Interview Milestone Pump Technology “Sustainability Is Our Business”: Between Fluidics, Digitalization and Water for the World
How does pump manufacturer Grundfos plan to defend its global position as the number 1? And what is its management doing to prepare for future challenges? PROCESS asked Mads Nipper, CEO and Group President.
PROCESS: Mr. Nipper, the digital transformation now also plays a pivotal role in your industry. What visions does Grundfos have for the future?
Mads Nipper: At the end of the day, the purpose of digitalization is to achieve operational excellence — quality and efficiency on the basis of stable process control, plant/system availability and flexibility. To this end, we employ around 150 developers in the Digital Transformation Office who are working on network-ready products and apps, as well as digital order receiving and handling processes and services. With our pump knowledge and the know-how of the operators, we are able to develop technical solutions and business concepts. One of the key things we have realized is that all partners involved in projects need to forget about conventional structures. Flexibility and the courage to adopt 80 % solutions are absolutely essential for the digital transformation.
PROCESS: You have already embarked on a number of collaborations. How does Grundfos go about identifying suitable ones?
Nipper: One of the biggest challenges for companies is that they try to do everything themselves. In view of shared interests and complementary solutions, we are working for example with Siemens to reduce energy consumption. We are on the look-out for partners who add something to us that we are missing. Against this background, we entered into a partnership with Augury two years ago, a leading supplier of AI diagnostic solutions for mechanical systems. Since February this year we have been offering a range of corresponding services. The combination of AI-based solutions with comprehensive application know-how has the potential to completely change the way water is supplied compared to what we currently know.
Pump Champions Need Application Knowledge
PROCESS: Are you not worried that service providers from other industries will take away lucrative business from you?
Nipper: No, I take a more relaxed view. Industrial operators want to move a medium from A to B with a high degree of reliability and as efficiently as possible. Finding the most cost-effective way to do this is not a trivial matter. This is why advisers with the right background and the right experience are so important.
PROCESS: “Water as a service” might well be on its way — but who will be offering it? Grundfos or a different supplier to Iwater?
Nipper: “Water as a service” is indeed an option. Today, customers purchase a pump, but what they actually need is to ensure availability of a medium at a certain temperature, pressure and volume. Concepts are conceivable where the customer pays to have a medium transported from A to B. It is up to the service provider to make this process as efficient as possible. Of course, it is possible that new players might enter the market: data collection is not an art. It’s all about how you interpret the data. This requires know-how from experienced pump specialists. And you have to “understand” water. The knowledge and expertise we have built up over decades is not something an outsider to the industry can simply train up in a short space of time.
PROCESS: Your company’s offering has grown steadily in recent years. What can we look forward to in the near future?
Nipper: We have decided to prioritize selected business areas in which the company is already active or in which we see a realistic opportunity to become the number 1 or 2. The most important foundation for this is for us to stand out through innovation. The clear priority lies with the application and not with the product — we are convinced that cross-system customer-focused solutions and plant/system optimizations will gain importance and value. What has been added more recently is an even stronger focus on sustainability, a concentration on all areas of business relating to water treatment, and digital solutions.
Setting Sights on Existing Pumps: Tapping into Unlocked Potential
PROCESS: Energy efficiency is an important contributor to climate reversal. What potential is still available?
Nipper: We have achieved such excellent energy efficiency on a number of pumps that further improvements reach their natural limits. There is much more potential in existing pump stocks. We offer plant optimization services and a pump audit to identify energy wasters and put a figure on potential savings. The starting point is a comparative lifecycle cost analysis, in which the lifecycle costs of existing pumps and replacement pumps are compared and pay-off times for replacements are calculated.
PROCESS: Water is the second main issue on your sustainability agenda. What do you think that Grundfos can achieve in the long term?
Nipper: The United Nations regards the ability to supply clean and safe water as the central challenge of the 21st century. For a pump manufacturer, this means that the company needs to be able to do more than “just pumps.” Industrial ecology and global business ethics are what is needed. For example, reuse of water is a much-discussed trend throughout the entire industry. Reusing water reduces heating and cooling demand (as a result of available temperature differences that can be exploited), and this means that the necessary boiler and cooling capacities and therefore the necessary pump capacities are all reduced. If water is reused, the amount of wastewater generated is also reduced — and with that the disposal costs.
Pumps As Energy Piggy Banks? How Fluidics Boosts Sustainability
PROCESS: You have emphasized the connection between energy and water. What exactly are you referring to?
Nipper: Energetic processes are dependent upon water. Water also makes a direct contribution to energy supply through hydropower and is becoming increasingly important for energy storage in pump storage plants. In addition, water is also essential for power generation via steam turbines. Electric and thermal energy can be generated in sewage plants. The water for these applications is generally moved around with pumps — but although they are responsible for 10 % of global energy consumption, sadly their inefficiency can be as high as 90 %. With the aid of more efficient pumps alone, the world could save around 4 % of its electric energy consumption and up to two billion m3 of fresh water.
PROCESS: Grundfos supports the UN Sustainable Development Goals. How does a company that builds machines become so committed?
Nipper: It is not just about philanthropy — sustainability is our business! We are demonstrating what is possible in terms of technology, and we have the opportunity to market such solutions globally. Philanthropy and profit-oriented business do not need to be in conflict with each other. And, by the way, this is by no means a new topic for us. Since 2002 we have been supporting the Global Compact initiative of the United Nations, and in the process we have been concentrating on meeting the Sustainable Development Goals no. 6 (water and sanitary facilities) and no. 13 (climate change action). We are certain that we can make a real contribution here.
Mr. Nipper, thank you for taking the time to talk to us.