Improving technology in vehicle manufacturing and in maintenance products to keep cars running better and longer is a double-edged sword for automotive chemical suppliers. Extended-life formulations in categories such as antifreeze, and the debut of lifetime-warranted transmissions in vehicles are shrinking the market for fluids and additives, presenting challenges for suppliers and retailers. On the plus side, these new products carry higher retail prices and margins.
As the market shifts toward longer-life products, suppliers are going along, promoting these less frequently purchased products while exploring new growth segments, such as diesel additives and products targeting the sport performance market.
"The general trend in fluids is to move closer and closer to a fill-for-life standard," said Larry Beaver, vp of technology at Radiator Specialty Company. "The day will come when there are fewer and fewer fluids to put in."
While this trend would seemingly panic a company such as RSC, which makes oil and fuel additives, brake, power steering and transmission fluids, and engine cleaners under the brands Solder SeaVGunk and Engine Brite, the company has responded proactively by focusing on products geared toward older vehicles. A new line of additives and fluids will debut this fall for older cars with 50,000 or more miles. Also in the works is a line of diesel additives related to a small but growing segment of diesel vehicles now coming to market, such as some Volkswagen models.
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The pattern of declining sales continued last year in functional fluid categories, according the to the Automotive Aftermarket Industry Association (AAIA). Sales of transmission, brake and power steering fluids all declined at the top automotive aftermarket chains, according to AAIA, while fuel and oil additives fared slightly better, showing slight growth. Transmission and diesel additives were up by more than 30%.
As for the largest revenue generator in chemicals--antifreeze--sales in that category declined 5.5% at the top auto chains. Again, better-performing products are leading to less purchase frequency of antifreeze, while weather also was a factor.
Antifreeze formulations specific to certain makes of vehicles began emerging in the mid-1990s. While at least five different colors/formulations are now on the market, depending on the make of cal, the latest innovation in antifreeze is a universal formula that works with all the newer models. Old World Industries launched its Peak Global extended-life antifreeze and coolant last fall, and now Prestone has followed suit. These universal formulas are expected to eventually replace the make-specific products and reduce retailers' SKU counts. Both provide a five-year, 150,000-mile limited warranty with a flush and fill.
"Retail customers were becoming overwhelmed by the numerous varieties of antifreeze/coolant they were carrying to meet consumer needs, which led to higher inventory costs and lower returns on their investments," said John King, Prestone product manager.
With the confusing category driving many consumers to service providers to check and fill antifreeze, these new universal formulas may revive DIY coolant sales.
"We wanted to make it easy and simplify the situation," said Jeff Stauffer, vp of marketing at Old World Industries. "It also is a benefit to us in terms of focusing and marketing one brand that we can put a lot of emphasis behind."
These new offerings in Peak and Prestone brands are a step-up in price to the traditional green ethylene glycol-based antifreeze used for older models of vehicles. For that reason, most retailers will offer a good/better/best selection, including make-specific antifreeze products such as Dex-cool for General Motors cars. Stauffer expects universal antifreeze will one day replace make-specific products.
Demand for premixed antifreeze is another factor reshaping the category, considering 70% of antifreeze sold is used for topping off rather than a complete flush and fill. Most companies make both concentrate and premixed antifreeze, with the ready-to-use segment growing to about 30% of sales, according to Stauffer.
Another niche segment is low-toxicity antifreeze, such as Old World's Sierra and Prestone's LowTox brands. These propylene glycol-based products appeal to those concerned about poisoning of pets or children from regular antifreeze.
Friday, April 13, 2007
Plugged into Energy Use
Knowing how facilities use - and plan to use - energy can increase the EFFECTIVENESS OF TECHNOLOGIES designed to help cut power costs
More than one facility executive has tried to reduce energy costs by shutting off hallway lights, adjusting HVAC set-points and turning off unused computers and copy machines.
While those tried-and-true methods work, they are only as effective as building occupants' tolerances for walking in the dark, breaking a sweat in their cubicles and waiting for a computer to reboot.
Reducing energy costs by merely cutting the amount of kilowatts facilities consume is a nice start. But really, it's that - a start. Making an effective dent in energy costs requires a deeper understanding of energy than just how much electricity facilities use.
Facility executives serious about reducing energy costs - not just energy consumption - should know how their facilities use electricity, what the electricity is used for and how they would get by without it.
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"We know, and have learned the hard way, that it's not just enough to have enough widgets - energy-efficient windows, lights and other things," says Evan Mills, a scientist with the U.S. Department of Energy's Lawrence Berkeley National Laboratory. "You have to make sure they're applied correctly."
Knowing which widgets can best be applied to reduce energy expenses starts with knowing how much energy use costs the organization, says Mills. To the surprise of some, that's usually more than just the product of the number of kilowatt-hours used and the electric rate.
BEYOND KWH
There are a number of charges that electric utilities bill to customers that have little to do with how much electricity is consumed in each billing cycle. Those charges include connection charges, fees based on the time of day that electricity is consumed and the quality of the power measured as it exits the facility. And for those facility executives who lease space, there could be additional charges that the building owner collects based on the presumption that each tenant is responsible for a certain amount of electricity, so-called common charges.
The key to reducing those charges is to understand how they are determined and how they can be controlled.
Organizations pay connection charges, also known as customer charges, for simply having the ability to draw electricity from the utility grid. To a certain extent, the charge is based on the amount of electricity the facility expects to use, not how much it actually uses. The fee is set based upon the facility's rate class. All commercial buildings of a size and type, for example, would likely pay the same connection charge.
What's important for facility executives to understand about those charges, says Lindsay Audin, president of the energy consulting firm EnergyWiz, is that connection charges comprise a larger percentage of the electric bill as energy use declines. That means a high connection charge will remain so even if energy usage drops.
An important part in controlling a facility's energy bill has to do with determining how much electricity is expected to be used monthly. When setting electric service requirements, facility executives undoubtedly want to allow for a facility's electricity use to grow as the organization expands.
Sometimes, however, that anticipated growth is never realized because the organization changes location rather than expanding within its existing facility. It might also not be realized because the equipment placed in service to accommodate expansion will be more energy efficient than originally thought. Replacement lamps, ballasts, cooling technologies and office equipment will be more efficient than the original equipment.
One of the most important reasons facility executives should get a handle on anticipated electricity load, Audin says, is because of the relationship between kilowatts and back-up power demands. And the more important power is to the organization, the more important it is to figure loads accurately.
A mission-critical facility that uses 4,000 kw, for example, would likely want 7,000 kw of back-up generation available. The extra capacity is necessary in case a generator is offline for maintenance or fails to start when needed.
"If you're only using 1,000 kw instead of the 4,000 kw you thought you were going to use, you've got a lot invested in equipment that's not ever going to be used," Audin says.
Cyrus Izzo, senior vice president of online environments for the Syska Hennessy Group, an engineering firm, suggests facility executives develop a five-year plan to determine how much energy their facilities will need. He cites one firm, a data center based in North Carolina, that looked at how much energy the company used at each of its various facilities located around the country. From there, it used historical data to determine the likelihood of expansion within five years and then determined how large the expansion would be.
What resulted, Izzo says, was a plan that will allow the company to expand with minimal disruption to its business, while in the meantime avoiding unnecessary cost
More than one facility executive has tried to reduce energy costs by shutting off hallway lights, adjusting HVAC set-points and turning off unused computers and copy machines.
While those tried-and-true methods work, they are only as effective as building occupants' tolerances for walking in the dark, breaking a sweat in their cubicles and waiting for a computer to reboot.
Reducing energy costs by merely cutting the amount of kilowatts facilities consume is a nice start. But really, it's that - a start. Making an effective dent in energy costs requires a deeper understanding of energy than just how much electricity facilities use.
Facility executives serious about reducing energy costs - not just energy consumption - should know how their facilities use electricity, what the electricity is used for and how they would get by without it.
Advertisement
"We know, and have learned the hard way, that it's not just enough to have enough widgets - energy-efficient windows, lights and other things," says Evan Mills, a scientist with the U.S. Department of Energy's Lawrence Berkeley National Laboratory. "You have to make sure they're applied correctly."
Knowing which widgets can best be applied to reduce energy expenses starts with knowing how much energy use costs the organization, says Mills. To the surprise of some, that's usually more than just the product of the number of kilowatt-hours used and the electric rate.
BEYOND KWH
There are a number of charges that electric utilities bill to customers that have little to do with how much electricity is consumed in each billing cycle. Those charges include connection charges, fees based on the time of day that electricity is consumed and the quality of the power measured as it exits the facility. And for those facility executives who lease space, there could be additional charges that the building owner collects based on the presumption that each tenant is responsible for a certain amount of electricity, so-called common charges.
The key to reducing those charges is to understand how they are determined and how they can be controlled.
Organizations pay connection charges, also known as customer charges, for simply having the ability to draw electricity from the utility grid. To a certain extent, the charge is based on the amount of electricity the facility expects to use, not how much it actually uses. The fee is set based upon the facility's rate class. All commercial buildings of a size and type, for example, would likely pay the same connection charge.
What's important for facility executives to understand about those charges, says Lindsay Audin, president of the energy consulting firm EnergyWiz, is that connection charges comprise a larger percentage of the electric bill as energy use declines. That means a high connection charge will remain so even if energy usage drops.
An important part in controlling a facility's energy bill has to do with determining how much electricity is expected to be used monthly. When setting electric service requirements, facility executives undoubtedly want to allow for a facility's electricity use to grow as the organization expands.
Sometimes, however, that anticipated growth is never realized because the organization changes location rather than expanding within its existing facility. It might also not be realized because the equipment placed in service to accommodate expansion will be more energy efficient than originally thought. Replacement lamps, ballasts, cooling technologies and office equipment will be more efficient than the original equipment.
One of the most important reasons facility executives should get a handle on anticipated electricity load, Audin says, is because of the relationship between kilowatts and back-up power demands. And the more important power is to the organization, the more important it is to figure loads accurately.
A mission-critical facility that uses 4,000 kw, for example, would likely want 7,000 kw of back-up generation available. The extra capacity is necessary in case a generator is offline for maintenance or fails to start when needed.
"If you're only using 1,000 kw instead of the 4,000 kw you thought you were going to use, you've got a lot invested in equipment that's not ever going to be used," Audin says.
Cyrus Izzo, senior vice president of online environments for the Syska Hennessy Group, an engineering firm, suggests facility executives develop a five-year plan to determine how much energy their facilities will need. He cites one firm, a data center based in North Carolina, that looked at how much energy the company used at each of its various facilities located around the country. From there, it used historical data to determine the likelihood of expansion within five years and then determined how large the expansion would be.
What resulted, Izzo says, was a plan that will allow the company to expand with minimal disruption to its business, while in the meantime avoiding unnecessary cost
A royal reinvention: RB Royal positions itself as a manufacturer of custom fluid transfer components and systems
Just as in nature, businesses evolve or they perish. Some companies are unable to recognize or adapt to new market conditions and suffer a slow, withering demise. Others recognize the need to change, accommodate new business realities quickly, develop strategies to meet those new challenges and ultimately thrive and grow.
It's clear that the latter has been the case for RB Royal Industries.
For at least half of its 62 years in business, the Fond du Lac, Wis., company was essentially a job shop manufacturer of fluid handling components such as fluid lines, hoses, fittings and assemblies. The typical process involved the company producing exactly what the customer designed and drew without the opportunity of seeing the application.
"In that kind of business, it quickly boils down to price," said Jim Neumann, president of RB Royal. "Today, it's very difficult to compete on price alone because of global sourcing options. If we were to survive, we had to reinvent ourselves and how we did business. We had to add value or demonstrate the additional value we already provided."
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Today, RB Royal is positioning itself as specialists in fluid transfer applications. Its primary customers are OEMs that recognize the value of a supplier/ partner offering engineering-based custom solutions to their fluid handling challenges.
"We do not approach a potential customer and ask for prints to quote," Neumann said. "We ask for the opportunity to learn about their application and work side by side with their people to improve what they have. We are experts with a lot to offer in fluid handling applications. In that way, we can usually accomplish at least one of two things. Either we help enhance an end product for our customer, thus creating additional value in that product or we help them drive down their total cost of producing and getting their product to market.
"Reinventing ourselves included the development of a tool to quantify the positive results our customers can expect. We call it our value proposition. It's an important tool we use in the 'consultative' or 'value added' approach we take to winning and keeping customers."
Of course, reinvention is not a new concept to RB Royal. In fact, it played a key role in the early development of the company. Back in 1942, the company was founded in Chicago by John Neumann Sr.--Jim's father--after losing his job as a brass fitting salesman. The manufacturer he worked for could no longer use brass for producing much else but ordinance for the war effort so they had no need for a brass salesman.
The elder Neumann realized that he still had customers depending on him to provide fittings to keep the cars, trucks and small shops running on the home front. As a solution, he sorted brass fittings held by scrap dealers, selecting those that with minor refurbishing could still have some service life. He then offered the scrap dealers a few cents more than the scrap value, thus producing a win-win situation for him and his new source of supply. In that fashion, John Neumann St. was able to provide for himself, his young family and his customers throughout the war years.
Following the war, the business grew through more typical channels of supply and was moved to Fond du Lac in the late 1940s, where it operated primarily as a distributor and light manufacturer from John's home until 1952 when the first corporate building was built. The late 1950s saw the company invest in automatic manufacturing machinery and begin to service larger customers. Around this time, it also expanded its expertise from brass fittings and brake lines to custom work in hose assemblies and tubing assemblies.
By the end of the century, the company had expanded as far as it could at the original facility. RB Royal built a 90,000 sq.ft. facility that became its home in early 2002. The facility--designed by the same company that did the new Lambeau Field stadium in Green Bay, was designed as a model for establishing a lean enterprise environment, Neumann said. Employees were also invited to contribute their thoughts and ideas in the facility's design.
All facets of the facility, including the office, are designed with flexibility in mind. In RB Royal's lean environment, classic cam-style turning equipment is combined with some of the latest in CNC technology for metal cutting and bending. But Neumann noted that for RB Royal, lean is not so much about utilizing the most modern equipment as it is about the elimination of waste, including using equipment wisely.
"We've been very involved in lean enterprise for a number of years now," Neumann said. "In fact, in association with Wisconsin Manufacturers Extension Partnership, we have provided demonstrations or clinics at our facility for the benefit of other companies looking to learn more about lean."
It's clear that the latter has been the case for RB Royal Industries.
For at least half of its 62 years in business, the Fond du Lac, Wis., company was essentially a job shop manufacturer of fluid handling components such as fluid lines, hoses, fittings and assemblies. The typical process involved the company producing exactly what the customer designed and drew without the opportunity of seeing the application.
"In that kind of business, it quickly boils down to price," said Jim Neumann, president of RB Royal. "Today, it's very difficult to compete on price alone because of global sourcing options. If we were to survive, we had to reinvent ourselves and how we did business. We had to add value or demonstrate the additional value we already provided."
Advertisement
Today, RB Royal is positioning itself as specialists in fluid transfer applications. Its primary customers are OEMs that recognize the value of a supplier/ partner offering engineering-based custom solutions to their fluid handling challenges.
"We do not approach a potential customer and ask for prints to quote," Neumann said. "We ask for the opportunity to learn about their application and work side by side with their people to improve what they have. We are experts with a lot to offer in fluid handling applications. In that way, we can usually accomplish at least one of two things. Either we help enhance an end product for our customer, thus creating additional value in that product or we help them drive down their total cost of producing and getting their product to market.
"Reinventing ourselves included the development of a tool to quantify the positive results our customers can expect. We call it our value proposition. It's an important tool we use in the 'consultative' or 'value added' approach we take to winning and keeping customers."
Of course, reinvention is not a new concept to RB Royal. In fact, it played a key role in the early development of the company. Back in 1942, the company was founded in Chicago by John Neumann Sr.--Jim's father--after losing his job as a brass fitting salesman. The manufacturer he worked for could no longer use brass for producing much else but ordinance for the war effort so they had no need for a brass salesman.
The elder Neumann realized that he still had customers depending on him to provide fittings to keep the cars, trucks and small shops running on the home front. As a solution, he sorted brass fittings held by scrap dealers, selecting those that with minor refurbishing could still have some service life. He then offered the scrap dealers a few cents more than the scrap value, thus producing a win-win situation for him and his new source of supply. In that fashion, John Neumann St. was able to provide for himself, his young family and his customers throughout the war years.
Following the war, the business grew through more typical channels of supply and was moved to Fond du Lac in the late 1940s, where it operated primarily as a distributor and light manufacturer from John's home until 1952 when the first corporate building was built. The late 1950s saw the company invest in automatic manufacturing machinery and begin to service larger customers. Around this time, it also expanded its expertise from brass fittings and brake lines to custom work in hose assemblies and tubing assemblies.
By the end of the century, the company had expanded as far as it could at the original facility. RB Royal built a 90,000 sq.ft. facility that became its home in early 2002. The facility--designed by the same company that did the new Lambeau Field stadium in Green Bay, was designed as a model for establishing a lean enterprise environment, Neumann said. Employees were also invited to contribute their thoughts and ideas in the facility's design.
All facets of the facility, including the office, are designed with flexibility in mind. In RB Royal's lean environment, classic cam-style turning equipment is combined with some of the latest in CNC technology for metal cutting and bending. But Neumann noted that for RB Royal, lean is not so much about utilizing the most modern equipment as it is about the elimination of waste, including using equipment wisely.
"We've been very involved in lean enterprise for a number of years now," Neumann said. "In fact, in association with Wisconsin Manufacturers Extension Partnership, we have provided demonstrations or clinics at our facility for the benefit of other companies looking to learn more about lean."
Quieting a controversy? Prototype hybrid system for snowmobiles using new motor design could pave the way for guilt-free fun in winter
Over the last several years, snowmobiles have been a source of environmental controversy and have even been banned in some wilderness areas. But interestingly enough, a hybrid sled, using a new electric motor technology, may quiet that controversy.
Raser Technologies Inc., Provo, Utah, has demonstrated a prototype hybridelectric snowmobile that could potentially address many of the noise and emissions concerns of environmentalists while providing the speed and capability snowmobile enthusiasts crave. The Polaris prototype snowmobile features a low-cost, industrial electric motor enhanced with Raser's Symetron technology replacing the Polaris' normal two-stroke engine.
Thanks to the Symetron technology, the small, lightweight (80 lb.) motor delivers up to 80 hp--as much power as many popular two-stroke engine snowmobiles. In this series hybrid, the electric motor powers the snowmobile. A 6 hp Polaris gasoline engine drives a generator that recharges onboard batteries for range extension. The advanced lithium battery, supplied by Compact Power Inc., is normally charged from the electric grid in this "plug-in" hybrid.
Hybrid-electric snowmobiles like this prototype could help quell the controversy over the use of-snowmobiles in national parks such as Yellowstone as well as other popular snow-mobiling locations around the country. "We think the horsepower is finally equivalent to what you would expect in a combustion machine, but we can run quietly and cleanly," said David West, vice president, marketing for Raser Technologies. He cited measurements that indicated the hybrid electric snowmobile was over 600 times quieter than the combustion engine version.
Raser Technologies Inc., Provo, Utah, has demonstrated a prototype hybridelectric snowmobile that could potentially address many of the noise and emissions concerns of environmentalists while providing the speed and capability snowmobile enthusiasts crave. The Polaris prototype snowmobile features a low-cost, industrial electric motor enhanced with Raser's Symetron technology replacing the Polaris' normal two-stroke engine.
Thanks to the Symetron technology, the small, lightweight (80 lb.) motor delivers up to 80 hp--as much power as many popular two-stroke engine snowmobiles. In this series hybrid, the electric motor powers the snowmobile. A 6 hp Polaris gasoline engine drives a generator that recharges onboard batteries for range extension. The advanced lithium battery, supplied by Compact Power Inc., is normally charged from the electric grid in this "plug-in" hybrid.
Hybrid-electric snowmobiles like this prototype could help quell the controversy over the use of-snowmobiles in national parks such as Yellowstone as well as other popular snow-mobiling locations around the country. "We think the horsepower is finally equivalent to what you would expect in a combustion machine, but we can run quietly and cleanly," said David West, vice president, marketing for Raser Technologies. He cited measurements that indicated the hybrid electric snowmobile was over 600 times quieter than the combustion engine version.
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