Rockwell Automation Is Manufacturing Intelligence
Led by CEO Keith Nosbusch, the company helps manufacturers achieve a greater competitive edge.
Erin Patrice O’Brien
Rockwell Automation Inc. (ROK) Chairman and CEO Keith Nosbusch has seen the future of manufacturing and says that 20th-century muscle is being replaced with 21st-century ingenuity. Consider Tata Motors Ltd.’s (TTM) new “smart factory” in the state of Gujarat in India, built for a reported $417 million. Operating with Rockwell Automation equipment that measures and monitors everything happening in the plant, the factory is turning out the Nano, a car that can be bought for less than $3,000, which, according to its maker, eventually will be available around the world and will undercut the price of new automobiles sold anywhere.
JUST THE FACTS
Annual Revenue: $4.86 billion (12 months ended Sept. 30, 2010)
Market Cap: $13.8 billion (as of April 1, 2011)
Listed Since: August 29, 1956 (Rockwell International split into two entities in 2001, and Rockwell Automation began trading under the symbol ROK)
That the Nano can be built in India for so little has less to do with cheap labor and more to do with smart manufacturing. Factory workers use Rockwell’s hardware and software to control every aspect of assembly, from the color of paint used on the exteriors to the type of audio system installed in each car based on customer preference, explains Sujeet Chand, chief technology officer at Milwaukee-based Rockwell. Information from Rockwell’s controllers — clusters of computers and sensors installed on the shop floor — alerts Tata factory managers when a piece of equipment requires maintenance and allows the factory to get parts (seats or components for the heating and cooling systems, for example) from suppliers in real time, when they’re needed and in the right quantities based on orders received from Nano dealers.
“The myth about emerging countries is that they use cheap labor with abysmal working standards in terrible plants and abusive environments” to turn out low-price goods,” says Nosbusch, 60, who joined the company as an application engineer straight out of college and was promoted to CEO in 2004. (For more on Nosbusch’s history with the company, click here.) “The fact is, often these are high-tech facilities.”
Indeed, Nosbusch observes, smart manufacturing is emerging as the next big competitive advantage — and the U.S. had better start retraining its workforce to catch up. “If we don’t invest in and make constant improvements to our manufacturing sector, America will lose its preeminence in the global economy,” he says.
Today Rockwell Automation is providing the brains that make factories run more efficiently. Its products and services let manufacturers such as Ford Motor Co. (F), Kraft Foods Inc. (KFT) and The Procter & Gamble Co. (PG) control an array of factory-floor functions automatically and simultaneously. Imagine a master control for your house that not only runs the lights, hot water heater, air conditioning and phones but also adjusts them higher, lower, on or off based on how many people are using them and when — and alerts you to any mechanical hiccups — and you’ll have a good idea of what Rockwell does for manufacturers.
MORE ON ROCKWELL’S CONTROL PLATFORMA Logical Solution
Rockwell’s roots go back to 1903, when Stanton Allen and Lynde Bradley launched a business to sell their initial product, a motor controller. The privately held company prospered over the next five decades, particularly when American manufacturing took off after World War II. In 1985, Rockwell International — then a huge conglomerate making parts for rockets, airplanes and cars — bought Allen-Bradley for approximately $1.6 billion. The deal redefined Rockwell’s future: Over the next decade it spun off or sold its aerospace, automotive and other businesses to concentrate on commercial electronics, finally splitting into two companies in 2001, with one named Rockwell Automation.
A New Era
Nosbusch predicts that the way goods are made — be they cars, cookies or detergents — will undergo profound change during the next decade. This transformation toward smart manufacturing is already taking place: CTO Chand says that by using the company’s controllers and software, most of its customers are collecting data from machines on their factory floor and linking them together for greater efficiency. A few customers are in phase two, Chand notes, which he describes as “turning the data into manufacturing intelligence.”