Equipment Manufacturing Trends for 2025

What Does Equipment Manufacturing Involve?

Equipment manufacturing begins with research and development to update existing equipment or create new designs based on industry trends or specific customer requirements.

Prototyping and testing further refine designs and ensure functionality and performance. During production, equipment fabricators implement rigorous quality control and compliance measures to meet industry standards and regulatory requirements. Fabricators perform factory acceptance testing (FAT) to provide another level of reassurance that the equipment will perform to its specifications in the customer’s application.

“Newly manufactured equipment is distributed to customers through various channels, accompanied by after-sales support such as maintenance, warranties, and customer service to ensure long-term reliability and performance,” says Jason Schroeder, program manager for Anderson Dahlen (ADI), which provides specialty alloy fabrication and custom equipment manufacturing services for Gray’s Specialty Equipment segment.

Customization on the Rise

Increasingly, customers want equipment manufacturers to assist in design, “especially if it includes special materials, unique features, integration of robotics and automation, or miniaturization,” says Schroeder. This is typically done during Design for Manufacturability (DFM), a stage when manufacturing partners and key vendors from the supply chain collaborate to share their expertise, resulting in a design that meets all performance parameters at the lowest possible cost.

“We specialize in custom processing solutions,” says business development manager Bo Couch for AD Process Equipment, which comprises the other half of Gray’s Specialty Equipment segment. “We work best when collaborating directly with the customer throughout the design and equipment specification phase. Communicating with contacts who are on the plant floor every day is extremely valuable for streamlining the design process.”

With customization, the goal is to design and build process equipment and controls that meet each customer’s unique needs and seamlessly integrate into production lines and processes. For example, in a project with Gray and Kraft Heinz, “we designed the ingredients-blending system so that the batch system process supplied material at just the right rates to neither starve nor flood the continuous production line with material,” says Garreth Condron, business development manager for AD Process Equipment. “The project required equipment to be custom-designed with a unique assembly procedure so it could fit within the plant’s limited available space.”

Vertical Integration Going Up

Another major factor driving changes in equipment manufacturing is time to market. Vertical integration, which brings more manufacturing services under one roof, can greatly improve overall quality and speed to market by shortening the supply chain and improving decision-making—major advantages in a competitive market. A shortened supply also reduces the risks of mishaps, delays, and scheduling or inventory issues.

Vertical integration is often achieved through the acquisition of a key supplier, adding the company’s equipment and experienced staff for increased in-house capacity. “We are regularly asked to provide new equipment for pressurized tanks and vessels,” says Couch. “Having the capability to handle this in-house is a huge benefit in retaining customers.”

Perhaps the biggest competitive advantage of vertical integration is faster and more-informed decision making. Helping customers manage vertical integration is another benefit of partnering with an experienced equipment fabricator. “Customers may initially come to us simply looking for equipment to vertically integrate their supply chain,” says Condron, “but integrating non-core competencies can sometimes lead to internal knowledge gaps. More and more often, we’re offering our customers turnkey solutions with engineering services included to address these gaps and promote efficiency and long-term operability.”

Managing Cost

The hottest segments in equipment manufacturing are lithium battery materials production, specialty chemicals (polymers and engineered lubricants and chemicals), cosmetics, and food & beverage. Growth in these segments presents valuable opportunities for equipment manufacturers to broaden their offerings, develop new partnerships, and gain market share in rapidly growing industries.

An important piece of this strategy involves exploring measures to improve production quality and efficiency and keep costs down. Lately, these adjustments are often driven by the Internet of Things (IoT), which can improve efficiencies across all stages of the production process, including better utilization of machines on the factory floor.

Cost-saving measures on the equipment manufacturing side also support another broad trend across the industrial sector: the postponement of large, expensive projects to save capital. Amid current economic uncertainty, industrial businesses are more frequently pursuing smaller scoped projects, such as upgrading existing production lines, which can often be funded from a facility’s budget rather than through corporate capital expenditure budgets.

Furthermore, customers want to minimize or eliminate plant downtime altogether when installing new equipment. This leads to the need for comprehensive factory acceptance testing (FAT) to ensure equipment performs as designed before shipping to site. “FAT is crucial for validating performance and ensuring customer equipment can begin operating quickly once it arrives on site. Sometimes, advanced simulation programs are used to replicate a real-life environment during FAT, which further speeds the process,” says Condron.

Partnering to Address Labor Shortages

Labor shortages and skills gaps continue to be pressing challenges for the industrial sector. Many experienced workers in manufacturing, agriculture, and other industrial businesses are retiring, and there aren’t enough skilled workers moving into these jobs to meet each business’s operational needs. This lack of knowledgeable, experienced labor severely limits and can even eliminate companies’ in-house equipment design and maintenance capabilities.

This problem can, in part, be mitigated through the use of IoT technologies such as automation, “which can significantly offset the diminishing and less experienced workforce in manufacturing by taking over repetitive, hazardous, and time-consuming tasks,” says Julie Davis, senior vice president of People Strategy for the Association of Equipment Manufacturers. “This allows human workers to focus on more complex and strategic activities that require critical thinking and problem-solving skills.”

Yet automation and IoT alone aren’t enough to fully mitigate the experience gap. This is where an equipment design-build partner can prove to be an invaluable asset. Experienced fabricators fill the gap in expertise, designing and building systems that help customers keep pace with increasing demand and initiatives to boost production and throughput capacities.

These benefits extend to onsite commissioning, startup and technical support, and maintenance—services that underscore the value of developing long-term relationships rather than awarding one-off bids for the sake of cost or convenience.

As customers bring more complex and challenging designs to the table, they seek partnerships with experienced equipment manufacturers and key supply chain partners. Partnering with an experienced, well-staffed equipment manufacturer can mitigate issues that arise up with design, cost, scheduling, and labor, as well as provide ongoing support for reliable products that are purpose-built and factory-tested.