Cisco Manufacturing Leaders

We're back!

November 04, 2020 Wes Sylvester Season 2 Episode 1
Cisco Manufacturing Leaders
We're back!
Chapters
0:50
Catching up: What's happened since the last episode?
5:31
COVID-19: How manufacturers are responding
10:09
Supply chain: Will manufacturers re-shore?
Cisco Manufacturing Leaders
We're back!
Nov 04, 2020 Season 2 Episode 1
Wes Sylvester

Manufacturing Leaders is back! A lot has changed since our last episode aired in March. As we re-launch the podcast, hear our take on the impacts of COVID-19, industry trends, and what’s next for manufacturing.

Interested in learning more? Read Wes' blog.

Show Notes Transcript Chapter Markers

Manufacturing Leaders is back! A lot has changed since our last episode aired in March. As we re-launch the podcast, hear our take on the impacts of COVID-19, industry trends, and what’s next for manufacturing.

Interested in learning more? Read Wes' blog.

Mara Fowler (host):

Hi guys! So, I am going to be the host for this Manufacturing Leaders Podcast episode. I'm, I am the Global Manufacturing Market Manager at Cisco, and today I have with me, Wes Sylvester.

Wes Sylvester (guest): 

Hey, Mara. Thanks. Good to be here. I'm Wes Sylvester. I lead our manufacturing and energy team here at Cisco.

Mara:

Awesome. Cool. So, yeah, we're launching this podcast and it's kind of crazy. The last episode I took a look, and it was back in March and we had the last episode go live March 11 to be exact, which can you just think back to March for a second, like, I mean, that was, I think, was it 7 months ago now? It feels like 7 years ago but how different the world was March? 

Wes:

Yeah. It feels like we just recorded the last podcast, but also feels so far away as far as the way the world has changed. So it's crazy.

Mara

Yeah, it was like the beginning of the all the bad at the beginning of the pandemic. It was when things really just first started, I feel like to kind of get that in the United States anyway for, and kind of just a second, all what was to come and in the coming months. So the world has changed. I mean, the good news is, that means, there's a lot for us to talk about lots of catch up on. 

Wes:

Yes. Yeah. It's considered a bit of a catch up here.

Mara

So yeah, so in the past 7 months, all that has happened is...a lot. When you think about it, in terms of how the pandemic has affected the manufacturing industry, it's been pretty drastic because, as we all know, at this point, and the pandemic first hit China very early on late in 2019 and China, being the manufacturing capital it is, when it was hit so hard, they ended up shutting down, just essentially all their manufacturing plants. Which caused a lot of pandemonium I think, just in the industry on a global scale.  And so, it's caused a lot of issues, and as the pandemic spread to other parts of the world, the pandemonium will brought with it spread to and when you think about it. And just from just looking at some stats here, it's kind of wild COVID-19 has accelerated this idea of digital muscle building pretty, pretty drastically. People were kind of, I think, making some of these changes are starting to make some of these changes to their manufacturing facilities, making sure all of their machines are connected to the network moving into cloud computing. There was a lot of changes that people were starting to make, but this is definitely accelerated. It I think by a lot.

Wes

Yeah, I totally agree. You know, it's interesting the I don't think anyone historically would have thought of maybe a lot of people have people who work in supply chain, but, you know, supply chains kind of this group in a closet that's like doing really complicated hard, uh, optimization of products and supplies and everything, and it's become front and center, and it's been really interesting for us because Cisco has historically won a lot of awards for our supply chain efforts and our supply chain resiliency and the way we manage our supply chain, and we have had just people coming out of the woodwork wanting to talk to us about our best practices. And candidly, we did have a lot of best practices that helped us during the pandemic, but also, we learned a lot during the pandemic as well that we're now trying to pass on to a lot of our partners and customers as manufacturers, because in the end, hey, we sell stuff too. And that stuff has to get made somewhere around the globe. And so, it's had an impact on us, and we are fortunate enough to have all the collaboration tools at our disposal to help solve some of those issues and so we're excited about the work we've done to help some of our partners and customers do the same.

Mara

Yeah, no, it's, it's actually kind of interesting. I'm just looking at a stat here about talking about supply chain resiliency because it's this has forced a lot of manufacturers to kind of rethink their supply chains just because if you're if you're a manufacturer that has something that was produced in, a country or an area that was particularly hard hit and it shut down all of a sudden you're without your suppliers, right? And so then you're kind of not able to fill these orders that creates a lot of just stress and a lot of issues, and so due to that, by 2021, half of manufacturers are going to have invested in supply chain resiliency which will cause a 15% increase in productivity due to this increase in investment.

Wes:

What's happening is that people are realizing that they need a little more flexibility and so a lot of the work we've been doing, it may have been triggered, or at least accelerated by some of the what's happening in the world today. But it's very applicable to whether I sit on the West Coast. What if there's an earthquake, how do we, how do we manage resiliency and continuity if there's a hurricane on the East Coast or up in the Gulf near where you're at it? How do we manage enhancing continuity if there's a union labor strike or some explosion at a, at an oil and gas facility how do we help keep businesses running and how do we keep people safe in those businesses? That's really the two big things that we've been spending a lot of time on. And that is a universal need, pandemic or not. And so, that's been interesting for us to have people come out and say yeah. Yeah, we got it, there's a pandemic, we have to fix some things, but we want to fix them long term. So, we can expand and contract this this solution, such that it fits lots of potential ups and downs in the market or crises that might exist.

Mara

Exactly, and I think it's really interesting and I was reading this report from that was talking about this post-COVID world. Right? And one of the concepts that I think a lot of manufacturers are looking into is this idea of a lights-out factory, where essentially kind of like you're mentioning, it's not just a pandemic, if there's a natural disaster or a strike or something similar to that. Right? Where it forces manufacturers to shut down and no downtime obviously means a lot of lost production, lost revenue. And so, they're looking into ways of trying to see if they can automate their systems and machines in order to keep running even if they're not there to keep them going, which really kind of changes the game a lot of ways if you can keep a factory running, regardless of what's going on outside of it.

Wes

Yeah, I agree. And, you know, it's interesting that the term lights-out manufacturing has been around the manufacturing industry for a long time, at least a decade. Probably maybe more, somebody would probably Wikipedia and Google it and correct me very quickly, but it's been around for a long time, but it's always been this, this panacea this dream world. The concept of behind the, the term lights out, meaning a person can actually walk out of the factory and turn the lights off and the factory continues to produce and run. That's a - that's a bold aspiration, but we're getting closer to it every day. But what we're seeing to what's happening right now is that that's going to be a second wave of the process that we're going through, because we've got to do right now is get people collaborating and get systems in place so that they can operate the way they have been operating, but more efficiently and more resiliently, because it tomorrow, they're not going to able to put in a bunch of robots. Right? That's going to be next year, next couple of years and so if they can set themselves up today with a system and a network and a design that allows them to get resilient today to flex up and down today, and have that system be ready to move to more automation or the panacea of full automation. Then they're releasing themselves up for success so it's like, building a road map to get to full automation. And maybe you'll never get there, but at a minimum today, you've got to become resilient.

Mara

Yeah, I love that you keep using to say that they keep using this word panacea. It’s awesome. I actually, I actually go look it up. So, for all of us who are listening here do not know what panacea is according to the Google it’s a solution, or remedy for all difficulties or diseases.

Wes

So, thank you, that makes me that makes me sound like a worse and so to go back and remove panacea, we'll go back and panacea, but apologies for that.

Mara

No! You are making me, and I think anybody who's listening today, have to - have to do a little bit of research and learn a little bit so much appreciated but yeah. It's kind of interesting what you're discussing when we talk about, right? So it's actually a concept or even this idea of supply chain resiliency, and going off the whole supply chain discussion let’ss dig down into that a little bit more. There's been a lot of discussion, even before the pandemic started really, talking about whether or not manufacturers are going to redesign their supply chain footprints, just to do to a lot of different headwinds that they're running into. Do you think that is going to be something that actually comes to fruition in the sense that, say you're this manufacturer that’s based in the US and you source some of your widgets from someplace like China or elsewhere throughout the world. Do you think that is something that's actually going to end up happening with manufacturing?

Wes

You know, maybe it dates me, but it's interesting to see history repeat itself because we go through, um, what is almost a boom and bust cycle when it comes to. Sole sourcing versus supplier diversification and spreading out your supply chain across multiple continents multiple countries, multiple suppliers. We go back and forth on this over decades. And I think we're in a position now where people are realizing that some sort of supply chain diversity is almost a necessity. So, there was a time when many large manufacturers to simplify their procurement systems and simplify their production said, you know what we're just going to buy all of our plastic from vendor, X, or at a minimum, maybe we'll buy all of our plastic from vendor X and vendor Y. Well, vendor X and vendor Y, sit on the same continent or in the same country and there's some sort of natural disaster. All of a sudden, your production is done if plastic is an important component in that example. And so I think people are realizing that they need a little bit of resiliency and a little bit more redundancy I guess I would call it. It's okay to have to manage four suppliers if managing four suppliers means that if an earthquake happens in Indonesia, you will be able to still produce your products and keep your business afloat. Because lots of businesses, there are a lot of manufacturing companies, small manufacturers especially, that are really struggling to ride out the, the current pandemic, because of supply chain issues. There are many businesses that run on a week-by-week basis to make payroll, to make revenue and so it's not like they just have all these coffers of money sitting that they can just shut everything down for a little while and wait for it to come back. That's a really hard thing for businesses to do. And so some of that - how much should we keep in stock and who should we have as suppliers and should we diversify as a supplier? It's all starting to make people change their minds a little bit, I think, and come back to a middle ground. The pendulum probably started on the left-hand side where it was “get as many suppliers as you can, have them compete, like crazy” to give you the lowest price and they realize, “boy, that's a lot of vendors to manage, a lot of relationships to manage, a lot of contracts to manage.” So, it swings all the way back the other way to one or two major suppliers that you went through a huge process and whittle down to one or two. I think we're swinging back towards the middle, where now, maybe it's three, four, five suppliers for critical components, and making sure that there's both a geographic and a size and a corporate diversity in the way you procure those things. Almost think of it the way we backup files on our - for our personal photos or whatever yeah, I might put those in in a cloud location, but a good practice is probably also to put them on a hard drive and maybe throw that in a safe deposit box somewhere so that you have a little bit of a second option, rather than just a one source place.

Mara

Do you think it's going to be just to kind of clarify, do you think that it's going to be more of kind of a hybrid between the two that it's not going to be completely on the one end where everything is being made produced and sold in one geographical area, or it's going to be the opposite of what it has been, this has been where you have supply chains that are spread throughout the world, and it's going to be some, some are kind of in the middle? 

Wes:

It's kind of like yeah, I think that's the most practical place for all the largest manufacturers. The largest manufacturers could maybe globally diversify all over the world, but if you're a small medium-sized manufacturer, which, by the way, there is a huge number of manufacturing companies out there with the wherewithal to actually do just pure global sourcing and peer permit procurement. It’s hard - it's hard to do. So, I think it is somewhere in the middle. The only exception I've got to that is if things can be real-time produced in small batches, and so there are manufacturers today that make some sort of a widget and if it's small, and it is maybe 3-D printing instead of having a single factory that produces millions of those widgets a month, they might decide to put 400 3D printers throughout the United States. And that part doesn't get produced on that 3D printer until someone places the order. But then it's produced locally and delivered within a day. And so, small cell production that is automated is probably the only thing that might change that. And that is like, pure diversity because then you're everywhere and you're more real-time and you can compete with people who are doing one day shipping for free.

Mara

Yeah, oh and that's something that brings up a really interesting concept. This idea of 3D printing because I almost think of it in the sense of, what computers used to be, like, in the fifties and sixties when they first were coming about they took up entire rooms, right? One of my favorite factoids is that the space shuttle that they took to the moon in the sixties - cell phones today have more computing power than what was in that entire space shuttle, which is just wild to think about. 

Wes:

Unbelievable. Yeah.

Mara

In the span of a few decades, how far we've come. I mean, we just have computing power, so readily available and I think that 3D printing is probably going to take a similar approach, or is going to go on a similar journey, in the sense that it is going to be, I feel like, as prices go down for it will probably become more democratized. So, my question for you is, do you think that - how do you think that that's going to impact manufacturing and is it going to take it kind of take off like how the Internet has for a lot of people where you don't have to rely on one source to get all your information. All of a sudden, it's available to you in a second, right? Do you think that people are going to start making their own you know, shoes or, I mean, maybe not computers, but, you know, things like that?

Wes:  

Yeah, I think that the trend we're seeing is that things that are single part components can be more easily done that way. And so, if you think about a lampshade, if I want a red lampshade, with diamonds not ribs, I could 3D print that and it's made of a single material. Maybe multiple colors, because a lot of 3D printers are starting to look at how they can do multiple colors now. But if I need a plastic gear that is one or ten gears that goes in a gearbox that then goes inside of a lawnmower that then gets shipped to a local hardware store to be sold. I don't know that we're going to be 3D printing that little that one initial little gear, because it's like, how many 3D printers within you have to have in a single location to print all the components that you build into an assembly? So long story short, I think if you're building one thing that will then immediately get used without it being assembled into something else, 3D printing is much more of an option. The other thing I'll say is that people forget that there are metal-based solutions for 3D printing selective laser centering is one of the technologies out there that allows you to basically 3D print with metal, which is awesome. And then powder metallurgy has become a huge thing. And that basically says you buy big bags of powder that when heated to the right temperature and put in the right molds, create metal parts. And so that allows a lot more localized production as well. So, interesting, very interesting technology. 

Mara

Yeah, so it's, it's I love that kind of stuff, it’s fascinating to me. Yeah. Okay, so jumping back into I think this topic that we all would rather pretend doesn't exist, but unfortunately, it still is very much part of the conversation, the pandemic, right? So, I just kind of wanted to shift this conversation back to the pandemic, and how it's kind of impacting manufacturing. So, just a little bit of stats on manufacturing and the pandemic effects on that industry. So, global manufacturing is projected to contract in 2020 by nearly 8% inquiry, according to a study done by Interact Analysis and also, global industrial production is projected to lose nearly $3 trillion dollars in value. This year global machinery production will shrink by over 10% and there are, even though we are starting to see a lot of places reopen, manufacturing is not expected to return to levels we saw in 2019 until 2022. So, it's definitely impacted things a lot. And you were kind of mentioning earlier, Wes, this idea of continuity and resiliency within manufacturing. So, would you be able to kind of dig into that a little bit more and explain what you meant by that?

Wes

Yeah, for me, it's about the ability to expand and contract and so like you mentioned, hey, if manufacturing is going to contract by 8% and I've got a giant factory with machines running 24/7 in that factory, how do I contract that business? Instead of just starting to shut machines down and send people home? How do we manage to shrink and grow and some of that is with remote access, and with remote workers, some of that is just getting the teams to collaborate a little better amongst supply chain. So, a lot of the downstream effects happen for manufacturers who make things that go to other manufacturers. So, if you think about being a major airline manufacturer, you buy stuff from a lot of other manufacturers. If you can have a better communication chain with them and better signals as to what your demand will be, then they can better adjust their demand to what we're seeing and what we thought what we've seen over the last few months is there's not a good communication between those parties. It's typically they place an order for a contract, they produce it, they send it to them and they pay them. It's not a, hey, we're seeing this, are you seeing that? And so a better collaboration between the teams has been a huge improvement for a couple of customers that we worked with, that have done this solution and tried to find solutions to this and the other thing is just remembering that, hey, yeah, manufacturing is not expected to return until 2022, but 2022 isn't that far away. And so, people have to figure out how not to make drastic decisions that shrink their business when in couple of years, we're going to need them to be back to normal production levels again. So, having flexibility is really what it's all about and that flexibility comes with people being able to communicate. Yes, machines matter. Yes, footprint matters. Yes, real estate matters. But in the end, people have to make good decisions based on data that they can then maybe use some to do some prediction of demand. So, it's it's a tough spot, but it's got some of the best people working on it. 

Mara

Awesome, yeah, and, I mean, you know, talking about the future of manufacturing, just a little bit more. So, it's nice to think about 2022 a few years down the road, when hopefully, we are still not having this conversation about the pandemic and that it's still, hopefully, it will not be affecting our lives as much as it is now at that point. So, when you talk about how some of these, this idea of flexibility has really kind of changed manufacturing, remote experts, workforce continuity, all of that. Do you think that these changes that are being implemented are they going to be temporary or do you think that they're here to stay?

Wes

I think the ability to do those things will be permanent because every client that I worked with sees that as a way to secure their business. And so, if you think about, we worked with a large dairy organization that has production facilities across the United States and they said we need to be able to track people as they come in and out of the facility to make sure that they're distanced then maybe monitor their equipment. Okay, that seems like a very pandemic/COVID-centric necessity, but we also want to have our engineers who might be where we're working from home right now be able to communicate on the floor with shop technicians and to do that. Cisco can help with all of the infrastructure and the wireless and all of the security that is needed for someone at home to be able to safely and securely communicate with someone on the shop floor. But then we partner with folks to bring in things like a headset to be able to let that technician on the shop floor work, hands free. Okay, that's a great short-term solution, but most of the companies we're working with are saying we want to keep doing that. Because we have engineers with great knowledge who are retiring, or who would, who are preferring and asking to work from home or if we want to bring in a technician with some specialty from another state, or another country, we can do that with this solution versus having to wait for them to arrive and have go to the expense of flying them on-site. Having delays, having cancellations, all of the things that happen when you try and bring someone on site, we can solve for that solution and make it more realistic because it can't just be a guy on his phone using FaceTime to try and interact, because he's only got so many hands and he can't annotate and point out what he's talking about. Webex can do all of those things with a hands-free solution. And so, I think it's going to I think people are going to keep those solutions in place. I think there's no reason not to. And it gives them a ton of flexibility, and in the end, it lowers their cost. So, they spend a little bit on some infrastructure now. But, how much does it cost? Every time you have to fly someone out and have production downtime? It’s huge.

Mara

Yeah, no, definitely. And that's--do you think, because there's certain industries are sub-industries within manufacturing, like food production is a great example, where it's a lot harder to socially distance, right? You know, just to do to the nature of the work. So, for those kinds of situations where, doing, kind of like remote working, or working from home isn't as feasible, how do you think that's going to impact those kinds of manufacturers?

Wes:

Yeah, I think that impacts more on the production system side. Right? So, if you think about a meat production facility, or let's do French fries, I'm in Washington state, just a, for everyone listening to the podcast, Washington state actually produces more potatoes per year than Idaho. Idaho just talks about it more. So, we have a lot of we have a lot of French fry production in the state here in Washington and so that requires people on-site. But there are still machines, and there are still devices that are required to run those facilities, even if you look at the most basic devices. So fun little fact: if you've ever ridden when going to a water park and ridden the log flume that concept is how potatoes enter a French fry plant and get move through the plant before they get cut and fried and put into bags for us to buy at the grocery store and three large motors run the water that runs that log. So, if one of those Motors goes down, that's a big issue, but the motors are huge. So, you don't keep a spare one sitting by because it's too big and it's too expensive. So, even the food production facilities are starting to look at technology as a way to monitor and predict what might happen. So, if they can put a vibration or noise sensor on that motor and predict that it's having a problem before it actually failed, then they can either get a technician out be other remote solution quickly, or they can get a new part on order before it actually fails keeping their production up. So, these solutions are for all types of production, and even those that are really heavily people dependent. There are some things that are critical infrastructure for them that they will want to be able to connect to and to monitor and manage.

Mara:

I hope, you know, that any time in the future, or whenever I go on one of those rides, like at an amusement park, I'm going to be forever thinking about French fry production. That's the wild. Just FYI, for all of you who, like what you've been hearing today, we are going to the lead meeting was me our Cisco manufacturing team we are going to we're putting on a manufacturing virtual summit that is going to be Monday November 9th and Tuesday, November 10th. It's going to be two days. First day is going to be - it's like a half day. So, it's going to be, I think, noon to 5 pm essentially. And then, I think 1-5 pm on Day, 2 and that's Eastern time. So, Day 1 is going to be talking about Business Agility and Resiliency and Day 2 is going to be talking about industrial security topics, or bringing in a ton of speakers, and not just Cisco speakers. We're bringing a lot of people from different companies. We're going to talk about customers and case studies, we’re also going to be teasing a new product launch solution, launch so be sure to tune into that on Day 2. So, yeah, so if you want more information about the agenda, the session speakers, all that good stuff, I'm going to be linking the description to our site page. So, please check it out. Pass it along to your friends, family, whoever, and check it out.

Wes: 

Yeah, hey, this is going to be a fun couple days and we're keeping it not an all-day thing. We know, as much as anybody that you can only sit in front of a laptop for so long, but we're going to have some super interesting engaging folks there. I think we're going to have someone from the FBI on Day 2. So, just keep an eye out for that, but the concept of industrial security is it's one of the most talked about things in the industry right now, and you can't do all of the things that you need to do with resiliency and agility without security as a baseline and so it's going to be a super interesting discussion, more conversational and with people from the industry talking about what they're doing and what they're seeing. So, yeah, tune in, should be fun.

Mara:

Yeah, no, so I'm glad you brought up the FBI speaker. We actually do have a Federal Agent who will be speaking about cyber security on Day 2. So, that session is from 1 - 2 PM Eastern on it's going to be Tuesday, November 10th. So be sure to check that out Day 1, we're going to have a great 2021 Manufacturing Trends Panel. There's going to be speakers from 3M, Pfizer. A lot of different people are coming to us to speak. So, yeah please check it out. And so with that, I'd like to thank you first, Wes for giving your time by talking to me today and listeners, just about catching up on everywhere or the manufacturing industry has, then have our we've come in the past several months and going forward, just for everyone's reference. So, this is every launch to the Manufacturing Leaders Podcasts. There'll be subsequent episodes that are going to be going live to the upcoming month. So, there's going to be focusing on security Dave Cronberger, there will also be a podcast that's going to be based around our Rockwell Automation Fair. That's going to be in November. So, keep an eye out for both of those and with that, let's thank everybody again for listening and we'll see you next time.

Wes: 

Thanks.

Catching up: What's happened since the last episode?
COVID-19: How manufacturers are responding
Supply chain: Will manufacturers re-shore?