By Stuart Carlaw, Chief Research Officer, ABI Research
IMTS 2022 was a very different event compared to IMTS 2018. A rather obvious statement given the intervening COVID-19 years and ongoing macro issues associated with war in Ukraine, energy costs, and global inflationary pressures. However, the tea leaves our analysts read at the event signal a community that is robust, is beginning to truly embrace digital transformation as a force multiplier, and is setting itself up for a changing world.
So, what does that mean in terms of tangibles? There were several clear trends that were evident in most conversations. The most prominent of these was the issue of labor shortages. The overspill from COVID-19 shutdowns and the trend to reshoring means that the biggest risk to productivity in many instances is the availability of skilled workers. This is driving companies toward technology as a stopgap that could turn permanent. Key technology beneficiaries are the robotics industry in the form of cobots, which were near enough prominent on every other stand at the show, and to a lesser degree the longer-term prospect of Autonomous Mobile Robots (AMRs).
At the other end of the scale, it was interesting to see typically conservative industries such as grinding and finishing looking at replacing human capital-intensive low-skilled processes with automated operations.
The second major trend seen at the show was that of a more realistic and practical attitude about technology implementation. The focus was much more on the quick wins from low-hanging fruit rather than long-term visionary ideas. Limited, targeted implementation built around clearly ring fenced and structured projects with definable Return on Investment (ROI) parameters were very evident with projects spanning from reduced parts and inventory scanning to improved in-line part inspection and machine tending. The message received was that ROI for digital transformation projects is now measured in the 6 to 8-month window and that simple projects attuned to “where the rubber meets the road” is the sweet spot for digital transformation success.
The third major trend to pay attention to is that the market landscape and hierarchical structure is changing. The easiest part to see is that there are now significant differences in the submarkets within the wider community in terms of their appetite and velocity toward digital transformation. The differences between process and discrete industries were profound and even within these broad categories, there are spectrums of differing adoption levels. You cannot view an automotive story the same as a Fast-Moving Consumer Goods (FMCG) story. This means that as a supplier, one must be nimble, identify the key success criteria that are common, and indulge in deep understanding of the very specific market peculiarities of each defined regional and market segment.
The second consideration regarding the landscape has to do with the supplier community. The prevalence and influence of new market entrants in new market segments, such as Nokia and Amazon Web Services (AWS), was clear to see. They are now part of an increasingly disparate supplier ecosystem that is sometimes creating conflicting technology messages and approaches that risk slowing digital transformation, rather than speeding it up. Two things spring to the fore. First, the market, at some point, will coalesce around commercially-driven multi-company partnerships that will be afforded the gravity of scale. Second, the message to the supplier industry is to focus on solving problems, simplifying the equation, and speaking the language of the customer.
Lastly, it was evident that companies attending IMTS exhibited a very different set of priorities from those at Hannover Messe. Sustainability and energy consumption were one of the foremost contemporary issues at Hannover Messe. Although a consideration, they were much less of an issue and much more of a long-term consideration at IMTS. This could be largely attributed to the differences in energy policy and exposure to the Ukraine war between the two regions, but also the evolving pressures of labor shortage that have emerged in the period between the two shows.
In summary, digital transformation is gathering pace. No matter the trend that is driving the need for change, it is happening. The dominant trends might change and differ, but the underlying benefits of digitization that afford the flexibility to address future issues at the same time as addressing real world issues of today will mean that any investment now will likely bear future unseen benefits in addition to immediate impact. The train is still in the station but is preparing to leave. Time to board!
For the full ABI Research report IMTS 2022:11 Key Takeaways, compiled by seven ABI go to: Whitepaper | IMTS 2022: 11 Key Takeaways (abiresearch.com)