October 11, 2012

One-on-One: Sonnenberg and Zornio Talk Trends

Emerson Process Management President Steve Sonnenberg and Chief Strategic Officer Peter Zornio met privately with Automation World Editor in Chief Gary Mintchell during the 2012 Emerson Global Users Exchange to discuss industry directions and trends.
One-on-One: Sonnenberg and Zornio Talk Trends
One-on-One: Sonnenberg and Zornio Talk Trends

Mintchell: You were refreshingly open and transparent about the supply chain struggles the company endured. It sounds like you came out stronger.

Sonnenberg: It was helpful to put a face on the problem and just acknowledge the situation and thank our customers for working with us. We really appreciated the loyalty of our customers as our teams worked to prioritize needs to assure that the most critical needs were served first. There was some tremendous working together, such as when some companies realized that they had extra parts and offered to sell or loan them back to help other companies in need.

Mintchell: You have made services a major point of the conference this year. In fact, you even did a press conference differently by using Emerson executives to set the context and then had some very articulate customers explain how they were using various services. The point was that they were using Emerson personnel resources—engineers, project managers, program managers. I believe this move of engineering resources from users to suppliers has been going on for some time. Is this a growing and continuing trend?

Zornio: Yes, this is a growing trend. Engineers are a scarce resource. This is actually a more efficient use of resources. We can hire engineers and put them in regional areas where they are more readily available to customers. We can cut down airplane time and improve the speed of service. Customers often find it more efficient to hire us as the main automation contractor for many kinds of projects.

Mintchell: One of your customers mentioned yesterday that he was not worried about intellectual property problems, because his company has domain expertise in manufacturing the product and they can rely on your automation expertise.

Zornio: That's just one of the efficiencies of allocating engineering resources. Another customer mentioned that he is only one-deep in expertise in many areas within the company. We are an alternative way to enhance his expertise. Even engineering procurement contractors (EPCs) are seeing value in hiring us as the automation designer so that they don't have to develop expertise in that area.

Mintchell: Emerson has been strong in oil and gas for many years now, and in fact the industry forum sessions devoted to oil & gas and refining were filled to overflowing. But so was the life sciences session. What's happening there?

Sonnenberg: There are a number of things going on in the oil and gas industry. First, there is a lot of consolidation, which is both a challenge and an opportunity as the companies rationalize different automation systems. So far, we have been chosen as the supplier for the combined companies. Specifically in the pharma area, we are working with the companies to do some of the control system design up front—to put DeltaV in the lab, so to speak—so that it shrinks time at the end of the project as they move from trial to production.