- Problem 1 : There are “n” manufacturing equipments in series, how do you ensure that each machine “talks” to the other one to ensure smooth outputs and zero traffic jams?
- Problem 2 : How do you capture the data generated in massive chemical processing plants and parse it to reveal insights to improve efficiencies?
- Problem 3 : How do you automate jobs on a shop floor that are dangerous and ergonomically challenging?
- Problem 4 : How do you make your factory, more customer facing and flexible?
Such problems are rapidly becoming ancient history with the application of sophisticated automation technologies on the shop floor. One of the most successful corporations to recognize and capitalize on this trends is Rockwell Automation, Inc. (NYSE: ROK). It is an American provider of industrial automation and information solutions.
Its brands include Allen-Bradley and Rockwell Software. Rockwell is headquartered in Milwaukee, Wisconsin, & it employs over 22,000 people, serving customers in more than 80 countries worldwide. The Fortune 500 company reported $6.35 billion in sales during fiscal 2013.
Today, Rockwell is to industry what Microsoft is to desktop computing. Rockwell followed the strategy book of Microsoft to dominate the marketplace of industrial automation. It designed simple, easy to program industrial controllers that could be used for any number of applications. Rockwell has actively promoted & benefitted from strong indirect network effects. Like Microsoft, it has become a ubiquitous platform on which any application which is suited to any industrial challenge.
Rockwell has remained attuned to the trends in the marketplace and has developed technologies and made acquisitions which have made it even more valuable and critical to factory operations. An example is developing technologies that help manufacturing equipments to interface with ERP solutions.
Example : You own a diesel power generator, and you want that an order is automatically placed to the diesel supplier when stocks are low. The problem seems low tech but it would require multiple technologies : a sensor, to sense the level of diesel in storage tank, an intelligent controller which makes the decision of when to order and how much to order, communication of the purchase decision to the order processing software, which then places the order. This simple problem is effectively solved using technologies supplied by Rockwell automation.
Going forward the biggest threat to companies like Rockwell is the emergence of low cost controllers like Arduino. They have the potential to disrupt the market and challenge the dominance of Rockwell.