Manufacturing Outlook and Trends

Rockwell Automation’s Automation Fair & Manufacturing Perspectives (media day) are being held this week in Chicago. Keith Nosbusch addressed a crowd of more than 100 media representatives yesterday at McCormick Place. According to Nosbusch, Chairman and CEO of Rockwell Automation, the industry trends to watch in 2008 are collaboration, governance/compliance, and efficiency.

In this global economy, it has become a necessity for manufacturers to collaborate, in real-time, with suppliers, channels and customers. Manufacturers also want/need to see horizontal integration of process and discrete automation as well as a vertical convergence of enterprise and plant IT systems. More and more manufacturers will continue to evolve into real-time, completely connected enterprises.

With the regulatory world becoming more complex, manufacturers are realizing significant challenges with governance and compliance. With increasing environmental pressures, manufacturers see the need to be “green.” As a result, manufacturers must have control and safety systems with high availability.

Global competition has put pressure on manufacturers to increase efficiencies. With continuously changing factories, asset management becomes crucial. With advanced process control techniques, production systems can be optimized. With the growing shortage of skilled manufacturing workers, companies need to achieve more with fewer people. With high energy costs and supply volatility, manufacturers need the visibility and flexibility to make immediate decisions.

Nosbusch’s outlook for 2008 was very positive. He projected continued double-digit growth for the company, with the single largest growth opportunity being process automation, followed by plant-wide information systems and machine and process safety. While growth rates will be strong all over the world, Rockwell Automation will experience the highest growth rates in the Asia Pacific regions.

Cliff Waldman, Global Economist for Manufacturers Alliance/MAPI, went on to talk about China specifically. The word “China” has become synonymous with “globalization.” Rarely do you ever hear one word without the other. There is a lot of attention on China because it has the single largest population in the world and its economy is exploding.

Waldman presented a short term outlook for China. There are signs that the total investment in China is slowing. New construction has dropped from 40+ percent to 15 percent (percent change from same period of previous year) in the last year. It was interesting to learn that China’s largest export is machinery and transport equipment, 65 percent of which goes to other parts of Asia. So, the majority of China’s economic explosion has really stayed within Asia.

Waldman predicts that investments in China will slow with earnest after the Olympics. On the other hand, the acceleration of consumer spending suggests that the household sector will play a larger role in the growth picture over the next few years. Chinese consumers have the potential to be a major force in the global economy. But the full potential of the household sector will not be realized until China re-balances away from excessive investment growth, which will occur during a period of slower economic growth (may be a decade away).

I’m certainly not an economist, but China introduces a powerful, global economic dynamic that will be interesting to watch over the next few years.

This is a great segway into our featured article this week by Jim Pinto, Manufacturing strategies in the global environment.

Enjoy the rest of this Automation Weekly!

Rick Zabel
Vice President, Publisher

Manufacturing strategies in the global environment
Over the past decade, many companies have adopted new strategies for manufacturing, which has taken competitiveness on to new planes. A whole array of initiatives have been introduced, collectively labeled "new wave manufacturing."

Read full article by Jim Pinto
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