MITCHELL, Neb.—For companies like McKiney Manufacturing and Sales, one piece of equipment can make all the difference in the world.
In this case, that piece of equipment is a water jet cutter that is helping the Mitchell-based company manufacture products it previously could not complete. It cost owners Roger and Julie McKiney $200,000—but the return on their investment was virtually immediate. Even in the shadow of a pandemic, it has the company’s owners looking at continued and regular growth in the months ahead.
McKiney Manufacturing and Sales traditionally had fabricated metal parts while providing tool and die machine shop services to support the machinery that manufactures hydraulic hoses.
With nine employees, McKiney was reliant for many years on that hydraulic hose manufacturing business.
When the McKineys first purchased the company in 2015, they endured a couple of tough years as the price of a barrel of oil fell from more than $100 to less than $30. Roger admits that for a few months in 2015-16, he and Julie were doing whatever they could to keep the doors open.
“We knew we had to diversify,” Roger said. “There was no other option because we didn’t know how much longer we would be able to survive with oil prices (and demand for its products) so low.”
By 2017, McKiney had started working with a new large client in the LP and natural gas market that produces generators and exhaust systems. That same client was in need of foam insulation work which necessitated the water jet purchase.
“The reality is, we had wanted that type of equipment for a couple of years but this was the motivation we needed to make the investment,” Roger said. “It’s an incredible tool that cuts and shapes metal, plastic, glass, granite and really any type of material we need.”
The new tool also is capable of bending round, rectangular or square tubing in sizes anywhere from a quarter-inch to 4-inch diameters. It has allowed McKiney to expand its specialty in custom-designed exhaust systems for GAS/LP generators for both original equipment manufacturer and aftermarket applications.
Parts are being manufactured for roll-over protection on vehicles, heavy equipment grill guards, bicycle racks and other specialized needs. With the water jet, McKiney also can manufacture roll bars, cattle panels and anything that needs to be rolled into a specific shape. For example, Roger and his team downloaded the logo from the internet and cut it out, making it into an oak wood display.
The water jet cutter was a “risky” purchase according to Roger, but he also had a couple of new purchase orders on the day that the water jet was delivered to the company’s headquarters. Given how difficult it is for a company of McKiney’s size to compete in machining and fabrication work, it has provided a road map for growth.
“There’s little doubt it is tough for us to compete on the machining side of the business, especially when it comes to price,” he said.
This tube bending system allows McKiney to custom-make tubing applications for a wide variety of uses.
For example, it is being used to cut rubber pieces for five different types of kits for generators, Roger said.
The water jet is capable of cutting almost any rubber component as long as it fits on McKiney’s 5x10 foot cutting table. To help with this, it is buying 25-foot rolls of quarter-inch, 3/8-inch and half-inch rubber. This could help McKiney expand into the custom gasket market in the near future.
The challenge now is to market these new capabilities to a growing market, albeit in a competitive region, Roger said. Mitchell is located about 120 miles from Fort Collins and within a three-hour drive of Denver—two fast-growing, high-tech areas. Roger and Julie want to find new business within these markets because many competitors with water jets have lead times of 8-12 weeks, which McKiney has the manpower to easily beat. It also can make prototypes of a wide range of products in small production runs in fast turnaround time.
In the first year that McKiney used the water jet, revenues doubled. That came with virtually no strategic marketing and sales efforts. Since then, McKiney has invested in a new website and digital marketing efforts to try to attract new leads, but more marketing efforts will be needed to support individual sales efforts.
“A real benefit for us is that we don’t need to force customers into high-volume tooling jobs,” Roger said. “We just need to find the right way to promote this to prospects to support (a traditional sales effort).”
Roger said he wants the company’s new product offerings to be versatile. McKiney continues to produce custom cases and kits for military customers, and clients in other industries as well. It can also make components with very precision machines, Roger added.
Like all companies, McKiney is faced with potentially significant challenges because of the COVID-19 pandemic, but it has secured a large product that should keep the company busy deep into the summer. Roger also is encouraged that President Trump seems to be committed to increasing oil and gas production in the U.S., which likely will keep demand for new projects high.
There is little turnover among the company’s staff, and internships have been commonplace in recent years based on a strong tooling program at nearby Eastern Wyoming College and with a junior college in Scott’s Bluff, Neb. Roger added he does see the need to hire additional staff in the years ahead and wants to keep the McKiney name in front of new employee prospects.
Other investments have been made as well. McKiney purchased an additional 10,000 square feet of storage and warehouse space in January to add to its 12,000-sq.-ft. headquarters in Mitchell. As long as he can emphasize customer service, custom work and find an entry point into new business, Roger said McKiney has a bright future.
“We’re not afraid to make investments and the Front Range region from here to Colorado is growing like crazy,” he said. “If we’re able to further diversify our client base and add a handful of new accounts, we’ll have long-term stability.”