by Gary Mintchell | Feb 24, 2021 | Commentary, News
Manufacturing contraction lower than expected at 3.9%, driven by 1.9% growth in China
- Korea also leading the pack, but Germany falters
- Rubber and plastics machinery sector gains new significance in the light of the pandemic
- Semiconductors and electronics machinery sector emerges virtually unscathed
Market numbers and analysis from Interact Analysis are the ones I prefer. I’ve discussed methodology with executives and remain impressed with the rigor. Plus, they work with ITR Economics, a firm I’ve worked with (and miss reading Alan Beaulieu’s monthly column I sourced for another magazine). 2020 was a tough year everywhere but manufacturing for the most part surprisingly maintained output.
The latest quarterly update to the Manufacturing Industry Output (MIO) Tracker from Interact Analysis reveals unexpectedly strong overall global manufacturing performance.This is an upward revision on the previous MIO updates. At our most pessimistic point, we forecast a -4% contraction in industrial output for China. But the country’s rigorous suppression of the virus meant that production was back on track by May 2020, and the region is now posting 1.9% growth.
The Chinese recovery has had a significant impact on global growth, but it still represents considerable overall lost growth, putting China among the four global loss-leaders, along with India, Japan, and the USA, who have together racked up in excess of $200bn in lost MIO potential. Korea’s track-and-trace strategy has been hugely effective, and the country has seen strong growth in the electronics and components sectors resulting in overall negative growth of only -2.4% for 2020.
In Europe, Germany’s economy in particular has suffered, and recovery will be sluggish. Key factors here are the country’s huge reliance on export markets in Eastern Europe and globally, notably in the automotive and metals sectors which have both fared badly in the pandemic.
Where industrial machinery is concerned, one of the biggest casualties globally has been the machine tools sector, which has been hit hard by the major slow-down in the transportation industries. In Germany, machine tools is down 30% and this is reflected in weak performance in other European countries too, such as the UK where we also predict the machine tools market to be down over 30%. And Europe is not alone: few of the major regions are likely to return to 2019 levels in the next 6 years.
COVID-19 has driven, and will continue to drive, the demand for plastic and rubber medical supplies and personal protective equipment. However, the rubber and plastics machinery sector did experience a decline in demand in 2020 with Korea, India and the UK seeing contractions of the order of -15.8%, -13.9% and -13.4% respectively. However, all the top 10 regions are expected to recover to 2019 levels by 2023 at the latest. Strong APAC performance will bolster a growth that will see production values rise from $49.6bn in 2020 to $53.4bn in 2021.
Adrian Lloyd, CEO at Interact Analysis, says: “The semiconductor and electronics machinery sector is one of the few sectors to have come through the pandemic untouched. Most major regions are forecast to grow past 2019 levels in 2020, with global growth forecast at 9.9%. The few who don’t will be back up and running at a stronger level than 2019 by 2021. Growth will likely be slightly slower in 2022 and 2023 but will remain positive. APAC is the leading producer of semiconductor and electronics machinery. We forecast a 5-year CAGR for Korea of 9.1%. It’s a good sector to be in. But some regions really need to play catch-up.”
About the MIO
Our team of analysts works in close conjunction with ITR Economics, a renowned and reliable team of economists who help inform our macroeconomics forecasts. Our rigorous data collection, some of it anonymised confidential material from individual manufacturers and end-users gathered during hours of interviews either face to face or by phone, and some of it gleaned from the public domain, notably government policy and financial documents, means we have significant monthly data to pull on. With almost a full year’s worth of indicators available, it allows us to test our forecast of several scenarios and predict the overall yearly growth for 2020 and beyond more accurately.
About Interact Analysis
Interact Analysis is an international provider of market research for the Intelligent Automation sector. Our team of experienced industry analysts delivers research into three core sectors: industrial automation, robotics and warehouse automation, and commercial vehicles. Intelligent Automation – which is the integration of artificial intelligence and automation – will change virtually every industry imaginable. This combination enables greater efficiencies, productivity, convenience, and scale. It has the potential to drastically alter the outlook for many traditional industries such as manufacturing, healthcare and automotive as well as to lead to the emergence of entirely new industries.
by Gary Mintchell | Feb 1, 2021 | Commentary, News, Organizations
Software veterans Scott Genereux and Brian Shepherd join Rockwell Automation in executive leadership roles
The importance of this move by Rockwell Automation cannot be overemphasized. Bringing in two “outsiders” at SVP level is unprecedented. I’ve observed the company and its culture since the mid-80s as a customer, student, distributor sales rep, and writer. I’ve seen people come and go and talked with most of the former executive staff. The few men who did not come up through the same process as everyone else simply did not last. The culture chewed them up.
There have been rumblings for some time that the PTC relationship was not going as well as planned. I wouldn’t have been surprised. Bringing in an SVP who is a former PTC executive reveals the seriousness of CEO Blake Moret’s intention of remaking Rockwell. Moret brought an immediate breath of fresh air to the organization upon his appointment. Bringing in two software senior executives is more than I would have hoped for.
This is light-years from a former CEO’s comment to me about software being an “experiment.” Software is now serious business. And just in time. I don’t think Rockwell has missed the market. But the competitors have been building out strategies for a few years. If these executives are successful and can navigate the Rockwell maze, you’re seeing the re-birth of the company.
Rockwell Automation announced two key additions to its executive leadership team, naming Scott Genereux senior vice president and chief revenue officer and Brian Shepherd senior vice president, Software and Control, effective Feb. 1. Genereux and Shepherd will report to Chairman and Chief Executive Officer Blake Moret.
Genereux will have global responsibility for total revenue performance and will oversee Rockwell’s global sales and marketing strategy and functions, with specific focus on increasing software sales and annual recurring revenue (ARR). Shepherd will lead the operating segment that includes control and visualization software and hardware, information software, and network and security infrastructure, which was created as of Oct. 1.
“Scott and Brian add great new perspectives and depth to their respective positions,” said Moret. “Scott has tremendous experience leading enterprise software and hardware global sales teams, and is perfectly suited to help us build executive relationships with customers as we play a larger role in their enterprise-wide digital transformation. Brian brings deep industrial software product management experience, and he understands the value of our partner ecosystem. As software continues to play a larger role in our future value, these two leaders will play a key role in executing Rockwell Automation’s strategy to accelerate profitable growth.”
Genereux joins Rockwell with more than two decades of sales and management leadership experience. Most recently, he served as executive vice president for Worldwide Field Operations and chief revenue officer for Veritas Technologies, a leading provider of cloud data management solutions. Prior to that, he led sales and strategy for Oracle Corporation’s cloud infrastructure business. Genereux’s career also includes senior sales and marketing positions with QLogic, Data Direct Networks, and Hitachi Data Systems.
“With an expanding portfolio of technologies that spans SaaS, cloud, machine learning, and data analytics innovations, Rockwell Automation is at the forefront of industrial digital transformation,” said Genereux. “Nobody is better positioned to help organizations transform their supply chains and modernize their business practices with sustainable technology breakthroughs. I am very excited about joining the Rockwell team as we grow the company across both emerging and established industries worldwide.”
Shepherd brings extensive experience in leading strategy definition and end-to-end development of software solutions for manufacturing companies. He most recently served as president, Production Software and Smart Factory, for Hexagon AB. Before that, he worked in a variety of senior leadership roles at PTC, including executive vice president and general manager of PTC’s Enterprise Software segments. He has strong technical expertise in design, simulation, manufacturing planning and execution, as well as process and quality data analytics.
“Rockwell Automation has assembled a tremendous portfolio of technologies and solutions to enable our customers to accomplish their digital transformation journeys,” said Shepherd. “I’m excited to join the company at this important inflection point in strategy and execution.”
The Software and Control operating segment was created in October and had been led on an interim basis by Chris Nardecchia. Nardecchia remains at the company in his ongoing role as senior vice president of Information Technology and chief information officer, reporting to Moret. The other two operating segments that were created in October remain unchanged. They are Lifecycle Services, led by senior vice president Frank Kulaszewicz, and Intelligent Devices, led by senior vice president Fran Wlodarczyk.
At the bottom of every press release is a blurb where the company describes itself. This is a new blurb. It’s interesting. This is along the lines of another company’s long-term statement of “solving big engineering challenges.” This vision statement sets forth an admirable goal—beyond just technology or products.
Rockwell Automation Inc. is a global leader in industrial automation and digital transformation. We connect the imaginations of people with the potential of technology to expand what is humanly possible, making the world more productive and more sustainable. Headquartered in Milwaukee, Wisconsin, Rockwell Automation employs approximately 23,500 problem solvers dedicated to our customers in more than 100 countries.
by Gary Mintchell | Jan 20, 2021 | Commentary, News
Short answer: I haven’t a clue.
And if anyone tells you that they do, rest assured they are just guessing.
I just took a break to watch the pomp and circumstance of swearing in a new President of the United States. A continuous tradition of 220 years of peacefully transferring power from one man to the next. Maybe someday while I still live we can make the pronoun general instead of gender specific. But, we now have a new guy.
I have written a column for an Italian magazine, Automazione Oggi, for many years. They asked me four years ago to devote a column to what Donald Trump might mean for manufacturing. My current column there contains a few thoughts about Joe Biden. The problem with these pieces is really two-fold. First, I don’t prognosticate. I’m not a soothsayer or fortune teller. As Yogi Berra supposedly said, “It’s tough to make predictions, especially about the future.” Second, almost no politician knows anything about manufacturing other than a few statistics they are fed. Same with technology. I think Obama tried to be tech savvy, but he wasn’t. Trump was a real estate guy and TV star.
However, the US government has promoted some good things about technology and manufacturing. Just not as focused as, say, Germany’s Industrie 4.0 initiative. That has huge backing within the country. I have on my shelf The Dream Machine: J.C.R. Licklider and the Revolution that Made Computing Personal by M. Mitchell Waldrop. The US Defense Department DARPA unleashed most of the technologies that we still use in technology.
Under the Obama administration, the Department of Energy initiated a number of manufacturing projects one of which became CESMII-The Smart Manufacturing Institute headed by my old friend John Dyck and staffed by a number of people I’ve worked with over the years.
Biden has many problems on his plate. I don’t think manufacturing came up very often in the campaigns. Some effort has been made to bring more actual manufacturing to the US. I don’t expect an emphasis, but I do expect some continuing attention to that issue. CESMII is making progress. If you are looking for a US response, I’d both pay attention to what it’s doing and also see where you can help.
Heck, I’m impressed when I find even a half-way knowledgeable discussion of manufacturing in the national media. I guess they all worked as interns on Wall Street rather than (like me) worked in manufacturing to help fund college.
by Gary Mintchell | Jan 13, 2021 | Business, Commentary, News
This information came to me about a month ago. I’m still catching up with filtering through all the releases from the last couple of months last year. Covid may have kept many people indoors, but it didn’t slow down work in engineering, marketing, or PR. This is a survey conducted by Google Cloud and the Harris Poll regarding the effects of Covid on manufacturing. This is a blog post from Google’s Dominik Wee, Managing Director Manufacturing and Industrial.
After facing severe headwinds from COVID-19, ranging from decreased orders to negative impacts on operations, manufacturers around the world have started to revamp their operating models and supply chain strategies—and now feel more prepared to successfully navigate future pandemics, according to our new research released today.
The key for manufacturers’ ability to transform—despite the ongoing pandemic—is their embrace of digital enablers and disruptive technologies. In fact, more than two in five manufacturers have increased their use of data and analytics, digital productivity tools, and public cloud platforms, irrespective of their location in the world.
“Manufacturers have always prepared for unpredictable events that could adversely impact operations,” said Bob Parker, Senior Vice President, Enterprise Applications, Data Intelligence, Services, and Industry Research for IDC. “But what makes COVID-19 so unique is its sustained nature that touches the supply chain, irrespective of geographical location, in a way we haven’t seen in our lifetime. As a result, we’re seeing an urgency from manufacturers to quickly put the right technological levers in place, sooner rather than later. While there may have only been initial conversations about digital transformation in the past, we’re now seeing a rapid acceleration of critical tools and technologies being adopted within the industry.”
Below are five noteworthy takeaways we’ve identified within our findings:
1. Not surprisingly, as with other industries, the pandemic has had a devastating effect on manufacturers overall. Nearly all of manufacturers (95%) believe their manufacturing or supply chain operations have been negatively impacted by the pandemic. The top three adverse impacts include lost productivity (46%), lower sales (44%), and increased lead times, possibly due to supply chain disruptions (39%). About a third of manufacturers have also experienced downward pressure on overall customer demand (35%), labor shortages (34%), and/or the inability to maintain a safe working environment (33%).
2. To overcome COVID-19-related challenges, manufacturers were forced to pivot their operating models and supply chain strategies. More than three-fourths of surveyed manufacturers (77%) said COVID-19 caused their companies to re-evaluate their operating model strategies. The most common reasons include an inability to collaborate effectively with value chain partners (41%), the inability to collaborate effectively with employees (40%), and a lack of the right technology to operate without a large number of on-site workers (39%).
3. Technology played the most critical role in maneuvering through the pandemic, particularly “disruptive” AI, robotics, and more. More than three-fourths of surveyed manufacturers (76%) revealed that the pandemic has caused their companies to increase the use of digital enablers and disruptive technologies such as: cloud, artificial intelligence (AI), data analytics, robotics, 3D printing/additive manufacturing, Internet of Things, and augmented or virtual reality. More specifically, the top three digital enablers/disruptive technologies that respondents are further utilizing are data and analytics (46%), digital productivity tools (43%), and public cloud platforms (42%).
4. Interestingly, despite many manufacturers not being prepared for COVID-19, most now feel prepared to successfully navigate future pandemics. As mentioned earlier, nearly (95%) believe their manufacturing or supply chain operations have been negatively impacted by the pandemic. That said, 82% of those surveyed now feel prepared to deal with another COVID-19-like event in the future. This sentiment could be related to how manufacturers successfully ventured into new verticals, such as providing ventilators and PPE during shortages and resuming investments in new digital factory plans.
5. Finally, the pandemic—and its aftermath on the manufacturing industry—has differed greatly by country.
1. In Japan, approximately half of manufacturers who cited a negative impact (51%) say that the pandemic has led to lower sales, compared to 44% globally.
2. In Korea, more than two in five manufacturers who cited a negative impact (43%) said that the pandemic hindered their ability to maintain a safe working environment, compared to 33% globally.
3. In France, nearly half of manufacturers (48%) felt equipped with the right technological tools to maintain business continuity in the first 1-3 months of the pandemic, compared to 37% globally.
4. In the UK, more than two in five manufacturers (43%) said that dependency on legacy technology has created more risk for their respective business operations over the next year, compared to 30% globally.
5. In Italy, more than a third of manufacturers (35%) felt that their IT systems lacked necessary redundancies, which undermined their overall operational resiliency, compared to slightly less than a quarter of overall surveyed manufacturers (23%).
6. In Germany, for 86% of manufacturers, COVID-19 has caused an increased use of digital enablers and disruptive technologies, compared to 76% globally.
7. In the United States, 64%of manufacturers have increased their use of data and analytics, compared to 46% globally.
Research Methodology
The survey was conducted online by The Harris Poll on behalf of Google Cloud, from October 15 – November 4, 2020, among 1,154 senior manufacturing executives in France (n=150), Germany (n=200), Italy (n=154), Japan (n=150), South Korea (n=150), the UK (n=150), and the U.S. (n=200) who are employed full-time at a company with more than 500 employees, and who work in the manufacturing industry with a title of director level or higher. The data in each country were weighted by number of employees to bring them into line with actual company size proportions in the population. A global post-weight was applied to ensure equal weight of each country in the global total.
by Gary Mintchell | Jan 6, 2021 | Commentary, News
Sometimes when I’m considering manufacturing trends and requirements, I feel like Odysseus caught between Scylla and Charybdis. Regarding trade and manufacturing—one the one hand I’ve seen the evidence that international trade can be beneficial for everyone, while on the other, it is important that each country maintains a strong manufacturing base in order to assure survival.
Often these policies are decided by MBA-Finance types who only look at (usually incomplete) spreadsheets trying to find ways to save a dollar. Or politicians intent only on stirring up their supporters in payment for a vote.
Financial people have finally awakened to the drawbacks of having all manufacturing done at remote factories searching for the lowest possible wage. You don’t get a motivated and skilled workforce that becomes the source for much manufacturing innovation. You also don’t always win additional customers for your products in that other country. Your spreadsheets lead you to that dangerous path between Scylla and Charybdis.
Several organizations in the US have taken on the challenge to “rebuild” manufacturing in the US. These include CESMII, The Reshoring Institute, and the source for this report, AMT—The Association for Manufacturing Technology. Actually, my research so far seems to show that the US has been losing in the OEM and machine building market while it has maintained some final manufacturing, albeit with wages no higher than $15/hour. Not a good situation.
Help with the effort. Participate in this survey.
What products and components offer the biggest opportunities for reshoring? What advanced manufacturing technology is needed to enable the reshoring? To what degree did the pandemic disrupt supply chains, and how did it affect sourcing? To answer these questions and better understand the needs of the manufacturing technology community, AMT – The Association For Manufacturing Technology is asking industry, including OEMs, job shops, technology suppliers and distributors, to participate in an online survey to help in “Rebuilding the Supply Chain.” The survey is open through February 28, 2021.
The survey takes about five minutes to complete. Results will be published in March on the AMT website and on IMTS.com/supply-chain, a one-stop repository for supply chain information, content and guidance resources. One of the key survey questions is whether or not OEMs and job shops would value an AMT service to connect OEMs with manufacturing technology solutions for reshoring opportunities.
“Participating in this survey will provide valuable insight on sourcing issues and which processes, products and components face the most pressure from imports and which offer the biggest opportunities to reshore,” says Peter R. Eelman, Vice President & CXO at AMT, which owns and produces IMTS – The International Manufacturing Technology Show. “The input we receive helps AMT and IMTS develop resources to help companies make more detailed sourcing assessments and better-informed sourcing decisions.”
The survey is one of many activities related to AMT’s Rebuilding the Supply Chain initiative, which has gained greater visibility due to COVID-19 disruptions and shifting the emphasis of IMTS to further support the industrial base. Rebuilding the Supply Chain activities also include collaboration with the Reshoring Initiative, a not-for-profit organization dedicated to bringing manufacturing back to the United States.
by Gary Mintchell | Dec 11, 2020 | Commentary, News
Everyone is imagining a post-Covid time, most likely coming by May or June 2021, wondering how many changes we’ve made this year to meetings, conferences, church services, and other gatherings. I have been receiving a steady stream of announcements for 2021 technology conferences. All of them up until May will build upon the tech foundations pioneered this year.
Many of the conferences have been well put together. They have packed information in a succinct package. I could actually attend several conflicting conferences without the hassle of either trying to travel to each or blow some off. There are benefits. As the year went on, some of the trade shows got interesting by adding Zoom or other technology to allow “booth chats” or “booth appointments” where a visitor could discuss products and questions in real time with a live engineer.
I’ve talked with many people about their reactions to church (for the Christian among you). Even Roman Catholic ladies were quite satisfied to watch church from home. The many varieties of Protestants seem to have adapted to staying home, as well, except for a small portion of the more conservative evangelicals who needed to brave exposure to Covid-19 due to the need for companionship (and many people I know did that and became infected, but that’s another story for another blog site).
This is an ideal time to leverage all of these experiments and experiences and look at the second half of 2021 and beyond as a time to do things differently. I would still like to see some in-person gatherings. I miss the conversations, meeting new people, personal contact that you get from being together. It has gotten to the point, though, that conversations have taken the place of actually going to sessions. I’d love a blend of learning online and meeting in person.
What triggered this post was this announcement from PTC about its LiveWorx conference. It is moving toward a continuous model strung out over the year rather than one shot at one time. Interesting. We’ll see how that works for it.
This upcoming year, LiveWorx is going to be a little bit different.
LiveWorx 2021: The Limited Series is a year-round high-impact digital program. Each episode will take its own approach to delivering fresh and relevant insight on digital transformation for the industrial enterprise in a TV show-style format. Throughout the year, viewers will hear perspectives from thought leaders, subject matter experts, technology practitioners and familiar faces from PTC as well.
There are two ways to watch: episodes will air live on key dates and will also be available afterwards on-demand, so viewers can pick and choose whichever is more convenient.
More details will be announced soon, so be sure to subscribe for LiveWorx 21 updates to learn more as 2020 turns into 2021.
Registration for LiveWorx 2021: The Limited Series will get underway in early 2021. The first episode is scheduled for early spring, with more to come afterwards throughout the rest of the year.
Zoom fatigue is very real at this point, and it’s worth noting that these episodes will be delivered through concise and high impact TV show-style broadcasts, each with a run time of less than two hours.
For a comprehensive rundown of general information about LiveWorx 21, visit our FAQ. If there’s anything additional that you’re curious about, you can always ask us here as well.
2020 has been a year unlike any other. Get ready for a whole new LiveWorx! We can’t wait for you to join us for this unique program in 2021.
