Tariffs are a No. 1 concern for Trey Walters.

Trey Walters, president and founder of Applied Flow Technology (AFT), spoke with Pumps & Systems on what will be on his mind this year.

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What are the challenges the industry is facing with IIoT? Are you finding that some end users are hesitant to adopt the type of technology you deal with?
We actually don’t touch on that with what we’re doing. We’re definitely not internet of things. A lot of our customers use our software to develop models of their systems, and they’re very nervous about those models going on to the internet. Emails, PowerPoints, fine—but the actual models, they really want to keep that much tighter behind their own firewall. But different companies are much more selective about that. We haven’t heard anything about wanting our software to run in the cloud. They like to be able to run our software locally behind a firewall. So that’s a little bit of a barrier into that thinking.

Are changes in the workforce affecting your company? What are you doing to try to mitigate issues related to the skills gap? What are you doing to attract millennials and younger workers to the field/your company?
We have good experience with hiring engineers. We’re a smaller company, 20 people. What we do—developing simulation software and analysis—people who are just graduating with engineering degrees or relatively recently graduated, part of what we do is appealing because they’re comfortable with the software tools. And also, with the types of things at the universities with the classes they’re taking and solving equations, it’s very similar to what we do. It’s ongoing, their class projects; we’re developing those tools and doing analysis. As long as we get a smart student who typically did well in school, that’s typically a good fit for us. We do get a lot of people who go to engineering schools who don’t envision working at software company. They think of working at a power plant or an oil rig or an agency that designs these things. We’re tool developers. So that does not map as well because people don’t view themselves doing what we do. So that is more our challenge. But when they do have a software bent and they like the tools and they’re good with analysis, they tend to be successful with us.

What keeps you up at night?
At this point, we have a controversial president, to say the least, and I actually think in some ways that he’s doing some good things. I saw an article about the tariffs and China and there may be some good things. I am concerned about our relationships internationally. We have a network of 40 companies that work with us, we have sales and technical support around the world. There’s a significant portion of our sales that goes outside. Damaging that trade relationship with Asia and Europe and recently with Mexico and Canada. That worries me with our global economy. We have some forces that are making trade more complicated and painting America in bad light. International trade could be disrupted by the impediments and damaged relationships.

What are you most optimistic about in 2019?
For us it’s very inward looking because we’re coming out with some new things. We haven’t released an entirely new product since 2004. We’ve got a whole new thing coming out early next year. That’s got us excited. The economy has been good—kind of riding a wave. What’s going on in the oil sector, that impacts what do.

What else should the end users who read Pumps & Systems know about the year ahead?
Something that we’re trying to do, which is a bit of a workforce thing, this came from an [Hydraulic Institute] HI conference about a year ago. They had a speaker talking about millennials. We have millennials that work here—about a third of our company. They hate being grouped in to the uniform block. One thing that came out of that conference is trying to encourage the baby boomers and in between to think differently about the younger people and how they approach things. A lot of them have big student loans and things my generation didn’t have. I called together people from that generation [and said] I want to make sure we don’t have blind spots in our company and how we’re dealing with customers. I encouraged them to organize and talk about their point of view and report to me and management some of their suggestions on things. If we’re not seeing things, talk about it and come back. They have regular meetings and request things. One request has been to work from home. We’re reluctant to do that, probably because of our size. When a couple of people are out it can disrupt things. Our workflow is dynamic, may have to meet immediately on an issue, have to meet off the cuff and chew on a problem and resolve it today. Senior managers are over 50 and everyone felt it would mess up the rhythm of how they do things. Couldn’t be flexible on that but we're able to be flexible about other things. One thing they asked about was training. Can we get two hours a week to look for webinars and do some self-training? So, it led us to more formalize how training is done each year. If we can’t send them out to a class they could spend time each week to do training on their own a few hours a week. We realize we don’t know everything and we want them to tell us what they think. We hope that they already knew that they had a voice and we wanted to hear from them.