industrial services in europe
TRANSCRIPT
Opportunities in European Industrial Services:
A Frost & Sullivan Insight
Muthukumar Viswanathan
Practice Director, Industrial Automation and Process Control
27th Nov, 2013
SPS IPC DrivesSTRICTLY CONFIDENTIAL
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Contents
About Frost & Sullivan 3
Introduction 9
Industrial Services - Market Snapshots 13
Project Highlights 22
3
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9
Introduction
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Industry 4.0
A Deep Dive
10
Industry 4.0
Technology
Processes
Collaboration
Wireless Intelligence
Ethernet-based IP Devices
Cloud Platforms
Digital Manufacturing
Intra-discipline Integration
Social Innovation
IP Centralisation
Mass Customisation
Sustainable Manufacturing
Lifecycle Assessment
Industrial Revolution 4.0 - Pursuits
• Product Innovation
• Increased Collaboration
• Operational Process Enhancement
• Cyber-Physical Production
Industrial Revolution 1.0 – 3.0
• Mechanical Production
• Mass Production
• Production Automation
� Convergence of applications will form
crux of new advancements
� Energy efficiency and sustainability to
gain greater business focus
� Greater presence of mobility and web-
based information systems
Strategic Trends
The term “Industrial” in this context, refers to
all segments within the industrial world
associated with discrete/process industries. It’s
scope is inclusive of enterprise applications in
the board rooms to manufacturing production
units in the shop floor.
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Automation Trends: Shaping the Future of Factories
11
Cyber SecurityCyber Security
Cloud ComputingCloud
ComputingWireless
IntelligenceWireless
Intelligence
Big Data & Mobility
Big Data & Mobility
Enterprise Integration
.
Enterprise Integration
.
Integrated Industry Integrated Industry
Product Lifecycle
Management
Product Lifecycle
Management
Supply Chain
Innovations
Supply Chain
Innovations
Service InnovationsService
Innovations
Key TakeawayKey Takeaway
End user quest forinnovation, excellence andreduced time-to-marketneeds is poised to alterbusiness landscape andimpact vendor fortunes.High competitive pressuresis resulting in end-user'squest to reduce total costof plant ownership, shapingfuture factories besidesproviding the servicesmarket with impressivegrowth opportunities in thenext-generation enterprise.
Industry 4.0 is likely to usher in a new manufacturing paradigm resulting in increased in industrial productivity
Industrial Automation Trends: Factors Shaping the Changing Industry Landscape
Frost & Sullivan Analysis
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Industrial Services
The New Growth Frontier for Innovation and Profitability
12
Source: Frost & Sullivan analysis.
Industrial Services provides a new arena for end-users for improving productivity and maximising profitability in a
highly competitive global industrial landscape
Drivers Challenges
Push for operational excellence Dearth of skilled workforce
Maintenance as a Strategy Concerns on cyber security
Regulatory compliance Demand for holistic services
Mapping Potential for Industrial Services
The huge demand for services in the automation
space is a bellwether for the potential of the
industrial services market on a large scale
Areas of Service Growth
Predictive Maintenance
Energy efficiency
On-demand Services
Cyber Security
End-user Perspective: Factors Favouring Services
13
Industrial Services – Market Snapshots
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Automation Services
Precursor to the Untapped Service Market in Industrial Markets
Drivers Challenges
Push for operational excellence
Dearth of skilled workforce
Maintenance as a Strategy Concerns on cyber security
Regulatory complianceDemand for holistic
services
Major service end-user segments
Market Share
Oil & gas More than 66% of the global automaton services market in 2012
Chemicals
Power generation
78%
11% 7% 4%
Global Automation Service Market, 2012, Competitive Structure
Top IA Vendors
Niche service providers
System integrators
Regional vendors
Key Technology Trends
Demand for retrofits and upgrades in mature markets of Europe and North America will boost demand for services
Simulation modelling and advanced process controlsolutions are poised to likely to become an indispensable part of value-added services expected from end users
Remote monitoring, diagnostics, and remote maintenance in critical infrastructure industries, are likely to be next major avenues for growth in the global automation services market.
Major automation vendors are increasinglyadopting a pro-service approach that aims to deriveprofits out of value-added services in the long term.
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Automation Services
An Analysis
38%
15%17%
30%
Global Automation Service Market, 2012, Revenue by Service Type
Project & InstallationConsultingOperational Improvement
Global Automation Service Market, 2012, Revenue by Product Type
Consulting services is estimated to be the fastest-growing segment in the global automation services market.
Continuous service capabilities facilitating energy efficiency and cyber security are poised to be in demand over the forecast period.
Value-added Services
Reliability-centred maintenance
Energy efficiency
On-demand Services
Cyber Security
DCS42%
SCADA17%
PLC13%
MES11%
Others*17%
Automation Services, 2012
Revenue Estimates
$15.2 bn
Note: Others* includes EAM, APC, SIS, etc.Key Takeaway: Mapping Overall Plant Maintenance Requirements
The huge demand for services in the automation space is a bellwether for the potential of the industrial servicesmarket on a large scale
Types of Services
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New Service Framework Set to Redefine DCS Business Model
38%
15%17%
30%
Global Automation Service Market, 2012, Revenues by Service Types
Project & Installation
Consulting
Operational Improvement
Maintenance & Support
Consulting services is
estimated to be the
fastest-growing segment
in the global automation
services market.
Automation Services, 2012
Revenue Estimates DCS Segment
$15.2 bn $5.84 bn
Key Takeaways (For DCS Vendors)
New Service Framework
Continuous service capabilities facilitating energy efficiency and cyber
security are expected to form the new service framework influencing DCS
business models in industries.
Realigning Current Service Offering
Project & installation cost are expected to witness a decline in value as the
service framework offered by vendors are being reframed with higher
weightage towards after-sales service offering.
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Motors & Drives Services Market
Market Indicators
15.1%
21.0%
23.9%
35.0%
5.0%
European Motor Services Market, 2012,
Technical Consulting
Motor Management
Installation & Commissioning
Maintenance & Repairs
Others
38.9%
29.2%17.9%
14.0%
European Repairs & RefabricationMarket for Electric Drives, 2012
Repair & Maintenance
Refabrication
Technical Consulting
Total Drives Management
Drivers Challenges
Macroeconomic challenges drive service investments
Limited availability of integrated service portfolio
Maximising asset utilisation
Shortage of skilled workforce
Maintenance as a profit strategy
Emergence of low-cost service providers
IndustryEnd-Users
Direct Consultants
Service Partners
Private ServiceProviders
Motor/Drive Manufacturers
Global Motors & Drives Market: Services Channel Analysis, 2012
Percentage Sales Breakdown by Service Type
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Services in Motors & Drives Market
Trends, Opportunities & Unmet Needs
Analysis
Relevant Trends
Energy efficiency
High market fragmentation
Complex operational needs
Comprehensive integrated
service portfolio
Vendor-specific service
offerings
Effective after-sales service
strategies
Predictive and preventive
maintenance strategies
Remote monitoring
diagnostics
Unmet Needs
Energy optimisation
Increased complexity
Skilled labour requirement
Demand for one-stop solution
providers
Multi-vendor servicing
capability
Lifecycle management
Reliability engineering
Enhanced communication
capabilities
The emergence of complex manufacturing processes, combined with the increasing emphasis on improving plant
profitability and reducing downtime will steer the growth of services in the global motor and drives market.
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Industrial Gearbox Services
Key End User Requirements – Selected Quotes
Types of Service Provided
Reaction Time
Time to Deliver
Reputation/ Brand Recognition
Geographic Location
Measurement
Low High
Low High
Low High
Low High
Low High
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
Maintenance
Parts Replacements
Repair/ Machining
Condition Monitoring
Measurement
Low High
Low High
Low High
Low High
Low High
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
“What are the top criteria you use when selecting a gearbox service
provider? How would you rank these criteria in terms of importance
when selecting a gearbox service provider?”
“What types of services do you typically require on the
industrial engineered gearbox?”
Re-Builds
“Growing interest for predictive and preventive
maintenance techniques of servicing is witnessed
especially in the energy and mining sectors.”
Source: Frost & Sullivan analysis.
“Spare parts replacement accounts for about 60.0% of
the sales. The rest is split between repair, maintenance,
re-builds and condition monitoring.”
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Pump Services Market
Types of Maintenance
Total Pump Services Market: Types of Maintenance, Europe, 2012
Source: Frost & Sullivan analysis.
Predictive Maintenance
• Maintenance carried out only if
necessary and warranted by
operational conditions
• Reduces the need for high
spares inventory, as some lead
time is available to purchase
spare parts
Pro-active Maintenance
• Utilizes all of the other
maintenance techniques
along with root cause analysis
• Requires knowledgeable
technicians
Breakdown Maintenance
• Repair and maintenance carried
out subsequent to pump failure
• The most inefficient way of
maintenance and works only if
large inventory of spares is
available
Preventive Maintenance
• Maintenance carried out at
pre-defined time intervals
before the pump actually
fails
• Involves possibility of
reduced performance
through unskilled personnel
or futile maintenance
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Conclusions
21
IndustrialServices
Ecosystem Services
Integration of Internet of Services with the Internet of Things will give create a new cloud based maintenance and service model
Plant Services
The dynamics of the emerging services framework will create new opportunities in the value chain of industries
Asset Services
Comprehensive asset services that are product neutral will be a key segment of opportunity for expansion in the future.
Product Services
Services becomes an exclusive entity with little or no dependence on product sales – a new business model that will promote “Service as a Product"
Source: Frost & Sullivan analysis.
22
Project Highlights
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� The project’s opportunity assessments will focus on
equipment that are utilised within the following end
user markets:
� Oil & Gas
� Chemicals & Petrochemicals
� Food & Beverage
� Water & Wastewater
� Pharmaceuticals
� Metals & Mining
� Power Generation
� Others (Pulp & Paper, Marine, Building Services , Material
Handling etc)
Industry Scope
� The project will cover Europe (EU 27, Norway,
Switzerland) and Russia and will provide country / region
profiles for the Top 5 industrial services markets. The
markets currently targeted are:
� Germany, France, UK, Italy, Northern Europe
� Other countries may be included which may be identified
during the research.
Project Scope
Country Scope
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Product Scope
� The product scope for this analysis will be limited to:
� Pumps
� Industrial Valves and Actuators, Control Valves
� Compressors
� Electric Motors
� Electric Drives
� Industrial Gearboxes
� Industrial Automation
� Filed instrumentation devices
� The service types scope for this analysis will be
limited to the services relevant to each of the
product types and will be including as applicable:
� Repairs & maintenance
� Spare parts
� Retrofit
� Condition-based monitoring,
� Preventive maintenance
� Predictive maintenance
� Reliability-centred maintenance
� Energy efficiency
� Lubrication maintenance
� Calibration
� Diagnostic & inspection
� Optimisation
� On-demand Services
� Field Services
� Cyber Security
� Other service types will be included which may be
identified during the research.
Project Scope
Services Scope
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Frost & Sullivan aims to quantify
the size and growth potential of
the industrial services market in
Europe. The assessment’s focused
objective will be to identify and
quantify key supply opportunities
for existing and potential market
participants within this high
growth market.
Frost & Sullivan will achieve this
aim by focusing on the following
objectives...
Objective 2:To quantify and provide key insights on the European industrial services market (2009
– 2012), including an overview of the market structure; key competitor profiles;
purchase trends; supply, pricing and demand trends
Objective 3:
To identify and discuss key challenges, drivers and restraints of the European
industrial services market, (2013 – 2018), including impact analyses for each of the
discussed market dynamics
Objective 4:
To provide forecasts (2013 – 2018) for the industrial services market including a
breakdown of the forecasts by product segment and end-user industry
Objective 1:To provide a detailed assessment of the European industrial services market (2012) –
Top 5 countries / regions
Objective 5:
To identify key supply opportunities and make recommendations for potential and
existing market participants intending to grow within these markets
Project Objectives
26
Thank You
“We Accelerate Growth”
Muthukumar Viswanathan
Practice Director - Europe - IPC and M&I
Direct: +44 20 7915 7804
Email: [email protected]
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