At Aarbakke in Norway, the Norwegian machine manufacturer that is over 100 years old and which sells parts and equipment worth billions to the global oil and gas industry, the company has created a culture where all employees love to conceive great ideas for improvements, optimisation and automation. This means that Aarbakke’s CFO John Lende receives a lot of valuable input about how to fine-tune the company’s processes even more.
Aarbakke has been nominated as Norway’s smartest company for three years in a row. The company was established in 1918 as a maker of horseshoes and now manufactures parts and equipment for the global oil and gas industry. The company’s manufacturing plant is in Stavanger, it includes 65 machines that costed more than EUR 50 million. Within a few years, Aarbakke has increased the company’s machine utilisation by eight percent. This has been achieved by among other things, all the company’s employees becoming involved in the fine-tuning of the business. The company’s employees provide ideas for improvements, which are realised, and in addition to gaining recognition for their ideas they are also awarded cash and a pizza voucher.
John Lende has functioned as the CFO for different companies in the industry and for a public sector administration in the Norwegian city of Stavanger since October 2017. He is also the chairman of the board at four companies. He was educated in Norway, Australia, and Canada.
From your point of view, how is RPA developing in Norway?
Norway is in an early phase in relation to RPA. We have not gone far yet. There is a clear need for digitalisation and automation, otherwise we cannot remain competitive enough when we have relatively high costs and wages at the same time. The journey has begun but there is still a long way to go seen from an international perspective.
Has COVID-19 accelerated this development?
In general, the pandemic has not been positive for Aarbakke. It has made things difficult. However, we have managed to get something good out of the situation. For example, we have developed a new and very efficient way of carrying out observations and testing together with our customers. 90 percent of our customers are international customers on the export markets. Previously, we flew them in as observers so they could observe the testing of their ordered tailor-made products. Now we video-record the test, set measurement instruments on machine parts and save all of the data as documentation for 10 years. It’s very flexible and saves a lot of time for our customers, so we will continue doing this after COVID-19.
Here in Norway, we attract many employees from other countries, but during the pandemic it has been very complicated. We are therefore also pleased to have introduced some new procedures with welding, where a system automatically logs everything, so that the welders do not personally have to note and document things. The welders make up many different nationalities and speak many different native languages and they are not necessarily happy about having to write things down. The production process and delivery time are thus shortened when the documentation is automated. It is very effective streamlining, and we can see that we save a lot of time on administration.”
At Aarbakke, the company works with both physical and digital automation. The CNC machines involved in production work on components around the clock, five days a week. And it is robots that feed the machines with new components.
“We have worked for several years with the learning factory principle, where we collect data from the factory’s production process, so that we can optimise even more. For example, we use machine learning to ensure that the CNC machines can themselves select the correct tool and cut the individual product. Our range covers 4000–5000 different products, which we really must reduce, as it’s too many.”
John Lende became CFO at Aarbakke in 2021. The finance department’s work is carried out by a highly automated bookkeeping department, with just four employees in total.
How do you use RPA today in the finance department?
“I wanted to join Aarbakke because the company has always been well known for being in the vanguard, that wants to make a difference, and thus it thinks innovatively and invests in long-term development. With its 300 employees, it is the largest private employer in Time Municipality. So, for me, it means a lot being able to further develop such an important employer in the area.
Even the bookkeeping department is almost fully automatic, apart from the manual, human checks that are required. Data and invoices are directly entered into the accounts. However, we also have our own in-house developed systems that are slightly outdated, which is why we are replacing them. We have a lot of software programs from the Norwegian company Visma, which collect data and send it to ClickSense, which can generate project reports in a completely automated way. We use that program a lot. Previously, we had to devise a report manually and it took up to 10 days for us to do it. Now we make all the reports accessible to all employees, so they can see how things are progressing or have progressed. Because we the management believe that transparency motivates people in a positive way. The data that is collected from the machines must be accessible to the employees, because it creates a culture of learning and improvement, rather than having an atmosphere of monitoring and control. A great many of the excellent improvement initiatives come from the production team, where we have actually turned the business of coming up with good ideas into a sport, and the ideas are realised and the person who conceived the idea is rewarded with a pizza voucher.”
In your company, which challenges would you like to address with automation? Which tasks or processes do you consider automating?
“We also work to automate things as much as possible in our sales process, where we get enquiries about major projects. Here we work with reusing historical data to quickly process enquiries and thus automate some of the sales process, so we save time when preparing tenders. Being able to submit a tender in a shorter time can also be a competitive advantage with potential customers. Based on a specific project, we are currently working on seeing how we can reduce the time spent on tendering from one week to two days.”
In your opinion, what are the largest barriers to automating more?
“People are creatures of habit and I believe that it is important to create positiveness and openness about improving yourself and learning something new, so we can collaborate constructively in organising and carrying out tasks in a smarter way. In a time where there are labour shortages in many industries, there is scope for creating such a culture as this.”
With the time/resources, you can free up with automation, what should they rather be spent on/invested in? ow
“At Aarbakke, our goal is to be the greenest company in our industry. Therefore, the profits from RPA are being re-invested to ensure our competitiveness internationally. Our goal is that EUR 20 million of our turnover must come from new customers in industries other than the oil industry and gas sector, so that we have more than one leg to stand on. Currently, our “green orders” only account for 2 percent of our turnover, which is equivalent to about EUR 2 million.”