2012-01-30 - “Service is a mission-critical business. As a service provider you have to be close to the customer – in all senses of the term. You have to know the customer’s needs and respond quickly and proactively to them at all times.”
In Control spoke to Jari Kaija, head of ABB’s global service business, and Stefan Hatt, head of global service for ABB’s power generation and water business, to find out how ABB service solutions can make a difference to the performance of plant assets.
ABB has made service a strategic priority and has identified power generation and water as two of its core service businesses. Why is this and why should this be of interest to customers?
JK: ABB has a huge installed base in power generation and water. We are one of the largest OEMs in power and water, covering the entire electrical, control and instrumentation scope of supply, including design and engineering, and installation and commissioning. Up until 10 years ago we were involved in turnkey power plant building and were one of the largest in the industry. Today, we are a leading supplier of pumping stations and solar power plants. Power and water is in ABB’s DNA. Our role is to nurture this installed base on behalf of our customers.
ABB is often perceived by power and water customers as a DCS service provider only. Is this perception correct?
"We provide standard and advanced service products for all this equipment, and we specialize in using our knowledge of these technologies to maximize plant efficiency and minimize energy consumption."
Head of ABB's global service business
SH: Our commitment to our DCS installed base is indisputable. Around 7,000 power and water units worldwide have been equipped with ABB control systems over the past 30 years. DCS remains a priority, and we have demonstrated that with the global rollout this year of our new Symphony™ Plus total plant automation system. Symphony Plus is a dedicated control platform for the power and water industries, which evolves our huge installed base and is backwardly compatible with it. It is the perfect upgrade solution.
But our service activities are by no means limited to control systems. As Jari pointed out a moment ago, we have one of the largest installed fleets of electrical equipment and instrumentation in the industry – transformers, switchgear,motors, drives, generator circuit breakers, measuring instruments, and so on. We provide standard and advanced service products for all this equipment, and we specialize in using our knowledge of these technologies to maximize plant efficiency and minimize energy consumption.
Being ‘close to the customer’ is a phrase we hear all the time. What does it mean for ABB?
JK: It means many things, but primarily it means that we want the customer to find it easy to deal with ABB. We are a big company with many divisions, business units and product groups, and global and local organizations. The customer can easily go astray. That is why we have long focused on creating an efficient and direct channel between each customer and ABB so that we can learn and understand their needs, respond quickly to them, and provide them with the best service possible.
SH: Trust and competence are key requirements for the customer. They have to be able to trust their service provider and the technical skills of its service engineers. If a plant asset is not functioning optimally or standing still, it costs the customer money. Geographic proximity is also important, as the provider’s ability to respond immediately and have an engineer onsite within a couple of hours can be critical. Knowing the history of the plant and its specifics is also a key element of successful service and life cycle management. All of these points reflect the value and importance of a close relationship between customer and service provider.
Most suppliers want a long-term relationship with their customers. In what ways would a long-term relationship with ABB benefi t the customer?
SH: This is as important for the customer as it is for the service provider. In a long-term relationship both parties develop things together as partners. They get to know one another, understand one another, and trust one another. It also has a direct impact on the customer’s bottom line.
Let me give you an example. An aging generator circuit breaker developed a fault and eventually broke down at a power plant in Asia recently. Unfortunately the customer didn’t have a service agreement. We pulled out all the stops to deliver as quickly as possible the required spare parts, but it still took 14 days before the plant returned to normal.
With a service agreement, we would have performed frequent preemptive checks and installed online monitoring to minimize the risk of the fault ever developing in the first place and, we would have had the spare parts readily available in case they were ever needed.
Traditional service is by nature reactive (spare parts, repairs, training, etc). Is ABB a proactive provider of services?
"For a power or water plant, service is missioncritical. As a serviceprovider you have to be close to the plant."
Head of global service for ABB's power generation and water business
JK: Service is not just either or, it’s both. Some customers may only require spare parts, others want a deeper relationship of collaboration and partnership with a proactive service provider. ABB meets both requirements. The value for the customer of the deeper, more proactive relationship can be measured financially. There is no question about the value, for instance, of continuous upgrades. Reduced costs, fewer outages, higher availability – this is well documented in numerous white papers.
ABB has several wide-ranging product programs that provide customers with the framework for a relationship that covers the spare parts/repairs/training aspect, and the deeper proactive aspect.
For instance, for the life cycle management of process automation systems we have our software upgrade programs; for advanced support, including for the electrical systems, we have a very successful service program; and for performance-based maintenance in many industries, we have ABB Full Service®
Being proactive means developing new service products. What can we expect from ABB in the coming year?
SH: The headline news for our customers in 2011 is the global rollout of Symphony Plus – first in the Americas, then in Europe, Asia, India and China.
Simultaneously with the rollout, we began to release an extensive range of products to enable connectivity of Symphony Plus with our entire installed base.
Within the next few months we’ll be releasing a new generator control product and additional offerings for and around the generator itself. On the electrical side, we have new online remote monitoring solutions for various components, and we continue to develop new concepts that facilitate the easy replacement and upgrading of various products. And in energy efficiency, we’re releasing a complete offering that ranges from consultancy and energy audits to standard solutions that reduce plant energy consumption.
Does ABB have the capability and expertise to service non-ABB products and systems?
JK: The short answer is yes, we can service most of our competitors’ products and systems. We certainly want to increase our share of this market, but in a controlled and selective manner. Our main focus remains our own installed base, but we are always prepared to service third-party products and systems when a customer requests it and we have the capability to do it.
ABB’s competitors tend to have a centralized service organization, whereas ABB’s is decentralized. Is this a strength or a weakness?
JK: ABB is a global company, but service is a local business. For a power or water plant, service is also missioncritical – as a service-provider you have to be close to the plant. Whereas many of our competitors have chosen to centralize their service operations to a handful of hubs, ABB has chosen a different – and in our opinion – better and more customer friendly route. We combine the strengths of being a global company with a truly unrivaled global service network.
How do you see the service segment developing over the next few years? What will power generation and water customers require from their service partner?
SH: There are several trends that are already evident and which are likely to intensify in the coming years. First, customers in many parts of the world are facing the difficulty of replacing an aging workforce. They don’t always have the critical mass of a company like ABB to retain or replace the knowledge and expertise they lose when their staff retire. Second, following the boom in new power and water plants of the 1980s and 1990s, there is now a need to modernize and upgrade these plants to extend their operating life. Rarely does a company have sufficient engineering resources to perform these renewals and upgrades itself. Third, there are clear changes in consumer demands and grid requirements in many countries. Power generators are now subject to penalties for non-delivery, and consumers are demanding reliable and high-quality electricity. And fourth, customers themselves want to get the maximum performance from their as-sets and a good return on their investment. ABB is ideally resourced to help on all four counts.
How important is the human aspect in ABB’s service business?
SH: This is a vital element of ABB’s service business, and we demonstrate it by assigning each power and water customer their own ABB site representative for each plant – a single person , whose face and phone number is known to the customer and through whom they direct all their service projects and enquiries. Also, our service engineers are trained to understand that when they enter a customer’s plant, their mission is to ensure that they find the optimal solution to each case, and that their ultimate objective is to maximize the customer’s return on the plant’s assets.