Whenever I begin to feel down about humans and the human condition, whenever politics and social media crap get to be too much, then a story about the human spirit comes my way.
I met a couple of members of the Harting family at a tech event several years ago. The company exemplifies the “connection” part of The Manufacturing Connection even though I seldom acknowledge them
But to think, there the family was in the peace following the devastation of the Second World War starting a company that has grown and thrived for 75 years.
For 75 years now, the HARTING Technology Group has been driving technological change and providing decisive impetus for the future. The vision formulated in 1996 by the owner family “We want to shape the future with technologies for people” remains the guiding star of our entrepreneurial activities. September 1 marks the 75th anniversary of the founding day of the family company. The manufacturer of everyday products such as waffle irons and irons has evolved into a worldwide leading supplier of industrial connection technology for the three lifelines of data, signal and power, a global player fielding innovative products and solutions focusing on Industry 4.0 and digitization.
Wilhelm and Marie Harting opened the “Wilhelm Harting Mechanical Workshops” on September 1, 1945, in a repair workshop covering about 100 square meters in Minden, Westphalia. Wilhelm Harting initially concentrated on everyday consumer goods, which were in short supply after the war: Immersion heaters, hotplates, energy-saving lamps and electric firelighters that sold like hot cakes. His wife delivered the goods by bicycle in the surroundings of Minden and was paid with bread, bacon, eggs, and legumes. For copper and other raw materials, the company’s first buyer had set off to Cologne and Wuppertal with his rucksack. The return trip was on a coal freight wagon.
The nascent company had a stand at the first HANNOVER MESSE in 1947 and received numerous orders for alternators, starters, regulators, fuel pumps and ignition distributors.
The company grew rapidly and needed more space. From 1950 onwards, the company gradually moved to the neighbouring refugee settlement of Espelkamp. By 1955, the company already had 500 employees and was able to double its turnover to 8.6 million D-Mark within a year.
The Han (HARTING standard), patented in 1956 and a registered trademark since 1957, became the standard, the epitome of the industrial connector and laid the foundation for the ascent of the medium-sized company from East Westphalia. Thanks to the Han-Modular series, customers are able to achieve optimal design solutions for the supply of machines, systems and plants. Today, the Han-Modular represents the market standard for modular industrial connectors.
Like the company founders, Dietmar and Margrit Harting are also committed to the region. They support projects, initiatives and associations in the fields of culture, sports, education and science. Margrit Harting, until 2018 also Vice President of the Chamber of Industry and Commerce of East Westphalia in Bielefeld, has received several awards for these activities. She is Honorary Chairwoman of the Philharmonic Society of Eastern Westphalia-Lippe, Honorary Chairwoman of association for the promotion of the Minden-Lübbecke district, Honorary Chairwoman of the Local Cultural Agency Espelkamp, and honorary citizen of Leibniz University Hanover. In 2002 she received the Espelkamp Medal.
For many years, Dietmar Harting was active as a leading luminary in national and international associations and committees, including as President of the German Institute for Standardization (DIN), President of the German Electrical and Electronic Manufacturers’ Association (ZVEI), member of the Presidium of the Federation of German Industries (BDI), President of CENELEC (European Committee for Electrotechnical Standardization) and Chairman of the German Commission for Electrical, Electronic & Information Technologies in DIN and VDE (DKE). From 1995 to 1998, Dietmar Harting was a member of the “Council for Research, Technology and Innovation” under Chancellor Helmut Kohl and from 2004 to 2006, he was also active as a member of the “Partners for Innovation” initiative of Chancellor Gerhard Schröder and Chancellor Angela Merkel respectively. Several organisations honoured his high level of commitment with honorary membership or honorary presidency. In 2013, the Erich Gutenberg working group bestowed its “Praktikerpreis” (Practitioner Award) on Dietmar Harting.
In 1998, the entrepreneurial couple received the Order of Merit of the Federal Republic of Germany and in 2009 the Federal Cross of Merit First Class. In the same year, the city of Espelkamp acknowledged the Hartings by bestowing honorary citizenship. Dietmar Harting was also honoured with the Lower Saxony Cross of Merit 1st Class in 2004 and has been an honorary doctor of Leibniz Universität Hannover since 2010.
Dietmar Harting was Chairman of the HANNOVER MESSE Exhibitors’ Advisory Board for many years and also a member of the Supervisory Board and Executive Committee of Deutsche Messe AG. In 2008 he was awarded the Golden Trade Fair Medal. To this day, the technology group ranks as one of the very few companies to have been present at the trade fair every year without interruption.
In October 2015, after almost 50 years in the management of the Technology Group, Dietmar Harting handed over the reins as Chairman of the Board to his son Philip (46). Today, Philip Harting and his sister Maresa Harting-Hertz (Member of the Board for Finance, Global Purchasing and Facility Management) work closely with their parents Margrit and Dietmar Harting on the Board.
The HARTING Automotive subsidiary develops and produces charging equipment for electric and plug-in hybrid vehicles. HARTING is also making its key contributions to sustainability in the generation of regenerative energy and has long featured as an experienced and reliable partner to the wind turbine industry.
In recent years, HARTING has been increasingly relying on cooperation activities, networks and partnerships such as the MICAnetwork and the Future Alliance for Mechanical Engineering, with which Industry 4.0 and digitization are being driven forward, while shaping and co-determining the networking of processes and objects. The Technology Group regards partner networks as an ideal platform for the further development of Integrated Industry. In this way, the future can be shaped and designed with technologies for people and values created.
I knew when OSIsoft brought in VC money a sale was imminent. Sure enough. This morning’s blockbuster announcement proclaimed AVEVA the winner of the battle. $5.0 billion is a nice chunk of change for a software company, but the financials are solid and AVEVA should get a nice reward for its investment.
Rick Bullotta kicked things off this morning with a LinkedIn post “Boom. The value of the TwinThread and Aveva partnership just grew exponentially!” A number of interesting comments ensued.
Many questions involved Schneider Electric, owner of more than 50% of AVEVA. Will that make other industrial suppliers who partner with OSIsoft (Rockwell Automation, Emerson, et. al.) nervous about the neutrality of OSIsoft’s PI databases? At the earlier AVEVA virtual conference this year, Schneider’s CEO took pains to discuss the Schneider-AVEVA relationship and how AVEVA is run as a separate company. Time will tell, of course.
Another comment about the value if AVEVA can create some deep links into the PI historian with its other products. That would be an interesting competitive event.
I think the emerging digitization competition between AVEVA and PTC could be something to watch.
Pat Kennedy, founder and large shareholder of OSIsoft, retains a courtesy (and I’m sure strong advisory) position with the combined company. He also becomes one of the top 5 shareholders in AVEVA. That will make for some interesting board meetings.
Here is the announcement I received this morning:
AVEVA, a global leader in industrial software, and OSIsoft, a global leader in real-time industrial data software and services, have announced an agreement for AVEVA to acquire OSIsoft for $5.0 billion. AVEVA and OSIsoft will combine their complementary product offerings, bringing together industrial software and data management to help customers in industrial and essential organizations accelerate their digital transformational strategies as efficiency, flexibility, sustainability and resilience become increasingly urgent requirements for customers.
OSIsoft’s data management software will complement AVEVA’s comprehensive end-to-end engineering, operations, and performance offerings. Integrating OSIsoft’s PI System into AVEVA’s comprehensive software portfolio will create an integrated data foundation that can drive big data, Cloud and AI-driven insights to create meaningful business outcomes for customers. This combination enables AVEVA to grow and diversify the industries it serves as well as continue to expand its footprint in existing and new markets and geographies.
Together, AVEVA and OSIsoft can provide full-stack solutions that span edge, plant, and enterprise deployment models, strengthening AVEVA’s position as a global leader in industrial software. With a combined 93 years of operating expertise and experience, they share a history of meeting the rapidly changing and evolving needs of their industrial customers, built on foundations of customer centricity and world-class talent. In addition to sharing a complementary solutions portfolio, this transaction further validates AVEVA’s leading position in digitization and IIoT.
OSIsoft’s PI System enables customers to collect, normalize, store, and stream real-time, high-fidelity operational data to applications, analytics, and AI and ML platforms. PI System acts as a single system of record for operations data, designed for massive cloud-enabled scale and data sharing across enterprises, and enables insightful operations decision making. OSIsoft works with over 1,000 of the world’s leading power and utilities companies, 38 of the Global Fortune Top 40 oil and gas companies, all of the Global Fortune Top 10 metals and mining companies, 37 out of 50 of the world’s largest chemical and petrochemical companies and 9 out of 10 of the Global Fortune Top 10 pharmaceutical companies.
Building Stakeholder Value and Improving Sustainability
The complementary product offerings of AVEVA and OSIsoft will allow the combined company to continue to generate significant value for its stakeholders by creating new opportunities for innovation using new and emerging technologies. The two product suites are open and interoperable, and many customers leverage both solution sets today. As a combined entity, AVEVA and OSIsoft can further deliver on their sustainability goals, driving significant benefits and value for their customers. With broader, deeper scale and scope to lead the digital transformation of the industrial sector, the combined company will drive greater efficiencies and sustainability for many diverse essential industries, including consumer packaged goods (CPG), pharmaceutical, water and wastewater, and utilities, creating strengthened product offerings.
Commenting on the agreement, Craig Hayman, CEO of AVEVA, said: “Combining AVEVA and OSIsoft is yet another significant milestone in our journey to achieving the ambitious growth goals that we have set. This will not only help us serve existing customers better but also open the flood gates to new opportunities which will accelerate the delivery of our digitization vision. Data has been enabling organizations to more effectively determine the cause of problems by allowing them to visualize what is happening in different locations, departments and systems. This agreement will enable our customers to improve business processes as well as eliminate inefficiencies. We are extremely proud to be moving into the next chapter with an even stronger solutions portfolio as well as an ever-increasing and robust customer base which continues to make us leaders in our sector.”
OSIsoft founder and CEO Dr. J. Patrick Kennedy added: “Joining forces with AVEVA enhances and extends our ability to deliver on our key commitments to our customers, partners and employees. Together we will be better able to service the largest digital transformation projects in history, including across industry 4.0+ and IIoT. AVEVA’s interest in OSIsoft is a testament to our talented team, and the extraordinary value of the PI System as the real-time streaming data infrastructure that powers the industrial world. Today’s announcement is the culmination of a thoughtful search for a respected organization that would mesh with our own strong mission- and customer-driven culture. The next chapter in PI’s fifth decade will be exciting for our employees and customers, and I look forward to my continued involvement in my new role as the largest individual shareholder in the combined company and as Chairman Emeritus to ensure we realize the full benefits of this transaction.”
Blake Griffin, an analyst with Interact Analysis which is one market research firm whose methodology I like, has published a blog post reporting on his latest research into the low voltage drives market. Following a sales slow down this year, different regions of the world will see recovery at differing paces.
He also includes an analysis of the role of LV drives in applications such as predictive maintenance. I’ve been long impressed by the amount of motor, and even machine, performance data that may be gleaned from the sensors built into the typical drive.
As a company, Interact Analysis is positioned to model the impact of COVID 19. This is because of the MIO Tracker, which tracks and forecasts manufacturing output levels by country at the industry level. We also have a historical dataset to fall back on which reaches back to the 2009 financial crisis – an event that is comparable to Coronavirus in some key ways, and which has helped us to draw some conclusions about the short, medium and long-term effects of COVID 19 on the drives market.
For 2020, the report shows that a combination of COVID-related factors – such as stay at home orders causing a reduction in manufacturing output and demand, as well as factory closures and furloughed workers – will come together to cause a drop in the drives market of over 10%. However, the drop is not as severe as it was in 2009, and there is light at the end of the tunnel. There are strong prospects for a return to growth in 2021 and drives manufacturers and vendors should make their plans with this in mind.
Growth in the LV drives market sits just above that for the output of the manufacturing industry as a whole. This is a long-term trend and it helps lead to some key future conclusions about the drives market in the post-Corona world. Between 2007 and 2019, the underlying growth rate for LV drives was 3.8%; for the period 2020-2024, the forecast CAGR is significantly higher – at 5.3%. The implication is that the market will recover in a similar manner to how it did during the 2010-2014 period.
In terms of recovery to actual 2019 market levels, this is highly variable according to region. The earliest regions to recover to 2019 levels will be China, South Korea, and India – all of which will do so by 2021, and indeed China has already returned largely to normality. Meanwhile, France, Germany and Italy will not recover until 2024. In the case of Germany, this seems counterintuitive given how widely reported it has been that the country has managed the virus itself very well. The problem for Germany is that it is crippled by its heavy reliance on exports, many of which are to far more badly impacted countries. Of the top ten drives regions covered in the report, the UK stands alone as being the single worst impacted region and, even by 2024, will not have recovered to 2019 levels of drives sales.
The Trend for Low Cost Drives
The research shows that the trend for low cost, reduced functionality drives is becoming an ever more important segment of the market. Such drives tended to be cabinet mounted, to be rated at IP20 or lower, and to offer power ratings of 0.1-3.7 kW. Price points can be exceptionally low, with the most keenly priced products – generally 0.4 kW in Asia – coming in at around the $100 mark. The presence of higher regulations and, increasingly, tariffs, in the EMEA and the Americas is not stopping the growth in the low cost drives segment in these regions.
Hitting such a low price point requires advanced functionality such as encoder support, to be stripped out, although some still have additional plug-in options (e.g. for digital communications). ABB and Yaskawa have had low cost products since the mid-2000s, but the trend is being turbocharged by the rapid emergence of Chinese drives vendors onto the global stage, such as INVT and Inovance. While the high-end OEMs may have little use for low cost LV drives, many others report that they are very keen on such products because they can be bulk bought and easily stored to replace faltering drives as needed – helping to minimize production or machine downtime. Observing the behaviour of established vendors is key to determining just how marked the low cost drives trend will be, and seeing leading companies enter the low cost market such as Siemens (with the V20) or Yaskawa (with the GA500) is instructive.
Other Important Trends – Product Substitution and Predictive Maintenance
Other important trends include an increasing move for product substitutes actually displacing LV drives in certain areas. One of these is electronically commutated motors – or ECMs. ECMs are IP55+ rated brushless DC permanent magnet motors – similar to stepper motors. They are increasingly helping companies achieve energy efficiency objectives in high energy usage applications that do not require the computation capabilities an AC drive offers. Some can now achieve IE5 levels of efficiency, leading to dramatic cost savings. Uptake will be most notable in Europe where energy efficiency regulation is the most stringent.
Finally, a word on predictive maintenance… Drive manufacturers should move away from seeing predictive maintenance as a means of extending the life of only the drive itself. Though this is important, a larger consideration is about how to use the drive as a sensor to harvest useful data on motor health, preventing motor breakdowns on fast-moving production lines. A drive can produce data on motor behavior which cannot be produced by the majority of smart sensors. Namely, drives can produce a profile of the electrical behavior of the motor it is controlling. For example, if a motor is under undue stress, its electrical demands will increase. If this data is used in conjunction with smart sensors, it allows an additional source of data for triangulation which can improve the accuracy of machine learning algorithms. Predictive maintenance is one of the most important up-and-coming industrial trends. Forward-thinking LV drives manufacturers should act now to ensure they capitalise on this.
In a normal summer, I am wondering where my next topic for something to write about will come from. This, of course, is anything but a normal summer. On the other hand, despite travel restrictions and office restrictions and the like I have been flooded with information. Meaning, I’m catching up on news from June. My bad…
I first heard of the real-time agile developer platform from VANTIQ three years ago when I was at Hannover exploring the beginnings of the EdgeX Foundry from Linux Foundation. Then in June I was pitched a news release from it where it had partnered with RoviSys to create Covid safety apps for such facilities as manufacturing, healthcare, and more. As the PR account executive told me, “Real-time tech enables these facilities to detect and respond to, say, an infected worker or an accident – in seconds, not minutes or hours.” The partnership applications detect and contain Covid-19.
Beyond this application (detailed below), I talked with CEO and founder Marty Sprinzen about the company and the technology. I didn’t get a deep dive, but they essentially blend IoT and AI (how about that for buzz words in one sentence) to achieve an abstraction above the IoT such that others can develop cool apps. Such as this work with RoviSys. A company to watch, for sure.
RoviSys is an independent, global provider of comprehensive process automation, systems integration, and building automation solutions. Together, the companies will build applications—based on VANTIQ’s real-time, event-driven architecture—to track people’s movements and body temperatures to monitor environmental health. By pinpointing potentially infected individuals in real time, response teams can rapidly isolate people and execute critical mitigation protocols, from disinfecting contaminated areas to facilitating hospitalization for infected persons.
RoviSys brings domain expertise and reach in the chemical, petrochemical, power and energy, data center, building management, water and wastewater, paper and wood, utilities, and oil and gas industries. “Our customers need tools that help get operations back up and running as soon as possible,” said Bryan DeBois, Director, Industrial AI at RoviSys. “But ensuring employee safety is crucial. Reliable solutions are going to require real-time monitoring systems that can safeguard everyone in the workplace. The relationship between RoviSys and VANTIQ to rapidly build these mission-critical applications and systems for the industrial space is important today and in the foreseeable future.”
VANTIQ recently launched its Back-to-Work Accelerator product, which enables software developers to rapidly build real-time applications for safeguarding workplaces against the spread of COVID-19.
“Getting people back to work during COVID-19 means that we have to track people in time and space, leveraging IoT sensors, thermal imaging and other applicable technologies,” said Sprinzen. “We’re excited to work with RoviSys to build customized applications for specific industrial needs, using the VANTIQ platform to enable lightning-fast development for real-time, real-world environments.”
VANTIQ enables customers to build next-generation applications that combine real-world data and real-time events. Their agile development environment allows complex applications to be created in weeks with minimal coding, taking full advantage of artificial intelligence (AI), Internet of Things (IoT) and edge computing. VANTIQ powers a broad array of applications for smart cities, smart buildings, oil and gas, telecom, healthcare and other industries. VANTIQ was founded in 2015 by technology veterans Marty Sprinzen and Paul Butterworth, co-founders of Forte Software.
Founded in 1989, RoviSys is a leading independent provider of information management solutions, manufacturing automation solutions, control systems integration, building automation, and enterprise and industrial networks. The company is distinctly qualified to deliver solutions that drive productivity, improve product quality, increase asset utilization and integrate technology for the chemical, petrochemical, life science, consumer packaged goods, glass, metals, power and energy, data center, building management, water and wastewater, paper and wood, and oil and gas industries.
I love irony. No sooner had I discussed with a colleague about the time I worked for a couple of McKinsey alums than I received an email promoting a new study undertaken by, you guessed it, McKinsey. Actually the McKinsey Global Institute (MGI). The paper’s authors researched global supply chains very timely in light of the Covid-19 pandemic. The report highlights vulnerabilities in global supply chains and how resilience takes priority, calculating ongoing cost of shocks and prospects for production to shift.
Industries experience month-long disruptions every 3.7 years on average
Companies can expect supply chain disruptions to erase 40 percent of a year’s profits over the course of a decade on average—and extreme events take an even bigger toll
Up to a quarter of global trade flows could move to different countries over the next five years if companies restructure their supplier networks and governments take action. But moving supply chains is not the only way to build resilience.
The idea of chasing low-cost labor across the globe while ignoring supply chain risks and costs always seemed goofy to me. For, I didn’t waste my years as the unofficial chief manufacturing cost analyst for a medium-sized manufacturer. But here is some weighty analysis that emphasizes the risks.
Based on the frequency and cost of disruptions, MGI scenarios show companies in most industries can expect shocks to erase 45 percent of one year’s EBITDA on average over the course of a decade. A single extreme event could cause even bigger financial losses. On top of this bottom-line impact comes the additional cost of rebuilding damaged physical assets, losing market share to competitors that are able to sustain operations, and significant societal harm such as loss of life, loss of jobs, shortages of critical goods, and damage to communities.
Geographic concentration can often produce supply chain bottlenecks when a shock hits. MGI finds 180 goods that are exported primarily from just one country, worth $135 billion in trade annually. Another issue is that large multinationals can have thousands of suppliers—but most have little visibility beyond the top tier of those tightly interconnected networks.
Will companies restructure their supply chains as part of a flight to safety? Yes and no, the report finds. There is an economic logic behind the way industry value chains have evolved. Given the scale, complexity, and interconnectedness of value chains, they are harder to move than is commonly realized.
MGI estimates that 15 to 25 percent of global goods exports, worth $2.9 trillion to $4.6 trillion annually, could conceivably move to new countries over the next five years. This is based on both economic factors, such as the cost of relocating production, and non-economic factors, such as governments changing policy to promote domestic production of goods deemed essential or important to national economic security.
“The prospect of a significant geographic rebalancing in global supply chains represents a risk for the companies and countries that might lose out—but a potentially significant opportunity for those that manage to capture a share of this production. This could have important consequences for future growth and employment,” says Susan Lund, a partner at the McKinsey Global Institute. “But supply chains involve thousands of independent firms, reflecting specialization, access to consumer markets around the world, substantial sunk costs, and long-standing relationships. Relocating is not a simple task.”
To attracting more production, countries need to develop strong supplier ecosystems, specialized workforce skills, robust infrastructure, and an attractive business environment.
There is more to resilience than changing where goods are made, however. Operational choices and the structure of a company’s supplier network can heighten or lessen vulnerability to disruptions. Common practices such as sourcing from a single supplier, relying on customized inputs with few substitutes, and carrying substantial debt can magnify the financial impact of a shock if they are not calibrated to account for current levels of risk.
Among the steps companies can take are mapping the sub-tiers of their supply chains in detail and connecting them digitally for better transparency; building the capacity to flex production across multiple sites; holding more inventory; and strengthening their balance sheets.
The COVID pandemic is prompting action at a time when cost structures are changing across countries and revolutionary digital technologies are gaining traction in global manufacturing.
“Supply chain shocks are not a new phenomenon, but only a handful of leading companies have really moved to minimize their risk until now,” says Katy George, senior partner and global leader of McKinsey’s operations practice. “That’s largely because of a perception that resilience has to come at the cost of efficiency. But that’s no longer true. Now companies have new tools at their disposal to become more resilient and more productive.”
This week I am attending the Festo Virtual Trade Show and Conference . The website provider is the same one as the Danish company I “toured” last week. It is similar to a concept I saw 20 years ago, but modern technology and design have made the experience very good.
I sat in a couple of conference sessions deepening my understanding of the latest in pneumatics and digitization. The discussion of digitizing and motion was good showing examples from OEE and energy savings. I am not a fan of OEE, but many companies seem fixated on it. It is a number–but I learned how the sausage was made 30 years ago and I remain unconvinced of its real utility. However, if you can digitize to calculate OEE, then you have data you could use in better ways for decision making.
I also learned about applications in process and water treatment.
The metaphor is a trade show lobby with doors for the auditorium for conference sessions, the show floor, information booth. Entering the show floor, there are a number of icons representing booths. Click on a booth and you can choose from short video demonstrations, downloadable papers, and product overviews.
You can attend yet today. It’s worth a look to see what perhaps may be a chunk of the future. I miss the energy and serendipity of live events. But this is an efficient way to collect information saving both the exhibitor and me great expense.