Interview with Virve Viitanen

Hello Virve, please introduce yourself and your role.

“As Global Head of Customer Care and Support at ABB Motion Services, I am responsible for customer support and on-demand services to customers worldwide. This includes reactive as well as preventive maintenance services, including repairs and technical support for electrical motors, drives and generators. Having spent 17 years at ABB, I have seen first hand how the industrial technology landscape has evolved and how our industry is looking at new operating models that minimise downtime and increase profits.”

What is ABB Motion Services?

“We are the servicing arm of ABB Motion, the largest supplier of electric motors and variable speed drives globally. We have manufactured and serviced motors and generators for over 130 years, and drives for more than 40 years, across a wide range of industries. As the service arm of the business, our key objective is to keep customers’ operations running profitably, safely and reliably. We create value by maximising the uptime and extending the life cycle of our customers’ electrical motion solutions, while optimising performance and energy efficiency gains across the entire lifetime of their applications.”

Tell us about the impact of downtime.

“The impact of unplanned downtime for any company is severe. According to ABB calculations, in the food and beverage sector for example, downtime can cost from between US$4,000 and US$30,000 per hour: a substantial amount when you consider that up to 12 hours can be lost in a single incident if cleanup operations are required. Paper producers, meanwhile, lose up to US$25,000 every hour when a key asset breaks down, with the steel industry averaging around US$300,000 in losses per critical machine failure. On top of the obvious direct financial costs, downtime also presents businesses with several indirect costs, like reputational damage, health and safety risks, loss of team morale and insurance premium rises.”

What is an outcome-based service model?

“Traditionally, service partners charge their customers based on labour and material costs. At best, they may specify a minimum time to fix any failures. Instead, an outcome-based service model is one that shifts the focus towards the intended outcome – such as uptime or energy savings. The service partner charges based on successful delivery of that outcome – for example, certain uptime in a given period.

“In many ways, outcome-based service models represent an insurance-style model that lowers or removes the risk of industrial operations away from the business and onto the service provider. Some early adopters see it as an opportunity to ‘climb the reliability ladder’. 

“The first step is a reactive maintenance strategy where the business takes the risk of fixing equipment only when it fails. The second step would be to have a predetermined maintenance schedule, which is referred to as a time-based or condition-based strategy. The third step is an outcome-based model where a long-term service partner guarantees an outcome, for example uptime or energy savings, lowering risk for their customers.”

What are the benefits of shifting to an outcome-based service model?

“Customers all want increased reliability of their operations and this contributes to it directly. In addition, cost effectiveness is incremental with every step – for example, a condition-based maintenance strategy, including condition-based services, provides 40% savings over a reactive maintenance strategy, according to the US Department of Energy. 

“A 2015 study on UK companies found that initial adopters of outcome-based service models have experienced significant cost reductions of 25-30%. Against a backdrop of inflation, budget squeezes, on time delivery and productivity challenges, the ability for industrial enterprises to maximise uptime by carrying out cost-effective, data-driven maintenance schedules is crucial but very beneficial.”

How do businesses get to outcome-based models?

“Digitalisation and long-term agreements are both critical if we are to progress to outcome-based service models. 

“Without connected assets, we cannot deliver outcomes. Tracking the performance of digitally connected motors and drives, for example, is enabling a shift towards predictive maintenance informed by data. Early warning signs of equipment failure – like changes in vibration, temperature, or pressure – trigger early interventions and help to prevent downtime. This approach, also known as condition-based monitoring, is helping to transform maintenance operations across a range of industrial sectors.

“Digitising equipment also enables it to be used in the most energy efficient way. For example, we are working with CERN, the world’s leading particle physics laboratory, to digitalise assets in its cooling and ventilation systems for condition monitoring purposes. Motors used to power pumps, fans, compressors and cooling towers - which account for about 20% of CERN’s energy consumption - now relay data back to remote operators for them to optimise energy usage. The aim is to achieve an improvement of up to 15% in the energy efficiency of the cooling and ventilation systems. 

Do you have any partnerships you can tell us about?

“Yes, Statkraft – Europe’s largest generator of renewable energy - recently installed two new ABB synchronous condensers in Liverpool, England. The system helps ensure that the UK grid remains stable as it integrates more variable sources of energy – like wind and solar. To ensure that this vital system is available around the clock, ABB and Statkraft entered into a 10-year service agreement that will ensure uptime by providing a full range of planned and quick response maintenance services.”