Rockwell Automation, Inc. (ROK) Earnings Call Transcript & Summary

Hello, and thank you for joining today's webinar. This is the first in a 3-part series on the state of smart manufacturing. Before we get started, we have a few housekeeping items. The audio for this event will be streaming through your computer speakers so make sure your volume is turned up, and speakers are turned on. We'll be showing -- our webinar platform performs best in Chrome and Firefox browsers. On the lower left-hand side of the presentation, you will see a Q&A box. We encourage you to enter any questions you have throughout the presentation here, and we will answer them at the end of the presentation. If you are having any trouble connecting to the webinar, please take a moment to refresh your browser and disconnect from your VPN. If you are still having trouble, please clear your cache. We have instructions in the handout section of the webinar platform. All of the panels on the webinar platform are adjustable. To resize, simply click the corner to adjust or hit the maximize screen at the top right-hand corner of each panel. Today's event will be recorded and will be available immediately after it is completed. You can access the recording utilizing the same link that you use to access the live event. After the webinar, we will also be sending you an e-mail with the resources from today's event, including the slides, handouts and event recording. Additional information regarding today's topic can be found in the handouts panel of the webinar platform. With that, I'd like to introduce today's speaker, Gerry Abbey. Gerry? _

Hello. Thank you, Shannon, and thank you all for being here today. I have a very exciting presentation, a lot of great data. and I'm looking forward to engaging talking through this data and getting some real insights, getting at the core of why is any of this meaningful to you. So as Shannon said, I'm Gerry Abbey, Market Research and Competitive Intelligence Manager here at Rockwell Automation. And I'm going to be talking through our state of smart manufacturing report. This is a report that started about 8 or 9 years ago. This is the eighth edition of it. Each and every year, we've looked to broaden the scope of this and make it better, more relevant, benchmarking data for manufacturers so that we can understand what's happening in the market. How are manufacturers viewing technology? How is it impacting their operations? How is it impacting their past, present and future? And what can we learn from that? What are the key takeaways? What are the right questions to ask? So after 8 years, we've had a lot of thought on this. It changes a little bit every year. It stays the same a little bit every year. And as we go through this, I'll highlight some of those pieces that have evolved, haven't evolved and what's really new. To give a little more context on this particular study that the report is based on, we had a third-party unbiased research firm conduct this study, and they were able to get responses from 1,353 global manufacturers across the 13 countries that are the biggest for manufacturing globally. So this is a bit deep and wide study collecting data. And here in this report, we boiled that data up for the key findings to make it meaningful for you. A couple of big data points are highlighted on this slide, things that we're going to touch on later, and I'm looking forward to diving in. So let's get started. Now as I said in the intro, some things stay the same year-over-year, and some things change. Every year, there are ways that manufacturers feel like they're behind the competition. This question we ask every year because it's a little bit the same, but sometimes it does change. And what we saw this year was a significant change, and that's why I'm leading off with this. So normally, our respondents are feeling behind the curve on technology adoption a little. They're looking at their competitors to the left and to the right, and they're saying, I kind of seem to lack the skilled workforce or the technology to really keep pace. This year, there was nothing ambiguous about the responses. Every single response went up. We're not showing all the responses here. There were 15 total. We've highlighted the 9 most significant. Each one of these went up in some places significantly, particularly when you look at how manufacturers are feeling in regards to technology versus the competition, up to 43% versus 26% last year. And what I highlighted on this slide, on the left-hand side, is skilled workforce technology, innovation, speed and access to data, understanding data, as the top 5 where manufacturers are feeling a little behind. And if you really boil that up, all these pieces are connected to technology. If you don't have your technology in place, if you don't have your technology road map in order, then it's going to impact all of these. It's going to be more difficult to attract and retain talent. It's going to slow down your speed to innovate. It's going to slow down your speed to market. And it's going to limit your access to data and your understanding of the data that you do have. Now thinking about that and looking at these obstacles for the coming year. On the left side are the external obstacles, as listed by the 1,353 global respondents. These are all the top obstacles with fleet inflation being #1. On the right-hand side, these are the internal obstacles with balancing quality and growth coming in at number one. If you look through all of these, I don't think anything will jump out at you as being unfamiliar, supply chain disruption, material shortages, the shortage of skilled workers, worker retention, knowledge retention. Right now, we have 10,000 baby boomers a month retiring. While manufacturers have always talked about the importance of knowledge retention, getting people in, keeping them so that they're not in a cycle of constant training and retraining, that is always one of those top ones, deploying and integrating new technology. We could be having this conversation 50 years ago or 50 years into the future, that will still be one, people will always struggle a little with integrating new technology to the organization, getting people to adopt it. But as we go through this presentation, we'll talk about some of the other responses, some of the other data and ways to adapt for that. So when thinking about all of those obstacles, the #1 response from all of our respondents was adopting new technology to mitigate internal and external issues. And if you look at all the responses on this page right here, each one of them is linked to technology. The total responses for these questions, for external, there were 15 options; for internal, there were 15 options. The top 7 choices of those 30 were all connected with technology. And I bet if I looked at the data, there's more than that. But managing cybersecurity, digitizing the business, even finding alternative suppliers and demand, a little bit of that is going to be connected with technology and communications and ability to get aligned, the shift to cloud operations, adopting software and ensuring data accuracy, these pieces are all interconnected when you're thinking about technology, mitigating that risk, bringing technology and improving your operations, improving your communication on siloing the organization so that people across departments are able to connect with on the same data in the same platform to gain efficiency, knowledge and feel more connected. It's very beneficial for your whole organization if you have that type of connection. All right. So now, before moving into any more data, I'd like to get a little data from our audience. So we're going to move into a poll here. So by increasing your use of technology in the 12 months, your organization will make no change to staffing, need to hire fewer workers, hire new workers for different roles or repurpose existing workers to new or different roles. If you could please add your response, I will share all the responses after we get them in. And then we can take a look at these findings versus the findings within the survey. If I had to guess, I'm waiting for the results to come in, I would say repurposing existing workers will be the most popular response. I would be willing to wager that hiring new workers would come in second. But I'm interested to see. We had some varying results from my other 2 webinars on this topic. And it looks like we've got a good amount of responses in. I'm going to move to the next slide, and we can talk through these responses. And it looks like the majority are looking to repurpose existing workers to new or different roles. So when technology comes in, this is absolutely consistent with our findings, that it can take care of some of those redundant roles where you might be having trouble getting people to take on or it might be one of those roles where you're able to find people, but it's really difficult to keep them because it is a repetitive, redundant type test without a lot of ability to derive meaning from it on a day-to-day basis. And people are really looking for a little more purpose in what they're doing, a little more value-add to the business, a little more value-add for them to be learning, to be upskilled a little bit. And I'm going to move into our slide with the actual data from our survey. And 89% of manufacturers expect to grow or maintain employment as a result of technology adoption. It was a lower percentage compared to our audience survey of repurposing existing workers, [ but that ] answer did vary by region. In China, the response was 56%. So really looking to aggressively adopt technology and change the current conditions within the organization. India was very high on that as well. Many of our EMEA responses were pretty even-keeled on this. And there's one other thing I wanted to talk about on this particular slide because it's come up in conversations with customers talking about the need to hire more workers. I know there's many of you out there that are struggling with finding anybody, let alone thinking about how we're going to hire more workers than we already have right now when we need to make best use of the people that we have in there. And when you're thinking about this, definitely repurposing existing workers is a great way to approach technology adoption, giving more investment into those people, higher-level tasks and eliminating those very redundant tasks. But when you're bringing technology in, upskilling people, you're bringing new efficiencies to the organization, which is going to, in turn, drive growth, which is, in turn, going to potentially drive that need to hire more workers. So when you're adopting technology, you don't necessarily have to hire more workers. But the goal is for that profitable growth to be generated, in which case there is going to be a need. And as we'll talk about later, there's technologies like cloud that are proliferated throughout manufacturing nail that are going to give you access to a wider talent pool for some of those roles. And thinking more about this data and leadership in the modern workforce. We have a lot of responses around this. And every year, these come back similar but a little bit different. And while effectively managing people and resources, identifying, implementing new technologies, assessing business need and technology talent fit, these are all pretty usual responses to boil up to the top, not surprising there. But one of the newer ones that's really come up is understanding how to manage next-generation workers. As I said before, 10,000 baby boomers a month are retiring. The next generation of workers that are coming in are digital natives. There is a wide value of difference between those workers, their life experience and the expectations that they're going to bring to your organization and the contributions. Digital natives are looking for technology to be integrated into where they are working. And if there is no technology where they are working, if there are no screens, if there is nothing and they are doing redundant, repetitive tasks with a paper and pen or Excel sheet, it's going to be more challenging to keep those people and keep them engaged. I was at a conference a couple of weeks ago, and we were talking about this. And the people that I talked to that were really struggling had that situation where they were paper-based or Excel-based and it was more challenging to get anybody in the door that didn't have that front and center technology. Now I'm not saying you need to have everything figured out at once to get people in. But if you're showing that you're taking steps along the way, it can become a lot easier. Looking on the right-hand side here, we have our biggest workforce-related obstacles. And a lot of these are going to be ones you would expect, training current employees, rising cost of labor skilled staff. I want to draw your attention to the second one, change management. Again, timeless. This is something we could be talking about 25, 50 years ago. It's something that's going to be talked about 25, 50 years into the future, let alone 1, 2, 5 years from now. Change management is such a key piece of technology adoption. I know my audience here today is aware of this, has heard it before, but I'm going to continue the drumbeat. It's not just change management before adoption. It's not just change management during adoption. It is change management as a culture throughout your organization on and on. If you are constantly thinking the importance of change management, getting employee feedback and contribution and continuous improvement as a cycle driven by your change management, it's going to help you be a leader within technology adoption and within your industry. It's a best practice. It makes a world of difference. There are 1 million case studies out there that can drive this home. And that mindset of continuously thinking how can we improve and what can we learn go so, so very far. And that is why it is always in here and will always be in there. All right. Moving into another poll. Which of the following best describes your organization's current efforts around ESG? That's environmental, social and government governance, if you're unfamiliar, and sustainability. We do not have any ESG sustainability policies in place. We have informal programs in place, but not an official stance. Some of our locations have a formal ESG or sustainability program. We have a formal company-wide ESG or sustainability policy in place. All right. Waiting for responses to come in. We've got a bunch so far. I know what my expectations are. I usually expect a pretty even spread. What I'm seeing so far is not an even spread, which is really interesting. I'm going to let a couple more to come in, and then I'll share it to the wider audience so everybody can see. If you have not selected your answer yet, please put it in there. We have 63% of you leaning towards one particular answer, which I find a little surprising, super interesting, and I'm looking forward to talking through it. Still 63%, 61%. All right. I'm going to move in, and we'll keep talking through this. Thank you for all your responses. All right. So 61% of this audience says they have a formal company-wide ESG or sustainability policy in place, which is higher than our survey average. We'll show that in a minute, but really interesting and very notable for so many reasons, and I'm going to touch on a few of them in a minute. All right. So here are the results of our survey. In the blue circle, that 40%, that's where 63% of our audience said that they have a formal company-wide policy. 37% Was a formal policy, but only at some places within the company. And that 18% is the informal policy. So -- if you look at that whole grouping of percentages, 95% of the respondents for this survey said that they have an informal or formal policy for ESG and sustainability. Now if we time and travel for a minute, and bear with me, go back 5 years, I imagine the numbers in our responses today would be very different. I know the numbers in the responses from last year were very different. And I think it is fascinating to see this trend develop. And some of the drivers that I'm seeing or outlined on this slide, the International Sustainability Standards Board, the EU Sustainable Finance Disclosure Regulation, taxonomy delegated act. There is Germany's Supply Chain Due Diligence Act, which was just passed in January. There are the EU carbon border adjustments. There are some in North America. There are standards and regulations out, there are more coming, and there are way more planned. And I think that is a huge driver based on the results that we're seeing this year, that we're seeing today behind companies motivating to establish these formal policies. And we're going to talk through a few different reasons on the next slide here, besides just regulations pushing along. All right. So a switch in sustainability focus. If you look on the left-hand side here, those 2 top reasons were not there last year. When we surveyed last year, it was a lot of reasons for building your presence in the community, fostering a collaborative environment and doing good. And while those are great reasons, oftentimes it can be difficult for a business to catalyze change and get people to really buy in if they're not seeing business reasons that are explicitly tied to driving a formal policy within the organization. But if you're looking at these responses for this year and improving efficiencies, people are starting to see that ESG and sustainability, under different terms, has been talked about for a very long time. Manufacturers have always been looking for improving efficiencies. But now you have the opportunity to improve efficiencies and tie them to sustainability and ESG, improving the world and improving your business. It's also become a competitive differentiator. As many of you that are joining me here today are already aware of because you have these policies in place, you see the customer demand, whether it is the end customer that is saying that they want to purchase from a responsible, sustainable supply chain or it is a large business customer that has made a net zero promise that will now be held accountable to report similar to how they report on their 10-K for their scope 1 and 2 and 3 emissions. When you get to that scope 3 emissions, that's everybody connected in their value chain. So you can be the smallest manufacturer within that value chain, but you still have a connection and a responsibility that will come down and be pushed down to have data around how your product is made, how your materials are sourced, how you're going to quantify those scope 3 emissions. And on the other side, looking at all these answers here, the importance of providing purpose. So there's a ton of data out there. I won't quote all of it, but one that always sticks in my mind, I think, is from -- it's McKinsey or the Society of Human Resources Management (sic) [ Society for Human Resources Management ], where 80% of next-generation employees would take a job -- take $10,000 less in pay to have a job where they feel a unique sense of purpose. Having purpose, having a company that stands for something like through an ESG sustainability policy to do good for the community, to do good for others, to have an inclusive culture can have such a driving dynamic impact on your organization at large, both in recruiting and retaining, and in your -- within your four walls, having everybody coordinated and working together and motivated to working together and feeling connected and a part of something. I saw one of the leaders from [ Nucor ] speak a few weeks back. So 25,000-person organization, and they talked and focused on that inclusive culture and the value that it brings to their organization so that people feel comfortable to contribute when they see something that can be improved. People feel comfortable to stay around for a career for years and years. They feel included and a part of something bigger than themselves, and it helps drive the business forward while enjoying it at the same time. So these policies can have such an impact. I know I'm probably preaching to the choir, with many of you already having a formal policy in place, but these are many of the reasons that we're seeing from the data and from conversations around the data. All right. Our next survey poll question, what percent of your operating budget goes towards technology investment? This is another question where I'm super interested on what our responses will be today. And I will be sharing what our responses were for the general survey at large. Just going to take a quick sip of water while we get those responses in. All right, about you a quarter of you have responded. If you haven't put your response in there yet, please do. If you aren't really positive of the answer, take your best guess. It's just nice to have a little data to speak to here. All right. It looks like we've got about half in. And this looks pretty similar to what I've seen in other conversations around this data, a little bit lower than the actual data we got back in the report, and I'm going to move forward so that you can see it. All right. So about 38% of the audience is looking at under 10%. We've got 32% of you in that 11% to 20% range and 16% in that 21% to 25%, which is actually where the data fell for the survey of 1,353 global manufacturers. It was 23% for the survey. Before we jump to that slide, I'm going to move into this one. So thinking about that, that is a lot of money regardless of which option you selected for your organization. It's a huge responsibility to make the selection for technology. It's a huge responsibility for integrating it. That's why you so many questions within the survey about it and put so much thought into what are the pieces around it to make it function, what are the things people need to do to make it optimal. And when you're thinking about the pressure of this investment for your organization, how you're going to get a maximum return, how you're going to introduce it, how many people are going to need to be a part of this? It builds. And manufacturers, the respondents for this survey, really are focusing in on feeling a little bit of technology paralysis. Last year was the first time we asked about it. About 1/4 of respondents said they were feeling it. This year, a third. This is a growing problem. Technology paralysis is where there's so many choices out there, it is hard to make one. And so people pause. They step back, and they say, we're going to wait until next quarter, we're going to wait till next year. We're going to wait, and we'll get the team together again in a couple of weeks or months, and we'll think through this. But just looking at the data from what we have right here. In 2023, 65% more manufacturers say they lack the technology to outpace their competition. If you're lacking the technology to outpace your competition, and you're feeling technology paralysis, so you're not making a move to adopt the technology and your competition is moving forward with technology, and you're staying at exactly the same place, that gap is only going to get wider. And while it can be paralyzing to think through these things and where your next step in technology is going to go, it's really important to recognize, especially from global surveys that pull in a lot of responses from over a 1,000 manufacturers, think about how this decision is going to impact your organization, both now and going forward because that spread isn't just a couple of weeks, months, a quarter or a year, it becomes exponential when your competitors are moving forward, and you are staying stagnant. So on that note, thinking about a great place to start. I'm going to touch on a few different ones, and I'm going to back it up with a little more of the data from this survey. But what I want to emphasize is that it's really important to keep moving on your technology journey. It's really important to have a technology road map that you can turn to, that you can edit, that you can work through, they can put down in front of a group of people and talk through and just keep iterating to make sure that you're on that journey, that you're on it together. So quality is a great place to start. And the reason I say that and have it listed here is because it came in as a top response for so many things. As listed by our 1,353 responses, it's the #1 accelerant for digital transformation. It's #1 area impacted by artificial intelligence, which is only going to proliferate more and more throughout manufacturing. And it's the #1 outcome from smart manufacturing to improve quality. Now earlier, I said that the average for our survey was 23% of the operating budget is spent on technology. And on the right side here, we have the top ROI investments that, that money is spent on. So when you're thinking about that precious, precious investment for your organization, these are some of the things that other people have already invested are highlighting as bringing the most payback and ROI in: process automation, cloud SaaS, IIoT, machine integration. And what I really want to draw your attention to on this chart is right there in the middle in that light blue, machine learning and artificial intelligence. In last year's survey, 26% of respondents said that they had some level of machine learning or artificial intelligence incorporated within their organization. This year, it was 53% said that they have it. And that drastic increase is already showing huge results with that 23% ROI, 23% saying that it was their #1 ROI. So all of these options can be a great place to start, especially for your unique organization. It's going to be a little bit different, but process automation and cloud SaaS really boil to the top there because they are impactful, they have a proven business case, and they're accessible through many, many different technologies that intertwine to bring success to your organization, to upskill your workers like we talked about earlier, to show an environment that workers want to come into, especially digital natives who are looking for that technological environment. And thinking more about cloud. Cloud continues to soar. It is up there. It used to be hyped. People would talk about it as being. oh, it's not the great fit, the right fit that I want. But it has been proven year after year that more and more people are adopting it. I think it was 63% of the respondents this year said that they have cloud, SaaS, integrated into their organization. For planned areas to invest, cloud reached the top here, 44% are planning to invest more into cloud. And on the right-hand side, we have the screen quote from Microsoft talking about it's such an exciting time. I know it can be intimidating, we have this technology paralysis struggle. But such an exciting time for technology. It is more accessible. You can bring it in. You can start slow. There are modular solutions. There's composability. You can get something in and running and get payback and ROI quickly. And these technologies that were once inaccessible because they were too costly, you didn't have the business case, they weren't durable enough for your environment, they're there, and they're ready for you. And it's just taking that step to get them. So thinking more about where to start. There's a couple of things on this particular slide that draw my attention. Those top 2, production monitoring and quality management, are places a ton of respondents have already started. They're looking at these solutions that are quick time to value. Production monitoring can be up and running in a week, two weeks and giving you payback. Quality management systems take a little bit longer, but you can get them deployed and running in five weeks and get that payback and get the benefits to your organization of having that digitized quality management system. Looking at the bottom of this chart, CMMS and APM, the least adopted but the highest for plans to adoption. Putting those four together and thinking about that, it's telling me that our respondents were looking at that tiered approach to a smart manufacturing adoption to bring value quickly and build out in a thoughtful way so that they can reinvest step-by-step, grow the organization, get people bought in and do that continuous change management process, where it's an ongoing thing, and it brings everyone along without forcing it on them and moving them too fast. All right. And now our last poll question. Are you currently or planning to use artificial intelligence or machine learning in your operations in 2023? I'm just going to take another sip of water while we wait for responses. All right. The responses are coming in and is looking pretty even. A lot of you are still responding, so I'm just going to give another minute. All right. And I'm going to push the results out. It looks like we're pretty steady. All right. So for our audience today, it looks like 55% said no on artificial intelligence machine learning this year. 44% said yes. This is pretty similar to what we've been seeing out there. Like I said, for this survey, there were a few more. It was 53% said that they have it included in their operations today or planning for 2023. And no matter where you are, it's become more accessible. So when you're thinking about technology adoption, there are solutions out there like a supply chain planning for CMMS, predictive maintenance, where artificial intelligence and machine learning are already baked in, so that you can access the strength of these technologies now in a more accessible way. And that accessibility is going to continue to be easier to get to and to gain value from as we go throughout this year and the next couple of years, and it's going to keep growing. And it's going to contribute to those earlier stats where people are responding that they're not -- they're feeling behind the competition because. And when we're thinking about artificial intelligence and machine learning, one of the things that can help with is data. And when we're thinking about all of these technologies, one of the core things to think about is data. The more technology you have, the more access to data that you're going to have. And I'm just going to read this one stat out here in blue. 40% more manufacturers say they lack the ability to use data to make decisions to outpace their competition in 2023 compared to last year. More and more people are bringing smart solutions into their organizations. It's producing more data. And then they're feeling the need to do something with that data, but not sure what to do, not sure how to get at insightful, useful data. There's tons of conversations about creating data lakes and bringing in algorithms that will sort through and give these great insights, boil it all up and give you the answers from your data. A great place to start, if you are not a huge organization that has a data scientist that's going to be dedicated to that, is to think about what data matters to you, what data matters to your organization and how is technology you adopt going to make that data accessible and useful for you to make the best decisions possible for your organization. I'm talking about a solution where you can have a screen on the line, an operator can look at that screen, see the data in real time, make decisions off of that data and improve the efficiency of that line. And if they can't do it right there, to be able to bring suggestions based on the information that they're being fed in real time so that you can improve there and throughout the organization. There are so many examples like that, depending on what solutions you bring in, that can give you the data that you need to make quick decisions that are going to impact your organization and impact your people and impact your recruiting and impact your profitable growth as you look to continue growing throughout 2023 and beyond. And looking beyond, when we're thinking about driving improvements over the next 5 years, manufacturers are looking to better use of data analytics, increased automation, adopting smart manufacturing software and cloud technology. And rounding out those, ESG and sustainability. So getting at the data that you're going to need for your ESG and sustainability policies to report it out, if needed, when needed. All right. We're coming near the end of our presentation and looking to the future of smart manufacturing. On the left-hand side of the screen here, we have connected devices used in manufacturing operations today. Many of these are probably familiar to you, already incorporated within your organization. Handheld scanners, tablets, consumer devices like mobile phones being used, cameras, scanners, maybe drones, sensors. And if you scroll down to the bottom, we have mixed reality, augmented reality, virtual reality and wearables. These have continued to rise in prominence. There's one customer that I know of today -- and I'm giving you this example so that you're not thinking that this is some far-flung thing into the future. We have a customer today that uses augmented reality to project work instructions at the workstation so that somebody that comes in on day 1 can go and do everything they need to do like they've been there for months. It makes the person that they bring in, feel empowered and part of something from day 1, and they are contributing value to the organization from day 1. It minimizes training so much. And the improvement in these technologies in wearables and durability and access for cost and usability and application to be tied into your organization, these use cases have all been developed, the business case is there, the cost has lowered, And the solutions that are out there are ready to be tied into it. So when you're thinking about your technology road map and you're thinking about the next year to 5 years, think about things like that for helping, especially if you have a workforce issue that you're currently dealing with. Now thinking more about the future on the right-hand side, what areas are going to be impacted by artificial intelligence? Quality, like I already said, number one, automation, more accurate forecasting, predictive approach to operations and production and so on. Artificial intelligence will be touching everything eventually. -- not today, not tomorrow, maybe not next year, but it's going to continue to grow. So when you're thinking about your technology adoption plan, I'm not saying that you 100% need to adopt this, but think about it and think about where it fits and what it fits. And -- so if you download our report, you're going to have access to all of this data and more that I've gone through today. And this great getting started guide which, whether you are a technology adoption professional, you have been doing it forever, or you're just getting started or you fall somewhere in the middle, this is a great guide to just print out and have and think about, all right, we're going to adopt this new solution. What do we need to do? Who do we need to get together? What are the information gaps? What's the ROI that we expect? What's the business case? What's the core problem? How are we going to get at that problem? What stakeholders do we need to bring in to make sure that the problem isn't connected to something else that might be a little wider, and we might need to shift our approach? How are we going to design and deploy the solution? And how are we going to measure the results and drive continuous adoption? Anyway, super helpful resource here, a lot of great questions, a lot of good things to think about. And you can just print it out and have it handy when you're thinking through what are we going to do. And along with that, within the report right after that is 10 steps to a technology adoption checklist, which you could also just print and have there, tick through this little longer piece, build off of that 5-step to think about what you're doing, when you're doing it, how your technology adoption is going today. Are you introducing a continuous improvement process for thinking about best use case of the technology that you have already? Can you refine your approach before you take a next step for technology adoption? What would help you refine that approach? So just a couple of things here to help out. And with that, I'm going to move into questions, and I'm just going to go on to the next slide. I really appreciate everybody being here today. Thank you so much. And if you have questions, I welcome you to reach out on LinkedIn. My Rockwell e-mail is right here. And I'm happy to answer questions about this report or anything I've said today if you have questions. Thank you again. And with that, let's open to any questions that have come in.

Perfect. Thanks, Gerry. Wonderful presentation as always. _

Thank you.

As a reminder, if you have any questions, please enter them into the Q&A box. We do have a couple of questions. How do we get started if we're a paper-based operation? _

That's a great question. So going back to those last couple of slides I looked at. I think getting people together and talking through where and what you can address and thinking about what type of mindset and culture your organization is. Is your organization one that bands together behind an initiative and wants to go full throttle right into it? If so, and your paper-based now and you want to make a big switch, I would jump to something like an ERP with an MES. And you have everything being digitized and your entire organization is in the same boat of change management and just going with it. And everybody is going to be hopefully working together, working through it and modernizing. And while it might take a little while, there are solutions in the cloud that can help make it smoother and more efficient. So a more rapid deployment. If you're doing multiple organizations or configurable solutions not customizable out there that can make it easier for you to deploy quickly and keep everybody on the same page so that your organization is on siloed and connected. And if that sounds intimidating as too organization-wide, too sweeping and broad, think about production monitoring. That's one where you can get up and running quickly, get information about how your machines are operating, when you might be experiencing some downtime, what you can improve in terms of slight adjustments and build from there. But there's so many different ways to jump in. And I'd think really hard about the culture of your organization and what you want to accomplish and what your budget is and what your energy level is to take on the project. And then also think about who you're going to partner with and make sure that you have a partner that aligns with your technology journey and will be there with you today, tomorrow and 5 or 10 years down the road, helping to create solutions that align with your business. Sorry, that was a very long answer to the question.

No, that was perfect. Yes. We got another one, but kind of, I think, plays in nicely to what you just talked about. But what are the key factors that set Plex apart from its competitors? _

That's great. Great question. So a lot of things. That quick to deploy cloud system. We've been in the cloud since 2001. I want you to think about 2001 and what you thought of the cloud. This is native cloud. Plex was in the cloud before anybody had any clue what it was. So it is there, it is smooth, it deploys quickly. everything is in the same code base, and it is going to be a pretty seamless connection with the organization. It is also highly configurable, not customizable. And one of the benefits of that is that if you're deploying to multiple plants, it's going to be the same -- mostly the same throughout the organization. So you're going to see the same types of outputs in terms of data when you're trying to think about what is going optimally. And you can compare plant to plant and think about that plant seems to be better at this. What can we learn from that plant and transpose on the other one? It helps a lot with that consistency and the communication and the data. And it has all these different options for deployment. So if you wanted to start at a production monitoring or if you wanted to launch straight into that ERP, it's there. Or if you want to go with an MES because you already have an enterprise-wide ERP that Plex MES will plug right into it, seamlessly and quickly and get you that payback and ROI quickly.

Great. This goes back to one of the earlier polling questions about struggling to find workers. When we get people, sometimes they only stay for a shift or two. How do we attract people and how do we get them to stay? _

So I think twofold. Technology, having technology front and center, getting people to use technology and being able to shift people out of those roles where they're doing redundant things. If you're an organization where you need a person to do those redundant things, having purpose. So I would say 100% having technology there to help attract and retain, but having that purpose makes such a difference. Having a formal sustainability or ESG policy, showing that you're consciously thinking about the community you serve, the organization. Within your employees, social justice, how people are valued within your organization, that you value their feedback. They might be doing a redundant task, but if they have a suggestion on a way to do it better, and they have a way to convey that suggestion and feel heard, that can make a world of difference to help retain and attract. I hope that helps.

Yes. Thank you. We've got time for maybe one or two more questions. Why should we be concerned with things like ESG sustainability? _

So, so many things. Some of them I touched on here. I would point to the regulations. It's huge. There's more and more. They're going to keep coming. And also point to the data from the survey. People are looking at sustainability and ESG as a competitive differentiator. The response in China was 49% looking at it as a competitive differentiator. India was extremely high. Australia was extremely high on that. There are pockets around the world that really understand that it's coming and they need to be prepared for it. And this data, the importance of being aligned for regulations, whether you're small or big, especially if you're small thinking about how you're going to be impacted as part of the value chain of a large organization that has made this sweeping net zero promise, and they need to be accountable. They need to be accountable for -- like in Germany, Germany's Supply Chain Due Diligence Act. For an ethically sourced supply chain, you're going to need data around this, you're going to need a policy. So do you collect that data, organize it and now your prepped. And all of those reasons and more, I would say, to really think about it, read up and see what's coming because a lot of impact is coming to all manufacturers everywhere.

Great. Right. This one. Who are the target of the survey introduced in this report? _

Great. So manufacturers focus across many industries. If you download the report, at the end of it, we have the demographics and firmographics. We targeted from a revenue standpoint a wide range, from $10 million to $10 billion plus and a fairly even spread across those. So in the 10 to -- like a $100 million, I think it was around 20%. In the $1 billion plus, it was around 25% and then those chunks in the middle. So an even spread from an organization size. And then the responses were fairly evenly spread from C-suite down to manager. What we were looking for was pretty balanced response across the board to understand manufacturing in every level of it, how people are feeling around technology, technology adoption, the workforce and all the different topics that we touched on today. And like I said, if you download the report, all those demographics and firmographics are right there at the end for you.

Great. Thank you. With that, we'll end. Gerry, I want to thank you so much for your presentation. It was a ton of information. I know everyone thinks the same. If we did not get to your question, don't worry, we will get to you in a separate e-mail after this presentation. If you would like any more information or a follow-up or a demo or anything, please make sure that you fill out the survey at the end of the webinar and check that you would like to be contacted, and we will be in touch. Also, please do not forget that we have two more in this series of smart manufacturing webinars, one next week and then one later in May. You can find those in the handout section. So thank you all again for your time and attention. Gerry, thank you, as always. And everyone, have a wonderful day. _

Thanks, Shannon. Thank you all.