Can automation manufacturers and system integrators be true partners?


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Control system integrators and automation manufacturers function in a co-dependent relationship that, at times, can be strained and fraught with potential pitfalls. But they can also be successful and profitable. These questions often rise: Who owns the end user customer? Who drives the solution? Can we really trust one another? This presentation highlights a few best practices on how to build an effective strategy for a successful and profitable relationship between automation manufacturers and system integrators.

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Can automation manufacturers and system integrators be true partners?

  1. 1. Can System Integrators and Automation Manufacturers be True Partners?Greg BodenhamerApril 27, 2012CSIA Executive ForumScottsdale, AZ
  2. 2. More than 175 years of history Energy 2010 Acquisition of Areva’s distribution 1999 Management activity (in process) Power & Groupe Schneider becomes 2008 Schneider Electric, Control focused on Power & Control Acquisition of Xantrex 1996 2007 Acquisition of Modicon, historic leader in APC corp. and Pelco Automation, becomes a Schneider brand 2005 Acquisition of 1991 Power Measurement Inc.Steel Square D joins Groupe Schneider 2003-2008 Targeted acquisitions in wiring devicesIndustry 1988 and home automation (Lexel, Clipsal, Merten, Ova, GET, etc.) Telemecanique joins 2003 Groupe Schneider Acquisition of1836 T.A.C 1975Creation of Schneider 2000 Merlin Gerin joinsat Le Creusot, France Acquisition of Groupe Schneider MGE UPS Systems 19th century 20th century 21st century 2
  3. 3. Schneider Electric – the global specialistin energy management Balanced geographies – FY 2011salesbillion $ sales Western North Europe America 32% 23% Asia Pacific Rest of 27%of sales in new economies World 18% Diversified end markets – FY 2011 salespeople in 100+ countries Utilities & Infrastructure 24% Industrial & machines 22% Data centres 16% Non-residential buildings 29% Residential 9%of sales devoted to R&D 3
  4. 4. How Big is the Solutions Market? US Automation Services Sales in billions of US dollars System Integrator $4.2 Provided Automation $8.2 Supplier Provided Services Growth rate project at 7.6% CAGR Plenty of room at the table for us all!!Schneider Electric -- January 2012 Source: ARC Supplier Provided Services Outliook 5
  5. 5. Country deployment Global Footprint of System Integrator Partners status in Sept 9th 2011 Alliance PartnersRegistered 800# of Countries 37 PlantStruxure Certified Alliance Partners 21 # of Countries (*) 6 Engineers 130 Schneider Electric - Industry Business – Plant Solutions – Global SI team – Georges Ailloud 6
  6. 6. How can the System Integratorand the Automation Vendorbe partners?? 7
  7. 7. Answer:Unite in our approach to put thecustomer first!! 8
  8. 8. Solution Approach Typical Customer Questions ● Customers want solutions How can I increase my ● To their business problems return on investment? ● From reliable suppliers who bring real value How can I reduce my ● Supported over the complete scope and lifetime Time to of their projects Market? How can I apply my standards consistently? 9
  9. 9. Customer Service Triangle Offers End User Logistics Integration and Support 10
  10. 10. Customer Service Triangle Offers● Market expectations ● Build a quality product that works and is available when needed ● Support for the product, solution, and the implementing partner ● Innovative and accepted offers and solutions ● Scale, financial viability, and geographic reach when customers demand 11
  11. 11. Customer Service TriangleLogistics and Support● Market expectations ● Material availability – innovative approaches to supply chain challenges ● Front line technical product support ● Intimate relationships with key End Users ● Help drive market acceptance of manufacturer solutions ● Financial buffering 12
  12. 12. Customer Service Triangle Integration● Market expectations ● Customer process (business) knowledge ● Localized, daily customer engagement ● Rapid deployment for emergency service or quick turn engineering needs ● Quality solutions with measurable benefits ● Continuous process improvement and ongoing support 13
  13. 13. The Partnership Works Manufacturer End User System Distributor Integrator● We all need each other! ● SI needs an innovative, market accepted, and readily available solution to implement and solve his customer’s needs ● Manufacturer needs an experienced and qualified execution partner and market access to that partner and the End User ● Distributor needs to represent a high quality product that is widely accepted and has a network of solutions providers that will work with them to nurture the customer. 14
  14. 14. The Partnership Works Manufacturer ● Targeting and Cooperation ● Three strategies to tackle the market End User System 1. Geographic Distributor Integrator 2. Vertical market 3. Named account● How do we make it work? ● Openness ● Transparency ● Trust ● Respect ● Communication ●Integrity!! 15
  15. 15. The Partnership Works Manufacturer End User System Distributor Integrator● The expectations must be….. ● Simple ● Self policing ● Customer focusedGood fences make good neighbors! 16
  16. 16. The Partnership Works When the partnership works it can be worth its weight in GOLD!!! Example: Geographic & Vertical Market 17
  17. 17. PLC System UpgradeA collaboration with Schneider Electric and George T. Hall Co., Inc Vertical Expertise Example. Gold Mine Hot Standby Controller & I/O Upgrade
  18. 18. Who is George T. Hall Co.• Founded in 1932, Headquartered in Anaheim, CA.• Acquisition of Applied Industrial Controls (Nevada based System Integrator) in 2006.• Employs 60 people.• Offices in Nevada and Southern California.• Core competencies include: o Schneider Electric Automation Solutions o Mining - Water / Wastewater o Combustion Control Solutions 19
  19. 19. Gold Mine Hot Standby Controller & I/O UpgradeGold Mine Founded in 1920s. Leading gold producer in the world (5.2 million oz in 2008). Equates to $6.2 billion in revenue, 2008. Employs over 30,000 worldwide. Operates some of the largest Open Pits in the US 20
  20. 20. Gold Mine Hot Standby Controller & I/O UpgradeSynopsis of existing Processor Equipment• 12 ea. Modicon 984-785E Hot Standby system on D908 communication network controlled Mill 6 processing plant. Managed all critical interlocks for the facility.• Back in the 80’s, Mill 6 was one of the largest hot standby system in the US.Major concerns with Hot Standby controller upgrade• Unplanned downtime – Gold at the time was quickly rising in value, now it’s at $1,600+ per oz. Any unplanned down time would be very visible and directly related to the conversion.• The conversion required a switch in technology from D908 to Ethernet based hot standby. 21
  21. 21. Gold Mine Hot Standby Controller & I/O Upgrade Synopsis of existing I/O equipment • 20 racks of 800 series I/O • 100 + I/O modules. • 1200 I/O points • 4 days allotted for conversion to quantum hardware 22
  22. 22. Gold Mine Hot Standby Controller & I/O Upgrade ResponsibilitiesSchneider Electric Scope – Hot Standby and CPUupgrade • Develop Bill of Materials and scope of work for hot standby PLC upgrade • Develop Factory Acceptance test for customer review at Schneider Electric facility • Perform complete testing for customer approvalGeorge T. Hall Scope – I/O upgrade • Site evaluation to determine field demo and installation requirements • Develop final BOM for quantum I/O adapter cables and rack conversion device • Develop Factory Acceptance test for customer review at GTH facility 23
  23. 23. Gold Mine Hot Standby Controller & I/O Upgrade So What Happened? • Sucessful commissioning of all 12 Modicon Quantum Hot Standby nodes in two weeks. • All 12 nodes executed with no issues. • All I/O installed and operational in 4 days • Completed startup successfully in alotted time.Schneider Electric - Industry Business – Plant Solutions – Global SI team – Georges Ailloud 24
  24. 24. System Integrator / Vendor TeamingReally – the results of the upgrade were amazing. Here you will see the before and afterpictures. Advantage Success: Customer required Application Knowledge Schneider Electric Local Presence George T Hall Logistics Support George T Hall and Wedco Financial Scale Schneider Electric Before AfterSchneider Electric - Division - Name – Date 25
  25. 25. a winning combinationYour process know-how Schneider Electric Alliance that gives you a competitive advantage. Schneider Electric - EU automation – Global SI team – David Orgaz 26