Issue vol9 Iss3
Customer Service and quality products have led BG Products to consistent growth.
In the last four years, BG Products has more than doubled its workforce from 170 employees to 350 employees. Director of Operations Jeremy Henry attributes that growth to the quality of its products and its customer service.
BG Products, founded in 1971, manufactures aftermarket auto products aimed at extending the life of an automobile. Those include battery cleaner, brake fluid, cleaners for air conditioning system, synthetic oils, fuel system cleaners, power steering fluid conditioner, transmission fluid and many others.
BG Products sells to a network of distributors who, in turn, sell to dealerships, independent shops and franchises. The company has manufacturing plants in Eldorado and Wichita with some overlap of services. “We live in Kansas and you never know if a tornado is going to fly through,” Henry says.
Three things set BG products apart from its competition, Henry says.
* The chemistry of their products. “There are fuel additives you can get [retail] that will be mineral spirits and food coloring,” Henry says. “Our quality and chemistry is better than the competition.”
* The attention BG Products pays to its customers’ needs. If a client needs two products packaged together or a different size container, BG Products will take care of it. The company goes so far as to bring in salesforce from its distributors for training on how to sell BG Products. “We are not just trying to push a product out the door,” Henry says. “We are looking for ways to help our customers connect with the end-customers.”
* A people-oriented culture. That includes a monthly KPI meeting, a chaplain on staff, team building activities and employee events throughout the year such as golf outings, picnics and a Christmas party.
Bigger is Better
With growth has come a need for more space. In November 2018 the company began a construction project to quadruple the size of its 50,000-square foot distribution center to 200,000-square feet. The expansion is scheduled for completion in November, Henry says.
“We historically store a lot of inventory for our customers,” Henry says. “It’s hard to fulfill orders when your inventory is stored at three locations in two cities.”
The expanded warehouse will revamp the entire way company does business, Henry says. “It will allow BG Products to consolidate inventory from three locations into one, give the company room to grow and allow it to be more efficient,” he says.
The new distribution center will be double the height. The company will install a taller racking system and buy electric forklifts – to replace propane-powered forklifts – that can reach 25 to 30 feet up.
More than a Number
The biggest challenge BG Products faces is recruiting and retaining quality employees. The Wichita-metropolitan area has a population of about 650,000 and many of those people are already employed in manufacturing aircraft or other products. “The lower our unemployment rates become, the more difficult it is to get people,” Henry says.
BG Products analyzes wages and benefits to remain competitive. The company offers a clear program for employees to learn and advance. For managers and supervisors, BG Products also offers a boot camp in such skills as non-verbal communication and how to have tough conversations with employees.
With rapid growth come challenges. Henry says the biggest challenge is retaining the company culture – which he describes as being “people oriented.”
“When you increase your headcount quickly, everyone comes into the company with baggage or history,” Henry says. To combat that, Henry holds team building exercises and an additional orientation for new employees in the Operations group where he explains the company culture. “My hope in doing that is that it preserves some of the culture we are fighting to keep,” he says. “Very easily we could become a place where people are just numbers.”
One of the company’s strengths is its ability to change. When auto dealerships were closing down during the Great Recession, for example, BG Products focused more on producing and selling products for older cars and company fleets. In 2018, BG Products started a labeling operation.
BG Products does “a ton” of research and development, Henry says. It has a Research and Development Laboratory where it develops or improves products and an Innovation Center where it tests those products. As a result, its product lines are always evolving. “I can’t remember a time when we weren’t trying to improve something we already did well,” Henry says, adding that much of that effort is based on feedback from customers.
BG Products uses lean manufacturing techniques such as upgrades to its equipment and improving its processes on the manufacturing floor. “We want to implement lean wherever we can if it fits our business model and culture,” Henry says. “If not, all it becomes is an irritant.”
For example, lean principles suggest the company should hold less inventory. “But our business model says I have a lot of distributors [customers] who use us as a warehouse,” Henry explains.
This year Henry bought in directors from other parts of the company and asked them to explain their divisions so Operations employees gain a better sense of the overall company.
“We will improve where we can and streamline where we can,” Henry says. “I see us poised for growth. We are always looking for opportunities where we can touch the market.”