Mechanical industry is ready to battle its way through to the post-recession time

Sitra’s mechanical industry growth programme gathered some of Finland’s largest main contractors and contract manufacturers round the same table to discuss the business area’s future challenges and joint competitiveness.

The participants agreed that each company should select an area where it can be a world-class player. The participants also voiced shared opinions on the following issues: In Finland, the number of players will decrease, but the players will grow in size, automation will continue, and companies can grow here in Finland, but only if they also grow abroad.

– The main contractors in the field are facing stiff international competition and have operations on at least three continents. Purchasing strategy and overall cost-effectiveness become key competitive advantages. Main contractors outsource their manufacturing to a network of increasingly fewer and larger contract manufacturers. Furthermore, an increasing proportion of manufacturing activity will move to foreign locations with lower costs, says Mauri Heikintalo, Programme Director, Growth Programme for the Mechanical Industry.

Contract manufacturers face the challenge of specialisation, fast and intense internationalisation together with the main contractor, and the financial capability to invest in the latest manufacturing technology.

– Contract manufacturers will also have a great opportunity to strengthen their expertise and offering in the fields of materials knowledge as well as product and manufacturing-friendly design. The main contractors are losing this expertise as they keep outsourcing their operations to outside partners. From this trend a number of consequences follow, such as how the larger role of contract manufacturers in the value chain will require more capital. Together with other organisations, Sitra and its Growth Programme for the Mechanical Industry is ready to tackle this capital investment and development challenge, continues Heikintalo.

Sitra’s mechanical industry growth programme will be offering further development workshops later this year, as it tries to do its part to boost an industry important for the Finnish national economy.