Bosch Rexroth CytroBox Case Study: Machine-as-a-Service

Photo: CytroBox

We expect servitization to become a major trend in production business models. We will see factories that are shared between various manufacturers. Industrial manufacturers will no longer buy equipment in one go. The trend is moving from a paid-and-done approach to pay-per-use and servitization of hardware and machinery.

This article will demonstrate Machine-as-a-Service use case Bosch Rexroth built on top of ZkSystems blockchain.

Key takeaways:

  • Servitization of machines is a major trend: it produces up to 30% more revenue for the machine owners and allows for flexible usage of the machines
  • Blockchain* is used to provide a tamper-proof history of the machine’s usage, thus enabling servitization use cases which were too risky or intransparent prior to blockchain
  • ZkSystems’ blockchain is used by Bosch Rexroth to to explore the potentials of servitization of the hydraulic power unit CytroBox
You haven’t heard about blockchain yet? Here’s a brief explanation.

Moving towards servitization

The servitization is a transformation process in which a manufacturing company transitions from selling products to offering services. One example is Xerox moving from selling printers to offering ‘managed print services’ and other ‘intelligent workplace services’ to its customers. These services include a bundle of their apps and tools for small and medium-sized businesses like sending documents to the cloud and using translator services.

Another example is MAN Truck and Bus UK offering contracts on a pence-per-kilometer pricing model for their customers’ shipments, which helped increase their market share from 8% to 12%.

Why servitize?

You may ask yourself what are the benefits of servitizing machines instead of selling or renting them? There are two major problems involved in selling or renting machines.

Problem with selling the machines:
The first problem lies on the side of the customer. Industrial machines are a very large investment (an industrial 3D printer can cost more than $1 million and hydraulics aggregates cost between $10.000 and 100.000). This is a dealbreaker for many customers, who cannot allocate so much capital upfront. That’s why many customers are ready to lease for a higher overall price since it gives them a significant advantage in terms of liquidity and cash.

Problem with renting the machines:
The second problem lies on the side of the machine owner. With a powerful combination of leasing and pay-per-use model, machine owners can make up to 30 % more revenues, but the risk of machines being damaged or worn out is very high.

Blockchain-powered servitization is a win-win:
The blockchain-powered servitization of industrial machines answers both the machine owner’s and machine user’s problems. It makes the machine usage more transparent, calculable and flexible for both the machine user and the machine owner. It also grants the machine owner access to valuable usage data, allowing them to offer additional services such as predictive maintenance or usage-based incentives.

Before we get into detail on how servitization can be empowered by blockchain, let’s have a look at the machine we used our own technology on.

Bosch Rexroth CytroBox

Foto: CytroBox

CytroBox is a hydraulic power unit manufactured by Bosch Rexroth. Hydraulic power units can convert electrical power into pressure and flow of an hydraulic fluid to generate movement and force within an machine. They are used in a broad variety of applications: e.g., presses and tooling machines.

The CytroBox is designed for a power range up to 33kW at a minimal space. Thanks to it highly modular innovative design it can be operated energy-efficient and at very low noise levels.

State of the art automation technology and several sensor packages enable easy integration into modern machine concepts.

Furthermore the CytroBox comes with a IoT Service — CytroConnect. CytroConnect solves typical Maintenance and Diagnosis use cases — all information on condition of the drive and sensors easy at hand, Plug&Run.

ZkSystems’ solution

ZkSystems’ blockchain provides the right infrastructure to maintain a tamper-proof record of the data gathered via the CytroBox. Sensor data of the hydraulic cycles are tracked on the blockchain, so that Rexroth does not run the risk of renting the machines and using them up as a result of months or years of intensive usage.

“Scalable and integration-ready blockchain by ZkSystems is the right technology for us to develop innovative Industrial IoT business models.”
- Veronika Brandt, Head of IoT Business Consulting at Bosch Software Innovations

With the Machine-as-a-Service model, the customers pay just for their usage and the machine provider has precise and reliable information about the machine’s usage. This way, Rexroth can develop various pay-per-use scenarios to explore their Business potential together with partners and customers.

While pure token transactions sound great and offer automation, one has to face reality as well. Many enterprises today are not ready to jump onto token transactions. It makes sense because they have a heavy legacy of IT systems and processes. Instead of building yet another siloed application, we found a way to seamlessly and painlessly integrate this into the corporate world. With ZkSystems we have built interfaces to ERP and enterprise payment and billing systems. The payment records are collected and triggered at the end of the day or week via enterprise payment systems.

The use case above can enable very specific pricing models such as pay-per-cycle, pay-per-used-kWh or pay-per-operation-hour. Using ZkSystems’ highly scalable and integration-ready blockchain can further provide customers with predictive maintenance, performance-based warranties and usage-based automation via smart contracts.

Meet us at the Bosch ConnectedWorld and Bosch ConnectedExperience

Last year’s Bosch ConnectedExperience (Source: Pixabay, © Geralt)

You can discover the pre-implemented version of this use case live in action during the Bosch ConnectedExperience, Europe’s largest IoT hackathon for corporations and one of the world’s most remarkable IoT hackathons. Over three days, backend and frontend developers, product owners, product managers, UX experts, and innovators will meet to explore the future shaping connected products, apps, and services.

ZkSystems is taking part at the Manufacturing Hack Challenge with industry leaders like Bosch Connected Industry, Bosch Rexroth and Microsoft Azure. In addition to our Nexo use case, you will get exclusive insights into the following use cases:

  • Pay-per-use models for connected machines
    Pay-per-use is a very important trend for the developing economy of autonomous machines. It produces 30% higher revenues, enables servitization of machines and more.
  • Incentives and gamification
    One of the greatest advantages of blockchain is that it can provide incentives for its users. For example, prices which are based on electricity usage and pegged to the saved kWh.
  • Smart Factory as a service
    The future of Smart Factories are production lines which can be shared between many different manufacturers. Mass customization will enable manufacturers to share the same production line for a huge variety of use cases.
  • Digital twin 
    A digital copy of the physical items on the blockchain can enable a gapless history of all the data structured and identified for each and every tool.

Among some of the most remarkable innovations at the Bosch ConnectedExperience you will also discover the Nexeed Production Performance Manager, the Industry 4.0 software solution for systematic production improvement. The Production Performance Manager enables the development of Industry 4.0 applications by harmonizing production data, extracting customized information from this data and applying production knowledge automatically.

We are looking forward to meeting you in person at the Bosch ConnectedExperience and getting your input on the future of the machine economy. You are also welcome to drop us a line at info@zksystems.io