Post on 05-Jan-2020
Digital Transformation Strategy and SAP
implementing projects
11 September 2019
Artyom LobzenevIrina Tivileva
1
EVRAZ in figures
EVRAZ is a global steel and mining company, the leading producer of infrastructure steel products with low-cost production along the value chain.
2
EVRAZ Information Technology
ASM TP (Scada)
MES (Manufacturing Execution System)
ERP (Enterprise Resources Planning)
Digital technology (expert systems, predictive analytics, etc.)
BI (Evraz Reporting System), Production Reporting
Production planning
(PP)
Maintenance and Repair
(PM)
Material management
(MM)
Quality Management
(QM)
Sales Management
(SD)
Procurement system(P2P)
Advanced Planning and Optimization
(APO)
Info
rmat
ion
Se
curi
ty,
Infr
astr
uct
ure
Business customer«Big» IT
3
Why do we need Digital Transformation
Increasing Productivity and Energy Efficiency
Improving term accuracy of production orders
Reducing the risk of emergency events, unplanned downtime
Reducing risk of production shutdown
Increasing HSE maturity
Reducing in stocks and scrap
Reducing data preparation time for analysis and decision making
Improving accounting transparency
4
Digital Transformation Strategy Approach
Seminar with the management of the Company to develop of basic principles and directions of
development IT and DT
2
3
4
5
Vision for IT and DT development
Target level of automation of basic IT
services
Priority areas of IT and DT
development
1
Project roadmaps based on the
principle of Digital ready
Form and implementation of new approaches to the realization of IT
and DT projects
Implementation of IT and DT strategies
5
Key Trends in Digital Transformation
Basic IT services: automation of business processes,information security, quality IT services, ensuring business continuity etc.
Expert systems
Production accounting
Production dispatch room
Predictive analytics
Digital Maintenance
End-to-end quality management
Production planning
EDI
Autonomous equipment
Mobile Solutions
Video analytics
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How to Implement Digital Transformation Projects Effectively
PROJECT METHODOLOGY• Using Agile with Rapid Prototyping Approaches• Greater involvement of the business customer (Product Owners)• The calculation of the economic efficiency of the project
DT EXPERTISE CENTER• Monitoring DT best practices• “Pulling” and implementation of DT initiatives• Culture changing
RESOURCE PROVIDING• Creating of an additional development center (outside Moscow)• Strengthening Project Managers
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The landscape of the main information systems
Core SAP ERPSAP HCM
MES
ASM TP
Solution 1
Solution 2
Solution 3
Solution 4
AS IS
Wonderware In-house solutions
SCADA SensorsHistorian Controllers
TO BE
Azure ML
Hybrid integration platform (HIP)
Core SAP ERP
MES
ASM TP
Deeper consolidation of MES systems
UnificationThe increase in the number of sensors and controllers
SAP HCM
Azure ML Ariba Salesforce HSE SAP BI EDIMobile
PlatformBPM Ariba Salesforce SAP BIHSE EDI
Mobile Solution
Others
1С 1С
Others
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Our SAP projects (selected)
Plant Maintenance Monitoring and reporting system
Maintenance labor dispatching on SAP MRS
Operational planning system for Chief Mechanic department (own spare parts production) on SAP ERP and SAP APO PP/DS
Punchout procurement catalogs on SAP Ariba Catalog
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Plant Maintenance Monitoring and reporting system
Project goals
Improving the efficiency of maintenance business processes Development of analytical reports on maintenance and
monitoring KPI
Development of a tree of goals and tools for monitoring the results of the maintenance business process. Evaluation of these indicators for maintenance efficiency
Development of a KPI analysis concept for various levels of performers and managers
Development of a visualization tool based on BW for the analysis of maintenance results and management decisions
Project objectives
SAP ERP (ТОРО)
SAP BWBI
reporting
SAP HCMDowntime accounting
system
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Maintenance labor dispatching on SAP MRS
Project goals
Improving the efficiency of repair personnel Improving the convenience of operational planning of
repair activities Providing planners with reliable information on loading
repair personnel
Setting up the detailed planning function (by resources) taking into account existing maintenance tasks and inspections from SAP ERP Plant Maintenance
Setting up integrated planning (by task) Adjustment of capacity balancing functionality for
workplaces of workshop personnel, repair shop personnel and contractors
Reporting forms directly from the planning panel
Project objectives
SAP ERP (PM) SAP MRS SAP HCM
Results / Effects
Reducing the labor costs of the planner when balancing the working capacity for workshop repair personnel by 2 times or an average of 25 hours per month
An increase the share of work performed by our own staff by 467 man-hours in 6 months without an increase in the number of repair personnel
Reduced production downtime for repairs from 32 to 30 hours A 10-fold reduction in the share of activities that were not completed as part of
repairs due to improper planning of deadlines and workload of performers (or 1% of the increase in absolute terms)
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Operational planning system for Chief Mechanic department. SAP APO PP/DS (1)
Project goals
Ensuring maximum, balanced loading of personnel and equipment groups
Operational re-planning of the production program, taking into account the changed priorities for fulfilling needs, with an assessment of the impact of unplanned orders
Tracking lead times
Reliable primary accounting in the SAP system
Production Rate Management
Formation of a plan for loading the enterprise’s production capacity in the context of shifts, ensuring the implementation of the IGM production program
Separation of planning and production functions
Wide availability of relevant information on the production of spare parts
Early detection of equipment overload and underload problems
Project objectivesСхема ежесуточного задания по планированию производства УГМ
SA
P E
RP
SA
P A
PO
Z-Программы
корректировки
мощностей рабочих
мест, модификации
ОЗМ и РР-заказов
Стандартные
транзакции генерации
и активации
интеграционных
моделей
Стандартные
транзакции передачи
данных удаления
СПД и присвоения
ОЗМ к области ППМ
Расфиксация
операций на
горизонте от -90 до
-2 дней
Разделение
операций
(невыполненные
части)
Перенос
невыполненных
частей операций на
+3 день
Фиксация ресурсов
в горизонте от -1 до
+2 дней
Расфиксация
операций на
горизонте от -2 до
+6 месяцев
Многоуровневое
ППМ по всем
продуктам
Календарное
графикование
(общий алгоритм)
Календарное
графикование
участков литья
ФЛЦ
Календарное
графикование
участков резки
ФЛЦ
Расфиксация
операций на
горизонте от -2 до
+6 месяцев
Расфиксация всех
ресурсов
Преобразование
плановых заказов
в
производственные* FLC: shaped foundryMERS-3: cutting and metalworking shop
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Operational planning system for Chief Mechanic department. SAP APO PP/DS (2)
Target status
ProductionMERS-3
Combining TCD and Warehouse
2 days
Production FLC
Warehouse FLC
WarehouseMERS-3
ProductionMERS-3
Before system implementation SAP APO PP/DS
Term
s ar
e n
ot
regu
late
d d
uri
ng
the
pro
du
ctio
n p
erio
d
X days
X days
X days
Results / Effects
4-Day reduction IGM Production cycle
Save the level of stocks (materials, production assets) by 6 times
Increase in the proportion of orders executed on time
Optimization of the number of IGM personnel involved in the planning, provision and execution of the production program
Improving the productivity of areas of in-house manufacturing of spare parts with the replacement of third-party contractors and procurement
Opportunity:
shorten the supply chain “Procurement - Shipment of suitable products”
Decision:
Delivery of blanks to the “Just in time” production
Consolidation of liability for procurement warehouses in FLC on MERS-3
Expanding the functionality of TCD controllers with responsibilities for the receipt / accounting / storage / consumption of Inventories
Target status
Production FLC
Warehouse FLC
ProductionMERS-3
2 days
2 days
Before system implementation SAP APO PP/DS
TCD
ProductionMERS-3
Warehouse of finished goods
2 days
2 days
* FLC: shaped foundryMERS-3: cutting and metalworking shop
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Punchout procurement catalogs on SAP Ariba Catalog (1)
Implementation of SAP Ariba Catalog at EVRAZ enterprises
Project goals Project objectives
Defining target purchasing patterns using catalogs
Definition of criteria for “cataloging” nomenclatures
Ariba Catalog and SAP ERP Integration
Synchronization with the internal directory of goods and materials
Involving and training suppliers
Increasing applicants' satisfaction by reducing the time needed to meet needs, increasing transparency and accuracy of the procurement process
Reducing company operating costs in the execution of the procurement process
Minimizing the risk of violation of the terms of the contract due to automatic control of compliance with the conditions of the purchase order and the terms of the contract
Self-Service Purchasing
Reducing the time from the formation of needs to creating a purchase order by reducing the number of competitive procedures, using of data uploaded to suppliers catalogs and improving the management process of NSI
Reduced labor costs for processing needs by automatically assigning a source of supply to create a purchase order
Convenient service for applicants of goods and materials (automatic search, product description, delivery time, image, analogues and related products, etc.)
Reduced labor costs for downloading catalogs and updating supplier prices by self-loading / updating catalogs by suppliers
Results / Effects
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About the project “Implementation of SAP Ariba Catalog at EVRAZ enterprises”(2)
Organizational scope of the project 2018 2019 2020 +
Raspadskaya Coal Company LLC
(Coal Division, the number of users is 300 people)Implementation Pilot operation Industrial exploitation
JSC Kachkanar Mining and Processing Plant
(Ural Division, number of users 100 people)Implementation Pilot operation Industrial exploitation
JSC West Siberian Metallurgical Plant / Evrazruda
(Siberia Division, the number of users is 800 people)Implementation Pilot operation
JSC Nizhny Tagil Metallurgical Plant
(Ural Division, number of users 1000 people)Implementation Pilot operation
Attracting suppliersPilot suppliers
20 Russian companiesAttracting an additional ~ 80 suppliers
Catalog types:
Punch Out dynamic catalogs - integration of the supplier’s online store with the customer’s accounting system via SAP Ariba
Internal Excel catalogs - the supplier creates Excel catalog and loads it to buyer account in Ariba Network
Object: stocked materials
Selection criteria for catalog items:
Low-cost goods and materials
Wide range of SKUs supplied by the supplier
The presence of a long-term contract with the supplier (1 year +)
Fixed pricing conditions (discount from the price / price formula)
Market readiness (suppliers are ready to create catalogs according to the Ariba pattern)
Внедрение SAP Ariba Catalog на предприятия ЕВРАЗаImplementation of SAP Ariba Catalog at EVRAZ enterprises
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Potential for catalog coverage
Внедрение SAP Ariba Catalog на предприятия ЕВРАЗа
Nomenclatures for translation into Ariba catalogs:
• Tools (construction, metal-processing, mining, etc.)• Electrotechnical products• Instrumentation• Plumbing products• Rubber-technical products • Parts for cars and special equipment• Spare parts for pumps• Spare parts for mining equipment
• Stationery (punch out)• Household goods and small household appliances• Spare parts for railway equipment• IT machinery and equipment• Bearings (General Industrial)• Construction Materials (except for reinforced
concrete products, met. designs and bulk materials)• Hardware• Industrial oils
2018-2019 yy.
In development
Goal: reduce labor costs for the purchase of a large number of low-cost goods and materials
7%
Share of catalog items in the total amount of purchases
34%
Share of catalog itemsin the general assortment of goods and
materials purchased
Implementation of SAP Ariba Catalog at EVRAZ enterprises
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Process flow with Ariba catalogs
Внедрение SAP Ariba Catalog на предприятия ЕВРАЗа
Agrees the directory loaded by the supplier
Provides synchronization of Ariba directories with the
internal inventory directory of goods and materials
Publishes an approved directory
Forms a shopping cart and sends the order to ERP
Agrees /rejects need
Pro
vid
erP
urc
has
erC
lien
tA
gree
Processes the order and delivers the goods
Loads a directory
to the cloud Ariba
SAP Ariba Catalog SAP ERP
Generates a purchase order
Procurement procedure
ППМ (очистка потребности от
запасов)
PRS (purification of requirements from stocks)
Automatic control of the
workshop budget
Implementation of SAP Ariba Catalog at EVRAZ enterprises
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Vendor’s catalog visualization in SAP Ariba Catalog
Внедрение SAP Ariba Catalog на предприятия ЕВРАЗаImplementation of SAP Ariba Catalog at EVRAZ enterprises