Waste is nothing new for heavy industries, but between the onslaught of the pandemic and worsening climate change, there are now greater incentives to try and curb it. By combining Verusen’s Supply Chain Intelligence Platform with the Machine Compare Marketplace, the two companies aim to dramatically cut the waste that is endemic to manufacturing.
“Our partnership with Machine Compare resolves a painful and wasteful process while supporting supply chains to combine data + human intelligence and accelerate building resilient supply networks,” said Verusen founder and CEO Paul Noble. “We are simplifying the end-to-end materials management customer experience to help manufacturers find their material truth and realize a whole new level of sustainability.”
Verusen is a supply chain intelligence company that helps sizeable global organizations understand data about the materials used to run operations and build products. The goal, as explained by Noble, is to achieve material truth by cutting through the chaos, overcoming data challenges and giving companies confidence that they’ll have what they need when they need it and in the right quantities, using proprietary artificial intelligence and machine learning technology.
Seven years ago, Ben Findlay, co-founder and CEO of Machine Compare, launched the company initially as a comparison listing site for industrial machinery. Then in June 2021, the company started its e-commerce website for industrial spare parts, with the goal of keeping the materials out of landfills.
Findlay estimates that the average midsize company has about a quarter million euros worth of spare parts—some unused in their original condition, possibly even in the original packaging. Such items are added to Machine Compare’s system with five million marketable products. Across industries, there is about five billion euros worth of spare parts that could be included in the marketplace.
“I think it’s quite a symbiotic relationship,” Findlay added. “Our whole model is based on the reduction of waste to the landfill. Our competition is the scrap man.”
The partnership is positioned to let manufacturers bypass the data cleansing needed to understand their materials data, optimize both inventory and procurement to eliminate waste, easily market their excess inventory, and source parts while saving money.
Historically, engineering managers tend to overstock parts and throw nothing away. Manufacturers rely on machines to create products and tend to keep a surplus of spare parts on hand due to a fear of machines breaking down. This hoarding mindset results in space constraints, waste, disorganization and excess. However, Verusen’s Supply Chain Intelligence Platform simplifies the equation by showing precisely what companies have, what they need, and what they don’t need. The biggest problem solved by Verusen is getting the data out of those companies in a way that’s usable, Findlay explained, adding that the problem isn’t finding the stock, rather it’s about getting it ready to sell.
“With AI now interwoven into our processes, the burden on analysis is now lifted. allowing our team as well as our partners to instead shift to long-term strategic planning. Rather than jumping into situations as they arise in real time, we’re able to expand our view beyond daily data challenges to consider future decisions that will continue making our whole supply chain more efficient,” said Findlay. “Our clients who have adopted Verusen are now showing a reduction in downtime, stockouts and costs.”
Machine Compare compiles attributes about spare parts, but the data can be messy. By partnering with Verusen, the data is cleaned, so the inventory picture becomes clear. After the data is cleaned by Verusen, it is then forwarded to Machine Compare with an accurate description and list of attributes. The data also allows companies to determine what they truly need instead of relying on guesswork that invariably involves wasteful overestimating. Once companies determine that they have an excess of parts, they can use the Machine Compare Marketplace to sell it. Other companies looking for the components can save money by not buying brand-new items.
“We have the unique ability to go into these systems and essentially identify that these ten things that you thought were different materials are really the same material, and now that we know those ten things are the same, then we can inventory and procure them more effectively,” said Noble.
Another use case of the Machine Compare platform is companies seeking alternative sourcing strategies due to changes in production lead times. Companies can use the platform to devise sourcing strategies to identify a primary source with compatible lead times and pricing, but they can also rely on alternative sources for reliability while saving money.
In an atmosphere with a complex supply chain coupled with hindering factors like the pandemic, which has caused staffing shortages and increased costs of electronic components, the partnership is poised to help simplify the manufacturing process through an AI approach that turns piles of spare parts into marketable products instead of waste.
The past two years have served as a wake-up call that the global supply chain needs fundamental changes to weather future crises. Unfortunately, with coronavirus variants still circulating and a semiconductor shortage with no end in sight, the changes are past due.
Furthermore, with public pressure to curb climate change mounting, many companies must double down on their efforts to conduct environmental, social and governance (ESG) reporting. Although Findlay admits that some heavy industries will never be fully green, he believes they can become more operationally efficient by embracing a supply circle instead of a supply chain. In other words, one company’s trash can be another’s treasure if there are good materials data and a marketplace to connect them.
Although Findlay said he sees spare parts of all kinds go to waste, electronic waste, in particular, is a significant problem because the components are difficult and expensive to recycle. However, such e-waste can be diverted from landfills and recycling plants by getting reused (or in some cases, used for the first time) through the marketplace.
“We’re the green choice for strategic sourcing,” said Findlay. “We’re definitely diverting waste from the landfill. ESG also fits in really nicely because you can source from and supply the local economy.”
According to Findlay, the partnership will flood the market with readily available parts that weren’t previously available and help keep older machines running longer. In addition, spare parts sold through Machine Compare are 25 percent cheaper on average than similar parts sold on the market, reducing companies’ operational costs and potentially protecting jobs.
It could also help reduce market volatility, especially if there’s a shortage of new versions of certain goods like semiconductor chips. An essential industry like food production relies on machinery to get food to consumers. However, a deficiency of crucial parts to keep machines running could either result in higher food prices or empty supermarket shelves.
“What we’re doing is identifying waste and avoiding it going to the landfill,” said Findlay. “It can protect jobs, it can prevent supply chain disruption, and it safeguards against certain market volatilities, which we’re seeing right now.”