I thought you might enjoy a summary of an article that was published to celebrate the 25th anniversary of the Canadian magazine, Manufacturing Automation.
When Manufacturing Automation started a quarter century ago, industrial automation was in its heyday. Business was booming and the annual ISA show was a worldwide attraction for the instrumentation, controls and automation industry – with attendance in the tens of thousands. Today, by contrast, the automation business in the US is relatively stagnant and the annual ISA show has shrunk to a fraction of its former size; last year, it was just a technical conference.
After a couple of years of recession, the automation majors have returned to profitability with some growth, but they remain cautious in an uncertain financial environment.
Where will the industry be tomorrow? Let us review and prognosticate.
Since automation is such a fragmented business, all of the larger (multibillion-dollar) companies are mostly a conglomeration of products and services; each product segment generates a relatively small volume, but lumped together they form sizable businesses.
There are few companies that get beyond $50-100 million before they are sold to a larger conglomerate. There are less than a handful of companies that started in the past 25 years that still survive as independents, mostly in the $30-50 million range of annual revenues.
It may be useful to end this rear-view-mirror appraisal with a glimpse towards what automation will be like in the next quarter century.
Today, automation growth is occurring primarily in international markets where new factories and plants are being built. In a tough, global environment, organic growth will not come easily, and the current crop of Top-10 automation majors will shrink by acquisitions and mergers. As China and India advance, expect one or both countries to make major automation acquisitions to enter the US and European markets.
Today’s factories and process plants are still a mess of conventional wiring, so it is an easy extrapolation to forecast the continued growth of industrial wireless. The inflection point will arrive when one of the automation majors recognises that the high gross margins of conventional product pricing are producing only incremental revenues and profit growth. The companies that can yield low-cost industrial wireless will be rewarded with significant growth surges.
Today’s new products and services produce relatively small productivity gains by comparison and, therefore, produce only incremental growth. Substantial productivity increase with resultant revenue growth is overdue in the automation arena – look for it to break through in the next decade and quarter century.
Who knows – the new growth may come from completely new directions, such as complex-adaptive-systems, bio-chemical electronics or tiny nanotechnology sensors.
Happily, there are startups and visionaries who recognise the possibilities – and they will become the new leaders of tomorrow.
iPads in industrial automation
Over the past couple of years since I got my first iPad, I have become very accustomed to using it for a variety of different things. I read all my magazines – Time, Economist, Wired and others – on the iPad. They are available at least a couple of days before they arrive by mail. It seems like waste to get the snail-mail edition.
When I travel, I do not lug around my laptop any more – just my iPad. Most hotels and airports have wireless and it is easy to connect to check e-mail and browse the web. When I am on long flights, I read magazines, or play any one of the iPad games, or even watch a movie.
I check my bank statements on iPad, look for a choice of flights, book and check flight status, watch movies, or any one of the many TV channels – all from my couch, or while I am still in bed in the morning.
How about the iPad in business, and more specifically the industrial automation business? It turns out that there are all kinds of automation uses and apps that are starting to emerge for this handy tablet.
Real automation-world applications for tablet-PCs include:
* Data monitoring on a tablet PC to view scada system info for monitoring equipment and system performance as well as decision-making.
* Accessing automated work-order systems so that operators can scan to access bills of material for an order in process, or access maintenance procedures for particular equipment.
* Have the tablet PC function as a portable human machine interface to operate terminal services applications at multiple machines throughout a facility.
Jim Pinto is an industry analyst and commentator, writer, technology futurist and angel investor. His popular e-mail newsletter, JimPinto.com eNews, is widely read (with direct circulation of about 7000 and web-readership of two to three times that number). His areas of interest are technology futures, marketing and business strategies for a fast-changing environment, and industrial automation with a slant towards technology trends.
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