Why is the Automation market declining?

A
> I keep hearing about all the customers who are abandoning PLCs but
> haven't seen it in my markets. Maybe our old school clients are just
> resistant to change...

I haven't been in this market long, and I'm actually more on the software/development side rather than out there in the field, but my boss,
who does have the experience, was mentioning to me about how the different geographic regions of the US use very different hardware sets.

In the midwest, PLCs abound, while on the west coast, and to a lesser extent on the east coast, PCs are much more common place. The fact that my
company, with offices in California, tends to sell more to the midwest, fits into this nicely. Our main piece of hardware, a "smart" operator terminal (where one can do some pretty complex programming along with merely displaying items from an attached PLC or motion controller) is a much harder sell in California, because people like to use PCs.
 
D

Dave Ferguson

Jim:

Companies today are playing the Stock Market investor game and we are all part of it. If my 401K doesn't produce, I switch to another never thinking about the people that I lay off across the country.

First comes the wave of re-managing, then automation, then consolodation to save money on infrastructure (duplicate accounting, payroll, purchasing, sales etc) then layoffs etc. The only issue is in the meantime, no-one is making better products and you get knocked off the top of the hill.

As you said there are a number of examples farming, steel etc. We are experiencing it in the paper industry. The only issue I have is R&D gets hatcheted as one of the first. And innovation slowly dies and in the end sooner or later YOU HAVE TO MAKE A BETTER PRODUCT, it might not be this year or next but sooner or later .......... This is what keeps getting forgotten in the crazy stock prices world. There is a great Dilbert with Wally and Dilbert watching everyone get laid off and downsized and the next frame looking at their computer and saying "Stock price ....... up three
points" and high fiving each other.

We are reaping what we sowe (SP) so to speak in this country. We have all heard, who will buy the product when we are all automated .............. I say who will by our product when we have stripped out all the resources to make it better ...........................

Stock price ............... Up Three Points ....... Yeh

Dave Ferguson
Blandin Paper Company
UPM-Kymmene
DAVCO Automation
 
R

Ralph Mackiewicz

> Michel A. Levesque commented :
>
> >I believe that the global market is not declining.
> >Maybe if one looks at just the major market (NA), but not the
> >entire worldwide industry. If the entire industry is on the decline
> >then why are we (list members) not out looking for other jobs?
>
> Jim Pinto responds :
>
> Ah! But, many in the industry *are* laid off and looking
> for new jobs. Take a look around you. The consolidations
> among the majors are causing a lot of divestitures and cutbacks.

Yes, but this, by itself, does not mean that the overall IA market is declining. It means only that the fortunes of the "majors" is declining. As I said before, we are doing more systems these days with less "IA" content (PLCs) and more generic technology content. The stuff being used as replacements is not purchased from the
majors. Does this mean the overall IA market is declining or is the decline a statistical fluke caused by an over dependence on the assumption that the overall IA market is defined by the majors?

> This is not an accident - it's part of the evolutionary process.
> Farming, which once employed a major segment of the population,
> now employs less than 2% in the US; there are few rich and innovative
> American farmers. Similarly, manufacturing employed over 35% in the US
> less than a century ago and this is steadily reducing to about 15%
> today.

Yes, but just because the market changes does not mean it is declining. While there may have been some "real" declines in manufacturing, there are many many people working in manufacturing that are not classified as being employed in manufacturing. As most manufacturers have gotten focused on their core businesses they have
restructured by shedding employees involved in many other aspects of their business (IT, IA, clerical, etc.). They then hire back a
significant percentage of these employees (in terms of head count) from subcontractors ostensibly in the "service" industry. This is
called "outsourcing". The result is a statistically visible decline in manufacturing employment. However, I would suggest that a good
portion of this decline is a statistical fluke due to the fact that either 1) the early numbers were inflated because it counted support people not directly involved in manufacturing or 2) the new numbers are depressed because many employees supporting manufacturing are now classified as service.

The same kind of affect could be happening in the IA industry. The 'majors' just aren't in a good position to take advantage of the change so they undertake M&A activities to fight this off. But the facts that sales at the majors are flat or declining and that they are involved in M&A is not necessarily by itself indicative that the
IA market overall is declining.

I'm not suggesting that you should put your head in the sand and ignore the changes that are occurring that are discussed in the article. But change at the majors is not necessarily a decline
overall. Change at the majors can mean real growth in areas that they aren't serving.

Regards,
Ralph Mackiewicz
SISCO, Inc.
 
M

Michael Griffin

At 15:44 15/09/00 -0700, Jim Pinto wrote:
>Michael continues :
>>There are some fairly large companies in southern Ontario that build
>>equipment, and more have been opening up as people see the business
>>opportunities. A lot of this equipment is exported. Quite a bit goes to
>the
>>US market, but also to other countries around the world.

>Jim :
>Michael, define "large". <clip>
For the companies I deal with, say 200 - 300 million dollars plus in annual sales for the largest down to 50 million dollars plus for some of the medium size ones. I believe there are a number of other sizable ones, but they don't build the sort of equipment I buy. These are not giant companies, but this isn't a business composed of giant ones, rather it tends to have a
lot of small or medium size ones.
I don't have detailed sales figures, that's not the business I am in. The point was though that if these companies are expanding at 20 - 100 percent per year, why are the companies which supply them with components doing so poorly? What is so exceptional about the companies that I do business with that they are *all* so busy while the rest of the world isn't?


>Michael's list :
>> 2) The Canadian market (or at least southwestern Ontario) is
>>booming, but the rest of the world isn't. (Is this likely though?)
>
>Jim :
>Not likely. The Canadian market for industrial is *not* booming -
>except in some very narrow geographical and market areas.

OK, but Michel Levesque mentions that "Michael, for your info. the entire province of Quebec is booming. I used to work for the Rockwell
distributor here before starting with an integrator, I have seen the market here grow substantially in the past seven years."

Now I see Ontario booming, M. Levesque sees Quebec booming (with respect to the industry we are talking about) - and that just about covers
the most of Canada as far as general industry is concerned (excluding mining, pulp and paper, oil, etc. which are process industries). The bulk of
the automotive, appliance, aerospace, electronics, telecommunications equipment, chemical, steel, general industry, etc., etc. are concentrated between Windsor and Quebec City. (And if anyone from Alberta is reading this, please take a tranquilliser before commenting on that point). To put these numbers in perspective, I believe that nearly one in five of the cars
built in North America are built in southern Ontario so some of these industries are not insignificant in size.
In other words, as far as Canada is concerned, "very narrow geographical and market areas" are precisely the ones that M. Levesque and I are *not* referring to. So the question remains, what is so exceptional about what we see around us?


>Michael continues:
>>The structure of the economies of the US (which Mr. Pinto is looking at)
>>and Canada (which I am looking at) are very different which means there
>> is no reason why demand for any particular class of specialised products
>> would necessarily be synchronised (or have any relation at all) between
>> the two.
>
>Jim :
>The economies are different, but the underlying financial structure is the
>same. On my global "Industrial Automation Majors" list, there is no
>Canadian based company. All Canadian majors are subsidiaries of the US,
>European and Japanese majors. *Oh yes!* there is a relationship between the
>two.

Yes, but what is your point? I was only advancing a theory as to why I may be wrong while you may be correct. Is the possibility I have advanced the reason why I may be wrong?


>Michael continues (On a slightly different tack) :
>> we have had custom equipment quoted for us by American companies
>>and I have noticed that the price of equipment built in the US is much
>> much higher than comparable equipment built here.
>
>Jim :
>Yes, because "custom equipment" is *always* quoted high, since it needs
>local assistance. <clip>
and
>It has *nothing* to with the dollar value.
>Custom (one off) projects are always lower priced locally, and
>avoided by foreign companies, since they always need local,
>on-the-job hand-holding. <clip>

Except that some of these US companies are physically closer to us than some of the Canadian companies, yet they bid 50% or more higher. However again, you are arguing my point rather than your own. I advanced a theory as to why I may see a growing market, while you see a shrinking one (machines built here and shipped there). I agree that the machinery market tends to be local (except for very large or specialised machines). This is why I dismissed this explanation by saying "I seriously doubt that this
particular problem has been large enough to have a significant effect on the overall market in the US though." In other words, I don't believe that it could explain why I (and M. Levesque) would believe we see a busy market while it is declining in the US (or world wide).


>Michael :
>> 6) *World wide* sales declines are an illusion caused by
>>converting all sales into US dollars. Restating sales in say euros,
>>yen,(or even Canadian dollars?), might show a different picture.
>
>Jim :
>Nope ! It is *not* a currency problem! That is always a temporary shift
>in a global economy. <clip>

However, "temporary" can last for years - long enough to put a severe squeeze on any business. Introductory economics courses used to teach that currency values followed trade flows. This has long been an obsolete notion. Currency values now follow capital flows which dwarf real trade in goods and services. This is why the US can have a 400 billion dollar trade deficit and a rising currency, while Canada can have a 29 billion dollar trade surplus and a falling one (figures in US dollars, from the latest issue of The Economist).
The result is that price differentials between countries (even at Parity Purchasing Power values, let alone nominal ones) can persist over long periods of time. The only limit for traded goods such as industrial automation products is how long the companies which control the markets are willing (and able) to maintain price differentials in the various markets in
order to pursue their long term pricing strategies.
Actual manufacturing costs of many of the products they sell are only a fraction of the final sale price. This means it is financially
feasible to have different prices in different markets provided they actually can keep these markets separate by various means (e.g. tight
control of distribution channels).

Are they doing this? I don't know. I was merely advancing another theory as to why the market may look busy to me (and others) while it is actually "declining" world wide.
This point could be easily dealt with if anyone had a representative list of prices changes of various products in different markets. If prices do not closely follow currency movements, then there exists the potential for the situation I have outlined above. If this is the case, then of course Mr. Pinto may be entirely correct in his statement that the market is declining, but only from the point of view of US dollars.

>Michael's summary :
>>Particularly, I would like to know why industrial automation suppliers
>>would have declining sales if their customers are so busy.
>>What are we missing here?
>
>Jim :
>Why ? Please go back and re-read the article.
>I have listed 6 major reasons for the decline.

Ok, I understand that good scholarship requires occasionally going back to the primary sources. However, this is where I *started* on this thread. I listed your six points and discussed each one. This conversation proceeded from there. My conclusion was that I could understand your points as explanations of why the process industries or the US market may be in
decline, but they did not provide sufficient explanation of a *world wide* general decline.


>As to the customers being busy - I know a lot of avocado farmers
>and apple-orchards that can't grow enough avocados and apples.
>So, would you like to be a farmer? <clip>

Sometimes the idea has its attractions. However, to extend your own analogy, if everyone is buying apples and (I'm not sure what an avocado
looks like - so lets say apples and pears), then I would be very surprised if the farmers weren't selling any.


This discussion has so far consisted of a mountain of speculation hoisted upon a modicum of fact. Your article can be summarised as follows:

Pinto's First Postulate: "The total automation market is stagnant ... there may be some segments growing more than others, but the total market is simply NOT growing."
Can you please cite some suitable statistics for this? I looked for some on your web site, but wasn't able to find any. I believe that "Control Engineering" publishes some sales statistics now and again, but I don't recall what they were.

Pinto's Second Postulate: "For the majors, their strategic core businesses continue to shrink and some segments are losing money."
So, are Rockwell, Siemens, etc. seeing their PLC and motor control businesses shrink? Are their sales in these areas actually declining? By how much?

Pinto's Third Posulate: "most industry participants - vendors, customers, sales channels - continue to be blissfully ignorant of the fact
that leadership is changing hands, talent is migrating to greener pastures and consolidations are occurring because business is stagnant."
Are these people ignorant of the business stagnating, or are they ignorant of the "leadership changing hands" etc.? I must admit that I (a customer) was ignorant of both. Why though would the vendors and sales channels be ignorant of either stagnant business or "changing leadership". I thought that that sales figures were all these guys ever talked about.

Please Mr. Pinto, I am not doubting your word on any of this. However, I was trained to look at the numbers. Can you (or anyone else)
please tell us what these declining sales figures are?

I will finish up by commenting on the anecdote at the end of you article. You related: "Some time ago, while visiting a steel plant in China, I asked the engineers where they got their knowledge. They showed me a McGraw-Hill 1948 textbook on steel making. And then I looked at their instrumentation - well maintained and more than adequate pneumatic displays, recorders, valves and controls."

The state owned heavy industry in northern China (and in Szechuan) is well known as a black hole down which the state pours a substantial proportion of its annual budget each year. This has become unsupportable in recent years, so that the state faces the choice of either modernising or closing them down. Given the large numbers of people employed in these
industries, closing them is not very politically attractive.
If I were in the business of selling control systems to steel mills, I would look at your anecdote and see an interesting business opportunity.


**********************
Michael Griffin
London, Ont. Canada
[email protected]
**********************
 
An astute observation, Ken.

This is not the first time this has happened in the automation industry either. It seems to go in about 30-35 year cycles. First there is
consolidation of big companies, accompanied by stagnation. Then some little startups come up with a biig idea, like, oh, a really good differential pressure transmitter, for example (Rosemount) and they start out in somebody's garage, but they grow. We are in the third such wave of ferment in the automation industry.

Walt Boyes
 
S
On 15 Sep 00, at 18:34, Ken Crater wrote:

> Jim said:
> >Farming, which once employed a major segment
> >of the population, now employs less than 2% in
> >the US; there are few rich and innovative American
> >farmers.
>
> Hmm, I think that the *percentage* of U.S. farmers who are rich and/or
> innovative is at its highest point ever. As a *result* of this, we need far
> fewer of them. This, folks, is what *success* looks like, not failure.
> Think of all those former farmers who have now been freed up to build
> computers and surf the web <grin>.

Productivity has certainly increased. The U.S. has been able to grow much more than its population needs for many decades now. However most nations have a great fear of becomeing dependant on others for food, and thus they heavily subsidize their farmers. Such was the case here in the U.S.for many years, but recently it has been dramatically reduced. Many farms are now corporate, and there are still many
struggling to survive. It is difficult to sell grain to a country when your competition is heavily subsidized, while you are not.

Larry Seib, [email protected]


Lawrence Seib
Director
X-ray Laboratory
The University of Kansas
Malott Hall
Lawrence Kansas 66045
Phone (785) 864-4347
[email protected]
 
Anthony Kersten wrote :

>> while people are beating dead horses, I certainly plan to
be looking towards other ways of earning an income.
Where and when that wave comes I don't know. Whatever it is, it will
still have a wire attached to it, and it will need to be programmed or
configured. That's what matters.

Jim Pinto :

That's the right attitude!
There aren't any "typewriter repairmen" anymore, but I know a lot of successful people who moved on to use their skills at something better in the "new economy".

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
D

Dave Ferguson

Here, here..... I agree with Jim and Anthony, today is the good old days of tomorrow. Be open to change and new technology after all the tractor is the automated robot (ox) of yesterday.

I spent a 5 year career caught up every day in downsizing worries, layoff tension etc. and left. 10 years later I would have missed no work at my
former employer. what a waste of time worrying. Have an open mind to change and move forward not backwards. In this industry, we all like it for the challenge...........this is just another challenge, enjoy it, life is boring without challenges.

Dave Ferguson
Blandin paper Company
UPM-Kymmene
DAVCO Automation
 
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Ralph Mackiewicz

> > And you don't even have to examine globalization issues to see the
> > >decline in the IA market (although those factors are very
> > >significant). 10 years ago nearly every system we did had a PLC
> > in it bought from a big IA company. Now, hardly any use PLCs. And
> > the stuff going in now is not bought from the big vendor anymore
> > because they are not competitive with the new equipment that is
> > getting bought. While my company is not large enough to have any
> > macro effects on the market, if you add it up over the thousands of
> > integrators in the market who are in a similar position it makes a
> > difference... a big difference.
>
> I keep hearing about all the customers who are abandoning PLCs but
> haven't seen it in my markets. Maybe our old school clients are just
> resistant to change... I must agree with the general theme of this
> thread unfortunately, that is the IA market is not a "growth
> industry". Where our practitioners will land in 5 years (including
> myself) is the $64,000 question (or is it the $1,000,000 question,
> allowing for inflation and Regis' "final answer?").

I'm not suggesting that the market is abandoning PLCs. Just that the market is changing and that general purpose computing technology has advanced to the point where it can replace some of the application niches that were served exclusively by PLCs several years ago. This might contribute to the perception of a decline in the iA industry.

P.S. People have been predicting (incorrectly) the demise of the PLC since 1982 (I think it was 1982). That year there was a paper at the PLC show in Detroit by G&L that stated that relay ladder was dead because boolean state languages were far superior and special purpose controls would completely supplant general purpose controls like PLCs. Once again, buyers ended up being smarter than those making predictions.

Regards,
Ralph Mackiewicz
SISCO, Inc.
 
A

Anthony Kerstens

Perhaps some of you should read Dick Morely's book. I found it intriguing. He discusses this very topic, comparing manufacturing of old to present, predicting where it will be in 2020.

Rather than farming, perhaps a good example would be that manufacturers used to have a VP of electric motors. Sound familiar? i.e.. VP of IT, VP of this, VP of that.... There comes a point where we start to take a technology for granted. I don't think automation will be any different, although the nature of it is more complicated than an off-the-shelf motor.

As for manufacturing moving the cheap labour markets, Dick's book agrees. But predicts that automation is still required to bring manufacturing to the next step where you drop a turnkey operation in the middle of nowhere. It's one thing to bring a process to cheap labour. I don't think that making a buck on the back of cheap labour is going to cut it in the future
because those nations will eventually institute labour laws much the same as we have, hence requiring alternative automated methods.

Jim: Have you read Dick Morely's book? Any comments on it in light of what you've previously said?

Anthony Kerstens P.Eng.
 
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Paul Gruhn, P.E. Moore Process Automatio

Makes me think of the recent book, "Who moved my cheese?". Embrace change or become extinct.


>Have an open mind to change
and move forward not backwards. In this industry, we all like it for the
challenge...........this is just another challenge, enjoy it, life is boring
without challenges.<
 
W
At 11:25 AM 9/15/00 -0500, Craig M. Borel, P.E. wrote:

"It is my opinion.....<snip>... What I see now by my clients is that automation engineering is no more a specialty than mechanical engineering, it is starting to be treated like a commodity engineering service and billing rates are beginning to suffer from the premium billings we once enjoyed."


It seems to me that there is always truth in this type of observation; the mentality that embraces new developments and wants to get involved during
the early stages of a new technology is quite different from the mentality that wants the job descriptions firmly established from years of experience.

That being said, there are always niches present in any field which will allow pioneer-types to have fun at their job. For example, in mechanical
engineering, it may be fairly easy to find people who can run AutoCAD and get a drawing out--not like in 1985. But it is still hard to find people
who know mechanical engineering AND materials or electronics well enough to make the cutting-edge products required by the marketplace. People with
multiple skills are rare and valuable in today's specialized workplace.

When there is a transition period, people whose jobs are threatened by the shift can react by:

1) Ignoring the situation totally, eventually getting a job at McDonalds.

2) Increasing their contributions to their 401K and waiting it out until retirement, hoping to miss having to learn anything new (I've heard this a lot!).

3) Leave their field right now and totally change their area of expertise (I've heard of several automation engineers becoming stock brokers, for
example). Note that their expertise still may be valuable (e. g. evaluating technology companies).

4) Get expertise in a related field that makes their specialty more valuable, for example learning about some exotic chemical process for the xyz industry, or learning a foreign language well enough to be able to shift to liaiason engineering/tech support...

Personally, I don't feel threatened by any of this; although I have spent most of my adult life wearing different hats in the automation field, there are plenty of other fun sandboxes out there to play in. Remember also, <<vita brevis, ars longa>> ("life is short, art is long"). Years of
experience are not gained overnight, and can be very valuable if you find the right employer who recognizes it.


One last comment--

Mark Blunier said:

"....<snip>...For example Murphy Farms came up with a system to mass produce hogs. They are no longer farmers, but a corporation. Or farmers selling seed come up with better seed varieties, become more successful, then (their) focus becomes more on producing seed, that business grows into a seed company. Thus many farmers with successful innovations become non-farmers, ie, not in the 2% any more."

Someone recently told me that 50% of all the lawyers are located in the US, and there are 400,000 students in US schools waiting to become lawyers. I haven't verified these numbers, but I know that these people are all going to need something to do when they get out. Wouldn't it be great if someone could figure out a profitable way for lawyers to innovate and become non-lawyers? This would truly be a contribution to US society, and would warrant a Nobel prize of some sort! ;^)

Cheers,

Willy Smith
Numatics Inc.
Costa Rica
 
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Michael Griffin

At 09:24 18/09/00 -0700, Jim Pinto wrote:
<clip>
>Today Rockwell joined a growing number of U.S. companies by warning
>that earnings per share would be about $0.09 lower than expected
<clip>
>Accelerating weakness in its already
>soft U.S. automation business is to blame. Automation accounts for
>about 60% of sales, which were flat in 1998, fell 3% in 1999, and are
>expected to decline 5% in 2000.

Aha! Finally! Some real hard genuine numbers! Something we can actually look at. Rockwell (i.e. Allen Bradley) has a sales problem.

>The primary cause for the shortfall was delays in capital spending by
>automotive manufacturers. These capital projects are typically for
>assembly lines and are big-ticket items.

So, we see that Rockwell (i.e. Allen Bradley) is very concentrated in the large automotive companies in the US (nothing we didn't already know there), and these companies have not been buying too much from them lately. Big assembly plants are a very cyclical market though. Changes tend to be tied to introductions of new platforms, and this is not a regular event.
Furthermore, these companies have been putting more and more of their assembly work out to their suppliers, not all of whom buy Rockwell
hardware. In this case though, Rockwell's loss may be someone else's gain.

>During its conference call
>this morning, Rockwell management stated that it doesn't expect any
>improvement over the next six months, and it could not forecast with
>confidence beyond that period. Parts shortages and a declining euro
>also hurting sales and earnings.
<clip>

So what do we see here? One large company, (Rockwell) has a decline in sales because:
1) A few large customers have delayed purchases (a cyclical problem).
2) The sales slow down is apparently primarily in the US market (a local problem).
3) Part shortages (internal management problems).
4) A declining euro (currency movements).

What we haven't seen yet is something which tells us that Rockwell's problems are those of the industry in general (world wide). It would be particularly interesting to know to what degree Rockwell's explanations of the reasons for their problems constitutes fact, and how much is just wishful thinking.


I find it very interesting that Rockwell cites a declining euro as one of the causes for weak sales. Currency movements as a cause of an
apparent sales "decline" for companies keeping their accounts in US dollars was one of the points I had mentioned earlier. A company which kept accounts in euros may see a corresponding "rise" in their American sales when translated from dollars to euros.

The really interesting point though is the little statement at the beginning about "Today Rockwell joined a growing number of U.S. companies by warning that earnings per share would be about $0.09 lower than expected". In other words, this problem is not specific to Rockwell or to the industrial automation business either. This may rather be a sign of a general economic decline rather than just a problem in industrial automation (not that this would be of any help to Rockwell).

>My next article - Pinto's Pointers in the October issue of
>Industrial Controls Intelligence and Plant Systems Report,
>will be on the subject : "Companies in trouble".

We will look forward to this. What would be particularly useful is some figures for other companies similar to those you have included here. I don't know though if the big conglomerates like Siemens and ABB break out
their industrial automation figures from the rest of their business. I believe that both of these companies are primarily in other lines of business.

It would also be interesting to know if the problems are mainly with a few large companies, or across the industry in general (both large and small). A structural change in the industry could shake out quite a few big
players. It is worth remembering that very few of the many large mini-computer manufacturers survived the transition to the
workstation/server/PC market. This doesn't mean the computer industry disappeared or declined though - it just changed.


**********************
Michael Griffin
London, Ont. Canada
[email protected]
**********************
 
M

Matthew da Silva

Good points, both.

Walt boyes said:
Then some little startups come up with a biig idea, like, oh, a really good differential
pressure transmitter, for example (Rosemount) and they start out in somebody's garage, but they grow.

And, don't forget that those guys who started Rosemount were former Honeywell employees who took off to recycle their intellectual property in
an environment more conducive to experimentation. Same thing happened in Australia Honeywell where the Plantscape system was designed. It would have
been tough to try developing such a system in the U.S. due to corporate internal tensions; but it could happen in an affiliate remote from the
center. This leads nicely into Ken Crater's quoting of Tom Kuhn's seminal work, a stunning essay describing the mechanisms surrounding advances in science. He points out that change is the exception rather than the rule. The 'rule' is for existing paradigms to be exercised to the maximum of their capacity. In the systematic elucidation of any theory, eventually weaknesses are made clear. New techniques for measuring these weaknesses emerge and become technologies (that are applicable elsewhere also). Eventually, somebody stumbles onto a new idea, which is tested for robustness in a sort of 'hazing' and is not accepted until it has been
repeatedly resolved to identical or very similar outputs, in multiple independent experiments. A paradigm shift occurs where enough of these
discoveries force larger, monolithic beliefs to be adapted in order to fit the new data.

I don't agree in the decline theory ;) but I do think that the manufacturers should be looking at improving their market research techniques and also in communicating their advantages.

> But, in aggregate, it is anything but market stagnation. It more closely
> resembles the chaos described by Thomas Kuhn in his "Structure of
> Scientific Revolutions", in the period between when an old
theory/technology is
> exhibiting its limits and when a new theory/technology becomes accepted.
> People cast about for new ideas, many different approaches are tried, and
> ultimately one or more of these new ideas come to the fore.
 
K
Just a small point of clarification...

Rosemount was started by three gentlemen from the Univeresity of Minn who had a contract with the Air Force for a temp probe... while Honeywell is based in Minneapolis as well, they didn't have a direct contribution to the founding of Rosemount.

Has it really been that long since Rosemount stopped talking about Very Heath and the chicken coop?

Keven Dunphy
Colorado
 
Ken Crater mentions :

>I think that the *percentage* of U.S. farmers who are rich and/or
>innovative is at its highest point ever. As a *result* of this, we need
far
>fewer of them. This, folks, is what *success* looks like, not failure.

Jim Pinto responds :

Yes, indeed !
Fewer farmers feed the country, with a surplus!

Ken :
>Think of all those former farmers who have now been freed up to build
>computers and surf the web <grin>.

Jim :
This is happening in a big way in most countries.
The sons of the scions of farming are the owners of successful technology companies!

Ken :
>The automation market is a bit of a different case. I think it is
becoming
>highly segmented and specialized, hence the proliferation of companies,
>products and technologies. To a major supplier, this looks like
stagnation
>(and, to them, indeed it is). It also looks like stagnation to analysts,
>for whom only the major suppliers are visible.

Jim :

Ken makes a key point. When the dinosaurs stagnate, the little companies innovate and prosper.

Ken :
>I wonder what the automation market will look like 20 years from now?

Jim :

Totally different ! And the prospect is indeed exciting! Reflect on the change in the computer business in the past 20 years - from domination by IBM main-frames, to CISCO and SUN.

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
Original comment from Jim Pinto :

>> Farming, which once employed a major segment of the population,
>> now employs less than 2% in the US; there are few rich and innovative
>> American farmers. Similarly, manufacturing employed over 35% in the US
>> less than a century ago and this is steadily reducing to
>> about 15% today.

Mark Blunier was offended :

>You seem to be suggesting that that innovation makes people rich,
>or that farmers are not innovative. While I disagree with either premise,
> as a farmer I find the latter offensive.

Jim :
My apologies, Mark - I didn't quite mean it as it came out.... My comparison with farming was to indicate that the total population involved in farming has reduced significantly. There are indeed many innovative and wealthy farmers today - I know several personally, in avocado, chicken and hog farming. But, I also know a lot of
farmers in Idaho and N. Dakota who are "paid" by the Government to allow fields to lie fallow. Farming productivity produces a surplus in the
US.

Mark :
>Most of the innovative farmers share their innovations. When they
>try different practices, that they find to be successful,
>they share it with their neighbors, university research, and farm
>publications. They don't try to keep it for themselves.

Jim :
Yes, that is a clear example of the change in paradigm that occurs when a business (like farming) achieves a new and different paradigm.

Mark :
>While their are some innovative farmers, once they apply there
innovations,
>they are no longer farmers. For example Murphy Farms came up with a
>system to mass produce hogs. They are no longer farmers, but a
corporation.
>Or farmers selling seed come up with better seed varieties, become more
>successful, then there focus becomes more on producing seed, that
business
>grows into a seed company. Thus many farmers with successful innovations
>become non-farmers, ie, not in the 2% any more.

Jim :

Excellent examples of the metamorphosis that occurs from conventional practices to the birth of new ways to innovate and develop the market,
as Ken Crater has suggested in his earlier comments.

Ken (previous) :
But, in aggregate, it is anything but market stagnation. It more closely resembles the chaos described by Thomas Kuhn in his "Structure of
Scientific Revolutions", in the period between when an old theory/technology is exhibiting its limits and when a new theory/technology becomes accepted. People cast about for new ideas, many different approaches are tried, and ultimately one or more of these new ideas come to the fore.

Jim :
I like this discussion a lottttt. It is bringing out a lot of new and different ideas, comments, suggestions, thinking!

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
Anthony Kerstens comments :

>>Perhaps some of you should read Dick Morely's book. I
found it intriguing. He discusses this very topic,
comparing manufacturing of old to present, predicting
where it will be in 2020.
Jim: Have you read Dick Morely's book? Any comments on
it in light of what you've previously said?

Jim Pinto feedback :

Yes, I have read Dick Morley's book,
"The Technology Machine - Manufacturing in the Year 2020" and have recommended it on the JimPinto.com website :
http://www.jimpinto.com/reading.html#MORLEY

You can follow this link to find reviews and buy the book on Amazon.

Comments :
I concur with Morley's view - Manufacturing will move to where the resources are, and move away when the resources are depleted. And, it will change significantly. Automation is *not* just to reduce labor - but to improve quality beyond what manual labor can produce, and to reduce waste etc.

Anthony is right about cheap labor eventually also becoming expensive, due to local labor-laws etc. So, leave out labor from the equation.

Read Dick Morley's book!

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
A

Anthony Kerstens

Dick Morley invented the Modicon PLC, and is sometimes referred to as the father of the PLC.

The book is:
"The Technology Machine : How Manufacturing Will
Work in the Year 2020" by Patricia Moody and
Richard Morley; Free Press; ISBN: 0684837099

Anthony Kerstens P.Eng.

> -----Original Message-----
> From: Rooney,John Peter [mailto:[email protected]]
> Sent: Wednesday, September 20, 2000 1:55 PM
> To: [email protected]
> Subject: RE: INFO: Why is the Automation market declining?
>
>
> Dear Anthony Kerstens:
> I've been following this but I do not recall a book by Dick Morely being
> mentioned.
> What is the title, author's actual name, etc.???
 
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