Soccer team in a huddle

From Industry 4.0 to Mobile Payment

Feature Article | April 23, 2014 by Andreas Schmitz

For the last seven years, the International Association for SAP Partners (IA4SP) has been busy representing the interests of some 60 member companies, predominantly from Germany, in the SAP ecosystem. Its current “hot” topics include Industry 4.0 and new business models.

When it comes to discussing Industry 4.0, Thomas Schmischke is in his element. As managing director of IT consulting firm “Return on Concept,” Schmischke leads the Industry 4.0 group of the International Association for SAP Partners, an organization that consolidates and represents the interests of SAP service providers and consulting partners. An industrial engineer by training, Schmischke wants to get to the heart of what Industry 4.0 means for consultants and service providers. The initial challenge here is to wade through the hype and filter out the topics that currently are only of marginal interest from the SAP perspective, such as Work 4.0 (which is concerned with Industry 4.0 from the employees’ perspective), sensor technology, and human-machine interaction. “We want to focus on those Industry 4.0 topics that look likely to offer economic potential for our members and their customers in the very near future,” says Schmischke.

Predictive maintenance

The IA4SP working group agrees: predictive maintenance, smart manufacturing in the paperless factory, the digital product memory, and usage-based billing are the scenarios that are particularly promising in this context. Let’s start with predictive maintenance. Today’s production lines may be equipped with as many as 1,000 sensors. If one part of the production line overheats, the system signals an alert and halts production. “Each sensor may be delivering one or more values every five to ten seconds. In the future, SAP HANA and Big Data technologies will make it possible to analyze this stream of data coming from the sensors in real time and – by comparing current temperature sequences with historic values – to receive a warning that there is a possible danger of overheating before the value that triggers an alert is actually reached. This means that we’ll be able to replace the unexpected and costly process of carrying out emergency maintenance with cheaper, planned repair work,” explains Schmischke.

Industry 4.0: “autopilot” for manufacturing

The next big Industry 4.0 application, says Schmischke, are smart production orders. This vision will become reality when a control center is no longer needed for direct fine-tuning on the factory floor. An autopilot in each production order will decide which machines are deployed. “If the line waiting for machine A is too long, the order will redirect itself to machine B, without any human intervention whatsoever,” says Schmischke. In this scenario, shop papers are transmitted in digital form. A machine recognizes the order ID and downloads the corresponding papers onto a monitor, where they are then visible for production line personnel. This way, nothing can get lost or mixed up, and it is also much easier to make modifications during ongoing operations. Thus, the vision of the economically viable “lot of one” is getting ever closer to becoming reality.

Digital product memory

The next key application from the IA4SP perspective is the digital product memory. Today, when customers take their cars to a repair shop for a service every 6,000 miles, mechanics read the in-car memory log to establish whether a routine service is sufficient or whether the vehicle requires closer inspection. Schmischke envisages this scenario for cheaper everyday products too: For example, a receiver could contain a chip that stores key values from the production process and the usage history, such as the room temperature when the device is switched on. If a customer makes a complaint about the product within the statutory warranty period, the stored values would make it much easier for service technicians to discover the root of the problem.

And, last but not least: usage-based billing. If a company leases a machine, but temporarily only operates it at 30% capacity, this under-utilization could be automatically transmitted via the Internet to the leasing company, which could in turn reduce the leasing rate for the month in question. Once the machine starts running at full capacity again, the leasing charge could be returned to the higher rate. “This way, fixed costs become variable,” explains Schmischke.

IA4SP: objectives of the working groups

By focusing on these aspects, the IA4SP’s Industry 4.0 working group is aiming to act as a “point of contact for customers who are looking for suitable service providers for, say, a pilot project, and for service providers who wish to supplement their expertise or who need partners for an upcoming project,” says Schmischke.

The IA4SP working groups have three specific aims:

  1. Mutual education: By interacting with “sparring partners” that are working on similar topics, the groups can more easily clarify what expertise is required to approach a topic and what the criteria are for delving deeper into it.
  2. Collaborative business: Development partnerships make it easier to follow a joint approach and to come up with viable solutions faster.
  3. Neutral point of access for customers: The learning curve within the working groups can be passed on to customers who are also addressing the question of how to approach a topic.  Moreover, workshops organized by the IA4SP create a 360-degree view of the topic.

“We are to our partners’ interests what the German-Speaking SAP User Group, the DSAG, is to customers’ interests,” explains Axel Mattern, who became chairperson of the IA4SP in mid 2013 and who expects his association’s membership to grow to at least 100 by the end of 2014.  It is no coincidence that Mattern has taken the helm at the IA4SP. As an SAP alliance manager at SAP service provider arvato Systems GmbH, he works for one of SAP’s “master value added resellers” (MVARs), which enjoy a special status among SAP’s partners. Which makes membership of the IA4SP particularly interesting for smaller SAP consulting firms as a way of getting into direct contact with the licensors of the SAP world via the working and topic groups.

Industry 4.0 is only one of several topics that are under investigation in the working groups.  Fred Kroll, who is head of sales at IT service provider SMF in Dortmund, Germany, for instance, is part of the working group on new business models. His special topic is mobile payment, and he advocates the use of QR codes to pay for goods in department stores. In this payment method, a customer who approaches the point of sale to pay for goods needs neither a card nor cash. Instead, the customer simply scans a QR code into his or her smartphone and the online payment service PayPal then debits the corresponding amount from the customer’s account. Payment via QR code is already possible at German shoe retailer Deichmann and computer store Cyberport.

Mobile payment: discussing new business models

The group’s aim is to raise awareness for the possibilities of this emerging idea in other industries and to find the simplest possible solution for payment via smartphone. And the idea is likely to receive a positive response in Slovenia, where, if you are eligible for an input tax deduction, you are not allowed to pay in cash for goods costing more than €400. “Considering that many Slovenians do not have a cash or credit card, the QR code option would be a welcome one,” says Kroll, who is hopeful of acquiring initial QR payment pilot projects in the gas station sector in 2014. After all, gas stations were the pioneers of credit card payment back in the days when it was a new technology.

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