Structured Value Creation Methodology

Table of Contents

1 Cost Reduction Initiatives in Tough Economic Times 3

2 Value Creation enabled by IT and Managing Demand Volatility 3

3 Value Creation from HCL Solution to address Demand Visibility 10

4 Challenge: Accurate WIP Tracking and Reporting 12

5 Challenge: Cost Reduction by Optimizing Disparate Applications 13

6 Conclusion 15

Decision-making

3

1. Cost Reduction Initiatives in Tough Economic Times

Most of the discrete industrial manufacturing companies are asking themselves how they should prepare themselves for tough times; IT

Strategy team is no exception to this. IT faces continuous

organizational and economic demands to maintain cost efficiency

and reduce expenses whenever possible. The top three reasons to

reduce costs are:

?Recession leading to demand volatility for manufacturer’s

products and services

?Declining sales, financial and industry performance soliciting

the need for resilience ?Budget reductions in all areas of federal, and private spending

Cost reductions, however, are easier said than done and require an in depth analysis of the as-is state, systems and processes. IT cost reduction could often involve infrastructure consolidation, technology replacement, reducing software license and support requirements, revising purchasing policies, outsourcing, centralizing server workloads and storage, to name a few.We, at HCL, believe that cost can be reduced for clients in four

broad areas:

?Reduce cost of running IT

?Improve IT operations

?Make IT leaner

?Help IT transform the business processes

These initiatives and the correlation between them are often

complex requiring both technical and industry knowledge. HCL

combines years of business and IT experience when working with

customers to inspect their Application Development and Management (ADM) landscape both from a micro and macro perspective and create a “roadmap” for cost reduction through value creation, and continuous improvements.

2. Value Creation enabled by IT and Managing Demand Volatility Decision-making

Interviews and interactions with discrete manufacturing company

executives has also shown us that there is need for Value Creation by

Simplification of Business Processes, and building an

4

organizational IT ADM strategy that reduces risk and focuses on

delivery excellence.

Discrete manufacturing firms typically they would like to:

?Improve Cash Flow?Improve Sales Analysis?Implement a Leaner back office operations?Streamlining business processes to focus on Customer Service

and Delivery Excellence?Build Value from mobility of project management ?WIP tracking and visibilityHCL would like to address these business challenges in the following sections with our proposed solution approach that uses as a foundation, HCL’s investments made in vertical domain specific

manufacturing solutions; utilizing Structured Value Creation

Methodology, which besides enabling cost reductions; additionally

builds a framework for value creation over continuous business

cycle.

Improving Customer Satisfaction through Streamlined

Automated Processes

CRM (Customer relationship management) solutions are the key to

increasing customer loyalty and driving profitability; which is possible by gathering customer data from multiple sources and systems, and providing a single view of the customer. However, managing customer data is only the beginning. Business Process Management systems automate and streamline the “process centric” layer which drive customer interactions and further address the gaps that older people centric systems could not bridge.

Front-to-back Office Integration drives further value, creating a Continuous Cycle for Improvements, and Delivery

Excellence

While many applications require extensive investments for

integration, HCL framework leverages customer’s investment

across disconnected back-end systems. Using best practices rules

engines; and “analytical stochastic engines” the HTML-based

forms enable one-click integration with legacy and core processing

data sheets, and drive analytics. This will shorten cycle-time for

processing real-time customer needs. Complex interactions shall be

enabled by single, simpler, intuitive interfaces; reducing complexity and speeding customer fulfillment of requests.

Improving Key Performance Indicators (KPI’s) of Manufacturing by managing Demand Volatility and improving Delivery Excellence

5

In a “sense and respond” manufacturing function, operations team

needs to respond rapidly to myriad uncertainties. Based on

interactions with these teams, it has been determined that success

depends on how fast and how effectively customer service processes can respond to the demand change. While the overall strategy for demand management and fulfillment decisions are enabled by current IT processes, agility of those processes and removing waste in those processes are needed to make the operations leaner.

Value through Process Orchestration between Systems, Processes and PeopleThe process orchestration between systems, services, people and

partners is the key to achieve operational objectives. Flawless

execution of business processes enables manufacturing companies

to react quickly to changing market conditions.

Context for FraME™ (Framework for Manufacturing

Execution)

HCL’s existing framework “SynAps” provides a holistic framework

for improving the manufacturing operations efficiency and

collaboration between engineering and manufacturing systems.

However our survey on SynAps indicates that 86% of customers want to address Process Orchestration and 65% of the customers need Vertical specific out of the box templates and dashboards. Thereby HCL has invested in enhancing the framework as “Frame™”.

Bu siness Operation Process Orchestrator (Technology agn ostic, Product agnostic Services)

Production Data collection

ProductionExecution

management

ProductionResource

Management

ProductionDispatching

ProductionTracking

Detailed Productionscheduling

ProductionDefinit ion

Management

Production Performance

analysis

Level 1-2 Process Control - Production related

Operation

Definition

Operation

Capability

Operation

Schedule

Operation

Performance

Equipment and Process specificProduction Parameters Operation

Command OperationResponses

Equipment and processSpecific data

Orchestrat ion layer superimposed on top of ISA 95 part 3 Model

Frame™

6

Key Drivers

?This makes the design and implementation of the business

processes quite unmanageable.

?Implementing process changes is cumbersome and often error prone.

?Variability and dependency in manufacturing ecosystem and processes

?Inadequate asset utilization and low visibility in shipment?Lack of real time scheduling and inadequate asset utilization?Inadequate material procurement and replenishment practices ?Lack of execution prioritization at shop floor

Addressing the Challenge through FraME™; HCL’s solution

for Business Orchestration between Sense and Response

Processes

FraME™ solves these issues by building orchestration scripts using

BPEL (Business Process Execution Language) standard. BPEL

provides a standard way of orchestrating the process and helps in

capturing the best practices as an executable script. This will help in

reducing the effort required for any changes in any of the

participating systems as well as applying the best practices to a new environment and thereby reducing the time to deploy. These scripts can be run using any system that supports BPEL scripts like MS BizTalk Server, Oracle BEPL Process Manager and IBM Web Sphere Business Integration Server Foundation.

FraME™ acts as an enabler by providing process templates for vertical focused business processes as well as vertical focused standard analytics, reports and dashboards. FraME™ makes use of the manufacturing information and intelligence for providing the

analytics, reports and dashboards thereby making sure that a widely

accepted platform is used for easy integration and maintenance.

Following diagram shows a scenario where FraME™ is addressing

Engineering Change Management.

7

SA LES Or der

B usiness Pr ocess Orchestra tor (Fr aM E – F raME for Manufacturing Execution)

MES

System

Inventory

Mgt

Sales &

Distribution Mgt

Costing system

PN Available ?

PDM / PL M

Create E CR Subm it the

E CR

Assembly /

Process /P ackage /Engineer Review

Assembly /Process/Package

Manager Review & Appr oval

Check the

Affected items

PD/P E Review Quality Review &

A pprove Release ECO

Mailbox Store

PDX

NPI

Di fferentia l Change Request - from Shop floor

HOLD

CANCEL

Scheduler

ScenarioEngineering Change Management

NY

?Differential change request or a New product introduction

triggers the ECO process

?ECO process (grey background)in PDM/PLM starts with the

creation of ECR and consists of multiple stages

?After passing through various stages of review and approval ,

ECO gets released

?ECO release trigger’s the XML file generation from PLM system

depending upon the Product spine or changes made

?When the ECO process is released in the PLM system, business process orchestration of FraME™ gets triggered

?FraME™ will take over the subsequent transaction of the product information to the required transaction of MES adapters , inventory system adaptors, SD (SAP) system adaptors and costing system adaptors using XML

?Information about successful download is reflected back to Frame™ by individual adapters

?Downloaded information is signed off back in PLM against ECO number

?Frame™ sends the status of the events to the defined email

group

Frame™ Differentiators

?Product and technology agnostic

?Generic and domain specific processes captured as BPEL

scripts based on best practices

FraME™: Engineering Change Order

8

?Vertical specific extensions, business process orchestrations,

analytics and dashboards across any number of applications in engineering, shop floor and IT enterprise

Value Creation from HCL Solution – Global Visibility Dashboard, an executive level Operations KPI Analytical Dashboard

What is Global Visibility Dashboard?Global Visibility Dashboard is a web based application that is capable of retrieving real time information both from the

enterprise and plant floor. The information is presented in a rich

and appealing manner so that right info is available to the right

person to take the right decisions.

Global Visibility Dashboard has information about the following:

?Plant Information – Key Performance Indicators (KPI) and

Overall Equipment Effectiveness (OEE) Metrics

?Profit & Loss Information

?Supply & Demand Information with analytics/ what-if scenarios

Drivers for a Global Visibility DashboardThe financial health of an organization is without doubt a vital component of organizational performance. For globally spread organizations, integrating financial information from a large number of physical and electronic sources and plant operation information in real time is extremely challenging.

Global Visibility Dashboard aims at presenting the Plant OEE

(Overall Equipment Effectiveness) and Profit and Loss data along

with business flow data (related to sales order) in a single view. The

main intention to build the dash board is to give a holistic view

across the organization which helps CEO to take strategic decision

to enhance the performance of the organization. It is a web enabled

solution which can be accessed using any browser. The dashboard

will have drill

Features

Clients/Users

SAP ECC 6.0 or R/3

MS SQL

Server DB

Cl ient would access the application using

Web enabled browsers

Central SAP xMII Instance

SAP NetWeaver Platform

9

Global Visibility Dashboard allows user to view plant OEE, Profit

and Loss Visibility and Supply and Demand (related to sales order) in a single view with web enabled capabilities. This helps in:

?Increased plant operational visibility with all KPIs on one display.

?Increased awareness of plant operations and profitability due to easy visibility of key performance indicators (KPI) in a single view

?Supports better decisions with raw data converted into actionable information

?Improved visibility by getting all the information in a single

dashboard with drill down view capabilities

?Alerts option for variances and the target can be set at various

levels.

The Global Visibility dashboard Solution has a dashboard showing

three different operational parameters on a single screen view to

have more visibility and control of the present scenario. The

dashboard will show plant OEE (Overall Equipment

Effectiveness) information, Profit and loss visibility and business flow information (related to sales order) in a single view with further drill down capabilities for detailed view. It also has the alerts and reporting capabilities. The target and actual can be compared and alerts can be sent in case of any variations. The data can be easily shown in report format using PDF, XLS or HTML to Plant Manager, CFO and CEO.

Business Benefits?Real-time operational and production KPIs helps in taking

strategic decisions thereby enhancing productivity

?Web-Based Visualization with alerts capability for analytics

purpose

?Platform-independent data access

?Connections to any real-time and historical data sources

simultaneously

?Single site and Multi-site extendibility

?Universal web client

Value creation Benefits of Global Visibility DashboardThe Global Visibility Dashboard provides a means by which the plant side information and enterprise side information is available as part of single application in a web based manner with additional support to drill down to fetch lower level details. This further helps executive decision makers to evaluate “what-if ” options and weigh

10

the decision before competitors react to market changes.

3. Value Creation from HCL Solution to address Demand Visibility

Lack of demand visibility has been identified as an important

challenge for supply chain management. Customers today are

demanding perfect orders, shipped and delivered on time to the

minute, at a cost that barely leaves any margin for error -- or profit.

People in the plant do not have visibility to real time demand

information. Controlling production and inventories based on

delayed or lagged demand information easily leads to inefficient

capacity utilization, poor product availability, and high stock levels. The problem is all the more acute for discrete manufacturers as the cost for excess and obsolete inventory are both high and so is the cost of missing an order.

11

Addressing the challenge:

Demand to operations visibility allows manufacturers to sense demand and make it visible to operations for a JIT response (near real time):

?A demand-driven, pull-based system bringing real-time visibility into discrete manufacturing environments

?Creates predictability by pacing the operations to align with customer orders in production

?Synchronizes demand data, rather than just integrating it, to enable adaptive manufacturing

?Provides a single forecast across the entire organization done at

the true source of demand

The Visible Demand Solution provides a dashboard showing the

real time demand information collected from SAP. Demand

information shown is by product category, line, region, store level.

This gives a single truth of demand data to all stakeholders in the

manufacturing department. Visible demand also allows integration

of demand inputs from sources other than SAP. Demand

information is displayed for each location, customer, product family and SKU for last 3 months and next month. The user is able to choose time zone within which he is be able see demand information. The further drill down provides demand information day wise for current month and next month. Further to this the user is able to see the sales order details which is be the lowest level of detail associated for the orders for a particular day.

The dashboard also allows the plant manager to get information

related to quantity to be produced, lead time of producing, existing

inventory of end item, raw material required, existing Inventory of

raw materials, name and ID of the work centers, time needed on the

12

work centers involved. Additionally the dashboard displays a set of KPIs important for the plant managers like Days Sales in Inventory, Book to Ship Days, On-Time Shipments to Customer Request Date, On-Time Shipments to Promise Date Aggregate, On-Time Shipments to Promise Date Trend, Promise to Request Date Variance, Material Lead Time Exceptions, and On Time Delivery.

Visible Demand Qualitative Benefits

?Tailored to monitor demand in near real time (no time lapse of

24 hrs/ 48 hrs)

?Makes demand data visible to operations

?Very difficult for plant personnel to see demand data from ERPs

– Visible Demand gives a simple web based interface to plant

personnel to view demand data

?Role based views for VP Operations, Plant Manager so that only

right information is presented to the right person?Easy integration and development on SAP enterprise portal –

ensuring faster deployment?The more frequently a forecast is updated, the better it reflects

current market conditions – Visible Demand allows to revise the demand forecast as often as required to reflect fast changing market conditions

?Dashboard can be linked to plant scheduling system to do real time scheduling

4. Challenge: Accurate WIP Tracking and Reporting

Our Approach Solution “Work in Process Reporting”

Facts at a Glance:

Material Expediting and Work in Process Reporting Solution:

?Tracks work in process by work center in real-time based on production, refurbishment and maintenance order events

?Lists and prioritizes work in process according to industry standard criteria

?Is optimized for rapid and responsiveness running?Can be installed, configured and deployed in less than two weeks?No separate hardware or software required?Licensed and maintained by HCL

Pre-amble

13

WIP information system lists production order, and plant maintenance information system lists maintenance and refurbishment order operations, together with information pertinent to work order priority. Not only do these reports take some time to run for a work center, it is not possible to assess where a batch of work order parts are on the shop floor in cases where they may be split between operations (partial yield or confirmation).

Our Work in Process solution not only tracks each work order

operation at any time, but is also designed to facilitate fast reporting

of work in process prioritization including dynamic calculation of

industry standard criteria such as critical days and critical ratio.

Solution – Work in Process Tracking

Triggered by real-time work order events such as confirmations or

changes, the work in process tracking solution calculates the yield

quantity at each operation in the background, based on the following formula:?Quantity resides at first operation after a fully confirmed

operation for orders of quantity one (single-piece flow)?Quantities reside at each subsequent operation after a partially

confirmed operation based on the yield quantity minus any confirmed ones

?Work in process is assumed to have moved-through skipped confirmation operations once yield is recorded at a later operation.

Results are stored in a custom database optimized for reporting by

work-center.

Solution – Work in Process Reporting

Work in process report picks up work in process at each work center

or resource pool based on the work in process tracking table above,

with additional selection criteria by project or sales order,

production scheduler or part, plus options for filtering work in

process by order operations the user is clocked onto, or assigned to.

5. Challenge: Cost Reduction by Optimizing Disparate Applications

HCL Approach Solution is our own IP, named M-Prizm™Some of the major challenges faced by discrete and industrial manufacturing companies are:?Providing IT Asset support to globally distributed and

Scope definition and team structure

Inventory and data gathering. Questionnaires are Wizard driven, or can

be filled-in off-line and uploaded.

Business analysis including function mapping of the applications, business impact assessment and scoring logic

Benchmarks are used for comparison

Dependency Diagrams of applications and their interconnections

Function Selection based on the assessment

Rationalization based on the dependencies and selected functions

Migration planning and implementation

HCL’s Application Portfolio Rationalization Program powered by M-

Prizm for Manufacturing companies

Functional assessment with columns listing functions and applications with

the degree of capability of the application to perform a specific

function

14

independent manufacturing units spread across various low cost

countries having Plant specific business processes

?Ensuring IT Assets are mapped to the business processes

complex manufacturing systems such as make-to-Oder, Engineer-to-Order etc.

?Mergers and Acquisitions leading to a complex manufacturing IT environment with similar business process being supported by disparate IT applications.

?Managing Legacy and mainframe based Plant level IT applications which have no or very poor documentation and require regional language support specific to low cost manufacturing countries.

?Managing duplication and redundancy at shop floor, lack of

which results in increased production time and production loss

Data Driven Rationalization

HCL (www.hcltech.com) offers

ROI based application portfolio

and Legacy IT optimization

services to Manufacturing

companies using M-Prizm™ tool

by leveraging our s trong manufacturing experience with v a r i o u s m a n u f a c t u r i n g customers. The M-Prizm™ provides a methodology and business process using a set of established and proven IT software tools. The table on the right side outlines the program.

Benefits of APO with M-

Prizm™

When rationalizing among

hundreds to thousands of

applications, managing the

diversity of functions can

become overwhelming. With M-

Prizm™, appl icat ions are

clustered based on similar characteristics and capabilities. It helps to identify areas of redundancy and duplicity inherent in manufacturing organizations and helps the manufacturing organization to move toward Business aligned IT. Also it captures costs for maintenance, development, and support. Focus is brought to those areas with the highest

15

Hello, I’m from HCL!. We work behind the scenes, helping our customers to shift paradigms & start revolutions. We use digital engineering to build superhuman capabilities. We make sure that the rate of progress far exceeds the price. And right now, 60,000 of us bright sparks are busy developing solutions for 500 customers in 23 countries across the world.

How can I help you? www.hcltech.com

opportunity for rationalization and cost savings.

6. Conclusion

The many overlapping applications in a typical manufacturing company are an opportunity for cost savings. A rational methodology for rationalization is needed to break through both the technical and organizational barriers. HCL Technologies’ M-Prizm™ offers a proven ROI based approach to address such

application rationalization issues. The end result is a migration plan

and a desired application portfolio that substantially reduces

manufacturing companies IT and support costs.