Machinery market heats up, but planning is needed

The machinery market, especially the agricultural one, is booming like few times in history. According to the Brazilian Association of the Machinery and Equipment Industry (Abimaq), sales of member companies grew 55% in the first two months, compared to the same period in 2020. Behind the scenes this information is confirmed, many companies are with their forecast (forecast) of annual sales, practically all sold at the beginning of the 2nd quarter of this year.

The record grain harvest in the 2020/21 harvest, the good expectations for the 2021/22 season and the prices of commodities reaching unprecedented figures end up generating better remuneration for Brazilian producers. This all contributes to keeping negotiations moving at a fast pace.

However, the biggest challenge is producing and delivering within the agreed deadline. Manufacturers are going through a kind of “gold rush” where gold, in this case, is raw materials and components in general. Many of the factories have had their work routine changed due to the pandemic. Furthermore, many of the inputs for the manufacture of machines and implements have increased excessively in cost, such as steel, aluminum, plastic, among others.

And with this scenario, how should the industry and producer proceed? This situation is once again proving testing for the sector, but this time it is a little different from what we faced in 2020. Now what is being put to the test is not the robustness of the companies' cash flow or the manufacturing structure, but rather the ability to manage strategic planning for the brand in such an unstable raw materials supply scenario.

In the midst of this turmoil we are going through, the entire chain will need to reinvent itself in some way, from the steel mills to the producer at the end.  

In the case of the producer, the habit and culture of having prior planning for the acquisition of machines and implements will need to be developed urgently, starting to make purchases as much as possible on a scheduled basis, since we always had a large stock of machines. the willingness to purchase on store patios and today the reality is different.

On the other hand, manufacturers, as tempting as it may be, need to develop the ability to say: “so far I can deliver without compromising my end customer”. And so sell as far as its processing capacity reaches, since agricultural machinery is very different from a car, for example, if it exceeds its period of use and does not arrive at the farm in time, it will not be useful for the harvest in which the producer made the acquisition. It could even represent serious losses in productivity if it does not have another spare or a good network of contacts to help in the operation window.

And how can we in the sector and on this side of the counter act? Well, I would say that expanding the portfolio of alternative solutions for the same product is a good way to go. However, more than increasing it to the same technical specification, being able to count on options without distorting or losing the efficiency of the product is also a valuable differentiator today and this is only possible with fast and agile engineering.

Furthermore, the old adage that says: “nothing is so good that it cannot be improved” comes in handy. Asking ourselves the question, which process or system can I work on for a faster response to market needs? Also valid for management models!

Although obvious, the world continues to change and we who are endowed with some type of responsibility and activity, whatever it may be, need to be aware of these changes. It is essential that we are willing to always let go of preconceptions in order to become attached to the new concepts that constantly knock on our doors every day. Whether at home, in daily activities, in the workplace, in industry or on the farm.

Douglas Peccin, CEO of MP Agro Máquinas Agrícolas