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ThyssenKrupp Electrical Steel forges ahead with integrated IBM, SAP and PSI solution
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ThyssenKrupp Electrical Steel forges ahead with integrated IBM, SAP and PSI solution

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Working with IBM and SAP, ThyssenKrupp Electrical Steel (TKES) extended its existing SAP and PSImetals landscape to four additional locations, and implemented SAP Advance Planning and Optimization. …

Working with IBM and SAP, ThyssenKrupp Electrical Steel (TKES) extended its existing SAP and PSImetals landscape to four additional locations, and implemented SAP Advance Planning and Optimization. Combined IBM, SAP and PSI solution delivers cost savings of 25 to 30 percent over comparable solutions. SAP Advance Planning and Optimization allows TKES to extract the maximum usable material amount from each coil, reducing waste and increasing profitability.


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  • 1. ThyssenKrupp Electrical Steel Overviewforges ahead with integrated IBM, ChallengeSAP and PSI solution ThyssenKrupp Electrical Steel (TKES) aimed to createThyssenKrupp Electrical Steel (TKES) headquarters in Gelsenkirchen and in a homogeneous set of globalis part of the Materials division of the nearby Bochum, in India, in Italy, and in business processes and reportingmajor industrial firm ThyssenKrupp AG, France. To ensure efficient production standards. The ultimate goalswhich generated sales of €42.6 billion and effective coordination of its global were to optimize business andin the 2009/2010 fiscal year, and which activities, the company wanted to manufacturing operations usinghas approximately 177,000 employees standardize operations and reporting a standardized approach at allin more than 80 countries. across these different locations. locations. Without a consistent, corporate-wideTKES is a leading global manufacturer standard, the company recognized Solutionof grain-oriented and non-oriented that it could not achieve its full profit Working with IBM and SAP,high-tech electrical steel. This core potential. TKES extended its existing SAPmaterial is used throughout the and PSImetals landscape toentire value chain of the electrical The first step was to carry out a four additional locations, andenergy components industry, from business-process re-engineering implemented SAP Advancepower generation, transmission and project with the existing SAP Planning and Optimization.distribution to electric motors and application landscape at headquartersappliances. With its innovative, high- — which included the upgrade of Key benefitsquality products, TKES also plays a various legacy components and Combined IBM, SAP and PSIvaluable role in meeting the increasing platforms to the latest standards. solution delivers cost savings ofenvironmental requirements governing 25 to 30 percent over comparablethe use of steel in the manufacture of The company also developed a uniform solutions. SAP Advance Planningelectrical components. interface to its manufacturing locations, and Optimization allows TKES ensuring that everything was in place to extract the maximum usableStandardization for efficiency for a rollout of SAP Advance Planning material amount from each coil,The TKES business has five and Optimization across its Grain reducing waste and increasingmanufacturing locations: at its German Oriented Electrical Steel business. profitability.Case study
  • 2. The Gelsenkirchen and Bochum locations were using a solution from PSI for manufacturing operations, “The combination of automation and control, and physical IBM Power Systems process management, including and BladeCenterBusiness Challenge the information exchange with the with SAN Volume business applications. For example, Controller providedTo meet the demands of its on the shop floor PSImetals controls the end-to-endgrowing international business in materials tracking, process control, virtualization wean efficient and cost-effective way, measurements capturing, quality wanted across bothThyssenKrupp Electrical Steel management and reporting. The servers and storage.” PSImetals solution had gradually been(TKES) needed to standardize its Michael Brüne extended, and implemented in fourproduction, business control and Head of Information Technology manufacturing locations.financial systems. TKES PSImetals’ standard functionalityThe company aimed to create a covers 70 percent of requirements, withhomogeneous set of global business about 20 percent of TKES-specific and product movements throughout theprocesses and reporting standards, and about 10 percent location-specific whole plant, and optimizes productionbacked by a common solution customizations. Each manufacturing processes to minimize wastage (knownarchitecture and IT infrastructure. plant uses a separate database as ‘clippings’) and defects. to manage production orders andThe ultimate goals were to be amounts, time schedules, quantities, The integration between SAP andable to optimize business and quality, measures and weights of PSImetals is very tight, each softwaremanufacturing operations using intermediate and finished products. solution excels in its role. The differencea standardized approach at all is between the time horizons and levellocations, and to provide consistent Data exchange from the shop floor of granularity, and the solution can trulyreporting on production and finance systems to core SAP software is be considered as a joint setup, and not– regardless of location. This would managed by SAP NetWeaver Process the one or the other.require powerful, highly integrated Integration. During production,ERP and shopfloor solutions running PSImetals collects, monitors and Michael Brüne, Head of Informationon a reliable, high-performance analyses materials data, and enables Technology at TKES, comments:platform. complete tracking of finished goods “In our view, the main function of back to the raw materials used for hot information technology is to support rolled coil. PSImetals traces materials the central business processes in an 2
  • 3. optimized way. We have extremely processors and an IBM Power 570 withdemanding requirements regarding IBM POWER6 processors, while theproduct quality and delivery times, and PSImetals application server instancesgiven the global nature of our business, run on IBM BladeCenter HS22 blades.this makes us absolutely reliant on the Two IBM System Storage DS5300smooth operation of our information arrays provide high-speed disk storage, Solutiontechnology landscape. fully virtualized for greater flexibility using IBM System Storage SAN Volume Working with IBM and SAP,“We want to preserve a relatively small Controller. TKES extended its existing SAPtechnical team, to keep operational and PSImetals landscape tocosts low, and so our requirement This entire system landscape is four additional locations, andfrom the outset was for technology duplicated in the second building, implemented SAP Advance Planningthat would enable self-healing, fully with the exception that there is a and Optimization.autonomic operation as far as possible. single DS5300 rather than two. TheWith this in mind, we selected three third building provides data backup Business processes were extensivelykey strategic partners: SAP for cross- and archive services, using two IBM re-engineered to enable greaterenterprise business processes, PSI for System Storage TS3310 Tape Libraries harmonization of operationalfunctional coverage on the shopfloor, connected to the storage area network. activities across the company.and IBM as our comprehensive TKES runs its SAP Business Suiteinfrastructure supplier.” This fully virtualized landscape applications on IBM Power 770, IBM combines high performance for SAP Power 570 and IBM BladeCenterFully virtualized landscape applications with extreme flexibility and HS22 servers, with IBM SystemThe new centralized SAP APO superb availability. Using IBM PowerVM Storage DS5300 disk storage andlandscape runs in the main TKES virtualization technology on its Power IBM System Storage TS3310 Tapedata center, located in Gelsenkirchen, servers, TKES can easily and rapidly Library for backup and archive.Germany. The IBM infrastructure is create new virtual SAP environmentssplit across three separate buildings for to increase capacity, and to create test This landscape runs in theadded protection against disaster, with and development servers. companys Gelsenkirchenfiber-optic connections providing the data center, while the separaterequired high-speed mirroring of data. The use of a mirrored SAN enables SAP PSI shopfloor control solution production and shop floor databases to – PSImetals – runs on IBMIn the first building, the multiple SAP be seamlessly moved from the Power BladeCenter servers in four of thecentral instances and database servers in the primary building to the five manufacturing locations.servers for PSImetals run on an IBM backup location, providing businessPower 770 server with IBM POWER7 continuity in the event of planned or 3
  • 4. unplanned downtime. The PSImetals application servers running on IBM BladeCenter are also protected in the “The IBM technologies same way, providing very high resilience effectively give us for the complete application landscape. a private cloud:Key Solution Components a set of standard In steel manufacture, production components thatIndustry stoppages are costly, so TKES tries we can orchestrateIndustrial Products to keep its plants running around the to achieve whatever clock. The high availability of the IBM goals we have. BothApplications infrastructure allows the company to the IBM hardwareSAP® Business Suite applications, have just one planned maintenance and the SAP softwareSAP NetWeaver®, SAP Supply Chain window each year of just two hours. ensure that weManagement and SAP Advance never come upPlanning and Optimization, PSImetals “The combination of IBM Power against any barriers Systems and BladeCenter with SAN when designingHardware Volume Controller provided the end- and executing ourIBM® Power® 770, IBM Power 570, to-end virtualization we wanted across business processes.” both servers and storage,” saysIBM BladeCenter® H, IBM System Michael Brüne. “In practical terms, theStorage® DS5300, IBM System Carsten Kübler separation of the logical architectureStorage TS3310 Tape Library Head of Infrastructure from the physical infrastructure makes TKES it much easier to protect against theSoftware failure of any individual componentsIBM AIX®, IBM System Storage SAN — because the environment canVolume Controller automatically recover the workload (scale-out) scalability. For the Power on an identical component in the Systems servers, TKES can use IBM second location. The IBM virtualization PowerVM to allocate and reallocate the technologies enable great speed and processing resources flexibly across flexibility, in addition to making it easy to an extremely large number of virtual expand the SAP landscape.” servers. Scaling up to global challenges The company can also add further The IBM infrastructure offers both POWER7 and POWER6 processors vertical (scale-up) and horizontal to the shared pools if its business 4
  • 5. requirements grow significantly. Equally, quality steels at the right price andit can easily and rapidly slot new HS22 within the timescales specified by itsblades into the BladeCenter systems as industrial customers.application workload grows. Competition is fierce, so TKES needs to“In parallel with the standardization minimize operational losses and costs Business Benefitsof our business processes, we have by achieving extremely high efficiencyachieved a standardization of the throughout the supply chain. With standardized businesscomponents of the IT infrastructure,” processes and user interfaces,explains Carsten Kübler, who has By standardizing its business the SAP solutions enable highlyoverall responsibility for the IT processes on SAP Business Suite efficient and responsive controlinfrastructure at TKES. applications, and tightly integrating over operations, with all reporting them with the production processes from a single version of the truth.“The IBM technologies effectively give managed using PSImetals, TKES has The flexible and highly scalable IBMus a private cloud: a set of standard enabled fast and efficient production infrastructure offers extremely highcomponents that we can orchestrate from order entry to delivery. availability to support round-the-to achieve whatever goals we have. clock manufacturing operations.Both the IBM hardware and the Moreover, the use of common business TKES estimates that the combinedSAP software ensure that we never definitions and data standards enables IBM, SAP and PSI solution deliverscome up against any barriers when accurate reporting in real time, allowing cost savings of 25 to 30 percentdesigning and executing our business business managers to see and over comparable solutions, thanksprocesses.” understand the status of manufacturing to its efficiency, consistency and across all plants. reliability. SAP Advance Planning andTKES also deployed mirrored IBM Optimization allows TKES to extractBladeCenter servers to run its TKES uses the SAP APO application the maximum usable materialPSImetals shopfloor solution in four to book customer orders, plan and amount from each coil, reducingproduction plants. In practical terms, allocate production orders, report on waste and increasing profitability. Onstandardizing on BladeCenter reduces finished materials and their status, plan the shopfloor, PSImetals supportsthe total number of technical skill sets shipping, issue invoices, and manage all the fulfillment of TKES’ business andthe company needs to maintain, and related administrative processes. manufacturing processes at eachenables more efficient IT procurement. location by optimizing production Through a standardized interface, the processes and minimizing defects.Highly integrated solution SAP applications exchange informationBusiness success at TKES hinges on on intermediate and finished productsthe companys ability to supply high- with the plant systems. 5
  • 6. There are approximately 1,000registered users of the SAPapplications, of which 290 on average “Our investment in awork concurrently. The powerful flexible solution fromIBM infrastructure helps deliver IBM, SAP and PSI willexcellent response times, and all five continue to delivermanufacturing locations use the same benefits into thesingle SAP central instance. future, driving greater efficiency and speedKarlheinz Boländer, responsible for in our manufacturingSAP projects at TKES, emphasizes processes whilethe importance of a corporate-wide continuing to pushstandardized application landscape: down costs in IT“The integration of all locations in one operations.”single SAP environment enables theefficient administration of all users Michael Brüneunder a single common standard. Head of Information TechnologyEqually, identical algorithms and TKESdatabases ensure a ‘single source oftruth’ for reporting.”“The high degree of integration in thissolution supports governance and PSImetals collects, monitors andcompliance initiatives, and gives us continuously analyzes all material data,a corporate template for operations. enabling sophisticated tracking. ForThis template will mean substantially example, TKES can completely trackreduced effort and cost to absorb any each end-product back to the hot rolledfuture moves the company may make.” coil from which it was made, ensuring complete traceability and supportingTight integration of the central SAP the highest quality standards insystem with the PSImetals instance in manufacture.each manufacturing location enablesall inventory data to be accessed at any TKES customer orders define thetime. During the production process, specific type of steel needed. Starting 6
  • 7. with the hot-rolled coils, processesknown as rolling, annealing, coating,side trimming, repairing and slittingprovide the variations required bythe customer. A key challenge is tomaximize the material yield from eachcoil with minimum wastage, and tooptimize the manufacturing operationsfor each coil.Robert Gieselmann, responsible forPSI shopfloor solutions at TKES,comments: “The open architectureand the modularity of PSImetals make Hardware infrastructure at the TKES datacentercustomer-specific customizations perlocation possible with special plug-insusing the same technology. That offers similar steels to a single production run,additional flexibility when business maximizing efficiency, reducing deliveryprocesses change. times and reducing manufacturing costs in a way that was not previouslyPSImetals integrates extremely well possible.with SAP applications; in fact, thesolution is certified as ‘Powered by SAP Proven cost savingsNetWeaver’. The practical outcome is The early decision to establish asmooth exchange of data between our consistent and standardized systemSAP system and the manufacturing and application architecture throughoutplants.” TKES is now paying significant dividends. Michael Brüne comments:TKES deploys SAP Advance Planning “Standardization took time and effort,and Optimization, which allows the but it has already more than repaid ourcompany to plan the allocation of investment.customer orders and processes acrossmultiple business units. This makes Today, TKES can operate efficientlyit possible to consolidate orders for with a small set of highly flexible 7
  • 8. IBM Deutschland GmbH D-70548 Stuttgart ibm.com/solutions/sap IBM, the IBM logo, and ibm.com are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at http://www.ibm.com/legal/copytrade.shtml Intel, the Intel logo, Intel Xeon and the Intel Xeonand scalable resources. Our recent during the last years, we see a clear logo are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the Unitedexperience has proven that we can economic advantage. States and other countries. UNIX is a registered trademark of The Open Group in the United Statesintegrate entire new production and other countries. Linux is a trademark of Linus Torvalds in the United States, other countries, orlocations into the common landscape "We estimate that our IBM, SAP and both. Microsoft, Windows, Windows NT, and thequickly and without any productivity PSI landscape offers IT cost savings of Windows logo are trademarks of Microsoft Corporation in the United States, other countries,losses.” 25 to 30 percent against comparable or both. solutions. And the high degree of Other company, product or service names may be trademarks, or service marks of others.In practical terms, having an integrated abstraction and virtualization in the This case study illustrates how one IBM customer uses IBM and/or IBM Business PartnerIBM environment, with applications solution means that we can easily technologies/services. Many factors haveand services on the best IT platform benefit from ongoing technology contributed to the results and benefits described. IBM does not guarantee comparable results. Allfor the task keeps IT operational costs refreshes to improve the performance information contained herein was provided by the featured customer and/or IBM Business Partner.low and makes it easy to replace or of our systems, without requiring any IBM does not attest to its accuracy. All customer examples cited represent how some customersupgrade the underlying components. changes to the logical architecture.” have used IBM products and the results they may have achieved. Actual environmental costs andThis means that TKES can easily performance characteristics will vary dependingbenefit from continuous improvements He concludes, “Our investment in a on individual customer configurations and conditions.in the price-performance ratio of the flexible solution from IBM, SAP and PSI This publication is for general guidance only.latest hardware and software, and runs will continue to deliver benefits into the Photographs may show design models. © Copyright IBM Corp. 2011. All rights reserved.a fully optimized IT environment. future, driving greater efficiency and speed in our manufacturing processesMichael Brüne says, “Having while continuing to push down costs inparticipated in multiple benchmarks IT operations.” © Copyright 2011 SAP AG SAP AG Dietmar-Hopp-Allee 16 D-69190 Walldorf SAP, the SAP logo, SAP and all other SAP products and services mentioned herein are trademarks or registered trademarks of SAP AG in Germany and several other countries. SPC03334-DEEN-00 (June 2011)

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