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ASEAN Aerospace And MRO Industry In The Wake Of COVID-19

ASEAN Aerospace And MRO Industry In The Wake Of COVID-19

The COVID-19 pandemic has an unprecedented adverse impact on the aviation industry and, consequently, on the MRO business, without clear visibility on the timing of its recovery, according to Singapore-based SIA Engineering Co. Ltd. Border controls imposed by countries worldwide and the precipitous decline in travel demand has forced drastic cuts in flight capacities and grounding of aircraft.

In response to the worsening crisis, the International Air Transport Association (IATA) is projecting a more realistic U-shaped recovery for the air travel industry, with domestic travel coming back faster than the international market. 

Many expect that because of the impact of the pandemic, activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago. Some players in the aerospace manufacturing industry, including Boeing and Rolls-Royce, have even announced workforce reduction and production cuts.

However, Boeing is seeing some green shoots. Some customers are reporting that reservations are outpacing cancellations on their flights for the first time since the pandemic started, while some countries and U.S. states are starting cautiously to open their economies again.

  • Boeing, in fact, has resumed production of the 737 MAX at the company’s Renton, Washington factory.
  • On 14 April 2020, IATA released an updated analysis showing that the COVID-19 crisis will see global airline passenger revenues drop by US$314 billion in 2020, a 55 percent decline compared to 2019. Airlines in Asia Pacific will see the largest revenue drop of US$113 billion in 2020 compared to 2019 (-US$88 billion in 24 March estimate), and a 50 percent fall in passenger demand in 2020 compared to 2019 (-37 percent in 24 March estimate).

According to Oliver Wyman:

  • As of late April, over 65 percent of the pre-COVID fleet of 27,500 commercial aircraft have been parked
  • The current trajectory for fleet reductions and lower aircraft utilisation would reduce global MRO demand in 2020 by over $48 billion, or 53 percent

Here’s an update of what has been happening in ASEAN’s aerospace and MRO industry amid the ongoing COVID-19 pandemic.

Indonesia

  • Indonesia’s national airline, Garuda Indonesia, has resumed domestic flights starting May 7, 2020.
  • PT Garuda Maintenance Facilities (GMF) AeroAsia expects to see increasing demand for MRO services from non-affiliated international airlines and has projected an 80 percent y-o-y increase for MRO services, from 71 percent in 2019

Philippines

  • AirAsia is set to gradually resume services in the Philippines on June 5, 2020, following the Philippine government’s directive of easing community quarantine restrictions in Metro Manila and several parts of the country. The resumption of services will initially be for key domestic routes, and will gradually increase to include international destinations by July 1.
  • Air Carriers Association of the Philippines (ACAP), comprising: Philippine Airlines, Cebu Pacific and AirAsia Philippines, sees the industry shrinking in the next two years. The association has requested government assistance, including waiver of airport charges and credit guarantees
  • Infrastructure projects still ongoing: Lufthansa Technik and Metrojet Engineering

Thailand

  • Airbus withdraws from MRO joint venture with Thai Airways
  • Thai Airways has filed for bankruptcy protection to rehabilitate business (to restructure under the supervision of the local bankruptcy court). Will not resume its international flight operations until 30 June.
  • The proposed MRO project at the U-Tapao Airport will proceed as planned despite Thai Airways International (THAI) entering bankruptcy. The THB11 billion project has already been approved by the Cabinet and a contract is expected to be signed in June. (The Nation Thailand)

Singapore

85 percent of the Singapore industry is involved in maintaining and repairing aircraft. Singapore also plays a small but critical role in the global aerospace supply chain, with its SMEs having a key role in MRO and manufacturing—supporting special processes, tooling, testing, logistics, manpower, and other services. (Association of Aerospace Industries Singapore)

  • SIA has announced that it will resume flights to 27 destinations and increase no. flights for other services in June & July
  • Government has set aside S$750 million of support for the aviation sector and consolidation is expected to happen over the next 12 to 18 months.
  • Collins Aerospace, which just opened a 10,000 sq ft innovation hub in Singapore, is “monitoring the evolving market conditions very closely”. 
  • Rolls-Royce has scaled down its operations in its facility which tests Trent aero engines (Channel News Asia)
  • ST Engineering 
    • expects a slowdown in its aerospace unit due to deferred MRO services and lowered original equipment production rates 
    • however, the company has secured about $838 million across its spectrum of aviation manufacturing and MRO businesses
      • The MRO contracts included A320 heavy maintenance contracts and CFM56-7B engine maintenance contracts from Chinese airlines, and a component Maintenance-By-the-Hour (MBHTM) contract from a Southeast Asian airline to provide comprehensive component maintenance services for its entire fleet of Boeing 737 and Bombardier Q400. 
    • The Group is discussing with its customers to adjust delivery schedules or address order cancellations due to the evolving crisis. As at the end of 1Q, the Group’s order book remains robust.
  • BOC Aviation, a company involved in aircraft sales and leasing has extended its Engine MRO contract with Lufthansa Technik for another five years.
  • Through the enhanced Jobs Support Scheme (JSS), companies such as ST Engineering and SIA Engineering Company (SIAEC) will receive millions in additional wage support to cushion the devastating blow that COVID-19 has dealt the aerospace industry. (The Business Times)

Vietnam:

  • Suspended all international and most domestic flights in March and April in an effort to curb the spread of the coronavirus, domestic flights have resumed since April 22, after the government lifted a lockdown order, while international flights are expected to partially resume from June 1.
  • Will not consider applications for new airlines as it looks to prioritise the recovery of its aviation sector after the impact of the novel coronavirus, according to the Civil Aviation Authority of Vietnam (CAAV). (Bangkok Post)

 

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How Is COVID-19 Impacting The Aircraft MRO Industry In SEA?

How Is COVID-19 Impacting The Aircraft MRO Industry In SEA?

Global air traffic has practically been brought to a standstill and the global airline industry has plummeted as countries worldwide implement travel restrictions and fleet groundings to curb the spread of the coronavirus.

Airlines in Asia Pacific will suffer a large revenue drop of US$113 billion in 2020 compared to 2019, and a 50 percent fall in passenger demand in 2020 compared to 2019 with the worsening COVID-19 crisis, according to the International Air Transport Association (IATA). Furthermore, IATA expects a $314 billion drop in total world carrier earnings this year. Here are some of the measures in the region:

  • Singapore Airlines has grounded 96 percent of its approximately 200-plane fleet on March 23 and resuming of operations is unclear.
  • Thai Airways has cancelled all international flights and transferred flights from Bangkok to Phuket, Krabi and Chiang Mai to its sister company Thai Smile Airways. The cancellations will last until May 30.
  • Philippine Airlines and Cebu Pacific flights have been suspended until May 15. The airlines are committed to resume operations starting May 16, 2020, depending on government mandates and regulations.
  • Malaysia Airlines suspended flight operations across its network until May 2020 for domestic and June 2020 for international services.
  • Indonesia commercial flights—domestic and international—are banned until June 1
  • Vietnam’s Jetstar Pacific has suspended international flight and cut back domestic flying

The demand for Maintenance, Repair and Overhaul (MRO) services are high dependant on the size and flight activity of global fleets. With grounded aircrafts, demand for these services diminishes and MRO providers and spare parts suppliers will suffer, according to a report by Roland Berger.

The original forecast for MRO spending in 2020 has been adjusted with a 59 percent drop for the region—from US$91.2 billion to US$42.7 billion (Oliver Wyman). Major players such as Boeing are switching its focus to defence from commercial flights to weather the crisis while Airbus has postponed ramp up of commercial aircrafts (Globaldata). Furthermore, Airbus has recently dropped out of a joint venture with Thai Airways International for the development of a 11-billion-baht MRO facility at Thailand’s U-Tapao Airport due to the impact of COVID-19.

Despite the bleak outlook, there is hope for the industry with global efforts. Companies like Rolls-Royce has established a COVID-19 data alliance to kickstart economy into recovery. Moreover, general aviation is playing an active role in the fight against the pandemic by providing transport of medical supplies and key personnel.

 

WE LOVE TO HEAR FROM YOU!

As the pandemic is still evolving, what is the future of the aviation and MRO industry? How is the situation in your region? How have you been impacted? What do you think are some strategies which could help this sector recover from the impact? 

Do send us you insights and drop us a note at  [email protected]!

 

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Bombardier Invests S$85 Million To Expand Singapore Service Centre

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Impact Of COVID-19 On The Automotive Manufacturing Supply Chain

Impact of COVID-19 On The Automotive Manufacturing Supply Chain

The COVID-19 pandemic is causing massive supply chain shocks, and the automotive industry is not spared. How can automakers build a resilient supply chain in times of crisis? Article by Katherine So.

The coronavirus (COVID-19) outbreak continues to headline the news every day, with reports citing its alarming levels of spread and the resulting widespread panic as the world grapples to contain it. However, its impacts are also rippling through industries including the automotive sector. This evolving crisis is creating a domino effect downstream and disrupting normal operations of the manufacturing supply chain. Moody’s Investor Service slashed its global vehicle sales forecast to a 2.5 percent fall in 2020 instead of the previously predicted 0.9 percent drop compared to 2019 due to the virus.

READ: Auto Sector Faces Biggest Existential Crisis Since 2007-09

Supply Chain Disruptions

China is the world’s largest automotive market and Wuhan, the epicentre of the outbreak, is one of the major auto-industry hubs in the country. This “motor city” is home to seven major domestic and foreign auto manufacturers, including Honda, Nissan, Peugeot Group, as well as hundreds of auto parts suppliers. In 2019, the province produced 2.24 million units, accounting for 10 percent of China’s car manufacturing capacity, according to China Passenger Car Association (CPCA), and exported US$60 billion worth of auto parts. Moreover, 80 percent of car production worldwide involves Chinese parts. 

READ: Coronavirus Outbreak Reveals the Weakest Links In The Supply Chain

Many auto companies across China halted production during the nationwide shutdown to keep their employees at home. This includes Nissan, Honda Motor and PSA Peugeot Citroen and Tesla, which postponed production of its new models in its new facility. As the supply chain is greatly integrated, disruptions in any part of the supply chain can impact the regional market. In this case, the shortage of auto parts from China have resulted in closing of Hyundai’s manufacturing facility in Korea. 

“Carmakers will face severe parts-supply issues, something companies didn’t encounter during the SARS period,” said Cui Dongshu, secretary general of China’s Passenger Car Association. “Wuhan is the most cost competitive among China’s car-industry hubs, therefore many parts makers produce components there and supply their clients around the world.”

According to IHS Markit, this slowing of operations and facility shutdowns until mid-March due to the virus can lead to a reduction of 1.7 million vehicle production in China. Furthermore, car sales in China has dropped 92 percent in first half of February, according to CPCA.

READ: Bosch Cutbacks Operations In Response To Falling Automotive Demand

Recently, manufacturing facilities in China such as those of Volkswagen and Nissan have started to resume partial production and are still struggling to regain full capacity. However, as the outbreak morphs into a global pandemic, the automotive market is hit with yet another wave of threat in Europe and the US. Fiat Chrysler and Ferrari are closing its plants in Italy; BMW, Toyota and Honda are shutting its UK facilities temporarily; Ford and General Motors are shutting factories in the US; while other automakers like Jaguar Land Rover and Peugeot are ramping up efforts to deal with infections among workers. 

According to Globaldata, shutdown of vehicle plants in Europe would cause the removal of over 1.3 million vehicles from production, in turn costing the European auto industry a GBP29.3 billion loss in revenues. Similarly, IHS anticipates a drop of US car sales to 15.4 million vehicles compared to 16.5 million in 2019. The crisis has left manufacturers scrambling to find alternative solutions and source for different suppliers to prevent shortages. 

READ: Siemens Connects Healthcare Providers And Medical Designers To Produce Components Through AM

Impact In ASEAN

The ASEAN automotive market is expected to face another challenging year. “The automotive industry has a very integrated supply chain. Therefore, any disruption in the global automotive supply chain will impact every regional market including ASEAN—either by less sales of cars or because of shortage of parts necessary for the production of cars,” commented Rodrigo Cambiaghi, EY Asia-Pacific and Greater China Supply Chain and Operations Leader. 

The Vietnam Ministry of Industry and Trade has forecast that most automakers will experience partial shortages during this time of crisis and sourcing from other markets would be difficult due to familiarity of technical standards of Chinese parts. As a consequence, Vietnam’s industrial production growth could drop 2.3 percent due to reduced imports of parts from China, according to management fund VinaCapital. 

READ: Ford & Toyota—First Automakers To Suspend Production In Vietnam Due To Covid19

Thailand, as one of the largest exporters of vehicles in Asia will not be spared as well. Toyota Motor Thailand predicts that sale of domestic vehicles will drop 6.7 percent to 940,000 units in 2020. Despite this, the Thailand Government has drawn a plan to transform Thailand into a regional hub for electric vehicles by 2025 and has put various strategies in place to promote production and development of EVs.  

Malaysia has also recently launched its National Automotive Policy (NAP) 2020, which incorporates three new advanced technology elements—Next Generation Vehicle, Mobility as a Service and Industry Revolution 4.0 and focuses on three strategies—for value chain development, human capital development as well as safety, environment and consumerism. Some vehicle manufacturers, especially Chinese car companies, were affected by the outbreak, however, Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said that the total industry volume (TIV) forecast for 2020 will remain the same for now. 

The current COVID-19 situation is still unfolding and the market is fluid. Amid the gloomy outlook, the situation is expected to improve by the second half of the year, according to Fitch Solutions, as countries have sufficient capacity and infrastructure to ramp up output quickly. Moreover, with growth opportunities in ASEAN’s automotive markets, vehicle sales are forecasted to grow 3.5 percent in 2020. In the meantime, what can manufacturers do to mitigate the risks?

Building A Resilient Supply Chain

Rodrigo Cambiaghi

Based on the developments from this pandemic, coupled with learnings from past disruptive instances, Rodrigo Cambiaghi, EY Asia-Pacific and Greater China Supply Chain and Operations Leader shares the key pillars to help companies build a resilient supply chain:

READ: COVID-19 Forces Companies To Evaluate How They Operate And Embrace Technological Investment

  1. Conduct end-to-end supply chain risk assessments and prioritise critical focus areas
    • In the short term, responsiveness and speed are everything. Proactively engage supply chain ecosystem partners, such as suppliers and logistics service providers (LSP), to conduct a risk health check:
      1. Identify – changing demand and inventory levels to locate critical gaps in supply, production capacity, warehousing and transportation
      2. Define – common goals and an actionable short-term and outcome-driven resilience strategy with breakdown activities among the supply chain ecosystem, aiming to effectively and efficiently leverage additional networks among various suppliers’ pool, production and distribution networks.
      3. Deploy – Leading companies build action plans based on scenario analyses to limit the impact of disasters. A fact-based dashboard, including aligned key KPIs help to create enterprise-wide and ecosystem visibility. This can help a company dynamically re-prioritise its plans as needed.
  1. Develop a robust risk management process and diversify supplier network
    • Enterprises should map out supply chain networks from end consumers to tier-N suppliers. For each supply chain node/arc-like channel, warehouse, factory, supplier, or transportation mode, firms should establish a methodology to measure risk.
  2. Implement digital and automated manufacturing capabilities paired with strong manufacturing excellence
    • Leverage automation and IoT solutions for smart manufacturing operations to mitigate reliance on labor intensive processes. A strong manufacturing excellence program enabled by digital technology can allow standardisation of daily work and job aids, relieving the pressure of relying on specific individuals to make an operation perform. IoT capabilities can help foster a digital ecosystem of connected systems providing users relevant and updated data to make the most informed decision at any given time. Automated manufacturing capabilities will enable a company to run a manufacturing operation using interchangeable personnel and reduces labor requirements.
  3. Evaluate and adjust procurement category strategic priorities
    • Transform procurement into a value generation function via timely reviews and adjust category strategic priorities to define new business relationships with suppliers to meet the company’s overall supply chain objectives. An agile procurement operations system enabled by various technologies and factoring category strategic priorities across variables such as cost, quality, delivery, innovation, etc. will also help drive resiliency. Companies can introduce digital procurement technology to benefit from supplier social networks. Implementing a supplier social network in sourcing and supplier lifecycle management can strengthen sourcing capability and supplier collaboration in challenging circumstances.
  4. Invest in more collaborative and agile planning and fulfillment capabilities
    • The art-of-possible today in technologies that can bring more agility and collaboration within the enterprise as well as across business partners are endless. From IoT devices for demand sensing and goods movement tracking to advanced forecasting solutions and social medial demand behavior monitoring are heavily impacting how companies understand demand signals and how quickly they can react to them. These capabilities are extremely important for business performance even in normal business conditions and they increase the supply chain resilience in pandemic events like the coronavirus outbreak we are living today.
    • The current COVID-19 pandemic has caused disruption through all sectors with various degrees of impact. It is time for companies to rapidly assess, recover, and respond quickly through numerous obstacles and challenges that still stand in the way. Through the chaos of recovery, it will be very easy to overlook the root cause and gaps within a supply chain that may have paralysed businesses during this unpredictable major event in the first place. Building towards a resilient supply chain will be at the epicentre of future discussions for years to come.

 

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The Auto Industry: Roadmap To The Future

The Auto Industry: Roadmap To The Future

As the sector transforms itself, will the auto industry keep its soul? Article by Paul Gao, Russell Hensley, and Andreas Zielke, McKinsey & Company.

Over the past 50 years, automobiles have continued to be our “freedom machines”, a means of both transportation and personal expression. Even so, as the industry recognised, the automobile is but one element of a mobility system – an element governed by extensive regulations, constrained by a need for fuel, and dependent on a network of roadways and parking spaces. Automobiles are also a force for change. Over the past half century, their very success has generated pollution and congestion while straining the supply of global resources. The rapid surge of emerging markets has heightened these dynamics.

Even more transformative change is on the way. Global competitive intensity will rise as Chinese players expand from their vast domestic market. Governments are examining the entire automotive value chain and beyond with an eye toward addressing externalities. Technological advances – including interactive safety systems, vehicle connectivity, and, ultimately, self-driving cars – will change the game. The automobile, mechanical to its soul, will need to compete in a digital world, and that will demand new expertise and attract new competitors from outside the industry. As value chains shift and data eclipses horsepower, the industry’s basic business model could be transformed. Indeed, the very concept of cars as autonomous freedom machines may shift markedly over the next 50 years. As mobility systems gain prominence, and vehicles are programmed to drive themselves, can the soul of the car endure? This is just one of the difficult questions that confront the automotive industry as a result of the forces described in this article.

The China Factor

Fifty years of innovations in horsepower, safety, and rider amenities have helped automobile sales grow by an average annual rate of three percent since 1964. This is roughly double the rate of global population growth over the same period and makes for a planet with over one billion vehicles on its roads. For the past 20 years, though, sales in North America, Europe, and Japan have been relatively flat. Growth has come from emerging markets – much of it in China, which over the past decade has seen auto sales almost triple, from slightly less than 8.5 million cars and trucks sold in 2004 to, estimates suggest, about 25 million in 2014. IHS Automotive predicts that more than 30 million vehicles a year will be sold in China by 2020, up from nearly 22 million in 2013.

For decades, Japanese, North American, and European OEMs formed a triad that, at its height, produced an overwhelming majority of the world’s automobiles. The growth of Chinese players is changing the equation – and things are moving fast. Ten years ago, only one Chinese OEM, Shanghai Automotive Industry Corporation, made the Fortune Global 500. The 2014 list has six Chinese automakers. Given surging local demand, the Chinese may just be getting started.

Regulating From ‘Well To Wheels’

Governments have been driving automotive development for decades. Initially, they focused on safety, particularly passive safety. The process started with seat belts and padded dashboards and moved on to airbags, automotive “black boxes,” and rigorous structural standards for crash-worthiness, as well as requirements for emissions and fuel economy.

More recently, the automobile’s success has strained infrastructure and the environment, especially as urbanisation has accelerated. Brown haze, gridlock, and a shortage of parking now affect many urban areas in China, as they do in other cities around the world. Municipalities have begun to push back: Mexico City’s Hoy No Circula (“no-drive days”) programme uses the license-plate numbers of vehicles to ration the number of days when they may be used, and dozens of cities across Europe have already established low-emission zones to restrict vehicles with internal-combustion engines.

China too is acting. Influenced by its dependence on foreign oil and by urban-pollution concerns, the government has indicated that it favours electric vehicles, even though burning domestic coal to power them can leave a larger carbon footprint. In Beijing, a driver wishing to purchase a vehicle with an internal-combustion engine must first enter a lottery and can wait two years before receiving a license plate. Licenses are much easier to get for people who buy state-approved electric vehicles.

Regulation would also create new opportunities beyond traditional industry competencies. For example, some automakers are investigating potential plays across the value chain – such as developing alternative fuels or investing in wind farms to generate power for electric vehicles – to offset the emissions created by the vehicles they sell.

In any event, the automotive industry should expect to remain under regulatory scrutiny, and future emissions standards will probably require OEMs to adopt some form of electrified vehicle. Indeed, we believe that regulatory pressures, technology advances, and the preferences of many consumers make the end of the internal-combustion engine’s dominance more a matter of “when” than of “if”. The interplay of those forces will ultimately determine whether range-extended electric vehicles, battery electric vehicles, or fuel-cell electric vehicles prevail.

Digital Disruption

The car of the future will be connected – able not only to monitor, in real time, its own working parts and the safety of conditions around it but also to communicate with other vehicles and with an increasingly intelligent roadway infrastructure. These features will be must-haves for all cars, which will become less like metal boxes and more like integrators of multiple technologies, productive data centres – and, ultimately, components of a larger mobility network. As every vehicle becomes a source for receiving and transmitting bits of information over millions of iterations, safety and efficiency should improve and automakers should be in a position to capture valuable data. Electronic innovations have accounted for the overwhelming majority of advances in modern vehicles. Today’s average high-end car has roughly seven times more code than a Boeing 787.

Digital technology augurs change for the industry’s economic model. Over the past decades, automakers have poured their cost savings into mechanical, performance-oriented features, such as horsepower and gadgetry, that allow for higher returns. While it’s unlikely that regulatory and competitive pressures will abate, the shift from mechanical to solid-state systems will create new opportunities to improve the automakers’ economics. The ability to analyse real-time road data should improve the efficacy of sales and marketing. Digital design and manufacturing can raise productivity in a dramatic way: big data simulations and virtual modelling can lower development costs and speed up time to market. That should resonate with customers conditioned to the innovation clock speed of consumer electronics, such as smartphones.

Common online platforms can connect supply and demand globally to increase the efficiency of players across the supply chain. Embedded data sensors should enable more precise monitoring of the performance of vehicles and components, suggesting new opportunities for lean-manufacturing techniques to eliminate anything customers don’t value and dovetailing with the digitisation of operations to boost productivity, including the productivity of suppliers, in unexpected ways. As automobiles become more digitally enabled, expect connected services to flourish. When the demands of driving are lifted, even the interiors of vehicles may give automakers opportunities to generate revenue from the occupants’ connectivity and car time.

Autonomous Vehicles And The Soul Of The Car

Currently, human error contributes to about 90 percent of all accidents, but autonomous vehicles programmed not to crash are on the horizon. To be sure, some technological issues remain, emissions issues will linger, and regulators are sure to have a say. Furthermore, combining autonomous and non-autonomous vehicles in a single traffic mix will be a significant challenge. The most difficult time is likely to be the transition period, while both kinds of cars learn to share the road before self-driving ones predominate. The technology, though, is no longer science fiction.

The possible benefits, by contrast, read like fantasy. If we imagine cars programmed to avoid a crash – indeed, programmed never to crash – we envision radical change. Passengers, responsible only for choosing the destination, would have the freedom to do what they please in a vehicle. Disabled, elderly, and visually impaired people would enjoy much greater mobility. Throughput on roads and highways would be continually optimised, easing congestion and shortening commuting times.

Freed from safety considerations such as crumple zones, bumpers, and air bags, OEMs could significantly simplify the production of cars, which would become considerably lighter and therefore less expensive to buy and run. Automobiles could also last longer as collisions stop happening and built-in sensors facilitate the creation of parts on demand.

But what about the soul of the car: its ability to provide autonomy and a sense of self-directed freedom? Google’s prototype autonomous vehicle has no steering wheel, brake pedal, or accelerator. The vision of a connected car, in fact, challenges even the most essential concepts of personal car ownership and control. When a rider need only speak a destination, what becomes of the driving experience—indeed, why even purchase a car at all? Manufacturers may continue to refine the feel of the ride and to enhance cabin infotainment. Still, there’s probably a limit to how “special” a cabin can be or even to how special consumers would want it to be.

 

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Rise Of Digital Trends In Southeast Asia

Rise Of Digital Trends In Southeast Asia

Digital circulation continues to grow at a steady pace, primarily from the intensified efforts in globally, including Southeast Asia. Digital advertising revenue continues to grow worldwide (5.38 percent in 2017). Revenue from digital circulation continues to grow at a double-digit rate, having increased 18.4 percent year-on-year. In-house article by Asia Pacific Metalworking Equipment News (APMEN).

The economic integration of Southeast Asia – which would turn a region with a population of 650 million and a nominal GDP of US$6.5 trillion into one of the world’s biggest and most dynamic emerging markets—has been an aspiration of forward-thinking regional leaders for nearly three decades (BCG reports).

Now a powerful new force – the rapid adoption of digital technologies by the region’s businesses and increasingly affluent consumers – is complementing government efforts by making a common market a reality. Invisible data highways are bridging a wide variety of languages and cultures through smartphones, the Internet, and social media. Companies are using this connectivity to offer new, accessible services to the region’s consumers. And according to a research by BCG, digital technologies already heavily influence the purchasing decisions of Southeast Asians.

As eMarketer has stated, 2018 is expected to see 48.8 percent of all advertising spend directed towards to digital, before nudging over the 50 percent threshold in 2019. By this time in 2019, the pendulum will have well and truly swung, never to swing back.

APMEN Offers The Best Digital Ad Exposure In The Region

The web portal for Asia Pacific Metalworking Equipment News (www.equipment-news.com) itself has seen a major growth in the number of visitors year-on-year. February 2019 web figures shown that there has been a big jump to 148 percent from the figures recorded in February 2018.

The APMEN digital offerings for clients to reach their branding and marketing goals include web banners,  sponsored content and videos, e-newsletter advertisements as well as electronic digital marketing (EDM).

Top Banner Ads

Banner ads, be it top or middle, are effective in progressing a potential customer from unawareness of your product or service to “top-of-mind” awareness, in which your brand is the first that comes to a buyer’s mind.

Top banner ad is a great way to generate exposure from a webpage and the links threaded within. The most obvious benefit of top banner ad is that users are drawn to click on the banner and visit the advertiser’s site.

Another benefit is that it builds brand recognition rapidly. By measuring clickthrough in contrast to site traffic, you get a precise measurement of the performance of the banner ads, which will fluctuate frequently.

Top banner is an ideal spot as they do not interfere with the text content of the page as much as a middle banner.  They are also less likely to be blocked.

Middle Banner Ads

Middle banner ads are closer to content, and tend to be more successful than ads placed farther away. Ad in the middle of the content will grab site visitor’s attention as it puts a break in-between paragraphs and forces readers to read.

Studies have proven that the most successful ad positions are within the content (44.66 percent response), within the heading (27.32 percent response), within the left (7.88 percent response) and right (9.28 percent response columns, rounded out by rotating ads (4.74 percent response) and ads below the fold (1.93 percent response) .

Sponsored Content & Videos

Fastest growing vertical in digital advertising: 48 percent of marketers anticipated increasing their influencer marketing spends this year to shore up their sponsored footprint, contributing to a sector that is rapidly growing and is currently estimated at US$1.3 billion annually.

Raise awareness for your brand, product or service. Sponsored content is a great way to educate your target audience about aspects of your company, product or service.  This may include sponsored videos and sponsored reviews.

Develop thought leadership.  Some sponsored content is on informational topics that you want your brand associated with in your target audience’s mind.

Build positive sentiment toward your brand.  Sponsored content as part of an overall marketing campaign helps manage how the business community perceives your brand.

E-Newsletter

Be personal and relevant. By using your customer data right, you can increase the relevance and thereby also the chance to convert subscribers into customers.

Measure how your newsletter is performing. Take advantage of statistics and monitor how many people opened the letter, which links were clicked on and who ended their subscriptions.

Electronic Direct Marketing (EDM)

One major advantage of direct-mail advertising is that it is highly targeted and measurable. A company can easily measure the results of one or multiple direct-mail campaigns.

Computer programmes allow companies to address consumers by name in direct-mail campaigns. Therefore, the message of the sales letter, for example, is directed at a particular person as if the owner is speaking directly to them.

Direct-mail advertising is cost effective. Companies can easily design colourful or eye-appealing brochures with their computers and desktop software and have thousands of copies printed affordably by a print vendor.

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How To Increase Energy Efficiency With Machine Tools

How To Increase Energy Efficiency With Machine Tools

Machine tools include numerous motors and auxiliary components. Energy consumption varies significantly during operations. From the process itself to individual component power consumption, savings potential can be evaluated and measures defined for more efficient energy use. Article by Grainger.

One area of potential savings comes from the machine tool base load, which consumes energy even in nonproductive phases. The base load is determined substantially by the machine’s auxiliary components. Besides use of energy-efficient motors in these components, many opportunities for reducing the base load can be found. Some energy consumers, for example, can be switched off by the machine control during non-productive phases.

Scrap inevitably increases energy consumption per good part. Manufacturing with accuracy from the very first part can therefore be decisive for energy efficiency. Machine designs with balanced thermal behaviour and precise position measuring technology have a distinct advantage here.

Energy Demand During Milling

Power requirements of a milling process fall into the following consumer groups:

  • Cooling lubricant processing
  • Compressed air generation
  • Electrically powered milling-machine auxiliary components
  • CNC control package with main spindle and feed-axis motors

Proportionally calculated energy for lighting, ventilation, and air conditioning must be added to these groups. Milling process energy demand depends primarily on the size of the milling machine and the machining task.

Dry machining has great potential for improved energy and resource efficiency. In many milling applications, however, doing without cooling lubricant increases scrap rate and, therefore, raises mean energy consumption as well.

Compressed air is required for minimum spindle lubrication, tool changing, and work piece cleaning. Small quantities are required as sealing air. Mean compressed air power changes only slightly across production readiness, roughing, and finishing.

Machine electricity consumers include the CNC control with main spindle and feed-axis motors, as well as numerous auxiliary components, including the pallet changer and cooling, hydraulics and automation systems.

Drive Component Efficiency

Spindle and feed-axis motors are among the central components of a machine tool. Drive-component energy efficiency depends on the ratio of delivered power to consumed power. The network of drives converts consumed electrical energy to delivered mechanical power. Drive network components include a power supply module, drive modules, motors and mechanical components. Data on efficiency typically refer to the rated power. For other rated values, individual component efficiency can vary significantly. Supply modules and drive modules can attain efficiency values of more than 95 percent.

Comparing power consumption during rough-face and circular-pocket milling reveals that feed drives consume only a small share of the CNC’s total power usage. On the other hand, spindle selection can significantly affect energy consumption. If a spindle drive operates far below its rated power, the drive’s intrinsic losses increase in proportion, with negative effects on the energy balance. If the spindle limits the maximum possible metal removal rate, the milling process inevitably takes longer. The result: energy efficiency decreases due to the base load generated by the auxiliary components. Potential also exists for more efficient design of milling processes through consideration of spindle-motor efficiency, for example by using synchronous instead of asynchronous motors.

Regenerative Supply Modules

Every drive’s acceleration requires a braking process in return. Energy from the drives’ moving masses is largely reconverted to electrical energy. In a non-regenerative supply module, kinetic energy released by braking is converted to heat by the braking resistors. A regenerative supply module returns this energy to the power grid. However, the path required for returning the energy and the necessary components for smoothing the grid power generate losses even when the drives have no power requirement. Power loss increases slightly even when power is not being regenerated. Thus, a regenerative supply module operates more efficiently than a non-regenerative module when the regenerated energy more than compensates the higher power loss. Machine operation therefore determines what type supply module to employ.

Tool change frequency also impacts this decision. In one example, a milling operation at 15 kW is interrupted cyclically by a tool change. Starting the spindle requires peak power of approximately 60 kW. A regenerative supply module returns 48 kW to grid power. High metal-cutting power requirements mean that the mean-input power sinks the more frequently the milling process is interrupted by tool changes.

A regenerative supply module works more efficiently as soon as the time interval between two tool changes is less than 100 seconds (equals 0.6 tool changes per minute). In processes with many tool changes per minute, a regenerative supply module often proves to be the better choice. During contour milling with infrequent tool changes, the advantages are on the side of the non-regenerative system.

Deactivation Of Auxiliary Components

In the ready condition, energy use of several consumer groups is only slightly reduced. Therefore, these nonproductive phases must be kept as brief as possible. With machining centres for smaller production batches, energy consumption can be significantly reduced by the selective deactivation of auxiliary components. Beyond this, potential savings result from the use of energy efficient pumps in the coolant and lubricant circuit.

However, consistent switch-off of auxiliary components – such as hydraulics and spindle cooling – or of the compressed-air supply can also have a deleterious effect. If sudden removal of waste heat from auxiliary components, or of temperature-stabilising media, leads to thermal displacement in the machine frame, scrap can result. Selective auxiliary component switch-off therefore functions best on machines with little inclination to thermal displacement.

CNCs can be the central control unit for machine tool energy management, taking advantage of special PLC functions for linking events in the production process (such as NC stop) with outputs for controlling auxiliary components. Delay times can be assigned to events so that, for example, motors can be locked and disconnected from current after standstill. Functions for deactivating various auxiliary devices, axes, light in the working space, etc., can be generated on this basis. These basic functions are the responsibility of the machine tool builder. For users, it is helpful to adapt energy management to specific usage habits.

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Top 8 Technology Trends For 2018 By IHS Markit

Top 8 Technology Trends for 2018 by IHS Markit

From the Internet of Things to the cloud to artificial intelligence, industries are seeing a new wave of technologies that have the potential to transform and significantly impact the world around us. Contributed by IHS Markit

A survey by business information provider IHS Markit by their leading technology experts aim to find out how new technologies are coming together in original and powerful ways to fundamentally change businesses, fuel innovation, disrupt industries and create both threats and opportunities.

The top eight transformative technologies for the global technology market in 2018, as identified in the report, are as follows:

Trend #1: Artificial Intelligence (AI)

AI has matured to the point where it is being used as a competitive differentiator in several industries, particularly in the smartphone, automotive and medical markets.

Also, optimisation for on-device versus cloud-based solutions is becoming an area of focus. Cloud AI has more computing power to analyse data as it utilises deep learning algorithms, but there are potential issues around privacy, latency and stability. On-device AI, meanwhile, can help offset those dangers to some degree.

For instance, smartphone users who deploy the built-in AI of their phones are able to store data locally and thus safeguard their privacy.

Trend #2: Internet of Things (IoT)

The global installed base of IoT devices will rise to 73 billion in 2025, IHS Markit forecasts show. Accelerating IoT growth in 2018 and movement through a four-stage IoT evolution — “Connect, Collect, Compute and Create” — will be the confluence of enhanced connectivity options with edge computing and cloud analytics.

Enhancements in IoT connectivity, such as low-power wireless access will drive growth. Moreover, technologies adjacent to the IoT will become increasingly sophisticated. Machine video and ubiquitous video will empower new types of visual analytics. And AI, the cloud and virtualisation will help develop critical insights sourced from data at the so-called “edge” of computing networks. Applying AI techniques to data will drive monetisation in the form of cost savings, greater efficiencies and a transition from product- to service-centric business models.

Trend #3: Cloud & Virtualisation

Cloud services will pave the way for technologically immature companies to utilise machine learning and AI, radically transforming their usage and understanding of data.

Trend #4: Connectivity

As the first 5G commercial deployments emerge, the story will focus on connectivity. However, the path to full 5G adoption and deployment is complicated, with new opportunities and challenges alike in store for mobile network operators, infrastructure providers, device manufacturers and end users. 5G represents a dramatic expansion of traditional cellular technology use cases beyond mobile voice and broadband, to include a multitude of IoT and mission-critical applications.

IHS Markit

Image Source: IHS Markit

Trend #5: Ubiquitous Video

The growing use of screens and cameras across multiple consumer- and enterprise-device categories, along with increasingly advanced broadcast, fixed and mobile data networks, is powering an explosion in video consumption, creation, distribution and data traffic. More importantly, video content is increasingly expanding beyond entertainment into industrial applications for medical, education, security and remote controls, as well as digital signage.

Trend #6: Computer Vision

The increasing importance of computer vision is directly tied to the mega-trend of digitisation that has been playing out in the industrial, enterprise and consumer segments.

The proliferation of image sensors, as well as improvements in image processing and analysis, are enabling a broad range of applications and use cases including industrial robots, drone applications, intelligent transportation systems, high-quality surveillance, and medical and automotive.

Trend #7: Robots & Drones

The global market for robots and drones will grow to US$3.9 billion in 2018. The deeper underpinnings of the story, however, lie in the disruptive potential of robots and drones to transform long-standing business models in manufacturing and industry, impacting critical areas such as logistics, material picking and handling, navigational autonomy and delivery.

Trend #8: Blockchain

Blockchain enables decentralised transactions and is the underlying technology for digital currency such as bitcoin and ether. Blockchain-based services beyond financial services are already being developed and deployed and will continue to ramp in 2018.

These include: the use of blockchain to improve advertising measurement and combat ad fraud and solutions to better track and manage electronics supply chains.

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