Cozy Up and Enjoy a Little Manufacturing Innovation

Good morning everyone. I am headed to Connecticut right now and will be working from there next week. If you're in the Boston area or points south, I'd love to pay a visit, and we can share what you're up to in the next edition of the Industrial Innovation Advocate or discuss how I help with your story and positioning.

In this week's issue we're talking advanced manufacturing tax credits, the consequences of starving your brand - it's all about mental availability, and industry applications of Gen AI.

PwC Breaks Down Advanced Manufacturing Production Credit

PwC produced a nice nine-minute video in conjunction with New York Climate Week that explains the basics of both the Advanced Manufacturing Production Credit, aka the Section 45X credit, as well as the Domestic Content Bonus, both part of the Inflation Reduction Act.

The Section 45X credit is a tax credit to encourage U.S. manufacturing of clean energy technologies. Simply assembling components doesn't count. For example, PwC tax expert Khalid Rasti explains that in battery production, first the production and purification of lithium would qualify, followed by combining it with other critical minerals, followed by the production of the battery cells, and then the production of the battery module that the cells are placed in. All of them would generally qualify for 45x credits.

The complement to that Advanced Manufacturing Production Credit is the Domestic Content Bonus Credit, which rewards companies for using domestically produced manufacturing material for clean energy applications.

It's Not Really About Brand Awareness

When dollars are tight - and they always are - one of the first things to get cut is often brand-building activity. After all, you can get away with that for a month, maybe two, few consequences. Ultimately, though, it has a nefarious trickle-down impact on your performance marketing efforts.

The problem is that people are less likely to click on your sponsored links and other promotions if they don't already associate your brand with whatever it is they're researching when they're ready to to buy. Less likely to respond to email marketing. Less likely to return a sales rep's message. Who comes to mind when a searcher thinks about "faster tooling" or "increase machine utilization" or "microfluidics for medical device prototyping"? Do you?

This is all about that a mental shortcut, or heuristic, that we all use called "availability," which was defined by the behavioral economists Daniel Kahneman and Amos Tversky and is something I discuss in my storytelling workshops. Sure we like to think we research all important decisions thoroughly and with an open mind, but we don't. Companies like AWS and Microsoft Azure , for instance are working hard right now to associate their IT brands with "manufacturing" for instance so that manufacturing leaders assume they understand their world and not just general IT.

The good news here is that most companies are not really trying to build general "awareness" of their brand, which is crazy expensive to do. You are simply trying to associate your brand, positively, with those Customer Entry Points, or CEBs. (You can read a lot more about CEBs in How Brands Grow: Part 2 if you're interested.) It starts with determining what those are, and then connecting your brand with them via top-of-the-funnel efforts like thought leadership activities, sponsorships, advertising, social media, etc., that can reach lots of relevant people efficiently.

So do you want to get those CPC numbers down? Brand communications can help.

Gen AI Finding More Industrial Applications Than Expected

In a 2023 report, ARC Advisory Group said there were limited immediate applications for generational AI in industrial settings. Today that's changing.

In his latest digital transformation brief, "Don't Wait for Industrial-Grade Data Fabrics," Research Director Colin Masson says industrial companies are emboldened by the potential they see in Gen AI despite the hard work and investment required. To get there, they are prioritizing these industrial-grade data fabrics, being developed by Amazon Web Services (AWS) , Palantir Technologies , Snowflake and others. Writes Masson:

IDFs are needed to "weave” together a unified, seamless layer for data management and integration across the plethora of endpoints, systems, and platforms within an industrial environment to capitalize on the wide range of Industrial AI use cases from the “factory floor to the customer’s doorstep”. 

A lot of data for manufacturers is likely to be on-premise even if a growing share is in the cloud or hybrid environments. Given data is the fuel for Gen AI insights, being able to seamlessly bring it together is critical.

Some of these applications include preventive maintenance, generative design in product development, training robots prior to shop floor deployment, and improving energy usage.

ABI Research published a report on this topic as well a few months ago, and analyst James Iversen summarizes those findings in this short video.