Machine safeguarding market confronting turbulence

July 28, 2009 - The market for Machine Safeguarding Solutions experienced over 8 percent compound annual growth over the last several years and was on track to exceed this. However, the turbulence in the global market effectively put the brakes on the machine safeguarding market around the third quarter in 2008. Effectively, the automotive market and general machinery market came to a halt leaving those suppliers with a dependency on these sectors to accept the inevitable, or more specifically, scale business to the opportunity. The business challenges were not well synchronized throughout all of the regions. In the first quarter 2008, the semiconductor market in Japan and Asia was the first to experience a precipitous decline in orders. Subsequently, the machine tool market in Japan and China followed. However, the cause of this was primarily due to raging inflation as oil and commodities hit all time highs.

The overall safeguarding market is growing as a direct result of the continued demand for industrial machinery. Machinery shipments escalated at an unprecedented rate in virtually every sector of the market. Consequently, the demand side is creating a pull in the market across the entire range of safeguarding product segments. Furthermore, safeguarding is spreading rapidly outside of just the automotive sector, leading to opportunity for the nimble machine safeguarding supplier. “The challenge to suppliers of machine safeguarding components is to respond to the crisis strategically by steering the business toward the emerging industries seeking control reliable safeguarding components,” according to Research Director Sal Spada, [email protected], the principal author of ARC’s new study “Machine Safeguarding Solutions Worldwide Outlook.”

Machine safeguarding has permeated virtually every broad automation supplier’s product portfolio. The dramatic shift seen in machine safeguarding is that this sector is no longer the domain of niche product specialists. This fragmented industry of relatively small suppliers is likely to undergo a wave of consolidation as the large automation suppliers aggressively enter this territory. Moreover, the stress test of a strong economic downturn is expected to result in business failures that did not have the resources to sustain an extended downturn. For some suppliers this period will be an uphill battle as the trend in the market is to offer safety and standard machine control which is now widely available as an integrated solution from both first tier and second tier automation suppliers.

Factory Automation and Machine Safety Networks
The Darwinian concept of “adapt or die” is on the mind of every senior executive; as industry orientation, partnerships, services, networks, and product extensions will all be vital to remaining a contender in this market. Most notably, adoption of safety networks will parallel that of device networks from the perspective of lowering the integration costs for the machine builders. These savings are realized in areas such as reduced cable costs and greater flexibility in reconfiguring the network as operations dictate. “The timing and impact of safety regulations remains a wild card in many parts of the world, but both existing suppliers and new entrants are lining up their safety network strategies as the technology increasingly emerges as a key differentiator,” according to Vice President Chantal Polsonetti the principal author of ARC’s “Factory Automation Safety Networks Worldwide Outlook.”

Consulting Services and Skilled Sales Channel Increasingly Important
Consulting services continue to be increasingly important in the selling process to assist machine builders in making the right choice for their particular application. However, our market research indicates that this element of the business has not reached its full potential and is under performing. However, machine builders are now faced with even more challenges going forward as the new ISO 13849 standards arriving in December 2009 will create further confusion. In many cases, it requires a completely new approach to determining risk levels and gaining certification for a safeguarding solution.

About ARC: Founded in 1986, ARC Advisory Group has grown to be-come the Thought Leader in Manufacturing and Supply Chain solutions. No matter how complex your business issues, our analysts have the expert industry knowledge and first-hand experience to help you find the best answer. We focus on simple yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value.