Hardinge Grinding Vice President and Kellenberger Grinding Machines CEO Urs Baumgartner (left), Fives Machining Systems Inc. President and CEO Steven Thiry, Index Corp. President and CEO Tom Clark, DMG MORI Executive Board Member Björn Biermann, and Mitsui Seiki USA CEO Robb Hudson (right).

During the EMO Hannover 2017 trade show – an event that drew more than 2,200 manufacturing technology exhibitors and 130,000 attendees – Kennametal and GIE Media, parent company of Aerospace Manufacturing & Design, gathered leaders of machine tool companies to discuss 2018’s outlook and Industry 4.0.

What markets have you excited for 2018 and beyond?

“We’re seeing tremendous strength in the aerospace sector, particularly with the tiered suppliers, and especially with the tiered suppliers working on engines.” — Fives Machining Systems Inc. President and CEO Steven Thiry, www.fivesgroup.com

“It’s generally a very optimistic market. Our main market outside of our domestic market in Japan is aerospace, and with a record backlog or aircraft yet to be delivered and engines to be built, we’re very optimistic. And we’re already looking forward to 2019 production because for 2018, we’re largely sold out for many of our large, application-specific machines.” — Mitsui Seiki USA CEO Robb Hudson, www.mitsuiseiki.com

That optimism, however, is not universal.

“Boeing has notified its supply base at the last supplier conference that we have enough capacity to fulfill the current build rates. And Boeing now has announced that it will not go beyond the 50-to-55 planes per month build rate. There were plans to go to 60 or 70, which has trickled off.

I am not really optimistic beyond 2017 and 2018.” — Starrag Group Vice Chairman Frank Brinken, www.starrag.com

Others disagreed with Brinken.

“We’re heavily focused on – and we still remain very excited and bullish – on aerospace because we feel there’s still a lot of uncertainty in the marketplace on the supply chain. It’s also very evident that around the world, defense is starting to ramp up. That’s leading to more and more specialty applications for unmanned aircraft, sophisticated surveillance equipment, improved and enhanced missile systems, and guidance technologies. — Mitsui Seiki USA CEO Robb Hudson

“Just 1% of aircraft components are made in China. If you go 15 or 20 years back, it was the same for automotive components. I have no doubt that in 5, 6, 7, 8 years, they will make 30% of aircraft components worldwide. Maybe not for Airbus or Boeing but for their own aerospace industry.” — WFL Millturn Technologies Board of Management Member Guenter Mayr, www.wfl.at/en

However, optimism for the market may not translate into more machine sales.

“Many of our machine tools that were put into the market 10 or 12 years ago, we are repurposing with newer technology to where their output is 15% to 20% more than when they were new. That’s a very different change in the industry where if you go back many years ago, when you rebuilt a piece of equipment, you brought it back to new. Today, we bring it back to beyond new because of new technologies. It’s causing many of our customers to rethink their CapEx approaches. — Fives Machining Systems Inc. President and CEO Steven Thiry

Changes to the global economy had been the cause of great concern in early 2017, but many of those worries have eased in recent months.

Mazak Corp. Chairman Brian Papke (www.mazakusa.com) says President Donald Trump introduced uncertainty in early 2017 as global leaders assessed how his America First policies would impact trade barriers, immigration, defense spending, and other topics. “His bite is sometimes a little softer than his bark. And I think we’re coming to realize this.” DMG MORI Executive Board Member Björn Biermann (www.dmgmori.com) adds that the European market looks healthier than it did at the beginning of the year. With nationalist political wins in Great Britain, there had been some fear that elections in the Netherlands, France, and Germany would bring anti-trade policies to the mainstream, but more centrist candidates won each of those elections. “There was a risk that the European Union itself would break up, and this would have a negative impact for customer demand for the whole European Union. But currently, there’s no concern that the European Union market won’t be stable.” Index Corp. President and CEO Tom Clark (www.indextraub.com)

says the increase in global stability is improving confidence. “When you look at our customers deciding on buying an expensive piece of machinery, they need to have the confidence three and five years from now that they can fill that machine. What we’ve seen over the last six months is a renewed confidence that there’s going to be a business-friendly climate.”

With the growth of Industry 4.0 and the Industrial Internet of Things (IIoT), how important is machine connectivity?

“This is an area that can only continue to expand. The more data you have, the more you can mine that data, the more you make good decisions.

In aerospace, there are a lot of constraints on how you can pull that data out and how you can access it. You can’t simply connect everything as readily as you can connect everything in your office environment.” — Fives Machining Systems Inc. President and CEO Steven Thiry

“I don’t think most companies are ready for the full IIoT solution at this stage. But they are ready to start. We have furnished thousands of adapters for machines.

We’re going to see many more different types of solutions.

This isn’t something that could be avoided. We need to embrace it and keep moving ahead.” — Mazak Corp. Chairman Brian Papke

Along with that optimism were some words of warning.

“This data creates a lot of noise, and that noise can create a lot of distraction. If you don’t know what to focus on to prove your manufacturing processes, that noise gets in the way. So, you have to be very, very careful in what it is that you’re looking at, what you’re analyzing, and what corrective actions you’re going to put in place…

We’re facing fewer and fewer capable people at our customer sites that are able to actually act on the data they’re collecting and make sense of it.

It should fall more in the industrial control suppliers – Fanuc, Siemens – to help us standardize and come up with a standardized solution. Because if we rely upon our customers with the skills gap that we’re facing, we’re going to end up creating some severe bottlenecks in manufacturing. And instead of our customers enjoying increased spindle uptime and productivity, it’s going to drive it in the other direction.” — Mitsui Seiki USA CEO Robb Hudson

“Industry 4.0 is a great marketing vehicle. In all of our companies, we all employ a little Steve Jobs who thinks that he can create instead of a machine tool company a software house. But our main purpose is still producing parts and components and making chips. So, we as management have to be careful to divide what’s possible from what makes sense and what our customers are willing to pay us for. That’s the only thing that counts.” — Heller Group COO Manfred Maier, www.heller-us.com

“The collection of data is overwhelming. Many people are simply saying we’ll collect the data and try to figure out what to do with it. However, think about the importance for productivity to be able to find a mechanism to analyze and make good decisions. The speed and productivity of machine tools dramatically increased over the last 20 years, but I would suggest there’s a bit of a lull in performance.

Why is one machine more productive than another? Why is one operator doing more than another operator? This is where the data comes in. — Index Corp. President and CEO Tom Clark

“The customer will expect that we also give them guidance or a clear solution on how to execute this way. Our origins are that we are machine tool builders. We aren’t software companies. All of this digitalization will be a combination between machine tools and software. No one will change from a machine tool builder into a clear software company.” — DMG MORI Executive Board Member Björn Biermann

“It’s not unlike where the PC industry was in the late ’80s and the early ’90s where you had multiple different platforms. Today, you buy a PC and they all hook together. They’ve standardized the systems. And we don’t have an industry standard. That makes it more difficult No. 1 when you’re hooking multiple machines together; and No. 2, even within given companies, one factory to another has a different system. So, we spend almost as much time looking into our customers’ systems as we spend putting systems into our machines.

Collecting the data on our equipment is not that challenging to us. It’s how do you get it hooked together and make it accessible in a common way.” — Fives Machining Systems Inc. President and CEO Steven Thiry

“Global, international companies are interested in data collection. Small companies are not interested at all. Some of them have a certain fear that they may have to pass their data to their customers.

We’re working with our biggest competitor, United Grinding, to design standards. That’s the way to develop an interface between the machine and the management information systems.” — Hardinge Grinding Vice President and Kellenberger Grinding Machines CEO Urs Baumgartner, www.hardingeus.com

“Data collection is nice, but making money out of the data is even nicer. And nobody has shown a solid business case on how we can make money out of it.

Who owns the data?

As the machine tool builders, we want to have the data.

What about leased machines? Is the operator the one who owns the data? Or does it belong to the leasing company?

We see a lot of interest on the customer side. But then we say you have to pay for it, and they see it as a freebie.” — Starrag Group Vice Chairman Frank Brinken