by Gary Mintchell | Apr 7, 2016 | Manufacturing IT, Operations Management
I will be attending Hannover Messe in a couple of weeks, therefore you will read much about digital manufacturing leading up to that week, during that week, and recapping the week.
That is not a threat or a warning. It is meant to tempt and tease you. Even though Siemens has been touting the concept for many years, digital manufacturing is here, gaining steam, and solving real manufacturing problems.
I will have two clients at Hannover. While they are paying some of my expenses, in return I will get a ton of inside information. One company is Siemens. It always has a huge presence and unveils new products and technologies. I anticipate a deeper dive into digital manufacturing and the latest on TIA Portal, among other things. The other company is Dell. It has been holding roundtable discussions of thought leaders on a variety of topics. I’ll be moderating one at Hannover on Internet of Things. The lineup of participants promises to generate lively discussion.
One blog I follow in the space “Manufacturing Transformation” begun by Apriso, now part of Dassault Systemmes. This recent post on retired Boeing and Ford CEO Alan Mulally discussing digital manufacturing is instructive.
At Boeing, where he was CEO of Boeing Commercial Airplanes, he pioneered the use of a new generation of computer-aided design (CAD) software that revolutionized manufacturing; then, before retiring as president and CEO of Ford Motor Company in mid-2014, he led the 112-year-old automobile maker’s turnaround from a US$17 billion loss at the end of 2006 to profitability by 2008 – without the aid of government bailouts.
Digital Manufacturing
[From the blog] For example, Mulally believes that the distinction between well-established companies that participate in more traditional industry sectors – ones that existed long before the start of the dot-com era – and so-called “new economy” companies heavily involved in the technology sector will become increasingly blurred.
“I find the whole discussion about digital versus non-digital companies very interesting, but it’s just not true,” he said in a wide-ranging interview exclusive to Compass. “Digital technology, the Internet, information processing and the ever-improving quality and miniaturization of sensors and robotics will enable the quality, productivity and transformation of all industries around the world. All companies will be brought together by databases and systems thinking. Individual companies simply will need to decide which things they are working on to add value in which industry. The enabling technologies will be exactly the same.”
It’s refreshing when someone of that stature “gets it.” The digital transformation beginning with design and product lifecycle management through operations & maintenance which includes what we call the Internet of Things, already provides competitive benefits to companies that have adopted it wisely.
by Gary Mintchell | Jan 25, 2016 | Automation, Commentary, News, Technology
Make no mistake about it, Siemens in “all in” on industry 4.0, otherwise known as digital manufacturing. As the company experiences some restructuring, the PLM business continues to add companies and technologies to its digital manufacturing business.
A news item from Reuters, also reported in many outlets this morning, says that Siemens is set to acquire privately held CD-adapco. This computer-aided-engineering (CAE) developer focuses on simulating engines and other mechanical systems. It looks like a good fit.
Reuters says the deal would be for about $1 billion. The founder/CEO of CD-adapco passed away in September. Is widow has been running the company since then.
The race between Siemens and GE just keeps getting more interesting. Meanwhile, Rockwell Automation focuses on the factory and process automation space, preferring to steer clear of the engineering and PLM software space. Schneider Electric’s moves have been interesting, although its attempt to acquire Aveva collapsed. ABB has been busy divesting and refocusing following former-CEO Joe Hogan’s sudden departure.
Digital manufacturing, especially featuring digital simulation of manufacturing processes, is the core of Germany’s Industrie 4.0 initiative. GE is pursuing a somewhat similar path, but it prefers the strategy of “Industrial Internet of Things.” Targeting automotive and aircraft manufacturers, these strategies hold the promise of not only increased manufacturing and supply chain efficiencies, but also possibilities of new business and income models.
What will be interesting to watch is whether Siemens and GE get so large in the space that they can no longer efficiently manage the diverse portfolio.
by Gary Mintchell | Jul 30, 2015 | Commentary, Manufacturing IT, News, Operations Management, Software
OK, so I was wrong. Well, I was right and wrong.
My analysis of the Schneider acquisition of Invensys (Foxboro, Wonderware, et. al.) centered on European competition. Namely that as Schneider assembled a large industrial technology powerhouse it was looking at Siemens and ABB—its next-door rivals.
Schneider was already a competitor in the electrical power industry. Acquiring the process automation technologies business with Invensys brought it into more complete competition with ABB.
Software
On the other hand, I thought that Schneider might divest the software business partly because it never really had very much in the way of software.
OK, I was wrong.
Schneider announced last week that “it has reached a preliminary, non-binding agreement with AVEVA Group PLC (“AVEVA”) on the key terms and conditions of a combination of selected Schneider Electric industrial software assets and AVEVA (forming the “Enlarged AVEVA Group”).
On the surface this appears to be a strange marriage. In fact, my friend Walt Boyes did an anti-Schneider rant on his blog this morning. Amongst the rumors he alluded to about Schneider management and how Clayton Christensen’s analysis of acquisitions predicted that the acquisition would go south, he also misunderstood, I think, the implications of this move.
AVEVA is a construction engineering software company. It provides the front-end engineering for plants that Foxboro, Triconix, Avantis, and other ex-Invensys brands operate and maintain.
Design to operate
The upshot is that Schneider should be able to provide an end-to-end solution for process industries similar to what Siemens has done for discrete manufacturing with the integration of UGS and the Siemens PLM division.
By the way, this latter is an example of how a large company can beneficially absorb an acquisition. The merger has worked very well. Other European companies have closely watched this acquisition model. I believe that Schneider will have learned from it.
I wonder what implications for the OpenO&M Initiative and the OGI Pilot program—an ongoing effort to use standards to move data from the engineering design database to the operations & maintenance database. AVEVA was a key player.
Transaction details
It is expected that the proposed transaction would:
1. create a global leader in industrial software, with a unique portfolio of asset management solutions from design & build to operations, with both scale and a distinct market position to address critical customer requirements along the full asset life cycle in key industrial and infrastructure markets;
2. unlock additional value at enlarged AVEVA and Schneider Electric through the potential for material revenue and costs synergies, leveraging on complementary end-markets exposures, customer bases and product portfolios;
3. establish a ‘best in class’ management team and increased brand profile for attracting further talent; and
4. realize the full value of the contributed industrial software assets.
The enlarged AVEVA would have combined revenues and Adjusted EBITA of c. £534 million and c. £130 million, respectively. It is expected that the Enlarged AVEVA Group will continue to be admitted to listing on the Official List of the UK Listing Authority and to trade on the London Stock Exchange plc’s main market for listed securities. Schneider Electric intends to comply with the Listing Rules of the UKLA. As part of the transaction, Schneider Electric would contribute a selection of its industrial software assets to AVEVA and make a cash payment of £550m to AVEVA, (which would subsequently be distributed to AVEVA shareholders excluding Schneider Electric) in exchange for the issuance of new AVEVA shares, giving Schneider Electric a majority stake of 53.5% in the Enlarged AVEVA Group on a fully-diluted basis. Schneider Electric would fully consolidate the business in its Group financials.
In addition to any consultation procedures involving the personnel’s representative bodies that may be required, the transaction remains subject to, amongst other things, the completion of mutual due diligence to the satisfaction of both parties, agreement on the terms of legal documentation, the approval of the respective Boards of Schneider Electric and AVEVA, AVEVA shareholder approval and relevant anti-trust and regulatory approvals (if required). In accordance with the applicable law and regulation of the United Kingdom, a more detailed public announcement has been released today and is available on the AVEVA and Schneider Electric websites as well as on the AMF (French regulatory authority) website.
A further announcement will be made as and when appropriate.
by Gary Mintchell | Jun 22, 2015 | Internet of Things, Interoperability, Networking, News, Operations Management, Process Control
I have business related to an angel investment and too much other travel to attend this week’s Honeywell User Group in San Antonio and Siemens Summit in Las Vegas. Trying to get to both events was both expensive and too exhausting to attempt. I had one friend, at least, who was going to both. More power to Greg.
I’ll analyze from reports I see from those there and from press releases. I know that Honeywell Process Solutions anticipated one major security announcement at HUG, but I would have been gone had I decided to attend anyway.
Meanwhile, I’ve been writing about the Internet of Things, fieldbuses, and networks for some time. The ODVA reached out asking if I’d like an update on its process industry work with EtherNet/IP. Of course, was the reply. It has a stand at ACHEMA in Frankfurt (another place I could have gone…) and sent me this update that would be the centerpiece of its press conference there.
Along with Rockwell Automation’s entry into the process industry automation market, EtherNet/IP usage now must incorporate process industry standards to go along with factory automation (discrete industry) usage. Partner Endress + Hauser has been building out devices that are EtherNet/IP enabled. This is an interesting addition to process industry “fieldbus” market (I know, perhaps EtherNet/IP is not a “real” fieldbus, but it will be used like one).
This was ODVA’s first appearance at ACHEMA, where ODVA members and EtherNet/IP suppliers Endress+Hauser, Hirschmann, Krone, Rockwell Automation, Rosemount, Schneider Electric and Yokogawa have assembled a demonstration of EtherNet/IP to explain to visitors ODVA’s approach to the optimization of process integration. Illustrating typical process applications, such as clean-in-place, highlights of the demonstration include:
- Use of EtherNet/IP to connect best-in-class solutions and devices for process applications;
- Integration of traditional process networks, such as HART, Profibus PA and Fieldbus Foundation, into an EtherNet/IP network; and
- Movement of data between field devices, such as pressure sensors and flow meter, and plant asset management systems.
ODVA’s process initiative, launched in 2013, is intended to proliferate the adoption of EtherNet/IP in the process industries. Initial focus has been on the integration of field devices with industrial control systems and related diagnostic services, leading to a road map for adapting the technology to the full spectrum of process automation needs, including safety, explosion protection, long distances and comprehensive device management.
“EtherNet/IP is at the forefront of trends in convergence of information and communication technologies used in industrial automation. Although industrial Ethernet was first adopted in the discrete industries, today EtherNet/IP is widely adopted in hybrid industries and is spreading into process industries, said Katherine Voss, president and executive director of ODVA. “Because ACHEMA is an international forum for users in chemical engineering and the process industries as a whole, ODVA felt it would be helpful to the ACHEMA’s audience to broadly showcase to process users the opportunities for integration improvements, optimized network architecture and increased ROI that EtherNet/IP can afford.”
by Gary Mintchell | Mar 25, 2015 | Automation, Manufacturing IT, Operations Management, Technology
During my continuous research for topics such as Industry 4.0, digital manufacturing, smart manufacturing and the industrial Internet of things, I came across this Siemens PLM software blog.
In it, Zvi Feuer, Siemens PLM Software’s Senior Vice President, Digital Factory, Manufacturing Engineering Software, shares his perspective on “how Siemens helps companies worldwide to realize innovation in manufacturing.”
Feuer says, “I want to be able to offer our customers industry solutions which provide the means to turn any manufacturing operation into a high tech manufacturer. In order for us to sell not only the software but also usage methodologies And, in fact, to increase productivity with the customer and to help the customer deliver to his customers in a better and faster shape. This will obviously create opportunities for people, opportunities for jobs.”
Siemens executives have explained its digital manufacturing strategy to me for more than 10 years. And the vision has been remarkably consistent. The first conversations were even before the UGS acquisition that led to the Siemens PLM business.
PLM As ERP for Manufacturing
The blog refers to a white paper, PLM For Manufacturing, “If you are looking for ways to connect all domains of the design/build lifecycle, consider a manufacturing process management (MPM) solution. This provides an enterprise-scalable foundation that allows you to perform product design, while simultaneously optimizing manufacturing processes. This means that you can better manage lifecycle cost, meet launch dates and maintain product quality targets.”
That statement reflects Siemens thinking even before the acquisition. Is it possible to design not only the product but the manufacturing digitally, and then proof it all out digitally before even cutting the first steel.
“We believe that an MPM system that is part of an enterprise PLM system is the best way to move
forward. This will provide an environment that supports a flexible process plan capable of reflecting any changes to the product design or requirements. This might be called a single window for enterprise data management – a single application that supports the complete lifecyle of product data in an enterprise environment. The main idea is to provide users with one platform for all their data management needs. Teamcenter PLM software is the only comprehensive system that provides a platform in which users can conduct all their data management needs from engineering to manufacturing to execution.”
Is it sustainable?
This is a grand vision. It reads like Goldratt’s “The Goal” coming to life totally automated. But, there are inherent problems to the grand scheme. I have witnessed and otherwise seen the benefits of more and better information informing production/maintenance teams enabling better decisions and improvements. But to think that this could eventually happen without human intervention–I doubt that ever happens effectively.
The white paper also talks about complexities of manufacturing and software, then it argues that it would be better to put everything into one overarching software application. I would argue, along with my Lean friends, that this would just make for one very complex software application.
Any of us who have actually done automation know that when the application gets too complex, then it doesn’t work. It is not maintained. It is not understood. People begin developing their more simplified (and understandable) workarounds.
The vision is like most things I have witnessed over the past 40 years of applying technology. We develop something. We get benefits. We get over ambitious and build something cumbersome. People stop using it. We develop something simpler. People use it. And so on.
Digital manufacturing and Industrie 4.0? Interesting. The jury is still deliberating as to whether it is giving Germany the desired competitive edge in manufacturing.
