Elisabetta Quadrini, Newfren, Turin
Innovating our way out of the uncertainty
September was yet another month of instability, with rising prices and the uncertainty about the future making it impossible to look for strategies that can prove durable for more than just a few weeks at a time.
The metal market is still showing a very strong upward trend, due to the high energy costs, which are having a strong impact on the metal industry.
Cast furnaces, in particular, had already invested heavily in converting to the use of electricity instead of coal over the past few years by implementing decarbonisation requirements - but until reliance on coal or gas to generate electricity is firmly in the rear view mirror, pricing will continue to be unstable.
As with metals, we here at Newfren, and everyone in the brakes components industry, are still also facing price increases on all the other materials we need. In some cases, these can change on a weekly basis.
In order to cope with the ever-changing impact of energy, many of our suppliers are now showing their energy costs as a separate variable and sometimes having to update invoices with added supplemental costs monthly.
While the need of the factories to add supplemental charges is understandable, we have to comment that on the distribution side of the finished product, and therefore as our customers are concerned, this policy is simply not practical.
Therefore, manufacturers are being squeezed in the middle of this perfect storm with our sales price lists also suffering a significant reduction in 'shelf life' and needing to be updated frequently.
"uncertainty is the only thing that is certain"
However, this cycle means that at least in part, manufacturers such as us are faced with having to absorb the price increases seen throughout the supply chain until new price lists can be updated.
In the middle of this uncertainty, manufacturers' day-to-day business also has to be about adjusting production and activities to incorporate the many regulation changes that are enacted to guarantee product quality and respect for the environment.
Of course, we all support such initiatives in principle, but these activities impact both on the internal organisation in terms of skills and time to be dedicated, as well as on the financial aspect - doing this under the present circumstances means that for medium-sized companies like Newfren, every day is a challenge.
In response to such a difficult situation, Newfren has therefore had to react to these challenges by taking many internal and external actions.
In particular, we have implemented new specialised internal resources to optimise productivity. We have a new R&D department that has acquired the skills of additional, experienced engineers who can ensure that new projects underway can proceed without suffering delays, so we can offer customers something of ever higher performance continuously - production engineering and manufacturing optimisation are at a premium these days.
New emphasis has been invested in starting up additional collaboration activities with companies that are already partners, so we can add to the knowledge base critical mass and production capacity that we have access to.
The first results of these upgrades will be seen at EICMA (Hall 22/Stand I48) with the launch of a new range of products resulting from the development work we have carried out over the last two years.
The new line will offer a unique feature that we invite you to come and discover in Milan or on our digital communication channels from 8th November.
www.newfren.com
