31 May 2001
Division of labor takes center stage
by Bob Felton
Hooking up is increasingly necessary to get the job done.
"How many people," economics professors like to ask, "does it take to make a pencil?" The correct answer-one that emphasizes the complex relationships that tie together miners, loggers, transporters, manufacturers, distributors, and retailers-is "too many to count." Though division of labor and cooperative action are inherent in capitalism, there is something new afoot when job titles such as "Apostle of Partners" begin appearing on business cards. Separating the new from the gussied-up commonplace can be difficult, however.
Adorning the ordinary
The decade-long shift away from vertically integrated colossi toward flat, fleet-footed businesses that do just one or two things well, plus the corresponding business restructurings and layoffs, in most cases doesn't mean jobs have truly disappeared; they are, instead, performed someplace else by a different firm, or "outsourced." Widgets International might get rid of its truck fleet, for instance, but the company continues to pay somebody to move goods between its manufacturing plants and distributors' stores. If the company's by-the-hour flacks are up to the minute, they announce that the company has formed an alliance or partnership "an association or union formed for the furtherance of the common interests and aims of the members," according to Webster's dictionary to get the job done instead of merely hiring a trucking firm. Behind the weighty descriptors and buzzword-laden press release is a straightforward, work-for-pay transaction as old as the wheel.
One-way alliances such as these are often short lived. If the trucking company can't keep its commitments, the manufacturer simply hires a trucker who can. Other business relationships are more complicated, though.
Something old, something new
A second sort of partnership that's attracted a lot of interest in the past few years is the electronic exchange, the modern e-equivalent of the ancient bazaars. Covisint, an automaker-owned exchange, is the premier example. Participants go online to seek price quotes, conduct or participate in auctions, and collaboratively design automobile components all the transactions that go into making a car. Because the exchange is owned by the automakers and gets a piece of each transaction, the automakers are collaborating as real partners to profit from an activity that ought to lower their actual costs or at least mitigate the rate of cost increases.
They do this to be competitive so that their dealers can beat one another silly in price wars.
These cooperative arrangements cut costs and increase competition, and companies that don't participate in the exchange and don't use the efficiencies of e-commerce will lose when they put their products in front of consumers. Practically, the automakers have entered a marriage of convenience that Ray Noorda, onetime Novell chief executive officer, liked to call "coopetition." Ideally, it's a relationship where all participants benefit because their joint efforts help the market grow.
More than a decade ago, fearing his company was losing its competitive edge, AutoDesk founder John Walker wrote a memo that subsequently became known throughout the software industry as The Nightmare Scenario. "Damn," Walker imagined Bill Gates muttering to himself, "what I need is more money." Gates would then focus on the computer-aided design (CAD) market with cyclopean intensity, Walker figured, and run Walker's measly $200 million software company right out of town.
Inexplicably, Gates never developed a hankering to rule the CAD world, and Walker got to keep his money and move to Switzerland. But Windows operating systems (OSs), which control everything from huge networks to pocket computers, open Internet communication standards, and the subsequent tendency toward commoditization of measurement and control instrumentation, have combined to put tremendous pressure on instrument makers and software developers to find ways to distinguish themselves and win customer loyalty. Increasingly, firms are teaming with others possessing complementary technology to jointly develop and market products. These are real partnerships or alliances, according to the accepted meaning of the words: Each company relies on the other in order to achieve their goals.
Among the most successful is VenturCom's partnership with Microsoft, a relationship that is setting the direction for automation in locales ranging from construction sites to plant floors to Los Angeles streets. Microsoft's Partner of the Year in 2000, VenturCom developed the version of Windows NT put on microchips (NTE) and embedded into intelligent devices. Essentially, devices become another node on a Windows NT network, eliminating the need for an intermediary that translates between Windows NT's native command set and the native language of a remote device. Further, VenturCom has developed additional capability for NTE that supports real-time control of devices, RTX Version 5.0. The result is that devices communicate directly with back-office applications, avoiding layers of intermediate software products. Further, Windows applications and there are zillions of Windows programmers around may be used to schedule and control the devices.
VenturCom announced in February, for instance, that Cleveland Motion Controls is using NTE and RTX in a new shape-cutting control system. The NT platform allows the cutter to talk with business applications and additionally makes preemptive scheduling and the full computing power of the OS available to the application controlling the cutter. Cleveland offers its clients a product that is integrated with standard accounting and inventory packages and controllable using a clock and mathematical algorithms of any sophistication.
VenturCom has found other folk to use the NTE/RTX combo, too. SK Group of Nice, France, has integrated it into a new line of cranes used in construction. Sensors mounted to the boom continuously monitor the location of other cranes and construction equipment, and the underlying software application automatically seizes control of the machinery, coordinating with other devices on the network if a collision appears likely. Operators communicate and control equipment using a familiar OS that requires no special training.
A partnership comprised of VenturCom and VersaLogic will develop a rudder control system for use on the U.S. Navy's destroyers, under contract to Litton Marine Systems. Pacific Current Information Systems developed a NTE/RTX-based fruit packing system that sorts, diverts, packs, and weighs cherries, then prints the shipping labels. In Los Angeles, sensors embedded in roadway pavement send traffic data back to City Hall, where traffic-light timing is automatically updated to keep traffic moving smoothly.
AutoDesk may have slipped under Gates' radar, but it's clear that Windows OSs, supported by applications such as SQL Server, are going to become increasingly important on the plant floor as information technology departments learn there's a way to sidestep the bewildering complexity of multiple control and reporting applications, implementing multiple communications protocols from multiple vendors. Microsoft's partnerships with firms such as VenturCom and Iconics, whose president, Ross Agrusa, described his company's products as "Microsoft to the core" at an ISA EXPO/2000 press conference, could provide the breadth of capability that lets Microsoft finally become dominant enterprisewide and dislodge enterprise resource planning and manufacturing execution systems developers outright.
Product placement deals
Ever since ET scarfed down some Reese's Pieces and sent Hershey's profits into orbit, marketing types have regarded product placement deals with something akin to reverence. Thanks to plant simulation and design software, manufacturers of monitoring and control instruments have a new way to get their products in front of potential purchasers. An 8 March press release headlined "Fisher-Rosemount and Hyprotech form alliance to deliver integrated process control solutions" exemplifies these arrangements.
Engineers have been using design and simulation software for years. What has changed is that it's no longer necessary to use generic "black box" devices in their analyses. Now, designers open an e-catalog to select a part, and the analysis uses its properties automatically. Not only are the analyses and simulations more accurate than when using a generic pump, but also when the designer is satisfied, he gets a list of part numbers ready to send to purchasing.
The Hyprotech software doesn't limit designers to using only Fisher-Rosemount equipment, but it gives Fisher-Rosemount an edge with users of Hyprotech's design package. Hyprotech will provide data from other manufacturers sometime in the future, but until that happens, plant engineers could still find themselves thumbing through thick catalogs and calling local sales reps for engineering data and current prices.
On the other hand, Intergraph, developer of the SmartPlant PID and InTools packages, favors an open design that allows any manufacturer to connect to its software, relying on manufacturers to develop and maintain engineering properties databases. IT