SAP Adaptive Manufacturing Summitfm.sap.com/pdf/8182/07_Hume_White.pdf · SAP Adaptive...

Dave Hume, Executive Director, Lenovo CIO Project Office

Bill White, Seal Consulting

SAP Adaptive Manufacturing Summit

September 28th, 2006, Denver, CO

Lenovo: Manufacturing Excellence

leveraging Production Operations

in China

Data Integration Roadmap/Landscape

Summary and Recorded Simulation

Company Background and Challenges

Addressing the Business Challenges

SAP AG 2006, Title of Presentation / Speaker Name / 3

2

初创时的联想初创时的联想初创时的联想初创时的联想

Lenovo in 1984

� Founded by 11 researchers

� Initial investment: US$25K

Who Is Lenovo?

Lenovo Today

� 20,000+ employees

� Revenues: US$13 Bn


1000 PC Patents filed in last 4 1000 PC Patents filed in last 4

yearsyears900 Lenovo engineers and scientists

800 former IBM research & development staff in Raleigh and the renowned ThinkPad Japan

Design Center

IBM IBM –– ThinkPad, ThinkPad, ThinkCentreThinkCentre, ,

ThinkVantage Technologies win ThinkVantage Technologies win

more awards than any other PC more awards than any other PC

company company

Lenovo: Intel Most Innovative Lenovo: Intel Most Innovative

PC Award from Intel 5 years PC Award from Intel 5 years

runningrunningPowerful R&D Capability Powerful R&D Capability

on both Computing and on both Computing and

CommunicationsCommunications

Founder of Founder of Personal ComputerPersonal Computer

Leading Innovation Leading Innovation in PC Industryin PC Industry

Deeply UnderstandingDeeply Understandingon both Consumer and on both Consumer and Commercial customerCommercial customer

Lenovo Innovation for Customer Value and Benefits


Lenovo’s Challenges

Market Challenges

� Competitive Market

� Customer Satisfaction

� Product Innovation

� Supply Chain Velocity

� Customer TCO From Purchase to Disposal

Company Challenges

� Combined Company Dynamics (IBM / Lenovo)

� Total New Infrastructure Migration

� Factory / Business Expansion

� Supply Chain Assurance

� Internal Visibility to Operations


Superior Performance – IT is the Key Enabler

Lenovo China

Lenovo International

One Lenovo

� Global Business Processes

� Central/Integrated IT Systems

� Central Planning and Control

� Dual Model

� Centralized Inventory Mgmt

� Real-time Data Visibility

� Flexibility to Adapt to Change


China PC Revenue

Dell, 10%

Others, 33%

HP, 9%

Founder,

10%

Lenovo,

38%

Leveraging the Very Best of Lenovo China

Global PC Leadership

Building on the Model of Success

GOING GLOBAL �� World-class Practice

� Estimated $ 250 MM company-wide savings

� Build an industry leading supply chain

- Reduce end-to-end Supply Chain Cost by 15%

- Compress Order Fulfillment lead time from 14 to 10 days

- Maintain low DOA level

� Targeted 1.1% corporate E/ R

� Pursuing new market opportunities


Global Network: Foundation for Strategic Platform

China Regional Net

Sites

RTP

Americas Regional Net

Global Data CenterCommand Center

SitesSites

Sites

TBD

EMEA RegionalNet SitesSites

Sites

AP Regional Net SitesSites

Sites

SZN/HK

China Regional Net SitesSites

PEK

Global Backbone

Sites


Worldwide Lenovo Manufacturing

Beijing, CHN

Shanghai，，，，CHN

Shenzhen，，，，CHN

Huiyang，，，，CHN

Beijing, CHNBeijing, CHN

ShanghaiShanghai，，，，，，，，CHNCHN

ShenzhenShenzhen，，，，，，，，CHNCHN

HuiyangHuiyang，，，，，，，，CHNCHN

Chengdu ,CHNChengdu ,CHN

Juarez & Monterrey，，，，MexicoJuarez & MonterreyJuarez & Monterrey，，，，，，，，MexicoMexico

RTP，，，，NCRTPRTP，，，，，，，，NCNC

BrazilBrazilBrazil

Tiburg，，，，NTLTiburgTiburg，，，，，，，，NTLNTL

DubaiDubai

Hungary & CzechHungary & CzechHungary & Czech

CM Plant

In-house Plant

DC

Pondi ,INDPondiPondi ,IND,IND

Bangalore ,INDBangalore ,INDBangalore ,IND

Toronto，，，，CATorontoToronto，，，，，，，，CACA

Miami, FLMiami, FLMiami, FL

Data Integration Roadmap / Landscape

Summary & Recorded Simulation

Addressing The Business Challenges



The Business Challenge

Supply Chain Velocity

� Satisfying the Perfect Customer Order Requirement

Performance Measurements

� Key Performance Indicators (KPIs)

Management Visibility

� Decision Support (Near Real-Time)


The Perfect Customer Order – With Manufacturing Visibility

Plant To BusinessVisibility – SAP xMII

End User Order

Production Control

mySAP

EndProduct


Near Real Time Factory Integration

Shanghai

Beijing

Products

Desktop PC’s

Servers

Huiyang

Products

Desktop PC’s

Peripheral

Products

Desktop PC’s

Notebook PC’s

Supporting the Perfect Order

� Master data synchronization� Transactional integration� Dashboards – plant, division, region,

enterprise

Plant To BusinessVisibility – SAP xMII

End User Order

Production Control

mySAP

EndProduct

End User Order

Production Control

mySAP

EndProduct


Target Key Performance Indicators

Delivery Reliability Flexibility & Responsiveness Cost Asset Management

Schedule Achievement Schedule Cycle Time Total WIP Inventory Capacity Utilization

Inventory Accuracy Schedule Interval Material Losses Cash To Cash Cycle Time

Warranty & Returns Make Cycle Time Schedule Resource CostFinished Goods Inventory Days Of

Supply

Yield Material Requisition Cycle Time Inventory Obsolescence Touch Labor Job Classification

Quality Levels % Of Parts Delivered To Point Of Use Raw Material Days Of Supply Cross Training

Scrap Expense Item/Product/ Changeover Time Total Manufacturing Employment Yield Variability

In Process Failure

Rates

Ration of Actual to Theoretical Cycle

Time

Value Added Employee

Productivity

Ratio Of Actual To Theoretical Cycle

Time

Warranty Costs Intra-Manufacturing Replan Cycle Asset Turns

Staging Time Total Build Cycle Time Warranty Costs

% Release Errors Build To Ship Cycle Time Scrap Expense

Production Flexibility Quarantine Time - MRB Packaging Costs

% of Scheduled to

Customer RequestNumber of ECOs Inventory Carrying Costs

Capacity Utilization Deliver To Commit DatePlant Level Order Management

Costs

Order Fulfillment Cycle Time ECO Cost

Inventory Days Of Supply

Customer Facing Internal Facing

Level Three Metrics

Primarily Customer Focused Targets


Management Visibility – Decision Support

Near Real Time Execution – Satisfying The Business Challenge

Executive Metrics to Line Level Measures

Business Level

Plant Level

LineLevel

KPI BusinessDriven Performance

Targets

KPI BusinessDriven Performance

Targets

KPI Flow-downPlant Level Line Level

KPI Flow-downPlant Level Line Level

Line Level DataActuals Feed Plant

Consolidator

Line Level DataActuals Feed Plant

Consolidator

Plant LevelConsolidated Data

Feeds SAP, Portal, BW

Plant LevelConsolidated Data

Feeds SAP, Portal, BW



Addressing The Business Challenges



Plant & Business Management Reporting Roadmap

20082008

CURRENT STATE

• Multiple reporting approaches

• Very limited visibility

• Limited equipment downtime monitoring

CURRENT STATE

• Multiple reporting approaches

• Very limited visibility

• Limited equipment downtime monitoring

Phase I

• Initial KPI reporting

• Global production metrics

• Automated production reporting

• Equipment reliability monitoring

Phase I

• Initial KPI reporting

• Global production metrics

• Automated production reporting

• Equipment reliability monitoring

Phase II

• Individual line productivity

• Elemental usage automation

• Portal Integration Plant / Enterprise

• Multi Plant Comparative Analysis

Phase II

• Individual line productivity

• Elemental usage automation

• Portal Integration Plant / Enterprise

• Multi Plant Comparative Analysis

Phase III

• Supplier Data Integration

• Automated supplier defect reporting

• Fully automated inspection results to enable auto repair

• Integration –Supplier Test

Phase III

• Supplier Data Integration

• Automated supplier defect reporting

• Fully automated inspection results to enable auto repair

• Integration –Supplier Test

Reacting

Basic Accuracy

Productivity and Compliance

Productivity and Process Integration

Demand Driven

Anticipating Interactive Collaborative

Managing the PerfectCustomer Order


Simple Manufacturing Process

Pro V

VMI HUB

Production Order

DetailedScheduling

Production Order(SAP)

Material Staging

AssemblyImage

Preload

TestingPO Confirmation

(SAP)Package &

LabelQA

Order Completed

KPI Target Integration (SAP xMII)


Lenovo Runs the mySAP Business Suite

� Master Data Management

� Payroll Processing

� Incentive and Commissions Mgmt

� eLearning Management

� eRecruiting

� Strategic Sourcing

� Global Trade management

� Global Trade Services

SellMake MoveBuy Service

mySAP ERPFinancials, Human Resources, Procurement, Inventory, Production, Sales Order Management

Customer Relationship Management

Enterprise Service Architecture

Design

Business Warehouse – Strategic Enterprise Management

Supply Chain Management

Supplier Resource

Management

Product Lifecycle

Management

� Extended Warehouse Mgmt

� Financial Supply Chain Mgmt

� Trade Promotion Mgmt

� Treasury & Risk Mgmt

� Transportation Optimization

� eCommerce and Channel Mgt.

� Exchange Infrastructure

� EH&S for Wee Roos compliance

� Vendavo Price Quote Management

� xAPP Cost & Quote Management

� Adobe Interactive Forms

� Advance Planning & Execution

� Event Management

� Inventory Collaboration Hub

� InfoPak Learning Tool

Enterprise Portals

� SAP xMII – Plant to Business Integration


Multi Stage Information Integration Process

Linking Factory MES Performance KPIs to Enterprise Portal

� Department Level Reporting

� Country Level Reporting

� Cross Country Operations Level Reporting

� Line of Business Reporting

Bi Directional Information Integration

� Production Work Order Release Integration With MES

� Material Management Synchronization – SAP / MES

� Up Link of Factory Performance KPIs

Material / Component Supplier Integration

� Delivery / Logistics Information

Selective Test Equipment Integration

� New Product Introduction Performance Reporting / Monitoring


Ratio of Actual to Theoretical Cycle Time

Plant Level – Executive Reporting

Utilization Staging

Schedule YieldVariance

In Process

Total

Logistics

Assy Cycle



Addressing the Business Challenges



Evolution of Adaptive Manufacturing (Interoperability)

70s 80s 90s 200X

Time in Years

High

Affordable

Cost

Aerospace – Government FundedDirect Numerical Control (DNC)

Adaptive Control Milling (Feeds & Speeds)

Automotive - InspiredManufacturing AutomationProtocol (MAP) Intelligent

Communications

Industry StandardsS95, OAGi, RosettaNet, SEMI Plus

MES Vendors & Automation Supplier Solutions

SAPxMII

Release


Summary

� Enterprise Interoperability is a Key Element of

the Solution Framework

� SAP is core to enabling this Solution Framework

� SAP xMII provides the cornerstone for plant-to-

business integration and KPI based performance

management

� Is Based on Industry Standards

� Includes Certified ERP and Plant Adapters

� Is Aimed at “Plug and Play” Simplicity

� Enables Integration with Current Infrastructure

at the Lowest TCO

Recorded Simulation

Vaidy Iyer


SAP NETWEAVER

Oth

er

SA

P B

us.

So

lu t

ion

s

SA

P

BI

mySAP ERPSAP Manufacturing

mySAP SCM

Manufacturing Intelligence Dashboards

XI

Simulation Framework

MES – Manufacturing Execution Systems, EMI – Enterprise Manufacturing Intelligence, BW – Business Warehouse (from SAP)SFAC – Shop Floor Automation & Control,

SAP xMII

The SAP xApp Manufacturing

Integration and Intelligence (xMII) is a

packaged composite application that

delivers:

Manufacturing Integration

Manufacturing Integration: A single

ISA-95 compliant layer enabling SAP ERP

connectivity into real-time plant floor apps.

(MES, SFA, legacy apps.) to drive plant-to-

enterprise business process interoperabilityManufacturing Intelligence

Manufacturing Intelligence: Real-time

analytics engine that aggregates and delivers

unified visualization of events, alerts, KPIs and

decision support to production personnel thru

role-based dashboards

Dave Hume, Executive Director, Lenovo CIO Project Office

Bill White, Seal Consulting

SAP Adaptive Manufacturing Summit

September 28th, 2006, Denver, CO

Lenovo: Manufacturing Excellence

leveraging Production Operations

in China


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SAP Adaptive Manufacturing Summit 2006

Colorado Convention Center

Denver, Colorado

September 27-28, 2006

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