Emerson Automation Steps Up Digital Transformation Game

Emerson Automation Steps Up Digital Transformation Game

Everyone touts Digital Transformation lately. Emerson Automation has been patiently building a Digital Transformation practice through acquisition and development. Executives announced advances at this year’s edition of Emerson Global Users Exchange—my second stop of the Fall Conference Tour. I see Emerson pulling away from many of its automation peers becoming part of a select group of suppliers putting it all together (the others being Siemens, ABB, and Schneider Electric / AVEVA).

I’m going to run through some of the more significant announcements from the press conferences so far this week.

New Digital Transformation Organization

Emerson has established a dedicated organization focused on digital transformation technologies and programs. The Digital Transformation business brings together resources to help manufacturers develop and implement pragmatic digital transformation strategies that deliver industry-leading, or Top Quartile, performance. The $650+ million business combines existing expertise in consulting, project execution, smart sensor technologies, data management and analytics – all part of Emerson’s Plantweb digital ecosystem. The organization will help customers not only establish a clear vision for digital transformation, but also execute and realize measurable results at each step of their journey.

“In a space inundated by confusing promises, Emerson helps customers define and execute a practical and successful path to digital transformation,” said Lal Karsanbhai, executive president of Emerson’s Automation Solutions business. “With our new Digital Transformation business, we are strategically focused on guiding customers to the right strategy, helping them drive improved organizational alignment, and implementing programs that accelerate improved business performance.”

“The industry is at a critical point in the digital transformation journey,” said Stuart Harris, group president for Emerson’s new Digital Transformation business. “Many companies have a vision but struggle to implement practical solutions that deliver results and therefore they are getting frustrated. Other companies are solving specific problems, but not realizing value at scale across the enterprise. Emerson has the technology to provide practical solutions, and the experience to define the best practices and roadmap to help make a broad operational impact.”

Existing and new Emerson resources comprising the business include:

  • Operational Certainty Consulting: facility and enterprise-level roadmap strategies and implementation to improve reliability, safety, production and energy utilization metrics
  • Operational Analytics: the industry’s most comprehensive portfolio of predictive diagnostics and advanced analytics, providing insights on health and performance of operational assets
  • Industry Solutions: deep, industry-specific expertise on solutions to drive key performance indicators
  • Pervasive Sensing: the industry’s largest portfolio of smart, easy-to-deploy, connected devices, including wireless instruments
  • Project Management: best practices, tools and resources to  implement a digital transformation project with confidence

Comprehensive Operational Analytics Portfolio

Emerson’s portfolio of operational analytics focuses on the greatest source of value for industrial manufacturers – the production itself. Operational analytics with embedded domain knowledge can impact and improve performance of simple equipment, complex assets and process units, and entire production plants.

“We recommend addressing the high impact, known problems first,” Zornio said. “By using proven models that make analytics accessible to the personnel responsible for the performance of assets, our customers can act quickly to solve problems faster. For example, Emerson’s solutions can detect and address 80% of the equipment failure modes contributing to production loss in a plant in real-time.”

Additionally, Emerson’s enhanced portfolio includes machine learning and artificial intelligence that can be used to identify new discoveries and deepen insight to impact business performance. These tools provide perspective previously unattainable with traditional analytics.

“With our acquisition of KNet and its integration into our Plantweb Optics asset performance platform, Emerson can provide not only some of the most advanced machine learning and AI tools in the industry, but also the connection to people and workflows, which are critical to digital transformation success,” Zornio said.

Emerson’s portfolio now provides both pre-packaged analytics solutions as well as a complete analytics toolbox for users to develop their own applications. This portfolio is supported by Emerson’s Operational Certainty consulting practice and robust data management capabilities that provide a foundation for analytics success.

AMS Asset Monitor increases visibility and adds predictive analytics

AMS Asset Monitor edge analytics device digitalizes essential asset data and analytics for better operations performance and improved decision making. AMS Asset Monitor provides actionable insights into essential
assets that were previously monitored only with infrequent assessments. The new edge analytics device will connect with Emerson’s Plantweb Optics asset performance platform to provide key operations personnel with instant asset health details for operations and maintenance decision making.

Plants typically monitor the condition of essential assets such as pumps, fans, and heat exchangers only every 30 to 60 days. The longer the gap, the more likely that a defect goes undetected and results in an unexpected failure with significant impact on production, product quality, and plant efficiency. The new AMS Asset Monitor combines easy deployment, embedded logic-based analytics, and intuitive health scoring to make it easier for organizations to monitor and maintain essential assets. For instance, AMS Asset Monitor’s analytics and visualization can help plant personnel effectively plan maintenance during scheduled shutdowns and turnarounds and reduce or eliminate unplanned downtime.

Unlike typical analytics devices that send data to a historian or the cloud to be processed later, AMS Asset Monitor provides analytics at the edge, performing calculations at the device. This device-centered analytics capability reduces the time, complication, and expense of adding analytics to a plant’s assets. Each device collects data continuously and uses embedded logic to identify and diagnose common reliability issues. Individual issues such as imbalance, misalignment, bearing faults, lubrication issues, or fouling are consolidated into an overall asset health score. AMS Asset Monitor then communicates these health scores via a web browser or—when integrated with Plantweb Optics—through real-time persona-based alerts on mobile devices. Plantweb Optics also enables enterprise-wide visibility and expands edge analytics and digital intelligence throughout the organization, keeping personnel aware of essential asset health.

“Plants are always looking for more ways to improve profitability by increasing productivity. Just a percentage point or two in availability can equal millions of dollars per year or more,” said John Turner product manager for online prediction, Emerson. “The AMS Asset Monitor enables personnel across the plant to see the current health of essential assets along with suggested actions to improve asset health. This allows them to make informed decisions to maintain reliability, increase uptime and maximize productivity.”

The AMS Asset Monitor’s small footprint along with wired or wireless Ethernet connectivity make it simple to install. The edge device can support new applications by simply adding new logic-based analytics.

Industrial Wireless Network Solution

Emerson is partnering with Cisco to introduce a next-generation industrial wireless networking solution. The new Emerson Wireless 1410S Gateway with the Cisco Catalyst IW6300 Heavy Duty Series Access Point combines the latest in wireless technology with advanced WirelessHART sensor technology, delivering reliable and highly secure data, even in the harshest industrial environments.

“A secure connection that scales easily is the foundation for every successful IoT deployment.” said Liz Centoni, senior vice president and general manager, IoT at Cisco. “By using the power of the intent-based network, Cisco provides a secure, automated, rock solid infrastructure helping IT and operational teams work together to reduce complexity and improve safety.”

This next-gen wireless access point provides enhanced wi-fi bandwidth necessary for real-time safety monitoring, including Emerson’s Location Awareness and wireless video. These applications enhance personnel safety practices, improve plant security and help ensure environmental compliance. A reliable and fast connection between devices and people streamlines decision making by providing real-time analytics. It also enables a mobile workforce to virtually come together, collaborate and resolve critical issues in a timely manner.

“Products installed in industrial plants need to last for years, even decades,” said Bob Karschnia, vice president of wireless at Emerson. “This kind of longevity was a critical design and engineering requirement to ensure this new wireless access point was future-proofed to meet a rapidly evolving technology landscape.”

Personalized Digital Experience

​​​​Emerson‘s new personalized digital experience – MyEmerson–connects people and technology through streamlined work processes and better collaboration. With a MyEmerson online account, users can access digital tools to quickly engineer solutions, manage software and installed assets, access training, collaborate with experts, streamline procurement processes, and improve visibility into buying history and trends.

“Driven by our personal interaction with digital technology, customers have new expectations today about speed and access to information,” said Brad Budde, vice president of digital customer experience, Emerson
Automation Solutions. “Our customers still want access to human expertise, but now expect a great digital experience as well. Combining these two experiences to deliver information immediately and use it to solve problems faster is what drives new business value.”

Digital engineering tools help engineers collaborate, gain confidence in an evolving industry, and streamline time-consuming manual processes. With online sizing, selection, and configuration tools for measurement instrumentation, valves, actuators, fluid control, pneumatic and electrical solutions, engineers can confidently and accurately specify solutions for their unique requirements and process conditions. By employing
digital tools, engineers can configure instrumentation up to 93% faster, typically saving over 100 engineering hours annually.

For procurement professionals, MyEmerson includes access to online purchasing and supplier management resources. Once solutions are selected and configured by engineering counterparts, the information moves seamlessly to the procurement team – eliminating the need for manual handoffs and duplicate entry of model codes. Procurement personnel can then create requisition lists, generate quotes and automatically populate purchase orders. With greater visibility to order status and order history, procurement teams have access to the information they need to drive more efficient processes.

The MyEmerson development roadmap will centralize the management of software, hardware and workforce upskilling. With easier access to technical documentation, easier identification of device location, and the ability to initiate repair, replacement or service as needed, organizations gain maintenance and turnaround planning efficiencies. By moving from manual management of disparate software applications, updates and
licenses, users will be able to actively operate and maintain their software portfolio through a single-entry point. Both hardware and software records will be tightly integrated to relevant training, enabling trackable and accessible information in the same experience.

Mergers and Acquisitions Measure Industry Health

Mergers and Acquisitions Measure Industry Health

Here is a little bit of merger and acquisition activity of interest. One involving industrial cybersecurity; the other IT-oriented. Owl Cyber Defense and Tresys are coming together. I have been anticipating some consolidation in that space. Lots of startups. Can’t be that much business. In the other Dell Technologies appears to be rationalizing its organizational and investing complexity.

Tresys and Owl Cyber Defense to merge

Tresys Technology was recently acquired by DC Capital Partners, a private equity firm, and placed in a common holding company with Owl Cyber Defense. “The intention is to merge the two companies in the coming months, creating what we believe is the number one boundary security product and services company in the world. To both of us, nothing makes more strategic sense than this combination, and with DC Capital’s support we will be exploring additional strategic acquisitions to broaden our investment in innovation, geographies, and vertical markets. While we will continue to operate as separate businesses in the short term, over the coming months we will work on merging all operations and we will keep you fully apprised of those changes.”

Further from the message I received, “What does this mean for you? Both companies are fully committed to customer service excellence. You will continue to have access to our industry leading expertise in technology services and support; to help you select, configure, customize, maintain, and accredit solutions for any network separation issue. With our new ownership, there is a commitment to grow our international presence and resources, while markedly increasing the investment in R&D and integration services. You can expect to see an acceleration in the development and availability of new technologies, with deeper absorption of specific business use cases.”

The current plan with our investors is for Robert Stalick, CEO of Tresys, to lead the merged company. Michael Timan, CEO of Owl Cyber Defense, will continue to actively work alongside Bob in developing the vision, applying diligent process focus, and maintaining the sales and services engagement excellence for which we strive. “Our shared goal is nothing less than defining the future of network boundary security technology for the coming decades.”

VMware To Acquire all outstanding shares of Pivotal

I saw this story on Launch Ticker newsletter from CNBC.

Pivotal Software surges after VMware says it’s in talks to acquire the company.

Highlights:

  • VMware contributed to the formation of Pivotal in 2013.
  • Pivotal stock has fallen 66% in the past year.

Pivotal shares rose as much as 72% premarket Thursday August 15 after VMware said Wednesday it’s proceeding with an agreement to acquire all outstanding shares of Pivotal’s class A stock at $15 per share in cash, an 80.7% premium on Pivotal’s $8.30 closing price.

VMware also said in a regulatory filing that it has requested that Dell exchange all outstanding shares of Pivotal’s class B stock, other than class B Pivotal shares owned by VMware, for Class A VMware stock. Dell controlled almost 81% of VMware’s outstanding common stock and more than 97% of the combined voting power of VMware’s outstanding stock as of May 3. Dell and Pivotal are negotiating an exchange ratio for the shares.

The transaction could contribute to the further diversification of VMware, which has moved to collaborate with cloud infrastructure providers like Amazon in order to enable existing customers to run their computing workloads in whatever environment they like.

Shares of Pivotal have declined 66% in the past year. On June 5 Pivotal stock declined 41% after the company issued guidance that was below what analysts were expecting.

Pivotal went public in April 2018. VMware and DellEMC both contributed assets when Pivotal was established in 2013.

As a result of an agreement with Dell, VMware is the selling agent for certain Pivotal products, such that VMware collects cash that is then remitted to Pivotal, net of a contractual agency fee. As of May 3, VMware had a 16% financial interest in Pivotal and a 24% voting interest in the company.

In a statement of its own, Pivotal said on Wednesday that although it is in talks with VMware about a “potential business combination,” an agreement has not been made.

Mergers and Acquisitions Measure Industry Health

Government versus Business

I saw this note in today’s Espresso from The Economist, “France’s finance minister pledged to save jobs under threat at General Electric’s plant in the country’s north-east. The American industrial conglomerate, which made a loss of $23bn last year, had said it would cut around 1,000 jobs. Earlier this year GE paid France a €50m ($56m) fine for failing to create jobs after it took over Alstom’s energy business.”

Meanwhile in the US, officials are taking a second look at the results of Foxconn’s supposed multi-billion dollar investments. Politicians made great PR hay in 2017 with the announcement of a large investment in Wisconsin. Two years down the road, maybe the investment may not be so large and the employment a few thousand shy.

Governments can preach and give breaks and whatever, but market forces and bad management mean much more than governments for success. Take Alstom, for example. Perhaps there is French pride involved, but GE discovered that that particular acquisition was not all that it hoped for. One of a string of GE missteps. The French government can fine all it wants, but job creation depends upon good management and proper economic tailwinds.

I recently reported on the “success” of re-shoring manufacturing jobs, as the Reshoring Initiative would have it. Most likely it’s a result of financial analysts taking a closer look at supposed savings from only low wages discovering that other costs, such as logistics, insurance, loss of intellectual property, longer lead times, inability to quickly respond to changing markets all combined to make manufacturing offshore unappealing.

Most of the ills of manufacturing society I read about have a common root cause—less than competent management. I don’t see any quick fixes for that! And it won’t come from government fines generated by disappointment at lack of political gain.

Global Industrial Manufacturing Merger and Acquisition Activity Recedes

Global Industrial Manufacturing Merger and Acquisition Activity Recedes

Merger and Acquisition (M&A) activity in the industry segment I cover seems to have been hot for some time. I, along with others dependent upon the strength of the industry like say magazine media companies, view market consolidation as having the potential for decreasing revenues. Fewer companies makes for a less vibrant marketplace. Just take a look at the size of the magazines covering controls and automation these days.

Although this report covers a much broader segment than controls and automation, I always study the quarterly PwC M&A report carefully. And here is Q3 2018.

Global industrial manufacturing M&A results for Q3 2018 experienced a significant pull back in deal value from the Q2 2018 historic high with aggregate disclosed value of $11.7 billion, which is a 73% decrease quarter on quarter and a 52% decrease compared to the three-year quarterly average. The most recent quarter is directionally consistent with the 42% decrease seen in global cross-sector M&A deal value from Q2 2018. Since PwC’s last publication, the US administration has taken steps to implement tariffs on imported goods and a trade war has ensued. The uncertainty around how this will affect the M&A landscape more heavily weighed on industrial manufacturing than other sectors this quarter.

Looking at deal volume, there were 477 deals announced in Q3 2018 compared to 612 deals announced in Q2 2018, a 22% decline. The three-year average number of announced deals was 624 to which the 3Q 2018 results represent a 23% decline.

Worldwide cross-sector and industrial manufacturing deal making had been humming along with five and four consecutive quarters of deal value growth, respectively, prior to Q3 2018. The question remains if this contractionary quarter is the beginning of a trend or just a pause in action resulting from uncertainty in the economic, regulatory, and political environments.

Key trends/highlights

  • Total aggregate disclosed deal value sank 73% to $11.7 billion in Q3 2018, a 52% drop compared to the three-year quarterly average of $24.2 billion and a 73% decrease from Q2 2018 of $42.9 billion.
  • Total deal volume decreased to 477 deals in Q3 2018, a 23% drop compared to the three-year quarterly average of 624 deals and a 22% decrease from the 612 announced deals in Q2 2018.
  • There was $78.9 billion of deal value announced for the first nine months of 2018 compared to $60.4 billion for the same period of 2017, a 31% increase.
  • There were 1,738 deals announced for the first nine months of 2018 compared to 1,906 deals for the same period 2017, a 9% decrease.
  • A $1.2 billion merger was the largest deal announced in the quarter.
Mergers and Acquisitions Measure Industry Health

Emerson to Buy General Electric’s Intelligent Platforms Business

There was plenty of cool new products unveiled at last week’s Emerson Global Users Exchange. As a former product development manager, I liked the “peanut butter and chocolate” moment when Emerson’s engineers were trying to solve the human location in a plant problem. They realized that many customers already have a WirelessHART mesh network. Why don’t we use location tags with WirelessHART as the communications service? Cool.

Topping the news released during the week was announcement that Emerson has agreed to acquire Intelligent Platforms, a division of General Electric. Intelligent Platforms’ programmable logic controller (PLC) technologies will enable Emerson, a leader in automation for process and industrial applications, to provide its customers broader control and management of their operations.

This is a great acquisition. It reveals Emerson as a company that has its act together. This is the consolidation trend in the industry. Siemens has a complete portfolio (well, mostly). ABB recently acquired B+R Automation in a similar move. Schneider Electric added Foxboro and Triconex from Invensys to its mostly factory automation portfolio. So there are four major companies aligning their competitive offerings. And all are focused on digital transformation for their customers.

Even Rockwell Automation has built a process automation business over time. It recently shunned acquisition with its money and instead invested $1 billion for a little over 8% of PTC in order to achieve a closer partnership with ThingWorx (and a seat on the board). Maybe having an executive on the board, it can learn how Jim Hepplemann managed to build a company through acquisition.

Back to Emerson. GE IP (formerly know as GE Fanuc) has a line of PLCs, motion control, and HMIs. It hasn’t promoted its products for years, but they are still alive and well in Charlottesville, VA. This is a great strategic move.

As for GE? Well, we know that it is having a fire sale. I’d wondered about this part of the business. Now we all wonder about what’s left of GE Digital. We know from a Wall Street Journal article that it’s for sale. And also we know that the board just replaced the CEO evidently for not moving quickly enough. But…will anyone want GE Digital? I’m sure everyone has looked. Here’s a thought. What if it wound up with an IT company to complement these burgeoning IoT practices?

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