Special Report
Keith Nosbusch, CEO, Rockwell Automation
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his is one of the few events that brings together manufacturing executives, policy makers, centres of influence and the media,” said Keith Nosbusch, Chairman & CEO, Rockwell Automation, during his keynote speech at the Manufacturing Perspectives press conference. “Rockwell Automation sales in 2006 were US$ 5.5 billion, up 11 percent. Our operating earnings increased 19 percent. These results are a credit to the dedication and hard work of more than 21,000 employees around the world. Rockwell Automation is customer driven. It listens to its customers, and responds to their needs with innovative, performance-based solutions that are serving a wide range of industries and applications. Its global business model is comprised of sales, operations and is focused on customer proximity.“
ccording to Mr Nosbusch, Rockwell Automation’s goal is to achieve more than 50 percent of its sales outside the US by 2009. “And we are well on our way as evidenced by our fourth quarter results. Emerging Asia is growing at 25 percent. Latin
Automation Fair 2006:
Manufacturing Goes Global
America, growing at 22 percent. And Europe, growing at 15 percent.” Rockwell Automation currently has more than a thousand people in China, and it is growing its footprint in Southeast Asia with a recently opened Singapore setup. “And we continue to spend in central and eastern Europe with the recent 30
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addition of our manufacturing facility in Poland,” said Mr Nosbusch. Mr Nosbusch identified four key drivers within the factory itself. Lower product cost and productivity, faster time to market, better asset utilisation and optimisation, and reducing the manufacturing business risk. At the end of the day, each one of these pro-
ductivity drivers is focused on improving the customer’s P&L or their balance sheet. So it is about what automation is doing to help customers be more productive, more efficient and improve their business outcomes, and their competitiveness on a global basis. It is a complex and demanding environment and collaboration is required
across the entire continuum. In conversation with many of its leading customers around the world, Rockwell has identified the following challenges. At the control level, customers want a system which can control all manufacturing processes, regardless of whether they are continuous, batch or discrete. Turning to the plant information level, leading edge customers want a system that addresses all the production disciplines needed to run a modern plant, from design, to production management, to asset management and beyond. And finally at the machine and processes level, leading edge customers want a whole range of qualification and electrical com-ponents, that are cost effective, reliable, safe and secure, and energy efficient. Mr Nosbusch says that manufacturers need to address all the realities of today’s manufacturing environment. Groundwork For Manufacturers For the first 10 years of his career, Jamie P Estrada, Deputy Assistant
Automation Fair 2006, Rockwell Automation’s annual automation extravaganza was recently held at the Baltimore Convention Center in Maryland. The event showcased latest product innovations and highlighted important global trends in manufacturing. By Goh Tz’en Long Jamie P Estrada. Deputy Assistant Secretary for Manufacturing, US Department of Commerce
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Special Report Secretary for Manufacturing, US Department of Commerce worked for the Intel Corporation. He personally witnessed how Intel’s productivity was impacted by automation technology, with every passing year. According to Mr Estrada, there were many variables at play, but perhaps the single thing that made the most difference was the role of factory automation. “When I started in Fab 9, there were these carts that were moving around all over the factory floor and I kind of had to get out of the way all the time. By the time automation systems were in place, there was tighter control, and (the carts) were elevated, moving all the heavy material out of the factory floor. You could really see the immediate impact that it had on productivity. So this sort of system became the envy of our customers and competitors as well. It didn’t take long for this automation system to also positively impact our product cost, which also became the envy of our competitors,” said Mr Estrada. “It’s companies like Rockwell that are making a positive difference for companies such as Intel.” Mr Estrada talked about the US Department of Commerce’s policies to enhance economic growth. US GDP grew at an annual rate of 4.1 percent in the first half of 2006. And since the beginning of 2003, Its GDP has averaged over four percent each year, exceeding the post World War Two average of 3.4 percent. In the past decade, job references increased by 30 percent and employment has increased in 48 of the states in the past twelve months. Louisiana and Mississippi were exceptions due to the devastating efforts of Hurricane Katrina. Manufacturing: An Asian Perspective Ko Kheng Hua, Managing Director, Singapore Economic Development Board (EDB), relates an incident where a business school professor recently told him, “The key trend is shrinking product life cycle,” and 32
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he labelled this phenomenon ‘PLC 361’. Mr Ko emphasises that ‘PLC’ does not mean programmable logic controller. What the professor meant, was ‘Product Life Cycle 3-6-1’ – three months to develop a product, six months to ramp (up production) to supernormal profits and one month to liquidate inventory. Mr Ko relates some trends in local manufacturing, seen from an Asian perspective. In the past decades, there has been the interplay of several migration trends in manufacturing. Firstly, there is the migration of manufacturing supply chains from US to Mexico, spurred by NAFTA. In Europe, there is migration towards Eastern Europe, attracted by lower cost, and in Japan, to Southeast Asia. At the global level, manufacturing supply chain migration has been observed, from North America to Asia, and from Europe to Asia, to leverage cost, market and talent. These tectonic shifts have caused companies to restructure their corporate strategies and business models, such as outsourcing and offshoring. They have also entreated nations to re-examine their economic development strategies.
trends can be observed. Foreign direct investment as a proportion of GDP in China has been falling for about 10 years. Although the absolute quantum of FDI into China continues to increase. So far, this year, the growth in FDI into China, not the absolute quantum, has been declining year-on-year. Some observers have commented that a lot of the manufacturing that can profitably be shifted to China, has already been done. Others point to China’s rising wages and land prices, high employee turnover, shortage of certain critical skills, and the strengthening of the renminbi yuan. At the same time, other Asian countries like India and Vietnam have lower entry costs and highly educated manpower. India, for example is moving beyond services, beyond IT, into manufacturing and there has been quite a number of recent investments in India. Hyundai Motor of Korea, is now making one car every minute, in the state of Tamil Naidu, in Southern India. They look forward to exporting 300,000 cars each year within the next two years. BMW, GM, Intel and others are also planning facilities in India.
High Tech Manufacturing In high-tech manufacturing, the US has widened its lead, observed Mr Ko. In fact, it has streamed ahead. In the last 10 years, US output share of high tech manufacturing actually increased from 25 to 40 percent of the world’s production. This high tech manufacturing, of course plays to US strength, high skills, powerful science and technology, brimming with entrepreneurial energy. It can be seen that high cost locations like US can still host manufacturing activities and in the Asia Pacific region, Japan has also been steadily picking up world output share for high tech manufacturing.
Pan-Asian Networks US stock of FDI in ASEAN far exceeds that of China or India. In other words, manufacturing investment continues to flow into ASEAN. An interesting trend which can be observed is the emergence of the Pan-Asian manufacturing network. Multinational
Foreign Direct Investment China has become the factory of the world. Investments are still going to China. However, some underlying
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➊ Ko Kheng Hua, MD, Singapore EDB ➋ Dave Leonard, VP, Desktop Switching Business Unit, Cisco Systems.
companies are building Pan-Asian production networks. And this is not driven by cost alone. Companies want to leverage on the comparative advantages of each country in Asia, and distribute their production activities optimally. Increasingly, companies are more becoming concerned with risk factors that may disrupt their manufacturing supply chain. For example, terrorism, bird flu, natural disasters, and even anti-dumping measures that are imposed on certain countries from time to time. Risk Spreading Companies want to diversify their risks by spreading their manufacturing across different locations and not to put all their eggs in one basket, be it China, India or any other basket. Three major high growth manufacturing regions have emerged: China, India, Southeast Asia, hosting many of the Pan-Asian production networks. There is a sharp increase in Southeast Asia’s exports of manufacturing products to China over the last five years. Once again, it can be observed that manufacturing is thriving in Southeast Asia. Within ASEAN, there is a free trade agreement in place now and the governments have committed to creating an Asean Economic Community (AEC) by the year 2028. This AEC will allow free flow of goods and investments and harmonise trade and investment rules, seamless border and customs clearance etc. By then, ASEAN will have become a highly competitive and huge common
Predictions in 1992.
market, one integrated production base. Relocating Value Chains Multinational companies are entering their entire value chains across Asia. In the beginning, western multinational companies came to Asia to produce cheaply, to leverage on the low cost labour and export of products essentially to western markets. And as personal income in Asia rises, these multinational companies began to sell to a huge and fast growing Asian market. Now MNCs are going beyond production and sales to locate their entire value chain of activities in Asia, including R&D innovation, product development, supply chain management. And this Asian value chain is integrated into the MNCs’ global value chain. These MNCs are capitalising on the huge talent pool in Asia, for R&D for example. Most of the sourcing today is originating from Asia. For example, Motorola has R&D sectors in Singapore, Japan and China, and global supply chain control in Singapore. Manufacturing Networks According to Dave Leonard, Vice President, Desktop Switching Business Unit, Cisco Systems, Cisco used the network as a platform to drive various applications and value propositions to its customers. In 1992, the analysts of the time were projecting that there was going to be lots of interesting networking technologies that connected people and systems together. For example, FDDI was a great
Ethernet became the leader.
machine-to-machine high speed Ethernet. ATM was a networking technology that many had forgotten about. But it was developed really for the sole purpose of delivering services that a lower cost network like Ethernet was not likely to. Realtime voice and video were a big part of the ATM value proposition. And then there was Ethernet which was the low cost leader. It was expected to come up to a certain level, and then just level off as people migrated to the two other more sophisticated networking systems. What actually happened is an interesting story about how technology evolves and how it develops. It turned out that Ethernet, with its simple and humble start, really became the leader. It grew into an over US$15 billion business and climbing rapidly. How did this happen? What was it about Ethernet? Was it a company like CISCO or other networking companies that chose Ethernet over these other technologies? Not really, according to Mr Leonard. CISCO at the time in the mid 90s was investing as much in ATM and these other technologies as well as Ethernet. But there was something about Ethernet that allowed innovation to be accelerated that was very important. Once that was started, it became an element of innovation cycles that kept the cost going down while new uses and applications came up. “With Ethernet, it was easier to take the technology from its humble
Ethernet for the factory floor. www.iaasiaonline.com
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Special Report
beginnings – 1 Mbps, 10 Mbps and say, why don’t you just make it run 10 times faster? Instead of reinventing everything from the ground up, lets just make it go 10 times faster. Those were actually the words that my boss used one day when we were talking about what should we do next on the networking perspective, said Mr Leonard. “Today, the Ethernet has grown ten times faster, by two or three times. It is up to 10 Gbps. And not everybody is in need of that, but it clearly shows the power of being able to scale a technology.” From a factory floor perspective, CISCO believes that the same kind of innovation, the same kind of move forward is very relevant. There are significant differences in what the factory floor and manufacturing needs from a networking base or platform. And that is a challenge for a networking company like CISCO. How do we connect things together on a factory floor? The figure above shows how CISCO thinks the Ethernet is evolving for the factory floor. First of all, basic connectivity was the number one step. The network is this entity that needs a link into the corporate network. However there are issues from a factory floor perspective like security and network segmentation that had to be addressed. And as the connectivity was delivered, the demand was: “If this is coming from this machine and this person, I want these kinds of network 34
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access rights, and not these others. I want to make sure that this data is encrypted because it is a customer piece of data.” The network has to provide that kind of service. Then, the challenge of connectivity to PLCs amongst themselves, with the newer machine interfaces and control network, put packaging, ease-of-use, the environmental factory floor into Ethernet switching. “Meanwhile, back in the IT space in the office, we were connecting phones and video to the network. There is a really interesting convergence of technologies. No longer do our customers need a separate phone network, a separate video network and a separate data network.” Power over Ethernet, a relatively simple concept, allowed wireless access points and phones to be powered up and became key ingredients to this converged network. Quality of service is something that Ethernet didn’t have to worry about in the early days, but once real-time video and voice came into the picture, real-time quality of service became a big issue. Back on the factory floor, trends such as wireless are becoming a key central ingredient to the networking story. Handheld devices like RFID scanners and wireless bar code scanners allowing information interactions from employees back into the systems and the rest of the network are becoming key elements of productivity. So wireless has become an important extension of the Ethernet link. Bridging Process & Discrete Understanding how to bridge the gap between process and packaging applications is a key highlight at the Automation Fair event. Rockwell Automation showcased four new product features that enhance integration, discussing its partnership with Endress+Hauser, one of the
world’s leading suppliers of process instruments, and unveiling migration plans for legacy DCS systems. “Eighty percent of plants have both process and discrete functions; however, the majority of manufacturers rely on different control platforms for different functions throughout the controls environment,” said Kevin Zaba, process business manager, Rockwell Automation. “By using a common control platform for both process and discrete applications, manufacturers are able to significantly increase productivity, reduce costs and improve ease of use across the plant floor.” Process solutions, which were featured in the Integrated Architecture booth, showcase the overall system capabilities from Rockwell Automation, batch tools, safety systems, advanced process control capabilities and migration solutions for legacy PLCs and DCS systems. Integrated Architecture Rockwell Automation unveiled the expansion of its Integrated Architecture production control and information system, including significant additions to the Logix Control Platform and FactoryTalk integrated production and performance suite. The additional functionality further aides real-time information exchange between production and the rest of the enterprise, improving user responsiveness, increasing productivity and safety, while reducing development, commissioning and
Platform for process automation.
builders through multiplant enterprises in automotive, food and beverage, life sciences, home/health/beauty, electronics and other industries. Integrated with several elements of the FactoryTalk suite, including recently released FactoryTalk Integrator and FactoryTalk Portal, the platform provides support for a variety of applications, from discrete to batch. operational costs. Integrated Architecture integrates discrete, motion, batch, process, safety, drives and information disciplines on a single platform. Service-Oriented Architecture
In Control Using sophisticated control, networking, visualisation and information technologies, the Logix Control Platform addresses a full range of control applications, integrating discrete, motion, process, batch and
softstarting, variable speed drives, distributed control and packaged motor control solutions, give customers vital operating data. HMI Conversion HMI Conversion Services from Rockwell Automation allow companies to leverage Rockwell Automation expertise to successfully migrate from PanelView to PanelView Plus operator terminals. These services provide benefits such as improved
Rockwell Automation has expanded the FactoryTalk integrated production and performance suite with the availability of FactoryTalk ProductionCentre. Built on the FactoryTalk service-oriented architecture (SOA), FactoryTalk ProductionCentre leverages the technology acquired from Datasweep to provide manufacturers with improved process visibility, backward and forward product traceability, and quality assurance across multiple industries. The FactoryTalk suite of plant-wide information software is built on a common set of services – the FactoryTalk SOA. “When we acquired Datasweep late last year, we announced that we would be extending our manufacturing execution system (MES) offerings and integrating the Datasweep Advantage product into the FactoryTalk suite,” said Kevin Roach, vice president of software, Rockwell Automation. FactoryTalk ProductionCentre offers maximum scalability for small machine
safety applications, while providing seamless information integration. It provides fully integrated, scalable solutions for the full range of automation disciplines including discrete, motion, process, batch, drive control, safety and information using a single control platform. Unlike competing control platforms, control disciplines are fully integrated throughout the controller family, using a single programming and configuration software package and transferring data via a single communications protocol – Common Industrial Protocol (CIP). Intelligent Motor Control Intelligence based on access to crucial operating and diagnostics information is the core of Intelligent Motor Control from Rockwell Automation. Networked Intelligent Motor Control solutions, including across-the-line starting,
process availability and production capacity, improved manufacturing quality and decreased long-term costs and unplanned downtime. Rockwell Automation assists at every step throughout the conversion project. Utilising applications designed to convert existing screens and code, Rockwell Automation engineers complete and test the screen conversion process and any required PLC code changes necessary for a like conversion. www.iaasiaonline.com
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