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MTO/ETO Manufacturing Overview MTO/ETO Manufacturing Issues & Pain Points SAP Solution Overview & Positioning Benefit Areas, KPIs, & Benchmarking Customer Success Stories Summary
Make-to-Order
Multiple Product Variants Mass-Customization
Engineer-to-Order
Customer specific Design/Engineering
MTO/ETO Manufacturing Overview MTO/ETO Manufacturing Issues & Pain Points SAP Solution Overview & Positioning Benefit Areas, KPIs, & Benchmarking Customer Success Stories Summary
Observations
No integrated view on sales orders, projects, production orders purchase orders and stock situation Project planning, engineering and production departments work on different tools without coordination and integrated planning Frequent disturbances in production since parts or capacities for the scheduled orders are not available or orders were scheduled in the past and are not updated
Weak coordination and integration of project planning, engineering and production High stock levels and low capacity utilization since missing parts and capacity overload are not considered in scheduling Expensive short-term corrective action
Frequent changes within the processing of orders since parts are not available or capacities are blocked Frequent disturbances and changes result in long lead times for orders Low transparency, weakly integrated planning and frequent disturbances and changes result in highly variable lead times and frequent delays
236 (11%)
MTO/ETO Manufacturing Overview MTO/ETO Manufacturing Issues & Pain Points SAP Solution Overview & Positioning Benefit Areas, KPIs, & Benchmarking Customer Success Stories Summary
2 3
Quote/Sales Cycle Management Supply Chain Planning Demand & Supply Planning
Manufacturing Engineer-To-Order Project Manufacturing Make-To-Order Manufacturing Make-To-Stock Manufacturing Procurement Strategic / Global Sourcing Operational Procurement Supplier Collaboration Logistics & Distribution Warehouse Management Transportation Management Aftermarket Sales & Service Service Operations Planning and Execution Service Parts Management Warranty & Returns Management Enterprise Management & Support Analytics Financials Human Capital Management Enterprise Asset Management Corporate Services Aftermarket Sales & Service Service Operations Planning and Execution Service Parts Management
5 6
Project Manufacturing
SAP APO
Project Scheduling & Capacity Planning
SAP ERP
Project Structuring Engineering
Production Planning and Control SAP ERP SAP SCM DP SNP GATP PP/DS TP/VS SNC ICH EM MM SD PP LES
SAP NetWeaver
This scenario for industrial machinery & components and discrete manufacturers supports sales, engineering and manufacturing for complex industrial products
Integration of variant configuration and engineering with order specific bills-of-material between CRM, ERP and SCM Determination of delivery date considering material and capacity constraints Constraint based production planning and scheduling feasible plans
Production Planning and Control
Order Billing
SAP ERP
SAP SCM
DP
SNP
GATP
PP/DS
TP/VS
SNC
ICH
EM
MM
SD
PP
LES
SAP NetWeaver
Scenario Enhancements in SAP SCM 5.0 (applicable for MTO and ETO)
Planning with critical path in a multi-level order network including project orders, sales orders, production orders, planned orders, requisitions Multi-level scheduling with buffer times Reduction of buffer times Earliest and latest dates in planned orders and production orders
Business Value
Enhanced multi-level planning and adaptiveness in bottleneck situations order-driven manufacturing Improved mid- and short-term scheduling and capacity planning Smooth transition from infinite to finite schedules Higher flexibility in capacity planning Better resource utilization, reduced lead times, improved on-time delivery
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Plant manager, maintenance technician, quality inspector dashboards Manufacturing analytics and performance management Improved Mobile Asset Management Shop-Floor Integration
ANSI/ISA S95 compliance Manufacturing Partner Program xApp MII - Manufacturing Integration & Intelligence (Lighthammer acquisition)
Discrete Industries / Mill Products (DIMP) industry functionality can now be activated in SAP ECC 6.0, no separate SAP ECC DIMP release
P-2
PLM: Network
Task B Task A
Task D Task C
Task A
CIF CIF
Task D Task C
6200 Drive
6200 Drive
PP: Order
6200 Drive 6220 Engine
APO: PDS/PPM
6220 Engine
CIF
6200 Drive
PLM: Materials
6000 Crane 6100 Lifting Gear 6200 Drive 6210 Transmission 6220 Engine 6229 Shaft
MM/SRM: Requisition
10: 6229 Shaft 1PC
CIF
PP/DS: Requisition
10: 6229 Shaft 1PC
APO: Products
6000 Crane 6100 Lifting Gear 6200 Drive 6210 Engine 6220 Transmission 6229 Shaft
MM-IV: Inventory
Plant Stock Order Stock Project Stock
PP/DS: Inventory
Plant Stock Order Stock Project Stock
SAP ERP
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WBS structure
Jan
Feb
March
Apr
May
June
July
Networks structure
Production Planning
Detailed planning (order routing) Specific capacities (machine) Capacity reduction through confirmation
Simulative Project Dispatching in SAP APO Example: Find Delivery Date for Customer Quotation
Version 000 Active Version Version 001 Simulation versions
Copy WBS BOM from existing material BOM / WBS BOM Edit/Add/Delete components in WBS BOM Copy WBS routing from existing material routing / WBS routing Engineer and insert new assemblies for specific assembly
Material BOM
PM-1000
Material Routing
Op. 10
Op. 20
Op. 30
WBS BOM
PM-1000
WBS Routing
Op. 10
Op. 20
Op. 30
Controlling
Engineer-to-Order Project Manufacturing Sense & Respond Approach for Adaptive Manufacturing
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
Project Planning
Manufacturing
Procurement / Warehouse
Business Benefits
Capacity feasible plan and stable sequence of orders in current week Capacity optimized plan in the short term Infinite plan with least delay and orders with buffers for flexibility in mid-term, where it is easy to shift/extend capacity
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Production Planning with Optimization and Backlog Resolution Batch Run Plan Version Simulation Versions Step Function 1 Material Requirements Planning (BOM Explosion) Finite Backlog Resolution on bottleneck resources (current week) Finite Optimization on bottleneck resources (short term) Infinite Optimization (Bottom Up) in mid/long term
Assembly Order
30 20 10 10 1 1 1 1 1 1
Production Orders
10 10
20
10
External Procurement
WBS BOM
PM-1000
WBS Routing
Op. 10 Op. 20 Op. 30
Material Routing
Optimization
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
Optimization
Genetic Algorithms / Constraint Propagation Multi-Criteria Optimization Delay, Lead Time, Setup Time/Cost Constraints Due Date, Activity/Order relations, Material availability, Capacity Availability, Finite optimization in the short term Infinite optimization (bottom up) in the mid/long term planning with buffers to increase flexibility
Business Benefits
Feasible, capacity optimized plan in the short term Delivery date optimized infinite plan in the mid/long term
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Production Scheduling
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing
New in SCM 5.0 Multi-level forwards/backwards scheduling Interactive scheduling to reduce capacity overload
Evaluate resource utilization, filter on overload Alternative work centers, sequences, production versions Switch to external procurement, subcontracting Work overtime, run additional shifts
Production Scheduling
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing
Planned Orders
Routings
Production Orders
Manufacturing
Production Capacities
Procurement / Warehouse
Stock
Mechanical Manufacturing
Electrical Manufacturing
Assembly Order
30 20 10 (+10) Excess 20 2 10 2 (-10) Shortage 2 1 1 1
Production Orders
20
20
Purchase Orders
10
Mechanical Manufacturing
Problem in assembly
Customer specific
Delay
Electrical Manufacturing
Production Scheduling
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing
New in SCM 5.0 Multi-level forwards/backwards scheduling Interactive scheduling to reduce capacity overload
Evaluate resource utilization, filter on overload Alternative work centers, sequences, production versions Switch to external procurement, subcontracting Work overtime, run additional shifts
Filtered to the activities in the order context of the project: Mark project order Button single/multi-level up/down Button Invert selection Button Hide selection Filter on order context of the project
Reduce minimum interval between orders or between operations manually Call mass maintenance
Mass maintenance to reduce or increase by absolute value, %, set to fixed value, set to process-related minimum interval (+ x%)
Example: All planning related intervals between orders and operations on the critical path were reduced to the processrelated value to reduce overall lead time
No more problem with orders in the past on previously critical path Detect new critical path
Example: No further reduction possible, all planning-related values were already reduced to processrelated values
Reschedule order context multi-level forwards to determine new realistic end date (heuristic)
Production Scheduling
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing
New in SCM 5.0 Multi-level forwards/backwards scheduling Interactive scheduling to reduce capacity overload
Evaluate resource utilization, filter on overload Alternative work centers, sequences, production versions Switch to external procurement, subcontracting Work overtime, run additional shifts
Manufacturing
Capacity Load
Engineering
Lathe working
Assembly
Alternative Work Center / Excess Work Alternative Production Version External Procurement / Subcontracting Stock Transfer
Manufacturing Execution
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
SAP SCM
SAP ERP
MES
Manufacturing Execution
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up
SAP SCM
SAP ERP
MES
Business Benefits
Real-word awareness actively communicated via dashboards and alerts allowing to respond quickly and resolve the exception
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Manufacturing Analytics e.g. capacity utilization and equipment efficiency reporting for mid- and short term decision support SAP NetWeaver Business Intelligence enables to integrate and analyze relevant and timely information
Manufacturing Dashboards Decision support for plant manager, production supervisor, quality inspector, including partner applications SAP NetWeaver Enterprise Portal role based web access to applications in different systems including partners
Manufacturing Integration integrates manufacturing documents from the shop floor through partner systems to the ERP system SAP NetWeaver Exchange Infrastructure technology basis for the integration
Order/Project Analytics provides information on past delivery performance and order confirmation status SAP NetWeaver Business Intelligence enables to integrate and analyze relevant and timely information
Warehousing & RFID automates the logistics process flow and improves visibility SAP NetWeaver Multi-Channel Access Auto-ID Infrastructure as the technology basis
MTO/ETO Manufacturing Overview MTO/ETO Manufacturing Issues & Pain Points SAP Solution Overview & Positioning Benefit Areas, KPIs, & Benchmarking Customer Success Stories Summary
Enablers
Operating cost
Reduced costs for production planning Less disturbances and short-term corrective action
Working capital
Reduction in inventory levels Improved capacity utilization Feasible scheduling and capacity planning Improved planning, less disturbances and changes in manufacturing
% impact
Operating cost
Reduced backlogged production orders Reduced Express Costs -68% -27%
Working capital
Reduction in inventory level 3.1%
Benefits at Ortlinghaus*
Operating cost
Expected increased Machine Utilization
% impact
+5%-10%
* Source: Success Stories and Customer Presentations of Leybold Vacuum and Ortlinghaus
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MTO/ETO Manufacturing Overview MTO/ETO Manufacturing Issues & Pain Points SAP Solution Overview & Positioning Benefit Areas, KPIs, & Benchmarking Customer Success Stories Summary
Successful Customers Using mySAP SCM for Advanced Manufacturing Planning (Examples)
Project Manufacturing, Demand Planning Multi-level ATP Project Manufacturing Project Manufacturing Live Pre-Solution Live Pre-Solution Presentation (D) Press Release
In Implementation Presentation (D) Quote in SAP Info SCM 4.0/4.1 Success Story
Projects Manufacturing Live in New Product Development Pre-Solution MTO Manufacturing Order BOM in Implement. MTO Manufacturing Variant Configuration Demand Planning (DP/SNP) Production Planning Demand Planning (DP/SNP) Available-to-Promise Demand Planning Available-to-Promise (ATP)
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Presentation (D) Success Story planned Success Story (D), Presentation (E, D) Webcast E / D Success Story (D), Presentation, Webcast E / D SAP Info Article E / D Success Slide Case Study E / D Success Slide
Implementation Highlights
Demand forecasting on components Multi-level ATP check against components Advanced Manufacturing Planning for Assemble-to-Order- and Project Manufacturing
Advantages
Service level > 95% Constant, high capacity utilization Fast reaction by interactive re-scheduling Low TCO, hardware savings
Components
SAP SCM (APO), SAP R/3
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Successful Customers using mySAP SCM Advanced Planning & Optimization (APO) - partial list
MTO/ETO Manufacturing Overview MTO/ETO Manufacturing Issues & Pain Points SAP Solution Overview & Positioning Benefit Areas, KPIs, & Benchmarking Customer Success Stories Summary
Further improvements
Earliest and latest dates calculation for orders Selection in planning board: single/multi level up/down, invert selection and hide to filter on order context Sort by delay or other fields in order context Filter in order context for different alert types
Questions?
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