Seepex strives to be a low-cost producer of cavity pumps by monitoring the market and partnering with its suppliers.

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Seepex Inc. President Michael Dillon knows it doesn’t have to be the lowest-priced manufacturer of cavity pumps to earn a favorable reputation in the marketplace. In fact, Dillon doesn’t buy into that philosophy at all.

“A lot of companies are out to prove that they have to be the lowest-cost producer, and I’m out to prove that is wrong,” Dillon says. “I think value is more important.”

Quality and value take top priority at Seepex because of the complex nature of the applications in which its products are used. The company’s clients include those in the food and beverage; oil, gas and petrochemical; chemical and biochemical; and pulp and paper industries. Seepex’s progressive cavity pumps are used to control the flow of low- to highly-viscous, aggressive and abrasive materials.

A wholly owned subsidiary of GmbH + Co KG based in Germany, Seepex’s U.S. operations are headquartered in Enon, Ohio, where it manufactures six product lines of pumps and two lines of pump accessories. The company’s customers consist of Fortune 500 firms including Procter & Gamble, Necco, Chevron, BP, M&M/Mars and Dannon.

“We operate basically like a family owned business, so we have a different outlook,” Dillon says. “Earnings per share are not really important to us. We’re more interested in long-term growth that is balanced. I can’t have 100 percent growth in the oil sector and just ignore the food industry. We have a very balanced approach.”

This philosophy, according to Dillon, is very different from that of competitors, which have been known to place all their efforts on fast-growing segments that can’t sustain business in the long haul. “We try to establish relationships with our customers to prove that we are reliable over a long period of time,” he explains.

The company strives for efficiency and balance by dividing workflow between its U.S., European and Asian locations. Seepex is able to share capital, labor, knowledge and parts between the three areas and therefore avoids falling victim to fluctuations that can harm its business.

Customization helps the company keep a competitive edge. Engineering Manager Fabio Pabon says Seepex is constantly learning about and testing new applications based on customer requirements. Because the majority of its pumps are custom-engineered, customers expect the best performance and, therefore, quality overrides cost, Pabon notes.

“We are not always the cheapest company, but we can ensure that we have the best quality,” he maintains. “If we don’t have a pump, we will work with the various materials to ensure that we come up with the right equipment and systems.

“In the chemical industry, for example, we are doing a lot of things that are not common to ensure that we always try to find new technologies and are looking at new innovations and procedures to help clients.”

This year, the company decided to introduce its first line of standard pumps in order to provide customers with a pump more readily available and universal in its application. “Up until this year, every pump we made was custom-made and made-to-order,” Dillon notes. “Now, we are introducing a new product line that will be made-to-stock, rather than made-to-order.”

The group W, or wobble, pumps can be used in almost all industries and are designed to handle liquids of all viscosities, as well as products with high solids contents. The simple construction of the wobble pumps also makes them cost-effective and easy to handle.

New Opportunities
Advances in the materials used in cavity pump manufacturing has opened up new doors for Seepex, as well as introduced new challenges. “We are seeing more exotic materials required that are becoming a bigger part of our business,” Dillon notes.

Erosion-resistant coatings, nickel-chromium-molybdenum stainless steel alloys, duplex stainless steel and titanium are among the newer materials Seepex is working with today.

Obtaining these new materials, however, has taken adjusting to, Dillon says. “They can be a problem because of longer lead times and we have to be careful that we are getting the best price for it,” he notes. “We have to use vendors that can fabricate it and that can become difficult.”

As a cost-control measurement, Seepex has forged partnerships with new vendors and suppliers and has gained certifications to manufacture product itself. “We’re always trying to forge partnerships rather than just get the cheapest thing we can get,” Dillon maintains. “Some of the things that [customers] pump can be really dangerous. If we can get product that helps customers get the job done better, we earn a high level of trust.”

Inventory control is managed daily to ensure product is available when needed. “We have a logistics department and inventory control and management that are fairly good,” Dillon says. “We all get involved in that on a routine basis in terms of what items we need to stock and what inventory needs to be done. On a daily basis we try to foresee what [materials] are needed and we do some pre-ordering when we see a situation that calls for added material. We try to be overstocked in raw materials and work-in-progress and understocked in finished goods.”

The Real Advantage
A talented staff of engineers is one of Seepex’s competitive advantages, Dillon asserts. Because of the complex nature of customizing a product, Seepex retains highly educated staff, many of whom are engineers and production employees. The company prefers to hire experienced staff as opposed to new graduates who Dillon says, in many cases, don’t hold the level of field experience Seepex requires. Older employees “have the experience and the judgment and give us a much higher rate of return,” he notes. In fact, he adds, the top-performing sales team member is 68 years old.

Through internal skills testing, background screenings and multiple interviews with human resources, department managers and other employees, Seepex hires only those who are the most capable. The company also works with local politicians and school administrators to discuss strategies on how the improve the quality of college graduates entering the work force. “We do work with the local colleges and universities by using co-op students and advising administrators on what we need from a recent grad,” Dillon explains. “We have done some work in this regard with our local state-assembly representative.”

After-sale service
A growing emphasis on service and after sales at Seepex has become one of the top priorities, it says. “We at Seepex have attached great importance to both factors for a long time already,” Seepex states. “The fact that our customers are at all times satisfied with our quality products and reap durable commercial rewards from them are decisive factors for us.”

Lifespan costs become increasingly central in the selection of a new pump and are now a significant factor in distinguishing between high-quality and low-quality products. According to Seepex, generally speaking, “the purchase price of a pump only account for five to 10 percent of the lifespan costs. The total costs are additionally comprised of the downtimes, power consumption, servicing and maintenance. The high-quality and precise fit of the main pumping elements – the rotor and the stator – are decisive for the reliability and service life and for the durability of the pump.” Seepex maintains that it is able to achieve “optimum effectiveness and high service lives due to state of the art production technology.”

Seepex’s broad-spectrum of after-sale services include:
n Original Seepex spare parts with the best possible delivery characteristics through precise shaping; optimized levels of effectiveness; enhanced resistance to abrasion; and increased durability of pump elements
n Extended warranty periods in dependence on the service level
n Application consulting
n Global and fastest possible service support at the installation point
n Shortest possible delivery times for spare parts through global stockpiling
n 24/7 helpline

To bridge production peaks or in the event of the failure of a pump, Seepex also provides its clients with a lend or rent pump free of charge.

Looking Ahead
“Apart from the targeted geographic expansion and development of further market segments, we will keep meeting the demands and individual requirements of our customers in diverse markets through R&D of innovative high-quality products and services,” the company maintains.

Local investment has been important to the company as evidenced by the recent purchase of an additional 10 acres of land adjacent to its Enon facility and a $2.5 million expenditure on injection molding equipment. Since 1996, Seepex has made three expansions to the Ohio facility and is prepared to add to the 40,000-square-foot plant as needed.

“We’re depending less on the operator for input and labor – we want the earnings per employee to increase at a faster rate,” Dillon notes.

Monetary and market share gain will come by entering new geographic regions. Latin America in particular has become an important target for Seepex, where it is considering creating a subsidiary.

The company also intends to ramp up distribution. “One thing we are doing is stepping up our efforts in managing our distribution,” Dillon asserts. “We have known for a long time that if we add to those efforts, we could triple sales. We are going to look at how well we are managing distribution, as opposed to a general sales number.”