The new X Factor – stability!

Published:  13 August, 2009

With so many automation technologies now regarded as commodities, barely distinguishable even in price, are there any real differentiators any more? Mitsubishi Electric's John Browett argues that astute buyers need to consider a new factor: stability.

Users of control and automation products have seen the equipment they buy evolve through a number of clearly defined and recognisable stages, each of which, in turn, delivers significant benefits. First, advancing technology makes performance the major selling point for equipment vendors, with manufacturers successively overtaking each other with a performance boost.

But the big steps forward can only go on for so long. Eventually the incremental advances become so small that it becomes very difficult for one vendor to differentiate its products from those of another vendor on performance grounds alone, on technical specification at least.

Of course, the specifications rarely tell the whole story, and it is quite likely that there are still significant performance differences between different manufacturers" products once they are installed in real-world applications. But I doubt there are many of us who have the time, the budget, the resources or the inclination to perform comparison tests on several competing brands before we buy. Instead, the best we can do is take the data sheet at its word.

With performance a given, then, for vendors looking for market differentiation, functionality becomes the new driver. Manufacturers pack more and more features into their products to meet the widest spread of user requirements. But even here the various manufacturers soon catch each other up. There are, after all, only a finite number of functions that a given product can offer. Soon, just as with performance, there is very little extra that one manufacturer can add that another manufacturer isn’t already offering or about to incorporate.

So the key battlegrounds become price, support and service. As a technology matures and individual component and volume manufacturing costs come down, vendors will frequently find themselves able to dramatically reduce the prices of their products. The spiral downwards cannot go on forever, though. Prices may come down quickly at first, but gradually the curve shallows and then bottoms out, until eventually unit costs across all vendors become broadly comparable.

Products that were once the pinnacle of advancing technology are now little more than commodity items, to be purchased as cheaply as possible and disposed of just as casually at the end of their working lives.

This would seem to be good for buyers and users. With such high performance and so much functionality, all at rock bottom prices, Purchasing and technical selection decisions become easy.

However astute equipment buyers are coming to realise that beyond performance, functionality and price, when it comes to product differentiators there is a new emerging measure; stability. In these challenging economic times, stability is critical - stability of the product line, the wider automation platform, the supply chain, and even of the brand itself.

Long term stability It may seem odd to think about the stability of the product line. A modern drive can be expected to offer five years service life as a bare minimum, and a PAC or PLC ten to 15 years. You certainly wouldn’t expect (or even want) to buy the same product in five or ten years time that you bought today. But you’ll want to be able to integrate that new product into your machine or line with the least amount of fuss, and that is where the heritage of the product the continuity of the product line over many years becomes crucial.

You have invested a lot of time and effort in setting up your drive parameters or programming your PLC, and you have every right to expect that when you need a next generation product, your supplier will be able to ease you through the transition with the minimum downtime incurred. In short, when the time comes to revitalise an existing line with the latest technology, there should be a seamless and logical upgrade path.

But this stability goes beyond the individual product, because it is rare these days to find an installed component that is not integrated as part of a wider automation platform. The stability of that platform is just as important as that of the individual product, if not more so.

There are plenty of technology vendors who talk about their automation platform and their networking strategies representing a future-proofed investment; but for how many is that little more than a glib marketing statement? Again, the safest policy is to deal with suppliers who can offer real assurances of backwards compatibility and a seamless upgrade path for the future; and the acid test has to be to look at how today’s companies are dealing with the products and systems that you’re upgrading from a decade or more ago. If a vendor can’t offer you continuity now, then things are looking less than favourable for the future.

Another critical factor is the stability of the supply chain. This is something that is easily overlooked, yet it impacts on the reliability of product supply and product continuity at many levels. If you rely on systems integrators, then you need the comfort of knowing that the relationship between your chosen integrator and your chosen technology vendor is strong. All too frequently these days, even the best systems integrators can be suddenly left unsupported by equipment vendors who seem to chop and change on a whim. Reliable vendors form lasting bonds with systems integrators, with mutual respect and each serving the best interests of the other.

Consider, too, the component and product suppliers to your preferred vendor. When it comes to inverters, for example, Mitsubishi is one of very few suppliers that actually manufactures its own power devices and semiconductors. Many other drives manufacturers have to rely on third party companies for critical components. The semiconductor industry has been hit hard in the global downturn, so stability of supply for key parts is a very real issue.

By the same token, there are very few automation vendors who develop all key technologies in-house and manufacture virtually every product in their range as Mitsubishi does. In order to offer a comprehensive portfolio that covers all automation requirements, vendors will brand other companies’ products or increasingly make strong alliances according to their needs. For the user it is a question of trust – if your supplier is open about their partnerships then you can make an informed decision. Selecting your suppliers on a "best in-class” or “core competency” model will go a long way to protecting your investments while increasing your productivity.

Of course it’s impossible to anticipate the whimsy of the industry’s specialist manufacturers or the ambition of the automation giants when it comes to branded products, but you can protect your own interests to a great extent by looking for automation equipment vendors who make a point of supporting backward compatibility, develop their own technology and who are open about who their product partners are.

The issue of stability has always been present, but the slowing of the global economy has put it into far greater focus, with companies taking a renewed interest in the long-term reliability, support and security of their control and automation systems. None of us has the benefit of a crystal ball when we source products or buy into a platform; but certainly we can assess any company’s track record and look at what steps it is taking today to ensure the continuity of supply for the future.

 

For further information please visit: www.meuk.mee.com

 

 

 

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