Integrated Manufacturing Execution in the customer order process

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1 WHITE PAPER Integrated Manufacturing Execution in the customer order process

2 Table of contents 1 Integrated Manufacturing Execution Introduction Challenge Concept of standardisation and integration strategic and technical 5 2 The product PLUS Integrated product PLUS custom-made for SAP ERP PLUS and SAP ME demarcation of the fields of application Advantages Simple process design and introduction of PLUS How can this be achieved? 16 Manufacturing Execution, a mission-critical system requires the highest availability 17 5 Summary Outlook 18 6 Table of figures 19 7 Terminology 19

3 1. Integrated Manufacturing Execution 1.1 Introduction Integrated Manufacturing Execution what s behind all this? The highest standards are required of stability, complexity, integrability, flexibility and cost-efficiency in the automotive industry customer order process. These requirements are set to further intensify: in view of an intensified competitive situation, innovation cycles must be made shorter, costs must be reduced and product quality must be increased for simultaneously consistent customer orientation and the internationalisation of production. The various challenges cannot be overcome without innovative IT standards and standard products. The improvement of production control especially offers great potentials in terms of process and quality improvement, cost reduction and production flexibility. Furthermore, if IT is deployed as a strategic tool, all processes can be focussed on the achievement of business objectives and strategies for future growth can be developed. Standard products with new content create new areas of freedom for companies to use best practices and to concentrate further on the core competencies. This White Paper provides an overview of the challenges from the process perspective and the associated consequences for IT. PLUS, the new solution for an efficient and integrated production control system is derived from these broad challenges. PLUS is the only complete product for controlling automotive production. As a MES on a SAP basis, it semantically combines planning, logistics and production: ERP, planning, machine. Thanks to the standardised technology platform SAP NetWeaverTM, PLUS is a fully integrated Manufacturing Execution System and a real innovation in the OEM market. Heterogeneous system infrastructures are a thing of the past, production can be harmonised and standardised across company borders and borders between countries. PLUS consists of a total of 30 different modules, which can be deployed individually or in combination. Standardisation is possible due to the service-oriented architecture (SOA), which also enables the quick and cost-efficient implementation of new demands and changes, whether it concerns process adaptation, new locations or multi-site production.

4 Figure 1: Schematic representation of a customer order process 1.2 Challenge The intensity of competition in the automotive industry has increased significantly. The result: shorter innovation cycles increase complexity and dynamics in production. Furthermore, in order to be able to continue growing, the demands on flexibility, internationality and integrability are increasing for automotive manufacturers. Today, a successful company must consistently act as a customer-driven company and therefore be very flexibly geared towards the market requirements. From the order to the dispatching, production and distribution, to the delivery to the end customers, the overall production control system must be optimally oriented to the requirements of the customer and the market. It is therefore necessary to combine two very contradictory objectives. On the one hand, the sales department wants to increase market share and revenue with the continuous realisation of customer requests. On the other hand, this diverges from the interests of production to maintain the taking of orders as early as possible, the accuracy of forecasting, uniform production programmes and a limited flexibility regarding changes, in order to keep the costs as low as possible. The customer order process must strike a balance between stable production programmes and customer-oriented flexibility. A company must be able to respond quickly to fluctuations in demand. All supply processes must be synchronised in order to ensure the supply of materials. Very high quantities, often with a very high level of complexity and range of variants, must also be representable at various plants.

5 To control such a process efficiently, flexibly, with good performance, at low-cost and in a fail-proof manner, is a major challenge for IT. The right Manufacturing Execution System (MES) combines the commercial order processing and capacity planning at ERP level with the production resource control level. The result: an integrative and harmonised process. A modern, integrative production control system supports production control, planning, controlling and quality management in all areas of the plant. It helps in the implementation of processes, maintains stability and ensures a smooth production process. 1.3 Concept of standardisation and integration strategic and technical Regardless of size, the manufacturing facilities of almost all manufacturers are not located on company premises, as many companies have developed in a very decentralised way, especially in recent years. Consequently, the IT infrastructure in the different individual plants is heterogeneous. In order to remain competitive, the companies must give increasing weight to target dimensions of time and flexibility, in addition to the classic target figures of cost reduction and quality. Consistent standardisation can support the increasing globalisation and the conquest of new markets. Standardised IT usage across company borders is essential to support these procedural objectives. A product approach with standardised IT products is the ideal condition for the standardisation of IT architecture. The heart of the customer order process, and thus an integral part, is an efficient and integrated Manufacturing Execution System. The representation, control, analysis and evaluation of dynamic relationships is an important key for the survivability and adaptability of the company. A modern, standardised MES product must thereby meet all architectural and operational conditions. The most important technical and architectural topics are: High availability Independence of platforms and databases Support for all current protocols Direct connection to machine control systems Service-oriented architecture As the central component of the customer order process, the MES system must also meet all of the essential process requirements from shell construction to intelligent buffer/sorter management, painting, assembly, integrated inline quality management up to the final O.K. and the transfer to Sales. For this purpose, the important characteristics and functions would be: Complete process coverage Service-oriented process modelling

6 Inclusion of reference structures Best practices Architecture patterns A modern MES System provides the company with flexible process capability. Today s market conditions require the development of classic production facilities to a modern service centre. Many companies are not yet prepared: The costeffectiveness of the modern approach to adding value is a characteristic of the process, no longer the product. The pivotal potential of a company lies in its process capability in the future. This is where the MES product PLUS from abat+ comes in. 2 The product PLUS PLUS stands for Produktions- Leit- und Steuerungssystem (production management and control system). PLUS a modular structured product for continuous integrated production control, with which all production processes can be controlled optimally und more efficiently. The product consists of a total of 30 different modules, which can be deployed individually (independently) or in combination. PLUS takes over the management and control of individual production stages and is thus the central building block of the customer order process. The core functionalities of PLUS are order management, complete system control and continuous car body and material flow control. The integrated order management system ensures the seamless management of all relevant processes, systems and data. No information is lost at the highest possible availability. Due to the continuous and comprehensive product and material flow control system, the integrative PLUS system is able to manage production inventories, the supply and disposal of materials from workplaces and the handling of tools. At the beginning of a construction contract, the necessary components from the bill of materials are transported to the machine and used. This creates an inventory in production (also referred to as Work-in-Process, WIP in short), which is either transported to the next machine or to the warehouse after processing. In addition, the machines are automatically supplied with tools and other equipment. The control centre has an overview of the progress of an order at any time, including quality-related data, inventories for post-processing and rejection, via production cockpits.

7 Figure 2: Demarcation of ERP from the process view The creation and preservation of quality requires many sections, which collude on various levels. This applies for both the development and production of vehicles. PLUS provides very efficient and sustainable error recording and reworking control during production. Furthermore, sources of error can be identified and eliminated. PLUS inline quality management (IQM) covers the entire production process, which begins with shell construction and ends with the delivery of the vehicle to the end customers. Of course sustainability in IQM also requires complete vehicle and error tracking, continuous documentation of all safety-related data, as well as the support of extensive further analyses. Having information available at the right time and place and in the right quality is also a critical success factor in production. PLUS provides very comprehensive functions to support mobile terminals and to make them utilisable for employees. Functions such as the optimal workplace, mobile data collection or optimal factory support are only a few keywords in production with PLUS.

8 All PLUS product functions are designed as services (service-oriented architecture) and can be used flexibly via a PLUS process manager. Thus, all relevant production processes and the complete integration of the customer order process can be ensured. New demands and changes can be implemented quickly and cost-efficiently through the service-oriented architecture, whether it concerns process adaptation, new locations or multi-site production. PLUS responds flexibly and efficiently to the increasing challenges in the customer order process, as all services are oriented to the process requirements. The advantages of integration through MES do not end with product tracing and the management of WIP inventories. Production becomes transparent, as the current production situation can be detected in real time and a consistent production plan can be established. The so-called real time visibility provides faster lead times and reduced stocks. The insulation of the production level is removed. The functional depth of ERP is extended to include the production components. The integration of the customer order process provides the sales department with exact information on scheduled delivery dates and gives the management level a complete overview of the supply chain. In this way, the entire order logistics from production to dispatch can be managed. The result: genuine, demand-oriented production in which the product, the inventories and the processes are actively managed. In the event of process upsets or the rescheduling production plans, targeted intervention in the production process is possible. The systems in the customer order process receive all information on unplanned events and respond automatically through the correction of plan data. MES availability of 100% is normally aimed for in the automotive industry. The PLUS product particularly accommodates this requirement with its overall solution and provides the highest application availability that can be ensured with current commercial IT systems.

9 Figure 3: Overview of the PLUS functions

10 Figure 4: PLUS process overview 2.1 Integrated product PLUS custom-made for SAP ERP In contrast to the conventional stand-alone solutions, heterogeneous software architecture and installed, i.e. difficult to maintain IT solutions, maximum attention is paid to standardisation, synergies and efficiency in the standard PLUS product mix. The architecture processes and software used is based on a complete, integrated and standardised solution. The consistent integration of PLUS with SAP applications on the basis of standardised meta data is a unique feature of the PLUS system. This standardisation ensures the synchronisation of existing corporate data and business processes in the SAP system with the data stored in PLUS: The company is thereby fully described on a consistent level with its data and processes.

11 Figure 5: MES on the SAP NetWeaver platform PLUS is a production control solution that is custom-made for SAP. It meets all requirements relating to completely integrated scenarios with high performance components for construction, use and maintenance. A pre-configured and needs-oriented solution developed with business information models which are derived from SAP Active, standardised, integrated and synchronised meta data repository Automated data collection and synchronisation processes for the supply and balancing of environments Easy to use process manager for the service oriented architecture for implementation, maintenance and customised extensions Standardised interfaces for the connection of external, superior or inferior systems SAP NetWeaver uses a central SAP application platform. In this connection, to link standard SAP applications, such as logistics solutions, and the standard applications of other manufacturers on a common platform, is a unique feature. The technology platform serves as the basis for service-oriented architecture and integrated processes with SAP Business Suite applications. abat+ uses the model-driven development environment of SAP NetWeaver for the PLUS product.

12 The SAP NetWeaver technology platform adds complete data integration and data quality assurance to PLUS, and master data management with the SAP standard product. This is the key to smooth and highly efficient processes. Thus, synergies can actually occur and be exploited more easily. Therefore, different company departments or plants can use the product without requiring major effort. Higher stability in the processes and quality is as much the result of higher flexibility. In combination with the integrated SOA concept, PLUS offers maximum flexibility in process requirements, implementation and changes across company borders and globally. 2.2 PLUS and SAP ME demarcation of the fields of application SAP Manufacturing Execution (SAP ME) is a high performance, scalable production enterprise level solution, with the help of which global manufacturers can manage and control manufacturing and production processes. The solution provides diverse and comprehensive functions, which integrate enterprise systems into the branch of production. These functions facilitate full transparency on the component and material level for individual and global installations. SAP ME is the ideal solution for tier 1 and tier 2 suppliers, for environments with corresponding complexities and variations (shown in fig. 6). The PLUS product presented in the White Paper offers the ideal solution for environments at a higher level of complexity, volume and variants, as a counter move to SAP ME. Such environments are typically found with automotive manufacturers (OEMs). Both products complement each other through their corresponding primary uses (see fig. 6).

13 Figure 6: Positioning SAP ME versus PLUS 2.3 Advantages The efficiency and flexibility of the PLUS system make a decisive contribution to strengthening competitiveness. The standard MES opens a new dimension of information management quality in which it consistently controls the complete production process and ensures quality. PLUS, with its service-oriented architecture and in connection with the flexible modular structure, is the efficient solution to the standardisation and the transition to flexible production in the context of the customer order process. Just like building blocks, all processes are assembled in a serviceoriented manner on one individual platform. The dedicated tools and the business content pave the way for rapid implementation. For this reason, users save substantial resources for data modelling and production environment construction, which significantly contributes to a rapid return on investment. All control functions are designed for easy handling and can therefore be learned easily. The PLUS system with the functions of electronic control panel, plant data collection, consistent recording and evaluation of quality-related data, management of work processes, tools and materials management, brings transparency to the process, provides very high production quality and increases cost-effectiveness.

14 The advantages of the service-oriented PLUS approach can be represented in 4 main points: 1. Technological advantages Unique standard product for production control Standardised processes according to ITIL Complete integration in SAP through the SAP NetWeaver technology platform Integrated service-oriented architecture rapid deployment of application through short and simplified implementation Multi-language support High flexibility, simpler and faster migration Low hardware requirements Independence from ever-shorter software life cycles Faster and simpler scalability Improved administration Real-time processing 2. Process advantages Process standardisation Higher degree of coverage of processes through ready-made content with semantic integration in SAP High flexibility in process design High cost-cutting potentials Flexible Process functions help to deal with complexity and dynamics Greater flexibility of production changes can be established quickly and easily Multiple production variety of products Lead-time to production

15 3. Quality advantages / service and performance advantages Legal and procedural certainty through service level agreements (SLA) Clearly defined services and responsibilities Guarantee of high availability, system stability and data integrity Complete product and process support on all levels Standard release cycles 4. Cost advantages Lower (investment) costs and TCO Product approach with standardisation options Lower capital commitment and higher liquidity Better cost control and more planning certainty through transparent cost structures Optimised use of resources and concentration on core competencies is possible 5. Strategic advantages More transparency and flexibility through the standardisation of the production environment International production and production across company borders and borders between countries is enabled and simplified Flexible production: Different products (models and brands) with varying complexity (small and large) on one line Integration of new technologies: already prepared for the future new drive technologies such as electric, hybrid, hydrogen or other mobility concepts. New communication media such as internet, mobile scenarios New business models: Collaborative production and application scenarios, integration of partners, overall production, etc. Decentralised business structures global reach vs. local needs and requirements with standardised systemic alliances High process competence, as abat+ has ensured business operations in numerous manufacturing companies for many years. This is often directly with the customer in order to guarantee the required reaction rate. Variable use of hardware capabilities and manpower resources with the aim of keeping down fixed costs and track real demand with variable costs. These may include: Highest availability of production-critical systems through the gradual adaptation of the systems, in both the infrastructure and the software used Strategic focus of IT and the specialist department on the corporate objectives and the corresponding tasks

16 3 Simple process design and introduction of PLUS How can this be achieved? A comprehensive and successful concept requires a strategic approach. abat+ has 20 years of experience in development, implementation, roll-out and support, which have been gained through a variety of projects around the world. The result is a standardised procedure which can be adapted to the individualised needs of each customer s situation. This concept includes the following phases: Quick Assessment Inspection of the customer architecture including the current situation Description of a future scenario Assessment of the potentials for optimisation Due Diligence and fit/gap analysis Strategic analysis of the environment Determination of the appropriate requirements (infrastructure, processes, SLA parameters) Calculation of the degree of coverage through standardisation and a standard product Identification of potentials through standardisation Specification of developments and development plan Preparation of specifications based on the fit/gap analysis Development plan and evaluation of necessary developments Adjustment of processes and functions Implementation and roll-out plan Development and adjustment of a potential roll-out plan Creation of a roll-out case Template proposal Creation of the support concept incl. governance model Development of service level Level concept with 1st, 2nd and 3rd level support Ticket system Definition of KPIs

17 Mode of Operations Initial situation for operation Transition period Future operating situation Continuous improvement process 4 Manufacturing Execution, a mission-critical system requires the highest availability The application availability of MES should be deduced, taking account of economic aspects, from the requirements of the production plant. System failures or faults normally directly affect production and incur high costs due to the aforementioned real-time requirements of MES applications. Consequently, a MES availability of 100% is normally aimed for in the automotive industry. The product PLUS particularly takes these requirements into account through the overall solution and offers the highest application availability, which can be ensured according to the current state of technology with commercial IT systems. High availability first requires hardware and software architecture, which offers reliability automatically and through its design per se. For this purpose, systems with self-healing capabilities, which have been designed with a redundant feature to this end, are preferably deployed. The operating system software and the application software support the redundancy. An optional, additional disaster recovery location is possible for highly critical values. However, the aim of such a partnership should be to monitor the overall production process availability and to initiate remedial action at an early stage, in order to avoid any impacts on production. In this context, the customer and abat+ must define an integrated approach.

18 5 Summary Outlook In recent years, we have observed that automotive manufacturers have assigned significant volumes of products, systems and services to their suppliers, in order to concentrate on their core competencies. This has additionally increased the demands on controlling and monitoring of production, logistics and quality management processes. However, the trend towards outsourcing cannot yet be observed with production-related IT structures. On the contrary, these have often developed into difficult-to-control monoliths through the increasing complexity in companies, whose maintenance devours 75 % of the IT budget on average. Only the latest information technology can meet the ever more complex requirements. In order to remain competitive, companies would do well to phase out stand-alone solutions for production management and control technology, maintenance management, vehicle identification, quality management, etc. Only concepts which offer a basis for strategic control in addition to an optimal operational control of the processes, socalled integrated governance models, will establish themselves in the medium-term. Therefore, operating data, such as production information, product and production errors, faults, stoppages, quantities or measure information from production and assembly processes, is completely recorded and practically processed in the PLUS database. This data enables the fundamental improvement in operational control and the efficient organisation of production. An integrated governance model ensures that demands on IT and MES are formulated in such a way that that the operation is optimally aligned to the achievement of business objectives. Furthermore, strategies for future business expansion can be developed with the aid of such a model. The risks can only be mitigated in the long term, and the competitiveness improved, in a system in which objectives, success factors and decision scenarios are clearly formulated.

19 6 Table of figures Fig. 1 Schematic representation of a customer order process 4 Fig. 2 Demarcation of ERP from the process view 7 Fig. 3 Overview of the PLUS functions 9 Fig. 4 PLUS process overview 9 Fig. 5 MES on the SAP NetWeaver platform 10 Fig. 6 Positioning SAP ME versus PLUS 12 7 Terminology Term FaaS MES ERP SLA TCO ITIL OEM PLUS Definition Factory as a Service : Concept for the integrated service-oriented support of production companies Manufacturing Execution System Enterprise Resource Planning Service Level Agreement Total Cost of Ownership IT Infrastructure Library Original Equipment Manufacturer Production management and control system. The central software solution in the FaaS model

20 abat+ GmbH Innovationspark am Beckerturm Kaiserstraße St. Ingbert T: / F: / Copyright 2011 by abat + GmbH SAP, SAP NetWeaver, SAP ME and other SAP products mentioned in the text and the corresponding logos are trademarks or registered trademarks of SAP AG in Germany and other countries worldwide

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