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You Don’t Want To See How It’s Made, by Gary Mintchell
If you’ve read this column for a while, you have probably noticed that I’m a proponent of standards.
This is an attitude that I probably picked up during my career working on standards development committees. Some standards are designed for safety, some for efficiency and some for interoperability—that is, the benefit to the user of the products and technologies is to be able to use and integrate these products and technologies from a variety of suppliers with a minimum of pain.
There exist a plethora of kinds of standards. Some have a rigorous development process resulting in the blessing of or adoption by government or trans-government agencies. On the other hand, some standards are simply practices or technologies—some of which may even be proprietary to the developer—that everyone just picks up and uses. These are de facto standards. In another context, an industry chief executive once told me, “The best standards are de facto standards.” I took him to mean that these are standards that people actually use without waiting for official blessing.
To paraphrase singer Arlo Guthrie in “Alice’s Restaurant,” what I really came here to talk about is wireless. This is a technology that drew more ink in automation than anything since the days of “PC-based control.” There exist, of course, many types of wireless technologies already in automation. Human communication across large facilities—from refineries to automobile factories—was facilitated by such devices as “walkie-talkie” radios, pagers and then mobile phones. The industry battle lines first became drawn over the area of wireless sensor networks, and then expanded to include control of process loops and perhaps other input/output devices over the wireless networks.
Perhaps the greatest value to industry of the International Society of Automation (ISA) is its standards-setting activity. Its procedures are so rigorous that its standards are recognized by governmental agencies such as the American National Standards Institute (ANSI)—which is why you see the nomenclature “ANSI/ISA standard XXX.” So, ISA authorized the development of a committee to develop standards governing these wireless technologies for the process industries. Unfortunately, as sometimes (usually?) happens in standards committees, competing technologies championed by different industry-leading suppliers were proposed and battle lines were drawn.
A second standard
In the meantime, another group—the Hart Communication Foundation, owner of the ubiquitous Hart protocol used to transmit digital information of process instruments that also still use analog signals—went to work on a wireless standard. HCF also has a rigorous process that can result in recognition of its standards by the International Electrotechnical Commission (IEC)...
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» PINTO’S PROSE: The Demise of Size, by Jim Pinto
Big companies have long been considered successful.
The prevailing logic is that unless you are big enough to dominate your market, large enough to squeeze suppliers and global enough to operate in every corner of the world, then you do not have the resources necessary to stay in the game and win.
But that logic is flawed. Getting bigger has not helped most big companies. Indeed, size inhibits growth. In the new economy, some of the biggest companies are ailing and failing.
Sure, size counts, especially in addressing complex problems that span geographies and need lots of financing to function. But bigger doesn’t make a company better at serving customers. Bigger isn’t more rewarding to work for. Bigger doesn’t attract investment.
There are much higher correlations between scale and good performance when companies have also developed distinctive, difficult-to-replicate capabilities. Classic examples include Toyota, with its production system, and Wal-Mart, with its distribution systems. In these cases, scale may result from the capabilities, but it is not the cause of their growth.
General Electric was for many years the paragon of a size-driven business. Its ruthless insistence on a number-one or number-two market-share position in every business in which it participated is cited as the driver of its extraordinary revenue, profit and stock-price growth. However, GE’s real accomplishment was building organizational attributes that enabled it to tackle changes more effectively than any other company. Under its current Chief Executive Officer Jeffrey Immelt, emphasis has changed to innovation and organic growth.
In the past, an axiom of growth was that all industries consolidate as they mature, and those companies that scaled up and survived the shakeout inevitably won big. By extension, in an era of global markets, global consolidations are presumed to win very big. In fact, during the past two decades, industrial automation has moved through consolidation by acquisition and all of the automation majors have explicitly been built on the strategy of dominant size in global markets...
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