session 2: innovation management & manufacturing scenarios

Session 2:Innovation Management & ManufacturingScenarios

SAP Industry Business Unit ChemicalsManoj NarangSeptember 30, 2009

1. Innovation Management1.1. Definition, Overview and Relevance for Chemicals1.2. Scenarios coverage in SAP Best Practices for Chemicals

2. Manufacturing Execution2.1. Manufacturing in Chemical Industry2.2. Production Models, Scenarios in SAP Best Practices for

Chemicals3. Demos

3.1. Transformation of General Recipes (942)3.2. Bulk Manufacturing (with PI Sheet and SAP ODA

Integration)(908)4. Useful Links

Agenda

Terminology

SAP Business All-in-One for Chemicals

SAP implementation with defined scope and price

Available from SAP and qualified partners

SAP Business All-in-One for Chemicals

SAP implementation with defined scope and price

Available from SAP and qualified partners

SAP Best Practices for ChemicalsPreconfigured Industry Template

SAP Best Practices for ChemicalsPreconfigured Industry Template

SAP ERPSAP ERP

Partner Packaged ServicesImplementation offering

Partner Packaged ServicesImplementation offering

+

+

=

© SAP 2009 /

SAP for Chemicals : Chemical Solution Map

Suppliers &Partners

Customers &Channels

Develop Plan Source Make Deliver Sell & Serve

Enterprise Management & Support

Innovation ManagementR & D Management

Product Development

Supplier CollaborationStrategic Sourcing

Procure to Pay

Supply Chain Planning & ExecutionCollaborative Demand & Supply Planning

Logistics & Fulfillment PlanningWarehouse & Inventory Management

ManufacturingManufacturing Planning

Manufacturing Execution & CollaborationManufacturing Visibility

Enterprise Asset Management

Sales & MarketingSales and Operations Planning

Opportunity ManagementInquiry to Contract

Order to CashCustomer Service & Complaint

Management

Quality Management & ComplianceQuality Management

Environmental, Health & Safety ComplianceREACH Compliance Management

Corporate Compliance

© SAP 2009 /

SAP Best Practices for Chemicals –Scenario Overview

Stock Handling: Scrap and BlockedStock (131)Repetitive Manufacturing with Co-Products and QM (906)Bulk Manufacturing (without PISheets) (907)Bulk Manufacturing (with PI Sheet andSAP ODA Integration) (908)Make-to-Stock (Process Industry) withWM (909)Make to Order (Process Industry) (910)Multiple Product Campaign Run withMQC (911)Active Ingredient Processing (912)Blending (913)Repackaging (914)Relabeling (915)Storage Tank Management (916)Subcontracting (External & Internal)(918)

Enterprise Management &Support

General Ledger (156)Accounts Receivable (157)Accounts Payable (158)Period End Closing FinancialAccounting (159)Cash Management Status Analysisand Cash Concentration (160)Cost of Sales Accounting (161)Asset Accounting (162)Asset Acquisition for ConstructedAssets (164)Segment Reporting (166)General Cost Center Planning (175)Internal Order for Marketing and OtherOverhead Planning (180)Overhead Cost Accounting - Actual(184)Internal Order for Marketing Expensesand Other Overhead Actual (186)Time Recording (211)SAP ERP Reports for Accounting (221)Period End Closing Activities (224)Operational Maintenance (929)Preventive Maintenance (930)Investment Management in PlantMaintenance (932)Parallel Accounting (leading HGB,+IFRS) (943)

Manufacturing

Supplier Collaboration

Quotation for Procurement (128)Consumable Purchasing (129)Procurement without QM (130)Procurement Contract (133)Return to Vendor (136)Procurement & Consumption ofConsigned Inventory (139)Procurement of Batch-Managed StockMaterials (901)Procurement of WM-Managed StockMaterials (902)Procurement of Pipeline Materials (903)Procurement of External Services (904)Quality Management in Procurement(905) Quality Management &

ComplianceEngineering Change Management(934)EH&S Product Safety (935)EH&S Dangerous Goods Management(936)EH&S Industrial Hygiene & Safety(937)EH&S Waste Management (938)EH&S Business Compliance Services(939)REACH: Substance Volume Tracking(940)REACH: Substance Volume Trackingfor Non-EU Suppliers (944)

Supply Chain Planning &Execution

Lean Warehouse Management (124)Stock Transfer with Delivery (134)Stock Transfer without Delivery (135)Physical Inventory / Inventory Count &Adjustment (137)SAP ERP Reports for Logistics (222)Supply & Demand Planning (900)Tank Trailer Filling (919)Outbound Logistics (923)Totes Handling (927)Vendor-Managed Inventory (928)

Innovation Management

Internal Order R&D Planning (177)Internal Order R&D Actual (185)Transformation of General Recipes(942)

Sales & Marketing

Sales Processing using Third Party(with Shipping Notification) (107)Credit Management (108)Sales Order Processing: Sale fromStock (109)Free of Charge Delivery (110)Returns and Complaints (111)Sales Quotation (112)Sales Order Processing for Prospect(113)Sales Processing using Third Party(without Shipping Notification) (114)Sales of Non-stock Item with OrderSpecific Procurement (115)Debit Memo Processing (116)Sales Order Processing withCustomer Down Payment (201)Sales: Period End and ClosingOperations (203)Credit Memo Processing (204)Sample Processing (917)Presales Activities (920)Sales Order Processing (incl. PoD andCoA) (921)Sales Order Processing with WM (922)Returns and Complaints (including QMand Batch Recall) (924)Chemicals: Credit Management (925)Rebates Handling (926)

© SAP 2009 /


2. Manufacturing Execution2.1. Manufacturing in Chemical Industry2.2. Production Models, Scenarios in SAP Best Practices for Chemicals

3. Demos3.1. Transformation of General Recipes (942)3.2. Bulk Manufacturing (with PI Sheet and SAP ODA Integration)(908)

4. Useful Links

Agenda

Innovation Management - Definition

Creativity and Imagination applied in a business context is Innovation”,“ Innovation is Imaginative Problem-Solving”Textbook definition indicates that, “Innovation is the first successful commercializationof a new idea”.

Product Development for Specialty Chemicals(Example)

OpportunityidentificationFinancialevaluation

Determinationof resources,timeframe,and so on

Product andprocessspecification

Laboratorywork

Final productdefinitionProduct pricingMarketingactivities

Pilot plantscale-up andadjustments

Customersampleevaluation

Internalsampleevaluation

External andinternalrequirements

CustomersMarkets

Full-scaleproductionadjustments

Sample evaluation

Product and process adjustments

ConceptDevelopment

SpecificationInitiation

SpecificationDevelopment

SpecificationConversion

SpecificationManagement

Initiate Phase-Gate Process

Initiate Phase-Gate Process

Enter ProductDefinition

Enter ProductDefinition

SpecificationSpecificationVendor

CollaborationVendorCollaboration

LabelManagement

LabelManagement

RecipeDevelopmentRecipe

Development

Create PlantOperating Formula

Create PlantOperating Formula

ChangeManagementChange

Management

Link to Materials/BOM Gen.

Link to Materials/BOM Gen.

Integrated Product DevelopmentEnd-to-End Process – Chemicals Industry

Portfolio and CustomerRequirements Management

Ramp-upto Production

ProductDevelopment

Marketing

Manufacturing

DevelopmentHead of R&D

PortfolioManagementHead of Marketing

Head of Manufacturing

ProcurementHead of Procurement

QualityEngineering

andImprovement

Concept /Business Case

Mgmt

StrategicSupplier

Identification

“New Product”Initiative

Management

ProductionScale-up andHandover to

Manufacturing

ProjectMgmt

Integrated Product Development integrates Product Development, CustomerRequirements Management and Ramp-up to Production to streamlineprocesses, unify product data and reduce time to market.

Collaborationwith

Customersand Partners

CompliantRecipe

Development

Lab Trials andSamples

Product /Process Data

ChangeManagement

Head of ManufacturingHead of Marketing Head of R&D

Product Division Head

Suppliers & Partners Customers &Channels



Product Development

SAP ERP Solution:Specification ManagementRecipe Management and TrialsR&D Project ManagementKnowledge & Document ManagementCollaboration tools

Business Issues:Meet regulatory & complianceneedsManage capital investmentsManage resources and stagegate projectsVisibility in developmentactivitiesDevelop new marketsMeet customer formulationneedsView of all R&D portfolioCross functionalcommunication & planningDocument product formulasMinimize R&D costsKnowledge retention

Benefits:Faster time to marketStreamlined Development ProcessesMinimize R&D spendStronger program managementKnowledge retention & sharingEasy regulatory compliance

Innovation Management in Chemical SolutionMap

© SAP 2009 /

Recipe Management as per ISA 88.01

Separates the recipe that describes how the batch is to be made from the equipment used tomake the batchStandard covers four basic concepts:

How to depict what you have in the plant (physical model)How to define what you would like to accomplish in the plant (recipe)Implementation of what you can do in the plant (equipment logic)How to put the three pieces mentioned above together in an intelligent, reusable andsuccessful way

The Recipe is the necessary set of information that uniquely defines the productionrequirements for a specific product

One General Recipe per produced material, maintained at theenterprise level (1000 company wide products)

One Site Recipe per site and produced material, maintained atthe site for local materials, language, or segment of production(10,000 site recipes for 10 sites)

One Master Recipe per Process Cell and produced material(50,000 master recipes for 5 cells per site)

One Control Recipe per batch that describes the custom optionsand formula values for one specific batch of product (1,000,000batches per year)

Key FunctionalitySpecification, formula, recipe and trial definitionhandling and execution in a single environment.

A “trial monitor” for control - starting in thelaboratory environment down to pilot plants andproduction.

Extended functions to calculate productproperties

Fully automated creation of recipes from thedevelopment level down to the execution

Company wide recipe definition using a Recipehierarchy: Master ->Site -> Production

Sophisticated Change & Version Mgmt

Key BenefitsEnhanced usability by integrating product,formula and quality definition and execution intoone environment

Speed up development process by userguidance and provided automation ofdevelopment steps

Recipe Management provides a workbench that enables the customer to manage theproduct development process starting from the initial recipe up to the final master recipefor production. Trials manage scale-up activities from lab scale to production volume.

Recipe Management and Trials

© SAP 2009 /



3. Demos3.1. Transformation of General Recipes (942)3.2. Bulk Manufacturing (with PI Sheet and SAP ODA Integration) (908)

4. Useful Links

Agenda

Chemical Solution Map - Scenario Alignment

Suppliers &Partners

Customers &Channels



Product DevelopmentSAP Best Practices Scenario:

Internal Order R&D Planning (177)Internal Order R&D Actual (185)

Transformation of General Recipes (942)

© SAP 2009 /

Internal Order R&D Planning (177)

Internal Order R&D PlanningThis scenario makes use of SAP’s internal order functionality to track costs andstatusVarious internal projects consume resources and incur costs or expenses.These projects are usually undertaken for development of future products.Planned and actual costs of these projects need to be tracked at product linelevel for various purposes such as cost control, return on investmentcalculations, tax reporting and so on.For every project an internal order is created. Internal orders are used to plan,collect, and settle the costs of internal jobs and tasks.Cost planning is carried out on this order. The planned costs can also be settledto the assigned R&D cost center or to CO-PA (if CO-PA is activated).

BenefitsPossibility to compare planned and actual costs on internal orders, monitoring ofcosts and order status.

Scenario 177 - Internal Order R&D Planning

DataCorrect?

ExpenseInternal Order

(188)

AOP – GeneralCost Center

Planning(175)

Confirm AllOrders HaveBeen Settled

Correctly

AnnualOperating

Plan

Credit Internal OrderPlanned Values

Debit ProfitabilityAnalysis, e.g. R&D

by Product Line

No

Enter R&DOrder Plan

Data by CostElement

Internal OrderPlanned Values

Yes

AOP= Annual Operating Planning

Settle R&DOrder Costs to

ProfitabilityAnalysis

R&

D P

lann

erEv

ent

© SAP 2009 /

Scenario 185 - Internal Order R&D Actual

Create R&DInternalOrder

(155.12)Settle Order Costs

to CO-PA

New InternalProjects(for R&D)

Profitability(CO-PA) Update

CO-PA = Profitability Analysis

Thistask

done atend ofmonth

Need ExternalServices

Month EndNeed Materialfrom

Inventory

ConsumablePurchasing

(129)

Post Goods Issueto R&D Order

InventoryExpense

Thesetasksonly

done asneeded

Cos

t Acc

ount

ant

War

ehou

se C

lerk

Buye

rEv

ent

© SAP 2009 /

This Scenario depicts transfer of experimental data of a general recipeinto master recipes for production.The following processes are provided to support the Transformation ofGeneral Recipes scenario:

Displaying general recipeTransforming general recipe to master recipeMaintaining and finalizing master recipeCreating process order with transformed recipe

Transformation of General Recipes (942)

Scenario 942 - Transformation of General Recipes

Maintaining andFinalizing Master

Recipe

Creating ProcessOrder

PerformingProcess OrderConfirmation

TransformingGeneral Recipe to

Master RecipeDisplaying

General Recipe

Engi

neer

ing

Spec

ialis

tSh

op F

loor

Spe

cial

ist

Prod

uctio

n Pl

anne

r

© SAP 2009 /



3. Demos3.1. Transformation of General Recipes (942)3.2. Bulk Manufacturing (with PI Sheet and SAP ODA Integration)(908)

4. Useful Links

Agenda

Manufacturing In Chemicals – A ComplexWorld

Source

Enterprise

Cus

tom

er D

eman

d

Plan

Supp

liers

Material Supply

Delivery toDistributionCenters andCustomers

Planning

Quality Mgmt.

Maintenance Inventory Mgmt.

Plant Mgmt,KPI-Reporting

Raw Materials Finished Products

Production

Make Deliver

Financial ServicesEnterprise ServicesStrategic Decisions

Factory

Manufacturing is the process of converting raw materials intohigher valued finished products to meet customer demands

Specifics of Chemicals Manufacturing:Batch & continuous processesBulk & packaged productsFew raw materials = many productsCo-productsFixed yields for processesProduction campaign planningCompliance: emissions, waste,hazardous materials handling

Role

Plant Manager

Production Planner

Production Supervisor

Production Operator

Quality Inspector

Quality Manager

Store / Dispatch Clerk

Maintenance Engineer

EH&S Professional

ForecastDemand

A Typical Chemicals Manufacturing ScenarioNet Forecast

Against OrdersDevelop Supply NetworkPlan for Manufacturing

Develop Detailed MonthlyProduction Plan

Report Up

Update Production Plans(Measure Plan vs. Actual)

Create detailed Production Planand Schedule

Release ProductionOrders

View Work list &Select Order Sequence

Move Goodsto Line & Manu-facture Product

Create QualityInspection Orders

Approve and ReleaseProduced Batch/Order

Record Production (time, material,labor, cost) Results

Monitor, Review andApprove Quality

Pack and StoreDispatch Product

Create PreventiveMaintenance Plan

ScheduleMaintenance

MaintenanceExecution

Publish new documents asneeded – MSDS, FDA letters,

etc.

Log Exposure and Handling forComplianceInvoke Safety and

Handling Instructionsbased on MSDS

Approve Production Plan andTargets

A Complicated Environment!

Constant re-work, overtime, expedites, shortagesHigh inventory carrying, material, labor, energy costsLow labor productivity and asset utilizationProduction personnel lack necessary decision support

Higher operating costs lowers margins andperformance

ObservationsKey IssuesMust expand size of addressable market or better penetrate

existing market

Commoditization & competitive pressure forcing down price-points in specialty chemicals

Rising material, energy, quality & EH&S costs a concern for all.Basic producers must preserve margins

Flat market growth with downward pressure onmargins

Manufacturing moving offshore to distant locations – lowervisibility to events & exceptions

Lack of consistent standard manufacturing processes andsystems in a heterogeneous landscape

Lack of integration across multiple plants or acrossmanufacturing and supply chain nodes

Coordination and control across outsourcedmanufacturing increases lead times

Excessive inventory on the plant floor and across the supplychain

Low production yields and asset/ labor utilization

High levels of waste and inefficiency

Key Issues for Manufacturing in Chemicals

Lack of analytics on product profitability to determine the rightproduct mix

No insight into economical implications of scheduling decisionswith conflicting optimization objectives

Recovery of business driving production tocapacity limits

Time consuming compliance and reporting

Manual/paper based process

Knowledge management processes inefficient

Industry regulations driving up costs ofquality/EH&S compliance

Lack of analytics and KPI data to support continuousimprovement processes

Knowledge management processes inefficient

Inability to institutionalize best practices orcontinuous improvement

ObservationsKey Issues

Learning too late re: machine/material/quality exceptions

Customer orders “lost” on the factory floor

Lack of automated/workflow based exception resolution

Reduced customer responsiveness

Key Issues for Manufacturing in Chemicals

Suppliers &Partners

Customers &Channels


Business Issues:Pack and Make to order planningUnderstand plant capabilityMaintenance planning & controlAccurate asset recordsInterface with plant control systemsProduce to planVisibility of dataCost control and reporting

SAP ERP SolutionMaterials RequirementsPlanning (MRP) processProduction planning,scheduling & executionBatch managementSubcontractingShop floor integrationEnterprise asset managementPredictive maintenancePreventive maintenanceWork order processingShutdown managementFailure mode analysisWork clearance managementMobile asset management

Benefits:Integrate production & planningLess inventory

Longer production runs, increaseduptime

Lower maintenance costsFaster maintenance shutdownsIntegrated reporting

Manufacturing



Enterprise Asset Management

© SAP 2009 /

MRP and Capacity Planning - SAP ERP uses MRP techniques to create un-constrained production plans. Several different planning strategies are supported, MTO(make-to-order) and MTS (make-to-stock) being the most prominent ones. With capacityplanning and leveling, technically feasible production schedules can be created

Key FunctionalityMaterial requirements planning

Evaluation of MRP results

Interactive planning of planned orders

Conversion of planned orders to process orders

Conversion of planned orders to purchaserequisitions

Planning strategies: Make-to-order, Make-to-stock

Resource planning and capacity leveling

Key BenefitsImproved delivery against promised date

Reduced inventory carrying costs

Improved raw material availability

Increase capacity utilization

Improved order fill rates

Capacity load determination

Creates feasible schedules

Reduced administration, improve businessprocess

Reduced transaction costs

MRP and Capacity Planning

© SAP 2009 /

Material forecast Sales & distribution

Cap

acity

Req

uire

men

ts P

lann

ingDemand program

MRP

Work scheduling

Production execution

Goods receipt of product

Settlement / Batch Record

Planned order

SCM

& M

fg P

lann

ing

Mfg

Exe

cutio

n

Goods issue of comp.

Purchase requisition

Purchase order

Goods receipt

Invoice receipt

Proc

urem

ent

Plnd.ind.req.

Stock

EA C D

B

Customer req.

QM

/ eL

IMS

Inte

grat

ion

to P

lant

floo

r

Manufacturing Execution and Planning

© SAP 2009 /

Manufacturing Execution - Supports all steps to execute the production schedulefor continuous and batch oriented manufacturing. Control recipes are generated withprocess instructions and the process is executed phase by phase. Finally, goods issuesand goods receipts are confirmed and the order is settled.

Key Functionality

Production orders

Process order management

Batch management

Goods issue and goods receipts

Product costing and settlement

Integration to process control and shop floorinformation system

Electronic batch recording

Integration to MES and shop floor systems

Dashboards and shift reports

Key BenefitsImproved actual vs. planned execution ofprocess orders

Manage production processes, workforce andresource deployment on the plant floor

Cost transparency

Reduced administration, paper work andspreadsheets

Automated documentation

Improved control and monitoring of theproduction

Fewer unexpected events

Manufacturing Execution

© SAP 2009 /

Event Mgmt

QM

Maintenance

ControlRecipe

ProcessOrder

Master dataRecipes

ResourcesMaterials

Plant floor

ProcessMessages

PI-Sheet

Alarm Server

MaterialMovements

BatchManagement

FurtherDestinations

R-02

R-01Planned

Order

PI-PCSInterface

/

SAP MII

OPC Data AccessOPC Alarms & Events

Business Warehouse

Dashboard

Information Flow in SAP ProcessManufacturing

© SAP 2009 /

Process Order Management - Process orders are used for the production ofmaterials for a specific quantity on a specific date. They enable the planning of resources,control of process order management, and specify rules for account assignment andorder settlement. They are the main control instrument in production.

Key FunctionalityAvailability checks

Manufacture of co-products

Material quantity calculation

Active ingredient management

Master recipes management

Creation of control recipes and inspection lots

Process instruction sheet for operators withdigital signatures

Material staging & reservations

Confirmation of quantities, activities and timeevents

Costing and period-end closing, order settlement

Key BenefitsImproved reliability through availability checksand material reservations

Reduced administration, paper work andspreadsheets

Improved control of manufacturing process

Documentation of production process

Process Order Management

© SAP 2009 /

Batch management - Enables control and tracking of homogenous quantities of amaterial or product throughout the value chain, for legal requirements (e.g. GMP) orregulations on hazardous materials, batch tracking, defect tracing, callback activities, andregression requirement.

Key FunctionalityBatch master

Batch numbering

Batch determination for components

Batch derivation to transfer, select, and displaybatch master data and specifications ofcomponent batches

Batch traceability, batch history

Active ingredient management

Electronic batch record

Batch information cockpit

Key BenefitsFulfillment of quality guidelines

Compliance to legal requirements andregulations

Integration to all applications of the SAP system

Batch Management

© SAP 2009 /

Ware-house

Processorder Ware-

house Sales order

Warehouse Mgmt

Batchassignment

Batch determination

Batchassignment

Purchaseorder

Batch determination

AB

AB

Warehouse Mgmt

ManufacturingManufacturing SDSDProcurementProcurement

Batch Management

© SAP 2009 /

Batch Information CockpitBatch where-used list

© SAP 2009 /

Manufacturing Collaboration - Automated electronic collaboration to rapidlycommunicate work orders as new demand is received, to negotiate and to makeadjustments necessary for responsive execution.

Key FunctionalitySubcontracting purchase orders

Goods issue of components to subcontractor

Third party subcontracting (components provided bythird party)

Negotiation of delivery, quantity and details*

Visibility of inventory including in-transit stock*

Timely visibility of work order progress at thesubcontractor updates execution systems andtriggers alerts if necessary*

Traceability of batches and component batches*

Notification of product shipment and generation ofASN*

* Requires SAP Supply Network Collaboration (SNC)

Key BenefitsLower lead times and administrative costs due toautomated collaboration processes

Early detection of exception conditions enablesbrand owner to replan or expedite responsively

Enables brand owners to make accuratecommitments to their customers, enhancingservice and perfect order performance

Seamless process and common data betweeninternal planning and execution and the externalprocurement process

Manufacturing CollaborationOutsourced Manufacturing / Subcontracting

© SAP 2009 /


2. Manufacturing Execution2.1. Manufacturing in Chemical Industry2.2. Production Models, Scenarios in SAP Best Practices for

Chemicals3. Demos

3.1. Transformation of General Recipes (942)3.2. Bulk Manufacturing (with PI Sheet and SAP ODA Integration) (908)

4. Useful Links

Agenda

Active IngredientProcessing

(Sales)

Co - Product

By - Product

Repetitive ManufacturingPipeline MaterialHandling

Blending

Tank Trailer

Granulate SAPulat/GranuSAP blueOverview V1.603

Plant 1000

Filling

Pressure and Temperature Polymerization

Ethylen Gas, C2H4YQPM

CH-1410Catalyst (Grade A)YQRM

CH-1420

Description

Mat type

Mat Nr

WM managed

QM active Batch managed

Solvent (Grade B)YQBP

CH-7100SAPulat (Batch B)YQBM

CH-2200

Pigment, blueYQRM

CH-1440

SAPulatRaw Granulate

YQFP

CH-6400SAPalyst

YQFP

CH-6500

Filling

SAPulat (Batch A)YQBM

CH-2200

Solvent (Grade A)YQRM

CH-1430

GranuSAP, BlueYQBM

CH-3200

Catalyst (Grade B)YQCP

CH-9100

Extruder Mix Nozzle Chop (Avrg 2x3 mm) Add Pigment

Totes Handling

Bag 10 KGVERP

CH-4100

Bag 25 KGVERP

CH-4110

BigBag 500 KGVERP

CH-5100

Shrink FoilVERP

CH-4600

PalletVERP

CH-4500

Granulate SAPulat/GranuSAP blueOverview V1.603

Filling in Bags/BigBags and Delivery

GranuSAP SampleYQSM

CH-0100

Repackaging

GranuSAP, 25 KGYQFP

CH-6200GranuSAP, 500 KGYQFP

CH-6220

External Subcontracting

GranuSAP, 100 KGYQFP

CH-6210

Container 100KGVERP

CH-4120

Label GranuSAPROH

CH-1100

GranuSAP, BlueYQBM

CH-3200

GranuSAP, 1000 KGYQFP

CH-6230

Container, 1000 KGVERP

CH-4130

Label GranuSAPROH

CH-1100

Plant 1000Description

Mat type

Mat Nr

WM managed


ProductSubstitution by QM

Usage Decision

Paint, blue (Grade B)YQBM

CH-3001

Paint SAPcolor blueOverview V1.603

Plant 1000

Batch Production : Filling, Heating, Grinding, Disperging

Additive BG99YQAI

CH-1020Pigment, blue

YQRM

CH-1440

Description

Mat type

Mat Nr

WM managed


Acrylic ResinYQRM

CH-1010Solvent (Grade A)YQRM

CH-1430

Acrylic Resin(residue)

YQRM

CH-1010

Acrylic Resin(new delivery)

YQRM

CH-1010


(Procurement &Manufacturing)

AlternativePosition in BOM

Paint, blue (Grade A)YQBM

CH-3000

Mixing inStorage Tank Solvent (Grade B)

YQBP

CH-7100

Paint SAPcolor blueOverview V1.603

Canister, 5 kgVERP

CH-4200

Canister, 10 kgVERP

CH-4210

Container, 1000 kgVERP

CH-5200

Shrink FoilVERP

CH-4600

PalletVERP

CH-4500

SAPcolor, blueSample

YQSM

CH-0200

Product Substitutionin SD

Paint, blue (Grade B)YQBM

CH-3001

Paint, blue (Grade A)YQBM

CH-3000

SAPcolor blue,10 kg (Grade B)

YQFP

CH-6001

SAPcolor blue,1000 kg

YQFP

CH-6100Paint MagicBlue,

10 KG

YQFP

CH-6010

Label MagicBlueROH

CH-1110

Label BlueSkyROH

CH-1120

Label BlueStarROH

CH-1130

Paint BlueSky,10 KG

YQFP

CH-6020

Paint BlueStar,10 KG

YQFP

CH-6030

Relabeling

SAPcolor blue,10 kg

YQFP

CH-6000

Filling in Canisters

Additional PaintsOverview V1.603

Filling

Paint, redYQNM

CH-0500

Canister, 5 kgVERP

CH-4200

InternalSubcontracting

PowerPaint, redYQFP

CH-6800

SAPcolor green,10 kg

HAWA

CH-6300

Third PartyProcessing

SAPcolor white,10 kg

HAWA

CH-6310

Plant 1000

Description

Mat type

Mat Nr

WM managed


Paint, blackYQBM

CH-3110

Additional PaintsOverview V1.603

Plant 1000

Batch Production : Filling, Heating, Grinding, Disperging

Description

Mat type

Mat Nr

WM managed


Acrylic ResinYQRM

CH-1010Additive BG99

YQAI

CH-1020Solvent (Grade A)YQRM

CH-1430

Pigment, blackYQRM

CH-1442

Pigment, yellowYQRM

CH-1441

Acrylic Resin(residue)

YQRM

CH-1010

Acrylic Resin(new delivery)

YQRM

CH-1010


(Procurement &Manufacturing)

Paint, yellowYQBM

CH-3100

Mixing inStorage Tank

Multiple ProductCampaign Run

CreateProcess

Order

ConvertPlanned to

ProcessOrder

ReleaseProcess

Order SendingControlRecipes

ProductCosting

Delivery

GoodsIssue

GoodsReceipt

MRPCapacity

Planning /Leveling

SupplyChain

Planning

Sales

(OTI)

MRP andCapacityPlanning

Manufacturing

ProcessingPI-Sheets

ConfirmProcess

Order

In ProcessControl

SAP Best Practices for Chemicals –MRP and Capacity Planning / Manufacturing

PostProcessControl

MaterialStaging

fromWarehouse

Putawayof Produced

Material

PlantMaintenance

© SAP 2009 /

Supplier Collaboration

Supply Chain Planningand Execution

Manufacturing

Enterprise Managementand Support

Innovation Management

Quality Management andCompliance

Sales and Marketing

Suppliers &Partners

Customers &Channels


Chemical Solution Map - Scenario Alignment



Enterprise Asset ManagementSAP Best Practices Scenarios:

Stock Handling: Scrap and Blocked Stock (131)Repetitive Manufacturing with Co-Products and QM (906)

Bulk Manufacturing without PI Sheets (907)Bulk Manufacturing with PI Sheet and SAP ODA Integration (908)

Make-to-Stock (Process Industry) with WM (909)Make to Order (Process Industry) (910)

Multiple Product Campaign Run with MQC (911)Active Ingredient Processing (912)

Blending (913)Repackaging (914)

Relabeling (915)Storage Tank Management (916)

Subcontracting (External & Internal) (918)

© SAP 2009 /

In SAP Best Practices for Chemicals, continuous production is used tomake the semi-finished product SAPulat on a continuous basis.The characteristics of continuous production (long runs) are:

The product is produced in a continuous process over a long time (inparticular single-product lines).Component materials are provided constantly, and the finishedproduct is constantly being completed.Rough capacity leveling and continuous planning of consumption arepossible by means of the planning table.Summary confirmation of quantities, times and material withdrawals.

Scenario 906 - Repetitive Manufacturing with Co-Products and QM

Scenario 906 - Repetitive Manufacturing with Co-Products and QM

MRP = Material Requirements Planning, RFQ = Request for Quotation, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance

Display /Change

planning table

CreateInspection lotfor In process

Inspection

RecordInspectionresult for In

processInspection

Usage Decisionfor In process

Inspection

Backflushrepetitive

Manufacturing

RecordInspection

result for coproduct

Usage Decisionfor co product

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© SAP 2009 /

This scenario covers the manufacturing of a bulk product (Bulk paintSAPcolor CH-3000).Within this scenario material staging of components with WM as well asseveral QM functionalities such as

In-Process-Control of the manufactured product with usage decisionPost-Process-Control of manufactured product with samplemanagement and usage decisionRecurring inspections are included.

Scenario 907 - Bulk Manufacturing without PISheets

Scenario 907 - Bulk Manufacturing (without PISheets)

MRP = Material Requirements Planning, RFQ = Request for Quotation, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance

ConvertPlanned order

of CreateProcess order

Stage materialfrom

warehouse

Record resultsfor In process

inspection

Record usagedecision for In

processinspection

Confirmprocess order

Record resultsfor GR

inspection

Record usagedecision for GR

inspection

Record resultsfor recurringinspection

Record usagedecision for

recurringinspection

Createrecurring

inspection lot

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list

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© SAP 2009 /

This scenario covers the manufacturing of a bulk product - granulateGranuSAP, blue CH-3200.Within this scenario material staging of components with WM as well asseveral QM functionalities such as

In-Process-Control of the manufactured product with usage decisionPost-Process-Control of manufactured product with usage decisionare included

This scenario also covers the creation and usage of PI sheets.SAP Best Practices for Chemicals introduces the XML-based PI sheetand a Process Manufacturing Cockpit.In addition the functionality SAP ODA (OPC for Data Access) isintegrated. This allows to read out and process sensor values within thePI sheet.

Scenario 908 - Bulk Manufacturing with PI Sheetand SAP ODA Integration

Scenario 908 - Bulk Manufacturing (with PI Sheetand SAP ODA Integration)

Convertplanned order

or Createprocess order

Stage materialfrom

Warehouse

Sendingcontrol recipes

Processing PIsheet

Record resultfrom PI sheetfor In process

inspection

Record UsageDecision for In

processInspection

Evaluate logsfor DigitalSignature

Use SAP ODAfunctionalities

Send processmessage

Record resultsfor GR

inspection

Record usagedecision for GR

inspection

Use Batchwhere used list

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Spec

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list

Engi

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Spec

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t

© SAP 2009 /

Scenario 909 - Make-To-Stock (Process Industry)with WM

This scenario describes a standard make-to-stock manufacturing processwith included Quality Management and Warehouse Management.This scenario covers the filling of granulate GranuSAP, blue CH-3200into 500 kg pack size to produce GranuSAP, 500 KG CH-6220.After creation and confirmation of a process order, post-process-controlis carried out.Finally the putaway for the manufactured materials into WM is described.

Scenario 909 - Make-to-Stock (Process Industry)with Warehouse Management

Convert PlannedOrder

orCreate Process

Order

Createinspection lot

manuallyRecord results Record Usage

Decision

RecordInspection

result for coproduct

Usage Decisionfor co product

Confirm ProcessOrder

DisplayStorage Bin

Create transferorder

ConfirmTransfer Order

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© SAP 2009 /

Scenario 910 – Make to Order (Process Industry)

This scenario describes a Make to order filling of granulate GranuSAP,blue CH-3200 into 25 kg pack size to produce GranuSAP, 25 KG CH-6200. Packed product is filled and packed only after a sales order isreceived.The filled material is planned to plan the dependent requirement of thebulk. The MRP run is used to plan the dependent requirements.Material requirements’ planning is controlled via Planning Strategy 52(Planning w/o Final Assembly and w/o MTO)Bulk is manufactured and kept in stock based on the dependentrequirements of the filled material.On receipt of the sale order for the filled material the MRP triggers aplanned order for the filled material for the sale order quantity. Thisplanned order can be converted into a process order to execute the fillingprocess.The filled material is goods received to sale order stock and thendelivered the customer.

Scenario 910 – Make to Order (Process Industry)

Create plannedindependent

Requirements

Record Usage

DecisionRecord Results

Post GoodsIssue

MRP Run

Convert PlannedOrder


Release ProcessOrder

Create SalesOrder Create Delivery

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© SAP 2009 /

This scenario covers production of multiple products run on a common manufacturingresource.

Black & Yellow Paint are being produced on a common resource. A cleanout processis undertaken after a run for a colored paint (like Yellow Paint) is finished on theresource.

A cleanout order is proposed when final confirmation for a processing step (phase)identified with Cleaning Reqd checkbox ticked (defined by user fields) is being saved.

This is set up through user exit - CONFPI05 (Process order conf.: Cust. spec.enhancements when saving)

Common Resource Cleaning is mapped through creation & release of Cleanout Order(Process order without material). It is used to record and account activities & materialsconsumed during the cleaning process.

The Cleanout order can settled to a cost center or to paint being manufactured in nextrun

Completion of common Resource Cleaning is ascertained through activation of UserStatus – ZCL (Resource Cleaning Completed). This user status is set when theprocess order is fully confirmed (CNF)

Material Quantity Calculation (MQC) formula is used to calculate quantity for solvent(CH-1430) to be added in the manufacturing process. It is calculated based on activeingredient proportion in batch selected for additive (CH-1020)

Formula defined for solvent (CH-1430) ensures that solvent to paint ratio is maintainedto maxm 40%. If solvent quantity calculated using Active ingredient content in batch ofadditive (CH-1020) is more than 40 % then keep original ratio (35%) otherwise use thecalculated value. This ensures that solvent to paint ratio is maintained appropriately

Scenario 911 - Multiple Product Campaign Run withMaterial Quantity Calculation

Enter Plannedproductionquantities

Run MRP

Check Stock /Requirements

ListCapacityOverload

CollectiveConversion of

Planned Orders

Run MRPCheck Stock /Requirements

List

CapacityOverload

Changeconverted

Process orders

ExecuteProduction asper Schedule

Confirm end ofa run – final

ConfirmationCleaningRequired

ExecuteProduction for

same colorpaint run asper schedule

CreateCleaning /

Change-overOrder

ExecuteCleaning /

Change-overactivities

CreateCleaning /

Change-overOrder

Yes

Yes

No

Yes

No

No

Scenario 911 - Multiple Product Campaign Run withMaterial Quantity Calculation

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© SAP 2009 /

In Chemical industry, in some cases, materials consist of one or moreactive ingredients. The potency of these active ingredients varies frombatch to batch of materials (KAI (kilograms active ingredient)).

The total mass of the active ingredients and the carrier materials, is thephysical quantity or weighted quantity.

Goods movements and stock movements for these materials are carriedout in physical quantities. Valuation, costing, availability checks, andplanning, however, are carried out on the basis of the active ingredientquantity.

The active ingredient proportion (ratio of active ingredient quantity to totalor physical quantity) remains constant for each batch. The active ingredientquantity can therefore be calculated from the physical quantity and viceversa.

The process in this scenario comprises the valuation of the Co-Product(that results from the repetitive manufacturing of SAPulat.), filling and sales

Scenario 912 - Active Ingredient Processing

Scenario 912 - Active Ingredient Processing

Create ProcessOrder

ConfirmProcess Order

Create SalesOrder

Create Delivery Goods issueDelivery

Billing

Sale

s Ad

min

istr

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nSa

les

Bill

ing

War

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Shop

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© SAP 2009 /

This scenario describes business processes related to Blending of in-spec and off-spec batches in the chemical industry.

Within this scenario, two batches of colorless granulate SAPulat (oneinvolved batch is in-spec and the other one off-spec) will be mixed in aseparate resource in order to get an in-spec batch of CH-2200 (SAPulat)

Scenario 913 - Blending

Scenario 913 - Blending

BatchInformation

Cockpit

CreateProcess

Order

ConfirmProcess

Order

Recordresults

UsageDecision

Shop

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© SAP 2009 /

The Re-Packaging scenario is used for re-packing on-stock materialsfrom one packing unit into another one.

The necessity for this Re-Packaging scenario is mainly based on specificcustomer requirements, e.g. the need for 25 kg bags on pallets.

This scenario also includes following WM and QM processes:Material StagingPost-Process Inspection and Usage decisionPutaway of Produced MaterialsBatch Derivation

Scenario 914 - Repackaging

Scenario 914 - Repackaging

CreateProcess

Order

SelectTransport

request andconvert toTransport

order

Select openTransport

order

ConfirmTransport

order

ConfirmProcess

Order

Resultrecord

worklistUsage

Decision

CreateTransferOrder forproducedMaterial

Select openTransport

order

ConfirmTransport

Order

BatchDerivation

Shop

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list

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© SAP 2009 /

The Relabeling-scenario is used to transfer inventory from the stockedmaterial (generic label) to a different material which will be labeledaccording to customer requirements.

The physical and chemical properties of the material remains the samethroughout the process as well as the container respectively the canremains the same. Only the label-sticker will be replaced.

The process is triggered by an actual sales order for the relabeledmaterial and a relabel-process order is used to transfer the inventory andmonitor the process.

This scenario also covers printing of Certificate of Analysis at outbounddelivery and Batch Derivation (from bulk paint CH-3000 to filled paintCH-6010 and from CH-6010 to CH-6020/CH-6030)

Scenario 915 - Relabeling

Scenario 915 - Relabeling

Manually MRPplanning

Create SalesOrder

ConvertPlanned Order

for Filling

Change andRelease

process orderfor filling.


ConvertingPlanned Orderinto Process

Order forRelabelling

ReleasingProcess Orderfor Relabeling

ConfirmingProcess Orderfor Relabeling

Create OutboundDelivery

Delivery forshipping the

material to thecustomer is

issued.

Certificate forDelivery

Monitor theBatches

Shop

Flo

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list

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Man

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Sale

sAd

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© SAP 2009 /

The storage tank management process reflects the mixing of two differentbatch quantities to produce one new batch quantity in a tank storagelocation with a special process order type.

This scenario covers material CH-1010 (Acrylic resin) which is stored in thestorage tank 10Q3.

The regular procurement process leads to multiple material batches in thestorage tank although physically only one homogeneous material batch isavailable.

The scenario describes how two batches of one material in the storagetank 10Q3 can be merged into one batch using a process order for mixing.

Stock determination is carried out automatically by a Process ControlSystem (values for fluid levels). In SAP Best Practices for Chemicals thisstep is carried out manually

Scenario 916 - Storage Tank Management

Scenario 916 - Storage Tank Management

Creating process order

Display stockoverview

Confirming processorder

Analyze batch-where-used list

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War

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onito

ring

© SAP 2009 /

External Subcontracting covers manufacturing steps outsourced to a toll-manufacturer

Scenario 918 - Subcontracting (External andInternal) (external part)

Vendor: S-1003

Plant 1000 Vendor: S-9000(subcontractor)

Purchase order forcomponents withdelivery address tosubcontractor

Invoice

Invoice

Delivery tosubcontractor

Goods delivery

Delivery ofcomponents

Purchse order

CH-6210 (GranuSAP, 100 kg)

Scenario 918 - Subcontracting (External andInternal) (external part)

ReceiveMaterial at

Dock

Delivery PickList

GR/IR PPVVendor

MRP = Material Requirements Planning, PO = Purchase Order, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance

IncomingVendorInvoice

Delivery Note

Invoice Receipt

PickConfirmation

Goods ReceiptPost GoodsIssue

Create DeliveryRequest

CreateSubcontract PO

Inventory GR/IRSubcontracting

Services/Consumption

Print GR Slip

Requirement ofSubcontracting

Material

QualityInspection Record Results

Stock transfer forsubcontractor

Create PO forSpecial Stock

SubcontractPO

Requirement ofMaterial

(Component)

Approve PO

SubcontractPO

Buye

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Spec

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tTh

ird P

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Even

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© SAP 2009 /

In internal subcontracting, our company is provided with non-valuatedmaterials. Using existing resources and packaging materials, finishedmaterials are sent back.

The subcontracted receives the red paints (Paint, red; CH-0500,) as bulk,performs the filling of the Paint, red into canister CH-4200 and sends thefinished product (PowerPaint, red; CH-6800) back to the customer.

The material CH-4200 (Canister) is purchased by the subcontractor itself.

Manufacturing Planning for finished product (PowerPaint, red; CH-6800) iscontrolled through Planning Strategy YL (Assemble to Order strategy)

In Planning Strategy YL, a fixed planned order is created when a customerorder (for finished product (PowerPaint, red; CH-6800)) is entered(assembly processing).

Special planned orders are created for PIR of finished product(PowerPaint, red; CH-6800) , which are converted into a process orderwhen the sales order for the finished product CH-6800 is created

Planned Independent Requirements (PIR) for finished product(PowerPaint, red; CH-6800) are used to plan all dependent materials

Scenario 918 - Subcontracting (External andInternal) (internal part)

CustomerNeeds to Buy

Product

InventoryCOGS

AR= Accounts Receivable, COGS = Cost of Goods Sold, MRP = Material Requirement Planning

Delivery NoteOrder

Confirmation

Pick List

BillingDocument

Billing

MRP

MRP List

PlannedOrders

Creating PlannedIndependent

Requirements

InventoryConsumption@ Standard.

Cost

ConvertPlanned Order

to ProcessOrder

Process OrderConfirmation

Create DeliveryRequest

Post GoodsIssue

Beginning ofPlanning

Cycle

AvailabilityCheck of Non

ProvidedMaterials

Sales OrderEntry

Cus

tom

erSa

les

Adm

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Sale

s B

illin

gW

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Cle

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Plan

ner

Shop

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Even

tScenario 918 - Subcontracting (External andInternal) (internal part)

© SAP 2009 /

Scenario 131: Stock Handling: Scrap and BlockedStock

Even

tA

ccou

ntin

gQ

ualit

y In

spec

tor

/ War

ehou

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lerk

Returnsand

Complaints(111)

Stock Transfer:Unrestricted to

Blocked

Non-CustomerRelated

Disposition(Production,

MRO)

StockScrapping:

Goods Issue toCost Center

StockScrapping:

Goods Issue toCO-PA

Stock Transfer:Blocked to

Unrestricted

Scrap ExpenseInventory

Scrap ExpenseInventory

Returnsand

Complaints(111)

InspectProduct

InspectProduct

InspectProduct

Miscellaneoustransfers

InspectProduct

SAP Best Practices for Chemicals – Highlights

Recipe managementTransformation of general recipes into PPPImaster recipe

Batch managementClassificationAutomatic batch number generationFEFO batch determinationBatch derivation (from bulk to finished)

ProductionContinuous production for bulk (rate routing)Discontinuous production for fillingProcess order creationProcess order confirmationSpecial batch number assignmentPaperless production (PI sheet)SAP ODA (alerts and events)

Warehouse managementFull WMProduction supply areas

© SAP 2009 /

Quality managementSample managementIn-process controlsAutomatic lot creation at process order releasePost-process controlsQM notificationsQuality certificates check at goods receiptBatch recallInspection costs coverageQuality certificate at goods issueBatch derivationResults recording (incl. Digital signature)Jump from PI sheetReturns handlingManual inspection lotsRecurring inspectionsModel inspection at goods receiptControl chartResults copy



3. Demos3.1. Transformation of General Recipes (942)3.2. Bulk Manufacturing (with PI Sheet and SAP ODA Integration)

(908)4. Useful Links

Agenda

Innovation Management & ManufacturingScenarios Demos

942 908



3. Demos3.1. Transformation of General Recipes (942)3.2. Bulk Manufacturing (with PI Sheet and SAP ODA Integration) (908)

4. Useful Links

Agenda

SAP Help Portal – Documentation

http://help.sap.com/bp/industry/chemicals/

© SAP 2009 /

http://help.sap.com/bp/industry/chemicals/

http://service.sap.com/bp-demoDeonstrate & Experience Chemicals

Notes:• For downloading, you need to be signed into SSO• You need to install SAPTutor Player to play the files• The tutorials follow each respective scenario Business Process Document (BPD)

SAP Best Practices for Chemicals – OfflineDemos

© SAP 2009 /

http://service.sap.com/bp-demo

//service.sap.com/swdcGo to: Download -> SAP Installations & Upgrades -> Entry by Application Group -> SAP

Best Practices -> Best Practices for SAP All-in-One -> SAP BP for Chemicals

SAP Best Practices for Chemicals - ContentDownload

© SAP 2009 /

Select the desired items and chooseAdd to Download Basket.

On the following screen, chooseDownload Basket.

SAP Best Practices for Chemicals - ContentDownload

© SAP 2009 /

Thank you!

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session 2: innovation management & manufacturing scenarios

Documents