The way the engineering industry operates was changing long before the pandemic hit.
At ABB Motion Services, a supplier of electric variable speed drives and motors with more than 3,000 employees globally, division president Adrian Guggisberg is seeing a greater willingness to share data, and a move towards a business model based on outcomes, where companies look to avoid risk by paying their suppliers not for individual products, but for uptime – with maintenance included.
What are the core activities of your organisation?
ABB’s Motion business is the largest supplier of electric variable speed drives and motors, globally. We provide customers with the complete range of electrical motors, generators, drives and services, as well as mechanical power transmission products, traction converters and integrated digital powertrain solutions. We serve a wide range of automation applications in transportation, infrastructure and the discrete and process industries.
In your role at ABB Motion Services, what are your key managerial responsibilities?
I am responsible for a service business that supports ABB Motion’s customers operating in a wide range of industries in more than 70 countries. We provide everything from cloud-based condition monitoring to spare parts. This entails managing a team of well over 3,000 people, including some 1,700 field service engineers supported by 50 service workshops. We also work with around 600 service partners.
What is the current condition of the market?
Customers need to keep their industrial operations running safely, reliably and profitably. However, it has been a challenge for both our customers and our teams to carry out their usual service and maintenance operations during the Covid-19 lockdowns, especially with travel restrictions and social distancing. That has prompted us to find innovative ways to maintain business continuity during the lockdowns and as we move forward in the ‘new normal’. One approach that has resonated particularly with customers is how we can adapt and translate our service offering to provide remote services, such as installing, commissioning and maintaining equipment without having our engineers on site.
What do you think has changed in your industry the most in the past months?
One of the most important changes has been a new openness in terms of customers making their data more accessible to us. Connectivity is crucial for us to provide remote services using evolving digital solutions. Yet, in the past, some industries – such as oil and gas – have rightly been very wary about cyber security and preserving the privacy of data from their assets. In the new normal, there is a growing realisation that some level of data will have to be shared with trusted partners for them to be able to stay in business and gain the advantage of digitalisation.
Adrian Guggisberg, division president of ABB Motion Services
What are the long-term trends for your business?
One of the biggest changes will be the move away from the traditional business model for services in which we are paid for the material and work we provide. Instead, the business model will be based on outcomes. Rather than the focus being on how quickly we can get people to site and how long it takes to find a solution, it will be about avoiding risk. For example, customers might pay us to ensure a guaranteed level of production availability.
Whatever happens, customers will always be at the heart of a service business. But they might be a new type of customer, such as insurance companies and investment funds within a new ecosystem. So we could see the installation of a highly energy-efficient motion solution, financed by a pension fund, operated by an industrial group and with ABB ensuring that it meets its performance and reliability targets.
As part of the growth in digital technology, we also expect to see even more developments in augmented reality and virtual reality that will enable service engineers to have an effective telepresence.
How do you think management styles and strategies are evolving today?
I think the number-one factor for all businesses like us is that we need to be much faster in the way that we respond to changing market conditions. There used to be a trend for rigid five-year plans. That just doesn’t work any more. We need to be agile. It is still vital to have an overall direction of travel. But we need to be checking in over very short cycles to ensure it still makes sense.
Speed and agility can only be achieved by empowering people. At senior management level we need to give direction so that everyone understands the big picture. But every team member has to feel empowered to make the right decisions to fit that picture.
What is the single biggest opportunity globally for you at the moment?
Currently our most significant opportunities are in helping customers working under current restrictions to keep their operations running safely, reliably and profitably. We can do this most effectively through our digital offering that is the key enabler for remote service support – as well as using digital solutions to minimise the risk of emergency situations.
Improving energy efficiency is also a massive opportunity. For example, electric motors might be uprated to the highest efficiency levels. Or deploying variable speed drives that can typically boost energy efficiency by 30% to 50%.
Payback periods for energy-efficiency improvements can be as short as one to two years. Sometimes they might be five years, which is a much harder sell. But, with the potential involvement of insurance companies and pension funds who have a much longer investment horizon, a five-year payback becomes much less of a barrier.
What will your organisation look like in a decade’s time?
Things are moving so fast in this business that I cannot tell you what our organisation will look like in 10 years. But what I can say is that we will certainly be adjusting to new business needs, pioneering new technologies and performing as a reliable service partner for our customers.
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Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.