Crossing the Chasm to Accelerate Industrial Transformation

How do you ensure you’re providing your customers products they actually want, how and when they want them? And how do you do it faster than your competition and in a sustainable and profitable way?

These are the questions that CEOs as well as heads of Research & Development and Engineering ask every day.

A recent report by IndustryWeek and Machine Design clearly demonstrates that the most successful companies break down silos, both across departmental and company boundaries. They do this to innovate consistently, design higher-quality products through collaboration, and streamline processes to bring them to market faster.

Bridging the Gap Between Engineering and Supply Chain

When asked about the biggest limits to performance for engineering teams, “silos within the company” was the top pain point. In fact, the process to “hand over to manufacturing” was deemed the most desirable feature that the respondents looked for in a product lifecycle management (PLM) solution.

But it is not simply a case of improving the handover to manufacturing. In his book Product Lifecycle Management: 21st Century Paradigm for Product Realization, author John Stark writes, “On average, 80 percent of a product’s cost is defined during development even though more than 80 percent of its life is beyond the factory gate.”

Improving collaboration across the end-to-end supply chain — from design through manufacturing and logistics, and during the operation of the product by customers — can have huge business value.

Innovation Starts by Knowing What to Innovate

The demand to innovate consistently and design higher-quality products and bring them to market faster is a constant in competitive industries.

To do this well requires information from across the supply chain.

  • Manufacturing can tell you the quality of the designed products and the performance of the equipment manufacturing it.
  • Supply chain can identify problems with supplying certain materials or using certain partners from availability, sustainability, and capability perspectives.
  • Smart products and assets can share information about how products perform when used by customers. How are they being used and for how long? Are they operating in a sustainable way with regard to emissions? When will they break down? Which parts or components wear down earlier than expected?
  • Customer input can come from many sources. Capturing the voice of the customer means capturing data both structured (orders, forecasts, and customer service information) and unstructured (sentiment analysis, social media, and market research).

Digital Thread to Digital Transformation

In a digital age, the key to innovation is information. To capture real-time, accurate information across a product’s life cycle requires a digital thread from design to decommission, including information such as:

  • How it was designed
  • How it should have been and was manufactured
  • How it was used
  • When it needs maintenance
  • How often it was maintained
  • What the customer thought of the product and how they would improve on it

This digital thread must be leveraged by all constituents, from the customer to the purchasing team to the maintenance team and back to the engineering team to use the insight to identify improvements to designs as well as create new features and even entirely new innovations.

It Takes Collaboration and Integration

Enabling this digital thread between engineering and business takes more than collaboration between teams. It requires end-to-end integration of business processes and the systems involved.

Far too often, companies have been left to their own devices when it comes to connecting engineering systems with business systems. Some managed it with a lot of manual effort in re-entering data in both systems. This “biological integration” is often cited as the number one source of errors. Many companies built their own point-to-point integrations. Typically, these highly customized integrations have limited capabilities, are difficult and costly to maintain, and do not include feedback loops. And then there are companies that chose the integration tool from either an enterprise resource planning (ERP) software vendor, a PLM software vendor, or a systems integrator. Again, due to restricted and limited openness, these solutions were not perfect but probably the best thing available at the time.

Dream Team to Accelerate Innovation, Collaboration, and Transformation

SAP and Siemens have announced a partnership to combine their expertise in product life cycle, supply chain, service, and asset management to deliver new innovations, drive business models that remove silos, and accelerate industrial transformation.

Customers will be able to form a true digital thread integrating all virtual models and simulations of a product or asset with real-time business information, feedback, and performance data over the entire life cycle, from design to decommission. The result: real-time innovation in an ever-changing market landscape to:

  • Bring products to market to faster by collapsing supply and development times
  • Curate customer sentiment for new product design
  • Leverage sensor data to improve design and maximize performance
  • Create a more ethically- and environmentally-conscious product development cycle

To learn more about the partnership, read the news: “Siemens and SAP Join Forces to Accelerate Industrial Transformation.”


Richard Howells is vice president of Thought Leadership and Awareness for SAP Digital Supply Chain.