The future of automation

By: Jim Pinto

Outline of the speech presented at
Omron Distributors Conference
Schaumberg (Chicago), IL. USA
May 12, 2005.

Introduction

    The turbulence of a new age is re-writing all the rules of business. Old dinosaurs are dying, as new leaders emerge. Tremendous opportunities are developing, waiting to be grasped by leaders. As individuals, as business professionals, as Omron Distributors – you must decide whether you have the leadership to grasp those opportunities.

    I'm here today as a catalyst – to stimulate your thinking, to open your mind, to stimulate your winning instincts, to help by generating thoughts and ideas that can make a difference for you, and the growth and success of Omron.


The OMRON difference

  • Revenue approaching $ 6B – the largest Japan-based industrial automation company
  • Unique among multi-billion $ corporations, Omron devotes significant attention to its ethical, social and philosophical positions.
  • Innovative yet practical entrepreneurial philosophy traced to founder,
    Dr. Kazuma Tateisi. Read his book, “The Eternal Venture Spirit".
  • Omron long-term plan – Grand Design 2010.
  • Omron corporate goal – double the value of its business by 2007.

US Automation business overview

  • $1b+ companies only 10-15, very few mid-size ($ 100m – $ 1b), large number of small suppliers, and majority under $ 10m.
  • Current automation suppliers – who will be left standing when the dust settles?
  • New-age turbulence – companies must adapt to survive and thrive.
  • New business and revenue models for growth & success.

The role of Distributors at Omron

  • North America is a key growth market for Omron.
  • "Rolling out the red carpet" for North American Distributors.
  • Distributors are partners for “front line” customer interface & revenue growth.
  • Omron works with Distributors to develop a long term partner relationship.

Optimizing Sales & Distribution Channels

  • Disintermediation – elimination of intermediaries in the business process.
  • Traditional business supply-chain:
    • Manufacturer "upstream"
    • End-user is the "customer"
    • All sales channels are "intermediaries": Sales Reps, Distributors, Systems Integrators.
  • Disintermediation seeks the most effective sales channels – not just cost.
  • How, where and why "disintermediation" affects the industrial automation business.

Disintermediation – New Models for Growth & Success

  • Today, many products have become "commodities", subject to price competition.
  • Manufacturers do not have "upstream profits" anymore.
  • Winners must develop new business and revenue models.
  • Proprietary differentiation and breadth of product offering are important.
  • Distributors are key links to the Customer – more than just “local stocking”.

Pinto's Pointers

  • Develop long-term supplier relationships – Omron seeks strong partners.
  • Focus on key markets & customers.
  • Develop alliances (Systems Integrators, sub-distribution) for fringe customers/markets
  • Don’t de-focus with too much territory
  • Become an “infomediary”
  • Never, never be the lowest bidder

Conclusion

    Leadership starts from inside yourself and your company. Opportunities develop – from your customers, from your suppliers, from the market. To grasp opportunities, you must be ready, your company must be agile, and you must have the attitudes that make a difference.

    Omron is ready, willing and able to make a difference for YOUR Company.


Suggested Review


The Disintermediation Series


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