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October 24, 2006

Headlines from Today's Activities
- Nosbusch Says Rockwell Making Global Strides
- World Coming Together to Compete
- Realizing the Networked Manufacturing Enterprise
- Machine Builders Share Secrets to Success
- ControlLogix Enters DCS Realm
- Wyeth Streamlines Batch Management with S88

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Nosbusch Says Rockwell Making Global Strides
Like anything worthwhile, competing and winning in worldwide markets is easier said than done. So, while it may be easier to get out and reach global customers, serving their needs better than anyone else can be a very tall order for even the most capable companies.

Fortunately, Rockwell Automation has long survived and thrived in this planet-spanning arena, and seems more than up to meeting these challenges now and in the future.

Keith Nosbusch, Rockwell's chairman and CEO, reported on his company's latest efforts in his keynote address, "Global Overview of Manufacturing Technology and Rockwell Automation," during Manufacturing Perspectives 2006 on Oct. 24, a day before the start of its 16th annual, two-day Automation Fair 2006 at the Baltimore Convention Center.

For instance, Nosbusch reported briefly that Rockwell's sales are $5.5 billion for the company's just-completed fiscal, representing an 11% annual increase (download earnings press release). However, he quickly moved on to chart the increasing globalization of Rockwell's business model, and stated that the company aims to have more than 50% of its sales come from outside the U.S. by 2009. "China is already the No. 2 market worldwide for our Logix software products," he said. "Manufacturing management is increasingly being done at more local levels, and so Rockwell now has more than 1,000 employees in China."

To successfully serve these and other worldwide customers, Nosbusch added that firms must manage two main trends. They need to integrate more closely with their own suppliers, and handle complex and volatile customer demand by driving more flexible manufacturing processes. This supply-chain integration and flexible manufacturing are, in turn, fueling ever-tighter coupling of plant-floor and enterprise systems. "Four main factors drive productivity," he explained. "These include the factory's focus on lower total cost of ownership and faster time to market, and the enterprise's search for better asset optimization and broader risk management."

Rockwell's core solution to aid these efforts is its Logix software platform, which recently added Safety Integrity Level (SIL) 3, other safety functions, and S88 phase manager capabilities. Logix also is being integrated and tightly coupled with Rockwell's FactoryTalk software to meet the needs of third-party users and enable interoperability of legacy systems. In fact, FactoryTalk Integrator, Portal, Production Centre, and Asset Centre are all being introduced this week at Automation Fair. "It's only through the use of unmodified standards that give users the ability to perform flexible manufacturing that we can truly meet the demands of customers worldwide," said Nosbusch. "We can even provide detailed compilations of savings delivered by our solutions, so our customers can report to others within their own organizations."

"In 2006, we benefited from strong end markets, disciplined execution and cost productivity." Keith Nosbusch, Rockwell Automation chairman and CEO, on the company's 11% revenue and 25% earnings gains.

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World Coming Together to Compete
Ready or not, here the world comes. China is just the beginning. Where is my educated workforce? These were some of the unifying themes from three experts, who presented "Global Trends in Manufacturing: U.S., Asia, and Europe" at Manufacturing Perspectives 2006 on Oct. 24, before the start of Rockwell Automation's Automation Fair 2006 at the Baltimore Convention Center.

Jamie Estrada, U.S. Dept. of Commerce deputy assistant for manufacturing, reported that the Bush Administration's pro-growth policies helped propel U.S. gross domestic product (GDP) to a 4.1% increase in the first half of 2006, following several years of similar increases. He added that the administration's core policy is to keep taxes low, especially for small businesses.

"Despite some setbacks, manufacturing is still performing well in many industries," said Estrada. "In fact, productivity increases has been so rapid that some companies are increasing market share at the same time as they increase output. So, the U.S. economy is continuing to grow, and it remains the envy of the world."

Sentiment aside, this admiration often takes the form of sales. Estrada added that U.S. exports totaled $1.2 trillion in 2005, and that exports increased with 23 of the U.S.'s 25 largest trading partners. "To quote my boss, U.S. Commerce Secretary Carlos Gutierrez, 'Innovation is in Americans' DNA,'" added Estrada.

In addition, Estrada reported that it's easier for U.S. firms to get involved in international trade than ever before. "We're opening markets, fighting tariffs, and knocking down unfair trade barriers," he said. "This is crucial because the world has almost 7 billion potential customers now, and most of them are located outside the U.S." Estrada added that free trade agreements (FTAs) are a useful way to help open markets. However, current U.S. FTAs represent only 6.8% of total world GDP, and only 42% of the countries to which the U.S. delivers exports.

"To remain the best, we must continue innovating, and educate the qualified workers that we need," reported Estrada. "Given an even chance, U.S. companies can compete with anyone in the world."

Remarkably, some economic trends in the Asia-Pacific region are strikingly similar to concerns in the U.S. Ko Kheng Hwa, Singapore Economic Development Board's (EDB) managing director, reported that his country also is worried about China and India's emergence. To create a sustainable GDP for Singapore, EDB likewise pursues four main strategies: grow the nation's industries, attract investment, develop new enterprises, and enhance a pro-business environment. Though manufacturing now accounts for 28% of Singpore's GDP, EDB wants the double its manufacturing output to $190 billion per year by 2018.

"Singapore is a vibrant, compact hub at the center of Asia's growth," said Ko. "For example, half the world's total population lives within a seven-hour flight from Singapore, and there are 7,000 global manufacturing companies located in the half-hour it takes to drive across Singapore.

Ko also charted recent intraregional and global economics shifts, such as U.S. industry moving to Mexico, European industry moving to Eastern Europe, Japanese industry moving to China, Singapore, and Southeast Asia, and then much of the world's industry subsequently moving to Asia. Despite these shifts, Ko reported that the U.S., China, and India all gained in the percentage high-technology output located in their countries, while Europe and Japan declined slightly.

"In fact, foreign direct investment in China is moderating, while India is moving beyond IT and services, and more into manufacturing," said Ko. "The Association of Southeast Asian Nations (ASEAN) is well positioned between China and India, and pan-Asian manufacturing networks are emerging to help multinational corporations (MNCs) distribute manufacturing activities, capture comparative advantages, and diversify risk." The 10 nations in ASEAN have a collective population of 550 million people, $850 million in GDP, which grew 4.8% in 2005, and private consumption comparable to coastal China, Japan, or India. "In fact, the percent share of global exports to China from Indonesia, Malaysia, Philippines, Singapore, and Thailand went from 1-3% in 1990 to 6-8% in 2004," he added. "The whole value chain is being integrated across Asia and worldwide."

Finally, Paul Christodoulou, senior industrial fellow at the University of Cambridge's Institute of Manufacturing, reported manufacturing has gone from focusing on physical processes to concentrating on the full cycle of research, design, production, distribution, and services. After tracing recent performances by Cisco, Solectron, GKN (autoparts), Zara (clothing), Caterpillar, Glanz and Midea (microwaves and other appliances), he identified several major trends that they all exhibit. "The underlying patterns of these companies are a drive for service-oriented business models, the growing importance of networks for innovation and to manage complex relationships, and the emergence of original design and manufacturers (ODMs) in developing markets, which are dramatically increasing their capabilities."

"The whole value chain is being integrated across Asia and worldwide." Ko Kheng Hwa, managing director of Singapore's Economic Development Board, on the ongoing integration of pan-Asian manufacturing supply chains.


"Many global manufacturers are pursuing service-oriented business models," Cambridge's Paul Christodoulou on key differentiation strategy in the manufacturing sector.

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Realizing the Networked Manufacturing Enterprise
Recent advances in network and information technologies are making integration among today's plant-floor and enterprise information systems easier than ever. They're now poised to usher in a new era of more efficient, more agile manufacturing across increasingly global supply chains.

So explained representatives from two of Rockwell Automation's key business partners at the enterprise integration level—IBM and Cisco Systems—during presentations at today's Manufacturing Perspectives 2006 media event.

"Twenty years ago, the vision of what was possible was clear, but there was a lot of God-awful integration work to do," said Bruce Anderson, partner in IBM's supply chain management practice. Ubiquitous Ethernet networks together with services-oriented software architectures now allow companies to move from operating in a "crisis-escalation-reaction" mode to operating "sense-and-respond" value chains that can adjust more dynamically to changing business conditions.

Today's easier-to-integrate supply chains promise to aggregate isolated data-collection islands into automated, real-time dashboards. On-time delivery problems will yield to on-time delivery confidence. And the tightening of wide volatility gaps will transform excessive, "just-in-case" inventory to measured improvements in inventory velocity, Anderson said.

Further, the same tools that enable functionally integrated manufacturing companies to become more agile will facilitate virtual value chains that transcend organization boundaries to compete more effectively. "The future promises the ability to sense changing conditions and react as virtual supply chains," Anderson said.

A key underlying technology for all this integration is good old Ethernet, which from its humble origins "took over as the corporate network," said Dave Leonard, vice president and general manager of Cisco Systems' desktop switching business unit. Indeed, market projections from the early 1990s predicted that Ethernet would give way to other higher performance network technologies, Leonard explained, "but an avalanche of innovation cycles drove the cost down while improving performance."

Solving security and network segmentation issues were the first steps in Ethernet's march to first connect to and then unify the factory floor, Leonard said. Control-level Ethernet implementations introduced the need for industrial packaging, and tackling voice and video transmission in the IT space resolved manufacturing's real-time synchronization and quality-of-services needs. Machine-to-machine communications is Ethernet's next evolution, Leonard added. "It's not just about humans communicating with each other."

And while technology's come a long way in the past 20 years toward making the integrated value chain a reality, Anderson cautioned that when it comes to implementation, don't neglect the implications for changes in workforce roles and in business processes. "Technology is not the main issue—change management is."

"The future promises the ability to sense changing conditions and react as virtual supply chains." IBM's Bruce Anderson on the promise of today's easier-to-integrate plant-floor and enterprise information systems.


"Machine-to-machine communication is Ethernet's next evolution." Cisco Systems' Dave Leonard on the networking protocol's continuing penetration of the industrial network space.

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Machine Builders Share Secrets to Success
Tuesday's lunch break at Manufacturing Perspectives 2006 included nicely focused presentations by two mid-size North American industrial machine builders, who shared experiences and some powerful lessons learned on evolving into major players in their respective machine markets.

Complete offerings and a global view made the difference for Hartness International. "We went from a soft drink bottler, to a machine manufacturer, to a machine exporter, to a global packaging solution provider," said Bern McPheely, general manager and CEO.

"There's more to building a solid relationship than price, said McPheely, addressing the importance of supplier and customer partnerships. "Some customers consider a discount as a win, but everyone has to make a profit or something falls apart along the way."

"Low-cost goods are a positive for everyone," continued McPheely. "While seemingly crippling obstacles such as shortages of North American engineering talent, high costs of labor, benefits, and taxes are quite real, we need to realize that government cannot force change."

Hartness' experiences brought them to a clear realization: "We must compel our customers to do business with us because we provide the greatest value," he said. "There are no excuses."

McPheely said following a traditional business strategy didn't do what Hartness needed. "We spread our risks, diversified our equipment across major packaging segments, pretty much did what the textbooks said, but costs and competitive pressure brought us to realize we had to embrace lean manufacturing," he stated.

McPheely pointed to the rollout of Hartness's flagship Dynac conveying system that, while providing significant and unique user benefits, "didn't make us the premier machine supplier we expected it to. It was time to become a complete solution provider."

During the past 15 years, Hartness has added European, Latin America, and Asia/Pacific Rim operations, a joint venture with Australian robotic deployment experts VISY, formed its own conveyor manufacturing arm, and added its integration business. Hartness builds 80 machines a year in Europe. "We first went to China for the parts," said McPheely, but we'll build 30 machines there this year and next."

Michael Senske, president and CEO of Pearson Packaging Systems, opened his remarks by supporting the Hartness notion that lean involves far more than just the manufacturing operation. The constraints of time made Senske focus on his company's manufacturing successes gleaned from a lean/Kaizen/Six Sigma approach. Pearson builds end-of-the-line packaging equipment.

"We build to customer spec," said Senske. "Our machines are low-volume, high-variability, and often are modified and customized from machine to machine."

Pearson customers demand shorter lead times, more functionality for the dollar, and more machine and system reliability, stated Senske.

The question for Pearson was how to take lean principles into a low-volume/high-variability business? "Most companies rationalize that they can't do it. Lean is supposed to be for high-volume, low-variability operations, isn't it?" Senske believes many facets of lean manufacturing are best suited to his type of operation.

The starting point for Pearson is emphasis on standard operation procedures. "We can design and build most machines the same way, even if customization is involved," Senske said. "The results are a consistent process that eliminates variability, and improves quality." He pointed to a "5S" Kaizen mantra: Sort: get unnecessary items out of the production space. Set in Order: arrange manufacturing cells the same everywhere so the builders are familiar with the environment. Shine: Make it clean, keep it clean. Standardize: establish standards for the build, for the parts, and follow them. Sustain: Keep doing it.

A large part of the company's lean success is inventory management. "We buy parts today that we'll use tomorrow," said Senske. "Eighteen months ago we turned inventory 6-7 times. Now we turn 19-20 times, with multiple daily deliveries from our suppliers, often right to the manufacturing cell."

Flow is another important mantra. "We'll do anything we can do to improve flow," he tells fellow employees. "When you improve flow, everything else improves with it."

Special emphasis on achieving reliability means Pearson tests components and sub-assemblies in accelerated conditions. "Establish component reliability in an extreme condition, and you dramatically increase overall machine reliability," he stressed.

The results have been rewarding. "Assembly time now is around 70 hours, down from 180 hours," said Senske. Lead time dropped to about 35 days, from 90 days. It means being able to pass cost reductions along to the customer."

Finally, recommended Senske, "Involve customers in creating functional spec. Involved customers don't require as much future customization."

"We first went to China for the parts, but we'll build 30 machines there this year and next." Hartness International's Bern McPheely on the packaging machine builder's global diversification efforts.


"The results are a consistent process that eliminates variability, and improves quality." Pearson Packaging Systems' Michael Senske on his company's application of lean/Kaizen/Six Sigma principles.

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ControlLogix Enters DCS Realm
System integrator and CSIA member Rovisys gave a presentation today at the Rockwell Automation Process Solutions User Group meeting that showed how ControlLogix and RSView were used to replace an aging distributed control system (DCS).

The DCS was installed in a classic DCS application—boiler control in a steel mill. The mill is located in Warren, OH and is owned and operated by WCI Steel. The existing control system was an ABB Infi90 DCS. Dick Ciammaichella, director of process automation at Rovisys, had extensive experience with ABB and was thus uniquely positioned to help WCI Steel evaluate their options when it became apparent that the DCS was obsolete.

"WCI Steel was experiencing DCS component failures and also needed to improve operations," says Ciammaichella. "They selected Rockwell Automation's Integrated Architecture over migration to a newer generation of an ABB DCS and over migration to DCS equipment from other vendors," added Ciammaichella.

Rovisys had to convince the boiler operations group that Rockwell Automation's Integrated Architecture was the right solution, Ciammaichella said, and they also had to convince others in the plant that a PLC could handle a critical process control application. "There is a mindset in many industries against PLCs in process control. We overcame that hurdle through our domain expertise in boiler control and through our in-depth knowledge of Rockwell Automation's Integrated Architecture," he said.

Once the decision to go with Rockwell had been made, the next step was providing a quick implementation with no plant downtime. The boiler house contains three boilers, and two must be up and running at all times. The plant gave Rovisys one month from project approval to migrate from the existing to the new controls.

Rovisys met this aggressive schedule by implementing several innovating engineering ideas. First, they used their OPC90 product to pull as-built data from the existing Infi90 control system. These data were then converted to a .csv file and imported into Rockwell Automation's HMI and PLC software development systems.

Another innovative idea was re-use of the existing termination units. These units were directly connected to field instruments, so re-use met that no new field wiring was needed. Rovisys created various custom cable assemblies to link the termination units to the ControlLogix I/O.

Plant engineering personnel just wanted to re-create existing graphics, but Rovisys found that the plant operators were able to suggest improvements that were easily incorporated into RSView.

Similar improvements to the control logic were made by taking advantage of different ControlLogix programming languages. Advanced control techniques like feed-forward and cascade control were easily implemented. "We used both function block diagram and ladder logic to program the ControlLogix," Ciammaichella said. "Each language worked well for different parts of the application."

"There is a mindset in many industries against PLCs in process control." Rovisys director of process automation, Dick Ciammaichella, on WCI Steel's selection of Rockwell Automation's Integrated Architecture over other DCS replacement options.


Wyeth Streamlines Batch Management with S88
Because the ISA's S88 batch automation standard is an abstract concept, its application can be difficult to grasp without benefit of real-world examples. A great example of an S88 real-world implementation was given earlier today during a presentation at Rockwell Automation's Process Solutions User Group meeting.

The presentation by Greyssi Campos, control systems engineer at Wyeth-Ayerst Lederle, showed how S88 was used to improve process batch control and plant operations at Wyeth's pharmaceutical plant in Carolina, Puerto Rico.

This plant produces various antibiotics using a variety of different recipes. "Prior to our S88 implementation, it was very difficult to modify existing recipes or create new recipes," said Campos. "Each recipe change had to be validated, and no recipe could be modified without the involvement of control system engineers. This was very time consuming and unwieldy," she added.

S88 fixed this problem at Wyeth by separating plant operations and process control into two categories. The first category is called the physical, or equipment model, and the second category is the procedural model.

Campos refers to the physical model as defining the production equipment's capabilities. Control modules represent items such as pumps and valves. Each item is controlled by standard controller code and represented by standard human-machine interface graphics.

Control modules, in turn, are combined to create equipment modules; equipment modules and control modules together make up units. "The beauty of S88 is that control modules are standard building blocks of code and graphics that can be combined and linked to form equipment modules and units," according to Campos.

The S88 procedural model is where the process engineers and operators create and modify recipes. Wyeth refers to this model as defining what is to be done with the equipment. Process engineers and operators use Rockwell Automation's RSBatch to drag-and-drop unit operations to create recipes. Examples of unit operations are adding materials, mixing materials and discharging materials. This is consistent with the S88 definition of a unit as an operation that contains materials, performs a processing action, and contains only one lot of material at a time.

When a new recipe is created or an existing recipe is modified, Wyeth now only needs to validate the recipe itself because all of the unit operations that were combined and linked to create the recipe were previously validated.

"Before we implemented S88, each recipe change required new code, new graphics, and validation of both in addition to validation of the recipe," Campos said. "S88 has saved us a tremendous amount of time and money by eliminating code and graphic validation when recipes are changed."

"No recipe could be modified without the involvement of control system engineers." Wyeth's Greyssi Campos on the pharmaceutical company's cumbersome batch management procedures before its S88 RSBatch implementation.


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