Xylem's Joe Johnston—vice president, water infrastructure North America—spoke with Pumps & Systems on the state of the industry as 2022 begins.
What issues have you seen with any material shortages or supply chain issues?
Logistics, cost of materials, availability of materials, labor shortages—all of these are really big challenges globally, for everybody, and Xylem’s not immune to that. I’m extremely proud of our supply chain teams because I like to think Xylem’s done a pretty good job of getting out in front of this whether that be bulk purchasing, buying in advance, hedging to try to mitigate some of this risk. But you can only buy out for so long, right? So, we’re trying to do as much as we can to ensure we have timely deliveries, availability of material, fair costs for materials so that we’re not needlessly transferring that to the market. The problem is, that problem is accelerating. There’s pent-up demand for everything, but it’s a real struggle.
What industry trends are you seeing going into 2022?
I think the thing that excites me the most is the opportunity around digital to influence and become a real difference-maker in the industry. I think, generally speaking, industrials have made it a bit challenging to understand the value of digital, and I think we’re getting a better sense of how to talk to customers about the outcomes that digital can provide, especially when you complement them with hardware. And when I say outcomes, I mean whatever that outcome that municipality or utility desires around efficiency, reliability, lower capex—whatever is important to them—and speaking to them in a language they can understand and translate. There are real solutions out there that either do improve reliability and efficiency or reduce nonrevenue water or any manner of outcomes. We have those capabilities today and we continue to build out our portfolio of digital solutions.
What keeps you up at night?
The supply chain train is trying to get out of the station from the pandemic, but it’s struggling. We’re in constant communication with our suppliers so that we make sure we don’t get a call overnight that says there’s a problem. We want to work with them. And same thing for us with our customers. If you have constant communication—it’s always better to know 'I’m going to have a problem' than 'the problem is already here' or 'oh, by the way, it was last week.' I think [the supply chain is] going to be a problem that stays with us for some time.