Member Spotlight: Pioneer Industrial Systems
Automation the ticket to thrive, says Pioneer Industrial Systems COO
It was early March, and COVID-19 — still being called simply “the coronavirus” by most people — was a cloud on a far horizon. Yet Todd Hendricks Jr., second-generation owner of Pioneer Industrial Systems in Alvordton, Ohio, was already thinking of long-term effects in what would ultimately become a world-changing pandemic.
“It’s going to create a pent-up demand, as companies that are being cautious now about big-ticket items decide to purchase,” he says. “In the past, situations like this have created a spike in demand.”
Pioneer Industrial Systems might be particularly well placed to deal with the pandemic, since their design, construction and support of industrial automation is by definition about reducing dirt and danger from production lines.
Now a global leader in equipment specifically geared to the tire industry, the company was founded by Todd Hendricks Sr., who earned his mechanical engineering degree from The University of Toledo in 1988. As his son relates, “After graduation he worked for a custom machine builder in Williams County. Dad worked as manager, then in sales and quoting. He was company president in 1998 when the owners said they didn’t want to do engineering; rather, they wanted to build from other people’s designs.
“The concept engineering was what Dad loved to do, so he told them, ‘Well, I’ll start a company to do the engineering and you guys build.’ That’s what he did, working out of his house. He subcontracted with other engineers, getting bigger and bigger contracts, until customers began asking why they had to go to two places: one for engineering, one for building machines. Typically in the industry, you design it, you build it.”
That customer need pushed Hendricks Sr. to consider building equipment — and a subsequent contract for building four large-scale machines proved to be the springboard for becoming the company Pioneer Industrial Systems is today.
Specializing in serving the tire industry was another example of evolution through customer need. “We had done several machines for the tire industry by partnering with other companies, and found that we were really good at it. Customers liked our product, and liked what he could do for them,” Todd Jr. says.
“Tire manufacturing was an older industry, very manually based, very physical, dirty and dangerous, with a lot of injuries. We saw it as prime opportunity it for automation. So in 2012 we really focused in on it, looking for new opportunities to support our customers. In 2018 we added people to our sales team and grew.”
Grow they did, as the companies they served grew with the help of machines from Pioneer Industrial Systems. The perceived link between automation and layoffs didn’t prove to be the case, either, Hendricks says. “What we heard over and over [from company owners] was that it’s a manual process, it’s hard to find labor, it’s dangerous, people are getting hurt. We saw that if we could automate those positions, they could move those people elsewhere — which is what typically happens.
“We’ll either automate an old piece of machinery to reduce operator error or increase efficiency, or automate a manual process — and those people who were doing it are moved to another part of plant.”
Other industries have taken note, he says. “It’s transformative. Even small manufacturers have automated in the last couple years, something I would never have guessed earlier. Their concern is that it’s hard to hire people and even harder to hire them for physically taxing, dusty, dangerous jobs that take a toll on human beings. We’ve found that by automating those jobs, we can help small business owners get a quick return on their investment.”
Todd Jr., who’s been the company’s Chief Operations Officer since 2012, knows that economics is often the deciding factor in automation — and that it’s a win-win equation: “I can’t remember a time when you put a piece of machinery in and they walk people out the door. Typically, we help companies automate the dangerous stuff, then they put their people into more value-added positions. They’ve doubled the output for both machines and employees.
“Many good things happen when a company automates. It allows them to compete internationally as well, against places where the standard of living isn’t as high, but now they can compete with workers making $3 or $4 an hour.”
Another win-win for Pioneer has been its affiliation with the UT Family Business Center, where as well as a member he’s a vice chair on the advisory board: “They’ve really been a resource, connecting me with people in similar situations. I can’t count the times when I’ve been struggling with something and make a quick call to a center member or a friend I made through the center.”
He says that during the transition of taking the company reins, “handling the details of the day-to-day operations and let my dad focus on sales,” was challenging at first.
“This company was my Dad’s baby, he was always the one in control, making the decisions. It was different for both of us, and we had conflicts at first. But there was a great Family Business Center forum run by Lisa Stewart, who talked about succession planning. She brought the psychology side into it, not just the tactical nuts and bolts, and it was really impactful to me, and shaped a ton of conversations between [my father and me].
“After we approached it like that — that I don’t know everything, dad still cares about the company — the transition was pretty seamless.”
As Todd Jr. notes, father and son still carpool into work from Toledo every day, giving them time to talk. “But I’m forever grateful to the center for that network of people who can relate to what you’re going through, because small family business is hard, let’s face it.”
In the meantime, he’s looking ahead to when COVID-19 is a memory and a bump in the economic road. “We’re different in that we don’t produce a product, we produce a machine that allows other companies to produce their products.
As we go forward,” he says with confidence, “companies that do invest in automation will have advantage over companies that don’t.”
