Some 80 per cent of machining companies in the Netherlands find that it has become more difficult to attract suitable employees. Some 60 per cent expect this to become even more difficult in 2017. Despite this, the sector continues to invest little in training current employees. These are some of the conclusions from the 2017 Machining Benchmark. It further shows that the frontrunners once again grew twice as fast. And they managed to maintain their profit margin, where it decreased for the sector as a whole.
During a discussion with an expert panel at machining company Jatec / Wilting in Leerdam, the second Benchmark Machining was presented. Once again, Koninklijke Metaalunie, the online trade magazine Made-in-Europe and Jaarbeurs / ESEF put the machining industry in the Netherlands to the test. An extensive questionnaire was sent out online at the beginning of this year. On average, companies in this sector have 10 to 25 CNC machines under 10 years old. With 54 per cent, mechanical engineering is the largest sales market, followed by agro-food industry (25 per cent); automotive (23 per cent) and high-tech and semiconductor (20 per cent). Turnover grew by 9.1 per cent on average.
Margin frontrunners significantly higher
For the first time, the Benchmark Verspanen 2017 looked at the profitability of companies. The leaders (above-average sales and profit growth in 2015 and 2016) have a much higher margin (profit before tax) than the industry average: 11.4% versus 6.0%. Notable is the low number of spindle hours in the sector: 55% of companies say they make a maximum of 40 spindle hours per machine per week. As many as 79% say it became more difficult to find good skilled workers last year. And 60% expect it to be even harder this year. That could affect salaries: 63% expect tightness to drive up salaries. The biggest challenges are lead time reduction, product complexity and higher accuracy.
More focus on process control
These challenges surprised Dirk Dona of Bakker FM, one of the panellists. "Lead time reduction is the result of other things. From attention to training, complexity and investing in more accurate machinery. Then lead time reduction comes naturally." Ton van de Broek of Kusters Goumans wonders why so many companies are investing in robotisation when their spindles run less than 40 hours a week. He thinks companies should have their processes completely in order first, only then should they automate. He says the reason the frontrunners do so much better is that they have focus. "Smaller suppliers want everything, don't say no to anything. However, you have to select the right industries, invest on that to keep improving." Rob van der Werff, adviser at Koninklijke Metaalunie: "Companies do not make enough use of the possibility of using company time extensions (e.g. shifted hours) to run the machines for more hours in a day and thus get more return from the machines."
More focus on training employees
Panellists strongly agree that companies are under-investing in training. 6% do not do so at all; one in three less than four hours per employee. On average, half of the companies spend less than one day on training per employee per year. According to Michiel Jansen of the Metal Training Fund (OOM), companies should invest much more in offering their employees prospects. "It is striking that 80% say it is difficult to find new professionals. If we have to work longer with current employees, we need to make sure they remain skilled." He questions whether the industry is getting the most out of its employees. "There should be real human resources policies aimed at employee development," he says. That could ease the tightness in the labour market. Jan Kusters of Kusters Precision Parts calls the focus on training "extremely low". "I understand that it is difficult. Training comes directly at the expense of productivity. But not training is putting one's head in the sand." Ton van den Broek thinks older employees should be freed up much more to transfer knowledge to the younger generation. "CAM programming is something young people know, but the right strategy is precisely what they learn from older employees. Older employees guiding new employees is invaluable."
Investing in unmanned work
The 2017 Machining Benchmark also asks about the industry's investment plans. 31% want to invest more in 2017. Leaders and the market as a whole differ slightly in this regard, with 39% of the leaders saying they will invest more. Frontrunners say they will invest more in unmanned work even though they already do significantly more unmanned spindle hours than the industry average.
The number of companies that have a 3D printer has doubled in a year to 20%. 2% of benchmark participants have a 3D metal printer, compared to 0% a year ago.
The complete Benchmark Verspanen 2017 is included in the Yearbook Verspanen, which will be distributed next week in a circulation of 5,200 copies.
> You can download the benchmark here
For content:
Rob van der Werff
Advisor Team Entrepreneurship, Economy and Taxation
Koninklijke Metaalunie
T 030 - 605 33 44
