Asea Brown Boveri used to be a big engineering, contracting and manufacturing conglomerate, with activities ranging from building and operating power stations to manufacturing trains. Today the company – formed in 1988 from the acquisition by Swedish company Asea of Brown Boveri of Switzerland – is known simply as ABB and is altogether more high tech. It is still engaged in just about every industry conceivable, only now it is nearer to a technical service company than a manufacturing one. In the crane industry, for example, ABB seeks not just to sell drives and controls from a company store, but to work with clients on total systems solutions.
This does not really make it any different from its competitors like Siemens, GEC and Cutler Hammer, which all seek to offer the same sort of complete service.
What distinguishes ABB – or so the company believes – is a new organisational structure implemented in the first half of this year. And with this, it is seeking to portray a new image under the slogan ‘brain power’.
ABB is a large organisation. It had $23bn of revenues in 2000 and today has more than 160,000 employees in about 100 countries.
The new organisational structure was announced at the beginning of the year. More recently, in July, ABB was in the headlines of the financial press when it announced its results for the first half of 2001. Though it continues to be a profitable corporation, its earnings before interest and tax had stumbled significantly below expectation, falling 21% to $626m. In response to the slowdown ABB said it would cut 12,000 jobs – 8% of its workforce – over the next 18 months. This will reduce costs by $500m a year, according to the company.
With market conditions becoming tougher for engineering companies, much depends on the success of the new structure in improving the agility and responsiveness of the corporation.
If it fails, financial analysts and commentators will doubtless be lining up to suggest that ABB needs to be less diversified and more focused on selected core businesses.
Previously the company was divided into some 58 separate companies, based on product offerings. Now the company is organised around four customer groups: utilities; process industries, manufacturing and consumer industries; and oil, gas and petrochemicals. The thinking is that by focusing on customers, ABB becomes more fully a systems solution provider rather than a hardware vendor.
The statement announcing the reform contained more than its fair share of hyperbole about being able to deliver mass customisation. Jörgen Centerman, who took over as ABB president and chief executive officer on 1 January this year, said: “The new structure allows us to grow faster by more easily delivering value to our customers. We are responding to a silent revolution in the market that is completely changing the business landscape.
“Faced with increasing complexity and speed – much of it driven by the internet – our customers want clarity and simplicity. Our new structure will make us easier to do business with and fully reflects our new vision of creating value and fuelling growth by helping our customers become more competitive. Instead of the mass marketing of the past, the internet allows us to interact with our customers one-on-one and deliver customised information, products and services on a massive scale.”
Behind this lies a simpler truth. Under the old structure, ABB was so big that sales opportunities were being missed. Customers may have been pushed from pillar to post around the organisation till they had located the relevant product managers. Now there is a new front line coming into place to offer customers a single interface.
Instead of multiple ABB product units serving the same customer, often working with different terms and conditions, customers will be served by dedicated units representing ABB’s total offering of products, systems, services and solutions. Stripping this down to the most basic level, what it means is when a customer rings up he is no longer told: “We can do that bit, but for the other stuff you need to ring this number and ask for Sven.” Now he is told: “Certainly, sir. We can do all that.” And Lars who answered the phone rings Sven himself. It is basic customer service, really, but the impact on ABB’s business could be huge.
This way, ABB can maximise the number of products and services it sells to each customer.
“Our number one growth opportunity lies in our existing customer base,” Centerman has said. “Today some 30% of ABB’s annual sales come from our 200 top customers alone. So far, they have mostly been sold only one line of ABB’s products. With our new structure, they will have easy access to our entire range. And even small increases in sales to these customers would mean substantial growth in volumes, margins and cash flow.”
It is still not necessarily always straightforward to locate the right department within such a huge organisation, where different offices serve different industries with different products, and the reorganisation is a gradual process. Improvement is promised, however.
ABB in crane systems
ABB claims to have been the market leader in the field of automation systems for grab cranes since 1983 and to be the only company to have supplied unmanned container cranes. It supplies electrical and automation equipment for controlling the motions of container cranes, ship unloaders, and industrial cranes. Working either through crane builders or direct to the end customer, it offers solutions based on combinations of drive, automation and information systems.
References include: automation equipment for 39 unmanned cranes for the Port of Singapore; drive and control equipment for the new container cranes in the Port of Gothenburg, Sweden; electrical equipment for two large grab cranes for the Majishan Terminal in Shanghai, China; and drive and control equipment for a teeming crane for British Steel (now Corus) in Scunthorpe, England.
In Singapore, the main challenge was to get an exact measurement of the positions of the crane, trolley and spreader in relation to the surroundings. The crane on its own had to be capable of ‘seeing’ the container stacks and the corners of the container to be moved and precisely placing the 40t containers suspended from 30m-long swaying ropes.
The existing drive and control systems were given a new target position sensor (TPS) based on a laser range-finder. With this concept two laser transmitters are installed, with one on each side of the crane trolley. The laser beams from each transmitter are directed towards the target with the help of two movable servo-driven mirrors, which are controlled with precision and speed. An ABB Advant computer then processes the data and the information from the laser range-finders up in the crane. This creates a picture of permanent objects in the surroundings with an accuracy of a few millimetres.
The volume of information obtained is enormous. The task of developing the software needed to process and interpret the information was one of the toughest parts of the product development.
The crane works by receiving job orders from the terminal’s administrative computer system to move a particular container from one position to another. In the first place the crane follows the positioning data from the motors’ pulse transmitters in the normal control and drive systems, while the laser range-finders continuously check the surroundings with greater precision.
While the crane is moving, the laser transmitter at the front checks the location of the load, making sure that there are no obstructions along the route and that the containers are correctly positioned at the spot where the load is to be dropped. The laser transmitter at the back checks the stacks more accurately, reporting any deviations to the administrative computer.
When the crane stops, both cameras focus on the target below, where the container is to be dropped or a new one is to be picked. The spreader targets the container with a precision of within 50mm and maintains a distance of 500mm to the next container during a lift of up to 30m.
The same technology is also to be used at Container Terminal Altenwerder (CTA) in Hamburg, where ABB is supplying electrical and automation packages for 22 unmanned stacking cranes.
With a capacity of 1.4m containers a year, the terminal will be one of the biggest in Europe when the first phase is completed next year.
“Automatic, unmanned stacking cranes being the most efficient and environmentally friendly solution to container storage handling, will rapidly become the first choice for modern container terminals,” says Stefan Stockhaus, president of ABB Automation Systems AB.
