As an integrated business unit, we can act much more swiftly and nimbly to connect customer needs to operational requirements.
Danny Fitzgibbons
Vice President and General Manager, Agronomic IQ
Segment For Greater Efficiency
Dehumidified Air Solutions (DAS) is home to the industry’s most respected HVAC semi-custom dehumidification brands, including Dectron, PoolPak, Seresco Dehumidifiers, Agronomic IQ (Ag), and Dehumidified Air Services. These brands create optimal indoor air quality (IAQ) conditions through temperature and humidity control.
Segmentation
Two rounds of segmentation created distinct, site-specific lines of business that have allowed each business to focus more and be more responsive to customer needs.
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Danny Fitzgibbons, VP and GM, Agronomic IQ: [email protected]
Goal
DAS had two distinct businesses across three locations that, despite similar product architecture, had very different customer needs and expectations, market growth trajectories, and commercial support requirements. There were two sales groups (Quest and Agronomic IQ), with the Ag group spanning two Madison operating companies (Therma-Stor and DAS). They relied on a centralized DAS support structure spanning numerous departments, from engineering to finance to supply chain. Unfortunately, this model had several challenges, including unfocused support functions, product development/specification complexity, and customer service issues.
Process
DAS created a DAS Ag commercial group (separate from both pools and the Therma-Stor Ag group) and a distinct Pools commercial group during its initial segmentation. DAS also segmented engineering within each group.
Customer requirements within DAS Ag proved to be distinct, and as a result, the DAS Ag channel structure and the brand were revised to better reach customers. Deploying a more focused target selling approach yielded a reexamination of DAS Ag’s priority audience (e.g., cultivating relationships with engineers and specifiers in addition to end-users).
The enhanced commercial focus moved the business forward, but internal communication challenges and lack of clarity around priorities persisted with a large, shared operations structure. Product line simplification had the potential for significant downstream benefits, particularly in a supply-chain-constrained environment. Additionally, the product architecture had become increasingly distinct between the two DAS groups, presenting different operations requirements. A second round of segmentation commenced, creating two site-specific operations groups to support each segment.
Results
With the newly formed operations group, DAS experienced a significant change in responsiveness and ownership. In addition, it improved its ability to dynamically schedule production, which is increasingly important in a world where construction projects are encountering delays and scope changes. Thanks to a more focused, repeatable production process, DAS Ag projected a significant reduction in unit cycle time. The early stages of its initial build have yielded positive outcomes. The company also anticipates a higher degree of inventory turns with a simplified set of components and repeatable build models.
Key Learnings
- As an integrated business unit, we can act much more swiftly and nimbly to connect customer needs to operational requirements.
- We didn’t have enough confidence in the sustainability of the Ag market’s growth trajectory at the outset of this process to “take the bet.” But the market has continued to grow to a point where our operational segmentation exercise catalyzed the change required to accommodate the growth.