May 26, 2000 Trend Setters Before the Tide

Volume 3 | Issue 3

Identifying and manufacturing solutions before the market even knows problems exist distinguishes Little Giant, the largest pump supplier.

They are at work in your basement, helping your furnace work efficiently and keeping your basement dry. They remove water from your swimming pool. They are at work in automakers’ factories and keep your community clean by processing waste. They are the products from the Little Giant Pump Company of Oklahoma City, Okla.

“For years people knew Little Giant as the fountain pump manufacturer, because we do serve the retail industry as well,” says Lynn McVay, vice president of sales and marketing. “That is the smallest portion of our business, yet that is what people know us for. So we are continuing to make sure that people understand that even though the name Little Giant implies a small pump that does big jobs, we also make a lot of large pumps. On the commercial and industrial side of our business, we emphasize the ‘Giant’ part of our name.”

The Little Giant That Could
Like many American companies, Little Giant was born of a solution to a problem recognized by an enterprising young man. The year was 1926, when air-conditioning units were just gaining in popularity. These units used pumps to pump water into a screen for evaporative cooling. Plumber R.M. “Doc” Wolfe noticed that every time he fixed one of the pumps, it would soon break down again, so he designed a better pump. He and inventor Harry Goodman created the Little Giant Vaporizer Pump for use in air conditioners. They made the first units by hand in 1936, obtaining a patent for their invention in 1938.

They brought their new pump to the East Coast, where they felt it could be manufactured and would thrive because of the dense population. “But nobody in the East was interested,” says McVay. “They returned to Oklahoma City and went ahead and manufactured the pumps anyway, and for many years it was a struggling upstart company.” And, like the little engine who thought it could, Little Giant proved it could, boasting about two dozen patents and double-digit growth every year since 1941, the year of the company’s incorporation. Since then, the company has manufactured sump pumps, chemical magnetic drive pumps, effluent and sewage pumps, a complete line of water-gardening pumps and pumps used in basement drainage systems.

Recession-proof Company
“We build quality pumps and we ship better than anyone we compete against,” says McVay. “We ship our products in less than 48 hours and that can be a $500 order or a $5 million order. One of our greatest strengths is that we serve multiple global industries including plumbing, HVAC, hardware chain stores, home improvement centers, mass retailers such as Wal-Mart, the pool industry and OEMs.” An example of OEMs using Little Giant’s products is tile saw manufacturers and automotive shops.

“Our pumps recirculate the liquid used by their tools,” explains McVay. “Automotive shops throughout the world use our pumps to wash parts in large tubs. Having so many applications is our greatest strength, and sometimes we think it’s our greatest weakness because you get spread thin. But it also makes us recession-proof because if one area is up, another might be down and it won’t kill us.”

Helping the Building Boom
Little Giant is intrinsically linked to the building boom our nation has long enjoyed. Over the past decade, federal matching funds allocated for building treatment plants have been cut off for small communities. “Smaller communities exploding overnight are looking for alternative ways to treat sewage without actually having to build treatment plants,” says McVay. “As suburbia grows, there must be these new technologies to handle the needs of these communities.” Enter Little Giant.

Although one of Little Giant’s strongest markets is its condensate pump used in home furnaces to pump condensate to a remote drain or out a basement window, “the most exciting part of our business is our recent entry into the wastewater business,” says McVay. Little Giant is beginning to offer this segment larger sewage and wastewater pumps ranging from two to 10 horsepower. “Expanding our line into the larger pumps has become a strategic focus for us.” Suburbia continues to grow and developers and builders cannot always hook up to the city sewer. This means that either more lift stations have to be built, or more on-site treatment systems must be established.

The fastest-growing segment of the wastewater pump industry includes on-site treatment systems, which offer cost-effective options for developers and builders. “These systems allow an individual home or a cluster of homes to treat their waste right on the premises,” explains McVay. Collection chambers are buried in the backyard, and Little Giant pumps will pump out the gray water. Through either natural processes or by filtering or inducing with chemicals, the water is treated and then pumped to a leach field, or dispersed by sprinklers or drip irrigation.

Some developers will choose grinder systems. “Say you plan to build 10 or 50 homes all around a lake, and the community sewage treatment plant is quite a distance away,” says McVay. Installed systems at each home will pump the sewage to a collection center or a lift station, which in turn will pump it again using bigger pumps to the sewer main which will then take it to the municipal treatment plant.

Manufacturing Quality into Each Component
“What we do differently from other companies is test each component as it comes into our factory, and we test it again and again in multiple stages along the manufacturing line,” explains McVay. “We send out in excess of 31/2 million pumps annually, and each one of our products is again tested before it leaves our door.” With such a rigorous testing regime, it is no wonder that Little Giant’s warranty rate is less than half of 1 percent. “We were one of the first pump companies to receive ISO 9001 certification, and we made it through the certification process in one fell swoop. A lot of companies have to try several times,” says McVay.

Little Giant maintains strong alliances with two formidable leaders in the global plumbing and HVAC industrial distribution industries: W.W. Grainger and Ferguson Enterprises, Inc. “I think both of these companies represent our future. We work closely with them and we are looking at new product development with them,” says McVay.

Forecasting Problems: Manufacturing Solutions
A real talent for survival in today’s unpredictable economy is the ability to foresee problems way before the market even thinks about them, let alone identifies them. “We want to continue to bring solutions to the market before the market even knows the problem is there,” says McVay. “That is a big change for us because when we were a small upstart company, we would look at a market and tell ourselves that they are making a lot of this type of product, so we should, too. Now we have made the transition to a market leader. For instance, over the past two years we have put together a very talented group of young product engineers to work on getting product to the market before the market even knows it needs it.”

What is the secret to this crystal ball? “We are listening to the customer and we are conducting focus groups,” explains McVay. “We have the customer sitting in front of us critiquing what we do and what our competition does, and then we take that information and ask ourselves if we can solve these problems.”

So the Little Giant, armed with a plan and lots of determination, grew to the innovative world leader it is today, with eight buildings in Oklahoma City comprising over 400,000 square feet. “This includes a 200,000-square-foot distribution center we built about three years ago, to ensure that we continue shipping within 48 hours,” says McVay.

“Our Employees Are Our No. 1 Asset”
The company’s 550 employees helped Little Giant achieve in excess of $110 million in revenues for 1999. “We have a good mix of tenured employees that have been with us 25 to 35 years, yet we also have younger folks in their 20s and 30s who are learning from these people,” explains McVay. “The mix and the balance gives us a lot of strength. It’s our people who are our No. 1 asset.”

Little Giant currently has several projects in development to produce more efficient and effective ways to address sump pump problems. “We plan to continue our record of double-digit growth,” says McVay. “We want to continue to be No. 1 or No. 2 in each of the markets we serve. Now, I can’t claim that we are No. 1 or No. 2 in all of those markets, but we are making major strides to make sure that we are positioned properly to achieve that goal. We will continue to be a leader in the markets we serve, but in a few of them we are going to leapfrog our competition,” concludes McVay.

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