Clif Coleman / Mid-South Metallurgical
Today we have an interview with a fellow who brings a very interesting and relatively unique perspective to the heat treating industry, Clif Coleman, owner of Mid-South Metallurgical in Murfreesboro, TN.
Clif I mentioned how you have a rather unique perspective on the heat treating industry and this is because you entered the industry much later than most of us seem to. Could you please tell us how you ended up as the owner of Mid-South?
“I spent the first 25 years of my career in the corporate world in a variety of industries – moving from engineering/manufacturing to operations and general management. In 2006 I left a great corporate job with a multi-national company, moved from Texas back home to Middle Tennessee to buy a business and “strike out on my own” – so to speak. I looked at wide variety of businesses keeping three basic criteria in mind – the business had to have a stable track record, it had to cash flow to pay the bills and service the debt, and it had to have significant growth potential. I looked at businesses in every imaginable niche and industry. I “kicked the tires” on probably 40 or 50 businesses, took a “deep dive” look at probably ten, and did Letters of Intent and due diligence on 3 or 4. After all of that, which by the way was one of the most interesting experiences of my professional life, I found that Mid-South fit my criteria – although I had no experience or knowledge of the commercial heat treating industry.”
What was your impression of the company the first time you walked into the plant?
“The business was typical of many of the “small businesses” I had looked at in my quest to find the right one – a family owned “mom and pop” operation. Candidly, having never been in a commercial heat treating operation I didn’t know much about what I was looking at. It was clear that the equipment was old and tired with a lot of opportunity to improve efficiency on the shop floor. The business was well known and respected in the local market and had grown by reputation and “word of mouth”. But, there had never been any serious sales and marketing effort. Evaluating the financials, the business was sound, but stagnant. So it looked like an opportunity.”
Please tell us what equipment Mid-South had when you entered the picture and what the company now has?
“In 2007 Mid-South had three Ipsen T4 internal quench furnaces, two small vacuum furnaces, an ion nitride furnace, a salt bath line, a drop bottom furnace, , a couple of induction heat treating machines, a hodgepodge of small temper furnaces, and a “WWII vintage” furnace used for stress relieving. All of the equipment had very antiquated controls and a few pieces of equipment were not even functional.
Due to a number of factors (high operating costs, poor utilization, and low contribution to top line revenue), the salt bath line, the induction machines and the drop bottom furnace were removed. This cleared floor space to make way for larger and more efficient equipment. Of course all of this took place over a period of a few years. This process has been a bit like “flying the airplane and rebuilding it in the air”. You have to keep running the business, serving your customers, paying the bills, plus reorganize and build the company at the same time. The logistics and planning of these steps is always challenging – somewhat like working a puzzle. And I made mistakes along the way. In fact some of my team jokes that we should “install all equipment on casters” so we can easily move it when “Clif has his next brainstorm.
Today we have three vacuum furnaces and the “original” ion nitride furnace. We have four batch IQ’s with companion tempers, washers, and charge cars, and an assortment of temper furnaces and shot blasting/cleaning equipment. And a couple of years ago we installed a black oxide coating line. Only three pieces of the “original equipment” survived the transformation process. Today Mid-South bears little resemblance to the Mid-South of 2007.”
At this point I have to congratulate you on 10 years in business which is truly a milestone. Has the path to date been pretty much what you thought? Are you further ahead at this point than you expected? Behind?
“Thanks Gord. It’s been an interesting “adventure” with some unexpected twists and turns. Shortly after buying the business in 2007, the “great recession” hit everyone. Like other industries, the heat treating industry took a pretty sharp dive. Fortunately Mid-South weathered the storm. In fact while the heat treating industry was down by 35-40% by some accounts, Mid-South remained “flat”. While not the growth track I was looking for, under the circumstances I counted it as a “win”.
Further ‘ahead or behind’ than expected – that’s a good question. My “achievement motivation factor” has always been off the charts. I have always relished the opportunity to “go, grow, build, and create” – whether it’s a personal or professional endeavor. So when I bought Mid-South my imagination went into “overdrive” creating in my mind’s eye the “Mid-South of the future”. So it’s safe to say with that perspective I am way behind where I would like to be. But realistically, we are probably about where one would expect given the nature of the business, the economy we’ve trudged through, and the resources I could bring to bear on the growth of Mid-South. Pleased with our progress to date – yes. Satisfied – probably never.”
Although you were not a heat treater when you acquired Mid South you have obviously been successful at it-so where did your knowledge come from? Can you point to let’s say ASM and say they taught you everything you know? Did you hire a great plant manager and let him make the decisions? Common sense? Or a combination of a number of sources?
“When I stepped into Mid-South, I realized I knew enough to be dangerous. So I sought out information, education, and help from anywhere and everywhere. I’ve been fortunate to meet a number of people in the industry who have been very helpful. I’ve found the folks in the industry to be very supportive and helpful to a newcomer.
Our Plant Manager, Steve Jefsen, has been key to our success and my “education”. He was at Mid-South when I entered the picture in 2007. Steve, an industry veteran with over 40 years of experience, has been an incredible teacher.
I’d say one of the important things for someone entering a new industry or field is to be willing to ask a lot of questions – even the simplest ones that demonstrate just how little you know. Put your pride and ego aside and ask the questions. It’s a lot cheaper to “look dumb” than it is to try to bluff you way through and do something that “is dumb”.
And in my career I have found it very interesting when entering a new industry or new role to often ask the question “why do you do that” or “why do you do it that way”. Then keep pressing for more information – ask “why” three or four more times. Often times the answer I get is “well, I really don’t know why we do it like that – that’s the way they showed me how to do it when I got here” – or “wow, nobody ever asked that question”. It goes to show that sometimes we do things out of habit – not because they are necessarily right or best. Oftentimes it turns out to be a learning experience for me as well as the person to whom I asked the question.”
Is running a commercial heat treat any different than running any other business?
“The essential elements of running any business, regardless of industry or sector, are the same – take care of your customers, take care of your employees, control your expenses, and manage proactively. So, no I don’t think running a commercial heat treating business is fundamentally different than running any other business.
That said, having worked in other industries (much of that being manufacturing), I have a perspective that gives me some understanding and insight into the challenges our customers face. I have been “in their shoes” so to speak. The heat treating step is usually near the end of their “supply chain”. So by the time we (commercial heat treaters) get involved our customers are usually under pressure – behind, late, or at least “under the gun”. So the key is to make sure we “get it right” (quality) and “get it done fast” (turnaround time). No real rocket science here – it just goes back to taking care of your customer.”
This question ties into the one above to some extent; are there any challenges you have found so far that are unique to our industry?
“Every business and industry has unique challenges. In my view, the unique challenge in the commercial heat treating business is in managing risk to people, plant, and equipment. The risk of fire and explosion is inherent to the nature of the process. The shop floor environment is more dangerous than average – so attention to worker safety is critically important. Also this risk of fire and explosion creates a much greater exposure to plant and equipment and the possibility of business interruption. So a very vigilant approach to safety and fire prevention and protection is critical.”
Recently you purchased what I believe is your first major new piece of equipment, an AFC-Holcroft batch IQ furnace. Has this ruined you for forever buying used again-kind of like flying first class and never wanting to return to economy?
“You are correct, we just purchased and installed a new AFC-Holcroft batch IQ, two new tempers, and endo generator. After years of buying and refurbishing, buying new equipment was a refreshing change. Buying “new” clearly has advantages, but it also comes with a premium price. So moving forward, we will continue to evaluate what makes the most sense for the particular set of circumstances – and that will involve considering a lot of factors.”
What is your focus going to be going forward in terms of technology? More batch IQ’s and vacuums or are you looking at different options?
“I think that will depend on what we see happening in the markets we serve. As we see opportunities develop, we’ll respond accordingly.”
What is your relationship with you competitors like or do you have one? I guess what I am asking is do you find commercial heat treaters willing to trade information and help out another heat treater?
“I have found commercial heat treaters very willing to help one another. Understandably, competitors in the same geographic markets are a bit more guarded in sharing information. But we have developed a few relationships with commercial heat treaters outside of our local market that have been very valuable.”
Can you share anything about future plans for Mid-South?
“We have spent the last ten years building and strengthening our organization, infrastructure, and capacity. So I’d say we are poised for growth. They say an overnight success take about 20 years, so we are now ten years into the journey. We’ll see where the next ten years takes us.”
Where do you see the industry going in 5 years and 20 years?
“I think the manufacturing sector that the thermal processing industry serves holds potential. But I think it will be important to pay close attention to new pockets of opportunity and technology. And be prepared to act on those opportunities. This will be a time to “prepare to be prepared”.
Thanks for the time Clif and we will do this again in 10 years to see how your opinions have changed.