Schneider Electric Foxboro and Triconex Innovation Days 2019

Schneider Electric Foxboro and Triconex Innovation Days 2019

I’ve followed Foxboro and Triconex for many years now in my coverage of the process automation business. A great company that, not unlike too many others, suffered now and again with very poor management. The company has now settled in nicely at its home in Schneider Electric and appears to be healthy here.

Much credit must go to Gary Freburger. He provided a steadying hand as the leader before and through the transition, as well as guiding the integration into the new home. He is retiring at the end of the year. I’ve met a number of great leaders and a few stinkers in my 20 years at this side of the business. Gary’s one of the great ones. And his chosen successor (see more below) seems more than up for the task of building on his successes.

Marcotte Succeeds Freburger as Process Automation President

This week’s major announcement revealed that Nathalie Marcotte has been selected to succeed Freburger as president of its Process Automation business, effective Jan. 1, 2020.

Nathalie Marcotte Official Picture  jpg

“After a long, successful industry career, including more than 15 years serving Invensys and Schneider Electric in various senior leadership roles, Gary has decided to retire,” said Peter Herweck, executive vice president, Industrial Automation business, Schneider Electric. “We thank him for his many contributions and his strong legacy of success. We wish him well, and I congratulate Nathalie on her appointment. She brings more than 30 years of industry knowledge, expertise and experience, as well as a long record of success. I look forward to working with her as we build on the success Gary has delivered.”

Since joining the Schneider organization in 1996, Marcotte has held several positions of increasing responsibility, including vice president of Global Performance and Consulting Services; vice president, North America marketing; general manager for the Canadian business; and, prior to her current position, vice president, marketing, Global Systems business. As the company’s current senior vice president, Industrial Automation Services, she is responsible for Schneider Electric’s Services business and offer development, ranging from product support to advanced operations and digital services. She is also responsible for the company’s Global Cybersecurity Services & Solutions business, including the Product Security Office.

“As we move through this transition, it will be business as usual for Schneider Electric and our Process Automation customers,” Marcotte said. “Gary and I are working very closely together to ensure there will be no disruptions to our day-to-day operations. This ensures our customers have the same access to the exceptional people, products and technology they have come to trust and rely on to improve the real-time safety, reliability, efficiency and profitability of their operations.”

“I thank Gary for his many contributions to Schneider Electric and to our industry in general. Under his leadership, our customers, partners and employees have never been better situated to succeed, today and tomorrow,” Marcotte said. “This transition will have no impact on our technology strategy and portfolio roadmap. We remain committed to our continuously-current philosophy, which means never leaving our customers behind. Now, by leveraging the strength of the full Schneider Electric offer, we can take the next step toward enabling an easier, less costly digital transformation for our customers, while keeping them on the path to a safer, more secure and profitable future.”

Following the opening keynotes, I had the opportunity to chat privately with Freburger and Marcotte. Following summarizes a few key takeaways.

Digitalization and Digital Transformation.

These topics were prominently displayed in the ballroom before the keynotes. In fact the welcome and opening presentation were given by Mike Martinez, Director of Digital Transformation Consulting. These are common themes in the industry—in fact, not only process automation, but also at the IT conferences I cover. Each company has its own unique take on the terms, but it still boils down to data, data integrity, databases, and data security. All of which were discussed.

Key Points From the Presidents.

Integration across Schneider Electric. One priority has been working with other business units (and their technologies) across the Schneider Electric portfolio. This could be PLCs and drives, but power is a huge emphasis. Schneider Electric management wants very much for its process automation acquisition to integrate well with its historic electric power business. This is seen as a strategic opportunity. One thought-provoking observation—is the process engineer/electrical engineer divide as serious as the IT/OT divide? No direct answer. But these domains have historically had little to no collaboration. One to watch.

Close working relationship with AVEVA. If you recall, Schneider Electric bundled its various software acquisitions including the ones from Invensys (Wonderware, Avantis) and used them to buy into AVEVA—the engineering software company. Bringing automation and software together was a constant source of pain for Invensys. Schneider Electric dealt with it through a separate company. Along the way, cooperation seems to be better than ever. Marcotte explained to me that Foxboro combines its domain expertise with the more broadly general software platforms to achieve customer values. See for example my previous post on Plant Performance Advisors Suite.

Cybersecurity.  Marcotte has been leading Schneider’s cybersecurity efforts. These are seen as a key part of Schneider Electric’s offer. See especially the establishment of the ISA Global Cybersecurity Alliance. They don’t talk as much about Internet of Things as at other conferences, when I probed more deeply about IT, cybersecurity was again brought up as the key IT/OT collaboration driver.

It’s been a struggle, but the Schneider Electric process automation business (Foxboro and Triconex) seems as strong as ever. And the people here—both internal and customers—are optimistic and energetic. That’s good to see.

Open Process Automation Forum Update

Open Process Automation Forum Update

Our schedules finally aligned and I was able to catch up with Ed Harrington, director of the Open Process Automation Forum for The Open Group. A few months ago I talked with Gary Freburger and Peter Martin of Schneider Electric’s process automation unit. We discussed the OPAF and what had been going on since the ARC Forum in Orlando last February.

OPAF has laid out an ambitious agenda moving automation toward an era of open connectivity and interoperability.

The original plan broached a couple of years ago at ARC Forum by representatives of ExxonMobil and Lockheed Martin was to prod suppliers into reducing the problem of upgrading systems in the field without the huge expense of rip-and-replace. Considerable industry jockeying ensued. Schneider Electric (Foxboro) eventually taking a leadership position in the effort with assistance from Yokogawa and to a degree Siemens. Other suppliers are watching and evaluating.

Smaller suppliers such as Inductive Automation have become involved along with some of the major automation systems suppliers.

The OPAF specification is really a standard of standards. The group wishes to build upon existing standards, assembling them in such a way as to advance the cause of open automation.

Harrington told me that so far this year, the group has published three items (that are open to the public). One is a business guide, The Open Process Automation Business Guide: Value Proposition and Business Case for the Open Process Automation Standard.

The industrial control systems that manufacturers use to automate their processes are critical to the company’s productivity and product quality. To increase the business contribution from control systems, manufacturers need:
1. Increases in operational benefits from improved capabilities
2. Improvements in cybersecurity compared to currently available systems
3. Reductions in the system’s capital and lifecycle costs

The organization has also published The Open Group Snapshot—Open Process Automation Technical Reference Model: Technical Architecture and a white paper Requirements for an Open Process Automation Standard.

Harrington also told me to expect an announcement of further work at next week’s Open Group Quarterly Meeting in Singapore.

I have seen a number of these initiatives in my career. Few succeed in entirety. However, the thinking that goes into this work always moves industry forward. I don’t know if we’ll ever see a truly OPAF control system. Anything that brings more rationality to the market keeping in minds the goals of OPAF will do much for helping manufacturers and producers improve performance. And that’s what it’s all about.

Rockwell Automation Continues to Bet Big On Solutions Services

Is service and solutions the boost Rockwell Automation’s process automation business needs to take off? Talk on the street has it that the product side of the process automation business has not been as robust as it once thought. Meanwhile I’ve also been told that solutions and services, not products, has been the driver for growth in the Connected Enterprise initiative.

Then this announcement that Rockwell has acquired Maverick Technologies fits in all categories. Maverick is a major systems integration player. This following the acquisition of Automation Control Products, although both relatively small acquisitions, may show Rockwell Automation’s charted path to growth.

Two side notes in this announcement. First, this press release introduces Ken Champa as the new Sr. VP of the Control Products and Solutions business replacing Blake Moret in that role. The only mention I could find of him even on the Rockwell website is in Chinese. The second interesting thing (not mentioned in the press release) is that Maverick has become a major supporter of both ISA and MESA International over the past few years. Wonder if that will continue.

From the press release, “Rockwell Automation Inc. has acquired leading systems integrator Maverick Technologies to expand domain knowledge and help deliver innovative control and information solutions to customers in industries, such as chemical, food and beverage, and oil and gas. The acquisition significantly strengthens Rockwell Automation’s expertise in key process and batch applications to help its customers realize greater productivity and improved global competitiveness through process control and information management solutions”

“Industrial control and information solutions are most effective when they result from close collaboration between a knowledgeable supplier and the user,” said Ken Champa, Rockwell Automation senior vice president of Control Products and Solutions. “The combination of our global industrial automation leadership with MAVERICK’s platform-independent domain expertise will help our customers reduce complexity and realize unprecedented productivity.”

“We will continue to deliver our domain expertise, now with the power of a Fortune 500 industrial automation leader at our side,” said Paul Galeski, MAVERICK founder and CEO. “This creates the best combination available to help uncover the benefits of information that drives performance in process industries.”

Open Process Automation Forum Update

ABB Stabilizes Its Financial Ship — Industrial Automation

ABB has had a rugged financial period, but its latest financial results indicate a righting of the ship. I’m not a financial analyst; I didn’t sleep at a Holiday Inn Express; but, I’m interested in corporate strategies and performance especially among industrial technology suppliers.

What follows is mostly from the company press release. However read CEO Ulrich Spiesshofer’s remarks. There are two significant comments. One–recovery in the Power Systems business. ABB moved some talented individuals from the process automation business over to Power Systems. It wasn’t an overnight success, but the team has made an impact. Two–“productivity improvements”, which is usually a euphemism for fewer people doing more work.

Anyway, I noticed a little bounce in ABB’s stock price in the last week. Looks promising.

Full-year 2015 Summary:

  • Next Level strategy delivering positive results
  • Orders and revenues stable, order backlog up 5%
  • Operational EBITA margin up 60 bps to 11.8%
  • Operational earnings per share +5% (constant currency)
  • Cash return on invested capital up 70 bps to 13.4%; free cash flow +16%
  • Power Systems ‘step change delivers strong financial turnaround in 2015
  • 7th consecutive dividend increase to CHF 0.74 per share proposed
  • 4 new Board members proposed for election at the next annual general meeting

Q4 Summary:

  • Orders (-2%) reflect challenging market conditions; base orders -6%
  • Operational EBITA margin up 60 bps to 11.7%
  • Power Systems reached target margin corridor; strategic portfolio review of Power Grids on track
  • Accelerated productivity and cost out measures in white collar, supply chain and operational excellence
  • Net income of $204mn including a total $496mn restructuring and related expenses
  • Cash flow from operating activities +18%


Full-year and Q4 financials impacted by currency translation due to strong appreciation of US dollar

“We took decisive actions to improve our customer focus and realized profitable growth in target segments to mitigate the impact of significant market headwinds. At the same time, we simplified the organization, drove productivity improvement and accelerated our cost reductions,” said CEO Ulrich Spiesshofer. “As a result, we increased margin and free cash flow. The successful turnaround in Power Systems demonstrates our execution capabilities and our focus on sustainable value creation. With our strong financial position and a leaner, more market oriented organization we are well placed to manage through the global uncertainties which we will continue to face in 2016.”

Short-term outlook

Macroeconomic and geopolitical developments are signaling a mixed picture with continued uncertainty. Some macroeconomic signs in the US remain positive and growth in China is expected to continue, although at a slower pace than in 2015. The market remains impacted by modest growth in Europe and geopolitical tensions in various parts of the world. Oil prices and foreign exchange translation effects are expected to continue to influence the company’s results.

Full-year 2015 Group Results

“We are shifting our center of gravity, fully in line with our Next Level strategy by driving organic growth in targeted segments, strengthening competitiveness and lowering risk,” said CEO Ulrich Spiesshofer. “We drove technology leadership with the launch of YuMi, the first truly collaborative robot. We strengthened our technology leadership position in the area of the Internet of Things, Services and People, for instance with our innovative Octopus offering for optimized vessel operations. Furthermore, our focus on high growth markets such as food and beverage and Africa is paying off.”

Orders were steady for the year (down 12 percent in US dollars). Large orders (above $15 million) grew 10 percent (down 5 percent in US dollars) and offset a base order decline of 3 percent (14 percent in US dollars). The order backlog at the end of December 2015 amounted to $24.1 billion, an increase of 5 percent (down 3 percent in US dollars) compared with the end of 2014. The book-to-bill ratio remained steady at 1.03x.

Revenues were steady (down 11percent in US dollars) compared with 2014 as revenue growth in Power Systems and Power Products offset the decline in Discrete Automation and Motion and Process Automation. Service revenues grew 6 percent (down 8 in US dollars) and grew 1 percentage point as a percent of total group revenues (adjusted for divestitures; 0.5 percent prior to adjustment).

ABB continued to execute its Next Level strategy in 2015 which resulted in a 60 basis points improvement of the operational EBITA margin to 11.8 percent and free cash flow generation improving 16 percent in constant currency (6 percent in US dollars) to $3 billion. The main drivers for the group’s enhanced profitability were the successful turnaround of Power Systems and continued cost savings and productivity measures.

“The strong execution of our strategy is showing results,” said Ulrich Spiesshofer. “In 2015 we continued to focus on growth opportunities in a disciplined way while mitigating the impact of market headwinds through capacity adjustments, productivity measures and cost reductions. Transforming ABB, we have made good progress towards enhancing our performance culture by implementing our new performance management and compensation model for more than 70,000 people in 2015. The divisional realignment has been completed and the strategic portfolio review of the Power Grids division is to be completed in 2016 as previously announced.”

Net income for the year amounted to $1.9 billion and was impacted by $626 million of restructuring and related expenses for capacity adjustments and white collar productivity measures. Successful measures to improve net working capital contributed to higher cash flow from operating activities (constant currency) and free cash flow conversion and supported an increased cash return on invested capital2 (CROI) of 13.4 percent. Basic earnings per share in the period was $0.87 and operational earnings per share2 on a constant currency basis was $1.35, an increase of 5 percent.

Open Process Automation Forum Update

IoT Ready Automation Controller and Process Performance

Schneider Electric LogoThere were two other announcements at the Schneider Electric Global Automation Conference last week. One ties to the Industrial Internet of Things and the other to helping process control systems work better, longer.

PAC for IoT

First is a high-end Modicon M580 Ethernet programmable automation controller (ePAC). It features hot standby functionality (HSBY), native Ethernet, and embedded cybersecurity in its core. Schneider claims it as the first PAC built for the Industrial Internet of Things, but there have been many controllers with built-in Ethernet released over many years.

The built-in cyber security is interesting since that is the claim to fame for the recently announced Bedrock Automation controller. Obviously, this is a trend worth noting. And a future comparison of how each of those achieves its goal should become a to do item for follow up.

“We’re excited to introduce major innovation in automation with the new Modicon M580 ePAC,” said Jose Bonomo, vice president, offer management, Hybrid Systems, Schneider Electric Industry Business. “Cutting-edge functionality allows us to drive true customer benefit with a future-proof solution designed to meet the most pressing industry challenges.”

Additional features include reinforced cyber security through the AchillesTM Level 2 and ISA Certifications; native time stamping solutions; extension of architecture change during the run; and new topology capabilities.

Advanced system management

The company also has acquired LimeWare, a provider of system analysis and auditing software for Schneider Electric‟s Foxboro Evo process automation and I/A Series distributed control systems. The acquisition provides foxray software to help customers pinpoint and address critical industry challenges.

“Acquiring LimeWare and its foxray software is an integral part of our strategy to help our customers improve their operational integrity and operational insight, while future-proofing their operations,” said Gary Freburger, president of Schneider Electric‟s process automation business. “With additional investment in our flagship process automation offerings, we have even more power to address critical challenges around safety, reliability and efficiency. The ability to more easily tackle pain points, while driving value across the entire process automation chain, is one of the big ideas we are discussing with our customers in Dallas this week, and it remains a major differentiator for our process automation business.”

LimeWare was founded in 2006 and is headquartered in Porto Alegre, Brazil. Its foxray system management software complements the functionality of Schneider Electric‟s Foxboro Evo and I/A Series process automation systems. The solution offers additional capability for configuration management, alarm management, operator action analysis and overall documentation. It includes:

  • Change tracking with a complete change management workflow process;
  • Graphics visualization of the control block loops;
  • Integrity checks to solve all DCS configuration issues;
  • Scheduled reports;
  • Alarms and operator action management and tracking;
  • I/O and FBM spare reserve and tracking;
  • An advance query engine that can quickly fetch any DCS information.

“foxray software is the go-to tool for working with our control system database on a daily basis,” said Scott McWaters, process control engineer, Hunt Refining Company. “From easily locating and reserving spare I/O to improved troubleshooting and insight with the „where used‟ function, system health reporting, operator action reports, alarm history, inhibited alarm tracking and many other functions, foxray has greatly increased our efficiency. The software has been instrumental in our recent alarm rationalization efforts, and the alarm shelving tool will be used to help cut down on the number of call outs to our on-call engineers for nuisance alarm silencing. This contributes to our overall confidence in the integrity of our operation.”

LimeWare and its offerings will be fully integrated into Schneider Electric‟s process automation business and will continue to be managed by its existing executive team.

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