Transcript Global Specification Management for the Process – early findings on Industries

Global Specification
Management for the Process
Industries – early findings on
Best Practices
Alison Smith
Sr. Research Analyst
Manufacturing & Production Operations
AMR Research
[email protected]
Big drivers for manufacturing agility
• Global markets
– World-wide competition
– World-wide product visibility – complex supply networks
– Standardized quality – demographic products
• Technology
– Increasing demand for innovation & shorter product lifecycles
– Time-to-market & Time-to-volume – plummeting NPD times
– Technology convergence - RFID
• Cost
– The “China Price”
– Six sigma, lean mfg
– Outsourcing
• Regulatory compliance
– Sarbanes-Oxley, 21 CFR part 11, Tread, WEEE, RoHS, etc…
Manufacturing Processes will adapt to:
• More Dynamic Supply Networks
– Fleet of Plants – distributed production assets
– Ongoing reconfiguration of sources / destinations
– Network of suppliers, plants, co-packing, distribution – many 3rd parties
• Better Short Term Demand Visibility
– Closed loop with S&OP, frequent schedule adjustments in the plants
– Product segmentation, price management
• Shorter New Product Development & Launch (NPD&L)
– Global specification management
– Automated workflow for product spec & packaging launch at plant
– Faster scaling and rollout to additional plants globally
• More product variants
– Global specification management, Retailer specific requirements (sizes,
packing, promotion), Localization requirements (recipe & labeling)
Brand equity management is more of a challenge
than ever before
Brand Owner
Suppliers
Suppliers
Contract
Manufacturers
Perfect Order Performance:
Right Product, Right Place, Right Time, Right Price
Contract
Manufacturers
Suppliers
Facility 1
Facility n
Information velocity & process traceability
• Escalates need for:
 Near real-time exchange of key product/process
requirements
 Performance feedback between business level and
execution systems
 Requires:
 Definition of “key” information (product specifications,
process specifications, quality, compliance, performance,
costing data)
 Who owns the master data?
• Delineation of functional ownership/stewardship – who’s
going to synthesize the information, and what are the
systems of record for each class of information?
AMR’s research on global specification management in
Process Industries
• Active dialogues:
– Industry leaders who have or are implementing global
specification management systems: Chemicals, Pharma,
Biotech, CPG, Food&Bev
• About:
– Drivers, budgets, timeframes & benefits
– Best practices: project planning, implementation, team makeup,
governance models, training & rollouts
– Technology approach
• “If you had a chance to do it again …?”
– Key lessons learned
Common specifications and business process
stakeholders
Product Lifecycle Management / Enterprise Materials and Resource Planning
New Product
Formulation
Process
Development
Research & Development
of New Products or Product
Variants to meet customer
specifications
• Raw Material (ingredient)
Specification
• Formula
• Process Specification
• Testing Specification
• General Recipe
• Packaging Specifications
• MSDS, labeling specs
• Delivery & Handling
Specs
Manufacturing
(In-house or
Contract) & QA
Packaging
(In-house or
Contract) & QA
Manufacturing (Bill of
process, bill of materials,
bill of equipment, bill of
test)
• Raw Materials Specifications
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Equipment specification
Supplier CoAs
Intermediates Specification
Process Specification
Testing Specification
Packaging Specification
MSDS, labeling specs
Delivery & Handling specs
Certificates of Analysis
Site Recipe
Master Recipe
S88
Control Recipe
Logistics
Customer
Fulfillment
• Retailer Specifications
• Product Information
• Delivery & Handling Specs
• Certificates of Analysis
Production “asset-centric” related business processes are
the largest consumers of specifications
100%
50%
Drivers by Industry Group
Food & Beverage
Consumer
Packaged
Goods
Chemicals
Pharma
Top
Uniformity
Strategic
Sourcing
Uniformity
Compliance
Secondary
Faster NPD & L
Faster NPD & L
Compliance
Faster NPD & L
Pain Points
Managing variability:
seasonality, inherent
variability in raw
materials;
Regulatory rqmnts:
traceability,
nutritional content
labeling, allergens,
warnings
Margin
optimization;
contain
materials costs
for raw materials
and finished
goods
packaging;
promotions.
Margin
preservation;
price premiums
for predictably
performing to
customer
specifications.
Depends on
position in
supply network.
Business
Drivers
Source: AMR Research 2005 Global Specification Management
for Process Manufacturers: A High (Return) Road to MDM
Uniformity
Faster NPD & L
Regulatory
compliance;
cGMP; ramp to
volume
GSM project benefit potential is large
Categories of
Benefits
Instances Cited
IT consolidation
Consolidated 60 globally distributed databases; consolidated 48
disparate systems as result of acquisition; consolidated 35 systems;
plans to eliminate separate packaging system database - can justify
investment on retirement of legacy system alone.
Strategic Sourcing
"Multiple" millions in material savings; $3M on a single corrugated
materials bid; $20M annually on raw materials through strategic
sourcing; $500,000 annual savings on shipping alone attributed to
availability of accurate case weight information
Clean Data for
Procurement
13,000 obsolete/incomplete specifications identified; case weights
incorrect; packaging systems and ERP out of synch; 10% of
specifications identified as incorrect/incomplete; identified gross
redundancies (35 unique specifications for identical ingredient)
Compliance
Time to locate product/batch data reduced from days to minutes;
product registration data managed correctly and centrally;
nutritional/allergen content/warnings managed centrally for product
labeling; product traceability data managed centrally
Other
Ready for UCCnet before WalMart; executed European product launch
before competitor; 50% increase in general efficiencies through
elimination of paper, redundant processes, correct information,
workflows
Source: AMR Research 2005 Global Specification Management for
Process Manufacturers: A High (Return) Road to MDM
GSM project findings to date
• Initial project budgets start in 800$K range – more
recent (w/in past 2 years) projects have initial budgets
of around 2$M
• Starting points vary (raw materials, ingredients,
attributes versus finished goods view)
• Final costs approach ~10$M
• Timelines converge at ~ 10 years – no strong
correlation between number of SKUs or number of
specifications managed
• Manufacturing is not tightly integrated 90% of time
Global companies, multiple sites (5 – 85),
10K – 100K product codes, various technology platforms
Production “asset-centric” related business processes are
the largest consumers of specifications
100%
50%
Consider the case of Global Recipe Management
Today – Process sheets
delivered in electronic
form – plant engineering
manually transforms
into site, master and
control recipes.
Site (plant)
Recipe
Control Recipe
General Recipe
• Site-specific information
• In local language
• Based on local raw materials
• Considers site-specific storage
constraints
Master Recipe
Master Recipe
Master Recipe
Processing information
• No equipment listed
• Used primarily for planning
or investment decisions or
activities
•
SiteSite
(plant)
(plant)
Site
(plant)
Recipe
Recipe
Recipe
• Process cell-specific information
• Depends on equipment types/classes
• Template for control recipes
• Equipment-specific information
• Batch-specific information: batch ID, batch size, raw
materials used, processing steps
ANSI/ISA-S88.01-1995: Batch Control Systems,
Part 1: Models and Terminology
The information management challenge today
raw materials;
intermediates;
finished goods;
ingredients;
attributes;
suppliers;
labeling specs;
equipment classes
General Recipe Management
Bill(s) of Materials;
Bill of Assay;
General Recipe (Process Sheet)
Product
Formulation &
Specification
Management
Site Recipe Creation &
Management
Site Packaging Management
Bill of Packaging Materials
Bill of Process
Bill of Equipment …
Bill of Materials
Bill of Process
Bill of Equipment
Bill of Assay
Local raw materials;
intermediates;
finished goods;
ingredients & attributes;
Local labeling specs;
Site equip. specifications;
control recipes;
local storage & handling
The rapidly evolving application landscape
• Formulation vendors extending product offerings to
encompass collaborative “PLM” processes
• ERP extending reach into manufacturing – may require
costly “re-optimization”
• Classic discrete PLM vendors consider “morphing” to
support recipe/formula based products
• Best of breed specification management systems adding
enterprise capabilities
Emerging best practices
• Executive-level sponsorship
• Cross-functional design teams
• Invest heavily in the design and planning phase
• Design for greatest level of detail – a bottom-up
top-down approach is required
• Plan on using best of breed solutions to augment ERP/PLM
• Designate clear project ownership
• Allocate sufficient resources for implementation required to
meet rollout timelines, budget, and M&A activities
• Budget for training, training, and more training
Common gotcha’s
• Transformation of unstructured specification data into
structured data
– Schema design and organizational buy-in is a time consuming
process.
– 2+ years identifying & consolidating unstructured data. More for
schema design.
• Data cleansing
– 38 different specifications for water. Cleansing is time consuming
and generally underestimated (no one wants to admit their data is
that dirty!)
• The devil’s in the details
– Neglecting to design for scaling, units conversion, chemical
compound data, packaging design details can result in large
setbacks such as scrubbed project phases, significantly reduced
scope, significantly higher costs.
Great Global Specification Management Project
Quotes
• “If we knew then what we know now … we
never would have done it … no, just kidding
….really”
• “Our real budget? It never would have been
approved!”
• “It’s like turning over a rock … you have no
idea what you’re going to find”
Today, global specification management is
viewed as a “business essential” by these
same companies.
Thank you!
Alison Smith
[email protected]