The Automation World Is a Service World

My first job out of college in 1969 was as an instrument engineer in Monsanto’s corporate engineering department, which had more than 800 engineers.

John Berra, retired Chairman of Emerson Process Management
John Berra, retired Chairman of Emerson Process Management

It was a totally in-house engineering contractor. We engineered the control strategies, and then dutifully translated everything into beautiful four-column spec sheets. We specified transmitters, valves, controllers and recorders. We determined ranges, materials and sizes. We designed panel boards. The suppliers submitted pure hardware quotes based on our specs. In this era, automation company revenue had very little service, and most of that was repair.

Since then, the automation world has changed dramatically. End user companies downsized their engineering staffs. The group I worked for no longer exists. Technology changed as microprocessors began to permeate everything. Distributed control and programmable logic emerged. Smart instruments, software, networking and operators sitting at screens came into being. Digital integration of devices and software became a real challenge. Both end users and engineering contractors have great difficulty keeping up with everything. The simple times of the four-column data sheets have disappeared.

As a result of these dramatic changes, a concept called main automation contractor (MAC) has emerged on large projects. With a MAC, the automation supplier (usually the control system supplier) takes complete responsibility for all aspects of automation. The supplier engineers the control strategies, supplies its own products, procures other products, creates all the documents, does all the integration, and supervises installation and startup. The whole automation contract is either a fixed lump sum turnkey (LSTK) or time and material, or a combination of both. Today’s major automation companies have geared up to do this. Most of them now have services at 20-30 percent of revenue.

>> Managing MACs and I/O Count: The oil & gas industry is relying more on MACs to address challenges in workforces, resources, complexity and more. http://bit.ly/10E8ZF0

Why has the MAC become so popular? First, a MAC gives a single point of responsibility. When something isn’t right, the MAC has to make it right. Second, the automation supplier knows the most about its products and systems, and also is totally immersed in industry technology changes every day. Things move a lot faster than they did in my day, and it is difficult for any end user or contract engineer to keep up with all the nuances of this fast pace of change. The MAC has a lot of experience in connectivity and is likely to know how to move data to enterprise software, as well as connect items from multiple suppliers. Many end users have compared MAC projects to the traditional approach and found that MAC projects are done faster and at lower cost.

If you are interested in using a MAC approach, here is some advice. Take a thorough look at the supplier’s tools and methodology for project management. Ask to interview the project manager who will be assigned to your project. Ask for a set of reference customers who will be willing to share their experiences. Check out the supplier’s local capability at the project site. After the startup teams go home, you want to know that the local organization is strong. 

If you don’t really have a good handle on what you want, spend time on that first, before you ever request a MAC quote.  It is hard for an automation supplier to give a firm price on squishy specs. If the project is fluid, it might be better to start with a time and material contract and then switch to LSTK once firmer ground is achieved.

The MAC approach has proven to be a viable way to implement projects. My old four-column spec sheets are headed to the Smithsonian.

>> John Berra, setpoint.johnberra@gmail.com, is retired Chairman of Emerson Process Management.

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