New paths to competitive advantage
Impose requirements on suppliers
About 20% of global electricity consumption is used by pumps. The pumps are used for example in heating systems, waterwells and industrial enterprises where fluids need to be moved around. Grundfos is one of the world's largest pump manufacturers and in recent years has made concerted efforts to produce environmentally sound products founded on life cycle assessments.
Between 90% and 99% of the pumps can presently be recycled. Grundfos has therefore established a return scheme whereby discarded pumps can be returned to the enterprise. Grundfos has also successfully developed pumps that use about half as much energy as conventional models.
"If all the pumps in the EU countries were replaced with the new pumps, it would be possible to close down seven coalfired power plants - and the EU would meet 9% of its commitments under the Kyoto Protocol," says Vice President for Corporate Communications, Sune SallingMortensen.
Requirements passed on
At Grundfos the environmental work has resulted in immediate savings on chemicals, water, electricity and heat. The value of the savings is calculated each year, and it turns out that the costs of the environmental work are more than covered. This is not the only reason why the enterprise accords high priority to environmental matters, though.
"It is part of fundamental corporate policy that we should be a responsible enterprise. Moreover, it means something to our markets, where environmental requirements are increasingly being imposed by customers. This is particularly the case in Western Europe and the USA. In turn we impose the environmental requirements on our suppliers. The majority take this positively and seriously, and we have no qualms about saying goodbye to those who do not," says Sune Salling-Mortensen.
The more environmentally sound pumps are more expensive than the old pumps. Grundfos has therefore begun to draw attention to the "lifetime costs", i.e. the overall cost of the product to the customer. Due to the reduced electricity consumption, the pumps are not more expensive in the long run - on the contrary, and this is a strong marketing argument.
Grundfos Management A/S, Bjerringbro, 11,000 employees (approximately half in Denmark).