Machinery

Industry 4.0 is putting traditional machinery OEMs under threat as digital providers look to move into the space as new competitors.

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What is the current position of the machinery industry?

The machinery industry faces significant challenges amidst the struggling global economy in 2024 and these challenges have spilt into 2025. Inflationary pressures on critical commodities like steel and aluminum are placing strains on profit margins, while high interest rates are limiting customers’ capacity to finance large machinery purchases. Although supply chain disruptions are gradually easing, they still weigh heavily on the industry’s operations. Moreover, the persistent shortage of skilled labor remains an ongoing concern, adding to the complexities faced by the sector.
Sustainability and decarbonization will likely be a key concern in 2025. Many machinery companies are anticipated to boost their investment in R&D capabilities and exploit developments in decarbonization and recycling technology.
Increasing vertical integration will provide manufacturers with greater visibility into their operations and gives them a better understanding of the processes involved throughout their supply chain. This heightened visibility allows manufacturers to improve their forecasting and planning when taking orders or designing and marketing new products.

Machinery Industry Trends & Challenges

Machinery companies face a number of opportunities and threats to their businesses. The companies best placed to deal with a challenge will consider it an opportunity, while those poorly prepared will face it as a threat.
Before the COVID-19 crisis, there were several trends that machinery companies were responding to. As the industry recovers from the pandemic, some of those trends remain, and some new challenges have emerged. Those include:
– Additive Manufacturing
– Artificial Intelligence
– Electronics and Software Introduction
– Internet of Things
– Product-as-a-service
– Sustainability

New technologies and procedures that are quickly developed and commercialized can increase productivity and cut expenses, which is vital in this post-COVID world. Furthermore, the transition toward operational and digital efficiencies will almost certainly be accelerated by emerging technologies, changing company models, and rising M&A activity. Particularly, digital thread and smart factories provide a variety of productivity- and efficiency-improving technologies that can shorten cycle times and speed up time to market.
Ongoing challenges restrain overall confidence regarding revenue growth. Operational effectiveness and profitability are declining as a result of labor shortages and unstable supply chains. The cost of commodities, including steel, aluminium, and other materials, has increased due to shortages.
Here are some of the key challenges facing the industry:
– Cybersecurity
– Geopolitical tension
– Labor shortages
– Regulatory compliance
– Supply chain disruptions
– Unfavorable economic conditions.
– Trade Wars/Tariffs

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E-learning course

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Identify the industry terminology
Identify the relationships between typical companies in the high-tech supply chain and understand the structure of a typical business
Pick out some of the major issues faced by high-tech companies in today’s industry
Differentiate between the initiatives they take to respond to business issues

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Technology

The machinery industry develops and incorporates some of the most advanced technologies of any manufacturing sector. These technologies cover not only machine development but also production and supply.

Industrial machinery is at the forefront of digital transformation and Industry 4.0. This requires IT infrastructure to support enterprise systems both internally and/or externally – i.e. in the cloud. Aging workforces, an increasing shortage of skilled labor, and ongoing supply chain challenges have forced manufacturers to embrace automation and new production technologies such as robotics and cobots.

Here we can see the relative sizes of the Computer-Aided Technologies (Mechanical CAD, Mechanical CAE, CAM) and PLM software sectors in the global machinery market. The total is worth approximately $US3.1 billion annually. Note how MCAD is the largest segment, which highlights the importance of engineering design in the machinery sector.

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Design/Engineering/Manufacturing Software Market Share – Machinery Industry

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