SAP Stakes Claim in New OEM Business Model

Dec. 26, 2018
The transfer of sensor data to the cloud is opening up new business model opportunities for OEMs. From the offer of new maintenance services to different payment options, SAP looks to help OEMs leverage these new models through easier development of support apps.

Two distinct forces—one business oriented and one technology oriented—have been coming together over the past few years in way that could change the industrial OEM business model and manufacturing capex processes. The business factor I’m referencing is the ever-shrinking number of onsite engineers in industrial facilities who are able to troubleshoot, diagnose, maintain and repair equipment. The technology factor is remote asset management.

The technology factor is poised to alleviate manufacturers’ shortage of onsite expertise by delivering the OEM’s expertise remotely. Using remote asset management technology to link to equipment in the field, OEMs can do much of the equipment troubleshooting, diagnoses, maintenance and repair from anywhere in the world by working directly with shop floor personnel. Physical travel to the equipment site by OEMs can be drastically reduced and, in many cases, eliminated with remote management technologies.

Though not yet widely adopted by OEMs, a new business model—in which the OEM is responsible for day-to-day equipment operation, while the manufacturer pays a recurring fee for guaranteed uptime—is becoming increasingly attractive to manufacturers. So much so that many remote asset technology providers I have spoken with recently have repeatedly told me that equipment end users are coming to them to help push the issue with their OEMs.

In response to this developing trend, SAP is positioning itself as a remote asset management technology provider for OEMs. It is doing so by providing three key technologies—the SAP Cloud Platform, Asset Intelligence Network and IoT Application Enablement Toolkit. While this approach of delivering sensor data to the cloud for use by apps is not unusual in the Internet of Things (IoT) world, SAP is approaching the concept a bit differently by putting the digital twin at the center of the process.

During the SPS/IPC/Drives event in November 2018, Armin Pühringer, industry value advisor at SAP Deutschland, told me that SAP is leveraging the digital twin in this process to ensure the consistency of equipment model data across platforms. He said that SAP has spent the last two years developing the implementation of this technology with Index-Werke—an OEM of CNC turning machines that participated in the SAP display at SPS—as well as other OEMs. “From data ownership discussions, to data security, to which location master data is retrieved from, and how to involve equipment suppliers, the key point to our work with OEMs is that it is focused on improving overall operation of the plant in which the equipment resides,” he said.

With data stored in the SAP Cloud Platform, which can contain time series, status and sensor data from equipment, OEMs can use SAP’s IoT Application Enablement Toolkit to develop apps connected to the SAP Asset Intelligence Network to maintain an up-to-date overview of equipment via its digital twin. The digital twin includes information about equipment hierarchy, documentation and maintenance instructions, as well as near real time operating data, allowing the OEM to continuously monitor the condition and performance of machinery.

SAP says that by providing OEMs with the ability to more easily create apps to coordinate machines and business processes using a centralized digital twin, it enables OEMs to extend their business model to become more service oriented, create new sources of revenue and ensure higher levels of customer loyalty.

Some of the apps that can be created using SAP’s IoT Application Enablement Toolkit include:

  • A service portal for self-service ticketing, spare parts identification and ordering, and remote service support;
  • A service management app to deliver notifications, information about resource planning, field service, e-signatures and invoices;
  • A machine cockpit app for fault management and equipment hierarchy; and
  • Maintenance apps for condition monitoring, predictive maintenance and impact analysis.

Of course, the critical element to using a digital twin for remote asset management is sensor data. Pühringer said “OEMs will need live sensor data to do this as part of a digitalization strategy to create new business models with software applications supporting the use of their products in the field.”

One method for transferring such data to the cloud for use by the SAP Asset Intelligence Network is Hilscher’s netIOT Edge Gateway, a technology spotlighted by SAP at the SPS event. Leveraging the IO-Link Master technology, this gateway connects existing equipment to the Internet to deliver sensor data to the SAP Cloud Platform.

Pühringer stressed that SAP’s digital twin vision for remote equipment management holds benefits for both machine and device manufacturers. “They can use this technology to improve the performance of assets in the field and get feedback for their continuing product development,” he said. “It can provide a closed loop from product development to sales by providing a better understanding of equipment use—all of which can then be fed back into product development. Our role is to provide the infrastructure to OEMs and plant operators so they can do this.”

Pühringer noted that SAP is working with OEMs in both the discrete and process industries with the SAP IoT Application Enablement Toolkit. As examples of this, he cited work with both Endress+Hauser and Pepperl+Fuchs, two companies using this technology to support the instrumentation devices they offer.

The work being done by technology suppliers like Endress+Hauser in this area highlights the path forward for OEMs of all types. For example, using the SAP IoT Application Enablement Toolkit, Endress+Hauser has developed its own Asset Health Apps. These apps are designed so that maintenance teams can assess whether a device is experiencing excessive wear, if preventative maintenance is required, or if a flowmeter of control valve is about to fail. All of Endress+Hauser’s Asset Health Apps are based on a shared digital twin data model of their instruments. According to Endress+Hauser, using this unified semantic model ensures cross application of digital twin models and controls access to data with a role- and instance-based authorization system. The company says having this information securely unified in a digital twin makes it possible to compare evaluations of numerous production facilities to form a foundation for device maintenance and repair requirements based on sensor data.

Pühringer added that the IoT Application Enablement toolkit architecture ensures that the equipment operator authorizes individual applications to access process data during operation. Complete master data on equipment and a uniform semantic model are shared between the manufacturing facility operator and the field device manufacturer via the SAP Asset Intelligence Network.

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