2011 Process Level Sensing Report Demand-Side Insights
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During this QuickCast, VDC’s David Laing discusses some demand-side insights for the process level sensing solutions market.
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2011 Process Level Sensing Report Demand-Side Insights
- 1. Industrial Automation & Control Practice WEBCAST 2011 Process Level Sensing Report AUGUST 2011 Demand-Side Insights © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 2. Recording Available A full audio recording is available for download at: http://vdcresearch.com/market_research/industrial_automation/freeresearch.aspx © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 3. About Us About Us Market Intelligence for Technology Vendors & Investors Direct-Contact Primary Market Research Deeply Segmented Data Expert Insights Validated Results Custom Consulting Services for Your Most Critical Business Decisions Research-Based Consulting Transparent Tools & Methodology o Highly Customized Survey Guides & Output Templates o Sophisticated Market Estimate & Forecast Models o Detailed, Flexible Stakeholder Maps & Profiles o Industry Development Scenarios o Market Opportunity Fit Screening, Rating & Ranking © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 4. Our Core Coverage Areas AutoID & Transaction Automation Embedded Hardware & Systems Mobile & Wireless Industrial Automation & Control Embedded Software & Tools Emerging Technologies © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 5. Ways to Work With Us Our syndicated research is the basis for the many ways VDC can help you grow your business. We offer a wide variety of services designed to meet specific tactical and strategic decision support needs. All of our services are built on a foundation of highly skilled professionals applying robust methodologies to VDC’s large and continuously refreshed datasets. © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 6. Today’s Speaker David A. B. Laing, PMP Program Manager / Senior Analyst David is VDC’s program manager in the firm’s Industrial Automation & Controls research practice. David is responsible for supporting VDC’s market research and custom consulting initiatives relative to emerging global opportunities, regional growth strategies, and market intelligence for industrial automation and control, systems components, technologies, services, and related applications across multiple vertical markets. Recent publications include the 2009 Volume 3 report on Position Sensing and the 2010 - 11 volume report on Power Protection products. David accumulated over 30 years of Semiconductor industry experience working at Teradyne Inc. and its worldwide customers. David held multiple positions in support, engineering, IT and management including project and support product management. David was a key leader in Teradyne’s adoption and implementation of remote support technologies. David earned an MBA degree (Summa cum Laude) from the F. W. Olin Graduate School of Business at Babson College and an undergraduate degree in Electronic Systems Engineering Technology from Wentworth Institute. David is a certified Project Management Professional (PMP) through the Project Management Institute. For complimentary insights and marketing data: http://blog.vdcresearch.com/industrial_automation © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 7. The 2011 Process Level and ITG Report Uses Multiple Sources for a 3600 View Today’s Webcast will give you some highlights from the demand-side/channel research End-Users An extensive functional safety Supplier Community survey is employed to give the Regulatory, Channels, etc. demand side perspective. The Many suppliers engage survey set for this report set The project team in interviews / featured a diverse sample of engages with and conversations with the over 550 respondents researches regulatory VDC team, giving us a including End-Users, OEMs, agencies and complete supply-side Systems Integrators, and organizations, as well as perspective of the Consultants. channel partners and market. others. Surveys Interviews Surveys Research Other Industry Supplier Related Interviews Research © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 8. Beyond Price, Distinct Shifts in Valued Supplier Attributes are Being Seen 2011 Ranking in PL/ITG Survey The latest survey segmented between service types and timing in order to obtain more granularity Availability for Quick Delivery It is likely that many demand-side entities Ranked 4th in 2009 experienced a loss of more experienced Did response time suffer in personnel 2010 until now? At the same time, customers are likely to repair process level measurement equipment rather than replacing them Local / On-Site Support Only ~ 16% of survey respondents Not Ranked in 2009 described a need for under 4-week lead Why did this become important? time for a typical order. Will suppliers fill the gap? End Users indicate having delays in getting quotes from some suppliers in one case – 3 months!! Availability of Spares In other cases, the supporting manuals are Ranked # 7 in 2009 incomplete or confusing, which then During the downturn, it is likely requires the end user to seek customer that inventories became support tightened © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 9. There is a Significant Market Opportunity for Service Related Activities Categories of Process Level Spendings Avg % We asked survey respondents to break down all of their process level spending by category 2.5% 2.5% Surprisingly, we found that only ~1/2 was for 4.7% the actual hardware 4.9% The remainder is generally for service related activities 8.7% The survey respondents showed that they will be looking for external sources for these services 50.8% 10.8% Top 3 Externally Provided Services Cited Custom Engineering 15.2% Integration Testing Hardware Installation Configuration Calibration/Maintenance Programming/software Development Consulting/Specification Services Networking/connections/wiring 0% 50% Compliance with Regulations Verification % of Resp © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 10. Recent Events Likely Changed The Vertical Markets – Here’s Why - Part 1 2011 Ranking in PL/ITG Survey There have been many recent incidents involving food quality and contamination. This has also happened in the Bio-Tech Food &Beverage sector. This will drive increased sensing for wash-down, processing, and sanitation. Ranked 4th in 2011 There will likely be changes in the Not in Top 5 in 2009 pharmaceutical industry as a result of the unprecedented shortages. In some cases, governments will be forced to either Pharmaceutical / manufacture themselves, or give Bio-Tech incentives to do so. In either case there will be drive for new, more cost efficient/clean Ranked #2 in 2009 facilities. Stayed the same in Within all three of these segments, but 2011 particularly chemical, one overall concern with respect to process level sensors is Chemical about durability. We are seeing some cases where end users, distribution entities, and Ranked # 1 in 2009 some suppliers are adding value to “off the Stayed the Same in shelf” sensors in order to make them more 2011 durable when used in some challenging applications. © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 11. Recent Events Likely Changed The Vertical Markets – Here’s Why - Part 2 2011 Ranking in PL/ITG Survey Japan/Germany and possibly other countries will be phasing out nuclear power and replacement, conventionally fueled generating facilities will be needed. The remaining installed base of aging nuclear Electric Power facilities will need additional / replacement N- Stamp and other level sensors to monitor cooling Ranked 4th in 2011 fluids and other mission critical materials. Not in Top 5 in 2009 Increases in environmental concerns will further increase the need for water/wastewater capability which, of course, requires significant level sensor usage. Water / As governments seek to stimulate the Wastewater economy, they have to select projects that have Ranked #2 in 2009 wide support as calls for decreased spending are resonating. Environmental projects are hard to Stayed the same in argue with. 2011 Recent changes in the hydrological cycle and subsequent fresh water shortages will drive the need for water desalinization and/or purification. Widespread hydrological “fracking” requires that the water be cleaned afterwards. © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 12. Summary of Process Level Demand Side Market Highlights Our recent demand-side survey shows likely shifts in markets as well as preferences Suppliers will be needing to provide advanced features as well as improved durability Recent environmental and safety events will further drive changes Our supplier interviews and demand-side surveys are showing a clear trend that customers will need more support in many phases of the product planning, purchase, installation and use cycle. Cutbacks in the product channel through inventory reductions and phase-out of older products are presenting opportunities for suppliers that demonstrate better responsiveness from both a quotation and delivery perspective. © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
- 13. Thank You for Attending this VDC Webcast For more information please contact: Bob Perugini – Account Director bperugini@vdcresearch.com | 508.653.9000 x144 David Laing, PMP – Program Manager, Senior Analyst dlaing@vdcresearch.com | 508.653.9000 x146 Chris Rezendes – Executive Vice President cjr@vdcresearch.com | 508.653.9000 x120 For complimentary insights and marketing data: http://blog.vdcresearch.com/industrial_automation © 2011 VDC Research Webcast Industrial Automation & Control vdcresearch.com
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- Intrinsically Safe Products are still seeing uneven use and growth with the European Market having the greatest penetration and stable growth. In that market, as well as the Americas and APAC, growth depends not only on the economy but overcoming the “other” alternatives to Intrinsically safe. In some respects the cost of intrinsically safe, is not only the components that are often more expensive but the fact that the networks are limited in length and the number of field devices that can be used. This may be where the wireless technology may be taking hold particularly as the market begins to trust the reliability and as the costs come down. Intrinsically Safe can be a significant value add in places where the standard sensors are becoming commodities and it is difficult to maintain pricing and margins. VDC believes that the significant drop in the preference for Explosion / flame proof enclosures is due to the human factors where the units must be properly maintained after service. Purging and encapsulation are also service issues where the units have to be removed and serviced or even discarded if they fail. Last bullet … they want/ need a clean slate for performance, cost and liability factors …
- LOTO, generally involves the complete powering off of the machine, and locking the ability to power it up. It relies on employees to follow procedures each and every time. This is very impractical as some machines require a long warm-up, set-up and calibration before they can be placed back into service. Machine Automatic safeguarding has generally driven an increase in machine costs so it has been a hard sell. Insurance companies are now taking notice and making incentives that encourage M-S. Governments in many cases, are the insurers of last resorts for those injured in the workplace and therefor. The anticipated deadline for the Euro. Commission moving from EN 954 to EN ISO 13849-1 or EN/IEC 62061 to access .
- Intrinsically Safe Products are still seeing uneven use and growth with the European Market having the greatest penetration and stable growth. In that market, as well as the Americas and APAC, growth depends not only on the economy but overcoming the “other” alternatives to Intrinsically safe. In some respects the cost of intrinsically safe, is not only the components that are often more expensive but the fact that the networks are limited in length and the number of field devices that can be used. This may be where the wireless technology may be taking hold particularly as the market begins to trust the reliability and as the costs come down. Intrinsically Safe can be a significant value add in places where the standard sensors are becoming commodities and it is difficult to maintain pricing and margins. VDC believes that the significant drop in the preference for Explosion / flame proof enclosures is due to the human factors where the units must be properly maintained after service. Purging and encapsulation are also service issues where the units have to be removed and serviced or even discarded if they fail. Last bullet … they want/ need a clean slate for performance, cost and liability factors …
- Intrinsically Safe Products are still seeing uneven use and growth with the European Market having the greatest penetration and stable growth. In that market, as well as the Americas and APAC, growth depends not only on the economy but overcoming the “other” alternatives to Intrinsically safe. In some respects the cost of intrinsically safe, is not only the components that are often more expensive but the fact that the networks are limited in length and the number of field devices that can be used. This may be where the wireless technology may be taking hold particularly as the market begins to trust the reliability and as the costs come down. Intrinsically Safe can be a significant value add in places where the standard sensors are becoming commodities and it is difficult to maintain pricing and margins. VDC believes that the significant drop in the preference for Explosion / flame proof enclosures is due to the human factors where the units must be properly maintained after service. Purging and encapsulation are also service issues where the units have to be removed and serviced or even discarded if they fail. Last bullet … they want/ need a clean slate for performance, cost and liability factors …
- The outlook for the overall industrial product markets is quite good across a broad and expanding applications base of customers worldwide, but particularly in BRIC and semi-industrial but still developing countries. As we note, wireless products are seeing increased adoption as they allow more coverage without needing the actual wiring which can be expensive and/or problematic in itself. We feel that this is especially true in new facilities or, in existing facilities where coverage is being augmented.In Machine Safety, the market is being driven not only by economic recovery and emerging markets but a drive to improve safety especially in countries that have a growing concern about social responsibility as well as the overall fiscal concernsIt has been noted that BP had been driving a system of employee based safety initiatives as opposed to automated systems. This placates insurers and regulators up until the point where something catastrophic happens. In the wake of the recent Gulf of Mexico mishap, there will likely be significant changes in process safety at BP and other industry participants.Process Safety Decisions need to be made in fractions of a second – Not by Corporate Management!!In closing we see clear indications of “Brain Drain” where many of the perspective clients’ experienced functional safety experts have been lost over the last few years and they will be increasingly looking for the suppliers to fill the gap.