How COVID-19 affected the automation industry

Written by George Hyden

3 min read | 11 Jan 2024

My name is George Hyden; I am a sales specialist at Rokholt Group. I've been working in the automation industry for over a year now, since then I’ve seen that there were major challenges for OEM’s, which were mainly caused by covid which impacted the automation industry, these difficulties included.

  • Extended/ Longer lead times from manufacturers.
  • Shortage of Raw Materials.
  • Not enough engineers to keep up with demand.
  • Cancelled orders as they could not keep up with demand. 
  • Transportation of Parts

Lead Times

Lead times were drastically increasing meaning that companies who used to order directly from the manufactures couldn’t anymore as they went from a few days lead time to weeks. Parts used in PLC’s would have around a 70-week lead time if you ordered this part and are not one of their priority customers this would more than likely be extended.

For companies who had a breakdown/no stock, this proved to be a real shock as they essentially would be stuck without the automation parts they require. This would cause a lot of problems as they would potentially have to shut down lines which would cost the company more money as they would have to delay orders, or they would have to panic search to find the part and therefore pay more than the standard price from the manufacturer. This would have a knock-on effect on the company as they would have to cancel/delay orders.

Raw Materials

The second effect that caused the manufacturers to delay orders was the shortage of raw materials. Without the required parts to complete a drive or an HMI screen then you aren’t going to be able to complete the part. This was a major problem, and this was potentially the biggest reason why orders were getting delayed to customers. It would also grow uncertainty with their customers as the lead times were constantly changing. Meaning, companies would look down other alternatives routes. 

Workforce Shortages

Staff shortages have also played a part in extending lead times, in a manufacturing plant you need experienced engineers to be able to manufacture the parts. If you don’t have the required skill set, then this will also cause time to be lost in training, or in fixing mistakes which may have occurred and possibly sourcing experienced engineers who have the expertise to complete the job. Also due to covid restrictions and social distancing regulations people weren’t allowed to return to work which causes instant delays. Labour is key to any business but especially when focusing on industrial automation and supply chain management.

Shipping and Transportation

Transportation of parts can also be a lengthy process as parts may be being sourced from different areas of the world. During covid this was impacted due to the restrictions, however when this was lifted it caused an instant delay as more people were placing shipments as they needed parts to continue with their ongoing projects. Since restrictions have lifted the industry has also seen a rise in costs when it comes to transportation and shipping, this will directly affect the profit margins of companies within the automation industry.

How Rokholt can help you

These are a few of the main points that have caused significant negative effects upon the industry from my perspective. Rokholt works to minimise and eliminate these issues by using the following methods.

Firstly, by reducing lead times, we do this by having trust in our supply chain which has created strong relationships with our suppliers. By doing this we’ve been able to cut lead times down from 50 weeks down to 2-3 weeks, we can even facilitate same day delivery or next day delivery in some cases. A method we use to separate ourselves from the competitors is we can instantly source the obsolete or current line spares the customer requires. Our supply chain management skills allow us to not have to hold major amounts of stock, these parts could be sitting there for many months or even years if demand falls. As I mentioned earlier this applies to active and obsolescence/ discontinued parts such as motors, drives, PLC controls, module circuit breakers, HMI, CNC systems and encoders. We can source parts from thousands of brands that have and are still experiencing setbacks from the constraints from covid. These types of parts are our forte and we deal with them day in, day out offering competitive pricing. We aim to beat the rest of the competition in service, lead times and price.

Our main objective is to help the customer and ensure everything runs as smoothly as it can for them. Another reason for how we can help is by offering flexible credit terms. We do this as we believe the priority in this process is the customer fixing their problem. This could be a breakdown which could cause a drastic number of problems. It could even be a critical spares list which they need for stock if it is a customer who has never used us before. We want them to gain our trust. This is another reason why we would offer credit terms. As standard we also include a 12-month warranty on all of our parts that we sell so if there are any issues you can return the part.