SMT & Inspection |
How bad or good was 2009 for Assembléon in terms of sales, turnover, etc.? Like the entire pick & place industry, we saw a severe drop. We started to see the downturn in November / December 2008. If you look at the order intake and if you take out exceptional deals that we made, the picture is quite clear. Everyone went down. Just to give you a slight understanding. We had a few months – from January to April – were the official market data for Europe basically showed no business. Now we see some new activity. If you look at the different regions than we see activities primarily in China (I don’t want to say Asia as a whole), some in Korea. This is all driven by the semiconductor industry, which is picking up again and the consumer industry in China. However, China comes with a big question mark. How much is the up-turn influenced by the stimulus package. We also know that the consumer electronics market is cyclical and the improvement that we have seen during the last 2 to 3 months is certainly due to that. I am sure we will see some flattening out over the coming 2 to 3 months. We should not dream of a continuous improvement. My guess is that it will start again after the Chinese New Year. Europe is also much more active now. We are in contact with customers that are talking about investments at the end of this year or the beginning of next year. America is still extremely slow. So yes we suffered a lot, but I believe so did the entire industry. However, you cannot artificially create demand. That is impossible. The crisis nevertheless forced us to define our fundamentals; to really define what we are good at and what not. We were rather looking at how to create market opportunities. We therefore had to adapt. Adaptation however not only means down, but also up and even sideways. We were lucky enough to receive market signals and we were able to react fast and put things back in place. And that has worked well for us. How does the revenue vary from region to region? I would say: Europe 25%, America 25% and Asia 50%. Asia will definitely take up a bigger share in the future. This relates purely to a machine point of view. We also see good revenue coming from service related business. It is very important for us to see that we have increased our market share and that the earlier described strategy pays off. We were really proud that we were able to score against really big competition too. Yes there was a big price fight; yes there was a lot of offering the most suitable value proposition. But more importantly, we were able to achieve success in that in all regions.
You also announced the plan to enter the screen printing market during Productronica, presenting a new machine. What thoughts stood behind that decision?
The screen printer is an added value to our customers. For customers that are very sensitive to cycle times, we can create a very good match between the pick & place machine and the screen printer from our long-standing partner Yamaha. But pick & place will remain the core of Assembléon’s business.
We try to make sure that the proposition that we made is the most appropriate for the application. What really counts is – with which company do they interface. If we do it right we do not need to design all the machines all by ourselves.
We need a fair balance and I believe we have found what we were looking for. We have partners that clearly focus on some complementary applications and by combining strengths we can have a fairly wide range on the market.
Speaking of the Productronica CEO-Roundtable; you were talking about the difference between invention and innovation. Where would you put Assembléon’s innovative strength?
Here I would like to refer to three categories of innovation that we obviously bring to the customers. One is the combination of machine and software to offer a wider global solution. Like the partnership with Valor.
Next is the focus on business models. We are also now promoting capacity on demand, which you might have seen at the Productronica. With the concept of ‘True Capacity-on-Demand’ the customer would simply define the layout of his factory and the machines would be on the floor. When you move from low to high season you simply change the configuration of the pick-and-place machine by adding extra placement robots in it. With this you can basically double the output of the machine without increasing factory floor space.
What we do here is not so much the increase of capacity as such, but rather combining all with a sort of renting scheme. We basically allow the customer to invest a limited amount to cope with the low level demand on the factory’s capacity and then rent out the additional capacity only when needed For an EMS-company that would hold true in the 4Q of the calendar year. This certainly is not a brand new technology, but rather comes from the architecture of the machine. For us it is an innovation – even if strictly speaking only related to service.
Last we also have technological innovation, such as new functionalities on our machines. We are working on new machines, which are planned for later next year. In this category we focus entirely on bits and pieces of new technology.
However, as a CEO of a company such as Assembléon, the subject of leadership is extremely important. We also talked about that during the Round Table discussion. We looked at the way to create leaders. How would I – in all modesty – try to develop my own succession within Assembléon. This also calls for some kind of innovation. Are we just going to wait for the young managers to get 30 years of experience, wait for them to get older and then say now it’s time? Or are we going to coach the people and expose them in such a way that they can take up responsibilities and with that lead much earlier?
I believe that the last point is essential in driving the success of the company. The customer may not benefit from this immediately – that is obvious. But this is the fuel that allows the engines to run smoothly and with this to deliver all the other things to the customer.
I heard the following statement. ‘The best change in leadership is achieved when customers do not notice a change’. Would you agree?
We had a lot of discussions about this when I joined Assembléon. I had experience in marketing, engineering and development; let’s say – apart from pure logistics – I had experience in all aspects of the business. I worked in different countries and different divisions within Philips. You could say I had a wide experience. When I moved to Assembléon I brought with me my own vision of the market, because I had been dealing with an outsourcing strategy for 5 years in the consumer electronics division. I came with a different view compared to the one that was previously held by Assembléon.
That does not mean that the previous strategy was wrong, it was correct when it was defined. Last year the industry – the entire world market – was caught up in an economic turmoil. This created a different kind of exposure, but also different kinds of opportunities to interact with customers. We changed our focus; from trying to find niche markets to addressing the market at large.
We need to be a global player and we need to be proud of ourselves. We have all the right tools to do so; so let’s face the biggest competition and the toughest customers. We needed to prove to our customers – but also to ourselves – that we can succeed in this environment. I believe we are much more outside-driven, much more customer-centred. The decisive thing here is how fast Assembléon is able and willing to adapt itself to a different market cycle and not a CEO cycle.
The newly announced partnership with Valor; where do you see the benefits for both companies?
Assembléon has a clearly defined strategy, which is build on precisely such partnerships. Valor represents another element of this strategy. As you already know, we have a longstanding partnership with Yamaha, which allows us to widen the scope of the products that we build. Like the introduction of the MCP screen printer. However, we want to bring new technology much faster to the market.
To say it in a different way; we are very good at specific things, but lack knowledge in certain other areas. So instead of designing everything ourselves, we want to partner with industry leaders, for the benefit of our customers. So for the next generation of machines – which is planned for the end of next year – we are currently looking for and negotiating new partnerships.
Valor is the partnership that we have decided on in regard to Software. But – not long ago - we also entered a partnership with CyberOptics. CyperOpics is one of the companies that we decided to keep as a partner and we are even expanding this partnership. Not necessarily for bringing new machines but for adapting the machines to something that we conceive to be the customers’ needs of today.
Is your cooperation with Valor an exclusive partnership?
No, it is not and it cannot be an exclusive partnership. In the end, the customer decides what he wants. We have different softwares. The customers sometimes have their own software. That challenge is to provide the flexibility and ability to react fast to specific configurations.
By default – and what we have agreed upon with Valor – is that the solution that we are going to promote is the Valor solution. If the customer decides to use their own software – fine, we can provide that option too. We want to move away from providing an isolated pick & place machine and turn to promoting a line configuration that fits into an overall P &P environment on our customers’ site. And this is precisely what we do with Valor.
Although I cannot be specific I can give you an example. We visited customers during the past few months to test the new solution line-up. The interesting thing here is that Valor was visiting those customers too. However, all visits were in nice isolation to each other. By combining our efforts, by combing what we knew about a specific customer and then presenting a joint offer, we were able to cut the time for presentation and negotiation by around 50 – 80%.
Is there a specific reason why you chose to partner with Valor?
Valor is known as an industry leader in its chosen field. They are strong. We have also been working with Valor for some time and we thought it was time to make that more official. This way we can bring the full benefit of this cooperation to our customers.
Valor has already been working very successfully with Assembléon clients within the EMS-industry. If Assembleón presents a complete solution then it is easier for them to agree to the benefits and the deal. As an example: if we have a fit with Valor and they have a fit too, then it is much easier for them to insert the machines into their production process.
The needs of the market are extremely volatile. That is one lesson we have learned from the economic crisis. So the framework is there, the framework is to remain, but the adaptation will simply depend on the exact business situation and exact needs of our customers when we deliver our machines. That is the benefit that we will get from this and other technology partnerships.
Thank you for the interview.
Assembléon does not need to design it all by itself
Andre Papoular, CEO & Senior Vice President of Dutch SMT equipment maker Assembléon, has talked to evertiq about the introduction of its MCP screen printer, the newly announced partnership with Valor and future developments of the company.
How bad or good was 2009 for Assembléon in terms of sales, turnover, etc.? Like the entire pick & place industry, we saw a severe drop. We started to see the downturn in November / December 2008. If you look at the order intake and if you take out exceptional deals that we made, the picture is quite clear. Everyone went down. Just to give you a slight understanding. We had a few months – from January to April – were the official market data for Europe basically showed no business. Now we see some new activity. If you look at the different regions than we see activities primarily in China (I don’t want to say Asia as a whole), some in Korea. This is all driven by the semiconductor industry, which is picking up again and the consumer industry in China. However, China comes with a big question mark. How much is the up-turn influenced by the stimulus package. We also know that the consumer electronics market is cyclical and the improvement that we have seen during the last 2 to 3 months is certainly due to that. I am sure we will see some flattening out over the coming 2 to 3 months. We should not dream of a continuous improvement. My guess is that it will start again after the Chinese New Year. Europe is also much more active now. We are in contact with customers that are talking about investments at the end of this year or the beginning of next year. America is still extremely slow. So yes we suffered a lot, but I believe so did the entire industry. However, you cannot artificially create demand. That is impossible. The crisis nevertheless forced us to define our fundamentals; to really define what we are good at and what not. We were rather looking at how to create market opportunities. We therefore had to adapt. Adaptation however not only means down, but also up and even sideways. We were lucky enough to receive market signals and we were able to react fast and put things back in place. And that has worked well for us. How does the revenue vary from region to region? I would say: Europe 25%, America 25% and Asia 50%. Asia will definitely take up a bigger share in the future. This relates purely to a machine point of view. We also see good revenue coming from service related business. It is very important for us to see that we have increased our market share and that the earlier described strategy pays off. We were really proud that we were able to score against really big competition too. Yes there was a big price fight; yes there was a lot of offering the most suitable value proposition. But more importantly, we were able to achieve success in that in all regions.
You also announced the plan to enter the screen printing market during Productronica, presenting a new machine. What thoughts stood behind that decision?
The screen printer is an added value to our customers. For customers that are very sensitive to cycle times, we can create a very good match between the pick & place machine and the screen printer from our long-standing partner Yamaha. But pick & place will remain the core of Assembléon’s business.
We try to make sure that the proposition that we made is the most appropriate for the application. What really counts is – with which company do they interface. If we do it right we do not need to design all the machines all by ourselves.
We need a fair balance and I believe we have found what we were looking for. We have partners that clearly focus on some complementary applications and by combining strengths we can have a fairly wide range on the market.
Speaking of the Productronica CEO-Roundtable; you were talking about the difference between invention and innovation. Where would you put Assembléon’s innovative strength?
Here I would like to refer to three categories of innovation that we obviously bring to the customers. One is the combination of machine and software to offer a wider global solution. Like the partnership with Valor.
Next is the focus on business models. We are also now promoting capacity on demand, which you might have seen at the Productronica. With the concept of ‘True Capacity-on-Demand’ the customer would simply define the layout of his factory and the machines would be on the floor. When you move from low to high season you simply change the configuration of the pick-and-place machine by adding extra placement robots in it. With this you can basically double the output of the machine without increasing factory floor space.
What we do here is not so much the increase of capacity as such, but rather combining all with a sort of renting scheme. We basically allow the customer to invest a limited amount to cope with the low level demand on the factory’s capacity and then rent out the additional capacity only when needed For an EMS-company that would hold true in the 4Q of the calendar year. This certainly is not a brand new technology, but rather comes from the architecture of the machine. For us it is an innovation – even if strictly speaking only related to service.
Last we also have technological innovation, such as new functionalities on our machines. We are working on new machines, which are planned for later next year. In this category we focus entirely on bits and pieces of new technology.
However, as a CEO of a company such as Assembléon, the subject of leadership is extremely important. We also talked about that during the Round Table discussion. We looked at the way to create leaders. How would I – in all modesty – try to develop my own succession within Assembléon. This also calls for some kind of innovation. Are we just going to wait for the young managers to get 30 years of experience, wait for them to get older and then say now it’s time? Or are we going to coach the people and expose them in such a way that they can take up responsibilities and with that lead much earlier?
I believe that the last point is essential in driving the success of the company. The customer may not benefit from this immediately – that is obvious. But this is the fuel that allows the engines to run smoothly and with this to deliver all the other things to the customer.
I heard the following statement. ‘The best change in leadership is achieved when customers do not notice a change’. Would you agree?
We had a lot of discussions about this when I joined Assembléon. I had experience in marketing, engineering and development; let’s say – apart from pure logistics – I had experience in all aspects of the business. I worked in different countries and different divisions within Philips. You could say I had a wide experience. When I moved to Assembléon I brought with me my own vision of the market, because I had been dealing with an outsourcing strategy for 5 years in the consumer electronics division. I came with a different view compared to the one that was previously held by Assembléon.
That does not mean that the previous strategy was wrong, it was correct when it was defined. Last year the industry – the entire world market – was caught up in an economic turmoil. This created a different kind of exposure, but also different kinds of opportunities to interact with customers. We changed our focus; from trying to find niche markets to addressing the market at large.
We need to be a global player and we need to be proud of ourselves. We have all the right tools to do so; so let’s face the biggest competition and the toughest customers. We needed to prove to our customers – but also to ourselves – that we can succeed in this environment. I believe we are much more outside-driven, much more customer-centred. The decisive thing here is how fast Assembléon is able and willing to adapt itself to a different market cycle and not a CEO cycle.
The newly announced partnership with Valor; where do you see the benefits for both companies?
Assembléon has a clearly defined strategy, which is build on precisely such partnerships. Valor represents another element of this strategy. As you already know, we have a longstanding partnership with Yamaha, which allows us to widen the scope of the products that we build. Like the introduction of the MCP screen printer. However, we want to bring new technology much faster to the market.
To say it in a different way; we are very good at specific things, but lack knowledge in certain other areas. So instead of designing everything ourselves, we want to partner with industry leaders, for the benefit of our customers. So for the next generation of machines – which is planned for the end of next year – we are currently looking for and negotiating new partnerships.
Valor is the partnership that we have decided on in regard to Software. But – not long ago - we also entered a partnership with CyberOptics. CyperOpics is one of the companies that we decided to keep as a partner and we are even expanding this partnership. Not necessarily for bringing new machines but for adapting the machines to something that we conceive to be the customers’ needs of today.
Is your cooperation with Valor an exclusive partnership?
No, it is not and it cannot be an exclusive partnership. In the end, the customer decides what he wants. We have different softwares. The customers sometimes have their own software. That challenge is to provide the flexibility and ability to react fast to specific configurations.
By default – and what we have agreed upon with Valor – is that the solution that we are going to promote is the Valor solution. If the customer decides to use their own software – fine, we can provide that option too. We want to move away from providing an isolated pick & place machine and turn to promoting a line configuration that fits into an overall P &P environment on our customers’ site. And this is precisely what we do with Valor.
Although I cannot be specific I can give you an example. We visited customers during the past few months to test the new solution line-up. The interesting thing here is that Valor was visiting those customers too. However, all visits were in nice isolation to each other. By combining our efforts, by combing what we knew about a specific customer and then presenting a joint offer, we were able to cut the time for presentation and negotiation by around 50 – 80%.
Is there a specific reason why you chose to partner with Valor?
Valor is known as an industry leader in its chosen field. They are strong. We have also been working with Valor for some time and we thought it was time to make that more official. This way we can bring the full benefit of this cooperation to our customers.
Valor has already been working very successfully with Assembléon clients within the EMS-industry. If Assembleón presents a complete solution then it is easier for them to agree to the benefits and the deal. As an example: if we have a fit with Valor and they have a fit too, then it is much easier for them to insert the machines into their production process.
The needs of the market are extremely volatile. That is one lesson we have learned from the economic crisis. So the framework is there, the framework is to remain, but the adaptation will simply depend on the exact business situation and exact needs of our customers when we deliver our machines. That is the benefit that we will get from this and other technology partnerships.
Thank you for the interview.
