Two New Lessons and Directions for Smart
Manufacturing in the United StatesMark Johnson (speaker)
Douglas Ramsey (contributor)

October 4, 2021

Change Since Last Year: 2020 to 2021

Lesson 1 / Manufacturing - (COVID) Supply Chains more Important than Ever
Lesson 2 / Environment – Climate Change is Accelerating
Partnerships – “Return” to a New Normal
Society – Positive Potential of Smart Manufacturing on People

COVID Impact on Us All
US DAILY
COVID CASES• COVID has affected us all,longer than we have may have expected or planned• Goods and Services still provided on a global basis
US CDC• Manufacturing has been generally resilientat the Level of the Individual Firm

US Manufacturing• Notable Challenges in Manufacturing
at the Level of Supply-Chain

Lesson 1: Covid & Manufacturing
ISM Production Index, 8/2021

Importance of Supply Chains• Four Important Categories of Supply Chain Failures:- Products with Long Lead-time Components(masks / specialized polypropylene)- Components with Broad Secondary Uses or Markets(semiconductors)- Mismatched Supply and Demand in Logistics(shipping container asymmetry)- Products with Use in Addressing Disruption (Covid)(vaccine precursors)• Supply Chain Failures Root Causes- Limited Availability of Underlying Resource- Specialization (short term) in making a Product- Uncertainty of Information about Future Demand/Supply

Lesson 1: Covid & Manufacturing

Information Makes All of Supply Chain Stronger• High Uncertainty about Key Resource Availability

Classic Bullwhip Effect• High Concern for Impact on Consumers if Product not Provided• Information Gaps, Uncertainty and Asymmetries are Key Drivers• Smart Manufacturing:
Level of Process to Level of Supply Chain Adds Visibility

Shortage Bullwhip Effect• Provide Data to Minimize “Bullwhip Effect” on Returns to Normal• Future Capability Needed to Improve Resilience of Global Society

Lesson 1: Covid & Manufacturing

Supply / Demand Information
is Needed in Context
by both Customers and SuppliersClimate Change is Accelerating• UN-IPCC Report: Climate Change Increasing Unsustainably• Must Act by 2050 to Avoid Irreversible Damage• In US: Young People increasingly Vocal about Climate
Rejoined COP/21 “Paris” Agreements• Three Major Sectors for Energy Related Emissions:Electricity Generation
Transportation
Industrial Sector

Lesson 2: Climate Change & ManufacturingIndustrial Sector can be “Hardest to Decarbonize”• For Society:Industry Sector Provides Goods(and Goods enabled services)
Industry Sector Provides Jobs
Industry Sector Emits CO2• Energy/CO2 Intensive Industrial Sector:
Fuel and Feedstock
Chemicals (plus Petroleum Refining)
Iron/SteelCement
Forest Products (pulp/paper)
Food Processing“Other” Industries

Lesson 2: Climate Change & Manufacturing

Smart Information for Low-Carbon and Product Impacts
Strategies for Addressing Carbon
1) ‘Inventing” New Process for Same ProductElectrify Processes with Green Electricity
Use Green Hydrogen as Chemical Reactant
Low-Cost Industrial Carbon Capture2) Decarbonize Critical “Feedstock”
New Low-Cost Resource
Alternate Low-Carbon Product at Lower CostCircularity
3) Existing Process with Highest Efficiency –“SMART MANUFACTURING”

Lesson 2: Climate Change & ManufacturingSupply Chain and Decarbonize are“Shared” and International Challenges• Understanding Source of Carbon in Manufacturing
Scope 1: Energy / Emissions at Manufacturing Location
Scope 2: Emissions Attributable to Energy Source
Scope 3: Emissions Attributable to “Embodied Energy” from Suppliers• Managing Scope 3 Emissions requires Information Exchange
between Facilities and Firms, With Potential Positive & Negative Impacts• Data and Methods Need to Be Standard, Secure, Attributable and Limited

Lesson 2: Climate Change & Manufacturing

Carbon & Energy Data

Shared Opportunities in Smart Manufacturing / I4.0

• Lesson 1: Covid Impacts on Supply Chains Highlights Need for Smart Information between All Firms, Globally• Lesson 2: Climate Change Impact of Carbon Emissions Highlights Need for Smart Information between All Firms• Shared Importance of SMART Information Between Advanced Global Trading Partners: Japan and US (and Germany)
Standards for Smart Information(Data, Context and Understanding)Tools for Smart Information Exchange
Knowledge by Our Human Talent / Workforce
Data Assurance and Security for Products

Lessons 1 & 2: Shared Solution Priority

Shared Interests:
Japan and US as Democratic Partners and Friends• Changes in Political Environment: Return to New Normal• Places for National Cooperation• COP26 / Scotland• G7• Quad Nations• JUCEP: Japan-US Clean Energy Partnership (July 2021)- Renewable Energy- Power Grid Modernization- Nuclear Energy- Decarbonization Technologies

SMART / Industry 4.0 Enables All Priority Areas

Example Area: Clean HydrogenBenefits to Our People and Societies• SMART Manufacturing:
Connecting Industry 4.0 to Society 5.0• Economic Growth• Cost Effective Goods/Services• Harmonious International Supply-Chains• Positive Climate Future• Equitable Jobs and Communities in Society
US: “Building Back Better”

Ref: CAO, Japan

Hopes for a Good Year Ahead• Formal Partnership between US and Japan on Smart Manufacturing / Industry 4.0• Alignment of Partnership with Other Partnerships: Germany and Japan• Focus on Issues of Shared Importance:

Standards and Protocols
Examples in Japan and US of Mutual Benefit
Workforce Education (best practice sharing)
Sustainability and Climate

Thank You

Mark Johnson
Clemson University, USA
majohn@clemson.edu