By Mark R. Smith, Contributing Writer
To say the least, it’s been an astounding past several months around the globe. And that most understated thought has also rung true in a business sector that had gained considerable traction even before the COVID-19 shutdown pandemic started: Advanced Manufacturing.
Advanced manufacturing, according to manufacturing.gov, is “The use of innovative technologies to create existing products and the creation of new products” and “can include production activities that depend on information, automation, computation, software, sensing and networking.”
To offer those parameters helps adds clarity in a field where there is still a fair amount of traditional manufacturing is ongoing, though it seems like the repercussions from COVID-19 have boosted this heightened wave into the future.
That appears to be the case on street level, as advanced manufacturing is − and has been − moving forward “at an accelerated pace,” said Michelle Comerford, industrial and supply chain practice lead for Biggins Lacy Shapiro & Co.
Bringing It Back
Indeed, while the industry moniker of advanced manufacturing may have a new-ish ring to it in some quarters, in others that’s not the case.
“There was already a trend among many manufacturers in the U.S. who were shifting into more advanced operating modes via their U.S. operations,” said Comerford. “With upgrades in automation already boosting the market in terms of cost savings and safety, a case was already being made to shift production back to the U.S. from overseas, especially for products destined to the U.S.”
Automation has already eliminated some of the lower-paying jobs in the manufacturing field, while demand for higher-skilled workers in the industry has risen. Now, the question has become “how to find those higher-skilled workers,” she said, “and those who have the ability to be trained or ‘upskilled’ in order to operate and maintain this higher level of technology. The communities that are embracing the connection between local training resources and industry needs are those that have a leg up in attraction of new and expanded manufacturing investment.”
Comerford can point to an area in Western North Carolina where that connection is evident. It came via her recent experience in its Smoky Mountain region at Catawba Valley Community College, which has launched what it’s dubbed The Manufacturing Academy.
“Anyone can develop a curriculum,” she said, “but you have to integrate with local employers to find out what they need. In that case, 25 local employers weighed in on gaps they were seeing in the local workforce, and developed a custom curriculum for basic manufacturing concepts and exposure to career opportunities to meet these needs.”
Academies Three
The Manufacturing Academy was founded after meetings with advanced manufacturing employers in that area. Not surprisingly in a state that’s famous for furniture manufacturing, “it started with five furniture companies that were interested in starting apprenticeship programs,” said Crystal Glenn, associate dean of the school of workforce development and the arts at CVCC.
“We worked with NCWorks Career Center (a local workforce development partnership) and those founding partners to create a training program for candidates to become skilled craftspeople,” said Glenn. “Those companies participated by sending their best employees on weeknights to lecture and conduct hands-on training.”
As it happened, the brainstorming and the early traction led to not one, but three programs: the Catawba Valley Furniture Academy, the Alexander Furniture Academy and the newest, the Construction Academy, which works with the county’s public schools. They now offer pre-apprenticeship instruction for students who spend summers working in the industry, “so again, they are trained under the guidance of experienced tradespersons,” she said.
And those employers design the curriculum, assign instructors and offer hands-on experience, said Glenn. “They’ve also donated equipment and the county commissioners have purchased a building at the college where we offer training.”
As for how advanced manufacturing applies at the academies, she said students are using equipment − old and new − in the mechatronics lab, with such technology as programming logic controllers, robotic arms and modular production systems to learn to troubleshoot.
Also key on the agenda is training in soft skills, math and reading and improvement skills, such as Six Sigma, a methodology where students learn to decipher the root causes of problems via elimination; and a program called Lean, where the students are taught how to make production more efficient and to eliminate waste.
“It’s all part of integrating the students into the modern world of manufacturing, from novices to experienced hands,” said Glenn. “As automation comes in, not only are we training millennials out of high school, but also the incumbent workers who have proven their aptitude who need to learn the automation skills [to operate] electronics and computers.
“And that,” she said, “helps companies tremendously that want to retain employees.”
By the way, don’t discount the importance of those soft skills, as they are key to hiring and keeping employees. “One production manager even told me that if he can find someone with good soft skills, they can administer the advanced training,” Glenn said.
Reshoring
It’s thought that those soft skills will lead to a stronger workforce that has embraced Artificial Intelligence (AI). “I think in 10 years, AI will have more of a grip on the industry,” said Glenn, “especially when dealing with situations like COVID-19 and perhaps other touchpoint issues.”
Such hurdles all point back to the ability to adapt, sometimes on the run. “The jobs won’t go away, but they’ll continue to change,” she said. “That means now is a critical time for the workforce, as we work to ensure that we can supply the skilled labor that advanced manufacturing needs. The only way to do that is have industry, government, education and workforce professionals collaborating together. It’s all about promoting the industry.”
And that starts with establishing programs that are expansive enough to include gaining mathematical skills, greater reading comprehension and an overview of the environment.
“It’s about acquiring that baseline knowledge so workers can be hired and go right to training on specific pieces of equipment, on the job,” Comerford said, adding that these are the types of workers that reshoring and Foreign Direct Investors coming into the U.S. need. “We’re working with a number of foreign and domestic companies that want to shift production to manufacture in the U.S., and they are all seeking skilled workforces in order to do so.”
She said that the manufacturing industry, as a whole, is “quickly getting to a place where all manufacturing is going to be advanced,” with 2020’s usual suspect a significant part of the reason for that movement.
That “suspect” is COVID-19, but that acceleration was happening before the shutdown began last March, too.
“Looking back, some of the automation that’s available now you couldn’t find 10 or even five years ago,” Comerford said, offering a well-known example. “For instance, look how additive manufacturing (also known as 3-D printing) has become more efficient and cost-effective. At a manufacturing conference earlier this year, I attended a presentation on that topic where the speaker predicted that large-scale 3-D printing would be cost competitive within three years. COVID-19 may just help accelerate that timeline, too.”
‘Seismic Change’
That may be, but what’s happening at street level today also includes some of the old school equipment and practices, too.
“The big picture is that all manufacturing is moving toward embracing a wide variety of technology for its business model,” said Mike Galiazzo, president of the Regional Manufacturing Institute of Maryland. Known as the Fourth Industrial Revolution, or Industry 4.0, “it is the adopting advanced technologies by companies leading to the transformation of manufacturing worldwide.”
The route to that end, Galiazzo said, “will be via digital technology, as well as the materials that are becoming more readily available and are allowing companies to be more efficient and customize operations,” said Galiazzo. “Digital technologies are fundamentally altering manufacturing, even in the production area, with sensor technologies and robotics.”
To draw a parallel, he said, consider how the cell phone and Google have changed human behavior. “Manufacturers have also embraced such technologies that will facilitate similar systemic changes.”
What these technologies will do, Galiazzo said, is “allow us to become fundamentally more globally competitive. Many technologies will eliminate jobs involving repetitive tasks. However, it will create new work for higher-skilled workers.”
And that which will change is the nature of jobs and what they pay. “One reason pay scales are rising is that fewer people are making lesser salaries, but those who are on the higher end of that spectrum are sometimes Ph.Ds. That type of skill level is needed to run the newer manufacturing systems,” he said. “Just look at the printing industry and the stark differences between digital publishing versus old school typesetting; the shift to digital technologies in printing and publishing demonstrates how skill sets have changed due to new technologies.”
Another aspect of advanced manufacturing that’s receiving more notice is the connection between research and development with production. “R&D needs to be more closely aligned with manufacturing, especially in states like Maryland that have a strong R&D presence,” Galiazzo said, adding that the high volume of research and innovation in Maryland should lead to more manufacturing growth.
The other issue that has come to the forefront is how COVID-19 has created an altogether new and different set of circumstances, including that employees can often work at home. “That’s a cost-saving for the manufacturers,” Galiazzo said, adding that he knows of two major Maryland corporations that have decided to have its employees work at home permanently. “We’ll see where that leads.”
Galiazzo went so far as to opine that COVID-19 may transform the workforce, similar to how Napster did in the music industry. “Napster changed music fundamentally by bringing systemic change in how music is acquired and consumed, as well as heightening efficiency.
“All told” he said, “the seismic changes brought on by COVID-19 are making for challenging times that may lead to new systems of success.”
‘80 Percent’
Similar observations of the progress of the advanced manufacturing sector, even during the pandemic, were made by Patrick McGibbon, chief knowledge officer for the McLean, Virginia-based Association for Manufacturing Technology. He observed that there have been “many studies about emerging technologies and automation; together, they tend to do better during a recession than when the entire market is doing well.”
For instance, according to U.S. Census data before the 1982 recession, only about one in four machines sold in the U.S. were computer-controlled; in 1984, after the recession ended, one in three machines sold in the U.S. were computer-controlled (CNC).
During the next recession in 1987, that number rose to two in five, McGibbon said. “Computer-controlled machine sales greatest growth in market share continued to occur in the recessions of 1992 and 2000. After the 2009 recession, CNC machines, as a percent of total sales, rose to more than 80 percent on a dollar basis.”
Given that brow-raising rise, the trend of late has been to get more work out of a given company’s current workforce. “That happens in manufacturing and in the white collar sector as well, when jobs become automatable,” said McGibbon. Though that loss of jobs can sound alarming, “It’s positive for America, because workers have to hone their skillsets to stay relevant in digital manufacturing and that advances the workforce. It gets smarter, and smarter means more productive.”
He then drew a parallel to when President John F. Kennedy promised the nation that the U.S. would get to the moon by the end of the 1960s. “Necessity is the mother of invention,” he said, “and it’s happening now, just look at what’s happening with coronavirus vaccine development. We were initially told a vaccine was a couple of years off; then about a year; now, it’s possible that we’ll see one by the end of this year.”
While making the point that the nation’s collective heart is heavy, given that the U.S. has lost more than 200,000 of its own to the pandemic, McGibbon stressed that we can’t just accept going back to normal, but rather to leverage the disruption, layoffs and fiscal stimulus to create a better-than-normal. That issue became apparent when personal protective equipment (PPE) was in short supply when the pandemic hit this past March.
“That sudden and pronounced lack of PPE illustrated the issues of supply chain risks and the ensuing negative impact,” he said. “So we have to start working to be productive and as competitive as we can be, which the U.S. did well in the 1980s; but the drive to low-cost production that’s often associated with low-cost labor put supply-chain risk analysis on the backburner. The pandemic has uncovered our nation’s neglect in continuously evaluating supply-chain strategies.”
McGibbon then noted the findings of Harry Moser, founder of the Reshoring Initiative, who has estimated that 20-30 percent of imported components should be made in North America when taking into consideration factors like the cost of insurance, freight, delivery risks, IP risks and other issues that are created by a long supply chain.
“If you factor in the costs of the new tariffs that have been imposed since 2018, that number approaches 40 percent,” he said.
But there’s a flip side to that thinking, too. “If people took the cost of total ownership into account,” McGibbon said, “I’m not sure the U.S. has the resources to keep up with the demand for labor, union and non-union.”
Even Bigger Data
Acknowledging the effect COVID-19 has had on an already strong market is David Brousell, vice president and executive director of the Manufacturing Leadership Council (MLC, a division of the National Association of Manufacturers), who said, “We’ve always focused on the next wave of manufacturing progress, including the use of technologies such as robotics, software, automation and AI, and COVID-19 has accelerated the need for advanced manufacturing.”
Brousell said these advancements run the gamut, as they range from operations technologies that “are mostly on the factory floors” to information technologies that provide data to manufacturers “so they can run faster, more efficiently and produce better products. There are a [vast] set of systems and learning their names is almost like reading alphabet soup.”
That varied approach includes the potentially acronym-rich main systems, which include Enterprise Resource Planning, Quality Systems, Advanced Robotics with Artificial Intelligence, Customer Relationship Management, Supply Chain Management and a variety of others.
Brousell also said that manufacturers are more often using sensors to capture data from various points of the manufacturing process to monitor tasks and improve efficiency, as well as assess and predict the health of their machines; they’re even finding that, by using video, analytics, etc., they can improve or even replace the machines before they fail.
“There are huge volumes of data being generated today, with exponentially larger volumes expected to be generated as a result of all of the connectivity that manufacturers have implemented,” he said. “To effectively mine the data, manufacturers will increasingly rely on advanced analytics, including AI systems.”
While McGibbon discussed the huge wave of CNC product that’s sold on the market in the past decade, Brousell said that MLC research has indicated that “in the next couple of years, manufacturers are expecting an up to 500 percent increase in data, due to that increased connectivity involving the manufacturing process, plant floor equipment and people,” he said. “They’re bracing for it by using AI and more powerful systems, but it will take time and money for users to adopt them and learn to use them effectively.”
MLC conducted a survey this spring that revealed manufacturers that had already embraced digital technologies were able to adapt to the pandemic much better than companies that had not (or had not done so sufficiently). “And at that time, 53 percent of respondents said they would accelerate investment in digital technologies due to the pandemic. That figure has dropped about 10 points since June, but it’s still a very robust number,” Brousell said. “Today, those manufacturers need to focus on stabilizing financially and bringing their people back to work.
“Still, they see the prize at the end of the rainbow,” he said. “Manufacturers are on the path to figure this out.”
Hot Markets
Moving forward, where advanced manufacturing fits in to today’s global market has to do with its three segments, said Angelos Angelou, founder and CEO of AngelouEconomics, of Austin, Texas. “It’s characterized by new innovation,” he said, “which can come from established companies; new companies; and tech startups. That latter segment is on fire, with a flood of capital available via venture capital and initial public offerings.”
While there are hot markets like Austin; Phoenix; Atlanta; Portland; the Research Triangle, in North Carolina, as well as Charlotte; Greenville, S.C.; and Colorado, primarily in Denver and Colorado Springs, what comes in 2021 depends, as most everything today does, on progress on a vaccine and new drugs to treat COVID-19.
“People are not going to be spending money or going about their usual business until they feel safe,” Angelou said. “There are sectors that have been devastated, especially the hotel, healthcare, travel and live entertainment industries. They’re a huge part of the U.S. economy. It’s the same thing in the aerospace sector, given the lack of demand for flights.”
When it comes to reinvigorating the economy, “Creating jobs is at the center of the conversation,” said Seth Martindale, senior managing director of CBRE Consulting, in Los Angeles. “The bigger question is, ‘Where in the U.S. will they be?’ You could build a manufacturing plant in the middle of an expensive city, but you’d be better off in a place where a trained, available and affordable workforce is already present.”
Martindale sees the available workforce as existing mainly in two regions of the U.S: the Southeast and the Midwest. “There’s no question that that’s where we are seeing a big push,” he said.
Speaking of a big push, Martindale’s hope as the world exits 2020 for what is hoped to be markedly better 2021 “is that we’ll have the COVID-19 vaccine and a reduction in overall cases that will lead to a broader opening and greater stimulus for the economy. “The optimist in me feels that will happen,” he said. “The question is, ‘When?’”
Late 2022?
‘When’ won’t be for some time, to hear Angelou tell it. “The ‘V’-shaped recovery that had been predicted in many economic quarters is not going to happen,” he said. “It will be a slow-paced recovery, generally on a state-by-state basis, that depends on how they have dealt with COVID-19.”
“Most economists don’t see a full recovery until late 2022,” he said. “It won’t be what was expected, so we need to be more realistic, domestically and globally. And I don’t know if the U.S. can recover fully without a global recovery, since the U.S. is the no. 1 exporter of goods in the world.”
Still, the advanced manufacturing sector continues to bring innovation to light. But to help the industry reach its vast potential, McGibbon also discussed the need to boost the fortunes of the creative minds in the entrepreneurial community.
“Technology users tend to be conservative because a significant majority of companies are small, thus often risk averse; they don’t adopt new technology quickly,” he said. “[But] if new technology [is proven to] be more productive, help address resource deficits and raise the skill level of our workforce, I think it’s time that various governments should incentivize small companies that can improve our economy and workforce options by, as a group, taking the risk.
“That would lead to a faster, broader adoption of emerging technologies,” McGibbon said. “We need reduced risk and greater payoffs for the early adopters. There are many great concepts out already in the market that have not been able to move on to take the next steps in commercialization.
“So all concerned,” he said, “need to step it up.”
Bio: Odenton, Maryland-based Mark R. Smith joined Expansion Solutions after having written about site selection among the vast number of topics he has covered in the business universe. That part of his career began in 1993 when he joined The Daily Record, a Baltimore business and legal publication, where he delved into the worlds of economic development and commercial real estate, among numerous other industries; in 2003, he was named editor-in-chief of The Business Monthly, another Maryland publication that covers the scene in the Baltimore-Washington Corridor counties.
Concurrently, he’s written at length about the film and video industry for a variety of publications, and about his other loves, including music, sports and leisure.
