Knowing the Business
Schneider Electric's expertise translates into a healthy bottom line
- By L. K. Williams
- Aug 01, 2007
A little more than one year after launching its Water Wastewater Competency Center, Schneider Electric’s North American division’s orders are up more than 50 percent.
“Our people do water and wastewater everyday, and that’s all they do. That’s how you develop a competency,” said Marvin Shotts, center director. Especially in OEM [original equipment manufacturers’] automation and control, the business has grown dramatically, he said, adding that “we’re taking market share.”
The virtual center employs more than 60 experts who are trained to understand what the electrical needs are for water and wastewater facilities. They include application and quotation specialists, power engineering consultants, design engineers, project managers, and technicians. Many of them work from their homes so they can be closer to their customers.
According to Mark Williams, business development manager, “We built a front office, we do some mining of jobs (in automation), and we have a back office in three locations:
- Seneca, S.C., -- enclosed drives and low-voltage motor control center;
- Columbia, S.C., -- low-voltage switchgears; and
- Smyrna, Tenn., -- medium voltage switchgears and medium voltage motor control centers.
Williams, who works from Atlanta, Ga., explained that customers can speak with one center expert and develop a communication system or one business development specialist for information on a whole project – electrical to automation.
The center is run by the North American Operating Division of Schneider Electric (Palatine, Ill.), one of four geographic divisions of the company. The company, which is headquartered in Paris, reported a 17.6 percent increase in revenue and an operating margin of 14.6 percent for 2006. The division markets the Square D, Telemecanique, and Merlin Gerin brands for power, control, and automation needs.
Modeled after Schneider’s Critical Power Competency Center, the Water Wastewater Competency Center had to make several adaptations. Shotts explained that water-wastewater is more fragmented than the critical power market.
Who is Sta-Con?
Sta-Con, Inc. is an electrical control panel manufacturer of quality control systems for municipal and industrial installations. Since 1973, the company has designed, manufactured, and shipped approximately 22,000 control systems throughout the world using variable speed drives, solid state starters, and programmable logic controllers.
Who is N.A. Water Systems?
N.A. Water Systems, owned by Veolia Environment, has offered municipal design-build services to public or private authorities for more than 95 years.
Caption: Quality control analyst Andy Fraidy works at a low-voltage motor control center.
“Water was a very cumbersome piece of business for us,” he said. “If you don’t do it all the time, you could put the company at risk. The market was inefficient for us.”
Company leaders decided to change all that. “Our No. 1 priority was focus: to have the right people in place, evaluate our processes, and serve our customers better,” Shotts said. “Everything drives value ultimately back to the end user.”
As part of the competency approach, Schneider streamlined its document approval process. When a customer needed layout and design for its switch gear, for example, the company provided drawings. Changes often were required, and these had to be made and then sent to the customer again for approval. Last year, the center established a program in which dedicated managers ask more questions during the initial project request, building a record of 80 percent first-pass approvals.
This practice is “more efficient for our customers,” Williams explained. “All major competitors go through a multiple resubmit process. Getting drawings to pass the first time makes it easier to do business.”
Shotts added, “Consultants and end users are demanding. We try to give them what they want and when they want it.”
The Water Wastewater Competency Center is not the only way Schneider Electric is doing business in the water and wastewater industry. The company also has developed long-term relationships with other companies interested in this field.
Sta-Con of Apopka, Fla., has been building electrical control panels for 33 years and has been working with Square D, the U.S. company purchased by Schneider Electric in 1991, almost since its inception.
“We chose years ago to only use the best quality products that we could find – top-of-the-line enclosures and components,” explained Mark McCartney, president of Sta-Con. Schneider Electric uses a group of 15 panel builders that have distinguished themselves in some way. Sta-Con’s specialty is building custom projects.
As one of the 15, McCartney said he receives valuable product support. The only frustrating aspect of the relationship is that Schneider employees do get promoted and Sta-Con must recreate working knowledge as new staff members are hired.
N.A. Water Systems LLC of Pittsburgh, Pa., has had such a positive relationship with Schneider Electric that the two signed a good faith agreement for North America in 2005.
According to Kurt Fry, electrical and instrumentation and control engineering manager, his company saw the need to have an electrical equipment supplier as a partner in its design-build business. After keeping a scorecard on suppliers for two years, N.A. Water Systems found that Schneider Electric performed “the best in the majority of the criteria,” he said. The criteria included delivery of goods, warranty issues, and pricing.
“We wanted a true partner,” Fry explained. The agreement allows Schneider Electric “first shot” in a design-build project, but N.A. Water Systems reserves the right to use the company its client prefers. N.A. Water Systems has developed a familiarity with Square D equipment and can call Schneider application engineers directly, making compression of engineering and construction easier. The two also are sharing online product ordering software, leads on plant operations maintenance, and other market opportunities, including oil and gas, pulp and paper, and food and beverages.
Fry admitted that building the pact has been a “long process.” The business model of design-build is different from that of bid-design, he said, adding that “everyone needs to understand the business model we are working in.”
On the positive side, the design-build company now can propose more work cost effectively. “Our negotiated pricing is very, very economical. We do buy a lot of volume. It really supports engineering in a very big way.”
And Schneider? The agreement provides more opportunities to go to the marketplace, where the company seems to be doing well.
This article originally appeared in the 08/01/2007 issue of Environmental Protection.