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Crain's Grand Rapids Business Brief

Crain's Grand Rapids Business

Crain’s Grand Rapids Business senior writer Mark Sanchez talk about manufacturers embracing artificial intelligence, office furniture maker Steelcase seeking a competitive advantage by aggressively reducing carbon emissions, and Priority Health is expanding into Indiana and Ohio.  

Mark Sanchez: It's the number two health plan in Michigan. 1.3 million members, majority owned. I think Corewell 95% owns Priority Health. And this of course is the former Lakeshore and Butterworth HMO that those two came together many years ago to form Priority Health. It's grown into the number two health plan in Michigan. And now it's for the first time going to cross state lines. This is a deal we wrote about last week. It announced a deal with Fort Wayne-based Physicians Health Plan of Northern Indiana Inc. It's out of Indiana and South Bend and Priority Health is acquiring this health plan. It's got 52,000 members in Indiana and Ohio. What makes this an interesting transaction is think about employers who are in maybe some of those border markets. Think about Berrien County, St. Joe, South of Battle Creek, Calhoun County, those markets South of Kalamazoo. They are maybe on one side of the border, but they have employees who live on the other side of the border. This now potentially gives them a single solution that works in both states. And for Priority Health, there's a big business opportunity there to pick up those types of employers, not only to just simply grow in those markets organically, but also those employers that are based in those border markets. And they do business on both sides of the state line. So, it's a big opportunity for Priority Health. They think the deal should close by the end of 2024. It needs regulatory approval in both states, but it's certainly a big move by Priority Health.

Patrick Center: So, we see that competitive advantage taking shape in health insurance. Steelcase, it sees a competitive advantage with a new plan to cut carbon emissions 90% by 2050. That is aggressive.

Mark Sanchez: That's an ambitious, aggressive goal by Steelcase. You know, for years, one of the leaders in the office furniture industry based here in Western Michigan and Steelcase rolled out this plan at the NeoCon show here a couple of weeks ago down in Chicago. Basically, as you said, it wants to eliminate most of its carbon emissions over the next 26 years by 2050, a 90% reduction. And it's not just what Steelcase generates through its emissions and through its operations, but also wants to run this down through the supply chain. So, all those suppliers out there as well, you know, that entire value chain that the CEO Sarah Armbruster talks about, it's embed these practices, these sustainability practices throughout the supply chain. It's really looking at going about this in a number of ways, both through the operations, the emissions, about two-thirds of their carbon emissions reduction will come through what types of materials they use and how they design products and produce products. And then there's also, you know, how we transport products and looking at energy efficiency, onsite solar energy use, reducing waste. So, as you said, it's really an ambitious plan that Steelcase rolled out here a couple of weeks ago. And give them credit for also offering a transition plan of really planning this out, how they're methodically intending to achieve this goal over the next 26 years. And you are seeing more corporations beginning to really sign on to this type of practice, this organization that Steelcase is working with that has these voluntary guidelines. It's worked with about more than 5,000 companies around the world. So, Steelcase is really jumping on this train and it's again committed to reducing its carbon footprint, carbon emissions by 90% by 2050.

Patrick Center: That's corporate culture, but in the headline it reads Steelcase sees a competitive advantage. So where does it see that competitive advantage?

Mark Sanchez: Well, you talk about just this ESG, environmental social governance, uh, that's become, uh, significant in corporate America these days, although in the lately you've seen some pushback to it. There are companies, especially investors, that we prefer to do business with companies that have this type of culture in place. We prefer to do business with companies that have these sustainability practices in place. That's, I believe, is where she's talking about and identifying that competitive advantage on how they can really help their customers, and in their supply chain, achieve these types, same types of goals as more companies migrate toward these practices.

Patrick Center: We're talking with Crain's Grand Rapids Business senior writer, Mark Sanchez. Seeing that corporate opportunity. AI is a looming opportunity, but we also see threats for manufacturers who are embracing automation.

Mark Sanchez: Yeah, this came from an event we hosted one of our Power Breakfasts that Crain's hosts quarterly. And we talked about AI and the latest innovations of Industry 4.0 is the label that's put on this movement. And you're right, there's opportunity there that AI is coming fast in all types of sectors across the economy. Helping with efficiency, productivity, and the manufacturing setting, machines that can identify when the machine itself is sick, you know, and machines experiencing some kind of difficulty. It can kind of self-report that. So, go in, fix it. And that's just one small example of how AI is working in manufacturing. There are so many tensions to this. So, there's a lot of opportunity to approve operations. And one gentleman speaking at our event, he talked about the single biggest issue that so many employers have had for a long time is talent retention, talent attraction. Says, well, if you've got somebody who's going into a skilled trade and they're opting they will work in the manufacturing setting. When they see these types of machines, these modern high-tech AI enabled machines in the workplace, that tells them about your company. And they may say, hey, that's kind of cool. That's the type of stuff I want to work on. So, some of the speakers talked about that end at our event as well about this could be kind of a talent magnet for you. In addition to all the business operations and the improvements that this can generate for you. On the downside. boy, how many examples do we need to see about cybersecurity? If your machine's connected to the internet using the internet of things, there's a risk there. There's a risk that these hackers could maybe get into your system and then affect your operations. We've seen many companies get hit by this. So, with this technology, as it migrates further, as it evolves, as it advances, there's that risk factor as well to keep in mind and for the speakers as they talked about this at our event, this is something you have to fold into your planning is the cybersecurity and how you're going to protect your business and protect your assets.

Patrick Center: The flipside of that too is AI can be used to make systems more secure.

Mark Sanchez: Absolutely, it's like, you know, there's kind of the technology has both sides to it. That's part of it. And it's just part of this brave new world. Learn it, understand it, and then fashion that plan on how you're going to use it for your benefits and to benefit your business.

Patrick Center: Crain’s Grand Rapids Business, senior writer Mark Sanchez. Thank you so much.

Mark Sanchez: Thank you, Patrick.

Patrick joined WGVU Public Media in December, 2008 after eight years of investigative reporting at Grand Rapids' WOOD-TV8 and three years at WYTV News Channel 33 in Youngstown, Ohio. As News and Public Affairs Director, Patrick manages our daily radio news operation and public interest television programming. An award-winning reporter, Patrick has won multiple Michigan Associated Press Best Reporter/Anchor awards and is a three-time Academy of Television Arts & Sciences EMMY Award winner with 14 nominations.