How BorgWarner drives its Supply Chain
Dr. Hendrik Meth
Manager
Business Warehouse Competence Center

1995-
2001
University of Mannheim
Diploma in Business Informatics
2002-
2004
Icon, Karlsruhe
SAP APO & BW-Consulting
2004-
2010
Bosch, Stuttgart
Business Intelligence Consulting,
Product & Project Management
2010-
2013 since
11.2013
University of Mannheim
PHD in Business Informatics
BorgWarner ITSE
Manager Business Warehouse Team
Copyright© 2014 BorgWarner Inc.
2

 Introduction
 Big Data
 In General
 In Automotive Industry
 Big Data Analysis in BorgWarner‘s Supply Chain
 Outlook – From Top Floor to Shop Floor
Copyright© 2014 BorgWarner Inc.
3

 2013 Sales:
 Employees:
 Operations:
 Products:
 Market Drivers:
$7.4 Billion ($8.2B unconsolidated)
19,700
60 Locations
19 Countries
Engine, Transmission and Driveline systems
Fuel Economy, Emissions, Performance
Financial and Employee information as of
December 31, 2013. Operation information as of March 14, 2014.
Copyright© 2014 BorgWarner Inc.
4

A Portfolio of Leading Powertrain Solutions
Engine
67% / SALES
Drivetrain
33% / SALES
Turbo Systems
 Wastegate
 Variable Turbine Geometry
(VTG)
 Regulated 2-stage (R2S
™
)
Emissions Systems
 Exhaust Gas Recirculation
(EGR) Valves
 EGR Coolers & EGR tubes
 Integrated EGR Modules
 Secondary Air Systems
 Actuators
 Glow Plugs Thermal Systems
 Thermal Management
 Components and Systems
 Visctronic ® Systems
 Instant Start System
 Pressure Sensor Glow Plugs
 Gasoline Ignition Technology
 Sensor Technology  Fans/Fan Drives
Morse TEC
 PTC Cabin Heaters
 Thermostats
 Coolant Control Valves
 Engine Valve Timing Systems
 Timing Chain
 Variable Cam Timing
 Oil Pressure Actuated
 Torsional Assist
 Cam Torque Actuated
 HY-VO ® Transmission Chain
 Transmission/Transfer case chain
Copyright© 2014 BorgWarner Inc.
Transmission Systems
 DualTronic ® Systems for Dual
Clutch Transmissions
 ECO-Launch TM Stop/Start
Accumulator Solenoid Valves
 One-way Clutches and
Modules
 Friction and Steel Plates
TorqTransfer Systems
 AWD Couplings
 Transfer Cases
 eGearDrive ® Electric
Drive Transmissions
 eAWD Torque Vectoring
 AWD Electronic Controls
and Systems Integration
Thermal
Systems
Morse TEC
Turbo
Systems
Emissions
Systems
Transmission
Systems
TorqTransfer
Systems
5




Copyright© 2014 BorgWarner Inc.
6

BorgWarner is one of the most decorated companies in the history of the PACE Awards
2014
EcoLaunch™ Stop/Start Accumulator
Solenoid Valve
INNOVATION PARTNERSHIP
AWARD
Eco-Launch ™ Stop/Start Accumulator
Solenoid Valve
2013
New Regulated 3-Turbocharger
System (R3S)
INNOVATION PARTNERSHIP
AWARD
Regulated 3-Turbocharger System
(R3S) with BMW
Copyright© 2014 BorgWarner Inc.
2012
Turbocharger for Internal
Combustion Engines with
Low Pressure EGR
2009
CTA Camshaft Phasing System
Pressure Sensor Glow Plugs (PSG) for
Diesel Engines
INNOVATION PARTNERSHIP
AWARD
Cam Torque Actuated (CTA) Cam
Phaser with Ford Motor Company
2008
Turbocharger with R2S ® Regulated
Two-Stage Technology
ENVIRONMENTAL AWARD
Turbocharger with R2S ® Regulated
Two-Stage Technology
2007
Gasoline Turbocharger with Variable
Turbine Geometry
INNOVATIVE OEM
COLLABORATOR AWARD
Gasoline Turbocharger with Variable
Turbine Geometry with Porsche AG
INNOVATIVE OEM
COLLABORATOR AWARD
High Energy ITM 3e ® AWD System with Porsche AG
2005
Dualtronic™ Dual Clutch, Direct Shift
Gearbox (DSG)
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2014 Sales Outlook*
VW/Audi 12%
Daimler 6%
Ford 5%
Renault 3%
BMW
Fiat
PSA
3%
1%
1%
GM 1%
Commercial
Vehicles 3%
Other 10%
Americas ~28%*
Asia ~26%*
Europe ~46%*
30%**
22%**
48%**
* NSK-Warner included
** NSK-Warner excluded
Copyright© 2014 BorgWarner Inc.
Hyundai/Kia 4%
Toyota 4%
Nissan
Honda
1%
1%
China 10%
Other 7%
Ford 7%
Chrysler 5%
GM
Asian OEMs
4%
2%
Commercial
Vehicles
Other
5%
5%
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$3.4B
(unconsolidated sales)
$8.2B
Forward
Estimate
$6.0B
Asia
Asia
Europe
Europe
27% 30-35%
45% 40-45%
'03 '04 '05
$ in Billions
Includes NSK-Warner & TEL
'06
Copyright© 2014 BorgWarner Inc.
Americas
Americas
'07 '08 '09 '10 '11 '12
28% 25-30%
'13
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BorgWarner has employed over 250
IT professionals around the world
Americas
90 IT professionals Europe
120 IT professionals
BorgWarner IT Services Europe GmbH is the european IT service hub
Asia
40 IT professionals
Copyright© 2014 BorgWarner Inc.
10

 IT Staff:

Locations:
 Customers:

Services:

Philosophy:
120 there of 85 employed by IT Services Europe
5 Locations in Germany
15 Locations in other European countries
All BorgWarner Sites in Europe and worldwide locations
- Process- and Management Consulting
- Provisioning of highend ERP, Business Warehouse,
PLM and other IT systems
- Focus on SAP solutions
- All kind of Infrastructure Services
- Voice and Communication Solutions
High Professionals
Low hierarchy organization
Varied tasks and projects
Service and customer oriented IT environment
International team and culture
Copyright© 2014 BorgWarner Inc.
11

Generic
 Talent Management Process
 Corporate Development Programs
 Employee Exchange Programs
 Career Development Programs
 Mentoring Program
 Corporation with local universities including coop and student programs
IT specific programs
 ITIL certification training
 Service delivery and project delivery framework training
 Business Relationship Management Trainings
 Specific IT professional trainings
Copyright© 2014 BorgWarner Inc.
12

 Introduction
 Big Data
 In General
 In Automotive Industry
 Big Data Analysis in BorgWarner‘s Supply Chain
 Outlook – From Top Floor to Shop Floor
Copyright© 2014 BorgWarner Inc.
13

 Four dimensions to be differentiated
Copyright© 2014 BorgWarner Inc.
Source: Schroeck et al. (2012) – IBM Institute for Business Value
14

MIS
Efficient data processing
Integrated systems
Vision of automatic decision making
DSS
Statistical
Algorithms
What-if analyses
Datacentricity
Hardwired
EIS
Multidimensional modeling
Dedicated systems
(separated from OLTP)
Focus on
TOP management
DWH
Integration of multiple, heterogeneo us sources
OLAP analyses
Data history
BI
Reporting for the masses
Advanced frontends
Real-time analytics
Planning
Performance
Management
Data Mining,
Text Mining,
Web Mining
Big
Data
Data driven organization
Unstructured data
External data
Cloud services
Predictive
Analytics
Sentiment
Analysis
1960 1970
Copyright© 2014 BorgWarner Inc.
1980 1990 2000 2010
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Big Data – Applications: Fraud Detection
 Fraud is a major contributor to loss in this insurance industry
 In former times insurance companies often relied on random sample to detect fraud
 Now Big Data allows companies to more easily detect fraud e.g. through Text Mining algorithms
 Technological challenge:
Integration of external and internal data sources and provide results in an acceptable time frame
Copyright© 2014 BorgWarner Inc.
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Big Data – Applications: Streaming
Analytics
 Detect “M-shape” patterns in stock prices: double-top formations
 MatchRegex* Use patterns to detect composite events
 In streams of simple events
(tuples)
 Easy-to-use regex-style pattern match of userdefined predicates
Copyright© 2014 BorgWarner Inc.
Source: Olbrich, Funke 2014
* IBM InfoSphere Streams: The
Complex Event Processing Toolkit
17

Copyright© 2014 BorgWarner Inc.
Source: Olbrich, Funke 2014
18

 Introduction
 Big Data
 In General
 In Automotive Industry
 Big Data Analysis in BorgWarner‘s Supply Chain
 Outlook – From Top Floor to Shop Floor
Copyright© 2014 BorgWarner Inc.
19

Why is Big Data an important topic for the Automotive Industry?
Copyright© 2014 BorgWarner Inc.
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What is the most complex industry product which is produced in mass production?
Copyright© 2014 BorgWarner Inc.
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Further levels of complexity
Product complexity Component complexity
Sourcing complexity
60%
Supplier A
Level 1
Assembly
40%
Supplier B
Copyright© 2014 BorgWarner Inc.
Supply chain complexity
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 To manage this extraordinary complexity, information is the key resource
 Typical information needs:
 How many units of our product X do we need to produce in next 12 months ?
 Do we purchase our parts at the right supplier?
 How much components of type Y do we need to keep on stock?
 To provide this information large amounts of data are necessary
 Example: BW provides data for more than 300.000 different material numbers in its BI system
– only for its turbo chargers
Copyright© 2014 BorgWarner Inc.
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Data velocity in the Automotive Industry
 Complex components often result in very high component prices and inventory / storage costs
 To minimize these costs just-in time production and corresponding material flows have a long tradition in the automotive industry
 All of these processes and material flows need to be support with adequate, real-time information within and between companies
Copyright© 2014 BorgWarner Inc.
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Data veracity in the Automotive Industry
 Automotive industry is characterized by large fluctuations in demand
 Influencing factors are
 Situation of overall world economy
 Regulations
 Regional economic development
 Competition / Seasonal factors / Product life cycles
 …
 Information uncertainty means that plans and forecasts need to be continuously adapted
 This results in extensive data veracity
Copyright© 2014 BorgWarner Inc.
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Example Supply Chain Management:
Planning and Execution
 Long-Term vs. Mid-term vs. Short-term use of Big Data in
Automotive Industry
 Long-term
 Top Floor, Strategic Use
 Forecasting & Planning, 1- 5 years
 Sales FCST / Simulative MRP / Supplier Capacity
Planning
 Mid-term
 Operational Forecast & Planning
 4-6 weeks
 Short-term
 Shop Floor, Operational Use
 Real-time
Copyright© 2014 BorgWarner Inc.

Past – Focus on Operational Planning
Top Floor
ERP
Shop Floor
Data
MES
Documents Production
Lines
Copyright© 2014 BorgWarner Inc.

And now –Strategic Planning / Further digitalization
Top Floor
Data
BI / SCM-
System
Shop Floor
ERP
Data
MES
Data
Production
Lines
Copyright© 2014 BorgWarner Inc.

 Introduction
 Big Data
 In General
 In Automotive Industry
 Big Data Analysis in BorgWarner‘s Supply Chain
 Outlook – From Top Floor to Shop Floor
Copyright© 2014 BorgWarner Inc.
29

Big Data Planning and Analysis in the SCM
Process @ BorgWarner
 BorgWarner plans its Sales and Purchasing (GSM) forecast in mid-term (next 12 months) and long-term
(next 5 years) planning versions
 Planning versions are frozen at the end of each month
 Business users enter plan values for upcoming versions and analyze the data of already frozen versions
 To support this process a system with both planning and reporting functionality is required
 This functionality is provided through a combination of Business Intelligence (BI) and ERP features
Copyright© 2014 BorgWarner Inc.
30

Borg Warner SCM Architecture
GSM
Planning &
Reporting
GSM
Sales
Sales
Planning &
Reporting
Further Data
Sources
(e.g. Call
Offs)
Simulative
MRP
Pre-Calculation of Cost
Reductions
Copyright© 2014 BorgWarner Inc.
Further Data Sources
(e.g. Materials
Movements)
Strategic
Supplier
Assignment
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Usage of BI key elements @BorgWarner
Consumption
Reporting &
Analytics
Planning
Knowledge
Discovery
Provisioning
Data Management
Data Integration
BI Platform
Data Sources
Copyright© 2014 BorgWarner Inc.
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Layered Scalable Architecture (LSA)
Virtualization
Reporting
Propagation
Acquisition
Copyright© 2014 BorgWarner Inc.
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 SAP Business Warehouse
( SAP BW ) is SAP’s
Business Intelligence solution
 SAP BW provides functionality for reporting , analysis , planning and knowledge discovery on top of a data provisioning infrastructure
 Data for SAP BW can be extracted from SAP and
Non-SAP systems
Copyright© 2014 BorgWarner Inc.
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Copyright© 2014 BorgWarner Inc.
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Report Example: GSM
Copyright© 2014 BorgWarner Inc.
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Report Example: GSM – OLAP Operations
Copyright© 2014 BorgWarner Inc.
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Copyright© 2014 BorgWarner Inc.
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 Provide users an adequate system performance
 Report performance
 Load performance
 Global operations
 Co-ordination of processes between ERP and BW
 Support and train users to cope with complex environment
Copyright© 2014 BorgWarner Inc.
39

 Which trends need to be considered to support business needs?
 Data demands are still increasing
 From Monthly to weekly planning cycles
 From “flat” forecast tables to hierarchical structures
 Functional demands for BI support are changing
 From manual planning to automatic simulations
 From simple, table based reports to interactive visualizations
Copyright© 2014 BorgWarner Inc.
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 Which technology can adequately address these needs?
Copyright© 2014 BorgWarner Inc.
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 How to adapt IT architecture to be ready for Big Data ?
 Different kinds of bottlenecks
 Database performance
 OLAP performance
 Client / Frontend performance
 Network performance
Copyright© 2014 BorgWarner Inc.
42

 Introduction
 Big Data
 In General
 In Automotive Industry
 Big Data Analysis in BorgWarner‘s Supply Chain
 Outlook – From Top Floor to Shop Floor
Copyright© 2014 BorgWarner Inc.
43

And now –Strategic Planning / Further digitalization
Top Floor
Data
BI / SCM-
System
Shop Floor
ERP
Data
MES
Data
Production
Lines
Copyright© 2014 BorgWarner Inc.

Top Floor
Shop Floor
Data
ERP
Data
MES
Data
Copyright© 2014 BorgWarner Inc.
BI / SCM-
System
Interconnected
Production
Lines

 First industrial revolution:
Mechanization of production using water and steam power
 Second industrial revolution: Introduction of mass production with the help of electric power
 Third industrial revolution:
Digital revolution / Use of electronics and IT to further automate production
 Fourth industrial revolution:
Cyber physical systems
Copyright© 2014 BorgWarner Inc.

 Basic principle:
 Connecting machines, work pieces and systems to create intelligent networks along the entire value chain that can control each other autonomously
 Applications:
 Support mass customization
 Predictive maintenance / Near zero downtime
 Cross-Company Connected Production
Systems
Copyright© 2014 BorgWarner Inc.

Smart Factory - Support mass customization
Drivers:
 Strong customization of products
 Highly flexible (mass-) production
Required automation technology is improved by the introduction of methods of
 self-diagnosis
 self-configuration
 self-optimization
Key Technologies
 RFID-Detectors
 QR-Codes Readers
Copyright© 2014 BorgWarner Inc.

Smart Factory - Predictive maintenance
 Predictive manufacturing as an applicable approach toward near-zero downtime and transparency
 Use of sensory data
 Acoustics, Vibration, Pressure,
 Current, Voltage, Controller data
 Requires
 vast amount of data
 advanced prediction tools for a systematic process of data into useful information
 Combination with to historical data
Copyright© 2014 BorgWarner Inc.

Smart Factory - Cross-Company Connected Production
Idea:
 Networks and processes have so far been limited to one factory
 Smart Factories offer technologies to gradually overcome company boundaries in production
 Goal: Interconnect multiple factories or even geographical regions
Challenges:
 Lack of adequate skill-sets to expedite the march towards fourth industrial revolution
 General reluctance to change by stakeholders
Copyright© 2014 BorgWarner Inc.

 How to build up the corresponding knowledge?
 Knowledge areas
 IT Architecture
 Database technologies
 Data Modeling
 Knowledge Discovery / Statistics
 Technologies (e.g., Data Mining, Text Mining, Web Mining)
 Methods (e.g., Association rules Cluster Analysis, Classification,
Natural Language Processing, Regression Analysis, Spatial
Analysis)
Source: Manyika et al. (2011) – McKinsey Global Institute
Copyright© 2014 BorgWarner Inc.
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 BorgWarner offers
 Master Theses
 Bachelor Theses
 Job opportunities for Interns/Working Students
 …in the context of
Business Intelligence /
Big Data
 ..but also in
 ERP
 Infrastructure
 Contact:
Dr. Hendrik Meth
Manager Business Intelligence
BorgWarner IT Services Europe GmbH hmeth@borgwarner.com
Copyright© 2014 BorgWarner Inc.
52

Our Vision
 A Clean, Energy-Efficient World
Our Mission
 Deliver Innovative Powertrain Solutions that Improve
Fuel Economy, Emissions & Performance
Fuel Economy Emissions Performance
Copyright© 2014 BorgWarner Inc.
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Copyright© 2014 BorgWarner Inc.
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