NEWS RELEASE September 2017
A New Route to Market for Combust, Flow and Treat Companies
The way to increase revenues and profits for suppliers of combustion systems and components, pumps, valves, automation, filters, scrubbers, centrifuges and other flow and treat products and services is undergoing a major metamorphosis. Much of the change is driven by the new ability to continuously and remotely monitor the performance of each product down to the on-off valve.
Suppliers are looking at organic growth opportunities as well as to acquisitions, collaborations and partnerships. The attractiveness of each route is altered by the avalanche of information about performance of each product which will become increasingly available.
The organic growth opportunities are changed by
- A concentration of decision making among 20,000 people at 1000 operating and supplier companies.
- The potential to add smart product features and increase unit sales prices.
- The yearly contract potential for all locations of the operator.
- Service and advisory revenues from continuous monitoring of the product.
- The potential to provide better and higher revenue products based on the continuous total cost of ownership information which is available to the operator.
The acquisition options are changed by
- The desire of large purchasers to choose suppliers who can provide solutions for multiple products on a worldwide basis.
- Since performance of products can be remotely monitored the parent supplier company can provide centralized support for its new acquisitions.
- The knowledge about smart products is important and can be provided to all subsidiaries more economically than if each group does its own development.
- Product companies can consider acquiring software companies and instrument manufacturers which allow them to provide a smart package.
The collaboration options are changed by
- Purchasing decisions will increasingly be made by suppliers of process management systems.
- Suppliers will need to find process management system partners or develop their own systems.
- The need for worldwide service means that smaller companies focused on a narrow geography will need to find partners in other areas in order to address the needs of international purchasers.
The sales program will need to change to address the following:
- The concentration of decision making to just 20,000 people.
- The easy identification of those decision makers in the digital world.
- The knowledge level of these decision makers which cannot be matched by local sales people.
- Purchasers who will want to work with individuals with comparable knowledge at supplier companies.
- Web communications and other electronic tools to eliminate most of the physical distance barriers.
The Mcilvaine Company can provide insights and advice on strategy development based on
- 50 million current forecasts of combust, flow and treat products segmented by industry, country and product
- Additional forecasts as needed for hundreds of millions of products e.g. ball valves for oil and gas pipelines further segmented in to trunnion vs rotary, top entry vs side entry, and for each size from 2 inch to 36 inch.
- Extensive knowledge regarding IIoT and Remote O&M
- Process knowledge dating back 43 years plus analysis of future trends
- Extensive acquisition analysis experience
- Evaluated Asea for Brown Boveri in the 1970s prior to formation of ABB
- Conducted more than 100 acquisition investigations in the combust, flow, and treat area
- Expert Witness activity
- Provided expert witness expertise relative to products and markets starting with the Pullman vs J. Ray McDermott in the 1970s
- Much of this information remains confidential but valuable general insights are gained from details on product pricing, margins, the value of stolen information etc.
Mcilvaine is in a unique position to help you move forward in this new connected world. Mcilvaine consultants are available to assist in small or large projects. When short timelines are needed such as in litigation and acquisition analysis, Mcilvaine can provide quick answers. In cases where a client is already working with a management consultant Mcilvaine can support that consultant.