The Digital Solution For Power Transformers
Alan Ross
I'm Alan Ross, the managing editor of APC Media and host of this interview with, Oktay Akkas, who is with MR, Maschinenfabrik Reinhausen, and Alexei Miecznikowski, the CEO, President, and a board member of Northern Transformer. We are talking about transformation, because the topic we're going to address is the whole area of digitalization and the collaborative work between MR and Northern Transformer.
Oktay, give a little bit of a background about your career, how you got into the power industry, and what you're doing right now with MR.
Oktay Akkas
Thank you, Alan. I started my engineering career in 2007 with MR, as a testing field engineer. At that time, I was with the motor drive units testing team.
Afterwards, I had the responsibility in Europe and switched to the automation system, handling the secondary equipment, and was responsible for projects in Europe for several years, until I changed to business development, to the business unit automation where I recognized that this is a challenging responsibility, including market development, business development and some sales activities.
Today I am a business developer working with transformer manufacturers in Europe, and now also in North America.
Alan Ross
Thank you Oktay. Alexei, share with us how you got into this industry and why?
Alexei Miecznikowski
Thanks, Alan. I also have an engineering background. I studied engineering science and started in the electronics industry which is perhaps a good segue into our discussion later. I spent 20 years at Celestica, a spinoff of IBM.
Started in engineering, performed various roles in R&D, corporate development, sales, and was exposed to many different kinds of clients, some in highly regulated fields and others in consumer electronics. It was an amazing training ground. Just the diversity of the things we worked on.
We worked all over the world, with lights-out automation, high-mix-low volume, very sophisticated systems. It was also a lot of travel. Your phone never turned off because everyone was in a different time zone. I was exposed to the energy industry while I was there, and an opportunity came up to help build this company to transform it, as you said, to its next level.
Here was an opportunity to work at home with a facility here, with a whole supply chain here, with clients that are here. I thought, what an interesting opportunity, so I took it. That was eight years ago.
Alan Ross
What you're saying, it was your family that said, “we want you home more”, and that you changed your entire career so that you could be home more. That’s excellent. Having been here myself, I appreciate that. Talk a little bit about Northern Transformer. You took it over in 2016. You were brought in to be transformative. I love the fact that you came from a good background to do what you're doing now. But talk a little bit about the company, the pedigree, where it's come from, where it is today.
Alexei Miecznikowski
It was founded in 1981 in Toronto by three veterans of the transformer industry. They built a company that had a very good reputation. It was the robust quality of the units, serving the local market, small utilities, commercial and industrial, up to about 44 KV. Those guys managed to build a company that had a great reputation. In fact, they really lived up to their motto, which was “Quality
you can count on from people you can talk to.”
Alan Ross
Is that still there today, that motto?
Alexei Miecznikowski
It is. That ease of doing business is something that's important to our team, and also making sure that we have the right people talking to clients directly and being able to address issues rapidly and clearly with the talent on the phone or today, in Teams meetings. That was a great base.
In 2012, it was acquired by a gentleman who is a very ambitious visionary.
His vision was to build a company that would build power transformers here in North America. Of course, there are existing companies that do that, but they're generally part of large global companies. He saw an opportunity to take this small local company and build it up and set about investing in us. We built a state-of-the-art, purpose-built facility, and we have been continuously investing since then.
Our latest milestone is opening of the 240KV capability. We added vapor phase, testing bay with higher capabilities, vertical winding, all the requirements to do 240KV units. That's where we find ourselves today. But we're definitely thinking in a very long-term way about making those investments to allow us to provide the clients, the major utilities in North America, what they need from here at home.
Digital Solution For Power Transformers
If you don't have the right team and they don't have the right culture, you really won't get very far at all. We've spent a lot of time and effort and thought into how we maintain and increase the culture that we have. It's something that you work on every day.
Alan Ross
Let’s discuss growth strategy. If you want to build a lasting growth strategy, you must do something different. You must be seen as the supplier of choice,correct? Talk a little bit about that and talk a little bit about the whole process of looking at a company that has an existing quality reputation moving to newmarkets, technologies or innovation.
Speaking of MR for example, the load tap changer from Reinhausen, as a practitioner, I never had a problem with it because you can always rely on their quality, right? And yet, they are moving into
other directions, services and innovation, all the while making sure to maintain that commitment to quality and customer support excellence. So it's a similar a situation. You have a quality company that has decided to expand, like MR, who is doing that with great success. Now Northern Transformer is doing the same thing.
Talk a little bit about your growth strategy.
Alexei Miecznikowski
That’s a good question, Alan. For us, it’s about the culture. This is a product and an industry that's very much about the people. If you don't have the right team and they don't have the right culture, you really won't get very far at all. We've spent a lot of time and effort and thought into how we maintain and increase the culture that we have. It's something that you work on every day.
But I think we have a great culture, and it's brought us to where we are. Now the question is how to keep instilling it as we grow.
The industry is very reliant on people throughout the entire life cycle of what we do. You could be let down by anyone in the entire chain. It's so important to have a culture where everyone's there working together, backing each other up. The formal systems will get you so far, and they're helpful and they're required, but at the end of the day, if the team isn't motivated, if they don't have the right culture, it's still not going to work for you. That's a big part of how we got to where we are and how we're going to continue to grow in the future.
I'd say the other piece is finding the right clients. You need to find the clients that want to buy quality and who respect the fact that quality is not free, it requires an investment. That's a frank discussion you must have with them. If you can't come to an agreement to see eye to eye on that, then perhaps they're not the right client for you.
You need to find the clients that want to buy quality and who respect the fact that quality is not free, it requires an investment.
Alan Ross
That's an excellent approach to it because too many times we chase the dollar, and we get with somebody who commoditizes what we do. I have a philosophy that I borrowed from a CEO, friend of mine: Culture trumps strategy. In the long run, you can create strategies and plans, but if your culture isn't correct, as you said, it doesn't work. Kudos to you for selecting the right client.
It's like where MR is, right, Oktay? I'm going to switch to you next because we know MR very well at APC Media. You're a good client of ours. In a similar vein, we want to establish those relationships with the forward-looking companies. We're going to be talking about evolution, which, as I understand, is built on your ETOS platform. Talk a little bit about that and how, when you're working with Northern Transformer, why you picked them as a client.
Oktay Akkas
Well, let's say quality pays off at the end of the day. The point is that our ETOS solution is something new in the market that we combine with the drive functionality on the transformer. As soon as the tap changer is coming from Reinhausen, of course, the drive is combined to the tap changer and ETOS is included. ETOS itself is based on the ISM platform. The idea is to give the ISM platform to customers, a solution we call ETOS, and let them use this platform based on the ISM modules. It is branded and labeled by Northern Transformers as Evolution, for example.
We add more value on to the transformer, we centralize all the information, and then we digitalize this information coming from the transformer in real-time and forward it to the next level of control. It is also possible for Northern to use the ISM platform and develop further
applications on this platform. And that's the reason why, for example, Evolution can be different from standard ETOS.
Alan Ross
Excellent. The customization of the platform, as I became familiar with ETOS recently, is quite unique. I want to switch to you again, Alexei. You saw ETOS and said, “Okay, we are making a move to digitalization”, and you chose their customizable platform to be able to take to your clients. Talk about that decision and why you are collaborating with MR.
Alexei Miecznikowski
When I joined Northern, I immediately saw the need for digitalization. But I didn't see a path. I saw a lot of closed systems. I saw a lot of, let's say, niche solutions. But what I knew we needed was an open platform that we could build on. I also knew Northern wasn't the right company to go about trying to create that. It was not our skill set. We're a transformer manufacturer. We have very deep skills, but they're not in that area.
And it had to come from a company that understood the transformer market. It is a very niche and unusual market. Those entrants who were proposing solutions but weren't from this industry were problematic for me. Sure enough, one day, I got the call from MR where they took me through the proposition. I got it immediately. I also knew from our previous dealings with MR that like us, they have a vision. They invest for the long term, and they really understand us and our clients. When I saw that, then I started to explore what they had put together and I could see it was an open platform.
It was a platform that allows clients to adopt it now but add functionality in the future. It was a platform that allows clients to preserve what they already have, which for many utilities is a major challenge, mesh it together and find a path forward. And it delivers cost efficiencies.
Everyone benefits. It's not a new large expense. It's something that allows you to take advantage of what's already being shipped with every transformer and layer these extra capabilities on top. When we looked all that, and then we said, “Well, it's MRs, and they've done the work on making sure it's a robust quality platform”, it was a pretty easy decision, actually, in the end.
Alan Ross
This is part of the word “interoperability”. The utility industry is dealing with a rapidly changing digital platform. They have different requirements today than they had maybe a decade ago. Talk about how you discuss Evolution with a customer. Treat me like I'm a utility customer buying your transformer. Why should that even matter?
Alexei Miecznikowski
It's a long process with the utility because they're not starting from zero. They've already got an incumbent solution. What you really need to do is to take your time and help them understand first their incumbent solution, what it really is and how it can be enhanced, made better, more productive, lower cost, by working together with the Evolution system. Really, that's why we called it
Evolution. It's not a one step, it's a slowly evolving approach to monitoring, and it allows you to get to where you want to go in the future.
Frankly, I think it's inevitable. It's going to happen, much the way evolution is. Now, it doesn't happen all at once, and some will move faster than others, and that's okay. Some have already invested more in the platforms that they already have. But at the end of the day, the logic is there. I've seen from my career in electronics, open systems, over time, in pretty much every case, have won out over the closed systems. Sometimes it takes time, but you'll get there eventually.
It's going to happen, much the way evolution is. Now, it doesn't happen all at once, and some will move faster than others, and that's okay. Some have already invested more in the platforms that they already have. But at the end of the day, the logic is there. I've seen from my career in electronics, open systems, over time, in pretty much every case, have won out over the closed systems.
Alan Ross
Excellent. To do what you've done together, it requires one keyword, collaboration. You must work together to collaborate, to take the platform, ETOS, and make it your platform Evolution; then it requires collaboration with the customer, which is another requirement. Talk a little bit about that whole concept of collaboration.
Start with you, Oktay. How did it start with Northern Transformer?
Oktay Akkas
When we had the first presentation, as an online meeting. Before we started with the presentation, Alexei was just explaining his expectation. After several minutes, it was clear he mentioned all the points on our slides, on our presentation that we had prepared for this meeting. We had the strategic points, optimization, cost efficiency, differentiation in the market, everything that he mentioned all
before having seen our presentation.
Then we just shared our slides, and Alexei said, “that was exactly what I was waiting for”. Our team said, “Oktay, jump on the plane and go to Canada”. We had a kick-off meeting there, signed the contract, and since then, the cooperation is ongoing. There will be a workshop in the next few weeks in Canada at Northern Transformer.
We will do process optimization, training on the product itself, we will have customer visits at Northern Transformers where we can present MR and Northern Transformer together. This is, I think, the difference. It is not only customer and supplier relationship, but also a collaboration, hand in hand. We back up each other on this point. We try to support each other, and that is on a trust level, a real cooperation.
It is not only customer and supplier relationship, but also a collaboration, hand in hand. We back up each other on this point. We try to support each other, and that is on a trust level, a real cooperation.
Alan Ross
So, Alexei, he made your job a lot easier because you were sold before you were sold. Talk a little bit about your end of collaboration.
Alexei Miecznikowski
I mentioned before, Alan, I knew this had to happen, but I wasn't sure where it was going to come from. Over the years, I'd seen various proposals, and none of them made me comfortable that it was the right platform to move forward with. None of them had addressed them all the attributes we were looking for.
We're also training the production team. We're training the engineering team. There's a lot. They have a lot of questions, as you can imagine, because they know that they're also talking to the clients as well. They really need to understand it well. It's been going great. The support has been fantastic. You always want it to go as fast as possible, but these things take time to do properly.
We're taking that time to invest and get it right up front. I'm de-lighted by this initiative, and it's one of the smoothest ones that I've experienced. We're also training the production team. We're training the engineering team. There's a lot. They have a lot of questions, as you can imagine, because they know that they're also talking to the clients as well. They really need to understand it well. It's been going great. The support has been fantastic. You always want it to go as fast as possible, but these things take time to do properly.
We're taking that time to invest and get it right up front. I'm de-lighted by this initiative, and it's one of the smoothest ones that I've experienced.
Alan Ross
Excellent. Gentlemen, congratulations, because I do think what Evolution and ETOS, what you're working together on does set a new standard. What I really like about this is you still have quality you can count on by people you can talk to from both companies. Thank you both, gentlemen.
Alexei Miecznikowski
Thank you, Alan.
Oktay Akkas
Thank you, Alan.
Oktay Akkas is an engineer in the field of energy transmission with over 17 years of technical and managerial experience. At the beginning of his career, he started at Maschinenfabrik Reinhausen as testing engineer for OLTC motor drive units and managed afterwards the sales & service responsibility of MR’s Automation & Control products in Europe.
Beside his sales activity he also had influence on the R&D with his experience for secondary equipment in electric power grids. Currently he is responsible for the business development of OEM business at the business unit AUTOMATION and successfully driving the cooperation business with transformer manufacturers in Europe and North-America. Oktay graduated with honours Bachelor of Industrial Engineering at
the private University of Diploma (Germany).
Alexei Miecznikowski is CEO, Member of the Board, joined Northern Transformer Corporation as Chief Executive Officer and Member of the Board in 2016, to lead the company through its transformation to become a leading power transformer company. He has global business experience after 21 years at Celestica Inc where he led the development of business lines with revenues exceeding $500M including energy, healthcare, communications and automation.
His experience spans sales, business development, government relations, research and development and global supply chain/operations. Alexei graduated with honours Bachelor of Engineering Science at the University of Toronto. Alexei also serves as a Board Member of the Electro-Federation of Canada, the voice of Canada's electrical industry.
