Sandvik Coromant on Acquisitions: Solutions Entail More Than the Tool

Why does a cutting tool company now offer CAD/CAM software products? Sandvik Coromant, a well-known cutting tool technology company headquartered in Sweden, recently acquired software companies CGTech, ICAM and CNC Software Inc. Helen Blomqvist, who became global president of Sandvik Coromant in 2020 just as these acquisitions were beginning, says it has never just been about the cutting tools. The company has long sent specialists in Sandvik’s signature lab coats to advise machining facilities; Blomqvist emphasizes the company has always provided solutions rather than just tools.

Yet changes in machining technology, and in the nature of some machined parts for long-standing markets (notably the automotive industry in its shift to electric vehicles), make the elements of the machining process increasingly interdependent. That means the solutions must draw on more than the cutting tool alone.

I explored this shift with Blomqvist in a recent conversation. Here is how she sees her company changing and advancing in response to shifts in manufacturing and machining:

Peter Zelinski, Modern Machine Shop: Sandvik Coromant has made some acquisitions recently that are very different from cutting tool product offerings, so let’s use that as a starting point. Help me understand the growth in the role Sandvik Coromant would like to play for manufacturers. How should we think about Sandvik Coromant, given for example its software acquisitions? What is the thumbnail description of the company as it is now? Or as it's aiming to be?

Helen Blomqvist, Sandvik Coromant: I think we have always been more than a tool supplier. I think we are very much known for our deep knowledge in machining, and for supporting our customers with many different problems. This is our core.

Looking into how we are developing, our growth journey and recent acquisitions and so on, it has very much to do with the changes that we see in the industry. It's not only about machining a component, it's very much looking at the whole manufacturing value chain. Part of our strategy to become a market leader is to take a leading position earlier in the decision process of our customers.

When you start to think about machine investments, you need to think about how you design a component, how you optimize the code, how you machine it in the best possible way and how you verify it in the end. The whole chain is of interest to us, and as customers change their behaviors and how they make decisions, we aspire to come in and be there earlier in that value chain.

I see this as representative of the kind of problem solving our yellow coats have done for years to support our customers. We also see more opportunities to support our customers much more through services: not just how to optimize and how to introduce lean and productivity improvement programs, but also other types of services as well. So that's where we are going, but it's also part of our DNA, so it's a very natural development.

MMS: Onsite problem solving has been a part of your formula. I guess part of what I'm hearing you saying is there’s an extent to which the yellow coats’ ability to solve problems is constrained if they don’t yet have access to the full range of what goes into building a process. There’s a limit to what the cutting tool is able to accomplish if the right choices aren't made early on in the process — and you're participating more in all of that. Are there challenges in the industry now that speak to this?

Blomqvist: One notable opportunity is the increased digitalization in the industry. You could also see the higher pace of electrification as a challenge for us as a company, but we choose to see this as an opportunity.

The components are changing in electric cars and battery applications. When you look at combustion engines, they’re very much standardized. That's where we come from, with standardized tools, standard inserts and all of those things. Electric cars are another type of business in the way that it's more customized, more project-type work with fast-paced design and manufacturing. It’s a more creative process.

So electric cars are a bit different, and then of course the aluminum material they use is different to machine than steel, carbon steel, cast iron or something like that. But this is nothing new to us — we have products on the market that support aluminum machining. Partnerships are also important for digitalization, meeting sustainability challenges and opportunities, and electrification. You cannot do everything by yourself; you need to develop partnerships to ensure you have the right competence plus the right people and suppliers in order to be successful in that business.

MMS: When you speak of the electric vehicle market as being more customized, that's interesting to me. With an internal combustion car, parts like a camshaft look the same for every company. But we haven't figured out the industry-standard way to make an electric car, and the experience you're having is that different producers have different ideas about how they want to make the same types of parts. And you need to respond to that.

Blomqvist: Yeah, exactly. That challenge creates interesting opportunities for improvement in our working processes. To meet them, we’ve grown organically, but also through acquisitions. Growth is also about our people, and something I think is important that we put a lot of attention to is creating a learning culture. This is super important for us to keep innovation and creation in the company. This culture empowers people so they are engaged and feel that they own their own development and can take control of it.

MMS:  Can you give me a sense of what a learning culture looks like when it’s implemented? What’s a distinctive element of Sandvik’s learning culture?

Blomqvist: First of all, I think it's very important to lead by example, to show everyone that it's okay to take the time for your own learning. That is what I expect everyone to do, and to make sure that they take responsibility for their own development plan. For example, I'm very open and share with the whole organization that I put 90 minutes every week in my calendar for my own learning.

I hope by doing that, I can inspire everyone and show that it's okay to take time for your own learning. I think this has been well-implemented in the organization, as my management team does the same. Different parts of the organization have learning days; some departments have Learning Fridays when they share their knowledge with each other. They read articles, take online training modules and do a lot of different things related to their job. It is important to upskill in the role you have, figuring out which areas you need to upskill to be more relevant to the company and do your job in even better ways. I think this makes employees feel engaged and empowered.

MMS: What does your 90 minutes of learning look like?

Blomqvist: I do a lot of different things. Last week, my management team and I underwent training about decision making, to make sure we are prepared to delegate important decisions — something easier said than done. But I also took my own training during the weekend when I was working out.

Frequently, I try to find people in the organization. Usually, they reach out to me, and want to share something they believe is important for me to know. Then I have 90 minutes with them, where they’ll teach me about it — the topic can be new products, offers, software, IT systems, production systems or anything like that. So I meet people, I take training together with my team and by myself, and then I also take LinkedIn and other online courses.