Schneider Electric’s Ramsey: Take advantage of revolutionary solutions
New U.S. Industry VP sees manufacturing addressing critical issues.
As the new senior vice-president of Schneider Electric’s U.S. Industry business, Mary Ramsey is responsible for spearheading the overall sales and growth strategy of the business. She also directs the division in the innovation and development of solutions for machine builders and industrial end users. Ramsey served as the senior vice president of sales of Schneider Electric’s Europe Industry Business. With more than 20 years of experience in industrial automation, Ramsey has held various positions in sales, marketing and business development at UBS Financial Services, Matrikon International, Instrinsyc, Intellution, Inc., GE Fanuc—Industrial Automation Division and Cincinnati Electrosystems, among others.
In an exclusive interview with Plant Engineering, Ramsey looked at the general health of the U.S. manufacturing sector and how more manufacturers need to take advantage of the innovation already in the market:
PE: There has been a lot written about the general health of U.S. manufacturing. What are your customers telling you about their present and future outlook for the sector?
Ramsey: Despite the mainstream train of thought that emerging economies are becoming the new dominators of the world’s manufacturing market, we’ve actually been seeing this trend starting to reverse over the past year, as many of our customers and others throughout the industry are moving their manufacturing back to the U.S.
President Obama recently emphasized this shift in his State of the Union address in January 2012, and we’re seeing it being driven by minimal shipping costs, the U.S.’ larger pool of skilled laborers, and numerous other factors which make it more cost-effective to manufacture right here in the U.S.
Additionally, we’ve seen certain areas of the manufacturing industry grow exponentially. In particular, the mining, metals and minerals industry has been experiencing very strong demand from customers in precious metals and metallurgical coal, and China’s appetite for these raw materials is a huge boost to the U.S. manufacturing industry. We’ve also seen an uptick in the oil and gas sector, as a surge in discoveries of untapped North American resources have encouraged their investment in more upstream production equipment and processes.
And perhaps one of the most encouraging manufacturing trends is within the automotive area, as U.S. companies are anticipating a strong recovery in 2012 due to our population’s pent-up demand. To meet this expected surge, many automobile companies are expanding and upgrading their manufacturing facilities in preparation.
In conjunction with the growth of the aforementioned advantages U.S. manufacturing enjoys, we’re excited to be seeing an increased focus on investment to raise the productivity of existing U.S. manufacturing sites, including a concentration on new technology solutions increasing asset utilization. And because their customers are now using sustainability as an evaluation criterion, we’re seeing manufacturers focus on this element as never before.
PE: Manufacturing data seems to be trending steadily upward (the health of the industry). What can we do to maintain that momentum, and where do you see the challenges?
Ramsey: As we continue to see a repatriation of manufacturing to the U.S. due to economic “leveling” (or equalization) of global labor rates, we’re also seeing a shift across the board in manufacturing strategies. It’s no longer just about moving manufacturing offshore; we now need to consider flexible, modular and transportable manufacturing systems which can be relocated and quickly configured for production. Low cost zones are moving towards being non-fixed locations, and manufacturers need to be prepared with the flexibility this requires. This means not only flexibility within a plant or on a line, but also from location to location. Maintaining this characteristic also enables smoother geographic redeployment to address availability issues of appropriately skilled workers and/or resource capacity.
And as we’ve seen over the past several years, the aging of the manufacturing workforce continues to be a central issue. This means investing in people is more important than ever, and the training of new workers, mentoring by experienced workers, and instituting a detailed plan for the comprehensive training of new hires are all critical. Companies should also ensure they are investing in systems which make it easier to troubleshoot and identify capacity constraints created by retiring workers. And on the other side of the spectrum, manufacturers must design maintenance strategies which leverage the mobile devices, wireless technologies and flexibility craved by younger generations—in turn creating a work environment to which they are attracted and will be retained.
We are also continuing to see manufacturers make the mistake of holding a short-term view when planning their workforces. It is critical that companies begin taking a strategic perspective when mapping this vital, yet often under looked, element of their enterprises by monitoring capacity models and reacting to fluctuations in demand. If businesses do the simple math of looking at the expected retiree attrition over the next five to ten years and begin hiring new workers now to match this rate—as well as ensure strong on-boarding and mentoring programs are ready and in place—the transition through years of heavy employee loss due to retirement will be significantly smoother. Pick a horizon, whether it be five or ten years, and plan now for the composition of your workforce by that deadline.
In addition to creating efficiencies in their processes, manufacturers will also face the challenge of maintaining a focus on efficiencies in their facilities. As a whole, manufacturing will always be concerned with continuous improvement, specifically in enabling productivity throughout a product’s manufacturing lifecycle, and to accommodate changing manufactured products in a given facility. But despite the product or its process, quality, throughput, yield and safety will never go out of style. Focusing on these aspects, as well as approaching the manufacturing environment as if the threat of off-shoring is always present, will position companies for continued and progressive improvement.
A decade or more ago, energy was cheap and data was expensive and often hard to extract from processes. The difficulty today is that the opposite scenario exists—energy is volatile and expensive and data is cheap and readily available. This means businesses need to actively and consciously think about energy cost on a per-unit of product produced basis to dramatically, comprehensively and continuously improve energy consumption.
Innovation in energy data reporting (especially in the context of production information) will be a critical tool in maintaining a cost and quality advantage. Additionally, once companies overcome the obstacle of mastering energy optimization at the per unit produced level, this will progress to the next step: creating and executing a sustainability plan for environmental and economic purposes which simultaneously attracts and retains employees.
While these steps and strategies are widely emerging as obvious and necessary in the minds of manufacturing executives, they continue to remain cautious and are hesitant to invest. This is due to a number of reasons, including pressure to deliver an expected return on investment after conducting plant moves and repatriation, as well as the additional capital investment required to enable the aforementioned system capabilities. This investment should instead be viewed as a part of the entire business case for plant moves. Manufacturers shouldn’t just plan for moving the plant, they should instead think about making the entire operation more efficient and effective for the future. Otherwise, new system functionality will be added via OPEX budgets, when available, and companies risk a patch-worked evolution of required capabilities to address the workforce situation and the need for energy optimization.
When exploring technology upgrades in which they’d like to invest, manufacturers should look for solutions based on open and collaborative architectures (such as Schneider Electric’s EcoStruxure platform) in order to ensure the addition of functionality to systems. Schneider Electric’s approach helps clients plan for full functionality as opposed to adding this later, piece by piece, over time, and ultimately ending up with a montage of non-optimal information and performance.
And finally, although energy use is one of the largest operating expenses on a business’ income statement, many forget that streamlining and integrating the different functions of an organization to slash energy consumption can also provide significant fringe benefits—including increased operational visibility to optimize performance, enhanced management capabilities across domains such as IT and building automation, and improved proactive maintenance to reduce costs and downtime.
Comprehensive energy management solutions help facilitate the collaboration of key stakeholders within manufacturing organizations. To continue success and evolve in a global climate facing an energy crisis and skyrocketing raw materials prices, manufacturers must move towards integrating the different functions of their enterprises such as facilities, IT, and plant/process management together via over-arching management and communicative software platforms, in order to optimize available resources and eliminate excess energy consumption.
PE: Energy is finally being treated as a manageable cost, and Schneider Electric has made energy management a core mission. How can you help manufacturers understand why and how to better manage energy consumption?
Ramsey: Schneider Electric takes our commitment to helping customers understand why and how to manage energy consumption so seriously, that we've invested in a global educational platform for precisely this purpose. It is called Energy University, and can be accessed free of charge at any time through www.MyEnergyUniversity.com. The courses are presented in bite-sized chunks, on-demand, and can help anyone better understand energy management, from general concepts of billing and rate structures to technical details for optimization of specific systems.
Managing energy is no different than managing any other resource within a company. Just as a manager would not let dollars disappear from financial systems with no explanation, manufacturing executives should not let kilowatt hours flow through a facility without tracking where they were invested. Most importantly, they need to be invested where they will give you the most return. Just as crucial as where these dollars are invested is how these dollars are obtained. They must be sourced via the most cost-effective manner possible, specifically through supply contracts, in order to ensure the most reliable sources of supply that enable smooth operations.
It is also critical to look at the full lifecycle of energy management. For customers that do not yet have a strategy, Schneider Electric can help guide them to set up an energy management program, assess opportunities for improvements, and establish an energy action plan. And for customers looking to reduce the costs of their energy, our recent acquisition of Summit Energy allows us to help them work with their suppliers to get the best possible prices for the energy they do use. We can help customers measure and report their energy use through meters and dashboards, and control energy use through technologies from variable speed drives to building management systems. This portfolio of control naturally enables customers to automate many energy management tasks, and Schneider Electric is proud to be able to help customers correlate their energy use to their production output—in turn empowering them to optimize their operations accordingly.
PE: Should we be waiting for a revolutionary solution in the energy management space, or do you see more incremental progress?
Ramsey: Revolutionary solutions are already here—it’s just that too few companies are taking advantage of them. A large number of manufacturers today cannot measure where energy is being used in their processes, even though metering and SCADA systems for this type of measurement have been around for a very long time.
Advanced systems today enable customers to correlate their energy use to their production, allowing them to treat energy as a manageable cost. Customers who are not yet ready for that type of system can start with the basics—energy assessments to identify opportunities, measurement systems to stay on track, and continuous improvement programs to ingrain energy management into the organization. Taking small steps such as these will lay the foundation for more advanced, active and intelligent energy use, and ultimately allow customers to gain full control of their consumption.
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After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.
The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.