Machine building: challenges, opportunities and how to respond
Two experts share their insights into how can machine builders overcome problems and make the most of possibilities available to them right now.Ask machine builders about their biggest challenges and you’re likely to get some forthright responses. Ask what they can do to address these issues and answers might not be quite so forthcoming – which is why we approached two experts for their insights and advice.Kristian Olsson is vice president for the automation and control category at RS Components, while Tony Hague is CEO of PP Control and Automation, a contract manufacturing business that provides strategic outsourcing solutions to large global OEMs in sectors including machine tools, packaging, printing and pharmaceuticals. As he puts it, “We offer design support and manufacturing solutions to people that make machines.”Here Olsson and Hague discuss challenges in the machine building sector and, perhaps more importantly, share advice on how to overcome them. “With every problem, there’s an opportunity,” says Hague.
“Machine builders are faced with supply chain challenges,” begins Olsson. “A customer may have a preference about what products, solutions and brands to use. The machine builder probably has options and can use alternative parts, but there is risk associated with that.”Hague agrees that sourcing the right materials is a major problem. “Two words: supply chain,” he says. “Speak to anybody in manufacturing right now and they’ll say the thing holding back economic recovery, our ability to build for our customers and the ability of our customers to build more is the absolute carnage that is the supply chain.”Hague also thinks that supply chain disruption is making it harder for businesses to respond effectively to other demands such as energy price increases, inflation and wage expectations. “If we could solve the supply chain, we could take care of these pressures,” he adds. Why is there “absolute carnage” in the supply chain right now? “The lack of production of key electronic components throughout the COVID period,” answers Hague. “It took a long time for the semiconductor foundries and chip manufacturers to get back to any sort of normal. By then there’s a huge backlog of demand as well as huge additional demand driven by automotive and 5G.” This isn’t just an issue for machine builders; it goes even beyond manufacturing and is affecting the wider global economy too. Plus, it isn’t solely down to the coronavirus pandemic. “This problem was already developing,” observes Hague. “COVID accelerated the problem.“It’s down to two decades of offshoring supply chains and, in pursuit of lowest cost, reliance on componentry from far afield. It’s good until it all comes tumbling down.”This shift has begun to reverse, and Olsson believes this will continue even as the impact of the pandemic eases. “I think it’s triggered a trend towards nearshoring more production,” he says. “It’s not a knee jerk reaction. The trend towards questioning offshoring was already there before the pandemic and the pandemic settled the argument. “It isn’t going to be black and white; it’s going to be about what level of risk are we willing to accept for what type of product categories. Anything that’s consumer centric – food, pharmaceutical – is an area where appetite for risk has decreased on a permanent basis.”“What does that mean for the machine building industry? You can have an even bigger focus on maintaining flexibility and automation in your production environment but you’re going to have an even bigger focus on labour costs being a challenge and lack of people wanting to do this kind of work.“That will inevitably lead to both business implications and technology implications.”
“You have to micromanage and over communicate,” advises Hague. “Over communicate with suppliers, over communicate with your customers, micromanage as much as you can.”This means taking a proactive approach to dealing with issues that arise. “Be inventive,” continues Hague. “Look at alternative paths. Sometimes there is no solution other than sit and wait but that’s not ideal so look for a work around. Don’t let it defeat you.”Focus on solutions that are available. “Don’t go back to your customer immediately with the problem,” says Hague. “They’re paying you to do more than that. Go back saying we’ve got a problem, but this is what we think we can do. We’ve got an option A, B and C.”“Maybe the solutions aren’t attractive to them but at least you’ve not given up at the first sign of trouble. That goes for suppliers. It goes for us with our customers. It goes all the way through the supply chain. Don’t just pass the problem on.”As this comment indicates, it’s during difficult times that working with trusted suppliers who take a similar approach becomes even more crucial. “You never know how good a supplier is until there’s a challenge,” says Hague. “When things are going well, even bad suppliers are good.“It’s when the going gets tough you find out who are the suppliers that step up? Who are the suppliers that are proactive and keep communicating with you?“We always look for suppliers that add value. Transactional relationships aren’t interesting to us. We want suppliers that make our lives easier in terms of vendor management, consolidated invoices, kitting, supplies delivered just in time so inventory doesn’t get tied up.“That is where suppliers like RS start adding value.”
Are you ready to seize opportunities?
“I think with every problem, there’s an opportunity,” argues Hague. “You can just see the problem – or you can look at it from the other side and say how can we create opportunities from it and how can we solve problems for people?“Then there is an ability to grow on the back of it and create better partnerships, better collaborations and scale your business.”One way to do this is by exploring the potential of emerging technologies. “How can you use that technology to enable something if you’re a machine builder?” asks Hague. “AI, digitalisation, smart factories: what benefits could these bring in your world, in your factory, for your customer?This is an approach that PP Control and Automation have adopted. “We’ve done a lot of work creating collaborations with local universities and “the catapult centres”, so we understand what’s going on,” explains Hague.“You’re not ignorant of the technology but trying to find out where the link is in your organisation. A lot of people don’t make that link. They just see the technology and think it’s interesting but don’t think how it could change the way they do business internally and the way they do business with their customers.” Many organisations need support to fully explore the potential of technology, says Hague. “There is a big problem at SME level where there is a lack of awareness and knowledge of how to apply robotics and automation into your business and enable you to drive productivity, agility and cost effectiveness. “To seize the opportunities manufacturing has right now, reach out to people that know stuff you don’t know. Find the people that know your gaps.”Olsson echoes Hague’s views. “With machine building, there is a big need for continuous learning and development to maintain the expertise and skills of engineers, especially given the complexity of automated solutions associated with connectivity.” Once again, trusted suppliers can play a pivotal role in this. “What RS offers machine builders is a breadth of range and an ability to bring new products and innovative solutions to market quickly,” continues Olsson. “Something better, faster, cheaper, more reliable.“We’re a good vehicle for keeping you up to date with that.”
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