A year ago, I shared my thoughts on what 2020 would look like in the CNC machining industry. Sure, some of those predictions did happen, but a global pandemic turned many things upside down.
As the country still battles COVID-19 with a vaccine rollout and continued social distancing, it’s interesting to me that many thoughts I had on 2020 are developing in 2021. In fact, where the industry is right now looks a lot like a year ago, pre-pandemic and pre-election. There’s a lot to be optimistic about, so let’s explore what’s coming up.
Beating a Pandemic
COVID-19 was a shocker to us all. Fortunately, the large drop-off didn’t last long, and we’re currently seeing levels that are equivalent to what we saw prior to the pandemic, with many areas seeing growth.
When COVID-19 first hit, larger OEMs were trying to bring manufacturing back to the U.S. from overseas, China in particular. That was last summer, but by fall, there was much less of a push to source in the U.S. compared to China.
As the vaccine rollout goes on, things look strong, and I think we'll continue to see growth, at least in the CNC machining industry.
Capital Spending and Growth
Understandably, not a lot of companies spent money last year on capital investments. Right now, however, you can really see a change. Investments in robotics, new equipment, and technology are surging.
There’s a large amount of pent up demand because many industry capital expenditures didn't happen last year. A lot of that is coming to fruition now; everybody is trying to cut PO’s at the same time. It's definitely becoming more difficult to get equipment. Also complicated at this time is the integration and installation of equipment.
Instead of looking like most of 2020, with orders contracting or staying at suppressed levels, current growth in the marketplace overall is sparking more CNC machine shop activity in 2021, with orders likely increasing throughout this year.
Changes in the Marketplace and Customer Expectations
We’re all starting to understand the new administration, their goals, and what that looks like within the marketplace. There’s a new enthusiasm around alternative energy now.
For instance, production of hybrid and electric vehicle components has been increasing for years, but now there’s a big spike in that area, which will continue. With General Motors just announcing that they will only produce electric vehicles by 2035, it’s a huge move. In our machine shop, the increase in electronic axles for large trucks — up to Class 8 vehicles — means this is not just consumer automobiles but larger vehicles, too.
Not new, but another marketplace influencer, is the push for shorter lead times and just-in-time inventory. COVID-19 had a giant impact on supply chains in 2020, obviously, and that will continue this year. The complexity of having the right inventory in place makes inventory management that much more important.
Lead times continue to be affected, whether that’s due to quarantining or illnesses or some other pandemic-related issue, or even just overall labor shortages. That's something all CNC machine shops are still struggling to figure out.
People Power Drives CNC Machining
The pandemic was a multiplier when it comes to challenges with the labor force. CNC machine shops didn’t exactly have an overflow of qualified people before COVID-19. Then, shops had to deal with a large percentage of employees who were quarantining, out with illness, or handling other challenges within their families.
Those factors made it advantageous to have the right staff onboard before the pandemic hit and downright crucial when things got more difficult. Most shops had to learn how to better manage their workforce’s needs and be proactive when it comes to absences.
Instead of having a negative effect, smart companies improved inventory planning or ran orders earlier than they would have previously. In addition, training within a CNC machine shop, which was nearly impossible during the height of the pandemic, had to be done in different and safe ways. Lastly, diligent shops kept searching for new talent, even during slowdowns. All of this helped retain the best employees and is now paying off.
Moving into 2021, flexibility remains the most important thing a CNC machine shop can keep in mind to understand people’s needs. Making adjustments when they need to be made, helping workers feel comfortable, or putting people in a position to succeed (safely) are ways to survive the difficulty of labor shortages.
CNC Machine Centers Continue to Evolve
This was a focus of our 2020 outlook article a year ago, and it’s worth mentioning again because it has to do with labor shortages as much as it does product quality. Advancements in technology — robotics, automation, the Internet of things, machine/software integration — are more important now than just a year ago.
While CNC machines are quite mature, as is their technology, refinements make them easier to use and more relatable to millennials. Touchscreens, app-like controls, intuitive software, easy-to-understand CAD and CAM … they’re all more user-friendly now. Modern machines that integrate more functions, communications, and diagnostics appeal to (and help retain) younger employees who appreciate a more-intuitive interface.
Another ongoing shift is toward manufacturing systems and planning software becoming more and more integrated. Machine data — real-time counts, tools, alarms, cycle times — help with immediate needs as well as long-term planning. MES (manufacturing execution system) software integrated with an ERP is now common.
Relationships are More Important than Ever
Our final point to make during this 2021 outlook is something all CNC machine shops should’ve been doing for decades, yet its importance has reached a new height: cultivate good relationships.
- Sharing in-house technical expertise with customers can set a CNC machine shop apart
- When a shop needs new equipment or integration, a solid relationship with machine tool vendors is huge
- A discussion with a machine operator that shows how performance directly ties to profitability helps create transparency and builds loyalty
These are all different relationships within a CNC machine shop, yet they’re all incredibly important. Now, multiply their importance because of COVID-19. The value of honest relationships cannot be overstated moving forward in 2021 and every year!
Now that you’ve read how 2021 will be loaded with advancements and growth, you’re invited to review Stecker’s most recent and advanced automated robot cell. We met a customer’s extremely tight tolerance challenge by developing a new work cell that incorporates robots and a synced CMM. Download Turnkey Clutch Housing Cell Development Case Study now!