In earlier days of the automobile industry and other manufacturing industries, the responsibility for establishing manufacturing processes and specifying tools and machinery was, for the most part, retained by the producing company itself. Some industries today still prefer that vertical integration and continue their extensive manufacturing engineering efforts. Many of the tools used in those circumstances are adaptations or modifications of standard devices and standard machine tools that are readily available.
Driven by demand for higher and more efficient production, it became increasingly cost-effective to customize and even specify custom devices right from the beginning. There are numerous operations that could be performed only marginally on standard machines, but much more effectively on custom machines. There are machining operations that would restrict the product designer if standard machines were mandated and would severely limit the freedom to innovate.
The special machine tool companies in Europe (with Germany being the most dominant) and in the U.S., are, with rare exception, publicly owned, but are nearly all descended from smaller, family-founded and operated companies. The American engineer/manufacturer has a reputation for being imaginative and driven toward simplicity in devising the winning competitive solution. Their German counterparts have a reputation for designing beautifully complex mechanical devices, which can seem like the objective, rather than the desired, simple solution. They are also known for their high-quality craftsmanship. The Japanese have the reputation for improving on what they have seen, done, or purchased. In more recent history, their imaginations and resulting creativity have become an important factor in their success.
In Japan, the well-known machine tool companies are either spin-offs of the auto companies or are still a part of or very closely related to those companies. The globalization of business in recent years has lead to consolidations and foreign business ownership. The U.S., Germany, Italy, and Japan are the world leaders in special machine tools. France, Spain, and others contend on a smaller scale.
As is typical in family businesses, the managing owners were the experts in their field, as the knowledgeable and passionate vintner in a family wine business, and had a vested interest in the ongoing success. In many cases, these companies were initially “Tool and Die Companies.” At first they provided simple tools, basically taking direction from their customers. At times, the customer even provided the engineering for the tool or die project. Many small tool companies still operate today, serving other manufacturing industries, including auto part suppliers, much like the larger ones did in their early history.
Until recent years, the American special machine tool industry has been the leader in supplying its products to customers worldwide. It has now been overtaken by the German and Italian machine tool industries, even in the U.S. market.
As the momentum built, specialty industries such as electric motor and controls, hydraulic systems, and of course, computer industries, recognized market opportunities and targeted product development to machine tool builders specific needs. Collaborative research efforts were undertaken with universities.
These small companies began the process of improving on what they were being asked to do to be more competitive. They could offer an alternative solution and get an order that otherwise would have been given to a lower bidder for the equipment as specified. Soon they became more expert than their customers. Their customers’ efforts were diluted because other responsibilities consumed part of their time and efforts and their family fortunes were not a stake. They had different priorities.
Simple tools evolved into mechanized tools, increasing reliability, reducing the number of operators, space required, and cost, as reflected in the final product. These companies were fast on their feet in offering the next technological step forward on each competitive exercise to beat the competition and get an order. They were true entrepreneurs. Risk was always present and potentially deadly, since an order value could exceed the company’s equity.
Lead by their manufacturing engineers, the automotive customers began to realize that important benefits could be gained in the free enterprise acquisition of special machine tools. The resulting competition accelerated the evolution of manufacturing technology and its hardware. The providers of the equipment supplied competing customers and other industries as well. Competition among suppliers, competition among users, and cross-pollination to unrelated industries and to those in the other industrialized countries leveraged technological advance universally.
In the earlier example of the chainsaw piston production machine, the buying organization requested quotations from special machine tool companies in various industrialized countries to compare costs. They asked for proposals for manufacturing processes and equipment to produce their pistons. In effect, these inquiries put to work the most experienced, competitive, and clever manufacturing engineers in head- to-head competition.
The result was a different approach from each of the respondents, one of which would be the successful bidder. A second builder of similar engines then benefited, as the successful machine builder now had greater specialized experience and product to sell. It could be an enhanced version of the first generation machine, incorporating improvements from lessons learned. Following that, the first buyer was able to get an even more advanced version his second time around.
The technology advance spiral is apparent. Certain unique features and characteristics developed on these machines would be applied to other projects. They would involve other customers in other industries and countries as they fell into place in the imagination of the machine tool entrepreneur.
The output of imagination in a specific area of endeavor is typically directed at solving a particular problem in isolation for that area - enterprise or industry. However, when that output (idea) becomes apparent to others, it will inspire its use or its variation’s use in other areas for their own specific uses that were completely off the radar screen of the originator, even in other industries or other countries. The value of that first effort has begun to multiply. That value can be further compounded when two or more totally unrelated ideas are seen by another uninvolved originator in any industry in any country. That originator may then imagine concepts that foster the integration of those ideas or their variations for completely new outputs of human imagination.
The subject industry, an incubator of innovation in its own right, is in a unique position. It supplies imaginative solutions to numerous and different industries in many countries and against worthy international competitors. As such, it is part of a network that exposes it to those industries, countries and competitors and their diverse solutions to their diverse problems. That network exposure is an important resource that leverages local imagination, serves as a competitive advantage if utilized effectively, and is a driver of technological advance.
For the buyers of manufacturing process techniques and the hardware to implement them, the experience and imagination resource available to them in the special machine tool industry is limited only by their ability to evaluate the responses to their inquiries.
Those companies choosing to continue to do their own manufacturing, engineering, and special machine tool development and those that feel they are better able to dictate process and hardware concept to the machine builder will not benefit as much from this upward technology spiral. They could soon find themselves inbred, myopic, and stagnating in relation to their competitors as their primary resource is within their own walls.
The business relationship described does not typically involve the engineering and production of component parts of the buyer’s products. Rather, this relationship provides the original, intellectual products of manufacturing and process expertise that will be manifested in their own hardware and software products. This relationship certainly cannot be unique to the automotive companies and their special machine tool sources. Most other product circles, such as semi-conductor businesses, chemical and plastics businesses, and even software businesses, will utilize the equivalent supporting kinds of businesses. The same benefits, not the least of which is the Yankee ingenuity “find a way” component that produces dynamic value, are certainly among their objectives.
Some customers’ engineers are more reluctant than others to buy a new approach, due partly to “not invented here” pride and also due to risk aversion. The risk of something that they specified and purchased not functioning properly jeopardizes their job and reputation and promotes conservatism in selecting an approach. Continually finding and employing new and better ways does involve accepting some level of risk.