Mike Payne
President of Hill Manufacturing
Business is business. Mike Payne's prior work experience helped him purchase Hill Manufacturing. Rather than focus on equipment, he focused on finding efficiencies, and that started with a new ERP system.
Digital Technology Provides Solid Foundation for Hill Manufacturing
Business is business, no matter the industry, and collective business knowledge from a variety of industries helps ensure success.
I've been involved in almost 100 companies in almost any industry you can name, and everyone thinks their industry is totally unique,
says Mike Payne, president and owner of Hill Manufacturing. The reality is, they're not that different; it's still business. I can bring what I learned in the entertainment business to the construction business to Hill Manufacturing. It's collective knowledge that helps me.
Based in Broken Arrow, Oklahoma, Hill has a fleet of 38 CNC machines and a large welding and fabrication business. The company has been in business for four decades and, with about 40 employees, is one of the top job shops in Oklahoma.
Payne's professional career started in the software industry, which then flowed into a career in mergers and acquisitions. Over the space of about 15 years, he assisted entrepreneurs with the funding, starting, buying, managing, and selling of dozens of companies across multiple industries throughout Oklahoma and the region. The work created a unique understanding of business efficiency. Now, almost five years into ownership of Hill Manufacturing, he's doubled company revenue.
Through better processes and a changing culture, we got leaner, we got faster, and we got smarter,
says Payne.
Managing Manufacturing
One of the first things Payne did as owner of Hill Manufacturing was attend IMTS 2018 to purchase an ERP system.
I was only six months in as owner, and the last thing I needed to do was spend a million dollars on new machines,
says Payne. I did my research on ERP systems and machine monitoring and knew I had to go to IMTS to demo systems and make connections. Our new ProShop ERP system was up and running a few months later.
Because of his software background, choosing an ERP system came with a higher level of knowledge.
What I didn't like about ERP systems was that they are inefficient for shop floors,
says Payne. Most I had dealt with were used for Fortune 500 companies, so they were massive systems built in the finance and accounting departments for job costing. I'm not trying to impress Wall Street; I'm trying to get parts out the door.
Pro Shop ERP was an affordable option with a made-to-order,
scalable business model.
It's per user, per month, so you're not spending $100,000 up front,
says Payne.
Payne met one of the ProShop founders after listening to him on the MakingChips manufacturing podcast.
I heard Paul van Metre on MakingChips, and I thought, ‘I need to go meet this guy,’” says Payne. “He was the first person I ran into at IMTS. The whole experience there was great.”
Payne created dozens of connections across the country from attending the show.
It really helped send me in the right direction in the manufacturing world,
says Payne. If I want to be the Silicon Valley of machine shops, I need to know about the things at the show and stay innovative, and where else am I going to do that?
When someone asked him what he was going to see at IMTS, Payne promptly answered, I'll see my shop in five years.
In fact, things he saw in 2018 are on his shop floor today.
I spent a lot of time looking at robots and cobots, and a month ago we installed our first cobot, a FANUC,” says Payne.
Payne recognizes that the latest technologies might not be the right fit when he's at the show, but it will likely be a good fit down the road.
Technology comes down in price, and that allows me to stay competitive and grow,
says Payne. The price point came down on the cobot to the point that it's a no-brainer. We want to add maybe five or six this year. I want one in every cell.
The Machine Shop of the Future
While Payne believes Hill Manufacturing represents a well-functioning machine shop, he sees a slightly different looking shop in 10 years.
I think a machinist is going to walk into the shop in 10 years and we're going to say, ‘Here's your robot. Keep these three machines running,‘
says Payne. He will be the skilled guy that will program the lathe, the mill, and the robot. He'll get the lathe set up, get the robot tending to it, and move on to the mill. I can't wait to see it.
Payne has also implemented machine monitoring using Datanomix to transform real-time manufacturing data into operational insights.
We have had great visibility into our performance yesterday or this morning, but I want to know how we're doing right now,
says Payne. Real-time data is priceless, because then I can change the outcome of a job.
Another move Payne made was to implement the Vending Integration Productivity (VIP) program from Zenger's Industrial Supply. Under this program, Zenger's only charges its direct cost for the tool plus management fee based on delivered productivity improvements. (Owner Jason Zenger is one the hosts on the MakingChips podcast.)
With the upcoming IMTS show, Payne is reminded of IMTS 2000 when he attended for the heck of it
while he was in software. He expected to check out a barcode reader for an integration partner, but mostly figured he'd enjoy some time in Chicago. Upon walking in, he was stunned and remembers the feeling today.
I didn't remember the story until four years ago when I was running a successful private equity fund and looking to buy something in manufacturing,
says Payne. When the opportunity came up to buy Hill Manufacturing, I questioned whether it was the right thing. My wife reminded me that it was ‘that one show in Chicago’ where I fell in love with the shop floor and brought up the idea of having my own manufacturing shop someday. I didn't consciously try to make it a reality, but here I am.
In short, how could you go to IMTS and not think, “I'm in the right space at the right time to do something really cool?”