America's manufacturing industry has certainly taken a beating over the past 16 months, and the grim reality of buyouts and mergers hasn't exactly boosted building automation vendors' confidence. So where, in a sky blossoming with an endless supply of dark clouds, is the silver lining?
The ARC Advisory Group conducted an end-user survey after September 11 that revealed security improvements as the third-highest (at 43.8 percent) goal to accomplish with building automation systems (BAS) investments. "Despite the fear of ongoing terrorist attacks, the users were still more worried about energy costs and integrating their operations than increasing security," stated David Clayton, senior analyst at ARC. Clayton is still forecasting "a larger growth rate for security systems than any other building automation subsystem," but the survey results indicate "capital expenditures on BAS in general will be relatively flat over the next 18 months because of the weak economy."
Clayton's forecast, then, is that sales for total BAS expenditures in the manufacturing industries will rise from 599.8 million in 2001 to 1,421.8 million in 2006, with a Compounded Annual Growth Rate (CAGR) of 18.8 percent. That CAGR, though, is based on assumptions of higher growth rates from 2004 to 2006.
So where does that leave the security industry vendors and end-user security administrators? Will there be budget for physical and network security implementations? Budgets are designed and based on anticipated needs, but the final determination of those needs and the release of the budget is the decision of executive management.
At a recent ARC Advisory Group manufacturing forum in Orlando, ST&D approached a variety of manufacturing automation vendor and end-user executives and upper-level managers to get their current pulse on physical and network security in their respective companies, and across the industry in general.
Executives defined security in their plant facilities as a way to protect their intellectual property, their assets and their people. "We produce our software in an office building, so our company's security needs are far different than those of our clients who run plants," said Kent Hudson, president and CEO of Indus International, an enterprise asset software manufacturer based in Atlanta, Ga. "Our clients manufacture a diverse line of products, so there are even further differences in the level of security requirements. For instance, a paper mill or steel mill's security will require less stringent applications than a nuclear plant or a defense application?but we see cyberterrorism as more of a future threat than physical terrorism."
Many companies voiced a concern for asset protection. Schneider Electric's vice president of development and strategy, David Sapp, stated, "Our biggest issue is protecting our portable PCs. They are the easiest way to export technology and office equipment."
"No one has ever stolen an airplane at Boeing," said Craig Battles, technical fellow at Boeing's Robotics and Automation Division in Seattle, Wash. "It's a high-value product, but not one you can just walk off with. Instead," Battles explained, "the physical security focuses on preventing unauthorized access to company products, systems and information."
The September 11 Fallout
At Boeing, security measures have increased significantly, according to Battles. "I've definitely seen stepped up security since September 11. For instance, there are additional patrols and monitoring of activity on or near company sites. We also have had more thorough inspection of freight and mail deliveries and tighter visitor screenings."
Dow Chemicals had a similar security change. "Generally, our philosophy hasn't changed," said Sherry Murphree, the company's manufacturing and engineering manager of information technology. "We've beefed up physical security, and everyone has to badge in now. Everyone had badges before, but weren't necessarily wearing them. Now we have an increase in random inspections of people coming and going (through the facility)."