Manufacturers are on a constant quest to improve efficiency by adopting smart manufacturing techniques. Many of them, however, have amassed a complex web of technology systems to run their operations over the years. This technological debt is the roadblock to elevating their operations to the next level. The challenge is quadrupled for manufacturers with multiple regional facilities, as each plant tends to develop its distinct set of technologies and operational procedures. It is a difficult feat to connect these disparate systems—creating disruptions in their procurement strategies.
Amazon Business plays a pivotal role in the manufacturing transformation domain by enabling smart and efficient procurement strategies. It addresses fundamental aspects like long-tail indirect spending. Amazon Business rectifies the common practice of individuals using Pcards to purchase on the Amazon retail website.
It also delves into the realm of intelligent manufacturing capabilities. This encompasses endeavors like small part replenishment, just-in-time inventory management, and the utilization of technologies like Amazon Monitron for predictive analytics and predictive maintenance on manufacturing floor equipment.
Amazon Monitron is an end-to-end hardware and software system that uses machine learning to detect abnormal conditions in industrial equipment and enable predictive maintenance. It comprises wireless sensors to capture vibration and temperature data from equipment and a gateway device to securely transfer data to AWS.
Intrigued by the effectiveness of the Amazon Monitron device, Amazon Customer Fulfillment turned to AWS and started implementing it. The devices were first introduced in a couple of fulfillment centers during the initial pilot phase, achieving a remarkable 69 percent reduction in unplanned equipment downtime. This translated into approximately $23 million in cost avoidance savings, with a return on investment of less than one year.
"We start with the customer and work backward. This approach is rooted in design thinking methodology, which starts by understanding what we aim to solve at the customer level and individual need level"
— David C Dowty, Principal, Pan-Amazon Business Development, Manufacturing, and Industrial, Amazon Business
The performance, ease of use, and affordability of Amazon Monitron prompted Amazon Customer Fulfillment to deploy it at existing and new fulfillment centers across North America, Europe, and Asia Pacific regions.
For Amazon Business, the strength lies in addressing long-tail indirect unplanned spending. While this often encompasses office IT peripherals, it is expanding into different strategic categories of planned expenditures and exploring the realms of RM&E as well.
With Amazon Business, organizations no longer need to allow employees to make purchases on their individual accounts and undergo reimbursement and approvals. They can guide employees toward preferred products, set up predefined product purchase lists, impose user-specific spending limits, and gain quick, accurate insights through reporting.
Amazon Business holds a distinct advantage given that its user interface closely mirrors that of amazon.com, a platform familiar to most consumers. It has been purpose-built to seamlessly integrate with procurement systems, and currently, that number is 150. This equips businesses with a simplified purchasing process, robust reporting tools, and an ever-expanding selection of suppliers and products. More importantly, there is no need to overhaul the existing technology stack to access these benefits.
“Amazon’s user experience is universally recognized and pervasive. There is no requirement of specialized knowledge of a particular procurement tool to conduct business efficiently,” says David C Dowty, principal of pan-Amazon business development, manufacturing, and industrial.
Amazon Business’ solution line is guided by the principle of collaborating closely with customers to identify their core problem statements and develop solutions that directly address the challenges.
“We start with the customer and work backward. This approach is rooted in design thinking methodology, which starts by understanding what we aim to solve at the customer level and individual need level. It is essential that we clearly define our objectives upfront and draft a vision of where we aspire to be in the next five to six months and, more importantly, in the next five years,” says Dowty.
Internally, Amazon Business employs a process, press release, and frequently asked questions (PR/FAQ). It acts as the key document in the product discovery or working backward process, ensuring all stakeholders share a singular vision. It is the starting point for all other product documents and mockups. PR/FAQs act as a real press release, describing a product from the perspective of the launch day. This catalyzes the process of vetting ideas and creating new, innovative solutions.
“We take pride in our culture of curiosity, agility, and experimentation, which also means we’re open to the possibility of failure. With us by their side, traditional manufacturers can construct a roadmap, articulate a vision for the next stage of their business, and stay at the forefront of their industry,” says Dowty.
Originally published on Manufacturing Technology Insights.
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