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Putting Wisdom to work
SAP in Cement Industry
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Putting Wisdom to work
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
6/17/20149Reference : SAP
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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
6/17/201411Reference : SAPReference
SAP
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Application solution Architecture
6/17/201412Reference : SAP
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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
6/17/201418 Reference : SAP
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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
6/17/201421Reference : SAP
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Transportation planning & Execution capabilities
6/17/201422Reference : SAP
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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
Global availability check
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Manufacturing : Seamless Integration
6/17/201424Reference : SAP
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Production planning
6/17/201425Reference : SAP
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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.
Business Benefits with SAP
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.
Business Benefits with SAP
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
6/17/201429 Reference : SAP
All SAP li i l l i d i
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All SAP applications are completely integrated intoaccounting
6/17/201430 Reference : SAP
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Cost accounting
6/17/201431 Reference : SAP
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Cost accounting Cost Center
6/17/201432Reference : SAP
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Process flow for cement plant
6/17/201433 Reference : SAP
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Ease of further evolution
6/17/201434Reference : SAP
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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.
Business Benefits with SAP
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
6/17/201436Reference : SAP
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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
6/17/201439Reference : SAP
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EAM : Functional scope
6/17/201440Reference : SAP
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Facility & Asset management
6/17/201441 Reference : SAP
Plant maintenance (PM) in SAP ERP on
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Plant maintenance (PM) in SAP ERP onbasis of EAM
6/17/201442Reference : SAP
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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
6/17/201444Reference : SAP
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Project Systems
6/17/201445Re erence : SAP
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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
6/17/201447Re erence : SAP
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SAP Emission management - Capabilities
6/17/201448Reference : SAP
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SAP Emission management
6/17/201449Reference : SAP
Sales
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In Cement Industry
SalesSupply chain
Demand Planning
Supply networkplanning
Shipping &Transport
Management
Global availability check
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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Thank You