Following the entry of SMC Pneumatics Corporation (SMC) into the South African market, Motion Control’s editor, Kim Roberts and SA Instrumentation and Control editor, Steven Meyer, paid a visit to the company’s brand new headquarters in Midrand. There they met Kevin O’Carroll, managing director of SMC Pneumatics UK (SMC UK), to get an international perspective on this exciting new development.
SMC UK was established in 1978 and has since gained a 27% market share in that country. SMC also has 26 other subsidiaries in Europe, supported by a central warehouse in Antwerp and a manufacturing facility in the Czech Republic.
SMC UK is increasingly becoming involved in global projects where investments are made in Europe but support is needed from South Africa. Noting the UK subsidiary’s success, SMC’s Japan headquarters tasked it with setting up a subsidiary in South Africa to mirror the UK. The company had already traded in South Africa as a distributor and the compatibility of language and culture was also a factor. SMC Pneumatics South Africa (SMC SA) is now a standalone business unit reporting to the UK. “We think and act globally under the umbrella of SMC’s corporate identity, but add local flair,” says Kevin O’Carroll, managing director of SMC UK.
He says that the biggest challenge in the UK is dealing with fierce competition in a mature market. SMC UK has a range of core products and then differentiates by working with customers to develop new added value solutions for each specific need. “We work on the concept of a ‘simple special’ product,” he explains. “We can provide an engineered assembly where the customer gets a bill of material with only one part number for a whole customised system. This is our strength. Manufacturing accounts for 45% of our revenue and our manufacturing facility has become one of our biggest assets. Our people are another strength – 58% of our staff has been with the company for over 10 years.”
For the last three years SMC has been on the Forbes list of the 100 most innovative companies in the world. The company invests heavily in customer-driven R&D and is constantly developing innovative new products. The technical centre in Japan houses over 600 R&D engineers. There are also R&D centres in Germany, China, UK and USA with a more regional focus. “Our product range is vast and this is both a strength and a challenge,” O’Carroll adds. “The goal of our R&D is constant improvement to reduce size and increase flow rates and response times to make our products lighter, more efficient and easier to use. Above all we listen to our customers.”
General manager of SMC SA, Adrian Buddingh says that SMC is investing in a central factory and showroom. “We have set up a wonderful interactive showroom where our customers can see what we can do for them,” he continues. “Another advantage is that we stock a wide range of spares in our adjacent warehouse.”
SMC’s corporate strategy is sales through distribution and the company works on a reseller model. Buddingh explains that SMC keeps prices firm for as long as possible and its pricing is very competitive. This is achieved through lean manufacturing based on the Kaizen philosophy. SMC is constantly improving the production process to reduce costs and increase global demand to achieve economies of scale.
Buddingh says another advantage is that SMC SA has projects in almost every industry so is not dependent on one market sector. The company is currently aiming at the food, packaging and automotive industries and already has global accounts such as Toyota.
“We are also investing in people. We require a high level of skills in our organisation,” he continues. “We have taken on highly experienced people to lead the group and support our distributors. We are currently recruiting engineers and sales people and will be able to offer our customers a dedicated resource. Our next step is to take on young graduates and put them through our mentorship programme. Everyone has been on training in the UK. This has been a huge investment and we will now be reaping the benefits.”
Buddingh says that the biggest challenge for SMC SA is to take market share in a country where the SMC brand is not well known. “However, we have an excellent strategic plan, a proven model based on the success of SMC UK and a high level of investment. This has put us on a very good footing. We aim to partner with our customers, share the products developed globally within the SMC group and draw on the knowledge and skills residing in other subsidiaries,” he adds.
“SMC SA is a strategic market for us. South Africa has a major part to play in SMC’s global market and we are ready to invest,” concludes O’Carroll.
For more information contact SMC Pneumatics South Africa, +27 (0)11 568 2407, [email protected], www.smcpneumatics.co.za
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