Maintenance as Service Business Maintenance as Service Business Industrial Viewpoint ABB Group September 1, 2011 | Ver. 1.1 Slide 1 Table of Contents What is Industrial Maintenance Service? Maintenance Service keep cost focus but get back to production factors Outsourcing evolving in industrial maintenance What is general and what is industry specific g y p Structuring maintenance services industrial viewpoint Industy specific maintenance offering an example Summary ABB Group September 1, 2011 | Ver. 1.1 Slide 3 ABB Group September 1, 2011 | Slide 3 What is Industrial Maintenance Service? Industrial maintenance usually Industrial maintenance usually refers to the repair and upkeep of the total industrial plant consisting of different types of equipment of different types of equipment, machines and technology used for production. According to this wide variety of different kind of technology and equipment, industrial maintenance t h i i d t b lti technicians need to be multi- skilled individuals, proficient in many tasks and to know the facility and process that they are facility and process that they are maintaining extremely well. ABB Group September 1, 2011 | Ver. 1.1 Slide 4 Key Objectives of Asset Performance Management Smart Information Asset Performance Operations Mainten- Manage Improve Asset ance Improve Asset g Critical Issues and Constraints Asset Utilization Asset Availability Sustainability Stewardship ABB Group September 1, 2011 | Ver. 1.1 Slide 5 Source: Asset Performance Management for Process Industries ARC Strategies, August 2010 What drives our businesses? Industrial manufacturing, Capex, commodity production Forecast suggests industrial production World GDP and industrial production growth Source: Global Insight; Nov 2010 GDP Industrial Forecast p growth will decelerate towards next year. Commodity prices ti dth i d 2 4 6 10 20 30 GDP growth % World GDP production growth % Industrial production China continued their upward trend, but still are below pre-crisis level. Oil price (WTI) averaged 4 -2 0 2 20 -10 0 10 Industrial production US Industrial production Eurozone p ( ) g $80 a barrel during last 3 months; growth reflected renewed investor appetite for risk, consumption rise, -4 -20 0 8 Q 1 0 8 Q 2 0 8 Q 3 0 8 Q 4 0 9 Q 1 0 9 Q 2 0 9 Q 3 0 9 Q 4 1 0 Q 1 1 0 Q 2 1 0 Q 3 1 0 Q 4 1 1 Q 1 1 1 Q 2 1 1 Q 3 1 1 Q 4 Commodity prices indexed, Jul08=100; source: GF-SCM; LME; EIA; MetalBulletin; Nov 2010 , p , weakness of US dollar. Copper price has nearly reached pre-crisis level, drivenby fiscal stimulus 75 100 125 Iron Ore Aluminum Copper Pre-crisis level driven by fiscal stimulus measures and restocking; China and emerging Asia mainly driving the growth. 25 50 75 0 8 t 0 8 0 9 r 0 9 0 9 t 0 9 1 0 r 1 0 1 0 t 1 0 Steel Crude oil (WTI) ABB Group September 1, 2011 | Ver. 1.1 Slide 6 ABB Group September 1, 2011 | Slide 6 J u l O c t J a n A p r J u l O c t J a n A p r J u l O c t The focus - Primary Drivers for maintenance Management Management ABB Group September 1, 2011 | Ver. 1.1 Slide 7 Outsourcing evolving in industrial maintenance Today more and more of the common coals for industrial maintenance, coals for industrial maintenance, increasing efficiency, cutting costs and extending the life time of production assets, are being received by maintenance outsourcing ABB Group September 1, 2011 | Ver. 1.1 Slide 8 Outsourcing evolving in industrial maintenance The cost of Industrial Maintenance in Europe will be growing 1,5% per annum until 2015. Mainentenance outsourcing is estimated to increase from the rate of 36% (2007) to 60% by the year 2015 ABB Group September 1, 2011 | Ver. 1.1 Slide 9 Source: FIM Studie AlixPartners 2008 rate of 36% (2007) to 60% by the year 2015 Business Models of Industrial Maintenance Service Maintenance providers critical task is to select the business model and balance between: 1 Customers maintenance strategy 1. Customers maintenance strategy 2. Maintenance providers own strategy Service providers business model depends on: Service providers business model depends on: 1. Industrial technological and system know-how 2. Industry process know-how 3 Size and resources 3. Size and resources 4. Own background E.g. ABB Industrial Service main categories Life-cycle services Consulting services Consulting services ABB Full Service ABB Group September 1, 2011 | Ver. 1.1 Slide 10 Example of maintenance Offering ABB Full ServiceValue Proposition Core Features: ABB Full ServiceValue Proposition Provenwith 300+ Core Features: 1. Complying with HSE regulations at minimum 2 I i l t d Proven with 300+ completed agreements worldwide Revenues 2009 over 1BUSD Energy Cost Savings Indirect Benefits n e f i t s Energy Cost Savings Indirect Benefits n e f i t s 2. Improving plant and financial performance 3. Managing maintenance with a business mindset over 1 BUSD 5,500+direct service professionals Delivery in more th 20 t i Maintenance Plant Performance Benefits S a v i n g s
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B e n Maintenance Plant Performance Benefits S a v i n g s
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B e n with a business mindset 4. Increasing reliability and life-time of process equipment Globally supported l t f than 20 countries Maintenance Cost Savings Year 1 Year 2 Year 3 Year 4 Year 5 Maintenance Cost Savings Year 1 Year 2 Year 3 Year 4 Year 5 equp e t 5. Managing change and creating a service culture 6 Giving access to resources long-term, performance- based agreements in which ABB commits to maintain and improve the production and equipment 6. Giving access to resources and knowledge of ABBs global network production and equipment performance, energy efficiency and reliability for an entire facility with agreed cost base ABB Group September 1, 2011 | Ver. 1.1 Slide 11 ABB Group September 1, 2011 | Ver. 1.1 Slide 11 agreed cost base What is general and what is industry specific 70% of all maintenance is seen as common practices in all industries Th t i i d t ifi f l i P l & P I d t The rest is industry specific as for example in Pulp & Paper Industry: Safety at work Process knowledge, Trouble shooting, Optimization g g Quality requirements for the final product for customers Material technology especially in pulp mill equipment R ll S i d i di Roll Service and grinding Quality Control System Service Web Inspection System Service Men M t i l C t Drives Hydraulics C diti it i Input Output Material Machine Method Cost Quality Delivery Condition monitoring Lubrication Industry -specific 15% 15% 70% Common Practices Site-specific ABB Group September 1, 2011 | Ver. 1.1 Slide 12 Industry specific Common Practices Site specific Structuring maintenance services industrial viewpoint Most maintenance management and Most maintenance management and organization models are structured according to the production processes of the industry In Pulp and Paper the structure usually separates the different departments like pulp production, power plant, paper machines and p p , p p converting as their own maintenance areas. That is because of the complexity of the mills and machinery in different areas even in the same Men in different areas even in the same industry. In addition to these there usually is a common services department which is Input Output Men Material Machine Method Cost Quality Delivery getting smaller and smaller as these services are today done more by local subcontractors. Input Output 15% 15% 70% ABB Group September 1, 2011 | Ver. 1.1 Slide 13 Industry -specific Common Practices Site-specific Industrial maintenance offering an example Roll Service Service Paper quality depends on several issues like the raw materials, the mixture of them, the short circulation and after that the head box and the former of the paper machine. All these are crucial for the final paper quality and the mistakes taken p p q y in these phases are impossible to correct later in the process. After these the quality is made or totally destroyed b th ll i th hi ti hi by the rolls in the paper machine, coating machine or calanders. It requires a lot of know how and experience to know when each roll in its own position is good enough to perform its own task in th S ll j t t l d th the process. Some rolls are just to lead the paper into the next phases of the process but most of them are doing something for the profile or the surface of the paper - the quality. A roll maintained and service to a right quality at a right way and equipment at the right time will ensure a the quality of the paper. ABB Group September 1, 2011 | Ver. 1.1 Slide 14 Industrial maintenance offering an example of Special Services to Support Maintenance Agreement 24/7 Support Preventive Theoretical production time 24/7 Support maintenance Service Spare check Planned production time Non- production time Drives Runnability+ Remote control Gross operating time Availability losses Equipment & process failures Planned shuts and set-up& adjustments Drives O ti i ti Runnability+ Loop Performance Net operating time Speed losses Reduced speed Idling and minor stoppages Optimization WIS Site survey QCS Valuable operating time Quality losses Defects in process Start-up losses Process bili Analysis Trim audits E t Process Optimizer stability Audit OEE Online measurement ABB Group September 1, 2011 | Ver. 1.1 Slide 15 Energy mgmt & optimization Summary Down-turn has clearly affected to development of maintenance k t market. Indication that outsourcing trend will continue Each industry sector have and they need to have their own Each industry sector have and they need to have their own specialists support We need constantly new ideas and innovations on how to keep continuouslyimproving our own behaviour and way of working continuously improving our own behaviour and way of working. Best and most remarkable renewals and new ideas for improvement come from an industry or business outside of your own own. ABB Full Service is focusing on several, but carefully selected, industry areas, Pulp & Paper, Oil & Gas, Metals and Minerals h i th t i df th i d t ifi i having the competence required for the industry specific issues as well as the variety of overall maintenance similar to all industries. ABB Group September 1, 2011 | Ver. 1.1 Slide 17 Summary An Industrial Maintenance Provider has to have the capability, know-how, recourses, partners and network to manage and execute all maintenance activities in the entire plant. p ABB Group September 1, 2011 | Ver. 1.1 Slide 18 ABB Group September 1, 2011 | Ver. 1.1 Slide 19