SAP’s Marko Lange on Industry 4.0
How Chemical Companies Can Become Smarter
CHEManager Europe: How will the trends and challenges described by the term "Industry 4.0" affect the chemical industry in particular?
Marko Lange: In order to understand what "Industry 4.0" means for the chemical industry, it is helpful to reduce this broad term to its essentials. And these are mainly two things, in my opinion: Firstly, all elements of a chemical company become smarter, and secondly they become connected - be it assets, employees, products, business partners or end customers. Here are some examples: Assets will be equipped with SIM cards so that they can provide information about their condition. Maintenance workers get mobile devices, which inform them about new work orders, including working instructions. Products get tagged with unified identifiers, which allow tracking and tracing them and knowing their history. Business partners can exchange information in social networks to drive open innovation or to exchange material data declarations to ensure product compliance. And last but not least, end customers can check eco-friendliness of products via mobile devices.
SAP's holistic business approach was designed to support companies to tackle these challenges. Could you please describe in what areas chemical companies might profit most?
Marko Lange: The given examples show that we do not talk about manufacturing alone. We have to break down the barriers between the business functions like manufacturing, R&D, regulatory affairs, maintenance and logistics. Combining analytics with production planning helps to reduce asset downtimes and increase productivity. This is because analytics allow understanding when an asset will have a breakdown, for example, since it is based on sensor data from technical equipment that is smart and connected. Tracking and tracing of goods shipments allow reduction of inventory, reducing working capital needed. At the same time you can avoid product counterfeiting and increase your service level at reduced cost. And last but not least, helping ensure that products are safe, compliant and trustworthy mitigates product compliance risks while increasing customer satisfaction. This is even more imperative for innovative products that are sustainably made and tailored to customer needs.
Behind all that, huge amounts of data have to be managed and analyzed. This is possible with a new database concept called SAP HANA, where the database is running in-memory and where the organization of data is done along rows and columns. This allows significant data compression and gives the opportunity to read millions of data sets out of a database within seconds, or even less than a second.
From your point of view, will sustainability management become even more important in the future? How will companies profit from a holistic approach that covers engineering, production and sustainable operations?
Marko Lange: Challenges like global warming and limited resources of raw materials and energy in spite of a growing population, obviously proof that sustainability will gain importance. These findings are not new for the chemical industry that has been running the Responsible Care initiative for many years now. However, the use cases described can help to turn product into service business and to increase energy and material productivity tremendously. I think that this is the real fourth industrial revolution - the outstanding increase of material and energy efficiency enabled by connecting different elements that become smarter.