Sector-specific services and the

Assembly Automation

ISSN: 0144-5154

Article publication date: 1 March 2000

Keywords

Citation

(2000), "Sector-specific services and the ", Assembly Automation, Vol. 20 No. 1. https://doi.org/10.1108/aa.2000.03320aab.003

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:

Emerald Group Publishing Limited

Copyright © 2000, MCB UP Limited


Sector-specific services and the

Sector-specific services and the "one-stop-shop" are the crucial next steps for automation manufacturers

Keywords: Automation, Product development, Manufacturers

Automation manufacturers are becoming more willing to bypass the intermediaries that often form a large percentage of their customer base. This is due to a growing belief that the greater the degree of end-user focus, the richer the rewards, according to new research from market analysis firm Datamonitor.

This trend is potentially leading to an ironic situation in the automation industry - while working to promote openness in automation and control, major automation companies are simultaneously trying to lock-in end-users by offering a one-stop-shop and solutions tailored to their specific industry needs.

Findings from Datamonitor's new report series, Opportunities in Vertical Automation Markets, which covers six major process and manufacturing industries across 24 countries, reveal that: challenges for automation providers include becoming a one-stop-shop while promoting the concept of openness.

The automation industry is in the midst of several interesting developments. As the requirement to provide open automation products increases, automation manufacturers are also aligning their businesses towards specific groups of end users. The potential advantage in bypassing the intermediaries that often form a large percentage of their customer base in order to increase the degree of end user focus is becoming more apparent. An ironic situation is in danger of forming. While the market at large expects the freedom of choice supposedly offered by the increase in openness, individual automation manufacturers are obliged by market forces such as consolidation and market maturity to maximise revenue per customer by becoming a one-stop-shop for all automation products.

The provision of specific business units that offer dedicated personnel and expertise to end-users is growing in importance - especially when considering that many companies have extensive numbers of automation and other relevant products. Provision of specific sectors of expertise simplifies the procurement process and provides end-users with a more accessible method of purchasing automation products.

Some automation companies have expertise polarised towards a specific end-user sector, and therefore do not strongly compete for business in other sectors. The companies have no need for specific units to supply services to the different end-user sectors. However, the major automation manufacturers do indeed serve as many end-user sectors as possible, and most have some infrastructure in place that caters for the differences in end-user requirements across sectors.

According to Datamonitor consultant Martin Atherton, "it is interesting to consider whether the move towards becoming a one-stop-shop for automation products goes against a widely-held belief of end-users that they will be able to pick and mix from all manufacturers once openness is fully implemented. However, at the same time as being obliged to support the development of multi-product integration, automation manufacturers may simply have no choice but to attempt to stop their clients buying from competitors for fear of losing business".

Further details from: Russ Milburn. Tel: +44 (0) 171 316 0001; Fax: +44 (0) 171 372 0130; E-mail: rmilburn@datamonitor.com; URL: www.datamonitor.com/in