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 as an opportunity, whilst those poorly prepared will face the challenge as a threat.

Before the COVID-19 crisis, there were several trends that machinery companies were responding to. Some of those have accelerated because of COVID-19 and are likely to continue over the coming years. Those include:

• additive manufacturing
• electronics and software introduction
• Internet of Things
• product-as-a-service.

Many trends in the industry have developed over time as solutions to the longstanding challenges but, as implementation accelerates, they will also provide stability after the COVID-19 pandemic.

The COVID-19 pandemic has had major impacts on the industry. A large, but disproportional, drop in demand caused by the closure of many manufacturing industries will likely be followed by a period of time where capital is low and investment in new machinery is not feasible. There will need to be a large focus on supply chain resilience in the near term to ensure that correct parts flow through the complex supply chain on time.

Here are some of the key challenges facing the industry:

• cyber security
• labour shortages
• regulatory compliance
• supply chain disruptions.

What is the current position of the machinery industry?

The machinery industry in 2022 is recovering well from the setback it experienced due to the pandemic. A successful vaccine rollout and an easing to social distancing guidelines, coupled with large amounts of pent up demand bodes well for a successful year for many machinery companies.

However, this recovery brings with it the risk of inflation. Inflationary pressure on key commodities such as steel and aluminium may dampen this recovery by putting a strain on margins.

Sustainability and decarbonization will likely be a key concern in 2022. Many machinery companies are anticipated to boost their investment in R&D capabilities and exploit developments in decarbonization and recycling technology.

Following on from the supply chain crisis of 2020, many providers are taking measures to prevent such a situation from happening again. Some of the strategies being implemented are on- or near-shoring of key suppliers; this will mitigate the risks associated with country-specific restrictions or regulations, as well as lowering freight costs for the provider.

Increasing vertical integration provides the manufacturer 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.

Technology