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quote start Converting needs into gainful opportunities is a way to define innovation quote end

When leadership thinker Peter Drucker observed “the purpose of a business is to create a customer,” he also called profitability the definitive evidence of management creativity and decision-making that gets it right.

“Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity,” said Drucker, noting that converting market needs into profitable opportunities is one way to define innovation.

Drucker’s observation on the relationship between innovation and the bottom line preceded EtherNet IP. But he would be a fan of leveraging the TCP/IP-based open standard to reduce capital costs and fortify the bottom line.

TCP/IP-driven automation cost-reduction scenarios include:

  • PLC/automation vendors purchasing and modifying the communication stack – instead of developing a new stack – reduces their cost and time-to-market. Efficiencies reaching the vendor’s bottom line lower customer costs.
  • Device suppliers free from investing in analyses and forecasts to determine which PLC/automation vendor to support, focus time and resources on adopting a standard that opens the door to serving more customers. 
  • Automation customers, in addition to purchasing best of breed PLC/automation equipment, learn only one open protocol. Streamlining reduces the time and cost required to troubleshoot or commission systems that comprise multiple protocols. 

Drucker would also understand why the automation optimization inherent in Why IP and EtherNet/IP motivates producers to be proactive on network services and security. He predicted decades ago that organizations competing during rapid technology change would leverage outside expertise and specialized services in order to achieve business goals. Drucker said companies would retain specialized skill sets to complement and extend in-house capabilities, and then release those resources at project completion.

It’s happening as he predicted, with industrial process operations leveraging specialized network and security services skillsets to cost-efficiently extend their network design and engineering capability. In the automation space, leveraging on-call expertise even includes using external resources to monitor infrastructure and alert customers to network issues.

The efficiency-through-automation triple objective is to lower capital costs while driving higher operational performance and product quality. Historically, however, manufacturers have struggled to manage the “cost tradeoff.” As the saying goes, you can achieve performance and quality, but the cost will be higher.

Using network services and security expertise to harness EtherNet/IP changes the perspective on what’s possible to include performance, quality and lower cost.

There is ample precedent for adopting a standard to achieve performance and cost efficiencies across-the board. A standard for the nominal size of a 2x4 piece of lumber, for example, enables architects, homebuilders and do-it-yourselfers to benefit from the confidence that a spec deployed will perform, as planned, without changing the design to support a materials constraint. The standard keeps resources and investments focused on performance-enhancing design. 

Deploying an Ethernet standard enables a similar outcome-driven focus. PLC and device vendors, collaborating with industrial automation customers, can create process control that optimizes performance – to achieve production goals – instead of sorting through protocols and support infrastructure. 

That’s what Drucker would have liked. Proactive network services and security thinking – based on an open standard – that keeps the focus on making money.

To learn more about industrial security, sign up for the Industrial IP Advantage industrial network design training here