Last updated on January 19th, 2021 at 02:33 pm
Blake Moret has an optimistic outlook for manufacturing heading into 2021.
“I think it’s going to be a good year, let me just start there,” said Moret, chairman and chief executive officer of Rockwell Automation Inc.
The Milwaukee-based provider of industrial automation and digital transformation technology in November forecasted its sales would be up 6% to 9% in fiscal 2021 after a 5.5% decline in fiscal 2020.
Moret said the manufacturing sector had shown signs of recovery prior to the COVID-19 pandemic and he expects to see the recovery continue across a variety of industry verticals.
The continued growth of electric vehicles will help spur automotive manufacturing, demand for wireless and smart products will drive the semiconductor sector, food and beverage and life sciences will be boosted by continued consumer demand and interest in green technology and sustainability will fuel industries like water treatment, renewable energy and recycling, Moret said.
“I think that has hit a watershed moment,” he said of sustainability.
He also noted oil and gas and mining are showing some signs of recovery.
“They typically lag some of the other industries in terms of recovering by maybe half a year,” Moret said.
Even before the pandemic hit, global supply chains were facing disruption from the trade war between the U.S. and China and trade disputes with other countries. COVID-19 scrambled the flow of goods even more as borders shut down and normal methods of transportation were disrupted.
One result from all of this uncertainty is companies are building more resilience into their operations, Moret said.
A higher profile version of this is reshoring or onshoring, the idea that manufacturing previously done in Asia will come back to the United States. Moret said that is part of the equation, but companies are also looking to eliminate single points of failure in their supply chains by increasing the number of facilities that make parts or components.
In the case of Rockwell, the company is currently working to take a product previously only made in Singapore and develop the ability to make it in Cleveland. At the same time, Rockwell is developing the capability in Singapore to make a part that was previously only done in Cleveland.
“One of the things that’s happened in the last year is that the risks that previously didn’t rise to the level of funding in our enterprise risk mitigation plans are now being considered as ‘hey, it was unthinkable previously but it could happen,’” Moret said. “So, we’re making investments in those areas, because we know, for a variety of reasons, I can add, that the unthinkable can happen.”
Of course, even as companies try to plan for more risks and uncertainty, they still have to make choices about what to prioritize and direct more funding toward.
“It’s why management is still important and it’s why diversity of thought is really important,” Moret said, noting that a leadership team without sufficiently broad perspectives is going to have a tough time envisioning seemingly unthinkable events.
He also said manufacturers, often characterized as thoughtful or conservative when it comes to investments, need to become more comfortable acting without all of the answers, adding companies need to take calculated risks.
“Sometimes you’re going to be wrong and that doesn’t mean you’re bad,” Moret said. “You learn from that and keep going. There’s a saying within software about ‘failing fast’ and while some of your ideas absolutely have to work out … it’s not a stain on your record to have tried something, to have made good decisions but to be able to correct, admit that you needed to correct and to keep going. And that’s a cultural change that I think requires the infusion of new perspectives from outside your traditional workforce to come together.”
Moret will discuss these topics and others in more detail as part of the virtual 2021 BizTimes Economic Trends event on Jan. 28. The event is sponsored by Annex Wealth Management, BMO Harris Bank, Taureau Group and Vistage.
Click here for more information and to register for the free event.