It's good to be big because there are some huge bones that need chewing, long roads to run, and problems to be solved. Just as the largest oil tankers, container ships and offshore platforms are better at smoothing out the ride on stormy seas, the Top 50 global and North American process control and automation suppliers are better at weathering economic upheavals and increasingly volatile markets, and responding to accelerating and multiplying technological innovations.
Though there's always some minor jockeying based on year-to-year sales, most of the Top 50 suppliers ranked by ARC Advisory Group confirm their preeminent status by maintaining their overall positions each year, while still achieving successful and steady revenue sales growth both in North America and worldwide.
In fact, based on their sales revenues in 2013, Vega emerged as the only new member of the Global Top 50 for this year, and Krohne, Pentair and Harting were the three new members of the North American Top 50. Likewise, the collective sales of the Global Top 50 increased by more than 4.8% from almost $102.4 billion in 2011 to more than $107.3 billion in 2013, while sales by the North American Top 50 swelled by more than 15.6% from almost $24.4 billion in 2011 to close to $28.2 billion in 2013. As usual, these kinds of results are easier said than done.
Even when the news is positive—exemplified by ongoing U.S. and global economic recoveries or hydraulic fracturing aiding energy independence—major economic and technological shifts can create challenges and stress levels that it seems only the largest, multi-skilled organizations can handle. Shifting liquid natural gas (LNG) facilities from import to export is a hugely complex job, right? Well, so is ramping up tracking and tracing for pharmaceutical, food and beverage products from raw materials to consumers to meet new regulations and demands; or using big data in mines to direct autonomous drilling and transport vehicles; or fracking without damaging groundwater aquifers and shifting from trucks to railroads to pipelines to transport oil and gas from new sources.
The difficulty of these epic projects is compounded by the fact that refineries, process plants, transportation networks and other infrastructures take years to build, while market conditions and requirements seem to emerge or dry up in months if not weeks. For example, during recent debates on the Keystone XL pipeline, U.S. gas prices dropped back to averages of $3 per gallon from the $4 per gallon that made scrubbing Canada's oil sands profitable, so how long will the pipeline extension and all those plays and supporting controls in Alberta remain economically viable? How can necessarily slow-to-deploy process applications hope to keep up with fast-changing opportunities and markets?
Size in the form of tens of thousands of employees and partners in dozens of not a hundred countries can help, of course, but only if they're all well-connected and nimble enough to use their early intelligence effectively. Today, this knowledge is all under the cloud-enabled, big data, Internet of Things (IoT) and smart-industry umbrella, and is another skill at which many of the Top 50 excel. However, even when they find a capability they can't develop organically, they usually have the resources to acquire the know-how and people they need to plug the holes in any niches in they require.
Views from the Top
How do you get nimble? Hire a good leader. The ability to bring resources and people together to solve users' problems and partner with them to complete big projects is what the Top 50's president and CEOs do best, and they're looking at North America and IoT too.
There's strife around the world, but the North American market has been a stabilizing force, according to Steve Sonnenberg, executive vice president and president of Emerson Process Management. "In fact, it's become the new emerging market," said Sonnenberg at Emerson Global User Exchange 2014 in October. "Our orders for the first three quarters were up 6%, and North America was more than double that."
These results were fueled by oil and gas projects in North America, with international activity recovering in Asia, Latin America, the Middle East and Africa. In the past year, Emerson has added more than 3,500 staff, and acquired four companies, including Management Resources Group (MRG) for reliability solutions, Virgo for on/off valves, Enardo for safety and environmental equipment for tanks and terminals, and APM for level instrumentation for bulk solids.
Vimal Kapur, new president of Honeywell Process Solutions (HPS), also emphasized the emergence of natural gas in North America. "China and the Americas continue to lead in capital spending, but Europe, Middle East and Asia (EMEA) and Asia Pacific are recovering as well," said Kapur at Honeywell Users Group Americas 2014 this past June. "The oil and gas industries in the Americas continue to dominate capital spending in the region, especially as they migrate to new natural gas sources. These changes have been having a profound impact for the past two or three years, and this trend is going to continue for several more years.