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Automation Contractors Versus System Integrators

Many automation vendors not only offer the hardware and software products needed to automate a packaging facility, but the design and implementation services as well. For particularly large projects, a vendor sometimes serves as the main automation contractor (MAC), providing certain system integration services themselves and contracting for the rest with other service providers including other system integrators.



According to a Frost & Sullivan report, “Main Automation Contractors: Transforming the Automation Supply Landscape?” (www.frost.com, Feb 19, 2008), the MAC concept originated back when engineering, procurement and construction (EPC) firms were responsible for the entire lot of front-end engineering and design, detailed engineering design, procurement of systems and final construction—automation and all. An EPC company would procure the required automation equipment separately and then install it.

More recently, however, the MAC concept has developed to give the automation vendor supplying those products earlier and greater involvement in the actual execution of the project. According to Frost & Sullivan, “The automation vendor now assumes the responsibility of coordinating the activities among the small suppliers, system integrators and the end user.

“As the MAC is more actively involved in the project, this can result in greater cooperation between the MAC and the end user, bridging any gaps that exist when EPC companies hold greater responsibility in projects.” This leaves the EPC free to concentrate on the big picture, including construction of the facility in which the automated packaging line is to reside, installation of the required utilities and implementation of the packaging line itself. But this adds to the cost of additional personnel and technical resources that the automation vendor must devote to the project.

On the other hand, automation vendors claim their involvement as MACs reduces capital and operating expenditure by generating a net reduction in project costs, bringing the system online faster and optimizing its performance and reliability. After all, they argue, it's generally more economical to involve subject-matter experts early in the design of any project than to spend time fixing preventable mistakes down the road. System integrators earn their keep by engineering automation systems with other vendors' products. They argue that they, too, provide accurate estimates and cost controls, select appropriate equipment, integrate the equipment with the process to be automated and do it all at a fixed price. They can do this using any vendor's products—whatever works best and costs least.

Automation vendors counter that most system integrators lack the experience and financial wherewithal to serve as the MAC for large-scale automation projects. And it's true that more than half of the system integrators listed in the Packaging Integrator Guide report annual revenues of less than $5 million. Apparently, the best choice for automation projects remains subject to debate.







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