Market outlook 2020: The year 2019 has been quite a challenging year for the manufacturing industry, with geopolitical tensions impacting investment decisions and shifts in manufacturing centres, and trends such as e-mobility, Industry 4.0, and additive manufacturing creating industrial transformation. In this Outlook 2020 special, six industry leaders share their thoughts on what to expect in 2020, how the industry will develop, new opportunities and market drivers, and how to navigate through the challenges and issues from these dynamics.
HEXAGON MANUFACTURING INTELLIGENCE
The year 2019 was a time of economic uncertainty in global manufacturing. But the Asia Pacific region is well placed to capitalise on new opportunities in 2020, as increasing adoption of disruptive technologies shows organisations are facing market challenges by pursuing innovation-driven competitiveness. The growing recognition of the efficiency and operational excellence to be gained from digitised metrology offers long-term, sustainable investment and expansion in the Asia Pacific market.
The Growth of the Smart Factory
Increasingly connected enterprises will be a continuing trend throughout 2020 and beyond. The digital transformation of quality is a central part of this smart factory vision. Approaches to metrology data are maturing, and companies are focused on gaining actionable insights from real-time data. Growing demand for data analysis software is expected, and the adoption of platforms offering advanced big data and Industrial Internet of Things (IIoT) capabilities will enable far more predictive and proactive manufacturing.
Across the region, new business models will emerge with the prevalence of cloud computing, connecting quality systems to machines throughout end-to-end processes and across factories. Streamlining the analysis and communication of metrology data is essential to breakdown operational silos and drive growth by enhancing product customisation capabilities and throughput.
The trend of automating metrology operations will continue to grow with the increasing adoption of robotics, measuring cells, and automated part loading, enabling manufacturers to scale up their autonomous capabilities. And as manufacturers look to increase their application flexibility, demand for non-contact 3D scanning technology will increase.
Driving Additive Manufacturing Capabilities
Additive manufacturing, also known as industrial 3D printing, is still emerging in sectors such as medical, transportation and logistics, construction, aviation, automotive, and shipping. But according to research from Thyssenkrupp, 3D printing is expected to create $100 billion in value in the ASEAN region by 2025. Quality will play a central role in expanding this developing process, with technologies such as 3D scanning and computed tomography (CT) for measuring internal geometries. Additive manufacturing is a key area of strategic importance for Hexagon. The recent acquisition of CT software provider Volume Graphics adds advanced measurement capabilities to Hexagon’s already comprehensive solution portfolio in the additive space, which also includes software for generative design and additive process simulation.
The expected widespread adoption of smart technologies suggests 2020 will mark a major step forward on the industry 4.0 journey.
Throughout the year 2020, the industry as we know it will shift towards smart factories with IoT (Internet of Things) cyber connectivity, and AI (artificial intelligence) and robotics technologies, that will most likely be developed in the main industrial hubs as part of the fourth industrial revolution (Industry 4.0).
Additive Manufacturing and other advanced manufacturing technologies will continue to grow and replace conventional methods for machining automotive, aerospace and energy parts, and facilitate new opportunities for complicated part designs that were previously unrealizable.
The global search for clean energy and low-emission mobility is leaning towards newer and harder materials, which challenge ISCAR to develop advanced machining technologies, such as SiAlON ceramics and super alloy materials, while using high and ultra-high coolant pressure to boost productivities to higher levels never seen before.
The medical sector will be one of the emerging industry segments, with sophisticated implants using advanced materials and machining technologies jointly developed by ISCAR engineers and leading medical implant companies throughout Europe, the US and Eastern Asia.
The automotive segment will continue to be a global industry leader, while transitioning from conventional combustion to small hybrid-high efficiency engines and electric e-drive cars and implementing other clean mobile technologies, specifically for electric charging infrastructures which have not yet been applied in many countries.
The year 2020 appears to be one of the most challenging years of the last decade, both in the Asia Pacific and worldwide.
The combination of trade wars and their impact on several geographic areas and market sectors, social turmoil in various countries, and many technological changes as consequence of increased environmental concerns, may have a significant negative effect on the general economic situation.
Automotive Manufacturing Evolution
Being a significant part of Marposs business somehow related to the automotive sector, we see the evolution from internal combustion engine (ICE) to electromobility as one of the biggest driver of the economic uncertainty. We prefer, anyway, to see this as an opportunity to offer our existing and new customers an extended panel of solutions, which are moving from our traditional measuring sector to a broader concept including several type of testing equipment (mainly leak test using different type of tracer gas extended also to fuel cells), as well as inspection applications (non-destructive, vision, and similar), and control systems to monitor the whole manufacturing process of the core components of the NEVs/BEVs (new/battery energy vehicles), such as battery cells, modules and packs, battery trays, and electric drive units (EDU) including electric motors; and end of line testing.
We are willing to become a preferred partner of BEV manufacturers and suppliers as we have been for decades for traditional combustion engines, offering them our technical know-how, our innovation culture, and our worldwide organization for sales and after sales.
Smart manufacturing technologies increase visibility and transparency to manufacturing operations, allowing manufacturers to get the overall picture of their productivity and competitiveness, to make faster changes in response to market-based threats or opportunities. This requires a range of intelligent process control solutions throughout the factory, to ensure high standards of repeatability. The key is going digital—connecting physical manufacturing processes with the digital technology to make decisions about process improvement on the shop floor, or on mobile devices.
Flexible and Customised
Additive manufacturing plays a major role in the Industry 4.0 revolution, allowing manufacturers the flexibility to build highly customised parts. Renishaw’s additive manufacturing technologies continue to evolve, aiming to provide users the flexibility to use, change and manage different metal materials, enables users to adapt to meet market demand and configure processes to achieve optimal performance.
Focus on Automotive Industry
Ensuring businesses are equipped and ready to navigate the evolving automotive manufacturing landscape, Renishaw’s manufacturing solutions provide the speed, flexibility, and ease of use to help companies adapt their production capabilities for the evolving electric future. From multi-sensor rapid scanning of machined castings to material analysis of fuel cells, we will continue to support customers on the road from internal combustion engine (ICE) to electric vehicles (EV).
SIEMENS DIGITAL INDUSTRIES SOFTWARE
The maturity of manufacturing supply chains in Asia has undoubtedly exerted pressure on the metalworking industry to be more competitive than ever. Demand for steel in Asia is expected to rise by an average of 1.5 percent in 2020, and will likely see effects such as rising operating costs necessitating the move for businesses to look for technology driven solutions to relieve some of these operational strains. In particular, Southeast Asia is an exciting region for growth, with markets such as Malaysia, Vietnam, and Singapore making strides in realising their Industry 4.0 visions through digitalisation. In 2020, we also launched a Technical Competency Hub in Penang, the first in the region, which serves as a platform for Siemens to help companies, especially SMEs, begin their digitalisation journey in order to meet the needs of the new economy.
Using digital twins, manufacturers will be able to explore more economical and structurally enhanced materials. By leveraging physics-based simulations, supported by data analytics in an entirely virtual environment, the expansion of production capacity in Asia can be further encouraged. This means that manufacturers can optimise their choice of materials by testing and analysing combinations of different metals and alloys digitally before using additive manufacturing technologies such as powder bed fusion to produce these components faster and more reliably, reducing the need and cost for real prototypes.
Siemens’ end-to-end additive manufacturing solutions cover CAD/CAM/CAE models that enable product design and simulation of production processes and planning, preparation, and verification of the print jobs. Simulation and 3D modelling allow for advanced complexity of design and quality, ultimately resulting in fewer distortions and errors. The goal is flawless execution when parts come out of a factory, ready for certification. The full additive challenge covers the entire value chain: product design, production process, and performance.
Using customisable solutions for pressing, transporting, positioning and press safety, in combination with simulation for the entire spectrum of metal forming, businesses can proactively advance with components working seamlessly together. This collaboration increases the cost-effectiveness of all production processes in all sectors, reducing energy costs.
VDW (GERMAN MACHINE TOOL MANUFACTURERS’ ASSOCIATION)
The economic environment for the international and German machine tool industry remains difficult now and in the coming months. After eight years of high economic activity in the international machine tool industry, global demand for capital goods has calmed considerably after the fourth quarter of 2018. The reasons for this have already been identified and discussed many times. The economic distortions, in particular the trade war between the United States and China, are boosting the already sharp drop in demand. The increasing protectionism at all levels is affecting world trade and international supply chains. Finally, the structural shift in the automotive industry towards new drive technologies is causing further problems. It is still questionable at what pace and extent development is progressing and which technologies will be used in the future. The entire scenario is unsettling the industry worldwide. Companies have become very cautious, and they are shifting their investments.
Because of these, incoming orders in the international machine tool industry fell sharply in all regions in the first nine months of 2019. According to initial estimates, orders worldwide fell by 21 percent. Asia declined by 24 percent, while Europe lost 19 percent of its orders. Contracts in America, which is particularly the United States, held up best, if we can say so. They went down 18 percent in comparison to the previous year. In Germany, with its high dependence on exports, incoming orders fell by 23 percent by October in 2019, the most recent available data. This applies equally to domestic and foreign orders.
Markets to Stabilise
Oxford Economics, the VDW’s forecasting partner, expects this trend to stabilise in the best case scenario for 2020. At 2.5 percent, global economic output is expected to be slightly below the increase in 2019. With 2.1 percent, industrial production will grow more strongly than the current year. This also applies to investments. Stabilisation is also expected for the whole German economy. Industrial production, which is expected to shrink in 2019, is likely to turn slightly up again. This means that incoming orders in the machine tool industry will probably go through the bottom in the course of the coming year.
Machine tool consumption, a late indicator, will remain negative in all regions. Asia is the exception. Manufacturers can draw new hope from the fact that the election results in Great Britain have now provided certainty about the island’s exit date from the European Union. Then, the negotiations on a tariff agreement can begin and hopefully lead to a good end. There is also movement in the trade conflict between the United States and China. Should a consensus be reached, the world economy will reach new momentum as well.
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