Research, Innovation and Technology

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.

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.”

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.”

NAM President and CEO Jay Timmons delivered a defining speech at the Friends of Adam Smith Awards a decade ago. This speech outlined the “Four Pillars of an Exceptional America,” a framework that continues to shape the NAM’s mission and advocacy.

Flashback: On June 11, 2014, in his speech accepting the 2014 Business Citizen Award for an outstanding record of achievement in advancing the principles of free enterprise, Timmons introduced the four pillars that underpin American exceptionalism and manufacturing strength.

The Four Pillars:

• Free enterprise: The economic system that unleashes innovation, creates opportunity and lifts humankind out of poverty more than any other economic system has in the history of the world.
• Competitiveness: Our ability, when untethered from government overreach, to prosper and win in a global economy.
• Individual liberty: The unique freedoms enshrined in our Constitution and Bill of Rights that enable us to live and succeed.
• Equal opportunity: Our shared belief that we all have the ability to contribute to the betterment of our families, our companies, our communities and our country.

Manufacturers’ approval: The NAM Board of Directors unanimously adopted these pillars as part of the association’s official policy positions, guiding the NAM’s Competing to Win agenda to bolster the competitiveness of manufacturers in the United States.

The impact: These pillars have guided the NAM’s efforts in promoting policies that support a robust manufacturing industry and a strong national economy, helping to draw support across the political divide for manufacturers’ principles-based agenda.

The bottom line: “The Four Pillars are not just about manufacturing; they are about sustaining the promise of America,” said NAM Executive Vice President Erin Streeter. “That’s why these values have helped us ensure the manufacturing agenda is a post-partisan agenda, drawing support for so many of our priorities from policymakers and by candidates—on both sides of the aisle—on the campaign trail. We will continue to work with anyone who wants to advance these values.”

The demand for copper is skyrocketing—and global mining company Rio Tinto is powering forward full throttle to meet it (CNBC).

What’s going on: “The red metal, considered a barometer for economic health, is a vital component for the construction and defense industries as well as a key component in electric cars, wind turbines and the power grid.”

• However, current mines and in-the-works projects “will meet only 80% of copper needs by 2030, according to the International Energy Agency.”
• “There’s this growing consensus that demand fueled by the energy transition is going to outstrip supply, and that’s why analysts say we are simply not going to have enough of it,” said CNBC Markets Reporter Pippa Stevens in a recent CNBC video. “And copper really is the backbone of decarbonization goals.”

The challenges: Copper mining is difficult and expensive—and it takes 10 to 15 years to build each mine, Rio Tinto CEO Bold Baatar told CNBC.

A beneficial metal: Copper is the most economical conductor available, and directly and indirectly, it supports more than 395,000 U.S. jobs and more than $160 billion in economic output.

Behind the scenes: CNBC went behind the scenes at Rio Tinto’s Kennecott operations in Utah, where “about 200,000 metric tons of copper are produced annually.”

• There, Rio Tinto is increasing its open-pit mining operations and has started an underground project to mine higher-grade ore.
• Kennecott is unique for its smelter and refinery, “where the ore is processed into almost pure copper.”

Permitting challenges: Another of Rio Tinto’s projects, the Resolution Copper mine in Arizona, has the potential to power up to 25% of U.S. copper demand—but it has been mired in a regulatory morass for the better part of two decades.

• “The last hard-rock mine that was permitted was in 2008,” Rio Tinto Copper Chief Operating Officer Clayton Walker told the news outlet. “We’ve been working on the Resolution Mine for about 18 years.”

Independence is possible: “Theoretically, there are enough reserves in the U.S. that we could become independent for our copper needs,” Walker continued. “It’s just, how do we do that? How do we get the permits?”

What the NAM is doing: The NAM has been engaging directly with the Biden administration and members of Congress through meetings and briefings at NAM headquarters to push for comprehensive permitting reform.

• In addition, the NAM, along with members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations, last summer launched Manufacturers for Sensible Regulations, a coalition that seeks to speed up the frequently slow, arduous federal permitting process for energy infrastructure projects and address the large number of regulations being churned out by the federal government.

The names are in! The Manufacturing Leadership Council—the NAM’s digital transformation division—is pleased to announce the winners of the 2024 Manufacturing Leadership Awards.

Now in its 20th year, the awards competition recognizes outstanding manufacturing companies and their leaders for groundbreaking use of advanced manufacturing technology.

“The class of 2024 should indeed be proud of their achievements in advancing the digital model of manufacturing,” said MLC Founder, Vice President and Executive Director David R. Brousell. “The awards reflect the truly incredible amount of innovation taking place in all sectors of the industry.”

Manufacturing Leader of the Year: Cooley Group President and CEO Daniel Dwight is the 2024 Manufacturing Leader of the Year.

• Dwight, who also serves on the MLC’s Board of Governors and is a member of the Executive Committee of the NAM Board of Directors, has overseen a significant turnaround in Cooley’s business performance through digital transformation, with a commitment to investing in smart factory technologies and developing a digital-ready workforce and business culture.
• In addition, the MLC named Cooley Group the 2024 Small/Medium Enterprise Manufacturer of the Year.

Large Enterprise Manufacturer of the Year: Intertape Polymer Group is the 2024 Large Enterprise Manufacturer of the Year.

• The award recognizes IPG’s achievements in digital transformation, including technology integration and workforce training.
• The company has also made noteworthy strides in sustainability through reductions in both energy usage and waste.

More honors: The MLC also announced winners in 11 project and individual categories, as well as the winners of the Manufacturing in 2030 Awards. The latter are given to projects with particularly forward-thinking innovations.

• The MLC honored all finalists and winners at the Manufacturing Leadership Awards Gala last night in Marco Island, Florida. A complete list of finalists and winners is available here.

Nominations for the 2025 season of the Manufacturing Leadership Awards will open on Sept. 16, 2024. More information is available here.

Technology is constantly changing. But how will this era of digital transformation change the manufacturing industry?

The NAM’s Leading Edge program partnered with Siemens to present “Beyond the Buzzwords: A Digital Thread Journey,” a four-part webinar series dedicated to understanding how cutting-edge ideas affect manufacturers. In the first episode, we put the digital transformation journey in context by introducing the “digital thread.” In the next three, we dove deeper into cloud acceleration, artificial intelligence and radical flexibility.

Cloud acceleration: A business’s digital needs are covered by a combination of software, hardware and physical infrastructure. If you turn to an offsite partner to provide any of those elements, then you are probably already using cloud acceleration to support your business.

• We spoke with Surf Loch Director of Project and Process Development Bryan Behr, Siemens Senior Vice President of Cloud Application Services Raymond Kok and Surf Loch Systems Engineer Miles Miller to learn more.

What it is: Cloud acceleration refers to a wide range of on-demand computing services hosted outside of your organization.

• Kok explained that cloud acceleration “is really a layer cake with three layers to it.” At the highest level is “infrastructure as a service,” like data centers. In the middle is “platform as a service,” which might provide you with the building blocks to create your own applications. And at the final layer is “software as a service,” which is what you would typically get from a commercial software vendor.

How it helps: Cloud acceleration is easier, more cost effective and more flexible than managing all of your computing needs internally.

• “The cool thing about the cloud is how containerized everything is,” said Miller. “Data is readily available in a very organized fashion. … If there’s a problem or something needs to be solved, we can put that data in the right hands.”
• Behr also pointed out the benefits for digital security. “It’s either rely on one thing to maintain our security on premise or rely on a very sophisticated cloud team as part of a set of resources. … [I]t became pretty obvious that that appears to be a safer place for us than potentially on premise.”

Learn more: To learn more about cloud acceleration, check out the full webinar here.

AI/machine learning: We know that AI and machine learning are affecting every industry. But how should manufacturers use this new technology?

We brought together Siemens Advanta North America CEO Rani Russell Shea and Schaeffler Special Machinery Head of Electrical & Software Engineering Stefan Gahabka to learn about how to approach AI.

How it works: “The basic idea with AI is that you use data to train models,” said Shea. “Those models can run analytics and then essentially make decisions while learning things, like pattern detection. And then when you’re talking specifically about industrial AI, you’re talking about using AI for machine learning solutions, to solve business problems, things like factory optimization.”

Augmenting humanity: According to Shea and Gahabka, AI is intended to elevate the human factor in manufacturing, not replace it.

• “Everybody really wants to be able to do their job better, faster, more accurately, more safely, more sustainably,” said Shea. “AI … is going to help us do that, and by doing that, it’s literally elevating the role of people so we’re free to then use our creativity, our experience and our knowledge to really address the complex stuff.”

Doing more: AI can be used to measure, model and optimize everything from energy usage to supply chains—even helping manufacturers find the right partners to match their sustainability objectives.

• “We talk about the hard things like quality and cost, but can also think about the next step,” said Gahabka. “We can search for suppliers that have sustainable locations and goals.”

Learn more: To learn more about AI and machine learning, check out the full webinar here.

Radical flexibility: Many think of efficient manufacturing in terms of highly standardized automatable processes. Today, though, new technology is creating new possibilities for manufacturers.

We convened an expert panel with Vice-President of Digital Enterprise at Siemens Alastair Orchard, Global Engineering Director and Automation & Robotics Lead at Unilever Cesare Gibilaro, and Process Orchestration & Manufacturing Hub, Manager for Business Operations at Unilever Louise Gigg to introduce us to radical flexibility and the future of manufacturing.

What it is: Technological advancements are making it possible for manufacturers to make only what is needed when it is needed, rather than having hard-coded machines that limit what your business can do for the sake of efficiency.

• For much of the past century, according to Orchard, manufacturers had been focused on “removing degrees of freedom from manufacturing, making it more rigid, so that automation could be applied to extremely repeatable processes … radical flexibility really challenges that assumption to its core. And we asked: what if nothing was hard coded?”
• “The radical way of looking at it,” said Gigg, “is reconfiguring the asset that you have on automation [and giving it] a new task or a new capability that it didn’t have yesterday.”

How to use it: Radical flexibility is all about using your assets more effectively and more efficiently to deliver more options for your customers.

• Gibilaro highlighted the ability to change directions with incredible speed. “With radical flexibility, we have the opportunity to reconfigure the line. … It is not a matter of hours, but a matter of minutes.”

Why it matters: Because radical flexibility allows processes to shift quickly, there’s less wasted time and inventory.

• “It’s this ability to make things where you need them in small quantities,” said Orchard. “You’re risking much less, and you’re not forced to make these giant bets.”

Learn more: To learn more about radical flexibility, check out the full webinar here.

A manufacturing business is filled with internal processes, workflows and standards, and the average factory generates thousands of data points per day. But how does a manufacturer capture that data? How do they preserve institutional knowledge? What if they could automate workflow, create seamless project handoffs and track development around every stage of a project’s life?

The NAM’s Leading Edge program, in partnership with Siemens, asked a panel of experts these questions in “Beyond the Buzzwords: The Digital Thread Journey,” the first in a four-part webinar series focused on understanding the “digital thread” in the workplace. In the first installment of the series, Siemens Vice President of Industry Strategy Dale Tutt and Anduril Industries Chief of Engineering Tom McCarthy introduced us to the idea of the digital thread—what it is, why it matters and how manufacturers can harness its power to succeed.

What it is: The digital thread is a concept rather than a specific technology. According to Tutt, it is about capturing and connecting every piece of a project’s life cycle digitally, and using that connectivity to provide a seamless transition of information from one functional area to another.

• “We often refer to a digital thread as singular, like it’s a thing,” said McCarthy. “But really, in my mind, it’s a lot of threads. … it ends up being more like a rope than a thread.”

Why it matters: A strong digital thread can automate a manufacturer’s workflow, capture data more effectively, preserve institutional knowledge, trace development processes and even capture the context that informs how decisions are made.

• Radically new technology means that organizations can accomplish these tasks more successfully than ever before—and that those who ignore that opportunity could be left behind.
• “The biggest risk is to do nothing and assume this fad will go away,” said McCarthy.

The challenges: One of the biggest challenges in building a strong digital thread in your own workspace is integration and data management.

• Manufacturing systems need to manage lots of data coming to it in different formats. But according to Tutt, that data needs to be organized in a comprehensible way. “It’s about producing the right data at the right time in the right … format,” said Tutt.
• According to McCarthy, a digital thread isn’t just a database. It is the key that deciphers that data and makes it accessible and intelligible for the user. “We need a Rosetta Stone,” said McCarthy, “to be able to understand how that data maps onto other tools.”

Implementation and technology: New technology and strategic concepts have enhanced our capacity to build strong digital threads—and with that new ability has come a new and urgent need to make use of the concept to strengthen the manufacturing industry.

• To get started on your own digital thread journey, Tutt and McCarthy agreed that manufacturers should dig into the existing workflows in their organization and introduce one tool at a time, rather than trying to engineer a master solution all at once.
• “You can work the digital infrastructure you need for that workflow in pieces, so you can build them up over time,” said McCarthy. “You got to keep your eye on the end game, but if you try to build it all at once, good luck.” 

Learn more: To learn more about digital threads, check out the full webinar here. 

Coming up: In the next three webinars in this series, Beyond the Buzzwords explores a few of those tools and concepts that drive the digital thread in the modern day: artificial intelligence, cloud advancements and radical flexibility.

The Biden administration’s push to invoke “march-in” rights is unlawful and would have “disastrous consequences” for the United States if enacted, the NAM told the Senate Tuesday.

What’s going on: Ahead of a Senate Judiciary Committee hearing on intellectual property in the biopharmaceutical sector, the NAM warned of the potentially dire consequences of the proposed march-in framework issued by the National Institute of Standards and Technology.

• The NIST proposal would allow the federal government to “march in” and seize manufacturers’ patent rights if an innovation was developed in any part with federal dollars.
• In the biopharmaceutical sector and other innovative industries, federal funding plays an important role in supporting early-stage research—but further R&D, product development and commercialization require hundreds of millions to billions of dollars in additional capital from investors and established companies.
• Robust IP protections ensure that manufacturers can bring innovative products to consumers.

Why it’s a problem: March-in would violate manufacturers’ IP rights and prevent investment into lifesaving and life-changing technologies, according to NAM Vice President of Domestic Policy Charles Crain.

• “Allowing march-in based on the price of a product or technology, as the NIST guidance proposes … would undermine manufacturers’ IP rights and have sweeping ramifications for innovation in the United States and America’s world-leading innovation economy,” Crain told the committee.
• Committee member Sen. Chris Coons (D-DE) agreed during the hearing that the proposal is fundamentally flawed. “Any company [that] invents [anything] or any researcher who invents anything is now open to the federal government saying, ‘I want that, and I don’t agree with the price you’re setting for it,’” he said.

What should happen: Congress must stop NIST’s overreach, Crain said.

• “Policies that threaten IP protections, like NIST’s proposed march-in guidance, will cede one of our greatest advantages to our competitors. Manufacturers [look forward] to work[ing] with the committee to ensure the U.S. maintains the strongest IP protections in the world in order to spur the discovery and commercialization of inventions that improve health and quality of life for all people.”

Washington, D.C. – The National Association of Manufacturers released a first-of-its-kind report, “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” detailing use cases for artificial intelligence in manufacturing and case studies of how manufacturers are already implementing AI technologies to strengthen America’s workforce, advance innovation and improve the quality of life for everyone.

The report provides an overview of insights from leading manufacturers, including Johnson & Johnson, Schneider Electric and Hitachi, on how AI can improve efficiency, product development, safety, predictive maintenance and supply chain logistics. The report also outlines a series of recommendations on how policymakers can help support the safe, responsible development of AI while promoting innovation and growth.

“So much of the media and policymaking conversation is focused on generative AI, but AI is far more than that for modern manufacturers,” said NAM President and CEO Jay Timmons. “It’s infused increasingly throughout the shop floor, research and development and beyond. Manufacturers are leading the way in the use and development of new AI technologies. From developing more effective clinical trials and improving workplace safety to strengthening supply chain resiliency and supporting workforce training for employees, AI is unlocking new opportunities to strengthen our modern manufacturing workforce and improve the lives of all Americans. Congress and the Biden administration can support manufacturers’ adoption of AI by enacting strong data privacy protections, investing in workforce training and providing regulatory certainty.”

“All possible futures for modern manufacturing in the U.S. involve AI,” said Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel. “Given the importance of this generational technology, policymakers must develop sensible, carefully thought-out frameworks for various AI applications—and they should lean on manufacturers’ years of experience to engineer those frameworks. We need a policy environment that supports innovation and growth in manufacturing AI, because it will bolster U.S. competitiveness and leadership in this critical emerging field.”

Policy recommendations include the following:

• Invest in R&D and career technical education institutions that train the modern manufacturing workforce.
• Enact federal privacy legislation that advances individuals’ privacy and provides legal clarity that supports continued innovation and competitiveness.
• Employ a risk-based approach that tailors any new AI regulations—only if new regulations are necessary—to specific use cases and minimizes compliance burdens.
• Ensure that regulatory frameworks are aligned globally to maintain U.S. global leadership. The more disparate the approach to AI around the world, the more time, energy and investment companies will need to spend navigating misalignments.

Learn more here.

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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 nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% 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.