Enabling Industry 4.0

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1 Enabling Industry 4.0 The future role of IT in the industry Klaus Hardy Mühleck. Darmstadt, Developing the future.

2 Content Introduction ThyssenKrupp Focus of IT at ThyssenKrupp Outlook: The future role of IT 2 Developing the future.

3 Content Introduction ThyssenKrupp Introduction ThyssenKrupp group Current challenges in the industry Current role of the IT Focus of IT at ThyssenKrupp Outlook: The future role of IT 3 Developing the future.

4 ThyssenKrupp Diversified Industrial Group Leading market positions One integrated company Active portfolio management Diversified Industrial Company Benchmark performance Profitable growth Capital efficiency Leading Engineering Competence 4 Developing the future.

5 Leading engineering expertise supports global sustainable progress Drivers Demand ( more ) Business opportunities Demand ( better ) Restrictions Demography Urbanization More consumer and capital goods More infrastructure and buildings Leading engineering expertise in Reduced CO 2 emissions, renewable energies Efficient infrastructure and processes Climate change Finite resources Globalization More resource and energy use Material Mechanical Plant Efficient resource and energy use, alternative energies Political framework 5 Developing the future.

6 Diversified industrial group: Our business areas Key indicators fiscal 2012/2013* Components Technology Elevator Technology Industrial Solutions Materials Services Steel Americas Steel Europe Sales ( mill) EBIT** ( mill) Employees 5, ,737 Sales ( mill) EBIT** ( mill) Employees 6, ,112 Sales ( mill) EBIT** ( mill) Employees 5, ,841 Sales ( mill) EBIT** ( mill) Employees 11, ,978 Sales ( mill) EBIT** ( mill) Employees 1,867 (495) 4,112 Sales ( mill) EBIT** ( mill) Employees 9, ,961 * ** Continuing operations (after reclassification of Steel Americas) before consolidation Adjusted before consolidation 6 Developing the future.

7 Examples of our capabilities Material o Customer-specific material solutions o Efficient materials manufacturing and processing o Material services on the basis of powerful IT and logistics systems Mechanical o Design and manufacture of components for the automotive, machinery, energy and construction sectors o Design, production and servicing of elevators, moving walks and escalators Plant o o Planning and construction of plants and machinery for the raw material and chemical industries Global engineering and service network 7 Developing the future.

8 Content Introduction ThyssenKrupp Focus of IT at ThyssenKrupp Current status Main chances & challenges Business needs driving the change Why is transformation necessary? How do we manage the transformation? Outlook: The future role of IT 8 Developing the future.

9 ThyssenKrupp Strategic Way Forward Diversified industrial company Company Positioning More & Better Sustainability Change Management People Success Performance Orientation Customers & Markets Financial Stability Strategic Push Mission Statement Employee survey Active portfolio management Brand ThyssenKrupp Balanced portfolio White/adjacent spaces Governance Code of conduct Leadership ACT: Network organization Transparency Compliance Systems & processes Leadership Competencies HR Global 2020 Change to perform Lead to engage Enable to grow HR empowerment Continuous benchmarking Profitable growth Cost control Capital efficiency Cash generation Market intelligence Sector strategies Customer relationships Sales excellence Significant cash flow Low net financial debts Investment grade Sustainable equity situation Anorganic growth: Acquisitions Organic growth: Expand market positions Strengthen innovation & technology 9 Developing the future.

10 Group IT Strategy derived from Company Positioning Diversified industrial company Company Positioning More & Better Sustainability Change Management People Success Performance Orientation Customers & Markets Financial Stability Strategic Push Digitalization of Business Group IT Strategy Perform & Continue Improvement Consolidate IT Infrastructure, Data & Processes Foster Industry 4.0 ecosystem Global collaboration & exchange Follow Cloud Platform Strategy Handle large-scale Data & Analytics Joint IT Service Proposition 10 Developing the future.

11 Transformation and Harmonization of IT Organization Centralize steering of the organization P L A N CO ITM Company Standards Cooperate across Business Areas Cooperate with outsourcing partners B U I L D R U N CT ET IS MX SE BA Standards BA Standards BA Standards BA Standards Global Shared Services IT External Service Providers BA Standards Regions... Harmonize IT on Business Area level Harmonize infrastructure services across Business Areas 11 Developing the future.

12 Transformation: ThyssenKrupp IT Management Matrix and Governance IT Components Technology IT Elevator Technology IT Industrial Solutions IT Material Services IT Steel Europe IT Regionen IT Strategy & Architecture CO/ITM Governance IT Planning & Controlling IT Sourcing Decisions Programs/ Templates/ AMC Change Requests/ AMS Global Shared Services IT 12 Developing the future.

13 Business needs driving the Change Innovate Transform Run IT Classic industry vs. digital business (e.g. Cooperation 4.0, Cloud Computing) IT as a product or within a product Cross-linking the Corporate Functions with IT solutions Process, added value Methods of IT design Integrated network Data center Mobile communication Desktop, Printers 13 Developing the future.

14 Example Infrastructure Consolidation Secure Zones GDC EMEA IAM & IAG Carrier EMEA GDC AM Carrier AM Private Cloud Service Global Help Desk Global Operation Center GDC APAC Public Cloud Service Public Cloud Services Group Company Carrier APAC 14 Developing the future.

15 ThyssenKrupp SAP Landscape AS IS TO BE > 200 ERP systems 20+ ERP systems ET CT IS SE SAP + Non-SAP MX CO Data and Process Harmonization Operating Control Best-in-Class Processes Transparency Reduction of Complexity and Costs Corporate Core template + library CT MX ET IS SE Business Area templates SAP HANA 15 Developing the future.

16 Content Introduction ThyssenKrupp Focus of IT at ThyssenKrupp Outlook: The future role of IT How does the new IT look like Chances to be taken: examples for enabling the business Outlook to innovative IT: technology enabling industry 16 Developing the future.

17 Group IT Strategy derived from Company Positioning Diversified industrial company Company Positioning More & Better Sustainability Change Management People Success Performance Orientation Customers & Markets Financial Stability Strategic Push Digitalization of Business Group IT Strategy Perform & Continue Improvement Consolidate IT Infrastructure, Data & Processes Foster Industry 4.0 ecosystem Global collaboration & exchange Follow Cloud Platform Strategy Handle large-scale Data & Analytics Joint IT Service Proposition 17 Developing the future.

18 Technology Push Gain competitive advantage by exploiting new technologies Raising amount of mobile devices (Tablets, Phones, ) Cloud-Client Architecture Mobile Devices only as gateway Bring Your Own Device Global seamless access Machine to Machine communications IT Security Mobile Computing Cloud Integration becoming standard in many companies Hybrid IT Scenarios Industry 4.0 Collaboration Web 2.0 Internet of Things Technology Push Hybrid IT & Cloud Computing Internal IT as Service Broker Data as new economic resource New Communication mechanisms Digital Natives Social Media Big Data & Analytics Real-time analytics Demand for new skills 18 Developing the future.

19 Group IT Strategy derived from Business Objectives Gaining competitive advantage by innovating new technologies Business Objectives Group IT Strategy Technology Push Change Management People Success Performance Orientation Customers & Markets Financial Stability Strategic Push Transparency & Compliance IT skill profile management IT Efficiency Clear Customerorientation IT Agility Technology Innovation Consolidate IT Infrastructure, Data & Processes Foster Industry 4.0 ecosystem Facilitate global collaboration & exchange Follow Cloud Platform Strategy Handle large-scale Data & Analytics Joint IT Service Proposition Internal IT as service broker Data as economic resource New collaboration mechanisms New business models Global seamless access Hybrid IT and Cloud Computing Big Data & Analytics Social Media Internet of Things Mobile Computing Group-wide Business Objectives Strategic Directions Top IT Trends 19 Developing the future.

20 Cooperation 4.0 defines the interaction between business and IT Product Portfolio Industrial plants Lifts Conveyor systems Horizontal cooperation across value-added networks Social IT Context-based Services Semantic Security Augmented Reality Cooperation 4.0 Corporate IT Collaboration Platforms IT Process Optimization IT Service Mgmt. Standards Cloud-enabled Business Processes Digitalization of the Business Seamless Collaboration 3D Printing Big Data Value Chain Development Production Logistics Service Vertical cooperation by engineering across the entire value chain Cooperation 4.0 is characterized by increased cooperation and a high degree of standardization 20 Developing the future.

21 Example Steel Europe: Inter-site production at BA SE calls for autarkic production network segments to avoid production losses Business requirements to be met by IT: Complex network of processing units Support of continuous production and discrete production processes, integrating them in business control systems Uninterruptible supply of the delimited production stages specific and highly available IT services Improvement of planning and control processes and systems in order to improve adherence to delivery dates 21 Developing the future.

22 Werksübergreifender Materialfluß Duisburg, Meeting Beeckerwerth Bruckhausen Duisburg Süd, HKM Strangguss Warmband Adjustage, Nacharbeit sonstige Dimensionierung Kaltband (inkl. Kombi) Glühen Nachwalzen ThyssenKrupp Steel Europe Eichen, Finnentrop Feuerbeschichtung EBA, BBA Dortmund Bochum Example Steel Europe: Planning process must also take into account broad product portfolio and complex plant structures Portfolio Broad product portfolio including ~ 28,000 articles of~ 950 steel grades Almost exclusively customer-specific production ab initio and of products with by-product/by-program requirements Complex system of rules comprising ~ 15,000-20,000 rules for determining the technical production parameters for an order (up to 2,800/order) Orders > 300,000 customer order items per year involving an order volume of ~ 12 million tons High flexibility conc. order modifications at short notice by customer Requirement of short delivery times Dynamic allocation of material to customer orders (subsequent reallocation of material) Fluctuating backlogs of orders Komplexes Unternehmensumfeld Network Complex network consisting of 13 structurally different sites high logistic effort of on average ~ 3 site changes per order Techn. requirements Many technical restrictions have a non-deterministic impact on the sequencing at the units Finalization problems in continuous casting 22 Developing the future.

23 Development of Corporate IT 4.0 Grown IT Working Model Cooperative IT Working Model to support Cooperation 4.0 IT Control/ Governance Innovation Management IT Architecture Guidance Plan Build Run Templates Patterns Networking Application Services Communities End-2-End Integrators IT Services/ Execution Commodity Infrastructure Cloud Platform IT Basics 23 Developing the future.

24 Innovative IT: Technology enabling Industry 4.0 It's very hard for me to get a new car. It's really hard for me to get a new house. It's really hard for me to move on from the things that give me stability. Jodie Foster Stability and flexibility in IT seem to be contradictory at first, but for an innovative, business enabling IT - you need the best of both worlds working together. ThyssenKrupp is innovating with SAP in many areas including Cloud, Big Data and Analytics in order to gain a competitive advantage. A vital IT is key for Industry 4.0, Cooperation 4.0 and Digital Business. 24 Developing the future.

25 Any questions? 25 Developing the future.

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