In the 121st episode of the IoT Use Case Podcast, we take a look at the foam industry. The guests for this episode are Lukas Schattenberg, Sales Manager DACH at IXON Cloud, and Lukas Neuenhausen, Project Manager Digital Engineering at Albrecht Bäumer GmbH & Co. KG. Bäumer, a leading manufacturer of foam cutting machines, uses the IXON Cloud platform to connect around 600 machines for remote maintenance and data integration. Together, they discuss how Bäumer uses the data from its machines to create added value for customers and what “digital service” means in practical terms.
Episode 121 at a glance (and click):
- [13:15] Challenges, potentials and status quo – This is what the use case looks like in practice
- [21:25] Solutions, offerings and services – A look at the technologies used
Podcast episode summary
This podcast episode is about the central role of IoT in optimizing machine performance and customer services. Lukas Neuenhausen and Lukas Schattenberg talk about the use of the IXON Cloud platform for remote maintenance and data integration, which is tailored to specific customer needs.
The business case for the collaboration between Albrecht Bäumer and IXON Cloud includes the digitalization of processes and the expansion of service offerings. By connecting their machines to the IXON Cloud platform, production processes can be optimized and machine availability increased, resulting in significant cost savings. In addition, it enables Bäumer to offer its customers enhanced digital services such as remote maintenance and preventive maintenance, which opens up new revenue streams through subscriptions and service packages.
They discuss the technological challenges and solutions for implementing IoT and provide an overview of the business benefits that IoT brings. Future prospects, including new hardware and the expansion of the IoT marketplace, as well as Albrecht Bäumer’s vision and strategic direction with regard to digitalization and IoT will also be discussed.
Hello Lukas and hello Lukas. I’m really pleased that you’re here today. First of all, Lukas from the IXON side. How are you today? Where are you at the moment?
I’m currently in Duisburg. I am currently working from home, but have already been to our headquarters in Holland today.
Do you travel over there more often or do you tend to work from home with the team? What is your workflow like?
At IXON, the DACH team is given flexibility. Currently three times a week on site and two times working from home, which can be scheduled flexibly.
Lukas from the Bäumer side, how are you and where are you currently?
Yes, I’m doing quite well. Hello Madeleine. I’m currently sitting in the office of our company in Freudenberg, looking out and hoping that I’ll be able to get out of the snow later.
I’m delighted that you’re with us today. I think it makes sense for us to briefly introduce IXON before we come to your joint project. Lukas, you offer software, in particular an IoT platform for mechanical and plant engineering. You have four variants there, as I understand it, corresponding hardware, which is your own gateway, but it doesn’t have to be, so there are also companies that bring their own hardware. You have included a remote maintenance aspect where you can carry out remote access to digitalize service processes. You also offer integration, for example the connection to various data pools. The whole thing is also open and expandable, so you have the freedom to develop it a little yourself. I think we are learning a lot about this today. Perhaps to get things off to a relaxed start, could you tell us who your customers are today? Where are you active in mechanical and plant engineering?
With pleasure. As you rightly said, IXON Cloud’s IoT platform is aimed exclusively at the mechanical and plant engineering sector. This means that we are definitely not proactively approaching end customers, although it has to be said that from an IoT perspective, this is where most of the potential actually lies. The customer segments we are addressing include companies such as Albrecht Bäumer, a classic OEM in the foam cutting sector, which is also the global market leader in its segment. Of course, there are also many other sectors that we enter. We have customers who are larger machine manufacturers, such as Windmöller and Hölscher, and we are active in the packaging and rubber and plastics sectors. We also have references in the field of wood-based materials, forming and recycling, such as the Dieffenbacher company. This includes the company Vecoplan, which is involved in planning.
This means a full focus on mechanical and plant engineering. Is there actually a personal story of how the companies behind it got to know each other? Why are we here today? How did you get to know each other?
Exactly, we actually met in 2021 through Vecoplan. We were in the reorientation phase, then received this tip and then the relationship between IXON and Bäumer developed very quickly.
In other words, you already knew about Vecoplan, so to speak, and then you heard about it and then said, “Wow, we’ll go for IXON too”?
We were previously with the same provider and had the same pains and problems and then found the joint solution.
IXON-Lukas, you joined the team and then managed the project?
At the time, I was working as an Account Manager at IXON and my aim was to acquire as many customers as possible in German-speaking countries. As the connection with Vecoplan is very good, they were kind enough to introduce me to the other Lukas. This was the starting signal, so to speak, for the partnership between IXON and Bäumer.
Can you tell the listeners and me what use cases you are implementing internally for Bäumer and for customers? You are mechanical engineers, so you probably also have end customers: What use cases are you talking about?
We are pursuing different approaches there. First, we take a close look at the customer. At the moment, the main aim is to create transparency. Until now, there has been little knowledge throughout the foam cutting industry about how the machines are set up and how they work. Our aim is therefore to help adjust the machines better and operate them at the right speed. On the other hand, the service aspect is of crucial importance to us. We actually call this Next Level Service, which is somewhat in line with our claim “Next Level Foam Cutting”. As a premium supplier, we want to offer our customers a first-class service, as we are convinced that service makes the second sale of a machine possible.
The main use case is to create transparency about what you know about your machines, your customer perhaps, but not always, i.e. utilization, functionality, simply making the data usable. And the other is in the direction of service or digital service, where you have also created a new offering.
Exactly, that was towards the customer. And internally, we want to make the processes faster and learn more about how our machines behave in practice and not just in our company, during acceptance, in order to optimize the machines accordingly.
Lukas, you’ve just mentioned that it’s about cutting foam. Albrecht Bäumer, you offer special machines and systems for the foam industry. Do you know a bit about the products and customers you serve there? How should we imagine these machines and who buys your machines in the end?
Exactly, foam is a material that is used very, very widely, but is often not even consciously recognized. We serve different customer segments. The most important and probably best known are, for example, Bedding, i.e. mattresses and Furniture, i.e. furniture, sofas, couches etc.. But that is the one primary area. But it is also used in many other things, for example a lot of insulation technology or floor coverings. We also have really big customers who serve Automotive. For example, if you press on the headliner of any car, you can feel the foam layer underneath.
Okay, so if whoever’s listening right now, so if you’re sitting in the car, you probably have some kind of insulation above you in the headliner of the vehicle or if you’re sitting on a couch or something, it could very well be foam from you, yeah?
Exactly, the foams are not from us, but they were produced with our machines.
You are now moving in the direction of digitalization, you are increasingly working with data. What is your vision in terms of digitalization and IoT for your customers? Can you give us a bit of an introduction?
Exactly, that is a difficult, very big topic. I tried to bring it all together a bit and I would say that we want to offer our customers software that is really intuitive to use, because we believe that only simple software can help them to simplify all the processes on the machine and thus increase profitability. This is a basis for us to remain competitive in international competition.
Did you choose a specific sub-area for this project or specific customers where you started? How did you approach such projects?
We have been working on this topic for many years and have had our share of failures. Accordingly, in this project, or the use case we are currently discussing, we have concentrated on new machines and special customers who have a greater interest in them. This means plant customers who have more than just individual machines.
Entire lines, so to speak, from companies that have several of your machines in use there.
Exactly, because the bigger the customer, the more difference the software makes there.
Lukas, from the IXON side, how do you see the issue? I mean, that’s also a whole business model, a whole cultural change that’s attached to it. How do you rate this vision, or do you perhaps now support it from the IXON side?
I believe that Bäumer’s vision for servicing their machines and plants is very much in line with what IXON believes the future of mechanical engineering will be. At IXON, we believe that the machine manufacturer of the future will be a service provider. Similar to the Bäumer use case, I believe that many machine manufacturers today do not have standard connectivity to their machines. That’s interesting, because Lukas has just explained what added value this offers from the end customer’s perspective. However, when I look at how we approached the entire project and also consider the challenges Bäumer faced at the time, which Lukas has already mentioned, it’s really about establishing connectivity to the machine and creating acceptance at Bäumer to work with an IoT solution. And what Lukas described, which also constituted a significant part of our collaboration last year, is indeed the topic of making machine data available at scale and developing initial value-added services for its customers accordingly. Historically, the engineering industry has understood the value of service, particularly in terms of profitability, especially in the face of declining margins in the new equipment business. I therefore believe that Bäumer is a very good example of a machine manufacturer that wants to proactively help shape the future of service for its customers.
It really is a win-win situation, both for the customers who use assets from a machine manufacturer that knows its machines and also the research and development to use such data. For example, capacity utilization and modes of operation have now been addressed. I think you can use a lot of assets and, of course, digitalize your own business at the same time.
[13:15] Challenges, potentials and status quo – This is what the use case looks like in practice
What is the business case for this project? Internally, you have your own process digitalization; externally, you now offer a service to the market for your customers. What is the business case behind this?
Thanks for the question, that’s very interesting. There are very different aspects to this. How do we classify that? It is software that is categorized under our self-developed MES, but in principle also works independently. The business case entails that we sell and distribute it to our customers as standard within the scope of acquiring new machinery. What’s in it for the customer? We have found that if you add, for example, 5 percent to our average availabilities and speeds, this can make a difference of up to 100,000 euros in revenue at the end of the year for a single machine.
Are you selling your machine together with the MES system as a bundle?
Exactly, the MES system is above it. What we sell is this IoT use case, i.e. the IXON solution, with which we ensure that we have remote maintenance on the machines that we have sold. This is particularly interesting for us, especially during the warranty phase. After the warranty phase, however, it is also an opportunity for us to generate further sales and offer our customers a good service.
The five percent you mentioned refers to how your customer can use process optimization by using data with you.
That’s right, we are currently at the point where we are basically observing and then the customer has to actively intervene in the production process. Of course, this also takes some time, but the aim is to check whether the production time is actually 5% longer. For example, if we have an average utilization rate of 60% and this rises to 65%, and the speeds are higher than what is usually possible, this ultimately makes a difference of several hundred thousand euros a year.
As you just mentioned, there is also a certain technological business case when it comes to the challenge of connectivity. How do you see this business case? In the end, there is an investment behind saying that we are now relying on IXON software and trying to digitalize processes. What is the business case behind connectivity for you?
From IXON’s point of view, the business case behind connectivity really is remote maintenance. As a mechanical engineer, I must somehow be able to access a controller, I must be able to access an HMI, I must be able to manage different users. This is the business case behind the hardware, so to speak. That is actually the reason why we offer our own hardware as the IXON Cloud. The reason behind this is that with your own hardware, you are actually able to secure the connection from the machine to the cloud. Especially against the backdrop of cyberattacks and developments at European level. When I think of the Cyber Resilience Act or even NIS2 or something like that, the topic of connectivity and cyber security will become increasingly important in mechanical engineering. In this respect, we support mechanical engineering with our own hardware.
The business case is, of course, that your customer will save money somewhere down the line. What does this mean for your service? That is also a transformation that is taking place. Sure, remote maintenance is one thing. You may then also use other data. What is the business case for your service? Do you have any additions, perhaps from your point of view?
We are currently still in the development phase there. Our aim is for the service department to be able to prepare the operations on site. Specifically, I imagined that we would have a technician call-out and annual maintenance, and that our hotline would check the machine data in advance and use this data to determine which components the technician could take to the construction site, for example to avoid a second journey. We want to do a lot in this respect, including providing information so that customers are really able to help themselves.
Yes, of course this saves time and money, not only for you, but probably also for the customer, if a spare part arrives too late or you have to call first, so you can act proactively. That is of course a huge advantage. You talked about speeds, also picking up machine data, which different data is actually relevant for this project. What do you consider to be the relevant data for this project?
So we always start by collecting data from various sources. It starts with the machine control systems, where we can either read them out of the PLC, nowadays this has largely been converted to OPC UA and can be recorded from there. However, we also record data directly from sensors, such as an energy measurement system, in order to use it without an additional PLC. What kind of data do we use there? There are a few differences. On the one hand, it is always very interesting for the customer to have the order data. There, for example, it is also interesting to know how certain identical jobs were produced, perhaps with different settings, in order to know how to set them up in the future and what the possible sources of error might have been. In addition to this data, we are also very interested in the operating data, especially the technical operating data, i.e. what the engines are doing etc. For maintenance purposes, perhaps for predictive maintenance at some point in the future, but also simply for us to understand how it all works or perhaps to design the engines differently in the future.
So also product development topics that are relevant to you so that you can use them, but also to optimize the processes. Were there any special technical challenges for you? This data must first be recorded. After all, this is an entire project in which the choice of a cloud provider or partner to provide the software is important. What was important to you in this?
Exactly, so a very big focus for us, due to a failed project in the past, was to make the software extremely intuitive. Previously, we found that customers were not even able to log in and access the functions or features, let alone use them. From this failure, we have learned that in order to really help the end customer, software must above all be simple. We are also happy to accept that we are a little less technologically comprehensive as long as the solution is technically sophisticated but the user cannot use or understand it. IXON can do this extremely well.
[21:25] Solutions, offerings and services – A look at the technologies used
Could you perhaps briefly tell us what exactly you purchased from IXON and what this solution looks like? You are probably logging into a system somewhere. What data do you have there? What does this solution look like? Can you briefly describe this?
Exactly, based on what IXON-Lukas has already said, we first have a network of routers. These are installed in our machines or cutting line systems, where they are used to connect to the cloud. We then have an entire server network in the cloud, and each individual router basically has a virtual image there. This allows the access rights and rules to be defined accordingly so that only authorized users can access them. The Bäumer hotline as well as we and the customers can then log in via a normal cloud or web access, as is also known from other large Internet providers. This provides us with evaluations of how long the machine has been running, which errors have occurred and which programs have been cut.
How many machines have you connected?
We have been active with this platform for two years now and we currently have around 600 machines permanently connected to the platform. A good half of them are online.
Now that’s a statement. 600 machines, that’s an incredible amount. In order to obtain this various data at all, as already mentioned, it is PLC data that is transmitted partly via OPC UA and partly in other ways. They are available in very different formats in the brownfield with probably all types of controls and so on. How is the data collected? Can we talk about that? So, how do you access the data?
In general, what you say is absolutely right. I think that there are many different control systems in the field. The main advantage that IXON can offer our customers is that the router supports various proprietary as well as open standards. Examples of this would be the S7 protocol, OPC UA, as Lukas has already mentioned, the Ethernet IP protocol and Melsec if you are working with Mitsubishi controllers. There really are many different protocols, and IXON is able to cover at least a large part of them via the hardware.
Lukas, do you have any additions from the Bäumer side as to exactly how you do this?
The beauty of the solution is that all data is time-stamped and stored in a corresponding database. This was actually a great learning experience for us, as we first had to find out how we could collect the data, which events trigger it, for example, and what information our interfaces provide. We have learned a lot over the last few years and unfortunately also realized that there were many errors in the interfaces, which we have since been able to rectify.
Errors in the interfaces mean that we can initially merge data from different data sources, or what exactly does error “interface” mean in this context?
The special thing about the visualization in the cloud with the timestamp is that all data really becomes public and is clearly visible. Of course, we also carried out evaluations years before that. However, it never became actively clear from the way it was presented, but in principle only became apparent through this time series-based visualization.
This means that you look at the data and then send certain time stamps, some of which are linked to events and are necessary in order to implement the various use cases with the customer. I then have an assignment of the data to a specific case, so to speak, which makes this easy. Do I understand that correctly?
Everything is correct except for the statement that we are doing this. IXON Cloud is completely wide-level-ward. This means that the server structure that Lukas was talking about is made available to the mechanical engineers. IXON Cloud itself is also low-code based. This means that by simply configuring the data tags, I as a mechanical engineer am also able to make data available and visible on scale very quickly using ready-made widgets. This means that we provide the tooling rather than the actual work step.
This means that the data tags allow me to analyze this data myself and give me a lot of freedom. In the end, order data should somehow be analyzed, but also operating data. These are very big keywords. But how exactly does this visualization and analysis work? Lukas, you said on the IXON side that this is a low-code approach or even no-code. How does this visualization work? What can I build for myself? What’s already there? How does that work?
I think it’s also super important that other stakeholders can also use the data, including in different roles and rights systems. Everyone has a different case. Perhaps your CO2 officer will come around the corner later and would like a specific data set. And of course, the openness of a system is incredibly valuable here. Which connection option to the systems do you use or want to use?
Exactly, it is interesting for us that all the data is accessible there. As already mentioned, we also have a subscription model in the background that customers have to pay for. An important point before we turn to the machine data is the configuration via the API connection, the transmission of commands, etc. If we now focus on the data again, we can obtain it automatically via tools such as Power Automate, for example, and then aggregate or summarize it in our system. However, when it comes to analyzing the data further, it is important for us to have it in specialized systems.
What would also interest me again would perhaps be a little bit of this expertise about the data. You at Bäumer have an incredible amount of knowledge about your machines, how they work, but of course also about the customers, the order data and so on. Who actually does the data analysis at the end?
I would say that in many cases it is also the end customer who supports us, especially when it comes to production. Initially, we don’t know exactly what the customer is doing on site. It would be difficult to reconcile this with German data protection law if, for example, we were to install a camera and record activities. We therefore deliberately offer our customers the option of analyzing the data here in our digital team, comparing it with similar customers in the same market segment and drawing conclusions from it. For example, we can determine whether or not there is still room for improvement. However, this quickly becomes complex, and in such cases we need experts, especially when it comes to optimizing cutting programs, etc.
Of course, it can also be a great partnership to work so closely on the basis of data in order to work out joint added value. We briefly touched on the subject of change management earlier. You have to involve your organization, you have to involve the people in service and so on. Can you share your experience from the Bäumer side, what the keyword change management means for you?
I would say we are talking here about subscriptions, or recurring revenue. This is somewhat at odds with the traditional mindset of a classic mechanical engineer. A classic mechanical engineer sells the machine, may offer a warranty, and then is satisfied. However, with these recurring revenues, we need to fundamentally rethink and constantly evolve, shedding some weight on one side while gaining more on the other. For us, this has led to the decision to develop more iteratively rather than incrementally. This means I can no longer tell my boss where we will be in two years. Instead, we work closely with customers to develop solutions that provide real value to them. We are also willing to quickly discard the solution at the beginning if we find that it is not beneficial. Another interesting question concerns sales, as the same questions naturally arise here. Sales are usually measured based on revenue, but if we now sell subscriptions, revenue is negligible. On the other hand, there is of course a margin that recurs continuously. Therefore, sales must first understand what the added values of these subscriptions are. At the same time, they must of course also benefit in some way, similar to selling a machine.
Lucas, do you have any final additions to this point from the IXON side?
I believe that Bäumer is a great role model for many medium-sized companies and mechanical engineers on how to approach such projects. When I think back to the beginning of the project and think about where Bäumer is now, especially in the context of what Lukas said about how software is actually developed, I think there has been a huge rethink. When I think about how this situation came about, it is largely due to the fact that the silos within the mechanical engineering company were broken down and the responsibility was taken over by a higher management level, in this case by Mr. Christoph Hauck, and implemented in the teams, for example by Lukas.
Thank you very much for the addition at the end. If you are listening right now and think that this is exactly my topic, or if I have a similar project, or if I find this topic exciting, then you are of course welcome to contact Lukas Schattenberg and Lukas Neuenhausen. I have also linked the links to LinkedIn again in the shownotes.
Thank you very much for this exciting episode. I think the last statement was particularly important once again, especially with regard to the topic of change in the company and the development of added value together with customers. I believe there is still a long way to go, as there are many challenges to overcome, but the added value is clear to see. I would therefore like to thank you very much for presenting your project. It was very easy to understand how the data from the machine reaches the IXON software via the PLC, the router and the server network and how you deal with it. Thank you very much for the insights today and with that I would like to say the last word to you from my side, thank you very much for being here today.
Thank you very much for the invitation, it was very interesting and I would say see you next time.
I can only agree with this, also from my side. Many, many thanks for the invitation and I’m looking forward to new podcast episodes.
Exactly, maybe we’ll hear from you again in a year’s time and then there will be an update, perhaps even with a customer who has such a plastic cutting machine in use. Thank you very much and take care, have a nice week!