In this episode, Craig Coulter and Sai Yadati from the EY Advanced Manufacturing and Mobility team, examine what industrial companies can do to accelerate their sustainability initiatives.

As the urgency for carbon net zero mounts, industries are compelled to innovate and transform. The EY 2023 Sustainable Value Study reveals that the majority of advanced manufacturing and mobility (AM&M) companies are actively pursuing emission reductions, with a significant number targeting carbon neutrality and net zero within three decades. However, they face persistent challenges, including the lingering effects of the COVID-19 pandemic, inadequate energy infrastructure, geopolitical tensions over mineral resources, and a lack of high-quality environmental, social, and governance (ESG) data.

In this installment of the Advanced Manufacturing and Mobility Business Minute podcast series, we hear from Craig Coulter, EY Global AM&M Strategy and Operations and Sustainability Leader, and Sai Yadati, EY Americas AM&M Sustainability Leader. They delve into the strategies industrial companies can adopt to meet their climate change goals, emphasizing the role of digital innovation, strategic partnerships and leadership.

Coulter presents five key methods for harnessing technology to further sustainability, advocating for initiatives that extend beyond mere regulatory compliance. Both he and Yadati highlight the critical role of leadership in cultivating a culture that embraces innovation, risk-taking and change.

Join us to learn how fostering collaboration between digital transformation and sustainability teams, investing in employee skills development and establishing strategic alliances can pave the way for companies to expedite their journey toward decarbonization.

Key takeaways:

• Challenges such as energy infrastructure limitations, conflict minerals and the need for accurate ESG data are obstacles to reaching climate goals, despite progress and investments spurred by recent legislation.
• Digital tools are critical for energy transition, with examples showing significant reductions in emissions through smart energy management and the potential of virtual power purchase agreements for renewable energy sourcing.
• Leadership plays a key role in decarbonization by fostering a culture of innovation and collaboration, essential for maximizing digital technology benefits and achieving sustainability targets.

In this episode, Alison Clark, EY UK Advanced Manufacturing and Mobility Leader, explores the roadmap to overcome challenges and leverage AI’s potential in industrials.

Driven by the rapid adoption of artificial intelligence (AI) and generative AI (GenAI) applications, the advanced manufacturing sector is experiencing a profound transformation. The emergence of these technologies is paving the way for a manufacturing renaissance, enabling new capabilities and enhancing traditional uses of AI.

Approximately 49% of advanced manufacturing and mobility firms have integrated AI into their capital allocation, and 96% of companies are projected to elevate their AI investment by 2030.1,2 This shift toward AI-centric operations is poised to reframe the competitive landscape, with companies leveraging AI technologies to unlock new opportunities for real growth.

This episode of the Advanced Manufacturing and Mobility Business Minute podcast series features Alison Clark, EY UK Advanced Manufacturing and Mobility Leader, who explores the strategic roadmap and challenges in the journey of AI adoption. Alison emphasizes the necessity of rich data, C-suite advocacy, skilled talent and a robust infrastructure and partner ecosystem to harness AI’s full potential.

For successful preparation for AI integration, Alison outlines five key initiatives: establishing a value-realization office, aligning AI with business strategy, conducting skills assessments, developing a cohesive data architecture and building an AI partner ecosystem. Join us to discover why embracing AI is more than a trend-driven journey and requires a distinct approach tailored to each organization’s objectives.

Key takeaways:

• Companies face several challenges in adopting AI, including supply chain complexities, strategic alignment, talent scarcity and the need for robust IT infrastructure. Addressing these challenges is critical for successful AI integration.
• Effective AI implementation thrives on robust data and efficient data distribution systems. It is vital to address data misalignment, elevate forecasting capabilities and manage inventory effectively for successful AI deployment.
• The adoption of AI should be a strategic decision, not a trend-driven response. Companies must approach AI with a strategy that aligns with their business objectives.

Sources:

1. "How CEOs juggle transformation priorities – the art of taking back control, EYGM Limited," EY website, https://www.ey.com/en_gl/ceo/ceo-outlook-global-report.
2. "Manufacturing in 2030 Project," Manufacturing Leadership Council website, https://manufacturingleadershipcouncil.com/manufacturing-in-2030-project/.

In this episode of the Advanced Manufacturing and Mobility Business Minute podcast, speakers Raman Ram, Mike Cadenazzi and Mike Iacono examine the turbulence shaping the aerospace and defense sector.

While airlines are placing more orders, supply chain issues and safety concerns are impeding production rates. Pilot shortages have become an issue, particularly for regional carriers. In terms of deal activity, private equity has championed creative financing solutions and has emerged as a net buyer despite complex market fundamentals.

Regulatory scrutiny remains a significant concern, necessitating proactive planning and engagement with antitrust counsels. Furthermore, sellers are increasingly evaluating prospective buyers for their ability to close deals without regulatory hiccups.

Industry leaders anticipate more orders, new solutions to supply chain issues, updates on sustainability challenges and technologies, and more transaction announcements in 2024. As businesses focus on strategic portfolio rationalization, private equity is expected to play an increasingly important role in driving transaction volume and deal value.

The podcast also includes perspective from EY Americas A&D Leader Raman Ram and EY Americas A&D Managing Director Mike Cadenazzi, as well as EY Americas Strategy and Transactions Partner Mike Iacono, on where larger deals are getting done in the A&D sector.

Key takeaways:

• North American airlines were profitable last year and it's expected that the rest of the world's airlines will also be in the black this year.
• Despite underwhelming market fundamentals, private equity is leveraging sector resiliency and capital availability to continue with strong buying.
• While pilot shortage is a looming issue, fleet availability is seen as a more immediate concern.
• Strategic buyers continue to shape their portfolios, even as they remain cautious about buying.