Is sustainable manufacturing attractive to businesses? Let’s put the ecological aspect aside and focus on the economic advantages of sustainable manufacturing. Rising costs of raw materials and energy have sparked heightened interest in sustainability across all industries. As a result, many clients of SAP aim to maximize the potential of resource-efficient production by increasing reuse of components and sub-assemblies.
Many sustainable supply chain processes have stemmed from economic imperatives, such as optimizing travel distances and loading capacities in logistics. The transparent relationship between economics and ecology is well-established, but what about the sustainability of the ever-growing flood of products we produce and consume?
The process industry, which includes companies involved in obtaining, transporting, and processing raw materials into semi-finished or end products, already leverages IT systems to enhance ecological efficiency. These systems optimize the recovery of waste, scrap, by-products, and co-products to the extent that the process industry, for instance, can deliver 100 percent recycled sweaters, carpets, or glass bottles. So, the process industry has made significant steps towards reducing its material expenditure to increase profitability.
However, the discrete industry, which involves the production of individual machines or products assembled along a production line, has not yet fully tapped into its sustainability potential, primarily due to the complexity of its products and its business models. The presence of various product variants, customer-specific options, and potential sources of error has deterred many companies from levering re-use of components or subassemblies to reduce material expenditure.
An innovative reprocessing template for execution and planning from SAP now fully industrializes repair, refurbishment, or remanufacturing to increase re-use in the discrete industry. Just imagine the cost savings and environmental benefits for a manufacturer if 70 percent of a product consists of reused components or subassemblies!
Overview of Reprocessing with SAP
SAP structures the reprocessing of returned products into three main steps (Figure 1): the returns process trigger, reprocessing intelligence, and reprocessing execution. Each of these steps can be independently adjusted to align with the necessary complexity of the product and process during reprocessing.
When dealing with returned products, it's vital to handle uncertainties about their condition. We take a step-by-step automated approach to ensure economic viability. The return process trigger starts diagnostics during disassembly. The results decide if we proceed with the planned reprocessing, adapt to new findings (like needing more material or steps), or if scrapping is necessary.
The necessary decision-making intelligence is embedded in the reprocessing product structure, facilitating the automatic generation of disassembly and reassembly orders for a seamless, automated end-to-end reprocessing flow. This allows customers to automate even the most intricate reprocessing as a seamless business process, as further detailed below.
Figure 1: High-level Reprocessing Flow (service provider/manufacturer)
1. Return Process Trigger:
- Process-trigger neutral concept: A process trigger can take various forms (e.g., maintenance plan, customer service order, error code, etc.).
- Automated creation of disassembly production orders for different trigger points in the return process (maintenance plan/order, customer service order, IoT data, sales order, buyback, etc.).
- Efficient use of production orders for increased effectiveness and the application of standard SAP functions such as MRP Run, ATP Check, etc.
- Seamless traceability of data throughout the refurbishment process, including serial numbers, customer information, defect types, maintenance plans, dates, and costs.
- Valuation management of material to identify and track all stages and statuses of reprocessing.
2. Reprocessing Intelligence:
- Reprocessing intelligence scales with product and process complexity, ranging from plain harvesting with fixed routing to simple reprocessing with diagnosis-dependent routing and a bill of materials (BOM) without capacity and material availability checks, and finally, complex reprocessing with diagnosis-dependent routing and a BOM that includes capacity and material availability checks.
- For low complexity, diagnostic results during the execution of a single production order automatically adjust the routing/BOM for reassembly.
- For high complexity, diagnostic results from the disassembly production order drive the automatic creation of reassembly production orders.
3. Reprocessing Execution:
- The SAP Manufacturing Execution System (MES), known as SAP Digital Manufacturing (DM), seamlessly guides workers and orchestrates machines through the execution process without requiring engineering knowledge for reprocessing.
- 3D visualizations, complete with precise location information, guide workers through the reprocessing by showing the exact location of each part, facilitating diagnostics, testing, and reassembly.
- Supervisors can assign operations based on skill sets and availability, as well as track progress.
- A digital twin of the disassembled and reassembled product is automatically generated.
- The built-in Low Code/No Code capabilities enable business users to customize the worker user interface, adapt or create process flows, and build their own dashboards for analytics.
- The built-in AI-enabled visual inspection capabilities can be utilized for visual quality control during disassembly and/or reassembly.
Now let’s dive into the details:
SAP offers a comprehensive reprocessing template that customers and partners can customize to meet their specific needs – it is considered a best practice by SAP! The advantages of the SAP reprocessing template include:
- Increased efficiency in planning reprocessing
- Automated creation of production orders
- Accurate valuation of materials and material status end-to-end
- Streamlined workflow and an intuitive user interface for workers in SAP DM
- Precise 3D work instructions facilitating disassembly, diagnostics, and reassembly
The SAP reprocessing template, or best practice, not only supports sustainable reprocessing in discrete manufacturing but is also a sustainable IT solution. This is because the template is an inherent capability of the SAP Digital Supply Chain Architecture. Figure 2 illustrates that one SAP Digital Supply Chain Architecture accommodates all business models relevant to the discrete industry, including reprocessing for discrete manufacturers and service providers. Consequently, these customers can reuse not only materials but also their manufacturing IT solutions for reprocessing.
Figure 2: SAP Digital Supply Chain Architecture offers one architecture for different or multiple business models: MTS, CTO, CTO+, ETO and Reprocessing
How does the SAP architecture achieve this high level of flexibility and scalability? SAP Core Engineering provides, among other features, the necessary structural intelligence for each business model to leverage the SAP solution portfolio in a highly automated and efficient manner. This enables the delivery of a sustainable IT solution that also makes economic sense. Customers unfamiliar with this intelligence (SAP Product and Process Governance) can adopt it with minimal impact on all SAP standard solutions they already use, although they may need to forgo some custom extensions. SAP PPG supports a clean core approach in SAP ERP or S/4HANA.
Reprocessing Solution Concept
Now, let's delve into the details of how we utilize the SAP Digital Supply Chain Architecture in the reprocessing template. As mentioned earlier, the returns process can be triggered by maintenance planning, a customer request, a sales order, IoT, or any other SAP-supported process. The SAP reprocessing template links the reprocessing to the trigger point through matching structural information. For example, if the trigger point is a maintenance order, the respective reprocessing structure applies, aligning with the maintenance plan of the maintenance order. This structure is then used to manage the reprocessing flow end-to-end, creating material states for valuation, planned orders, production orders for disassembly and reassembly, adjusting routing and BOMs according to diagnostics findings during disassembly, and managing inspection requirements. Structural integration by core engineering is more flexible and easier to automate than alternatives, making it a perfect fit to support multiple business models in a sustainable IT architecture.
Reprocessing Planning with SAP PPG
Having outlined the architecture and the solution concept, let's go one level deeper and explore how we support the user during long-to-midterm planning and execution. SAP Solution for Reprocessing Planning can predict required capacities based on the number of products that might require reprocessing and the anticipated reprocessing frequency on a BOM level. For instance, if the reprocessing trigger is a maintenance plan, the SAP Process and Product Governance (PPG) reprocessing structure in S/4HANA can be used to generate planned orders. These orders are based on structures aligned with usage scenarios in the maintenance plan. The resulting frequencies and time-based distributions from the maintenance plan must be aggregated and then linked to the classification of the reprocessing structure.
Reprocessing Intelligence (SAP PPG) and Execution (SAP DM)
The SAP solution for Reprocessing Execution utilizes production orders for managing the reprocessing once the actual product arrives at the plant. Using production orders for reprocessing returned products allows us to fully leverage all SAP standard capabilities for lean and efficient manufacturing at scale without modifications.
The complexity of reprocessing discrete products is high, and businesses have struggled to industrialize the execution of reprocessing. The SAP template therefore offers structural intelligence in SAP PPG to automate the reprocessing considering product variance, engineered products, and the uncertainty of the product's state when it returns for reprocessing.
The structural intelligence, along with batch management, is used to assign a temporary material state to the product throughout the reprocessing to ensure the material value is correct and to simplify the logistics flow.
Secondly, it is used – especially for reprocessing with high to medium complexity – to generate a disassembly order for the MES system. The disassembly order includes a routing, diagnostic tests, and work instructions automatically configured by the reprocessing structure in SAP PPG to fit the requirements of the reprocessing trigger, the product, and the capabilities of the reprocessing facility.
Since we have to deal with uncertainty during reprocessing, SAP recommends creating a second order for reassembly. This order is generated automatically by SAP PPG based on the findings during disassembly.
Splitting the reprocessing flow into two with two orders – one for disassembly and one for reassembly - allows the planner to schedule the production orders for disassembly and reassembly in a highly efficient way. So, despite uncertainty, we can schedule very precisely on a short-term time horizon. This concept is illustrated in Figure 3 below.
Figure 3: Complex-condition based routing with Material Availability and Capacity Check. * We skipped process steps described earlier for visual clarity.
But what if the execution of reprocessing is very simple, like the repolishing and cleaning of steel wheels? In this case, the reprocessing structure manages only the material valuation and the update of the maintenance order once the reprocessing has been completed. Only a single order with a simple diagnostic-dependent routing and BOM is created in S/4HANA and then processed in SAP DM. In this case, we will not be able to check capacity and material availability during reprocessing but rely on the capacities secured by the planned order and the material secured by the safety stock. A simplified example is illustrated in Figure 4 below.
Figure 4: Simple condition-based routing without Material- and Capacity Check. * We skipped process steps for visual clarity.
A standard MES solution for Reprocessing Execution
One of the key advantages of the SAP reprocessing template is that the worker does not have to worry about order creation, material valuation, planning, and intra-logistics since all of that is taken care of in a highly automated way by the reprocessing structure in S/4HANA. Nor does the worker need to have engineering knowledge to deal with unexpected diagnostic results during disassembly since this is also handled in the background by the reprocessing structure in S/4HANA.
For execution, the worker is guided in SAP DM through every single step of the disassembly and reassembly by visual work instructions, diagnostic tests, and inspections. During disassembly, he can decide manually or automatically whether components should be returned to the warehouse or must be scrapped and replaced. The 3D visual work instruction indicates the special position of the component being disassembled or reassembled.
The supervisor can use SAP DM to assign orders and operations based on qualifications and availability of the worker and track their progress. Labor tracking gives full visibility into the labor cost and efficiency for each operation. This ensures planning efficiency and full transparency in the cost of the reprocessing execution. And finally, the traceability capabilities of SAP DM help create a complete digital twin of the reprocessed product, including serial numbers of all components and inspection results. Here limits can be set, for instance, how often a product may be reprocessed before it is being scrapped.
Conclusion
SAP delivers a sustainable and scalable IT solution for sustainable production in the discrete industry. The reprocessing template not only enhances efficiency but also automates essential processes, ensuring correct material valuation and offering a straightforward workflow for workers. With 3D work instructions and advanced planning capabilities, SAP's solution plays a dual role in promoting environmental sustainability and reducing costs in the manufacturing process. This innovative approach aligns with the industry's increasing focus on green practices, providing a mutually beneficial situation for businesses, the environment, and consumers alike.
Our Presales Journey in Reprocessing
Reflecting on our presales journey in reprocessing, it extends back several years to our initiation of groundbreaking efforts in SAP Manufacturing Execution. We harnessed the power of intelligent rework routing, initially tailored for discrete and electronics manufacturing, effectively enhancing production yield.
Fast forward to 2022, where pivotal strides were made as we successfully implemented a Cloud MES at Schüco Interior Systems and Bosch Rexroth. Leveraging SAP Digital Manufacturing and SAP PPG, we introduced a configurable manufacturing system designed for configure-to-order products. Within S/4HANA, each order not only configured the Bill of Materials (BOM) and routing but also dictated order-specific machine settings and inspections.
A significant milestone was reached at Hannover Fair 2023, where we seamlessly showcased an end-to-end demo of complex repair for discrete products. The demonstration illustrated our capability to configure a repair routing and BOM, addressing a specific failure code sourced from the customer's supervisory SAP DM-AIN system.
Today, we proudly present a new SAP best practise, applicable to any reprocessing process at manufacturers or service providers. This achievement stands as a testament to the remarkable dedication of individuals such as Nicolas Buckenmaier, Dmitri Kokarev, Ulrich Schmidt, Klaus Klimmek, Vivekananda Panigrahy, Manuel Noerenberg, Zhirong Lu, Andy Stricker, Helmuth Oehler, Dmytro Shepotynnyk, Gerhard Himmelsbach and others. Without their unwavering commitment and a strong partnership between SAP Consulting and BDF Experts, this transformative journey would not have been possible. Many thanks to each contributor for their invaluable contributions!
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