Relevant GRI Indicators
Strategy and technology
Strategic focus areas
Sandvik Machining Solutions’ vision is to become the world-leading solutions provider to the wider component manufacturing industry. This entails expanding into solutions, such as additive manufacturing and digital technology, while continuing to grow in the core machining area.
Focus on core
In 2019, Sandvik Machining Solutions continued its focus to grow the core machining area in an increasingly competitive cutting tool industry. During the year three acquisitions were made in round tools. Along with reinforcing the offering of tools for metal cutting, Sandvik Machining Solutions also started a journey to broaden the market and growth opportunities by expanding into design, planning, verification and evaluation (see illustration below). The way forward will be achieved through organic growth, along with collaborations or acquisitions that include digital solutions and additive manufacturing.
Technology leadership and innovation
Sandvik Machining Solutions continued to invest heavily in research and development and we have one of the strongest patent portfolios in the industry. The business area is building up two recently formed divisions – Applied Manufacturing Technologies and Additive Manufacturing – through organic growth and acquisitions. The Applied Manufacturing Technologies division focuses on combining our industrial expertise with its digital expertise. Partnerships are also very important as we expand into new technological areas.
In 2019, we launched new products and services in both the core tooling area and in the digital area. CoroDrill® DS20 is the first indexable insert drill on the market with a depth capacity of seven times the diameter (see Customer case). Double Quattromill™, a new face mill cutter for roughing and semi finishing, lowers the cutting forces / machine power consumption. Prism™ enables users to quickly create and simulate CNC programs and is the first computer-aided manufacturing app for machining (more in New products and innovations).
During the year, the Additive Manufacturing division announced the creation of the first-ever 3D-printed diamond composite, a super-hard material that can revolutionize the way industries use the hardest natural material on the planet.
Machine shop workflow
Our customers all have similar challenges: the difficult balance between flexibility, machine utilization and waste. Through automation, machine monitoring and optimized manufacturing processes we aim to integrate digital systems and allow all parts in a machine-shop to communicate, all the way from quotation to verification.
Overview
Product portfolio
Providing customers with a leading and sustainable offer within metal cutting delivered via multi divisions and brands in the form of metal cutting tools, additive manufacturing, know-how and digital solutions.
Market characteristics
Cutting tools represent a small share of the total manufacturing cost for customers, however they are significant for the productivity. Service levels and product solutions are the main differentiators for the premium offering. Lower degree of service for mid-market which is more price sensitive.
Demand drivers
- Global manufacturing
- Material evolution
- New manufacturing technologies
- Complex component designs and functionalities
Competitive landscape/Major competitors
- Consolidated in the premium segment: IMC group (Iscar brand), Kennametal (Kennametal brand)
- Fragmented in mid-market including global premium players present with their mid-market brands:
Mitsubishi, IMC group (Taegutec brand), Kennametal (Widia brand), Zhuzhou
Go-to-market model
Direct sales ~55–60 percent. Distribution sales are predominant in North America whereas direct sales are predominant in Europe. In Asia, mainly distribution sales with limited service offering in the mid-market segment and direct sales, with high service level, in the premium segment.
Growth strategy
Expansion through organic growth, innovation and niche acquisitions in the core. Expansion into digital solutions and additive manufacturing supporting customer value chains.
Strategic risk
management
Various forms of business environment risks with an impact on the metal cutting market in general, mainly changes in customers behavior, acquisition-related risks, structural changes in our industry, information security risks and compliance-related risks.