Coming Out of the Control Cabinet |

Coming Out of the Control Cabinet

July 202012
Coming Out of the Control Cabinet
Phoenix Contact’s opens new Customer Technology Center in Ann Arbor, MI
July 2012
By Bill Lydon, Editor
I attended the grand opening event of the new Phoenix Contact facility in Ann Arbor, Michigan on June 20-21, 2012 where presentations focused on Phoenix Contacts industrial computer (IPC) products, control software, and vertical market initiatives. In the past, Phoenix Contact’s products were typically hidden in control cabinets.  The new vertical market initiative puts them in the mainstream of automation and control. The new Ann Arbor facilities represent Phoenix Contact’s second Customer Technology Center (CTC), with Houston being the first. The Ann Arbor CTC includes 28 software development engineers linked with software teams in Germany, automation customer technical support center, control and industry solutions group, and Phoenix owned K-W Software office, training rooms, solutions demonstration area, and solutions lab.
Jack Nehlig, President of Phoenix Contact USA, opened the event by reminding the audience that Phoenix Contact United States was founded in 1981 with headquarters in Harrisburg Pennsylvania and now has facilities in Ann Arbor and Houston Texas. The parent company Phoenix Contact was founded in 1923 in Essen, Germany. Phoenix Contact U.S. has over 600 U.S. employees, with over 40,000 U.S. customers, and 2010 U.S. sales were over $200 million. They have their sites on achieving $500 million by 2020. Nehlig noted, “How did we bring this to life?” “A real simple philosophy - we took the IEC form factor of control and brought it to a NEMA world.” A great example of this is the 6 millimeter relay that replaced the old ice cube relay. Moving with the times, Nehlig noted that Phoenix Contact has developed the widest portfolio of industrial wireless solutions compared to any other company.  
Roland Bent, Senior Vice President for Marketing and Development, addressed the group by highlighting that the company achieved worldwide sales of 1.5 billion euros in 2011 - more than a doubling of sales since 2000. Bent described how Phoenix Contact has centers of competence around the world including design and production. “No longer made in Germany but by Phoenix Contact,” said Bent. He emphasized that Phoenix Contact is focused on creating innovative products, using 2012 as an example with over 1,500 new innovative items introduced. He further noted that sales growth is requiring the expansion of facilities in Harrisburg since it currently only supplies 30% of U.S. requirements. This expansion is currently in the planning stages. The goal of the company is to continue developing leadership products and deliver vertical customer application solutions starting with automotive, process (oil & gas), wind, solar, and urban infrastructure (includes energy distribution, water/wastewater, and traffic infrastructure). In his opinion, the solutions business is being driven by customer requirements to outsource for efficiency.
Volker Bibelhausen, Phoenix Contact’s Head of the Control and Industry Solutions Division and a member of the executive board, discussed the vertical initiative that focuses on customers and the addition of solution capability. He described how most customers lack engineering capacity and need Phoenix Contact services to be effective. This includes engineering services and value-added offerings. 
PROFINET Commitment
Phoenix Contact offers products for virtually all industrial networks but their vertical application initiative is using PROFINET as the standard for projects. I asked why the focus on PROFINET? The answer is by focusing initially on one industrial network, it is more efficient to deliver reliable solutions. Phoenix Contact currently has more advanced and refined hardware and software tools for the application of PROFINET. They discussed how Phoenix Contact products are deeply integrated into PROFINET and have a bigger toolbox of software and diagnostic software for PROFINET. Phoenix Contact representatives noted that due to the complexity of these systems, they can become the best at one of them and can be good at other ones. Jeff Pinegar, Controls & Software Product Manager, Americas Business Unit, commented, “We do work with EtherNet/IP (ODVA) but it is not being as deeply integrated into our control products…” “Yes are going to support it - it doesn’t get supported all the way through at our top level for the deep level integration we need for the solutions business.” Eventually they will support other industrial networks as the solutions business grows.
PC-Based Control
Phoenix Contact is committed to PC-based control and they provide industrial PCs and software including Steeplechase, Think & Do, and KW Software. Phoenix Contact’s commitment to controls and industrial networking goes deep including manufacturing a wide range of industrial PCs, software, and integrated circuit chips. Based on discussions with Phoenix Contact representatives at the event, there is a harmonization effort underway to develop a common software control execution engine based on KW Software.
Ride for Innovation
As part of the grand opening, enthusiastic Phoenix Contact employees departed the Phoenix Contact facility in Middletown, Pa. to bike 600 miles to the new facility in Ann Arbor, Michigan. In addition to promoting wellness, the bike ride highlighted the growth of the company and Phoenix Contact's increased capability to serve customers in the Midwest region.
The Building
Phoenix Contact purchased this building and it was renovated based on the design work of a German architect that they have worked with for years. The building is high quality in all aspects and reflects German quality right down to the doors and fixtures.
Thoughts & Observations
The goal at Phoenix Contact is to become known for vertical application solutions. The company has a reasonable number of subject matter experts for starting this initiative and intends to add more people. I suggested that it will become more difficult to find people to support the vertical application initiative. In a discussion, Ron Baysinger, Market Development Manager, Control & Industry Solutions, told me that with all the instability at many employers, people find Phoenix Contact attractive since it is extremely stable without a single layoff in the United States.
In my discussions with Phoenix Contact management, they also indicated they are working with their distributors and system integrators as partners in delivering solutions.
Phoenix Contact is solidly committed to PC-based control and can provide the entire solution including field I/O, software and industrial PC. This capability puts them in a unique position.
I found the discussions about why Phoenix Contact is standardizing on PROFINET for the application solutions business a bit confusing. It makes sense that their application engineers need deeper knowledge when building solutions but the disclosure that Phoenix Contact has a higher degree of technical tools and technical knowledge on PROFINET opposed to EtherNet/IP was a surprise. This may give users that are committed to EtherNet/IP something to ponder when making purchases of I/O and controllers.
Roland Bent, Senior Vice President for Marketing and Development, personally conveyed to me the company’s deep commitment to investing in the capability to deliver applications solutions.
The company is clearly working to move up the food chain by coming out of the control cabinet into general automation and control.
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