PLCs to play key role in business

Edited by the Engineeringtalk editorial team Oct 24, 2005

As the world economy rebounded to a strong year in 2004, the heightening demand from various emerging markets created robust growth for the worldwide PLC market.

As the world economy rebounded to a strong year in 2004, the heightening demand from various emerging markets created robust growth for the worldwide programmable logic controller (PLC) market.

The worldwide market for PLCs is expected to grow at a compounded annual growth rate (CAGR) of 5.9% over the next five years.

The PLC market was nearly $7 billion in 2004 and is forecasted to grow to over $9 billion in 2009, according to a new ARC Advisory Group study.

Many elements of modern information technology (IT) are being incorporated into PLCs, raising their attractiveness as a centre stage plant floor controller among worldwide manufacturers.

"Global manufacturers are challenged to seek automation equipment that supports their business objectives such as improving return on assets (ROA), enhancing overall equipment effectiveness (OEE), and providing real-time performance management (RPM)".

"The PLC, being primarily an automation controller designed with modern IT features, plays a key role in supporting these objectives", according to Senior Analyst Himanshu Shah, the principal author of ARC's "Programmable logic controller worldwide outlook".

Although overall capital expenditures have remained flat in previous years, globalisation is increasingly causing manufacturers to allocate ongoing investments towards automation in order to drive down costs and raise the quality of manufactured products.

A modest turnaround in overall capital spending in 2005 and beyond is expected as manufacturers gear up production to meet rising global demand.

This turnaround should result in a growing demand for automation equipment, including PLCs.

Besides automation, applications for PLCs are also driven by crucial factors such as energy saving, condition monitoring, safety, collaborative manufacturing, and real time optimisation strategies.

PLC products are continually improving to meet rising challenges in the areas of functionality, communication capability, size, software, implementation tools, and diagnostics.

ARC's market outlook study identifies products, platforms, and communication technologies where large investments have been made to satisfy global end users.

Demands for open standards, multi-control disciplines, modular architecture, and comprehensive automation solutions software is leading to an expanding role for PLCs, especially for high-end PLC applications.

Consequently, a new role of the high-end PLC will shift towards the PAC (Programmable Automation Controller) for plant and factory automation.

The global economy, with pushes for new infrastructure, an expanding manufacturing base, and modernised plants in many developing countries in Asia, is certainly driving market growth.

ARC's market outlook through 2009 also identifies new dynamics in Japan and Latin America which are creating new opportunities for PLC suppliers.

Globalisation has invited warfare in the PLC market as well.

PLC suppliers are vigorously implementing strategies to expand their market share in developed regions, rapidly gain market share in developing regions, and stay vigilant in their home market to fend off nonindigenous suppliers.