Behind the Headlines
Five key takeaways from IndEx 2019
Week of May 20, 2019
For over 500 high-level attendees — principals of private-equity firms, operating company executives, tech innovators, industry consultants, investment bankers and others — IndEx 2019 proved to be an unusually rewarding opportunity for leaders in the industrial middle market to share ideas, gain insights and make valuable connections.
For those not able to take part in this year’s event, which was held May 6-8 at the Miami Beach Convention Center, here are five key takeaways from the formal and informal sessions:
Takeaway #1: Technology not only is reshaping manufacturing; it’s transforming industrial sales.
Traditionally a capital-intensive business focused on creating products, industrial and manufacturing businesses increasingly are becoming providers of services that employ the company’s products. In a session led by Jim Lavelle, Managing Director, Co-Head of the Industrials group at the investment banking firm of Houlihan Lokey, panelists discussed how this business transformation — a result of the technology that is connecting supplier and customer, as well as transforming manufacturing itself — will require a new type of industrial sales and marketing effort, demanding different skills for those on the front line. The ability to close sales isn’t going away, but tomorrow’s salespeople will have to be capable of truly understanding the business challenges of their prospective customers and then be able to help devise service solutions.
Takeaway #2: Encourage workers to board the automation train.
Yes, automation will replace many jobs. But the retirement of the baby boom generation and the continuing health of the economy have created an environment where demand for workers far outstrips the supply. So, aided by technology, greater automation is coming, and much of it will replace repetitive, physically demanding jobs that many current workers themselves will be happy to see disappear. To best prepare workers for the new world of work, panelists at IndEx 2019 representing labor, company owners and tech experts, suggested an approach that acknowledges and communicates the necessity of greater automation, and then involves labor, capital, management and government in efforts to train and retrain workers of all ages to handle the new jobs.
Takeaway #3: Cybersecurity will only become an even bigger problem
If middle-market industrial companies thought their relative invisibility and obscurity protected them from cybercrime, those days are over, warned the many cybersecurity experts who spoke at IndEx 2019. As the internet of things (IoT) continues to connect all aspects of the supply chain, middle market companies are increasingly linked to large and small companies around the world, making them increasingly vulnerable to hackers seeking whatever they can steal from the company itself or from those in its network. From the experts, here are important ways to protect your company: Immediately perform software updates when notified by providers, conduct regular simulated phishing tests, limit access to system administrative functions, and enforce best-practices in password protection.
Takeaway #4: We’ve only seen the beginning of additive manufacturing
Just a short time ago it was a novelty. But additive manufacturing is now going mainstream and transforming new-product introductions, inventories and supply chains. Products manufactured through an additive process can be made more quickly, cheaply and much faster than through traditional production methods — and typically with much higher quality. Since the process encourages experimentation and innovation, look for companies that add and employ additive manufacturing to pull ahead of the competition.
Takeaway #5: Supply chain management is getting more difficult
Higher labor costs, higher raw material costs and higher freight costs are making the management of the supply chain more important, yet more challenging. Many companies have already taken the big steps to control costs, but what’s needed to be done next may not be so easy, said the supply chain management experts speaking at IndEx 2019. Look for even more attention to be paid to procurement, where investments produce a 450% return, according to the results of a study reported on by one of the conference panelists.