SAP Industry 4.0: Intelligent Products

Intelligent Products take many forms and are tough to define. A custom t-shirt in colours chosen by a consumer and shipped to their door is an Intelligent Product. So is an industrial machining unit using sensors and IoT to collect data and inform operators of maintenance issues or how processes could be more efficient. A mobile device is both of these things: aesthetically distinct and operationally customised by the user. The only truly consistent characteristic is that demand is growing, and manufacturers unable to adapt and deliver will fall behind the curve. 

Intelligent Products is one of the four pillars of SAP’s Industry 4.0 initiative, alongside Intelligent Factories, Intelligent Assets and Empowered People. Keith Zobott, Global Vice President of Digital Products and Projects, describes Intelligent Products as “very complex devices, whether they're aircraft or machinery, but with some common threads in all of them”.

Here he explores how both consumers and enterprises stand to benefit from the wider adoption of these connected and customised smart products, from greater customer satisfaction, to cost savings and fundamental improvements in the way businesses design, manufacture and deliver.

Custom products for the connected customer

Keith Zobott, Global Vice President of Digital Products and Projects at SAP explores the fundamentals of Intelligent Products, and the benefits for both consumers and manufacturers 

You’ve probably used an Intelligent Product, whether you realised it or not. Cars which use sensors to remind drivers to refuel, or cameras to assist their parking, are Intelligent Products. 

The custom case protecting your mobile device is an intelligent product, too. They all share fundamental characteristics, including the ability to adapt to their environment or how they're being used, the ability to minimise maintenance costs, or maximise performance, and the ability to be personalised by customers. But the concept is far reaching and can broadly be divided into two categories: aesthetic customisation and performance optimisation.

“At SAP we’re tackling both of those things,” says Keith Zobott, Global Vice President of Digital Products and Projects at SAP. Zobott uses a pair of exercise shoes as an example of how a product can be both, simultaneously. A runner may buy a pair of smart shoes to help improve their performance. The footwear can track their movements, distance travelled, the locations they visited and other common data points that wearables on the market can already measure. But they can also pinpoint specifics such as foot positioning while taking a stride, or which part of the foot is taking most of the pressure.

On the other side of the equation, a consumer may simply want a shoe that looks great. “We know that consumers now expect every product they buy to be delivered their way: in their colours and with their chosen combination of capabilities,” Zobott explains. “So SAP is building an ecosystem that allows manufacturers to provide products that are unique to consumer needs, but in a way that is quick and efficient.” 

Intelligent Products in business

The positives Intelligent Products bring to end users are obvious, but manufacturers also stand to reap their own benefits as they gain traction. 

“We already see the need for Intelligent Products in a lot of machinery today, whether it's industrial machinery, or aircraft and automotive machinery,” says Zobott. “I would say that’s rooted in the fact that OEMs want to reduce the total cost of ownership of this equipment. And manufacturers can take advantage of this flexibility to optimise both the non-recurring costs related to the cost of developing an asset or a product, as well as the recurring costs that are built into a product. 

“Others are benefiting by leveraging a product platforming strategy, which enables them to drive reuse significantly within their particular product families,” Zobott adds. “We're gathering all this really interesting data, but if we don't find a way to reconstitute that data in an efficient way in the next design, what good is it? These are just some of the ways it adds value.” 

Once implemented, the model perpetuates a cycle of self improvement. “Every process, every tool, and every set of data feeds back at every stage to continually learn and improve,” Zobott continues. “So businesses can understand more about the engineering assumptions that were made early in the design process, and either validate or invalidate them.

“From a business standpoint, what we're really talking about here is the future of changing the whole experience, instead of just changing the product or service you're selling. The most expensive things for an airline operator, for example, are delays and cancellations. So there is tremendous value in reducing those by just a fraction through gaining more insights into the performance of an engine or any aircraft system. Using this data, you can maybe tweak maintenance intervals to avoid any unwanted delays and cancellations. The benefits to customer satisfaction and other costs can be dramatic.”

The key is getting started 

A digital transformation journey of this magnitude can rapidly become “overwhelming”, Zobott admits. The initial and most common hurdle to overcome is often organisational: how siloed a company’s departments are and how much data they share, from procurement and supply chain, to engineering and manufacturing. 

The COVID-19 pandemic exasperated this issue. Organisations that were once only partially disconnected have become more fragmented and siloed. “It really validated the need for improved collaboration capabilities, to be more connected and have resilient processes,” Zobott says. “Many companies are now looking at Intelligent Products and how SAP can help them reach their business goals. They are especially interested in our digital thread concept. That’s not simply connecting the dots, but connecting processes and actually breaking down those organisational barriers so that businesses can begin to get visibility upstream and downstream in these processes. That's a key part of our design operation strategy.”

Here SAP is leveraging its vast wealth of expertise, data and integrated platforms to guide businesses of all sizes through their digital transformation. “These are expensive investments, they are hard projects to successfully accomplish, and they can take anywhere from 18 months to five years depending on how comprehensive they are. At SAP we’re delivering packages that allow customers to access rapid start capabilities. That can be in product lifecycle costing, or maybe in manufacturing through digital manufacturing cloud. We’re creating those on-ramps to make it easy for our customer to try out these capabilities and see if it works for them, and then build on it. The key thing is getting started.”