Augmented Reality in Procurement: Revolutionizing Factory Acceptance Tests for Buyers… or?

In the landscape of procurement and supply chain management, technology continues to push the boundaries of how businesses operate and collaborate. One such technological advancement that promises to transform traditional procurement processes is Augmented Reality (AR). Specifically, AR holds significant potential in enhancing how buyers conduct Factory Acceptance Tests (FATs), enabling more efficient, accurate, and immersive evaluation processes. This blog post explores the exciting possibilities of leveraging AR technology for FATs, illustrating where buyers team can virtually visit supplier sites without leaving their offices but having a man onsite.

The Current State of FATs

Traditionally, FATs are critical milestones in the procurement process, especially in industries reliant on complex machinery and equipment. They involve buyers visiting the supplier’s manufacturing site to verify that the equipment meets specified requirements before shipment. This process ensures that any defects are identified and corrected, reducing the risk of costly downtime or repairs post-installation. However, FATs can be time-consuming, costly, and resource-intensive, requiring significant travel and coordination. Learn more about FAT.

The AR Revolution in Procurement

Enter Augmented Reality – a technology that overlays digital information onto the physical world, enhancing the user’s perception of reality. Through AR, buyers can conduct virtual visits to suppliers’ factories, experiencing the FAT process in a whole new dimension. Here’s how it can work:

1. Virtual Presence: Using VR/AR headsets or glasses, buyers can be virtually present at the supplier’s site. They can walk through the manufacturing floor, inspect equipment, and interact with the environment as if they were physically there.
2. Real-Time Data Overlay: AR can display real-time data overlays on the equipment being tested, including specifications, performance metrics, and operating instructions. This immediate access to data enables buyers to conduct thorough evaluations and make informed decisions.
3. Interactive Troubleshooting: During the FAT, if a potential issue is detected, buyers and suppliers can collaboratively troubleshoot in real-time. AR can facilitate a shared visual experience, allowing both parties to highlight concerns, annotate directly on the equipment (virtually), and discuss corrective measures.
4. Record and Replay: AR enables the recording of the entire FAT process, allowing buyers to review the test at any time. This feature is invaluable for detailed post-test analyses, training purposes, or when validating compliance with stakeholders.
5. Expert Consultation: Buyers can invite remote experts to join the AR-enabled FAT, offering their insights without the need for additional travel. This collective expertise can enhance the quality of the evaluation and foster stronger collaboration between all parties involved.

AR in FAT by using NSFLOW Remote Support Module.

The use of AR in conducting FATs represents a paradigm shift, making the process more efficient, accurate (?) and collaborative. It reduces the need for physical travel, saving time and costs while minimizing the environmental footprint associated with traditional site visits. Moreover, AR enhances the buyer’s ability to conduct detailed inspections, access real-time data, and engage in interactive problem-solving, ultimately leading to better procurement outcomes.

As procurement professionals, embracing AR technology for FATs and other processes signals a move towards a more digital, connected, and sustainable future. The potential benefits of AR in procurement are vast, and as technology continues to advance, it will undoubtedly open up new avenues for innovation and efficiency in supply chain management.

Learn more about Sourcing process, where FAT can be a part, by entering the course Sourcing Process 1. One supplier is NSFLOW and their offering “Remote Support Module”. Learn more at AR support to FAT at NSFLow.

Other potential applications of Augmented Reality in Procurement

Augmented Reality (AR) holds significant potential to transform the landscape of procurement and supply chain management beyond Factory Acceptance Tests (FATs). Its immersive and interactive capabilities can be leveraged across various aspects of procurement to enhance efficiency, accuracy, and the decision-making process. Here are some other applications of AR for professional buyers:

1. Supplier Facility Tours

AR can enable virtual tours of supplier facilities, allowing buyers to assess a supplier’s operations, quality control measures, and compliance with labor and environmental standards without the need for physical travel. This can significantly reduce the time and cost associated with supplier vetting and audits.

2. Product Demonstrations

Suppliers can use AR to provide buyers with interactive product demonstrations, showcasing the features, functionalities, and potential applications of their products in a highly detailed and engaging manner. This can aid in product selection and comparison, ensuring that procurement decisions are based on comprehensive product knowledge.

3. Training and Onboarding

AR can be used to create immersive training programs for procurement professionals, covering everything from internal procurement processes and software to negotiations and market analysis techniques. Such training can be highly engaging and more effective than traditional methods.

How would an AR supported Supplier factory tour be conducted?

Implementing Augmented Reality in Procurement for Supplier Facility Tours involves a blend of technology, preparation, and collaboration between buyers and suppliers. Here’s how a practical setup could look:

1. Pre-Tour Preparation

• Supplier Onboarding: Educate suppliers about the objectives and benefits of using AR for facility tours. Ensure they have the necessary technology and understand how to showcase their facilities effectively.
• Technical Requirements: Determine the AR hardware (e.g., AR glasses or smartphones/tablets with AR capabilities) and software needed for both parties. Ensure a stable internet connection to support live data transmission.
• Content Development: Suppliers prepare AR content, including 3D models of the facility, interactive points of interest (e.g., machinery, production lines, safety stations), and data overlays (e.g., production volumes, compliance certificates, operational metrics).
• Schedule and Agenda: Coordinate schedules to set a date and time for the tour. Develop an agenda that covers key areas of interest within the facility and allocates time for questions and discussions.

2. Conducting the AR Facility Tour

• Initiation: The tour begins with an introduction by the supplier, explaining the layout of the facility and what the buyer will see. Participants wear AR devices or use their smartphones/tablets to access the AR experience.
• Navigation: The buyer navigates through the virtual facility tour guided by markers or instructions within the AR interface. The supplier can control the flow of the tour, highlighting specific areas or machinery of interest.
• Interactive Elements: As the buyer explores, they encounter interactive elements that provide additional information or data overlays on specific points, such as machinery specifications, production processes, quality control checkpoints, and environmental sustainability practices.
• Real-Time Communication: The buyer and supplier communicate in real-time, allowing the buyer to ask questions or request further details about what they are seeing. This communication can be facilitated via integrated audio in the AR platform or through a separate conferencing tool.
• Documentation and Recording: Key observations and findings from the tour can be documented within the AR platform. Some systems may allow the recording of the tour for later review or sharing with stakeholders who could not attend.

3. Post-Tour Follow-Up

• Debrief and Feedback: After the tour, the buyer and supplier debrief to discuss observations, address any concerns, and explore next steps. Feedback on the AR tour experience can help refine future tours.
• Review Recorded Material: If the tour was recorded, the buyer can review the material to further analyze specific areas or to share insights with their team.
• Actionable Insights: Based on the tour, the buyer develops actionable insights for procurement decisions, such as identifying potential risks, evaluating supplier capabilities, and assessing compliance with standards.

Technical and Logistical Considerations

• Compatibility: Ensure that the AR platform chosen is compatible with the hardware and operating systems used by both parties.
• Security: Address data security and intellectual property concerns, ensuring that sensitive information shared during the tour is protected.
• Scalability: Choose solutions that can be scaled or adapted for different suppliers or types of facility tours, maximizing the investment in AR technology.

Adopting AR for Supplier Facility Tours not only enhances the procurement process by providing detailed insights into supplier operations without the need for physical travel but also fosters transparency and collaboration between buyers and suppliers. As AR technology continues to advance, its application in procurement and supply chain management is expected to grow, offering innovative ways to assess and engage with suppliers.

The integration of AR into procurement processes represents a significant leap forward in terms of operational efficiency, strategic decision-making, and the overall enhancement of procurement functions. As AR technology continues to evolve and become more accessible, its adoption within procurement is set to increase, offering new ways to overcome traditional challenges and drive value within organizations. But given the planning and technology required…can we really do it? Should we replace the travel agency with an Augmented Reality service provider?

Note: Illustration to the blogpost “Augmented Reality in Procurement” is created by Chat-GPT on March-29, 2024.