Adapting to Change in the 4th Industrial Revolution. Graham Conlon Global Vice President, Extended Supply Chain, SAP

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1 Adapting to Change in the 4th Industrial Revolution Graham Conlon Global Vice President, Extended Supply Chain, SAP

2 Business Strategies Translating Business Realities to Business Strategies Personalized Solutions Connect Products, Assets & Machines to Product Networks Customer Centricity Transform Supply Chain & Logistics into Demand Networks Improve People s Lives Gain real-time network insight to action with Internet of Things 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 2

3 Industry 4.0: The 4th Industrial Revolution End of 18 th century Mechanization: Use of water and steam power to run mechanical production facilities Beginning of 20 th century Electrification: Use of electrical power to enable work-sharing mass production Early 1970s Computerization: Use of electronics and IT to automate production Today Networking: Use of cyber-physical systems to connect, transform and reimagine business 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 3 3

4 Internet of Things and Industry 4.0 Internal INDUSTRIAL scenario External scenario Internet of Things ERP Industry 4.0» All industries» All things and devices SMART THINGS SMART DEVICES 1 SMART industrial THINGS SMART industrial DEVICES MES SCADA / HMI Machine Layer» Manufacturing industries» OT- IT Convergence» Systems, things and devices in the Shop floor 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 4

5 Enablers for the Fourth Industrial Revolution Smart Products Sensors and RFID Embedded software Ubiquitous computing Mobile Unlimited network access Any time 24/7, everywhere Performance Internet / Big Data Social computing Cloud computing Event streaming, predictive Digital Products Empowered end consumer Digital Assets Empowered manufacturer Data acquisition 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 5

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7 Connect with billions of internet-enabled things to gain new insights..by combining business data with intelligent analysis of new signals from devices, networks & more

8 Transform the way you make decisions and take action..by executing operational processes through predictive and automated response all the way to the edge of the network

9 Reimagine your customer s experience..by empowering innovative new business models, valueadded services and customer responsive products 2015 SAP SE or an SAP affiliate company. All rights reserved. 9

10 Product Networks From Sequential Processes to Product Networks Connected Design Products Plan Operate Respond Deliver Connected Produce Manufacturing 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 10

11 SAP Connected Products Projects & Portfolios orchestrate all necessary resources and projects to meet market needs & portfolio goals Formulation Engineering accelerate innovation through collaborative product networks Design HANA capture and enable actionable intelligence from external product networks power your product innovation platform to operate at the speed of business 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 11

12 Create Smarter Products Design CAD Software Regulatory Packaging Simulation s Operational Data Usage Data Social Data Product Definition Data Sources IOT capture and enable actionable intelligence from external product networks Systems Engineering Requirements Management Product Compliance 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 12

13 Authoring Tool Integration Mechanical Design Electric Electronic Design Software Development Simulation NX CATIA V5 Creo Solid works Solid Edge Inventor Auto CAD SAP Engineering Control Center CAD Service Layer Visual Enterprise SAP PLM/SAP ERP SAP Engineering Control Center provides Consistent integration of authoring tools along the value chain 360 degree product view including mechanics, electronics, software, and simulation etc. Embedded quality and sustainability management capabilities for the authoring tool interfaces 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 13

14 What can Connected Products do? Formulation & Engineering Projects & Portfolio Design ExxonMobil custom engineers lubricants to enable speed and efficiency of product development while meeting customer demands. One central portfolio and project management solution 13,000 users 24 sites globally 30% lower research and development costs 3 month implementation of a single hub for creative authoring tool integration Simplified user experience across engineering base 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 14

15 What does Connected Products look like? 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 15

16 Handover to Manufacturing Quickly and visually manage the handover to manufacturing Manage BOM and routings directly from the visual context Simplify and improve change management process 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 17

17 Improved Value SAP Value Realized Increased innovation time Faster time to value Value to the Enterprise Accelerated new product introduction capabilities from a common yet tailored complex product description Transparency and access to data/information throughout the product lifecycle journey Value to the Engineer Less time spent on coordination with other departments More time spent on innovation Time Innovating 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 18

18 Challenges to Manufacturing Today The Market of One» Customized offerings» Regional preferences Extreme Variability» Productivity» Innovative technology Rapid Innovation» Time to market» innovative products 2015 SAP SE or an SAP affiliate company. All rights reserved. Page 19

19 Context of Industry 4.0: Connected Scenarios Service Provider 4 Machine Cloud 3 E-Commerce 3 Consumer/ customer Business Networks Integration Scenarios 1 Shop Floor to Top Floor 4 SAP ERP, PLM, APO, IBP 2 3 Machine to Machine e-commerce Integration Supplier 5 1 SAP Manufacturing Execution Suite 4 5 Machine Cloud Direct Replenishment Machine Layer SAP SE or an SAP affiliate company. All rights reserved. Page 20

20 Smart Factory Harley Davidson Process Optimization Business Benefits Visual Work Instructions $2.5MM >$2.5MM from 21 days to 6 hours Share Repurchase Reduce Time -7% +19% +25% Operations Monitoring Reduced Cost Net Margin Dividend 2015 SAP SE SE. or an All SAP rights affiliate reserved. company. All rights reserved

21 Connected Complex assembly Control shop floor activities View specifications and requirements Manage non-conformance and rework Engineering change management Enable supplier substitutions 2015 SAP SE or an SAP affiliate company. All rights reserved. 22

22 Business Model Transformation SAP SE or an SAP affiliate company. company. All rights All reserved. rights reserved

23 Pepsico improving asset utilization with SAP Collect all downtime & loss data in real-time Analyze the data & provide visibility Implement measures to reduce losses 65% to 80% Overall Equipment Effectiveness 2015 SAP SE or an SAP affiliate company. All rights reserved. 24

24 Takeaways The 4 th Industrial Revolution is an enabler. Connected Products and Manufacturing are key to the Extended Supply Chain. Connecting mitigates complexity SAP SE or an SAP affiliate company. All rights reserved. 25

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