What will manufacturing processes of the future look like, and what will be their defining features?

At Hannover Messe 2014, SAP teamed up with partners to showcase the future of industrial production. Here we present two tangible examples of Industry 4.0, and discuss its advantages for companies.

Full Integration of Manufacturing and IT

Industrial production requirements are changing. There is an increasing demand for products that match customer expectations precisely. At the same time, companies face growing pressure to manufacture at ever more competitive prices. To adapt to these new conditions, the fields of systems engineering, production IT, and business systems will need to fuse to a higher degree than ever before, creating new means of production in the process. The following two application examples provide insight into Industry 4.0.

“The Parts Know What They Are”

The Open Integrated Factory Showcase impressively demonstrates the integration of manufacturing and IT. What makes this smart assembly line of just 8.60m length special are its work pieces: They “tell” the machine how they should be processed. Not only is it capable of producing two completely different products (a remote control, or components for smart meters): One of the two can actually be built in up to 16 variations. SAP product development and the SAP Co-Innovation Lab developed this scenario as part of a co-innovation project with customers Festo Didactic and Elster Kromschröder, which together provided all systems technology. The scenario demonstrates that this production line can be run using SAP software.

The work pieces contain information in the form of production parameters. “The parts know what they are and can communicate with the facility through RFID technology. After approaching the correct station, they tell it which part and variant they are, and request to be processed with the appropriate method,” says Martina Weidner, solution sales executive for SAP manufacturing and logistics. Through the use of defined standards, product variations can be manufactured in any given order and quantity, all on the same production line. This finally makes lot size 1, the production of a single product with exact customer-defined specifications, a realistic endeavor.

Seamless Integration Through Modern Technology

The Open Integrated Factory combines cutting-edge systems technology with an SAP cloud-powered order management and production control system. Order management is handled by SAP ERP, while production control and ERP integration are run by SAP Manufacturing Execution and SAP Manufacturing Integration and Intelligence (SAP MII). SAP Plant Connectivity is responsible for systems control, and OPC-UA serves as the communication protocol.

Seamless vertical integration of these systems eliminates the need for line controllers, at the same ensuring high flexibility with regard to order changes, variant combinations, and process modifications. The Open Integrated Factory demonstrates that SAP Manufacturing Execution  enables a fully integrated end-to-end data stream, from customer orders within the SAP ERP system, all the way to parameter transfer in systems control. All of this bidirectional data exchange between systems control and SAP Manufacturing Execution occurs within milliseconds.

Factory of the Future: Faster, Cheaper, More Effective

The Open Integrated Factory’s assembly line comprises the following work stations: Initialization station, component depot, oven, drill, assembly robot, Q-gate camera, rework station, and packaging station. Excluding the final two stations, all modules are fully automated.

The work stations query SAP MES for parameters. SAP MES provides parameters including material number, order number, and a unique variant ID for the next product in the line. From the moment that this data is permanently written onto the RFID chip on board the work piece carrier, the work piece “knows” what it is. This unique tag identifies the work piece at each work station, and the permanent communication aspect ensures proper forwarding of information. If the camera-check detects a mistake in the production of one of the variants, the part is transported to the rework station. Here, factory employees can transmit data to SAP Manufacturing Execution using a touchscreen, or remove the work piece from the production line altogether.


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Industry 4.0 is characterized by the fusion of automation and digitalization, resulting in more efficient production methods. These come with a whole range of advantages and opportunities for industrial manufacturing: While costs are reduced through the elimination of line controllers, autonomous production methods also increase efficiency along the entire production chain. Software integration allows companies to analyze masses of data in real time, and generate comprehensive reports on production status and energy consumption. This means that resources can be redistributed immediately if necessary, again saving costs. It also means that production is more flexible because systems, as well as communication pathways and contents, are configurable, making it possible to modify production sequences at short notice. All this allows customized, highly configurable products to be produced at costs comparable to those of mass manufacture, a key competitive factor in the manufacturing industry of tomorrow.

A Hands-On Machine Cloud

Smart service, a progressive new way to service and maintenance of machines, is another new and much discussed buzzword. In a second example for Industry 4.0, the Harting Showcase uses a pump scenario to demonstrate a smart service and maintenance system in action. The Harting-developed pump unit interfaces with SAP software, enabling early prognosis of system errors. This scenario is a good illustration of the initial impact the Internet of Things (IoT) is having on real-world manufacturing processes.

Technicians usually service machines, plants, and other assets at regular intervals, or when problems arise. Unexpected problems or complete machine downtimes result in production delays and high service effort, creating immense costs. What are advantages of being able to predict when a machine will fail? The pump unit showcases complete vertical integration, from data measured at machine level, all the way up into the machine cloud, which is integrated with service processes residing in back-end systems. SAP HANA Cloud analyzes this abundance of data in real time. The IoT platform sends sensor data into the cloud. What’s new is that when critical values are reached, an actual service or maintenance order is created. Such a highly integrated system reduces both the amount of unexpected machine downtimes and maintenance costs.

Through these examples, SAP is showcasing the potential of Industry 4.0 and the IoT, once again affirming its role as an industry leader in future technologies. “The Internet of Things is the current major trend, and will be the future growth driver for SAP,” confirms Thomas Kaiser, senior vice president in the areas of IoT, Industry 4.0, and mobile products at SAP. The ability to produce small, highly customized lots as cheaply as large lots, once a dream of the production industry, is now just around the corner.

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