manufacturing metricsa & kpis

Operational Excellence withCompliant ManufacturingOperations for Pharmaceuticals

Hussain Mooraj and Wayne McDonnellAMR Research

Andy Dé, Senior Director Industry SolutionsSAP for Life Sciences


Trends and Key Metrics enablingOperations Performance Management

Summary


Achieving Superior Performance withCompliant Manufacturing in Life Sciences

Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11% of Responses. N=100

2 weeks11%

Days13%

1-2 weeks6%

3- 4 weeks38%

4- 5 weeks32%

Time to Sense Changesin Customer Demand

Supply Network Operations– Average 22 Sites

40+ manufacturing sites30%

11-20 manufacturing sites15%

2-5 manufacturingsites17%



1 manufacturing site2%

Evolving Global Manufacturing Environment –the Challenges

Insight: complexity is increasing; need a new operating model

Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11

Evolving Global Manufacturing Environment –the Drivers

More Product Variants

Shorter New Product Development & Launch

Regulatory Compliance

Cost Reduction

Better Short Term Demand Visibility

More Dynamic Supply Networks

Demand Supply

Product

Demand Driven Manufacturing:The synchronized execution of compliant

manufacturing and logistics processes acrossa dynamically reconfigurable supply network,

to profitably meet demand.

Insight: today’s business environment requires move to DDM model


Manufacturing Architecture Integrated andGoverned With Enterprise Systems

Multiple Point SolutionsAutonomously Deployed

IT Strategy

VP Supply Network Operations, Plant ManagerVP Manufacturing, Plant ManagerManagement

Capability, Profitable To PromiseInventory, Available To PromiseOrder Promising

High Volume, High MixHigh Volume, Low MixProduct Flexibility

Outside-In Metrics: Right First Time, ScheduleAdherence, Supply Chain Cost, Profit Velocity

Set by Manufacturing: Material &Capacity Utilization, OEE

KPIs

VMI, SMI, CPFR - Networked and Real TimeSMI - SlowCollaboration

Real Time WIP, Schedules, Costs and CapabilityCompleted Orders, FG InventoryManufacturing Visibility

Event Driven S&OP, Closed Loop SchedulingMaster Production SchedulingPlanning

In-house/Outsourced, DynamicIn-houseCapacity

Dynamic Re-sequencingCampaignsOrder Execution

Pull, Lean ReplenishmentPush, RM/FG Buffer InventoriesInventory Philosophy

Rapid, In-house/Contracted R&D, Time To ValueInfrequent, In-house R&DNPD&L

Supply & DemandSupplyManaged Variability

ETO, MTO, ATO, CTO, Outsourced/ContractedMTSManufacturing Philosophy

Demand Driven ManufacturingTraditional ManufacturingCharacteristics

Demand-Driven Manufacturing

Source: “Demand-Driven Manufacturing”, AMR Research, 2007

Insight: think outside-in, execute inside-out


Life Sciences Product Supply Strategies

% of Responses. N=98

6%

5%

13%

5%

5%

8%

7%

8%

7%

4%

7%

10%

13%

15%

12%

17%

7%

7%

9%

8%

7%

6%

2%

1%

3%

4%

Improve collaboration in your enterprise with internal partnersacross R&D/Man/Supply Chain/Sales & Mkt

Manufacturing outsourcing as an opportunity to boostproductivity and efficiency

Improve efficiencies and lower costs across the enterprise

Increased insight into downstream demand using near real-time data from distributors and other intermediaries

Improve manufacturing performance visibility acrossmanufacturing sites

Replicating best practices across the enterprise usingoperational excellence programs

Standardize manufacturing processes and systems

Redesign of your supply chain networks

Improve collaboration with your external partners such asContract Manufacturers, 3rd Party Logistics

Product authentication, track and trace, integrity of supplychain

Improve compliance across financial, manufacturing andquality processes

Detailed production scheduling, and adherence

Identify and eliminate waste in manufacturing using leanmanufacturing practices

20072012

Future Focus

Current Focus

Insight: focus is shiftingfrom cost & compliance to

velocity, agility, profitability



62%

64%

67%

62%

62%

62%

64%

55%

62%

60%

57%

57%

41%

44%

51%

47%

48%

50%

41%

49%

48%

47%

47%

47%

Leverage contract manufacturers for new product launch and agileresponse to demand

Ability to forecast demand

Achieving compliant, predictable product supply by manufacturingright-first-time

Managing the cost of compliance while achieving the desired levelsof compliance

Ability to respond to changes in demand

A balanced S&OP processes which profitably matches demand andconstrained supply

Aligning manufacturing, supply chain, sales & marketing, regulatoryinteraction for successful new product launches

Leveraging global opportunities in sourcing

Planning and implementing master data management processesacross the organization

Reliable drug track and trace, authentication, reduce counterfeitingand fraud monitoring

Manage contract manufacturing relationships, compliance andproduct quality

Accessing existing unstructured information in manufacturing

Importance Performance

-10%

-12%

-10%

-13%

-14%

-14%

-14%

-15%

-15%

-16%

-20%

-21%

Gap




62%

64%

67%

62%

62%

62%

64%

55%

62%

60%

57%

57%

41%

44%

51%

47%

48%

50%

41%

49%

48%

47%

47%

47%

Leverage contract manufacturers for new product launch and agileresponse to demand

Ability to forecast demand

Achieving compliant, predictable product supply by manufacturingright-first-time

Managing the cost of compliance while achieving the desired levelsof compliance

Ability to respond to changes in demand

A balanced S&OP processes which profitably matches demand andconstrained supply

Aligning manufacturing, supply chain, sales & marketing, regulatoryinteraction for successful new product launches

Leveraging global opportunities in sourcing

Planning and implementing master data management processesacross the organization

Reliable drug track and trace, authentication, reduce counterfeitingand fraud monitoring

Manage contract manufacturing relationships, compliance andproduct quality

Accessing existing unstructured information in manufacturing

Importance Performance

-10%

-12%

-10%

-13%

-14%

-14%

-14%

-15%

-15%

-16%

-20%

-21%

Gap


Insight: Gaps are in leveraging 3rd party capabilities, demand forecasting,right first time manufacturing


An Hierarchy of Manufacturing Metrics

What it is What it tells you

OperationalExcellence

DemandVolatility

RightFirstTime

MfgCost

RM, WIP +FG

Inventory

RightFirstTimeDetail

MfgCostDetail

SupplierQuality

SupplierOn-Time

ScheduleCycle

Variances

AssetPerformance

(OEE+)

ScheduleAdherence

Complexity(COs vs

Mix)

ScheduleChanges

FirstPassYield

Req. RMTo Prod

Cycle TimesRM

InspectStageTimes

FGInspect

Sched ToDispatch

Production ContractComplexity

Supply NetworkInvestment

• Responsiveness• Costs

PerformanceConstraints

Mfg Cycle Times • Manufacturing Complexity• Manufacturing Agility

• Root Cause Analysis• Surgical Intervention

Insight: becoming Demand Driven requiresRight First Time manufacturing capabilities


2006 Manufacturing Metrics Study

AMR Research examined 100 manufacturing firmsto prioritize, segment, and assess theimportance/impact of manufacturing metrics.The research sample was split between process

and discrete manufacturers to enable side-by-sidecomparisons.The sample distribution also enabled comparisons

by company size (under 10,000 employees vs. over10,000 employees), and by job function/role (IT vs.Executive Management vs. ManufacturingManagement).

• Process industries included:Pharma, CPG, Chem, Pulp andPaper, Oil and Gas, andPrimary Metals

• Discrete industries included:Auto, High Tech, A&D, andFabricated Metals

• Respondent titles includedCorporate executives (36%),IT (23%), Ops/Production (27%)

• The average responding firmhad over 22 manufacturingfacilities


Manufacturing Metrics Tracked Today


Mfg quality metrics

Supplier qualitymetrics

Mfg costs metrics

Mfg responsivenessmetrics

Schedule adherencemetrics

Mfg flexibilitymetrics

Measuringdemand metrics

Insight: metrics are driving performance toward quality, compliance and cost


Key Research Findings: Manufacturing Metrics

The typical manufacturing organization only tracks 9different performance metrics.

Of the nearly 20 different manufacturing metricsexamined, only 6 were used by more than 60% of therespondents. None were used by all.

Most manufacturing firms rely on static metrics suchas inventory levels, fixed cost measures, and averageproduction or cycle time. Very few rely on predictivemeasures such as asset availability, varianceanalyses, or supplier-related metrics.

Between 30% and 60% of responding firms believestheir management ability and their agility is impactedby a lack of metrics.

Visibility into performancelevels are moderately highin some areas, but thesystems, tools, and opticsprovided tend not to focuson advanced/predictivemetrics.


Manufacturing Metrics Gap Analysis:Importance vs. Perceived Performance

% of Responses indicating a 4 or 5 on a 5-point scale

Insight: measurement strategy must align with business & manufacturing


Key Research Takeaways: Metrics & Performance

Among the vast array of metrics examined, quality-related issues ranked as the most important, followedby cost metrics, and agility/flexibility/responsiveness.

Respondents stated that their lack of optics intosupplier quality, demand measurement, andmanufacturing costs were their most criticalvulnerabilities.

Visibility into performance metrics is impacted byinaccurate reporting/forecasting processes, disparatesystems, lack of participation by key stakeholders, andinadequate staffing/tools.

The research clearlyshows that respondentsare both aware anddeeply concerned aboutthe lack of performanceoptics and metrics acrosstheir manufacturinglifecycle.


Capabilities Gap Analysis: Importance vs. PerceivedPerformance

%of Responses indicating a 4 or 5 on a 5-point scale

Insight: end-to-end visibility is key


Key Research Findings: SupportingCapabilities

A multi-site view of performance is perceived asimportant; respondents are beginning to connect corecapabilities with that desired outcome.

Composite metrics are desired, but remain elusive.

Establishing relationships between key performanceindicators and key performance drivers is the nextchallenge that manufacturers will focus on. A multi-site, multi-

environment, and multi-geography focus areincreasingly important tomajor manufacturers.

Mature manufacturers arefocused on aligningcapabilities that willsupport performancevisibility on this scale.


Enterprise Manufacturing Intelligence (EMI) is a keyarea of investment in Life Sciences…

Q41. Which of the following PRODUCT SUPPLY software components does your company currently use?

Q42. What PRODUCT SUPPLY software components does your company plan to continue to use or use for the first time in 2012, 5 years from now?


16%

28%

20%

22%

21%

24%

21%

25%

32%

26%

27%

36%

27%

29%

27%

30%

25%

29%

33%

27%

Enterprise ManufacturingIntelligence (EMI)

Supply chain planning

Specification/Formula/RecipeManagement

Lean Planning

Manufacturing ExecutionSystems (MES)

Supplier and customerportals

EH&S Waste/EmissionsManagement

Lean Execution

Continuous ImprovementTools (e.g. 6 Sigma)

Enterprise AssetManagement (EAM)

20072012


Perceptions of Technology on the Plant Floor –Enterprise Players Wanted

Perceptions of Plant Floor & Manufacturing Applications/Technology% of Responses

77%

71%

67%

64%

61%

54%

53%

17%

22%

24%

26%

27%

31%

30%

5%

7%

9%

11%

12%

14%

17%

I would prefer to have a single, integrated solution formanaging our manufacturing capabilities

It would be valuable to allow shop floor and manufacturingpersonnel to access a broader range of operational

information

I would prefer to source my manufacturing solution from alarge stable software provider

My organization can effectively collaborate and shareinformation between headquarters and shop floor systems

I would prefer to source my manufacturing application frommy ERP provider

My organization can effectively collaborate and shareinformation between our operations and my contract

manufacturer's systems

My organization can effectively collaborate and shareinformation between our operations and my supplier's

systems

Agree Neutral Disagree


REAL-TIME OFF-LINE, BATCHEDTRANSACTIONAL

Historians

EMI Frameworks

Real-time Process Control, SCADA,HMI/MMI

OPE

RA

TIO

NS

PRO

CES

SB

USI

NES

S

MES Operational Data Store

Interfaces to ERP/EAM

PureBusiness

IntelligenceApplications

/ DataMining

Who will deliver Composite Applications?

Enterprise Resource Planning,Supply Chain Management,

Enterprise Asset Management,Advanced Planning and

Scheduling

AdvancedAnalytics

andModeling

Tools

EMI

TIME GRANULARITY OF ANALYTICAL INFORMATION

CO

NTI

NU

UM

OF

OPE

RA

TIN

G C

ON

TEXT

S


REAL-TIME OFF-LINE, BATCHEDTRANSACTIONAL

Historians

EMI Frameworks

Real-time Process Control, SCADA,HMI/MMI

OPE

RA

TIO

NS

PRO

CES

SB

USI

NES

S

MES Operational Data Store

Interfaces to ERP/EAM

PureBusiness

IntelligenceApplications

/ DataMining

Who will deliver Composite Applications?

Enterprise Resource Planning,Supply Chain Management,

Enterprise Asset Management,Advanced Planning and

Scheduling

AdvancedAnalytics

andModeling

Tools

EMI

TIME GRANULARITY OF ANALYTICAL INFORMATION

CO

NTI

NU

UM

OF

OPE

RA

TIN

G C

ON

TEXT

S

ERP

Ecosystem partners

SAP MII as the EMI framework


In Closing

Life Sciences now recognizes the strategic nature of manufacturing operationsand are prepared to make investments

Visibility into predictable and profitable product supply performance is a keydriver for prioritizing manufacturing investments

Performance metrics on this scale will require architectures that providefederation of data from multiple disparate applications and data stores – financialand operational

Composite applications – including EMI or Operations Intelligence - offer amechanism that coordinates the architectural elements that comprise emergingmanufacturing operations management architectures

Life Sciences Buyers would prefer applications from a single, stable, provider –ERP is the logical point of contact

Andy DéSAP for Life Sciences

SAP Labs LLC

Achieving Superior Performancewith Compliant Manufacturing inPharmaceuticals

Summary



Key Customer Challenges


Global Competitiveness is HERE placing tremendous pressure oncost, quality and responsiveness

Lack of Visibility and Control into Manufacturing Exceptions in Real-Time and inability to profitably fulfill new orders

LOB Managers and Production Personnel cannot monitor, measure,analyze and control performance deviations in real-time across people,processes, asset and plants

Inability to rapidly design and deliver innovative plant-to-enterprisecomposite business processes and metrics for operational excellence

High TCO (total-cost-of-ownership) of integrating and extendingManufacturing Processes from ERP into the Plant Floor

Pharma Manufacturing today has some keychallenges…

Connecting the Factory to the Enterprise and enablingProduction Personnel are critical to cost-effectively deliveron customer expectations


Root Cause: Manufacturing and Enterprise businessprocesses need to be integrated …

What’s happening during every shift?Material availability and consumptionCapacity availability and utilizationSchedule changesProduct Genealogy tracking and QM

What’s happening at each line?Cycle Times / Operating EfficienciesMachine Breakdowns /Unplanned DowntimeQuality IndexPredictive Maintenance requirements

How are we hitting our targets?Total Cost of Production and VarianceLabor and Resource ProductivityOrder Fill Rates and Cycle TimesFixed and Variable Asset UtilizationERP

SFAC - Shop Floor Automation and Control SystemsMES – Manufacturing Execution SystemsDCS – Distributed Control Systems

MES

SFAC*

?

?

?

DISCONNECT

DISCONNECT


Integrating the real-time Plant Floor with theEnterprise poses formidable challenges….

Disparate Plant System Landscape

A Typical manufacturing plant will havebetween 10 and 50 shop floor automationsystems (SFA)

A multi-site manufacturer will have between40 and 700 SFA systems across itsenterprise

Factory

Enterprise

DISCONNECT


Current State

EnterpriseManufacturing integration

“Less than 1% of respondents indicated thatmanufacturing data is automatically integrated

with ERP with no manual intervention”Managing Automation and AMR Research

September 2005, Customer Survey

Manufacturing intelligence“There are gaps in providing adequate visibilityinto manufacturing KPIs, Financial performance

and multi-site performance analysis”Managing Automation and AMR Research

September 2005, Customer Survey

Plant

DISCONNECT


Plant Manager

MANUFACTURINGPLANT

MANUFACTURINGPLANT

MANUFACTURINGPLANT

VARIABILITY

Field Sales

CustomerService

Plant Manager Plant Manager

VP ofManufacturing

Payers

$Contract Organizations

Wholesalers

Patients

MembersPhysicians

Distributors

The World Without SAP …

Lack of integrated Manufacturing, Quality and Compliance in a singlesolution impacts ability to consistently deliver quality products,compliant with GxP**….

ContractManufacturers

** GxP = Good Manufacturing/ Clinical/ Lab Practices


Plant Manager

MANUFACTURINGPLANT

MANUFACTURINGPLANT

MANUFACTURINGPLANT

VARIABILITY

Field Sales

CustomerService


VP ofManufacturing

Payers


Wholesalers

Patients

MembersPhysicians

Distributors




Implications:• Very high TCO - less than 2% of Pharma

Manufacturers have integrated plant-to-enterprise business processes

Pain: Disconnect between and acrossthe Plant Floor and the Enterprise

Implications:• Warning letters from the FDA, high penalties, fines and

unplanned shutdowns - very high cost of compliance (10-30%)

Pain: Inability to document, validate and complywith GxP requirements, at the lowest cost

Implications:• Low order fill rates and missed

shipments (5-25%)• Excessive fire-fighting and

expedites• Higher rejects, re-work etc. and

higher cost of Quality (5-15%)

Pain: Production Personnel cannot deliver qualityproducts consistently to customers, and meetperformance targets



Plant Manager

MANUFACTURINGPLANT

MANUFACTURINGPLANT

MANUFACTURINGPLANT

VARIABILITY

Field Sales

CustomerService


VP ofManufacturing

Payers


Wholesalers

Patients

MembersPhysicians

Distributors



The VP of Manufacturing is challenged with consistently delivering high quality products tocustomers while complying with GxP** requirements, at the lowest cost of operations,

compliance and ownership (TCO)


Implications:• Very high TCO - less than 2% of Pharma

Manufacturers have integrated plant-to-enterprise business processes

Pain: Disconnect between and acrossthe Plant Floor and the Enterprise

Implications:• Warning letters from the FDA, high penalties, fines and

unplanned shutdowns - very high cost of compliance (10-30%)

Pain: Inability to document, validate and complywith GxP requirements, at the lowest cost

Implications:• Low order fill rates and missed

shipments (5-25%)• Excessive fire-fighting and

expedites• Higher rejects, re-work etc. and

higher cost of Quality (5-15%)

Pain: Production Personnel cannot deliver qualityproducts consistently to customers, and meetperformance targets


Operational Excellence in aCompliant Manufacturing

Environment with SAP


Compliant Manufacturing in Life SciencesIndustry

Packaging& Filling

Bulk Production &API and Formulations

Compliant ManufacturingCustomers

Suppliers

ProcessManufacturing(In-house Mfg)

SAP Capabilities :Master Recipe,Process Order,Operator Sheet,

EBR

LeanManufacturing =Flow + Repetitive(with Six Sigma)

SAP Capabilities :Rhythm Wheel-APO,Line Design-Balance,

Kanban Orders

ContractManufacturing(Outsource Mfg)

SAP Capabilities :Inter-company Stock

transfer orders,Subcontracting

Purchase orders

Planning /

Procurement

(by Parent)

Manufacturing

(at Contractor)

Business Operations drive selection of typeof Manufacturing Capabilities in the regulated environment


Compliant Manufacturing OperationsKey Stakeholders & Objectives

Compliant Manufacturing Operations can help you deliver quality productsto customers consistently with GxP compliance at the lowest possible cost

Plant-Level Operations Manufacturing ExecutionEnterprise Planning andControl

Chief Operating Officer

Production SupervisorPlant ManagerVP of Manufacturing

How can we deliverquality products whileensuring compliancewith GxP*?

How do we bridge thedisconnect between the plantand the enterprise?

How do I deliver high qualityproducts to customersconsistently, at the lowestcost of operations?

How do I ensure compliancewith quality and safetystandards like GxP*?

On-Time Delivery

Manufacturing budgetattainment

Throughput

Profit Margin

Customer Satisfaction

Quality and EH&SCompliance

OEE

Quality Conformance (RightFirst Time)

Operating and InventoryCosts

Scheduling Execution /Adherence and Attainment

EH&S and TraceabilityCompliance

Unplanned Downtime

Fines and penalties

* GxP = Good Manufacturing/ Clinical/ Lab Practices


Compliant Manufacturing OperationsEnd to End Process

Plant-Level Operations Manufacturing ExecutionEnterprise Planningand Control

Plant ManagerVP of Manufacturing

Chief Operating Officer

Compliant Manufacturing Operations connects Enterprise Planning and Control, Plant-Level Operations and Manufacturing Execution to bridge the chasm between the shop floorand the enterprise

Capacity &InventoryPlanning

Manufacturing

Plant

Production

Quality

Demand &Inventory

Management

ProductionPlanning

QualityPlanning

ProductionScheduling

Supply/DemandExceptions

InventoryControl

WorkInstructions

MonitorManufacturing

Operations

Cross PlantPerformance

Views

ScheduleExecution and

ProductionControl

SupplierCollaboration

MonitorQuality Data

VP of Manufacturing

Plant Manager

Production Manager

Quality Manager

Sampling &Inspections

CustomerOrder/Demand

ExceptionManagement

ProductionConfirmation

ReplenishProduction

MonitorEquipment

Performance

Monitor EH&SCompliance

Production Supervisor


Level 3 :Shop floorlevelManufacturingOperations

Level 4 :EnterpriseBusinessProcess

No SAP focusSAP platform focusManufacturing solution space (SAP focus)

SAP NetWeaver Manufacturing Platform

Level 2 :Automation &ConnectivityLevel 1 :Shop floor Process Control

How does SAP MII fit withinSAP’s Compliant Manufacturing Architecture (based on S95 standards)

RFIDSensors

EnvironmentalBldg Mgmt Sys

PLC / DCS /SCADA

InspectionEquip/Testers

Plant Data Collection Sub-System

ManufacturingPerformance

Analysis

ProductionTrend

Analysis

SAP BISCOR

ManufacturingDashboard

SAP EP

SAPERP

Finance /Costing

Sales /Service

Purchasing /EH&S

Warehouse/Inv Mgmt

Prod Planning /Det Scheduling

PLM /GLM

SAP MDMMasterData

SAP CompliantManufacturing

Shop-floorCommunication

Incidence

Reporting

Electronic

Logbook

Lot

Genealogy

Room / Eqpt

Qualification

Process

ManagementYield, Rework

Scrap Analysis

Operator

QualificationSample

Mgmt

Real time QM

Labour, WIP

Weigh &

Dispense

Process StepEnforcement

Recipe/Spec

Management

ShopfloorData

(OPC)

Regulatory

Reporting

EBR

Checklist

Document

Mgmt System

Operator Interface

Data HistorianAdaptive DeviceIntegration

WeighScales

AnalyticsServices

VisualizationServices

SAP MIIManufacturingIntegration &Intelligence

S95 (B2MML) :

Prod Plan, Performance,Maintenance & Quality

Adaptersfor

CollaborativeManufacturing


PAS-X (Weigh-Dispense, MBR & EBR) by Werum

PAS-ECMI

SolutionEnd-to-End Solution :- Integrated solution to reduce integrationchallenges- Provides complete functional coverageOpen architecture :- Supports industry standards- Adheres to compliance and validation

PAS-X extends the compliant manufacturing capabilities of SAP ERP. With thehelp of PAS-X solution integrated with ERP leveraging MII , offices can beconnected to the factories, weigh-dispense can be managed with bettervisibility to SAP Manufacturing for global sites.

Business BenefitsBetter manage the business growth by gainingcontrol and visibility over global mfg to optimizeperformance.Reduce overall manufacturing cost by loweringcost of ownership and improve product quality.Ensure Compliance by adhering to regulations.

Interface MES / DCS, SCADA

Interface ERP / MES

Enterprise level

Plantlevel

Fieldlevel

MES

ERP

PLS

SAP Manufacturing M

I

I


SAP ERP 6.0

Life Sciences Manufacturing Best Practices Roadmap

ERP for BusinessInfrastructure

Support

OperationalExcellence with SAP MII

Enforce Compliancewithin Manufacturing

Today’s burning issue:Built into the Manufacturing Process

Tremendous cost andcompetitive

opportunities

Manufacturing Process and Technology Maturity

Valu

e R

ealiz

atio

n


Benefits of Contract Manufacturing SolutionHow to provide visibility and control in a flat world …

Control costs of outsourced manufacturing in your backend

Increase customer service by more accurate ATP dates

React to demand changes (by knowing your supply options)

Quickly react on shifts in supply situation, reduce liabilities

EnhancedControl and

Orchestration

Improve supplier relationship by providing more accurate data

Improve collaboration on Engineering Changes

Minimize disruptions through proactive alerting

Collaborate on quantity confirmations (instead of dictating)

Increasedcollaborationwith partners

Identify material events for SOX

Complete visibility also for multi-tiered supply chain

Get visibility into production progress thru work order

Leverage accurate information on inventory & purchase orders

Improvedvisibility

into supplychain


What do Pharma Manufacturers need for OperationalExcellence with Compliant Manufacturing?

Pharma Companies need capabilities for:

Manufacturing operations: A comprehensive ERPsolution for managing Manufacturing Operationscompliant with CFR Part 11

Manufacturing integration: A manufacturingintegration platform to connect manufacturing processeswith enterprise processes

Manufacturing intelligence : real-time actionableanalytics and decision support to production personnelso they can deliver on their performance goals

Manufacturing innovation: a web-services basedrapid design and development framework for compositebusiness processes, application and metrics

Enterprise

Factory

Performance

Responsiveness

Visibility


What do Pharma Manufacturers need for ManufacturingExcellence with Compliant Manufacturing?

Pharma Companies need capabilities for:

Manufacturing operations: A comprehensive ERPsolution for managing Manufacturing Operations compliantwith CFR Part 11

Manufacturing integration: A manufacturing integrationplatform to connect manufacturing processes with enterpriseprocesses

Manufacturing intelligence : real-time actionableanalytics and decision support to production personnel sothey can deliver on their performance goals

Manufacturing innovation: a web-services based rapiddesign and development framework for composite businessprocesses, application and metrics

Enterprise

Factory

Performance

Responsiveness

Visibility


SAP MII

How does SAP MII enable Compliant Manufacturingthru Manufacturing Integration, Intelligence andInnovation?

CompliantManufacturing

Manufacturing OperationsSAP ERP

ManufacturingIntelligence

Reliably produceto target withyear-to-year

process and costimprovement

ManufacturingInnovation

Deploy plant-to-enterprisecompositebusiness

processes,applications and

metrics

ManufacturingIntegration

“A SingleVersion of theTruth” acrossthe Plant andthe Enterprise


SAP xMII

How does SAP MII enable Compliant Manufacturingthru Manufacturing Integration, Intelligence andInnovation?

CompliantManufacturing

Manufacturing OperationsSAP ERP

ManufacturingIntelligence

Reliably produceto target withyear-to-year

process and costimprovement

ManufacturingInnovation

Deploy plant-to-enterprisecompositebusiness

processes,applications and

metrics

ManufacturingIntegration

“A SingleVersion of theTruth” acrossthe Plant andthe Enterprise

Only SAP MII delivers Manufacturing Integration (with the Enterprise),Intelligence and Innovation, in weeks per Plant, to enable Superior

Manufacturing Performance at the lowest TCO


SAP NETWEAVER

What is the SAP Manufacturing Integration and Intelligence(MII)?

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

SAP MII

SAP Manufacturing Integration andIntelligence (MII) is a packagedcomposite application that delivers:

Manufacturing Innovation Manufacturing Innovation: Web-servicesand content to rapidly design and deployComposite Business Processes, Applicationsand Metrics

Oth

er S

AP

Bus

. Sol

u tio

ns

SAP

BI

SAP ERPSAP SCM

ManufacturingIntelligenceDashboards

Manufacturing Intelligence: Real-timeanalytics engine that aggregates and deliversunified visualization of events, alerts, KPIs anddecision support to production personnel thrurole-based dashboards

Manufacturing Intelligence

Manufacturing Integration

Manufacturing Integration: A singleISA-95 compliant layer enabling SAP ERPconnectivity into real-time plant floor apps.(MES, SFA, legacy apps.) to drive plant-to-enterprise business process interoperability


How does SAP MII Integrate ManufacturingOperations with the Enterprise?

SAP MII enables real-time transactionalintegration between plant floor andenterprise (SAP ERP) systems out-of-thebox thru:

Universal Connectivity to the data,functionality and processes of existingplant floor systemsBusiness Logic for creating automatedevents, KPIs and alertsWorkflow to synchronize plant andEnterprise business processesBuilt in S95 and B2MML messages andschema to make legacy systemsinteroperable

SAP NETWEAVER

SAP MII

Oth

er S

AP

Bus

. Sol

u tio

ns

SAP

BI

SAP ERPSAP SCM


Manufacturing Innovation



Key Customer Benefits:Automated synchronization of orders, materials, maintenance and qualitybetween plant and SAP ERP – a “single version of the truth”Real-time detection and automated resolution of manufacturing exceptionsERP integrated to Plant Systems in 2-16 weeks per plant

Bottom Line: Faster time-to-value and lower TCO


SAP NETWEAVER

SAP MII

Oth

er S

AP

Bus

. Sol

u tio

ns

SAP

BI

SAP ERPSAP SCM





SAP MII integrates manufacturing operations with theenterprise, and delivers actionable visibility….

• Plan work orders• Check resources• Create mfg plan• Scheduling• Release work order• Close order• Shipping and logistics

Real-time events/alertsOrder statusCharge ratesLife of inventoryYieldsCompletions and usageStart and stop timesQuality and lab dataProcess historyBest practice deviationsEfficiencyDowntime trackingRework scrap rates

Equipment Tracking and Performance Downtime and OEE Reporting


How does SAP MII deliver ManufacturingIntelligence?

SAP MII enables production personnelto deliver superior performance thru:

a real-time analytics engine thataggregates data from the plant floor

delivery of right- time actionableintelligence from multiple systems - unifiedreal-time analytics (KPIs, reports etc.) intorole-based dashboards, at a low cost ofinformation delivery

monitoring, drill-downs, analysis, controland improvement of Six-Sigma metrics

asset-to-asset, plant-to-plantcomparisons for sharing best businesspractices

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How does SAP MII deliver ManufacturingIntelligence?

SAP MII enables production personnel todeliver superior performance thru:

a real-time analytics engine that aggregatesdata from the plant floor

delivery of right- time actionable intelligencefrom multiple systems - unified real-timeanalytics (KPIs, reports etc.) into role-baseddashboards, at a low cost of information delivery

monitoring, drill-downs, analysis, control andimprovement of Six-Sigma metrics

asset-to-asset, plant-to-plant comparisons forsharing best business practices

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Manufacturing IntelligenceKey Customer Benefits:Real-time performance management – provides actionable measurements ofasset performance to speed goal attainmentContinuous Improvement – links production metrics to improvement and causalanalysis to accelerate process improvement

Bottom Line: Production Personnel can monitor, measure, analyze andcontrol KPIs and variances thereof, to improve their performance,

productivity and quality of work life


How does SAP MII enable Manufacturing Intelligence?Analytics: Long Execution Time of Manufacturing orders


How does SAP MII enable Manufacturing Intelligence?Analytics: Long Execution Time of Manufacturing orders

SAP ERP

Process Historian via SAP MII

Control system via SAP MII


How does SAP MII enable Manufacturing Intelligence?Analytics: WIP Orders – Analytics with Work center KPIs


How does SAP MII enable Manufacturing Intelligence?Analytics: WIP Orders – Analytics with Work center KPIs

SAP ERP

SAP MIICalculated


How does SAP MII enable Manufacturing Innovation?

SAP MII enables design and deploymentof innovative plant-to-enterprise businessprocesses, applications and metrics byproviding:

Data and Event Servicesprovide unified and secure access of

data and events to all of the otherplatform services and functions

Analytic ServicesMetrics/KPIsSPCData transformation

Manufacturing Process ManagementService-enablement of plant

applicationsComposite service-compositionManufacturing process orchestration

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N.B. This is not a complete listing of SAP xMII web-services available today


How does SAP MII enable Manufacturing Innovation?

SAP MII enables design and deploymentof innovative plant-to-enterprise businessprocesses, applications and metrics byproviding:

Data and Event Servicesprovide unified and secure access of

data and events to all of the otherplatform services and functions

Analytic ServicesMetrics/KPIsSPCData transformation

Manufacturing Process ManagementService-enablement of plant

applicationsComposite service-compositionManufacturing process orchestration

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SAP MII

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N.B. This is not a complete listing of SAP xMII web-services available today

Key Customer Benefits:Rapid and cost-effective design of plant-to-enterprise business processes andapplications not delivered by packaged apps., in days and weeksDeploy composite metrics like OEE, Right First Time etc. to sustain your Lean andSix-Sigma initiativesApplications and KPIs can be delivered by Plant IT without external support

Bottom Line: Innovation and Superior Performance, at a far lower cost ofdevelopment


Illustrative example of a Composite Metricdeveloped using SAP MII: OEE Availability

Key Customer Benefits


Consistently deliver high quality products to customers whilecomplying with GxP**requirements, at the lowest cost…

The World With SAP …


VARIABILITY

MANUFACTURINGPLANT

MANUFACTURINGPLANT

MANUFACTURINGPLANT

Plant Manager

Plant Manager

VP of Manufacturing

Field Sales

SAP

CustomerService

Plant Manager

Payers


Wholesalers

Patients

MembersPhysicians

Distributors




The World With SAP …Benefit• Consistently deliver high quality products to customers at the lowest cost of

quality and operations (increase efficiency 5 - 25%)

Solution: Deploy a comprehensive solution for manufacturing, qualityand compliance, globally, across multiple plants


VARIABILITY

MANUFACTURINGPLANT

MANUFACTURINGPLANT

MANUFACTURINGPLANT

Plant Manager

Plant Manager

VP of Manufacturing

Field Sales

SAP

CustomerService

Plant Manager

Benefit• Lower TCO 2-5 X on plant- to- enterprise

integration; minimize fire fighting thrureal-time visibility

Solution: Integrate SAP ERP toreal-time plant floor systems, in2-16 weeks per plant

Payers


Wholesalers

Patients

MembersPhysicians

DistributorsBenefit• Manage GxP compliance by exception –

lower cost of compliance (and risks) 10-30%

Solution: Deploy ElectronicBatch Records (EBRs) for GxPcompliance across people,equipment and processes




The World With SAP …Benefit• Consistently deliver high quality products to customers at the lowest cost of

quality and operations (increase efficiency 5 - 25%)

Solution: Deploy a comprehensive solution for manufacturing, qualityand compliance, globally, across multiple plants


VARIABILITY

MANUFACTURINGPLANT

MANUFACTURINGPLANT

MANUFACTURINGPLANT

Plant Manager

Plant Manager

VP of Manufacturing

Field Sales

SAP

CustomerService

Plant Manager

Benefit• Lower TCO 2-5 X on plant- to- enterprise

integration; minimize fire fighting thrureal-time visibility

Solution: Integrate SAP ERP toreal-time plant floor systems, in2-16 weeks per plant

Payers


Wholesalers

Patients

MembersPhysicians

DistributorsBenefit• Manage GxP compliance by exception –

lower cost of compliance (and risks) 10-30%

Solution: Deploy ElectronicBatch Records (EBRs) for GxPcompliance across people,equipment and processes

** GxP = Good Manufacturing/ Clinical/ Lab PracticesSAP enables the VP of Manufacturing to consistently deliver quality products to customers,while complying with GxP** requirements, at the lowest cost of operations, compliance and

ownership (TCO)


Invitation to the Perfect Plant Center of Excellence(COE) from SAP and Tata Consultancy Services (TCS)

Jointly developed by SAP and TCS

Capture a true day-in-the-life of ManufacturingOperations

Model various best practices within ProcessManufacturing

Profile end-to-end cross-functional businessprocesses

Showcase an integrated manufacturing solutionforLife Sciences, including those from SAP’spartners

Mitigate risk of adoption for SAP’s customers

Customers and Prospects are invited tovisit the Perfect Plant Center ofExcellence (COE) at the SAP facilities inNewtown Square, PA, USA and Walldorf,GermanyWhite Paper on the Perfect Plant COE for

Life Sciences available on demand


Partial Listing of SAP ERP and SAP MII LighthouseCustomers in Life-Sciences

Wyeth Pharma – Manufacturing PerformanceManagement

Roche Pharma – connecting SAP ERP to the plantfloor

Novartis Pharma – operational excellence (SCM andmanufacturing)

Merck - facilities management, performancemanagement / reporting

Eli Lilly - production management – batch reporting

Amgen – manufacturing analytics

Genentech – KPI management

Johnson and Johnson

Allergan

Bristol Myers Squibb

Glaxo Smithkline

Daiichi

Purdue Pharma

Helvoet Pharma

St. Jude Medical

Respironics

SAP MII CustomersCore Manufacturing Customers(SAP ERP)


WHY SAP SOLUTION (SAP MII) AND TCS WAS SELECTEDTransactional integration between SAP ERP, MES, LIMS and DocumentMgmt Systems enabled in Weeks per Plant, at lower TCO

Rich, unified visualization of manufacturing data, metrics, exceptions andperformance delivered in real-time via role based dashboards using DART(Data Analysis and Reporting Tool) delivered by TCS

KEY BENEFITSReal-time data retrieval (metrics, exceptions, reports and performance),analysis and visualization, and fact-based GMP decision makingcapabilities enabled thru role based dashboards for managers andproduction personnel.

Measurable ROI from labor reduction, exception based management ofelectronic batch records (EBR), quality improvements and significantlyreduced cycle times and compliance exceptions

PROJECT OBJECTIVEInstitutionalize Operational Excellence across the enterpriseEnsure consistent and sustainable complianceStandard KPIs for ROI measurement – “a single version of the truth”Improve quality, reduce costs and increase utilization of assets

Wyeth Pharma is a leader in thediscovery, development,manufacturing and marketing ofpharmaceuticals, vaccines,biotechnology products and non-prescription medicines. Majordivisions are WyethPharmaceuticals, Wyeth ConsumerHealthcare and Fort Dodge AnimalHealth.

2007 Sales – $22.4 billion50,000 employees worldwide

_______________________________________

Realized ROI - $ 1.3 – 7.4 MM perplant from their DART initiativeusing SAP MII.

12 manufacturing locations inscope for deployment.

Customer Success: Wyeth Pharmaceuticals


WHY SAP SOLUTION WAS SELECTEDTransactional integration between SAP ERP and Plant Floor systems (incl.Werum) enabled in Weeks per Plant, at lower TCO

Rich, unified visualization of manufacturing data, metrics, exceptions andperformance delivered in real-time via role based dashboards

Ability to extend manufacturing processes beyond the plant floor (e.g. SupplyChain) and vice-versa

KEY BENEFITS PROJECTEDReal-time data, metrics, exceptions, reports and performance delivered toManagers and Production Personnel

KPI driven exception based management of Lean Manufacturing across thePlants

Protection and leverage of investments in current Plant IT infrastructure andintegration with SAP ERP at lower TCO

PROJECT OBJECTIVEAchieve vision of becoming the “Toyota of the Pharma Industry” whilemaintaining high compliance

Extend Lean from the Supply Chain to the Plant Floor using SAP

Manage Lean Manufacturing by ExceptionNovartis is one of the top 5Pharma manufacturers globally,headquartered in Basel,Switzerland, with over 90,000employees in 140 countries,with 2005 revenues of US $ 32.2Bn

Customer Success: Lean Manufacturing atNovartis

Novartis is well on its way tobecoming the “Toyota of thePharma Industry” using Leanprocesses enabled by SAP’ssolutions.


WHY SAP SOLUTION WAS SELECTEDTransactional integration between SAP ERP and Plant Floor systems (incl.Werum) enabled in Weeks per Plant, at lower TCO

Rich, unified visualization of manufacturing data, metrics, exceptions andperformance delivered in real-time via role based dashboards

Ability to extend manufacturing processes beyond the plant floor (e.g. SupplyChain) and vice-versa

KEY BENEFITS PROJECTEDReal-time data, metrics, exceptions, reports and performance delivered toManagers and Production Personnel

KPI driven exception based management of Lean Manufacturing across thePlants

Protection and leverage of investments in current Plant IT infrastructure andintegration with SAP ERP at lower TCO

PROJECT OBJECTIVEAchieve vision of becoming the “Toyota of the Pharma Industry” whilemaintaining high compliance

Extend Lean from the Supply Chain to the Plant Floor using SAP

Manage Lean Manufacturing by ExceptionNovartis is one of the top 5Pharma manufacturers globally,headquartered in Basel,Switzerland, with over 90,000employees in 140 countries,with 2005 revenues of US $ 32.2Bn

Customer Success: Lean Manufacturing atNovartis

Novartis is well on its way tobecoming the “Toyota of thePharma Industry” using Leanprocesses enabled by SAP’ssolutions. SAP MII offers Novartis real-time process status visualization and communication capabilities

as well as the ability to integrate SAP ERP to our legacy and non-SAP plant systems, rapidly,at a lower total-cost-of-owqnership.

Ralph HaefeliHead of Global TechOps IT Systems, Novartis Pharma AG

“


Summary



SAP enables Operational Excellence withCompliant Manufacturing in Life Sciences…

Summary of Key Customer Benefits:Consistently deliver high quality products to customers at the

lowest cost of operations

Manage GxP compliance requirements, by exception, at the lowest

cost of compliance

Bridge the disconnect between the Plant Floor and the Enterprise,

with SAP MII, to enable Operational Excellence:

Integrate and extend your ERP Manufacturing Processes into your Plant

Floor at the Lowest TCO

Empower Production Personnel with Actionable Intelligence for Superior

Performance

Design and deliver innovative Composite Processes, Applications and

Metrics for Competitive Advantage

SAP delivers a comprehensive solution for manufacturing qualityproducts, compliant with GxP, at the lowest cost of operations,compliance and ownership

Operational Excellence withCompliant ManufacturingOperations for Pharmaceuticals


Andy Dé, Senior Director Industry SolutionsSAP for Life Sciences


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