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Digital Manufacturing & Operations
Mohammad Kawasmi
Trends and Challenges in Manufacturing
Operations
Digital Transformation and the Internet of Things
» Enable a step-change in productivity
» Reimagining new business models and processes
» Changing how people will work
» Manage and mitigate risk
Productivity improvementse.g. lower maintenance costs
(up to 60%), or lower capital
appropriations (25%)
Business Value Benchmarks
New business models resulting
in higher net promoter scores that
deliver 15%-25% faster revenue
growth than the industry average
People process optimization leading 10 to 30% higher
productivity in the form of
higher outputs and lower costs
Lower risks e.g. better worker
safety or lower claims payout
(5-10%) in insurance industry
Source: IDC White Paper, sponsored by SAP, The Future Services Sector:
Continuous Delivery for Competitive Advantage, 2017
45© 20187 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Internet of Things as a Key Driver of Digital Transformation
Business Megatrends
Consumerization
Product personalization
Consumer experience
Sharing economy
Fast demand cycles
Digitization
Real-time visibility
Data-driven business models
Everything-as-a-service
Circular economy
Networks
Distributed manufacturing
Logistic & Manufacturing networks
Agile supplier networks
Smart Contracts
Technology Trends
Cloud scalability,
elasticity, availability
Machine learning,
Artificial intelligence
Ubiquitous connectivity,
Edge computing
In-Memory computing,
Big Data
Mobile &
conversational
Blockchain &
smart agents
Sensors built in /
intelligent things
Autonomous systems
& robotics
4© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Global Manufacturing TrendsTransformation of business models and processes
Manufacturing Insights
3D Visualizations
Yesterday
Mass Production
Outsourced manufacturing
Offshoring
Fixed production lines
Standard products
Manual processes
Hierarchical decision process
Plant Based siloed information
Deterministic models
Paper based work instructions
Capital Intensive Manufacturing models
Analog products
Today
Mass customization
Distributed manufacturing networks
Nearshoring
Cyber physical systems
Individualized products
Fully automated processes
Decentralized flexible decision process
Global transparency
Predictive models
Smart 3D work instructions
Service based manufacturing models
Smart Products
5© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
48© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
More Challenges to Manufacturing Today…
Modular Assembly
» Assembly Line replaced by
Cellular Manufacturing
» New organizational
structures require ad-hoc
decisions
» Increasing Interoperability
AI / Machine Learning
» Insight to Automation
(immediate action)
» Pattern Recognition
» Autonomous Systems, Edge
Processing
Cyber-Security
» Increasing Interoperability =
Increasing Vulnerability
» Manage Complexity
Source: http://blog.audi.de/2016/11/23/modulare-montage-statt-fliessband
AI : Artificial Intelligence
49© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Industry 4.0 – The Fourth Industrial Revolution
• Interoperability
• Information Transparency
• Technical Assistance
• Decentralization of Decisions
Design Principles
Major shifts in customer demands and manufacturing capabilities are accelerating
business transformation with Industry 4.0
Industry 4.0 is the current
trend of automation and data
exchange in manufacturing
technologies. It includes
cyber-physical systems, the
Internet of things and cloud
computing. Industry 4.0
creates what has been called
a "smart factory".
What is Industry 4.0 AboutExamples of Industry 4.0 requirements
8© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Smart Factory Operations
9© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Factory Operational Analytics
Industry 4.0 requirements have different purposes
Digital Supply Chain Overview & Strategy
The Intelligent Digital Supply Chain of One, Powered by SAP Leonardo
Digital
ProductDigital
Assets
Digital
Logistics
Digital
Business
Planning
Digital
Manufacturing
Internet of Things
Big Data
Blockchain
Analytics
Machine Learning
Plan and Deliver to the
Customer Segment of
ONE
Design and Maintain the Product of ONE
Manufacture the Lot Size of ONE
Analyze and Manage the
Supply Chain of ONE
Powered by Leonardo
SAP Cloud Platform
Multi-Cloud Infrastructure
Microservices Open APIs Flexile Runtimes Integration
SAP Data Center Google Cloud Platform Mircrosoft Azure Amazon
Digital Twins
Network of
11© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP S/4HANA MARKETING AND
COMMERCE
SAP S/4HANA HUMAN RESOURCES SAP S/4HANA MANUFACTURING SAP S/4HANA SUPPLY CHAIN
SAP S/4HANA SALES
SAP S/4HANA FINANCE
SAP S/4HANA SERVICE
SAP S/4HANA SOURCING &
PROCUREMENT
SAP S/4HANA ASSET MANAGEMENT
Digital Core S/4HANA EnterpriseManagement
SAP S/4HANA RESEARCH &
DEVELOPMENT
Products
Suite
Products
Suite
Cloud for
Service
Cloud for Marketing
INDUSTRIESCloud for
Sales
SAP S/4HANA SuiteIntroducing the next generation core and lines of business solutions for the digital economy
Streamlined
Procure to Pay
Accelerated Plan
to Product
Optimized
Order to Cash
Enhanced
Request to
Service
HR
ConnectivityCore Finance
12© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Leonardo Innovation Portfolio
13© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Digital Manufacturing & Operations
Strategy / Portfolio Overview
Trends Impacting Digital ManufacturingInternet of Things and Industry 4.0
SAP Digital Manufacturing runs industrial IoT with Industry 4.0 scenarios
Internet of Things
Internal INDUSTRIALscenario External scenario
SCADA / HMI
Machine Layer
MES
ERP (PLM, PP) » All industries
» All thingsand
devices
» Ubiquitous
» Personalized
SMART Industrial
THINGS & DEVICES
Industrie 4.0
» Manufacturing
industries
» OT-IT convergence
» Systems, things,
and devices on the
shop floor
15© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
How to accelerate and grow productivity and profitability in complex business
environment? How to run business and production seamlessly integrated?
▪ SIMPLIFY
▪ HARMONIZE
▪ REDUCE
Need for SMART SIMPLIFICATION
(1) Top Floor to Shop Floor
(2) Customer to Operations
Accelerate the Enterprise SuccessHigher Productivity due to Simplification
SAP Digital
Manufacturing
SAP PCo to
Automation
SAP ERP
SAP IBP
Consumer/customer Business Networks
16© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
+++ CONTINUOUS INNOVATION +++
SAP Manufacturing Execution SuiteInnovation strategy
Includes SAP Manufacturing Execution,
SAP Manufacturing Intelligence and
Integration, and SAP Plant Connectivity
SAP Distributed
Manufacturing
(Cloud)
SAP Digital
Manufacturing Insights (Cloud)
SAP S/HANA
(on premise)
Manufacturing Engineering **
Manufacturing Planning
Side-by-side with
S/4HANA innovations
Rapid innovation through
side-by-side extensions
in the cloud
SAP MANUFACTURING
EXECUTION SUITE(On-premise)
SAP MII SAP ME SAP PCo
SAP MANUFACTURING
EXECUTION SUITE(On-premise)
17© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP MII SAP ME SAP PCo
SAP Digital Manufacturing Industrial IoT
» Multiple vendors
» Multiple machines
Connected Manufacturing
SAP ME SAP QIM
SAP MII SAPCAMS
SAP PCo SAP OEE
Digital Manufacturing
SAP ME
SAP MII
SAP PCo
Asset Intelligence
Network
Distributed Manufacturing
Network
OEM Cloud
(Mindsphere)
S/4 HANA
Enterprise Management
» Business Context
» OEE, Energy Management
Digital Manufacturing
Insights
18© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Machine
Layer
MES
ERP (PLM, PP)
SCADA / HMI
SAP Digital Manufacturing Solutions and Factory AutomationAutomation Pyramid in conjunction with IoT Cloud approach
IO-LINK
GREEN FIELD BROWN FIELD
SAP Manufacturing
Execution Suite
SAP ERP
SAP Cloud
Platform
Asset
Intelligence
Network
SM
AR
T
BR
IDG
E
SAP Leonardo
EdgeDevice
Operator
Supplier
Manufacturer
DIGITAL
TWIN
Partner
Applications
SAP PCo
DATA
DATA
GATEWAY
Digital Manufacturing
Insights
19© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Digital Manufacturing ArchitectureThe Digital Plant in the Extended Supply Chain
DESIGN PLAN RESPOND PRODUCE DELIVER OPERATE
ERP
MES(ME & MII)
PCo
PLC(Machine)
MONITOR
» Sensor detects material carrier
» Requests control parameters from ME
» Production plan
» Bill of materials (BoM)
» variant management
» production steps
» Production details management
» Detailed and flexible
» production step routing
» Shop floor controls for eachstep
» Mapping of ME production details
to PLC control parameters (recipe)
» Serial Numbers
» Quality results per lot
» Order confirmation
» Inventory update, Equipment usage
» Log parametric data
» tolerance checks
» Return „conformance“ or „non-conformance“ decisions
» Mapping of ME production details toPLC control
parameters (recipe)
» Machine reports completion and requests nextoperation
Connecto
rs
20© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Digital Manufacturing SolutionsThe foundation for Industry 4.0 in the Cloud and On-premise
Digital
Manufacturing
Execution
Production
Engineering &
Operations
Digital Manufacturing Suite S/4 HANA
(*New Cloud) (Cloud)(Cloud) (On Premise)
Manufacturing
Integration &
Intelligence
Manufacturing
Planning &
Scheduling
Digital
Manufacturing
Insights
Predictive
Quality
Distributed
Manufacturing
Environmental
Health &
Safety
(On Premise)
21© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Digital Manufacturing Cloud SolutionsThe foundation for Industry 4.0 in the Cloud and On-premise
2018 Digital Manufacturing Cloud
(Q3 2017)
Digital
Manufacturing
Insights
(Q2 2018)
Predictive
Quality
(Q2 2017)
Distributed
Manufacturing
Connected
Worker
Safety
(Q2 2018)
22© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Use Case: Digital Twin
Ideas
Geometries
Stress Simulation
Cost
Designs
The Physical World
ENGINEERING
The Digital World
ASDESIGNED ASMAINTAINED
Performance
Issues
Stability
Closed Loop Engineering
Cost
OPERATION
?
. ..
DECOMMISSION
Production data
Quality Fingerprint
. ..
PRODUCTION
ASBUILT
Ramp Up
. ..
SHIP
ASDELIVERED
23© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP S/4HANA: Manufacturing Engineering & Operationsis a solution capability extending the S/4HANA digital core to bridge the gap between engineering and manufacturing byfacilitating
digital collaboration of manufacturing master data, design structures handovers, process planning and intelligent change
management.
.
▪ Bridge the gap between product designand
manufacturing
▪ Hand over an engineering bill of material to a
manufacturing bill of material
▪ Define routings and component allocationsand
author work instructions
▪ Manage changes coming from engineeringor
manufacturing
▪ Analyze change impact and support change
implementation
▪ 3D visual support for BOM items and animated work
instructions
Key Capabilities Product
Engineering
Manufacturing
engineering
Manufacturing
Plant
24© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
S/4HANA: Manufacturing Planning & Scheduling
Key Capabilities
Manufacturing Planning Cockpit▪ Comprehensive planning environment comprising
▪ Material Requirements Planning
▪ Production Planning
▪ Capacity Planning
Advanced planning capabilities▪ Heuristics and optimizers for finite planning &scheduling
▪ Industry specific planning logic
(e.g. block planning, model mix planning)
▪ Decision support
▪ Simulation and what-if analysis
Comprehensive multi-level planning runs
▪ Covering all kinds of materials and planning
methods in one run▪ Leveraging new planning approaches
e.g. Demand-driven replenishment: stock-level management
25© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Plant Connectivity (PCo)
enables the exchange of data between Information Technology (SAP Systems) and Operational Technology (logiccontrollers,
devices, plant historian systems) in a manufacturingenvironment.
▪ Bi-Directional data exchange
▪ High-performance Interoperability
▪ Machine protocol conversion and secure
communication with SAP systems
▪ Configurable process sequences; orchestrationof
independent machine units
▪ OPC UA client and flexible WebService invocation
(REST, SOAP, OData)
▪ Web Socket Sever, Web Server, OPC UAServer;
MQTT source and destination
▪ Bundling and buffering of notifications; notification
delivery retry; rule framework
▪ Remote configuration of PCo from SAP MII
▪ Open for customer specific enhancements
(proprietary protocols and complex processing
logic)
Key Capabilities
SAP Manufacturing Integration &
IntelligenceSAP Manufacturing Execution
Devices and EquipmentShop Floor
DCS
&
SCADA
PLC
SAP Plant Connectivity
Supported protocols:
❖ RFC, SOAP-WS, ABAP Push Channels (WebSocket), ODBC,ODATA,REST
❖ OPC UA, MQTT, OPC DA, OPC HDA, OPC A&E, Citect, IP21, Osisoft PI (2), Proficy Historian, File-Monitor (2)
ODBC, OLE DB, Socket, Modbus
❖ SDK for proprietary, specific agents (e.g. ifm Linerecorder, UDP, RFC1006, Euromap 6x, Atlas Copco Open
Protocol and multiple other project specific implementations, Kafka)
Plant DB
&
Historians
Devices
&
Sensors
LIMS …
SAP ERP or S/4HANA
26© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Manufacturing Integration and Intelligence (MII)enables you to integrate your plant and enterprise systems and display integrated data to your employees. You can use SAP MII to
view, measure, and compare the performance of plants and assets with different automation system infrastructures. Connect toyour
shop floor equipment using SAP Plant Connectivity.
▪ Universal: Extensible manufacturing platform
allowing rapid adaption to any manufacturing
process. Applicable to all manufacturingindustries
and utilities
▪ Integration: Provide interoperability (in)between
shop floor solutions and enterpriseERP
▪ Intelligence: Visualize data using plant information
hierarchy from “corporate” ERP and design own
dashboards
▪ Orchestration via business logic to enable
customer-specific processes for planning,
execution, maintenance and quality
▪ Plant Performance Management with out-of-the-
box content on OEE management. Capabilities to
build and visualize customer specific KPIs withKPI
framework
Key Capabilities
KPI & Alert
Management
Composition &
Visualization
Energy
Monitoring
Overall
Equipment
Effectiveness
Out-of-the-box
Integration
SAP MII
SAP ERP or S/4HANATop Floor
Business
Intelligence
Process
Orchestration
SAP Plant Connectivity
Integration
Devices and EquipmentShop Floor
DCS
&
SCADA
PLC
Plant DB
&
Historians
Devices
&
Sensors
LIMS …
27© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Manufacturing Execution (ME)
a powerful, enterprise-level, scalable, manufacturing business solution that enables global discrete manufacturers to
manage and control manufacturing and shop floor operations and realize Industry 4.0 scenarios. It provides a multi-faceted set of
features that integrates business systems to the shop floor, allowing for complete componentand material-level visibility for single
and global installations.
▪ Industry 4.0 enabled shop floor executionsolution
featuring lot size one production and paperless
production
▪ Tracking & Tracing / Genealogy
▪ Non-conformance management including in-line
sampling, visual test and repair
▪ Process interlocking and zero failure
▪ Role-specific access and personalizeddashboards
for operators with browser-based UI
▪ Easy integration “out of the box” to SAP ERPand
via SAP Plant Connectivity to the shop floor
Key Capabilities Industry 4.0 A thing is born Multi-plant
28© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Digital Manufacturing Insights
is a centralized, cloud-based, data-driven manufacturing performance management solution which enables key stakeholders ofmanufacturing
operations to take tactical and strategic decisions to achieve best-in-class manufacturing performance.
▪ Analyze manufacturing performance within and
across manufacturing plants of an enterprise
▪ Data acquisition from multiple disparate
manufacturing application and harmonizationof
manufacturing data
▪ Pre-configured industry standard manufacturing Key
Performance Indicators (KPIs) and flexibility to
extend or create new KPIs
▪ Advanced algorithms for root cause analysis of
quality defects, pattern detection and prescriptive
suggestions for continuous manufacturing
performance improvement
Key Capabilities Global Analytics Multi-plant
29© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
provides a cloud-based collaborative platform that connects customers with (additive) manufacturing service providers, e.g.,
suppliers of 3D printing services, material providers, original equipment manufacturers (OEM), and technical certificationcompanies.
▪ Collaboration between customers and service
providers on design optimization, quality and pricing
▪ Technical and economical part assessmentby
customers
▪ Integration with S/4HANA Cloud for sourcingand
procurement
▪ Service offering advertisement by service providers
▪ Extensibility to enable scenarios specific to
domains, customers or service providers.
Key Capabilities Customer SAP Distributed
Manufacturing
Service Bureaus
SAP Distributed Manufacturing
Back 30© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
is a solution dedicated to help manufacturers gain valuable insights into the quality aspects of their manufacturing processes, streamline
quality management and apply predictive algorithms to reduce losses incurred due to quality issues and recommend corrective actions
▪ Diverse quality and contextual data acquisition
▪ Quality key performance indicator (KPI) trend&
correlation
▪ Intelligent quality management and qualityprocess
automation
▪ ‘Cost of Quality’ model builder with predictive
analytics capabilities
▪ Deep dive into quality defect analysis with digital
twins
Key Capabilities Predictive Quality
Improvements
Deep Dive
* Planned Innovation
SAP Predictive Quality*
Back 31© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP EHS Solution Portfolio
Incident
Management
Safety
Observations
EHS Incident Management
EHS Health and Safety
EHS Environment Management
Management of Change
Maintenance Safety
Operational Risk
Assessment
Occupational
HealthIndustrial Hygiene
and Sampling
Chemical
ManagementChemical Approval
Emissions
Management
Regulatory and
Permit Compliance
Management of
Change
Permit to WorkWork
Clearance/LOTO
EHS Audit
Management
Rea
l Tim
e E
HS
Rep
ortin
g a
nd
An
aly
tics
Actio
n T
rac
kin
g a
nd
Ta
sk
Ma
nag
em
en
t
32© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
SAP Connected Worker Safety – Solution Approach
Ensure Worker
SafetyBusiness Goal
Business Need
Functionality
Demonstrate
complianceat
all times
Improve work
efficiency and
loweroperating
costs
Better Decision
making
Monitorworkers
for real time
awareness
33© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Monitor conditions
against regulatory
and other boundaries
Ability to link the
informationflowing
from the worker to
enterprise data for
better insightProactively Manage
Worker Fatigue and
other hazard inducers
React immediately to a hazardous situation or
incident
Be able to use
aggregated
monitoring data to
make better
decisions
Robust
Communication
protocols for rugged
conditions and low
bandwidth
Worker geofencing Deviation / rule
management
Wearable monitoring
NotificationsAnalytics
Environment / Exposure monitoring Device Management
IH Statistics
calculationsDevice Interfaces
Provide worker and
coworkers continuously
relevant information
based on a changing
work environment
SAP Digital Manufacturing Success Stories Examples
99.5%First pass yield
3%Manufacturing productivity
improvement
100%Track and Trace
10%Increase in productivity
75%Reduction in manual
execution & data capturing
7%Reduction manufacturing costs
19%Increase in net margin
21days to 6hoursCycle time
65% to 80%Increase in OEE
20%Reduction in production breakdown
6.5%Increase in final product quality
More than 2,000 customers running successful Industry 4.0 projects with SAP Digital Manufacturing
3%Decrease in scrap (materialwaste)
15%Faster production lead time
50%Fewer stock corrections
34© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTERNAL
Value Proposition
78NAL© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ INTER
Key Opportunities Areas in Manufacturing
2. Energy
4. Mfg Planning
6. AssetAvailability and Efficiency
1. Raw Materials
Reduce wasted energy in mechanical and electrical systems
Reduce energy loss due to improper PM frequencies in air/steam systems
Maximize use of all available energy throughout plant
Increase asset uptime through improved maint. planning and scheduling
Improved design and life cycle management of the assets
Increased effectiveness of preventive and predictive maintenance techniques
Manage raw material variability in line with customer expectations
Increased visibility results in right material – right place – right time
Reduce spend on expedited production, labor and freight costs
Key Value Drivers
Improve Cost
Structure
8. Quality
ManageAsset
Performance
Drive Compliance Decreased variability increases product quality and customer satisfaction
Proactive problem and variance detection and management of quality issues
Enhanced quality compliance supporting continuous quality improvement
Key Strategic Goals
Key Areas ofOpportunity
7. Compliance
Reduced number of EH&S incidents and associated costs
Lower overall regulatory compliance costs with increased labor productivity
Enhanced management of hazardous goods, disposal, waste, and emissions
Increase Operations
Efficiency
3. MaintenanceMaterials & Labor
Reduced maintenance labor cost from improved scheduling and execution
Enhanced knowledge management, skills sharing and training effectiveness
Reduced MRO inventory levels and increased turns, supplier performance
Enhanced process visibility supports early detection of potential issues
Increased efficiency from optimal allocation and tracking of labor and resources
Detect and resolve manufacturing exceptions minimizing rework and overtime
5. Mfg Execution
Increased customer sat. and retention due to accurate order delivery dates
Decreased inventory and higher asset utilization due to optimal planning
Enhanced ability to sense and respond to schedule and order changes
Contact information:
Mohammad Kawasmi
Digital Supply Chain Executive
Thank you.