by Gary Mintchell | Dec 13, 2011 | Operations Management
Taking a break from meetings in Chicago yesterday, I was tipped to a rumor that Sudipta Bhattacharya was out as CEO of Invensys Operations Management. Eventually, I received a statement from Invensys. My news report is at Automation World. Back in is Mike Caliel.
You may remember Caliel as CEO of Invensys Process Systems (an assemblage of Foxboro, Triconex, Avantis and SimSci-Esscor) when the company’s InFusion and ArchestrA products were announced. He left the company supposedly because he wanted to live in Houston and the main office was in Foxboro, Mass. His replacement nearly destroyed the company. Bhattacharya, then president of Wonderware, was tapped to form IOM by adding Wonderware to the mix.There’s no doubt that he turned things around financially. But perhaps he was unable to unify the company.
Caliel was hugely popular at Foxboro, so the comments amongst the perennial complainers on Jim Pinto’s Weblog showed delight and joy. But, I would caution them that there will be no return to “the good old days” because times have changed. And he was the leader whose strategy has led to much of what we see now. And many “Foxboro” people are in senior leadership positions. They aren’t all Wonderware.
I offer some analysis at Automation World. To expand a little, this move creates a lot of questions. Have the internal battles between Foxboro and Wonderware people reached a head? Will Invensys seek to split off Wonderware for eventual sale? Was Caliel brought back to a) strengthen the process business or b) prepare it for sale?
We will know soon enough. New leaders mean new teams. So we’ll be watching the moves and signals in the coming months. Perhaps we’ll get to chat with Caliel next month and see what brought him back.
by Gary Mintchell | Dec 8, 2011 | Operations Management
Andrew Hargadon is the Charles J. Soderquist Chair in Entrepreneurship and Professor of Technology Management at the Graduate School of Management at University of California, Davis and a Senior Fellow at the Kauffman Foundation. He is the author of How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Harvard Business School Press 2003). Hargadon’s research focuses on the effective management of innovation and entrepreneurship, particularly in the development and commercialization of sustainable technologies. I actually got to meet him once, but I’m sure he has no remembrance of that momentous event.
On a recent blog post, he noted, “Few of my students ever have, or ever will, walk a manufacturing line. Without that experience, it’s hard to understand how much innovation goes into building even simple products that lies beyond the surface “design.” The bulk of innovation needed to make a beautiful product goes into figuring out how to make it over and over again without sacrificing quality. It’s behind-the-scenes, decidedly unglamorous, usually made out of metal, and will last for decades. This was the innovation of our country’s past, and may be our future again, if we’re lucky (Andy Grove talks about this in How America Can Create Jobs). All of this is a preamble to a wonderful short video for Randolph Engineering, maker of high-end sunglasses, that offers a brief glimpse into the art of manufacturing.”
And here’s the video. Enjoy.
The Sound of Sight from Randolph Engineering on Vimeo.
by Gary Mintchell | Dec 6, 2011 | Operations Management
I’ve recently come across a number of positive indicators relating to the financial health of manufacturing. One came from the National Electrical Manufacturers Association (NEMA), another courtesy of The New York Times and the third from analyst Longbow Research.
Electrical Equipment
Results from NEMA’s latest business conditions survey showed the economic environment facing the North American electroindustry improved for a second straight month in November. Though the Electroindustry Business Confidence Index (EBCI) for current North American conditions slipped to 56 from 57.4 in the previous month, it nonetheless cleared the 50 mark above which more panelists than not see an improvement in the business environment. Twenty percent (20%) of survey panelists reported improved conditions in November compared to the previous month while only 8% experienced deteriorating conditions. The vast majority–72%–saw no change in conditions.
Likewise, while November’s EBCI for future North American conditions eased to 60 from 63 a month ago, the gauge of expectation six month hence continued to point in a positive direction. Some 32% of panelists said they expected conditions to improve to at least some degree over the next six months versus 12% anticipating they will worsen.
Auto Industry
From The New York Times, the Center for Automotive Research said it expected Detroit automakers to hire 14,750 hourly employees in the next four years. It expects about 15% in Detroit automakers while nearly 80% at suppliers.
It further says that about 590,000 people now work in the auto industry, 13 percent more than in July 2009.
Analyst View of Rockwell
Mark Douglass, senior analyst with Longbow Research, issued a report on Rockwell Automation (ticker symbol ROK) based on his visits during Automation Fair. Below are some summary points—note he lists Rockwell as a “Buy.”
• ROK recently hosted its annual analyst meeting and Automation Fair, its highest attended event in its twenty-year history with nearly 10,000 attendees. The general air of the Automation Fair booths was very positive, with many partners, suppliers and distributors having a positive outlook towards capital spending in automation despite what we see in the headlines and in the market.
• The key themes: plant-wide optimization incorporating Logix and PlantPAx platforms, scalability with new low-to-medium range systems providing greater flexibility and affordability for customers, particularly equipment OEMs, and the expansion of its variable frequency motor drives portfolio. With its value-add products and solutions, and position as one of only two global players that cover both process and discrete automation, ROK continues to expect to outperform in the $68-70B automation markets, which are expected to grow above global GDP.
• We also walked the show outside the analyst meeting. Overall the mood was upbeat not just for ROK products but the ancillary items displayed by a wide variety of Alliance partners. Most of the attendees indicated confidence heading into 2012 based on current order trends and backlog.
• We also conducted an international survey to check on demand and outlook in Brazil, Germany, France and Mexico. We provide some of the highlights from the survey in this report, but for further information see our other report published today “International Automation: Demand Mixed, Outlook Moderating Sharply.”
• We are maintaining our BUY rating and 12-month target price of $88 looking ahead to FY13E as we are more confident in our FY12 estimates and see a clearer path with large opportunities within both Architecture and Control Products as customers push for plant-wide optimization, sustainability and performance. We think ROK’s strong product offering will help it realize market share gains. Its mid-to-late cycle end market exposure (e.g. oil & gas and mining) provide excellent opportunities for growth through 2012 and beyond.
by Gary Mintchell | Dec 5, 2011 | Leadership, Operations Management
I ran across this interview with Richard Branson–the noted entrepreneur–in a response to the Steve Jobs biography where Jobs is described as being dictatorial and critical of employees. Branson says that delegation and compassion are the keys to running his $18 billion revenue Virgin empire.
Quotes the article: This philosophy is why Branson has so much time for games and charity:
I devote most of my time to activities like The Elders [A South-African NGO], but I make it a point to take care of things that are important to Virgin, like hiring its key executives. I interviewed Josh Bayliss, the Group’s CEO, in the back seat of my car while waiting in a traffic jam that lasted almost two hours. Now, he makes money so I can spend it. Learning to delegate is vital in business. You have to be willing to let people do good things and let make them mistakes…
I think that criticising people is counter-productive. A good leader is someone who praises a person for his or her best efforts, not someone who criticises. People know when they make mistakes. Of course, sometimes I just can’t resist and end up saying something, but never more than once. The secret of success is finding good people.
by Gary Mintchell | Dec 5, 2011 | Technology
I’ve written a news item at Automation World detailing the announcements from the media day in the Houston area last week where the Fieldbus Foundation announced new specifications around Remote Operations Management.
These are significant announcements that include such items as greater point count Remote I/O, incorporating wireless standards and using its High Speed Ethernet for backhaul. This not only will lead to more powerful remote SCADA, but it also will help empower the mobile worker.
