Future strategy: How plant and machinery manufacturers (should) deal with raw material shortages

Rising energy prices, interruptions in supply chains and the increasing shortage of raw materials are driving up production costs in plant and mechanical engineering. What can companies do to cut costs and make optimum use of their capacities? We explain why previous measures have not been sufficient and what the better way is to set up production for a future with scarce resources.

The situation in the industry remains tense

Four out of five companies notice a significant or serious impairment in their supply chains, according to the results of a recent VDMA survey conducted in the fall of 2022. The respondents stated that the delivery difficulties had led to notable sales losses.

Digitalization can mitigate the increasing shortage of skilled workers with automation and smart coordination. However, it does not offer a satisfactory solution to the growing shortage of raw materials and the resulting price increases. These have long been on a scale that forces companies to act: Producer prices for industrial products were up 34.5 percent year-on-year in October 2022, according to the German Federal Statistical Office; in September, the figure was as high as 45.8 percent.

Previous approaches fall short

Plant and machine manufacturers have taken various measures to respond to the changed market situation.

  • Prioritization: Production for the most important customers is given priority over new customers or customers with low order volumes, for example.
  • Flexibility: In order to cushion delivery delays, production is restructured in an agile manner so that machines are used and maximally utilized depending on raw material availability.
  • Planning horizon: With longer project lead times, manufacturers can take advantage of fluctuations in raw material prices and purchase at favorable market prices. At the same time, early ordering reduces the risk of production delays in the event of supply bottlenecks.
  • Job cuts and short-time work: Personnel costs are a significant factor in production. Short-time working and layoffs are therefore an obvious first step when companies are unable to utilize their capacities optimally over a longer period of time.

All these measures can help cushion acute and short-term crises. But many raw materials, for example crude oil, copper and nickel, will remain in short supply as new technologies and economic growth in emerging countries drive up demand. Other raw material prices are rising due to dwindling natural supplies.

To operate more cost-effectively, therefore, there is no way around greater resource conservation for companies. Achieving more output with less raw material without risking product quality and safety – that must be the goal. The future therefore belongs to lightweight construction in mechanical and plant engineering.

Lightweight components: 4 advantages of axial forming

One process we have developed to save material in production and reduce manufacturing costs is axial forming. The principle here is that a gear forming tool presses the external teeth in the axial direction onto a hollow or solid material. The forming process is highly precise, as all the teeth are formed simultaneously with directly a one-piece tool. A precise tool ensures accurate splines. Internal splines are produced in the same way.

Advantages of axial forming

Resource efficiency: significantly less raw material is required.  Axial forming allows splines to be applied to very thin-walled profiles, therefore the component can be designed directly as a lightweight structure.

Precision: The process is highly precise. Recursive axial forming uses a die that reduces the effective deformation forces in the gear teeth by around 40% compared with traditional processes.

Durability: Axial forming increases the strength of the gearing through work hardening. As a result, the components produced are not only on par with traditional material, but have 30% higher fatigue strength. 

Short production times: In axial forming, all teeth are formed simultaneously. For internal gears, this process is therefore up to three times faster than machining. For even more time savings, with a suitable part design, internal and external gears could even be formed simultaneously in one setup by multiple forming axes.

Where can axial forming be applied?

Axial forming is already widely used in the automotive industry. Car manufacturers have had lightweight design on their radar for some time. But the process plays to its strengths in all industries where high-quality gear components are manufactured.

Until now, customers in mechanical and plant engineering have placed little value on lightweight design. However, the improved precision and durability of axial forming is a clear argument for embracing the new process. For manufacturers themselves, the advantages are obvious anyway.

Depending on the production environment and individual requirements, axial forming can be combined with other processes to optimize production, for example our Shortcut Technologies. In this way, we additionally reduce the weights of the components and make production even more effective.

Conclusion: Business as usual is not an option

Machinery and plant manufacturers are still recording sales growth, but this is due in no small part to inflation. Sales losses due to a shortage of raw materials are already the order of the day. A strategic reorientation is therefore imperative.

Saving on personnel costs, taking advantage of favorable market prices – these measures can be the building blocks of a strategy. But significant and lasting cost reductions can only be achieved by changing the manufacturing processes. Axial forming is an optimal approach to save resources and at the same time increase the quality of the components. This not only benefits plant and machine manufacturers in their internal cost accounting. They can offer their customers higher quality and strengthen their competitive position as an innovative, sustainable partner.