Automation technology

Although demand is strong, the automation industry itself is undergoing a period of fundamental transformation. To seize the opportunities of the future, companies will need to integrate cost-optimized sensory technologies, mechanical components and control features. This has the potential to change existing processes fundamentally.

Changing existing processes from the ground up

At first glance, nothing seems to have changed in the field of automation. The booming economy sees the whole business reporting record sales and certain industries like biotechnology and pharmaceuticals continue to offer above-average growth potential. What's more, major impetus comes from the emerging markets catching up with the developed world, and from modernization and the spare parts business.

But appearances are deceptive. Although demand is strong, the industry itself is undergoing a period of fundamental transformation:

• Microstructures in sensory technologies and applications, and new materials and nanotechnology are making new applications possible
• Total cost of ownership is now at the forefront of systems and mechanical engineers minds, too
• Automation is becoming increasingly interesting for small and medium-sized enterprises
• Partially autonomous, self-regulating and wireless systems simplify control processes and favor decentralized solutions
• Open-standard control systems are forcing manufacturer-specific systems out of the market
• Marketing and production are growing closer and closer together
• Modern supply chain management means that automation systems are becoming ever more mutually integrated

To seize the opportunities of the future, companies will need to integrate cost-optimized sensory technologies, mechanical components and control features. This has the potential to change existing processes fundamentally. Successful players are already arming themselves for the future by

• Rounding off their service ranges, primarily in the field of sensory technology
• Converging the various disciplines in mechatronic solutions and thinking in terms of systems instead of products
• Building automation solutions into modular and standardized products that are cost effective to combine and maintain

This positive framework and the massive technology leaps that are taking place lead us to expect continued growth in the markets as well as substantial margins in automation. The possibility of integrating systems will serve to amplify the consolidation trend even further.

In line with the described trends, we support companies in the automation industry in addressing the following issues:

• Realigning R&D and increasing efficiency in R&D
• Preparing and realizing M&As and partnerships with a focus on expanding the kind of know-how that leads to new solutions
• Designing growth strategies in selected industries and markets
• Achieving a strong customer/industry focus and implementing customer loyalty projects

Analyzing strategic development options for a major provider of automation solutions

A big-name supplier of automation solutions saw its core business facing ever-increasing pressure due to growing competition from providers large and small. By comparing the market expectations and trends with the current direction of the company's activities, we found that the client suffered from a lack of specialization and superior know-how. The company was "stuck in the middle" – unable to compete on price with its small and medium-sized challengers, yet lacking the customer proximity and the depth of process expertise in certain areas to keep up with the big market leaders. With a view to achieving the desired reorientation, we recommended that the firm limit the range of its activities and focus on a small number of fields where know-how represents a differentiating factor.

Developing a new range of machinery for the Far East market

A mechanical engineering firm operating in the SME sector anticipated growth in the standard segment – driven by the increased demand in South Korea and China. We completely reworked the company's machinery concept with the aim of achieving radical standardization and modularization. We helped the client implement design-to-cost programs to reduce the features and fittings of the machines down to the exact level expected by the target market. This brought costs down dramatically. At the same time, we assisted the firm in leveraging purchasing potential by means of e-sourcing and optimizing the supply basis. This reduced the cost of manufacturing the different machine types by about 30% over the original concept.

Global footprint optimization

A leading manufacturer of lighting fittings found that its sales markets were increasingly shifting into Eastern Europe. We worked with the client to adjust the company's value added and its supply chain to the changed conditions it faced. Wage-intensive and standardized process steps were moved from high-wage countries to Eastern Europe. Service and distribution organizations were expanded into the most important Eastern European markets. Part of the procurement volume was also shifted to Eastern Europe. We supported the company's regional CEE offices in selecting suitable production locations and in implementing a number of partial relocations. As a result, the company had moved closer to its regional markets, cut costs and reduced delivery times.