Walid Ali, artificial intelligence in manufacturing, Microsoft, joins Peggy again to talk more about AI (artificial intelligence) as it relates to manufacturing and sustainability.  He says the workforce has been drastically challenged with what has happened with COVID-19 now that we are facing a demand for efficiency increase, a demand for better productivity, and a demand for also scaling the workforce. He also discusses how the workforce is a foundational pillar in any digital transformation and how to empower them. This discussion really talks about the disruption and innovation that is creating new opportunities that are good for businesses looking ahead.

Below is an excerpt from the interview. To hear the entire interview on The Peggy Smedley Show, visit www.peggysmedleyshow.com, and select 03/21/2021 from the archives.

Peggy Smedley: Walid, you and I have talked so many times about what’s happening in this space, and I thought it would be really good, before we get started again, to recap what we’ve been talking about at this point, so I thought you can give an update of where we were the last time, any new changes? Can you give a summary of what you think where things are at with the state of manufacturing right now?

Walid Ali: Oh, absolutely. When it comes to manufacturing, especially where we are today and of course, COVID-19, it’s yet adding more momentum, more tailwind to an already existing trend of empowering manufacturing, manufacturers, and manufacturing workforce to be able to lead to the next era of our demands. It’s becoming so mundane on all of us now to support this disruption it touches. Unfortunately, over the past year, as we’ve seen it touch every aspect of our life and it’s not missed anyone, neither the enterprise-like organization that belong to the industry coalitions like MxD, or NAM or CESMII and/or even the government and the federal agencies. We all learned about Biden’s new executive order overviewing the supply chain, which by the way, has a lot to do with manufacturing in multi-segments of these manufacturing. So with that, I’ve see nothing but more momentum for us to accelerate and expedite our move forward to empower the industry and the stakeholders.

Smedley: With that in mind, when we look at the big picture, let’s talk then about AI and manufacturing, and then generally the workflow, because I think the impact on workflow really talks about that because I think when we think about employees, I think when we think about where we’re headed, because when we get out of COVID, as you just talked about, it’s not the same team, it’s not the same tools, it’s not the same processes—so things are a little different. We’ve had to learn different things and now things are changing and they’re changing in a different way. So that workflow, how we go about it is changing, would you agree?

Ali: Oh, I couldn’t agree with you more. As a matter of fact, the workforce, as exactly as you put it, has been so drastically challenged with the disruption that happened with COVID-19 that now we’re facing a demand for efficiency increase, a demand for better productivity, and the demand for also skilling the workforce, either the returning workforce or the new workforce that are entering into the new workspace. With all that, I see it really as an enormous amount of opportunities for us to be able to hit multiple birds with one stone, being able to address all these objectives at the same time. Because it has dictated on all of us, that disruption that is driving us back to the drawing board to come up with the most efficient methodology for achieving the best at the least cost with the most empowered workforce that we drive into the future.

So, understanding the skill gaps, understanding the challenges for their ever-growing automation and industry impediments level of adopting AI, adopting data, adopting data at scale, digitization, digital transformation. But with all of that, also the ability to empower our workforce because we come back to what we learned from COVID-19, we have to empower our workforce, otherwise no matter what we do, we’re going to fall short from achieving our objectives.

Smedley: Now that’s an interesting point, to empower our workforce, because we look at them, what are those things that we have to do? Because we went out of COVID, we talked about this, you and I, that we just ran out of our working environments. We all left and we weren’t even prepared. We all went home and many of our plants shut down, there were key operations that continued, but when we look at this now, everything got disrupted. And now we’re having to go back and look at our operations and say, “How do we put them back in place, looking at it differently.”

So I guess the question would be is, what are some of those manufacturing risks that exist when a key component has to step up and look at what they were in the past to where they’ve got to look at operations when they were off schedule? Because now they have to think about, “Look, we didn’t do things the way we did it. And now, if we don’t do it a different way, our competition is just going to eat our lunch.” So it’s like you got to think differently and you’ve got to think about digital transformation differently, and I think it’s a challenge because you have to say, “Where do I start first?” Going back with that skilled workforce that you just mentioned, and I think it’s not easy.

Walid Ali: Well, nothing is easy at the beginning until you’re going through it, then you wonder, “Why haven’t I done that a long time ago?” So, it could really be the blessing in disguise that we went through with the pandemic. In reality, we have had enormous assets in our disposal, but being able to align them properly and exactly to your point, not to do the same thing twice expecting a different outcome because it’s not going to happen, but getting you really able to align these multi-resources, including, I mean, including it is an understatement, workforce is a foundational pillar in any digital transformation.

Being able to understand what are the opportunities to scale the existing workforce against additional transformation requirements into the future. Understanding where our ecosystem, our supplier, our vendor, our vendors’ vendors ecosystem, the disruptions and risks and also cyber risks associated with this enormous supply chain would rely on to produce anything, like even a small piece of electronics or a small device, but even medicine. Being able to understand these implications on the digital transformation that tie into the workforce, the workforce gaps, I really hate to say workforce gaps, I always say workforce opportunities. Because with that, comes opportunities to whoever would be able to address it successfully, to your point, I guess, competition.

And lastly, with this enormous amount of data and being able to decipher through it and come up with the best heuristic methodologies and methods for achieving the end targets, it really shows the value of working the AI and data in a concise way to achieve all of that, including even the work that we can do for skilling the workforce. Understanding where in a specific geo, in a specific industry, in a specific academia ecosystem, the tie-in between gaps, opportunities, and skillsets. And we see a lot of platforms that people are using today for achieving that. Of course, as a Microsoft, we’re very proud of the LinkedIn platform that we have that is actually becoming a basis for people’s career, juggling that, which by the way, ties very strongly to industry additional transformations, manufacturing ability to drive into the future.

Smedley: So then that’s a great segue. Where has manufacturing evolved in? I would ask the question, where were we 10-years-ago to five-years-ago, two-years-ago to where we are now, to where they have to go? Because, I think again, you just talked about data, and metrics and KPIs (key performance indicators). I think the industry needs to understand if they don’t track it, they’re not going to survive. And if they haven’t figured that out, they understand that and they understand they have to cut costs, they have to improve inventory, they’ve got to improve the quality, there’s a lot of moving parts right now and they’ve had to look at what they’ve done in the past to where they have to be in the future.

And again, that’s where AI, and the IoT (Internet of Things), and all of these things and going to the cloud where they’ve been traditionally within the four walls. They’ve done everything, now they’ve got to push everything out, and you mentioned cybersecurity. So again, there’s a lot of things going on that I think they have to consider. So this past decade has really changed, very dramatic for them in disruption. So how do they envision that whether they… I know I’ve thrown a lot out at you here… whether they’re a small, medium, or a large company?

Ali: Yeah, great question. I think the best way to look at this is contrasting the two pictures, what used to happen 10 or 20-years-ago versus where we are today. And I think the best analogy is, I’m going to borrow your own phrase, understanding what the needs are within the four walls that construct their own environment versus what they need from the construct of the global dependencies and the local ecosystem, transportation system, pricing, vendor supply availability, then the risk, cost pressure pricing opportunities, tons of other cues that used to be dealt with on a simpler sheet book with the internally-driven focus, now has to be externally driven focused with a really explosion of data. What we’re seeing manufacturers are today is, they know this is the premise where they have to succeed and drive their next opportunities in the future for them to be persistent in their success and their value creation, value proposition.

Where they need to do more, and we’re here to help, and we’re really excited to be a part of, as I said, a lot of coalitions, enterprise, even government activities related to that is the adoption of cloud and AI. The beauty of cloud is AI at scale where you’re not really hindered by the complexity of the problem because cloud is elastic in its nature, and it allows you the ability to drive that as we do from our side at Microsoft, for example. But being able to tie your own criteria of success to these multi-criteria and multi-conditions, and in many times, they are contradicting. And then many times being able to decipher through them requires what we call AI and being able to really sniff through the best hedonistic mythologies risks associated with one path versus the other, juggling multi-paths and coupling multi-strategy strategies and life scenarios through AI and data.

This is really where the opportunity where we see the majority of those who are ready to really hockey stick, after COVID-19, are getting ready to adapt. So where I see the opportunity for small and medium businesses, for them to be able to catch up, is adapting the ability to drive this evolutionary path with the right stakeholders. No one can succeed without understanding what are the dependencies between their vendor, their purchaser, their consumer, their channels, and also the understanding of their product press, product timeline, whether it’s a small, or a medium or large. With small or medium, the scope is quite different, so tying it in to the right players who have done it in the past, the real incumbents in the area of AI and cloud would be this conduit to help them lead forward into that next phase as we’ve been doing, and we’re excited to continue doing in the future.

Smedley: So when I hear you talk, it makes me think about the data-driven decisions that have to be made, and they have to be made with partners. So what I’m hearing you describe then is, in the manufacturing environment, they’re not alone, they’re not on an island. When we talk about the supply chain then, they have to make rich decisions based on data-driven decisions with their partners in order to achieve successful supply chain decisions to be efficient using the cloud, using AI, making this all happen, are they doing that successfully? Are they doing it a little bit at a time, or now because everything got disrupted so fast, does their movement have to be disruption, continuing to be as fast as it was in COVID in the past 12 months?

Ali: Yeah. Well definitely, the disruption is enforcing a degree of agility that organizations have not witnessed for quite some time, to say the least. But in reality this has not been missed on anyone thinking, but sometimes as you’re going with the inertia and driving your day-to-day operations and business law processes, being able to adapt this disruption and innovation becomes almost a orthogonal at least perceived as almost orthogonal to your success. But with the disruption that we’ve seen with COVID-19, it became evident that no one can shy away from that.

So, to answer your question regarding where everyone is in their journey, it’s a maturity journey and different players occupying different places from this wave of maturity. Some of them are on the cutting edge, are on the leading edge, some of them are adapting, ramping up, some of them are ready themselves. What is extremely important is, no matter where you are on the curve, you have to understand, and get to help and work with all of these different players in the ecosystem. One has to understand that the pressure for disruption and innovation has just got accelerated, and we expect this to continue in the coming few years as we come out of the COVID-19 episode that we all went through.

Smedley: So we’ve talked about… manufacturers fear that AI is, and I hate to say this, replacing employees, but it’s not, we have to look at what that is. Now, let’s talk about this upskilling, because manufacturers absolutely, if they want to stay competitive, need to invest in technologies that invest in every step of that manufacturing process. We know this and they need to understand that the tech that’s going to help companies quickly see improvements that can be made in the processes, right, we understand that. Perhaps a better way to ask this is that what way can manufacturers actually see or improve their vendor vulnerability, their upskilling of staff? I mean, those are vulnerabilities that they need to see in all of the stakeholders that they’re working with, all of the collaboration. I mean, those are the things that are ultimately going to improve their profitability, it’s going to improve everything they do and it’s going to do it quickly. How do we help them understand that?

Ali: Great question. As I said, I think it’s becoming even clearer than ever before that the tie-in between digital transformation and success to meet the requirements of these digital transformations will require empowering and skilling the workforce, workforce reskilling, rebuilding the workforce premises, empowering… I always use the word, empowering the existing workforce, because there are specific knowledge and amounts of know-how and information, and the existing workforce, you cannot replace it by the smartest data decision, data support system. But in the meantime, being able to couple this known methods and know-how with automation and AI and being able to decipher huge amount of data beyond the comprehension of the human being, being able to couple them together is going to be crucial to adapting the workforce skilling. They go hand-in-hand and one cannot replace the other. It’s literally different builders building the same foundation for us to be successful.

But being able to tap into this will really require for us, the whole manufacturing industry, to be aware of where the trends are. And we should also utilize, as I said earlier, we should utilize enterprise. Great for the folks who are listening to our conversation today, they are getting that exposure. But we also have other coalitions that are with, as I mentioned earlier, with MxD, within NAM, with CESMII, there is a huge amount of knowledge available for the public, for anyone in the manufacturing space, whether they are member of the coalition, or just browsing through the contributions with these coalitions.

In addition to that, for every manufacturer, it’s clear that there is a need for empowering or reskilling the workforce, one has to be scrappy and understanding how to fill these gaps, but bluntly. Sometimes its courses offered in the community college where my factory floor and most of my workers are. Let’s get the license, let’s have the partnership. These are some authentic few programs that we at Microsoft pride ourselves in driving. We have also great programs where we tie in our contribution back to the society with key institutions, with key enterprises, with key governments for us to empower the ecosystem, the population for them to be able to address that challenge. It is really an open invitation for folks to understand what’s available at their disposal for them to meet tomorrow’s challenge.

Smedley: Walid, we can’t leave all of this without really talking about what’s happening today. We are now getting into a green world, we have to have a green environment. Let’s talk about what manufacturers have to do to be more sustainable, because I think this is a very critical point or juncture in their whole world to make that transition.… How do we get them to move that needle, so to speak, so they’re a part of the game? Because they’ve got three scopes, they’ve got to do it, and Microsoft is leading the charge on this.

Ali: Yeah, we’re very proud actually, us from Microsoft side, we’re very proud to have a very solid sustainability journey. But we also found out that, not only us but even Harvard studies, there is a huge correlation between adoption of sustainability and really business profitability. And being able to drive both is becoming a mandate for business success. It’s not only because we want to be good citizens of the world and would like to help the environment, but it’s really good for good business for us to have the sustainability constraint as we start building our own comeback after the events that we mentioned of construction. Circular economy and being able to drive the resources loop where market products, market resources, driving efficiency while reducing carbon emissions, at the end, all of this when they get tied together, they drive actually business excellence and increased profitability in the long term.

So, as we were talking earlier, disruptions, there is almost inertia to continue doing what you’ve done in the past, but if you don’t disrupt yourself, you get disrupted and that’s the nature of evolutionary economy that we’re seeing. Sustainability and AI in that overlapping area between what can be done versus what is easier to be done is something we have to always challenge ourselves so that we maintain long-term successes for our own business and our own environment.

Smedley: Do we have to look at this also from the idea that right now, when we say it’s not just good for the environment, but we’ve had 30 years since the industrial revolution, thinking about all these things, thinking about we’ve wanted this make-take-waste society, we’ve had all these products. But now, we have to think about, “Where are we going to put them in all these landfills?” But now you have something to design it from the beginning, and the idea now, as manufacturers, you can alter what you’re doing. And when you do that, you have less waste, you have less production loss. I mean, can they understand that from a sustainable standpoint that AI can show you that, can give you the insights that you didn’t have? And that’s where now you could see things and you can use your team that you don’t have as many people because you can upskill them to do other things. I mean, are we getting them to see that technology is giving us the insights to be able to understand some of that?

Ali: 100%. I’d be more than happy to share with you, Peggy, for those who are listening to us, a few pointers for them to look at some of these dashboards or metrics that we track. We track actually, the implication of adopting the sustainability strategy, adoption of clearing our sourcing of material, clearing our understanding, the grading of vendors, and the supply-chain consistency with its resiliency against sustainability, tying it all together and that it has the environment scaling and ESG tools that many of these organizations, us at Microsoft, and many other leading organizations in the world, are adopting. So that’s where it comes back to the notion of data, because really comprehending that value will dictate on us understanding the dependencies, the ecosystem, tie-in to these dependencies, the supply chain, the vendor, the vendor rating, the vendor risk against the ratings.

We’ve seen it during COVID-19, we’ve can always go to a specific manufacturer, but at the end, the material again, masks, or whatever are not meeting the objectives and it got tied into a poor susceptibility target. So usually, being able to tie them together through this dashboard is really the ground tool for corporations, for companies, or for small businesses for them to understand where they are going into the future. We, at Microsoft, we’re very happy to share our sustainability report and I just shared it recently on our target for carbon neutrality. And also the tools, including the ESG and other dashboards that we’re measuring, and showing the impact of the business, and then the cost and/or associated outcome upskill for business related to these productions. So definitely, AI is the best tool to drive these dashboards and metrics as they comprehend all these different streams of information into the disposal of one dashboard at our disposal.

Smedley: Walid, we’re running out of time and I had so many more questions to really talk about workforce readiness in our food, and how we’re doing everything. But just summarize for us where you see AI contributing right now in just our ecosystem. Because right now, we all have to think about what we leave future generations. We have to think about how we reinvent and use AI to help us build, create, produce a better world. And I think that’s what you’re striving for right now is how we use it in so many other creative ways.

Ali: 100%. Then the manufacturing is starting to become, again, which is really great news for all of us, it’s becoming the backbone for all these new disruptions and innovations in our world for us to have a sustainable world, for us to have the efficient farming, the enough production of food at scale. It really all ties in to the right manufacturing, underlying mechanisms, and tools and productions. We’re very proud of our partnership with Corteva, for example, where they are leading the chart on how they are driving future farming products, and how carbon control and nitrogen sequestration and building the right tools for farming. It is really building the right tools and equipment that is going to help us achieve this healthy and wealthy environment for the future.

And guess what? When you scratch the surface underneath all these great disruption innovations, it’s all data and AI that is driving that fulfillment. So I’m very excited to have it as the arc of my career, quite honestly, on my personal side. But for us all to be witnessing this new disruption, to be all parties in this almost a new revolution in the way we’re thinking of our world and how manufacturing is driving us to achieve that, it’s really great news for all of us. I’m very optimistic and I cannot wait for tomorrow.

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