CREATING REAL VALUE FROM MANUFACTURING DATA ANALYTICS CHRISTOPH HARTMANN, SAS BUSINESS ADVISOR MANUFACTURING

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1 CREATING REAL VALUE FROM MANUFACTURING DATA ANALYTICS CHRISTOPH HARTMANN, SAS BUSINESS ADVISOR MANUFACTURING Copyr i g ht SAS Ins titut e Inc. All rights res er v ed.

2 MANUFACTURING 4.0 VALUE IS CREATED BY MAKING SENSE OF DATA Smart Home Smart Car Smart City Smart Factory Connected Devices Data Connected lock Bluetooth dongle reading vehicle data Sensors embedded in road surface Welding gun with integrated wifi Knowledge Detect when I leave Predict unsafe conditions & likely collision Detect weather, predict traffic, sense 911 vehicles Offer capacity to unfinished work parts Action Lock the door, set the alarm and adjust the HVAC Slow the vehicle, alert the driver Adjust speed limits and shift lane directions to optimize traffic flow Optimize capacity in flexible production Copyr i g ht 2012, SAS Ins titut e Inc. All rights res er ve d.

3 To make the Internet of Things useful, we need an Analytics of Things. This will mean new data management and integration approaches, and new ways to analyze streaming data continuously. Thomas H. Davenport President's Distinguished Professor, Babson College Co-founder and Director of Research, International Institute for Analytics Author of Competing on Analytics and Big Data at Work Copyright 2012, SAS Institute Inc. All rights reserved.

4 NESTLE CASE STUDY Company Confidential - For Internal Use Only Copyright 2013, SAS Institute Inc. All rights reserved.

5 C o p y r i g h t , S A S In s t i t u t e In c. A l l r i g h t s r e s e r ve d. NESTLE DIRECT STORE DELIVERY FORECASTING THE CHALLENGE 115,000 Sell To Locations 260 Warehouses 7 Plants & 78 Lines 950 SKUs Short Shelf Life -29C Frozen Freight & Storage ($$$) A Sales Team Who Hates Service Issues Forecast Accuracy Level = SKU / Warehouse / Week 45,000 Active Forecasts 10 Demand Planners Need a demand planning system that is easy to use, has a wide range of forecasting models and is able to handle extraneous variables like promotions/price or social media information on new products

6 C o p y r i g h t , S A S In s t i t u t e In c. A l l r i g h t s r e s e r ve d. THE 2 MISSIONS FOR NESTLE IMPROVE STATISTICS & PROCESS Find The Best Stats Engine Multiple Math Model Types Available Robust Causal Factor Functionality Time Series at Lowest Level Forecast At All Intersections (Customer, Product, Geography) Fast solve performance for large data sets Robust Roll Up Capability Enhance S&OP & Key events Engage The Right People, Not Just Sales Schedule Cycles That Build To Consensus Nurture Healthy Brutal Honesty Pricing & Promotions - Simple Market Penetration / Shelf Space / Social Media Other Causals (Weather, Competition)

7 C o p y r i g h t , S A S In s t i t u t e In c. A l l r i g h t s r e s e r ve d. THE KEY METRICS & RESULTS NESTLE Target Key Metrics : % Accuracy (at many levels) / Bias / Forecast Value Add Results: Significantly improved forecast accuracy as compared with their existing system Exceeded 7% MAPE improvement Lowered inventory safety stock by more than 12% Significantly reduced Excel spreadsheets Able to measure the impact of promotions and price change; providing improved store-level forecasting during promotional cycles Ability to measure forecast value add by promo and planning role

8 LENOVO CASE STUDY Company Confidential - For Internal Use Only Copyright 2013, SAS Institute Inc. All rights reserved.

9 LENOVO Warranty process was slow Integrated data from Amazon, Facebook, Best Buy, Twitter, Lenovo sites, & dozens more Automated analytic early warning process Company Confidential - For Internal Use Only Copyright 2013, SAS Institute Inc. All rights reserved.

10 LENOVO X1 Carbon Launch Not performing as designed (usability) e.g., Keyboard Not performing as engineered (quality) e.g., Trackpad Driver & software updates e.g., Windows 8 Updates Company Confidential - For Internal Use Only Copyright 2013, SAS Institute Inc. All rights reserved.

11 LENOVO NA + IN English Multi-Language Customer Support eservice Social Media Voice-to-Text Call Center Chat Call Center Chat Call Center Smart Apps Lenovo Central Lenovo Central Forums Forums Forums Facebook Google Facebook Twitter Weibo Google Facebook Twitter NewEgg BestBuy Product Reviews Amazon Amazon Professional Sites & Bloggers ecommerce: NewEgg, BestBuy, Amazon POC Pilot Production 500 GB 1 TB 2 TB 5 TB +100 TB Company Confidential - For Internal Use Only Copyright 2013, SAS Institute Inc. All rights reserved.

12 LENOVO Benefits 50-66% reduction in issue detection time 10-15% reduction in warranty cost from out of norm defects 30-50% reduction in calls for general information Future Direction Identifying features that customers desire Company Confidential - For Internal Use Only Copyright 2013, SAS Institute Inc. All rights reserved.

13 CASE STUDY: LENOVO LENOVO- PATH TO VALUE Copyr i g ht 2012, SAS Ins titut e Inc. All rights res er ve d.

14 Copyr i g ht 2012, SAS Ins titut e Inc. All rights res er ve d. INNOVATION MANUFACTURING 4.0

15 SUMMARY Opportunity for differentiation with power of analytics is out there ACT! Learn more about Use Cases across the Supply Chain from SAS and partners Big Data Analytics-Platforms are the future of manufacturing Copyr i g ht 2015, SAS Ins titut e Inc. All rights res er ve d.

16 QUESTIONS & ANSWERS Copyr i g ht 2012, SAS Ins titut e Inc. All rights res er ve d.