Reimagine Business for the Digital Economy...2016/07/27 · standard value, raw material etc. and post it back to ERP system. - Capture the root causes for downtime, efficiency loss

Reimagine Business for the Digital EconomySAP Forum Hong Kong

Richard Koay, SAPDigital Business ServicesJuly 26, 2016

Smart Manufacturing: Top-floor to Shop-floor

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Internal

Market Trends are Driving Changes in Industries

Margin Pressureü Need to decrease manufacturing costsü Intense competitionü Focus on operating margins

Increased Volatilityü Material costsü Demandü Priceü Energy

Rising Customer Demandsü More innovative productsü Better qualityü Quick time to market

Mounting Complexitiesü Standardization across plantsü More regulationsü Outdated, non-integrated system landscapesü Data redundancy and system latency


Challenges faced by Top Executives in Manufacturing

1. How can I quickly INTEGRATE THE SHOP FLOOR to the top floor to better monitor thebottom line?

2. How can I get REAL TIME VISIBILITY into production operations to ensure low total cost ofmanufacturing?

3. How can I rapidly ADJUST PRODUCTION EXECUTION to demand changes to optimizeinventory and WIP?

4. How can I MONITOR AND CONTROL asset use to minimize operating costs?

5. How do I drive business transformation activities to the PLANT FLOOR?


Smart Manufacturing

Smart manufacturing means smarterproducts, smarter factories and smarter

production processes


Smart Manufacturing: SAP’s Connected Manufacturing


SMART FACTORY WITH INNOVATION CONTROL CENTERFounded in 1995, BYD Company Ltd. (BYD) provides services for the IT, automobile and new energy industries.The company has operations across 12 major industrial parks in China and has branches in North America,Europe and Asia. BYD like other manufacturers, face stiff international competition today and must innovatecontinually to keep pace. In order to achieve a leaner production cycle and full visualization of its manufacturingprocesses, BYD established an innovation control center with the help from SAP MaxAttention services and theSAP Active Global Support organization.

*Graphics adapted directly from BYD website


Smart Factory with Innovation Control CenterBusiness Transformation

BUSINESS CHALLENGES• IT systems were not linked, which led to multiple data sources, and real-time data sharing was not possible.• BYD’s clients are world leading multinational corporations that adhere to the most rigorous manufacturing standards in

their respective industries. They expect to be able to monitor production at BYD through real-time feedback on yield,yield fluctuations, and process stability. BYD’s “black box” manufacturing model could not meet these requirements.

TRANSFORMATION• SAP Manufacturing Execution improved business processes by linking BYD’s business units and standardizing process

management between workshops, so as to reduce errors and the need for rework.• Enabled transparent management for the entire production process – Manufacturing processes, materials, and test

results are all traceable now, based on shared production data, which allows for total transparency across theproduction process.

• Eliminated manual errors by introducing automation. Handheld devices have made the production process keyless andpaperless.

BENEFITS• The production cycle was improved as a result of close integration between the warehouse and workshop. This enabled

the warehouse to make shipments to end customers, thus reducing transportation costs and time.• With the software synchronizing WIP data and warehouse data, inventory has been reduced and inventory turn over has

improved.• Production data - such as production capacity, yield and inventory – was synchronized with BYD’s major clients in real

time for complete transparency of BYD’s manufacturing processes, which boosted customer satisfaction.

COMPANYn Revenue: 80+ Billion RMBn Employees: 196,000+

INDUSTRYAutomotive and High Tech

PRODUCTS & SERVICESn Batteries, Handset components &

assembly, Traditional, solar-power,and electric vehicles, energystorage & power plants and etc

Adherencecloser to the intendedprocess flow

Transparentmanagement for the entireproduction process

Leanerproduction cycle thanks tothe innovation control center

Real-timevisibility of production datafor clients


Visualize Shop Floor ExecutionControl center to monitor and control the mixing execution

- Using SAP ME to support the mixingproduction for slurryü Master Receipt/Dynamic Routing for different

types of mixing (pre-mix, normal mixing,recycling) to manage the production process

ü Pulverized solid ratio is managed using dynamicrouting to deal with same powder material butdifferent pulverized solid portion

- Visualized Control Center to manage themixing production executionü Line leader can control the execution by clicking

on the control center

ü Real time alerts are triggered from the machineto the MES

ü Critical machine parameters and productparameters are monitored in real-time

- Using SAP ME to support the mixingproduction for slurryü Master Receipt/Dynamic Routing for different

types of mixing (pre-mix, normal mixing,recycling) to manage the production process

ü Pulverized solid ratio is managed using dynamicrouting to deal with same powder material butdifferent pulverized solid portion

- Visualized Control Center to manage themixing production executionü Line leader can control the execution by clicking

on the control center

ü Real time alerts are triggered from the machineto the MES

ü Critical machine parameters and productparameters are monitored in real-time


Mobilize Shop Floor ExecutionShop floor workers uses mobile device with scanner to execute production

- Using Mobile Device to perform shopfloor executionü Mobile device is used to do material

disposal to the mixing tank, perform qualitycheck, execute process control etc.

- All shop floor reports and dashboardare accessible from anywhereü The shop floor reports can be accessed

from most browsers via mobile device fromanywhere without additional development

ü Real-time transparency is thereforepossible for the line supervisors

- Using Mobile Device to perform shopfloor executionü Mobile device is used to do material

disposal to the mixing tank, perform qualitycheck, execute process control etc.

- All shop floor reports and dashboardare accessible from anywhereü The shop floor reports can be accessed

from most browsers via mobile device fromanywhere without additional development

ü Real-time transparency is thereforepossible for the line supervisors


Control Production with Real-time AnalysisReal-time monitor and control SFCs to detect the quality issue as earlier as possible

- Real-time SPC to support the earlydetection of the quality issuesü Numerous parametric data is being

collected for individual SFCs, to minimizethe possibility of NC

ü Improve quality through automation of sixSigma processes and lower qualityexpenses

ü Correlation analysis of the controlparameter between different operationsteps to provide potential way to improveproduct quality

- Real-time SPC to support the earlydetection of the quality issuesü Numerous parametric data is being

collected for individual SFCs, to minimizethe possibility of NC

ü Improve quality through automation of sixSigma processes and lower qualityexpenses

ü Correlation analysis of the controlparameter between different operationsteps to provide potential way to improveproduct quality


SMART FactoryConnecting to the different shop floor machines to ME platform running on HANA

- Connecting to the heterogeneousshop floor machines to make thefactory ‘ SMART’ü The scalable technical architecture allows

the ME platform to integrated with manydifferent types of shop floor devices( simple RFID tags, to individual robots orcomplex shop floor systems)

ü Real Cyber Physic System is established inthe shop floor which enables the intercommunication among different machinesas well as the machine to the top floorsystems (MES/ERP/BPM)

ü Unified interface standards are applied tomajority of the shop floor vendors. It makesthe integration to new machines even moreeasier and quicker

- Connecting to the heterogeneousshop floor machines to make thefactory ‘ SMART’ü The scalable technical architecture allows

the ME platform to integrated with manydifferent types of shop floor devices( simple RFID tags, to individual robots orcomplex shop floor systems)

ü Real Cyber Physic System is established inthe shop floor which enables the intercommunication among different machinesas well as the machine to the top floorsystems (MES/ERP/BPM)

ü Unified interface standards are applied tomajority of the shop floor vendors. It makesthe integration to new machines even moreeasier and quicker


Connecting Shop FloorSystem architecture supports different layers of machine integration

Mixing/Assemble LineTesting Line Sensors Mobile Device

- Technical architecture to supportdifferent layers of the complex shopfloor topologyü Device layers needs real-time

communication.

ü EAP layer needs to have μs levelcommunication. The HMI systems storeslogic and can work on his own orcommunicate with ME. High Speed, lowlatency and zero turbulence is the key.

ü MES network then is the manufacturingnetwork which is locally positioned toensure the fast connection.

ü Based on different requirement, theintegration can be one way (data collectionin batch or real-time), bi-direction (datacollection and control).

- Technical architecture to supportdifferent layers of the complex shopfloor topologyü Device layers needs real-time

communication.

ü EAP layer needs to have μs levelcommunication. The HMI systems storeslogic and can work on his own orcommunicate with ME. High Speed, lowlatency and zero turbulence is the key.

ü MES network then is the manufacturingnetwork which is locally positioned toensure the fast connection.

ü Based on different requirement, theintegration can be one way (data collectionin batch or real-time), bi-direction (datacollection and control).

Intranet (s)

MES Network (ms)

EAP Network (μs)

Device Layer


Running Multiple Product Models at the Same LineLot size one production and enable the self-organized autonomous production

- Lot size one productionü Lot size one is one key of the industry 4.0 Each SFC

carries its own genealogy data.

ü Formation Testing receipt is centrally stored withMES, based on the result of previous SFC steps,dynamically determine which process the SFC shouldtake

- Multiple product model running on the samelineü Smart machines are now being able to process

different product models

ü With the definition in the routing scripts as well as thedata defined in the set point, ME interacts with theHMI system and tells the system which process itshall follow to process the particular SFC

ü Changeover time has been significantly reduced

- Lot size one productionü Lot size one is one key of the industry 4.0 Each SFC

carries its own genealogy data.

ü Formation Testing receipt is centrally stored withMES, based on the result of previous SFC steps,dynamically determine which process the SFC shouldtake

- Multiple product model running on the samelineü Smart machines are now being able to process

different product models

ü With the definition in the routing scripts as well as thedata defined in the set point, ME interacts with theHMI system and tells the system which process itshall follow to process the particular SFC

ü Changeover time has been significantly reduced


Transparent Shop Floor via Real-time Dashboard

- Real time dashboard hassignificantly improved the shop floortransparencyü With the real-time dashboards, the line

supervise can see the shop floor workassignment and efficiency anytime atanywhere

ü Significantly reduced the labor forcerunning in the shop floor to collect paperreports and consolidate the result withminimum 1-2 days’ delay

ü Avoid the disagreement on different reportsfrom different department since ME is nowthe single source of truth

ü Provide the possibility with multilevelinformation aggregation and disaggregationto support the business decision in realtime

- Real time dashboard hassignificantly improved the shop floortransparencyü With the real-time dashboards, the line

supervise can see the shop floor workassignment and efficiency anytime atanywhere

ü Significantly reduced the labor forcerunning in the shop floor to collect paperreports and consolidate the result withminimum 1-2 days’ delay

ü Avoid the disagreement on different reportsfrom different department since ME is nowthe single source of truth

ü Provide the possibility with multilevelinformation aggregation and disaggregationto support the business decision in realtime


OEE ManagementReal-time visibility of the performance of the critical resources

- Bi-Direction top-floor to shop floorintegration.

ü Ability to download production/processorder, collect production, rework, waste,standard value, raw material etc. and postit back to ERP system.

- Capture the root causes for downtime,efficiency loss and poor quality.

ü Facilitates analysis and corrective action atthe plant level and across plants

ü Performance and Quality on varioushierarchy levels along with businesscontext

- Bi-Direction top-floor to shop floorintegration.

ü Ability to download production/processorder, collect production, rework, waste,standard value, raw material etc. and postit back to ERP system.

- Capture the root causes for downtime,efficiency loss and poor quality.

ü Facilitates analysis and corrective action atthe plant level and across plants

ü Performance and Quality on varioushierarchy levels along with businesscontext


Smart Manufacturing: Points to Consider before Launching

ü Investment Cost Recovery– Will the infrastructure improvements be prohibitively expensive?– How to recoup the investment in existing older, expensive to use and buy solutions?– Can existing manufacturing equipment be retro-fitted with external sensors and computing equipment?

ü Workforce Reorganization– How to address existing workforce that are being grouped and siloed by job title?– How to form appropriately tech-savvy, multidisciplinary, outcomes-based teams organized around optimizing

tasks and processes?

ü Phased Implementation– Can phase implementations generate sufficient performance gains to pay for future improvements?– How to define a holistic overview and a structured plan for implementation to prevent wasted effort and

investment?


Smart Manufacturing: Points to Consider before Launching (cont’d)

ü Legal and Regulatory Challenges– How to protect shared data and what obligations is necessary to meet the requirements of local privacy laws?o How that data is to be kept secure when Machines will communicate with each other across the supply chain, potentially

exchanging huge volumes of data with a whole range of different partieso How the data is to be used, what limits there are on that usage, and who it can be shared with, all of which should be

clearly setout in contractso Most countries are still at various stage of developing their IT Security Policy or critical infrastructure and will have

implications on the standards manufacturers need to meet

– How to address employee rights, IP protection and how to manage the disruption to business models?o Greater productivity is driven from employees by providing more information and monitoring of what they do. However,

constant monitoring of employees entails whether this infringers their employment or human rights?o if 3D printing becomes a major part of the manufacturing process, the risk of losing IP in the absence of contractual

safeguards should not be overlooked.o If data is not transmitted on time or is wrong, the question is then who takes on the liability for any consequent failures in

products?


Smart Manufacturing: Points to Consider before Launching (cont’d)

ü Business Model Disruption– Supplying a license to print a part on a 3D printer is a very different business to manufacturing and selling it

directly– Consumers will expect to have greater involvement in manufacturing process and demand for greater

customization in the products they buy– M&A will look different from the M&A in industrial sectors, and more like technology M&A similar to software,

internet and other technology sectors.


Smart Manufacturing: Points to Consider before Implementation

ü Equipment diversity and interoperability– A variety of devices, instruments and equipment from device vendors and OEMs, as well as aggregation

devices such as dedicated device gateways and routers, smartphones and PCs may be required to beinterconnected

– Certain industries are governed by regulations that mandate the use of certain approved standards andcertifications. Not all vendors support these standards leading to significant interoperability issues andincreased system integration costs.

ü Data Integration– Requirement for integrating data from multiple sensors and other sources of contextual data such as web

resources for generation of relevant cues and alerts.– Structure and syntax of the data and its meaning needs to be properly understood. Only when the semantics is

understood that intelligent applications or mashups can be built, using techniques such as correlation, complexevent processing and automated reasoning using semantics technology. The semantics of the data must bepart of the data itself and not be locked up within the application logic in different application silos.


Smart Manufacturing: Points to Consider before Implementation(cont’d)

ü Scale, data volume and performance– The amount of data that needs to be ingested, stored and analyzed will increase exponentially as the quality

and accuracy of measurements improve and more applications developed and connectivity among plantsincreased

– Some plants will need to store high resolution data while some devices will generate multimedia output suchas high resolution images and videos. The sheer volume and velocity of data ingested will make standardarchitectures and platform inadequate.

– Some applications may demand more stringent real time performance than what is ordinarily possible usingstandard internet technologies. Applications and the database backend must be seamlessly scaled up asoperations become more complex.


Smart Manufacturing: Points to Consider before Implementation(cont’d)

ü Flexibility and evolution of applications– Manufacturing process with improved capabilities need to evolve with newer analytics, techniques, and

algorithms are created and newer use cases and business models added

ü Data privacy– Data collected from equipment is sensitive and must be protected from unauthorized access. It must be used

for only the specific purpose for which it was collected. Data privacy policies must be strictly followed and datasecuritization be given utmost importance

Thank you

Contact information:

Richard KoayPrincipal ConsultantRm 01/03/04, 24/F Kerry Plaza 34th Zhongxin Road, Futian DistrictShenzhen [email protected]+86 18028759180

Kitty CheungTechnical Quality Manager35/F Tower 2, Times Square,1 Matheson Street, Causeway Bay,Hong [email protected]+852 91098050


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Documents

Reimagine Business for the Digital Economy...2016/07/27 · standard value, raw material etc. and post it back to ERP system. - Capture the root causes for downtime, efficiency loss