Closed Loop Excellence

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2 Closed Loop Excellence PAVING THE WAY FOR A TRULY AND SEAMLESS DIGITAL R&D October 2017 Berlin Rudolf Schmid MHP Management- und IT-Beratung GmbH l

3 1 Introducing MHP A Porsche Company Agenda 2 3 What happened so far? What will drive R&D? 4 What s the impact on the value chain? 3

4 Introducing MHP A Porsche Company Porsche in the name GT2 RS is the fastest Porsche 911 of all time on the Nürburgring Nordschleife at 6 minutes, 47.3 seconds 2016 MHP A Porsche Company 09/02/2016 l 4

5 Introducing MHP A Porsche Company. And consulting in the genes! The Difference Symbiosis Management- + IT-Consulting l Process Delivery l Excellence l Automotive l Customers The Portfolio Management Consulting System Integration Managed Services Business Solutions The Competence Seamless Consulting Portfolio along the entire Value Chain Product Lifecycle Mgmt. Supply Chain Mgmt. Production & Operations Mgmt. Customer Experience After Sales Retail Mgmt. Human Resources Finance & Controlling Business Intelligence Technology Services Application Mgmt. Services 2016 MHP A Porsche Company 09/02/2016 l 5

6 What did really change? l

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8 1 What happened so far For decades manufacturing has been the paragon of efficiency and corporate improvement activities. Only recently R&D could catch up. Manufacturing Operations Research & Development MHP A Porsche Company l 8

9 1 What happened so far For decades manufacturing has been the paragon of efficiency and corporate improvement activities. Only recently R&D could catch up. Manufacturing Operations Research & Development QFD Designto-cost Simulation Modularization SE MHP A Porsche Company l 9

10 1 What happened so far For decades manufacturing has been the paragon of efficiency and corporate improvement activities. Only recently R&D could catch up. Manufacturing Operations Research & Development QFD Smart Factory Automation Simulation SE Lean Manufacturing SCM Six Sigma JIT Modularization Designto-cost Outsourcing Offshoring MHP A Porsche Company l 10

11 2 Current core challenges for companies In a world of uncertainty and complexity, efficiency is no longer the core fitness criteria for companies. Adaptability and speed decide the race. Typical drivers of uncertainty and complexity Demanding customers Dynamic markets Technological changes Rising start-ups Constantly screen for new trends and needs Broadly ideate usecases and solutions Test and experiment early Analyze and choose empirically Focus and execute quickly Fail fast or win big R&D Adaptability Speed MHP Management- und IT-Beratung GmbH 10/23/2017 l 11

12 3 First solution approach: speeding-up R&D Especially in the front-end of the value chain, companies face significant potentials to accelerate time-to-market and adaptability. Typical speed potentials within R&D Multitasking Over engineering Student syndrome Failure avoidance Management focus Cost Time Quality Project stage MHP Management- und IT-Beratung GmbH 10/23/2017 l 12

13 3 First solution approach: speeding-up R&D With its unique Engineering Effectiveness framework, MHP is able to accelerate time-to-market about 20 to 30 %. Results Significant lead-time reduction Transparency within multi-project environment Optimal utilization of corporate bottleneck Core Principles Attitude towards work-in-process: Definition of critical chain: Attitude towards securities/buffers: Core steering parameter: Focus of improvement: One-piece-flow / Reduction of batch sizes Longest sequence of tasks, considering resource constraints Reveal implicit buffers through buffer centralization Buffer consumption relative to project progress Widen bottleneck or increase its utilization Theory of Constraints Lean Management Agile Movement Complex System Theory Theoretic foundation MHP Management- und IT-Beratung GmbH 10/23/2017 l 13

14 3 First solution approach: speeding-up R&D We have already proven the power of our Engineering Effectiveness framework in different customer situation within automotive and manufacturing. Optimization with throughput oriented project management Application of theory of constraint upon all workflow parameters Coordination of development activities by means of pull principle Achieved throughput time reduction: Elimination of multitasking Downsizing of project network plans Introduction of visual management in various areas MHP Management- und IT-Beratung GmbH 10/23/2017 l 14

15 But what is the impact of speeding up R&D? MHP Management- und IT-Beratung GmbH 10/23/2017 l 15

16 3 Second solution approach: speeding-up the whole value chain In a world of uncertainty and complexity, flow, closed feedback-loops and adaptive learning are the essential fitness criteria for companies. Closed-Loop-Manufacturing Development Production Sales & Service Customer Core principles: Over-the-wall Manufacturing Integrated Manufacturing Closed-Loop-Manufacturing Production Sales & Service Customer Development Production Sales & Service Customer Development Production Sales & Service Customer Never suitable No longer suitable State-of-the art Flow Closed feedback loops Adaptive learning MHP Management- und IT-Beratung GmbH 10/23/2017 l 16

17 3 Second solution approach: speeding-up the whole value chain In a world of uncertainty and complexity, flow, closed feedback-loops and adaptive learning are the essential fitness criteria for companies. Closed-Loop-Manufacturing Development Production Sales & Service Customer Core principles: Flow Closed feedback-loops Adaptive learning Accelerate lead time Limit work in process Eliminate waste in value stream Continually identify & elevate constraints See and fix problems as they occur Increase frontloading of information Enable real-time data analytics Institutionalize continuous improvement Transform local discoveries into global improvements Increase resilience through stress-testing Paradigmatic foundation: Theory of Constraint, Lean Movement, Agile Manifesto, DevOps & Continuous Delivery, Lean Startup Source: Kim/Willis/Debois/Humble (2016): The DevOps Handbook MHP Management- und IT-Beratung GmbH 10/23/2017 l 17

18 3 Second solution approach: speeding-up the whole value chain Optimizing only within the borders of R&D does not lead to success. The link between R&D and downstream processes is crucial as it defines overall system performance. PLM MES Automation Virtual Teamcenter Real Source: Siemens (2016) MHP Management- und IT-Beratung GmbH 10/23/2017 l 19

19 3 Second solution approach: speeding-up the whole value chain The seamless integration of R&D with downstream processes and the establishment of continuous feedback is what we call: Closed-Loop-Excellence Development Manufacturing Sales & Service Customer Ecosystems Appropriate structures, behaviors, steering mechanisms, and resources Processes Seamlessly integrated cyberphysical value chain Data Big data processed by stateof-the-art technology MHP Management- und IT-Beratung GmbH 10/23/2017 l 20

20 Activities 3 Second solution approach: speeding-up the whole value chain In order to implement a fully integrated Closed-Loop-Manufacturing, MHP offers a 4 step approach Leverage get the most from what you have. Linkage close the gaps to achieve flow. Looping bring back data to increase value. Enlargement maximize your customer centricity. Ecosystems Processes Data Harmonization of IT landscape Better utilization of remaining IT tools Elimination of waste and multitasking Integration of processes and systems Introduction of a holistic data model Focus on bottleneck utilization Harvesting of production data Maximization of frontloading Cross-functional collaboration Harvesting of customer data Optimization of design-to-value Early customer involvement MHP Management- und IT-Beratung GmbH 10/23/2017 l 21

21 3 Second solution approach: speeding-up the whole value chain Closed-Loop-Excellence can unfold its power in diverse use cases using today s technology. Use Case describes a highly relevant scenario or task where Closed-Loop-Manufacturing contributes a significant value to the customer Requirements Management Product Costing Simulation & Validation Manufacturing Activities Frontloading information from past projects Improving the overall product data model Relevant data Cost/ revenue information from past projects Fleet/usage data from existing customers Development results from past projects Benefits Early cost prediction on functions and components Constant traceability of requirement fulfillment Less duplication of work Activities Using data from downstream processes to enhance cost knowledge Conduct early product cost prognosis and lifecycle cost evaluation Relevant data Cost drivers within the product-lifecycle Manufacturing process data CRM data, recycling data Benefits Influence product-cost right from the start of a development project Cost savings across the whole product life cycle Activities Improving simulations with real-world data Introducing early simulation and validation Relevant data Manufacturing data Data from physical tests Fleet/usage data from existing customers Benefits Cost savings because reduction of physical tests Higher quality due to early failure identification Smoother production introduction Activities Seamless manufacturing lanning/automation Optimizing design-to-manufacturing Relevant data Manufacturing process data Machinery data (NC-codes, operating data) Data from physical tests/quality checks Benefits Smoother production introduction Less rejections and defects Shorter lead times MHP Management- und IT-Beratung GmbH 10/23/2017 l 22

22 3 Second solution approach: speeding-up the whole value chain One promising Closed-Loop-Manufacturing use case brings additive manufacturing to its full level of performance. Create additive manufacturing part with integrated Siemens NX solution Collect part data of testing or real life (Embedded connectivity and Smart Machine Retrofitting) 1 PLM MES 4 Automation Assemble additive manufacturing parts (incl. serialized tracking) 3 5 Virtual Teamcenter 2 Real Create additive manufacturing knowledge base with real life data Produce parts with the co-innovating platform for additive manufacturing Source: Siemens (2016) MHP Management- und IT-Beratung GmbH 10/23/2017 l 23

23 Potential of digitalization within R&D 3 Second solution approach: speeding-up the whole value chain Closed-Loop-Excellence is an essential step stone and prerequisite for a truly digitized R&D. Digital transformation journey of R&D Digitize value chain from end-to-end Establish a holistic model which integrates product, process and resource data into a single digital twin Improve data availability & insight Make decentralized data available for all corporate functions and stakeholders. Improve cross-functional projects to increase data understanding Maximize artificial intelligence Thoroughly evaluate human activities on their automation potential. Bring in artificial intelligence to focus human brain power on the really innovative and creative aspects of the value chain MHP Management- und IT-Beratung GmbH 10/23/2017 l 24 Time

24 4 Outlook on the future of R&D AlphaGo Zero: Google DeepMind supercomputer learns 3,000 years of human knowledge in 40 days October :00pm Pattern recognition & machine learning e.g. computers automatically detect failures and solutions Decision making & algorithmic design e.g. computer independently generate product architectures Complex interaction, scouting & ideation e.g. R&D employees detect new big data use cases Bionic models for R&D e.g. bionic based product maturity management MHP Management- und IT-Beratung GmbH 10/23/2017 l 25

25 Summary 1. R&D organizations will speed up product development dramatically in order to manage complexity, changed ecosystems and uncertainty. 2. Downstream and upstream value chain must cope with the impact todays culture, processes and IT support are not ready for that yet. 3. Reliable closed loop networks will be the backbone to deliver throughput time reduction from to the customer and managing virtual and real twins! MHP Management- und IT-Beratung GmbH 10/23/2017 l 26

26 Using digital Closed Loop Excellence to continue creating extraordinary physical twins MHP A Porsche Company 09/02/2016 l 27

27 Thank you for your attention! MHP Management- und IT-Beratung GmbH Film- und Medienzentrum l Königsallee 49 l D Ludwigsburg Telefon +49 (0) l Fax +49 (0) info@mhp.com l Internet Rudolf Schmid Senior Manager Closed Loop Excellence rudolf.schmid@mhp.com MHP Management- und IT-Beratung GmbH 23/10/2017 l 28