It's not your father's packaging machinery company - or is it?

The look of a packaging machinery company is changing. Where once they resembled machine shops, some now resemble IT departments. I first became aware of this about 5 years ago on a tour of some Italian packaging machinery companies, some of whom neither made parts nor assembled machines. Their businesses were built upon the core skills of 3-D modeling, design and software development. This same trend is catching on around the world.

Many packaging machinery companies began as a custom machine shop that developed a one-of-a-kind machine that evolved into a repeat product. Over time, more machines were developed and the former job shop turned into a manufacturing company. The owner's ingenuity and the machinists' skills brought success. Later growth may have been built upon a focus on sales and improved manufacturing efficiencies. A new and enlarged building and the acquisition of more automated and specialized production machine tools may have followed. Customers and suppliers would have been impressed walking through these facilities and watching the whirring machines creating piles of metal chips and shiny custom parts.

Initially these machines were almost exclusively mechanical with possibly a motor and a few buttons. Later some limit switches, relays and magnetic clutches may have been added. These were attended to by someone in the shop with a bit of electrical wiring experience. But as machines became faster and more complex and as customers began to ask for PLC's, machine builders established a relationship with a local systems integrator to design circuitry, write software and build control panels that were added to the mechanical machines. Over time, these functions were brought in house and an electrical department may have become part of the organization. CNC machine tools were acquired, reducing the importance of the highly skilled machinists and CADD systems may have been introduced to assist the designers. Still, a tour through the facility felt much like a visit to a machine shop with parts coming off the machine tools and being assebled by fitters and wired by electricians in the central assembly hall.

Then in the 1990's some new technology came along. Servo motors, higher powered PLC's, digital networks, PC's and instrumentation drove a third generation of machines that were smaller, lighter, faster and more flexible than their predecessors. Attempts at adapting these technologies to existing machine designs, with or without the help of an experienced systems integrator, met with limited success. Clean-sheet-of-paper design based upon concepts of mechatronics did much better.

These 3rd generation mechatronic machines required fewer moving parts, fewer custom parts, and lots of software. Three dimensional solids modeling software replaced conventional CADD, and designers could build working virtual models of machines inside their computers. A trip to the lower levels of PackExpo reveals that most any component of a machine may be purchased from someone's standard parts catalog. With much manufacturing going overseas, machine tools and machine shops are standing at the ready to build any custom parts that may still be required. The machine manufacturer no longer needs to make or assemble his own parts. Doing so may, in fact, put him at a competitive disadvantage.

The skills needed today are solids modeling, 3-D design, mechatronics engineering and software development. These skills may be exercised from an office that looks like and behaves like an IT department. The machine builder of today looks a lot like the systems integrator of yesterday.

There are some real implications to this for the machine builder, his suppliers and his customers. The company's value has little relationship to its capital assets of facilities and equipment. A tour of the facility is about as exciting as watching somebody prepare a document on a word processor. The company may not look like a machine manufacturer at all. Vendors may have difficulty deciding which discount schedule to offer, trade groups may wonder if the company meets their membership criteria and customers may wonder if the company really builds machines.

Look around your company. Does it look like your father's machine company? Or, is it taking on the more subdued look of companies that have come to realize that their core technical competencies lie not in parts making or assembly but in mechatronic design and software development?

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Comments You are right on the design process but once the hardware comes together there is still a need for connecting the product variablity with the machine reality. Skilled assembly and debugging is not a lost art and continues at the best of companies. Posted by: David Madison on August 27, 2007 The Italian model for manufacturing packaging machinery or anything else was always different from that in the US or most other countries. They have always outsourced specific functions to small specialized suppliers even to the point of final assembly. Advances in controls technologies have indeed changed the packaging machinery business significantly, but US machinery manufacturers are not radically changing in the manner you describe. Posted by: Bob Kelly on August 27, 2007 Keith, Your article is very interesting and my company has reflected the trend that you discussed by focusing on the design and engineering aspect of our equipment since we founded the company in 1999...until now. As a result of expansion of our product line and the number of different configurations we've developed to provide our customers with maximum choice, we are starting to move in the opposite direction. We are not reducing our engineering or design capacity, but we are doing things like increasing our in-house machining resources with CNC systems so that we have the flexibility to produce what customers require as they require it without the inefficiency of high inventory. By increasing in-house resources in terms of capital equipment, right here in the USA, we feel that we are developing a competitive edge. It could be that our growing company just happens to have special circumstances that make this shift possible, or it could be that we're on the leading edge of a new trend. Our hope is that changes in the global economy may be taking a turn that will favor US manufacturers and their investments. We will definitely be paying close attention to this development. Posted by: Steve Gunnerson on August 27, 2007 Yes, that about sums it up, except that good machine designers are still very hard to find. They are a rare breed. Anyone can be trained to draw lines and pretty 3-D pictures, but real design innovation and skills are rare. European training still produces better designers. Posted by: Paul Zepf on August 27, 2007 Kieth, Thanks for putting together such a good article. The company I work for has experienced many of the same changes you have described considering machine innovation. I am curious if anyone knows what new software/programs were out there for 3-D images. It seems that we are somewhere in between "our fathers machine company" and an "IT department" with our abilities. Any help would be great. Posted by: Ryan on September 5, 2007 what customers require as they require it without the inefficiency of high inventory. By increasing in-house resources in terms of capital equipment, right here in the USA, we feel that we are developing a competitive edge. Posted by: paper machines on June 22, 2008 starting to move in the opposite direction. We are not reducing our engineering or design capacity, Posted by: paper machines on June 22, 2008 Post a comment (If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.) Name: Email Address: URL: Remember personal info? Comments: (you may use HTML tags for style)