Adaptive Manufacturing 1

State of the Art in
Manufacturing:
Adaptive Manufacturing
Ian Ryan
SAP America
Agenda
What is Adaptive Manufacturing – Operations Focus
Manufacturing – Integration and Intelligence
Driving Manufacturing Success
© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 2

Adaptive Manufacturing:
Managing Manufacturing
Operations
Ian Ryan – Principal

Industry and Solutions Group, SAP America
Agenda
Manufacturing Challenges Today
What is Adaptive Manufacturing?
How to enable Manufacturing Operations?

Manufacturing today has some key challenges…
Global Competitiveness is HERE placing tremendous

pressure on cost, quality and responsiveness
Manufacturing nodes are being pushed out to distant
locations leading to a loss of visibility and control.
Velocity is critical. Time-to-market, Time to Volume, and
Time to Scale are the keys to success.
Stringent regulations are driving the need for quality and
genealogy tracking and compliance capabilities

Production personnel lack mission critical decision
support needed to respond to exceptions, or meet their
targets
Connecting the Factory to the Enterprise and enabling
Production Personnel are critical to cost-effectively deliver
on customer expectations

Root Cause: Manufacturing and Enterprise business processes
need to be synchronized …
How are we hitting our targets?

Total Cost of Production and Variance
? Labor and Resource Productivity
Order Fill Rates and Cycle Times
ERP Fixed and Variable Asset Utilization
DISCONNECT
DISCONNECT
What’s happening during every shift?
Material availability and consumption
? Capacity availability and utilization
MES Schedule changes
Product Genealogy tracking and QM
What’s happening at each line?

Cycle Times / Operating Efficiencies
? Machine Breakdowns / Unplanned Downtime
SFAC* Quality Index
Predictive Maintenance requirements
SFAC - Shop Floor Automation and Control Systems
MES – Manufacturing Execution Systems
DCS – Distributed Control Systems
Manufacturing Challenges and Their Business
Implications
X
Visibility
Learning about machine, material, and quality
issues too late to take action
Customer orders lost on the factory floor
Lack of visibility into actual production costs
X
Ability to respond rapidly to manufacturing
Responsiveness exceptions
Ability to balance supply with demand priorities
Ability to align manufacturing with business goals
X
Constant rework, overtime, expedite orders, and
shortages
Performance
Lower customer satisfaction and lost revenues
Lower margins from focusing on the wrong priorities
Visibility and responsiveness drive performance and are critical for

manufacturing to run at the speed of business.

Agenda

Adaptive Manufacturing
Why should Manufacturers become Adaptive?
Adaptive manufacturing is the ability of a

factory to profitably replenish the supply chain
while dynamically responding to unpredictable
change
Adaptive Manufacturing enables companies

and their production personnel to “run
Manufacturing at the Speed of their Business”
and deliver Superior Performance thru
Visibility and Responsiveness.

How Can Companies Run Manufacturing at the Speed
of Business?
Manufacturers need to:
Enterprise
Connect the factory to the enterprise and
the supply chain
Proactively detect machine, labor, quality,
and resource exceptions
Collaborate with their suppliers and
manufacturing partners to resolve
exceptions
Factory
Continuously monitor, analyze, and learn
from cost variances to improve processes
Provide production personnel with the
decision support and content they need to
meet their targets
To operate at the speed of business, manufacturers must move from a

mindset of simply reacting to forecast changes to an adaptive mindset.

What do Manufacturers Need to be Adaptive?
To be adaptive, companies need

capabilities for: Enterprise
Manufacturing operations: An integrated

ERP solution for managing manufacturing
with workflows that enable closed-loop
operations
Manufacturing integration: A
Factory
manufacturing integration platform to
connect manufacturing processes with
enterprise and supply chain processes
Manufacturing intelligence Visibility
dashboards: Role-specific, configurable

Responsiveness
dashboards that provide decision support
to production personnel so they can
Performance
deliver on their performance goals

Agenda

Manufacturing - Supporting All Manufacturing Models
Forecast Driven Demand Driven
Push Pull
ETO
Model Inventory Manufacturing
Flexibility Flexibility
Push Pull
MTO
Push Pull
ATO
Push Pull
MTS
= Manufacturing Decoupling Point

Comprehensive Solution Set for Manufacturing Operations
All Six Key Capabilities are Integrated and Seamless

1. Manufacturing Planning
Forecasting/Collaborative Forecasting 2. Manufacturing Execution
Make-to-Stock / Make-to-Order Production Process Management
Finite Capacity Scheduling Batch Management
Material Requirements Planning Labor & Resource Management
Recipe Management Outbound Processing
Production Dispatch
6. Visibility
ATP/CTP
Safety / Target Stock
Manufacturing Costing & Manuf. Intelligence Dashboards
Performance Mgmt. Manufacturing Visibility

Tracking & Genealogy
Health & Safety

Environmental
Manufacturing
Manufacturing
Management
Subcontracting and
Management
Maintenance
Execution
Planning
Quality
Collaboration
Manufacturing Event
Management
5. Plant Maintenance 3. Quality Management

Technical Asset Mgmt
LIMS integration
Predictive & Preventive 4. EH&S Compliance Quality Engineering
Maintenance Product Safety Management Quality / Tracking Control
Maintenance Execution Hazardous Substance & Dangerous Quality Improvement
Integration to purchasing Goods Audit Management
Emissions & Waste Management
Industrial Hygiene and Safety
Occupational Health
Manufacturing Operations
A Typical Plant Floor Role-Based Scenario
Report Up
Forecast Net Forecast Develop Supply Network
Demand Against Orders Plan for Manufacturing
Role
Plant Manager Approve Production Plan Update Production Plans
and Targets (Measure Plan vs. Actual)
Release Production Create detailed Production Develop Detailed

Production Planner Orders Plan and Schedule Monthly Production Plan
View Work list & Record Production (time,

Production Supervisor Select Order Sequence material, labor, cost) Results
Move Goods
Production Operator to Line & Manu-
facture Product
Quality Inspector Create Quality Monitor, Review and

Inspection Orders Approve Quality
Approve and Release

Quality Manager Produced Batch/Order
Pack and Store

Store / Dispatch Clerk Dispatch Product
Create Preventive Schedule Maintenance

Maintenance Engineer Maintenance Plan Maintenance Execution
Invoke Safety and
Handle substances as Log Exposure and Handling
EH&S Professional Handling Instructions
specified in MSDS for Compliance
based on MSDS
© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 15 Not part of the Manuf. Solution
A Typical Manufacturing Scenario
Plant Manager Report Up
Visibility
Role
Approve Production Plan Update Production Plans
Plant Manager Manuf. Intelligence
and Targets (Measure Plan vs. Actual)
Manufacturing Planning
Production Release Production Create detailed Production Develop Detailed
Production
SupervisorPlanner Orders Visibility
Plan and Schedule Monthly Production Plan
View Work list & Record Production (time,

Production Supervisor
Environmental Health & Safety

Select Order Sequence material, labor, cost) Results
Manufacturing Execution
Maintenance Management
Move Goods
Qualitiy Management
Production Operator to Line & Manu-
facture Product
Quality Inspector
Create Quality Monitor, Review and
Quality Inspector Inspection Orders Approve Quality
Quality Management
Approve and Release
Quality Manager Produced Batch/Order
Pack and Store

Maintenance
Store / Dispatch Clerk Dispatch Product
Engineer
Maintenance Engineer
Create Preventive
Maintenance Plan Maintenance Management
Schedule
Maintenance
Maintenance
Execution
Invoke Safety and
EH&S Management
Handle substances as
Handle substances as Log Exposure and Handling
EH&S Professional Handling Instructions specified in MSDS for Compliance
based on MSDS
© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 16 Not part of the Manuf. Solution
…enables manufacturers to optimally plan, schedule and

sequence production on the factory floor, to produce and
deliver orders, per due date promises made to their customers.
Are you challenged by…

frequently missing out on customer delivery due date promises
because of infeasible production plans/schedules?
excessive WIP, Raw and Finished Goods Materials?
Inability to respond to unforeseen changes and re-planning?
Key Benefits
Feasible production schedules
High order fill rates with lower inventory on the shop floor
Accurate due date promises to customers
Higher labor and asset utilization
Technology Enablers
Optimization Algorthms, ATP, CTP, PTP
The Manufacturing Planning & Scheduling Process
Develop supply
Net Forecast against
Forecast Demand Network Plan for
orders
Manufacturing
Create weekly Net Forecast against Develop

detailed monthly
production plan customer orders production plan
Create Release production

detailed weekly
production schedule schedule for execution
Detect unplanned
events or demand /
supply changes
Re-plan and
re-schedule
production, as needed
Analyze root causes of Measure actual

production perfor-
events or deviations mance against plan
Not part of the Manuf. Solution Manuf. Soln. not within the scope of this process
The Manufacturing Planning & Scheduling Process –
Pain Points & Solution Enablers
Constraint-based concurrent Develop supply
Constraint-based concurrent
Unconstrained Plans & Net Forecast against Unconstrained Plans
Forecast
Material Demand
and Capacity Network
Material andPlan for &
Capacity
Schedules orders Schedules are Infeasible
Planning &are Infeasible
Scheduling Manufacuring
Planning

detailed monthly
Inability to
Forward and
schedule
Backward Create
forward and Release production
Scheduling detailed weekly
backward, or production schedule schedule for execution
pegged to
peg to sales
Sales Orders
orders Order
Constant
by order
firefighting
planning
Detect unplanned and
andscheduling
expedites
events or demand /
supply changes
Re-plan and
re-schedule
Unplanned
Proactiveevents
Event detected
driven production, as needed
too latePlanning
to prevent
& Scheduling
customer issues

production perfor-
Drill
Lackdown
of sufficient
into exceptions
data Lack
Plan-to-plan
of integrated
comparison,
analytics with
and reporting
library
for root-cause
root cause analysis of prevents
over 300 plan-to-plan
pre-configured
comparison
SCOR KPIs
The Manufacturing Planning & Scheduling Process
Net Forecast against Develop supply

Forecast Demand Network Plan for
orders Manufacturing
Production Planning
detailed monthly
Create Release production

detailed weekly
production schedule schedule for execution
Detect unplanned
events or demand /
supply changes
Re-plan and
Detailed re-schedule
Production Scheduling production, as needed

production perfor-
Analytics & Reporting
Manufacturing Planning – Critical Solution Elements
Capabilities:
Integrates solution for production planning and detailed
scheduling that is integrated with Manufacturing
Execution online
Peg individual plans and production schedules to actual
sales orders
Dynamically calculates and optimizes changeovers
Support multi level capacity requirements planning; bi-
directional propagation of order changes
Supports exception-based management – proactively
detects plan deviations and automatically alerts
planners
Delivers what-if and scenario analysis to drive the most
optimal plan
Offers integrated analytics and reporting, with a library
of pre-packaged SCOR KPIs

…enables manufacturers to meet and deliver on their
production plans by managing production processes,
workforce and resource deployment on the shop floor and
document, monitor and dispatch inventory across the
production life cycle.
your inability to respond to your customer order changes?
your inability to detect and resolve manufacturing exceptions as and
when they happen?
documenting and tracking product genealogy for compliance with your
industry regulations?
lack of integration between your ERP & real-time plant floor systems?
Key Benefits:
Optimally allocate and match labor, materials and resources to orders
Track customer orders, inventory and WIP across production
life-cycle
Lower inventory carrying costs
Technology Enablers
Shop Floor Integration, ISA95, Adobe Interactive Forms
RFID: Extending Your Investment Across the Value Chain
Extended Supply Chain

Management
Value
• Inventory Management Visibility

• Product Recalls
• Product Diversions
I • Loss Prevention
O
R
Compliant Manufacturing
Counterfeiting / Brand Protection
Patient Safety and Quality
• Local State Laws – Pedigree Tracking
Retail and Regulatory Compliance

• Retail Compliance – Wal*Mart , Target, Albertsons etc
• Regulatory – FDA , EMEA
Time

Manufacturing

The Manufacturing Execution Process
Detailed Released detailed

scheduling production schedule
Start Initiate production /

Stage and transfer
production
materials to line or M/C assembly process
or assembly
Finish production Execute production or Source inputs from

contract manufacturing
or assembly assembly operations partners, if needed
Quality Control
Store or pack and

dispatch order
Document production Monitor variance against
costs plan and budget
Analyze root cause Analyze and improve

of variances processes
Not part of the Manuf. Solution, Manuf. Soln. not within the scope of this process

The Manufacturing Execution Process –
Pain Points and Key Solution Enablers
Integrated
Manuf. Execution
Production
not Automatic work center
Detailed Released detailed Planning,
integrated
Scheduling
with Inability to check work
availability check against
scheduling production schedule Production
& Execution Planning
in one center availability
and
solution
Scheduling
drives-> reservations
Infeasible
feasible schedules
Schedules
Electronic
Paper basedproduction
produc-
tion instructions;
instructions integrated
no Start Initiate production /
Stage and transfer
production
integration
to line / machine
to linevia
or materials to line or M/C assembly process
or assembly
machines
OPC#

Automated
Lack of automated
material contract manufacturing
material
identification,
identification,
staging
Production
Dis-connected,
process
paper
integrated
based staging
and standards
or standards
Quality
with comprehensive
Management process
QM compliance
Little
Integration
to no integration
to WMS
Quality Control and
with
TMS
WMS/TMS
via APIs
Automated
Inability to
cost-variance
monitor /
measure
tracking via
cost BW
variances
reports Store or pack and
dispatch order
True
Inability to
track true
production Document production Monitor variance against
Production
costs docu- costs plan and budget
Costs
mented
Inability Process improve-

Drill downs
to do root ments across
Consistent, multiple
multi-plant
and on-the- Analyze root cause Analyze and improve
cause plants can
process be
changes
fly causal of variances processes
analysis automated
difficult and
to implement
analysis
on the fly institutionalized
Not part of the Manuf. Solution, Manuf. Soln. not within the scope of this process, OPC# = OLE for Process Control

The Manufacturing Execution Process –
Pain Points and Key Solution Enablers
Detailed Released detailed
PLAN
scheduling production schedule
Data Collection Production Dispatch

and Document Start
Management production
Stage and transfer Initiate production /
materials to line or M/C assembly process
or assembly

contract manufacturing
Production Process Management
Outbound
Processing
Quality Control
Manufacturing Costing Store or pack and

dispatch order
Document production Monitor variance against
costs plan and budget
Analyze root cause Analyze and improve

of variances processes
Not part of the Manuf. Solution, Manuf. Soln. not within the scope of this process

Manufacturing Execution – Critical Solution Elements
Capabilities
Offers an integrated manufacturing execution, detailed
scheduling and planning solution
Has standard interfaces (like OPC) to shop floor

automation systems and can co-exist with other MES/EMI
systems thru an industry standard platform
Integrated with a comprehensive quality and

maintenance management solution that supports GMP
and CAPA
Can monitor and document actual production costs and

variances, with analytics and reports
Supports exception based management through alerts

and workflow
Supports automated performance management that can

be institutionalized across multiple, geographically
dispersed plants

Manufacturing Planning and Execution?
The Business Case
Increase Revenues
Improved Production Yields, Order Fill Rates and On-Time Shipments
Higher Manufacturing Volumes with Shorter Lead Times
Higher customer satisfaction from better order fulfillment
Lower Operating Costs
Minimize overtime and exception resolution costs

Eliminate redundant MES to ERP manual data entry costs
Lower Working Capital
Convert Excess Inventory into Cash Flow

Lower Total-Cost-of-Ownership (TCO) by leveraging existing
investments in MES/EMI and Shop-Floor Automation Systems

Quality Management
…enables Shop Floor Managers and Operators

to manage and assure product quality, monitor and improve
quality standards and document quality compliance.
a high cost-of-quality and compliance – excessive rework, rejects,
returns and errors?
matching quality level to specific customer requirements?
inability to detect quality exceptions as and when they happen?
Integration of your ERP/MES with quality control instrumentation?
Inability to track corrective and preventive actions (CAPA)?
Key Benefits:
Higher product quality and customer satisfaction
Superior, cost-effective quality compliance
Exception based quality management
Continuous quality improvement
Technology Enablers
RFID, LIMS ‘Enterprise’ Integration, “Lean Six Sigma”
Electronic “SOP” a Click Away….
Validate User Certification
Validate Equipment
Ready for Use
Utilize Most Current

Electronic SOPs
Automated Quality
Notifications
Validate Approved
Materials
• Automate Weighing &
Reconciliations
• Complete Traceability
Validate Room Status

Ready for Production
Maintain Electronic Batch

Record
Integrate CAPA & Quality

Processes into
Operations

The Quality Management Process
Quality Planning
Detailed Released Create Inspection

scheduling production Order Orders
Record Quality Data Monitor Quality Data

(Results / Defects / IPC (SPC / SQC)
Approve Review Control Produced

Batch / Orders Quality Data Batch / Orders
Audit, on Demand and Measure and improve

Review Results KPIs

The Quality Management Process –
Key Pain Points and Solution Enablers
Quality Planning Supports automatic or
Quality Planning Paper based, manual
and Execution manually triggered
and Execution not inspection lots
Quality Planning integrated with Inspection Lots
integrated with
Manufacturing
Manufacturing
Execution
scheduling Production Order Orders
Variable
Limited inspection
Inspection
Entry
entry Options
options

Supports
Does Corrective
not support & &
Corrective Manual
Automated
or rudimentary
exception
alert
Preventive Actions (CAPA) detection
based exception
and management
detection

Audit
Lack Mgmt. andanalytics
of integrated Businessand
Intelligence
reporting –
doessupports
not support continuous improvement
continuous improvement

Review Results KPIs

The Quality Management Process
Quality Engineering
Quality Planning

scheduling Production Order Orders
Quality Assurance Control


Quality Improvement & Audit Management

Review Results KPIs

Quality Management – Critical Solution Elements
Capabilities
A quality management solution integrated with
manufacturing execution, that supports GMP (good
manufacturing practices) and lowers Total-Cost-of
Ownership (TCO)
Offers an end-to-end solution for QM, comprising:
quality planning,
quality control,
quality exception detection and management, and
quality audit and performance management
Integrates with Quality Control Instrumentation
through built-in interfaces
Enables proactive tracking of Corrective and Preventive
Actions (CAPA)
Drives decision making to the shop floor thru a role based
dashboards

Quality Management? – The Business Case
Increase Revenues
Higher customer satisfaction and market share

Higher quality becomes a differentiator against the competition
Lower Operating Costs
Minimize defects, rework, waste and warranty charges

Reduced inspection costs (sampling, skip lots)
Lower cost of integration (eliminating interfaces to 3rd Party Systems)

Maintenance Management
…enables Factory Managers to plan, schedule, monitor and

track maintenance to ensure optimal operation of their
manufacturing assets, and minimize downtime on the Factory
floor.

lack of an integrated (physical and financial) view of your plant assets
across its life-cycle?
a high frequency of asset breakdowns and maintenance costs?
on demand access to your asset related knowledge base – people and
equipment?
Key Benefits:
Predictive maintenance minimizes asset downtime and maximizes
asset utilization
Preventive maintenance lowers operational expenses (reduced MRO
inventory and maintenance costs)
Technology Enablers
RFID, GIS, Remote & Mobile & Condition Monitoring
One System – Multiple Access Methods

Reliabilty Centred Maint. Operation
SAP EAM BW
Maintenance
Equipment Maintenance Maintenance
Execution &
Master Data Planning Analysis
Documentation
FMEA
Optimize
Strategies
System Strategy Strategy

Risk Evaluation
Definition Definition Evaluation
Establish
Evaluation
RCMO RCM Criteria
Condition Monitoring Operator

(Future Integration)
Rounds Operational
Performance
Condition Evaluation
Monitoring

The Maintenance Management Process
Document
manufacturing assets
Detailed Detailed weekly Plan and schedule

scheduling production schedule maintenance
Detect unplanned Trigger and execute

maintenance events maintenance
Document
maintenance event
Measure actual asset

Analyze root causes performance against
planned
Document steps Improve preventive Upgrade technical

for maintenance
maintenance plan asset infrastructure
improvement
Document Integrated
Financial Financial and
and maintenance views of
manufacturing assets Maintenance
assets View of Manuf. Asset
not integrated

scheduling production schedule maintenance
Automated
Inability Robust Predictive and
Exception
to detect Lack of Predictive or
Preventive Maintenance
(in
Detection
real-time)
& Preventive Maintenance
minimizes downtime
Resolution
or resolve
Detect unplanned viamachine
SCADA or Trigger and execute
maintenance events Mobile
breakdowns
Option maintenance
Document
Drill down maintenance event
Inability to Integrated
into, and fix Inability to
drill down analytics & data
root causes Measure actual asset aggregate
and analyze reporting enable
to prevent performance against and
right measure
Analyze root causes
root causes time perfor-
recurrence planned actual asset
of excep- mance moni-
& minimize performance
tions toring & analysis
downtime Inability
Integrated
to drive
Performance
Corrective
Management
& Preventive
supports
Action (CAPA)
CAPA

for maintenance
improvement
Technical Predictive & Preventive Maintenance

Asset Document
Management manufacturing assets

scheduling Production Schedule maintenance
Maintenance Execution
(Portal and/or
Mobile Solution)
Detect unplanned Trigger and execute

maintenance events maintenance
Document
maintenance event
Measure actual asset

Analyze root causes performance against
planned
Asset Performance & Maintenance Cost Management

for maintenance
improvement
Maintenance Management - The Business Case
Increase Asset Productivity

Improved Asset Performance enhances Production Yields
Integrated Analytics and Reporting drives Root Cause Analysis to
minimize recurring exceptions, and prolongs useful life of the Asset
Integration with external service and spares management solutions
delivers right people, parts and resources at the right time
Lower Maintenance Costs
Predictive Maintenance minimizes Asset breakdowns and lost production

Preventive Maintenance minimizes long downtimes, lowers spares
inventory and compliance costs
Exception based management ensures maintenance is on-time and under
budget

Maintenance Management – Critical Solution Elements
Capabilities
offering an integrated physical (technical, maintenance)
and business (financial value across life cycle)
perspective that drives decision support pertaining
to repair, refurbishment and scrapping of the asset.
facilitating predictive and preventive maintenance

that minimizes breakdown and asset downtime to
maximize asset availability.
enabling right time exception detection and

management via both role-based portal and /or mobile
solution, to minimize fire-fighting and lost customer
orders.
delivering integrated performance management across

the useful lifetime of the manufacturing asset.

Environment, Health and Safety
… enables Plant Managers to manage product safety issues,

hazardous and dangerous goods and their disposal, waste and
emissions as well as industrial hygiene, occupational health
and safety.

lack of automation in your EH&S tasks and documentation needed for
compliance with regulations?
high frequency of hazardous goods, waste and emission issues on
your plant floor?
lack of visibility to EH&S data on demand, by your plant personnel?
Key Benefits:
Minimize the number and cost of EH&S incidents on the shop floor
Lower EH&S compliance costs
Improve the health, morale and productivity of production personnel
Technology Enablers
RFID, Energy Mgmt, SOA – ROHS, WEEE
Compliance Now Has Many Drivers
Operational Compliance
Financial Compliance
Global Trade Compliance
Employee Health &

Safety Compliance

RFID - Multi-layered Product Authentication
Problem:
✔
7-8% of drugs
worldwide are
counterfeit,
50% in some
countries
Shrinkage and
counterfeits
F43GLVSD335324FL4234GERF33 account for
0.22 – 0.73% of
revenues for
manufacturers
F43GLVSD335324FL4234GERF33
$30B problem for US
retailers
$50B worldwide
01.000D34.00FKD.000234DCK
Counterfeit rate
01.000DF3E.0043F.000324FG
growing at 6-8%
annually

The Hazardous Substance Management Process
Receive materials Check validity of MSDS

from supplier against records
Detailed Invoke safety & handling

Detailed weekly production
instructions, based on
scheduling schedule
MSDS
Handle substances, per Log exposure and sub-

safety & handling stance handling for
instructions compliance with regulations
Audit and assess on

Measure and improve KPIs
demand EH&S performance

The Hazardous Substance Management Process
Efficient,
Inefficient,
Receive materials Check validity of MSDS integrated
paper-based
from supplier against records electronic
process
process
Detailed Invoke safety & handling

Detailed weekly production
instructions, based on
scheduling schedule
MSDS
Manual,
Online,paper-based
integrated system
processensures
may lead
higher to
accuracy
errors and
andaccidents
lower incidents
Handle substances, per Log exposure and sub-

safety & handling stance handling for
instructions compliance with regulations
Paper-based,
Automatedinefficient
documentation
documentation
lowers
results
compliance
in penalties
costsandand
compromises
secures
employee
employeehealth
healthand
& safety
safety
Audit and assess on

Measure and improve KPIs
demand EH&S performance
Lack ofBI
Integrated integrated analytics andand
enables improvement
reporting renders assessment
institutionalization difficult
of best practices
EH&S Management – Critical Solution Elements
Capabilities
Offer a comprehensive solution for EH&S management
and compliance with regulations, for a manufacturing
context
Integration across Materials Management, Inventory,
Sales & Distribution, Financials, Human Resources and
Business Warehouse
Automated EH&S tasks enabling compliance in
Purchasing such as MSDS preparation, waste
classification, shipping
Full integration in Logistics for distribution of legal
required documentation (like MSDS, Tremcards, labels,
etc.)
Exposure group monitoring
Site inspections and Incident/Accident management
Flexible web based portal solution with configurable
business package for specifications

Manufacturing Intelligence
SAP NETWEAVER
Role Based Dashboards
Visibility
…enables manufacturers to sense and respond to machine/
Health & Safety

Environmental
Manufacturing
Manufacturing
Management
Management
Maintenance
material/ labor and quality exceptions, and monitor, measure
Execution
Planning
Quality
and analyze actual production against plan targets, rapidly &
cost-effectively
Are you challenged by….
your production personnel spending 30-40% of their work time looking
for information across multiple, disconnected systems?
a lack of real-time actionable intelligence needed by your production
personnel for right time decisions?
inability to monitor, measure and control performance (KPIs) for your
people, assets and plants in near-time, to positively performance?
Key Benefits:
Real-time snapshot of factory / production line operations at a glance
Aggregated data from multiple systems for right-time decisions
Visibility to exceptions, KPIs, reports and tasks on one configurable UI
Monitor, analyze & resolve exceptions/deviations via workflows in ERP
Technology Enablers
Visualization Technology, SOA web services, standards based
The Manufacturing Intelligence Dashboard for Plant
Managers
Exception detection Configurable views by

via alerts role and individual
My favorites
Pertinent KPI watch list,
with trends and drill downs

New Capabilities: Analytics for Manufacturing
Manuf. Intelligence Dashboards
Manufacturing Visibility
Analytics for Manufacturing delivers
Health & Safety

Environmental
Manufacturing
Manufacturing
Management
actionable intelligence to enable production
Management
Maintenance
Execution
Planning
Quality
personnel to monitor, measure, analyze, control
and improve their production processes and key
performance indicators (KPIs) to meet or exceed
their production targets.
Key Benefits:
Continuously monitor, measure and improve production processes
Exception-based-management approach to production KPIs
Analyze actual vs. budgeted costs to meet or exceed targets

Analytics for Manufacturing Snapshot OEE Availability

Summary
Manufacturers need to move from a “react to forecast changes”
mindset to an adaptive paradigm to deliver on their customer
expectations better than their competition.
For manufacturers to become adaptive, they must connect
manufacturing to enterprise and supply chain processes.
Adaptive Manufacturing delivers:
Manufacturing operations – planning, execution, quality,
maintenance, and EH&S enabled by ERP, exception and
performance management
Robust manufacturing integration enabled by industry
standard platform and integration
Role-based configurable manufacturing intelligence
dashboards for production personnel
Adaptive manufacturing enables companies to run manufacturing
at the speed of business and deliver superior performance through
visibility and responsiveness.
Adaptive Manufacturing Vision and Strategy –
State of The Union 2005 and 2006 Market Forecast
“ 2005 was a year that saw manufacturing rediscovered and redefined as a critical and full
participant in a new generation of Demand-Driven Supply Networks (DDSNs).
The MES market finally broke through the $1B barrier this past year, with many vendors
growing revenue by 30% to 40% in the past 18 months. Also helping was the Enterprise
Manufacturing Intelligence (EMI) market, which AMR Research defined and anticipated in 2003.
It finally gained credibility with SAP’s acquisition of the leading EMI vendor, Lighthammer, in
mid-2005.
Momentum is going to continue to build in 2006. Spending on manufacturing applications in
2005 climbed to become the third largest application area after ERP and desktop software for
most industry segments.
Of those surveyed, 31% will upgrade or extend their manufacturing applications in 2006,
moving manufacturing into the second spot in application spending priorities behind ERP,
but ahead of Supply Chain Management (SCM).
- Colin Masson
Manufacturing becomes an Enterprise Software Category in 2006, December 21st, 2005

Adaptive Manufacturing:
Managing Manufacturing
Operations
Ian Ryan – Principal

Industry and Solutions Group, SAP America
Appendix

What SAP Manufacturing Delivers
Manufacturing intelligence
SAP NETWEAVER dashboards: Role-based, configurable,
dashboards that deliver alerts, reports, KPIs
and decision support to different production
Other SAP Business Solu tions
Manufacturing
Intelligence personnel (part of mySAP ERP)
SAP BI and Analytics

Dashboards
Manufacturing operations: Lean Six-
Sigma and Manufacturing planning, execution,
quality, maintenance, and environment health &
safety processes are enabled by mySAP ERP.
Health & Safety

Environmental
Manufacturing
Manufacturing
Manufacturing integration: Leverages the

Management
Management
Maintenance
Execution
Planning
Quality
SAP NetWeaver platform and the SAP xMII*

to integrate SAP & partner manufacturing
applications with enterprise and supply chain
business processes.
SAP xMII
Manufacturing Intelligence
Manufacturing Integration
xMII – SAP xApp Manufacturing Integration and Intelligence
SAP Manufacturing drives adaptive manufacturing by providing
MES – Manufacturing Execution the business
Systems, EMI – Enterprise Manufacturing
Intelligence, BW – Business Warehouse (from SAP)
context for manufacturing data and exceptions,
SFAC – Shop Floor closing
Automation & the
Control,loop between
OPC – OLE the
for Process Control
factory and the enterprise.

ERP, SCM, and PLM Applications Enable
SAP Manufacturing
SAP NetWeaver integrates the following solutions
to deliver comprehensive solutions for adaptive
manufacturing:
mySAP ERP
mySAP Business Suite
mySAP Product
mySAP PLM
Lifecycle Management
(mySAP PLM)
mySAP Supply Chain mySAP mySAP ERP mySAP
Management SRM CRM
(mySAP SCM) SAP
Manufacturing
mySAP SCM
SAP NetWeaver
SAP xApps Legacy Third Party

New Capabilities: Mobile Devices for Manufacturing
SAP NETWEAVER
Manuf. Intelligence Dashboards
SAP Mobile Asset Management
Health & Safety

Environmental
enables production personnel to detect, monitor,
Manufacturing
Manufacturing
Management
Management
Maintenance
Execution
Planning
communicate and respond to unforeseen events
Quality
or exceptions on the factory floor.
Our vision is to deliver a subset of the dashboard

capabilities on mobile devices for production
personnel to become truly “real-world aware” in a
manufacturing environment.
Key Benefits:
Detection of manufacturing events and exceptions in real-time
Early response to exceptions to minimize fire-fighting and customer
issues

Manufacturing Intelligence for Production Personnel enabled by
role-based, configurable Dashboards: Key Capabilities
SAP manufacturing intelligence

dashboards are configurable,
role-based dashboards for production
personnel that deliver actionable
intelligence (analytics, KPIs, reports)
from multiple (plant floor, xMII, ERP, BW)
systems for right time decision making
Key Benefits:
Real-time snapshot of factory and
production line operations at a glance SAP NETWEAVER
Aggregated data from multiple Manuf. Intelligence Dashboards
systems for right-time decisions Manufacturing Visibility

Visibility to exceptions, KPIs, reports
Health & Safety

Environmental
and tasks on one configurable UI
Manufacturing
Manufacturing
Management
Management
Maintenance
Execution
Planning
Quality
Monitor, analyze, and resolve
exceptions and deviations via
workflows within ERP

SAP Manufacturing Planning
SAP Manufacturing Planning

enables manufacturers to optimally plan, schedule
and sequence production on the factory floor, to
produce and deliver orders, per due date promises
made to their customers.
The SAP Solution:

ERP: PP-MRP
APO: PP-DS

SAP Manufacturing Execution
SAP Manufacturing Execution

enables manufacturers to meet and deliver on their
production plans by managing production
processes, workforce and resource deployment on
the shop floor and document, monitor and
dispatch inventory across the production life
cycle.
The SAP Solution:

ERP: MM, PP and PP-PI, HR, FI-CO
SAP xMII, EM
SAP Quality Management
SAP Quality Management

enables Shop Floor Managers and Operators
to manage and assure product quality, monitor
and improve quality standards and document
quality compliance, for subsequent audit.
The SAP Solution:

ERP: PLM-QM, HR
SAP xMII
SAP Maintenance Management
SAP Maintenance Management

enables Factory Managers to plan, schedule,
monitor and track maintenance to ensure
optimal operation of their manufacturing assets,
and minimize downtime on the Factory floor.
The SAP Solution:

ERP: PLM-EAM, MM, HR, FI-CO
xMII, xVIP

SAP Environmental Health & Safety (EH&S) Management
SAP Environmental Health and Safety

(EH&S) Management
enables Plant Managers to manage product
safety issues, hazardous and dangerous goods
and their disposal, waste and emissions as well
as industrial hygiene, occupational health and
safety.
The SAP Solution:

SAP ERP: PLM-EH&S, WCM, HR
SAP xMII

SAP Glossary of Terms
APO – Advanced Planning & Optimization MTS – Make to Stock

ATO – Assemble to Order OPC – Operations Process Control PM – Plant
ATP – Available to promise Maintenance
CAPA – Corrective Action & Preventative Actions PP – Production Planning
CO – Controlling (Cost Accounting) PLM – Product Lifecycle Management
CTP – Capable to Promise PI – Process Industry
CRM – Customer Relationship Management PTP – Profitable to Promise
DCS – Distributed Control System QM – Quality Management
DS – Detailed Scheduling ROHS - Restriction of Hazardous Substances
EH&S – Environmental Health & Safety RFID – Radio Frequency Identification
EM – Event Management SCADA -
EP – Enterprise Portal SCOR – Supply Chain Operations Reference (model)
ETO – Engineer to Order SFAC – Shop Floor Autimation & Control
FI – Financials (Accts Payable, Accts Rec, GL, Cash Mgmt) SOA – Service Oriented Architecture
GIS – Global Information System SPC – Statistical Process control
GMP – Good Manufacturing Practices SQC – Statistical Quality Control
HR – Human Resources SRM – Supplier Relationship Management
KPI – Key Performance Indicator TCO – Total Cost of Ownership
LIMS – Laboratory Information System UI – User Interface
MES – Manufacturing Management System WCM – Work Clearance Management
MM – Materials Management (Inv control, Purchasing) WEEE - Waste Electrical and Electronic Equipment
MRO – Maintenance Repair and Overhaul xAPPS – Composites – cross application
MRP – Materials Requirements Planning xMII – Manufacturing Intelligence and Integration
MSDS – Material Safety xVIP – Visual Information for Plants
MTO – Make to Order

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State of the Art in

What is Adaptive Manufacturing – Operations Focus

Manufacturing – Integration and Intelligence

Driving Manufacturing Success

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 2

Ian Ryan – Principal

Manufacturing Challenges Today

What is Adaptive Manufacturing?

How to enable Manufacturing Operations?

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 4

Global Competitiveness is HERE placing tremendous

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 5

How are we hitting our targets?

What’s happening at each line?

Visibility and responsiveness drive performance and are critical for

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 7

Manufacturing Challenges Today

What is Adaptive Manufacturing?

How to enable Manufacturing Operations?

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 8

Adaptive manufacturing is the ability of a

Adaptive Manufacturing enables companies

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 9

To operate at the speed of business, manufacturers must move from a

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 10

To be adaptive, companies need

 Manufacturing operations: An integrated

 Manufacturing intelligence Visibility

dashboards: Role-specific, configurable

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 11

Manufacturing Challenges Today

What is Adaptive Manufacturing?

How to enable Manufacturing Operations?

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 12

Forecast Driven Demand Driven

= Manufacturing Decoupling Point

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 13

All Six Key Capabilities are Integrated and Seamless

Performance Mgmt. Manufacturing Visibility

Health & Safety

5. Plant Maintenance 3. Quality Management

Release Production Create detailed Production Develop Detailed

View Work list & Record Production (time,

Quality Inspector Create Quality Monitor, Review and

Approve and Release

Pack and Store

Create Preventive Schedule Maintenance

View Work list & Record Production (time,

Environmental Health & Safety

Pack and Store

…enables manufacturers to optimally plan, schedule and

Are you challenged by…

Create weekly Net Forecast against Develop

Create Release production

Analyze root causes of Measure actual

Create weekly Net Forecast against Develop

Analyze root causes of Measure actual

Net Forecast against Develop supply

Create Release production

Analyze root causes of Measure actual

Analytics & Reporting

© SAP AG 2003, Adaptive Manufacturing - Operations, Ian Ryan / 21

Extended Supply Chain

• Inventory Management Visibility

Manufacturing operations: An integrated

Manufacturing intelligence Visibility

Has standard interfaces (like OPC) to shop floor

Integrated with a comprehensive quality and

Can monitor and document actual production costs and

Supports exception based management through alerts

Supports automated performance management that can

Minimize overtime and exception resolution costs

Convert Excess Inventory into Cash Flow

Higher customer satisfaction and market share

Minimize defects, rework, waste and warranty charges