CEO Explains Sandvik Decision To Enter Digital Manufacturing Economy

“In a connected manufacturing world, continuous measurements cut lead times and reduce scrap and the amount of material used. Sandvik has recently acquired a software company with technology that holds the key” – Klas Forsström President, Business Area Sandvik Machining Solutions.

In recognition of an industry-wide transformation to digital manufacturing, Sandvik has acquired Metrologic Group, a leading supplier of 3D inspection software and electronics, at a price of 360 million EUR (3.7 billion SEK). It’s a logical part of the strategy to take a leading position in operational excellence, technology and customer interactions, says Klas Forsström, President for business area Sandvik Machining Solutions.

“Historically, design, machining and analysis have been three clear phases of manufacturing,” Forsström says. “New technology allows for instant data capturing and analysis, which means that the verification phase will be totally integrated into the process,” he says. “This will be even more so in the future.”

In the short term, the acquisition will provide customer value through added measurement technology capacity that Sandvik can offer. Going forward, the plan is to develop integrated solutions throughout the manufacturing chain.

“This is a step toward a digital manufacturing offering,” Forsström says. “Within, say, five or ten years hardly any manual measuring will be performed in a workshop. Instead, machine learning and connectivity between systems, machines and tools will allow for continuous measuring throughout the whole process – all the way to the cutting edge.”

In a connected manufacturing world, continuous measurements will cut lead times and reduce scrap and customer recalls, as well as reduce the amount of material used in the process.

“Today, measurements are made on statistical samples,” Forsström explains. “Measuring every tenth component with satisfactory results indicates that the other nine also qualify. It’s too expensive to measure every component, so you have to balance time, cost and quality. Digitalization, however, allows for continuous control of every single component, and this is where Metrologic Group comes into the picture in the long run.”

Metrologic was founded in 1980. It offers agnostic metrology software, meaning that the software is compatible with measuring equipment from different suppliers. The agnostic part was critical for Sandvik.

“Many of our customers don’t want to be locked up with a single supplier,” Forsström says. “They typically want to compare performance between machines, production lines and plants with different equipment. Hence, we need to offer a solution that allows for multiple equipment brands.”

Metrologic, with headquarters in Meylan, France, employs 160 people in seven countries and offers support in more than 30 countries. In its fiscal year ending in September 2017, Metrologic Group generated revenues of 43.3 million EUR. The group approaches customers in the same segments as Sandvik and has a similar geographical footprint. Metrologic will keep its strong brand.

With this move, Sandvik declares a digital leadership in the manufacturing arena. But the competitive landscape is continuously changing, Forsström continues. “All metal-cutting tool suppliers are working with digitalization in one way or another, but along with these traditional competitors, you need to add measurement companies, hardware and software suppliers. Everyone wants a piece of the manufacturing cake, but I feel confident that we have a head start with our deep manufacturing competence and close and strong collaboration with hundreds of thousands of customers.”

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