2 - SAP FORUM 2006 Mill Products

Stefan SoellerDirector Field Service AmericasSAP IBU Mill Products & Mining

Mill Products

New SCM Development: Plan to Profit

Best Practices for Mill Products

IBU Mill Products

SAP’s Partner Strategy with Mill Focus

Agenda



IBU Mill Products


© SAP Forum 2006, Brazil, Mill Update / Stefan Soeller / 4

SAP for Mill Products: Our Vision and Mission

Vision

To be the No.1 solution provider to the Mill Industry, and lead the industry into a new era of growth and profitability, driven by cost-effective and integrated strategies.

Mission

To provide a complete, flexible solution to you that integrates people, information and processes within and across the enterprise.


The Industry BusinessBusiness Unit is the only leading global organization

that is responsible for the success of SAP within a specific

industry segment

Responsibility


IBU Mill Products - Offerings

Providing the knowledge and experiences made in customer implementation projects,

and in the cooperation with user groups

Demo/Education

Cons

ultin

gSu

ppor

t

Pre-Sales

Support

Solu

tion

Dev.

Global

Roll OutGlobal Roll In

IBU Mill Products


Eckhardt Siess, VP IBU Mill Products

IBU Mill Products Organization

Field Service

Solution Management & Development Stefan Weisenberger

Business Development

Building MaterialsUdo Werner

Pulp & PaperEric Osterroth

Forest & WoodBrian Dickinson

FurnitureStefan Soeller

Primary MetalsStefan Koch

Fabricated Met./CableOliver Rueckert

TextileStefan Weisenberger

Cross-Industry Solution Management & Development

AmericasStefan Soeller

EMEARoman Kuhn

EEMRobert Valenta

AsiaRoman Kuhn

Japan/AUS/NZRobert Valenta

Mid-MarketNikola Bosduganov

Building Materials, TextileDorothee Andermann

Metal, Steel, PaperReinhard Ematinger

PackagingNikola Bosduganov


IBU Mill Products - Responsibilities

Industries Represented

Primary Metals, Steel Manufacturing, Metal Trading, Mining

Fabricated Metal Products

Wire & Cable

Forest management, Forest Products, Pulp & Paper, Paper Trading

Building Materials, Stone, Clay, Glass

Textile Production

Furniture


Mill specific functionality

SAP for Mill Products vs. Industry Solution - Mill Products

mySAP ERP

mySAP SCM

mySAP SRM

mySAP CRM

mySAP PLM

SAP xApps

SAP NetWeaver

IndustrySolution

Mill Products

SAP for Mill Products


SAP for Mill Products – Examples of Functionality for Mill

Industry Solution –Mill Products

as add-on to mySAP ERPEase of use data entryOrder CombinationTrim sheet order…mySAP SCM

ATP-Check and production planning based on characteristics Block SchedulingMultiple output planningOptimization Interface…

SAP NetWeaverBusiness, Product, Profitability – AnalysisShop floor integration…

mySAP CRMInternet sales for configurable productsPricing based on CharacteristicsBatch handling…

mySAP ERPSales order handling basedon characteristicsBatch TraceabilityAlternative Product Unit of Measure…

mySAP PLMNew Product Development & Introduction…

SAP for Mill Products

SAP xAppsSAP xApps Emission Management …


Customer Benefits with mySAP ERP 2005

ViabilityIndustry Solutions are an integral part of SAP’s strategic solution mySAP ERP

Timely AvailabilityIndustry Solutions are available with every release without delay

Secure Maintenance PathIndustry Solutions are part of the 5-1-2 maintenance strategy

Solution EnrichmentIndustry Solutions can be enriched by generic functions from other industries

Switch framework



IBU Mill Products



SAP xApps Certified

SAP xApps SAP xApps CertifiedCertified

Powered by SAPNetWeaver

Certified

Powered by SAPPowered by SAPNetWeaverNetWeaver

CertifiedCertified

Certified for SAP NetWeaverSAP Certified Integration

Certified for SAP NetWeaverCertified for SAP NetWeaverSAP Certified IntegrationSAP Certified Integration

3 Levels of Engagement for ISVs*

Incr

easi

ng B

enef

its Partnership

Incr

easi

ng C

omm

itmen

ts

* ISV = Independent Software Vendor


Powered By SAP NetWeaver Certification

EAI / middleware / adaptersNW-XI-AFOption 3XI Adapters

ABAP applicationsABAP + EP-BPOption 4ABAP Add-ons with Enterprise Portal integration

Applicable toTechnical CertificationsDescription

Option 5 – plannedPackaged Composite Applications

Option 2XI Content and Enterprise Portal Business Package

Option 1J2EE Deployment and Enterprise Portal Business Package

Composite applicationsTo be rolled out

.NET or other non-J2EE applications, J2EE

applications only together with Option 1

NW-XI-CNT + EP-BP

J2EE ApplicationsJ2EE-DEP + EP-BP

ISVs can work with the SAP Integration and Certification Center to:Find the most suitable integration scenario for their productGet access to SAP test systemsHave their interface software tested and certified by SAP


SAP and Independent Software Vendors (ISVs)

Current SituationCustomers run SAP and 3rd party (ISV) software separatelyIntegration exists more as a technical solution (interfaces)Customers handle SAP and ISVs as separate partners

Expectation ChangeCustomers want to have seamless integrated processes, not technicalintegration onlyOne solution out of one hand (if possible)

SAP’s AnswerWorking closer together with ISVsDesigning end-to-end processes across (former) SAP/ISV boundariesUsing NetWeaver as reliable platform for business & technical integrationOffer certification / branding (powered by SAP NetWeaver, xAPP, …)

Customer ValueOne solution by design with better capabilities and lower TCO


Benefits of an SAP & Partner Joint Solution

For CustomersOne comprehensive best practices industry solution instead of connected singular solutions Solution provides proven business processes and technical integrationLower TCO due to the use of SAP NetWeaver as integration platform and one solution by design

For PartnersEnhance reach to customersBetter solution sustainability on the long run due to NetWeaver platformJoint solution offering provide competitive advantage

For SAPAddressing key industry requirements with comprehensive solutionDrive SAP NetWeaver and ESA strategyBetter alignment with partners via agreed positioning and messaging


Industry Value Networks (IVNs) to be announced

“A process to bring together micro-ecosystems of customers, partners and SAP focused on solving high value business needsanchored by SAP Netweaver as the common platform to enable collaborative innovation.”


Industry Value Networks: Adding Value for Customers

New innovative solutions

Create new solutions based on collective

innovation for a customer’s toughest business problems

Reduce TCO Lower the

integration, customization and ongoing

management costs of partner and SAP joint

landscapes 90.0

34.6 31.6

45.9 46.9 45.0 43.9

20.420.427.4

38.630.6

0

10

20

30

40

50

60

70

80

90

100

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

EastWestNorth

Business Intelligent applications

End-to-end solution

Provide customers with the option of an end-to-end solution

with precertified, preconfigured components

Single source of contact

Provide customers with the assurance of SAP sales and support for third-party solutions

IVN


The Beginning of The IBU Partner Activities

Forest & Paper IndustryCustomer required trim solutionDevelopment project with Greycon providing an open interface in APO and an end-to-end solution

Primary MetalsCustomer requirements regarding MES integrationIntegrated quantity based and piece based planning solutionScenario discussions with PSI-BT; Positioning of the “total solution”

PackagingWhite Space regarding overall functionalityPosition of Kiwiplan in the marketCooperation with AICOMP and Kiwiplan; White paper to describe solution

Cross IndustriesCustomers looking for advice how to integrate SAP and MESMES Integration White Paper


ISVs - PartnersPSI BT4ProductionQuintiqABB

ISVsSiemens

Metals SolutionSteelPlanner (former VAI / AI)

IBM (PDOS)SMS Demag

Broner Metals Solutions

Metals Industry – ISVs & Partners

In contact


Forest & Paper Industry – ISVs & Partners

ISVsGreycon

TietoEnatorABBAprisoSiemensOSiSoftKiwiplan

Honeywell

Software partner



IBU Mill Products



Current Situation

Mill Products customer and especially primary metals producers are looking for a solution that covers

1.Master Planning2.Supply Chain Planning3.ATP/CTP (multi-level)

SAP Solutions currently require workarounds to cover 100% of the requirements in Master Planning and Supply Chain Planning.

Developments to close the gaps will be delivered withmySAP Business Suite 2007.

All developments are subject to change without notice and are no commitment at this time


Supply Chain Planning Enhanced Solutions for Mill Customers

Most Profitable Product Mix

SUPPLY NETWORK PLANNING OPTIMIZER

Proposal for Capacity Reservations

Proposal for Block Schedule

PRODUCTION PLANNINGDETAILED SCHEDULING

Capacity Reservations

Pegging Alternatives

Capable-To-Promise

CTP Enhancements

SNP Enhancements

Capacity Reservation Planning

CTP Enhancements

SNP Enhancements



Capacity Reservation - Business Requirements

The Customer wants reliable delivery date promises.

The Sales representative wants accurate information about the capability to deliver products, and needs a method to reserve capacity for his/her customers.

Sales management will, based on an assessment of the market situation, determine for which customer requests orders should be accepted.

Production management states available capacity per time bucket, and is responsible for the delivery accuracy once orders are taken.

Goals

Guarantee most profitable capacity utilization

Improving production lead times


Example

Reserve hot rolling for 3 customer groups

Capacity Reservation - Planning


On bottleneck resources

Using descriptive characteristics

Profitability is input to fill descriptive characteristics

Capacity Reservation Levels

Fixed allocationCapacity allocation for

Products/product groupsSales hierarchyCustomersReplenishment…

0%20%40%60%80%

100%

Q1 Q2 Q3 Q4

Customer A

Customer B

Other Customers


0%20%40%60%80%

100%

Q1 Q2 Q3 Q4

Maintain Reservations on Resources

Plan allocations on resources on

each level(manually or proposed by

SNP)

Define characteristic combinations (consumption

group)

Maintain release date

Define characteristics

11

44

22

33


Capacity reservation maintenance – 3rd Level of descriptive Characteristics

3rd Level Descriptive Characteristic

Bucket Type

Select bucket and choose “Select”

Maintain capacity reservation at 3rd Level

Capacity Release Date

Conversion time to quantity unit

Consumption Group

Descriptive Characteristic

Value


Capacity Reservation – Consumption Rules

Capacity – ConsumptionManually override the reservationDefine on which level to check for of finite and infinite capacity reservation

Capacity – Unused ReservationsAvailable for other ordersDifferent time fences to releaseReport of unconsumed capacities to be used otherwise( e.g. stock orders)

ExampleCapacity reserved for customer ARelease date set to 1 weeks before production startsCustomer A does not order within given timeframe

Capacity is available for other customers, customer A looses reservation


Capacity Release

Unused reserved capacity will be available for other orders

Different time fences for capacity release

Time frames for customer and product substitutionCheck sequence of finite and infinite capacity reservation

Manually override the substitution

Report of capacities to be filled up

Rules for consumption of released capacityBy default On first come - first serve basis in terms of order entry dateAlternatively a BAdI can be used

Producing extra to orderIf capacity is not used produce on stock.

ExampleCapacity reservation release date set to 4 weeks before production starts

CTP Enhancements

SNP Enhancements



Supply Planning - Business Requirements

The Sales representative wants to prioritize orders with the highest profitability first.

Production management wants to optimize production (utilization, lot sizes, minimal costs).

Goals

Optimum product mixed needed for optimize profit margins

Sales has to be linked to production


Profit Maximization - Solution in Detail

What is the goal

Maximize profit by enabling sales to generate higher revenue

How to do

Plan and run production in accordance to most profitable products

How to implement

Higher revenue driving demand gets higher priorityModeled by using penaltiesNon delivery of high priority demands lead to high penalty costsPenalty value in APO retrieved from different strategies

Keep production costs lowBetter campaign setup (optimization of length and sequence)Give higher priority to demands with larger quantity


Most Profitable Product Mix Planning

SNP-Optimizer Enhancements

Considering cost group dependent penalty costs to prioritize demand from different customers

Considering customer dependent penalty costs for non-deliveries

Considering volume (quantity) dependent penalty costs for non-deliveries

Considering set-up costs for changing from one product to another

Others

Using descriptive characteristics to maintain penalty costs


Capacity Reservations in SNP

PP/DS

A check against capacity reservation is carried out in

Planning

Capable-To-Promise (CTP)

Enhancements:

Propose distribution of capacity reservations from resource load after SNP optimizer run

Capacity is assigned to customers, products or sales hierarchy … based on profit maximization

Display of capacity distribution to customers, products or sales hierarchy …

Download distribution to resource master data maintenance for a time interval


Block Planning support in SNP

Block Planning Definition as it is in PP/DS

Block Planning is the planning or pre-assignment of resource capacities for products with specific attributes, with the purpose of using the capacities more rationally.

Enhancements:

Propose blocks from resource load after SNP optimizer run

Propose characteristic requirements, start date and length for download to block maintenance

Download can be done for definable time interval

Optimal length and sequence of blocks regarding set-up costs, profits and existing requirements

Display blocks in SNP

t

Blocks

Demands

Shift schedules

CTP Enhancements

SNP Enhancements



Capable-to-Promise (ATP/CTP)

Handling three different types of check instructions

Check finished goods stock

Check finished goods stock and capacity

NEW: Check capacity only

First : Online ATP Check carried out by sales person

Result: Requested delivery date not possible => trigger workflow

Second : Interactive ATP Check carried out by planner

Sales person Planner

Online ATPCapacity only

InteractiveATP CheckWorkflowNO YES


CTP Process and Pegging Alternatives

Transfer of Control to Production PlannerOnly specified User IDs (production planner) should be capable of declaring what extent of receipts is free or what receipts can be assigned from one customer segment to another

Automatic proposal of pegging alternatives with the ability to interactively assign receipts to requirements (works also for multilevel production)

Interactive Process

Pegging Alternatives

Save Sales order

CheckCTP

interactive

Takesales order

List PeggingAlternatives

APO

ChangePegarea

AssignReceipts

ConfirmSales Order

ChangeSelection

Check CTPAgainstCapacity

ERP

Production PlannerSales Rep.


Interactive CTP and Pegging Alternatives

Interactive CTP Pegging AlternativesInteractive CTP check

Completely manual

Confirm partially against stock and planned receipts

Confirm different delivery times

Example: Confirm Cut to length: check cut stock, then the coil stock and finally constraint capacity check

scope of the check - period before requirement date; period after requirement date

Automatic proposal of receipt allocation with the ability to interactively assign receipts to order requirements

Receipt search based on characteristics

Search in other pegareas(product, location, acc. Assignment)

Substitutable products

Requirements of different customers belonging to different SLAs determine relevant receipts

Facilitate transfer postings

Benefits


Business Benefits for Customers

Customers will get an end-to-end solution for ALL key requirements

End-to-end planning and manufacturing solution covering all planning levels

Demand Planning / Profit analysisMaterial Mix OptimizationRough cut capacity planning Detailed Planning and SchedulingIntegration with ERP system for Sales, ATP, MM, etc.

APO Process will run integrated from DP -> SNP -> PP/DSForecasting can be related to production capabilitiesMaster planning cross plant possibleProduction Planning is linked to / based on Master Planning

Granularity of planning can be done accordingly with APO modules

Integrated planning possible over all time horizons

Customer can satisfy the two units of sales and production with one solution and has not to neglect one of them



IBU Mill Products



Project Charter

To extend Thought Leadership position in Flat Steel Industry by addressing Industry Requirements, and reducing implementation risk to ensure higher customer satisfaction


Business Case review – Some Guiding Principals

TCO reduction Blueprint savings relatively goodCustomer project implementation risks can be significantly reduced

Process coverage provides a guideline as to how to model processes easily and efficiently to cover all Flat Steel production operations.Keep it simple (standardize configuration and provide documentation for the same)Show end-to-end processes (covering “process-oriented” steel making to “discrete-oriented” rolling processes)Use “Flat Steel” terminologyStandardized BP deliverables – covering pre-configured process as well as documentationProcess coverage spans across ERP + SCM + MES solution landscape


Project Charter

To get the long term success in the flat steel industry, we must build up a joint

expert team to work out the implementation template.

Facility Landscapes

Production Models

Biz Process Models

BP Model BP Model BP Model BP Model

Identify characteristicsdefining different

production models


biz process models

Identify examples tobe modeled in the BP

Facility Landscapes

Production Models

Biz Process Models

BP Model BP Model BP Model BP Model


production models


biz process models

Identify examples tobe modeled in the BP


Project Team

Internal parties involved in the project:SAP China including the Industry Group II and SAP Consulting ChinaSAP IBU Mill ProductsSAP LabsSAP Germany ConsultingSAP Japan (will adapt/translate Best Practices to Japan)

Selected Partners:PSI-BTIDS Scheer

Pilot Projects (depend on the co-operation from the partners and customers)

Handan SteelTaiyuan Steel (stainless plate, carbon plate) (mySAP ERP+PSI)Maanshan (CSP plate) (mySAP ERP + customized MES)


Scope

IN scopeProduct: Flat Products (Slabs, Plates, Coils, Sheets etc)Production Processes: steel making - continuous casting- hot rolling- cold rolling - finishingFunctional modules:

mySAP ERP(DIMP): SD,MM,PP,QM,FI,COmySAP SCM: DP,SNP,GATP, PP/DSSeamless integration with MES system

Special business process:Inter-company business is involved because more than one companies in production processes

Standard SAP BP deliverables i.e. develop the solution based on China Baseline solution

OUT of scopeProduct: Long Products (eg bar, wire, tube, section steel etc).Production Processes: Iron making, Tube mill etc.Special business processes:

Legal Consolidation is not covered.


Deliverables

SAP Best Practices for Steel Industry 1.500Documentation CD delivery with companion pre-configuration CD

Scenario process and screnario overviewScenario Installation guides Building Block Installation / Configuration guides

Rollout workshops

Interest from Brazilian Steel Companies? Please contact [email protected] or

[email protected] Updated website, containing downloads, tips, tricks and all you need to know about the SAP Best PracticesPlanned availability April 2006



IBU Mill Products

SAP’s Partner Strategy with Mill FocusQuestion ?



IBU Mill Products

SAP’s Partner Strategy with Mill FocusThank you for your

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No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.Microsoft, Windows, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, and Informix are trademarks or registered trademarks of IBM Corporation.Oracle is a registered trademark of Oracle Corporation.UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc.HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C®, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc.JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. MaxDB is a trademark of MySQL AB, Sweden.SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

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2 - SAP FORUM 2006 Mill Products