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The story of Atlas Copco’s 140-year commitment to innovation.
When thinking about innovation during the past century, the mind immediately wanders to consumer-facing brands that make products that are experienced by users – like a mobile computer and videophone that fits in our hands or the technology applications through which almost all modern business is conducted.
One company that has a profound influence on how these well known innovative companies manufacture products, is Atlas Copco. The company celebrated its 140th anniversary in 2013, and it is reflecting on its own innovations and adaptions – products, service and market expansion – that have placed it in a position as a world-leading supplier of compressed air solutions, construction and mining equipment, power tools and assembly systems with a principal focus on “sustainable productivity.”
A Brief History
Atlas Copco was founded in Sweden in 1873 as a manufacturer of railroad rolling stock (a burgeoning industry at the time in need of a local manufacturer in Sweden). At the turn of the century the company diversified its offerings into riveting and chipping hammers and drills intended for metalworking in the manufacturing industry. While ramping up production of these tools, Atlas Copco began building and servicing their own air compressors. And in 1904, Atlas Copco invented the piston compressor as a solution to their own manufacturing challenges and shortly thereafter began producing and marketing the new technology. The company’s air compressor business expanded greatly during the years leading up to World War I, as manufacturers and the construction industry realized a greater need for compressed air.
Atlas Copco began U.S. operations in 1950 with the opening of offices in San Francisco and New York. Through the middle of the last century, Atlas Copco developed new tools with increasingly improved performance and precision to meet the needs of the quickly growing automotive and aviation industries.
Ushering in a new era of compressed air efficiency and opportunities, the company delivered its first screw compressor in 1955. In 1967, Atlas Copco introduced both the world’s first mobile screw compressor that produced oil-free compressed air and the oil-free, stationary, Z Series. With these developments, new opportunities were created for pneumatics in the medical care and food industries. And, in 1994 Atlas Copco unveiled the first economical to manufacture variable speed drive compressor – leading the way for the industry’s movement into more sustainable technologies.
During the past fifteen years, Atlas Copco introduced the world’s first Class Zero (ISO 8573-1 CLASS 0 - 2010) oil free compressor, revolutionary screw blower technology that is on average 30 percent more efficient that traditional lobe blowers and the world’s first compressor designed to reuse 100 percent of its required energy input as hot water within the manufacturing process. And in 2011, the company unveiled the most energy-efficient oil-free compressor ever built – the ZH 350+, a high-speed 3-stage turbo centrifugal compressor.
But, the company’s innovations haven’t been solely based in compressed air. Through the years, Atlas Copco made significant investments and advancements in mining tool technology – from lightweight handheld drills to a hydraulic rock drill, the COP 1038 – the predecessor of many of today's rock drills – and manufacturing industry tools designed for performance and ergonomics. Along the way, the company even aided in the discovery of a species of dinosaur, Atlascopcosaurus, meaning "Atlas Copco lizard," a genus of herbivorous basal euornithopod dinosaur from the Early Cretaceous period of the present Australia.
Atlas Copco has leveraged these technological advancements to foster rapid growth during the past two decades. And today, Atlas Copco’s North America activities account for one-fifth of the company’s total revenues – making the United States the company’s single largest market.
The Growth of the Brand in the United States
“If we go back 20 years, we often had customers ask – who is Atlas Copco?” said Kurt Lang, chief operating officer at Air Technologies, one of the world’s largest independent compressor distributors and service centers and a 33-year partner of Atlas Copco Compressors. “Today, it very rarely comes up, the brand awareness has grown to the point that most clients know Atlas Copco is the most purchased rotary screw compressor in the world.”
Yet, no company grows quickly without some pains.
“When I was selling Atlas Copco compressors for an Atlas Copco distributor in the Tennessee region, the only pushback we received was about repair and replacement time and from misconceptions about the amount of business Atlas Copco conducted in the U.S. market,” said Steven Green, now director of operations at Plains All American Pipeline, a leader in oil transportation and storage headquartered in Houston. “If a manufacturer took the time to compare the products – lifespan, energy requirements, reliability – we could always provide them with the perfect machine for their operations.”
As a sales engineer, Green focused on selling Atlas Copco compressed air and maintenance packages in the early 2000s. He recalls that the ergonomic features of the machines pleasantly surprised customers, but what customers were most impressed by was the machines’ efficiency.
“As far as I’m concerned, efficiency started with Atlas Copco and everyone else followed suit,” added Green. “The key differentiator was the initiative from Atlas Copco to get out and assess the situation and provide the customer with a real equipment solution – not just take an order.”
Atlas Copco took all of this feedback from the market and set out to make changes and investments in how they operate in order to serve their customers better.
“Our number one goal is taking the best possible care of our customers,” said Paul Humphreys, vice president of communication and branding for Atlas Copco Compressors. “Everything we do in product innovation – performance, efficiency, sustainability, reliability – is all focused on helping our customers improve the performance of their facilities, but to do that we have to connect with our customers’ needs.”
To really understand their strengths and weaknesses in serving their customers, Atlas Copco invested several million dollars into an ongoing comprehensive customer loyalty program, based on the customer loyalty metric (Net Promoter Score or NPS) introduced by Fred Reichfeld in his book, “The Ultimate Question.” A Net Promoter score is a grade of customer satisfaction – where on a scale of 1-10, 9-10 are deemed promoters, 7-8 are labeled passive and 1-6 are qualified as detractors. Atlas Copco strives to make every customer a promoter.
“If you ask any Atlas Copco employee what NPS means they will say, ‘It’s how well we are taking care of the customer,’” said Humphreys. “Every employee is engaged with the program and familiar with the scores and the details that come with it, but surveying 10,000 global customers a month and reporting the results is just part of the process – the key is acting on the intelligence and that’s what we’ve done.”