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Manufacturing in a Changing World: Why Manufacturers Need to Run Smarter, Faster, and Simpler

by Scott Bolick and Thomas Ohnemus | SAPinsider

July 1, 2013

As customers have grown more demanding, manufacturers are being pressed to optimize their processes, leverage data, and become smarter, faster, and simpler in their operations. In this Q&A, SAP’s Scott Bolick and Thomas Ohnemus discuss these new manufacturing trends and how SAP’s idea-to-performance portfolio provides companies with the flexibility needed to integrate the different parts of the value chain and achieve overarching goals.
 

The formula for manufacturing success has been significantly changed. In the new industrial revolution, simply being able to make a product to sell to customers will not guarantee sustainable success. Customers have grown more demanding and manufacturers are being pressed to change even the most basic ways they operate. They have to become smarter, faster, and simpler in their business by optimizing and integrating processes, leveraging data, and providing more intuitive user experiences.

Recently, SAPinsider spoke with SAP’s Scott Bolick, Vice President of Solution Management for Idea to Performance, and Thomas Ohnemus, Vice President of Solution Marketing for Idea to Performance, to find out more about these trends and how SAP’s idea-to-performance portfolio can help customers keep pace with them. 

Q: What are the major market forces that are changing the manufacturing world today?

Ohnemus: I would say that there are four megatrends that are causing companies to review their business models:

  • Customer demands have driven manufacturers to move toward more collaborative innovation models and to focus more on providing measured outcomes, rather than focusing purely on selling products.
  • The explosion of data in today’s connected world provides new opportunities for manufacturers to optimize their resources and build new businesses.
  • Resource constraints and increased regulations have put more pressure than ever on manufacturers.
  • The global population is becoming more educated and more digitally experienced, which is driving new expectations from both customers and employees.

Bolick: I agree that these are the important trends, and I think a perfect example can be found in the changes that we are seeing in discrete manufacturing. Discrete manufacturing is no longer just building products to stock. In many cases, customers are looking for customized products and services from manufacturers. The contracts are becoming specific to the customer, and more and more products are being designed based on a customer’s specifications — which can change up until the production run begins.

So, what is now expected from manufacturers is more of a holistic beginning-to-end offering and a high level of agility in delivering these services. Of course, this means that a company’s functions — research and development, manufacturing, asset management, sustainability, and services — have to integrate much more closely today to meet these kinds of customer demands.

Q: Can you tell us more about SAP’s idea-to-performance portfolio?

Ohnemus: SAP’s idea-to-performance portfolio is an integrated solution offering that enables three key things: intelligent process execution, resourceful operations, and intuitive user experiences. The idea-to-performance bundle:

  • Provides insight on big data created from information technology and operational technology
  • Creates seamless, more agile processes by bringing this insight into integrated  solutions for research and development, manufacturing, sustainability, and asset management
  • Facilitates rapid adoption by providing 3D visualization, mobile, and social media capabilities

And, of course, across all of these areas, we are leveraging the power of SAP HANA to help companies gain insights from the massive amount of data that is coming in from their enterprise and shop floor systems and to take actions based on these insights.

Bolick: Along with these kinds of broader solutions that provide value across manufacturing processes, we’re also working on more targeted solutions for specific areas. For example, we’re launching an energy analytical application powered by SAP HANA that allows users to compare energy performance across their plants on a global basis, across multiple years, and down to the asset level. With this application, the data is collected directly from the shop floor. Energy analysis at the enterprise level can now occur in near real time — and this data can be leveraged to validate energy bills rather than having energy bills as the major means for tracking energy usage. This data allows companies to identify weaknesses to improve and strengths to share as best practices across the enterprise based upon energy insight tied to production plans. They can also go further to put in place the necessary projects to mitigate energy spend. Overall, this means that manufacturers can holistically manage energy.

Q: How does this portfolio help customers meet the challenges of the market forces you described earlier?

Bolick: Idea to performance helps customers become smarter, faster, and simpler (see Figure 1). We take this approach and deliver business value through four key scenarios (see Figure 2). The first is by helping them become more sustainable in their innovation, increasing the velocity of innovation and embedding sustainability. Companies need to be able to consistently and continually design and deliver products that gain customer appreciation and meet legal requirements. This means they have to manage consumer-driven product innovation while streamlining processes and overcoming organizational boundaries. The ability to streamline the handoff to manufacturing and collaborate more closely to reduce the time to move from ramp-up to full production is critical.

Manufacturers today must run smarter, faster, and simpler to succeed

Figure 1 — Manufacturers today must run smarter, faster, and simpler to succeed


The four scenarios that make up idea to performance

Figure 2 — The four scenarios that make up idea to performance


When sustainable innovation is done right, it increases speed to market, increases customer satisfaction, and builds the brand strength.

The second way we’re helping is by delivering the responsive manufacturing strategy. The increased demand for customization requires integrated shop floor operations that provide visibility into production, quality, and traceability through better managed processes. Data and systems are integrated with the production and manufacturing systems so the decisions made on the shop floor are reflected in the central system and all of the stakeholders are aware of any changes or prioritizations.

The result is better customer responsiveness at reduced cost with improved throughput, more consistent product quality, increased traceability, and shorter cycle times to drive asset utilization and on-time delivery.

The third way is through our operational excellence offerings around health and safety, quality, energy and environmental resource management, and asset management. This is a particularly important facet since a company’s growth potential can be hampered by poorly managing operational risks, which leads to accidents and unplanned downtime. Manual processes and scattered data can cause management system failures that impede employee engagement and lead to poor safety, quality, and asset reliability.

So, to optimize operations, all of those processes have to be interconnected with shared data. In the past, the optimization of those processes would happen in silos — one organization would optimize the manufacturer’s costs, while another would be optimizing for environmental issues and another for quality. And those optimizations could sometimes conflict — a quality optimization might mean higher costs. But the reality is that all of those should be interconnected. If you interconnect the optimization process, then you can start to understand, in a predictive manner, what incidents may drive unplanned downtime in your plant. The result of all this work is fewer adverse events, lower costs, and higher productivity.

Finally, the fourth way we’re helping our customers is through aftermarket service. We see a lot of potential in the predictive capabilities of SAP HANA to streamline the service in manufacturing, especially as machine-to-machine connectivity takes off.

Q: You’ve touched on the importance of interconnection and integration a few times. Would you say that this is an important message?

Ohnemus: Yes. Overall, I think we’d like to stress the importance of viewing and managing the manufacturing process as a whole, from idea, to manufacture, to actual product performance.

The idea-to-performance portfolio is all about enabling a business model transformation. That means that this portfolio enables and supports a much closer, more horizontal integration with suppliers that also allows the manufacturer to become much closer to customers, helping them gain an understanding of their individual and specific needs.

Bolick: One good example of how our tools can help transform business models is our 3D visualization technology. As I mentioned earlier, more of today’s products are being manufactured to the customer’s specification, which means the designs are different for each customer. Our 3D visualization capabilities can be used when the product is being designed and also when it’s being built.

For example, if it’s a product that must be assembled on site, those 3D images can then be used to get the product up and running more efficiently. And when the product requires service later, those 3D images will assist in that service process as well.1 So you can see how even something as simple as visualization — if that visualization is consistent across development, manufacturing, and service — can bring real benefits. By providing all stakeholders along the product life cycle with access to the same visualizations, you not only improve TCO, you also give people a much greater ability and opportunity to collaborate.

Ohnemus: That’s a perfect example. Basically, the idea-to-performance portfolio provides companies with the flexibility to integrate all the different parts of the value chain, from the ideation of a product, to the product’s design, to its manufacturing, and even to its aftermarket service. These processes cannot be managed or considered as purely sequential as they have been in the past. With increased pressure on time and efficiency, ensuring the integration of these processes and the data flow among stakeholders is a very important part of making the manufacturing process more efficient. By approaching it in a more holistic way, all the stakeholders along this value chain can work more closely together to achieve their goal. 

 

Scott B
        

Scott Bolick
Vice President of Solution Management for Idea to Performance
SAP


           
Thomas O
        

Thomas Ohnemus
Vice President of Solution Marketing for Idea to Performance
SAP


           
 

1 See “Reduce Risk, Optimize Performance, and Increase Sustainability: Aiming for Operational Excellence in Your Organization” by Dr.-Ing. Achim Krüger in the July issue of SAPinsider for more information about SAP 3D Visual Enterprise. [back]

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