In ten years from now, customised new machines and radical service business models from the DACH region (Germany, Austria, Switzerland) could dominate global mechanical engineering. However, it is also possible that giant tech companies from the software and Internet industry will capture key positions in the machine market and grab the majority of value creation–while at the same time highly transparent purchasing and service platforms usurp the spare parts business. The Deloitte study “Growth Engine Machinery Sector 2030” uses four realistic scenarios to show what the industry needs to prepare for–and what measures companies can take today to be properly positioned for all scenarios.
Conventional planning tools enable companies to use “best case–worst case” scenarios to make a relatively exact assessment of the future–mainly for two to three years ahead, in some cases however also up to a maximum of five years. Scenario Analysis lets you look ahead more than twice as far. Instead of delivering a likely range of target parameters, as is done by planning tools, scenario analyses enable one to look ahead at different alternative futures that seem realistic from today’s expert view. Scenarios are therefore not intended for concrete corporate planning, but are rather spotlights that illustrate especially concise, but nevertheless realistic developments, and point out their opportunities and risks.
The current Deloitte study “Growth Engine Machinery Sector 2030” shows that even critical future developments will not lead to the demise of the industry in the DACH region. On the contrary, engineering know-how from Germany, Austria and Switzerland will continue to be in demand worldwide even if tech companies will dominate the business or competitors from China succeed in taking over technological leadership in the industry. On the other hand, in none of the scenarios can industry sit back and relax. Either way, the next decades will require great efforts from mechanical engineering companies
The machinery sector will continue to be the growth engine for the DACH region in 2030, but great efforts and an even greater readiness for change and cooperation will continue to be required.
Oliver B. Bendig, Partner & Machinery Sector Lead, Monitor Deloitte
Ecosystems and machine specialisation
One basic assumption of the study is that future machine offerings will continue to follow the trend toward increasingly complex packages of machine + service + software. For machine builders, this means working more and more in one or more ecosystems where specialised partners are responsible, for instance, for data analytics, software or online services. Within an ecosystem, the partner who contributes the decisive value-added steps is usually the leader. Therefore, "power in the ecosystem" forms the first of the two variables in the scenario selection.
A second basic assumption of the study is that digitalisation tends to enable more flexible and more modular machines, with highly adaptable software at their core. These "standard machines" compete with customised "special machines"–with the latter having shaped the mechanical engineering recipe for success of the last decades. Which of these two principles will prevail in which segment in the future is still open and will presumably only be decided over the next few decades. Therefore, "specialisation versus standardisation" is the second scenario variable.
The different scenarios very clearly show how important it is already today to play an active part in modeling the machinery sector ecosystem–before it is remodeled by the ecosystem.
Thomas M. Döbler, Partner & German Energy, Resources & Industrials Lead, Deloitte
Dealing with uncertainty
The four scenarios created represent hypotheses that–from today’s view–could realistically occur by the year 2030 and that are of equal weight. Moreover, the study far from shows all scenarios and only considers the axes of “Power in the Ecosystem” and “Machine Specialisation” as described above. Many other factors are neglected, including unforeseeable crises such as the COVID-19 pandemic. So, how should machine builders deal with such a high degree of uncertainty in order to be better prepared for the medium-term future? In their study, the Deloitte experts have defined eight measures for this purpose that are useful in nearly all cases and therefore can be implemented without further concern:
Download the complete study “Growth Engine Machinery Sector–Four scenarios for a successful future in 2030” here and learn more about the scenarios and the fields of action for mechanical engineering companies. We foresee a positive future despite all the challenges, but further big efforts are needed to make the machinery sector the growth engine in the DACH region in 2030.