How is digitization changing manufacturing? What can manufacturers do to stay competitive in a fast-shifting world? What does the future look like—and how can leaders prepare for success?
Those are the kinds of questions being asked and answered by the NAM’s Manufacturing Leadership Council—a member-driven global business leadership network focused on the intersection of manufacturing and technology. We spoke with David R. Brousell, MLC co-founder, vice president and executive director, who gave us more insight into what the MLC is, how it works and why it matters today more than ever.
An early start: The idea for the MLC was born nearly two decades ago, when manufacturers began turning to consumer technologies to strengthen their businesses.
- The convergence of these technologies with traditional operational technologies on factory floors sparked an idea. Brousell, who was running a publication called “Managing Automation,” recognized the trend—which he called “Progressive Manufacturing”—and founded an annual conference for manufacturers to discuss new approaches and best practices for the future.
- By 2008, that conference had given rise to a council designed to offer useful programming for manufacturers on the future of digitization. Ten years later, the council became a part of the NAM.
- “We realized that digitization was not a tactical or small change—it was a fundamental change in the industry,” said Brousell. “It was clear that manufacturers needed an informational resource or organization to bring them together to deal with what we now call Manufacturing 4.0 in a systematic way.”
A systematic approach: Today, the MLC represents what Brousell calls “the digital transformation arm of the NAM,” helping manufacturers meet future needs and address ongoing trends—through changes in technology, organization and leadership.
- “The transition to the digital model of manufacturing is only one part technical,” said Brousell. “The harder part is changing the organizational structure to be more collaborative and decentralized and making the leadership approach digital-first. We’re probably the only organization that has looked at it this way, in a systematic way, beyond technology alone.”
A critical focus: Every year, the MLC lays out a member-approved set of critical issues involved in the transition to Manufacturing 4.0 and offers resources and programming from thought leadership to plant tours to the Rethink Summit.
- This year’s critical issues include topics like factories of the future; transformative technologies, including AI and machine learning; augmented reality and virtual reality; Manufacturing 4.0 cultures; and cybersecurity.
A broad view: Digitization isn’t just an issue for individual manufacturers. Because manufacturing is so vital to economic and societal growth, it’s also important to the future of the United States and the world.
- “Manufacturing is one of the fundamental drivers of social and economic prosperity,” said Brousell. “Its growth will lead to a better life for people. No other industry can say that. And I believe that the countries whose companies are most successful in making the transition to the digital model are going to be the powers of this century. There’s a lot riding on this.”
Sign up: Come learn from leading manufacturers at the Rethink Summit, June 27–29, in Marco Island, Florida. It’s the premier event for senior operational executives and their teams as they continue to navigate disruption.
Supply chain disruption could continue for more than another year, according to the newest Resilient M4.0 Supply Chain survey conducted by the NAM’s Manufacturing Leadership Council. The MLC is the digital transformation arm of the NAM.
What’s the holdup? A combination of factors is causing fundamental shifts in supply chain approaches across the industry. These include pandemic lockdowns, blocked shipping lanes, container scarcity, material and component shortages, extreme weather events, rising prices and military conflict.
What manufacturers are doing about it: Supply chain organizations are reassessing traditional supply chain strategies, reducing network complexity and integrating key functions.
- They are also redesigning processes and harnessing the power of digital tools to transform their supply chain ecosystems.
Universal disruption: Even supply chain structures with some local or regional networks have been affected by recent events, according to the MLC’s survey.
- Ninety percent of respondents reported suffering either significant (52.5%) or partial (39%) disruption in the past two years. Just 0.5% said they had seen no disruption.
Improving resilience: While many manufacturers have taken action to reduce supply vulnerabilities, 73% of companies said their current supply chains are not fully protected, and 12% said they believe their supply chains lack resilience.
Integrated supply chains: While today just 19% of companies said their supply chain structures are fully integrated, this proportion is set to more than double (to 47%) within the next two years.
- The number of companies that remain dependent on siloed operations is set to fall from 14% to 4% over the same period.
Digital opportunities: The race to fully digitize more supply chain operations is picking up speed.
- In nearly every supply chain function, companies said they are planning significant increases in digital adoption in the next two years to streamline their supply chain organizations.
Obstacles to progress: Many obstacles to future supply chain development involve issues with industry partners. Among the challenges cited by manufacturers in the survey were the following:
- Differences in digital maturity among partners (54%)
- A lack of common data platforms (53%)
- Problems transforming traditional supply chain processes (29%)
- Upgrading legacy equipment (26%)
- A lack of skilled employees (22%)
Review the data: Click here to review the data in detail and read manufacturer responses to survey questions.
Washington, D.C. – Following today’s Senate–House conference committee meeting on the China competition legislation, National Association of Manufacturers President and CEO Jay Timmons released the following statement:
“Manufacturers are encouraged by efforts in Congress to reach a strong, bipartisan agreement that strengthens domestic manufacturing, increases our global competitiveness and provides new opportunities for the more than 12 million people who make things in America. The first meeting of the conference committee to finalize legislation reconciling the United States Innovation and Competition Act and the America COMPETES Act is an important step toward overcoming ongoing supply chain disruptions, countering inflation and supporting U.S. manufacturing in the face of major global competitors, namely China.
“Lawmakers must prioritize provisions that will streamline essential domestic supply chains and the production of key inputs, such as an investment of $52 billion to bolster domestic semiconductor manufacturing, the creation of a fund to strengthen supply chain resiliency and inclusion of the Ocean Shipping Reform Act. Manufacturers also support policies to advance and grow U.S. international trade and provisions that strengthen U.S. energy innovation leadership. The conference committee should also avoid labor provisions that would harm American manufacturers and workers alike as we look to fill more than 800,000 jobs in the sector.”
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 12.7 million men and women, contributes $2.71 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.
As supply chain bottlenecks and materials shortages continue to challenge both the U.S. and the world, companies in the semiconductor industry are working hard to meet high-quality standards, achieve strong technological innovations and keep up with the growing demand.
To meet these goals, chip producers as well as all their suppliers are continuously investing time and funds into new products, technologies and facilities.
SGL Carbon, a global manufacturer of products derived from carbon and graphite, is part of this supply chain for chip producers.
Heavily invested: The company, which has its North American headquarters in Charlotte, North Carolina, has been investing significantly in its semiconductor-related production while working hard to meet demand and keep pace with the ever-shifting market.
- Over the past four years, SGL Carbon invested approximately €30 million into enhancing its production capacities and a modern clean-room environment in St. Marys, Pennsylvania, the home of its main North American operations related to the semiconductor industry.
Smaller size, bigger impact: The semiconductor market is a dynamic sector, and its applications are now more essential than ever to everyday life, according to SGL Carbon Vice President of Marketing and Sales Doug Garda. As chips get smaller, their efficiency and performance are getting bigger—and so is the global appetite for them.
- “We’re seeing more and more demand globally, and the infrastructure that exists in the industry isn’t sufficient to meet those demands,” Garda said. “Especially with the Internet of Things, e-mobility, LED lighting and automated production, there are so many more applications and high-performance variants of chips required for the future. We need to meet that very steep demand curve.”
Global shortages: While in development, semiconductor chips can cross international borders 70 times before the end product reaches a consumer, fueling significant complexity in the manufacturing process and supply chains.
- With the onset of the COVID-19 pandemic, labor challenges, shifts in consumer needs and general unpredictability have fed worldwide supply issues.
High demand: In the midst of these shortages, the market for silicon-based wafers, used for regular chips, is expected to grow by 5% annually over the next five years. However, the market for special silicon-carbide-based wafers, used for high-performance chips, is expected to grow by 30% or more annually over the same period.
A critical market: Sometimes described as the “brains” of electronic devices, from automobiles to home appliances to personal electronics and medical devices, semiconductors are critical components for all sorts of manufactured products. A shortage in semiconductors creates ripples all across the manufacturing industry.
- “The semiconductor market is a key component to any region’s manufacturing needs right now,” said SGL Carbon NA Network Operations Manager Tom Detsch. “It’s one of the most important opportunities of our time—and we’re of course also looking for funding options to further grow.”
Eye on Congress: The U.S. House of Representatives and Senate have both considered legislation designed to strengthen the U.S. semiconductor industry, but differing bills have left Congress with varying approaches.
- The House passed a bipartisan CHIPS Act in the National Defense Authorization Act authorization last year, but it lacked funding. The funds were instead included in subsequent legislation, the America COMPETES Act.
- Meanwhile, the Senate passed its CHIPS Act funding through the United States Innovation and Competition Act of 2021 (USICA).
“The question remains: what’s next?” said Detsch. “These markets are growing. How much is going to be in the United States, and how much will be outside? There’s government funding being looked at here in the U.S. and abroad. That’s something that would be interesting for us in the U.S. if something like that were to be available.”
Our take: The NAM is strongly supporting efforts to increase domestic chipmaking capacity here in the United States and is urging the federal government to help make that goal a reality.
The last word: “We’re a solutions provider, and demand for our graphite products has expanded rapidly,” said Garda. “Without graphite-based equipment, no semiconductors could be manufactured. Thus, this will be a growing market for us and for North America in general for a long time.”
Workforce inspiration, COVID-19 safety, sound legislative policy, tax reform and democracy—these were the main themes NAM President and CEO Jay Timmons discussed during the NAM’s State of Manufacturing address Thursday at Chandler-Gilbert Community College Williams Campus in Mesa, Arizona.
Inspiring the workforce of tomorrow: Manufacturing is a high-tech, fast-paced, well-paying place to work, Timmons told the audience as he stood before the Creators Wanted Tour Live mobile experience, an initiative of the NAM and its workforce development and education partner, The Manufacturing Institute. But, he said, the industry has not been immune to the labor shortage.
- “For each of the past nine months, manufacturers in America have had more than 800,000 open jobs in our industry—800,000 chances to launch a well-paying career,” Timmons told the audience of college students, teachers and staff, as well as local manufacturers. “In Arizona, there were more than 11,000 openings in just the first 45 days of 2022.”
- Yet the state of U.S. manufacturing is, Timmons announced, resilient. “There’s hardly ever been more opportunities for future manufacturing workers. Innovators. Designers. Technicians. Creators. We’re a $2.57 trillion industry, with more than 12.5 million workers and counting. And the vast majority of manufacturing leaders say they are optimistic about the future.”
Getting policy right: Timmons also talked about the policy landscape and stressed the need for lawmakers to enact robust supply-chain, immigration-reform and competitiveness measures.
- “If we’re really going to outcompete China and other countries, then we need Congress to finish up the ‘global competitiveness bill’ they’re working on and get it to the president,” Timmons said.
- He added that coming legislation must include measures to bolster supply-chain resilience, combat goods counterfeiting and increase domestic semiconductor manufacturing.
“Rocket fuel” required: Following the passage of tax reform in 2017—which Timmons called “rocket fuel for our economy”—manufacturers have “kept our promises to raise wages, hire more workers and invest in our communities,” he said.
- “For more than a year, some politicians have tried to raise taxes on manufacturers,” Timmons said. “They tried it with the COVID-19 relief bill. They tried it with infrastructure. They tried it with Build Back Better. And three times, manufacturers said don’t do it. And we won. The voices of moderation in the Senate prevailed.”
- “But if tax reform is repealed or punitive measures, such as the ‘book tax,’ are passed, the U.S. economy will suffer,” Timmons said.
Safeguarding values: America’s values and institutions are what have made manufacturing possible, Timmons said, and we must defend them from the threats they now face.
- “Today, America faces new threats to our democracy, including those threats from within,” Timmons said. “And once again, manufacturers stand proudly on the side of protecting and preserving American democracy and our constitutional republic.”
Point of emphasis: “I’ve always believed, and the past two years have reinforced, that manufacturers are in the business of causes greater than self. From building the arsenal to win a world war decades ago, to pioneering the treatments to defeat today’s diseases and pandemics, we change the world,” Timmons underscored in the wrap-up of the address.
The NAM is calling for a U.S. economic approach in the Indo-Pacific region that incorporates several key trade elements for manufacturers.
The background: Earlier this month, the White House unveiled a 12-page strategy overview focusing “on every corner of the region from South Asia to the Pacific Islands to strengthen its long-term position and commitment,” according to Reuters (subscription).
- In the document, the U.S. promises to strengthen partnerships, modernize alliances and invest in regional organizations.
- According to an action plan for the next one to two years, the U.S. will “‘meaningfully expand’ its diplomatic presence in Southeast Asia and the Pacific Islands.”
The NAM’s view: “As the administration continues to develop the framework, it must prioritize an approach that supports manufacturing and manufacturing jobs by opening markets, strengthening U.S. innovation and technology leadership, raising global standards to U.S. levels and putting in place best-in-class trade rules,” said NAM President and CEO Jay Timmons in a letter sent on Tuesday to Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, U.S. Trade Representative Katherine Tai and National Security Adviser Jake Sullivan.
Key inclusions: The NAM is urging the administration to include several major elements in its new framework. These include but are not limited to:
- Prioritizing efforts to eliminate trade barriers in the region that hamper U.S. competitiveness;
- Instituting strong intellectual property rules that set high standards for IP protection and strengthen innovation;
- Securing regional or bilateral digital trade commitments; and
- Strengthening collaboration on standards, regulatory and conformity assessment with countries in the Indo-Pacific region.
The last word: “This approach is necessary so that manufacturers in the United States do not fall behind our competitors in the Indo-Pacific, such as China, that are actively negotiating and implementing new trade agreements to lock in opportunities for their manufacturers, not ours,” said Timmons.
The Biden administration is making new commitments to semiconductor production and planning new policies designed to bring STEM talent to the United States—and manufacturing leaders are weighing in.
The background: Last week, the White House announced a series of actions to attract STEM talent, to strengthen the U.S. economy and to improve American competitiveness around the world.
What we’re saying: NAM President and CEO Jay Timmons joined Manufacturing Institute President Carolyn Lee in praising the actions, while also pushing for continued work on these critical issues.
- “The supply chain and economic disruptions facing American families and the manufacturing industry are driven in part by the severe worker shortage and by the serious chip shortage,” said Timmons. “Today, the White House has announced promising developments on both fronts, and we will work with the administration and Congress to build on this progress even further.”
- “Manufacturers are leading America’s recovery, but we still need to hire more than 800,000 workers right now,” said Lee. “And according to the MI’s research with Deloitte, we will have 4 million jobs to fill by the end of the decade, 2.1 million of which could go unfilled if current trends continue. That sustained need is why the NAM and the MI launched our nationwide Creators Wanted workforce campaign. It’s why we have long focused on programs and policies of all types that will grow the pool of STEM talent in America. We have to come at this crisis from every angle, and the MI and the entire industry will continue using every tool at our disposal to inspire, educate and empower the next generation of creators.”
The road ahead: Timmons highlighted the path forward and noted additional important actions to meet current and future needs.
- On semiconductor production: “To ramp up domestic semiconductor production, we can’t stop at today’s action, though,” said Timmons. “Too many manufacturing sectors have been unable to deliver the products American families need because they lack key components. Manufacturers are working overtime to overcome this challenge, but Congress has to do its part, which means passing USICA. Doing so will not only shore up our recovery and ease supply chain strains but also strengthen our economy and national security.”
On attracting STEM talent: “These immigration policies will also undoubtedly sharpen America’s competitive edge and help us outpace and out-innovate the rest of the world,” said Timmons. “In far too many cases, we’ve seen brilliant minds educated at American universities leave because our outdated immigration system doesn’t let them put their talents to work for America’s future. Now we can start to reverse that trend, among other key policy changes. As part of ‘A Way Forward,’ our plan for comprehensive immigration reform, we have long called for immigration policies that are responsive to clear economic needs. These policies meet that test, meaning that they will benefit our workers, our communities and our industry, empowering us to create even more opportunities for the American people.”
When an email account with a nonsensical address pretends to be your CEO asking you to buy gift cards, you might deduce that it’s a phishing scam, right? That attempt probably won’t get far, but cyberattacks are a more sophisticated threat and potentially much more damaging to manufacturers of all sizes than they might imagine, warns eSentire Vice President of Industry Security Strategies Mark Sangster.
In a recent webinar produced by the NAM’s Leading Edge program, titled “Go Phish: Building Cyber-Resilience with Managed Phishing and Security Awareness Training,” Sangster laid out some useful advice for businesses. Here’s some of what he had to say.
The threat: Cyberattacks pose a threat to manufacturers of all sizes. While there is a widespread assumption that attackers are only interested in larger corporations, the truth is that small and medium-sized businesses make up a significant number of targeted organizations. Lest manufacturers imagine that they don’t have anything a hacker or attacker would want, Sangster made clear that a great deal of information held by manufacturers is extremely valuable to attackers.
- “If you look at the insurance data on claims, it’s small and medium-sized businesses, and in particular manufacturers, that are targeted,” said Sangster. “In fact, about a third of those attacks generally focused on manufacturers.”
- “You have data and assets worth stealing,” said Sangster. “You have secret recipes and manufacturing automation controls, and data that’s involved in that. And personally identifiable records and intellectual property. And depending on the type of business you’re in, it might be health care records and so on.”
The approach: While stereotypes often suggest that most phishing emails and other scams are obviously fake, many cyberattacks are extremely sophisticated, using specifically targeted methods to gain access to vulnerable networks, Sangster noted.
The good news: Even nation states and powerful ransomware gangs tend to leave a trail before an attack that can help manufacturers identify looming problems and thwart a breach.
- “There are signs and symptoms that something’s going on,” said Sangster. “There are steps you can take to prevent this from happening. And if you get into a hand-to-hand battle with these guys, there is an opportunity to identify it before it metastasizes throughout your organization and becomes those massive business-disrupting ransomware outages that we sadly read about.”
Some low-hanging fruit: Sangster highlighted a few protocols that manufacturers use to prevent most cyber attackers from gaining access, including multifactor authentication or a secure remote connection, like a VPN, or a software-defined perimeter that verifies the identity of a device before it is granted access to application infrastructure.
- “Following these recommendations knocks away 90% of the risks that you face,” said Sangster.
Roll tape: For more information about the stakes of this moment, the importance of cybersecurity and the steps that you can take to protect yourself and your business, check out the full webinar here and learn more about eSentire here.
The next step: Solid cybersecurity is a must for any organization. To help manufacturers protect themselves, the NAM created NAM Cyber Cover, a risk-mitigation and cyber-insurance program that helps manufacturers detect and cover any vulnerabilities. Check it out here.
What is the biggest cybersecurity threat to manufacturers today? It’s ransomware, according to the experts who spoke at a recent NAM webinar.
What they’re saying: “Ransomware … has really become the biggest threat to a lot of organizations,” said ABB Global Cyber Security Manager of Power Generation Jim Lemanowicz during the “The State of Cybersecurity,” a webinar hosted by the NAM’s Leading Edge program. Ransomware is malicious software that encrypts a victim’s data until a ransom is paid to the attacker.
- “It’s not intended to necessarily attack the industry” it’s victimizing, he continued. “It’s purely a financial incentive, and it’s indiscriminate.”
No more small-time hits: Up until recently, one-time hacks into computer systems were more the norm among hackers seeking an illegal payday. “One thing that’s drastically changed is, now [cybercriminals] recognize that massive operational outages are the way to go,” said eSentire Vice President and Industry Security Strategist Mark Sangster. “And they can elicit seven-figure payments. It’s been professionalized. You can hire a freelancer.”
Assess your risks: What does all this mean for manufacturers? Assessment is key, said Lemanowicz.
- “Address the risk based on the criticality of the system—you know, what’s going to really cause you to have something that you can’t recover from, something that’s going to be a lasting problem,” he said. “Some systems you may be able to take offline” or use once a week or once a month.
- In cases where the isolation of a device would wreak operational havoc on your business, consider building redundancies into the system to isolate the devices effectively in the event of a breach. “Controlled access points between systems [mean] a ‘cascading effect’ is less likely,” Lemanowicz continued.
The way in: As the saying goes, an ounce of prevention is worth a pound of cure. Beware of often legitimate-looking spear-phishing attacks, which will appear to come from someone you or your employees know.
- Today’s cybercriminals “have lists,” Lemanowicz said. “They map out the different industries. They have an understanding of who’s involved in what levels in that organization.”
What else can you do? The panel experts had some additional tips for manufacturers looking to keep their systems free of cybercriminals.
- Use multifactor authentication.
- Use a virtual private network (VPN).
- Train all team members—including the C-suite—on good “digital hygiene” practices.
- Regularly update all systems.
The last look: One of the best ways to view cyberattacks is by “using a cooking analogy,” Sangster said. “People think of state-sponsored actors and criminal gangs as being highly sophisticated, [but] what they don’t necessarily understand is that the ingredients they might use aren’t sophisticated. It’s salt, and it’s pepper, and it’s chicken. But it’s how they combine those” that can make a situation dangerous to companies.
- The top way to avoid falling victim to these “recipes”? Said Sangster: “Having the basic [digital] hygiene in place.”
Did you know that several of the components in your car may have passed under high-intensity UV light prior to your purchase? You may have heard that manufacturers coat headlights with a UV protective film to keep them from getting scratched by road debris, but several other components are also manufactured using UV—including windshield borders and the protective coating on interior trim. The process is called UV “curing,” which dries coatings consistently, efficiently, durably—and without releasing harmful chemicals into the atmosphere, as other drying processes do.
The NAM got a firsthand look at this technology recently, thanks to manufacturer Miltec UV of Stevensville, Maryland. The company manufactures UV systems that cure products like optical fiber, semiconductors, prefinished hardwood floors and cars, supplying this technology across the country and around the world. NAM Director of Photography David Bohrer visited Miltec’s facility to check it out.
Here, an employee at the Bulb division is making a UV bulb. Miltec manufactures thousands of bulbs each year for export around the globe:
When dealing with UV technology, safety comes first. Here, an employee working in the Li-ion Battery Research and Development lab is assembling coin cell batteries in a glove box. The batteries will be used as test samples.
The set of a sci-fi movie? Nope. It’s just the testing of a 16-lamp UV curing system that produces more than 530 KW of UV power. Ultimately, the customer will use this system to cure inks and coatings on a high-speed printing press that manufactures outdoor packaging bags, such as for Miracle-Gro.
Of course, you can’t go through an entire story about UV light without a cool picture of UV light—so here it is. This is a UV bulb after it’s been filled with an inert gas, which helps it illuminate its powerful UV light.
Miltec says: “Miltec UV is proud to be a member of the NAM and extremely grateful for all of the work that the NAM does to protect the jobs of our team members that do so much to help our company grow and succeed in the international market,” said Miltec President Bob Blandford. “We are also honored and blessed to have such a dedicated manufacturing team that truly understands the importance of making products in the USA and satisfying customers with reliable and high-performance products. With the help of tax cuts, Miltec UV is doing its part by creating more jobs, increasing salaries and offering end-of-year bonuses for its employees.”