Executive Overview

The Offshore Technology Conference (OTC) is still the premier trade show for the oil & gas industry in North America, with a large international presence and a huge range of vendors and solution providers from across the industry. These range from national oil companies, like Saudi Aramco to shipbuilders, equipment manufacturers, engineering firms, and automation and controls providers. With the depressed environment surrounding oil and gas capital expenditures and continued lower oil prices, ARC Advisory Group was eager to see what the mood and crowd would be like for 2015.

Sourcing from low-cost countries, a critical component of today's global supply chains, is the norm in the apparel industry. For many decades, European and US apparel brands and retailers benefited from outsourcing production and value-added activities to low-cost countries, such as Bangladesh, China, India, and Vietnam.

At this year's Hanover Fair, 6,500 exhibitors presented their industrial products and solutions. With 220,000 visitors, attendance was at about the same level as 2013 – the last year in which the show's scope was com-parable. Yet with nearly a third of all visitors coming from outside Germany, the share of foreign attendees was much larger than in previous years. One reason for this is the keen interest in finding out how German industrial companies are dealing with Industrie 4.0.

Automation suppliers saw their revenues slip by about half a percent in the first quarter of 2015. The precipitous drop in oil prices, along with the strong dollar, had a significant impact on growth for many process industry suppliers. The corresponding drop in order activity does not bode well for business in the year ahead. Discrete automation suppliers continued to benefit from stronger investment activity in the electronics and automotive industries in Asia and North America, and Japanese sup-pliers continued to gain disproportionate benefit from a weaker yen.

ARC Advisory Group conducted an extensive industrial cybersecurity program at the recent 2015 Industry Forum in Orlando, Florida. Keynotes, workshops, end user case studies, and a panel discussion among experts about securing the Industrial Internet of Things (IIoT) provided attendees with a variety of valuable learning experiences. Cybersecurity was also the focus of many suppliers in the Forum exhibition area.

Industrial cybersecurity was a key topic at ARC Advisory Group's recent Forum in Orlando, Florida, with keynotes, workshops, technical sessions, and exhibits by leading suppliers. The Automation Federation organized the Monday morning workshop that kicked off the cybersecurity pro-gram. The workshop included presentations by leading standards developers, NIST and ISA, energy giant Exelon, the FBI, and two North Carolina public-private partnerships involved in supporting small manufacturers and cyber workforce development.

Arla Foods, a farmer-owned global dairy company with headquarters in Denmark, has made significant investments in technology to improve its operations. These include standardizing manufacturing execution system/manufacturing operations management (MES/MOM) applications and integrating these with business planning applications, such as enterprise resource planning (ERP). The company has acquired many new sites and this standardization effort has significantly reduced the time required to integrate a new site with the ERP.

Enterprise manufacturing intelligence (EMI) and operational intelligence systems help companies tap into the vast quantities of data they collect from their manufacturing and other operations so they can turn this data into actionable information for decision support to help them run their plants more efficiently and profitably. Saudi Aramco's Abqaiq Plants uses EMI to reduce energy consumption and associated costs.

The Control System Security Center (CSSC), which plays a pivotal role in developing industrial automation cyber security measures in Japan, recently celebrated its third anniversary. In response to the increasing cyber security challenges, the CSSC has strengthened its efforts to establish and manage test bed facilities, develop effective certification systems, research and develop technology to enhance control system security, develop better incident analysis technologies, and develop human re-sources.