Moulding Expo 2021: Virtual Innovation Day Expert talk: How can the European tool and mould making industry remain competitive?

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With the Virtual Innovation Day on 10 June 2021, Moulding Expo has launched a first targeted measure for the next physical trade fair for tool, pattern and mould making in 2023. At the beginning of the four-hour online event, industry leaders discussed the status quo, challenges and the future of European tool, pattern and mould making. ETMM has summarized the most important aspects of the discussion for you.

On the occasion of the Virtual Innovation Day held by Moulding Expo, a high-profile panel with internationally operating participants took a look at the changes in the European mould making industry from a wide range of perspectives. Current challenges were addressed and an outlook on key topics was given: Where are the markets of the future? What will customer requirements look like in the future? Where are the business models of the future heading and what opportunities do digitalisation and sustainability offer in tool, pattern and mould making?

The moderators Ralf Dürrwächter, Managing Director of the VDWF (Association of German Tool and Moldmakers) and Markus Heseding, CEO Precision Tools Association at the VDMA, led through the event with the guests

• Beatrice Just, Millutensil,

• Prof. Dr.-Ing. Wolfgang Boos, WBA Aachener Werkzeugbau Akademie,

• Daniel Hummel, Robert Bosch,

• Jens Lüdtke, Marktspiegel Werkzeugbau / Tebis Consulting,

• Dr. Louis Schneider, Schneider Form and

• Bernd Ströhlein, Fischer Werkzeug- und Formenbau.

Ralf Dürrwachter started by focusing on the three most important challenges facing the European tool and mould industry: markets, customer requirements and business models.

Jens Lüdtke pointed out right at the beginning that the generic term “market” is mainly understood by the participants as a strong price war. He said that price wars had increased particularly strongly in the past two years. The companies have reacted to this by increasing efficiency through process optimisation, reducing throughput times and integrating new technologies. “But this also means that some companies have completely embraced the price war,” says Lüdtke. The question now is: “Can we win this price war in the long run?” If you can't answer that unequivocally with a “yes”, you have to ask yourself what other possibilities there are, he said. Are there alternative business models? Are there opportunities for cooperation? Are there possibilities in terms of sales structure and customer loyalty? For him, it is clear that efficiency should not be neglected, but in sum, a point had been reached where better processes and efficiency improvements alone would no longer suffice. “I think this is one of the biggest challenges of our industry,” Lüdtke emphasised.

Wolfgang Boos confirms that the extensive efficiency improvements of the last few years have had great effects. But this certainly does not mean that the issue of price sensitivity was off the table. So is the problem homemade? Boos sees at least part of the blame on the part of the toolmakers. After all, there were still companies that would accept irrational prices — sometimes below the manufacturing costs.

Bernd Ströhlein confirms that the industry is currently struggling on many fronts. Besides the Corona crisis, this includes the aforementioned competitive pressure. But this situation has existed for many years. Many toolmakers have made the transition to industrial production, but the cost pressure remained unchanged for them. “For us, however, the pandemic is the biggest issue, because the platforms for networking, such as trade fairs, expert lectures, customer visits, have disappeared,” says Ströhlein. The relationship between customers and suppliers, which is particularly important in toolmaking, has suffered. He also misses the personal contacts in the acquisition of new customers.

How does the situation in European toolmaking compare globally?

Daniel Hummel sees more light than shadow when he looks at the current situation. The price war continued to be strong, of course. The Corona crisis had forced the industry to rethink, he stated. “In 2019, I believe the situation looked gloomier when the crisis was more pronounced,” Hummel said. This is because consumption is still high and new tools would always be needed for new products — from packaging and automobiles to the consumer market, he added.

According to Beatrice Just, the European tool and die industry continues to stand for innovation and quality. That is the good news. But even in a global comparison, she says, quality has risen very sharply. The reason for this, however, is not very reassuring for the industry. For example, she says, European companies have exported their know-how by setting up subsidiaries in the Far East.

The managing director of the Italian family-owned company criticises that competition between Europeans has increased. After the Covid crisis, she said, competition with Asia was not as pronounced as competition between Europeans. On the one hand, this is due to the fact that companies are increasingly turning to suppliers that are geographically closer and thus the competitive pressure between companies from Germany, Portugal and Italy has become stronger. Instead, she would like to see more willingness to cooperate.

How can European toolmaking remain competitive?

According to Hummel, closer cooperation between toolmakers, suppliers and customers is needed to ensure the industry's competitiveness in the future. In this way, an understanding of the tool and the costs could be developed in the early stages: “As a toolmaker, you have to be able to explain the price transparently. If we managed to communicate how important the tool is, which is always hidden from view, then we can be successful.” But the industry had to be able to argue why a sustainable approach was crucial, he said. “We need to cooperate and get out of our silos. That's what associations and trade fairs are for. Joint ventures can also strengthen cooperation,” says Hummel.

For Schneider, a future-proof strategy first of all needs the step of occupying the right niches in the markets that have the to potential grow in the long term and cannot be conquered so quickly by other market participants. For him, these niches include not only the products themselves — i.e. the tools — but also product-related services. This structures have to be built up gradually and cannot be achieved overnight. According to Schneider, this will take two to four years until it generates significant turnover. “In addition, we have to listen to the customers and make a competitive service offer. After all, they too have fewer and fewer skilled workers who can coordinate these partial services. We have to take more responsibility here,” he added. Another point is that the business landscape is changing. With start-ups in electromobility and the largely standardised vehicle chassis, we will see a reduction in development time. This shortening of development times would again direct a different focus on lead times. With the start-ups, there are also new customers that need to be convinced. Here, the social media approach would play an important role — at least a more important one than, for example, additional sales office, he stated.

A drop of bitterness came at the end of the event from Wolfgang Boos: “Looking at our database, we have come to the conclusion that between 20 and 30 percent of European toolmakers will not survive this difficult financial period”. He said that the toolmaking and automotive crisis had triggered a strong consolidation. He also emphasised that more willingness to cooperate and the expansion of networks are needed to counteract this.

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