Member Profile – Butler Gas Products Company

Regional gas manufacturer and distributor marks 65 and aims for 100.

Butler Gas Products has in-house microbulk capabilities for nitrogen, argon and oxygen.

Not only are gases in the blood of the Butler family, they’re at the core of Butler Gas Products Company. In the 1930s, John T. Butler, grandfather of current Butler Gas Products president and CEO Jack Butler, had finished school at Carnegie Tech and was fascinated with technology and making things more efficient. He and his friend Leonard Pool purchased several patents for mixing gases that were up for sale at an auction. The men knew they were on to something. Pool went off to found Air Products, and Butler went to work for National Cylinder Gas.

Analyzing gas mixtures in the lab has improved accuracy, turnaround time and efficiency.

John T. Butler’s two sons followed in their father’s footsteps and opened a distributorship in Reading, Pennsylvania, where they sold welding supplies and cylinder gases. A few years later, in 1948, one of the brothers, Jack Butler Sr., moved to Pittsburgh with his new bride and opened Butler Gas Products. Jack Sr. took care of sales and distribution, Mildred managed the books. They worked hard to grow the company and by 1972 were able to acquire the Pittsburgh business of National Cylinder Gas.

Unexpected Succession

Like many children of this industry, Jack Butler grew up among cylinders. He thought he would be a lawyer when he went to Boston University, but decided to study sociology and minor in business. A year before his graduation, Jack Sr. announced to the family that he was dying of cancer and within a week, he and his son figured out a way for Jack Jr. to take over the business. The first step was learning how to sell. During his senior year, Jack Jr. sold first aid kits to colleges in Boston, which he claims he was not very successful at. When he returned home in 1975, his father said to him, “Now you have products, you have trucks, and you have people. Go and do something.” Jack took his father’s directive to heart, and began to learn the intricacies of the products he was selling and the management of the company. He kept pace with his father and learned all he could from him, capturing his vision and his dream to manufacture gases.

Jack’s Sr.’s legacy to his family was that of a pioneering spirit, very similar to the pioneering entrepreneurship of his own father. Jack Sr. taught his son that the business was capable of surviving the various challenges it would encounter, and that his family could grow the company and make it profitable. Jack Jr. was 24 years old when he became president of the company after his father passed away.

Market Shift Demands Refocus

Pittsburgh, one of the nation’s greatest industrial cities, was world renowned for its steel, aluminum, glass, iron and railroad equipment production. Industrialists Andrew Carnegie and Andrew Mellon drove its progress. By the mid-1970s, Butler Gas Products (BGP) was a profitable company selling welding supplies and industrial gases. Cylinders were filled at the nearby National Cylinder Gas plant.

When the steel industry began to collapse in the late 1970s and early 1980s, with it went many of the businesses supporting it. The Butlers realized that a change was needed and with 85 percent of company sales devoted to welding supplies, a market shift would be critical to ensure survival.

Butler Gas Products President & CEO Jack Butler

Jack Butler looks back on that market shift when the steel industry changed so dramatically and Pittsburgh changed from a manufacturing to service economy. “We developed what we called our ‘100 Year Plan of Survival’ and we said that at any price, we are going to make it, because that’s what we do. The best way to survive was to follow the gas business, and we positioned ourselves as a regional gas manufacturer and distributor.” BGP pursued the gas business aggressively and began wholesaling gases to smaller distributors, especially acetylene manufactured on-site, and dry ice. That refocus proved significant. Today gas sales constitute 88 percent of the company’s total business.

Pittsburgh has the distinction of being known as the “poster child for managing industrial transition.” It’s a city that has revitalized its economy and successfully shifted from its Rust Belt past. Primary industries are high tech, such as robotics, nuclear engineering and biomedical technology. Healthcare is very strong. The University of Pittsburgh and Carnegie Mellon University are national leaders in R&D expenditures. In 2013, Pittsburgh was ranked as “America’s Smartest City” out of a survey of the top 100 metropolitan areas.

Butler Gas Products was a player in this critical shift. Research labs, home healthcare companies and small environmental testing labs became an expanding market. With specialty gases in demand by new companies filling the void left by the steel mills, BGP opened a specialty gas lab to mix and sell gases to these new customers. It was a natural progression for BGP to integrate upstream, wholesaling gases to smaller distributors.

Gas sales are diversified into six markets, essentially protecting the company from the challenges of serving just one. These markets include: fabrication, construction, specialty gas, medical, retail, and wholesale and processed gas. All forms of packaged gas, including microbulk and bulk, are available. Nitrogen, methane, argon, acetylene and hydrogen are manufactured, mixed and repackaged on-site. Pure gases up to grade 5/UHP are also available.

Blending Technology and Expertise

Butler Gas Products opened its first specialty gas lab in 1980 after investing in chromatographs. Upgrades made in the 1990s brought the ability to do simple cryogenic mixtures. In 2013, the old lab was completely renovated and expanded to an 8,000 sq. ft. automated specialty gas lab. Designed and built by Weldcoa, BGP’s in-house filling capabilities are fine-tuned for 3500, 4500 and 6000 psi in argon, nitrogen and helium. Specialty mixtures are gravimetrically produced from percent down to ppm concentrations, sourced in-house from up to ten gases.

Being able to deliver when the customer requires the product is a critical demand of the spec gas market. Prior to the automated plant, BGP had to rely on a supplier for some spec gases, pushing lead times out four to six weeks. Now with the ability to fill certain types of mixes in-house, lead times have been reduced to next-day delivery.

Jack Butler acknowledges that the automation has made quite a difference, even for this long-time gas manufacturer. “It is taking our business to the next level,” he says. “Hydrogen, argon, helium and nitrogen are piped into the autocyl, and we can add cylinders of methane and other gases that we don’t have in bulk form. The computer knows where all these gases are, and we just tell the computer to mix this this gas with this gas, and it’s done. The form has been created by Weldcoa and their technical people.”

Investment + Training = Growth

Family is important to the Butlers. Jack’s sisters, Barbara Glessner and Debi Butler, began working for the business in the 1980s. Debi is executive vice president of the company and leads customer satisfaction efforts. Her son, Alex Stentz, joined the company in 2011 after earning a degree in entrepreneurship and management information systems. Alex currently serves as manager of the Pittsburgh store and oversees the software program for the trucking fleet.

Barbara Glessner came to the company with a background in education. She set to work developing training programs for customers and employees and is the brains behind “Butler Gas University.” Now retired, Barbara mentored many young individuals on their way up, including Jack’s daughter, Abydee Butler.

Like his father did for him, Abydee Butler was by her father’s side growing up among the cylinders. As a young child, she attended GAWDA meetings with her parents, and paid attention. She is passionate about the gases and welding industry and never wanted to do anything else. As vice president of Butler Gas Products, she is responsible for marketing, hiring and running Butler Gas University. “I like being able to improve things,” she says, and is on a mission to create a better value perception of the industry. “Industrial doesn’t have to mean hideous,” she says.

Sustaining the third-generation family business is important to each member and they work hard at it with regularly scheduled family meetings and an annual retreat to develop a strategic plan. Says Jack Butler, “We start with a blank sheet of paper because we believe it changes every year. Sometimes it doesn’t change a lot, but we do the analysis just to keep us looking around the corner.”

The Butlers are regulars at the Family Enterprise Center, part of the Institute for Entrepreneurial Excellence at the University of Pittsburgh. Programs are held for local family businesses and cover a wide range of topics. Meeting with other family businesses has helped the Butlers navigate the tricky issues such businesses can face. From this group of other family businesses, BGP has created a five-person advisory board that meets twice a year for consult and advice.

This mission to get better and do better carries through the entire organization. Butler Gas University is a quarterly training program attended by every BGP employee. Topics covered include customer service, communication, work/life balance and general business education. Employees learn how to read a P&L statement and understand net profit. Abydee Butler, who oversees the program says, “We train people how to make money.”

Making money is the responsibility of everyone in the company, and bonuses are offered when goals are met. Says Jack Butler, “People aren’t fond of change, but if they are paid a bonus every month for profit, they don’t mind trying to become more profitable.”

Three years ago, the company set out to learn the method behind continuous improvement and lean manufacturing. Jack Butler explains, “Our goal is to tie together our suppliers, our customers and Butler Gas Products where all are more efficient because the whole link is more efficient. CI is really about what customers want and need. They are the driving force.”

Heather Ferrand, vice president of specialty gas, and Ed Lukee, general manager of specialty gas, oversee the specialty gas division.

Inventory is one example of CI efforts. Customers don’t want to hold inventory, and they don’t want to search for it. Says Jack Butler, “If our suppliers have inventory, we have inventory at our main location, and our branches have inventory, there is a cost across three different locations. We try to streamline so we can get the inventory to our customers without everybody holding and touching it; that might mean direct shipment from our supplier.” Inventory is now standardized and centralized across store locations so there are no longer three or four layers of inventory to add to the cost.

An improvement in cylinder tracking is another example. An audit of a customer’s process analyzes how many cylinders the customer should have. The customer is shown how to run their business with fewer cylinders, resulting in a lowered rental payment and providing a clear value-add.

Beyond 100
As Butler Gas Products Company marks its 65th year in business in 2013, the 100 Year Plan of Survival is always in focus. Having survived several deep challenges—the early death of the founder, a complete shift in markets—the Butler family has found the secret ingredients to success. They continue to invest in their early dream of selling gases; they recognize that the customer and only the customer is the reason to improve; they continue to learn and make changes as needed; they make sure their relationships with suppliers and customers remain strong; and they are passionate about what they do. Says Jack Butler, “We’re helping our suppliers and customers be safer, make more money, and serve their customers. It’s a noble thing to do.”

There is no doubt that Butler Gas Products will hit that 100-year mark as a strong, successful, independent gas manufacturer and distributor. Why? Because the 100 Year Plan contains only one sentence: “At any price, we are going to make it, because that’s what we do.” And they do it very well.