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I wanted to provide you with an update on the impact the current economic climate may have on your future manufacturing & industrial automation projects.
Our industry is experiencing continued volatility in both the price and lead times of automation equipment. Here at iconsys, we want to ensure minimal risk and disruption on potential projects you may be considering in the next few years.
There are continuing knock-on effects from the pandemic to manufacturing capacity, added to sanctions against some manufacturers, and increased demand for automation solutions post-pandemic.
As a result, normal supply chains are not expected in our industry before 2024 or even 2025.
Whilst most manufacturers have brought on additional capacity to run 24 hour production and weekend production runs, component shortages are still the key obstacle.
Many different products are affected, particularly anything with an ethernet chip. These are now often on lead times over 6 months.
A recent example …
Working with one of our transportation clients recently, the hardware required on a new project came with a 40 week lead time, which unsurprisingly did not work for the client. In the end, we were able to develop a different solution.
The same hardware 2 years ago would have been available off the shelf.
2. Price volatility
As I mentioned in my November 2022 update, prices are tending to only go one way due to the scarcity of materials, high utility prices, and increased shipping costs. And manufacturers are still passing on price changes every quarter, rather than annually.
As an example, stainless steel saw huge price increases throughout 2022. Whilst it is expected to tail off a little during the first half of this year as the global economy weakens, it’s then expected to stabilise and possibly go higher yet again as the the economy improves later this year.
We are uniquely positioned as a platform-independent solution provider to help you: we are in constant discussions with our platform partners so we can be agile and adapt fluidly around these market forces.
Increasingly, a principal topic of discussion with clients is the level of energy cost savings we can bring to your automation projects to make sustained cost reduction.
Coupled with this, there’s an increasing narrative around energy storage options to help bring further cost savings – is it something you’ve considered yet?
At iconsys, we take pride in thinking ahead and we are best placed to see alternative routes to achieve project plans whilst minimising the impact on your business. Working with our extensive supplier base puts us in a unique and very strong position to help you.
If we can be of any assistance to ensure your projects are achieved in a timely manner, please let me know (nick.darrall@iconsys.co.uk or call on 01952 607300) or contact your usual iconsys contact. We’re here to help.
Nick Darrall, Managing Director, iconsys
10/09/2024
05/08/2024
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