The global supply chain crunch that has gripped the world since the onset of the COVID-19 pandemic has affected most components of everyday life.
Building materials are in short supply. Buying a vehicle of any kind is a waiting game, as is getting repairs done because of the lack of replacement parts and workers to install them. And the unpredictable availability of many food and beverage products and other consumer packaged goods makes every shopping trip a game of chance.
The causal factors that have led to these shortages are varied and interwoven: unexpected spikes in demand, a lack of workers in factories, shipping operations that are out of balance, and an increasing variety of goods offered to consumers that require suppliers to operate with as much agility as possible in the face of other challenges.
These factors are so intertwined and dynamic that logistics and supply chain experts don’t see the inflationary after-effects of these shortages decreasing anytime soon.
Solving the problem will take meaningful investments in workers and technology at all levels. Artificial intelligence (AI) and machine learning (ML) solutions can streamline and optimize manufacturing operations, provide greater visibility and flexibility, and prevent expensive asset downtime caused by inadequate maintenance programs.
We’ll look at some of the root causes of the global supply chain slowdown and how SparkCognition™ can help manufacturers solve some of the challenges that have constrained their productivity and profitability.
Understanding the bullwhip effect
The “bullwhip effect” is a long-held logistics concept that has been used frequently to explain why suppliers, manufacturers, shippers, and retailers—the main players in the supply chain system—have gotten so out of sync, beginning in large part with the dramatic increase in consumer demand soon after the beginning of the pandemic.
In short, the bullwhip effect describes how a change in demand at one point in the supply chain creates cascading effects on the subsequent steps in the chain, much like how a slight flick of the wrist causes a sizable movement at the end of a bullwhip.
The spike in consumer demand clashed with the shortage of workers caused by pandemic quarantines and illness, making it hard for parts suppliers to respond to the new demand signal. This created delays followed by a resulting spike in production output that overwhelmed shipping and logistics operations trying to deliver parts for assembly and packaging at plants waiting to fulfill orders.
At every step, the bullwhip effect becomes magnified.
To solve these problems, players at each link in the supply chain will have to find a middle ground between the decades-long practice of “just in time” manufacturing that allowed for maximum production and efficiency and the realities of tight labor markets and other challenges brought on by the pandemic. To do that, leaders will need to improve their operations to reduce downtime, ensure quality, and increase flexibility so they can respond to future demand patterns as effectively as possible.
AI provides proven manufacturing solutions
Equipment failures and unexpected downtime are common problems that all manufacturing companies face from time to time. When a critical asset breaks down, production must come to a halt, requiring expensive repairs using valuable resources.
Because suppliers these days are facing delays and shortages of their own, replacement parts that have to be ordered and delivered can lead to extended periods of downtime. At an estimated cost of up to $260,000 per hour for large manufacturers, that downtime impacts all levels of finance and relationships with customers who need reliable fulfillment of their orders.
SparkCognition™ Maintenance Advisor provides AI-powered predictive insights to help manufacturers overcome such supply chain constraints and challenges. By analyzing vast quantities of sensor data on production and other operational assets, as well as unlocking the value from unstructured data in maintenance logs and similar documents, Maintenance Advisor allows you to:
- Gain end-to-end visibility with predictive insights.
- Prevent asset failure and reduce unneeded scheduled maintenance.
- Assess operational performance and process inefficiencies.
- Improve reliability and safety.
- Reduce waste and operational costs.
Maintenance Advisor leverages patented AI and machine learning technology to enable a predictive maintenance approach through the monitoring and analysis of historical sensor data that can optimize and lengthen the life of critical equipment. By detecting and comparing anomalous behavior from normal production behavior, SparkCognition’s Maintenance Advisor provides advance warning to avert potential quality control and maintenance issues before they occur. This helps you avoid losses from recalls and machine failure, and can also reduce stoppages related to preventative maintenance, increasing your profitable uptime.
The data models that Maintenance Advisor generates from factory assets can also be used to create a complete, up-to-date picture of the state of operations. This intelligence helps you identify ways to improve production processes and other actions that require a well-orchestrated plan to maximize efficiency while ensuring the high levels of quality demanded by business partners and consumers are met.
AI-enabled end-to-end visibility allows players throughout the supply chain to respond more effectively to changes in demand and logistics. This gives them an advantage and offers new opportunities in the market that will be missed by competitors who operate without the benefit of AI technology.
It will take significant investment and work to find a way to help manufacturers find an acceptable new normal, where market demand can be met in a way that doesn’t create excess strain and price pressures on other players in the supply chain cycle. The ability of AI technology like SparkCognition’s Maintenance Advisor to maximize the value of operational data to increase uptime, quality, and flexibility makes it a valuable solution for your manufacturing investment.
Contact us to learn how Maintenance Advisor can help you.
