Power is money
September 1st 2005

Commodities are going up and prices driven down.

According to Hoppecke Industrial Batteries UK MD, Chris Barrett, this means the supply chain needs all the efficiency it can get. Brendan Coyne reports

Chris Barrett has just returned from Prague, visiting a branch of Tesco - apparently "the only Tesco in the world to sell live fish". He admits this information may not serve much purpose beyond the obscure realm of the commerce-based pub quiz. However, it does demonstrate that not all big companies, even supermarkets, have a uniform offering across the continent.

Hoppecke, on the other hand, is harmonising its European offering, so that in three to six months, according to Barrett, "customers will be able to access exactly the same top class services from Hoppecke in any European country." Hoppecke will promote the increased strength of its service network, alongside a new member of its Trak Q product family – Trak-Fnc (Fibre Nickel Cadmium) to be launched at CeMat 2005, held from 11-15 October in Hannover.

Other battery companies, naturally competing for business, have questioned the strength of Hoppecke’s infrastructure in terms of aftercare, but the pan- European announcement is a firm riposte.

Barrett builds on it, adding that Hoppecke’s service engineers all work directly for the company, and many have previously worked for the other three main battery firms. "So we know very well some of the inefficiencies of our competitors. It’s not a question of numbers it’s a question of fully utilising your resources and working smarter. Our engineers’ experiences at previous companies are taken onboard - along with a number of other ideas - because you learn from mistakes. As a [non-legacy] company, we are lucky to have started with a clean slate." It also means Hoppecke can only take business from battery companies established in the UK before its arrival - its service turnover has doubled in the last 12 months.

Market forces

Returning to the supermarkets, one uniform element is their determination to drive down suppliers’ prices. Along with rocketing commodities, such as lead and steel, the effects have been felt across the entire supply chain. The truck companies, competing intensely for these big contracts, have to "share the pain with their sub suppliers," according to Barrett.

"Therefore we have to share it with ours.

But this has forced us to negotiate suppliers' prices without compromising quality. We have had some success there by actually visiting their factories to help them find ways of saving money - which we can then pass on to the customer.

Luckily from the outset we chose our suppliers and sub-suppliers carefully and have always worked closely with them. As a result they have worked willingly with Hoppecke to find solutions.

"So price is important - especially because what is happening with the supermarkets today is going to happen with all the big distribution companies tomorrow."

As such, the importance of efficiency increases in tandem. Like the truck companies, Hoppecke prefers to sell the benefits of lower lifetime costs rather than lowest outlay, and has done since entering the UK market. To get more out of the customer, it sells on the scenario of unrestricted use of batteries: day to day operations working smoothly; preventative maintenance planned to avoid disruption; enabling maximum efficiency.

Another selling point is power economy, says Barrett: "Our systems - using HF chargers, air circulation and aqua- fill - can also save customers considerable amounts of money, in terms of power use.

But the problem is: Are customers concerned with that? Can he measure that saving? If I ask him how much electricity he uses a year will he be able to tell me? In some of the bigger companies they know what they are spending, but quite a number of others don’t. So we try to underline from the outset that electricity savings are an integral part of the product’s price tag."

If the major distribution companies do follow the supermarkets’ path of squeezing margins and increasing competition, companies throughout the chain will increasingly be able to reel off figures such as annual power consumption, water usage and waste disposal in their sleep.

As Barrett says, technology, demand and the market has moved on - and will continue to do so. In this case it’s probably safe to say that when savings via efficiencies are the only way to protect pressurised margins, power really is money.

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