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SAP for Industrial Machinery & Components

Make-to-Order Manufacturing and Engineer-to-Order Project Manufacturing Enhancements SCM 5.0


Harald Vogel
Solution Manager SAP for IM&C, SAP AG

MTO/ETO Manufacturing Overview MTO/ETO Manufacturing Issues & Pain Points SAP Solution Overview & Positioning Benefit Areas, KPIs, & Benchmarking Customer Success Stories Summary

MTS, MTO, ETO Manufacturing Models


Make-to-Stock
Standard Products no Product Variants

Make-to-Order
Multiple Product Variants Mass-Customization

Engineer-to-Order
Customer specific Design/Engineering

Mix of manufacturing models within a company are common

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Market Trends and Industry Needs

Demand for product variety and shorter lead times


Need to offer multiple product configurations, often also custom specific design Handle changing customer requirements Highly automated and integrated MTO/ATO processes ETO processes where required with improved project planning

Margin pressure through globalization and increased competition


Requirement of automation for cost reduction Advanced planning required to achieve high resource utilization

Outsourcing / off shore manufacturing


Increasingly complex supply network Need for integration of suppliers into supply network

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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

Key Issues for MTO and ETO-Project Manufacturing


Key Issues
Too low transparency in the supply chain

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

Long lead times

Frequent delays in delivery causing penalty costs

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Importance of MTO and ETO-Project Manufacturing


Why is Advanced Planning for MTO- and ETO - Project Manufacturing important for many industrial manufacturers
Most machinery manufacturers use the MTO and ETO manufacturing model for part of their product mix MTO- and ETO - Project Manufacturing in SAP R/3 has a large customer base in IM&C, A&D, 1597 IM&C Customers worldwide The shortcomings of MRP II and changed business needs require advanced planning and scheduling capabilities MTO and Project Manufacturing with SAP SCM provides the required improvements for machinery manufacturers
1.477 (74%)
EMEA APA AME

1597 IM&C Customers


307 (15%)

236 (11%)

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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

Solution Map: Industrial Machinery & Components


Suppliers & Engineering Partners Design Market & Sell Engineer Procure Manufacture Store & Move Service Research & Development New Product Development & Introduction Life-Cycle Data Management Sales & Marketing Marketing Management Channel Management Customers & Channels

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

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Project Manufacturing for IM&C and A&D


This scenario for machinery manufacturers integrates SAP ERP Project System (PS) with SAP Advanced Planning and Optimization (SAP APO)
Integrated project and production scheduling Constraint-based project and production scheduling Backlog-free scheduling in feasible plans Interactive simulation of different planning scenarios Alerts for early detection of bottlenecks

Project Manufacturing
SAP APO
Project Scheduling & Capacity Planning

SAP ERP
Project Structuring Engineering

Integrated project and materials planning

Project Execution Production & Procurement Execution

Production Planning and Control SAP ERP SAP SCM DP SNP GATP PP/DS TP/VS SNC ICH EM MM SD PP LES

SAP NetWeaver

Production Planning and Detailed Scheduling

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Make-to-Order Manufacturing for IM&C / Discrete


Make-to-Order Manufacturing
SAP CRM / SAP ERP SAP ERP SAP SCM
Component Demand Planning

Configuration and Sales Cycle Management

Detail Configuration and Engineering Order BOM / Routing

Determination of Delivery Date

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

Production Planning & Scheduling Production & Procurement Execution

Order Billing

Shipping & Assembly

SAP ERP

SAP SCM

DP

SNP

GATP

PP/DS

TP/VS

SNC

ICH

EM

MM

SD

PP

LES

SAP NetWeaver

Production Planning and Detailed Scheduling

Sales & Distribution

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Make-to-Order & Project Manufacturing for IM&C / Discrete


New Implementation Content / Packages for SCM 5.0
New scenario with content in SAP solution manager for accelerated implementation, configuration guide to realize process flow of scenario, required BADI enhancements: Engineer-to-Order Project Manufacturing Make-to-Order Manufacturing

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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ETO, MTO, MTS Manufacturing mySAP ERP Enhancements in mySAP ERP:


Production supervisor dashboard
task list for release, processing and confirmation of orders on the shop floor KPI key figure monitor

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

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Overview Objects and SAP Components


FIN: WBS-Structure

Order BOM also possible!


P-1

PDS Production Data Structure (formerly RTO)


P-3

P-2

PLM: WBS BOM

PLM: Network
Task B Task A

APO PP/DS: Project Order


Task B

APO: Focus PDS (WBS)

Task D Task C

Task A

CIF CIF

Task D Task C

6100 Lifting Gear

6200 Drive

6100 Lifting Gear

6200 Drive

PLM: Mat. BOM

PP: Order
6200 Drive 6220 Engine

APO PP/DS: Order

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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SAP SCM - APO

Project Planning Project Structuring


Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up

WBS structure

Jan

Feb

March

Apr

May

June

July

Networks structure

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Project Planning Project Structuring


Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up

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Advanced Project Scheduling & Capacity Planning


Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up

Advanced Project Scheduling and Capacity Planning


Schedule infinite / finite Remove Backlog Feasible Plans Optimization to reach global planning goals for all projects Simulation to determine feasible project end date in quotation phase Planning on pool capacities Alert for violation of project end date

Integration SAP ERP and SAP SCM


Transfer SAP ERP network to SAP APO project order Transfer scheduling results back

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Integration of ERP PS network to APO Project Order


Part of Core Interface (CIF) integration model (Transaction CFM1) Select networks to be transferred via order type and plant BADIs available for more specific selection

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Integration of ERP PS network to APO Project Order


After integration model is active networks are transferred from ERP to APO After scheduling of project order in SAP APO scheduled dates are updated in dispatched dates in SAP R/3 network, status is set to DSEX (date scheduled in external system)

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Rough-Cut Project Planning in SAP APO


Project Planning Level Resources Capacity Reduction
Rough-cut planning (project order) Pool capacities (machine group) Capacity Consumption through orders in production planning possible (project solution)

Production Planning
Detailed planning (order routing) Specific capacities (machine) Capacity reduction through confirmation

blocked pool capacity for project, no dispatching on specific capacity

Note 713088 required


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Simulative Project Dispatching in SAP APO Example: Find Delivery Date for Customer Quotation
Version 000 Active Version Version 001 Simulation versions

Simulative Project Dispatching and Capacity Levelling

Create Simulation Version

Evaluate Alternatives to reduce Capacity Overload:


Work Overtime Reduce duration External processing Reschedule orders Schedule finite

Note 730363 required

Choose Alternative determining feasible delivery date


Copy to active Version
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Engineering: WBS BOM and WBS routing in SAP R/3


Material PM-1000 Material PM-1000

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

Material PM-1000 WBS-Element P-5000-01

Material PM-1000 WBS-Element P-5000-01

WBS BOM
PM-1000

WBS Routing
Op. 10

Op. 20

Op. 30

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Transfer of WBS BOM/routing to SAP APO Focus PDS


Transaction: CURTO_CREATE_FOCUS Transfer WBS BOM and WBS Routing to SAP APO Focus PDS (Production Data Structure) Transfer needs to be triggered manually Note 711106 required to transfer WBS routing together with WBS BOM without needing a new production version in APO

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Release Assemblies for Production and Procurement


Engineering in SAP ERP Product Structure in WBS BOM (Project specific) Project Structure in SAP ERP

Controlling

Schedule Transfer Material Components

Transfer Network to SAP APO Project Order


Production Planning and Scheduling for Material Components

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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

Production Planning and Optimization Run

Monitor Alerts on Projects, Main Assemblies

Sense & Respond


Manufacturing & Procurement Execution Changes, Exceptions

Interactive Scheduling to reduce late orders and capacity overload

Simulate and compare alternative solutions, execute decision

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Production Planning with Optimization and Backlog Resolution


Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up

Production Planning with Optimization and Backlog Resolution


Material requirements planning batch run for project order components multi-level Backlog resolution run considering capacity constraints for stable sequence of orders in the current week Optimization run considering capacity constraints in the short term Infinite optimization in the mid/long term

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

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Material Requirements Planning BOM Explosion


Project Order
1 1 1

Assembly Order
30 20 10 10 1 1 1 1 1 1

Production Orders
10 10

20

Requisition/ Purchase Orders

10

Project specific Non project specific


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External Procurement

Material Requirement Planning with Project specific BOM and Routing


Planning Run Source Determination Requirement for Individual WBS/project segment
Material PM-1000, WBS-El. P-5000-01

Focus Production Data Structure (PDS) Project Specific


Material PM-1000 WBS-El. P-5000-01 Material PM-1000 WBS-El. P-5000-01

WBS BOM
PM-1000

WBS Routing
Op. 10 Op. 20 Op. 30

1 Use Focus PDS when existing

Production Data Structure (PDS)


Material PM-1000 Material PM-1000

Material BOM 2 Otherwise use Material PDS

Material Routing

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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

Monitor alerts on projects / main assemblies


Project Planning

Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing

Alerts - Early warning system late orders, bottlenecks

Interactive scheduling to reduce late projects, orders


Filter on alerts in order context, sort late orders by delay Detect critical path for order context Reduce buffers on critical path
Procurement / Warehouse

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

Reduce duration of project order operations

Adaptiveness and Simulation


What-if simulation, compare alternatives
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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

Monitor alerts on projects / main assemblies


Project Planning

Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing

Alerts - Early warning system late orders, bottlenecks

Interactive scheduling to reduce late projects, orders


Filter on alerts in order context, sort late orders by delay Detect critical path for order context Reduce buffers on critical path Reduce duration of project order operations Multi-level forwards/backwards scheduling Evaluate resource utilization, filter on overload Alternative work centers, sequences, production versions Switch to external procurement, subcontracting Work overtime, run additional shifts
Procurement / Warehouse

New in SCM 5.0

Interactive scheduling to reduce capacity overload

Adaptiveness and Simulation


What-if simulation, compare alternatives
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Transparency, Visualization and Coordination of the complete Supply Chain


Networks Customer Orders
Order 4711 Robot & Control Cabinet

Bill-of-material project/order specific

Planned Orders

Supply Chain in SAP APO


Project Planning

Visualization Data Exchange

Routings

Production Orders

Manufacturing

Production Capacities

Purchase Order / Requisition


PO 4711 Shaft Drive

Procurement / Warehouse

Vendors, Customers, Plants

Stock

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Transparency in the Supply Chain through Pegging


Transparency and Visualization of the complete Order Context
Integrated visualization of project planning and manufacturing Automatic match of demand and supply down to non customer specific parts Visualization of status and progress for project and production orders
Procurement Manufacturing Mechanical Engineering Manufacturing Electrical Assembly Electrical

Project Planning and Execution


Assembly Mechanical Shipping

Installation & Start-Up

Mechanical Manufacturing

Customer specific Non customer specific

Electrical Manufacturing

External Procurement In-House Assembly

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Transparency through Pegging and Alerts in Real-time


Project Order
1 1 1 Delay

Assembly Order
30 20 10 (+10) Excess 20 2 10 2 (-10) Shortage 2 1 1 1

Production Orders

20

20

Purchase Orders

10

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Transparency through Pegging and Alerts


Visualization of disturbances on project / order level
Use of network alerts to aggregate disturbances to assembly / project level Problems in the order structure can be visualized on project level

Procurement Manufacturing Mechanical Engineering Manufacturing Electrical

Project Planning and Execution


Assembly Mechanical Shipping Assembly Electrical

Problem in project order


Installation & Start-Up

Mechanical Manufacturing

Problem in assembly
Customer specific

Delay
Electrical Manufacturing

Non customer specific External Procurement In-House Assembly

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Monitor Projects / Main Assemblies with Delay


Production Planner
Alert monitor projects // main assemblies Alert monitor projects main assemblies sorted by delay sorted by delay

Identify most critical projects / orders

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Monitor Projects / Main Assemblies with Delay


Production Planner
Alert monitor projects // main assemblies Alert monitor projects main assemblies sorted by delay sorted by delay

Identify most critical projects / orders

Navigate to order processing for detailed analysis

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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

Monitor alerts on projects / main assemblies


Project Planning

Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing

Alerts - Early warning system late orders, bottlenecks

Interactive scheduling to reduce late projects, orders


Filter on alerts in order context, sort late orders by delay Detect critical path for order context Reduce buffers on critical path
Procurement / Warehouse

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

Reduce duration of project order operations

Adaptiveness and Simulation


What-if simulation, compare alternatives
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Examine Alerts for Project Order


Production Planner
Project order alerts on project order, Project order alerts on project order, operations, main assemblies operations, main assemblies

Enhanced in SCM 5.0

Overview on problems in project order for WBS element, operations, components

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Examine Alerts for Project Order


Production Planner
Project order alerts on project order, Project order alerts on project order, operations, main assemblies operations, main assemblies

Overview on problems in project order

Alerts for assemblies in project order, sorted by delay

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Order Context for Project Sorted by Delay


Production Planner
Order context for project order Order context for project order

New in SCM 5.0

Sorted by delay to identify most critical assemblies in the structure

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Order Context for Project Filter by alert type


Production Planner
Order context for project order Order context for project order

New in SCM 5.0

Filter order context by alert types

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Order Context for Project Filter by alert type


Production Planner
Order context for project order Order context for project order

New in SCM 5.0

Order context with filter only error alerts

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Order Context for Project Navigate to Planning Board


Production Planner
Order context for project order Order context for project order Navigate to planning board for order context

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Planning Board Order Context for Project Order


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

Operations sorted by project and date

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

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Planning Board Critical Path Heuristic


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

Determine critical path (heuristic)

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Planning Board Critical Path Heuristic


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

Critical path is highlighted (list display also possible)

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Planning Board Reduce planning-related Minimum Intervals (Buffers)


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

Call maintenance of planning related minimum intervals (buffers)

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Planning Board Reduce planning-related Minimum Intervals (Buffers)


Production Planner
Maintenance of-planning related Maintenance of-planning related minimum intervals minimum intervals

New in SCM 5.0

Reduce minimum interval between orders or between operations manually Call mass maintenance

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Planning Board Reduce planning-related Minimum Intervals (Buffers)


Production Planner
Maintenance of planning related Maintenance of planning related minimum intervals minimum intervals

New in SCM 5.0

More complex logic for mass maintenance possible by BADI

Mass maintenance to reduce or increase by absolute value, %, set to fixed value, set to process-related minimum interval (+ x%)

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Planning Board Reduce planning-related Minimum Intervals (Buffers)


Production Planner
Maintenance of planning related Maintenance of planning related minimum intervals minimum intervals

New in SCM 5.0

Example: All planning related intervals between orders and operations on the critical path were reduced to the processrelated value to reduce overall lead time

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Planning Board Multi-level backwards Scheduling Heuristic (infinite)


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

Reschedule order context multi-level backwards (heuristic)

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Planning Board Multi-level backwards Scheduling Heuristic (infinite)


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

No more problem with orders in the past on previously critical path Detect new critical path

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Planning board Reduce planning-related Minimum Intervals (Buffers)


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

New critical path

Call maintenance of planned minimum intervals (buffers)

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Planning board Reduce planning-related Minimum Intervals (Buffers)


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

Example: No further reduction possible, all planning-related values were already reduced to processrelated values

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Planning Board Multi-level forwards Scheduling Heuristic (infinite)


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

Reschedule order context multi-level forwards to determine new realistic end date (heuristic)

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Planning Board Multi-level forwards Scheduling Heuristic (infinite)


Production Planner
Detailed Scheduling Planning Board Detailed Scheduling Planning Board

New in SCM 5.0

New realistic end date for assembly determined by forward scheduling

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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

Monitor alerts on projects / main assemblies


Project Planning

Pegging automatic matching of demand and supply Visualization of complete order context
Manufacturing

Alerts - Early warning system late orders, bottlenecks

Interactive scheduling to reduce late projects, orders


Filter on alerts in order context, sort late orders by delay Detect critical path for order context Reduce buffers on critical path
Procurement / Warehouse

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

Reduce duration of project order operations

Adaptiveness and Simulation


What-if simulation, compare alternatives
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Interactive Scheduling to reduce Capacity Overload


Consideration of Capacity Constraints
Display capacity utilization Detect capacity overload situations Consider capacity constraints in interactive scheduling
Procurement Manufacturing Mechanical Engineering Manufacturing Electrical Assembly Electrical

Project Planning and Execution


Assembly Mechanical Shipping

Installation & Start-Up

Manufacturing

Capacity Load

Engineering

Lathe working

Assembly

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What-if Simulation of Alternatives to reduce Capacity Overload


Goal: Reduce Capacity Overload or Delay
Simulation of different planning alternatives no changes to active planning version Compare different alternatives Copy chosen alternative to active planning version
Mechanical Manufacturing

Alternative Work Center / Excess Work Alternative Production Version External Procurement / Subcontracting Stock Transfer

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Manufacturing Execution
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up

Close the loop between the factory and the enterprise


Manufacturing intelligence dashboards Role-based, configurable, dashboards deliver decision support to production personnel Manufacturing operations Manufacturing planning, execution, quality, maintenance, and environment, health, and safety processes Manufacturing integration Leverages SAP NetWeaver to integrate manufacturing on the shop floor with enterprise and supply chain business processes

Manufacturing Intelligence Dashboards

SAP SCM

SAP ERP

MES

XI SAP NETWEAVER Automation Layer

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Manufacturing Execution
Project Planning Advance Procurement Engineering Production Planning & Optimization Production Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping, Assembly & Start-Up

Resource Breakdown & Resolution


Work center breakdown on shop floor The MES System sends an alert to SAP ERP and updates the work center status Production Planner sees the alert on his dashboard He drills down into the alert to view the machines operating status on the MES integrated into the dashboard He invokes his planning and scheduling solution in SAP SCM and finds alternative capacity
Manufacturing Intelligence Dashboards

SAP SCM

SAP ERP

MES

XI SAP NETWEAVER Automation Layer

Business Benefits
Real-word awareness actively communicated via dashboards and alerts allowing to respond quickly and resolve the exception
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MTO/ETO Manufacturing Enabled by SAP NetWeaver Examples


Sales Order Processing Engineering Production Planning & Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping Assembly & Start-Up Billing

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

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MTO/ETO Manufacturing Enabled by SAP NetWeaver Examples


Sales Order Processing Engineering Production Planning & Scheduling Manufacturing Execution Engineering Change Management Quality Assurance & Control Shipping Assembly & Start-Up Billing

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

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SAP Analytics - Example Capacity Utilization

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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

Tangible Benefits of Advanced Manufacturing Planning


Tangible Benefits*
Revenue
Increased sales by better on-time delivery Increased sales by shorter time-tomarket for customer specific machinery Better customer service through on-time-delivery Reduced delivery lead times through better capacity utilization and reduced time buffers

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

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Benefits of Advanced Manufacturing Planning Customer Experiences


Benefits at Leybold Vaccum*
Revenue
Better delivery punctuality Reduced average lead time +9,1% -15%

% 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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Strategic Benefits of Advanced Manufacturing Planning


Reduced operating costs and working capital by using advanced planning and scheduling Better transparency, coordination and simulation for improved decision support Differentiation and improved customer loyalty by higher service levels, better on-time delivery and reduced delivery lead times

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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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Live SCM 4.1 in impl. Live

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

Live Live Live

Make-to-Order & Project Manufacturing Demag


Project Objective / Challenges
Assemble-to-order scenario with multiple product variants Short assembly lead times requires demand forecasting for components and ATP check on components In parallel project manufacturing scenario with customer specific engineering and long lead times

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

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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

Advanced Planning for MTO and ETO Project Manufacturing - Summary


Improvements in SCM 5.0
New approach for mixed finite/infinite scheduling for MTO and ETO manufacturing Stable, feasible plan in the short term (batch run)
Stable forwards heuristic in current week Finite Optimization in short term Infinite Optimization in mid/long term

Improved interactive scheduling for complex structures


Critical Path heuristic (infinite) Reduction of buffers between operations and orders Multi-level backward/forward heuristics (infinite)

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

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Questions?

Thank you for your attention.

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