Pall Corporation is the largest, most diverse filtration, separations and purifications company in the world. While the company has been in the business for over 60 years, it wasn’t until the 1960s that volumes became significant. In the decades from the 1970s, the company began to experience extreme growth.
“Pall services virtually every industry,” says founding Australian managing director Chris Donegan. “We have a saying that one day all fluids will pass through a Pall filter and that’s not far from the truth. If you drink municipal water, beer, wine or soft drink you’ve been touching our filters one way or another.
"In the manufacture of steel and paper, Pall’s oil filtration products are used extensively to protect the critical servo valves and mills that affect the quality of the final products."
"You’re protected by our products if you fly on an aeroplane and much of the natural gas in this country is filtered, cleaned and made pure by Pall products.”
Donegan, who is an electrical engineer, says like many of the company’s people, he happened upon the company by accident.
“I was initially a Pall customer and became fascinated by what I saw,” he tells Logistics Magazine.
When Donegan joined Pall Corporation 25 years ago, it was a small company comprising a team of five people.
“As the Australian entity grew we experienced all the trials and tribulations of a small company expanding rapidly,” he says.
“My role spanned everything including storeman and delivery driver. It was partly strategic but really it was doing all the things that a small business manager does.”
“As the business got bigger, we brought in people with more specific skills in a variety of areas to the point where, five years ago, Pall vertically integrated the worldwide business and I moved to managing one of the company’s industrial divisions,” Donegan recalls.
Pall Corporation is split predominantly into two functional areas: Pall Life Sciences and Pall Industrial.
“Our vision is to look for and engage all opportunities,” Donegan says, “As the world gets more sophisticated, products need to be purer, so filtration is a very viable business in that environment. Our market opportunities are growing faster than the company.”
In this context, Chris Donegan asserts that supply chain management is absolutely critical; second only to finding and developing customers.
“Australia is geographically the furthest point from our largest factories,” he says, “which are predominantly in the Americas, Europe, China and Japan. We only have one factory in Australia, so we are always affected by long lead times, distance and cost.
"In our early years, it was one of the hardest things I had to juggle.”
“As a young business we did not always find the right balance. We often had to air freight far too much product on an urgent basis, or found ourselves overstocked from large sea freight consignments and we were largely led by providers."
"However as we’ve become more sophisticated, we’ve been able to get the best out of the two simple modes of freight; air and sea. Finding that point has been a challenge, but I think we’re pretty close to it.”
Given Pall Corporation’ markets, and the wide variety of customer requirements and applications, the company’s Asia Supply Chain and Logistics manager Sarah White says the supply chain is extremely complex.
Tight regulations and customer expectations impact the service required from Pall’s transport and warehousing providers on a daily basis.
“In Asia, we utilise about 40,000 different SKUs and in Australia alone that’s probably around 3,000 to 4,000 separate SKUs a year,” White explains.
“Quite a large proportion of those are specific to fully meeting customers’ requirements, which we make a priority at Pall.
"We’ve got a massive diversity of applications and resources within engineering that we can call on, and we regard that level of offering as our competitive edge.
"All of that plus quite a high degree of variability within our markets creates a challenge for us in terms of how to optimise freight and the logistics, and ultimately what our delivery performance is for our end customers.”
“When we’re supplying our medical customers, certain products have limited shelf life, and must be temperature controlled,” she says by way of example, “while anything that’s going to our military customers has specific restrictions in terms of how we can import it, where it comes to and which sites have authority to be able to ship the product to our customer.”
“If we’re delivering to a mine, it’s not critical if the box is slightly dented,” she adds, “but when we’re delivering product to a hospital its appearance is extremely important. The expectation is that they’re getting something in pristine condition.”
As part of a US company, Pall is governed by Sarbanes Oxley controls within Australia. “We need to have proof of delivery from our customer before revenue can be recognised,” White says, “so business and compliance requirements impact on our supply chain and what’s necessary from our transport providers.”
“Those issues are a constant challenge because we’re always fighting to make sure that we’re controlling our costs and enhancing profitability. So in terms of the capabilities we require from our transport and logistics partners, flexibility is the major attribute.”
Sarah White says DHL Global Forwarding is Pall Corporation’s primary global partner.
“We use DHL for probably 95 per cent of our inbound freight into Australia. They take ownership from pick up at our factory through to delivery at our warehouse. We’ve developed a very close relationship with them over the year."
"DHL understands our product and the requirements of different applications and products. They also understand that there are times when we need to be flexible, when we need to move something very quickly from an ocean shipment to an unconsolidated air shipment, for example.”
According to White, Pall’s international freight relationships are more developed than those the company utilises for domestic distribution in Australia.
“In the last few years, we haven’t considered the domestic freight relationships as a potential competitive advantage for us,” she says, “however we are now in the process of looking at changing that model.
"We aim to select two or three key providers with whom we can start to develop that more collaborative relationship, because we’re constantly fighting rising costs within our business.
"We want to be able to work more closely with them and say, ‘well okay, you guys are the experts in domestic distribution, how do we optimise, still enabling our product to get to our customers in a timely, reasonable manner, and taking financial and environmental impacts into consideration?’"
For the majority of Pall Corporation products, key suppliers comprise manufacturing partners who have formed strategic relationships with the company in order to improve the overall supply chain.
While the nature of the relationship might vary depending on how critical the product, White maintains Pall works very closely with its raw material and sub component suppliers, and signs contracts with them that extend for a number of years.
“When you look at our medical or aerospace product lines, the approval of and relationships with suppliers who deliver product to enable the manufacturing process is absolutely critical,” she says.
“We expect that they meet the extremely high standards we impose on ourselves.”Sarah White describes the company’s product development and market penetration process as a ‘rolling extension to the portfolio’, as cross selling opportunities evolve.
“The key for us is to work as closely as we possibly can with the sales organisation,” she says. “Wherever possible, I encourage the supply chain team to actually go out with the sales team, visit customers, and have the opportunity to speak with the procurement people within our customers’ businesses.
"In that way, we can get a first hand understanding of what their challenges and demands might be. It’s very easy to look at numbers but you’ve got to take the human, real market side to make the figures speak.”
Like many leading organisations, Pall Corporation has also been developing a response to its environmental impact, but being in the filtration business places the company in a unique position to contribute.
“Internally we’ve got a good program,” Donegan says. “We use air travel sparingly and we recently welcomed the first hybrid cars into our motor car fleet for example. But we go the extra mile by taking green initiatives to our customers through the use of Pall products to clean and purify waste water.
"We supply our technology and products to customers to to purify put waste water back and put it back into the front end of their processes instead of down the drain. That’s about as green as you can get while manufacturing products with the use of water.”
In terms of forecasting demand, Chris Donegan says Pall’s major focus involves replicating itself in new markets and adjusting to new cultures.
“The markets are almost identical,” he observes. “But a good one to describe would be the Chinese market, which we entered more than 15 years ago. It has really started to accelerate in the last five.
"Specifically, the sectors that interest me are primary metals, automotive, mining and the pulp and paper markets. We’ve been heavily engaged with those markets elsewhere and developed high levels of expertise in them."
"We knew in advance what would be required. Ironically our customers didn’t so we’ve had to convince them and that’s very much where the effective sales and marketing is vital. "
"It wasn’t hard to roll out the back end of that process to supply products, especially as we produce many of them in Beijing, China, anyway.”
Currently, health care is one of the fastest growing market segments in Pall’s Asian business. “There’ll be a lot of money spent on health care in the future,” Donegan predicts, “and we expect to benefit from that.
"Countries like India and China are building massive infrastructure for pharmaceutical and medical facilities, so we expect this region to be a viable and fast — growing market.”
“In addition, power generation is a growth area. China is infamously known to be adding a power station a week to its grid with the associated carbon footprint.
"That brings with it opportunities for us; both in the power stations and in the clean coal technologies with which we’re heavily involved. Furthermore, our products are used extensively in the manufacture of wind turbines built in China.
"The world demand for these turbines is huge.”
While Donegan says further strategic opportunities for the company are too many to mention, he points to the ship building, beverage, and water industries as top of the agenda.
“Asia is home to the two biggest ship building countries in the world,” he asserts, “and while it’s a market to which we have a significant input, not a lot of dollars are flowing back to us.
"So we have huge opportunities there. As mentioned, we also filter a lot of beverages, predominantly beer and wine and China is a fast growing market for these beverages.”
“In addition, Australia is gripped by drought at the moment,” Donegan says. “Pall has hundreds of millions of dollars worth of opportunity not only for desalination, but also for wonderful companies that are trying to recycle their waste water in-house.
"We’re experts in that market. We also make most of the large scale military water purifiers for the Australian navy and army.
"That model can obviously be taken deeper into Asia where clean water is not very easy to get."
"It has been said that wars will be fought over water, and we’re trying to help prevent that kind of situation."
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