When the iPhone was introduced in 2007, people were skeptical. After all, telephones had physical keyboards (remember the BlackBerry?), and here was a smooth surface.
In the 17 years since, more than 2.3 billion iPhones have sold globally.
What’s more – and this is quite a bit more – if you take into account smartphone makers like Samsung, Google, Motorola, and Chinese brands like Xiaomi and Transsion, companies that refused to move on from the physical interface are out of business or doing something else entirely.
Consider this: BlackBerry had 46% of the phone market in 2010 – and 6% by 2013. It has since transitioned into being a leading security software developer.
In the auto industry, despite some fits and starts, major OEMs are very clear in their global commitment to switch from internal combustion engines to electric propulsion systems. Companies making everything from camshafts to pistons will find their orders declining. It might be slow, then fast. Or it might be gradual as purchase orders keep coming in, smaller every time, until they don’t. But it is inevitable.
Consider the burgeoning field of electric vertical takeoff and landing (eVTOL) aircraft. While these are still early days for everything from certification to build-out of production capacity, billions of dollars are being invested. EVTOLs represent a business opportunity for manufacturers – and not necessarily just for those from the aerospace industry. Not only are the demands different – these craft are powered by electric motors, not propulsion engines – but companies unfamiliar to the aircraft market are involved in building out the manufacturing, such as Stellantis working with Archer Aviation.
Change is happening faster than ever. With it comes opportunities – as well as potentially insurmountable challenges to the status quo.
September’s IMTS presented an array of manufacturing technologies that surprised even me – and I spend a lot of my time focused on this field! I can say without hesitation that I saw a considerable number of new and amazing machines, systems, software, and services – and, for those savvy enough to take advantage, their potential.
While manufacturing technology is ever evolving, its pace is arguably increasing, driven in part by companies that previously focused on consumer products (e.g., Amazon, Nvidia, Google). What’s more, long-existing companies in the field have long existed because they understand that not advancing is synonymous with declining.
If we accept that changes in end markets are accelerating, then companies supplying the OEMs or tier ones in that end market face serious risks.
So, the challenge that arises is understanding both (1) market changes and (2) the technologies that can help a company address those changes. This may mean more effectively and efficiently producing a customer’s orders so your company will be immune to any supplier-reduction moves – or pivoting to producing something else entirely.
Keeping things running smoothly every day is difficult enough, so developing both market intelligence and an understanding of the new technologies (everything from digital twins to additive to 5G to edge computing) is, admittedly, daunting.
But this is manageable if you leverage your resources. I’m not just claiming this. I spent the better part of my career doing it.
A shop owner or company president needs to have people in place – from those keeping production running to managing programs to maintaining financials – ready to dedicate a non-trivial amount of time to learning what’s going on in existing and potential markets. This could be as much as 30% to 40% of one’s time.
While this may seem excessive, think about the companies that provided the tooling for those cellphone keyboards: How long did they have? Or what about suppliers to carburetor manufacturers?
Changes of this nature are simply happening much faster.
So, a commitment to ensuring you know what’s going on is critical.
Then there is the issue of new technologies. While your shop floor may be full of tried-and-true equipment supplemented here and there by a few pieces of new, or newer, machines, chances are this setup is doing what you’ve long been doing. But technology likely exists that could greatly reduce your production costs – or, importantly, provide you with the means to do something that your competitors can’t do (they probably have similar shop floors to yours) or that your customers may find advantageous.
It may be worth risking as much as 10% of your capex equipment budget on the chance that some technology may provide your company with a competitive advantage.
I would be remiss if I didn’t point out that AMT develops substantial market intelligence for its members, so we are eager to help you learn about the current and changing environment. AMT also organizes events to put members in front of companies that may be familiar as well as those outside their regular sphere. And, of course, through events like IMTS, AMT aggregates an unparalleled collection of the latest manufacturing technology.
But the point is that maintaining the status quo, doing what you’ve always done, is simply not sustainable. Change is coming fast and hard – and continuously.
While you can’t stop it, you can position yourself to use it to your company’s advantage.
To read the rest of the Space Issue of MT Magazine, click here.
