Drives & Controls May 2022

How much real production exists in the virtual world? The Leading Exhibition for Smart Automation and Robotics June 21–24, 2022 | Munich automatica-munich.com Information: Pattern Limited Tel. +44 20 3375 8230 , info@pattern.co.uk FIND ALL ANSWERS HERE. AUTOMATICA 2022 IN THE MIDDLE OF A CHAIN REACTION One topic of conversation on almost every stand at the recent Drives & Controls Show was the continuing supply chain problems and the far- reaching effects they are having on the automation sector. Almost every supplier is affected to some extent and there are stories – perhaps apocryphal – of lead times extending to well over a year for some automation products. Some suppliers are even said to be abandoning lower-margin products to focus on more lucrative lines. The problems affect almost every input into the automation industry from the well-known semiconductor shortages and soaring container costs, to seemingly peripheral – but nonetheless vital – commodities such as timber, plastics and paper. Some suppliers are turning to“grey” markets to obtain crucial components. Some manufacturers claim that they have been able to cope with the worst of the affects by building up stocks of critical components. But almost every supplier has had to extend lead times and put up prices. Different suppliers are dealing with the problems in different ways. Some are telling their customers to order only what is essential. Others are refusing to take orders unless they can guarantee deliveries. Most report that potential orders are not a problem and that, if they could fulfil them, business would be booming. This picture is confirmed by the latest UK Manufacturing Purchasing Managers’Index (PMI) published earlier this month by S&P Global and CIPS. This reveals that input prices for UK manufacturers rose last month at the second-fastest rate in the PMI’s 30-year history. Some 85% of the UK manufacturers surveyed reported that their costs had gone up and, for the first time ever, none reported decreases. When asked to specify which costs had risen, their lists included chemicals, energy, freight, metals, oil, plastics, timber and transportation. As a result, output prices rose by a record amount in April with almost 61% of companies putting up prices – and just 1% cutting prices. Lead times lengthened again, blamed on the now well-known factors. Brexit remains a particular headwind for UK exporters who report that lost EU customers, increased paperwork, customs checks and border delays are all adding to their problems. But the PMI wasn’t all bad news. The start of the second quarter actually saw a mild acceleration of growth in the UK manufacturing sector, with the rate of expansion improving fromMarch’s five-month low. Staffing levels also rose for the 16th month in a row, and the outlook was positive, with 55% of companies expecting output to rise over the coming year. No one knows when (or if) the problems will end. Most expect the effects to last at least to the end of this year. But there was a slight glimmer of hope recently when it was reported that prices for graphics chips – regarded as a bellwether for the electronics sector – have started to ease. Perhaps this is the beginning of the end. Tony Sacks, Editor n COMMENT