Building-controls firm turns itself around after rigid self-analysis
Chicago — For some people, the energy crisis still exists. There might be an oil glut, but electrical costs are rising at least 15 percent a year - and for building managers, that comes right off the bottom line.
Such is the message of a trio of Midwestern companies that dominate an industry still trying to define itself, the computer-based building-controls industry.
''If you look at most of the electrical industry's projections, there is a continuing increase in electrical costs of 15 percent. No question,'' says John J. Grad, president of MCC/Powers, headquartered in the Chicago suburb of Northbrook, Ill.
''What that means for us is that our customers have got to be able to control their building temperatures much more closely, with much lower swings in the room environment,'' Mr. Grad says. ''With an electronic system, if you set the temperature at 68, your variation might be half a degree Farenheit, where with a pneumatic system it might be two or three degrees.''
His company is what is left over from the sluggish Powers Regulator Company, acquired in 1977 by Mark Controls Corporation. Along with Milwaukee-based Johnson Controls Company and the Commercial Buildings Group of Honeywell Inc. in Minneapolis, MCC/Powers is apparently holding its own nicely in an industry that serves the $2 billion building-controls market.
Using its own software, with microcomputers supplied by Digital Equipment Corporation, MCC/Powers has experienced a 20 percent increase in sales in 1982, largely because of growth in retrofitting older buildings with its systems, Mr. Grad says. By adding direct digital control (DDC) to its systems, MCC/Powers says it can control heating, ventilating, and air conditioning with more precision and quicker response - and also enhance fire protection, security, and maintenance.
According to Buildings, a construction- and building-management journal, DDC is a generic system that works with both electronic- and pneumatic-control systems, but is not to be confused with either.
''Electronic analog controls are much like conventional controls in that each controller typically handles one control loop in a fixed manner,'' writes Richard J. LeBlanc, an engineer. ''DDC, on the other hand, can control numerous control loops, and can be reprogrammed for different control functions without hardware changes.''
Executives at MCC/Powers concede that maintaining their firm's market position won't be easy, especially now that companies such as AT&T, IBM, and United Technologies are entering the energy-management and security business. But David Lumley, MCC/Power's director of marketing services, says he is convinced the strategy adopted after the Mark takeover will continue to reinforce the company's position.
''We had lacked customers, effective salesmen, and had no substantial marketing or advertising plans in place,'' he says.
The biggest change the new Mark subsidiary made was to get away from the traditional building-controls-marketing track of finding sales opportunities by scanning the F. W. Dodge Report, a weekly publication listing new construction and renovation projects. That approach, bidding products to no specific market segment, worked well until Powers was overtaken by new marketing methods. During its last year on its own, 1976, Powers lost several million dollars.