Automation and control firms in danger

Edited by the Engineeringtalk editorial team Dec 8, 2005

About a third of companies in the UK automation and control systems industry are facing failure, according to a survey of 751 companies by independent consultant Plimsoll.

About a third of companies in the UK automation and control systems industry are facing failure, according to a survey of 751 companies by independent consultant Plimsoll.

It found 280 companies selling less than last year and 317 making less profit than last year, with 224 of those surveyed in trouble.

The report shows some established names are in real jeopardy.

It found that 185 companies were carrying more debt, 44 companies saw their overall performance dip and 211 companies were making a loss.

Out of all the companies rated by Plimsoll Publishing as in danger in the UK two years ago, 85% are now in receivership.

ASR Technology, which was not on the troubled list, believes it has succeeded because of the way the company is run.

"Our business has changed vastly in the past five years and we have adapted and responded to the changes," said Altaf Rahman, ASR's Sales Director.

"There are too many with a range of products they need to sell to meet sales targets".

"Products from these companies are not focused on the unique needs of the individual clients; they are based on the benefits and features of the products to increase sales".

"Our success is due to our commitment and understanding of our client".

ASR says there are four important objectives for survival - technically superior products, commercial satisfaction, value for money and choice.

A mistake, it says, is to copy and paste requirements from one project to another.

"Your requirements are unique and should be considered as such," said Rahman.

He said clients needed to be shown that a company has a process to evaluate products in accordance with needs and not based on the benefits of the products.

"Ensure you have technical competence on the evaluation team to identify quality proposals from reams of brochures and technical jargon," he said.

"Having a good understanding of recent market advancements to ensure you have considered benefits that may be advantageous to your projects is also important".

"The client wants the right solution to meet their requirements and needs, yet the product vendor wants to make sure they sell their products and will do whatever it takes to make it look like it meets the specification".

"This is the first place where the huge gap between the client's needs and the product vendor's needs are apparent".

He said that many companies focused their energies and resources on producing a detailed specification ultimately trying to ensure they have addressed all possibilities.

"This approach sometimes leads to a very contractual relationship not conducive to delivering client satisfaction but a war of wits between the supplier and client".

"Most clients are not particularly interested in the lowest price nor the highest, they want value for their investment".

"But how much you spend is not directly proportional to the value you receive in return".

He said companies should avoid one-man-band organisations.

"They always look commercially attractive initially, but this is a short term perspective and nine times out of ten they do not survive".

"Work with companies that are established, stable and have a proven track record in the industry".

He said the Plimsoll survey was a good guide to leaders in the field.

"Look for proven initiatives, partnerships they have in place that are delivering value to their clients independent of products, proven after sales support with structured maintenance and support contracts along with a range of training courses".

He said to look for open connectivity, open protocols and industry standard hardware.

"Use products where the suppliers have many routes to market to encourage competition and choice not only for the equipment but also for services".