by Gary Mintchell | May 20, 2011 | Automation, Operations Management
Yesterday I wrote about my conversation with Sudipta Bhattacharya and the Invensys FY11 financial results. What I wrote was mostly congruent with my colleague Walt. He spent more time speculating on Invensys Rail–but I know nothing about that market and will leave that discussion for others.
He did mention that much of the future depends upon Invensys Operations Management selling more of its “Enterprise Control Systems”. This is a question often brought up by Jim Pinto. I’ve also heard at least one other editor ask “How many ECSs have you sold?”
This is a common misconception brought about by the marketing messages from Invensys Operations Management–and before that both Wonderware and Invensys Process Systems. They were in such a rush to establish a brand that they sort of left the details for another day.
So, free of charge, I offer this analysis. I think this is a Yogi Berra quote, “There is no there there.” ECS is not really a noun. Or better stated, it isn’t an SKU. It sort of reminds me of the definition of Sequential Function Charts in IEC 61131-3–“an organizing principle.” It begins with a platform–branded ArchestrA–that allows components of instrumentation, control and information to work together. It is componentized, such that it can be built a component at a time atop the platform.
That is the reason Sudipta emphasized to me the importance of all the Wonderware licenses sold over the past two years–and that those licenses represent the base upon which other ECS components can be sold and implemented.
Even the financial report notes that ECS results are spread among the three primary units of IOM. They don’t sell ECS. They sell instrumentation (yes, they are still in that market even though a couple of years ago it appeared that they would be exiting it), systems, advanced software together. The parts are unified as ECS.
So what is it? It is the coherent strategy IOM uses to market all its products and services targeted to the needs of each unique customer.
And yes Walt (and everyone else), you’re right, its future rests on how well it explains that to its customers and makes the sale. It is the future of the company.
by Gary Mintchell | May 20, 2011 | Operations Management
Just like I don’t usually cover financial results, I also don’t usually cover “wins.” Especially in the process systems business, PR people rush out releases for every new order. But in the case of these two from ABB, it signifies not only a trend, but a potential solution to a vexing problem especially with alternative energy sources.
The problem with solar and wind generation of electricity is that the peak generation from those sources seldom coincides with the time of peak demand. So, while there is some help to the grid, they do not alleviate the peak demand generating capacity problem–which is also generation at its most inefficient.
One potential solution is to find a way to store the excess electricity generated by these sources to be used when really needed. ABB is working on lithium-ion battery technology at large scale to tackle this problem.
In the first release, it announced it will partner with EKZ, a Swiss distribution utility, on a pioneering energy storage pilot project, said to be the largest of its kind in Switzerland.
Located in Dietikon, the pilot storage facility will be integrated into the utility’s power distribution network and evaluated in key areas such as balancing peak loads, intermittent power supply, and the viability of such a solution for grid optimization.
“Storage will play a key role in the evolution of more flexible and smarter grids as we address the challenge of accommodating growing amounts of intermittent renewable energies like solar and wind power,” said Oleg Aleinikov, head of ABB’s substations business, a part of the company’s Power Systems division.
ABB will supply and install the one megawatt lithium-ion battery-based solution with an initial capacity to store 350-500 kWhs (kilowatt hours) of electricity providing additional power to the grid on demand. EKZ will evaluate the connection and behavior of grid-linked battery storage and monitor various operational and economic parameters. The pilot is scheduled to be energized by the end of 2011 when EKZ will take over the operations.
In the second release, ABB announced it has commissioned its first DynaPeaQ energy storage installation for UK Power Networks at a site north of Hemsby in Norfolk, England.
DynaPeaQ was recently launched by ABB and is part of its family of FACTS (flexible alternating current transmission systems). It is a combination of SVC Light (static var compensator) technology with a highly scalable lithium-ion battery storage capability.
As part of the solution, renewable wind-generated energy from a local village will be fed into the power network. Some of this energy will be kept in reserve to support power supplies in the event of a fault, or to regulate the power flow to compensate for the intermittence of wind power. The ABB system includes eight stacks of 13 lithium-ion battery modules housed in a 25 sq. meter building. The modules will be continually charged and discharged, and can store up to 200 kilowatt hours (kWh) of electrical energy.
“DynaPeaQ is an innovative technology that advances the integration of renewable power generation, especially in weak electrical networks,” said Martin Gross, head of ABB’s Grid Systems business, part of the company’s Power Systems division. “It can play a useful role in the development of more flexible, reliable and smarter grids.”
DynaPeaQ technology enables dynamic control of power in the transmission system, improving grid voltage and stability, and leveling out power fluctuations in the case of renewable energies. The rated power and storage capacity is typically about 20 megawatt (MW) for approximately 15-45 minutes, but DynaPeaQ technology can be scaled up to 50 MW of power for 60 minutes and more.
by Gary Mintchell | May 19, 2011 | Automation, Operations Management
Bad news sells. If you are a TV or newspaper “journalist,” that phrase is your mantra. Well, this post isn’t about bad news. Invensys plc, and specifically for our purposes Invensys Operations Management, has released its Fiscal Year 2011 results which were overall positive.
The entire company showed revenues up about 9 percent at Constant Exchange Rates (CER) and operating profit up 6 percent. The Operations Management and Controls groups showed strong results, while Rail revealed “fewer large orders.”
Invensys Operations Management results revealed that it has exceeded the $2 billion mark in orders for the first time at $2.090 billion. This was a 19 percent increase over 2010 at CER. Revenues were up 12 percent at $1.8 billion and operating profit was $191 million up 31 percent.
I’m not officially a financial analyst and seldom report these numbers. These I believe are significant because of where Invensys and the Operations Management division were and how far they have come. And profits grew more quickly than revenues despite the fact that the division boosted employment by 9 percent or about 700 people to a total of 8,897. That’s a sign that both a better product/service mix and improved operating efficiencies are in place.
Sudipta Bhattacharya, Invensys Operations Management CEO, took some time today for a conference call with me to discuss the results. He attributes much of the division’s success thus far to focus on people and talent. He believes the company is an industry leader using social media internally for collaboration and innovation. One result of the focus lies in the 70 product releases made last year.
Some people have talked to me about a perceived decline in company interest in the measurement and instrumentation part of the business. In fact, factories are busy right now churning out products. Bhattacharya added that leadership has evaluated the portfolio and has been investing “where we can be competitive.”
An important foundation for the future is the Wonderware and ArchestrA platform. The division has sold more than 200,000 Wonderware licenses over the past two years. Says Bhattacharya, “This is significant because we bundle our higher level offerings such as workflow on top of that. It is the foundation of our Enterprise Control System solution, which is our strong differentiator.”
Invensys plc CEO Wayne Edmunds stated in the financial report, “Having worked closely with our businesses over the past two years as Chief Financial Officer, it is clear to me that we have three strong divisions, each with management strength in depth and the ability to create significant growth and value. Execution means having a discipline for linking people, strategy and operations to create sustainable value. To that end, we have decided to move away from an integrated operating model, with centralised functions and matrix management, towards a holding company model where divisional management has greater control and responsibility for their operations.”
When I asked about that statement, Bhattacharya noted, “We have always been empowered. This just adds to it.”
by Gary Mintchell | May 18, 2011 | Automation, Marketing
There is a new blog in the production and automation space – The Process Automation Insights Blog. The author is Dave Huffman. He’s with ABB. His first two posts are up and interesting. Hope he can keep it up.
The weather in western Ohio this spring has been wet and cold. Soccer games are never cancelled. Well, almost. So many fields have been closed this spring that I’ve spent many extra hours assigning referees to make up games. Most farmers have only had two days so far to get into the fields. We’re not in the dire straights of those along the major rivers, but it’s not fun here.
I went down to Dayton to a Leadership/Motivation seminar that touted some big-name speakers this morning. Rudy Giuliani was pretty good–but I’ve heard him before. After the hour-long sales pitch for a do-it-yourself stock trading Web site, I was motivated to find a decent place for lunch close to Wright-Patterson Air Force Base then on to a Pannera bread to work for the afternoon. Two hours to catch up on correspondance. <whew>
How do you feel about advertising? Like many of you (except for my marketing readers), I’m ambivalent. Maybe more so. Advertising in Automation World pays my salary, of course. But I hate to be innundated with it. On the other hand, if I’m in the market for something, then professional advertising is welcome.
Google knows that. So, it tries hard to figure out what your interests are and serve you ads that you will appreciate seeing rather than regard as spam. (Sort of the same with AW. We hope you are interested in manufacturing, production and automation–so the ads should be something you are interested in.)
Did you know that one of the key things in the algorithm Google has for awarding winners to its adwords auctions is how good your ad is? In my experience, I’ve seen people with terrible ads blame the media for its bad response. What if the response was proportional to the quality of the ad? Anyway, listen to this podcast presentation of TechNation with Dr. Moira Gunn as she interviews Wired Senior Editor Stephen Levy who wrote “In the Plex: How Google Thinks, Works, and Shapes Our Lives.” You’ll learn that and much more about Google.
by Gary Mintchell | May 12, 2011 | Automation, Process Control
On the road again–this time in the Milwaukee area attending the Expertune user conference. There were several great presentations (short, to-the-point, explained problem and results). I have never heard so many stories of oscillating control valves in one day in my life.
One key thing I picked up is the value of loop optimization as a key component of improving plant efficiency. The user/integrator stories uniformly concluded that if you first perform loop optimization and only then apply advanced process control then you will see maximum performance improvements.
The three major integrators talked about their processes–how they first benchmark, then come back with proposal and “guarantees,” implement the system focusing only on the agreed-upon tasks, then come back and measure.
DH Lee of APST in South Korea (whose list of projects was too long to write down) has helped his clients save an average of 2 percent of energy. Tom Kinney of Invensys Operations Management described a project to reduce flare gas. After study, they guaranteed 75 percent reduction. Got 84 percent. Georgia Persali of Accenture (yes, it does this type of work, too), described similar savings in a mining operation.
I also got an opportunity so sit on a panel discussing The Future of Automation. Very good discussion with the audience. I love meeting all the bright people in our industry. It was a cool day.
