Bill Polk: Tremendous opportunity ahead in automation software.

Bill Polk

In my last column I cited reasons why U.S. manufacturers should be looking to our own shores when analyzing their value chain networks. Some of them included currency fluctuations, fuel volatility, and supply chain risk associated with manufacturing in remote, low-cost labor countries.

As companies realign their manufacturing strategies in response to the catalyst of plummeting global demand, one area they must focus on is how well their strategic automation vendors and providers can support and enable agility and flexibility. They must be able to help increase the liquidity of hard assets.

Major vendors like Siemens, Rockwell Automation, ABB, GE Fanuc, Honeywell, Invensys, and Emerson have long provided hardware, software and services to manufacturing companies to automate and control processes, integrate systems within and across factories, standardize production across the enterprise and, hopefully, align with supply chain strategies.

Although they don't--but should--enjoy the same mindshare as the large enterprise vendors like Oracle and SAP, they are the backbone of manufacturing and they power, control, and automate complex factories and enterprises. Where they have been weak, and where they must improve in order to thrive--or in some cases survive--is in their ability to accelerate and streamline manufacturing flexibility.

In the 1950's the financial ownership of factories rarely changed hands, so manufacturing strategies were set and assets deployed in a static, inflexible fashion. Stability trumped agility. Manufacturing enterprises were the most illiquid of all corporate assets. Today the only constant manufacturing executives can count on is change itself.

The average plant now changes ownership every five to 10 years--some even more frequently. Mergers and acquisitions are a familiar part of today's business landscape. More than 33,000 deals were consummated each year ...