62. Touring Kundinger Fluid Power & Talking the Evolution of Distribution | Paul Kundinger, President

Karthik Chidambaram: Hello, everyone. Welcome to a new episode of Driven by
DCKAP podcast. I'm here in Neenah, Wisconsin, at the corporate headquarters
of Kundinger Fluid Power Automation and Controls Distributor. We're really
excited today, and it's also something new for me. I'm here in Neenah,
really love the town. Came to Appleton, Wisconsin last night.

And in this Driven by DCKAP episode, Kundinger is a 60 plus year old
distributor, Parker Hannifin distributor, and instead of just doing the
regular talk, we thought we'd also tour the facility and talk to Paul
Kundinger, the third generation entrepreneur.

And we have with us, Paul, and he's also going to tour the facility for us
and talk to Kundinger. Tell us how Kundinger works. You're going to see the
entire facility. I'm really, really looking forward to this today.

And we have with us Paul Kundinger, third generation entrepreneur. Welcome.

Paul Kundinger: Nice to see you.

Karthik Chidambaram: Paul, thank you so much for joining me. And I'm really
excited. Thanks for hosting me here in Neenah. I really love the town. I
came to Appleton last night. Really nice airport. Easy to get in, get out.

Paul Kundinger: We like it. It's small, but a lot of options when you need
to travel.

Karthik Chidambaram: Yeah, I flew in from Chicago. So, Paul, first off,
thank you so much, you know, for having me here. Tell us about the Kundinger
business. This was started by your grandfather 60 years ago. Tell us about
how it all started.

Paul Kundinger: Yeah, it started in 1961. My grandfather was an entrepreneur
back in the day and he was a salesman for a company back then, and he
thought he could do it better his own way. As probably many individuals in
that time did. And so, he and a partner started the business.

Interesting fact is that we were originally called Miller Kundinger. And it
became Miller Kundinger because my grandfather lost the coin flip. It was
either going to be Miller Kundinger or Kundinger Miller. And one of his only
losses, I would say, and he lost it, and so we started as Miller Kundinger,
but we were only that for a short time, and then Ken Miller left and decided
to do his own thing, and we changed the name to Kundinger Fluid Power at
that time.

Karthik Chidambaram: Oh, very interesting. So I didn't know about the Miller
Kundinger story. Yeah. It's really, really cool. And how long was Miller a
part of the business, I'm just curious.

Paul Kundinger: I'd have to check the archives. It was only the first four
or five years, I would say that it was Miller Kundinger. I know when we
opened our location in Wisconsin in 1968 we were just known as Kundinger
Fluid Power at that time.

Karthik Chidambaram: But you guys started in Michigan, correct? So Michigan
is where Kundinger started and then you expanded to Wisconsin?

Paul Kundinger: Yeah, and we still have a location in Auburn Hills, Michigan
today. They're more of an automation and control focused business. It's very
similar in that we both do, both locations, do distribution and
manufacturing, but just different technologies that we generally use.

Karthik Chidambaram: Interesting. And your dad is still involved in the
business and you're a third generation entrepreneur. One question a lot of
people have is, how does the business get transitioned from one generation
to another? So can you just talk about that?

Paul Kundinger: Yeah, I'm not sure how every business does it. We were never
forced to work in our business growing up. We were always given the
opportunity when we were kids. And my brothers and I started when we were
14, generally speaking, working in the business and working in the warehouse
and cutting grass and doing other things like that. So, we were never forced
to have to work.

We were able to do other activities outside of the office and didn't have to
go to work if we didn't want to go to work, but we all just kind of enjoyed
it. There was no, from a transition from generation to generation, there was
no set plan laid out. I think when you have a family business, you probably
sit back just as I do today with the fourth generation, that's now getting
involved, is you want to see who has the passion and who has the interest in
the business.

And I think my dad and then my uncle, who's also involved in the business,
just kind of sat back to see who is going to show the interest and the
passion in the business. But being the sales guy that I am, at one point in
time, I went and put a proposal in front of my dad. on how I thought the
leadership should look for the next generation.

And that's kind of where we landed today. It wasn't exactly as I maybe
proposed it. But it was very similar to that. I've got my older brother,
Tom, who's very involved with me here in our Wisconsin location. I've got a
younger brother, Mike, who's a Vice President for us in Michigan.

And then I've got a cousin, Brian, who's also a Vice President for us in our
location in Michigan. So, the goal was to have all of us very engaged and
involved in the business, because we had all shown interest, and to try and
put a leadership team around those core four to lead us into this next
generation.

Karthik Chidambaram: Very interesting. So you're also started to train the
fourth generation into the business a little bit.

Paul Kundinger: Yes. I've had kids that are currently working for us as they
go through school. My brother Tom has kids that work for us as they're going
through school. And then my brother Mike has one child so far that's old
enough to work in the business, but he has other ones that are younger that
also potentially could have interest in the business.

So we're at that point where we're all just kind of sitting back to see who
has the interest in the passion for what we do and you know make it
available for them at some point in time, if they truly want to take this
business to the next level in the next generation.

Karthik Chidambaram: And what if somebody is not interested in the business?
Are they still a part of the business in some way or the other or not
really?

Paul Kundinger: We haven't had to really cross that bridge yet. If they're
not interested, they're not interested. I think for the benefit of our
customers and the employees, we need family members that are going to be
interested and engaged in the business.

So again, everybody has the opportunity if they so choose, if they want the
opportunity, they can take it. If they don't, I don't think anybody's going
to have an issue if, hey, fluid power automation and controls is not my
thing and I want to go out and do something different. Yeah, I mean talking
to you, you understand a lot of fluid power automation controls.

Karthik Chidambaram: It's really, really awesome. So you kind of grew up in
it and that's how you learned or, or you went to school for it?

Paul Kundinger: No, I went to school to get a business management degree.
But again, I'll be 48 this year and I started working when I was 14. And
I've worked in just about every facet of our business from the warehouse to
you know opening and operating a store, customer service vendor managed
inventory, worked on the production floor making power units.

So I've worked in a lot of different facets of our business and learning by
doing learning by being engaged with customers and seeing customer
applications and helping customers out is probably the most valuable
learning that we could do outside of going to vendor training classes and
things like that which we send a lot of our team members to on a regular
basis, but really that experience working one on one with customers trying
to solve their issues, work on their applications, is really where the
majority of the experience comes from.

Karthik Chidambaram: All right, let's go take a little bit of a tour of the
facility. And then let's continue talking. Okay?

Paul Kundinger: Sounds good. Yeah. So again, this is that little value added
area when everything we do, we try and make sure we're adding value to,
because these are very common products that you can find anywhere.

So it's important for us to be a key part of our customer's business by
doing something for them, whether it's cutting the tubing into small pieces
like this. or we do a little sub assembly.

Karthik Chidambaram: So this tube is what you said, which goes inside the
water softener, right?

Paul Kundinger: Yes, this goes from the water. This is in the water
softener. This connects the water softening unit to the brine tank where you
put the salt. So this just transfers water from your normal water supply
down into the brine tank as that brine tank fills up. So the customer wants
it cut in six foot pieces. So we buy the product in bulk, cut it in six foot
pieces to them, and then we ultimately deliver that to their manufacturing
location right to the plant floor.

So another little sub assembly that we do right here for a customer, this
goes on plasma cutters.

Karthik Chidambaram: What is a plasma cutter?

Paul Kundinger: A plasma cutter uses intense heat light to cut metal. Maybe
even uses a little bit of metal itself to actually cut it. It's used in the
metalworking industry, so if you had a big sheet of metal and you wanted to
cut a shape out of it, you take a plasma cutter rather than a torch and you
can use that to cut shapes. So this is on like a little plasma cutter.

This would be used, they use air in that plasma cutter, so it hooks up to a
pneumatic system. This just filters the air going into the actual device. So
we buy the filter by itself. We have the different fittings here and the
tubing, and we do this assembly and take and deliver it right to the
manufacturer all in one piece.

So this gets put into their device.

Karthik Chidambaram: Wow. So this is a Parker product as well?

Paul Kundinger: There are Parker products in here. There's different Parker
products, a filter, fittings and tubing.

Karthik Chidambaram: Oh, so you're assembling all of this.

Paul Kundinger: We're assembling it. So Sharon, right now we've got the
different size tubing. We'll have the different connectors here and we put
it all together and box it for the OEM.

Yeah. So we're just taking the filter itself and then we're starting to add
all the components and building it up for the OEM. But then we just get into
a traditional inventory here for distribution, right? So we keep the bulk
stuff in bigger shelves and then we use our carousel system to store all the
smaller parts, put them away randomly so that it helps prevent mistakes in
picking.

You don't have like items by like items. So you inadvertently pick the wrong
one. This would be the hydraulic hose. You can see it's got 4,000 PSI on it.
This is a Parker hydraulic hose. So it's high pressure. So this is, this is
actually making stuff move or doing some kind of work.

So when we talk about the fluid power side of things, we're always talking
about some kind of pressure. Pneumatically, it's going to be lower pressure,
probably typically under 150 PSI, but hydraulically We're seeing pressures
regularly get up to 6, 000 PSI and even higher. So we do an awful lot of
hydraulic hose assemblies and sell hydraulic hose to customers which are in
high pressure applications.

So that an excavator or any other construction. Equipment that you see as
you're driving down the road. It's all running on hydraulics these days And
it's generally gonna be higher pressure stuff like four or five six thousand
PSI on those hydraulics that are making the bucket move up and down as
they're digging or as they're pushing dirt.

It's hydraulics that are making that shovel, if you will, push that dirt as
it's moving along. So a lot of high pressure stuff. You know, a significant
part of our business is all in the hose and fitting side of the Parker stuff
with pressures up to 6, 000 PSI, all the way down to under a hundred PSI.

Just depending on the application and the customer. We will sell it in bulk.
So you see a lot of these are still wrapped up, but if a customer, as a
distributor, if a customer only wants 50 feet, we're pulling it down and
we're giving them 50 feet. We also make hydraulic hose assemblies with a lot
of these hoses where we're cutting the hose to length, putting on ends and
other accessories.

And I can show you that in a little bit.

Karthik Chidambaram: I'm just curious, right? So this is a lot of tech stuff
and, or, you know, the product stuff, right? How did you get to learn about
all this? Or did you go to school for this?

Paul Kundinger: No, I didn't. I mean, we do an awful lot of training for all
of our employees on this kind of thing. I've been doing this for 34 years.
So you just kind of learn by doing over the, over time. And spending a lot
of different time with customers and in, in plants out in the field, looking
at applications.

I've worked at our store over the years. So customers walking in all the
time to get stuff that they need right away. So that's kind of how you
learn. But training is a big part of what we do with our employees so that
they can learn that, learn the practical applications for most of this
stuff.

So just kind of get your head thinking about hydraulics. Forklifts are a
great example of hydraulics. These use hydraulics to move the forks up and
down, to tilt and all that. That's all done hydraulically. So this is a
hydraulic hose. You just got, this is just another version of hydraulic hose
that is, and so when you think of like, where is hydraulics to make this go
up and down? It's hydraulics that go in through these hoses that are making
this move up and down. Then you've got a couple of cylinders here and this
tilts this way.

So it's the hydraulics going in one side of the cylinder, pushing this out
to make it tilt this way. that's it. Then it goes into this side of the
cylinder, moving this back to that way. So when you think of the hydraulics,
not only when I talked about like the excavators or the backhoes or. Or any
piece of machinery that's moving. That's kind of a practical application
that a lot of us see day in and day out.

So this would be our shipping and receiving area. Again, we're a
distributor. So we're bringing products in bulk. Breaking it down and if a
customer only wants five pieces, they can get five pieces. So, you know that
comes from Parker in a bag like this and they may want, if they wanted 25,
we would get five more, put it together and send them five more.

That's what we do. We break it down and get it to the customers exactly in
the quantities that they need. So again, here's a little bit of technology.
This is from Epicor's Prophet 21. So we use these devices to receive. You
know, we're scanning barcodes. We're also using it to put away. We use it to
pull and-

Karthik Chidambaram: So this is the company which kind of made the device
for you?

Paul Kundinger: Yeah, that Zebra is the device and then we're running the
Prophet 21 software on there.

We're going to walk next door to our building next door. We call that our
technology center. It also houses our service and repair solutions. So I
mentioned value added being an important part of what we do here for
customers.

This building is pretty, that's all it is. So the value added, yeah, only
value added going on in here where this- I mean, there's value in us
breaking down bulk and, and shipping it out. But I only showed you a couple
of instances of value in the back where we're cutting tubing into small
pieces or we're manufacturing that filter.

This is all we do next door here, whether it's the repair side of things or
you'll see some manufacturing that we do. So from the service and repair
side of things. This is where we're taking existing components in the fluid
power world and we're going to do some kind of a repair to them prior to
that we'll disassemble the component We'll take a look at what wrong what's
wrong with it and then provide a quote for the customer on what it's going
to take get it up and running And it's a- This happens to be two hydraulic
cylinders here.

These go on a big piece of material handling hoist equipment. It's
everything from big stuff like this to just little cylinders like this. And
then some different pumps and even valves. So when we're in the repair
world, yeah, you're really down to like three main components that you're
repairing.

Pumps, valves, and cylinders with the majority of it being the cylinders.
Yeah. So the cylinder has a rod that extends out of it to move something. Or
it's moving to hold something or push something, right? So what we'll do is
we'll take it apart to take out the rods. and figure out what's wrong with
the rods.

Maybe they've broken, maybe they're just worn out. So if you can think that,
you know, this black piece is very similar to what we saw over there.
They're a little bit different.

Karthik Chidambaram: Okay.

Paul Kundinger: And these are the rods that extend out to do some kind of
work.

Karthik Chidambaram: Oh, so they go up and down like that.

Paul Kundinger: Yep. So when we thought, that forklift that we were at
before, I showed you that little cylinder, the rod just sticks out, that
shiny aluminum part sticks out to tilt the mast of the forklift, the in and
out. So we take it apart, try and figure out what's wrong with it. Sometimes
it's just new seals. Like there's a bunch of, these are all different kinds
of seals that go inside to prevent leakage and to provide a surface area for
the cylinder to move in and out on.

Sometimes it's as simple as just replacing those because again, these are
wear components, they wear. Sometimes there's real damage to that rod and
you need to replace or repair the whole rod. So here's just another example
of service and repair. This is a whole power unit from a customer that we've
taken out.

They need some work done to it. So we're taking it apart, trying to assess
what all needs to be fixed on it, putting new components on, and we'll
return this when it's all said and done. You know, like new fashion, maybe
making some updates to make it. Run faster, do something different. It just
depends on what the customer is looking for.

But they sent us this whole piece. We're now taking it apart and reworking
it, if you will. This happens to be a test area for us. So two different
test areas. This area right here tests systems that we build or repair. So,
this happens to be a system, again, that we're repairing for a customer, and
we'll hook it up, fill it with oil, and we'll run it through all the proper
tests to make sure it, the flows are running right, the pressures are
running right, it's not overheating, there's no leaks, so that when it goes
back to the customer, They can set it in place and hook it up and it be, it
can be worry free.

We may even be- we do install work too. So we may be repairing this and then
we'll go in and install it for the customer as well.

Karthik Chidambaram: Wow.

Paul Kundinger: I'm not sure on this particular one, but that is a
possibility.

Karthik Chidambaram: And I saw that you guys have your own trucks as well?

Paul Kundinger: Yeah. We have a couple of different teams that go out in the
customer plant. One would be the field service team where they're going out
and working on equipment like this in the field, or as we saw here, bringing
it back and working on it, but they'll also do the install. So when that
needs to be put back in, or if it's brand new and a customer wants it to be
put back in, our team will go out and do the install work as well.

Then we have another team that is our vendor managed inventory team, and
that's taking our distribution side of the business and going right in the
plant with customers where we're looking at their inventory. We're checking
to see if they need any extra inventory and we're taking an order, coming
back and fulfilling it.

And then the next time we visit, we go and put the product in their location
where they need it. So we do that inventory work for them. Test area here,
anything we build, manufacturer gets tested. So we put it through its paces.
We make sure the electric motors are good and operating properly.

Pressure flows. You name it, we go put it through its paces, we document all
that so that the customer can get that and have worry free that it operates
exactly as it was supposed to. This little corner of our building is pretty
much all component repair. So you can see we've, these are different things
that have come back and we've taken them apart to evaluate what's wrong with
them.

These are more hydraulic cylinders. These would be on a press, making a
small auto part. Things that might- these might be for like fuel injectors
for cars. So a press that does that. So they get, again, there's a lot of
wear components in here. All the seals and stuff are designed to wear and
eventually they're going to leak and the cylinder is going to leak.

So when it comes point in time, when they're starting to fail or not do the
work that they need to do, they pull the cylinder out. They've brought it
here to us. We've taken it apart to figure out what exactly is wrong with
it, quote, we're probably just getting ready to put this one back together
based on all the new pieces that I see here. So we'll put it back together,
test it, make sure that it operates the way it's supposed to from pressures
and things like that, and get it back to the customer.

Karthik Chidambaram: So, what does a Michigan facility do? I'm just curious.

Paul Kundinger: The Michigan facility is distribution as well. And they do
some manufacturing. Where, what you've seen primarily today is fluid power.
Most of what they do is going to be automation.

So they're doing, they're building panels. Good example is Michigan would
build a control panel like this. So this is an HMI touchscreen. So where
they do manufacturing or distribution, they're distributing components for
the automation space and building stuff that's more automation related with
HMIs, PLCs, servo motors and things like that, where what we do typically in
Wisconsin is going to be the dirty hydraulic stuff.

So, on the repair side, we have to make sure we have capabilities to make
components if we need to. So one of our technicians right there is remaking
some components. It could be as simple as, this is the piston. We'll screw
onto the rod and this is what goes inside the cylinder, right? So this
piston basically provides the block.

You'll pressurize one side, it'll move out. It's pushing on one side of the
piston. You'll pressurize the other side, which is the other side of the
position, piston, and it'll move back. So, if we need to, we can remake
these and our technicians will remake that. If we need to remake a rod, we
can remake rods.

Karthik Chidambaram: Oh, you can remake rods as well?

Paul Kundinger: Yep. We keep the stock in hand to be able to do all that
stuff. We can remake the tubes as well. So we've got the capabilities to
remake parts for the repair if we need to. We've had cylinders from the
foundry where molten metal has spilled on the cylinder and molten metal just
melts it.

So you've got big chunks of it missing. Like someone took a big bite out of
it, but it's from the molten metal that spilled during the process. When you
think of the value add that we do, I mean, that's what the repair is all
about. That’s definitely a value add, right? And we're taking it apart.
We're figuring out what's wrong. We're giving you a quote.

We're also, if that quote is really expensive, we can also say, well, here's
what a new one would cost. So now you have a comparative of what replacing
that would be versus fixing it. And we've got customers that drop something
off today and they're like, I need this tomorrow at the latest because we've
got a machine down and so it's kind of all hands on deck for situations like
that where we're scrambling to get parts.

If we need parts to turn around or repair for a customer, we've done some
same day. We do an awful lot next day for customers because they can't
afford to be down. Their machine isn't making any product if they're down
and we do whatever we can to make sure they get up and running. We get into
more of the manufacturing side here.

This is a bare bones hydraulic power unit. We're just getting ready to start
doing some assembly on this. We have engineers that design all this.

Karthik Chidambaram: Oh, they design this?

Paul Kundinger: They'll design, they're going to design, we're going to add
a lot of components to this. We're going to add we've got some over there
that are completed.

But yeah, they've designed everything with the customer. Sometimes the
customer sends us the designs and we just need to modify it. But we're
designing a system for a customer that we're going to put together. We're
going to test. We're going to set it up and ship it to them and it's plug
and play for the customer in their machine.

This is going into the machine tool world at the end of the day. So this
will plug into some kind of a vertical, big vertical turning center or a
horizontal milling machine or something like that. You're talking big parts,
for like SpaceX and Caterpillar and end customers like that. That's what the
machine tool world is, is using for stuff like this.

Karthik Chidambaram: Oh, so you do a bit of manufacturing as well in
addition to distribution and repair.

Paul Kundinger: Yep. So this is where we're going to take- I would consider
us mostly an assembler at this point because we try and have like, this is
the hydraulic tank here and it's got a panel welded to it. So we try not to
have to do any of the cutting or welding of all this stuff.

We have the tank manufacturer do that. So when it comes in for us, we can
just assemble it all together. Put whatever coat of paint on it the customer
wants for their spec. Okay. And again, test it and get it out the door for
them. Here's a, here's a more of a finished unit. One of the finished units.

It's a little bit different, but just a different size, right? So that one
had no components on this one is basically done. So we've assembled all the
components on it from the electric motor here with a hydraulic pump. This is
a heat exchanger to remove heat from the oil from operating. It's got
filtration on it and some other stuff.

So we've assembled this all together, test it. This is going to go into
another customer machine. This is in the paper processing industry.

Karthik Chidambaram: So what would this be used for, this whole machine?

Paul Kundinger: If you’re in the paper industry, they're using more and more
recycled paper to make new paper. So this one, I believe, is for a machine
that recycled paper comes back to the paper plants in bales.

Almost like bales of hay, but they're wire bound generally, or they're
bound, I think wire is the typical thing. So the bale goes onto a big
conveyor, and what the machine that this goes in ultimately does is it cuts
that wire, so the paper bale can just basically fall apart, and then that
recycled paper can flow right back into the pulper.

So this is operating a big saw, if you will, to cut that wire. Again, it's
as simple as, this is Either a spare part or a replacement part for a
customer. This is an electric motor with a hydraulic pump.

The hydraulic pump is what provides all the pressure. So you hook the
electric motor up. To your electrical, right? The motor spins, makes the
pump pump, shoots hydraulic fluid out at some kind of a pressure and flow to
do some work.

Karthik Chidambaram: It says Siemens in there, so you want to buy from them?

Paul Kundinger: That's probably a customer spec. We probably don't typically
use a Siemens electric motor. We'll do whatever the customer spec is here.
So brand isn't as important to us here.

We're typically going to try and use Parker, but if the customer wants,
that's a hydro or an electric motor, so it doesn't make sense. But if a
customer wanted something instead of a Parker pump here and that was their
spec, we're going to go source whatever they want and build them the unit
that they want.

Karthik Chidambaram: So it's more like a custom designed solution.

Paul Kundinger: Yeah. These are all custom designed. This is another
hydraulic power unit, but it includes, this is a pneumatic. Filter regulator
assembly on here. This is doing some air preparation. So they'll hook their
airlines up to this along with their hydraulic lines, all coming into one
central thing.

And there's all the different valving here to control whatever functions are
on the machine. So yeah, just another design similar to the gray one we
showed you there, but this is a completed one and it's doing different
functions. It's probably in a different type of machine. Another one here,
another piece of custom. Very similar, just bigger than that gray unit,
right?

So another machine tool situation here, and it's just doing different
functions within the machine. And so we do, yeah, we do all the design work
on this. We try and develop packages. This is for OEMs that are flexible. So
you'll see some cutouts here where we don't put anything because maybe they
haven't added that option.

Here, this is a big valve manifold. There's no valve right here because they
don't have this function, whatever that function might be. They don't need
it on this machine, but we've tried to create a package for them that keeps
the package as similar as possible every time. And now when you don't need
something, you just block it off or leave it blank, right?

This is one of our field service vehicles.

Karthik Chidambaram: Yeah, I saw it outside.

Paul Kundinger: Yep. So they're just going in plant to, you know, it could
be as simple as the units that I just showed you that we manufactured are in
a plant somewhere and they're not operating properly. They don't know what's
wrong with it.

They don't have the skilled people to go in and figure out what's wrong with
it. They just know it's not going as fast. It's not finishing whatever
they're trying to finish. They've got problems. So they call us and our team
will go out and troubleshoot and figure out what's wrong with it. And then
we can start working on it.

We also can install- like those machines might be in one part of the plant
and that saw that I talked to you about might be in a completely different
part of the plant, but they've got to connect them. So we do the plumbing
from the machine to the power unit that we built. So we'll go in the plant
and run all that tubing or pipe or whatever it needs to be.

For the customer for the install. And when did you start this field
servicing kind of side of the business? I feel like it was always part of
what we did. When we opened the technology center, when we were doing,
building more and more power units, it became more and more of our business.
Yeah, so it was just natural that we'll build something for a customer and
they'll ask, hey, can you come out and install it?

Well, of course we'll go and install. Then they started having issues with
it. And it's like, hey, we're having problems with it. Can you come out and
work on it? Can you fix it? We'll walk in the Parker store entrance.

Karthik Chidambaram: Sure. So you have your Parker store so that people come
in and just buy stuff..

Paul Kundinger: Yeah. It's the equivalent of us going to the hardware store
when we have to do projects around the house. This is for the industrial
customers that need stuff right now. They can't wait. Again, it's that
contractor that's out working on building a new building or building a house
with their excavator, their backhoe, or some piece of equipment that the
hydraulic hose is worn out to the point where the machine doesn't work
properly.

Your road crews that are putting down a new blacktop or new cement something
breaks, they can't, nobody wants to sit in the long line of traffic, right?
Because they can't continue to do the work to your plants. It's a processing
plant, maybe with a conveyor that's run hydraulically. And that hose where
it's out, they just can't wait. They can't be down. And that's what the
Parker stores do.

Karthik Chidambaram: Just similar to walking into a Home Depot store and
buying stuff. People just come in.

Paul Kundinger: Yeah, the goal is to put inventory out in front of customers
so that they can kind of shop for themselves if they need to, especially as
our stores get very busy at times.

Yeah. It also is an opportunity to kind of merchandise stuff and show them
things that we. They may not typically see us for, so we try and keep a
representative inventory of different lines that we carry here as well. Not
only the stuff that we know they're going to need for an immediate need, but
other things where we do some signage that talks about our repair, right?

So if they're going into our stores and they don't know that we do repairs,
we make sure we try and market the other parts of our business that we do
here. But it's stacked with just regular fittings that customers are going
to potentially need to, you know, pinch, whether it's again, like I
mentioned, it could be a down situation.

It could also be just somebody working in a plant putting a machine together
and they just don't have one of these. They need one. It's not mission
critical that they go do it now, but they want to go shop someplace and
compare this one to this one and be like, is this the right size? Or is this
the right size?

So it allows them to put their hands on the product which normally they may
not have the opportunity to do. Yeah. So it's just like going to your Home
Depot, your Lowe's. Yeah. Not as big, obviously, but an awful lot of
different products that customers need, including some of those things they
don't think about.

We sell hydraulic oil.

Karthik Chidambaram: Wow.

Paul Kundinger: You know, so it's branded and repackaged. So, you know, that
hose blows for that excavator, whatever we've been talking about when it
blows, the oil goes wherever it's going to go, right. And they need to fill
up their reservoir. So you get people that come out here and they need to
top off their fluid because the reservoir was low from the failure of the
hydraulics.

Yeah. Towels to clean your hands, right? So simple things like that, that
our customers over time, they're like, hey, it'd be nice if you guys had
these here because I need them anyway. And so we started adding them.

Karthik Chidambaram: So how are you getting that customer feedback, right?
Because it's really good. Something you said, so where are you capturing
that?

Paul Kundinger: While we try and get our team to capture it as it happens,
we're working to become ISO certified, and part of that process is to
capture feedback. So we have a system where you can log that. But we also
survey our customers quarterly, and try and get their feedback on how we're
doing.

So this is kind of the stuff that's broken. So when we talk about components
in the field breaking or hoses wearing out, usually when that happens, work
stops. Like we go to that forklift, if one of those hose gets a hole in it
or has a failure, that forklift isn't going up and down. It's not going in
and out. It's done. So, typically what's happening in our Parker stores a
lot is what's happening out in the field.

The customers can't wait. They take that hose off, they bring it to us. Our
guys identify everything that's going on with the hose, from the sizes of
the threads, to the pressures that are running through it, to any other
accessories that might go on it to prevent wear. And we're making him a new
one so that he can leave with that hose to go put it back in and get up and
running.

Karthik Chidambaram: But you also have the hose in stock here, in case it
doesn't.

Paul Kundinger: Right, so we're stocking the hose, and we're stocking the
ends that crimp on. So this is the bulk hose like we looked at over there.
We stock the ends which are here in our carousel. And you use a hydraulic
crimping machine to crimp that end on because this is a 4,000 PSI hose.

You just don't push those ends on, you push it on and then you use a crimp.
We can watch a little bit of that. We're running some crimps over here, it
looks like. Do you have a couple of these to run, Ken?

Yeah, so this is lower pressure stuff, but it's still a similar process to
what we were talking about. So we've got bulk hose here, and we're just
pushing on an end, and now for this to stay on, we've got to do a crimp
here, and the, and this is more of a production style crimp.

Yeah, so now it's permanently affixed to this hose. This only gets one on.
This is a drain hose for a generator. Might be a vent hose or something like
that, but they want this end crimp. Again, it's obviously low pressure
because there's nothing on this side. It's just gonna-

Karthik Chidambaram: It's awesome.

Paul Kundinger: Thank you.

Karthik Chidambaram: Thank you. Paul. I just want to say thank you for the
tour of the entire house. Really enjoyed it. So, Paul, I think you also have
a timeline, you know, so I thought, you know, that was really, really
interesting in your operation. So can we just look at the timeline and,
yeah.

Paul Kundinger: Yeah. This is just kind of a highlight of things that have
happened with Kundinger over the years.

We wanted to, you know, family business is important to us and we wanted to
make sure we highlight the key parts of not only the family, but the family
business and where we've come from. I think it's pretty special that we've
been around since 1961 and that we've survived to the third generation.

So, you know, the first plaque here highlights 1961. And you can see here's
a picture of my grandfather on the left and Ken Miller on the right and the
indicator of Miller Kundinger Sales Engineering.

Karthik Chidambaram: No, it's really, really nice. You know, I mean, you
talked about Ken Miller. I didn't really notice this in the start, but then
after you tell me, it's nice that you have a picture of him as well.

Paul Kundinger: Yeah.

Karthik Chidambaram: You know, that's really nice.

Paul Kundinger: Yeah, he and my grandfather were good friends at the time,
and they decided to start the business together. And it's an important part
of our history.

Karthik Chidambaram: And are you guys still in touch with the Ken Miller
family?

Paul Kundinger: I am not. I'd have to check with my father on that. You
know, my grandfather's passed away. Over 20 years ago now. So I would have
never really had touch with Ken Miller based on the generational ties. It'd
be interesting from my dad's perspective, if he's ever been able to keep in
touch.

Karthik Chidambaram: So I saw that you guys also bought 40 acres of farmland
in Michigan.

Paul Kundinger: Yeah, my grandfather was truly an entrepreneur back in his
day, not just in starting the business. At one point in time, he knew that
he needed a new facility for the operation.

And he found some land in the town that they lived in and that the actual
first business was in which he developed into an industrial park. Again,
selfishly speaking, he needed a location for his own business and he found
some available land and had the foresight to turn it into an industrial park
for other businesses just like ours.

Karthik Chidambaram: Oh, that's how businesses are created, right? So you
don't need something and then-

Paul Kundinger: Yeah, he had the need. So there was some vacant farmland and
he was able to develop it.

Karthik Chidambaram: Right. Yeah.

Paul Kundinger: Yeah. And then we opened in Appleton here and in 1968, and
you can see the indicator that that's when we officially dropped the Miller
name from our business name.

And we had a gentleman that ran that business for us over here until kind of
the mid seventies. And then again, much like entrepreneurs want to do, he
wanted to do his own thing. So he went off and started his own business. And
in 1980, my dad came over to run the Wisconsin operation for the family
business.

Because he was a sales manager at the time he was spending time over here
anyway. Working with our sales team and customers. It was just natural for
him to come over here then and to run that operation.

Karthik Chidambaram: And I also really like how you guys have the timeline
in here because it also helps more employees, right? Kind of, it's, they're
part of a legacy and, you know, it's not like a- just started and doing
things, you know, it's really nice that you have this document in here. It's
very inspirational, I would say, just to have this and it's really nicely
done too.

Paul Kundinger: We're very proud of what we've done. I think we've got years
and years in front of us. But, you know, when I think of what my grandfather
did to start the business back in 1961, and what he's done to grow it. And
then what myself and my brothers and my cousin have been able to do since
we've become kind of that third generation to continue to grow that.

I think the legacy is very important and it's important for our employees
and our customers alike to see that we're constantly reinvested and
committed. To the success of this organization. And that's what the timeline
shows is really our commitment to the organization, our investment into what
we do for our customers and our employees so that we can all benefit at the
end of the day.

So, you see where we started in 1990, we opened up the technology center. It
had a different name back then, you know, a new business that we opened up.
In 1998, we moved to this building. In 2003, we opened a store in Green Bay.
In 2010, we opened a store in Sheboygan, and then in 2014, we opened our
service and repair solution.

So continuing to try and grow the business and, and work on that legacy for
the benefit of not just the family, but the employees and the customers.

Karthik Chidambaram: Very nice. Yeah. So the theme of this show is driven,
right? So, Driven by DCKAP. So one question I had for you, Paul, you're a
third generation entrepreneur. So I would think that, you know, when you
grew up, it's not like your granddad or your father, right?

So maybe you would have had a comfortable living or you grew up in the
business. How are you driven, right? So how are you driven to do new things?
Maybe, you know, it's not like- Sometime when you're really struggling in
life and you don't have a lot of cash Always hustling. But sometimes when
you get a little comfortable with a little bit of comfort, how are you
driven? That's my question.

Paul Kundinger: It's hard to say why I'm driven. It seems cliche, but the
people at the end of the day are really what I think keeps me engaged day in
and day out, whether it's our employees and what they bring to the table
each and every day. And the effort they put into the success of our business
to the people that you meet, customers, and how they're trying to solve
problems, create solutions for our vendors, just good friendships that you
can forge over the years.

The people part, I think is really, and the relationships and the
connections that you can get from the different people that you meet in our
industry. I was also, for many years I coached my kids in sports and I was
always driven by winning and I like to win. I like to compete. I had four
brothers.

You were competing at every everything from the dinner table to going
outside and playing at the time Everything always seemed like a competition.
So I enjoy the competition of business. I enjoy winning, whether it's new
accounts, new customers, new solutions for customers. It's just one of those
things that's in my nature that creates a craving to win not at all costs,
but to win on a regular basis, I think is what keeps me coming back.

And then when you combine that with the people and the different industries
and businesses that we touch each and every day, it just keeps it
interesting, in that interest. It just wants you to keep coming back day in
and day out. It's never the same.

As we walked through the tour, you saw, we talked about machine tools. We
talked about construction. We talked about municipalities you know, we
talked about a press, the different industries that we cover in our business
is so diverse. It keeps it interesting each and every day.

Karthik Chidambaram: So you're constantly learning and winning motivates
you.

Paul Kundinger: Yeah. And in seeing different applications solving problems,
whether not necessarily me having to solve those problems, but our team
solving problems, working hand in hand with vendors to come up with great
solutions that, again, they've gotten, maybe the problem is just a customer
has downtime and we've been able to get them back up and running.

Maybe it's making a machine run faster than it ever ran before. So they can
put out more product, to get to the end customers. It's just so diverse and
very interesting at the end of the day.

Karthik Chidambaram: No, I get motivated by that too, in terms of, let's say
when your team does a great job, it feels like, hey, you know, it's really
amazing that they are so wonderful and they do a great job.

And you also get a sense of pride in that when they do great things. So it
also makes you feel better.

Paul Kundinger: Yeah, for sure.

Karthik Chidambaram: But Paul, what's been some of your most challenging
times in business? Can you talk about that? You know, something you were
really challenged and hey, something you learned from that?

Paul Kundinger: As a family business, where we obviously employ many
different family members. And one of the big challenges is how do you
balance that with running a very profitable business at the end of the day
to continue to reinvest? So making sure that we can run a profitable
organization to continue to grow, to keep it in the family at the end of the
day, because I think what would make my grandfather proud looking down on us
would be to see it remain a family business.

I know what would make my dad happy is to keep it a family business. So to
be able to build an organization that continues to invest, in times the
economy just slows down and it has a huge impact on us. So we've spent the
last 10 years trying to build a business that can weather those storms.

So right now there's a lot of press out there, right? A lot of uncertainty.
I feel like we're in good shape to weather a storm if there happened to be
an economic storm here coming up in the next year or two. So, it's been
challenging to get to that point, but I think it's been very worthwhile to
put the time in to really look at how we do business and as the third
generation and create a model that allows us to invest in growth, even when
times aren't that great.

And the last 12 to 14 years has actually been pretty good. We haven't really
had a lot of setbacks, but being able to put the things in place that,
should one come, we would be in good shape. And I think we were tested a
little during the early pandemic and we were able to not even skip a beat
with the way we were operating in that. And it's, while those times were
very stressful because of the uncertainty, I think what we had done to lay
the groundwork to be a successful, profitable organization at that time made
you feel like we're going to be okay at the end of the day, no matter what
they throw at us, or what the pandemic throws at us from you know, the
initial health concerns to the supply chain issues that we battled towards
the end of it.

And we're out the other side of it, you know feeling really good right now.

Karthik Chidambaram: And you talked about conflicts, right? Or managing the
expectations of family and all that. Do you have any advice around that? How
do you do it? I mean, because obviously different people have different
priorities when it comes to dealing with an employee who is not a family
member.

I think it's fairly straightforward, right? But then if it's from family,
how do you deal with it?

Paul Kundinger: It's definitely a delicate balance. But what we try to do in
the third generation is be upfront with everything. Yeah. I think we always
got to bring it back to - we're running a business here. At the end of the
day, we have to make the best decisions for our 60 employees and our
thousands of customers that we have, we just have to be upfront and
straightforward with what's the right thing to do.

Which, again, there’s no silver bullet to that. It's challenging at times,
but I think we've been able to become pretty transparent in how we do
things, you know, each individually and make sure that we're keeping the
business side of what we're trying to accomplish in mind with every decision
and conflict that we have to resolve at the end of the day.

Karthik Chidambaram: Absolutely. So do you also have board meetings and all
that? Is that a constant part or how often do you meet as a family to
discuss what's working and what's not?

Paul Kundinger: We do regular corporate governance. We have a couple of
board meetings every year. We also do a quarterly call with my father and my
uncle who are the shareholders of the corporation.

And keeping them up to date on what's going on in the business both
financially and just general details of the business from employees to you
name it. So we do that. And then the third generation, we just have regular
calls whenever warranted for whatever situation we're facing. So we try and
keep it operating much like a normal corporation would.

We don't probably have as many outsiders that look in and offer us advice.
But that's where I try to engage with peers and with other forms of
networking, like a Vistage group or a tech group to be able to just bounce
ideas off of other people in industry, in different industries on how they
handle different situations that come up.

Karthik Chidambaram: Yeah, that was my question as well, right? So in terms
of how do you keep yourself updated as a president of the company? You know,
there's a lot going on. How do you keep yourself updated with the different
trends which are happening in the industry?

Paul Kundinger: Yeah, well, we talked about, you know, people being very
important before my connection with the industry. Different people, it’s
very important whether it's peers in our industry. So whether Parker
meetings or trade organizations like the Fluid Power Distributors
Association and other ones like that to get around the table in casual
settings at times to be able to say, hey, here's what I'm going through. Are
you guys seeing the same thing? Is it different? How would you handle that?

The same with a Vistage or a tech group to sit around the table with people
in similar positions in all different types of organizations and be able to
just get that mind share from other people that see things a little bit
differently.

But at the end of the day, probably run into similar challenges that they
have had to overcome or they're facing at that time.

Karthik Chidambaram: Do you guys also have family retreats or company
retreats where you take the learnings, pass it on back to the team?

No, we don't, we haven't done very many company retreats. I think it's one
of our challenges is that I feel like we run fairly lean at times to be able
to take a lot of employees out. We do it in small doses or small groups of
employees will get together and, and get off site for, for some stuff. But
as far as a family retreat or a company retreat doesn't really happen very
often, if at all.

Karthik Chidambaram: Yeah, no, I think on our business, obviously, you know,
we are in the tech business. We are also fully remote and fully distributed.
It's a little different compared to how you guys do things because you guys
are here, which is important, right? These retreats I find really helpful.
Maybe that's something you should try as well.

Paul Kundinger: Yeah, it'd be interesting.

Karthik Chidambaram: In this show, we interview a lot of leaders and one
question we ask is, what is a question they would like to ask the next
leader we interview? And we recently interviewed Robert Wolcott. He's a
professor at Kellogg and Booth. He's also writing his new book called
‘Proximity’.

And one question he asked is - What is a headline you would like to see five
years from now? It can be anything. So I know I didn't tell you the question
in advance, but yeah.

Paul Kundinger: Aside from ‘Paul wins the Powerball, the Largest Jackpot in
History’, I think from a business standpoint, the headline that I would like
to see is something around all the profits of the economy were wrong about I
think when I look at, when I attended economic forums, they all talk about a
potential large setback or right in the next five to 10 years.

Usually it's 2030 to 2035 based on who you read. So to see a headline that
Everybody Was Wrong, and whether it's, we've done some things as as a world,
as a country, as organizations to avoid all that I think, that'd be a great
headline because there's a lot of fear mongering, it feels like at times
that there's this date out there in time that based on the way things are
going, there could be a major setback, right? Which could have a devastating
effect on all of us.

And it'd be great to see that people were wrong. The pundits were wrong. And
the prosperity that we've been able to see during the pandemic and even the
years before that just continued. And we didn't really have to suffer any
major setbacks.

Karthik Chidambaram: Oh, interesting. I forgot who it was, but there was
someone who famously predicted that maybe sometime around the 1970s or 1980s
because of the population and all that, the world is going to come in a
complete famine. Yeah. There's not going to be enough food to eat, but they
were completely wrong.

And yeah, so I thought that was interesting. Yeah. I think that's something
similar to what you're telling, yeah.

Paul Kundinger: Sure. Yeah. There's, again, there's a lot of fear mongering
about, you know, doesn't matter which side the government you're on the path
that the government's on and from spending, and all that, that we could be
in for some hard times. And it would be nice to know that either we fixed
the problem and didn't have to. have significant changes or we're able to
just avoid it all together by just making changes.

Karthik Chidambaram: And what do you do outside of work, Paul?

Paul Kundinger: Oh, outside of work I spend an awful lot of time with my
family. I've got three kids, two boys and a girl.

It goes boy, girl, boy. My oldest and middle are in college. And my youngest
is still in high school. So, we try and travel when we can, we play golf
when we can as a family, sit and relax. It's always nice to just kind of
decompress after spending so much time at work. But yeah, generally I'm
spending time with the family doing something.

Karthik Chidambaram: My last question for the show. What book are you
reading right now?

Paul Kundinger: I just started a new book. It's called ‘Caddie Tales’. It's
a caddie from Whistling Straits golf course in the Sheboygan area. And he
wrote a book on trying to tie life and caddying together and kind of that
journey as you're a caddy. So, I just started it. I'm looking forward to
being able to finish that.

Karthik Chidambaram: Interesting. And I'm still on the same book, you know,
because I've been traveling. ‘Multipliers’ by Liz Weissman. I just started
it, but I think I have a long way to go to get that complete because yeah,
with the travel that's happening. I think I need to really get back to
reading.

Paul Kundinger: Yeah, yeah. It's a good way, again, to just kind of
decompress from everything you do. I like to listen to books. Whether,
especially when I'm traveling on a plane, just put a book in and kind of
listen to it. I find that I have to regularly re-listen to books when I do
that.

But it's just good to, I think, to just pick up some little tidbits of
things here or there that can offer some improvement for yourself.

Karthik Chidambaram: No, definitely. I mean, I love listening to podcasts as
well, and even Driven by DCKAP is also on Spotify and Apple in addition to
YouTube.

But Paul, I really want to say thank you. It's been awesome. I didn't expect
we were going to do this, right? I thought, you know, it's just going to be
a recording in a room and, you know, we're just going to talk, but you have
been really, really kind. Thanks for hosting me.

Neenah, loved the place and also thanks for the tour. I mean, you know, it's
not often you get to see how distributors work and you just don't do
distribution, but you also do repair. You also do a little bit of
manufacturing.

You got us you know, first hand visuals of how you guys do things here at
Kundinger, a 60 year old business, third generation entrepreneur, President
of Kundinger. Paul, thank you so much. Great seeing you.

Paul Kundinger: Thank you. We appreciate Driven coming out and checking us
out. And come back anytime and check out our facilities.

Karthik Chidambaram: Thank you so much, Paul.

Paul Kundinger: Thank you.