Innovation and Technology

AI is changing the way manufacturers do business—from the production line to the back office and across the supply chain. At the Manufacturing Leadership Council’s Manufacturing in 2030 Project: Let’s Talk about AI event last month in Nashville, Tennessee, panelists discussed how those sweeping changes would alter, and enhance, the manufacturing workforce.

A collaboration between the MLC (the NAM’s digital transformation arm) and the MI (the NAM’s 501(c)3 workforce development and education partner), the event provided key insights for manufacturers into how technology and workforce trends interact with each other. Here are a few key takeaways. 

Net positive: “The history of technology adoption is about improving the job quality of individuals on the shop floor. AI helps them to do the job better, provide them with better tools, gives them greater authority and ultimately increases the value-add of their jobs. All of that is a net positive for those individuals,” said MI Vice President of Workforce Solutions Gardner Carrick.

• By leveraging data and enabling greater efficiency, AI will improve communication, increase collaboration across disciplines and stimulate innovation, according to the panel.
• In addition, “AI can even inform the workforce’s creativity by working with it to design a new product or system,” said Jacey Heuer, lead, data science and advanced analytics, Pella Corporation.

Skills needed: While you might expect that implementing AI requires workers skilled in programming, data science and machine learning, manufacturers will also need to expand their bench of critical thinkers and problem-solvers. The panelists had a few tips to help companies along.

• Invest in upskilling programs to make the AI integration process at your company smoother and develop the talent you already have.
• Update job descriptions to reflect the skill sets the company will need in the next five to seven years.
• Consider recruiting for and teaching adaptive skills—skills that enable individuals to adapt easily to changing demands and environments—which can increase the flexibility of your workforce.
• Build partnerships with local schools, community colleges and technical and vocational schools to develop talent pipelines that will meet your needs.

The human-AI collaboration: While AI will take over monotonous, repetitive tasks, the panelists predicted that the industry will continue to center around human labor.

• “You can teach AI to do X. You can teach AI to do Y. [However,] combining the two may be really difficult for AI, while a human can do it better. You’re going to continue to see humans in roles that center on making decisions and telling stories,” said Asi Klein, managing director, industrial products and organization transformation, Deloitte Consulting.
• Meanwhile, AI adoption will likely lead to an increase in available jobs, as more skilled workers will be needed to guide and inform these new processes.

The last word: “Over the last 12 years, we’ve seen a lot of technology adoption, but we have not seen a lot of job loss. In fact, we’ve seen job gains,” said Carrick. “There is a lot of opportunity to reimagine jobs to add value that AI will help to illuminate.”

Washington, D.C. – The National Association of Manufacturers today announced that Ketchie Inc. President and Owner Courtney Silver will serve as chair of the NAM’s Small and Medium Manufacturers Group and Click Bond President and CEO Karl Hutter will be vice chair. Silver and Hutter will work under the continued board leadership of NAM Board Chair and Dow Inc. Chairman and CEO Jim Fitterling and NAM Board Vice Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations and Risk Officer Kathy Wengel.

“Small and medium-sized manufacturers are at the heart of our economy and represent 90% of the NAM’s membership. Our country’s success is tied directly to their success, and with Courtney and Karl as leading manufacturing voices, we are well-positioned for 2023,” said NAM President and CEO Jay Timmons. “No matter what challenges we face, our association and industry remain steadfastly committed to policies that uphold the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.”

“It is a privilege to serve our industry as chair of the SMM Group at the NAM. With so many critical policy issues facing members this year, we will continue to lead the charge in Washington and across the country,” said Silver. “We’re all dealing with pressures from regulatory overreach, tax code uncertainty, the workforce crisis and more. I look forward to working with the team at the NAM to advance policies that support innovation and growth and enhance our competitiveness—and to collaborating with other small and medium-sized manufacturers, including family-owned businesses like mine, to fix these make-or-break policies central to our survival.”

“I am honored to be chosen to lead the SMM Group at the NAM as vice chair,” said Hutter. “From educating elected leaders on the policies needed to empower the nearly 13 million people employed in manufacturing, to helping companies tap into the NAM’s wealth of operational resources, I look forward to working closely alongside the NAM’s leadership to support small and medium-sized manufacturers in growing their companies and our economy.”

The NAM Board of Directors guides the association’s leadership in policy advocacy, legal action, operational excellence, workforce development and news and insights. More than 200 manufacturing leaders serve on the NAM Board, helping the industry advance an agenda that promotes growth and prosperity for all Americans.

The new board leadership was elected at the September meeting of the NAM Board of Directors.

Silver previously served as vice chair of the NAM’s SMM Group. As president and owner of Ketchie, she leads a woman-owned, third-generation North Carolina manufacturer. She has worked at Ketchie for more than 14 years. She is a past recipient of the Manufacturing Institute’s STEP Ahead Award (now the Women MAKE Award), which recognizes manufacturing women who exemplify leadership within their companies as well as their communities.

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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 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 55% 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.

AI is changing the way manufacturers are doing business from the production line to the back office and across the supply chain. At the Manufacturing Leadership Council’s Manufacturing in 2030 Project: Let’s Talk about AI event, panelists from the MI, Pella Corporation, and Deloitte Consulting discussed the potential impacts of AI on the manufacturing workforce of tomorrow.

Key Insights 

• By leveraging data and utilizing efficient systems, AI will improve communication, increase collaboration across disciplines and stimulate innovation.
• Manufacturers need to invest in upskilling programs to make the AI integration process smoother.
• Start building partnerships with local schools, community colleges and technical/vocational schools to develop talent pipelines that will meet the skills needs of the future.
• While AI will increase efficiencies and reduce repetitive tasks, humans will continue to play an important role in the manufacturing process.

It’s time to think way outside the proverbial box, according to the Manufacturing Leadership Council, the NAM’s digital transformation arm. In fact, as we get closer to 2030, manufacturers are creating entirely new boxes—including new digital business models, products and services, revenue streams, ways to serve customers and opportunities to increase competitiveness.

Collaborative innovation: By 2030, metaverse technologies will provide rich virtual environments for the collaborative development of new ideas. These shared virtual spaces will enable contributors from multiple remote locations to collaborate in real time.

• These collaborations may include manufacturers, partners, academic institutions and research institutes.
• New concepts can be tested in a virtual world before moving to physical prototyping or production.

Outcome-based products and services: As digital platforms mature and products become increasingly smart and connected, the decade ahead may see a boom in more outcome-based services. This is where the customer doesn’t buy a physical product, but instead signs up to pay for the guaranteed outcomes that product or system delivers.

• This shift will require manufacturers to establish new infrastructure rich in predictive analytics, remote communications and consumption monitoring.
• It also requires a mindset change for traditional manufacturing, from a focus on units and costs to product lifecycles, performance levels and usage.

Blockchain networks: By 2030, blockchain could be leveraged for most world trade, helping to provide the secure traceability and provenance needed to prevent physical product counterfeiting, grey markets in medicines and even the adulteration of the global food supply chain.

• A blockchain is an electronically distributed ledger accessible to multiple users. Blockchains record, process and verify every transaction, making them safe, trusted, permanent and transparent.

• Blockchain technologies promise to be a viable solution to manufacturers’ need to automate, secure and accelerate the processing of key transactions across industrial ecosystems.

E-manufacturing marketplaces: Digitally empowered production-line adaptability, such as the kind that emerged during the pandemic, will provide a foundation for companies to offer spare production capacity to other companies in different sectors.

• This maximizes the return on a company’s production-line investments and can generate new revenue streams for the future.
• Combined with e-commerce, e-manufacturing will enable designers, engineers and/or smaller companies to more easily connect with a large pool of qualified producers to deliver and scale a final product.

Manufacturing in 2030 Project: New Boxes is just one of the industry trends and themes identified by the Manufacturing in 2030 Project, a future-focused initiative of the MLC. For more details on megatrends, industry trends and key themes for Manufacturing in 2030, download the MLC’s new white paper “The Next Phase of Digital Evolution.”

Now that 2023 is here, we’re looking back on 2022’s top tech trends in manufacturing. The NAM’s digital transformation arm, the Manufacturing Leadership Council, and its innovation management division, the Innovation Research Interchange, gave us an overview.

AI everywhere: From automatically responding to shifts in production demand to anticipating breakdowns in the supply chain, artificial intelligence showed up more than ever before throughout manufacturing operations.

• More than two-thirds of manufacturers are either using AI now or will be doing so within two years, according to MLC research.
• Current use cases include predicting needed maintenance for equipment, forecasting product demand and monitoring performance metrics such as productivity and efficiency. Future use cases could include fully autonomous factories that run continuously with minimal human intervention.

Training on demand: Training for technicians and frontline operators used to mean time in a classroom with a live instructor. In 2022, more manufacturers turned to virtual, on-demand learning tools that allowed workers the freedom to learn at their own pace.

• This ran the gamut from video content libraries to immersive augmented reality/virtual reality experiences that guide and correct trainees.
• In 2023 and beyond, this type of learning experience will be essential to attracting and retaining younger workers who are familiar with digital learning and want the latitude to gain new skills on their own schedules.

Digital twins: Manufacturers used digital twins—virtual models designed to reflect a physical object, system or process accurately—to create design prototypes and test their performance.

• Digital twins will continue to allow for new levels of design optimization, improved product development and performance and significant waste reduction for manufacturers.

Robotic collaboration: Once confined to steel cages and bolted to floors, industrial robots took center stage in 2022.

• No longer limited to repetitive tasks and kept far from human workers, new-generation robots are safe enough to work alongside employees, can be moved quickly around shop floors and are programmed easily to do multiple tasks.
• Since they’ve also become more affordable, they’re an economically feasible investment for companies of all sizes.

Cybersecurity as safety: A rise in connected factories also meant a rise in cyberattacks on manufacturers. In an industrial setting, a cyberattack can be very dangerous, as it can cause equipment to malfunction.

• Last year, more companies began addressing the threat with cyber drills, tabletop exercises for simulated attacks and other training exercises designed to keep businesses—and workers—safe and secure.

Low-code/no-code development platforms: In 2022, more manufacturers embraced the use of mobile and web apps to build applications quickly. Using these platforms, enterprise and citizen developers can drag and drop application components and connect them to create apps—without line-by-line code writing.

• Business teams with no software development experience built and tested applications without any knowledge of programming languages, machine code or the development work behind a platform’s configurable components. We can expect to see more of it this year.

Smart glasses move beyond the pandemic: Many manufacturers kept up their pandemic-era use of smart glasses, which they had used to troubleshoot issues on the ground when travel was restricted and engineers and technicians couldn’t reach sites.

• They also expanded smart glasses’ use to include scanning sensor data so users can see visual data “mapped” onto equipment to better identify issues and fixes.

Interested in learning more? Check out the MLC and IRI for more insights into manufacturing’s exciting, high-tech future.

Manufacturers are pursuing sustainability like never before.

That’s according to recent polling conducted by the Manufacturing Leadership Council, the NAM’s digital transformation division. The annual Sustainability and the Circular Economy research survey seeks to determine the progress made in sustainable manufacturing.

Competitiveness: There has been a surge in the number of manufacturing executives who view sustainability as critical to the future of their businesses.

• 58% of respondents in 2022 believe sustainability is essential to future competitiveness compared to 38% in 2021.
• 68% of executives say they are implementing extensive, corporate-wide sustainability strategies. That’s up from just 39% in 2019.

What’s driving change: The motivations go beyond regulatory compliance and cost savings.

• 78% say sustainability is about better alignment with corporate values.
• 68% believe in creating a cleaner, healthier environment.
• 66% seek to improve company reputation with customers and investors.

Top corporate goals: More than half of survey respondents reported having specific sustainability goals and metrics across almost all key functions in the company.

• Goals were most apparent in manufacturing and production (79%), supply chain (69%) and product design and development (67%).
• Additional goals were cited in transportation and logistics (56%) and partner compliance (51%).

Energy efficiency is No. 1: The primary sustainability focus of manufacturers, according to survey results, is energy efficiency and reduction, combined with the transition to renewable energy sources. These efforts are linked intrinsically to meeting net-zero emissions goals.

• 45% of respondents report having announced formal net-zero goals.
• 30% aim to hit net zero by 2030.

Digital tech, employee training play a role: Also on the rise is the number of companies that recognize the importance of digital solutions in their sustainability efforts.

• These tools are being used to manage and monitor materials and energy consumption, optimize operations to improve efficiency and report sustainability progress.
• Respondents also say meeting sustainability targets must include engaging employees through education and training, as well as greening their supply chain.

The last word: An overwhelming 90% of all respondents agree that manufacturing has a special responsibility to society to become more sustainable and accelerate the transition to a future circular industrial economy.

Interested in putting some renewable energy solutions into action, including solar power, battery storage and LED lighting? Programs from utility companies and other entities enable efficiency upgrades with little or no upfront capital. Connect with NAM Energy to explore your options!

Washington, D.C. – Following today’s announcement by the World Trade Organization’s General Council that member states have agreed to delay a final decision on an expanded intellectual property waiver for COVID-19 products, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“The WTO’s decision to delay the expanded intellectual property waiver is a welcome step toward protecting American innovation and technology leadership. This is vital not only for future pandemic responses, but also for the sector’s ability to produce new and advanced treatments or fund critical research and development.

“Manufacturers in the U.S. are leading our post-pandemic recovery and investing heavily in the development of cures and therapeutics. An expanded WTO waiver would force manufacturers in America to give away rights unfairly to international competitors and economic rivals like China, disincentivize companies from continuing the cutting-edge research underway, put jobs at risk and harm the sector’s global competitiveness.

“Manufacturers will continue to work with partners around the world to tackle current and emerging health challenges, while protecting the IP rights of those many companies which have been so essential to an effective pandemic response.”

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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 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 55% 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

Creators are always wanted in manufacturing, and those who bring new perspectives due to their neurological differences can be some of the most valuable.

That was one key takeaway from the Diversity + Inclusion Summit held this month by the Manufacturing Institute (the NAM’s workforce development and education partner). Dr. Keivan Stassun, director of the Frist Center for Autism and Innovation at Vanderbilt University, discussed the benefits of hiring neurodiverse workers, sharing tips on optimizing the hiring process for these workers as well as setting them up for success. Here’s some of his advice.

Why it matters: As manufacturers look for more workers to fill their hundreds of thousands of open positions, they are considering people of many different backgrounds and talents.

• Neurodiverse workers, who may include those with autism, Down syndrome, ADHD or other neurological conditions, have a wide range of abilities and perspectives and can enrich manufacturers’ operations.
• Stassun spoke from personal experience: at the Frist Center research lab, autistic individuals working with the proper support created a data visualization software that has been licensed by NASA, and also patented a technology for mining asteroids.

The benefits: “There are two broad categories of strengths that neurodiverse talent brings to the table—visual cognitive abilities and process/efficiency improvement,” said Stassun.

• Visual cognitive abilities can include skills such as pattern recognition and outlier detection, which can be useful in quality assurance tasks as varied as inspecting batteries coming off an assembly line, surveilling financial records for fraudulent or improper activity or stocking crash carts in emergency rooms.
• Process/efficiency improvement abilities emerge from neurodiverse workers’ atypical or novel perspectives, which help them identify out-of-the-box solutions. As Stassun explained, “Neurodiverse individuals can look at a process and abstract it into a flow chart to find ways to increase efficiencies that no one else would have even thought of.”

How to get started: Stassun recommends that companies try a small pilot program before rolling out a company-wide hiring initiative. He had a few key tips for the recruitment process:

• During the job interview stage, recruiters should be aware of ways in which neurodiversity can differ from neurotypical behavior. For example, interviewees may make minimal eye contact and use extremely direct verbal communication.
• To set neurodiverse workers up for success, companies should examine the sensory environment of their workplaces. Though workers’ needs will vary, they may be sensitive to light, temperature or noise and need certain accommodations, which should be arranged from the outset of employment.

Resources: Stassun offered two resources that will help companies find and retain neurodiverse talent:

• Mentra, a neurodiversity employment network that recruiters can search, and which allows neurodiverse individuals to share their backgrounds and strengths with employers.
• The Autism @ Work Playbook, which details how to create a supportive work environment for autistic individuals.

In addition, the MI provided other useful information in its recent D&I Roundtable on recruiting and retaining employees with neuro differences, which you can view here.

The last word: As Stassun noted, “Innovation often comes from the edges. From a human capital perspective, it’s a really exciting opportunity.”

What does the U.S. military do when an expensive asset like a plane or a weapons system begins to break down?

Often, it turns to companies like Parts Life, Inc.—an innovative manufacturer that can reverse-engineer obsolete parts and help find solutions for hard-to-replicate products. But after a tax law change went into effect in 2022, the New Jersey–based manufacturer is facing increased costs for research and development, creating a barrier to the kind of innovation that is the focus of its business.

The change: Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to spread their deductions out over a period of five years, making it more expensive to invest in growth and innovation.

A focus on innovation: For Parts Life, coming up with new ideas is an essential, daily activity.

• “Parts Life is built around being a solutions provider,” said Parts Life President and CEO Sam Thevanayagam. “We are providing solutions for very expensive and mission-critical assets that are extremely strategic for the defense of the nation, but are also older—so their parts are not necessarily being supported.”
• “That’s where we come in to do reverse engineering. So, we’re looking at an old problem, but using innovation to solve it going forward.”

A benefit for savings: By helping the military extend the life of its assets, Parts Life also helps taxpayers.

• “We’re taking care of the warfighter and the taxpayer,” as Thevanayagam puts it.

A look ahead: As global conflicts shift, the U.S. military needs suppliers like Parts Life to help it develop solutions for future challenges, too.

• “Right now, our military is coming out of conflicts in Afghanistan and Iraq, but future conflicts may involve different terrain with different problem sets,” said Thevanayagam.
• “The work that we are doing today is helping them figure out how to approach those challenges. We’re having them tell us where they need to be, and then we’re helping them with the innovation they need to be successful.”

A tough choice: With the change in tax law, companies like Parts Life will be forced to make difficult decisions about how to spend scarcer resources, harming their ability to do critical, forward-looking work.

• “Currently, we’re leaning forward in resources and talent to lead the future,” said Thevanayagam. “If the government is going to pull the rug out from under us, we’re not going to be able to be aggressive. We’ll have to focus on maintaining our business rather than investing in new innovation.”

Our take: The NAM has pushed forcefully for the tax change to be reversed—and in October, told policymakers that the R&D amortization provision poses a “serious threat to our national security,” in part because of its impact on manufacturers like Parts Life that supply and support the U.S. military.

The bottom line: “The only way for us to continue to be relevant is to make sure that we’re investing in innovation and seeing what we can do to be a part of designing the future,” said Thevanayagam.

Visit the NAM’s R&D Action Center for critical R&D policy updates, industry stories and an opportunity to engage directly with your members of Congress. 

When asked why she chose to “give away” a quarter of her precision-machining company to employees, Acutec Precision Aerospace President and CEO Elisabeth Smith has a simple, commonsense answer: “Having an appetite for growth is a lot easier if you’re the beneficiary of it.”

Skin in the game: In August, Acutec, the largest industrial employer in its northwestern Pennsylvania county, went from privately held to worker-owned through an employee stock ownership plan. The shares, which have a value of $5.5 million, will be given out to current and future employees over the next decade—at no cost to them.

• Said the 40-year-old Smith: “I have a long career ahead of me, but I want the employees to be on that journey with me. … Why not give a stake to the person who’s working their butt off?”

Bringing in applicants: The woman-owned business, founded in 1988 by Smith’s father, Rob Smith, has always had an “empowered, participatory” workforce, but in recent years, it struggled with attracting and retaining the right people, Smith said. Since the ESOP, that’s turned around.

• “It’s made a difference in attracting talent,” she said.
• With more than 400 employees spread across its three Pennsylvania facilities and one South Carolina operation, Acutec is in growth mode and still looking to fill open positions.

The retirement incentive: The firm’s new ownership structure will help provide for employees in their golden years.

• Under the ESOP, when an employee leaves or retires, the company buys them out, and they can place that money into a retirement account.
• “There have been other ESOPs in the community, and some people have seen employees [of other companies] retire with quite a lot of money, so they have an idea of what it looks like,” Smith said.

The productivity effect: Now that employees are part owners of Acutec, Smith sees more interest in cost-consciousness and ROI.

• “We’re hearing things like, ‘Can we save on tooling?’” Smith said. “There are some costs the employees control themselves. The idea now is that they are custodians in charge of some of those profit drivers. They want to look at return on investment.”

The last word: Perhaps the best development to come from the restructuring is the change in team morale.

• “Before, people were kind of burned out, coming out of the pandemic,” Smith said. “How do you inspire people to do more? This is how.”