MHPS Enhances Capabilities, Invests in Manufacturing Facilities, and Takes the Lead in Gas Turbine Market
LAKE MARY, FLORIDA – (August 16, 2018) It's no secret that the gas turbine market in the Americas has been tough in recent years. Across the industry, there have been reports of shrinking orders, forcing drastic measures to cut costs, including restructuring of businesses and cutting large numbers of jobs.
The story from Mitsubishi Hitachi Power Systems has been markedly different. In fact, MHPS Americas reported that it had its best financial performance ever in 2017. In addition, recent reporting from McCoy Reports shows that through the first half of 2018, MHPS is leading the gas turbine industry with #1 market share globally.
"You think about it, in a tough, tough year for our industry, we had our best year ever," said Sam Suttle, vice president of North America Manufacturing and Repair at MHPS Americas (the Lake Mary, Florida-based subsidiary of the Japanese parent company). "To me, that says we're doing some pretty good things and we're doing them right."
MHPS attributes its financial success to rapid growth of its Service business, and its market share lead has been driven by significant orders of its industry-leading JAC gas turbine. In recent years, MHPS has completed a couple of strategic acquisitions, which have added two well-established businesses to its family—Mechanical Dynamics & Analysis (MD&A) and PW Power Systems (formerly Pratt & Whitney Power Systems)—both now operate as group companies of MHPS Americas.
"As you can imagine, when you bring those types of companies together into one company, you have some synergies—you have overlap," said Suttle. "In the tough market that we're in, we needed to rationalize and optimize our manufacturing footprint. In addition, we're seeing rapid growth in our Service business as our installed base of advanced class gas turbines has grown so rapidly. So, you've got to get creative. You've got to innovate. You've got to figure out how to structure your organization in the most effective way possible and deliver to your customers. And that's exactly what we're doing."
To that end, MHPS created "Centers of Excellence" around its Americas manufacturing network. For example, Savannah Machinery Works in Savannah, Georgia, is MHPS Americas' Center of Excellence for manufacturing gas turbines and steam turbines, and is now also a Center of Excellence for the manufacture and repair of combustion components. The company's facility in Orlando, Florida, is a Center of Excellence for the manufacture and repair of gas turbine rotating and stationary hot-gas-path components.
MHPS's group company MD&A is a global business focused on providing cross-fleet service for customers looking for a non-OEM service provider. Its facility in St. Louis is a Center of Excellence for cross-fleet service of gas turbines, steam turbines, and generators. The company's San Antonio, Texas, facility is a Center of Excellence for the manufacture and repair of cross-fleet gas turbine components.
"By implementing this synergistic Centers of Excellence manufacturing network, we were able to improve our productivity and improve our cost competitiveness," Suttle said. "We've gained flexibility and responsiveness, and we're delivering what our customers need."
Suttle cited a couple of specific changes that have been implemented as part of the network optimization. In the past, he said, Savannah was manufacturing new combustor components and Orlando was performing the repair work for combustor components. Orlando's Service business had grown so rapidly that it was running out of space for expansion. However, when Savannah was established as the Center of Excellence for manufacture and repair of combustor components, the combustor repair work was moved from Orlando to Savannah. This freed up space in Orlando to accommodate increasing volumes of blade, vane, and fuel nozzle repair, and also other hot-gas-path parts for PW Power Systems and MD&A. Another example of the Center of Excellence changes is that Savannah will assemble aero-derivative power turbines and provide service support for FT4000 aero-derivative gas turbines from PW Power Systems.
"The key thing for our customers to know is that our Centers of Excellence optimization will provide comprehensive manufacturing and repair capabilities in the Americas that is more cost-effective and more responsive, while maintaining our industry-leading reputation for quality products and services," said Suttle.