At the 2007 North America Foxboro User Group Meeting, July 15-18 in Boston, keynote speaker Peter G. Martin painted a picture of a new world, one that is simultaneously chilling and inspirational.
The chill is defined by Martin as a confluence of trends. These include short executive tenures (the average chief executive officer now lasts less than three years), even shorter executive probation periods (less than a year), and a new threat suggested by the convergence of information technology (IT) and manufacturing—the specter of downsizing. “IT is downsized the most,” he said, “followed by engineering.”
“Yet,” he said, “engineering is the most valuable activity in the enterprise. You have a choice: be part of continued downsizing, or convert your function into that of a value-added business organization.”
Martin, a Ph.D. in industrial engineering, is vice president and manager of Performance Management, at Invensys Process Systems, but his primary role is as a catalyst in manufacturing. He is one of the Instrumention, Systems and Automation Society’s (ISA’s) 50 most influential innovators in manufacturing, and one of Fortune magazine’s Heroes of U.S. Manufacturing.
Drive the business
Later in a private interview with Automation World, Martin emphasized his point: “Nobody is going to save you but you. If you reduce engineering to its basic role, it is to maximize work, and you have to always ask, what is the work that drives your business?”
“Chief executive officers (CEOs) and chief financial officers (CFOs) don’t know your value because the accounting snapshots fail to look at the right things,” he told the group. “Unfortunately, every financial measure on the factory floor is a negative one.”
Return on investment, the most common measure, focuses on the initial cost of a manufacturing innovation or change, then stops measuring when break-even occurs. Further, a cash-flow view of manufacturing highlights only outflow—there is no way to account for inflows that might accrue to increased profits. “Yet, there can be huge returns from innovation, for years after the initial investment is recouped. And there can be highly-leveraged cash flows from effective automation projects—hugely leveraged,” Martin pointed out. “Executives don’t see these because the business indicators are not measured, and the execs don’t have a clue about what you really do.”
Engineers can change this picture, but to they need to learn the language spoken in the C-level suites. “Engineers are comfortable talking about actions, numbers and formulas,” Martin later explained. “If a CEO asks average engineers what they did to cut manufacturing costs, they are likely to say, ‘We upgraded the DIN rail cabinets by swapping the RS-232 controllers out to multipoint ZDV-2750s.’ It would be better to express the result of that swap—‘We gained 3 percent faster production, at exactly the same quality, with a 5 percent reduction in materials waste.’ If you go to Paris, you learn French. If you get into the executive suite, learn the vocabulary.”
But how does engineering break into the executive suite? “Get an MBA,” Martin said during the interview. “Not to learn finance, not to learn accounting, but to learn what business is really about. Left to themselves, engineers love to make processes more elegant and efficient, but you really need elegance and efficiency only on the processes that count. What are the ones that count? The ones that drive the business.”
Teaming to win
In his presentation, Martin drew a parallel to auto racing. Left to themselves, drivers will always want to be on the course, driving as fast as possible. Left to themselves, pit crews will call the driver in on every lap to tweak and tune the car. “In our analogy, drivers are the engineers, pit crew is maintenance,” he said. “When they work as a team, they can concentrate on the right goal: going fast enough in a car good enough, long enough to win. That’s different from driving as fast as possible and breaking something, and it’s different from having the best-prepared, but least-available car in the race.”
Can the executive suite help do anything top-down to develop a business-aware engineering group? “Absolutely,” Martin told us. “Top execs can form relationships with the universities that supply your best engineers, and ensure that business training is integral to their curriculums. Your new hires will know their worth, and you will know their worth—and you and your new hires will be able to talk with each other productively from the start.”
In his wrap, Martin said, “When IT and manufacturing converge, you have the ability to combine expertise in financials and expertise in engineering to drive business needs. Think beyond the tools, the instruments and the computers—then use them to deliver the business message to your company. That way, you can take the leadership position you’ve earned.”
Invensys Process Systems