Nix on clicks, bet on chips Essay

Nix on clicks, bet on chips

Allen Bradley has been known for years as the people who make
quality relays and controls–things that go clap-clap when you push a
button to make something happen. Now they want to change that image to
a more glamorous one of leading-edge electronics–from noisy, clattering switching boxes to silent superefficient solid-state controls linked by
elaborately intelligent communication networks.

From relays to CIM in one giant leap! Wow! That kind of an image
change-over is so profound, they are even considering national
television to help us all get the message. And that message is simply
that their typical buyer has changed from a designer picking out limit
switches to an executive choosing among a wide variety of complex
plant-automation/ information systems.

The key man behind this change is Allen-Bradley’s new
president, Tracy O’Rourke. He joined A-B in 1978 as vice president
of corporate development when the company was drawing up their
blueprints for the 80s. They had traditionally grown their own leaders,
but they knew for this big makeover, they needed an outsider with some
really fresh ideas. “The single set of experiences that helped
qualify me for the job,’ he explains, “is the ten-year span I
spent as an entrepreneur, having to live out of our checkbook and make
things succeed or fail. We had to learn how to be successful in
essentially all the business disciplines or we didn’t eat.’

Some of the key ingredients in the A-B plan were:

A faster pace of product change. They needed more emphasis on
computer-on-a-chip electronics to maintain their leadership in factory
automation, and instead of building “Cadillacs’ with
top-dollar price tags, they had to offer a broader price mix because
their customers were now much more price conscious.

A system emphasis. “Increasingly, our sales force has had
to quit trying to sell individual pieces of hardward and start selling
concepts of factory automation,’ explains O’Rourke.

New attitudes. Employee attitudes from the factory floor to the
executive suite have had to change. People who for years lived with the
comfortable knowledge that the Allen-Bradley name guaranteed acceptance
in the market-place have had to “adopt a new sense of

An example of that new thinking was their Industrial Controls Div
in Milwaukee. The electromechanical mainstay of the company, they had
come to feel like a neglected cash cow. To disabuse them of that
notion, relates O’Rourke, “I finally sat down with some of the
people there and said, “I don’t understand you people. You
aren’t doing anything to keep yourselves alive. Sustaining your
technological lifeblood is your responsibility and I think you can do
it.’ Their first reaction was fear, then excitement. I think they
have responded very aggressively in the last several years.’

The sales force was the toughest re-education task. “Getting
them to change in the face of success is much harder,’
O’Rourke admits. To help them make the transition from selling
pieces of hardware to selling “concepts’ took many meetings
and presentations. “Many of the ideas involved were fairly
esoteric, requiring a much higher level of conceptualization than
before. But there was no way they could be expected to sell customers
on the idea of using Allen-Bradley products to automate their operations
if they themselves did not understand how the products fit into an
overall automation scheme.

“We started softly, and as we fleshed out our product line, we
escalated our demands on our sales people that they buy our
approach.’ A strong company-wide adult-education program helped
all employees better understand advances in computer technology and
their implications for the company.

“All of our people have to be in the computer world,’
says O’Rourke. “They can’t be intellectually ignorant of
current technology.’ Of 40 or 50 district sales managers, he
feels, only four or five have been unable to make that adjustment.
“They’ve adapted well. When you talk to them now, they use
the new words and feel comfortable with these concepts.’

O’Rourke is quite a personable, down-to-earth guy, the kind of
leader it’s easy to rally behind. In a briefing for the trade
press, he let us in on some of his thoughts about the competitive
challenge A-B faces today. “We have to examine our past; to look
at why Allen-Bradley has been a very successful company. It boils down
to three key things: A quality product (a point acknowledged by even our
competitors in some surveys we’ve taken), good service, and good
people. Unlike others, we do not put the cost of service into the cost
of the product. If your application requires special service, you pay
for it and you get what you pay for.’

A major move is the globalization of A-B–the challenging of
foreign competitors on their own turf–which O’Rourke freely admits
was as much a defensive as an offensive move. They are presently doing
well even in Japan, despite some initial trepidation on the part of some
on the board of directors. “Less than 10 percent of US industry is
moving into DNC today, yet we must have much more than that to survive.
The key is eliminating direct labor. None of the advanced countries,
Japan included, can compete with countries that have 30-cents-an-hour
labor rates!’

He feels that the Japanese are definitely ahead of us in FMS and
robotics, but not in CIM. “The problem for the Japanese with CIM
is that they have too many people and they move too slowly. Our lead in
systems technology is something we must work hard to exploit.’

The kanban ideas of the Japanese are not transferable here, he
feels. “Kanban cards won’t work here, and those who are
trying to make them work are wasting their time. They would be better
off either trashing them or using them to light cigars.’

But he has the utmost respect for the stimulating effect created by
his Japanese competitors. “If the Japanese hadn’t occurred
naturally, we would have invented them. We need them just as they need

He sees great opportunities in controls today. “Fifteen years
ago, DNC was not cost effective. Today, it’s not just cost
effective, it’s cost beneficial and we are all compelled to apply
it as rapidly as we can. We’re certainly doing it in our
plants.’ He sees adaptive control as the next big area of
application, despite its meager use thus far.

To close the automation loop, he feels sensor technology is the
area that needs the most work, and they are devoting a lot of their
R&D money to overcome this barrier. Yet, he personally likes to
still see handles on control valves–the idea that human intervention is
still an option.

Although the future of Allen-Bradley –and of all the rest of
us–will hinge on the quality of our people, O’Rourke is quick to
admit that he does not have an infinite supply walking his halls.
Recently, Pratt ; Whitney needed to redesign and upgrade a plant
with 1200 machine tools and asked to borrow about 200 of his top tech
people to do it. “We didn’t have 200 people we could
spare,’ he relates, “so I finally agreed to give them two
people free, just to train their people for the task.’


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