Case Study: ABB vs$.$ COSCO

ABB

ABB Turbo Systems ABB Turbo Systems Ltd$.,$ part of the ABB Group, is the global market leader for turbo$-$charging diesel and gas

engines in the over$-500$ kW power range. Over $180,000$ ABB turbochargers are used worldwide on ships $($representing $62$ percent

market share$),$ in power stations, on locomotives, and on heavy$-$duty vehicles in the construction and mining industries. The company

generates about half of its revenues from selling and servicing turbochargers. Although the products have a service life of up to $20$

years, they also contain parts that are subject to wear and tear and that have to be replaced on a regular basis. Some customers

requiring service tasks are shipping companies. Since these companies want to spend as little time servicing turbochargers as possible,

ABB Turbo Systems has over $100$ service stations worldwide to take care of the maintenance process for the ship owners. If its

turbocharger fails, the diesel engine on a ship can generate just $25$ percent of its usual power. Most ship owners base their selection

of a turbocharger supplier partly on the available servicing options. ABB Turbo Systems$$ global network of service stations, with

Page $|13$

access to the same product and customer data in Switzerland, guarantees a service within $48$ hours, regardless of location. The head

office of ABB Turbo Systems looks upon the service stations that control the $$turbocharger service$$ process as the actual

$$customers$.$ ABB Turbo Systems provides support to the service stations via a service portal. ATURB@WEB stores the configuration

of the different turbochargers in a database and triggers the maintenance process on the basis of defined service cycles. For this,

service stations use a tool called the $$Maintenance Scheduler.$$ It summarizes the maintenance data so that sales and service staff can

alert customers to convenient maintenance times, or$,$ if maintenance periods have elapsed, approach customers to discuss servicing

issues. If a turbocharger develops problems or if the company knows that a ship is going to call at a port with a service station, the

ATURB@WEB service portal provides the service employee with the ship$$s turbocharger configuration, including any modifications

from previous service visits and helps them with the selection of spare parts. Finally, the employee can use ATURB@WEB to check

the availability and storage location of parts and create the actual order. In addition, the portal provides service technicians with

technical drawings and assembly instructions, helps them document any work that has been carried out, initiates the invoicing

process, and enables communication between the service stations. ABB Turbo Systems does not rely solely on the information it

gathers in house$$turbocharger configurations, assembly instructions, customer histories$$but also incorporates external services,

such as an insurance database from Lloyd$$s ship insurers, which uniquely identifies every ship by its policy number even if its name

changes. Since Lloyd$$s insures almost every commercial ship, every account manager at ABB Turbo Systems receives an indication of

how many ships have been fitted with ABB turbochargers by the ship owners they advise. Until the $1990$s$,$ mainframe computer

technology and transmission costs prevented the development of a solution with such capabilities. It was not until the arrival of the

Internet that the services described here became economical in all the service stations worldwide, whether in Hamburg, Singapore,

or Vladivostok. ABB Turbo Systems has a highly integrated and efficient maintenance process. The company can now handle $50$

percent more service requests with the

Page $|14$

same workforce. Throughout the various approval stages, the lead time of an order$$from receiving it to completing it in the central spare

parts warehouse$$is reduced from $24$ hours to $2$ hours. At the same time, the new solution has cut stocks by $12$ percent, enabling the

company to save roughly US$$1$ million annually in interest charges. The configuration data and transparency within the warehouse allow

ABB Turbo Systems to process service jobs quickly and reliably, despite lower stocks of spare parts.

Another shipping company in a different part of the world blends products and services in a completely different way.

COSCO

COSCO With $$17$ billion in revenues, the China Ocean Shipping Company Group $($COSCO$)$ ranks as the largest shipping company in China.

A conglomerate consisting of more than $1,000$ enterprises, its businesses include international shipping of both passengers and freight,

comprehensive and integrated logistics services, and ship building and repairing. COSCO Group is ranked second in the world based on

fleet size and shipping capacity$\mathrm{.}3$ Since $1998,$ the group has been led by Capt. Wei Jiafu, a strong and visible leader with a doctorate in marine

engineering who prefers and retains the nautical designation fro