Process optimization to grow 9%/yr to 2015 - study
The real-time process optimization and training (RPO) market is expected to grow at a compound annual growth rate (CAGR) of over 9%/year over the next five years, according to a new study from ARC Advisory Group.
The market was slightly more than $1 billion in 2008, but dropped during the global recession to slightly over $950 million in 2010, the study says.
The market is expected to reach more than $1.5 billion in 2015.
The RPO market has rebounded from the lows of 2009, and is expected to return to pre-2008 growth as the global process industries need for safer, more efficient operations continues.
“The global economy has still not returned to its pre-2008 optimism,” said Dick Hill, vice president and coauthor of the study. “The economic slowdown adversely affected growth but the market will rebound as many of the issues facing manufacturers, like reducing costs, still require solutions such as those offered by RPO suppliers.”
The RPO market consists of three unique types of applications: advanced process control, on-line optimization, and training simulation and control validation software.
Advanced process control includes model-based software to direct and control process operations. On-line optimization continually monitors the state of the process and through a reference model predicts an optimum operation path.
Meanwhile, training simulation and control system validation are real-time dynamic simulators designed to train process operators and verify control system functionality.
Global economy continues to be major factor
The recession that began in 2008 affected all corners of the globe and is still the single biggest influencing factor on growth of the RPO market. Much of the industrial world was forced to curtail capital project expenditures and RPO investments in the short-term.
Cautious optimism is returning.
Once again, global growth is driven by developing regions of the world like China, India, Brazil, Russia, and other parts of Eastern Europe along with the Middle East.
Although even these regions were affected, the impact was less than the developed regions of the world. The fact that RPO solutions help companies save money is important to all regions of the world.
RPO solutions lower costs, improve margins
Process industries looking to reduce costs and improve profitability are focusing greater attention on efficiency improvements and their customers’ needs. Quite often, this requires improving agility as well.
Advanced process control and optimization solutions play an important role in achieving endeavors that result in higher return on assets, according to the authors.
Over the years, advanced process control (APC) has decisively demonstrated its value. Many leading companies have successfully applied APC to their most important process units.
Significant benefits include increasing throughput (although not critical when not capacity constrained), improving yields, reducing energy usage, reducing raw material usage, improving product quality, and improving plant stability, safety, and responsiveness.
APC implementations generally offer payback in less than a year and often much sooner. Manufacturers are increasingly recognizing these benefits and understand that they must pursue APC solutions or risk severe competitive disadvantage to those that have already adopted these solutions.
On-line optimization goes beyond advanced control to optimize processes based on an economic objective function. On-line or real-time optimization represents the pinnacle achievement in process optimization.
Solutions targeted at reducing costs and improving margins offer users a compelling value proposition even in economic downturns. RPO solutions address issues that are paramount in today’s business climate, the study says.
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