Disposition, Logistics & IoT

IoT is simple, but huge, because it makes Industry and Logistics 4.0 possible in the first place, because it will revolutionize logistics and distribution. The Internet of Things (IoT) simply means that all relevant objects in the real world will have an IP address.

This makes the objects "visible" on the Internet. You can communicate with them, control and monitor them. It is the ability to communicate without media discontinuity that will trigger a revolution in industry and logistics.

"Society, markets, processes and technology are in a state of flux"

emphasizes Björn Dunkel at the beginning of the interview.

"Industry 4.0 and the Internet of Things will revolutionize the way we all think and act!

If it took years for the last Industry 2.0 and 3.0 revolutions to take hold on a large scale, Industry 4.0 will invade the country in real time. Anyone who misses the boat here will quickly go from big player to biggest loser."

The positive, but also challenging aspect of the digital transformation is the fact that this time everything is networked with everything else. The digital transformation is an intrinsic communication and information process.

The result of logistics, Industry 4.0, IoT and M2M is not more servers, databases and sensors, but more communication, information, knowledge management and big data.

To overcome the "digital tsunami", you need tools, services and an SAP partner like G.I.B.

Industry 4.0

"Industry 4.0 gives us important impetus"

explains G.I.B manager Dunkel.

"We are working intensively on innovative ideas and products that make full use of the new possibilities, we use our findings to provide support for process optimization in companies and we try to take away our customers' fear of the topic by explaining it and highlighting opportunities."

The signs of the times are bimodal: educational work and technology - in other words, knowledge about current and future technology.

"We jumped on this topic very early on. Back in 2011/2012, we built up our expertise in the new Hana technology together with SAP and selected partners.

In 2013 at the DSAG Annual Congress, our customer Trilux was one of the first Hana customers to present our G.I.B Dispo Cockpit Forecast on Hana in a panel session"

Björn Dunkel is proud of what has been achieved so far.

Use & business cases with and without Hana

Technology must not be an end in itself. The focus of existing SAP customers will always be on efficient business processes. SAP provides an important platform for this with NetWeaver and Hana.

The SAP partners develop the business processes together with the users:

"Back in 2011, we created an intelligent and user-specific scheduling process with our Role Administration Cockpit, which enables process- and priority-driven work.

True to the motto: I know who you are and what is most important to you today.

We have put the focus on people and used technology to relieve them"

explains dark business cases that focus on the end user.

Of course, this requires detailed knowledge of the structural and process organization of the respective industry and its customers. Where there is light, there is also shadow - and so it is important to analyze the whole picture.

"In recent years, we have realized that the market and society can hardly keep up with the pace at which technological change, as part of Industry 4.0, is taking place"

says Björn Dunkel.

"That's why we at G.I.B see it as our task to convey the topic in an understandable and continuous manner. We want to be a driver of innovation for our customers and interested parties and accompany them on their journey into the digital future without overwhelming them.

One of our challenges is to drive forward the new technology while at the same time making the old technology available. The majority of our clients are still working in the old SAP world without Hana.

The aim here is to maintain and expand the business benefits of our software in the SCM environment."

Transformation processes

The digital transformation process has only just begun. The SAP community is at the beginning of its journey. It is not yet a question of "left" or "right", on-premise or on-demand, in-memory or cloud computing - what is needed is a prudent consultant who is also familiar with hybrid approaches.

G.I.B is also a Trusted Advisor who, thanks to its tradition and accumulated knowledge, has the foresight to know more than just one way.

Life in the beta phase is the hybrid IT approach in Industry 4.0 and logistics. Hardly any SAP user can still plan from the "green field" today.

Legacy systems are still in operation - and justifiably so. A lot of investment and knowledge has gone into on-premise systems and data centers.

A non-disruptive transformation process is a duty and an obligation. C-Level Management needs a partner like G.I.B to follow the hybrid path: to maintain, stabilize and optimize what has been created - so that resources are freed up for innovations and visions.

One is as safe as the other: Proven SAP systems must continue to run while S/4 Hana can be evaluated with Finance and Logistic.

Production, logistics and scheduling must not stand still. Gartner analysts expect that in a few years' time, every consumer product worth more than 100 US dollars will have an Internet chip built in - the Internet of Things will come without planning or approval.

IoT is beginning to exist, even without our involvement. The community will only be able to master this "digital tsunami" - the digital transformation process - together with the best SAP partners.

Digital Tsunami

Industry 4.0, social media, predictive analytics, the Internet of Things (IoT), in-memory and cloud computing, smart grids, smart factories, M2M (machine-to-machine communication) and much more are the real and operational manifestations of the digital transformation process.

Without digital optimization, topics such as Industry 4.0 are likely to drown in the "digital tsunami". IT users and existing SAP customers are therefore reliant on SAP partners such as G.I.B to prepare their own ERP landscape for the transformation.

It is primarily about knowledge management and knowledge transfer. The digital transformation process is a holistic, business, organizational and technical project.

G.I.B and its partners such as SAP have the know-how. There are already sustainable successes to report, particularly in the areas of Industry 4.0 and IoT.

"Existing SAP customers have already done a lot of things right in the past"

Björn Dunkel is convinced.

"With SAP, they have chosen a partner that provides the technology they need to use and master Industry 4.0 and IoT."

This will enable entrepreneurs to develop completely new business models with the help of new technologies. This is precisely the epochal change that Industry 4.0 brings with it.

"As a partner of SAP, we at G.I.B see it as our task to develop Hana-based solutions for SMEs in the coming months that make the benefits of digitalization, IoT and big data usable in this segment as well.

SMEs must be part of the change, otherwise the big revolution will unfortunately not happen!"

Dunkel is highly motivated for 2016.

There is a lot to do: How are the terms Industry 4.0, IoT and M2M related?

"Industry 4.0 and M2M are indispensable components of the Internet of Things, which means nothing other than that the factors involved in the industrial value creation process are digitized and networked.

Big data should definitely be added, because none of this would be possible without the storage and processing of the gigantic amounts of data generated.

In principle, we are already right in the middle of Industry 4.0: we are networked with every person and every company via smartphones and tablets, we trigger automated business processes and receive machine-generated messages with individual information. Hardware, software and people are inextricably interwoven in the process."

Material flow & logistics

A study by the Fraunhofer Institute on this topic provides a striking example of the possible networking of business processes within Industry 4.0. It describes a vision of the future in which a production order triggered by the customer independently navigates through the value chain.

It automatically reserves all processing steps, equipment and materials. It monitors execution, detects impending delivery delays and organizes any additional capacity required.

If a delivery is nevertheless delayed, the customer is automatically notified. The production systems also communicate with each other in this vision; drawings, maintenance and servicing requirements are exchanged and the order sequence is organized.

"We have all the basic technologies for the fourth industrial revolution in our hands, we just need the courage to finally turn them into products and business models. Even supposedly small innovations can create huge opportunities. The study shows the potential and we must not waste it now"

appeals Professor Michael Hompel from the Fraunhofer Institute for Material Flow and Logistics (IML). His institute director colleague Professor Michael Henke goes one step further:

"German SMEs still tend to be cautious or even reserved when it comes to Industry 4.0. Yet it is of crucial importance for Germany as a business location characterized by SMEs that the country's driving economic force gets involved in this topic - the potential is definitely there."

Companies should take a more active role in the implementation of Industry 4.0 in order not to lose touch. The authors of the study currently see a reluctance on the part of companies because they are not yet aware of the possibilities and are shying away from the new technologies and the necessary know-how.

Internet of Things

Ultimately, these topics have a direct impact on operational business: which areas of industry and trade are primarily affected by IoT?

Björn Dunkel comments on this:

"For the industry, I would say it's very much the suppliers of sensor technology at the moment. In other words, providers of a technology that has been on the market for quite a long time, but which is now being cast in a completely new light.

Whereas previously I had to know what I wanted to measure with the sensors, today we can measure and collect all data and check it for patterns in real time using learning processes. In other words, big data with real-time analytics. So much for the theory.

Unfortunately, the infrastructure, in this case the company network, is often the bottleneck."

Dunkel knows that there are of course a wide range of opportunities in retail. The Internet of Things is driving a variety of new functionalities and innovations. It can be used to develop completely new business models that go far beyond simply selling devices.

"In my opinion, IoT will create a real pull, especially in the consumer segment, because with every tablet, smartphone or iWatch, another 'thing' is networked. And consumers' expectations of the network and its possibilities are increasing almost exponentially"

defines the G.I.B manager.

The German economy expects Industry 4.0 to boost turnover: around half of industrial companies (51%) that use or plan to use Industry 4.0 applications expect turnover to increase as a result. The rest assume that turnover will remain the same.

This is the result of a survey commissioned by the digital association Bitkom. A representative sample of 400 companies with 100 or more employees from the automotive, mechanical engineering, chemical and electrical industries were surveyed.

One in eleven companies (9 percent) even expects Industry 4.0 to lead to a strong increase in turnover of more than ten percent.

"Thanks to IT, companies in networked production, for example, can respond even better to the requirements of their customers and produce highly individualized products exactly according to their wishes. This will permanently change the business models of many industries"

said Bitkom Managing Director Dr. Bernhard Rohleder.

"Those who set the course for Industry 4.0 today will improve their competitive position and have a good chance of gaining market share."

According to the authors of the Fraunhofer study, the vision of a fully digitalized Industry 4.0 company is still a long way off, but the first steps towards implementation can be taken.

Some technologies are already ready for the market. However, they are still too rarely used.

Logistics & Disposition

"Logistics is about real time. It's about intelligence within the supply chain"

knows Björn Dunkel.

"It's all about big data. There is a huge opportunity here for clever solution providers who can make the whole thing manageable."

IoT provides a completely new user experience by imperceptibly supporting the user. Technology is therefore increasingly becoming a silent helper.

"I can now use real-time measurements to control the logistics flows and processes in my supply chain in the way I need to at this very moment in order to stay one step ahead of my customers"

Dunkel knows from his professional experience. The IoT expands the Internet as we know it today to include increasingly intelligent products.

And that is no longer a vision today!

The term Industry 4.0 refers to the fourth industrial revolution driven by the Internet. It describes the technological transformation of today's production technology into an intelligent factory in which machines and products are networked with one another.

62% of companies in the core industrial sectors are already using Industry 4.0 applications or are planning to do so. According to a study conducted by the Fraunhofer Institute for Industrial Engineering IAO on behalf of Bitkom, Industry 4.0 will enable productivity increases totalling around 78 billion euros in six economically important sectors alone by 2025.

In summary:

What is important and more important for the trends of planning, scheduling and value chains: algorithms, mathematics or Hana?

"Mathematics is needed for the development of intelligent and self-learning algorithms"

concludes Björn Dunkel.

"Then you need a technology that supports the connection of the algorithms to the Internet of Things - sensors, networks, etc. You need converters that turn big data into small data.

An ERP system such as S/4 Hana is indispensable for converting everything into business processes in the end. In my view, however, the most important thing is to keep the focus on people, despite an increasingly complex world."