Other Voices: How smart is your automated system
Principal Industry Analyst, Cambashi August 17, 2011
Editor’s Note: The following column by Julie Fraser, a principal industry analyst with Cambashi, is part of Modern’s new Other Voices column. The series, published on Wednesdays, will feature ideas, opinions and insights from end users, analysts, systems integraters and OEMs. Click on the link to learn about submitting a column for consideration.
The post-recession “new normal’” is less certain, more global, prone to extremes and less forgiving of problems. As a result, many companies must re-think their strategy for staying competitive. The key question is outside-in, namely “What do my customers care about?” The answers guide your choice of what you must do to deliver that value profitably.
While the specific priorities will vary for each business and sometimes for different customers, there are some general trends from buyers and some typical responses from suppliers.
Buyers are looking for suppliers — whether distributors or manufacturers — that can deliver value, reliability, quality, agility and visibility. None of these are new, but agility and visibility are more specifically indicative of the times. Fast response to cope with volatile demand and shifting market trends is one thing buyers place priority on today.
This challenges every aspect of the stability that has allowed companies to reliably deliver at a low cost in the past.
Another increasingly common buyer request is to gain better and more timely visibility. This goes beyond shipping information about the products. Today, many buyers want to see and understand your operational processes. They want visibility into the things you do that may impact their mission critical processes.
To keep customers happy, suppliers are finding they need to invest in “Smart” equipment and add-on controls for handling and processing materials. Even if your facility is somewhat automated, you have some critical decisions to make. We will explain these decisions with the acronym EASY: it stands for equipment and IT; automation partners; standardization; yield.
Equipment and IT capabilities needed: Increasingly, industrial equipment is designed with embedded software that will generate information you can easily share with customers. Cambashi’s market data shows that after a flat 2010, industrial machinery companies are increasing spending on embedded software development tools by over six percent per year in 2011 and 2012. In addition to information for customers, materials handling systems with embedded software can know the state, location and routing of products and possibly sort by quality level. Automating such mind-numbing tasks can lower costs, plus increase reliability and quality. Intelligent routing and buffering can also increase agility.
Automation partners, such as systems integrators, distributors and equipment makers, are an important part of the team to design and deliver intelligent systems appropriate for your specific needs. The partner you choose should have deep experience in your industry and with the type of equipment you want. The professionals from these companies should bring lessons learned from dozens or hundreds of instances, and understand how to extract the information maintained by embedded software and put it to work.
Standardization of the controller or automation brand may be essential to peoples’ effectiveness, but you may also want to take advantage of built in controls - where the equipment provider has spent time developing embedded software. If you have an independent automation provider delivering you service, or if you have an OPC-proficient staff, you may find the particular capabilities of the built-in controls deliver a competitive advantage.
Yield of benefits is the ultimate measure of whether to invest, and whether the investment has been successful. With capital tight in most companies, making a business case to invest may be a fundamental hurdle you must jump. Remember to keep the “outside in” approach and start by identifying what outcomes your best and most profitable customers will care about. Then envision various ways to measure and achieve those outcomes, ideally with your external partner who may have seen alternatives your team has not.
These EASY decisions are typically not easy to make. They are interdependent and should be made as a group, not sequentially. In fact, the business case will usually review multiple scenarios, raising questions about equipment needed and standardization tradeoffs.
One more thing to remember: do all you can to future-proof your investments. Don’t just find a partner and equipment that will solve an immediate problem - think about what the customers might want next and design the system for that.
The benefit of smart equipment and automation is that it can be re-programmed and expanded to add capabilities as customers demand. As we know they will.