MANUFACTURING INNOVATION AT DOW CORNING:

MANUFACTURING INNOVATION AT DOW CORNING: A JOURNEY WITH SAP MII Brett Hoffman Manufacturing Application Development Manager MII Technology Steward

Agenda Dow Corning: A Brief Introduction Our Challenges Why MII Dow Corning MII History Lessons Learned 2

Dow Corning: Who are we? A global leader in silicones and high purity silicon More than 7,000 products/services Approx. 25,000 customers Approx. 11,000 employees Strong and healthy financially: $6 billion sales 2012 Investing in our future and our customers futures: geographic, manufacturing, innovation Transforming our business to deliver: Efficiency, Innovation and Sustainability Focused on sustainability and Responsible Care 3

One Dow Corning Company Focus is on Polysilicon for Semiconductor and Solar Industries Focus is on Products Standard Silicone Products Relentless pursuit of efficiency Focus is on Markets Specialty Products & Services Relentless pursuit of innovation 4

We Serve Customer s Diverse Needs 5

Dow Corning Locations Worldwide 6

Our Challenges Across Manufacturing, Engineering & Global Operations Productivity Improvements key to maintain margins Response time to customer inquiries were unacceptable Visibility into manufacturing execution across the enterprise and the supply chain Poor decision support and multiple data sources for right time decision making Tool for every platform and vendor Ability to sustain Six Sigma improvements 7

Why MII Ability to deliver plant operations applications in weeks rapid manufacturing intelligence Flexibility to change how plant personnel interact with specific processes Built-in integration of multiple real-time shop floor and business system data sources plant visibility w/ business context Standard connectors / interfaces to connect shop floor to ERP Lower TCO with common platform 8

What is MII? Browser Enabled Clients Enterprise Applications Positioning Delivers manufacturing applications for performance management, continuous improvement, user interface and manufacturing analytics Integrates existing plant floor applications to the enterprise Extend / Simplifies SAP Business Processes to shop floor workers in context to their role Composite Application Development Environment Highlights Data Services connectors to the shop floor Business Logic Services advanced data integration layer Visualization role based content creation Manufacturing Analytics SPC/SQC Integrates with SAP ERP Partners, SAP, and Customers to deliver composites to meet customer needs and specific vertical integrated scenarios Quick time to value (weeks, not months) MII Plant Application Composition Environment Data Rendering HTTP/HTTPS/Web Service Interface Layer MII Core Services Business Logic Services Data Aggregration and Transformation Services Data Connectivity Services Data Integration MII Plant Application Composition Environment

Dow Corning MII Journey Initial Adoption Initial POC in 2000 12 MII Servers ~ 100 Composites Ent. Mfg Intelligence Plant Performance Mgmt Framework COPF Analysis Toolkit Leverage Standard Standard Libraries Electronic Batch Track & Trace Energy Management System Manufacturing SOA MII Service Oriented Integration Bus 2000-2003 2004-2008 2009 2010 2011 2012 2013 Global Rollout Info. Delivery NWG Asian, European Rollout Quality Analysis Toolset IT Excellence Award 28 MII Servers ~300 Composites Improve Organizational Alignment for Success Mfg Operations Management Standardization Upgrade & Optimize MII 12.2 Upgrade Real Time Mfg Portal Weigh & Dispense SAP Transactional Automation 10

Quality Analysis Toolset Objectives Improve Stability / Capability root cause analysis Provide a step change improvement in quality and cost reduction Enterprise visibility of product quality metrics Benefits Automated Real-time SPC analysis & Alerts Ad-Hoc Quality Analysis Dashboard builder directing cross process improvements efforts to the least stable & capable products and tests. SSPQ could be the most useful tool Eliminated for focusing need on for product other SPC quality globally ever introduced at Dow Corning. packages. - Six Sigma Master Black Belt Engineers, Supply Chain Leaders, and Quality Managers using to manage their product quality. 11

Dow Corning MII Journey Enterprise Agreement Initial POC in 2000 12 MII Servers ~ 100 Composites Ent. Mfg Intelligence Plant Performance Mgmt Framework COPF Analysis Toolkit Leverage Standard Standard Libraries Electronic Batch Track & Trace Energy Management System Manufacturing SOA MII Service Oriented Integration Bus 2000-2003 2004-2008 2009 2010 2011 2012 2013 Global Rollout Info. Delivery NWG Asian, European Rollout Quality Analysis Toolset IT Excellence Award 28 MII Servers ~300 Composites GMA Organization Mfg Operations Management Standardization Upgrade & Optimize MII 12.2 Upgrade Real Time Mfg Portal Weigh & Dispense SAP Transactional Automation 12

Plant Performance Management Objectives Automate calculation of key process metrics from plant data sources w/ business context Provide consistent measurement and delivery mechanism site by site Benefits Self-service scorecard builder w/ customizable drill down Eliminates manual calculation of process / team / building metrics MII & Plant Performance Mgmt. System provides abstraction layer for backend data source integration. Provides Consistent, highly functional user interface across all manufuacting sites. 13

Operational Composite Application Framework Features Composite Application Framework across Customer Order and Product Fulfillment Linkage to Performance Mgmt. System Theoretical Inventory / Safety Stock Modeling Route Transit Time Analysis Sub-Normal Inventory Disposition 14

Global Manufacturing Automation (GMA) Assembled Automated data capture & providing system to system integration Extending and optimizing work flows automatically executing business transactions Provides real-time performance visibility & analytics Modeling & decision support capability to drive efficiencies and control of our manufacturing process Value Creation Level 2 Level 1 Greater Productivity Level 5 Level 4 Level 3 Mfg Automation Excellence / Real-time Optimization Advance Process control Automation Between Functions/ Data & Process Integration Modeling Mfg Intelligence Analytics /Utilization in Workflows Auto Data Creation / Collection Infrastructure / Cyber Security MISSION: Implement strategic & operational supply chain automation capabilities that generate cost savings, ensure safety and security, and sustain manufacturing operability. Leverage best practices, standardized technologies, and technical expertise 16

Electronic Batch Track & Trace Objective Access all electronically recorded information about a batch of material in less than 5 minutes Focus on what information means vs. how do I find it Make a sustainable step change improvement in our global analysis capabilities Our manufacturing organization is in constant motion Identify and eliminate issues before they impact product quality Manufacturing Lessons Learned S-88 area model is a key component Engaging the best engineers was critical to success Need to capture process data and business context on the plant floor Process order numbers, batch numbers, equipment, date & time, etc. Visibility of information is driving behavioral changes Value & acceptance of standard solutions 17

Electronic Batch Track & Trace Practical Navigation Example Raw Materials Batch, Qty, Etc. Test Results Downstream Batches Process Historian Process Parameters Logistics Information Process Information Test Results Temp, Pressure, Flow, etc. Batch Time, Ttl KW, Max Temp Shipments & Inventory Temp, Pressure, Flow, etc.

SAP MII 12.2 Upgrade Key Drivers Proven Results and History 10 years building MII solutions Scalable, robust, platform to sustain existing benefits Enable future growth Reduced Total Cost of Ownership Support MES Maturity Mfg Site Hemlock, MI (Dev) Americas Regional Midland, MI (Dev) Mfg Site Mt. Meigs, AL N. American (N) Hub Mfg Site Midland, MI Auburn, MI N. American (S) Hub Carrolton, KY Mfg Site Clarksville, TN (Qa) (Dev) (Sbx) Mfg Site Seneffe, Belgium (Dev) Corporate Hub Midland, MI (Dev) Mfg Site Para, Brazil European Hub Barry, Wales S. American Hub Campinas, Brazil Mfg Site Wiesbaden, Germany Mfg Site Minas Gerais, Brazil (Dev) Japan Hub Chiba, Japan Europe Regional Barry, Wales Asian Hub Zhangjiagang, China Mfg Site Jincheon, Korea Mfg Site Songjiang, China Asia Regional ZJG, China 21

Real-Time Manufacturing Portal Objectives Communicate production schedule to plant floor (manual handling) Real-time view of production schedule Incorporate key plant data sources Consolidate views Allow for site-level customization Benefits Provides Visibility across multiple systems (SAP, LIMS, MES) Real-time status coding Alerting & voice messaging Historical analytics Configure Preview Signage 22

ERP Transactional Automation / Weigh & Dispense Automate business transactions globally to ensure timely and accurate inventories, timely quality results and warehouse management with near ZERO error rates compared to 7-10% errors from manual. 100M+ annual transaction opportunity!

Lessons Learned Faster, better informed decision making the right information at the right time. Mfg Intelligence (visibility) is the tip of the iceberg; integration, modeling, optimization & automation is key to delivering value Leverage common framework and reusable components Agile practices fit very well when exploring new opportunity development There is a balance to seek between enterprise standard vs. plant custom Understand and manage lifecycle Innovate -> Expand -> Optimize -> Manage & Decommission

Questions? 26