Düsseldorf, Munich Whether for the development of new business models or the determination of CO2 emissions: data has become a central raw material for mechanical engineering. A new project should help the entire industry to make business processes transparent.
A consortium of SAP and German machine builders is developing a cloud platform for the manufacturing industry, according to Handelsblatt information. According to information from participants, this should facilitate the exchange of data. The model is the Catena-X alliance, in which companies in the automotive industry have joined forces. This can be seen from the name: Manufacturing-X.
“The platform is still under development at the moment, but we are making good progress,” DMG Mori CEO Christian Thönes told Handelsblatt. As a technology leader in mechanical engineering, we feel it is our responsibility to contribute to this. SAP said it was in talks with the Federal Ministry of Economics and other companies. Laser technology manufacturer Trumpf is also participating.
However, many details are still open. For example, according to information from participants, the consortium is negotiating with the federal government for state funding. Catena-X receives 105 million euros from the state, which corresponds to 45 percent of the budget. There are also discussions with possible other participants. According to estimates from industry circles, Siemens could join in this way.
The digitalization of the supply chain concerns practically the entire economy. In the coming years, companies will have to create transparency due to legal requirements in order to prevent violations of human rights and to determine emissions during production, for example.
“The necessary data is in different companies and systems – it is important to bring them together,” says Bettina Tratz-Ryan, analyst at Gartner. However, the exchange of data is not trivial. “It’s not about Euro pallets, but the composition of complex products.“ In other words, the Manufacturing X consortium has a lot of work ahead of it.
Indispensable “Industry 4.0”
The use of data has become a key capability for machine builders and factory equipment suppliers in recent years – “Industry 4.0” is the buzzword. Companies network production and logistics, use algorithms for the predictive maintenance of machines and rent products “as a service”, i.e. to the minute. Industry giants such as Bosch and Siemens have even made software and artificial intelligence their core business.
91 Percent of German industrial companies describe Industry 4.0 as “indispensable” in order to be able to survive in international competition, as the IT industry association Bitkom surveyed in the spring.
There is potential in reducing emissions in particular, with 81 percent expecting a contribution to sustainable production. The organization had 550 companies with at least 100 employees interviewed for the study.
While the degree of networking is growing, data exchange remains difficult. The machines and software products often use different formats that are not compatible with each other. The legal uncertainty is also great. In addition, there is a widespread skepticism in business to pass on information from their own business.
This is where the Gaia-X project comes in: a European consortium wants to create a basis for a “European data infrastructure” through which companies can “merge, share and use data in a trusting manner,” as CEO Francesco Bonfiglio told Handelsblatt last year.
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As part of the initiative – and with government subsidies that the European Union allows in view of the “common interest” – several consortia are working on data rooms to facilitate the exchange of data. Manufacturing-X should also be based on these principles.
The policy aims to strengthen the sovereignty of Europe with Gaia-X. The concept is intended to give companies more control over their data through interoperability and high data protection standards. Also in contrast to the major American cloud service providers Amazon Web Services (AWS), Microsoft and Google, which dominate the data economy.
However, the development of such technology is complex. After extensive preparatory work, the first applications for Catena-X should be ready for the market by the end of the year, two years after the announcement.
Manufacturing-X is likely to be similarly complex. It is necessary to develop the technological foundations and a set of rules for data exchange. In addition, “Mechanical engineering is characterized by many medium-sized companies, which often have to catch up with digitization,” says Gartner analyst Tratz-Ryan. “The auto industry is much further along.“
New business models for SAP
SAP is one of the initiators of Manufacturing-X. CEO Christian Klein sees a great opportunity in the networking of entire industries on cloud platforms. “I want SAP to play a central role in such industrial networks,” he told Wirtschaftswoche last year. For the manager, who has a reputation as a controller and optimizer, these collaborations are proof of the innovative power of the software manufacturer.
Catena-X is a prototype for such networks: the automotive industry is networking on the platform in order to digitally map its value chain. This is the prerequisite, for example, to record emissions during production and ideally throughout the entire life cycle of a vehicle or to facilitate the recycling of components.
SAP plays an important dual role in such projects: on the one hand, the programmers make a significant contribution to the development of the platform, on the other hand, the software from Walldorf maps central business processes of numerous industries. Important data, for example for the digitization of the supply chain or the calculation of CO2 emissions, are therefore already available in the Group’s systems.
Siemens, the world market leader in automation technology and industrial software, is at least familiar with the project. It basically fits into the strategy, according to industry circles. However, the issue is still at a very early stage.
Siemens CEO Roland Busch relies heavily on cooperation and open platforms. “No one can do this alone,” he said, referring to the digital transformation of the industry. For example, the group sometimes cooperates with AWS, sometimes with the chip and graphics specialist Nvidia.
There are already various cooperations between SAP and Siemens. By linking the software offerings, a kind of “digital thread” is to be created that enables companies to have a continuous data flow – from the design of a product to production to the experience in business operations.
