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Automation Trends & Strategies
This week in Boston, ARC Advisory Group held it's 15th Annual Forum – Winning Strategies for Global Manufacturers. Andy Chatha, ARC President, addressed a crowd of 300 executives from leading manufacturers like 3M, Dow, ExxonMobile, Kraft, Ford, Honda and Shell, just to name a few. Also present were representatives from many of the major automation and enterprise suppliers. You would be hard-pressed to find another event that attracts such a high caliber crowd. And it’s no wonder…where else can you go to really find out what’s going on in the manufacturing industry? As thought leaders for manufacturing and the enterprise, ARC has their fingers on the pulse of manufacturers all over the world.
The landscape of global manufacturing is changing. New manufacturing plants are being built in Asia, Middle East, Latin America and other developing countries. Unlike in the U.S. and Western Europe, foreign companies are not burdened with heavy government regulations. Manufacturers can make a product anywhere and sell it anywhere. Plus, most tasks can easily be outsourced. The playing field has been leveled.
Currently, China is producing the lowest cost products and India is providing the lowest cost services. And in a few years, these two countries will become the biggest markets for most products. For manufacturers, the opportunity is huge, but so are the risks. Chatha points out that manufacturing costs may be lower, but other costs like shipping, duties, and taxes may increase. Shipping alone requires compliance with more than 600 laws and 500 trade agreements. By crossing borders, companies also increase the complexity of operations and supply chains. Manufacturers need to weigh new market opportunities with all possible risks.
Chatha identified the following automation business trends:
- The automation business is booming in developing countries (30-40% growth in Asia)
- Operations Management Platforms have emerged
- Wireless technology is injecting a new life into sensors and systems
- Energy exploration and management related technologies are attracting huge investments
- Plant-to-business connectivity is a priority
- Demand for supplier services is exploding (as baby boomers retire)
- Discrete automation suppliers are aggressively pursuing process business (ex. Rockwell buys ICS Triplex)
- Digital manufacturing is on the horizon encompassing: seamless integration of process and product design, rapid design validation using simulation tools, and automatic programming of all factory floor equipment (ex. Siemens buys UGS)
- Automation company stocks are at an all time high
With those trends in mind, Chatha went on to lay out ten strategies to help global manufacturers win:
- Create a highly collaborative corporate culture
- Embrace collaborative design and manufacturing
- Let your customers help you develop new products
- Adopt platforms to simplify technology architecture
- Connect all applications using industry standards and web services
- Create a common content and data library
- Build a secure, synchronized supply chain
- Outsource non-core operations
- Flatten your organization
- Use benchmarks for continuous improvement
With the July 4th Holiday next week, we will not be publishing an e-newsletter, but we will continue to post the latest news on the site. I’m personally looking forward to a long overdue vacation.
Enjoy the rest of this eNews!
Vice President, Publisher