The Exchanges

Q like. If there are certain countries that might be economic, Threats to one another. Different levels of manufacturing, like high value and low value items, how to find manufacturing partners, or how to get started with your own manufacturing, and much more. So if you like interviews where you learn something, then this is one for you. This is episode 213. Let's get to it. How is AI changing manufacturing?

A Yeah, it's changing manufacturing in a lot of ways. Um, you know, one of the things that we are seeing now is that even well-established processes, processes that maybe, um, has been around, uh, for a hundred plus years, um, we're able now to apply AI to and find those percentage improvements, um, that equate to millions of dollars. So pro, so Industries as diverse as steel making, which again has not changed in a long time. Aluminum making, um, glass making. These are well established processes, well understood, and well optimized equipment. Um, and yet we're able to introduce AI, um, to make those improvements. The other big area where AI is having an impact on manufacturing is in the fact that, uh, manufacturing right now is under, um, a lot of pressure Uh, from this huge labor shortage. So the last numbers I saw from the Bureau of Labor Statistics, um, was something like a half million person shortfall in the US, um, in unfilled manufacturing jobs. So you've got folks who are not moving into that, those industries, um, you know, to start their career. And then on the opposite side of that scale, you've got lots and lots of really experienced folks, the folks who really knew how to keep that plant running, who during COVID and after, um, have left in huge numbers. So all of those, and they're generally boomers, all of the, uh, boomer generation have started to retire and hav…

AI assessment note: “apply AI to and find those percentage improvements, um, that equate to millions of dollars.”

Q So if someone wanted to find a factory to partner with, what are some things they should be thinking about?

A Well, I think they need to be looking at, um, you know, and as far as the actual like capital side of it, and there's people who specialize in that. So that's not my area of expertise, but in terms of the actual operation of the factory, I think there's a couple key things. One is, is that you need to be talking to a manufacturer who is looking at the future of manufacturing. So digital transformation is one of those big buzzwords right now in our world, and it's about applying digitalization to make a transformative effect on the day-to-day operations of that plant. You're going to want to talk to a manufacturer who at least is looking at digital transformation, ask them what their initiatives are, ask them what their AI strategy is, Obviously go take a tour of some of these facilities and make sure that, um, that all that lines up. So they should be a forward thinking company. They should be focused on continuous improvement. Some of the best companies, the clients that I've worked with are clients that aren't just trying to keep things running, but they have allocated a portion of their budget every single year to continuous improvement. I worked with a great manufacturer. And they basically have crowdsourced continuous improvement. So literally anyone in the organization can fill out a continuous improvement idea. Um, and you know, there's, it's a stage gate, like there's m…

AI assessment note: “in terms of the actual operation of the factory, I think there's a couple key things.”

Q On a scale of one to 10, how optimistic are you that this mission will succeed? Meaning it's that it's possible to fix the problem before these people retire and the knowledge goes with them.

A Oh, uh, it, uh, I would say, I mean, we have to, we've got to figure out something, right? So, I mean, I'm probably around a seven, unfortunately. Um, it's, it's scary. Um, I, I think that it's gonna get worse before it gets better. I don't think that, you know, I live in this world of manufacturing and industrial, and so For me, I see it every day. I'm in these plants all the time. Um, I think that the general public is not quite aware of how bad the problem is right now. And, um, I think that it's gonna get worse before it gets better. I think, and I don't wish this, I don't want this to be the case, but I think that we're going to see, um, you know, maybe some kind of, um, major, um, failures in, uh, equipment or, you know, um, maybe I, I hope not, but maybe, um, you know, plants having, you know, explosions or major issues that way. Um, or I think that we may find that we start to see, um, stuff slipping into food products and things like that. I think that I, I, you know, and I don't have any insight inside information on the Boeing situation, but it does feel like the Boeing situation is very much, um, a consequence of this too. Um, it's, so it's gonna get worse before it gets better. I think AI Is a huge step towards helping to solve that problem. I think that the other thing that we're seeing, for better or for worse, Is it's prompting some of these companies that have …

AI assessment note: “I'm probably around a seven, unfortunately.”

Q have this kind of lights out factory, well, oh, can't the AI teach the robot to make another intelligent robot. And then if, if these robots start making more of each other, then, you know, humans are all going to die. I know it's a, it's a long extrapolation, but I feel like there's something, if humans are missing from the loop, Is it really going to make humanity better?

A So let's tease a couple of things apart there. So I think the first thing is this idea that we're not going to work. So, and I'm kind of a futurist. I'm an optimist, generally speaking about the future. So even when I say, you know, I'm not super optimistic about the next, you know, maybe two to five years long term, I think the arc will be that this will be positive for humanity. So I'm generally optimistic about the future. So. The first aspect is, is that humans aren't gonna work. I don't think that that's ever gonna be the case. I think that humans are kind of built to work. I think that we have kind of an inherent, um, Motivation to work, to create, to make things. Um, and so, uh, I think that what we will find is that we're going to move into higher value tasks. Um, and I think that we don't even really have to guess at that. If you look at the history, even just the history of manufacturing, um, that's been the case. So, um, you know, as the industrial revolution happened and as we moved from manual labor and, you know, people are making things with their hands and stuff like that on the, on the Plant floor, and we moved to automation. Um, it's not like we suddenly didn't have jobs for people to do. They moved into higher value tasks. The two examples I always like to give is, um, elevator operator. That was a real job. Someone's full-time job was to come in to a buildin…

AI assessment note: “long term, I think the arc will be that this will be positive for humanity.”

Q Is there anything that you feel you can talk about in this regard that might be helpful to people that are more in the earlier stages that I'm not asking?

A Yeah, I think that, um, uh, you know, like I said, finding a, a capable partner who knows how to kind of navigate you through, um, you know, this whole maze. If, if you're just coming into this for the first time, um, it's, uh, you know, there's, There's one of the things that we talk about in manufacturing is scale up. Um, so even if you've got something and you'll see this on shark tank and things like that, you know, where even if you've got a really good idea, um, that maybe even works in kind of small scale, um, there, there can sometimes be a big challenge in terms of scale up. And so, um, understanding that and finding a good partner to work with, um, that can help navigate that. I'd say generally speaking too, um, And this goes for any company. Um, you've got to be nimble. You've got to be agile. You've got to be ready to pivot. Um, you can't just throw all your eggs in one basket. You can't just, um, have one idea and think that that's, that's going to be enough. So, um, I had a, um, a client that, uh, makes aluminum and they've been making aluminum for, again, probably over a hundred years, long, long old company. And this was, now this was the mid 2000. And around that time, An interesting thing happened in the United States. We started to open up our electrical grids, um, deregulate them. And we started to create these open markets for electricity and anyone, if you…

AI assessment note: “finding a, a capable partner who knows how to kind of navigate you”

Q some responsibility to bring manufacturing back, uh, again, only high value things like, uh, uh, space tech, you know, three D printing tech, these kinds of high level, um, Do you think there's a threat from any other countries that could potentially become more dominant in manufacturing? Or if someone wanted to think about getting into manufacturing, what country they might want to look in, if not the U S

A yeah. So, I mean, I, I think that, um, so I'm very bullish on Manufacturing in general. I'm, I'm very bullish on kind of free trade between, between countries. Um, it's interesting when people, and not just you, I mean, you hear this a lot where people use terms like threat to describe manufacturing. It's in my mind that it doesn't really always equate, like a threat would be like a military threat or something like that. Um, I think that there is And I think we saw this over COVID. I think that there's a very complex and intricate supply chain that exists in the world that most people don't understand. Um, we saw the average person kind of wake up to that a little bit during COVID when those supply chains were disrupted. But I mean, you're going to have countries that make lower value parts that you just need a billion of these parts. And, but that's going to be an input to a later process that maybe happens here in the States. And then we're doing, you know, maybe final assembly, or we're doing more high value tasks associated with the, you know, um, you've got countries that are going to make, um, what are called commodity chemicals. So Kind of the low value chemicals, the base level chemicals, ammonia, and things like that. Um, and then that's going to be sent to a country that's going to do the higher, you know, make higher value specialty chemicals out of those base level…

AI assessment note: “people use terms like threat to describe manufacturing. It's in my mind that it doesn't”