First, some good news: It’s a buyers market for controls and systems. Vendors are dealing with more competition and lower margins at all levels.
Now, for some not so good news: Buyers are taking a “wait and see position,” says Max Weston, manager, Controls Modernizations, HK Systems.
“However, the nice thing about material handling,” says Tom Wolf, business development manager for material handling at Rockwell Automation, “is that when things are slow, there’s always retrofitting. You have to replace equipment that wears out, and while you’re at it, you might as well upgrade to improve the function.”
Thus, material handling managers are buying, “it’s just not in areas many people are focused on,” continued Wolf. “On the capital investment side, we’re seeing significant activity in the study and preplanning work that takes place with potential infrastructure changes.”
Market segments with the highest levels of controls and systems spending growth are in U.S. entry ports, including air, and in industries that must meet government regulations for more stringent product tracking, such as pharmaceutical and food and beverage.
A major reason for spending in these areas is the need to provide accurate and secure information at all steps of product movement. “Security is involved with everything in material handling today,” says Wolf. “It’s a capital investment that doesn’t add a lot of value to things but it is forcing people to reevaluate their material handling operations and make improvements.”
“It’s one of those implementations that you simply have to do, says Sal Spada, senior analyst, ARC Advisory Group. “There is no measurable ROI figures here, projects are getting done because you just have to do it.”
While spending may be “behind the scenes,” the features, controls and systems you must have today are definitely front and center. Strong information logging and tracking capabilities are needed, as well as compatibility with a variety of hardware and software platforms, and probably most crucial of all — flexibility, or the ability to handle several types of functions without extensive changes in configuration.
Customers are focused on keeping track of product throughout the manufacturing and material handling cycle. One reason is a new emphasis on controlling shrinkage. “Companies like Wal-Mart are requesting that their suppliers make it harder for someone to steal product, whether that someone is a customer or an employee,” says Spada. Thus controls are emerging with the ability to gather data from all types of sensors and RFID tags and connect to multiple access points to gather information.
Plus, software in controls offers features that help manage that data, turning it into information. “Increasingly, control software comes with the ability to extract data from higher level software, such as WMS,” adds Spada.
Such information gathering is key for the pharmaceutical and automotive industries. Pharmaceuticals are working to comply with 21 CFR Part 11 requirements from the FDA. In many cases this is forcing an upgrade of programmable controllers.
Automotive companies need strong information gathering systems to track warranties better, log data from the manufacturing process on tires, and track product throughout its life cycle. A major reason for this tracking is to help limit liability exposure.
Centralized control is pretty much “out” in warehousing and distribution. Companies are distributing control functions throughout their material handling facilities to gain several benefits: lower overall system cost, greater choice and control over features, and configuration flexibility. Thus, while it’s taken a while to arrive, more controls and software programs are available that are not tied to a specific hardware platform. You can run these programs on any computer hardware, and you can integrate control hardware among almost any type of material handling equipment. Vendors are finally working on making installation and integration easier. In addition, more material handling systems are available with control intelligence embedded in them. Conveyors and diverters, for example, will no longer be commodity items, as embedded intelligence will make them more valuable partners in the material handling process. Other equipment, such as palletizers, cartoners and wrappers will have greater ability to handle more tasks.
One technology that is helping to facilitate this distribution is a move by users and vendors to the Ethernet protocol for network connectivity, explained Weston of HK Systems.
According to reports from ARC, Ethernet is already reaching into the device level of the manufacturing hierarchy. Ethernet and TCP/IP protocols enable devices to access Web-based programs.
Because of the physicality of material handling, it’s hard for some people to understand the inherent nuances of equipment in terms of its flexibility. “System implementers have typically looked at material handling hardware as inflexible,” says Wolf.
“One of the compelling components to flexibility,” continued Wolf, “is the flexibility of the information and control system. Customers want the right combination of everything, from electromechanical devices to information and associated systems. In this way, customers can see what’s going on with the system and make changes on the fly. Customers want to integrate prognostic capability into their systems, which you can do with controls.” Some of these features have been in controls, and they will be made stronger in the months to come.
There’s some “buzz” about a type of control emerging that is based on open standards and incorporates motion, logic, process, and drives into one product. The big benefit for material handling systems integrators is that there are fewer components to put together.
Called a programmable automation controller (PAC), this control is supposed to “take away the issue of PLC vs. PC,” says Spada. It provides transparent access to all parameters and functions in a system. Along with the above features, it also combines user guidance, visualization and data handling. According to analyses from ARC, PACs will continue to shift the emphasis toward open communication standards and software integration with less focus on hardware.
Another aspect of flexibility involves communications. Vendors agree that wireless connectivity will be in every control, enabling users to reconfigure their processes more easily as their business needs change. Cabling costs and installation challenges will disappear.
“But to gain more flexibility,” adds Wolf, “customers need to resist buying on price, because it cuts short the analysis and preparation on the front end that allows people to have an awareness and make informed decisions that demonstrate an understanding of the flexibility that’s inherently available with material handling equipment.”
Which brings us to expected return on investment. “The trend is to faster ROI,” says Spada. “Obtaining a quicker return, though, is leading to smaller projects and ones focused on eliminating labor.”
It’s also leading to some interesting financing arrangements. Many companies will purchase cut-price systems and install them only to go back a year later and fix or upgrade what they didn’t obtain in the first place. The reason for such buying behavior is that the fixes and upgrades can come from a different financial “bucket.”
Overall, though, once confidence returns to business, everything is in place for a good round of buying. MHM
HK Systems, www.hksystems.com
Rockwell Automation, www.rockwell.com
ARC Advisory Group, www.arcweb.com