The metalworking industry has been undergoing major changes in recent years. This traditionally traditional market is facing necessity automation battles, a shortage of skilled employees and the emergence of large concerns that are very competitive in terms of price.
Wim Dijkgraaf, CEO and founder of the Quotation Factory, gives his vision of the metalworking market and comes up with practical solutions on how (especially smaller) metalworkers can respond to these changes.
Metalworkers cannot do without the expertise of technology companies in today’s world. But the cultural difference between these two worlds often proves to be considerable during collaboration, with negative consequences. This raises the question: who then should take the lead regarding digital change projects? A Chief Technology Officer (CTO) who speaks both languages can bridge the gap. How? You can read about that in this blog.
Technology is the backbone of metalworkers by 2022. So like it or not, ICT issues are here to stay nowadays. It’s best to address them as best you can. But then optimal collaboration with technology companies is essential. It is therefore high time to bring the two worlds closer together.
Why do ICT companies work differently than metalworkers?
The cultural difference between companies in the metal industry and suppliers of ICT & technology can be explained. Traditionally, metalworkers have had the attitude: you demand, we run. And they expect that same attitude from their ICT suppliers. However, it is highly questionable whether this is justified. These technology companies, in fact, apply different business models in which there is no longer room for the age-old “who pays the piper calls the tune”.
A tip for metalworkers is to try to understand what their business model is when you start working with ICT vendors. This is because then you know what to expect and what not to expect. And that avoids a mismatch and therefore probably a lot of wasted energy. This will benefit both parties. Within the ICT world, you can broadly distinguish between 3 types of business models:
Licensing and hourly factory
An example. Suppose you are a metalworker working with an ERP vendor. He earns his living partly from licensing and partly from consultancy. Thus, this company’s hourly factory is crucial to its revenue. However, capacity is limited, so consultants must be tightly scheduled.
For you as a metalworker, that means you’ll find yourself in a queue. And then the ERP vendor would prefer that you bundle all your questions together, so that that company can schedule the consultant to complete the full list of questions.
Software as is: subscriptions and licensing
Then there is another type of supplier. It has to rely on subscriptions and/or licensing. In short, this party delivers software as is and only wants to modify software if it benefits the majority of users. So even if it seems like a very easy question for you as a metalworker to solve, if it doesn’t fit into the concept of the “standard product” the vendor won’t do anything with it or will delay doing so.
The third and final category are the custom builders; the ICT vendors who create new software, fully suited to the customer’s needs. It’s all about you, the customer, being very clear in what you want, in your requirements.
Vendors who develop customized solutions benefit from longer-term projects, i.e. more complex issues, because it gives them continuity in their business model. So with such a party it makes little sense to agree on a maintenance contract. Doing small changes is a big hassle for this type of software company and therefore not profitable at all.
Taking the lead in ICT change projects within the metalworking industry
It is at least as important for metalworkers to be in charge of their own ICT change projects. This is for a number of reasons. First, ask yourself what happens when you are not in control. You just take the supplier’s word for it and hope it all works out. However, there are only a very few situations in which you can do this. For example, if it is only about one very specific ICT solution. For example, with a new drawing software package, where no other parties are involved. Then it’s a matter of installing and learning to work with it. It otherwise touches few other systems.
But the moment you need to change something in your ICT landscape that involves several suppliers, you can no longer rely on them to work together constructively. Let’s face it, they are and will remain mostly competitors of each other. Soon those ICT companies will be on the move with each other and won’t be able to work it out among themselves. That risk exists. Behold the reason why in a change process it is better to take charge yourself. You can do that in a number of ways:
Hire an external project manager to oversee IT projects
How so? That’s a legitimate question. Because remarkably many metalworkers do not hold such a directing role at all. One solution might be to hire an outside project manager for that assignment. The advantage is that someone is in charge and the success rate of the project increases.
The disadvantage is that much of the knowledge gained during the change process goes with the external project manager. How it works, what software is linked together, you name it. Once the project is completed you have lost that knowledge. You don’t want that, because projects are never quite finished. They always require maintenance and updating and then all sorts of things always come to light. So it’s definitely not like you don’t need the knowledge anymore once a project is “done”.
Utilize a (CFO) Chief Finance Officer
Some metalworkers choose a different approach. They are hiring a Chief Finance Officer (CFO). This financial specialist then also gets the ICT projects on his plate as a supervisor. But this CFO is generally someone with a background in accounting.
ICT is a very different arena. As a result, the CFO takes the lead primarily as an accountant. Not desirable, because talking to an accountant about technical decisions to be made quickly becomes a very difficult conversation. He simply does not understand the subject matter sufficiently.
Hire a (CTO) Chief Technology Officer
Who then should take the lead? You don’t need to look far. As it happens, the position that solves this problem already exists: Chief Technology Officer (CTO). This role is already a success in several industries, but not yet in the metals industry. And that’s striking, because most of this business hinges on technology.
What exactly does a CTO do?
Many metalworking companies don’t know exactly what a CTO does. To properly map that, we divide his world into quadrants. On one axis are ‘change operation’ and ‘continuous operation’, on the other ‘strategic’ and ‘operational’. That’s what all falls under the responsibility of the CTO.
What exactly do these different components entail? To begin with the first axis, continuous operation encompasses everything that ensures that the enterprise operates digitally without problems and keeps running. Think about security, fixing bugs and making sure there is enough processing capacity. So no major changes, but keeping the entire digital infrastructure up and running continuously. And also: continuously working to improve. Japanese know this phenomenon as “kaizen”: change for the better. What you call a progressive assignment for the CTO.
The change operation involves much larger change issues, where as a CTO you have to think carefully about how you are going to implement the innovation in the existing organization. A different ERP system, for example. These are issues that you must first solve on a project-by-project basis, and then address how to make the change a permanent component of the continuous operation.
Arriving at the quadrants strategic and operational. A CTO must know what is going on in the market, where the company wants to go, and he must translate the changing environment and business objectives into how technology can contribute to it. Then a technology roadmap is created: a timeline that indicates when you will build or purchase which systems and machines and which business objectives you should achieve with them. From there, a project calendar emerges.
Selecting the right ICT vendors and partners is also part of the CTO’s activities. These are typical make-or-buy decisions. The issue up front is then: are we going to develop the solution ourselves or are we going to buy it in the market and outsource it?
In a nutshell, this is the CTO’s job description. And in doing so, he can bridge the gap between the world of metalworkers and that of technology companies, which is so greatly appreciated. Time to consider and look at your own organization. Do you experience a lot of hassle with ICT vendors? And do you lack people in your organization with an affinity and passion for technology? Then you’ve reached the point where you might do well to add a CTO position to your company.
The CTO, digitalization, smart factory and industry 4.0
Digitalization, smart factory, industry 4.0: these are big themes in the metal industry, but they are only slowly getting off the ground at most companies. Not to mention the lack of efficiency. It is quite possible that the lack of the CTO position is one of the biggest reasons for this. The implication? These metalworkers don’t yet make a dent in ICT butter. The affinity with technology is far from the norm.
Fortunately, there is the CTO. Who is strong in specifying the vision and defining the strategy. Who is able to direct and delegate in ICT change projects, contract the right partners and vendors and set priorities. The CTO does not allow itself to be led by the delusion of the day. Above all, he brings two worlds together resulting in good cooperation. Irreconcilable cultural difference? Make way for the CTO as a director and he will prove otherwise.
All too often, the quotation process within the metals industry consumes valuable time from entrepreneurs. They therefore work more ín than ón their metalworking company. And that’s a shame. More importantly, it is a drag on progress. Recognizable? Keep reading, because things can be different. An automated quotation process gives you, the entrepreneur, the time to move your business forward.
It is a common dilemma. As a business owner, you would like to spend less time creating quotes, but the significant investment of time and money in an additional estimator is holding you back. Perhaps your budget is not adequate or you are reluctant to put a lot of energy into getting the new hire ready. It just so happens that the recruit needs time to get to the desired level. Essential, because those who misjudge their price may well find themselves at the expense of many a profit.
Not a big surprise, then that it’s an exciting step to outsource the quotation process. The consequence of this is that, as a director, you spend a substantial amount of your time working on quotations. Chances are you’ll also have to deal with some workplace issues from time to time. Want to distance yourself from your company in order to look at it from a zoomed-out perspective and work on it? In this respect, you can forget about that. You work primarily ín your company.
Working on your company is crucial for further growth
Working on your company is crucial for further growth of your business. For example, you could improve the marketing of your company. You could also apply new developments in the market within your factory, such as applying machines and software that optimize processes.
Kaizen is the Japanese word for change for the better.
Additionally, you could also do much more forward-looking business. How will the market change over the next few years and what strategy can I outline with that in mind? And you could continuously work on making improvements in your organization. Kaizen, is what it’s called in Japanese: “Changing for the better”.
So instead of being lived by the delusion of the day, and your company just keeps moving along as it always did, you can make much more progress when you start working on your company. Moreover, this also gives you more time with your customer and allows you to better empathize with what is going on in their world, and then adjust your proposition accordingly. Count your winnings.
Automate your quotation process to save time
Properly considered, working ín your business is a drag on the progress of your organization. Fortunately, there is a possibility to remove that drag and create more space to work on your business. Automate your quotation process and you’ll be swimming in time.
There is just one big but: automating the quotation process is complex and time-consuming. At least, if you want to do it yourself. Because then you soon have to create complicated excel sheets. Or you need to connect ERP and CAM systems. A lot of hassle.
Spend eight times less on quotations.
But what if you could have your quotation process automated within three weeks on the basis of a low-profile subscription? Almost too good to be true, but it really is possible thanks to the Quotation Factory. And the results this platform produces are even more magnificent.
Practice has shown that you can spend at least eight times less energy on quotations. So instead of spending all day quoting, this work will now only take an hour. The time savings are huge.
Self-service portal for customers to create their own quotations
For most metalworking plants, at least fifty percent of their customers are suitable for this, practice shows. There are even examples of companies that have over 75 percent of their customers quoting automatically.
Get back to entrepreneurship and doing with it what you do best
Then experience how much time you can save as an entrepreneur – and the value it brings. By taking this step you can finally start working ón your company. Automatic quoting has its price, of course, but you can also look at it differently. It’s a simple return on investment sum: for the price you’d normally spend on half a full-time (0.5 FTE) estimator, you have your quoting process fully automated, including a self-service portal for customers. You’ll notice it right away: as a director, you can finally get back to doing what you do best: business instead of creating metalworking quotations.
Looking for estimators and work planners in the metal industry? Virtually impossible to do. The number of vacancies is large and then they are also open for a remarkably long time. Meanwhile, this is holding back the continued growth of many metalworkers. But it can be done differently thanks to new technology. An automated quotation platform is the solution. Too good to be true? Just read this blog.
It is a well-known problem for many metalworkers. Due to investments in more machines and more diverse operations, the quotation department can no longer manage to handle all requests quickly and accurately. The reason is obvious: there is an urgent shortage of estimators and work planners.
And this in a market where customers find it increasingly important to be able to see prices, conditions and delivery times immediately, so that they can then make a quick decision to order. That desired pace is currently a utopia for many metalworking companies.
t is searching for a needle in a haystack when it comes to qualified estimators and work planners.
Due to the shortage of estimators and work planners, the requesting party must wait days or sometimes weeks for a quotation. On the other hand, for the supplying party, it is the bottleneck for further growth.
You could do everything you can as a metalworker to look for ways to strengthen your team, but that would not bring any joy to anyone. It is almost impossible to find estimators and work planners who meet the requirements. College+ or Bachelor Degree level and if possible with years of experience on the clock. It is searching for a needle in a haystack.
Frustration among younger generations of estimators and work planners causes exodus
Is this a dying breed? In any case, there is a lot of natural lapse within companies, as experienced professionals often work in the estimating department of metalworkers. And they retire one day. If there are already younger estimators and work planners on the team, it is a difficult task to retain them. The question is how.
The answer lies in the field. Exponents of the younger generations in the field, a survey found, are especially frustrated that they don’t have the tools to do their jobs well. They feel like anonymous ticking boxes because they have to type information from systems all day long. These talents are highly educated, but seventy percent of the time do nothing more than production from behind their keyboards. They think that this is – and it is – a waste of their abilities.
Technology as a solution to the shortage of estimators and work planners
You might think that the shortage of estimators and work planners within the metalworking industry is an unsolvable problem. As is often the case, technology provides the solution here. The Quotation Factory represents an automated quotation process between applicant and manufacturer. As a result, those who use the platform enjoy several benefits that offset the shortage of estimators and work planners.
For starters, this digital quoting platform makes estimators more productive by at least a factor of five. Why? Because estimators can leave the hard work of counting and tallying that they normally have to do to the Quotation Factory software, which does it automatically based on intelligent recognition.
Fully automatic estimating avoids unnecessary and error-prone typing
Then again, this software allows metalworkers to fully automatically estimate eighty percent of products of a somewhat simpler nature. So as a human being, you don’t have to look at that at all.
Another crucial perk: all typing, data entry from Excel sheets to ERP systems, is completely eliminated. Because there are automated connections between ERP and CAM systems within the Quotation Factory. This means that an estimator only has to spend his time on the twenty percent more complex requests.
As a result, he can simply return to fully utilizing his college degree, also aided by a tool that is totally specialized for his job and easy and quick to use. In an instant, it makes the job of an estimator interesting and sufficiently sexy for the younger generation – lo and behold, the solution to possible employee lapse.
All knowledge and experience for everyone and always available
There is another scenario in which the Quotation Factory platform is of great value. Suppose your estimators are coming of age. Even if you were then to find new people with great difficulty, it is still quite a challenge to transfer all that knowledge and experience from your original estimators to the young successors.
The moment you use the automated quotation platform, the first step is to bring that existing knowledge and experience into the system. You package those into estimates, formulas and algorithms. And then you only have to train the new generation to handle the twenty percent of the more complicated requests.
No more inconsistent quotes
The fear of quotes becoming inconsistent will disappear like snow under the sun. In fact, it doesn’t matter who makes the quotation. Whether it’s the old or young generation, the same outcomes will always emerge.
An additional positive consequence is that part of the estimator’s work will be to improve estimation algorithms by comparing pre- and post-calculations. This is an activity that the estimating department traditionally does not get around to, but it is very important. After all, anything you misjudge costs you in terms of profitability; you’re either too expensive or too cheap.
Automatic quoting via self-service portal
Then finally, there is a major advantage of working with a fully automated quotation process. As mentioned, customers want to have immediate insight into prices, stocks and delivery times. By that they actually mean now. A common way to facilitate this is a self-service portal. That portal can only provide the desired information directly if you have fully automated the quotation process. Thanks to the Quotation Factory system, you’ll be on top of that from day one. And then you will very quickly find out which customers make such simple requests that you can quote them fully automatically.
This makes it very transparent for you as a metalworker to see what percentage of your requests you can quote automatically. If that percentage is high enough, it could be very interesting to offer customers self-service portals. For them this means more service, because they have direct access to prices and delivery times. On top of that, you unburden your estimating department, giving them even more time for the complex quotations. Win-win situation.
In short, it is highly questionable whether an old-fashioned tool like a job posting is the right solution to the shortage of estimators and work planners. Technology is already miles ahead and offers the ideal alternative: a fully automated quotation platform.
Opting for a self-service portal pays off, especially for metalworkers with customers who request relatively simple products. What does it yield? Less pressure on your own sales department, more convenience for your customers. There is one big but: developing a self-service portal yourself comes with major challenges. Give yourself a carefree alternative and opt for a SaaS solution. This blog explains why that is the best choice.
Convenience serves man. This time-honored adage also applies to user-friendly self-service portals in the metal industry. Because they ensure that your customers can request quotes at any time of the day and throughout the week. All they have to do is select the material and the quantities. They then immediately have insight into the prices and, possibly after comparing with the rates of other suppliers, they can immediately decide whether they want to turn it into an order.
This takes customers less time than preparing a request via email. They just need to pour the information into the self-service portal. In addition, your customers have greater assurance that the request will be processed properly. The factory’s sales department cannot make mistakes. After all, the customer makes his own request and is therefore in control of the information and the process.
A metalworking quotation quickly and easily
These advantages apply even more strongly when dealing with customers whose buyers are of a younger generation. They don’t really need telephone conversations and warm contact. They want to be able to arrange standard activities easily, quickly and digitally.
Combine this with a full customer portfolio consisting mainly of customers who request relatively simple products and a self-service portal can triple your turnover as a metalworker. And the great thing is that you hardly have to pay attention to all those offers. That means a lesser burden on your sales department.
More air for estimators and salespeople
There are more reasons that make it very attractive to choose a self-service portal as a metalworker. For example, if you have customers who engineer themselves. This means that they often have to make design decisions. The associated pricing issues all come through your sales department.
This costs you a lot of time and hardly yields you anything. If you give your own engineers and those of your customer access to a self-service portal, so that they can work with it themselves, there is more room for your estimators and salespeople.
Self-service portal as additional sales channels
Another advantage of self-service is that you can see it as an extra sales channel in addition to the telephone and email. And what a great one. It is the basis for deploying multiple channels (omnichannel strategy), through which you can receive quotation requests in all kinds of (digital) ways.
For example, a marketplace to which you connect your self-service process. Or ERP systems of very important customers, so that you can receive requests directly from their systems. And of course the requests that can be received and processed via the SCSN network (Smart Connected Supplier Network).
Essentially nothing changes for you as a receiving metalworker. Underneath is the same automated quotation process. That is, the same IT facilities needed to estimate everything needed to prepare a quotation. It is about a powerful and versatile expansion of your options. The moment you opt for a self-service portal, it opens up gateways to use many more sales channels.
The challenges of a self-service portal within the metalworking industry
And so the arrival of a self-service portal extends in all sorts of ways the business model that you have as a metalworker. But that doesn’t happen automatically. There are significant challenges you will face when developing and maintaining a self-service portal yourself. Or rather, problems. And they make it complex.
Automation of the quotation process
The first challenge is technical in nature. Many companies offer quotations based on excel sheets, CAD viewers, CAM systems and ERP quotation modules. They run on computers within their own factory walls (on-premise), while the website with the self-service portal is active in the cloud. This raises the question of how to connect them.
A complicated exercise. If you work with excel sheets, this means that your employees make many decisions themselves. Then you will first have to automate before you have an automatic quotation process that you can connect to your web portal.
In addition, your estimators and work planners often use local CAD/CAM systems to estimate production times and determine manufacturability. They usually operate it manually. So you will also have to automate all this if you want to connect a self-service portal.
The possible (over)loading of existing systems
The second problem is scalability. The moment you start using self-service for your customers, it may be that many users use your web portal at the same time. That is different from roughly two to five estimators within your own organization that are making quotes in the familiar way with the available tools.
It is highly questionable whether the interconnected systems running in your factory can handle that load. Before you know it, you have to think about purchasing more licenses of CAD/CAM systems that can run simultaneously. And how do you get them to work together in parallel to distribute the load?
Continuously monitor and optimize the process
Then there is another shortcoming that soon presents itself. Let’s say you’ve been able to tie all the systems together and the self-service portal is finally up and running. Then there will soon be one, two, maybe even three people watching monitors all day long to see if something is going wrong somewhere in the process. And that happens regularly, for example because your customers’ drawing errors prevent your CAD/CAM systems from being able to use them. Or that a link between systems falters.
Moreover, your customers can draw and design with such a great diversity that the same CAD/CAM systems regularly suffer from it. Your people have to continuously fix that manually. So they are putting out fires all day long. And that is very expensive.
In addition, CAD/CAM systems have not been developed with this vision and the connections between the systems are often not made to be robust. If something goes wrong, it messes up the quotation process. And then you have to intervene manually to get the process going again. That is a lot of hassle and takes time. Moreover, it requires constant tinkering and refining.
Alignment with all software suppliers
The problems are piling up. Because if you want to connect your self-service portal with the systems in your factory so that you can quote automatically, you have to deal with a multitude of software suppliers. This makes the development of the portal very sluggish. After all, you have to interact with many parties to make it a whole. Do you want to make a change? Even then, in many cases, you will have to deal with all those parties. Usually they don’t have time right away and planning and coordination becomes a lot of hassle.
You are often also dependent on the parties that made the software, such as the ERP or CAD systems. You can still have such inventive ideas for new features in your portal, the question is whether the integrated systems can do it.
An example: If you want to perform manufacturability analyzes in your self-service portal – after all, you don’t want to make quotations for things you cannot do – you depend on systems in your quotation process and whether they can perform such analyses. There is a good chance that you will also need your work preparation department, so that you are again dependent on people who do feasibility checks. In that case, the business process is not yet suitable for a self-service portal.
High investment costs
Finally, you have to deal with the valuable time that is required and the risk that it entails to have a self-service portal developed. It is so complex that you quickly need a turnaround time of one to two years. The fact that you have to wait so long before your portal can pay off makes you consider the cost of “not having it” as well. Moreover, it is difficult to find IT parties that can deliver on these kinds of promises, because these are IT projects with a high risk profile.
All these factors mean that developing a self-service portal quickly costs hundreds of thousands of euros. And then it also takes two or more FTEs to manage everything on a daily basis and keep it up and running. What you will then have for that money and that time investment is a minimal variant that you will continue to tweak for years as well. In addition, the price can sometimes double or even worse: triple or even quadruple…
The alternative to a self-developed customer portal
It seems impossible to get a customer portal up and running, were it not for the fact that the solution already exists. The Quotation Factory provides self-service portals for the metalworking industry as a service. Namely Software as a Service (SaaS), which can completely unburden its customers. This cloud native platform is built for the cloud. That is, it was conceived from the start with scalability, robustness and security in mind. The features are so extensive that it is virtually impossible to compete with it with your own project.
All customers benefit from a learning platform
Forget the FTEs you should make available to monitor what goes wrong. Get rid of that hassle. The Quotation Factory is responsible for meeting service levels, such as availability.
Gone are the concerns about disruptions due to the quality of drawings. Because such an enormous volume of drawings passes through the Quotation Factory platform that it only has to solve the problems that arise for all drawing variants once. All customers whose self-service portal runs on this platform will benefit from this. The platform learns from all customers who upload drawings for quotation. In short: you ride along with the solutions for the other.
Safety, reliability and operational security guaranteed
Finally, the Quotation Factory solution is set up in such a way that its infrastructure is able to communicate with ERP and CAD/CAM systems. Safety, reliability and operational security guaranteed. Regardless of which link is involved with which system in your factory.
Offering this solution and thus tackling all the aforementioned problems is the core business of the Quotation Factory. That makes the difference for you as a metalworker and your customers. You focus on your core business, the Quotation Factory on its core business. Software as a Service, in other words.
Conclusion of this story? In particular, opt for a self-service portal, because it pays off. But those who want to invent the wheel themselves are in for a treat. Especially now that the advanced SaaS solutions are available and it has become the core business of specialized IT companies, you have to ask yourself whether outsourcing is not the most sensible option. Especially because your competitors can now have a self-service portal very easily and quickly, without all the increasing costs and headaches.
Ten years back, the market for metalworkers was such that you could devise a relatively simple portal yourself and have it built at limited cost. This could be done by cleverly linking your CAM systems with your ERP system. In the Netherlands, De Cromvoirtse and Suplacon are known as pioneers of such self-service portals.
Next, 247 TailorSteel saw the opportunity to far surpass its predecessors by making the self-service concept much smarter. Only by developing the software themselves (Sophia) and not depending on the limitations of existing ERP and CAM systems, the quality of self-service reached unprecedented levels.
But 247 TailorSteel took it a significant step further than its predecessors. Namely, to set up the whole concept for convenience, speed and reliability. Then suddenly having the best price becomes less important because the service level allows you as a customer to always know where you stand.
Once you have that successfully in place, only transportation is the limiting factor because delivering outside a 200km radius is unfeasible. But with enough capital, you roll out the concept multiple times in strategically smart locations and you have a scalable business model that is disruptive because of its repeatable success.
The new label OnOrder from VDL
An interesting thing now is that VDL recently launched its new label under the name OnOrder. A self-service concept that is still very much in its infancy and barely comes close to what De Cromvoirtse and Suplacon have been able to do for over a decade. Still, an important first step and a clear demonstration of the strategy they are trying to embark on. Namely … no, first the following….
You should know that in the early stages of my startup, I personally visited VDL a number of times. I was even interviewed extensively by a large and reputable consulting firm about my views in this area. Only later did I find out indirectly that that too had been organized by VDL.
The interesting thing about this case is that VDL can (in my opinion) approach this from a different strategy. For it has, with its multitude of factories, the ability to make the customer experience a reality as you have at www.booking.com. Through 1 portal, customers have access to an unlimited amount of hotels, cottages, rooms, etc.
The available capacity is just about infinite. And that is exactly what VDL might want to focus on. 1 entrance for customers with behind it a smart platform with almost unlimited capacity AND capabilities.
One thing is certain, the next step in differentiating among metalworkers is diversity, in addition to convenience, speed and reliability. Diversity in specialized operations. A platform that can handle almost anything. Sheet metal (thick and thin), pipes and tubes, turning and milling parts, assembly, welding, you name it. Work distribution across all VDL factories that are also logistically close enough to each other.
If VDL succeeds in digitizing the entire process, this ambition is certainly achievable. A very interesting case in my opinion and certainly something that will put the Dutch/Belgian metalworking industry back on edge.
Centralization and the power of large corporations is something to stay vigilant about.
Should this make you nervous, or even scare you? Yes. Centralization and the power of large corporations is something to stay vigilant about. Bol.com, Amazon.com, Spotify.com, Netflix.com are good examples of rapid change where the diversity of companies/shops has totally disappeared.
My personal drive is to not let this happen within the metal processing industry. This can only be done with technology that empowers each plant to best integrate its strengths and skills into collaborative supply chain partnerships. This allows for even greater diversity than monopolists can offer. But with exceeding expectations in terms of convenience, speed and reliability. I will stop writing and continue developing because we have to stay well ahead of VDL of course 😊
The metal industry benefits from more agility in the supply chain and value chain. This is only achieved by bringing supply and demand together as well as possible. Matchmaking based on artificial intelligence is key. By seamlessly connecting processes, the routings that products take are becoming smarter and smarter. The question arises: which matches do you have to make? And how? You can read it in this blog.
Where would we be without matchmaking? It brings people, organizations and companies together. Just look around you, there is plenty of matchmaking going on. We know the phenomenon of dating sites, to ultimately have a happy marriage as a result. Or a fun filled night of course, let’s not beat around the bush.
We see matchmaking returning to the sport of boxing, to host an important match between world stars. In video games, to bring the right players together. Matchmaking can even save lives when characteristics of organ donors match those of recipients.
Matchmaking is also a determining factor in the business world. In the sales process, it is a crucial factor to bring in the ideal customers. The same applies to business events, for which you want to find the right visitors. To stay on the subject of entrepreneurship, you can eventually apply matchmaking in every supply chain and value chain. The challenge here is: how do you ensure that you fill the existing need (demand) as well as possible with what you can offer (supply)?
How does automated matchmaking work within the metalworking industry?
So many factors influence matchmaking within the metalworking industry that artificial intelligence is the only way to automate it. The variables too diverse for an estimator or bid preparer to achieve a 100% match. This would simply take too much time. Especially when it comes to more complex inquiries. Below are the 4 primary variables to consider when it comes to matchmaking.
What features are requested?
If we translate this to the metals industry, you have to make various matches to achieve the optimal result. That starts with the design. As a metalworker, you have to derive features from that design in order to make the right match. The question is: which machines are capable of producing these features?
What tolerances are acceptable?
With the features come quality descriptions. This includes: which tolerances are acceptable? What crudities are still allowed in the product? Clients record such quality descriptions in Product Manufacturing Information (PMI).
It means that as a metalworker you must be able to read out PMI data and match it with machines that can meet the requested tolerances. Then, for example, you may find that you need to add operations to get to the right level of crudity in the product. Either way, your factory and your machines need to be set up to meet the demand.
What is the required capacity of the supplier?
This is a form of matchmaking that you can distill from drawings and specifications of the requesting party. But other data is also needed to fully and optimally apply matchmaking.
After all, you also need to know when the requesting party wants to see results and what the delivery date is that he has in mind. You have to match those requirements with how busy you already are as a supplying party. Can the assignment fit into the capacity you have?
What risks does a production or supplier entail?
If we look from the perspective of the outsourcing party, there are always risks. You can also largely overcome these thanks to matchmaking. The supplier can demonstrate that it can meet certain service levels. Or he can show that he has already successfully performed the requested operation several times, which makes him a reliable partner.
Which smart algorithms offer a solution when it comes to matchmaking
If we look at the world of matchmaking through this lens, we see in the metals industry that it is mainly the decision-makers who make the matches. However, the accuracy sometimes leaves something to be desired. That is inherent in people’s work when so much complexity is involved. Artificial intelligence offers a solution. Now that factories are increasingly automating, they can also apply matchmaking algorithms. There are many. That is why it is useful to categorize them all. Let’s run them down.
Can you deliver what is requested?
Starting with the basic category that you need to have in order as a manufacturing factory: you need to know what you can deliver and what the customer wants to receive. The customer demand is reflected in the design. It is then important to check whether you can make matches based on your own possibilities with all those desired aspects within this design. Can you carry out the production steps required? In other words: can you deliver what is requested?
Do you have the right machines and operators?
The next question is, are your machines capable of performing the operation? Is the product to be processed not too large or too thick? Does your machine have the right tools for it? If you can answer those questions with yes, then you can look at the operation. This requires operators in most cases. Do you have operators in your workforce who can get this job done?
Once we know that – machines check, operators check – what is the occupancy rate of your machines and operators? In other words, are they available? Suppose that is only in a few months and the customer asks to deliver the day after tomorrow, then unfortunately there is no match.
What precision can you meet?
This category forces you to ask yourself the question: do you have the machines and people for it to perform the operation in the requested state of precision? And can you demonstrate to the customer that you can do this with a high degree of reliability and within the desired time?
Just an interim assessment: the harder you are to make the matches on all the factors mentioned so far, the harder you will be able to demonstrate as a factory that you can make it and deliver it. There is a good chance that the risk for the requesting party is then too high.
What is the production routing?
Then there is a completely different category of matchmaking that covers the entire production process and all the steps that go with it. Namely the question: what is the best production routing? You can also apply smart matchmaking to this by examining various steps and qualities within your factory. They determine which routing a product takes in your factory. We call this the “ilities”. Because in English they end with “ility“. We list them below.
How well can a product be loaded on the machine? Sometimes a robot can do that, sometimes a human is needed. Both of these affect the routing through your factory.
How easy is it to pick up the processed product by a human or machine?
To what extent can the processed product be stacked? And does that have to be done by a human or machine?
How manageable is the workpiece? If it is very large or heavy, you may need a robot or several people for it.
How easily can you store the processec product in the warehouse? Does it take up a lot of volume? Is it flat? All affect the final match.
To what extent are the features in the processed product accessible for measuring instruments? The same applies to your pressing equipment and screw device: the product must have a shape that you can reach with it.
Once the operation has been completed, the product must be sent to the customer. Then you have to pack it first: how easy is that to do?
Then the product has to hit the road. How big or fragile is it? In other words, how transportable is it?
These are all factors that you can express on a scale: from very easy to very difficult. Thanks to all these matchmaking algorithms, you can determine whether or not you should accept an assignment as a metalworker. And if you don’t want to or can’t do it yourself, you can easily use these algorithms to see which supplier would match.
Are all purchased parts and raw materials available?
This was all about matchmaking between what is desired and what you can do as a metalworker – and looking at it from all kinds of stages in the production process. The next category is matchmaking with the suppliers and you as a metalworker. Can they supply the purchased parts and raw materials that you need to perform an operation? You will have to match: which supplier is the best in terms of the materials (and the quantity and speed) you need?
In times of changing prices and a stagnant supply chain because it is not certain who can supply what, the complexity of this form of matchmaking increases, and with it the importance of optimizing it.
Which operations can or should be outsourced?
On to the next category: outsourcing operations. In fact, you do the same as when you apply matchmaking within the walls of your own factory, looking at the quality, capacity and availability of your machines and personnel. But now you want to take a look inside the other person’s factory.
You also want to use matchmaking on this, so that you can outsource an operation to a party that can do it well, is sufficiently reliable and can deliver within the required time — because your own delivery time is related to this.
Can you anticipate setbacks such as machine failure?
Not only metalworkers, OEMs also benefit from knowing which factories can do what. They also want to be able to apply matchmaking, so that they can choose the best combination of suppliers. This has traditionally been done by the procurement department, which enters into contracts with suppliers and makes agreements.
In modern times, you want to be able to anticipate immediately when things go wrong, for example if a supplier has to deal with machine failure, by finding a replacement solution in the market. Preferably on an intercontinental level: matchmaking across borders.
A dynamic supply chain requires artificial intelligence
If metal plants can do that, the supply chain becomes much more dynamic. After all, they switch between suppliers much more often and can therefore respond much more quickly to negative events. When the supply chain gets that agility, you as a supplier have to make sure that you have your organization in order to be able to participate in that game. And so you will have to digitize.
Those who optimize matchmaking and automate on the basis of artificial intelligence can choose their production routing more intelligently. Smarter means: optimum quality at the highest possible efficiency and reliability.
To do this, first start by optimizing the routing within your own factory, then do this with the routing of your suppliers of raw materials and purchasing parts and then with the routing of the parties to which you can outsource processing. Finally, if OEMs also make use of this, both the supply chain and the value chain will become more optimal and agile with every stroke.
The way forward is clear – automated matchmaking using AI is key.
What used to be guesswork for metalworkers is today a labor-intensive job, that of estimating production times within the metalworking industry. But artificial intelligence and machine learning are going to change that. Really; we’re reverting back to predicting thanks to these developments. More accurate and therefore more reliable than ever. Too good to be true? Read this blog and discover the future of quoting and planning within the metalworking industry.
First, back in history for a moment. Decades ago, metalworkers specialized in a small number of operations such as laser cutting, welding or the sawing of beams. As specialists, they could estimate the production time of that work on the back of a beer coaster. So with guesswork
There is still a generation of metalworkers from that era. They have an admirable sense of how to determine the production time associated with processing a certain amount of kilograms of metal. However, due to the increasing diversity of operations, this is almost impossible to do in practice. Take laser cutting: making many complex shapes is different than cutting out a large square. The kilos are the same, but the production times involved are really different.
The importance of reliably estimating prices and lead times
It has become increasingly important within the supply chain for metalworkers to be able to estimate reliably. This is primarily due to small margins, which are under pressure due to competition. The key is to offer increasingly competitive prices. Then it’s not helpful if you start overestimating.
Accuracy is also required because the production times you estimate have implications for the subsequent production process. The time estimate determines which metalworking machine you reserve when. And if it reduces capacity on the factory floor, it has a detrimental effect on every single request that comes in. Hence, avoid.
Third, there is a growing emphasis on shorter time-to-market in the supply chain. As a result, there are fewer on-site stocks and just-in-time delivery is more or less a requirement. This means that the estimates you make as a metalworker will affect your delivery time. Misjudge? Then your delivery time may easily become too long. And that negatively impacts the supply chain. Due to incorrect estimation, the products may also be sitting on your production floor waiting for you. All of which are inconvenient.
Estimating does not need to be labor intensive
That’s why it’s so important to be able to estimate with accuracy. The time for guesswork is over. Instead, other techniques have taken over. In part, CAM systems help to estimate because they have knowledge of the technical specifications of machines and know what tasks machines need to perform. From there, they can then associate times with that. That way you can get very accurate estimates from CAM systems.
The disadvantage of this: it is very labor intensive. For people are still in charge. In this process, the estimator has become a kind of disc jockey. He browses through all those CAD files to get production times out of them. He then crams those into Excel and/or the ERP system so that he can eventually produce quotations. A time-consuming process, especially as the diversity of operations has increased. This causes the estimator to take longer to produce a quotation – and customers to wait longer for their prices.
We are still talking about estimating rather than predicting. While guessing and gut feeling were still the most useful ways to make predictions based on kilograms, estimators now have to use complicated formulas to estimate the times of the various production steps.
Faster metalworking machines make time estimation more difficult
There is another development that complicates this process. Machines have become faster and faster. No matter how much knowledge and experience estimators have, this makes it increasingly difficult for them to estimate production times. Especially since the bottleneck, where the production process is slowest, keeps shifting. For example, what is occurring now; cutting machines can cut so fast, that loading a plate, or getting the cut products out, takes much longer than the cutting itself.
You can use technology for that, but once you’ve done that, getting the plate to the machine is the slowest factor in the process. So that changes nothing for a estimator. Sometimes he is estimating at a detailed level how much time cutting takes, while losing sight of the fact that transporting the products to the next workstation can take up to five to ten minutes.
Big data drives efficiency improvements within the metalworking industry
Fortunately, change is happening at a rapid pace. Let’s start with the metalworking machines themselves. In the past, these worked “alone” and provided little feedback on the production process. Now they are sharing more and more information about what they are doing; we call those events. This is partly because machines today are connected to the factory computer network. So they can not only receive input, but also send out events that tell exactly what the machine is doing.
This means that the behavior of the machine has become observable. If you capture events, you can very well use them to learn more and more about the working speed and loading time of machines. But also how often a machine has downtime. Once we capture those events as important information, big data is created. And the more you have at your disposal as a metalworker, the more valuable. Because you can then use all that information for a new generation of algorithms.
Digital twin provides process optimization on the work floor
This fuels another accelerated development. As the machine is connected to the network and transmits a lot of information, a new form of software has emerged: digital twin. This digital twin, a virtual representation of reality, runs on the server and mimics the behavior of the machine on the work floor. All events that the machine ‘spits out’, information about the current status of the machining process for example, can be extracted in this virtual environment.
And so gradually the entire metalworking plant is getting a reproduction in the virtual world – in the form of digital twins. Those twins can be about anything: the current status of machines, the location of autonomous driving carts and even the operators on the factory floor can get a digital twin thanks to cameras. You can then apply algorithms to that, which, for example, continuously monitor the safety of operators and automatically trigger an alarm if necessary. Even entire business processes or affairs regarding the factory as a whole, including transport and energy consumption, can be embodied in a digital twin.
Automated business processes within the metalworking industry thanks to data in the cloud
While digital twins are abstract representations and thus usually not visible on a screen, they are very valuable in communication between different machines – even if they belong to other companies in the chain. Normally these machines converse in their own dialect, but digital twins produce standardized events, creating “event streams”. The great thing is that you can subscribe to those streams with other parts of your production process. By capturing all events, you can stream the entire plant through time. Exactly as if you were playing recorded music.
Plant behavior in playback form is the future. And to make it even more inventive, business processes can subscribe to those streams as subscribers. So when an event occurs, you can thereby automatically start a new process or make a decision at a certain point in time. These streams thus grow into an important basis for developing automated business processes and decisions.
At the moment, such technologies, like digital twins or event subscriptions, operate mainly on computer systems within a factory. However, the exact same services are now available in the cloud. This allows you to send events to the cloud, include big data there and automate business processes. Another advantage; you can connect factories together in the cloud much more easily than you can connect to the infrastructure within the very walls of a factory.
From data driven to event driven metalworking plants
The farewell to conventional thinking, in terms ERP systems, is imminent. Centralizing data is still in the lead today, making that data reusable in factories. That certainly has its value, but it mainly creates data-driven processes. That paradigm will rapidly depart the industry.
Instead of being data-driven, metalworkers are going to set up their factories event-driven. The big advantage? By subscribing multiple business processes to events, a plant can respond to incidents in much more real time, and in doing so they are less dependent on the central database. After all, the event already contains the data that is needed.
Where previously the ERP system had an important role, another technology is taking over: Enterprise Service Bus. This architectural software construct allows you to capture events, observe them, and allow processes to subscribe to those events. It allows you to set up business processes much more robustly and in real time. Everything that happens in your factory becomes observable within the digital world.
From estimating to predicting thanks to cobots and AI
This is what today’s technology makes possible. This is the foundation that allows you to go from estimating to predicting as a metalworker. Even as machines are becoming more capable, faster, and the bottleneck is shifting as a result. Even as cobots are increasingly taking on some of the work of operators, so the speed of the process changes and realistic estimation of production times becomes even more difficult. But in the new digital world, cobots are also connected to the network, and they too have a digital twin, which means that their work too can be observed and estimated more accurately in time.
It is the power of artificial intelligence. As humans, we cannot beat the computer. And that’s because we can make the computer learn like humans learn, but faster. For that, we do need to train him. Preferably continuously. That requires a lot of data. So how do we teach a computer to play chess? By digitizing all the chess games played and feeding them to the computer. That’s how it learns chess step by step. This is even faster if you let two computers play chess against each other; then incredibly reliable algorithms are created in a relatively short time. That’s the big advantage: the computer learns much faster than humans. You can train those 24/7 without getting tired.
This creates a neural network – an imitation of how the human brain works – synchronized in software. Training that process is called machine learning. By using big data, it is possible today to properly train those neural networks. And as it is better trained, it produces better and better predictions. We no longer call these estimates because we no longer use formulas. Instead, we predict the future based on the past. Because the data you train the model with is always about the past. So now we are applying this strong piece of modern technology to the metalworking industry.
Continuous self-learning system instead of excel sheets
There are three different technologies that will enable metalworkers to move from estimating to predicting: big data, event-driven factory design (observable factory) and artificial intelligence. When it comes to quotations and work preparation, these three developments mean that we as humans no longer have to work with excel sheets to estimate production times.
We can instead set up a continuous self-learning system, which allows the estimator to predict production times much more reliably. No longer are metalworkers dependent on the availability of people’s knowledge and skills. The complete past and present of their factory are contained in big data, which they can always use in the future to improve algorithms and even make new discoveries.
This completes the story. Because the way the digital world works remains similar to how specialists used to determine the production times of their operations. It’s still a prediction, only the guesswork has been replaced by a computer that uses much more data. The difference? Very high accuracy – and that’s what the metalworker wants.
Pressure on the capacity of metalworkers is increasing. Customers demand that they perform more and more different operations and thus handle more production stages. Luckily, digital transformation offers a solution. Feature recognition and automated manufacturability analysis provide additional leeway. In this blog you will read how and why Upstream Feature Management is a necessity and is becoming the new standard within the metalworking industry.
Perform each production stage in-house or outsource?
The increasing demand for various machining operations presents metalworkers with two choices: perform the increasingly diverse production stages in-house or partner with suppliers. Take the placement of inserts, painting or powder coating. Should you do it yourself or would you rather outsource? That’s entirely up to the metalworker, but the metalworker wants to be able to offer it to the customer because to sell them no is fatal.
A growing diversity of production stages also means: a more complex route to the final product. Especially if you as a metal worker also outsource parts, meaning you also have to think about transportation and related operations. The coordination on the production floor, the estimation of production times, of delivery deadlines and consequently of quotations: it all becomes more complicated.
The demand for (sub)assemblies is increasing
That’s not all. A development that is also contributing to the pressure on metalworkers is that the demand for (sub)assemblies is increasing. They increasingly have to account for semi-finished products. As a result, metalworkers must perform operations at a higher level of abstraction, such as welding and assembly. This also makes the quotation process and the production routing more complex, because these now also involve (sub)assemblies and their subsequent assembly.
These developments will ensure that 2D drawings will disappear at a rapid pace. These are in fact no longer sufficient to carry out the increasing diversity of operations. Cutting a sheet of metal is fine in 2D, but producing (sub)assemblies is a different story; you really need to draw those in 3D. This obviously has implications for factories that largely turn over sales based on 2D drawings. These are going to find it increasingly difficult in the years to come.
Artificial intelligence has become a necessity
Because of the diversity of operations that metalworkers have on their shoulders, more and more artificial intelligence is needed at the beginning of the process. The trusty CAM systems specialize in only one specific operation, for example sheet bending, and always work from that one perspective. If you put the geometry of a tube or a rotating part into this, the system doesn’t know what to do with it.
Currently, for this reason, metalworkers have to choose the right CAM system for each drawing of an operation. This is a process that is still done by hand at many plants. But if you want to do this smartly and efficiently as a metal worker, you need intelligence at the beginning of the process (upstream) that knows how to recognize the diversity of parts, (sub)assemblies and operations.
New generation of software within the metalworking industry
For a long time there was no digital solution for this. But a new generation of software is now beginning to emerge that can accurately recognize a wide variety of shapes and operations. Metalworking software that can distinguish sheets from tubes, categorize different profiles and recognize basic shapes to provide insight into what materials (sheets, profiles, tubes, bar and stock material for machining) you need to purchase in what quantity. Even purchasing parts are now recognizable.
So instead of using a multitude of specialized CAM software, you deploy this new technology as early as possible in the process. All incoming customer inquiries can thus be categorized and features recognized fully automatically. It makes quotations a lot easier and that gives leeway to the metalworker! And it makes work preparation a lot easier, so there’ s also breathing space for the work planner.
Here are the 6 biggest advantages of this new generation software:
These types of intelligent software are called form recognition and feature recognition, which recognizes features in geometry and can therefore determine the production stages needed to realize them. What can be recognized today is very extensive and is much more accurate than what any estimator is able to recognize.
The beauty of feature recognition: If you can do that in 3D, you can also take the next step. And that is that you can de-feature.
It’s like this. The design you receive from the customer is always the end result. So drawings only describe what leaves a metalworking plant. But what it looks like on the production floor at any given moment in the production process, there is no drawing of that. With very powerful feature management you are able to strip a drawing of certain features. That is, you can automatically generate a drawing of the product so you know what the product will look like before a production stage and after a production stage. And that throughout the entire course of operations!
Suitable for robots
Why is this so important? Metalworkers must automate extensively to survive. Using a robot instead of an operator seems simple. But if products are difficult to stack, they still require human labor. Because a robot is not able to do that. For each production stage, you need to know what the product looks like to determine if it is suitable for a robot to handle. The suction cups must fit adequately on the product.
So the shape must be suitable for a robot. Therefore, it is crucial that you have very powerful feature management so that you have a drawing of what the product looks like before and after each production stage. Pickability, stackability are just a few of the dozens of types of decisions that you need to be able to make automatically if you want to automate your facility to a great extent.
Automated decisions in the workplace
Another example. Imagine you have a product, let’s take sheet metal, and you need to add inserts (press-in parts) into it. There may be settings (folds) in there, that’s very common. Now what if those inserts need to be in a place that you can’t reach because of the setting? Then, for that product, you have to redesign the routing of your production process. Laser cut first, press in and then edge. Now people are deciding that. But if we want to move – and we must – toward a manufacturing plant where the lights can go out and where robots work for the most part, then you need very powerful shape recognition and feature management at the beginning of the process. Those types of artificial intelligence will soon be the basis of all of your automated decisions in the workplace.
Feature management also provides a boost to the manufacturability of a product. Now there are limitations to what a specialized CAM system can determine. By setting up features at the front end of the process, the initial question is no longer: is it manufacturable? But: how can we create this best? And thus: which features can we best make with which machines/suppliers? Almost everything is manufacturable, but in a different way than your standard routings would work in your facility. Even the choice of whether to outsource, and with which partners, can be automated using artificial intelligence.
A new foundation for the production process is emerging thanks to these developments. Recognizing shapes and features, being able to strip features, and being able to do manufacturability analysis: these are the basics of the infrastructure that a metalworking plant needs if it is ever to become an automated plant at all.
Product and Manufacturing Information (PMI)
It should be obvious: artificial intelligence is going to make the work process of metalworkers smarter and more efficient. As a result, the work drawings with all the tolerances are also going to disappear. Those Word and PDF files are currently created by humans from CAD systems. This is far from ideal. Because it is difficult to interpret by computer exactly what is in those unstructured documents.
Fortunately, a solution to do this accurately has existed for decades: Product and Manufacturing Information (PMI), which allows the designer to add additional information to the CAD drawing. If you use this instead of work drawings, then as a metalworker you have all the information combined to automate the decisions you need to make. You know at a glance: certain tolerances are required here, so I have to use that machine.
Arriving at the conclusion of this story. With digital transformation, of which we talk so much nowadays, being a metal worker you should start at the very beginning of the manufacturing plant. Upstream is what we call it. And all with very powerful form recognition, feature recognition, automated manufacturability analysis and PMI. To ensure that at any point in the production process you have all the information you need to make any decision automatically.
The result: less pressure, less dependence on people and an automated production process that is smart and therefore able to function autonomously. The good news is that the technology for this already exists today. We have named it Upstream Feature Management.
Estimating material consumption and determining purchase costs, go figure as an estimator within the metalworking industry. It is an increasingly complex and time-consuming challenge. But it can also be different. Smart digital solutions make it possible to simplify and speed up the quotation and estimation process. How? We outline the latest developments in this blog.
Why has estimating within the metalworking industry become complex?
Estimating in the old-fashioned way? Today is a big deal. Just consider estimating material consumption at the beginning of the process. The steps you have to go through have only become more complex.
This is primarily due to the fact that metalworking OEMs are increasingly demanding more from their suppliers. Manufacturers are responding to this, increasing the amount of different operations and types of materials. And that means more thinking and calculation for the estimator, because he has to take into account more details.
To prepare a quote, the estimator must take into account at least 3 factors:
Fluctuating material prices have a major influence on the quotation
The processor of the request is continuously confronted with fluctuating material prices. And not just a little. Prices have risen sharply in recent years. So hard, in fact, that the calculations in a quotation that has been open for two weeks may already be outdated by the time the requesting party agrees.
The days when an estimator knew a kilogram price by heart are over. It has everything to do with what is happening in the world right now. Scarcity, the pandemic, supply chain congestion and rising transport costs are just a few of the causes.
A lot of buying parts means a lot of searching
Another development that ensures that an estimator has its hands full is the changing demand. Because factories can handle more and more operations, it is becoming more interesting for the OEM to leave the entire assemblies or sub-assemblies with the manufacturer.
This can involve many purchase parts, from bolts to nuts and from hinges to wheels. Bring on the price, reads the question. This also takes extra time away from the estimator, because they have to do more and more research: who can deliver what at what price?
Order via a user-friendly customer portal
Once that’s all done, it’s time to order. That has also become a more intensive process. Suppliers of raw materials and purchased parts have been allowing their customers to order through customer portals for several years now. Self-service sounds convenient, but in practice it means a lot more work for the metalworker’s estimator. After all, he now has to find his complete order himself, working his way through the forest of article numbers and prices.
APIs provide a big part of the solution
Fortunately, further digitization offers a solution. Suppliers deploy an Application Program Interface (API). This means that as a manufacturer you do not have to go through all those customer portals, because by ‘talking’ to APIs you are connected to the systems of various suppliers. That is a big advantage: it offers a total view of the various suppliers and their prices and delivery times.
Thanks to this development, the concept of preferred supplier is also changing, because you can easily do business with a wide range of suppliers. And that is great in times of scarcity and changing prices. Because who can supply at all and what is the best price?
Automatically manage item files from different suppliers
Thanks to artificial intelligence, it is even possible to automate the ‘matching’ of article numbers. The computer does the work for you; it understands which articles belong together and can also take the management of article files off your hands. It makes it even easier for you to do business with a multitude of suppliers. This creates a more dynamic supply chain.
Exchanging data via SCSN
The developments continue. Increasing digitization of this process is taking place at a rapid pace. A facilitator of that progress is the Smart Connect Supplier Network (SCSN), a data standard that makes the exchange of information in the supply chain more efficient. This allows companies to share data more easily, faster and more reliably, without the intervention of an API. You simply communicate via your own ERP system.
This fastest growing data network for data exchange is a Dutch initiative; it is expected that by 2030 there will be a European standard for digital communication for the manufacturing industry. Anyone who does not go along with the increasingly digitizing supply chain has been seen. It’s digitize or die.
The real solution is fast estimating with smart quotation software
If you, as a metal worker, have all this done, your purchasing process will be extensively digitized. You have a range of options for smart ordering. In real-time you can see who can deliver what, who has what in stock and what the prices and delivery times are.
There is one but: supplying the input for a search, and prior to that estimating your material consumption, is still human work. You still have to manually enter the characteristics into the ERP system, based on the digital drawing, which you must therefore carefully ‘read’.
Forget this intensive and time-consuming task. Because also in this case there is a smart digital solution. There is now software that enables the estimator to automatically derive all geometric features from digital drawings. Simply upload 3D and 2D CAD drawings of parts and assemblies, specify material and quantities and the rest will be recognized and organized automatically by this tool. This way you know exactly which materials and parts you need, complete with all the detailed features.