The dynamic role of conveyor belt systems in the tire industry

When comparing the tires of an old Volkswagen to the tires of a new Formula Sauber, it can be hard to believe that there is not much difference in how the tires are made for each car. From racing cars to minivans, the multifaceted and trusted process of tire manufacturing is essential to ensure the smooth running of the race car from point A to point B. The automotive tire industry is a truly global market. Its parts are manufactured all over the world and then dropshipped, assembled, and delivered to the individual's vicinity. Although the individual components of the tire come from different sources, the manufacturing process is largely the same throughout the process, even across international borders.

Growth in the face of external threats
The United States is one of the automotive tire markets. Well-known global brands such as Bridgestone, Goodyear, Michelin and Continental are currently producing large quantities of tires in the United States. Recent forecasts show that United States demand for tires will grow by more than 5% from 2016 to 2021. This growth projection, while not drastic, is very popular because over the past few years, the tire manufacturing industry has been affected by foreign competition such as the rise in imports, raw material prices, and the appreciation of the US dollar. Threats from foreign manufacturers and competition from the Chinese market have forced United States manufacturers to develop new strategies and explore practices that will help them maintain prominence in the global market.

Reaction to foreign markets
In the past few years, large Chinese tire manufacturers have entered this market and offer high-quality products at lower prices. This shift in production has played a role in the overall growth of the region and its dominance in terms of global market share.

Competition from China has been an important catalyst for United States manufacturers and system integrators to evaluate alternative practices to keep up with Chinese production. In order to protect the tire industry, the United States government even imposed a 17. 7% to 81. 3% tariff, but the impact of tariffs remains to be seen, as the cost of raw materials plays a very important role. The solution to this problem has been hotly debated, but analyst Nick Mitchell laid out his predictions for the United States tire industry in 2017 in an interview, predicting that "any success in reducing China's low-quality capacity will be a huge victory."

With increasing pressure to keep pace with foreign producers, United States tire manufacturers are investing in distribution and automation solutions, two strategies to restore margins, reduce costs, and significantly improve intralogistics performance. In the face of foreign competition, finding solutions to improve overall efficiency has become a top priority for tire manufacturers and system integrators. Distribution and automation are the new focus, and the actual tire production process will remain relatively unchanged: the most important change, though, will be the way tires are handled and transported within the factory, an area where United States manufacturers are focusing on quickly gaining a competitive advantage.

Shift from B2B to B2C Another trend
forcing automation is the industry's shift from B2B to B2C. It is estimated that only 25% of the tires are used for the initial installation of the car, with the remaining 75% going for replacement or customization, and most of the interaction now takes place between the manufacturer and the end customer. In light of this, tire manufacturers are investing in improving the distribution process to deliver tires to end customers more efficiently.

Similar to the trends occurring in e-commerce operations, online tire sales are also expected to grow significantly in the B2C market. Frost & Sul Ivan analysts predict that tire e-retailing will gain a significant advantage in the North American and European tire aftermarket, and that "the market share of traditional tire retailers will decrease as B2B and B2C customers shift to tire e-tailers."

Other expert forecasts in the industry are aligning with these predictions, estimating that sales of electronic tires will reach 40% of the market in the coming years. Mr. Kevin Rohlwing, Senior Vice President of Training at the Tire Industry Association, said there is no doubt that the sales of electronic tires for tire manufacturers is the most important trend in the industry.

To adapt to this trend, traditional tire retailers are transforming the buying experience by reducing their physical footprint and migrating to digital-only stores (or digital stores with in-store options) to keep pace with e-tailers. With the new combination of purchasing options, consumers may be able to use both online and offline store options before purchasing replacement tires. Manufacturers who make these changes early will pave the way for a new B2C tire industry.

As consumer demand becomes the driving force behind tire manufacturing and shipping to retailers, manufacturers are modernizing solutions and systems to get their products through their distribution centers. Installing smart conveyor systems has emerged as a successful solution that helps manufacturers adapt to changing customer environments and scale effectively to cope with growing demand, resulting in online sales and returns that correspond to the dynamics of the B2C market.

Looking to the future
As with any industry, it's important to understand current trends and make a forecast for the future so that you can have a strong understanding of how potential factors may affect or threaten your business.

As the tire and automotive industries continue to change, manufacturers and system integrators should continue to look for ways to update compositions, properly equip plants, and redesign production lines. Those that can easily adapt and embrace automation will quickly gain market share.