Tooling in Germany Can German tool makers defend their top position?

A guest post by Wolfgang Boos, Gerret Lukas, Bernd Haase, Leonhard Klisch* Reading Time: 4 min

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The confluence of various crises continues to present the tool and die industry with new and challenging situations. The new edition of the study “Tooling in Germany“ sheds detailed light on the current situation of the German tool and die industry based on key figures.

KPIs for the German tool and die industry.
KPIs for the German tool and die industry.
(Source: WZL)

In a joint study, the WBA Tooling Academy, the Machine Tool Laboratory WZL of RWTH Aachen University and the Fraunhofer Institute for Production Technology IPT analysed the German tool and die industry. Their figures show that the return on sales of external tool shops has decreased significantly in recent years. In addition, the business situation of German tool shops is increasingly deteriorating. While in 2016, 41 percent of the companies still assessed the business situation as very good, in 2021 it dropped to just over 24 percent.

Despite all adversities, according to VDMA (Machinery and Equipment Manufacturers Association) estimates, a production increase for precision tools of 7.6 percent to 9.9 billion euros could be achieved in 2022. Furthermore, according to the VDMA, an increase in tool demand is expected in 2023, which should slowly bring production value closer to pre-Corona levels. The BMWK also reported initial signs that the economic slowdown in the winter half-year will be milder than previously expected.

The indicators seem to be slowly improving again. But what exactly is the situation in the German tool and die industry? Will it be able to recover sustainably from the turbulent years? The strong heterogeneity and fragmentation of the German tool and die industry in terms of company size, market access and product range make a general answer to these questions difficult. That is why the researchers used the world's largest database of the tool and die industry to evaluate the performance of the German tool and die industry.

Product, process and resource

With the three dimensions product, process and resource, the organisational and technological performance of the German tool and die industry was evaluated qualitatively and quantitatively. In the product dimension, the complexity of the tool spectrum offered, and the share of tool-related services were evaluated. In an international comparison, the German tool and die industry occupies a top position in terms of both quality and complexity of tools. The new edition of the “Tooling in Germany” study analyses whether German toolmaking can defend this top position or whether the focus is increasingly turning to other success factors. Consequently, innovative data-based business models and the future scenario of total solution providers are highlighted. In addition, current trend topics in toolmaking such as the digital tool file and the measurability of sustainability are presented.

The process dimension describes all revenue-relevant aspects of service production in terms of efficiency. The design and organisation of internal processes for the development and production of tools is a decisive factor for the competitiveness of tool shops. Process transparency represents an essential characteristic of success. Accordingly, the trend of an IIoT platform to increase process transparency is addressed. The long history of toolmaking in Germany nowadays entails a high concentration of know-how in tool development and production. The existing comprehensive employee knowledge must be secured in view of demographic changes. Accordingly, the study also addresses the trend topic of process-oriented knowledge management. When looking at the distribution of employees along the process chain, a shift to the upstream areas of design and work preparation and programming has been noticeable in recent years. The study to be published analyzes how this trend has developed.

The resource dimension includes the analysis and evaluation of the existing manufacturing resources as well as general characteristics of the employees in German tool shops. Due to the experiential knowledge already mentioned above, employees represent the most valuable resource. The average age of employees has increasingly risen in recent years, will this trend continue or even intensify? In addition to the technological innovations in the classic manufacturing technologies, the developments in the field of additive manufacturing are also examined more closely, as it is increasingly used in German tool shops. This can be explained by the increasingly powerful system and peripheral technology as well as the growing markets of machine manufacturers and system providers.

Outlook on the study

In summary, the study analyses the performance of the German tool and die industry based on key figures and identifies current challenges and emerging trends topics. Such trending topics currently include, for example, both sustainability and digital connectivity along the entire tool life cycle. The study analyses these trends and derives requirements for the tool and die industry. This approach makes it possible to identify concrete findings for solution approaches with which tool shops in Germany, a high-wage country, can continue to position themselves successfully in competition in the future. A look beyond the German tool and die industry to the largest international tooling markets is provided by the "World of Tooling 2022" study published last year.

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