Across North American manufacturing, unplanned downtime is a massive drain on productivity. Industry data shows manufacturers lose up to US$50 billion each year due to unexpected outages, with some high-volume facilities losing as much as US$260,000 per hour.

At the same time, predictive maintenance, which uses sensors and AI to detect failures early, is becoming one of the fastest-growing segments of industrial automation. Reports indicate that most manufacturers plan to increase investment in AI-driven monitoring over the next several years; however, cost remains a major barrier, leaving many plants unable to monitor more than a fraction of their equipment.

Meanwhile, a 2024 survey of manufacturing decision-makers showed three-quarters of respondents plan to leverage predictive maintenance in the coming years, highlighting how quickly manufacturers are looking to adopt these technologies, and how rapidly the sector is changing.

For Dennis Kuzmenko, co-founder and CEO of Innovate-Ops, a Waterloo startup built on decades of real-world operations experience, closing that adoption gap is the entire mission, and recent traction shows they’re hitting a critical industry need.

A big win with Purolator

That momentum includes a big win at the Purolator Fast Track Pitch Event, a collaboration with Communitech. Innovate-Ops pitched a solution for Purolator’s equipment to enhance efficiency and safety, earning a Proof of Concept (PoC) spot.

“We started building based on our own experience and then we interviewed a few engineers in the industry. But when we saw that such a large and innovative company was looking for a solution like ours, that was our first big validation that we were building something important.”

Working with a major enterprise also expands the potential impact commercially and technically.

"This is the next level for us. Interest and validation from larger companies show the potential to scale our solution to many more processing centers,” said Kuzmenko. “Large corporations with engineering teams that understand what they need are also interested in our startup’s solution. For us, it’s multi-level validation, for our team, for investors, and for other customers, which helps a lot in this case with Purolator."

Why most plants still miss problems

Even as investment grows, most manufacturers remain far behind where they want to be. The company recently connected with a large UK-based insurance provider, which confirmed just how limited equipment monitoring remains across the industry.

“Based on internal research, customers’ manufacturing facilities were monitoring only 10% of their equipment. For us, it was a big validation that what we knew from our experience was now confirmed by a large company,” he said. “The main reason is that for many companies, it’s cost-prohibitive to monitor all of their equipment, so they focus only on the most critical assets."

In other words, even small failures can trigger costly shutdowns, and most plants never see them coming.

Smarter, cheaper monitoring

Innovate-Ops’ solution aims squarely at this gap. The company combines affordable IoT sensors, small devices that collect real-time data from machines, with AI to track vibration, temperature, sound and other signals that indicate equipment stress. These sensors send data to dashboards that plant teams can monitor in real time, identifying problems early before a machine breaks down and production halts.

By using smaller, lower-cost sensors alongside AI processing, Innovate-Ops delivers insights similar to expensive systems without the high price tag.

“We deploy our device with sensors on critical equipment to collect data like vibration, temperature, sound, and whatever is important for our clients,” said Kuzmenko. “We have dashboards on maintenance or plant managers’ computers so they can see what’s happening with their equipment and receive alerts when something is wrong.”

A founder with manufacturing depth

Dennis Kuzmenko isn’t new to the factory floor; he’s spent 20 years in manufacturing leadership roles across Canada and the U.S.

"About a year ago, I started building this startup with the idea that monitoring equipment is more and more important now with all the AI tools available."

His vision? Build predictive monitoring that prevents downtime without the prohibitive cost that has traditionally made full-scale monitoring inaccessible.

Built on local roots

The Innovate-Ops team leans on the strength of the Waterloo-region ecosystem, drawing support from accelerators, mentorship and local founders.

"When I started the business, I realized how vibrant the startup community here in Waterloo Region is,” said Kuzmenko. “We have been getting support from a few different accelerators and a high level of mentorship support. We have some technical knowledge and understanding of the industry, but, for example, I don't have much knowledge around finance, PR, marketing, or investor conversations. Receiving support for the other aspects of business has been incredibly helpful for us.”

This ecosystem support fills strategy gaps beyond engineering, from financing to go-to-market readiness.

Investing in growth (and the planet)

Innovate-Ops is now raising US$2 million in seed funding to expand the team, scale deployments and reach US$1–2 million in annual revenue within 18 months.

The company is also integrating energy-monitoring capabilities to help manufacturers meet ESG benchmarks.

"We have added to our device also energy monitoring feature. So we can help with ESG goals and decarbonizing operations."

From firefighting to forecasting

Ultimately, Innovate-Ops wants to shift manufacturers from reacting to failures toward preventing them, boosting both resilience and competitiveness in a tight global market.

"We see that there is a lot of potential for what we are building now that AI is unlocking new areas. Manufacturing can be much more efficient, and we believe that we are in one of those areas,” said Kuzmenko. “And it’s very important to reduce downtime of manufacturing equipment, manufacturing facilities and help to be more efficient. We believe it can be critical for companies to remain competitive enough to stay in the business."

Are you ready to take your solution to the next level? Reach out to Communitech today and we’ll get you connected.