Four Days in Detroit: IAMC Fall Forum Goes Deep on Critical Issues
By John Salustri
The supply chain. Leasing in a landlord’s market. Energy issues. Carbon reduction. These were just some of the timely topics covered in-depth during the recent IAMC Fall Forum in Detroit. But the 20th Anniversary Forum wasn’t about business alone, and attending members got ample chance to catch up and network with their peers in a variety of venues. (For speaker presentations, click on the IAMC Cornerstone tab.)
For IAMC members who may have missed the Forum, here is a complete recap of events:
Sunday’s Roster of Events
Sunday’s roster of events was highlighted by an in-depth discussion of the need to reshore manufacturing. This year’s Research Roundtable featured Harry Crane Moser of the Reshoring Initiative®, who called reshoring “an opportunity to do a smarter job of siting facilities, buying components and selling.”
Moser said that the trade deficit—the amount that imports exceeded exports--hit $1.1 trillion last year. The mission of the organization, he said, is to bring that number back into balance, which would improve US manufacturing by 40% and stem the loss of jobs.
By way of example, Moser cited an Illinois manufacturer who encountered quality issues with components made in China. The firm found a local-state source and not only corrected the quality issues but realized a 94% reduction in inventory.
Here are the priorities, as he sees them: Reshoring begins by “offshoring nothing” without first doing an analysis of total cost of ownership (TCO). Also, we need to either close offshore facilities or convert them to supply more offshore destinations. Finally, we must focus more on US investment.
Another Sunday highlight was a series of in-depth luncheon discussions on a variety of critical topics. “The Six Most Dynamic Things Impacting the Supply Chain and One Opinion” enumerated the interconnected issues that affect the flow of goods: Consumers’ financial position/condition; Retail trade and e-commerce; Imports; Warehousing; Industrial Activity, and System Constraints. The point was made that, despite recent statistics pointing to an economic slowdown, many of the common indicators—such as multifamily starts and consumer condition--are actually above pre-pandemic levels.
Corporate members’ struggles with getting projects over the finish line came to light in “Creating Enterprise Value: Beyond Quick Fixes.” One major hurdle is the rise in construction costs, which CBRE projects will be up 14.1% by year-end, compared with 2021. Participants discussed the need to start project conversations months before commencement—up to 36 months prior—and weighed the pros and cons of leasing vs. ownership. One issue with owning, despite its benefits, is the need to follow the market, “making asset ownership very difficult.” If there is a saving grace, it is, as one corporate member said, “We’re all in this together.”
The manufacturing community is certainly sharing its issues as technology advances. In “The Past, Present and Future of Manufacturing Technology,” participants discussed the cause and effect of failing to automate and watching more jobs go offshore. Automation will call for higher skilled workers and, as one speaker said, “employment with a lot more meaning.”
Following an afternoon filled with mid- and long-term insights, IAMC feted its new members and first-time Forum attendees, followed by a reception and dinner at the Henry Ford Museum of American Innovation.
Here’s What Attendees Heard on Monday
A rousing and emotional keynote by blind adventurer Erik Weihenmayer kicked off the day’s events, challenging the crowded room to understand the importance of teamwork in overcoming adversarial situations.
It was a good lead-in to the IAMC Info Exchange, wherein corporate and associate members pooled their thoughts on the creation of distribution centers (DCs) against the trend toward community pushback. Julie Dow of Lockheed Martin, Brian Corde of Atlas Insight and Lee Crume of the Northern Kentucky Tri-ED moderated.
Some of the major takeaways included: First, while DCs play an important role, they’re often not considered benign developments by the local community. Next, distribution jobs are no longer low-rung positions, given the increased automation training. Also, EDCs need to speak a language of community understanding. Finally, there is no easy fix. All developments and all communities are different, and project process needs to reflect that differentiation.
Up next was the C-Suite Spotlight with Greg Schementi and Trish Trester of Cresa. A fun and interactive session covered such topics as the supply chain, labor, automation and environmental regulation. The need to become more proactive in the supply chain, for instance, included such takeaways as addressing risk by rethinking location, sourcing and inventory strategies like reshoring and network redesign. Also, build in flexibility and resiliency long-term to address future shocks.
Redefinitions and re-evaluations were key themes at both the corporate-only and associate member Peer-to-Peer Discussions. Changing times demand a new look at how we do our jobs, the corporate members pointed out. “We’re not in real estate,” said one participant, but rather, we’re in the business of value-enhancement and communicating that value to senior leaders. She indicated that the current challenges are really an opportunity to rethink our goals and communicate better to the C-Suite the constraints of market conditions. One member said he puts real estate into terms of key commodities and asks leadership how steel is performing amid current forces. “This is an opportunity for us to enhance our value.”
The Associates Session, moderated by Jim Hazard of Cresa and Bryce Sylvester of Team NEO, also emphasized a need to “change how we think,” especially as it relates to automation.
Key takeaways? Robotics must be considered part of the workforce rather than as a replacement. It’s a complimentary asset. Realize this and your competitive edge rises. We need to change how we think about real estate, people and automation. We need to ask a lot more questions before we sign that lease. How much profit margin can we drive with a heavier upfront fixed cost to lower the downstream risk of the variables?
Also, we need to get sharper about the questions we ask company leadership about their visions for automation. The result could advance your ability to perform.
Tuesday's Takeaways
The Tuesday schedule kicked-off with a vast number of takeaways from the opening keynote address. But one in particular was already echoing throughout the fall Forum: Realign your partners and reshore or near-shore. Geopolitical strategist Peter Zeihan’s “No Assembly Required: The Future of Global Manufacturing” presented a detailed picture of the global (and rocky) landscape, with a rationale that boiled down to that practical bit of advice for IAMC members.
Forum attendees could then choose their issues from eight concurrent educational sessions, broken into two segments, but all designed collectively to cover the topical waterfront, from Environmental, Social and Governance (ESG) goals to leasing challenges and offshore brokerage.
Here’s just a sampling:
In “Supply Chain Fatigue: What Else Is There to Talk About?” experts from rail, shipping and trucking shared their perspectives on the massive delivery delays we’ve experienced both as providers and consumers. The good news is that it’s getting better. While we’re not yet back to the days when door-to-door delivery (from Shanghai to Chicago) would take roughly 45 days, it’s no longer the 90 we experienced in the depths of the pandemic. But clearly, at 60 days, we still have a way to go. Delays at the ports of Southern California are also showing signs of improvement, with delay reductions from the pandemic high of 110 days down to four or five.
“Are You Ready for an Electric Future?” emphasized the point that carbon-reduction goals in a new build or renovation project need to come from leadership. “The project won’t go anywhere without their buy-in,” said one speaker. It’s also important to plan every step in the project process through the lens of those top-down sustainability goals. For instance, construction materials shipped from China (and never mind supply chain delays) have a much larger environmental impact than locally sourced goods. Also, keep in mind the effectiveness of low-hanging fruit. For instance, check the condition of old windows and doors before investing in capital-intensive new technologies.
The Awards Luncheon and Business Meeting set the stage for the 2022-2023 slate of directors and executive committee members. (We will list them shortly.) Also at the luncheon, Sarah Frederick (CEVA Logistics) and Eric Zahniser were honored for their efforts in new member recruitment.
The final event of the day was the signature IAMC “Get Some Help!” session, fueled by issues submitted by membership. Here are just some of the comments gleaned from topics ranging from leasing issues and workforce shortages to streamlining EDC incentives:
“Market rents have tripled. It was a very successful negotiation . . . for the landlord.”
“We’re seeing a little more leverage for the occupier.”
“There’s more conversation about renting less and owning more.”
“We’re building now but we’re not finding local skilled trades. We’re hurting.”
“Daycare facilities will help bring employees in but staffing them will be an issue.”
“Largely, the speed of the incentives-compliance process is out of your hands, but you can facilitate it by making sure all of your ‘Is’ are dotted and your ‘Ts’ are crossed.”
“The earlier you start incentive talks, the more you’ll decrease delays.”
Wednesday's Wrap-Up
The IAMC Fall Forum wrapped on Wednesday, but not without some major final takeaways:
What’s the difference between a boss and a leader? That was an essential question posed during author Shola Richards’ closing keynote: “Ubuntu: Three Questions to Change How You Work, Live and Lead.”
Ubuntu, he explained, means “I am because we are,” and Richards sees this thought as “the height of human kindness and connectedness.”
So, what are the three questions that lead to Ubuntu for leaders in business? First, is it kind? Second, is it true? Finally, is it necessary? By way of explanation, Richards first cited a workplace door with the sign posted: “Please take responsibility for the energy you bring into this space.” Therein lie the seeds of kindness.
Remember yourself at your own job interview, he suggested. Your words then should be reflected in your leadership position now. Your commitment has to be true.
Finally, he noted that if it is kind, and it is true, then it is necessary. But kindness, he noted, and all that comes with it, are not possible every day.
“Just today,” he concluded.
The 20th Anniversary Forum wrapped up with the passing of the gavel and installation of the association’s 2022-2023 leaders. The Emerging Leader Director is now Lindsay Friedman of Prologis. Bill DeBoer of Kohler, Bob Kontur of EnerSys and Eric Zahniser of Lee & Associates are our three newly installed directors.
IAMC’s 2022-2023 Executive Committee is now officially:
- Karen Shchuka of Penske, Chair;
- Betsy Power of PepsiCo, Vice Chair;
- Cary Hutchings of BNSF, Secretary/Treasurer; and
- Scott Cameron of Sonoco, Past Chair.
For IAMC members attending the Fall Forum, it was a time of sharing—both of insightful information and the all-important networking opportunities. If you missed this signature event, make it a point to become part of the conversation at our Spring Forum in Biloxi, MS, April 1-5, 2023.