by Gary Mintchell | Jan 21, 2014 | Automation, Technology
There is definitely one executive out on the front lines providing thought leadership for what he calls the Manufacturing Renaissance in the US. Interestingly, he is German and CEO of a German company–well, regional CEO anyway.
Helmuth Ludwig, CEO of Siemens Industry USA, just held his second press conference of the year touting manufacturing improvements. First he was at the Detroit Auto Show discussing digital manufacturing. Now, he was promoting an article he has co-authored with Siemens Corp. US CEO, Eric Spiegel. The article was published in strategy+business, a publication of global management consulting firm Booz & Co.
Once again, Ludwig discusses a new wave of software innovation that he says is about to “transform industry—and give the United States the chance for a lasting edge.”
Ludwig looks at the numbers and notes, “The industrial sector in the United States is rebounding. Manufacturers are boosting output, building new plants, increasing exports, and creating better-paying jobs that require precise skills—and in the process are helping lead the U.S. out of the long, stubborn slump that followed the market disruptions of 2007. A growing number of political and business leaders, economists, and commentators are taking notice, and talking about a domestic ‘manufacturing renaissance’.”
Ludwig is convinced of the importance of software leading the way. Following are his “Software’s Impact on the Five Steps of Product Development and Production.”
- Product design: Increasingly powerful visualization and simulation software is enabling manufacturers to speed and improve product design, testing, and optimization.
- Production planning: Automation design technology makes it possible to digitally design entire factories or individual pieces of equipment, and then simulate and optimize against a range of production scenarios for cost, speed, productivity, utilization, energy usage, and quality.
- Engineering: Modern production may have hundreds of interrelated automation components. New software makes it possible for engineers to program and coordinate all automation tasks from a single portal, optimizing workflows and improving productivity.
- Execution: Manufacturing execution systems monitor production performance in real time, enabling short-term control of manufacturing output and long-term optimization of production-unit configuration.
- Service: Mobile devices, powerful networking, and “big data” analytics are enabling technology-based services opportunities such as remote monitoring and advanced predictive failure analysis that will reduce costs and improve utilization and productivity.
On the crucial importance of manufacturing to the overall economy, Ludwig says, “Beyond job creation, manufacturing plays a vital role in promoting innovation and long-term competitiveness. Every dollar generated by manufacturing supports US$1.48 of additional economic activity, according to the Manufacturing Institute, compared with $0.54 for retailing. And although manufacturing accounts for 12 percent of U.S. GDP, it provides nearly 70 percent of private-sector R&D and 90 percent of patents issued.”
And finally, he says, “To make the most of the manufacturing renaissance, however, the U.S. will also have to compete as a manufacturing location for high-value-added products designed for export. It is for this reason that the advantages the U.S. offers—as a base for the advanced, virtual-to-real manufacturing that is transforming the global industrial landscape—will become increasingly important. To understand why this transformation is so profound, it helps to look at how today’s advances fit within the historical context of manufacturing technology.”
In all the time since Siemens seriously entered the US market with the acquisition of the Texas Instruments PLC business in Johnson City, TN, quite frankly it has floundered. Market share dropped immediately, but then stablilized.
However, the leadership of Ludwig (and Raj Batra who heads the automation business and several others) has energized the company and made it much more competitive. Interesting times in the automation market in the US for sure.
by Gary Mintchell | Oct 31, 2013 | Commentary, News
I’ve had a bunch of things to report and analyze, just very little time. Travel and meetings are thought killers. Also, I try out so many tools that I sometimes sit and wonder whether to use my outliner (currently fargo.io from Dave Winer), or a text editor (recently I like Quip—quip.com–which is also a great collaboration tool) Quip or Write Pad or Write Room (never Word, by the way, too busy). Where do I store thoughts—outliner, Nozbe my GTD app or Evernote. I’m starting to settle into Nozbe just for GTD and lists, Quip for text, Fargo for longer things that need to be outlined.
Recently I talked with Bobby Bono, US Industrial Manufacturing Leader for PwC, about its latest Manufacturing Outlook survey and report. Notable are the comments about a skills gap.
I heard Rodney Brooks, founder of iRobot, talk about how we are asking the wrong question about whether automation (robots) are replacing jobs. That is very short-term thinking. In the longer term, we need to think about the skills shortage and people shortage as the later generations which are smaller in number than the boomer generation which is about to retire (although I figure I have a few years left).
This report, among other things, highlights that skills gap. Below is an edited version of the press release that went out regarding the report.
Optimism among U.S. industrial manufacturers regarding the global economic outlook reached the highest level since the first quarter of 2012, according to the Q3 2013 Manufacturing Barometer, released today by PwC US. In the third quarter of 2013, 40 percent of respondents expressed optimism regarding the world economy for the next 12 months, up from 31 percent in the prior quarter and 29 percent from the third quarter of 2012.
The primary growth driver remains the U.S. economy, with 60 percent expressing optimism about the domestic outlook. In addition, 78 percent believe the U.S. economy grew in the third quarter, up six points from the prior quarter and representing the highest level since 2006. The outlook for the U.S. continues to contrast with the international picture, where optimism regarding actual revenue contributions in the next 12 months remained low at 30 percent, down two points from the second quarter and off eight points from last year’s third quarter.
“The divergence in viewpoints regarding the U.S. and world economic outlooks narrowed somewhat in the third quarter. Optimism regarding the global economy improved, but uncertainty remained prevalent, marked by persistently low expectations regarding the level of international revenue contributions going forward,” said Bono. “Despite the uptick in global economic sentiment, the U.S. remains the growth driver in the industrial manufacturing sector, with continued signs of healthy demand, pricing strength, new product investment and hiring. Overall top line growth expectations remain moderate and management teams are continuing to take a careful approach to capital allocation and cost management, while preserving liquidity.”
Reflecting the healthy level of optimism pertaining to the domestic economy, 82 percent of U.S. industrial manufacturers surveyed expect positive revenue growth for their own companies in the next 12 months, with only two percent forecasting negative growth. The projected average revenue growth rate over the next 12 months remained moderate at 4.2 percent, down from 4.6 percent in the second quarter and last year’s third quarter. Only seven percent forecast double-digit growth, while 75 percent expect single digit growth.
With regard to capital spending, 48 percent of industrial products manufacturers surveyed plan major new investments of capital during the next 12 months, up eight points from the prior quarter’s 40 percent, and on par with a year ago (49 percent). The mean investment as a percentage of total sales was 6.5 percent, higher than the prior quarter’s four percent, and representing the highest level in the past nine quarters.
Plans for operational spending also rose. Looking at the next 12 months, 78 percent of respondents plan to increase operational spending, up five points from the second quarter. Leading increased expenditures were new product or service introductions at 55 percent, up 10 points from the second quarter and representing the highest level in the past seven quarters. This was followed by research and development (R&D) (38 percent) and information technology (35 percent). Plans for new joint ventures and strategic alliances also rose, while spending forecasts for M&A and overseas expansion remained low. In fact, the number of respondents indicating the potential to acquire another business was 17 percent, less than half the level of last year’s third quarter.
“Management teams are continuing to focus on boosting organic growth, with an emphasis on new product launches and investment in R&D and technology,” Bono continued. “This is indicative of the mixed global outlook and overall moderate revenue growth expectations. In an uncertain environment, industrial manufacturers are managing risk and concentrating on strengthening their products and services. They are doubling down on what they do best in a quest to expand market share.”
The latest Barometer also showed that hiring plans are on the rise, with expectations reaching the highest level in five years and the second highest quarterly percentage in the past 10 years. The majority, 58 percent of U.S. industrial manufacturers surveyed, plan to add employees to their workforce over the next 12 months, up 16 points from second quarter 2013 estimates. Only three percent plan to reduce the number of full-time equivalent employees, and 39 percent will stay about the same. The most sought-after employees will be skilled labor (35 percent), professionals/technicians (35 percent), and production workers (30 percent).
Despite healthy hiring expectations, the survey identified headwinds in securing qualified workers. Three-fourths (77 percent) of respondents cited a need to fill certain skill gaps over the next 12-24 months, with only 23 percent claiming to have all the right skills needed at present. The biggest skill gaps were in middle management (70 percent) and skilled labor (67 percent). At the same time, half of U.S. industrial product organizations admitted to having open positions that they were unable to fill with skilled employees.
“In a limited job market, it is troublesome that three-fourths of panelists have reported a skill gap, with half of those companies acknowledging difficulty in filling these key positions,” Bono commented.
Regarding potential growth barriers over the next 12 months, legislative/regulatory pressures were the most cited at 58 percent. Lack of demand was the second most cited barrier at 45 percent, but it was down from 67 percent a year ago when it was the chief barrier to growth. Competition from foreign markets was also high at 32 percent. Other potential barriers on the rise in the third quarter included lack of qualified workers (22 percent), capital constraints (20 percent) and oil/energy prices (28 percent).
by Gary Mintchell | Sep 24, 2013 | News, Operations Management, Organizations, Software
Not a blockbuster, but a very interesting acquisition that consolidates another part of the HMI/SCADA product category. Invensys has acquired InduSoft, a provider of HMI and embedded intelligent device software for the automation market. Headquartered in Austin, Texas, and founded in 1997, InduSoft has delivered more than 250,000 HMI software licenses to more than 700 customers worldwide, primarily industrial computer manufacturers and machine and system builders, who embed InduSoft’s software into their products.
“The acquisition of InduSoft represents the continuing execution of our strategy to strengthen our portfolio through inorganic means, enabling us to target additional segments across our portfolio,” said Ravi Gopinath, president of Invensys’ software business. “InduSoft strengthens and broadens our leading software solutions portfolio, particularly in the embedded HMI segment, and provides a continuing driver for growth. They have a proven and experienced team who we are very happy to welcome to Invensys.”
“Combined with Invensys’ existing software offerings, our capabilities and expertise in the OEM and machine-building segments allow us to provide a broader, end-to-end HMI, SCADA and MES solution to our customers,” said Marcia Gadbois, president of InduSoft. “Together, our software tools will make it easier for them to integrate their information and automation systems. They will continue to work with the same strong InduSoft team, and we will ensure they continue to receive the exceptional products and service they have come to expect from us. But now they will be backed by a company with global capabilities and an excellent worldwide reputation for providing industry-leading HMI, SCADA, historian and advanced applications such as MES software and solutions.”
“With InduSoft we can now offer everything from basic embedded HMI devices to manufacturing operations, asset management and ERP integration,” said Norm Thorlakson, vice president, HMI and supervisory software and solutions, Invensys. “InduSoft technology quickly makes us more competitive and gives us immediate entry to new customers and a stronger OEM sales channel, with a focus on machine builders and embedded systems. We are confident it will make us much more attractive. Wonderware users will now be able buy industrial devices, machines and computers with InduSoft software, while companies that are using InduSoft software will be able to expand their solutions with Wonderware supervisory, historian and manufacturing operations management software.”
InduSoft will continue to be managed by its existing executive team, adding employees to Invensys operations in the United States, Brazil and Germany.
