Issue Sept Oct15
For 125 years, global solutions provider Emerson has delivered on its philosophy of “consider it solved.” Even when it’s never been done before, the company prides itself on having the capabilities, technology and experience to develop the processes or equipment its clients need.
Emerson has 220 manufacturing locations located in 150 countries. The company aims to be at the top in each of its markets while regularly evaluating potential acquisitions to boost its standing in those areas where it is not a leader. “Over 125 years, we’ve reshaped Emerson at different points in our history,” Executive Vice President Mark Bulanda says. “We’ve been in different products and different markets.” The company began as an electric fan manufacturer in 1890, but the work eventually led them into the motor industry and Emerson has been branching out and evolving ever since.
Today, the company is involved in a range of business segments such as process management, network power, industrial automation, climate technologies and commercial and residential solutions. Emerson provides equipment and expertise to the oil and gas, mining, water and wastewater, food and beverage and chemical industries. The company’s systems and solutions support large manufacturing and processing environments, and Emerson’s work can be found in the infrastructure people rely on every day, from New York’s subway to the world’s oil refineries. But the largest segment of Emerson’s business is in process and industrial automation.
In some form or another, Emerson has been involved in automation for the past 50 years. The company started with process automation in the mid-1970s and expanded into compressors and cooling and backup power for data centers in the 1980s. Each region has nuances in how it handles automation, Bulanda says, such as how a heating, ventilation, and air conditioning (HVAC) system regulates temperature differently in American homes versus dwellings in Europe or Asia. Having a worldwide footprint with regional offices that are knowledgeable in those nuances enables Emerson to design automation systems that precisely fit each local market.
Emerson utilizes standard components that act as the building blocks for most of its automation technologies. Although standardized, those components are configured to each job to deliver a machine or process that can accomplish the customer’s requirements, whether it is for an oil refinery or a packaging application. Standardized components typically make up about 80 percent of a machine while the remaining 20 percent requires customized components or software that differentiates the end-use.
The people and companies that make up Emerson’s customer base differ with each market. Many industrial clients have fewer in-house engineers than 20 years ago, Bulanda says, and as a result, technical markets rely more heavily on suppliers such as Emerson to provide solutions. Oil and gas companies might work directly with Emerson on a project or Emerson will partner with the client’s chosen engineering firm. On the commercial and residential side, many of Emerson’s products, such as the InSinkErator garbage disposal, go through the distribution channel to a retailer before reaching the end-user. But even in those areas where Emerson does not sell directly to its users, the company reaches out to individuals through market research and personal interaction to understand customer needs and receive direct feedback on its products.
Emerson was an early adopter of a globalization strategy, according to Bulanda. Its 220 manufacturing locations position the company to offer products and customized solutions in every region while providing the flexibility needed to deliver to customers. Maintaining such a large worldwide presence means that Emerson must have partners it can rely on. The company strives to buy from businesses that provide quality products, deliver on time and offer superior technologies. To find those vendors, Emerson sets up regional supply chains wherever possible with a focus on speed and flexibility that can help the company to meet its customers’ expectations.
Bulanda says it is that global footprint and diversity that allow Emerson to have broad capabilities, creating an advantage over its competitors. “We have the passion to succeed,” he explains. “We really focus on core technologies, then how do we take those technologies to solve a customer’s problem.”
Building Up STEM
The dwindling labor pool of available and qualified engineers has created the latest challenge to sustained growth for industrial companies such as Emerson. To ensure its own future, Emerson is using its 125th anniversary to promote science, technology, engineering and mathematics (STEM) education in hopes of inspiring the next generation of young people to enter STEM fields.
In February, the company kicked off I Love STEM, a marketing and social media campaign featuring YouTube star and science enthusiast Hank Green. “We have a common interest with building science knowledge,” Derek Thomas, director and brand officer at Emerson, says of the relationship with Green. The campaign’s goal is to connect modern conveniences with advances in science and technology to inspire a younger audience to become engineers.
But it isn’t just all videos and advertising. Emerson is helping children become directly involved in STEM industries. Through its business units, the company sponsors a number of FIRST Robotics teams, a national science competition for students in grade school and high school, and the Amazing Packaging Race, a contest at PACK EXPO featuring packaging tasks for college students.
Emerson’s regional locations help advance the work of local universities. In fact, Emerson Climate Technologies recently invested $40 million in an innovation center through a partnership with the University of Dayton to advance research and education for the HVAC industry.
“The awareness of STEM has increased greatly in the United States,” Bulanda says. “We are part of the voice out there about STEM.”
As Emerson works to foster the next generation of engineers, the company is tapping new markets for those engineers to work in. Bulanda says Emerson is evaluating its portfolio and considering acquisitions. “We’re trying to come up with the unique and novel solutions for our customers today and what they’re going to need 10 years from now,” he says.
Big data is likely to drive much of Emerson’s activity and interest in the coming decade. Thomas points out that companies only use about 10 percent of the data out there in the world today. Emerson is researching how to convert the other 90 percent into usable insights for its customers. The company will consider acquiring other businesses in the field to boost its expertise, but Emerson has its own internal projects already underway to use big data for predictive diagnostics and improved reliability.
“We can’t wait around for the perfect acquisition or we’ll be left behind,” Bulanda warns.
Emerson has never been a company too cautious to grow, even when growth takes it in new directions – or new continents. Although the United States remains Emerson’s premier market, international sales exceeded 50 percent of revenue for the first time in 2007 and rose to 58 percent of total revenue in 2014. “What we do is try to take advantage and go where the growth is and where our customers are,” Bulanda explains.
Those customers can increasingly be found online. Emerson is investing in its digital customer experience – the websites, online portals and connected information that determine how customers view the company through the Internet. “We’re trying to develop a consistent way to present ourselves to the customer,” Bulanda says. “When we’re complete with that, our customers will be able to see the breadth and depth of what Emerson can provide their markets.”
The digital customer experience is just the latest way the 125-year-old company is adapting to the times and executing on long-term strategic plans to remain relevant. “It’s a passion to succeed in solving our customers’ problems by not being complacent in our technologies and people,” Bulanda says.