As Eindhoven is reaching the limits of its growth, NTS is looking beyond. For some years now, the company has been focusing on growth at its hubs scattered across the globe, servicing a more distributed, local-for-local, supply chain. “In the past, the further east you went, the less complex the work became. That’s no longer true.”
NTS was formed in 2005 from the merger of Te Strake and Nebato. The former was an expert in machining and assembly while the latter specialized in sheet metal. Since that merger, NTS has worked its way up the value chain, transforming itself from a metal supplier into a first-tier mechatronic partner to high-tech players like ASML. Today, NTS is no longer only based in the Netherlands but also in China, Singapore, the Czech Republic and the United States. These sites are becoming important design and production centers of their own.
In Singapore, for example, NTS is now a first-tier mechatronics supplier. “There, we recently built a wafer transporter for a customer,” says CEO Tjarko Bouman. “That was a fully mechatronic assembly, which went straight into the cleanroom. An important improvement step for us because just a few years ago, doing projects like this wasn’t the standard in Singapore. We’ve grown to become a mechatronics system supplier there.”
That transformation to a full-fledged mechatronic manufacturer started about a decade ago, first around Eindhoven and then at other NTS sites like the one in Singapore. This process was driven by increased customer demand. “Customers like ASML have tightened their demands on suppliers enormously over the past decade,” says Roald Dogge, head of sites at NTS. “That’s quite a burden to manage, but it has also pushed us forward.”
“The first step is that customers let you make parts or applications,” adds Bouman. “Then it becomes the submodule. And eventually, we make the module itself. We’ve really grown up together with our customers. The complexity of modules and products has increased enormously. Customers no longer call us to make a simple piece of metal, so to speak.”
In turn, the transition also meant giving up some parts of the business. “Today, we still make some parts internally, particularly the difficult ones,” Dogge points out. “The generic production, however, is done at other companies. General machining, for example, we no longer do because we can’t compete with the typical jobbers. Only for precision and ultra-precision machining we still do the work ourselves.”
An important future trend NTS sees is what it calls “local-for-local.” Instead of a global supply chain, regional production centers will arise all across the world, each with its own local subcontractors. “Because of all the disruptions in recent years, such as COVID and the war in Ukraine, you see a trend toward local-for-local,” notes Bouman. “That’s compounded by geopolitical tensions around semicon. In my opinion, we’ll see more local production in the next 5-10 years, with an integrated local supply chain. Not just in semicon but also in other industries. The way that current supply chains are organized will change profoundly.”
That’s why NTS is developing and growing its sites across the world. Each of those centers needs to become a local supplier that can work at the same level as the sites in the Netherlands. “It’s not something for the distant future,” says Bouman. “I think we’ll move relatively fast toward a local-for-local world. Therefore, it’s also important to have a certain intimacy with your customers. It can take years to set up a separate supply chain in Asia. So you need to work closely with them to align investments.”
Growth in and around Eindhoven, particularly for companies like ASML and Thermo Fisher, might also be reaching its limits. “I think further growth in the Eindhoven region is almost impossible,” Bouman states. “The infrastructure and labor supply alone are reaching their limits. And then there’s also the geopolitics. Having different centers around the world makes more sense.”
Being present in a number of locations around the world already makes it easier for NTS to adapt to customer needs. The company just expanded its location in Singapore, and its site in the Czech Republic is already servicing customers such as ASML and Thermo Fisher at a high level. “We also make parts for ASML in the Czech Republic,” says Bouman. “This is partly driven by the need for more capacity that’s no longer available in the Eindhoven region. Of course, it’s an eight-hour drive, but all in all, that’s not too bad.”
This local-for-local world will mean that the different sites of NTS will need to increase their technical expertise. “Our sites will become much more similar to each other,” Dogge indicates. “In the past, Eindhoven was the highest level, and the further east you went, the less complex the work became. Today, we’re developing all our sites into vertically integrated hubs with key development and engineering elements. They have to play the same role in their region as the sites in the Netherlands do here. That’s really a different mindset. Each of our sites has to further develop their competencies to the highest level. Today, for instance, we’re further extending and developing our ultra-precision capacity in the Czech Republic. We’re accelerating local ecosystems.”
Sometimes this will also mean that products developed in one place need to be transferred to another site. “We can help design and develop a product, and then transfer all the knowledge to another part of the world,” says Dogge. “We can organize that transfer internally. We can also facilitate those processes when the product isn’t yet mature and support it from a design and engineering viewpoint. You also see this at ASML. During product development, the company likes to have its D&E close. We have D&E functions at almost all of our factories worldwide.”
Having local D&E capabilities mirrors the approach ASML takes. “In the past, we already had D&E as part of the organization, which was called systems development at the time,” Dogge explains. “But it was more of a separate activity. Today, D&E is integrated into each one of our sites, which they use to develop products but also to improve them once they’re in production.”
Crucial to the transformation of NTS was developing an engineering culture. This was partly driven by the acquisition of Braincenter in 2010. “The line between engineering and production is increasingly being diluted,” says Dogge. “That’s also what the customer expects. They want the two to merge. We have customers who give us complete TPD ownership, where we also solve end-of-life issues or revive a product that hasn’t been produced for a decade. The business for our D&E activities almost completely overlaps the business we acquire for production.”
NTS is ambitious and aims for strong growth in the coming years. “We want to double our size in the next 4-5 years,” says Bouman. “This matches the ambitions of our customers. It’s a precondition to continue playing the role of a first-tier supplier. For NTS, that growth will mainly be found outside the Netherlands. Eindhoven and Hengelo are still the leading sites. That’s where we can land the latest developments and high-quality applications. But from there, we can also let the other sites develop along with their customers and roll out those innovations all over the world. That will be the crux of our business in the coming years.”
This article was written in close collaboration with NTS.