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SKF secures €430 Million Loan to Speed Up GREEN TRANSFORMATION – Heavy Investments in R&D Within Electromobility and Energy Technology

SUSTAINABLE INNOVATION in PTC and SIEMENS environments and in SAP's CLOUD. The ball bearing giant SKF invests heavily in developing solutions that can contribute to the green transition. This is the background to why they have secured a Euro 430 million loan from the EIB, the European Investment Bank, for a project where the focus is on renewable energy and electromobility.
For the money, SKF intends to support R&D to develop its technology in ball bearing, sealing and lubrication systems over the next four years at facilities in Austria, France, Germany, Italy, the Netherlands and Sweden.
So, how big is the green potential in ball bearings? Bigger than you might think. The thing is, if there are ball bearings, there is friction, and currently around 20 percent of global energy is used to overcome friction. It is one of the more exciting angles of attack in what they now intend to develop.
The SKF domains that will be covered by the EIB money are materials research, product design, advanced manufacturing processes, digitization and predictive technology. In the press material, two examples are pointed out above all: One is to reduce friction and extend the maintenance intervals in electric traction systems, another is to improve the efficiency of wind turbine gearboxes.
"The purpose of our strategy is to create significant value for customers in the target markets through sustainable innovation, increased efficiency and flexibility," says SKF CEO Rickard Gustafson.
On the road to a more sustainable world, the system environments for industrial IT support play important roles. How do they look at SKF? When it comes to the PLM and business system environment, the green investment lands in a fairly diversified landscape. They have created a product development environment that is primarily based on PTC tools when it comes to basic product design in CAD (Creo) and PDM (Windchill), and also worked with Siemens Digital Industries Closed-Loop Manufacturing concept when it comes to manufacturing setup. Added to this is SAP on ERP and tangential PLM-related pieces and now most recently a cloud migration of the on premise business system SAP S/4HANA.
Three heavy pillars in the systems SKF worked with have been about digital twins of the products, the production lines, and of products in the customer's service.
Moreover, SAP has an interesting position regarding the environmental aspects: SKF chose this summer to migrate S/4HANA to the cloud with SAP's bridge "RISE with SAP". The aim is to, "simplify the IT infrastructure and use new technologies such as AI and machine learning." Through the move to the cloud, SKF aims to adapt to new sustainability policies and regulatory changes - and use green carbon accounting ("green ledger"). In today’s article we take a closer look at the SAP installation in particular, but also generally at the company's PLM setup.

In general, the SKF CEO, Rickard Gustafson, states that the company, as a world-leading supplier of innovative solutions in ball bearings and related solutions, sees it as an essential part of its mission to help the industry become more competitive and sustainable.

Friction’s energy consumption potential
It may seem a little far-fetched to assign SKF’s ball bearings a decisive role in this, but there are factors that suggest that the importance of the company’s contribution is much more than one would generally think. According to SKF, around 20 percent of global energy is currently used to overcome friction.

An example of what SKF intends to use the borrowed EIB money for is to improve the efficiency of wind turbine gearboxes. In the picture, a 3D model of such a solution. The gearbox in a wind turbine must cope with a range of demanding and varying conditions. Loads, stresses, vibrations and temperatures are constantly changing. Components in the gearbox, such as bearings, must withstand such an environment. The successful development and operation of wind turbine gearboxes involves design, modeling and testing; condition monitoring and maintenance activities, as well as engineering and lubrication consultancy activities.

In parallel, SKF’s products are found in a range of businesses where ball bearings and friction are part in a variety of products for a range of different industries, such as transport, manufacturing, energy, agriculture, food and drink, to mention a few. By reducing friction to maintain optimal temperature and speed in efficient production, large energy gains could, at least theoretically, be taken home. Especially if you add to this that those who use e.g. ball bearings in their solutions also make the products lighter, more efficient, more durable and predictively repairable, there is a great potential to reap significant energy gains.

There is undeniably an interesting logic in the reasoning in this from SKF’s side. If it succeeds in its objectives–including the now announced green research initiatives–to help its customers to improve the performance of their rotating equipment and thus in several perspectives reduce their environmental impact, the development of related energy consumption can be led onto an environmentally more sustainable path than today’s. The company’s offer around rotating shafts, which therefore includes things like ball bearings, bearings, seals, lubrication systems, condition monitoring and predictive services, can mean great progress in this perspective.

From local installation to the cloud
When SKF announced this summer that it had chosen ”RISE with SAP” to switch to a cloud-based business system, the aim was to future-proof its global operations, simplify its IT infrastructure and use new technologies such as artificial intelligence and machine learning.
The “RISE with SAP” offering is a managed cloud service that helps organizations using on-premise ERP software – including SAP ERP, SAP ECC and SAP S/4HANA – migrate to the cloud securely and smoothly. By moving to the cloud, SKF will, in short, be better equipped to manage its global business operations. On the plus side of the sustainability account regarding the capabilities of the business system in the cloud, it can also be noted that the company will be able to adapt to new sustainability policies and rule changes – and use green carbon accounting.

”The transition from a traditional local solution to the cloud shows our desire to make the business more efficient. By integrating the existing SAP S/4HANA solution into our advanced cloud strategy, we will be able to strengthen critical business areas such as finance, spare parts supply, warehousing, supply chains and manufacturing. Moving to the cloud is a choice that is in line with SKF’s philosophy of pushing the boundaries and supporting the development towards a sustainable future,” Pedro de Freitas, Head of Global Digital Services at SKF, commented on the matter in connection with the SAP investment being announced this summer.
By moving to SAP S/4HANA Cloud using RISE with SAP, he asserted, “SKF will have a smooth and secure migration of its on-premises business system – while being able to make data-driven business decisions in real time using built-in intelligence.”

One effect of this, SAP claims, is that relevant, reliable and responsible business-driven AI will be built directly into SKF’s processes and aligned with internal AI strategies.
”With our AI and cloud-powered solutions, we help our customers become more efficient, resilient and sustainable. We have had a strong partnership for many years, and we will continue to work closely with SKF to identify new innovative solutions and opportunities to streamline processes,” said Emmanuel Raptopoulos, President of SAP EMEA.

EIB’s Thomas Östros and SKF’s Rickard Gustafson sign the loan documents.

In line with EU’s sustainability goals
One way to create secure long-term financing for SKF’s green investment is the five billion dollar loan that the EIB has granted the ball bearing giant.
”This loan is a sign of our commitment to promote innovation for a greener future,” says EIB’s VP, Thomas Östros. ”SKF has been a driving force for technological progress for over 100 years and conducts advanced research in bearing and sealing technology that is crucial for renewable energy and electromobility, which is in line with our shared vision of a sustainable Europe.”

Östros further points out that the loan is in line with the EU’s goal of promoting sustainable development and green technology, which contributes to the organization’s goals in the area of ​​climate action and environmental sustainability. The resources provided also promote European policies such as Horizon Europe, the EU’s flagship program to support research and innovation, and the REPowerEU plan to accelerate Europe’s transition from fossil fuels to renewable energy.

All projects financed by the EIB Group are in line with the Paris Agreement.

Simulation support in practice with step-by-step modeling via SKF’s SimPro Quick solution. One of the key values ​​of SKF is the company’s core expertise and knowledge of the use of bearings in rotating machines. By embedding this expertise in powerful simulation software with a simple user interface, combined with the ability to select bearings directly from SKF’s latest rolling bearing catalog, customers can be given great user experiences. One point of this is that every layer arrangement and use case is different, and a large number of factors can affect performance. With SimPro Quick, you can optimize the design of the bearing arrangement through a user-friendly, step-by-step process.

PLM in the service of the environment
Finally, a few words about SKF and the company’s PLM and shop floor automation arsenal, which of course have important roles in the company’s green product development track.
A concept the company put a lot of time and resources into is based on three types of digital twins around product, plant and twin applications at the end customers. A major point with the various digital twins is that they can be simulated already as digital 3D models, which for example means that you can functionally test, optimize and validate product design, manufacturing processes and even with the products in operation at the end customer even before they exist in physical form; when it is still relatively cheap to make changes and adaptations. This is how the digital twin concept is intended:

1. Digital twins of the product. Here, SKF works with PTC’s solutions Creo (CAD) and Windchill PDM. But it also has other PTC elements, such as Navigate and Kepware, where the former solution gives stakeholders throughout the organization easy access to data stored in the company’s systems; while the Kepware portfolio connects various legacy OT (Operational Technology) devices with software applications.

2. Digital twins of the production lines. Here, they have worked, among other things, with their proprietary so-called World Class Manufacturing program, based on Siemens Closed-Loop Manufacturing concept and Siemens Xcelerator software, primarily Teamcenter.

3. Digital twin applications related to the product in the hands of customers, where SKF’s service center (”Rotation Services”) is responsible for monitoring, support, maintenance and optimization.

Concrete environmental capabilities in both Siemens and PTC’s PLM suites
Both these actors have in recent years developed far-reaching support for sustainable product development and production, as shown in PLM&ERP News’ series of interviews with the major PLM developers’ sustainability leaders, for example Siemens Digital Industries’ ”environmental VP”, Eryn Devola. Among the company’s latest initiatives in the area is, for example, the Teamcenter Carbon Footprint Calculator, which has become part of the cPDm software (collaborative Product Definition management), Teamcenter’s solution for product cost management. The module is also part of the Xcelerator platform and enables organizations to measure, simulate, reduce and track their product’s carbon footprint early in the development phase.

On the PTC page, for example, we’ve interviewed Dave Duncan, VP of sustainability within the company, who claimed that sustainability has become an integral part of PTC’s portfolio. It already starts with requirements management, he said, among other things, and can affect regulations from a supervisory authority, via own requirements, or requirements from a certain company. These requirements can be explicitly linked to the design and how it is used, which will ensure that designers respect the design intent as stated in the requirements statement. For the products you design and manufacture, there are also material databases, such as Ansys Granta or Higgs Material Database. It’s a well-invested and growing field, with companies providing service catalogs of materials with curated data that enable designers to understand its recyclability, REACH and RoHS compliance, and the carbon embodied in its extraction and creation. Once the material is selected, these attributes can be pulled into the PLM systems through CAD during the design stage. It can then be rolled up into the assemblies and BOMs in Windchill to understand all selected materials and the total or hazardous material footprint.

For purchased components, there are similar catalogs, such as SiliconExpert or Octopart, where you can choose capacitors, bolts, screws or other components with similarly selected information about how recyclable the material is: What is it made of? How dangerous is it? What are its risks at the component level in terms of carbon and supply chains?

All material and component information in the attributes covered by these databases can be associative and pluggable.

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