The global distributed control systems (DCS) market will continue to find growth in the midst of a global recession, largely because of an increased focus on the part of process automation suppliers on the services business. While 2009 and 2010 look to be challenging years, particularly for the North American, European and Japanese markets, the opportunity to drive growth in services remains substantial and will continue to drive growth in the overall DCS market well into the next decade.
"Services continue to be the fastest-growing segment of the overall DCS market. Growth in the operations or after-market services segment is much greater than that of project services, although project services also continue to grow due to the increasing popularity of the main automation contractor or MAC concept, where the automation supplier, typically the DCS supplier, takes full responsibility for all the automation related aspects of a project," according to ARC Research Director Larry O’Brien, the principal author of ARC’s "Distributed Control Systems Worldwide Outlook."
Shrinking Resource Base Drives Services Growth
From the retiring wave of baby boomers in North America to the shortfall of qualified engineers in Asia and other parts of the world, the labor shortage is the primary factor behind growth in demand for services and will propel growth in the overall DCS market for the foreseeable future. In many ways, the current economic crisis has made the situation worse, with more waves of layoffs and early retirements. Meanwhile, the ranks of new graduates lining up to fill these positions are increasingly slim. In a recent interview, for example, a major refining company stated it had lost 2,500 years of experience last year when 100 operators retired at one site, each with an average of 25 years of experience. As further evidence, a major chemical company analyzed its plant demographics and found one of its largest plants would lose 75% of its operating staff to retirement by the end of this decade.
Demand for value-added services has never been higher, as end users strive to extract every last ounce of performance out of their plants in the face of constrained personnel resources and a wave of retiring engineers. Demand has been particularly strong for outsourced maintenance and performance-related services such as loop monitoring. Within the process industries, there is the potential to reduce energy consumption, raw material usage and workforce requirements in literally millions of installed control loops. In addition, these control loops form the foundation for safe and reliable operations. However, in a typical plant, more than half of all loops are actually increasing variability, thus negatively affecting quality, throughput and ROA. Even if a process were running at optimal economic conditions, performance deterioration occurs from numerous sources, such as changes in business strategies, modifications in operating conditions and equipment wear.