A new lease of life for spares
Several factors are currently characterising the market for tobacco industry spare and wear parts. These include the requirement for old equipment to last longer, for high-quality spares and, in turn, for shorter lead times on the delivery of these parts as customers reduce their own stocks. But how do the major players in the spare parts industry see the current state of the sector?
Adriano Fanzellu, regional sales manager at Molins Tobacco Machinery, is enthusiastic about how his company is doing. “As everybody is aware, the tobacco industry is operating in some very challenging times, but we feel that due to this, the spare parts market is buoyant,” he said.
Molins beats services sales target
“Customers have seen that a quality service package is a must, and with recent changes we are the ‘go to’ place for customers’ needs. As customers become ever more cost-focused, we are seeing more of a shift towards maximising the return on their current assets, whereas in the past the customer would have purchased new. Molins’ machinery has always been known as the workhorse in the industry and can work in the harshest environments. Factors such as this have caused Molins to experience healthy sales, and we actually achieved our services sales target for the year by October.”
In addition to this, Fanzellu is also seeing increased services sales year-on-year as customers optimise their uptime and look increasingly to Molins to hold essential stock on their behalf. “We are working closely with our customers offering intelligent stocking policies allowing customers to operate on a leaner basis using Molins as a one-stop-shop partner for all of their services and spare parts needs,” he says.
Fanzellu says that Molins’s policy has always been to offer consistently high customer service levels through its global reach and extensive field service team and to look at possible ways to improve its service offering. Over the past twelve months, initiatives have included introducing a dynamic stocking policy to ensure it has the parts its customers consistently require in stock at all times; offering batch pricing for customer quotes to allow them to choose the best value solution; and increasing customer service visits focused solely around increased machinery utilisation (as opposed to just spares) – something which has been received very positively by customers.
“Molins is constantly developing, for its full portfolio of machines, enhanced life parts and upgrade kits specifically targeting high wear running spares areas,” continued Fanzellu. “Molins takes a proactive approach to obsolescence with a dedicated team at Molins constantly reviewing electrical components which have a relative short life cycle. To keep machines up to date, we produce dedicated electrical kits with our PLC kits being very popular for a wide range of machinery.”
Promising times for Spikker Specials
Another company that is faring very well as a result of the uncertain economic situation is Spikker Specials of the Netherlands. The company focuses on premium machinery parts – ideal products when tobacco companies are trying to make existing equipment last as long as possible. The ‧company believes that the quality of its products means that they can outlast ordinary parts by up to seven times; although their price is generally less than twice the standard. According to Hans Schijfs, sales manager at the company, this is partly because of the raw materials that Spikker Specials uses, which include powder-metallurgy steel, ceramic, carbide, in some cases diamond, to ensure that their wear-resistance will be second to none.
Over the years, Spikker Specials has worked hard to achieve the success it now enjoys in the tobacco spare parts sector, allowing it to take full advantage of present circumstances. According to Schijfs, the company knows its customers’ equipment well, which helps it supply tailored solutions rapidly.
Speed is now one of the main prerequisites for spares suppliers if they want to survive in a cut-throat market. Customers are looking to reduce the stock of spares they keep in-house in order to reduce costs, so Spikker must be able to supply any part quickly. The company now considers itself a business partner to its customers rather than just a supplier. “Nowadays, you can’t just sell a part,” says Schijfs. “You must supply tailored solutions and understand the needs and business of each customer, so we now supply complete format- and size- change kits to help tobacco manufacturers cope with the present large variety of pack designs.”
In these days of rapidly-developing technology and IT, there is also a need to keep abreast of how technology is affecting the provision of spare parts, so Spikker Specials is also remaining at the cutting edge of scientific development. The company recently updated its electronic data-interchange system to be able to communicate with customers’ business-management software. According to Schijfs, communication with customers and the ease of it is of key importance in these days of lean staffing.
In terms of the future, Schijfs predicts that the next 10 years will be a promising era for Spikker Specials, but uncertainty about how the global economy will look ten years hence means that it is difficult to make forecasts in the longer term. For this reason, the company is also looking into other industrial sectors that might require its high-quality spares but, as production speeds in most other industries are slower than those in the tobacco sector, the need for such quality is potentially not so great. “I guess it’s a positive problem to have,” laughed Schijfs, “having products that are just too good for the market!”
Tough times for Spanish spares
According to Vincente Reig, managing director of Mecanizidos Reig, a 40-year-old Spanish manufacturer of spare parts for tobacco machinery, things are a little less rosy on the Iberian peninsula. “In Spain, we are suffering from lack of jobs, lack of favourable credit and rigid labour relations in small and medium enterprises,” he said. “Looking ahead, we should be optimistic – we should not lose hope because we are doing a good job that deserves reward. We have to work and move forward together to overcome the economic crisis we are suffering.”
In order to try to beat the slump, the company is currently focused on expanding its market worldwide, especially with its major customers in the UK and Italy. In an effort to get his customers to extend the life of their spare and wear parts in a sensitive way, Reig recommends better and more frequent maintenance with a thorough cleaning and oiling.
Speed of the essence for Reto Iten Metals
“Spare part markets are (being made) more and more electronic by the large suppliers,” said Reto Iten, owner and managing director of RIM (Reto Iten Metals). “Anyway, the main prerequisite of today is quickness in reacting to daily enquiries and to be able to implement a quick lead time on standard items. The latter has become a bit more difficult, as many spare part manufacturers have a full order book leading to correspondingly longer delivery times. The highly competitive markets for end products are also leading to price pressure. Another factor making life difficult is the USD/EUR exchange rate, which has been quite volatile of late.”
Iten said that, in addition to the pressure from clients for faster and faster deliveries, end users are trying to reduce their costs by keeping smaller spare and wear part stocks while at the same time encouraging the supplier to increase its stocks. “We have therefore concentrated on a group of selected spares rather than on becoming the supplier of everything,” explains Iten. “This enables us not only to supply our bestsellers to end users but also to increase stocks for those particular parts.”
TMQS focusing on quality and flexibility
Spares requirements should be expected to move in parallel with produced volumes and hence to shrink somewhat, said Norbert Schulz-Nemak, sales manager at German company TMQS. “However, many surplus parts are still in stores due to the concentration processes taking place and the moving of parts into target factories,” he explained. “This might reduce the impact of shrinking numbers of parts in customers’ stores, as parts for different machine types not used anymore are being put into stock but not being used for the time being.”
He says that, in order to achieve the desired high machine utilisation rate on reduced budgets, emphasis is being placed increasingly on quality, wear and tear durability and short lead-times. The fewer spare parts are stored, the better the relevant KPI (key performance indicator). Fewer different spare parts lead to synergy effects on volumes that need to be stored per machine type, which also in turn leads to a shrinking of demand.
In terms of what TMQS has been working on recently, the company has been engaged in optimising existing parts and an extending the available portfolio. “Bought parts must be budget-friendly whilst ensuring an optimised usage time and adding quality to the process,” Schulz-Nemak said. “Also, the quicker spares can be sent the better, so improvement on lead-times is a key factor on which TMQS has been working and will continue to do so. It will be vital to be as flexible as possible whilst providing top quality at good prices.”
Growing demand for ATD spares
Roel Verschuren, director sales & marketing at ATD Machinery, also of the Netherlands, said that he sees the demand for spares is growing. “We can save customers time and money because we deliver direct from our factory in San Pedro in the Dominican Republic,” he said. “Parts can be with our customers in a few hours and, because we supply locally, freight costs are low. We can even offer technicians who can install the parts immediately.”
Over the past 12 months, ATD has been focusing on increasing its numbers of spare parts, so that now most parts, even for machines not originally built by ATD, are in stock. “If not and we see the demand growing, we will take them into stock to ensure that customers will have their parts in a few hours if needed,” he explained. “All parts are available via the service portal of our website. Customers have their own private login key and our online part finder service is a really easy way to find the correct part.”
According to Verschuren, the main factor currently influencing the company’s business is the new FDA rule extending its regulatory authority to all tobacco products including cigars, e-cigarettes, hookah and pipe tobacco. “Nobody is yet quite sure what this will mean and cigar manufacturers are still holding their breath to see what will happen,” he says. “This might be a reason to postpone investments, invest in other equipment or to explore new markets.”
Godioli & Bellanti hoping for new investments
Lorenzo Curina, CEO and sales director of Italian tobacco machinery manufacturer and supplier Godioli & Bellanti says that, in the field of spare parts, demand has been much better than in the past, owing to tobacco processors consolidating their situation (not investing in new machinery) and waiting for better times. “Undoubtedly, the campaign against smoking is gaining ground so, in my opinion, the market is slow and flat. ‘Consolidation’ is currently the most used word in the industry but we, as a machinery manufacturer, hope that 2017 will be the year of new investments!” Curina said.
Source: Tim Glogan / Tobacco Journal International 6/2016