Water Treatment can be a tricky category to purchase. I’ve spent much of my career trying to explain the nuances. There are many different offerings in the marketplace, and on the surface, the costs can appear to span a very large range. So let’s get started with the basics.
Industrial Water Treatment Definition: Adjusting the properties of water systems used for heat transfer, through mechanical or chemical means, for the purposes of preventing the waste of water, energy and materials.
Every Water Treatment Vendor’s Goal: To provide the equipment, chemical products, and services necessary to prolong equipment life, prevent failures, and lower the overall operating costs including utilities such as water, energy and gas.
Now, 4 Key Facts About Water Treatment that will hopefully assist you in purchasing it more effectively for your organization.
1. Costs should fluctuate like any other utility.
You’d never expect your utility bill to be a flat rate regardless of your usage, right?
When you lower your temperature set point at home during the night to save on electricity, you expect to see that reflected as savings on your monthly bill.
I’ve met with many customers locked in to fixed rate contracts for Water Treatment.
Initially, it does appear easier to manage. We all have to work within budgets and this can be easier when our monthly and annual costs are set. However, there are many operating parameters that will affect the required amount of Water Treatment throughout the year.
Some of these operating parameters ARE within our control – condensate return ratios, deaerator effectiveness, cycles of concentration, etc.
Think of these parameters like shutting off all water taps when they are not in use, or turning off the lights when you are not in a room.
This is exactly why fixed-rate contracts are not advantageous. Increasing operating costs highlight these bad practices and then become the driver to correct these controllable factors! This leads to decreased costs across multiple categories, decreased impact on the environment and increased efficiency.
Some operating parameters are NOT within our control. For example:
- There is a direct and linear relationship between the number of cooling degree days during the cooling season – the amount of water required for HVAC purposes – and therefore, the cost of Water Treatment.
- There is a direct and linear relationship between increased production – the amount of water required for steam and cooling applications related to production – and therefore, the cost of Water Treatment.
Although it will require more regular communication between your Water Treatment partner, your Facilities/Maintenance team and the Procurement department, developing budget ranges that are both flexible while being accountable, is the best way to ensure all parties are working together towards generating overall savings. Quarterly and annual budget review points are recommended to keep spending as low as possible.
2. Water Treatment products are NOT commodity chemicals.
Although many of the active ingredients are similar, every Water Treatment vendor has their own proprietary recipe for their Water Treatment products. Meaning, the concentration of the active ingredients are different and therefore, the amount of each product needed to treat the same system will be different.
This means that the $/L of treatment product is an irrelevant measure of comparison.
More applicable measurements are:
- Cost to treat 1000 USG of water
- Cost to treat 1M lbs of steam
Think of this like the rated fuel economy for a vehicle.
However, even these measurements are not cut and dry. There are many technical operating parameters that will affect these measurements drastically.
For example, the actual fuel economy will depend on the way the vehicle is operated – highway vs city driving, average speed, style of acceleration, idling, etc.
Many of the technical operating parameters that affect the cost to treat 1000 USG of water, need to be assumed for budgeting purposes. Therefore, it is essential that the evaluation of any Water Treatment vendor’s budget, must first include a thorough evaluation and agreement of the assumed operating parameters.
3. Service value is typically built into the product cost.
The correct application of treatment products into your water systems – consistently maintained within the prescribed control limits – is what will ultimately ensure the desired results stated in the introduction. That’s why a Service Program to assist you in the application of the products into your water systems is built into the product cost.
The type and level of Service Program that will bring the best value to your organization is somewhat subjective. It will depend on your Industry and the perceived needs at your particular facility.
Each Water Treatment company has curated a variety of different service offerings and developed company processes that they believe are best suited to help the key industries they serve to succeed. Each vendor’s approach may have pros and cons for your particular organization. For this reason, it is not advised to rely on creating a detailed scope of work in an attempt to put all service programs in a box.
Think of this like trying to write a detailed description of an iPhone, and then asking Samsung to meet that spec. The two companies have completely different approaches to meeting a similar goal. Some users prefer one approach over the other.
Instead, consider designing an evaluation process that encourages creativity and innovation by allowing Water Treatment companies to showcase their approach to meeting your company’s objectives.
It’s all about fit. Like finding the right pair of jeans. From their service approach and procedures to their corporate culture and policies, there’s a best fit for every organization.
The point of any Service Program is to best assist your Facilities/Maintenance staff in consistently maintaining the water quality parameters within the prescribed control limits. Therefore, including your Facilities/Maintenance staff in the evaluation process is critical to ensure strong buy-in and trust in the selected Water Treatment partner. Your Facilities/Maintenance staff are typically best suited to evaluate the perceived value of the proposed features of the Service Program and weigh their significance in relation to the overall cost.
4. Cost of Water Treatment CANNOT be evaluated in a silo or single category.
Perhaps the most interesting thing about Water Treatment is that the associated Cost Avoidance is orders of magnitude larger than the value of the program itself. This means that saving a few thousand dollars a year by choosing a Water Treatment vendor that offers a Service Program that does not perfectly fit your organization’s needs, could easily bleed hundreds of thousands of dollars a year in a combination of other categories.
Penny wise and dollar foolish.
Therefore, the evaluation of Water Treatment costs should always be the part of a bigger picture.
There should always be a direct link to Cost Avoidance in other categories when executed properly.
If the costs in any in the following categories are increasing, it may be a good time to take a closer look at your Water Treatment Service Program to see if it truly is the best fit for your organization:
- Utility costs – water, electricity & gas
- Maintenance costs – man hours, repair, replacement, downtime, etc.
- Contract costs – man hours associated with managing a vendor, mediation, negotiation, etc.
Knowing these few key facts about Water Treatment should assist any Procurement team in working with their Facilities/Maintenance team to select a Water Treatment partner that provides the best overall value to the bottom line of their shared organization.