PLM and Live Engineering article from the Digital Plant and Economic Engineer publications. Discusses next generation of PLM for smart connected products and embedded software.

1. 54 digitalPLANT business+engineering 5/2016
IBM offers it, Kaeser Kompressoren does it
too — products today have a higher
service component than in previous decades
and the upcoming ‘Industry 4.0’ revolution
will push this trend to new record-breaking
levels. In the management literature, this is
referred to as ‘the servitisation of products’
expressing the fact that the old dichotomy of
product and service has been replaced by a
service-product continuum (1). Let us take
two interesting examples of how discrete
products can be ‘translated’ into services, at
least enriched by connected capabilities.
IBM treats its business as a service business.
Although it still makes computers, it regards
the physical goods as a small part of its
portfolio. They have found that the price
elasticity of demand for ‘business solutions’
is much less than for hardware.IBM stemmed
the shift to a subscription pricing model —
rather than receiving a single payment for a
piece of fabricated equipment, the firm is
digitalPLANT
now receiving a steady stream of revenue for
ongoing contracts.
The other example is SAP’s client Kaeser
Kompressoren.The German-based manufac-
turer of compressed air and vacuum prod-
ucts offers with SigmaAir Utility an operator
model that secures the reliable supply of
compressed air tailored to customer
needs — practically at the push of a button:
The customer just provides a few square
metres of floor space, and Kaeser takes care
Beyond Product Lifecycle
Management, enabling
‘Live Engineering’
The servitisation of products is
one of the hidden megatrends in
our economy. And, since service
offerings always require a com-
prehensive understanding of the
clients’ value perception, it has
a deep impact on the product
development process, for in-
stance, in terms of integrating
feedback loops. Read here about
how SAP supports this from an
engineering perspective.
Product Lifecycle Management (PLM)
Logistics Execution (LE)
Materials Management (MM)
Quality Management (QM)
Sales and Distribution (SD)
Finance
Logistics General (LO)
Plant Maintenance (PM) Customer Service (CS)
Production Planning & Control (PP) Project System (PS)
Environment, Health & Safety (EHS)
Others: Global Trade Management, Compensation
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Human Resources
Included Modules Included Industries*
Core industries
Chemicals
Life Sciences
Wholesale
High Tech
Mining
Industrial Machinery &
Components
Core Industries adding
features and processes*
Automotive
IM&C
A&D
Mill Products
*
e
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Modules and addressed industries of S/4 Hana
Sources:SAP2016
Alert comes from
Digital Twins via AIN
Service Engineer
(OEM)
!!!
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DigitalTwins
Analyze
aggregated IOT
Data
Track, Trace &
Adjust
Requirements
Redesign
Mechanics,
Electronics,
Software
Check
Compatibility
Collaborate
R&D Engineer
Release updated
SW Version to AIN
Operator
Fix for Installed Base
zZZ
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UpdatedDigitalTwins
Create Digital
Twins in AIN
Release Changes to
Manufacturing
Update Digital Twin
Model in AIN
New Product Version
+
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Connect-product
scenario based
on SAP AIN and
Kaeser compressors
(see also text)

2. digitalPLANT business+engineering 5/2016 55
CONNECTED PRODUCTS
of the rest.Instead of investing in a complete
compressed air infrastructure, the client just
pays for the compressed air actually used.The
OEM offers a shift from fixed costs to
variable ones — and everything is provided
from a single source: From the analysis of
compressed air needs to the hardware infra-
structure and the complete operation
service.
New perspective on PLM
“Now we are living in a world where we are
streaming information back from the asset.
We should know what to do based on this
information on quality, failure, reliability, and
other details to redesign the product.That
brings in a new paradigm compared to the
sequential-
executed model of the product development
process we know from the past,” says our in-
terview partner,John McNiff,GlobalVice Pre-
sident Solutions for SAP’s Line of Business
R & D / Engineering, adding that synchroni-
sation with the asset network and mainten-
ance or overhaul processes should be
included in the considerations.This leads to
an extension of our current understanding of
Product Lifecycle Management as a whole:
I Product data management with the
domains Mechanical, Electrical, Software,
and services delivered through functional
and economic performance
I Lifecycle management until decommis-
sioning at the customer site, with
consideration of closed loops, e.g. based
on feedback from field operations or
embodiment of the client
I Management in terms of collaboration
with customers, partners — and even
competitors.
An example from the automotive industry
may bring additional light in the extended
scope of a ‘PLM Next’: It is not only about
the management of all engineering data and
information generated in the field, it is also
about getting access to the driver himself.
“Based on that intelligence, you can create
new services, making your products more
unique for this particular person,” Mr McNiff
emphasises.
Digital Twin for Business
Closed-loop engineering enables instant
insights into the value of the delivered pro-
duct.Values lie in its functional aspects and
behaviour alone or the delivered product
acts as a platform creating commercial value.
In the latter case, Mr McNiff recommends a
closer look at SAP Asset Intelligence
Network (AIN) with its capability not only
to enable a technical, but also a business col-
laboration between producer, owner/
operator and other stakeholders along the
value chain based on a ‘Digital Twin for
Business’ approach as he expresses it,quoting
the aforementioned Kaeser Kompressoren
as a testimonial for the benefits of connected
products: Let us assume that some of those
compressors are working at a location in the
high mountains, and one of them is losing
pressure capability and, as a consequence, a
danger of overheating of the engine occurs.
An alert from the ‘Digital Twin’ via SAP AIN
is received by the service technician of the
OEM. He transmits his preliminary analyses
to Kaeser’s R & D team.Afterwards a closed
collaboration loop is initiated to analyse ag-
gregated (IoT) data; track, trace, and adjust
requirements; redesign (mechanics, elec-
tronics, software) and check compatibility.
Then an updated software version is released
to SAP AIN as a bug fix for the installations
based in the field.A change management pro-
cess is also initiated for a new product ver-
sion.And by the way, this is reality!
Digital product innovation platform
Walldorf-based software giant is offering a
so-called Digital Product Innovation Platform,
exactly to extend PLM to the new
dimensions that accompany Industry 4.0 and
to enable ‘live engineering’, as Mr McNiff ex-
presses it.
The well-known pillars of that platform are
Innovation Management (management of
ideas right through to market success),
Engineering Control Center (authoring
tool integration and interlink between design
and fabrication), Product Lifecycle
Costing (cost management of configured
products), Enterprise Product Engi-
neering (collaboration capability for
change/product structure management and
context sensitive analytics).The seamless in-
tegration of product-related data with
business data is ensured by the S4/Hana
business suite in a way not possible prior to
the adoption of the Hana in-memory
platform.The current release of which,16.10,
has now been simplified to a major extent
compared to the predecessor 15.11, and
facilitates a breakdown of the traditional
system silos across the enterprise.
At the end of our discussion,Mr McNiff gave
us some insights into SAP’s roadmap for PLM,
for instance, to better support Systems
Engineering. Here some general highlights:
I Embedded software maintained in the
development product structure
I Integration of (embedded) software
development tools
I Handover of software code and compiler
information to manufacturing and service
I Compatibility management between
different disciplines.
Already available are mechanisms based on
the SAP Engineering Control Center tech-
nology to synchronise the results of the
software development with M/EBOM data,
for reasons of configuration management and
revision control (2). The big question for
embedded software, however, is how to deal
with data created in the work-in-progress of
software engineering. Here, mechanisms are
necessary to orchestrate system modelling
efforts and functional-driven requirements
management to realise ‘smart’ connected
products.
Mr McNiff: “Systems Engineering becomes
mission-critical and the overall management
of requirements is a key element from an
engineering perspective.” Moreover, it is
crucial to link engineering data with product
costing and project management issues.“This
concept is not really new but now (with
HANA), you have the potential to connect
and analyse everything. For instance, you can
check in detail what is the profitability of a
special product line. We are now thinking
about how to execute business processes in
a much more real-time manner,” the global
vice president concludes. (bv)
INFOCORNER
(1) en.wikipedia.org/wiki/Service_economy
(2) ECONOMIC ENG. 4/2016, p. 40, Göller
Publishing, Baden-Baden/Germany
For further information, visit
www.sap.com
John McNiff
Picture:private