Laboratory for Machine Tools and Production Engineering ...

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Toolmaking for the future

A global study of today‘s situation and future trends in the tooling industry

Today’s turbulent economic environment confronts the global tooling industry with serious challenges. Cost competition and the high demands of globalized value-adding chains put pressure on small- and medium-sized toolmakers. As an exclusive differentiation in price is not an option, new means for achieving sustainable competitive positions have to be found.

A promising approach for differentiation is to enhance the existing range of products by offering customer-specific services within so-called industrial product-service-systems. However, the lack of local presence inhibits the toolmakers’ abilities to deliver these services to their global customers.

To address these challenges the European R&D-project TIPSS has the objective to develop suitable methods, techniques and technologies, for toolmakers to improve their local and global performance thus enabling them to offer industrial product-service-systems on a global scale. Based on an extensive survey, a global footprint of the existing service landscape and a portfolio of value-adding services are presented.

The interaction with many toolmaking companies as well as their customers all over the world gave us the opportunity to get valuable insights on the current situation of this particular industry and how the needs of the customers determine trends in services and cooperation in the near future. We are very pleased to be able to share these findings and support a favorable development in this key industry.

Sincerely yours,

Günther Schuh

Univ.-Prof. Dr.-Ing. Dipl.-Wirt. Ing.

Content

2 3

Preface

Challenging times need adequat solutions

Preface ............................................3

Design of the survey ..................4

Statistics .........................................6

General information ..................8

Global footprint ........................12

Tool malfunctions ....................20

Tool-related services ...............26

Conclusion and outlook ........33

Acknowledgements ................34

Contact ........................................35

Authors: Schuh, G.; Boos, W.; Gaus, F.; Schittny, B.

ISBN 10 3-926690-19-4 ISBN 13 978-3-926690-19-7

© 2009 Laboratory for Machine Tools and Production Engineering of RWTH Aachen University

All rights reserved.

Design of the survey

Structure of survey participation by region

4

The survey was carried out in two parts, starting with the customers and ending with the toolmakers themselves. In

from 21 countries as well as 150 toolmakers from four regions of the world took part.

total, 278 companies in relevant economies all over the world have participated in the survey. 128 parts producing companies

Ger-many

Portugal Switzer-land

Austria France Belgium Bulgaria IsraelTurkey SloveniaHungary Ukraine China Taiwan Indo-nesia

Korea USA Mexico Canada Chile Egypt

56 21 29 19 3

China/ South East AsiaNorth AmericaOthers

Eastern EuropeWestern Europe

China/ South East AsiaNorth AmericaOthers

Eastern EuropeWestern Europe

CzechRepublic

Germany Portugal Italy Schweiz Bulgaria China Hong Kong Korea USA

110110 1111 1919 1010

Structure of survey participation by industry and tool type

5

The figures below show in which industry sectors both toolmakers and customers that participated in the survey are active. Around 50 percent of all participants are doing business in the automotive

these production technologies built by the toolmakers (Fig. 5 and Fig. 6).

and consumer products sectors (Fig. 3 and Fig. 4). The figures on the right give an overview of the production technologies used by the participating part producers respectively the tools used within

14%

6%

24%Automotive

22%Electronics and electrical

Aerospace and defense

7%White goods

Medical, healthcare and

pharmaceutical

27%

Consumer products

14%

7%

30%Automotive

21%

Electronics and electricalAerospace

and defense

11%White goods

Medical, health-care and

pharmaceutical

16%Consumer products

Fig. 1: Customer survey participation

Fig. 2: Toolmaker survey participation

Fig. 3: Industries served by customers

13%

71%

Injection moulding parts N = 98

Sheet metal parts N =22

16%

Pressure die casting parts N = 18

16%

59% Injection moldingtools N = 102

25%Tools for sheet metal partsN = 43

Pressure die casting toolsN = 28

Fig. 4: Industries served by toolmakers

Fig. 5: Type of parts produced by customers

Fig. 6: Type of tools produced by toolmakers

Statistics

Financial aspects Tool dimensions and weight

6 7

One goal for the selection of survey participants was to accurately reflect the industry landscape of each region. As was expected, the average tool price (Fig. 7) of the tools produced by the study participants was the highest in Western Europe. The average tool price in China/ South East Asia on the other hand was substantially higher then expected, indicating that participants from this region produce rather larger or more complex tools than the industry average. This assumption was supported by the statistical analysis of the tool‘s dimensions (Fig. 9) and weight (Fig. 10). The predominant tools used by customers in all regions are smaller than 500mm by 500mm and weigh less than 500kg.Concerning the size of the companies participating in the survey Figure 8 shows the average revenues of the toolmakers. Accurately reflecting the structure of the industry, the majority of toolmakers generates revenues of up to 3 Mio. EUR.

Accurately reflecting the structure of the industry, the majo-rity of toolmakers generates revenues of up to 3 Mio. EUR

21%

4%

North America

39%

24%

11%

4%

Western Europe

32%

26%

5%

21%21%

26%

13%

36%

18%

Eastern Europe

30% 30%

17%

11%

China/ South East Asia

< 250 x 250 mm²< 500 x 500 mm²< 1000 x 1000 mm²< 2000 x 1000 mm²> 2000 x 1000 mm²

11%

29%26%

32%

26%

5%

13%

30% 30%

North America

5%9% 11%

17%

Western Europe

22%19%19%

29%

Eastern Europe

29%

11%


< 100 kg< 500 kg< 1000 kg< 5000 kg

35%

26%

> 5000 kg

29%26%

32%

26%

5%

13%

30% 30%

North America

5%9% 11%

17%

Western Europe

22%19%19%

29%

Eastern Europe

29%

11%


35%

26%

21%

4%

North America

39%

24%

11%

4%

Western Europe

32%

26%

5%

21%21%26%

13%

36%

18%

Eastern Europe

30% 30%

17%

11%


11%

The predominant tools used by customers in all regions are smaller than 500mm by 500mm and weigh less than 500kg

Toolmaker perception:

Part of customers interested in service

Revenue generatedthrough service

15%

48%

40%

0 - 3 Mio. EUR

27%

3 - 6 Mio. EUR

17%

6 - 12 Mio. EUR

16%

> 12 Mio. EUR

Fig. 7: Average tool price

Fig. 8: Average revenue of toolmakers

Fig. 9: Average tool dimensions

Fig. 10: Average tool weight

39 000EUR


Eastern Europe

53 000EUR

67 000EUR

76 000EUR

Western Europe

North America

General information

Perceived satisfaction in the tooling industry

Selling points - toolmaker vs. customer perception

8 9

The widespread assumption that the most important criterion for a customer would be the purchase price of a tool has been disproved. Superior criteria turned out to be the quality of a tool followed by on-time delivery and short cycle time, showing that total cost assessment is gaining in importance. Next to the absolute evaluation of the criteria it is especially

of offering adequate warranty conditions. The fact that both toolmakers and their customers evaluated the distance between customer and supplier as relatively unimportant shows that both sides do take part in the globalization of markets. However, this is no indication of how well they perform within these markets.

interesting to note the differences between the toolmakers’ evaluation and the actual evaluation by their customers. While toolmakers generally believed that previous relations to a customer would secure them future contracts, the customers displayed a higher willingness to switch suppliers. Vastly underestimated by the toolmakers was the necessity

In general the current business situation in the tooling industry is dissatisfactory – however toolmakers in certain regions and industries or with a diverse customer base seem to get along better then others. Figure 11 illustrates the level of satisfaction of the over- and underperformers of each category. It can be seen that Chinese/ South East Asian toolmakers are the most satisfied whereas their counterparts in Western Europe are the least satisfied. The largest difference in satisfaction can be noted for toolmakers serving global customer versus toolmakers that

only act on a local level, the latter being the least satisfied. The same can be said for toolmakers having multiple customers versus the ones only doing business with a small number of parts producers.

In general the current business situation in the tooling industry is dissatisfactory

Price is not the most important criterion for differentiation

Toolmaker

Customer

Overperformer

Average

Underperformer

Fig. 11: Level of satisfaction in the tooling industry

Fig. 12: Perceived differentiation criteria

Note: Average value of answers given by the participants on a scale from 1 (dissatisfied) to 7 (satisfied)

Note: Average value of answers given by the participants on a scale from 1 (unimportant) to 7 (important)

5.896.28Tool quality

5.566.08

On-time deliveryof the tool

5.385.24Cycle time

5.154.79Warranty conditions

5.15Purchase price

5.095.84

Reputation of the toolmaker/previous business relationsh

5.005.59

Innovative toolingsolution

4.445.25

Product-relatedengineering services

3.814.08

Distance of toolmaker toyour production site

5.13

Price Equivalent

2,64

3,05

2,56

2,98

2,64

3,33

2,38

3,00

2,72Industryaverage

Western Europe

China/ SouthEast Asia

White goods

Consumerproducts

1 to 3

Only withinown country

> 20

to more than20 countries

By region

By industry

Globalcustomers

By numberof customers

Average

While toolmakers in North America and Eastern Europe are mostly small companies of up to thirty employees, Chinese/

Production capacities and technical resources

10 11

North American and Western European parts producers have more production hours per week available than their competitors in Eastern Europe and China/ South East Asia.Longer production hours per week are an indication that productivity of parts producers in North America and Western Europe is still higher.

Customers‘ production sites, especially in China, often have an internal toolshop indicating that service is usually done in-house with own resources.

More production time per week is an indication that Western parts producers are still more productive than their counterparts in emerging markets.

86%

68%

55%

50%

14% China/ South East Asia

32%

Eastern Europe50%

Western Europe45%

North America

Production hours per week

128 hWestern Europe

120 hNorth America

79 hChina/ South East Asia

78 hEastern Europe

Percentage of parts producers with internal toolshopPercentage of parts producers without internal toolshop

1,31,31,81,98,3 h

16,0 h

9,3 h11,6 h


North America

8,1 h

14,1 h

8,3 h10,3 h

Western Europe Eastern Europe

Average number of shifts per dayDuration of an average shiftTotal productive hours per day

27% > 1000%

Eastern Europe

33%

0%

56%

21%13%

63%

25%0%

North America

13%

Western Europe

14%26%

67%

0%

31 - 50


0 - 1011 - 30

51 - 100

6% 6%13% 19%

0%

31 - 50 employees

0 - 10 employees

11 - 30 employees

51 - 100 employees

> 100 employees

Chinese/ South East Asian toolmakers have the most productive time per day (Fig. 13). Even though North American toolmakers lead in terms of

average shift duration, Chinese/ South East Asian and Western European toolmakers on average have a higher number of shifts for tool production.

Chinese and South East Asian toolmakers take the lead in terms of available productive time and manpower

South East Asian companies often employ more than a hundred workers.

Fig. 13: Productive time per day (toolmakers)

Fig. 14: Number of employees of toolmakers (toolmakers)

Fig. 15: Productive time per week (parts producers)

Fig. 16: Internal toolshops

TMTMTMTMTM

Global customers

12 13

The first part of the global footprint investigates to which degree toolmakers currently take advantage of globalization by entering new markets to sell their tools. Figure 19 depicts the structure of the toolmakers’ markets in each region. It can be seen that North American and Western European toolmakers still have a very strong focus on their own region. The regions China/ South East Asia and - to a lesser extent - Eastern Europe have a higher percentage of export to other regions. This shows on the one side, that North America and Western Europe are currently still target markets when it comes to parts production. On the other side it also shows that toolmakers in China/ South East Asia and Eastern Europe are using the globalization of markets more consequently for selling their tools.

The goal of the TIPSS project is to enable toolmakers to address global challenges - rendering services on a global level,

participate in the benefits globalized markets can bring. Those who do not will have a hard time to survive.

entering new markets and sourcing globaly. Toolmakers that address these challenges adequately will be able to

Toolmakers in China and South East Asia use globalized markets more consequently for selling their tools

Global customers Local on-site presence

Global sourcing Global partnerships

Global Footprint





Global FootprintGlobal Footprint

customercustomer new marketsnew marketslocal affiliatelocal affiliate product-servicesproduct-services global sourcingglobal sourcing

Vertical extension of the value chain (new product related services)

Provision of product services through local partners

Entering key market areas

Partner networks create access to new customers

Partner networks support global sourcing

Tapping resources in global markets reduces the cost pressure

Rendering services viaglobal networks New markets Global sourcing

Through the global footprint, the survey tries to elaborate which the current status regarding these challenges and opportunities is and which tendencies, if any, can be observed. The global footprint focusses on four aspects:

- Global customers- Local on-site presence- Global partnerships- Global sourcing

Global footprint

Challenges and opportunities

Fig. 17: Global challenges

Fig. 18: Global footprint

Fig. 19: Structure of toolmakers‘ markets by region

Percentage of toolmakers thatdeliver tools within own regionPercentage of toolmakers thatdeliver tools to other regionsPercentage of toolmakers thatdeliver tools to other regions

13% 13% 13% 13% 13% 13%0%20%40%60%80%

100%

100%

North America

South America

0%

North Africa

0%

MiddleEast

Western Europe

Eastern Europe

India China South East Asia

0%

Australia

North America

44% 36%11% 22%

51%

14% 24% 12%0%20%40%60%80%

100%

North America

South America

North Africa

MiddleEast

94%

Western Europe

Eastern Europe

India China South East Asia

6%

Australia

Western Europe

20%

60%

20%0%

20%40%60%80%

100%

0%

North America

0%

South America

0%

North Africa

MiddleEast

Western Europe

60%

Eastern Europe

0%

India China

0%

South East Asia

0%

Australia

Eastern Europe

83%

28% 22%44%

78%56%

39% 50%

0%20%40%60%80%

100%

North America

South America

North Africa

MiddleEast

Western Europe

Eastern Europe

India

61%

South East Asia

Australia

33%

China


Global customers

14 15

Customers were asked to rank the importance of several disadvantages they perceive when buying tools from toolmakers in other regions of the world on a one-to-seven scale, seven being the most severe disadvantage (right). The evaluation shows, that a lack of services was ranked just after quality issues and delivery time, clearly implicating the importance for a toolmaker to be able to deliver services on a global level. However, even though service is seen as important, the majority of customers only has a very small number of external service partners for maintenance (Fig. 23). While 25 percent of the parts producing companies have no service partner at all, 57 percent have only two partners or less.

Note: Disadvantages perceived by customers (scale 1 to 7, with 7 being the most severe disadvantage)

The customer’s perspective on global sourcing of tools is given in Figure 20. The illustration shows the ratio of global vs. local tool purchasing of companies within the different regions. Parts producing companies were asked to rank the top four countries from which they purchase tools. It can be seen that companies in Western Europe and China/ South East Asia frequently purchase tools from toolmakers within their own region. The specific purchasing habits for each region are depicted in Figure 21. The illustrations show in detail where the main sources of tools for parts producing companies from each region are.

Lack of service is a major obstacle for customers to buy tools on global markets

17%34%

45%65%

83%

Western Europe

66%

China/ South East

Asia

55%

North America

35%

Eastern Europe

100%

4,3

5,3

4,6

4,8

5,0

4,6

4,0

3,8

4,8

Price

Tool quality

Cycle time

Warranty conditions

Delivery time

Distance

Lack of services

Reputation

Language

Perceived disadvantage“Lack of service”

Fig. 20: Global vs. local tool purchasing

Fig. 21: Global vs. local tool purchasing by region

Fig. 22: Perceived disadvantages when purchasing foreign tools

Fig. 23: Number of external service partners (customers)

25%

0

37%

1-2 3-5 6-10

33%

3%

57%57%30%

15%0%20%40%60%80%

55%

North America

Western Europe

0%

Eastern Europe

China/ South

East Asia

0%

MiddleEast

North America Western Europe

Eastern Europe China/ South East Asia

0%20%40%60%80%

5%

Western Europe

North America

4%

Eastern Europe

8%

83%

China/ South

East Asia

0%

MiddleEast

56%

0%20%40%60%80%

3%

China/ South

East Asia

3%

MiddleEast

3%

North America

Western Europe

35%

Eastern Europe

21%0%20%40%60%80%

MiddleEast

0%

Western Europe

2%

China/ South

East Asia

66%

Eastern Europe

North America

11%

Percentage of top 4 ranked tool supplying countries located within own regionPercentage of top 4 ranked tool supplying countries located in other regions

0

10

20

30

40

50

60

70

80

< 80%

4%7%

<= 100%< 40%

4%

< 60%

16%

0

60%

< 20%

9%

76%76%

Local on-site presence

Global partnerships

16 17

The third perspective of the global footprint investigates partnerships and other relation-ships between toolmakers in terms of backward and forward integration into each other’s processes. Toolmakers where asked whether or not they do have any partnerships regarding the provision of services. Figure 27 shows that a large part of the toolmakers, especially in China/ South East Asia, is currently not cooperating with other toolmakers for rendering tool-related services. Figure 28 illustrates the reasons why toolmakers choose not to cooperate. It sticks out that while North American and Western European toolmakers are worried about the protection of their know-how, Chinese/ South East Asian toolmakers simply have trouble finding appropriate partners.

To draw a picture of the on-site presence of toolmakers at their customers‘ production sites regarding the provision of tool-related services, both the customers‘ as well as toolmakers’ perspectives are given.Figure 24 shows that a customer’s toolmaker only performs tool-related services locally at the customer’s production site in rare cases. Since tools are only shipped back to the toolmaker in rare cases, this means that the customer usually performs maintenance with his on capacities.

While half of the toolmakers in North America, Western and Eastern Europe state that they never or hardly ever perform service at the customer‘s production site, toolmakers in China/ South East Asia seem to have a higher on-site presence.

Know-how protection and the lack of appropriate partners keep many toolmakers from cooperating with others

22%

never

28%

8%

8%

7%

3%

25%

always

Average of North America,Western and Eastern Europe

50%50% 28%28%

9%

never

9%

4%17%

22%

always

13%


26%

39%39%18%18%

30%

44%

25%

35%

Eastern Europe China/ South East AsiaWestern EuropeNorth America Eastern EuropeEastern Europe China/ South East AsiaChina/ South East AsiaWestern EuropeWestern EuropeNorth AmericaNorth America

0%4% 2% 0% 0%

79% 75% 78% 80%

0-25%

14% 19% 17% 15%

26-50%

6% 5%

51-75%

7%

76-100%

North AmericaWestern EuropeEastern EuropeChina/ South East Asia

Fig. 24: Percentage of tool-related service performed at the customer‘s production site (customers‘ perspective)

Fig. 25: Percentage of tools sent back to toolmakers for repair by region

Fig. 26: Percentage of tool-related service performed at the customer‘s production site (toolmakers‘ perspective)

Fig. 27: Percentage of toolmakers without partners for service provision

Fig. 28: Reasons for not having a partner for service provision

0

10

20

30

40

50

60

70

80

4% 2%

79% 75% 78% 80%

0-25%

14% 19% 17% 15%

26-50%

6% 5%

51-75%

7%

76-100%

50%44%

67%

29%

Not thought about it yet

16%

57%

No appropriate partner found

75%

Know-how protection

22%29%

50%

The cost is too high

29%

100%

3%

33%

No standard procedure to

cooperate

Global sourcing

18 19

The last perspective of the global footprint focuses on the ability of the toolmaker to use globalized markets for sourcing. Figure 29 shows that standard tool parts are the largest part of global sourcing. It seems that while Eastern European and Chinese/ South East Asian toolmakers have a stronger focus on selling their tools in other regions then their Northern American and Western European counterparts, they also go further when it comes to buying parts in other regions (below). Furthermore it can be seen that while standard tool parts are commonly sourced globally, service are still mostly procured locally. The graphs on the opposite page depict advantages and disadvantages perceived by toolmakers when sourcing globally. While North American, Western and Eastern European toolmakers mostly see an advantage in price, Chinese/ South East Asian toolmakers source globally because of quality, reliability, reputation, warranty conditions and, surprisingly, delivery time.

Price is currently the only advantage seen by toolmakers worldwide when sourcing globally

Eastern EuropeChina/ South East Asia

Western EuropeNorth America

Eastern EuropeChina/ South East Asia

Western EuropeNorth America

ServicesComplete tools

Taylor made tool partsStandard tool parts

ServicesComplete tools

Taylor made tool partsStandard tool parts

Perceived advantage (scale 0 to 3)

Perceived disadvantage (scale -3 to 0)


Perceived disadvantage (scale -3 to 0)Perceived disadvantage (scale -3 to 0)

Fig. 29: Global sourcing by type (toolmakers)

Fig. 30: Global sourcing by region (toolmakers)

Fig. 31: Perceived advantages and disadvantages of global sourcing (toolmakers)


Perceived disadvantage (scale -3 to 0)


Perceived disadvantage (scale -3 to 0)Perceived disadvantage (scale -3 to 0)

-1,2

-1,1

-1,1

-1,5

-0,6

-0,6

-1,2

-0,8

-0,6

-3 -2 -1 0 1 2 3

1,5Price

Quality

ReliabilityWarranty

ConditionsDelivery time

Distance

Lack of services

Reputation

CommunicationCustoms

procedures

-0,8

-1,4

-1,1

-1,1

-0,5

0,3

-0,6

-0,9

-0,2

-3 -2 -1 0 1 2 3

0,9Price

Quality

ReliabilityWarranty

ConditionsDelivery time

Distance

Lack of services

Reputation

CommunicationCustoms

procedures


0,4

-0,4

-0,9

-3 -2 -1 0 1 2 3

0,5Price

2,4Quality

1,5Reliability

1,3Warranty

Conditions

Distance

1,6

Customsprocedures

Lack of services

Reputation

Communication

1,1Delivery time

0,8

-1,3

-2,0

-2,3

-0,7

-2,3

0,0

-0,3

-3 -2 -1 0 1 2 3

2,7

1,7

Price

Quality

Reliability

Delivery time

Customsprocedures

Distance

Lack of services

0,7

Reputation

Warranty Conditions

Communication




0

10

20

30

40

50

60

70

80

90

0%

63% 56%

86% 89%

Standardtool parts

27%

43%

11%

Tailor madetool parts

25%13%

29%39%

Services

25% 25%14% 17%

Complete tools

0

10

20

30

40

50

60

70

80

90

63%

25% 25% 29%14%

86%

43%

25%

Western Europe

27%13%

North America

56%

0%17%

Eastern Europe

89%

11%

39%


Fig. 35: Frequency of tool malfunctions by tool complexity

and their customers. As each tool is more or less a prototype, only close cooperation can lead to the desired results. When differentiating between the four major regions analysed in the study it can be seen that apart from the tool, the production machine and - especially in China/ South East Asia - the machine operator are frequently the cause for an interruption of the production process (Fig. 33).

Tool malfunctions

Interruptions of the production process

20 21

In the study a distinction was made between simple and complex tools, the latter being defined as having more than eight cavities and/ or dimensions greater than 500mm by 500mm and/ or a weight of more than 1000kg. As expected, customers using complex tools identified the tool more frequently as the most important cause for production process interruptions then parts producers using simple tools.Furthermore the results showed, that complex tools malfunction more frequently thus the need for preventive or condition oriented maintenance is higher (Fig. 35).

and the machine operator (Fig. 32). This outcome confirmed our assumption that there is a relevant need to improve the cooperation between toolmakers

As anticipated, the main cause for malfunctions in the production process turned out to be the tool itself, followed by the production machine

The tool is the major cause of malfunctions during the production process

Complex tools malfunction more frequently than simple tools

3,93,2 3,5 3,93,5 3,2

2,33,63,4 3,3 2,9

3,9

1

2

3

4

5

6

7

4,1

2,8

North America

4,03,3

Western Europe

4,13,1

Eastern Europe

4,13,6

China/ South East Asia3,93,2 3,5 3,93,5 3,2

2,33,63,4 3,3 2,9

3,9

1

2

3

4

5

6

7

4,1

2,8

North America

4,03,3

Western Europe

4,13,1

Eastern Europe

4,1 3,6


Production machineToolAutomationMachine peripheralsMachine operator

3,7

3,1

3,7

3,7

3,7

3,0

3,3

Tool

Production machine

Machine peripherals

4,1

Automation

3,4

3,4Machine operator

14%

Daily MonthlyWeekly Yearly

13%

26%

44%

13%

57%

4%

29%

Use of complex toolsUse of simple toolsUse of complex toolsUse of complex toolsUse of simple tools

Tool

Machine operator

3.18

3.23

3.99

3.45

Machine peripherals

Automation

3.48Production machine

1Never

7Very often

3,93,2 3,5 3,93,5 3,2

2,33,63,4 3,3 2,9

3,9

1

2

3

4

5

6

7

4,1

2,8

North America

4,03,3

Western Europe

4,13,1

Eastern Europe

4,1 3,6


Production machineToolAutomationMachine peripheralsMachine operator

Fig. 32: Causes of production process interruptions

Fig. 33: Causes of production process interruptions by region

Fig. 34: Causes of production process interruptions by tool complexity

Note (Fig. 32 - Fig. 34):Average value of answers given by the participants on a scale from 1 (never) to 7 (very often)


Tool breakdowns lead to the longest and thus most costly production process interruptions

Causes of tool malfunctions

22 23

Figure 36 shows possible causes of a tool malfunction. It becomes clear that while some causes are more frequent then others, every one of them needs to be addressed by the customer in order to have a functioning production process. For the toolmaker this creates the opportunity of offering value adding services resolving these issues. Analogous to the evaluation above, the complexity of a tool was taken into account yielding different results for the most common tool malfunctions (Fig. 37)

3,34

3,22

3,20

2,98

2,98

2,96

2,94

2,91

2,91

2,90

2,87

2,85

2,84

2,68

2,57

2,51

2,47

Deposits in the bleedingchannels

Deposits on the mouldsurface

Clogged injection channels

Calcium carbonate depositsin the cooling channels

Abrasion of the mouldsurface structure

Abrasion of slides

Abrasion of edges

Faulty limit switch

Abrasion of the mouldsurface structure

Fracture of bolts

Faulty ejection of parts

Corrosion of mould surface

Abrasion of ejector unit

7 - Always

Temperature deviations

Faulty heating of hotrunner channels

Fracture of ejector unit

1 - Never

Cold welding of moving parts

In order to get a clear picture of the economic consequences of tool related malfunctions, parts producers were asked to estimate the costs they incurred by different types of interruptions of the production process (Fig. 38). To achieve a high level of comparability among various types of production processes, the cost of an interruption was to be specified in percent of a given tool’s purchase price. The results show that the most costly interruption of the production process is the time needed for repairing a broken tool. It can be concluded that services aiming at the reduction of tool downtime, e.g. a faster tool repair process, have great potential for providing added value to the customer. The interpretation of process data collected by smart tools offers the possibility to improve a tools optimization process, again reducing downtime of the tool.Next to cost for repair, complex tools encounter high costs for preventive maintenance, while simple tools face high costs for spare parts (Fig. 39)

Fig. 36: Frequency of possible causes for tool malfunctions

Fig. 37: Frequency of possible causes for tool malfunctions by tool complexity

Costs of production process interruptions

Fig. 38: Cost of a typical production process interruption as percentage of the tool price

Fig. 39: Cost of services during a tool‘s lifespan by tool complexity as percentage of the tool price 6,55,54,53,52,51,50,5 6,05,04,03,02,01,00,0

6,1%6,5%

Cost of repairs duringthe tool’s life span

4,5%

7,0

Cost of preventivemaintenance

3,9%5,7%Cost of spare parts

3,7%3,7%

Optimization of the tool/production process

3,3%2,3%

Accountability/quality assurance

2,9%1,9%

Surveillance ofmaintenance efforts

2,6%3,2%

Shipment of tool toand from tool maker

1,6%1,6%

Shipment of spareparts

3,2%

Cost as percentage of the tool price


Cost as percentage of the tool price

Note: Average value of answers given by the participants on a scale from 1 (rarely) to 7 (always)

5.35 %Duration of repairingthe tool/ machine

5.07 %Optimization of the tool/production process

4.17 %Downtime caused bymissing spare parts

3.99 %Time needed forstart-up of a tool

3.23 %Response time ofservice technician

2.92 %Disruptions caused bypreventive maintenance

0 % 7 %

3,3

3,2

3,2

Clogged injections channels

Abrasion of edges


3,7

3,4

3,1

Clogged injections channels

Temperature deviations


Complex tools Simple tools

Tool repair

Reaction time

24 25

While the majority of toolmakers is obligated to assist the customer within 24 hours of a malfunction only 28 percent of toolmakers can always fulfil this requirement (Fig. 42).

Parts producers in Asia and Eastern Europe have to wait the longest for receiving assistance in case of a tool malfunction (Fig. 43).

Even though avoiding unqualified repair is deemed the most important measure to reduce tool break downs most maintenance and repair is not performed by the toolmaker (Fig. 40).

Figure 41 shows that indeed a large part of the required maintenance work is performed by the customer himself. Three quarters of the customers state that they conduct more then 50 percent of the maintenance with their own capacities.

Unqualified tool repair often is the cause of future tool break downs

Most toolmakers are not always able to fulfil guaranteed reaction time requirements in case of tool malfunctions

6,02

5,98

5,54

5,52

Provision of suitable trainingfor the customer's technicians

Performing conditionoriented tool maintenance

Avoiding unqualifiedrepair 6,33

Performing preventivetool maintenance

Constant surveilance of tooland machine parameters

1,1

3,0

1,0

2,1

5,2

2,41,7


Mean time to customer Mean time to repair

5,6

North AmericaWestern EuropeEastern Europe

Fig. 40: Measures to avoid tool break downs

Fig. 41: Percentage of maintenance conducted by customer with own capacities

Fig. 42: Required reaction time vs. fulfilment of requirement

43%

51-75%

32%

26-50%0-25%

11%14%

76-100%

75% ofcustomers

75% ofcustomers

Requiredreaction

time< 24 hours

74%

28%

Always fulfil requirement

Fig. 43: Mean time to customer vs. mean time to repair

5,0

4,1

4,4

3,9

4,6

3,5

2,5

4,0

3,5

4,9

0 1 2 3 4 5 6 7

2,32,9

24 hour servicehotline

2,52,2

Training courses andmanuals for tool assembly

and maintenance

2,32,0

Provision of completelogistics solutions

2,21,6

4,24,7

Total cost/ lifecycleassessment of the tool

Technical correspon-dence in English

Tool-related services

General services

Documentation and standards

26 27

The ranking according to importance was to be done on a scale from one to seven (in), one being the lowest value and seven the highest. Importance I = (∑ in) / Nwhere in∈{0, 1, …, 7},

n∈{0, 1, …, N}N = number of answers

The participants were to mark whether a service was offered (an) to them by their toolmaker, another supplier or not offered by third parties. To fit the one-to-seven scale, the results were multiplied by seven.Availability A = (∑ an) / N * 7where an∈{0, 1},

n∈{0, 1,…, N}

The accepted cost was to be specified in percent of a tool’s purchase price, which was classified in five classes: 0 percent, 0-2 percent, 3-5 percent, 6-10 percent and more then 10 percent of the tool price. As the economic evaluation was not an absolute one but rather compared the individual services with each other, an arbitrary value for each class was chosen in order to fit into the one to seven scale.Accepted Cost C = (∑ cn) / N * 2 where cn∈{0, 1, 4, 8, 12},

n∈{0, 1,…, N}

When choosing appropriate tool related services for the service portfolio, a toolmaker has to take into account not only if a service is needed by his customers, but also evaluate the willingness to pay for it. In order to give guidelines to this selection, we asked the participating parts producers to evaluate a selection of services that were listed in the questionnaire. The services were divided into six categories:

• General services• Documentation and

standards• Preventive maintenance• Data and diagnostics• Support for the production

process

Participants were asked to rate each service according to the importance for their production process, the current availability of the service as well as their willingness to pay for it. For the evaluation of the economic potential of each service we developed the following model. The model was based on the assumption that importance and acceptable cost of a service increase its economic potential while a high availability of the service on the market reduces its potential.

5,3

5,4

4,9

5,7

4,5

5,0

4,7

5,0

3,83,5

Provision of 3D datasetsincluding troubleshooting instructions

3,32,7

Compliance with official standards (ISO, DIN, VDA, QS, etc.)

2,72,2

Progress reports and picturedocumentation of the toolmanufacturing process

2,32,1

Documentation and long term storageof all tool data

4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7

Real-time monitoring of production process

Digital tool log book: production process

data

2,93,8

Digital tool log book: handling and

maintenance data

2,4

Online and remote tool condition

monitoring

2,33,1

Accepted costPotential

2,8

Remote diagnostics and maintenance

ImportanceAvailability

4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7



data

2,93,8


maintenance data

2,4


monitoring

2,33,1


2,8



4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7



data

2,93,8


maintenance data

2,4


monitoring

2,33,1


2,8



4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7



data

2,93,8


maintenance data

2,4


monitoring

2,33,1


2,8



Fig. 44: Evaluation of general services Fig. 45: Evaluation of services regarding documentation and compliance with standards

4,2

4,4

4,4

3,5

3,7

2,1

2,6

2,5

2,1

2,5

3,14,7

Real-timemonitoring of the

production process

2,93,8

Digital tool logbook: production

process data

2,63,5

Digital tool logbook: handling andmaintenance data

2,43,1

Online and remotetool condition

monitoring

2,32,8

Remotediagnostics and

maintenance

5,4

4,6

5,2

4,4

3,7

3,7

3,9

4,9

3,1

4,0

5,86,5

Guaranteed productiveavailability of the tool

4,33,9

Preventive maintenanceof the tool in regular

time intervals

4,63,8

Ensured sparepart availability

3,33,6

Preventive maintenancebased on monitoredcondition of the tool

3,02,2

Service for tools ofother toolmakers

Preventive maintenance

Data and diagnostics/ Support of the production process

28 29

The relative economic potential of each service compared to each other was derived by multiplying the Importance by Accepted Cost and dividing by the Availability. The result was scaled by 7 / 9.Potential P = (I * C / A) * 7 / 9where I = Importance

C = Accepted CostA = Availability

In a nutshell, the highest potential was received for the services “guaranteed productive availability of the tool”, “optimization of the production process based on real time data”, as well as “preventive maintenance of the tool in regular time intervals”. Clearly some services which are generally deemed very important by both customers and toolmakers did not score very high in the indicator for economic potential. This is due to the fact that the customers either expect the toolmaker to deliver these services at a very small fee, if any, or because they are readily available on the marked.

The economic potential of a service is determined by its availability on the market and the value generated for the customer

4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7



data

2,93,8


maintenance data

2,4


monitoring

2,33,1


2,8



4,4

3,6

5,0

4,6

4,6

2,4

2,0

4,8

4,0

5,5

3,85,4

Optimization of theproduction processbased on real-time process data

3,34,6

Offering of operatingmodels for tool in production (pay-per-x models)

3,83,1

Evaluation and specification of appropriate produc-tion equipment

3,22,9

Start-up service andin-house optimizationof the tool in production

3,12,0

Supply of accessoriesfor the tool (machine connectors, grease etc.)

4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7



data

2,93,8


maintenance data

2,4


monitoring

2,33,1


2,8



4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7



data

2,93,8


maintenance data

2,4


monitoring

2,33,1


2,8



4,2 4,4 4,43,5 3,7

2,1 2,6 2,5 2,1 2,5

0

1

2

3

4

5

6

7

3,52,6

3,1

4,7



data

2,93,8


maintenance data

2,4


monitoring

2,33,1


2,8



Fig. 46: Evaluation of preventive maintenance services Fig. 47: Evaluation of data and diagnostics services Fig. 48: Evaluation of production process support services

Revenue through service provision

Opportunities for generating additional income

30 31

The evaluation of the toolmaker survey showed, that pricing policies regarding services offered are not optimal. Figure 52 shows the pricing policies of toolmakers for high

relatively high additional cost for a given service, toolmakers are hesitant to charge extra.

potential services as well as the customers’ willingness to pay for these services (scale from 1 to 7 with 7 being the highest). The results indicate, that even when customers would accept a

In order to be able to offer some of the higher potential services such as guaranteeing productive availability, it will become crucial for the toolmaker to know how his tools are performing at any given moment and no matter where on the planet the tool is being used. So-called smart tools, capable of providing the toolmaker with data from the production process will become the technological enabler for achieving this. The study results

is the challenge of finding an appropriate service partner. The majority of toolmakers perceives cooperation as a key to offering better services (Fig. 51).

show that in general, most parts producers do not object sharing process data with their toolmaker as long as it improves the performance of the tool (Fig. 49).

While recognizing that customers need and demand services, toolmakers still focus mainly on their products for generating revenues (Fig. 50). One reason for the lack of service provision

While recognizing that customers demand service, tool-makers still focus mainly on their products for generating revenues

Toolmakers largely do not take advantage of the custo-mers‘ willingness-to-pay for certain services

65%Would you offermore services if

you had a partner?35%Yes No

27 27 27 2331 30

30

19 19

62

34334346

39

14

Optimization of the

production process

based on real-time

process data

19

Guaranteed productive

availability of the tool

Offering of operating

models for tool in

production (pay-per-x)

Digital toollog book:

handling and maintenance

data

40

1912

Digital toollog book:

production process data

Total cost/ lifecycle

assessment of the tool

Real-time monitoring of

production process

Provision of 3D datasets

includingtrouble

shootinginstructions

Percentage of toolmakers that offer service with extra service chargePercentage of toolmakers that offer service included in tool priceCost accepted by customer (scale 1 – 7)

Toolmaker perception:

Part of customers interested in service

Revenue generatedthrough service

15%

48%

19% 19%

40%49%

NorthAmerica

60%51%

EasternEurope


81%

Western Europe

100%

81%

Fig. 49: Customers‘ willingness to give access to production process data

Fig. 50: Revenue generated through services vs. demand for services

Fig. 51: Service partners

Fig. 52: Service charges vs. customers‘ willingness to pay

Data access deniedData access granted

Conclusion and outlook

The future of toolmaking

32 33

Today’s toolmakers face the challenge to maintain their competitive position in a changing globalized market. Focusing on cost cutting or differentiation through high quality tools is no longer sufficient to meet this challenge. Especially toolmakers in established markets of Northern America as well as Western Europe will start to experience stronger competition from their Chinese/ South East Asian and Eastern European counterparts. The results show that while key markets for parts production might still be in Western Europe and Northern America, tool procurement has become a global business. As distance becomes less and less important the decision is not from where to buy a tool, but from whom. Currently this decision is still based on the tool‘s quality, reliability and price, often giving an edge to highly experienced toolmakers in the established markets. The transfer of knowledge and expericence, however, will not cease until the playing fields in the major markets are leveled. In the near future, technological capacities, knowledge and productivity in developing markets, especially in China and South/ East Asia, will match or even surpass those in

the western world. By then, the only means for differentiation left will be the maximization of customer value.A possible key to success will be offering the tool in combination with value adding services. These so-called industrial p r o d u c t - s e r v i c e - s y s t e m s bind the toolmaker closely to his customers and generate additional income along the lifecycle of the tool. In order to be able to provide value adding services together with the tool, toolmakers have to adapt new business models, which focus on four major topics• service provision• cooperation with partners• customer integration • strategies for identifying

relevant customer needsCurrently each of these four topics is being addressed insufficiently by toolmakers on the whole. Especially smaller toolmakers that do not have the capacities to offer adequate services on a global level will have to adjust their business models accordingly. Only through close cooperation with other toolmakers as well as their customers will they be able to strengthen their position in the vast competition of the globalized markets.

Most toolmakers currently focus on day to day business instead of planning ahead. As Figure 53 shows, only few

Figure 54 compares high potential services with the percentage of toolmakers that is

However, improving their skills to find innovative solutions to customer needs will be the key to success in the future.

toolmakers think about offering the top three services in the future.

toolmakers actively pursue solutions to the questions they will face regarding services in tomorrow‘s tool industry.

planning to offer the service in the future. It sticks out that less then a quarter of the participating

Only a small part of toolmakers is planning to offer high potential services in the future

Percentage of toolmakers that will offer the service in the future

Potential of the service

Digital tool log book: handling andmaintenance data

35%

22%5,4

4,7

3,5

25%

17%Offering of operating models for tool

in production (pay-per-x models)

38%

51%

Ensured spare-part availability

3,6

Optimization of the production processbased on real-time process data

24%

3,8

3,5

3,8

4,7

Preventive maintenance based onmonitored condition of the tool

Real-time monitoring of theproduction process

4,6

6,5Guaranteed productive

availability of the tool

34%

Provision of 3D datasets includingtrouble shooting instructions

Digital tool log book: productionprocess data

Total cost/ lifecycle assessmentof the tool

23%

25%

Developments in service provision

Fig. 53: Development of service strategies

Fig. 54: Potential of service vs. plans to offer service in the future

7%Can you think of

services customers willask for in 10 years?

No93%

Acknowledgments

FP7 - Project TIPSS

34

Contact

35

successful industry projects have shown that exchanging ideas between industry and academia generally leads to a win-win situation for all parties envolved.

company, please do not hesitate to contact us. Combining our research activities with industry projects has always been a reasonable way for us to ensure the practical relevance of our research. Many years of

Contact us to learn more about our industry related research projects.

Dipl.-Ing. Fabian Gaus Team leader

Laboratory for Machine Tools and Production Engineering of RWTH Aachen University

Steinbachstr. 19 52074 Aachen Germany

Phone: +49 241 80 28199 Fax: +49 241 80 628199

[email protected] Dipl.-Wi.-Ing. Bastian Schittny



Phone: +49 241 80 28199 Fax: +49 241 80 628199

[email protected]

production cell. In order to best monitor the production process, algorithms and methods for the interpretation of the gathereddata are developed within TIPSS, which allow the simulation of different scenarios forecasting the tool‘s further behavior in operation. This simulation makes the TIPSS solution for injection moulds speak of „smart tools“ and not just of „intelligent tools“. That is to say that, based on those forecasts, errors or downtimes can be interpreted in real-time by the toolmaker, thus minimizing the time to respond and the repair time, according to the service level that has been agreed upon with the customer. See also www.tipss-fp7.eu

The study was performed as part of the European Commission co-funded project TIPSS (Tools for Innovative Product-Service-Systems for Global Tool and Die Networks) within the Seventh Framework Programme (FP7).

Information on TIPSS:All activities along the value-adding chain can be supported by an internet-based platform to coordinate all forms of forwards and backwards collaboration. At the same time, the platform accesses the data collected by the smart tools at the customers‘ production facilities. Smart tools are injection moulds equipped with stateof-the-art sensor technology that deliver realtime data from the production process. The online analysis of the gathered data enables an optimized mix of both condition-based and preventive maintenance services, which directly leads to an increase of the overall operational availability of the

We hope that the results of the study will be useful for a broad audiance. Should you have any questions regarding the study or wish to receive advise on how to use the study results to improve the competitive position of your

ISBN 10 3-926690-19-4 ISBN 13 978-3-926690-19-7


Chair of Production Engineering


Phone: +49 241 80 28199 Fax: +49 241 80 628199

[email protected] www.wzl.rwth-aachen.de

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