The importance of supply chains has never been more in focus than in recent years. The global pandemic and geopolitical tensions affecting key shipping routes—to name just a few influencing factors—have brought a vital part of the economic chain front of mind like never before.
Even without these disruptions, innovation was starting to transform supply chains. The pace of digitalization has been a significant factor that should not be underestimated.
We can now make supply chains far more cost- and time-efficient. Hence, companies and countries become more self-sufficient and sustainable, which is good news for businesses and consumers.
A prime example of the transformative disruption of supply chains is the revolution taking place in the energy sector’s spare parts. Spare parts are an oft-forgotten element of industrial processes but are crucial for regular, predictable supplies.
If a key component fails, entire pieces of machinery or even a whole process can shut down. In highly regulated and complex industries such as energy and power generation, it can take months for production to recommence, causing millions or even billions of dollars of opportunity costs.
In a traditional, analog world, manufacturers would either (i) keep physical stocks of components and parts in warehouses until needed – or (ii), more commonly, produce parts in response to a specific need. Both are far from ideal. Retaining physical inventory in their warehouses was a costly burden for industrial businesses. Thousands of components could be held for years and possibly never used – writing off potentially tens of millions of dollars. The latter option was slow and costly. Lead time, by definition, was longer as it required new production, and machinery might be decades old.
However, all this is changing – an exciting prospect for global businesses.
Digitalization, augmented with additive and digitally enabled manufacturing, means that the details and profile of components can now be placed in a digital spare parts inventory with files and data securely stored. These schematics are easily accessible for producing parts on demand rather than being kept in a warehouse. The result is a significantly smaller physical footprint while eliminating the risk of part obsolescence.
By using specialist 3D printers and advanced machining, companies can obtain high-spec, high-quality components made in the exact materials required, delivered quickly, and without incurring overheads from keeping one or more copies in an atmospherically controlled and secure warehouse.
This digital component replacement—from failure to functioning—is a modern Industrial Revolution. The change has been expedited by a new priority given to reconsidering global supply chains, concerns about environmental harm from shipping, the trend to reshoring industrial processes, and advances in material science.
The benefits are not just the removal of overheads from overproduction and storage of components but also the agility of quicker responses, reducing downtime and associated revenue losses. These gains will change the business culture of procurement and inevitably encourage more innovations in design and processes.
The environmental gains are also significant. We no longer need to ship containers on vessels traversing oceans for weeks on end from different continents or on jet-propelled cargo planes pumping out emissions. By shifting manufacturing to a local level, the environmental impact is significantly reduced. Local production eliminates the need for long-distance transportation, drastically cutting emissions associated with global shipping. Once a local production setup is established, the ongoing environmental impact of producing goods on demand is substantially lower than traditional manufacturing and distribution methods. This shift to local production directly reduces the carbon footprint, making it a far more sustainable option.
For example, a typical refinery or power-generating plant functions for approximately 50 to 70 years. The original constructors did not plan for or stock components for that period. Whether stocking or sourcing replacements, key part lead times can take months or even years. Digital inventory and additive manufacturing solutions eliminate the need for component storage – as parts can be produced on-demand and are closer to where they are needed.
In the MENA region, Immensa’s team of digital warehousing specialists and additive manufacturing engineers are pioneering these huge changes, driven by industrial strategies such as the UAE’s ‘We the UAE 2031’ and setting global standards.
Digitalization goes far beyond smartphones and apps. It ensures resilience in supply chains. Manufacturers in traditional import-dependent regions like the Gulf can develop new digital manufacturing expertise. This innovative approach will shift their supply chain reality from unpredictable, just-in-time inventory to local, self-reliant, just-in-time manufacturing.
This is the new Industrial Revolution. Whether it may be manufacturing, heavy industries, or agriculture, businesses need to embrace these changes or become history.