Evolving customer needs have led cutting tools vendors to include innovative and industry-specific solutions in their product portfolio.
by Mitalee Kurdekar
“Life doesn’t make any sense without interdependence. We need each other, and the sooner we learn that, the better for us all,” said renowned American psychologist Erik Erikson. One of the least talked about concepts in today’s business environment is interdependence. Yet, it is at the heart of any business. The cutting tools industry is no different. Not only is it codependent on its customers in the metalworking industry to grow, but it also shares a strong working relationship with them. They owe their existence to each other and prosper in the company of one another. Therefore, one notices a strong collaboration between players from either side.
While the cutting tools industry provides quality products, user-friendly service, on time delivery at best-in-class costs to its customers in the metalworking industry, they in turn continuously work with cutting tools vendors, apprising them of their evolving requirements and supporting them in their development activities.
Business Rationale
Globally, the cutting tools industry is large in size in countries like Germany, Japan, US and China. However, consumption in the West is not growing in line with their production capacities, owing to a slowdown in the manufacturing sector over the past few years. It is encouraging to note that, according to a recent report, there has been a slight improvement in consumption numbers over the year 2016, suggesting that the market is turning over and that it can now push for productivity improvements to serve the global markets better. So where does India stand in this kind of scenario?
If industry insiders are to be believed, the Indian economy is on the brink of big change with the Make in India initiative finally taking shape. While most economies are grappling under pressure, India presents a great opportunity for steady growth. Leading this growth are key industries such as automotive, heavy engineering, aerospace, defence, etc. Of course, the success of these industries is largely dependent on their use of capital assets. Seeing as how cutting tools help in improving the productivity of those very capital assets, their importance to the manufacturing sector is a given fact.
Brajesh Kumar, MD, Walter Tools India, states, “The internal demand for energy and railways is high in India. The aerospace industry is mostly export based and it is showing a really impressive growth in the past few years. While the automotive segment contributes to a major share of Walter’s business, Walter has established its dominance in other resilient segments like railways, aerospace, power equipment and so on. We have a strong product line and customised solutions for very specific machining needs of these emerging sectors. Our engineers bring world-class technologies to the customer through Walter’s Engineering Kompetenz promise.”
The Indian cutting tools industry has grown significantly over the past two decades, thanks to strong growth seen in important sectors like automotive as well as both heavy and light engineering. A similar growth in power generation, railways and defence production, largely in the Government arena and managed by the Government of India, has also been a major demand driver for cutting tools. In India, such products are largely classified into two important sub groups – High Speed Steel (HSS) tools and carbide cutting tools. Though carbide tools are growing in demand as compared to HSS tools due to increasing demand from engineering units, HSS tools have also picked up well in niche industries.
With changing market requirements like new work materials to tool, new technology to do multiple metalworking simultaneously and productivity improvements to beat the cost of investment, the cutting tools industry has stood up to the test by matching product developments with these changes. Industry players are quite confident that the revival in Indian user industries will drive business growth for them, even as various Government initiatives add to this momentum.
Recognise and Respond
Domestic cutting tools manufacturers are today witnessing tremendous competition, not only from local vendors, but also from some global players who have entered this lucrative Indian market. In this buyers’ market, the customer is the king. This raises expectations from suppliers in terms of providing technological superiority and productivity at a best-in-class cost. As a result, suppliers need to recognise customer needs even before they themselves realise them, and thereafter quickly respond with a suitable, new or tweaked product. Such a give and take drives business growth for both.
Jay Shah, MD, Tungaloy India, agrees when he says, “It is extremely important for us to understand the customer requirements, and for this, we are always in touch with the industry. Our team is always in close contact with end users to understand the new components and materials that are being developed.”
Explaining the process followed by his company, Gautam Ahuja, MD, Dormer Tools India, states, “Whenever we plan for a new customer, we position it to be one of the best in the world at that particular time. Customer surveys are done prior to this, in order to understand the upcoming needs of the customers, which could be in terms of improving the productivity, tool life or certain quality parameters.”
The cutting tools industry has a diverse customer base with varying requirements. Yet, they remain receptive to ideas and stay ahead by spending their development efforts researching on new materials, new processes and productivity measures. L Krishnan, MD, TaeguTec India, elaborates on this point, “As a cutting tool supplier, we need to be tracking several developments in the industry. Many of them, at the outset, may seem unconnected, but have an impact on our customers and in turn on our research and development strategies. If a manufacturer chooses to change engine material from cast iron to aluminium, it would be a different tooling development challenge altogether from the cutting tool supplier’s point of view. In aerospace, using more CFRP/composites for structures pose completely different machining challenges as compared to machining of aluminium alloys or titanium-based structures.”
Adding to this, V Srinivasan, SBU head, southern region, India, Minda SAI, suggests, “Volatility in business is a normal phenomenon. Customer specific tie-ups are needed as it enhances the commitment to a project.” Of course, it is equally imperative that customers be open to accepting new technology as developed by cutting tools vendors. As Srinivasan proclaims, “We at Minda SAI are highly quality conscious and therefore have invested in state-of-the-art manufacturing facilities across the country.”
Gradual changes in machining materials and targets for improving productivity of machining jobs are seen to be the biggest challenges in this industry. Both have immense influence on costs of machining activities per piece. Ahuja explains, “There is a gradual shift in the materials from alloy steels to light weight alloys having a strength similar to steel. These HRSA materials are difficult to machine, and require very sharp geometries and special grades.” For cutting tools, Dormer Pramet has special geometries, which can take low depths of cut, but still take a high feed rate, thereby improving the productivity at all stages of the manufacturing process.
On the other hand, Tungaloy too is constantly upgrading their portfolio. Shah points out, “In our catalogue today, more than 60% of the products are less than three years old, as we need to constantly keep developing new solutions for the customers. Customers are also looking at alternate solutions and look forward to our suggestions regarding the process improvement.”
The improvement in productivity is not restricted to manufacturing alone, but extends to other parts of the supply chain as well. Kumar describes his company’s strategy in this context, stating, “Walter is setting benchmarks with highly innovative products and services. Walter Xpress, for example, is an incredibly fast ordering and delivery service for high-quality special tools from Walter, Walter Titex and Walter Prototyp. With this automated software, quotations for all enquiries are calculated and provided with 3D models of special tools within 24 hours. Further, quick manufacturing and delivery are clear advantages of Walter Xpress.”
Collaborative Approach
In order to keep up, cutting tool companies are constantly required to track industry trends and initiate R&D projects accordingly. Krishnan explains, “Today’s customers are an enlightened lot – they are generally aware of total cost of manufacturing as opposed to just tooling cost. Most of the times, if we are able to demonstrate a satisfactory value proposition, customers are more than willing to migrate to more expensive solutions even if the cost of individual tools may be higher. Being an MNC with presence in several geographies, we are in vantage position to witness/experience these changes in different geographies at different times, thus enabling us to prioritise our product development strategy.”
VP Shukla, senior VP, Walchandnagar Industries, acknowledges this collaborative approach, when he says, “Cutting tool users and suppliers have to work hand-in-hand for optimum results. Joint discussions for the job requirements and subsequent trials ensure that both parties benefit. As a made-to-order product company, our company has to constantly evolve different machining methods and this is done with active participation from our suppliers. Even though some of the tools are costly, cost per component turns out to be less. Using premium tools has led to superior quality in terms of accuracy, surface finish etc., and better productivity.”
Farrokh Cooper, chairman & MD, Cooper Corporation, echoes these sentiments and confirms, “At Cooper, we work closely with all our suppliers to decide the cutting tools as well as machining strategies to get the desired output and quality requirements of components. We are normally working on getting the desired cost per piece with desired cutting times, resulting in optimised machining methods.”
Overall, the process seems to be working wonders for both sides. Given the transparent exchange of ideas and discussion of pain points, there is a definite degree of value being brought to the table. With a common goal in sight, it is easy to see how this healthy partnership is leading Indian manufacturing into the big league.