ARC takes brief look ABB Performance Services

Dec 02, 2004

ABB has a large global professional service staff that offers a broad spectrum of asset management services, which fall into two general categories: Product & System Services, and Performance Services. The first category focuses primarily on their installed base of products such as drives, motors, analyzers, etc., and systems such as DCS, QCS, etc. with the intention of increasing their lifecycle benefits. These services are similar to those offered by most suppliers and include process consulting, small projects and upgrades, spare parts, field services, training, and remote services. ABB recently briefed ARC on the second category, Performance Services, which focus on helping their clients extract greater value from their production assets.

ABB Performance Services centers on maintenance of assets to ensure high reliability and availability. ABB Performance Services extend their automation technology products and solutions with a range of results-oriented asset management services intended to create measurable and sustainable benefits for their customers in both the process and discrete industries. With Performance Services, ABB assumes performance risk by basing part of their compensation upon achieving a certain level of performance.
ABB offers a portfolio of four Performance Services intended to provide a range of performance improvement opportunities. ABB’s ability to drive performance increases from its Consulting Service to its Equipment Performance Management Service, ABB Full Service, and Automation Performance Management Service.

ABB’s Consulting includes site assessments, industry performance benchmarking, and best practice management. Their main areas of expertise consist of reliability driven maintenance practices, process automation and engineering project services, HS&E practices, and risk based inspections. Their Equipment Performance Management Service maintains the performance of a specific class of assets such as motors, drives, pumps, and analyzers by providing all maintenance and support required to meet operating targets. This service guarantees asset availability through a performance-based contract.

ABB Full Service is an outsourcing maintenance contract whereby ABB assumes responsibility for engineering, planning, execution, and management of their customer’s maintenance activities. ABB works with their client to develop a maintenance strategy based upon production performance objectives. More than 150 sites are using ABB Full Service. The Automation Performance Management Service is a performance and usage agreement that provides automation at a sustained level. This service essentially delivers automation as a utility and requires no capital expenditure on the part of the user. The service focuses on business results and ABB’s compensation is tied to asset performance and usage.

ABB possesses a wide-range of expertise in asset management and is in a strong position to offer outsourcing opportunities to process manufacturers, but they are not without challenges. One of their major challenges will be to create strong brand recognition to penetrate the North American market. In addition, many companies do not fully appreciate the benefits of having a world-class maintenance program, let alone an outsourced one. ABB will need to elucidate potential users of the cost savings and performance improvements provided by their services along with the benefits it provides by allowing the reallocation and redeployment of scarce resources to areas of core competencies that provide competitive advantage.