NAM Emphasizes USMCA, Protecting Investors in Mexico Meetings
In high-level meetings with government, manufacturing and trade group leaders held in Mexico last week, the NAM hammered home a key message: For North American manufacturing to remain globally competitive, Mexico must protect investor holdings in the country.
What’s going on: During a jam-packed three-day visit to Mexico City, NAM President and CEO Jay Timmons and an NAM contingent met with top officials in the new Sheinbaum administration, as well as leadership at multiple agencies and associations.
- These included newly appointed Deputy Trade Minister Luis Rosendo Gutiérrez, the Business Coordinating Council (CCE), the Confederation of Industrial Chambers of Mexico (CONCAMIN), the Mexico Business Council (CMN), the National Council of the Export Manufacturing Industry (INDEX) and others.
What they said: The NAM’s main message at each gathering was the same: Companies investing in Mexico need assurance that their portfolios will be protected regardless of the fate of proposed judicial reforms in the country.
- The NAM also underscored the importance of the U.S.–Mexico–Canada Agreement, which is due for review in 2026, and the necessity of ensuring that the deal is upheld for all three parties.
- If its terms are respected, USMCA could help North American manufacturing outcompete China.
On China: This week, just days after his office’s meeting with the NAM, Gutiérrez announced that the Sheinbaum administration will seek U.S. manufacturers’ help to reshore—mainly from China—the production of some critical technologies (The Wall Street Journal, subscription).
- “We want to focus on supporting our domestic supply chains,” he told the Journal, adding that talks with U.S. companies are still in the informal stage.
The NAM says: “Manufacturing is at the heart of the USMCA,” said NAM Vice President of International Policy Andrea Durkin, who was part of the NAM group on the ground in Mexico. “The NAM intends to work to ensure that the agreement strengthens the competitiveness of manufacturers.”
New DOD Loan to Fund “Critical Technologies” Manufacturing
The Defense Department’s Office of Strategic Capital is now accepting applications for flexible direct loans to build, expand and/or modernize “critical technologies” facilities (Federal Register).
- It’s also seeking input from companies and trade associations on the Defense Department’s loan program, via a Request for Information open through Oct. 22 (Federal Register).
What’s going on: The OSC’s credit program, launched Sept. 30, aims “to attract and scale private capital in industries and technologies that are critical to America’s national and economic security,” according to the Defense Department. This is part one of the application process.
- The financing is geared toward manufacturers that must spend significantly on industrial or specialty equipment to create new assembly lines in existing facilities.
- The money is also intended to help them cover “soft” expenses, such as factory preparation and installation, associated with critical technology projects.
Why it’s important: “The funding from this program could benefit manufacturers of all sizes that are working to expand their businesses and product lines in critical areas of the economy,” said NAM Director of Energy and Natural Resources Policy Mike Davin.
- The OSC loans offer flexible terms, a U.S. Treasury-comparable interest rate, long repayment periods and deferred payments.
Who’s eligible: Manufacturers within the 31 “Covered Technology Categories”— which include advanced manufacturing, cybersecurity, battery storage and spacecraft—are encouraged to apply.
- There is no company-size or employee-number threshold or limit, and manufacturers with existing federal grants are eligible.
Techmer PM Offers Safe Alternatives to PFAS for Manufacturers
The search for alternatives to chemicals called PFAS has been going on for years. Recently, materials design company Techmer PM created one—a new chemical for use in polymer processing.
The new solution: Last year, the Clinton, Tennessee–based manufacturer introduced the HiTerra T5—a polymer processing aid that helps maintain film surface smoothness and die-lip buildup—which replaces traditional chemistry based on per- and polyfluoroalkyl substances.
- The HiTerra T5, which meets Environmental Protection Agency guidelines and does not interfere with other additives, is being used in large-scale commercial undertakings by Techmer PM customers.
Why it’s critical: In March, the EPA issued the first federal reporting limits and guidelines for tracking the use of PFAS in manufacturing, along with other PFAS-related regulations. Individual states are also imposing their own restrictions on PFAS chemicals.
- The current regulatory environment is motivating plastics processors and raw materials suppliers to seek new alternatives to this chemistry.
- “The biggest challenge is that fluorinated chemistry is excellent at reducing friction, reducing melt fracture, improving hydrophobicity, stain resistance and helping the processing that manufacturers use, for example, to make film,” Techmer PM CEO Mike McHenry told the NAM in a recent interview. “It also helps with wear on small gears. It’s very effective, and it has unique properties that customers are accustomed to.”
More replacement efforts: Techmer PM is working closely with its customers to come up with additional PFAS alternatives, McHenry said.
- Because one of PFAS’ most useful characteristics is its ability to resist fire, “we’re looking at ways to remove halogen flame retardants, including fluorinated compounds” and find a comparable alternative for customers, McHenry said.
Unrealistic timelines: While the firm is hard at work developing potential replacements, the stringent deadlines that the EPA has set for the reporting and potential elimination is damaging, McHenry told us.
- “It can take years to get use approval [for alternatives], and finding them is a huge challenge in itself,” he went on. “We see the timelines being put forth as something that needs to be looked at, and [manufacturers] need support.”
- “For some uses—tubing, for example–it’s going to be very difficult to find something that will work the way fluorinated chemistries do. As much as we all want to move away from [PFAS], there are some instances in which it will be worse” to rush the search than continue using PFAS, he added.
- One of these areas is medical devices, McHenry said. The gowns used to protect surgeons and nurses, for example, are coated in PFAS-containing substances, which “will be very difficult to replace.”
The long view: For many applications, dependable alternatives will likely be found at some point, McHenry concluded.
- “I think we’ll find alternatives, but it’s not one-size-fits-all, and it will take time,” he said. “The versatility of fluorinated compounds is unique.”
The NAM Briefs Congress on AI
Generative AI tools like ChatGPT and Midjourney have grabbed headlines, but artificial intelligence–driven innovations like digital twins, computer vision and robotics are also transforming manufacturing in America.
Last week, the NAM briefed congressional staff from the House Task Force on AI to help educate policymakers on the role manufacturers are playing as both developers and deployers of AI technologies. The briefing follows the publication of the NAM’s first-of-its-kind white paper on the ways manufacturers are using AI.
The briefing featured a panel discussion among AI experts from major manufacturers, as well as the AI leads from the NAM and the Manufacturing Leadership Council.
Faster breakthroughs: AI is accelerating research and development at manufacturing companies, the panelists reported, allowing them to create or improve products in record time.
- For example, pharmaceutical companies are using AI to develop and test new lifesaving drugs, while automakers are using it to improve vehicle components.
Increased safety: AI is helping to prevent accidental collisions on the shop floor and enhancing equipment that makes tasks safer, such as robotic exoskeletons that collect and learn from data on the wearers’ movements and environment.
- In addition, companies are using AI to better understand and monitor product performance, helping reduce maintenance costs and avoid dangerous malfunctions.
Augmenting human labor: Manufacturers often use AI technology to complement and augment the work of humans, according to the panelists.
- Human operators still make decisions and oversee operations, but AI has helped improve the reliability of manufacturers’ processes as well as the quality, delivery and safety of their products.
- This combination of human ingenuity and AI enhances efficiency while still prioritizing human experience.
Policy recommendations: Panelists discussed what Congress can do to support AI-driven growth in the manufacturing sector, including:
- Modernizing compliance requirements to support AI development and adoption, especially for small manufacturers most affected by regulations;
- Ensuring that the regulatory environment helps the U.S. maintain global leadership in AI innovation, including by adjusting rules based on context and risk; and
- Creating or supporting initiatives to train workers in AI-related skills, including by providing the data needed to develop these programs.
The last word: “The future of manufacturing is inseparable from the future of AI,” said NAM Senior Director of Technology Policy Franck Journoud.
- “It is crucial that policymakers hear directly from manufacturers that are leading the development and adoption of this transformative technology. The NAM is thankful to have had an opportunity to share this world-class expertise, and we are committed to working with Congress to ensure the U.S. remains a global leader in AI innovation.”
Seventy Percent of Manufacturers Still Enter Data Manually
Manufacturers are deluged by data. As companies adopt more advanced technologies, they are increasingly overwhelmed by the quantities of raw data that must be collected, analyzed and put to use.
Indeed, a new survey from the Manufacturing Leadership Council—the NAM’s digital transformation arm—reveals that 70% of manufacturers still collect data manually. Here are some highlights from the survey, which reveals where manufacturers need to improve, and how they’re planning to do it.
Exponential data growth: While the survey’s respondents report an explosion of new data, they also expect to keep on top of it over the next few years.
- Forty-four percent of manufacturing leaders have seen at least a doubling of the amount of data they collect in their organization today compared to two years ago.
- While many manufacturers still lack standardized data due to operating a mix of older equipment and systems along with newer technologies, more than half expect that their data will be in a standardized format by 2030.
Analytical improvements: How are manufacturers planning to use all this new data?
- Nearly 60% of respondents say they are focused on understanding their operations with an eye toward optimizing them in the future.
- While 30% of manufacturers say they are using manufacturing data to predict operational performance, another 60% say that predictivity will be a primary objective by 2030.
Better decisions: Manufacturers use data to make better, more proactive decisions, according to the survey. Today, these decisions are made at a relatively high level.
- Seventy-seven percent of respondents said that the responsibility to employ data in decision-making falls to plant leaders and managers.
- Only 33% said that factory floor employees held that responsibility—a percentage that might grow as manufacturers seek to empower frontline employees with greater decision-making ability.
Looking ahead: As artificial intelligence and other emerging digital technologies become more established, they will likely reshape many if not all aspects of manufacturing operations.
- Thanks to advanced sensors and robust data networks connecting equipment and machinery, manufacturers will collect copious data in real time and act on it almost as swiftly.
Read more: To get a deeper look at the current state of data mastery in manufacturing, download the full survey, Data Mastery: A Key to Industrial Competitiveness.
NAM to Congress: Allow Manufacturers to Keep Innovating
The 21st Century Cures Act of 2016 and its 2021 follow-on, Cures 2.0, are providing a pathway toward potentially groundbreaking cures and treatments—but there’s room for even more improvement in the federal government’s handling of pharmaceutical innovation, the NAM said this week.
Now, Reps. Diana DeGette (D-CO) and Larry Bucshon (R-IN) are looking to build on the legacy of these two bills.
The background: The 21st Century Cures Act, introduced in 2015 by Rep. DeGette and former Rep. Fred Upton (R-MI) and signed into law the following year, aimed to speed up the development and delivery of medical innovation.
- The 2016 measure “ensured that federal agencies like the [Food and Drug Administration], the Centers for Medicare & Medicaid Services and the National Institutes of Health had the tools they needed to keep pace with and adapt to the tremendous advances being made by biopharmaceutical and medical device manufacturers,” said NAM Vice President of Domestic Policy Charles Crain.
- Cures 2.0, passed after the global pandemic, created the Advanced Research Projects Agency for Health, “a home within the federal government for high-risk, high-reward medical research.”
New medical advances: The face of medical innovation “has changed dramatically” in the past eight years, Crain pointed out, as we’ve seen the first-ever federal approval of gene therapy and the development of vaccines using mRNA technology.
What’s needed: The new landscape necessitates more congressional action, Crain went on, including:
- Continuing to embrace the new technologies that emerged from the COVID-19 pandemic like mRNA and other innovations;
- Modernizing federal agencies such as the FDA to keep up with these innovations; and
- “[E]nsuring the government’s processes for reviewing and approving new treatments are as innovative as the treatments themselves.”
Why it’s important: Biopharmaceutical manufacturers are economic powerhouses. In 2021, they:
- Accounted for $355 billion in value-added output to the U.S. economy;
- Contributed a total of nearly 1.5 million direct and indirect jobs; and
- Contributed $147 billion in labor income.
Hillenbrand: Sustainability Drives Innovation, Value
Manufacturers across the U.S. strive to make their operations more sustainable. Many are also laser-focused on the equipment they produce and how it can support their customers’ sustainability endeavors.
At Hillenbrand—a global industrial company that provides highly engineered, mission-critical processing equipment and solutions for markets including durable plastics, food and recycling—sustainability is at the core of everything it does.
The intention: Hillenbrand President and CEO Kim Ryan shared that the company doesn’t have a stand-alone sustainability strategy, but rather has made sustainability “the way we do business.”
- Hillenbrand is a signatory to the United Nations’ Global Compact, Convention Against Corruption and Women’s Empowerment Principles.
- “Our sustainability journey is guided by our purpose, ‘Shape What Matters For Tomorrow,’ which was collectively established and is embraced by all Hillenbrand associates,” Ryan said. “Our recently released 2023 Sustainability Report demonstrates our continued commitment to this goal as it shows our progress and focuses on our industrial products that positively impact the world around us.”
The progress: Highlights of the 2023 report include a focus on product innovation, continued transparency through additional data related to key environmental metrics such as water and waste, and disclosure of three years of Scope 1 and Scope 2 greenhouse gas emissions data. They also include 15 Scope 3 categories.
- “With the release of our fifth annual sustainability report, our journey continues to evolve and improve,” Ryan continued. “‘Make It Matter’ is a core value at Hillenbrand, and we’re committed to seeking out innovative solutions that push us toward a more sustainable future.”
The angle: The company’s success in sustainability is driven by its leaders, who ensure that the value is deeply ingrained in day-to-day operations.
- “Secular and global macroeconomic trends are now driving the need to adapt and engage associates, customers and stakeholders more than ever,” Ryan told us. “Taking into account these trends allows us to continue working toward a more sustainable future by providing innovative solutions.”
The value: Ryan sees Hillenbrand’s sustainability efforts—which the company sees as being supported by the three pillars of people, products and partnerships–as a value add for everyone.
- For example, by designing more-efficient systems that produce more sustainable products, Hillenbrand is committed to creating industrial solutions that have a positive impact on the world.
- Whether it’s helping customers reduce energy emissions or using Hillenbrand’s technology to produce more sustainable packaging, customers can reap the benefits of this commitment.
- “For us, there has been great value,” Ryan concluded. “If you approach this as a cost center, that is what it’s going to be for you. If you approach this as something that could actually create value for you and your customers, then I believe that’s what it has the opportunity to become.”
Further reading: Learn more about Hillenbrand’s commitment to sustainability here.
Manufacturing in 2030: The Opportunity and Challenge of Manufacturing Data
As manufacturers move toward building smarter factories with connected machines, the data those systems produce can offer a host of benefits: improved efficiency, better productivity, informed decision-making, value creation and, ultimately, competitiveness. Yet becoming a data-driven business comes with its share of challenges. In this year’s Manufacturing in 2030 Survey, Data Mastery: A Key to Industrial Competitiveness, the NAM’s Manufacturing Leadership Council sheds light on the successes and opportunities for how manufacturers are transforming their operations with data.
Security and privacy concerns: As factories become more connected, cybersecurity becomes a greater imperative. For this reason, survey respondents validated that both data security and data privacy are essential.
- More than 90% of respondents have a formal or partial policy on data security and data privacy.
- About two-thirds of manufacturers have a formal or partial policy on data quality.
- More than 60% have a corporate-wide plan, strategy or guidelines for data management, but only 15% follow the plan in its entirety.
How data is used: As manufacturers advance along their M4.0 journey, data is becoming their lifeblood, driving insights and decision-making. Yet the survey revealed a gap between available data sources and their utilization, a notable area for improvement as the industry looks toward the future.
- Spreadsheets are still king: 70% of manufacturers enter data to them manually, and 68% still use them to analyze data.
- 44% of manufacturing leaders say the amount of data they collect is double what it was two years ago, and they anticipate it will triple by 2030.
- While nearly 60% of manufacturers use data to understand and optimize projects, there is a shift toward using data to make predictions about operational performance, including machine performance, in the next decade.
Business impact: Most manufacturers leverage data to find ways to save money or promote business growth. However, less than half have a good understanding of the dollar value of their data.
- Only about 25% of manufacturers have high confidence that the right data is being collected.
- Most manufactures have only moderate confidence in their analytic capabilities.
- Top challenges include data that comes from different systems or in different formats (53%), data that is not easy to access (28%) and lack of skills to analyze data effectively (28%).
- However, despite those challenges, 95% of manufacturers say data makes for faster and/or higher-quality decision-making.
The bottom line: An overwhelming majority of manufacturers (86%) believe that the effective use of manufacturing data will be “essential” to their competitiveness. But to realize data’s potential, manufacturers must figure out how to organize and analyze their data effectively, ensure that their data is trustworthy and align their business strategy closely with their data strategy.
Explore the survey: Get a deeper look at the current state of data mastery in manufacturing. Click here to download your copy.
AI Speeds Drug Development
High-tech drug development labs are training artificial intelligence to design therapeutic treatments more quickly, The New York Times (subscription) reports.
What it looks like: Laboratories are using processes that record huge amounts of data quickly and efficiently—a practice that technology has made possible.
- “[T]he real action is happening at nanoscale: Proteins in solution combine with chemical molecules held in minuscule wells in custom silicon chips that are like microscopic muffin tins. Every interaction is recorded, millions and millions each day, generating 50 terabytes of raw data daily—the equivalent of more than 12,000 movies.”
How it works: By harvesting tremendous amounts of data with mechanized accuracy, these labs can use AI tools to perform rapid experiments, recognize patterns and make predictions about possible solutions—all more quickly than a human practitioner.
- “The companies are leveraging the new technology—which learns from huge amounts of data to generate answers—to try to remake drug discovery. They are moving the field from a painstaking artisanal craft to more automated precision, a shift fueled by AI that learns and gets smarter.”
Why it’s exciting: Traditional drug development processes are typically extremely slow and expensive and frequently end in failure during the human clinical trials stage—often because the drug is not effective enough, or because drugmakers discover unforeseen side effects. With the benefit of AI, biopharmaceutical companies may be able to overcome these challenges.
- “Studies of the cost of designing a drug and navigating clinical trials to final approval vary widely. But the total expense is estimated at $1 billion on average. It takes 10 to 15 years. And nearly 90% of the candidate drugs that enter human clinical trials fail.”
Why it’s safe: The practice is designed to prevent the kind of issues that tend to plague generative AI, and any final medicine still requires significant human input.
- “Because AI for drug development is powered by precise scientific data, toxic ‘hallucinations’ are far less likely than with more broadly trained chatbots. And any potential drug must undergo extensive testing in labs and in clinical trials before it is approved for patients.”
Our take: During a recent event with Axios, titled “Balancing Innovation vs. Regulation,” NAM President and CEO Jay Timmons touched on some of the pioneering work biopharmaceuticals are doing using AI.
- “All of the innovations in the biopharmaceutical industry … are creating new cures for diseases that we’ve been battling for the whole history of mankind,” said Timmons. “We’re accomplishing all of these things now—and it’s so exciting.”
Dig deeper: The NAM’s first-of-its-kind report, “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” details use cases for AI in manufacturing and case studies of how manufacturers are implementing AI technologies. In the report, Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel shares how J&J uses AI in clinical trials.
- “When we conduct clinical trials, AI helps us more efficiently establish safety and effectiveness guardrails, while allowing us to conduct trials at a larger scale,” writes Wengel. “AI also gives us a far stronger mastery over our supply chains. Overall, it helps our people do a better job of living up to our commitment of improving health care outcomes and making our towns, country and world a better place.”
NAM, Partners Urge Administration to Withdraw “March-in” Proposal
If finalized, guidance proposed last year by the Biden administration to allow the federal government to seize manufacturers’ intellectual property rights would be ruinous to the U.S. innovation economy, the NAM and state partners told Commerce Secretary Gina Raimondo this week.
What’s going on: In December, the Biden administration issued a proposal to enable government agencies to “march in” and revoke companies’ patent exclusivity if a product’s development was funded in any part by federal research dollars.
- Under the proposal, the government’s decision of whether to march in would be based on a product’s price—effectively imposing government-mandated price controls on innovative products like clean energy solutions, next-generation semiconductors and lifesaving medicines.
Manufacturers fight back: The NAM and a coalition of regional and state manufacturing associations are pushing back, highlighting the importance of ironclad IP rights to groundbreaking innovation.
- “[T]urning groundbreaking R&D into innovative products for the American people is only possible if creators—from university researchers to early-stage entrepreneurs to established businesses—can rely on strong intellectual property protections,” the associations told Raimondo.
Small business impacts: Startups and small businesses would pay the heaviest toll if the new march-in standards are finalized.
- Scientists and researchers at universities nationwide will face difficulties in partnering with the industry and in founding startups based on their research, “strik[ing] a blow to the local economies in [all 50] states that depend on university-centered innovation hubs for job creation and economic growth.”
- If a promising idea makes it out of the lab, outside investors will be reluctant to inject the capital necessary for further R&D and product development—resulting in fewer life-changing and lifesaving products for the American people.
What needs to happen: Manufacturers are calling on the Biden administration to reverse course.
- “We urge you to protect our local, state and regional economies, which benefit from breakthrough research, entrepreneurship and modern manufacturing, by withdrawing the proposed march-in guidance.”