Using Asset Intelligence To Drive New Business Models

Richard Howells

Part 1 in the “Embedded Analytics” series that explores the many ways that companies across industries are using analytics to support innovation.

Many manufacturers of industrial machines have histories that stretch back for several decades. While tradition is important and valuable, the imperative to innovate is pushing these manufacturers to reinvent themselves for a digital age where customers are in control and always looking for more.

Increasingly, makers of industrial machines are answering the call to innovation by turning physical assets into business assets that enable new revenue-generating “service models.” Here the idea is to design, manufacture, and operate intelligent assets that use intelligent technologies – such as the Internet of Things (IoT), machine learning, and augmented reality – to capture the data needed to drive better business outcomes.

This, in turn, requires a fundamental rethink of business processes – from how machines are designed to how they are operated in a live environment. Smart machines need to be designed with outcomes in mind.

From machinery to a service platform with iXworld

A great example is the INDEX Group, who – with its INDEX and TRAUB brands – is one of the world’s leading manufacturers of CNC turning machines. Headquartered in Esslingen, Germany, this group maintains 80 sites worldwide – including six production plants and international sales and service companies as well as an extensive retailer network.

For most of its 100-year history, INDEX has sold machines, mainly to the automotive industry for engine production. However, with fast market changes in the automotive sector – due largely to the shift to electric mobility – INDEX reimagined its business model. Today, it offers new digital services to its customers – services that are helping to expand its market position in the digital age.

I recently had the chance to speak to Werner Bothe, head of Digitization, INDEX-Werke GmbH & Co. KG, who explained INDEX’s newly established platform www.iXworld.com.

Mr. Bothe told me that iXworld consists of three sections. “iXshop is INDEX’s e-commerce solution and provides the customers a digital one-stop shop for a large range of materials, such as tool holder, accessories, spindle liners, spare parts, clamping devices, and raw materials,” Mr. Bothe explained.

He continued, “iX4.0 is all about the support of the customers to improve their machines’ productivity. The customers can monitor the condition and the performance of their machines. By these monitors, it is possible for the customers to improve the internal processes.

“Finally, iXservices provides the customers a wide range of digital services such as access to knowledge database. This helps our customers train their employees and keep them always up to date.

“All these three sections can be used from a single user interface,” Bothe concluded. “So, for the customer, it is very convenient to use the integrated platform iXworld. It is not necessary to sign in for several platforms.”

Connecting machines and building a network of intelligent assets

Access to parts and knowledge, of course, is only the beginning. INDEX also uses iXworld to deliver higher-end services such as real-time condition monitoring and predictive maintenance.

If the first step is to design and manufacture smarter machines, the next is to connect these intelligent assets to a network and share the information that they generate with INDEX, their customers, and their maintenance technicians. To do this, INDEX uses SAP Asset Intelligence Network.

“The SAP Asset Intelligence Network enables our customers to monitor the condition of INDEX machines and those of partner companies that are connected within the network,” said Mr. Bothe. “In the event of any irregularities, customers receive instant alerts that they can react to immediately. This enables production processes to run smoothly without interruption, also across shifts. Predictive maintenance and smart glasses support them to execute maintenance services efficiently and fast.”

The future

With its iXworld platform attracting approximately 10,000 visitors a month – augmented with a powerful asset intelligence network – INDEX has moved from selling machines to selling services.

Though INDEX has started with easy-to-use service offerings that create an immediate benefit to customers, it’s near to mid-term plan is to “make the platform the standard solution for our industry,” according to Bothe.

Beyond this objective? As Mr. Bothe puts it: “In the future, we plan to offer the ability to rent machines with embedded software rather than buying them.”

With the ability to capture data from smart machines deployed in the field, INDEX thinks it can make “as-a-service” models like this work in a way that delivers value for customers while delivering revenue for the company.

Learn more about SAP Intelligent Asset Management and register for the ARC whitepaper, Intelligent Asset Management improves asset Performance.

Also, don’t miss an opportunity to explore how companies are leveraging data from intelligent (IoT) assets. Attend our IAM Webinar on June 5 at 5:00 p.m. CET / 11:00 a.m. EDT / 8:00 a.m. PDT.


About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.