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- Issue 5 Week 2
Issue 5 Week 2
Victor Anderson
July 26, 2024
Shop Floor Scoop
Ready to dive into some cutting-edge stuff? This newsletter has Rockwell’s take on smart manufacturing, AI leaders' big challenge, and Toyota’s secret sauce for spotting future leaders.
Today’s email includes:
Manufacturers are getting smarter: Rockwell Automation's latest report on how manufacturers are boosting efficiency.
What’s the ROI: Almost half of AI leaders struggle to prove the value of AI.
Toyota’s Leadership Tips: Toyota’s CEO shares tips on finding future leaders.
MANUFACTURERS ARE GETTING SMARTER
Rockwell Automation’s Latest Report
You know how factories have always been about big machines, noisy assembly lines, and lots of workers? Well, the times are changing! Rockwell Automation just dropped their 9th Annual State of Smart Manufacturing Report, and it’s got some spicy insights about how tech is shaking things up in the manufacturing world.
The Big Challenge: Finding Skilled Workers
Factories are struggling to find workers with the right skills. Attracting these skilled employees is the top problem for manufacturers. In fact, not having enough skilled workers is the fourth biggest external challenge they face. This was a huge issue in 2023 and it’s still a big deal now.
Investing in Smart Tech
To tackle this problem, manufacturers are investing more in smart technology. In 2024, they’re spending 30% of their operating budget on tech, up from 23% in 2023. The coolest part? They’re using tech like autonomous mobile robots (AMRs), industrial control systems, and manufacturing execution systems (MES) to make up for the worker shortage.
Robots and Cobots
AMRs and cobots (collaborative robots) are the new stars. Cobots work alongside humans, making the job easier and safer. They handle repetitive tasks, so workers can focus on more interesting stuff. These robots are designed to be super safe, with sensors that prevent accidents. It’s like having a helpful robot buddy at work!
Wearables and Augmented Reality
Factories are also getting a boost from wearable tech and augmented reality (AR). Imagine wearing a headset that shows you real-time info and instructions while you work. This tech helps workers get the job done faster and more accurately. Plus, it’s great for training new employees. With AR, experts can guide workers remotely, making sure everything runs smoothly.
Real-Life Success Stories
Take Mauser Packaging Solutions, for example. They used AMRs to transport goods, freeing up three workers for more important tasks. The result? A 600% boost in productivity. That’s right, 600%! It’s a clear win for automation.
The Future Is Bright
Manufacturers are gearing up for a future where humans and robots work side by side. As tech keeps evolving, we’ll see even more smart solutions in factories. Cobots, AMRs, and wearables will make work safer and more efficient, transforming how factories operate.
So, the next time you think about factories, picture a high-tech place where robots and humans work together to create amazing things. The future of manufacturing is here, and it’s looking pretty smart!
$2.8B DEAL SHAKES UP STEEL INDUSTRY
Cleveland-Cliffs Buys Stelco for $2.8B
On July 15, 2024, Cleveland-Cliffs, a steel giant from Ohio, announced it’s scooping up Canadian steelmaker Stelco Holdings for $2.8 billion (C$3.85 billion). This is Cliffs' big move after a failed attempt to buy U.S. Steel last year.
Why It Matters
Cliffs' CEO, Lourenco Goncalves, says this deal is smarter and cheaper than building a new steel mill in the U.S. from scratch. The United Steelworkers union is also on board, giving it a thumbs up.
The Deal
Cleveland-Cliffs is paying C$60 in cash and adding some of its own stock (0.454 shares) for each Stelco share. This adds up to C$70 per share, a big jump from Stelco’s C$37.36 closing price before the news.
Shareholder Impact
Once the deal closes later this year, Cliffs’ shareholders will control 95% of the combined company, leaving Stelco’s shareholders with just 5%. Despite the excitement, Cliffs’ shares dipped 3% in premarket trading.
Background
Last August, Cliffs tried to buy U.S. Steel for $7.3 billion, but U.S. Steel rejected it and went with a $14.9 billion merger with Japan’s Nippon Steel instead.
The Bottom Line
By buying Stelco, Cliffs is doubling down on flat-rolled steel, cutting costs, and adding two Ontario sites to its portfolio: Lake Erie Works and Hamilton Works.
Read on for some more industry shake-ups!
WHAT’S THE ROI
AI Is Cool, But What’s the ROI?
Let’s talk AI. Everyone's jumping on the AI train, but half the AI leaders out there are scratching their heads, wondering how to prove it’s worth the hype. A recent Gartner survey of over 700 IT leaders spills the tea.
The Struggle Is Real
Nearly half of those surveyed said figuring out the value of AI is a big hurdle. Finding skilled employees and trusting the tech are also top concerns. Even so, AI is everywhere—95% of these leaders say they’ve integrated AI into at least one business process. A quarter of them have it running across multiple areas.
Playing with AI
Ryan Kane from Soaring Towers helps companies use AI tools like Microsoft Copilot. He says many small businesses aren’t seeing the benefits yet because they don’t know how to use AI effectively. It’s like giving a chisel to someone who doesn’t know how to sculpt—they just don’t see the masterpiece potential.
Jumping the Gun
Stuart King of AnzenSage points out that many companies adopt AI without a clear purpose. They’re excited about the new tech but don’t know what problem it’s supposed to solve. King suggests finding a specific issue to address with AI first.
Real ROI Is Rare
King and Kane both agree: real ROI from AI is still elusive for many. Companies are more in love with the novelty than actual benefits. To see value, they need to learn how to use AI properly and integrate it into their processes thoughtfully.
Finding Success
Take CNH Industrial, a company that makes farming and construction equipment. They’re using AI to monitor equipment health, assist in code development, and even build autonomous tractors. Marc Kermisch, their digital officer, says they’re working hard to track the time and cost savings from AI, even asking developers to note the time saved manually.
The Path Forward
Gartner recommends that before diving into AI, companies should identify clear use cases and set measurable goals. Running small pilot programs can help iron out the kinks before going all in. This careful approach can help turn the AI hype into real, measurable success.
So, before you get too excited about AI, make sure you know what problem it’s solving and how you’ll measure its success. The future is bright, but let’s make sure we’re all seeing the light.
TOYOTA’S LEADERSHIP TIPS
Toyota’s Secrets to Spotting Future Leaders
Ever wondered what it takes to spot a future leader? Toyota Material Handling North America President and CEO Brett Wood has some insights. Speaking at the IndustryWeek Operations Leadership Summit, Wood shared his wisdom on building great teams. Spoiler: It’s all about the people.
Toyota’s Leadership Playbook
Wood kicked off by saying, “Making things is about making people.” He emphasized that strong leadership starts with a curious mind. “We love to hire people that just want to learn and ask a lot of questions,” he explained. If someone wants to explore different departments, he encourages openness with management.
Be Prepared
Wood can tell who’s prepped for a meeting and who’s winging it. Being organized is key. He loves seeing new hires who are ready and well-prepared.
Flexibility and Listening
Flexibility is another must. “When the opportunity comes up, they say, ‘I’ll try that,’” Wood said. Good listeners also stand out. It’s advice you see in every leadership book because it works. “Get your ‘spider senses’ out when you’re meeting someone for the first time,” Wood suggested.
Stand Out
Being different can make you memorable. Wood likes the first person in the office or the one who brings doughnuts. He shared a personal story about taking a risky move to get noticed by a company leader—and it worked out for him.
Patience and Resilience
Success isn’t a straight path. Wood’s career had many sideways moves. “A lateral move is sometimes even better than a promotion,” he said. These moves give you valuable experience.
Giving Back
At Toyota, everyone contributes to society. Employees get two paid days off annually to work on a charity. Factory workers can use their lunch breaks to help pack backpacks or blankets in the “community room.”
Positive Energy
Charisma matters. People remember how you made them feel. Wood believes in spreading positive energy. “Our future leaders better just be bouncing around the office saying, 'I'm so happy to be here,'” he said.
Elevator Speech
Have a quick pitch about yourself ready. “So, tell me about yourself.” This can make young professionals nervous, but Wood advises preparing and practicing it.
Appearance Counts
Dress for the job you want. There’s a time and place for jeans and hoodies, but it’s probably not Monday through Friday in the office.
Build Your Network
Lastly, your network is your net worth. Build connections inside and outside your industry. “I love to hire people learning ideas from other companies and industries,” Wood said.
So, if you’re looking to spot future leaders or become one yourself, take a page from Toyota’s playbook.
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