Atlas Copco celebrated its 125th anniversary in style in June of this year. It took customers and colleagues on a guided tour through the company’s history, in the shape of a special exhibit and film show set up in the test mine at its Stockholm headquarters. Visitors saw some of the past developments that have brought the company to its current position as one of the major players in the world market for excavation and mining equipment. Companies dealing in technology, however, have to work hard just to hold on to their position, and Atlas Copco took the opportunity of its birthday celebration to offer visitors some insights into the products, and the philosophy, that the company will bring to the market as it evolves in the coming years.

In preparing for the future, Atlas Copco first of all took a look at its own operation. The result was a reorganisation of its facilities and some fundamental rethinking about how best to operate its manufacturing facilities. The company’s Rock Drilling Equipment Division, headed by Kjell Carlsson, is now based in Örebro in southern Sweden. Atlas Copco has had a minor presence in this university town, some 200km west of Stockholm, since the 1950s. Now it houses the manufacturing, design, management and research facilities for Carlsson’s division, bringing together functions that in the past were split between three countries: Stockholm, Bremen in Germany and Montreal in Canada.

The move has been no small investment for Atlas Copco — the company says that the majority of the SKr207M invested in property and machinery during 1997 for its Construction and Mining Technique business was attributed to the Örebro operation. Around SEK100M has been invested, for example, in the laboratory. The investment in staffing required by the restructuring has been just as extensive, and a large proportion of the staff at Örebro had to be recruited. In fact, the need to recruit has been seen as a benefit within Atlas Copco: it can now deploy a staff up to four-fifths of whom are educated to university level and beyond. The Örebro manufacturing facility has similarly been reconsidered from the ground up. Across the facility work patterns have been considered and various parts of the operation have been moved to ensure they are placed at the most appropriate point — QA functions are placed centrally in the assembly area, for example. The teamed approach to assembling the products is being extended and the facility is currently being reconfigured. In the new configuration, products in manufacture will progress from one station to another, along with their work teams, as the teams complete each phase of work. According to Kjell Carlsson this system allows the rigs to be built faster and with greater efficiency: ‘It will considerably reduce lead times and through-put times in the relatively near future,’ Carlsson said.

New needs, new approaches

The reason for this reorganisation and refitting is, of course, to offer the market new products and services. Some years of research went into developing the company’s new generation of rocket boomers, the M2C, launched in early June (see IWP&DC, July issue, p54), and they exemplify some of the new developments that are likely to affect the market in the near future.

The M2C offers much more computer control than was the case with earlier rigs. PCMCIA cards, for example, can be used to store preferred drill settings, while an integrated diagnostic system allows faults to be detected and corrected. But Atlas Copco is not alone in using computer technology to offer customers more control. Jouni Salo, vice president of Tamrock’s Civil Engineering Division points out that part of the driving force behind this change has been the increasingly strict demands placed on tunnel quality and quality control. At Tamrock, Salo says, the response has been different levels of instrumentation and automation, as well as more accurate control systems. Take up of the new systems has been good: on-line reporting is used at many sites already, Salo says, and Tamrock also provides software for drill pattern design and optimisation. Atlas Copco’s Mohinder Singh Saund admits that the developments add to the cost of the rig, but says that overall it is good economics: increased tunnelling accuracy reduces the cost of reboring and cement linings dramatically, and time is saved both in the faster rig setup and in reducing the need to compensate for inaccurate tunnelling.

As Tamrock’s Salo explains, most contractors want machines that are flexible enough to handle most of their potential business opportunities, which are easy to support and have a good resale value. At Atlas Copco, new machines like the M2C are made up of standardised components to meet the needs of customers for rigs that can be quickly deployed and economically maintained.

For owners building large projects like dams the increasing market for rental equipment is the next logical step. As Salo explains, it can be difficult to justify the capital required for high-tech drilling rigs. To reduce risk, contractors use different options such as rental equipment, subcontracting parts of the job or taking out service contract. There is a global trend, he adds, towards rentals, leasing or risk sharing, driven by higher demands on capital utilisation and reducing operating capital generally.

Atlas Copco is equally bullish about the possibilities for renting equipment and at the end of 1997 the company launched a rental company for the European market. The company has identified a number of potential customer groups, including contractors who require extra capacity during limited periods and those who require specialised equipment for a short time.

In many industries where large scale civil construction is required contractors are increasingly joining other involved companies as equity partners, taking a share of both the risk and the reward. Dam construction is no exception, and in the long term Atlas Copco sees this type of partnership as a positive step. Tamrock’s Salo notes that providing comprehensive after-sales service assures the high performance and availability of the company’s products.

More than that, it is the company’s policy to build a partnership with end users, rather than a supplier/customer relationship. Atlas Copco would agree, and as it celebrates its 125th anniversary, who could suggest that as a partner, the company was not able to offer a long-term relationship.