Benchmarking study forecasts significant market changes in the large industrial plant manufacturing sector


In the course of ongoing digitalization, the construction of large-scale plants is facing significant market changes, for which companies have to prepare intensively. This is the core result of a new, broad-based benchmark study by the VDMA Large Industrial Plant Manufacturers’ Group (AGAB) and PwC Capital Projects & Infrastructure.

Digital, data-driven services and services move into the focus of customers
The study examined the state of digitalization in international large-scale plant engineering and the market requirements in 2025. The leading German companies were compared both with traditional and with new, more digitally driven competitors worldwide, their market position was benchmarked and possible fields of action were identified.

Based on a quantitative survey of more than 40 plant manufacturers and numerous interviews with international industry experts, the study shows that the technology-oriented business models ("technology enabled"), which dominate the market today with a share of around 60 percent, will lose considerably in importance by 2025. By contrast, digital, data-driven services ("open digital") will more than triple their market share by 2025. "In this changing environment, skills such as agility and flexibility are becoming increasingly important," explained Dr. Hannes Storch, member of the management board of Outotec GmbH & Co. KG and deputy spokesman of AGAB, on the occasion of the publication of the study in Frankfurt.

Large plant manufacturers develop skills for the digital age
Large-scale plant construction companies have to adapt quickly to the changing market situation and the new customer requirements. Based on a digital reference model, the study has identified 18 specific capabilities for large-scale plant construction that are necessary to fully exploit the market potential in 2025. These include, for example, knowledge of change management and agile project management methods, the promotion of business incubators and the development of intelligent logistics concepts which help to optimize construction site processes.

Transparent processes and cooperations become success factors
"The analysis shows that German large-scale plant manufacturers have already achieved remarkable successes in building up the required capabilities and are clearly ahead of their competitors in some areas," explained Christian Elsholz, plant engineering expert at PwC and project director of the study. This is particularly the case with the further development of cyber security and virtual reality, which 94 percent of German plant constructors regard as crucial future capabilities. "Against the backdrop of radical technological upheavals and rapidly changing customer requirements, however, it is important that companies continue to push ahead with their digital transformation," said Elsholz. "Transparency of processes and close cooperation with partners within the value chain, particularly within the framework of integrated platforms, are becoming key success factors.

Intense competition for employees with digital competence
In contrast to international competition, German large-scale plant constructors rely predominantly on the development of internal skills in connection with digitalization. Only to a small extent they do purchase external know-how via the market. "In order to successfully master digital change, the industry must open up more strongly and retain more experts with a high level of digital expertise," says PwC manager Elsholz. “The company's own scope for decision-making, attractive development opportunities and modern working time models have proven to be helpful instruments.”

Study is a guide to digital success
In conclusion, it can be said that the large-scale plant construction industry sees digitalization increasingly as an opportunity to become more efficient and to optimally meet customer requirements. It also became clear that considerable investments are still required in order to meet the expected changes in the market by 2025. "There are no general solutions for this. However, the study provides a guideline that each company can use individually to define the key steps to digital success," summarizes AGAB spokesman Storch.

You can download the final study and a photo of Dr. Hannes Storch at this page.

Do you have any further questions? Klaus Gottwald, VDMA Großanlagenbau, telephone 069 6603 1264, and Patrick Torka, PwC, telephone 0211 981 4313, patrick.torka@pwc.comwill be happy to answer them.
The VDMA Large Industrial Plant Manufacturers´ Group is the most important network of large-scale plant construction companies in Europe. It represents an annual order intake of 18 billion euros and around 54,000 employees in Germany. With a world market share of 15 percent and an export quota of more than 80 percent, the companies have a considerable locomotive effect on the domestic supply industry.