2.2.2 Market- and customer driven trends in Process Automation

Increased competition among our customer’s industries

Nowadays our customers face growing competition within their business sectors, even in the pharmaceutical sector. The consequence is that prices of their final products, e.g. chemicals, pharmaceuticals etc. are becoming under pressure. This price pressure leads to a stronger pressure on their operational costs to hold or improve their profitability level. Hence it is imperative for companies to gain increased efficiency in their production as well as maintenance processes. As a consequence, suppliers like MTPRO are increasingly forced to contribute to companies higher demands so expectations become more demanding, as illustrated in the next paragraph.

Increased expectations on customer side

Derived from the need of improved operational costs our customers are inclined to put the stranglehold on the supplier’s product prices. Many purchasing managers, especially with larger customers, make attempts to push MTPRO into the commodity corner. Being in this corner means availability and most important price are the only differentiators among commodity suppliers. Fortunately, growing professionalism among purchaser and buying centre is seen with some customers as they evaluate the longer term value offered by suppliers rather than solely the price deal. Therefore companies expect suppliers like MTPRO to make profitable contribution to assist them to improve their Plant Asset Management.

The objective of Plant Asset Management is to optimise the utilisation of the physical assets such as analytical instrumentation. Furthermore, maintenance, repair and servicing of these assets shall be managed at a cost-efficient level. The prerequisite to contribute to a customer’s plant asset management is a thorough analysis of the installation base. After such an analysis a detailed proposal needs to be worked out by the supplier. This approach is the only successful way to distinguish ourselves from competition to become a trusted advisor and strategic supplier.

In addition, companies request suppliers like MTPRO to assist them to enhance their productivity, respectively profitability, by providing them equipment that increases production output, yield and quality improvements of their products. To be able to accommodate these requests requires even more time for a careful analysis as well an added-value solution offering.

Efforts for reduction of suppliers

It has become evident that larger companies, in particular the chemical producing industry as well as the beverage sector, strive to narrow the supplier base. This strategy does not necessarily mean that they only want to go with one supplier for analytical instrumentation. The subject multiple sourcing is still advanced by many companies. However, it is noticeable the reduction goes from several to mostly two vendors per product line. To be able to stay in the game, especially C-suppliers like MTPRO need to make added-value contribution for TCO and productivity improvements. Key is to get to know what really bothers the customers and what their decision criteria are. If a supplier fulfils the requirements there is a rising trend towards agreeing on local, regional or rarely global agreements.

Growing complexity of customer’s buying centre

Particularly with larger companies with more complex enterprise structures more people and departments are involved in purchasing decisions. Supplier’s market organisations have no choice but to investigate who the members of the buying centre are. Moreover, once the buying centre is analysed the exact needs, wants, motives of the individual parties have to be assessed to be able to present the sales proposal in the most effective manner.

Competition becomes increasingly fierce

Although we have introduced plenty of innovative solutions in recent years our competition has gained ground on many of these innovations. It becomes obvious that the privilege for long-standing Unique Selling Propositions (USP) threatens to gradually fade away over time. Technical innovations spread quickly and competition picks them up to replicate them. MTPRO still possesses some USP, which we strongly push into the marketplace to gain a sustainable advantage over our competitors. However, it is most likely merely a matter of time till something alike is in the competitor’s portfolio. Fortunately, MTPRO has the benefit of having a patent lock on some product lines. Nevertheless, once again the main differentiator is achieved by a more dedicated account management as well as the fulfilment of customer’s requirements such as TCO and increased profitability.