Software manufacturer builds cloud platform for industry

Dusseldorf, Munich Whether for developing new business models or determining CO2 emissions: data has become a key raw material for mechanical engineering. A new project aims to help the entire industry to make business processes transparent.

According to Handelsblatt information, a consortium of SAP and German mechanical engineers is developing a cloud platform for the manufacturing industry. According to information from participants, this should facilitate the exchange of data. The model is the Allianz Catena-X, in which companies from the automotive industry have joined forces. This can be seen from the name: Manufacturing-X.

“The platform is currently still under development, but we are making good progress,” said DMG Mori boss Christian Thönes the Handelsblatt. As a technology leader in mechanical engineering, we feel responsible for contributing to this. SAP explained that there are talks with the Federal Ministry of Economics and other companies. The laser technology manufacturer Trumpf is also involved.

However, many details are still open. According to information from groups of participants, the consortium is negotiating with the federal government about 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 be involved.

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The digitization of the supply chain occupies practically the entire economy. Due to legal requirements, companies will have to create transparency over the next few years, for example to prevent violations of human rights and to determine emissions during production.

“The necessary data is in different companies and systems – it is important to bring it together,” says Bettina Tratz-Ryan, an analyst at Gartner. However, the exchange of data is not trivial. “It’s not about Euro pallets, but the assembly of complex products.” In other words: the Manufacturing-X consortium has a lot of work to do.

Indispensable “Industry 4.0”

The use of data has become a key skill for machine builders and factory outfitters in recent years – “Industry 4.0” is the buzzword. Companies network production and logistics, use algorithms for the predictive maintenance of machines and rent out 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 spring.

There is potential above all in reducing emissions, 81 percent expect a contribution to sustainable production. The organization asked 550 companies with at least 100 employees for the study.

As connectivity grows, sharing data remains difficult. The machines and software products often use different formats that are not compatible with each other. Legal uncertainty is also great. In addition, there is widespread skepticism in business about passing on information from one’s own business.

This is where the Gaia-X project comes in: A European consortium wants to create a basis for a “European data infrastructure” that companies can use to “merge, share and use data with confidence”, as CEO Francesco Bonfiglio told the Handelsblatt last year.

>> Read about this: Competition with China: “Traffic light must remove hurdles for Industry 4.0”

As part of the initiative – and with government subsidies allowed by the European Union given the “common interest” – several consortia are working on data rooms designed to facilitate data sharing. Manufacturing-X should also build on these principles.

Politicians are aiming to strengthen Europe’s sovereignty 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 large 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 of Catena-X should be ready for the market by the end of the year, two years after the announcement.

Manufacturing-X should be similarly complex. It is important to develop the technological basis and a set of rules for data exchange. In addition: “Mechanical engineering is characterized by many medium-sized companies that often have catching up to do in terms of digitization,” says Gartner analyst Tratz-Ryan. “The car industry is much further there.”

New business models for SAP

SAP is one of the initiators of Manufacturing-X. CEO Christian Klein sees a great opportunity in networking entire industries on cloud platforms. “I would like SAP to play a central role in such industrial networks,” he told the “Wirtschaftswoche” last year. For the manager, who has a reputation as a controller and optimizer, this cooperation is proof of the innovative power of the software manufacturer.

Catena-X is a prototype for such networks: The automotive industry connects on the platform to digitally map its value chain. This is, for example, the prerequisite for recording emissions during production and ideally for the entire life cycle of a vehicle or for facilitating the recycling of components.

>> Read about this: Data plugs for the automotive industry: Catena-X is about to be launched

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, and on the other hand, the software from Walldorf maps central business processes in numerous industries. Important data, for example for the digitization of the supply chain or the calculation of CO2 emissions, is therefore already available in the Group’s systems.

Siemens, world market leader in automation technology and industrial software, is at least familiar with the project. According to industry circles, it basically fits into the strategy. However, the topic is still in a very early phase.

Siemens CEO Roland Busch relies heavily on cooperation and open platforms. “Nobody can do it alone,” he said, referring to the digital transformation of the industry. The group cooperates sometimes with AWS, sometimes with the chip and graphics specialist Nvidia.

There are also various partnerships 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 flow of data – from the design of a product through production to experience in business operations.

More: With software against delivery problems: SAP and Bosch rely on booming business

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