Plant Information Needs in Turbulent Times

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1 2008 Automation Summit Siemens Plant Information Needs in Turbulent Times Julie Fraser, Principal Industry Analyst

2 Agenda Production Challenges Engineering & IT Converge Why Plantwide Systems are Critical Information From Outside Production

3 21 st Century Manufacturing

4 21 st Century Manufacturing Global supply, demand, production, competition

5 21 st Century Manufacturing Global supply, demand, production, competition Capable, complex, configurable products

6 21 st Century Manufacturing Global supply, demand, production, competition Capable, complex, configurable products Well informed customers

7 21 st Century Manufacturing Global supply, demand, production, competition Capable, complex, configurable products Well informed customers Increasing regulations

8 21 st Century Manufacturing Global supply, demand, production, competition Capable, complex, configurable products Well informed customers Increasing regulations Delivering solutions

9 21 st Century Manufacturing Global supply, demand, production, competition Capable, complex, configurable products Well informed customers Increasing regulations Delivering solutions Demand-driven responsiveness

10 Project Management Engineering Prototyping Tooling Quality Assurance Product & Order Needs Converge in the Plant Product planning Product development Sales Planning Purchasing Production Control Production Production -Assembly -Test QA In-Service market and product development Delivery Service

11 Project Management Engineering Prototyping Tooling Quality Assurance Time to Market Product & Order Needs Converge in the Plant Product planning Product development Sales Planning Purchasing Production Control Production Production -Assembly -Test QA In-Service market and product development Delivery Service

12 Project Management Engineering Prototyping Tooling Quality Assurance Time to Market Product & Order Needs Converge in the Plant Product planning Product development Sales Planning Purchasing Production Control Fulfillment Time Production Production -Assembly -Test QA In-Service market and product development Delivery Service

13 Project Management Engineering Prototyping Tooling Quality Assurance Time to Market Product & Order Needs Converge in the Plant Turbulence! Product planning Product development Sales Planning Purchasing Production Control Fulfillment Time Production Production -Assembly -Test QA In-Service market and product development Delivery Service

14 What is Your Top Production Plant Challenge? Ramping up: time to quality & volume Gaining repeatability and predictability Lowering costs to compete Matching output to demand Improving yield & quality with higher mix

15 End of Industrial Era: to Knowledge-based Revolution

16 End of Industrial Era: to Knowledge-based Revolution Bar rising for quality, service & efficiency

17 End of Industrial Era: to Knowledge-based Revolution Bar rising for quality, service & efficiency Customization displacing mass production

18 End of Industrial Era: to Knowledge-based Revolution Bar rising for quality, service & efficiency Customization displacing mass production Outsource and manage partner network to deliver customer experience

19 End of Industrial Era: to Knowledge-based Revolution Bar rising for quality, service & efficiency Customization displacing mass production Outsource and manage partner network to deliver customer experience The new frontier: Flexibility, Teamwork and Visibility

20 Agenda Production Challenges Engineering & IT Converge Why Plantwide Systems are Critical Information From Outside Production

21 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence

22 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network

23 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility

24 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility

25 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management

26 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management Inbound & outbound logistics

27 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management Inbound & outbound logistics

28 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management Inbound & outbound logistics Consortium bids for projects

29 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management Inbound & outbound logistics Consortium bids for projects Joint innovation with customers & partners

30 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management Inbound & outbound logistics Consortium bids for projects Joint innovation with customers & partners

31 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management Inbound & outbound logistics Consortium bids for projects Joint innovation with customers & partners

32 Sales Distribution Procurement Development Cross-Discipline Teamwork as a New Core Competence The innovation network Supplier quality & visibility Supply chain event management Inbound & outbound logistics Consortium bids for projects Joint innovation with customers & partners All need plant input!

33 Information Flow In-house engineering and manufacturing

34 Information Flow In-house engineering and manufacturing Specialist finishing process

35 Information Flow Suppliers participate in product and process design In-house engineering and manufacturing Specialist finishing process

36 Information Flow Suppliers participate in product and process design In-house engineering and manufacturing Specialist finishing process Customers help specify, review, and forecast

37 Information Flow Suppliers participate in product and process design In-house engineering and manufacturing Specialist finishing process Customers help specify, review, and forecast 3PL needs packaging adjustment and implements VMI service

38 Information Flow Suppliers participate in product and process design In-house engineering and manufacturing Specialist finishing process Customers help specify, review, and forecast 3PL needs packaging adjustment and implements VMI service

39 Information Flow Suppliers participate in product and process design In-house engineering and manufacturing If your diagram doesn t show everything Specialist finishing process happening in parallel, it s wrong Customers help specify, review, and forecastcambashi interview 3PL needs packaging adjustment and implements VMI service

40 Production, Engineering & IT are Converging Fewer resources dictate leverage Engineering: Manufacturing, Process, Controls, Mechanical, Electrical, etc. New product needs Ongoing stable production Product & Process Change

41 The Hard Hats and the Suits

42 The Hard Hats and the Suits Stock, capacity, shipments, production schedules

43 The Hard Hats and the Suits Stock, capacity, shipments, production schedules Products, parameters, partners, sales forecasts

44 The Hard Hats and the Suits Stock, capacity, shipments, production schedules BOM/recipe, routings, production plans, change requests, change orders Products, parameters, partners, sales forecasts

45 Agenda Production Challenges Engineering & IT Converge Why Plantwide Systems are Critical Information From Outside Production

46 Why Care about MES? Use MES Do Not Use MES Plants using MES increased profitability 4X more than others Continuous Improvement Change in plant-level profitability (annual value of shipments minus materials and manufacturing costs) over the past 3 years*, % 2004 Industry Directions et al MES Performance Advantage: Best of the Best use MES

47 Why Care about MES? Use MES Do Not Use MES Plants using MES increased profitability 4X more than others Continuous Improvement Change in plant-level profitability (annual value of shipments minus materials and manufacturing costs) over the past 3 years*, % 2004 Industry Directions et al MES Performance Advantage: Best of the Best use MES

48 Why Care about MES? Use MES Do Not Use MES Plants using MES increased profitability 4X more than others Continuous Improvement Change in plant-level profitability (annual value of shipments minus materials and manufacturing costs) over the past 3 years*, % 2004 Industry Directions et al MES Performance Advantage: Best of the Best use MES

49 S-95 Defines MES or MOM Enterprise Product definition Production capability Production schedule Production performance Production MES/MOM Factory/ Plant Automation Production resource management Product definition management Source: ISA S95 Committee (modified) Detailed production scheduling Production dispatching Production execution Level 2 Control (Batch, Discrete, Continuous) Production tracking Production Performance analysis Production data collection

50 Plant Sends Key Information to Enterprise Applications Serial History Resource Use Order Status Output Quality Costs Scrap ERP CRM Order status Spec issues Genealogy SCM Purchased Materials issues Actual inventory levels, location Actual to schedule, dynamic updates Production Order Cycle Eng Change Requests As-built History Comments to Specs PLM 50

51 % of respondents increasing by 1% or more annually MES Users are More Likely to Improve on Financial Measures 70% 60% 50% 40% 30% 20% 10% 0% Net operating profit Source: MESA Metrics that Matter: Uncovering KPIs that Justify Operational Improvements 2006 MESA International & Industry Directions Inc. EBITDA Use MES ROA/RONA No MES

52 Agenda Production Challenges Engineering & IT Converge Why Plantwide Systems are Critical Information From Outside Production

53 Enterprise Applications Provide Plant Information, Too! Raw materials inventory BOM Routings Orders ERP CRM Customer specs Configurations Issues/Feedback Plan Updates Expected receipts Replenishment triggers SCM Production Order Cycle Engineering Changes Bill of Materials (BOM) Process specification Drawings/Specs PLM 53

54 Enterprise Applications Provide Plant Information, Too! Raw materials inventory BOM Routings Orders ERP CRM Customer specs Configurations Issues/Feedback Plan Updates Expected receipts Replenishment triggers SCM Production Order Cycle Engineering Changes Bill of Materials (BOM) Process specification Drawings/Specs PLM Synch. Opportunity and risk! 54

55 Product Development is Key Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture

56 Product Development is Key Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture Functional or phase based departments

57 Product Development is Key Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture Multi-disciplinary or product teams Functional or phase based departments

58 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture

59 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation

60 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation

61 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation CAM Factory layout and sim. Process simulation CAPP

62 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation CAM Factory layout and sim. Process simulation CAPP LIMS CMM reporting Trials management

63 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation CAM Factory layout and sim. Process simulation CAPP LIMS CMM reporting Trials management BOM Approval Routing Procurement Schedule

64 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation CAM Factory layout and sim. Process simulation CAPP LIMS CMM reporting Trials management BOM Approval Routing Procurement Schedule ERP SCM CRM MES

65 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation CAM Factory layout and sim. Process simulation CAPP LIMS CMM reporting Trials management BOM Approval Routing Procurement Schedule ERP SCM CRM MES Document management, product data management, workflow, engineering change order, approvals, product visualization

66 Some typical IT Applications Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation CAM Factory layout and sim. Process simulation CAPP LIMS CMM reporting Trials management BOM Approval Routing Procurement Schedule ERP SCM CRM MES BI, focus groups, forecasting Publications, distribution, forecasting Project management, business planning, cost control Document management, product data management, workflow, engineering change order, approvals, product visualization

67 The PLM footprint Research & Concept Development Detailed Design & Analysis Manufacturing Process Design Prototype & Validation Testing Production Ramp up Volume Manufacture System modeling CAD Styling Rapid prototype Chemical simulation MCAD EDA CFD FEA EMC Process simulation CAM Factory layout and sim. Process simulation CAPP LIMS CMM reporting Trials management BOM Approval Routing Procurement Schedule ERP SCM CRM MES BI, focus groups, forecasting Publications, distribution, forecasting Project management, business planning, cost control Document management, product data management, workflow, engineering change order, approvals, product visualization

68 Plant Information Needs in Turbulent Times Two-way transfer to: Stay in Sync with Sales Design Eng. Supply Chain Strategy Contribute to New Products Customer Service Business Success EventTitle

69 Cambashi Inc. Thank you! Julie Fraser, Principal Industry Analyst