HPCC Conference

Gardner Carrick Senior Director The Manufacturing Institute March 28, 2012

Manufacturing’s Multiplier Effect

Manufacturing Information Agriculture, forestry, fishing, and hunting Construction Transportation and warehousing Professional and business services Educational services, health care, and social assistance Finance, insurance, real estate, rental, and leasing Retail trade Wholesale trade $0,0 $0,5 $1,0 $1,5

Economic Activity Generated by $1 of Sector GDP

Source: U.S. Bureau of Economic Analysis, 2007 Annual Input-Output Tables 2

The Public Supports Manufacturing

The Manufacturing Institute & Deloitte - September 2011 3

A Renaissance in Manufacturing?

 Over 400,000 jobs added in the last two years.

12000 11900 11800 11700  Major consulting firms issue reports predicting a return of manufacturing from Asia. 11600 11500 11400 Manufacturing Jobs in U.S. (000s) 4

Structural Cost of Manufacturing

 U.S. Manufacturers face a 20% cost burden over competitors from our largest trading partners.

40% 30% Structural Cost Burden For U.S. Manufacturers

31,6%

 Corporate tax rates make up over half that burden as other countries have reduced rates.

20% 10% 0%

22,4%

2003 2006

17,6%

2008

20,0%

2011 1997 2010 U.S.

40% 40% Canada Mexico 44% 31% 34% 30% The Manufacturing Institute & MAPI - October 2011 Japan 51% 40% China Germany 33% 57% 25% 29% U.K.

31% 28% Korea 30% 24% Taiwan France 25% 36% 17% 33% 5

Global Competitiveness Challenge: Disturbing Trends

The 2010 trade deficit for all manufactured goods was $565B; and for advanced technology products was $81B

Manufactured Goods U.S. Trade Balance Source: The Manufacturing Mandate, Unleashing a Dynamic Innovation Economy, Aug. 2010 The Association For Manufacturing Technology

Priorities to Improve Manufacturing Competitiveness

innovation Improve workforce Improve workforce competitiveness competitiveness Challenges 0% 20% Opportunities Percentage of votes for an option 40% 60%

Importance of Innovation

How important will having world-class manufacturing technologies be to your company's overall competitiveness in the next 5 years?

70% 60% 50% 40% 30% 20% 10% 0% Not at all important 0 1 Extremely important 2 3 4 5

Importance of Innovation Widely Recognized

    June 2010 Global Manufacturing Competitiveness Index;  Primary driver of competitiveness is “talent-driven innovation” June 2011 PCAST Report to the President on Ensuring American Leadership in Advanced Manufacturing:  “The United States is lagging behind in innovation in its manufacturing sector relative to high wage nations such as Germany and Japan” October 2011 Economist Intelligence Unit survey of senior executives from U.S. manufacturing firms  90% identify innovation as the key to long-term success January 2012 Dept. of Commerce report “The Competitiveness and Innovative Capacity of the United States”  “Innovation is the key driver of competitiveness, wage and job growth, and long term economic growth.”

Insufficient Emphasis on Maturing New Manufacturing Technology

Structural problem requires a

structural solution

Manufacturing Technology Innovation Best Practices

Industry,

•

NIST MEP Incremental

•

improvement Off the shelf

•

technology Short time horizon

•

Missing Middle Manufacturing technology innovation, maturation,

•

commercialization, insertion Medium time horizon

•

High impact

Basic Research/ Education

Universities, NSF Centers, Federal Labs

• •

High-risk research

•

Long time horizon Not focused on shop floor implementation Time to deployment

Many Innovation Models

           Fraunhofer Institutes (Germany) A*STAR (Singapore) SEMATECH NCMS NIST MEPs University Centers EWI Edison Center DoD MANTECH EPRI Federal laboratories One-off federal solicitations

None of these models alone is sufficient to bridge the U.S. “Manufacturing Innovation Gap” A new American model is needed

Industry Driven Model

 25 industry participants ─ ─ Large, medium, and small companies Range of sectors  Confirmed need for an infrastructure to mature manufacturing technology  Reviewed innovation models  Consensus behind a proposed innovation model to develop, mature and implement advanced manufacturing technology

Industry Consortia Component

  Sector specific and organized around industry clusters; Member based collaborations; financial support to demonstrate relevance;   Engages universities and national labs to address “grand challenges;”  Government/industry cost share pre-competitive technology development; Workforce development through educational institutions;  IP framework that reduces barriers to collaboration.

Application Center Component

   Manufacturing technology specific; capabilities that are world-beating;  Facilities and expertise to support all sectors and business sizes;  501(c)(3) not-for-profit corporations focused on industry clients;  Primarily industry funded to implement technology for proprietary applications; Modest government funding to build core capabilities; IP framework that reduces barriers to implementation; 14

Consortia/Center Examples

Industry support drives entries and exits Manufacturing Applications Centers Industry Consortia Battery high-speed assembly Flexible electronics Large component fabrication Net-shape manufacturing Next-generation optoelectronics Vehicle lightweighting

X X X X X X

A g il e au to m A at d io d it n iv e m a C n u as fa ti n ct g u ri n g C o a ti n g

X

b ly E le ct ro n ic a ss em F o rm in g

X X

In sp e ct io n J o in in g

X

M ac h in in g P o ly m e r p ro ce s si n g

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

Benefits of the Industry Consortia

    Engage industry leaders to identify and solve common challenges  Leverage industry and government funding to develop pre competitive technologies  Access wide range of technical organizations for innovative technology development Advance industry codes and standards Support workforce training and education programs Program management to ensure timely and efficient execution  Royalty-free licenses to IP created by the consortium

Benefits of the Application Centers

   Practical application of the technologies leveraging proven solutions from a wide range of industry sectors  Access to world-beating manufacturing technology expertise and high-value capital equipment  Robust network to rapidly connect small, medium, and large manufacturers with the best technical assets  Network collaboration to advance cross-cutting technologies, e.g., modeling and design methodologies Client ownership of IP developed on client projects Leverage Application Centers background IP

Bridging the Innovation Gap

Industry,

•

NIST MEP Incremental

•

improvement Off the shelf

•

technology Short time horizon Application

•

Centers

•

Mature and commercialize technology Implement for industrial applications

•

Industry Consortia Precompetitive technology development

•

Workforce Training Time to deployment Universities, NSF Centers, Federal Labs

• •

High-risk research

•

Long time horizon Not focused on shop floor implementation National network of industry-focused application centers and consortia linked to existing assets

Innovation Concept Gaining Support

 DARPA Open Manufacturing  National Network for Manufacturing Innovation • • $1B budget request $45 million in existing funds for pilot program  DOE Manufacturing Demonstration Facilities  EWI, CCAM and Others 19

HPC in Manufacturing – Discussion and Attempted Action

 Council on Competitiveness  National Lab Partnerships  University Outreach  Manufacturing Institute  Ohio Supercomputing Center  National Center for Manufacturing Sciences 20

Is the Divide Too Wide?

  280,000 manufacturers in the U.S. How many are equipped to use HPC assets?

• • • • Possess the expertise Understand the application Have access to a location Have the budget How many HPC locations are prepared to address the challenges to make it possible?

• • • • Licensing Security Consulting IP 21

Application of Digital Assets

 Virtualize product lifecycle;  Prototype and refine innovations;  Simulation-based education and training;  For smaller OEMs or suppliers, is there a model to capitalize on digital assets short of Top 500?

 If HPCC, other groups, or individual centers discover a successful method, the Manufacturing Institute is prepared to assist.

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