MACs buoy DCS markets

Dedham, Massachusetts - An increased focus services business will enable distributed control systems (DCS) vendors to shrug off the worst effects of the global recession, according to an ARC Busines Advisory report.

Accordin to ARC, while North American, European, and Japanese markets will stay challenging this year and next, the services area will offer substantial growth opportunities in the overall DCS market well into the next decade.

“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 (MAC) concept,” said Larry O’Brien, ARC research director. 

Skills shortages are the main driver for demand for services, not least because of the current spate of layoffs and early retirements in the economic downturn, said ARC. Meanwhile, it noted, the ranks of new graduates lining up to fill these positions is increasingly slim.

ARC, for example, cited how a major refining company 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, it said, a major chemical company had analysed its plant demographics and found one of their 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, particularly for outsourced maintenance and performance-related services such as loop monitoring, said ARC. Within the process industries, it added, there is the potential to reduce energy consumption, raw material usage, and workforce requirements in literally millions of installed control loops.

"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," the report concluded. "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."