prognostication

When markets contract or slow or products mature, supply chains become less cooperative and more combative, fighting over price and power. Meanwhile, users need help, more than ever.

For the companies who build, sell, upgrade or service machines* that do work, like move water, air or products, the war for the end-use customer is in full swing. 

Consider these questions:

  • What machine OEM doesn't publicly say that they are in the motion, control, or monitoring business, traditionally the focus of the industrial and building automation companies and their integrators?
     
  • What automation company doesn't publicly say that they are in the machine service and upgrade business, traditionally the focus of the contractors and service channels of the machine OEMs (and the OEMs themselves)?
     
  • What machine service company doesn't publicly say that they are in the automation business?
     
  • What motion, sensor or monitoring company doesn't say that they are in the machine and integration business?

No matter how you slice it, modern machine markets are in a state of flux. We can prognosticate endlessly about upcoming mergers and acquisitions, and what to expect from consolidation, but more importantly, is anyone wondering what the customer thinks and feels?

Having interviewed thousands of plant and facility operators in the last 5 years, one thing stands out to us. Even as staffs and budgets have shrunk and productivity demands have increased, finding process and machine solutions has become harder. Everyone sells everything. Topic-matter-experts have retired and moved to Phoenix. No company seems to specialize long enough to build a bench of new, true topic-matter-experts. There are more choices than ever before, many of them more complex and unfamiliar, and fewer people to help sort through them. When everyone looks the same and the future of service is unclear, it is easier to gravitate to up front cost as a decision-driver. To defend against this troubling scenario, many companies have elected to take on new roles, like financing, process or maintenance outsourcing or value-engineering (jargon for system design). In essence, this means that builders, servicers, accessory-makers, and integrators are all fighting for the same seat across from the customer's desk.

So who will win? Unfortunately, it is too early to predict, but there are some indications.

 

  • Installed-base still equals credibility and earns rights. Companies who have solved problems in the past are positioned to solve problems in the future, as long as the brand remains viable and the experience hasn't soured.
     
  • Proximity and direct contact matter. Companies who send skilled people to work arm-and-arm with customers almost always win over companies that don't.
     
  • Innovative, disruptive designs are needed. Right-sized machines with fewer moving parts, smaller footprint, lower energy consumption, smarter process and health signaling systems, longer MTBR and easier maintenance will win.

 

So in lieu of predicting who will win, we can at least predict what will win: it will be simplicity, speed and inventiveness. Got some?

*Turbines, cranes, elevators, blowers, compressors, elevators, conveyors, pumps, machine tools, robots, generators, motors, refiners, valves, engines, etc...