Australia has long been viewed as a high-cost country for manufacturing, and as such, power and automation company ABB has used its global reach to its advantage. Energy Source and Distribution catches up with ABB Australia country manager Axel Kuhr to hear how technicians in emerging economies are being upskilled to develop world-class transformers for the Australasian region.
Globally, ABB is moving towards three increasingly self-sufficient trading zones, one of which is the Australasian region. The ‘Asia for Asia’ strategy is about building more capability and co-operation in Asia to support customers in neighbouring regions including Australia, New Zealand, the Pacific Islands and Indo-China.
For ABB Australia country manager Axel Kuhr, ‘Asia for Asia’ combines the benefits of a global economy with the advantages of keeping capacity close to markets.
“Our customers in Australia still want to deal with local companies and be provided with local content. This way, they get world-class technology at a competitive price that is delivered, serviced and often designed by a local team of experts who know the Australian market,” he said.
Although acknowledging ‘competitive’ doesn’t always denote ‘cheap’, Axel says the strategy does deliver great value-for-money.
“By building manufacturing capacity in emerging economies within the region, while at the same time maintaining strong local organisations, ABB is able to maintain the balance between advanced technology and the need to supply a competitively priced produced to the market,” Mr Kuhr said.
What’s more, ‘Asia for Asia’ works to maximise the potential of organisations in emerging economies so the operations not only remain sustainable, but also raise workplace health and safety and remuneration standards for employees.
“We needed to build a sustainable improvement and we simply couldn’t do this with a ‘fly-in fly-out approach,” Axel said.
“Of course our global experts did assist with specific details around factory investment, technology and training program development, but the main thrust of the training came from trained-up local management, who brought their own strengths and attributes essential for the development.
“The next step was to develop the subsequent management level so they, in turn, coached their peers and subordinates. This is what reinforces a sustainable sense of ownership of quality issues within the local team.”
Case Study: Hanoi power transformer factory
ABB’s power transformer factory in Hanoi, Vietnam, is a good example of how the ‘Asia for Asia’ strategy has the ability to both improve local competence and manufacturing processes. The factory, which manufactures a wide range of transformers with capacity to 63 MVA and voltage to 172kV, exports more than 30 per cent of its power transformers into the Australian market.
Four years ago, the factory was underperforming. While the technology was world-class, it became apparent certain processes and behaviours needed closer scrutiny – particularly those relating to testing regimes, layout and inventory management and the protection and handling of product. In response, ABB Vietnam, in collaboration with teams from Australia and across the globe, took a holistic approach to quality control.
At stake was ABB’s reputation and the status of the Vietnamese factory as a first-rate facility. The ensuing transformation was a result of a three-pronged strategy: Strengthening management; investing in the factory; and instilling a culture of delivery excellence and strict conforming to specifications. These three aspects were systematically scrutinised and subsequently amended.
Introducing more environmentally friendly products
Improvements to the factory in the last three years have included more rigorous testing regimes, improved layout and inventory management and better protection and handling of product. The factory also improved damage and corrosion prevention and installed a new state-of-the-art painting booth and paint system to improve the quality and longevity of the transformers, while providing a safe environment for employees and the community.
ABB Australia market manager for transformers Julian Guild said replacing solvent-based paint used on transformer tanks with high-solid paints has significantly reduced emissions of volatile organic compounds (VOCs).
“Conventional solvent-based paints emit toxic VOCs as vapour, which react with other pollutants and sunlight to produce harmful ground-level ozone and smog,” he said.
The factory is also working with other environmentally friendly materials such as ABB’s patented Biotemp dielectric insulating fluid; biodegradable vegetable oil that delivers high-performance power transformer insulation.
Remote monitoring of transformer testing
Another innovative element of the Hanoi transformer factory that brings the local/global paradigm closer together, is the ability for customers in Australia – and anywhere in the world – to view their transformer being built and tested on the factory floor.
Using web-based technology, customers and ABB experts from Australia and Vietnam can review the progress of their product in a confidential environment. A mobile customer-controlled wi-fi camera allows the customer to view their transformer being manufactured and to witness tests including live data acquisition.
Only recently developed, Axel says this system has been particularly well-received by customers facing restrictions on travel and time, as well as those driven by cost or policy.
“We welcome the opportunity for our customers to come into our factory and see for themselves the change we have achieved. However this is often simply not possible,” he said.
“Using the web-based system, we bring the factory the factory right into our customers’ office, or even to their mobile device if they are on the road.”
While the factory improvements were in full swing, ABB Vietnam also needed to look at the behavioural aspects of its employees. In 2010, management embarked on an employee cultural change program to improve product quality output and worker occupational safety.
After extensive coaching and training, ABB Vietnam general manager Jan-Peder Dareus said he observed a significant change in behaviour by 2012, which underpinned major product quality improvements.
“The proof of these improvements could be seen in the lost time injury rates, which reduced from 1/3 (per 200,000 worked hours) in 2009, down to 0.2 by the end of 2012.”
These improvements also garnered the Vietnam factory all-important engineering excellence accreditation for its testing facilities (ISO/IEC 1702:2005 and IS9001) in late 2012. Between 2012 and 2013, ABB in Vietnam will spend an additional US$1 million on these facilities.
Today, the ABB Australia team continues to work closely with the ABB Vietnam factory to deliver world-class transformers that are specifically engineered and designed to meet the demands of the Australian market.
“While the end product may be manufactured in Vietnam, the power transformers being developed for the Australian market are very much a product of the collaboration between our two countries,” Mr Guild said.
“Design work to meet local requirements is still carried out in Australia and we take a very local approach to service, support and engineering.”
For Axel, this presents a win-win outcome for ABB, their customers and the region in which the development is located.
“Customers win because ABB develops capacity in the region closer to our customers here. This provides the industrial strength required to respond to any demand at any time. ABB wins because we develop volume and continue to grow in a sustainable way.
“And the region wins because of the contribution to economic growth, which is substantial because ABB is really setting benchmarks for health and safety, and remuneration standards for employees which in turn contributes to rising living standards,” he said.
“The Vietnam transformer factory turnaround is a testament to the co-operation and collaboration between neighbouring countries and global experts.”