ONE BIG QUESTION
What’s
one big manufacturing trend
to watch in the coming year?
By Joe Gardyasz
Senior Staff Writer | Business Record
I believe that artificial intelligence (robots, cobots) is where it is at for manufactures. This technology sector is exploding at a very rapid pace, and if manufacturers don’t stay up on it they will be left behind and never be able to catch up.
Kevin Harberts
President and CEO
Kryton Engineered Metals, Cedar Falls
Although not new, 2020 will likely prove to be another year with a strong focus on sustainability. Gelita, as a world market leader in the production and marketing of collagen proteins, participates in a variety of industries from food and beverage to health and nutrition to pharmaceutical to animal nutrition to cleaning products and metalworking fluids. As such, we are exposed to the diverse demands from these dynamic sectors, but one thing remains constant: the demand for sustainably produced goods. ... Reducing energy consumption and improving CO2 balance now go hand in hand with product quality. Responsible manufacturers, like Gelita, have made sustainability an urgent priority. In the short to midterm, we are investing in state-of-the-art technical infrastructure and continuous improvements to exploit energy-saving potential. In the longer term, we are focused on innovative production processes and new manufacturing technologies.
Jeff Tolsma
vice president, human resources
Gelita USA, Sergeant Bluff
Hands down, we think the key growth area is still health care. We think the biggest trend in the coming year to watch for is a huge focus on the speed of clearance of new devices through the FDA. Recent changes are encouraging, and these, when finalized and fully implemented, will significantly improve the time from product conceptualization to market release and increase competition, which will reduce costs. This will not only allow innovative and critical drug clearances faster but also devices and products that in our opinion are greatly needed in the world today.
Mark Darrah
CEO
Athena GTX, Johnston
With rising material prices, uncertainty around tariffs and a tight labor market, continuous improvement initiatives and automation projects will be focus areas in the coming year. This will help alleviate some uncertainty.
Craig Kirchner
president
Dexter Laundry Inc., Fairfield
Changes in food. How you get it. What you know about it. And healthy options. There will be more pickup and delivery to your home. You will know more about the food, such as where it came from and the nutrients. Healthy choices will expand, such as non-GMO, organic or now more vegetarian options with “Meatless Meats.”
Kevin Kacere
president and CEO
Insta-Pro International, Urbandale
We are continuing to monitor the level of automation and connectivity in the farm and commercial markets. With labor scarcity being an all-too-familiar reality — farming of the future will have no choice but to leverage technology in the forms of data acquisition and site automation.
Matt Koch
senior electrical engineer
Sukup Manufacturing, Sheffield
Immigration’s new policies and the impact on our current labor shortage. Additionally, a tremendous shortage of skilled trade staff. At our company, nationwide, we currently have around 2,000 employees with a shortage of an
additional 150 employees.
Reza Kargarzadeh
president and CEO
Engineered Plastic Components Inc., West Des Moines
Small and midsize companies selling to larger companies to help control their cost.
Kevin Alstott
CEO
C&S Products Co. Inc., Fort Dodge
Augmented reality for workforce training. Innovative solutions are emerging to address the industry’s workforce shortage. Recently, augmented reality has been used successfully to reduce the time to production for new employees. AR does this by merging digital images with the employee’s real-world surroundings to give the employee step-by-step moving visual instruction on how to accomplish a task in real time. AR-assisted training allows employees to become proficient at their position 40% to 60% faster. Look for AR solutions to create efficiencies in employee training, equipment servicing and customer service.
Denny Fisher
chief client executive officer
ACS Ltd., Des Moines
New technology advancements in the industries we manufacture for provide opportunities for our company to continue to innovate and differentiate. Technology enhancements in our product are positively impacting our workforce by giving new opportunities to all employees to learn and develop.
Jeremy Wild
chief financial officer
New Leader Manufacturing, Cedar Rapids
What’s a Disruptor the manufacturing
industry Should be watching 10 years from now?
The buzz everywhere now is “augmented reality,” and putting AR into eyeglasses and perhaps someday even into a contact lens is a key area to watch. Enroute to this idea is the transition to highly miniaturized embedded medical monitoring systems onto eyeglasses and wristwatches and possibly even under our skin or inside our bodies. These systems will read vital signs and bloodwork from under the skin much the same way as the pacemaker and automatic defibrillator market took off years ago and the blood glucose readers work today. These encrypted and embedded systems will transmit 24/7 to our smartphones and AR glasses, and on to health care providers for the most critical patients, and also start transitioning the smart wearables market to an “embedded medical market.”
Mark Darrah
CEO
Athena GTX, Johnston
The largest disruptor to the industry will be cradle to grave data analytics and fully autonomous operations of crop cycles and products. Currently you can monitor many products from farm to fork. Data traceability will become a major factor in the world grain markets. Fully automated sites will begin to become available and begin to reduce ROI cycles — thus creating massive opportunities for manufacturers.
Matt Koch
senior electrical engineer
Sukup Manufacturing, Sheffield
Digitalization. Again, although not new, digitalization is disrupting – and will continue to disrupt – manufacturing environments at increasing rates and with exponentially increasing impact. That said, if we as manufacturers can harness the power of digitalization, we can use it to positively influence sustainability through reduced consumption of resources. As another benefit, digital technology can also greatly improve employees’ work environments.
Jeff Tolsma
vice president, human resources
Gelita USA, Sergeant Bluff
Transportation. How you move around with driverless cars to how things are transported through the use of drones and driverless trucks.
Kevin Kacere
president and CEO
Insta-Pro International, Urbandale
Maturation of artificial intelligence. Right now, artificial intelligence is taking center stage as a new and developing technology. In 10 years, AI will no longer be looked at as new and revolutionary. In 10 years, we’ll be looking at how to squeeze more out of AI as it reaches maturity in the technology life cycle. How the maturation of AI will affect the industry, and therefore operations across the board, will be an interesting challenge. At that stage, AI will no longer provide a progressive, competitive edge but it will be looked at as a “must-have” for organizations to survive. Organizations that can truly integrate it into their operations and meticulously hone its abilities will rise to the top.
Denny Fisher
chief client executive officer
ACS Ltd., Des Moines
The changes in technology will impact how we do business and how we remain competitive. Our workforce will look dramatically different in 10 years, and we will need to adapt to be able to develop new skills in our existing workforce and develop new onboarding and recruiting programs.
Jeremy Wild
chief financial officer
New Leader Manufacturing, Cedar Rapids
Potential inflation plus other items such as geopolitical positions taken by our current two-party political system.
Reza Kargarzadeh,
president and CEO
Engineered Plastic Components Inc., West Des Moines
More government regulations and taxes, which will increase the cost of operation.
Kevin Alstott
CEO
C&S Products Co. Inc., Fort Dodge
Hard to say as fast as things are changing, but again, artificial intelligence is a major disrupter. I heard a statistic that by 2030, 60% of the manufacturing would be done by AI.
Kevin Harberts
president and CEO
Kryton Engineered Metals, Cedar Falls
Transportation is a significant challenge for many industries right now. Lack of workforce, high costs of fuels, regulatory climate, environmental impact and geopolitical fighting are just a few of the highlights. Changes in technology could really begin to chip away at some of these problems. Autonomous vehicles, truck platooning and drones are likely to be the first wave of solutions. Early adopters that look to incorporate these technologies into their workflows will likely take an edge over their competition.
Gabe Glynn
founder
MakuSafe, Des Moines
As the global economy continues to grow, we expect to see an increase in demand for certain raw materials. If those materials become scarce, manufacturers will turn to alternative components or materials. There will also be a rise in quality, reliable, cost-effective suppliers.
Craig Kirchner
president
Dexter Laundry Inc., Fairfield
What’s the outlook for global trade
In your industry?
In the ag processing equipment segment, the outlook is good. Population growth is higher in these international markets, and the growth of the middle class is higher in these markets, creating the need for more and better food. Assuming we can open up markets, reduce trade barriers such as tariffs, and keep the value of the dollar in check, the global markets will only get better.
Kevin Kacere
president and CEO
Insta-Pro International, Urbandale
There are great opportunities, and we foresee additional increases in this area as demand for U.S.-made products is at an all-time high and we project an increase for the next several years.
Reza Kargarzadeh
president and CEO
Engineered Plastic Components Inc., West Des Moines
As Gelita is producing high-quality ingredients for food, health and nutrition, and pharmaceutical industries, global trade will continue to be important – as it has been for years – to Gelita’s U.S. production efforts. Naturally, in this period of heightened trade war discussions, Gelita actively monitors policy decisions to mitigate the risks to its global business.
Jeff Tolsma
vice president, human resources
Gelita USA, Sergeant Bluff
Exceptionally good. Global terrorism, weather-induced storm impacts, natural disasters and other mass-injury scenarios are not going away. For us, in the first-responder markets, both government and civilian markets not only domestically but now globally are exploding. Wireless connectivity of devices to smartphones and tablets as an enabling factor in these scenarios is huge right now. There are nagging regulations and import issues and shipping concerns (possible trade wars and sanctions), but overall there is no shortage of customers interested in buying our products and no shortage of suppliers willing to ship to us. As the internet blossoms more and more, our global speed of connectivity has opened up a whole new informed customer base.
Mark Darrah
CEO
Athena GTX, Johnston
Questionable.
Kevin Alstott
CEO
C&S Products Co. Inc., Fort Dodge
We expect significant opportunities to expand globally. We have taken proactive steps to position ourselves to be leaders in the global markets that our customers are growing in, by building out infrastructure, changing process and procedure, and an increased focus on sustainability.
Jeremy Wild
chief financial officer
New Leader Manufacturing, Cedar Rapids
Demand for laundry is typically stable, but we are impacted by regulations that vary from country to country as well as uncertainty around pricing, notably currency fluctuations and tariffs.
Craig Kirchner
president
Dexter Laundry Inc., Fairfield
For us, it is very hard to compete globally and we honestly cannot unless we embrace AI. My labor costs in the U.S. are extremely high compared to other countries.
Kevin Harberts
president and CEO
Kryton Engineered Metals, Cedar Falls
What has been the most effective way your company has addressed the work shortage?
At our company we have learned to use more automation/robotics to overcome the labor shortage. Additionally, we have had to run overtime to ensure customer orders are met.
Reza Kargarzadeh
president and CEO
Engineered Plastic Components Inc., West Des Moines
We know we have to recruit the best candidates earlier. These people will have many offers, and we simply want to be one of those. It has been increasingly difficult to find experienced good people and especially electrical, mechanical and bioengineers in the last few years. The significance of what we call “head hunters” by companies brokering job placements is huge. This is even more significant for a small business like Athena who serves primarily the government, because logically we cannot match salaries some of our best engineers that decide to leave are being offered. To counter this raiding, we have been increasing our focus on student recruitments earlier in the academic career, exposing selected interns to the idea of joining our team upon graduation. We also stay in touch with interns that chose to go elsewhere or left the state and always look at recruiting them back to Iowa. This enticement involves a mixture of small-business advantages such as better access to upper management, great jobs doing valuable next-generation developments, a leadership-focused team, a strong learning environment, high levels of engagement in a team and a great culture to begin or enhance one’s career.
Mark Darrah
CEO
Athena GTX, Johnston
Gelita has a solid reputation as an employer of choice in the communities in which we operate. To further capitalize on that “brand,” we have taken steps to more actively and visibly demonstrate our commitment and care to those communities. In addition, we have taken steps to be more proactive in our overall recruitment strategies. Through those initiatives, we have become more strategic in our hiring and onboarding practices. Furthermore, it has helped us become less reactionary and allowed us to bring greater clarity on the skill sets and abilities and capacities of the persons we are seeking in order for us to meet the business needs of today and in the future.
Jeff Tolsma
vice president, human resources
Gelita USA, Sergeant Bluff
We are focused on continuously improving our onboarding and training programs to keep good labor. We also offer competitive wages and are always recruiting the right talent.
Craig Kirchner
president
Dexter Laundry Inc., Fairfield
Training, training, training. … We are cross training almost daily and almost every employee. Culture is another item that we are using to attract the younger generations. Flexibility on many things. We pay a referral bonus for referrals.
Kevin Harberts
president and CEO
Kryton Engineered Metals, Cedar Falls
Automation, teamwork, engaging our employees.
Kevin Alstott
CEO
C&S Products Co. Inc., Fort Dodge
First of all, we strive to be the employer of choice and tirelessly work to provide a culture where employees can be engaged in our business and thrive professionally. Secondly, we are proactively working with educational institutions from elementary schools to colleges to expose the next generation to the exciting things happening in manufacturing.
Jeremy Wild
chief financial officer
New Leader Manufacturing, Cedar Rapids
Sukup employs over 700 people worldwide, and more than 600 in Sheffield. The labor market here is completely saturated, and we invest time and resources into process improvement, automated manufacturing, new equipment, new technology, and R&D. While these things absolutely help improve throughput, we are still in desperate need of skilled and unskilled labor for a variety of jobs.
Matt Koch
senior electrical engineer
Sukup Manufacturing, Sheffield
Two things: 1. Continuing to focus on employee satisfaction and doing the little things to create an environment where they truly enjoy their work. 2. Outsourcing work to others who may be more efficient for us in certain work streams.
Kevin Kacere
president and CEO
Insta-Pro International, Urbandale
outside of workforce, what’s the biggest challenge in the manufacturing industry?
Speed. Nothing new here for a small manufacturing business. Speed impacts our cash flow. Customers are wanting earlier and earlier delivery, they want more for their money, but then they are stretching out from negotiated terms of payment and are increasingly paying later and later. This is done while suppliers are offering less lenient terms on critical components. The cost of this situation hits cash flow and the bottom line. It requires attention to detail and a more structured follow-up team — all of that costs businesses money as well. Our business is up substantially, but the cost of doing business seems to be increasing more rapidly today, which is driving prices up while consumers are demanding reduced prices and faster services.
Mark Darrah
CEO
Athena GTX, Johnston
For me and Kryton, the biggest issue outside of workforce is capital to expand. Margins are very slim and we have to borrow a lot of money sometimes to get things to work. The other item very hard to deal with is the escalating health care premiums that we are having to take, 20%-plus increase yearly. I can’t do that much longer. … Something will have to give.
Kevin Harberts
president and CEO
Kryton Engineered Metals, Cedar Falls
Finding the right supply chain partners that can deliver on time, at a good quality, and the right price.
Craig Kirchner
president
Dexter Laundry Inc., Fairfield
Cost controls. From steel cost increases due to the tariffs to continuing medical cost increases. These increases are hitting us with greater percentage increases than we can offset in price increases and stay competitive on the global stage. This negatively impacts margins.
Kevin Kacere
president and CEO
Insta-Pro International, Urbandale
Cybersecurity of IoT and PLC devices. An often-overlooked challenge in manufacturing is cybersecurity. Though an organization may have good cybersecurity policies and procedures for their servers and emails, they may forget about the not-so-obvious vulnerabilities in their network. The addition of internet-enabled devices (IoT devices), internet-connected manufacturing equipment, and smart programmable logic controllers (PLCs) into manufacturing plants create many points of entry for cybercriminals. Ensuring these assets are included in the company’s cybersecurity strategy are vitally important. Without the proper cybersecurity mitigation strategies in place, criminals can sabotage equipment programs and instructions. Example scenarios include changing the temperature at which chemicals are mixed or adjusting the dimensions for a product produced by a lathe or CNC machine. In each of these scenarios, the damage could be hidden until the final product is complete or until the raw materials have been utilized. Each of these could cost the company potentially thousands if not millions of dollars in defective goods.
Denny Fisher
chief client executive officer
ACS Ltd., Des Moines
There are many answers to this question, all of which have valid points. Level playing fields both politically and regulatory-wise play a huge part. Another big challenge is related to the commoditization of products. We, as OEMs, need to do a better job marketing and leveraging made in Iowa/USA. The commoditization and stagnation of these products leads to ever-eroding margins that, if uncorrected, spell disaster for the long-term viability of manufacturers.
Matt Koch
senior electrical engineer
Sukup Manufacturing
Lack of true leadership and understanding of how their actions affect all of us.
Kevin Alstott
CEO
C&S Products Co. Inc., Fort Dodge
Controlling all other expenses as related to health care, raw materials and cost of equipment.
Reza Kargarzadeh
president and CEO
Engineered Plastic Components Inc., West Des Moines
To meet performance goals and stay ahead of competition, companies need to continue to reinvent, innovate and transform. The ability to think big and to see around corners is necessary to be able to pivot and sustain
business growth.
Jeremy Wild
chief financial officer
New Leader Manufacturing, Cedar Rapids
Innovation and individualization. Every day the world keeps moving faster due to technology and innovation. In response, we have to learn to move and be as nimble as the marketplace. On top of that, “one size fits all” doesn’t cut it anymore. As such, we also have to develop the capacity and ability to meet the changing and evolving needs of everyone in that marketplace.
Jeff Tolsma
vice president, human resources
Gelita USA, Sergeant Bluff