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How a Traditional Steel Processing Company Reinvents Itself

As a product manager of Internet of Things (IoT), I have worked with many companies that implement IoT to reinvent production, dive into entirely new business models and put the focus on their customer

In this blog, I would like to share with you the fascinating transformation journey at SCHAEFER WERKE. Earlier this month I was honored to visit their headquarters.

The family owned SCHAEFER Group is a traditional steel processing company with a history of more than 80 years. The headquarter is tucked away from highways and set in a low mountain range surrounded by a forest that employees, neighbors and tourists use to bike or hike. The SCHAEFER WERKE product portfolio covers everything from customer steel services to IT server racks, from kegs for beer and other beverages to perforated metal for tractor engine hoods  Outfitted with safety steel toe shoes and ear protection, I entered their production hall to watch the cutting of large steel coils and witnessed the noise and force with which the steels are processed.

For decades, SCHAEFER WERKE has been highly successful manufacturing long-lasting, but ‘exchangeable’ hardware products that require little insight into their customers processes. This changes now with the set-up of their new business model. By embracing Industry 4.0 and setting up a smart container service based on the Internet of Things, SCHAEFER WERKE is undergoing a big change, cultural and operational. The magnitude of change has impressed me deeply.

“The way to get started is to quit talking and start doing”

Michael Wehler, Marketing Director at SCHÄFER WERKE

Starting with vague ideas around a new digital approach, SCHAEFER WERKE went through multiple iterations with internal stakeholders and customers to evaluate their ideas and to identify the way forward: A smart container solution for their customers in the food, beverage and chemical industry that will help them take supply chain operations to the next level.

As a first step, SCHÄFER WERKE looked for a suitable hardware provider to build data loggers which regularly measure values such as fill level, location, pressure, vibration, temperature and viscosity. The loggers are placed on the lid of the intermediate bulk containers (IBC) and can therefore be installed and replaced easily – even on containers produced by other companies. Next, they were looking for a software provider and turned to SAP IoT as an integration provider for their customers’ business processes. This was an important factor to ensure market success.

So how does the new solution bring business value to their customers?

One company SCHAEFER WERKE is working with ensures high quality of the delivered products by checking pressure levels in the containers. What used to be a time-consuming manual process is now available in an instant. In a second use case, the customer defines geo-fences around production areas to identify containers that have already been cleaned. This way the company significantly improves the refilling process and overall efficiency in production

Other companies want to get more transparency into the available stock across containers at a location and trigger replenishment or analyze container data to identify critical situations such as risk of product damage or loss.

“Successful implementation of new business models need not be disruptive.”

Michael Wehler, Marketing Director at SCHÄFER WERKE

Though the situation at each customer is unique, providing data-driven insights and integration into business processes is the basis for SCHÄFER WERKE (now managing their new business area via their spin-off VIZUU – https://www.vizuu.io/) to approach their existing customers with the new smart container solution and help them leverage the full potential of IoT.

Rather than disrupting their existing business, it turns out that there is a mutual reinforcing effect on their traditional business as customers purchase the new digital service along with new IBC containers.

 

 

For more details on SAP IoT and Edge Services as well as more customer examples please visit:

https://www.sap.com/products/intelligent-technologies/iot.html

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