To stay ahead in the wastewater technology business these days, manufacturers have to offer more than just pumps. Simon Charlesworth, Sales and Marketing Manager of pump, aerator, blower and mixer manufacturer ABS, highlights the major technological challenges faced by one company as it strives to combine value for money and energy efficiency.
The world’s population has tripled in the last century, but its use of water has increased by a factor of six. This means that while our planet today has the same amount of water as it did a million years ago, there are now six billion people competing for that asset.
Demand for energy is also increasing dramatically. Although all suppliers of equipment are constantly looking to improve methods of manufacture with a view to cost saving, energy is the main technical challenge. Energy prices are increasing steadily – a trend that is not likely to change. This puts tremendous pressure on utility companies who need to ensure value for money to their customers.
Naturally, continual price increases are not popular with the consumer. They are constantly looking for ways of saving energy, and with the high population of pumps and aeration equipment within utilities and other manufacturing sectors, there are good opportunities for savings through dialogue with manufacturers of these products.
Finite natural resources, coupled with increasing energy costs have a dual impact on water utilities throughout the world. Over the past several years ABS has witnessed significant changes in the way that users of pumps and pumping systems view their investment in equipment.
Gone are the days when the lowest cost option was first choice with a contractor or customer. The whole industry suffered problems in the 1980s with contractors bidding too low for business. This squeezed suppliers’ margins to the bone. Many smaller firms and even some large contractors went out of business, while the utilities were left with equipment that was neither reliable nor fit for purpose.
Our experience is that the entire supply chain is becoming more focused on value, rather than price. Least whole life cost is now an established principle among all framework agreements and customers are looking to further improve their return on investment through a number of different ownership models.
So the company took the decision to offer complete solutions for wastewater applications, integrated with services and extensive process knowledge, in the belief that modern utilities and businesses with water interests are looking for a service provider who can provide them a value added solution.
Value added and long term
Based on the experience gained in countries across Europe, and mindful of the pressures placed on water utilities by the continuous rise in energy, personnel and asset costs, the ABS value added solution is a complete package tailored to the customer's requirement.
Again energy remains at the front of this ‘Spend to Save’ offering. Spend more on the capital cost of the product and get more efficiency and technically suitable products. The energy saving is many times more than the initial outlay. With pumps used in pumping stations, only around three per cent of the total whole life cost is down to the cost of the goods. 53 per cent is actually due to energy consumption and another 17 per cent to efficiency fall-off if the recommended maintenance is not performed on a product.
Utilities are looking for a long-term investment partner who can share ideas, provide a year-on-year cost reduction initiative and give the utility core customer status. They are prepared to spend more in capital cost if, over the design life, the offer is more cost effective. The focus is now on the whole life cost: it's no longer about just looking at the capital expenditure, it's now a lifecycle approach.
Of course, this model is not limited purely to water utilities. Reductions in energy consumption, coupled with long term system reliability are critically important to all businesses, particularly construction and manufacturing.
With major moves across Europe to improve the energy efficiency of buildings, ABS is finding that the least whole life cost concept is now migrating to the building site. Pumps play a big part both in the construction and occupation of factories and homes. The value added concept is now being adopted by the designers, developers and construction companies who specify and install pumps and systems.
Moving ahead as a solutions provider
In 2005 ABS group underwent a global re-structuring to move away from being solely a pump orientated business. We wanted to refocus as a solution provider, taking all of our products to the market.
This was a big cultural change to make internally, but one that has proved very successful. Even though the restructure is a long-term plan, global benefits have already started with positive growth in sales and operating earnings.
The restructure very much focused internally on re-establishing the company's three core values known as the three Cs. The first is challengers – offering new ways of thinking in order to stimulate customer ideas and keep us ahead of the competition when suppliers are being selected.
The second C is for cleaning water and this relates to the product. Not only does this mean a good technical solution, but also the benefits that can be gained from buying all wastewater requirements from one manufacturer.
And thirdly – caring. This relates to the relationship with the customer. All sales companies review and improve the whole sales process from start to finish, ensuring that customers are given the best possible service.
From now on we will present our complete offering under the common brand ABS, and approach the market as one organisation. Customers benefit by obtaining complete process solutions and knowledge from one corporation, when companies such as the recently acquired Sparrow Quality Water Solutions are fully integrated into the ABS organisation.
Additionally, the new regional worldwide sales organisation set up last year has had positive effects in getting even closer to the market, combining global presence with local strength. We will now continue building our knowledge base together with our customers, facing new challenges every day. The investment in R&D and long-term partnerships has already gained trust and resulted in improved value over time for customers.
But rebranding is not enough
Of course, we are not the only business to have considered the value of its brand and re-positioned itself to more closely meet the needs of an ever-changing market.
What is significant, however, is the depth to which changes and improvements have been implemented. Rebranding alone is not enough in the 21st century. To succeed in the future, organisations will need to fully understand every aspect of their customers’ business as well as their own.
At ABS this has meant re-thinking a number of aspects of our product and service offerings, from how a customer initially makes contact right the way through to how a specific wastewater process is engineered to deliver maximum efficiency at minimum risk.
Part of this has involved setting up centralised customer service helplines where pricing and technical queries can be answered quickly by experts. These are complemented by a network of regional service depots.
Where more expertise is required, the organisation has been actively strengthened through both investment and acquisition. The company’s vision is to become the number one challenger in the area of wastewater technology by providing integrated solutions and packages. We want to gain market share and further develop product ranges, both from a technical and a value for money perspective.