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SS_Bayer_2007_engl_RZ2_A4.

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Integrated Production Planning


with SAP APO PP/DS at Bayer AG

S u c c e s s S t o r y

Bayer MaterialScience AG is a core business

of the Bayer Group and holds a leading position

in the world market for important chemical

products. A supply chain management solution

now allows the company to schedule pro-

duction levels centrally and to react quickly

to changes.
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All Information in Real Time


SAP APO at Bayer MaterialScience

Rapid Reactions Scheduling and production processes must be just


as adjustable as polyether foam is versatile. Bayer
in Chemical Plants MaterialScience in Dormagen schedules and
It’s impossible to think about daily life without controls its manufacturing processes with SAP
polyether foams. They provide modern comfort in Advanced Planning & Optimization, using modules
seat upholstery and mattresses. They form the foot Production Planning and Detailed Scheduling (SAP
bed in shoes and the inner linings of textiles. APO–PP/DS). The PP/DS scheduling capability in
As a packaging material, they protect, as carpet SAP APO is an element of mySAP Supply Chain
cushions, they absorb sound. They’re also used Management. At Bayer MaterialScience the
in industry and medicine. As they fulfil numerous application improves planning processes con-
requirements, polyether foams can be manufactured siderably. Networking with the central SAP R/3
in various versions, densities, and structures. solution it now enables integrated scheduling
through all production levels and significantly
Bayer MaterialScience produces hundreds of increases the company’s ability to react to the
product variants, or PET formulations, in both of unexpected. It also lowers the number of costly
its polyether facilities in Dormagen am Rhein, empty periods and quantities of semi-finished /
Germany. The production procedures are intermediate inventory.
complicated and the processing capacities are
finite. Lengthy delivery times must be taken into Replacing Legacy Systems
account for raw and base materials. These materials
are stored in tanks and warehouses until needed Bayer MaterialScience originally set up two local
and their use in the various production steps – scheduling systems in addition to SAP R/3. Firstly
blending, weighing, purifying, and intermediate an application from JD Edwards (then called
storage – might not occur directly after each other. Numetrix) monitored the manufacture of the basic
Ultimately, they are made ready for shipment as polyether product. Secondly a proprietary, host-
blends and trading units i.e. end products that based scheduling application, for the use of boilers,
reflect customer desires. handled production planning for the various
formulations. However, these systems only partially
worked together. Data had to be manually
Bayer MaterialScience
maintained to transfer information on material
Bayer MaterialScience AG, formerly Bayer scheduling, production, warehouse movements
Polymers, employs about 23,000 worldwide at and inventory from SAP R/3 into the detailed
120 locations. Revenues reached € 10.8 million scheduling system for the production processes.
in 2002. Bayer MaterialScience has core
competencies in product groups for rubber, With the implementation of SAP APO–PP/DS,
synthetics, lacquer, adhesives and polyurethane; Bayer MaterialScience looked to its Supply Chain
it counts among the world’s most important Management (SCM) strategy and set major
polymer manufacturers. Its primary customers concrete goals for the project:
include the automobile industry, construction
industry, electrical & electronic companies, Creation of integrated, multilevel production
manufacturers of sporting goods & leisure planning in one system and in real-time
articles, plus companies supplying packaging collaboration with SAP R/3.
and products for medical technology.

J&M Management Consulting I Success Story


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Complete integration of the strategic plan for The planning processes can be improved
sales and operational planning plus, in particular, continuously, additional implementations require
enablement of forecast-based, market-oriented less effort and achieves higher ROI.
production. Implementation in steps helps users understand
Replacement of the previous insular solution the solution before the system schedules
and simultaneous improvement of the new IT independently in the background (black box
solution to gain detailed information in fewer syndrome).
operational steps. Users themselves learn to demand and accept
automatic processes.
Bayer MaterialScience engaged J&M Management
Consulting to implement SAP APO–PP/DS. The The implementation now enables planners to
challenge was to integrate sales planning, order promptly react to requirements from sales and to
processing, and production in terms of both directly schedule production adjustments from one
processes and IT. The first step consciously source. Special alerts immediately inform those
abstained from a completely automated solution responsible for planning of changes in production
so that the application would remain manageable requirements. These include deviations, changes
and to foster its acceptance. A comprehensive and unplanned events that always occur in practice.
planning board enabled schedulers to follow all The production planning board clearly indicates
the information relevant to real-time scheduling the need for action in real time and immediately
and to intervene in planning when necessary. displays the changes relevant to production that
are triggered by the alerts. It thus supports
Coupled Sales & modifications to the production plan.

Order Processing
Deviations Analyse
The following steps proved essential to the success- Changes Initiate
Unplanned Events Alert
ful implementation of SAP APO–PP/DS at Bayer New Conditions Situation
Planning

MaterialScience:

1st Step: Implementation of a comprehensive, alert-


based, and interactive scheduling system which
took into account integration and transparency.
2nd Step: Automation of manual, repetitive
scheduling while looking for solutions to relieve
planners from routine tasks.
3rd Step: Usage of optimization procedures during
production planning and improved them
according to defined metrics such as the reduction Fig.1 Production Planning Process
of setup time.

No attempt was made to realize complex algorithms


right at the start. Dealing with automation in a later
phase has its advantages:

J&M Management Consulting I Success Story


SS_Bayer_2007_engl_RZ2_A4.FH11 Mon Apr 23 10:14:35 2007 Seite 1

Contact
Lars Eickmann, Partner
J&M Management Consulting
Kaiserringforum
Willy-Brandt-Platz 5
D-68161 Mannheim
Tel +49 621 124769 0
Fax +49 621 124769 20
E-Mail l.eickmann@jnm.com
www.jnm.com

Production Flow on the Rolling Forecast


Planning Board SAP APO – DP

Monthly Sales Numbers


The implemented design is based on replicating
the actual processes for the components, the Intermediate Rough Production
Planning SAP APO – SNP
preliminary semi-finished products and the finished
products. This includes fulfilment of committed MTF Requirements Checked for Capacity

customer orders (make-to-order) and production


Production Planning and Monitoring
for servicing anticipated future orders (make-to- SAP APO – PP/DS
forecast). Phased production monitoring in SAP Planning and Production
APO–'96PP/DS has several distinct advantages. Customer Orders Processing
Orders
Status Delivery

One of these is that the planning board automatically


Order
displays all phases of production. It also enables Processing SAP
Production Shipping
SAP PP-PI SAP SD
tracing of quality controls and the ability to run SD
production at full capacity due to the knowledge
that the processes are being monitored effectively. Fig.2 Planning Process with Customer Order Management
Furthermore, the company can make better use of
the container resources (termed as primarily tanks
where chemical reactions occur) which are used
to store the substances. This improvement helps
with the challenge of efficiently scheduling tanker
trucks, particularly with respect to reducing the
time that they sit idle.

Now that the planning tools have been successfully


implemented in the pilot plants, the company is
developing a business case study that looks at
rolling out the solution at other plants within Bayer
MaterialScience. Despite the complex scope of
operations in Dormagen, the implementation
resulted in good insights that can be realized in
additional rollouts leading to even shorter implemen-
tation times and higher ROI in the future.