What The Infrastructure Bill Means For Manufacturing

U.S. manufacturers will soon have many new opportunities with the passage of The $1.2 Trillion Infrastructure Bill. It won’t always be simple, but it will be lucrative. That’s because of bureaucracy and regulations. However, these challenges will be worth it.

The bill’s provisions include funding allocations for $89.9 billion for public transit improvements, $65 billion for better internet connectivity access, and funding for 500,000 electric car charging stations. This could help address capturing “Deserts,” as David Zrostlik (president of Stellar Industries) recently stated in the Wall Street Journal.

These bills have far-reaching consequences. Here are four critical lessons for manufacturers.

Prepare for a Flood in Demand (Particularly within a Few Sectors).–With Risk Of Inflation

The infrastructure bill is hugely beneficial for manufacturers. But inflation, which is very real, could make it all harmful. Either that or the chance the feds raise interest rates could impose a limit on spending and take the shine off the apple.

Despite this inherent risk, there is still the possibility that large swathes of the manufacturing industry will see substantial opportunity. “Having trillions in additional spending in our economy is likely to be a positive thing for everyone in our supply chain, suppliers and manufacturers, to those in shipping,” stated Ben Johnston (chief operating officer at Kapitus) in Design News. The bill encourages domestic Manufacturing and procurement.

The bill is primarily focused on improving passenger, freight, and cargo transportation. Therefore, steel and material suppliers could see heavy activity and companies that produce materials for rail, trains, bridges, and other related equipment. Demand will also be felt by manufacturers of products supporting 5G infrastructure and electric vehicle stations.

The bill will have consequences for both the supply chain and hiring. However, it is worth mentioning that manufacturers should focus their preparation on internal processes. According to Bass Khoury (director of operations excellence at MAGNET), creating and maintaining an efficient operation “is the only way we can win,” he said. There is no doubt that companies will get more products out of their doors quicker and with less waste. This is true in both the short and long term.

Consider Hiring Implications that Could Boost Equity

Manufacturers are searching for ways to relieve the stress on their already overworked workforce, with demand increasing and talent scarce. One bright spot is that the infrastructure bill will provide hundreds and millions of dollars to workforce training in clean buildings, electric grids, and industrial sectors like metal or electrical equipment.

However, short-term operators will need to remain calm, prioritize efficiency and pay premiums for premium talent. Some glimmers offer hope for the longer term.

As a society, we are undergoing a deep review of our workplaces, which has resulted in increased wage pressures and talent shortages that we have never seen before. There’s a silver lining: Many manufacturers have to rethink how they pay and facilitate their careers. Our industry can be more attractive to young talent as we adjust our jiggers to compete with Amazon’s $18/hour and Target’s free tuition.

So how can we attract the best talent? Investments in transportation infrastructure could allow us to access talent pools from which we are too often excluded. If public transit strengthens routes from cities to largely suburban plants, we can begin to fill our talent gap while creating more equity within the industry. ManufacturingManufacturing is almost 80% black. More fantastic transportation options could make it possible to transport people from different inner-city communities to factories at the city’s outskirts.

Supply Chain Relief

The infrastructure bill provides $17 billion to rebuild and reconstruct port infrastructure and waterways. Manufacturers are well aware that this money is long overdue. We hope that, with what we have seen over the years as cracks in the supply chains emerge, funding will bring about the desired outcome of reducing disruptions and bottlenecks that led to inflation.

The bill could have an additional impact, encouraging reshoring. Johnston wrote Design News: “Supply chains are stretched for two years now. Manufacturers, suppliers, and wholesalers want to reduce these supply chains.”

Although relief may be on the horizon, and it appears that there is some, it is still likely to be far away from the coast. It is essential to be thoughtful and kind to your supplier relationships during this ongoing disruption. It would suppose if you thought twice before you got too hard. If you ask for a lower cost, your supplier may agree with you. This could lead to delays. Instead, treat suppliers as true partners.

Toby Bielenberg was the executive vice-president of operations at National Safety Apparel. We’re working closely with them to understand their challenges better so that we can adjust our plans accordingly. Our suppliers will be more cooperative with us because of these relationships to help us support our needs if things go sideways.

Industry 4.0 Will Be Vital

Finally, technology is the last piece of the puzzle. The infrastructure bill may facilitate the next step in Manufacturing’sManufacturing’s strong trend toward interconnectivity automation and take Industry 4.0 to a another level.

It is essential that we aggressively move toward these advanced technologies to keep up with demand and reap its full benefits. My message to you: Invest now, use automation, and reap the rewards in the future. The only process to win this war is to actively invest in Industry4.0 technology to last the flood of opportunity.

Industry 4.0 is likely to be supported by more vital connectivity thanks to broadband infrastructure investments. Manufacturers have to be willing to invest in transformation. We will profit from the many opportunities this bill offers for our industry.

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Adam Collins
Adam writes about technology, business and economics. With master's degree in Economics, he's presented six papers in international conferences. As a solivagant in the constant state of fernweh, curiosity is the main weapon in his arsenal.

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