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APMEN SURVEY: COVID-19 Impact On Manufacturing Industry

APMEN SURVEY: COVID-19 Impact On Manufacturing Industry

The COVID-19 pandemic has been having an unprecedented impact on the global manufacturing supply chain. For instance, factory shutdowns have drastically impacted the metalworking supply chain around the car and auto parts manufacturing industries.

In line with our continuing coverage of the impact of COVID-19, Asia Pacific Metalworking Equipment News (APMEN) recently conducted a survey regarding the impact of the COVID-19 pandemic to the manufacturing industry, including automotive and auto parts, aerospace and aerospace parts, electronics/electrical equipment, die and mould, machine tool, and medical device/equipment sectors.

Key questions include the challenges they experienced as a result of the pandemic; expected impact on their 2020 sales compared to last year; the most likely impact on their supply chains in the next six months; and whether they are expecting a pent up demand after the pandemic.

Here are some key findings:

  • 71 percent of respondents saw a decrease in demand for their products because of the lockdowns in every market worldwide.
  • Perhaps because of the drop in demand, majority or 47 percent of the respondents expect pent-up demand after the pandemic.
  • 55 percent of manufacturers surveyed, expect a decrease of more than 10 percent in sales this year
  • In line with that, 21 percent are saying they will diversify their supply chains by working with more suppliers, and 16 percent say they will shift to a localized supply chain.

For the full survey results, keep a look out for APMEN’s upcoming Jul/Aug issue!

Staying Connected

During a crisis, a spotlight is placed on the importance of the connection between a brand and its clients. In fact, 40 percent of our respondents say staying connected with their customers are among the key challenges they’ve experienced during the pandemic.

Your clients might be panicking, but it is important to provide them with anchors from your business to act as a focal point, like a beacon of light in a dark time.

It is key to establish such a light source through various human touchpoints. You should remind them of your shared experiences and the results that were delivered—and one way to do so is through targeted branding exercises for your business. Branding opens doors and creates new avenues for clients to reach out to you while seeing the value in doing business with you.

We at Asia Pacific Metalworking Equipment News (APMEN) would be very happy to help you on this front. Reach out to us and find out more about our solutions!

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The China Exodus: Survey Shows Sourcing, Manufacturing Moving Out

The China Exodus: Survey Shows Sourcing, Manufacturing Moving Out

A Gartner Inc. survey of 260 global supply chain leaders in February and March 2020 found that 33 percent had moved sourcing and manufacturing activities out of China or plan to do so in the next two to three years. Survey results show that the COVID-19 pandemic is only one of several disruptions that have put global supply chains under pressure.

“Global supply chains were being disrupted long before COVID-19 emerged,” said Kamala Raman, senior director analyst with the Gartner Supply Chain Practice. “Already in 2018 and 2019, the U.S.-China trade war made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks. As a result, a new focus on network resilience and the idea of more regional manufacturing emerged. But this kind of change comes with a price tag.”

READ: Impact of COVID-19 On The Automotive Manufacturing Supply Chain

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

Tariff Costs are the Primary Reason to Move Supply Chains

For decades, China has been the go-to destination for high-quality, low-cost manufacturing, and it has established itself as a key source of supply for almost all major industries including retail and pharmaceutical. However, Gartner research showed that the margin between those companies planning to add jobs in China versus taking them away narrowed sharply in 2019. The primary reason is the increase in tariff costs.

“We have found that tariffs imposed by the U.S. and Chinese governments during the past years have increased supply chain costs by up to 10 percent for more than 40 percent of organizations. For just over one-quarter of respondents, the impact has been even higher,” Raman said. “Popular alternative locations are Vietnam, India, and Mexico.

The second main reason for moving sourcing and manufacturing out of China is that supply chain leaders want to make their networks more resilient.”

READ: Trade War Pushes Apple’s Manufacturing From China To Vietnam

READ: Taiwanese Companies Shift Production To Taoyuan As Trade War Heats Up

Balancing Efficiency and Resilience

Only 21 percent of survey respondents believe that they have a highly resilient network today—meaning that they have good visibility and the agility to shift sourcing, manufacturing and distribution activities around quickly. However, 55 percent expect to have a highly resilient network in the next two to three years—a reaction to disruptions such as Brexit, the trade war and COVID-19.

However, resilience has a price. Fifty-eight percent of respondents agree that more resilience also results in additional structural costs to the network.

“We are at a crossroads in the evaluation of global supply chains that pits just-in-time systems designed to improve operational efficiency against just-in-case plans that emphasize planning and preparing for a range of plausible scenarios,” Raman added. “To find balance, supply chain leaders must engage in risk management to assess their organization’s willingness to take risk onboard and decide how to quantify that risk against other network objectives such as cost effectiveness.”

Moving Closer to the Customer

One-quarter of survey respondents stated that they have already regionalised or localised manufacturing to be closer to demand. Despite the cost of adding more players to the ecosystem and increasing the overall network complexity, regional supply chains can ease delays and shortages in times of disruption—if the model is economically viable.

“Many Western organizations will have to explore new forms of automation on the factory floor to decrease the costs of near- or onshore production. Some also favour a partial option, such as manufacturing in Asia and moving only the final assembly closer to the customer,” Raman concluded.


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Impact Of The US-China Trade War On Vietnam’s Manufacturing Sector

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

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

The Coronavirus outbreak and the worldwide reaction to the pandemic will force companies to radically rethink how they operate and embrace technological investment, states global tech market advisory firm, ABI Research.

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

In its new white paper, Taking Stock of COVID-19: The Short- and Long-Term Ramifications on Technology and End Markets, ABI Research Analysts look at the current and future ramifications of COVID-19 across technologies and verticals. Analysts also offer recommendations to weather the storm and strategies to help companies rebound and prosper after the pandemic has slowed.

“To effect change, there must be a stimulation of a magnitude that means companies cannot do anything but make bold decisions to survive. COVID-19 is that magnitude,” explains Stuart Carlaw, Chief Research Officer at ABI Research.

READ: Coronavirus Hits Automotive And Aerospace Supply Chains

Bold decisions and technological investments could lead to outcomes such as:

  • A more concerted and widespread move to lights-out manufacturing
  • Increased usage of autonomous materials handling and goods vehicles
  • A more integrated, diverse, and coordinated supply chain
  • Investment in smart cities to support community resilience
  • A move to virtual workspaces and practices
  • And so much more

“Before we feel this potential long-term impact, there will be some serious short-term implications. Contractions in consumer spending, disruptions to supply chains, and reduced availability of components will create a rough sea for all boats,” Carlaw says. “In the short-term, there will be a retrenchment in outlooks a reduced investment in modernisation, as survival instincts trump the drive to prosperity.”


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Automotive 3D Printing Market To Reach Over US$8 Billion By 2024

Automotive 3D Printing Market To Reach Over US$8 Billion by 2024

The automotive 3D printing market size is forecasted to grow with a CAGR of 25 percent, to be worth over US$8 billion by 2024, according to a report by Global Market Insights Incorporated.

Advancements in 3D printing technology in the automotive industry have changed the ways products are manufactured, developed, designed and distributed—products are lighter, safer and cleaner with newer designs and shorter lead times.

The growth of the 3D printing market in the automotive sector is driven by the increasing need for low cost and more efficient technology to produce complex and high-quality products which traditional methods cannot fulfill. Additive manufacturing reduces production time as multiple stages can be combined into a single production step. This also eliminates the product assembly stage and reduces logistic transport costs.

Increasing number of government initiatives to invest in additive manufacturing technologies and consumers demand for new innovations and lower prices are further propelling the market forward. Additive manufacturing allows freedom of design and production of different products in any sequence. Hence, customised products are possible and automotive companies are able to include customers in the development process.

The Asia Pacific automotive 3D printing is expected to grow with a CAGR of over 29 percent. The growth in the Asia market is accelerated by increasing public and private establishment investments as regions are exploring various opportunities to enhance productivity and competitiveness.

Major companies operating in the automotive 3D printing market includes Ponoko Limited, Hoganus AB, Exone, Voxeljet AG, Arcam, Startasys, Autodesk, 3D systems, Materialise, Nano Dimension, Proto Labs, SLM Solutions Group, Electro Optical Systems, Concept Laser, and Renishaw Plc.


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Importance Of Process Control

Importance Of Process Control

Asia Pacific Metalworking Equipment News is pleased to conduct an interview with Mr Lim Boon Choon, President of Hexagon Manufacturing Intelligence, APAC, regarding current trends in metrology.

Lim Boon Choon

Could you provide us with an overview of the current trends regarding metrology in metalworking?

Metrology continues to be important to assure quality in the final products, but customers are beginning to see the importance of process control, not just quality control.  By process control, I mean getting metrology into the production area as well, and not just the quality room.  By installing hardware and software in the production area, customers can check critical dimensions directly during the production process and ensure that the products are within specifications.  This will help to ensure that there is less chance of products getting into the metrology room a few hours later and finding that the products do not meet the requirements and must be scrapped or re-worked.

Another trend is the use of non-contact scanning.  Customers are coming up with very highly polished materials or mixture of different materials that may be sensitive to scratch marks.  Non-contact scanning prevents scratches and speeds up the inspection very quickly.

The third trend is the increasing use of additive manufacturing as a complement to traditional manufacturing.

How has Hexagon kept up with these trends?

Over the years, Hexagon has developed or acquired various technologies that allowed us to implement in-line, next-to-the-line, or off-line inspection.  We help customers build quality into their process from Design and Engineering, to Production and to final inspection.  Increasingly, we also provide automated inspection systems that allows customers to use metrology in the shop floor to control the process and reduce scraps and rework.

For example, our AICON TubeInspect solution is a unique equipment for customers producing tubes.  They can place their tubes in our system which measures the bending angles within a second and calculates the correct bending parameters to be sent back to the tube bending machine.  This kind of close loop process helps customers to get their tubes right quickly and saves a lot of time and cost of rework.

We also have software like NC-SIMUL that simulates the machining process, Hexagon production software for finding the best cutting strategy, SIMUFACT for CAE simulation of additive manufacturing, Q-DAS and eMMA to monitor the manufacturing process and manage the relationship between parts, shop floor and portable CMM that allows us to measure the parts directly in the production area.

Another example of our products being shop floor ready is that we designed our CMM to have in-built message lights (Global S CMM), and pulse sensors that monitor vibration, humidity, temperature in real time.

Hexagon is now helping customers to optimise product innovation at various stages like Design, planning, production, quality assurance and post Production, and also our ability to link and integrate all data through our Smart Factory solutions and Assets Management system.

What are the main challenges faced by the metrology industry?

With the market going for more innovative products that may be highly customized, manufacturers are faced with high mix low volume situations.  They need solutions that are easy to implement, robust and well connected to their manufacturing systems.

Many customers know that they need information to make good decisions, but there is a general lack of understanding of what can be done to tap in the information from various equipment (connectivity problem), and how to get actionable data; not just data, but actionable data.

How can they be overcome?

It boils down to leadership.  Leaders have to be bold, have vision and courage to change.  Start small and scale up quickly.

Rethink quality.  Quality is not just in the quality room but should be built into the products right from how we design the product, how we ensure the design is strong, can be produced cost effectively, and the equipment and software are suitable to produce the product consistently.  Look into process control, and not just quality control in the Quality room.

Moving forward, where do you think the industry is headed in the next 5 to 10 years?

With the push towards Industry 4.0, and especially with government encouragement and funding, I think manufacturers will want to implement more and more smart systems – automated solutions on the shop floor and monitored with software that gives them smart diagnostics and even artificial intelligence built in to identify problems early.  Process control and non-contact scanning will also be increasingly prevalent.


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Achieving Operational Excellence With Modern Technology

Achieving Operational Excellence With Modern Technology

In the past you, could make an investment in a business technology and ignore it after installation. But today, technological advances are moving so fast that you need to keep up with latest developments, or risk losing out to competitors who will recognise the opportunity out there, thus giving themselves an operational advantage over you.

Those familiar with technology might have heard of Moore’s law where Gordon Moore showed that the number of transistors on a chip would approximately double every two years.  Intel has dedicated a web page on the phenomenon for those who are keen to explore this in depth.

But there’s another interesting competing law that many might not be familiar with.  The Wright’s law was written by Theodore Wright, the inventor of the first airplane.  Back in 1936, Theodore wrote the Learning Curve or (Experience Curve) law in which cumulative unit production is plotted against price per unit.  Wright discovered that progress increases with experience: each percent increase in cumulative production in a given industry results in a fixed percentage improvement in production efficiency.

So why compare these two laws?

The point I’m trying to make is that Wright’s law more accurately represents the truth of the business environment we operate in today.  In short, the more experience gained in a specific field, the more efficient and cost-effective we become. This means that more businesses are able to afford technology that can help them improve their operating efficiencies and compete for market share at higher levels of service.  To put it another way, think about the cost of compute power in the 70s’ through mainframe systems. Not many could afford access to this technology, compared with today where almost every business operates with an information system. Did that lowering of technology cost happen because Gordon Moore said more transistors can fit on a computer chip over time?  I think it’s more likely that Theordore Wright better understood the problem.

Monitor ERP System also understands that we must keep pace with industry developments to maintain a perceived value to our customers. We’ve gained over 35 years of experience developing production management technology solutions for our customers all over the world. Today it’s not enough to deliver an ERP / MRP system to a manufacturing company. Today our customers want access to more data deeper into their production line and supply chain. They want to know what inventory they should be holding, where they should be holding it, and at what levels. They want seamless access to machine data from the shop floor, and to access their data from anywhere. They also want to know that the delivery times they promise to their customers is accurate to protect their all-important brand image.

Monitor’s latest offering, MONITOR G5, is everything our customers have come to love about us over the years. It is fuelled with a beautiful new graphical design and a multitude of features ready to help our customers realise sustainable business growth well into the future.

To learn more about the MONITOR G5 production management system, visit Monitor ERP or contact [email protected].


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The Future Of Manufacturing Lies In Transparency And Connectivity

The Future Of Manufacturing Lies In Transparency And Connectivity

Asia Pacific Metalworking Equipment News is pleased to conduct an interview with Wong Seng Yeow, Business Development Manager at TRUMPF regarding current trends in the metrology and manufacturing industry.

  1. Could you provide us with an overview of the current trends regarding the manufacturing industry?

The manufacturing industry has evolved significantly over time – from steam engines to mass production with electricity, then automation and in recent years Industry 4.0. The latest trend may be described as the digital networking of manufacturing technology with big data and analytics, autonomous robots, Internet of Things, etc. Sometimes known as the fourth industrial revolution, it signifies the combination of traditional industrial practices with digital technology.

A key driving force for Industry 4.0 applications is the increased transparency and flexibility for the manufacturing industry. In the model of a Smart Factory production line, companies may analyse and respond optimally to fluctuations in production capacity and factory utilisation. Flexible production layouts allow them to deal with increasingly individualised products and reduced batch sizes, coupled with the possibility of reducing costs through increase in the degree of automation and improved efficiency. Another advantage is production stability through the adoption of predictive maintenance. Self-monitoring and regular evaluation of machines helps in preventive maintenance which leads to increased productivity and quality.  In cases of machine breakdowns, remote servicing may be done at significantly lower cost.

In a nutshell, the trend toward Industry 4.0 enables digitally managed product assembly, inventory management, resources management and service maintenance. Ideally, human intervention will be considerably reduced as processes will be largely managed and performed with artificial intelligence.

  1. With increasing digitalisation, how has TRUMPF kept up with these trends to remain competitive?

Amidst challenging business environment, TRUMPF has always managed to rise above its competition by upholding one of the company’s guiding principles “Courage to transform”. From the development of plasma cutters to EUV laser, this notion has played an integral role in empowering the company to take courageous, transformative decisions over the past decades. In the same vein, it sets the right framework for an effective digital transformation.

Over the years, digitalisation has already permeated many areas of our business. An example of this trend is the conceptualisation of TruConnect, TRUMPF Machine Tool’s advanced range of solutions for connected sheet metal fabrication, comprising of hardware, software and services. The suite of products lays the foundation for production facilities to streamline control with minimal human intervention. Within TruConnect, key products such as TruTops Fab software are testaments to TRUMPF’s dedication to commercialise solutions based on its digital ambition. They are our answers to customers’ rising expectations of quality as they struggle with diminishing batch sizes, fast delivery times and low prices.

  1. What are the main challenges faced by this industry in Asia?

Key challenges for digitalisation of the manufacturing industry in Asia include inadequate infrastructural readiness, awareness and knowledge competency.

In mature markets such as Europe, the knowledge and infrastructure required to reap the benefits of technology are present. However, in regions such as Southeast Asia, the extent of adoption of new technologies is limited as information technology infrastructure is relatively underdeveloped in emerging markets such as Myanmar.

Digitalization might still be a foreign topic to some companies as well as the potential advantages that follows, such as achieving operational transparency through data analytics. To the less-informed, digital transformation is a process which translates into unsavoury repercussions such as job displacement.

The unwillingness to embrace digitalisation also stems from the fact that employees are not sufficiently trained and equipped with the necessary knowledge. Without fully appreciating the advantages of digitalisation, decision makers will not be willing to incur cost to train employees with the required skillset means placing additional strain on their tight budgets.

  1. How can they be overcome?

Adoption of Industry 4.0 applications in Asia can be successfully implemented when the government, local companies and key industry leaders such as TRUMPF work together.

On the part of local manufacturing companies, it is first important to implement the digital strategy from top down. Decision makers should proactively analyse the process, tools and benefits of digitalisation. It is also crucial to address the unfounded insecurity of employees who have concerns about being replaced by new technology. In this regard, companies may seize the chance to train its labour force to be digitally-skilled, thereby enabling them to handle higher level processes. With a supportive workforce, companies can achieve a smooth end-to-end integration of their data and operational process.

As a market leader in the manufacturing industry, TRUMPF intends to continue empowering manufacturing companies in their digitalisation journey by offering solutions and services which suit their various needs. For instance, TRUMPF is committed to develop the South East Asian industry by educating manufacturers in the region on digitalisation through the TruConnect solution. Advance production-planning softwares and Smart Factory consultancy services are designed to support customers in their digitalisation journey through a step-by-step approach – first assessing existing manufacturing layout, identifying bottlenecks and challenges, then proposing technology solutions to optimise manufacturing processes and operations. That said, digitalisation should not be perceived as a one-time process but as a continuous transformation which should be sustained.

Naturally, TRUMPF also works closely with government agencies such as the Singapore Economic Development Board to develop the market infrastructure and constantly nurture companies in the region.

  1. Moving forward, where do you think the industry is headed in the next 5 to 10 years?

Over the next years, market condition will be increasingly difficult as companies compete not only on price but on efficiency as well. In such a market environment, a company’s success will depend on its courage to transform. As digitalisation allows the creation of new businesses and growth opportunities, a shift in dynamics can be expected as the industry consolidates – only players who are able to successfully digitalise will survive and thrive.

The future of manufacturing lies in transparency and connectivity. For TRUMPF, the majority of sales is still expected to come from machinery, but software and digital services will play an increasingly significant role. With an eye on growing our market share, we will continue to be the leading provider of new digital solutions in the manufacturing industry.



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Impact Of The US-China Trade War On Vietnam’s Manufacturing Sector

Impact Of The US-China Trade War On Vietnam’s Manufacturing Sector

In 2018, disbursement of FDI projects in Vietnam reached a record high of USD 19.1 billion, showing the high confidence of foreign investors in Vietnam’s business and investment environments. This is an increase of 9.1 percent year-on-year amid global concerns over the tension caused by the US China Trade War. Additionally, the rapid growth of both privately and state run enterprises such as Vingroup or Viettel is an indication of Vietnam’s economy prosperity and the fact that the country’s business environment is capable of nourishing large corporations of global scale.

However, as tensions over the Trade War continue to escalate in 2019, uncertainly over the status of the global manufacturing sector has continued to plague the industry and much attention has been focused on Vietnam due to the country’s status as an emerging manufacturing hub. Currently, the Trump administration has imposed tariffs on USD 250 billion worth of Chinese imports while China has retaliated by imposing tariffs on a cumulative value of USD 110 billion worth of US imports.

In short-term, Vietnam is projected to capture some of China’s global market share in labour-intensive manufacturing, although, in the long-term it is uncertain if Vietnam will continue to benefit from the displacement of manufacturing from China. This is because, Vietnam could face the risk of trade frauds as China looks to route US-bound products through the country to evade existing tariffs at an increasing pace. Furthermore, there is also the risk of Chinese products saturating the Vietnamese market, resulting in increased competition with domestic producers.

Thus, as the trade war drags on, experts have advised Vietnam to develop a new development strategy to evade potential risks. This is also due to the fact that global investors are starting to withdraw their investments from emerging markets, including Vietnam.


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Contraction Of Singapore’s Manufacturing Sector For Fourth Consecutive Month

Contraction Of Singapore’s Manufacturing Sector For Fourth Consecutive Month

Singapore’s manufacturing sector has contracted again in December 2018, with the key electronics sector declining further. This is aligned to a weakening global outlook for the manufacturing sector and the current fallout between the US and China, as well as the overall decline in manufacturing in South Korea, Taiwan and Malaysia.

In fact, Singapore’s overall Purchasing Managers’ Index (PMI), dipped 0.4 points in December 2018, reaching 51.1. This is barely above a reading of 50 which indicates that growth has occurred. Similarly, the electronics sector, which saw its first contraction after 27 consecutive months of growth in November 2018, dropped 0.1 points to 49.8 in December 2018 according to the Singapore Institute of Purchasing and Materials Management (SIPMM).

Meanwhile, China’s official manufacturing PMI that was released on January 2019 indicated that the country’s manufacturing sector has sank into the contraction territory for the first time since July 2016, while the Caixin manufacturing PMI also contracted to 49.7, which is the lowest figure that the index has dropped to since May 2017. This was a decrement that stands below analyst expectations.

Regarding this, the SIPMM has commented that the lower overall PMI reading can be attributed to slower growth in new orders and new exports, factory output, inventory, as well as employment level. Additionally, it can be taken into account that the indexes of finished goods, imports, input prices and supplier deliveries also expanded at a lower rate, while the order backlog index has continued to contract for three consecutive months. Alvin Liew, a Senior Economist at UOB has further added that the weaker PMI is most probably linked to a slowdown of China’s growth and the corresponding drop in demand for Singapore’s goods and services that are tied to China’s economy. He also projected that a continued slowdown is likely to occur due to many factors such as a decrease in China’s growth, uncertain trade developments between the US and China, as well as a global electronics cycle downturn.


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Global Laser Cutting Market To Hit US$5.7 Billion By 2022

Global Laser Cutting Market To Hit US$5.7 Billion By 2022

The global laser cutting market has a projected CAGR of 9.3 percent from 2016 to 2023 and will grow to reach US$5.7 billion by 2022. This can be attributed to heightened production demands from various industries and the shift towards automation. With regards to the automotive, consumer electronics and defense industries, their growth has resulted in an increased demand for machines that drive manufacturing processes and these has in turn spurred the growth of the laser cutting industry.

Currently, alternatives to laser cutting such as offer similar features and are able to offer some benefits that laser cutting cannot provide. However, the market competition posed by these alternatives are expected to dwindle with time due to the constant technological improvements that laser technologies are experiencing.

Based on technology, the laser cutting market can be segmented into solid state lasers, gas lasers and semiconductor lasers. Solid state laser was the highest revenue contributor and comprised about 40 percent of the total market share in 2015. However, gas laser is expected to witness rapid growth till 2023.

Although the US contributes significantly to the growth of the industry, Asia-Pacific is expected to be the fastest growing region moving forward. This can be attributed to an increase in the number of manufacturing facilities and the growing purchasing power of consumers in developing nations.


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