Accenture (NYSE: ACN) and Avanade announced they are co-developing an agentic factory intelligence system with Microsoft to help manufacturers reduce downtime through AI-powered assistance for shop floor operations.

The system, presented at Hannover Messe 2026, enables AI agents to assist factory operators with status checks, diagnostics and troubleshooting when production lines underperform. The agents analyze operational data, machine behavior patterns and production information to suggest causes and recommended actions for equipment issues.

Kruger Inc. and Nissha Metallizing Solutions are serving as early adopters to validate the technology ahead of its planned general availability later in 2026. The system is built on Microsoft Azure, Microsoft Fabric, Microsoft Foundry and Microsoft Copilot technologies and will be offered through a subscription model.

"A 10–15% reduction in mean-time-to-repair quickly translates into multimillion dollar savings when scaled across production lines and sites," said Eric Ashby, chief operating officer at Kruger, a North American tissue and recycled paper products manufacturer.

The system combines structured data from manufacturing execution systems and machine telemetry with unstructured sources including maintenance records and operator manuals. AI agents deliver guidance through conversational interfaces directly at work locations.

Nissha Metallizing Solutions, a manufacturer of metallized paper for packaging, is using the system to improve root cause analysis and reduce scrap and unplanned downtime. The company's global operations manager Edoardo Palmo called prescriptive analytics and AI "a strategic imperative" for the organization.

The collaboration builds on Accenture and Avanade's existing Factory Agents and Analytics offering and represents an expansion of the companies' manufacturing technology partnership with Microsoft.