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SteamChain provides fintech solution for manufacturing

By Anna Lardinois, Startup Storyteller

SteamChain founder and CEO Mike Cromheecke thinks outside of the box. Way outside of the box.

His company, launched in 2017, is introducing a new way to procure industrial assets and support the ecosystem. Using the concept of Machine-as-a-Service, SteamChain “streamlines data collection and payment solutions for the production market” through a system based on the concept of joint ownership of manufacturing machinery.

The company is certain MaaS will result in increased production, decreased downtime, and greater accountability all across the board for the companies that serve manufacturers.

And all of that will lead to greater profits for all in the manufacturing ecosystem.

Cromheecke explained the concept behind SteamChain and why it could be what the US market needs to excel in the global manufacturing market.

What does Machine-as-a-Service (MaaS) mean

What we’re doing is trying to create a new way to procure industrial assets that focuses on outcome to help to assist the redevelopment of the ecosystem necessary to support this kind of new technology. Really, it’s a new market opportunity.

Why is MaaS the right solution for the manufacturing ecosystem?

We need to figure out a different way to do it, because the tradition of capital equipment procurement that dates back to the original industrial revolution is I give you money, you give me the machine, we go our separate ways.

With advanced machinery today, that’s not really a great articulation of the risk and the joint ownership of responsibility for the performance of the asset.

To quickly move forward to deploy assets, requires companies to vet the technology- to be intimately involved in the technology choices up front. They can’t just write a check to some supplier and know that they’re going to get a solution that’s going to work because those suppliers don’t exist. Those solutions don’t exist.

What does it mean that the “solutions don’t exist?”

I want to give you an easy example: if I want to put in a consumer electronic manufacturing facility in the US right now, it most certainly isn’t going to look anything like the manufacturing processes in Asia.

In Asia, the regulatory environment is different. The labor market dynamics are different, and the amount and type of automation will be different. The types of machines and how they’re deployed and how those lines work will have to be different, or it (the business) won’t work.

So, if I want to do that, who do I call?  There’s limited experience in the US that understands how to produce consumer electronics in this market.  How do you rebuild the ecosystem in an incremental and efficient manner? How do first movers help ensure that they are not burdened with the totality of the risk associated with such an endeavor?

What I want to do is connect that back to how MaaS will create a scalable solution for incrementally deploying automation technology in a way that you’re validating and confirming the value of that automation. You’re not just writing checks, hope it works, and when it doesn’t, you’re out.

What we need to figure out how to do is to break those problems down and distribute those to small and midsized organizations. Mid-size machine builder- there’s still plenty of companies in this country. We need to figure out how to invest in those companies. We need to figure out how to help those companies grow, and we need to do it in conjunction with a system that validates their ability to solve the problem.

But how do we get them involved in the process? How do we almost franchise them in a way where what we’re doing is creating competition, creating a goal that they need to achieve, setting targets and then monetizing their ability to design machines that meet those requirements?

That’s where MaaS comes in.

How does MaaS technology work?

(Technology) monitoring the machine, providing feedback to all parties on the performance of the asset, is not necessarily novel or new, what’s novel and new is that we’re linking that up to fintech technology so that we can execute financial transactions based on that performance data in a secure and transparent way for all parties.

We can do that across multiple parties. So, for any given asset based on the performance of that asset, there may be payments to the people who designed the machine, payments to the people who built the machine, payments to people who are servicing the machine, payments to the people that are operating the machine, all of whom share a percentage component of the value of the production that the machine produces.

 It’s a different systematic way to think about the value chain… It’s a more collaborative, more community focused way to think about scaling new architectures in automation and we think it’s particularly useful as we tackle this problem of reshoring some of these industrial processes that have an atrophy point of nonexistence here in the US.

Is it hard to get people to buy into the idea of MaaS?

There’s a lot of interest. (SteamChain is) speaking to some of the largest technology companies in the world and there’s a sincere interest by many of these both large global, as well as mid-size companies. We do have an installed base in the field running in real production. So, we’ve got plenty of proof of concept.

The challenge is it’s big, it’s new, and it’s in an industry that doesn’t necessarily have a lot of history and a lot of proof points of trying something big, and new, and different. It’s just not that kind of industry.

We’ve talked to hundreds if not thousands of companies about this idea, we see it coming in the industry, but meaning that everybody’s interested in everybody starting to think about how they’re going to get involved, but they’re all thinking about it from the perspective of ‘how do we do that’ and ‘how do we defend our territory?’

How do we do that in terms of the way we think about the market today and the way we’re being rewarded today? It’s a little bit too far out there for some of the big players, which is unfortunate. I think it’s a missed opportunity.

In your opinion, what component of the manufacturing ecosystem needs to use MaaS first for it to gain acceptance in the industry?

I think it’s the technology companies that support the manufacturers of the machines and the users. If you step back the market today, it’s end users who buy machines and operate machines. OEMs (Equipment Manufacturers) or systems integrators who design, build, and install machines. But they use relatively standardized components from technology companies like Rockwell Automation, Schneider Electric, Siemens, and Hitachi, with Rockwell Automation, being the dominant player in the US market.

To learn more about SteamChain’s fintech solution for manufacturing, click here.

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