Optimum production

Feature Article | May 3, 2004 by admin

SAP for Industrial Machinery & Components (SAP for IM&C) is based on the application and integration platform SAP NetWeaver and supports all key operational activities required for the development, sale, manufacture and maintenance of machinery, equipment and components. As well as the business processes in the development, sales, production and logistic sectors, SAP for IM&C also supports finance, accounting and personnel management. The solution offers an integrated platform that also provides solutions for tasks within heterogeneous IT landscapes. SAP for IM&C is based on open standards and can be flexibly adapted and expanded.

Outsourcing and cooperation

Business Map IM&C

Business Map IM&C

The SAP solution also takes into account the trend for outsourcing functions other than the actual core skills of the company. Outsourcing results in multi-layered supplier relationships based on collaborative business processes. These relationships link various business partners including suppliers, subcontractors, engineering partners, component manufacturers, original equipment manufacturers (OEM), distributors and, last but not least, end customers.
The SAP for Industrial Machinery & Components solution portfolio is based on the following SAP solutions:

  • SAP NetWeaver
  • mySAP Financials
  • mySAP Human Resources
  • mySAP ERP
  • mySAP Customer Relationship Management
  • mySAP Product Lifecycle Management
  • mySAP Supplier Relationship Management
  • mySAP Supply Chain Management
IM&C Ecosystem

IM&C Ecosystem

As a component of SAP for IM&C, mySAP Product Lifecycle Management (mySAP PLM) supports the entire lifecycle of a product from the initial idea to its market launch. In the industry, this process is referred to as ‘New Product Development and Introduction’ (NPDI). The solution seamlessly integrates the various parts of the NPDI process, incorporating the marketing, finance, research and development, production and sales sectors. SAP for IM&C firstly facilitates the development of a product strategy, supports the development process, helps in choosing suppliers and coordinates the product launch. In the NDPI process, the divisions between technical and business management departments which previously hindered product development are eliminated. With mySAP PLM, the NPDI process is easy to manage thanks to web-based applications (like cFolders and cProjects) and portal-based access.

Making changes transparent

Changes to customer requirements are par for the course in the day-to-day operations of the manufacturing and equipment industry. This is where the IM&C solution really comes into its own. When new requirements have to be taken into account while the job is underway, change management becomes a key issue. This prompts questions such as: How many production jobs have already been set up? Which of these are affected by the changes? Which jobs can be changed automatically and which have to be changed manually? SAP for IM&C tracks the technical changes during the development process and also shows the effects of these changes on the sale and production stages. Project management is closely linked to the logistics and controlling departments. The product costs can be tracked throughout the entire lifecycle.

Manufacturing Industries

Manufacturing Industries

The market conditions in the manufacturing and equipment industry require highly efficient supply chains and high-performance production. The Make to Order manufacturing method is used for order-driven production. Its strategic goal, as manufacturing depth decreases, is to plan the entire supply chain beginning from the customer demand stage in order to maximize the efficiency of the production process. An important stage in the Make to Order process is the preplanning of assemblies that are to be used later in the assembly process for individual customer orders. Medium-term cross-company and cross-site planning between partners in the supply chain allows suppliers and manufacturers to exchange data on stock levels and planned quantities. The “Collaborative Forecast”, a demand forecast derived from the supplier relationships, is obtained through communication between all partners in the supply chain.

Preventing bottlenecks

SAP Inventory Collaboration Hub (SAP ICH) ensures further transparency. This solution evaluates stock outside the system boundaries and uses this information to calculate demand. This prevents bottlenecks, missing parts and excessive stock levels. An “Alert Generator” allows the partners in the supply chain to arrange alert messages themselves according to simple rules and to define threshold values for triggering these alerts. ICH can also be used to exchange procurement documents (such as orders, supplier requisitions, confirmations) and status information about these with suppliers.

The Engineer to Order process (ETO) supported by customized construction and project production is ideal for manufacturing special machines. It ensures integrated management of the customer’s construction, procurement, manufacture, dispatch, assembly and commissioning stages. The deadline and planning functions of SAP Advanced Planner and Optimizer (SAP APO) support integrated project and production planning and improve transparency and coordination. Planning becomes more efficient. Alerts provide advance warning of bottlenecks. A whole range of options are available to simulate various alternatives for removing bottlenecks. This improves delivery performance and capacity utilization and reduces throughput times and stock levels.
A manufacturing portal allows the production manager access to all the data relevant to him. It analyzes the whole manufacturing process and provides an overview of planning, from the production through to the delivery stage. It obtains data and transfers it from numerous heterogeneous systems, including both third-party and SAP solutions.

Maintenance provides added value

SAP America

SAP America

The proportion of added value generated by after-market and sales & service business is increasing in the manufacturing and equipment industry. When the customer’s machinery and equipment are operational, supply of spare parts, maintenance and consultancy services generate further business. Manufacturers are therefore transforming themselves from suppliers into solution providers. Many machine producers are now making more money from the services they offer their customers than from the actual sale of products. One example of this is elevator manufacturers who, having supplied one machine, then provide maintenance for that machine for many decades.
The quality of the services offered to customers is therefore crucial. SAP for IM&C supports all functions in the after-market sector from service parts management to field service. This begins with efficient planning and distribution of spare parts. The prospective demand for spare parts is calculated on the basis of all the customer’s installed equipment and reserve stocks of these parts are held. Because the whole supply network is included, not just individual warehouses, the spare parts stored can be kept to a minimum.
SAP Internet Sales, which is linked to a spare parts catalog via the Open Catalogue Interface (OCI), allows sale of spare parts over the Internet with integration of special 2D/3D spare parts drawings. Customer-specific prices can be calculated using the SAP Internet Pricing & Configurator (SAP IPC). A solution database provides information for customized processing of requests for spare parts or maintenance services. The stored information can be accessed directly on the Internet by both customers and service engineers. E-learning components also offer many different means for passing on knowledge and providing product training.

New service models

The SAP NetWeaver platform enables a new method of business process integration in which sensors in technical equipment record performance statistics and transmit these by telemetry to a service center. Remote diagnosis of the analyzed values for a turbine or a machine, for instance, thus allow maintenance processes to be initiated in good time. SAP has already announced its partnership with SmartSignal. This partnership has produced a solution that monitors technical equipment and reports any potential faults long before a malfunction can do any damage to the machinery. With SAP’s and SmartSignal’s solution, an encoded, encapsulated signal is transferred as an XML message from SmartSignal to the service management module via the SAP NetWeaver platform and a service report is automatically generated.
Remote measuring and analysis techniques also allow the creation of innovative business models when customers start requesting performance-related billing instead of wanting to acquire a particular machine. The price can be determined according to, for example, frequency of use, when a turbine customer pays according to the actual hours of service provided.

Dr. Juergen Weiner

Dr. Juergen Weiner

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