Looking ahead at this year, here is TMEIC Senior Sales Application Engineer Manish Verma on international politics, the skills gap and more.
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How are international politics and issues like the steel tariffs affecting your business and/or the pumps industry overall?
As an electric power conversion and rotating machinery participant in the pump industry, there are several buyout items such as equipment enclosures and industrial control buildings for pump stations, petrochemical complexes and other industrial facilities. Steel is a crucial ingredient in their construction. Since most of the steel is imported, it is not uncommon to see subvendors insert price escalation clauses. For example, during a recent enclosure procurement, we received a statement that: “Due to current volatility in the United States steel market, it may be necessary to adjust quoted price at any time prior to production release for your order. The pricing is based on the CRU metal index as of March 1, 2018. If that index increases by more than 5 percent before receipt of your purchase order, it may be necessary to increase the above price.” Note that the tariffs are not only imposed on steel, but also on other electronic equipment and components that are used in electric power conversion. Hence, it eventually increases the overall cost of the installation that impact decision-making, but we have been able to control them effectively.
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?
The U.S. has mostly transformed into a knowledge-based economy. However, that knowledge has been in “tech,” which the young millennials view as being more glamorous and hence want to participate. Many universities have responded to that demand and shifted the focus of their curriculums to cater current needs leaving a handful of institutions that have strong programs in power engineering and subfields such as power electronics, power systems and rotating machinery, which are necessary for infrastructure and capital-intensive projects. The current administration sent their vision titled “Legislative outline for rebuilding American Infrastructure” earlier this year to Congress where it seeks to spend $1.5 trillion over the next 10 years. One of the first pieces of legislation to that point was signed into law in October 2018, America’s water infrastructure Act of 2018. This creates immense demand for qualified professionals who study classical engineering disciplines such as chemical, electrical, civil and mechanical. To attract young workers in our company, we have been fortunate to attract new graduates from in-state (Virginia) and neighboring states such as [North Carolina] that are nationally acclaimed and have excellent programs in power electronics, mechatronics and mechanical engineering.
One of the skills gap that we see in our line of business is that application knowledge of MV VFDs and motors is limited among users and operators. While this equipment is considered “critical asset” for a facility or a pump station, many consider this equipment, especially who come from mechanical, controls and instrumentation discipline as a “black box.” Every day, end users of MV motor and drive equipment are challenged with the task of properly applying them to their application. This is not taught in school at the undergraduate or graduate level. It is gained through on-the-job experience or by attending a vocational school. Identifying this gap, we started hosting a one-day Medium Voltage Motor and ASD Systems school in 2012, which addresses key application consideration, issues and case studies relating to MV motors and drives. So far, we have hosted more than three dozen of these schools across U.S. and Canada impacting hundreds of professionals. The good news is that these schools are noncommercial and hence the knowledge gained is generic and applicable to a wide range of applications regardless of the equipment vendor. This unique feature of the course makes it eligible for Professional Development Hours (PDH), which could be used by professional engineers (PE) to maintain their state license.
How have advancements in IIoT affected your business? How do you predict they will continue to do so?
The power ratings of our products and the pumps to which they are applied have had limited impact of IIoT so far. This is because the VFDs and motors driving the pumps are critical to the process and downtime means lost dollars. There is no room for failure in many cases. However, we are speaking to end users and operators of pumping systems to get a sense of what their opinion is about IIoT. While there are several concerns, chief among them is cybersecurity. Next is “perceived loss of intellectual property” and finally integration with legacy equipment. Many oil and gas complexes are considered national interest infrastructure and hence regulated by FERC. This adds an extra layer of challenge that must be met before IIoT can be truly deployed and its benefits realized. In my opinion, interface with legacy equipment poses the biggest challenge and there is a lot of old stuff out there. I believe the widespread adoption of an IIoT is possible in the next five to 10 years if the system deployed can clearly demonstrate it will increase safety, improve operation efficiency and reduce downtime.
What are you most optimistic about in 2018?
I’m very optimistic about the current administration’s efforts regarding policy, spending and regulation in rebuilding American infrastructure. Key pieces of legislation and executive order such as the “Tax Cuts and Jobs Act (TCJA) of 2017,” “America’s Water Infrastructure Act of 2018,” and “Buy American, Hire American” will bring prosperity to all involved in the pumping world and more specifically here at home. Further, the oil and gas sector, which represents the lion share of pump usage, has also recovered from the slump in 2014. We see investment and RFQ activity in the midstream sector such as crude, NGL, gas transmission pipelines and downstream sector.
From an MV VFD standpoint, I’m seeing the industry bring novel thermal management solutions to the heat loss associated with multi-megawatt medium voltage drives. These solutions eliminate not only the need for HVAC, but also the need for an E-house or an MCC building altogether, thereby reducing capital and operating costs that aids in faster decision-making.
What else should the end users who read Pumps & Systems know about the year ahead?
Get ready to work, invest in your intellectual bank, don’t be intimidated by new products that increase efficiency and productivity of the installed system and stay healthy.