Schaefer Werke Group: From Traditional Metal Processor to Digital Service Provider

The Schaefer Werke Group has developed an Internet of Things (IoT) solution that uses sophisticated sensor technology to record data from containers that reveals fill levels, locations, vibrations, temperature, or viscosity. This information can be used in a variety of ways - from maintenance and quality control to logistics.

Although hardly anyone knows it, when a fresh tap beer is drawn at a restaurant in Germany, the probability that the brew comes from a keg made by Schaefer Werke is more than 70 percent. Another little-known fact: These kegs are among the most durable business assets - nearly unbreakable - and it is not rare for them to be in use for 30 years or more. Even 40-year-old kegs are still in use today.

Like other transport containers, the longevity of kegs is desirable for a number of reasons. Multiple-use containers are far superior to single-use and throwaway containers, both from a cost perspective and under the aspects of sustainability and resource consumption. But there aren't just advantages from the manufacturer's perspective.

'If it doesn't break, it doesn't need replacing. That means the limits to growth are clearly defined,' says Rainer Broecher, managing director of Schaefer Werke.

That's not the only reason why the manager and his team thought about whether and how they could enhance their products with digital innovation. The midsize company wanted to participate in the digital value chain early on and has been thinking about new business models and their development in the company's strategy for some time now.

Broecher also has healthy competition in mind: 'If we don't pursue innovation and offer our customers digital services ourselves, there is always the risk that an outside service provider might take it away from us.'

'We're a company with over 80 years of tradition in steel processing, practically the classical metalworkers,' he says. With its expertise in steel processing, production technology, and the manufacturing of transport containers, Schaefer Werke is a global market leader. At the same time, product innovation is also part of its everyday business.

Nonetheless, Broecher is aware that in times of digital transformation, all this is no longer enough to take the top spot among global competitors.

IoT Solution and Sensor Technology Make Containers Intelligent

'We asked ourselves how we could develop a viable digital business model that delivered measurable added value to our customers, while at the same time enabling us to explore further growth opportunities,' Broecher says. 'And we arrived at the idea of equipping the intermediate bulk containers, which comprise a considerable portion of sales at Schaefer Werke, with digital sensor technology and make this data available to the customers.'

Intermediate bulk containers, or IBCs, are containers for the transportation and storage of liquid, pasty, and granular substances. They are available in different designs and sizes from 500 to 1,500 liters and are used for a wide range of purposes - from beverage additives to marmalade, from minerals to hazardous substances - in the chemicals, petrochemicals, waste disposal, recycling, food, and pharmaceutical industries. No exact figures are available, but estimates suggest that several million containers are in use worldwide.

Sensor technology is the key element of the IoT solution developed by Schaefer Werke. Together with a partner, the company developed sophisticated sensor technology that records data such as fill level, vibrations, location, temperature, pressure, viscosity, and exposure to light. The highlight: All the tech is housed in an IBC's cover, which means even older IBCs or those from other manufacturers can be retrofitted easily and with little expense simply by replacing the cover.

'That was a decisive criterion back in the design phase,' remembers Broecher. 'For customers to capture the maximum benefit from the IT solution, they must be able to equip their entire inventory of IBCs with the sensor technology, without having to replace them all at once.'

Many of his customers have huge inventories; fleets with 10,000 IBCs and more are not uncommon.

SAP Cloud Platform Serves as IoT Solution Backbone

The measurement data from the sensors is sent to SAP Cloud Platform. For Broecher, the decision in favor of SAP as the technology platform was an easy one. SAP applications form the backbone of enterprise IT, and not only for the Schaefer Werke Group. As a validation process during the design phase revealed, many of the company's IBC customers also use enterprise resource planning (ERP) systems from SAP.

In addition to the ease of integration, the flexibility and performance of the IoT stack from SAP and SAP Cloud Platform, with its myriad functions in areas such as analytics, visualization, and integration of artificial intelligence (AI) functions, all won over the project team at Schaefer Werke.

The system is designed such that the containers transmit their data to SAP Cloud Platform daily under the default settings. For specific applications, such as intralogistics, the sensors can also be configured to record and transmit their data more frequently, even in real time. The sensor technology supports nearly all widespread communication technologies, including Bluetooth, NFC, and the 2G and NarrowBand IoT wireless standards. As a result, IBCs can connect to SAP Cloud Platform from nearly all conceivable environments - from the factory and warehouse floor to during shipment by road and rail.

IoT Solution Delivers Targeted Competitive Advantages

The project is still in an early stage. The first pilot customers is planned to begin using the application in the third quarter of 2019 and release for all customers is planned for the fourth quarter.

The use cases are very diverse: 'From production and logistics management to maintenance and quality assurance, we can think of numerous scenarios that aren't just nice to have, but also deliver direct, specific cost and competitive advantages,' says Broecher.

One example is lost containers, an everyday occurrence for companies with large fleets, which can be found easily in future thanks to a sensor's GPS function. Another is pressure checks, which used to take at least a day and can now be completed in just a few minutes, thanks to the highly sensitive sensor technology. Even more important, however, are the completely new possibilities that arise through interaction with analytics and AI functions of SAP Cloud Platform.

Scenarios will become possible in the areas of predictive maintenance and planning or in the determination of material stocks in all containers, regardless of their location for example, as well as for the analysis and optimization of transport routes across the entire container fleet, along with quality assurance. The sensors can provide a seamless record of the temperatures, pressures, and vibrations to which a container has been subjected.

'We've only just begun here and will explore new use cases successively, on our own and in collaboration with our customers,' says Broecher. In the future, the system will gain the ability to anticipate material requirements, for example, to optimize forecasts.

Broecher is certain that he is on the right track: 'It's clear that the road from metal processor to IT service provider isn't an easy one. But we know we have to take it if we want to capture the opportunities presented by increasing digitalization.'

The Schaefer Group, headquartered in Neunkirchen (Siegerland), Germany, has its roots in steel processing and consists of three divisions:

• The Schaefer Werke Group is active in steel processing. In addition to a steel service center, perforated plates, and container systems, the company also offers products and services in the area of data center and network technology.
• SSI SCHAEFER works in warehouse and logistics systems and has specialized in the design of warehouse facilities with its own products and the execution of logistics projects as a general contractor.
• The Schaefer Shop runs the company's B2B and B2C mail order business with over 35,000 articles of business equipment. Launched in 1970, the mail order business is conducted through a network of branches and field service staff, as well as offices in 14 European countries.

In total, the Schaefer Group employs around 10,500 people with a footprint in 60 countries and generates annual revenue of more than $2.4 billion.

This story originally appeared on the German SAP News Center.
Top image via Schaefer Work