* OEM – Original Equipment Manufacturer.
Early in my controls career I had a symbiotic relationship with a machine builder. I went so far as to move my company a few miles down the road and locate right next door; we cut a hole between the office suites and my employees could go over there and work on their machines as well as come back and work on our projects. I have mentioned this company, NAS, before. Because we specialized in control systems, NAS would often take on jobs that were not in their area of expertise, which was packaging. We built a lot of inspection and test equipment, assembly machinery and material handling systems. Because of this symbiotic relationship where we each had our own areas of expertise, things generally worked out pretty well. I have made my opinion on custom machine building known before though; it is one of the riskiest businesses you can be in and in general, as a business model I don’t think it works well.
Eventually NAS created a number of standard machines including a very successful vertical bagger and a sleeve wrapper. They found that they could be much more successful and predictable if they concentrated on what they did best. To this day they are a solid OEM that stays well within the bounds of their expertise. Because of their previous experiences in custom machinery they have also seen a lot of other kinds of systems and have an excellent controls department with lots of experience. As a matter of fact, three of their employees worked for my previous company and transitioned there when I closed in 2006.
NAS still uses PLCs for their controls. Packaging machine manufacturers often do this to allow flexibility, scalability and an easy method of interfacing with other machines. They will also sometimes take on low risk projects that work well with their systems such as material handling, custom infeeds and simple inspection.
Other OEM companies often use embedded controllers or discrete controls for their products. Contrast the description of NAS above with that of another OEM, “Company X”.
Company X was formed in 1924 to manufacture compressors. Since compressors are an important element of freezers they also developed expertise in that area. Compressors are fairly straightforward pieces of equipment generally from a controls standpoint, mostly motor/valve control and pressure/temperature monitoring.
As Company X grew internationally they kept most of their R&D in the home country. Their controllers were board-level or embedded controllers that while cost effective and consistent to manufacture, were not easily customized or modified.
As part of the sales process, sometimes the customer would ask if Company X could provide integration services to interface with their equipment. Like NAS, this generally took the form of material handling, inspection or data acquisition. Since the compressor controllers were not easily customized, this usually involved a PLC.
When establishing a presence in another country, Company X usually sent their own highly trained controls and mechanical engineers there to help with training new hires in the equipment. Unfortunately, since the main control boards were made in the home country, the jobs in a subsidiary did not require particularly experienced engineering. Most of the modifications simply required sizing motor controls and some CAD work. This meant that the engineering jobs didn’t pay very well which also contributed to turnover.
When a custom job was bid, it was easy for these engineers to quickly get in over their heads. The engineers from the home country were usually pretty good integrators, but couldn’t speak the language of the country they were working in well. It also made training difficult. This led to dissatisfaction on the customer side which in turn led to loss in market share.
There are a number of lessons that can be learned from the way Company X performed in setting up overseas branches that I will also relate at a later date. Of course I am not using a real name because I don’t wish to create any further difficulties for them, they already have enough. There are some commonalities I see with other OEMs in this story though.
1. OEM’s main expertise is usually in the technology they concentrate on. Many OEMs even contract out their controls design and panelbuilding. This especially holds true for simpler products, winches, pumps and conveyor systems come to mind. This generally makes them less than adequate integrators.
2. OEM salespeople often run into applications that require expertise outside their experience. Like salespeople in a lot of fields, it can lead to committing to things that their engineering departments can’t accomplish.
3. Unless OEMs are constantly doing challenging integration jobs, it is difficult for them to warrant hiring experienced talent to come up with good custom solutions. It simply costs too much. Most engineers who have done exciting and challenging custom jobs also have no urge to go work on the same old equipment all the time at an OEM or even at a manufacturing facility.
In general, the documentation I see coming from many OEMs is also often substandard. When a control system is fairly simple, equipment manufacturer’s often create a page or two of electrical schematics with no line numbers or improper component identification. PLC programs are also generally disorganized and undocumented.
Of course there are exceptions to this, NAS being one. Companies that have experience interfacing their equipment and putting it in industrial facilities generally do a good job. The packaging industry is an example of this; they have usually been in the industrial arena for a long time.
I have also experienced a lot of OEM test equipment that is inadequate for an industrial environment, more suitable for a lab. Test and measurement equipment interfacing with industrial machinery is common, so providing standard interface points such as relays or 24vdc I/O should not be unusual. Dual channel safety interfaces should also be a standard element for OEM equipment that has moving components.
If an OEM finds it necessary to perform integration services and auxiliary equipment and doesn’t have the capability within their own company, I would suggest finding a company to partner with on these types of projects. It can save lots of headaches and lost profit in the long run.