The Important Role that Asset Operations Processes Play In Risk Resilient And Sustainable Supply Chains
By Zoryana Zagorodnya, SAP
The last few years have brought with them an onslaught of disruption that has transformed the way we think about supply chains, especially when it comes to risk. Simply being reactive to disruptions is not enough. Your supply chain should be flexible and resilient enough to sense, predict, minimize, and mitigate risks, and withstand whatever challenges come down the line — without sacrificing your green goals.
I recently listened to a recent Risk-Resilient and Sustainable Supply Chain LinkedIn LIVE: For Asset Operations from SAP and PwC where this was the main topic of discussion.
Here are some of the key business challenges and risks discussed from an Asset Management and operations perspective.
Lack of visibility puts companies in a reactive mode
At the very beginning of the session, SAP’s Andy Hancock shared his vision, saying, ‘’A lot of organizations have created robust strategies around enterprise asset management, but they’ve really found it difficult’’. He continued ‘’I think that really stems from the lack of visibility across individual silos. I see that as really causing organizations to be in more of a reactive mode rather than a proactive mode when it comes to enterprise asset management.’’
Lack of visibility across supply chain processes cause organizations to lose sight of possible risks There is a significant need to be in a proactive mode rather than a reactive mode when it comes to enterprise asset management. To be more risk-resilient and sustainable, you should start by knowing the current situation.
Attracting and retaining workforce should be a major focus
In many industries, we are seeing a maturing population, that is moving towards retirement rather than their next career move. They are being replaced by a new generation of workers who have been brought up by social media available 24/7 at their fingertips. This means that they are practically born digitally enabled and expect the same level of technology available to them as they move into the workforce.
As Andy Hancock explained, ‘As knowledge is escaping organizations,’ we need to really capture that so that we can then pass that to new people’’. He also explained that these new workers need the right information and tools to do their job saying, “Can we make sure that all the resources are in one place at the right time so that the work can be done the first time through’’.
It is important to attract the worker of the future with jobs, tools and solutions that are easy to use, easy to access, and make their life more convenient. It is also essential that both the emerging and maturing workforce have the skills and ability to adapt to new dynamics and that knowledge is passed on to the new people.
Aging infrastructure is causing issues
In the LinkedIn Live session, Alex Braun, from PwC, explained that in Germany, the average manufacturing asset is around sixteen years old, which has several consequences, such as increased asset failure, higher cybersecurity risks, and increased regulatory compliance costs.
When it comes to an asset failure, it has wide-reaching effects, including decreasing production output, increasing spare parts costs, and making the plan more unreliable. The higher cyber security risks are primarily due to the parts of the assets that must be opened up to the world outside the shop floor. Fifteen years ago, most ports were unprotected, most connections unsafe, and most of the source code was easily accessible.
Industry-leading practices for building risk resilience across operations processes
Andy and Alex also discussed some of the best practices they are seeing at companies around the world:
Maximizing the uptime
Companies are looking to track and manage the total life cycle of an asset. Having the ability to track and manage the total lifecycle of assets enables companies to monitor it .
Smart assets are enabling end to end digital processes, which helps us identify when a machine is trending to failure and perform preventative, rather than reactive, maintenance. We can also empower workers with the appropriate information, tools, and equipment to help speed up the maintenance process by using mobile devices and conforming that the fixes are done correctly, and efficiently first time.
Having a greater volume of consistent data and sharing it with your ecosystem of suppliers and service providers helps to understand and mitigate both their and your risk.
Establish employee safety
Alex Braun from PwC explained that “Establishing a culture of safety is essential to build a risk resilient maintenance and operations process. This includes promoting safety awareness, encouraging reporting and potential hazards, and implementing safety protocols by procedures.” He continued “and by implementing these leading practices, organizations can build a risk resilient maintenance operations process that helps establish the long-term sustainability of their operations.”
Technology can have a huge part to play in a business’s digital transformation. But we shouldn’t implement technologies for technologies sake.
In the LinkedIn Live, there were several examples of how technologies such as IoT, big data analytics, cloud computing, and digital twins could be leveraged in combination with each other.
Alex Braun explained how he sees new business models benefiting from creating digital twins of assets. He stated, ‘‘digital twins can be used to manage the entire lifecycle of an asset from design and development to operation and maintenance’’. He continued, ‘‘By simulating different scenarios in the digital twin, companies can identify potential issues and optimize asset performance throughout. This allows companies to improve the design of assets for increased performance and efficiency’’.
Integrate sustainable solutions
‘‘Sustainability is a key topic as far as asset operations are concerned. From my perspective, supply chain plays a crucial role in achieving the sustainability goals for a company. Alex Braun explained.
The speakers explained that many companies are adopting sustainable sourcing practices that confirm the products and materials they source, and produce are done so in an environmentally and socially responsible manner. This means working with suppliers that comply to sustainability standards .
Examples were shared of companies implementing waste reduction strategies in their supply chain, such as using reusable packaging, and or optimizing packaging to reduce the amount of waste. Some also implement circular supply chains, where the products, and even waste, from one part of the supply chain is used as a resource in another part.
To learn more about the key role that Asset Operations can play in a Risk Resilient and Sustainable Supply Chain, click here to listen to the LinkedIn Live, or here to download a recent IDC Info Brief on “How to create value with service excellence”