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Why investing in CNC automation is of all times, even in the face of (economic) uncertainty


Annemie Vermeulen

Published on

Apr 9, 2024

It is in the nature of the beast to put the brakes on investments in a slowing economy, and when the geopolitical horizon turns dark red. But we shouldn't wait for the dust to settle to see new opportunities, because they actually shine brighter than ever. In this blog, we focus on what we can do in these times, and how we in the manufacturing industry can get out of the doldrums a little faster. Can you see the sparkles already?

  1. Where do you want to be once the economy recovers?

If today doesn't look rosy, just look at tomorrow. Neither you nor I can influence macroeconomic trends, so let's look at what we can impact. Let's start by asking ourselves where we want to be once the economy recovers.

Because even in this period of low orders, the clock is ticking, and in the metal sector, bringing the few CNC operators closer to retirement. The influx of new operators is stalling because the job is no longer creative enough. We don't need a recession to see this problem, but we can use this quieter period to look at how to make the job package more varied again. And let that be the strength of CNC automation.

Finally, we owe it to the next generation of machine operators to invest in CNC automation. Not only to make their job more enjoyable, but also so that they can respond easily to fluctuating demand. Because in recent years we see a trend that manufacturers are now keeping their gigantic inventories as small as possible to save costs. So it's over with those foreseeable fixed orders.

Fortunately, our next argument navigates you effortlessly along that erratic demand curve.

2. Unpredictable demand requires maximum flexibility

The economy is recovering faster than you think, and you know how it is in the manufacturing industry: demand comes out of nowhere, and at a dizzying rate. With our 16 years of experience, we know that this requires flexibility from manufacturers that they usually don't have.

Responding to unpredictable demand will indeed give you sleepless nights if you don't know how to respond to it. Yet the issue is simple: if you don't know the variables yet, then look at what's fixed. The number of hours in a day is a given; we cannot change that either. But you do influence how efficiently you fill those hours:

A CNC operator spends about 30% of his day working. As long as he is not sick, on leave or undergoing extra training, because then that percentage drops. That's already a lot of noise on efficiency, while labour costs are higher than ever.

With CNC automation, that utilisation rate is almost 100%.

And we all know those pioneers in our sector whose annual accounts have not been in the red for years, who manage to attract and keep young workers, and month after month more orders come in.

This is because some time ago, probably during a period similar to today, they took the time to review their processes. They came to the conclusion that they needed to invest in their machinery, digitisation and automation, and they are now reaping the benefits.

In the introduction, we wrote that opportunities are a glimmer on the horizon. CNC automation is then the comet that will usher in the paradigm shift. And actually, that is exactly what our industry needs to be more resilient in times of recession, and far beyond.

3. Time for a paradigm shift, especially now that the leap is smaller than ever

After ebb comes flood, and it is no different in the manufacturing industry. Those who could barely keep up before the economic contraction certainly benefit from a pivoted manufacturing process. That transition to automation unfortunately always comes with some down time, but that disadvantage is very much not so bad in this lukewarm period.

Moreover, automation is the way to catch up and even get a head start on your competitors, enabling you to quickly reap the benefits when the economy returns to its fold. In the long run, you will then enjoy the cost savings that efficiency brings.

We know: it takes a lot of courage and confidence to automate your production process, but you are encouraged on all sides to take the plunge in these atypical times. With interesting terms and unprecedented short delivery times, the leap is smaller than ever, and you can actually recoup your investment even faster than what any brochure/website/seller will promise you.

What are you waiting for?

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