Manufacturers Find Opportunity in AI
How will AI change the work you and your employees do? The Manufacturing Leadership Council—the digital transformation arm of the NAM—is helping manufacturing leaders figure out the opportunities created by new generative AI technologies, including ChatGPT.
Recently, the MLC held a Decision Compass discussion to help manufacturers learn how to take advantage of these new tools safely and effectively.
The participants: The conversation was led by two members of West Monroe’s Center of Excellence for AI: Ryan Elmore and David McGraw. Elmore and McGraw shared their expertise and addressed questions from manufacturers throughout the call.
The use cases: AI is a diverse and complex tool that is likely to have a lasting impact on manufacturers across the United States. According to McGraw and Elmore, there are a range of applications for the technology, from supply chain optimization and production planning to predictive maintenance issues.
The workforce impact: According to Elmore, AI will also transform the manufacturing workforce.
- Some roles that involve repetitive tasks like data processing could be adjusted or eliminated, while some new jobs will be created around tasks like prompt engineering, which ensures AI programs deliver the most useful and accurate results. Most importantly, however, existing jobs will likely be modified to account for new tools.
- “Some are going to go away, some are going to be created, but the vast majority is going to change mentality, change infrastructure, change the way we work,” said Elmore.
Prompting success: Elmore and McGraw emphasized that the key to using generative AI effectively is developing useful prompts. How you ask AI programs for information, and what data you provide, will determine the quality of the output. They provided a few broad guidelines:
- Keep it simple: Your prompts should be detailed, precise and as succinct as possible.
- Data matters: The better and more detailed your data, the better your output will be.
- Keep it human: Generative AI still requires a human to determine the reliability of the output. Manufacturers shouldn’t plan to use outputs blindly without keeping a human in the loop.
- Share safely: Assume anything you put into AI that is not behind a paywall is not private. Only use data that you’re comfortable with others viewing.
- Follow up: If you receive outputs that don’t make sense, or that indicate some sort of failure, ask the program for more context and problem solving to assess whether the output is accurate or beneficial.
Safety first: AI can also be used in negative ways—for example, by cyber attackers attempting to gain private information from you using software that mimics the voice of someone you know.
- Elmore and McGraw emphasized that manufacturers using AI should consider providing trainings so employees can recognize and guard against safety issues.
The last word: “I think most importantly, you’re only limited to your imagination,” said McGraw. “There’s really a lot of use cases that can be solved with this technology.”
Learn more: Want to find out more about how digital tools are changing manufacturing? The MLC will delve deeper into these issues at this year’s Rethink Summit, taking place June 26–28 in Marco Island, Florida. Learn more and register here.
How ALOM Triumphs in a Tight Labor Market
How can manufacturers recruit and retain employees amid a skills gap that leaves hundreds of thousands of manufacturing jobs unfilled every month? ALOM Technologies Corporation—a global supply chain management services and solutions provider based in Fremont, California—has an answer: focus aggressively on company culture.
The results are in and ALOM’s program is a remarkable success, leading to workforce and revenue growth for the company over the past few years. This achievement led ALOM to be named a finalist for the Manufacturing Leadership Awards, given every year by the Manufacturing Leadership Council (the NAM’s digital transformation division). Here’s a sneak peek into how they did it.
The program: After being named an essential business in 2020 due to its medical supply chain infrastructure, ALOM turbocharged its existing culture program, called DOING—which stands for Development, Opportunity, INclusion and Growth—to support staff recruitment and retention in a challenging labor market.
- The program had existed since 2018 and was based on ALOM’s longstanding cultivation of values-driven purpose. When the company expanded it during the pandemic, it enabled ALOM to build a higher performing team across multiple locations.
The details: ALOM has employed several strategies for reinforcing its cultural values, aiming to instill a sense of purpose and belonging in job candidates and veteran staff alike. These include:
- Showcasing their commitment to diversity, inclusion and sustainability both inside the organization and in recruitment efforts;
- Redefining the ALOM People Team mission and structure to emphasize staff development over compliance;
- Working to address employee wellness through stress and mental health education and resources; and
- Instituting a staff development online portal called ALOM University that empowers rapid onboarding, training and advancement.
The results: The program has been an extraordinary success, helping to increase ALOM’s workforce and strengthen the company’s bottom line at the same time. In 2021 alone, the company achieved:
- 70% workforce growth;
- 60% revenue growth;
- A 6% decrease in employee attrition for 2021, as compared to 2018; and
- A 65% reduction in recruitment days to fill open positions.
Looking ahead: ALOM isn’t done yet. This year, the company is working on a digital transformation effort, called DOING DX, designed to make all of ALOM’s tech systems and business processes more efficient and effective.
- It will focus on staff recruiting, performance management, supplier management and evaluation, team building, mentoring and much more.
The last word: “When I started ALOM 26 years ago, I was determined to build a supply chain company that did right by everyone,” said President and CEO Hannah Kain.
- “This has become the foundation of ALOM’s corporate culture. We believe in using the supply chain to help the world be a better place—for the environment and for every person, supplier and company. Experiencing our values in action instills a sense of pride and belonging in our staff that helps us attract, build and retain an exceptionally talented team.”
Get involved: Want to learn more about this successful workforce effort, as well as a whole host of other innovations by leading manufacturers? Join the MLC for its Rethink summit in Marco Island, Florida, on June 26–28. Sign up here.
How a Nearly Century-Old Textile Maker Went Digital
It’s no easy feat to transform a struggling family business into a thriving digital enterprise, but that’s exactly what Cooley Group President and CEO Dan Dwight is doing.
Change for the better: Cooley Group was formed in 1926 as a family-run textile manufacturer in Rhode Island. In 2011, Dwight, a member of the NAM Board of Directors, joined the company as president and CEO to navigate the ship through a new age of manufacturing and market demands.
- Today, the private equity-backed extrusion and textile manufacturer is the leading global maker of polymer-coated textiles. Applications range from single-use blood-pressure-cuff materials, to proprietary urethane combat raiding crafts for U.S. special forces, to liners and covers for some of the world’s largest water reservoirs.
How they did it: “As a family-run business, Cooley inherited aging equipment and an aging workforce,” said Dwight, who also serves as vice chairman of the Manufacturing Leadership Council’s Board of Governors. (The MLC is the NAM’s digital transformation arm.)
- “We not only modernized our equipment and infrastructure to compete in the digital age, but also revolutionized our culture. Hierarchies slowed us down.”
- “Digital transformation isn’t only beneficial for the advancement of our physical technologies; it’s also critical to develop a more collaborative company culture that empowers employees at all levels to take action.”
Starting small: “Digital transformation—the integration of digital technology into all facets of an organization—can seem daunting at first,” Dwight said. “But that can’t deter an organization from jumping in.”
- “I advise companies, particularly mid-sized manufacturers like Cooley Group, to approach digital transformation incrementally,” he said. “Don’t expect the cultural, institutional or technological benefits of digital transformation to manifest overnight as some mega-solution.”
- “Think strategically about the areas of your business that are the first movers. Once one aspect of the business is modernized, the digital insights and team’s enthusiasm for change will build momentum to push the remaining pieces into place.”
Gaining momentum: The transformation of this firm of 300 people is ongoing. “Ten years ago, we had trouble keeping our equipment operating for any period of time,” Dwight said. “Now everything in all our factories is digitally [Manufacturing 4.0]-driven across a single operating platform.”
- The company plans to do the pilot phase of an artificial intelligence implementation later this year.
Figuring it out: The MLC was key in Cooley Group’s remarkable transformation, according to Dwight.
- “I’m not sure we would have figured it out on our own,” he admits. “I’m an avid reader; I was born excited to build things. I read a lot about manufacturing and leadership. But even if I could have figured out M4.0 strategy, actually implementing it on the plant floor would have been difficult without the support of MLC members to share best practices and to encourage the Cooley team to embrace transformation.”
Get involved: Companies can jumpstart their own digital transformation by attending Rethink, the MLC’s premier event for manufacturing executives, in Florida on June 26–28. Check it out here.
Small Manufacturers Win Big with Digital Transformation
For small and medium-sized manufacturers, digital transformation can seem like an especially harrowing task. But smaller organizations can be uniquely positioned for success in implementing firmwide digital strategies.
Small but mighty: Just look at Graphicast, a 25-person precision metal parts company in Jaffrey, New Hampshire.
- “Because the cost of data collection and analytics is getting lower and lower, even as a small company we can collect data at a rate that gives us meaningful information we can act upon,” said Graphicast President Val Zanchuk. “For example, we created a linear programming model of our business. If we’re growing at a certain rate, I can use it to determine the most economical next steps, such as whether we should hire more people, work overtime or purchase more equipment.”
A workforce solution: Graphicast, which counts Fortune 100 companies among its clientele, has used cloud computing, AI-based systems and more to help it succeed, according to Zanchuk.
- The manufacturer is also looking into the use of collaborative robots as a potential solution to the labor force shortage.
- “When it comes to Manufacturing 4.0, we think about what our customers will be looking for from us in terms of digital collaboration,” said Zanchuk, adding that some of the business’s larger customers are “transforming at a different rate than we are.” That means it’s up to Graphicast to consider client expectations and see how best to meet them given “what’s financially and operationally feasible” for the company.
The MLC helps out: To aid in Graphicast’s digital transformation, Zanchuk joined the Manufacturing Leadership Council, the NAM’s digital transformation division.
- “The MLC is the only place I know where I can discuss broad industry trends in an open fashion, where small companies like mine and large companies like Ford or GM can all be involved in the discussion,” said Zanchuk, who serves on the MLC Board of Governors.
- “Being part of the MLC lets us know if we’re on the right track and how we can make adjustments,” he continued. “It connects us to a group of incredibly talented, intelligent and experienced people who are focused on many of the same operational challenges we face.”
Announcing the 2023 Manufacturing Leadership Award Finalists
The Manufacturing Leadership Council—the NAM’s digital transformation division—has announced the finalists for the 2023 Manufacturing Leadership Awards, the industry’s premier awards program for achievements in digital manufacturing. You can read the complete list of finalists here.
The ceremony: The finalists will be honored at the Manufacturing Leadership Awards Gala in Marco Island, Florida, on June 28.
- Also announced at the gala will be winners for all project and individual categories, winners of the Manufacturing in 2030 Award, the Manufacturing Leader of the Year, the Small/Medium Enterprise Manufacturer of the Year and the Large Enterprise Manufacturer of the Year.
Rethink: Certain award winners will also present at Rethink, the industry’s leading event for exploring manufacturing’s digital era, which will also take place in Marco Island on June 26–28.
The categories: The awards are divided into nine project categories to recognize company achievements:
- Artificial Intelligence and Machine Learning
- Collaborative Ecosystems
- Digital Network Connectivity
- Digital Supply Chains
- Engineering and Production Technology
- Enterprise Technology Integration
- Operational Excellence
- Sustainability and the Circular Economy
- Transformational Business Cultures
Additionally, individual leaders are recognized in the Digital Transformation Leadership and Next-Generation Leadership categories.
The last word: “As more manufacturers extend digital’s reach onto the factory floor and throughout their operations, we are witnessing transformative performance improvements that would have been unthinkable just a few short years ago—and that are improving life for employees and customers alike,” said MLC Co-Founder, Vice President and Executive Director David R. Brousell.
AB InBev Uses Smart Manufacturing for Award-Winning Results
What does it take to be a digital transformation champion? Anheuser-Busch InBev can tell you.
The world’s largest brewer won four Manufacturing Leadership Awards in 2022, including the highly coveted Manufacturer of the Year. (The honors are given annually by the Manufacturing Leadership Council, the NAM’s digital transformation arm.) The MLC chatted with AB InBev Global Vice President Marcelo Ribeiro recently to get his insights on the processes, technologies and strategies driving the company’s success.
Business transformation drivers: “We have a dream at ABI, which is ‘to create a future with more cheers,’” said Ribeiro. “[That means] a clear strategy to lead and grow, to digitize and monetize our ecosystem and to optimize our business.” Here are a few ways AB InBev is pursuing that dream:
- Developing and delivering products that give consumers what they want, when they want it
- Making sure the supply chain can adapt quickly to consumer needs
- Increasing capacity without compromising safety, quality or sustainability
Rising to challenges: “The future is becoming less predictable,” Ribeiro said. “We need to prepare for that, so we have to build a more resilient, flexible supply chain.” Additional opportunities include:
- Moving from transactional relationships with vendors and suppliers to partnerships
- Looking beyond operations and across the entire supply chain to meet sustainability goals
- Creating a collaborative manufacturing ecosystem that fosters the sharing of ideas
Meeting the digital future: Ribeiro says that ABI’s digital strategy has three key aspects:
- Making data more accessible and available to frontline workers
- Creating a template for digital technology that can be easily tailored to the unique needs of each business
- Using advanced analytics to contextualize data and discover where it can best be applied to aid decision making
Leaders required: Ribeiro noted that leadership is essential for making this vision a reality.
- “It is critical to empower the front line,” he said. “Leaders should be focused on providing the resources to allow people to do the work and achieve excellence themselves. In the end, people are key for any business transformation.”
Find additional insights into AB InBev’s digital transformation in DIALOGUE: AB InBev’s Award-Winning Dream, or make plans to attend Rethink, where Ribeiro will present a keynote address on “Building Your Enterprise into a Digital Transformation Champion.”
E-Cycling Helps Manufacturers Generate Business Value
Electronic waste is a big problem.
In 2019, the world generated a record 53.6 million metric tons of discarded electronic and electrical devices, according to a Global E-waste Monitor report. That’s an increase of 21% in just five years. But there’s more: The figure is expected to double by 2050, hitting 120 million tons annually.
The good news is that manufacturers can be an active part of the solution. Though their bread and butter has typically been bringing new products to market, manufacturers are now also developing end-of-life processes for goods to mitigate environmental impact, according to Bright Machines Vice President of Industrial Solutions Adam Montoya, writing in the Manufacturing Leadership Council’s Manufacturing Leadership Journal. (The MLC is the digital transformation division of the NAM).
The challenge: complex components. Disassembling a product is not nearly as straightforward as assembling it, according to Montoya. Take a server, for example. A company might know what’s inside it based on its original configuration, but memory or processor upgrades could have changed over the course of its life.
- When a lot of change has taken place, the dismantling process is unique to each server, making it complex and difficult to automate.
The solution: intelligent disassembly. Improving the end-of-life process for electronics requires intelligent disassembly, a combination of smart technology and a different way of thinking, says Montoya. Here’s how it works:
- Automation technology that uses AI and advanced vision systems interprets the contents of a particular component and compares it against the original blueprint.
- Next, the system assesses the presence and location of components within the unit.
- It then sorts, separates and removes components so they can be reclaimed or recycled.
The bottom line: Manufacturers stand to realize many benefits from intelligent disassembly. Components with sensitive data can have machine-driven proof of destruction. Systems with usable parts can be repurposed rapidly.
- Ultimately, it’s an important way for manufacturers to collectively reduce carbon footprints and electronic waste while delivering business value, says Montoya.
For more on this topic, read Rethinking End-of-Life Technology Value in the Manufacturing Leadership Journal. And to learn more about how manufacturing leaders are undertaking digital transformations, join the MLC at its Rethink conference in Marco Island, Florida, on June 26–28.
The Top 8 Manufacturing Trends for 2023
The NAM recently released its Top 8 Manufacturing Trends for 2023—a guide to the opportunities ahead and the resources that the NAM can offer. Here is what to look out for this year and beyond.
Advanced and emerging technology: Manufacturers are investing in a multitude of new technologies, including artificial intelligence, virtual reality, machine learning and more. Automation and robotics are enhancing workers’ abilities but will also require many more high-skilled employees. Though the workforce shortage is a challenge, digital technologies will help manufacturers become more resilient, efficient and profitable.
- NAM resources: How do you maximize these opportunities? The NAM has resources for you, including the Manufacturing Leadership Council (the NAM’s digital transformation arm), the Innovation Research Interchange (the NAM’s innovation division) and the MLC’s Manufacturing in 2030 Project.
Supply chain resilience: As manufacturers face long lead times, increased costs and a scarcity of raw materials, they are taking steps to boost supply chain resilience through reshoring, cybersecurity, increased supplier pools and more.
- NAM resources: Manufacturers can benefit from resources like CONNEX Marketplace, which helps connect nearby manufacturers and suppliers; the NAM’s Supply Chain Hub—a continually updated collection of webinars and policy documents focusing on supply chain issues; and useful case studies highlighting best practices.
Talent disruptions and opportunities: Manufacturers are confronting a range of challenges around the workforce, including labor shortages and skills gaps, while also figuring out how to take advantage of previously untapped talent pools.
- NAM resources: If you are searching for ways to enhance your employee benefits, The NAM Manufacturers Retirement 401(k) and Savings Plan offers manufacturing employees secure benefits for the future, while Innovation Management Workshops give manufacturing leaders the skills to build innovative and creative teams. Meanwhile, the Manufacturing Institute—the 501(c)3 nonprofit workforce development and education partner of the NAM—promotes a range of events and initiatives designed to expand and diversify the manufacturing workforce as a whole.
Cybersecurity: The threat from bad actors is real, and strong cybersecurity has become critical to manufacturing operations up and down the supply chain. At the same time, manufacturers will have to be on the lookout for new cybersecurity reporting requirements.
- NAM resources: The NAM can help, with support like the NAM’s complimentary Cyber Risk Assessment. NAM Cyber Cover offers cyber insurance and risk mitigation, and you can check out these videos from manufacturing executives laying out best practices for cybersecurity defenses.
Post-pandemic growth and expansion: Long-term goals shouldn’t be downgraded, despite an uncertain economy. Manufacturers should keep pursuing technological advances, navigate government incentives and stay open to mergers, acquisitions and other investments.
- NAM resources: The NAM Incentives Locator helps manufacturers find funds and tax credits to help their business, while the MLC offers networking opportunities for manufacturing leaders.
Tough economic outlook: There’s no doubt that manufacturers face economic headwinds. That means manufacturers need to look for ways to be nimble and responsive to changing realities and able to work more efficiently than ever.
- NAM resources: Tools like NAM Shipping & Logistics give manufacturers discounts on shipping and freight, while NAM Energy offers conversations with energy advisers who can help adjust energy use strategies. IRI Coffee Houses promote virtual conversations with innovation leaders to discuss new developments and opportunities.
Sustainability: Manufacturers are committed to strengthening operations and maintaining a healthy planet at the same time. More than ever, manufacturing companies are looking for ways to reduce carbon emissions.
- NAM resources: The NAM provides resources that can help manufacturers with innovating for sustainability, as well as rethinking end-of-life technology value. Manufacturers can also learn about how digital solutions drive sustainability in manufacturing.
Looking ahead to 2030: Changes in the manufacturing industry and in the world around us—from population growth to the rise of a new middle class to increased interconnectivity—have manufacturers planning for big changes in the next decade.
- NAM resources: The IRI offers a forum for manufacturers to connect with R&D leaders, while the MLC’s Next Phase of Digital Evolution report shows how manufacturing leaders can plan their long-term futures.
Learn more: Take a look at the full guide for more details and to find out more about the NAM resources that will help manufacturers deal with these key trends.
How Will AI Impact the Manufacturing Workforce?
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.”
How Digital Manufacturing Creates Business Opportunities
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.”