Ten Takeaways from The ‘Future Wisconsin Summit’ to Energize Strategy in 2024
The Wisconsin Manufacturers & Commerce (WMC) is the “Chamber of Commerce” for the state of Wisconsin, serving 3800 member companies.
On December 5th, The WMC hosted “Future Wisconsin Summit” where manufacturing leaders from around the state gathered at Madison’s Monona Terrace Convention Center.
The speaker lineup included top brass from Green Bay Packaging, ATI Forged Products, Cushman & Wakefield, Gordon Flesch Company, Medsense Health, Landmark Development, Charlotte Pipe & Foundry (acquired Neenah Enterprises), Alliant Energy, and Teel Plastics.
Even if you live outside of Wisconsin, what we heard in Madison echoes patterns we’re hearing from CLA clients nationwide.
Top sound bytes from the Future Wisconsin Summit included:
1. “We’re out of destocking mode.”
Coming out of pandemic, there was a surge in demand. Currently “we’re out of the destocking mode” in the aftermath of customers bulking up on inventory vs. fear of being out. Ordering patterns now feel more stable.
2. “Price increases are the new normal.”
Raw material costs continue rise, driven by inflation. All speakers noted price increases from all main suppliers over the past 18 months.
One manufacturer has long term, 10-year agreements that had to be opened back up and re-negotiated. Customers naturally were upset but accommodated.
Biggest inflationary pressure is on labor and power.
Capex costs are significant and resulting in a 10-12% escalation.
3. “If purchasing managers are tight at home they will be tight at work.”
Consumer debt is rising. Will people continue to buy? Eventually consumers will slow spending.
Concerns over the election, China, slower growth in US GDP – were all noted. China controls 98% of graphite supply used in batteries. Battery recycling and access to minerals are needed, as well as build out of US energy infrastructure and supply chain.
While we complain about labor and generational differences, we have great people and we need to work harder with coaching and mentoring. From 2010 until recently we’ve had great times, low interest rates. Young people have not seen tough conditions and don’t know what to expect. Challenges are normal.
4. “There are bright spots.”
Opportunities in Asia are not decreasing but changing. Export activity is shifting from China to SE Asia. Freight and fuel surcharge prices are coming down.
5. “Nothing focuses attention on automation like economic pressure.”
This year’s capex is the same as last year but we benefit less due to inflation. Inflationary pressures in labor and capex require offset with automation and productivity improvements.
One manufacturer has invested $100M in automation over the past 5-6 years. In the past, could run 1 person 1 machine. Thanks to automated changeovers, we can now run 10 machines with 3 people. Continuous improvement, training, and AI or “big data,” help ratchet up efficiencies.
Automation may cause fear about jobs. Start with jobs that people don’t want to do. That frees up time for jobs they like to do. (CLA can help with that.)
With automation comes heightened need for cyber security. Make sure you have a great 3rd party resource who knows this space and keeps up with the pace of change. (CLA can help with that too.)
6. “Pumping the brakes to focus on culture.”
A steady stream of acquisitions stressed one distributor with a lot to integrate.
Back to work in summer of 2021 was a success because people didn’t like being “always on” at home. Work at home = work all the time.
Retreats, social outings, corn hole tournaments, and executive leaders cleaning off staff cars after a huge snowstorm were creative ways of finding balance.
One manufacturer hosts “skip level meetings” as an ideal mill for continuous improvements.
How do you know when you’re winning? When staff recommends your company to friends and family. One manufacturer adjusted wages to market and added bonuses, along with dialogue around total comp to drive down turnover with success.
7. “Defense and aerospace spending is up.”
Conflicts around the world will drive demand. One manufacturer is expecting another 20% related growth next year, and at this time is quoting a 1 year lead time on parts. OEMs during pandemic weren’t spending on spares, they are now.
8. “Diversification is key.”
Success this year was about agility to shift markets and serve them all. When industrial clients weren’t buying, we shifted our attention to K-12.
9. “Location location location for new capacity.”
Manufacturing grows when you have a predictable, stable energy supply. Offshoring happened when gas prices shot up; people had to offshore to make money. Energy supply (breakers, switch gear, transformers) is an enabler and competitive advantage. It takes about five years to build capacity.
There is a beauty pageant underway by state, and the “battery belt” (GA, SC, IN, TN, OH) has gained a lot of ground. A big competitive advantage for Wisconsin is access to water.
10. “Data can either be a flashlight or a sword.”
73% of employers do not believe students graduating from K-12 are prepared for the workforce. Goal is to swing a sword through red tape. Charter Schools are outperforming other state markets by a ratio of 2:1.
The Bottom Line
The pace of change will only increase and those who are agile are well positioned to succeed. Selling your value is key. Need help with energizing strategy and improving profitability in 2024? Let’s talk.
Jennifer Clement is an executive sales and marketing leader specializing in value creation for the C-suite. In her current role at CLA, Jennifer collaborates on strategy with executives of global manufacturing and distribution companies to accelerate results. Previously Jennifer served as a Global Business Acceleration Leader for Complete Manufacturing and Distribution (CMD). During her time with CMD, Jennifer lived and worked in Asia from 2015-2019. Prior to CMD, she spent 10 years in senior care technology. Jennifer started her career at Johnson Controls (JCI) and spent nine years in leadership roles; followed by five years at Rockwell Automation (ROK) leading c-suite strategy and marketing operations.
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