2025 Scorecard & 2026 Outlook

Ed Ballina
Hi, I’m Ed Ballina.

Alvaro Cuba
Hello guys, Alvaro Cuba.

Ed Ballina
We join you again for another episode of Manufacturing Meetup. Wow, crazy. Almost two years. Well, two years in. That’s  pretty amazing, Alvaro.  As you know, if you’ve listened to us before, this is a show where we kick back on our downtime and get real about efficiency on the plant floor.  It’s our opportunity to just  relive some experiences, bring in some new guests, and have a lot of fun. So as we’ve always begun, we have hats.

Alvaro Cuba
And we are now getting, yeah. And we are getting to the end of the year. So hope we had great Christmas. And now we are getting ready for new year. So in this case, I’m going to spend the new year skiing. So I’m getting ready with my gear, ski gear. How about you?

Ed Ballina
Where are, well, you can’t leave us in suspense. Where are you going?

Alvaro Cuba
I’m going to Colorado this time.

Ed Ballina
Very nice, very nice. I loved Colorado.  Keystone and Breckenridge were my two favorites up there. ⁓ lot of fun. So my hat is actually not mine.  This is a motorcycle school hat and it belongs to my older son Eddie who’s an absolute motorcycle nut. He literally has 30 different motorcycles. And

Alvaro Cuba
Yeah, it’s going to be great.

Ed Ballina
He was dating somebody that one day asked him, why do need all these motorcycles? And he went, like, you don’t understand. This one’s for this. And it was like, all the, why do you need more than five screwdrivers? Cause there’s Phillips head, there’s a flat head, there’s big, small. So that’s my hat.

Alvaro Cuba
I guess that was the end of the relationship. ⁓

Ed Ballina
I will not comment. I will plead the fifth on that one.  This is going to be a really fun episode because we get a chance to rate ourselves and make some outlandish predictions for next year.  If you remember, I was just looking back at our last year’s episode predictions. We actually had I think over 130 views. So we had some people watch it. Well, hopefully we’ll get your interest this time again. So today, we’re talking about predictions. going to rate ourselves in the predictions we made last year, and we’re going to make some predictions on what we think is going to happen in 2006. So Alvaro. Oh, 2026. I’m sorry. See, I’m 20 years off today. It’s a rough day. Oh my God.

Alvaro Cuba
2026 amigo. Run, run, amigo, before the year comes.  But first, before we start, please hit the subscribe button at the bottom of the screen so you don’t miss these conversations. So let’s get started.

Ed Ballina
All right. So we’re going to kick off our first segment by doing a scorecard of our predictions from last year, right? Because listen, if you don’t keep score, how do know if you win? So we made four predictions for 2025. We were a little scared, but you know, we thought we’d give it a shot. Today, we’re going to score ourselves to see how we did.

And we’re going to use a very simple red, yellow, green scorecard, right? So green was, we’re pretty close on track. Yellow was, we were maybe halfway there. And red, man, we really kind of blew that one. Now Alvaro came up with a light green,  which puts us sometimes somewhere between green and yellow, which I like.  So  with that, Alvaro, tell us how we did.

Alvaro Cuba
Yeah. Okay, let’s go with the first. We said industry 5.0 and we meant by that that there was going to be a lot of focus on people  to help industry 4.0, which was technology. No, and we really think that people is the one who makes things happen and have to be there to enable any technology that we bring. So we said there will be a lot of emphasis on skilled trade, a lot of emphasis on frontline workers,  skilled development and  resilience and new roles, people had to be in new roles. So I’m sure ⁓ you felt it because there was a big gap of number of people, skills. So there was been a lot of talk in the year about all these topics. So I think we hit it in the nail. So I think we deserve a green on this one. What do you think, folks? Green?

Ed Ballina
I’m there with you, I think we hit that one squarely, squarely on the nose. So we said, hey, connectivity, right? As this AI thing grows, right, we’re going to not just start focusing on individual manufacturing or warehousing or use cases. We want to push that out through the whole supply chain and outside of our enterprise into our customers or suppliers, et cetera.

Alvaro Cuba
How about the second?

Ed Ballina
So we thought, hey, we’re gonna see an expansion from pure machine health, kind of what Augury has really created a new category around,  and we’re gonna start shifting or seeing a growth into  process health. To be honest,  that one has been interesting. So we’ll talk about the outcome of that one in a second, but we thought we would see the expansion go into supply chain planning, quality control, maybe some of the functions that surround pure manufacturing as this thing starts scaling across the enterprise.  And we thought that AI and connectivity would be the foundation with smart manufacturing or for first manufacturing. So how did we do? Well, this was Alvaro’s great call here in terms of the color. 

You know, we made a lot of progress with AI adoption, right? But full end-to-end integration really didn’t go very far. Some of that is because there’s been some questions about how effective these large-scale AI projects are, and a little bit more focus on agentic solutions. But  there’s still a lot of interest, a lot of work in progress.  And I would say it would give us a light green, right? A little bit better than yellow, but not green all the way.  So, Alvaro, how’s that sound?

Alvaro Cuba
Yeah, I think it’s not all the way to bright, but light. Let’s leave it at that. About the third one, it was about sustainability. And what we said is that it was going to be a priority, but not as sustainability as per se, but it was going to be sustainability, meaning lines running better, efficiency. Reduction of waste and improve on performance. However, sorry to say it, Ed, but I think this one we deserve a red because unfortunately, I think it’s unfortunate, but understandable, sustainability was deprioritized for the most part in 2025. There was a lot of things we said, mainly people. A lot of hype on  AI and technology, and a lot of competing priorities with growth and cost and all that. So this was deprioritized. So we’ll see, but right.

Ed Ballina
Right. Yeah, yeah, wrong this one. But, you know, one I think, you know, silver lining is in AI, right? There’s a recognition that that is a way to help sustainability. And the other, you know, tiering of the numbers is the price of crude oil is down almost 20 percent versus last year, folks. So the huge economic imperative has whittled down a bit. But yeah, the red is well deserved. So let’s move on to brighter colors.

Productivity and production. Why did we say about that? We felt the companies had to balance productivity and production simultaneously because we really embedded a lot of cost, right, during the COVID years and the productivity challenges have really struggled. So, you know, the balance might shift, but you got to make gains in both.  So, we thought that companies would face this issue, this dilemma of pushing productivity while still trying to increase production demand, right? Because sometimes productivity takes on the look of eliminating production assets that are not that efficient. But if you’re not meeting capacity needs, then you’re kind of in a dilemma. So how did we do on this one? Well, companies started down this path, but there were a lot of headwinds, right? 

There were still issues with supply chain and getting goods from the market, et cetera.  And companies are still struggling with the payout of some of their AI initiatives.  And they’re trying to balance both goals, right? But it’s a very, very tough situation. So I would say we give ourselves a yellow, right? Because there was movement in that direction, but I don’t think to the degree that we expected or we needed.

Alvaro Cuba
Yeah. And the outcome, no? So we expected one to help the other and take it to the next level and not quite there. Focus on both, but not necessarily that synergistic.

Okay. Well, we had four predictions. You heard how we did it from green to light green to red to yellow, but to be completely open, I think we missed, totally missed one big one that has had a lot to do in the year, which is the cost pressure.

It comes from tariffs, comes from long supply chains and moving products from other countries. Commodities went up and down. We normally have changes in supply chain, but this year was specifically high. And I just read we have the highest tariffs since 1935 or something like that. So I think we really missed to see this one coming full disclosure. Okay.

Ed Ballina
Yeah, no, I completely agree. Or even, you know, the outside of the US, you know, the geopolitical climate, right? We’ve got hotspots in Europe, hotspots in the Middle East, you know, hotspots in Asia, now in Latin America. All these things have an impact on supply chain and business decisions because you don’t want to go invest $100 million building a new plant in a location that will be either isolated or highly tariffed or just in a war zone. Lots and lots that went on this year. So  I guess, Alvaro, now you’re gonna talk about some of these major themes that dominated our season two.

Alvaro Cuba
Yeah. As we were saying in our predictions, there was a lot to talk about people, workforce, talent. And we sensed that and we had several episodes  pointing to this. And we talk about how to attract the new generation in this gap where the old generation is moving out. There is this gap. If we don’t attract that generation, we need to compete with  the gig industry and we need to attract that people. We need obviously to upskill, reskill, but technology can help us on that.  In the last episode, we talked a lot about flexibility and how to use that to bring it.

And we had two fantastic episodes, one about women and one about veterans and  how we can attract those people into the marketplace.  And we also talk about how to change perspective, the perception on manufacturing. So bottom line, the gap, the labor gap is widening.

If we don’t do something,  we are going to be in more trouble than we are today. So we need to be very innovative and very open to recruit and to retain. And I’m sure you felt that during the year. So that’s why we dedicated all these episodes to that.

Ed Ballina
Yeah, it almost this whole people thing, folks, almost runs through every episode. I don’t think there’s one that we have where we don’t talk about in some way, shape or form. And it is requiring non-traditional solutions, right? Or working harder in those maybe underserved areas like let’s get more veterans, right? How do we get more flexibility to bring more women into the workforce, et cetera? Bucket two,  focusing on operational excellence and safety. So, we’ve learned that OPEX, right, operational excellence is a must, but it is enabled with technology. And there’s great new technology out there that takes the pain away from our traditional operating excellence projects, if you will. We see the opportunity to expand in two directions. One is across the supply chain and the enterprise, right? But also in other areas that maybe we don’t touch as much, right? So, you know, migrate into quality, into, you know, warehouse and et cetera. So you’re going deeper and wider at the same time. That’s the potential, but you got to crawl before you walk, right? So focusing on machine health is your ticket into the game. Once you’re in there, then there’s expansion beyond that into process health, which I think those two combined are kind of the killer app, if you will.

But at the end of the day, as we’ve said many times, nothing happens until you close the last yard. And people are still the ones that make that happen, folks. We can talk about robots, and I’m sure we’re talking about cobots and the little dog that senses everything, right? But today, people are still  the critical gap closure there.  And as experience leaves the workforce, right, you have to find a way to capture it, because there are thousands of years of experience that are walking out your door. And we believe AI and predictive technology can help you bridge the gap. Because if not, I’ve seen what happens in places where all of a sudden your most tenured person has got five years on the roll. And let me tell you, that is chaotic. So key message, let’s start with getting your equipment to run better. Because if it runs better, it’s also gonna be safer and it’s gonna be a better workplace for your people.

Alvaro Cuba
Well said, In Bucket three we also spent several episodes talking about AI and digital transformation. A lot of hype, lots of opportunity coming to that. Ed mentioned in a previous episode and also today about the ROI of some of the big investments.

What we have been saying and seeing is just putting AI in technology for the sake of putting it doesn’t solve anything, just accelerate the failure. So you first need to focus on people, as Ed said. Then you need to have the right process. When you have that and you put technology to accelerate that, the ROI goes to the roof. And we have seen it and we have dedicated several episodes to talk about that. We have a great example in one of the episodes that we talk about Fiberon and their experience on that. So, moving from,  it’s just the start, but we need to start the right way. We need to, right now, AI, it’s in the moment of insights, data predictive. We didn’t have nothing of that in the past. So let’s use it. And then once we have these three, so people, process in this data and this predictive, then we can move into agentic. So much more to come for sure in this area.

Ed Ballina
Absolutely.  So to kind of round out our buckets here, talk a little bit about supply chain strategy and business resilience.  We hint at, we more than hinted at it a few minutes ago, this was a very challenging year, right? And you know, we saw some things kind of falter  in terms of,  you know, the rollout of some of these AI projects.  And one of the things, that we see as an opportunity, if you’re going to launch an AI project or initiative, first of all, as Alvaro said, agentic is winning right now the race, but find a problem that you need a solution to. Don’t find a solution and try to find a problem to cure it, okay? You can get benefit out of that, but that’s a harder and longer road, right? Also, you need to think about this holistically. You need to include, obviously we’ve talked about our people and culture on the shop floor, but it goes beyond that.

You need to engage your clients and suppliers because you’re going to be making some demands of them that perhaps they’re not accustomed to.  And you know what, we’re seeing these geopolitical hotspots everywhere, right? Russia, Ukraine, Israel, Hamas, China Taiwan, frankly, you know, I’m not going to let the cat out of the bag with our predictions, but we don’t see a magic wand ending any of that stuff soon. We do see reshoring, and that’s starting to happen  in a, I’m not going to call it a huge wave, but it is starting to pick up momentum. The problem is we don’t have the labor to support, folks. That is the God’s honest truth. If there is one thing that will keep us from reshoring manufacturing with excellence is our labor situation that we have. So we have to fix this. So  we think  not to be too crazy, but we may see other major supply chain disruptions in next year, that make COVID look, you know, pale by comparison potentially. Anyway, so now big drum roll. Our predictions. Alvaro, you are on.

Alvaro Cuba

Yeah, yeah, now is the time, the scary time in the year. We have to make our predictions for next year. So let’s be brave. Let’s be brave. Yeah. So I’ll, I’ll, I’ll start with the first. And obviously we think this will continue.  Focus on talent is going to be huge. The gap is not going away. If any, is probably widening. So  we think that a lot of effort is going to be in attracting talent and  in reskilling. That’s one area. Skill-based hiring, skill-based trades, and skill-based managing in the plant, as we talked in our last episode.

And then flexibility, which is not going to be negotiable, especially with the new generation. So  just as a summary, would say innovation will be key. In one side, innovation from the business side to attract and retain these people. But think about it, if you do the things right, and you put the right people with the right skills, and then you accelerate the progress with process and technology, you free up the people. That makes that people to become innovative as well. And they will be the first to say, hey, why don’t we do this? Why don’t we do that? So we  engage them in helping us in solving the problem. So we think that full court press on talent will be one of the trends in 2026.

Ed Ballina
And you either innovate or you go away. Right? Or. Let’s innovate. Yeah, you’ll be innovating yourself into a new business if you don’t innovate.  Okay, prediction number two, AI. What do we think? Well, we think we’re going to see a shift from predictive to more prescriptive. So, there’s a lot of data out there that provides insights, but they don’t close the gap in terms of that’s great, interesting, what do I do with it? And how do I actually bring that to the floor? Because that’s where you see the benefit.  Some of that is naturally going to happen as this human AI collaboration matures. I’ve started playing with ChatGPT, and it is amazingly capable and extremely frustrating at the same time.

I literally spent 12 hours trying to put together a deck that I could have done on my own and probably be out in three. Okay. I tried Canva, I tried ChatGPT and then I finally pulled my hair out and did it myself in PowerPoint. So those issues are going to go away as you know, these interfaces get better. I don’t want to have to figure out how to ask GPT the right questions. You know, there’s people making a ton of money on coming up with, what are they called, those prompts for ChatGPT. So. That’s going to get better. We are seeing agentic AI leading the pack when it comes to return.  And we’re going to start seeing that showing up more and more in the shop floors. And just to remind you, what we mean by that is the use of AI to solve a very specific problem. Case in point,  I’m working with a company that is focused on driving Mean Time To Repair down. That is their focus.

There’s another company that is focused on using voice technology as the interface. So no more tablets or any of this stuff. Those are the ones that I see moving ahead. The big projects, they’re almost lumbering and they’re almost too big to generate the returns. So at the end, the question here, is not if, but how fast can we implement AI?  And the pace of that technology is just exploding.

 I use it for simple shopping. It’s peanuts. Yep.

Alvaro Cuba
And it’s so cheap. Guys, it’s so cheap to implement. It’s like, very, very, very cheap, fast. In three months, you can start seeing the results. So it’s not like the big implementations of the past. So big encouragement there, guys.  The third is we think, we see already and think it’s going to be even more, this growth versus cost pressure and the way to balance. Just a couple figures there. Garner survey of CEOs, 60% of the CEOs say that their priority in 2026 will be growth, growth and growth.

EgonZehnder survey to chief supply chain officers, they say 75 % priority is going to be cut costs because they are forced on productivity. But at the end, the business has to work. So both need to find a way. So what we are predicting here is that companies will need to become more strategic.

Supply chains need to become more strategic. And it’s the only way you can balance cost, performance, and resilience. Because remember, cost is one, productivity is needed. Performance is critical to support growth. And the third is what we mentioned about resilience is shorter supply chains, how you avoid the problems, the geopolitical problems. So you have to solve the three or find the magic center and thinking wider strategic and how to add value, not only how to reduce cost, but how to add value to the business.

Ed Ballina
Yeah, I mean, it’s a cost cutting strategy is great, but done by itself. I’ve never seen a company win long term just by focusing on costs. We’ve seen many examples where they deliver short term results and then they flame out because they forgot the more important part of the house.  So we’re down to bucket number four and that is what do we think is going to happen in the supply chain? Well,  I think we’re going to see a continued push for reshoring, unshoring initiatives. It’s almost every other day you hear of some companies spending $100 million building a plant or even more than that with semiconductor business, et cetera, etc. All that is coming.  And that’s really great news for us here in the US.  I believe Made in America becomes a competitive advantage again  because we do have the potential to make amazing goods in this country.

And we have the way to do it as well.  So that reshoring is coming.

Alvaro Cuba
And that’s reinforced our prediction number one, because if you reshore and you don’t have people, how you are going to operate, how you are going to increase production. So guys, there you have our predictions. And by the end of 2026, we’ll come back and we’ll tell you what happened to that. Yes.

Ed Ballina
Yes. You can’t be sure. That was the drum roll. We’ll grade ourselves.

If we mess this one up next year, I will have a crystal ball as part of this forecast, so I can kind of see what I can get back to my Afro-Cuban roots in divining this stuff. So it’s been great talking to you again. This is always a fun episode. They’re all fun. This one’s a little different because we get to kind of throw our swagger out there and score 12 months later. So what’s a big thing for 2026 folks? It’s, it’s you gotta, you gotta really thread the needle, right? The things are coming together, people, technology, operations, supply chain. You can’t manage these things in a silo. They need to be integrated and managed together. That’s the only way you get really, really good leverage. But not to continue beating the dead horse of the whole year, focus on people, right? 

Listen to our previous podcast. There were some really interesting points made there by Rahil and Ari  of simple things that you can do to help drive retention, to give your people career opportunities, and it doesn’t cost a ton of money. And thankfully, technology today is so amazingly cheap and accessible, as Alvaro has said, right?

No longer are we talking of three, four-year payback on an SAP implementation. On some of these points, you’re seeing value in three to four months. Crazy.

Alvaro Cuba
Service as a software as a service. So  you pay as you go. But Ed, it’s completely right. I am in violent agreement, holistic view, strategic view,  and start with people.  So this is the way we come to the end of another episode and to the end of the year.

This is the end of our season two. We  are very glad that you were with us. We want to thank you for being with us this second year and  for helping us to grow this meetup and  try to help to move on manufacturing. And we’ll be here back for season three in the spring of next year. So we’re really looking forward to our third year with you guys. And  if you enjoyed this episode and you enjoyed this year, please subscribe, follow us, like us if you are watching in YouTube and leave us a review if you are listening on iTunes and please share the podcast with your friends and let’s come meet up, discuss, relax and enjoy.

Ed Ballina
Fantastic. Thank you. Thank you for another year.  Two years ago, if you would have told me that I was going to be doing a podcast with Alvaro,  I would be like, I have no idea what you’re talking about. This has been incredibly rewarding. A lot of fun. We’re starting to get triple digits on our views of the podcast. We’ve got some reels that are over 20,000 views. Yeah. Yeah. We’ve had some that near a thousand. So I appreciate it.

Alvaro Cuba
And more sometimes, and more, sometimes more.

Ed Ballina
I will be happy one day ever when I’m walking through the airport and somebody stops me and say, Hey, you’re the M.M.U. guy. Can I get your autograph? So, yeah, that’s what I know. We’ve made it, buddy. Anyway.

Alvaro Cuba
You have that today Ed, everyone stops you at the airport. Say, Hey, my friend, amigo. Guys have a great new year, happy new year. And I hope you enjoy the holidays with your friends and family. And thank you again.

Ed Ballina
For other reasons, amigo. That’s funny.

Yes, yes. Happy holidays to you and your family.  And if you want to keep this conversation going, you can email us at mmu@augury.com. We also have links to our show notes.  And thank you again. Happy New Year and  see you next year.

Alvaro Cuba
See you next year, bye folks.