6 October 2009

Automation industry gears up for a promising turnaround

By Gregory Hale

It just wasn't supposed to be this way.

This year was going to be a huge success after a strong 2008. Well, that just did not happen, and now the industry is doing what it does best: Brainstorm, plan, execute, and rebound for next year.

ISA EXPO, which officially kicks off today, will play a big part in that, as industry experts from around the globe will converge on Houston to learn, teach, and make deals that will lead into a promising new year.

It is not going to be easy though with reports out saying U.S. consumer spending rose at its fastest rate in nearly eight years in August, but a persistently weak labor market and below-forecast expansion in manufacturing in September could hamper any kind of economic recovery.

“We feel our business is starting to bottom out, and the predictions are for next year, 2010, there will be a recovery, albeit a slow recovery,” said Emerson Process Management President Steve Sonnenberg at last week’s Emerson Global Exchange.

To achieve any kind of positive step forward, there has to be a plan, and then everyone has to be able to act on it.

“Today is all about delivering consistency and follow through day-by-day to keep your business running and profitable,” said Steve Blair, president Invensys North America.

Turning it all around for next year will be a difficult task, and the latest batch of data released from the government makes it about as clear as mud. One indication is while growth probably resumed in the third quarter after the prolonged recession, staying on a steady path could prove to be a challenge.

The U.S. Commerce Department said personal spending jumped 1.3% in August, the largest gain since October 2001, after a 0.3% rise in July. Spending was up for a fourth straight month and beat expectations for a 1.1% increase.

Along the lines of the topsy turvy nature of the economy, the Institute for Supply Management said its index of national factory activity eased to 52.6 in September from 52.9 in August. That number comes in below expectations for a reading of 54.

One study by Accenture showed the cost of manufacturing and the volatility of demand and price cycles are the leading macroeconomic factors impacting investment in automation and industrial IT.

Of a sample of 107 plant managers and automation engineers, most of whom represent companies with revenues of $4 billion or more, 49% said automation and industrial IT is high on their organizations’ agenda. However, a range of challenges are causing lower investments in automation and industrial IT at 42% of companies; 23% are increasing investment in response to these challenges.

Some external macroeconomic challenges cited show 70% of respondents said the cost of manufacturing and processes are an issue, 61% identify the volatility of demand and price cycles, while 53% point to compliance issues as impacting their businesses.

Among internal challenges, 46% pointed to the variation in process, production, and quality, while the difficulty of implementing performance measurement was highlighted by 29%, the same proportion who identified the challenge of synchronizing manufacturing with ERP.

It is also clear plant managers are facing difficulties with equipment downtime due to the lack of adequate condition based maintenance. Investment in asset management adds another dimension to the cost reduction equation.

That study is just one of the reasons why the industry professionals come to EXPO every year. They find a way to learn about trends and how to cope with the adverse conditions affecting their jobs.

One other reason is for future engineers to learn more about the industry. Just ask Josh Behrens who goes to the Pittsburgh Technical Institute.

Growing up Behrens was more into sports, not building things, studying, or being very creative. “I always felt automation was extremely intriguing and interesting, but I felt anything to do with making that crazy stuff work was beyond my league of study. It wasn’t until I went to school that I realized, no matter who you are or what you think of a subject, if you are passionate about what you want, the goal is reachable.”

George Anthony Mottillo, also a student at the Pittsburgh Technical Institute, agrees. He was always intrigued in figuring out how to make things work.

“Automation is a study on that very principle,” he said. “I felt that the study of electronics in general was very interesting, and there was the potential to make a decent amount of money in the field.”

ELLEN FUSSELL POLICASTRO CONTRIBUTED TO THIS REPORT.