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Experiencing M4.0 at The Smart Factory @ Wichita Tour

MLC members glimpse manufacturing today and tomorrow during The Smart Factory @ Wichita tour

When a factory tour begins with stops in the Today Room and Tomorrow Room, it’s clearly not a business-as-usual tour. That’s how many of the participants at the MLC’s latest factory tour started their experience when the capacity crowd visited The Smart Factory @ Wichita.

What they saw: Hosted by Deloitte and Infor, participants were shepherded through a tour of the showcase factory and visits with representatives from Amazon Web Services (AWS), Dragos, Infor, and Siemens. These sessions covered advanced manufacturing techniques, cybersecurity, cloud data analysis, Internet of Things, digital twins and more. Along the way, the tour group experienced a look at how Manufacturing 4.0 is shifting what is possible on a factory floor and in the control center.

Rendering of the Smart Factory @ Wichita production line.
Smart Factory 2.0 @ Witchita production line.

The factory tour began with a visit to the Today Room where participants heard about and saw the history of manufacturing. The tour then transitioned to the Tomorrow Room where, like something out of an amusement park, participants were invited to interact with a display table that showed advancements that are coming soon. From there, visitors moved into the heart of the tour where they saw M4.0 technology in action, and perhaps made a quick pitstop for a coffee brewed by the Smart Factory’s robotic barista.

The last stop on the tour was a visit to the control center where real-time data is synthesized and displayed related to The Smart Factory operation and Deloitte’s other immersive manufacturing experiences in Kyoto, Japan and Dusseldorf, Germany. The control center also served as an opportunity to showcase various systems within The Smart Factory’s ecosystem and how they work together.

A fully functional factory showcase: The Smart Factory @ Wichita is located on the Wichita State University Innovation Campus, and provides visitors with a completely immersive experience that brings smart manufacturing applications to life. Housed in a net-zero building, The Smart Factory is powered by a smart grid and manufactures science, technology, engineering and math (STEM) kits that are made of 100% recycled PET (RPET). The STEM kits, called Smart Rovers, are created in collaboration between Deloitte, Elenco Electronics and AWS, and will be donated to schools across the U.S. with the goal of inspiring the next generation of innovators.

M4.0 Discussion: The event concluded with a discussion featuring panelists Jason Bergstrom (Deloitte), Dave Kang (Dragos), Ken Hall (Siemens), Clint Schneider (AWS), and John Shorter (Infor). Moderated by Penelope Brown, the MLC’s senior content director, panelists discussed customer value, cutting through the noise, strategies for implementing and scaling M4.0, upgrading brownfield facilities, lights-out manufacturing, and the importance of communication, culture, data, and integration across the entire business.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

Business Operations

Ransomware Attacks Increasingly Targeting Manufacturers

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Think your business is safe from hackers? You could be wrong, according to the Manufacturing Leadership Council—the division of the NAM focused on digital transformation in manufacturing.

With the incidence of ransomware attacks against manufacturers on the rise, all businesses should be on guard against cyber extortion, advises Peter Vescuso, vice president of marketing at industrial cybersecurity provider Dragos and a member of the Manufacturing Leadership Council.

How it works: Ransomware schemes often target manufacturers by disabling their operations technology and blackmailing victims into paying to restore the functionality of their systems. Manufacturers that cannot afford to have production halted by hacks often have no choice but to pay the hackers’ ransom.

What we’re seeing: Industrial ransomware attacks increased significantly in 2021, with criminal groups specifically identifying manufacturers as vulnerable and profitable targets.

  • Last year, manufacturing accounted for 65% of industrial ransomware incidents, according to Dragos.
  • The top three manufacturing subsectors targeted by ransomware attacks were metal components (17%), automotive (8%) and plastics/technology (6%).
  • Manufacturers as a group were targeted six times as often as the second leading industrial sector, food and beverage.

Why it matters: Many manufacturers remain unprepared for ransomware attacks.

  • About 90% of manufacturers have limited visibility into their OT systems, according to Dragos.
  • 90% of manufacturers are also ill prepared with poor network perimeters, 80% have external connectivity exposure in their OT systems and 60% use shared credentials that make it easier for ransomware groups to infiltrate systems.

Who’s behind it: In 2021, ransomware groups Conti and Lockbit 2.0 caused 51% of all ransomware attacks, and 70% of their attacks targeted manufacturers.

  • These groups successfully developed malicious business models and used underground marketplaces to outsource operations to partners who then carried out the attacks.
  • Ransomware groups also fund research and development to stay ahead of the curve on security and infiltrate systems.

What’s next: “Ransomware trends are likely to continue shifting as groups reform and reprioritize and as law enforcement pursues them and takes them offline,” says Vescuso.

  • “As this evolution continues to evolve, Dragos analysts believe with a high degree of certainty that ransomware will continue to disrupt all industrial operations and OT environments through 2022, in manufacturing and beyond.”

Protect yourself: To protect against ransomware attacks, manufacturers must take the necessary steps to modernize and secure their IT and OT systems. Check out NAM Cyber Cover for information and risk management solutions.

ML Journal June 2022

POV: Digital Leadership and Workforce

Today’s manufacturing leadership teams must make bold decisions to realize the full potential of Manufacturing 4.0.   

Dr. Martin Luther King Jr. said that “Faith is taking the first step even when you don’t see the whole staircase.” While Dr. King’s statement was made regarding spiritual aspirations, the sentiment could also apply to leadership in manufacturing’s digital era.

Today’s manufacturing leaders aren’t flying blind, but they are certainly navigating some foggy conditions. There is the need to determine which digital technologies will produce the most operational impact. With all the data collection enabled by that technology, there is the question of which data are the most useful and relevant. And of course, there are the questions of how the organization should be structured, and what new digital roles should be added to the workforce.

Moreso than other recent generations, these leaders are being asked to find answers for questions that have never been asked before. And they are doing all of that in a time of supply shortfalls, transport disruptions, geopolitical upheaval, fast-changing regulatory requirements, and the ever-present labor shortage that has plagued manufacturing for years.

But as these leaders learn, they are slowly but surely ascending that uneven and sometimes steep staircase toward Manufacturing 4.0. They are seeing that while they may not have all of the answers today, the right information is coming.

It is a matter of faith to bravely step into new ways of doing things. If they are to avoid threats to competitiveness, and perhaps even survival, manufacturing leaders must challenge themselves to move ahead even if they can’t see all that may be in front of them.  N

Penelope Brown

About the author:
Penelope Brown is the Content Director for the Manufacturing Leadership Council.

ML Journal June 2022

Digital Transformations: Scale or Fail

To escape pilot purgatory and achieve value at scale, manufacturers must adopt a value-centric problem-solving approach.    

Digital transformation and Industry 4.0 programs are on most CxOs’ top strategic planning lists. The reason why is that the value of these programs is undeniable. In fact, 90% of industrial companies are investing in digital factories and over 70% consider digital manufacturing at the top of their operations strategy agenda.

However, many manufacturers are still in scale purgatory; they are unable to rapidly capitalize on pilots that could deliver transformational outcomes if they were scaled across the production network in a timely manner. According to McKinsey, companies run on average eight digital transformation-related projects, but less than a third are implemented at scale1. Research from Gartner, LNS, and recent status reports by PTC show that only about 25% of manufacturers are expected to be in the scale stage of digital initiatives2.

The Economy of Speed and Scale

  • A manufacturer with $1 billion in impactable operating costs across 30 factories facing pilot purgatory recognizes a less than 5% cost reduction in one or two factories, saving less than $3 million in three years.
  • A similar manufacturer succumbed to scale purgatory generates a 10% cost reduction in three to five factories saving no more than $10-20 million in five years.
  • Another similar manufacturer realized a doble-digit cost reduction impact in all 30 of its factories and saved $200 million in only three years.

As a result of scale purgatory, companies fail to achieve the necessary impact, speed, and scale that delivers double-digit business value. As seen in a previous Journal article, “Finally, Double-digit I4.0 Impact at Scale”, the companies that unlock transformational value with speed and scale can potentially realize 10 to 100 times more financial impact than those that are stuck in pilot or scale purgatory.

PTC and Microsoft have had the benefit of working with thousands of clients and what we’ve learned from them is that the majority of stalled initiatives share common themes at the convergence of operational excellence and digital technology. Among these themes are:

  1. Very few companies can convert their data into insights required to identify, prioritize, and focus resources on the most critical production constraints.
  2. Only a few manufacturers have confidence in identifying the most financially impactful corrective actions to remediate issues.
  3. It is difficult to measure the financial impact of corrective actions. Therefore, technology, rather than financial impact, is mistakenly the focus of the transformation program.
  4. Companies rely on fragmented systems with point functionality to solve a single issue in a single place; therefore, they lack a scalable architecture.

To bypass scale purgatory and achieve double-digit value with speed, manufacturers must form their I4.0 programs around the four core elements of successful transformation:

Key Transformational Elements

These four elements are part of a concept we are pioneering called Digital Performance Management, a unique systematic closed-loop performance management approach that can help manufacturers identify, prioritize, analyze, and validate the top opportunities for financial improvement. This best-practice approach empowered by scalable technologies ensures standardized problem-solving and resolution across the enterprise. This article will highlight how a standardized performance management approach on top of a scalable technology platform can make way for actionable investments that improve production efficiency by at least five-20%, or four-16 hours in an 80-hour week.

The Value Pyramid: Leveraging Data for Action

1.   Identify the Greatest Opportunities

A)    Determine Biggest Constraints

Many manufacturers are adopting digital technologies to improve their operations, yet most fail to determine WHERE to best focus and prioritize their transformation efforts. The common pitfall is to implement use cases on all lines and/or all machines in a factory without pausing to prioritize the bottleneck processes that reduce the capacity of the entire value chain.

Fictional Case: Process “C” is the Bottleneck


It is only when resources resolve true bottlenecks that production efficiency can be improved. Consider a fictional company, ACME, with the following operations where process C is the bottleneck.

  • If ACME dedicates resources to improve process A, throughput will increase. This might seem like a success, but inventory will accumulate when parts arrive at process C. This equates to a waste of company resources and limited value.
  • If ACME dedicates resources to improve process D, this would be inconsequential since this process is already below takt time, running at a speed that already matches customer demand. This too would equate to a waste of company resources and limited value.
  • Only when ACME dedicates resources to improve the bottleneck process C can ACME improve the efficiency of the entire end-to-end process and ensure that value is achieved and that valuable company resources are used optimally.

The manual nature of identifying bottlenecks and their relative priority to one another makes it very challenging to identify opportunities. Experienced manufactures might know their first bottleneck but usually have very limited knowledge of the second and the third and their impact on operations.

With a standardized performance management approach leveraging the Industrial Internet of Things (IIoT), manufacturers can automatically collect and analyze the takt time and cycle time, dynamically identifying priority bottlenecks across their work centers, lines, and factories even as bottlenecks evolve. This helps manufacturers always know where the biggest problems are, ensuring they are continuously solving the right problems at the right place and right time.

B)    Determine Biggest Production Losses

The next hurdle is identifying, analyzing, and prioritizing top opportunities for eliminating production losses. While many manufactures turn to traditional tools like OEE reporting for some of this analysis, few have been able to confirm their desired throughput improvements.

As a result, front-line operators and managers are unable to clearly understand the magnitude of production losses throughout their processes. On top of this, valuable resources end up pursuing improvements on non-impactful processes. This equates to minimal impact and increased risk through lack of prioritization on true production constraints.

Using Time to Identify Opportunities


Gaining a full picture of both machine efficiency and labor productivity in real-time and over a period of time is now possible. This complete picture enables manufactures to identify the most impactful opportunities by moving away from percentage-based measurement to a well-known unit of measure – the common hour.

Standardizing all performance losses to time—as opposed to ratios of availability, performance, and quality—spotlights the relative importance of different production losses. This approach helps teams conduct a granular and consistent analysis that can be directly converted to financial impact since operations leaders can instantly recognize the value of an hour, whether by increased revenue, reduced operating costs, or both.

Consider the same company ACME with the follow operations in Figure 5. In this scenario, we can see that the top 3 production losses for ACME are unplanned downtime, changeover time, and speed losses.

Focusing efforts on other production losses like minor stops and scrap can have value, but it would be very limited. Only by focusing on the top production losses can ACME achieve transformational value.

2.   Implement the Most Valuable Use Cases

Once top priorities are identified, another common obstacle is determining the most valuable digital use cases to implement to improve efficiency. The first challenge is the abundance of options, which makes identifying use cases like finding a needle in a haystack. Impactful use cases include but are not limited to asset monitoring, condition-based maintenance, predictive quality, and augmented work instructions. Any of these can be impactful, but how can one company focus on the best one?

Sometimes, companies are successful at deploying Use Case A across Site A. In order to scale, their reasoning is to implement the same use case A across the rest of their sites. This approach would be successful if all the sites in a production network were identical. In reality, each facility is different, has different bottlenecks, production losses and talent—even when the manufacturing processes are similar. Applying a consistent use case across different facilities is a great way to leave value on the table. How can a company implement the most impactful use case that best fits each unique environment?

Using Production Losses as a Guide

As show in Figure 6, an enterprise performance management approach solves these problems by serving as a guide to digital use cases. This provides recommendations on the most likely opportunities to regain lost production hours by mapping each production loss to a set of viable use cases. Therefore, transformation is guaranteed to be value-centered rather than technology-centered, deflecting one of the key traps to scale purgatory. Finally, this approach encourages tailoring of use cases to specific sites with heterogeneous problems and heterogeneous use cases. Indeed, once an enterprise problem-solving layer is in place, local problems require local use cases.

3.   Measure the Value of Investments

Once use cases are deployed and corrective actions are taken, manufacturers struggle to track their status and measure their corresponding operational and financial impact. While current approaches like OEE can indicate performance trends, these conventional approaches fail to quantify how much a specific corrective action improved overall performance. As a result, operators, improvement engineers, and plant managers have limited visibility in evaluating the success of their improvements.

Time Loss Trend Tracks Impact of Improvement Initiatives

By leveraging a standardized digital performance management approach, manufacturers can gain closed-loop traceability of corrective actions and the corresponding business impact. With this universal digital approach, management can set a financial target on hours rather than percentages and know precisely where they are in achieving that outcome.

Measuring the value of implemented use cases with time saved as a unit is finally possible. This tracking allows management to monetize this saved time in different ways- It would enable an operations executive to say: “I will reduce unplanned downtime 10 hours and those new hours will be converted to additional volume, resulting in $X additional revenue and margin or perhaps $Y in overtime cost reduction”.

4.   Build a Scalable Technology Foundation

The traditional industrial software stack consists of fragmented systems with point functionality solving a single issue in a single place. Implementing one-off integrations strains resources and limits the ability to source relevant data. These systems are not adjustable or responsive for tomorrow’s customer demands or next month’s materials shortage, among other countless unforeseen events. Manufacturers using this approach will never achieve flexibility and agility at scale.

With value planned and proven, manufacturers will want to quickly roll out multiple digital use cases to subsequent sites. The answer is a combination of standard best-practice process in a SaaS solution and a flexible and secure technology platform, which together can unlock efficiency improvements across a global production network. Indeed, technology platforms that leverage the cloud are more accustomed to handling a sophisticated workload across sites, users, and use cases. The cloud’s scalable infrastructure increasingly places it on the roadmap for I4.0 projects, an approach that 58% of industrial companies agree with3. The flexibility of the technology platform is integral to scaling solutions and use cases that scale across multiple sites.

While the fourth industrial revolution presents immense potential for business value across the enterprise, a majority of manufacturers brave enough seize the opportunity have succumbed to scale purgatory. Establishing the four core elements of successful transformation enables manufacturers to break free of scale purgatory and deliver against business goals to reduce operational costs, support revenue growth, and increase asset efficiency.

Manufacturers who take a financial-impact-first perspective, prioritize use cases based on the biggest constraints, link production losses to corresponding use cases, measure the value of their interventions while building a strong technological foundation inclusive of cloud capabilities and a scalable architecture will achieve double-digit impact at scale. These are the companies who will outpace their competitors and realize the potential of I4.0.  M


1‘Digital Manufacturing – escaping pilot purgatory’ https://www. digital%20manufacturing%20 can%20escape%20pilot%20purgatory/digital-manufacturingescaping-pilot-purgatory.pdf

2 Gartner. Predicts 2019: Industrie 4.0 in Advanced Manufacturing Is Driving Digital Differentiation Through Data Innovation. March 2019. https://www. predicts2019-industrie4-0-in-advancedmanufacturing-is; LNS Research. Understanding Industrial Transformation Today: Digital Readiness is the Foundation for Success. December 2018. https://www. research-library/ research-articles/ IX-digital-readiness

3‘The State of Digital Transformation’ resources/iiot/white-paper/ state-of-industrial-digital-transformation

About the authors:

 Amol Adgaonkar is a Director of Business Strategy within the Manufacturing Industry team at Microsoft Corporation.


Craig Melrose is the Executive Vice President of Digital Transformation Solutions at PTC.


Howard Heppelmann is Divisional Vice President and General Manager of PTC’s IoT Solutions.


Reda Thaifa is a Senior Analyst in Market Development, Connected Operations Solutions at PTC. .

ML Journal June 2022

SURVEY: Digital Leadership Playbook Still Work in Progress

In manufacturing’s new digital era, the requirements for leadership are evolving just as rapidly as the technology that is underpinning the change.


Ask any manufacturing professional with a few years (or maybe a few decades) under their career belt: “When you think of the best boss you ever had, what made them great?”

Chances are those answers will be timeless and still consistent with what would make a great boss now: “They treated everyone fairly.” “They helped me understand how to do my job better.” “They were honest and had integrity.” “They were able to bring out the best in everyone.”

While those soft skills are enduring, the requirements of digital manufacturing have added many layers to what’s necessary for good leadership, as many respondents said in the Manufacturing Leadership Council’s new survey on Digital Leadership and Workforce. Understanding the business and its markets are still a must, but now it’s necessary to understand how technology can elevate performance. Strategic thinking is still essential, but that strategy often hinges on a digital transformation roadmap.

On top of it all, there isn’t much precedent – today’s leaders are often writing the playbook as they go. The disruptions of the past several years have also put those leadership skills to the test, as leaders are more likely tasked with managing teams across multiple locations, now including virtual ones. Organizations are shifting and remaking themselves with different structures and fewer siloes. The bottom line: resorting to the way things have always been done is something that just will not do.

What Does Leadership Mean Today?

Most respondents said that digital leadership comes down to three things: promoting and nurturing manufacturing’s innovation and adaptability in strategies and processes (47%); understanding what it means to integrate operational digital technology (55%); and, most importantly, establishing a fact-based, information-driven culture for making decisions (59%) (Chart 1). Boiled down to its basic essence, the vast majority of respondents (87%) agree that digital operations and business models require a different approach and set of skills among leadership (Chart 3).

Leaders might find themselves haggling over the right technologies to deploy and scale across the organization, possibly leading to unconnected systems.


Beyond how leadership is defined, survey respondents noted that there is also a list of new skills that leaders must acquire. At the top of the list is an understanding of the potential of new technologies and the knowledge of how to apply them (56%). But almost nearly as important is being able to act as a technology evangelist for the rest of the organization to guide actions and attitudes – making a digital/data-driven approach engrained within company culture (54%), while also promoting company structures that are more collaborative and less hierarchical (47%) (Chart 2).

The pandemic, supply chain disruptions, and other sources of business upheaval are also creating a lasting impact for leadership, the most significant being adoption of new procedures for remote and virtual work (73%). Somewhat less impactful but still noteworthy is establishing relationships with new partners and suppliers (59%) and creating channels for more regular top-down communication with employees (53%) (Chart 4).

Leadership Preparation and Planning

Many manufacturers find themselves with limited guidance for digital transformation: Which technologies are worth the investment? How is it possible to keep up with the blistering pace of change? Which data sets are most important to collect, and which ones are most relevant for making decisions? It’s no wonder that manufacturers feel a sense of anxiety about the technology and data-driven future of their businesses.

The survey findings show that most feel their leadership team is only somewhat prepared for managing digital transformation (65%), with less than a quarter of respondents saying their executive leadership is very prepared (23%) (Chart 6). The vast majority – nearly 80% – say that this middling level of digital preparedness leaves their company’s future success in a vulnerable position (Chart 7).

For most organizations, digital transformation is a team sport – 38% say that those efforts are a collaborative effort among multiple executives, with far fewer saying it’s the responsibility of a Chief Information Officer (16%), VP/Head of Digital Transformation (13%), or Chief Executive Officer (11%).

While this collaborative approach is understandable because different executives are responsible for different areas of the business and its resulting digital interests, a potential pitfall is that it could also lead to slower response and deployment. Leaders might find themselves haggling over the right technologies to deploy and scale across the organization, possibly leading to unconnected and siloed systems that do not speak to one another, an outcome that manufacturing leaders must avoid if the goal of a digitally connected enterprise is to be realized.

Where Do We Go Now?

Manufacturing leaders have a lot to consider when it comes to making digital investments and getting that ever-important ROI. The top three challenges that respondents said leadership must consider in a digital transformation are  developing a digital roadmap (43%); understanding the benefits and risks of allocating resources to digital assets (36%), and a tie between understanding the business case/return on investment and improving value to the customer (32% each) (Chart 10).

When it comes to what are the most important areas of technology for a manufacturing leader to know, survey respondents say it’s understanding the data, and, even more importantly, keeping it secure. Advanced data analytics ranked high on the areas where knowledge and expertise should be emphasized (79%), with cybersecurity ranked slightly higher (82%) (Chart 9). Digital threads and AI were ranked as areas where leaders should place a moderate level of emphasis, at 61% and 57%, respectively. Social media and new Metaverse technologies placed on the lowest end of the technology importance scale.

The most important areas of technology for leaders to know are understanding the data, and even more importantly, keeping it secure.


But just as important or perhaps even more so will be developing future digital leaders and bringing on the right transformational workforce. Most survey respondents believe that their next generation of leaders will be internally developed (51%) (Chart 12). At the same time, 64% of respondents said that their company has no formal training plan to educate workers and leadership on digital transformation (Chart 14). Realizing the goal of developing next generation leaders internally will obviously require closing the training gap.

The Future View

The skills and requirements for manufacturing leadership are evolving almost as rapidly as the technologies that are emerging on the factory floor. As multifront disruptions, changing customer requirements, and ever-changing products and markets require manufacturers to respond with agility, those efforts must be led by those who are ready and willing to take on the task.

Technology is bringing to reality possibilities that were once the fancy of imagination, and ideas that were once insurmountable are now coming to life. It is an exciting time, indeed, but choices can become more complicated when there are so many of them to make. Possibilities may be expanding more than ever before, but to meet its full potential, leadership in this new world will need to be as transformative as the technology underpinning the digital era.   M


1. Understanding Technology, Innovation, Digital Ecosystem are Key

Q: Which statements best describe what leadership means in the digital transformation era? (Rank top 3)

Building Digital Acumen, Cultures is Necessary

  Q: Which new leadership approaches and skills do you feel will be most important for the digital transformation era? (Rank top 3)


3 Skills Requirements Are Substantially Different

  Q: Do you agree or disagree with this statement: “The emergence of digitally driven operations and business models will require a substantially different approach and set of skills on the part of manufacturing company leadership.” (Select one)

Remote Work, Cybersecurity Influence Leadership Approach

  Q: What impact has the pandemic and other recent business disruptions had on your leadership approaches to managing your manufacturing enterprise? (Rank by degree of impact)


5 The Biggest Question: What Has the Most Value?

Q: What’s the most important thing your company’s executive management team wants to know about digital transformation? (Select one)

6 Most Leadership Teams Only Somewhat Prepared for Change

Q: How prepared do you think your company’s executive management team is to lead and manage digital transformation? (Select one

Lack of Preparedness Means a Vulnerable Future

Q: How vulnerable will your company’s future success be as a direct result of your company’s current level of preparedness for digital transformation? (Select one)

Team Approach to Leading Digital Transformation

Q: Who is leading the charge around your digital transformation efforts in your organization? (Select one)


9 Highest Emphasis on Data Analytics, Machine Learning

Q: Looking ahead, what degree of emphasis would you place on the following digital technology areas in terms of developing knowledge and expertise? (Rate each on scale of Low/Medium/High)

Leaders Must Understand Benefits, Risks for Resources

Q: In thinking about the requirements and implications of digital transformation, what do you think are the most important challenges for leadership? (Rank top 3)

Digital Technology Important to Boosting Efficiencies

Q: Looking ahead, what degree of importance would you assign to the following digital leadership skills and abilities? (Rate each on scale of Low/Medium/High)


Most Future Leaders Will Be Homegrown

  Q: Where do you see the next generation of leaders coming from for your company? (Select one)

Future Digital Roles Are Only Somewhat Understood

Q: How well prepared do you think your company is in understanding the new digital roles and skills that you will need in the next few years? (Select one)

14 Only a Third Have Formal Digital Training Plan

Q: Does your company have a formal training plan to educate workers and leadership around the requirements of digital transformation?

15 Automation Will Have Moderate to Significant Impact

Q: What impact do you think the increasing adoption of automation and advanced digital technologies will have on reducing unfilled job openings in your company in the future? (Select one)


Penelope Brown

About the author:
Penelope Brown is the Content Director for the Manufacturing Leadership Council.

Survey development
was led by Paul Tate, with input from the MLC editorial team and the MLC’s Board of Governors.


ML Journal June 2022

DIALOGUE: Camozzi’s Autonomous Vision

Successful autonomous manufacturing will depend on a fundamental relationship between humans and machines, believes Lodovico Camozzi, CEO of Italian innovators, The Camozzi Group.     

“As we imagine future autonomous enterprises and smart factories, we have to keep in mind that innovation always springs from human ideas, creativity, and talent.”

Lodovico Camozzi, President and CEO, Camozzi Group S.p.A.

When the global Formula One Grand Prix motor racing series descended on Miami, Florida, for the first time in April this year, Italian industrial innovation company Camozzi was among the many high-tech developers with their advanced 3D printed components lined up on the starting grid.

Founded in 1964 in Lombardy, Italy, as a local pneumatic components company, the Camozzi Group is now a $490 million global enterprise operating in 78 countries, with 25 production plants, and over 2,900 employees. Much of that growth has been driven by a series of diversified acquisitions, including Campress for brass moldings, machine tools maker Innse-Berardi, PlastiBenaco (now Technopolymers) for plastic components, metal processing company Newton Officine Meccaniche, advanced machine tools maker Ingersoll Machine Tools Inc. in Illinois, textile machinery maker Marzoli, gearing machinery company Innse Milano (now Camozzi Advanced Manufacturing), and iron and aluminum foundry Fonderie Mora Gavardo.

With a passion for innovation, the company opened its own Camozzi Research Center in Milan in 2021, dedicated to R&D in additive manufacturing, advanced materials, industrial automation, robotics, predictive maintenance, and intelligent process control. Among its onsite capabilities is the company’s Masterprint additive manufacturing system, one of the world’s largest 3D printers. The Center also acts as a collaborative hub for Camozzi’s growing global research network, which includes Oak Ridge National Laboratories and other U.S. universities, and which is focused on developing and exchanging the scientific and technological knowledge necessary to shape future industrial processes.

Camozzi’s latest research and development collaboration is with Swiss-based Sauber Motorsport and the Alfa Romeo F1 ORLEN racing team, announced in March this year. The partnership covers new materials, additive manufacturing, mechatronics, and process modelling to help accelerate Alfa Romeo’s racing car performance within the strict F1 guidelines.

“The evolution of the industrial world towards the concept of an “autonomous enterprise” is leading to more and more interactions between very different devices and technologies.”

In our latest Dialogue with a manufacturing industry thought leader, Lodovico Camozzi, who took the helm of the family business as Group President and CEO in 2015, talks to Manufacturing Leadership Council Executive Editor Paul Tate about his view of manufacturing’s autonomous future, how advanced additive manufacturing approaches promise new production paradigms, the importance of collaboration in driving innovation and excellence, and why the industry must maintain a human focus in an increasingly digital world.

Q:  How do you see the future of manufacturing as the industry moves inexorably towards more digital models of production and operations?

A: I see the future of manufacturing, or the factory of the future, as an “autonomous enterprise” in which the relationship between people and machines plays a fundamental role. Automated robotic systems with advanced features, total interconnectivity, and integration with the Metaverse, which will incorporate virtual reality that simulates the entire factory, will make all kinds of new experiences, interactions, and training possible, even remotely.

Robots will be able to perceive spaces, analyze environments in 3D, avoid obstacles, and move objects with advanced gripping skills and screen images. They will be able to interconnect with enterprise  management systems, digital monitoring systems, sensors located across facilities, and with corporate audio and video systems.

I can also imagine robots that will be able to control other robots, program production lines, manage maintenance operations, and even teach other robots. Furthermore, I see a very close collaboration between robots and humans: not just as assistants, but also in other functions, like controllers, security, and environmental attendants. Finally, machines will have the ability to recognize staff faces and voices, and to act as a repository of the company’s know-how, experiences, market information, and historical information, all accessible at any time from any part of the world.

I see that future factory, and the enterprise itself, as an increasingly integrated environment, exchanging information, knowledge, and skills both internally and with other external environments at a very high speed, thanks to quantum computing, so it will be able to automatically adopt, adapt, and modify products and technologies in real time. Simulations of all the quantities, of all the measurements, of all the tests, of all the processes will be so quick and accurate that new products will be released onto the market almost immediately.

Q: How does the recent Formula 1 racing partnership with Sauber and Alfa Romeo fit into Camozzi’s strategy and future vision?

A: There are two reasons. On one hand, The Camozzi Group loves rising to technological challenges and achieving excellence. On the other, Formula 1 is the ideal place for us to showcase some of the most technically advanced products to the world.

We specialize in the production of components and systems for high tech automation across a variety of sectors: machine tools, textiles machinery, raw materials processing, including additive manufacturing and systems for Industrial Internet of Things (IIoT). But the unifying factor is always innovation, and innovation that is based on hard work, reliability, and qualified partnerships.

“Machines will have the ability to recognize staff faces and voices, and to act as a repository of the company’s know-how, experiences, market information, and historical information, all accessible at any time from any part of the world.”

Formula 1 is the place where innovations converge and can be showcased. That’s why we entered Formula 1 racing in the 80s with the Arrows and McLaren teams, and that’s why we are back today, with Valtteri Bottas, Zhou Guanyu, and Alfa Romeo.

The Alfa Romeo / Sauber partnership is particularly interesting because of our technological affinity and compatibility. The sporting aspects are very stimulating, but with Sauber there is also a common vocation between us in the development of new materials, mechatronic systems, process modeling, and 3D printing. Sauber Technologies, for example, has established one of the world’s largest and most modern additive manufacturing facilities in Switzerland, while The Camozzi Group has created the largest 3D printer in the world for carbon fiber and composites, called MasterPrint.

But that’s just the start. The partnership agreement also includes a new talent and knowledge exchange program, through the creation of a Joint Development Lab involving the Camozzi Research Center (CRC) in Milan, Italy, and the Sauber Technologies headquarters in Hinwil, Switzerland. Internships are planned for technicians, engineers, and researchers from both companies to allow the cross-pollination of ideas and dialogues in key areas of collaboration.

So, it’s a dual partnership, both technological and sporting, and based on a mutual commitment to create synergies between technologies, experiences, and people, all united in excellence.

Q: You highlighted the use of additive manufacturing in the partnership. How important do you think this technology will become for the future of manufacturing?

A: I believe additive manufacturing processes are capable of revolutionizing traditional production paradigms.

We became involved with 3D printing after the acquisition of Ingersoll Machine Tools in 2003. During the 1990s Ingersoll had pioneered automatic fiber placement and automatic tape laying technologies for composite manufacturing. The expertise, methodologies, and techniques Ingersoll had acquired in developing composite manufacturing served as an extraordinary technological springboard that allowed them to enter the additive manufacturing sector and differentiate themselves from the competition with wide-and-high 3D printers.

Since then, we have created multiple components by printing them layer by layer, following virtual 3D models. Not only that, the MasterPrint system allows us to additively produce parts of an extremely significant size (up to 12m x 4.6m x 2m), as in the case of the robots we created for the new San Giorgio Bridge in Genoa. This bridge, opened in 2020, was built in just two years after the collapse of the previous Morandi Bridge. Our group, in collaboration with the Italian Institute of Technology (IIT) have been able to create a robotic system, unique in the world, for the continuous monitoring and prevention of infrastructural risk.

There are several advantages to additive manufacturing – production flexibility, product customization, speed of creation – all the elements that make it possible to reduce costs and waste, allowing companies to manufacture products on demand and without the need for a minimum order.

These advantages are multiplied if combined with design systems that uses digital twin models that make it possible to virtually test a product in advance. So, we can eliminate the trial-and-error phases that characterize traditional production, where several prototypes need to be created before reaching the final result.

“The challenges and opportunities ahead for the manufacturing industry will be guided by two primary drivers: digitization and sustainability.”


Another key feature of additive manufacturing is the optimization of materials and the resulting waste reduction. Since it is not necessary to print any excess, nor to cut out large quantities of unnecessary materials, a greater efficiency in the production processes is obtained, saving time, energy consumption, resources, and emissions. Masterprint can also use materials originating from recycling processes and materials with low environmental impact.

Today, we mostly print in carbon fiber and composites, and this allows us to produce lightweight and cheaper components. But our frontier is metal 3D printing, even for large components. We are working on that now.

However, additive manufacturing is only one of the technologies that are revolutionizing the production system. The evolution of the industrial world towards the concept of an “autonomous enterprise” is leading to more and more interactions between very different devices and technologies. Thanks to the cloud, machinery, plants and buildings, HMI, warehousing, and logistics systems can all now exchange information with each other, and perform actions independently and automatically, helping to improve performance and the use of resources.

Ultimately, our mission is to create a digital factory where everything contributes to value creation. We aim to drive innovation by uniting our knowledge of real-world industrial applications and the digital landscape of production processes, and to interconnect people and assets in those smart factories, where robots work in close harmony with operatives and where machines are able to adaptively control themselves in the event of malfunctions.

Q: What would you highlight as the greatest business challenges and opportunities for manufacturing over the next 5 years?

A: The challenges and opportunities ahead for the manufacturing industry will be guided by two primary drivers: digitization and sustainability.

In digitization, I believe the manufacturing industry today is still experiencing the development phase of the fourth industrial revolution, in which digital technologies are added to traditional production methods blurring the boundaries between the real world and the virtual world. Sensors and control devices already make it possible to connect machines to robots, networks, and people. Machines and plants will thus become increasingly intelligent systems capable of exchanging information and tracing all the production domains of interest, enabling the vertical and horizontal integration of production in order to guarantee flexibility, efficiency, and transparency.

The drive towards a more sustainable world is the second key driver for the future. Institutions, companies, and consumers are increasingly united in promoting and requesting products and activities that have a lower environmental and social impact. The current evolution affects not only the corporate world, but also institutions and governments, with reform plans aimed at decarbonizing the economy. Among these, the European Green Deal represents a new growth strategy which aims to make the European economy modern and competitive, but also respectful of the health of citizens, resources, and natural capital.

I am convinced that the key to addressing these two challenges is interaction with universities and research centers. This is a theme that is stronger in the U.S. than in Italy right now, but much effort is now being made here to close that gap, learning from U.S. practices.

Q: How is the Camozzi Group responding to that research challenge?

A: We have established many long-term partnerships with companies, authorities, and institutions involved in research and innovation over the years. That network currently includes 11 university Institutes, six technological partners, and four research centers. In the USA, for example, the University of Maine, the University of South Carolina, and Oak Ridge National Laboratory are part of the network. Our recent partnerships with Sauber Technologies and Seco are also focused on accelerating innovation for the future.

“My watchword for the future would be “technological humanism” ­– ensuring human individuals remain the focal point in a world where machines, data, and algorithms are becoming more and more important.”


In Milan, in a historic industrial area of the city, we have also recently set up the Camozzi Research Center. It’s one of its kind in Europe in terms of technology applications for large-scale manufacturing and cyber physical systems for automated production lines. The CRC combines research, contract manufacturing, advanced manufacturing, and 3D printing processes in a hybrid technology structure where new production models and new approaches to scientific and technological training are being developed to help meet the future digital and human challenges facing manufacturing.

Q: What kinds of skills will the next generation of manufacturing leaders need in that new era?

A: The true wealth of a company is in its employees. As we imagine future autonomous companies and smart factories, we have to keep in mind that innovation always springs from human ideas, creativity, and talent. I often quote a phrase which impressed me: “The majority of today’s students will do a job that does not exist yet.” So, they should be willing to face ever new problems because they are the generation that will have to find new solutions and imagine new scenarios. So, when we speak about skills, attributes, and roles, I believe that more attention should be paid to so-called character skills, or soft skills, or non-cognitive skills. Technical and scientific knowledge is essential, of course. But these are not enough. To guide, lead, manage, and exploit the global industrial transition towards more digital and sustainable operations, we need skills like flexibility, consciousness, perseverance, teamwork, altruism, cooperation, curiosity, and empathy. These are fundamental for defining and evaluating human capital. The mere reference to qualifications and knowledge is not enough. Some of these skills are innate, but most can be developed. There is space here for targeted training, for inbound orientation, and lifelong learning. This is what we are focusing on with our new corporate training academy program.

Q: Finally, if you had to focus on one thing as a watchword or catchphrase for the future of manufacturing, what would that be?

A: It would be “technological humanism” – ensuring human individuals remain the focal point in a world where machines, data, and algorithms are becoming more and more important. Ultimately, industry is for the benefit of people. Technology is for the benefit of people. But the place where people really grow is not in a technological system, but as part of a community. Across both society and industrial world, we need to combine the human factor with the new digital era. That is the key to our future.  M

FACT FILE: Camozzi Group S.p.A.
 MIlan, Italy
Industry Sector: Industrial Automation
Revenues: $490 million (€455 million – 2021)
Net Profits: $25.8 million (€24 million – 2021)
Employees: 2,900 Employees
Presence: 78 Countries
Production Sites: 25 Manufacturing Plants

President and Chief Executive Officer, Camozzi Group S.p.A..
Nationality: Italian
Education: Accounting Diploma, Brescia
Languages: Italian, English
Additional Roles Include:
President and Chief Executive Officer:
– Camozzi Automation S.p.A. – Brescia
– Campress S.r.l. – Paderno Franciacorta – Brescia
– Camozzi Technopolymers S.r.l. – Castrezzone di Muscoline – Brescia
– Camozzi Advanced Manufacturing S.p.A. – Milan
– Innse Berardi S.p.A. – Brescia
– Marzoli Machines Textile S.p.A. – Palazzolo sull’Oglio – Brescia
– Camozzi Research Center S.r.l. – Milan
– Camozzi Digital S.r.l. – Brescia
Managing Director: Fonderie Mora Gavardo S.p.A. – Gavardo, Brescia
Member of the Board of Directors: Ingersoll Machine Tools Inc. (USA)

Other Board Memberships
– Member of the Advisory Board and Senior Advisor, Industry 4.0 Fund, Quadrivio Group
– Member of the Board of San Benedetto Foundation in Brescia
– Member of the Board of Governors of the Lumezzane Football Club.
– Member of the President’s Board and General Board of the Brescia Industrial Association (2017-2020)
– Chairman of the Board of Governors of the Diocesan Museum in Brescia (from 2011-2015).
– Member of the Board of Governors of the Mille Miglia Museum (2018-2021).
– Member of the Local Consultation Committee of BPM Credito Bergamasco Div. (2014-2019)
– Member of the Board of Governors of the Credito Bergamasco Foundation (2018-2020).

Awards & Honors
– Certificate of Merit from the City of Palazzolo sull’Oglio, 2019
– Oscar dei Bilanci for his commitment to the reconstruction of the Morandi Bridge in Genoa, Brescia, 2019
– Sport Team Award for supporting sports activities for the disabled, Brescia, 2018



About the author:
Paul Tate is Co-founding Executive Editor and Senior Content Director of the NAM’s. Manufacturing Leadership Council.



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How is digitization changing manufacturing? What can manufacturers do to stay competitive in a fast-shifting world? What does the future look like—and how can leaders prepare for success?

Those are the kinds of questions being asked and answered by the NAM’s Manufacturing Leadership Council—a member-driven global business leadership network focused on the intersection of manufacturing and technology. We spoke with David R. Brousell, MLC co-founder, vice president and executive director, who gave us more insight into what the MLC is, how it works and why it matters today more than ever.

An early start: The idea for the MLC was born nearly two decades ago, when manufacturers began turning to consumer technologies to strengthen their businesses.

  • The convergence of these technologies with traditional operational technologies on factory floors sparked an idea. Brousell, who was running a publication called “Managing Automation,” recognized the trend—which he called “Progressive Manufacturing”—and founded an annual conference for manufacturers to discuss new approaches and best practices for the future.
  • By 2008, that conference had given rise to a council designed to offer useful programming for manufacturers on the future of digitization. Ten years later, the council became a part of the NAM.
  • “We realized that digitization was not a tactical or small change—it was a fundamental change in the industry,” said Brousell. “It was clear that manufacturers needed an informational resource or organization to bring them together to deal with what we now call Manufacturing 4.0 in a systematic way.”

A systematic approach: Today, the MLC represents what Brousell calls “the digital transformation arm of the NAM,” helping manufacturers meet future needs and address ongoing trends—through changes in technology, organization and leadership.

  • “The transition to the digital model of manufacturing is only one part technical,” said Brousell. “The harder part is changing the organizational structure to be more collaborative and decentralized and making the leadership approach digital-first. We’re probably the only organization that has looked at it this way, in a systematic way, beyond technology alone.”

A critical focus: Every year, the MLC lays out a member-approved set of critical issues involved in the transition to Manufacturing 4.0 and offers resources and programming from thought leadership to plant tours to the Rethink Summit.

  • This year’s critical issues include topics like factories of the future; transformative technologies, including AI and machine learning; augmented reality and virtual reality; Manufacturing 4.0 cultures; and cybersecurity.

A broad view: Digitization isn’t just an issue for individual manufacturers. Because manufacturing is so vital to economic and societal growth, it’s also important to the future of the United States and the world.

  • “Manufacturing is one of the fundamental drivers of social and economic prosperity,” said Brousell. “Its growth will lead to a better life for people. No other industry can say that. And I believe that the countries whose companies are most successful in making the transition to the digital model are going to be the powers of this century. There’s a lot riding on this.”

Sign up: Come learn from leading manufacturers at the Rethink Summit, June 27–29, in Marco Island, Florida. It’s the premier event for senior operational executives and their teams as they continue to navigate disruption.

ML Journal June 2022

The Rise of Digital Manufacturing Ecosystems

The formation of value-added digital networks in manufacturing is underway, leading to new ecosystem partnerships that will reshape the industry in the years ahead.   

As digitization becomes ubiquitous in the manufacturing ecosystem, the biggest opportunities and most powerful transformation drivers may well emerge from outside the walls of the enterprise.

The manufacturing paradigm is evolving with highly interdependent industry coalitions and cross-pollination of business interests among industry corporate players, blurring once-clear boundaries. Inter-enterprise relationships are becoming increasingly integrated in the digital world. The result is a highly amalgamated manufacturing ecosystem that requires new rules, gives rise to new business drivers, and exerts new influences on manufacturers’ focus and actions.

Democratization of Manufacturing

As disruptions from the pandemic and a global re-balancing of supply chains continue to settle, digitally integrated manufacturing options, and changing levels of intelligence in products, will drive the democratization of hardware manufacturing, leading to commoditization.

Additive manufacturing, for example, is engendering agile and innovative manufacturing models. As additive manufacturing becomes prevalent and commoditized, direct on-demand manufacturing-from-design will become more frequent. This in turn will create new digitally savvy supply or insource options for manufacturers.

Value-added digital networks will provide new opportunities but also a set of unforeseeable variables with which manufacturers will have to cope.


We already see increasing levels of additive manufacturing components in products today. As levels rise further, supply and sourcing options will get redefined. This will cause some manufacturing operations to abandon their current products and methods and pivot into newer possibilities.

With products becoming increasingly connected, and by extension, smarter, software differentiation will become critical. Collaboration between digital resources and traditional manufacturing operations will necessarily increase. This presents opportunities for purpose-built value networks, which we address in the next section.

The shift in differentiation to digital capabilities will drive a degree of commoditization in hardware products, resulting in increased standardization in hardware manufacturing. In combination with additive manufacturing and similar trends, this will drive increased democratization of the manufacturing process.

The Move to Value Networks

As with the advent of the World Wide Web in the early nineties, the formation of value-added digital networks will likely be quite rapid and will foment significant change. In the context of manufacturing digitization and the resultant evolving ecosystem, manufacturing enterprise priorities will need to accommodate emerging cyber-physical systems and digitally enabled supply networks.

As such, collaboration and value will increasingly shift from the physical to the digital. What emerges will pose new opportunities, dependencies, and currently unforeseeable variables on which manufacturers will be able to capitalize—and with which they will need to cope. This would mean a race to define new value propositions within very demanding time- to-market scenarios. To achieve and capture these markets, manufacturers will go through a phase of increased ecosystem partnerships that will continue to shape the industry in the years to come.

With products being increasingly connected and smarter, software differentiation will become critical.


Additionally, linear value chains are shifting in favor of more sustainable circular value chains, accelerating the emergence of digitally-enabled, purpose-built ecosystems. This will require manufacturers to set aside the role of a defined player in a relatively static environment and adopt the role of an active participant in an agile and evolving environment. Traditional manufacturing chains that emphasized product-based fit and linkages will give way to a focus on addressing points-of-value convergence with greater speed and agility. In short, manufacturers that wish to succeed will need to move from traditional value chain operations to adapting and existing in an ecosystem-driven value network.

Evolving Business Models

The history of transformation in other industry segments is a harbinger of what to expect in manufacturing. We have already seen service- and data-driven business models create new opportunities and ecosystems in other industries such as transportation, hospitality, and publishing, to name a few.

Digital proliferation to all levels of manufacturing will have manufacturers moving from product-based revenue models to a mix of product-, service-, and data-based business models. Identified by terms such as servitization, as-a-service, utilization-based, or data monetization models, they will become increasingly common. As these models become more prevalent, so will the need for and dependency on an extraordinarily strong ecosystem and partnerships with the right go-to-market strategies.

In summary, while transformation progresses within the walls of the enterprise, the ecosystem incubation and the role it will play is difficult to ignore. As the manufacturing ecosystem evolves, manufacturers must adopt practices that are radically different from those they used in the past.  M

About the author:

Siva Gurupackiam is Vice President of Manufacturing Industry Strategy and Solutions at NTT DATA.



ML Journal June 2022

Workforce Rebalancing Builds Pressure in the Pipeline

Understanding the differences between how employees and employers are reimagining work helps leaders build better future workforce strategies.   

Recent dramatic changes in the way we work, and how we think about work, have caused a tidal shift in how employees view their priorities and prospects in daily life.

The COVID-19 pandemic accelerated a work realignment trend that was already in progress, and further transformed people’s understanding of work success, purpose, and value.

Rising inflation, The Great Resignation, and calls for increased commitment and action on environmental, social, and governance (ESG) issues, are further reshaping a workforce terrain that manufacturers are all trying to navigate with new eyes. As the initial waves of health-driven change roll into new ones, the workforce is now resettling into pools based on how we work, what we value, and who we are.

It’s a new moment for both employees and employers alike, with new opportunities and a need for greater context around the how, what, and why of work. Understanding these key shifts will help manufacturers already dealing with the current labor crisis, better prepare new approaches to how they can successfully attract and retain their key workforce.

Work Reimagined

The EY 2022 Work Reimagined Survey reveals insights from more than 17,000 employees and 1,575 employers across 22 countries and 26 industries. The findings help highlight the primary motivators of workforce turnover and retention in today’s tight labor market and help highlight areas of focus for manufacturing leaders who are looking to lean into the opportunities of the moment.

“The industrialized world now finds itself poised to fully reimagine a more sustainable and human-centered workforce strategy.”


These insights are essential for manufacturing’s future. The industrialized world now finds itself poised to fully reimagine a more sustainable and human-centered workforce strategy. By responding decisively to the moment and recognizing the necessity for the sustainable transformation of business, employers now have an opportunity to redefine a new way of working that preserves the talent pipeline and future value.

Working in a Changed World

As much as the world would like to move beyond the COVID-19 pandemic and its effects, businesses still find themselves rocked by a world in flux, including in the ways we’re working. Both employers and employees necessarily focused on short-term decisions to forge through one of the biggest health challenges in a generation. But now attitudes and strategies toward work are being molded by other macrotrends. Recent analysis from The World Bank shows an expected slowing of economic growth and persistently high inflation over coming years, and an urgent need for coordinated action to address the severe costs of weather and climate disasters.

This backdrop colors the landscape for business investment and employee sentiment at a time when The Great Resignation appears to still be in full swing in some parts of the world.

For example, 68% of employers say employee turnover has increased in the past 12 months, with 43% of employees saying they are likely to leave their current employer in the next year. That’s a significant rise from 2021, when only 7% of employees said they’d be unlikely to stay. The groups most expecting to leave their jobs identified themselves as Gen Z or millennials in the United States (48%) and were mostly working in the technology/hardware sector (60%).

However, flexibility in work has been championed by employees and embraced by some employers over the last two years and has now become an expectation rather than a nice-to-have for most workers. Of those surveyed, 80% of employees want to work at least two days remotely per week. Just 20% of employees voiced reluctance toward fully remote working, compared to 34% last year, showing broader acceptance of working from anywhere.

Despite this signal from employees, nearly a quarter (22%) of surveyed employers say all employees are still expected to return to their place of work five days a week.

“The vast majority of employees and employers seem to agree that the old status quo of the working world is gone.”


These diverging perspectives between employers and employees on hybrid/flexible work is only one example of what could be seen as a rebalancing of leverage in favor of workers. Perceptions of workforce culture, productivity, advancement potential, and mobility also show significant differences between employers and employees and could further fuel an already hot race for talent.

Employees and Employers Have Divergent Views on Talent and Culture

With a workforce feeling more empowered and the labor market appearing increasingly liquid, many employers show declining levels of confidence in how their organizations are developing their cultures and maintaining productivity. Only 13% of employers say they agree that their culture has changed significantly and improved since the start of the pandemic, with the same number agreeing about productivity improvements. This is down from 22% and 21% respectively in 2021.

The details of employer sentiment, however, can vary widely. The survey data reveals three distinct segments of employers based on their perception of business productivity and organizational culture:

Optimists (32%)

Employers who have been proactive in their approach to flexible work, real estate, and technology are more likely to agree they’ve seen positive outcomes. These optimists, almost a third of the sample, indicate they feel they have more agency in the present uncertainty. By giving clarity to their workforce and leaning into the change, these businesses invested in a strategic direction and can see the benefits. By taking a consistent, strategic, and cross-functional approach to the current climate, these optimists are more likely to believe they’re steering their own course.

Pessimists (11%)

A smaller set of employers feels disempowered by the moment, though. Their perception of outcomes related to culture and productivity is drastically lower than optimists and indicates less investment in clear actions toward improving technology, onsite amenities, and further flexibility for the workforce. By not being proactive, these employers seem to have remained in a wait-and-see posture while the labor market and overall economic situation has shifted. These employers have not positioned themselves to attract new talent and their veterans may well continue to leave, further deteriorating confidence in their competitiveness.

Massive Middle (57%)

The majority of employers remain somewhere in between the highs and lows without a distinct perspective on productivity and culture outcomes. This shows that employers and employees alike are still undecided about what the future holds. There’s an opportunity here for those more forward-thinking employers among them to now start building leading strategies to help them win the race for talent.

“Some employees may feel empowered by work flexibility, seeing more opportunity for advancement with virtual assignments and a broader mix of employment opportunities.”


The vast majority of employees and employers seem to agree that the old status quo of the working world is gone. Most respondents agree that hybrid and flexible working conditions are here to stay, and employees are still prepared to switch jobs if they don’t find what they want. It then becomes more imperative than ever for employers to understand what the workforce most values.

From Pay to DE&I

The depth of collective reassessment of work can be seen in what people say they value. Inflationary pressures, the broader acceptance of remote work, and lower barriers to finding new jobs have all contributed to employees (79%) putting a premium on total pay and other tangible benefits. Employers (83%) agree that the pandemic has accelerated a need for extensive changes to rewards policies, encompassing compensation, wellbeing, flexible benefits, time off, and more.

Such rewards include multiple categories of incentives. A detailed look at the priorities of employers and employees actually reveals a noticeable misalignment between the two. Employees are much more likely to place more weight on compensation and career advancement, followed by work flexibility factors.

The Gap Between Employee and Employer Priorities – Employees

The Gap Between Employee and Employer Priorities – Employers

Pay also factored into how employees perceived Diversity, Equity, and Inclusion (DE&I), 20% of whom said that addressing pay equity is the single most important action a company should take to improve DE&I. Employers agree that more must be done to improve DE&I, but the largest number of employers (17%) cited reviewing hiring criteria as the most important action to take.

Some employees may feel empowered by work flexibility, seeing more opportunity for advancement with virtual assignments and a broader mix of employment opportunities. But there is also some acknowledgement that further acceptance of hybrid/flexible working conditions may risk slower career advancement. There’s a noticeable perception gap between employers and employees with 72% of employers believing new ways of working may cause some segments of the workforce to lose competitive advantage, compared to just 56% of employees.

For employers, pay represents a fixed cost during a time of growing inflation. Only 18% of employers believe pay increases/reviews are needed to address employee turnover, showing a clear disconnect to what employees say they want in a new role, and what employers are expecting to most deliver to help employees thrive. Employers, meanwhile, put more emphasis on learning and skills, flexibility, and employee psychological/mental wellbeing and safety.

Upskilling Committed Workers

The focus on learning and skills by employers could be a reaction to The Great Resignation. If turnover is high and employers show less confidence in productivity gains made through the pandemic, then an employer may be more likely to invest in upskilling the remaining workforce. This positioning from employers may also align with the needs and expectations of a subset of employees more likely to be company-committed. These individuals are more likely to be concerned about the risks of burnout and their mental wellbeing, more likely to work full-time in an office, and have a more favorable view of work-life balance. The strategies and priorities of most employers therefore appear to be in line with this segment of employees who show more loyalty to their present employer.

“Parsing the details of an organization’s workforce provides an opportunity for a bespoke solution to harmonize the priorities of employers and employees.”


The distinctions between groups which could be characterized as job jumpers versus the company committed, may be influenced by their professional sector, but also by generation. This highlights the importance of knowing the composition of the workforce to be able to respond to it appropriately.

Working Across Demographics

It may seem self-evident, but it bears emphasizing that the workforce is not a monolith and perceptions of wellbeing, value, and productivity can vary widely among workers based on demographics. The data shows wide gaps between self-perceived levels of wellbeing between geographic location, professional sector, gender, and seniority.

The survey results provide greater detail to generational preferences, especially around physical and organizational design and how the workforce will interact with the office. Gen Z is much more likely to put higher weight on the ability to stay socially connected while working (29%) than do Baby Boomers (21%). Gen Z also puts higher value on flexibility and the ability to have a change of work scenery (22%), compared to just 14% for Baby Boomers. Gen Z is also more likely to consider the design of an office/workspace as a driver to be in the office (12%) compared to Baby Boomers (7%).

Employees Likely to Leave Their Current Employer Are Embracing New Ways of Working

Broadly, the purpose of the physical office and how it influences the way work gets done depends on the demographic makeup of the workforce. Younger workers cite more informal social factors as potential drivers to being in the office, compared to a more utilitarian view from Gen X or Baby Boomers who are more likely to see the space as useful for collaboration. Parsing the details of an organization’s workforce provides an opportunity for a bespoke solution to harmonize the priorities of employers and employees.

5 Areas of Focus

The world of work is clearly in a state of transformation, spurred on by the challenges of recent years and the expectations of those to come. Manufacturing leaders should now consider finding cross-functional ways to respond to opportunities when they arise:

  1. Operationalize hybrid models: Hybrid work is here to stay, so employers should build a structure with intent. They need to understand which roles are best suited to remote/hybrid work, and build the systems required to create value while streamlining functions. This may include building an integrated mobility strategy to manage tax compliance for a geographically diverse workforce, along with structuring rewards and even real estate strategy to attract and retain the workforce they need.
  2. Reinvent the workplace: It’s not enough to repaint an office and expect workers to return to cubicles. Employers should consider a renewed integrated workplace plan that considers the physical space and amenities needed to empower productive workers. But it should also reflect how the workforce engages in social networking and learning both in the physical office and in the digital realm.
  3. Create a work-technology experience: From grocery shopping to hailing a cab, we all know the importance of a good user interface and design for business. A virtual workplace and employee experience platform should be on par with consumer technology providing a seamless technology experience across all work contexts. Done well, this can contribute to efforts identifying areas requiring culture change and moving the organization toward a more equitable reality.
  4. Reshape and optimize programs and career frameworks: The pandemic and so much more have redefined employee expectations, so employers should update their rewards and career advancement models to respond to a still fluid labor market.
  5. Define culture and organizational networks: Before fully undertaking a large-scale transformation, employers should also assess the fitness of their organizational culture. This includes understanding which key aspects of an organizational culture to preserve and how to engage key influencers to reduce friction toward the new physical and digital realities of work.

These areas of focus may differ between organizations, but leaders should work to find the right constellation of solutions that address the specific makeup of their workforce, the desired direction of their organization, and the continued assessment of transformation in progress.

Acting With Intent

Today, work is being reimagined by both employees and employers, but their visions don’t always align. Both see flexibility and hybrid work as the new normal, though further details reveal divisions. Employees are still willing to leave their jobs to advance their career and pay potential. Global uncertainty connected to inflation and labor costs are fueling reluctance among employers who are not eager to reset pay and career opportunities. If companies don’t address pay equity between internal and external labor markets, then efforts toward improving culture, productivity, and DE&I will be neutralized by labor turnover.

By acting with intentionality, and with a better understanding of employee perceptions and values in changing times, manufacturing leaders can build more trust across their workforce and orient their organizations toward a more optimistic future.  M

(Unless cited, all statistics in this article are from the EY 2022 Work Reimagined Survey. The views expressed by the authors are not necessarily those of Ernst & Young LLP or other members of the global EY organization.)

About the authors:

Kim Billeter is EY Americas People Advisory Services Leader.


Roselyn Feinsod is Principal, People Advisory Services, Ernst & Young LLP.


ML Journal June 2022

CASE STUDY: Flex Empowers Employees with LISA Avatar Assistant

LISA, Flex’s ML Award-winning avatar-based line stop assistant, helps significantly improve front line operations while empowering employees to succeed.   

Company Fact File

Company: Flex
Sector: Technology, Supply Chain, Manufacturing Solutions
HQ location: San Jose, Calif., U.S.
Revenues: $10 billion+
Employees: 5,000+ employees, 30 countries
Web url:

Flex’s factory in Althofen, Austria, faced a business challenge: How to make its product lines more efficient in a high-mix, low-volume manufacturing environment where small inefficiencies can have an outsized impact on both the manufacturer’s and the customers’ bottom line.

Flex’s Althofen factory makes more than 500 products in lot sizes ranging from 100 to 3 million pieces, for more than 30 customers. In any given month, the factory manufactures products ranging from parts for lawn mowers to components for automotive GPS systems to Class III medical devices. Every time there is a product changeover, the equipment on the line is reconfigured, a process that requires precision and accuracy. And the factory performs more than 900 of these line changeovers every month.

“It is like a NASCAR pit stop – moving parts, moving people, and every second makes a difference,” says Paul Baldassari, Flex Executive Vice President.

The Flex team was tasked with finding a way to use automation to reduce costly errors that took place during product changeovers. However, like a NASCAR pit stop, success depends not only on the right technology, but also the skillset of workers who can quickly and efficiently shift gears as needs and product lines change.

“LISA has already helped the factory reduce changeover time by 10.5%, reduce line clearance time by 85%, and reduce quality-related downtime by 56%, all while empowering employees to succeed.”


The result is LISA, Flex’s avatar-based line stop assistant. This innovative system is already putting the company on the fast track when it comes to stopping a production line that is wrongly configured for the product and stopping untrained operators from proceeding. In fact, LISA has already helped the factory reduce changeover time by 10.5%, reduce line clearance time by 85%, and reduce quality-related downtime by 56%, all while empowering employees to succeed.

Using Agile Principles to Solve Real-Life Issues

Before the LISA project began in January 2019, employees had checklists they had to reference before setting up the assembly lines. But errors could still slip through the cracks due to the manual processes. This caused a lot of stress to front-line workers in terms of error prevention and the need to double check their work.  In one particularly costly scenario, the production line was inadvertently set up to include nitrogen and the output had to be scrapped.

The two primary objectives Flex was looking to achieve were to gain optimal efficiency by empowering employees on the floor to stop wrongly configured productions lines; and to eliminate waste and inefficiency by identifying scenarios in which untrained operators were configuring lines they weren’t trained to configure.

Using Agile principles, a lean group of representatives from disciplines across the organization put their heads together to find ways to accomplish these two objectives. Because the Althofen site had been investing in digital solutions for several years, it happened that there were two critical elements for the solution already in place. On the one hand, a digital source of the correct parameters was needed to manufacture a product. On the other hand, the team needed real-time data coming from the shop floor equipment that provides the actual parameters. These two elements were present, so the team accepted to challenge to combine them in a creative way to solve this operational challenge.

Empowering Workers by Design

Because Flex’s leadership team views employees as the company’s greatest asset, they wanted to empower workers to be valued contributors to the process, particularly during times when new automation capabilities are introduced to their work environments. They knew that the success of the project would depend as much on employee acceptance as it would on the technology and data sources. They also knew that employees could actively resist the introduction of LISA if they felt it was a system simply put on top of employee workflows to report errors and “correct” workers.

“The transformation journey of our Althofen site is a perfect example of Flex’s commitment to advanced manufacturing practices and technologies, continuous improvement, and developing our most important asset – our people.”
Paul Baldassari

With this in mind, the team decided to design LISA as an avatar-based system that had a literal “face” employees could interact with. The avatar approach enabled Flex to demonstrate to employees that LISA was a tool designed to assist them and help them to do their jobs more efficiently. It helped employees regard the tool as a valuable assistant, able to serve and empower them in their roles. As a result, the LISA system has become a valuable contributor to the Flex culture of employee empowerment.

For example, LISA has helped reduce stress for front-line workers by giving them an automated layer of confidence, quality, and safety to ensure success. The elimination of tedious and repetitive work has not only reduced waste but has also freed employees to focus on higher value-add and more interesting activities. In addition, it has reduced the workload, enabling employees to quickly access real-time information, helping them make fact-based decisions to improve efficiency throughout the value chain.

Lessons Learned and ROI Gained

It was only after using LISA that the Flex team in Althofen has also been able to understand some of the limitations of the data that had been informing line production decisions. Because LISA is driven by objective facts, the system does not have the same biases that humans do, biases that often cause employees to correct data without even realizing it. LISA ensures that the data being used to determine production line assembly is accurate and up to date, creating better and more precise outcomes.

LISA’s early results have been promising. The average time to change over a product line before the implementation was 13 minutes. Currently, the Althofen factory average time of changeover stands at 11 minutes, 39 seconds — a reduction of 10.5%, thanks to LISA.

Other metrics resulting from the LISA implementation in Althofen include:

  • Overall Equipment Effectiveness (OEE) has increased 18%, with an average of 900 product changeovers per month.
  • Potential errors through the use of the digital Poka Yoke Solution (otherwise known as “mistake proofing”) were reduced from 900 to 0 per month.
  • Quality related downtimes were reduced by 56%.
  • Line clearance time to check if the operator is trained on work area time reduced by 85%.

Innovation Leads to Accolades

LISA is another proof point of the company’s unwavering commitment to innovation that improves the customer experience. LISA will allow Flex customers to save money, reduce waste, and get their products to market more quickly, making it a more attractive diversified manufacturing partner and strengthening the company’s competitive position.

“LISA has helped reduce stress for front-line workers by giving them an automated layer of confidence, quality, and safety to ensure success.”


Thanks in part to the results delivered by the LISA project, Flex’s Althofen factory was admitted into the World Economic Forum’s Lighthouse Network in September 2021. The Global Lighthouse Network’s focus is to accelerate inclusive technology adoption in manufacturing by building a cross-industry network that includes some of the most advanced factories and connected value chains worldwide.

The Althofen site’s demonstration of how it has deployed 4IR technologies to improve operational efficiency and agility to develop a more substantial and differentiated advantage, also garnered the company a 2022 Manufacturing Leadership Award for Operational Excellence.

Flexing Into the Future

While the current iteration of LISA was deployed in the second half of 2020, Flex will continue to iterate and make improvements throughout LISA’s lifecycle and as the needs of the business change.

Although LISA system began life in the Althofen factory, Flex plans to roll it out to twelve additional manufacturing sites in 2022 to support the company’s global digital transformation efforts.

“The transformation journey of our Althofen site is a perfect example of Flex’s commitment to advanced manufacturing practices and technologies, continuous improvement, and developing our most important asset – our people,” says Baldassari.  M

About the author:
Sue Pelletier
, a contributing editor with the Manufacturing Leadership Journal, is a seasoned writer/editor with experience in online, social media, e-newsletter, tablet app, book and e-book, and print publications..

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