Practical Insights

Practical Insights

Manufacturers Adapt to Lead in an Increasingly Digital Age

"You can’t make this transition to the digital era by yourself. You need to be with other companies, to learn from them."

David Brousell speaks at the 2019 Manufacturing Leadership Summit 2

In September 2018, the National Association of Manufacturers acquired the Manufacturing Leadership Council, an association for manufacturing executives that is dedicated to helping the industry transition to the digital era. Nearly one year later, the MLC wraps up its 15th Anniversary Manufacturing Leadership Summit and continues to provide its members with programs and services around digitization.

MLC’s Co-Founder, Vice President and Executive Director David R. Brousell shares the groundbreaking work of the organization and why it matters to manufacturers today.

What is the Manufacturing Leadership Council?

The MLC is designed to help senior manufacturing executives and emerging leaders define and shape a better future for themselves, their organizations and the industry at large by focusing on the intersection of critical business and technology issues that will drive growth today and in the future. We do live events like conferences; we do plant tours that enable members to see firsthand how different companies are implementing the latest digital technologies; and we publish in-depth articles that focus on best practices and cutting-edge ideas on the use of technologies and the leadership requirements of the digital age.

How is leadership changing in the digital age?

It’s changing in some very important ways. There’s a whole new layer of competency that has to be added to the traditional functions of leadership. We call this “digital acumen,” which has to do with understanding the potential of advanced technologies like analytics, artificial intelligence, collaborative robotics, 3D printing and other technologies. It’s not just improving efficiencies, but also offering new business models, ways of doing things and services.

This new era in manufacturing requires leaders to manage organizations that are flatter and more collaborative, with more and more employees having the benefit of information at their fingertips. Managing in prior years was around a top-down structure. That doesn’t cut it in the digital age.

What benefit do companies get from being a part of this group?

The MLC presents the opportunity to be part of a community that is collectively sharing ideas, insights and best practices to as the industry continues its radical transition. The truth is, you can’t do this alone as a company. You can’t make this transition to the digital era by yourself. You need to be with other companies, to learn from them, to learn what’s possible, to see what works and what may not work well in your company and to form that bond. It’s a tremendous learning experience.

What does the future look like for manufacturing—and how does the Manufacturing Leadership Council fit in?

The future looks very, very bright for manufacturing. We’re going to increase efficiency and produce products that satisfy personalized needs—everything from cars to medicine. We’re going to be able to have better quality and create jobs that are fulfilling, exciting and intellectually stimulating. The extent of innovation happening right now in manufacturing is mind-blowing.

But this is not an easy transition. The future offers tremendous opportunities, but only if we make the transition industry-wide. If we’re able to do that, not only will individual companies be more successful globally, but the U.S. manufacturing industry as a whole will continue to lead the world. There’s a lot at stake for manufacturers. That’s why the partnership between the Manufacturing Leadership Council and the NAM is so important.

Policy and Legal

Why the Ex-Im Bank is Critical for Manufacturers

The Ex-Im Bank helps U.S. manufacturers compete for deals around the world.

cargo unloaded at port of Los Angeles

In May, the U.S. Senate voted to confirm President Donald Trump’s nominees to the Export-Import Bank board. The board now has a quorum for the first time in four years, allowing it once again to consider deals larger than $10 million. Manufacturers’ attention now turns to securing congressional reauthorization of the Ex-Im Bank.

NAM President and CEO Jay Timmons explains what’s at stake.

The NAM is leading the fight for Ex-Im Bank reauthorization. Start with the basics. What does that mean?

Later this year, Congress will have to vote on whether to keep the Ex-Im Bank open and authorize it to continue helping manufacturers in the United States compete for deals around the world.

Why does the Ex-Im Bank matter so much to manufacturers?

It’s a vital tool to support manufacturing jobs in the United States. The Ex-Im Bank has supported 2.5 million jobs since 2000. Typically, more than 90 percent of the Ex-Im Bank’s transactions directly support small businesses.

And here’s something that’s really impressive — the Ex-Im Bank has generated $9.6 billion for taxpayers since 1992. It’s a government agency that makes money!

Other countries are running nearly 100 other export credit agencies. So, if we don’t have the Ex-Im Bank, we are at a big disadvantage.

You mention “export credit agencies.” You mean other countries have their own versions of the Ex-Im Bank?

Exactly. And they use those agencies to lure manufacturers to their countries, support their own manufacturers and steal manufacturing jobs away from the United States. That’s not going to change. So, we can “disarm” ourselves here in the United States and let other countries like China have the advantage. Or we can support the Ex-Im Bank.

So this all comes back to China?

Definitely. It helps level the playing field for manufacturers in the United States to compete with China, as well as other countries.

Two of China’s export credit agencies provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined. That’s what we have to compete against.

What can manufacturing workers or manufacturing supporters do to make a difference?

Contact your senators and representatives. Tell them to support the Ex-Im Bank and reauthorize it. Let them know that supporting the Ex-Im Bank is supporting American manufacturing workers.

Policy and Legal

Liquified Natural Gas Boom Impacts U.S. Manufacturers

U.S. Natural Gas Production Continues To Break Records

Cheniere Energy LNG export facility in Corpus Christi

Last month, the European Union announced that U.S. exports of liquified natural gas (LNG) to Europe had increased nearly 300% since 2016. This news came on the heels of a series of executive orders from President Trump designed to speed up energy infrastructure projects that enable manufacturers to carry natural gas to market.

Rachel Jones, the National Association of Manufacturers’ senior director of energy and resources policy, helps us break down what it all means.

Why is the U.S. experiencing a natural gas boom?

North America has more shale gas than any other place in the world. Technology is the other huge driver. The combination of horizontal drilling and hydraulic fracturing technologies is unlocking vast natural gas resources and changing the face of modern manufacturing in America.

This boom is set to keep growing. According to the Energy Information Administration, U.S. shale gas production is projected to more than double again over the next 25 years.

What is “liquified” natural gas (LNG)?

It’s really just natural gas that has been refrigerated until it turns into a liquid. When it comes out of the ground, natural gas is actually very thin and light. To make it easier to move around the world, it is turned into a liquid.

Why are investments in LNG export infrastructure so important for the U.S. manufacturing industry?

LNG terminals are massive infrastructure projects that create tens of thousands of jobs.

Golden Pass is a $10 billion investment in the Gulf Coast that will create jobs across the country for manufacturers who make compressors, heat exchangers, storage tanks, pipes, valves and other components of these state-of-the-art infrastructure projects. Golden Pass alone is projected to create 45,000 direct and indirect jobs during construction, plus several thousand more during operation. Cheniere’s Sabine Pass and Corpus Christi projects together represent an investment of approximately $30 billion in U.S. energy infrastructure. And the Driftwood project is poised to invest another $30 billion, creating nearly 50,000 direct and indirect jobs in at least 18 states.

How do President Trump’s recent executive orders promote LNG infrastructure development?

Manufacturers in the United States are ahead of their global competitors in the race to build the infrastructure needed to export LNG; however, an unnecessarily protracted regulatory process could cause a major disadvantage for these exporters.

In a big win for U.S. manufacturing workers, President Trump signed two long-anticipated executive orders intended to cut red tape and speed up the permitting process for energy infrastructure projects. These orders will promote badly-needed development of infrastructure to meet U.S. energy demand, create and support jobs for U.S. manufacturing workers, and provide reliable and affordable energy to U.S. consumers.

How does natural gas help manufacturers achieve sustainability goals? 

Climate Change is one of the biggest global challenges we face. Manufacturers understand this and are taking real action to protect our environment; natural gas is part of that story.

Modern natural-gas plants that replace aging power plants can mean an 80% reduction in carbon emissions. Further, because solar and wind can produce varying amounts of energy, having natural gas available on demand actually enables us to further invest in renewable resources.

Practical Insights

Future of Manufacturing Depends on Building Workforce

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In many ways, manufacturing has never been doing better. Record numbers of manufacturers are optimistic about the future. Many are growing, investing, and hiring. Yet, this success is also fueling a growing crisis: too many manufacturing jobs and not enough workers to fill them.

Carolyn Lee, executive director of The Manufacturing Institute (MI)—the education and workforce partner of the National Association of Manufacturers—helps explain manufacturing’s “skills gap” workforce crisis and what the MI is doing to help solve it.

Carolyn, just how bad is the problem currently?

There are more than half a million open jobs in manufacturing right now, and based on a study by The Manufacturing Institute and Deloitte, 2.4 million jobs could go unfilled and about $2.5 trillion worth of GDP could be at risk over the next decade if we don’t get this under control soon. So this is a problem for manufacturing, yes, but it’s also a problem for the economy overall.

What’s driving it?

There are three main drivers. Some don’t know these jobs exist, some don’t have the right skills to land them, and some just don’t see the point. That last challenge—the perception challenge—is particularly tricky. Many envision manufacturing jobs the way their grandparents remember them. But that really isn’t how modern manufacturing careers look today.

Well, how do they look?

Modern manufacturing careers are increasingly high-tech, high-skill, and high-pay. The possibilities in manufacturing will become even more exciting as Manufacturing 4.0 technology continues to revolutionize the industry. Tomorrow’s manufacturing jobs will increasingly rely upon irreplaceable human skills—things like creativity, critical thinking, design, innovation, engineering and finance—and, by the way, many of these careers don’t require a four-year degree or the debt that can come with it.

What is the Institute doing to address this challenge?

We have a variety of programs designed to excite, educate and empower the manufacturing workforce of today and tomorrow, with a particular focus in four key areas: women, veterans, youth and lifelong learning. We are empowering women already in the industry and giving them tools to inspire and mentor others (STEP Women’s Initiative), we are connecting transitioning service members and veterans to great careers in manufacturing plus arming them with the exact skills and qualifications needed to excel (Heroes MAKE America), we are helping excite the next generation by encouraging companies and educational institutions across the country to open their doors to the reality of modern manufacturing careers (MFG Day), and we are engaged in a variety of initiatives to help current manufacturing workers access training for newer technology-intensive jobs—among many other programs and initiatives.

What can others do to help be a part of the change the MI is trying to enact?

One thing I’d recommend, and something the Institute is working to facilitate, is for people to educate themselves, their families, and their friends on what jobs in manufacturing truly look like. It’s an exciting time to be a manufacturer and there are lots of great opportunities in the industry, so come join us.