Europe leads the way in automatic handling

Europe looks set to continue to lead the way with technological developments in the field of automated handling as manufacturers begin to focus on research and development.

Together with growing end-user confidence, this is expected to support a regeneration of growth rates in this market in the near future and create a more suitable environment for long-term industry expansion.

Research from industry analysts Frost and Sullivan (May 2001) valued the European automated materials handling (AMH) equipment market at $2.02 billion in 2000, following a period of continually high demand from an expanding end-user base.

Steadily increasing growth rates are forecast to return towards the end of the forecast period as development continues within all geographical regions and product segments.

Frost and Sullivan forecasts revenues will reach $2.51 billion in 2007.

Research analyst Robert McNally explains the trend: "Many industrial sectors have invested heavily in new AMH equipment during recent years in order to cope with rising levels of competition within European markets and compete more effectively with Asian manufacturers.

However, a mature market environment has led to over-capacity in some product segments and adversely affected growth at the total market level.

"Growth rates are expected to pick up towards the end of the forecast period as cyclical trends move in a more positive direction for European distribution sectors, and technological awareness increases throughout the end-user spectrum.

The greatest advance is expected in the robot handling sector, while an above average rise is also projected for carousel systems.

"Research and development (R and D) continues to play a vital role.

Although much of the technology is well established and largely unchanging, there is still considerable effort devoted to making improvements that may prove critical in the marketplace.

Most companies in this market maintain on-going programmes of R and D in order to remain competitive in their own fields of operation.

This acts to boost end-user confidence in system manufacturers because it facilitates ongoing improvements." Ease of use is a major end-user demand driving the development of AMH systems.

As work forces are cut back and time constraints become more important in manufacturing, original equipment manufacturers (OEMs) and end-users alike, including companies with dedicated handling specialists in their staff, are demanding solutions that are easier to install and use.

"The perception of newer systems as highly complex tools requiring extensive operator training and specialist programming is something that has held the market back.

In recent years, designers were forced to become significantly more concerned with the user-friendliness of their operator interfaces and stations.

This trend is showing signs of intensifying as more and more potential end-users explore the possibilities of implementing new AMH systems in their processes," Mr McNally continues.

The study found there is a need for improved space utilisation.

"The paramount factor under consideration when a manufacturer decides to purchase a new automated storage and retrieval system (AS/R) is the issue of improved space utilisation," explains Mr McNally.

"This affects all sizes of company throughout the end-user spectrum and forms the basis of past and future growth in this sector." "As land prices in Europe continue to rise and competitive forces create the need for manufacturers to improve the overall efficiency of their processes, the demand for AS/R systems that use factory and warehouse floor space most effectively is heightening.

This is driving system suppliers to focus more of their attention on research and development, and is consequently fortifying growth in this market." However, the market is being hit by high labour costs and land prices, coupled with high operating standards and stringent environmental laws in Europe.

These factors are encouraging end-users to invest in production plants and distribution centers outside of central Europe.

The study found this trend was most evident amongst automotive and electronics manufacturers.

Areas attracting considerable invest are Eastern Europe and Asia where land and labour costs are often considerably lower and growth rates are high.

The overall maturity of the AMH market is also forecast to have a negative impact on market growth, with some product saturation.

New developments and products should help ease this.

The study splits the market into six segments: automated conveyor systems, carousel systems, robot systems, automated guided vehicle systems, automated storage and retrieval systems, and overhead conveyor systems.

Frost and Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of Instrumentation, Control and Engineering markets for trends, market measurements and strategies.

This on-going research is utilised to complement a series of research publications to support industry participants with customised consulting needs.

Free executive summaries of all Frost and Sullivan reports are available to the press.

Report Code: 3947, Publication Date: June 2001, Price $5,000.

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