Abstract
Consolidations Encourage Management Restructuring
In the process of providing one-stop-shopping for customers, some
manufacturers have undergone a number of consolidations and partnerships.
However, it is a challenge for such companies to develop and then to maintain
a better collaboration between the fragmented divisions. In some cases, the
consolidated companies that have been competitors in the past are now working
under one parent company. In instances where products are complementary, a
greater synergy can be achieved. However, when the products are similar or
competing, manufacturers are facing the need to develop a number of strategies
in order to reach greater profitability both for the divisions and for the
company on the whole.Such consolidated companies maintain multiple product
lines and, over time, evaluate which of the products fits the needs of the
customers. This can lead to a potential elimination of one of the product
lines. Consequently, the elimination of a product line can result in loss of
some customers, because they may not like the new product line, or may not be
aware of a change in the brand name that they are accustomed to purchasing. In
addition, consolidations among the manufacturers have the potential to
threaten distributor sales. Distributors may not be considered large enough
buy products from the big company thus some of the distributors may be lost.
The cancellation of a product line could also cause a distributor to lose its
customers, and make them less likely to buy other products from the company
because these could be discontinued too, over time.
Original Equipment Manufacturer's expand Need to Increase Productivity and Maximize Profit Forces Manufacturers to Develop Strategic Technology Solutions
Effective workflow management techniques need to be employed along with the
motor and gear reducers to ensure maximum efficiency and return on investment
of the gear train systems. Especially in the material handling industry this
challenge is very prominent. If the workflow management techniques are
inefficient it results in increased MRO (maintenance, repair and operation)
costs in various applications. Automation systems that facilitate connectivity
between processes also need to be employed for informed control of machines.
For example incorporation of position and speed sensors that provide feedback
to the controllers and incorporation of BUS(expand) systems and automation
equipment like HMIs(expand). Even though high costs may be involved in setting
up automation systems they ensure operational efficiency thus bringing down
the total operational costs. The selection of work flow techniques that suit
the gear drives and motors can often be a challenge to OEMs, also it is
important for manufacturers of power transmission systems to provide solutions
that impart maximum value.
OEMs Relocating to Asian and East European Countries Constricts Domestic Demand for Enclosed Gear Drives and Gear Motors
From the early 1990s there has been rapid growth in Asian and European
countries. In Asia, China, Malaysia, Thailand, Indonesia, and India are
becoming dominant participants in the global economy. The economic
reconstruction of East European countries like Poland, Hungary,
Czechoslovakia, Bulgaria, Romania, Albania, the Baltic States and Slovenia has
led to the shift of world focus from the United States, Germany, United
Kingdom, and France towards these countries. The Asian economy has shown very
high growth in the past and this has prompted most of the OEM sales to occur
outside North America. The OEMs are seeking component sources close to the
countries where their facilities are located. Domestic manufacturers are
finding their customer base shrinking as more companies move their
manufacturing sites outside North America. This trend was seen in the 1990s
and the early 2000s. The future trend is expected to have a better growth in
the enclosed gear drives and gear motors manufacturers in North America
because most of the OEMs which could shift to emerging nations have shifted
there, and the shift is now expected to stop. However the enclosed gear drives
and gear manufacturers are still finding it difficult to compete against
global manufacturers, especially in the worm gear reducers market, who are
able to sell at a lower price because of the strength of the U.S. dollar. In
addition, manufacturers face the challenge of competing against some domestic
participants that private label foreign products in North America, thus
stealing the customer base from established manufacturers.
View Cart
