Pumps & Systems, January 2008
Critical Issues
In the OEM marketplace in particular, we're really seeing three major issues: globalization, standards and cost sensitivity.
Many OEMs can no longer survive by delivering machines to a single geographic market-users' cost, economies of scale and global strategies don't allow it. If you're a major supplier of water distribution equipment for the wastewater industry, there's a good chance you could be servicing a plant in a country other than your home market. That creates some significant challenges for the machine builder in terms of meeting local electrical standards, spare parts availability and the ability to provide high levels of service and support.
Globalization is closely tied to another issue we are seeing in the OEM marketplace: a growing emphasis on standards. Machine builders are under increasing pressure to deliver complete solutions that help customers manage industry regulatory requirements and contain safety risks by design. The irony is that these standards can vary from industry to industry, customer to customer, and geography to geography.
We're also seeing more cost sensitivity driven by increasing competition. We estimate purchase price is only 40 percent of the average total machine ownership cost, so many OEMs are investing more in the control portion of a machine because that allows them to demonstrate value through improved engineering, maintenance, training, disposal, parts and service, installation and downtime. While the competition focuses on one very narrow segment-purchase price-successful OEMs offer value that registers with the customer long after the sale is closed.
Current Trends
A key focus area facing both OEMs and users is information management. It's more than sending data back and forth; it's taking that data, which is generated in huge volumes in the manufacturing environment, and turning it into useful information for better decision making.
Technologies Offering the Most Competitive Impact
We're developing information technologies that help convert data to knowledge so that operators can easily make changes that not only affect performance, but also predict failure. A control platform and integrated production and performance software suite together form an attractive proposition for OEMs who want to convert manufacturing data into valuable business information.
Unlike conventional automation architectures, this integrated architecture provides fully integrated, scalable solutions for the full range of control and information disciplines, providing our machine-builder customers with the insight and performance they need to optimize production, respond quickly to user demands and reduce costs.
Being "fully" integrated means that a control platform uses a single programming and configuration software package, so machine builders can scale up or down whenever they need to. You also don't need separate controllers for disciplines like motion and sequential control. This single common environment provides better synchronization and ease of operation.
In addition, OEMs are being asked to tie their machines closer to upstream and downstream operations, as well as enterprise-wide information systems. The information-enabling capabilities of integrated architecture are ideal for facilitating this horizontal and vertical convergence.