Automation and laser additive manufacturing (AM) have the potential to change your manufacturing model. For some companies, these areas also represent a high-growth customer base, with potential sales for laser diodes, micro optics, plano optics, and other components.
FABTECH in Chicago represents some of the fastest growing segments in U.S. manufacturing today, including laser marking and automation. Attendees are the ultimate users of many of the technology product areas in which we work: laser diodes, optical assemblies, laser steering systems, coating technology, and capital equipment. Yet many optics and photonics companies know little about end applications and user needs.
Here’s a quick look at the opportunities for optics and photonics companies that are well-positioned to sell to manufacturers of capital equipment:
40% of these manufacturers said they would invest in additive manufacturing in 2017
1.4M new robots will be installed in factories around the world by 2019 [International Federation of Robotics ]
$1.96B in automation startup funding in 2016, up 50% from prior year [ROBO Global]
As of 2015, 64% of working hours spent on manufacturing-related activities globally were automatable with currently demonstrated technology. [McKinsey]
Understanding end users’ concerns to create value
FABTECH is perhaps 2-3x larger than SPIE Photonics West, so it should come as no surprise that the audience is quite a bit more diverse. Decision makers at the 2017 show appeared to vary widely in educational background, title, and technical depth. Sophisticated equipment purchases are often made by someone with considerable experience using it—and who better?
The broadening of audiences and end applications suggests that, if you are a component manufacturer, you need to:
· Gear your messages to what your customers’ customers care about.
· Answer your customers’ questions in multiple formats and technical depth (e.g. FAQs, white papers, spec sheets).
· Expand your outreach—your customer base is far wider than the optics community. Start by attending a new trade show or joining downstream LinkedIn groups.
· Solve a real problem for your customers.
Three top challenges facing American manufacturers–Their concerns are yours
The challenges faced by manufacturers today are not unique to optics. Economic reports confirm what FABTECH 2017 speakers and attendees voiced as challenges:
· Productivity
· Labor
· Global competitive pressures
In the “State of the Industry” panel discussion, speakers Dr. Chris Kuehl, Managing Director for Armada Corporate Intelligence, and Chad Syverson, Professor of Economics with the University of Chicago Booth School of Business, shared their take on these concerns and what capital equipment and component companies can do to help address them.
What’s changing?
Syverson suggests that we’re in the “lull between two waves” in productivity. Much like how the introduction of computers created some initial productivity uptick—and then a decade of slowdown before companies really rethought how they operated—automation, additive manufacturing, and AI are having a similar impact, resulting in a productivity growth rate cut by half since the 2000s.
This slowdown translates to $10,000 per person in lost GDP. Manufacturers must pick and choose where and how to implement emerging technologies, and companies that can specifically address and achieve productivity gains will win the sale.
Kuehl and Syverson also noted a shift toward a domestically driven economy. The unit/wage gap between the U.S. and China closed by half in the last decade. More and more companies will be reshoring, especially for products with a high transport cost.
The U.S. is also exporting less and opening up to more imports. Thoughtful positioning will be crucial to combating “import prestige” and communicating value in the domestic market. Companies that focus on innovation and establishing a true differentiator will have the most success. Many companies, including those we work with, are winning customers by keeping precision manufacturing here.
What should manufacturers do?
Kuehl states, "Marketing is important. As an economist, it pains me to say this. It's finding a way to communicate what you do and why it's important. It also is important in recruiting. The more people who know you and see you as innovators, the easier it will be for you to get talent."
Kuehl argues that advanced manufacturers must look at the “totality of business” and tell a story that creates value for their customers.
Syverson says it’s up to them to "make value for America." Think holistically about your manufacturing; design it to be as valuable as possible to your customer. It involves a lot of interfacing with your customer and understanding their needs.
Three top opportunities for American manufacturers
With 3% growth in the third quarter and 3.6% in second, economic growth is slow but steady. In particular, experts believe we’ll see industry growth in:
· Automotive—the hurricanes alone will create demand for 4M new cars
· Energy
· Boomer-driven industries, like assisted living and healthcare
Smaller manufacturers have a real opportunity; they’re nimble and able to differentiate on innovation. In an increasingly digital world, they’re able to establish themselves as thought leaders and create a brand without the traditional ad spend and budgets other marketing channels require.
To learn more about positioning your company for growth in this or other emerging markets, attend our class at Photonics West, Tuesday, January 30, 10:15-12.
