By: John Viskup
Across every conceivable industry or category, there is a seismic shift happening. End users are increasingly abdicating control of their operation departments to their manufacturer partners. Decisions are being made daily in the C-suite as to what elements of the operation are critically important, as well as those noncritical activities that can easily be assumed by manufacturers and suppliers. Reducing head count and overhead expenses are the key drivers. It is a game changer for any brand that manufactures products and provides services to plants and operations around the globe − one that’s ripe with opportunities combined with the potential of considerable downside risk. It’s a trend that shows no signs of abating. Those manufacturers that are aligning their product and service portfolio around end-user desires are going to win long term. Those that don’t may suffer revenue losses. Never before have manufacturers needed to be more closely tentacled to their end users. It’s the fastest route to ensure future business sustainability and the establishment of new revenue streams.
The boiler and heat recovery business has undergone a tremendous paradigm shift as the boiler room has been aggressively targeted for reduction in staff resources. Boiler room professionals are retiring at a dizzying pace with no next generation of specialists taking their place. The high levels of boiler expertise no longer exists in boiler rooms. End users are asking for and, in many cases, requiring that boiler and heat recovery product manufacturers assume the operation and maintenance activities of their boiler rooms and adjacent facilities. This includes installation and start-up of new equipment. End users want to solely focus on their products at the core of the operation.
These sea changes are forcing a closer level of engagement by manufacturers with end users. It requires an unwavering management commitment, together with the accompanying financial resources to meet the end-user expectations. At Victory Energy, we’re aligning the company to be closer with end users on every project engagement. We’re seamlessly integrating with the engineering firms and customer/vendor selection groups. Customers view us as being part of their team. This isn’t an easy position to assume. You have to earn their trust. It requires being intimately involved on a daily basis as many end users prefer to deal directly rather than through intermediaries. Gone are the days of allowing reps, dealers or distributors to handle the relationship. Manufacturers have to be all in. Too much is at stake. It is potentially disrupting future go-to-market strategies. Today, the end user holds the ultimate control over the relationship. That’s not going to change anytime soon.
This position of end-user strength represents a wealth of opportunities for the boiler and heat recovery business. It requires acutely listening to the voice of the customer. Delivering solutions that are based on end-user need rather than simply manufacturing the product mix that you can easily provide. Developing new service platforms that allow end users to easily divest noncore activities. This customer closeness leads to long-term arrangements that are revenue producing for years and years. It’s hard to displace an incumbent manufacturer position. The days of setting a product in place and walking away are gone. You have to be in it with your customers by having their back at all times.
Never has there been a better time to be in the boiler and heat recovery business. Increasingly we have a seat at the table that’s closely aligned with our end-user customers. It’s a tremendous opportunity; however, it requires fortitude and tremendous capital investment to deliver against this new end-user requirement. I’m proud to serve as Board Chair of the ABMA and to help set the course with the Board to guide and motivate our members to seize a greater position of strength with end users. The future is boundless for all of us, with end users helping us to lead the way.