Siemens and SAP announced a very significant partnership last year. My colleague, and occasional podcast guest Richard Howells wrote a nice explainer about the partnership which is also worth checking out, as is this quick video.
The partnership helps organisations accelerate time to value by enabling a digital thread throughout the manufacturing lifecycle, so I invited Joe Bohman Senior Vice President at Siemens' Digital Industries Software and Keith Zobott Global Vice President of Digital Products & Projects at SAP to come on the podcast to talk about it.
We had a great discussion about the partnership. I learned loads, and I hope you do too.
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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)
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The digital thread is a common term that that most of us are familiar with, but in case you're not, it's essentially connecting the dots across these business systems and engineering systems to be able to to share information and do these seamless coexistence of systems to allow that information to be shared. And once you begin to share information across the major functional silos, you can act quicker on accurate information, which ultimately brings a higher quality of product to market faster.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 focussing on the digitisation 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 I have two very special guests with me today. So Joe and Keith, would you like to introduce yourselves? Joe going first?Joe Bohman:
Yeah. Hey, everybody, this is Joe Bohman from Siemens. I am head of Life-cycle Collaboration Software. That means I'm responsible for Team Centre and Polarion. Really looking forward to chatting today.Tom Raftery:
Fantastic. And Keith.Keith Zobott:
Yeah. Hi, everybody. This is Keith Zobott from SAP. I lead our digital products and projects portfolio, in other words, our PLM portfolio. Been involved in product development for over 30 years and and working with Joe on this partnership for most of most of this year. So looking forward to the chat.Tom Raftery:
OK, and I'm glad you mentioned the partnership, Keith, because I didn't. And that's the reason we're here. So there is a partnership now between SAP and Siemens, which was announced earlier this year. Why? Why, why have we got into this partnership? What problems is that solving? And again, I'll ask Joe to go first.Joe Bohman:
Yeah. And so I think really the problem that we're looking at is, you know, customers as they're looking to improve their velocity to market, as they're looking to build the more complex, the more sophisticated products that the market demands. They're looking to go faster and they're looking for all of their solutions to work together in order to deliver products, better products to market faster. And so we have joint customers that are looking to solve this problem. And they've come to us and said, what can we do together to make that happen? And maybe, Keith, you could come about it further.Keith Zobott:
Sure. Absolutely. No, that's a good that's a good high level rationale as to why we we got together and constructed this partnership. I also like to think that we're you know, we're in the midst of answering the question how to how to bridge the chasm between business systems and engineering systems. And since most of my time was spent as a customer, this was a this was a challenge for me for many years. And I know it still exists to be a major challenge for all of our customers today. So essentially, how can our engineers get information from downstream business systems, whether it's part of the supply chain or their manufacturing systems? And then how can some of the downstream owners of data within the supply chain get visibility and information from the engineering systems in the engineering environment, and then to be able to make decisions proactively, which ultimately lead to what Joe was alluding to? And that is decreasing the cycle time, time to market, time to profitability for our customers today.Tom Raftery:
OK, and how do they do that?Keith Zobott:
Yeah, well, I mean, I'll jump in first, Joe, but I mean, we we begin to talk about the digital thread. The digital thread is a common term that that most of us are familiar with. But in case you're not, it's essentially connecting the dots across these business systems and engineering systems to be able to to share information and do these seamless coexistence of systems to allow that information to be shared. And once you begin to share information across the major functional silos, you can act quicker on accurate information, which ultimately brings a higher quality product to market faster. Joe, do you have any thoughts?Joe Bohman:
Yeah, and I really like how you frame that, Keith. And, you know, in my role as the leader of teams and or, you know, I talk to engineering customers every day where, you know, they're working in an environment where they have, you know, I think a fairly good grasp on their engineering systems and their engineering data. But they would really love to be able to be able to speak to some of the information and business systems. And, you know, I think every customer that I talk to, they've done some work to make that that sort of integration possible. But really, they're looking for that next level of visibility, that next level of integration. And really, that's what our partnership is all about is. Is taking that combination of those engineering and business systems to the next level, and that's really where we talk about I think if there was one key word for people to think about, it's this concept of the digital thread. We're very excited about what we're doing around this concept of digital thread and connecting these systems together.Tom Raftery:
So what you're saying is this concept of the digital thread is now being enabled by this partnership that no, everything can be connected together and you can follow that thread from start to finish. Is that it?Keith Zobott:
Exactly. That's that's exactly right. Tom and Joe articulated it well. And, you know, it's always we always get asked the question, well, why is this partnership different? Right. And and the way we respond to that as we talk about these, frankly, multiple digital threads, sometimes I refer to it as a digital cable, if you will, composed of many different digital threads. And as we enter the first phase of this partnership, we're focussed on six specific areas to to build these digital threads across the engineering and business systems. Let me just run through them very quickly at a high level and then, Joe, feel free to jump in. So basically, we're starting at the front end of every product development process, and that is with project and portfolio management, a key necessary part of every every engineering business, every frankly, every business in the world today. Then we we focus on the capabilities around systems, engineering, product configurations, bringing in the supplier collaboration and capability, as well as product visualisation. A lot of people like to say a picture is worth a thousand words. What we know that making decisions based upon visual information is much more effective and efficient. And then finally, the intelligence asset management, which really in my mind begins to close that digital thread concept now feeding information back to the OEM and the engineering organisations around how a product is deployed, how a product is being used, or a particular maintenance procedure that needs to be improved. So these are the six areas that in this phase of the partnership we've started on. Joe. Share your thoughts, please.Joe Bohman:
Yeah, and I just really want to emphasise how excited we are about, you know, I think if we were working on one or two of these digital threads, everyone should be pretty excited. And the fact that we have these six digital threads that we're working on is really very, very exciting and just kind of starting to get into some of those threads that Keith went through. Let's start and talk a little bit about your portfolio and project management and once again, getting back to that theme of, you know, business systems and engineering systems. And so if you're an enterprise and you're envisioning a new product, I mean, obviously you're going to do some business analysis. You're going to try to understand what the market is, what the volumes are that you need to build and so forth know. And that's the sort of work that you're going to do and as SAP and you're going to collect that information. But at some point, you're going to hand that over and you're going to have an engineering group that's now going to have to go and design that product and meet those business needs. And and that's really where we started talking about the digital thread is can we connect the dots between all the business analysis that's done in SAP' with all of the engineering that's being done in Team Centre so that as that product runs through an enterprise, all of those systems can stay in sync and say, for example, some business forecasting changes that can be fed into the engineering process or maybe through the engineering process. You learn some things about how expensive it is to make the product, et cetera, and then connecting that back to the the business systems. And so that's what we're really talking about when we're talking about the digital thread. That's a great example. But that's just one of six. We're working on six digital threats.Tom Raftery:
OK, that's that's impressive. Is there any kind of practical numbers or examples you can speak to to kind of take it out of the realms of the theoretical and move it into the realms of the actual?Joe Bohman:
Yeah, and so I think if I were to try to you know, a key question here is how to quantify what some of these what these gains are. And I think, you know, there are different ways that you can quantify things. I mean, I think probably a pretty interesting way to quantify this is in terms of dollars spent on integration. And if you were to go look at the big SI's out there in the world, who, by the way, are incredibly excited about this partnership, there are literally billions of dollars that are being spent every year on integrating these systems. And so I think being able to kind of get those efficiencies in the systems ultimately are going to save it groups, you know, overall, in aggregate, many billions of dollars.Tom Raftery:
So so we're taking billions of dollars away from the SIs?Joe Bohman:
The Sis are very excited and Keith, maybe you could comment a little bit more about the SIs and why this is such a win for them.Keith Zobott:
Yeah, no, as you as you can imagine, most of the SIs have practises both in SAP and with this Team Centre platform. And, yes, many of them, many of our common customers are asking these assize to build these integrations. And oftentimes these integrations tend to be fairly, I'll just say point to point or data driven types of integrations. And what we're focussed on are integrations that are at the process level so that we can keep information between engineering and business systems in sync. Frankly, whether it's a built in material or as something as fundamental as a change process. So when you focus on the dollars associated with a bill of material that gets handed off to the Supply chain that is no longer synchronised with the original engineering building material, you can imagine just just from that standpoint, the amount of scrap and rework or product recalls that occur when improper building materials are shipped to customers, whether it's an aircraft engine or automobile assemblies or even in appliances, it happens across the board. So not only within the integration area of savings, but also in the products, specifically the area of savings around warranties and product recalls through this partnership, I think are just a couple examples of where we see significant benefits for both our customers.Tom Raftery:
OK? Tremendous. Are there any particular industries that will benefit from this or is it across the board, do you think?Keith Zobott:
Yeah, that's a good let me start, Joe, and then please chime in. I mean, we've talked about different industries that would benefit from this. And frankly, we're focussed on what we refer to as discrete manufacturers. Right. And in excuse me, in SAP, there's really four big domains within the discrete manufacturers. There's aerospace and defence, industrial machinery and components, tech and one other one that escapes me at the moment and automotive. Yes, of course. So we're really it's really focussed on the discrete manufacturers in this phase of the partnership. Joe any any thoughts on your side?Joe Bohman:
Yeah, and I think it's a great question about industry. And I think both of both companies, as SAP and Siemens, are very focussed on looking at things through the lens of an industrial focus, because we believe really to solve or to help solve our customers problems, you have to look at it that way. And the fact that pretty much every every industry in discrete manufacturing that we can think of is addressed by the partnership is just indicative of kind of how fundamental the topics are that we're talking about. So we're not talking about topics that are on the periphery of what an enterprise might be doing. We're talking about topics that are really at the core when you really talk about any kind of industrial enterprise. Keith was talking a little bit about the material. And look, I mean, you really can't build a product. You can't deliver a product to market without managing your material. And the work we're doing together, connecting the build material between teams, enter and as SAP is really fundamental. And we have so many joint customers that are working on this challenge of how to flow of material through the systems. And so that's the fact that we're working on that and we're working on fundamental problems as why. The answer to your question about industries is we're really focussed on every industry, everybody that makes stuff pretty broad.Tom Raftery:
At the start of this announcement, there was a lot of confusion about PLM and different roles of different companies. Is that something that you guys want to clarify now?Keith Zobott:
Sure. Yeah, I can I can absolutely start with that. Yet there was some confusion with some of our customers today and frankly, some concerns. We are committed, I think both companies have clearly stated we're committed to the success of our install base customers. We're not walking away from any of those solutions. We're going to make sure that all all of the products that are used today are maintain the support that that's required. And we're looking at ways we can, frankly, optimise the portfolio overall. And this is going to take a significant amount of time, frankly, on both sides. But we want to do is is really provide both our customer bases with a unique set of optimised capabilities for their particular set of requirements. And Joe any thoughts on your side?Joe Bohman:
Yeah, I mean, I think that this is really a great question where you talk about this this word PLM, which is a big word. Right. And you say, OK, you know, we've got as SAP. Peplum team, Senator PLM, how do these fit together, right, and this is where I go back to once again, if there was one word that the listener should take away from this session, is this this digital threat? And really the point of the digital thread is that we're looking at our systems in a way to to stitch them together. So we took you know, we talked about some examples from project management and configuration and bomb. But let's take an example from systems engineering. You know, an SAP, there's quite a bit within SAP and there's quite a bit of capability around systems engineering. And of course, this is the concept that, you know, as products get more and more software, more and more mechatronics, this need to address this concept of systems, of systems and systems. Engineering is becoming so important. And so within that systems engineering digital thread, we're connecting the dots between the SAP, PLM systems, engineering capability and what we have in team centre. And so we're able to fit these two pieces together in such a way that there have a lot of a good fit and they're complementary. And so I think that's a good example of, you know, what we're doing is I think people should look at through the lens of those digital threads, because that's really what it's all about, is making these pieces fit together.Tom Raftery:
OK, and for customers of Siemens, or customers of SAP, is this something that will benefit them if they're customers of both organisations or do they I mean, do they have to be customers of both organisations for this to be a benefit or how does that work?Joe Bohman:
Yeah, I'll just say that this works. If you're a customer of SAP, I think it works in any dimension. Obviously, the the the benefits that we're talking about with the digital thread come when you have both teams Centre and as SAP and when you have both of those systems, that's where really these digital threads come into play. Now, if you're a customer that has a and you don't have team centre, if you start using teams in or obviously you would get those benefits. And conversely, if you're a team centre customer that's not using as SAP, you start using as SAP, you get those benefits. And if you're a customer that's using both and we have many, many customers that are using both, then you would get the benefits that way as well.Keith Zobott:
Yeah., Joe that's really well stated. Let me also add let me go back to the fundamental question as to why we why we form this partnership. Right. And that really comes back to answering your question, Tom. So there are there are customers we've already worked with who have both who have either solution. And really what SAP brings to the table in this partnership is what I call the breadth of product development. So breadth across what we refer to at SAP is the intelligent enterprise, which includes some of our other solutions, like Ariba, the Ariba Supply chain Network and Qualtrics. And so as part of what siemens brings to the table is really this depth of product development. And so when you when you combine the capabilities around Polarion and and and the Foundation Team Centre Foundation platform for doing CAD integrations, now you're bringing to bear for these customers whether they have both solutions or just one, that combination of the breadth of product development and the richness within the engineering organisation together, which builds your digital thread.Tom Raftery:
I mean, we've been talking a lot about the digital thread. And I was I was intrigued by a mention at the very start there where you talked about getting data from devices that are out in the field and being able to feed it back. And this is something we've talked about for quite a while and on several of these podcasts, taking data from devices in the field and feeding it back to R&D or for billing purposes or whatever. Can you talk a little bit about how the digital thread is enabling that through this partnership?Joe Bohman:
Yeah, that's really a great question. And this is an area of tremendous growth. We see more and more companies with Iot where they're very interested in all of getting that intelligence that really that it's a really valuable asset, all that intelligence coming from all the sensors on products in the field and saying, OK, what can we really do with is an enterprise to make our products better? And one of the six digital threads we have is around intelligent asset management. And so, you know, that digital thread is all about getting that Iot data, using the SAP' assets in this area and then bringing that data back into both business processes as well as engineering processes. So you can close the loop and you can analyse that data, take it back into engineering, make the products better based on what you're actually finding in the field.Keith Zobott:
Yeah, no, that's a great answer, Joe, and I always like to be a bit pragmatic about these types of answers. And when I think about this capability, I think about what the airline industry likes. It calls DNC's, right? Delays and cancellations. And these delays and cancellations occur many times because of unscheduled downtime, whether it's ground support equipment or whether it's the actual aircraft assembly and making sure that your maintenance procedures are up to date and that accurate information is being fed into the appropriate systems to keep aircraft available for these airlines today. So all of this really gets very pragmatic for each one of us who, well, frankly, used to do some fly and and will in the future, no doubt. But but it's things like that that that affect every one of us today in this in this maintenance process.Tom Raftery:
OK, we've gone over the 20 minute mark at this point. Is there anything I haven't asked that you think I should have any points we've not touched on that you think are important for people to be aware of.Joe Bohman:
I'll throw in one, which is where are we going next? I think we've announced some pretty exciting things. We've talked about the digital thread, the six digital threads that we're working on together about what what's next. And I think there are some pretty exciting topics on the horizon. We can talk about cloud and we're talking together about cloud offering with teams interacts. And I think cloud is always for everyone a pretty exciting and interesting topic. And then I think deepening some of the work that we're doing around the intelligence asset management are both things that are on the horizon that I would say are very, very important to think about and talk about.Tom Raftery:
Very cool. That sounds very exciting. That's another episode of the podcast coming up.Joe Bohman:
A small topic of cloud.Keith Zobott:
You know, I think I think Joe really nailed that the future is cloud. And many of our customers today, because of the nature of the processes and the data are very let's just say on prem based. Right. But we know that their desire to move to cloud for all the reasons that we're aware of in terms in terms of configurability and support and maintenance of the systems, cloud is the future. And how we bring our systems together in that cloud infrastructure is going to be incredibly important. And I'll also say, as we as we've been working together closely with Siemens, we begin to learn more about each other's capabilities. And frankly, as we work with our partners, whether their size or even our customers, they're actually bringing other ideas in ways that SAP and Siemens can collaborate and frankly, in areas that we maybe never thought of yet. And so we anticipate some new things coming on the horizon in the future as a result of the next phases of the partnership.Tom Raftery:
Oh, that sounds interesting, excellent.Keith Zobott:
It's a teaser, a teaser.Tom Raftery:
OK, if people want to know more about Keith or about Joe or about the topic, the partnership that we talked about on the podcast today or anything else, where would you have me direct them?Joe Bohman:
Yeah. Hey, this is Joe. And if everyone could go to blogs, dot, S.W., dot Siemens, dot com slash teamcentre, you can learn all about it.Tom Raftery:
Very similar blogs dot SAP dotcom as well. I think you can find many information, many blogs about the partnership today. Also feel free to hit me up on LinkedIn. I'm out there. Keith dot Zobott at SAP dot com as well. So be glad to answer any additional questions that might come up and look forward to the conversations.Tom Raftery:
Fantastic. Fantastic. Gentlemen, that's been really great. Thanks again for coming on the show today.Joe Bohman:
Thanks for having us.Keith Zobott:
Yeah, thank you, Tom. Really appreciate the time.Tom Raftery:
OK, we've come to the end of the show, thanks, everyone, for listening. If you'd like to know more about digital supply chain to head on over to SAP dot com slash digital supply chain or or simply drop me an email to Tom Dot Raftery at SAP dot com if you'd like to show, please don't forget to subscribe to it on 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.