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Business Operations

The Companies Leading the Way into Manufacturing 4.0

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We all learn by example. That simple principle lies behind an ambitious undertaking by the World Economic Forum: to build a network of manufacturers that have succeeded in adopting Manufacturing 4.0 technologies, and that can act as ambassadors and educators for the whole global industry.

It’s called the WEF Global Lighthouse Network, and it’s already yielding fruitful partnerships and useful information. Recently, WEF Head of Advanced Manufacturing Francisco Betti sat down with the MLC to explain how it works.

Lighting the way: The Global Lighthouse Network emerged from a research partnership with McKinsey, which looked into what holds manufacturers back from embracing M4.0 technologies.

  • After talking to more than 400 senior leaders, the researchers discovered that only 30% of companies were benefitting from technology adoption in their facilities and supply chains.
  • As Betti puts it, “The majority were stuck in what we define as ‘Pilot Purgatory.’ There were massive investments being made in new technologies, and thousands of pilot projects underway, but very few were making it to the shop floor or delivering real operational financial value.”

That’s where the Lighthouse companies come in—the WEF decided to ask some of that 30% to open their doors and teach the rest of the industry how to make the digital jump.

How it’s going: Currently, the Lighthouse network has 69 members, assessed by a rigorous and independent review process. Betti says, “What is interesting is that we have companies from a large variety of sectors, and that is by design. . . . The opportunity for cross-learning here is massive.”

  • The project is looking for use cases at factories, but also beyond. Many of the real winners in the digital game transform their entire supply chains, and the WEF is also looking to add those sorts of companies to their network.

Get involved: Companies can apply to be a part of the network, says Betti. The process involves an application, which covers both achievements and strategies, and culminates in a site visit.

  • “The panel convenes on a quarterly basis to assess all the applications, vote and decide on those who finally get recognized as Lighthouses in the network.”

The transformation: Betti sees the M4.0 technologies as transforming whole economies and enabling “a new era of economic growth.” He makes a bold prediction about its effects on manufacturing leadership:

  • “We are under the impression that there is a trend that we will most likely see going forward where chief operating officers will become the next generation of CEOs. Those who know how to successfully run operations by transforming them digitally are most likely going to provide top leadership positions in the near future.”

The last word: “If you transform digitally, and you do that by bringing your people on board, you have not only become more productive, you’re not only becoming more resilient, you’re not only becoming more sustainable, but you are setting your organization for growth in the years ahead.”

Business Operations

The Six Factors of Manufacturing 4.0 Success

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In a world that only ever speeds up, manufacturers need to embrace technologies that let them shift operations quickly and seamlessly. Manufacturing 4.0 technologies like machine learning and robotics provide that power, but the scale of the M4.0 transformation can seem overwhelming.

In a recent edition of the Manufacturing Leadership Council’s Manufacturing Leadership Journal, Oracle Senior Director of Transformational Technologies Anant Kadiyala lays out six factors that make all the difference for successful M4.0 adaptation. Below is some of his advice.

Technology Adoption: Companies that consider the full range of technology’s benefits are setting themselves up for success. Some trends to consider:

  • Software is becoming more integral to business operations and product functionality—allowing products to be configured and monitored in real time using analytics.
  • On the operational side, the industrial internet of things and machine vision are enabling a whole host of advances in real-time monitoring, anomaly detection and worker safety, among other uses.

Data-Driven Decision Making: Companies that make good use of data achieve higher margins than their peers, according to a McKinsey study, but that requires some key ingredients, including:

  • A unified data infrastructure, including APIs, applications, analytics, real-time systems and much more;
  • The right tools to process the data; and
  • Employees who are skilled in data-driven operations.

“In most companies, 90% of the data goes unused. In addition, more than 70% of the time and effort in data science projects is often spent on moving, cleaning and preparing data,” says Kadiyala.

New Business Models: “Modern technologies, such as cloud, IoT and AI/ML, enable every manufacturer to have the sophistication of business operations and real-time feedback loops that were only enjoyed by the big players,” says Kadiyala.

Innovation and Experimentation: Manufacturers can pursue different options for innovation, with partnerships being a common choice. Other methods might be design workshops or R&D investments, Kadiyala notes.

  • “With the right people, processes and tools, companies can navigate faster and realize value quicker. The lean methodology that the manufacturing industry is renowned for also works very well for innovation.”

Well-Integrated Teams: The right talent is critical to business transformation—and good data, process automation and collaborative practices clear the way for employees’ success.

Culture: As Kadiyala puts it, “Successful companies start early innovation on the edges of their business, deliver a few wins and then gradually build their way into the rest of the organization. All successful transformations need employees to enjoy a strong sense of purpose and mission for the change.”

News

“The Culture Is the Company”: An Interview with ALOM’s Hannah Kain

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With 19 global locations, ALOM Technologies Corporation specializes in technology-driven supply chains for Fortune 100 companies. ALOM President and CEO Hannah Kain recently sat down with the Manufacturing Leadership Council to share her thoughts on the state of the industry and the keys to successful leadership.

Taking on challenges: Over the long term, Kain sees workforce development—finding and training the next generation of manufacturing leaders—as a significant priority. But in the short term, she cites COVID-19- and trade-related supply chain disruptions as the most pressing issues.

  • “Shifts in demand have increased the need for agility in manufacturing, yet U.S. infrastructure, from ports and roads to cybersecurity, is under extreme strain, and geopolitics have made goods movement more complex,” she said.

Meeting the moment: During the COVID-19 pandemic, ALOM manufactured millions of COVID-19 test kits for the medical sector while ensuring its own workers remained safe, Kain said. The company also met the past year’s challenges by investing in digitization to improve its productivity.

Finding opportunities: Kain cites a range of opportunities for manufacturers of the future, from fast-improving technologies to the availability of new manufacturing talent—if manufacturers can find and harness it.

The importance of culture: Kain believes in what she calls “servant leadership”—seeing yourself as a supporter of stakeholders like customers, employees and suppliers and working to put their needs first. She strives to create a culture of collaboration within her own company.

The last word: “In the end, culture is the company, and the company is the culture,” said Kain. “Our culture is inclusive, collaborative, improvement-oriented and quality-focused, with a strong sense of ownership. Supporting that culture may be the most important thing I do.”

Business Operations

How COVID-19 Accelerated Manufacturing 4.0

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Manufacturing leaders proved they were good in a crisis in 2020—creating new products, speeding up the production of essential materials and instituting safety policies in record time. And as they accelerated their production lines, they also focused on increasing their adoption of Manufacturing 4.0 technologies.

Now, the Manufacturing Leadership Council—the division of the National Association of Manufacturers focused on manufacturing’s digital transformation—is exploring what leaders learned during the pandemic about the importance of digitization. The MLC’s recent survey of manufacturing leaders gives us a window into their thoughts, expectations and plans for the future—after a year like no other. Below are some key insights. 

A big impact: A full 54.8% of respondents said COVID-19 increased management’s focus on digital transformation. The changes they cited included new procedures for remote working, new disaster preparedness plans and increased integration across teams and structures.

And here’s another important finding: these changes seem permanent.

  • 68.2% said new disaster preparedness plans and strategies will be permanent additions to their operations.
  • 57.3% said more collaborative organizational structures will stick around.
  • 62.2% expect to keep allowing both leaders and employees to work remotely.

The digital workforce: With baby boomers retiring, companies are looking for new manufacturing leaders and seeking to fill a range of jobs, even as the digital evolution of the industry requires new and different skills. Where are these workers coming from?

  • 45.5% of respondents said they would come from internal sources—a drop of nearly 5% from last year’s survey. Leaders felt somewhat more in favor of finding talent elsewhere in the manufacturing industry.
  • One-third of respondents said they would look within the industry for talent, while only 13.2% expected to find candidates from other industries.

But these results may soon change, as manufacturers are still figuring out what digital skills they need. Over time, leaders will likely develop different ideas about where to find workers—and how to train them.

  • As the survey shows, manufacturers have a big opportunity to ramp up their digital training: only 22.3% of respondents this year said they have formal M4.0 training programs for workers and leadership.

Organizational shift: The emerging digital focus means many manufacturers are shifting toward a flatter, more collaborative working style. The numbers tell the tale:

  • Nearly 48.5% of respondents identified understanding how the company should be organized as a result of new technologies as a key challenge—an increase of 23% from last year.

The MLC says: As MLC Executive Director and NAM Vice President David Brousell put it, “Many manufacturing executives acknowledge that the equivalent of several years’ change has been compressed into the past year. Now, manufacturing leadership has the responsibility to see these changes through. If they are successful in doing so, they will take the industry to a new and better level, raising the bar for all and redefining the rules of competition.”

Workforce

Manufacturing Leaders Get a Sneak Peek at Creators Wanted

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The NAM and The Manufacturing Institute unveiled their Creators Wanted experience last week in Dallas, previewing it for the NAM’s Executive Committee as well as local business leaders, workforce development officials and the media. Visitors got an exclusive look at this “mobile manufacturing experience” that will soon embark on a tour around the country, showing Americans what modern manufacturing is all about.

As NAM President and CEO Jay Timmons said, “Creators Wanted will help a new generation of emerging and displaced workers see themselves in a modern manufacturing career, while also adding to the industry’s talent pipeline by engaging veterans, women and communities of color, all critical to expanding the workforce of tomorrow.”

What they saw: Below, ExxonMobil Senior Vice President Neil Chapman, Celanese Corporation Chairman, CEO and President Lori Ryerkerk, Toyota Executive Vice President of Product Support and Chief Quality Officer Chris Nielsen and Trane Technologies Chairman and CEO (and NAM Board chair and co-chair of the Creators Wanted campaign) Mike Lamach get a first look at this interactive, hands-on experience.

An online choose-your-own-adventure version of the mobile experience will be rolling out this summer to reach students, parental figures, teachers and emerging workers nationwide. Here, MI Executive Director Carolyn Lee previews the “Keys to Success” room, where participants will race to solve riddles that will help reinforce key attributes of manufacturing careers, such as teamwork, problem solving, imagination and communication.

Lee also gave a presentation on Creators Wanted to the visitors. As she said in a statement, “By 2030, manufacturers need to fill more than 4 million jobs—according to research from the MI and Deloitte—but without initiatives like Creators Wanted, more than half of those jobs could go unfilled. This mobile experience will excite audiences across the country, sparking an interest in modern manufacturing so that we can connect emerging and displaced workers with resources that educate and empower.”

The tour allows you to experience the creativity of manufacturing firsthand and up close. In the gamified experience, participants will work as a team to solve a series of immersive challenges, requiring their full attention to think and compete. As they move through each obstacle, teams will learn more about modern manufacturing careers, the skills required to be successful and how people and technology work together.

We can’t reveal all the surprises, but doesn’t he look excited?

In fact, all of the NAM’s Executive Committee members who toured the exhibition were impressed and amazed by what they saw. Here are some of their reactions:

  • “I will admit, I didn’t quite appreciate the opportunity for our industry until I saw the experience in person,” said Chapman. “Seeing is believing in the capacity of this tool to excite the next generation, parents, guardians and teachers about modern manufacturing careers.”
  • “It’s clear that Creators Wanted has exactly the message and tools to strengthen our industry’s recruitment for talent. At a time when so many young people seek careers where creativity is valued and prized, we have a chance with this campaign to really drive the best and brightest into our talent pipeline,” said Nielsen.
  • “The mobile experience is astounding; it’s unlike anything we’ve done as an industry to reach the next generation and engage emerging and displaced workers. But what makes this campaign worthwhile is that the mobile experience is just one part of a comprehensive plan to create interest and then create opportunity by providing resources to help people launch or grow a career in manufacturing,” said Lamach.

Join in: Last but not least, you too can find out what all the excitement is about. Check out https://creatorswanted.org/ for information about the campaign.

Business Operations

Prepare for Hurricanes with the NAM

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This year, hurricane season—which officially began June 1—arrived early, as it has every year since 2015. But while 2021’s inaugural Subtropical Storm Ana did not make landfall in the U.S. in late May, meteorologists are expecting the remainder of the year to be a busy time for hurricanes—and as manufacturers know all too well, that can mean trouble is ahead.

In addition to endangering lives, a strong hurricane can cause severe damage to individual companies and the U.S. economy as a whole. In fact, the Congressional Budget Office estimated in 2019 that expected annual losses from hurricane and storm-related damage came to $54 billion.

Always be prepared: Better planning for these yearly occurrences can help manufacturers mitigate the costs associated with storm-caused devastation—and go a long way toward keeping employees safe, too.

Offering resources: In partnership with disaster-relief organization SBP and product-philanthropy nonprofit Good360, the NAM’s Emergency Response Committee works year-round to provide members with access to disaster-preparedness resources and training in advance of natural disasters, and helps manufacturers activate to help their communities when one strikes

For example, in a recent webinar sponsored by the NAM’s ERC, Amanda Gallina, SBP community engagement manager, and Matt Woodruff, vice president of public and government affairs for Texas-based tank barge operator Kirby Corporation, laid out some suggestions for hurricane preparation.

For businesses: Woodruff provided some commonsense advice for employers:

  • Ensure new employees understand the hurricane plan well ahead of hurricane season.
  • Create a checklist of duties that must be performed, starting with the first day of hurricane season.
  • Set up remote work sites for affected areas and employees.
  • Provide support to the families of employees who live in affected areas to ensure their safety.

For individuals: Gallina offered advice for all individuals facing a hurricane:

  • Collect hazard and emergency information from local and national sources like news and weather apps, NOAA Weather Radio and the Red Cross Emergency app.
  • Make a household emergency plan, which should include stockpiling supplies, establishing communication methods and emergency contact numbers and creating an evacuation and sheltering plan.
  • Identify and protect important documents by storing them in a fire- and water-proof box, while giving extra copies to a trusted attorney or friend. You can also use secure online cloud storage as another backup.
  • Get the right insurance by identifying any gaps in coverage and asking your agent the right questions.

The last word: “We are grateful for the partnership with Good360 and SBP, which allows us to better support NAM members in times of need, but most importantly, provide valuable resources and thought leadership to build resiliency in advance of a disaster,” said NAM Chief Operating Officer Todd Boppell. “Advance planning is critical for successful businesses, and the thoughtful approach demonstrated by our partners resonates with the NAM’s vision to support manufacturing operations.”

To contact the NAM’s emergency response committee or to be added to its mailing list, email [email protected].

Policy and Legal

NAM Partners with Global Legal Network

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The NAM is joining with Meritas, a global legal alliance, to provide tailored, high-quality and affordable legal assistance to manufacturers across the country.

About the team: Meritas offers a network of 186 full-service, world-class law firms that have been vetted and approved by the organization. The firms are equipped to assist clients with issues from contracts and employment to environmental compliance and intellectual property.

How it works: If any members are facing legal issues, or simply want ongoing legal support for routine challenges, they can contact the NAM’s Manufacturers’ Compliance Institute, which will work with Meritas to identify exactly the right kind of legal professionals who can help. Meritas firms will then provide 30 minutes of free time to connect with the NAM member to figure out if a more formal engagement makes sense. NAM members can even connect with firms in other countries to work through issues that might arise abroad.

  • Vetted firms: Meritas’ approved firms have all undergone a stringent vetting process to ensure they meet high standards. Instead of having to search for a reputable lawyer on their own, NAM members can trust that we will connect them with high-quality professionals who can meet their needs.
  • Local knowledge: The Meritas network includes more than 7,500 lawyers serving 253 markets in the United States and around the world. This partnership will help manufacturers find assistance and representation from firms that have legal expertise in the relevant region, ensuring they have the best possible information as they move forward.
  • Affordable rates: Meritas firms provide high-value services at competitive rates for small businesses and large companies alike. For small and medium-sized manufacturers, Meritas makes legal counsel accessible, helping companies avoid common pitfalls and overcome complex challenges. For larger companies, it delivers strong support at a lower price point than more expensive firms, helping to ensure competitiveness and a strong bottom line.

Why it matters: Finding high-quality, affordable legal counsel with relevant knowledge is extremely challenging. The NAM’s partnership with Meritas makes that process simpler, saving you time and money and strengthening your operations.

The last word: “The NAM’s partnership with Meritas gives manufacturers around the country a clear line into an outstanding network of legal assistance,” said NAM Vice President of Legal and Deputy General Counsel Patrick Hedren. “Whether you’re a small firm trying to avoid common legal challenges, a large company trying get more out of your legal team or an expanding manufacturer trying to navigate a new state or a new country, this partnership provides indispensable value and essential support.”

Policy and Legal

Manufacturers Donate Supplies to Fight COVID-19 in India

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As India struggles with COVID-19, manufacturers across the United States have stepped up to offer assistance and material aid.

The situation: India is grappling with a dangerous and extremely transmissible form of COVID-19, even as the country has struggled to inoculate large swaths of its population. As a result, hospitals across the country are straining to fulfill critical needs, and the situation has become dire.

The support: Many manufacturers have announced that they will provide critical assistance to response efforts in India, including the following:

  • Raytheon Technologies donated four mobile oxygen trucks, working with the Indian Red Cross to get them to Delhi.
  • Deere donated $2.7 million to provide urgent medical resources and health care infrastructure, working with United Way Mumbai.
  • Pfizer sent $70 million worth of COVID-19 treatment medicines directly to India/Indian government to help fight the disease.
  • Lilly donated 400,000 tablets of key medicine used to treat severe COVID-19 patients—and made new voluntary agreements to ramp up local manufacturing and distribution in India.
  • UPS donated $1 million to India to fight COVID-19.
  • FedEx is donating critical supplies to India and has donated $4 million to help nonprofit organizations reach underserved communities get COVID-19 vaccines.
  • Samsung is importing 1 million Low Dead Space (LDS) syringes, which minimize the amount of drug left in the syringes after an injection.
  • Boeing created a $10 million emergency assistance package for India to support the country’s response to the recent surge in COVID-19 cases.
  • LyondellBasell is donating $100,000 to the U.S. India Friendship Alliance to help the organization provide 250 oxygen concentrators to India’s hospitals and medical facilities.

In related news, the United States will donate 500 million doses of Pfizer’s COVID-19 vaccine to the world, according to Reuters (subscription). The donations will be distributed this year and over the first half of next year to 92 lower-income countries and the African Union, via the COVAX vaccine program spearheaded by the World Health Organization and the Global Alliance for Vaccines and Immunization. The White House has also pledged additional direct aid to India, which is detailed here.

  • The NAM has praised these efforts to accelerate vaccinations in India and the rest of the world, calling them a “powerful, effective way to improve vaccine access,” while preserving critical IP protections that made that innovation possible.

What we’re saying: “Manufacturers are deeply committed to the fight against COVID-19 in our communities, including here in the United States, in India and around the world,” said NAM Director of International Business Policy Ryan Ong. “The NAM is working directly with members and with partners like Good360 and SBP to provide critical relief where it is mostly badly needed and to help us all respond and recover from COVID-19 as we work toward a better post-pandemic world.”

Workforce

An Army Vet Finds Military Values in Manufacturing

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Hugo Hinojosa loved being in the military. He served 22 years in the U.S. Army, with time in eight different duty stations. His service gave him the opportunity to get a degree, travel the world, see different places and forge close-knit friendships that he says will last a lifetime. When it came time for him to transition out of the military, he was open to ideas—and during a career skills program briefing at Fort Hood’s Copeland Center, a presentation from Heroes MAKE America captured his attention.

Endless opportunities: After a career spent moving around the globe, Hinojosa was hoping to stay in his home state of Texas for the long term. During the presentation from a representative of Heroes MAKE America, he was struck by the breadth of roles the manufacturing industry offered.

  • “When they came out and told me about opportunities and other jobs in the surrounding area, I said, wow, this might be for me,” said Hinojosa. “With the certifications the program offered, you could work anywhere in the industry. I wasn’t limiting myself to a certain, specific job. I could work anywhere, you name it. The opportunities are endless.”

A unique experience: Hinojosa began his time in the program in the midst of the COVID-19 pandemic, which meant that some elements had to be adjusted to fit the logistical reality. But participants still received plenty of engagement: classroom lessons were shifted to a virtual format, and students met with program managers two at a time for a few hours every week. While it required a fair amount of self-direction and motivation, Hinojosa said that the program supported him as he learned at his own pace.

A powerful network: Hinojosa found the networking aspect of the program to be especially valuable once he began looking for work.

  • “Every time we would have potential employers in team meetings, I would search them on LinkedIn and connect with them,” said Hinojosa. “I said, I saw you today during class, I’d like to connect. I started building my own network from there.”

The right stuff: The work paid off. Hinojosa received several offers and ended up getting hired by WestRock Company through meetings that were set up by Heroes MAKE America. He began as a member of the company’s management trainee program and was quickly recruited to work as a business partner in the human resources department. He sees his new career as a natural extension of his time as a service member.

  • “Everywhere I go, I’m a steward of the Army,” said Hinojosa. “I’m working in a place where the values are in line with what I was brought up with in the military—integrity, respect, accountability and excellence.”

Today, Hinojosa encourages other transitioning service members to see themselves in a manufacturing career—and most importantly, to recognize their own skills.

The last word: “Don’t sell yourself short,” said Hinojosa. “Believe in the skills the military has given you. You’ve been trained and given skills that will pay dividends out here in the manufacturing industry. And the work ethic that’s instilled from day one is going to show.”

Business Operations

Rethink Presents Lessons for Manufacturing Leaders

Are you grappling with the fast pace of competition in manufacturing? Are you working to keep up with the massive amount of disruption brought on by artificial intelligence, advanced robotics and digital breakthroughs? Are you racing to create new competitive advantages by using the power of Manufacturing 4.0—the next wave of industrial progress based on digitization?

The NAM has you covered with Rethink: The Manufacturing Leadership Council Summit, on June 22–24.

What it is: Rethink is the premier conference on Manufacturing 4.0 for industry leaders as they continue to navigate disruption. Hosted by the Manufacturing Leadership Council—a member-driven, global business leadership network dedicated to senior executives in the manufacturing industry—the summit offers participants strategies and solutions that are designed to advance their operations and improve their competitiveness.

Why it matters: The COVID-19 pandemic supercharged some of the changes that were already occurring in the manufacturing industry. Across the past year, businesses have seen an even greater need for flexibility, agility and speed in operations, and many manufacturers have accelerated their adoption of digital technologies to achieve these goals.

What it includes: The summit will offer a wide range of informative conversations with next-generation leaders and experts. A few elements include the following:

  • Case study sessions showcasing real-world examples of advanced manufacturing technologies in action—from efforts to transform legacy facilities into smart factories, to the role of analytics in digital transformation, to the growth of robotics in manufacturing and logistics. By hearing from manufacturing leaders who have taken on these challenges, executives can learn best practices and gain new ideas for their own companies.
  • “Think tank” sessions that will allow participants to ask questions and share ideas about advanced manufacturing technology. These conversations will include discussions of topics like quantum computing, manufacturing execution systems, augmented and virtual reality, blockchain, edge computing and sustainability.

The big difference: Most importantly, Rethink gives participants the chance to learn from other manufacturing executives and experts. Many of the industry’s most forward-thinking leaders will collaborate at this summit to make manufacturing better and stronger.

Check it out: Click here for more information and to register for the summit.

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