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Want a More Resilient Supply Chain? Collaboration Is Key.

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Want a More Resilient Supply Chain? Collaboration Is Key.

Supply chain disruptions have now become commonplace, and the Manufacturing Leadership Council highlights supply chain improvement in 2022 and beyond as essential to the health of manufacturing. More than ever, manufacturers need resilient and agile supply chains to anticipate and overcome crises. According to the council, creating collaborative supply chain network strategies is key. Quickly sharing key data, insights, and material needs among key partners will foster agility and innovation.

But we need to update our collaboration strategies because the U.S., and much of the rest of the world, last truly focused on supply chain resilience more than 70 years ago. During World War II, manufacturers saw industry collaboration at unprecedented levels as the Allies needed a dependable supply chain for the war front. Consequently, the American government forced collaboration on a top-down, streamlined supply chain with a singular focus. Every company produced a different part, but their common goals superseded their desire to compete and spurred efficiencies.

We’re no longer facing these stark geopolitical challenges, but we are at a supply chain crossroads. The knowledge and agility needed to meet today’s challenges have reached a similar point where no company, regardless of size, can adjust individually to meet demand. The demands of the modern market necessitate collaboration.

Overcoming Reluctance Toward Cooperation Between Manufacturers

Companies hesitate to engage in collaboration, and that makes sense: If you can move faster, you have a tremendous advantage. Why bother to share? The answer lies at the intersection of philosophical and practical justifications. From a philosophical side, manufacturers that pride themselves on innovation shouldn’t be afraid of imitation.

This leads to the practical side: If you hold back on sharing innovative ideas, tools, and frameworks, you slow your whole industry. A leading company may gain a short-term advantage, but down the line, it won’t be able to gain anything from others. In the modern world, there’s no such thing as the “smartest person in the room.” It’s a global room. If you aren’t willing to share some of your insights, you could cause long-range setbacks for your business and your industry.

One globally recognized consumer product goods company gave competitors an insider look at how it made recyclable tubes. Being collaborative didn’t lower the company’s credibility. It illustrated the company’s leadership and cemented it as being true to its mission toward developing more sustainable manufacturing practices.

Moving Toward an Ideology of Supply Chain Collaboration

What will it take to make manufacturers feel comfortable establishing a two-way street when it comes to sharing their supply chain data or innovations? The following strategies will help:

1. Develop universal rules and terminology around collaborative efforts.

Right now, there’s no single language or rulebook that allows manufacturers to communicate confidently among themselves. We just aren’t sure what to share, so we think we must share everything. This makes collaboration feel overwhelming and unrealistic. Having a single language that all manufacturers use to communicate across industries and regions would reduce the latency around collaboration.

For example, we know that sharing asset-level information like makes and models can be useful. But how about the deeper metadata that involves how the item works or the best practices to maintain it? Which metadata is useful enough to send out? And how can it be shared in a commonly understood and recognized format? These are all important questions that can be answered by universal guidelines, which would allow for better machine servicing and create more efficient and sustainable production lines.

Clearer language also helps identify what information should be protected to prevent others from stealing core IP by reverse-engineering processes.

2. Share use cases regarding successes, failures, and best practices.

A lot of manufacturers struggle to use digital transformation (DX) principles to improve their supply chains. They’re stuck in the pilot phase, according to McKinsey research. Understanding how others adopted and scaled their DX initiatives could be extraordinarily helpful.

The World Economic Forum’s Global Lighthouse initiative is already facilitating the sharing of DX use cases across industry silos. There are also peer-level customer advisory boards and industry-level groups sharing implementation practices.

Make no mistake: DX is essential to unraveling knots in the supply chain. The right DX applications can improve the entire global manufacturing “organism.” The more manufacturers learn from one another’s mistakes, the faster the industry can evolve. Not participating in these forums or groups means losing out on valuable information.

3. Upskill and reskill manufacturing workers.

The Great Resignation is making it harder to source and hire talented people, especially with older workers retiring and taking key institutional knowledge with them. This is a huge challenge: Companies need to onboard new workers, and there’s intense competition for the new generation of technical talent who will drive future innovation. Even current workers may need upskilling and reskilling, too, especially in the latest digital tools to make their roles more effective.

These are significant challenges, and manufacturers need to quickly gather insights, data, and best practices around workforce development. The industry, however, lacks the tooling needed to share data efficiently like in the software industry, which has a tremendous amount of tools, academies, and online capabilities that have enabled people to learn to code and allowed collaborative employment models with apprenticeships. We need this same level of collaboration among upskilling employees.

Allowing the people themselves to collaborate helps. There are forums for VPs or management roles to share insights but few, if any, forums for technicians across different industries to collaborate.

4. Find solutions around sustainable manufacturing.

Corporate leaders constantly say, “We need to be more sustainable.” But how many are taking steps toward sustainability? The whole industry needs to become more effective, efficient, and sustainable, and the more collaboration we create there — sharing data and insights on implementing sustainable practices — the faster it’ll be to move forward.

Even if sustainability weren’t the right focus ecologically, it’s right operationally. An organization that’s not sustainable has little supply chain resilience and will need to change tactics as resources run out. If you don’t have real initiatives in place to make the supply chain more sustainable over time, resilience won’t even matter.

Ultimately, we need data-driven standards around improving sustainability. Technology allows us more real-time data than ever, but we need to improve how our initiatives use that manufacturing data. Sharing a digital roadmap of best practices and insights or utilizing cross-company supply chain initiatives makes it quicker and easier to make supply chain improvements.

Plenty has changed since WWII’s collaboration among manufacturers, but the benefits of cooperation haven’t. Let’s respond to today’s supply chain concerns by revisiting the advantages that come from coming together.


Artem Kroupenev is VP of Strategy at Augury, where he oversees product, market, innovation, and ecosystem strategy. He has more than a decade of experience driving the adoption of disruptive technologies and has previously co-founded companies in the United States, Israel, and West Africa.

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Want to Make Progress on Digital Transformation? Start With Machine Maintenance.

Machines are at the heart of manufacturing. They affect every aspect of production — efficiency, output, quality, consistency — and form the basis of manufacturing performance. So it comes as no surprise that many use cases for digital transformation in manufacturing focus on machinery. It’s where the transformation manifests itself.

How it manifests itself is more complicated than it seems, however. Some may think that the primary goal of digital transformation in manufacturing is to make machines better at their intended purposes — by using digital technology to help them run faster, longer, or with greater precision. This is one goal, but digital transformation is also about much more than that. Another crucial component is giving machines new capabilities and greater purpose.

Here’s an example: When machines are equipped with internet-connected sensors that can collect machine health data and send it to a centralized platform, then each machine becomes an indicator of the overall health of the production line. Studying the parts reveals the condition of the whole, whether that’s a single production line, an entire factory, or a global supply chain.

This wasn’t possible prior to the new technologies of industry 4.0 because manufacturers had no way to monitor machine health remotely and comprehensively. But it’s possible now, and it’s changing expectations around digital transformation in manufacturing.

Driving Digital Transformation of Machine Maintenance

With additional machine capabilities should also come a rethinking of the role of maintenance technicians. They’re not just the on-site problem-solvers anymore — they’re the ones who move digital transformation forward as they keep machines up, running, and evolving. Technicians may not be the architects of digital transformation in manufacturing, but they are the drivers of it.

In that context, it’s time to consider upgrading the roles of the technicians closest to the machines. The maintenance of the past isn’t appropriate for the factories of the future. Technicians need new skills, tools, and processes to leverage the advanced capabilities being added to machines. They also need a new mindset, mission, and role within the factory. To put it differently, maintenance technicians need to transform as much as the machines they work on. Here’s how manufacturing leaders can help:

1. Change Your Mindset From Maintenance to Risk Avoidance

In the past, when technicians serviced machines because of a breakdown or because of a service schedule, the entire focus was on minimizing machine downtime. Fewer failures and faster fixes meant the maintenance department was doing its job.

Instead of focusing on solving problems after they occur, however, maintenance teams should focus on preventing them. When maintenance sees its primary purpose as risk avoidance, it puts everything technicians do into a new perspective. The team is focused on intervening early and effectively so that minor issues don’t develop into downtime.

Risk avoidance (rather than minimization) is possible when maintenance teams shift from reactive and preventive maintenance, which lag behind problems, to predictive and prescriptive maintenance, which lead ahead of them. Machine health monitoring sensors make that possible while also showing the maintenance team where, when, why, and how their agile efforts helped to prevent disasters.

2. Think About Digitizing Maintenance as a Skill Set Upgrade, Not Just Another Tool

Digital transformation in manufacturing is about more than just adding a bunch of new digital tools to your technicians’ tool belts. If you just give them better ways to do what they were already doing, you won’t see dramatic improvements from digital transformation efforts.

Instead, think of digitization as more than a bonus tool. Think of it holistically as a whole skill set upgrade for your team. Digital tools will allow maintenance technicians to spend less time on menial, repeatable tasks and transition that energy instead to higher-value knowledge work like prescriptive maintenance that can keep machines running better for longer.

3. Improve Your Collaboration Capabilities

Digital transformation in manufacturing maintenance is largely about improving collaboration capabilities. Maintenance teams are using technology to help them spread their resources around as quickly, widely, and effectively as possible. All three of those depend on maintenance teams working collaboratively.

In practice, that means each technician, team, and site has access to the same data and alerts. Everyone works from a single source of truth so that wires don’t get crossed, warnings never get ignored, and resources move everywhere efficiently. However digital transformation affects maintenance, increased collaboration should be the goal.

Every day, digital transformation in manufacturing becomes a bigger priority. Many manufacturers will discover that in their race to digitize, they forgot to update maintenance at the same pace. Those that do the opposite will discover something as well: Digitizing maintenance propels the broader transformation effort forward because it allows machines to do more than they ever have.


Artem Kroupenev is VP of Strategy at Augury, where he oversees product, market, innovation, and ecosystem strategy. He has over a decade of experience driving the adoption of disruptive technologies and has previously co-founded companies in the United States, Israel, and West Africa.


How to Combine Resilience With Just-in-Time Manufacturing Methodologies

As the COVID-19 pandemic continues to disrupt manufacturing supply chains worldwide, even the largest companies are feeling the impact. Recently, Microsoft and Samsung joined the chorus of companies that are predicting stalled outputs and lost sales. The pandemic proved that existing methods for efficiency don’t necessarily translate into resilient manufacturing.

Many of the global supply chain issues companies are now facing can be attributed to the just-in-time — or JIT — manufacturing methodology that most of them employ. Companies kept inventories intentionally lean to reduce costs. New shipments and raw materials arrived just in time to fill a demand for new products.

Although JIT manufacturing is highly efficient in the best of times, it’s also highly susceptible to disruption in the worst. During a global pandemic, for instance, the need for more resilient manufacturing is stark. Fortunately, efficiency and resiliency aren’t diametrically opposed. With the right technology, companies can enjoy the best of both worlds.

Operational Flexibility Is the Missing Link

In 2019, McKinsey conducted a study that examined the performance of companies following the financial crisis of 2008. It found that the most resilient companies did something different than the others: In addition to efficiency, they built their business models around financial and operational flexibility. By quarter one of 2008, they had cut costs by 1%, and by the time the crisis reached its trough in 2009, they’d boosted earnings by 10%.

Cutting costs and focusing on growth are the traditional pillars of resilience. Today, however, a new wave of resilient manufacturing has emerged in response to COVID-related restrictions. The manufacturing workforce, supply chains, and product demand have all been affected while socializing and shopping are restricted.

In this new environment, being operationally and financially flexible is not enough. Before the pandemic, digitization was a huge accelerator to efficiency and resilience. Companies that digitized early could cut costs and increase revenues; now, they’re much further ahead than companies that are still struggling with resilience.

Being digital is a critical component of resilient manufacturing, which is why some of the larger tech companies have been slower to feel the supply chain drag. In fact, many have grown significantly faster due to their heavy reliance on digitization. For example, Tesla, which has always been entirely digital, recently reported its fourth consecutive quarter of profit.

Digitization made Tesla super resilient from the start. The entire workflow is digitized, and its people know to communicate with customers digitally — including taking, fulfilling, and delivering orders. In the industrial space, efficiency and resiliency are built by companies that invest in these same elements.

Why Resilient Manufacturing Isn’t a Lost Cause

Resilient manufacturing is essential in the current environment, and building it will provide manufacturing facilities with significant flexibility beyond the pandemic. To create a complex JIT supply chain, things need to combine and work together in a highly efficient manner. Companies have to cut out the fat by optimizing every system for efficiency.

The assumption is that each component of a product will be delivered just in time for it to be assembled on the factory floor. When a local, regional, or global crisis introduces systemic risk to any part of the supply chain, that link in the chain is lost. The component may never reach the factory floor because optionality and buffers have been optimized out.

Manufacturers must combine JIT manufacturing with resilient manufacturing methods. That requires a digital thread running through the entire operation, with end-to-end operational visibility across the whole supply chain. With greater visibility, companies can predict shifts in demand with much more flexibility.

Operational visibility also creates a wider base of optionality and suppliers. Digital visibility shows, in real time, what components or raw materials manufacturers need, how their supply chain is providing them, and how they’re manufacturing with them. Companies can efficiently switch suppliers or products in response to, or even before, major disruptions.

Operational Flexibility Combines Efficiency and Resiliency

For manufacturers to effectively combine efficiency and resilience, they need enough data, knowledge, and understanding of what their supply chains look like at any given moment. They can predict major events to reduce or completely avoid disruptions to their manufacturing processes.

To achieve this combination, companies need three important digital threads:

1. Total visibility into financial and operational flexibility: The most important digital thread is a digital space where key people in the supply chain can see it all. They can understand demand, sales, and metrics, as well as analyze production, assets, delivery networks, logistics, and supplier bases. Ensure that sales, marketing, production, and all other departments can see the same numbers in real-time and make decisions together based on that single truth. This will be the supply chain control tower.

2. Real-time machine health monitoring in all factories: In a JIT manufacturing model, efficiency is based on meeting production needs. As the primary source of that production, machines are a company’s biggest assets, and a company needs full visibility into its machines’ health and performance at all times. That includes predictive knowledge about how they’ll perform under different conditions. Machine health monitoring platforms can gather data from IoT networks and use AI algorithms to deliver predictive knowledge based on that data, creating greater visibility in every factory.

3. Remote collaboration through a connected worker platform: How machines will perform under different conditions is an important aspect of operational flexibility, but most operations rely as much on people as they do machines. It’s just as important to know how employees will work together when they can’t be near one another. Connected worker platforms allow them to work remotely, collaborate, and share operational data and insight so they can become more autonomous in the face of disruption.

JIT manufacturing methodologies have traditionally lacked this level of visibility, insight, and flexibility, which hindered many supply chains amid the pandemic. By introducing technology to boost real-time visibility and remote collaboration, however, companies can combine JIT efficiencies with an unprecedented level of operational resilience.


Artem Kroupenev is VP Strategy at Augury, where he oversees Augury’s AI-based machine health, performance, and digital transformation solutions. He has over a decade of experience in building products and ecosystems and bringing technological innovation to market in the U.S., Israel, and Africa.


New Manufacturing Priorities: Increasing Agility and Understanding Systemic Risk

COVID-19 dealt an unprecedented blow to the global supply chain. Almost overnight, demand skyrocketed in some sectors and plummeted in others, forcing manufacturers and their suppliers to adapt on the fly.

As many as 94% of the companies in the Fortune 1000 have experienced supply chain disruptions since the start of the pandemic, including global manufacturing titans like Apple. The fact that the world’s largest companies haven’t been immune suggests that abundant resources and relationships aren’t enough to help supply chain partners survive in times like these.

It also suggests that the traditional playbook for dealing with supply chain problems is no longer quite as effective as it used to be. The old methods of responding to crisis demand and supply are no longer enough to withstand these events — this pandemic, as one example, has led to shortages of everything from toilet paper to car parts.

Shifting Focus From Efficiency to Manufacturing Agility

If manufacturers want to withstand the next crisis, they’ll need a new approach. COVID-19 has highlighted the need to move from focusing on efficiency to adapting for flexibility, resilience, and agility.

Arguably, the focus on efficiency — on doing the most with the least — even exacerbated recent supply chain disruptions by leaving producers and suppliers under-resourced and locked into one way of doing things.

Even as the pandemic rages on, the takeaway is clear: Manufacturing agility is more important than operational efficiency. Efficiency strives to make incremental improvements, but reality calls for manufacturers to make sudden, sweeping changes in the face of unprecedented challenges.

Understanding Systemic Risk

The challenges the pandemic brings to the supply chain represent nonsystemic risks — or risks that are out of manufacturers’ control. Problems that manufacturers can control with the right tools and processes, on the other hand, are systemic risks — specifically, problems that start on the ground floor when machines break, then disrupt production lines, then cause issues all the way downstream in the supply chain. It’s like one domino toppling down the rest.

Nonsystemic risk puts additional pressure on manufacturers to ensure that their facilities are as systemically risk-free as possible to remain flexible around dramatic swings, either up or down, in demand.

Now that COVID-19 has proven anything is possible when it comes to nonsystemic risk, manufacturers must turn their focus toward creating agile operations to contain supply chain issues in whatever form they arrive. For example, when a nonsystemic risk like the pandemic forces a manufacturer to shut down 80% of its production lines in a low-demand environment, the lines that are still operating will need to function at maximum productivity.

If the remaining lines aren’t up to par, the company will become vulnerable to slowdowns that could turn away what few buyers still exist, or the company may, once again, have to go through the time-consuming and costly process of shifting production to different facilities.

Nonsystemic risk highlights the need for organizations to uncover and manage systemic risks, taking control over whatever factors they can to keep bad situations from getting much worse.

Finding Opportunities in Manufacturing Agility

Managing systemic risks starts by understanding on-the-ground conditions, particularly when it comes to machines. When the unexpected happens, machinery bears the brunt of the consequences. As it ramps up or down in response to sudden changes in production, it must continue to operate efficiently, productively, and without downtime.

When manufacturers can gather insights on machines at the ground level, regional leaders can view those insights collectively to uncover companywide opportunities to manage systemic risk at large.

By de-risking operations in this way, these companies stand to gain substantial predictability and flexibility around their machines, which opens up opportunities for greater productivity and more effective, efficient asset planning at the corporate level. Focusing on the following three areas can help you uncover systemic risk and opportunities for more agile production lines:

1. Create redundancy in your production lines.

As a first step, you should have multiple lines running at the same time. This way, if one does fail, you’ll have a backup plan. That strategy itself should be viewed as the first step in a much larger strategy — as it really just serves as a crutch approach to mitigating systemic risk. Running many lines that are susceptible to machine failure and downtime can actually become a significant financial risk in manufacturing.

The eventual goal should be to have every line be your best line — which means no machine downtime. To create that kind of system, you need to understand the details about why your best line operates at maximum productivity and why your other lines pale in comparison. The real value of creating redundancy in your production lines will come from the insights you gather on your machines to optimize every machine companywide, making each production line your strongest one.

2. Leverage machine health data.

So how do you gain insights on individual machines in your production lines and view that machine health data collectively to reduce risk along every production line? It’s easier than you might think. In fact, sensors and IIoT networks combined with AI algorithms can do most of the work for you, showing you where risk and opportunity exist in manufacturing operations across entire asset classes.

When these tools give you insights into the health of all the components of your supply chain, you can both replicate what’s working best and predict what might fail in the future, removing the weakest parts and replacing them with stronger ones. Machine health data can help you find your best configurations so that you can replicate these practices across all your facilities.

3. Facilitate remote collaboration.

The factory floor as we’ve long known it is changing. That was true even before the pandemic, but COVID-19 sped up the transformation. Social distancing practices have meant that up to half of manufacturing employees have been unable to work on-site. Digital collaboration and remote work are the new normal everywhere, and the manufacturing industry is no different.

The good news is that by utilizing digital collaboration platforms, you can bring a lot more opportunity for flexibility and agility into your company. When your teams can collaborate from anywhere, you can draw on the institutional knowledge of your entire organization. Cloud-based software that identifies machine health problems and allows for remote collaboration to address them lets your teams work better together, even from farther away.

The pandemic forced everyone to adapt fast, but it should also force everyone to question their assumptions about what manufacturing looks like in 2020 and beyond. Surviving isn’t about becoming as lean as possible — it’s about being agile enough to stay in front of the waves of change, even the ones you’ll never see coming.


Artem Kroupenev is VP Strategy at Augury, where he oversees Augury’s AI-based machine health, performance, and digital transformation solutions. He has over a decade of experience in building products and ecosystems and bringing technological innovation to market in the U.S., Israel, and Africa.