Process Automation
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Process automation involves the use of technology to automate business processes in organizations. The many advantages make it one of the IT services that are highly in-demand. The process automation market continues to boom despite the global crisis with the demand for automation services unlikely to face a downturn any time soon. 

North America is expected to continue to dominate the market, in terms of growth prospects in adopting automation through to 2020, however, the APAC is growing at a competitive rate and is expected to capture the highest market share by after 2020

Increasing focus on adopting automation across all industry verticals and spending more on new technologies are expected to be major drivers for the coming few years  

Process Automation Regional Market Outlook

• Europe dominated the market, in terms of growth prospects in process automation, until 2020. The MEA region was expected to grow at the fastest CAGR of 9.5 percent from 2017 to 2020.
• Increasing focus on bringing in more productivity and eliminating hazardous manual tasks are expected to be the major drivers for the coming few years.
• The major end-use industries of market research automation: Oil & gas, metals, and mining, pharma, paper & pulp, automotive, chemicals..
• The high process automation market maturity regions are North America and Europe. The medium market maturity region is Asia-Pacific.
• Raw material prices constitute nearly 55 percent of the total cost of manufacturing process automation equipment. 
• The global process automation market size (E): $138 billion (2016) and was expected to grow at a CAGR of 6.6% percent to $178 billion by 2020. 
• The industrial automation market in Europe was $49 billion in size.
• The Asia Pacific had a market size of $32 billion.
• The industrial automation market size of North America was $21.35 billion.
• According to industrial automation market research, the major market drivers are rapid technological change and the emphasis on increasing productivity. 
• From 2020 to 2025, APAC is forecasted to be one of the fastest-growing markets in the industry.
• India, Japan, and China are the regions to look out for as they are predicted to be one of the leading regions that will grow the fastest in the future.
• Rapid industrialization is one of the driving factors behind the growth of the automation market in the Asia-Pacific region.
• Government policies are also favorable in these regions, which are enabling wider adoption of automation.
• The growth of the oil and gas industry in Asia-Pacific is another contributing factor that can lead to the growth of the process automation industry.

Global Process Automation Market Maturity 

• The global process automation market was valued at $138 billion in 2016; it was expected to grow at a CAGR of 6.6 percent to reach $136.28 billion by 2020.

• After 2020, the expected CAGR can double as the need for process automation will increase across various industries and the shift towards increased automation will happen at scale.

Global Automation Market

• The global industrial automation industry was estimated to be a $258 billion market in 2016, with $116 billion in discrete and $138 billion in process industries.
• The industrial automation market was expected to grow at a CAGR of ~ 6.6 percent from 2016-2020. Based on the automation type, the Product Lifecycle Management (PLM) segment held a dominant position in the overall market and is most likely to retain its stance over the forecast period.
• Need for operational efficiency, rapidly growing SMEs, growing inclination towards the Internet of Things(IoT) and cloud-based automation, growing demand for smart factories, mass customization, supply chain synchronization, integration of systems through system integrators or SI, increasing R&D, innovation in Artificial intelligence, and advancement in the M2M communication technology are some of the key growth factors of this industry.
• High installation and maintenance costs and lack of trained professionals are some of the constraints in this industry.
• Major companies in this industry include Honeywell International Inc., General Electric Company.
• Mitsubishi Electric , Rockwell Automation, Johnson Controls Inc., ABB Ltd., Samsung Electronics Co., Ltd., Siemens AG and Schneider Electric.

 Supply Market Outlook

Global/Regional Supplier

• Increase in innovation: Global vendors in the automation industry have been continuously striving in a highly competitive environment by bringing in more innovative products as well as enhancing their existing product capabilities.
• Increase in M&A activities: The automation industry players are focused on mergers and acquisitions to expand their reach to untapped global markets and increase their product and service portfolio.

System Integrators

• Ensures OEE: An integrator ensures OEE to an end-user when they come in mainly for software integration of all the equipment already procured by the client.
• Innovation in automation: Some of the integrators also take up the responsibility of innovating in areas wherever possible in order to stay competitive. For instance, in 2016, B&R automation upgraded the highly advanced and flexible APROL automation platform by adding a powerful system component for Business Intelligence (BI). APROL includes a PAL library of standardized modular software functions for process engineering tasks.

Engagement Trends

• Most adopted model globally: Sourcing from OEMs, integrators, and distributors
• Why: To attain cost savings by eliminating manpower across different tasks and maximizing process efficiency.
• Contract length: 2 – 3 years, with an option of maintenance and spare parts services.
• Pricing strategy: OEMs prefer lump-sum pricing, distributors prefer cost-plus pricing, while the integrators prefer market-priced, milestone-based, time and material-based pricing.

Negotiation Factors

• In the process-automation market, one of the negotiation factors is contract and volume negotiation.
• Integrator fees is one of the major negotiation factors in the automation industry.
• Discounts are the other negotiation factors that play a role in the automation industry.

Market Overview 

The global industrial automation market is considerably fragmented due to the presence of various global and local players in the market.

In the next 3–5 years, the top drivers for the automation market will emphasize on increasing productivity through automation and by leveraging advanced technologies, such as robots and control-related technologies.

The automation industry does witness product/technology innovations and substitutions within the industry including low-cost imports but this does not affect the industry’s growth as a whole or replace the role of process automation.

The top suppliers in the market are highly competitive as approximately 58 percent of the automation industry market share is captured by the top 10 suppliers globally. 

The top suppliers of the global process automation industry are Emerson, Siemens, Schneider Invensys, and ABB.

One of the emerging engagement strategies is sourcing from various regional suppliers who provide quality products.

Another one of the major emerging engagement strategies globally is to source from a single global supplier who is known to supply only quality products.

The contract period is anywhere between 1 and 3 years in the process instrumentation and automation industry.

Restraints that can slow the growth of the process automation market include the initial investment costs. Investment in the implementation is high; maintenance cost is high as well. This can increase the overall costs and operating expenses.

Why You Should Buy This Report

• It provides information on the global market size, regional outlook, industry drivers, and constraints, and does Porter’s five forces analysis of the process automation market.
• It provides you supply trends and insights, industrial automation hierarchy, supplier profiles, and SWOT analysis of major players like Siemens, ABB Ltd., Emerson Electric Co., etc.
• It provides an insight into the cost structure breakdown and pricing analysis of the industrial and intelligent process automation market. 
• The report details the best sourcing, contract, and engagement models of the industrial automation market.