Utilities: unexpected partners.

One of the hottest trends in small business management these days is the formation of "strategic alliances." Whether you call them strategic alliances, partnerships or something else, they all involve joining with another organization to share and enhance your joint capabilities. In the 1998 forecast issue of Your Company, John S. DeMott detailed the pros and cons of such alliances and summed things up with the following statement, attributed to Bob Paglia, Coopers & Lybrand, "No one has the time to grow internally in the race to get bigger."

Actually, this is a pretty good idea. As the process of running a small business becomes more complex, we need to expand our capabilities and resources. If we can leverage our strengths with those of our "alliance" partner, we end up with a whole that is greater than the sum of the individual parts. In a way, we are doing this already.

We work with our professional advisors such as attorneys, accountants and the like. We rely on the advice and support of our trade and technical societies such as the American Foundrymen's Society. We belong to the chamber of commerce, state foundry organizations and a host of others that support our activities. But here is a potential source of assistance that I'll bet you haven't considered - your local electric utility company:

Utilities On Your Side

Your local utility company has a viable interest in your success - you are a consumer. Your foundry represents a good load to the utility company. In other words, you are a valuable customer that the utility company wants to keep. If it can help you be more profitable, its customer base becomes more secure. Further, you probably will expand your business, and the utility company will sell more kilowatt hours. Even further, if it can introduce you to a new or better electrotechnology and assist you in adopting the technology, that's more kilowatt hour sales.

Most utilities have a wealth of resources that they can provide - often just by asking. Most utilities that have foundries in their customer base belong to an organization, the Electric Power Research Institute (EPRI). EPRI can be looked upon as an "AFS" of the electric utility industry. It sponsors a host of technical and research activities that can contribute to your profitability. The EPRI Foundry office, located near AFS in Arlington Heights, Illinois, sponsors and manages a full program of applied research and development of foundry electro-technologies. It also organizes and manages demonstration projects in foundries of supporting utilities.

Utility Services

Here are a few possible activities in which it makes sense to partner with your utility company:

* Technical Evaluations - Suppose you feel the need to improve your process with the addition of new equipment, but you don't have the time or the specific expertise to make a proper evaluation. You can ask the utility company to do it for you. Through the resources of the EPRI Foundry office and its network of specialists, your utility company can provide an unbiased evaluation to you in a short time. Often, a research project involving the technology has already been completed and your utility company can provide you with the report.

* Engineering Studies - Some utilities can arrange to conduct a technical and/or economic study to address specific questions. A popular example is the technical/economic comparison of alternative melting methods.

* Seminars - Many utility companies sponsor seminars on foundry topics that are open to their customers.

* Rebates & Discounts - Some utilities offer special discounts and/or rebates for the adoption of new, more efficient electrotechnologies. You are familiar with high-efficiency motor and lighting programs, and more and more utilities are extending the support concept to other electrotechnologies such as electric resistance melting.

* Special Rates - Almost all utility companies offer special rates that apply to foundry operations. Most of these provide you with an economic incentive for operating during non-peak demand periods, such as at night. This is an excellent example of the "strategic alliance" idea in which each party gains.

* Financing - With the coming era of electric deregulation, or should we say re-regulation, many utilities have formed unregulated service companies to deal in nontraditional activities. This often includes financial assistance, providing another opportunity for the small foundryman to "partner" with his utility. This is especially helpful when traditional sources of capital are not available to the small foundry.

* Supplier/Vendor Liaison - Suppose you have decided to add a new technology but do not have the time and resources to investigate and evaluate all of the possible suppliers and their specific equipment. You end up with a stack of quotations from different suppliers that often do not pertain to exactly the same application and conditions. How do you sort this out? Again, the utility can help by providing an unbiased evaluation of the quotations through its network of in-house specialists and outside experts. This saves you time and money and can give you an added degree of confidence in your decision.

Of course, all utility companies do not provide this complete menu of services, but most do. While some of these services may require some cost sharing on your part, others are completely free.

Get to know your utility rep quite well. Invite him or her to visit and provide a plant tour. Ask about these programs and don't be bashful in taking advantage of these opportunities. The utilities really do want to help.