Even after 125 years, Heinz-Jürgen Prokop from the VDW still sees huge potential for markets, products and services
“From a position of strength, the German machine tool manufacturers have to utilise the changes in the markets, among the customers, in the technology, and in the products themselves, in order to generate new opportunities for enhanced competitiveness,” said Dr. Heinz-Jürgen Prokop, Chairman of the VDW (German Machine Tool Builders’ Association), speaking at the anniversary press conference in Frankfurt am Main.
400 invited guests from the business and academic communities, the media and trade associations celebrated with a ceremony and a summery gala evening themed around “125 Years of VDW” under the motto “valuable – dependable – worthwhile”.
“The three attributes stand for the association’s performative capabilities, and for the issues it has been addressing ever since it was founded in December 1891,” explained Dr. Prokop. They describe the manufacturers’ field of action: markets – machines – people. Intensive analysis of these issues has underpinned the sector’s own success story, said Dr. Prokop. At the same time, the ongoing challenges for the companies involved can also be derived from these issues.
Systematically tackling the high-growth ASEAN market
One of the major tasks for the near future is accordingly to open up new high-growth markets. At present, the sector is being confronted with substantial shifts in the export structure, reveals the VDW Chairman’s analysis. China, since 2003 by far the biggest export market for German manufacturers, accounting at times for up to one third of the total, is becoming less significant. Hopes for the re-industrialisation of the USA, with high capital investment in production technology, have so far remained broadly unrealised. Russia, too, for many years the third-largest market, will in the foreseeable future no longer be assuming this role. Europe is accordingly attracting increased attention from German companies, because European customers are confronted with stringent quality requirements on the global markets, and are responding with appropriate investments.
There is definite promise, however, in the ASEAN region and India. They represent a huge potential for the machine tool industry. The task here is to gain customers by offering better products, and to purposefully wrest market shares away from Japan, the leading competitor there. “This means more involvement, more presence, more capital investment, and where appropriate more alliances, in the event that a mid-tier company cannot put all the requisites in place from its own resources,” said VDW Chairman Dr. Prokop.
Changes in the automotive industry – a challenge for production equipment vendors
The automotive industry, too, the biggest customer grouping for machine tools, is facing a paradigm shift and a transformation of its business model, with substantial effects on production equipment vendors. Driving forces here include regulatory requirements from the politicians and the increasing urbanisation of society as a whole. The paramount issues involved cover the technological transition from the internal combustion engine towards alternative drive forms, plus networked, automated driving. New competitors from outside the sector, like Tesla or Google, are entering the market. And then there are new services for customers, like car-sharing models. Digitisation and networking make it possible. “We have to keep an eye on this development,” warns Dr. Prokop.
Generating new customer benefits by networking
For 125 years, German manufacturers have been progressively developing and optimising their technologies. This is why today they are right up there with the leaders worldwide. In view of the machines’ high degree of technical maturity, however, there is a further challenge involved in expanding the range of services provided with improved customer benefits. “We shall remain successful on the global market only if our products continue to feature state-of-the-art technology and are backed up by enhanced, expanded service capabilities,” is Dr. Prokop’s firm conviction.
Industry 4.0 all at once opens up gigantic opportunities for this. “The task is to generate new customer benefits through networking. As in our private lives, this enables very many activities to be simplified or even automated,” commented Dr. Prokop. Thinking in terms of networking solutions, however, is for many companies still something new, and requires an altered perspective.
From a vertical to a horizontal perspective, this is the watchword. The focus must no longer be solely on the machine itself. On the contrary: it has to be optimally embedded in a company’s intralogistics. This gives rise to questions: how, for example, will the workpieces be optimally fed into the machine? How will the machines give the workpieces an identity, or further enrich this identity? How will workpieces be assigned to orders, tracked and rendered locatable at all times? The answers will lead to products and services that create new customer benefits. They could also lead to entirely new machinery concepts, to new assistance systems or to solutions for the material flow and for part tracking. And who could be better placed to implement this than the machine tool manufacturers, who are thoroughly familiar with all parts of the production process involved? “A large field, which in some categories is as yet untilled, and constitutes a massive incentive for the manufacturers’ creativity,” said Dr. Prokop.
Launching an excellence initiative for vocational training
The most valuable resource for the German machine tool industry is meticulously trained, highly qualified, optimally committed staff in all specialisms, on top of their remits and totally motivated. The rapid technical changes, in connection with Industry 4.0, however, also demand new competences from them.
Against this background, Dr. Prokop regards an excellence initiative for vocational training as an urgent necessity. This also subsumes upgrading the image of vocational training and technical job profiles. Above all, however, he sees it as imperative to assure adequate financing for the vocational colleges to cover equipment and advanced training, so that young people can be trained in the very latest state of the art.
Dr. Prokop urged the sector itself to take on board the necessity of enthusing what are called “digital natives” for the machine tool industry, so as to really make optimum use of the potentials offered by networking. “Quite honestly: despite high-tech in the machine tool, high-performance control systems, automation solutions, the use of artificial intelligence, and much more, our sector is regarded as conservative in the world of IT. This has to change,” he urged. One first step, he said, is the “Specialist for Digital Production Processes” project of the VDW’s Youth Foundation.
Heinz-Jürgen Prokop’s summary was this: “The future will be no less exciting. The developments I have described all have major effects on the machine tool industry, in fact will cause definite upheavals. However, the sector has repeatedly coped with changes in the past as well. It’s always been well able to hold its own, to adapt developments from other fields for its own purposes, and to re-invent itself. This has been demonstrated over the VDW’s 125 years of history. Which is why we are optimistic for the future as well!”