Smart Systems Are the Key to Competitive Manufacturing in Today's Complex World

Manufacturing stands at a crossroads, caught between technological opportunity and geopolitical uncertainty. Speaking with Augusto Vilarinho Head of Global Sales at Critical Manufacturing at APEX 2025, we dive into how manufacturers are navigating today's complex landscape while preparing for tomorrow's challenges.

The contrast between European and American manufacturing approaches reveals fascinating insights. While European manufacturers demonstrate strong commitment to reshoring operations, their American counterparts show enthusiasm tempered with hesitation—waiting for tariff clarity before making major investments. This wait-and-see approach makes perfect sense when planning for sustainable growth amid shifting regulations.

At the heart of modern manufacturing excellence lies the crucial integration between physical equipment and intelligent systems. As Augusto explains, "It's a time long gone where buying a new machine delivered a nice throughput." Today's competitive edge comes from contextualizing manufacturing data across operations, from supply chain to production floor. Critical Manufacturing's platform excels here, connecting disparate systems to create a unified view that drives intelligent decision-making.

Perhaps most valuable is how advanced Manufacturing Execution Systems help navigate complex supply chain decisions. When choosing materials, the lowest purchase price rarely tells the full story. By capturing contextualized information about how different materials perform in specific machines under various conditions, manufacturers can make truly informed decisions that balance cost against efficiency and quality. This holistic approach transforms manufacturing from a collection of isolated processes into an integrated ecosystem optimized for excellence.

Listen and explore how data-driven manufacturing is revolutionizing production across industries, and why those embracing these systems today will lead tomorrow's manufacturing renaissance. How is your operation adapting to these new manufacturing realities?

EMS@C-Level Live at APEX is sponsored by global inspection leaders Koh Young (https://www.kohyoung.com) and Creative Electron (https://creativeelectron.com)

EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)

You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.

Transcript

Comparing European and US Manufacturing

Philip Stoten 0:08

Hello, I'm Philip Stoughton. I'm here at Apex 2025 and I'm with Augusto on the booth of Critical Manufacturing. Augusto, pleasure to chat. We last spoke in Munich at Electronica. That's true, I'm kind of curious to start with the differences what you're seeing in terms of the differences in terms of demand here as opposed to in Europe?

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 0:34

Well, I think that in terms of demands for systems, there are not much differences. It's just a little bit more in terms of the current market situation and the willingness to take the next steps.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 0:50

So if in Europe we saw a little bit more of a solid approach and willingness, say we need to do something in Europe, we need to bring back manufacturing to Europe, and that's a kind of a common sentence and a common wording that we hear from everyone In this trade show, despite the fact that it's been quite a, I would have to say, successful trade show, although it's still one day to go compared with last year. We saw more people, we had more meetings already and still roughly one day to go. But at the same time not wanting to curse myself but we see also some hesitation in taking the next steps.

Market Hesitation and Investment Challenges

Philip Stoten 1:37

I think hesitation is a little bit unsurprising because I think you know I've talked to a lot of people about the tariff situation and I think talked to a lot of people about the tariff situation and I think there is a school of people, particularly in Mexico, for example, that want a specific outcome, but for everybody else it's much more about can I get some clarity, can I get some visibility so I can plan the future of my business and I can make investments?

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 2:00

And I think until we get that, it's really hard for the MS guys, and this is across, let's say, I would dare to say industries not only with electronics. Yeah, so we are together this week with our shareholder, asmpt, that basically sells the machines that we can connect to. But, yeah, the outlook, hopefully, will be positive. Yeah, we just need to be patient.

Philip Stoten 2:27

Yeah, I think so, and there's a sense that what's coming behind this is a bit of a renaissance in manufacturing and that desire to grow manufacturing in the USA and if you're going to have tariffs everywhere else, you're going to have to do that. That's something we'll have to live with, yeah, but there are challenges in doing that. There's a talent challenge challenge, and part of the way out of that talent challenge is much better automation of not just not just in terms of equipment but in terms of process business processes. Is that somewhere you feel you've really got a sweet spot to be able to help?

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 2:59

that relates to the, the efficiency that we want to introduce in the processes as an MES company Because, okay, the world is getting more and more competitive every day that passes. We have, let's say, almost I would dare to say, external factors related with the geopolitical situation, with the tariffs, with all the other things.

Philip Stoten 3:22

Everything else is going on.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 3:23

So I think that the fact and the manufacturing organizations, what they need to bet on if they want to stay competitive is that they're becoming more efficient, and that relates with investments that they need to make to put this strategy in place.

Europe's Shift Toward Defense Industry

Philip Stoten 3:43

Yeah, it becomes very challenging. And when you look at it from a European point of view, I don't know. We're in America. It's good to talk about what's going on in Europe as well. We've just seen the Germany elections. We've just seen everybody raising their debt ceiling for spend, particularly on defence. But also, I think Germany has just passed a bill of 900 billion, of which half is defence, half is infrastructure. Do you think that will drive a bit of impetus in Germany, but also in the rest of Europe?

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 4:16

It will, because then the industry is somehow adapting and transforming itself, in my view that's a personal view unfortunately transforming itself to a military. Yeah, to a military factor, or to a military, let's say, focus, yeah. So to that extent, if we abstract ourselves of that complication From the moral question yeah, there will be electronics factories producing military equipment. There will be assembly factories. There will be, even if you go back in the supply chain, semiconductors dedicated to aerospace and defense. Yeah. So a kind of war word for military right, yeah it has an impact.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 4:55

So the defense industry for us, if we abstract ourselves, is like any other type of industry With processes, with things that need to be optimized, that need to be standardized, so that's, of course, also an opportunity for companies like ours.

Philip Stoten 5:11

Yeah, I'm kind of with you on the moral question. What always upsets me, augusto, is that whenever there's a growth in defense spending, there's a reduction in aid spending, and I don't know why that's the column they always steal it out of, but it just feels like the wrong choice every time, ignoring that because we'll get into a big political area there, that's true.

MES Systems and Regulatory Compliance

Philip Stoten 5:34

Yeah, let's focus on the EMS companies for a moment. It feels like at the moment, because of where we are, they need to really create a footprint that's agile and that they can move product from factory to factory really quickly. Again, if they've got the right systems in place, they've got the right MES system, that's easier.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 5:53

Exactly so. That's a good segue, because that also relates to requirements that EMS companies need to fulfill in terms of regulatory requirements, for example. So more and more, such companies are compelled to invest in systems that, in one hand, ensure that compliance and I don't want to go back to the military term, but that's highly regulated in this industry. But if we go automotive- medical arena and so on.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 6:28

So those have quite, let's say, strict requirements that are imposed and the investment in a solution that needs to be integrated and needs to capture data, that needs to be able to deal not only with traceability but with the flexibility and the degree of information that the data is captured to optimize the processes is, in my view, of course, is a must, Because it's a long time gone where it's just as good as buying a machine and then the machine has a nice throughput and then I manufacture my parts.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 7:07

So those times are gone. So it needs to be a good combination between physical equipment and systems that connect. That provides the context, and the context is essential here. It's not only the machine data, it's also the process data. It needs to be contextualized and it needs to be kept for, of course, using that data for analysis and to apply intelligent algorithms to go towards the artificial intelligence capabilities. But you need all those things in a system. That's what you guys are doing.

Philip Stoten 7:44

I think one of the other areas that people have been talking to me about is they're still having a huge amount of pain with their supply chain. You know we've had that inventory bubble work its way through the system. That's been painful. We now have a lot of materials that we don't know where the tariffs are going to be on it, so that's complicated. So connecting everything they do all the way through their their goods inward process, through their purchasing process, has become a really important part of that system's thinking it it's.

Supply Chain Complexities and Tariffs

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 8:11

It adds another variable to the equation, at least another variable to the equation. But it also relates to that portion where the MES is a cornerstone, because in the MES you are consuming raw materials that are produced by a supplier and the supplier may come from a region where tariffs are applied and another supplier may not. But it's not only related to the cost of that raw material, because if that is related only to the cost, it's just by the cheapest.

Philip Stoten 8:47

Yeah but then it's about the landed cost.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 8:50

Yeah, and the quality and the performance. And then you process a certain material in a certain machine and then, by capturing this contextualized information, you probably realize that, although there is- some additional cost.

Philip Stoten 9:03

We're spending a dollar somewhere else.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 9:06

Exactly so that correlation of factors. I'm producing this raw material that is coming from a country where additional taxes are applied, but this product is working much more efficient in this machine at a certain temperature to produce this type of product, opposed to the other one that is cheaper. That is probably more efficient for lower-end products or whatsoever more efficient for lower end products or whatsoever, but at the same time works pretty well, in that all the machines that are from a different generation introduce the same quality of products.

Philip Stoten 9:37

This is why you need that holistic thinking isn't it you need that holistic thinking, but that holistic data to make better data-driven solutions, and that's essential.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 9:47

This is actually a point where we are strongly investing at the moment, because with our platform, with our data platform, we are not dealing only with the MES data. We are dealing with the rest of the data that we can get from equipment, that we can get from external systems, that we can get from DRP. That relates with the costing of the supply chain and different supply chain factors, with everything in a contextualized environment, in a standardized format. And then we apply learnings on top of that.

Augusto Vilarinho Head of Global Sales at Critical Manufacturing 10:18

And running scenarios and giving options and those learnings are a very important step towards the optimization of such processes.

Philip Stoten 10:26

Yeah, it makes a huge difference, augusto. I always enjoy our chats. We could talk all day. We shouldn't Thanks so much for your time and look forward to chatting next time. We could keep talking forever, Absolutely Until next time, okay.