Rockwell's leader sees rebound, with software key to growth
By Staff -- Manufacturing Business Technology, 1/1/2004 12:00:00 AM
Rockwell Automation celebrated its 100th year at its Automation Fair in Milwaukee in late November, but it also had another reason to celebrate: an upturn in the global manufacturing economy. Speaking at the event's media summit, Donald H. Davis, CEO of the plant automation hardware and software giant, said recent positive economic news coincides with improvement in Rockwell's demand picture.
"We're seeing that customer demand has strengthened since early September, and we've begun to see broad improvement across our markets," said Davis. "We're confident that these early warning signs are indicative of an emerging upward trend."
The economic news Davis cited came from the Institute for Supply Management (ISM) index on manufacturing, as well as federal government data on manufacturing orders. So far, Davis's optimism has been on the mark, with ISM's index for last November, released Dec. 1, 2003, showing a fifth consecutive month of growth.
Rockwell's anniversary reaches back to the beginnings of Allen-Bradley, now a brand with Rockwell's $3.3-billion control systems group. Davis called Logix, the company's control platform, the foundation for strong performance during the recent economic downturn. Davis sees this foundation, along with offerings in four "growth" areas—safety systems, process and hybrid industry solutions, asset management, and plant information management software—as key to the future.
Until recently, said Davis, Rockwell had to contend with an industrial slump so severe "that it was like someone turned the lights off." Even so, for its last full fiscal year, Rockwell's sales were up about 5 percent over the previous year, he said. Growth areas enjoyed sharper rises. Rockwell's software—which includes manufacturing execution, plant intelligence, and supervisory control applications—grew at a 25-percent clip from 2001 to 2003, for about $75 million in sales in fiscal 2003.
A "mega trend" behind much of the growth, says Davis, "is the need for business systems to connect horizontally with suppliers, and vertically with the factory floor." Customers, meanwhile, are demanding nimbler response.
"The mega trends of supply chain integration and flexible manufacturing are driving manufacturers toward the rapid integration of control and information systems," said Davis. "The factory floor serves as the catalyst to drive these changes."
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