Customer relationships, acquisitions & aging infrastructure among important industry concerns in 2018
Acquisitions, Technologies & Trademarks
Director of Global Business Development – Water Systems NSF Intl.
[email protected] | 800.673.6275
Looking toward 2018, I see that three current related trends will continue. The first is merger and acquisition activity. We have seen several high-profile examples of merger and acquisition activity in the point-of-use (POU) and point-of-entry (POE) market in 2017. These activities will continue for various reasons, including:
- Increasing global reach and manufacturing capabilities, along with economies of scale, for manufacturers who become larger through merger and acquisition;
- Access to new distribution channels, networks, resources and relationships as manufacturers combine forces; and
- Acquisition of new technology, including treatment technology, but also other technologies that manufacturers can bring to each other through joint efforts.
The second trend is emergence of new technologies. NSF Intl. is in an excellent position to see many of these technologies early in their development, which is one of the things I find most rewarding about my career. It is one of the primary roles of NSF to vet new technologies in terms of safety of materials in contact with drinking water, as well as water treatment and contaminant reduction capability.
The third trend is increased protection of trademarks and intellectual property. Even as new technologies and products emerge, there are certain well-established product platforms that have achieved very large installed bases.
Because of their large installed bases, these platforms tend to attract competition for OEM replacement elements, both in the form of aftermarket products and counterfeits. The counterfeits are manufactured and labeled to look just like the OEM products, with features such as unauthorized branding and fraudulent certification marks. More and more of these counterfeit products have been detected in the marketplace in the last few years, especially in the online space. Manufacturers, certification bodies, online marketplaces and government agencies have been placing increased focus and efforts on eliminating these counterfeit replacement elements from the market. I expect this trend to continue and intensify going forward.
Vice President, Research & Development Marmon Water Inc.
[email protected] | 203.764.2506
“La qualité commence par l’écoute du client!” Translated from the French: “Quality begins by listening to the customer!” Many years ago, a colleague gave me a picture with this French phrase wrapped around a cotton swab. I framed it and placed it in my office as a reminder that whether we are referring to product development, quality or technology innovation, we must listen to our customers so we can respond appropriately to their needs.
Listening and responding—dialogue—is what builds relationships. Relationships are fundamental to good business. Relationships build trust and serve as a foundation for future business and developing innovative technologies to meet the customer needs. Innovation does not happen in a vacuum; it happens when there is an understanding of the problem to be solved. Only by listening to your customer and having a relationship of trust and future partnership can we be successful.
The advent of the internet and the advancement of instant information and informal conversation, either by texting or email, have led to miscommunication, a breakdown in relationships and a stifling of innovation. Yes, innovation is continuing, but is it the innovation the customer needs?
I had the opportunity to give a presentation at the 2017 Water Quality Assn.’s (WQA) annual meeting on the Internet of Things (IoT) and sensors for use in water treatment products. Significant advancement is occurring in these fields. It goes without saying that electronics are an integral part of our lives, and IoT products and sensors will lead to helping our water treatment products provide a safer drink for the customer by showing that the water treatment product is performing as it should and indicating when service is needed, among other information. But are IoT products addressing what the customer needs? Are IoT products creating useful tools or more clutter in an already information overloaded life? Are we driving innovation for innovation’s sake or to solve legitimate customer needs?
In a recent Forbes article, “Profits Eat Innovation For Breakfast,” the author, Mike Maddock, quoted Robert Cancalosi, director of GE Global Customer Leadership.
“You must listen to customers and deeply understand their pain points, then you can position current solutions and co-create future solutions. The moment you stop listening, you are finished,” Cancalosi said.
Not too long ago, a major airline ran a series of commercials where the business owner sent his staff out to visit their customers. The owner visited the company’s largest and oldest customer. The theme was that face-to-face interaction is needed to regain lost business, rebuild relationships and build future opportunities together.
We again are entering an era where relationships are key to future business growth. The fast pace of our global economy necessitates businesses to rapidly understand and adapt to changing future needs of the consumer or customer. We are on the cusp of disruptive innovation as companies harness their relationships to address customer needs. Business is a relationship. Are we listening?
Pauli Undesser, MWS
Executive Director Water Quality Assn.
[email protected] | 630.505.0160
As we look ahead to the new year, one issue that is sure to get more attention is the growing problem of perfluorinated chemicals (PFCs), such as perfluorooctanoic acid and perfluorooctanesulfonic acid. These are man-made substances finding their way into the environment through applications such as fire-fighting foams, non-stick cookware, food packaging and more. PFCs are difficult to remove with centralized drinking water treatment processes. The need for POU and POE devices is evident.
We were delighted to see Congress include a provision in the National Defense Authorization Act this past November, which authorizes a nationwide study on the implications of PFCs on drinking water. In addition, we support efforts by the U.S. Environmental Protection Agency to launch a cross-agency effort to deal with PFCs along with state, local and tribal partners.
It also is safe to assume that lead will continue to make news in the new year. WQA Technical Affairs Director Eric Yeggy informs me that Denver, where we are hosting the WQA Convention & Exposition in March, estimates it has as many as 90,000 lead service lines to be replaced. Chicago, located just 30 miles from WQA headquarters, has between 100,000 and 200,000 lead service lines still in use.
However, even the process of replacing the lines can threaten the quality of local water supplies as remnants of the old fixtures find their way into a homeowner’s tap water. Again, POU and POE systems become more important to residents in areas where this aging infrastructure is being replaced.
Look for more outbreaks that are the result of so-called opportunistic pathogens such as Legionella. The aging infrastructure mentioned above is, again, part of the problem because of decreased water pressure, which leads to lower flows and more stagnation. Both conditions favor the growth of organisms that are attracted to our drinking water delivery systems.
Let’s not forget about pharmaceuticals, including antibiotics, and personal care products that are flushed down toilets and sinks and find their way into our drinking water. The more medication we use as a society, the greater the problem. In addition, agricultural runoff includes antibiotics and hormones given to livestock, threatening private wells.
It is clear as an industry, we have our work cut out for us. It is why the education sessions at the upcoming WQA Convention & Exposition are designed to address these and many other issues. The need for water treatment professionals to understand and address these concerns is paramount.
What is impossible to predict is the next hurricane, spill or accident which can cause additional strain on our water systems. That is why we are confident our industry will continue to provide a valuable service in the year ahead.