Manufacturing’s Missing Link: An Industrial Hemp Supply Chain
Every industry is rapidly changing in ways that no one could have predicted. COVID has created a clear separation between businesses that were stuck in their old ways, and ones that were eager to innovate.
The inconvenience of social distancing is further driving technologies like automation and robotics. These changes are coinciding with a shift in the court of public opinion toward sustainable products. Now, more than ever, innovation is front and center within every board room in America.
So far, what has made the 2020’s so difficult for business leaders is the fact that every industry and every company needs to respond to the changing times differently. There is no one ‘tried-and-true’ success path for any business over the next few years.
The uncertainty of what will happen over the next 12-24 months is something that concerns most businesses and their employees.
So, in a world where the speed of change is increasing every day, business leaders are left asking “what’s next?”
Changing times are creating a whole new world of opportunity in each sector of business. Those who don’t leverage this time of change to evolve are going to be left behind by those who do.
Each industry is different, so it can be difficult to see where the market is moving.
But, one of the most reliable tools business leaders can leverage to make better decisions about the future are trend lines.
Trends come in all shapes and sizes. Things like the stock market, the unemployment rate, and interest rates are all data points at any given moment in time. If we look at all of those data points over a period of time, we can start to identify trends.
It’s difficult to turn a blind eye when trend lines are clear. But, many business leaders are afraid to look at the trends that are relevant to them because it will force them to realize that there is no path forward that doesn’t involve change.
When we look at the manufacturing of goods, we can easily find several trend lines that can help us develop assumptions that have a high level of certainty.
- Sustainability trends in consumer behavior.
- Lightweighting trends in mobility.
- Cost-cutting trends in manufacturing.
These are the types of trends that only grow over time. Let’s take a look at each trend to better understand how it will impact manufacturing for years to come.Sustainability Trends
The demand for sustainability has been gradually evolving for decades. Much of the initial push came from the Obama Administration when they created incentives for electric vehicles and solar power. For the first time ever, the green movement was propelled by large corporations and investors.
Coinciding with the shift in incentives was a shift in generational ideology and buying power. The younger generations watched the older generations treat the planet in a way that was unsustainable. The food, water, land, and air were all exploited. Plants and animals suffered the consequences of human decisions that were made in the name of profit.
Because of this, younger generations started to demand that the products they purchased and the brands they represented stood for sustainability. This created an environment where it was ‘cool’ to be ‘eco-friendly.’
Utilizing things like electric vehicles and compostable packaging was previously reserved for the wealthy folks. But, now that sustainability is so commonplace, eco-conscious consumption has become less about the status of opting in, and more about the shame of opting out.
Sustainability went from high-end and rare, to affordable and widespread. Today, sustainable materials have hit price parity with mined and petroleum-based goods.
Because hemp-based materials are stronger, lighter, and cheaper than legacy materials, there’s no reason not to choose them.
Over time, companies that continue to rely on toxic materials will have a difficult time validating to their shareholders the reasons why they haven’t explored bio-based alternatives. As the pressure increases, more and more manufacturers will transition to materials that can create positive and sustainable outcomes for all stakeholders.
What makes these sustainability trends so powerful is that they are all moving in the same direction.Lightweighting Trends
Unfortunately, objects that move are subject to the laws of physics. This means that it takes more energy to move heavier objects. For many goods, the only time weight becomes an issue is during the shipping process. But, for the mobility sector, weight is an issue every time the engine gets turned on.
Companies that manufacture cars, boats, and planes have all focused on reducing the weight of the vehicle. In a previous article, we spoke about many of the implications of removing weight from objects that have engines.
- Lighter vehicles can accelerate faster.
- Lighter vehicles can go further.
- Lighter vehicles can turn smoother.
- Lighter vehicles can carry more weight.
- Lighter vehicles get increased miles per gallon.
These statistics create massive implications on the reduction of carbon dioxide when we take into account the billions of people that are moving around the planet on a daily basis.
Advancements in the plastics and additives industries over the past 100 years have allowed manufacturers to create lighter end products. This lightweighting movement that is happening throughout the mobility sector has helped create innovations that weren’t possible when we were reliant on steel.
Now that our vehicles are lighter than they have ever been, there is no reason for manufacturers to turn back. Although the materials may change, the lightweighting trend will continue for the foreseeable future.Cost Cutting Trends
The cost cutting trends in manufacturing all began with outsourcing. Business owners knew that they could lower their cost of goods sold if they brought their manufacturing overseas.
This was great at first. Companies could increase their margins, marketing budgets, and share buy-backs just because they opened a manufacturing facility in a different country. But, over time, managing these supply chains has become a nightmare. And, on top of that, managing intellectual property has been an impossible task. Many of the foreign countries where manufacturing is the cheapest do not protect American companies.
Gradually, American manufacturing has started to rebound. One of the driving forces that has helped American manufacturers compete with overseas manufacturers is automation.
When labor costs are $15 per hour in America, and $2 per hour overseas, it makes it very difficult for American manufacturers to compete. But today, industrial equipment is highly automated.
Our industrial hemp processing facility will have a throughput of 60,000 pounds per hour. This can all be run with one employee.
This is just one example of a domestic supply chain that can now compete internationally because of automation.
But, you may be asking yourself, how is cost cutting going to impact manufacturers for years to come?
Regardless of where a product is manufactured, what it’s manufactured with is becoming increasingly important. It’s not enough that our industrial hemp supply chain will produce raw materials that are stronger, lighter, and more sustainable. If the materials are not cheaper, then companies have a hard time warranting a shift toward a new raw material.
Most analysts who follow trend lines would not predict that any manufacturing companies would increase their costs.
This means that cost cutting is here to stay.Why Are These Trends Important?
When we set out to build an industrial hemp supply chain, we looked at the trend lines in manufacturing to see where we could find a home. Our management team made sure that our market penetration strategy was data driven, not some gut feeling or recommendation from a friend.
We looked at every industry and identified the barriers to entry, and the tactics needed for successful implementation.
We found specific trends within the plastics industry that coincided with our industrial hemp supply chain.
- The increased use of plastic because of reduced cost.
- The increased use of plastic because of reduced weight.
- The increased use of compostable and biodegradable plastics.
- The increased usage of plastics compared to other raw materials.
These were all trends that told us that utilizing hemp as an additive for plastics was going to create foundational shifts in the manufacturing supply chain.
So, you may be asking yourself, what assumptions can we draw with a high level of certainty?
Well, I’m glad you asked.
- We know that plastic is a raw material that will be utilized more and more across different areas of manufacturing.
- We know that industrial hemp can be used as an additive to plastic to make composite materials that are stronger than steel, titanium, and other high-performance materials.
- We know that an industrial hemp supply chain can help manufacturers build stronger, lighter, cheaper, and more sustainable products.
All of these facts lead us to believe that the missing link in the manufacturing industry is an industrial hemp supply chain.
With this material, manufacturers will be able to create products that have never been possible.
Customers, employees, investors, vendors, governments, and our surrounding communities expect today’s manufacturers to lead us toward a more sustainable future.
Join us on our journey as we build a world out of hemp.