John S. Rinaldi's Ode to Automation
John S. Rinaldi's Ode to Automation
1 - The State of Manufacturing in the 21st Century
The world of manufacturing has rapidly changed over the last several decades, from popular IT programs making their way to the factory floor, to collaborative robots and the world of Industry 4.0.
Join host John S. Rinaldi and special guest Bill Lydon, consultant and contributor at Automation.com, as they discuss the changes manufacturers are encountering with their factory floor technologies. In this episode, they discuss:
- What hallmark changes have happened on the factory floor over the past few decades.
- The impact of enterprise systems for all size manufacturers.
- The challenges manufacturers face when matching offerings to customer needs.
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[ Intro music] Welcome to the manufacturing data connectivity podcast. This is John Rinaldi, your host today, and we're we have a special guest, Mr. Bill Lydon who has, oh, even more experience in industrial automation than I have. So it's a, it's a pleasure to have you Bill welcome.
Bill Lydon:Oh, thank you. Good to be here.
John Rinaldi:So we're going to talk about, uh, oh, a number of things that are going on industrial automation and data connectivity, and, and for people who don't know you, Bill, why don't you just kind of give a we can't, we don't have four, four or five hours to go through your resume. So why don't just give us the highlights?
Bill Lydon:Yeah. Real quick. I've been an automation my whole career. And actually I started in a direct computer control and machine tools, which was very fortunate to start there with strand machine tool, which was one of the pioneers. So I worked around a lot of smart people and then Johnson controls for the building automation. Uh, we were building systems and networks, and I was on a skunkworks for two years where we defined architect at a whole system, including microprocessor based controllers and HMI's and a whole system approach. And then I co-founder ran a software company for quite a while. And now I do consulting and, and, um, authoring for automation.com and ISA is in tech magazine articles and features.
John Rinaldi:So you and I have been around for a long time and we've seen a lot of things happening, but is it, is it just me or are things moving faster now than they did say 20 years ago?
Bill Lydon:Um, I don't know about 20, but certainly in more recent times they're move faster. Uh, to me, the, the hallmarks of change in the industry have been the invention of the PLC and the wide adoption of it. The distributed process control systems, which was really commercially invented by Honeywell and TDC series. That was a landmark change in the industry. Um, open networking and particularly Ethernet has been another change there haven't been, you know, people think of a lot of minor things as changes, but many of them are just refinements on current systems. There's some major landmarks that have happened and I, and we're hitting it with entered industry 4.0 industrial internet of things. These days there is an acceleration, but I guess my overall like high-level evaluation of that is industrial automation and process automation have always leveraged or changed as commercial technologies became solid and mainstream. Because if you look at the earliest systems, they were built all proprietary from top to bottom, then windows got popular. And so the HMI's became standardized. Then the next level was ethernet networking as the ethernet was established that took hold and that's just continually been the pattern is certain commercial technologies become very popular, um, and established that's what the industry uses. One of the more recent ones is Mim sensors, um, micro machines. Uh, I looked at the, when I was on the skunk works, we were looking at them years ago and they were horrendously expensive, but the price has dropped out of the bottom of those because they're used in cell phones now and there's high volume. And that whole level of sensing as a, as another good example of what I would consider, one of those kind of landmark shifts that's happened.
John Rinaldi:So if we extend that trend and talk about and think about if things have always come from outside the industry and been you, as they became popular, as costs have been reduced, or they become standardized, they've been adapted by automation, by industrial automation market for use in manufacturing systems. What kinds of things are we looking at now that are popular, that are going on at, in the, say the IT world and other things that are going to be pop that are going to be trends that are going to influence how we do manufacturing, you know, over the next three to five years?
Bill Lydon:I think the biggest trend is, uh, the transition of enterprise business systems ERP was considered a term, but it's much broader than that. These days shifted to real-time transaction processing. In the past, they worked on a batch basis that the ERP system would send the, take all the orders from customers, figure out all the manufacturing paths, all the materials required for manufacturing and send that information down by paper. In some cases into the plant to release materials, get work orders for machine work, being done and production lines. And then they were blind. They had what they call the back-flush cycle. A typical one was 24 hours. So at the, in a 24 hour period, or at night, they would send all the information from the plant floor back that was entered into the ERP. So they figured out what actually happened in the plant. And that's because the systems worked on what was called the batch basis. And then the manufacturing execution systems was a middleware system that essentially took all the information from the enterprise system and then had the models, every, all the models from the enterprise system that tracked everything in real time. Well, that's very cumbersome. You layer layered in another system. Well now enterprise systems that become real-time transaction processing, SAP HANA, and that's quite a long time ago was the pioneer, but everyone's followed in that path. So now you have immediate understanding of what's going on in the plant because there's a direct linkage and that is growing dramatically fast. I interviewed a company four years ago, a small little company, you know, less than 50 people and here's a big change that's happened. They, these guys that bought this company had come from larger companies. So they used cloud-based enterprise resource planning systems that were running in real time to have all the features that a big company would have to understand what exactly what was running in their plants and making it happen and got tremendous efficiencies. Now they were very leading edge kind of people that understood the dynamics. Now this is becoming mainstream.
John Rinaldi:So you're saying that this is not just the big boys, the Proctor and Gamble's and the 3M's and people of that ilk, but even smaller manufacturing companies can, can use these kinds of technologies and processes to enhance the operation of their machinery. Is that correct?
Bill Lydon:Absolutely. Even small, even a machine job shops.
John Rinaldi:Wow. That's, uh, uh, that that's going to be a pretty excellent way for them to increase their efficiency and their, and the way they, their whole, their whole operation. What anything else? What, what, tell me some of the things that have surprised you that have happened to the last five years or 10, even 10 years that you never thought would have been possible?
Bill Lydon:The one that the single biggest thing I see right now is collaborative robots, that this is a big change because collaborative robots came about as robots that they can't pick up an engine block, they usually get about 20 kilograms or so that they can pick up relatively small, but their cost points now are like under 20,000, under$40,000, you can get a very reasonable one, their program, like a game, which is a huge change robots in the past, that was very cumbersome to program the robots. But now you have it's, it's like, what you see is what you get kind of programming on a computer for spreadsheets and things, right? And you can do the cobots. And it's a massive, it's a huge seed change because small companies can now get a cobot to do repetitive information. There's all kinds of examples of them. I've written a lot about this, interviewed a lot of people on this and including very small companies that are using these, these units. To me, that's the biggest single automation investment right now that has the highest payback that I can see in the industry right now.
John Rinaldi:W what about is that, uh, being applied even to union shops are unions okay with these kinds of, uh,
Bill Lydon:Yeah. That I think that's long. Well, first of all, a lot of those smaller companies don't have a union thing going on, but the robot argument in big companies was, was argued out in the automotive in particular years ago, because to remain competitive, they had to get automated, right? Because if you look at the auto industry is a big one, because he uses a lot of automation. They were getting killed by foreign competition. First, the Japanese then Koreans. And because those P those companies in those countries were automating with a vengeance. Japan still has the highest number of robots per capita in the world today. Um, so th th that became a survival issue, right?
John Rinaldi:How did these robots, then you program like a game when you say your program, like a game, is that a, you just link them through a particular sequence, and then they know what, how to do that?
Bill Lydon:You can link them through a sequence, you can move the arms and, and effect the effect and the factors. And there's a lot of factors to program it, or you can program it, you know, using a display, right, with a joystick and so forth or more becoming more prominent is you can simulate designs of products and machines on software and use that software to drive it. And that software, the price points and the ease of use of that kind of software has come down dramatically. You look like Auto CAD inventor, and I don't even know people like PGC, uh, Creo and other things they have cloud-based, uh, systems for doing solid modeling, design and simulation that you now can do all that and drive it into the, um, into the robot for the control. And this is another seed change. Back in the early days at Johnson, I would get into, uh, traveling around engineering firms, architectural and engineering firms. And I remember being in New York when there was scads of drafting tables all over the place, right. Then I was out in California visiting some of the smaller companies that were really doing well, they were using Auto CAD, which was new on the scene. Right. But a dd, t hey Auto CAD d emocratized C AD without going into all the details. These people w ere far more effective and efficient and competitive. And so that's another, these k inds of changes happen, these shifts, and there's some, in some times more traditional companies have a difficulty shifting to the, some of the newer things.
John Rinaldi:I can echo what you're saying about robots and cobots. One of the biggest growth areas we've seen in, in the work we do in helping vendors get integrated on the factory floor is in robot companies, come into us and say, Hey, we need to support PROFINET, we need to support EtherNet/IP, we need this, that, and the other thing. And, u h, i t's been, you know, that's just, I think last year we might've done four or f ive, six of those. So that's, u h, t hat's really, u m, t rue. Now you mentioned PTC and Allen Bradley, u h, m ade a big investment in PTC. What's what's going on there. What's that all about, u h, w hat's the, you know, Allen Bradley's dominated manufacturing now for what, 30, 40 years here in north America, is that going to continue? Why di d t hey make the investment at P TC? Tell us more about that.
Bill Lydon:Oh, Rockwell made over a billion dollar investment for 8% of the company abroad. I was eight, eight point something I think, and at a board seat. And I think what happened is they realized PTC is amazing software company. They are at every level from the CAD, the simulation all the way down to the edge and edge computing platforms that are having the software for those, especially with their thing works product. And, uh, I think Rockwell decided, well, I think Rockwell needed something because their major competitors, Siemens who also the leader in the world had made us over a$3 billion investment some years ago in UGS, which gave them that entire stack of software from design product, life cycle management, all the way down to the edge says, um, software stack. And I think Rockwell decided that was something they needed to do. Uh, as a company, I think it was a brilliant move on their part to make that kind of a move. And they have co-branded products now. Uh, but Rockwell is also selling the higher end, um, PTC software products, also these things they had never sold before, right?
John Rinaldi:So are they changing their product strategy then to, to, to become, to sell different kinds of products instead of PLC and IO and, and they're moving to, into a, are they becoming a different kind of company? Will we see something different out of them in five years from now than what we see today?
Bill Lydon:Well, I think Rockwell is still selling products, but they, they ha they recast their, um, the way they segment their business, uh, recently into three segments, uh, intelligent devices, software and control, which includes the PLC software and lifecycle services and lifecycle services is a big area for them. So they're, they're doing a lot more in the services area is still selling their bread and butter products, but services encompass everything from consulting, cybersecurity services, uh, system integration, they acquired some nice, good sized system integrators. And, um, they've just been, uh, growing that business towards the services side of things.
John Rinaldi:How does that, I mean, they have close partners that are system integrators that can't be well-received?
Bill Lydon:Uh, they're trying to manage that. I, you know, that's always a tricky business, but all our competitors have the same kind of setup. So, uh, there that, is it something they manage and work with it. I'm not saying there's not friction that can happen, but that can be managed.
John Rinaldi:What, what are some of the, uh, the bigger challenges manufacturers have and today, and over the next few years, what are they, what are they concerned about? What keeps them up at night?
Bill Lydon:They got to match their customer, their need, their offerings, to what their customer needs. That's probably the biggest factor and driving out label, labor costs, purchasing costs and logistics costs. Those are the big highlight items for them.
John Rinaldi:That's hard to do. I mean, there's, there's a lot in that to drive and drive those costs out. I mean, it's, uh, you could tack that in lots of different ways. Is it mostly labor? Is it raw materials? Is it price? Is it machinery? What, where know where where's the, where should they be?
Bill Lydon:That's where automation comes in as to driving out labor costs. You know, other parts of the world have realized that you can't compete on labor, low labor cost anymore. You've got to automate and you automate for precision quality and productivity, and every country has got a demographics issue, aging population. If you look at the demographics, most of the countries, uh, uh, and totem pole, um, China's got probably the toughest problem there. And maybe that's why they're the largest purchaser of robots since 2011 in the world. Uh, India is pretty good in that regard, in terms of demographics in the U S and sort of in the middle
John Rinaldi:Is that, is that one of the drivers of, uh, of the on- shoring movement and, you know, are companies realizing that, Hey, if we're going to do automation, we, there's no reason to have an automated factory in Vietnam if we can have it in Tennessee.
Bill Lydon:Yeah. And I think, uh, yeah, but on-shoring is overplaying the on-shoring. If you look at the statistics, the information, uh, yeah. There's certain areas where people are on-shoring back to the U S but it's not as big as you might think. Um, some of the changes that are going on is moving out of China, into Taiwan and other areas, because China's, they've been coming a more expensive producer as time goes on. I'm sure that's why they're working to automate harder. But if you look at the statistics, um, the on- shoring movement to the U S is not that large.
John Rinaldi:Well, we've always had, uh, German companies and European companies coming here to be, to be more local and to serve the local market better. Is that changing too? Or is that, is that, are we still importing a lot from Germany?
Bill Lydon:Well, I think we're, it's both, what has happening is other companies from other countries are putting plants to be closer to the customer. Right. And that's why U S com and they're no like big building BMW is here in the states and things like that. That's also why companies have to put some help, have locations and operations in China. China's got like 20% of the GDP of the world, so you can't discount it. So that's where that, that whole idea of having plants localized to your markets, not that you have a plant in one country and ship it to the rest of the world, that just costs more in logistics. Right. And now with the COVID crisis, people are realize, wow, this is even a bigger problem. You can talk about logistics.
John Rinaldi:Yeah. Well, the logistics are very, I think we've learned that with the tsunami in Japan, with COVID that, uh, logistics are everything. If you, if you can't move your raw materials and get them where you need them to be, if you can't move your finished product to where it needs to be, then you're, you're out of business.
Bill Lydon:Yep. So very, very big issue.
John Rinaldi:What's, uh, what's going on in Europe or is Europe ahead of us? It always seems like the Germans have a more structured approach to manufacturing and they all seem to March in step at, or are working in the same, you know, toward the same end where America, it seems like everybody here is once is a cowboy and has their own direction, and is leading the charge in it in a different area. Is that true?
Bill Lydon:Germany is by far the has honed their, if you look at the statistics, the KPIs as a manufacturing, uh, org, the country of manufacturers, they are very well honed operating organizations. And if you had toured a German companies and you may have done some of this, you see it in their, where they operate and other countries are doing the same thing. Uh, but Germany has been a early poster child, that area. I mean, they're, they're like everybody, they're struggling a bit right now, but, um, but that's kind of the way of the world, but they've, they're very good at automating. They're very good at organizing. They essentially have been setting the world standards in industrial automation for the world. Uh, if you, my best example is that as a din rail, if you go back the early days, din rails were coming to the states, all the major suppliers, Allen-Bradley Cutler hammer, square D all of them, they had different, they had their own rail systems and they fought tooth and nail and did white papers that the din rail was no good. It was a bad idea. Well, eventually run out because it was a standard, right? Whatever, walk away from a standard once you knew what it did for you, right?
John Rinaldi:Um, well, yes. And the Germans have, have, have all standardized on OPC UA. They have standardized on industry 4.0, they're all, they're all working together, uh, kind of off the same hymnal. And certainly we don't do that in the U S and I don't know if that's to our detriment or that's to our advantage.
Bill Lydon:Well, I think that, I think the world we're starting to realize in the U S companies are realizing they gotta be more mainstream with the standard. So, um, I think that's coming around another big factor in Germany as the, at other, other parts of the world. I've traveled in Asia, the manager, the management at the manufacturing companies, the top ones understand manufacturing. That's been a problem in the U S so that's starting to change, but we were more interested in buying and selling companies than, than honing the company as a manufacturing company that is starting to change.
John Rinaldi:We we've had those finance executives that are interested in merging and growing by mergers, M and a, then, then doing actual operational efficiency and really trying to make a plant everything it can be.
Bill Lydon:Okay. That's fair. Yeah. That's starting to change, um, uh, Darius Adamczyk I really a neat guy runs Honeywell now he's a guy, who's an engineer. He's a great example of a strong, smart leader, um, as like, as a case study.
John Rinaldi:So, so you've got, we're coming up to the end of the time here, Bill. I understand that you're going to be publishing our automation.com is going to be publishing an article from you on the 2021 top trends. Can you give us a little preview of, of what you're going to be talking about?
Bill Lydon:There's one out there right now that you can go look at of the top trends. Cobots is one of the biggies, right? And edge computing and cloud, and the integration of enterprise right down to the plant floor is another.
John Rinaldi:So that's that, that's the thing is ours, the enterprise and the plant floor, all actually going to merge. You expect that to happen in the next three to five years?
Bill Lydon:That's happening now.
John Rinaldi:It's happening now where? Who's doing, who's in, who's doing that?
Bill Lydon:There's a lot of, I've written a lot articles and you can see it happening. And even if like at the machine tool show, when I went and well, the last time we had a physical show and did interviews of, of different people, a company like Epicor, which is known for machine shops and things like that, they have real time enterprise systems are monitoring machines, taking that data right into the system. Now the control piece is still separate the heart or control part of it, right? Yes. But, but the big, and this was in the 2021 report trends report. A big piece is industry 4.0 industry 4.0 is a, is a modern digitization architecture and model it's holistic. And we don't have not thought that way. And what's interesting industry 4.0 was spawned in Germany, but it's also has an in that article, it talks about this other countries, including China, India, Mexico, uh, I'm missing some Italy. They all have worked cooperatively with the Germans and the German institutes do a lot of work on this stuff to have their own industry 4.0 initiatives. But the core parts of the model are the same. It's a system level architecture for manufacturing from supply chain through the plant floor right down to the lowest level and out through to the customer.
John Rinaldi:Well, that's a, that's an exciting, that's exciting. It, you know, I don't know when that's actually going to reach to the, the smaller plants or I think that there's certainly a lot of benefits to that kind of work. I mean, you really can run, uh, a much more efficient, much more productive plant doing all that. And it's gonna, that's going to require some changes to the way we operate changes to technology, uh, deployment of, of new technologies on the factory floor. And I think I agree with you that that's, that's probably that's happening, uh, sporadically in different places at different rates. And some companies certainly are ahead of others in doing that.
Bill Lydon:It's happening. Uh, PR people have produced products and a regular flow it's happening at. As you go down to the make to order job shop kind of companies. You're not going to see as much of that, but you'll see the technology is permeated, but even a job shop like a machine shop that does, you know, maybe has 10 machines, job shops. They've used job tracking and labor tracking systems and been eliminating paper for the last 15 years. And that's another aspect of this is getting rid of the paper.
John Rinaldi:It's, it's really gonna, it's really interesting, really exciting. And, uh, thank you very much for, for, uh, for joining me today in the, in the automate data connectivity podcast. And, uh, any, any, if somebody wants to get a hold of your Bill, how can they get ahold of you?
Bill Lydon:I'm on LinkedIn, just look up Bill Lydon L Y D O N. And that's easiest one. My name is not that it's kind of unusual. You can find thanks again, times. Very exciting, fun, and take care.[ End Music].