by Gary Mintchell | Aug 27, 2013 | Operations Management, Software
Tim Sowell, Invensys Fellow and VP of System Strategy at Invensys in the Common Architecture team in R&D, writes the Operations Management Systems Evolution blog on the Invensys blog site. He offers thoughtful pieces about where operations management software and practice could be going.
In his latest post, he talks about a dinner conversation with people in the industry and what his companions thought were the most important transformations occurring now.
I’d have to agree with them. People who talk to me echo much the same. Check out his blog page for the complete details, but here’s a teaser.
Agility to adjust to market conditions and change
The clear common requirement was the end to end operational alignment, understanding across the value chain. This holistic operational control, was a significant change in all three industries the sites had run with independence, in all cases the expectation was that site / regional uniqueness will be maintained but now alignment and traceability of action, product across the total value chain, e.g.| multiple assets/sites. A fascinating discussion here was both water and food talked that they expect this end to end to include outsourced assets that make up the chain, and effect the quality of the product or service that their brand is delivering. This is why it is the ability to federate assets and systems while still allowing site uniqueness is key. The inclusion of non company assets in the value chain and requiring operational traceability, accountability and agility to change are just around the corner.
The operational workforce transformation
Operational role retention / rotation. The impact of the operational culture, approach with gen Y and more holistic operations. These have covered extensively in the blogs, but is the area both of my dinner companions spent over 50% of dinner time.
The key areas are:
- The knowledge transfer from the retiring generation and how is the captured.
- The highest critical concern is the fact they are already seeing people in roles for much less time, and this is across the operational roles. So the issue is how to embedded and design the experiences to enable to become effective dramatically faster, e.g., 20% of the time today. Our conversation went away from industrial operational systems, to commercial systems, such as Facebook, banks, mobile phone applications. The key here is these applications are being delivered to market without having to train the users, they have intuitive experience that leads users through the steps. Agreement that this is a paradigm shift in operational design, from today’s approach where user interface is thought of well after the control, and we have engineers who are not human in factor people, designing the systems. All attendees said we need to continue this discussion, as this is not just control rooms, but reports, and information etc.
New Product Introduction
The life time of products and services is dramatically reducing, and the companies stated that seem to have ever change and introduction of new products and services. The move is to individual products and services for each consumer. How do we introduce, absorb these new products and services to the operational systems that will deliver them in a timely manner without significant error.
This could be considered agility, but both wanted this pointed out separately as it is a real dynamic that effecting them, vs the infrastructure and assets that are also changing and must absorb agility of change. An intriguing point here was that they commented that operational system and automation system absorb new product introductions without change, but all commented on the challenge of new assets with existing systems requiring federation into the system, and how do introduce new products procedures to operational staff. So the discussion for new product introduction was not just for systems, but also for people to execute, how can they take the new product from the PLM system, and deliver the control, and instructions, across many sites with different systems, and different cultures.
Your thoughts
What do you think about all this? What would you add? Let me know.
by Gary Mintchell | Aug 19, 2013 | Automation, Operations Management, Software, Technology
I’ve often written about how automation and operations management professionals should think beyond their boundaries and look for new problems to solve. Invensys (Wonderware) has been working at just that idea. This is what they wanted to talk to me about during my appointment in Hannover, Germany last April. Here’s a release about a new initiative–in this case working with long-time partner Microsoft.
Invensys is working with Microsoft on CityNext, an initiative designed to help governments, businesses and citizens reimagine what is next for their cities.
Problem statement
According to the United Nations, for the first time in history, more than 50 percent of the world’s population lives in urban areas and nearly 70 percent of people will live in cities by 2050. This ongoing migration creates unprecedented opportunities, but also intensifies problems such as aging infrastructure, hazards to public health and safety, pollution, crime and traffic. Through the CityNext initiative, Microsoft and Invensys will help leaders do “new with less.” By combining the power of technology with innovative ideas, CityNext will connect governments, businesses and citizens with city services that increase efficiencies, reduce costs, foster a more sustainable environment and cultivate communities where people thrive.
Invensys, through its Wonderware software product line and partner solutions, provides solutions that help cities provide essential, life-sustaining services like clean drinking water, sanitary wastewater treatment, reliable electricity, safe transportation and other services. Operational information of practically any kind can be securely viewed in real time from anywhere at any time, from a single, integrated and open Wonderware software platform.
“Our participation in Microsoft CityNext demonstrates our commitment to helping cities be smarter, more sustainable and more innovative now and to modernize for the future,” said Rob McGreevy, vice president of platforms and applications for Invensys. “Microsoft’s latest technologies will provide us with greater opportunities to help our municipal customers transform and modernize their city operations using familiar, secure Wonderware technology and devices. Through this program, cities will be able to engage their citizens and businesses using mobile applications and big data analytics, helping to accelerate innovation and opportunities through community development and workforce enablement programs.”
“We’re thrilled to partner with Invensys on CityNext. Microsoft prioritizes putting people and partners first in our initiatives and CityNext is no different,” said Laura Ipsen, corporate vice president Microsoft Worldwide Public Sector. “Even though cities are feeling the strain from economic challenges, we believe a new era of innovation will create opportunities for people to utilize technology to accomplish what they never thought possible. We’re inspired by our diverse partner ecosystem and know that working together we can help cities realize their full potential.”
by Gary Mintchell | Jul 31, 2013 | Automation, News, Operations Management, Organizations
Schneider Electric CEO Jean-Pascal Tricoire
I decided to probe the depths of the Invensys Website this morning and found the following announcement that the boards of Schneider Electric and Invensys have reached agreement in which Schneider (or a wholly-owned subsidiary) will acquire all the shares of Invensys.
This is no doubt a mixture of good news and bad news for Invensys employees, business and the industry.
On the one hand, Schneider is much more stable at the top than Invensys. Not to mention financially stable. Invensys top management has been unstable, not focused, and obviously not really concerned with running a viable business.
On the other hand, Schneider’s direction over the past few years has been focused on energy–primarily electrical distribution and power quality. Its sole large venture into industrial automation software–the Citect acquisition–has not been managed for growth. Indeed, I seldom hear anything about that business. And that is mostly when I run into an old contact at a conference.
In like manner, Schneider has pretty much ruined a great old brand in Modicon. And, once again, news from the automation side of the business has been sparse for several years.
It will be interesting to see how Schneider integrates the many unfamiliar businesses–Foxboro/Triconex and Wonderware/Skelta. I, of course, hope for the best. If it leaves the three current Presidents in place and provide stability and investment, it can grow the business. It is certainly acquiring a lot of top talent. And maybe the combination really will provide “synergies” (I hate that word, since it is almost never true) that would reinvigorate the Modicon/automation line of business.
One factor probably not to be ignored is ABB. This move makes Schneider look more like ABB with new abilities to compete broadly. There could also be increased competition with Siemens in some areas.
Interesting times.
From the announcement that I lifted from the Invensys Website this morning:
The boards of Schneider Electric and Invensys are pleased to announce that they have reached agreement on the terms of a recommended offer pursuant to which Schneider Electric and/or a wholly-owned subsidiary of Schneider Electric will acquire the entire issued and to be issued ordinary share capital of Invensys. The Offer is to be effected by means of a scheme of arrangement of Invensys under Part 26 of the Companies Act.
Under the terms of the Offer, Invensys Shareholders will be entitled to receive:
For each Invensys Share: 0.025955 New Schneider Electric Shares; and 372 pence in cash.
The Offer represents a value of:
502 pence per Invensys Share, or £3.4 billion for the entire issued and to be issued ordinary share capital of Invensys, based on the closing price per Schneider Electric Share on 11 July 2013 (being the commencement of the Offer Period) of €58.06 and an exchange rate on 11 July 2013 of £/€ 1.1592. Based on the offer value of 502 pence per Invensys Share, the Offer represents a premium of approximately: 14 per cent to the closing price per Invensys Share of 440 pence on 11 July 2013 (being the commencement of the Offer Period); and 27 per cent to the volume weighted average closing price per Invensys Share of 396 pence in the three months to 11 July 2013 (being the commencement of the Offer Period).
Commenting on the Offer, Sir Nigel Rudd, Chairman of Invensys, said:
“Following the recent disposal of Invensys Rail, the agreement with the Pension Trustees and the re-organisation of the Group, the Invensys Directors believe that Invensys is strongly positioned to execute on its growth strategy going forward.
However, the Invensys Directors believe that the offer from Schneider Electric represents an attractive value for Invensys Shareholders and reflects the future growth prospects of the business and a significant proportion of the benefits which are expected to accrue from the strong strategic fit between Invensys and Schneider Electric.
Combined with the disposal of Invensys Rail and return of £625 million to shareholders, this represents a very attractive outcome for Invensys Shareholders. Furthermore, the members of the Invensys Pension Scheme will benefit from the ongoing support of a significantly larger, leading, global automation business.”
Commenting on the Offer, Mr Jean-Pascal Tricoire, Chairman of the Board and CEO of Schneider Electric, said:
“We are delighted to announce the combination of Invensys and Schneider Electric in what is an exciting day for the stakeholders of both companies. The addition of Invensys’ businesses will considerably strengthen Schneider Electric’s overall offering to its industrial and infrastructure customer base, reinforcing us as a global leader in energy management solutions integrating power and automation, as well as leading software for customer efficiency. The transaction will allow Schneider Electric to benefit from increased scale and realise substantial synergy benefits from the combination. We believe our offer is compelling to Invensys Shareholders who will realise significant value for their holdings while having the opportunity to participate in the future strengths of the combined business.
We warmly welcome Invensys’ team and believe that the combined business will provide new and larger growth opportunities for employees and customers as well as offering Schneider Electric’s shareholders significant future value creation.”
by Gary Mintchell | Jul 12, 2013 | Automation, News, Organizations
Henri Lachmann, Chairman of the Supervisory Board
I have been digesting the news from earlier today that Schneider Electric has put in a $5 billion bid for Invensys. I’m a bit surprised at the timing, but not shocked at the bid.
I thought maybe Invensys was positioning for a break up, with Foxboro/Triconex going to Emerson and maybe the software business spun off. But the company no doubt prefers a single sale.
Schneider no doubt is looking longingly at its European rival, ABB, which bills itself as the “power and automation” company. The two overlap in markets a little on the power side. Schneider essentially has no process automation. Its discrete (factory) automation business has been treated like the proverbial orphan child. Do you remember when Modicon was a force in factory automation? And, does anyone remember Citect–the software business it acquired years ago?
Almost all the press releases emanating from US marketing deal with energy issues and products. Very little on automation. Nothing on software. Of course, after Schneider acquired APC that company’s marketing team became the Schneider North Americas marketing team. I suppose they promote what they know.
Who knows, maybe Emerson’s David Farr will take the bait cast by the Invensys board and raise the ante. I doubt it, but I’m not an M&A genius.
Maybe Schneider has been benchmarking Siemens. That company had a poor record of integrating acquired companies. It has done a much better job lately. The UGS integration into Siemens PLM has been great.
Maybe Schneider can integrate Foxboro and Wonderware without killing them off. We can only hope.
A statement on the Schneider Website offers hope:
Schneider Electric believes that the strategic and financial rationale for this transaction, if consummated, is compelling. Schneider Electric is considering making an offer for Invensys in order to increase its focus on the attractive industry automation sector. The enlarged group would significantly expand its access to key electro-intensive segments where Schneider Electric offers leading low and medium voltage as well as energy management solutions. It would also gain a leading position in the fast-growing software business for industrial operational efficiency.
Tim Sowell, Invensys Fellow and VP of System Strategy at Invensys in the Common Architecture team in R&D, writes the Operations Management Systems Evolution blog on the Invensys blog site. He offers thoughtful pieces about where operations management software and practice could be going.
