Success Story

Integrated Production Planning

with SAP APO PP/DS at Bayer AG

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 production levels centrally and to react
to changes quickly.
All Information in Real Time
SAP APO at Bayer MaterialScience
Rapid Reactions in Chemical
Plants
It’s impossible to think about daily life without poly-
ether foams. They provide modern comfort in seat
upholstery and mattresses. They form the foot-bed
in shoes and the inner linings of textiles. As a
packaging material, they protect; as carpet cush-
ions, they absorb sound. They’re also used in
industry and medicine. Because they fulfill nu-
merous requirements, polyether foams can be
manufactured in various versions, densities, and
structures.
Bayer MaterialScience produces hundreds of
product variants, or PET formulations, in both of
its polyether facilities in Dormagen am Rhein,
Germany. The production procedures are com-
plicated, and the processing capacities are limited.
Lengthy delivery times must be taken into account
for raw and base materials. These materials are
stored in tanks and warehouses until needed and
their use in the various production steps – amen-
ding, weighing, purifying, and intermediate storage
– might not occur directly after each other. Ulti-
mately, they are made ready for shipment as blends
and trading units: end products that reflect customer
desires.
Bayer MaterialScience
Bayer MaterialScience AG, formerly Bayer Poly-
mers, employs about 23,000 worldwide at 120
locations. Revenues reached €10.8 million in 2002.
Bayer MaterialScience has core competencies in
product groups for rubber, synthetics, lacquer,
adhesives, and polyurethane; it counts among the
world’s most important polymer manufacturers. Its
primary customers include the automobile and
construction industries, electrical and electronic
companies, and manufacturers of sporting goods
and leisure articles, packaging, and products for
medical technology.
Scheduling and production processes must be just
as adjustable as polyether foam is versatile. Bayer
MaterialScience in Dormagen schedules and con-
trols its manufacturing processes with SAP Advan-
ced Planning & Optimization – Production Planning
and Detailed Scheduling (SAP APO–PP/DS). The
PP/DS scheduling capability in SAP APO is an
element of mySAP Supply Chain Management. At
Bayer MaterialScience the application improves
planning processes considerably. Networking with
the central SAP R/3 solution now enables integrated
scheduling through all production levels and sig-
nificantly increases the company’s ability to react
to the unexpected. It also lowers the number of
costly empty periods and quantities of semifinished,
intermediate inventory.
Replacing Legacy Systems
Bayer MaterialScience originally set up two local
scheduling systems in addition to SAP R/3. An
application from JD Edwards (then called Numetrix)
monitored the manufacture of the basic polyether
product. A proprietary, host-based scheduling
application for the use of boilers handled production
planning for the various formulations. However,
these systems worked together only partially. Data
had to be maintained manually to transfer infor-
mation on material scheduling, production, ware-
house movements, and inventory from SAP R/3
into detailed scheduling for the production pro-
cesses.
With the implementation of SAP APO–PP/DS,
Bayer MaterialScience looked to its supply chain
management (SCM) strategy and set major con-
crete goals for the project:
§ Creation of integrated, multilevel production
planning in one system and in real-time
collaboration with SAP R/3
§ Complete integration of the strategic plan for
sales and operational planning and, in particular,
enablement of forecast-based, market-oriented
production
§ Replacement of the previous insular solution
and simultaneous improvement of the new IT
solution to gain detailed information in a few
operational steps
Bayer MaterialScience engaged j&m Management
Consulting AG to implement SAP APO–PP/DS.
The challenge was to integrate sales planning,
order processing, and production in terms of both
processes and IT. The first step consciously abstained
from a completely automated solution so that the
application would remain manageable and to foster
its acceptance. A comprehensive planning board
enabled schedulers to follow all the information
relevant to real-time scheduling and to intervene
in planning when necessary.
Coupled Sales and Order
Processing
The following steps proved essential to the success-
ful implementation of SAP APO–PP/DS at Bayer
MaterialScience:

§ The first step implemented a comprehensive,

alert-based, and interactive scheduling system
and took into account integration and trans-
parency.
§ The second step automated manual, repetitive
Fig.1 Production Planning Process
scheduling while looking for solutions to pro-
blems to relieve planners from routine tasks.
§ The third step used optimization procedures
during production planning and improved them Production Flow on the Planning
according to defined metrics: the reduction of
setup time, for example.
Board
The implemented design is oriented towards the
No attempt was made to realize complex algorithms
reality of the planning process, which produces
right at the start. Dealing with automation in a later
end products and the products’ preliminary stages
phase has its advantages:
and components. The reality includes fulfillment of
concrete orders from customers (make-to-order)
§ Because the planning processes can be im-
and production of items that will be stored in
proved continuously, additional implemen-
anticipation of future orders (make-to-forecast).
tations require less effort and achieve a higher
ROI.
§ Implementation in steps helps users understand
the solution before the system schedules
independently in the background (black box
syndrome).
§ Users themselves learn to demand and accept
automatic processes.

The implementation now enables planners to

promptly react to requirements from sales and to
directly schedule production adjustments from one
source. Special alerts immediately inform those
responsible for planning of changes in production
requirements. The changes include deviations,
changes, and unplanned events, which always
occur in practice. The production planning board
clearly indicates the need for action in real time
and immediately displays the changes relevant to
production that are triggered by the alerts. It thus
supports modifications to the production plan. Fig.2 Planning Process with Customer Order Management
 Phased production monitoring in SAP APO–PP/DS Contact
has distinct advantages. The planning board auto-
matically displays all phases of production. It Klaus Ballas, Partner
enables tracing of quality controls and running j&m Management Consulting AG
production at full capacity. And the company can Berlin – Düsseldorf – Mannheim –
make better use of the container resources, pri- Munich – Zurich
marily tanks, in which chemical reactions occur Kaiserringforum
and that are used to store substances. This im- Willy-Brandt-Platz 5
provement helps scheduling tanker trucks better D-68161 Mannheim
and reduces the time that they sit idle. Tel +49 621 124769 0
Now that the planning tools have been successfully Fax +49 621 124769 20
implemented in the pilot plants, the company is E-Mail k.ballas@jnm.com
developing a business case study that looks at www.jnm.com
rolling out the solution at other plants at Bayer
MaterialScience. Despite the complex scope of
operations in Dormagen, the implementation
resulted in good insights that can be realized in
additional rollouts and that promise even shorter
implementation times and higher ROI.

Success Story