Schurco Slurry Owner, Nick Schur, answers the following questions from Pumps & Systems for the 2023 State of the Industry issue.
Pumps & Systems is celebrating our 30th anniversary in 2023. What do you think has made the biggest impact on the industry in the last 30 years? What do you think needs to happen to push the industry forward in the next 30?
Maintenance reliability programs have made a big difference in operating equipment. When I first began marketing our products to plants in the late 1980’s, there were no formal reliability programs in place. There were no Mean Time Between Failure (MTBF) programs. At most, maintenance departments scheduled maintenance based on hours of typical run time, or when equipment failed it was repaired. We are now a lot smarter due to research and development and advances in current technology. Now we have numerous types of apparatus installed. Wireless temperature sensors on bearing assemblies, pressure gauges measuring intake and discharge pressure, vibration analysis equipment, etc. Equipment failures are now investigated before being repaired. Phrases like “root cause analysis” are the norm. Repairing equipment is not just replacing parts, it is trying to figure out how to increase the life cycle by investigating material upgrades, installing bearing isolators, etc. I think in the next 30 years we will see numerous advances in equipment to help mitigate equipment failure and increase life cycles.
What are your thoughts regarding Build America, Buy America? How has that impacted your company?
As the owner of a multi-national business that markets and sells their products around the world, if we want to compete and grow we have no choice but to have some of our products manufactured overseas. U.S. companies began the process about 40 years ago when we shipped our intellectual property (IP) to other countries so they could partner to manufacture offshore products at a lower cost. This trend continues today as companies search the globe to partner and build manufacturing facilities to try and lower costs and maintain their competitive place in the market. Another major issue is finding qualified staff. We have been unable to locate and hire mechanics, mill rights and machinists. The next generation has no interest in working in a manufacturing facility and we have no tech or trade schools to help find people to start an apprentice program.
How have any price increases of products or materials impacted you or your company?
In the last year we have seen prices for all products increase. Raw materials, energy, shipping, employee benefits and salary, etc.— it has all dramatically increased. The question for companies is how much of these increases do we pass on to our customers? What will our competitors do? It has become a game of how much can you shrink your margin and still maintain your customer base because our customers are also feeling the pain of inflation and they are actively looking to lower their costs.
What needs to happen in regard to industry improvements in the short term?
I am focused on the mining industry and the biggest issue I see is the perception of the industry. The mining industry is constantly demonized as this awful conglomerate of companies that pollute and destroy the earth. This could not be farther from the truth. In the last 40 to 50 years, mining companies in North America have been very proactive in trying to operate their facilities as clean and compliant as possible. The regulations they face from our government are unlike any in the world. Many people want the mining industry to end, but they do not seem to understand that the phones they use, the electric cars they drive, the homes they live in, would not be possible without mining. These same people talk about our world climate and they think by shutting down North American mining and shifting these industries to other countries, it will somehow make things all right. We all live on the same planet so closing operations in North America and shifting to areas like South America and Africa accomplishes what? Out of sight out of mind, give them a clear conscience about our country like we did our part and shift blame to other countries? It is not going away.
What issues have you seen with any material shortages or supply chain issues?
Based on what I saw with COVID beginning in 2020, I assumed that once the world began to come out of our COVID lockdown there would be issues. Because my company is in good cash position, I began increasing our parts orders by 50%. By June 2021, I increased our orders by another 50% and in December 2021 I hedged on serious supply issues in 2022, so we increased orders for stock by another 50%. Based on these decisions, we have been able to satisfy our existing customer base and increase our sales by adding new customers who were unable to purchase equipment from their existing manufacturers. Our only issue is acquiring third party components for our pump packages, such as motors and drive components.
What industry trends are you seeing as we go into 2023?
It is difficult to predict what will happen in 2023. I assume that based on inflation and interest rate increases, the housing market will slow dramatically and orders for items like cars and boats will also decrease. I also do not see companies in our industry investing capital for inventory based on the uncertainty. For me personally, I am going to continue my investment in our company by adding equipment and continuing to increase our inventory so we can continue to grow in the market.
What’s on your mind/what are you most concerned about?
Personally, I am concerned about the mindset of the general public regarding perception of industries such as power generation, pulp and paper, fossil fuels and mining. We need to somehow begin to educate the public that these are not evil and bad industries, but necessary and positive for our country. These products must be available, and we need to manufacture here to not only develop cleaner and more responsibly, but also sustain jobs. These industries are essential to the growth and security of our country and it makes no sense to send it overseas.
What are you most looking forward to in 2023?
My hope is that in 2023 we can somehow communicate better, listen and understand. We need to somehow start an awakening and understanding that these industries and the companies that support them are not evil. Environmentalists and industry all want the same thing, a healthy country and earth for our families.