To succeed, broaden your horizons

By : Jim Pinto,
San Diego, CA.

When growth is elusive in traditional markets, it behooves good companies to look for expansion and growth in other similar markets. Industrial automation companies must extend their existing products, and develop new marketing and sales channels, to attract new "commercial" customers.

This article was published by:
Automation World, March 2004

A quick review of most automation and controls magazines makes it evident that the products and services advertised are mostly directed to the fragmented, yet fairly specialized, “industrial” automation markets. Traditionally, there have been three specialized segments:
  1. Discrete factory automation, focused on production lines, limit-switches and the like, mostly digital input/output;
  2. Continuous process automation, dealing with fluid flows, tank levels, temperature controls - analog measurement and control; and
  3. Batch controls - a blend of discrete and continuous, with a mix of discrete and continuous, digital and analog measurements - for example, in the pharmaceutical batch processes.
Historically, programmable logic controllers (PLCs) were digital products, used primarily with digital inputs; extensions to handle analog measurements and controls were added to satisfy specific needs. Distributed control systems (DCS) were targeted mainly at continuous processes - usually relatively large systems operating in a central control room. Batch controls tended to be a blend of both types of controls. With the advent of PC-based measurement and control, all three segments began to merge, and differentiation arose primarily from packaging to suit specific applications.

For these segmented markets, packaging is “industrial” and intended for use in relatively harsh factory and process environments, with wider temperature limits. Though the technology and designs are very similar, packaging brought a differentiated view of “industrial” versus “commercial” products. Also, commercial products are typically sold in much higher quantities, demanding lower pricing and profit margins. Further, the products and services are sold through entirely different sales and distribution channels.

Similar technologies, different markets

The basic technologies of industrial instrumentation and controls include measurement, display, recording, and control of a wide range of parameters-temperature, pressure, flow, speed, level, and so forth. Products include a wide variety of sensors, coupled to programmable logic controllers (PLCs), data acquisition systems, distributed controls, and software-embedded communications and networking, human-machine interfaces, and the like. This tremendous range of knowledge and experience can and should be applied to other markets that have similar requirements, but may not be considered traditional "industrial automation" applications.

One such growth arena is energy management. This market has a significant need for utilization of automation & control technologies and methodologies, yet has hitherto been considered a totally different market segment, because it is "commercial"

The largest companies in the industrial controls business - Emerson, Honeywell, Invensys, Johnson Controls - seem to have developed a clear separation of their “industrial” and “commercial” businesses, perhaps mainly because the sales and distribution channels are completely different. Interestingly, Honeywell’s “Home & Building Automation” business exceeds its Process Solutions business in size, growth and profitability.

Energy expenses can be minimized, comfort and safety improved

Based in Copley, Ohio, Novar Controls has developed a leading market position in the development and distribution of automated energy management products and services. Novar’s target markets include multi-site retail chains, quick service and casual dining restaurants, educational buildings, office complexes, hospitals, campuses, and multi-building complexes. Novar hardware and software technology compares with that of the leading industrial automation companies - networking, logging, display and analysis of multiple measurements in large commercial and retail buildings, comparable in size to any typical factory or process plant.

Commercial buildings generally do not operate economically, and building managers are usually left to themselves to resolve the problems. However, they are usually busy with the regular problems of satisfying customers, and energy is not managed for the best economic value. Good automated monitoring and control systems typically generate savings of 10% or more, while still retaining optimal comfort levels. Further, whole-building energy savings of 20% or more can be achieved through improved operation and maintenance practices.

Novar’s multi-site management systems are intended to work at the enterprise level, to support large numbers of installations with heavy data handling requirements. The applications are usually installed at the user’s headquarters, monitoring all remote sites via the Internet. Novar’s enterprise software family of applications extends beyond energy analysis, to include other business-critical requirements such as alarm handling, systems configuration, data collection and performance monitoring. These measurements can be extended to capture many different business processes to deliver new and advanced enterprise solutions.

Soft differentiation

The differentiation between "industrial" and "commercial" automation has caused many companies to segment their products, applications and sales channels, inhibiting expansion into adjacent markets that essentially utilize the same technologies and methodologies.

In my opinion, the differentiation is "soft". When growth is elusive in traditional industrial automation markets, it behooves good companies to look for expansion and growth in other similar markets. Industrial automation companies must extend their existing products, and develop new marketing and sales channels, to attract new "commercial" customers. Conversely, leaders in “commercial” markets may adapt their products and services to expand into "industrial" markets.

In the changing business environments of a new century, the companies that are able to broaden their horizons will succeed.

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Copyright 2003 : Jim Pinto, San Diego, CA, USA