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When two become one01 March 2005The panel building market is going through somewhat of an identity crisis. Some would argue that there is no longer a distinction between a panel builder and a system integrator. Janet Roadway of ABB low voltage products takes a look at how these disciplines have become inextricably linked and what it means for the industrial market placeA recent survey by this magazine revealed that 44% of its readers identified themselves as panel builders while 40% called themselves system integrators. Over the years, increasing numbers of panel builders have, using their own products, entered into the business of building complete control systems. Similarly
companies known only for integrating systems have diversified into making their own switchboards. In the UK today there are around 600 companies currently engaged in panel building activities. These range from large multi-national switchboard manufacturers to companies with small ancillary control panel building operations. Panel builders can be classified according to a number of broad categories. These include companies whose primary activity is the design and manufacture of type tested distribution switchboards, companies who make motor control centres, and companies who have subsidiary panel assembly operations including component manufacturers, electrical contractors, electrical wholesalers, and large specialist engineering firms and building contractors.
In recent years, though, the panel building market has been hit by the same storm that has affected most of the manufacturing sector. In 2003, market analysts AMA research, estimated the market to be worth some £552m, which in real terms represents a gradual decline over the last decade. In fact, the decline might have been more pronounced if it were not for high levels of spending in construction and infrastructure projects. Some experts have put the reason for the decline down to a number of things, such as a lack of investment in the sector, the export of manufacturing processes to lower cost economies (or “offshoring” as it’s commonly called) and reduced margins caused by greater competition. Although the picture may appear bleak, many industry insiders remain upbeat about the prospects for the future. Concerns over the security of supply and the underlying demand for electricity, which is set to grow, means that there will always be a demand for electrical distribution panels.
As with most industries, competition leads to companies having to find new ways of attracting customers. The panel building industry is no different and with more and more companies chasing fewer budgets, panel builders are constantly looking for different ways to secure new projects. To do this, many panel building companies now provide the ”complete package” of services right from plant sensor through to high level MIS/MES integration. Customers from industries ranging from water through to building services, are no longer looking for just a distribution board or a number of circuit breakers from their local panel builder. Instead, companies requiring control services now want complete systems designed and installed for them. This demand from companies has driven panel builders, already in a tough market place, to foray into the territory traditionally dominated by system integrators.
At ABB, we have found that companies simply don’t want the risk associated with trying to integrate a system with products sourced from different vendors. When you’re spending millions of pounds on a new water pumping station or process plant, you want to be sure that the control system works exactly as it’s
supposed to.
Some well-known companies have set up alliances aimed at offering customers the best of both worlds. Driven by large switchboard manufacturing companies, such alliances are made up of a network of system integrators with significant experience of using panel builder products within particular industries. For the
panel builder, this provides an effective way of reaching new markets using the expertise and credibility of the system integrator renowned in that sector. On the other hand, the system integrator gets greater market exposure from the brand awareness of the panel builder. System integrators are also able to offer customers more innovative control solutions by being in closer contact with the switchboard manufacturers and having a comprehensive knowledge of all the products available.
As the two disciplines merge together, there are going to be a number of industries which will be keen to reap the benefits such a merger will bring. One example is the water industry. April 2005 will see the introduction of Asset Management Planning round 4 (AMP4). This is the process by which the water industry
regulator, Ofwat, determines the programme of water infrastructure that will be funded in the period 2005-2010 and the water bill prices rises that will be allowed to fund this. As well as providing incentives for companies that overperform on their efficiency targets, the process reprimands companies that fall short of the mark.
Over the next five years, many water companies will be embracing the latest technology in order to achieve the benefits that come with over-performance. Inevitably this will mean water companies employing more
complicated and sophisticated control systems designed to make their processes as efficient as possible.
Another industry set to take advantage of the marriage is the process industry. Legislation and industry wide schemes like the emissiontrading scheme and the large plants combustion directive, will mean that many process operators will be looking for ways to exert greater control over their processes to meet the requirements. The future is bright for the control and automation industry.
As industry evolves, many professions and disciplines will adapt to the markets they serve. Panel builders and system integrators are currently going through such a metamorphosis. While it may be easy to sit back and just complain about the increased competition, the wealth of potential opportunities that can arise from the coming together of the two disciplines, will almost certainly be a good thing for the industry and will help shape the next generation of automation specialists. Contact Details and Archive...Most Viewed Articles... |
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