Enabling the Cement Industrythrough SAP Solutions

Nikhil Chaturvedi, IBU-Mill Products & MiningDate: 6th June 2008

1. SAP: Profile & Credentials

2. Cement Industry: Trends and Challenges

3. SAP: Solutions for the Cement Industry

4. Cement Industry: Case Studies

Agenda

SAP: Profile & Credentials

SAP in the Cement & Building Materials Industries

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100

200

300

400

Western Europe Asia

North Americ

a

South America

Middle East

Eastern Europe

Australia

Africa

More than 700 SAP customers inbuilding materials (May 2007)

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120

LafargeHolcim

Cemex

HeidelbergCement

Italcementi

4 out of top 5 cementproducers rely on SAP

Building materials customers in 70 countries

SAP Customers in Cement / Concrete Industry

Over 195 CustomersHolcim (70 + Countries)Heidelberg CementItalcementiLoma Negra C.I.A.S.A.Lafarge Perlmooser AGHansonSaint LawrenceTitan Cement Company S.A.ESSROC Incorporated (Italcementi)Beton Son B.V.Mahaphant Fibre CementSiam Cement, Siam City Cement

IndiaAssociated Cement Company (ACC), Ambuja CementGrasim Cement, L&T Cement (Ultra Tech Cement)Calcom CementPrism CementSanghi CementRajshree CementMalabar CementBinani CementJayPee CementDeepak CementDalmia CementJK Cement

Executive Advisory Council Building Materials

The Executive Advisory Council for theBuilding Materials Industry is a forum forstrategic debate of key industry issues atexecutive level.The objective of this forum is to

Align SAP and industry vision of where thebuilding materials industry is heading.

Identify focus areas for SAP to support thevision and trends.

Establish a discussion and influencechannel for the industry.

Objective

Executive Advisory Council Building Materials

Chairmanship

ChairmanDr. Georg SchulzHolcim, Head of Department

Co-ChairmanJose Antonio MolaresCemex, Director

SAP ResponsibleDr. Udo WernerIndustry Principal Building Materials

WorkgroupsReady-Mix RequirementsCRM and Object ManagementNext Council Meeting:

2008 EAC for Cement & BuildingMaterials CustomersJuly 8-9, Heidelberg, Germany

Cement Industry: Trends & Challenges

Cement & RMC Industry: Trends & Challenges

Asset portfolioProduct & Service PortfolioBusiness Partner Portfolio

Plant EfficiencyManaging the Triple Bottom LineAttract InvestorsEnsure Compliance & Process

Integrity

Optimize Margins and Profitability

Retain Knowledge of Aging WorkforceAttract & Develop New TalentsSpeed-up Learning Curve

Global Growth

Productivity and EfficiencyDifferentiation and Innovation

IT is the Enabler to Meet Tomorrows Business Challenges

Standardization & Harmonization

Reduce Cost & Increase EfficiencyEnsure Governance & Compliance

Superior Customer Service

Cross-Industry Value NetworksJoint Research CooperationNew Business Models

Innovative Supply Chain Processes

Increasing Competition fromEmerging Markets

High Transportation CostResource Replacement & Substitution

Process EfficiencyCompetitive PricesEnhanced AnalyticsReduce Material Costs

Communication StandardsGlobal Rollout of ‘Best Practice’

SolutionFlexible deployment

Asset Utilization TransparencyAsset Planning & MaintenanceInvestment PlanningUse of Alternative FuelsEfficient Energy Management

Grow into Emerging MarketsFast Digestion of Mergers &

AcquisitionsIT that adapts to local conditions

Transportation Tracking & Tracing,GPS

Flexible Freight TenderingSelf-Service Delivery

Innovative ProcessesCustomer Self ServicesSuperior FlexibilityMaximum Reliability

Capital Intensive ManufacturingCapital extensive business requires high utilization of production facilitiesPlanning and optimization of downtimes and maintenance activities

Cost Control is a MustHigh Distribution costsFast rising energy prices while product prices have to stay competitive...... Resulting in declining profit marginsCost effectiveness on all levels sought

Flexible Planning and ProductionProduction optimization … on short term noticePlanning maintenance activities

Customer ServiceCustomers in remote locationsCentralization to become more effectiveSelf service loading and electronic invoicingHigh change rate of orders due to uncertainties on construction sites

SCM and TransportationMultiple Plants, Storage locations and customer locationsSignificant transportation cost in comparison to product valueLocal market, limited by transport cost ratio (cement: app. 100 km around a plant)

Cement & RMC Industry: Trends & Challenges

Business Challenges faced by the Indian CementIndustry

Cement prices in India are market driven and volatile. Retrospective changes areroutine

Prices vary from district to district and customers are invoiced at the specifiedrate for consignee's location

Even though, Cement companies try to create Product differentiation, marketshare is highly dependent upon Price and hence, “Cost control” in Production aswell as Logistics is very important

Prices include taxes & freight hence realization calculation is complex

Most payments are on-account type and not linked to invoices

Complex system of discounts and incentives

Consignments of both road and rail sometimes needed to be reallocated / rerouted

Incentives and associated credit/debit generation

Delivery tracking

Accounting for damaged cement (bags)

Transporter Billing on retrospective basis

SAP: Solutions for the Cement Industry

Optimized Organization and Process Landscape

Central control.•Strategy•Vision•Governance, risk,compliance

Shared service:Products andtechnology

Shared service:Benchmarking

Shared Service:Processes

Shared Service:Planning

Localized services•Procurement•Sales•Customer relations•Supply chain planning•Accounting

RegionRegion

Best-run plants•Production•Maintenance•Quality•Sustainability

Plant

PlantPlant

Plant

SAP Solutions for Cement Companies

Central processesStrategy managementAnalyticsCompliance solutionsBusiness processmodelingMulti-languagecapabilitiesSolution manager

Localized servicesCustomer relationshipmanagementTransportation planningPrice and marginmanagementSupply chain planning

Plant operationsProduction executionShop floor visibilityQuality managementInventory managementMaintenance planning

Suppliers &Partners

Customers &Channels

Product Design Marketing & Sales Planning Procurement Order Management Manufacturing Distribution

Enterprise Management & Support

Time to MarketNew Product Development &

IntroductionLife-cycle Data Management

Supply Chain PlanningDemand & Supply PlanningTransportation Management

ProcurementStrategic / Global SourcingOperational Procurement

Order Management & ExecutionEnterprise Asset Management

Warehouse ManagementSales Order Management

Manufacturing Scheduling and ExecutionDrop Shipment

Customer ServiceCustomer Interaction

Complaint / Claim Management

Quality Management & ComplianceQuality Management

Compliance Management

SAP Solution Map: Cement & Building Materials

SAP is focusing on building materials hot topicswith specific solution offerings based on SAP ERP

SAP SCM

SAP PLM

SAPSRM

SAPCRM

SAP NetWeaver

SAPERP

EnterpriseAssetMgmt.

Cost &QuoteMgmt.

SharedServiceCenter

ChannelSalesMgmt.

ShopFloor

Integration

ServiceMgmt.

FinancialSupplyChainMgmt

StrategicSourcing

LogisticsExecution

SelfServices

Environ-mental

Health &Safety

Compliance

DeliveryVisibility &Tracking

Transpor-tationMgmt.

Analytics

Objectives& Policies

Typical Application Solution Architecture

DemandPlanning

Capacity &SupplyPlanning

DistributionPlanning

ProcurementPlanning

ProductionPlanning

Inventory Planning

Selling DeliveryDistribution. Production.OrderFulfillment

Strategic

Tactical

TransactionalFinancial & Management Accounting, MRO Procurement, HR..

StrategicPlanning

Supply ChainPlanningERP / MES / SCM / mix

ERP

Scheduling WarehousingProductionExecution

Sequencing MESMultiple Systems

Prod.Execution

PCS DCS SCADA DASProcess/PlantControl

Control & ProcessData AcquisitionMultiple Systems

Assuring high customer service levels is critical for Building Materials companies toimprove customer retention and loyalty. Sales can easily, quickly and accurately, determinepricing and costing, check production resources, as well as track and manage quotations,contracts, deliveries & invoices – reducing sales cycle time & ultimately increasing revenue.SAP provides a comprehensive sales order management solution to efficiently processquotations and sales orders.

Customer Service: Sales Order Management

Industry ChallengesLow sales efficiency with order fulfillment errors generatedby a lack of insight into purchasing, production andinventory information.

Long sales order lead times and slow response times tocustomer queries on order status due to manual processesand siloed info.

Low customer & product profitability due to lack of availableinformation, analysis & decision-making support tools.

Business Benefits with SAPImproved customer service thanks to comprehensivecapabilities that enable sales to deliver accurate productspecification and usage, price, quantity and deliveryinformation to customers.

Reduced order processing costs through streamlined,automated processes.

Increased customer profitability with comprehensive salesquotation and order analysis.

SAP Solution

Sales and Distribution(cont.)Sales and Distribution

Sales from Stock

Quotation & OrderProcessing Make-to-Order

Batch Handling

Credit Management

Foreign Trade ExportProcessing (Intrastat,Extrastat, Customsdocuments)

Third-party drop shipment

Sales of Bought-In Item

Free of Charge Delivery

Prospect CustomersSales Order Processing

Debit Memo Processing

Customer DownPayment

Delivery, Picking,Billing, Payment, PrintDocuments

Cross Company SalesOrder Processing

Reporting (OpenOrders, ExpiringQuotations, etc.)

Business challenge for concrete companiesInefficient sales order processingSales order processing done at each concrete plantLack of standardized sales order processingNo optimization of production and transport across plants

SolutionCentralized order entry at call centerIncoming orders automatically distributed to plantsAutomatic credit managementChecks available production capacity of plantsChecks availability of transport vehicles

Business benefitsLess personnel requiredCan operate 24 hours per day, if necessaryImproved accuracy of order informationReduced transport cost

PlantScheduling

CentralizedSales OrderProcessing

TransportScheduling

Reporting

Solution Map

ERPERP

SAP Sales Order Entry via a Call Center

CRMCRM

SCMSCM

Consolidated, sychronized supply and demand planning helps Building Materialsmanufacturers enable and improve forecasting in a commoditized product portfolio, aswell as supply chain visibility and efficiency. SAP Business All-in-One provides aflexible, powerful solution for integrated annual operating, sales & operations, as wellas materials requirements planning.

Annual Planning /Forecast

Annual operatingplanning (AOP)

Sales quantityforecasting

Monthly Sales PlanQuantity by Customer/Product

Transfer to sales &operations planning(SOP)

Profitability reporting

Anonymous Forecast

Supply Chain Planning: Demand & Supply Planning

Logistics Planning

Planning/forecastingof future demand

Aggregated productionplanning includingcapacity check

Long Term Planningof materialrequirements, basedon production plan

Transfer to detailedMRP and ProductionPlanning / Scheduling

Plan work Centercapacities

Industry ChallengesInaccurate forecasting due to an unstructured planningprocess with distributed data across sales and business units.

Inefficient portfolio management through poor visibility intoglobal demand and supply status.

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

Business Benefits with SAPImproved customer service levels through accurate,consolidated sales and revenue plans, and better supplychain visibility to enable improved customer responsivenessand order fulfillment.

Optimized portfolio management with better insight intoproduct and customer profitability, as well as the demand andsupply situation.

Better supply chain efficiency with asset optimization andreduced inventories through synchronized sales & revenueplanning with production planning.

SAP Solution

Functions of Demand Planning

Structure Demand Information by freely definable characteristicsCustomer, Product, Sales Office, Region, Location, ...

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

Different options for Data SourcesDirect manual input by user, Entry via Internet (customers), Upload from datawarehouse, Calculated data (i.e. multiply row last years sales 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

Demand Planning

Planner’s KnowledgeTask-specific planning tools

Flexible viewsGraphicsPromotional planningLife cycle managementAccuracy reporting

Statistical MethodsMulti-model approach

Average modelsExponential smoothingCausal factorsTrend dampeningModel combinationPick best

Demand Planning Data Mart

Anticipation ofFuture Demand Collaborative

forecasts

Order & shipmentactuals & historyCostPOS dataNielsen / IRI data...

Information

Solution Overview

SNP generates network of production orders and stock transfer orders

Demand plan

Distributioncenters

Productionplants

60% 40% 30% 70%

SNP Optimization

Forecastssales ordersForecasts

sales orders

SourcingProduct mixProduction &

procurement planInventory strategies

SourcingProduct mixProduction &

procurement planInventory strategies

APO

Liste

Flexible Constraint DefinitionCapacitiesMaterial availabilityMarket constraintsCosts of opportunity

Optimization

Supply chain modelSupply chain model

Cost minimization - Profit maximization

Optimization Profile

Production capacity

Transportation capacity

Selection of mostsuitable productionplant

Optimization ofproduction costs,transportation costs,and storage costs

Mixed integer linearprogramming /metaheuristics

Feasible plans

Safety stock

Determineswhich constraints

are considered

Handling capacity

Storage capacity

Shipping & Transportation ManagementDelivery Processing

Picking

Packing

Goods Issue

Printing & Communication

Planning / Monitoring / Analysis

Batch Management

Serial Number Management

Work Load Estimation

Transportation Planning

Truck Load Definition

Monitoring Transportation

Transportation Billing / Payment

Yard Management

External Contracts

Freight Costing

Break Weight Calculations

Route Schedules

Pick Sort Pack Load Print Ship

Capabilities of SAP Transportation Planning &Execution

FinancialsIntegration

TransportationChargeManagement

TransportationDispatching&Execution

FreightManagement

•Customer Contract•Shipment Request•Freight Request•Shipment

• (Quotation)

•Manual Dispatching•Planning / Optimization•Routing•Scheduling•Carrier Selection•Shipment Order•Freight Order•Tendering•Continuous Move•Compartment Planning•Freight Space Booking•Execution•Replanning

Transportation ChargeCalculation•Costing & Rating

Engine•Customer Freight

Agreement•Carrier Freight

Agreement

Customer Freight Billing•Billing Preparation

Supplier FreightInvoicing•Settlement Preparation

Billing / Invoicing•Customer Billing (SD)•Freight Auditing &Self-Billing (MM)

Financial Accounting•Account Determination•Installments•Accruals

Controlling•Profitability analysis•Profit sharing

Visibility

Analytics (Business Intelligence) Exchange Infrastructure

SAP TM SAP ERP

SAP Event Management

Netweaver and SCM Basis

Global Availability Check

Checking Product Availability at time of Sales OrderCreations

Simulating Global Supply Chain based on projectedinventories in the future

Consider product substitution based on predefinedrules

Consider substitution of supplying location basedon predefined rules

Re-simulate Product Availability Check at any criticalpoint in time

Re-consider priorities based on predefined rules

Enable Sales Managers to immediately check onDelivery Capabilities

SAP NETWEAVER

Manufacturing Visibility

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Man

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Manuf. Intelligence Dashboards

Manufacturing: Seamless Integration

Manufacturing PlanningForecasting/Collaborative ForecastingMake-to-Stock / Make-to-OrderFinite Capacity SchedulingMaterial Requirements PlanningRecipe Management

1

Manufacturing ExecutionProduction Process ManagementBatch ManagementLabor & Resource ManagementOutbound ProcessingProduction Dispatch

2

Quality ManagementLIMS integrationQuality EngineeringQuality / Tracking ControlQuality ImprovementAudit Management

3EH&S Compliance

Product Safety ManagementHazardous Substance & DangerousGoodsEmissions & Waste ManagementIndustrial Hygiene and SafetyOccupational Health

4

Plant MaintenanceTechnical Asset MgmtPredictive & PreventiveMaintenanceMaintenance ExecutionIntegration to purchasing

5

VisibilityATP/CTPSafety / Target StockManufacturing Costing &Performance Mgmt.Tracking & GenealogySubcontracting and CollaborationManufacturing Event Management

6All Six Key Capabilities are Integrated and Seamless

Production PlanningCapacity Planning

Demand Management

MRP

Routing

Production Resource Tool

Work Center Management

Master Production Scheduling

Production Order Management

Project Production

Sales Operation Planning

Make To Order

Planning Strategies

Costing

Alerts

Portals

Backflushing

Reporting

Confirmations

MRP ControllerLine Manager Plant Manager

Efficient quality management helps Building Materials companies better manage andassure product quality, monitor & improve quality standards, as well as documentquality compliance for subsequent audits. The SAP solution delivers a robust qualitymanagement solution to support high quality sourcing and improved vendormanagement.

Operational Compliance: Quality Management

Industry ChallengesQuality issues cause lower quality end products lowering operatingmargins and customer satisfaction.

Poor tracking of supplier material quality results in high cost returnto vendor processing and delayed time-to-customer.

Complex tracking of materials and quality documentation forregulatory compliance.

Business Benefits with SAPIncreased customer satisfaction through efficient quality managementprocesses to assure high product quality.

Improved supplier selection and management with vendor evaluationprocess.

Lower operating costs and increased product profitability support byquality inspection and monitoring throughout the product life cycle toreduce product errors.

Easier regulatory compliance with quality documentation andauditability of information & actions across the supply chain.

SAP Solution

Quality Management

Inspection lot generation /inspection defects recording

Usage decision processing

Quality notification

Stock procurement with QM

Goods return to vendor

Vendor evaluation

Batch management (with batchtraceability)

Batch recall

Batch analysis

Maximize the return on relationships through all suppliers within the supply chain –from strategic sourcing to operational procurement. SAP enables Building MaterialsCompanies in reducing procurement cost & time of inventory replenishment. SAPdelivers a complete, integrated solution for the entire procurement cycle.

Sourcing & Procurement –Strategic & Operational Procurement

Industry ChallengesPoor vendor selection results in long lead times, over-pricedmaterials, and low material quality triggering high cost returns.

Inefficient, manual and paper-based procurement processes.

Business Benefits with SAPOptimized vendor selection with vendor evaluation – vendorpricing, service, lead-time & performancecomparison/evaluation to better negotiate contract terms,reduce material costs, lead times and returns.

Reduced operational costs with automated procurement tasksin administration, production and transportation includingpurchase requisition creation, invoice verification, paymentprocessing etc.

Comprehensive visibility into the supply chain throughintegrated processes for better inventory turnover, cycletimes, and lower receiving and material storage costs.

SAP Solution

Materials Management(Continued)

Materials Management

Purchase PriceNegotiations withVendors

Request forquotation

Procurementcontracts

Purchase requisition& order processing

Internalprocurement

Subcontracting

Stock Transfers

Procurement &Consumption ofConsigned Inventory

Goods receipt (withbatch number creation& quality inspection)

Return to vendor

Invoice & paymentprocessing

Building Materials companies need comprehensive, accurate enterprise visibility andstrong financial management support to (1) fulfill financial requirements, (2) enableprofitable growth and (3) operational efficiency. SAP provides the market-leadingsolution for accounting, financial reporting, and performance management – integratingfinancial management with business processes.

Financials

Industry ChallengesInefficient accounting and controlling processes with informationlocated across transaction and financial systems.

Inaccurate, incomplete cost and revenue data for portfolio, assetand operations management.

Different, country-specific financial accounting processes,principles and regulations.

Business Benefits with SAPEfficient, automated accounting and controlling processes.

Complete and accurate data through seamless processintegration across operational areas of the company.

Enhanced company profitability analysis by market segment(products, customer, orders, business units).

Automated calculation & comprehensive visibility & analysis ofproject, asset and product costs throughout the life-cycle.

Easier multi-country financial reporting with, multi-currency andasset & inventory valuation capabilities.

SAP Solution

Accounting

General ledger

Accounts payable /receivable

Cash management

Cost of salesaccounting

Asset management

Segment reporting

Period end closing

Revenue planning

Accounting(continued)

Sales and operationsplanning

Purchased materialprice planning

Cost center planning

Internal orderaccounting

Product costing

Period end closingincl. inventoryvaluation

General Ledger

Legal Consolidation

Accounts Receivables

Accounts Payable

Asset Accounting

Budgeting

Overhead Cost Controlling

Activity Based Costing

Cash Management

Treasury

Funds Management

Payroll

Check Printing

Parallel Accounting

Analytics

Expense Management

Billing

Financial Management

Profitability Analysis

Streamlines informationcontrol, analysis, anddelivery

Enables performanceplanning, measurement, andmanagement

Optimizes the financialsupply chain

Most comprehensive,functionally-rich solution onthe market

Market-leading solutions andcustomers in all industries

Reliable, proven businesspartner with solution andindustry expertise

All SAP applications are completely integrated intoAccounting

Example: Actual Costing of aproduct based on actualproduction, purchasing of rawmaterials and asset utilization:For live demo: show Ides Scenario Cement Costingand Actual Costing

1. Process Order

2. Collected Costs

3. Settlement to G/L4. Monthly Analysis

Cost Accounting

Cost Accounting – Cost centers

MaterialManagement

FinanceControlling

4 AP

20 Revenue

Integrated process flow for a cement plant

Raw MaterialExtraction

Raw MaterialPreparation

Raw MealPreparation

ClinkerProduction

CementGrinding Distribution

SAP Business Information Warehouse

3 Material/Cost booking

5 Invoice

6 Cash

1 Purchase OrderSupplier

MaterialStock

2 Delivery

7 Consumption

Local Plant Technical Information Systems

8 Consumptionper time period

ProductionPlanning

Prod. Order

Cost Collec.

9 Cost booking

HumanResources

10 Labor costs

12Productionamountper time period

11 CostAllocation

Cost size13 Cost equivalent

17 DeliveryNote

Customer

14 Order

Sales &Distribution15 Stock reduction

18 Invoice

19 AR

Profit /Loss

COGS

16 Costs

Cost Center Cost Center Cost Center Cost Center Cost Center Cost Center

Delivery21

Supply chain managementStrategic & tactical planning functionalitiesLink to executionWarehouse operationsTransport management system

All levels of SC planning are covered bySAP SCM (APO)Online integration to ERP 6.0 ensurescapability for simultaneous planning andavailability checkTransportation and warehousemanagement integrated as part of theoverall solution

Ease of Further Evolution

Business evolution requirements SAP coverage

Customer relationship managementMarket intelligence systemsManagement tools for marketingoperationsSales force automation

CRM fully integrated to supply chainexecution and finance backboneCovering engagement, transaction andfulfillment process

Back officeFixed asset control systemMaintenance systemsCoprorate Stragtegy Management

Maintenance module integrated withFinance/Controlling, HR and materialsmanagement module covering alsomaintenance of mobile assetsSAP Strategy management (byBusinessObjects)

Cement companies need a complete, integrated view on financial and operationaltargets and figures to (1) develop realistic business plans as well as (2) monitor andsupport operational decision making. SAP provides tools to generate a completepicture of Cement companies to control growth and operational excellence.

Analytics & Operations Support

Industry ChallengesLack of visibility into financial and logistic key figuresthroughout all company departments.

Inaccurate and incomplete statistical data base to link strategicplans to operational performance.

Lack of analytic support to understand the profit drivers ofMaterials business.

Business Benefits with SAPSingle analytical platform for the whole enterprise in a cross-functional and collaborative environment.

Support of integrated and realistic business planning andmonitoring of costs and revenue during execution.

Actual detailed operations reporting and support of operationaldecision making in sales, production and procurement.

Integrated operational support of cross functions like qualitymanagement, procurement and project management.

SAP Solution

Analytics for ERP(continued) &

Operations Support

Cross-functionalAnalytics for ERP

Analytics for

MRP, Purchaserequisition, stocks

Quotations, SalesOrders, Line items,Deliveries, Billing

Credit Overview &Memos, Customers

Backorders, SalesSupport, Returns

Purchase Orders,Contracts, SchedulingAgreements

Analytics for

Vendor, Warehousestocks

Batch analysis,Availability overview

Plant & Material Analysis

Operations Support for

Quality Management

Global Trade Services

Project / PortfolioManagement

Indirect Procurement

Clinker FactorOverall Equipment EfficiencyMean Time Between FailuresCoefficient of Variation of Cement Mortar StrengthThermal Substitution Rate

Performance Management – Sample Indicators

Specific Cost of Electric Energy

Specific Cost of Traditional Thermal Energy

Specific Cost of Alternative Thermal Energy

Specific Actual Cost of Cement

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Specific Raw Material Cost of Ready-Mix Concrete ProducedAverage Selling Price of Ready-Mix Concrete

Cement

Ready-Mix

Average Volume Produced per PlantVolume Delivered per Truck

GeneralM

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Own Personnel ProductionSubcontracted Personnel performanceAccidents with Time LostOvertimeOutstanding WorkPe

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Perf

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Specific Maintenance CostsInvestment to Maintain Productive Capacity and CompetitivenessSpecific Replacement InvestmentsMean Time between RepairPreventive Maintenance Routines

Production Supervisor UI

SAP Quality Management - Quality Control

Quality Control enables recording, trackingand analysis of product and processcharacteristics to ensure qualitycompliance.

Key Benefits:Supports automatic or manual triggeredinspection lotsIntegrated tightly with the complete supplychain (e.g. inventory, batch, purchasing)Enables statistical process control (SPC) tomonitor critical product and processcharacteristics in the manufacturingprocess and allows instantaneousinterventionDocuments product quality to achieveregulatory complianceIncludes integrated problem management

Key Functionalities• Quality Inspections

• Laboratory Integration

• Test equipment Interfacing

• Usage Decision / Release

• Certificate of Analysis

• Statistical Process Control

• Problem Management

• Test Equipment Calibration

• Quality Information System

Quality Inspections

Comprehensive inspection processingGoods receipt inspectionIn-process controlPost-process controlInspections at goods issueRecurring inspections

Test equipment interfacing

Statistical process control (SPC)with integrated problem management

Use as Enterprise LIMS

Results recording - mobile or Web-based

Functions integrated in logistics (e.g. inventorymanagement)

A Snapshot of the Quality Inspector’s Dashboard

Work list with multiple views that containinspection lot related tasks.

Direct access toresults/defects

recording application

High frequency tasks canbe saved as favorites

and launched on demand

Direct access to theconfirmationapplication

Enterprise Asset Management – An Evolution

Inspection and CalibrationRFID and Mobile DevicesProject ManagementMRP & Spare PartsManagement

Full Enterprise Asset ManagementCore FinancialsFinancial OptimizationReliability Reporting

Human ResourcesTime and PayrollSkills Management

Maintenance Management Systems

Asset MaintenanceMRO Procurement and Inventory

Design & SpecifyBusiness planningInvestment managementCollaborative specificationand designMaintenance engineeringInterfacing CAD systemsProject managementMaintenance costplanning

Procure & BuildSupplier qualification and candidateselec.Bidding and contract managementProcurement processDocument managementProject managementCollaborative constructionProject and investment controlling

Decommission & DisposeAsset transfer anddisposalCollaborative disposalmgmt.Document managementProject managementWaste managementAsset complianceAsset re-marketing

Operate & MaintainTechnical asset managementPreventive and predictive maintenanceMaintenance planning and schedulingWork order managementMobile asset management and RFIDContractor managementMRO and services procurementWork clearance managementShutdown planningInterfacing GIS and SCADA

EAM: Functional Scope

Facility & Asset Management

Work Force Management

Location & Asset Mapping

Maintenance Planning & Scheduling

Budgeting & Sanctions

Tools & Documents

Complaint Management

Warranty & AMC

Contracts & Subcontracting

Spares ManagementWork Clearance

Preventive / Predictive / Breakdown /Shutdown Maintenance

Valuation & Status Management

Mobile Device

GPS Interface

Equipment History

Meter Reading & Counter Based

Early Warning System

ObjectsOrders /NotificationsCostsDowntimes

Hist

ory

Time- /MaterialconfirmationTechnicalcompletionOrdersettlement

Com

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Internal /Externalresource-planningRelease /PrintControl /Execution

PM O

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Techn. ObjectConditiondescriptionItem dataActivities /TasksPriorities

Notifi

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Mobile Solution

Portals

BI-

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NetWeaver

Plant Maintenance (PM) in SAP ERP basis ofEAM

COMM PS

Material masterInventory mgmt.

PurchasingContractor

Cost centercontrolling

Ordercontrolling

Project structureand controlling

Budgets

AMAsset masterDepreciationCapitalization

QMTest equipment

Calibration tasksCalibration

results

PP

DMS

Integration withproduction

ManagedocumentationHR

QualificationsManpowerplanning

Time trackingPayroll mgmt. Value of

integration

PM-Technical Asset

Management- Preventive and Predictive

Maintenance- Breakdown Maintenance

- Refurbishment

Maintenance Cost Budgeting

History Based Budgeting

Ad hoc Budgeting

Simulation

Location Based

Equipment Based

Tasks Based

Mobile Asset Management - FunctionalOverview

Technical ObjectManagement

SAP Backend Data updatein backend

Measurement &Counter Readings

InventoryManagement

NotificationManagement

Business PartnerManagement

ContractManagement

OrderManagement

Data creation andassignment

High frequency tasksare aggregated in the

services list

Work list of current MaintenanceOrders and Notifications can be

configured as needed

Direct access to the confirmationapplication

Reports can be extracted from SAPBI or any system on the plant floor

Maintenance Inspector’s Dashboard: Sample

Project Systems (PS)Project Initiation

Project Team

Project Estimation & Budgeting

Project Planning & Scheduling

Capacity Management

Project Procurement

Project Production

Project Costing

Project Document Distribution

Project Confirmations

Project Claims

Project Progress Tracking

Multi -Project Management

Project Archiving

Project Reuse

Project Base lining & Simulation

Project Status Management

Project – EH&S

OfflineOnline PROMAN

SAP MII: Manufacturing-to-Business Integration

What’s happening during every shift?Material availability and consumptionCapacity availability and utilizationSchedule changesProduct Genealogy tracking and QM

What’s happening at each line?Cycle Times / Operating EfficienciesMachine Breakdowns / Unplanned DowntimeQuality IndexPredictive Maintenance requirements

How are we hitting our targets?Total Cost of Production and VarianceLabor and Resource ProductivityOrder Fill Rates and Cycle TimesFixed and Variable Asset UtilizationERP

SFAC - Shop Floor Automation and Control SystemsMES – Manufacturing Execution SystemsDCS – Distributed Control Systems

MES

SFAC*

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DISCONNECT

DISCONNECT

SAP MII offers these Core Functions/Services toenable Manufacturing Integration and Intelligence

Web Services• All services exposed asweb services• Includes user-definedcomposite services

Connectors

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Mfg. Intelligence Mfg. Integration

Data Services

MANUFACTURING INTELLIGENCE

• Visualization Services• Charts, grids, tickers, UI controls• Dashboard components

• Analytic Services• SPC/SQC (Six Sigma) analyses• Statistical and other mathematical analyses

ManufacturingIntelligence

MANUFACTURING INTEGRATION• Data Services

• Bi-directional data access• Metadata browsing• XML-based data abstraction• Connectors to external systems

• Business Logic Services• Logic• Integration services• Notification services• Calculation and data transformation• Content creation

ManufacturingIntegration

SAP MII Customers: Mill Products & Mining

Building Materials

Armstrong Holdings, Inc.

Cemex Central, S.A. de C.V.

Certainteed

California Portland Cement Co

Johns Manville

Cosentino S.L.

Jaiprakash Associates Limited

CSR Limited

Furniture

Sauder Woodworking Company

Haworth, Inc.

Fabricated Metal Products

Bekaert N.V.

Charlotte Pipe & Foundry Company

IPSCO, Inc.

Allvac

RTI International Metals Inc.

Rexam Plc

JW Aluminum

Tomago Aluminium Company Ltd

Alcan Inc.

Jindal Stainless Ltd

Grede Foundries Inc

Gerdau Aços Longos S.A.

Showa Denko

Nippon Steel

Metalcraft of Mayville

Electrosteel Castings

Mining and Primary Metals

BHP Billiton Group Operations

Inco Limited

Diavik Diamond Mines

Paranapanema S.A.

Exxaro Resources Limited

Lonmin Plc

Foundation Coal Corporation

Rio Tinto Services Limited

Peabody Energy Corporation

Forest Products & Paper

Buckeye Technologies Inc.

Georgia-Pacific Corporation

Domtar Inc.

Klabin S.A.

Weyerhaeuser Company

UPM-Kymmene Oyj

SAPPI

Bemis Company Inc.

Albany International Corp

Kimberly Clark

Altivity

Textile Production

Balta Industries NV

Milliken

SAP Environmental Compliance (EC)

SAP EMEmissions andComplianceManagement

SAP EMEmissions andComplianceManagement

CfPComplianceforProducts

CfPComplianceforProducts

Industry SpecificCross-Industry

SAP EH&S

Comprehensive and complete business solution for environment, health and safetymanagement

SAP EH&S

Comprehensive and complete business solution for environment, health and safetymanagement

OH

OccupationalHealth

IHSIndustrial Hygiene

and Safety

WM

WasteManagement

Emissions andCompliance

Management

ProductCompliance

HSMHazardousSubstance

Management

PS

ProductSafety

DGDangerous Goods

Management

Health & Safety Services- HSS Product Compliance-CSM

SAP EH&S Solution

Functional overviewProduct Safety *Hazardous Substance Management **Dangerous Goods ManagementIndustrial Hygiene and SafetyWaste ManagementOccupational HealthEH&S Analytics / EH&S Reporting

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

Substance /Material

Employee Workareas

One solution for all industries* for producers of hazardous substances** for users of hazardous substances

Questionnaire• Questions• Answers

Documents• Type• Size

SAP EH&S Occupational Health - Medical ServiceData

General info• Name of the person• Date• Name of physician• Status• Results• Comment

Diagnosis• Diagnosis-Code (eg. ICD 10)• Date• Comment• Significance

Restrictions• Duration• CommentPrococol result

• Physician• Comment

Examinations• Name, Type• Rating

• Name• Type• Frequency-Type

Medicalservice

Injury/Illness Log• Name of the person• Date• Name of physician• Injury/Illness• Transferral• Comment

Vaccinations• Name, Type• Frequency, next dateCase history

• Name, Type• Date

Medical measures• Name, Type• Date

Consultation• Name, Type• Date

• Name of test• Rating• Measurement value• Interface to medical

devices

Med. Test Results

SAP EM - Capabilities

SAP EM Compliance and Emissions ManagementSAP EM Compliance and Emissions Management

ComplianceManagementComplianceManagement

EmissionsManagementEmissions

ManagementGreenhouse Gas

ManagementGreenhouse Gas

ManagementPermit

ManagementPermit

Management

• Data Monitoring• Task Monitoring• Exception Tracking• Reporting

• Data Monitoring• Task Monitoring• Exception Tracking• Reporting

• GHG-Monitoring• Allowance Mgmt• National AllocationPlan (NAP) Reporting• Inventory• Trading

• GHG-Monitoring• Allowance Mgmt• National AllocationPlan (NAP) Reporting• Inventory• Trading

• Application Support• Change Management• Reporting

• Application Support• Change Management• Reporting

• Emissions Monitoring• Compliance Tracking• Regulatory Reporting

• Emissions Monitoring• Compliance Tracking• Regulatory Reporting

Compliance Emissions

SAP Emissions Management

Reportingand Documentation

ComplianceAnd Management

Modelingand Analysis

IT-StructureOptimal Integration in SAP ERP Modules

Flexible integration in heterogeneousInfrastructures

Web-based, adaptable user interface

Stand-alone solution with new Java-based SAPtechnology SAP NetWeaverTM

Overview of SAP Emissions Management

PerformanceSupport of incident/accident-management

Data source for corporateenvironmental reporting

Support of audit-trails

Interfaces to market places and tradingplatforms, e.g. GHG-trading

Cross FunctionalCross Functional

Definition, allocation and controlof measures and interactiveprocesses

Role-based task and work-flowmanagement

Interaction with internal/externalstructures (e.g., maintenance)

Analysis and presentation ofscenarios and data

Template-based, import-/exportfunctionality

Automated generation anddistribution of data and reports

Structured representation offacilities and processes

Automated estimation ofcomplex emissions data

Definition and application offorecast scenarios

Cement Industry: Case Studies

Ultratech Cement (L&T Cement): SAP ERP

Ultratech Cement is a subsidiary of Grasim Industries,and with Grasim Cement, it is the largest producer ofcement in India and 11th largest in the world.

Ultratech CementCompany

CementProducts/Services

SAP R/3 FI, CO, MM, SD, PPSAP Solutions and Services

INR 3300 Cr.Revenue

Employees

IndiaLocation

Mill productsIndustry

www.ultratechcement.comWeb Site

ObjectivesSimplifying the handling of complex pricing,invoicing and Distribution processesReduced physical delivery time for movingmaterial out of the plantReduced Inventory at warehousesReduced manpower for various processes inStores, Purchase and AccountsBetter decision making at the top managementLevelStreamlining of accounting activitiesStandardization of processes across the country

BenefitsEasier delivery processingOn-line dispatch informationFreight monitoringDelivery trackingEffective transporter billing systemTransporter billing taking shortages / damagesinto accountTracking of every individual delivery up topayment of transporter billEasy tracking of reallocation deliveriesAutomatic price approval mechanismAutomatic generation of alphanumeric code incustomer masterAutomatic generation of credit / debit notes forrate differenceTransparency of information at operational level tosatisfy customer orders

Grasim Cement: mySAP ERP

Grasim Cement is a subsidiary of Grasim Industries, andproduces various grades of Grey and White Cement.

Grasim CementCompany

CementProducts/Services

mySAP ERP 2004: FI, CO, MM, SD, PP,HR, BIW

SAP Solutions and Services

Revenue

Employees

IndiaLocation

Mill productsIndustry

www.grasim.comWeb Site

ObjectivesIntegration of all the depots with the CentralMarketing office to facilitate the online placementof orders and for monitoring the dispatch positionTo be an industry benchmark in truck turnaroundtimeReduction in procurement costEnhancing efficiency in the batch managementthroughout the supply chainFlexibility in report generation and decision-makingImprove the hire-to-retire processes of employeemanagement

BenefitsWith SAP as a tool, a systematic process ofdemand projection and timely communication wasestablished that, in turn, enables the unit tomaintain consistently a high delivery performancein terms of timely supply of the right quality andquantity of Cement at the right placeReduced the internal truck turnaround time from2.25 to 1.38 hrsBetter visibility of suppliers’ quality and costperformanceGreater inventory visibility across “Dumps” andstocking locationsSAP BIW enhanced the reporting and analysiscapabilities across various levels of theorganization

Holcim White LTD: SAP CRM / Mobile Sales

Cementos Bio Bio: SAP Netweaver

KEY CHALLENGES

Integrate new systems and new process while supporting acquiredcompaniesEnhance control over varied and geographically dispersed processesManage documents more effectivelyStreamline information flow and enable collaboration

IMPLEMENTATION HIGHLIGHTS

Deployed portal-based document management systemImplemented comprehensive Web services platformDeployed analytic and reporting capabilities

PROJECT OBJECTIVE

Create a comprehensive Web-services-based infrastructure to enhancecontrol over processes, and to support growth strategies

Based in Santiago, Chile,Cementos Bio Bio producesa wide range of products,from cement to forestproducts and ceramics. Thecompany is using the SAPNetWeaverTM to create acomprehensive Web-services-basedinfrastructure to enhancecontrol over processes, andto support growth strategies.

Cementos Bio Bio: SAP Netweaver

SAP SOLUTION

SAP NetWeaver, including SAP Enterprise Portal with knowledgemanagement capabilities and SAP Web Application Server components

KEY BENEFITS

Better information access for decision makersInfrastructure that can support growth and acquisitionsImproved control over documentsEnhanced collaboration"Beyond any single

capability, SAP Netweavergives Cementos Bio Bio aWeb services platform forconnecting everything."

Jose Villegas,IT Manager,Cementos Bio Bio

SAP DeploymentBusiness Organisation

Company StrategyVertically integrated in aggregates,

concrete and cementGenerate improved returns by

achieving the full synergies ofintegration

Make customer focus an overridingbusiness principle

Be the lowest cost producer in ourcore products

Operate in mature growth marketsEnsure the sharing of best practice

while at the same time maintaining ourdecentralised culture

RMC Group is the world's fourthlargest building materials company,measured by turnover, over £5 billionin 2001.

The company employs over 31,500people at nearly 2,400 locations in 27countries.

RMCs' International Headquarters arelocated in the UK at Thorpe, Surrey.

Lines of BusinessAggregatesinclude sand, gravel and variousgrades of stone and rock. RMCoperates over 400 quarries and sandand gravel deposits.

Cementis a mixture of clay and limestoneburnt in a kiln. The RMC Groupoperates 20 cement plants inAustralia, Croatia, Germany, Latvia,Poland, Great Britain and the USAwith an annual capacity of 20 milliontonnes, making the Group the world’s10th largest producer.

ConcreteRMC manufactures a wide range ofprecast and prestressed concreteproducts in nine countries.

Global Organisation

Country Country Country

UK HQ

4800 users across Europe (growing to5500 in the coming months)

One SAP system per country sharedby each line of business (UK, Fr,Ger/Aus, Den, Sp, Por, Cro, Pol)

Hardware operations outsourced toDebis.

Scope: Finance, Costing, MaterialsManagement, Sales & Distribution,Production Planning and BusinessIntelligence (FI, CO, MM, SD, PP, BI)

Heritage country-based SAP and non-SAP systems migrating to an SAPtemplate with common data standards.Local flexibility for legal reporting andlocal processes.

USA considering adopting the SAPtemplate from the UK (currently 19different legacy systems).

Considering SAP Strategic EnterpriseManagement (SEM) and PlantMaintenance

BenefitsConsolidation of business operations (e.g.

UK down from 25 businesses)Reduction of call dispatch centres (aim for

one per country)Support acquisitions strategy through ease

of integration of new business operations

RMC Group: SAP ERP

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