How is it that a Canadian manufacturer is increasing revenues by an average 40 per cent for each of the past five years when all its competitors have only single digit growth? BW Technologies Ltd. of Calgary, Alta., has racked up an impressive 52 per cent growth with the year ended this past April. Their success is due to starting off with an exceptional product backed by a multi-prong approach to streamline front and back office operations that in turn ensure a quick response to customers.
It all began when the current president and CEO Cody Slater saw a drab, bulky, expensive and hard to read device used for detecting poisonous gas in oilfield operations. Though just 24 and seemingly on his way to be an astrophysicist, his hobby of fixing TVs and tinkering with electronics gave him the insight to come up with a better alternative to the existing device. He created the Rig Rat, the first solar-powered, wireless gas detection system for remotely located drilling rigs. Soon after, Slater founded BW Technologies in 1987 and the company has since been designing and manufacturing a full range of gas detection equipment.
Earlier this fall, Slater and Barry Moore, an industrial designer and the company’s vice president of product development, received the Westaim Manning Innovation Award for revolutionizing the gas-monitoring industry with their GasAlert line of instruments.
BW today makes and sells more than 15 instruments for detecting poisonous and explosive gases to customers in industrial and commercial environments around the world. The company has offices in Europe and the U.S., plus 620 worldwide distributor locations for industries such as pulp and paper, oil and gas, fire rescue, municipalities and mining. It sells about 4,000 units per month of its most popular zero-maintenance product, the portable GasAlertClip for
monitoring poisonous hydrogen sulphide or carbon monoxide. They sell portables, fixed and standalone products, with the portable units representing 80 per cent of their sales. They translate their manuals into nine different languages.
Success never rides on product alone for long. As can be expected, the competition soon followed suit with their own versions of the disposable gas monitor. But where BW maintains the edge is through customer support by streamlining operations from product design through to manufacturing and product delivery. Many of these enhancements have occurred this year.
For example, full manufacturing has been brought in-house. BW invested $500,000 in new surface mount technology to produce its own printed circuit boards, reducing manufacturing costs and improving the company’s ability to keep up to global demand for its products. Last year, more than that was paid to outside Contract Electronic Manufacturers with estimates to rise to $740,000 for this year and more than $900,000 for the year following. BW management expects that by vertically integrating the printed circuit board process with the new MYDATA and EKRA automated equipment, they will comfortably recuperate the costs within one calendar year, says Kevin Meyers, vice-president of operations.
In addition, the company will be able to provide BW’s research and development department with prototype boards, dropping the current outsource time of four weeks to 48 hours. This is a fully automatic process where BW will be able to produce panels of printed circuit board assemblies every five to ten minutes and run the machinery for about five hours each day. BW will be able to produce 250 panels every week with the capability of producing up to 800 in the future.
Bringing that capability in-house means BW can offer customers shorter lead times. “We’re better able to react quickly to our large customers’ demands,” says Meyers. “If we get a 400-piece GasAlertClip order, we can turn it around in very short order.”
Meyers reports that outsourcing lead times were one week to three weeks. Now, with their in-house capabilities, they’ve cut that down to 24 hours to do circuit boards and seven to 10 days to complete the units.
Further, the in-house capabilities boosted their R&D strength. “When we have a new product (to be prototyped), we had to hand populate all the boards or send them to an outside vendor,” Meyers adds. “That took three to four weeks as opposed to 48 hours for prototyping.
Meyers says they spent $1.9 million per year in product development for each of the past two years. That includes designing, engineering and prototyping.
Not surprisingly, the company has equipped its engineering department with computer aided design/computer aided manufacturing (CAD/CAM) programs. It uses Dassault Syst