BYD Builds a Smart Factory with the Innovation Control Center and SAP MaxAttention

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1 2014 SAP AG or an SAP affiliate company. All rights reserved. BYD Builds a Smart Factory with the Innovation Control Center and SAP MaxAttention

2 BYD Limited Industry Automotive and high tech IT and renewable energy solutions Products and Services Batteries; handset components and assembly; traditional, solar-power, and electric vehicles; energy storage and power plants; light-emitting diodes; and more Web Site SAP s SAP Extended Warehouse Management application, SAP Manufacturing Execution application, SAP enhancement package for the SAP ERP application, innovation control center from the SAP Active Global Support organization, SAP MaxAttention services Partner SAP Active Global Support Manufacturers face stiff international competition today and must innovate continually to keep pace. Chinese industry leader BYD Limited is committed to innovation, with a business model that embraces diversification and internationalization. But to achieve a leaner production cycle and full visualization of its manufacturing processes, BYD established an innovation control center with help from SAP MaxAttention services and the SAP Active Global Support (SAP AGS) organization. 2 / SAP SE or an SAP affiliate company. All rights reserved.

3 Realizing technological dreams Founded in 1995, BYD Limited (BYD) provides services for the IT, automobile, and new energy industries, and is listed on the Hong Kong and Shenzhen exchanges. The company employs roughly 180,000 people across 12 major industrial parks in China and has branches and offices in North America, Europe, and Asia. In 2013 BYD saw its revenue increase by 12.8% to billion yuan. 12 Major industrial parks in mainland China BYD has always adhered to the technology is king and innovation-oriented concepts of development to forge ahead while ensuring outstanding performance. In the IT field, BYD manufactures rechargeable batteries, cell phones, and computer components and provides assembly services. From design to manufacturing, testing, assembly, and services, BYD serves major global high tech and telecommunications companies and has become the industry s most competitive electronic manufacturing service provider and original design manufacturer. In the automotive sector, BYD focuses on vehicle molds, power trains, automotive electronics, and other core technologies while constantly enriching its product portfolio and accelerating the development of new energy vehicles. In the new energy field, BYD has launched solar and energy-storage power plants, light-emitting diodes, electric vehicles and forklift trucks, and other products. As the world s leading iron-battery technology innovator, BYD is actively leading the new energy revolution. 180,000 Employees In 2008 famous American investor and chairman and CEO of Berkshire Hathaway, Warren Buffett, purchased significant BYD shares. Buffett s backing helped increase brand value and the popularity of BYD electric cars and new energy products in North America, Europe, and around the world. 3 / SAP SE or an SAP affiliate company. All rights reserved.

4 Optimizing production The IT infrastructure at BYD had to keep pace with the company s rapid expansion and evolving organizational strategies. However, as business diversified and globalized, issues with the existing IT framework began to pop up. IT systems were not linked, which led to multiple data sources, and real-time data sharing was not possible. BYD s clients are world-leading, multinational corporations that adhere to the most rigorous manufacturing standards in their respective industries. They expect to be able to monitor production at BYD through real-time feedback on yield, yield fluctuations, and process stability. BYD s black box manufacturing model could not meet these requirements. After a period of careful research of the best software to support the market demands made on it, BYD selected the SAP Manufacturing Execution application as the software to best serve its long-term development goals. It also integrated the SAP ERP application with the SAP Extended Warehouse Management (SAP EWM) application to build a stable and highly effective management platform that supported process-oriented, transparent production control. The entire production flow at BYD is now traceable and can be monitored in real time. This has reduced production time, increased capacity, and lowered supply chain costs. By integrating and building collaborative links between business units, BYD achieved lateral pull-through between industrial groups, improved business processes, and increased operational efficiency. Overall operations and management have improved, providing a strong foundation for a promising and sustainable future at BYD. 4 / SAP SE or an SAP affiliate company. All rights reserved.

5 Gaining software support for the entire industry chain BYD operates in three different industries and manufactures a range of products that are quite diverse. It also places great importance on its strategic decision to manufacture in China and sell worldwide. To fulfill these monumental requirements, BYD s leadership wanted cutting-edge technology for its IT backbone and software that could handle multiple languages. The internationalized SAP software made the choice quite clear for BYD. An SAP software user since 2002 with many years of positive user experiences, BYD knew SAP could also deliver scalable software that would help improve its operational capacities on a continual basis. SAP software support for best practices for industry users also played a decisive role in BYD s choice, as did SAP s position as a leading software provider of enterprise resource planning (ERP) software. In addition, BYD felt that SAP was the only company able to provide an integrated, standardized software platform for the entire value chain. However, those were not the only advantages. Most of BYD s customers are Fortune 500 companies, and 85% of Fortune 500 companies use SAP software. By implementing SAP Manufacturing Execution, BYD could integrate with its international client base to build a solid foundation for further diversification on an international scale. SAP Manufacturing Execution is highly suited to our industry. It has won a high level of positive feedback on its rigorousness and has allowed us to integrate with our major clients to make our manufacturing processes transparent to them. Qiu Yan, CIO, BYD Limited 5 / SAP SE or an SAP affiliate company. All rights reserved.

6 Getting a tailored fit thanks to SAP Active Global Support BYD chose SAP AGS as its implementation partner, which worked closely with BYD to explore technology and seek solutions specific to BYD s requirements. Through the SAP MaxAttention services delivered by SAP AGS, BYD established an innovation control center, which facilitated the use of best practices for the most efficient, effective implementation. Despite complex business requirements and with the help of a standardized project management model from SAP AGS, it took just 10 months to complete the project. As a result, the software went live smoothly in October 2013 with no disruption to the business. The innovation control center and the integration validation services helped us every step of the way. Our internal IT management team learned and grew during the implementation. Qiu Yan, CIO, BYD Limited SAP AGS upgraded the SAP ERP application to accommodate multiple languages and localized the SAP enhancement package for SAP ERP. It improved the supply chain platform and moved BYD to the latest version of SAP EWM. SAP Manufacturing Execution was implemented and linked to BYD s IT systems by integrating SAP ERP with SAP EWM through the SAP Manufacturing Integration and Intelligence application. The innovation control center was instrumental in making the implementation process transparent. BYD also placed a great emphasis on training and built an outstanding IT team based on global management concepts from SAP and recommended best practices. Integration validation services performed by SAP AGS tested and optimized key business processes, reducing response times from 1 2 minutes to just over 10 seconds. 6 / SAP SE or an SAP affiliate company. All rights reserved.

7 Building visualization into the production platform SAP Manufacturing Execution improved business processes by linking BYD s business units and standardizing process management between workshops, which has reduced errors and the need to rework. It enabled transparent management for the entire production process as well. Manufacturing processes, materials, and test results are all traceable now, based on shared production data, which allows for total transparency across the production process. And based on messages the software displays, users can track the production process. The software eliminated manual errors by introducing automation. Handheld devices have made the production process keyless and paperless. Close integration between the production line and the software has greatly improved efficiency. For example, the software blocks processes from starting if the previous task was not completed, thus helping to ensure production follows the designed process flow. When a defective product is found, the software sends it to the repair station and halts subsequent contingent processes while the repair takes place. In addition, BYD has gained a solid foundation for information-based decision making with outstanding reporting functions that allow management to compile and analyze relevant, up-to-date numbers rapidly. The software analyzes historical inventory, materials, and production yield. Production data is displayed through charts and graphs for easy visualization. The software supports warehouse and productionline logistics, providing early warnings and real-time reporting. And very important to BYD s business, the software integrates with the software of external clients. 7 / SAP SE or an SAP affiliate company. All rights reserved.

8 Building a smart factory SAP Manufacturing Execution transformed production at BYD. To name just a few highlights: The production cycle was improved as a result of close integration between the warehouse and workshop. This enabled the warehouse to make shipments to end customers, thus reducing transportation costs and time. Production now adheres to the designed process flow thanks to the sophisticated warehouse management functions of SAP EWM. With the software synchronizing work-in-process (WIP) data and warehouse data, inventory has been reduced and inventory turnover has improved. By introducing wireless handheld devices and bar-code management, manual errors were significantly reduced. The user-friendly interface accelerated the production cycle and lowered training time and costs. Production data such as production capacity, yield, and inventory was synchronized with BYD s major clients in real time for complete transparency of BYD s manufacturing processes, which boosted customer satisfaction. Clear, intuitive charts improve traceability for internal management and allow production information to be shared efficiently. By integrating SAP Manufacturing Execution with the information platforms of external clients, BYD s business processes now support warehousing and production-line logistics and distribution. Real-time visualizations and earlywarning messages have greatly facilitated management inquiries. SAP helped us build an intelligent factory based on an advanced and efficient production management system. Qiu Yan, CIO, BYD Limited 8 / SAP SE or an SAP affiliate company. All rights reserved.

9 BYD Cultivating lean management As the domestic automobile market gets more competitive, the industry is headed for restructuring, with a whole new race about to kick off. BYD will be ready as it continues to grow along with its information platform. BYD plans to enhance SAP Manufacturing Execution and SAP ERP and implement software to support its work in other industries. Its radar field includes goals to accelerate its pace of lean production while satisfying additional customer needs. Seeing IT as the way to respond rapidly to market changes, BYD aims to use information to make proactive business decisions. And once its business data is up to scale, BYD will use it as a platform for business intelligence applications to enhance its decisionmaking abilities. BYD will then be on its way to a large-scale, standardized, digitized smart factory. Studio SAP 31985enUS (14/09) 2014 SAP SE or an SAP affiliate company. All rights reserved. 9 / 9

10 2014 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

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