The best news coming from the joint ASSIOT ASSOFLUID Economic Day held on 28th March was the excellent performance of the motion and power transmission systems sector. The figures exceeded the already positive expectations for the year. Double digit growth for 2017 and equally good vibes for the coming 12 months. The event also saw an interesting round table discussion of supply chain in the Industry 4.0 context.
by Silvia Crespi
The joint ASSIOT and ASSOFLUID Economic Day event was held on March 28th, with ASSIOT President, Tomaso Carraro, opening the day and introducing the various speakers presenting sectorial data. Much of interest was on the table with a cautionary word from the president concerning the correct interpretation of some, nonetheless, very encouraging statistics. Carraro began referencing Industry 4.0. “This is a long term, on-going process, no company can now simply be expert in gearing, for example, it is necessary to be on the ball across the spectrum of operations. Here in the association, debate has begun concerning how companies will need to adapt to these changes, a question that is pertinent to associations too! How, by uniting resources and strength, we can keep pace with technological change”. Fabio Gallo, President of the ASSIOT economic commission, agrees that the answer lies in the unified force of differing sectors, so, ASSIOT/ASSOFLUID working together is a perfect example of this. The turnover of the members of these two groups is now exceeding €40 billion, working together is the best way to support further growth.
Double digit growth for the power transmission macro-sector
Based on joint surveys carried out by ASSIOT and ASSOFLUID, Italian motion and power transmission systems sector performance has outstripped even the most optimistic of predictions, reaching record levels for the second consecutive year. Fluid power and transmission power achieved respective growth of 12.7% and 11.3% on 2016. Both the domestic market and the export market have made positive contributions (+14.8% against +9.1% for Fluid Power and +11.8% against +10.6% for mechanical transmission).
The same dynamic has been seen in the entire macro sector for the last 12 months, with growth of 11.7% and total turnover reaching the record figure of over €10.75 billion. For the first semester of 2018, outlook is still positive both in the domestic market (growth of around 5% for both sectors is expected), and for exports (growth between 6.5% and 7.5%) with macro sector growth around 6% which would mean overall market turnover of over €11.4 billion. Fabrizio Cattaneo, ASSIOT secretary, is well satisfied with results, being over forecast, and concentrated on figures concerning exports and deliveries. He was equally convinced for the projections concerning 2018, despite growth being reined in by investment uncertainty. Marco Ferrara, ASSOFLUID director, went back to the data of last Autumn and referenced further business acceleration, particularly in terms of orders “This is a trend no-one was expecting, but a very satisfying one! Over the first semester, we foresee double digit growth both in pneumatics as well as hydraulics”.
It is worth noting that clients in all the main sectors have registered more than positive results, with the occasional exception for mechanical transmission. Export markets for power transmission are led by Germany at over 13% followed by France, USA and China. Fluid Power exports in 2017 have seen mostly positive figures, especially in Turkey, China and USA. For the macro-sector as a whole, record turnover is expected for 2018.
With the help of Stefania Pigozzi and Emanuela Carcea from the UCIMU study centre, the performance of the two sectors has been compared with that of capital goods. Growth has been helped by the Industry 4.0 national plan and in terms of turnover, figures from Fedemacchine, ASSIOT and ASSOFLUID are similar in indicating a return to pre-recession values, with the occasional negative variation. Emphasis was placed on the ability to export both in ASSIOT and ASSOFLUID. In terms of imports, the two associations represent 40% of the Federmacchine total. In consumption, ASSIOT performed better (+19% compared to 7% in Federmacchine). The groups together make up 35% of Federmacchine consumption.
New business models and the process of value creation
Data presentation and analysis was followed up by an interesting round table debate entitled “From the semi worked to the finished product: Italian industry added value for the 4.0 company”. Figures from industry, associations and credit were present at the debate including: Fabio Gallo, strategic marketing director at Carraro Group; Alessandro Maggioni, technical director at ANIMA; Alfredo Mariotti, Federmacchine secretary general; Jacopo Ruggero, Business Project Manager Accenture – Biesse; Pietro Zardoni commercial director at UniCredit Factoring. The event was overseen by Luigi Serio, economics and company management professor at the Cattolica Sacro Cuore university in Milan, the conversation provided key insight into Industry 4.0 and looked at topics like supply chain, integration, value creation and new products in detail. “When we speak about the fourth industrial revolution, said professor Serio – we’re talking about inter-connected industry, a revolution where working in line with suppliers is essential. Here in Italy, this is world still being built. Serio identified four ways to create value: data management, intellectual property, the platform and pay as you consume. Four aspects that bring to mind supply chain integration and a new system of the value creation process. Thanks to Italy’s industrial districts set up, this country is in an ideal position to adopt new business models.
Data integration, people and companies: the keys to Industry 4.0.
According to Alfredo Mariotti, Industry 4.0 has accelerated the rate of change. Mariotti focused on machinery innovation: “What is interesting is that process and product innovation no longer comes from the machine, but from collaboration across all the partners working toward the final goal. Machinery is to be seen as the control centre of a greater organism that is able to produce the product that will satisfy the needs of the end user. It is the end user that will dictate what the rules are. In this sense, Industry 4.0 has contributed to change: all partners in the supply chain are involved.
Alessandro Maggioni spoke about ANIMA associates, for whom, machinery represents its meat and drink. “Our association represents a variety of differing sectors so the question is a little more complicated. Industry 4.0 means, above all, impact on company process. A cultural revolution and not just a matter of bringing technology into production process. The association’s role is to accompany members in this process change.”
Jacopo Ruggero from Accenture illustrated collaboration between the Biesse company and the support offered by Internet of Things to inter-connect Biesse machinery being shipped to clients, machinery that is IoT ready, Accenture cloud connected, but personalized to the client’s needs. Accenture promotes the question of machinery eco-systems: integrated services involving suppliers.
Fabio Gallo confirmed that the Italian context is exceedingly favourable in terms of supply chain. Where technology integration is already a reality, supply chain inter-connection to offer the client added value has not yet fully arrived. There is much work still to be done in this direction, above all in terms of soft skills, work which must be carried out to make up the gap with international competition. Finally, Pietro Zardoni illustrated the financial solutions offered by the UniCredit group in supporting the production chain, something, which, due to its economic-financial structure does not allow access to direct credit. Zardoni underlined the strategic role the leading companies can have in obtaining reimbursement on investment.
The last word coming from the round table is that any non-adoption of new business models not only means losing out on a great opportunity but, above all, losing competitive edge.