Digital factory-as-a-service: The fast lane to digital transformation

As digital transformation reshapes North America’s automotive industry, some companies may be challenged by the resources and effort required to build and operate the digital factory. The solution? Digital factory-as-a-service.

In the digital factory, the barriers between functions and processes are broken down and replaced by an integrated digital operating and control environment in which automotive companies’ ERP, MES, CRM and other systems communicate seamlessly across the enterprise and the supply chain, typically via the cloud. Connecting the top floor to the shop floor offers companies many advantages: more transparency, optimized production, improved operations, lower costs, higher quality, less downtime, fewer bottlenecks, and a better customers experience.

Building and operating a digital factory can be challenging. The applications and interfaces that underpin the digital factory are continually evolving and improving, and companies’ IT teams need to ensure key business and production processes continue to function smoothly. This is where many automotive companies run into problems—because their IT teams don’t have enough people who understand the digital factory’s cloud-based IT and OT environment and who have the expertise needed to ensure systems run reliably and securely.

Ultimately, implementing a digital factory is an ongoing commitment. For many automotive companies, it’s an investment they may be unwilling or unable to take on based on years of technical debt and poorly-document legacy manufacturing systems, often written by former employees who have since retired (or have passed away). Companies are left struggling for easy modernization strategies, often relegated to new plants which also come with unique capital expense and risk.

And that’s where digital-factory-as-a-service (DFaaS) comes in.

DFaaS defined

DFaaS enables companies to access the benefits of digital transformation across their enterprise quickly and cost-effectively. DFaaS provides a company with the kind of integrated suite of digital factory services and end-to-end processes they’d have with a traditional implementation—without the challenges of implementing and maintaining it themselves.

Instead, DFaaS is provided and operated on the company’s behalf by an external service provider via cloud-based platforms. The service provider ensures all applications and interfaces are up-to-date and running smoothly and securely, freeing the company’s own IT teams for other, more value-added work. This value-added work can also include differentiating “outside of the core” allowing for a “clean core” manufacturing experience where maintenance is made simple and economical as all enhancements are made additive to the operating system, not within in.

DFaaS enables automotive companies to tailor their digital factory solution to their unique needs—even as those needs evolve. The cost of each individually configured DFaaS package is readily calculated and billed monthly; companies pay for the services they use, not functionality they don’t need. It’s a “no surprises” approach to digital transformation.

The advantages of DFaaS

• Speed to implementation – Because DFaaS solutions are cloud-based, they can be implemented very quickly—with new features “switched on” as companies’ needs grow and change.

• Access to best-practice processes – With DFaaS, companies can adopt industry-leading best practices for the vast majority of their business processes (up to 80% of processes, in our experience) and focus on customizing only processes that deliver real competitive advantage while keeping a “clean core.”

• Always up to date – DFaaS service providers ensure systems and applications are patched and updated so companies’ IT teams don’t have to, allowing them to differentiate their operating models to provide areas of competitive advantage (the company’s “secret sauce” processes and methods).

• Cost savings – With DFaaS, companies don’t need to incur the costs related to on-premises data centres—or additional IT staff. • Improved transparency – Connecting the top floor to the shop floor provides companies with a clear view into all factory-wide processes, enabling managers to make better, more informed decisions.

• Better synergies – Digitally mapping processes across the entire value chain can reveal potential synergies between departments and functions that could help improve productivity.

• Higher quality – Transparent, traceable production processes make it easier to quickly identify and fix inefficient processes, improving product quality and reducing rejects.

• Greater efficiency – Electronic worker guidance and largely paperless production enable real-time data exchange and automation of business and production processes, and elimination of redundant processes.

It’s vital to choose the right DFaaS partner

DFaaS’s flexibility is one of its major strengths, because there’s no “one size fits all” approach to building and operating a digital factory. Automotive companies need to select an implementation partner with the skills needed to curate a package of services tailored to their precise requirements and ambitions. It’s imperative that prospective partners understand the automotive industry itself, as well as industry-wide Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) solutions, such as SAP’s Digital Manufacturing (DM) and SAP’s core ERP system, known as S/4HANA.

In many cases, a company has already digitized some portion of their business or production process and doesn’t need a full DFaaS solution, but a selection of DFaaS services can be integrated with the existing IT landscape and close remaining gaps. Examples include a central IIoT platform, integration software that enables systems to communicate smoothly, or a configurable app for mobile maintenance. Applications such as these can often be co-developed by the company and its partner, creating a truly unique, diferentiated DFaaS package that meets current needs, strengthens competitive advantage, and lays the groundwork for further innovation.

Flexible and customizable: DFaaS packages

One of DFaaS’s major advantages is its flexibility. A DFaaS service provider can draw on a variety of individual elements to assemble package of services tailored to an automotive company’s needs and requirements. These elements include:

• Software subscriptions (licences) – There’s a lot to consider when it comes to licencing the software that goes into a DFaaS solution, including product conversion, contract conversion, and cloud extension policy. These licence fees can be included in DFaaS package fee, simplifying matters greatly.

• Individual software solutions: The cloud is highly flexible, but it’s also based on highly standardized processes. At Syntax, we’ve developed extensions and apps as part of our DFaaS solution to provide companies with helpful, customized functionality that’s still cloud-compatible.

• Management of applications and cloud services: Application management is a key component of many DFaaS solutions. An industry-specific Application Management Services (AMS) offering enables external service providers to manage a company’s DFaaS operations and ensure all IT systems and cloud services function smoothly. AMS typically includes support for software updates and related testing, documentation updates, and advice on new features or innovations.

• Retrofitting: Building a digital factory doesn’t necessarily require automotive companies to invest in completely new machinery. The right service provider can retrofit older systems in a targeted manner so that they deliver relevant production data to other systems.

Case study: Smart Press Shop puts DFaaS into action

Smart Press Shop is a German autobody parts producer and joint venture of Schuler AG and Porsche AG. Eager to harness the potential of digital transformation, Smart Press Shop engaged Syntax to bring DFaaS to life in their operations. Syntax helped Smart Press Shop develop a fully public cloud-based, integrated SAP solution comprising SAP S/4HANA Public Cloud and SAP Digital Manufacturing for Execution at the company’s new plant. As a pure cloud installation, the solution requires no on-premises computing capacity and no on-site IT team. Instead, Syntax runs the system on the company’s behalf as an application-based service. When Smart Press Shop wanted to add visual inspection functionality to their DFaaS solution, implementation took a single day—not the months such implementations might traditionally have taken.

Efficient, innovative, and flexible, the DFaaS solution helps Smart Press Shop concentrate on its core business and on being a reliable partner for all car manufacturers.

DFaaS is your gateway to a digitally transformed future

Digital transformation is coming to the North American automotive industry, but it doesn’t have to be a daunting prospect. DFaaS can enable automotive manufacturers of all sizes move forward into a digital future with confidence—and in a way that makes financial and operational sense for their business. If you’re leading an automotive business, consider where you want your company to be in ten years. Talk to a trusted, experienced advisor to discover how DFaaS can help you get there—and start your journey now.

To learn more about how Syntax and SAP help customers build their digital factory of the future today, please visit https://www.syntax.com/manufacturing/digital-factory/