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Milling Machines Market – Supply Market Overview and Procurement Insights

Apr 8, 2018

Milling machines are widely used in the metal industry for metal works including shaping, boring, drilling, and routing of metal components. They are also used for work on wood and other solid materials. Such machines can be positioned in either vertical or horizontal operations to produce materials based on a pre-existing design, which is CAD directed. Milling machines are also capable of dynamic movement and many milling machines can perform multi-axis machining as well. Rising industrialization in emerging economies and development of the manufacturing sector are driving the volume and value growth of the milling machines market. The recent procurement market intelligence report from SpendEdge supports this claim, stating that the market will grow at a CAGR of 5.9%.

Request Free SampleThe largest market for milling machines

APAC is the largest market in terms of the global spend on the category as the region serves as a major manufacturing hub for the world. Various end-user manufacturing industries such as automobile and iron and steel in the region have a strong presence in the APAC region due to outsourcing. Additionally, the demand from emerging economies such as India and China is growing significantly which is, in turn, driving the growth in this market. APAC is expected to grow at a CAGR of 5%-6.5% during the forecast period.

Milling machines supply market

When it comes to the supply market of milling machines, the market is fragmented in nature with global and regional players who offer basic to high-end milling machines. Automotive and heavy engineering segment account for a major share of consumption in this market. Also, suppliers have started providing software solutions for Industry 4.0 implementation and are focusing on the development of enhanced milling machines such as 6-axis machine tools for improving capabilities.

Major technological innovations

  • IoT
  • Hybrid machines
  • CAD/CAM
  • CNC

Supplier costing analysis

Raw material cost is one of the major costs incurred by the manufacturer, accounting for about 42% of the total cost. The rising cost of metals to manufacture such machines is also posing a challenge for the supplier. Additionally, the demand for commodities such as iron is likely to increase the raw material costs by up to 5% during the forecast period. Although economies of scale allow the supplier to reduce the per unit cost, the rising raw material cost is proving to be too much to handle currently in this market. Apart from raw material costs, companies should also take into account labor costs which includes employee salaries, benefits, and pension. It is also highly likely that labor costs will increase at a rate of 2%–4% due to the revision of minimum wages across countries and increase in demand for technical and skilled labor.

Pricing model prevalent in the market

Majority of the supplier in this market opt for volume-based pricing model as large-scale purchases lead to better per unit prices for buyers. Also, large orders from buyers usually lead to supply assurance as suppliers focus on major revenue generating buyers for offering products and services. However, such a model may not be feasible for the small and medium businesses due to their inability to buy in vast quantities.


 

Read more about the supply market overview of the milling machine market along with procurement best practices, demand-supply landscape, pricing insights, and technological advancements in SpendEdge’s upcoming report on the global milling machines market.

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