"? I think about this with respect to the typical bike I see on the road (which, on the front range, is generally quite nice). They are typically carbon Trek-Specialied-Cervelo-et al, and in the same price range as the bikes you (and others, here) produce. I ride an old Merckx Team Sc, and I don't think there is really anything "better", so I've not yet replaced/retired it. Just curious on your thoughts.

Best regards.

Hey there,

I see this is your first post - welcome. I'm glad you like that ride. JB did a stellar job putting color on that one didn't he?

Some answers -

1) I can think of many bad jokes with this one that would get me in trouble with Karin so I'll resist my sarcastic temptation and just answer the question. In short my ideal customer has a general idea of what they want but is, at the same time, very open minded and willing to consider change for the better and is wanting me to use my expertise to get it done..

2) I think that any bike that makes it rider smile and leaves them wanting for nothing more is good enough. For some people this means that the $89 Sears Freespirit they ride to the store is good enough and for others it means they won't even consider a Madone but have to have a Crumpton. I think it all depends on the rider. For me, while standing at the bench, it is good enough when I can find no way to improve it. At that point it goes into a box and I take up the next challenge.

What do you think?

Dave

[Dave Kirk]

First off, had a very long ride on the terraplane yesterday with a running friend (on her much less colorful ti bike). Swell day. Today: it's back to heavy rain. But with the rain, I've enjoyed catching up on this discussion.

A question (or two) on a different aspect of the business:

1). My hunch is that you made a conscious decision to dedicate a certain amount of time to returning e-mails and phone calls. And further, unless you are a saint by nature, I suspect you made a conscious decision to be prompt and pleasant about it. Question -- how much of your day does this take, and did this just come naturally to you or do you make a special emphasis to do it this way?

2). I suspect you have the patience of Job, but how many inquiries by phone or e-mail do you handle for every sale? I suspect every builder must feel a bit of frustration handling similar questions again and again, and I can easily imagine you could lose a half-day talking to someone who winds up not buying a bike.

Hello Sir,

I'm glad to hear you got out on the bike yesterday. Karin and I got out for a gentle spin late yesterday and it was wonderful. Now some answers -

1) You are right. I do make a conscious effort to return calls and emails ASAP and as corny as this might sounds I see it as just being polite. It's good business for sure but it's also good manners. I really don't know how much time I spend - I spend as much time as it takes. Mondays are the most intense days with emails piling up from the weekend and I generally spend from 8 - 10:30 AM or so catching up and then I answer calls/notes as they come in. Some builders seem to get frustrated by their customers contacting them as it ruins their flow or something. I look at it a bit differently. Without sales I would stand at my bench and have nothing to do and it's sales that put tubes into the jig and............. conversations are the precursor to sales. Plus I work alone all day everyday and the contact is refreshing and I can chat with the best of them.

2) the number of contacts varies widely. I've had as little as 3-4 during the entire design and build process and as many as 10 times that with other people who need more guidance through the process. I do sometimes talk with someone for a very long time and then never hear from them again. The only thing I dislike about this is that it would be polite if nothing else if they called and said they were going another way. I used to get a good number of calls from people who wanted me to design something for them right there and then. I did this a few times before I figured out that they were taking my experience for free and going to someone else to have them build my design. This seems to have stopped and I'm not sure if ti's becuase I can see it coming or if I'm sending out a subliminal message or what - but it's working and I have precious few time wasters.

Enjoy your Terraplane and send photos.

dave

[Too Tall]

Just suppose you were forced at gun point to make a bike for me. Would you change your address and post guards or face the music?

Kidding.

Thanks for your unwavering attention here. That needs to be said outloud.

Peace, Josh

[Dave Kirk]

Thank you for the reply to Gary, Dave. And also thanks for the book recommendation--I just ordered it.

Can you describe a routine or ritual that you find valuable, either from a measurable efficiency standpoint or a less measurable, mental standpoint? I'm not talking about anything directly involved with joining pipes--I'm talking about organizing your shop space, or cleaning and organizing your tools, or the like.

So.......... I have a question for you. I've seen your moniker "72gmc" for who knows how long now and always wondered what that was about. Do tell.

I do have a few routines that help me keep things flowing through the shop and keep it an easy and fun place to work.

* I never work on more than one bike at a time (see the whole "The Goal" post) so my mind can stay focused exclusively on that one bike until it's done and gone and then I can let it go and dedicate myself completely to the next one. This keeps the shop open and uncluttered and my minds follows suit. If you visit my place it's not full of bike stuff. There are very few bikes here - just our personal bikes and the one I'm building at that moment.

* When I'm done with a tool I take a few seconds, wipe it down, and put it back in the tool box. Nothing kills my productivity like working in a pile. I know it's cool to not care about this stuff and having metal chips for the 90's on your bench shows you aren't anal..... but I'm anal and I like a clean bench. Clean is the new cool.

* I take frequent breaks from the bench. I take two minutes to walk out into the greenhouse or to just stand in the sun and look at the mountains. At the end of the day I've 'wasted' ten minutes but my mind has been so clear and focused I've gotten more done than if I'd been chained to the bench. One needs perspective and a bit of time to just let what you've done and what you still need to do, soak in. Sometimes I just need to hear the birds and not think about angles and tubes.

* I work in a very small space. Very small at about 200 sq. ft. It's more than enough to be honest as I store boxes and packing supplies in my basement so all 200 feet are used to hook pipe together. Because it's so small it's very efficient. I can pretty much grab anything I need without taking more than 3 steps. It's all right at hand which means it's easy to get and just as easy to put away. I like small.

* Have a hobby outside cycling. I nordic ski, snowboard, skateboard, and race autocross (3rd race in my new to me car today and took first in class and second overall! - a good day). When I was younger I did nothing outside of cycling and it wasn't healthy or productive. Variety is the spice of life they say and I agree. I'm a better cyclist and builder because of the stuff I've learned doing my other things. It's a big world out there.

That's all that comes off the top of my head. let me know how you like the book.

Dave

[Dave Kirk]

Just suppose you were forced at gun point to make a bike for me. Would you change your address and post guards or face the music?

Kidding.

Thanks for your unwavering attention here. That needs to be said outloud.

Peace, Josh

I don't like guns so I'd take it from you just to show I could and then with that nonsense out of the way we'd build your bike together.

Thanks for the virtual living room where we can all put out feet up on the table. This place rocks and you made it so. Thank you.

dave

[Curt Goodrich]

Dave,

Back in the Serotta days, you were brazing the lugs with brass. I seem to remember when you started Kirk Frameworks you were brass brazing the lugs. Perhaps that's not accurate though. Regardless, now you braze the lugs with silver. What's up with that?

What was it like working with that tyrant Carl Strong? Beyond the endless brow beating, what did your days look like there?

Picture yourself in line for a really good burrito. What do you want in your burrito?

If you had a signature color/paint scheme what would it be?

Coffee- black or cream & sugar or one of those mamby pamby coffee drinks?

[Eric Estlund]

Coiler Snowboards - handmade race boards made by a guy in a shop, one at a time and wonderful. Knows how to read your snowboard mind and make the board do stuff you didn't even know you wanted it to do.

home

Have you ridden one of his new titanal sticks? Bruce is good people, and is to snowboards what you are to bikes.

Good taste- as always.

[zank]

* When I'm done with a tool I take a few seconds, wipe it down, and put it back in the tool box. Nothing kills my productivity like working in a pile. I know it's cool to not care about this stuff and having metal chips for the 90's on your bench shows you aren't anal..... but I'm anal and I like a clean bench. Clean is the new cool.

Dave

So glad you said that.

[Carl S]

Word-a-licious answer(s), and I hope the folks that are newbies, or contemplating getting in this game realize how fortunate they are to have folks like yourself, Carl and Richard share their accumulated business wisdom so freely. It's one thing to share the tech stuff, but so many forget, or for some reason think that this is too noble a pursuit to taint it with talk of money, but at the end of the day somebody has to eat and put a roof over their head, so the business side needs to be addressed.

I'd also like to say, for the record that it was Dave's sober, objective and practical attitudes toward the business of Framebuilding that I have based my model on. While we are very different at how we go about each of our businesses, at the core we follow the same principles, principles I learned from Dave. I can't thank Dave enough for the contributions he's made over the years and I feel very fortunate to have him as a resource for both the business side of the things as well as the building and design sides.

[dwightskin]

I eventually started cutting pegs off the remaining racks

Wow. Gets It.


Burning question from this mechanical engineer's materials-joining-mind and Kirk's background in production, building and testing seems the ideal guy to answer it?

How do you assure repeatable and consistent joints?

In my line of work, we rely on a few things
1) Process Characterization (shows when the process will fail, specifically find out where the "edge of the cliff is")
2) Process Validation (series of "runs" that are tested and statistically show to meet requirement)
3) Ongoing Process Monitoring, often destructive testing of the joints
4) 100% Visual Inspection



Dwight