How Telcos Stay Relevant In A Digital Revolution

Judy Cubiss and Ginger Shimp

Digital trends are doing more than taking over the telco industry. They are disruptive, changing the way telcos must do business. Companies such as Netflix, WhatsApp, and even Google have completely transformed the customer experience—and customer expectations—through speed and efficiency.

Enter the realm of hyperconnectivity.

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (social, mobile, analytics, cloud) technology podcast, caught up with Stephan Gatien, global head telecommunications industry business unit SAP, on an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries.

over the top players are leveraging the hyperconnected society to deliver services that used to be the bread and butter of telcos

With everything involving the Internet of Things (IoT) happening lightning-fast and at the stroke of a few keys, customers of telecommunications companies (telcos) expect the same degree of service. Telcos unable to meet the speed of demand quickly fall out of relevance. And this trend is not going to slow down anytime soon.

Compounding the problem, Gatien points out, “Voice data is almost free, and we take this for granted. And as a result, the competition of these over-the-top players has actually had a massive negative impact on the top line of most telecommunications operators.”

Furthermore, by 2020 there will be an estimated 5.9 billion smartphones in the world. In terms of speed of connectivity, the next generation of 5G wireless connectivity will be 100 times faster than 4G. Anyone who grew up at the advent of the Internet and social media is well aware of the drastic speed of growth in the tech world. This will have an immense impact on the telcos.

Moving beyond communications

Along with the disruption of technologies, telcos must disrupt their own way of doing business. These companies can no longer provide basic communications services, including telephone access and Internet service. They must push beyond the boundaries of what was formerly defined as telco provisions. Gatien said, “The entire challenge of this industry is to stay relevant in this digital era, continue to connect and power everything that we do. But find ways to create sustainable revenue streams with the new domains, like the Internet of Things and faster connections.”

Take Big Data. Telcos are in a prime position to gather data from communications customers, such as data compiled from home security systems. In fact, telcos have been at the forefront of Big Data since its conception. However, being able to store, analyze, and utilize this data is outside of the comfort zone of most telcos. It shouldn’t be. And in order for these companies to continue to remain relevant in the digital area, they need to find an efficient tech approach to dealing with Big Data.

Keeping up the pace

Telcos must also differentiate their service offerings. Look at how T-Mobile has built an alternative image against established companies. Gatien explains, “It’s not because of the inherent services they provide, but because of stances they are taking: no contract, automatic upgrade of phones, making your life easier—and as a result, being able to, or potentially able to, accompany you into your digital lives.”

Fanzo agrees that this flexibility makes a big difference to millennials. In addition, many developed markets are already saturated, so providing friendly connected services, Gatien predicts, will be one of the most important drivers for growth and relevancy.

Telcos may also need to assess a two-tier system: commercial and residential. Telcos preparing for the future may look towards industries for differentiation. Healthcare, financial services, home security, entertainment: Each of these industries requires a personalized approach that reflects the hyperconnectivity of society.

The key to this is understanding customers better so services can be easily personalized to ensure a constant revenue flow for future investment. Then telcos can move from being simple communication providers to become value-added digital service providers, offering everything from digital home automation and smart life services to e-health care and IoT services.

A good example is cybersecurity, which is fast becoming one of the more pertinent areas of telco services. Without safe and secure connections, consumers’ data and personal information, as well as the livelihood and interests of corporations, is at risk. Along these same lines is cloud computing, which has become second nature with the success of cloud sharing services like Dropbox and Google Docs. Telcos must find ways to provide these niche services without degrading the quality of communications technology.

The question of regulation always comes up for telcos as bidding for the different spectrums, and associated regulations is unique for the industry. There are positives, such as loosening of regulations in the UK, which, according to Gatien, has led to an accelerated consolidation, particularly from the traditional incumbents getting into markets that they had previously missed. And then there are negatives, such as the requirements for net neutrality, where telcos invest billions in the network but other companies reap the benefits. How this ultimately will evolve will be another factor in the success of many telcos.

Connecting with a human audience

Amid all the talk about technologies, it’s easy to overlook the end user: the consumer. Connecting with consumers in this hyper-connected culture means the difference between leading the competition and lagging behind. Without customers, after all, the latest tech advances offer little.

So where can telcos make their mark? By personalizing their customer engagement while simultaneously excelling in the retail experience. While telcos once held their presence with little to no user input, the instant access to these companies—thanks to the Internet—has changed the game. The personal touch and visibility of the company is especially important to millennials. Fanzo hailed T-Mobile’s John Leger as a great example of access to executives, which in turn changed millennials’ mindset and subsequent purchasing decisions.

T-Mobile's John Leeger's ability to be social and engaged gave me confidence that they are pushing the envelope

Today’s companies must listen to the real world and the real-time requests of consumers, creating a seamless customer experience. This is vital to staying abreast of a changing culture, which is happening in real time. It is also the keystone for maintaining a digital core that will keep telcos in touch with the rest of the technologies and opportunities thrown their way.

To listen to this episode of Digital Industries for the telecommunications industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.

Transforming into a truly digital business is so much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.

For more on how SAP can help you drive your own digital transformation in the telecommunications industry, visit us online.

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Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.

Three Reasons Discrete Manufacturers Must Integrate Digital And Physical Products

David Parrish

Discrete manufacturers in automotive, aerospace and defense, high tech, and industrial machinery and components are facing unprecedented pressures on their ability to innovate, engage with customers and consumers, and maximize return on their assets. By 2018, nearly one-third of discrete manufacturing leaders will be disrupted by competitors that are digitally enabled, reports IDC. In the age of digital disruption and transformation, discrete manufacturers must rethink traditional business models to capitalize on new, digital opportunities. One such opportunity is the sale of digital products.

Digital products offer many benefits over physical products, including frictionless buying, immediate delivery, and no shipping or supply chain management costs. But digital products can be difficult to sell on their own. To address this challenge, companies are pairing digital products with physical ones. For discrete manufacturers, this pairing offers new business models and revenue-stream opportunities.

Valuing digital products: Using physical products to drive digital sales

What is the value of a digital product? Consumers in the B2C world have historically been slow to jump at the purchase of digital products. As Fast Company reports, it takes a companion physical product to give the digital product value. For example, consider the case of Apple’s iPod and digital music downloads. In the age of Napster and free MP3s, digital music downloads were a slow seller. This changed after Apple introduced its iPod in 2001, creating a new physical product to house these digital downloads. More than 5 billion songs were sold through Apple’s iTunes store by 2008.

Learning from Apple, discrete manufacturers can adopt a similar approach by integrating their physical and digital offerings. Digital offerings, such as remote upgrade service and preventive maintenance contracts, are a natural add-on to physical products. IDC estimates that by 2018, 60% of large manufacturers will bring in new revenue from information-based products and services with embedded intelligence driving the highest profitability levels.

Three applications for digital-physical product integration

For discrete manufacturers, integrating digital and physical products offer three key benefits:

  1. Increased aftermarket value. Selling remote monitoring and digital services is perhaps the most obvious application for digital and physical product integration. Offering upgrades, continuous service, and preventive maintenance via remote monitoring is an important new revenue stream for discrete manufacturers. For example, remote monitoring can dramatically extend the shelf life of industrial machinery used in the food and beverage industries, high-tech manufacturing and automotive manufacturing. Typically, an industrial machine has a shelf life of 20+ years. But the rapid pace of technological change means machines constantly need to be retrofitted. Conditioning-monitoring sensors combined with the Internet of Things (IoT), cloud technology, and analytics would enable discrete manufacturers to offer ongoing digital service plans.
  1. Data monetization. IDC estimates that less than 10% of data is effectively used. Discrete manufacturers must treat data as a digital asset and use this data to improve user experiences, provide insight, influence decisions, and set directions. In the automotive space, discrete manufacturers can leverage usage and engagement information to effectively send content, such as software upgrades and infotainment. Like the Apple iPod/digital download model, auto manufacturers could use the physical product (the car entertainment system) to sell the digital product (the infotainment) to drivers. Automobile manufacturers can use analytic data to better understand driving patterns and preferences, location usage, and demographics. Analyzing this data will allow manufacturers to better target their digital infotainment offerings.
  1. Faster design-to-market cycles. Embedding sensors in industrial machines will generate a wealth of digital performance data that is useful not only for predictive maintenance but also for streamlining future production. Industrial machines are incredibly complex. Ideally, these machines are built following a model-based systems engineering approach that allows designs to be reused for a variety of customers. Integrating sensors into these machines will produce a stream of data that discrete manufacturers can use for future production guidelines. This includes using the data to configure new customer orders. This approach accelerates design-to-market cycles and increases customer satisfaction.

For discrete manufacturers to capitalize on new business opportunities, they need a strategic partner to support digital and physical product integration. Manufacturers need a platform that enables the seamless integration of industrial IoT with advanced analytics process to support product development.

Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading Accelerating Digital Transformation in Industrial Machinery and Components. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?

Comments

David Parrish

About David Parrish

David Parrish is the senior global director of Industrial Machinery & Components Solutions Marketing for SAP. Before joining SAP, he held various product and industry marketing positions with J.D. Edwards, PeopleSoft, and QAD going back to 1999.

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

Ted Basile

About Ted Basile

Ted Basile is the senior director responsible for global marketing for SAP HANA Enterprise Cloud. His charter spans messaging, positioning, and building customer-facing assets to support all marketing and sales activities. @teddybgame | LinkedIn

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

Mukund Rao

About Mukund Rao

Mukund Rao is Director of the Automotive Business Unit at SAP. He has been a key contributor to the business unit for over 18 years, focusing on both OEMs and suppliers. Mukund earned his MBA from University of Michigan and M.S. degree in Mechanical Engineering from Oklahoma State University.

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

Tom Cassell

About Tom Cassell

Tom Cassell is an IBM Executive and the Global Leader for IBM’s Ariba Practice. He has led multiple transformation programs that improved source-to-pay capabilities by leveraging Ariba solutions He is leading IBM GBS’s Cognitive Procurement initiative, which includes the integration of Watson into Ariba. Tom has over 20 years of experience in supply chain management, with a particular focus in the planning and procurement domains.

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

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Derek Klobucher

About Derek Klobucher

Derek Klobucher is a Brand Journalist, Content Marketer and Master Digital Storyteller at SAP. His responsibilities include conceiving, developing and conducting global, company-wide employee brand journalism training; managing content, promotion and strategy for social networks and online media; and mentoring SAP employees, contractors and interns to optimize blogging and social media efforts.

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

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Elizabeth Milne

About Elizabeth Milne

Elizabeth Milne has over 20 years of experience improving the software solutions for multi-national, multi-billion dollar organizations. Her finance career began working at Walt Disney, then Warner Bros. in the areas of financial consolidation, budgeting, and financial reporting. She subsequently moved to the software industry and has held positions including implementation consultant and manager, account executive, pre-sales consultant, solution management team at SAP, Business Objects and Cartesis. She graduated with an Executive MBA from Northwestern University’s Kellogg Graduate School of Management. In 2014 she published her first book “Accelerated Financial Closing with SAP.” She currently manages the accounting and financial close portfolio for SAP Product Marketing. You can follow her on twitter @ElizabethEMilne

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

Johannes Papst

About Johannes Papst

Johannes Papst, solution manager for SAP, focuses on aligning SAP solutions with today´s business needs especially in the Industrial Machinery and Components Industry. He has over 20 years of experience with software for the discrete manufacturing industry. His main area of focus is manufacturing processes and working will small and medium businesses.

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

Falk Rieker

About Falk Rieker

Falk Rieker, Global Vice President and Global Head of the Banking Business Unit at SAP, is a senior level financial services professional and SAP veteran with over 20 years’ experience. He is responsible for leading the SAP banking solution strategy and connecting bankers with the technology they need to succeed in today´s workplace. As a thought leader in the banking space, Falk frequently speaks at international banking conferences and has been published and quoted in leading industry publications like Forbes, American Banker, IDG and Wall Street and Technology. Follow Falk on Twitter (@FalkRieker), LinkedIn, Youtube, and Instagram.

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

Hu Yoshida

About Hu Yoshida

Hu Yoshida is responsible for defining the technical direction of Hitachi Data Systems. Currently, he leads the company's effort to help customers address data life cycle requirements and resolve compliance, governance and operational risk issues. He was instrumental in evangelizing the unique Hitachi approach to storage virtualization, which leveraged existing storage services within Hitachi Universal Storage Platform® and extended it to externally-attached, heterogeneous storage systems. Yoshida is well-known within the storage industry, and his blog has ranked among the "top 10 most influential" within the storage industry as evaluated by Network World. In October of 2006, Byte and Switch named him one of Storage Networking’s Heaviest Hitters and in 2013 he was named one of the "Ten Most Impactful Tech Leaders" by Information Week.

Industry 4.0: Revolution In Production

Claudia Linke

So far, the world has seen four industrial revolutions: The first industrial revolution was attributed to the first steam engine built by James Watt in 1769.

The second was brought about following the introduction of Henry Ford’s conveyor belt powered mass production in 1913.

The next revolution was the introduction of IT and automation technology.

Today, a new method of production, in which IT is playing a bigger role in the production process than ever before, is turning the industrial world on its head. So much so in fact, that people are already talking about a fourth industrial revolution: They call it Industry 4.0.

In Industry 4.0, “cyber-physical” production systems combine classic production techniques with IT. Machine and product communicate with each other. Thanks to embedded systems, products in the machine’s production process can themselves determine how they should be processed.

Sensors indicate to the “smart product” the current stage of the production process, or which areas need to be improved. Processes govern themselves in a decentralized system. Increased flexibility and productivity is the goal of Industry 4.0.

In the future, tailored components will be able to be produced faster and more cost-effectively in small batch numbers – with automatic, simultaneous replenishment of individual parts, and complete transparency of the company’s order process. In such an industrialized nation as Germany, the issue has got the sector talking, and research into the area is being supported by the federal government.

Research into Industry 4.0

Together with partners from industry and research, SAP Research (the global research organization of SAP) is actively looking into this new type of production.

It is working with companies and organizations such as Siemens and the German Research Center for Artificial Intelligence on Project RES-COM, which looks at how resources can be saved with machine-to-machine communication, and which is sponsored by the Federal Ministry for Education and Research, amongst others.

As part of the project, researchers are looking into the IT platforms of the future that enable a cross-company network of machines, systems, and humans.

Asset Information Management (AIM) is another area that SAP Research is working on. This will allow simpler access to information by compiling data from different sources across the company.

If a service incident occurs on a line, the specialist can form an overview of the problem quickly and easily: Who is operating the line? Which SAP systems and databases are being used? Which production orders are still pending?

Previously, this data had to be retrieved individually by operators, manufacturers, and other individuals. SAP is using the cloud for AIM because it simplifies data integration.

AIM is a vision born out of a collaboration with Endress+Hauser, providers of measuring equipment, services, and solutions for industrial process engineering. Customers of Endress+Hauser are manufacturers and operators of industrial systems such as chemical or even beer filling systems.

These systems are made up of thousands of components such as sensors that measure fill levels, throughput volumes, or pH values. If one of these intelligent components issues a maintenance request or reports a fault, often the information needed to troubleshoot is located in different IT systems for different departments.

With the AIM, this information can be retrieved in fractions of a second and clearly displayed to the maintenance engineer – regardless of the database on which the information is stored. This saves time, costs, and increases line availability.

En Route to a New Standard

Following an announcement by the federal government at the start of the year, 37 projects applied for funding in the area of Industry 4.0. Three were selected – and SAP is involved in two of them.

In the first project, SAP, working with top university RWTH Aachen, wants to make it possible to interpret large data volumes at the production level using the SAP HANA platform in order to optimize live production processes.

The project aims to set production on the right course, and to save resources and, most importantly, time. The second project focuses on the management of employees’ workloads, and is being run in conjunction with the Fraunhofer IAO.

Unlike current processes, where requests for employee availability for extra shifts still tend to be issued in writing during lunch breaks, in the future this will be possible via smartphone. The employee can then decide, for example, whether or not he wants to work four hours extra on a Saturday night.

At the same time, the company can also check whether that employee is actually permitted to work those overtime hours. Similar in structure to a social network, this process should simplify the complicated coordination process, and the data can be entered into systems such as SAP ERP and accessed quickly and easily. Employees can establish and close working time accounts, and the company benefits from more flexible production.

Find out more:

Comments

The Blockchain Solution

By Gil Perez, Tom Raftery, Hans Thalbauer, Dan Wellers, and Fawn Fitter

In 2013, several UK supermarket chains discovered that products they were selling as beef were actually made at least partly—and in some cases, entirely—from horsemeat. The resulting uproar led to a series of product recalls, prompted stricter food testing, and spurred the European food industry to take a closer look at how unlabeled or mislabeled ingredients were finding their way into the food chain.

By 2020, a scandal like this will be eminently preventable.

The separation between bovine and equine will become immutable with Internet of Things (IoT) sensors, which will track the provenance and identity of every animal from stall to store, adding the data to a blockchain that anyone can check but no one can alter.

Food processing companies will be able to use that blockchain to confirm and label the contents of their products accordingly—down to the specific farms and animals represented in every individual package. That level of detail may be too much information for shoppers, but they will at least be able to trust that their meatballs come from the appropriate species.

The Spine of Digitalization

Keeping food safer and more traceable is just the beginning, however. Improvements in the supply chain, which have been incremental for decades despite billions of dollars of technology investments, are about to go exponential. Emerging technologies are converging to transform the supply chain from tactical to strategic, from an easily replicable commodity to a new source of competitive differentiation.

You may already be thinking about how to take advantage of blockchain technology, which makes data and transactions immutable, transparent, and verifiable (see “What Is Blockchain and How Does It Work?”). That will be a powerful tool to boost supply chain speed and efficiency—always a worthy goal, but hardly a disruptive one.

However, if you think of blockchain as the spine of digitalization and technologies such as AI, the IoT, 3D printing, autonomous vehicles, and drones as the limbs, you have a powerful supply chain body that can leapfrog ahead of its competition.

What Is Blockchain and How Does It Work?

Here’s why blockchain technology is critical to transforming the supply chain.

Blockchain is essentially a sequential, distributed ledger of transactions that is constantly updated on a global network of computers. The ownership and history of a transaction is embedded in the blockchain at the transaction’s earliest stages and verified at every subsequent stage.

A blockchain network uses vast amounts of computing power to encrypt the ledger as it’s being written. This makes it possible for every computer in the network to verify the transactions safely and transparently. The more organizations that participate in the ledger, the more complex and secure the encryption becomes, making it increasingly tamperproof.

Why does blockchain matter for the supply chain?

  • It enables the safe exchange of value without a central verifying partner, which makes transactions faster and less expensive.
  • It dramatically simplifies recordkeeping by establishing a single, authoritative view of the truth across all parties.
  • It builds a secure, immutable history and chain of custody as different parties handle the items being shipped, and it updates the relevant documentation.
  • By doing these things, blockchain allows companies to create smart contracts based on programmable business logic, which can execute themselves autonomously and thereby save time and money by reducing friction and intermediaries.

Hints of the Future

In the mid-1990s, when the World Wide Web was in its infancy, we had no idea that the internet would become so large and pervasive, nor that we’d find a way to carry it all in our pockets on small slabs of glass.

But we could tell that it had vast potential.

Today, with the combination of emerging technologies that promise to turbocharge digital transformation, we’re just beginning to see how we might turn the supply chain into a source of competitive advantage (see “What’s the Magic Combination?”).

What’s the Magic Combination?

Those who focus on blockchain in isolation will miss out on a much bigger supply chain opportunity.

Many experts believe emerging technologies will work with blockchain to digitalize the supply chain and create new business models:

  • Blockchain will provide the foundation of automated trust for all parties in the supply chain.
  • The IoT will link objects—from tiny devices to large machines—and generate data about status, locations, and transactions that will be recorded on the blockchain.
  • 3D printing will extend the supply chain to the customer’s doorstep with hyperlocal manufacturing of parts and products with IoT sensors built into the items and/or their packaging. Every manufactured object will be smart, connected, and able to communicate so that it can be tracked and traced as needed.
  • Big Data management tools will process all the information streaming in around the clock from IoT sensors.
  • AI and machine learning will analyze this enormous amount of data to reveal patterns and enable true predictability in every area of the supply chain.

Combining these technologies with powerful analytics tools to predict trends will make lack of visibility into the supply chain a thing of the past. Organizations will be able to examine a single machine across its entire lifecycle and identify areas where they can improve performance and increase return on investment. They’ll be able to follow and monitor every component of a product, from design through delivery and service. They’ll be able to trigger and track automated actions between and among partners and customers to provide customized transactions in real time based on real data.

After decades of talk about markets of one, companies will finally have the power to create them—at scale and profitably.

Amazon, for example, is becoming as much a logistics company as a retailer. Its ordering and delivery systems are so streamlined that its customers can launch and complete a same-day transaction with a push of a single IP-enabled button or a word to its ever-attentive AI device, Alexa. And this level of experimentation and innovation is bubbling up across industries.

Consider manufacturing, where the IoT is transforming automation inside already highly automated factories. Machine-to-machine communication is enabling robots to set up, provision, and unload equipment quickly and accurately with minimal human intervention. Meanwhile, sensors across the factory floor are already capable of gathering such information as how often each machine needs maintenance or how much raw material to order given current production trends.

Once they harvest enough data, businesses will be able to feed it through machine learning algorithms to identify trends that forecast future outcomes. At that point, the supply chain will start to become both automated and predictive. We’ll begin to see business models that include proactively scheduling maintenance, replacing parts just before they’re likely to break, and automatically ordering materials and initiating customer shipments.

Italian train operator Trenitalia, for example, has put IoT sensors on its locomotives and passenger cars and is using analytics and in-memory computing to gauge the health of its trains in real time, according to an article in Computer Weekly. “It is now possible to affordably collect huge amounts of data from hundreds of sensors in a single train, analyse that data in real time and detect problems before they actually happen,” Trenitalia’s CIO Danilo Gismondi told Computer Weekly.

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials.

The project, which is scheduled to be completed in 2018, will change Trenitalia’s business model, allowing it to schedule more trips and make each one more profitable. The railway company will be able to better plan parts inventories and determine which lines are consistently performing poorly and need upgrades. The new system will save €100 million a year, according to ARC Advisory Group.

New business models continue to evolve as 3D printers become more sophisticated and affordable, making it possible to move the end of the supply chain closer to the customer. Companies can design parts and products in materials ranging from carbon fiber to chocolate and then print those items in their warehouse, at a conveniently located third-party vendor, or even on the client’s premises.

In addition to minimizing their shipping expenses and reducing fulfillment time, companies will be able to offer more personalized or customized items affordably in small quantities. For example, clothing retailer Ministry of Supply recently installed a 3D printer at its Boston store that enables it to make an article of clothing to a customer’s specifications in under 90 minutes, according to an article in Forbes.

This kind of highly distributed manufacturing has potential across many industries. It could even create a market for secure manufacturing for highly regulated sectors, allowing a manufacturer to transmit encrypted templates to printers in tightly protected locations, for example.

Meanwhile, organizations are investigating ways of using blockchain technology to authenticate, track and trace, automate, and otherwise manage transactions and interactions, both internally and within their vendor and customer networks. The ability to collect data, record it on the blockchain for immediate verification, and make that trustworthy data available for any application delivers indisputable value in any business context. The supply chain will be no exception.

Blockchain Is the Change Driver

The supply chain is configured as we know it today because it’s impossible to create a contract that accounts for every possible contingency. Consider cross-border financial transfers, which are so complex and must meet so many regulations that they require a tremendous number of intermediaries to plug the gaps: lawyers, accountants, customer service reps, warehouse operators, bankers, and more. By reducing that complexity, blockchain technology makes intermediaries less necessary—a transformation that is revolutionary even when measured only in cost savings.

“If you’re selling 100 items a minute, 24 hours a day, reducing the cost of the supply chain by just $1 per item saves you more than $52.5 million a year,” notes Dirk Lonser, SAP go-to-market leader at DXC Technology, an IT services company. “By replacing manual processes and multiple peer-to-peer connections through fax or e-mail with a single medium where everyone can exchange verified information instantaneously, blockchain will boost profit margins exponentially without raising prices or even increasing individual productivity.”

But the potential for blockchain extends far beyond cost cutting and streamlining, says Irfan Khan, CEO of supply chain management consulting and systems integration firm Bristlecone, a Mahindra Group company. It will give companies ways to differentiate.

“Blockchain will let enterprises more accurately trace faulty parts or products from end users back to factories for recalls,” Khan says. “It will streamline supplier onboarding, contracting, and management by creating an integrated platform that the company’s entire network can access in real time. It will give vendors secure, transparent visibility into inventory 24×7. And at a time when counterfeiting is a real concern in multiple industries, it will make it easy for both retailers and customers to check product authenticity.”

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials. Although the key parts of the process remain the same as in today’s analog supply chain, performing them electronically with blockchain technology shortens each stage from hours or days to seconds while eliminating reams of wasteful paperwork. With goods moving that quickly, companies have ample room for designing new business models around manufacturing, service, and delivery.

Challenges on the Path to Adoption

For all this to work, however, the data on the blockchain must be correct from the beginning. The pills, produce, or parts on the delivery truck need to be the same as the items listed on the manifest at the loading dock. Every use case assumes that the data is accurate—and that will only happen when everything that’s manufactured is smart, connected, and able to self-verify automatically with the help of machine learning tuned to detect errors and potential fraud.

Companies are already seeing the possibilities of applying this bundle of emerging technologies to the supply chain. IDC projects that by 2021, at least 25% of Forbes Global 2000 (G2000) companies will use blockchain services as a foundation for digital trust at scale; 30% of top global manufacturers and retailers will do so by 2020. IDC also predicts that by 2020, up to 10% of pilot and production blockchain-distributed ledgers will incorporate data from IoT sensors.

Despite IDC’s optimism, though, the biggest barrier to adoption is the early stage level of enterprise use cases, particularly around blockchain. Currently, the sole significant enterprise blockchain production system is the virtual currency Bitcoin, which has unfortunately been tainted by its associations with speculation, dubious financial transactions, and the so-called dark web.

The technology is still in a sufficiently early stage that there’s significant uncertainty about its ability to handle the massive amounts of data a global enterprise supply chain generates daily. Never mind that it’s completely unregulated, with no global standard. There’s also a critical global shortage of experts who can explain emerging technologies like blockchain, the IoT, and machine learning to nontechnology industries and educate organizations in how the technologies can improve their supply chain processes. Finally, there is concern about how blockchain’s complex algorithms gobble computing power—and electricity (see “Blockchain Blackouts”).

Blockchain Blackouts

Blockchain is a power glutton. Can technology mediate the issue?

A major concern today is the enormous carbon footprint of the networks creating and solving the algorithmic problems that keep blockchains secure. Although virtual currency enthusiasts claim the problem is overstated, Michael Reed, head of blockchain technology for Intel, has been widely quoted as saying that the energy demands of blockchains are a significant drain on the world’s electricity resources.

Indeed, Wired magazine has estimated that by July 2019, the Bitcoin network alone will require more energy than the entire United States currently uses and that by February 2020 it will use as much electricity as the entire world does today.

Still, computing power is becoming more energy efficient by the day and sticking with paperwork will become too slow, so experts—Intel’s Reed among them—consider this a solvable problem.

“We don’t know yet what the market will adopt. In a decade, it might be status quo or best practice, or it could be the next Betamax, a great technology for which there was no demand,” Lonser says. “Even highly regulated industries that need greater transparency in the entire supply chain are moving fairly slowly.”

Blockchain will require acceptance by a critical mass of companies, governments, and other organizations before it displaces paper documentation. It’s a chicken-and-egg issue: multiple companies need to adopt these technologies at the same time so they can build a blockchain to exchange information, yet getting multiple companies to do anything simultaneously is a challenge. Some early initiatives are already underway, though:

  • A London-based startup called Everledger is using blockchain and IoT technology to track the provenance, ownership, and lifecycles of valuable assets. The company began by tracking diamonds from mine to jewelry using roughly 200 different characteristics, with a goal of stopping both the demand for and the supply of “conflict diamonds”—diamonds mined in war zones and sold to finance insurgencies. It has since expanded to cover wine, artwork, and other high-value items to prevent fraud and verify authenticity.
  • In September 2017, SAP announced the creation of its SAP Leonardo Blockchain Co-Innovation program, a group of 27 enterprise customers interested in co-innovating around blockchain and creating business buy-in. The diverse group of participants includes management and technology services companies Capgemini and Deloitte, cosmetics company Natura Cosméticos S.A., and Moog Inc., a manufacturer of precision motion control systems.
  • Two of Europe’s largest shipping ports—Rotterdam and Antwerp—are working on blockchain projects to streamline interaction with port customers. The Antwerp terminal authority says eliminating paperwork could cut the costs of container transport by as much as 50%.
  • The Chinese online shopping behemoth Alibaba is experimenting with blockchain to verify the authenticity of food products and catch counterfeits before they endanger people’s health and lives.
  • Technology and transportation executives have teamed up to create the Blockchain in Transport Alliance (BiTA), a forum for developing blockchain standards and education for the freight industry.

It’s likely that the first blockchain-based enterprise supply chain use case will emerge in the next year among companies that see it as an opportunity to bolster their legal compliance and improve business processes. Once that happens, expect others to follow.

Customers Will Expect Change

It’s only a matter of time before the supply chain becomes a competitive driver. The question for today’s enterprises is how to prepare for the shift. Customers are going to expect constant, granular visibility into their transactions and faster, more customized service every step of the way. Organizations will need to be ready to meet those expectations.

If organizations have manual business processes that could never be automated before, now is the time to see if it’s possible. Organizations that have made initial investments in emerging technologies are looking at how their pilot projects are paying off and where they might extend to the supply chain. They are starting to think creatively about how to combine technologies to offer a product, service, or business model not possible before.

A manufacturer will load a self-driving truck with a 3D printer capable of creating a customer’s ordered item en route to delivering it. A vendor will capture the market for a socially responsible product by allowing its customers to track the product’s production and verify that none of its subcontractors use slave labor. And a supermarket chain will win over customers by persuading them that their choice of supermarket is also a choice between being certain of what’s in their food and simply hoping that what’s on the label matches what’s inside.

At that point, a smart supply chain won’t just be a competitive edge. It will become a competitive necessity. D!


About the Authors

Gil Perez is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Tom Raftery is Global Vice President, Futurist, and Internet of Things Evangelist, at SAP.

Hans Thalbauer is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Dan Wellers is Global Lead, Digital Futures, at SAP.

Fawn Fitter is a freelance writer specializing in business and technology.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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Four Retail Technology Trends To Take Off In 2018

Shaily Kumar

Over the past few years, technology has seen a significant shift from cyclical, invention-led spending on point solutions to investments targeting customer-driven, end-to-end value. The next wave of disruption and productivity improvements is here, which means a huge opportunity for digital-focused enterprises – if you are following the right roadmap.

Technology trends have significant potential over the next few years. Establishing a digital platform will not only set the stage for business innovation to provide competitive advantage, but it will also create new business models that will change the way we do business. Technology trends in 2018 will lay the foundation for the maturity of innovative technologies like artificial intelligence and machine learning and will prepare both businesses and shoppers to be ready for their consumption.

Like any other industry, retail is being disrupted. It is no longer enough to simply stock racks with alluring products and wait for customers to rush through the door. Technological innovation is changing the way we shop. Customers can find the lowest price for any product with just a few screen touches. They can read online reviews, have products sent to their home, try them, and return anything they don’t want – all for little or nothing out of pocket. If there are problems, they can use social networks to call out brands that come up short.

Retailers are making their products accessible from websites and mobile applications, with many running effective Internet business operations rather than brick-and-mortar stores. They convey merchandise to the customer’s front entry and are set up with web-based networking media if things turn out badly.

Smart retailers are striving to fulfill changing customer needs and working to guarantee top customer service regardless of how their customer interacts with them.

2017 saw the development of some progressive technology in retail, and 2018 will be another energizing year for the retail industry. Today’s informed customers expect a more engaging shopping experience, with a consistent mix of both online and in-store recommendations. The retail experience is poised to prosper throughout next couple of years – for retailers that are prepared to embrace technology.

Here are four areas of retail technology I predict will take off in 2018:

In-store GPS-driven shopping trolleys

Supermarkets like Tesco and Sainsbury’s now enable their customers to scan and pay for products using a mobile app instead of waiting in a checkout line. The next phase of this involves intelligent shopping trolleys, or grocery store GPS: Customers use a touch screen to load shopping lists, and the system helps them find the items in the store. Customers can then check off and pay for items as they go, directly on-screen. These shopping trolleys will make their way into stores around the last quarter of 2018.

Electronic rack edge names

Electronic rack edge names are not yet broadly utilized, but this could change in 2018 as more retailers adopt this technology. Currently, retail workers must physically select and update printed labels to reflect changes in price, promotions, etc. This technology makes the process more efficient by handling such changes electronically.

Reference point technology

Despite the fact that it’s been around since 2013, reference point technology hasn’t yet been utilized to its fullest potential. In the last few years, however, it’s started to pick up in industries like retail. It’s now being used by a few retailers for area-based promotions.

Some interesting uses I’ve observed: Retailers can send messages to customers when they’re nearby a store location, and in-store mannequins can offer information about the clothing and accessories they’re wearing. I anticipate that this innovation will take off throughout 2018 and into 2019.

Machine intelligence

The technological innovations describe above will also provide retailers with new data streams. These data sources, when merged with existing customer data, online, and ERP data, will lead to new opportunities. Recently Walmart announced it would begin utilizing rack examining robots to help review its stores. The machines will check stock, prices, and even help settle lost inventory. It will also help retailers learn more about changing customer behavior in real time, which will boost engagement.

Clearly, technology and digital transformation in retail have changed the way we live and shop. 2018 will see emerging technologies like machine learning and artificial intelligence using structured and unstructured data to deliver innovation. As technology develops, it will continue to transform and enhance the retail experience.

For more insight on e-commerce, see Cognitive Commerce In The Digital World: Enhancing The Customer Journey.

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Shaily Kumar

About Shaily Kumar

Shailendra has been on a quest to help organisations make money out of data and has generated an incremental value of over one billion dollars through analytics and cognitive processes. With a global experience of more than two decades, Shailendra has worked with a myriad of Corporations, Consulting Services and Software Companies in various industries like Retail, Telecommunications, Financial Services and Travel - to help them realise incremental value hidden in zettabytes of data. He has published multiple articles in international journals about Analytics and Cognitive Solutions; and recently published “Making Money out of Data” which showcases five business stories from various industries on how successful companies make millions of dollars in incremental value using analytics. Prior to joining SAP, Shailendra was Partner / Analytics & Cognitive Leader, Asia at IBM where he drove the cognitive business across Asia. Before joining IBM, he was the Managing Director and Analytics Lead at Accenture delivering value to its clients across Australia and New Zealand. Coming from the industry, Shailendra held key Executive positions driving analytics at Woolworths and Coles in the past.