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SAP Leonardo IoT and Industry 4.0

Preprint · April 2021

DOI: 10.13140/RG.2.2.12889.44640

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 SAP Leonardo IoT and Industry 4.0
Introduction
This article covers Lets quickly touch base about what is Industry 4.0 and importance of IoT and
then focus more about how SAP is adopting the IoT and plays important role and take a look at
automatic inventory replenishment using SAP IoT.

Industrial revolutions1.0 to 4.0

The picture below describes how the industries transformed from mechanical power to Internet
of Things

1.0 Introduction of machineries powered by water and stream that helped farming etc.,
2.0 Introduction of electricity lead to mass production
3.0 Introduction of electronics and IT that further automated production process
4.0 Driven by connected devices/machines that exchange the information.
Fundamentals of IoT:
Let’s start with the definition from Wikipedia. The Internet of Things (IoT) is a system of
interrelated computing devices, mechanical and digital machines, objects, animals or people
that are provided with unique identifiers (UIDs) and the ability to transfer data over a network
without requiring human-to-human or human-to- computer interaction”.

IoT is systematized with three important components. Let’s deep dive into each of the components before we get
into real life examples.
a. Sensors
b. Edge services
c. Cloud

a. Sensors:

A sensor is a small device that detects state of physical devices and transmits the information as digital
signals to an edge or cloud solution that ingests and analyzes the data.

Physical devices cannot sense its status without sensors. IoT enables Machines or devices can communicate
each other with the help of sensors.
Real life examples:

• Thermostats that measure humidity, temperature

• Apple watch which detects motion and Nosie
• Health fitness devices that detects movement, and position
• Chemical sensors, which measure contamination levels
• Vision sensors recognizing light, colors, and even complex patterns like defects in materials.
b. Edge Computing:

IoT edge computing stays closer to the IoT data source to process, store, and analyzing sensor data. This
helps edge computing for faster decision-making.
 The need for edge computing established due to the exponential growth of IoT devices. Edge computing
receives the information from IoT devices and transfer the data to cloud.

Billions of devices generating data every day and data is growing exponentially. Edge network reduces the
load on cloud by managing data locally and avoids transmitting all the raw data from local source to cloud.
This is why edge processing and pre- processing of sensor data plays such an important role in IoT today.

Some of the best examples: Transmitting big data from Vessels on the high seas, the challenge is often
about bandwidth. Offshore oil rigs, retail stores.

Manufacturing, we have shop floors equipped with many, many sensors monitoring and controlling the
production process.

c. Cloud

It’s a technology world of cloud. Almost everyone aware of the cloud functionality.
Cloud computing simply means providing on-demand storage, databases, networking, software, analytics,
and intelligence network of remote servers.

Intelligent Enterprise with SAP IoT

Traditionally, IoT is seen as a network of physical devices and the focus is set very much on how they connect and
exchange data. But at SAP, we see much more in it.

We see IoT as a key enabler of the Intelligent Enterprise where data enables intelligence and feeds process
automation and innovation. Most of the enterprises have systems that capture operational data about customer
transactions, procurement, vendor contracts, about manufacturing and spending, human resource management.

Reports and dashboards provide the insights and helps to predict what will happen next.

But in order to influence what happens next companies need more insights about interactions that people have with
their products, their employees, their business, and their brand
In order to connect the dots and understand the interdependencies, business need an experience
platform that captures it all in one place. SAP Intelligent Enterprises collect insights from
customers, employees, products, and brands at every touchpoint.

Qualtrics is SAP's solution to optimize customer, employee, product, and brand experience.

The SAP intelligent suite provides a suite of applications to run day-to-day business operations
like manufacturing, Supply Chain, Finance, Logistics etc.

The SAP intelligent technologies platform includes data-driven insights, intelligent robotic
process automation, artificial intelligence, and IoT cloud and edge.
Automatic inventory replenishment:
Let’s take a look at the example how SAP can be integrated with IoT sensors and deliver the
auto-replenishment in Silo.

1. Sensors attached to receptacles that measure real-time fill-level, material consumption

rate, temperature
2. Fill-level sensors in silos usually measure the distance from the sensor to the surface of
the material inside the silo to determine the reorder level
3. Sensors send the fill level, temperature, and also the humidity information to SAP
Leonardo IoT.
4. In SAP Leonardo IoT, the sensor data is then enriched with business context from the
ERP system, such as the material type, the respective plant, and the storage location.
5. An automated integration from SAP Leonardo IoT to the ERP system triggers the
automatic purchase requisition to the relevant supplier based on the business riles defined
in SAP ERP application
6. Business rules in Leonardo IoT send alerts and notifications if any critical situation
occurs. So, for example, a low fill level, a high temperature, or the humidity being too
high, which could spoil the material.

Sources: SAP Open course, SAP Leonardo IoT

The industrial internet of things (IIoT) refers to interconnected sensors, instruments, and other devices networked
together with computers' industrial applications, including manufacturing and energy management. This
connectivity allows for data collection, exchange, and analysis, potentially facilitating improvements in productivity
and efficiency as well as other economic benefits.[1] The IIoT is an evolution of a distributed control system (DCS)
that allows for a higher degree of automation by using cloud computing to refine and optimize the process controls.

companies require combining IoT with rapidly advancing AI technologies to make well-informed decisions with
little or no human intervention.
 1. It all starts with devices that you connect to the system. This can be done directly with SAP Cloud Platform
Internet of Things (SAP Cloud Platform IoT service) for device connectivity and management (in the left-middle
part of Figure 2.4) that runs on the SAP Cloud Platform and supports HTTP and MQ Telemetry Transport
(MQTT) as protocols. In addition, the devices can be connected by making use of other vendors’ device and
connectivity components such as AWS IoT Core and Azure IoT Hub to send data into SAP Leonardo IoT (lower-
left part of Figure 2.4). Device can be connected directly to SAP could platform IoT Services or it can be
connected through other cloud service providers Such as Azure IoT Hub, AWS IoT Core etc.,
2. You also can connect the devices to edge computers that run SAP Edge Services, process and persist the sensor
data at the edge, and possibly send only parts of t he data on to SAP Leonardo IoT in the cloud. The SAP Edge
Services cloud component is called the Policy Service and handles the life cycle of SAP Edge Services. SAP Edge
Services rests on a foundation of the IoT edge platform, which is a part of the SAP Cloud Platform IoT service
mentioned previously.
3. The center of Figure 2.4 shows SAP Leonardo IoT business services, which are needed to build an IoT
application. These main business services include thing core services, data ingestion services, big data storage,
and data processing ser- vices like rules, events, and actions. SAP Leonardo IoT also provides design-time tools
and services like the Thing Modeler, SAP Web IDE, rules/actions modeler, and aggregates builder. These
services offer different features, which we’ll explore in Section 2.4.
4. On top of the contextualized sensor data is the planned analytics capability using SAP Analytics Cloud.
5. SAP Leonardo IoT offers tools such as the Thing Modeler to create a thing model that is the digital
representation of the device and its sensors. With the SAP Web IDE tool, templates specific to SAP
Leonardo IoT enable you to create new SAP Fiori apps from scratch based on IoT.
6. SAP Cloud Platform Integration iFlows establish the connection between SAP Leonardo IoT and backend
systems.
7. Finally, SAP, customer, or partner applications use SAP Leonardo IoT’s APIs to build new applications.

Fruits Inc. is one of the leading producers of fruit preparations for dairy, bakery, and confectionary products
(business-to-business [B2B]). Fruits Inc.’s suppliers provide raw materials, such as sugar to Fruits Inc.’s production
plants where they are stored in silos with IoT-enabled sensors. The company has the following pain points:

• Inaccurate fill level measurements

• No real-time visibility into consumption
• Manual order for replenishment
• Product quality/spoilage
•

Some of the challenges that companies face in enterprise IoT are as follows:

• Getting the business ready for Industry 4.0

• Enhancing the LoB processes with operational data from IoT
• Making sense out of IoT data
• Semantically integrating sensors and devices from different vendors
• Integrating existing IoT data into their business processes
• Using IoT data to develop their own IoT-enabled business applications
• Driving business decisions based on real-time operational data from sensors
• Translating sensor values to insights and enabling business outcomes
Category

Category Use Cases

• Monitor how often a container is connected to the manufacturing line.
Usage monitoring • Receive alerts when filling levels are low.

• Show available containers at the customer site.

Asset location monitoring • Track exact container locations.

• Display real-time insights on shipments.

IoT-based supply chain
Dynamic expiration date
• Show the complete container lifecycle from company to
the customer and back.
• Monitor actual storage conditions.
• Provide dynamic expiration date based on storage and container handling.

• Monitor filling levels of all containers.

Company supply chain
Company asset management
• Determine which containers are expected to be shipped
back soon.
• Determine location of missing containers.
• Provide insights regarding asset availability at the company’s warehouse.

Figure 12.9 depicts the truck with telematic device sends the outbound shipment data to device management cloud
and then to SAP Leonardo IoT. The device management cloud will take care of device connectivity and
management, firmware upgrade management, IoT SIM activation and deactivation, and data transfer rate
management. The telematic device in the truck sends the geo physical location, vehicle speed and storage conditions
etc. SAP Leonardo IoT also gets data from external sources and business context from ERP.
 Insights Scenarios
• Truck idle time alert
• Storage condition deviation alerts
Real-time insights • Real-time events (truck has reached plant for loading, has started this journey, has reached the
(Cont.) destination, etc.)
• Real-time estimated time of arrival

• Shipment delivery adherence by shipment by transporter, by type of trucks, by material, by route, and
so on
• Types of alerts by truck, by transporter, by shipment, by route, and so on
Descriptive insights
• Transportation cost by customer, by shipment, by route, by material
• Product condition issues by transporter, by route, by material

• Predict delivery time to give dealer/customer near accurate time of shipment arrival
• Correlate late arrival with transporter, truck, route, weather data, and route terrain data to initiate
proactive corrective measures
Predictive insights
• Correlate material rejections with route information, transporter, truck, and event data storage
condition data to identify route cause

• Change delivery document status

• Change transportation order status
Actions based on • Arrange new truck in case of breakdown
insights • Trigger immediate action in case of route deviation detected or considerable delay
• Make demurrage calculation

Optimization
• Optimize route and shipment release time for in-time delivery

• Geospatial view of all the shipments with business context data

• Truck breakdown alerts
Real-time insights
• Route deviation alert

cloud computing is the delivery of computing services—including servers, storage, databases, networking, software,
analytics, and intelligence—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and
economies of scale. You typically pay only for cloud services you use, helping lower your operating costs, run your
infrastructure more efficiently and scale as your business needs change

Cloud computing is on-demand computing services such as storage, remote servers, networking, data analytics,
ready to use ML/AI algorithms over the Internet. Cloud computing reduces the cost of owning own software and
hardware and maintenance cost such as electricity, cooling devices etc. Easy to scale up or scale down the storage
based on the organization need.
 REFERENCES

[1] Boyes, Hugh; Hallaq, Bil; Cunningham, Joe; Watson, Tim (October 2018). "The industrial internet of things (IIoT): An analysis
framework". Computers in Industry. 101: 1–12. doi:10.1016/j.compind.2018.04.015. ISSN 0166-3615.

[2] https://en.wikipedia.org/wiki/Internet_of_things
[3]https://help.sap.com/viewer/fffd6ca18e374c2e80688dab5c31527f/1912a/en-US

[4] Figure 5.1 https://open.sap.com/courses/iot4/items/kr6VJXLL9MTr2Hal1x93Q

[5] Use Case 5 - Authors: Sijesh Manohar, PVN Pavan Kumar, Shyam Ravindranathan, use cases: SAP Leonardo Internet of Things in “Internet
of Things with SAP Implementation and Development

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