Bosch and SAP

Teaming up on Industrial Digitalization

workers in production bloomber
Networked systems make their jobs more efficient.
  • Why it matters

    Why it matters

    The collaboration aims to demonstrate the opportunities offered to industry by digital networking and how they can produce profits.

  • Facts

    Facts

    • Industrial company Bosch and software giant SAP are going to jointly test the latest technology and establish a model for exchanging data.
    • Their effort is part of Industry 4.0 – the networking of products, factories and warehouses, manufacturers, suppliers and customers – that German companies are banking on to increase productivity.
    • ­By one estimate, about 21 billion pieces of equipment, from machines to wind turbines and light fixtures to forklifts, will be linked to the internet by 2020.
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    Audio

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Why did the two forklifts crash? A real-time tracking solution at a logistics center handling Bosch-Siemens home appliances delivers a prompt answer to the shift supervisor.

An onscreen simulation reenacts where the two forklifts, equipped with sensors that measure their batteries, the weight of goods carried and their exact position, bumped into each other. The solution also records whether collisions frequently occur at that particular spot and even suggests shorter alternative routes.

Over the past several months, the engineering and electronics company Bosch and enterprise software maker SAP ­have been collaborating in establishing standards for exchanging data in industrial processes.

“International companies must cooperate more fully than up to now and use open standards. ”

Volkmar Denner, CEO, Bosch

“To make better use of the great potential of networked industry, international companies need to cooperate more and use open standards,” said Volkmar Denner, Bosch’s chief executive.

It’s an attempt to simplify numerous complex operations – and to make them more cost efficient. It’s also a development that experts say more German companies need to jump on faster before they get lapped by more digitally savvy competitors.

SAP’s director of technology, Bernd Leukert, called Germany’s Industry 4.0, as the digitization of industry is dubbed in the country, one of the software company’s “top five priorities” for investments. After cloud computing, it’s “the greatest opportunity for the IT industry,” he said.

mcdermott and denner dpa Picture-Alliance - Uwe Anspach - Bosch
Bill McDermott, SAP’s chief executive and Bosch CEO Vokmar Denner hope to establish new internet standards for the supply, production and distribution chain. Source DPA/Picture Alliance/Bosch

 

With its technical expertise, Bosch sees itself playing a key role in the so-called “internet of things,” which refers to to the networking of industrial and household objects, from vehicles to fridges.

Market researcher Gartner estimates that in 2020, some 21 billion pieces of equipment will be linked to the internet, from machines and wind turbines to light fixtures and forklifts. Electronics and engineering company Siemens and its American peer, General Electric, also see huge potential in such wide scale networking that encompasses not only their own production but also that of their suppliers and distributors.

Digitalization on this scale has its challenges. Companies must install complex technology able to exchange and analyze data, and no universal translator currently exists to interlink different systems and standards.

And experts have warned that Germany – especially its important seam of small and mid-cap manufacturing companies – need to up their game to keep pace with what is touted as the fourth industrial revolution.

A report by consulting firm Roland Berger and the German Federation of Industries found that failing to adjust to the digital reality could cost the country’s industry €220 billion by 2025.

But what sounds convincing in theory, is hard to pull off. This has been the challenge. There is a lack of examples out there.

And Bosch and SAP are among a series of German blue-chips to unveil bids to digitalize their operations and therefore ensure their relevance in the future.

In a first step, SAP’s real-time databank Hana will run on the Bosch cloud system, allowing commercial customers to analyze the data of cars, machines or accessories. SAP intends to offer Bosch services via its cloud platform.

SAP and Bosch aim to contribute to standardization through their collaboration. They are active in both the German Platform Industry 4.0 and the Industrial Internet Consortium, which is strongly influenced by U.S. companies.

Bosch already has a developed a standard for exchanging data about machines between two companies, a solution that can increase productivity up to 25 percent, according to Mr. Denner.

Mr. Leukert emphasized that such standards are the bottom line to allow German companies to push forward on digitalization. “Only if such standards exist can small and mid-sized firms benefit from digitization,” he said.

Analysts welcome the collaboration. “It’s important that companies like SAP and Bosch pool their resources,” said Alexander Höppe, an analyst at Gartner.

 

Christof Kerkmann is an editor for Handelsblatt Online and writes about the technology sector. To contact the author: kerkmann@handelsblatt.com

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