Saj Kumar

VP – Discrete Manufacturing

Energy Management in Manufacturing

Industries

© 2011 SAP AG. All rights reserved. 2

1. Energy Management – Why?

2. Challenges in Energy Management

3. Energy Management in Manufacturing

4. Improving Visibility into Energy Consumption

5. Case Studies

© 2011 SAP AG. All rights reserved. 3

The Global Appetite for EnergyProjected Global Energy Consumption by Sector

Source: International Energy Outlook 2010 http://www.eia.doe.gov/oiaf/ieo/ieoenduse.html

0

100

200

300

400

500

600

2007 2015 2020 2025 2030 2035

Qu

ad

rill

ion

BT

Us

Transportation

Industrial

Commercial

Residential

43% increase over 2007

© 2011 SAP AG. All rights reserved. 4

Stakeholder

Stakeholder expectations,

internal accountability,

reporting

Strategic

Price volatility, supply

disruptions can affect

profitability

Regulatory

Emissions limits and

efficiency mandates

Financial

Increasing share of OPEX

as margins shrink

The Energy Management Imperative

© 2011 SAP AG. All rights reserved. 5

1. Energy Management – Why?

2. Challenges in Energy Management

3. Energy Management in Manufacturing

4. Improving Visibility into Energy Consumption

5. Case Studies

© 2011 SAP AG. All rights reserved. 6

Energy Management Challenges

Across the Enterprise

VP Facilities/

Maintenance Chief Sustainability

Officer

COOVP Manufacturing

Energy

Costs

Margins

CTRM

Production

PlantMaintenance

Finance

EHS

Historians/Control Systems

Facilities/BCS

SCM/SRM

Transport

In-house

Cannot react strategically to energy spend fluctuations

No single system of recordfor energy across the enterprise

Energy not integratedwith budgeting, product planning or scheduling

No comprehensive viewof carbon / energy performance and improvement opportunities

Energy costs increasing as %of OPEX; Price volatility

threatens profitability

Energy use warning signs not visible to maintenance staff

Not optimizing spend on capital projects to get greatest returns

© 2011 SAP AG. All rights reserved. 7

SAP Delivers Comprehensive

Energy Data Across the Enterprise

Production

PlantMaintenance

VP Facilities/

Maintenance

Chief Sustainability

Officer

EHS

Historians/Control Systems

Facilities/BCS

SCM/SRM

Transport

Finance

COO

CTRM

Single system of record for

energy across the enterprise

VP Manufacturing

Energy

Costs

Margins

Margins protected from energy cost surprises

Integrated viewof energy as a production input & output

Enterprise approach to energy/carbon inventory and reduction planning

Faster payback on capital investments

Energy Awareness informs building / plant asset management strategy

In-house

© 2011 SAP AG. All rights reserved. 8

Energy Management – Strategic Initiatives

*Aberdeen Group, 2009. “Energy Management: Driving Value in Industrial Environments.” M. Shah, M. Littlefield, April 2009

© 2011 SAP AG. All rights reserved. 9

SAP Provides Benefits Across the Enterprise

Corporate Facilities Manufacturing Sustainability

Data Aggregation

and Visualization -

across disparate

sources, levels and

energy types

Integration –

energy, operations,

financial, SAP/3rd

party

Compare all

Operations - high

level or detailed,

executive and

operations visibility

Real-time

Feedback - alerts

and notifications

• Increase uptime

and reduce

costs by

integrating

energy usage

into

maintenance

strategies

•Drive continuous

Energy

Improvement

Projects

• Accurate, timely

information from

all locations

• Compare

performance

• Improved

margins from

more accurate

product costing

• Reduced

manufacturing

costs

• Better energy

contract terms

• Monitor energy

consumption by

asset, process,

or site

• Integrate

energy into

product

planning

• Determine

embodied

energy by

product

• Target big-win

efficiency

projects to

achieve

reduction goals

• Leverage

corporate-wide

visibility for

comprehensive

sustainability

strategy and

reporting

• Enable Carbon

Foot-printing

Facilities

© 2011 SAP AG. All rights reserved. 10

1. Energy Management – Why?

2. Challenges in Energy Management

3. Energy Management in Manufacturing

4. Improving Visibility into Energy Consumption

5. Case Studies

© 2011 SAP AG. All rights reserved. 11

How can we get control of energy

costs while still growing our business?

Which facilities/processes/products

are the most energy intensive?

Where are the greatest opportunities

for energy use reductions?

How can we integrate energy use

targets with maintenance programs?

How do I allocate energy costs across

my organization?

How can we reduce the time it takes

to compile and report our energy use?

ManufacturingHigh Level Business Objectives

VP of Facilities

VP of Manufacturing

Energy Champion

VP of Operations

How can I start managing energy with the same expertise as I manage

the rest of my business??

© 2011 SAP AG. All rights reserved. 12

1. Energy Management – Why?

2. Challenges in Energy Management

3. Energy Management in Manufacturing

4. Improving Visibility into Energy Consumption

5. Case Studies

© 2011 SAP AG. All rights reserved. 13

SAP Sustainability Map

Product ComplianceRecycling& Reuse

ProductFootprint

Material & Product Safety

SustainableDesign

Sourcing &Procurement

Traceability& Recall

GreenLogistics

Supply ChainDesign & Planning

Availability, Security, Accessibility & Privacy Green IT

MobilityResidential

EnergyPersonalFootprint

Smart Grid Participation

Production Energy Management

CarbonManagement

Facility Energy Management

Natural Resource Management

Benchmarking& Analytics

Strategy Management

Financial Risk& Performance

Engagement &Corp. Citizenship

Materiality & Assured Reporting

Labor Compliance & Human Rights

Strategic Workforce Management

Travel ManagementDiversity

Industrial Health & Safety

Environmental Compliance

Risk Assessment& Reduction

Process SafetyEmergency

Management

Product

SupplyChain

IT

Consumers

Operations

ExecutiveManagement

Environment,Health & Safety

HumanResources

© 2011 SAP AG. All rights reserved. 14

Energy Analysis with SAP MII

Data Aggregation and

Visualization

across disparate sources,

levels and energy types

Integration

energy, operations,

financial, SAP/3rd party

Compare Operations

high level or detailed,

executive and operations

visibility

Real-time Feedback

alerts and notifications

© 2011 SAP AG. All rights reserved. 15

Manufacturing Integration & Intelligence

Composition Environment

Data Services

Visualization

Business Logic Services

Quality Engine

KPIs / Metrics / Alerts

SAP MII Delivers Information and Process Integration

PLAN MAKE DELIVER

MAKE

Simplified Execution

Global Coordination

ERP SCM PLM

LIMS/ Inspection /

Equipment Testing

MESSCADA / HMI

Plant Data

Collection

Wireless IntegrationEnvironmental

Building Management

Plant Historian

Plant DB

DCS / PLC

via OPC

• Energy costs

• Planned Orders

• Bills of Material

• Production & Process

Orders

• Material Inventory

Levels

• Inspection Lots Data

• Master Recipes

• Material Details

• Batch Details

• Resources & Functional

Locations

• Maintenance Work

Order & Notification

details

• Material & Order Costs

SAP MII extracts data

from SAP ERP and

provides real-time

visibility and distribution

to Plant Floor Systems of:

• Energy usage

• Production Confirmations

• Process Messages

• Material Receipts

• Material Consumptions

• Material transfers

• Inspection results

recording

• Quality Notifications

• Batch Characteristic

recording

• Work Orders & results

recording

• Maintenance Notifications

SAP MII’s ability to perform

transaction execution into

SAP core applications also

enables automated, plant-

level creation of:

© 2011 SAP AG. All rights reserved. 16

Identify immediate savings opportunities as soon as

system is live via real-time data visibility plus preconfigured

and user-defined layouts.

Analyze current capabilities and data gaps to quickly

identify energy savings opportunities and understand key

drivers of energy consumption.

Integrate energy management, business process and

financial data to drive strategic changes that increase

efficiency, decrease environmental impacts and lower costs

Track results of improvement initiatives

Production

Rapid Deployment of Energy Analysis with SAP MIIAssessment, Content, Integration…Live in 12 – 14 Weeks*

*Extended content and services available

© 2011 SAP AG. All rights reserved. 17

SAP Value Proposition Reduce Costs and Drive Efficiency

Only SAP has the experience to quickly and

effectively integrate energy management

into your core business…

…because only SAP can link disparate

production data AND financial data in order

to provide a real-time energy monitoring

system

Companies can save up to 15%* in annual energy costs with energy

management best practices

Quick time-to-value - up and running in as few as 12 weeks

Immediate savings when project is live with < 1 year ROI

*Aberdeen Group, 2009. “Energy Management: Driving Value in Industrial Environments.” M. Shah, M. Littlefield, April 2009

© 2011 SAP AG. All rights reserved. 18

1. Energy Management – Why?

2. Challenges in Energy Management

3. Energy Management in Manufacturing

4. Improving Visibility into Energy Consumption

5. Case Studies

© 2011 SAP AG. All rights reserved. 19

Leading Companies Find Energy Savings Across the

Value Chain

Customers recognize the value of SAP MII for energy management

10% energy

6% CO2

$27M energy 47% energy

costs

52% energy 37% energy

costs

41% CO2

production

$1.1M energy

20% energy$3B energy

+ emiss

(suppliers)

STORE SHIP SELLDESIGN SOURCE PRODUCE

Appendix

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