Published Date: 2019-06-10 | Views: 73 | Machinery and Equipment
Industrialization, increase in infrastructure development, and growing demand for vehicles are some of the key factors driving growth in the global machinery and equipment industry. One of the highly ignored drivers of the global machinery and equipment industry is the high demand for advanced medical devices and machinery. Although the medical industry may not contribute as considerably as other industries and sectors, it could be factored in as an important driver. Demand for construction equipment such as excavators and loaders is prognosticated to see a rise as a result of increased surface mining and construction activities.
Heavy construction equipment could be another leading sector of the global machinery and equipment industry. Its demand is expected to increase due to high investment in infrastructure development, increasing focus on building smart cities, and growing requirement of residential properties. Asia Pacific is predicted to take the lead in the global heavy construction equipment market because of the rise of the construction industry. China could be one of the main contributors to the growth of the Asia Pacific market as the government has plans to significantly improve the transportation infrastructure of the country.
Companies to Introduce Innovative Offerings to Increase Sales
US construction machinery company, Caterpillar is one of the world’s largest construction equipment manufacturers. The American Fortune 100 corporation announced in its May 2019 press release the launch of the Cat 914K Ag Handler Agricultural Loader at Brazil’s Agrishow 2019. In June 2019, it also announced its new Cat R2900 Underground Loader with ease of service, improved cooling, and expanded emissions control options. Clearly, the company has put significant emphasis on new product launch as an important business strategy.
Japan’s Komatsu manufactures construction, mining, forestry, industrial, and military equipment. According to its press release, the company acquired TimberPro, a US forestry machinery and equipment manufacturer, in February 2019. In the next month, it launched the Dubai Training and Demonstration Center in the UAE. The center provides training programs for distributors of the company’s construction equipment.
Liebherr, a Swiss large equipment manufacturer, announced in June 2019 that the first delivery of its MK 88 mobile construction crane reached Spain successfully. The delivery was taken by Grúas Serrat SA, a Spanish crane company. Liebherr is expected to explore new markets in the future.
Hitachi Construction Machinery, a Japanese company, announced in March 2019 that its Indian subsidiary Tata Hitachi Construction Machinery will reduce power consumption by around 30% with the use of photovoltaic power generation. In April 2019, Sweden-based leading construction equipment manufacturer, Volvo Construction Equipment revealed a couple of zero-emissions machines, i.e. the L25 wheel loader and the ECR25 excavator at bauma 2022, a construction machinery trade fair in Munich, Germany.
AI Poses Small Threat to Jobs in Manufacturing Industry
According to KPMG International’s 2018 Global CEO Outlook report, robots are less likely to replace humans in the near future. As per the report, 36% of the manufacturers who participated in the global survey said that AI will kill more number of jobs than it creates. However, two-thirds of the respondents said just the opposite during the survey. 64% of the manufacturers surveyed believed that AI will create more employment opportunities than it eliminates.
Manufacturers will need to use a balanced combination of human intelligence and AI to become effective and successful in their individual industries. KPMG International’s 2018 Global CEO Outlook report shows that automotive and engineering and industrial products are primary sectors of most manufacturers within the manufacturing industry.
Industrial Automation to Increase Demand for Machine Tools
The global machinery and equipment industry includes various sectors such as machine tools, construction equipment, industrial robots, industrial automation, and machine parts. According to industry experts, the global machine tools market is prophesied to gain growth as the adoption of large-scale industrial automation increases. Demand for construction equipment is foretold to grow with the development of advanced public infrastructure and increasing government funding to support related initiatives.
The growth of the global industrial robots market could improve due to the need to increase productivity, reduce costs and wastages, and improve turnaround time. The requirement of industrial automation is expected to increase with the rise of emerging economies, high demand from process industries, and need for improved decision-making. The global machine parts market is foreseen to attain growth on the back of increasing manufacturing of automobiles and rising demand for components with high precision and edge quality.
Adoption of Cloud Computing to Increase in Production Lines
Industry analysts recommend machine builders to become competitive through means of efficient manufacturing and quick delivery of high-quality products. Continuous changes in the global machinery and equipment industry may make it difficult for companies to live up to the expectations. However, one of the ways to achieve the goal could be adopting new processes and advanced technology at the earliest, at least earlier than competitors.
● AR Headsets: On a construction site, these could be as common as hard hats. The assembly line is one of the first areas in the manufacturing space that could be positively impacted by AR
● Cloud Computing: Global manufacturing companies are anticipated to use cloud technology in production. A single cloud server could be enough to store, process, and manage all machine data
● AI: In the coming years, production lines could be equipped with more improved machine learning algorithms and AI systems. Analysts expect the need for standard automated systems to be reduced with the use of ever-changing and dynamic algorithms
Skepticism Related to Use of Predictive Analytics Still Exists
Manufacturing companies are still hesitant to entirely rely on predictive analytics or models to anticipate business trends. The skepticism is that predictive analytics may not be completely accurate and lead to taking wrong business decisions. Nevertheless, advanced data analytics has proven to be extremely beneficial when it comes to creating new revenue growth opportunities, driving new perspectives for business services, and improving the decision-making process. Moreover, AI is a critical element of digital transformation in the manufacturing industry. A large percentage of manufacturers are of the opinion that AI can provide important benefits in the coming years.
KPMG International’s 2018 Global CEO Outlook report mentions that 41% of the manufacturers surveyed said AI can improve their data governance as one of the biggest expected benefits in the next three years. Furthermore, 41% of the respondents said AI can improve their data analytics capability and 31% said it can reduce operating expenses in the next three years.
Key Scenarios of Global Machinery and Equipment Industry
● The global machinery and equipment industry is expected to continue to play a very significant role in industrial innovation
● Short-term market variations could be handled with the help of long-run business cycle
● Established companies may find more time to toughen their business against competition from new players as entry barriers could stay high for the next few years
● One of the key determinants for the global machinery and equipment industry could be global trade relations
● Growth of the automotive industry could reflect positively on machinery and equipment sales