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Editor’s note: Businesspeople often shirk when asked to predict the upcoming year. Given the variables both in business and culturally that occur, even the most astute person can have their “predictions” swept aside by outside forces beyond their control.
With that in mind, I’ve asked several top company executives to share with our readers how they see 2014 unfolding. I didn’t ask for a precise prediction, but I did request a sense of their view for the direction of the HVACR industry, and if they wished, their company too.
While the answers vary, I made this simple request. Please share your thoughts with us about the direction, potential and challenges for the HVACR industry in 2014. You have full rein on the focus and breadth (or narrowness) of your reply. You can discuss it from the perspective of your own company or you can explain it from a more theoretical view. The decision is yours.
When I was first approached by the editors of HVACR/Hydronics Distribution Business for comments on this topic, it felt like a daunting task. But I soon realized this was a great opportunity to perform a mini “SWOT” analysis on the industry from our company’s perspective by considering some issues and then determining … are they opportunities or threats?
The Generation Gap and Continued Evolution of Technology. Let’s face it. This is a very mature industry. Many of our customers have been very successful performing their trade without having to adopt all the new gadgets and “bells and whistles” flooding the market. But what about the desire of the current generation for instant gratification with the latest technology? Imagine all your analog gauges being replaced by iPhones (yes, there will be an app for that). This is not limited to physical product but also web- and application-based support. Should we view this as a threat or opportunity? As manufacturers, we should focus on designing and building products that make the technician more efficient – regardless of the generation. This being the case, one of our challenges is to determine with what and how (product, services, etc.) to implement technology. It’s also a challenge in how we do our jobs, due to the immediacy it causes.
New Talent Entering the HVACR Industry. Speaking of the next generation, there appears to be a potential shortage of trades people entering this industry – specifically field service techs and installers. It strikes me that our industry is not doing enough at a number of levels to promote the notion that learning the HVACR trade in a proper manner can be a path to fulfillment and success.
Building Codes, Refrigerants and the EPA. How will stricter building codes, the focus on green energy and green products and recycling of products affect our industry and business moving forward? And what about the uncertainty of refrigerants? HFCs have largely enabled us to move past the ozone-depletion era. However, there is some uncertainty around which HFC-based refrigerants will enter and/or stay in the mainstream. This has a bearing on product development and innovation. Longer term, greenhouse gas initiatives are looming as the next environmental issue facing our industry. The uncertainty is even greater as the market seeks LGWP (lower global warming potential) refrigerants. Natural refrigerants such as hydrocarbons or CO2 are a possibility, as are HFOs. The direction of the marketplace could have significant impact on how we develop products moving forward.
Channel Conflict. There are more ways for consumers to source and purchase product today than ever before. E-commerce is growing exponentially and has found its way into nearly every industry. Although ours is a very traditional industry, manufacturers and wholesalers alike cannot ignore this topic and will need to determine how to get products to market in the most efficient and value-added way possible. This is a challenge, but as long as we rationally evaluate channels to market, it can be an opportunity to reach more users.
Competition and Consolidation. Several factors will continue to create pricing pressures: new players entering the market; globalization, which offers a totally interconnected marketplace, unhampered by time zones or national boundaries; and the trend we see in the consolidation of the smaller, independent wholesaler, which most likely will continue through acquisitions, attrition and expanding market channels. We cannot let these challenges compromise our quality or service. We will need to be more creative while holding true to our genetic makeup.
This year, Ritchie Engineering will celebrate its 65th year of servicing this great industry. Like everyone else, we need to be cognizant of these and every other issue that we face on a daily basis and ask ourselves, “Are these issues opportunities, challenges or threats? Is the glass half empty or half full?” I believe each challenge presents an opportunity.
Mike Lanners is vice president of Domestic Sales and Marketing. Visit www.yellow jacket.com.