Sidney Hill, Jr.: Economic storms slow investment, but not innovation

As I write this, the U.S. Congress is debating something called the Emergency Economic Stabilization Act of 2008. You may know it as the financial services industry bailout. Whatever it's called, the emergence of this legislation offered a rare opportunity to see clearly how what happens in Washington can affect our everyday lives.

10/01/2008


As I write this, the U.S. Congress is debating something called the Emergency Economic Stabilization Act of 2008. You may know it as the financial services industry bailout.

Whatever it's called, the emergence of this legislation offered a rare opportunity to see clearly how what happens in Washington can affect our everyday lives.

The breakdown of the financial services sector—the primary part of the economy that this act aims to stabilize—stems from large numbers of people being unable to make mortgage payments. It appears that many of those mortgages should not have been issued in the first place. What also has become obvious is that this situation is making it difficult—if not impossible—for both individuals and businesses to get new loans.

This fact resonated with me as I began reviewing pages for this issue of MBT, which focuses on emerging software vendors and technologies. The vendors highlighted in this issue are, for the most part, smaller companies that have unique products to offer—but lack the large customer bases of the huge enterprise software suppliers.

In the tech sector, companies typically rely on venture capitalists or other private sources of funding, rather than commercial banks. Still, when a credit crunch hits, it injures businesses of all sizes—and the smaller ones are hurt the most.

For the companies in our emerging vendors list, the blow can be twofold: These companies may have trouble getting the funds they need to continue developing their products, and they are likely to find many of their customers—which also are small and medium-size businesses—feeling the need to delay new software purchases.

There is a potential silver lining in this cloud for a number of our emerging vendors—those that offer their products in the Software-as-a-Service (SaaS) model, which greatly reduces the cost of both the initial system deployment and ongoing maintenance.

While it's not likely that the SaaS model alone will be enough to persuade large numbers of companies to adopt new software in the current economic climate, it is likely that the memories of this period will cause a lot of companies to look much closer at this model when the economy recovers and people are ready to resume software purchases.

This will indeed be good for a number of the companies on our emerging vendors list—companies like Plexus Systems, which offers a SaaS-based ERP suite; and New Momentum, with a SaaS-based product that helps manufacturers reduce myriad supply chain risk factors.

If you read our emerging vendors coverage, you will notice that the SaaS model is not the only innovation in the manufacturing software space. You'll learn about companies like River Logic, a newer vendor offering a solution with a new twist on supply chain optimization; and Zontec, an established vendor of statistical process control (SPC) software that now makes SPC results available through mobile devices like the iPhone.

This issue proves that innovation continues in all economic climates. Let's just hope that the Emergency Economic Stabilization Act of 2008 clears this current storm sooner rather than later.





No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Leaders Under 40 program features outstanding young people who are making a difference in manufacturing. View the 2013 Leaders here.
The new control room: It's got all the bells and whistles - and alarms, too; Remote maintenance; Specifying VFDs
2014 forecast issue: To serve and to manufacture - Veterans will bring skill and discipline to the plant floor if we can find a way to get them there.
2013 Top Plant: Lincoln Electric Company, Cleveland, Ohio
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Bring focus to PLC programming: 5 things to avoid in putting your system together; Managing the DCS upgrade; PLM upgrade: a step-by-step approach
Balancing the bagging triangle; PID tuning improves process efficiency; Standardizing control room HMIs
Commissioning electrical systems in mission critical facilities; Anticipating the Smart Grid; Mitigating arc flash hazards in medium-voltage switchgear; Comparing generator sizing software

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.