The real price of success
The HVAC sector is becoming increasingly price-driven and this has implications for the way businesses are run, according to Nuaire's Andy Mudie. Ian Vallely reports
In a crippling downturn that threatens to tip into a triple-dip recession, price remains king and that makes it the key challenge currently facing the hvac industry, according to Andy Mudie, marketing manager of ventilation manufacturer Nuaire.
As he points out: 'To some extent, construction has always been about price, but it is even more so in the current economic climate. Whereas maybe two years ago consultants and contractors were looking at features and benefits on products and being driven by specification, we now see more discussions on whether or not product specifications stick.'
This trend has, says Andy, encouraged many manufacturers to start offering value engineering ranges and 'specials' for particular applications.
'The key thing here is the difference between the purchase price, the product price with installation cost included, and life costs. Companies focus on the initial price - what does it have to be to win the job? They deal with the rest once they have won the tender.'
Andy is enthusiastic about how product development can add value rather than just be about price: 'As a manufacturer, we need to offer increased performance at similar prices and our product development enables us to do this.
'Take our commercial heat recovery ranges, for example. New product development allows us to make a more efficient product and reduce its overall size. Because we can take out a lot of the physical size and weight, the cost of materials is lower so we can compete on price as well as getting better performance from a smaller unit.'
Noise is a critical issue
Customers are interested in a whole range of performance criteria including size, efficiency, duty and noise, and each competes for attention in any design.
However, as Andy points out: 'We can't break the laws of physics so we need to compromise over these criteria and make the best we can within the envelope customers have.'
For Nuaire, one of the most important performance issues at present is noise. Andy explains: 'We find that noise levels tend to be in the specification and contracts demand very low noise at a competitive price.
'Putting acoustic enclosures around products can be costly. What we do is look at the noise requirement and balance that with parameters of price and physical size.
'So we ask the question: 'How would we design the product from scratch in order to meet the noise criteria without the need for enclosures?' For example, we designed our new range of heat recovery products knowing that they will meet the requirements of School Acoustics - Building Bulletin 93.
'Because noise is such a specific issue on jobs like schools and offices, we are developing products with specific NR (noise rating) levels in mind.'
Another critical performance issue is energy efficiency and this is being tackled through the Energy-related Product (ErP) Directive. All fans with a power input between 125W and 500kW are affected by the first phase of the Directive which came into force at the beginning of this year with tougher measures planned for introduction in 2015.
This has inevitably impacted on cost, as Andy explains: 'There has been a price premium on complying with the 2013 requirements of the ErP directive because of the need to supply fans with the [more expensive] EC (electronically commutated) motors. That is something we have to accept.
'But the key thing for us is to use this opportunity to look at the design of products to improve them overall. It is very simple to replace an old motor with an EC version within the same design and get similar performance for a cost increase. It is better to examine ways to redesign the product with the new component in mind to make it better.
'There are three core design criteria when manufacturing fans - space, noise and efficiency - and they have to be well balanced. It is easy to say let's put new EC technology straight into the carcass of a fan, for example, but it might not be the optimum solution. We then need to look at that in terms of how you change the design to get the best balance.'
This focus on continuous improvement is central to Nuaire's approach to product development. Andy again: 'It is not just about having competing lines against our competitors or meeting regulations. It is about how our product lines are are evolving. For example, we can sell our heat recovery range for multiple applications and it still meets the regulations, but what will be the next innovation?
'We don't want to be driven purely by regulations. Rather, we are interested in developing products that help contractors install more easily and quickly and consultants design better systems.'
Nuaire in a nutshell
· Nuaire was founded by George and Alfred Tack. They began by selling ventilation equipment for applications such as chip shops and small hairdressers.
· In 1963 the company expanded its product range and, in the early 1970s, moved to its current site in Caerphilly.
· During the 1980s and 1990s, the company came to be seen as an innovator in commercial ventilation. The Nuaire Twin Fan was its bread and butter product for many years, but it also developed more industrial products including large axial fans, smoke fans for car park systems and residential products such as bathroom extract fans and the positive input fan.
· Today, the company operates in four business streams - UK commercial (schools, healthcare, offices etc); UK residential (private and social new build housing and repairs); international (distributing its products globally), and OEM (selling, for example, big axial fans to companies for chillers or marine applications).
· Each year, Nuaire processes 75,000 sheets of metal for use in its ventilation products, including galvanised, mild steel, aluzinc and plastic coated steel, totalling 2,200 tonnes.
· The company employs more than 400 people who are involved in the design, manufacture, sales and distribution of products serving residential, commercial and industrial customers in UK and international markets.
· Many of Nuaire's competitors market their products through distribution whereas Nuaire prefers to sell direct. Andy Mudie explains: 'Apart from being closer to our customers and enabling quick delivery times, the main advantage of selling direct is that we can listen to the requirements of consultants and contractors and respond to them quickly, modifying or re-engineering our products as necessary. The distribution route tends to be driven by price, service and delivery, but by selling direct, as well as these aspects, we can also look in more detail at the technical requirements and that feeds into our product development.'
· Most of the company's fans are stocked ranges and it prides itself on next-day availability. It has a 120,000 sq ft warehouse in Bedwas, north of Caerphilly. This enabled it to change its factory layout and invest £2.9m in metal processing including folding, stamping and laser cutting machinery.
· Nuaire's current turnover is just under £50 million.
· Around 25-30 per cent of Nuaire's products have been introduced within the last three years.
Microsite provides software for selection of AHUs
Nuaire is critical of catalogue printed data which might only be, say, for a specific performance criterion or a particular specific fan performance (SFP) for the number of blowers. That is why the company employs fan selector software to offer product performance figures 'at duty'.
Says Andy Mudie: 'Using our fan selector software enables the designer to choose the point at which the unit is being used and calculate specifications and data sheets for that point.'
Nuaire also has 'Airecad' software for air handling units (AHUs). The company's microsite (www.nuaire.co.uk/boxerahu) includes this software selection tool which allows customers tthemselves o select simple AHUs instantly.
The site also allows Nuaire customers to apply for CPD seminars and factory tours or request a technical assistance call-back from a Nuaire estimator.
On the microsite, customers can find information on Nuaire's design, selection and technical support capabilities as well as wider details of its air handling product portfolio, which ranges from smaller heat recovery units from 0.075 to 5 cu m/s up to larger AHUs capable of ventilating up to 20 cu m/s.
Caroline Radcliffe, Nuaire's commercial product manager, says: 'By adding the Airecad software to the site, we have made it possible for our customers to select AHUs directly from us at any time of day, an important and innovative development which will make the purchasing process much simpler for those customers with straightforward AHU requirements.'
16 April 2013