In response to rising raw material costs and increased competition from low-cost manufacturing regions such as China, European manufacturers are paying greater attention to operational efficiency. As a result, providers of supervisory control and data acquisition (SCADA) and distributed control system (DCS) solutions are likely to see greater opportunities since these systems are crucial in achieving production synergies and eliminating costs in the manufacturing process, according to research from Frost & Sullivan (automation.frost.com).
An added factor aiding the uptake of SCADA and DCS systems is the enhanced value proposition derived from new product developments, the report indicated. Advances on the DCS front have seen the development focus widen from traditional process control to an extended range of applications such as production management, safety instrumented systems, information management and documentation, all handled in one single system. Likewise, advances in SCADA technologies have ensured improved IT compatibility along with the capability to support higher-level business systems such as manufacturing execution systems (MES) and enterprise resource planning (ERP).
As a result of these product advancements, differentiation between SCADA and DCS systems has blurred, and this also has changed the degree to which these systems compete against each other, noted Jonas Westlund, industry analyst at Frost & Sullivan. Further, with a growing share of the revenues being generated from system upgrades and retrofits, the general reluctance of end users to switch suppliers is restraining competition.
The report predicted the European SCADA and DCS markets across major end-user sectors such as oil and gas, pharmaceuticals, food and beverage, chemicals, power generation and pulp and paper could generate a revenue growth of $691 million between 2005 and 2011. With a projected increase of 37%, the food and beverage sector is likely to show the highest growth rate, and the power generation sector is poised to lead the growth in monetary terms, exceeding $300 million for growth of 28%, according to Frost's research. Individually, SCADA system growth is likely to be $188 million, compared to DCS growth of $503 million.
"While future growth trends between SCADA and DCS do not show any significant changes, the lack of new system opportunities is expected to have a significant impact on future growth patterns," said Westlund. "This is reflected by the expansion of the retrofit market, projected to generate growth of $476 million by 2011, as compared to new system growth of just $214 million over the same time period."