SAP Industry 4.Now: a mission to drive Industry 4.0 adoption

Mike Wade’s career in the supply chain industry began “rather by accident” he reflects. “I started in air freight and logistics, so that’s how I got into the big world of supply chain. Then I was a manager and the Regional General Manager for a third-party logistics business in the UK. I then changed direction slightly and moved into a UK headquartered global Retail organisation (The Body Shop International) as a distribution manager. This exposed me at that point to the combination of distribution management, supply chain planning, supply chain execution, and manufacturing. In 1998, I then made what felt like a radical change and moved into a supply chain technology business.” 

Today, Wade is the Head of Digital Supply Chain in South Europe, Middle East & Africa at SAP Digital Supply Chain (DSC), where he still finds his varied experience in the sector very helpful when talking with customers “because I have empathy with them in operations, running their businesses”. 

"When I look back, I can recall some of the experiences I had running those supply chain organisations or supply chain operations,” he continues. “I've been in this role for three and a half years, but I have been with SAP nine. It's a great time to be in the world of supply chain. The focus is higher now than it ever has been, and the good news, even in this world that's accelerating and adopting new innovation, is that there is still absolutely - and probably more than ever - a need to focus on the supply chain. So it's a good place to be.”

With the increased focus on the supply chain industry experienced over the last eight to nine months, Wade comments that “supply chains have been a focus like never before, we felt the impact of that in the early days of COVID.” When supply sources were put under pressure at the outset, Wade reflects on his discussions with others in the industry, whose demand profile changed massively seeing huge increases. “I've talked to multiple CEOs, and I've talked to some who have been given by their chairman or board open cheques to secure the supply source for their business. On the other hand, I talked to customers who were told to close their doors for three months during the peak of COVID - their business was closed. We see both ends of the scale. And what this has really focused on is resilience. Resiliency in supply chain operations and supply chain planning is critical.”

With resiliency now more than ever being a critical requirement in supply chain operations, Wade explains that “a new lens has focused organisations in a different way, making companies ask the questions: how agile are the systems supporting my supply chain? How reliant are we on outsource manufacturing? I read recently a Bain report that shows how many companies are now considering onshoring versus offshoring when compared to perhaps two or three years ago, and the potential change is incredible.”

However, “trying to balance supply and demand has never been more difficult or challenging,” adds Wade, who has seen online retail accelerate their adoption of digital transformation by many years. “They have pulled forward that transformation because the demand has been so high, and we've seen the pressure that this has put on omnichannel fulfilment operations. So companies, in general, have had to reassess their supply chain planning capabilities to manage and plan their way forward.”

Industry 4.0: innovation and transformation

Being a founding member of the ‘Industry 4.0 Alliance’ established in Germany, “SAP has been at the forefront of industry 4.0 for some time,” comments Wade. The alliance brings together like-minded organisations to drive the agenda and common standards across industry 4.0. “I'm pleased to say that that Alliance is accelerating the nature of industry 4.0, which essentially calls for technology to connect business processes and physical assets,” adds Wade. “SAP is ideally placed to help our customers navigate from the idea to the realisation of value, which can be either at the manufacturing level - so the shop floor level in an organisation - or enterprise-wide, and the focus is to drive competitive advantage.”

Three of the top trends that Wade is currently seeing in the industry when it comes to industry 4.0 are centred around: business performance, personalised products and a combination of product excellence and intelligent products. 

Breaking down each trend in more detail, Wade explains that, “if we look at business performance, the World Economic Forum launched an initiative called the Global Lighthouse Network (GLN). This community of manufactures shows leadership in using Industry 4.0 technologies to transform factories, value chains and business models, for compelling financial and operational returns. Together with McKinsey, they have identified that unprecedented efficiencies are available when adopting industry 4.0 innovation at full scale; the numbers are big, and these companies are showing the way forward for the majority of businesses that are stuck in what is termed ‘pilot purgatory’. 

“Number two, personalised products to meet customer demand. We all know of course - and some of us may have actually tried - the example of Adidas where you can personalise your own shoes to order. However, the consumer then expects that order to be available immediately. They've taken the time to customise their order, to take advantage of personalised products and they want the order immediately. So now you see a link between manufacturing and fulfilment, and the agility that is required there in that link. The third area of focus is product excellence and intelligent products. So as consumers, we expect high quality, and this is putting pressure on creating shorter innovation cycles in design and manufacturing, and all of this, of course, has to be done and to drive the circular economy.” 

With these trends in mind, when it comes to SAP’s capabilities to help organisations transition to Industry 4.0, Wade deep dives into the four key components of the Industry 4.Now strategy. Starting with intelligent products, Wade explains that “this is where SAP provides the bridge between engineering and manufacturing. This handoff has to be seamless and fully connected. It's crucial to ensure that the manufactured product meets - in full - the customer demands. Having a fully connected engineering and manufacturing environment means that a company can, for example, accommodate late-stage changes to an order.” 

The second area that SAP helps its customers in is intelligent assets. “This is the ability to links the physical assets with its digital twin and to share a single common view between the assets operator, the manufacturer, and the service providers that combined with Machine learning, Predictive Algorithms and IoT technology can help drive operational efficiency and improve maintenance activities.”

Number three, intelligent factory - or what we sometimes refer to as the smart factory - is an agile and adaptable factory environment, which is also elastic, and if we think about what's happened during these times of COVID, manufacturing has had to be flexible and elastic and pivot to produce new products to deal with multiple scenarios. This type of factory is fully connected and uses real-time data to drive performance and link manufacturing and logistics together to ensure that the customer demands are met,” adds Wade.

The final area which SAP helps its customers to develop is the human aspect “Empowered people”. “People have often asked: the adoption of industry 4.0, what does it mean for me? What does it mean for my people?” Wade says. “The great news about industry 4.0 is that as we deploy those technologies, we move the people to a more empowered environment by adopting AI, artificial intelligence, and connecting all the assets involved in manufacturing. The demand from the customer allows people to focus on real value. When intelligence systems give people the data to make informed decisions, the human aspect is further enhanced,” says Wade.

SAP customers harnessing its industry 4.0 solutions

De’Longhi Group

Headquartered in Italy, De’Longhi is “a very well-known and famous householder appliance manufacturer,” comments Wade. “De’Longhi has adopted industry 4.0 technologies from SAP in their manufacturing operation using IoT technologies and connecting all of their manufacturing assets.” 

In providing its services to De’Longhi, Wade explains that as a result, De’Longhi has reduced its order to dispatch time. “This is a critical customer service metric and also a very important metric for most manufacturing vice-presidents,” comments Wade, who adds that SAP’s services have “also helped De’Longhi implement new production lines, in rapid time. I've talked about the ability of manufacturers to pivot during the times that we're in. This is important because they may want to pivot into new areas as we move forward.”

Faurecia 

“Faurecia is one of the world's largest automotive suppliers,” comments Wade, who details that the company is using SAP’s manufacturing solutions to connect all of its manufacturing lines and production machines to deliver innovation inside the operations. This, in turn, delivers innovation to its automotive customers. 

Summarising SAP’s role in customer journeys, Wade reflects that “here at SAP, we can help companies translate their vision into reality. It's our job. We can help move companies beyond what I referred to earlier as “pilot purgatory” into full-scale adoption of Industry 4.0 - or as we say here in SAP Industry 4.Now - because the time is NOW. We have an Industry 4.Now team, which is a worldwide team operating across our regions where we can bring them alongside customers to translate vision into reality.”

Whilst Wade states that he may be slightly biased, he believes there are many reasons why SAP is different from the competition, the first being that “SAP Digital Supply Chain has the broadest process and solution coverage in the industry, from Design to Operate. We also cover the fully connected digital supply chain. In fact, the digital supply chain is, by definition, fully connected. It has to be, and the analysts rank us as number one in the market. So this is all very good, but actually, I think, more importantly, it's the people that make us different. We are, of course, confident in the SAP solution capability, but unless we can translate customer demands, customer needs and customer strategy into a solution vision, then it's meaningless. We have deep subject matter experts that allow us to do this. So for me, it's the combination of SAP the company, the digital supply chain solutions and the people that make us different to our competitors and enables us to deliver real value for our customers.”

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