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EPISODE #5 | November 1, 2021

Consider this a Master Class on Obsolescence Management.

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SiliconExpert Podcast Episode 5 with AMSYS - Transcription

[00:00:00] Bjoern: What does it mean to be proactive and where to invest first and what is pro active management. And also in addition, what is proactive obsolescence management?

[00:00:13] Eric: That's Bjoern Bartels, managing director at AMSYS. He's an endorsed trainer of the international Institute of obsolescence management, or IIOM, an acknowledged expert within the DK E ISO and an active member of the component obsolescence group.

[00:00:28] Bjoern: I've seen companies, they will receive every notification that is out there in the market. They consider themselves as being proactive and obviously that is wrong. Hi, my name is Bjoern. I'm managing director of AMSYS, Applicable Management Systems. Welcome everyone.

[00:00:44] Eric: Welcome to the Intelligent Engine. A podcast that lives in the heart of the electronics industry brought to you by SiliconExpert.

[00:00:52] SiliconExpert is all about data-driven decisions. With a human driven experience. We mitigate risk and manage compliance from design through sustainment. The knowledge, experience and thought leadership of the team partners and those we interact with every day expose unique aspects of the electronics industry and the product life cycles that live within it.

[00:01:13] These are the stories that fuel the Intelligent Engine.

[00:01:19] Today's spotlight is on AMSYS, a European company that has dedicated itself to keeping companies away from falling off the cliff that is electronic component obsolescence. Thanks to extensive experiences in a vast range of industry sectors over many years, AMSYS can analyze processes extremely fast to design, implement, and digitize, necessary tools.

[00:01:43] We have Bjoern Bartels with us today. Managing director at AMSYS. He has a master's degree in international business and the German diploma in industrial engineering. He's working in the field of consultancy by supporting his global customers with obsolescence management core competencies and tactics for many years, Bjoern, successfully developed, implemented, and managed reactive, proactive, and strategic obsolescence management within a variety of companies.

[00:02:10] Bjoern. Thanks so much for joining us today.

[00:02:12] Bjoern: Thanks for having me. I'm looking forward to this episode.

[00:02:15] Eric: I think we can agree that obsolescence is an industry agnostic plague, and you apparently gravitate to them, never giving a thought of questionable part availability. I'm so interested in how you got into vintage cars, especially a vintage American car, I mean a 67 Mustang. That's rare here in the US to get a 67 Mustang in Germany. Let alone the parts for a 67 Mustang. Did you just decide, I want to find the most difficult hobby there is.

[00:02:50] Bjoern: I always love to do things with my hands, especially now being a consultant, leading my own company.

[00:02:56] That's just for me, time to take off getting my hands dirty, oily, and just the smell the gas. I've always been into cars. And actually we started AMSYS and with the money I saved over years for that vintage Mustang and so on. And so only a couple of years later after we started AMSYS back in 2013.

[00:03:18] I was finally able to get some of the money out of the company again and make my dream come true to buy that vintage car, having it restored and so on. I didn't do full restoring frame off because I cannot weld however, I'm good when it comes to engines and the electrical simple electrical side of cars.

[00:03:38] And on restoring that, and after four, nearly five years, I'm now finally done. Problem is. I finished, I think the end of last year. And since then, it's just sitting there in my garage because I never bought the car for driving. It was really just the hobby and spare parts supply fortunately, is good.

[00:03:56] However, with some 3d printing and doing stuff by myself, it is possible to do a great job in the end.

[00:04:04] Eric: Tell me about the 3d printing. Did you actually print parts?

[00:04:09] Bjoern: I did. It was just like for the quarter window, one handle was broken and I could either replace the full quarter, went what I was not willing for, or just actually print that little handle.

[00:04:19] So yeah, it works.

[00:04:22] I guess it's easier to replace a physical component like that than an electronic component with 3d printers. That's a game changer to be able to do something like that years ago would have been unthinkable

[00:04:34] You're right. I mean, even when it comes to obsolescence, when I started with that many years ago, digging myself deeper into the management approaches and building up stable processes and disciplines and so on 3d printing, additive manufacturing was still not even real thinkable. And today. Actually becoming the solution to some problems when it comes to mechanical parts, hope it will evolve even further.

[00:04:57] Eric: Were you already interested in obsolescence when you started your dream of restoring a vintage Mustang?

[00:05:05] Bjoern: Well, when I started, I was already completely into the matter of obsolescence and its management. However, not from my early days. So to say, so I'll do a dual course studies. When I got my first diploma in industrial engineering, meaning I was studying and working at the same time and I was working for a major supplier in the aerospace and defense industry by that time.

[00:05:30] And I was able to hop through different departments and I realized that obsolescence discontinuations, constant changes are giving big and huge headaches to all different departments. And I started in the field of obsolescence and management. Then when I was finally able to write my thesis. What was actually about how to make the world a little better, how to come up with stable processes when it comes to reactive obsolescence management approaches.

[00:06:00] Also it was proactive risk mitigation strategies. Fortunately later on that company did give me a proper contract that was able to roll out and what I did in theory beforehand, on a global scale, including not only that company and its subsidiaries, but also their direct suppliers, the manufacturers plus the customers because overcoming the hurdles of obsolescence and discontinuation always require a good cooperative effort throughout the whole supply chain.

[00:06:32] This is how it started.

[00:06:33] Eric: So this was an aerospace company.

[00:06:35] Bjoern: Certainly.

[00:06:36] Eric: I think that's such an interesting point. You bring up about how far up and down the supply chain that you need to look and especially at an aerospace company where the level of compliance, legislation that you have to be aware of is so much more intense than it would be for a consumer electronic product.

[00:06:59] The stakes are a little higher when you're talking about aerospace.

[00:07:03] Bjoern: Certainly, but it's not only aerospace and obsolescence and it's management. It's really predominant in the aerospace sector for decades already because we were talking about lifespans of 30. 40 50 years plus the qualification requirements and safety critical components, but it's not only in aerospace.

[00:07:23] If I look at our customer base that we have today, they are coming from the transportation industry that have similar requirements when it comes to safety, critical components, not only in aerospace, marine or military, same applies for the automotive, medical, technology, environment, and energy plant construction and all the general automation. Consumer electronics, they're driving the market when it comes to computers, entertainment, communication.

[00:07:51] But, certainly they do have their requirements as well, but not as strict as in the other industries that are really facing the most problems when it comes to obsolescence and it's management.

[00:08:02] Eric: Let's talk a little bit about the prerequisites that need to be created in order to successfully introduce lifecycle management disciplines.

[00:08:13] It seems like a mental state that you have to arrive to before you even can think about that.

[00:08:19] Bjoern: Exactly. First thing that needs to be understood is I think that change is inevitable when, whether it comes to obsolescence or shortages allocation, just looking back a couple of years, what changed over the years when it comes to technologies?

[00:08:36] We do have technological evolution on the market downscaling of ICs, according to Moore's law, who observed that the number of transistors in a dense, integrated circuit doubles pretty much every two years. And he already stated that back in the sixties and this right till today. So to say we have technology revolution that makes complete technologies obsolete.

[00:08:58] A good example here is how we consume movies or how we transport movies to one place to another coming from the tape over VHS, over compact disc to DVD Blu-ray and flash disk, we don't even need that technology anymore because we're streaming and our major concern is the stable wifi connection to consume the movies in the end.

[00:09:22] So making a complete technology, how to transport movies completely obsolete.

[00:09:27] Eric: And not just one obsolete technology, but you just went through about a half a dozen technologies, that we went through in such an incredibly short span of time. And you think about the amount of investment in the infrastructure and equipment needed for each one of those formats.

[00:09:46] And they're all gone.

[00:09:49] Bjoern: Your so right. I sometimes wonder how we are going to transform to IOT and industry 4.0 with the engineers still being dated back in industry 3.0, trying to make contracts for along devotees support and supply over 30 years, plus without completely ignoring the market forces that are out there.

[00:10:13] When it comes to the thriving driving technologies and entertainment and communication of who could have told me back in 2005 or 2006, that today we all rely on, on our smart phones and we cannot live without these smartphones anymore whilst only 14 years ago. Back in 2007, this is basically the state where we all think the first smart phone was introduced to the market when Steve jobs went to the stage on one of his apple events and he pronounced back in 2007, I got one more thing and that's, as I just said, that's 14 years ago and we cannot live without these smart devices anymore controlling our housing and everyone is having a flat screen TV and so on, but still there's so many individuals out there trying to contract for 30 years plus, and without completely ignoring the state of constant change in technologies becoming an obsolete.

[00:11:13] And that's for me sometimes hard to do or to assist people with their change in thinking in a complete different direction and accepting how today's markets and the world's just function.

[00:11:28] Eric: The idea that not only are things changing rapidly, but it seems to me like if you're thinking about a 30 year contract, you have to come to peace with the idea that you have no idea what the world will look like in 30 years.

[00:11:53] Bjoern: Just think about a functional requirement of a technology that exists today. And do you want to have it maintained over the next 30 years? And now think 30 years back, how many trucks might have come to my company? Just having a computer there that have this, that has the same capabilities as my smartphone that I'm having in my pocket each and every day. Look in the future. What is nearly impossible? Just think. One and a half years back, or two years back who would have told you that we will be in a market of allocation and shortage who in the world could have predicted that we would have been sitting at home, waiting for vaccination, not being able to see family and friends and being stuck for nearly one and a half years.

[00:12:43] Eric: And you make such a good point about. It wasn't only the pandemic. We've got the ship being stuck in the Suez canal. And so many other factors here. What other factors do you think contributed to shortages of chips?

[00:12:58] Bjoern: We've seen shortages before, like the MLCC shortage that just happened a couple of years back and so on.

[00:13:04] The pandemic did make the problem even worse when the demand for electronic components did just rise. When people were sitting at home during the pandemic, They want to get entertained. So general disruption and production and supply chains was complete country shutdowns. However, there was also thunderstorms in the U S far as in Japan, power outages, lack of truck drivers and shortage in general logistic capabilities. I think what made the problems really worse in the end was a complete misunderstanding how to interpret Toyota's just-in-time principle that was completely misunderstood because it is a great idea to place the warehouse on the streets and have everything delivered just in time. But no one ever said to do it for each and every component. And the item that you need to manufacture or maintain your overall product or assembly. No one asked that question before to have the critical items in stock to actually mitigate risk.

[00:14:12] Eric: Do you think that just in time is a concept that we have to abandon.

[00:14:20] Bjoern: Oh, not at all just in time is, is it's a great principle, but it should only be applied for non-critical component because we have to understand change does happen all the time, my major concern of each and every company that either produces or maintains high capital investment goods to get the right items and the expected quality in the current quantity in time at the right place for the desired price. And the question we need to answer is how high is the risk if this is not happening, because something in my environment, I'm not alone in this world. I do have my suppliers manufacturers. I do have my customers. I do have factors that I cannot even influence. What happens if this is not taking place. And how can I possibly forecast that? To identify high risk components and items to mitigate that risk.

[00:15:23] Eric: So there's the fundamental question. You've listed a really long list of important items to note the right item, the right quality, the right quantity, the right place at the right price. The fundamental question becomes what if I can't get that? Tell us a little bit about obsolescence versus. Just availability.

[00:15:48] Bjoern: Obsolescence in the past was often connected to general availability. The question is, was what does availability mean? And it depends to whom am I talking if I would possibly talk to the purchaser and ask that individual on what's the availability of a certain component or item that individual might answer me. Okay. The availability on the market is given. So my next question would be, so what does availability mean? Is it available from a trusted source or is it available from eBay? If I talk to technician afterward and ask that individual on what that person understands under the term availability that individual might look at their machinery, being a maintainer, looking at the machinery, still running yes, it is still available there.

[00:16:38] It did not break down. It didn't fail yet. It is available in my overall application. Next thing. I talked to a logistics provider, that individual might look just at the warehouse and tell me, okay, this item is still available in my warehouse. The question is under which condition and still to the correct quantity.

[00:16:56] So sure availability does have to do with obsolescence overall. However, looking at newer standards that were just recently published. For example, the IEC 62402 obsolescence management standard that was republished and completely redone back in 2019. At the point in time, when an item has become an obsolete or is defined as being obsolete as being no longer in production by the manufacturer to its original specification, I was the German spokesman under this international standard origin. It was great fun. And there's some other standards out there looking for example, at the US market and the SD 22 standards that talks about DMSMS. Although we use the same wording, there can be a misunderstanding and miscommunication. And clear terms and definitions actually do help, not only for our day-to-day business communication, but also in the end and contracts.

[00:17:59] And people need to understand that to really place the minimum fundamentals on starting off a good management discipline when it comes to lifecycle and obsolescence management.

[00:18:11] In my seminars and trainings. I love to ask the question to the audience, if they could possibly give me a percentage of what they would feel comfortable with on how good a set of information needs to be so that they can take the right decisions in the end.

[00:18:29] And the answer is yes. 50%, 60%, 70%. And that's all the wrong answers because there's only one answer. I need 100% correct information to take good decision in the end. But yes, in a real life environment, we are usually already happy was that 60 to 70% of correct information, because that would already be a huge improvement in our day to day life.

[00:18:55] Eric: How does the information get from production to development and vice versa, support and service, all these various levels within the organization and outside the organization. Do you work with your clients on the actual process of communication as well?

[00:19:16] Bjoern: Yes, we do. First of all, if we look into companies themselves internally, usually it's somewhere written down how they have to communicate between all these different departments.

[00:19:29] And it's written down in, in handbooks, guidebooks, processes, documents, forums, records, data, and so on, but I've seen it so often that there's written down processes that are not applied in real life. There's real life processing methodologies that are nowhere written down and some hybrids of these.

[00:19:51] I'm not alone in this world.

[00:19:52] I do have my suppliers, my manufacturers on the one hand off the supply chain, I have my clients, my customers on the other hand, and they have their own written rules. That might be similar to the rules that I have written down internally in my company. But they're certainly not the same. Just to give you an example, just think about that.

[00:20:12] Everyone just wants to do a good job and if we talk about product changes and discontinuations, they just spread it along the supply chain. And I sometimes ask the question to our clients, Hey, have you ever defined where these product discontinuations and production changes arrive in your company? And pretty often the answer is, oh, no.

[00:20:34] So certainly it might happen that the same information might end up in different department for example. Development and production. And what usually happens then is the same as if I would give to individuals that are sitting in two different rooms, the same tasks, but with different information access they're having.

[00:20:57] And certainly they will come back to me with two different results and that's a waste of resources and meantime the process comes out. And that's just the worst case scenario, because one might come back to me and just telling me, Hey, we're having a problem here. We're doing last time, buy and for exactly the same problem, another individual coming back to me and just telling me, Hey, I was finding, I found an alternative component and the third individual is then suddenly coming back to me and telling me, Hey, we're doing a redesign on the next higher assembly.

[00:21:26] And that's making it really messed up.

[00:21:28] Eric: Let's talk a little bit about how we can become more proactive and less reactive to things.

[00:21:35] Bjoern: What does it mean to be proactive and where to invest first and what the hell is proactive management? And also in addition, what is proactive, obsolescence management.

[00:21:48] Being proactive I've seen companies just trying to fetch all the PCNs product change notifications on products discontinuance, notifications that are out there in the market. They will receive every notification that is out there in the market. They consider themselves as being proactive. And obviously that is wrong because once a PCN or PDN is issued, there is certainty that you will encounter a problem. So the only way to now overcome the problem is actually to be hopefully good, reactive approach to that problem that is just standing in front of your door.

[00:22:26] Eric: Like it's already too late. You're all you're doing now is fixing a problem that you've created.

[00:22:30] Bjoern: Exactly. And this is the situation where most of the companies are in right now and they are all trying to be reactive to obsolescence problems that are out there and the shortages. And I really have to line out that those who understood what really being proactive means and how to do proper risk analysis and applying proper methodologies before the COVID pandemic that is out there and are better off now.

[00:22:55] Let's talk about what actually being proactive means, and it's completely different to what we have been taught over the last more or less decades. And the paradigm shift needs to take place to, to make that happen because being proactive actually, doesn't start as late as being in the utilization phase of my product that I'm either producing or that I try to maintain. It starts way earlier. It starts in the engineering department. It should start with the first idea to my product, where I'm still in the system requirements phase of my overall development.

[00:23:37] And what has been taught over the last decades when it comes to engineering. Always talking. We have to design the cost, make it cheap, design to market, make it fast. But, the real focus that will bring real value is if we would more consider the quality and try to design to either resist obsolescence completely with no more hardware, software dependencies with modular designs, with seven replacement items already designed in before release and approval of our own products.

[00:24:14] And this is completely in contradiction to what was taught because in the end, having all this now really more complex engineering, the early stages of my product life cycle, it will not be as cheap anymore as it was before. And more or less likely, maybe even my product will be launched to the market. Maybe it'll leave a little bit later, but, coming to a resilient design would really do the trick and apply proper risk management approaches as early as possible in my preliminary design reviews

[00:24:52] Eric: When a client comes to you, they have somehow come to the conclusion that they need your advice, or they need your help I'm imagining that a lot of times that might be driven by the result of some unpleasant situation.

[00:25:08] Bjoern: Oh yes. You're so right. No one is calling us up or sending us an email because they just heard the sexy word obsolescence and they just want to invest in some of its management. Most of the individuals that get in touch with us and they have experienced obsolescence itself or shortages.

[00:25:30] They wasted a few thousands or even million years of US dollars or euros. When we have a web conference, they have a completely scratched face and they just tell me, Hey, Bjoern, that did hurt and we wasted valuable resources. We don't want to do this again. I saw you talking on one of the conferences you told me you can help.

[00:25:50] So please do so let's get that straight first. And then. The most common question is that people are seeing that we are providing a full-scale obsolescence management and software solution, the lifecycle management client.

[00:26:06] Eric: That sounds like an easy fix.

[00:26:08] Bjoern: It sounds like an easy fix, but for most of the companies, to be honest, don't get me wrong, but this is the wrong approach to, to start off because in the end, the best software in the world alone without understanding how the software works will never, ever solve their problems on discontinuation and shortage. We do provide the best software that is out there in the market when it comes to managing obsolescence, using the SiliconExpert data, but just installing our software that, or just purchasing the license to our software does not do the trick itself.

[00:26:43] I think everyone needs to understand that software, in the end is driven by processes and methodologies. Whilst these processes and methodologies are only working well, if you have good people and good people in the end need the right relationships internally within their company. But also externally throughout the whole supply chain and automate their overall management disciplines in a tailored software.

[00:27:13] So first they should think about cooperative efforts through all verticals of their supply chain with suppliers with the manufacturers, with the clients in the end to come up with good contracts to come out of which position. Where on the one hand, my customer requires 30 years lifetime expected, but on the other hand, I only get two years guarantee and for an already discontinued item.

[00:27:41] So everyone should build its own networks as networks, only harm those who don't have one afterwards come good contracts. And I have to set up stable communication channels because let's get that straight again, software without good data will not help me in the end as well. And software where no one logs in.

[00:28:05] So without clear internal responsibilities is not much of a help either. The software is just the end story that is then hopefully completely automating my internal processes that I have come up with and it also needs an upfront invest because for risk mitigation, it is, I like to compare it with the kind of insurance I have to invest now to save some money and pain later on when a problem might occur.

[00:28:39] Eric: Ah, interesting. When those problems do occur, uh, what's been the best way to communicate with your customers regarding these issues of supply chain and obsolescence. Any specific examples you can think of?

[00:28:50] Bjoern: Oh yes, when a purchaser asked the question, what do you think?

[00:28:54] How long or when will this item become obsolete. And that individual's asking the question through their supply chain. Most likely the answer is, I don't know, it's a high runner item. We are not planning to obsoleted by now.

[00:29:07] Eric: We have no plans at this time.

[00:29:09] Bjoern: We have no plans at this time. So just by altering the question a little might come to a way better answers, like not asking the question like, Hey, when are you planning to obsolete this.

[00:29:21] But asking the question, how long can you guarantee me to supply that item might result in a way better answer than asking the original question. And so we do assist our customers asking the right questions and so on throughout the whole supply chain as well.

[00:29:39] Eric: Bjoern, any helpful lessons learned or words of wisdom you've received that you'd be willing to share with our listeners?

[00:29:47] Bjoern: Yes, several years ago I stumbled across the NASA 100 rules for project managers. They are not so strict. It's more or less collections of lessons learned that were published back in 2003, I think that had given a strict instruction to managers of NASA space flight operations. However, I figured out they're not only applicable for project managers, but also for obsolescence and supply chain managers and lifecycle managers, or however you want to call them.

[00:30:18] And there is two rules. I, I really liked the most out of these 100 plus rules. One rule is the number 62. The rule that states not using modern techniques, like computer systems is a great mistake, but forgetting that computers only stimulates thinking there's still a greater mistake. So meaning what.

[00:30:45] Lined out previously is in the end, if you really want to do great and obsolescence management, the case management risk analysts and so on. Excel spreadsheets alone will not do the job. You need a proper software application to steer internal processes. However, just buying license keys to that software will not do the trick itself either.

[00:31:14] Everyone who's working with our application needs to understand not only how it works, but has to implement individual tailored processes that are then built to individual needs.

[00:31:28] Eric: That has been a recurring theme unintentionally on this podcast since the very first episode about how no system, no software is able to accomplish what we needed to, without the right people doing the work read for me. NASA's rule number 32, would you?

[00:31:49] Bjoern: NASA rule number 32. That's really my favorite where I, and all my seminars and trainings with lines out as follows. People have reasons for doing things the way they do them.

[00:32:06] Most people want to do a good job. And if they don't, the problem is they probably don't know how or exactly what is expected. And seriously, I think we all know, and I have never seen the person who stand up, stands up in the morning, gets ready to work and sets up his or her goal like today, really? I only want to do a shitty job.

[00:32:41] Never, ever met such a person. Okay. We all know it only applies to 99.9%. Everyone knows one person who at least we figured stands up that way, but that's not correct.

[00:32:55] Eric: I love it. This has been really fun. I've really enjoyed this conversation. I think this is a really one of the most interesting and most fun discussions we've had yet on this podcast.

[00:33:06] This has been great.

[00:33:07] Bjoern: Thank you. It was great being a part of that.

[00:33:11] Eric: I'd like to thank our audience for tuning in and thank AMSYS for sponsoring this episode of the SiliconExpert Intelligent Engine. Tune into new episodes that will delve into more of the electronics industry. Upcoming topics will include how nice to have technologies are now taking a front seat and an examination of the ever expanding reach of edge AI.

[00:33:32] Be sure to share our podcast with your colleagues and friends. You can also sign up to be on our email list to receive updates and the opportunity to provide your input on future topics. Go to SiliconExpert.com/podcast to sign up. Until next time, keep the data flowing. .

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