Suppliers reboot supply chain mission

Oct. 6, 2021
Emerson, Honeywell, Rockwell Automation and Siemens weigh in digitalization and other supply chain remedies
2021 Automation supply chain update

This article is the first installment of the 2021 Automation supply chain update. 

View the rest of the series here.

While nothing can replace scarce microprocessors and other parts lacking due to disrupted supply chains, some suppliers report that digitalization can alleviate some of the symptoms until essential product arrive.


While large enterprise procurement tools have been available for years, users now expect more visibility into the status of their orders, especially with current supply chain pressures, according to Brian Fretschel, director of digital customer experience for Emerson’s Measurement Solutions business. 

“Just saying that something has shipped isn’t good enough,” says Fretschel. “Whether they’re buying raw materials, intermediates, or parts and other products, today’s buyers want to know what’s going on at every stage—from when they order to when the box lands on their loading dock. On the procurement side, buyers have even more influence now because of the accessibility of information and their ability to help mitigate supply chain pressure."

To lessen the symptoms of these supply chain ailments, Fretschel adds that Emerson has improved and personalized its online user experience (UX) for procurement. For example, a user’s MyEmerson account shows quotes, orders, lead times and order status on one screen. “This gives us and our customers an immediate leg up by knowing what’s coming,” adds Fretschel. “Where we previously got paper or PDF orders, data is integrated with the manufacturing system, which streamlines processes and helps us meet our users’ lead time requirements.”


"We've seen demand from our customers return this year, and our core customers in the continuous process industries have adapted to operate despite the pandemic still impacting daily life. However, in 2021, we're still in a very tight supply situation from our suppliers. We're seeing shortages in electronics components but also in other materials like resins," says Srikumar Srinivasan, VP and GM of Process Measurement and Control at Honeywell. "And it's not just us. Even automotive companies have reported component shortages. Intel has advised that the situation is likely to continue through 2021, according to ARC Advisory Group. Costs have risen too. Another dimension is that logistics have become complicated and expensive. Passenger flights are still not operating anywhere near the pre-pandemic levels. Most of our raw materials moves by air, but air cargo rates have risen sharply. Working with our suppliers to create an accurate demand plan that can be put into action has become paramount in this environment."

Srinivasan reports the Internet hasn’t significantly changed the buying process in the industries that Honeywell serves, and the distributor remains essential to providing the solutions they need. "It's true there's is a lot of information easily available to our customers on the Internet. However, it’s not always easy for them to find exactly what they are looking for," says Srinivasan. "While customers can learn about available options on the Internet, distributors are still important to guide customers to the exact product that best meets their needs. Our customers are businesses, but most enterprises have processes that don’t make online transactions convenient. Therefore, even when a customer decides what they want to buy on the Internet, enterprise processes still mean that transactions happen offline." 

Even faced with today's supply chain shortages, Srinivasan adds that end users are still increasingly seeking convenience. "They don’t have large engineering teams, and whatever manpower they have or system integrators they use are expensive," he explains. "A lot of innovation is going into what one customer called 'lick-and-stick' solutions. So, it’s not that customers are always looking to distributors or suppliers to integrate their systems. Instead, they're looking at suppliers to minimize the integration required. They're looking for interoperability, universal solutions and open architectures."

Srinivasan concludes that distributors always aspire to be trusted advisors and suppliers to their customers. "Most distributors have loyal, long-term relationships with their customers. They try to meet as many requirements for their customers as possible by offering as wide a portfolio as possible," he says. "The best distributors also stock adequate inventory to meet short cycle needs of their customers. In addition, distributors have built specialist capabilities to better serve customers. Especially in emerging markets, many distributors have built system integration capabilities. Even in developed markets, distributors have built specific capabilities. In North America and in Australia, we have distributors who can deliver wireless networking solutions. 

"Fundamentally, distributors are always alert to value creation possibilities, and I've found them to be agile operators, but they should continue to embrace new technology advances, especially because COVID-19 has accelerated some of these trends. Several of our distributors are offering remote engineering and maintenance services to end user stranded in locked-down geographies. Customers are embracing virtual and cloud-based solutions. Importantly, these are solutions rather than just hardware products. Distributors will have to adapt to solution selling delivery. We're also expanding our cloud offerings that will go to market through distributors. I see a greater role for distributors in deployment of cloud offerings rather than a typical hardware sale provided they build the right skills sets."

Rockwell Automation

"We've experienced 10 years of step changes in 18 months. Retirements, the Great Resignation and the ongoing brain drain accelerated during the COVID-19 pandemic, making it harder than ever to keep talent in-house. Plus, Amazon and other consumer-style models are guiding business and industrial purchasing in disreuptive ways," says Andrew Hastert, director of U.S. and Canada channel partnerships at Rockwell Automation. "We previously sold to plant operations and maintenance managers, but due to increasing risks, buying decisions are also being directed by others, such as IT and cybersecurity leaders. The 'when, not if' probability of cyber-probes, intrusions and attacks is compounded by supply chain problems because it's hard to source microprocessor chips and raw materials, and there are continuing logistics and bandwidth challenges."

Hastert reports the remedy for supply chain and resulting cybersecurity difficulties is more proactive consulting with customers. "We're talking with customers further in advance of purchases before backlogs of equipment sales stack up, and providing added insights and recommendations to help users achieve their goals," says Hastert. "We're also consolidating product and service buys, and further digitalizing the supply chain where we can. We now publish real-time availability and biweekly lead time data feeds to our authorized distributors. The amount of time our supply chain staff and partners are spending with customers has increased a lot, so we can better provide services, set-up and maintenance, and deliver consulting to identify gaps sooner in their applications and facilities."

Likewise, Hastert adds that Rockwell Automation's distributors have also increased the product-centric services and consulting they offer, especially those involving security posture surveys and recommendations. "Every manufacturer must have competitive strategy for making their customers more productive, increasing their throughput, and reducing their risk with Internet of Things (IoT), cloud services, machine learning and cybersecurity," adds Hastert. "In the past 18 months, our 29 distributor companies in North America hae developed more than 1,000 product and consulting-service projects. They're also working on being more visible to each other, and sometimes share inventory when needed."


"There are always differences between hardware distribution and support and software distribution and support. However, software is in far better shape, while hardware is experiencing added delays at ports and borders that don't affect software," says Colm Gavin, portfolio development manager of the Digital Industries Software (DISW) division at Siemens. "The single biggest and most visible supply chain problem right now is the shortage of microprocessor chips, which is mainly impacting automotive and other industries. Software is in far better shape because it's more flexible and transferable, so users can still do factory acceptance tests (FAT), leverage digital twins, and coordinate and verify applications before building them."

Because of these economic and logistics factors, Gavin reports the present roles of different distributors is tricky, depending on whether they're machine builders, system integrators or end users. "Our authorized channel partners are in a better position to support software and assist with FATs. Distributors can deliver hardware and parts more quickly, but software can just be emailed, so distributors need to develop tools and services to support these new technologies. This includes providing edge and cloud solutions in an app-store setting, or other off-the-shelf applications that users can get started with. Likewise, artificial intelligence (AI) is a complex, new technology, but it's not like buying a PLC and leaving users to figure it out. If users are buying hardware and software, who will support which one?"

Similarly, if a user buys a custom software application, Gavin explains they'll also need a support service like those offered by Siemens and other suppliers. "Distributors have to step up and help. If a user has an edge application or a heavy-duty process, distributors may not need to be nearby, and can often execute them and provide support from anywhere," adds Gavin. "The question is: can users get the right technical support, especially for tasks they don't perform regularly? Many distributors build up their resources and expertise, but Siemens also keeps up on existing technologies, and learns new ones they may need."

For instance, Gavin reports that distributors and Siemens' channel partners have been developing productions optimization as a service, which includes performing virtual commissioning, and providing Internet of Things (IoT) and digital twin functions. "The pandemic is spurring users to leverage digital twins earlier in their design and production processes," adds Gavin. "Suppliers, distributors, channel partners and users are also using data models to learn what will happen before they build and implement processes, which aids supply chain-related decision-making. They're combining virtual CAD models with digital twins of products, processes and performance, supporting virtual PLCs and FATs, and simulating work cells and production lines. Digital twins and are helping during COVID-19 because they let personnel from different disciplines work closer and earlier. Augmented reality/virtual reality (AR/VR) offer the same advantages, and can also enable commissioning, validation and training."

About the author: Jim Montague
About the Author

Jim Montague | Executive Editor

Jim Montague is executive editor of Control. 

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