Dave Hume, Executive Director, Lenovo CIO Project Office
Bill White, Seal Consulting
SAP Adaptive Manufacturing Summit
September 28th, 2006, Denver, CO
Lenovo: Manufacturing Excellence
leveraging Production Operations
in China
Data Integration Roadmap/Landscape
Summary and Recorded Simulation
Company Background and Challenges
Addressing the Business Challenges
SAP AG 2006, Title of Presentation / Speaker Name / 3
2
初创时的联想初创时的联想初创时的联想初创时的联想
Lenovo in 1984
� Founded by 11 researchers
� Initial investment: US$25K
Who Is Lenovo?
Lenovo Today
� 20,000+ employees
� Revenues: US$13 Bn
SAP AG 2006, Title of Presentation / Speaker Name / 4
1000 PC Patents filed in last 4 1000 PC Patents filed in last 4
yearsyears900 Lenovo engineers and scientists
800 former IBM research & development staff in Raleigh and the renowned ThinkPad Japan
Design Center
IBM IBM –– ThinkPad, ThinkPad, ThinkCentreThinkCentre, ,
ThinkVantage Technologies win ThinkVantage Technologies win
more awards than any other PC more awards than any other PC
company company
Lenovo: Intel Most Innovative Lenovo: Intel Most Innovative
PC Award from Intel 5 years PC Award from Intel 5 years
runningrunningPowerful R&D Capability Powerful R&D Capability
on both Computing and on both Computing and
CommunicationsCommunications
Founder of Founder of Personal ComputerPersonal Computer
Leading Innovation Leading Innovation in PC Industryin PC Industry
Deeply UnderstandingDeeply Understandingon both Consumer and on both Consumer and Commercial customerCommercial customer
Lenovo Innovation for Customer Value and Benefits
SAP AG 2006, Title of Presentation / Speaker Name / 5
Lenovo’s Challenges
Market Challenges
� Competitive Market
� Customer Satisfaction
� Product Innovation
� Supply Chain Velocity
� Customer TCO From Purchase to Disposal
Company Challenges
� Combined Company Dynamics (IBM / Lenovo)
� Total New Infrastructure Migration
� Factory / Business Expansion
� Supply Chain Assurance
� Internal Visibility to Operations
SAP AG 2006, Title of Presentation / Speaker Name / 6
Superior Performance – IT is the Key Enabler
Lenovo China
Lenovo International
One Lenovo
� Global Business Processes
� Central/Integrated IT Systems
� Central Planning and Control
� Dual Model
� Centralized Inventory Mgmt
� Real-time Data Visibility
� Flexibility to Adapt to Change
SAP AG 2006, Title of Presentation / Speaker Name / 7
China PC Revenue
Dell, 10%
Others, 33%
HP, 9%
Founder,
10%
Lenovo,
38%
Leveraging the Very Best of Lenovo China
Global PC Leadership
Building on the Model of Success
GOING GLOBAL ���� World-class Practice
� Estimated $ 250 MM company-wide savings
� Build an industry leading supply chain
- Reduce end-to-end Supply Chain Cost by 15%
- Compress Order Fulfillment lead time from 14 to 10 days
- Maintain low DOA level
� Targeted 1.1% corporate E/ R
� Pursuing new market opportunities
SAP AG 2006, Title of Presentation / Speaker Name / 8
Global Network: Foundation for Strategic Platform
China Regional Net
Sites
RTP
Americas Regional Net
Global Data CenterCommand Center
SitesSites
Sites
TBD
EMEA RegionalNet SitesSites
Sites
AP Regional Net SitesSites
Sites
SZN/HK
China Regional Net SitesSites
PEK
Global Backbone
Sites
SAP AG 2006, Title of Presentation / Speaker Name / 9
Worldwide Lenovo Manufacturing
Beijing, CHN
Shanghai,,,,CHN
Shenzhen,,,,CHN
Huiyang,,,,CHN
Beijing, CHNBeijing, CHN
ShanghaiShanghai,,,,,,,,CHNCHN
ShenzhenShenzhen,,,,,,,,CHNCHN
HuiyangHuiyang,,,,,,,,CHNCHN
Chengdu ,CHNChengdu ,CHN
Juarez & Monterrey,,,,MexicoJuarez & MonterreyJuarez & Monterrey,,,,,,,,MexicoMexico
RTP,,,,NCRTPRTP,,,,,,,,NCNC
BrazilBrazilBrazil
Tiburg,,,,NTLTiburgTiburg,,,,,,,,NTLNTL
DubaiDubai
Hungary & CzechHungary & CzechHungary & Czech
CM Plant
In-house Plant
DC
Pondi ,INDPondiPondi ,IND,IND
Bangalore ,INDBangalore ,INDBangalore ,IND
Toronto,,,,CATorontoToronto,,,,,,,,CACA
Miami, FLMiami, FLMiami, FL
Data Integration Roadmap / Landscape
Summary & Recorded Simulation
Addressing The Business Challenges
Company Background and Challenges
SAP AG 2006, Title of Presentation / Speaker Name / 11
The Business Challenge
Supply Chain Velocity
� Satisfying the Perfect Customer Order Requirement
Performance Measurements
� Key Performance Indicators (KPIs)
Management Visibility
� Decision Support (Near Real-Time)
SAP AG 2006, Title of Presentation / Speaker Name / 12
The Perfect Customer Order – With Manufacturing Visibility
Plant To BusinessVisibility – SAP xMII
End User Order
Production Control
mySAP
EndProduct
SAP AG 2006, Title of Presentation / Speaker Name / 13
Near Real Time Factory Integration
Shanghai
Beijing
Products
Desktop PC’s
Servers
Huiyang
Products
Desktop PC’s
Peripheral
Products
Desktop PC’s
Notebook PC’s
Supporting the Perfect Order
� Master data synchronization� Transactional integration� Dashboards – plant, division, region,
enterprise
Plant To BusinessVisibility – SAP xMII
End User Order
Production Control
mySAP
EndProduct
End User Order
Production Control
mySAP
EndProduct
SAP AG 2006, Title of Presentation / Speaker Name / 14
Target Key Performance Indicators
Delivery Reliability Flexibility & Responsiveness Cost Asset Management
Schedule Achievement Schedule Cycle Time Total WIP Inventory Capacity Utilization
Inventory Accuracy Schedule Interval Material Losses Cash To Cash Cycle Time
Warranty & Returns Make Cycle Time Schedule Resource CostFinished Goods Inventory Days Of
Supply
Yield Material Requisition Cycle Time Inventory Obsolescence Touch Labor Job Classification
Quality Levels % Of Parts Delivered To Point Of Use Raw Material Days Of Supply Cross Training
Scrap Expense Item/Product/ Changeover Time Total Manufacturing Employment Yield Variability
In Process Failure
Rates
Ration of Actual to Theoretical Cycle
Time
Value Added Employee
Productivity
Ratio Of Actual To Theoretical Cycle
Time
Warranty Costs Intra-Manufacturing Replan Cycle Asset Turns
Staging Time Total Build Cycle Time Warranty Costs
% Release Errors Build To Ship Cycle Time Scrap Expense
Production Flexibility Quarantine Time - MRB Packaging Costs
% of Scheduled to
Customer RequestNumber of ECOs Inventory Carrying Costs
Capacity Utilization Deliver To Commit DatePlant Level Order Management
Costs
Order Fulfillment Cycle Time ECO Cost
Inventory Days Of Supply
Customer Facing Internal Facing
Level Three Metrics
Primarily Customer Focused Targets
SAP AG 2006, Title of Presentation / Speaker Name / 15
Management Visibility – Decision Support
Near Real Time Execution – Satisfying The Business Challenge
Executive Metrics to Line Level Measures
Business Level
Plant Level
LineLevel
KPI BusinessDriven Performance
Targets
KPI BusinessDriven Performance
Targets
KPI Flow-downPlant Level Line Level
KPI Flow-downPlant Level Line Level
Line Level DataActuals Feed Plant
Consolidator
Line Level DataActuals Feed Plant
Consolidator
Plant LevelConsolidated Data
Feeds SAP, Portal, BW
Plant LevelConsolidated Data
Feeds SAP, Portal, BW
Summary & Recorded Simulation
Data Integration Roadmap / Landscape
Addressing The Business Challenges
Company Background and Challenges
SAP AG 2006, Title of Presentation / Speaker Name / 17
Plant & Business Management Reporting Roadmap
20082008
CURRENT STATE
• Multiple reporting approaches
• Very limited visibility
• Limited equipment downtime monitoring
CURRENT STATE
• Multiple reporting approaches
• Very limited visibility
• Limited equipment downtime monitoring
Phase I
• Initial KPI reporting
• Global production metrics
• Automated production reporting
• Equipment reliability monitoring
Phase I
• Initial KPI reporting
• Global production metrics
• Automated production reporting
• Equipment reliability monitoring
Phase II
• Individual line productivity
• Elemental usage automation
• Portal Integration Plant / Enterprise
• Multi Plant Comparative Analysis
Phase II
• Individual line productivity
• Elemental usage automation
• Portal Integration Plant / Enterprise
• Multi Plant Comparative Analysis
Phase III
• Supplier Data Integration
• Automated supplier defect reporting
• Fully automated inspection results to enable auto repair
• Integration –Supplier Test
Phase III
• Supplier Data Integration
• Automated supplier defect reporting
• Fully automated inspection results to enable auto repair
• Integration –Supplier Test
Reacting
Basic Accuracy
Productivity and Compliance
Productivity and Process Integration
Demand Driven
Anticipating Interactive Collaborative
Managing the PerfectCustomer Order
SAP AG 2006, Title of Presentation / Speaker Name / 18
Simple Manufacturing Process
Pro V
VMI HUB
Production Order
DetailedScheduling
Production Order(SAP)
Material Staging
AssemblyImage
Preload
TestingPO Confirmation
(SAP)Package &
LabelQA
Order Completed
KPI Target Integration (SAP xMII)
SAP AG 2006, Title of Presentation / Speaker Name / 19
Lenovo Runs the mySAP Business Suite
� Master Data Management
� Payroll Processing
� Incentive and Commissions Mgmt
� eLearning Management
� eRecruiting
� Strategic Sourcing
� Global Trade management
� Global Trade Services
SellMake MoveBuy Service
mySAP ERPFinancials, Human Resources, Procurement, Inventory, Production, Sales Order Management
Customer Relationship Management
Enterprise Service Architecture
Design
Business Warehouse – Strategic Enterprise Management
Supply Chain Management
Supplier Resource
Management
Product Lifecycle
Management
� Extended Warehouse Mgmt
� Financial Supply Chain Mgmt
� Trade Promotion Mgmt
� Treasury & Risk Mgmt
� Transportation Optimization
� eCommerce and Channel Mgt.
� Exchange Infrastructure
� EH&S for Wee Roos compliance
� Vendavo Price Quote Management
� xAPP Cost & Quote Management
� Adobe Interactive Forms
� Advance Planning & Execution
� Event Management
� Inventory Collaboration Hub
� InfoPak Learning Tool
Enterprise Portals
� SAP xMII – Plant to Business Integration
SAP AG 2006, Title of Presentation / Speaker Name / 20
Multi Stage Information Integration Process
Linking Factory MES Performance KPIs to Enterprise Portal
� Department Level Reporting
� Country Level Reporting
� Cross Country Operations Level Reporting
� Line of Business Reporting
Bi Directional Information Integration
� Production Work Order Release Integration With MES
� Material Management Synchronization – SAP / MES
� Up Link of Factory Performance KPIs
Material / Component Supplier Integration
� Delivery / Logistics Information
Selective Test Equipment Integration
� New Product Introduction Performance Reporting / Monitoring
SAP AG 2006, Title of Presentation / Speaker Name / 21
Ratio of Actual to Theoretical Cycle Time
Plant Level – Executive Reporting
Utilization Staging
Schedule YieldVariance
In Process
Total
Logistics
Assy Cycle
Data Integration Roadmap / Landscape
Summary & Recorded Simulation
Addressing the Business Challenges
Company Background and Challenges
SAP AG 2006, Title of Presentation / Speaker Name / 23
Evolution of Adaptive Manufacturing (Interoperability)
70s 80s 90s 200X
Time in Years
High
Affordable
Cost
Aerospace – Government FundedDirect Numerical Control (DNC)
Adaptive Control Milling (Feeds & Speeds)
Automotive - InspiredManufacturing AutomationProtocol (MAP) Intelligent
Communications
Industry StandardsS95, OAGi, RosettaNet, SEMI Plus
MES Vendors & Automation Supplier Solutions
SAPxMII
Release
SAP AG 2006, Title of Presentation / Speaker Name / 24
Summary
� Enterprise Interoperability is a Key Element of
the Solution Framework
� SAP is core to enabling this Solution Framework
� SAP xMII provides the cornerstone for plant-to-
business integration and KPI based performance
management
� Is Based on Industry Standards
� Includes Certified ERP and Plant Adapters
� Is Aimed at “Plug and Play” Simplicity
� Enables Integration with Current Infrastructure
at the Lowest TCO
SAP AG 2006, Title of Presentation / Speaker Name / 26
SAP NETWEAVER
Oth
er
SA
P B
us.
So
lu t
ion
s
SA
P
BI
mySAP ERPSAP Manufacturing
mySAP SCM
Manufacturing Intelligence Dashboards
XI
Simulation Framework
MES – Manufacturing Execution Systems, EMI – Enterprise Manufacturing Intelligence, BW – Business Warehouse (from SAP)SFAC – Shop Floor Automation & Control,
SAP xMII
The SAP xApp Manufacturing
Integration and Intelligence (xMII) is a
packaged composite application that
delivers:
Manufacturing Integration
Manufacturing Integration: A single
ISA-95 compliant layer enabling SAP ERP
connectivity into real-time plant floor apps.
(MES, SFA, legacy apps.) to drive plant-to-
enterprise business process interoperabilityManufacturing Intelligence
Manufacturing Intelligence: Real-time
analytics engine that aggregates and delivers
unified visualization of events, alerts, KPIs and
decision support to production personnel thru
role-based dashboards
Dave Hume, Executive Director, Lenovo CIO Project Office
Bill White, Seal Consulting
SAP Adaptive Manufacturing Summit
September 28th, 2006, Denver, CO
Lenovo: Manufacturing Excellence
leveraging Production Operations
in China
SAP AG 2006, Title of Presentation / Speaker Name / 28
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