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Live Product Innovation, Part 3: Process Industries, IoT, And A Recipe For Instant Change

John McNiff

In Part 1 of this series, we looked at how in-memory computing affects live product innovation. In Part 2, we explored the impact of the Internet of Things (IoT) and Big Data on smart connected products. In Part 3, we approach the topic from the perspective of process industries.

Digital this, connected that. Smart whatsits and intelligent doodahs. Those of us who talk about IoT are often reminded that not every manufacturer makes products per se. But IoT isn’t only about the addition of sensors to products. The principles of live product innovation are equally relevant to process manufacturing.

In fact, the “data refinery” offers the potential to manage the Internet of everything — including traditional Big Data sources in tight conjunction with business processes. If your products are food, packaged goods, or chemicals, the promises of live product insights are still compelling. It’s only the data sources and dimensions that are different.

Live and compliant

The complexity of regulatory compliance in process industries continues to grow — whether you’re talking about the U.S. Food and Drug Administration, the U.K. Food Standards Agency, trade embargoes, or hazardous substance management. And compliance isn’t getting any simpler to manage across jurisdictions and industry sectors.

What’s more, customers increasingly demand shortened delivery cycles and highly targeted or even personalized products. That means you can no longer wait till after you formulate a product and release a recipe to determine whether you can actually sell it. You need instant visibility, whether you’re talking about nutritional safe levels assigned by a particular region for food products or volumes of hazardous substances for supply and transit.

But that’s the advantage of live, compliant product innovation. It enables you to perform analytics on previously disconnected data. And it allows you to manage real-time embedded processes across previously disparate systems.

Product data is everywhere

In our last blog we explored the advantages of smart connected products — the ability to link everything from initial product concepts through downstream product delivery. Now let’s apply that to process manufacturing.

Let’s say you see two factors coming together for the SoySnak product you sell in North America and Asia. Your sales data shows that American consumers want 10Kg packages, while Asian customers prefer smaller multipacks. At the same time, your compliance database alerts you that new regulations on salt levels are about to go into effect in several of your target markets.

You want to respond before the regulations are implemented, for several reasons. You’ll need to update recipes, specifications, labels, and packaging. You’ll need to inform your suppliers, manufacturers, quality planners, financial controllers, logistics providers, and retailers. And you’ll need to get the replacement product into the affected markets, with auditable compliance with salt level requirements. Otherwise, you risk producing a large quantity of unsellable inventory.

This example shows us several things:

  • Insights must be as instant as possible.
  • Those insights might come from a variety of sources that your R&D folks didn’t previously have real-time access to.
  • Your products must be localized to a very granular level.
  • Even a minor change affects everything from recipes to packaging specifications, costs of materials, regulatory reporting, logistics providers, retailers, and on and on.

And that leads us to several conclusions:

  • Product data isn’t mission-critical only to R&D. It’s linked to every downstream business process.
  • A live, compliant, and collaborative environment, with the ability to instantly adapt to change, is a business requirement.
  • To achieve that requirement, product data must be part of business processes.
  • The platform the R&D team relies on must be linked to downstream platforms, and it must allow you to leverage and act on real-time insights.

Digital product innovation platform

Of course, the streaming of sensor data from connected things is still relevant in process industries. But for process manufacturers, the most important use cases are more around traceability, supply chain logistics, and product innovation. At some point, data from connected goods will allow new models that more tightly couple the supply chain with innovation cycles.

But a live and compliant product innovation platform achievable today. The question is whether you’ll get there before your competition does.

Come to SAPPHIRE NOW 2017 in Orlando, Florida from May 16 – 18th, 2017, and check out my session “Boost Visibility into Operations for Connected Products with SAP Leonardo” on Tuesday, May 16th, 2017 from 1-1:40 p.m. in Business Application BA324, or check out our R&D sessions.

Follow the conversation on @SCMatSAP and #SAPPHIRENOW.

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John McNiff

About John McNiff

John McNiff is the Vice President of Solution Management for the R&D/Engineering line-of-business business unit at SAP. John has held a number of sales and business development roles at SAP, focused on the manufacturing and engineering topics.

Flash Briefing: The Evolving Opportunities, Issues, And Impact Of Drones

Peter Johnson

Part 1: Drones, Harder Than They Look

We’ll start by demystifying some common misconceptions about drones and looking at their potential for business purposes.

 

Part 2: Can Drones Save Lives?

Building on the topic of drones, we will delve into the expansion of their applications for potential life-saving purposes.

 

Part 3: Drones, More Than A Toy: The Real-Time Business Potential

Take a look at how drones might help your business reach new heights. Early deployments suggest that drones have vast potential for real-time business.

 

Part 4: Drones And Privacy

Learn about the privacy issues that might affect your decisions on drones as a tech tool for your enterprise.

 

Part 5: Rush-Hour Traffic, No More? How Drones In Dubai Are Shaping the Future Of Travel

To wrap up this series, we’ll talk about taxi drones and how they might change how we travel.

 

Tune in Monday through Friday for more Digitalist Flash Briefings on disruptive technologies and trends on your favorite device or app.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist”. Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon, and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

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Peter Johnson

About Peter Johnson

Peter Johnson is a Senior Director of Marketing Strategy and Thought Leadership at SAP, responsible for developing easy to understand corporate level and cross solution messaging. Peter has proven experience leading innovative programs to accelerate and scale Go-To-Market activities, and drive operational efficiencies at industry leading solution providers and global manufactures respectively.

Flash Briefing: Why 3D Printed Food Just Transformed Your Supply Chain

Peter Johnson

Today, we’re talking 3D printing and how it could disrupt operations and supply chains in markets around the world.

 

Tune in Monday through Friday for more Digitalist Flash Briefings on disruptive technologies and trends on your favorite device or app.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist”. Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

Comments

Peter Johnson

About Peter Johnson

Peter Johnson is a Senior Director of Marketing Strategy and Thought Leadership at SAP, responsible for developing easy to understand corporate level and cross solution messaging. Peter has proven experience leading innovative programs to accelerate and scale Go-To-Market activities, and drive operational efficiencies at industry leading solution providers and global manufactures respectively.

Running Future Cities on Blockchain

Dan Wellers , Raimund Gross and Ulrich Scholl

Building on the Blockchain Framework

Some experts say these seemingly far-future speculations about the possibilities of combining technologies using blockchain are actually both inevitable and imminent:


Democratizing design and manufacturing by enabling individuals and small businesses to buy, sell, share, and digitally remix products affordably while protecting intellectual property rights.
Decentralizing warehousing and logistics by combining autonomous vehicles, 3D printers, and smart contracts to optimize delivery of products and materials, and even to create them on site as needed.
Distributing commerce by mixing virtual reality, 3D scanning and printing, self-driving vehicles, and artificial intelligence into immersive, personalized, on-demand shopping experiences that still protect buyers’ personal and proprietary data.

The City of the Future

Imagine that every agency, building, office, residence, and piece of infrastructure has an entry on a blockchain used as a city’s digital ledger. This “digital twin” could transform the delivery of city services.

For example:

  • Property owners could easily monetize assets by renting rooms, selling solar power back to the grid, and more.
  • Utilities could use customer data and AIs to make energy-saving recommendations, and smart contracts to automatically adjust power usage for greater efficiency.
  • Embedded sensors could sense problems (like a water main break) and alert an AI to send a technician with the right parts, tools, and training.
  • Autonomous vehicles could route themselves to open parking spaces or charging stations, and pay for services safely and automatically.
  • Cities could improve traffic monitoring and routing, saving commuters’ time and fuel while increasing productivity.

Every interaction would be transparent and verifiable, providing more data to analyze for future improvements.


Welcome to the Next Industrial Revolution

When exponential technologies intersect and combine, transformation happens on a massive scale. It’s time to start thinking through outcomes in a disciplined, proactive way to prepare for a future we’re only just beginning to imagine.

Download the executive brief Running Future Cities on Blockchain.


Read the full article Pulling Cities Into The Future With Blockchain

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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Raimund Gross

About Raimund Gross

Raimund Gross is a solution architect and futurist at SAP Innovation Center Network, where he evaluates emerging technologies and trends to address the challenges of businesses arising from digitization. He is currently evaluating the impact of blockchain for SAP and our enterprise customers.

Ulrich Scholl

About Ulrich Scholl

Ulrich Scholl is Vice President of Industry Cloud and Custom Development at SAP. In this role, Ulrich discovers and implements best practices to help further the understanding and adoption of the SAP portfolio of industry cloud innovations.

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4 Traits Set Digital Leaders Apart From 97% Of The Competition

Vivek Bapat

Like the classic parable of the blind man and the elephant, it seems everyone has a unique take on digital transformation. Some equate digital transformation with emerging technologies, placing their bets on as the Internet of Things, machine learning, and artificial intelligence. Others see it as a way to increase efficiencies and change business processes to accelerate product to market. Some others think of it is a means of strategic differentiation, innovating new business models for serving and engaging their customers. Despite the range of viewpoints, many businesses are still challenged with pragmatically evolving digital in ways that are meaningful, industry-disruptive, and market-leading.

According to a recent study of more than 3,000 senior executives across 17 countries and regions, only a paltry three percent of businesses worldwide have successfully completed enterprise-wide digital transformation initiatives, even though 84% of C-level executives ranks such efforts as “critically important” to the fundamental sustenance of their business.

The most comprehensive global study of its kind, the SAP Center for Business Insight report “SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart,” in collaboration with Oxford Economics, identified the challenges, opportunities, value, and key technologies driving digital transformation. The findings specifically analyzed the performance of “digital leaders” – those who are connecting people, things, and businesses more intelligently, more effectively, and creating punctuated change faster than their less advanced rivals.

After analyzing the data, it was eye-opening to see that only three percent of companies (top 100) are successfully realizing their full potential through digital transformation. However, even more remarkable was that these leaders have four fundamental traits in common, regardless of their region of operation, their size, their organizational structure, or their industry.

We distilled these traits in the hope that others in the early stages of transformation or that are still struggling to find their bearings can embrace these principles in order to succeed. Ultimately I see these leaders as true ambidextrous organizations, managing evolutionary and revolutionary change simultaneously, willing to embrace innovation – not just on the edges of their business, but firmly into their core.

Here are the four traits that set these leaders apart from the rest:

Trait #1: They see digital transformation as truly transformational

An overwhelming majority (96%) of digital leaders view digital transformation as a core business goal that requires a unified digital mindset across the entire enterprise. But instead of allowing individual functions to change at their own pace, digital leaders prefer to evolve the organization to help ensure the success of their digital strategies.

The study found that 56% of these businesses regularly shift their organizational structure, which includes processes, partners, suppliers, and customers, compared to 10% of remaining companies. Plus, 70% actively bring lines of business together through cross-functional processes and technologies.

By creating a firm foundation for transformation, digital leaders are further widening the gap between themselves and their less advanced competitors as they innovate business models that can mitigate emerging risks and seize new opportunities quickly.

Trait #2: They focus on transforming customer-facing functions first

Although most companies believe technology, the pace of change, and growing global competition are the key global trends that will affect everything for years to come, digital leaders are expanding their frame of mind to consider the influence of customer empowerment. Executives who build a momentum of breakthrough innovation and industry transformation are the ones that are moving beyond the high stakes of the market to the activation of complete, end-to-end customer experiences.

In fact, 92% of digital leaders have established sophisticated digital transformation strategies and processes to drive transformational change in customer satisfaction and engagement, compared to 22% of their less mature counterparts. As a result, 70% have realized significant or transformational value from these efforts.

Trait #3: They create a virtuous cycle of digital talent

There’s little doubt that the competition for qualified talent is fierce. But for nearly three-quarters of companies that demonstrate digital-transformation leadership, it is easier to attract and retain talent because they are five times more likely to leverage digitization to change their talent management efforts.

The impact of their efforts goes beyond empowering recruiters to identify best-fit candidates, highlight risk factors and hiring errors, and predict long-term talent needs. Nearly half (48%) of digital leaders understand that they must invest heavily in the development of digital skills and technology to drive revenue, retain productive employees, and create new roles to keep up with their digital maturity over the next two years, compared to 30% of all surveyed executives.

Trait #4: They invest in next-generation technology using a bimodal architecture

A couple years ago, Peter Sondergaard, senior vice president at Gartner and global head of research, observed that “CIOs can’t transform their old IT organization into a digital startup, but they can turn it into a bi-modal IT organization. Forty-five percent of CIOs state they currently have a fast mode of operation, and we predict that 75% of IT organizations will be bimodal in some way by 2017.”

Based on the results of the SAP Center for Business Insight study, Sondergaard’s prediction was spot on. As digital leaders dive into advanced technologies, 72% are using a digital twin of the conventional IT organization to operate efficiently without disruption while refining innovative scenarios to resolve business challenges and integrate them to stay ahead of the competition. Unfortunately, only 30% of less advanced businesses embrace this view.

Working within this bimodal architecture is emboldening digital leaders to take on incredibly progressive technology. For example, the study found that 50% of these firms are using artificial intelligence and machine learning, compared to seven percent of all respondents. They are also leading the adoption curve of Big Data solutions and analytics (94% vs. 60%) and the Internet of Things (76% vs. 52%).

Digital leadership is a practice of balance, not pure digitization

Most executives understand that digital transformation is a critical driver of revenue growth, profitability, and business expansion. However, as digital leaders are proving, digital strategies must deliver a balance of organizational flexibility, forward-looking technology adoption, and bold change. And clearly, this approach is paying dividends for them. They are growing market share, increasing customer satisfaction, improving employee engagement, and, perhaps more important, achieving more profitability than ever before.

For any company looking to catch up to digital leaders, the conversation around digital transformation needs to change immediately to combat three deadly sins: Stop investing in one-off, isolated projects hidden in a single organization. Stop viewing IT as an enabler instead of a strategic partner. Stop walling off the rest of the business from siloed digital successes.

As our study shows, companies that treat their digital transformation as an all-encompassing, all-sharing, and all-knowing business imperative will be the ones that disrupt the competitive landscape and stay ahead of a constantly evolving economy.

Follow me on twitter @vivek_bapat 

For more insight on digital leaders, check out the SAP Center for Business Insight report, conducted in collaboration with Oxford Economics,SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart.”

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Vivek Bapat

About Vivek Bapat

Vivek Bapat is the Senior Vice President, Global Head of Marketing Strategy and Thought Leadership, at SAP. He leads SAP's Global Marketing Strategy, Messaging, Positioning and related Thought Leadership initiatives.