Industry backbone must be flexible
Summary
Machine tool competition
In 1997, machine tool production in Japan totalled US$ 9.7 billion and accounted for some 26 percent of global production, making Japan the largest machine tool producer in the world – followed by Germany, (17.7 percent), the United States (12.4 percent), Italy (9.6 percent) and Switzerland (5 percent). Japan has maintained its lead since 1982, when it embarked upon a major investment in the industry. At the time, U.S. and European manufacturers were reducing their investment following a prolonged slump in the global economy.
In the 1980s, the U.S. had been the dominant producer of machine tools, but by 1992 its output had dropped to less than half that of Japanese and German companies and close to the Italian output.
The U.S. is the largest consumer of machine tools, buying almost 20 percent of total world output. It is followed by Germany, Japan, China and Italy. During 1997, Japan increased its consumption by 27 percent, while China decreased consumption by the same percentage. Ten years ago the former Soviet Union was the world’s largest consumer of machine tools, but the economic woes of that region have caused consumption to plummet to only 3.5 percent of world output.
Different traditions
There are often historical differences in the machine tool industry among leading producer countries. A significant fraction of U.S. machine tool production appears to be in the area of “speciality machines,” leaving the large market for commodity machines open to foreign competition. Japan and Germany continue to dominate large segments of the industry, with German companies putting a stress on high precision and special capabilities, while the Japanese concentrate on fast delivery of reliable standard machines at low prices. Several U.S. companies such as Haas Automation, Fadal and Hardinge have also been successful in this market.
Historically, the U.S. machine tool industry has been fragmented. Small, mainly family-owned companies cluster in regions where user industries are located. According to figures for 1995, from the U.S. Association for Manufacturing Technology, 75 percent of machine tool companies had less than 50 employees, a figure similar to that of Italy. The top four companies in the U.S. accounted for 40 percent of domestic production. In comparison, more than 80 percent of companies in Japan and more than 70 percent of companies in Germany have more than 50 employees.
In India, a pattern similar to that in the U.S. emerges, with small companies dominating the market. India created the Vision 2000 initiative more than two years ago, run by its manufacturing association. The goal of Vision 2000 is for India to gain a position among the world’s six top machine tool producers in the next 10 years. Currently India ranks 25th.
Accurate, fast and cheap. Those are regular requirements on a machine tool. Now, flexible and compatible are moving onto the list.Over the past decade the manufacturing industry has had to become increasingly flexible and responsive, as a way to more rapidly reflect changing market conditions and customer requirements. Today, “better, faster, cheaper” is the universal industry mantra, as well as a prerequisite for running a cost-effective and globally competitive manufacturing operation.
A strong factor in achieving these goals is the machine tool industry. Although the overall value of the machine tool industry is relatively small (less than 40 billion U.S. dollars) when considered globally, machine tool manufacturing plays a vital role in the world economy as a whole, explains Don Carlsson, president of the U.S. Association for Manufacturing Technology. The AMT is a major association in the industry and represents the majority of machine tool manufacturers in the U.S. It is not possible to have world-class manufacturing without world-class tools, he says.
Today, the health of a country’s economy is often indicated by the investment it makes in manufacturing equipment, and machine tool manufacturers have to operate within the boundaries of increasingly volatile market conditions. Which means that the fortunes of machine tool manufacturers in a particular market can rise or fall dramatically as the economy moves in and out of recession.
Mixed outlook
As we move towards the next millennium, the outlook for the global machine tool industry is a mixed one. With the collapse of some of the Asian markets, Asian products have flooded the West. According to Carlsson the redistribution of these products has resulted in soft prices and low margins. Although the outlook remains uncertain, forecasters say that if Asia starts to recover and European markets sustain their recovery, the world market in 1999 won’t be too bad.
Until 1997, the U.S. machine tool industry benefited from a long period of growth. But by August of that year, Carlsson and others were predicting a slowing down of this growth, and a year later, in August 1998, statistics for the industry showed machine tool consumption in the period was down by 11 percent.
Now, says Carlsson, the basis of competitive advantage rests on two factors – the rapid change in machine tool technology and the shift to global competition. In many countries, machine tool makers have evolved into specialists in grinding, machining or milling to meet the needs of their customers. Companies now have to sell their expertise in a global marketplace. This, he says, requires machine tool makers to develop new capabilities and form strategic alliances and other collaborations with suitable partners to offer the product range and types of services now demanded by end users.
Research and development
Accuracy and speed are traditional focuses in the development of machine tools. Among users such as the electronics and automotive industries, for example, an increasing number of small precision parts are required. These demand production machinery that can machine at ever-faster speeds. Machine tool makers have been looking at higher machine feed rates, faster spindle speeds and shorter tool and workpiece changing times. Standard spindle speeds are about 8,000 revolutions per minute, although some machines offer speeds of up to 50,000 revolutions per minute.
When it comes to accuracy, the industry is looking to tolerances that were once unthinkable. Machining accuracy for precision products such as hard disk drives and digital video disk players are as low as a tenth of a micrometre and the industry is already looking at the prospect of entering the world of nanometre accuracy.
Doing more with less
Machine tools frequently are capable of carrying out a number of machining functions in a single unit. An example is the computer numerical control (CNC) machining centre that combines milling, drilling, boring and tapping. This trend continues because it offers users ways to reduce set-up times and floor space. A typical example of this is the CNC turning centre, which is based on a CNC lathe equipped with rotary tools to perform various kinds of machining (similar to a machining centre). These days, twin-spindle, four-axis machines allow simultaneous machining of both front and back faces of a workpiece.
The increasing trend is towards integrated manufacturing concepts that encompass entire plants, from ordering and design to purchasing, inventory control and in-line manufacturing. Within this environment, several CNC machines originally designed for working alone may be linked into a network and even integrated with the rest of the factory system. Such arrangements have been dubbed “flexible manufacturing systems” (FMS), or “agile manufacturing systems.”
Manufacturers wanting to buy a machine tool are looking at the compatibility or interchangeability of a machine in this network environment, as well as its individual features relating to speed and accuracy. So the trend is towards “open architecture,” and machine tool companies are working together with other suppliers of factory automation products, such as software and computers, to develop common interface standards.
Machine tool companies are also putting an emphasis on standardising parts to cut their own production costs and to make servicing and maintenance of machines more cost-effective, says Carlsson.
Shortened time
A clear trend has been to shorten the production time of a new machine. Traditionally, special machines are produced to a customer’s individual specifications. Now customers can choose among a number of multifunction machines and various high-precision CNC machines, often from Japanese companies. These essentially mass-produced general-purpose machine tools form an increasingly important sector of the market, as manufacturers find themselves competing in global markets and need cost-effective machine tool solutions.
Elaine Williams
Evolution technology editor
Photo Roger Stenberg