Whether it’s related to clean energy, the national formula shortage, the Inflation Reduction Act, the Industrial Policy bill, or countless other pressing manufacturing legislation, compliance and government affairs teams face a set of challenges all their own.
If this sounds familiar to you, you know you can’t afford to miss anything that might prove a threat or opportunity for your organization; from a changing workforce and monitoring a wide range of complex and rapidly changing issues, to driving alignment in your (often very large) organization. Here are some of the challenges, trends, and opportunities for those navigating the manufacturing industry.
Biggest Challenges to Prepare For
Finding Available Workers
As is the case in many industries, finding workers is a challenge in the manufacturing industry. Though employment numbers have increased in 2022 for manufacturing, “the ability to find workers remains a challenge as the size of the workforce shrunk by 131,000 … in January of 2022,” says Mike Johnston, vice president of government affairs at Michigan Manufacturers Association.
Retirement was the biggest cause of this reduction in the workforce, and FiscalNote’s State of Government Affairs survey showed that 55 percent of government affairs professionals in the manufacturing industry are age 55 or older, so even more retirements may be on the horizon. But the biggest reduction came from 195,000 fewer women in the industry, while the number of males in the workforce increased, according to Johnston.
In addition, burnout may be a contributing factor, as 40 percent of government affairs professionals in this industry say they have less energy and motivation than last year, and 35 percent have a negative outlook toward the future, our survey found.
Some states, including Michigan, have provided money to employers to implement training for existing and new employees to combat the worker shortage. “It is successful because employers are in the best position to decide how to train their workers,” says Johnston, referring to Michigan’s GoingPro Talent Fund, the state’s successful program to upskill existing workers and train new ones. In addition, Michigan allocated $6 million in state funding for a program that creates manufacturing career tech programs in high schools by providing equipment, designing curricula, and training the teachers.
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Supply Chain Shortages & Inflation
With unpredictable supply chains across industries and the chip shortage hitting the auto industry, manufacturers are left scrambling to get what they need. U.S. wages have increased, which presents another challenge for manufacturers struggling to keep up. Additionally, increased fuel costs impact the shipment and production of goods.
Monitoring Rapidly Evolving Manufacturing Policy Trends
More than 11,000 infrastructure-related bills have been introduced at the federal and state
level so far in 2022. Staying on top of fast-moving legislation and complying with regulations can be a challenge for the manufacturing industry. Between state rules and notices, city and county minutes and agendas, and federal regulatory dockets, there’s a lot to stay on top of to make sure you don’t miss any potential threats or opportunities for your organization.
The biggest challenge the majority of government affairs professionals in manufacturing face is a high volume of issues to monitor, with 65 percent of those surveyed saying this is their preeminent challenge. Most are following at least 10-20 public policy issues at a given time.
For those tasked with monitoring the risks and opportunities associated
with infrastructure policy, staying on top of rapidly developing issues at the local, state, federal, and global levels is crucial for building an effective government affairs and compliance strategy.
Trends & Opportunities to Watch
Industry 4.0 is changing the way companies manufacture, improve, and distribute their products, according to IBM. Manufacturers are integrating new technologies into their operations, including cloud computing and analytics, Internet of Things, and AI and machine learning, leading to “increased automation, predictive maintenance, self-optimization of process improvements and, above all, a new level of efficiencies and responsiveness to customers not previously possible,” IBM’s website states.
“The transition to industry 4.0 is moving increasingly fast, so you are well advised to keep up with your competition on creating new ways to compete,” Johnston advises. For instance, he predicts the transition from the internal combustion engine to electric vehicles will only be accelerated by industry 4.0.
Aligning Teams Across the Organization
Driving alignment within teams and across an organization is a great opportunity for any government affairs and compliance professional, and the manufacturing industry is no exception. Since 50 percent of government affairs professionals in manufacturing indicate their organization employs 1,000 or more people, keeping teams nimble is crucial so they can act quickly when the need arises.
3M’s government affairs team sets the gold standard for creating internal communication and alignment and enabling other departments to make the right decisions based on the right information, policy insights, and situational awareness. Using the right tools and technology helps them achieve this.
“In every country we operate, my colleagues are bringing this same data-driven government affairs strategy forward using data-centric tools like FiscalNote,” says Dr. John Pournoor, former director of 3M’s Government Affairs Center of Excellence. Access to this information has allowed for a data-rich approach and the ability to provide direct value to internal stakeholders, to customers, and to serve governments around the world.
“These tools are essential so we have our finger on the global pulse of public policy activities,” Pournoor says.
Nouryon also relies on an issues management platform for a unified workspace where various teams can get an overview of what’s happening and add their own pieces to the puzzle. For example, the government relations team can alert everyone when new bills are proposed affecting the organization's issues; public or media relations can post the various talking points for the media; legal can assess the risk and everyone can add contacts, meetings, and notes in one place on one platform.
The transition to one global platform was a strategic effort to make the team’s integrated communications vision a reality. “Now, almost on the hour, I can send out new instructions and everyone in the world working for me can look at their phone and see immediately what the new key messages are, or if we need to take new actions,” says Marcel Halma, Nouryon’s former director of integrated communications & global public affairs.
How to Keep Track of Legislation in the Manufacturing Industry
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