Got the blues about the decline of U.S. manufacturing in the face of low-cost global competition?
Well then, Mike Bradley Sr. may have some words to cheer you up. According to Bradley, president of Wonderware, the Lake Forest, Calif.-based manufacturing software supplier, there are multiple trends at work that are changing the game. “Relative manufacturing value-adds vs. costs as we know them today for the United States, India and China will profoundly change,” Bradley predicted during a presentation at WonderWorld 2007 North America, a conference held Oct. 23-24 in Las Vegas for customers of Wonderware, a business unit of Invensys plc.
(Editors note: Sudipta Bhattacharya was named on Nov. 5 to replace Bradley as Wonderware president. For more, click here.)
Closing the gap
Among the drivers, Bradley cited U.S. trade and budget deficits, which will impact available capital, as well as inflation and growing salaries in India and China, which will lead to increased costs in these countries. China has already seen more than 100 percent inflation for managers’ salaries in some areas, he said.
Bradley also foresees possible relief for U.S. companies burdened by high healthcare costs today. Other drivers will include continuing oil price increases, which will raise the cost of transportation, influencing where goods will be produced, he added. And increases in manufacturing automation going forward will reduce the impact of lower labor costs and increase the importance of highly skilled technical resources, said Bradley.
“All of this could eventually close the current large gap in manufacturing costs across global regions,” Bradley told the audience at the closing session of the WonderWorld event, which attracted about 540 Wonderware customers.
Not surprisingly, the two-day affair featured multiple conference sessions detailing the uses, capabilities and benefits of Wonderware’s new InTouch 10.0 human-machine interface (HMI) and System Platform 3.0 software. Introduced with much fanfare on Sept. 4, these products—while offering backward compatibility—feature notable advances over previous generations of Wonderware products. These include advanced graphics capabilities for InTouch 10.0 that are drawn from the Invensys ArchestrA plant automation and information architecture. And System 3.0 delivers major runtime performance updates to the Wonderware Application Server. When used together, Wonderware executives said, InTouch 10.0 and System Platform 3.0 can help customers in “Breaking Down Barriers to Operational Excellence,” the WonderWorld conference theme.
Product-oriented sessions at WonderWorld focused on agility, cost reduction, standardization and collaboration as four key elements to achieving manufacturing enterprise operational excellence. And the conference—which celebrated Wonderware’s 20th anniversary—also featured presentations by customers on their use of Wonderware products that exemplified those four elements.
John Kuley, a section head at Cincinnati-based Procter & Gamble Co.’s Household Care Business Unit, for instance, described how P&G has improved its agility through standardization on a small footprint controls system that it is using for expansion of its liquids business into developing regions beyond its U.S. and Western European strongholds.
The approach is based on an Allen-Bradley CompactLogix programmable logic controller (PLC) that communicates over Ethernet to a personal computer (PC) running Wonderware’s InTouch. The system, which also integrates a SQL server in a single Windows XP PC, is easily supported by P&G’s regional systems integrators, said Kuley. “We’ve set new benchmarks in our ability to deliver sophisticated batch systems all in one small box,” he noted. The system has been used in locations including China, Malaysia, Argentina, Venezuela, Russia and Egypt.
Other customer presentations came from coffee kingpin Starbucks, chewing gum maker Wrigley and Aera Energy, a California oil and gas producer owned jointly by Shell and ExxonMobil.
Wonderware’s Bradley, in his closing remarks, also spoke of global opportunities for the company’s manufacturing customers, both in the near term and further out. “We all recognize that India and China are huge market influencers and opportunities, but with the acceleration of change, the next wave is already forming on the African continent,” Bradley declared.
Quoting U.K. futurist Patrick Dixon, Bradley said that 1 billion consumers will come of age in Africa during the next 15 years. The impact of the $100 One-Laptop-Per-Child initiative in Africa, and the resulting Internet access, is immeasurable, Bradley noted. So-called “bottom-of-the-pyramid” marketing—already successful in India—will have a huge impact in Africa, he predicted. He said that 4 million low-income women in India, who live on less than $3 per day, purchase health and beauty products in six milliliter sizes or smaller. This represents 53 percent of the shampoo sold by one market leading company, and it is sold at higher margins than larger sizes sold to the wealthy at the middle and the top of the pyramid, Bradley observed.
“A real economic miracle is happening in Asia—a middle class that has middle class aspirations in education, health care, purchasing power, transportation and utilities infrastructure,” Bradley said. “Imagine if that also happens in Africa. Think of what this is going to do to the global economy. How will your company respond to these issues and opportunities?” he asked the crowd.
Wonderware customers are already making dramatic breakthroughs in how their operations, information technology and engineering departments are working together to be more competitive and better serve their customers and constituencies, Bradley said. And he pledged that Wonderware will be there in the future with the products these customers need for continued manufacturing success.