Full of Value Safe, compliant, and flexible production from design to delivery. simatic IT FOR THE DAIRY INDUSTRY

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1 Full of Value Safe, compliant, and flexible production from design to delivery simatic IT FOR THE DAIRY INDUSTRY s

2 stay Business Goals 2

3 ahead What does it take to achieve your business goals? Improving food safety and guaranteeing regulatory compliance, responding in time to new customer demands and consumer preferences, managing distributed production while sustaining profit margins and increasing productivity; these are all among the complex challenges facing today s dairy manufacturers. Every dairy manufacturer has to determine the right business and operational strategies in order to reconcile requirements in terms of quality and regulatory compliance and the necessity for a more flexible and efficient production. SIMATIC IT is the Manufacturing Execution System (MES) from Siemens. SIMATIC IT allows dairy manufacturers to exploit new sources of productivity and quality by bridging the gap between business systems and the control layer and by synchronizing operations along the production life cycle. SIMATIC IT offers integrated quality assurance, tracking and tracing and comes with special functions for the dairy industry. What can we do for you? 3

4 DAIRY Dairy Products quality is obvious Sophisticated and continuously improved manufacturing procedures guarantee that new products are constantly being offered to consumers. From the perspective of the consumer, these products must all satisfy one criterion above all others: Quality. Few however, consider that dairy products are a highly perishable food and that, as a fast moving consumer good, they must be produced in very large quantities at a consistently high quality. What the consumer takes for granted is enforced by volumes of legislation and official rules. Continuous checks from farmer to retailer ensure compliance with these stringent requirements. In addition, these checks are complemented by a multitude of voluntary self-controls (HACCP, ISO, IFS, etc.). The steady growth rates of dairy sales underline the success of this effort. Challenges 4

5 MARKET The dairy industry has made extraordinary efforts to increase food safety requiring an ever increasing degree of attention. Substantial support for this progress lies in the dynamic technological development process found in the dairy sector. Ultramodern dairy technology and research enable companies to guarantee obvious quality as well as survive in the increasingly difficult and global markets, all thanks to innovation and cost leadership. According to the Organization for Economic Cooperation and Development, the global dairy market will grow at a rate of approximately 1% per annum. The dairy industry constitutes the largest food and beverage segment in Europe and it must and will continue to serve these markets. Given the level of international competition, a key issue will be to balance eventual geographic competitive advantages with innovation and know-how. Michael Brandl - Managing Director Milchindustrie-Verband e.v. German Dairy Industry Association Manufacturing Execution Systems Benefits MES Provides Long-Term Revenue and Market Benefits Beyond Easy-to-Quantify Operational Cost Savings July 30, 2003 AMR Research Report Bill Swanton, Alison Smith The largest benefits of MES [Manufacturing Execution Systems] come from leveraging the visibility that MES affords into overarching continuous process improvement and supply chain management strategies. At a fraction of the cost and time of an ERP initiative, an MES platform provides visibility into accurate, high-velocity information about production performance. This enables manufacturers to recognize and then seize new opportunities both internally and in the marketplace. By extending production visibility throughout the internal supply chain, one manufacturer increased product margins on both higher volumes and higher product mix, all while keeping costs constant. The net effect was to preserve profitability despite lower sales-a universal theme for manufacturers in today's uncertain economy. Missing the Real ROI: MES As a Case Study August 11, 2003 AMR Research Alert Bill Swanton, Alison Smith AMR Research interviewed more than 20 companies that had implemented MES recently. We found that companies saw three tiers of benefits from their projects: Cost reductions (1x savings in the first year) Inventory, costs, people, and cycle time Process improvements (3x savings in the second year) Faster New Product Introduction (NPI), new customer compliance, and data services from better tracking and genealogy Market improvements (10x savings in the third year) Tuning the manufacturing operation to be extremely responsive to actual demand allows companies to capture market share without increasing costs. Reprinted with the permission of AMR Research ( ARC on Collaborative Manufacturing ARC 2003: CPM Systems Market Analysis and Forecast through 2008 Collaborative manufacturing focuses on new ways of leveraging information technologies to compete. It is about connecting the plant floor production systems to business systems and knitting together internal manufacturing and business processes together with external partner's processes. Collaborative manufacturing is a competitive strategy that leverages Internet technologies, fosters collaboration with value network partners, creates electronically driven workflows, and promotes a focus on core manufacturing competencies. This creates an environment for manufacturers to compete as a highly flexible and responsive operation that can meet the expectations of customers and value network partners, but it also demands a level of integration rarely seen before. Reprinted with the permission of ARC Advisory Group ( 5

6 STRATEGIC AD Production Efficien To secure competitiveness and respond successfully to changing market and regulatory requirements, dairy companies continuously strive to optimize their operations even further. SIMATIC IT can effectively support dairy customers in achieving their business goals, particularly in regard to food safety, distributed manufacturing, market responsiveness and production efficiency. Distributed M How do you reconcile global procedures and local manufactur To enter global markets and increase productivity, most dairy c product specifications across distributed facilities, while at th peculiarities. This cannot be managed with an ERP system alon SIMATIC IT offers comprehensive, proven and scalable functions operations at a high level, yet maintaining flexibility at an oper Food Safety and Regulatory Compliance How do you meet requirements for Food Safety and Regulatory Compliance? Consumers are increasingly concerned with food safety. This has caused regulatory bodies worldwide to react with tougher legislation, industry guidance, food safety initiatives and education programs. However, meeting the requirements of the newly emerging rules and regulations such as the US Bioterrorism Act, the FDA s 21 CFR 11 and the European regulation EC 178/2002 must be reconciled with production efficiency and flexibility. SIMATIC IT completly integrates quality control and assurance into production processes, thereby enabling tracking and tracing, full product genealogy and regulatory compliance. Dairy Busin Highly perishab Increasingly se Squeezed prod Highest quality Changing cons Need for brand How do you increase profitability? Production efficiency and flexibility remain top priorities to achi and inventory control have become major challenges in the cu must significantly increase production transparency, enable rea quality and manufacturing related activities. These capabilities a timely manner to new production requirements, reduce scrap SIMATIC IT enables the design, implementation, execution, syn It provides a uniquely flexible modeling environment, the SIMA components, all fully compliant with the new ISA 95 industry s 6

7 VANTAGES anufacturing ing? ompanies have to manage production and quality including e same time taking into account local market and production e. to design, implement, execute, control and modify standardized ational level. ess Drivers le products vere regulation uct margins expectations umer preferences conformance Market Responsiveness and Brand Conformance How do you reduce time-to-time-to-market and increase customer loyalty? Changing consumer preferences, shortened product life cycles and the appearance of new classes of food such as nutraceuticals all put pressure on manufacturing. Consumers dictate the market. Increasing product varieties is one key to success. But product conformance and improving brand positioning all over the world is also imperative. Dairy manufacturers must therefore be able to change their product and process designs even faster in order to introduce new and improved products at a competitive cost. SIMATIC IT enables the management and control of all global and local product specifications centrally as well as the ability to modify manufacturing procedures according to new processes and product needs. cy and Flexibility eve business goals and increase profitability. Cost containment rrent market. In order to realize these objectives, companies l-time planning and scheduling, and finally synchronize all will help dairy companies reduce throughput times, react in and rework as well as the risk of product recalls. chronization and control of your entire production operations. TIC IT Framework, and proven MES functions, the SIMATIC IT tandard for MES. 7

8 SIMATIC IT SIMATIC IT SIMATIC IT A paradigm shift Due to its modular, object oriented, open and scalable architecture, SIMATIC IT enables customers to standardize processes at a high level while maintaining previously unachievable flexibility at the operational level. This unique approach makes it possible to: Roll-out solutions smoothly and gradually Implement future changes and enhancements easily Reuse previously defined logic to reduce project duration Secure investments in local facilities SIMATIC IT Cross-Industry Libraries Pre-configured with reusable functions, the SIMATIC IT Cross-Industry Libraries are delivered free of charge to our Certified Partners. They, in turn, add their unique industry expertise and deliver Dairy Solutions fully tailored to your needs. SIMATIC IT ISA 95 compliance ISA 95 is increasingly being accepted as the world standard for Manufacturing Execution Systems that customers can rely on to secure their investments in MES. SIMATIC IT not only covers ISA 95 functions but actually uses ISA 95 as a blueprint for its product architecture. As an active Member of the ISA 95 Committee, Siemens continues to contribute to the further development of the standard. SIMATIC IT & Totally Integrated Automation SIMATIC IT is an integral part of Totally Integrated Automation (TIA), the Siemens comprehensive solution platform that satisfies the whole range of automation requirements. SIMATIC IT benefits from this integration with the rest of the Siemens product lines since they supply a wide range of pre-configured objects, ready to be used without any other engineering effort. TIA guarantees quick project implementation, native integration and compatibility across different generations of products. 8

9 PRODUCTS SIMATIC IT Production Suite The SIMATIC IT Production Suite is composed of the SIMATIC IT Framework and SIMATIC IT Components. The SIMATIC IT Components include basic and guaranteed MES functions for order management, material management, messaging, personnel management and report management. The SIMATIC IT Framework provides a graphical environment to model production process, equipment and facilities intuitively and without the necessity of programming skills. The graphical production model offers a clear understanding of the plant s behavior and visualizes the entire production status. SIMATIC IT Historian A collection of software modules, to collect, store and quickly retrieve process and production information for Quality Assurance, Reporting, Certifications, Statistical Analysis, Performance Monitoring, etc. SIMATIC IT Unilab Enterprise Laboratory Information Management System (LIMS) handling all quality data in the laboratory (samples, analyses, instruments, etc.) conforms to all industry and laboratory standards (GLP, GAMP, ISO, 21CFR11, etc.). SIMATIC IT Production Suite SIMATIC IT Components: Material Manager Order Manager Personnel Manager Messaging Manager Report Manager (optional) ERP SIMATIC (control level) SIMATIC IT Framework SIMATIC IT Interspec SIMATIC IT Historian SIMATIC IT Report Manager Optional component of SIMATIC IT offering advanced, fully integrated, and user-friendly reporting functionality. The Report Manager meets regulatory requirements for ad hoc reporting (e.g. EC 178/2002, US Bio-Terrorism Act) and offers valuable operational insights. SIMATIC IT Unilab 3rd Party Components 3rd Party Devices SIMATIC IT Interspec Enterprise Specification Management System handling product specifications for raw materials, semi-finished and finished products as well as packaging materials. This incorporates companywide specifications as well as individual specifications for a single plant, supplier or customer. 9

10 SIMATIC IT Framework, Components and Libraries facilitate and synchronize operations all along the product lifecycle including product specification, planning and scheduling, production, laboratory management, as well as tracking, tracing and production analysis. From Global to Local Design Management of product diversity and fast market response SIMATIC IT Interspec helps manage, formulate and distribute both company-wide as well as plant or customer specific product specifications for raw materials, semifinished and finished products as well as packaging materials. Download Orders Added Value Leverage the potential of your ERP SIMATIC IT allows bi-directional data exchange with ERP systems, thus leveraging ERP potential. This seamless integration with ERP avoids bottlenecks, reduces nonproductive work as well as the risk of data inconsistencies. Map Local Resources Enforce standard procedures but use local resources SIMATIC IT enables the central definition of processes and procedures yet can use local plant resources and constraints. This enables consistent and homogeneous production procedures throughout various plants and increases the return on existing investments. 10

11 SIMATIC IT along the Product Lifecycle Test Seamless integration of QA/QC processes SIMATIC IT includes a market leading Laboratory Information Management System to manage laboratory workflow and samples. Online and at-line tests can be executed and documented automatically, providing feedback to the production process and a proof of quality for regulatory compliance. Analysis and Optimization Continuous improvement of performance and quality SIMATIC IT enables the definition and calculation of Key Performance Indicators (KPI -s) in order to measure business performance. All production related information is available for better decision support. This information will help to continuously improve performance and increase quality. Optimize Analyze Global Design Local Design Map Resources Test Track Download Orders Plan and Schedule Produce Plan & Schedule Optimize resource utilization, throughput and production flexibility SIMATIC IT offers the full degree of planning and scheduling accuracy necessary in the dairy industry. Using real time data, SIMATIC IT optimizes resource utilization and throughput while increasing the flexibility to make adjustments during production, e.g. due to changing constraints. Produce Coordination and synchronization of all operations SIMATIC IT coordinates all activities needed to drive and optimize production in real time and to increase production efficiency and quality. Onspec production, earliest possible recognition of non-compliance and if necessary automatic and appropriate action will lead to considerable cost savings. Track & Trace Regulatory compliance and liability protection SIMATIC IT enables the tracking and tracing of every material movement and offers full forward and backward genealogy. It enables dairy companies to react in a timely and appropriate manner to requests from regulatory bodies as well as to limiting liabilities and cost in case a recall should become necessary. 11

12 More flexible, efficient and faster: SIMATIC IT, the future of production More information: SIMATIC IT continues the success story of TIA (Totally Integrated Automation). SIMATIC IT enables total integration, full support of existing industrial standards and a componentbased approach. SIMATIC IT Framework synchronizes, analyzes, coordinates and optimizes your production. Heterogeneous applications can be integrated to better manage the complexity of production. SIMATIC IT Components provide excellent manufacturing functionality, such as Laboratory Management, Production Performance Management, and Product Specification Management. These components can be coordinated by SIMATIC IT Framework or used as independent applications. The tried and tested interaction of the different components means efficiency and quality, and protects your investments. Competence Center Food&Beverage Nürnberg: Tel: CCFUB.ad@siemens.com Competence Center Food&Beverage US: Tel: Subject to change without prior notice - 03/04 Order No. E80001-A630-P400 -V Dispostelle AS.SH.XX ME WS Printed in Germany SIEMENS AG 2004 SIMATIC is a registered trademark of Siemens AG If trademarks, brand names, technical solutions and similar are not specifically mentioned, this does not mean that they have no protection. Siemens AG Automation and Drives The information provided in this brochure contains merely general descriptions or characteristics of performance which in case of actual use do not always apply as described or which may change as a result of further development of the products. An obligation to provide the respective characteristics shall only exist if expressly agreed in the terms of contract.