Global machine tools manufacturer DMG MORI changed its business model last year, choosing to sell its products directly to customers instead of working through a distributor network. Dr. Thorsten Schmidt, CEO of DMG MORI USA, recently sat down with Today’s Motor Vehicles to discuss the company’s strategic changes, the health of U.S. manufacturing, and what products and services are moving the industry.
Today’s Motor Vehices: While automotive and aerospace production has been high in 2016, some industries have shown a bit of weakness this year. How does DMG MORI see the state of the manufacturing industry?
Thorsten Schmidt: Machine tool consumption is at a very high level still. I don’t foresee anymore that we see the cycles that we had decades ago, where every 15 years or so, it really breaks down tremendously, and you have so much cyclicality.
The markets are so diverse on a global level, so some markets may go down, like this year in Brazil, Russia, and even China. We’re seeing a decrease from those markets. But, you still have other markets where you see positive results. Japan is strong, and the United States has a very strong and stable machine tool market. This year, so far, the U.S. is fairly flat but at very high levels of consumption.
With our global footprint, we’re well set. We’re covering all markets worldwide. That helps us compensate for some of the markets that aren’t performing as dominantly.
TMV: Have you seen a change in the types of machines that companies are ordering?
TS: In the U.S., we see a huge demand for automated equipment. People don’t just want equipment; they want solution providers with process knowledge. They’re looking for efficiency and maximized output. We’re showing the customer how to become more productive.
The machines are integrating different technologies – a laser machine combined with a 5-axis mill, an ultrasonic machine with a turning machine, additive combined with 5-axis. All of this technology integration is ongoing, based on the demand from customers.
In the automotive industry, the final product is getting more and more precise. So the quality requirements are high and getting higher. Tier 1 is asking Tier 2 to increase productivity every year and increase quality of every component, so smaller companies are requesting machines that can produce tighter tolerances.
TMV: How is the demand for precision and productivity being balanced with suppliers’ needs to diversify their product lines?
TS: We still see some demand for application-specific machine models. However, most customers are looking for very flexible machines. They are looking to make investments where it won’t be a handicap in the future to re-task the machine to other applications.
A lot of companies are working on plans to expand into multiple industries, so for us, that translates into people ordering larger tables with larger travels. Despite not needing those capabilities today, many companies are opting for more flexibility for the future.
One production line for a single component for 8-to-10 years, that’s rather rare today. Companies are putting smaller cells together. Of course they’re automating the cells and maximizing productivity, but they want to be flexible and leave themselves the opportunity to add future production to the cell.
TMV: DMG MORI recently moved from a distributor model to a direct sales model worldwide. How has that transition been?
TS: DMG MORI USA is now a team of close to 800 employees in sales, service, and applications. That doesn’t include our factory in Davis (California). That allows us to study more intensely the demand from our customers. When we had a middle man in the picture, the information gap was higher. Now we see, in open houses or in daily communication, immediate feedback on challenges, demand for future equipment, and interest in future technology. This enhances and speeds up the quality and development of our machines.
We’re integrating best practices from top distributors into the DMG MORI business model. We’ve developed a really thorough network of service engineers. In Michigan alone, we have 50 employees and two technology centers. So we’re taking the best of distribution – that regional support – and combining it with the value of direct communication with the end customer.
With larger companies, they quickly see a big advantage when they have multiple locations. They have one point of contact for multiple international locations. It’s not a separate negotiation every time they discuss a new machine or technology with us. In the automotive industry, that single point of contact is often a requirement with negotiating with the OEMs and Tier 1s.
TMV: What’s the most exciting technology that’s influencing machine tools today?
TS: The growth of additive has been impressive to watch. We don’t see a consolidation of the metal-cutting machine tool industry because of the growth of additive. We see this as a good synergy. It helps that we have experience with laser machines and the ability to combine these technologies.
Right now, it’s mainly been prototyping, but we see a lot of demand growing from several industries. In a year or two, you will see these machines more often in production settings, integrated with traditional subtractive technologies.
In automotive, the number of varieties of each vehicle is increasing, and time to market is getting more important, so there is demand for additive. And even if parts don’t get used in production, the ability to 3D print prototypes can speed product development, so there’s a lot of value to be had.
DMG MORI USA
IMTS 2016 Booth #S-8900
About the author: Robert Schoenberger is the editor of TMV and can be reached at 216.393.0271 or email@example.com.