ABB conference highlights economics, services, and R&D

Automation & Power World event confronts economic issues
By Plant Engineering Staff April 2, 2009

ABB combined its two annual events, Automation World and Power World, into one event in Orlando this year (March 24-26, 2009) to underscore a growing interest in the integration of applications for related technologies in the manufacturing and power generation/distribution industries.

Economic conditions are a key factor driving this interest in combined technologies. As noted by ABB CEO Joseph Hogan, “This recession is far different from any recent downturns in that it marks the first time in recent history when all world economies are cycling downward together.”

Hogan added that he does not think the negativism associated with current downturn is any more accurate than the euphoria that surrounded the market upswings in 2006-2007.

“Once the banking system is stabilized, growth will return,” he says. “And that means there will be a lot of opportunity moving forward and a resumption of the rising demand for energy worldwide.”

According to Hogan, ABB is not reducing its R&D budget this year, despite the company’s recent $1.3 billion reduction in expenses. He noted that about 50% of the company’s R&D budget is focused on energy savings, largely related to drives and motors and electricity transmission.

He also pointed out that, although interest in robotics overall is down somewhat due to current economic conditions affecting the automotive markets, robotics is receiving increased interest from other industries, particularly food & beverage.

Receiving a nearly equal focus with technology products, ABB spotlighted its services offerings during the Automation & Power World event. One of its newest services offerings comes via its recently assembled Stimulus Package Core Team. This team is in regular contact with the U.S. government to better understand how money will be dispersed via the stimulus package to help customers better understand how to take advantage of the funds being made available.

A fast-growing global service area for ABB is its Full Service Maintenance program. Starting in North American in 2004, this program assumes all maintenance and production operations functions for a company. In effect, all maintenance and operations engineers are outsourced to ABB (they become ABB employees), which then assumes responsibility for these functions.

“We contractually commit to improving performance,” says Daniel Konstantinovsky, ABB Reliability Services marketing consultant. “This includes availability, quality, OEE, and maintenance.”

Under the 5-year agreement, ABB shares in the profits if goals are exceeded and gives money back if goals are not met. “We have skin in the game,” says Konstantinovsky. He adds that ABB has made 150 such agreements worldwide. Most of these agreements have been in the pulp & paper and mining industries, but ABB is now taking this business model into the discrete industries.

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