How should companies design R&D teams and processes to create the best possible results? That’s the challenge that Babson College Professor of Innovation Management Gina O’Connor addressed in her talk at the Innovation Research Interchange’s annual conference back in June. The IRI is a division of the NAM that advances the field of innovation management by creating contemporary practices—in R&D and many other areas.
A common problem: In an extensive research project at Babson College, O’Connor worked with experts from Goodyear, Synthomer and Diageo to study companies and decipher best R&D practices. She noticed a recurring theme: R&D professionals were being used by companies to solve urgent technical issues rather than to discover and invent.
- “In many organizations R&D has this feeling of being an order taker and of having to solve problems that are finely tuned and narrowly scoped,” said O’Connor. “That erodes confidence—and eroded confidence reduces empowerment.”
Empowerment and autonomy: O’Connor described empowerment as the authority to determine which projects and initiatives to take on and what problems to tackle. Meanwhile, autonomy refers to the authority to make final decisions.
- So, what do R&D professionals need? According to O’Connor, most want a moderate amount of empowerment, but not complete control over what to do.
- “We want to make sure that there’s organizational commitment somewhere associated with what we are doing, but we don’t just want to be told what to do,” as she put it.
So, what works? O’Connor explained that organizations with structureless R&D systems often had erratic decision making, sudden disruptions and unexpected changes in direction that left employees feeling powerless.
- Similarly, organizations with R&D processes that were too formal were also alienating to employees, who felt there wasn’t any room for flexibility or discussion.
- In contrast, the best systems included strong project leaders, consistent back and forth between the R&D group and organizational leadership, constructive communication, clearly outlined goals and trust in employees.
A last piece of advice: Training and developing project leaders is among the most essential steps in achieving successful R&D, said O’Connor.
- “What you need to be doing as a team leader every day is checking in with every member of your team, seeing what they need, where they are, what has happened,” said O’Connor. “It has to be an interactive, interpersonal kind of a thing.”
Learn more: Head on over to the IRI website to check out more of its programs and events.
More companies are taking a disciplined approach to the growing threat of cyber attacks, according to a new cybersecurity survey from the Manufacturing Leadership Council. The MLC is the digital transformation arm of the NAM.
- The survey, which included input from 160 companies, indicates a dramatic change in how seriously manufacturers consider cyber threats compared to 2018, when the MLC last conducted the same survey.
Who’s prepared: Nearly 62% of manufacturing companies say they have a formal cybersecurity plan in place, according to the survey.
- That’s up from 2018, when barely 33% of manufacturers indicated they had devised and adopted formal cybersecurity plans that encompassed their plant floors.
- Nearly 40% of respondents said they had a high level of confidence in their internal cyber expertise, compared with just 25% who expressed such certainty in 2018.
More attacks expected: Yet even as better cybersecurity strategies are put in place, nearly 79% of survey respondents said they expect more attacks in the next year.
- That figure is up from 64% in 2018.
- The most frequently cited reasons for this prediction are increased levels of cyber crime and cyber terrorism and greater connectivity in manufacturers’ operations.
The effects on digital transformation: More than half the survey respondents expressed concern that cybersecurity issues could affect the speed and scope of digital transformation.
- 14% said cybersecurity could be a major obstacle in the next five years, with another 40% describing it as “an issue of concern.”
- Close to half—43%—said they consider cyber a part of doing business in a digitally transformed world.
Proactive measures: More manufacturers are taking advantage of publicly available safeguards, such as the NIST Cybersecurity Framework, to underpin their strategies.
- Nearly 58% of respondents said they have adopted the NIST framework, up from 48% in 2018.
- 45% said they have cyber insurance, compared to the 18% that said they had it in 2018.
The coming challenge: In the past four years, manufacturers have made significant strides to combat the growing problem of cyber attacks against the industry.
- However, manufacturers will need to stay a step ahead of cyber criminals as the number and sophistication of attacks increases.
See the survey: Review the survey findings for an in-depth look at how manufacturing leaders are thinking about cybersecurity in manufacturing’s digital era.
Get help: NAM Cyber Cover was designed specifically to provide enhanced risk mitigation and protection for manufacturers and their supply chains. Find out more at www.namcybercover.com.
Safeguarding intellectual property is possible even when patents are not stringently enforced, according to James Nebus, associate professor and chair of the business department at Suffolk University’s Sawyer School of Business. He discussed the topic at this year’s annual Innovation Research Interchange conference back in June. The IRI is a division of the NAM dedicated to advancing innovation management and creating best practices in the industry.
Protecting IP: In his keynote speech, Nebus outlined several actions taken by well-known companies to defend against patent infringement in “weak-enforcement countries.”
Raise barriers: One of the most successful strategies was raising the barrier to imitation, Nebus said. Companies that have used this method to guard against what Nebus called “product knowledge leakage” include DuPont and Dow. They have taken the following steps:
- Installed information technology defensive shields.
- Appointed trade secret managers.
- Conducted employee IP training.
Try a different barrier: Another way that companies have kept imitators at bay is to “bundle imitable products with complementary inimitable products,” according to Nebus.
- This is a strategy IBM began to employ many years ago. “When computer hardware first became a commodity, IBM … transformed themselves from a computer hardware company to a solutions and services company,” Nebus said.
- “And by doing that, they changed the parameters of the customer ‘buy decision’ from the price of the hardware to the value of the solution to their business.”
Advanced manufacturing: Another way to raise the “barrier to commercialization,” as Nebus calls it, is to use advanced manufacturing techniques that are not easily copied.
- Apple Inc. did this well in 2008, when it came out with its ultra-light, ultra-thin MacBook Air to compete with lower-cost Asian PC vendors, Nebus said.
- “The packaging technology that enabled that design … started with CNC, computer numerically controlled milling process, which at that time was really used for low-volume prototypes. They invested in manufacturing R&D to transform that process … to high-volume production,” he explained.
- “The imitators really couldn’t make that big investment, so Apple separated themselves.”
Parting thoughts: Nebus ended his talk with three takeaways for the audience.
- First, “an effective strategy consists of implementing the protection mechanisms necessary to raise one of the barriers above the abilities of the imitator.”
- Second, companies may require different strategies for different countries, especially if some are developed and others are developing.
- Finally, companies should decide where to locate headquarters not just “on economic factors. [Remember] to take IP risks into consideration.”
Learn more: Head on over to the IRI website to check out more of its programs and events.
Heading to the beach? Take along the Manufacturing Leadership Council’s summer reading list to catch up on today’s top trends in digital manufacturing while you catch some rays. With these articles, you’ll discover new ideas, technologies and best practices to give your company a competitive edge.
Workforce: Leading the Way to Workforce Optimization. As digitization changes employees’ expectations of their employers, manufacturers must adapt. Examples include options for remote work, interactive training, agile and rapid collaboration platforms, career development, work-life balance and more.
Industrial automation: Camozzi’s Autonomous Vision. Successful autonomous manufacturing will depend on the fundamental relationship between humans and machines, says Camozzi Group CEO Lodovico Camozzi, whose company makes industrial machinery. In a recent interview with the MLC, Camozzi shared his view of manufacturing’s autonomous future, including:
- How advanced additive manufacturing approaches promise new production paradigms;
- The importance of collaboration in driving innovation and excellence; and,
- Why the industry must maintain a human focus in today’s digital world.
Cybersecurity: Ransomware Attacks Increasingly Targeting Manufacturers. Think your business is safe from hackers? Think again. Ransomware attacks against manufacturers are on the rise. All businesses should be on guard against cyber extortion, advises Peter Vescuso, vice president of marketing for industrial cybersecurity provider Dragos and a member of the MLC.
Supply chain: How Manufacturers Can Navigate Supply Chain Challenges.
As global supply chain woes, worker shortages and wage inflation challenges intensify, manufacturers everywhere want to know the best way to navigate them. In this article, a panel of industry experts shares top tips to sustainably and profitably overcome current obstacles.
Artificial Intelligence: AI Roadmap: How Manufacturers Can Amplify Intelligence with Artificial Intelligence. Artificial intelligence offers manufacturers a host of benefits, including better visibility into supply chains, insights from predictive analytics and the ability to quickly respond to unexpected changes in demand. A six-step road map can help manufacturers looking to integrate AI into their businesses.
5G: 5G Will Help Unlock M4.0’s Potential. 5G technology offers speed and capacity advantages to manufacturing companies. According to the MLC’s recent Transformative Technologies survey, 26% of manufacturers have already invested in 5G technology. More than half expect to invest or are considering investing in the technology over the next two years to take advantage of 5G’s benefits.
Sustainability: Overcoming Roadblocks to Advance Sustainability Programs.
The manufacturing industry is expected to improve its sustainability and keep leading the fight against climate change. However, making green changes to processes and procedures can be costly. To get the most bang out of their sustainability investments, manufacturers should focus on data-driven initiatives and indicators.
Looking for more digital manufacturing insights? Browse the Manufacturing Leadership Journal for additional information on technology, organizational structure and leadership in manufacturing’s digital era.
San Diego, California – For their work to attract and maintain the manufacturing workforce, the Illinois Manufacturers’ Association won the 2022 Leadership Award from the Conference of State Manufacturers Associations. COSMA members also serve as the NAM’s official state partners and drive manufacturers’ priorities on state issues, mobilize local communities and help move federal policy from the ground up in all 50 states and Puerto Rico.
“I am so pleased to present the inaugural COSMA Leadership Award to the Illinois Manufacturers’ Association,” said Kris Johnson, president of the Association of Washington Business and chair of COSMA. “These are challenging times, but manufacturers in America have demonstrated once again, as they have throughout our nation’s history, that they are equal to the challenge. All manufacturers should be proud of the role they have played in navigating the pandemic, and the Illinois Manufacturers’ Association should be especially proud of the innovative ways it has helped its members address the workforce challenges we have all faced. Congratulations to my friend Mark Denzler and his talented team.”
The association’s recent achievements included its $7 million Manufacturing Jobs Campaign aimed at attracting students, veterans, communities of color, women, ex-offenders and other individuals to the manufacturing sector. They were also asked by Governor JB Pritzker to co-chair the state’s Equipment Task Force during the pandemic and appointed by Chicago Mayor Lori Lightfoot to lead the B2B Recovery Group that included manufacturing, transportation and warehousing, construction and utilities companies in the state.
“Mark is more than an inspirational colleague and true friend. He is an amazing representative for Illinois’ manufacturing workers on the national stage,” said NAM President and CEO Jay Timmons. “At a time when there are more than 800,000 open jobs in our industry, we need the efforts of groups like the IMA to help us find that next generation of talent and strengthen manufacturing competitiveness so that we can continue to lead our economy and our country toward a better future.”
In this inaugural year, the COSMA Leadership Award drew many extraordinary applications, each demonstrating how manufacturing associations across the country are rising to meet workforce and supply chain challenges in new and innovative ways.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Manufacturers flocked to Florida this summer to discuss the cultures, skills and technologies necessary for digital transformation at the 2022 Rethink Summit, the signature event of the NAM’s Manufacturing Leadership Council. The MLC is the world’s first member-driven, global business leadership network dedicated to senior executives in the manufacturing industry.
The big event: The first in-person Rethink since 2019, this year’s summit drew the largest crowd since the annual event began 18 years ago.
- The conference in Marco Island, Florida, hosted some of the most innovative leaders and teams in the industry, from companies such as Pfizer, Intel, Dow, Saint-Gobain and many more.
- Participants learned about real-world advances and shared best practices in supply chain resilience, effective business cultures, machine learning, business ecosystems and more—as explained by industry experts who put these innovations into practice themselves.
The panels: Here is a quick sample from the array of manufacturing expertise on offer.
- A Pfizer case study: Pfizer Vice President of Digital Manufacturing Mike Tomasco explained how Pfizer Global Supply transformed itself from a digitally siloed operation to a world-class digital powerhouse.
- Bridging the digital divide: A panel of leaders—including Graphicast President Val Zanchuk, BTE Technologies President and NAM SMM Board Chair Chuck Wetherington and Intel Senior Director of Industrial Innovation Irene Petrick—discussed how small and medium-sized manufacturers can keep up with the digital transformation occurring throughout the industry.
- Reaching the next generation: A panel of young manufacturing leaders from Dow, Cooley Group and Saint-Gobain North America discussed what young people are looking for in manufacturing jobs, including interdisciplinary teams and lots of communications up and down the organization levels.
A week of manufacturing: The Rethink Summit was only one highlight of a week of manufacturing events put on by the MLC. The roster of events also included the MLC’s Council Day and the ML Awards Gala.
- Council Day offers MLC members the opportunity to chart the agenda for the MLC’s next year, thus influencing how the whole industry thinks about and plans for digital innovation.
- The Awards Gala spotlights companies and individuals doing incredible work to advance M4.0. The black-tie event honored leaders and companies in 11 project categories, plus the Manufacturers of the Year and Manufacturing Leader of the Year.
- This year, the MLC named Pfizer CEO Dr. Albert Bourla the Manufacturing Leader of the Year, for Pfizer’s extraordinary and ongoing contributions in fighting the COVID-19 pandemic.
The last word: “[T]he fundamental shift in our economy to doing business digitally in all industries, including manufacturing, not only continues but is gaining greater speed and urgency,” said MLC Co-Founder David R. Brousell during an address at Rethink.
Join us next year: Keep up to date with the MLC by visiting the website and stay tuned for Rethink 2023!
Why is inflation happening now? What can we do about it? And how should manufacturers factor it into their plans for the future? The NAM’s Leading Edge program partnered with management consultant company Bain on a recent webinar that answered these questions and more. Here’s a quick recap.
Why it’s happening: According to Karen Harris, managing director of the Macro Trends Group at Bain, inflationary potential was building prior to the pandemic because of declining workforce growth around the world, underinvestment in energy and production and the concentration of supply chains with very few buffers in place.
- Today’s inflation, Harris said, is the result of that “inflationary potential” meeting a series of triggers, including the COVID-19 pandemic and Russia’s war in Ukraine—both of which have destabilized global markets and supply chains.
What it means: Jason Heinrich, a senior partner in Bain’s Chicago office, discussed the challenges that inflation poses to business owners.
- Among these are declining gross margins as costs of goods skyrocket; rapidly increasing labor, energy and input costs; difficult cash allocation decisions; lost sales if product availability decreases; and erosion of customer perception if price increases are too aggressive.
Strategies for success: Bain has analyzed thousands of companies over the past two decades to identify several successful strategies for accelerating performance during periods of disruption and providing future-proof against inflation.
- These strategies include expanding the CFO role to support the C-suite in navigating turbulent times; enhancing growth through customer engagement efforts; being strategic about price increases; building resilient and growth-focused supply chain operations; scaling and doubling down on automation as wages increase; and investing in building the best workplace to attract top talent in a difficult labor market.
- “The research that we’ve done over a couple of decades suggests that the firms and businesses that are on their front foot and playing offense in these periods of disruption outperform their peers over a long period of time,” said Heinrich. “These are moments of truths and moments of opportunity.”
Questions to ask: According to Harris and Heinrich, there are a few critical questions businesses should be asking in the current moment to help manage inflation challenges effectively, including the following:
- How robust is customer demand, and what changes do you anticipate in the next 12–24 months?
- How do you anticipate inflation will impact your business, and what actions can you take this quarter or over the next four quarters?
- How are you assessing resilience, and to what extent should you trade off efficiency for resilience?
- How can you evolve your strategic-planning process to be more dynamic?
Learn more: For more information, check out the full webinar here.
How the NAM can help: If you’re looking for resources to achieve time and cost savings, guard against inflation and help your business solve other current challenges, the NAM’s Inflation Resource Bundle for Manufacturers can help. Click here to find out how.
As the manufacturing industry continues to grow, manufacturers across the country are ensuring that older workers and company retirees have the support they need—including through health care options like Medicare Advantage.
What it is: Medicare Advantage Plans are offered by private insurance companies that have been approved by Medicare. They provide the same hospital and medical insurance as original Medicare, but with additional benefits—often including Part D prescription drug coverage, as well as vision, dental and hearing services. Medicare Advantage Plans also include a maximum out-of-pocket spending limit to offer additional protection.
- Medicare Advantage beneficiaries spend 40% less annually than those enrolled in Medicare Fee-for-Service, while also experiencing a 43% lower rate of avoidable hospitalizations for preventable complications, according to UnitedHealth Group.
- Employers have been able to take advantage of this health care model for retirees by offering what is known as Employer Group Waiver Plans.
Why it matters: Attracting and retaining a quality workforce is one of the most important challenges facing the manufacturing industry, especially as the industry confronts a labor shortage. Affordable and competitive health care benefits are one of many retention tools utilized by manufacturers.
- In 2021, 25.6% of the manufacturing industry’s workforce were 55 or older, while 5.3% were over 65, according to data from the Bureau of Labor Statistics.
- According to the NAM’s latest Manufacturers’ Outlook Survey, 80.7% of manufacturers cited the inability to attract and retain a quality workforce as a primary business challenge.
- The high-quality options provided by Medicare Advantage allow manufacturers to retain their older workers and keep them happy and healthy in their jobs.
What we’re saying: “Ninety-five percent of manufacturing employees were eligible for health insurance benefits in 2020, according to the Kaiser Family Foundation, while 99% of NAM members offer health benefits. Manufacturers are supportive of flexibility, expanding coverage options and enabling innovative models of care to maintain a healthy workforce and provide competitive benefits,” said NAM Director of Human Resources and Innovation Policy Julia Bogue.
For details on other ways manufacturers can retain older employees check out insights from the Manufacturing Institute and AARP here.
The Manufacturing Leadership Council—a division of the NAM that helps manufacturers leverage digital transformation—named Pfizer CEO Dr. Albert Bourla the 2022 Manufacturing Leader of the Year at the 18th annual Manufacturing Leadership Awards Gala.
The details: The ML Awards are the U.S. manufacturing industry’s biggest stage for recognizing excellence in digital manufacturing. Since the program’s founding in 2005, more than 1,000 high-performing projects and individual leaders have been honored with an award. Winners represent companies of varying sizes in a wide array of industries.
The big award: The Manufacturing Leader of the Year award was presented to Bourla for Pfizer’s extraordinary and ongoing contributions in fighting the COVID-19 pandemic.
- “Manufacturing in America today is stronger thanks to the leadership of Dr. Bourla and his team at Pfizer, including our Executive Committee member Mike McDermott,” said NAM President and CEO Jay Timmons. “Albert and Mike’s passion and dedication to defeating COVID-19 set an example for thousands of companies as our industry navigated and responded to the evolving pandemic, and their leadership and innovation will make us better prepared to respond to the next crisis.”
Other honorees: Awards were given to companies that excelled in various categories of manufacturing, including Protolabs for collaborative ecosystems, AB InBev for digital network connectivity and operational excellence, Dow for digital supply chains, General Motors for engineering and production technology, Flex and Johnson & Johnson for enterprise integration technology, AUO Corporation for sustainability and ALOM Technologies for transformative cultures.
Manufacturers of the Year: Protolabs was named the Small/Medium Enterprise Manufacturer of the Year, and AB InBev was named the Large Enterprise Manufacturer of the Year.
The last word: “Manufacturers continue to be the driving force for global economic recovery and pandemic response as they establish innovative ways to problem-solve in an increasingly complex environment,” said MLC Co-Founder, Vice President and Executive Director David R. Brousell. “Those recognized tonight have helped establish a roadmap for the future of the sector and highlight the importance of Manufacturing 4.0.”
The supply chain of biotechnology company AlloSource looks a bit different from the supply chains of other manufacturers—mostly because it hinges on the donation of human tissue.
A different kind of manufacturing: For nearly three decades, Colorado-based AlloSource has transformed donated human tissue from deceased individuals into transplantable products, or “allografts,” that surgeons can use to heal living patients.
- “Something that distinguishes AlloSource among manufacturers is [that] our base materials come from donated human tissue, which makes manufacturing very complex,” said AlloSource Chief Operating Officer Dean Elliott.
- “Donors vary in age, size and many other factors, so a lot of planning takes place to ensure the gift of tissue donation is fully maximized. Each allograft takes a different amount of time to create through a variety of unique processes.”
- Common tissue recovered for donation includes skin to treat burn victims and bones and ligaments for use in orthopedic procedures to restore mobility.
Meeting a need: AlloSource, which today is one of the largest providers of allografts in the world, was founded in 1994 by three organ procurement organizations “out of a need for expertise in transforming deceased human donor tissue into transplantable products,” Elliott said.
- Today AlloSource produces approximately 200 different types of allografts, which are used in surgeries ranging from spinal fusion to shoulder rotator-cuff repair.
- In 2021, the company used tissue from nearly 8,000 unique donors to place more than 200,000 allografts in all 50 states and in 25 countries.
How it works: Following the passing of a donor, a local tissue-recovery agency has just 24 hours to recover the tissue to be made into allografts.
- “One of the miraculous things that happens when someone dies is their cells stay alive—and as long as the tissue is recovered and sent quickly, AlloSource can preserve the tissue while keeping the cells viable,” Elliott said.
Always innovating: AlloSource has made great strides in its field over the past few decades. The company recently patented a method of decellularizing skin, a process that lowers the risk that an allograft will be rejected by a recipient. The method was developed by its R&D and engineering teams.
- This method “keeps our in-house cleanroom usage at a minimum while allowing for a higher volume of processing so that we have enough allografts available to help more patients,” Elliott said.
Meaningful work: At a time of record-high job openings, the biotech organization has a high level of employee retention—thanks to “our unique mission,” Elliott said.
- “We offer competitive pay and benefits and the opportunity to grow in an evolving medical field,” Elliott said. “But we also look for people who are driven by a mission of helping others—and that culture is ingrained in our day-to-day operations.”