Rockwell Automation, Inc. (ROK) Earnings Call Transcript & Summary

Hello, and thank you for joining today's webinar. Before we get started, we have a few housekeeping items. [Operator Instructions] Today's event will be recorded and will be available immediately after it is completed. You can access the recording utilized in the same link that you used to access the live event. After the webinar, we will also be sending you an e-mail with the resources from today's event, including the slides, handouts and event recording. Additional information regarding today's topic can be found in the handouts panel on the webinar platform. With that, I would like to introduce you to today's speaker, Bill Sarver.

Hello, everyone. Thanks for joining. I look forward to spend a little time with everyone and look forward to answering any questions we can get to at the end of the presentation. So feel free to think about those and write them down as you need to. So let's get going. So what are we talking about today? We're talking about end-to-end tire manufacturing MES. And it's really about the value of end-to-end MES within the tire industry. And hopefully, I'll go through and explain what end-to-end means to us in definition. But if you are unsure, please feel free to ask any details you can as we move on or in the Q&A for later, okay. So let's get going. So where I'd like to start today is, I'd like to start with what is the smart manufacturing vision within the tire manufacturing. But before we really get into what is the smart manufacturing vision, we have to understand where we are today, what is the current paradigm that we live in and most of the companies are living in today. So today, most -- everyone that I found in the entire industry outside of a couple of exceptions are still living with a very siloed organization and very independent organization in function and in physical area. And what I mean by that is IT kind of works on its own with its own solutions. Manufacturing works on its own with its own solutions. Engineering does its own thing. And what happens is they don't have systems that actually talk to each other. So everything that they do and try to improve upon is done manually. And so because there's this manual management, high-level manual management and trying to integrate data, trying to collect data, trying to understand what the meaning of the data is, understanding why their OEE is not reaching the levels that they expect. So the lagging OEE within the entire organization is 1 things that I found. And I've been working in the tire industry in all regions of the world and working with various customers. And this is the #1 goal for everyone is, everyone's stating says, we need to improve our OEE. And there's multiple ways of doing that. And the first things that come across are these siloed functions, siloed data, siloed separation, both virtually and physical separation of the functionality and systems and data. And there's also a trust factor going between the different organizations within the -- each company. So the siloed situation that every company has found themselves in is what drives the need for improvement, and this is common throughout the organization. So what everyone has in mind is, okay, we need to improve that. And a modern MES system, and everyone talks about integrated PLM, right? So the whole idea here is to break down these barriers, break down these siloed virtual and physical walls within each company. And so you see that the 3 areas of a company, primarily when we're talking Industry 4.0, still exists. So you still have the IT organization, you still have engineering, you still have manufacturing. But the role that each one plays and the level of integration and the solution and where that solution resides is changing. And it's blending. So the whole idea is to create this boundary-less, agile system from product design, development, virtual validation to actually integrated bill of process and bill of materials to the manufacturing directly. So to be able to improve and provide an integrated scheduling system versus having manual manipulation, either by a team of production control people or allowing operators to make that change, which a lot of companies do. They allow the tire-building operators to make some of those decisions without understanding the impact of the changes those decisions have upstream and downstream. So these are things that we're trying to improve on, is improve this visibility, the real-time decision-making, and make it smart, right? So when we make it smart, what does that mean, right? So we make it smart by integrating the engineering to manufacturing, integrating IT directly into manufacturing in MES and including an integrated end-to-end scheduling solution that actually works across all the way from hearing throughout the entire organization all the way back in the raw materials. So instead of having 2 or 3 different systems, we have it into 1, right, and be able to bring forward. And what does this do? When we start improving our visibility, improving the data, understanding the management of the overall operations, seeing what's happening real time, better management of materials throughout the plant in the flow. We vastly improved efficiency. We vastly improved quality because we're improving on the execution based upon engineering requirements. And ultimately, that leads to improved profitability. So I talk about this not as something that's wishful thinking, not something that is conceptual, but this is real. We've been doing this for a long time, and this is real. So when I say Rockwell is experiencing this, many of our customers don't think of us always being in this space. They always reach out to IT companies. They reach out to consultants to do this type of work. But we're the ones actually doing the work, even for a lot of consultants, they come to us asking about ideas, concepts, trying to understand how we do this. So they are better to talk about it with their customers. So we do a lot of this work from the what we call the enterprise-level down is where we excel. And so we've got a history of doing this. And so customers always ask about why? Why Rockwell? One, as I just said, we've been doing this a long time. It's our experience that we built from our domain expertise globally from the automation perspective. So we've taken the approach of Industry 4.0 as not just like a software company is from the enterprise-level down, we've taken the approach of taking it from manufacturing and operations up. And so the way we've approached things is really for operations. And then we've built out around it and had to build in the experience and knowledge of our customers through IT, so they get to learn and understand what we do, our experience and capabilities are, and we've been doing that. So we've been developing these provable, scalable solutions, so helping customers either in greenfield applications, brownfields and incorporating into redoing parts of facilities that grow into much larger facilities. So to be able to scale by product, by function, by area, by site. These are the solutions that we've been able to demonstrate and provide throughout the globe. Which leads me to another one of the big values that Rockwell brings is why Rockwell is these end-to-end solutions and delivery. So one of the things that makes us different than everyone else is we do all of our development and our deployment ourselves. So vast majority of all of our systems that we've been deploying around the globe has been all done by Rockwell personnel. Now, we may incorporate a partner to be integrated, to augment some of what we do, but we own the solution. It's all on Rockwell paper. And the agreements are all directly with Rockwell. So it comes down to 1 throat to choke. There's none of the finger-pointing. It also helps us as we execute and deploy. We're able to learn and improve our solution better and be able to provide a better solution to the next application within a company or as we expand out and extend our solutions over time. So that then helps us with support, because these systems are not just, "Hey, you deliver it and you can walk away." We become business partners when we're delivering these type of solutions, and it's about support afterwards. Now the level of support that we provide, since we're doing the execution, we have a much better ability to be able to support these customers as they develop their personnel because it's not always the same skills and expertise that they've had in the past when they move forward into implementing these type of solutions. They may need a bridge of a period of time or help develop some of their staff. Or maybe we permanently take on some level of support for that customer as an internal employee, if you will. So again, we do this at all levels and to meet what the requirements are what each customer's needs, we have a very flexible approach in how we design out our support afterwards. Right, which then leads is our ability, which we've come to is actually on the consulting, to be able to help customers early on outline and understand what these systems are, what they can do, what the differences are throughout the globe in the different situations and help guide them around what it takes to actually implement these so they can plan for it and budget for it early on over time. So these are some key things of why Rockwell. So I bring into this slide -- and most everyone thinks of Rockwell as the automation guys. So all those dark blue boxes on the right, a lot of people still relegate us to that end of the business. They don't understand that we've been expanding out and extending our capabilities throughout the enterprise. And so what you see in the orange has been something we've been doing for quite some time, both from an MES perspective, from some edge analytics, some point solutions, some IoT applications. These are things that at Rockwell, we've been doing for a long time. But it was -- and when I look at the different regions, most of this has been in the Asia Pacific is where we started. And then we -- as the things change, the climate change and the needs change in the Americas, things move back to the Americas. So we're doing a lot of this work back in the Americas now. But this is where a lot of the American-type or headquartered companies, they developed homegrown solutions. So they weren't aware of all what we could do and how we could simplify and reduce complexity in their design. Sorry, but then through some different acquisitions, we then expanded out our capabilities, that Rockwell is now an ERP company. So just like SAP, just like Oracle or Dynamics and Microsoft, Rockwell with the acquisition of FLEX, we became a cloud ERP company. So with that, also, we became a QMS, a full-time enterprise like QMS system company as well. So which then leads us into our consulting and engineering design is we've also expanded out into the PLM side. Which, yes, we are not a PLM company, but we are agnostically working with the various PLMs, helping customers understand how you implement PLM that can -- so it's usable on the factory floor and how that can be part of your entire digital threat strategy. So dwell in this word. And so everything on this slide now is Rockwell. So we are no longer just the people in the dark blue boxes. We -- this entire slide is Rockwell. So we can support customers at different capabilities, different levels, different needs, different requirements in each 1 of these different areas to help customers through their digital transformation strategy and I/O strategies. This is the new Rockwell. And we've been able to do this, not just organically, but inorganically. So as many of you or many of you may not be aware that we've been on a very accelerated pace of partnerships and acquisitions. And so not only we've been acquiring technology companies to help with engineering like Emulate3D, doing virtual commissioning, virtual development, special emulation, but partnerships with PTC around ThingWorx and Kepware, which we're early on. But then in the services around cybersecurity and services and in the Avnet and in the MES side to extend our capabilities, MES open delivery acquiring 1 of the largest MES-dedicated MES service system integrators becoming part of Rockwell, MES tech that's dedicated to automotive in the tire industry. This was their major focus. So we have a team that's strictly dedicated into the space now. This is all they do, right? And the acquisition of Kalypso, which helps us with the AI machine learning side of the business. They were PTC partners, 1 of the premiers out there, helped them develop solutions, but they started out as PLM consulting and PLM development. So that's brought on. And then in our movement towards cloud or organically, but inorganically, the acquisition of FLEX, as I mentioned, ERP, MES, cloud-based capabilities and solutions that fit in certain businesses and other businesses. Cloud may not fit. So what it does is it expands our portfolio to have these discussions with customers on what best fits when and where, right? And then the acquisition of Fiix, which is a cloud-based CMMS system. So we've been on a tear over the last 10 years to expand our capability to become the digital transformation partner for companies in a very broad sense to fit the needs and augment the needs that they have themselves right in the rest of their ecosystem. So this is where Rockwell has been and it's where we are. So I bring this up is, why Rockwell is everything that we say we do ourselves. So we are our own manufacturer. We now have 20 plants, I need to update this slide -- versus '18. And everything that I talk about here coming up in products and solutions, we do ourselves and use ourselves. And we're in various stages in our journey throughout the whole digital transformation as well through our operations, right? So we build 387 standard products, and then we have all-engineered order products. Our same solutions and products work and develop through any part of our ecosystem of manufacturing to be able to build any type of product. So it works, right? So tire being a hybrid industry, automotive being more of a discrete industry, this is -- these are good things, right? So these are common. So when I say we've been doing this a long time, we've been doing this for 35-plus years. We started doing this work with Toyota back in 1987 before cloud, before client server architectures, when it was just mainframe and PCs in developing how to automate Toyota production system principles, which we help them and work in every plant outside of Japan with Toyota, right? And then we've expanded that out. And then through acquisitions of a platform company for MES, an on-prem platform called DataSuite that became FactoryTalk ProductionCentre, which has been our core on-prem MES platform. We then started developing the application specific to our industries, our core industries that we serve. So the automotive, right, and then into tire. So even though we do a lot of custom work with customers, we decided that we need to bring some standardized solutions and functionality out. And so we've created our own standards on some of these to be able to help customers to speed it up, to speed up and improve capability from what they're doing to fill the gaps better to provide better efficiencies and management of their operations, which is why we develop these templates, as we call it. And we call them templates because they're the vast framework of developing a solution, but every customer is different. Every solution for the big customers are different today. And so the needs are different. So there's always -- and we always say that, hey, our capabilities run about 70%. So we know out of the box, we can handle any customer at least 70% of their capabilities. And then we have to tailor the rest of the solution, configure it to meet the differences to each customer and/or each region or how they're applying things and how they produce their product over time. And depending on what region or country they're doing it in. So we have to do that. So what we've done is we've taken all of this experience in all these products, and we created specific tire-level solutions. So everything, our capability from digital PLM and process management, integrated electronic data work instructions, integrated bill of process, back to MES. We're already doing a specific quality management systems tailored to tire, which we're already delivering whole QMS, enterprise-level QMS systems into the tire business, analytics, specifically in AI machine learning applications. We have the largest installed base of AI machine learning in the world running in tire globally and work with many different tire manufacturers already with proven solutions that have vastly improved efficiencies and capabilities, right? And also the CMMS. And as we all know, what's important is the SCADA systems and how we develop, deploy and integrate with the various different types of SCADA systems, whether we're supplying them or we have to integrate with ones that are existing that customers don't want to change. And that's fine, too. We don't go into our customers telling them they have to change everything. We surgically understand what has to be done, and we jointly agreed on what stays and what has to go to meet their KPIs that they're trying to reach. So end-to-end MES, which is the primary focus of the rest of the discussion here. So this -- the next couple of slides came directly from a customer. So they provided us this. And they said, "Yes, you can share this, because this is how we looked at it." Right? So when we're looking at the challenges within the tire manufacturing plant, it comes on to manual planning. So as what I mentioned early on is the current paradigm, there's so much manual management going on in the tire industry that it leads to inefficiencies, right? So this whole inefficiency around manual management and manual scheduling, non-integrated data and information from process to process, not being able to track things well and not being able to move from back to a UTI cloud to a tire identification, single tire identification tracking, right, which we've helped customers migrate from 1 process capability to another, right? These are all some of the related issues that every customer we found in tire, and we saw that all across the entire industry, right? And then to collect the rate data because some of the machines you're running -- and they're still running implants. So you have all this different scale of capability, functionality, right? And how do you integrate systems across such -- of assets in the company? Well, so what we see though, is it doesn't matter if it's manual or automated. We have ways of getting the data. We have ways of managing the process, augmenting what's already being done, right? And so MES can help by integrating these systems, integrating these processes, doing better enforcement of the -- of engineering requirements and of recipes to be able to do more improved tracking and be able to hopefully do better scheduling, right? And how we look at scheduling is different than others, but I'll bring that up here shortly. To be able to -- because of this enforcement of engineering, we do better air proofing and Poka-Yoke capabilities. So these are all things that we do as well as being able to provide more information, not just of what happens with an operator, what's going on with the machines, what's happening with the process. Collect it, integrate it, mash it up, report on it. These are all things that we're doing. So what's this going to do for us? Well, this is -- we've already proven we can vastly improve the OEE. When we go to an integrated MES, end-to-end MES tied to an integrated end-to-end scheduling solution, we've been able to improve efficiencies of customers. Ones that are already highly integrated, we may improve at 2% a plant, which is huge numbers. But we've already proven in other applications, it could be 8% or 10% per plant when we've gone through that, which is mind boggling in the overall efficiencies. What does that do also? So not only are we improving MES and efficiencies by improving our efficiency, we're also helping customers improve their sustainability and reducing energy usage. So energy is a big deal on tire, but I can almost improve the performance of energy and use of energy by improving efficiency in the plant greater. So instead of just monitoring it, I'm improving it, and improving it in different ways. Right? So energy and sustainability is also a big outcome of this on what can be done. So how do we do this? Right? So how do we go through it? And I'm just going to give you a brief overview. So we have a lot more detail afterwards. So anyone who wants to get into more detail later certainly can reach out so you can better understand our overall solution and capabilities, but this will give you some fruitful thought as we move forward. So one of the things I'm going to bring in here is everyone -- and I hope everyone understands the Purdue model. So from Level 1 to Level 5, and where all these systems and capabilities set. So in the tire industry, everyone knows the machines, right? They're in the different areas, whether it's mixing, prep area, assembly, finishing, right? Curing and finishing areas. So we have those systems in those plants. But in many of those areas, there's already SCADA systems or our TLS or tracking systems, manual or RFID. There's manual material transfers. There's starting to be some AGV transfers. And there's high-level automated conveyance systems from companies like SimCore and others, right, that go through that. We have to track and integrate with to understand where things are, right? So there's a handshaking that's there. And then the MES has to manage all of that based upon orders and requirements. And recipe management and setup and scheduling. So typically, when you look at a Purdue model, production scheduling would normally sit in a Level 4, as you're seeing on here where the ERP system is and our WMS systems, Warehouse Management Systems. But we take it a little differently. So it kind of sits in between Level 3 and Level 4, but it's directly tied to Level 3 in our solution. So we take a little different approach. So we still have to take the importer of a plan from ERP or from other planning system that customers have. But we directly integrate capabilities, functionalities, system status, alerts directly to production scheduling directly tied to MES, and it's designed that way. So it's very fast, very efficient, very quick to alert needs to change to production planning or different areas to be able to change what they're doing and to be able to allow them some variance in what they can do. So how we approach this level and integrate, we cover and integrate to all levels. So even the PLM, as I mentioned, is there. So what does end-to-end. So that's generic. The Purdue model and those systems are fairly generic outside of the difference of scheduling. And how -- and where we use it and see it. But end-to-end to us is 2 ways. One -- actually, 3 ways. One is by area. So when we provide a solution, what we found in the industry that many times mixing and raw materials, customers use a different system and solution in mixing raw materials than they do in prep and/or tire building or curing. And many times what we found is, there may be 2 different systems throughout the rest of the plant. There may be 1 for tire building and a separate 1 for curing. While we cover the same solution covers everything from finishing back to raw materials and mixing. So to be able to reduce complexity and better integrate the process and the enforcement of rules and traceability in 1 system, that's a huge differentiator. And what we have found is we're the only ones in the world really doing this across the board throughout the entire operation all the way from raw material to fixing and with 1 solution. Right? So that's end-to-end to us in 1 way, is end-to-end by functional area within a plant and a manufacturing operation. But there's the next -- another attribute to that is end-to-end in functionality. So we have to be -- if we're going to do that, we have to have this end-to-end capability and functionality throughout the plant. We have to be able to manage raw material. So once it gets received in, we have to be able to manage how material gets tested and validated before it gets to release production and do a handshaking with WMS on how and where to put it away and when to access it and then reallocate material to scheduling. So we know that you can actually schedule orders because I have the right material that's been qualified appropriately, right? And then be able to provide a scheduling solution that actually is built on all of the necessary rules throughout the entire organization to be able to schedule efficiently. Right? And then -- so we have a LIMS capability, and we have this quality capability tied to order management, tied to material management, right? If all of that is integrated functionality, which then allows us into -- to be able to better manage nonperforming product and be able to then manage rebuild and rework and reclassification based upon our traceabilities and our ability to manage recipes. Rate and the whole recipe management functionality rate? And then be able to extend out in the areas that typically most companies are not including in any homegrown MES that we've seen and/or into their scheduling, which is the tools. So tools go into maintenance. You have to maintain the tools. You have to rework dies, you have to assemble molds. You have to build bladders or purchase bladders, right? And be able to do this in a timely manner. And you have to include all the change out time and all the schedules and make sure the right tools are available to meet the schedule. So all of this is integrated in our solution and the MES solution manages all these tools, pieces it, and all the integration and alerts of status and state back to the scheduling system is all managed automatically by MES and how we directly tie the scheduling to the MES. And this is kind of what's made us different, which has enabled us to give such vastly improved efficiencies in the plants that we've been able to execute that the customers have told us, right? But the third area is different is end-to-end scheduling. And so again, as I mentioned, we start with curing from a cure schedule because that's the output and efficiency of the plan is through curing. And work as scheduled all the way back through building. So once we build a curing schedule, the system automatically creates a building schedule, and that goes into a prep area schedule for recruiters beating, calendars, all the processes. And then that works back into the mixing schedule. Now again, not all -- many customers have a system for mixing a SCADA system for curing. And so maybe we're not necessarily in those cases interacting directly with equipment, we may be interacting with the equipment and the process through the SCADA systems. Because sometimes we just don't want to change those in a brownfield application. But in a greenfield, that's a different case. We may be changing how we integrate and implement this if it's a greenfield, right? And these are discussions that we have with the customers, right? But then also, once we have this framework and it allows when you -- production planning gets an alert, and you need to be able to make a change, because all of a sudden, I got a machine that went down. I got a -- a quality problem. I've got an operator that went home sick, a tire building operator night in his skill, I don't have someone else to work on this 1 machine or a couple of tire SKU numbers that I need them to do. So how do I reschedule? Or I get an updated demand or request from a customer to improve delivery of certain product, and how I do that may affect the outcome and others. So you need to be able to run what if scenarios. Right now, everyone does this through spreadsheets, mostly. And it's not very effective and efficient, and they don't really know if it's going to work. So when we do this, it provides -- it allows you to run a couple of what if scenarios. And to be able to say, hey, a change here, what effects over here and to be able to look at what the output is. And so before you implement a new schedule through the MES back to the equipment and process area, you can test things out. And so this has been a huge value. So a completely integrated end-to-end scheduling, completely integrated to an end-to-end MES has proven its value in the industry globally, and we are executing on this for a number of years now, okay. So high level, what does our solution look like? How do we build it? What's in it? What's part of it? What do we think about? What do we do? And then what's it look like? So that's what the rest of the discussion is going to be. So first of all, as I said, we start with a template. First, we actually step back. We actually start with our platform, FactoryTalk ProductionCentre in the tire business. We've learned that an on-prem solution has much better capability to meet the requirements and the high velocity of data and information and changes and flexibility that's needed in tire that -- which is why we decided and look at still using a on-prem solution versus our cloud-based solution in the tire industry. So what we've done is we've built a template. So on top of the functional platform capabilities, we have a template that builds this framework of functionality that provides that standard through to any customer. And then we build on, as I said, this customer unique needs, capabilities, either by company, by process, by area, region, by plant, right? And overall, when we do that, that ends up becoming the customer solution. So this is why whatever we do in 1 company is never exactly the same as the next. And we've had to learn that there's not 1 size fits all in this business in tire. It's just not yet. It's not there. Even though we'd like it to be there and when we've made it more standard than anyone else, it has still varied by company. So when we say standard functionalities, this is not an end all of what those are. But when we build a tighter specific solution, we're not coming to market with a standard scheduling solution, with a standard MES solution that we try to make work in tire. No. We have completely developed, from ground up, a tire-specific MES system built and designed for the needs of tire and process requirements of tire, the same thing we did on the scheduling solution. It's built from ground up around the needs of tire and a tire manufacturing process. We have not taken a generic system and try to make it work. This is -- these are all dedicated. So whether all those different areas that I mentioned, and master data, integration of ERP, PLM or I'm going to own bonds and work constructions in the MES. I'm going to do all the order management, the scheduling, all the implant tracking of logistics, integration to any automated system, manual systems, directing fork truck drivers, given priority on deliveries and materials. That's all through the MES does all of this. The tool management is Ascension, which I mentioned is a different. All of this providing the traceability and management of nonconforming, which are critical to improving quality and efficiency in an overall plan, right? These are things that we do. So when we actually look at everyone in tire -- tires, I'll say, is a little further behind in automotive. I do automotive. It's where I recently came from. From the PLM integration and what they do in PLM. So -- but many tire companies are catching up, catching up fast. And eventually, the whole integrated PLM is going to be their entire as well. And good news is we're already doing it in automotive. So we know what has to be done and the approach that we take. It doesn't matter what PLM we're agnostic in that respect, whether it's Dassault, Siemens or PTC or something else, a homegrown engineering system that we're working with, we integrate to it, right? And be able to provide the bill of process and electronic work constructions from it and be able to manage it and tie that with the ERP capabilities, functionality to better manage and enforce engineering standards and nonconforming, right? So we already have a standard interface, 100% of all of our systems have been integrated to SAP or any ERP system. About 60% has been SAP over the years since 2005. 100% of everything we've been doing has been integrated to ERP since that time. So we've been doing that, and we know we have a standard, we know on grade, we know what has to be done back-and-forth, and we do that. But it's also on the shop floor. More importantly, for our solution, to provide the efficiencies and to provide a better scheduling solution. We have to have better integration with the equipment. And so we have a standard that we know what needs to happen. And so we have to understand and do gap analysis with companies to understand the capabilities of their systems and to understand that they can -- what can be implemented in what area and on what machine. So we know that and we worked that out, but we have a standard. We know what it takes to solve the problem. And so when we get to the solution itself, we have to do configuration. We have to -- the data management side of it, the quality master data, the product master data. And we have to configure the system, the areas, the plants, the operations. So this is where our standard configuration is. So not everything is hard coded, custom developed its all in these different software modules that, if you will, can be configured. We provided this capability. Now does it -- again, does it give you 100% of everything you need? In some areas, yes, but in other areas no, right? So we also then when we do the raw materials, we have to do LIMS, right? So we have a configuration of LIMS and raw material, raw material storage, right? And we go through that and we manage that whole information. So a product gets tested, it gets to get released. We have to manage to get them tested before it gets put away. Or if it gets put away, it gets put away in a controlled area before it gets released to production, right? And so we manage that and configure all that. From the recipe management, we call it the golden batch, right? So even though we have a standard engineering recipe, how that recipe and product gets made on every piece of equipment is different, because even though the equipment may be the same type and model from each OEM, how it actually operates is a little different due to the mechanics. So the recipe may have to get altered from product to product, machine-to-machine. And many systems can't do that. They go to separate systems. While our MES manages all that in itself. So all the recipe management for every SKU, for every machine, right, and to the directions we're putting parameters into every machine or directing every operator is part of our capability solution. And we do that for every area of the plant with the recipe management. Again, all the way from the mixing, how you mix it, the dry mix, the premix to -- all the way back to curing, right, in integration with the different systems. So then we create different order screens. For mixing, we have different operator screens. This is just 1 simple example. But the one thing I will say, even though we have a standard, every customer has wanted changes on the user interface, and we're easily able to make changes on the UI to meet what a customer wants or to make it easier to make a transition from 1 system to another, right? So we do this. And so we do it through prep, through tire building, right? And I'm only showing you very high-level examples. But you see some commonality of the screens and how operators interact. And then from a finishing module and if you -- through testing and if there's a reclassification that needs to happen, it's there, right? But then you want to monitor and manage this. And so you have to have -- I would say, this is the part that everyone wants, the visual management piece, the reporting to dashboarding. So we have an integrated solution that right now, we utilize ThingWorx and built an app that's directly designed to work on top of the MES, the IoT platform. So it leverages the capability of mash-ups. MES does what it does well. IoT does what it does well, right? And we have a standard solution to be able to take it from a plant-level dashboard, enterprise-level dashboard, break those down into OEE into each area, into each machine, right? So get down to each machine level and how it's operating at the APQ level. So availability, productivity and quality level. And what does that mean for efficiency? What's that mean for a drill down of downtime, drill down of quality, drill down of performance? So this is by area, by machine, we create these standard drill down screens to help customers do that. And then everyone wants a birth certificate. The traceability going back to the raw materials. So being able to create vast level traceability down to a unique tire identifier code of UTI, we were able to do that, either both visually and be able to drill down what's in each 1 of these different machines of process or do it in a standard reporting form. So we do this together, right? So where are we at? So in summary, we've done this for a lot of customers. So a lot of customers have homegrown solutions, but many customers have wanted to adapt new solutions. Many started with greenfields, but now we're moving back with customers and doing brownfields and going back, which is a little more challenging. It takes a little more time to do at rates so we don't risk production because the brownfields they're producing. But we're doing it and we know how to do it, and it's been done effectively. And we're doing extremely well with the vital improvements in the business. So overall, not just MES, but what have we been able to prove out for the industry? One, we've, in certain plans, improved factory output by 30%. Is that an outlier? Yes and no. So between MES and what we do in machine learning and analytics, we have improved factories' output by 30% in some cases, right? We've reduced time-to-market with what we've been doing, integrating with our -- since we already have a standard that our solutions that are built for the industry, we can deploy them faster. We can integrate with integrated PLM and design, we can reduce time-to-market. This has also been proven. So we've been able to reduce cycle time from start to finish, right, for customers to be able to start making profit and profitability, improve that and their time to do it. And reduce operational costs, improve OEE up to 50%. Now that's also not just from MES, that's also in conjunction with machine learning, that we've proven that we can improve OEE in certain cases in times in certain areas by up to 50%, and that has been proven in doing, right? Improving quality, first-time quality, right, and reducing unplanned downtime. These are all actual facts. These are -- our numbers, these are numbers customers have given us. I can't share with you which customers, but these are the numbers that we have been provided by customers. So with that, I'd just like to say thank you for your time. This has been a high-level introduction to Rockwell and Rockwell capabilities, end-to-end capabilities in the tire MES space and tire manufacturing space, and we look forward to working with any one of you and helping you understand and how -- figure out how we can help improve efficiency, quality and profitability and everyone of your customers as well. So with that, I'd like to hand it back over to Armando to see if we've got any questions in the queue, and where we can go from there.

Thank you, Bill. We have 1. I hear end-to-end solutions from various companies. Why is Rockwell different from others in their meaning of end-to-end?

Yes. So this is like MES, right? Everyone has a -- what does MES mean to everyone? If I go back to the ODVA standard, ODVA really dictates what MES is. But any company that does any 1 part of what ODVA says can call themselves an MES vendor. So it's the same thing when we talk about end-to-end, right? So you -- when a company comes to you and talks about end to end, you have to understand what their definition is, right? So our definition, as I tried to highlight is -- and we know this is differentiated because customers have told us -- is when we start including the tire building in curing and tie in mixing and raw materials into 1 solution, that's end-to-end for the entire tire operation. A lot of our competitors will say they're end-to-end, but they're end-to-end only in 1 certain aspect of the process, not end-to-end throughout the entire operation. And especially when it comes to scheduling, as far as we know, we're the only ones doing complete end-to-end scheduling tied to end-to-end MES out there. So our end-to-end definition, as I tried to highlight, is end-to-end by process area throughout the entire operation and organization and end-to-end through functional area as well. So hopefully, that clarifies it, and we're trying to repeat that again.

Okay. 1 more. Improving efficiency is vitally important to our company. Better scheduling is seen as an important step towards improved efficiency. Is Rockwell doing scheduling differently?

Yes. And that is -- again, I tried to highlight that, but let me clarify it 1 more time. So end-to-end scheduling is -- what we found in the tire industry is many companies are using various systems, but most companies are still doing everything by Excel spreadsheet. So they get a plan from ERP, and then they have a different production planning person down in each area. So they may have a production planning person doing scheduling for tire building and another 1 for tire prep or 1 just for extruder, another 1 for the rest of prep, another 1 for curing, another 1 for mixing, right? And they each have different tools. These tools that they work with work for them. But they can't see what's happening in the other areas or what issues are there. So what they think that they are going to provide is a schedule is very, very focused and very narrow only on what they're looking at. And -- so when other companies have tried to implement scheduling -- and other companies have, they tried to implement where scheduled -- generic scheduling systems, because more scheduling systems, that's what most companies are doing. They're taking a standard algorithm-based solution, they try to make it fit and make adaptations to it, add an algorithm, a piece to it, maybe a couple of constraints and be able to execute in a call something for tire industry. So we didn't take that approach. We took our approach in scheduling directly, we started from the tire manufacturing process, built the constraints and then built a scheduling for that directly developed and manufactured for the tire industry. It is not taking some other standard solution to make it work. We know that the other solutions and the industry customers told us have not been very successful. And in today's world of machine learning and AI, we know that there are some customers out there trying to develop optimized scheduling through AI. But they have not been successful with that either. So what we think is the best solution is taking what we've developed in a rules-based engine, right, a heuristic-type of scheduling solution that's built from the ground up and get a good schedule out of that. And then when you optimize it, we're already developing the optimizing engines and algorithms that sit on top of that to do other optimizations. So these are things that we're doing. And so these are things that make ourselves different when we include these capabilities, and we do it from raw materials all the way to finishing. This is different. This is not the same of what's happening in the rest of the world with our competition. This is why we are different. This is why we are the leaders in the tire business and MES and scheduling. Hopefully, that answers the question.

Yes. Thank you. Well, I don't see any more questions in the Q&A. So thank you, everyone, for attending today's webinar. In an effort to keep improving and providing topics of value to you, we kindly ask for your participation in our brief survey. Speak to representative for more information. You can make that request in your post-webinar survey. We look forward to seeing you at our next event. Thank you.

Very good. Thank you, everyone. Thanks for joining. Feel free to reach out. Bye-bye.