This is from Bob Vavra of Plant Engineering. Read what he tells about manufacturing perspectives at automation fair.
1. The power of the plant floor:
The opening day of Rockwell Automation’s annual Automation Fair in Anaheim on Tuesday featured a day-long series of discussions on a global view of manufacturing issues. The morning session of the Manufacturing Perspectives series painted a strong picture of a manufacturing economy emerging from a deep recession and already showing signs of life with 2010 just around the corner.
It also pointed again to the power and visibility the plant floor is receiving from automation vendors, IT professionals and business leaders.
In his opening remarks Tuesday, Rockwell Automation CEO Keith Nosbusch pointed to the shift in manufacturing “from an IT-connected manufacturing system to an optimized plant floor and supply chain network. The plant floor is where power, control and information converge. The factory floor becomes the focal point.”
2. The globalization of manufacturing:
Nosbusch said that Rockwell’s goal was to have 60% of its business outside the U.S. by 2013. Already, he noted that more than half of Rockwell Automation’s employees are outside of the U.S.
While some of our more short-sighted commentators view this as “off-shoring” jobs, Jeremy Leonard of the Manufacturers Alliance/MAPI noted in his remarks that there is good off-shoring and bad off-shoring. “Most of the off-shoring is the former,” Leonard said. While conceding that high-value, low-piece products such as computers and electronics are manufactured to take advantage of labor costs, he said the vast majority of expansion in emerging markets such as China, Indian and Brazil is to serve the local and regional markets. He added that transportation costs have driven many manufacturers away from simply off-shoring jobs and production because of the increasing costs of getting those products back into the supply chain.
3. Issues and opportunities:
Leonard cited four major reforms manufacturers need to improve their operations - and all of them were legislative in nature: reducing tax rates (which he said was “the single most important barrier to competitiveness”) heath care costs, tort reform and regulatory compliance. But he also said American manufacturing suffers from lower levels of research and development than most other industrialized nations and are drawing on a smaller skilled labor pool. His research finds that U.S. engineering degrees are down 20% in the last two decades and that 40% of current 9th graders will lack the skills needed in modern manufacturing.
4. The good news is:
“The manufacturing recession is over,” Leonard said. While growth will slow in the fourth quarter because the stimulus packages, especially Cash For Clunkers, will not be present in the fourth quarter, MAPI is still anticipating 2.4% growth for the year and predicts slow but steady growth over the next five years. Build into that is a slower but still steady drop in the unemployment rate. But he does not see a lot of new construction in the coming months in manufacturing. “Plants will be putting idle capacity back on line rather than building new capacity,” he said.
5. And the quote: Leonard takes a dim view of those who claim U.S. manufacturing is not a major player in either the national economy or the global market. “U.S. manufacturing is the engine for growth in a global economy,” he said. “Manufacturing is not becoming less important to this economy. What matters is the volume of things made. We’re simply producing more with fewer resources.”
1. The power of the plant floor:
The opening day of Rockwell Automation’s annual Automation Fair in Anaheim on Tuesday featured a day-long series of discussions on a global view of manufacturing issues. The morning session of the Manufacturing Perspectives series painted a strong picture of a manufacturing economy emerging from a deep recession and already showing signs of life with 2010 just around the corner.
It also pointed again to the power and visibility the plant floor is receiving from automation vendors, IT professionals and business leaders.
In his opening remarks Tuesday, Rockwell Automation CEO Keith Nosbusch pointed to the shift in manufacturing “from an IT-connected manufacturing system to an optimized plant floor and supply chain network. The plant floor is where power, control and information converge. The factory floor becomes the focal point.”
2. The globalization of manufacturing:
Nosbusch said that Rockwell’s goal was to have 60% of its business outside the U.S. by 2013. Already, he noted that more than half of Rockwell Automation’s employees are outside of the U.S.
While some of our more short-sighted commentators view this as “off-shoring” jobs, Jeremy Leonard of the Manufacturers Alliance/MAPI noted in his remarks that there is good off-shoring and bad off-shoring. “Most of the off-shoring is the former,” Leonard said. While conceding that high-value, low-piece products such as computers and electronics are manufactured to take advantage of labor costs, he said the vast majority of expansion in emerging markets such as China, Indian and Brazil is to serve the local and regional markets. He added that transportation costs have driven many manufacturers away from simply off-shoring jobs and production because of the increasing costs of getting those products back into the supply chain.
3. Issues and opportunities:
Leonard cited four major reforms manufacturers need to improve their operations - and all of them were legislative in nature: reducing tax rates (which he said was “the single most important barrier to competitiveness”) heath care costs, tort reform and regulatory compliance. But he also said American manufacturing suffers from lower levels of research and development than most other industrialized nations and are drawing on a smaller skilled labor pool. His research finds that U.S. engineering degrees are down 20% in the last two decades and that 40% of current 9th graders will lack the skills needed in modern manufacturing.
4. The good news is:
“The manufacturing recession is over,” Leonard said. While growth will slow in the fourth quarter because the stimulus packages, especially Cash For Clunkers, will not be present in the fourth quarter, MAPI is still anticipating 2.4% growth for the year and predicts slow but steady growth over the next five years. Build into that is a slower but still steady drop in the unemployment rate. But he does not see a lot of new construction in the coming months in manufacturing. “Plants will be putting idle capacity back on line rather than building new capacity,” he said.
5. And the quote: Leonard takes a dim view of those who claim U.S. manufacturing is not a major player in either the national economy or the global market. “U.S. manufacturing is the engine for growth in a global economy,” he said. “Manufacturing is not becoming less important to this economy. What matters is the volume of things made. We’re simply producing more with fewer resources.”
