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Servitization in manufacturing

Alex Bulat
August 5, 2020

In continuation with our blog on transforming your business model via servitization with the renewable enterprise, in this blog we set our sights on the manufacturing sector. We provide insights into what the future-proof, integrated architecture for manufacturing companies would include with the renewable enterprise built on SAP and Microsoft Azure.

The manufacturing sector is currently undergoing the fourth industrial revolution, also called Industry 4.0, which is characterized by:

  • More automation
  • Connecting the physical to the digital via industrial IoT, enabling smart manufacturing
  • Personalization of products
  • Closed-loop data models for the digital supply chain.

Industry 4.0 is all about capturing the right information from the right points in your value chain at the right time to convert into actionable insights. That helps in continuous innovation and transformation of business models and processes. Manufacturing companies need to embark on this journey as soon as possible to ensure they flourish in the new digital world. This reminds me of the quote by Klaus Schwab, founder and executive chairman, World Economic Forum:

“In the new world, its not the big fish which eats the small fish, it’s the fast fish which eats the slow fish.”

To be the fast fish, you first need the right platform to build agility and flexibility into your business. A platform that is capable of:

  • Connecting the OT to the IT
  • Gathering information from across the value chain
  • Converting information into actionable insights
  • Rolling out new solutions (technology agnostic) at an accelerated pace.

The platforms operated by organizations currently are not equipped with these capabilities.  They are distributed systems across the value chain with disparate data sets catering to specific business processes that do not talk to each other. This is a major disadvantage as it leads to opaqueness in operations leading to inefficiencies and acts as a deterrent to innovation and transformation.

So, the first step is building the right platform and, based on our experience with leading manufacturers around the world, we believe that a platform built on Azure with SAP S/4HANA  as the digital core is the right platform to guide you safely in your journey to Industry 4.0.SAP S/4HANA .

Our renewable enterprise architecture is perfectly suited to integrate disparate data sets under a stable system of records in its core. The data lake hosted on Azure becomes the right platform for mining actionable insights and improving operational efficiencies. The second (microservices layer) and third pillar (third-party solutions) of the renewable enterprise plays a vital role in building system of differentiations and innovation on the cloud without disturbing the core.

To summarize, I leave you with a bird’s-eye view on the benefits that the renewable enterprise built on SAP and Microsoft Azure can bring to the table:

This blog has been written by Amith Kulangarth and co-written by Alex Bulat. Please reach out to us both if would like to discuss how to transform your business model via servitization with the renewable enterprise.

Transform your business by running SAP S/4HANA® on Microsoft Azure and set up a digital core that allows you to become a “renewable enterprise”. Learn more: