German air compressor firm Kaeser Kompressoren is an example of a business using IoT to not just improve existing processes but also create new business models. By embedding sensors into its kit it has radically changed its business model while making the most efficient use of its inventory and improving service for existing customers.
Kaeser was founded in 1919 and employs 5,500 staff in Germany but sells kit in more than 100 countries. It provides compressed air equipment, complete systems and services in vertical markets including oil and gas, transport, defence and construction.
Compressed air quite literally powers factories and manufacturing plants. Failures mean downtime for entire production lines with ripple effects up and down the supply chain. So Kaeser was quick to identify the potential of Internet of Things sensors to predict failures and prevent downtime.
Kaeser worked with HPE to add IoT sensors to its compressors and other equipment. These collect temperature, pressure, humidity and vibration data from equipment whenever it is in use. This is then transmitted in real time to systems which instantly analyses it in order to predict which components are at risk of failure. This means Kaeser is able to identify and replace potentially faulty parts during scheduled maintenance visits.
The business benefits were impressive. Kaeser cut downtime for compressors by almost 60 per cent which massively increased customer satisfaction as well as benefiting the bottom line. For Kaeser this meant a $10m cut in break-fix costs per year, money which can be invested in further innovation and improving products and services.
IoT has also brought savings to Kaeser customers: a paint producer cut costs by €30,000 a year. A building supplies manufacturer managed to cut energy use for compressed air systems by almost a third – 28.5 per cent.
Beyond the bottom line the IoT project has created a data pool which gives Kaeser valuable insight into its own product design which should help further reduce failure rates in future. This virtuous circle should feedback to create constant improvement in product and component design.
Falko Lameter, CIO, Kaeser Kompressoren, said in a statement: “We’ve gained faster, deeper, real-time insight, and better control of our global supply chain. As a result, we can optimize customer satisfaction by continuously improving the availability and efficiency of our compressed air equipment.”
Kaeser took the opportunity to upgrade to SAP HANA running on HPE ConvergedSystem 900 and Superdome X servers. It migrated its SAP Business Suite software to five HPE AppSystems for SAP HANA, to orchestrate new business processes
across the organization, improve supply chain management, and harness the power of big data analytics.
The project not only allowed the company to improve how it runs its existing business and improve future design by providing business insight based on real time data.
The project has also allowed Kaeser to change the way it offers its services. Instead of just proving hardware and associated maintenance services Kaeser can now offer businesses ‘air as a service’ – shifting costs from capital expenditure to operating expenditure.
There is a short video on the project here: https://www.youtube.com/watch?v=9oyInxA5vQ8 and an HPE blog here: https://community.hpe.com/t5/Servers-The-Right-Compute/The-Internet-of-Things-Predicts-the-Future-Using-the-IoT-To/ba-p/6842211?profile.language=en#.WQr3z8a1vIU