SAP IN CEMENT INDUSTRY

5/24/2018 SAP IN CEMENT INDUSTRY

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SAP in Cement Industry

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Cement Industry Process

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Cement is a fine powder which sets after a few hours whenmixed with water, and then hardens in a few days into a solid,strong material.

Cement is a hydraulic binder, i.e. it hardens when water isadded.

There are 27 types of common cement which can be groupedinto 5 general categories and 3 strength classes namely :

Ordinary,

High

Very high.

In addition, some special cements exist like sulphate resistingcement, low heat cement and calcium aluminate cement.

What Is Cement?

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Below are six major processes followed from rawmaterial procurement to delivery which are performed atcement Industry :

Cement - Making Processes

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Raw Material Extraction Raw Material Preparation

Raw meal preparation

Clinker Production

Cement Grinding

Packing & Shipping


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Raw Material Extraction Mining for uncrushable limestone

Raw Material Preparation

Crushing the uncrushed limestone

Raw meal preparation

Additive like clay & sand are added to crushed limestone

Clinker Production

Raw meal is heated in kiln and get the clinker, small rock or pebblelike substances.

Cement Grinding

Clinker along with gypsum is grinded to make cement.

Packing & Shipping

Cement is either packed in 50 kg bags or in jumbo boxes or in trucksor ships as per facility in factor.

Processes overview

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Cement Industry Workflow


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Applying SAP in cement Industry

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In Cement Industry

SalesSupply chain

Demand Planning

Supply network

planning

Shipping &Transport

Management

Global availability check

Manufacturingintegration

Production

planning

Quality

management

Strategic & operationalprocurementFinancials

Performance

Management

Enterprise asset

management

Maintenance

Cost budgeting

Project System

Environment Health &

Safety solution

Emissions Management

Human Resources

Inventory Management


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Optimized organization & process landscape

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Solution for cement industry

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Central Processes

> Strategy management

> Analytics

> Compliance solutions

> Business process

modeling

> Multi-language

capabilities

> Solution manager

Localized services

> Customer relationship

management

> Transportation

planning

> Price and margin

management> Supply chain planning

Plant operations

> Production execution

> Shop floor visibility

> Quality management

> Inventory

management

> Maintenance planning


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Solution map

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SAP


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Application solution Architecture



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Customer service : Sales order management

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Industry Challenges Low sales efficiency with order fulfillment errors generated by a lack

of insight into purchasing, production and inventory information.

Long sales order lead times and slow response times to customerqueries on order status due to manual processes and siloed info.

Low customer & product profitability due to lack of available

information, analysis & decision-making support tools.

Business Benefits with SAP Improved customer service thanks to comprehensive capabilities

that enable sales to deliver accurate product specification andusage, price, quantity and delivery information to customers.

Reduced order processing costs through streamlined, automatedprocesses.

Increased customer profitability with comprehensive sales quotation

and order analysis.

Assuring high customer service levels is critical for Building Materials companies to improve customer retention and

loyalty. Sales can easily, quickly and accurately, determine pricing and costing, check production resources, as well astrack and manage quotations, contracts, deliveries & invoices reducing sales cycle time & ultimately increasing

revenue. SAP provides a comprehensive sales order management solution to efficiently process quotations and sales

orders.


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Business challenge for concrete companies

Inefficient sales order processing Sales order processing done at each concrete plant

Lack of standardized sales order processing

No optimization of production and transport across plants

Solution

Centralized order entry at call center Automatic credit management

Checks available production capacity of plants

Checks availability of transport vehicles

Incoming orders automatically distributed to plants

Business benefits

Less personnel required

Can operate 24 hours per day, if necessary

Improved accuracy of order information

Reduced transport cost

SAP Sales Order Entry via a Call Center

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Supply Chain : Demand & supply planning

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Consolidated, synchronized supply and demand planning helps Building Materials manufacturers enable andimprove forecasting in a commoditized product portfolio, as well as supply chain visibility and efficiency. SAPBusiness All-in-one provides a flexible, powerful solution for integrated annual operating, sales & operations, as wellas materials requirements planning.

Industry Challenges Inaccurate forecasting due to an unstructured planning process

with distributed data across sales and business units.

Inefficient portfolio management through poor visibility into global

demand and supply status.

Lost sales and high inventory levels through siloed sales,production and inventory planning processes.

Business Benefits with SAP

Improved customer service levels through accurate,consolidated sales and revenue plans, and better supply chain

visibility to enable improved customer responsiveness and orderfulfillment.

Optimized portfolio management with better insight into product andcustomer profitability, as well as the demand and supply situation.

Better supply chain efficiency with asset optimization and reducedinventories through synchronized sales & revenue planning withproduction planning.


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Structure Demand Information by freely definable characteristics customer, Product,

Sales Office, Region, Location, etc.

Display Demand Information by freely definable Key figures: Last years Sales,Committed Contract Volume, Marketers Forecast, Customer Forecast, etc.

Different options for Data Sources Direct manual input by user, Entry via Internet(customers), Upload from data warehouse, Calculated data (i.e. multiply row last yearssales by 5 %)

Aggregation and Disaggregation of Demand Data

Different Views on the same data based on user role

Flexible time buckets to enable strategic and tactical planning

Statistical Forecasting methods (i.e. seasonal trend models)

Alert and Macro Functions

Flexible Reporting Options

Functions of demand Planning

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Anticipation

of FutureDemand

Planners Knowledge

Task-specific planning tools

> Flexible views> Graphics> Promotional planning> Life cycle management> Accuracy reporting

Collaborative forecasts> Order & shipment actuals& history> Cost> POS data> Nielsen / IRI data> etc.

Statistical Methods

Multi-model approach

> Average models> Exponential smoothing> Causal factors> Trend dampening> Model combination> Pick best

Demand Planning

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Solution overview

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Cost minimization - Profit maximization

Supply Network Planning optimization

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Forecast Sales

Order

Flexible Constraint Definition

Capacities

Material availability

Market constraints

Costs of opportunity

SourcingProduct mix

Production &

procurement plan

Inventory

strategies


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Optimization profile

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Selection of most suitableproduction plant

Optimization of production

costs, transportation costs,and storage costs

Mixed integer linear

programming / meta-heuristics

Feasible plans


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Shipping & Transportation management



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Transportation planning & Execution capabilities



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Checking Product Availability at time of Sales Ordercreations

Simulating Global Supply Chain based on projected inventories inthe future

Consider product substitution based on predefined rules

Consider substitution of supplying location based on predefinedrules

Re-simulate Product Availability Check at any critical pointin time

Re-consider priorities based on predefined rules Enable Sales Managers to immediately check on delivery

capabilities


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Manufacturing : Seamless Integration



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Production planning



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Operational compliance : Quality Management

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Efficient quality management helps Building Materials companies better manage and assure product quality,

monitor & improve quality standards, as well as document quality compliance for subsequent audits. The SAP

solution delivers a robust quality management solution to support high quality sourcing and improved vendor

management.

Industry Challenges Quality issues cause lower quality end products lowering operating margins

and customer satisfaction.

Poor tracking of supplier material quality results in high cost return to vendor

processing and delayed time-to-customer.

Complex tracking of materials and quality documentation for regulatory

compliance.

Business Benefits with SAP Increased customer satisfaction through efficient quality management processes

to assure high product quality.

Improved supplier selection and management with vendor evaluation process.

Lower operating costs and increased product profitability support by quality

inspection and monitoring throughout the product life cycle to reduce product

errors.

Easier regulatory compliance with quality documentation & auditability ofinformation & actions across the supply chain.


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Sourcing & Procurement Strategic & Operational procurement

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Maximize the return on relationships through all suppliers within the supply chainfrom strategic sourcing to

operational procurement. SAP enables Building Materials Companies in reducing procurement cost & time of

inventory replenishment. SAP delivers a complete, integrated solution for the entire procurement cycle.

Industry Challenges

Poor vendor selection results in long lead times, over-priced

materials, and low material quality triggering high cost returns.

Inefficient, manual and paper-based procurement processes.


Optimized vendor selection with vendor evaluation vendor

pricing, service, lead-time & performance comparison/evaluation

to better negotiate contract terms, reduce material costs, lead

times and returns.

Reduced operational costs with automated procurement tasks in

administration, production and transportation including purchase

requisition creation, invoice verification, payment processing etc.

Comprehensive visibility into the supply chain through integrated

processes for better inventory turnover, cycle times, and lower

receiving and material storage costs.


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Financials

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Building Materials companies need comprehensive, accurate enterprise visibility and strong financial management

support to (1) fulfill financial requirements, (2) enable profitable growth and (3) operational efficiency. SAP provides

the market-leading solution for accounting, financial reporting, and performance managementintegrating

financial management with business processes.

Industry Challenges Inefficient accounting and controlling processes with information

located across transaction and financial systems.

Inaccurate, incomplete cost and revenue data for portfolio, asset

and operations management. Different, country-specific financial accounting processes,

principles and regulations.


Efficient, automated accounting and controlling processes.

Complete and accurate data through seamless process

integration across operational areas of the company.

Enhanced company profitability analysis by market segment

(products, customer, orders, business units).

Automated calculation & comprehensive visibility & analysis of

project, asset and product costs throughout the life-cycle.

Easier multi-country financial reporting with, multi-currency and

asset & inventory valuation capabilities.


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Financial management


All SAP li i l l i d i


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All SAP applications are completely integrated intoaccounting



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Cost accounting



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Cost accounting Cost Center



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Process flow for cement plant



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Ease of further evolution



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Analytics and operations support

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Cement companies need a complete, integrated view on financial and operational targets and figures to (1) develop

realistic business plans as well as (2) monitor and support operational decision making. SAP provides tools to

generate a complete picture of Cement companies to control growth and operational excellence.

Industry Challenges Lack of visibility into financial and logistic key figures throughout

all company departments.

Inaccurate and incomplete statistical data base to link strategic

plans to operational performance.

Lack of analytic support to understand the profit drivers of

Materials business.


Single analytical platform for the whole enterprise in a cross-

functional and collaborative environment.

Support of integrated and realistic business planning and

monitoring of costs and revenue during execution.

Actual detailed operations reporting and support of operational

decision making in sales, production and procurement.

Integrated operational support of cross functions like quality

management, procurement and project management.


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Performance Management Sample Indicators



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Quality Control enables recording, tracking

and analysis of product and processcharacteristics to ensure quality compliance.

Key Benefits:

Supports automatic or manual triggered

inspection lots Integrated tightly with the complete supply

chain (e.g. inventory, batch, purchasing)

Enables statistical process control (SPC) tomonitor critical product and processcharacteristics in the manufacturing process

and allows instantaneous intervention

Documents product quality to achieveregulatory compliance

Includes integrated problem management

SAP Quality management Quality control

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Comprehensive inspection processing Goods receipt inspection

In-process control

Post-process control

Inspections at goods issue

Recurring inspections

Test equipment interfacing

Statistical process control (SPC) with integrated problemmanagement

Use as Enterprise LIMS

Results recording - mobile or Web-based

Functions integrated in logistics (e.g. inventorymanagement)

Quality Inspections

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Enterprise asset management



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EAM : Functional scope



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Facility & Asset management


Plant maintenance (PM) in SAP ERP on


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Plant maintenance (PM) in SAP ERP onbasis of EAM



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History Based Budgeting

Ad hoc Budgeting

Simulation

Location Based

Equipment Based

Tasks Based

Maintenance Cost budgeting

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Mobile asset management Functional overview



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Project Systems

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SAP EH&S offers comprehensive and complete businesssolution for environment, health and safety management!

Functional overview Product Safety

Hazardous Substance Management

Dangerous Goods Management

Industrial Hygiene and Safety

Waste Management Occupational Health

EH&S Analytics / EH&S Reporting

SAP Environment Health & Safety solution

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SAP EH&S occupational health


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SAP EH&S occupational health Medical service data

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SAP Emission management - Capabilities



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SAP Emission management


Sales


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In Cement Industry

SalesSupply chain

Demand Planning

Supply networkplanning

Shipping &Transport

Management


Manufacturingintegration

Productionplanning

Quality

management

Strategic & operational

procurementFinancials

Performance

Management

Enterprise asset

management

Maintenance

Cost budgeting

Project System

Environment Health &

Safety solution

Emissions Management

Human Resources

Inventory Management


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