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 several advantages make it one of the most in-demand IT services. 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. 

The adoption of process automation equipment is surging in the pharmaceutical industry, primarily owing to intensifying competition and policies associated with the industry. The rising importance of offering precise dosage of medicine – as well as increasing usage of process automation solutions in several processes including testing, production, drug development, packaging and supplying – are likely to provide further impetus.

North America is expected to continue to dominate the market, in terms of growth prospects through 2020, however, the market in the Asia Pacific (APAC) is seeing explosive adoption of procession automation and is expected to capture the highest market share after 2020.

Process Automation Regional Market Outlook

• Europe dominated the market, in terms of growth prospects in process automation, until 2020. The Middle East and Africa (MEA) were expected to grow at the fastest CAGR of 9.5% from 2017 to 2020, underlining the positive future prospect of the process automation market.
• 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 maturity regions in the global intelligent process automation market are North America and Europe, while APAC is the medium market maturity.
• Raw material prices constitute nearly 55% of the total cost of manufacturing process automation equipment. 
• The industrial automation market in Europe was $49 billion in size.
• APAC had a market size of $32 billion.
• The industrial automation market size of North America was $21.35 billion.
• Major growth 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, owing to rapid industrialization.
• 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.
• Growth of the oil and gas industry, as well as conducive regulatory framework, are further auguring for the business process automation market size in APAC.
• Government policies are also favorable in these regions, which are enabling wider adoption of process automation equipment.
• The growth of the oil and gas industry in APAC is another contributing factor, contributing to the revenue of the regional 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 Process 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 size was expected to expand at a CAGR of around 6.6% from 2016 to 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 (AI), and advancement in the M2M communication technology are some of the key growth factors of the industry.
• High installation and maintenance costs and lack of trained professionals are some of the constraints in this industry.
• The COVID-19 pandemic has negatively impacted the global process automation market due to supply chain disruptions across the world. The global economies have been hit hard as there is a significant decline in product demand. The production across all sectors has been reduced due to the pandemic-induced restrictions, and subsequent shortage of raw materials.
• Major companies in the process automation market 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 process 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: Players in the process automation industry are focusing on mergers and acquisitions (M&A) to expand their reach to untapped global markets and increase their product and service portfolio.
• Expanding footprint: Market players are investing in expanding their consumer base across continents. They are banking on strategic collaborations with local vendors in order to increase their profitability.

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 or a single global supplier who provides 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. High investments are needed for solutions such as Manufacturing Execution Systems (MES) and equipment such as transmitters, process analyzers, and control valves. Case in point, installation of MESs at manufacturing sites consists of different phases including acquisition, modification, execution, operation, and consultation. This consequently adds to total expenses thus increasing the operating costs of the site.

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.