― Confucius
The other day I had the opportunity to visit ABB Group with a few of my classmates as a part of the MBA program here. As a part of the activity, we were required to write a short essay reflecting on our visit and what we learned. Since it was for class, it really doesn't have as much narrative as many of my posts on here, but for the sake of simplicity I'm going to go ahead and copy my reflection straight into this post:
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The visit to ABB Group’s Shanghai location was an
interesting experience for me, primarily because I have never before had the
opportunity to see a companies manufacturing floor in person. ABB Group is a fortune 500 engineering
company based in Zurich
which, from my understanding, primarily produces robots for task automation and
power systems. The Shanghai
location seems to specialize in the production of robots and produces all but
the largest models. There are two divisions of robots: the first is industrial
robots, which range in size from small handheld robots to much larger robots.
The second division produces robots which are designed to help with painting
(their biggest customers in the paint division are car manufacturers who use
the robots to apply paint after production).
Upon entering the company, we were given a brief introduction of the history of ABB. The most striking fact to me was that ABB began producing robots in the 1960’s. Until now, I thought the use of robots to assist in production was much more recent – say, 1980’s or so. I also recall that the Shanghai facility was built in 2009. While it was clear that the building was relatively new, I was surprised by how clean the manufacturing floor still was. It looked as if it could have been built only that year. The second thing that really surprised me was how few workers were present on the manufacturing floor. Though they sell less than 10,000 robots per year, it can take anywhere from two weeks to one and a half months to produce a single robot, depending on the size and the customizations requested by the company purchasing the robot. It seems that such a large number of sales would take many more workers to produce. I also found it surprising that while we were there, around 2:15, the workers were on break. I didn’t have the opportunity to ask, but I would be curious to find out what their work schedule is like.
Upon entering the company, we were given a brief introduction of the history of ABB. The most striking fact to me was that ABB began producing robots in the 1960’s. Until now, I thought the use of robots to assist in production was much more recent – say, 1980’s or so. I also recall that the Shanghai facility was built in 2009. While it was clear that the building was relatively new, I was surprised by how clean the manufacturing floor still was. It looked as if it could have been built only that year. The second thing that really surprised me was how few workers were present on the manufacturing floor. Though they sell less than 10,000 robots per year, it can take anywhere from two weeks to one and a half months to produce a single robot, depending on the size and the customizations requested by the company purchasing the robot. It seems that such a large number of sales would take many more workers to produce. I also found it surprising that while we were there, around 2:15, the workers were on break. I didn’t have the opportunity to ask, but I would be curious to find out what their work schedule is like.
Although ABB only sells fewer than
10,000 robots per year, as stated previously, their sales volume has grown 50-70%
per year according to the man giving us the tour, which I found to be very
surprising. A brief glance at the ABB financial statements leads me to believe
that these numbers are based on sales revenue from the years 2010 to 2012 (~63%
growth in revenue from EOY 2010 to EOY 2012 in the discrete automation and
motion division). I believe it is also important to note that each of the
robots can potentially cost multiple hundreds of thousands USD per unit, though
ABB does not have exact figures for set prices due to the fact that almost each
robot is sold with customizations specified by the buyer, which can vary in
price. It seems to me that much of this cost is due not only to the materials,
but the amount of testing and quality control that occurs after the unit is
produced. They also are able to accomplish production and testing fairly
quickly after you place an order: from the time of your order, you can expect
to have your unit shipped within two weeks for the smaller models and one month
for the larger models, though of course, this depends on the number and type of
customizations requested.
Overall, I thought the visit to ABB
Group was an enlightening experience. While I especially enjoyed having the
opportunity to see the manufacturing floor, the questioning period was the most
informative. This being the case, I would have liked to have a little longer to
ask questions about the company regarding their operations in China.
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I would like to add a few more things to this post to make it a bit more interesting for the blog. I really did think it was fascinating to see the manufacturing floor of the company. Due to our lack of safety gear, we were required to stay on the walkways about the facility, but they gave a pretty good view. For the most part, it looked like a giant warehouse filled with giant shelves full of parts for the units. In one corner, there was a conveyor belt that sent the larger pieces through a car-wash-type cleaning. Due to how precise the robots have to be, they need to make sure that all of the parts are absolutely free of dirt, dust or grime before being added on. The smaller robots were built at desk-like workstations while the larger robots were built in pens that looked like small construction zones. The pens were arranged in a line and each one specialized in creating or adding on certain parts to the robot. For example, in one pen they would add the arm to the robot. Once that is complete, the robot is moved down the line to the next pen where the next components will be added, until it gets to the final pen where the robot is complete and testing begins. This allowed us to see each of the robots in their various stages of development, so we were able to get a clear sense of the whole manufacturing timeline. We were also able to see one of the robots being tested. It was difficult to tell what exactly it was doing, but the robot was roughly the size of a truck (think Ford f-150 size), but it's just one giant arm.
It's also amazing how precise the robots actually are. Outside of the manufacturing room, they had a small robot that would take a business card from your hand and then drop it in a small slot. My only complaint about the visit was how little time there was to ask questions. We were told we would have around 15 minutes, which itself is not enough, but it ended up being closer to 7 minutes. This may have been because our driver seemed to get lost on the way there (It took about an hour to get there, but only 30 minutes to get back to the school), but I think it also has to do with how unorganized business seems to be here. For example, when we arrived, I would have expected someone to be waiting for us. Instead, we had to make a call and then ended up waiting 5 to 10 minutes before they came down to give us visitor passes and bring us up. While waiting, the guards seemed to be completely unaware that we were supposed to be visiting and wouldn't even allow us into the lobby. I'm hoping our next visit will allow us more time.
Look for a post about my trip to Nanjing soon! I ran out of space to upload pictures to the website I was using, so I need to look for a new website to host my pictures on. In the meantime, I believe at least a few were uploaded, so you should be able to view those in the photo gallery.
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