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TRANSCRIPT
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
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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
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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
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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™
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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.
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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
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?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
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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
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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.
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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
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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
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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
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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
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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.