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Q&A: Mike Lackey on SAP digital manufacturing

In this Q&A, SAP head of digital manufacturing Mike Lackey discusses the SAP digital manufacturing network and how it helps manufacturers meet the demands of the new digital economy.

Next-generation technologies like the cloud, IoT, advanced analytics, machine learning, AI and 3D printing are changing the landscape of manufacturing. Manufacturers are using these technologies in digital manufacturing processes to gain insights into products and customers that can help them be more responsive and flexible to meet demand.

In this Q&A, Mike Lackey, SAP global head of solution management for digital manufacturing, discusses the SAP digital manufacturing strategy and the status of digital manufacturing in general.

How does the SAP digital manufacturing strategy fit into today's manufacturing landscape?

Mike Lackey: SAP digital manufacturing is a part of our digital supply chain, and we're starting to see it become more in the spotlight now.

What's new here is at the Hannover Fair [one of the world's largest industrial technology expositions] in April, we announced our cloud strategy for manufacturing. We announced our new SAP Digital Manufacturing Cloud for execution, which is a true multi-tenant application, and we announced an edge component.

Mike Lackey, SAP global head of solution management for digital manufacturingMike Lackey

I don't believe you can do manufacturing 100% in the cloud without having that edge component. There's an application at the point of work where there's an operator or the piece of equipment -- it's there at the edge. These [edge] blades have so much processing power on them, but the heavy lifting -- the analytics -- is done in the cloud.

What are some of the other SAP initiatives that can help manufacturers in the digital economy?

Lackey: We also announced our Manufacturing Network, which is a connection into the SAP Ariba Network where you have over 30,000 discrete suppliers.

You can sell it, but if you can't manufacture and deliver it, what good is it?
Mike LackeySAP

Now, if you onboard with Ariba in our application, you can throw up a 3D drawing and collaborate with all these different vendors. They can say 'Yes, I can manufacture that for you,' then they can collaborate on the design. Then the first article can come into the system and you can collaborate on it. Then you process the order through Ariba or through S/4HANA. So it's a way to get this collaboration to find new suppliers.

Why is this important?

Lackey: In this digital world, we have access to more customers than ever before, and one tweet could generate 50,000 in demand in a day, but the demand only lasts for so long.

For example, when the Eagles won the Super Bowl, if you're an Eagles fan, you want that hat within the next two days -- or that night -- and if you don't get it, you're not going to pay a premium; you're going to wait until it goes on sale.

So where does digital manufacturing come in?

Lackey: You can sell it, but if you can't manufacture and deliver it, what good is it? That's why manufacturing is so important in this network because now you have to find vendors faster, you have to manage those vendors better and you need to collaborate with them on the design.

We have to build that agility into manufacturing. It's no longer about capacity, it's not whether you can make 20,000 a month, but can you make 2,000 in a day?

 How is the digital manufacturing world affecting workers?

Lackey: You can better support the workers and give them better tools and get 2% to 5% efficiency out of that worker. One way we can connect the workers is through sensors. If you put them in the plant, you can monitor heat, you can monitor gasses, you can monitor the environment around them and tie that back into quality and performance. You can even put sensors on the operator.

If you think of a welding job where in the summer it's 90 or 100 degrees, how's that person's body holding up? Are you better off having two hours on, two hours off welding? How do you make that operator more efficient and more connected, as well?

So it's introducing intelligence not only into the stuff that's getting made, but also the way it gets made.

Lackey: Yes, and for this lot size of one, you'll pay a premium if something gets designed just for you. Nobody wants to compete on price anymore, and you're willing to pay that premium if you can get it in a reasonable amount of time.

When you go on these digital sites, there are two things that people are bidding on: time and price. If I can deliver it to you in 72 hours for $212, but the other guys can deliver it you for $240 in 36 hours, I believe the delivery time is going to outweigh the price.

How does digital manufacturing enable this?

Lackey: You have to know what's going on in manufacturing and how well your plant is running.

Let's say you have a manufacturing plant in Arizona and need to get an item to Atlanta for next-day delivery. You can get it to Atlanta in that window if you can get it on that 11:30 FedEx flight, but all this data has to be done at the split second before you make the commitment.

This is not just for consumers because we're also seeing it in business. We have customers that are making engines and no two are the same on the same assembly line based on demand. So rather than having eight different factories or production lines, one for each, they're making them on the same production line.

Where are manufacturers now with digital manufacturing?

Lackey: The market leaders get it. In automotive, for example, we're seeing modular manufacturing versus linear. In modular, it comes out of the workstation and looks for the next available station. And if you want to make a change, rather than having to shut the plant or line down, you just have to find the next workstation or reconfigure.

The speed of innovation now is at an all-time high, and that's true for manufacturing, as well. How can you get innovation into your processes and into your products and then to the customer? So the leaders are in [the] execution phase and I tell people [in manufacturing] that they have to dream big -- what's your vision and what's your business going to look like in two years' time?

This was last published in July 2018

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