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Why Responsive Manufacturing Is More Crucial Than Ever

by Mike Lackey | SAPinsider

July 1, 2013

Increasing regulations, customer demand, volatility of raw materials, and the need to adapt rapidly to change are just a few of the challenges that today’s manufacturers face. In this environment, successful companies are those that can coordinate flexible, responsive manufacturing within the value chain. Read this article to discover why enabling responsive manufacturing across the design, plan, and make stages of the manufacturing life cycle is such a crucial component of SAP’s idea-to-performance approach for improving execution, operations, and the user experience.

Consumer demand for innovation, shorter product life cycles, scarcity of raw materials, and changing regulations are just some of the many challenges that manufacturers face today. Increased margin pressures have driven companies to find ways to lower material, manufacturing, and support costs, while improving the efficiency of manufacturing and delivery. On top of that, demand levels can change rapidly, compounding the volatility around manufacturing processes as companies struggle to meet demand before the tides shift again.

The global nature of manufacturing also introduces several challenges. As companies respond to market pressures, they must also be certain that all of their manufacturing locations, including those that operate in an outsourced capacity, are able to adapt rapidly to change. And, of course, any issues that come up in the manufacturing process can have even more wide-ranging repercussions in today’s more socially connected world. For instance, while quality has always been a concern, today, any quality issue can easily cause a consumer backlash and hurt a brand’s reputation.

In this environment, successful companies are those that can coordinate flexible, responsive manufacturing within the value chain (see “The Attributes of a Successful Manufacturer” sidebar). That’s why enabling responsive manufacturing across the design, plan, and make parts of the manufacturing life cycle is such a crucial component of SAP’s idea-to-performance approach to improving execution, operations, and the user experience.

Let’s look at the key requirements that enable responsive manufacturing.

The Key Requirements of Responsive Manufacturing Operations

Responsive operations require tools and capabilities that support the following:

Repetitive manufacturing: To optimize repetitive manufacturing, a form of mass production that relies on making high numbers of identical units in a continuous flow, companies need robust manufacturing, integrated planning, and real-time visibility capabilities. These capabilities enable users to manage optimized production allocation across the manufacturing network and rapidly adjust to changes in demand, supporting efforts to track production completion, material usage, and quality metrics during execution. In addition, they provide visibility into work in process and real-time quality or production notifications.

Make-to-order manufacturing: With make-to-order manufacturing, in which manufacturing doesn’t start until an order is received, it’s important to be able to integrate operations to ensure overall effectiveness and control. This enables better planning, provides visibility into supplies, and improves production execution, quality, traceability, and overall equipment effectiveness.

Engineer-to-order manufacturing: Similar in some ways to make-to-order manufacturing, engineer-to-order manufacturing focuses on building complex and regulated projects. To support this, companies need integrated, intuitive solutions to help them manage configuration information and processes, integrate graphic design into the build to simplify comprehension, and manufacture deliverables and components, all while enforcing regulatory and customer-driven requirements.

Process manufacturing: This branch of manufacturing, associated with formulas and recipes, requires companies to be able to optimize the planning and use of raw materials and resources. To ensure efficient operations, companies need to be able to provide predictable output and meet global demand by allocating operations to the most effectively producing plants. Operations in process manufacturing are managed against defined metrics, requiring real-time performance visibility. Assets are managed in coordination with production for effective resource management.

Lean manufacturing: Setting up lean processes with the goal of eliminating waste wherever possible requires manufacturers to be able to produce the right products and provide the right services at the required time in the required quantities with consistency and predictability.

Outsourced manufacturing: For companies that outsource all or part of their manufacturing operations, being able to successfully manage the manufacturing network is critical. This can be a challenge, however, since for most companies, linear supply chains have turned into complex supply networks. That’s why it’s important to have collaboration capabilities so companies can more easily orchestrate outsourced manufacturing activities.

Quality management and compliance: In today’s competitive markets, manufacturers can differentiate themselves by delivering high-quality products. In addition to exceeding customer expectations, quality assurance capabilities can also help a company comply with industry standards and legal regulations to minimize product safety risks.

Supporting these kinds of capabilities is critical to responsive manufacturing. In addition, enabling performance visibility is important since the ability to gain insights into operations and overall performance is a key facet of responsive manufacturing as well. Enabling this kind of visibility involves integrating real-time plant production information into business processes to give it context, providing business users with metrics they can understand and evaluate, thus leading to better decision making. This allows companies to easily monitor overall performance, detecting and responding to abnormal events or trends.

“Everyone from the shop floor to the top floor should work with the same information base, so it made sense to use SAP for production. We streamlined all organizational processes and increased first pass yield to 99.5%.”

Chief Operating Officer at a market leader in fans, blowers, and air handler production

“SAP Manufacturing Integration and Intelligence...has just opened up the supply chain between the core ERP system and plant operating systems...with almost a 10-fold increase in production capability.”

Director of SAP and Application Development at a leading paint manufacturer

Do You Have the Right Tools to Enable Responsive Manufacturing?

SAP has a full suite of tools and applications that support responsive manufacturing, including several rapid-deployment solutions (see the  “Get a Jump Start on the Road to Responsive Manufacturing with Rapid-Deployment Solutions” sidebar). For example, SAP provides:

Database and technology solutions: SAP Business Suite powered by SAP HANA enables manufacturing companies to plan rapidly, improve quality monitoring, and optimize material flow. In particular, this software supports repetitive manufacturing, lean manufacturing, and quality management and compliance. The solution platform that this software provides helps drive integrated, automated manufacturing capabilities. This allows you to run faster and decrease the innovation ramp to production time.

Mobile solutions: Mobile solutions provide real-time information, such as work instructions and plant performance metrics, to a variety of users, including supervisors, plant workers, and business users. Enterprise mobility ensures that information is available where and when it is needed. In particular, these solutions support repetitive manufacturing, make-to-order manufacturing, engineer-to-order manufacturing, process manufacturing, and quality management and compliance. These mobile solutions also play an important part in helping companies run simpler since they, like SAP’s other manufacturing solutions, provide intuitive user interfaces and a user-friendly experience (see Figure 1).

Analytics: Manufacturers can rapidly collect massive amounts of real-time operational data volumes. SAP’s analytics capabilities help manage that data, put it into context, and create an understanding of how your activities might affect operations, finance, and external stakeholders. Even better, analytics can help companies predict demand changes so that, rather than simply reacting to change, manufacturers can proactively adjust their processes and plans to meet future demands. Analytics capabilities support every aspect of a responsive manufacturing environment, helping your manufacturing operations run smarter by providing visibility into customer demands and process variances and enabling real-time response to production demand and performance. 


SAP solutions provide operators with access to the right information through an integrated, intuitive user interface
Figure 1 SAP solutions provide operators with access to the right information through an integrated, intuitive user interface

All of SAP’s solutions for manufacturers align operations with corporate objectives and sync manufacturing and business processes to achieve continuous improvement and optimize IT investments. Across the board, these solutions provide:

  • A comprehensive portfolio that enables closed-loop processes across planning, execution, and asset management
  • Low total cost of ownership with native integration that reduces integration costs over both the short term and the long term
  • An innovative platform that is adaptable and configurable enough to leverage existing plant investments
  • Comprehensive capabilities that support any manufacturing style


Responsive manufacturing, which covers the design, plan, and make portions of SAP’s idea-to-performance approach, enables innovation, quick response to market demand signals, lower total manufacturing costs, and consistent, high-quality, socially responsible operations — all of which contribute to your ability to run smarter, faster, and simpler. Now that you’re armed with information about the requirements around responsive manufacturing, the tools you’ll need to support it, and the benefits you’ll reap by doing so, your next step should be to determine when and how you can get started. For more information, visit

Mike L

Mike Lackey ( joined SAP in 2008 through the acquisition of Visiprise and is now Vice President of Solution Management for Line-of-Business Manufacturing. Mike has a unique set of knowledge that covers both manufacturing software and design collaboration, along with over 20 years of experience in the high-tech sector. Mike earned a Bachelor of Science degree in industrial engineering from Georgia Institute of Technology and an MA in business administration from Mercer University with dual concentrations in international business and marketing.

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