# Machinery and equipment: Value chain, from upstream to the customer Machine tools, construction and mining equipment, tractors, pumps and process plant Source page: https://www.materialinsights.org/industries/machinery/value-chain/ #### Value chain, from upstream to the customer **Criticality to the chain:** 5 · Chokepoint 4 · Critical 3 · Important 2 · Supporting 1 · Commodity service Stage 1 **Materials and castingsFoundries, forging shops and special-steel mills**3 · Important Supply cast iron housings, forged shafts and gears, and alloy and tool steels that form the heavy structure of every machine. **Why important:** Many foundries exist, but large castings and qualified forgings need months of pattern and approval work to re-source. Technologies Sand and investment casting Closed-die forging Heat treatment Alloy and tool-steel melting Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/)[Fe Iron ore](https://www.materialinsights.org/commodities/iron_ore/)[Mo Molybdenum](https://www.materialinsights.org/commodities/molybdenum/)[Cr Chromium](https://www.materialinsights.org/commodities/chromium/)[W Tungsten](https://www.materialinsights.org/commodities/tungsten/)[Qz Silica sand](https://www.materialinsights.org/commodities/industrial_sand/) Chemicals [O2 Oxygen](https://www.materialinsights.org/chemicals/oxygen/) Energy [Kc Coking coal](https://www.materialinsights.org/energy/coking_coal/)[EH Electric heating](https://www.materialinsights.org/energy/e_electric_heat/)[HI Energy-intensive industry](https://www.materialinsights.org/energy/e_heavy_industry/) Industries [Metal products](https://www.materialinsights.org/industries/metal_products/)**Examples:** Bharat Forge, Kalyani Steels, voestalpine, Georg Fischer Stage 2 **Components and subsystemsBearing, gear, hydraulic and seal makers**4 · Critical Make the precision mechanical parts that transmit power and motion: bearings, gearboxes, hydraulic pumps and valves, seals. **Why critical:** Large and precision bearings and high-pressure hydraulics come from a handful of European, Japanese and US firms, with long lead times. Technologies Precision grinding Hydraulic pumps and valves Gear cutting and hobbing Sealing elastomers Condition monitoring sensors Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/)[Cr Chromium](https://www.materialinsights.org/commodities/chromium/) Chemicals [Lub Lubricant additives](https://www.materialinsights.org/chemicals/lubricant_additives/)[EPDM EPDM](https://www.materialinsights.org/chemicals/epdm/)[PTFE Fluoropolymers (PTFE, PVDF)](https://www.materialinsights.org/chemicals/fluoropolymers/) Energy [MPT Mechanical power transmission](https://www.materialinsights.org/energy/e_mechanical_transmission/)[HI Energy-intensive industry](https://www.materialinsights.org/energy/e_heavy_industry/) Industries [Metal products](https://www.materialinsights.org/industries/metal_products/)[Plastic and rubber products](https://www.materialinsights.org/industries/plastic_rubber/)**Examples:** SKF, Schaeffler, Bosch Rexroth, Timken India **Motor, drive, CNC and automation-control makers**4 · Critical Supply electric motors, variable-speed drives, servo systems, CNC controllers and PLCs that make machines move precisely and talk to factory systems.^[2](https://iea.org/reports/rare-earth-elements/executive-summary) **Why critical:** CNC controls are dominated by a few firms such as Fanuc, Siemens and Mitsubishi, and servo motors rely on China, which made 94% of sintered rare-earth magnets in 2024^[2](https://iea.org/reports/rare-earth-elements/executive-summary). Technologies Permanent-magnet servo motors Variable-frequency drives CNC controllers Programmable logic controllers Industrial networking Depends on Commodities [Cu Copper](https://www.materialinsights.org/commodities/copper/)[REE Rare earths](https://www.materialinsights.org/commodities/rare_earths/)[St Steel](https://www.materialinsights.org/commodities/steel/) Chemicals [EPX Epoxy resins](https://www.materialinsights.org/chemicals/epoxy/) Energy [Mot Electric motors and drives](https://www.materialinsights.org/energy/e_motors/)[PE Transformers and power electronics](https://www.materialinsights.org/energy/e_power_electronics/) Industries [Electrical equipment](https://www.materialinsights.org/industries/electrical_equipment/)[Semiconductors](https://www.materialinsights.org/industries/semiconductors/)**Examples:** Siemens, Fanuc, ABB, Mitsubishi Electric, CG Power and Industrial Solutions **Diesel engine and powertrain makers**3 · Important Build the off-highway diesel and gas engines, transmissions and axles that power construction, mining and farm machines, gensets and compressors. **Why important:** A few global engine families (Cummins, Deutz, Weichai, Kubota, Perkins) are designed into each machine, so changing engine means re-certifying emissions and redesigning the engine bay. Technologies Common-rail diesel engines Emission after-treatment (CEV and Stage V) Powershift transmissions Hybrid and electric drivelines Hydrogen and gas engines Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/)[Al Aluminium](https://www.materialinsights.org/commodities/aluminum/)[Pt Platinum](https://www.materialinsights.org/commodities/platinum/) Chemicals [PGM Autocatalysts](https://www.materialinsights.org/chemicals/autocatalysts/)[Ur Urea](https://www.materialinsights.org/chemicals/urea/) Energy [ICE Internal combustion engines and gensets](https://www.materialinsights.org/energy/e_engines/)[Oil Crude oil](https://www.materialinsights.org/energy/crude_oil/) Industries [Metal products](https://www.materialinsights.org/industries/metal_products/)[Electrical equipment](https://www.materialinsights.org/industries/electrical_equipment/)**Examples:** Cummins, Cummins India, Kirloskar Oil Engines, Weichai Power, Deutz Stage 3 **Production equipmentMachine-tool and industrial-robot builders**4 · Critical Build CNC lathes, machining centres, presses, lasers and robots that machinery makers (and every other manufacturer) use to cut and form metal. **Why critical:** High-precision machines come mainly from Japan, Germany, Switzerland and Taiwan, China is the largest producer by volume, and custom high-end machines are built to order over many months. Technologies 5-axis machining centres Fibre laser cutting Servo presses Industrial robots Additive manufacturing Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/)[W Tungsten](https://www.materialinsights.org/commodities/tungsten/)[Abr Abrasives](https://www.materialinsights.org/commodities/abrasives/) Chemicals [Lub Lubricant additives](https://www.materialinsights.org/chemicals/lubricant_additives/) Energy [Mot Electric motors and drives](https://www.materialinsights.org/energy/e_motors/) Industries [Electrical equipment](https://www.materialinsights.org/industries/electrical_equipment/)[Software and IT services](https://www.materialinsights.org/industries/software_it/)**Examples:** DMG Mori, Yamazaki Mazak, Trumpf, Ace Micromatic Group Stage 4 **Machinery OEMsConstruction and mining equipment makers**3 · Important Design and assemble excavators, loaders, cranes, dump trucks and drill rigs for contractors and miners. **Why important:** A dozen global brands compete and Chinese makers have cut prices, but big mining trucks and tunnel-boring machines still have few suppliers. Technologies Hydraulic excavators Diesel and electric powertrains Telematics and autonomy Large-component remanufacturing Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/)[Mn Manganese](https://www.materialinsights.org/commodities/manganese/) Chemicals [Pnt Paints and coatings](https://www.materialinsights.org/chemicals/paints_coatings/)[Lub Lubricant additives](https://www.materialinsights.org/chemicals/lubricant_additives/) Energy [ICE Internal combustion engines and gensets](https://www.materialinsights.org/energy/e_engines/)[Oil Crude oil](https://www.materialinsights.org/energy/crude_oil/) Industries [Metal products](https://www.materialinsights.org/industries/metal_products/)[Electrical equipment](https://www.materialinsights.org/industries/electrical_equipment/)**Examples:** Caterpillar, Komatsu, SANY, JCB India, BEML **Pump, compressor and process-machinery makers**3 · Important Make pumps, compressors, valves, boilers, packaging and process lines used in water, chemicals, food and power plants. **Why important:** Many capable suppliers exist, but engineered equipment is project-specific and switching mid-project is costly. Technologies Centrifugal and screw compressors High-efficiency pumps Heat exchangers Packaging machines Digital twins Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/)[Ni Nickel](https://www.materialinsights.org/commodities/nickel/)[Cu Copper](https://www.materialinsights.org/commodities/copper/) Chemicals [PTFE Fluoropolymers (PTFE, PVDF)](https://www.materialinsights.org/chemicals/fluoropolymers/) Energy [Mot Electric motors and drives](https://www.materialinsights.org/energy/e_motors/)[HX Heat exchangers and pinch integration](https://www.materialinsights.org/energy/e_heat_exchangers/) Industries [Metal products](https://www.materialinsights.org/industries/metal_products/)[Electrical equipment](https://www.materialinsights.org/industries/electrical_equipment/)**Examples:** Atlas Copco, Alfa Laval, Kirloskar Brothers, Thermax **Tractor and farm-machinery makers**2 · Supporting Build tractors, harvesters and implements and sell them through dealer networks, often with financing. **Why supporting:** Competitive market with many brands and wide dealer networks, so buyers switch easily. Technologies Diesel tractors Precision agriculture and GPS guidance Combine harvesters Electric small tractors Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/)[Rbr Natural rubber](https://www.materialinsights.org/commodities/rubber/) Chemicals [Pnt Paints and coatings](https://www.materialinsights.org/chemicals/paints_coatings/) Energy [ICE Internal combustion engines and gensets](https://www.materialinsights.org/energy/e_engines/)[Agr Energy in farming](https://www.materialinsights.org/energy/e_agri_energy/) Industries [Metal products](https://www.materialinsights.org/industries/metal_products/)[Plastic and rubber products](https://www.materialinsights.org/industries/plastic_rubber/)**Examples:** Mahindra & Mahindra, Deere & Company, TAFE, Escorts Kubota, CNH Stage 5 **Automation and integrationAutomation system integrators and industrial-software vendors**3 · Important Combine machines, robots, sensors and software into working production lines and keep them connected and updated. **Why important:** Many integrators exist, but platform software ties customers to a vendor for years. Technologies PLC and SCADA programming Manufacturing execution systems Industrial IoT Simulation and digital twins Machine vision Depends on Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Computers and electronics](https://www.materialinsights.org/industries/computers_electronics/)**Examples:** Rockwell Automation, Siemens Digital Industries Software, Dassault Systemes, Tata Elxsi Stage 6 **Sales, finance and aftermarketEquipment dealers, rental fleets and service providers**2 · Supporting Sell, rent and service machines, stock spare parts and rebuild components for end users. **Why supporting:** Dealers are franchised per brand, but rental and independent service options make switching quick. Technologies Fleet telematics Parts logistics Remanufacturing Predictive maintenance Depends on Chemicals [Lub Lubricant additives](https://www.materialinsights.org/chemicals/lubricant_additives/) Energy [Oil Crude oil](https://www.materialinsights.org/energy/crude_oil/) Industries [Transport and logistics](https://www.materialinsights.org/industries/transport_logistics/)**Examples:** United Rentals, Sunbelt Rentals, Gainwell Engineering, Sanghvi Movers **Equipment financiers and lessors**3 · Important Lend to or lease machines to contractors, farmers and factories, taking the machine as collateral. **Why important:** Most buyers cannot pay cash, so credit tightening quickly cuts sales, though lenders compete. Technologies Asset-backed lending Telematics-based credit monitoring Residual-value models Depends on Industries [Finance: banking, insurance, markets](https://www.materialinsights.org/industries/finance/)**Examples:** Caterpillar Financial, Shriram Finance, Sundaram Finance, Mahindra Finance ## Other sections - [Overview](https://www.materialinsights.org/industries/machinery/index.md) - [Where ₹100 goes](https://www.materialinsights.org/industries/machinery/cost-mix/index.md) - [Price links with suppliers](https://www.materialinsights.org/industries/machinery/price-links/index.md) - [Example story](https://www.materialinsights.org/industries/machinery/story/index.md) - [Linked industries](https://www.materialinsights.org/industries/machinery/linked-industries/index.md) - [Materials drawn on](https://www.materialinsights.org/industries/machinery/materials/index.md) - [Chokepoints and risks](https://www.materialinsights.org/industries/machinery/risks/index.md) - [Sources](https://www.materialinsights.org/industries/machinery/sources/index.md)