Research, Innovation and Technology

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.

-NAM-

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.

Artificial intelligence is improving efficiency, workplace safety, product development, machine maintenance and supply chain logistics at manufacturing facilities everywhere, according to a new, first-of-its-kind report from the NAM.

What’s going on: “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” released today, details use cases for AI in the sector, discussing how manufacturers nationwide are using it to improve lives everywhere.

• The report features deep dives on AI-powered technologies at manufacturers, including Johnson & Johnson, Schneider Electric and Hitachi.

Trailblazers need good policy, too: “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,” said NAM President and CEO Jay Timmons. “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.”

• Legislators should “lean on” manufacturers’ deep experience when drafting AI-related legislation, added Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel.
• “All possible futures for modern manufacturing in the U.S. involve AI,” she said. “Policymakers must develop sensible, carefully thought-out frameworks for various AI applications. … 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.”

The recommendations: The report contains immediately implementable policy recommendations for lawmakers:

• Invest in research and development and career technical education institutions to train the modern manufacturing workforce.
• Pass federal privacy legislation to advance individuals’ privacy protections and give legal clarity that will support continued innovation by manufacturers.
• Use a risk-based approach to new AI regulations that tailors any future laws to specific use cases and minimizes the burden of compliance.
• Ensure that AI regulation is aligned globally.

In advance of a Senate hearing on health care costs, the NAM is ensuring that senators understand the importance of biopharmaceutical innovation to patients and the U.S. economy—and the damaging impact of policies that hinder drug development.

What’s happening: The Senate Armed Services Committee will hold a subcommittee hearing today on whether harmful policies like price controls, compulsory licensing and weaker intellectual property protections for new medicines could reduce servicemembers’ health care costs.

NAM pushes back: The NAM is highlighting the extraordinary investment—in both time and capital—that it takes to bring a lifesaving treatment to market. According to the NAM:

• The average cost of developing a new drug was $2.3 billion as of 2022;
• Across the industry, biopharmaceutical manufacturers spent $139 billion on R&D in just 2022 alone;
• It can take 10 to 15 years for a breakthrough scientific discovery to move through early-stage research, clinical trials, Food and Drug Administration approval and manufacturing; and
• Only 12% of investigational drugs that enter a Phase I clinical trial ultimately receive FDA approval—to say nothing of the hundreds of discoveries that never make it into clinical trials.

Lifesaving impact: In 2023, the FDA approved a record-breaking 71 new medicines that will improve the lives of patients.

• The biopharmaceutical industry behind these breakthroughs is also stimulating the U.S. economy: Biopharmaceutical manufacturers accounted for $355 billion in value-added output to the U.S. economy in 2021 and directly employed 291,000 workers in the U.S.

Innovation under threat: In recent years, biopharmaceutical manufacturers have been subject to harmful policies that will limit innovation and slow efforts to develop lifesaving medicines.

• The Medicare Drug Price Negotiation Program subjects life-changing biopharmaceutical innovations to government price controls, while the Biden administration’s “march-in” proposal undermines innovators’ IP rights. These policies make it riskier and more costly for manufacturers to invest in groundbreaking research.
• What’s more, the prices Americans pay for medicines are influenced heavily by middlemen, such as pharmacy benefit managers rather than biopharma companies. In 2020, more than half of every dollar spent on brand medicines went to PBMs and others in the health care system—not the medicine’s manufacturer.

The final word: “The costs of manufacturing a medicine include potentially decades of research and billions of dollars of investment,” said NAM Vice President of Domestic Policy Charles Crain. “Congress must avoid adopting policies that will stymie this lifesaving innovation.”

The Innovation Research Interchange has announced the finalists for this year’s IRI Innovation Excellence Awards.

What’s going on: The honors given by the IRI—the NAM’s innovation arm—pay tribute to organizations and individuals whose outstanding vision and tireless pursuit of excellence are having a positive impact on lives today and shaping the industries of tomorrow. Honorees come from companies of all sizes and industries.

The categories: Awards are given in five categories, three to companies and two to individuals. They are as follows:

• IRI Innovation Leadership Award (individual)
• IRI Promising Young Innovation Professional Award (individual)
• IRI Excellence Award for Innovation in Sustainability (company)
• IRI Excellence Award for Outstanding Innovative Culture (company)
• IRI Excellence Award for Digital and Technological Innovation (company)

Who participates: Each year, nominees comprise innovators who are leveraging technology to enhance operational performance at their companies or sustainability and fostering a collaborative workplace culture that celebrates innovation.

• High-performing leaders who drive sustainability initiatives are also recognized, and consultants and university partners working on exciting innovation projects with a company are eligible for nomination, too.

Why they’re important: In addition to building team unity and encouraging executive leadership to invest further in innovation, the awards give companies the chance to revisit the successes, challenges and lessons learned throughout their innovative projects.

• Selection as a finalist shows customers, prospects and partners that a company or individual is at the forefront of innovation.

Attend the celebration: Winners will be announced May 16 during the Innovation Celebration and Reception at the Innovators Summit in Boston. Celebration admission is included with summit registration.

About the IRI: The IRI offers insights, case studies, research, benchmarks and strategic connections—all built around a set of innovation growth drivers as determined by members annually. Learn more about the IRI here.

In advance of a Senate hearing on health care costs, the NAM is ensuring that senators understand the importance of biopharmaceutical innovation to patients and the U.S. economy—and the damaging impact of policies that hinder drug development.

What’s happening: The Senate Armed Services Committee will hold a subcommittee hearing today on whether harmful policies like price controls, compulsory licensing and weaker intellectual property protections for new medicines could reduce servicemembers’ health care costs.

NAM pushes back: The NAM is highlighting the extraordinary investment—in both time and capital—that it takes to bring a lifesaving treatment to market. According to the NAM:

• The average cost of developing a new drug was $2.3 billion as of 2022;
• Across the industry, biopharmaceutical manufacturers spent $139 billion on R&D in just 2022 alone;
• It can take 10 to 15 years for a breakthrough scientific discovery to move through early-stage research, clinical trials, Food and Drug Administration approval and manufacturing; and
• Only 12% of investigational drugs that enter a Phase I clinical trial ultimately receive FDA approval—to say nothing of the hundreds of discoveries that never make it into clinical trials.

Lifesaving impact: In 2023, the FDA approved a record-breaking 71 new medicines that will improve the lives of patients.

• The biopharmaceutical industry behind these breakthroughs is also stimulating the U.S. economy: Biopharmaceutical manufacturers accounted for $355 billion in value-added output to the U.S. economy in 2021 and directly employed 291,000 workers in the U.S.

Innovation under threat: In recent years, biopharmaceutical manufacturers have been subject to harmful policies that will limit innovation and slow efforts to develop lifesaving medicines.

Read the full story here.

The NAM testified before the U.S. Copyright Office last week, explaining how two proposed exemptions from copyright protections would weaken manufacturers’ intellectual property rights, do significant harm to their businesses and potentially endanger consumers.

What’s going on: The Copyright Office is considering whether to recommend two exemptions from the Digital Millennium Copyright Act that would allow users to circumvent measures protecting copyrighted content.

• One proposal was designed to allow the so-called “right-to-repair” by enabling access to operational data (including diagnostic and telematics data) from automobiles, agricultural vehicles, marine vessels and more. The other is focused on industrial equipment.

NAM speaks out: “The basis of the so-called ‘right-to-repair’ movement hinges on the false notion that owners do not have the ability to repair their own equipment,” NAM Vice President of Domestic Policy Charles Crain said at the recent hearing. “The truth, however, is that the majority of [original equipment manufacturers] already provide a wide range of resources and tools that allow users—and third-party repair businesses—to maintain, diagnose and repair products.”

• The NAM previously submitted comments urging the Copyright Office not to adopt the proposed exemptions.

Why it’s important: “These exemptions would undermine manufacturers’ IP rights in service of right-to-repair—and the record does not support their adoption,” Crain continued.

• The exemptions are too broad and inadequately defined, and their proponents have “failed to show that users will be adversely affected absent the ability to circumvent [copyright law].”
• What’s more, the exemptions “would expose proprietary information to public consumption and use, likely endangering consumers and allowing for unlawful modifications of government-mandated safety and emissions limits.”

The last word: “In short, right-to-repair is a solution in search of a problem,” Crain said.

A common theme in science fiction is the fully automated, robotized factory that manufactures nothing but robots. We’re not there yet, but the fully automated manufacturing plant has already begun making everyday products, including computer parts, electric shavers and CNC machines.

The promise of AI: Now generative AI is promising to take manufacturing automation manufacturing to a new level.

• At the 2023 Hannover Messe trade fair in Hanover, Germany, Siemens and Microsoft showcased an offering now in use in factories worldwide: a system that uses ChatGPT to generate code for industrial computers known as programmable logic controllers. (For a deeper dive into what this means for manufacturing, read the full version of this article by Tim Hornyak in the Innovation Research Interchange’s Research-Technology Management magazine.)

Why it’s important: The innovation allows users to ask ChatGPT to generate code for specific tasks (i.e., a program to operate the stamping of a part).

• In addition to saving time and reducing the likelihood of errors, it is capable of understanding commands given in natural language, a characteristic that vastly increases the number of potential users.

Efficient designs: Creating more efficient designs is another early use case for generative AI.

• General Motors has used the technology to evaluate better designs for some of the roughly 30,000 parts that go into the average car. For example, a standard seat bracket—an important safety component that binds seatbelt fasteners to seats as well as seats to the floor of the car—consists of eight separate pieces welded together.
• Generative-design software used by GM analyzed the requirements and suggested more than 150 alternative designs, far more than the two or three options a designer can typically offer. GM engineers chose one: a single piece of stainless steel that is 40% lighter and 20% stronger than the conventional part.

Pharma applications: Generative AI looks promising for the pharmaceutical industry, too, given its potential for cutting costs and drug time to market.

• Merck has used generative AI to create synthetic images of complex but rare defects, a group for which training data are limited. The drugmaker’s quality-control sensors use the synthetic images to watch for novel defects.

Other potential use cases: The possible uses for generative AI in other areas is vast and includes the following:

• Reducing time and cost involved in creating physical prototypes
• Automating search and summary of documents related to manufacturing equipment, which would speed repairs and maintenance
• Accelerating supply chain operations by forecasting demand patterns, minimizing production downtime and suggesting better transport routes
• Customizing products or solutions to better suit customer needs
• Forecasting raw materials needs, optimizing production schedules and identifying production inefficiencies

However … Generative AI in manufacturing is not without its challenges. The energy cost to power a single server rack in the U.S. is $30,000 a year.

• Just one training run for an AI engine consumes the power equivalent of 120 U.S. households per year.
• With the reliance on large datasets, manufacturers are concerned about data privacy and security, necessitating robust data-protection measures.
• The integration of AI in manufacturing may require a change in workers’ skillsets and corporate culture.
• As AI plays a more significant role in decision-making, ethical questions about bias and accountability are emerging.
• Manufacturers have to ensure that AI systems operate fairly and transparently.

Find out more: AI in manufacturing is just one of the timely topics covered in depth in Research-Technology Management, the journal of the IRI, the NAM’s innovation division. Learn more.