Digital service for hazardous materials storage – a leakage warning system

Today, we’re diving deep into the world of IoT in security-related environments. Hazardous materials storage meets IoT. Joining us today are Dr. Jan Regtmeier, Director Innovation and part of the DENIOS SE management team. The industry is Environment & Services and joining us is Thomas Krekeler, CEO of ROBIOTIC and CSO of HK.Systems. The industry is IT services or telecommunications.

Real professionals, even with awards. Today we’re talking about use cases and the associated IoT solutions that market leader DENIOS has built for its customers for hazardous materials storage and occupational safety. With that, I’d say let’s get straight to the podcast studio. Let’s go.

Hello Thomas and hello Jan, nice to have you with us today. I’m really excited and welcome to the IoT Use Case Podcast. How are you? Thomas, how are you and where can I reach you right now?

Thomas

First of all, thank you for the invitation, Madeleine. I am very, very well. We have a beautiful summer day at the end of October. This lifts the spirits and the mood. You can reach me at the office. I’m at the Paderborn location and looking forward to our podcast episode.

Very nice. I’m really looking forward to it too, some fall walks this time of year, it’s fantastic. I’m really looking forward to it too, some fall walks this time of year, it’s fantastic.

Jan

Thank you Madeleine and nice to be here today. I am in beautiful Bad Oeynhausen, the spa town with the Heart and Diabetes Center. I am enjoying the day, get to work here at our headquarters from DENIOS SE and I’m looking forward to the podcast now.

Very nice. Now I have to take a quick look at Google Maps. Bad Oeynhausen, that’s near…Minden.

Jan

Exactly, in the direction of Minden, halfway between Hanover and Bielefeld. It is still East Westphalia.

Most know you, some don’t yet. You are ROBIOTIC, a joint venture founded in 2016 by the established German technology company Hoffmann & Krippner GmbH. Hoffmann und Krippner is a specialist for input systems, sensors and also related components. You, from ROBIOTIC, are from the telecommunications sector, which means that you are active somewhere as a service provider and implement projects holistically, especially in the field of IoT. Through the complete process chain from sensor technology, data transmission, analysis to payment. There you have several hundred IoT specialists in-house. You are CSO at HK.Systems and at the same time CEO of ROBIOTIC. Can you give us some insight into which clients you work with?

Thomas

Yes, very much so. That was a lot of information in a little time. I’ll summarize it again very succinctly in one sentence. Hoffmann und Krippner has been building electronic systems, essentially input systems, for 50 years, has a very, very high depth of development at the site in Buchen in the Odenwald and manufacturing at two sites in Germany. ROBIOTIC was founded six years ago because we thought about what is important for industrial SMEs, to whom we address our products, for support in a digitalization project. Roughly speaking, this can be divided into three parts. Once we have hardware that captures and transmits something. Then we have a cloud system that processes data and makes it usable. And then we have an application that makes data available again and triggers processes. That was our idea at the time. You have now named ROBIOTIC and HK.Systems. Robiotic is responsible for cloud application in this chain, so it is more of a software telecommunications company. HK.Systems is more or less the “IoT products” part that comes from Hoffmann and Krippner, who manufacture electronics and then make them available. Therefore, it’s not contradictory that I work for both companies. Because a complex product or project is controlled from HK.Systems. ROBIOTIC is a part of this project then. Or else it’s all about networking and the cloud. Then ROBIOTIC as an independent company is also able to do these things.

Very good. And your customer segments, do you have a wide variety of companies across industries or who do you work with?

Thomas

It is indeed the case that we can offer specific topics for each industry. So that means we are not in any industry. We are actually targeting industrial SMEs, regardless of the industry they come from. We have a wide variety of companies there, such as DENIOS SE here today. One of our top and favorite customers, because they bring a very wide range of things to the table, from the field of hazardous materials storage and environmental protection. But we also have customers like Würth, which are completely different customers who have different requirements for IoT and for digitalization processes.

Very nice. DENIOS SE is your customer, is there actually a common way you got to know each other? You are also super successful. You won a German Innovation Award for exactly what we are discussing today. How did that come about? How did you get to know each other?

Thomas

Well, that’s quickly explained. There is a top cluster in East Westphalia, “it’s OWL”. Yes, so it’s about technical systems within this cluster, so IoT business in a group of companies. We were introduced there at the time by the managing director. DENIOS is a supporting member of the technology network of this cluster. We are a member of this cluster and quickly realized that there are things about us that are not unimportant to DENIOS in their vision of new business models. Then fate took its course.

Then you came into play as well. I.e., you have met each other.

Jan

Exactly, that was a really lucky coincidence at that point. Both together in this research cluster of excellence, where the primary focus was first and foremost on research. But we found out relatively quickly that we could do a lot more. The requirement, and this is the beauty of ROBIOTIC and Thomas, is always a business case, so that you really look at how you can get from theory to practice as quickly as possible. As a down-to-earth medium-sized company, we were very pleased that we were able to get started quickly with the implementation and the business case.

Yes, great. Now I’m talking here in the podcast precisely about these use cases and, of course, the business cases behind them. What exactly did you do together in this project and what use cases are involved there?

Jan

DENIOS comes from this area of hazardous materials storage. Our customers are all industrial companies that manufacture or build something. They inevitably have hazardous materials. This starts with a WD-40 can, varnishes or solvents are used quite often. Since the COVID wave, unfortunately also disinfectants in large quantities. In other words, everything that is not allowed to enter the groundwater or burns quickly. DENIOS’ mission since 1986 has been to provide our customers with products that allow them to store and also handle such hazardous substances safely, i.e. to work with them in some way safely. When it comes to security, you quickly get to the topic of surveillance. Ideally, there is always one person there to supervise. But this is completely uneconomical. After the topic of monitoring, there is always and increasingly the topic of compliance. So how do I actually prove as a company, especially as a medium-sized company, that what I’m doing there is all in compliance with the law?

There are quite a lot of rules in Germany. One of my favorites is what is known as the steel tray directive, StawaR. It says, “dear user of a steel tray, look in there once a week and prove it.” Some employee gets to go around every week and then document on their paper and pencil note that they were there and there’s nothing in the tray that doesn’t belong there. That’s when we said, “There’s a smarter way to do it. That is why this company alliance of ROBIOTIC with HK.Systems is so exciting for us, because we have used virtually the entire range that HK offers. So together we developed an IoT sensor that has a modem and a SIM card, which in turn makes mobile phone calls to the cloud. Then we built a common cloud infrastructure and then created an application on top of this infrastructure, which we now call DENIOS Connect. This DENIOS Connect in turn is then a 24/7 monitoring of e.g. leakages. If a liquid leaks anywhere, our sensor wakes up and sends a telegram. This goes through Thomas’ cloud infrastructure and at the end the customer gets a notification. Then they can decide whether they would rather receive a text message, a phone call or an e-mail. That’s what we built together. That was our starting point in 2021.

I’m particularly interested in the business case behind it, because you’re pursuing a product approach with it. You have just mentioned DENIOS Connect. On the one hand, this is an internal issue for you, but perhaps also an external one, where you are now focusing on new services for your customers. You’ve just touched on it. Can you outline a little bit what your vision is here now, in particular, regarding IoT? Is that a product? Can you explain the vision behind it?

Jan

Exactly, the idea in itself is that all the products we bring to market are networked. We are now starting with this leakage sensor, and have now also networked cabinets. Many of our customers are familiar with these from the laboratory sector. We’ve done this for battery charging cabinets in the meantime because, unfortunately, a lot more batteries burn than you’d like. However, we have also done this for our large containers, i.e. for technical room systems. You can think of them as an overseas container. We are gradually networking all the products that we have in this way, thus offering our customers the possibility of monitoring them. This was not internally driven at all. So yes, we also use that because we are a manufacturing company. But it was always with the background that we want to offer our customer new possibilities, somehow make working out there better and safer and still, of course, as a company, make money with it. We sell the products on the one hand. On the other hand, we now also have subscription models where we also monetize the actual service.

[11:45] Challenges, potentials and status quo – This is what the use case looks like in practice

Now you have just mentioned the business case. Somewhere it is about optimizing inefficient processes for your customer. You no longer have to look at anything on site. The issue of compliance plays into that. Can you elaborate a bit on the business case, especially for your customers? What is the business case behind it?

Jan

With pleasure. Imagine a large, for example, automotive company. In a plant like this, they often have no less than 100 of our collection trays. A collection tray, which sounds nastier than I mean, is more or less a bathtub for hazardous substances. And on this bathtub, for example, there is a 200-liter barrel. And those 100 trays really had to be walked off every week so far. So an employee had to go through all 100 trays with the appropriate equipment, look into each tray and then document in each case, is there a liquid in there? A huge effort.

This collection tray is a plastic collection tray, so to speak, where you have different liquids, depending on the application. So, for example, in the chemical and pharmaceutical environment or something like that?

Jan

Exactly, so ideally this tray is empty. That’s the ideal case, because on this tray it says, well we always call it IBC, which is sort of a 1000 liter cube of liquids or a barrel like that. In Germany, these barrels and also these IBCs must be stored on a so-called collection tray. Imagine that a forklift truck comes along and hits this IBC once and it starts leaking, and then suddenly 1000 liters of oil spill out. That’s just bad, you don’t want to do that, and it’s also causing a lot of trouble in the meantime. We now manufacture quite a few of these collection trays, which is our bread and butter business. I’d say it’s not the most exciting product in terms of technology, but it’s extremely important and customers have to use it in Germany, too. Nevertheless, there is always the issue that someone has to walk there, and that is of course very time-consuming. Now the customer has, for example, 100 trays, on which 1000 liters of a paint are placed each time. What we make possible now is that the customer, on the one hand, stores safely, namely on the tray, and at the same time we save them the work of having to put an employee there who regularly looks at these trays. Because, as I said, ideally nothing happens.

Again looking at the business case also in terms of stakeholders. You have just addressed various issues that are also relevant to security. Compliance is one such issue. What is it all about? What kind of effort do I actually have to put into reporting the stakeholders and also so approval issues and so on? There’s probably a big business case behind saving time there, too, right?

Right. You have to document all of that. You have to file these tray reports on a regular basis. We are also increasingly seeing that large containers, i.e. room systems, need to be monitored. Temperature and humidity have to be verified, especially in the aviation environment this is often an issue because they have been given a requirement. Everything stored there must be monitored for temperature and humidity. These are simply things that are extremely time-consuming to do manually. So that a 24/7 IoT solution is ultimately the only economical way forward at this point. In this way, we help our customers ensure that employees who would otherwise have to do these mindless, somewhat tedious tasks can actually work in a way that adds value. In my view, this is also the greatest benefit of DENIOS Connect.

What I’m also always asked a lot is the monetization behind it. Where to start? You now have quite a wide range of products. Was there one product, for example the collection trays or the containers, where you said, “We’ll start with that because that’s where the biggest pain is,” or how did you do it?

Jan

Yes, exactly, so we looked at all the possible fields together with Thomas and started with the simplest. That would always be our recommendation. You can get carried away very quickly. Then we developed a phased plan and started with a relatively simple case, which is our collection trays, there are quite a few of those out in the field. Then we started to develop an IoT sensor and then brought that into the cloud, built that cloud infrastructure. With each new product, we benefit from what we’ve already done. Every project that comes along now is a little bit easier each time because we’ve just done a lot more groundwork already.

The use cases are always different. Such a container will have other data as well. The use cases are then always different for customers, aren’t they?

Jan

Exactly, they are very, very different. So with the leak sensor, it’s really just leakage. Our room systems report something like temperature or humidity. Does the air conditioner work? Is the door closed? Did someone leave the lights on? Such factors are important there. Then there’s the issue of gas monitoring, in explosion proof areas you don’t want gas and if you do, please don’t cause an explosion. This is quite critical. The last thing we have done now is cabinet monitoring. Imagine a cabinet with many sockets where you can charge the batteries of your power tools. We now also monitor this from the cloud, because it is now negligent if you charge batteries unattended at night. If something happens there, the insurance company won’t pay. Accordingly, this was now a huge issue that we also monitor our loading cabinets there.

Yes, really exciting. We also work in the network with various insurance companies, and there are now several cases that are already emerging in the industry. Thomas, another question for you. You work with very different customers now. Do you have any additions from a data perspective, anything relevant to these projects here? Is it often just classic IoT data, or do you tie other types of data into the cloud?

Thomas

It always depends on the customer, what their requirements are for the data. At DENIOS, it’s manageable in that we don’t aggregate recommendations from the data at the moment; we use the data to trigger events. When I measure a temperature, I just need to know if it is in the normal range. As long as it’s in the normal range, my IoT module doesn’t have to do anything. If the temperature is above it, it must in principle forward the event so that the appropriate conclusions can be drawn from this increased temperature. What I would perhaps have liked to add anyway, in the overall context at DENIOS, is that we don’t just manufacture products here and make them available to the customer. We also manage to provide the customer with security in a complex area. In every company, there is a person responsible for the storage of hazardous materials who must ensure that these processes are adhered to, that the trays are inspected, that this is documented, and that this is also audited. Here it is a support of exactly this function in a company. Now you can go to sleep at night with peace of mind, knowing that the hazardous material trays are actually permanently monitored and not just once a week.

Yes, that’s almost like security-as-a-service. So Jan, this is a bit of a trend where you say, well, you call it DENIOS Connect now, but the bottom line is you’re selling security. In other words, it is also a service that you offer the customer in the long term, simply to buy what I need on the basis of the data. In the end, it goes something like this, doesn’t it?

Jan

Right. That’s the vision, so to speak, that’s where we want to go. I believe that we will get there. At the moment, we see that customers will increasingly accept this. At first there was some concern about security and safety, but it turned out to be very good. We are in a top position there together with ROBIOTIC. But just as you say, we can now really tailor as functions, so to speak, exactly what the customer actually wants. We can alert by SMS or e-mail. A customer can add a new feature, for example, the system calling them. This is a new feature and we can really tailor this solution to exactly what the customer needs for their company in order to become even more secure.

You’ve now said security is a relevant issue that you’ve looked at there. What other technological requirements does the solution have to meet that you said ROBIOTIC has to bring along so that you can be successful together? What are the requirements from your side?

Jan

Exactly, the one thing was really availability and security. We have ensured that. Two issues were still the most challenging. One thing is, we are in an explosive area. This means that the sensor itself must not trigger a spark. This means that the system that HK.Systems had to develop with ROBIOTIC is certified for the so-called Ex Zone 0, which is about the toughest thing you can imagine. Absolutely nothing can go wrong in that case. We managed to do that together. That was a big hurdle, but we overcame it together. The other thing is that, unfortunately, our systems are mainly made of tin. If we look at physics a bit, a tin cage reminds us of a Faraday cage, and radio transmissions are not really working. Still, we had to be able to make phone calls from our system. That’s why, together with ROBIOTIC and HK.Systems, we have taken up the topic of Narrowband IoT, a technology in the 4G range. This technology has the huge advantage of offering extremely good penetration. Even from the underground garage and inside a tin closet, we can still make phone calls and send messages.

[21:51] Solutions, offerings and services – A look at the technologies used

Can you briefly summarize in one or two sentences what exactly the solution can do now? You have now said that it is about the DENIOS Connect product. What’s in there? Thomas, what’s in this solution?

Thomas

It’s all-around surveillance, 24/7. This means that we offer a system that guarantees security 24 hours a day, 7 days a week. We’re sort of using an IoT gateway that we’ve technically developed, which as Jan just said is Ex-Zone 0 certified for the SpillGuards. But with the same hardware that we’re using, we’re also equipping the room systems that have a lot more data points, send a lot more data, make a lot more calls. That is, we have a standard technology that we use in all products that only do other things, so to speak, through the intelligence on the microcontrollers, that is, through the firmware. This means that right from the start we have already committed ourselves to this medium- and long-term vision of making all products IoT-ready in some form or another by using a module which we can then configure accordingly via software for a wide variety of requirements. This is an important component.

This means that you have a configuration of hardware that was also developed according to the requirements of Jan and the team. You have a cloud component, the hardware has a SIM card in it, you can transfer the data there. The whole thing then converges into a cloud, which then works according to security policies and so on. There are, so to speak, three main parts, components, that interact there.

Thomas

Exactly. Important point of data transmission here again, if I may briefly add to that. We are using technologies here that are also capable of facing up to very specific physical laws. However, it is also important to note that this is a standard that can definitely be used worldwide. However, we always have a fallback scenario in the modems for difficult situations; the network is then called CADM and is basically intended as a fallback scenario if you cannot get a connection via this narrowband connection. All the devices are not accessible via any public access point. So we have a private APN, so to speak, and the whole thing is also security-relevant in that it’s an internal VPN, which telecommunications also offers. This means that it encrypts IPsec and in principle you can’t do much with the data at first.

Now you have just mentioned the product behind it, you had just mentioned the SpillGuard. Can you tell us a little bit from your own point of view how you use it now, or what the product can do?

Jan

Yeah, sure, I’d love to. You can think of a SpillGuard like a smoke detector, except that it’s not hanging under the ceiling, but down on the floor. It’s battery operated, so it can be anywhere. It is connected via Narrowband IoT. That was also the charming thing for us in the cooperation with HK.Systems, that we said we get the sensor technology, we get the management of the SIM cards, we get the telecommunications, the cloud and the application. That is the strength of the solution, so to speak, that it includes everything. This then makes it super convenient for the customer, because they don’t have to worry about anything, so to speak. You put the SpillGuard somewhere, the customer presses the on button once more and the rest runs automatically in the background. From this moment, the customer has automatically ensured 24/7 monitoring.

So you have now also monetized the interface and the product behind it. This means that the customer then pays for security in the end, so they want to monitor trays, see malfunctions on containers and so on. This means that, depending on the use case, they will probably have access to one of your systems, where access will then take place and where I can then ensure this accordingly. Depending on the use case, right?

Jan

Exactly. The customer gets access to our DINEOS Connector, which is our portal or IoT platform. In there, they see the services they’ve bought. Now, for example, if they bought this leakage monitoring, they’ll see that one. If they purchased the charging cabinet, which ensures safe battery charging, then they will see that. This is virtually how they build their entire infrastructure, which is somehow security-relevant and needs to be monitored. It’s displayed in the portal step by step. We certainly have customers who already have all the function modules from us and they then have a very comprehensive security solution.

Is it allowed to say what such a thing is worth to the customer? So is there public pricing there or do I have to request that?

Jan

It’s even available on the Internet. With the leakage sensors, you can see that we started relatively early with these fields. We have come up with a model where we say, okay, the product includes five years of telecommunications and the cloud, to make it as easy as possible for the customer. That’s now around 350 euros, so it’s really a relatively inexpensive entry point for the clouds, for the room system.

Per year then probably, or per month?

Jan

No, it’s actually for the five-year term. Product including cloud and telecommunications. Thomas and I joke in between that it is far too cheap, we would have to make it much more expensive. But that’s how we started. In the next products that we made, because we have also evolved, we then separated the hardware from the actual service so that the customer can clearly differentiate what they pay once for the hardware. Then just as you suspected, we switched to an annual model where the customer pays the annual access for their services.

I find the pricing really exciting, because that’s also what many others are thinking about right now, what are customers willing to pay and where is the business case for you? What do I save in the end, too? With you, it’s obvious. Of course, the customer probably has to calculate this for themselves and see what it is worth to them to see the malfunction in the container. Many customers today don’t give this much thought, do they?

Jan

It is becoming increasingly more. There are several factors. Compliance requirements are increasing and employees are very expensive. After all, we are also in favor of fair pay for all people. Accordingly, you have to think carefully about how you assign your employees. It is precisely against this background that we always provide our customers with the ROI calculation, i.e. such a return-on-investment calculation, as an example. I’m with you on that, it greatly facilitates the discussion when you can provide the customer with such guidance. Okay, take a look, this is how you could calculate it internally, and then many customers manage to apply the transfer from our example to their own business.

That’s right, you also have the driver “Compliance” behind it. Other markets don’t have that, which is quite exciting. Last question towards pricing, that depends on how many assets or devices, trays, whatever I want to connect? Or are you guys doing an all-in-one package and saying no matter how many you have, here’s your price?

Jan

We are still relatively robust in that respect at the moment. So with us, it doesn’t matter for now. They pay per sensor at the SpillGuard and per room system. There are no quantity scales or anything like that behind it now. At the moment, customers are fortunately willing to pay for this solution because they have few alternatives. An alternative is always a high manual effort.

Yes, makes sense. Okay. I just now had a few more questions that go in the direction of technology, but you have already answered some of them. The data collection is relatively clear to me. You have the various data points that are then routed through the gateway or IoT sensor beforehand. The whole thing then works via mobile communications. Thomas, you’ve just touched on the whole subject of IP networks and also security, which I think is an important point. Jan, you have a lot of companies that operate in the KRITIS environment. I think for them in particular, it’s relatively important how data is handled. You had already mentioned that earlier, right?

Jan

We also have many large corporations that operate worldwide, which place very high demands on the topic of security and also on our compliance, so that we act accordingly. That’s why it’s always a very, very important point for Thomas and me to really ensure that we offer our customers a very, very reliable solution in terms of availability and regular security assessments.

[30:28] Transferability, scaling and next steps – Here’s how you can use this use case

Yes, very nice. Perfect, then that’s the last question for today, the very last question for today. And that is, I would like to know a little bit more if you would like to share any experiences or best practices from the project with our listeners. Many are now setting out on their journey. We’ll probably have some customers of yours with us then, but maybe others who are in similar situations as you. Do you have any best practice experiences from the project that you would like to share?

Jan

From experience, you need a good and reliable partner. Often it is also difficult with this classic development mentality. You need people who can mentally detach themselves a little bit from writing a classic list of duties and responsibilities and then thinking everything will be great. That’s very much based on people having to talk, come up with ideas and then collaborate meaningfully in a more agile mode. Accordingly, then start small, have a good plan, a good goal where you want to go, but start small and then gradually develop there.

Thomas

However, you also need a corresponding partner on the other side who is a bit driven by innovation, who knows that there are opportunities with new business models, who is willing to take risks, and who, as is the case with DENIOS, has people who are 110 percent committed, from the executive board down to the last employee. This is always a good sign. We usually always start with a maturity workshop, where we discuss requirements and technical possibilities. What is there? There’s always a group of people usually there that I do that with. At DENIOS, that was more than ten. There was a board of directors at the table. All institutions that are important for a digitalization process within a company were present. That showed from the first minute: Wow, they are commited. They are already market leaders in their field and now want to take the next step. The topic of partnership is something that I would like to emphasize very clearly here. I don’t feel like a supplier in the context here, although classically DENIOS is the customer and we are the supplier. But I have the feeling that we are rather the extended workbench here. In principle, we have been adapted as a department that is now responsible for operations and IoT systems. That is a very charming feeling. That’s when you’re ready to go beyond all limits. For those of you out there thinking about it: Be driven by innovation and go full throttle!

I think, Jan, that is also the reason why DENIOS is so successful here. Full commitment behind it. Of course, you also have a market driver that plays a role in this, but you also have to work together and in partnership with the customers and then have such a great partner as HK.Systems or ROBIOTIC. I think this is a very good way to go, not only for today, but also for the future. I would be delighted if we were to join forces again, because the whole issue of security-as-a-service is of course a model that is being thought of on a larger scale. Maybe we can do an update on that in a year or so. I would be very interested to see how this develops with you and what best practices you share.

From my side, it remains for me to say thank you very much for this exciting session. It was totally entertaining, time flew for me. I still have so many questions, but we’ll do that afterwards. Both of you are also with us in the IoT Use Case Network. If anyone is interested, please contact me. Your contacts are included in the show notes. Thank you very much, it was nice to have you on board.

Thomas

Yes, then many thanks to you too, Madeleine. I had a lot of fun. Jan, we talk very, very regularly. So you know how I feel about you. Until then.

Jan

All clear. Exactly, Madeleine, thank you so much for having us here with DENIOS. Yes, and Thomas, I look forward to our next phone call, partnership in action.

Nice closing. Have a nice week. Ciao.

Thomas

All clear. See you then. Bye.

Jan

Ciao!