Christian Liedtke: 0:04

So, robots are going to become more easy to use in the future and, we already have, some applications for that. but, the equipment price is just a part. That's why we really have to look deeper into, uh, outcome-based business cases, to see how this can actually be done so that it's interesting for the customer but, we get our costs covered as well

Tom Raftery: 0:25

Good morning, good afternoon, or good evening, wherever you are in the world. This is the digital supply chain podcast. The number one podcast, focusing on the digitization of supply chain. And I'm your host global vice-president at SAP Tom Raftery. Hi everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me on the show today, I have my two special guests back again, Christian and Alex. Welcome back. Thank you for joining me. Would you like to introduce yourselves with maybe Christian going first.

Christian Liedtke: 0:57

Thank you, Tom. My name is Christian I'm with KUKA since five years and, you know, KUKA for sure. We are the ones with the orange industrial robots. And, we are, working together with SAP on some very interesting projects that we would like to introduce to you today.

Tom Raftery: 1:13

Phenomenal. And Alex?

Alex Altermann: 1:14

Hi. thanks Tom, for having us here again in your podcast. Uh my name is Alex. I'm working in the industry 4.0 strategic partnerships department at SAP. And I'm responsible for the partnership that we are driving with KUKA.

Tom Raftery: 1:28

Fantastic. Great. Now, you mentioned Christian that you were working on, something that you wanted to talk about on the podcast today. Do you want to intro myself and the audience to this?

Christian Liedtke: 1:39

Sure. That's what we're here for. what are we actually working on? SAP a world leader in IT and KUKA is very renowned for its industrial robots. So how do those two come together? Well, we had an idea, because both of us somehow struggle in the field of digitization because it's something you can't do alone. So we sat, join our forces and let's do something together. And that's what we actually did. We took a production cell that it's used in our own robot manufacturing here in Augsburg, in Germany. And, we call this, the Hellercell because it consists of two Heller CNC machining centers that are actually, loaded and unloaded by a KUKA robot. That's, mounted there on a linear axis. And, besides, this robot is also doing some grinding operations to take machining time out of those CNC machines. Now, and this is complex, but from an automazation point of view, a very easy production cell, they do find in multiple, applications, you throughout the entire industry. You have many customers who automize processes. It could be CNC machines could be lasers, could be injection molding machines or whatever, by robots. And now we have this cell in our own production. And, uh, so that's why we thought this might be a good use case to actually digitize the cell and, use this together with the help of SAP.

Tom Raftery: 3:03

Okay. And Alex, how are we digitizing it?

Alex Altermann: 3:05

From an SAP point of view, we see that in industry 4.0, we need many different players to work together, to create joint projects of industry 4, it's not about only software or our expertise in the business applications. It's also the machine and equipment makers like KUKA can also be the people that are working on the connectivity on the shop floor, or on the infrastructure, et cetera. So we wanted to bring those different players together and KUKA and SAP are both, reliable and trusted partners for the industry in their specific domain. So bringing this together is a logical step from our point of view, and to digitize that KUKA has some offerings, for digital services for their customers, SAP knows best about the business. How are the business processes running for the different industries. And to show and to experience this in a real production scenario, like in the Heller cell, this is something that is really great from our point of view to bring joint customers from consumer goods from automotive. We have many different, customers, uh, joint customers in different industries, that can experience, this digitalization of industry four in a real production. At KUKA Augsburg, we bring together the digital services of KUKA, like the KUKA expert. KUKA iiQoT together with SAP Asset Intelligence Network, where we build a joint digital twin of those different hardwares, the KUKA robot, and the CNC machines of Heller and, show how they interact with each other and how we can integrate the digital services of KUKA there as well.

Tom Raftery: 4:56

And what does this do for somebody that they couldn't do if it wasn't digitized?

Christian Liedtke: 5:03

You know, one of the main problems, that you always face is, some consultancy companies, some researchers, they always have set up great numbers that you could achieve by digitizing something. And in reality, somehow no one could really prove this because you're always just looking at one machine and this machine is of course running great. We all know what we are doing in our productions and you don't get those marvelous results. So everybody is disappointed and that's why, this entire digitalization business somehow is lacking it a little bit. Now what we did here is, we were looking for a production cell and we were looking for real, tangible outcomes for ourselves. It's not about selling this to someone. It's nothing that you can simply buy by KUKA and SAP in this case. It is a production cell that is running 24 7, and we are trying to utilize, all those tools that we have with SAP AIN. With like Alex already said, the KUKA tools, expert, or KUKA iiQoT, there's also the KUKA KDC as a tool of connecting things. And, we are this using to make the cell run better. And we are looking at use cases that might not be as attractive a thing that you find research publications But it's something that our workers are really looking for where they say, hey, I know this is sometimes going wrong. Can you give me a number for it? Can you show me actually a red light if this happens And by this, we really get tangible outcomes are the people are satisfied with what they see and it's a real improvement that we can actually show there. And like I said, it's a cell that running 24/ 7. Now, if you imagine what you can, get out of it by just, doing something a little bit better over time, it really becomes a huge factor. And that's what we're trying to do in this collaboration.

Tom Raftery: 6:59

Okay. And are we seeing any tangible benefits so far?

Christian Liedtke: 7:04

Yes, of course. first of all, we can show that this partnership of KUKA and SAP is working. It is leading somewhere. We are, leading to benefits. I won't tell you numbers, now today but, it is really about, getting something, running together and, the benefits are there. We are gaining productivity. We have less unscheduled downtimes by far. We can easier predict when tools are worn and then things like this. So, those are just simple use cases, where we can prevent downtimes thus increase productivity.

Alex Altermann: 7:39

Yeah, and what is really great so we are closely working together with the employees of KUKA in the production, to showcase these scenarios. And this is not only a showcase. it's in the real production as Christian already said. And it's a further benefit that we can, use this as a showcase for our customers, but the first benefit starts in the production for the employees there to have this real scenario in a digital twin and see how collaboration on this data of the different hardwares that are integrated here can work.

Tom Raftery: 8:15

Okay, and you mentioned showcase. Does that mean that, I don't have to go to Augsburg to see it, I can see it somewhere else?

Alex Altermann: 8:22

We have set up this specific scenario in the Heller cells. So in the real production, we can't move it anywhere. It is really in Augsburg, so we can visit the real production of KUKA in Augsburg, to show it. But we'll also be in the Hanover, for example, at the SAP booth. So we will do a presentation about this scenario at Hanover Fair, and we can show at least the digitalization as, Digital and all in the cloud. So we can show that anywhere to our customers, to our joint customers who could be interested in this scenario, but if they want to see it in real life, they need to go to Augsburg.

Tom Raftery: 9:03

Okay. Christian, did you want to say something?

Christian Liedtke: 9:05

Yeah, I, was just about to add what Alex just said. I mean, it's digital, if you can't make it to the Hannover fair, if you can't make it to Ausburg, because you're sitting somewhere in the world, we can have a digital meeting and show those digital outcomes. if you really want to, touch it and feel it, then of course you would have to come to Augsburg, but this should be, possible anytime together with our SAP colleagues. We're happy to show you around.

Tom Raftery: 9:30

Okay. And if I want one in my own plant?

Christian Liedtke: 9:34

Well, tell us, we will set it up for you. it's it's not a problem. Actually we already performed some of those projects as pilots with some customers together with SAP. We've also proven that this, partnership is, actually, leading to tangible outcomes and, If you're interested in, having one of those POCs in your production, just tell us, contact KUKA, contact SAP, and we are happy to, do this project together with our customer.

Tom Raftery: 10:01

Okay. And you said that it's in a real working environment, with your own employees working on it is it just that it's helping reduce downtime or are there other problems it's helping to solve for them as well?

Christian Liedtke: 10:15

Well, it's mainly about, reducing downtime because, this is something that's always an issue in a production environment. And everything that we're doing currently is not related to quality enhancements or something like this. And, productivity is also an issue if you're looking at the overall equipment effectiveness. Therefore, you need to go deeper into the processes. And we are currently not doing this. We are looking for the low hanging fruits to have real, easy to achieve outcomes. So that's why we are looking mainly on downtimes.

Tom Raftery: 10:48

Okay, Alex.

Alex Altermann: 10:51

just, some comments on this. So, this is the first step that we are doing at the moment. So we could think about having further use cases in this production cell as well. And especially we are working with on one innovation or inspirational business case at the moment where we are proving how a pay per use scenario, outcome based business for KUKA can look like. So we are not just working on this one scenario. We want to show the customers that, there could be other scenarios for KUKA, that can be relevant for the future. For this innovative case we have, a pay per use scenario, we are, we are discussing how a hardware vendor, like KUKA can do let's say for not an a case where the customer needs to buy the robot. So invest in the robot. like a pay per pick, pay per process scenario. If they, need this robot, for a specific time. So a project for six months where they have to produce something, or they needed for a fair to showcase anything. So, perhaps their a pay per use scenario could be worth to think about. And, this is what we want to show in this Hellercell scenario as well, where we are working with real- time data, to prove if a pay per use, can be a scenario as a new business model for KUKA as well.

Tom Raftery: 12:15

Okay. Interesting. And is that something you're actively looking for Christian to go the pay per use model, or is it something that you do for some customers just, and others would? So, how is that working out?

Christian Liedtke: 12:28

That's a good question. Thank you for that. We frequently get asked by customers. If we would also offer robots as, pay per use. And, yes, this is possible, but it's a complicated process. For example, if you have those large, size robots, you need a foundation and so on. So maybe pay per use is not applicable for those cases, but we also have some very small robots for electronics, uh, manufacturing and especially in, electronics line. If you look for Asia also, those lines are mostly not running for 10 years or something like this, like in the automotive industry. So they are looking for something that's just driving for two years, maybe three years or something like this. So this is an interesting case. Now, no one has real experience with pay per use in those cases. We have some marvelous cases from other companies, offering compressed air as pay per use, but this is enclosed product. It's something that you can measure and something that you can just put a price tag on. It's a little bit more complicated if you're doing this in a production environment where more partners are involved. So, that something where we simply try to get us some information to find out how such a model could look like whether this is something we, as KUKA are going to bring into the market or whether it is something, that's done by other companies in the future. This is something that has to be clarified in the future, but, we are working on it. We are having a close look at it see why does this could be a real interesting business case for our customers. And of course for ourselves as well.

Tom Raftery: 13:59

Yeah, because I can imagine if you were just renting a device to somebody for two years, as opposed to selling it to them outright, you've gotta weigh up, which is more attractive and, how it works out financially for both of you.

Christian Liedtke: 14:14

Yes, definitely. you know, it was robots, the price of the robot is just a small portion of the entire price that you have to calculate. When you set up such a production cell, because you have all the equipment around it, then you have to set up, the programming and things like this. Now we are very active in making, especially this programming a lot easier. So, robots are going to become more easy to use. In the future and, we already have, some applications for that. but, the equipment price is just a part. That's why we really have to look deeper into, uh, outcome-based business cases, to see how this can actually be done so that it's interesting for the customer as well. But, we get our costs covered as well.

Tom Raftery: 14:55

Mmm, it would of course be a big sustainability win, because I assume that at the end of the, maybe 10 years in the automotive world or the two years and the electronics world, you'd be taking the devices back and recycling lots of those parts. And it wouldn't be a one-off, but it would be, it would start to enter the circular economy.

Christian Liedtke: 15:14

Definitely. And that's why we are looking into this field and especially given the fact that KUKA is really offering high quality equipment that lasts and lasts and lasts. We still have robots that are 30 years and older in the field, at customer sites, taking those 30 years as an example. And on the other hand, you are having really someone who's building the new iPhone and he just has the contract for one year. Now, it's 30 years compared to one year, you have to think about use cases like this, whether they applicable. So, it's something that we really have to go into research and find out how we can change it. And by that, also do our part in the entire sustainability, business.

Tom Raftery: 15:54

Okay. And this Hellercell is helping us getting there.

Christian Liedtke: 15:57

Yes.

Tom Raftery: 15:58

Phenomenal. Phenomenal. Cool. That's been really interesting folks. We're coming towards the end of the podcast. Now, is there any question I haven't asked that you wish I had or any aspect of this we've not covered off that you think it's important for people to be aware of?

Christian Liedtke: 16:13

Well, from my side, I think most questions are really asked. but, what I would like to mention is please stay tuned. I mean, we are going to offer more of these podcasts on this topic and, please visit us at least on the Hannover fair on the SAP booth. And if you cannot make it to the Hannover fair, please contact us and come to Augsburg to have a touch and feel of our joint project here.

Tom Raftery: 16:36

Or in the worst case scenario, see it online. Alex, you had anything to add?

Alex Altermann: 16:40

No, this is exactly what I wanted to mention as well. We will have further podcast on this scenario. We want to talk about the implementation. We want to talk about what we really will show at Hanover fair in a bit more detail. So stay tuned and, just listen to the next podcast that are coming.

Tom Raftery: 16:57

Superb. Great. Alex, Christian, thanks a million for coming on the podcast today.

Alex Altermann: 17:01

Thank you so much, Tom.

Christian Liedtke: 17:03

Thank you.

Tom Raftery: 17:05

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, head on over to sap.com/digital supply chain, or, or simply drop me an email to Tom dot Raftery @sap.com. If you'd like to show, please, don't forget to subscribe to it in your podcast application at choice to get new episodes, as soon as they are published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks catch you all next time.