Extending solution value beyond boundaries

of ERP

Stuart Bell
Director, Strategic Market Development
SAP Asia Pte Ltd

Agenda

Introduction
Market trend: Manafacturing & ERP
SAP view
Collaboration in its many forms

Business Value Beyond ERP

Customer and market pressures

How is this being enabled
What benefits does it bring to the customer
Impact at shopfloor level
Why partnerships

Spend analysis beyond ERP

Customer
Management

14%
11%

34%
39%

ERP
Product Lifecycle
Management
Sourcing and
Procurement
Supply Chain
Management

Desktop software

Most Important (n=442)

many MES vendors growing

revenue by 30% to 40% in the past
18 months.
The Enterprise Manufacturing
Intelligence (EMI) market gained
credibility with SAPs acquisition of
the leading EMI vendor,
Lighthammer.

5%
4%
3%
3%
15%
12%

Manufacturing
Operations

2005 - manufacturing rediscovered

and redefined.

21%
22%
9%
10%

Largest Dollar (n=439)

Momentum is going to continue to

build in 2006.
Colin Masson
Manufacturing becomes an
Enterprise Software Category in 2006,
AMR Alert, December 21st, 2005

2006 Enterprise Software Investment Priorities

Most strategically important software investment for 2006
Largest dollar spend in 2006
Business Processes to Address
with Investment

Production performance monitoring

(yield, cycle times, OEE, etc.)
Execution of production orders
Shop floor work order/recipe scheduling/sequencing
Business process integration with ERP, PLM, and LIMS
Asset maintenance and equipment reliability
Product quality and compliance management
Product and process traceability and genealogy
RIFD (workflow management)

Takeaway

Design an Architecture That Integrates

Manufacturing Apps together, and with ERP
Source: AMR Research Manufacturing Survey, 2006

Business Value Beyond ERP

Deliver holistic manufacturing strategy from shop floor to enterprise with key elements below:

Business Value:
MES Trends and Market Forces
External
ExternalForces
ForcesFueling
FuelingMES
MES
Market
Market

Enable
Enablethe
the

production
production
worker
worker

Leverage SAP position in

manufacturing and supply
chain execution

Whitespace
Whitespaceopportunity
opportunity---Business
Process
Business ProcessPerformance
Performance
Gaps
Gapswithin
withinManufacturing
Manufacturing
Applications
ApplicationsSpace
Space

Deliver increased control, accountability,

quality & compliance

Integrating enterprise planning with

execution through one harmonized platform

Lower TCO by standardizing on a single

MES platform across all plants

Collaboration:
Competition:
Competition:
Market
Market
Consolidates
Consolidates

Manufacturing environments fragmented

SAP will collaborate with partners via a

published MES roadmap and establish
industry process and data standards

Automation and control vendors and other

ISVs will complement and fill key white
spaces (vertical and functional)

MES Enterprise Architecture Beyond ERP with SAP

Process Environments

Discrete Environments

ERP

ERP

PP-PI / BM

MES

xMII

xMII

Shop Floor Automation and Control

Process Platform

Level 4

MySAP ERP
Kanban
Control

xMII
Bundle

xLEAN
Level 3

xMII

Supplier
Collaboration

xLEAN
Kanban Execution

MES Level

Level 2

Machine Level

Level 1

Components, Sensors, PLC

Partners
e.g. OSI

SAP Ecosystem Collaborative Architecture in Action

Aim: Turning breakthrough ideas into solutions
Reseller Channel
Extends Market reach
in SME and beyond

Refocusing on core
business expertise

Resellers

Systems Integrators, BPOs

Collaborative Innovation

Optimized IT Stack
Delivers Simplicity

TechEd

Trusted Engagement
(Business and Technical)

Industry Standards

Developers
Industry/Business Process Experts

SAP NetWeaver Fund

Endorsed Business
Solution

Software Solution Providers

Technology Titans

Enterprise SOA Ecosystem & Industry Value Network

Direction: Enterprise SOA
Influence Council

Collaboration: Business Process Expert

Community

Co-Innovation: Industry Value Network

Development: Enterprise Service

Community

Industry Value Network Collaborative Delivery of Benefits

Co-Innovation

The Industry Value Networks brings together customers,

partners and SAP focused on solving high value business
needs anchored by SAP NetWeaver as the common platform to
enable collaborative innovation and complete industry
solutions.
Provide
end-to-end industry business solutions
Establish
industry thought leadership
Deliver
innovative, high impact, joint SAP +
Partner Industry solution for customers
Leverage
SAP NetWeaver, ESA, and industry
standards

Manufacturing and Enterprise business processes need to be synchronized

ERP

DISCONNEC
T

DISCONNE
CT

MES

SFAC*

How are we hitting our targets?

Total Cost of Production and Variance
Labor and Resource Productivity
Order Fill Rates and Cycle Times
Fixed and Variable Asset Utilization

Whats happening during every shift?

Material availability and consumption
Capacity availability and utilization
Schedule changes
Product Genealogy tracking and QM

Whats happening at each line?

Cycle Times / Operating Efficiencies
Machine Breakdowns / Unplanned Downtime
Quality Index
Predictive Maintenance requirements
SFAC - Shop Floor Automation and Control Systems
MES Manufacturing Execution Systems
DCS Distributed Control Systems

SAP synchronizes manufacturing operations heterogeneous IT landscapes

Enterprise

Check resources
Create mfg plan
Scheduling
Release work order
Close order
Shipping and logistics

Manufacturing
Intelligence
Dashboards

SAP Manufacturing
(mySAP ERP)
XI
SAP xMII
Manufacturing Intelligence
Manufacturing Integration

SAP BI

Plan work orders

Other SAP Bus. Solu tions

SAP NETWEAVER

Real-time events/alerts
Order status
Charge rates
Life of inventory
Yields
Completions and usage
Start and stop times
Quality and lab data
Process history
Best practice deviations
Efficiency
Downtime tracking
Rework scrap rates

How does SAP xMII enable Manufacturing Excellence?

Analytics: Long Execution Time of Manufacturing orders

SAP ERP

Process Historian via SAP xMII

Control system via SAP xMII

How does SAP xMII enable Manufacturing Excellence?

SAP ERP

SAP xMII
Calculated

WIP Orders with

Work center
KPIs

SAP Analytics for Manufacturing Snapshot OEE Availability

Leveraging Existing Manufacturing Assets and Systems

SAP xMII Enablers
Adaptive
Manufacturing
Manufacturing Operations

Manufacturing Excellence

SAP xMII

Manuf. Synchronization

(SAP ERP)

Manufacturing Levers
Improved Order Fill Rates & On-Time
Shipments improves Customer Sat.

Higher Quality and Throughput

Higher Performance and Productivity

Per Employee, per Asset, per Plant

Financial Objectives

Minimize Reject, Rework, Overtime &

Exception Resolution Costs & Waste

Lower Quality and Compliance related

Costs and Minimize Penalties

Improve Asset Utilization (OEE/ROA)

Continuously improve Processes (Six

Sigma, First Time Right)

Better adherence to Budgets and Cost

Targets
Eliminate redundant MES to ERP
Manual Data Entry Costs

Convert Excess Inventory into Cash

Flow thru Better Visibility

Lower Total-Cost-of-Ownership (TCO) on

your manufacturing infrastructure

Faster time-to-value on SAP ERP to Plant

Systems Integration

Rationalize Underperforming Assets and

Plants

Revenues
Profits
Operating
Costs

Working
Capital
Invested
Capital

Manufacturing
Integration

Manufacturing
Intelligence

Increase
your
ROI on
your
Manuf.
Assets &
Systems

Fixed
Capital

Real-World Scenario.

After batch execution, SAP xMII aggregates

production performance data and
automatically updates SAP ERP inventory

Based on SFA sensor data and Six Sigma

control analysis, SAP xMII detects quality
problem, generates alert and quarantines
batch in SAP ERP

Production quality alert appears in Plant

Managers Dashboard and he drills down
into alert to performs a rapid root cause
analysis of the problem via SAP xMII

Plant Manager initiates corrective action to

fix the quality problem and resolve
exception before it becomes customer
issue

Alert
!
Manufacturing
Intelligence
Dashboards

SAP Manufacturing
(mySAP ERP)

SAP xMII
Manufacturing Intelligence

SAP BI

Other SAP Bus. Solu tions

SAP NETWEAVER

Production schedule is sent from SAP ERP

to SAP xMII, transmitted to the MES system
and displayed on Mfg. Dashboard

Manufacturing Integration

These outcomes can be delivered faster and cheaper with partnerships