Chemicals, Life Sciences and Process Industry

Echelon has Earned SAP Recognized Expertise Designation in the Chemicals Industry
for its Customer Excellence and Delivery Capability.
SAP Recognized Expertise designation is considered a highly regarded recognition of a partner’s competency.

 

SAP Recognized Expertise is a designation awarded to organizations by SAP for their excellence in focused solutions or industries. This designation recognizes the expertise and competencies of SAP partners to distinguish their capabilities from competitors in the market. The requirements include having trained and certified individuals in a focus area or industry and a track record of customer success and satisfaction. Echelon Solution Group was verified for consultant expertise, customer excellence, and delivery capability.
SAP REX Chemicals_Echelon

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Best Practices - Chemicals Industry

Critical SAP functionality for the Chemical industry from a Supply Chain perspective:

  • Most chemical industries would benefit from a “Process Industry” (PP-PI) manufacturing footprint.  Normally the formulation, mixing, and blending steps of the manufacturing process would operate this way.  Depending on how integrated the company is, a discrete manufacturing process may be used for fractioning/bottling/packing processes of their finished products
Process Sub-Process Scope ID Description
Manufacturing Bulk Manufacturing with PI Sheet and EWM Integration 908 This process covers the manufacturing of a bulk product in the chemical industry. Within this process, QM functionalities such as In-Process-Control of the manufactured product with usage decision and Post-Process-Control of manufactured product with usage decision are included.
Furthermore, this process covers the creation and usage of browser based PI sheets. The PI sheet contains instructions for the shop floor employees, dangerous goods symbols, tables where actual process relevant values can be maintained and several entry fields.
The scope also includes EWM integration for material Staging and Putaway (Deliveries  Method)
Manufacturing Make-to-Stock (Process Industry) with staging using PMR in EWM 909 This scope item describes a standard make-to-stock manufacturing process including Quality Management. Material staging using PMR in EWM is included in this scope item.
Manufacturing Make-to-Order (Process Industry) 910 Make-to-order manufacturing process is used to sell certain specialty chemicals which are filled and packed only after a sales order is received.
Manufacturing Blending Process with MQC K36 Blend different batches of raw materials  to achieve a desired percentage of an active ingredient.
  • Batch Traceability is a key conceptual component of the Chemical industry business (across MM/PP/SD).  At a batch level, this would have dual purposes:
    • on one hand, to properly follow and trace product reclaim (both with customers and from vendors that may declare a problem).  This may have certain limitations and certain workarounds may be needed in the case of tanks that may be filled/refilled with the product without emptying/purging the tanks.
    • On the other hand, certain characteristics of the batches (for instance, the concentration of an active ingredient) may be considered when mixing two or more batches in order to get the best-expected outcome (e.g. mix a batch where the concentration of an active ingredient is on the low end of the acceptable range with a batch where the concentration is on the high end of the acceptable range, to balance out and minimize the risk that the resulting product has compliance/efficiency problems)
Process Sub-Process Scope ID Description
Manufacturing Batch Management BLF This scope item lets you work with homogeneous partial quantities of a material or product throughout the logistics quantity and value chain. This includes documentation of material properties, where-used information, and quality status.
Manufacturing Rework Processing(Stock-Manufactured Material) 2GG In this scope item, the rework process of stock manufactured material is realized in creating a new process order, using the material to be reworked as input, and the same material as output. Costs are collected within the new process order, and are settled into controlling as production variances. The input component and product have the same material number
Manufacturing Active Ingredient Processing 912 Manage active ingredient processing by adjusting process orders that include ingredients like catalysts whose potency varies. Take potency of a batch into consideration during order entry and delivery.
Within this scope item, the handling of active ingredients is shown in two different areas:
• In the manufacturing area, active ingredients are used as components. According to the potency, the physical quantity used in the process order is calculated.
• In the sales area, the potency of a batch can be considered during order entry and delivery respectively.
  • Quality Management (QM) is usually a critical component, as an enabler to the traceability discussed in the point above.  Properly integrated with LIMS (Laboratory Information Management System), maybe even replacing them or with direct interfaces between SAP and the lab instruments and measuring devices, the measured values for key inspection characteristics of the different inspection lots can be accurately and timely captured, accelerating the process for usage decision, and made available for subsequent processes and analysis (e.g. is a particular vendor consistently delivering products that are on the low end of the acceptable ranges?  Is a particular production line/mixer, shift/production lead. getting rejections more frequently than others?  The ability to respond to these questions should provide good insight to take important business decisions

In PPPI this process is integrated with all manufacturing processes like

908 Bulk Manufacturing with PI Sheet and EWM Integration
909 Make-to-Stock (Process Industry) with staging using PMR in EWM
910 Make-to-Order (Process Industry)
  • Quality certificates for each product/batch (QM and/or Batch Management with Classification), certifying the different values of the various quality inspection characteristics.  This is something normally required by customers that buy chemical products, particularly in bulk or larger quantities for other industries (normally not retailers or consumers).
Process Sub-Process Scope ID Description
Manufacturing Quality Management in Procurement 1FM This scope item describes quality inspection in procurement. Quality inspection is relevant when a material is received from a supplier. The result of the inspection might trigger further processing, such as return to the supplier for inadequate quality.
Manufacturing Quality Management in Sales 1MP This scope item describes quality inspection during the sales process (for example, high-quality materials are delivered to a customer). Once the inspection is accepted, the goods issue is posted, and the materials are delivered to the customer.
  • Directed picking and Automated Label reading for confirmation of picking/goods issue movements (WM, eWM, MM depending on the setup and complexity): in order to ensure that the right batch of the right product is picked and issued (both for production and for shipping to customers):
    • In the case of production, picking the wrong product/batch can lead to very expensive mistakes.  Due to the nature of “process manufacturing”, mixing the wrong ingredient in a formulation will result in a scrap of the whole batch being produced, manufacturing schedules delays due to stoppage of the lines, and additional costs due to purging and re-setting activities.
    • In the case of customer service, customers may have specific requirements regarding the characteristics of the batches they require.  Specific acceptable ranges of certain characteristics, specific remaining shelf life, etc.  Sending the wrong batch (not to mention the wrong product) will result in increased costs due to rejections, and decreased customer satisfaction which may lead to lost business and even lawsuits in some cases.
Process Sub-Process Scope ID Description
Manufacturing Batch Management BLF This scope item lets you work with homogeneous partial quantities of a material or product throughout the logistics quantity and value chain. This includes documentation of material properties, where-used information, and quality status.
Supply Chain Planning and Execution Warehouse Inbound Processing from Supplier with Batch Management 1V7 This scope item describes the usage of batch-managed products in a warehouse outbound process. You manage stock on a storage bin level using warehouse management functionality (embedded SAP EWM) in SAP S/4HANA.
Supply Chain Planning and Execution Batch Management in Outbound Processing 2HG Performing this warehouse process, you can send ordered goods to external customers with functions such as picking, packing, staging, and loading. This process lets you manage stock on a storage bin
Supply Chain Planning and Execution Basic Warehouse Outbound Processing to Customer 1V5 This scope item describes the usage of batch-managed products in a warehouse inbound process. You manage stock on a storage bin level using warehouse management functionality (embedded SAP EWM) in SAP S/4HANA.
Supply Chain Planning and Execution Advanced Warehouse Outbound Processing to Customer 330 This warehouse process optimizes the process of picking products and sending them to external customers by leveraging extended functionality of SAP S/4HANA Warehouse Management.
  • Subcontracting capabilities: toll-in and toll-out are very common in the chemical industry.  The ability to manage these through subcontracting features in Procurement and in the Sales/Manufacturing processes is normally a requirement as part of the normal business in this industry.  By implementing these features properly, not only the process steps, but also the cost of the product can be properly managed and monitored
Process Sub-Process Scope ID Description
Sourcing and Procurement Subcontracting (External) 918 A subcontract purchase requisition is either generated via the Material Requirements Planning (MRP) process or manually by a requestor. A buyer validates the accuracy of the purchase requisition and converts it into a subcontract purchase order.
Manufacturing Subcontracting (Internal) 24P In the Subcontracting (Internal) process, a vendor receives materials (components) and processes these materials. Finally, the semi-finished or finished materials are returned to the owner.

Innovation - Chemicals Industry

Tank Level Monitoring

Challenges:

    • Not being able to have accurate tank inventory levels (both onsite, and potentially at a customer’s site) results in excessive safety stock, inventory shortages, and impacts production and customer service (inventory on consignment).
    • Lack of visibility impacts transportation planning as changes to the shipping schedules can impact the availability of tank capacity, which can cause production and product storage problems. The problem of the bulk sales is that the quantities that are later actually filled and delivered vary and are therefore not fixed precisely during order entry.

 

Innovation:

  • In this extended scenario with SAP Leonardo IoT applications, a sensor in the tank measures the current physically available quantity. During the release, this quantity is checked and considered for release. Should the quantity be insufficient, then the order release is prevented. The system releases filling orders after the availability check for components.
  • When the system creates the delivery for the sales order, the system automatically adjusts the customer requested delivery quantity via the confirmed filling quantity. The invoice is sent to the customer in the delivery-related billing document for the precise quantity filled.
  • By measuring the tank level and integration of the sensor data in the production process, prevent from inaccurate entries and will determine the tank level in a quicker way.

Production Yield and Quality Monitoring

Challenges:

  • Life Science companies need to continually produce batches with consistent quality, keeping intra and inter-batch variance in consideration.
  • A tight integration between ERP, MES, Quality systems is required to maintain the bulk manufacturing process.
  • Criticality of manufacturing attributes and quality parameters is decided on the basis of their impact on the product.
  • Customer returns and product recalls lead to high cost implications.
  • Monitoring Machines for the organizations with large operations lead to waste of Man hours.

Innovation:

  • Using IoT tools, LIMS can be effectively interfaced with better graphical user interface and does help manufacturer to improve yield, reduce scrap and enhance ability to leverage predictive analysis.
  • With machines enhanced with location services, temperature sensors, door sensors etc. a manufacturer can get insight into data like exact location, power status, actual temperature within the asset.
  • Using this information, a manufacturer can ensure that the product is meeting the defined standards and correct operational conditions are maintained.
  • This information also reduces risk of outage and ensure the correct operational conditions of the assets representing their brand while being located and operated at a non-owned location and diminishes the frequency of physical visit.

Accurate information

Challenges:

Most of the Chemical Industries are aiming to gain long-term sustainability and profitable growth and have to focus on critical success factors, including:

  • Gaining maximum return on assets while increasing margins and profitability.
  • Supply chain efficiency while improving delivery accuracy to the maximum level.
  • Order accuracy, on-time delivery, and customer retention improvement.
  • Business implications of strategic decisions understanding

Innovation:

The innovation that the S/4 Analytics and DMC (data migration cockpit) offer, allows the company to get an accurate snapshot into their business. This not only allows them to know the pulse of the business, but it also gives them insights into the business to make decisions and take proactive actions.