This morning started with the traditional report from Maurice Wilkins, Chairman of WBF…I can’t get used to it not being World Batch Forum, but I will, because they are right…it is about more than batch. The new tagline is “The Forum for Automation and Manufacturing Professionals,” which, considering the contents of the meeting agenda, is much more accurate than “world batch forum” would be.
Asish Ghosh, from ARC, who chairs the WBF Nominating Committee, presented the WBF’s own awards this morning. The Tom Fisher Award (Tom was a very close friend of mine, as well) was presented to Lynn Craig, Tom’s successor as chair of SP88, the batch standard committee, and nobody deserved that recognition more than Lynn. The Guido Carla Stella Award, given to a person who has demonstrated technical excellence or who have mentored others in batch automation, was given to Dr. John McGregor, the Dofasco Professor of Process Automation at McMaster University in Toronto., who developed the basic methodology for multivariable statistical process control.
Then Dave Beckman, retired Senior Vice President for Marketing at Emerson Process Management (and a full time Presbyterian minister) spoke widely and well. Beckman’s talk was about leadership, but what he really was talking about was the future of manufacturing, and the role of process automation professionals in that future.
“The worm has turned,” Beckman said. “For years, the trend was that increasingly, the profits we generate go to financial analysts on Wall Street. Profits have evaporated from the people who do the work.”
This, he submits, is about to change. He pointed out that this change, which began in about 2000, according to a graphic from Barron’s that he showed, is not a bubble, but a trend.
The drug industry has had a meteoric rise, with a small hiccup lately over Beckstra and Vioxx, but demographics are in favor of pharma: as the population ages, the use of drugs increases.
Even commodities, he showed, have returned. Pulp and Paper seems to be rebounding, for the first time since the mid-90s. The oil picture appears that we are in for a long period of increasing oil prices, as cheap, sweet crude progressively disappears, and the reserves are falling, and new sources of oil and gas are more expensive to develop (like tar sands in Canada).
Every one of these growth sectors is going to require more, not less, engineering. As the first world, and increasingly the third world tightens environmental regulation, this will require even MORE engineering.
But even the EPCs like Fluor, Bechtel, Jacobs, and Foster-Wheeler don’t have the expertise to do the projects that are currently on the drawing boards. We tried to save our way to success by cutting staff and reducing training. What is clear is that this is no longer working. Beckman showed a slide of a “new operator” with spiked hair and a tongue pierce, and asked, “What is the potential that _they_ will be able to take over from _us_?”
Engineering graduate demographics in North America and Europe are dropping dramatically. Bill Gates says that there has been a 60% drop in Computer Science graduates since 2000, and a 70% drop since the early 1980s. “When was the last time you saw a tv show that featured the ‘engineer guy’ as the hero?” Beckman asks.
Beckman pointed out that process manufacturing companies spend an average of 1.7% of payroll on training. Benchmarks by ASTD say that highly successful organization spend an average of 3%…almost double what we are currently spending. And, Beckman noted, there are very few universities in the world where there are adequate curricula in control theory today. He quotes Dr. Ken Cooper, adjunct professor at the University of Pittsburgh, who studied a recent graduating class of engineers at UP, and discovered that none of them could successfully define PID. Almost all of them knew that the “P” was for proportional, less than half knew that the “I” stood for integral, and NONE of them knew that the “D” was for derivative.
“Industry has to take a strong hand in convincing acaemia that there is a crying need for control specialists,” Beckman admonished. This is an almost eerie dovetail with my current editorial (“C’mon Vendors, Let’s Step Up!” May 2005). If end user companies and vendors aren’t careful, there won’t be enough engineers to make stuff work.
Beckman refers to one of my two favorite gurus, Peter Drucker (the other, as anybody who has followed this for a while knows is Eli Goldratt), who sees the birth of the “knowledge worker.” Beckman says this foreshadows a paradigmatic shift, in the real sense of the word, (and I can still get away with using it because I was a student of Thomas Kuhn and Steven Toulmin, who invented it).
In the old paradigm, the corporation is the master, we are the slaves. In the new paradigm, the means of production is _knowledge_ which is owned by the knowledge workers and is highly portable.
In the new paradigm, a large number of employees will become knowledge workers, working under contract as professionals. “Job security,” Beckman opined, “is in what you know, not who you work for.”
In the new paradigm, marketing becomes more personal, based on trust, rather than advertising.
“I can’t tell you all of what the new paradigm will look like,” Beckman said, “but I can sure tell you what it will not be.”
He gave an object lesson drawn from the Book of Enron (preachers do that). He pointed out that Skilling and Ken Lay, and Cliff Baxter failed and are now reviled because they didn’t treat people the way they must be treated in a sustainable and growing healthy enterprise.
He quotes Jeffrey Pfeffer, Professor of Org Dev at Stanford, who says that the best managed companies have a turnover of around 3% (compare that to where YOU work, eh!) According to Pfeffer, companies who have focused on people as assets have improved margins of 5% or better, and that’s profit that falls straight to the bottom line.
Beckman believes that the time of analyst-run companies is past, and the time has come for the engineer leader to reassert primacy. “Practical people know how to get what they want,” Beckman says. “Philosophers know what they ought to want. But LEADERS know hot to get what they ought to want.”
People follow character. When a leader is at his very best, he is demonstrating trustworthiness and the ability to remain cool under pressure. A leader is fairminded, compassionate; demonstrates a servant nature, sticks to his convictions, and has the faith to take appropriate risks.
Beckman says that integrity is essential for longterm success. He notes that the first hundred years after the construction of the Great Wall in China saw three successful barbarian invasions. The barbarians simply bribed the gatekeepers, and marched through the wall. Integrity will win over artificially low wages every time.
Beckman closed by talking about how to build a “dream team” and how to turn your vision into reality.
He used Steve Elwert, of Ergon Refining, a boutique refining company in the South. Steve has a brainstorming day every month for his team, which he calls flying pig day. “Any idea better than a flying pig goes up on the whiteboard,” Elwert says. And now he has introduced “what would you like on your tombstone day.”
Beckman is right on. This is critical to the future of manufacturing, wheher here or overseas.