Foley Manufacturing Sector Update

This news summary is provided by Foley’s Competitive Intelligence Team to inform business leaders of recent news and developments relevant to the Manufacturing Sector.

Analysis by Julie Dautermann, Competitive Intelligence Analyst

Key Developments

The most recent article in Foley & Lardner’s Supply Chain Disruption Series shared a number of key takeaways pertaining to accurate and compliant regulatory disclosures in areas including COVID-19 pandemic and related disruptions, the Russia-Ukraine conflict, and climate-related risks. Click here to subscribe to the series.
Foley & Lardner LLP Partner Jeffrey Kopp is quoted in the Law360 article, “Averted Rail Strike Highlights Perils of Strict Absence Rules,” discussing how stringent point-based attendance systems continue to stir labor unrest and draw the ire of the U.S. Equal Employment Opportunity Commission (EEOC).
Foley & Lardner LLP Partner Vanessa Miller is featured in a Q&A about “What We Must Do To Create Nationally Secure And Resilient Supply Chains” with Authority Magazine where she gives insights on how manufacturers and policymakers can address recent supply chain challenges.
Foley & Lardner Partners provided six strategies to enhance global supply chain flexibility beginning with the contracting stage through daily operations.
The National Association of Manufacturers recently announced a legal victory after a federal judge “vacated the Securities and Exchange Commission’s suspension of a 2020 rule regulating proxy advisory firms.”
A whitepaper from the Manufacturing Leadership Council examines how global megatrends including sustainability, digitalization, labor shortages and the Internet of Things will impact manufacturing business decisions.
The EY 2022 Supply Chain Sustainability Report indicates many senior supply chain executives have long-term sustainability goals, but experience challenges including upfront costs, measuring return on investment, and achieving end-to-end visibility throughout the supply chain.
The KPMG 2022 CEO Outlook found 50% of surveyed CEOs are “pausing or reconsidering their existing or planned ESG efforts over the next six months,” due to concerns about the impact of a potential recession, and 34% have already done so. The survey also notes 72% of survey respondents believe ESG scrutiny from stakeholders will consider to accelerate.

Smart Manufacturing

The White House Office of Science and Technology (OSTP) released a Blueprint for an AI Bill of Rights which includes five non-binding principles to “guide the design, use, and deployment of automated systems to protect the American public in the age of artificial intelligence.”

Supply Chain

A new report from KPMG and the Association for Supply Chain Management predicts the frequency and intensity of supply chain disruptions will persist due to the growing list of market volatility drivers such as disease, geopolitical conflicts, ESG and cybersecurity. The report accompanies the organizations’ launch of a new Supply Chain Stability Index assessing how various organizations respond to market volatility.
A global biopharmaceutical executive quoted in The Wall Street Journal indicated the COVID-19 pandemic highlighted the importance of the pharmaceutical supply chain, and the vaccine rollout will help provide a model for how crucial medicines are developed and distributed in the future.
Supply Chain Dive reports a number of leading consumer packaged goods companies have pursued acquisitions as a way to increase manufacturing capacity and mitigate the risk of supply chain disruptions. The article also notes buyers need to carefully consider a number of factors prior to an acquisition, including facility efficiency and projected demand for certain brands or products.
Reduced milk production at U.S. dairy farms and processing plants is leading to cost increases and supply constraints for butter, according to reports in The Wall Street Journal and Supply Chain Dive.

International Trade and National Security

A revised forecast from the World Trade Organization projects global merchandise trade volumes will increase by 3.5% in 2022, up from a previous estimate of 3%. However, volumes are predicted to increase by just 1% in 2023, from a previous projection of 3.4%.
Reports in The Wall Street Journal and The New York Times indicate the Biden Administration may soon announce new restrictions affecting exports to China for certain types of semiconductors and semiconductor manufacturing equipment. A related report on this topic was featured in Reuters last month.

Sustainability and Product Stewardship

The National Association of Manufacturers expressed its support for the U.S. Senate’s decision to ratify an amendment to the 1987 Montreal Protocol which phases down the use of hydrofluorocarbons in favor of more efficient alternatives.
Bloomberg Law reports the state of California will prohibit the manufacture, distribution, or sale of cosmetic products (A.B. 2771) containing intentionally added perfluoroalkyl and polyfluoroalkyl substances (PFAS), and restrict their use in certain categories of textiles (A.B. 1817).
According to a recent Gartner survey of supply chain leaders excerpted in Supply Chain Management Review, nearly three-quarters of respondents expect circular economy principles to boost profitability between now and 2025, but supply chain organizations are currently applying the principles to less than 20% of their product portfolios on average.