ABB: Changes Drive Development

ABB has a long history and a rich heritage of technology innovation. ABB and its forerunners, Asea and BBC, not only invented or pioneered many power and automation technologies, but has retained technology and market leadership in many of these areas, often for decades. Facing the uncertainties of China's economic development, where ABB will go in China?

Mr. Ilpo Ruohonen, managing director of Business Unit Control Technologies, shared his insights of ABB’s “Next Level” strategy and local operation of Business Unit Control Technologies with Mr. Li Xiaoyong, CEO of Gongkong, at the ABB Automation World 2015.

Followed the steps of the “Next Level” Program in China, focusing on smart technology, intelligent upgrading and innovation.

Although China’s economy has entered the stage of “New Normal”, from 30 years of rapid expansion to a period of medium to high speed growth. Through its “Next Level” strategy ABB has realized stable growth by seizing opportunities under China’s “New Normal” economic development. New industry emerging driven innovation will bring ABB significant opportunities in China and the key point of such opportunities is smart technology, intelligent upgrading and innovation.

“In the past three decades, ABB innovation has dramatically improved industrial productivity by expanding traditional automated control to include all plant automation functions, easily accessible in a single operations and engineering platform.” Ilpo noted.  

When ABB launched its Extended Automation System 800xA in 2004, it quickly gained widespread acceptance and won numerous awards for its ability to extend the reach of distributed control systems into a completely new dimension. Today, the latest release of 800xA version 6.0 reaches new heights of productivity, optimization, and security, not only for new projects but has been specially developed to support upgrades of older DCS systems running on unsupported operating systems such as Microsoft XP.

Ilpo pointed out that ABB will keep its steady pace of investment and provide more tailored products and solutions to support Chinese customers.

Globalization, Localization, and Specialization in ABB’s Corporate Strategy

An increasing number of technology suppliers have expanded their global manufacturing capabilities in a move to reduce production and operations costs. However, not all have made full use of local resources and technology. In contrast, ABB sets up segment centers, research institutes, production bases, and business headquarters in local markets in a manner that takes best advantage of the specific characteristics of local resources and best serves both local and global customer requirements.

For example, ABB control technology China R&D is well positioned to provide stronger support for rapid growth in the China automation industry and had developed WinCS product that acknowledges and supports local requirements for its customers.

Localization and specialization make it possible to produce products that are best suited to customer demand, shorten delivery cycles, and improve technical support and services. Using advanced technology and expertise, products developed for a specific local market can later be adapted to meet the specific requirements of other local markets around the world.

Customer-Oriented Service Increases Market Opportunities

“Service is a very important pillar of ABB's strategy going forward, and we have set very ambitious growth targets for China service business.” Ilpo stated.

We have established a huge installed base here in China, which means there are huge opportunities for maintenance, including providing spare parts and more importantly, meeting the demand and realizing the potential for upgrading. Excellent service execution will bring more repeat orders, which form an important part of our profitable growth.

Although we feel the challenge of tough markets in some sectors, by mapping service potential and footprint, we can clearly see a very big untapped service market out there. This does require us to continue investing in the service business in every aspect in order to attract new customers and continue to penetrate our installed bases. This is indeed critical to our future success, and thus should be one of our top priorities for the next step in our business expansion.

Conclusion

Gongkong believes the “Next Level” Strategy makes ABB’s structure simple, more efficient, and more market oriented. It creates significant opportunities for ABB to grow its automation business in China and elsewhere with unique offering.  

Global companies like ABB clearly contribute to the Chinese economy, particularly in high-tech industries. Chinese manufactures will surely benefit from ABB’s strategy; new product portfolio; proactive customer service model; integrated strategy of globalization, localization, and specialization;

Gongkong looks forward to following ABB’s progress in these and other areas and to seeing the results of the company’s long-anticipated move to increase its presence in the DCS market.