Case Study 1

North American Industrial Automation Controls Supplier

Manufacturer of Electronic Industrial Controls



Our customer was (and is) a leading North American supplier of electronic industrial controls. This company has manufactured – for over 100 years – a broad range of control products such as relays, pushbuttons, motor starters, operator interface devices (displays), programmable logic controllers, motion controllers and variable frequency drives. The company has been a premium supplier of high quality products, with focus on providing complete solutions with excellent customer support.

Relay Control Panel

A primary growth area for this company has been programmable logic controller (PLC) products. PLCs offer customers a modern electronic replacement for electromechanical relays and provide greater controls change flexibility, reduced installation wiring costs, much smaller space needed and ability to reuse for future applications. In early years of the PLC market, controllers were designed with focus on the appearance and function of a highly durable product. Suppliers believed such rugged characteristics were required in order for customers to transition from electromechanical relays to the new electronic PLCs. For example, one of the first widely accepted PLC units used a metal mounting plate and cast metal cover. Other products used heavy metal chassis with large plug-in modules. Although such designs were successful in creating both the appearance and functionality of highly durable products, the unit cost was high. This paper describes an initiative to achieve lower cost PLC control products.

Early Programmable Logic Controller

Customer Challenges

Our customer was very successful growing market share in the standard, large PLC market. Their PLC products were used to control complicated industrial machines and processes. Such PLC products were not, however, cost effective for use on simple industrial applications such as stand-alone machine tools, conveyors, plant doors, plant lighting, etc. Our customer viewed these applications as a high growth market, and desired to participate in this business. To participate, however, much lower cost PLC products were required. Unfortunately our customer’s engineering and development resources were completely allocated to their existing products – they did not have capacity to development new low cost PLC controllers. In addition, there may have been perceived high risk within our customer’s management team regarding development of such low cost controllers. At that time there was uncertainty regarding market acceptance and sales success of low cost PLCs. The methods to achieve lower cost controllers included using plastic cases and pre-packaging input/output electronics – both representing fundamental changes to the traditional PLC product. It was not known if customers would accept a revised product approach that used more plastics, had integrated inputs/outputs and obviously had the appearance of a lower cost solution. So in summary, our customer was dealing with the following challenges:

  • Objective was to obtain a line of new, low cost PLC products
  • They needed to accurately match new product features and appearance to customer expectations
  • They needed to minimize risk by leveraging external resources, freeing their resources for more core development activities

Customer ‘Must Haves’

Based on the above background and challenges, our customer began investigation of design and manufacturing alternatives. Their objectives in this investigation were several, including the following:

  • Identify a supplier with skilled engineering capability in new product development
  • Identify a supplier with resource capacity to add future variant products
  • Obtain high volume manufacturing capability for future product sales growth
  • Obtain the highest quality manufacturing and engineering change control possible
  • Obtain consistent supply of products minimizing shortage and back order risk
  • Arrange for long term continuation engineering and product support, and
  • Protect customer’s proprietary information

Why DENSO WAVE Was Selected

There were a number of reasons why DENSO WAVE was selected. The primary reasons for selection included our business philosophy, our engineering capabilities and our manufacturing quality. In terms of business philosophy, our charter has consistently been to develop long term and broad reaching partnerships with a limited number of original equipment manufacturers (OEMs). To achieve this we offer development and manufacturing of products unique to each OEM customer, and sell these products only to that customer. We do not sell such products to other customers. In addition, it is required that we protect our customer’s intellectual property, preserving their market uniqueness. Such a business philosophy was perceived as beneficial to our customer, providing support of their growth in a highly competitive market.

In terms of our engineering capabilities, we had a proven history of advanced electronic product developments. These products incorporated a broad range of advanced design, packaging and manufacturing technologies. Of particular value to the customer was our experience developing industrial grade controls, and our design standards that ensured long product life. Our experience included firmware and software development, with proven capability and success.

In terms of manufacturing quality, DENSO (our parent) has been recognized worldwide as a leading quality supplier. Our quality processes have been driven by the stringent requirements of high volume automotive components, which have been DENSO’s primary market for over 60 years.

What We Did

Our first project with this customer was a low cost PLC product that used integrated input/output electronics, integrated power supply and plastic packaging. Over time we expanded this design into a family of products with different functionality and input/output mixes. This product family met the requirements of a broad application range by offering lower pricing appropriate for such applications. In addition, regardless of lower cost, these products quickly demonstrated a high level of reliability and ruggedness. The combination of such lower cost and demonstrated reliability created customer acceptance across the new markets. The new PLC units were applied in ways never anticipated, driving a tremendous market expansion.

Modular PLC Product

Following the design of a low cost PLC product family, we worked with the customer on a variety of industrial controls solutions, including modular controller products and input/output systems. Our partnership evolved to where we functioned as a valuable extension to the customer’s engineering and manufacturing capabilities. In all our development projects we helped the customer complete detailed product functional specifications. We developed, tested and manufactured the subject products for our customer to sell. Our skilled engineers implemented product designs, formulated test plans and helped prepare manufacturing processes. During product developments we designed the required hardware, product software, mechanical packaging, labels, user manuals and cartons. We worked closely with the customer to qualify and test the developed products. And, as with all products we manufacture, we provided the customer with product support and life cycle continuation engineering.

The Result

The overall result of our developments for this customer was remarkable growth of both companies. The low cost PLC products dramatically increased applications for programmable controller technology. The lower price points enabled cost effective use of these products in a broad range of new applications, such as plant door operation, conveyor control, small stand-alone machine control, lighting controls, brewing controls, etc…the new controllers greatly expanded PLC market size. Our customer’s sales grew significantly in meeting this larger market. From our perspective, we grew significantly through manufacturing many additional products with high volumes. As a result, our partnership delivered high levels of mutual success.