SAP - Accelerating our success together by unleashing the power of automated manufacturing

Accelerating our success together by unleashing the power of automated manufacturing with business AI

Accelerating our success together by unleashing the power of automated manufacturing with business AI

We welcome senior executives from the SAP Digital Supply Chain organisation in the Middle and Eastern Europe (MEE) region to dive into the empowering and energising potential of digital transformation, the cloud and fully automated manufacturing. Read on for a sneak peek of SAP’s showcase at HANNOVER MESSE 2024, along with the latest and greatest insights into how SAP is the provider and partner to help businesses.

With 24,000 partner companies around the world, SAP customers generate 87% of total global commerce. SAP’s goal is to be the number one enterprise application and business artificial intelligence (business AI) company, powered by its leading platform and 107,000 employees in 156 countries.

oining us today are key members of the SAP team supporting this effort: Dr. Johannes Tulusan, Chief GTM & Customer Advisory Officer, Digital Supply Chain (MEE); Ralf Lehmann, Vice President, Global Head of Industry 4.0; and Dominik Metzger, Global Head of Software Engineering –Digital Supply Chain.

Launching our conversation, we’ll be exploring the key trends and opportunities for digital supply chain actors in 2024. Then we learn more about the potential of SAP’s public and private cloud ERP solutions, the importance of moving towards fully automated digitalised manufacturing and the power of

“To bring out the best for our customers, manufacturing and supply chains must be more agile, more collaborative and more integrated”

Dr Johannes Tulusan

business AI. Our guests will hint at the groundbreaking technology SAP will be showcasing at the HANNOVER MESSE later in April 2024, before wrapping up our conversation by looking ahead to the future of SAP’s digital supply chain strategy.

State of Play

As we enter 2024, digital supply chain professionals are still grappling with the demands of post-COVID resiliency and must come to terms with digital transformation to thrive. Resilient supply chain management to address unforeseen events remains imperative and technologies like artificial intelligence (AI), blockchain, data analytics and the Internet of

Things (IoT) are here to stay as key tools toward that end. Sustainability is the ever-present elephant in the room and businesses envision the need for end-to-end transparency throughout the whole supply chain.

These discussions are fundamental, but they are not entirely new. So what is the current state of affairs now we’ve flipped the calendar from 2023 to 2024? And how is SAP adapting to ongoing changes to empower its customers –helping them expand, digitalise and scale their businesses?

“In 2024, there are four major areas in the supply chain which have entered the horizon or evolved for companies in many industries,” begins Johannes. “First, there’s a need for increased automation and agility in supply chain processes. Labour shortages in highly skilled roles plague many businesses, for example in the manufacturing industry. Experts who have been working at companies for many years are starting to retire. The resulting knowledge gap can be closed by increasing the role of automation. Here, SAP can help customers automate and integrate the production, logistics and maintenance areas of their operations.”

Weighing in, Ralf emphasises that promoting automation does not mean

“One of the goals for enterprises is leveraging and conserving the skills of experts while building institutional knowledge, but simultaneously bringing younger workers up to speed quickly so they can operate proficiently at a high level in less time”

Ralf Lehmann, Vice President, Global Head of Industry 4.0

removing humans from processes or jobs. Instead, it is about optimising the effectiveness and efficiency of people working alongside machines, together. Moreover, he insists automation can help employees refocus on the more complex tasks that require human ingenuity.

“One of the goals for enterprises is leveraging and conserving the skills of experts while building institutional knowledge, but simultaneously bringing younger workers up to speed quickly so they can operate proficiently at a high level in less time,” says Ralf. “Automation is a highly valuable resource in this pursuit. In recent years, agility in the supply chain has become even more important for our customers. They typically have a dynamic mix of products they're assembling on multiple lines. Businesses need to look from an enterprise performance perspective to identify an efficient production strategy and embrace agile working practices.”

“The second important topic for 2024 is visibility and

transparency within and across the company,” notes Johannes. “Endto-end processes from enterprise resource planning (ERP) to supply chain are a key requirement for digital business. Equally critical is the ability to interact with trading partners in a business network and share relevant data – and this is fast becoming a reality.”

“Third – and this has been an important topic in recent years – is striving for sustainability,” adds Johannes. “Many stakeholders discuss this topic at length, but implementing it is becoming increasingly urgent, in light of the increasing number of new

policies and regulations regarding the issue. We are at the stage of moving away from hopeful thinking to making sustainability a reality for every business, but there is still more work to be done –an endeavour which SAP is committed to supporting its customers in.”

“The final hot topic on everyone’s lips is AI, and in particular generative AI,” continues Johannes. “Specifically at SAP, we are enriching all our applications with business AI capabilities to help our customers autonomously enhance their business processes or to optimise business outcomes.”

Transformation Trio: Cloud, Automation and AI

In light of these emerging and evolving trends, what technologies, software solutions, and strategies do Johannes, Dominik and Ralf believe are fundamental for enabling supply chain resilience in 2024? They all agree that it starts with cloud-based solutions, gravitates around fully digitalised, automated manufacturing and weaves in business AI.

Cloud

Elaborating on the importance of the cloud, Johannes stresses that innovation in the cloud is easier than the alternatives and that staying with onpremise systems holds companies back.

“The RISE with SAP offering and the GROW with SAP offering help our customers who have on-premise ERP move into the cloud,” begins Johannes. “Maintaining an ERP system in its own

local data centre becomes quite cumbersome and deploying new innovations like artificial intelligence is only possible in the cloud environment. In 2023, there was a breakthrough in the MEE region where many customers decided to bring their entire business software landscape into the cloud.”

So what is the difference between RISE with SAP and GROW with SAP?

“RISE with SAP is essentially for our customers with existing SAP ERP software landscapes and who want to keep most of their customisations but merge and transform into the cloud,” says Johannes. “GROW with SAP is our ERP solution to encourage customers in what we call ‘greenfield’ approach, where customers want to start afresh, to move all processing into SAP S/4HANA Cloud, public edition. Customers also apply hybrid approaches with RISE with SAP and GROW with SAP, transitioning to the cloud with their existing ERP landscape while at the same time implementing SAP S/4HANA Cloud, public edition for new sites.”

“In relevant industries, digital supply chain professionals have a strong stake in the RISE with SAP and GROW with SAP transformations, since certain key functions they oversee, such as manufacturing, production planning, logistics and product lifecycle management are already embedded within the ERP software solutions from SAP. A resilient supply chain has become a keystone function of any

“The first purpose of AI is to empower business users to handle disruptions by delivering all the critical information for rapid decision right to their fingertips”

Dominik Metzger, Global Head of Software Engineering – Digital Supply Chain

business, since it goes hand in hand with growth and transformation.

“Within the next month, SAP plans to announce the offering of supply-chain-specific RISE with SAP packages for our customers, to help them identify the most suitable supply chain solutions alongside their cloud ERP transformation.”

Fully Automated, Digitalised Modular Manufacturing

Ralf adds the agility and scalability of RISE with and GROW with SAP make them ideal solutions for new innovations, particularly in production.

“Clearly supply chain cloud solutions have become much more important in recent years in our MEE region,” reaffirms Johannes. “Before, for instance, we saw digitalisation and production as separate silos, but now we see an amazing trend toward adoption of the scalability of cloud in the digital supply chain and the manufacturing area in tandem, breaking down the silos. The power of cloud solutions lies in their agility in this rapidly evolving context.”

Ralf goes even one further step ahead, by highlighting the importance of fully automated and digitalised modular manufacturing as the future

of production. As the technologies facilitating production evolve around end-to-end integration – including cloud ERP, digital manufacturing solutions, automated guided vehicles (AGVs), traceability software, AI and business AI – businesses must lean into the trends, driving and bolstering the global economy, adds Ralf.

AI

Johannes recalls how since 2013, when big data became part of his role at SAP, there has been a developmental journey towards AI as we know it today. Back then, it started with handling vast quantities of master data, turned towards looking at prescriptive data then predictive maintenance before arriving at machine learning and emulating data today.

“Now the focus is moving beyond using data analysis to generate predictions to realise the potential of generative AI and business AI, by training algorithms so we can ask for recommendations, not just summaries or forecasts, while also steering the technology towards learning and improving itself,” explains Johannes. “At SAP, we are developing our business AI to apply artificial intelligence in a business industry context. We realise AI is more than just validation or algorithm analysis, it’s about facilitating learning within the system itself and generating insights and suggestions we might never have come up with ourselves. This is incredibly important in all solution areas, not just digital supply chain.”

Dominik insists that for today’s businesses, AI has two main purposes.

“The first purpose of AI is to empower business users to handle disruptions by delivering all the critical information for rapid decision right to their fingertips,” says Dominik. “The second, and let’s consider this a long-term purpose, is to transform supply chains to become near autonomous and selflearning. Near autonomy, as with self-driving cars, means that a vast majority of essential decision-making is automated, and only the most critical disruptions are managed by expert business users. Automation clearly facilitates supply chain optimisation.

“Optimisation is not a new concept in the supply chain arena, and many companies have already optimised supply planning in several ways. They use forecasting for demand planning and machine learning algorithms for predicting demand for spare parts. Machine learning algorithms help with planning transportation routes and choosing suppliers.

“But what is really tough for many companies is to build trust in the system. If a worker has done their job for 20 years on a manual spreadsheet, why should they trust this new digitalised system? And that's really a sweet spot for generative AI. One example is our generative AI assistant Joule, which revolutionises how we interact with SAP business systems, making every touchpoint with the system simpler by just asking to get

tailored results for a business process step. As an end user, once I’m included in the discussion, I have much more faith in my optimised system and its output supported by generative AI capabilities.

“The role that generative AI can play then is to lower these adoption hurdles for users of optimisation and advanced forecasting,” summarises Dominik. “When we look at logistics, we can specifically talk about automation. What’s in the logistics space today can still be a very manual process. For example, in many warehouses and shipping yards of this world, whenever a truck or a container rolls up, someone still needs to check that the paperwork matches the contents, by comparing paper documents in their hand to a screen display. Using generative AI to automate these processes can actually be a game changer.”

Taken together, cloud, automation and AI technologies will revolutionise the future of the digital supply chain – which is why they form crucial components of SAP’s exciting showcase for HANNOVER MESSE 2024.

Hannover Messe 2024

There’s a tangible buzz in the air as we turn our conversation towards the HANNOVER MESSE 2024.

HANNOVER MESSE is the world’s leading industrial trade fair, showcasing cross-industry solutions and interface technologies for the

entire business ecosystem. The aim is to energise sustainable global industry. More than 4,000 companies will be acting as an interconnected industrial ecosystem and attendees from all industries, looking for trusted partners to help them become more resilient and sustainable, are warmly invited to explore SAP’s leading supply chain solutions.

But what can HANNOVER MESSE attendees expect from SAP at the event?

Setting the scene, Johannes shares the theme for SAP’s presence at HANNOVER MESSE: ‘Bring out new manufacturing excellence’.

“Manufacturing is one of the growth engines of the global economy,” begins Johannes. “Successful, innovative manufacturing has a ripple effect across the economy by stimulating growth in related industries.

“Industry 4.0 is about integrating digital and physical worlds, changing the way manufacturers operate, collaborate and engage with customers. Adapting to Industry 4.0 requires a new kind of intelligence –with data at its core – that uncovers new insights, automates operations and optimises decisions.

“To bring out the best for our customers, manufacturing and supply chains must be more agile, more collaborative and more integrated.

Business processes need to be as smart as the products we’re making and the customers we’re selling to.”

Ralf weighs in and adds that today’s manufacturing leaders need to know how to combine data from machines, processes and the full ecosystem to make better, more holistic decisions, adapt to changing market demands and harness new technologies – such as generative AI and machine learning – to design, manufacture, deliver, operate and maintain products more efficiently and sustainably.

Offering a sneak preview of SAP’s showcase on modular manufacturing at HANNOVER MESSE 2024, Ralf describes the company’s demonstration of worker and shop floor orchestration including on-hand AGVs from multiple vendors.

“When we go to HANNOVER MESSE, our approach is unique compared to

other events,” says Ralf. “Our goal is to enable attendees to understand the power of the SAP solutions at a deep level, in a tangible, real-world context. How exactly can SAP solutions help them drive better business results? To answer that question, we showcase a vast range of customer examples and demonstrate in person and in real time how those elements interact with real assets.”

Without spoiling any surprises for the big event, we can say that the SAP showcases at the big event in Hannover covers the manufacturing end-to-end process comprehensively: from designing a product and planning projects, to building, delivering, operating and maintaining them.

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2024 that Johannes, Ralf and Dominik can offer early insights into for our conversation. With all the buzz around fully digitalised modular manufacturing and the role of automation within it, we would be remiss to overlook a full discussion of automated guided vehicles (AGVs).

As it stands in global industry today, AGVs from different manufacturers must run on separate systems in manufacturing and production operations. However, there is growing awareness of the need for interconnectivity and interoperability to support a unified approach to advanced planning, data sharing, visibility and ERP enhancement. And

this is precisely where SAP is going to transform how its customers and partners conceptualise and execute manufacturing and production, with full automation and digitalisation – driven by data, to bring out new manufacturing excellence.

“AGVs perform a crucial support role in logistics, the supply chain and manufacturing operations – to name just a few use cases,” says Ralf. “But the situation today is that each type of AGV needs its own driving arena. Imagine if every type of car needed its own road to drive in – it would be chaos, right? But to bring the metaphor back to AGVs, we are exploring how to

“At HANNOVER MESSE 2024, attendees will see what we’ve achieved: AGVs from three distinct vendors – MiR, Omron and symovo – work simultaneously and safely, in the smallest driving area we could force them into, to prove the concept”

create a new environment where AGVs from all manufacturers can operate interconnectedly in the same environment, without needing separate systems to run them.

“Large companies with multiple production slides and several AGVs in their manufacturing processes need to set up intralogistics from one flow. At the moment, joint orchestration is not possible and we want to change this situation.”

“The first step is to be able to orchestrate the AGVs jointly,” continues Ralf. “The second step – and this is where the true innovation potential lies – is to apply business context to the AGVs and share data seamlessly, throughout the entire manufacturing process, to fully automate the production line. The appetite among our customers for such a revolutionary AGV system is staggering, so we have worked with our partner KINEXON to meet this pressing business need.

“At HANNOVER MESSE 2024, attendees will see what we’ve achieved: AGVs from three distinct vendors – MiR, Omron and symovo – work simultaneously and safely, in the smallest driving area we could force them into, to prove the concept. We co-innovated with KINEXON and the AGV manufacturers to develop hardware-independent fleet management system, running multiple devices orchestrated through a KINEXON solution and integrated with the SAP Digital Manufacturing solution.”

Ralf explains the system: “All the AGVs are controlled from a central layer that can talk to each of the devices within the fleet management system. This capability goes well beyond the requirements of the 5050 standard from the German Automotive Industry Association (VDA from its initials in German), the current industry benchmark for AGV communication.”

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demonstrated at the company’s modular manufacturing showcase at HANNOVER MESSE 2024.

“SAP S/4HANA Cloud is the core digital backbone for discrete manufacturing, and we are demonstrating how SAP Digital Manufacturing integrates with SAP S/4HANA Cloud, public edition running the modular manufacturing showcase,” continues Ralf. “We cannot wait to show attendees this revolutionary seamless integration applying open industry standards and orchestration by KINEXON to enable multivendor AGVs to drive in shared spaces.

“On top of this, we will show attendees how generative business AI and

advanced machine learning will reshape supply chain execution in the way products are designed, planned, manufactured, delivered and maintained. SAP provides the next generation of business applications infused with business AI and empowers manufacturing leaders to leverage unique data assets from manufacturing execution systems, marrying large-scale machine data and ERP data with data from the wider industrial ecosystem to push manufacturing efficiency to the next level.

“We live in a disruptive world these days,” Ralf summarises, “and for most companies, the question is how to best handle and optimise all their flows, infusing every business application and

‘Digital Core For Enterprise Supply Chain’

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Connect with SAP’s experts in digital manufacturing at HANNOVER MESSE 2024, April 22-26 at booth E17 in Hall 15.

Elevating solutions with strategic partnerships

After our whirlwind discussion of the SAP showcase at HANNOVER MESSE 2024, a key topic arises in the conversation. The fundamental importance of strategic partnerships and a robust partner ecosystem stands out. It is for instance, after all, a collaboration between SAP and KINEXON that will transform the AGV solutions currently available on the market.

SAP embraces its prominent position in the global market to invest in, and thereby empower, its partners – benefitting the entire supply chain ecosystem in the process. Here, Johannes, Ralf and Dominik highlight some partners as demonstrative of the power of collaboration: All for One, BearingPoint, Camelot ITLab, Capgemini and proaxia all add tremendous value as SAP partners. For further insights into how these companies collaborate with SAP as partners, explore the spotlights dotted throughout this article.

“All our partners, whether they’re related to supply chain or to SAP more broadly, have always been fundamental to us as

a business,” says Johannes. “But now more than ever we recognise that these strategic alliances will continue to grow in importance as we develop together. We have many different types of partners, from system integrators to software partners. All of them are relevant today and into the future, because we realise within SAP that due to the high demand from our customers, we have to entrust our partners with further responsibilities along the customer value lifecycle.

“One of our fundamental beliefs as a company is we can only expand our expectations and ambitions when we also grow with our partners: together and in all aspects.”

Ralf reiterates the notion of the responsibility SAP embraces towards its partners.

“Since we are a leader in the market, customers expect SAP to talk and engage with our huge ecosystem,” explains Ralf. “By working with an amazing partner ecosystem we can tailor and amplify our solutions for our customers, across industries and lines of business, understanding and then meeting customer needs and helping them thrive in the process.”

Where next?

Looking ahead to the future, Johannes, Ralf and Dominik offer their insights on the direction of digital supply chain strategy at SAP in the coming years.

“First, the future of the digital supply chain strategy at SAP is to embrace business AI and generative AI, with an end goal of improving our supply chain offerings,” says Johannes. “Second, this goes hand in hand with the transformation of ERP into the cloud. Our goal is to show our customers the distinct, industryspecific value proposition of cloud ERP transformation. Third, within our entire design-to-operate solution area the goal is to be the best-inclass solution, offering an end-toend seamless experience. Fourth, an important SAP message for 2024 is ‘Accelerating our success together.’ We are driven by the idea that we can only be successful in concert with the entire SAP ecosystem, including our partners, SAP employees, and customer base. Finally, we will continue to listen to our customers through feedback sessions, so we can continuously improve our offerings in relevant, industry-specific and profound ways.”

Ralf highlights the burgeoning importance of risk management and visibility for customers, while simultaneously encouraging them to consider all external and contextual factors in their operations.

“Of course, we must prioritise our customer’s internal integration with SAP, but we cannot neglect external forces,” notes Ralf. “For instance, with risk management, how can we

help our clients untangle challenges and perceive them in a simple, understandable way? How can we help them consider all the global economic factors that impact their business? Ultimately, how can we wield analytics and the insights it brings to secure the best performance and outcomes for our customers? We expect AI, and specifically business AI, to play a crucial role in these areas in the coming years.”

Dominik believes the future of supply chain is near autonomy, powered by artificial intelligence and a wealth of data.

“For me, this means that the silos in supply chains will continue to converge,” says Dominik. “Because if you have all the data at your fingertips – whether you’re a business expert, supply chain planner, demand planner, logistical dispatcher, service technician or purchaser – having all of this data at your fingertips while running autonomous processes means that teams can converge. I believe this means we can cover much more intelligence and empower our customers to do what they can do best.”

For further information about SAP, visit sap.com.

To meet and connect with SAP at HANNOVER MESSE 2024, April 22-26, at booth E17 in Hall 15 – head on over to the event overview page on their website.

Added Value

Johannes

Johannes embraces being value-driven, compassionate and open-minded during a customer lifetime value journey.

“Ultimately I see this approach as the best way to engage with our customers,” says Johannes. “When we work with customers, we have high ambitions for bringing them the optimal end-to-end solutions for their needs. But we also need to remember they are often embarking on a new journey, which can be intimidating. By being compassionate and openminded as well as value-driven, we foster trust and encourage customers to embrace change.”

Connect with Johannes

Ralf

Ralf emphasises the importance of teamwork and relishes the opportunity to embrace a leadership role at SAP.

“It’s a pleasure to be ‘the captain of the boat’ and guide my team. It’s about navigating new waters and I love this side of my role,” says Ralf. “Working with new companies and new challenges is energising. But you can only reach new destinations with collaboration – internally but also with your partners and customers on board too.”

Connect with Ralf

Dominik

Dominik inspires creativity to address complex business challenges.

“I am deeply passionate about fostering creativity and empowering individuals to unlock their full potential,” says Dominik. “Guiding professionals is not just about providing direction, but also about cultivating an environment where innovation flourishes. Through compassion, collaboration and a commitment to nurturing diverse perspectives, I aim to inspire and lead creative individuals towards meaningful outcomes that push boundaries and drive positive change.”

Connect with Dominik