Sensors sensing growth?


We have talked about Promising signs in process automation market recently, which had an American flavour,  and we also shared an article which had a British viewpoint on recovery, Manufacturing recovery firmly on track!
Here Tony Ingham of Sensor Technology answers the question Could the sensors sector be a microcosm of the whole national economy? He certainly thinks so. Here he looks at what it will take to run a small technology company in the second decade of the millennium and suggests parallels with the wider world. Yes he is talking about the British experience but surely there are also lessons to be learned in other economies large and small.

Sensing Growth Opportunities
By Tony Ingham

Tony Ingham

You might think it perverse to say something positive about the recent recession, but it had a characteristic that I have rarely seen before – in bad times or good. It helped a lot of people realise what really makes economies tick.

In previous recessions, most peoples’ reaction was to work harder on winning sales, i.e. keep doing what they had been doing and hope for an upturn. This time though, people saw the weaknesses of the whole financial sector and began to analyse how and why economies work.

There has been a realisation that there is a massive difference between fast paper profits and fundamental wealth creation. The engine room of the economy is not the City of London, it is the primary industries, such as manufacturing and agriculture. These create thousands of jobs up and down the country, rather than concentrating so much wealth into the hands of a few lucky individuals that they become divorced from economic reality.

In fact, manufacturing, engineering, science and technology have all fared relatively well over the last couple of years – most of the pain was felt in other sectors. So it is not that surprising that manufacturing is currently our strongest sector.

But the important point is that it must remain so. Manufacturing can be wonderfully profitable if managed correctly over the whole term of its products’ lifecycles. It creates masses of jobs at all levels. It creates yet more jobs in the supporting sectors such as research, development, engineering and design. Its products are easily exportable, so will suck overseas revenues into our coffers. It is also very stable; the need for capital production equipment, highly skilled staff and a sophisticated supporting infrastructure makes it relatively difficult to relocate once it is established.

At the moment, the government is full of praise for manufacturing, but this simply is not enough. This and future governments must support manufacturing and the other technical industries. It needs to develop policies that encourage and promote manufacturing, help exporters, support enterprise and finance R&D; that generate enough trained scientists, engineers, technicians and designers, that improve the social status of those that serve their country via the technology industries. It’s a big ask, but the Chinese and Indians are doing it; the Japanese and Germans did it 50 years ago and the Americans did it 50 years before them.

So where does the sensor sector fit into all this? Well sensors are now widely used across so many areas that they are a bell-weather for the whole economy.

Overall, the sensor sector weathered the downturn well. Early in the recession many car makers and other major industries shut down production for 3 months to reduce stock. But they also took the opportunity to invest in new manufacturing systems, including sensors. Furthermore, sensors are wonderfully exportable, so manufacturers often remained busy servicing clients abroad.  And while the recession was bad, the sectors that suffered the most – finance, banking etc – were not major direct purchasers of sensors.

The UK sensors sector is currently underdeveloped, so offers many opportunities for building strong manufacturing companies that could easily become world leaders and major exporters.

The sector got going on a worldwide basis in the late-1970s or early 1980s, when traditional craft-based instrument making was giving way to sophisticated manufacture of high tech sensors. Unfortunately, at this time manufacturing was definitely not in favour in the UK. Instead, the government of the day was happily clearing away what it saw as union-infested, decrepit,  smokestack industries, so that new sunrise industries could take root (in a free market, without government support). So while the UK got call centres and pension advisors, sensor manufacturing flourished in countries where capital enterprise was supported, where labour forces did not have a black name, where a growing manufacturing sector provided a domestic market.

I must at this point say that there were exceptions, notably our own company Sensor Technology which researches, designs, develops, and manufactures sensors in the centre of England. It is a self-evident truth that what we have achieved could be replicated by other sensor manufacturers, especially if general UK manufacturing grows.

There is a virtuous circle to be developed. The more sensors that are used, the greater the manufacturing volumes; this lowers unit prices and also allows investment in automated production and improved quality systems, which encourages yet more usage.

The driving forces for the development of sensor technology include miniaturisation, robust solid state controllers replacing delicate mechanisms, wireless solutions, increasing intelligence, improved connectivity and ‘open’ communications. New drivers will also emerge, and new markets will open up.

Since Sensor Technology first set out its stall, cars have gone from having a handful of sensors to literally thousands, factories have become automated, soaking up sensors, entirely new markets have opened up such as home electronics, mobile devices, medical equipment, CCTV and surveillance, etc. Future growth will be even greater, and it is there for the taking – hopefully by a strong UK sensor manufacturing industry!

Promising signs in process automation market


Promising signs point toward a continuing recovery for process automation market during this year and beyond

Automation expenditures for process industriesPromising signs continue to point toward a sustained process automation market recovery to continue through 2011. During 2010, the automation market was at the point where suppliers serving the installed base with MRO activities fared better than those relying heavily on project business. Suppliers ate through a huge chunk of their project backlog and finished product inventory while new projects were postponed or canceled during the recession. Also, shipments for many new project orders received during 2010 were delayed until 2011.

ARC expects the tepid growth seen during 2010 to accelerate in 2011, but remains skeptical about the process automation market reaching pre-recession growth levels. Historically, the process automation market has been characterized by slow yet steady growth, and we expect the market will return to this pattern with an overall CAGR of roughly 6 percent over the five-year period of 2009-2014. “Suppliers with quick access to raw materials and components and an efficient supply chain to enable quick ramp-up of production and inventory will be in the best position to partici-pate in the increase in demand,” according to Senior Analyst David Clayton, the principle author of ARC’s Automation Expenditures for Process Industries Worldwide Outlook .

Global Manufacturing PMIs Show Expansion
Purchasing managers’ indexes (PMIs) provide a good barometer of overall health in the manufacturing and automation markets. PMIs typically in-clude data, such as production level, new orders, supplier deliveries, inventories, and employment level. A PMI reading below 50 indicates a general contraction in the manufacturing economy being measured while any reading over 50 indicates expansion. The J.P. Morgan global manufacturing PMI edged up to 57.8 from 57.1 in January, marking the second-fastest reading ever in the global gauge, which is based on other surveys covering over 7,500 purchasing managers in nearly 30 countries. Output and new order components accelerated, and the input price gauge rose to 76.7 from 73.3 in January. The US ISM represents 28.6 percent of the gauge, followed by Japan at 12.3 percent, China at 7.4 percent, Germany at 5 per-cent and the UK at 4.2 percent.

Plan for Increasing Demand
Most automation suppliers followed a conservative strategy of cutting cost and inventories to match declining demand during the lengthy economic slowdown. Suppliers accustomed to taking risks should put themselves in a position to take advantage of growth opportunities that are taking root in developing countries. Sluggish demand has hurt the bottom lines of sub-suppliers, making them more open to negotiate on both prices and terms.

As the economy recovers, automation suppliers must make plans to make the necessary changes and emerge as stronger organizations that are able to meet renewed demand. However, this confidence will only come if there is a clear understanding in their organizations about the long-term trends that drive demand for automation and develop strategies to satisfy those demands.

Some of these long-term trends include:
• Emerging markets will need to expand their power grids for years to come
• Mature economies in North America and Europe will have to renew their aging infrastructures
• Energy efficiency initiatives will be implemented across all areas of industrial organizations
• Industry must efficiently comply with regulatory agencies without losing productivity
• Most countries must tackle climate change before the emissions from the growing use of fossil fuels stifles progress, an issue that is plaguing China
• The intense competition of global markets will continue to drive industry to become more efficient
• Many of the easy gains have already been realised by industry, so now they will look for new ways to raise productivity
• Organizations will require even more information to make optimised business decisions
• Sustainability will be part of all discussions and implementations
• EH&S requirements will drive new automation investments beyond productivity improvements
• Discovery and production of new energy sources, such as shale gas, geothermal, and clean coal

While one can list many more long-term trends, the message is that new strategies must be formed based on these emerging trends, which will im-pact automation suppliers in a variety of ways, from new product development programs, to establishing added service capabilities, to making regional investments. Satisfying these long-term trends will require producing automation that provides manufacturers with improved productivity, energy efficiencies, optimised processes, real-time data and asset management programs, along with personnel that have a profound under-standing of these industrial processes.

Suppliers should limit their exposure and begin identifying preferred sub-suppliers and define a product mix that will be most in demand. Suppliers should plan appropriate inventory based on production and sourcing lead times and demand forecast. The most important step is to carefully analyse end user purchasing history and projected demand. When combined with supply chain and logistics efficiency, it could mean the difference between success and failure. Miscalculations in these areas will hurt profitability; getting it right will allow suppliers to leapfrog the competition.

• See also Manufacturing recovery firmly on track says CBI for a British point-of-view in DPA on the Net!

Moderate growth for field process instruments


The worldwide market for Process  Field Instruments will grow at an average annual rate of about 5  percent from 2010 through 2015 according to the most recent forecast update of Process Instrumentation and Automation markets conducted by  the Global Foresight Group™.

Process field instruments include all key pressure, temperature, flow  and level instruments.

In 2010, North America accounted for  approximately 30 percent of the total market demand for process field instruments, while Europe (EU) was 23 percent.  BRIC countries (Brazil, Russia, India and China) made up another 19 percent of the
demand.  All other countries provided the remainder.

BRIC countries will provide the highest growth rates for these  instruments in the forecast period.  This will continue the decline  of the North American and European market shares.

FDT from the Far East to the Mid West #PAuto


Hot on the heels of the news that Emerson Process Management had joined FDT come three releases in quick succession announcing developements in China, co-operation with CC-link and a new educational member from Ohio in America’s Mid West. Here are the details.

FDT in China
The FDT Group AISBL has formed a new China FDT Association with ten leading Process and Factory Automation supplier members headquartered in China.

“The China automation market has mirrored  the high growth of the China domestic market. The FDT Group has supported China activities indirectly for several years,  however, recent requests by indigenous automation companies to increase the China FDT activities lead to the formation of the China FDT Association,” states Glenn Schulz, Managing Director of the international FDT Group. “This new FDT association has been structured to allow local control and focus of FDT activities in China.”

The ten China companies joining the FDT Group include: Beijing Automation Technical Research Institute, Beijing Hollysys Co., Ltd, Chongqing Chuanyi Automation Co., Ltd, ChongQing YuTong System and Software Co., Ltd, Microcyber Inc., Shanghai Automation Instrumentation Co., Ltd, Shanghai Chenzhu Instrument Co., Ltd, Shenzhen Maxonic  Automation  Control  Co. Ltd, and SUPCON Group Co., Ltd.

“We are very pleased with the focus and dedication of our new China FDT Association. Our new chairman of the China FDT Association Board, Mr. Ken Qui of Endress +HauserChina, has set out an ambitious schedule for the new organization,” states Mr. Michael Sinz, Director of marketing for FDT in China. “I extend a special thanks to our sponsoring member companies: Flowserve, Invensys, Rockwell Automation, Schneider Electric, and Yokogawa as well as ITEI and Southwest University for their guidance in the formation of our new FDT association.”

FDT Group in China

The members of the Board of Directors of the China FDT Association are: Mr. Ken Qui of Endress+Hauser, Mr. Scott Wilkerson of Flowserve, Mr. Shripad Lale of Invensys, Mr. Ou Yang Jin Song of ITEI, Mr. Hua Rong of Rockwell, Mr. Wang Yong of Schneider Electric, Mr. Chen Peng of Yokogawa, and Mr. Glenn Schulz of FDT Group.

FDT Group and CC-Link Announce Cooperation Agreement
The CC-Link Partner Association (CLPA) has signed a cooperation agreement with the FDT Group to promote the use of the FDT as an international standard.  Under the agreement CLPA will support the development of an annex of the protocol for the FDT standard to support the CC-Link family of networks including its CC-Link IE Field Gigabit Industrial Ethernet.

CLPA’s participation is significant for the growth of FDT technology because of its pre-eminence in the Asian markets. Later this month (November 2010) FDT will make a presentation to a selected audience of members, users and the press at the CLPA 10th anniversary celebrations in Tokyo.

FDT standardizes the communication and configuration interface between all field devices and host systems. It provides a common environment for accessing the devices’ most sophisticated features. Any device can be configured, operated, and maintained over the CC-Link networks through the standardized user interface – regardless of supplier or type.

Steve Jones, European General Manager of the CLPA says,  “We find increasingly that users are demanding common tools to enable them to access and integrate intelligent field devices.  Implementing the common environment provided by FDT provides this, but also gives us the potential to add new functionality for users of CC-Link networks.”

Glenn Schulz, Managing Director of the FDT Group states, ” We are pleased to have formalized this excellent working relationship with  CLPA.  Their broad acceptance in the automation market place is a compliment to the core goals and objectives of the FDT standard.”

In addition to CC-Link, FDT supports more than 13 network protocols including Hart, Profibus, Foundation Fieldbus, DeviceNet, Interbus, AS-Interface, and others.

Lorain County Community College Joins the FDT Group
The FDT Group announces that Lorain County Community College (LCCC) is its newest member.  LCCC is located in the greater Cleveland, (OH US) metropolitan area and focuses on workforce development providing education and training in the latest technologies. “We are thrilled to bring on a new educational member,” says Glenn Schulz, Managing Director of the FDT Group.  “Institutions such as LCCC provide the educational backbone for the automation market keeping the workforce technically advanced for this growing industry.”

LCCC is targeted as the first FDT Certification Testing Site in the Americas with accreditation to perform DTM certifications expected before the end of the year.   The new certification site is supported by a $5.5 million grant from the Wright Center for Sensor Systems Engineering (WCSSE) supporting economic development objectives allowing for the transition from older industries to newer, high-growth industrial technology markets like sensor technology.

This new center will support the global automation market by providing consultancy services in the areas of DTM analysis, testing of communication, gateway and device DTMs during development, and final DTM certification testing to ensure conformance to the FDT specification.  In addition to these services, LCCC will host an in-house integration evaluation and testing lab providing a hands-on facility for users to validate benefits of FDT Technology, implementing asset management strategies based on FDT Technology.

“We are excited to join forces with the FDT Group and their international based membership to build on business opportunities needed to ensure economic and workforce development for the manufacturing and technology industries in the greater Lorain County region,” said Duncan Estep, Director, FDT Technology Certification Testing Center –Americas.  LCCC is preparing for their accreditation audit to occur before year end.

Patent case won in China


HARTING takes action against Chinese patent infringers

Patent infringements and plagiarism represent major problems in China, especially for the manufacturers of brand products. The Harting Technology Group has taken resolute action against a Chinese company that had copied its connectors. Following in-depth investigations, the Espelkamp (Germany) headquartered company took recourse to the Shanghai Second Intermediate Court and initiated legal proceedings for damage and injunction in connection with patent infringements.

After proceedings of only four months the Shanghai court passed a judgment confirming the patent infringement and sentencing the respective manufacturer to discontinue the production and sales of the counterfeit products, as well as imposing the payment of damages.

The court judgment is an important positive signal for Harting, as this action not only weakens the market position of the opponent, but also issues a warning to current and future patent infringers.

Harting is a globally active company and holds a particularly strong position on Asian markets. The Technology Group has filed patents in China since the beginning of the nineties, although their actual enforceability has been doubtful to date. The outcome of the recent proceedings demonstrates that intellectual property is also being protected in China in the meantime. In taking resolute action, they have clearly demonstrated that the company will assert its intellectual property rights internationally and will not hesitate to take recourse to all respective legal measures – now and in future.

Market report: HMI software & services


HMI software & services market driven by services, security and “ergonometrics”

Strong growth is expected to resume during the latter part of this five-year forecast period!

The rapidly growing market for HMI services will be driven by the end users’ and OEMs’ needs for additional supplier-provided technical expertise to support HMI software and systems, as end users’ and OEMs’ will not fully replace the internal support personnel lost during this past recession. As a result, the HMI software and services market is in a period of recovery, with the services portion expected to grow at a higher rate than the total market, according to a new ARC Advisory Group study.

The weakness in the global economy had a major impact on the worldwide HMI software and services market. However, stronger growth is expected to resume during the latter part of the five-year forecast period, as users replace HMI software based on older operating systems with new software packages based on operating systems designed with security in mind. “Security issues presented by older operating systems will drive upgrades from legacy HMI software to the latest HMI platforms. The security issue, combined with the greater use of more powerful, 64-bit microprocessors, will shift users from HMI solutions based on Windows XP or Server 2003 platforms to those based on Windows 7 or Server 2008.” according to Craig Resnick, Research Director,  the principal author of ARC’s “Human Machine Interface Software and Services Worldwide Outlook”.

Building Automation Solutions Achieve Rapid Growth
HMI software solutions that focused on the building automation industry and other non-manufacturing applications experienced the most rapid growth. These HMI software solutions were applied in either off-the-shelf or embedded forms and were accompanied by a full range of HMI services. Off-the-shelf HMI software products are largely replacing proprietary, device-specific solutions that often lack the full feature set and adherence to industry standards found in the latest HMI software solutions. In the traditional HMI software markets, growth is accelerating in the rapidly expanding process and infrastructure industries such as oil & gas, water & waste, electric power, food & beverage, and mining & metals.

Increased “Ergonometrics” Provides “Fourth Dimension”
Maximizing operator effectiveness is essential to minimize the risks of accidents, eliminate unscheduled downtime, and maximize production quality. This requires deploying the latest HMI software packages designed for “Ergonometrics,” where increased ergonomics help increase KPI and metric results. These offer the best resolution to support 3D solutions and visualization based on technologies such as Microsoft Silverlight. Integrating real-time live video into HMI software tools provide another excellent opportunity to maximize operator effectiveness. Live video provides a “fourth dimension” for intelligent visualization and control solutions.

Asia Pacific and Latin America Lead Market Growth
The Asia Pacific and Latin American HMI software and services markets will be the fastest growing regions. North America and EMEA will grow at a considerably slower rate. ARC believes that the slower forecasted growth in North America and EMEA is because a significant amount of HMI software has already been adopted in these mature markets. Greenfield and expansions in process industries, such as chemical, electric power, mining & metals, oil & gas, pulp & paper, and refining, as well as growth in the discrete industries in China and India, are helping to drive the HMI software and services markets in Asia Pacific and Latin America.

Technical possibilities of PC fuel market


The market for Industrial PCs is driven by an increasing rate of technological advancements in hardware and software according to a study released recently by ARC.  This includes the Atom processor, increased computing power, increased ruggedness, and also failsafe industrial PCs.

Report author Automation Analyst Florian Güldner

The market had enjoyed high growth rates until the economic crisis. The industrial PC market structure is fragmented, with no dominant player on a regional or global level.  While industrial PC technology itself has matured, new applications and requirements will enable differentiation through hardware and software.

“In 2009, the market dropped by 19 percent.  Even though the recovery will start quickly, the level of the boom year 2008 will not be reached again until 2012.  A major factor dampening the recovery is the constant drop in prices that is driven by user demand and a drop in intermediate good prices,”
according to Analyst Florian Güldner, the principal author of ARC’s “Industrial PCs Worldwide Outlook

Industrial PC Market Will Remain Competitive and Fragmented
The market for industrial PCs remains fragmented, the companies above 2% market share represent only 62% of the market.  In addition to industrial PC product specialists such as Stahl HMI, the market includes focused automation suppliers like Phoenix Contact, full line automation suppliers like Siemens and Rockwell Automation, and PC-based automation suppliers like Beckhoff and B&R.  Furthermore, PC specialists like Advantech and Kontron plus hundreds of Taiwanese companies supply industrial PC products either directly to the market or to other industrial PC suppliers.
One of the most important topics discussed in the market is the build vs. buy decision.  Depth of production varies greatly between suppliers.  Many companies use boards from Taiwan in their industrial PCs or brand label industrial PCs.

The Atom Processer Will Boost Industrial PC Business
Various trends within the industrial PC market will affect future growth but Intel’s Atom processor will have the most influence.  The Atom processor provides up to 2 GHz with low thermal design power.  This offers various possibilities to end users and machine builders.  First, the low-cost, low-power Atom enables low-CPU power industrial PCs at a low price and with low energy consumption and low heat.  Size-independent computing power also makes new form factors possible such as flatter panel PCs that are more easily integrated into machines and small wide screen panel PCs.

Asian Markets Are the Most Vibrant Suppliers and Users
Asia has its own dynamics in investment climate and in industrial PC sup-ply and demand.  In Asia’s emerging markets, Taiwanese industrial PC suppliers dominate this price-driven market, which is slowing sharply along with the global economy.  Taiwan hosts a number of different com-panies, which range from component-driven companies that are moving up the supply chain, to established automation suppliers.  ARC believes that China and India will not only demand more automation equipment as wages rise, but will also shift towards more sophisticated systems with greater capabilities for achieving international quality standards.