Tom, please tell us about Rockwell Automation’s five-year plan to restructure your facility and supplier networks, and arrive at the “connected enterprise.”
This journey started five-plus years back. As we went through this process, we mapped out a six-step process I think illustrates what we did and how we do these things now, and also how we talk to customers. The first step is understanding the business needs. The second step is determining where the major supply chain gaps are. Then also determining your readiness: assessing your current state of your manufacturing facility and processes. Fourth is developing implementation plans, then doing the project management as you execute on the implementation plans, and then a continuous improvement phase.
You had 20 different plants to coordinate. What lessons did the company learn that it now applies to clients?
The biggest issue we discovered was lack of connectivity—specifically between the ERP system and the factory for our automation systems. In many cases, we did not have the right data. In some cases, there was no data. And in some cases, there was bad data. When you’re looking at that data and doing analysis on it and it’s either incorrect or not robust enough, it can lead you to the wrong decisions. One of the key things, in the phase of determining readiness, is assessing your infrastructure capabilities. That was a key lesson learned. And we talked to our customers about it.
The second thing that is really important for companies looking at going on smart manufacturing journeys is that you have to find the value first. Looking within the business needs, what are the real value drivers? What are the real big issues that you need to address—that provide the best bang for the buck? Sometimes people get wrapped around just the technology.
I’ve heard Rockwell attributes a four- to five-percent annual improvement in productivity due to that change. How is that possible? And do you think most manufacturers can expect that?
For most manufacturers, I’d say yes. But it depends on your industry and your current state. So it’s hard to generalize. If you look at how we did/do it, here are some examples: inventory days dropped from 120 to 82. We reduced our CAPEX, what we call CAPEX avoidance, by 30 percent per year. Our delivery within our supply chain went from 80 percent to 96 percent. Our lead times were actually reduced by 50 percent. And then, for customer service, our delivery-to-customer want date went from 82 percent to 98 percent. And with regard to quality, we reduced our PPM (parts per million) by 50 percent. You know, this doesn’t all happen on Day One. So you have to keep focusing on the areas and keep driving them out over time. We do think we can continuously reduce cost by four to five percent.
In your MES practice, you’re working with FANUC on opportunities around the world. What one main issue is coming up in those sort of collaborations?
We have a great partnership with FANUC that began about seven years back. It is not just around MES. We are primarily focused with FANUC on the power train area in the automotive industry. The biggest issue that our customers were facing, and one of the driver’s for the partnership, was the integration between the automation systems and either their CNC or robots. So to help our customers address that, we helped the FANUC adopt EtherNet/IP for communications. We build on what we call addon profiles within our programming. Basically they are screens that pop up so you can automatically configure the communications in the CNC. So we’ve made the integration seamless, and pre-built it so that it is very easy to integrate both the CNCs or robots with our automation system.
So would you say the integration is a breeze all the time now or is it still challenging in some circumstances?
It depends on what you’re trying to do. But it’s definitely much easier than it was in the past. And that’s not just Rockwell saying it. That’s our customers, like General Motors, who tell us that. Their integration and then information flow from both systems, whether it’s FANUC or our system, up into the MES system, and then continuing on to the ERP, is much easier. So I don’t know if they’d say it’s a breeze, but they’d say it’s much easier.
Is that joint work mostly automotive? What other markets are important in that relationship? And can you please talk about where you’re working with them in the world?
The partnership came out of the need for integration between CNC robotics and automation systems in automotive. So, to date, most of the work has been auto-motive. One of the fastest growth areas of robotics is in the consumer products industries. So we are working together quite a bit with FANUC across the world, primarily for the robotics and consumer products, in North America and Europe. Now, the work we’ve been doing with FANUC, I’d say the major markets would be North America, China, Europe, Japan and Korea. That’s because those are automotive hubs where the decisions are made, and/or the machineries are built.
What kind of consumer products?
Either food and beverage or packaged goods.
And are those in different countries?
That’s mostly the more developed markets, where they’re looking at greater cost reductions, greater efficiencies, maybe even greater throughput without having larger capital expenditures: Western Europe and North America.
What countries are sure to be big growth markets in your MES practice?
North America is one. There are many advanced manufacturing initiatives. And to be competitive, you need to start executing the connectivity and have the convergence between IT and OT. (We say the Connected Enterprise.) MES is a key enabler for that. We also see some emerging markets like China or India that are earlier in their development from a manufacturing-maturity standpoint. But they recognize that for them to continuously be globally competitive, they have to almost leapfrog their development to become globally competitive.
Let’s talk about the FactoryTalk Cloud Gateway platform, which is about getting information out of manufacturing facilities that use your automation, getting it into a cloud data structure where it can be combined with other third-party data and ERP data, for example, and then laying business intelligence across the top to do analysis for your customers to give them new business insights.
With the FactoryTalk Cloud Gateway, we are partnering with Microsoft. We are basing it on the Microsoft Azure cloud. But the software is built on our years of experience with on-premise deployments, leveraging the plant modeling out of our FactoryTalk VantagePoint with other modern web and cloud-based technologies. The benefit of the FactoryTalk Cloud Gateway platform is we can stream data from multiple industrial and business systems. And then, when combined, we can contextualize it, give the data meaning, and then present it in very user-friendly dashboards and reports—so that non-data scientists can interpret what’s trending in the process and take actions to optimize.
How important are cloud solutions like FactoryTalk Cloud when you’re working with companies outside the US? Did your update of that cloud platform last fall help with international partners and/or clients?
We are updating our cloud platform faster than our traditional software products. Many of our global customers are interested in the geographic location of their data, data storage, and Microsoft Azure’s infrastructure is the best related to cloud-data transparency and compliance. So the acceptance of the cloud platform from a global customer base is surprisingly high.
What are you doing to incent manufacturers to adopt FactoryTalk Cloud?
We’re trying to make it very easy. For example, the configuration of the dashboards and the connectivity to our gateway is really easy. With a couple, simple steps you can connect the gateway to the control system. The data will automatically flow to the cloud, and then you can immediately set up your dashboards.
Who did you work with to build the gateway?
The gateway software is our own development, but it’s designed to be very extensible with custom adaptors and applications. We will soon offer these APIs to our whole partner community.
What other platforms and applications are you offering or building to derive value for your clients abroad?
At Automation Fair last November, we announced FactoryTalk Analytics for Machines, FactoryTalk Analytics for Devices, the FactoryTalk TeamONE application, and many of these are built-for-purpose applications. Very scalable, easy to use, easy to implement. We hope that by producing these modular applications that are very cost effective, people can take a step-by-step approach, as opposed to trying to eat the elephant in one bite.
When you’re using this software to spot and eliminate failures, what are the two or three most common failures it finds and eliminates?
One of the key benefits we’ve seen is customers are uncovering unknown issues. Typically in a manufacturing facility, either the operator or the operational technology people know where they have challenges related to performance, quality or throughput. Once customers put the system in and start to resolve those issues, they many times find other issues that many they were not aware of. They could have bottlenecks in upstream or downstream manufacturing processes, for example.
Like everybody else, Rockwell’s customers have been cautious about adopting the cloud. What are you doing to convince them this is the right time to introduce it? And are this week’s ransomware attacks going to complicate efforts to promote cloud adoption?
First, the reliability and the capability of cloud solutions has improved tremendously. (Also, our customers don’t have to maintain their own infrastructure, and that’s becoming more important to many of our customers.) Second, the scalability of cloud services is almost impossible to reproduce with on-prem capabilities. Our customers can start small and scale it much faster than if they built and maintained it themselves. The security of cloud solutions is probably much better than with on-premise solutions. And this, I think, plays into the second point. Cloud services are being updated on a much more frequent basis.
We believe a lot of the current ransomware [impacted] what people would call unmanaged IT assets at our customers—where they have not kept them up to date, or they didn’t have the right security in place. That was either the entry point or the beginning. Cloud services potentially would be a greater prevention to it. That’s our initial thought. Obviously people would be afraid coming out of this, and trying to understand what happened. But our initial thought is that this might actually push more of our customers toward greater use of the cloud.
When Rockwell needed to build plants in Singapore and Mexico, how did you transfer the tribal knowledge of manufacturing processes at Rockwell to those markets?
We did the Singapore and Mexico facilities later in our journey, so we had developed our six-step process for implementing the Connected Enterprise at any of our facilities—and executed it at at least 10 plants. It’s important to have the best subject matter experts on specific aspects of the process that were complex or unique or very critical. We brought those subject matter experts to every plant to work on making sure those processes were brought up to speed the right way. Lastly, we determined it was very important to have standardized systems and architectures in place before starting the journey.
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