Manufacturing Find Out How SAP Business Suite powered by SAP HANA Delivers Business Value in Real Time

Transcription

1 Manufacturing Find Out How SAP Business Suite powered by SAP HANA Delivers Business Value in Real Time

2 Disclaimer This document is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has 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's strategy and possible future developments, products, and/or platforms directions and functionality are all subject to change and may be changed by SAP 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. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP's willful misconduct or gross negligence. 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.

3 SAP Business Suite powered by SAP HANA Manufacturing Successful manufacturers capture the opportunities of a global economy while effectively managing their complex, distributed, and volatile business network. Changing customer demand, production standstills, and disrupted supply requires continuous adjustments of production and procurement plans. Thriving in this environment begins with a new attitude toward change. No longer considered an inconvenient disturbance of an otherwise exceptional plan, change becomes the agent that drives continuous adjustments of plans to reflect reality. Reality changes in real time. Companies can reflect the reality of planning and operations at this speed of change to deliver responsive manufacturing using SAP Business Suite powered by SAP HANA to optimize cost and performance objectives. SAP solutions also support manufacturers in running their perfect plant with integrated, comprehensive processes that deliver deep manufacturing planning, execution, and quality management capabilities. SAP Business Suite powered by SAP HANA leads the way to new, real-time business practices in key manufacturing areas: Production Planning... 4 Material Requirements Planning... 4 Efficient Manufacturing Operations Global Plant Performance Management... 10

4 Production Planning Material Requirements Planning Business Practices Today Material requirements planning (MRP) forecasts procurement or production of materials to satisfy internal requisitions and external orders from customers or distribution channels. Periodic MRP runs analyze demand based on sales orders, forecasts, stock transfers, and dependent requirements. This analysis matches demand to inventory levels, planned supply from production orders, purchase requisitions, and purchase orders. MRP runs plan production orders and purchase requisitions to fill the gap between supply and demand. This process iterates because planned orders create new demand for lower-level components or ingredients. New stocktransfer requisitions create new demand for the supplying plants. MRP runs usually occur once a day because they often run for several hours. Ambition Fast MRP 5 to 10 times faster than on a classic database (based on internal testing of a typical SAP customer data set) Sales orders and the supply chain continuously change and ignore the runtime constraints of material requirements planning. MRP plans need to reflect changes in sales and operations because they can become outdated almost immediately. Our customers can realize considerable advantages by running MRP more frequently to reflect daily changes to supply and demand. Simulation and analysis shows that tracking MRP supply-and-demand forecasts and actuals more closely can reduce lead time and can improve order-fill rates and asset usage, while reducing inventory levels. In a first phase, SAP Business Suite powered by SAP HANA can run MRP functions several times a day. Ultimately, periodic MRP functions can react permanently on supply-and-demand signals and update production and procurement plans in real time. The next level of business practices may extend MRP from a single plant to a network of plants and eventually reach beyond the walls of the enterprise to connect customers and suppliers. This scenario suggests that a cloudbased, collaborative MRP can move from local to global optimization. 4

5 Challenges Planners face the following challenges when running MRP: The consequences of supply-and-demand changes are invisible until the next MRP run. Only one MRP run can be performed at a time, so the duration of an MRP run can constrain the frequency of MRP runs. Tuning MRP for speed is difficult in many databases without inmemory capability. Many techniques already improve performance, such as planning in the planning horizon only (NETPL), parallel processing, and using aggregated dependent requirements. A real break-through needs a change in technology. Currently, MRP can run only for a single plant. In multiplant scenarios, the planning sequence must be defined manually. This process still does not guarantee coverage of all stock transfer requirements after all planning runs have finished. Simple MRP Cross- Plant MRP Business Innovation with SAP HANA SAP HANA software enables business process innovations that solve the major MRP challenges with fast, simple, and cross-plant MRP. Innovation in Detail with SAP HANA Fast MRP: A large chunk of MRP runtime goes into reading many different material receipts and requirements. SAP HANA can collect this information with unprecedented speed. Net requirements calculation, lot sizing, sourcing, scheduling, and bill-of-material (BoM) explosion now run directly in SAP HANA and benefit from the optimized data access. Simple MRP: Many performance measures required by classic MRP become obsolete when running MRP functions in SAP HANA. Planning within the planning horizon only and specifying application servers for parallel processing is no longer necessary. Cross-plant MRP: MRP functions enabled by SAP HANA use special procurement keys to determine the planning sequence for multiple plants. The MRP run automatically plans for supplying plants after receiving plants, so that stock transfer requirements are covered after the MRP run. 5

6 Benefits The main advantage of running MRP processes on SAP HANA involves more-frequent planning runs that reflect daily changes in supply and demand: More-current supply-and-demand information promotes better decision making and results in timely delivery and happier customers. Faster reaction to demand changes reduces the risk of stock-outs, reducing safety stocks and required working capital. Supply-and-demand matching runs more efficiently, providing more lead time to identify and fix issues earlier and faster. Customers also benefit from the new planning scopes supported by MRP functions enabled by SAP HANA: Selective planning: Selected material in a selected location (such as a distribution center) and its supplying locations (such as a production plant) Multilevel planning: Selected material in a selected location and its supplying locations along with components in one or more production locations, at multiple levels across the complete supply chain Planning for planners: All the materials for which one planner is responsible New Planning Apps SAP Smart Business Cockpit for MRP SAP Smart Business for MRP consists of a set of apps providing new options for monitoring key performance indicators (KPIs) and alerts for solving planning issues. The apps, available on desktop and tablet computers, provide various ways to identify the most urgent and important issues based on time to action, order values, or priorities. In addition, the apps offer pre-evaluated solution proposals with simulation capabilities to help solve issues quickly. See figures 1 through 4 for details of MRP cockpit displays provided by these apps. 6

7 Figure 1: Preview of MRP Cockpit Showing Performance Indicators and Alerts Figure 2: MRP Cockpit Display of List-of-Material Shortages 7

8 Figure 3: MRP Cockpit Display of Detailed Supply-and-Demand Information for Selected Material Figure 4: MRP Cockpit Display of Pre-Evaluated Solutions for Critical Situations 8

9 Road Map and Outlook Additional MRP features available in SAP HANA: The SAP ERP application, with a 20-year history of continuous improvements, supports a large number of business processes for a wide range of industries. The MRP functions enabled by SAP HANA, already faster, cover many but not all these business processes. Anticipated MRP functions in SAP HANA will enable planning of additional material types in SAP HANA. Performance optimization: Additional functions such as product configuration will run directly in SAP HANA in a nondisruptive way. Insight and decision support for planners: In the next phases, MRP will contain what-if analysis and decision-support elements. Next phases may also include support for subcontracting or make-or-buy decisions. These enhancements will show planners clearer pictures for better decision making. Additional apps and features in SAP Smart Business for MRP: New features will continuously enlarge and enrich the set of apps to cover additional aspects such as a dedicated analysis of production orders and production requirements. Product Landscape Requirements SAP ERP 6.0 with SAP enhancement package 7 SPS 05 or above (SAP Smart Business for MRP requires SP 3.) SAP Fiori for ERP 1.0 SPS 03 SAP NetWeaver 7.40 How to Get Started For information on how to get started, see the business function documentation in Service Marketplace and SAP help portal (log-in required). 9

10 Efficient Manufacturing Operations Global Plant Performance Management Business Practices Today Most manufacturers manually calculate plant performance indicators and capture weekly or monthly in data warehouses and legacy systems for retrospective performance analysis. SAP ERP and SAP HANA: Plant system One solution that integrates the corporate system with the shop-floor system This means that deviations from planned performance cannot be detected early enough to prevent unplanned downtime. Side effects include waste and product quality, order fill rates, and ultimately, return on the production assets. Ambition Plants need an integrated system that connects the corporate top-floor system with the shop-floor system to deliver responsive manufacturing for achieving and sustaining optimal performance. Real-time visibility into plant operations and continuous performance analysis across assets and plants are strategic to reducing manufacturing cost. This visibility also helps increase the return on assets while optimizing order fill rates, product quality, and resource usage. Intuitive user interfaces on stationary and mobile devices and machine-tomachine connectivity increase acceptance on the shop floor, improve data quality, and lay the foundation for effective performance analysis and corrective action. Challenges Identifying and resolving performance bottlenecks on the shop floor is challenging, especially in a manufacturing environment without a comprehensive system to understand and analyze losses in operational performance: No real-time performance management platform can run without the ability to continuously gather, compare, analyze, and visualize production data per plant and across multiple production sites. Decentralized production data capturing and batch-driven data consolidation disguise machine maintenance issues and production bottlenecks. Manual capturing of root causes for downtime, efficiency loss, and poor quality is tedious, error prone, and frustrating. Postmortems are interesting, but today manufacturers focus on anticipating and preventing incidents. 10

11 Unplanned downtime, suboptimal performance, and poor product quality contribute to decreased asset usage. Poor product yields and quality result in increased costs of goods sold and, ultimately, late orders and reduced responsiveness to customers. Production event data stored in disconnected systems on machine and plant levels make it difficult to consolidate data for near-time root-cause analysis. Business Innovation with SAP HANA The SAP Overall Equipment Effectiveness Management (SAP OEE Management) application monitors the effectiveness of manufacturing processes by capturing information on manufacturing productivity loss. The application categorizes this information into availability, performance, and quality impacts, and then distills it into a system of KPIs and underlying performance data. This systemization builds the foundation to measure manufacturing performance, identify optimization potential, collaborate on corrective action, and implement resolutions in real time. Key features of SAP OEE Management include: Real-time combination of quantitative performance metrics with target values, qualitative context, and potential reasons for performance issues Combination of plant performance with business context for understanding broader implications of substandard plant performance Facilitation of corrective action on the plant level and across plants for the entire enterprise Enablement of performance improvements beyond the plant level, including supply chain, sustainability, financials, and customer relationship Storage for a broad set of granular manufacturing data for detailed analysis, complex production modeling, and predictive analytics including regression and heuristics This data becomes the foundation for plant operations that takes corrective action before actual quality of performance issues occur. Check figure 5 for a sample report from SAP HANA of analysis of manufacturing KPIs using drill-down and filtering functions. 11

12 Figure 5: Report from SAP HANA Analyzing Manufacturing KPIs with Multilevel Drill- Down and Filtering Innovation in Detail with SAP HANA State-of-the-art reporting: Intuitive reports (built with SAP UI5) support analysis of operational performance. Global plant performance comparison: SAP HANA provides the ability to compare performance across the global manufacturing organization (multiple regions, countries, and plants). Data from multiple shop-floor systems can be analyzed in a single report. Real-time manufacturing analytics: SAP HANA enables the capacity to locate losses in performance, identify root causes by drilling down to the line item data, and fix the problem. Integrated solution: SAP OEE Management provides integration of the manufacturing shop floor, the corporate SAP ERP application, and SAP HANA. This integration establishes a single source for all production planning, execution, and analysis processes. Automation support: SAP HANA enables immediate analysis of highfrequency and large-volume manufacturing data received from automated systems on the shop floor. Bidirectional top-floor to shop-floor integration: A download of a production order or process order to the SAP Manufacturing Integration and Intelligence (SAP MII) application collects information for confirmations and propagation of confirmations back to SAP ERP. See figure 6 for a comprehensive solution approach from SAP. 12

13 Figure 6: Comprehensive Solution Approach Benefits Universally accepted metrics: Overall equipment effectiveness is an industry-wide standard to measure and benchmark plant performance. This KPI system provides a holistic picture of the manufacturing operations. High-speed manufacturing analytics: Large volumes of manufacturing data that used to take days to analyze can now be understood with a few clicks. Extensibility: Customers can easily extend SAP OEE Management with their specific reports that just plug into the standard reports. Personalization: Individual users can personalize reports in SAP OEE Management using the variant feature. Users can also analyze reports with other reporting tools like SAP BusinessObjects Analysis, edition for Microsoft Office. Enterprise-wide data analysis: In combination with SAP ERP and the shop floor, SAP OEE Management supports distributed and detailed plant-level analysis, as well as central, consolidated global analysis. Shop-floor acceptance: Shop-floor operators now have a highly intuitive user experience for data entry and real-time analysis of SAP OEE Management, which fosters acceptance and bottom-up process optimization. 13

14 Lean and intuitive solution: SAP OEE Management, a lightweight solution, can function in discrete and process manufacturing industries. Paperless shop floor: Data collection on the shop floor is completely automated with integrated confirmation from SAP ERP and replication from SAP HANA, which helps eliminate paper from the shop floor. Full cycle of continuous improvement: SAP OEE Management orchestrates manufacturing execution and manufacturing performance analysis. See details of the software s user interface in figure 7. Paperless Shop Floor No more use of paper to track operations (based on an SAP customer proof of concept for an implementation project) Figure 7: Operator-Grade User Interface of SAP OEE Management with SAP HANA Road Map and Outlook The intended road map of SAP OEE Management working with SAP HANA includes: Translating operational performance into financial performance by providing cost-based reports in SAP HANA Integration with the quality management component in SAP ERP: losses incurred by rejections in the quality department will be integrated into SAP OEE Management Integration with the plant maintenance module: real-time notifications will be integrated with SAP OEE Management for analysis in SAP HANA Integration with the enterprise tag catalog and self-service composition environment in SAP MII 14

15 Product Landscape Requirements On-premise application based on SAP NetWeaver 7.30 or higher SAP ERP 6.0 or above for a configuration for SAP OEE Management SAP Fiori for SAP ERP 1.0 or above SAP HANA 1.0 or above for enterprise data warehouse for SAP OEE Management Analytics foundation 1.0 or above for SAP HANA SAP MII 14.0 for plant connectivity and integration with SAP ERP Central Component (SAP ERP) SAP Plant Connectivity 2.3 for automated data gathering Figure 8: Product Landscape in SAP OEE Management with SAP HANA Watch the speed demo. Find out more in the RKT Learning Map. * Source: SAP internal lab tests as of Sept All performance KPIs are preliminary. SAP internal lab measurements and productive customer performance can deviate. 15

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