The Global Pump Industry
There are many challenges facing the global pump industry, starting with defining its size. Estimates are just that – estimates – and reliability varies from region to region. Adding to that is the disparity between exactly which types of pumps are included in these regional estimates. Nonetheless, most credible sources put the industry at $40-50 billion per year, with low growth rates forecast over the next year that will vary by region. Regardless of its size or makeup, however, there are some common issues facing the industry that are not in dispute: continued competition from globalization, the need to continually innovate, and developing technical talent.
Increased globalization is a two-edged sword. While it makes foreign markets more accessible to domestic suppliers, it also opens domestic markets to foreign-based competition. Along with this, the internet has also helped make global sourcing easier than ever. U.S. pump suppliers have adapted well to this, and have actually increased their shares of the global market over the last decade. One way these suppliers have done this is by reducing costs through continuous improvement and lean manufacturing initiatives. Advances with non-metal components and additive manufacturing are also helping. Either way, the global consumer has benefitted, as increased competition has led to improved customer service levels while putting downward pressure on pricing.
Innovations in pump design have been driven by specialized CAE and CAM software, including Concepts NREC’s FINE/Agile™ suite, which covers the entire design process from preliminary sizing through final design, with full fluid dynamics, mechanical stress, and vibration analysis included. These software programs enable designers to balance trade-offs in efficiency, cost, and manufacturability goals. This functionality is particularly important when striving to meet the new U.S. Department of Energy (DOE) and European Union (EU) efficiency regulations that domestic pump manufacturers must meet. And while this may be seen as a capital-intensive endeavor, pump companies have little choice in this matter, and those committing to it early will be rewarded in the marketplace.
Another issue facing domestic pump manufacturers is a general scarcity of qualified talent in the design and manufacturing areas. A generation of downsizing and sluggish wage growth have contributed to a flight of technical talent from the industry. Reversing this trend will take time. In the interim, there is a scarcity of qualified talent for many of the technical positions the industry needs to fill. Many top-tier suppliers are closing this gap by hiring outside consultants. As one of the leading turbomachinery design companies, Concepts NREC has helped many pump companies with our comprehensive design services. We also offer training and textbooks to support in-house staff development.
There is no doubt that the collapse of oil and gas prices – a very pump-intensive sector – has hurt the industry. Adding to that are the challenges of competing globally, stricter efficiency regulations, and a scarcity of technical talent, and the future might seem grim. Despite all this, however, pumps are still a growing, multi-billion dollar industry and these same issues, in one way or another, challenge all manufacturers, in all industries, everywhere. The pump companies that can innovate, continually improve, and are agile enough to respond to new customer demands will not only survive, but thrive, in the years to come.