Round Table Price Pressure

On Wednesday November 28th NAG member and manufacturing (among many things) company Oerlikon hosted a round table on the topic of price pressure. The round table was initiated and organised by the NAG in the context of the top sector HTSM program.

Aim of this round table was to share thoughts and experiences in dealing with the ever increasing pressure of pricing policies by the customers in the manufacturing industry. Different options to decrease production cost and stay competitive were on the program; outsourcing, robotization and cost & value engineering. About 15 companies form all over the aerospace &airports manufacturing industry were present and actively participating in the program.

First Richard van den Dungen of Oerlikon introduced [180810 Oerlikon Eldim Company Presentation] us to the host company. Oerlikon has experience with both outsourcing production – to Debrecen, Hungary – and robotization production lines at their facilities in Lomm, The Netherlands. To introduce the attendees to the topic an overview of competitive countries and the current state of the manufacturing market was presented. Then Richard elaborated on the reasoning behind the decisions to outsource and/or automate production facilities. Not surprising, labour cost, technical competitiveness and customer demand were among them. Please find his presentation here. [181128 NAG Bijeenkomst]. All came with specific challenges. One of the surprising conclusions was that the share of labour cost in the total production cost has less impact these days with rising wages in countries such as China, Poland etc.

After a nice lunch and a tour around the production floors, Peter van Lieshout of KMWE Precision took us through the company’s approach and considerations [ NAG Pres. 28 Nov 2018 Rnd Table Discussion Price Pressure Aero Market] for outsourcing production to Malaysia and Turkey. Customer demand, local presence and labour cost were among the drivers. Then Peter further explained the reasons for investing heavily in robotization and automation of their plant in Eindhoven, The Netherlands at a time when markets were at a low during the crisis. Further we were explained the impact of a cross sectoral approach mixing semi-conductors, aerospace and LS&H markets, to name a few.

Finally Leo van Geffen, of ontwerp- & adviesbureau Intueri, introduced us to the benefits of Value engineering. Value engineering focuses on the value of a product, looking at both design engineering and cost engineering. By thinking retrospectively about the design and the use of a product, involving both cost- and design engineers in the process, unnecessary costs can be eliminated.

Afterwards we had the opportunity to discuss price pressure and other topics in a social setting.

Thank you Oerlikon for making this possible!

This event is made possible by a topsector HTSM TKI grant.