The Digital Supply Chain podcast

The importance of the partner ecosystem in Industry 4.0 - a chat with Dominik Metzger and Nils Herzberg

May 07, 2021 Tom Raftery / Nils Herzberg / Dominik Metzger Season 1 Episode 128
The Digital Supply Chain podcast
The importance of the partner ecosystem in Industry 4.0 - a chat with Dominik Metzger and Nils Herzberg
Show Notes Transcript

On today's podcast we're kicking off a new Industry 4.0 on Fridays mini-series - themed broadly on the importance of partnerships, and the partner ecosystem in Industry 4.0.

For this inaugural episode I invited Dominik Metzger, Head of Product Management | Manufacturing and Industrial IOT at SAP, and Nils Herzberg, Global Head Strategic Partnerships & Industry 4.0, Digital Supply Chain at SAP to set some context.

We had a great discussion about the types of partnerships that are necessary in the Industry 4.0 world, and the reasons for their importance. 

Both Dominik and Nils referenced the Industry 4.Now Experience page on the sap.com website, so don't forget to check that out.

We had an excellent conversation and, as always, I learned loads, I hope you do too...

If you have any comments/suggestions or questions for the podcast - feel free to leave me a voice message over on my SpeakPipe page or just send it to me as a direct message on Twitter/LinkedIn. Audio messages will get played (unless you specifically ask me not to).

To learn more about how Industry 4.0 technologies can help your organisation read the 2020 global research study 'The Power of change from Industry 4.0 in manufacturing' (https://www.sap.com/cmp/dg/industry4-manufacturing/index.html)

And if you want to know more about any of SAP's Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don't forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.

And remember, stay healthy, stay safe, stay sane!

Nils Herzberg:

SAP he has very much you know taken the approach that we work with friends, and we have multiple sort of dimensions of friends that we have and that we need in this context of industry for right now.

Tom Raftery:

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 of SAP. Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and welcome to the first the inaugural episode of our industry for Dotto on Fridays, we're doing an industry 4.0 program and partner ecosystem series. And my guests on the inaugural episode are Dominic and Nils Dominik. Nils, would you like to introduce yourself with maybe Dominic going first?

Dominik Metzger:

Absolutely. And Tom, let me first of all say big thanks for having us on your podcast. So my name is Dominic Metzger. I'm part of SAP product engineering. And I'm responsible for the industry 4.Now now program. We'll hear much more about this in this episode. And I'm also running product management for our manufacturing and industrial IoT solutions.

Tom Raftery:

Okay, and Nils?

Nils Herzberg:

Yes. I'm Nils Herzberg, I'm Dominic's partner in crime with a specific focus on the topic of strategic partnerships and ecosystem for digital supply chain and for industry 4.Now.

Tom Raftery:

Okay, can we talk a little bit first about the industry four dot now program? And maybe Dominic, you could kick us off there?

Dominik Metzger:

Yeah, absolutely. I mean, the, let's say topic of industry. 4.0 is, in our opinion, just as relevant as it has been, when it was first launched, which is actually just about 10 years ago, I think, especially over this decades, the transformation of the manufacturing industries, has really received a lot of acceleration. And we'll talk a lot about this in this series, mostly due to the impact of ecosystems. So the, let's say, possibility of various stakeholders, and companies needed to make holistic transformation successful, right, for example, providers of hardware and automation equipment providers of software, like SAP, but also providers of security, and let's say, integration capabilities. And the big factor of why this, let's say was possible this acceleration is due to the fact that a lot of these partners in an ecosystem came together to agree on certain standards to agree on Northstar architectures to agree on how will Information Technology and operations technology move closer together. So our focus coming back to your question for our industry for now program, really is to allow companies to transform their manufacturing processes, by leveraging all of the device machine sensor data that is being produced in the real world, in factories and plants, in maintenance processes in logistics, leverage this wealth of data in their business applications, so bring together real world data with business data. Maybe we have time later on to give a couple of examples on how exactly we do that. But for us, this is really a key pillar to help companies become much much more productive, which we believe is a major pillar on becoming more resilient, right, that we can easier that we help companies withstand disruptions in supply chains by having highly productive and and flexible manufacturing operations.

Tom Raftery:

Okay, and maybe Neil's talk a little bit about the partner aspect of this.

Nils Herzberg:

Yes, I think the the the power aspect of this and if you know SAP, you know that we are a big company, a strong company capable company, but we will be nothing with our ecosystem. SMP has very much taken the approach that we work with our friends, and we have multiple sort of dimensions of friends that we have and that we need in this context of industry for that now. Maybe I'll go into the big categories of you of the type of partnerships that we are having in this area. I mean, the first set of partners are you what we would call you, the builders, the construction makers those are that we are working with to deliver industry for dot now to our customers. But implementers make it happen at the customer site. That's the first category that make it happen. The second category is you the partnerships that we have on the stack in the stack, which makes SAP solution look, be more versatile, be more bold, be more broad in terms of its capabilities. So those augment our capabilities. And last but not least, and I think Dominic touched on that point already. Use the standardization, the systems, the income, the compatibility, the interoperability, those elements. So first of all those who make it happen at the customer site. second category, those who make our solutions more comprehensive, more strong, more enterprise grade. And the last one, the partnerships to make it more standard, more compatible, more interoperable. So those are the three categories that we have, obviously, we have a more sophisticated model, which is on our website. I'll give you the link to that so that you can publish that as well. But your these are the three major categories that we look up for for partnership.

Tom Raftery:

Okay, and how are we opening up to partners? Dominic, maybe you could talk about that.

Dominik Metzger:

Yeah, I think there there are various dimensions, how we we open to partners? I think the first and foremost is the philosophy that we have. And I think Neil's phrased that perfectly, that we can only be successful in an ecosystem. We recently at whoever had a chance to see a very nice panel discussion at Hannover Messe, which was comprised out of Thomas our esic, our board responsible for product engineering, there were guests, the CEO of cuca, with Microsoft on the table, Siemens, and the theme was really moving from ego systems to ecosystems. And also make sure to give you the link, Tom, but great. I think to me, this is the biggest prerequisite that we as leading companies are willing to partner with each other and create higher value to our customers than alone. But then, of course, secondly, we need to be able to technically integrate with each other. And here, I believe standardization is key, but also building and forging very strong alliances, right. So for example, and I'm sure neillsville will take us much more into detail. But the open industry four zero Alliance is of course, a major contributor in bringing these these big companies together and executing on standards.

Tom Raftery:

Okay, Niels.

Nils Herzberg:

Yeah, let me just build on what Dominic just said, I think in the space of industry, 4.0, you everybody knows that they cannot actually achieve without partnerships, you know, to make a factory work. You're digitally versatile, agile, it takes a lot of skills, a lot of contributions, a lot of talent. And you have to bring this together in the factory. And I think Dominic already touched on this ecosystem versus ecosystem thought, I think it is the time of ecosystem. The egos Yes, we've had that time everybody wanting to do everything. I think there is the new realism that is coming in. And I think the time for ecosystem is, is is now to make it happen. And for the operators of factories of warehouses of plants. The reality is a mixed reality you from this vendor, that vendor, and the customer wants to build on those skills. So the expectation is that we work in ecosystems and we work on standards as well. I just wanted to add that because it is important.

Tom Raftery:

Okay, and Niels maybe you could tell us as well how can partners cooperate with SAP?

Nils Herzberg:

Yeah. So there are various mechanisms and you're the sap has strong partnership mechanisms. You if you look at the App Center, for instance, you will see more than 1000 partners, you're having solutions that are interoperable with SAP. The second mechanism for instance, is to have a certification through standard interfaces with with SAP and have yourself certified so it works with you the other one was that I first start works on the next one is works with then if you are a be called a system integrator, you we have a whole partner a program, which is worldwide, and where we integrate our friends with our processes. And in the way we work. I think Dominic could actually also talk from the other side, because you're he actually worked as a partner SAP before he started working for SAP. So you know how to be part of the overall ecosystem process. We are in pandemic time. So it's not Sapphire time, at least it's not the physical Sapphire time. But how do you get involved with the SAP Business Development processes as well, then you if you have components that you believe that are actually very complementary to the sap solutions? You Yes, it is worth a discussion with folks like Dominic to see whether there is anything that makes sense. I think we're partners those shooter no is that SAP your embeds in its stack only one solution for one problem. So we will not have multiple of the database, a database B database, see, as we are options for our customers, so we will only have one solution for one problem in our portfolio. But it is really worth a discussion. So there are multiple mechanisms in the space. And I think you're on LinkedIn, you know where to find a both Dominic and myself to initiate those discussions.

Tom Raftery:

Okay, Dominic, anything to add to that?

Dominik Metzger:

I think Neil's described it perfectly in terms of what our what our internal mechanisms are speaking now wearing my former head of working for a partner, I fully agree. I mean, there is an entire digital supply chain channel organization, which really focuses on this first out of these three dimensions of ecosystems. So really the the make it happen type partners, the system integrators, that's one of which I worked for, which go into very close alignment on where can we partner on creating appetite with customers? Where do we see also challenges in the implementation? What What can SCP learn during implementation experience of their partners? So I think this is a very well established mechanism. And certainly one of the new ones coming back to the open industry four zero Alliance is certainly within the the ecosystems of alliances, right, we also are part of catina X, the automotive Alliance. So those are two very, very prominent alliances targeted, really all around industry for zero, how we open our, let's say, discussions with various partners. Okay. And Neil, I

Tom Raftery:

mean, you talked a little bit about the partner ecosystem. Could you tell us a little bit more about the industry forward up no partner partner ecosystem Goodwin and a little more detail?

Nils Herzberg:

Yes, I'll be happy to so you if you go into the detail, the make it happen crowd, the make the stack greater crowd and let's make it more standard crowd those are the three major categories. But if you look into that, in detail, worldwide, system integrators is a very, very strong, it is system integration, it is also channel it is reselling. Then your The second category is your industry Consortium's we will have a separate podcast on the open industry foretold zero Alliance, which is one of the key mechanisms. And we use that mechanism when it needs a crowd to make something happen. Standardization is something that you only make happen in a crowd. Standard organizations Be it OPC ua Be it the the industrial digital twin Association, be it automation ml a lot of organizations that you where we work, and where we work with our partners with our friends, to drive this whole interoperability standability topic application providers you I spoke about the small ones, the big ones, the partnership that we've done with Siemens is probably the masterpiece in this domain of partnering with somebody with a company a great company, who has a very, very big and strong portfolio as well. But the use of the combination of those two is something even greater startups there your company from Israel with 3d signals is a good example of how we partner with very, very small companies on very, very particular particular needs. But you what we love is build the agility that some of these companies actually have to make things happen very, very

Unknown:

quickly.

Nils Herzberg:

You're the one topic that you we talk a lot about application. And technology. But you I think one of the emerging partnership categories is the content aggregators. Your project 44 is a very good example, who delivered the logistics data, which helps supply chains and factories to run even more precise than the everywhere work? control systems? Yes, we talk about industry 4.0 automation. So we need to talk to companies like Mitsubishi z mounts, backoff, Rockwell Honeywell, because a big part of the industry, 4.0 is also the automation of factories. And the fact that you're an MRP system will give a production order to a machine not to the human standing next to the machine. So we need to work with automation so that these orders are you go to the machines, and the confirmations also come back. Connectivity providers, telcos, Dominic and myself, we spend a lot of time talking about the topic of connectivity, the impact of 5g on the whole topic of the factory, there is no internet of things if the things are not connected to the internet. Okay. And that's what connectivity is all about. I do think that security, cyber security, that is going to be an interesting topic, because a lot of our customers are very, very scared to open the firewalls that surround their factories. Because, yes, you we've seen a lot of and we regularly hear about disruptions happening because of malware, and so on. So whatever we do, it needs to be secure. And customers will want a certificate that whatever they did is secure. Then we have Bo partnerships with companies like cuca, or Trump, or Andrus and Hauser, or others, where we work with our customers, our as our partners to make the end to end journeys happen from the robot, through predictive maintenance into asset intelligence network, so that our customers, which are actually their customers points as the automotive industry, that they are able to reap the benefit of the promise of what industry 4.0 actually is, then, data platform providers, Microsoft, just as a poster child for for this year, they are absolute reality in every factory that we go to. And we are working with them to integrate into the data leads with Microsoft, we are also talking about working on the topic of edge, your SAP, and we can talk about architectures as well, but maybe not today. Yeah, we have the hybrid architecture of cloud at edge. And there we are engineering, collaborating with Microsoft, for instance. And then last but not least, government policies, politics, some of what we do, also requires your legal support and change of some of the legislation to actually make it happen. data sovereignty is a big topic of who owns the business data. And it needs a legal framework. Also, as we go to very autonomous system, your current legal framework just fail who's responsible for a completely autonomous, something that actually goes off and creates damage? Is it the owner? Or is it the one who created the autonomous system? So things need to be thought through and change? So those are, if I yeah, I spoke through the wheel that we always use the background. So I spoke through the wheel that is also on on our website with examples of the partnership that we do.

Tom Raftery:

Interesting, interesting. And we'll, we'll have that link to that website. So people can check out the wheel for themselves. Dominic, can you tell us about some of the technical aspects of this? Yeah,

Dominik Metzger:

I think, you know, good point, the the, obviously a lot of this requires open technical frameworks to really, let's say, architect such a such partnerships. And I mean, in general, when we look at industry, four zero, I want to differentiate very roughly between three layers, right? We of course have the whole layer of hardware and connectivity. menials you put it very nicely and said there is no internet of things if the if the things aren't connected to the internet. So this is exactly the layer where I would attribute partners like telco providers, 5g providers, control system providers, automation hardware providers, sensor providers, so anyone that produces hardware and connectivity. And then the second layer is definitely emerging, what we consider edge computing, meaning you don't want any longer an entire server room, in a factory in a plant in a warehouse want to have a very lean device, whether that's heavy edge, as we call it. So really with compute power, or a light edge, meaning some sort of a gateway. And then third, you have your cloud operations, you need to run scalable processes out of a cloud. And most important to me to highlight is on each of these three layers, we embrace partners. And I want to give you an example for each so on, on connectivity, we partner with companies like Verizon, on 5g, we partner with companies like like Niels mentioned, enters, and how's that we're providing very comprehensive sensor technologies connectivity, in the process industries. We partner with standardization organizations like OPC ua. And so this is the connectivity layer where we are very, very open. On the edge. Microsoft is a strong partner of ours, we have others how we actually provide the edge computing technologies. Key to us here is again, to integrate other edge, let's say partner solutions, for example, via standards such as OPC, ua, such as mq, TT or REST services. So again, heavy on standards. And then on the third layer, the cloud layer, I think here we see two options, we see partners that builds on their own stack. And again, we connect them to our cloud platform, for example, with risk REST services, or an even more exciting we see partners building on the SAP Business Technology cloud platform, right? So they are really extending our stack with custom applications. And and the logic, like Nils described it nicely to make our offering more comprehensive. Right. So those are the three major technology layers on which we embrace partnerships. Okay, super.

Tom Raftery:

Niels, we're coming towards the end of the podcast. Now, if people want to know more, or if b2b, their customers or partners or want to be customers or want to be partners, what would you What would you say should be next steps for them?

Nils Herzberg:

The next steps are I think, pretty simple. If you are intrigued by by what your I think what Dominic and I offered up today is a big walk in the partnership park of industry 4.0. Firstly, I think we will be following up Tom, and he on a bi weekly basis with detail on each of the elements that we touched on together. So you know, the open industry 4.0 is already on the list. And there's more to come. That's step one be every Friday or every second Friday. Listen to Tom Raftery, his podcast is action item number one listen

Tom Raftery:

to it all the time. I

Nils Herzberg:

think the second action item though is think about joining Team Blue Team SAP being in the ecosystem of SAP. And if you think that you want to do that, you should reach out to folks like myself, but also you we have folks in Japan, we have folks in Singapore, in Europe, in the US that are working on this topic, we are a team of five or six people building the ecosystem, just specifically for industry 4.0. So reach out to us, we'll be another one. I would encourage everybody to look through your your things like the App Center or the certification process, because those are things you can do without you needing executive support to do to get there. These are standard prayers that we do. And we encourage you that explore those as well. So those would be the key elements of the quarter action that I would think of at this very moment. Dominic, any thoughts from your side?

Dominik Metzger:

I think you summarized it nicely. Neil's nothing else? No.

Tom Raftery:

Okay, super. So as we're winding up the podcast, guys, is there any topic we've not addressed? Any question? I've not asked anything that we've missed out on talking about before we finish up.

Nils Herzberg:

For my side, there's one element that I missed to mention, the ecosystem is a regional topic. So we do recognize that the ecosystem in Japan is different to the one in China, to French to the one, let's say that you would serve Europe, or the one that would serve the Americas. And I think you're the call to action. I would like to expand the call to action you and think about Regional priorities as well. We are building relevant ecosystems in all of those regions and countries that I've just mentioned. I think that is an important point to consider because this topic is a regional topic and we have read regional expertise that we would love to attract that and would love to tap into

Tom Raftery:

Superb, superb Dominik, Nils, if people want to know more about yourselves or about the partner ecosystem or the industry forward up now program or any of the other things we've discussed on the podcast today. Where would you have me direct them?

Dominik Metzger:

I think the best source of information is our industry four dot now experience Neil's already spoke about it, you find our nice wheel with all the different partner elements on it. But you also find a very comprehensive showcase of various processes in and around industry for zero that help companies digitalize their businesses and drive manufacturing transformations on that same experience website. So definitely take a peek at that. As I think it already takes you very deep under the hood into what are we offering and what are we doing in industry for zero?

Tom Raftery:

Okay, Neil's Anything else?

Nils Herzberg:

Yeah, I would echo that pitstop, number one is the experience page on SAP.com. And pitstop number two is me if you want to know more about Dominic or myself is our LinkedIn profiles.

Tom Raftery:

Super super, guys. That's been great. Thanks so much for coming on the podcast today.

Nils Herzberg:

Thank you for having us. Thanks. So

Tom Raftery:

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 sa p.com slash digital supply chain or, or simply drop me an email to Tom raftery@sap.com. If you'd like to show, please don't forget to subscribe to it and your podcast application of choice to get new episodes as soon as they're 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.