Extending solution value beyond boundaries
of ERP
Stuart Bell
Director, Strategic Market Development
SAP Asia Pte Ltd
Agenda
• Introduction
– Market trend: Manafacturing & ERP
– SAP view
– Collaboration in its many forms
• Business Value Beyond ERP
–
–
–
–
–
Customer and market pressures
How is this being enabled
What benefits does it bring to the customer
Impact at shopfloor level
Why partnerships
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Spend analysis beyond ERP
“
Customer
Management
14%
11%
34%
39%
ERP
Product Lifecycle
Management
Sourcing and
Procurement
Supply Chain
Management
Desktop software
Most Important (n=442)
… many MES vendors growing
revenue by 30% to 40% in the past
18 months.
The Enterprise Manufacturing
Intelligence (EMI) market gained
credibility with SAP’s acquisition of
the leading EMI vendor,
Lighthammer….
5%
4%
3%
3%
15%
12%
Manufacturing
Operations
2005 - manufacturing rediscovered
and redefined.
21%
22%
9%
10%
Largest Dollar (n=439)
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Momentum is going to continue to
build in 2006.
Colin Masson
Manufacturing becomes an Enterprise
Software Category in 2006,
AMR Alert, December 21st, 2005
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2006 Enterprise Software Investment Priorities
Most strategically important software investment for 2006
Largest dollar spend in 2006
Business Processes to Address
with Investment
14%
Customer
Management
11%
34%
ERP
Product Lifecycle
Management
39%
Production performance monitoring
(yield, cycle times, OEE, etc.)
5%
4%
Execution of production orders
Sourcing and
Procurement
3%
Shop floor work order/recipe scheduling/sequencing
3%
Supply Chain
Management
Business process integration with ERP, PLM, and LIMS
15%
12%
Asset maintenance and equipment reliability
21%
22%
Manufacturing
Operations
Product quality and compliance management
Product and process traceability and genealogy
Desktop softw are
9%
10%
RIFD (workflow management)
Most Important (n=442)
Takeaway
Largest Dollar (n=439)
Design an Architecture That Integrates
Manufacturing Apps together, and with ERP
Source: AMR Research Manufacturing Survey, 2006
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4
Business Value Beyond ERP
Deliver holistic manufacturing strategy from shop floor to enterprise with key elements
below:
Business Value:
MES Trends and Market Forces
External Forces Fueling MES
Market
Enable the
“production
worker”
–
Deliver increased control, accountability,
quality & compliance
–
Integrating enterprise planning with execution
through one harmonized platform
–
Lower TCO by standardizing on a single
MES platform across all plants
Collaboration:
Leverage SAP position in
manufacturing and supply
chain execution
Whitespace opportunity -Business Process Performance
“Gaps” within Manufacturing
Applications Space
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Competition:
Market
Consolidates
–
Manufacturing environments fragmented
–
SAP will collaborate with partners via a
published MES roadmap and establish
industry process and data standards
–
Automation and control vendors and other
ISVs will complement and fill key white
spaces (vertical and functional)
5
MES Enterprise Architecture Beyond ERP with SAP
Process Environments
Discrete Environments
ERP
ERP
PP-PI / BM
MES
xMII
xMII
Shop Floor Automation and Control
Process Platform
Level 4
MySAP ERP
Supplier
Collaboration
Kanban
Control
xMII Bundle
xLEAN
Level 3
xMII
xLEAN
Kanban Execution
MES Level
Level 2
Machine Level
Level 1
Components, Sensors, PLC
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Partners
e.g. OSI
6
SAP Ecosystem – Collaborative Architecture in Action
Aim: Turning breakthrough ideas into solutions
Reseller Channel
Extends Market reach
in SME and beyond
Refocusing on core
business expertise
Resellers
Systems Integrators, BPOs
Collaborative Innovation
Optimized IT Stack
Delivers Simplicity
TechEd
Trusted Engagement
(Business and Technical)
Industry Standards
Developers
Industry/Business Process Experts
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SAP NetWeaver Fund
Endorsed Business Solution
Software Solution Providers
Technology Titans
7
Enterprise SOA Ecosystem & Industry Value Network
Direction: Enterprise SOA
Influence Council
Co-Innovation: Industry Value Network
ENTERPRISE SERVICES COMMUNITY LAUNCH
ES Community allows the ecosystem to influence and define enterprise
services critical to success
Industry Value Networks
Powered by SAP NetWeaver
ASUG/DSUG
ENTERPRISE
SERVICES
REPOSITORY
OTHER
SAP
CUSTOMER & PARTNER GROUPS
Customers
Technology
Partners
ENTERPRISE
SERVICES
PROPOSAL
SIs
ISVs
SAP
Definition Groups
ES COMMUNITY
 SAP AG 2006, “IT as a Strategic Driver of Value Creation”, Shai Agassi, 19
Collaboration: Business Process Expert
Community
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Development: Enterprise Service Community
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Industry Value Network – Collaborative Delivery of Benefits
Co-Innovation
The Industry Value Networks brings together customers,
partners and SAP focused on solving high value business
needs anchored by SAP NetWeaver as the common platform to
enable collaborative innovation and complete industry
solutions.
– Provide
– end-to-end industry business solutions
– Establish
– industry thought leadership
– Deliver
– innovative, high impact, joint SAP +
Partner Industry solution for customers
– Leverage
– SAP NetWeaver, ESA, and industry
standards
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Manufacturing and Enterprise business processes need to be synchronized …
?
ERP
How are we hitting our targets?
 Total Cost of Production and Variance
 Labor and Resource Productivity
 Order Fill Rates and Cycle Times
 Fixed and Variable Asset Utilization
DISCONNECT
DISCONNEC
T
?
MES
SFAC*
?
What’s happening during every shift?
 Material availability and consumption
 Capacity availability and utilization
 Schedule changes
 Product Genealogy tracking and QM
What’s happening at each line?
 Cycle Times / Operating Efficiencies
 Machine Breakdowns / Unplanned Downtime
 Quality Index
 Predictive Maintenance requirements
SFAC - Shop Floor Automation and Control Systems
MES – Manufacturing Execution Systems
DCS – Distributed Control Systems
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SAP synchronizes manufacturing operations heterogeneous IT landscapes
Enterprise
• Check resources
• Create mfg plan
• Scheduling
• Release work order
• Close order
• Shipping and logistics
Manufacturing
Intelligence
Dashboards
SAP Manufacturing
(mySAP ERP)
XI
SAP xMII
Manufacturing Intelligence
SAP BI
• Plan work orders
Other SAP Bus. Solu tions
SAP NETWEAVER













Real-time events/alerts
Order status
Charge rates
Life of inventory
Yields
Completions and usage
Start and stop times
Quality and lab data
Process history
Best practice deviations
Efficiency
Downtime tracking
Rework scrap rates
Manufacturing Integration
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How does SAP xMII enable Manufacturing Excellence?
Analytics: Long Execution Time of Manufacturing orders
SAP ERP
Process Historian via SAP xMII
Control system via SAP xMII
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How does SAP xMII enable Manufacturing Excellence?
SAP ERP
WIP Orders with
Work center
KPIs
SAP xMII
Calculated
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13
SAP Analytics for Manufacturing Snapshot OEE Availability
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Leveraging Existing Manufacturing Assets and Systems
SAP xMII Enablers
Adaptive
Manufacturing
Manufacturing Operations
(SAP ERP)
Manufacturing Levers

Improved Order Fill Rates & On-Time
Shipments improves Customer Sat.

Higher Quality and Throughput
Higher Performance and Productivity
Per Employee, per Asset, per Plant

Financial Objectives
Revenues
Manufacturing Excellence
SAP xMII
Manuf. Synchronization
Profits
Minimize Reject, Rework, Overtime &
Exception Resolution Costs & Waste
 Lower Quality and Compliance related
Costs and Minimize Penalties
 Improve Asset Utilization (OEE/ROA)
 Continuously improve Processes (Six
Sigma, First Time Right)
 Better adherence to Budgets and Cost
Targets
 Eliminate redundant MES to ERP
Manual Data Entry Costs



Manufacturing
Integration
Manufacturing
Intelligence


Convert Excess Inventory into Cash Flow
thru Better Visibility
Lower Total-Cost-of-Ownership (TCO) on
your manufacturing infrastructure
Faster time-to-value on SAP ERP to Plant
Systems Integration
Rationalize Underperforming Assets and
Plants
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Operating
Costs
Increase
your
ROI on
your
Manuf.
Assets &
Systems
Working
Capital
Invested
Capital
Fixed
Capital
15
Real-World Scenario….
1
Production schedule is sent from SAP ERP
to SAP xMII, transmitted to the MES system
and displayed on Mfg. Dashboard
2
After batch execution, SAP xMII aggregates
production performance data and
automatically updates SAP ERP inventory
3
Based on SFA sensor data and Six Sigma
control analysis, SAP xMII detects quality
problem, generates alert and quarantines
batch in SAP ERP
4
Production quality alert appears in Plant
Manager’s Dashboard and he drills down
into alert to performs a rapid root cause
analysis of the problem via SAP xMII
5
Plant Manager initiates corrective action to
fix the quality problem and resolve
exception before it becomes customer
issue
Alert
!
Manufacturing
Intelligence
Dashboards
SAP Manufacturing
(mySAP ERP)
SAP xMII
Manufacturing Intelligence
SAP BI
Other SAP Bus. Solu tions
SAP NETWEAVER
Manufacturing Integration
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These outcomes can be delivered faster and cheaper with partnerships
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