Maintaining the trajectory for innovation and growth

20 February, 2023

Cuthbert adds that the Ukraine situation, material costs and inflation have been challenging. Moreover, although Webtec focused on forward buying to buffer issues as well as looking at engineering alternative parts, it still experienced some issues. “Our lead times increased to 16 weeks at the end of 2021 because of supply chain issues, but today we are back to pre-COVID lead times of six weeks,” explains Cuthbert. “So, from that point of view the Webtec team has done a great job in mitigating and building supply chain relationships. We have reviewed where our raw material suppliers are located geographically.

“We already source over 80% from UK and near Europe, however we are always looking to improve. For example, in the past we may have sourced a die cast box from China but now we look to the UK for the tooling and die cast. This makes more sense for a couple of reasons. We have greater control over the supply chain. After all, how do you explain to your customer that you can’t deliver because the lower price material has been delayed on a boat for three months? Also, it helps reduce our scope 3 emissions, which is part of our goal as we head towards net zero.”

Supply chain challenges

Steve Sands, head of product management & marketing, Festo, considers that change has been the only reliable constant in 2022. “The supply chain challenges, particularly around semi-conductor chips, has plagued virtually all automation manufacturers,” he says. “We all require many different chip devices to be assembled into a whole host of intelligent devices from sensors to controllers and communication devices. Supplies have consistently been late or only partially delivered and the costs have rocketed. Purchasing have worked tirelessly trying to globally procure the parts needed; and in the more severe cases, significant development engineering time has been invested to redesign existing PCBs.

“A good example of this is Festo updating our servo drives to reduce the number of variants from 21 to 6 by using a multi-protocol approach which increases availability. There are some signs of stabilisation and even increased delivery reliability: however, in many cases quantities are still restricted and are disrupting production. It will take the whole industry well into 2023 to recover to the point of ample, smooth and predictable supplies.”

Sands believes the invasion of Ukraine further exacerbated the supply situation, globally jittering energy prices and frightening a lot of the European population and industry dependant on Russian energy supplies. “These shockwaves have created an ever-greater need for agility and resilience,” he maintains. “Festo already had plans underway which have mitigated some of these affects, e.g. our extensive plans to reduce energy consumption in line with our sustainability objective of carbon neutral production and main offices by the end of 2023.”

Price volatility

Klaus Loeffler, marketing executive, Jubilee Clips, makes the point that during 2022 the high level of volatility within the metals marketplace was a major issue. “As a company whose products are reliant on the supply of metals, it was difficult for us to know precisely how to react to the fluctuations in prices when they were sometimes doubling or even tripling overnight,” he says. “However, most of our customers understood the situation and knew that we needed to reflect this situation in how we priced our products.