A discussion recorded live at SCM 2014 in Las Vegas featuring PLM keynote presenter Thomas Ohnemus of SAP.
Lauren: Hi, I’m Lauren Bonneau, with SAPinsider, I’m here at the SCM 2014 event, and I’m sitting down with Thomas Ohnemus, VP, solution marketing, Idea to Performance, for SAP. Hi Thomas, thanks for joining me!
Thomas: Great, I’m happy to be here!
Lauren: Great! So my first question is for you to kind of explain your title, it kind of sounds new to me, what is this idea to performance, can you explain what that means?
Thomas: Yeah, idea to performance is covering the solution offering for SAP, which we call Idea to Performance, because it covers from having an idea to design a product, manufacture the product, and bring the product as a performing product on the market. So, from an idea, to performance or high-performing products and services on the market. So this is at the end the story of the title, and what it includes, it includes SAP PLM, SAP Manufacturing, SAP Enterprise Asset Management and Sustainability, and Service, so a lot of solutions.
Lauren: Includes a lot of things! Ok, so I’m wondering for, you know, SAP customers, you know, in this space, you know, what, I’m wondering what to expect for 2014, you know, what are some of the challenges that they’re facing that you’re hearing?
Thomas: Yeah, that’s a great question, there are a lot of challenges out there, and I talked yesterday in my keynote on this topic, which I named the “Industrial Revolution.” So there’s a lot going on and a lot of academics around the globe are talking about the Industrial Revolution, which means there are a lot of changes going on in a bigger way, in industry going on right now, which impacts manufacturers, mainly, but at the end the whole value chain, so it’s from, again, idea to performance, so from designing a product, manufacture a product or service a product.
So what are these challenges? The challenges, the changes, are that a lot of technologies that we had over the last decades, become now very performing or even cheap, that all these technologies together give a new hype to manufacturing, or to the manufacturing industry. And these technologies are the Internet, very simple, very simple technology, it is sensor technology, so that sensors in the past were very expensive, got very cheap, so you can put sensors on machines and they record information which gives later on a huge new picture on what the machine is doing right now, you have much more information about the performance time and so on, so it’s a more technology topic, that is going on.
Then a third one is the empowered end consumer, so the end consumer has much, much more information and insights today than in the past, so he can decide very easily on a global basis which product is the best one, he can compare price, quality globally through the Internet, while the end consumer has much more power today in his buying decision than in the past. So, and all of this together, so you get another one, which I have to explain, is product by itself get much more complex than in the past, so an easy example is look into a car ten years ago, or 20 years ago, it was just a car driving you from A to B, and today a car is a technology engine, a combination of a physical car, but electronics, software, all the different components, even connected with the Internet.
Lauren: Yeah, a computer on wheels!
Thomas: Yeah exactly, it’s a computer on wheels. And this, you can imagine, changed a lot for companies who produce this kind of products, because in the past it was quite easy to set up a physical car, and now you have to combine the Internet, electronics, and all that stuff. So there’s a huge change going on, or a lot of pressure going on, to companies by itself. And combine this with the power of the end consumer who compares, for example, the products, cars, and can collect which is the best one, so these companies need to provide very sophisticated products, fast, cheap, high-quality, and available as soon as possible for the end consumer.
So, these are the changes going on in the market, which really change a lot of the manufacturing industry by itself, so they change their business model, how they act. So that’s a lot of things going on.
Lauren: Yeah, sounds like it. So with all of this going on, what, you know, what is some of the specific technology available to these folks to help them with these changes?
Thomas: Oh yeah, that’s … you can imagine if you, if manufacturers face these challenges today, they have, the way that they acted 20 years ago today has completely changed. So they have for example to complete digital descriptions of their products today available which hasn’t 20 years ago, so you have a 3D model of your product, and you link to your product electronic, software, and all the intelligence or test results, a lot of information that describes the complete product, in a digital way. So you have somehow to, say like an electronic avatar of your physical product, so for example, the car example, you have a car, but you have a 3D digital product description available who describes it, so to have this in place you need to change your whole technology to design a product, manufacture a product, service a product, so you need a lot of IT technology to do that, you need systems to describe it visually, you need 3D, you need systems who manage software, electronic, and you have at the end a system which is usually a PLM system, that brings all this together and describes the complete product description from a digital way but also all the components like software and electronics that are part of the product.
So, coming back to your question, what kind of tools are available, they’re, the companies are facing these challenges of having these digital descriptions of the product, so they need at the end IT to help them to do that, so usually SAP PLM, as a PLM solution, helps the company here to describe this product description, then manufacturing helps to leverage this information in the manufacturing process, so that they have the digital description and can easily produce it and have instructions how they assemble it and so on, and later on when it goes down to the service you have again the digital description of this product when the service person is out there and has to service the product, can look on an iPad, for example, and has the digital description of the product and exactly knows what spare parts he has to order and stuff like that. So you need a lot of IT components over the whole value chain to support all these challenges that I mentioned before.
Lauren: Absolutely. And so one piece of technology everyone’s talking about is SAP HANA. So does that play a role?
Thomas: Absolutely, absolutely. Yeah, the description that I just made about the digital products, so you have this digital product description. What is coming on top of that is as I mentioned in the introduction, products get intelligence by themselves, so they have sensors or information where they send information to the owner of the product, for example. For example, if you have a machine, you have a lot of sensors in there, the machine is running somewhere and this machine sends a lot of information to the owner of this machine, to show how the machine is performing; the temperature, fuel, gasoline, or whatever this machine needs, so you get a lot of information, and this information are not coming once a day, they’re coming every second. So you get per machine millions, trillions of gigabytes of information over a day, for example.
So this means you have to manage big data, because this data helps you to understand how this machine is doing and how probably I can service the machine that is constantly running, so they have constant uptime, and is always supporting or producing products. So, managing this big data you need a new technology to do that, and HANA is exactly the right solution to handle this big data, not only handle them but also analyze this data in the way that you can really make predictions what is coming next with this product, so that you know more than the product by itself, so you get information from a product, you analyze them with HANA, then you make recommendations or decisions how you whatever, service the product, that it’s always running and has uptime and has never a break. Unbelievable.
So HANA is the underlying technology for big data but for this whole value chain that I mentioned from PLM manufacturing and service, to collect all information and manage it in an easy and fast way.
Lauren: And the keyword there is 'fast'! So, I guess the last thing I’ll ask is, you know, could you possibly provide a key recommendation for you know, businesses to ensure that they have a fast and smart you know, manufacturing environment?
Thomas: Good question, yes, there … as I said before there is a lot of change going on, I think that the first recommendation from my side is that everyone is looking what’s going on around you and specifically to your customers, what do your customers really need, so be open-minded to what is going on there in the business, because a lot of businesses are changing from producing products to offering services, so a whole transformation is going on there, and to recognize that, you have really to be very close to the end consumer as this is the dominant decision-maker in the future, so listen to your customers, that’s the first thing, look to your business models if you have to change them and adapt them to really serve your end consumers, your customers in the right way. So that’s one thing, which is very important from the business perspective.
Then secondly, what are the tools or technologies that help you in this whole transformation that helps you to be successful also in the future, and SAP here is of course a provider of software which usually tries to look into the future and help our customers, to exactly support them in these challenges of business today.
Lauren: Great, yeah, those are great recommendations, so I can’t think of a more perfect way to end. Thank you so much Thomas, I appreciate it!
Thomas: Thank you!